<PAGE> 1
As filed with the Securities and Exchange Commission on
April 5, 2000
Registration No. 333-95163
-------------------------------
-------------------------------
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
(Depositor)
5900 "O" Street
Lincoln, Nebraska 68510
----------------
Donald R. Stading
Secretary and General Counsel
Ameritas Variable Life Insurance Company
5900 "O" Street
Lincoln, Nebraska 68510
-----------------
Title of Securities Being Registered: Securities of Unit Investment Trust
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> 2
RECONCILIATION AND TIE BETWEEN ITEMS IN FORM N-8B-2
AND THE PROSPECTUS
<TABLE>
<CAPTION>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
<S> <C>
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; Calvert Variable Series, Inc. Ameritas Portfolios,
Calvert Variable Series, Inc., Variable Insurance Products Fund,
Variable Insurance Products Fund II, The Alger American Fund,
MFS Variable Insurance Trust, The Universal Institutional Funds,
Inc.
17 Summary, Policy Rights
18 Calvert Variable Series, Inc. Ameritas Portfolios, Calvert
Variable Series, Inc., Variable Insurance Products Fund,
Variable Insurance Products Fund II, The Alger American Fund,
MFS Variable Insurance Trust, The Universal Institutional Funds,
Inc.
19 General Provisions; Voting Rights
20 Not Applicable
21 Summary; Policy Rights, Loan Benefits; General Provisions
22 Not Applicable
23 Safekeeping of the Separate 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; Ameritas Variable
Life Insurance Company
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 Required
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
<S> <C>
42 Not Applicable
43 Not Applicable
44 Accumulation Value, Payment and Allocation of Premiums
45 Not Applicable
46 The Funds; Accumulation Value
47 The Funds
48 State Regulation of AVLIC
49 Not Applicable
50 The Separate Account
51 Cover Page; Summary; Policy Benefits; Payment and Allocation of
Premiums, 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
</TABLE>
<PAGE> 4
PROSPECTUS
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
Corporate Benefit VUL -- A Flexible Premium Variable Universal Life 5900 "O"
Street
Insurance Policy issued by Ameritas Variable Life Insurance Company P.O. Box
82550/Lincoln, NE 68501
- --------------------------------------------------------------------------------
Corporate Benefit VUL is a flexible premium variable universal life insurance
Policy ("Policy") issued by Ameritas Variable Life Insurance Company ("AVLIC").
Corporate Benefit VUL is designed primarily for an employer who is seeking a
cost-effective and tax-efficient means of informally funding a non-qualified
deferred compensation plan for its key executives. Like traditional life
insurance policies, a Corporate Benefit VUL Policy provides Death Benefits to
Beneficiaries and gives you, the Policy Owner, the opportunity to increase the
Policy's value. Unlike traditional policies, Corporate Benefit VUL lets you vary
the frequency and amount of premium payments, rather than follow a fixed premium
payment schedule. It also lets you change the level of Death Benefits as often
as once each year.
A Corporate Benefit VUL Policy is different from traditional life insurance
policies in another important way: the Policy Owner selects how Policy premiums
will be invested. Although the Policy guarantees a minimum Death Benefit as long
as the Policy remains in force, the value of the Policy, as well as the actual
Death Benefit, will vary with the performance of investments you select.
The Investment Options available through Corporate Benefit VUL include
investment portfolios managed by Ameritas Investment Corp., Calvert Asset
Management Company, Inc., Fidelity Management & Research Company, Fred Alger
Management, Inc., Massachusetts Financial Services Company, and Morgan Stanley
Dean Witter Investment Management Inc. Each of these portfolios has its own
investment objective and policies. These are described in the prospectuses for
each investment portfolio which must accompany this Corporate Benefit VUL
prospectus. You may also choose to allocate premium payments to the Fixed
Account managed by AVLIC.
A Corporate Benefit VUL Policy will be issued after AVLIC accepts a prospective
Policy Owner's application. Generally, an application must specify a minimum
Death Benefit of $100,000 ($50,000 if the Term Insurance Rider is attached to
the Policy). Corporate Benefit VUL Policies are available on individuals ages 18
to 65 at the time of purchase if guaranteed or simplified underwriting is used
and ages 18 to 85 with regular underwriting. A Corporate Benefit VUL Policy,
once purchased, may generally be canceled within 10 days after you receive it.
This Corporate Benefit VUL prospectus is designed to assist you in understanding
the opportunities and risks associated with the purchase of a Corporate Benefit
VUL Policy. Prospective Policy Owners are urged to read the prospectus carefully
and retain it for future reference.
This prospectus includes a summary of the most important features of the
Corporate Benefit VUL Policy, information about AVLIC, a list of the investment
portfolios to which you may allocate premium payments, as well as a detailed
description of the Corporate Benefit VUL Policy. The appendix to the prospectus
includes tables designed to illustrate how values and Death Benefits may change
with the investment experience of the Investment Options.
This prospectus must be accompanied by a prospectus for each of the investment
portfolios available through this Policy.
Although the Corporate Benefit VUL Policy is designed to provide life insurance,
a Corporate Benefit VUL Policy is considered to be a security. It is not a
deposit with, an obligation of, or guaranteed or endorsed by any banking
institution, nor is it insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board, or any other agency. The purchase of a Corporate Benefit
VUL Policy involves investment risk, including the possible loss of principal.
For this reason, Corporate Benefit VUL may not be suitable for all businesses.
It may not be advantageous to purchase a Corporate Benefit VUL Policy as a
replacement for another type of life insurance or as a way to obtain additional
insurance protection if the purchaser already owns another flexible premium
variable universal life insurance policy on the Insured. In addition, the tax
consequences of continuing coverage beyond age 100 are uncertain, and the Policy
Owner should consult a tax adviser as to the potential consequences.
The Securities and Exchange Commission ("SEC") maintains a web site
(http://www.sec.gov) that contains other information regarding registrants that
file electronically with the Securities and Exchange Commission.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATORY AUTHORITY HAS APPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
May 1, 2000
CORPORATE BENEFIT VUL
1
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
DEFINITIONS................................................. 3
SUMMARY..................................................... 5
YEAR 2000................................................... 12
AVLIC, THE SEPARATE ACCOUNT AND THE FUNDS................... 12
Ameritas Variable Life Insurance Company.............. 12
The Separate Account.................................. 13
Performance Information............................... 13
The Funds............................................. 13
Investment Objectives and Policies of the Funds'
Portfolios........................................... 16
Addition, Deletion or Substitution of Investments..... 19
Fixed Account......................................... 20
POLICY BENEFITS............................................. 20
Purposes of the Policy................................ 20
Death Benefit Proceeds................................ 21
Death Benefit Options................................. 21
Methods of Affecting Insurance Protection............. 23
Duration of the Policy................................ 23
Accumulation Value.................................... 23
Payment of Policy Benefits............................ 24
POLICY RIGHTS............................................... 25
Loan Benefits......................................... 25
Surrenders............................................ 26
Partial Withdrawals................................... 26
Transfers............................................. 27
Systematic Programs................................... 27
Free Look Privilege................................... 28
PAYMENT AND ALLOCATION OF PREMIUMS.......................... 28
Issuance of a Policy.................................. 28
Premiums.............................................. 29
Allocation of Premiums and Accumulation Value......... 30
Policy Lapse and Reinstatement........................ 30
CHARGES AND DEDUCTIONS...................................... 31
Deductions From Premium Payments (Percent of Premium
Charge).............................................. 31
Charges From Accumulation Value....................... 31
Daily Charges Against the Separate Account............ 32
GENERAL PROVISIONS.......................................... 33
DISTRIBUTION OF THE POLICIES................................ 35
FEDERAL TAX MATTERS......................................... 36
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS................ 39
THIRD PARTY SERVICES........................................ 39
VOTING RIGHTS............................................... 39
STATE REGULATION OF AVLIC................................... 40
EXECUTIVE OFFICERS AND DIRECTORS OF AVLIC................... 40
LEGAL MATTERS............................................... 42
LEGAL PROCEEDINGS........................................... 42
EXPERTS..................................................... 42
ADDITIONAL INFORMATION...................................... 42
FINANCIAL STATEMENTS........................................ 42
AMERITAS VARIABLE LIFE INSURANCE COMPANY SEPARATE ACCOUNT
V......................................................... F-I-1
AMERITAS VARIABLE LIFE INSURANCE COMPANY.................... F-II-1
APPENDICES.................................................. A-1
</TABLE>
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, SALESPERSON, 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.
CORPORATE BENEFIT VUL
2
<PAGE> 6
DEFINITIONS
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 Separate
Account V, the Fixed Account, and any Accumulation Value held in the General
Account which secures Outstanding Policy Debt.
ADMINISTRATIVE EXPENSE CHARGE - A charge, which is part of the Monthly
Deduction, to cover the cost of administering the Policy.
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE - A daily charge that is deducted from
the overall assets of Separate Account V to provide for expenses of ongoing
administrative services to the Policy Owners as a group.
ATTAINED AGE - The Issue Age of the Insured plus the number of complete Policy
Years that the Policy has been in force.
AVLIC ("WE, US, OUR") - Ameritas Variable Life Insurance Company, a Nebraska
stock company. AVLIC's Home Office is located at 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 the sections on Beneficiary and
Change of Beneficiary.)
COST OF INSURANCE - A charge deducted monthly from the Accumulation Value to
provide the life insurance protection. The Cost of Insurance is calculated with
reference to an annual "Cost of Insurance Rate." This rate is based on the
Insured's gender (where applicable), Issue Age, Policy duration, and risk class.
The Cost of Insurance is part of the Monthly Deduction.
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 through the
month of death.
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.
GENERAL ACCOUNT - The General Account of AVLIC includes all of AVLIC's assets
except those assets segregated into separate accounts such as Separate Account
V.
GRACE PERIOD - A 61 day period from the date written notice of lapse is mailed
to the Policy Owner's last known address. If the Policy Owner 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.
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.
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.
CORPORATE BENEFIT VUL
3
<PAGE> 7
MORTALITY AND EXPENSE RISK CHARGE - A daily charge that is deducted from the
overall assets of Separate Account V to provide for the risk that mortality and
expense costs may be greater than expected.
NET CASH SURRENDER VALUE - The Accumulation Value of the Policy on any Valuation
Date (including for this purpose, the date of Surrender), less any Outstanding
Policy Debt and any Accrued Expense Charges.
NET PREMIUM - Premium paid less the Percent of Premium Charge.
OUTSTANDING POLICY DEBT - The sum of all unpaid Policy loans and accrued
interest on Policy loans.
PERCENT OF PREMIUM CHARGE - The amount deducted from each premium received to
cover certain expenses such as premium-based taxes, expressed as a percentage of
the premium. (See the section on Deductions From Premium Payment.)
PLANNED PERIODIC PREMIUMS - A selected schedule of equal premiums payable at
fixed intervals. The Policy Owner is not required to follow this schedule, nor
does following this schedule ensure that the Policy will remain in force.
POLICY - The flexible premium variable universal life insurance Policy offered
by AVLIC and described in this prospectus.
POLICY ANNIVERSARY DATE - The same day as the Policy Date for each year the
Policy remains in force.
POLICY DATE - The effective date for all coverage provided in the application.
The Policy Date is used to determine Policy Anniversary Dates, Policy Years and
Monthly Activity Dates. Policy Anniversaries are measured from the Policy Date.
The Policy Date and the Issue Date will be the same unless: (1) an earlier
Policy Date is specifically requested, or (2) there are additional premiums or
application amendments at time of delivery. (See the section on Issuance of a
Policy.)
POLICY OWNER - ("YOU, YOUR") 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 Policy Owner. A collateral assignee is not the
Policy Owner.
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.
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.
SEPARATE ACCOUNT V - 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 Policy Owner to Separate Account V.
Separate Account V is segregated from the General Account and all other assets
of AVLIC.
SPECIFIED AMOUNT - The minimum Death Benefit under the Policy, as selected by
the Policy Owner.
SUBACCOUNT - A subdivision of Separate Account V. Each Subaccount invests
exclusively in the shares of a specified portfolio of the Funds.
SURRENDER - The termination of the Policy during the Insured's life for the Net
Cash Surrender Value.
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.
CORPORATE BENEFIT VUL
4
<PAGE> 8
SUMMARY
The following summary of prospectus information and diagram of the Policy should
be read along with the detailed information found elsewhere in this prospectus.
Unless stated otherwise, 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
Percent of Premium Charge -- currently 3.0% (maximum 5.0%)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET PREMIUMS
The Net Premium may be invested in the Fixed Account or in Separate Account V
which offers 31 different Subaccounts. The Subaccounts invest in the
corresponding portfolios of Calvert Variable Series, Inc. Ameritas Portfolios,
Calvert Variable Series, Inc., Variable Insurance Products Fund, Variable
Insurance Products Fund II, The Alger American Fund, MFS(R) Variable Insurance
Trust, or The Universal Institutional Funds, Inc. ("Funds").
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS
Monthly charge for Cost of Insurance and cost of any riders. The charge varies
by the Policy duration and the Issue Age, gender, and risk class of the
Insured. (See the Policy Schedule for rates.) Monthly per Policy charge for
administrative expenses:
<TABLE>
<CAPTION>
CURRENT MAXIMUM
MONTHLY MONTHLY
CHARGE CHARGE
------- -------
<S> <C> <C>
Policy Year
1 $15.00 $15.00
2+ $ 7.00 $12.00
</TABLE>
Monthly per $1000 charge for administrative expenses:
The first ten Policy Years (or for the life of the Policy where required by
state law), there is a monthly charge per $1000 of initial Specified Amount
(maximum monthly charge $1.97 per $1000). In addition, there is a monthly
charge per $1000 of each increase in Specified Amount for ten years from the
date of increase (or life of the Policy, where required) (maximum monthly
charge $1.97 per $1000). The per $1000 rates for both the initial Specified
Amount and each increase vary by Issue Age, gender, and risk class. (See the
Policy Schedule for rates.)
Daily charge from the Subaccounts (not deducted from the Fixed Account):
<TABLE>
<CAPTION>
CURRENT ANNUAL MAXIMUM
CHARGE ANNUAL CHARGE
POLICY YEARS POLICY YEARS
-------------- --------------
1-15 16+ 1-15 16+
----- ----- ----- -----
<S> <C> <C> <C> <C>
Mortality and Expense Risk Charge 0.75% 0.30% 0.95% 0.50%
Asset-Based Administrative Expense Charge 0.15% 0.15% 0.15% 0.15%
----- ----- ----- -----
Combined annual rate of Subaccount daily charges 0.90% 0.45% 1.10% 0.65%
</TABLE>
Fund expense charges, which ranged from .28% to 1.79% at the most recent
fiscal year end, are also deducted.
There is no surrender charge.
- --------------------------------------------------------------------------------
LIVING BENEFITS
You may make partial withdrawals, subject to certain restrictions. The Death
Benefit will be reduced by the amount of the partial withdrawal. Partial
withdrawals are subject to a maximum charge of the lesser of $50 (currently $25)
or 2% of the amount withdrawn. AVLIC guarantees up to 15 free transfers between
the Investment Options each Policy Year. After that, a $10 charge may be made
for each transfer. Under current practice, unlimited free transfers are
permitted.
You may Surrender the Policy at any time for its Net Cash Surrender Value.
RETIREMENT INCOME BENEFITS
Loans may be available on a more favorable interest rate basis after the tenth
Policy Year. Should the Policy lapse while loans are outstanding, the portion of
the loan attributable to earnings will become a taxable distribution. (See page
26.)
You may Surrender the Policy or make a partial withdrawal and take values as
payments under one or more of five different payment options.
DEATH BENEFITS
Generally, Death Benefit income is tax free to the Beneficiary. The Beneficiary
may be paid a lump sum or may select any of the five payment methods available
as retirement benefits.
CORPORATE BENEFIT VUL
5
<PAGE> 9
SUMMARY
The following summary is intended to highlight the most important features of a
Corporate Benefit VUL Policy that you, as a prospective Policy Owner, should
consider. You will find more detailed information in the main portion of the
prospectus; cross-references are provided for your convenience. Capitalized
terms are defined in the Definitions section that begins on page 3 of this
prospectus. This summary and all other parts of this prospectus are qualified in
their entirety by the terms of the Corporate Benefit VUL Policy, which is
available upon request from AVLIC.
WHO IS THE ISSUER OF A CORPORATE BENEFIT VUL POLICY?
AVLIC is the issuer of each Corporate Benefit VUL Policy. AVLIC enjoys a rating
of A (Excellent) for financial strength and operating performance from A.M. Best
Company, a firm that analyzes insurance carriers. This is the third highest of
Best's 15 categories. AVLIC is rated AA (Very Strong) for financial insurance
strength from Standard & Poor's. This is the third highest of Standard & Poor's
21 ratings. A stock life insurance company organized in Nebraska, AVLIC is a
wholly owned subsidiary of AMAL Corporation which is, in turn, owned by Ameritas
Life Insurance Corp. ("Ameritas Life") and AmerUs Life Insurance Company
("AmerUs Life"). Ameritas Life, AmerUs Life and AMAL Corporation guarantee the
obligations of AVLIC, including the obligations of AVLIC under each Corporate
Benefit VUL Policy; taken together, these companies have aggregate assets of
over $15.5 billion as of December 31, 1999. (See the section on Ameritas
Variable Life Insurance Company.)
WHAT IS THE PRIMARY PURPOSE OF PURCHASING A CORPORATE BENEFIT VUL POLICY?
The primary purpose of a Corporate Benefit VUL Policy is to serve as an informal
funding vehicle for various executive benefit arrangements. These arrangements
typically focus on one or more financial objectives, which can be met by the
following characteristics of the Corporate Benefit VUL Policy:
- - payment of a Death Benefit, which will never be less than the Specified Amount
the Policy Owner selects (See the section on Death Benefit Options.)
- - accessability of Policy values through Policy loan, Surrender and withdrawal
features (See the section on Policy Rights.)
- - ability to direct the manner in which the net premiums will be invested. So
long as the Policy is in force, the Policy Owner will be responsible for
selecting the manner in which Net Premiums will be invested. Thus, the value
of a Corporate Benefit VUL Policy will reflect your investment choices over
the life of the Policy.
WHAT ARE THE CHARGES ASSOCIATED WITH OWNERSHIP OF A CORPORATE BENEFIT VUL
POLICY?
Certain states impose premium and other taxes in connection with insurance
policies such as Corporate Benefit VUL. AVLIC may deduct up to 5.0% of each
premium as a Percent of Premium Charge. Currently, the charge is 3.0%.
Charges are deducted against the Accumulation Value to cover the Cost of
Insurance under the Policy and to compensate AVLIC for administering each
individual Corporate Benefit VUL Policy. These charges, which are part of the
Monthly Deduction, are calculated and deducted on each Monthly Activity Date.
The Cost of Insurance is calculated based on risk factors relating to the
Insured as reflected in relevant actuarial tables.
There are two separate charges for administration of the Policy -- a monthly
Administrative Expense Charge, and a daily Asset-Based Administrative Expense
Charge. The monthly Administrative Expense Charge itself has three components:
(1) a per Policy charge; (2) a charge per $1000 of initial specified amount; and
(3) a charge per $1000 of each increase in specified amount. Currently, the per
Policy charge is $15 per month in the first Policy Year and $7 per month
thereafter. The per Policy portion of the Administrative Expense Charge is
levied throughout the life of the Policy and is guaranteed not to increase above
$15 per month in the first Policy Year and $12 per month thereafter. During the
first ten Policy Years (or for the life of the Policy where required by state
law), there is a monthly charge per $1000 of initial Specified Amount. In
addition, there is a monthly charge per $1000 of each increase in Specified
Amount for ten years from the date of increase (or life of the Policy, where
required). The per $1000 rates for both the initial Specified Amount and each
increase vary by Issue Age, gender, and risk
CORPORATE BENEFIT VUL
6
<PAGE> 10
class. The current charge per $1000 is the same as the maximum charge. (See the
section on Charges from Accumulation Value.)
For its services in administering Separate Account V and Subaccounts and as
compensation for bearing certain mortality and expense risks, AVLIC is also
entitled to receive fees. These fees are calculated and deducted daily during
the first 15 Policy Years, at a combined current annual rate of 0.90% (maximum
1.10%) of the value of the net assets of Separate Account V. After the 15th
Policy Anniversary Date, the combined current annual rate is expected to
decrease to 0.45% (maximum 0.65%) of the daily net assets of Separate Account V.
These charges will not be deducted from the amounts in the Fixed Account. (See
the section on Daily Charges Against the Separate Account.)
FUND EXPENSE SUMMARY. In addition to the charges against Separate Account V
described just above, management fees and expenses will be assessed by the fund
managers against the amounts invested in the various portfolios. No portfolio
fees will be assessed against amounts placed in the Fixed Account.
The information shown below 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 entitled to receive a fee for its
services based on the value of the relevant portfolio's net assets. Each Fund,
other than the Ameritas Portfolios and CVS Social Portfolios, is managed by an
organization that is not affiliated with AVLIC. The Ameritas Portfolios are
managed by Ameritas Investment Corp., an AVLIC affiliate. CVS Social Portfolios
are managed by Calvert Asset Management Company, Inc., also an AVLIC affiliate.
Other Calvert companies provide administrative services to certain of the
portfolios. Unless otherwise noted, the amount of expenses, including the asset
based advisory fee referred to above, borne by each portfolio for the fiscal
year ended December 31, 1999, was as follows:
<TABLE>
<CAPTION>
TOTAL
(Reflecting
INVESTMENT WAIVERS waivers and/or
ADVISORY & 12b-1 OTHER AND/OR reimbursements,
PORTFOLIO MANAGEMENT EXPENSE EXPENSES TOTAL REIMBURSEMENTS If any)
--------- ---------- -------- -------- ----- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
AMERITAS PORTFOLIOS(1)
Ameritas Money Market 0.25% -- 0.08% 0.33% 0.05% 0.28%
Ameritas Index 500 0.29% -- 0.11% 0.40% 0.10% 0.30%
Ameritas Growth 0.80% -- 0.10% 0.90% 0.09% 0.81%
Ameritas Income & Growth 0.675% -- 0.115% 0.79% 0.09% 0.70%
Ameritas Small Capitalization 0.90% -- 0.10% 1.00% 0.08% 0.92%
Ameritas MidCap Growth 0.85% -- 0.12% 0.97% 0.11% 0.86%
Ameritas Emerging Growth 0.80% -- 0.18% 0.98% 0.11% 0.87%
Ameritas Research 0.80% -- 0.62% 1.42% 0.54% 0.88%
Ameritas Growth With Income 0.80% -- 0.46% 1.26% 0.36% 0.90%
CVS SOCIAL PORTFOLIOS
CVS Social Small Cap Growth 1.00% -- 0.58%(2) 1.58% -- 1.58%
CVS Social Mid Cap Growth 0.90% -- 0.21%(2) 1.11% -- 1.11%
CVS Social International
Equity 1.10% -- 0.50%(2) 1.60%(3) -- 1.60%
CVS Social Balanced 0.70% -- 0.19%(2) 0.89% -- 0.89%
FIDELITY PORTFOLIOS
VIP Equity-Income:
Service Class 0.48% 0.10% 0.09% 0.67% -- 0.67%(4)
VIP Growth:
Service Class 0.58% 0.10% 0.09% 0.77% -- 0.77%(4)
VIP High Income:
Service Class 0.58% 0.10% 0.11% 0.79% -- 0.79%
VIP Overseas:
Service Class 0.73% 0.10% 0.18% 1.01% -- 1.01%(4)
VIP II Asset Manager:
Service Class 0.53% 0.10% 0.11% 0.74% -- 0.74%(4)
VIP II Investment Grade Bond:
Initial Class 0.43% -- 0.11% 0.54% -- 0.54%
VIP II Asset Manager: Growth:
Service Class 0.58% 0.10% 0.14% 0.82% -- 0.82%(4)
VIP II Contrafund(R):
Service Class 0.58% 0.10% 0.10% 0.78% -- 0.78%(4)
</TABLE>
CORPORATE BENEFIT VUL
7
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
ALGER AMERICAN FUND(5)
Balanced 0.75% -- 0.18% 0.93% -- 0.93%
Leveraged AllCap 0.85% -- 0.08% 0.93% -- 0.93%
MFS TRUST
Utilities 0.75% -- 0.16%(6) 0.91% -- 0.91%
Global Governments 0.75% -- 0.30%(6) 1.05% 0.14% 0.91%(7)
New Discovery 0.90% -- 1.59%(6) 2.49% 1.42% 1.07%(7)
UNIVERSAL INSTITUTIONAL FUNDS
Emerging Markets Equity 1.25% -- 1.37% 2.62% 0.83% 1.79%(8)
Global Equity 0.80% -- 0.68% 1.48% 0.33% 1.15%(8)
International Magnum 0.80% -- 0.87% 1.67% 0.51% 1.16%(8)
Asian Equity 0.80% -- 2.23% 3.03% 1.76% 1.27%(8)
U.S. Real Estate 0.80% -- 1.10% 1.90% 0.80% 1.10%(8)
</TABLE>
- ---------------
(1) The portfolios' aggregate expenses are limited for a period of one year
following November 1, 1999 (October 29, 1999 for Ameritas Money Market).
Following this one year period, expenses of the Ameritas Portfolios will not
be permitted to exceed an expense ratio which is .10% greater than the prior
expense ratio of the corresponding replaced fund, unless an amendment to the
investment advisory contract is approved modifying or eliminating the
expense guarantee. Total expenses have been restated to reflect the above.
(2) "Other Expenses" reflect an indirect fee. Net fund operating expenses after
reductions for fees paid indirectly would be as follows:
<TABLE>
<S> <C>
CVS Social Small Cap Growth 1.15%
CVS Social Mid Cap Growth 1.02%
CVS Social International Equity 1.50%
CVS Social Balanced 0.86%
</TABLE>
(3) Total expenses have been restated to reflect expenses expected to be
incurred in 2000, resulting from a change in 1999 to the administrative
services agreement, as approved by the shareholders.
(4) A portion of the brokerage commissions that certain Funds pay was used to
reduce Fund expenses. In addition, through arrangements with certain Funds
custodian, credits realized as a result of uninvested cash balances were
used to reduce a portion of each applicable Fund's expenses. After these
reductions, the total operating expenses presented in the table would have
been:
<TABLE>
<S> <C>
VIP Equity-Income: Service Class 0.66%
VIP Growth: Service Class 0.75%
VIP Overseas: Service Class 0.98%
VIP II Asset Manager: Service Class 0.73%
VIP II Asset Manager: Growth: Service Class 0.81%
VIP II Contrafund: Service Class 0.75%
</TABLE>
(5) Fred Alger Management, Inc. ("Alger Management") has agreed to reimburse the
portfolios to the extent that the aggregate annual expenses (excluding
interest, taxes, fees for brokerage services and extraordinary expenses)
exceed respectively: Alger American Balanced, 1.25%, and Alger American
Leveraged AllCap, 1.50%. Included in "Other Expenses" of Leveraged AllCap is
0.01% of interest expense.
(6) Each MFS Trust series has an expense offset arrangement which reduces the
series' custodian fee based upon the amount of cash maintained by the series
with its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements (which would
also have the effect of reducing the series' expenses). "Other Expenses" do
not take into account these expense reductions and are therefore higher than
the actual expenses of the series. Had these reductions been taken into
account, "Total (reflecting waivers and/or reimbursements, if
CORPORATE BENEFIT VUL
8
<PAGE> 12
any)" would be lower and would equal 0.90% for Utilities Series and Global
Governments Series and 1.05% for New Discovery Series.
(7) MFS has contractually agreed, subject to reimbursement, to bear expenses for
the Global Governments Series and New Discovery Series such that the each
series "Other Expenses" (after taking into account the expense offset
arrangement described at (6), above) do not exceed 0.15% of the average
daily net assets of the series during the current fiscal year. Utilities
Series has no such limitation. These contracted fee arrangements will
continue until at least May 1, 2001, unless changed with the consent of the
board of trustees which oversees the series.
(8) The portfolios' investment adviser has voluntarily agreed to reduce its
management fee and/or reimburse each portfolio so that total annual
operating expenses for each Universal Institutional Funds ("UIF") portfolio
will not exceed:
<TABLE>
<S> <C>
UIF Emerging Markets Equity 1.75%
UIF Global Equity 1.15%
UIF International Magnum 1.15%
UIF Asian Equity 1.20%
UIF U.S. Real Estate 1.10%
</TABLE>
The investment adviser reserves the right to terminate any waiver and/or
reimbursement at any time and without notice.
In determining the actual amount of voluntary management fee waiver and/or
expense reimbursement for a portfolio, if any, certain investment related
expenses, such as foreign country tax expense and interest expense on
borrowing are excluded from annual operating expenses. If these expenses
were incurred, the portfolios' total expenses after voluntary fee waivers
and/or expense reimbursements could exceed the expense ratios shown above.
For the year ended December 31, 1999, after giving effect to the above
voluntary management fee waiver and/or expense reimbursement, the total
expenses for each portfolio, including certain investment related expenses,
were as stated in the table.
Expense reimbursement 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.
AVLIC may receive administrative fees from the investment advisers of certain
Funds. AVLIC currently does not assess a separate charge against Separate
Account V 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
Separate Account V 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.
HOW DOES THE INVESTMENT COMPONENT OF THE CORPORATE BENEFIT VUL POLICY WORK?
AVLIC has established Separate Account V, which is separate from all other
assets of AVLIC, as a vehicle to receive and invest premiums received from
Corporate Benefit VUL Policy Owners and owners of certain other variable
universal life products offered by AVLIC. Separate Account V is divided into
separate Subaccounts. Each Subaccount invests exclusively in shares of one of
the investment portfolios available through Corporate Benefit VUL. Each Policy
Owner may allocate Net Premiums to one or more Subaccounts, or to AVLIC's Fixed
Account in the initial application. These allocations may be changed, without
charge, by notifying AVLIC's Home Office. The aggregate value of your interests
in the Subaccounts, the Fixed Account, and any amount held in the General
Account to secure Policy debt will represent the Accumulation Value of your
Corporate Benefit VUL Policy. (See the section on Accumulation Value.)
WHAT INVESTMENT OPTIONS ARE AVAILABLE THROUGH THE CORPORATE BENEFIT VUL POLICY?
The Investment Options available through Corporate Benefit VUL include 31
investment portfolios, each of which is a separate series of a mutual fund
managed by Ameritas Investment Corp., Calvert Asset Management Company, Inc.,
Fidelity Management & Research Company, Fred Alger Management, Inc.,
CORPORATE BENEFIT VUL
9
<PAGE> 13
Massachusetts Financial Services Company, or Morgan Stanley Dean Witter
Investment Management Inc. On December 1, 1998, Morgan Stanley Asset Management
Inc. changed its name to Morgan Stanley Dean Witter Investment Management Inc.,
but continues to do business in certain instances using the name Morgan Stanley
Asset Management. These portfolios are listed in the Fund Expense Summary above.
Details about the investment objectives and policies of each of the available
investment portfolios and management fees and expenses appear in the sections on
Investment Objectives and Policies of the Funds' Portfolios and Fund Expense
Summary. In addition to the listed portfolios you may also elect to allocate Net
Premiums to AVLIC's Fixed Account. (See the section on Fixed Account.)
HOW DOES THE LIFE INSURANCE COMPONENT OF A CORPORATE BENEFIT VUL POLICY WORK?
A Corporate Benefit VUL Policy provides for the payment of a minimum Death
Benefit upon the death of the Insured. The amount of the minimum Death
Benefit -- sometimes referred to as the Specified Amount of the Corporate
Benefit VUL Policy -- is chosen by you at the time your Corporate Benefit VUL
Policy is established. However, Death Benefit Proceeds -- the actual amount that
will be paid after AVLIC receives Satisfactory Proof of Death of the
Insured -- will vary over the life of your Corporate Benefit VUL Policy,
depending on which of the two available coverage options you select.
If you choose Option A, Death Benefit Proceeds payable under your Corporate
Benefit VUL Policy will be the Specified Amount of your Corporate Benefit VUL
Policy OR the applicable percentage of its Accumulation Value, whichever is
greater. If you choose Option B, Death Benefit Proceeds payable under your
Corporate Benefit VUL Policy will be the Specified Amount of your Corporate
Benefit VUL Policy PLUS the Accumulation Value of your Corporate Benefit VUL
Policy, or if it is higher, the applicable percentage of the Accumulation Value
on the date of death. In either case, the applicable percentage is established
based on the age of the Insured at the date of death. (See the section on Death
Benefit Options.)
ARE THERE ANY RISKS INVOLVED IN OWNING CORPORATE BENEFIT VUL POLICY?
Yes. Over the life of the Corporate Benefit VUL Policy, the Subaccounts to which
you allocate premiums will fluctuate with changes in the stock market and
overall economic factors. These fluctuations will be reflected in the
Accumulation Value of your Corporate Benefit VUL Policy and may result in loss
of principal. For this reason, the purchase of a Corporate Benefit VUL Policy
may not be suitable for all businesses. It may not be advantageous to purchase a
Corporate Benefit VUL Policy to replace or augment existing insurance
arrangements. Appendix A includes tables illustrating the impact that
hypothetical market returns would have on Accumulation Values under a Corporate
Benefit VUL Policy.
WHAT IS THE PREMIUM THAT MUST BE PAID TO KEEP A CORPORATE BENEFIT VUL POLICY IN
FORCE?
Like traditional life insurance policies, a Corporate Benefit VUL Policy
requires the payment of periodic premiums in order to keep the Policy in force.
You will be asked to establish a payment schedule before your Corporate Benefit
VUL Policy becomes effective.
The distinction between traditional life policies and a Corporate Benefit VUL
Policy is that a Corporate Benefit VUL Policy will not lapse simply because
premium payments are not made according to that payment schedule. However, a
Corporate Benefit VUL Policy will lapse, even if scheduled premium payments are
made, if the Net Cash Surrender Value of your Corporate Benefit VUL Policy falls
below zero. (See the section on Premiums.)
HOW ARE PREMIUMS PAID, PROCESSED AND CREDITED?
A Corporate Benefit VUL Policy will be issued after a completed application is
accepted, and the initial premium payment is received, by AVLIC at its Home
Office. AVLIC's Home Office is located at 5900 "O" Street, P.O. Box 82550,
Lincoln, NE 68501. The initial Net Premium will be allocated on the Issue Date
to the Subaccounts and/or the Fixed Account according to the selections made in
the application. When state or other applicable law or regulation requires
return of at least the premium payments, should you return the Policy under the
free-look privilege, the initial Net Premium will be allocated to the Money
Market Subaccount. Thirteen days after the Issue Date, the Accumulation Value of
the Policy will be
CORPORATE BENEFIT VUL
10
<PAGE> 14
allocated among the Subaccounts and/or the Fixed Account according to the
instructions in the application. You have the right to examine the Corporate
Benefit VUL Policy and return it for a refund for a limited time, even after the
Issue Date. (See the section on Issuance of a Policy.)
You may make subsequent premium payments, although you are not required to do
so. AVLIC will send premium payment notices to you according to any schedule you
select. When AVLIC receives a premium payment at its Home Office, we will deduct
any applicable Percent of Premium Charge and allocate the Net Premium to the
Subaccounts and/or the Fixed Account according to your selections. (See the
sections on Premiums and Allocations of Premiums and Accumulation Value.)
As already noted, Corporate Benefit VUL provides considerable flexibility in
determining the frequency and amount of premium payments. This flexibility is
not, however, unlimited. You should keep certain factors in mind in determining
the payment schedule that is best suited to your needs. These include the Cost
of Insurance needed to keep the Corporate Benefit VUL Policy in force; maximum
premium limitations established under the federal tax laws; and the impact that
reduced premium payments may have on the Net Cash Surrender Value of the
Corporate Benefit VUL Policy. (See the section on Premiums.)
IS THE ACCUMULATION VALUE OF THE CORPORATE BENEFIT VUL POLICY AVAILABLE WITHOUT
SURRENDER?
Yes. You may access the value of your Corporate Benefit VUL Policy in one of two
ways. After the first Policy Year, you may obtain a loan, secured by the
Accumulation Value of your Corporate Benefit VUL Policy. The maximum interest
rate on any such loan is 6% annually; the current rate is 5.5% annually. After
the tenth Policy Anniversary, you may borrow against a limited amount of the Net
Cash Surrender Value of your Corporate Benefit VUL Policy at a maximum annual
interest rate of 4%; the current rate for such loans is 3.5% annually. (See the
section on Loan Benefits.)
You may also access the value of your Corporate Benefit VUL Policy by making a
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). (See the section on Partial
Withdrawals.)
WHEN DOES THE CORPORATE BENEFIT VUL POLICY TERMINATE?
You may terminate the Corporate Benefit VUL Policy by Surrendering the Policy
during the lifetime of the Insured for its Net Cash Surrender Value. If you
surrender the Policy in the first two Policy Years, we will refund a portion of
the Percent of Premium Charge deducted in the first Policy Year. As noted above,
the Corporate Benefit VUL Policy will terminate if you fail to maintain
sufficient Net Cash Surrender Value to cover Policy charges. (See the sections
on Surrenders and Premiums.)
CORPORATE BENEFIT VUL
11
<PAGE> 15
YEAR 2000
Like other insurance companies and their separate accounts, AVLIC and Separate
Account V could be adversely affected if the computer systems they rely upon do
not properly process date-related information and data involving the years 2000
and after. This issue arose because both mainframe and PC-based computer
hardware and software have traditionally used two digits to identify the year.
For example, the year 1998 is input, stored and calculated as "98." Similarly,
the year 2000 would be input, stored and calculated as "00." If computers assume
this means 1900, it could cause errors in calculations, comparisons, and other
computing functions.
Like all insurance companies, AVLIC makes extensive use of dates and date
calculations. We began a corporate-wide Year 2000 (Y2K) project in mid-1996. Our
goal is to ensure that our computer systems continue to operate smoothly with no
service disruptions before, during or after the year 2000.
As of April 15, 2000, AVLIC has experienced no known Y2K problems. All of our
computer application and operating systems had been updated for the year 2000 by
December 31, 1998. Continuous testing and monitoring throughout 1999 helped
AVLIC continue to meet our contractual and service obligations to our customers.
In addition to our internal efforts, AVLIC is working closely with vendors and
other business partners to confirm that they too are addressing Y2K issues on a
timely basis. We believe that we are Y2K-compliant; however, in the event we or
our service providers, vendors, financial institutions or others with which we
conduct business, fail to be Y2K-compliant, there would be a materially adverse
effect on us. Certain vendors and/or business partners, due to their exposure to
foreign markets, may face additional Y2K issues. Please see the Funds'
prospectuses for information on the Funds' preparedness for Y2K.
AVLIC, THE SEPARATE ACCOUNT AND THE FUNDS
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 47 states, and the District of Columbia. AVLIC's
financial statements may be found at page F-II-1.
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 Life"), a Nebraska stock life insurance company, which owns a
majority interest in AMAL Corporation; and AmerUs Life Insurance Company
("AmerUs Life"), an Iowa stock life insurance company, which owns a minority
interest in AMAL Corporation. The Home Offices of both AVLIC and Ameritas Life
are at 5900 "O" Street, P.O. Box 82550, Lincoln, Nebraska 68501 ("Home Office").
AVLIC's telephone number is 800-745-1112 and its website address is
www.overturelife.com.
On April 1, 1996 Ameritas Life 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 AMAL Corporation is 66% owned by
Ameritas Life and 34% owned by AmerUs Life. AmerUs Life has options to purchase
an additional interest in AMAL Corporation if certain conditions are met. There
are no other owners of 5% or more of the outstanding voting securities of AVLIC.
Ameritas Life and its subsidiaries had total assets at December 31, 1999 of over
$4.8 billion. AmerUs Life had total assets as of December 31, 1999 of over $10.7
billion.
AVLIC has a rating of A (Excellent) for financial strength and operating
performance from A.M. Best Company, a firm that analyzes insurance carriers.
This is the third highest of Best's 15 categories. AVLIC, as part of the
Ameritas consolidated group, is rated AA (Very Strong) for insurer financial
strength from Standard & Poor's. This is the third-highest of Standard & Poor's
21 ratings. Ameritas Life enjoys a long standing A+ (Superior) rating from A.M.
Best, the second highest of Best's ratings.
Ameritas Life, 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 which has a
financial rating by a national rating agency equal to or greater than Ameritas
Life and which agrees to
CORPORATE BENEFIT VUL
12
<PAGE> 16
assume the guarantee. AmerUs Life will be relieved of its obligations under the
guarantee if it sells its interest in AMAL Corporation to another insurance
company which has a financial rating by a national rating agency equal to or
greater than that of AmerUs Life, and the purchaser assumes the guarantee.
Ameritas Investment Corp. ("AIC"), the principal underwriter of the Policies,
may publish in advertisements and reports to Policy Owners, the ratings and
other information assigned to Ameritas Life and AVLIC by one or more independent
rating services. Published material may also include charts and other
information concerning dollar cost averaging, portfolio rebalancing, earnings
sweep, tax-deference, asset allocation, diversification, long term market
trends, index performance and other investment methods and programs. The purpose
of the ratings is to reflect the financial strength of AVLIC. The ratings do not
relate to the performance of Separate Account V.
THE SEPARATE ACCOUNT
Ameritas Variable Life Insurance Company Separate Account V ("Separate Account
V") was established under Nebraska law on August 28, 1985. The assets of
Separate Account V 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 are not affected by income, gains, or losses of
AVLIC. Although the assets maintained in Separate Account V 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
Separate Account V of a total market value at least equal to the reserve and
other contract liabilities of Separate Account V. Separate Account V will at all
times contain assets equal to or greater than Accumulation Values invested in
Separate Account V. Nevertheless, to the extent assets in Separate Account V
exceed AVLIC's liabilities in Separate Account V, 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.
Separate Account V 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
Separate Account V. For state law purposes, Separate Account V is treated as a
Division of AVLIC.
PERFORMANCE INFORMATION
Performance information for the Subaccounts of Separate Account V and the Funds
available for investment by Separate Account V may appear in advertisements,
sales literature, or reports to Policy Owners 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, gender, 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 Separate Account V charges, including the Monthly
Deduction and the Percent of Premium 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 31 Subaccounts within Separate Account V available to Policy
Owners for new allocations. The assets of each Subaccount are invested in shares
of a corresponding portfolio of one of the following mutual Funds (collectively,
the "Funds"): Calvert Variable Series, Inc. Ameritas Portfolios ("Ameritas
Portfolios"); Calvert Variable Series, Inc. ("CVS Social Portfolios"); Variable
Insurance Products Fund and Variable Insurance Products Fund II, (respectively,
"VIP" and "VIP II"; collectively "Fidelity Portfolios"); The Alger American Fund
("Alger American Funds"); MFS Variable Insurance Trust ("MFS Trust"); and The
Universal Institutional Funds, Inc. ("Universal Institutional Funds"). The
Ameritas Portfolios receive investment advisory services from Ameritas
Investment Corp. ("AIC"). AIC, a registered investment adviser under the
Investment Advisers Act of 1940, is an affiliate of AVLIC and is
CORPORATE BENEFIT VUL
13
<PAGE> 17
the distributor for the Policies. AIC also contracts with subadvisers. The
following subadvisers provide investment subadvisory services to the indicated
portfolios:
<TABLE>
<CAPTION>
PORTFOLIO SUBADVISER
- --------- ----------
<S> <C>
Ameritas Money Market Calvert Asset Management Company, Inc.
Ameritas Index 500 State Street Global Advisors
Ameritas Growth Fred Alger Management, Inc. ("Alger Management")
Ameritas Income & Growth Alger Management
Ameritas Small Alger Management
Capitalization
Ameritas MidCap Growth Alger Management
Ameritas Emerging Growth Massachusetts Financial Services Company ("MFS Co.")
Ameritas Research MFS Co.
Ameritas Growth With Income MFS Co.
</TABLE>
CVS Social Portfolios, which is managed by Calvert Asset Management Company,
Inc. ("CAMCO"), offers the following portfolios: CVS Social Small Cap Growth
Portfolio, CVS Social Mid Cap Growth Portfolio, CVS Social International Equity
Portfolio, and CVS Social Balanced Portfolio. VIP, which is managed by Fidelity
Management & Research Company ("Fidelity"), offers the following portfolios: VIP
Equity-Income: Service Class, VIP Growth: Service Class, VIP High Income:
Service Class and VIP Overseas: Service Class. VIP II, also managed by Fidelity,
offers the following portfolios: VIP II Asset Manager: Service Class, VIP II
Investment Grade Bond, VIP II Asset Manager: Growth: Service Class, and VIP II
Contrafund: Service Class. The Alger American Fund, which is managed by Fred
Alger Management, Inc. ("Alger Management"), offers the following portfolios:
Alger American Balanced ("Balanced") and Alger American Leveraged AllCap
("Leveraged AllCap"). The MFS Trust, managed by Massachusetts Financial Services
Company ("MFS Co."), offers the following portfolios or series in connection
with this Policy: MFS Utilities, MFS Global Governments, and MFS New Discovery.
The Universal Institutional Funds offer the following portfolios in connection
with the Policy, all of which are managed by Morgan Stanley Asset Management:
Emerging Markets Equity, Global Equity, International Magnum, Asian Equity and
U.S. Real Estate. 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 separately 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
VIP High Income: Service Class, VIP Equity-Income: Service Class, VIP II Asset
Manager: Growth: Service Class, VIP II Asset Manager: Service Class portfolios
of the Fidelity Portfolios, and the Research portfolio of the Ameritas
Portfolios. Certain portfolios are designed to invest a substantial portion of
their assets overseas, such as the VIP Overseas portfolio and the International
Magnum portfolio of the Universal Institutional Funds. 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
CORPORATE BENEFIT VUL
14
<PAGE> 18
volatility of currency exchange rates and overall economic and political
factors. Such portfolios include the Emerging Markets Equity and Asian Equity
portfolios of the Universal Institutional Funds. The Emerging Markets Equity
portfolio may also invest in non-investment grade, high risk debt securities
(also known as "junk bonds") 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, by the Emerging Growth, Research, and Growth With Income
portfolios of the Ameritas Portfolios, and by the Global Equity portfolio of the
Universal Institutional Funds. Investments acquired by the U.S. Real Estate
portfolio of the Universal Institutional Funds 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.
The investments in the Funds may be managed by Fund managers which manage one or
more other mutual funds that have similar names, investment objectives, and
investment styles as the Funds. You should be aware that the Funds are likely to
differ from the other mutual funds in size, cash flow pattern, and tax matters.
Thus, the holdings and performance of the Funds can be expected to vary from
those of the other mutual funds.
You 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.
Separate Account V will purchase and redeem shares from the portfolios at the
net asset value. Shares will be redeemed to the extent necessary for AVLIC to
collect charges, pay the Net Cash Surrender Values, partial withdrawals, and
make policy loans or to transfer assets among Investment Options as you
requested. Any dividend or capital gain distribution received is automatically
reinvested in 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 Separate Account V 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 their 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.
CORPORATE BENEFIT VUL
15
<PAGE> 19
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS' PORTFOLIOS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AMERITAS PORTFOLIOS
- -------------------------------------------------------------------------------------------------------------------
Ameritas Money Invests in U.S. dollar-denominated money Seeks as high a level of current income as
Market market securities of domestic and foreign is consistent with preservation of capital
issuers, including U.S. government and liquidity.
securities and repurchase agreements.
Invests more than 25% of total assets in
the financial services industry.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Index 500 Under normal circumstances, seeks to track Seeks investment results that correspond
the Standard & Poor's 500. to the total return of common stocks
publicly traded in the United States, as
represented by the Standard & Poor's 500.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Growth Focuses on growing companies that generally Seeks long-term capital appreciation.
have broad product lines, markets,
financial resources and depth of
management. Under normal circumstances, the
portfolio invests primarily in the equity
securities of large companies. The
portfolio considers a large company to have
market capitalization of $1 billion or
greater.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Income & Invests in dividend paying equity Primarily seeks to provide a high level of
Growth securities, such as common or preferred dividend income. Its secondary goal is to
stocks, preferably those which the provide capital appreciation.
subadvisor believes also offer
opportunities for capital appreciation.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Small Focuses on small, fast-growing companies Seeks long-term capital appreciation.
Capitalization that offer innovative products, services or
technologies to a rapidly expanding
marketplace. Under normal circumstances,
the portfolio invests primarily in the
equity securities of small capitalization
companies. A small capitalization company
is one that has a market capitalization
within the range of the Russell 200 Growth
Index or the S&P SmallCap 600 Index.
- -------------------------------------------------------------------------------------------------------------------
Ameritas MidCap Invests in midsize companies with promising Seeks long-term capital appreciation.
Growth growth potential. Under normal
circumstances, the portfolio invests
primarily in the equity securities of
companies having a market capitalization
within the range of companies in the S&P
MidCap 400 Index.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Emerging Invests, under normal market conditions, at Seeks long-term growth of capital.
Growth least 65% of its total assets in common
stocks and related securities, such as
preferred stocks, convertible securities
and depositary receipts for those
securities, of emerging growth companies.
- -------------------------------------------------------------------------------------------------------------------
Ameritas Research Invests, under normal market conditions, at Seeks long-term growth of capital and
least 80% of its total assets in common future income.
stocks and related securities, such as
preferred stocks, convertible securities
and depositary receipts. The portfolio
focuses on companies that the subadvisor
believes have favorable prospects for
long-term growth, attractive valuations
based on current and expected earnings or
cash flow, dominant or growing market share
and superior management. The fund may
invest in companies of any size. The
portfolio's investments may include
securities traded on securities exchanges
or in the over-the-counter markets.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE BENEFIT VUL
16
<PAGE> 20
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ameritas Growth With Invests, under normal market conditions, at Seeks to provide reasonable current income
Income least 65% of its total assets in common and long-term growth of capital and
stocks and related securities, such as income.
preferred stocks, convertible securities
and depositary receipts for those
securities. These securities may be listed
on a securities exchange or traded in the
over-the-counter markets. While the
portfolio may invest in companies of any
size, it may generally focus on companies
with larger market capitalizations that the
subadvisor believes have sustainable growth
prospects and attractive valuations based
on current and expected earnings or cash
flow.
- -------------------------------------------------------------------------------------------------------------------
CVS SOCIAL PORTFOLIOS
- -------------------------------------------------------------------------------------------------------------------
CVS Social Small Cap Invests at least 65% of assets in the Seeks to provide long-term capital
Growth common stocks of small-cap companies. appreciation by investing primarily in
Returns in the portfolio will be mostly equity securities of companies that have
from the changes in the price of the small market capitalizations.
portfolio's holdings (capital
appreciation). The portfolio currently
defines small-cap companies as those with
market capitalization of $1 billion or less
at the time the portfolio initially
invests.*
- -------------------------------------------------------------------------------------------------------------------
CVS Social Mid Cap Invests primarily in the common stocks of Seeks to provide long-term capital
Growth mid- size companies. Returns in the appreciation by investing primarily in a
portfolio will be mostly from the changes nondiversified portfolio of the equity
in the price of the portfolio's holdings securities of mid-sized companies that are
(capital appreciation). The portfolio undervalued but demonstrate a potential
currently defines mid-cap companies as for growth.
those within the range of market
capitalizations of the S&P's Mid-Cap 400
Index. Most companies in the Index have a
capitalization of $500 million to $10
billion.*
- -------------------------------------------------------------------------------------------------------------------
CVS Social Invests primarily in the common stocks of Seeks to provide a high total return
International mid- to large-cap companies using a value consistent with reasonable risk by
Equity approach. The portfolio identifies those investing primarily in a globally
countries with markets and economies that diversified portfolio for equity
it believes currently provide the most securities.
favorable climate for investing. The
portfolio invests primarily in more
developed economies and markets. No more
that 5% of Portfolio assets are invested in
the U.S.*
- -------------------------------------------------------------------------------------------------------------------
CVS Social Balanced Typically invests about 60% of its assets Seeks to achieve a competitive total
in stocks and 40% in bonds or other return through an actively managed
fixed-income investments. Stock investments portfolio of stocks, bonds and money
are primarily common stock in large-cap market instruments which offer income and
companies, while the fixed-income capital growth opportunity and which
investments are primarily a wide variety of satisfy the investment and social
investment grade bonds. * criteria.
- -------------------------------------------------------------------------------------------------------------------
*The portfolio invests with the philosophy
that long-term rewards to investors will
come from those organizations whose
products, services, and methods enhance the
human condition and the traditional
American values of individual initiative,
equality of opportunity and cooperative
effort. Investments are selected on the
basis of their ability to contribute to the
dual objectives of financial soundness and
social criteria.
- -------------------------------------------------------------------------------------------------------------------
FIDELITY PORTFOLIOS
- -------------------------------------------------------------------------------------------------------------------
VIP Equity-Income: Investing at least 65% in income-producing Seeks reasonable income. Will also
Service Class equity securities, which tends to lead to consider the potential for capital
investments in large cap "value" stocks. appreciation. Seeks a yield which exceeds
the composite yield on the securities
comprising the Standard & Poor's 500.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE BENEFIT VUL
17
<PAGE> 21
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VIP Growth: Service Investing primarily in common stocks. Seeks capital appreciation.
Class Investing in companies that it believes
have above-average growth potential (stocks
of these companies are often called
"growth" stocks). Investing in domestic and
foreign issuers.
- -------------------------------------------------------------------------------------------------------------------
VIP High Income: Investing at least 65% of total assets in Seeks a high level of current income while
Service Class income- producing debt securities, also considering growth of capital.
preferred stocks and convertible
securities, with an emphasis on lower-
quality debt securities.
- -------------------------------------------------------------------------------------------------------------------
VIP Overseas: Investing at least 65% of total assets in Seeks long-term growth of capital.
Service Class foreign securities. Investing primarily in
common stocks.
- -------------------------------------------------------------------------------------------------------------------
VIP II Asset Allocating the Fund's assets among stocks, Seeks high total return with reduced risk
Manager: Service bonds, and short-term and money market over the long term by allocating its
Class instruments. Maintaining a neutral mix over assets in stocks, bonds, and short-term
time of 50% of assets in stocks, 40% of instruments.
bonds, and 10% of assets in short-term and
money market instruments.
- -------------------------------------------------------------------------------------------------------------------
VIP II Investment Investing in U.S. dollar-denominated Seeks as high a level of current income as
Grade Bond: investment- grade bonds. is consistent with the preservation of
Initial Class capital.
- -------------------------------------------------------------------------------------------------------------------
VIP II Asset Allocating the Fund's assets among stocks, Seeks to maximize total return by
Manager: Growth: bonds, and short-term and money market allocating its assets among stocks, bonds,
Service Class instruments. Maintaining a neutral mix over short-term instruments and other
time of 70% of assets in stocks, 25% of investments.
assets in bonds, and 5% of assets in
short-term and money market instruments.
- -------------------------------------------------------------------------------------------------------------------
VIP II Contrafund: Investing primarily in common stocks. Seeks long-term capital appreciation.
Service Class Investing in securities of companies whose
value it believes is not fully recognized
by the public.
- -------------------------------------------------------------------------------------------------------------------
ALGER AMERICAN FUND
- -------------------------------------------------------------------------------------------------------------------
Balanced The portfolio focuses on stocks of Seeks current income and long-term capital
companies with growth potential and fixed appreciation by investment in common
income securities, with emphasis on stocks and fixed income and convertible
income-producing securities which appear to securities, with emphasis on income
have some potential for capital producing securities which appear to have
appreciation. Under normal circumstances, potential for capital appreciation.
it invests in common stocks and fixed
income securities, which include commercial
paper and bonds rated within the four
highest rating categories by an established
rating agency or if not rated, which are
determined by the manager to be of
comparable quality. Ordinarily, at least
25% of the portfolio's net assets are
invested in fixed-income securities.
- -------------------------------------------------------------------------------------------------------------------
Leveraged AllCap Under normal circumstances, the portfolio Seeks long-term capital appreciation.
invests in the equity securities of
companies of any size which demonstrate
promising growth potential. The portfolio
can leverage, that is, borrow money, up to
one-third of its total assets to buy
additional securities. By borrowing money,
the portfolio has the potential to increase
its returns if the increase in the value of
the securities purchased exceeds the cost
of borrowing, including interest paid on
the money borrowed
- -------------------------------------------------------------------------------------------------------------------
MFS TRUST
- -------------------------------------------------------------------------------------------------------------------
Utilities Series Invests, under normal market conditions, at Will seek capital growth and current
least 65% of its total assets in equity and income (income above that available from a
debt securities of both domestic and portfolio invested entirely in equity
foreign companies in the utilities securities).
industry.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
CORPORATE BENEFIT VUL
18
<PAGE> 22
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT POLICIES OBJECTIVE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Global Governments Invests, under normal market conditions, at Will seek to provide income and capital
Series least 65% of its total assets in debt appreciation.
obligations that are issued or guaranteed
as to principal and interest by either (1)
the U.S. Government, its agencies,
authorities or instrumentalities or (2) the
governments of foreign countries (including
emerging markets). May also invest in
corporate bonds (including lower rated
bonds commonly known as junk bonds) and
mortgage-backed and assets-backed
securities.
- -------------------------------------------------------------------------------------------------------------------
New Discovery Series Invests, under normal market conditions, at Will seek capital appreciation.
least 65% of its total assets in common
stocks and related securities, such as
preferred stocks, convertible securities
and depositary receipts for those
securities, of emerging growth companies.
- -------------------------------------------------------------------------------------------------------------------
UNIVERSAL INTERNATIONAL FUNDS
- -------------------------------------------------------------------------------------------------------------------
Emerging Markets Invests primarily in equity securities of Long-term capital appreciation.
Equity emerging market country issuers with a
focus on those issuers with attractive
growth characteristics, reasonable
valuations, and managements with a strong
shareholder value orientation.
- -------------------------------------------------------------------------------------------------------------------
Global Equity Invests primarily in equity securities of Long-term capital appreciation.
issuers throughout the world ,including
U.S. issuers and emerging market countries,
using an approach based on individual stock
selection and emphasizing a bottom up
approach to identify stocks that are
undervalued.
- -------------------------------------------------------------------------------------------------------------------
International Invests primarily in equity securities of Long-term capital appreciation.
Magnum............ non-U.S. issuers, domiciled in countries
comprising the Morgan Stanley Capital
International Europe, Australasia, Far East
Index commonly known as the "EAFE Index."
- -------------------------------------------------------------------------------------------------------------------
Asian Equity Invests primarily in equity securities of Long-term capital appreciation.
Asian issuers, excluding Japan, using a
disciplined, value-oriented approach to
security selections focusing on larger
companies with strong management teams.
- -------------------------------------------------------------------------------------------------------------------
U.S. Real Estate Invests primarily in equity securities of Above-average current income and long-term
companies in the U.S. real estate industry, capital appreciation.
including real estate investment trust and
real estate operating companies.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
AVLIC reserves the right, subject to applicable law, to add, delete, combine, or
substitute investments in Separate Account V if, in our judgment, marketing
needs, tax considerations, or investment conditions warrant. This may happen due
to a change in law or a change in a Fund's objectives or restrictions, or for
some other reason. AVLIC may operate Separate Account V 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. AVLIC
may also transfer the assets of Separate Account V to another separate account.
If necessary, we will notify the SEC and/or state insurance authorities and will
obtain any required approvals before making these changes.
If any changes are made, AVLIC may, by appropriate endorsement, change the
Policy to reflect the changes. In addition, AVLIC may, when permitted by law,
restrict or eliminate any voting rights of Policy Owners or other persons who
have voting rights as to Separate Account V. AVLIC will determine the basis for
making any new Subaccounts available to existing Policy Owners.
You will be notified of any material change in the investment policy of any Fund
in which you have an interest.
CORPORATE BENEFIT VUL
19
<PAGE> 23
FIXED ACCOUNT
You may elect to allocate all or a portion of your Net Premium payments to the
Fixed Account, and you may also transfer monies between Separate Account V and
the Fixed Account. (See the section on Transfers.)
Payments allocated to the Fixed Account and transferred from Separate Account V
to the Fixed Account are placed in AVLIC's General Account. The General Account
includes all of AVLIC's assets, except those assets segregated in AVLIC's
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, plus interest
credited thereto, less any deduction for charges and expenses. The Policy Owner
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
exemptions 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
in it 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, these
disclosures 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 Policies with a Policy Date or
Anniversary Date 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 Policy Owner 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 first
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 Policy Owner with both lifetime insurance
protection on the life of the Insured and flexibility in the amount and
frequency of premium payments and with the level of life insurance proceeds
payable under the Policy.
You are not required to pay scheduled premiums to keep the Policy in force, but
you may, subject to certain limitations, vary the frequency and amount of
premium payments. You also may 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. Thus, as insurance needs or
financial conditions change, you have 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 Separate Account V. Thus the Policy
Owner 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 Separate Account V.
CORPORATE BENEFIT VUL
20
<PAGE> 24
DEATH BENEFIT PROCEEDS
As long as the Policy remains in force, AVLIC will pay the Death Benefit
Proceeds of the Policy upon Satisfactory Proof of Death, according to 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 the section on Payment Options.)
Death Benefit Proceeds will be paid to the surviving Beneficiary or
Beneficiaries you specified in the application or as subsequently changed. If
you do not choose a Beneficiary, the proceeds will be paid to you, as the Policy
Owner, or if individually owned, to your estate.
DEATH BENEFIT OPTIONS
The Policy provides two Death Benefit options. The Policy Owner 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 the section on Policy Lapse and Reinstatement.) The net
amount at risk for Option A will generally be less than the net amount at risk
for Option B. If you choose Option A, your Cost of Insurance deduction will
generally be lower than if you choose Option B. (See the section on Charges and
Deductions.) The following graphs illustrate the differences in the two Death
Benefit options.
OPTION A.
[GRAPH]
(OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION A, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE CASH
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 Date prior to the date of death. For Insureds
with an Attained Age over 40 on that Policy Anniversary Date, the percentage
declines. For example, the percentage at Attained Age 40 is 250%, at Attained
Age 50 is 185%, at Attained Age 60 is 130%, at Attained Age 70 is 115%, at
Attained Age 80 is 105%, and Attained Age 90 is 105%. The applicable percentage
will never be less than 101%. 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. Policy
Owners who prefer to have favorable investment performance, if any, reflected in
higher Accumulation Value, rather than increased insurance coverage, generally
should select Option A.
CORPORATE BENEFIT VUL
21
<PAGE> 25
OPTION B.
[GRAPH]
(OMITTED GRAPH ILLUSTRATES PAYOUT UNDER DEATH BENEFIT OPTION B, SPECIFICALLY BY
SHOWING THE RELATIONSHIPS OVER TIME, BETWEEN THE SPECIFIED AMOUNT AND THE CASH
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 Date prior to the date of death. For Insureds with an
Attained Age over 40 on that Policy Anniversary Date 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). Policy Owners 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 the 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 generally will decrease the net amount at risk in the
future, and will therefore decrease the Cost of Insurance. Changing from Option
A to Option B generally will result in an increase in the Cost of Insurance over
time because the Cost of Insurance Rate will increase with the Insured's age,
even though the net amount at risk will generally remain level. (See the
sections on Charges and Deductions and Federal Tax Matters.)
CHANGE IN SPECIFIED AMOUNT. Subject to certain limitations, after the first
Policy Year, a Policy Owner 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 Policy Owner's Cost of
Insurance and have federal tax consequences. (See the sections on Charges and
Deductions and Federal Tax Matters.)
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 $100,000
($50,000 if the Term Insurance Rider is attached to the Policy). After the
Insured reaches Attained Age 100, the Policy Owner may decrease the Specified
Amount to no less than $1000. If a decrease in the Specified Amount makes the
Policy not comply with the maximum premium limits required by federal tax law,
the decrease may be limited or the Accumulation Value may be returned to you, at
your election, to the extent
CORPORATE BENEFIT VUL
22
<PAGE> 26
necessary to meet the requirements. (See the section on Premiums.) The
Administrative Expense Charge will include a monthly charge per $1000 of
increase in Specified Amount for ten years from the date of the increase.
Increases in the Specified Amount will be allowed after the first Policy Year.
For an increase in the Specified Amount, you must submit a written supplemental
application. 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 put the
requested increase in effect. (See the section on Premiums upon Increases in
Specified Amount.) The minimum amount of any increase is $25,000. Generally an
increase cannot be made if the Insured's Attained Age is over the maximum age
for the Insured's risk class. The increase may be subject to guaranteed issue
guidelines, if applicable.
In states which require Cost of Insurance charges to cease at a stated Attained
Age, the Specified Amount will decrease to $1000 when that age is reached.
METHODS OF AFFECTING INSURANCE PROTECTION
You 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 your 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. (See the section on Charges from
Accumulation Value.) However, when the Net Cash Surrender Value is insufficient
to pay the Monthly Deduction and the Grace Period expires without an adequate
payment by the Policy Owner, the Policy will lapse and terminate without value.
(See the section on Policy Lapse and Reinstatement.)
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. You may Surrender the Policy at
any time and receive the Policy's Net Cash Surrender Value. (See the section on
Surrenders.) 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 the section on Allocation of Premiums
and Accumulation Value.) Thereafter, on each Valuation Date, the Accumulation
Value of the Policy will equal:
(1) The aggregate values belonging to the Policy in each of the Subaccounts
on the Valuation Date, determined by multiplying each Subaccount's unit
value by the number of Subaccount units you have allocated to the
Policy; plus
(2) The value of allocations to the Fixed Account; plus
(3) Any Accumulation Value impaired by Outstanding Policy Debt held in the
General Account; plus
(4) Any Net Premiums received on that Valuation Date; minus
(5) Any partial withdrawal, and its charge, made on that Valuation Date;
minus
(6) Any Monthly Deduction to be made on that Valuation Date.
CORPORATE BENEFIT VUL
23
<PAGE> 27
In computing the Policy's Accumulation Value on the Valuation Date, 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. Because the Accumulation Value depends on a number of variables, a
Policy's Accumulation Value cannot be predetermined.
THE UNIT VALUE. The unit value of each Subaccount reflects the investment
performance of that Subaccount. The unit value of each Subaccount is calculated
by:
(1) Multiplying the net asset value per share of each Fund portfolio on the
Valuation Date times the number of shares held by that Subaccount,
before the purchase or redemption of any shares on that Valuation Date;
minus
(2) A charge not exceeding an annual rate of 0.95% (years 1-15) or 0.50%
(years 16+) for mortality and expense risk; minus
(3) A charge not exceeding an annual rate of 0.15% for administrative
service expenses; minus
(4) Any taxes payable by Separate Account V; and
(5) 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 the section on Daily Charges Against the Separate Account.)
VALUATION DATE AND VALUATION PERIOD. A Valuation Date is each day on which the
New York Stock Exchange ("NYSE") is open for trading. The net asset value for
each Fund portfolio is determined as of the close of regular trading on the
NYSE. The net investment return for each Subaccount and all transactions and
calculations with respect to the Policies as of any Valuation Date are
determined as of that time. 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.
PAYMENT OF POLICY BENEFITS
Death Benefit Proceeds under the Policy will usually be paid within seven days
after AVLIC receives Satisfactory Proof of Death. Payments may be postponed in
certain circumstances. (See the section on Postponement of Payments.) The Policy
Owner may decide the form in which Death Benefit Proceeds will be paid. During
the Insured's lifetime, the Policy Owner 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 the
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. (Also see the section on Surrenders.)
PAYMENT OPTIONS FOR DEATH BENEFIT 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, Death Benefit Proceeds will be transferred to
AVLIC's General 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:
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.
FIXED AMOUNT PAYABLE OPTION. Each payment will be for an agreed fixed
amount. Payments continue until the amount AVLIC holds runs out.
FIXED PERIOD PAYMENT OPTION. Equal payments will be made for any period
selected up to 20 years.
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If the beneficiary is a natural person, the following payment options are also
currently available:
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.
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 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 Policy Owner, using the
rules set out above.
POLICY RIGHTS
LOAN BENEFITS
LOAN PRIVILEGES. After the first Policy Year, the Policy Owner may borrow an
amount up to the current Net Cash Surrender Value less twelve times the most
recent Monthly Deduction, at regular or reduced loan rates (described below).
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. Policy Owners 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 tax consequences. (See the section
on Federal Tax Matters.)
LOAN INTEREST. AVLIC charges interest to Policy Owners 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%. Each year
after the tenth Policy Anniversary Date, the Policy Owner may borrow a limited
amount of the Net Cash Surrender Value at a reduced interest rate. For those
loans, 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:
(1) The Accumulation Value; minus
(2) Total premiums paid minus any partial withdrawals previously taken, and
minus
(3) Any Outstanding Policy Debt held at a reduced loan rate.
However, this amount may not exceed the maximum loan amount described above.
(See the section on Loan Privileges.) If unpaid when due, interest will be added
to the amount of the loan and bear interest at the same rate. The Policy Owner
earns 3.5% interest on the Accumulation Values held in the General Account
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 loan. The Accumulation Value transferred
will be allocated from the Investment Options according to the instructions you
give when you request the loan. 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. In any Policy Year that
loan interest is not paid when due, AVLIC will add the interest due to the
principal amount of the Policy loan on the next Policy Anniversary. This loan
interest due will be transferred from the Investment Options as set out above.
No charge will be made 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.
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 loan amounts, the portion of the repayment allocated
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in accordance with the repayment of loan 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 Accrued Expense Charges, the Policy
Owner must pay the excess. AVLIC will send a notice of the amount which must be
paid. If you do 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. You 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 you experience a
substantial reduction, you 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 the section on
Policy Lapse and Reinstatement.)
REPAYMENT OF LOAN. Unscheduled premiums paid while a Policy loan is outstanding
are treated as repayment of the debt only if the Policy Owner so requests. As a
loan is repaid, the Accumulation Value in the General Account securing the
repaid loan 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, the Policy Owner may 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 when 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 the section on Postponement of Payments.)
SURRENDERS MAY HAVE TAX CONSEQUENCES. Once a Policy is Surrendered, it may not
be reinstated. (See the section on Tax Treatment of Policy Proceeds.)
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 Policy Owner may elect to have the amount paid in a lump sum or
under a payment option. (See the section on Payment Options.)
If you surrender the Policy in the first two Policy Years, we will refund a
portion of the Percent of Premium Charge deducted in the first Policy Year. The
applicable portion is 100% in the first Policy Year and 50% in the second Policy
Year.
PARTIAL WITHDRAWALS
Partial withdrawals are irrevocable. The amount of a partial withdrawal may not
be less than $500. After a partial withdrawal, the Net Cash Surrender Value, not
including any percent of premium refund, 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 your
instructions when you request the withdrawal. However, 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 the Cost of Insurance charge is calculated and the amount of
pure insurance protection under the Policy. (See the sections on Monthly
Deduction -- Cost of Insurance and Death Benefit Options -- Methods of Affecting
Insurance Protection.) If Death Benefit option B is in effect, the Specified
Amount will not change, but the Accumulation Value will be reduced.
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A fee which does not 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 the section on Partial Withdrawal Charge.)
TRANSFERS
Accumulation Value may be transferred among the Subaccounts of Separate Account
V and to the Fixed Account as often as desired. However, you may make only one
transfer out of the Fixed Account per Policy Year. We may limit the transfer
period to the 30 day period following the Policy Anniversary Date. The transfers
may be ordered in person, by mail, by telephone, or through our website. 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 15 transfers per Policy Year
will be permitted free of charge. After that, a transfer charge of $10 may be
imposed each additional time amounts are transferred. Currently, no charge is
imposed for additional transfers. This charge will be deducted pro rata from
each Subaccount (and if applicable, the Fixed Account) in which the Policy Owner
is invested. (See the section on Transfer Charge.)
Additional restrictions on transfers may be imposed at the Fund level.
Specifically, Fund managers may have the right to refuse sales, or suspend or
terminate the offering of portfolio shares, if they determine that such action
is necessary in the best interests of the portfolio's shareholders. If a Fund
manager refuses a transfer for any reason, the transfer will not be allowed.
AVLIC will not be able to process the transfer if the Fund manager refuses.
Transfers resulting from Policy loans will not be subject to a transfer charge
and will not be counted towards the guaranteed 15 free transfers per Policy
Year. AVLIC may at any time revoke or modify the transfer privilege, including
the minimum amount transferable.
Transfers out of the Fixed Account, unless part of the dollar cost averaging
systematic program described below, are limited to one per Policy Year.
Transfers out of the Fixed Account are limited to the greater of (1) 25% of the
Fixed Account attributable to the Policy; (2) the largest transfer made by the
Policy Owner out of the Fixed Account during the last 13 months; or (3) $1,000.
This provision is not available while dollar cost averaging from the Fixed
Account.
The privilege to initiate transactions by telephone or through our website will
be made available to Policy Owners automatically.
The registered representative designated on the application will have the
authority to initiate telephone transfers. Policy Owners who do not wish to
authorize AVLIC to accept telephone transactions from their registered
representative must specify so 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 Policy Owner to
provide the Policy number at the time of giving transfer instructions; AVLIC's
tape recording of all telephone transfer instructions; and AVLIC providing
written confirmation of telephone transactions.
Procedures for making transfers through our website can be accessed at the
Internet address stated in the Ameritas Variable Life Insurance Company section
of this prospectus.
SYSTEMATIC PROGRAMS
AVLIC may offer systematic programs as discussed below. These programs will be
subject to administrative guidelines AVLIC may establish from time to time. We
will count your transfers in these programs when determining whether any
transfer fee applies. Lower minimum amounts may be allowed to transfer as part
of a systematic program. No other separate fee is assessed when one of these
options is chosen. All other normal transfer restrictions, as described above,
also apply.
You can request participation in the available programs when purchasing the
Policy or at a later date. You 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. Participation in any
systematic program will
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automatically terminate upon death of the Insured. Use of systematic programs
may not be advantageous, and does not guarantee success.
PORTFOLIO REBALANCING. Under the Portfolio Rebalancing program, you can instruct
AVLIC to reallocate the Accumulation Value among the Subaccounts (but not the
Fixed Account) on a systematic basis, according to your specified allocation
instructions.
DOLLAR COST AVERAGING. Under the Dollar Cost Averaging program, you can instruct
AVLIC to automatically transfer, on a systematic basis, a predetermined amount
or specified percentage from the Fixed Account or the Money Market Subaccount to
any other Subaccount(s). Dollar cost averaging is permitted from the Fixed
Account if each monthly transfer is no more than 1/36th of the value of the
Fixed Account at the time dollar cost averaging is established.
EARNINGS SWEEP. This program permits systematic redistribution of earnings among
Investment Options.
FREE-LOOK PRIVILEGE
You may cancel the Policy within 10 days after you receive it, within 10 days
after AVLIC delivers a notice of your right of cancellation, or within 45 days
of completing Part I of the application, whichever is later. When allowed by
state law, the amount of the refund is the Net Premiums allocated to the
Investment Options, adjusted by investment gains and losses, plus the sum of all
charges deducted from premiums paid. Otherwise, the amount of the refund will
equal the gross premiums paid. To cancel the Policy, you should mail or deliver
it to the selling agent, or to AVLIC at the Home Office. A refund of premiums
paid by check may be delayed until the check has cleared your bank. (See the
section on Postponement of Payments.)
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 (5900 "O" Street, P.O. Box 82550, Lincoln, Nebraska
68501). With guaranteed or simplified underwriting, a Policy will be issued to
individuals ages 18 to 65 on their nearest birthday. With regular underwriting,
a Policy will generally be issued only to individuals age 18 to 85 on their
nearest birthday who supply satisfactory evidence of insurability to AVLIC.
Preferred class regular issue Policies are available only for ages 18 to 75.
Acceptance of a regular underwriting application 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 for all coverage 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) additional premiums or
application amendments are needed. When there are additional requirements before
issue (see below) the Policy Date will be the date the Policy 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 you or sent to the agent for delivery to you. When application amendments or
additional premiums need to be obtained upon delivery of the Policy, the Issue
Date will be when the Policy receipt and 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. The initial Net Premium will be
allocated on the Issue Date to the Subaccounts and/or the Fixed Account
according to the selections made in the application. When state or other
applicable law or regulation requires return of at least the premium payments if
you return the Policy under the free-look privilege, the initial Net Premium
will be allocated to the Money Market Subaccount. Then, thirteen days after the
Issue Date, the Accumulation Value of the Policy will be allocated among the
Subaccounts and/or Fixed Account according to the instructions in the
application.
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Subject to approval, a Policy may be backdated, but the Policy Date may not be
more than six months prior to the date of the application. Backdating can be
advantageous if the Insured's lower Issue Age results in lower Cost of Insurance
Rates. If a Policy is backdated, the minimum initial premium required will
include sufficient premium to cover the backdating period. Monthly Deductions
will be made for the period the Policy Date is backdated.
Conditional receipt coverage may be available 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 maximum
total amount of insurance which will be payable pursuant to all conditional
receipts received by the applicant as a result of pending applications with
AVLIC and its affiliates is limited to the smaller of:
(1) The total amount of insurance applied for with AVLIC and its
affiliates; or
(2) $250,000 minus the total amount of insurance in force with AVLIC and
its affiliates, but not less than zero.
As used above, total amount of insurance includes any amounts payable under any
Accidental Death Benefit provision.
PREMIUMS
No insurance will take effect before the minimum initial premium payment is
received by AVLIC in federal funds. Subsequent premiums are payable at AVLIC's
Home Office. A Policy Owner has flexibility in determining the frequency and
amount of premiums. However, unless you have 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. (See the section on Policy Benefits, Purposes of
the Policy.)
PLANNED PERIODIC PREMIUMS. At the time the Policy is issued you may determine a
Planned Periodic Premium schedule that provides for the payment of level
premiums at selected intervals. You are not required to pay premiums according
to this schedule. You have considerable flexibility to alter the amount and
frequency of premiums paid. AVLIC reserves the right to limit the number and
amount of additional or unscheduled premium payments.
You may 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. Instead, the duration of the Policy depends upon the
Policy's Net Cash Surrender Value. (See the section on Duration of the Policy.)
Even if Planned Periodic Premiums are paid, 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 the section on Policy
Lapse and Reinstatement.)
PREMIUM LIMITS. AVLIC's current minimum premium limit is $45, $15 if paid by
automatic bank draft. AVLIC currently has no maximum premium limit, other than
the current maximum premium limits established by federal tax laws. AVLIC
reserves the right to change any premium limit. In no event may the total of all
premiums paid, both planned and unscheduled, exceed the current maximum premium
limits established by federal tax laws. (See the section on Tax Status of the
Policy.)
If at any time a premium is paid which would result in total premiums exceeding
the current maximum premium limits, AVLIC will accept only 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 limits allowed 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 Policy Owner, an
additional premium payment may be required. AVLIC will notify you of any
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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 Policy Owner
allocates Net Premiums to one or more Subaccounts and/or to the Fixed Account.
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 you
instruct otherwise by proper written notice.
The initial Net Premium will be allocated on the Issue Date to the Subaccounts
and/or the Fixed Account according to the selections made in the application.
When state or other applicable law or regulation requires return of at least the
premium payments if you return the Policy under the free-look privilege, the
initial Net Premium will be allocated to the Money Market Subaccount. Then,
thirteen days after the Issue Date, the Accumulation Value of the Policy will be
allocated among the Subaccounts and/or Fixed Account according to the
instructions in the application. 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 you, as the Policy Owner, will bear the
entire investment risk. This will affect the Policy's Accumulation Value, and
may affect the Death Benefit as well. You should periodically review your
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. The
Grace Period is 61 days from the date AVLIC mails a notice that the Grace Period
has begun. AVLIC will notify you at the beginning of the Grace Period by mail
addressed to your last known address on file with AVLIC.
The notice will specify the premium required to keep the Policy in force. The
required premium will equal the amount necessary to cover the Monthly Deductions
and Percent of Premium Charges for the three Policy Months after commencement of
the Grace Period. 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 the section on Charges and Deductions.)
REINSTATEMENT. A lapsed Policy may be reinstated any time within three years
(five years in Missouri) after the beginning of the Grace Period. We will
reinstate your Policy based on the Insured's risk class at the time of the
reinstatement.
Reinstatement is subject to the following:
(1) Evidence of insurability of the Insured satisfactory to AVLIC
(including evidence of insurability of any person covered by a rider to
reinstate the rider);
(2) Any Outstanding Policy Debt on the date of lapse will be reinstated
with interest due and accrued;
(3) The Policy cannot be reinstated if it has been Surrendered for its full
Net Cash Surrender Value;
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(4) The minimum premium required at reinstatement is the greater of:
(a) the amount necessary to raise the Net Cash Surrender Value as of the
date of reinstatement to equal to or greater than zero; or
(b) three times the current Monthly Deduction.
The amount of Accumulation Value on the date of reinstatement will equal:
(1) The amount of the Net Cash Surrender Value on the date of lapse,
increased by
(2) The premium paid at reinstatement, less
(3) The Percent of Premium Charge.
If any Outstanding Policy Debt is reinstated, that debt will be held in AVLIC's
General Account. Accumulation Value calculations will then proceed as described
under the section on Accumulation Value.
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. The charges are determined by us
according to our expectations of future experience for mortality, lapse,
interest and expenses. If our expectations of future experience for mortality,
lapse, interest and expenses change, we may increase or decrease charges where
permitted by the Policy, but we will never charge more than the maximum amount
specified in the Policy. Any change in the charges will apply to all Insureds of
the same age, gender, and risk class and whose Policies have been in effect for
the same length of time.
DEDUCTIONS FROM PREMIUM PAYMENTS
PERCENT OF PREMIUM CHARGE. A deduction of up to 5.0% of the premium is made from
each premium payment; currently the charge is 3.0%. The deduction is intended to
partially offset the premium taxes imposed by the states and their subdivisions,
and to help defray the tax cost due to capitalizing certain Policy acquisition
expenses as required under applicable federal tax laws. (See the section on
Federal Tax Matters.) AVLIC does not expect to derive a profit from the Percent
of Premium Charge. If you surrender the Policy in the first two Policy Years, we
will refund a portion of the Percent of Premium Charge deducted in the first
Policy Year. The applicable portion is 100% in the first Policy Year and 50% in
the second Policy Year.
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 from the Investment Options according to your
instructions. If no instructions are given, the charges will be allocated pro
rata among the Investment Options. 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, we
deduct an Administrative Expense Charge based on the Specified Amount and the
Policy duration. Currently, the per Policy charge is $15 per month in the first
Policy Year and $7 per month thereafter. The per Policy portion of the
Administrative Expense Charge is levied throughout the life of the Policy and is
guaranteed not to increase above $15 per month in the first Policy Year and $12
per month thereafter. During the first ten Policy Years (or for the life of the
Policy where required by state law), there is a monthly charge per $1000 of
initial Specified Amount. In addition, there is a monthly charge per $1000 of
each increase in Specified Amount for ten years from the date of increase (or
life of the Policy, where required). The per $1000 rates for both the initial
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Specified Amount and each increase vary by Issue Age, gender, and risk class.
The current charge per $1000 is the same as the maximum charge. (See the Policy
Schedule for rates.)
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 Rates are based on the
Insured's gender, Issue Age, Policy duration and risk class. The rates will vary
depending upon tobacco use and other risk factors. For the initial Specified
Amount, the Cost of Insurance Rates 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 and are
equal to the 1980 Insurance Commissioners Standard Ordinary Male and Female
Mortality Tables without smoker distinction. The maximum rates for the
table-rated substandard Insureds are based on a multiple (shown in the schedule
pages of the Policy) of the above rates. We may add flat extra ratings to an
Insured to reflect higher mortality risk. Any change in the Cost of Insurance
Rates will apply to all Insureds of the same age, gender, risk class and whose
Policies have been in effect for the same length of time.
The Cost of Insurance Rates, Policy charges, and payment options for Policies
issued in Montana, and perhaps other states or in connection with certain
employee benefit arrangements, are issued on a gender-neutral (unisex) basis.
The unisex rates will be higher than those applicable to females and lower than
those applicable to males.
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 Policy Owners.
RATING CLASS. The rating class of the 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, Insureds in the standard rating class will have a lower Cost
of Insurance Rate than Insureds in a rating class with higher mortality risks.
TRANSFER CHARGE. Currently there is no charge for transfers among the Investment
Options in excess of 15 per Policy Year. A charge of $10 (guaranteed not to
increase) for each transfer in excess of 15 may be imposed to compensate AVLIC
for the costs of processing the transfer. Since the charge reimburses AVLIC only
for the cost of processing the transfer, 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 Policy Owner 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.
This charge will compensate AVLIC for the administrative costs of processing the
requested payment and in making necessary calculations for any reductions in
Specified Amount which may be required because 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). A
partial withdrawal charge is not assessed when a Policy is Surrendered.
DAILY CHARGES AGAINST THE SEPARATE ACCOUNT
A daily Mortality and Expense Risk Charge will be deducted from the value of the
net assets of Separate Account V to compensate AVLIC for mortality and expense
risks assumed in connection with the Policy. This daily charge from Separate
Account V is currently at the rate of 0.002050% (equivalent to an annual rate of
0.75%) for Policy Years 1-15 and will not exceed 0.95% annually. After the
fifteenth Policy Year
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the daily charge will be applied at the rate of 0.000820% (equivalent to an
annual rate of 0.30%) and will not exceed 0.50% annually. The daily charge will
be deducted from the net asset value of Separate Account V, 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 calculated, and that the aggregate amount of Death Benefits paid will be
greater than initially estimated. 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 Separate Account V on a daily basis. Currently, this
charge is applied at a rate of 0.000409% (equivalent to 0.15% annually). The
rate of this charge will never exceed 0.15% annually. No Asset-Based
Administrative Expense Charge will be deducted from the amounts in the Fixed
Account.
Policy Owners who choose to allocate Net Premiums to one or more of the
Subaccounts will also bear a pro rata share of the management fees and expenses
paid by each of the investment portfolios in which the various Subaccounts
invest. No such management fees are assessed against Net Premiums allocated to
the Fixed Account. (See the Summary section for the Fund Expense Summary.)
Expense reimbursement 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.
AVLIC may receive administrative fees from the investment advisers of certain
Funds. AVLIC currently does not assess a separate charge against Separate
Account V 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
Separate Account V 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 Policy Owner 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 Policy
Owner. If the Policy Owner is a natural person, upon the death of the Policy
Owner, all rights, options, and privileges pass to any successor-owner or
owners, if living; otherwise to the estate of the last Policy Owner to die.
BENEFICIARY. Policy Owners 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 Policy
Owner; otherwise to the estate of the Policy Owner, if a natural person.
CHANGE OF BENEFICIARY. The Policy Owner 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.
CORPORATE BENEFIT VUL
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CHANGE OF POLICY OWNER OR ASSIGNMENT. In order to change the Policy 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 debt 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 Policy
Owner. If the Policy Owner is a natural person and is no longer living, the
Death Benefit Proceeds shall be paid to any successor-owner, if living;
otherwise to the Policy Owner's estate. Any proceeds payable upon Surrender
shall be paid in one sum unless an Optional Method of Payment is elected.
INCONTESTABILITY. AVLIC cannot contest the Policy or reinstated Policy during
the lifetime of the Insured after it has been in force for two years from the
Policy Date (or reinstatement effective date). After the Policy Date, AVLIC
cannot contest an increase in the Specified Amount or addition of a rider during
the lifetime of the Insured after such increase or addition has been in force
for two years from its effective date. However, this two year provision shall
not apply to riders with their own contestability provision.
MISSTATEMENT OF AGE AND GENDER. If the age or gender of the Insured or any
person insured by rider has been misstated, the amount of the Death Benefit and
any added riders provided will be 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 gender. The Death Benefit Proceeds will be
adjusted correspondingly.
SUICIDE. The Policy does not cover suicide within two years of the Policy Date
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.
POSTPONEMENT OF PAYMENTS. Payment of any amount upon Surrender, partial
withdrawal, Policy loans, benefits payable at death, and transfers may be
postponed whenever: (1) the New York Stock Exchange ("NYSE") is closed other
than customary weekend and holiday closings, or trading on the NYSE is
restricted as determined by the SEC; (2) the SEC by order permits postponement
for the protection of Policy Owners; (3) an emergency exists, as determined by
the SEC, as a result of which disposal of securities is not reasonably
practicable or it is not reasonably practicable to determine the value of
Separate Account V's net assets; or (4) 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 Policy
Owner's bank.
REPORTS AND RECORDS. AVLIC will maintain all records relating to Separate
Account V and will mail to the Policy Owner, 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. Quarterly
statements are also mailed detailing Policy activity during the calendar
quarter. Instead of receiving an immediate confirmation of transactions made
pursuant to some types of periodic payment plan (such as a dollar cost averaging
program, or payment made by automatic bank draft or salary reduction
arrangement), the Policy Owner may receive confirmation of such transactions in
their quarterly statements. The Policy Owner should review the information in
these statements carefully. All errors or corrections must be reported to AVLIC
immediately to assure proper crediting to the Policy. AVLIC will assume all
transactions are accurately reported on quarterly statements unless AVLIC is
notified otherwise within 30 days after receipt of the
CORPORATE BENEFIT VUL
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statement. The Policy Owner 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 the section on Charges From Accumulation Value -- Monthly Deduction.)
TERM COVERAGE RIDER. You may increase the total coverage by adding a term
insurance rider, at issue, on the Insured person's life. The death benefit
provided by the rider adjusts over time.
If you purchase this rider, the total specified amount is the total of the
specified amount for the base Policy plus the specified amount for this
rider. We generally restrict the total specified amount at issue to an
amount not more than ten times the base Policy specified amount. For
example, if the base Policy specified amount is $100,000, then the maximum
total specified amount we allow is $1,000,000.
The death benefit for the term insurance rider is the difference between
the total death benefit and the base Policy Death Benefit. (See the section
on Death Benefit Options.) The total death benefit depends upon which Death
Benefit option is in effect. If Option A is in effect, the total death
benefit is the greater of (1) the total specified amount, or (2) the
Accumulation Value multiplied by the appropriate Death Benefit percentage.
If Option B is in effect, the total death benefit is the greater of (1) the
total specified amount plus the Accumulation Value, or (2) the Accumulation
Value multiplied by the appropriate Death Benefit percentage.
Over time, it is possible that the base Policy Death Benefit could grow and
cause a corresponding reduction in the term rider death benefit. If the
base Policy Death Benefit becomes equal to the total death benefit, the
term rider death benefit will drop to zero, but it will never be less than
zero. Even if the death benefit for the rider is reduced to zero, the rider
remains in effect until you remove it from the Policy. Therefore, if later
the base Policy death benefit is reduced below the total death benefit, the
rider death benefit reappears to maintain the total death benefit.
There is no defined premium for a given amount of term insurance coverage.
Instead, we deduct a monthly cost of insurance charge from the Accumulation
Value. The cost of insurance for this rider is calculated as the monthly
cost of insurance rate for the rider coverage multiplied by the term death
benefit in effect that month. The cost of insurance rates will be
determined by us from time to time. They will be based on the Insured's
gender, Issue Age, Policy duration, and risk class. The monthly maximum
cost of insurance rates for this rider will be in the Policy.
Subject to certain limitations, after the first Policy Year you may
decrease the specified amount for this rider. The specified amount
remaining in force for this rider after any requested decrease may not be
less than $50,000. You may terminate all coverage under this rider at any
time after the first Policy Year. You may not increase the specified amount
of this rider nor add this rider to your Policy after issue. Coverage under
this rider is not convertible.
You may select only one of the following riders:
WAIVER OF MONTHLY DEDUCTIONS ON DISABILITY RIDER. This rider provides for
the waiver of Monthly Deductions for the Policy and all riders while the
Insured is disabled.
DISABILITY BENEFIT PAYMENT RIDER. This 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 Policy Owner 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.
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 was organized under Nebraska law
on December 29, 1983, and is registered as a broker-dealer with the SEC and is a
member of the National Association of Securities Dealers
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("NASD"). AVLIC pays AIC for acting as the principal underwriter under an
Underwriting Agreement. In 1999, AIC received gross variable universal life
compensation of $12,586,675, and retained $352,850 in underwriting fees, and
$2,535 in brokerage commissions on AVLIC's variable universal life policies.
AIC offers its clients a wide variety of financial products and services and has
the ability to execute stock and bond transactions on a number of national
exchanges. AIC also serves as principal underwriter for AVLIC's variable
annuities, and for Ameritas Life's variable life and variable annuity products.
AIC is the underwriter for the Ameritas Portfolios, and also serves as its
investment adviser. It also has executed selling agreements with a variety of
mutual funds, unit investment trusts and direct participation programs.
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. The commission may equal an amount up to 30% of premium in the first
Policy Year and up to 12% of premium in renewal years. Broker-dealers may also
receive a service fee up to an annualized rate of .50% of the Accumulation Value
beginning in the sixth 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
laws except premium taxes (See discussion in the section on Percent of Premium
Charge). 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, Policy Owner or Beneficiary may be altered.
(1) 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 Separate Account V is not a separate entity 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 Separate
Account V 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 Separate
Account V 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 Separate Account V with respect to the sale of the
Policies. Accordingly, no charge is being made currently to Separate
Account V for federal income taxes. If, however, AVLIC determines that it
may incur such taxes attributable to Separate Account V, it may assess a
charge for such taxes against Separate Account V.
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 Separate Account V. If
CORPORATE BENEFIT VUL
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<PAGE> 40
there is a material change in state or local tax laws, charges for such
taxes attributable to Separate Account V, if any, may be assessed against
Separate Account V.
(2) 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 defined limits may
change. In the case of a decrease in the Death Benefit, a partial
withdrawal, 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 Policy
Owners in order for the Policy to continue complying with the Section 7702
defined limits on premiums and Accumulation Values, such distributions may
be taxable in whole or in part as ordinary income to the Policy Owner (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. If a life insurance policy is classified as a
modified endowment contract, distributions from it (including loans) are
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 Policy Owner may elect under this Policy may be
material changes affecting the 7-pay premium test. These include, but are
not limited to, changes in Death Benefits and changes in the Specified
Amount. Should the Policy become a "modified endowment contract" partial
withdrawals, 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 made prior to the taxpayer's age 59 1/2. The
10% penalty tax does not apply if the distribution is made because the
taxpayer becomes 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 taxpayer or
the joint lives of the taxpayer and Beneficiary. One may avoid a Policy
becoming a modified endowment contract by, among other things, not making
excessive payments or reducing benefits. Should you deposit excessive
premiums during a Policy Year, that portion that is returned by AVLIC
within 60 days after the Policy Anniversary Date will reduce the premiums
paid to avoid the Policy becoming a modified endowment contract. All
modified endowment policies issued by AVLIC to the same Policy Owner in any
12 month period are treated as one modified endowment contract for purposes
of determining taxable gain under Section 72(e) of the Internal Revenue
Code. Any life insurance policy received in exchange for a modified
endowment contract will also be treated as a modified endowment contract.
You 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 Separate Account V to be "adequately diversified" in order
for the Policy to be treated as a life insurance contract for federal tax
purposes. If the Policy is not treated as life insurance because it fails
the diversification requirements, the Policy Owner is then subject to
federal income tax on gain in the Policy as it is earned. Separate Account
V, 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.
While AIC and CAMCO, AVLIC affiliates, are the advisers to certain of the
portfolios, AVLIC does not have control over any of 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
CORPORATE BENEFIT VUL
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<PAGE> 41
policy 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, AVLIC reserves the right to modify the Policy as necessary to
prevent the Policy Owner from being considered the owner of the assets of
Separate Account V 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.
(3)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 will
generally be excludable from the gross income of the Beneficiary under
Section 101(a)(1) of the Code and the Policy Owner 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 may be taxed in whole or in part as ordinary income
(to the extent of gain in the Policy.) See previous discussion on Tax Status
of the Policy. In addition, certain exceptions apply to the general rule that
death benefit proceeds are non-taxable. Federal, state, and local tax
consequences of ownership or receipt of Policy proceeds depends on the
circumstances of each Policy Owner and Beneficiary.
AVLIC also believes that loans received under a Policy will be treated as
debt of the Policy Owner and that no part of any loan under a Policy will
constitute income to the Policy Owner so long as the Policy remains in
force, unless the Policy becomes a "modified endowment contract." See
discussion of modified endowment contract distributions in the section on
Tax Status of the Policy. 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 and debt limits, the Health Insurance
Portability and Accountability Act of 1996 (the "Health Insurance Act")
generally repealed the deduction for interest paid or accrued after October
13, 1995 on loans from corporate owned life insurance policies on the lives
of officers, employees or persons financially interested in the taxpayer's
trade or business. Certain transitional rules for then existing debt are
included in the Health Insurance Act. The transitional rules included a
phase-out of the deduction for debt 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 occurred over a transition
period between October 13, 1995 and January 1, 1999. There is also a
special rule for pre-June 21, 1986 policies. The Taxpayer Relief Act of
1997 ("TRA '97"), further expanded the interest deduction disallowance for
businesses by providing, with respect to policies issued after June 8,
1997, that no deduction is allowed for interest paid or accrued on any debt
with respect to life insurance covering the life of any individual (except
as noted above under pre-'97 law with respect to key persons and pre-June
21, 1986 policies). Any material change in a policy (including a material
increase in the death benefit) may cause the policy to be treated as a new
policy for purposes of this rule. TRA '97 also provides that no deduction
is permissible for premiums paid on a life insurance policy if the taxpayer
is directly or indirectly a beneficiary under the policy. Also under TRA
'97 and subject to certain exceptions, for policies issued after June 8,
1997, no deduction is allowed for that portion of a taxpayer's interest
expense that is allocable to unborrowed policy cash values. This
disallowance generally does not apply to policies owned by natural persons.
BUSINESSES CONTEMPLATING THE PURCHASE OF A NEW POLICY OR A CHANGE TO AN
EXISTING POLICY SHOULD CONSULT A QUALIFIED TAX ADVISOR REGARDING THE TAX
IMPLICATIONS OF THESE RULES FOR THEIR PARTICULAR SITUATIONS.
The right to change Policy Owners (See the section on General Provisions.)
and the provision for partial withdrawals (See the section on Partial
Withdrawals.) may have tax consequences depending on the circumstances of
such exchange, change, or partial withdrawal. Upon complete Surrender, if
CORPORATE BENEFIT VUL
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the amount received plus any Outstanding Policy Debt exceeds the total
premiums paid (the "basis") that are not treated as previously withdrawn by
the Policy Owner, the excess generally will be taxed as ordinary income.
Federal, state and local tax consequences of ownership or receipt of Death
Benefit Proceeds depend on applicable law and the circumstances of each
Policy Owner or Beneficiary. In addition, the tax consequences of using the
Policy in non-qualified deferred compensation, salary continuance, split-
dollar insurance, and executive bonus plans may vary depending on the
particular facts and circumstances of the arrangement. Further, 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. The advice of qualified tax counsel should be sought in
connection with use of life insurance in non-qualified or qualified plans.
YOU SHOULD CONSULT QUALIFIED TAX AND/OR LEGAL ADVISORS TO OBTAIN COMPLETE
INFORMATION ON FEDERAL, STATE AND LOCAL TAX CONSIDERATIONS APPLICABLE TO YOUR
PARTICULAR SITUATION
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
AVLIC holds the assets of Separate Account V. The assets are kept physically
segregated and held separately 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.
THIRD PARTY SERVICES
AVLIC is aware that certain third parties are offering investment advisory,
asset allocation, money management and timing services in connection with the
Policies. AVLIC does not engage any such third parties to offer such services of
any type. In certain cases, AVLIC has agreed to honor transfer instructions from
such services where it has received powers of attorney, in a form acceptable to
it, from the Policy Owners participating in the service. Firms or persons
offering such services do so independently from any agency relationship they may
have with AVLIC for the sale of Policies. AVLIC takes no responsibility for the
investment allocations and transfers transacted on a Policy Owner's behalf by
such third parties or any investment allocation recommendations made by such
parties. Policy Owners should be aware that fees paid for such services are
separate and in addition to fees paid under the Policies.
VOTING RIGHTS
AVLIC is the legal holder of the shares held in the Subaccounts of Separate
Account V and as such has the right to vote the shares, to elect Directors of
the Funds, and 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 shareholder
meeting. To the extent required by law, AVLIC will vote all shares of each of
the Funds held in Separate Account V at regular and special shareholder meetings
of the Funds according to instructions received from Policy Owners 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 Policy Owner 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 Policy Owners are received and Fund shares
held in each Subaccount which do not support Policy Owner 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
CORPORATE BENEFIT VUL
39
<PAGE> 43
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 Policy Owners of that action and its reasons for the action in the
next annual report or proxy statement to Policy Owners.
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 Separate Account V 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 Separate Account V.
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
This list shows name and position(s) with AVLIC followed by the principal
occupations for the last five years. 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.
LAWRENCE J. ARTH, DIRECTOR, CHAIRMAN OF THE BOARD, AND CHIEF EXECUTIVE OFFICER*
Director, Chairman of the Board, and Chief Executive Officer: Ameritas Life;
also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life.
WILLIAM J. ATHERTON, DIRECTOR, PRESIDENT, AND CHIEF OPERATING OFFICER*
Director: AMAL Corporation; President: North American Security Life Insurance
Company; also served as officer and/or director of other subsidiaries and/or
affiliates of North American.
KENNETH C. LOUIS, DIRECTOR, EXECUTIVE VICE PRESIDENT*
Director, President and Chief Operating Officer: Ameritas Life; also serves as
officer and/or director of other subsidiaries and/or affiliates of Ameritas
Life.
GARY R. MCPHAIL, DIRECTOR, EXECUTIVE VICE PRESIDENT**
Director, President, and Chief Executive Officer: AmerUs Life***; also serves as
officer and/or director of other subsidiaries and/or affiliates of AmerUs Life;
Executive Vice President -- Marketing and Individual Operations: New York Life
Insurance Company; President: Lincoln National Sales Corporation.
ROBERT C. BARTH, CONTROLLER*
Vice President and Controller: Ameritas Life.
CHARLES J. CAVANAUGH, SENIOR VICE PRESIDENT, NATIONAL SALES MANAGER*
Director, Product Manufacturing and Supply: Merrill Lynch Insurance Group;
Director of Marketing: ITT Hartford Life Insurance Companies.
CORPORATE BENEFIT VUL
40
<PAGE> 44
BRIAN J. CLARK, VICE PRESIDENT-FIXED ANNUITY PRODUCT DEVELOPMENT**
Senior Vice President -- Product Management: AmerUs Life***.
MICHAEL G. FRAIZER, DIRECTOR**
Controller: AmerUs Life***; also serves as director of an affiliate of AVLIC.
THOMAS C. GODLASKY, DIRECTOR, SENIOR VICE PRESIDENT AND CHIEF INVESTMENT
OFFICER**
Executive Vice President and Chief Investment Officer: AmerUs Life Holdings,
Inc.; Executive Vice President and Chief Investment Officer: AmerUs Life***;
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.
JOSEPH K. HAGGERTY, ASSISTANT GENERAL COUNSEL**
Senior Vice President and General Counsel: AmerUs Life Holdings, Inc.; Senior
Vice President and General Counsel: AmerUs Life***; 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.
SANDRA K. HOLMES, VICE PRESIDENT-FIXED ANNUITY CUSTOMER SERVICE**
Senior Vice President: AmerUs Life***.
KENNETH R. JONES, VICE PRESIDENT-CORPORATE COMPLIANCE AND ASSISTANT SECRETARY*
Vice President, Corporate Compliance & Assistant Secretary: Ameritas Life; also
serves as officer of other subsidiaries and/or affiliates of Ameritas Life.
CYNTHIA J. LAVELLE, VICE PRESIDENT -- PRODUCT, OPERATIONS AND TECHNOLOGY*
Assistant Vice President -- Variable Operations: Ameritas Life.
WILLIAM W. LESTER, TREASURER*
Senior Vice President -- Investments and Treasurer: Ameritas Life; also serves
as officer of affiliates of Ameritas Life.
JOANN M. MARTIN, DIRECTOR, VICE PRESIDENT AND CHIEF FINANCIAL OFFICER*
Senior Vice President and Chief Financial Officer: Ameritas Life; also serves as
officer and/or director of other subsidiaries and/or affiliates of Ameritas
Life.
SHIELA SANDY, ASSISTANT SECRETARY**
Manager Annuity Services: AmerUs Life***.
DONALD R. STADING, SECRETARY AND GENERAL COUNSEL*
Senior Vice President, Secretary and Corporate General Counsel: Ameritas Life;
also serves as officer and/or director of other subsidiaries and/or affiliates
of Ameritas Life.
KEVIN WAGONER, ASSISTANT TREASURER**
Director Investment Accounting: AmerUs Life***; Senior Financial Analyst: Target
Stores.
- ---------------
* Principal business address: Ameritas Variable Life Insurance Company, 5900
"O" Street, P.O. Box 82550, Lincoln, Nebraska 68501
** Principal business address: 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.)
CORPORATE BENEFIT VUL
41
<PAGE> 45
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 Donald R. Stading, Secretary and General Counsel of
AVLIC.
LEGAL PROCEEDINGS
There are no legal proceedings to which Separate Account V is a party or to
which the assets of Separate Account V are subject. AVLIC is not involved in any
litigation that is of material importance in relation to its ability to meet its
obligations under the Policies, or that relates to Separate Account V. AIC is
not involved in any litigation that is of material importance in relation to its
ability to perform under its underwriting agreement.
EXPERTS
The financial statements of AVLIC as of December 31, 1999 and 1998, and for each
of the three years in the period ended December 31, 1999, and the financial
statements of the subaccounts of Separate Account V as of December 31, 1999, and
for each of the three years in the period then ended, included in this
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports appearing herein, and are included in reliance upon the
reports of such firm given upon their authority as experts in accounting and
auditing.
Actuarial matters included in this prospectus have been examined by Russell J.
Wiltgen, Vice President -- Individual Product Management, 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 Separate Account V, 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 Separate Account V.
CORPORATE BENEFIT VUL
42
<PAGE> 46
INDEPENDENT AUDITORS' REPORT
Board of Directors
Ameritas Variable Life Insurance Company
Lincoln, Nebraska
We have audited the accompanying statement of net assets of each of the
subaccounts of Ameritas Variable Life Insurance Company Separate Account V,
(comprising, respectively, the Money Market Portfolio Initial Class,
Equity-Income Portfolio Initial Class, Equity- Income Portfolio Service Class
(commenced November 2, 1999), Growth Portfolio Initial Class, Growth Portfolio
Service Class (commenced November 2, 1999), High Income Portfolio Initial Class,
Overseas Portfolio Initial Class, and Overseas Portfolio Service Class
(commenced December 7, 1999) of the Variable Insurance Products Fund; the Asset
Manager Portfolio Initial Class, Asset Manager Portfolio Service Class
(commenced November 29, 1999), Investment Grade Bond Portfolio Initial Class,
Contrafund Portfolio Initial Class, Contrafund Portfolio Service Class
(commenced November 29, 1999), Index 500 Portfolio Initial Class and Asset
Manager Growth Portfolio Initial Class of the Variable Insurance Products Fund
II; the Small Capitalization Portfolio, Growth Portfolio, Income and Growth
Portfolio, Midcap Growth Portfolio, Balanced Portfolio, and Leveraged Allcap
Portfolio of the Alger American Fund; the Emerging Growth Series Portfolio,
World Governments Series Portfolio, Utilities Series Portfolio, Research Series
Portfolio (commenced April 8, 1997), Growth with Income Series Portfolio
(commenced April 3, 1997), and New Discovery Series Portfolio (commenced
November 12, 1999) of the MFS Variable Insurance Trust; the Asian Equity
Portfolio (commenced April 22, 1997), Emerging Markets Equity Portfolio, Global
Equity Portfolio (commenced April 17, 1997), International Magnum Portfolio
(commenced April 7, 1997), and U.S. Real Estate Portfolio (commenced April 28,
1997) of the Morgan Stanley Dean Witter Universal Funds, Inc.; the Ameritas
Emerging Growth Portfolio (commenced October 29, 1999), Ameritas Growth
Portfolio (commenced October 29, 1999), Ameritas Growth with Income Portfolio
(commenced October 29, 1999), Ameritas Income and Growth Portfolio (commenced
October 29, 1999), Ameritas Index 500 Portfolio (commenced October 29, 1999),
Ameritas Midcap Growth Portfolio (commenced October 29, 1999), Ameritas Money
Market Portfolio (commenced October 28, 1999), Ameritas Research Portfolio
(commenced October 29, 1999), Ameritas Small Capitalization Portfolio (commenced
October 29, 1999) of the Calvert Variable Series, Inc., Ameritas Portfolios; and
the Stock Index Fund Portfolio of the Dreyfus Stock Index Fund) as of December
31, 1999, 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, 1999. 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 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 each of the subaccounts constituting
Ameritas Variable Life Insurance Company Separate Account V as of December 31,
1999, and the results of its operations and changes in net assets for each of
the three years in the period then ended, in conformity with generally accepted
accounting principles.
/s/ DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 5, 2000
F-I- 1
<PAGE> 47
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
INVESTMENTS AT NET ASSET VALUE:
VARIABLE INSURANCE PRODUCTS FUND:
Equity-Income Portfolio Initial Class (Equity Income
I-Class) -- 1,200,052.051 shares at $25.71 per share
(cost $21,449,489).................................... $ 30,853,338
Equity-Income Portfolio Service Class (Equity Income
S-Class) -- 23.348 shares at $25.66 per share (cost
$594)................................................. 599
Growth Portfolio Initial Class (Growth
I-Class) -- 1,206,269.664 shares at $54.93 per share
(cost $32,300,729).................................... 66,260,394
Growth Portfolio Service Class (Growth
S-Class) -- 361.373 shares at $54.80 per share (cost
$19,113).............................................. 19,803
High Income Portfolio Initial Class (High Income
I-Class) -- 643,493.640 shares at $11.31 per share
(cost $6,964,598)..................................... 7,277,912
Overseas Portfolio Initial Class (Overseas
I-Class) -- 660,786.721 shares at $27.44 per share
(cost $9,282,319)..................................... 18,131,989
Overseas Portfolio Service Class (Overseas
S-Class) -- 1.414 shares at $27.38 per share (cost
$36).................................................. 39
VARIABLE INSURANCE PRODUCTS FUND II:
Asset Manager Portfolio Initial Class (Asset Manager
I-Class) -- 1,769,690.988 shares at $18.67 per share
(cost $25,080,444).................................... 33,040,130
Asset Manager Portfolio Service Class (Asset Manager
S-Class) -- 21.069 shares at $18.59 per share (cost
$384)................................................. 392
Investment Grade Bond Portfolio Initial Class
(Investment Grade Bond I-Class) -- 310,807.857 shares
at $12.16 per share (cost $3,717,866)................. 3,779,423
Contrafund Portfolio Initial Class (Contrafund
I-Class) -- 714,800.541 shares at $29.15 per share
(cost $13,879,737).................................... 20,836,438
Contrafund Portfolio Service Class (Contrafund
S-Class) -- 299.329 shares at $29.10 per share (cost
$8,528)............................................... 8,710
Asset Manager Growth Portfolio Initial Class (Asset
Manager Growth I-Class) -- 236,100.860 shares at
$18.38 per share (cost $3,489,495).................... 4,339,535
ALGER AMERICAN FUND:
Balanced Portfolio (Balanced) -- 326,807.439 shares at
$15.57 per share (cost $3,861,056).................... 5,088,391
Leveraged Allcap Portfolio (Leveraged
Allcap) -- 367,145.479 shares at $57.97 per share
(cost $12,666,837).................................... 21,283,423
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-I- 2
<PAGE> 48
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
ASSETS, CONTINUED
<TABLE>
<S> <C>
MFS VARIABLE INSURANCE TRUST:
World Governments Series Portfolio (World Governments
Series) -- 40,718.448 shares at $10.03 per share (cost
$411,142)............................................. $ 408,406
Utilities Series Portfolio (Utilities
Series) -- 232,575.290 shares at $24.16 per share
(cost $4,106,211)..................................... 5,619,019
New Discovery Series Portfolio (New Discovery
Series) -- 8,750.402 shares at $17.27 per share (cost
$143,173)............................................. 151,120
MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS, INC.:
Asian Equity Portfolio (Asian Equity) -- 116,856.034
shares at $9.34 per share (cost $757,264)............. 1,091,435
Emerging Markets Equity Portfolio (Emerging Markets
Equity) -- 157,426.804 shares at $13.84 per share
(cost $1,624,721)..................................... 2,178,789
Global Equity Portfolio (Global Equity) -- 207,539.068
shares at $12.88 per share (cost $2,574,700).......... 2,673,103
International Magnum Portfolio (International
Magnum) -- 126,932.562 shares at $13.89 per share
(cost $1,460,963)..................................... 1,763,093
U.S. Real Estate Portfolio (U.S. Real
Estate) -- 96,540.525 shares at $9.11 per share (cost
$1,036,611)........................................... 879,484
CALVERT VARIABLE SERIES, INC., AMERITAS PORTFOLIOS:
Ameritas Emerging Growth Portfolio (Emerging
Growth) -- 623,113.360 shares at $37.86 per share
(cost $16,161,699).................................... 23,591,072
Ameritas Growth Portfolio (Growth) -- 564,421.258
shares at $64.83 per share (cost $31,702,408)......... 36,591,430
Ameritas Growth with Income Portfolio (Growth with
Income) -- 181,873.924 shares at $21.17 per share
(cost $3,680,933)..................................... 3,850,270
Ameritas Income and Growth Portfolio (Income and
Growth) -- 668,452.484 shares at $17.35 per share
(cost $9,316,921)..................................... 11,597,650
Ameritas Index 500 Portfolio (Index 500) -- 181,738.510
shares at $167.30 per share (cost $28,210,421)........ 30,404,852
Ameritas Midcap Growth Portfolio (Midcap
Growth) -- 505,493.406 shares at $31.50 per share
(cost $13,387,683).................................... 15,923,042
Ameritas Money Market Portfolio (Money
Market) -- 18,688,200.480 shares at $1.00 per share
(cost $18,688,200).................................... 18,688,200
Ameritas Research Portfolio (Research) -- 187,533.532
shares at $22.99 per share (cost $3,784,743).......... 4,311,395
Ameritas Small Capitalization Portfolio (Small
Cap) -- 568,578.051 shares at $56.42 per share (cost
$25,098,528).......................................... 32,079,174
------------
NET ASSETS REPRESENTING EQUITY OF POLICYOWNERS......... $402,722,050
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-I- 3
<PAGE> 49
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
VARIABLE INSURANCE
PRODUCTS FUND
----------------------
MONEY EQUITY
MARKET INCOME
TOTAL I-CLASS I-CLASS
----------- --------- ----------
<S> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received.......................... $ 4,242,954 $ 624,763 $ 438,682
Mortality and expense risk charge........................ (2,932,292) (103,738) (285,410)
----------- --------- ----------
NET INVESTMENT INCOME (LOSS)............................... 1,310,662 521,025 153,272
----------- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions.......................... 18,596,394 -- 969,719
Net change in unrealized appreciation (depreciation)..... 65,629,180 -- 411,890
----------- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS............................. 84,225,574 -- 1,381,609
----------- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... $85,536,236 $ 521,025 $1,534,881
=========== ========= ==========
1998
INVESTMENT INCOME:
Dividend distributions received.......................... $ 3,349,781 $ 571,068 $ 350,608
Mortality and expense risk charge........................ (2,163,874) (100,578) (257,976)
----------- --------- ----------
NET INVESTMENT INCOME (LOSS)............................... 1,185,907 470,490 92,632
----------- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions.......................... 17,147,973 -- 1,247,753
Net change in unrealized appreciation (depreciation)..... 30,032,940 -- 1,327,445
----------- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS............................. 47,180,913 -- 2,575,198
----------- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... $48,366,820 $ 470,490 $2,667,830
=========== ========= ==========
1997
INVESTMENT INCOME:
Dividend distributions received.......................... $ 2,670,710 $ 463,675 $ 290,414
Mortality and expense risk charge........................ (1,574,558) (84,611) (201,066)
----------- --------- ----------
NET INVESTMENT INCOME (LOSS)............................... 1,096,152 379,064 89,348
----------- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain distributions.......................... 6,045,040 -- 1,460,138
Net change in unrealized appreciation (depreciation)..... 21,418,187 -- 3,371,385
----------- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS............................. 27,463,227 -- 4,831,523
----------- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS............................................... $28,559,379 $ 379,064 $4,920,871
=========== ========= ==========
</TABLE>
- ---------------
(1) Commenced business 11/02/99
(2) Commenced business 11/02/99
(3) Commenced business 12/07/99
The accompanying notes are an integral part of these financial statements.
F-I- 4
<PAGE> 50
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
----------------------------------------------------------------
EQUITY
INCOME GROWTH GROWTH HIGH INCOME OVERSEAS OVERSEAS
S-CLASS(1) I-CLASS S-CLASS(2) I-CLASS I-CLASS S-CLASS(3)
---------- ----------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ 82,737 $ -- $ 792,857 $ 226,340 $ --
-- (489,259) (5) (69,467) (138,144) --
---- ----------- ---- ----------- ---------- ----
-- (406,522) (5) 723,390 88,196 --
---- ----------- ---- ----------- ---------- ----
-- 5,202,111 -- 29,639 365,064 --
5 12,361,324 690 (141,192) 5,444,790 3
---- ----------- ---- ----------- ---------- ----
5 17,563,435 690 (111,553) 5,809,854 3
---- ----------- ---- ----------- ---------- ----
$ 5 $17,156,913 $685 $ 611,837 $5,898,050 $ 3
==== =========== ==== =========== ========== ====
$ -- $ 167,972 $ -- $ 558,849 $ 271,677 $ --
-- (354,109) -- (73,002) (128,820) --
---- ----------- ---- ----------- ---------- ----
-- (186,137) -- 485,847 142,857 --
---- ----------- ---- ----------- ---------- ----
-- 4,393,780 -- 355,102 800,734 --
-- 8,556,162 -- (1,057,850) 959,668 --
---- ----------- ---- ----------- ---------- ----
-- 12,949,942 -- (702,748) 1,760,402 --
---- ----------- ---- ----------- ---------- ----
$ -- $12,763,805 $ -- $ (216,901) $1,903,259 $ --
==== =========== ==== =========== ========== ====
$ -- $ 177,070 $ -- $ 456,382 $ 183,138 $ --
-- (278,073) -- (65,009) (115,217) --
---- ----------- ---- ----------- ---------- ----
-- (101,003) -- 391,373 67,921 --
---- ----------- ---- ----------- ---------- ----
-- 792,600 -- 56,407 727,004 --
-- 5,089,744 -- 585,776 646,688 --
---- ----------- ---- ----------- ---------- ----
-- 5,882,344 -- 642,183 1,373,692 --
---- ----------- ---- ----------- ---------- ----
$ -- $ 5,781,341 $ -- $ 1,033,556 $1,441,613 $ --
==== =========== ==== =========== ========== ====
</TABLE>
F-I- 5
<PAGE> 51
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
-----------------------------------------------------
INVESTMENT
ASSET ASSET GRADE
MANAGER MANAGER BOND CONTRAFUND
I-CLASS S-CLASS (1) I-CLASS I-CLASS
---------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received.............. $1,054,568 $-- $ 178,023 $ 68,862
Mortality and expense risk charge............ (290,374) -- (39,812) (148,735)
---------- -- --------- ----------
NET INVESTMENT INCOME (LOSS)................... 764,194 -- 138,211 (79,873)
---------- -- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 1,335,786 -- 55,850 504,989
Net change in unrealized appreciation
(depreciation)............................ 995,823 8 (290,852) 3,286,645
---------- -- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. 2,331,609 8 (235,002) 3,791,634
---------- -- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $3,095,803 $8 $ (96,791) $3,711,761
========== == ========= ==========
1998
INVESTMENT INCOME:
Dividend distributions received.............. $ 882,316 $-- $ 146,622 $ 56,896
Mortality and expense risk charge............ (271,404) -- (39,733) (93,506)
---------- -- --------- ----------
NET INVESTMENT INCOME (LOSS)................... 610,912 -- 106,889 (36,610)
---------- -- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 2,646,949 -- 17,396 418,590
Net change in unrealized appreciation
(depreciation)............................ 637,938 -- 179,497 2,407,939
---------- -- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. 3,284,887 -- 196,893 2,826,529
---------- -- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $3,895,799 $-- $ 303,782 $2,789,919
========== == ========= ==========
1997
INVESTMENT INCOME:
Dividend distributions received.............. $ 782,791 $-- $ 138,030 $ 28,971
Mortality and expense risk charge............ (232,839) -- (25,608) (50,896)
---------- -- --------- ----------
NET INVESTMENT INCOME (LOSS)................... 549,952 -- 112,422 (21,925)
---------- -- --------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 1,963,611 -- -- 76,565
Net change in unrealized appreciation
(depreciation)............................ 1,992,988 -- 89,590 991,738
---------- -- --------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. 3,956,599 -- 89,590 1,068,303
---------- -- --------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $4,506,551 $-- $ 202,012 $1,046,378
========== == ========= ==========
</TABLE>
- ---------------
(1) Commenced business 11/29/99
(2) Commenced business 11/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 6
<PAGE> 52
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II ALGER AMERICAN FUND
- --------------------------------------------- --------------------------------------------------------
ASSET
MANAGER
CONTRAFUND INDEX 500 GROWTH SMALL INCOME AND MIDCAP
S-CLASS(2) I-CLASS I-CLASS CAPITALIZATION GROWTH GROWTH GROWTH
----------- ---------- -------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 201,036 $ 80,579 $ -- $ 37,125 $ 14,347 $ --
-- (174,834) (32,359) (167,614) (201,618) (57,170) (91,219)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 26,202 48,220 (167,614) (164,493) (42,823) (91,219)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 136,418 133,643 2,786,842 2,534,821 426,544 1,862,002
182 2,171,872 333,686 352,557 1,454,079 490,297 (948,010)
----------- ---------- -------- ---------- ---------- ---------- ----------
182 2,308,290 467,329 3,139,399 3,988,900 916,841 913,992
----------- ---------- -------- ---------- ---------- ---------- ----------
$ 182 $2,334,492 $515,549 $2,971,785 $3,824,407 $ 874,018 $ 822,773
=========== ========== ======== ========== ========== ========== ==========
$ -- $ 131,792 $ 49,741 $ -- $ 41,754 $ 17,735 $ --
-- (135,441) (25,300) (169,257) (155,688) (49,041) (81,791)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- (3,649) 24,441 (169,257) (113,934) (31,306) (81,791)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 305,253 232,615 2,446,741 2,551,580 490,671 742,049
-- 3,342,102 175,258 623,620 4,267,982 1,071,043 1,766,399
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 3,647,355 407,873 3,070,361 6,819,562 1,561,714 2,508,448
----------- ---------- -------- ---------- ---------- ---------- ----------
$ -- $3,643,706 $432,314 $2,901,104 $6,705,628 $1,530,408 $2,426,657
=========== ========== ======== ========== ========== ========== ==========
$ -- $ 32,977 $ -- $ -- $ 32,883 $ 12,791 $ 3,623
-- (71,508) (14,685) (142,416) (98,937) (28,862) (62,763)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- (38,531) (14,685) (142,416) (66,054) (16,071) (59,140)
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 66,916 1,179 550,941 59,552 105,818 88,340
-- 1,946,609 322,064 1,210,960 2,142,136 755,171 768,190
----------- ---------- -------- ---------- ---------- ---------- ----------
-- 2,013,525 323,243 1,761,901 2,201,688 860,989 856,530
----------- ---------- -------- ---------- ---------- ---------- ----------
$ -- $1,974,994 $308,558 $1,619,485 $2,135,634 $ 844,918 $ 797,390
=========== ========== ======== ========== ========== ========== ==========
</TABLE>
F-I- 7
<PAGE> 53
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
MFS VARIABLE INSURANCE
ALGER AMERICAN FUND TRUST
---------------------- -------------------------
EMERGING WORLD
LEVERAGED GROWTH GOVERNMENTS
BALANCED ALLCAP SERIES SERIES
-------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received............... $ 39,415 $ -- $ -- $ 21,210
Mortality and expense risk charge............. (33,636) (99,090) (100,195) (3,721)
-------- ---------- ---------- --------
NET INVESTMENT INCOME (LOSS).................... 5,779 (99,090) (100,195) 17,489
-------- ---------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions............... 199,925 658,702 -- --
Net change in unrealized appreciation
(depreciation)............................. 769,554 6,672,254 2,583,588 (32,288)
-------- ---------- ---------- --------
NET GAIN (LOSS) ON INVESTMENTS.................. 969,479 7,330,956 2,583,588 (32,288)
-------- ---------- ---------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................... $975,258 $7,231,866 $2,483,393 $(14,799)
======== ========== ========== ========
1998
INVESTMENT INCOME:
Dividend distributions received............... $ 24,247 $ -- $ -- $ 3,936
Mortality and expense risk charge............. (16,462) (31,317) (83,222) (3,503)
-------- ---------- ---------- --------
NET INVESTMENT INCOME (LOSS).................... 7,785 (31,317) (83,222) 433
-------- ---------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions............... 107,704 147,338 76,320 --
Net change in unrealized appreciation
(depreciation)............................. 417,950 1,626,709 2,714,274 29,642
-------- ---------- ---------- --------
NET GAIN (LOSS) ON INVESTMENTS.................. 525,654 1,774,047 2,790,594 29,642
-------- ---------- ---------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................... $533,439 $1,742,730 $2,707,372 $ 30,075
======== ========== ========== ========
1997
INVESTMENT INCOME:
Dividend distributions received............... $ 12,338 $ -- $ -- $ 3,537
Mortality and expense risk charge............. (10,092) (17,451) (44,359) (1,978)
-------- ---------- ---------- --------
NET INVESTMENT INCOME (LOSS).................... 2,246 (17,451) (44,359) 1,559
-------- ---------- ---------- --------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions............... 16,729 -- -- 1,603
Net change in unrealized appreciation
(depreciation)............................. 162,920 298,847 937,800 (6,568)
-------- ---------- ---------- --------
NET GAIN (LOSS) ON INVESTMENTS.................. 179,649 298,847 937,800 (4,965)
-------- ---------- ---------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS............................... $181,895 $ 281,396 $ 893,441 $ (3,406)
======== ========== ========== ========
</TABLE>
- ---------------
(1) Commenced business 04/08/97
(2) Commenced business 04/03/97
(3) Commenced business 11/12/99
(4) Commenced business 04/22/97
(5) Commenced business 04/08/97
(6) Commenced business 04/17/97
The accompanying notes are an integral part of these financial statements.
F-I- 8
<PAGE> 54
<TABLE>
<CAPTION>
MORGAN STANLEY DEAN WITTER
MFS VARIABLE INSURANCE TRUST UNIVERSAL FUNDS, INC.
------------------------------------------------ ---------------------------------
GROWTH WITH NEW EMERGING
UTILITIES RESEARCH INCOME DISCOVERY ASIAN MARKETS GLOBAL
SERIES SERIES(1) SERIES(2) SERIES(3) EQUITY(4) EQUITY(5) EQUITY(6)
---------- --------- ----------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 45,844 $ 6,589 $ 12,252 $ -- $ 5,861 $ 320 $ 30,920
(35,886) (23,950) (25,262) (37) (5,901) (10,340) (20,462)
---------- -------- -------- ------ -------- --------- --------
9,958 (17,361) (13,010) (37) (40) (10,020) 10,458
---------- -------- -------- ------ -------- --------- --------
230,507 34,817 14,706 1,661 -- -- 119,961
986,318 222,022 (9,958) 7,946 388,267 917,707 (47,308)
---------- -------- -------- ------ -------- --------- --------
1,216,825 256,839 4,748 9,607 388,267 917,707 72,653
---------- -------- -------- ------ -------- --------- --------
$1,226,783 $239,478 $ (8,262) $9,570 $388,227 $ 907,687 $ 83,111
========== ======== ======== ====== ======== ========= ========
$ 24,469 $ 2,571 $ -- $ -- $ 2,129 $ 4,381 $ 14,013
(20,971) (17,327) (19,348) -- (2,084) (7,282) (13,265)
---------- -------- -------- ------ -------- --------- --------
3,498 (14,756) (19,348) -- 45 (2,901) 748
---------- -------- -------- ------ -------- --------- --------
111,249 33,714 -- -- -- -- 12,591
262,317 383,697 490,661 -- (2,798) (219,226) 143,561
---------- -------- -------- ------ -------- --------- --------
373,566 417,411 490,661 -- (2,798) (219,226) 156,152
---------- -------- -------- ------ -------- --------- --------
$ 377,064 $402,655 $471,313 $ -- $ (2,753) $(222,127) $156,900
========== ======== ======== ====== ======== ========= ========
$ -- $ -- $ 6,744 $ -- $ 232 $ 4,896 $ 5,533
(7,542) (2,824) (2,761) -- (495) (3,435) (2,294)
---------- -------- -------- ------ -------- --------- --------
(7,542) (2,824) 3,983 -- (263) 1,461 3,239
---------- -------- -------- ------ -------- --------- --------
-- -- 31,548 -- -- 21,661 11,816
255,610 18,241 3,513 -- (51,298) (144,415) 2,150
---------- -------- -------- ------ -------- --------- --------
255,610 18,241 35,061 -- (51,298) (122,754) 13,966
---------- -------- -------- ------ -------- --------- --------
$ 248,068 $ 15,417 $ 39,044 $ -- $(51,561) $(121,293) $ 17,205
========== ======== ======== ====== ======== ========= ========
</TABLE>
F-I- 9
<PAGE> 55
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
MORGAN STANLEY DEAN WITTER CALVERT VARIABLE SERIES, INC.,
UNIVERSAL FUNDS, INC. AMERITAS PORTFOLIOS
--------------------------- ------------------------------
INTERNATIONAL U.S. REAL EMERGING
MAGNUM(1) ESTATE(2) GROWTH(3) GROWTH(4)
------------- ---------- ------------- -------------
<S> <C> <C> <C> <C>
1999
INVESTMENT INCOME:
Dividend distributions received.............. $ 13,210 $ 48,301 $ -- $ 4,570
Mortality and expense risk charge............ (11,040) (7,470) (29,906) (53,250)
-------- --------- ---------- ----------
Net investment income (loss)................... 2,170 40,831 (29,906) (48,680)
-------- --------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 5,512 -- -- --
Net change in unrealized appreciation
(depreciation)............................ 307,353 (65,623) 7,429,373 4,889,022
-------- --------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. 312,865 (65,623) 7,429,373 4,889,022
-------- --------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $315,035 $ (24,792) $7,399,467 $4,840,342
======== ========= ========== ==========
1998
INVESTMENT INCOME:
Dividend distributions received.............. $ 2,795 $ 24,210 $ -- $ --
Mortality and expense risk charge............ (6,689) (6,758) -- --
-------- --------- ---------- ----------
NET INVESTMENT INCOME (LOSS)................... (3,894) 17,452 -- --
-------- --------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 3,255 6,589 -- --
Net change in unrealized appreciation
(depreciation)............................ 39,545 (110,595) -- --
-------- --------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. 42,800 (104,006) -- --
-------- --------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $ 38,906 $ (86,554) $ -- $ --
======== ========= ========== ==========
1997
INVESTMENT INCOME:
Dividend distributions received.............. $ 15,852 $ 9,641 $ -- $ --
Mortality and expense risk charge............ (1,903) (1,584) -- --
-------- --------- ---------- ----------
NET INVESTMENT INCOME (LOSS)................... 13,949 8,057 -- --
-------- --------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain distributions.............. 1,056 11,556 -- --
Net change in unrealized appreciation
(depreciation)............................ (44,768) 19,091 -- --
-------- --------- ---------- ----------
NET GAIN (LOSS) ON INVESTMENTS................. (43,712) 30,647 -- --
-------- --------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.............................. $(29,763) $ 38,704 $ -- $ --
======== ========= ========== ==========
</TABLE>
- ---------------
(1) Commenced business 04/07/97
(2) Commenced business 04/28/97
(3) Commenced business 10/29/99
(4) Commenced business 10/29/99
(5) Commenced business 10/29/99
(6) Commenced business 10/29/99
(7) Commenced business 10/29/99
(8) Commenced business 10/29/99
(9) Commenced business 10/28/99
(10) Commenced business 10/29/99
(11) Commenced business 10/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 10
<PAGE> 56
<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC.,
AMERITAS PORTFOLIOS DREYFUS
------------------------------------------------------------------------------------------- --------
GROWTH WITH INCOME AND INDEX MIDCAP MONEY SMALL STOCK
INCOME(5) GROWTH(6) 500(7) GROWTH(8) MARKET(9) RESEARCH(10) CAP(11) INDEX
----------- ---------- ---------- ---------- ---------- ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 1,856 $ -- $ 45,131 $ -- $167,556 $ -- $ -- $ --
(5,394) (16,266) (44,210) (23,079) (42,280) (6,148) (45,011) --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
(3,538) (16,266) 921 (23,079) 125,276 (6,148) (45,011) --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- 330,344 -- 358,344 -- 48,862 249,625 --
169,338 2,280,729 2,194,432 2,535,359 -- 526,653 6,980,645 --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
169,338 2,611,073 2,194,432 2,893,703 -- 575,515 7,230,270 --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
$165,800 $2,594,807 $2,195,353 $2,870,624 $125,276 $569,367 $7,185,259 $
======== ========== ========== ========== ======== ======== ========== ========
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- -- -- --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- --
-------- ---------- ---------- ---------- -------- -------- ---------- --------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
======== ========== ========== ========== ======== ======== ========== ========
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 9,192
-- -- -- -- -- -- -- (5,350)
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- 3,842
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- 54,025
-------- ---------- ---------- ---------- -------- -------- ---------- --------
-- -- -- -- -- -- -- 54,025
-------- ---------- ---------- ---------- -------- -------- ---------- --------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 57,867
======== ========== ========== ========== ======== ======== ========== ========
</TABLE>
F-I- 11
<PAGE> 57
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
VARIABLE INSURANCE
PRODUCTS FUND
---------------------------
MONEY EQUITY
MARKET INCOME
TOTAL I-CLASS I-CLASS
------------ ------------ -----------
<S> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)...................... $ 1,310,662 $ 521,025 $ 153,272
Net realized gain distributions................... 18,596,394 -- 969,719
Net change in unrealized appreciation
(depreciation)................................. 65,629,180 -- 411,890
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 85,536,236 521,025 1,534,881
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS...................................... 34,532,740 (11,626,149) (173,132)
------------ ------------ -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS............. 120,068,976 (11,105,124) 1,361,749
NET ASSETS AT JANUARY 1, 1999....................... 282,653,074 11,105,124 29,491,589
------------ ------------ -----------
NET ASSETS AT DECEMBER 31, 1999..................... $402,722,050 $ -- $30,853,338
============ ============ ===========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)...................... $ 1,185,907 $ 470,490 $ 92,632
Net realized gain distributions................... 17,147,973 -- 1,247,753
Net change in unrealized appreciation
(depreciation)................................. 30,032,940 -- 1,327,445
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 48,366,820 470,490 2,667,830
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS...................................... 36,557,125 3,082,148 2,101,252
------------ ------------ -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS............. 84,923,945 3,552,638 4,769,082
NET ASSETS AT JANUARY 1, 1998....................... 197,729,129 7,552,486 24,722,507
------------ ------------ -----------
NET ASSETS AT DECEMBER 31, 1998..................... $282,653,074 $ 11,105,124 $29,491,589
============ ============ ===========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)...................... $ 1,096,152 $ 379,064 $ 89,348
Net realized gain distributions................... 6,045,040 -- 1,460,138
Net change in unrealized appreciation
(depreciation)................................. 21,418,187 -- 3,371,385
------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS........................................ 28,559,379 379,064 4,920,871
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS...................................... 33,090,017 (464,346) 2,617,832
------------ ------------ -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS............. 61,649,396 (85,282) 7,538,703
NET ASSETS AT JANUARY 1, 1997....................... 136,079,733 7,637,768 17,183,804
------------ ------------ -----------
NET ASSETS AT DECEMBER 31, 1997..................... $197,729,129 $ 7,552,486 $24,722,507
============ ============ ===========
</TABLE>
- ---------------
(1) Commenced business 11/02/99
(2) Commenced business 11/02/99
(3) Commenced business 12/07/99
The accompanying notes are an integral part of these financial statements.
F-I- 12
<PAGE> 58
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
-------------------------------------------------------------------------------
EQUITY
INCOME GROWTH GROWTH HIGH INCOME OVERSEAS OVERSEAS
S-CLASS(1) I-CLASS S-CLASS(2) I-CLASS I-CLASS S-CLASS(3)
---------- ----------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ -- $ (406,522) $ (5) $ 723,390 $ 88,196 $--
-- 5,202,111 -- 29,639 365,064 --
5 12,361,324 690 (141,192) 5,444,790 3
---- ----------- ------- ----------- ----------- ---
5 17,156,913 685 611,837 5,898,050 3
594 2,880,969 19,118 (1,595,898) (2,386,280) 36
---- ----------- ------- ----------- ----------- ---
599 20,037,882 19,803 (984,061) 3,511,770 39
-- 46,222,512 -- 8,261,973 14,620,219 --
---- ----------- ------- ----------- ----------- ---
$599 $66,260,394 $19,803 $ 7,277,912 $18,131,989 $39
==== =========== ======= =========== =========== ===
$ -- $ (186,137) $ -- $ 485,847 $ 142,857 $--
-- 4,393,780 -- 355,102 800,734 --
-- 8,556,162 -- (1,057,850) 959,668 --
---- ----------- ------- ----------- ----------- ---
-- 12,763,805 -- (216,901) 1,903,259 --
-- 1,105,036 -- 353,039 (628,523) --
---- ----------- ------- ----------- ----------- ---
-- 13,868,841 -- 136,138 1,274,736 --
-- 32,353,671 -- 8,125,835 13,345,483 --
---- ----------- ------- ----------- ----------- ---
$ -- $46,222,512 $ -- $ 8,261,973 $14,620,219 $--
==== =========== ======= =========== =========== ===
$ -- $ (101,003) $ -- $ 391,373 $ 67,921 $--
-- 792,600 -- 56,407 727,004 --
-- 5,089,744 -- 585,776 646,688 --
---- ----------- ------- ----------- ----------- ---
-- 5,781,341 -- 1,033,556 1,441,613 --
-- 382,227 -- 104,745 1,242,175 --
---- ----------- ------- ----------- ----------- ---
-- 6,163,568 -- 1,138,301 2,683,788 --
-- 26,190,103 -- 6,987,534 10,661,695 --
---- ----------- ------- ----------- ----------- ---
$ -- $32,353,671 $ -- $ 8,125,835 $13,345,483 $--
==== =========== ======= =========== =========== ===
</TABLE>
F-I- 13
<PAGE> 59
SEPARATE ACCOUNT V
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
---------------------------------------------------
ASSET ASSET INVESTMENT
MANAGER MANAGER GRADE BOND CONTRAFUND
I-CLASS S-CLASS(1) I-CLASS I-CLASS
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).................... $ 764,194 $ -- $ 138,211 $ (79,873)
Net realized gain distributions................. 1,335,786 -- 55,850 504,989
Net change in unrealized appreciation
(depreciation)............................... 995,823 8 (290,852) 3,286,645
----------- ---- ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. 3,095,803 8 (96,791) 3,711,761
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS.................................... (1,888,691) 384 (571,758) 3,385,621
----------- ---- ---------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS........... 1,207,112 392 (668,549) 7,097,382
NET ASSETS AT JANUARY 1, 1999..................... 31,833,018 -- 4,447,972 13,739,056
----------- ---- ---------- -----------
NET ASSETS AT DECEMBER 31, 1999................... $33,040,130 $392 $3,779,423 $20,836,438
=========== ==== ========== ===========
1998
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).................... $ 610,912 $ -- $ 106,889 $ (36,610)
Net realized gain distributions................. 2,646,949 -- 17,396 418,590
Net change in unrealized appreciation
(depreciation)............................... 637,938 -- 179,497 2,407,939
----------- ---- ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. 3,895,799 -- 303,782 2,789,919
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS.................................... 353,744 -- 1,166,836 3,190,211
----------- ---- ---------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS........... 4,249,543 -- 1,470,618 5,980,130
NET ASSETS AT JANUARY 1, 1998..................... 27,583,475 -- 2,977,354 7,758,926
----------- ---- ---------- -----------
NET ASSETS AT DECEMBER 31, 1998................... $31,833,018 $ -- $4,447,972 $13,739,056
=========== ==== ========== ===========
1997
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss).................... $ 549,952 $ -- $ 112,422 $ (21,925)
Net realized gain distributions................. 1,963,611 -- -- 76,565
Net change in unrealized appreciation
(depreciation)............................... 1,992,988 -- 89,590 991,738
----------- ---- ---------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................. 4,506,551 -- 202,012 1,046,378
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS.................................... 614,816 -- 422,976 3,787,942
----------- ---- ---------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS........... 5,121,367 -- 624,988 4,834,320
NET ASSETS AT JANUARY 1, 1997..................... 22,462,108 -- 2,352,366 2,924,606
----------- ---- ---------- -----------
NET ASSETS AT DECEMBER 31, 1997................... $27,583,475 $ -- $2,977,354 $ 7,758,926
=========== ==== ========== ===========
</TABLE>
- ---------------
(1) Commenced business 11/29/99
(2) Commenced business 11/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 14
<PAGE> 60
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II ALGER AMERICAN FUND
----------------------------------------- ------------------------------------------------------------
ASSET MANAGER
CONTRAFUND INDEX 500 GROWTH SMALL INCOME AND
S-CLASS(2) I-CLASS I-CLASS CAPITALIZATION GROWTH GROWTH MIDCAP GROWTH
---------- ------------ ------------- -------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ -- $ 26,202 $ 48,220 $ (167,614) $ (164,493) $ (42,823) $ (91,219)
-- 136,418 133,643 2,786,842 2,534,821 426,544 1,862,002
182 2,171,872 333,686 352,557 1,454,079 490,297 (948,010)
------ ------------ ---------- ------------ ------------ ------------ ------------
182 2,334,492 515,549 2,971,785 3,824,407 874,018 822,773
8,528 (22,163,611) 518,100 (25,232,993) (27,172,870) (7,875,584) (12,108,131)
------ ------------ ---------- ------------ ------------ ------------ ------------
8,710 (19,829,119) 1,033,649 (22,261,208) (23,348,463) (7,001,566) (11,285,358)
-- 19,829,119 3,305,886 22,261,208 23,348,463 7,001,566 11,285,358
------ ------------ ---------- ------------ ------------ ------------ ------------
$8,710 $ -- $4,339,535 $ -- $ -- $ -- $ --
====== ============ ========== ============ ============ ============ ============
$ -- $ (3,649) $ 24,441 $ (169,257) $ (113,934) $ (31,306) $ (81,791)
-- 305,253 232,615 2,446,741 2,551,580 490,671 742,049
-- 3,342,102 175,258 623,620 4,267,982 1,071,043 1,766,399
------ ------------ ---------- ------------ ------------ ------------ ------------
-- 3,643,706 432,314 2,901,104 6,705,628 1,530,408 2,426,657
-- 5,349,378 582,288 1,708,481 3,802,750 1,281,319 1,308,265
------ ------------ ---------- ------------ ------------ ------------ ------------
-- 8,993,084 1,014,602 4,609,585 10,508,378 2,811,727 3,734,922
-- 10,836,035 2,291,284 17,651,623 12,840,085 4,189,839 7,550,436
------ ------------ ---------- ------------ ------------ ------------ ------------
$ -- $ 19,829,119 $3,305,886 $ 22,261,208 $ 23,348,463 $ 7,001,566 $ 11,285,358
====== ============ ========== ============ ============ ============ ============
$ -- $ (38,531) $ (14,685) $ (142,416) $ (66,054) $ (16,071) $ (59,140)
-- 66,916 1,179 550,941 59,552 105,818 88,340
-- 1,946,609 322,064 1,210,960 2,142,136 755,171 768,190
------ ------------ ---------- ------------ ------------ ------------ ------------
-- 1,974,994 308,558 1,619,485 2,135,634 844,918 797,390
-- 6,930,829 1,426,686 1,904,475 2,704,106 1,369,132 1,117,517
------ ------------ ---------- ------------ ------------ ------------ ------------
-- 8,905,823 1,735,244 3,523,960 4,839,740 2,214,050 1,914,907
-- 1,930,212 556,040 14,127,663 8,000,345 1,975,789 5,635,529
------ ------------ ---------- ------------ ------------ ------------ ------------
$ -- $ 10,836,035 $2,291,284 $ 17,651,623 $ 12,840,085 $ 4,189,839 $ 7,550,436
====== ============ ========== ============ ============ ============ ============
</TABLE>
F-I- 15
<PAGE> 61
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
ALGER AMERICAN FUND MFS VARIABLE INSURANCE TRUST
------------------------- ----------------------------
WORLD
LEVERAGED EMERGING GOVERNMENTS
BALANCED ALLCAP GROWTH SERIES SERIES
---------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)............. $ 5,779 $ (99,090) $ (100,195) $ 17,489
Net realized gain distributions.......... 199,925 658,702 -- --
Net change in unrealized appreciation
(depreciation)........................ 769,554 6,672,254 2,583,588 (32,288)
---------- ----------- ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................ 975,258 7,231,866 2,483,393 (14,799)
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS............................. 1,387,144 8,506,289 (14,698,847) (138,861)
---------- ----------- ------------ ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 2,362,402 15,738,155 (12,215,454) (153,660)
NET ASSETS AT JANUARY 1, 1999.............. 2,725,989 5,545,268 12,215,454 562,066
---------- ----------- ------------ ---------
NET ASSETS AT DECEMBER 31, 1999............ $5,088,391 $21,283,423 $ -- $ 408,406
========== =========== ============ =========
1998
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)............. $ 7,785 $ (31,317) $ (83,222) $ 433
Net realized gain distributions.......... 107,704 147,338 76,320 --
Net change in unrealized appreciation
(depreciation)........................ 417,950 1,626,709 2,714,274 29,642
---------- ----------- ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................ 533,439 1,742,730 2,707,372 30,075
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS............................. 844,417 1,370,291 2,799,432 310,132
---------- ----------- ------------ ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 1,377,856 3,113,021 5,506,804 340,207
NET ASSETS AT JANUARY 1, 1998.............. 1,348,133 2,432,247 6,708,650 221,859
---------- ----------- ------------ ---------
NET ASSETS AT DECEMBER 31, 1998............ $2,725,989 $ 5,545,268 $ 12,215,454 $ 562,066
========== =========== ============ =========
1997
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)............. $ 2,246 $ (17,451) $ (44,359) $ 1,559
Net realized gain distributions.......... 16,729 -- -- 1,603
Net change in unrealized appreciation
(depreciation)........................ 162,920 298,847 937,800 (6,568)
---------- ----------- ------------ ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS................ 181,895 281,396 893,441 (3,406)
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS............................. 253,322 962,301 3,250,610 41,843
---------- ----------- ------------ ---------
TOTAL INCREASE (DECREASE) IN NET ASSETS.... 435,217 1,243,697 4,144,051 38,437
NET ASSETS AT JANUARY 1, 1997.............. 912,916 1,188,550 2,564,599 183,422
---------- ----------- ------------ ---------
NET ASSETS AT DECEMBER 31, 1997............ $1,348,133 $ 2,432,247 $ 6,708,650 $ 221,859
========== =========== ============ =========
</TABLE>
- ---------------
(1) Commenced business 04/08/97
(2) Commenced business 04/03/97
(3) Commenced business 11/12/99
(4) Commenced business 04/22/97
(5) Commenced business 04/08/97
(6) Commenced business 04/17/97
The accompanying notes are an integral part of these financial statements.
F-I- 16
<PAGE> 62
<TABLE>
<CAPTION>
MORGAN STANLEY DEAN WITTER
MFS VARIABLE INSURANCE TRUST UNIVERSAL FUNDS, INC.
----------------------------------------------------- ------------------------------------
GROWTH WITH EMERGING
UTILITIES RESEARCH INCOME NEW DISCOVERY ASIAN MARKETS GLOBAL
SERIES SERIES(1) SERIES(2) SERIES(3) EQUITY(4) EQUITY(5) EQUITY(6)
---------- ---------- ----------- ------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 9,958 $ (17,361) $ (13,010) $ (37) $ (40) $ (10,020) $ 10,458
230,507 34,817 14,706 1,661 -- -- 119,961
986,318 222,022 (9,958) 7,946 388,267 917,707 (47,308)
---------- ---------- ----------- -------- ---------- ---------- ----------
1,226,783 239,478 (8,262) 9,570 388,227 907,687 83,111
1,095,173 (3,213,305) (3,524,676) 141,550 369,208 447,470 493,021
---------- ---------- ----------- -------- ---------- ---------- ----------
2,321,956 (2,973,827) (3,532,938) 151,120 757,435 1,355,157 576,132
3,297,063 2,973,827 3,532,938 -- 334,000 823,632 2,096,971
---------- ---------- ----------- -------- ---------- ---------- ----------
$5,619,019 $ -- $ -- $151,120 $1,091,435 $2,178,789 $2,673,103
========== ========== =========== ======== ========== ========== ==========
$ 3,498 $ (14,756) $ (19,348) $ -- $ 45 $ (2,901) $ 748
111,249 33,714 -- -- -- -- 12,591
262,317 383,697 490,661 -- (2,798) (219,226) 143,561
---------- ---------- ----------- -------- ---------- ---------- ----------
377,064 402,655 471,313 -- (2,753) (222,127) 156,900
1,222,669 1,600,841 1,428,853 -- 149,362 308,380 1,088,835
---------- ---------- ----------- -------- ---------- ---------- ----------
1,599,733 2,003,496 1,900,166 -- 146,609 86,253 1,245,735
1,697,330 970,331 1,632,772 -- 187,391 737,379 851,236
---------- ---------- ----------- -------- ---------- ---------- ----------
$3,297,063 $2,973,827 $ 3,532,938 $ -- $ 334,000 $ 823,632 $2,096,971
========== ========== =========== ======== ========== ========== ==========
$ (7,542) $ (2,824) $ 3,983 $ -- $ (263) $ 1,461 $ 3,239
-- -- 31,548 -- -- 21,661 11,816
255,610 18,241 3,513 -- (51,298) (144,415) 2,150
---------- ---------- ----------- -------- ---------- ---------- ----------
248,068 15,417 39,044 -- (51,561) (121,293) 17,205
1,057,600 954,914 1,593,728 -- 238,952 858,672 834,031
---------- ---------- ----------- -------- ---------- ---------- ----------
1,305,668 970,331 1,632,772 -- 187,391 737,379 851,236
391,662 -- -- -- -- -- --
---------- ---------- ----------- -------- ---------- ---------- ----------
$1,697,330 $ 970,331 $ 1,632,772 $ -- $ 187,391 $ 737,379 $ 851,236
========== ========== =========== ======== ========== ========== ==========
</TABLE>
F-I- 17
<PAGE> 63
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
MORGAN STANLEY
DEAN WITTER CALVERT VARIABLE SERIES, INC.,
UNIVERSAL FUNDS, INC. AMERITAS PORTFOLIOS
------------------------- -------------------------------
INTERNATIONAL U.S. REAL EMERGING
MAGNUM(1) ESTATE(2) GROWTH(3) GROWTH(4)
------------- --------- -------------- --------------
<S> <C> <C> <C> <C>
1999
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)................... $ 2,170 $ 40,831 $ (29,906) $ (48,680)
Net realized gain distributions................ 5,512 -- -- --
Net change in unrealized appreciation
(depreciation)............................... 307,353 (65,623) 7,429,373 4,889,022
---------- -------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ 315,035 (24,792) 7,399,467 4,840,342
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS................................... 514,795 44,736 16,191,605 31,751,088
---------- -------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......... 829,830 19,944 23,591,072 36,591,430
NET ASSETS AT JANUARY 1, 1999.................... 933,263 859,540 -- --
---------- -------- ----------- -----------
NET ASSETS AT DECEMBER 31, 1999.................. $1,763,093 $879,484 $23,591,072 $36,591,430
========== ======== =========== ===========
1998
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)................... $ (3,894) $ 17,452 $ -- $ --
Net realized gain distributions................ 3,255 6,589 -- --
Net change in unrealized appreciation
(depreciation)............................... 39,545 (110,595) -- --
---------- -------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ 38,906 (86,554) -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS................................... 363,729 313,960 -- --
---------- -------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......... 402,635 227,406 -- --
NET ASSETS AT JANUARY 1, 1998.................... 530,628 632,134 -- --
---------- -------- ----------- -----------
NET ASSETS AT DECEMBER 31, 1998.................. $ 933,263 $859,540 $ -- $ --
========== ======== =========== ===========
1997
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)................... $ 13,949 $ 8,057 $ -- $ --
Net realized gain distributions................ 1,056 11,556 -- --
Net change in unrealized appreciation
(depreciation)............................... (44,768) 19,091 -- --
---------- -------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS................................ (29,763) 38,704 -- --
NET INCREASE (DECREASE) FROM POLICYOWNER
TRANSACTIONS................................... 560,391 593,430 -- --
---------- -------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS.......... 530,628 632,134 -- --
NET ASSETS AT JANUARY 1, 1997.................... -- -- -- --
---------- -------- ----------- -----------
NET ASSETS AT DECEMBER 31, 1997.................. $ 530,628 $632,134 $ -- $ --
========== ======== =========== ===========
</TABLE>
- ---------------
(1) Commenced business 04/07/97
(2) Commenced business 04/28/97
(3) Commenced business 10/29/99
(4) Commenced business 10/29/99
(5) Commenced business 10/29/99
(6) Commenced business 10/29/99
(7) Commenced business 10/29/99
(8) Commenced business 10/29/99
(9) Commenced business 10/28/99
(10) Commenced business 10/29/99
(11) Commenced business 10/29/99
The accompanying notes are an integral part of these financial statements.
F-I- 18
<PAGE> 64
<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC., AMERITAS PORTFOLIOS DREYFUS
------------------------------------------------------------------------------------------------- -----------
GROWTH WITH INCOME AND MIDCAP MONEY SMALL
INCOME(5) GROWTH(6) INDEX 500(7) GROWTH(8) MARKET(9) RESEARCH(10) CAP(11) STOCK INDEX
----------- ----------- ------------ ----------- ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ (3,538) $ (16,266) $ 921 $ (23,079) $ 125,276 $ (6,148) $ (45,011) $ --
-- 330,344 -- 358,344 -- 48,862 249,625 --
169,338 2,280,729 2,194,432 2,535,359 -- 526,653 6,980,645 --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
165,800 2,594,807 2,195,353 2,870,624 125,276 569,367 7,185,259 --
3,684,470 9,002,843 28,209,499 13,052,418 18,562,924 3,742,028 24,893,915 --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
3,850,270 11,597,650 30,404,852 15,923,042 18,688,200 4,311,395 32,079,174 --
-- -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
$3,850,270 $11,597,650 $30,404,852 $15,923,042 $18,688,200 $4,311,395 $32,079,174 $ --
========== =========== =========== =========== =========== ========== =========== ===========
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
========== =========== =========== =========== =========== ========== =========== ===========
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ 3,842
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- 54,025
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
-- -- -- -- -- -- -- 57,867
-- -- -- -- -- -- -- (2,270,889)
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
-- -- -- -- -- -- -- (2,213,022)
-- -- -- -- -- -- -- 2,213,022
---------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
$ -- $ -- $ -- $ -- $ -- $ -- $ -- $ --
========== =========== =========== =========== =========== ========== =========== ===========
</TABLE>
F-I- 19
<PAGE> 65
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
1. 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 AMAL Corporation, a
holding company 66% owned by Ameritas Life Insurance Corp. (ALIC) and 34% owned
by AmerUs Life Insurance Company (AmerUs). 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, 1999, there are thirty-two
subaccounts within the Account. Seven of the subaccounts invest only in a
corresponding Portfolio of Variable Insurance Products Fund and six 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 (Fidelity). Two 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. (Alger Management). 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 (MFS Co.). Five of the subaccounts invest only in a
corresponding Portfolio of Morgan Stanley Dean Witter Universal Funds, Inc.
which is a diversified open-end management investment company managed by Morgan
Stanley Dean Witter Investment Management Inc. Nine of the subaccounts invest
only in a corresponding Portfolio of Calvert Variable Series, Inc. Ameritas
Portfolios (Ameritas Portfolio) which is a diversified open-end management
investment company managed by Ameritas Investment Corp. (see Note 3). 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 fund.
Pursuant to an order of the SEC allowing for the substitution, all policyowner
funds invested in a Portfolio of Fidelity Money Market were transferred to the
Money Market subaccount of the Ameritas Portfolio as of October 28, 1999. Also,
as of October 29, 1999 pursuant to an order of the SEC allowing for the
substitution, all policyowner funds invested in a Portfolio of Fidelity Index
500 I-Class were transferred to the Index 500 subaccount of the Ameritas
Portfolio; all policyowner funds invested in a Portfolio of Alger Management
Growth were transferred to the Growth subaccount of the Ameritas Portfolio; all
policyowner funds invested in a Portfolio of Alger Management Income and Growth
were transferred to the Income and Growth subaccount of the Ameritas Portfolio;
all policyowner funds invested in a Portfolio of Alger Management Small
Capitalization Fund were transferred to the Small Cap subaccount of the Ameritas
Portfolio; all policyowner funds invested in a Portfolio of Alger Management
MidCap Growth were transferred to the MidCap Growth subaccount of the Ameritas
Portfolio; all policyowner funds invested in a Portfolio of MFS Co. Emerging
Growth Series were transferred to the Emerging Growth subaccount of the Ameritas
Portfolio; all policyowner funds invested in a Portfolio of MFS Co. Research
Series was transferred to the Research subaccount of the Ameritas Portfolio; and
all policyowner funds invested in a Portfolio of MFS Co. Growth with Income
Series were transferred to the Growth with Income subaccount of the Ameritas
Portfolio.
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.
F-I- 20
<PAGE> 66
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND ACCOUNTING POLICIES -- (CONTINUED)
VALUATION OF INVESTMENTS
The assets of the Account are carried at the net asset value of the underlying
Portfolios. 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. Share transactions
and security transactions are accounted for on a trade date basis.
FEDERAL AND STATE TAXES
The operations of the Account are included in the federal income tax return of
AVLIC, which is taxed as a life insurance company under the Internal Revenue
Code. AVLIC has the right to charge the Account any federal income taxes, or
provision for federal income taxes, attributable to the operations of the
Account or to the policies funded in the Account. Currently, AVLIC does not make
a charge for income or other taxes. Charges for state and local taxes, if any,
attributable to the Account may also be made.
2. POLICYOWNER 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 policyowner, including the Fixed
Account option which is not reflected in this separate account.
3. RELATED PARTIES
During October 1999, AVLIC established a variable insurance trust (VIT) which
contains the Ameritas Portfolios. The Ameritas Portfolios are managed by
Ameritas Investment Corp., an affiliate of AVLIC. During the year ended December
31, 1999, the Account incurred advisory fees of approximately $119,000, payable
to Ameritas Investment Corp. Other affiliates of AVLIC also provided
sub-advisory and administrative services to the Ameritas Portfolios during 1999
of approximately $25,000.
F-I- 21
<PAGE> 67
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
4. SHARES OWNED
The Account invests in shares of mutual funds. Share activity and total
shares were as follows:
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
------------------------------------------------------------------------------
MONEY EQUITY EQUITY
MARKET INCOME INCOME GROWTH GROWTH
I-CLASS I-CLASS S-CLASS(1) I-CLASS S-CLASS(2)
---------------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Shares owned at
January 1, 1999.......... 11,105,124.310 1,160,172.618 -- 1,030,142.884 --
Shares acquired............ 99,920,927.670 476,446.645 23.847 680,116.041 362.428
Shares disposed of......... (111,026,051.980) (436,567.212) (0.499) (503,989.261) (1.055)
---------------- ------------- ------ ------------- -------
Shares owned at
December 31, 1999........ -- 1,200,052.051 23.348 1,206,269.664 361.373
================ ============= ====== ============= =======
Shares owned at
January 1, 1998.......... 7,552,485.910 1,018,225.148 -- 872,066.612 --
Shares acquired............ 96,112,872.130 590,346.286 -- 801,025.403 --
Shares disposed of......... (92,560,233.730) (448,398.816) -- (642,949.131) --
---------------- ------------- ------ ------------- -------
Shares owned at
December 31, 1998........ 11,105,124.310 1,160,172.618 -- 1,030,142.884 --
================ ============= ====== ============= =======
Shares owned at
January 1, 1997.......... 7,637,767.850 817,109.096 -- 841,043.772 --
Shares acquired............ 57,423,437.350 511,389.228 -- 339,254.481 --
Shares disposed of......... (57,508,719.290) (310,273.176) -- (308,231.641) --
---------------- ------------- ------ ------------- -------
Shares owned at
December 31, 1997........ 7,552,485.910 1,018,225.148 -- 872,066.612 --
================ ============= ====== ============= =======
</TABLE>
- ---------------
(1) Commenced business 11/02/99
(2) Commenced business 11/02/99
(3) Commenced business 12/07/99
(4) Commenced business 11/29/99
F-I- 22
<PAGE> 68
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND VARIABLE INSURANCE PRODUCTS FUND II
-------------------------------------------- --------------------------------------------------------
ASSET ASSET INVESTMENT
HIGH INCOME OVERSEAS OVERSEAS MANAGER MANAGER GRADE BOND CONTRAFUND
I-CLASS I-CLASS S-CLASS(3) I-CLASS S-CLASS(4) I-CLASS I-CLASS
-------------- -------------- ---------- ------------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
716,563.299 729,187.972 -- 1,752,919.543 -- 343,207.716 562,154.419
2,358,341.689 2,163,832.620 1.699 488,206.777 22.633 352,083.082 441,475.107
(2,431,411.348) (2,232,233.871) (0.285) (471,435.332) (1.564) (384,482.941) (288,828.985)
-------------- -------------- ------ ------------- ------ ------------ ------------
643,493.640 660,786.721 1.414 1,769,690.988 21.069 310,807.857 714,800.541
============== ============== ====== ============= ====== ============ ============
598,367.840 695,077.235 -- 1,531,564.418 -- 237,050.443 389,113.666
2,095,006.665 2,333,977.875 -- 678,058.443 -- 639,413.242 496,047.058
(1,976,811.206) (2,299,867.138) -- (456,703.318) -- (533,255.969) (323,006.305)
-------------- -------------- ------ ------------- ------ ------------ ------------
716,563.299 729,187.972 -- 1,752,919.543 -- 343,207.716 562,154.419
============== ============== ====== ============= ====== ============ ============
558,109.727 565,907.403 -- 1,326,763.623 -- 192,186.776 176,606.628
1,118,068.428 1,175,596.501 -- 598,138.814 -- 120,594.995 358,431.197
(1,077,810.315) (1,046,426.669) -- (393,338.019) -- (75,731.328) (145,924.159)
-------------- -------------- ------ ------------- ------ ------------ ------------
598,367.840 695,077.235 -- 1,531,564.418 -- 237,050.443 389,113.666
============== ============== ====== ============= ====== ============ ============
</TABLE>
F-I- 23
<PAGE> 69
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
4. SHARES OWNED -- (CONTINUED)
The Account invests in shares of mutual funds. Share activity and total shares
were as follows:
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II ALGER AMERICAN FUND
------------------------------------------ -----------------------------
ASSET MANAGER
CONTRAFUND INDEX 500 GROWTH SMALL
S-CLASS (1) I-CLASS I-CLASS CAPITALIZATION GROWTH
----------- ------------ ------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Shares owned at January 1,
1999.......................... 140,383.148 194,121.333 506,281.724 438,715.956
Shares acquired................. 300.373 106,248.904 130,128.414 484,219.127 314,912.653
Shares disposed of.............. (1.044) (246,632.052) (88,148.887) (990,500.851) (753,628.609)
------- ------------ ----------- ------------ ------------
Shares owned at December 31,
1999.......................... 299.329 -- 236,100.860 -- --
======= ============ =========== ============ ============
Shares owned at January 1,
1998.......................... -- 94,728.864 140,054.018 403,465.664 300,282.630
Shares acquired................. -- 128,107.356 152,783.138 441,926.395 397,157.183
Shares disposed of.............. -- (82,453.072) (98,715.823) (339,110.335) (258,723.857)
------- ------------ ----------- ------------ ------------
Shares owned at December 31,
1998.......................... -- 140,383.148 194,121.333 506,281.724 438,715.956
======= ============ =========== ============ ============
Shares owned at January 1,
1997.......................... -- 21,656.138 42,445.800 345,335.196 233,042.387
Shares acquired................. -- 129,171.432 137,282.584 311,521.638 204,589.158
Shares disposed of.............. -- (56,098.706) (39,674.366) (253,391.170) (137,348.915)
------- ------------ ----------- ------------ ------------
Shares owned at December 31,
1997.......................... -- 94,728.864 140,054.018 403,465.664 300,282.630
======= ============ =========== ============ ============
</TABLE>
- ---------------
(1) Commenced business 11/29/99
F-I- 24
<PAGE> 70
<TABLE>
<CAPTION>
ALGER AMERICAN FUND MFS VARIABLE INSURANCE TRUST
--------------------------------------------------------- ----------------------------------------------
WORLD
INCOME AND MIDCAP LEVERAGED EMERGING GOVERNMENTS
GROWTH GROWTH BALANCED ALLCAP GROWTH SERIES SERIES UTILITIES SERIES
------------ ------------ ------------ ------------ ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
533,655.926 390,902.572 210,014.615 158,890.232 568,954.541 51,660.465 166,350.240
399,442.614 295,894.469 243,382.099 408,802.915 361,380.381 81,155.171 187,829.047
(933,098.540) (686,797.041) (126,589.275) (200,547.668) (930,334.922) (92,097.188) (121,603.997)
------------ ------------ ------------ ------------ ------------ ----------- ------------
-- -- 326,807.439 367,145.479 -- 40,718.448 232,575.290
============ ============ ============ ============ ============ =========== ============
381,241.041 312,259.570 125,291.131 104,973.976 415,653.648 21,729.618 94,348.503
471,468.634 272,665.784 179,874.177 159,683.710 513,918.012 88,429.719 186,751.323
(319,053.749) (194,022.782) (95,150.693) (105,767.454) (360,617.119) (58,498.872) (114,749.586)
------------ ------------ ------------ ------------ ------------ ----------- ------------
533,655.926 390,902.572 210,014.615 158,890.232 568,954.541 51,660.465 166,350.240
============ ============ ============ ============ ============ =========== ============
234,654.249 263,959.188 98,800.487 61,392.043 193,700.823 17,336.705 28,672.191
389,297.914 245,052.311 64,650.229 108,499.936 457,734.629 37,542.368 107,581.620
(242,711.122) (196,751.929) (38,159.585) (64,918.003) (235,781.804) (33,149.455) (41,905.308)
------------ ------------ ------------ ------------ ------------ ----------- ------------
381,241.041 312,259.570 125,291.131 104,973.976 415,653.648 21,729.618 94,348.503
============ ============ ============ ============ ============ =========== ============
</TABLE>
F-I- 25
<PAGE> 71
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
4. SHARES OWNED -- (CONTINUED)
The Account invests in shares of mutual funds. Share activity and total shares
were as follows:
<TABLE>
<CAPTION>
MORGAN STANLEY DEAN WITTER
MFS VARIABLE INSURANCE TRUST UNIVERSAL FUNDS, INC.
------------------------------------------- ---------------------------
GROWTH WITH EMERGING
RESEARCH INCOME NEW DISCOVERY ASIAN MARKETS
SERIES(1) SERIES(2) SERIES(3) EQUITY(4) EQUITY(5)
------------ ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Shares owned at January 1,
1999....................... 156,106.437 175,680.697 -- 63,862.444 115,841.118
Shares acquired.............. 142,872.200 196,382.213 8,892.132 254,668.590 271,873.580
Shares disposed of........... (298,978.637) (372,062.910) (141.730) (201,675.000) (230,287.894)
------------ ------------ --------- ------------ ------------
Shares owned at December 31,
1999....................... -- -- 8,750.402 116,856.034 157,426.804
============ ============ ========= ============ ============
Shares owned at January 1,
1998....................... 61,452.261 99,317.062 -- 33,225.337 78,194.995
Shares acquired.............. 173,038.858 226,820.471 -- 99,976.563 334,441.671
Shares disposed of........... (78,384.682) (150,456.836) -- (69,339.456) (296,795.548)
------------ ------------ --------- ------------ ------------
Shares owned at December 31,
1998....................... 156,106.437 175,680.697 -- 63,862.444 115,841.118
============ ============ ========= ============ ============
Shares owned at January 1,
1997....................... -- -- -- -- --
Shares acquired.............. 72,826.540 110,180.302 -- 51,430.390 140,386.479
Shares disposed of........... (11,374.279) (10,863.240) -- (18,205.053) (62,191.484)
------------ ------------ --------- ------------ ------------
Shares owned at December 31,
1997....................... 61,452.261 99,317.062 -- 33,225.337 78,194.995
============ ============ ========= ============ ============
</TABLE>
- ---------------
(1) Commenced business 04/08/97
(2) Commenced business 04/03/97
(3) Commenced business 11/12/99
(4) Commenced business 04/22/97
(5) Commenced business 04/08/97
(6) Commenced business 04/17/97
(7) Commenced business 04/07/97
(8) Commenced business 04/28/97
(9) Commenced business 10/29/99
(10) Commenced business 10/29/99
(11) Commenced business 10/29/99
F-I- 26
<PAGE> 72
<TABLE>
<CAPTION>
MORGAN STANLEY DEAN WITTER CALVERT VARIABLE SERIES, INC.,
UNIVERSAL FUNDS, INC. AMERITAS PORTFOLIOS
------------------------------------------- ---------------------------------------
GLOBAL INTERNATIONAL U.S. REAL EMERGING GROWTH WITH
EQUITY(6) MAGNUM(7) ESTATE(8) GROWTH(9) GROWTH(10) INCOME(11)
------------ ------------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
159,586.755 83,104.465 87,708.290 -- -- --
180,054.175 156,678.468 86,347.339 681,160.044 618,142.153 201,328.796
(132,101.862) (112,850.371) (77,515.104) (58,046.684) (53,720.895) (19,454.872)
------------ ------------ ------------ ----------- ----------- -----------
207,539.068 126,932.562 96,540.525 623,113.360 564,421.258 181,873.924
============ ============ ============ =========== =========== ===========
72,507.289 51,120.253 55,401.749 -- -- --
172,405.252 120,740.453 136,182.392 -- -- --
(85,325.786) (88,756.241) (103,875.851) -- -- --
------------ ------------ ------------ ----------- ----------- -----------
159,586.755 83,104.465 87,708.290 -- -- --
============ ============ ============ =========== =========== ===========
-- -- -- -- -- --
93,896.403 77,530.448 97,640.967 -- -- --
(21,389.114) (26,410.195) (42,239.218) -- -- --
------------ ------------ ------------ ----------- ----------- -----------
72,507.289 51,120.253 55,401.749 -- -- --
============ ============ ============ =========== =========== ===========
</TABLE>
F-I- 27
<PAGE> 73
AMERITAS VARIABLE INSURANCE COMPANY
SEPARATE ACCOUNT V
NOTES TO FINANCIAL STATEMENTS
4. SHARES OWNED -- (CONTINUED)
The Account invests in shares of mutual funds. Share activity and total shares
were as follows:
<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC.,
AMERITAS PORTFOLIOS
-------------------------------------------------------------
INCOME AND MIDCAP
GROWTH(1) INDEX 500(2) GROWTH(3) MONEY MARKET(4)
----------- ------------ ----------- ---------------
<S> <C> <C> <C> <C>
Shares owned at January 1, 1999........ -- -- -- --
Shares acquired........................ 739,847.832 199,984.145 547,305.396 38,484,753.390
Shares disposed of..................... (71,395.348) (18,245.635) (41,811.990) (19,796,552.910)
----------- ----------- ----------- ---------------
Shares owned at December 31, 1999...... 668,452.484 181,738.510 505,493.406 18,688,200.480
=========== =========== =========== ===============
Shares owned at January 1, 1998........ -- -- -- --
Shares acquired........................ -- -- -- --
Shares disposed of..................... -- -- -- --
----------- ----------- ----------- ---------------
Shares owned at December 31, 1998...... -- -- -- --
=========== =========== =========== ===============
Shares owned at January 1, 1997........ -- -- -- --
Shares acquired........................ -- -- -- --
Shares disposed of..................... -- -- -- --
----------- ----------- ----------- ---------------
Shares owned at December 31, 1997...... -- -- -- --
=========== =========== =========== ===============
</TABLE>
- ---------------
(1) Commenced business 10/29/99
(2) Commenced business 10/29/99
(3) Commenced business 10/29/99
(4) Commenced business 10/28/99
(5) Commenced business 10/29/99
(6) Commenced business 10/29/99
F-I- 28
<PAGE> 74
<TABLE>
<CAPTION>
CALVERT VARIABLE SERIES, INC.,
AMERITAS PORTFOLIOS DREYFUS
------------------------------ ------------
RESEARCH(5) SMALL CAP(6) STOCK INDEX
------------ ------------ ------------
<S> <C> <C> <C>
-- -- --
214,317.878 633,188.695 --
(26,784.346) (64,610.644) --
----------- ----------- ------------
187,533.532 568,578.051 --
=========== =========== ============
-- -- --
-- -- --
-- -- --
----------- ----------- ------------
-- -- --
=========== =========== ============
-- -- 109,123.387
-- -- 2,530.208
-- -- (111,653.595)
----------- ----------- ------------
-- -- --
=========== =========== ============
</TABLE>
F-I- 29
<PAGE> 75
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 (a wholly owned subsidiary of AMAL Corporation) as of December
31, 1999 and 1998, and the related statements of operations, comprehensive
income, stockholder's equity, and cash flows for each of the three years in the
period ended December 31, 1999. 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, 1999 and 1998, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
Lincoln, Nebraska
February 5, 2000
F-II- 1
<PAGE> 76
AMERITAS VARIABLE LIFE INSURANCE COMPANY
BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31
------------------------
1999 1998
---------- ----------
<S> <C> <C>
ASSETS
Investments:
Fixed maturity securities, available for sale (amortized
cost $129,567 -- 12/99 and $146,650 -- 12/98).......... $ 124,734 $ 150,462
Equity securities, available for sale (amortized cost
$2,031 -- 12/99 and $2,031 -- 12/98)................... 1,705 2,020
Mortgage loans on real estate............................. 1,392 --
Loans on insurance policies............................... 16,499 10,949
Other invested assets..................................... -- 10,020
---------- ----------
Total investments................................. 144,330 173,451
Cash and cash equivalents................................... 11,970 12,011
Accrued investment income................................... 2,442 2,425
Reinsurance receivable-affiliate............................ 35,921 --
Reinsurance recoverable-affiliates.......................... 153 455
Prepaid reinsurance premium-affiliates...................... 2,537 2,380
Deferred policy acquisition costs........................... 152,297 121,236
Other....................................................... 2,840 1,695
Separate Accounts........................................... 2,394,445 1,709,448
---------- ----------
$2,746,935 $2,023,101
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES:
Policy and contract reserves.............................. $ 2,185 $ 1,681
Policy and contract claims................................ 755 625
Accumulated contract values............................... 240,050 213,874
Unearned policy charges................................... 2,030 1,814
Unearned reinsurance ceded allowance...................... 3,942 3,596
Federal income taxes--
Current................................................ 2,922 2,941
Deferred............................................... 6,725 8,348
Accounts payable -- affiliates............................ 7,285 3,364
Other..................................................... 6,639 4,722
Separate Accounts......................................... 2,394,445 1,709,448
---------- ----------
Total Liabilities................................. 2,666,978 1,950,413
---------- ----------
STOCKHOLDER'S EQUITY:
Common stock, par value $100 per share; authorized 50,000
shares, issued and outstanding 40,000 shares........... 4,000 4,000
Additional paid-in capital................................ 42,870 40,370
Retained earnings......................................... 34,032 27,434
Accumulated other comprehensive income.................... (945) 884
---------- ----------
Total Stockholder's Equity........................ 79,957 72,688
---------- ----------
$2,746,935 $2,023,101
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-II- 2
<PAGE> 77
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------
1999 1998 1997
------- ------- -------
<S> <C> <C> <C>
INCOME:
Insurance revenues:
Contract charges.......................................... $51,794 $42,775 $33,717
Premium-reinsurance ceded................................. (8,683) (7,836) (6,840)
Reinsurance ceded allowance............................... 3,594 3,169 2,752
Investment revenues:
Investment income, net.................................... 13,970 14,052 8,277
Realized gains (losses), net.............................. (1,786) 79 368
Other....................................................... 3,016 2,269 980
------- ------- -------
61,905 54,508 39,254
------- ------- -------
BENEFITS AND EXPENSES:
Policy benefits:
Death benefits............................................ 2,805 2,200 1,356
Interest credited......................................... 12,512 13,400 7,258
Increase in policy and contract reserves.................. 504 740 192
Other..................................................... 190 222 92
Sales and operating expenses................................ 22,277 15,980 11,641
Amortization of deferred policy acquisition costs........... 12,760 11,847 9,584
------- ------- -------
51,048 44,389 30,123
------- ------- -------
INCOME BEFORE FEDERAL INCOME TAXES.......................... 10,857 10,119 9,131
------- ------- -------
Income taxes -- current..................................... 4,898 4,000 4,305
Income taxes -- deferred.................................... (639) (1,135) (844)
------- ------- -------
Total income taxes................................... 4,259 2,865 3,461
------- ------- -------
NET INCOME.................................................. $ 6,598 $ 7,254 $ 5,670
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-II- 3
<PAGE> 78
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Net income.................................................. $6,598 $7,254 $5,670
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during period
(net of deferred tax of ($1,610), $185 and $378 for
1999, 1998 and 1997 respectively)..................... (2,990) 343 702
Reclassification adjustment for (gains) losses included
in net income (net of deferred tax of $625, ($28) and
($129) for 1999, 1998 and 1997 respectively).......... 1,161 (51) (239)
------ ------ ------
Other comprehensive income (loss)......................... (1,829) 292 463
------ ------ ------
Comprehensive income........................................ $4,769 $7,546 $6,133
====== ====== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-II- 4
<PAGE> 79
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARES)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER
---------------- PAID-IN RETAINED COMPREHENSIVE
SHARES AMOUNT CAPITAL EARNINGS INCOME TOTAL
------ ------ ---------- -------- ------------- -----
<S> <C> <C> <C> <C> <C> <C>
BALANCE, January 1, 1997................. 40,000 $4,000 $40,370 $14,510 $ 129 $59,009
Net unrealized investment gain, net.... -- -- -- -- 463 463
Net income............................. -- -- -- 5,670 -- 5,670
------ ------ ------- ------- ------- -------
BALANCE, December 31, 1997............... 40,000 4,000 40,370 20,180 592 65,142
Net unrealized investment gain, net.... -- -- -- -- 292 292
Net income............................. -- -- -- 7,254 -- 7,254
------ ------ ------- ------- ------- -------
BALANCE, December 31, 1998............... 40,000 4,000 40,370 27,434 884 72,688
Net unrealized investment loss, net.... -- -- -- -- (1,829) (1,829)
Capital contribution................... -- -- 2,500 -- -- 2,500
Net income............................. -- -- -- 6,598 -- 6,598
------ ------ ------- ------- ------- -------
BALANCE, December 31, 1999............... 40,000 $4,000 $42,870 $34,032 $ (945) $79,957
====== ====== ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-II- 5
<PAGE> 80
AMERITAS VARIABLE LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income.................................................. $ 6,598 $ 7,254 $ 5,670
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of deferred policy acquisition costs......... 12,760 11,847 9,584
Policy acquisition costs deferred......................... (39,491) (34,820) (30,642)
Interest credited to contract values...................... 12,512 13,400 7,258
Amortization of discounts or premiums..................... 67 (28) (40)
Net gains on other invested assets........................ (2,830) (3,732) (631)
Net realized (gains) losses on investment transactions.... 1,786 (79) (368)
Deferred income taxes..................................... (639) (1,135) (844)
Change in assets and liabilities:
Accrued investment income.............................. (17) (624) (705)
Reinsurance recoverable-affiliates..................... 302 59 (505)
Prepaid reinsurance premium-affiliates................. (157) (82) (142)
Other assets........................................... (1,145) (1,496) 284
Policy and contract reserves........................... 504 740 192
Policy and contract claims............................. 130 (300) 819
Unearned policy charges................................ 216 316 255
Federal income tax payable-current..................... (19) 1,475 591
Unearned reinsurance ceded allowance................... 346 328 129
Other liabilities...................................... 5,838 (2,114) 2,172
-------- -------- --------
Net cash from operating activities........................ (3,239) (8,991) (6,923)
-------- -------- --------
INVESTING ACTIVITIES
Purchase of fixed maturity securities available for sale.... (48,474) (70,904) (92,291)
Purchase of equity securities available for sale............ -- -- (4,311)
Purchase of mortgage loans on real estate................... (1,400) --
Purchase of other invested assets........................... (1,252) (7,760) (1,611)
Proceeds from maturities or repayment of fixed maturity
securities available for sale............................. 11,242 15,289 25,168
Proceeds from sales of fixed maturity securities available
for sale.................................................. 7,762 22,282 16,419
Proceeds from the sale of equity securities available for
sale...................................................... -- 1,979 252
Proceeds from the sale of other invested assets............. 1,162 3,678 35
Net change in loans on insurance policies................... (5,550) (3,467) (3,173)
-------- -------- --------
Net cash from investing activities........................ (36,510) (38,903) (59,512)
-------- -------- --------
FINANCING ACTIVITIES
Capital contribution........................................ 2,500 -- --
Net change in accumulated contract values................... 37,208 46,194 69,462
-------- -------- --------
Net cash from financing activities........................ 39,708 46,194 69,462
-------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ (41) (1,700) 3,027
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............ 12,011 13,711 10,684
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 11,970 $ 12,011 $ 13,711
======== ======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes.................................. $ 4,917 $ 2,525 $ 3,714
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-II- 6
<PAGE> 81
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(IN THOUSANDS)
1. 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 AMAL
Corporation, a holding company 66% owned by Ameritas Life Insurance Corp. (ALIC)
and 34% owned by AmerUs Life Insurance Company (AmerUs). The Company began
issuing variable life insurance and variable annuity policies in 1987, fixed
premium annuities in 1996 and equity indexed annuities in 1997. The variable
life, variable annuity, fixed premium annuity and equity indexed annuity
policies are not participating with respect to dividends.
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
The Company classifies its securities into categories based upon the Company's
intent relative to the eventual disposition of the securities. The first
category, held to maturity securities, is comprised of fixed maturity securities
which the Company has the positive intent and ability to hold to maturity. These
securities are carried at amortized cost. The second category, available for
sale securities, may be sold to address the liquidity and other needs of the
Company. Securities classified as available for sale are carried at fair value
on the balance sheet with unrealized gains and losses excluded from operations
and reported as a separate component of stockholder's equity, net of related
deferred acquisition costs and income tax effects. The third category, trading
securities, is for debt and equity securities acquired for the purpose of
selling them in the near term. The Company has classified all of its securities
as available for sale. Realized investment gains and losses on sales of
securities are determined on the specific identification method.
Other Invested Assets consist of exchange and privately traded options tied to
the Standard and Poor's Index and are valued at fair value with changes in the
fair value of these investments and realized gains on these investments included
in net investment income.
The Company records write-offs or allowances for its investments based upon an
evaluation of specific problem investments. The Company reviews, on a continual
basis, all invested assets to identify investments where the Company may have
credit concerns. Investments with credit concerns include those the Company has
identified as experiencing a deterioration in financial condition. The Company
has no write-offs or allowances recorded as of December 31, 1999, 1998 and 1997.
CASH EQUIVALENTS
The Company considers all highly liquid debt securities purchased with remaining
maturity of less than three months to be cash equivalents.
F-II- 7
<PAGE> 82
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
SEPARATE ACCOUNTS
The Company operates separate accounts on which the earnings or losses accrue
exclusively to contractholders. The assets (mutual fund investments) and
liabilities of each account are clearly identifiable and distinguishable from
other assets and liabilities of the Company. Assets are reported at fair value.
PREMIUM REVENUE AND BENEFITS TO POLICYOWNERS
RECOGNITION OF UNIVERSAL LIFE-TYPE CONTRACTS REVENUE AND BENEFITS TO
POLICYOWNERS
Universal life-type policies are insurance contracts with terms that are not
fixed and guaranteed. The terms that may be changed could include one or more of
the amounts assessed the policyowner, premiums paid by the policyowner or
interest accrued to policyowners balances. Amounts received as payments for such
contracts are reflected as deposits in accumulated contract values and are not
reported as premium revenues.
Revenues for universal life-type policies consist of charges assessed against
policy account values for deferred policy loading, mortality risk expense, the
cost of insurance and policy administration. Policy benefits and claims that are
charged to expense include interest credited to contracts under the fixed
account investment option and benefit claims incurred in the period in excess of
related policy account balances.
RECOGNITION OF INVESTMENT CONTRACT REVENUE AND BENEFITS TO POLICYOWNERS
Contracts that do not subject the Company to risks arising from policyowner
mortality or morbidity are referred to as investment contracts. Certain deferred
annuities are considered investment contracts. Amounts received as payments for
such contracts are reflected as deposits in accumulated contract values and are
not reported as premium revenues.
Revenues for investment products consist of investment income and policy
administration charges. Contract benefits that are charged to expense include
benefit claims incurred in the period in excess of related contract balances,
and interest credited to contract balances.
POLICY ACQUISITION COSTS
Those costs of acquiring new business, which vary with and are directly related
to the production of new business, have been deferred to the extent that such
costs are deemed recoverable from future premiums. Such costs include
commissions, certain costs of policy issuance and underwriting, and certain
variable distribution expenses.
Costs deferred related to universal life-type policies and investment-type
contracts are amortized generally over the lives of the policies, in relation to
the present value of estimated gross profits from mortality, investment and
expense margins. The estimated gross profits are reviewed periodically based on
actual experience and changes in assumptions.
F-II- 8
<PAGE> 83
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES -- (CONTINUED)
A roll-forward of the amounts reflected in the balance sheets as deferred
acquisition costs is as follows:
<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------
1999 1998 1997
-------- -------- -------
<S> <C> <C> <C>
Beginning balance........................................... $121,236 $ 98,746 $79,272
Acquisition costs deferred.................................. 39,491 34,820 30,642
Amortization of deferred policy acquisition costs........... (12,760) (11,847) (9,584)
Adjustment for unrealized investment (gain)/loss............ 6,145 (483) (1,584)
Balance released under co-insurance agreement (note 4)...... (1,815) -- --
-------- -------- -------
Ending balance.............................................. $152,297 $121,236 $98,746
======== ======== =======
</TABLE>
To the extent that unrealized gains or losses on available for sale securities
would result in an adjustment of deferred policy acquisition costs had those
gains or losses actually been realized, the related unamortized deferred policy
acquisition costs are recorded as an adjustment of the unrealized investment
gains or losses included in stockholder's equity.
FUTURE POLICY AND CONTRACT BENEFITS
Liabilities for future policy and contract benefits left with the Company on
variable universal life and annuity-type contracts are based on the policy
account balance, and are shown as accumulated contract values. In addition, the
Company carries as future policy benefits a liability for additional coverages
offered under policy riders.
INCOME TAXES
The provision for income taxes includes amounts currently payable and deferred
income taxes resulting from the cumulative differences in assets and liabilities
determined on a tax return and financial statement basis at the current enacted
tax rates.
NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, entitled "Accounting for Derivative
Instruments and Hedging Activities" (SFAS No. 133). The statement requires that
all derivatives (including certain derivatives embedded in contracts) be
recorded on the balance sheet and measured at fair value. SFAS No. 133 requires
that changes in the fair value of derivatives be recognized currently in
operations unless specific hedge accounting criteria are met. If such criteria
are met, the derivative's gain or loss will offset related results of the hedged
item in the statement of operations. A company must formally document, designate
and assess the effectiveness of transactions to apply hedge accounting
treatment.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000, with
earlier implementation permitted. The statement must be implemented as of the
beginning of a quarter and retroactive application to financial statements of
prior periods is prohibited. The Company has not determined the financial
statement impact of adopting this statement.
RECLASSIFICATIONS
Certain items on the prior year financial statements have been reclassified to
conform to current year presentation.
F-II- 9
<PAGE> 84
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
2. INVESTMENTS
Investment income summarized by type of investment was as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------
1999 1998 1997
------- ------- ------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $ 9,644 $ 9,099 $6,622
Equity Securities available for sale........................ 159 179 156
Mortgage loans on real estate............................... 34 -- --
Loans on insurance policies................................. 845 590 370
Cash equivalents............................................ 681 659 642
Other invested assets....................................... 2,830 3,732 631
------- ------- ------
Gross investment income................................... 14,193 14,259 8,421
Investment expenses......................................... 223 207 144
------- ------- ------
Net investment income..................................... $13,970 $14,052 $8,277
======= ======= ======
</TABLE>
Net pretax realized investment gains (losses) were as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
----------------------------
1999 1998 1997
------- ---- ----
<S> <C> <C> <C>
Net gains (losses) on disposals of fixed maturity securities
available for sale (note 4)............................... $(1,786) $131 $365
Net gains (losses) on disposal of equity securities
available for sale........................................ -- (52) $ 3
------- ---- ----
Net gains (losses) on disposal of securities available for
sale...................................................... $(1,786) $ 79 $368
======= ==== ====
</TABLE>
Proceeds from sales of securities available for sale and gross gains and losses
realized on those sales were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999
----------------------------------
PROCEEDS GAINS LOSSES
-------- ----- ------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $7,762 $6 $80
====== == ===
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
--------------------------------
PROCEEDS GAINS LOSSES
-------- ----- ------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $22,282 $242 $301
Equity securities available for sale........................ 1,979 -- 52
------- ---- ----
Total securities available for sale....................... $24,261 $242 $353
======= ==== ====
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
--------------------------------
PROCEEDS GAINS LOSSES
-------- ----- ------
<S> <C> <C> <C>
Fixed maturity securities available for sale................ $16,419 $161 $8
Equity securities available for sale........................ 252 2 --
------- ---- --
Total securities available for sale....................... $16,671 $163 $8
======= ==== ==
</TABLE>
F-II- 10
<PAGE> 85
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
2. INVESTMENTS -- (CONTINUED)
The amortized cost and fair value of investments in securities by type of
investment were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-------------------------------------------------
GROSS UNREALIZED
AMORTIZED ------------------ FAIR
COST GAINS LOSSES VALUE
--------- ----- ------ --------
<S> <C> <C> <C> <C>
U.S. Corporate.................................... $ 85,653 $35 $3,388 $ 82,300
Mortgage-backed................................... 34,929 12 1,422 33,519
U.S. Treasury securities and obligations of U.S.
government agencies............................. 8,985 40 110 8,915
-------- --- ------ --------
Total fixed maturity securities available for
sale......................................... 129,567 87 4,920 124,734
-------- --- ------ --------
Equity securities available for sale.............. 2,031 -- 326 1,705
-------- --- ------ --------
Total securities available for sale............. $131,598 $87 $5,246 $126,439
======== === ====== ========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED ------------------- FAIR
COST GAINS LOSSES VALUE
--------- ------ ------ --------
<S> <C> <C> <C> <C>
U.S. Corporate.................................... $ 98,658 $3,146 $159 $101,645
Mortgage-backed................................... 35,314 430 14 35,730
U.S. Treasury securities and obligations of U.S.
government agencies............................. 12,678 409 -- 13,087
-------- ------ ---- --------
Total fixed maturity securities available for
sale......................................... 146,650 3,985 173 150,462
-------- ------ ---- --------
Equity securities available for sale.............. 2,031 -- 11 2,020
-------- ------ ---- --------
Total securities available for sale............. $148,681 $3,985 $184 $152,482
======== ====== ==== ========
</TABLE>
The amortized cost and fair value of fixed maturity securities available for
sale by contractual maturity at December 31, 1999 are shown below. Expected
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
--------- --------
<S> <C> <C>
Due in one year or less..................................... $ 3,448 $ 3,453
Due after one year through five years....................... 43,868 42,513
Due after five years through ten years...................... 32,139 31,066
Due after ten years......................................... 15,183 14,183
Mortgage-backed securities.................................. 34,929 33,519
-------- --------
Total..................................................... $129,567 $124,734
======== ========
</TABLE>
The Company purchased exchange and privately traded options to support certain
equity index annuity policyowner liabilities. These derivatives, reflected as
other invested assets, were used to manage fluctuations in the equity market
risk granted to the policyowners of the equity index annuities. These
derivatives involved, to varying degrees, elements of credit risk and market
risk. The options value on the balance sheet reflected the risk of potential
loss to the entity. At December 31, 1998 the Company held options with terms
ranging from 1 to 7 years with a notional amount of $18,655, a cost of $7,096
and a fair value of $10,020. Due to the transfer of these assets as part of the
co-insurance agreement outlined in note 4, there were no options outstanding at
December 31, 1999.
F-II- 11
<PAGE> 86
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
3. INCOME TAXES
The items that give rise to deferred tax assets and liabilities relate to the
following:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31
-----------------
1999 1998
---- ----
<S> <C> <C>
Net unrealized investment gains on securities available for
sale...................................................... $ -- $ 1,365
Deferred policy acquisition costs........................... 45,802 36,031
Prepaid expenses............................................ 888 833
------- -------
Gross deferred tax liability................................ 46,690 38,229
------- -------
Future policy and contract benefits......................... 35,650 27,810
Net unrealized investment losses............................ 1,768 --
Capital loss carryforward................................... 515 --
Deferred future revenues.................................... 2,090 1,894
Other....................................................... 457 177
------- -------
Gross deferred tax asset.................................... 40,480 29,881
Less valuation allowance.................................... 515 --
------- -------
Total deferred tax asset after valuation allowance.......... 39,965 29,881
------- -------
Net deferred tax liability................................ $ 6,725 $ 8,348
======= =======
</TABLE>
The difference between the U.S. federal income tax rate and the tax provision
rate is summarized as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal statutory tax rate.................................. 35.0% 35.0% 35.0%
Other....................................................... 4.2 (6.7) 2.9
---- ---- ----
Effective tax rate........................................ 39.2% 28.3% 37.9%
==== ==== ====
</TABLE>
The Company has approximately $1.5 million of capital loss carryforward
available as of December 31, 1999. At December 31, 1999 the Company provided for
a valuation allowance against the deferred tax asset related to the capital loss
carryforward.
The Company's federal income tax returns have been examined by the Internal
Revenue Service (IRS) through 1995. The Company is currently appealing certain
adjustments proposed by the IRS for tax years 1993 through 1995. The IRS is
currently examining the Company's return for the tax period ending March 31,
1996. Management believes adequate provisions have been made for any additional
taxes which may become due with respect to the adjustments proposed by the IRS.
4. RELATED PARTY TRANSACTIONS
Affiliates provide technical, financial, legal, marketing and investment
advisory support to the Company under administrative service agreements. The
cost of these services to the Company for years ended December 31, 1999, 1998
and 1997 was $12,265, $11,737 and $12,082, respectively.
The Company entered into reinsurance agreements (yearly renewable term) with
affiliates. Under this agreement, these affiliates assume life insurance risk in
excess of the Company's retention limit. These reinsurance contracts do not
relieve the Company of its obligations to its policyowners. The Company paid
$4,419, $4,104 and $3,810 of reinsurance premiums, net of ceded allowances, to
affiliates for the years
F-II- 12
<PAGE> 87
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
4. RELATED PARTY TRANSACTIONS -- (CONTINUED)
ended December 31, 1999, 1998 and 1997, respectively. The Company has received
reinsurance recoveries from affiliates of $7,268, $3,310 and $2,260 for the
years ended December 31, 1999, 1998 and 1997, respectively.
Effective June 30, 1999 the Company agreed to 100% co-insure its equity index
annuity business to AmerUs in a non-cash transaction. Under the terms of the
agreement investments with a fair value of $57,648 and amortized cost of $59,390
were transferred to AmerUs. In return AmerUs co-insured the full liability for
this business resulting in a $59,561 reinsurance receivable from affiliate being
recorded. The Company also released the $1,815 of deferred policy acquisition
costs which it was carrying on this block. In December 1999, AmerUs through
assumption reinsurance assumed approximately 40% of this block, reducing the
reinsurance receivable -- affiliate to $35,921. This amount is secured by a
letter of credit.
The Company has entered into guarantee agreements with ALIC, AmerUs and AMAL
Corporation whereby, they guarantee the full, complete and absolute performance
of all duties and obligations of the Company.
The Company's variable life and annuity products are distributed through
Ameritas Investment Corp. (AIC), a wholly-owned subsidiary of AMAL Corporation.
The Company received $93 for the year ended December 31, 1997 from this
affiliate to partially defray the costs of materials and prospectuses. The
Company received no recovery to defray these cost for the years ended December
31, 1999 and 1998. Policies placed by this affiliate generated commission
expense of $35,736, $28,621 and $23,232 for the years ended December 31, 1999,
1998 and 1997, respectively.
Transactions with related parties are not necessarily indicative of revenues and
expenses which would have occurred had the parties not been related.
5. BENEFIT PLANS
The Company provides retirement and postretirement medical benefits to
qualifying employees. Prior to August 1, 1997 these benefits were provided under
plans which covered substantially all employees of Ameritas Life Insurance Corp.
and its subsidiaries. Concurrent with the transfer of a significant number of
employees to the Company, effective August 1, 1997, AMAL Corporation assumed the
benefit obligations associated with these plans.
The Company is included in a multiple employer noncontributory defined benefit
plan that covers substantially all full-time employees of Ameritas Life
Insurance Corp. and its subsidiaries and AMAL Corporation and its subsidiaries.
Pension costs include current service costs, which are accrued and funded on a
current basis, and post service costs, which are amortized over the average
remaining service life of all employees on the adoption date. Total Company
contributions for the years ended December 31, 1999, 1998 and 1997 were $159,
$163 and $29, 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. Total Company contributions for
the years ended December 31, 1999, 1998 and 1997 were $47, $47 and $24,
respectively.
The Company is also included in the postretirement benefit plan providing group
medical coverage to retired employees of AMAL Corporation and it's subsidiaries.
Prior to August 1, 1997 these benefits were provided under a plan with Ameritas
Life Insurance Corp. 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
F-II- 13
<PAGE> 88
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
5. BENEFIT PLANS -- (CONTINUED)
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.
Total Company contributions for the years ended December 31, 1999, 1998 and 1997
were $12, $12 and $5, respectively.
Expenses for the defined benefit plan and postretirement group medical plan are
allocated to the Company based on the number of associates in AMAL Corporation
and its subsidiaries.
6. INSURANCE REGULATORY MATTERS
Net income (loss), as determined in accordance with statutory accounting
practices, was ($4,513), $319, and $2,048 for 1999, 1998 and 1997, respectively.
The Company's statutory surplus was $41,637, $44,589 and $45,265 at December 31,
1999, 1998 and 1997, respectively. The Company is required to maintain a certain
level of surplus to be in compliance with state laws and regulations. Company
surplus is monitored by state regulators to ensure compliance with risk based
capital requirements. 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.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures are made regarding fair value information about
certain financial instruments for which it is practicable to estimate that
value. In cases where quoted market prices are not available, fair values are
based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the derived
fair value estimates, in many cases, may not be realized in immediate settlement
of the instrument. All nonfinancial instruments are excluded from disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Company.
The fair value estimates presented herein are based on pertinent information
available to management as of December 31, 1999 and 1998. Although management is
not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date; therefore, current estimates of
fair value may differ significantly from the amounts presented herein.
The following methods and assumptions were used by the Company in estimating its
fair value disclosures for each class of financial instrument for which it is
practicable to estimate a value:
FIXED MATURITY SECURITIES AVAILABLE FOR SALE -- For publicly traded
securities, fair value is determined using an independent pricing source.
For securities without a readily ascertainable fair value, the value has
been determined using an interest rate spread matrix based upon quality,
weighted average maturity and Treasury yields.
EQUITY SECURITIES AVAILABLE FOR SALE -- Fair value is determined using
an independent pricing source.
MORTGAGE LOANS ON REAL ESTATE -- Mortgage loans in good standing are
valued on the basis of discounted cash flow. The interest rate that is
assumed is based upon the weighted average term of the mortgage and
appropriate spread over Treasuries. There were no mortgage loans in default
at December 31, 1999.
F-II- 14
<PAGE> 89
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
7. FAIR VALUE OF FINANCIAL INSTRUMENTS -- (CONTINUED)
LOANS ON INSURANCE POLICIES -- Fair values for loans on insurance
policies are estimated using a discounted cash flow analysis at interest
rates currently offered for similar loans with similar remaining terms.
Loans on insurance policies with similar characteristics are aggregated for
purposes of the calculations.
OTHER INVESTED ASSETS -- Fair value is determined using an independent
pricing source.
CASH AND CASH EQUIVALENTS, ACCRUED INVESTMENT INCOME AND REINSURANCE
RECOVERABLE -- The carrying amounts equal fair value.
ACCUMULATED CONTRACT VALUES -- Funds on deposit which do not have
fixed maturities are carried at the amount payable on demand at the
reporting date, which approximates fair value.
Estimated fair values are as follows:
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------------------------
1999 1998
-------------------- --------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Financial assets:
Fixed maturity securities, available for sale..... $124,734 $124,734 $150,462 $150,462
Equity securities, available for sale............. 1,705 1,705 2,020 2,020
Mortgage loans on real estate..................... 1,392 1,369 -- --
Loans on insurance policies....................... 16,499 14,557 10,949 10,286
Other invested assets............................. -- -- 10,020 10,020
Cash and cash equivalents......................... 11,970 11,970 12,011 12,011
Accrued investment income......................... 2,442 2,442 2,425 2,425
Reinsurance receivable -- affiliate............... 35,921 35,921 -- --
Reinsurance recoverable -- affiliates............. 153 153 455 455
Financial liabilities:
Accumulated contract values excluding amounts held
under insurance contracts...................... 184,376 184,376 199,585 199,585
</TABLE>
8. 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:
<TABLE>
<CAPTION>
DECEMBER 31
------------------------
1999 1998
---------- ----------
<S> <C> <C>
Separate Account V.......................................... $ 402,722 $ 282,653
Separate Account VA-2....................................... 1,991,723 1,426,795
---------- ----------
$2,394,445 $1,709,448
========== ==========
</TABLE>
F-II- 15
<PAGE> 90
AMERITAS VARIABLE LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 -- (CONTINUED)
(IN THOUSANDS)
8. SEPARATE ACCOUNTS -- (CONTINUED)
During 1999 the Company formed a variable insurance trust (VIT). AIC serves as
the investment advisor and another affiliate provides administrative services to
the VIT. AIC received advisory fees of $702 for the year ended December 31,
1999. At December 31, 1999 separate account assets under the VIT totaled
$1,066,249.
F-II- 16
<PAGE> 91
APPENDIX A
ILLUSTRATIONS OF DEATH BENEFITS AND VALUES
The following tables illustrate how the values and Death Benefits of a Policy
may change with the investment experience of the Fund. The tables show how the
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 A-3 through A-6 illustrate a Policy issued to a
male, age 45, under a preferred rate non-tobacco underwriting risk
classification. A standard tobacco use and non-tobacco use, and preferred
non-tobacco classification and different rates for certain specified amounts.
The 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 values for uniform
hypothetical rates of return shown in these tables. The tables on pages A-3 and
A-5 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, without smoker distinction.
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 premium charges and other expense deductions. The
Death Benefits and values shown in the tables on pages A-4 and A-6 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. After the tenth Policy Year, the maximum values may be less than
illustrated in those states which require the per $1000 components of the
Administrative Expense Charge to continue for the life of the Policy.
The amounts shown for the Death Benefits, Net Cash 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 at an equivalent annual rate of 0.91%
(which is in excess of the current equivalent annual rate of 0.95% of the
aggregate average daily net assets of the Funds) 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 0.90% for Policy
Years 1-15 and 0.45% thereafter on pages A-3 and A-5 and at an annual rate of
1.10% for Policy Years 1-15 and 0.65% thereafter on pages A-4 and A-6 of the
average net assets of the Subaccounts). The Investment Advisor or other
affiliates of 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 average daily net assets of
0.28% for Ameritas Money Market; 0.30% for Ameritas Index 500; 0.81% for
Ameritas Growth; 0.70% for Ameritas Income & Growth; 0.92% for Ameritas Small
Capitalization; 0.86% for Ameritas MidCap Growth; 0.87% for Ameritas Emerging
Growth; 0.88% for Ameritas Research; 0.90% for Ameritas Growth With Income;
1.27% for UIF Asian Equity; 1.15% for UIF Global Equity; 1.16% for UIF
International Magnum; and 1.10% for UIF U.S. Real Estate Portfolios. MFS Co. has
agreed to bear expenses for the Global Governments Series and New Discovery
Series, subject to reimbursement by the series, such that each series "Other
Expenses" shall not exceed 0.15% 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 -1.85%, 4.15%, and 10.15% respectively, for Policy Years
1-15 and -1.40%, 4.60%, and 10.60% for the Policy Years thereafter respectively,
on pages A-3
CORPORATE BENEFIT VUL
A-1
<PAGE> 92
and A-5 and -2.05%, 3.95%, and 9.95% respectively, for years 1-15, and -1.60%,
4.40%, and 10.40% thereafter on pages A-4 and A-6.
The hypothetical values shown in the tables do not reflect any charges for
federal income tax burden attributable to Separate Account V, 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 Accumulation Values
illustrated. (See the section on Federal Tax Matters.)
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 Separate Account V, and if no Policy loans
have been made. The tables are also based on the assumptions that the Policy
Owner 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 illustrations based upon the
proposed Insured's age, gender and risk class, the Specified Amount, the Death
Benefit option, and planned periodic premium schedule requested, and any
available riders requested. These illustrations may be provided to you in
printed form by your registered representative. AVLIC may also make these
illustrations available to you by electronic means, such as through our website.
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.
CORPORATE BENEFIT VUL
A-2
<PAGE> 93
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
VARIABLE UNIVERSAL LIFE INSURANCE
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A
USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.85% NET) (4.15% NET) (10.15% NET)
ACCUMULATED ------------------------------- ------------------------------- ---------------------------------
END OF PREMIUMS AT ACCUMU- NET CASH ACCUMU- NET CASH ACCUMU- NET 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 5,775 3,736 3,901 250,000 4,008 4,173 250,000 4,280 4,445 250,000
2 11,839 7,446 7,528 250,000 8,227 8,309 250,000 9,043 9,125 250,000
3 18,206 11,031 11,031 250,000 12,567 12,567 250,000 14,235 14,235 250,000
4 24,891 14,492 14,492 250,000 17,030 17,030 250,000 19,901 19,901 250,000
5 31,911 17,823 17,823 250,000 21,617 21,617 250,000 26,086 26,086 250,000
6 39,281 21,023 21,023 250,000 26,330 26,330 250,000 32,844 32,844 250,000
7 47,020 24,084 24,084 250,000 31,168 31,168 250,000 40,228 40,228 250,000
8 55,146 26,999 26,999 250,000 36,127 36,127 250,000 48,302 48,302 250,000
9 63,678 29,757 29,757 250,000 41,206 41,206 250,000 57,134 57,134 250,000
10 72,637 32,349 32,349 250,000 46,399 46,399 250,000 66,803 66,803 250,000
11 82,044 35,407 35,407 250,000 52,361 52,361 250,000 78,063 78,063 250,000
12 91,921 38,394 38,394 250,000 58,582 58,582 250,000 90,525 90,525 250,000
13 102,292 41,323 41,323 250,000 65,085 65,085 250,000 104,334 104,334 250,000
14 113,182 44,205 44,205 250,000 71,895 71,895 250,000 119,647 119,647 250,000
15 124,616 47,047 47,047 250,000 79,035 79,035 250,000 136,636 136,636 250,000
16 136,622 50,086 50,086 250,000 86,901 86,901 250,000 156,127 156,127 250,000
17 149,228 53,107 53,107 250,000 95,193 95,193 250,000 177,847 177,847 250,000
18 162,465 56,121 56,121 250,000 103,942 103,942 250,000 202,054 202,054 254,588
19 176,363 59,140 59,140 250,000 113,180 113,180 250,000 228,887 228,887 283,820
20 190,956 62,185 62,185 250,000 122,948 122,948 250,000 258,565 258,565 315,449
25 275,624 76,291 76,291 250,000 179,811 179,811 250,000 460,663 460,663 534,369
30 383,684 86,114 86,114 250,000 252,810 252,810 270,507 793,118 793,118 848,636
35 521,600 90,096 90,096 250,000 345,091 345,091 362,345 1,342,150 1,342,150 1,409,258
</TABLE>
- ---------------
1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.
2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender 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 NET CASH
SURRENDER 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.
CORPORATE BENEFIT VUL
A- 3
<PAGE> 94
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
VARIABLE UNIVERSAL LIFE INSURANCE
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $5,500
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: A
USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-2.05% NET) (3.95% NET) (9.95% NET)
ACCUMULATED ------------------------------- ------------------------------- ---------------------------------
END OF PREMIUMS AT ACCUMU- NET CASH ACCUMU- NET CASH ACCUMU- NET 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 5,775 3,727 3,892 250,000 3,999 4,164 250,000 4,271 4,436 250,000
2 11,839 6,918 7,001 250,000 7,679 7,762 250,000 8,475 8,558 250,000
3 18,206 9,965 9,965 250,000 11,427 11,427 250,000 13,021 13,021 250,000
4 24,891 12,867 12,867 250,000 15,244 15,244 250,000 17,944 17,944 250,000
5 31,911 15,617 15,617 250,000 19,123 19,123 250,000 23,275 23,275 250,000
6 39,281 18,215 18,215 250,000 23,066 23,066 250,000 29,056 29,056 250,000
7 47,020 20,643 20,643 250,000 27,057 27,057 250,000 35,322 35,322 250,000
8 55,146 22,891 22,891 250,000 31,090 31,090 250,000 42,117 42,117 250,000
9 63,678 24,945 24,945 250,000 35,152 35,152 250,000 49,488 49,488 250,000
10 72,637 26,789 26,789 250,000 39,228 39,228 250,000 57,489 57,489 250,000
11 82,044 28,951 28,951 250,000 43,868 43,868 250,000 66,765 66,765 250,000
12 91,921 30,878 30,878 250,000 48,539 48,539 250,000 76,888 76,888 250,000
13 102,292 32,567 32,567 250,000 53,244 53,244 250,000 87,967 87,967 250,000
14 113,182 34,009 34,009 250,000 57,980 57,980 250,000 100,122 100,122 250,000
15 124,616 35,192 35,192 250,000 62,744 62,744 250,000 113,494 113,494 250,000
16 136,622 36,268 36,268 250,000 67,826 67,826 250,000 128,773 128,773 250,000
17 149,228 37,037 37,037 250,000 72,953 72,953 250,000 145,743 145,743 250,000
18 162,465 37,463 37,463 250,000 78,108 78,108 250,000 164,647 164,647 250,000
19 176,363 37,499 37,499 250,000 83,274 83,274 250,000 185,777 185,777 250,000
20 190,956 37,100 37,100 250,000 88,436 88,436 250,000 209,479 209,479 255,565
25 275,624 26,957 26,957 250,000 114,044 114,044 250,000 368,436 368,436 427,385
30 383,684 * * * 138,405 138,405 250,000 623,454 623,454 667,096
35 521,600 * * * 158,881 158,881 250,000 1,038,189 1,038,189 1,090,099
</TABLE>
- ---------------
* In the absence of an additional premium the policy would lapse.
1) Assumes an annual $5,500 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.
2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender 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 NET CASH
SURRENDER 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.
CORPORATE BENEFIT VUL
A- 4
<PAGE> 95
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
VARIABLE UNIVERSAL LIFE INSURANCE
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B
USING CURRENT COST OF INSURANCE AND EXPENSE CHARGES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-1.85% NET) (4.15% NET) (10.15% NET)
ACCUMULATED ----------------------------- ------------------------------- ---------------------------------
END OF PREMIUMS AT ACCUMU- NET CASH ACCUMU- NET CASH ACCUMU- NET 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 14,490 11,624 12,038 261,624 12,377 12,791 262,377 13,132 13,546 263,132
2 29,705 23,061 23,268 273,061 25,298 25,505 275,298 27,627 27,834 277,627
3 45,680 34,215 34,215 284,215 38,681 38,681 288,681 43,517 43,517 293,517
4 62,454 45,086 45,086 295,086 52,540 52,540 302,540 60,939 60,939 310,939
5 80,066 55,671 55,671 305,671 66,886 66,886 316,886 80,037 80,037 330,037
6 98,560 65,968 65,968 315,968 81,733 81,733 331,733 100,978 100,978 350,978
7 117,978 75,969 75,969 325,969 97,087 97,087 347,087 123,931 123,931 373,931
8 138,367 85,666 85,666 335,666 112,956 112,956 362,956 149,088 149,088 399,088
9 159,775 95,049 95,049 345,049 129,344 129,344 379,344 176,655 176,655 426,655
10 182,254 104,106 104,106 354,106 146,254 146,254 396,254 206,858 206,858 456,858
11 205,856 113,483 113,483 363,483 164,371 164,371 414,371 240,647 240,647 490,647
12 230,639 122,645 122,645 372,645 183,197 183,197 433,197 277,821 277,821 527,821
13 256,661 131,608 131,608 381,608 202,773 202,773 452,773 318,738 318,738 568,738
14 283,984 140,388 140,388 390,388 223,145 223,145 473,145 363,791 363,791 613,791
15 312,673 148,995 148,995 398,995 244,353 244,353 494,353 413,408 413,408 663,408
16 342,797 158,165 158,165 408,165 267,591 267,591 517,591 469,972 469,972 719,972
17 374,427 167,210 167,210 417,210 291,901 291,901 541,901 532,536 532,536 782,536
18 407,638 176,145 176,145 426,145 317,348 317,348 567,348 601,752 601,752 851,752
19 442,510 184,987 184,987 434,987 343,999 343,999 593,999 678,340 678,340 928,340
20 479,126 193,767 193,767 443,767 371,940 371,940 621,940 763,114 763,114 1,013,114
25 691,566 234,713 234,713 484,713 530,950 530,950 780,950 1,341,180 1,341,180 1,591,180
30 962,699 267,159 267,159 517,159 723,516 723,516 973,516 2,290,483 2,290,483 2,540,483
35 1,308,741 288,576 288,576 538,576 954,586 954,586 1,204,586 3,850,466 3,850,466 4,100,466
</TABLE>
- ---------------
1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.
2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender 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 NET CASH
SURRENDER 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.
CORPORATE BENEFIT VUL
A- 5
<PAGE> 96
ILLUSTRATION OF POLICY VALUES
AMERITAS VARIABLE LIFE INSURANCE COMPANY
VARIABLE UNIVERSAL LIFE INSURANCE
Male Issue Age: 45 Nontobacco Preferred Underwriting Class
PLANNED PERIODIC ANNUAL PREMIUM: $13,800
INITIAL SPECIFIED AMOUNT: $250,000
DEATH BENEFIT OPTION: B
USING MAXIMUM COST OF INSURANCE AND EXPENSE CHARGES
<TABLE>
<CAPTION>
0% HYPOTHETICAL GROSS 6% HYPOTHETICAL GROSS 12% HYPOTHETICAL GROSS
ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN ANNUAL INVESTMENT RETURN
(-2.05% NET) (3.95% NET) (9.95% NET)
ACCUMULATED ----------------------------- ----------------------------- ---------------------------------
END OF PREMIUMS AT ACCUMU- NET CASH ACCUMU- NET CASH ACCUMU- NET 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 14,490 11,599 12,013 261,599 12,352 12,766 262,352 13,107 13,521 263,107
2 29,705 22,313 22,520 272,313 24,517 24,724 274,517 26,814 27,021 276,814
3 45,680 32,710 32,710 282,710 37,061 37,061 287,061 41,780 41,780 291,780
4 62,454 42,790 42,790 292,790 49,994 49,994 299,994 58,125 58,125 308,125
5 80,066 52,548 52,548 302,548 63,318 63,318 313,318 75,974 75,974 325,974
6 98,560 61,982 61,982 311,982 77,042 77,042 327,042 95,467 95,467 345,467
7 117,978 71,079 71,079 321,079 91,157 91,157 341,157 116,747 116,747 366,747
8 138,367 79,826 79,826 329,826 105,663 105,663 355,663 139,970 139,970 389,970
9 159,775 88,210 88,210 338,210 120,552 120,552 370,552 165,309 165,309 415,309
10 182,254 96,212 96,212 346,212 135,813 135,813 385,813 192,947 192,947 442,947
11 205,856 104,361 104,361 354,361 151,998 151,998 401,998 223,666 223,666 473,666
12 230,639 112,099 112,099 362,099 168,570 168,570 418,570 257,184 257,184 507,184
13 256,661 119,425 119,425 369,425 185,536 185,536 435,536 293,768 293,768 543,768
14 283,984 126,331 126,331 376,331 202,894 202,894 452,894 333,706 333,706 583,706
15 312,673 132,805 132,805 382,805 220,638 220,638 470,638 377,311 377,311 627,311
16 342,797 139,470 139,470 389,470 239,794 239,794 489,794 426,662 426,662 676,662
17 374,427 145,669 145,669 395,669 259,421 259,421 509,421 480,765 480,765 730,765
18 407,638 151,362 151,362 401,362 279,494 279,494 529,494 540,067 540,067 790,067
19 442,510 156,503 156,503 406,503 299,975 299,975 549,975 605,051 605,051 855,051
20 479,126 161,049 161,049 411,049 320,830 320,830 570,830 676,254 676,254 926,254
25 691,566 173,685 173,685 423,685 429,679 429,679 679,679 1,148,979 1,148,979 1,398,979
30 962,699 164,195 164,195 414,195 540,525 540,525 790,525 1,897,125 1,897,125 2,147,125
35 1,308,741 120,581 120,581 370,581 638,057 638,057 888,057 3,079,749 3,079,749 3,329,749
</TABLE>
- ---------------
1) Assumes an annual $13,800 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.
2) Assumes that no policy loan has been made. Excessive loans or partial
withdrawals may cause this policy to lapse because of insufficient net cash
surrender 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 NET CASH
SURRENDER 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.
CORPORATE BENEFIT VUL
A- 6
<PAGE> 97
APPENDIX B
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
EMPLOYEE BENEFIT PLAN
INFORMATION STATEMENT
The purpose of this statement is to inform you as an independent Fiduciary of
the Employee Benefit Plan, of the Sales Representative's relationship to and
compensation from Ameritas Variable Life Insurance Company (AVLIC), as well as
to describe certain fees and charges under the Corporate Benefit VUL Policy
being purchased from the Sales Representative.
The Sales Representative is appointed with AVLIC as its Sales Representative and
is a Securities Registered Representative. In this position, the Sales
Representative is employed to procure and submit to AVLIC applications for
contracts, including applications for Corporate Benefit VUL.
COMMISSIONS, FEES AND CHARGES
The following commissions, fees and charges apply to Corporate Benefit VUL
(Policy):
SALES COMMISSION: AVLIC pays commission to the broker-dealers, which in turn pay
commissions to the registered representative who sells this Policy. The
commission may equal an amount up to 30% of premium in the first Policy Year and
up to 12% of premium in renewal years. Broker-dealers may also receive a service
fee up to an annualized rate of .50% of the Accumulation Value beginning in the
sixth 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. From time to
time, additional sales incentives may be provided to broker-dealers.
COST OF INSURANCE: A monthly charge for the Policy and any riders. The Cost of
Insurance Rates are shown on the Policy Schedule.
MONTHLY PER POLICY CHARGE: AVLIC will make a per Policy charge of $15.00 per
month (maximum $15.00) during the first Policy Year and $7.00 per month (maximum
$12.00) thereafter. This charge is guaranteed not to increase above the maximum.
MONTHLY PER $1000 CHARGE FOR ADMINISTRATIVE EXPENSES: The first ten Policy
Years, there is a monthly charge per $1000 of initial Specified Amount. In
addition, there is a monthly charge per $1000 of each increase in Specified
Amount for ten years from the date of increase. The per $1000 rates for both the
initial Specified Amount and each increase vary by Issue Age, gender, and risk
class. (See the Policy Schedule for rates.)
DAILY ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE: AVLIC makes a daily charge of
the value of the average daily net assets of the Account under the policies
equal to an annual rate of 0.15% (maximum 0.15%). This charge is subtracted when
determining the daily accumulation unit value. This charge is guaranteed not to
increase above the maximum and is designed to reimburse AVLIC for administrative
expenses of issuing, servicing and maintaining the policies. AVLIC does not
expect to make a profit on this fee.
MORTALITY AND EXPENSE RISK CHARGE: AVLIC imposes a charge to compensate it for
bearing certain mortality and expense risks under the policies. AVLIC makes a
daily charge of the value of the average daily net assets of the Account under
the policies equal to an annual rate of 0.75% (maximum 0.95%) in Policy Years
1-15 and 0.30% (maximum 0.50%) thereafter. This charge is subtracted when
determining the daily accumulation unit value. AVLIC guarantees that this charge
will never increase above the maximum. If this charge is insufficient to cover
assumed risks, the loss will fall on AVLIC. Conversely, if
CORPORATE BENEFIT VUL
B- 1
<PAGE> 98
the charge proves more than sufficient, any excess will be added to AVLIC's
surplus. No mortality and expense risk charge is imposed on the Fixed Account.
PARTIAL AND FULL WITHDRAWALS: Partial withdrawals may be made, subject to
certain restrictions. The Death Benefit will be reduced by the amount of the
partial withdrawal. A partial withdrawal is subject to a maximum charge not to
exceed the lesser of $50 or 2% of the amount withdrawn (currently, the partial
withdrawal charge is the lesser of $25 or 2%). You may Surrender the Policy at
any time for its Net Cash Surrender Value. There is no surrender charge.
PERCENT OF PREMIUM CHARGE: AVLIC will deduct a percent of premium charge upon
receipt of a premium payment. Currently, this charge is 3.0% of the premium paid
(maximum 5.0%).
FUND INVESTMENT ADVISORY FEES AND EXPENSES: At the direction of the Policy
Owner, Separate Account V purchases shares of Funds which are available for
investment under this Policy. The net assets of Separate Account V will reflect
the value of the Fund shares and therefore, investment advisory fees and other
expenses of the Funds. A complete description of these fees and expenses is
contained in the Funds' prospectuses.
CORPORATE BENEFIT VUL
B- 2
<PAGE> 99
INCORPORATION BY REFERENCE
The Registrant, Separate Account V, purchases or will purchase units from the
portfolios of these Funds at the direction of its Policy Owners. 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:
Calvert Variable Series, Inc.
Registration No. 2-80154
Variable Insurance Products Fund
Registration No. 2-75010
Variable Insurance Products Fund II
Registration No. 33-20773
The Alger American Fund
Registration No. 33-21722
MFS Variable Insurance Trust
Registration No. 333-74668
Morgan Stanley Dean Witter Universal Funds, Inc.
Registration No. 333-3013
<PAGE> 100
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 Variable Life Insurance Company represents that the fees and charges
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 of whether such indemnification by it is against
public policy as expressed in the Act and wil be governed by the final
adjudication of such issue.
REPRESENTATION 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> 101
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 95 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484.
Representations pursuant to Rule 6e-3(T).
The signatures.
Written consents of the following:
(a) Russell J. Wiltgen
(b) Donald R. Stading
(c) Deloitte & Touche LLP
The Following Exhibits:
1. The following exhibits correspond to those required by paragraph A of the
instructions as to exhibits in Form N-8B- 2.
(1) Resolution of the Board of Directors of AVLIC Authorizing
Establishment of the Account.*
(2) Not applicable.
(3) (a) Principal Underwriting Agreement.*
(b) Proposed Form of Selling Agreement.*
(c) Commission Schedule.
(4) Not Applicable.
(5) (a) Policy.
(b) Policy Riders.
(6) (a) Articles of incorporation of Ameritas Variable Life Insurance
Company.**
(b) Bylaws of Ameritas Variable Life Insurance Company.***
(7) Not applicable.
(8) (a) Participation Agreement in the Calvert Variable Series, Inc.****
(b) Participation Agreement in the Variable Insurance Products
Fund.
(c) Participation Agreement in the Variable Insurance Products
Fund II.**
(d) Participation Agreement in the Alger American Fund.**
(e) Participation Agreement in the MFS Variable Insurance Trust.*
(f) Participation Agreement in the Morgan Stanley Universal Funds,
Inc.*
(9) Not Applicable.
(10) Application for Policy.
(11) Code of Ethics*****
2. (a)(b) Opinion and Consent of Donald R. Stading, Secretary and General
Counsel
3. No financial statements will be omitted from the final Prospectus pursuant
to Instruction 1(b) or (c) or Part I.
4. Not applicable.
5. Not applicable.
6. (a)(b) Opinion and Consent of Russell J. Wiltgen.
7. Consent of Deloitte & Touche LLP.
8. 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, filed November 5, 1996.
** Incorporated by reference to the Pre-Effective Amendment to the
Registration Statement for Ameritas Variable Life Insurance Company
Separate Account V, File No. 333-15585, filed January 17, 1997.
*** Incorporated by Reference to Pre-Effective Amendment No. 1 to the
Registration Statement for Ameritas Variable Life Insurance Company
Separate Account VA-2, File No. 333-36507, filed February 20, 1998.
**** Incorporated by reference to Post-Effective Amendment No. 5 to the
Registration Statement for Ameritas Variable Life Insurance Company
Separate Account V, File No. 333-15585, filed August 30, 1999.
***** Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement for Ameritas Variable Life Insurance Company
Separate Account V, File No. 333-15585, filed February 29, 2000.
<PAGE> 102
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 Pre-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned thereunto authorized in the City of
Lincoln, County of Lancaster, State of Nebraska on this 31st day of March, 2000.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V, Registrant
AMERITAS VARIABLE LIFE INSURANCE COMPANY, Depositor
Attest: /s/ Donald R. Stading By: /s/ Lawrence J. Arth
-------------------------------- --------------------------------
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 Principal Officers of Ameritas
Variable Life Insurance Company on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Lawrence J. Arth
- -------------------------- Director, Chairman of the Board March 31, 2000
Lawrence J. Arth and Chief Executive Officer
/s/ William J. Atherton
- -------------------------- Director, President and March 31, 2000
William J. Atherton Chief Operating Officer
/s/ Kenneth C. Louis
- -------------------------- Director, Executive Vice President March 31, 2000
Kenneth C. Louis
/s/ Gary R. McPhail
- -------------------------- Director, Executive Vice President March 31, 2000
Gary R. McPhail
/s/ Thomas C. Godlasky
- -------------------------- Director, Senior Vice President March 31, 2000
Thomas C. Godlasky and Chief Investment Officer
/s/ JoAnn M. Martin
- -------------------------- Director, Vice President and March 31, 2000
JoAnn M. Martin Chief Financial Officer
</TABLE>
<PAGE> 103
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Michael G. Fraizer
- --------------------------- Director March 31, 2000
Michael G. Fraizer
/s/ Robert C. Barth
- --------------------------- Controller March 31, 2000
Robert C. Barth
/s/ William W. Lester
- --------------------------- Treasurer March 31, 2000
William W. Lester
/s/ Donald R. Stading
- --------------------------- Secretary and General Counsel March 31, 2000
Donald R. Stading
</TABLE>
<PAGE> 104
EXHIBIT INDEX
EXHIBIT
- -------
1. (3)(c) Commission Schedule
1. (5)(a) Policy
1. (5)(b) Policy Riders
1. (8)(c) Participation Agreement in the Variable Insurance
Products Fund
1. (10) Application for Policy
2. (a)(b) Opinion and Consent of Donald R. Stading
6. (a)(b) Opinion and Consent of Russell J. Wiltgen
7. Consent of Deloitte & Touche LLP
<PAGE> 1
AVLIC - CORPORATE BENEFIT VUL (Registration No. 333-95163)
EXHIBIT 1. (3) (C)
COMMISSION SCHEDULE
Broker/Dealer, for its efforts in soliciting sales of the policy described as
Policy Form #4020 (Variable Universal Life), shall receive commission as stated
below:
<TABLE>
<CAPTION>
Policy Year Premiums up to First Premiums above First Premiums in Excess of Annual Service Fee *
Target Premium Target Premium but Second Target (Paid Quarterly on
below Second Target Premium Accumulation Value)
Premium
<S> <C> <C> <C> <C>
1 29% 3% 0.5% 0%
2-5 10% 3% 0.5% 0%
6-15 0% 0% 0% .25%
16+ 0% 0% 0% .15%
</TABLE>
*Writing Representative only
The annual service fee is based on the policy accumulation value, unimpaired by
reduced rate loans, at that time.
<PAGE> 1
EXHIBIT 1.(5)(a)
Policy
INSURED FIELD(1)
POLICY NUMBER FIELD(3)
POLICY TYPE FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE
Flexible Premium Variable Life Insurance Policy.
Death benefit proceeds payable at death of Insured.
Flexible premiums payable during lifetime of Insured.
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/ William J. Atherton /s/ Donald R. Stading
----------------------------- ---------------------------------
William J. Atherton Donald R. Stading
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 P.O. Box 82550, Lincoln,
Nebraska 68501-2550, for a refund within (a) ten (10) days from the date of
delivery of the policy, (b) ten (10) days after mailing or delivery of a
cancellation notice, or (c) forty-five (45) 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 less partial
withdrawals.
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]
FORM 4020
<PAGE> 2
POLICY SCHEDULE
INSURED: John D Specimen POLICY NUMBER: 2109004020
INITIAL SPECIFIED POLICY DATE: July 1, 2000
AMOUNT OF INSURANCE: $500,000
*PLANNED ANNUAL
ISSUE AGE - GENDER: 35 Male PERIODIC PREMIUM: $20,020.00
OWNER: John D Specimen
INITIAL DEATH BENEFIT OPTION: B
MINIMUM INITIAL PREMIUM $1,225.00
RATING CLASS: REGULAR ISSUE, PREFERRED, NO TOBACCO USE
LOANS:
The maximum loan interest rate is 6.0%. The interest credited on any
loaned part of the values will be no less than 3.5%.
MODES OF PAYMENT FOR PLANNED PERIODIC PREMIUMS:
Annual Semi-Annual Quarterly Monthly
$20,020.00 $10,010.00 $5,005.00 $1,668.33
* This reflects the planned premium and mode you selected at issue. For
further information, see policy Section 3. PREMIUM PAYMENTS.
4020 1-PS
<PAGE> 3
SCHEDULE OF BENEFITS
INSURED: John D Specimen POLICY NUMBER: 2109004020
INITIAL
SPECIFIED AMOUNT MATURITY OR
BENEFIT OF INSURANCE EXPIRATION DATE*
- ------- ------------ ----------------
Flexible Premium Variable Life $500,000 Death of Insured
Form 4020**
* NOTE: It is possible that coverage may not continue to the date of death
of the Insured if premium payments are not sufficient.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
4020 1.1-SB
<PAGE> 4
SCHEDULE OF BENEFITS
(Continued)
INSURED: John D Specimen POLICY NUMBER: 2109004020
INITIAL
SPECIFIED AMOUNT ANNUAL MATURITY OR
BENEFIT OF INSURANCE PREMIUM * EXPIRATION YEAR
- ------- ------------ -------- ---------------
(This page is used to show any riders that are a part of the policy)
* For any rider, this is the annual first year rider cost of insurance.
(NOTE: These amounts shown are not additional premiums due but are the
amounts deducted from the accumulation value.) See each rider for further
information.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
4020 1.2-SB
<PAGE> 5
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:
<TABLE>
<CAPTION>
INITIAL
ADVISOR/ ALLOCATION OF
SUBADVISOR FUND PORTFOLIO NET PREMIUMS
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fidelity Management Fidelity Funds Equity-Income: Service Class 0%
and Research Company Growth: Service Class 0%
High Income: Service Class 0%
Overseas: Service Class 0%
Asset Manager: Service Class 0%
Investment Grade Bond 0%
Asset Manager: Growth: Service Class 0%
Contrafund: Service Class 0%
- --------------------------------------------------------------------------------------------------------------------------
Calvert Asset CVS Social Balanced 0%
Management Small Cap Growth 0%
Company, Inc. Mid Cap Growth 0%
International Equity 0%
Ameritas Portfolios Ameritas Money Market 0%
- --------------------------------------------------------------------------------------------------------------------------
Alger Management Alger American Fund Balanced 0%
Leveraged AllCap 0%
Ameritas Portfolios Ameritas Growth 0%
Ameritas Income & Growth 50%
Ameritas Small Capitalization 0%
Ameritas MidCap Growth 0%
- --------------------------------------------------------------------------------------------------------------------------
MSDW Investment Universal Institutional Funds Emerging Markets Equity 0%
Management Global Equity 0%
International Magnum 0%
Asian Equity 0%
U.S. Real Estate 0%
- --------------------------------------------------------------------------------------------------------------------------
MFS Co. MFS Trust Utilities 0%
Global Governments 0%
New Discovery 50%
Ameritas Portfolios Ameritas Emerging Growth 0%
Ameritas Research 0%
Ameritas Growth With Income 0%
- --------------------------------------------------------------------------------------------------------------------------
State Street Ameritas Portfolios Ameritas Index 500 0%
Global Advisors
</TABLE>
Net premiums may also be allocated to the AVLIC Fixed Account.
INITIAL
ALLOCATION OF
NET PREMIUMS
AVLIC Fixed Account 0%
4020 1-LSP
<PAGE> 6
SCHEDULE OF MAXIMUM CHARGES
ADMINISTRATIVE EXPENSE CHARGE:
The administrative expense charge is made up of three charges.
Per Policy Expense Charge:
The maximum Per Policy Expense Charge is:
<TABLE>
<CAPTION>
In Policy Year Charge
-------------- ------
<S> <C>
Year 1 $180 annually ($15 per month)
Years 2+ $144 annually ($12 per month)
</TABLE>
Specified Amount Charge:
The annual Specified Amount Charge is $2.76 per $1000 of
Specified Amount for Policy Years 1-10 and $0.00 for
Policy Years 11 and later.
Increase Charge:
Refer to the Schedule of Administrative Expense Charges
for Increases.
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE:
The maximum asset-based administrative expense charge is 0.15% annually
(0.000409% daily).
MORTALITY AND EXPENSE RISK CHARGE:
The maximum mortality and expense risk charge is:
<TABLE>
<CAPTION>
In Policy Year Charge
-------------- ------
<S> <C>
Years 1-15 0.95% annually (0.002596% daily)
Years 16+ 0.50% annually (0.001366% daily)
</TABLE>
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.
4020 1-SMC
<PAGE> 7
SCHEDULE OF MAXIMUM ANNUAL
COST OF INSURANCE RATES*
INSURED: John D Specimen POLICY NUMBER: 2109004020
ISSUE AGE - GENDER: 35 Male POLICY DATE: July 1, 2000
<TABLE>
<CAPTION>
Policy Year Rate Per $1,000 Policy Year Rate Per $1,000
Beginning Of Amount Beginning Of Amount
July 1 At Risk July 1 At Risk
----------- --------------- ----------- ---------------
<S> <C> <C> <C>
2000 $1.77 2033 $33.19
2001 $2.24 2034 $36.17
2002 $2.40 2035 $39.51
2003 $2.58 2036 $43.30
2004 $2.79 2037 $47.65
2005 $3.02 2038 $52.64
2006 $3.29 2039 $58.19
2007 $3.56 2040 $64.19
2008 $3.87 2041 $70.53
2009 $4.19 2042 $77.12
2010 $4.55 2043 $83.90
2011 $4.92 2044 $91.05
2012 $5.32 2045 $98.84
2013 $5.74 2046 $107.48
2014 $6.21 2047 $117.25
2015 $6.71 2048 $128.26
2016 $7.30 2049 $140.25
2017 $7.96 2050 $152.95
2018 $8.71 2051 $166.09
2019 $9.56 2052 $179.55
2020 $10.47 2053 $193.27
2021 $11.46 2054 $207.29
2022 $12.49 2055 $221.77
2023 $13.59 2056 $236.98
2024 $14.77 2057 $253.45
2025 $16.08 2058 $272.11
2026 $17.54 2059 $295.90
2027 $19.19 2060 $329.96
2028 $21.06 2061 $384.55
2029 $23.14 2062 $480.20
2030 $25.42 2063 $657.98
2031 $27.85 2064 $1,000.00
2032 $30.44
</TABLE>
* The rates shown are annual rates per $1000 of amount at risk. 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 in these
schedule pages.
4020 1-COI
<PAGE> 8
SCHEDULE OF ADMINISTRATIVE EXPENSE CHARGES
FOR INCREASES
The additional administrative expense charge imposed under this policy for each
requested increase in specified amount will be based on the table shown below.
The additional administrative expense charge lasts for ten years from the time
of the increase. The rate per $1000 of increased specified amount is based on
the gender, tobacco usage and the attained age of the Insured at the time of the
increase. See Section 10.5 of this policy for further information.
<TABLE>
<CAPTION>
MALE RATES
- ------------------------------------------------------------------------------------------------------------------------------------
Attained Non-Tobacco Tobacco Attained Non-Tobacco Tobacco
Age Use Use Age Use Use
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
18 2.16 2.76 52 2.76 4.8
19 2.16 2.88 53 2.88 4.92
20 2.28 3 54 2.88 5.16
21 2.28 3.12 55 3 5.28
22 2.4 3.12 56 3.12 5.4
23 2.4 3.24 57 3.24 5.64
24 2.52 3.36 58 3.24 5.76
25 2.64 3.48 59 3.36 5.88
26 2.64 3.48 60 3.48 6.12
27 2.64 3.48 61 3.6 6.24
28 2.64 3.48 62 3.72 6.48
29 2.64 3.6 63 3.84 6.72
30 2.76 3.6 64 3.96 6.84
31 2.76 3.6 65 4.08 7.08
32 2.76 3.6 66 4.2 7.32
33 2.76 3.6 67 4.44 7.44
34 2.76 3.6 68 4.8 7.68
35 2.76 3.6 69 5.04 7.92
36 2.76 3.6 70 5.28 8.16
37 2.76 3.72 71 5.52 8.52
38 2.64 3.72 72 5.88 8.76
39 2.64 3.72 73 6.24 9
40 2.64 3.72 74 6.6 9.36
41 2.52 3.84 75 6.96 9.72
42 2.52 3.84 76 7.68 10.8
43 2.4 3.84 77 8.64 11.88
44 2.28 3.84 78 9.48 12.96
45 2.16 3.84 79 10.44 14.28
46 2.28 3.96 80 11.4 15.48
47 2.4 4.08 81 12.6 16.92
48 2.4 4.32 82 13.68 18.48
49 2.52 4.44 83 15 20.04
50 2.64 4.56 84 16.32 21.84
51 2.64 4.68 85 17.76 23.64
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
4020 1-SAECI
<PAGE> 9
This page left intentionally blank.
<PAGE> 10
TABLE OF CONTENTS
POLICY SCHEDULE PAGES
<TABLE>
<CAPTION>
SECTION 1. DEFINITIONS......................................................5
SECTION 2. GENERAL PROVISIONS...............................................7
<S> <C> <C>
2.1 Meaning of In Force.............................................7
2.2 When This Policy Terminates.....................................7
2.3 The Policy and its Parts........................................7
2.4 Representations and Contestability..............................7
2.5 Misstatement of Age or Gender...................................8
2.6 Suicide.........................................................8
2.7 The Owner.......................................................8
2.8 The Beneficiary.................................................8
2.9 Changing the Beneficiary........................................8
2.10 Assigning the Policy............................................9
2.11 Non-Participating...............................................9
SECTION 3. PREMIUM PAYMENTS................................................9
3.1 Minimum Initial Premium.........................................9
3.2 Planned Periodic Premiums.......................................9
3.3 Unscheduled Premiums............................................9
3.4 Premium Limits..................................................9
3.5 Where to Pay Premiums...........................................9
3.6 Net Premium....................................................10
3.7 Percent of Premium Charge......................................10
3.8 Allocation of Net Premiums.....................................10
SECTION 4. GRACE PERIOD AND REINSTATEMENT.................................10
4.1 Grace Period...................................................10
4.2 Continuation of Insurance......................................10
4.3 Reinstating the Policy.........................................11
SECTION 5. SEPARATE ACCOUNT...............................................11
5.1 The Account....................................................11
5.2 The Subaccounts................................................11
5.3 Valuation of Assets............................................12
5.4 Transfer Among Subaccounts.....................................12
5.5 The Funds......................................................12
5.6 Portfolio Changes..............................................12
SECTION 6. THE FIXED ACCOUNT..............................................13
6.1 The Fixed Account..............................................13
6.2 Transfers Among the Fixed Account
and the Subaccounts............................................13
</TABLE>
4020 3
<PAGE> 11
<TABLE>
<S> <C> <C>
SECTION 7. ACCUMULATION VALUE............................................13
7.1 How Accumulation Value of the Policy
is Determined.................................................13
7.2 Accumulation Value of the Subaccounts.........................14
7.3 Net Asset Value...............................................14
7.4 Subaccount Unit Value.........................................14
7.5 Accumulation Value of the Fixed Account.......................15
7.6 Interest Credits..............................................15
7.7 Administrative Expense Charge.................................16
7.8 Cost of Insurance.............................................16
7.9 Cost of Insurance Rates.......................................16
7.10 Monthly Deduction.............................................17
7.11 Annual Report.................................................17
7.12 Illustrative Reports..........................................17
SECTION 8. POLICY SURRENDER
AND PARTIAL WITHDRAWAL........................................17
8.1 Surrender of the Policy.......................................17
8.2 Net Cash Surrender Value......................................18
8.3 Partial Withdrawal............................................18
8.4 Postponement of Payments......................................18
SECTION 9. DEATH BENEFIT.................................................19
9.1 Death Benefit Proceeds........................................19
9.2 Interest on Proceeds..........................................19
9.3 Death Benefit.................................................19
9.4 Postponement of Payment.......................................20
SECTION 10. POLICY CHANGES................................................20
10.1 Change in Death Benefit Options...............................20
10.2 Change in the Specified Amount................................21
10.3 Decreasing the Specified Amount...............................21
10.4 Increasing the Specified Amount...............................21
10.5 Administrative Expense Charges for Increases..................22
SECTION 11. LOAN BENEFITS.................................................22
11.1 Making a Policy Loan..........................................22
11.2 Loan Interest.................................................22
11.3 Reduced Loan Interest Rate....................................22
11.4 Other Borrowing Rules.........................................22
11.5 Repaying a Policy Debt........................................23
SECTION 12. PAYMENT OPTIONS...............................................23
12.1 Payment Option Rules..........................................23
12.2 Description of Options........................................24
SECTION 13. NOTES ON OUR COMPUTATIONS.....................................24
13.1 Basis of Computations.........................................24
13.2 Methods of Computing Values...................................24
TABLES OF SETTLEMENT OPTIONS........................................................25
</TABLE>
4020 4
<PAGE> 12
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
Separate Account, the Fixed Account, and the accumulation value held in the
general account which secures outstanding policy debt.
"ATTAINED AGE" means the issue age of the Insured plus the number of complete
policy years that this policy has been in force.
"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 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.
"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.
"MAXIMUM AVAILABLE LOAN AMOUNT" is equal to the net cash surrender value at the
time of the loan less the 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.
"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 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 outstanding policy debt and less any overdue monthly deductions.
"NET PREMIUM" means the premium paid less the percent of premium charge.
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"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 2.7 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 in the schedule pages.
If you surrender this policy in the first two policy years, we will refund a
portion of the percent of premium charge deducted in the first policy year. For
surrenders in the first policy year, 100% of the first year percent of premium
charge will be refunded. For surrenders in the second policy year, 50% of the
first year percent of premium charge will be refunded. There is no refund after
the second policy anniversary.
"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
in the schedule pages. See Section 3.2 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. Certified copy of the death certificate.
b. A Notice of Death Claim.
c. This policy.
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 in the schedule
pages. Adjustments and changes to the specified amount can occur as discussed in
Section 10.
"SURRENDER" means this policy may be terminated by you during the Insured's life
for its net cash surrender value. See Section 8 of this policy.
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"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 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.
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.
b. The Insured dies.
c. You request the coverage be terminated and you return this policy.
2.3 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 of the minimum 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.
2.4 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 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.
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2.5 MISSTATEMENT OF AGE OR GENDER
If the age or gender 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 have been purchased by the most recent
deduction for the cost of insurance and the cost of any additional benefits at
the Insured's correct age or gender.
2.6 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 the sum of: (1) outstanding policy debt; (2)
partial withdrawals; and (3) 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.
2.7 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.
2.8 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.
2.9 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
completed Change of Beneficiary form and any other forms required by our Home
Office. The change will take effect as of the date we record it at our 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.
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2.10 ASSIGNING THE POLICY
You may assign this policy. For an assignment to bind us, we must receive a
signed copy in our 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.
2.11 NON-PARTICIPATING
This policy is non-participating. In other words, no dividends will be paid
under this policy.
SECTION 3. PREMIUM PAYMENTS
3.1 MINIMUM INITIAL PREMIUM
The minimum initial premium for the policy is the minimum amount of premium
necessary to be paid on or before the date the policy is delivered. The minimum
initial premium for the policy is shown in the schedule pages. Payment of the
minimum initial premium will not necessarily keep the policy in force beyond the
first policy month.
3.2 PLANNED PERIODIC PREMIUM
This is a flexible premium policy. You may choose to pay planned periodic
premiums. 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 in the schedule pages. You may change the frequency of the
planned periodic premiums or the amount by sending a written request to our Home
Office. We reserve the right to limit the amount and frequency of the planned
periodic premiums you choose to pay.
3.3 UNSCHEDULED PREMIUMS
Any premium we receive under this policy in an amount different from the planned
periodic premium will be considered an unscheduled premium. Unscheduled premiums
can be made at any time while this policy is in force, subject to the premium
limits provision below.
3.4 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.
3.5 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.
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3.6 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.
3.7 PERCENT OF PREMIUM CHARGE
The percent of premium charge is deducted from each premium payment received.
The maximum percent of premium charge is shown in the schedule pages. We have
the option of charging a current percent of premium charge, which can be less
than the maximum.
3.8 ALLOCATION OF NET PREMIUMs
Unless otherwise required by state law, the initial net premium will be
allocated on the issue date to the Subaccounts and/or the Fixed Account as you
have selected on the application. When state or other applicable law or
regulation requires return of at least your premium payments should you return
this policy pursuant to the "Notice of Ten- Day Right to Examine Policy"
provision shown on the policy cover, the initial net premium will be allocated
on the issue date to a money market Subaccount, unless you have allocated 100%
to the Fixed Account. Then, 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. If you have allocated 100% to
the Fixed Account, the accumulation value is immediately allocated to the Fixed
Account on the issue date. 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.
SECTION 4. GRACE PERIOD
AND REINSTATEMENT
4.1 GRACE PERIOD
This policy will begin a 61 day grace period when the net cash surrender value
on any monthly activity date is not sufficient to cover monthly deductions.
The 61 day grace period will begin on the day we mail a notice of the premium
necessary to keep this 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.
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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. Any policy debt will be reinstated.
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
in the schedule pages. The available Subaccounts may change after the policy
date. Any changes will be disclosed by the prospectus. You determine, using
whole percentages, how the net premium will be allocated among the Subaccounts.
You may choose to allocate nothing to a particular Subaccount. 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 in the schedule pages. See Section
5.5. Income and realized and unrealized gains or losses from the assets of each
Subaccount are credited to or charged against that Subaccount without regard to
income, gains or losses in the other Subaccounts, our general account or any
other separate accounts.
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5.3 VALUATION OF ASSETS
The value of the assets of each Subaccount will be determined 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. For
any transfer in excess of 15 in a policy year, 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.
5.5 THE FUNDS
The word Funds, where we use it in this policy without qualification, means the
funding vehicles designated in 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. We list those available on the policy date in 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. 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).
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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 whole percentages, how much of the premium will be
allocated to the Fixed Account. You may choose to allocate nothing to the Fixed
Account. The allocations to the Fixed Account along with allocations to the
Subaccounts must total 100%.
6.2 TRANSFERS AMONG THE FIXED ACCOUNT AND THE SUBACCOUNTS
You may transfer amounts into the Fixed Account from the Subaccounts at any time
during the policy year.
You may make one transfer per policy year out of the Fixed Account to any of the
other Subaccounts. This transfer may only occur during the 30 day period
following each policy anniversary.
The allowable transfer amount out of the Fixed Account is limited to the
greatest of:
a. 25% of the accumulation value in the Fixed Account; or
b. any Fixed Account transfer which occurred during the prior 13 months; or
c. $1,000.
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.
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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 or the Fixed Account are credited to that
Subaccount.
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.
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 is made from that Subaccount to other Subaccounts or the Fixed
Account.
e. Policy loan interest not paid when due is taken from that Subaccount.
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 on the valuation date for that
transaction.
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.
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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
administrative expense charge, shown in the schedule pages; minus
c. A daily charge for mortality and expense risk shown in the schedule pages;
minus
d. Any taxes payable by the Separate Account; divided by
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 loans taken from the Fixed Account; minus
e. Any partial withdrawals (and charges) taken from the Fixed Account; minus
f. The portions of the monthly deductions taken from the Fixed Account; minus
g. Any transfers made from the Fixed Account; minus
h. The portions of any transfer charges taken from the Fixed Account; minus
i. Any policy loan interest not paid when due taken from the Fixed Account;
plus
j. Interest credits.
7.6 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.
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7.7 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 in the schedule pages. We have
the option of charging a current administrative expense charge, which can be
less than the maximum. Any current administrative expense charge will apply to
all policies having the same specified amount, policy year and policy month as
this policy and whose Insured is the same issue age, gender and risk class as
the Insured covered by this policy. The actual charges will be shown on your
annual report.
7.8 COST OF INSURANCE
The cost of insurance will be calculated 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 divided by $1,000;
d. multiplied by the monthly cost per $1,000 of insurance (as described below
in the Cost of Insurance Rates section).
The charge made during the policy year will be shown on the annual report.
7.9 COST OF INSURANCE RATES
For the initial specified amount, the cost of insurance rates will not exceed
those shown on the SCHEDULE OF MAXIMUM 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.
The maximum rates shown in the schedule pages have been adjusted for any table
rating and/or flat extra rating.
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, gender,
tobacco usage and risk class, and the policy duration. The rates will be
adjusted for any table rating and/or flat extra rating.
Any change in the current cost of insurance rates will apply to all Insureds of
the same issue age, gender, tobacco usage and risk class, and whose policies
have been in effect for the same length of time.
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7.10 MONTHLY DEDUCTION
The monthly deduction is made each policy month against the accumulation value
allocated to the Subaccounts and to the Fixed Account. Monthly deductions will
be deducted from the Subaccounts and the Fixed Account in the same proportion as
the balances held in the Subaccounts and the Fixed Account. The monthly
deduction is equal to:
a. The monthly administrative expense charge for the current policy month;
plus
b. The cost of insurance for the current policy month, including the cost for
any riders.
Refer to the SCHEDULE OF MAXIMUM ANNUAL COST OF INSURANCE RATES
and the SCHEDULE OF MAXIMUM CHARGES in the schedule pages for further
details.
7.11 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.
7.12 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 at any time during the Insured's life for its net
cash surrender value.
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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 outstanding policy debt. There is
no surrender charge in this policy. The net cash surrender value is payable in
one lump sum or under one of the payment options. See Section 12.
If you surrender this policy in the first two policy years, we will refund a
portion of the percent of premium charge deducted in the first policy year. For
surrenders in the first policy year, 100% of the first year percent of premium
charge will be refunded. For surrenders in the second policy year, 50% of the
first year percent of premium charge will be refunded. There is no refund after
the second policy anniversary.
8.3 PARTIAL WITHDRAWAL
A partial withdrawal of this policy may be made for any amount of at least $500
subject to the following rules:
a. After a partial withdrawal, the net cash surrender value, not including any
percent of premium refund, must be at least the greater of $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 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.
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.
8.4 POSTPONEMENT OF PAYMENTS
We will usually pay any amounts payable from the Subaccounts as a result of
surrender, partial withdrawal or policy loan 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
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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 withdrawal or policy loan
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.
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 option shall be
either Option A or Option B. The initial death benefit option is shown in 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.
19
4020
<PAGE> 27
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.
<TABLE>
<CAPTION>
Insured's Applicable Insured's Applicable
Age * Percentage Age * Percentage
--------- ---------- --------- ----------
<S> <C> <C> <C>
40 or younger 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 67 118
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 94 or older 101
</TABLE>
*Insured's Age means the attained age at the beginning of the policy year.
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
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 per policy 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.
20
4020
<PAGE> 28
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 per policy 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
$100,000. However, once the Insured reaches attained age 100, the specified
amount in effect after any decrease may not be less than $1,000.
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.
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 attained age is over the maximum
issue age for the Insured's risk class.
e. At the time of the increase, the accumulation value 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.
21
4020
<PAGE> 29
10.5 ADMINISTRATIVE EXPENSE CHARGE FOR INCREASES
An additional administrative expense charge will be imposed under this policy in
the event of each requested increase in specified amount. The charge is an
amount per $1000 of increased specified amount based on the gender, tobacco
usage and attained age of the Insured at the time of the increase. The
additional administrative expense charge will be determined at the time of each
increase. It will remain level for ten years and will drop to zero thereafter.
See the SCHEDULE OF ADMINISTRATIVE EXPENSE CHARGES FOR INCREASES in the schedule
pages for further information.
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 or on surrender.
11.1 MAKING A POLICY LOAN
To 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 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 LOAN 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. The eligible loan amount for a reduced loan interest rate
will be equal to the accumulation value plus any previous partial withdrawals,
minus total premiums paid and minus any outstanding policy debt held at a
reduced interest rate. However, the total reduced loan amount cannot exceed the
Maximum Available Loan Amount. 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. Interest on loans with a reduced interest rate will
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
22
4020
<PAGE> 30
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 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.
On any monthly activity date, if the policy debt exceeds the accumulation value
less any overdue monthly deductions, 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. We will send the
notice to you and to any assignee of record at our Home Office. See Section 4.1.
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
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
Death benefit proceeds or the net cash surrender value 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. Subject to our approval, any other
payment option that we offer may be selected.
12.1 PAYMENT OPTION RULES
There are several important payment option rules:
a. An association, corporation, partnership, trust 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 3.5%.
To choose an option, you must send a written request satisfactory to us at our
Home Office.
23
4020
<PAGE> 31
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
Mortality Tables without smoker distinction in computing minimum values and
reserves for this policy. 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.
24
4020
<PAGE> 32
TABLES OF SETTLEMENT OPTIONS
<TABLE>
<CAPTION>
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 4.44 4.42
59 5.15 5.13 5.06 4.94 4.76 4.82 59 4.67 4.66 4.62 4.57 4.44 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.
25
4020
<PAGE> 33
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<PAGE> 34
Flexible Premium Variable Life Insurance Policy.
Death benefit proceeds payable at death of Insured.
Flexible premiums payable during lifetime of Insured.
Some benefits reflect investment results. Non-participating.
Form 4020
<PAGE> 1
EXHIBIT 1.(5)(b)
POLICY RIDERS
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
DISABILITY BENEFIT RIDER
BENEFITS
While the Insured is totally disabled, the disability benefit amount will be
applied as premium to the policy. 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. If any portion of a disability benefit would affect the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended, the benefit payable will be reduced by that portion
considered to be excess premium.
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 of the policy.
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 in the schedule pages of the policy. 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 65th 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
DBR 4901
<PAGE> 2
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.
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 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. After the Insured has been totally disabled for 2 years,
we will only require proof once per year. If the Insured fails to furnish such
proof, the disability benefit will cease.
DURATION OF BENEFITS: Upon approval of your claim, we will credit the disability
benefit amount. We will start with the monthly anniversary date prior to the
date disability began. However, we will not credit any amount for a period of
more than 9 months before we receive written notice of disability unless it is
shown that notice was given as soon as reasonably possible.
We will continue to credit the disability benefit amount while the Insured is
totally disabled and the policy is in force until the rider anniversary
following the Insured's 100th birthday. However, if disability begins on or
after the rider anniversary after the Insured's 60th birthday, we will only
credit payment:
1. Until the rider anniversary following the Insured's 65th birthday; or
2. For two years; if later.
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.
DBR 4901
<PAGE> 3
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 65th 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 this rider
in force for 3 months.
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; or
4. On termination of the 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 DEDUCTIONS AFTER TERMINATION OF THIS RIDER: If, after this
rider has terminated, we make a deduction from the accumulation value for the
cost of insurance for this rider, our only obligation to you under this rider
will be to return the cost of insurance deduction. No coverage is available
after the termination date of this rider.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider. If the policy has been issued on a gender-neutral basis, this rider
is also considered to be issued on a gender-neutral basis.
This rider has no cash or loan value.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
/s/ Donald R. Stading /s/ William J. Atherton
Secretary President
DBR 4901
<PAGE> 4
This page intentionally left blank.
<PAGE> 5
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
TERM COVERAGE RIDER
BENEFITS
Under the terms of this rider, we agree to pay the Rider Death Benefit to the
beneficiary upon receipt of satisfactory proof of the death of the Insured.
Death must occur while this rider is in force. Payment is subject to the
provisions of the policy and this rider.
CONSIDERATION
This rider is issued in consideration of the application and the 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
BENEFICIARY: The term "beneficiary" in this rider means the person named as the
beneficiary under the policy.
INSURED: The term "Insured" in this rider means the person named as the Insured
under the policy.
EFFECTIVE DATE: The effective date of coverage under this rider shall be the
policy date of the policy. The effective date for reinstatement for any
insurance coverage provided by this rider is subject to the reinstatement
provisions of the policy.
EXPIRATION DATE: This date is shown in the schedule pages of the policy. It is
the date on which this rider is no longer effective.
RIDER DEATH BENEFIT: This is the amount of death benefit provided by this rider.
It is the difference between the amount of the Total Death Benefit and the death
benefit provided under the policy. The amount of Rider Death Benefit can change
daily. It may change to zero but it can never be less than zero. In other words,
this rider will remain in effect until you request its termination subject to
the provision Termination of Rider.
RIDER SPECIFIED AMOUNT OF INSURANCE: The Rider Specified Amount of Insurance is
shown in the schedule pages of the policy. You may not increase this amount.
After the first policy year, you may decrease this amount. However, you may not
decrease the Rider Specified Amount of Insurance to less than $50,000.
TOTAL DEATH BENEFIT: The Total Death Benefit depends upon which death benefit
option is in effect. If Option A is in effect, the Total Death Benefit is the
greater of (1) the Total Specified Amount of Insurance, or (2) the Accumulation
Value multiplied by the appropriate death benefit percentage (see the policy
provision on Death Benefit). If Option B is in effect, the Total Death Benefit
is the greater of (1) the Total Specified Amount of Insurance plus the
Accumulation Value, or (2) the Accumulation Value multiplied by the appropriate
death benefit percentage (see the policy provision on Death Benefit)
TCR 4901
<PAGE> 6
TOTAL SPECIFIED AMOUNT OF INSURANCE: This is the specified amount of insurance
provided under the policy plus the Rider Specified Amount of Insurance.
COST OF INSURANCE
The cost of insurance for this rider will be calculated each month. It is equal
to the Rider Death Benefit on the monthly activity date multiplied by the
monthly cost per $1000 of insurance divided by $1000. The Table of Maximum
Annual Term Coverage Rider Cost of Insurance Rates is attached. The cost of
insurance rates will not exceed the rates in this table plus an adjustment for
any increased rating shown in the schedule pages of the policy.
We have the option of charging less than the maximum rates shown in the table.
Each year, the current annual cost of insurance rate will be declared for the
next policy year. This rate will be based on the Insured's issue age, gender,
risk class and the policy duration. The rate will be adjusted for any rating
factor shown in the schedule pages of the policy.
Any change in the current cost of insurance rates will apply to all Insureds of
the same issue age, gender, and risk class and whose policies have been in
effect for the same length of time.
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. However, you may not terminate this rider within the first
policy year.
3. On termination of the policy.
GENERAL PROVISIONS
AMENDMENT TO POLICY: Item b. in Section 10.3 "Decreasing the Specified Amount"
of the policy is amended. The specified amount in effect after any decrease may
not be less than $50,000. However, once the Insured reaches attained age 100,
the specified amount in effect after any decrease may not be less than $1,000.
REINSTATEMENT: This rider may be reinstated with the policy if the Insured is
living and application is made within three years from the beginning of any
grace period. Reinstatement must occur before the expiration date of this rider.
The requirements for reinstatement are:
1. Receipt of evidence satisfactory to us of insurability of the Insured.
2. Payment of the minimum cost of insurance sufficient to keep the rider in
force for three months.
SUICIDE: If the Insured commits suicide while sane or insane, within two years
from the effective date of this rider, we will limit the benefits of this rider.
The limited benefits will equal the cost of insurance paid for this rider.
TCR 4901
<PAGE> 7
INCONTESTABILITY: We cannot contest this rider after it has been in force during
the Insured's life for two years from the rider effective date or from any
reinstatement of this rider.
COST OF INSURANCE DEDUCTIONS AFTER TERMINATION OF THIS RIDER: If, after this
rider has terminated, we make a deduction from the accumulation value for the
cost of insurance for this rider, our only obligation to you under this rider
will be to return the cost of insurance deduction. No coverage is available
after the termination date of this rider.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider unless otherwise specified in
this rider. If the policy has been issued on a gender-neutral basis, this rider
is also considered to be issued on a gender-neutral basis.
This rider has no cash or loan value.
CONVERSION: This rider is not convertible to a permanent policy of life
insurance.
NON-PARTICIPATING: This rider is non-participating.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
/s/ Donald R. Stading /s/ William J. Atherton
Secretary President
TCR 4901
<PAGE> 8
This page left intentionally blank.
<PAGE> 9
TABLE OF MAXIMUM ANNUAL TERM COVERAGE RIDER
COST OF INSURANCE RATES
<TABLE>
<CAPTION>
ATTAINED
AGE MALE RATES FEMALE RATES UNISEX RATES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
18 2.22 1.22 2.02
19 2.32 1.27 2.11
20 2.37 1.31 2.17
21 2.38 1.33 2.18
22 2.36 1.36 2.16
23 2.32 1.38 2.13
24 2.27 1.42 2.11
25 2.21 1.45 2.06
26 2.16 1.48 2.03
27 2.13 1.52 2.01
28 2.12 1.57 2.01
29 2.13 1.62 2.03
30 2.16 1.68 2.06
31 2.22 1.75 2.12
32 2.28 1.81 2.18
33 2.38 1.87 2.28
34 2.50 1.97 2.38
35 2.63 2.06 2.52
36 2.80 2.20 2.67
37 3.00 2.36 2.87
38 3.22 2.55 3.08
39 3.48 2.77 3.35
40 3.77 3.02 3.62
41 4.11 3.30 3.95
42 4.45 3.58 4.27
43 4.83 3.86 4.65
44 5.23 4.15 5.01
45 5.68 4.45 5.43
46 6.15 4.75 5.87
47 6.65 5.06 6.33
48 7.17 5.41 6.81
49 7.76 5.78 7.36
50 8.38 6.20 7.95
51 9.12 6.63 8.62
52 9.95 7.12 9.37
53 10.88 7.68 10.23
54 11.95 8.26 11.20
55 13.08 8.86 12.22
56 14.32 9.46 13.33
57 15.61 10.03 14.47
58 16.98 10.58 15.67
59 18.46 11.17 16.96
</TABLE>
(continued)
TCR 4901
<PAGE> 10
TABLE OF MAXIMUM ANNUAL TERM COVERAGE RIDER
COST OF INSURANCE RATES
(continued)
<TABLE>
<CAPTION>
ATTAINED
AGE MALE RATES FEMALE RATES UNISEX RATES
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
60 20.10 11.83 18.40
61 21.92 12.66 20.00
62 23.98 13.70 21.83
63 26.32 15.02 23.95
64 28.92 16.56 26.31
65 31.77 18.23 28.88
66 34.81 20.00 31.61
67 38.05 21.78 34.51
68 41.48 23.55 37.53
69 45.21 25.45 40.82
70 49.38 27.63 44.48
71 54.12 30.28 48.68
72 59.56 33.58 53.55
73 65.80 37.63 59.16
74 72.73 42.41 65.46
75 80.23 47.80 72.30
76 88.16 53.71 79.56
77 96.40 60.05 87.12
78 104.87 66.81 94.93
79 113.81 74.18 103.21
80 123.55 82.48 112.28
81 134.35 92.00 122.42
82 146.56 103.00 133.97
83 160.32 115.66 147.06
84 175.31 129.76 161.37
85 191.18 145.12 176.72
86 207.61 161.61 192.71
87 224.43 179.15 209.36
88 241.58 197.72 226.55
89 259.11 217.42 244.42
90 277.21 238.43 263.16
91 296.22 261.08 283.13
92 316.81 286.01 305.16
93 340.13 314.38 330.05
94 369.87 349.13 361.70
95 412.45 396.65 406.11
96 480.68 469.67 476.21
97 600.25 593.71 597.11
98 822.47 819.81 821.72
99 1000.00 1000.00 1000.00
</TABLE>
TCR 4901
<PAGE> 11
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
WAIVER OF MONTHLY DEDUCTIONS ON
DISABILITY
BENEFITS
While the Insured is totally disabled, the monthly deduction 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.
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
WDIS 4901
<PAGE> 12
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.
2. For any rider issued after the policy date, the effective date shall be the
date shown on a supplement to the schedule pages of the policy.
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 in the schedule pages of the policy. It
is the date on which this rider is no longer effective.
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. After the Insured has been totally disabled for 2 years,
we will only require proof once per year. If the Insured fails to furnish such
proof, the disability benefit will cease.
DURATION OF BENEFITS: We will begin to provide the disability benefit in the
policy month following the date disability began. However, we will not provide
the disability benefit for a period of more than 12 months before we receive
written notice of disability unless it is shown that notice was given as soon as
reasonably possible.
WDIS 4901
<PAGE> 13
We will continue to provide the disability benefit while the Insured is totally
disabled until the rider anniversary following the Insured's 100th birthday.
However, if disability begins on or after the rider anniversary following the
Insured's 60th birthday, we will only provide the disability benefit:
1. Until the rider anniversary following the Insured's 65th birthday, or
2. For two years, if later.
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 65th 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.
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 the rider to us; or
4. On termination of the policy.
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, or change the policy to another form of insurance.
WDIS 4901
<PAGE> 14
NONPARTICIPATING: This rider is nonparticipating.
COST OF INSURANCE DEDUCTIONS AFTER TERMINATION OF THIS RIDER: If, after this
rider has terminated, we make a deduction from the accumulation value for the
cost of insurance for this rider, our only obligation to you under this rider
will be to return the cost of insurance deduction. No coverage is available
after the termination date of this rider.
INCORPORATION OF POLICY PROVISIONS INTO RIDER: The provisions of the policy are
hereby referred to and made a part of this rider. If the policy has been issued
on a gender-neutral basis, this rider is also considered to be issued on a
gender-neutral basis.
AMERITAS VARIABLE LIFE INSURANCE COMPANY
/s/ Donald R. Stading /s/ William J. Atherton
Secretary President
WDIS 4901
<PAGE> 15
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 gender 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 in the schedule pages of the policy).
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>
ISSUE MALE FEMALE UNISEX ISSUE MALE FEMALE UNISEX
AGE RATES RATES RATES AGE RATES RATES RATES
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
18 0.0434 0.0554 0.0458 42 0.0708 0.0691 0.0705
19 0.0422 0.0543 0.0446 43 0.0735 0.0716 0.0731
20 0.0413 0.0530 0.0436 44 0.0765 0.0742 0.0760
21 0.0403 0.0516 0.0426 45 0.0794 0.0770 0.0789
22 0.0419 0.0526 0.0440 46 0.0825 0.0801 0.0820
23 0.0427 0.0528 0.0447 47 0.0866 0.0838 0.0860
24 0.0437 0.0523 0.0454 48 0.0915 0.0881 0.0908
25 0.0448 0.0525 0.0463 49 0.0974 0.0935 0.0966
26 0.0458 0.0521 0.0471 50 0.1054 0.1000 0.1043
27 0.0466 0.0521 0.0477 51 0.1148 0.1082 0.1135
28 0.0475 0.0518 0.0484 52 0.1266 0.1187 0.1250
29 0.0481 0.0517 0.0488 53 0.1405 0.1305 0.1385
30 0.0487 0.0514 0.0492 54 0.1579 0.1465 0.1556
31 0.0489 0.0513 0.0494 55 0.1778 0.1649 0.1752
32 0.0492 0.0512 0.0496 56 0.2034 0.1896 0.2006
33 0.0492 0.0512 0.0496 57 0.2234 0.2106 0.2208
34 0.0492 0.0506 0.0495 58 0.2460 0.2362 0.2440
35 0.0492 0.0509 0.0495 59 0.2684 0.2633 0.2674
36 0.0507 0.0524 0.0510 60 0.2684 0.2633 0.2674
37 0.0562 0.0573 0.0564 61 0.2684 0.2633 0.2674
38 0.0593 0.0600 0.0594 62 0.2684 0.2633 0.2674
39 0.0624 0.0627 0.0625 63 0.2684 0.2633 0.2674
40 0.0655 0.0652 0.0654 64 0.2684 0.2633 0.2674
41 0.0679 0.0670 0.0677
- ----------------------------------------------------------------------------------------------------------
</TABLE>
WDIS 4901
<PAGE> 16
This page left intentionally blank.
<PAGE> 1
EXHIBIT 1. (8)(c)
PARTICIPATION AGREEMENT
AMONG
VARIABLE INSURANCE PRODUCTS FUND,
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, 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 an 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
account 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 "Advisor") 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
and 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
1
<PAGE> 2
WHEREAS, to the extent permitted by applicable insurance law 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 after receipt by the Fund or its designee
of the order for the shares of the Fund. For purposes of the 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 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 Section 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 the 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 (a) such other investment company, or series
thereof, has 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.
2
<PAGE> 3
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 the Portfolio. The Company reserves the right to revoke this election
and to receive all such income dividends and capital gain distributions
in cash. The Fund shall notify the Company of the number of shares so
issued as payment of such dividends and distributions.
1.10 The Fund 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 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.
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 represent 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 no 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
payment 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 under Rule 12b-1 to
finance distribution expenses.
2.6 The Fund makes no representation as the whether any aspect of its
operation (including, but not limited to, fees and expenses and
investment policies) complies with the insurance laws or regulation 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 law of the
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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 law of the Sate 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, officer, 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 no 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 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.
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 that 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 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 communication 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 instruction from Contract Owners;
II. vote the Fund shares in accordance with instructions
received from Contract Owners; and
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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 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 os 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
statements 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.
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 representation
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
owner, 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" includes, but is no limited to, advertisements
(such as material published, or designed for use in, a
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<PAGE> 6
newspaper, magazine, or other periodical, radio television, telephone or
tape recording, videotape display, signs or billboards, motion pictures,
or other public media), sales literature (i.e., any written communication
distributed or made generally available to customers or the public,
including brochures, circulars, 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, Statement 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 Rule12b-1 to finance
distribution expenses, then the Underwriter may make payment 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. No such payments
shall be made directly by the Fund. Currently no 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 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 material 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
distributing the Fund's proxy materials and reports to such Contract
owners.
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) of the Code and Treasury Regulation ss.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 account 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 irreconcilable conflict exists,
the Company and other Participating Insurance Companies
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<PAGE> 7
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 manage 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 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 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 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 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
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<PAGE> 8
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, damage,
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 contained in the Contracts or sales literature
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and
in conformity with information furnished to the Company by
or on behalf of the Fund for use in the Registration
Statement or prospectus for the Contracts or in the
Contracts or sales literature (or any amendment or
supplement) or otherwise for use in connection with the
sale of the Contracts or Fund shares; or
II. arise out of or as a result of statements or
representations (other than statements or representations
contained in the Registration Statement, prospectus or
sales literature of the Fund not supplied by the Company,
or persons under its control) 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 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.
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8.1(d) Th 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 statue, 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 is 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
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 8.02(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
9
<PAGE> 10
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 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 Trustees or any member
thereof, are related to the operation 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 no be liable under this indemnified provision with
respect to any claim made against and Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing
within a reasonable time after the summons or other first legal
process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any designated
agent), but failure to notify the Fund of any such claim shall not
relieve the Fund from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any
such action is brought against the Indemnified Parties, the Fund
will be entitled to participate, at its own expense, in the
defense thereof. The Fund also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in
the action. After notice from the Fund to such party of the Fund's
election to assume the defense thereof, the Indemnified Party
shall bear the fees and expense 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
10
<PAGE> 11
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 provision of the 1933, 1934, and
1940 acts, and the rules and regulations and rulings thereunder,
including such exemptions from those statutes, rules and regulations as
the Securities and Exchange Commission may grant (including, but not
limited to, the Shared Funding Exemptive Order) and the terms hereof
shall be interpreted and construed in accordance therewith.
ARTICLE X. Termination
10.1 This agreement shall 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 Dealer, 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 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 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
11
<PAGE> 12
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 action
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 action 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 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.
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 (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 (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 Contacts. The parties
agree that this Section 10.4 shall not apply to any termination 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 law
or regulation 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 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.
12
<PAGE> 13
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 "O" Street, P.O. Box 82550
Lincoln, Nebraska 68501
Attention: Rodney Vincent
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
Trustee, 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
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 transaction 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 with such Commissioner may request in order to ascertain
whether the variable life insurance operation 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 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.
13
<PAGE> 14
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed in its name 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: August 7, 1989
______________________________________
Fund:
VARIABLE INSURANCE PRODUCTS FUND
By its authorized officer,
SEAL By: /s/ J. Gary Burkhead
______________________________________
Title: Senior Vice President
______________________________________
Date: August 14, 1989
______________________________________
Underwriter:
FIDELITY DISTRIBUTORS CORPORATION
By its authorized officer,
SEAL By: /s/ Roger Servison
______________________________________
Title: President
______________________________________
Date: August 21, 1989
______________________________________
14
<PAGE> 1
EXHIBIT 1.(10)
Application for Policy
1010-V
Ameritas Variable Life Insurance Company (AVLIC)
P.O. Box 82550
Lincoln, NE 68501-2550
APPLICATION FOR
VARIABLE
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UNIVERSAL LIFE Please print clearly in black ink.
=====================================================================================================================
<S><C>
Part 1
- ---------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: CORPORATE BENEFIT VUL
- ---------------------------------------------------------------------------------------------------------------------
1. INSURED
Name of Insured________________ Sex ____ Date of Birth __________/_/________ Birthplace ________________________
(State)
Former Name (if applicable)_________________________________________________ Social Security Number_____________
Address_________________________________________________________________________________________________________
PO Box/Address City State Zip
Occupation_____________________ Employer________________________________________________________________________
(Date Employed)
Telephone - Home_______________ Best Time To Call: ______ A.M. ______ P.M.
Telephone - Business___________ Best Time To Call: ______ A.M. ______ P.M.
- ---------------------------------------------------------------------------------------------------------------------
2. EMPLOYMENT DATA
Yes No
a. Has the Insured been actively at work on a full time basis at least 30 hours per week
for the past 90 days? (If No explain) [ ] [ ]
b. Has the Insured ever requested or received disability benefits in the past ten years? [ ] [ ]
- ---------------------------------------------------------------------------------------------------------------------
3. TOBACCO USE
Yes No
a. Has the Insured smoked one or more cigarettes in the past twelve months? [ ] [ ]
b. Has the Insured used any form of tobacco or nicotine substitute in the past twelve months? [ ] [ ]
(If yes, please indicate the type and frequency)______________________________________________________________
- ---------------------------------------------------------------------------------------------------------------------
4. OWNER
Full Name____________________________ Address___________________________________________________________________
Date of Birth/Trust Date___/___/____
Relationship to Insured (or all Trustee's Names)________________________________________________________________
Social Security#/TIN#________/_______/_________
Telephone Number_______________________________ Contact Person _________________________________________________
- ---------------------------------------------------------------------------------------------------------------------
5. BENEFICIARY If left blank, the beneficiary will be the Owner, or the estate of the insured if the Owner is
not then alive or in exsistence. Unless otherwise indicated, multiple beneficiaries of the same
class shall be paid equally to the survivor or survivors.
Primary__________________________________________________ Relationship to Insured __________________________
Contingent_______________________________________________ Relationship to Insured __________________________
- ---------------------------------------------------------------------------------------------------------------------
6. DEATH BENEFIT
Amount of Insurance $ _________________
DEATH BENEFIT OPTION (select one only) OPTIONAL RIDERS:
[ ] Option A (death benefit is the amount of insurance) [ ] Disability Benefit $ ________________ or [ ] Waiver of Monthly
Deduction
[ ] Option B (death benefit is the amount of [ ] Term Coverage Rider $ _______________
insurance plus the accumulation value)
- ---------------------------------------------------------------------------------------------------------------------
7. PREMIUM MODE Please select one.
[ ] Annual [ ] Semi-Annual [ ] Quarterly [ ] Monthly Bank Withdrawal [ ] Monthly Billing
[ ] Non-Billing [ ] Invoice Billed [ ] Payroll Deduction (Additional form required) [ ] Single $ _____________
- ---------------------------------------------------------------------------------------------------------------------
8. PREMIUM AMOUNT
Planned Annual Premium $ _____________ Planned Modal Premium $ _____________
*Initial Premium (paid with application) $ _____________(leave receipt with payor).
*ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO AVLIC. DO NOT MAKE CHECK PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
- ---------------------------------------------------------------------------------------------------------------------
NQDC-AVLIC Ed.1-00
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9. INSURANCE INFORMATION
List all life insurance existing on Insured. If None, check box. [ ] None [ ] Yes [ ] No
Will the insurance now being applied for discontinue, reduce, change or
replace any life insurance or annuity in this or any other company? (If
yes, attach Replacement Notice if required by State Law.)
(Specify policy number(s) below)
================================================================================
YEAR WILL THIS POLICY BE REPLACED?
COMPANY POLICY NUMBER AMOUNT ISSUED YES NO AS A 1035?
================================================================================
[ ] [ ] [ ]
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[ ] [ ] [ ]
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[ ] [ ] [ ]
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[ ] [ ] [ ]
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[ ] [ ] [ ]
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[ ] [ ] [ ]
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10. SPECIAL INSTRUCTIONS
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- ---------------------------------------------------------------------------------------------------------------------
11. ENDORSEMENTS/CORRECTIONS HOME OFFICE USE ONLY.
No change in the amount, age at issue, classification, plan of insurance
or benefits shall be effective unless agreed to in writing by me. This space
will not be used in MD, PA, WV or any other state if not allowed by statute or
Insurance Department Regulations.
- ---------------------------------------------------------------------------------------------------------------------
12. [ ] GUARANTEED ISSUE [ ] SIMPLIFIED ISSUE [ ] REGULAR ISSUE (FULL UNDERWRITING)
(Proceed to Question 14) (Complete Questions 13 & 14 for Simplified and Regular Issue)
- ---------------------------------------------------------------------------------------------------------------------
13. OTHER INFORMATION
Yes No
a. Have you participated in any vehicle racing, parachuting, hang gliding, scuba diving,
mountain climbing or rodeos within the past 2 years or is any such activity
contemplated? (If yes, complete Avocation Form) [ ] [ ]
b. Have you, within the past 5 years, consulted a physician for any reason
or had any diagnostic tests? [ ] [ ]
c. Have you, within the past 5 years, been treated by a person licensed as a medical
physician for or had indication of:
1. Cancer, tumor, liver, kidney, lung or nervous disorder? [ ] [ ]
2. Chest pain, high blood pressure, heart disease or
other circulatory disorder, diabetes or stroke? [ ] [ ]
d. Have you ever used narcotics, barbiturates, amphetamines,
cocaine, LSD, marijuana or hallucinogenic drugs? [ ] [ ]
e. Have you ever received counseling or treatment, or been a member of any support group
for the use of alcohol or drugs? [ ] [ ]
f. Has any company declined, postponed, modified, cancelled or refused to
renew, reinstate or issue insurance? [ ] [ ]
g. Is any other life insurance application now pending or contemplated with
any other company? [ ] [ ]
h. Have you been charged with a driving violation or had your license suspended or had a
restriction placed on your license within the past 3 years? (If yes, provide:)
Driver's license number ________________________________ State of Issue_________________________ [ ] [ ]
i. Do you anticipate travel or residence in a foreign country in the near
future? (If so, where and for how long? _______________________) [ ] [ ]
j. Have you within the past 3 years been prescribed medication by a
physician or practitioner? [ ] [ ]
k. Insured:
EXACT HEIGHT ______ft. ______in. Exact Weight ________lbs. [ ] Gained [ ] Lost__________ pounds in the past year
Advise reason for change ________________________________________________________________________________________
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14. GIVE COMPLETE DETAILS OF ANY "YES" ANSWERS TO QUESTIONS IN SECTION 13.
Question # Full details of disease, injury, activity, ect. Date Names and addresses of Physicians and
hospitals (if applicable)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
15. SUITABILITY INFORMATION
I, as _________________________________ of the _________________ (corporation, partnership, trust, etc.,
hereinafter "Institutional Customer"), hereby certify that Institutional Customer or its designated agent
(corporate officer, owner, trustee, etc.) have adequate investment experience and education to evaluate the
investment risk of this investment on a basis independent from that of the information provided to us by the
Registered Representative selling this policy to Institutional Customer. In the event Institutional Customer at
any time believes that it does not have the ability to analyze the risk of this investment it agrees to obtain
the services of such consultants and/or other market professionals as can provide the information necessary to
make this decision independent of the soliciting Registered Representative.
HOME OFFICE USE ONLY ________________________________________
Signature of Institutional Customer
FOR AIC REGISTERED REPRESENTATIVES ONLY ________________________________________
Supervisory Principal's Signature
NOTICE
All Registered Representatives must provide their Broker Dealer with client information applicable to suitability.
(See your Broker Dealer for details.)
- -----------------------------------------------------------------------------------------------------------------------------------
16. ALLOCATION BY ADVISOR/SUBADVISOR
FIDELITY ALGER MANAGEMENT MFS CO.
Whole percentages only, ______ % Equity-Income* Alger American Fund MFS Trust
must total 100%. ______ % Growth* ______ % Balanced ______ % Utilities
______ % High Income* ______ % Leveraged AllCap ______ % Global Governments
______ % Overseas* Ameritas Portfolio (Subadvised) ______ % New Discovery
______ % Asset Manager* ______ % Growth Ameritas Portfolio (Subadvised)
______ % Investment Grade Bond ______ % Income & Growth ______ % Emerging Growth
______ % Asset Manager: Growth * ______ % Small Capitalization ______ % Research
______ % Contrafund* ______ % MidCap Growth ______ % Growth With Income
CALVERT MSDW INVESTMENT STATE STREET
Socially Responsible Funds MANAGEMENT Ameritas Portfolio (Subadvised)
______ % Balanced ______ % Emerging Markets Equity ______ % Index 500
______ % Small Cap Growth ______ % Global Equity
______ % Mid Cap Growth ______ % International Magnum AVLIC
______ % International Equity ______ % Asian Equity ______ % Fixed Account
Ameritas Portfolio (Subadvised) ______ % U.S. Real Estate
______ % Money Market 100% TOTAL
*Service class
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17. TELEPHONE AUTHORIZATION Unless waived, the Owner and Agent/Registered
Representative will have automatic telephone transfer authorization.
[ ] I elect NOT to have telephone authorization. [ ] I elect NOT to have my Registered Representative have transfer authorization
I hereby authorize and direct AVLIC to make allowable transfers of funds or reallocation of net premiums among
available subaccounts or to complete other financial transactions as may be allowed by AVLIC at the time of
request, based upon instructions received by telephone from a) myself, as Owner b) my Agent/Registered
Representative in Section 23 below; and c) the person(s) named below. AVLIC will not be liable for following
instructions communicated by telephone that it reasonably believes to be genuine. AVLIC will employ reasonable
procedures, including requiring the policy number to be stated, tape recording all instructions, and mailing
written confirmations. If AVLIC does not employ reasonable procedures to confirm that instructions communicated
by telephone are genuine, AVLIC may be liable for any losses due to unauthorized or fraudulent instructions.
Name per (c) above:_____________________________________________________________ SS# ___________________________________________
Address: ________________________________________________________________________________________________________________________
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 Owner is received in written form or by telephone by AVLIC; or 2)
AVLIC discontinues this privilege.
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18. DISCLOSURES
I hereby acknowledge receipt of the current prospectus, and any supplements, for this policy including any
required disclosure if the policy applied for will be in a qualified or ERISA covered non-qualified plan.
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19. AGREEMENTS
I AGREE AS FOLLOWS:
a. NOTE FOR ARKANSAS, KENTUCKY AND OHIO RESIDENTS: Any person who, with intent to defraud or knowing that
he is facilitating a fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement is guilty of insurance fraud.
b. NOTE FOR COLORADO RESIDENTS: It is unlawful to knowingly provide false, incomplete, or misleading facts
or information to an insurance company for the purpose of defrauding or attempting to defraud the
company. Penalties may include imprisonment, fines, denial of insurance, and civil damages. Any
insurance company or agent of an insurance company who knowingly provides false, incomplete, or
misleading facts or information to a policy holder or claimant for the purpose of defrauding or
attempting to defraud the policy holder or claimant with regard to a settlement or award payable from
insurance proceeds shall be reported to the Colorado Division of Insurance within the Department of
Regulatory Agencies.
c. NOTE FOR D.C. RESIDENTS: It is a crime to provide false or misleading information to an insurer for the
purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In
addition, an insurer may deny insurance benefits if false information materially related to a claim was
provided by the applicant.
d. NOTE FOR LOUISIANA RESIDENTS: Any person who, with intent to defraud or knowing that he is facilitating
a fraud against an insurer, submits an application or files a claim containing a false or deceptive
statement may be guilty of insurance fraud.
e. NOTE FOR NEW JERSEY RESIDENTS: Any person who knowingly presents a false or fraudulent claim for payment
of a loss or benefit or knowingly presents false information in an application for insurance is guilty
of a crime and may be subject to civil fines and criminal penalties.
f. NOTE FOR NEW MEXICO RESIDENTS: Any person who includes false or misleading information on an application
for an insurance policy is subject to criminal and civil penalties.
g. NOTE FOR PENNSYLVANIA RESIDENTS: Any person who knowingly and with intent to defraud any insurance
company or other person files an application for insurance or statement of claim containing any
materially false information or conceals for the purpose of misleading information concerning any fact
material thereto commits a fraudulent insurance act, which is a crime and subjects such person to
criminal and civil penalties.
h. NOTE FOR VIRGINIA RESIDENTS: Any person who, with intent to defraud or knowing that he is facilitating a
fraud against an insurer, submits an application or files a claim containing a false or deceptive
statement may have violated state law.
i. Any policy including any endorsements issued as a result of this application will, with this application
and any supplemental applications, be the entire insurance contract.
j. No agent, broker or medical examiner can: 1) waive the answers to any questions in this application; 2)
make or change any insurance contract; or 3) waive any rights or rules of AVLIC.
K. EXCEPT AS SPECIFIED OTHERWISE IN A RECEIPT PROVIDED UPON A PAYMENT OF PREMIUM AT THE TIME OF
APPLICATION, INSURANCE WILL NOT BE EFFECTIVE UNTIL ALL OF THE FOLLOWING ARE MET: A) THE POLICY ISSUED BY
AVLIC IS DELIVERED TO AND ACCEPTED BY THE APPLICANT; AND B) THE FIRST FULL PREMIUM IS PAID.
l. AVLIC may change this application by an appropriate notation in the space marked
"Endorsements/Corrections": 1) to correct apparent errors or omissions; and 2) 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: 1) amount of insurance; 2) plan of insurance; 3) classification of risks; or 4) benefits.
Acceptance of any policy issued under this application ratifies any amendments.
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m. I understand that: 1) THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY WITH INVESTMENT EXPERIENCE,
LOANS AND OTHER SPECIFIED CONDITIONS; 2) 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;
3) the amount of the benefit payable on surrender is not guaranteed, but is dependent on the then
surrender value; 4) illustrations of benefits, including the death benefit, are available upon request;
and 5) this policy meets my investment objectives and anticipated financial needs.
20. AUTHORIZATION This authorization or a photocopy of it, shall remain valid for use by AVLIC for two (2)
years from the date below.
I authorize any licensed physician, medical practitioner, hospital, clinic or other medically related facility, insurance
company, agency conducting Investigative Consumer Reports or any information service or financial institution, family member,
or associate to release to AVLIC or any person or entity acting on its behalf, any personal information which is on file and
relates to my health or mental condition, general character, driving records, use of alcohol and drugs, and hobbies of a
hazardous nature. I understand that any information obtained will be used to determine my eligibility for insurance.
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.
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 my authorized representative and I can receive a
copy of this authorization if we so desire.
NOTE FOR NEW JERSEY AND VIRGINIA RESIDENTS: I authorize AVLIC to obtain an Investigative Consumer Report.
An Investigative Consumer Report commonly includes information regarding the consumer's character, general
reputation, personal characteristics and mode of living. It also includes verification of residence,
marital status and occupation. I understand that I may request a copy of the report upon its completion and
that I may ask to be interviewed in conjunction with the preparation of the report by contacting AVLIC.
NOTE FOR NEW JERSEY AND WEST VIRGINIA RESIDENTS: I also understand that none of the information collected
concerning my sexual orientation will be used to determine my eligibility for insurance.
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21. SUBSTITUTE W-9 CERTIFICATION
I certify under penalty of perjury that: 1) the number 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 or
dividends; or c) the IRS has notified me that I am no longer subject to backup withholding.
You must cross out item 2 if you 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 PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
==================================================================================================================================
22. 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________________________________________________________________ On this Date ______________________________________
(City) (State)
X X
___________________________________________ ___________________________________________________________________
Signature of Insured Signature of owner (if corporation or trust, please show full name)
X
____________________________________________
Signature(s) and Trust Officer or Trustee(s)
==================================================================================================================================
23. AGENT'S/REGISTERED REPRESENTATIVE'S STATEMENT
Do you have any knowledge or reason to believe that replacement of existing life insurance or annuity coverage
may be involved? [ ] Yes [ ] No
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
_______________________________________________________________________________________________________________________
Print Name Here AVLIC Agent Code Agency or Broker/Dealer
==================================================================================================================================
</TABLE>
Page 5 of 5 Pages
<PAGE> 6
<TABLE>
<CAPTION>
==================================================================================================================================
<S><C>
24. MEDICALS Should be arranged by Agent/Registered Representative.
Indicate requirements being arranged per AVLIC published rules:
Resting Stress
Examination Urine Blood EKG EKG
Insured [ ] [ ] [ ] [ ] [ ]
Give name of examiner ______________________________________________________
Did you see Insured on the application date? [ ] Yes [ ] No
==================================================================================================================================
25. POLICY DELIVERY If not completed, policy will be mailed to Owner:
Send to: [ ] Owner [ ] Agent/Registered Representative
AGENT/REGISTERED REPRESENTATIVE REMARKS AND SPECIAL INSTRUCTIONS:
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________________
Third Party Administrator
_____________________________________________________________________________________________________
==================================================================================================================================
26. QUESTIONS??
If AVLIC has questions concerning this application, whom should we call at your office?
_________________________________________________________________________________________ at ( )____________________________
Name (Please Print)
FAX: ( )__________________________
If you have questions completing this application or any other supporting documentation, please call: 1-800-634-8353.
==================================================================================================================================
MAIL APPLICATION TO:
Ameritas Variable Life Insurance Company OVERNIGHT DELIVERIES:
P.O. Box 82550 Ameritas Variable Life Insurance Company
Lincoln, NE 68501-2550 5900 "O" Street
FAX#: 402-467-6153 Lincoln, NE 68510
==================================================================================================================================
</TABLE>
<PAGE> 7
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LOGO]
[AMERITAS VARIABLE LIFE INSURANCE COMPANY LETTERHEAD]
FAX APPLICATION COVER SHEET
AGENT/REPRESENTATIVE INFORMATION CLIENT INFORMATION
______________________________________ ______________________________________
Name Name
______________________________________ ______________________________________
Telephone Number Policy Number (if known)
______________________________________ ______________________________________
FAX Number Social Security Number
______________________________________ ______________________________________
Number of Pages Being Faxed Date
PRODUCT BEING APPLIED FOR: (Check one)
[ ] VUL [ ] Annuity [ ] WL [ ] Term [ ] UL [ ] Survivorship
ENCLOSURES: (Check all items to be faxed)
[ ] Application
[ ] Amount of check $____________ [ ] No check received with application
[ ] Illustration
[ ] Automatic Premium Payment form/Specimen Check
[ ] Replacement form
[ ] 1035 Exchange form (Includes Transfer/Rollover forms) mail originals
[ ] HIV Consent form
[ ] Terminal Illness Rider/Accelerated Death Benefit Disclosure
[ ] Third Party Administration Information
[ ] Optional Program form
[ ] Other (Please describe) ____________________________
[ ] Other (Please describe) ____________________________
[ ] Other (Please describe) ____________________________
Additional Comments/Instructions:
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE NOTE:
- DO NOT MAIL the original application.
- One application per fax transmission. FAX# (402) 467-6153
- Before faxing a copy of the check, write the insured's SSN & full name in
the memo portion of the initial premium check.
- Include a copy of this form with all mailed correspondence & indicate
policy number.
- Applications received after 3:00 PM CST will be processed the next
business day.
__________________________________________________________________________
Attach check here
__________________________________________________________________________
<PAGE> 8
* * * * IMPORTANT * * * *
Please detach top portion and leave with client if money accompanies the
application. Detach bottom portion and leave with client in ALL cases.
CONDITIONAL RECEIPT
1. NO COVERAGE WILL BECOME EFFECTIVE PURSUANT TO THIS CONDITIONAL RECEIPT UNLESS
AND UNTIL ALL OF THE FOLLOWING
CONDITIONS HAVE BEEN SATISFIED COMPLETELY AND EXACTLY:
a) The amount of payment received with this application must be equal to the
full initial modal premium for the amount and plan of life insurance
applied for and effective at the time of delivery of the policy.
b) All medical examinations, tests and related data required by the Company
must be completed and received at its Service Center in Lincoln, Nebraska
within sixty (60) days from the completion of this application.
c) As of the effective date below, each person proposed for insurance in this
application must be insurable in accordance with Company rules, limits,
and standards for the plan and the amount applied for without any
modifications either as to plan, amount, riders and/or the rate of premium
paid.
d) As of the effective date, the state of health and all factors affecting
the insurability of each person proposed for insurance must be as stated
in this application.
2. IF THE CONDITIONS OF PARAGRAPH 1 ARE SATISFIED ON THE EFFECTIVE DATE,
INSURANCE COVERAGE WILL BE PROVIDED PURSUANT TO THIS CONDITIONAL RECEIPT ON
THE SAME TERMS AND CONDITIONS AS THE POLICY APPLIED FOR AND IN USE ON THE
EFFECTIVE DATE. HOWEVER, THE AMOUNT OF SUCH INSURANCE WILL BE IN AN AMOUNT
NOT TO EXCEED THAT SPECIFIED IN PARAGRAPH 3. "EFFECTIVE DATE" AS USED HEREIN
IS THE LATEST OF:
a) The date of the application, Part 1; or
b) The date of the completion by Insureds of all medical examinations or
tests required by the Company; or
c) The date, if any, specifically requested in the application.
3. THE MAXIMUM TOTAL AMOUNT OF INSURANCE WHICH WILL BE PAYABLE PURSUANT TO ALL
CONDITIONAL RECEIPTS RECEIVED BY THE APPLICANT AS
A RESULT OF PENDING APPLICATIONS WITH THE COMPANY AND AFFILIATED COMPANIES IS
LIMITED TO THE SMALLER OF:
a) The total amount of insurance applied for with the Company and affiliated
Companies; or
b) $250,000 minus the total amount of insurance inforce with the Company and
affiliated Companies, but not less than zero.
As used above, total amount of insurance includes any amounts payable under
any Accidental Death Benefit provision.
If one or more of the conditions in paragraph 1 on any insured have not been
satisfied completely and exactly, there shall be no liability on the part of
the Company pursuant to this Conditional Receipt except to return the
applicable premium paid for coverage on that insured.
NOTICE OF AMERITAS VARIABLE LIFE INSURANCE
COMPANY'S (AVLIC) INSURANCE INFORMATION PRACTICES
To issue an insurance policy, we need to obtain information about you and any
other persons proposed for insurance. Some of that information will come from
you and some will come from other sources. That information and any subsequent
information collected by us may in certain circumstances be disclosed to third
parties without your specific authorization.
All insured persons have a right of access and correction with respect to the
information collected about himself or herself except information which relates
to a claim, or civil or criminal proceeding.
If you wish to have a more detailed explanation of our information practices,
please contact: AVLIC, Underwriting Department, P.O. Box 82550, Lincoln, NE
68501-2550.
In an effort to provide better service and products to you, AVLIC may use
information given by you to develop marketing data. Your name will not be
associated with this data in any way. If you do not want us to use information
obtained from you for these purposes, please contact us within ten (10) days. We
need to know within 10 days because once the information is separated from your
application, we will be unable to personally identify the information with you
or your application. The address at which to contact us is: AVLIC, P.O. Box
82550, Lincoln, NE 68501-2550.
Two of our sources of information about you are MIB, Inc. (Medical Information
Bureau) and Investigative Consumer Reports. The following paragraphs describe
these sources.
MIB, INC. (MEDICAL INFORMATION BUREAU)
Information regarding the Insured's insurability will be treated as
confidential. We or our reinsurers may, however, make a brief report thereon to
MIB, Inc., a non-profit membership organization of life insurance companies
which operates an information exchange on behalf of its members. If any of the
Insured(s) apply to another Bureau member company for life or health insurance
coverage, or a claim for benefits is submitted to such a company, the Bureau,
upon request, will supply such company with the information it may have in its
file.
Upon receipt of a request from any Insured (or the Parent or Guardian, if
juvenile), the Bureau will arrange disclosure of any information it may have in
the Insured's file. If there is a question as to the accuracy of information in
the Bureau's file, the Bureau may be contacted to seek a correction in
accordance with the procedures set forth in the federal Fair Credit Reporting
Act. The address of the Bureau's information office is P.O. Box 105, Essex
Station, Boston, MA 02112, telephone number (617) 426-3660.
We or our reinsurers may also release information in our file to other life
insurance companies to whom the Insured may apply for life or health insurance
or to whom a claim for benefits may be submitted.
MEDICAL AUTHORIZATION
The medical authorization on the application, or a photocopy of it, shall remain
valid for use by AVLIC for the duration of any claim for benefits.
<PAGE> 9
* * * * IMPORTANT * * * *
4. ANY INSURANCE IN EFFECT PURSUANT TO THIS CONDITIONAL RECEIPT WILL END AT THE
EARLIEST OF:
a) The date notice is mailed that the application is not accepted; or
b) At the end of sixty (60) days from the date of this Conditional Receipt;
or
c) The date on which coverage under the policy applied for becomes effective.
Note: Condition 4 (b) does not apply to Connecticut residents.
NO AGENT OR ANY OTHER PERSONS IS AUTHORIZED BY THE COMPANY TO WAIVE OR MODIFY
ANY OF THE PROVISIONS OF THIS CONDITIONAL RECEIPT.
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE INSURANCE COMPANY. DO NOT MAKE
CHECKS PAYABLE TO THE AGENT OR LEAVE THE PAYEE BLANK.
Received the sum of $_______ from _________________________ in connection with
the application for life insurance bearing the same date as this Conditional
Receipt.
Dated at _______________ this___________ date of _____________, 20___.
_______________________________________________
Signature of Agent/Registered Representative
I acknowledge possession of this receipt. I certify that I have read it and the
terms in the Application. I also certify that the Agent/Registered
Representative has explained the provisions in paragraph 3, other terms of this
Conditional Receipt and the terms in the Application to me and that I understand
and accept them.
_______________________________________________
Signature of Owner
* * * * IMPORTANT * * * *
THIS NOTICE MUST BE DETACHED AND LEFT WITH YOUR CLIENT IN ALL CASES.
INVESTIGATIVE CONSUMER REPORTS
Depending on the size of policy applied for, we may request that an
investigative consumer reports about the Insured be given to us. It will be
conducted by a national organization skilled in obtaining information about
people.
The kind of information we may be seeking includes such facts as residence
verification, marital status, occupation, general reputation, personal
characteristics and mode of living. It will be obtained through personal
interviews with the Insured's friends, neighbors, associates and other
acquaintances. Inquiries will not be directed toward determining the Insured's
sexual orientation. Also, no adverse underwriting decision will be made because
a report shows that an Insured has demonstrated AIDS-related concerns or has
sought AIDS-related counseling. AIDS test results received at anonymous
counseling and testing sites are confidential and need not be disclosed. Any
AIDS testing is limited to FDA-licensed blood tests and the diagnosis of AIDS
must be made by a member of the medical profession.
An Insured may ask to be interviewed in connection with the preparation of the
report by contacting us within 5 working days of applying for the insurance
requested. He or she may call us collect at the following number and ask for the
Underwriting Department: (402) 467-1122.
ADVERSE UNDERWRITING DECISION
After review of the application submitted on the Insureds, if the policy cannot
be issued as applied for, we will provide the specific reasons for this decision
upon written request from the applicant. Send your written request to the
Underwriting Department at the address above
<PAGE> 1
EXHIBIT 2.(a)(b)
Opinion and Consent of
Donald R. Stading
April 4, 2000
Ameritas Variable Life Insurance Company
5900 "O" Street
Lincoln, Nebraska 68510
Gentlemen:
With reference to the Pre-Effective Amendment to Registration No. 333-95163 on
Form S-6 filed by Ameritas Variable Life Insurance Company and Ameritas Variable
Life Insurance Company Separate Account V with the Securities and 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 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/ Donald R. Stading
- -----------------------------
Donald R. Stading
Secretary and General Counsel
<PAGE> 1
EXHIBIT 6.(a)(b)
Opinion and Consent of
Russell J. Wiltgen
April 4, 2000
Ameritas Variable Life Insurance Company
5900 "O" Street
Lincoln, Nebraska 68510
Gentlemen:
This opinion is furnished in connection with the registration by Ameritas
Variable Life Insurance Company of a flexible premium variable universal life
insurance policy ("Contract") under the Securities Act of 1933. The prospectus
included in the Pre-Effective Amendment to Registration Statement No. 333-95163
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 accumulation values included in
the section entitled "Illustrations of Death Benefits and Accumulation
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 a male age 45, 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 to the Registration Statement and to the reference to my name under
the heading "Experts" in the prospectus.
Sincerely,
/s/ Russell J. Wiltgen
- ----------------------------------------------
Russell J. Wiltgen
Vice President - Individual Product Management
<PAGE> 1
EXHIBIT 7
Consent of Deloitte & Touche LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-95163 of Ameritas Variable Life Insurance Company Separate
Account V of our reports dated February 5, 2000, on the financial statements of
Ameritas Variable Life Insurance Company and the subaccounts of Ameritas
Variable Life Insurance Company Separate Account V appearing in the Prospectus,
which is a part of such Registration Statement, and to the reference to us under
the heading "Experts" in such Prospectus.
/s/ Deloitte & Touche LLP
Lincoln, Nebraska
April 3, 2000
