As filed with the Securities and Exchange Registration No. 33-75248
Commission on February 24, 1998 Registration No. 811-4536
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 7 TO
REGISTRATION STATEMENT
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
- --------------------------------------------------------------------------------
Variable Life Account B of Aetna Life Insurance and Annuity Company
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
Depositor's Telephone Number, including Area Code: (860) 273-4686
- --------------------------------------------------------------------------------
Julie E. Rockmore, Counsel
Aetna Life Insurance and Annuity Company
151 Farmington Avenue, RE4A, Hartford, Connecticut 06l56
(Name and Complete Address of Agent for Service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[X] on May 1, 1998 pursuant to paragraph (a)(1) of Rule 485
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
<PAGE>
VARIABLE LIFE ACCOUNT B
OF
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Cross Reference Sheet
Form N-8B-2
Item No. Part I - Prospectus
1 Cover Page; The Separate Account; The Company
2 Cover Page; The Separate Account; The Company
3 Not Applicable
4 Cover Page; The Company; Additional Information -
Distribution of the Policies
5 The Separate Account; The Company
6 The Separate Account; The Company
7 Not Applicable
8 Financial Statements
9 Additional Information - Legal Matters
10 The Separate Account; Charges & Fees; Policy Choices; Policy
Values; Policy Rights; Additional Information; Miscellaneous
Policy Provisions
11 Allocation of Premiums; Policy Choices
12 Cover Page; Allocation of Premiums
13 Charges & Fees; Policy Choices; Term Insurance Rider;
Additional Information - Distribution of Policies
14 Policy Values; Miscellaneous Policy Provisions
15 Policy Summary; Allocation of Premiums - The Funds; Policy
Choices; Policy Values
16 Policy Summary; Allocation of Premiums - The Funds; Policy
Values
17 Policy Rights
18 Allocation of Premiums; Policy Choices; Policy Rights
19 Additional Information
20 Not Applicable
21 Policy Rights - Policy Loans:
22 Not Applicable
23 Directors and Officers
24 Miscellaneous Policy Provisions
25 The Company
26 Charges and Fees
27 The Company
<PAGE>
Form N-8B-2
Item No. Part I - Prospectus
28 Directors and Officers
29 The Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 The Company; Additional Information
36 Not Applicable
37 Not Applicable
38 Additional Information
39 See Item 25
40 See Item 26
41 See Item 27
42 See Item 28
43 Financial Statements
44 Policy Values - Accumulation Unit Value; Financial
Statements
45 Not Applicable
46 The Separate Accounts; Policy Values
47 The Separate Accounts; Allocation of Premiums; Policy
Choices; Policy Values
48 Not Applicable
49 Not Applicable
50 Not Applicable
51 Cover Page; Policy Choices; Policy Values
52 The Separate Account; Allocation of Premiums
53 Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
<PAGE>
Variable Life Account
B
Underwritten By:
Aetna Life Insurance and Annuity Company
151 Farmington Avenue
Hartford, Connecticut 06156
(800) 334-7586
Prospectus Dated May 1, 1998
The Flexible Premium Variable Universal Life Insurance Policies
The Policies offered in connection with this prospectus are Corporate
VUL and Corporate VUL II*, two flexible premium variable universal life
insurance policies ("Policies") offered by Aetna Life Insurance and
Annuity Company (ALIAC, the Company, we, us or our). The Policies are
intended to provide life insurance benefits. The Policies are designed
to allow flexible premium payments, a choice of underlying funding
options, and a choice from three Death Benefit Options. Your Policy's
cash value may vary with the investment performance of the underlying
funding options You choose. Policy cash value may be used to continue
Your Policy in force, may be borrowed within certain limits, and may be
fully or partially surrendered (subject to a surrender charge for
Corporate VUL). Corporate VUL offers a Guaranteed Death Benefit
provision through which the Policy can be guaranteed to stay in force by
paying certain premiums.
You may also choose to select one of the annuity settlement options upon
maturity of the Policy. Prior to maturity of the Policy, You may apply
the value of Your Policy minus the amount necessary to repay any loans
in full and, for Corporate VUL, minus any applicable surrender charges,
to one of the annuity settlement options. Upon death of the Insured, the
beneficiary will be paid (a) the value of the Death Benefit Option in
one lump sum, or (b) under one of the annuity settlement options.
The Policy has a Free-Look Period during which You may return it to our
Home Office for a refund. The refund may be more or less than the
premiums paid. (See "Right to Examine the Policy.")
It may not be advantageous to replace existing insurance or supplement
an existing flexible premium variable life insurance policy with a
Corporate VUL or Corporate VUL II Policy.
The Policies are available for purchase by corporations or other groups
where the individuals share a common employer or affiliation with the
group or sponsoring organization. Each Policy covers a single insured.
The Policyowner will have all rights and privileges under the Policy.
The Policies may be used for such purposes as funding non-qualified
executive deferred compensation or salary
i
<PAGE>
continuation plans. These Policies may be used by large corporations as
a means of funding death benefit liabilities incurred under executive
retirement plans or as a source for funding cash flow obligations under
such plans. The Policies are not designed to be used in an employer's
pension or profit sharing plan.
* The availability of Corporate VUL II is subject to state regulatory
approval. Once Corporate VUL II is available, Corporate VUL will no
longer be sold.
ii
<PAGE>
Variable Life
Account B
This prospectus is intended to describe the variable options used to
fund the Policies through the Separate Account. The variable funding
options (collectively, the "Funds") currently available through the
Separate Account are as follows:
[bullet] Aetna Variable Fund d/b/a Aetna Growth and Income VP
[bullet] Aetna Income Shares d/b/a Aetna Bond VP
[bullet] Aetna Balanced VP (Formerly Aetna Investment Advisers Fund,
Inc.)
[bullet] Aetna Variable Encore Fund d/b/a Aetna Money Market VP
[bullet] Aetna Value Opportunity VP (Formerly Aetna Variable Capital
Appreciation Portfolio.)
[bullet] Aetna Growth VP (Formerly Aetna Variable Growth Portfolio.)
[bullet] Aetna Index Plus Large Cap VP (Formerly Aetna Variable Index
Plus Portfolio.)
[bullet] Aetna Small Company VP (Formerly Aetna Variable Small Company
Portfolio.)
[bullet] Fidelity VIP Equity-Income Portfolio
[bullet] Fidelity VIP Growth Portfolio
[bullet] Fidelity VIP High Income Portfolio
[bullet] Fidelity VIP Overseas Portfolio
[bullet] Fidelity VIP II Asset Manager Portfolio
[bullet] Fidelity VIP II Contrafund Portfolio
[bullet] Janus Aspen Aggressive Growth Portfolio
[bullet] Janus Aspen Balanced Portfolio
[bullet] Janus Aspen Flexible Income Portfolio
[bullet] Janus Aspen Growth Portfolio
[bullet] Janus Aspen Worldwide Growth Portfolio
[bullet] MFS Total Return Series
[bullet] MFS World Governments Series
[bullet] Oppenheimer Aggressive Growth Fund (Formerly Oppenheimer
Capital Appreciation Fund)
[bullet] Oppenheimer Global Securities Fund
[bullet] Oppenheimer Growth & Income Fund
[bullet] Oppenheimer Strategic Bond Fund
[bullet] Portfolio Partners, Inc. MFS Emerging Equities Portfolio
[bullet] Portfolio Partners, Inc. MFS Research Growth Portfolio
[bullet] Portfolio Partners, Inc. MFS Value Equity Portfolio
[bullet] Portfolio Partners, Inc. Scudder International Growth Portfolio
[bullet] Portfolio Partners, Inc. T. Rowe Price Growth Equity Portfolio
The availability of the above Funds is subject to applicable regulatory
approvals. Not all Funds are available in all jurisdictions or under all
Policies. The Statement of Additional Information ("SAI") for any of the
Funds may be obtained by calling 800-334-7586.
Please read this prospectus carefully and retain it for future
reference.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT
PROSPECTUSES OF THE FUNDS.
iii
<PAGE>
THIS PROSPECTUS AND OTHER INFORMATION ABOUT VARIABLE LIFE ACCOUNT B
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE
FOUND IN THE SEC'S WEB SITE AT http://www.sec.gov.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
iv
<PAGE>
Table of Contents
Policy Definitions ..................................................... vii
Policy Summary ......................................................... 1
The Separate Account ................................................... 2
Allocation of Premiums ................................................. 3
Fixed Account ........................................................ 3
Separate Account ..................................................... 3
Mixed and Shared Funding ............................................. 7
Charges & Fees ......................................................... 8
Premium Load ......................................................... 8
Premium Load Refund................................................... 9
Premium Tax Charge....................................................10
Charges and Fees Assessed Against the Total Account Value ..............10
Charges and Fees Associated with the Variable Funding Options.........11
Surrender Charge- Corporate VUL only .................................11
Surrender Charges on Full and Partial Surrenders .....................12
Charges Assessed Against the Underlying Funds ..........................13
Reduction of Charges .................................................15
Policy Choices .........................................................16
Premium Payments .....................................................16
Guaranteed Death Benefit -Corporate VUL only..........................17
Life Insurance Qualification .........................................18
Death Benefit Options ................................................19
Transfers and Allocations to Funding Options .........................20
Policy Values ..........................................................21
Total Account Value ..................................................21
Accumulation Unit Value ..............................................21
Maturity Value .......................................................22
Surrender Value ......................................................22
Policy Rights ..........................................................23
Partial Surrenders ...................................................23
No Lapse Coverage -Corporate VUL only.................................24
Reinstatement of a Lapsed Policy .....................................24
Policy Loans..........................................................24
Policy Changes .......................................................26
Right to Examine the Policy ..........................................27
Death Benefit ..........................................................28
Policy Settlement ......................................................29
Settlement Options ...................................................29
Term Insurance Rider ...................................................33
The Company ............................................................34
Directors & Officers ...................................................35
Additional Information .................................................38
Reports to Policyowners ..............................................38
Right to Instruct Voting of Fund Shares ..............................38
Disregard of Voting Instructions .....................................39
State Regulation .....................................................39
Legal Matters ........................................................39
The Registration Statement ...........................................39
Distribution of the Policies .........................................40
Records and Accounts .................................................40
Independent Auditors .................................................41
Year 2000.............................................................41
v
<PAGE>
Tax Matters ............................................................42
General ..............................................................42
Federal Tax Status of the Company ....................................42
Life Insurance Qualification .........................................42
General Rules ........................................................43
Modified Endowment Contracts .........................................43
Diversification Standards ............................................44
Investor Control .....................................................44
Other Tax Considerations .............................................45
Misc. Policy Provisions ................................................47
The Policy............................................................47
Payment of Benefits ..................................................47
Age ..................................................................47
Incontestability .....................................................47
Suicide ..............................................................47
Coverage Beyond Maturity .............................................47
Nonparticipation .....................................................48
Appendix A -
Illustrations of Death Benefits, Total Account Values and Surrender
Values, Corporate VUL...................................................49
Appendix B-
Illustrations of Death Benefits, Total Account Values and Surrender
Values, Corporate VUL II................................................51
Financial Statements of the Separate Account ...........................
Financial Statements of the Company ....................................
vi
<PAGE>
Policy Definitions
Accumulated Premium: The sum of all premiums paid from the Date of Issue
accumulated at the Premium Accumulation Rate. The Accumulated Premium is
used with Death Benefit Option 3.
Accumulation Unit: A unit used to measure the value of a Policyowner's
interest in each applicable funding option used to calculate the value
of the variable portion of the Total Account Value before election of a
Settlement Option.
Additional Premiums: Any premium paid in addition to Planned Premiums.
Amount at Risk: The Death Benefit before subtraction of outstanding
loans, if any, divided by 1.0032737, minus the Total Account Value.
Annuity: A series of payments for life or for a definite period.
Attained Age: The Issue Age of the Insured increased by the number of
Policy Years elapsed.
Cost of Insurance: The portion of the Monthly Deduction attributable to
the basic insurance coverage, not including riders, supplemental
benefits or monthly expense charges.
Date of Issue: The effective date of initial coverage. The Date of
Issue and the effective date for any change in coverage will be the
Date of Coverage Change shown in Supplemental Policy Specifications
which will be sent to You. Coverage is conditional on payment of the
first premium, if required, and issue of the Policy as provided in the
application.
Death Benefit: The amount payable in accordance with the Death Benefit
Option chosen to the beneficiary upon the death of the Insured, after
deduction of the Loan Account Value plus any accrued interest and any
overdue deductions.
Death Benefit Option: Any of three methods for determining the Death
Benefit.
Fixed Account: The fixed interest option offered under the Policy that
guarantees a minimum interest rate of 4.0% per year.
Fixed Account Value: The non-loaned portion of this Policy's Total
Account Value attributable to the non-variable portion of the Policy.
The Fixed Account Value is held in the General Account.
Fund(s): One or more of the underlying funding options available under
the Policy (as described in this Prospectus). Each of the Funds is an
open-end management investment company whose shares are available to
fund the benefits provided by the Policy.
General Account: The Company's general asset account, in which assets
attributable to the non-variable portion of Policies are held, i.e., the
Loan Account Value and the Fixed Account Value.
vii
<PAGE>
Grace Period: The 61-day period beginning on the Monthly Deduction Day
on which the Policy's Surrender Value is insufficient to cover the
current Monthly Deduction. The Policy will terminate without value at
the end of the 61-day period unless a sufficient payment described in
the notification letter is received by the Company.
Guaranteed Death Benefit Premium: Corporate VUL only - A specified
premium that, if paid, will keep the Policy in force to attained age 80
or 100, even if the Surrender Value is insufficient to cover current
monthly deductions
Home Office: The principal executive office of the Company, located at
151 Farmington Avenue, Hartford, Connecticut.
Insured: The person on whose life the Policy is issued.
Issue Age: Corporate VUL-The Insured's age on his/her birthday on or
prior to the Policy's Date of Issue. Corporate VUL II- The Insured's age
on his/her birthday closest to the Policy's Date of Issue.
Loan Account Value: An amount equal to the sum of all unpaid loans. The
Loan Account Value does not include interest accrued since the last
Policy anniversary. Such interest is payable in order to discharge any
policy indebtedness.
Maturity Date: The Policy anniversary on which the Insured reaches
Attained Age 100.
Maturity Value: The Total Account Value on the Maturity Date, less Loan
Account Value plus any accrued interest.
Minimum Monthly Premium: Corporate VUL only -The amount of premium
which must be paid to assure that the Policy remains in force for at
least five years after issue, assuming there have been no loans or
surrenders.
Monthly Deduction: The Monthly Deduction from the Total Account Value
which includes the Cost of Insurance, charges for supplemental riders or
benefits, and an administrative expense charge. The Monthly Deduction
Day is the day that the deduction is actually taken.
Net Premium: Corporate VUL- The premium paid, less the premium load.
Corporate VUL II- The premium paid, less the premium load, less a
Premium Tax Charge.
Nonpreferred Loan: Corporate VUL only-Loans taken in the first ten
Policy Years, and beginning in the eleventh Policy Year, loans taken in
excess of the Preferred Loan Amount.
Planned Premium: The amount of premium the Policyowner chooses to pay
the Company on a scheduled basis. This is the amount for which the
Company sends a bill.
Policy(ies): The life insurance contracts described in this prospectus.
Policyowner: The owner of the Policy, referred to as "You."
viii
<PAGE>
Policy Year: Each twelve-month period, beginning on the Date of Issue,
during which the Policy is in effect.
Preferred Loan Amount: Corporate VUL only-A portion of the maximum loan
amount available beginning in the eleventh Policy Year at zero net cost
to the Policyowner. The Preferred loan is the amount taken.
Premium Accumulation Rate: The annual rate at which premiums paid will
be accumulated to determine the Death Benefit if Death Benefit Option 3
is selected. This rate is chosen by You at issue. Any amount requested
in excess of 10% may be subject to additional underwriting.
Premium Tax Charge: A charge equal to the state and municipal taxes
associated with premiums received.
Separate Account(s): Variable Life Account B (and Variable Annuity
Account B when referring to a Settlement Option).
Separate Account Value: The portion of the Policy's Total Account Value
attributable to the variable portion of the Policy. The Separate Account
Value is held in Variable Life Account B.
Settlement Option(s): The manner in which a beneficiary may receive
Annuity payments due from a Death Benefit, if elected upon Maturity, or
which the insured may choose to receive Annuity payments from the
Surrender Value of the Policy.
Specified Amount: The amount, originally chosen by the Policyowner, used
in determining the Death Benefit. It is initially equal to the Death
Benefit. The Specified Amount may be increased or decreased as described
in this prospectus.
Surrender Charge: Corporate VUL only-The amount retained by the Company,
upon the full or partial surrender of the Policy.
Surrender Value: The amount a Policyowner can receive in cash by
surrendering the Policy. This equals the Total Account Value (minus the
applicable surrender charge for Corporate VUL) the Loan Account Value
and any accrued interest, plus any credit for premium loads paid.
Target Face Amount: Generally, the Policy's Death Benefit. If a Term
Insurance Rider is attached to the Policy, the Target Face Amount is the
Term Insurance Rider's Benefit Amount plus the Policy's Death Benefit
which is dependent upon the Death Benefit Option in effect.
Target Premium: A premium amount set by the Company to determine the
amount of compensation it pays for Policy distribution.
Total Account Value: The sum of the Fixed Account Value, Separate
Account
ix
<PAGE>
Value and the Loan Account Value.
Valuation Period: The period of time from when the Company determines
the Accumulation Unit Value and Settlement Option Unit Value of a
variable investment option until the next time it determines such unit
value. Currently, the calculation occurs after the close of business of
the New York Stock Exchange on any normal business day, Monday through
Friday, that the New York Stock Exchange is open.
Variable Life Account B: A Separate Account of the Company established
for the purpose of segregating assets attributable to the variable
portion of life insurance contracts from other assets of the Company. It
is organized as a unit investment trust.
x
<PAGE>
Policy Summary
The Policies offered in connection with this Prospectus are known as
Corporate VUL and Corporate VUL II, flexible premium variable universal
life insurance Policies. The availability of Corporate VUL II is subject
to state regulatory approval. Proceeds as described in the Policies will
be paid upon surrender, maturity, or death of the Insured.
At the time of purchase, You must choose from three Death Benefit
Options. The amount payable under the option chosen will be determined
as of the date of the Insured's death. (See "Death Benefit Options.")
Also at the time of purchase, You must choose which life insurance
qualification method bests suits Your needs. Cash Value Accumulation or
Guideline Premium. Both methods require a Policy to provide minimum
ratios of life insurance coverage to Total Account Value. (See "Life
Insurance Qualification.")
The Corporate VUL Policy also offers a Guaranteed Death Benefit
provision (may not be available in all states) which ensures that the
Policy will stay in force even if the Surrender Value is insufficient to
cover the current monthly deductions due to fund performance. For
Corporate VUL, sufficient premiums must be paid in order to maintain a
Guaranteed Death Benefit to Age 80 or 100. (See "Guaranteed Death
Benefit.")
At the time of purchase, You must also choose the amount of premium You
intend to pay. You may vary premium payments to some extent and still
keep Your Policy in force. However, sufficient premiums must be paid to
continue the Policy and premium reminder notices will be sent for
planned premiums and for premiums required to continue this Policy in
force. If this Policy lapses it may be reinstated as discussed in
Reinstatement of a Lapsed Policy.
You must also choose how to allocate Net Premiums. Net Premiums
allocated to the Separate Account must be allocated to one or more
Funds, and allocations must be in whole percentages. The variable
portion of this Policy is supported by the Funds You choose. The Fund
value in each Fund is not guaranteed and will vary with the investment
performance of that Fund.
If the Fixed Account is selected, the Fixed Account Value will
accumulate at rates of interest we determine. Such rates will not be
less than 4.0% a year.
1
<PAGE>
The Separate Account
The Separate Account established for the purpose of providing Variable
Options to fund the Policy is Variable Life Account B. Amounts allocated
to the Separate Account are invested in the Funds. Each of the Funds is
an open-end management investment company whose shares are purchased by
the Separate Account to fund the benefits provided by the Policy. The
Funds currently available under the Separate Account, including their
investment objectives and their investment advisers, are described in
this Prospectus. Complete descriptions of the Funds' investment
objectives and restrictions and other material information relating to
an investment in the Funds are contained in the prospectuses for each of
the Funds which accompany this Prospectus.
Variable Life Account B was established pursuant to a June 18, 1986,
resolution of the Board of Directors of the Company. Under Connecticut
insurance law, the income, gains or losses of the Separate Account are
credited without regard to the other income, gains or losses of the
Company. These assets are held for the Company's variable life insurance
policies. Any and all distributions made by the Funds with respect to
shares held by the Separate Account will be reinvested in additional
shares at net asset value. The assets maintained in the Separate Account
will not be charged with any liabilities arising out of any other
business conducted by the Company. The Company is, however, responsible
for meeting the obligations of the Policy to the Policyowner.
No stock certificates are issued to the Separate Account for shares of
the Funds held in the Separate Account. Ownership of Fund shares is
documented on the books and records of the Funds and of the Company for
the Separate Account.
The Separate Account is registered with the Securities and Exchange
Commission ("SEC") as a unit investment trust under the Investment
Company Act of 1940 and meets the definition of separate account under
the federal securities laws. Such registration does not involve any
approval or disapproval by the SEC of the Separate Account or the
Company's management or investment practices or policies. The Company
does not guarantee the Separate Account's investment performance.
2
<PAGE>
Allocation of Premiums
You may allocate all or a part of Your Net Premiums to the Fixed
Account (part of the Company's General Account) or to the Funds
currently available through the Separate Account in connection with the
Policy. Not all funds may be available under all Policies or in all
jurisdictions. In addition, the Company may add, withdraw or substitute
Funds, subject to the conditions in the Contract and to compliance with
regulatory requirements.
The investment results of the Funds, whose objectives are described
below, are likely to differ significantly. You should consider
carefully, and on a continuing basis, which Fund or combination of
Funds is best suited to Your long-term investment objectives. Except
where otherwise indicated, all of the Funds are diversified, as defined
in the Investment Company Act of 1940, as amended.
In states which require a full refund of premiums during the Right of
Policy Examination period (see "Right to Examine the Policy"), the
first Net Premium will be allocated in its entirety to Aetna Money
Market VP, regardless of the policy owner's premium allocation
percentages until the day following the expiration of the Right of
Policy Examination period. Any other Net Premium received prior to that
day will also be allocated to Aetna Money Market VP. On the day
following the expiration of the Right of Policy Examination, the policy
value and future Net Premiums will be allocated in accordance with the
policy owner's selected premium allocation percentages.
If the policy is issued, any monies received prior to policy issue will
be credited with the return attributable to Aetna Money Market VP from
the date of receipt until the day the policy is issued or, for states
which require the full premium refund, until the day following the
Right of Policy Examination period on the issued policy.
Fixed Account
Amounts held in the Fixed Account will be credited with interest at
rates of not less than 4.0% per year. Additional excess interest of up
to 0.5% may be credited to the Fixed Account Value beginning in Policy
Year 11. Credited interest rates reflect the Company's return on Fixed
Account invested assets and the amortization of any realized gains
and/or losses which the Company may incur on these assets.
Separate Account
[bullet] Aetna Variable Fund d/b/a Aetna Growth and Income VP seeks to maximize
total return through investments in a diversified portfolio of common
stocks and securities convertible into common stock. (1)
[bullet] Aetna Income Shares d/b/a Aetna Bond VP seeks to maximize total return,
consistent with reasonable risk, through investments in a diversified
portfolio of debt securities. (1)
[bullet] Aetna Variable Encore Fund d/b/a Aetna Money Market VP seeks to provide
a high level of current income consistent with the preservation of
capital and liquidity, primarily through investments in high quality
money market instruments. An investment in the Fund is neither insured
nor guaranteed by the U.S.
3
<PAGE>
Government. (1)
[bullet] Aetna Balanced VP (Formerly Aetna Investment Advisers Fund, Inc.) is a
managed fund which seeks to maximize investment return consistent with
reasonable safety of principal by investing in one or more of the
following asset classes: stocks, bonds and cash equivalents based on
the Company's judgment of which of those sectors or mix thereof offers
the best investment prospects. (1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP (Formerly
Aetna Variable Capital Appreciation Portfolio) seeks growth of capital
primarily through investment in a diversified portfolio of common
stocks and securities convertible into common stocks. The Portfolio
will use a value-oriented approach in an attempt to outperform the
total return performance of publicly traded common stocks represented
by the S&P 500 Composite Stock Price Index ("S&P 500"), a broad based
stock market index composed of 500 common stocks selected by the
Standard & Poor's Corporation. The Portfolio uses the S&P 500 as a
comparative benchmark because it represents approximately
two-thirds of the total market value of all U.S. common stocks, and
is well known to investors. (1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Growth VP (Formerly Aetna
Variable Growth Portfolio) seeks growth of capital through investment
in a diversified portfolio of common stocks and securities convertible
into common stocks believed to offer growth potential.(1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP
(Formerly Aetna Variable Index Plus Portfolio) seeks to outperform
the total return performance of publicly traded common stocks
represented by the S&P 500. (1)
[bullet] Aetna Variable Portfolios, Inc.--Aetna Small Company VP (Formerly Aetna
Variable Small Company Portfolio) seeks growth of capital primarily
through investment in a diversified portfolio of common stocks and
securities convertible into common stocks of companies with smaller
market capitalizations. Companies with smaller market capitalizations
generally will have market capitalization at the time of purchase of $1
billion or less. (1)
[bullet] Fidelity Investments Variable Insurance Products Fund -- Equity-Income
Portfolio seeks reasonable income by investing primarily in
income-producing equity securities. In choosing these securities, the
Fund will also consider the potential for capital appreciation. (2)
[bullet] Fidelity Investments Variable Insurance Products Fund -- Growth
Portfolio seeks to achieve capital appreciation by investing primarily
in common stock, although the Fund is not limited to any one type of
security. (2)
[bullet] Fidelity Investments Variable Insurance Products Fund--High Income
Portfolio seeks to obtain a high level of current income by investing
primarily in high-yielding, lower-rated, fixed income securities, while
also considering growth of capital. Lower-rated corporate debt
obligations are commonly known as "junk bonds" or "high yield, high
risk bonds" and involve significant degree of risk (see the Fund's
prospectus for a discussion of the risk factors involved in investing
in lower-rated corporate debt obligations). (2)
[bullet] Fidelity Investments Variable Insurance Products Fund -- Overseas
Portfolio seeks long-term growth of capital primarily through
investments in foreign securities (at least 65% from at least three
countries outside of North America). Foreign
4
<PAGE>
investments involve greater risks than U.S. investments, including
political and economic risks and the risk of currency fluctuation. (2)
[bullet] Fidelity Investments Variable Insurance Products Fund II -- Asset
Manager Portfolio seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks,
bonds and short-term fixed income instruments. (2)
[bullet] Fidelity Investments Variable Insurance Products Fund II -- Contrafund
Portfolio seeks maximum total return over the long term by investing
its assets mainly in equity securities of companies that are
undervalued or out-of-favor. (2)
[bullet] Janus Aspen Series -- Aggressive Growth Portfolio is a nondiversified
portfolio that seeks long-term growth of capital. The Portfolio pursues
its investment objective by normally investing at least 50% of its
equity assets in securities issued by medium-sized companies.
Medium-sized companies are those whose market capitalizations fall
within the range of companies in the S&P MidCap 400 Index, which as of
December 31, 1997 included companies with capitalizations between
approximately $XX million and $XX billion, but which is expected to
change on a regular basis. (3)
[bullet] Janus Aspen Series -- Balanced Portfolio seeks long-term capital growth
consistent with preservation of capital and balanced by current income.
The Portfolio pursues its investment objective by, under normal
circumstances, investing 40%-60% of its assets in securities selected
primarily for their growth potential and 40%-60% of its assets in
securities selected primarily for their income potential. (3)
[bullet] Janus Aspen Series--Flexible Income Portfolio seeks to obtain maximum
total return, consistent with preservation of capital. Total return is
expected to result from a combination of current income and capital
appreciation. The Portfolio invests in all types of income producing
securities and may have substantial holdings of debt securities rated
below investment grade (e.g., junk bonds). (3)
[bullet] Janus Aspen Series -- Growth Portfolio seeks long-term growth of
capital in a manner consistent with preservation of capital. The
Portfolio pursues its objective by investing in common stocks of
companies of any size. (3)
[bullet] Janus Aspen Series -- Worldwide Growth Portfolio seeks long-term growth
of capital consistent with the preservation of capital. The Portfolio
pursues its investment objective primarily through investments in
common stocks of foreign and domestic issuers. (3)
[bullet] MFS Total Return Series seeks to provide above-average income (compared
to a portfolio invested entirely in equity securities) consistent with
the prudent employment of capital. Its secondary objective is to
provide a reasonable opportunity for growth of capital and income.
Under normal market conditions, at least 25% of the Total Return
Series' assets will be invested in fixed income securities, and at
least 40% and no more than 75% of the Series' assets will be invested
in equity securities. (4)
[bullet] MFS World Governments Series seeks not only preservation, but also
growth of capital, together with moderate current income. The Series
seeks to achieve its objective through a professionally managed,
internationally diversified portfolio consisting primarily of debt
securities and to a lesser extent equity securities. Consistent with
its investment objective and policies, the Series may invest up to 100%
(and generally expects to invest not more than 80%) of its net assets
in
5
<PAGE>
foreign securities which are not traded on a U.S. exchange. (4)
[bullet] Oppenheimer Aggressive Growth Fund (Formerly Oppenheimer Capital
Appreciation Fund) seeks to achieve capital appreciation by investing
in "growth-type" companies. (5)
[bullet] Oppenheimer Global Securities Fund seeks long-term capital appreciation
by investing a substantial portion of its assets in securities of
foreign issuers, "growth-type" companies, cyclical industries and
special situations which are considered to have appreciation
possibilities. Current income is not an objective. These securities may
be considered to be speculative. (5)
[bullet] Oppenheimer Growth & Income Fund seeks a high total return (which
includes growth in the value of its shares as well as current income)
from equity and debt securities. From time to time this Fund may focus
on small to medium capitalization common stocks, bonds and convertible
securities. (5)
[bullet] Oppenheimer Strategic Bond Fund seeks a high level of current income
principally derived from interest on debt securities and seeks to
enhance such income by writing covered call options on debt securities.
The Fund intends to invest principally in: (i) foreign government and
corporate debt securities, (ii) U.S. Government securities, and (iii)
lower-rated high yield domestic debt securities, commonly known as
"junk bonds", which are subject to a greater risk of loss of principal
and nonpayment of interest than higher-rated securities. These
securities may be considered to be speculative. (5)
[bullet] Portfolio Partners, Inc.--MFS Emerging Equities Portfolio seeks
long-term growth of capital by investing primarily in common stocks
issued by companies that its subadviser believes are early in their
life cycle but which have the potential to become major enterprises
(emerging growth companies). (6)
[bullet] Portfolio Partners, Inc.--MFS Research Growth Portfolio seeks long-term
growth of capital and future income by investing primarily in common
stocks or securities convertible into common stocks issued by companies
that the subadviser believes to possess better-than-average prospects
for long-term growth, and, to a lesser extent, in income-producing
securities including bonds and preferred stock. (6)
[bullet] Portfolio Partners, Inc.--MFS Value Equity Portfolio seeks capital
appreciation by investing primarily in common stocks. (6)
[bullet] Portfolio Partners, Inc.--Scudder International Growth Portfolio seeks
long-term growth of capital primarily through a diversified portfolio
of marketable foreign equity securities. (7)
[bullet] Portfolio Partners, Inc.--T. Rowe Price Growth Equity Portfolio seeks
long-term growth of capital and, secondarily, seeks to increase
dividend income by investing primarily in common stocks issued by a
diversified group of well-established growth companies. (8)
Investment Advisers for each of the Funds:
(1) Aeltus Investment Management, Inc.
(2) Fidelity Management & Research Company
(3) Janus Capital Corporation
(4) Massachusetts Financial Services Company ("MFS")
(5) OppenheimerFunds, Inc.
(6) Aetna Life Insurance and Annuity Company (adviser);
Massachusetts Financial Services Company ("MFS")(sub-adviser
(7) Aetna Life Insurance and Annuity Company (adviser);
Scudder, Stevens & Clark, Inc. (sub-adviser)
(8) Aetna Life Insurance and Annuity Company (adviser);
T. Rowe Price Associates, Inc. (sub-adviser)
The availability of the Funds listed above is subject to applicable
regulatory approvals. Not all Funds are available in all jurisdictions
or under all Policies.
6
<PAGE>
There is no assurance that the Funds will achieve their investment
objectives. Policyowners bear the full investment risk of investments in
the Funds selected.
Some of the above Funds may use instruments known as derivatives as part
of their investment strategies, as described in their respective
prospectuses. The use of certain derivatives such as inverse floaters
and principal only debt instruments may involve higher risk of
volatility to a Fund. The use of leverage in connection with derivatives
can also increase risk of losses. See the prospectus for the Funds for a
discussion of the risks associated with an investment in those funds.
You should refer to the accompanying prospectuses of the Funds for more
complete information about their investment policies and restrictions.
Mixed and Shared Funding
Shares of the Funds are available to insurance company separate accounts
which fund variable annuity contracts and variable life insurance
policies, including the Policies described in this Prospectus. Because
Fund shares are offered to separate accounts of both affiliated and
unaffiliated insurance companies, it is conceivable that, in the future,
it may not be advantageous for variable life insurance separate accounts
and variable annuity separate accounts to invest in these Funds
simultaneously, since the interests of such Policyowners or
contractholders may differ. Although neither the Company nor the Funds
currently foresees any such disadvantages either to variable life
insurance or to variable annuity Policyholders, each Fund's Board of
Trustees/Directors has agreed to monitor events in order to identify any
material irreconcilable conflicts which may possibly arise and to
determine what action, if any, should be taken in response thereto. If
such a conflict were to occur, one of the separate accounts might
withdraw its investment in a Fund. This might force that Fund to sell
portfolio securities at disadvantageous prices.
7
<PAGE>
Charges & Fees
Premium Load
The premium load is deducted from your premium payments. This load
represents administrative expenses associated with the startup and
maintenance of a Policy, and, for Corporate VUL, includes average
applicable state premium taxes. The Company is responsible for payment
of premium taxes and other amounts payable with respect to Your premium
payments to the extent they exceed the premium load. DAC taxes are paid
by the Company.
Corporate VUL
1. Guaranteed Premium Load
The premium load is guaranteed to be no higher than the amounts
shown in the following table.
Premiums Paid up to the Premiums Paid over the
first year's Guaranteed Death first year's Guaranteed Death
Benefit Premium Benefit Premium
Policy Year(s) to age 80 to age 80
- -------------- ----------------------------- -----------------------------
1 10% 5%
2 and after 5% 5%
2. Current Premium Load
The premium load is currently set at the amounts shown in the
following table.
Premiums Paid up to the Premiums Paid over the
first year's Guaranteed Death first year's Guaranteed Death
Benefit Premium Benefit Premium
Policy Year(s) to age 80 to age 80
- -------------- ----------------------------- -----------------------------
1 7% 2%
2 and after 2% 2%
8
<PAGE>
Corporate VUL II (availability subject to state regulatory approval)
1. Guaranteed Premium Load
The premium load is guaranteed to be no higher than the amounts
shown in the following table.
Premiums Paid up to Premiums Paid greater than
Target Premium- Target Premium-
load is this percentage of load is this percentage of
Policy Year(s) premium premium
- -------------- -------------------------- --------------------------
1 15% 6%
2-5 10% 6%
6 and after 6% 6%
2. Current Premium Load
The premium load charge is currently set at the amounts shown in
the following table.
Premiums Paid up to Premiums Paid greater than
Target Premium - Target Premium -
load is this percentage of load is this percentage of
Policy Year(s) premium premium
- -------------- -------------------------- --------------------------
1 10.5% 2.5%
2-5 7.5% 1.5%
6-7 3.5% 1.5%
8 and after 1.5% 1.5%
Premium Load Refund
Upon a full surrender of Your Policy within the first 36 months of the
Policy for Corporate VUL and first 24 months for Corporate VUL II if
Your Policy is not in default you may be entitled to a credit for some
or all of the premium loads which have been deducted from your premium
payments although a Surrender Charge will also apply for Corporate VUL.
To determine the Surrender Value during the premium load refund period
the Total Account Value will be reduced by the applicable Surrender
Charge (Corporate VUL only) and the amount of any Loan Account Value,
including accrued interest. That amount would be increased by the
applicable credit for the premium load. For Corporate VUL II, a decrease
in the specified amount in Policy Years 1 or 2 will proportionately
decrease the amount of the premium load refund.
9
<PAGE>
Calculation of the Premium Load Refund Amount
Corporate VUL
For Policies which are surrendered during the first twelve months after
the Date of Issue, the credit will be the sum of all premium loads
deducted. For Policy Months 13 through 36, the credit will be equal to
the sum of all premium loads deducted since the Date of Issue multiplied
by twelve and then divided by the number of Policy Months since the Date
of Issue of the Policy. For example, during Policy Month 24, the credit
would be equal to the total of all premium loads deducted since the Date
of Issue multiplied by 12/24, or half of all premium loads paid. No
credits apply if a Policy is in default.
Corporate VUL II
For Policies surrendered during the first twelve months after the Date
of Issue, the refund is 7% of premium paid in the first Policy Year up
to the Target Premium and 3% of premium paid in the first Policy Year
above Target Premium. For months 13 through 24, the refund is 75% of the
first Policy Year refund amount.
Premium Tax Charge
For Corporate VUL II, except as noted below, an amount equal to the
state and municipal taxes associated with premiums received is deducted
from premium payments. However, for Policies issued or delivered in New
York, this charge is currently 1.75% and is guaranteed not to exceed 5%
of premium received.
Charges and Fees Assessed Against the Total Account Value
A Monthly Deduction is made from the Total Account Value. The Monthly
Deduction is made as of the same day each month, beginning with the
Date of Issue. The Monthly Deduction includes the Cost of Insurance
and any charges for supplemental riders or benefits. The Cost of
Insurance for Corporate VUL depends on the Attained Age, risk class of
the Insured and Specified Amount. For Corporate VUL II, the Cost of
Insurance depends on the Issue Age, risk class of the Insured and the
number of Policy Years elapsed and Specified Amount of the Policy.
Once a Policy is issued, Monthly Deductions, including Cost of Insurance
charges, will begin as of the Date of Issue, even if the Policy's
issuance was delayed due to underwriting requirements, and will be in
amounts based on the Specified Amount of the Policy issued, even if the
temporary insurance coverage received during the underwriting period was
for a lesser amount.
The Monthly Deduction also includes a monthly administrative expense
charge during all Policy Years as follows:
Corporate VUL-$7
Corporate VUL II-$6 currently, guaranteed not to exceed $10.
The monthly administrative expense charge is for items such as premium
billing and collection, Policy value calculation, confirmations and
periodic reports and will not exceed our costs. The Monthly Deduction is
deducted proportionately from each funding option, if more than one is
used. This is accomplished by liquidating Accumulation Units and
withdrawing the value of the liquidated Accumulation Units from each
funding option in the same proportion as their respective values have to
Your Fixed Account and Separate
10
<PAGE>
Account Values.
Charges and Fees Associated with the Variable Funding Options
The Company deducts a daily charge from the assets of Variable Life
Account B for mortality and expense risks assumed by it in connection
with the Policy.
The amount of this charge is a percentage of the average daily net
assets of the Separate Account based on Policy Years as follows.
1. Corporate VUL
Policy Years Percentage of Separate Account Average Daily
Net Assets
1-10 0.70%
11 and later 0.20%
2. Corporate VUL II
Policy Years Percentage of Separate Account Average Daily
Net Assets
1-10 0.70%
11 and later 0.35%
The mortality and expense risk charge is assessed to compensate the
Company for assuming certain mortality and expense risks under the
Policies. The Company reserves the right to increase the mortality and
expense risk charge if it believes that circumstances have changed so
that current charges are no longer adequate. In no event will the charge
exceed 0.90% of average daily net assets on an annual basis.
Administrative Charge-Corporate VUL only
The Company also deducts a daily administrative charge equivalent on an
annual basis to 0.30% of the average daily net assets of Variable Life
Account B to compensate the Company for expenses associated with the
administration and maintenance of the Policies. These types of expenses
are described above in connection with the monthly administrative
charge. The daily administrative charge and the monthly administrative
charge work together to cover the Company's administrative expenses. In
later years of the Policy, the revenue collected from the daily
asset-based charge grows with the Total Account Value to cover increased
expenses from Account-based transactional expenses. The daily
administrative charge is guaranteed not to exceed 0.50% of the average
daily net assets of the Separate Account on an annual basis.
Surrender Charge-Corporate VUL only
If You surrender Your Policy (in whole or in part) a surrender charge
may apply, as described below.
This charge is imposed in part as a deferred sales charge and in part to
enable the Company to recover certain first year administrative costs.
The maximum portion of the Surrender Charge applied to reimburse the
Company for sales and promotional expense is 30% of the first year's
Minimum Monthly Premium. (Any surrenders may result in tax implications;
see "Tax Matters.")
The initial Surrender Charge, as specified in Your Policy, is based on
the Specified
11
<PAGE>
Amount. It also depends on the Insured's Attained Age and risk class.
Once determined, the Surrender Charge will decrease annually until it
reaches zero after nine years.
If You increase the Specified Amount, a new Surrender Charge will be
applicable, in addition to the then existing Surrender Charge. This
charge will be determined based on the Insured's Attained Age and risk
class. The Surrender Charge applicable to the increase will be equal to
the Surrender Charge on a new Policy whose Specified Amount equals the
amount of the increase, and will cover administrative expenses. The
additional surrender charge will also decrease annually until it reaches
zero after nine years.
If You decrease the Specified Amount while the Surrender Charge applies,
the Surrender Charge will remain the same as it was before the decrease.
Based on its actuarial determination, the Company does not anticipate
that the Surrender Charge will cover all sales and administrative
expenses which the Company will incur in connection with the Policy. Any
such shortfall, including but not limited to payment of sales and
distribution expenses, would be charged to and paid by the Company.
Surrender Charges on Full and Partial Surrenders
Full Surrender: All applicable Surrender Charges are imposed.
Partial Surrender: A proportional percentage of all Surrender Charges is
imposed. The proportional percentage is the amount of the net partial
surrender divided by the sum of the Fixed Account Value and the Separate
Account Value less full Surrender Charges. When a partial surrender is
made, any applicable remaining Surrender Charges will be reduced in the
same proportion.
No surrender charge applies to Corporate VUL II.
12
<PAGE>
Charges Assessed Against the Underlying Funds
The following table illustrates the investment advisory fees, other
expenses and total expenses paid by each of the Funds as a percentage of
average net assets based on figures for the year ended December 31,
1997:
<TABLE>
<CAPTION>
Investment
Advisory Fees(1) Other Expenses Total Fund
(after expense (after expense Annual
reimbursement) reimbursement) Expenses
<S> <C> <C> <C>
Aetna Balanced VP (2)
Aetna Bond VP(2)
Aetna Growth VP(2)
Aetna Growth and Income VP(2)
Aetna Index Plus Large Cap VP(2)
Aetna Money Market VP(2)
Aetna Value Opportunity VP(2)
Aetna Small Company VP(2)
Fidelity VIP Equity-Income Portfolio(3)
Fidelity VIP Growth Portfolio(3)
Fidelity VIP High Income Portfolio
Fidelity VIP Overseas Portfolio(3)
Fidelity VIP II Asset Manager Portfolio(3)
Fidelity VIP II Contrafund Portfolio(3)
Janus Aspen Aggressive Growth Portfolio(4)
Janus Aspen Balanced Portfolio(4)
Janus Aspen Flexible Income Portfolio
Janus Aspen Growth Portfolio(4)
Janus Aspen Worldwide Growth Portfolio(4)
MFS Total Return Series(5)
MFS World Governments Series(5)
Oppenheimer Aggressive Growth Fund
Oppenheimer Global Securities Fund
13
<PAGE>
Oppenheimer Growth & Income Fund
Oppenheimer Strategic Bond Fund
Portfolio Partners Inc., MFS Emerging
Equities Portfolio(6)(7)
Portfolio Partners Inc., MFS Research Growth
Portfolio(6)(7)
Portfolio Partners Inc., MFS Value Equity
Portfolio(6)
Portfolio Partners Inc., Scudder
International Growth Portfolio(6)
Portfolio Partners Inc., T. Rowe Price
Growth Equity Portfolio(6)
</TABLE>
(1) Certain of the Fund advisers reimburse the Company for administrative costs
incurred in connection with administering the Funds as variable funding
options under the Contract. These reimbursements are paid out of the
investment advisory fees and are not charged to investors.
(2) The Portfolios' Investment Adviser has agreed to waive a portion of its fee
or to reimburse the Portfolios for certain expenses so that aggregate
expenses do not exceed the following percentage of each Portfolios net
assets: XX% for Aetna Balanced VP: XX% for Aetna Bond VP; XX% for Aetna
Growth VP; XX% for Aetna Growth and Income VP; XX% for Aetna Index Plus
Large Cap VP; XX% for Aetna Money Market VP; XX% for Aetna Small Company VP
and XX% for Aetna Value Opportunity VP. Without such waiver or
reimbursement, aggregate expenses for the fiscal year ended December 31,
1997 would have been XX% for Aetna Balanced VP: XX% for Aetna Bond VP; XX%
for Aetna Growth VP; XX% for Aetna Growth and Income VP; XX% for Aetna Index
Plus Large Cap VP; XX% for Aetna Money Market VP; XX% for Aetna Small
Company VP and XX% for Aetna Value Opportunity VP.
(3) A portion of the brokerage commissions that certain funds pay was used to
reduce expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby interest earned on
uninvested cash balances was used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses would
have been XX% for Equity-Income Portfolio, XX% for Growth Portfolio, XX%
for Overseas Portfolio, XX% for Asset Manager Portfolio; and XX% for
Contrafund Portfolio.
(4) The fees and expenses shown above are based on gross expenses of the Shares
before expense offset arrangements for the fiscal year ended December 31,
1997 The information for each Portfolio is net of fee waivers or reductions
from Janus Capital. Fee reductions for the Aggressive Growth, Balanced,
Growth, and Worldwide Growth Portfolios reduce the management fee to the
level of the corresponding Janus retail fund. Other waivers, if applicable,
are first applied against the management fee and then against other
expenses. Without such waivers or reductions, the Management Fee, Other
Expenses and Total Fund Annual Expenses would have been XX%, XX% and XX% for
Aggressive Growth Portfolio; XX%, XX% and XX% for Balanced Portfolio; XX%,
XX% and XX% for Growth Portfolio; and XX%, XX% and XX% for Worldwide Growth
Portfolio, respectively. Janus Capital may
14
<PAGE>
modify or terminate the waivers or reductions at any time upon at least 90
days' notice to the Portfolio's Board of Trustees.
(5) The adviser has agreed to bear expenses for each Series, subject to
reimbursement by each Series, such that each Series' "Other Expenses" shall
not exceed XX% of the average daily net assets of the Series during the
current fiscal year. Otherwise, "Other Expenses" for the MFS Total Return
Series and MFS World Governments Series would be XX% and XX%, respectively,
and "Total Fund Annual Expenses" would be XX% and XX%, respectively, for
these Series. Each 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, and may enter into
other such arrangements and directed brokerage arrangements (which would
also have the effect of reducing the Series' expenses). Any such fee
reductions are not reflected under "Other Expenses."
(6) Each Portfolio's aggregate expenses are limited to the advisory and
administrative fees disclosed above through April 30, 1999. Without these
limitations, the aggregate expenses for the current period are estimated to
be as follows: XX% for the Portfolio Partners, Inc. MFS Emerging Equities
Portfolio; XX% for the Portfolio Partners, Inc. MFS Research Growth
Portfolio; XX% for the Portfolio Partners, Inc. MFS Value Equity Portfolio;
XX% for the Portfolio Partners, Inc. Scudder International Growth Portfolio
and XX% for the Portfolio Partners, Inc. T. Rowe Price Growth Equity
Portfolio;
(7) The advisory fee is XX% of the first $500 million in assets and XX% on the
excess.
Reduction of Charges
The Policies are available for purchase by corporations or other groups where
the individuals share a common employer or affiliation with the group or
sponsoring organization. Each Policy covers a single insured. We reserve the
right to reduce premium loads or any other charges on certain multiple life
sales ("cases") where it is expected that the amount or nature of such cases
will result in savings of sales, underwriting, administrative or other costs.
Eligibility for these reductions and the amount of reductions will be determined
by a number of factors, including the number of lives to be insured, the total
premiums expected to be paid, total assets under management for the Policyowner,
the nature of the relationship among the insured individuals, the purpose for
which the policies are being purchased, expected persistency of the individual
policies, and any other circumstances which We believe to be relevant to the
expected reduction of our expenses. Some of these reductions may be guaranteed
and others may be subject to withdrawal or modification by us on a uniform case
basis. Reductions in charges will not be unfairly discriminatory to any
Policyowners.
15
<PAGE>
Policy Choices
When You buy a Policy, You make several important choices:
[bullet] Which Life Insurance Qualification method best suits Your needs -- Cash
Value Accumulation or Guideline Premium;
[bullet] Which one of the three Death Benefit Options You would like;
[bullet] The Premium Accumulation Rate You would like if You choose Death
Benefit Option 3;
[bullet] The way Your premiums will be allocated to the Funds and/or the Fixed
Account;
[bullet] The amount of premium You intend to pay. For Corporate VUL only, you
must decide whether You want to pay the amount necessary to guarantee
Your Death Benefit to age 80 or 100.
Each of these choices is described in detail below:
Premium Payments
Planned Premiums are those premiums You choose to pay on a scheduled
basis. We will bill You annually, semiannually, or quarterly, or at any
other agreed-upon frequency. Additional Premiums are any premiums You
pay in addition to Planned Premiums.
Corporate VUL only
During the first five Policy years, payment of the Minimum Monthly
Premium assures that the Policy will remain in force, as long as there
are no partial surrenders or loans taken during that time. The Minimum
Monthly Premium is stated in the Policy. If Minimum Monthly Premiums
are not paid, or there are partial surrenders or loans taken during the
first five Policy Years, the Policy will lapse if the Surrender Value
is less than the next Monthly Deduction.
Minimum Monthly Premiums are current if premiums paid, minus loans and
partial surrenders, are greater than or equal to the Minimum Monthly
Premium multiplied by the number of months the Policy has been in
force.
Corporate VUL and Corporate VUL II
Payment of Minimum Monthly Premiums, Planned Premiums, or Additional
Premiums in any amount will not, except as noted above, guarantee that
Your Policy will remain in force. Conversely, failure to pay Planned
Premiums or Additional Premiums will not necessarily cause Your Policy
to lapse. For Corporate VUL, not paying Your Planned Premiums can,
however, cause the Guaranteed Death Benefit provision to terminate.
(See "Guaranteed Death Benefit.") The Policy's surrender value must be
sufficient to cover the next Monthly Deduction or, for Corporate VUL
only, the No Lapse Coverage must be in effect to keep the policy in
force.
At any time, You may increase Your Planned Premium by written notice to
us, or pay Additional Premiums, except that:
[bullet] We may require evidence of insurability if the Additional Premium or
the new Planned Premium during the current Policy Year increases the
difference between the Death Benefit and the Total Account Value. If
satisfactory
16
<PAGE>
evidence of insurability is requested and not provided, we will refund
the increase in premium without interest and without investing such
amounts in the underlying funding options.
[bullet] If You have chosen the Guideline Premium method for Life Insurance
Qualification in no event may the total of all premiums paid exceed the
then-current maximum premium limitations established by federal income
tax law for a Policy to qualify as life insurance. (See "Tax
Considerations for Policyowners.")
[bullet] If, at any time, a premium is paid which would result in total premiums
exceeding such maximum premium limitations, we will only accept that
portion of the premium which will make total premiums equal to 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 then-current maximum premium limitations
prescribed by law.
[bullet] If You make a sufficient premium payment when You apply for a Policy,
and have answered favorably to certain questions relating to the
Insured's health, a "temporary insurance agreement" in the amount
applied for (subject to stated maximums) will be provided.
[bullet] After the first premium payment, all premiums must be sent directly to
our Home Office and will be deemed received when actually received at
the Home Office. Your premium payments received during a Valuation
Period at the Home Office will be allocated as You have directed and
amounts allocated to the Funds will be credited at the Accumulation
Unit value determined at the end of the Valuation Period after each
payment is received in the Home Office.
You may reallocate Your future premium payments at any time free of
charge. Any reallocation will apply to premium payments made after You
have received written verification from us.
Under limited circumstances, we may backdate a Policy, upon request, by
assigning a Date of Issue earlier than the date the application is
signed, but no earlier than six months prior to state approval of the
Policy. Backdating may be desirable, for example, so that You can
purchase a particular Policy Specified Amount for lower cost of
insurance rates, based on a younger insurance age. For a backdated
Policy, You must pay the minimum premium payable for the period between
the Date of Issue and the date the initial premium is invested in the
Separate Account. Backdating of your Policy will not affect the date on
which your premium payments are credited to the Separate Account and
you are credited with Accumulation Units. You cannot be credited with
Accumulation Units until your Net Premium is actually deposited in the
Separate Account. (See "Policy Values.")
If we decline an application for a policy we will refund all premium
payments made.
Guaranteed Death Benefit- Corporate VUL only
The Guaranteed Death Benefit assures that as long as the Guaranteed
Death Benefit Premium test, as described below, is met, the Policy will
stay in force even if the Surrender Value is insufficient to cover
monthly deductions.
By paying the required Guaranteed Death Benefit Premium, You can choose
17
<PAGE>
which Guaranteed Death Benefit will be in effect. This benefit may not
be available to all risk classes and is only available in those states
where it has been approved, (e.g., not available in New York.) The
Guaranteed Death Benefit is available to age 80 or to age 100.
We will test annually to determine if the sum of all premiums paid to
date are sufficient to support the Guaranteed Death Benefit then in
effect. In order for the Guaranteed Death Benefit to be in effect, the
cumulative premiums paid less partial surrenders must be greater than
or equal to the required monthly Guaranteed Death Benefit Premium times
the number of months elapsed since the Policy's Date of Issue.
If these premiums are deficient, the Policyowner will be notified and
given 61 days to pay the amount deficient. If the Guaranteed Death
Benefit to age 100 had been in place, and the amount deficient is not
received within the 61-day period, the Guaranteed Death Benefit to age
80 will be substituted. If the cumulative premium test is satisfied
based on the Guaranteed Death Benefit Premium to age 80, the Guaranteed
Death Benefit to age 80 will then be in effect. Otherwise the
Guaranteed Death Benefit will terminate. If the Guaranteed Death
Benefit to age 80 had been in effect and the amount deficient is not
received within the 61-day period, the Guaranteed Death Benefit will
terminate.
If the Guaranteed Death Benefit is terminated it may not be reinstated.
Increases, decreases, partial surrenders, and option changes may affect
the Guaranteed Death Benefit Premium. These events and loans may also
affect the Policy's ability to remain in force even if the cumulative
annual Guaranteed Death Benefit test has been met.
Life Insurance Qualification
A Policy must satisfy either of two testing methods to qualify as a
life insurance contract for tax purposes under Section 7702 of the
Internal Revenue Code of 1986, as amended. At the time of purchase, You
may choose a Policy which uses either the Guideline Premium test or the
Cash Value Accumulation test. Both methods require a life insurance
policy to meet minimum ratios of life insurance coverage to Total
Account Value. We refer to the ratios as Applicable Percentages. We
refer to required life insurance coverage in excess of the Total
Account Value as the Death Benefit corridor.
The Applicable Percentages for the Guideline Premium test are 250%
through Attained Age 40, decreasing over time to 100% at Attained Age
95 and above. The Guideline Premium test also restricts the maximum
premiums that may be paid into a life insurance policy for a specified
Death Benefit. The Cash Value Accumulation test does not limit premiums
which may be paid but has higher required Applicable Percentages. For
example, Applicable Percentages for Corporate Vul Non-Smokers range
from 716% at Attained Age 20, 372% at Attained Age 40 to 100% at
Attained Age 100. Applicable Percentages for Corporate Vul II
Non-Smokers range from 730% at Attained Age 20, 380% at Attained Age 40
to 100% at Attained Age 100.
If Your primary objective were to pay as much premium as possible into
the Policy to target a cash value funding objective, generally a Cash
Value Accumulation method policy would best meet Your needs, since it
generally permits higher premium payments. The choice, however, might
result in higher
18
<PAGE>
eventual Cost of Insurance charges because of the higher Death Benefit
corridor. In addition, the payment of higher premiums which would be
associated with choosing the Cash Value Accumulation method, increases
the possibility that the amount paid into the Policy will exceed the
amount that would have been paid had the Policy provided for seven
level annual premiums (the "7-pay test"). If premiums paid exceed such
limit during any 7-pay testing period, any partial surrender or Policy
loan may be subject to federal income taxation. (See "Tax
Considerations for Policyowners.")
If Your primary objective were to maximize the potential for growth in
Total Account Value, or to conserve Total Account Value, generally a
Guideline Premium Policy would best meet Your needs. This is because
the Applicable Percentages are lower, resulting in lower Cost of
Insurance charges for the smaller required Death Benefit corridor
coverage.
If Your primary objective were to provide a specified Death Benefit at
low cost, then generally there is no difference between the testing
methods because the planned premium will be less than the maximum
premium limit under the Guideline Premium test and additional Death
Benefit insurance coverage may not be necessary under either testing
method to comply with the Death Benefit corridor requirements.
Death Benefit Options
At the time of purchase, You must choose from three available Death
Benefit Options. The amount payable under the option chosen will be
determined as of the date of the Insured's death. The Death Benefit may
be affected by partial surrenders. The Death Benefit for all three
options will be reduced by the Loan Account Value plus any accrued
interest.
Under Option 1, the Death Benefit will be the greater of the Specified
Amount or Target Face Amount if a Term Insurance Rider is attached to
the Policy (see "Term Insurance Rider"), or the Applicable Percentage
of the Total Account Value. Option 1 generally provides a level Death
Benefit.
Under Option 2, the Death Benefit will be the greater of the Specified
Amount, plus the Total Account Value or the Target Face Amount if a
Term Insurance Rider is attached to the Policy (see "Term Insurance
Rider"), or the Applicable Percentage of the Total Account Value.
Option 2 provides a varying Death Benefit which increases or decreases
over time, depending on the amount of premium paid and the investment
performance of the underlying funding options You choose.
Under Option 3, the Death Benefit will be the greater of the Specified
Amount plus the Accumulated Premium(s) accumulated at the Premium
Accumulation Rate or Target Face Amount if a Term Insurance Rider is
attached to the Policy (see "Term Insurance Rider"), or the Applicable
Percentage of the Total Account Value but will not exceed the total
Death Benefit paid under Option 2. This option may only be selected at
issue.
19
<PAGE>
The choice of Death Benefit Option should be based upon the pattern of
Death Benefits which best matches the intended use of the Policy. For
example, an Option 1 Policy should be chosen for a simple, fixed, level
total Death Benefit need. Option 2 would be chosen to provide a level
death benefit in addition to the Policy Total Account Value, and Option
3 would provide a level death benefit for the Specified Amount plus a
return of Accumulated Premiums.
Choosing the option which provides the lowest pattern of Death Benefits
which meets the desired need will be the most efficient for
accumulating potential cash value, since the lower Cost of Insurance
charges will improve the growth or preservation of the Total Account
Value. Other than providing the appropriate pattern of desired Death
Benefits, there is no economic advantage of one option over another,
since the Cost of Insurance charges for all three Options is based upon
the amount at risk, the difference between the Death Benefit and the
Total Account Value each month.
The same is true for the choice of a Premium Accumulation Rate under
Option 3. Choice of a higher Premium Accumulation Rate will cause the
death benefit to increase more rapidly, but this will also generate
higher Cost of Insurance charges and lower the potential growth in
Total Account Value.
Transfers and Allocations to Funding Options
At purchase, You must decide how to allocate Your Net Premiums among
the Funds and/or the Fixed Account. Net Premiums must be allocated in
whole percentages. You should carefully consider current market
conditions and each Fund's investment policies and related risks before
allocating money to or transferring values among the Funds.
Before the Maturity Date, You may transfer Policy values from one Fund
to another at any time, or to the Fixed Account. For Corporate VUL II,
the company reserves the right to charge $25 for each transfer after
the twelfth transfer per year. Within 45 days after each Policy
anniversary, and before the Maturity Date, You may also transfer a
portion of the Fixed Account Value to one or more Funds. A transfer
from the Fixed Account is allowed only once in the 45-day period after
the Policy anniversary and will be effective as of the next Valuation
Period after Your request is received at the Company's Home Office. The
amount of such transfer cannot exceed the greater of 20% of the
greatest amount held in the Fixed Account Value during the prior 5
years or $1000.
Any transfer among the Funds or to the Fixed Account will result in the
crediting and cancellation of Accumulation Units based on the
Accumulation Unit values determined at the end of the Valuation Period
after Your request is received by us at our Home Office. (See
"Accumulation Unit Value.")
20
<PAGE>
Policy Values
Total Account Value
Once Your Policy has been issued, each Net Premium allocated to a
funding option through the Separate Account is credited in the form of
Accumulation Units for the funding option based on that funding option's
Accumulation Unit value (see below). Each Net Premium received after
the Date Of Issue will be credited to Your Policy at the Accumulation
Unit value(s) determined for the Valuation Period in which it is
received by us at our Home Office following the Date of Issue of the
Policy. (See "Premium Payments.") The number of Accumulation Units
credited is determined by dividing the Net Premium by the value of an
Accumulation Unit computed at the end of the Valuation Period during
which we receive the premium. Shares in each Fund elected by You will be
purchased by the Separate Account at the net asset value next determined
by the Fund following receipt of the Net Premium by the Company. Since
each Fund has its own Accumulation Unit value, a Policyowner who has
elected a combination of funding options will have Accumulation Units
credited for each funding option.
The Total Account Value of Your Policy is determined by: (a) multiplying
the total number of Accumulation Units credited to the Policy for each
applicable funding option by its appropriate current Accumulation Unit
value; (b) if You have elected a combination of funding options,
totaling the resulting values; (c) adding any values attributable to the
Fixed Account; and (d) any values attributable to the Loan Account
Value.
The number of Accumulation Units credited to a Policy for each funding
option will not be changed by any subsequent change in the value of an
Accumulation Unit. The number is increased by subsequent contributions
or transfers into that funding option, and decreased by charges and
withdrawals from that funding option.
There is no assurance that the Separate Account Value of the Policy will
equal or exceed the premiums paid and allocated to the Separate Account.
You will be advised at least annually as to the number of Accumulation
Units which remain credited to the Policy for each Fund, the current
Accumulation Unit values, the Separate Account Value, the Fixed Account
Value, and the Total Account Value.
Accumulation Unit Value
The value of an Accumulation Unit for any Valuation Period is determined
by multiplying the value of an Accumulation Unit for the immediately
preceding Valuation Period by the net investment factor for the current
period for the appropriate Fund. The net investment factor equals the
net investment rate plus 1.0000000. The net investment rate is
determined separately for each Fund as follows:
The net investment rate equals (a) the net assets of the Fund held in
Variable Life Account B at the end of a Valuation Period, minus (b) the
net assets of the Fund held in Variable Life Account B at the beginning
of that Valuation Period, plus or
21
<PAGE>
minus (c) taxes or provisions for taxes, if any, attributable to the
operation of Variable Life Account B, divided by (d) the value of the
Accumulation Units held by Variable Life Account B at the beginning of
the Valuation Period, minus (e) a daily charge for mortality and expense
risk and for administrative expenses in connection with these Policies.
(See "Charges and Fees Associated with the Variable Funding Options.")
Maturity Value
The Maturity Value of the Policy is the Total Account Value on the
Maturity Date, less the Loan Account Value and any unpaid accrued
interest.
Surrender Value
The Surrender Value of Your Policy is the amount You can receive in cash
by surrendering the Policy. All or part of the Surrender Value may be
applied to one or more of the Settlement Options. (See "Surrender
Charge.")
22
<PAGE>
Policy Rights
Partial Surrenders
A partial surrender may be made at any time after the first Policy Year.
If, at the time of a partial surrender Your Total Account Value is
attributable to more than one funding option, the Surrender Charge
(Corporate VUL only), transaction charge and the amount paid to You upon
the surrender will be taken proportionately from the Accumulation Unit
values in each funding option.
The amount of a partial surrender may not exceed the Surrender Value on
the date the request is received and may not be less than $500.
Partial surrenders may only be made prior to election of a Settlement
Option.
For an Option 1 Policy (see "Death Benefit Options"):
A partial surrender will reduce the Total Account Value, Death Benefit,
and Specified Amount. The Specified Amount and Total Account Value will
be reduced by equal amounts and will reduce any past increases in the
reverse order in which they occurred.
For an Option 2 Policy (see "Death Benefit Options"):
A partial surrender will reduce the Total Account Value and the Death
Benefit, but it will not reduce the Specified Amount.
For an Option 3 Policy (see "Death Benefit Options"):
A partial surrender will reduce the Total Account Value, Death Benefit,
and Specified Amount. The Specified Amount and Total Account Value will
be reduced by equal amounts and will reduce any past increases in the
reverse order in which they occurred.
Payment of any amount due from the Separate Account Values on a full or
partial surrender will be made within seven calendar days after we
receive Your written request at our Home Office in form satisfactory to
us. Payment may be postponed when the New York Stock Exchange has been
closed and for such other periods as the Commission may require.
Additionally, for Corporate VUL II, payment may be postponed when
trading on the New York Stock Exchange is restricted, when an emergency
exists so that disposal of the securities held in the Funds is not
reasonably practicable or it is not reasonably practicable to determine
the value of the Funds' net assets; or during any other period when the
SEC, by order, so permits for the protection of securityholders. Payment
from the Fixed Account Values may be deferred up to 6 months, except
when used to pay premiums to the Company.
The Specified Amount remaining in force after a partial surrender may
not be less than $100,000. Any request for partial surrender that would
reduce the Specified Amount below this amount will not be granted. In
addition, if, following the partial surrender and the corresponding
decrease in the Specified Amount, the Policy would not comply with the
maximum premium limitations required by federal tax law, the decrease
may be limited to the extent necessary to meet the federal tax law
requirements.
23
<PAGE>
No Lapse Coverage - Corporate VUL only
A Corporate VUL Policy will not terminate during the five-year period
after its Date of Issue or the Date of Issue of any increase if, on each
Monthly Deduction Day within that period, the sum of premiums paid
equals or exceeds: 1) the sum of the Minimum Monthly Premiums for each
Policy month from the Date of Issue, including the current month; plus,
2) any partial surrenders; plus 3) any increase in Loan Account Value
since the Policy's Date of Issue or the effective date of any increase.
If, on each Monthly Deduction Day within the five-year period, the sum
of premiums paid is less than the sum of items 1, 2, and 3 above, and
the Surrender Value is insufficient to cover the current Monthly
Deduction, the Grace Period provision will apply. (See "Grace Period.")
After the five-year period expires, and depending on the investment
performance of the Funds, the Total Account Value may be insufficient to
keep this Policy in force, and payment of an additional premium may be
necessary, unless the Guaranteed Death Benefit provision is in effect.
Reinstatement of a Lapsed Policy
A lapse occurs if Your Monthly Deduction is greater than the Policy's
Surrender Value and no payment to cover the deduction is made within the
61 days of our notifying You.
You can apply for reinstatement within five years after the date of
lapse and before the Maturity Date. To reinstate Your Policy we will
require satisfactory evidence of insurability and an amount sufficient
to pay for the current Monthly Deductions, plus two additional Monthly
Deductions.
For Corporate VUL only, if the Policy is reinstated within five years of
the Policy's Date of Issue, or while the No Lapse Coverage provision
(see "No Lapse Coverage") would be in effect if this Policy had not
lapsed, all values, including the Loan Account Value, will be reinstated
to the point they were on the date of lapse. However, the Guaranteed
Death Benefit provision will not be reinstated.
For Corporate VUL II, and Corporate VUL when the No Lapse Coverage
provision (see "No Lapse Coverage") has expired, the Policy will be
reinstated on the Monthly Deduction Day following our approval. This
Policy's Total Account Value at reinstatement will be the Net Premium
paid less the Monthly Deduction due that day. Any Loan Account Value
will not be reinstated, and the Guaranteed Death Benefit will not be
reinstated.
If the Policy's Surrender Value less any Loan Account Value plus accrued
interest is not sufficient to cover the full Surrender Charge at the
time of lapse, the remaining portion of the Surrender Charge will also
be reinstated at the time of Policy reinstatement.
Policy Loans
Unless otherwise required by state law, the maximum loan amount is 90%
of the sum of the Fixed Account Value and the Separate Account Value
less the surrender charge applicable at the time of the loan.
24
<PAGE>
An amount equal to what You receive for a loan, together with any
interest added to the loan for due and unpaid interest, as described
below, will be added to the Loan Account Value.
Corporate VUL only
Loans taken during the first ten Policy Years are considered
Nonpreferred loans. Beginning in the eleventh Policy Year, up to 10% of
the maximum loan amount available at the beginning of a Policy Year can
be taken as a Preferred loan during that Policy Year. Amounts borrowed
that are in excess of the maximum loan amount available for a Preferred
loan will be considered a Nonpreferred loan.
Corporate VUL and Corporate VUL II
If a policy loan is requested, the amount to be borrowed will be
withdrawn by Us from the funding options and Fixed Account Value in
proportion to the value of the Policy attributable to each funding
option and the Fixed Account. For Corporate VUL II and subject to state
approval for Corporate VUL, repayments on the loan will be allocated in
proportion to the value withdrawn from the Fixed Account, if any, and to
the variable funding options according to the Policyowner's then current
premium allocations. If state approval has not been received for
Corporate VUL, repayments on the loan will be allocated among the
funding options in the same proportion as the loan was taken from the
funding options. The Loan Account Value will be reduced by the amount of
any loan repayment.
Interest on loans will accrue at an annual rate which will be the
greater of:
1) The monthly average (i.e., the Composite Yield on Corporate Bonds as
published by Moody's Investors Service, Inc.) for the calendar month
which ends two months before the month in which the Policy
Anniversary occurs, or
2) 5.0%.
Increases to the current interest rate may occur only when the maximum
interest rate is at least .5% higher than the interest rate in effect
for the prior Policy Year.
Decreases to the current interest rate will occur only when the maximum
interest rate is at least .5% lower than the interest rate in effect for
the prior Policy Year.
We will notify You of the current interest rate charged for a loan at
the time the loan is made. If Your Policy has a loan outstanding, we
will notify You of any change in the interest rate before the new rate
becomes effective.
Interest is payable once a year on each anniversary of the loan, or
earlier upon surrender, payment of proceeds, or maturity of a Policy.
Any interest not paid when due becomes part of the loan and bears
interest.
We will credit interest on the Loan Account Value. The Loan Account
Value for the Nonpreferred loans under Corporate VUL, and all loans
under Corporate VUL II will be credited interest, during any Policy
Year, at an annual rate that is the interest rate charged on the loan
minus 1% for Corporate VUL, and minus a rate not to exceed .90% for
Corporate VUL II. However, in no case will the credited interest rate be
less than 4.0% annually.
For Corporate VUL only, the Loan Account Value on Preferred loans will
be
25
<PAGE>
credited interest at a rate equal to the interest rate charged. In no
case will the credited interest rate be less than 5.0% annually.
Policy Changes
You may make changes to Your Policy as described below by submitting a
written request to our Home Office in a form satisfactory to us.
Increases: You may increase the Specified Amount of Your Policy any
time subject to the following conditions:
[bullet] Satisfactory evidence of insurability may be required.
For Corporate VUL,
[bullet] An increase in the Specified Amount will increase the Surrender Charge.
[bullet] The Minimum Monthly Premium will be increased when the
Specified Amount is increased.
[bullet] An Increase in the Specified Amount will increase the
Guaranteed Death Benefit amount and will increase the
Guaranteed Death Benefit Premium.
[bullet] The 5 year period as described in the No Lapse Coverage
provision will restart on the Date of Issue of an increase.
Decreases: Generally, You may decrease the Specified Amount of Your
Policy; however, no decrease may reduce the Specified Amount below the
minimum for the type of Policy (see "Death Benefit Options"), and the
availability of decreases before the sixth Policy Year for Coporate VUL
and before the eighth Policy Year for Corporate VUL II is subject to
approval of this feature by state regulatory agencies and to the
Company's satisfaction that the decrease is intended to meet a
legitimate, non-insurance related business need of the Contractowner.
The following additional rules apply to Corporate VUL Policies only:
[bullet] Any decrease in the Specified Amount will cause a decrease in the
Guaranteed Death Benefit Premium. The Guaranteed Death Benefit Premium
will be based on the new Specified Amount.
[bullet] Subject to state regulatory approval, at the time of a decrease, we
will deduct a Surrender Charge from the Total Account Value. For this
purpose, the Surrender Charge will be prorated according to the
percentage the decrease amount bears to the Specified Amount before the
decrease.
Death Benefit Option Change:
A Death Benefit Option change will be allowed, subject to the following
conditions:
[bullet] The change will take effect on the Monthly Deduction Day on or next
following the date on which the Company receives Your written request.
[bullet] Evidence of insurability may be required.
[bullet] For Corporate VUL only, the change in Death Benefit Option will not
change the Surrender charge, but will affect the Guaranteed Death
Benefit amount and the Guaranteed Death Benefit Premium.
[bullet] We will not allow a change in the Death Benefit Option if the Specified
Amount will be reduced below the minimum.
26
<PAGE>
[bullet] Changes from Option 1 to Option 2 are allowed at any time for Corporate
VUL II and, subject to state regulatory approval, for Corporate VUL. If
state regulatory approval has not been received, such changes are
allowed for Corporate VUL only after the fifth Policy Year. The new
Specified Amount will equal the Specified Amount less the Total Account
Value at the time of the change.
[bullet] Changes from Option 2 to Option 1 are allowed at anytime. The new
Specified Amount will equal the Specified Amount plus the Total Account
Value as of the time of the change.
[bullet] Changes from Option 3 to 1 are allowed at anytime. The Specified Amount
will be increased to equal the Specified Amount prior to the change
plus the lesser of the Accumulated Premiums or the Total Account Value
at the time of the change.
[bullet] Changes from Option 3 to 2 are allowed at any time for Corporate VUL II
and, subject to state regulatory approval, for Corporate VUL. If state
regulatory approval has not been received, such changes are allowed for
Corporate VUL only after the fifth Policy Year. The Specified Amount
will be reduced to equal the Specified Amount prior to the change minus
the difference between the Total Account Value and the sum of the
Accumulated Premiums at the time of the change.
[bullet] Changes from Options 1 or 2 to Option 3 are not allowed.
Right to Examine the Policy
The Policy has a Free-Look period during which You may examine the
Policy. If for any reason You are dissatisfied, it may be returned to
our Home Office for a refund. It must be returned within ten days after
You receive the Policy and any written notice of withdrawal right, or
within 45 days after You sign the application for the Policy, whichever
occurs later. Some states provide a longer period of time to exercise
these rights. Your Policy will indicate if you have more than 10 days
to review the Policy. If You return (cancel) the Policy, we will pay a
refund of (1) the difference between payments made and amounts
allocated to the Separate Account, plus (2) the value of the amount
allocated to the Separate Account as of the date the returned Policy is
received by us, plus (3) any fees imposed on the amounts allocated to
the Separate Account. Some state laws require the refund equal all
premiums paid, without interest. Refunds will usually occur within
seven days of notice of cancellation, although a refund of premiums
paid by check may be delayed until the check clears Your bank.
27
<PAGE>
Death Benefit
The Death Benefit under the Policy will be paid in a lump sum within
seven days after we receive due proof of the Insured's death (a
certified copy of the death certificate), unless You or the beneficiary
have elected that it be paid under one or more of the Settlement
Options or such options as we may choose to make available in the
future. Payment of the Death Benefit may be delayed if the Policy is
being contested. (See "Settlement Options.")
While the Insured is living, You may elect a Settlement Option for the
beneficiary and deem it irrevocable. You may revoke or change a prior
election. The beneficiary may make or change an election within 90 days
of the death of the Insured, unless You have made an irrevocable
election. A beneficiary who has elected Settlement Option 1 may elect
another option within two years after the Insured's death.
If the Policy is assigned as collateral security, we will pay any
amount due the assignee in one lump sum. Any excess Death Benefit due
will be paid as elected.
28
<PAGE>
Policy Settlement
Settlement Options
Proceeds in the form of Settlement Options are payable by the Company
upon the Insured's death, upon Maturity of the Policy, or upon election
of one of the Settlement Options (after any applicable Surrender
Charges have been deducted).
A written request may be made to elect, change, or revoke a Settlement
Option before payments begin under any Settlement Option. This request
must be in form satisfactory to us, and will take effect upon its
filing at our Home Office. If no Settlement Option has been elected by
the Policyowner when the Death Benefit becomes payable to the
beneficiary, that beneficiary may make the election. If the Policy has
been assigned, we must consent to the election of any Settlement
Option. We may refuse to permit a Settlement Option if the payee is not
a natural person. Also, the Annuitant's age plus the number of years
for which payments are guaranteed under a Settlement Option may not
exceed 95.
The amount of the first payment for Settlement Options other than
payment of interest on a sum left with us (whether on a fixed or
variable basis) is determined, based on the option chosen, using the
annuity rates specified in the Policy. This rate is the same regardless
of whether an Annuitant is male or female.
There may be different tax consequences associated with the various
Settlement Options.
The following are the currently available Settlement Options (others
may become available):
Settlement Options for Corporate VUL
Option 1 -- Payment of interest on the sum left with us;
Option 2 -- Payments for a stated number of years, at least three but
no more than thirty. If variable payments are selected for this
option, you may withdraw all or a portion of the remaining payments
at any time.
Option 3 -- Payments for the lifetime of the payee. If also chosen,
we will guarantee payments for 60, 120, 180 or 240 months; or
Option 4 -- Payments during the joint lifetimes of two payees. At the
death of either, payments will continue to the survivor. When this
option is chosen, a choice must be made of:
a) 100% of the payment to continue to the survivor;
b) 66 2/3% of the payment to continue to the survivor;
c) 50% of the payment to continue to the survivor;
d) Payments for a minimum of 120 months, with 100% of the payment to
continue to the survivor; or
e) 100% of the payment to continue to the survivor if the survivor is
the payee, and 50% of the payment to continue to the survivor if the
survivor is the second payee.
In most states, no election may be made that would result in a first
payment of less than $25 or that would result in total yearly
payments of less than $120. If the value of the Policy is
insufficient to elect an option for the minimum amount specified, a
lump-sum payment must be elected.
29
<PAGE>
Proceeds applied under Option 1 will be held by us in the General
Account. Proceeds in the General Account will be used to make
payments on a fixed-dollar basis. We will add interest to such
proceeds at an annual rate of not less than 3.0%. We may add interest
daily at any higher rate.
Under Option 1, the payee may later tell the Company to (a) pay to
him or her a portion of all of the sum held by the Company; or (b)
apply a portion of all of the sum held by the Company to another
Settlement Option.
Proceeds applied under Settlement Options 2, 3 and 4 will be held at
the election of You or Your beneficiary: (a) in a fixed annuity using
the General Account; or (b) in Variable Annuity Account B, invested
in one or more of the available investment options; or (c) a mix of
(a) and (b). Proceeds held in Variable Annuity Account B will be used
to make payments on a variable basis.
Settlement Options For Corporate VUL II
Options 1, 2 and 3 described below are available on either a fixed
payment or a variable payment basis.
For a fixed Settlement Option, the amount of the first and each
subsequent payment is the same. That amount will be based on an
interest rate of at least 3%.
If our then current settlement option rate would provide higher
payments on a comparable fixed payment annuity at the time payments
commence, we also will use the higher rate for fixed Settlement Options
under a Policy.
Except to the extent noted below for Option 1, no withdrawals from or
changes of a Settlement Option may be made under Options 1, 2 and 3
once payments begin.
Option 1 - Payments for a stated number of years, but no more than
thirty. The period must be for at least five years, but if variable
payments are selected, you may withdraw all or a portion of the
remaining payments at any time.
Option 2 - Payments for the lifetime of the Annuitant. If also chosen,
we will guarantee payments for a number of years from 5 to 30 or a
"cash refund" upon the Annuitant's death. The cash refund election is
available only if all amounts allocated to this Option 2 are on a fixed
basis and are subject to that election. The amount of the cash refund
is the difference between the amount applied to this annuity option at
the time of settlement and the total amount of payments received under
the option prior to the Annuitant's death.
Option 3 - Life Income Based Upon the Lives of Two Annuitants -
payments during the joint lifetimes of two Annuitants. Payments will
continue until both Annuitants have died. When this option is chosen, a
choice must be made of (a) 100%, 66 2/3% or 50% of the payment to
continue after the first death; (b) payments for a minimum of 5 to 30
years, with 100% of the payment to continue after the first death; (c)
100% of the payment to continue to the surviving Annuitant if the
survivor is the original payee, and 50% of the payment to continue to
the survivor if the surviving Annuitant is the second payee; or (d)
100% of the payment to continue after the first death, with a "cash
refund" feature comparable to that described for Option 2 above.
30
<PAGE>
Option 4 - Payment of interest on the sum left with us at 3% or such
higher rate as we may, in our sole discretion, declare. After
commencement of this option, the payee may make a Written Request to
receive all or a portion of the amount held under this option as a lump
sum or have it applied to one or more of the other available Settlement
Options.
Upon the death of the Annuitant(s), any remaining guaranteed payments
will continue to the beneficiary unless the beneficiary elects to
receive the present value of any remaining guaranteed payments in a
lump sum. Such payments will be paid at least as rapidly as under the
method of distribution then in effect. If the beneficiary dies while
receiving payments, the present value of any remaining guaranteed
payments will be paid in one sum to the beneficiary's estate.
Although the foregoing discussion of Settlement Options is in terms of
monthly payments, you may elect to receive quarterly, semi-annual or
annual payments instead.
No fixed or variable Settlement Option may be elected that would result
in a first payment of less than $50 or that would result in total
yearly payments of less than $250. If the proceeds payable are
insufficient to elect an option for these minimum amounts, a lump-sum
payment must be elected.
Calculation of Variable Payment Settlement Options Values
Variable Settlement Options will be supported by the then available
Funds of the Company's Variable Annuity Account B (Account B), a
separate account very similar to the Separate Account, except that
Account B supports variable annuity benefits, rather than variable life
insurance benefits. We reserve the right to impose a maximum limit of
four Funds that can be used at any one time for a Settlement Option. We
will provide an Account B prospectus in connection with selection of a
Settlement Option. That prospectus will describe the available Funds,
the cost and expenses of such Funds and the charges imposed on Account
B. The available Funds may be, and the charges imposed on Account B are
expected to be, different from those that relate to the Separate
Account prior to commencement of a Settlement Option. Accordingly, you
should review the Account B prospectus, as well as the prospectuses for
Account B's underlying Funds, prior to selecting any variable payment
Settlement Option.
You make transfers among Funds under our administrative procedures in
effect at the time. Currently, we limit the number of transfers to four
per calendar year, but we can change this limit in the future.
For a variable Settlement Option, the first payment is determined using
an assumed interest rate of 3.5% or 5% as selected by the Policyowner
or payee, as the case may be. Subsequent payments will vary based on
Fund performance as discussed below. The initial payment will be higher
if 5% is elected as the assumed interest rate; but subsequent payments
will increase less with favorable fund performance (and decrease more
with unfavorable Fund performance) than if 3.5% is elected.
The amount of each variable annuity payment after the first is
determined pursuant to a formula described in the Policies that is
generally used by actuaries for making such calculations. Generally
speaking, if the total return of the Fund for any month, less a
deduction currently equivalent to an annual rate of 1.25% for mortality
and expense risks which we expect to result in a profit to us, exceeds
the Settlement Option's assumed interest rate (3.5% or 5%, as discussed
above), the
31
<PAGE>
next variable payment will be larger than the previous one. On the
other hand, if the Fund's total return for any month, as so adjusted,
is less than the assumed rate, the next variable payment will be
smaller than the previous one.
32
<PAGE>
Term Insurance Rider
The Policy can be issued with a Term Insurance Rider as a portion of
the total Death Benefit. The Rider provides term life insurance on the
life of the Insured, which is annually renewable to Attained Age 100
(up to 80 in New York for Corporate VUL II when the employer pays all
premium). The Rider provides a vehicle for short-term insurance
protection for Policyowners who desire lower required premiums under
the Policy, in anticipation of growth in Total Account Value to fund
life insurance coverage in later Policy Years. The amount of coverage
provided under the Rider's Benefit Amount, varies from month to month.
Corporate VUL
The Benefit Amount is the greater of (a) or (b), where (a) is the
Target Face Amount, which is an amount selected by You, or a
percentage of the Total Account Value as described in the Policy
if that percentage is greater than the Target Face Amount; less
(i) the greater of the Policy's Specified Amount and Total
Account Value, if Death Benefit Option 1 is in effect; or (ii)
the Policy's Specified Amount plus the Total Account Value, if
Death Benefit Option 2 is in effect; or (iii) the Policy's
Specified Amount plus the Accumulated Premiums, if Death Benefit
Option 3 is in effect; (b) is zero. The result of Death Benefit
Option 3 will never be greater than the result of Death Benefit
Option 2. We may limit the Target Face Amount selected.
Corporate VUL II
The Benefit Amount is the Target Face Amount minus the Specified
Amount. However, if the Death Benefit of the Policy is defined as
a percentage of the Total Account Value, the Benefit Amount is
zero.
The cost of the Rider is added to the Monthly Deductions, and is based
on the Insured's premium class and Attained Age for Corporate VUL, or
the Insured's premium class, Issue Age and the number of Policy Years
elapsed for Corporate VUL II. We may adjust the monthly rider rate from
time to time, but the rate will never exceed the guaranteed cost of
insurance rates for the Rider for that Policy Year. For Corporate VUL
only, the cost for this Rider is added to our calculation of the
Minimum Monthly Premium for no lapse protection and to our calculation
of the Guaranteed Death Benefit Premium.
If the Policy's Death Benefit increases as a result of an increase in
Total Account Value (see "Life Insurance Qualification"), the Rider's
Target Death Benefit will be reduced by an equivalent amount to
maintain the total desired Death Benefit.
The Rider's Death Benefit is included in the total Death Benefit paid
under the Policy. (See "Death Benefit Options.")
33
<PAGE>
The Company
Aetna Life Insurance and Annuity Company is a stock life insurance
company organized under the insurance laws of the State of Connecticut
in 1976. Through a merger, it succeeded to the business of Aetna
Variable Annuity Life Insurance Company (formerly Participating Annuity
Life Insurance Company organized in 1954). The Company is engaged in
the business of issuing life insurance policies and annuity contracts
in all states of the United States. The Company is a wholly owned
subsidiary of Aetna Retirement Holdings, Inc., which is in turn a
wholly owned subsidiary of Aetna Retirement Services, Inc. and an
indirect wholly owned subsidiary of Aetna Inc.
The Company is registered as an investment adviser under the Investment
Advisers Act of 1940. It is also registered as a broker-dealer under
the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc.
34
<PAGE>
Directors & Officers
<TABLE>
<CAPTION>
Business Experience
Name and Address* Position with Company During Past 5 Years
<S> <C> <C>
Thomas J. McInerney Director, President and President (since September 1997), Aetna
Chairman, Executive Life Insurance and Annuity Company;
Committee (Principal President (since September 1997), Aetna
Executive Officer) Insurance Company of America; President
(since September 1997), Aetna Retirement
Holdings, Inc.; President (since August
1997), Aetna Retirement Services, Inc.;
Executive Vice President (since August
1997), Aetna Inc.; Vice President, Strategy
(March 1997-August 1997), Aetna Inc.; Vice
President, Strategy, Finance, &
Administration (July 1995-April 1996),
Aetna Inc.; Vice President, Guaranteed
Products (November 1992-July 1995), Aetna
Inc.
J. Scott Fox Director and Senior Vice Managing Director, Chief Operating
President Officer, Chief Financial Officer (since
October 1997), Aeltus Investment
Management, Inc.; Senior Vice President,
Operations (since March 1997), Aetna Life
Insurance and Annuity Company; Managing
Director, Chief Operating Officer, Chief
Financial Officer, Treasurer (April
1994-March 1997), Aeltus Investment
Management, Inc.; Managing Director and
Treasurer (March 1987-September 1993),
Equitable Capital Management Corporation.
Timothy A. Holt Director, Senior Vice Senior Vice President, Business Strategy
President and Chief & Finance, and Chief Financial Officer
Financial Officer (since February 1996), Aetna Life
Insurance and Annuity Company; Vice
President, Portfolio Management/Investment
Group (August 1992-February 1996), Aetna
Life and Casualty Company.
35
<PAGE>
Business Experience
Name and Address* Position with Company During Past 5 Years
John Y. Kim Director and Senior Vice President (since December 1995), Aeltus
President Investment Management, Inc.; Chief
Investment Officer (since 1994), Aetna
Services, Inc. (formerly Aetna Life and
Casualty Company); Managing Director
(September 1993-April 1994), Mitchell
Hutchins Institutional Investors (New
York, New York); Vice President and Senior
Portfolio Manager (October 1991-August
1993), Aetna Services, Inc. (formerly
Aetna Life and Casualty Company).
Shaun P. Mathews Director and Senior Vice Senior Vice President, Product Management
President (since September 1997); Vice President,
Products Group (since February 1996 to
September 1997), Senior Vice President,
Strategic Markets and Products (February
1993-February 1996), and Senior Vice
President, Mutual Funds (March
1991-February 1993), Aetna Life Insurance
and Annuity Company.
Thomas P. Waldron Director Vice President, Human Resources
(since 1995), Aetna Inc.; Senior Vice
President, Human Resources (1990 to 1995),
Nielson Marketing Research, Chicago,
Illinois.
Kirk P. Wickman Vice President, General Vice President, General Counsel and
Counsel and Corporate Corporate Secretary (since November 1996),
Secretary Aetna Life Insurance and Annuity Company;
Vice President and Counsel (June
1992-November 1996), Aetna Life Insurance
Company.
36
<PAGE>
Deborah Koltenuk Vice President and Vice President, Investment Planning and
Treasurer, Corporate Financial Reporting (April 1996 to July
Controller 1996), Aetna Life Insurance Company; Vice
President and Treasurer, Corporate
Controller (since March 1996), Aetna
Retirement Holdings, Inc., Vice President,
Investment Planning and Financial Reporting
(October 1994 to April 1996), The Aetna
Casualty and Surety Company and The
Standard Fire and Insurance Company;
Assistant Vice President, Finance and
Administration (June 1994 to October 1994),
Aetna Life Insurance Company; Controller
(September 1993 to June 1994), Aetna
Information Technology; Assistant Vice
President (December 1990 to September
1993), Aetna Life and Casualty Company.
Frederick D. Kelsven Vice President and Chief Vice President, Chief Compliance Officer
Compliance Officer (since February 1997), Aetna Life
Assignment Company; Vice President & Chief
Compliance Officer (since November 1996),
Aetna Investment Services, Inc.; Director
of Compliance (January 1985 to September
1996), Nationwide Life Insurance Company.
</TABLE>
* The address of all Directors and Officers listed is 151 Farmington
Avenue, Hartford, Connecticut. These individuals may also be directors
and/or officers of other affiliates of the Company.
Directors, officers and employees of the Company are covered by a
blanket fidelity bond in the amount of $60 million issued by Aetna
Casualty and Surety Company.
37
<PAGE>
Additional Information
Reports to Policyowners
Within 30 days after each Policy Anniversary and before proceeds are
applied to a Settlement Option, we will send You a report containing
the following information:
1) A statement of changes in the Total Account Value and Surrender
Value since the prior report or since the Date of Issue, if there
has been no prior report. This includes a statement of Monthly
Deductions and investment results and any interest earnings for the
report period;
2) Surrender Value, Death Benefit, and any Loan Account Value as of the
Policy Anniversary;
3) A projection of the Total Account Value, Loan Account Value and
Surrender Value as of the succeeding Policy Anniversary.
If You have Policy values funded in a Separate Account You will
receive, in addition, such periodic reports as may be required by the
SEC.
Some state laws require additional reports; these requirements vary
from state to state.
Right to Instruct Voting of Fund Shares
In accordance with our view of present applicable law, we will vote the
shares of each of the Funds held in each Separate Account. The votes
will be cast at meetings of the shareholders of the Fund and will be
based on instructions received from Policyowners. However, if the
Investment Company Act of 1940 or any regulations thereunder should be
amended or if the present interpretation thereof should change, and as
a result we determine that we are permitted to vote the shares of the
Fund in our own right, we may elect to do so.
The number of Fund shares which each Policyowner is entitled to direct
a vote is determined by dividing the portion of Total Account Value
attributable to a Fund, if any, by the net asset value of one share in
the Fund. During the Settlement Option period, the number of votes is
determined by dividing the Valuation Reserve (as defined below)
attributable in the Fund, if any, by the net asset value of one share
of the Fund. Fractional votes will be counted. Where the value of the
Total Account Value or the Valuation Reserve relates to more than one
Fund, the calculation of votes will be performed separately for each
Fund. The Valuation Reserve is established pursuant to the insurance
laws of Connecticut to measure voting rights during the Settlement
Option period and the value of a commutation right, if available,
under Settlement Option 2 when elected on a variable basis.
The number of shares which a person has a right to vote will be
determined as of a date to be chosen by us, but not more than 90 days
before the meeting of the Fund. Voting instructions will be solicited
by written communication at least 14 days before such meeting.
38
<PAGE>
Fund shares for which no timely instructions are received, and Fund
shares which are not otherwise attributable to Policyowners, will be
voted by us in the same proportion as the voting instructions which are
received for all Policies participating in each Fund through Variable
Life Account B.
Policyowners having a voting interest will receive periodic reports
relating to the Fund, proxy material and a form for giving voting
instructions.
Disregard of Voting Instructions
We may, when required by state insurance regulatory authorities,
disregard voting instructions if the instructions require that the
shares be voted so as to cause a change in the sub-classification or
investment objectives of a Fund or to approve or disapprove an
investment advisory contract for a Fund. In addition, we may disregard
voting instructions in favor of changes initiated by a Policyowner in
the investment policy or the investment adviser of the Fund if we
reasonably disapprove of such changes.
A change would be disapproved only if the proposed change is contrary
to state law or prohibited by state regulatory authorities or we
determined that the change would have an adverse effect on the Separate
Accounts in that the proposed investment policy for a Fund may result
in overly speculative or unsound investments. In the event we do
disregard voting instructions, a summary of that action and the reasons
for such action will be included in the next annual report to
Policyowners.
State Regulation
We are subject to regulation and supervision by the Insurance
Department of the state of Connecticut, which periodically examines our
affairs. We are also subject to the insurance laws and regulations of
all jurisdictions where we are authorized to do business. The Policies
have been approved by the Insurance Department of the state of
Connecticut and in other jurisdictions where they are offered.
We are required to submit annual statements of our operations,
including financial statements, to the insurance departments of the
various jurisdictions in which we do business, for the purposes of
determining solvency and compliance with local insurance laws and
regulations.
Legal Matters
The Company knows of no material legal proceedings pending to which the
Separate Account is a party or which would materially affect the
Separate Account.
The legal validity of the securities described in the Prospectus has
been passed on by Counsel of the Company.
The Registration Statement
A Registration Statement under the Securities Act of 1933 has been
filed with the SEC relating to the offering described in this
Prospectus. This Prospectus does not include all the information set
forth in the Registration Statement, certain portions of which have
been omitted pursuant to the rules and regulations of the SEC. The
omitted information may be obtained at the SEC's principal office in
39
<PAGE>
Washington, DC, upon payment of the SEC's prescribed fees.
Distribution of the Policies
We offer the Policies through life insurance salespersons and certain
Home Office sales employees. Such persons are registered
representatives of Aetna Investment Services, Inc., a wholly owned
subsidiary of the Company, (which is a registered broker-dealer), or of
other registered broker-dealers which have entered into distribution
agreements with the Company. For Corporate VUL, the maximum commission
payable by the Company to salespersons and their supervising
broker-dealers for Policy distribution is 50% of the Guaranteed Death
Benefit Premium to age 80, or, in the event of an increase in the
Specified Amount, 50% of the Guaranteed Death Benefit Premium to age
80, attributable to the increase.
For Corporate VUL II, maximum commission will equal 15% of the sum of
first-year premiums up to Target Premium. In Policy Years two through
five, maximum commission will equal 10% of the sum of premiums paid for
each Policy Year up to the Target Premium. During Policy Years one
through five, we will also pay a maximum of 3% of the sum of premiums
paid each year in excess of the Target Premium. For each of Policy
Years six and seven, maximum commission will equal 3% of the premiums
paid, and an amount equal to .10% of the Total Account Value less any
Loan Account Value as of the end of each month. For Policy Year eight
and each year thereafter, maximum commission will equal .20% of Total
Account Value less any Loan Account Value as of the end of each month.
In particular circumstances, we may also pay certain of these
professionals for their administrative expenses. In addition, some
sales personnel may receive various types of non-cash compensation as
special sales incentives, including trips and educational and/or
business seminars. Supervisory and other management personnel of the
Company may receive compensation that will vary based on the relative
profitability of the Company of the funding options you select. Funding
options that invest in Funds advised by the Company or its affiliates
are generally more profitable to the Company. The Company may be deemed
to be an underwriter for purposes of the federal securities laws.
The registered representative may be required to return all or part of
any commission if the Policy is not continued for a certain period.
Application forms are completed by the applicant and forwarded to the
Company for acceptance. Upon acceptance, the Policy is prepared,
executed by duly authorized officers of the Company, and forwarded to
the Policyowner.
Corporate VUL Policies are offered for sale in all jurisdictions where
we are authorized to do business except Guam, Puerto Rico, and the
Virgin Islands. We expect to offer Corporate VUL II policies for sale
in all jurisdictions where we are authorized to do business and the
Policies are approved by state regulators except Guam, Puerto Rico and
the Virgin Islands.
Records and Accounts
Andesa, TPA, Inc., Suite 102, 1621 N. Cedar Crest Boulevard, Allentown,
Pennsylvania, will act as a Transfer Agent on behalf of Aetna Life
Insurance and Annuity Company as it relates to the policies described
in this Prospectus. In the role of a Transfer Agent, Andesa will
perform administrative functions, such as decreases, increases,
surrenders and partial surrenders, fund allocation changes and
transfers on behalf of the Company.
40
<PAGE>
All records and accounts relating to the Separate Accounts and the
Funds will be maintained by the Company. All financial transactions
will be handled by the Company. All reports required to be made and
information required to be given will be provided by Andesa on behalf
of the Company.
Independent Auditors
KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut, are the
independent auditors for the Separate Account and for the Company. The
services provided to the Separate Account include primarily the
examination of the Separate Account's financial statements and the
review of filings made with the SEC.
Year 2000
Aetna Inc. (referred to collectively with its subsidiaries and
affiliates as "Aetna"), has developed and is currently executing a plan
to make its computer systems and applications accommodate
date-sensitive information relating to the Year 2000. The plan covers
four stages including (i) inventory, (ii) assessment, (iii) remediation
and (iv) testing and certification. Aetna is currently in the
assessment or remediation stages of its plan for the systems and
applications related to the Separate Account, including those relating
to the Company, and Aeltus Investment Management, Inc., the subadviser
to most Aetna affiliated mutual funds. Testing and certification of
these systems is targeted for completion by mid 1999. The costs of
these efforts will not affect the Separate Account.
The Company, its affiliates and the mutual funds that serve as
investment options for the Separate Account also have relationships
with investment advisers, broker dealers, transfer agents, custodians
or other securities industry participants or other service providers
that are not affiliated with Aetna. Aetna is currently examining its
relationships with third parties as part of its Year 2000 plan. While
the Company believes that United States securities industry
participants generally are preparing their computer systems and
applications to accommodate Year 2000 date-sensitive information,
preparation by third parties is outside the Company's control. There
can be no assurance that failure of third parties to complete adequate
preparations in a timely manner, and any resulting systems
interruptions or other consequences, would not have an adverse effect,
directly or indirectly, on the Separate Account, including, without
limitation, its operation or the valuation of its assets and units.
41
<PAGE>
Tax Matters
General
The following is a discussion of the federal income tax considerations
relating to the Policy. This discussion is based on the Company's
understanding of federal income tax laws as they now exist and are
currently interpreted by the Internal Revenue Service ("IRS"). These
laws are complex, and tax results may vary among individuals. A person
or persons contemplating the purchase of or the exercise of elections
under the Policy described in this Prospectus should seek competent tax
advice.
Federal Tax Status of the Company
The Company is taxed as a life insurance company in accordance with the
Internal Revenue Code of 1986, as amended ("Code"). For federal income
tax purposes, the operations of each Separate Account form a part of
the Company's total operations and are not taxed separately, although
operations of each Separate Account are treated separately for
accounting and financial statement purposes.
Under existing federal income tax law, the Company believes that the
Separate Account investment income and realized net capital gains will
not be taxed to the extent that such income and gains are applied to
increase the reserves under the contracts. Accordingly, the Company
does not anticipate that it will incur any federal income tax liability
attributable to the Separate Account. Therefore, the Company does not
intend to make provisions for any such taxes. However, the Company
reserves the right to make a deduction for such taxes should they be
imposed with respect to such items in the future.
Life Insurance Qualification
As described more fully on page 18, Section 7702 of the Code includes a
definition of life insurance for tax purposes. These rules generally
place limits on the amount of premiums payable under the contract and
the level of cash surrender value. In no event may the total of all
premiums paid exceed the then-current maximum premium limitations
established by federal law for a Policy to qualify as life insurance.
If, at any time, a premium is paid which would result in total premiums
exceeding such maximum premium limitation, we will only accept that
portion of the premium which will make total premiums equal the
maximum. Any part of the premium in excess of that amount will be
returned or applied as otherwise agreed and no further premiums will be
accepted until allowed by the then-current maximum premium limitations
prescribed by law. The Secretary of the Treasury has been granted
authority to prescribe regulations to carry out the purposes of Section
7702, and proposed regulations governing mortality charges were issued
in 1991. The Company believes that the Policy meets the statutory
definition of life insurance. As such, and assuming the diversification
standards of Section 817(h) (discussed below) are satisfied, then
except in limited circumstances (a) death benefits paid under the
Policy should generally be excluded from the gross income of the
beneficiary for federal income tax purposes under Section 101(a)(1) of
the Code, and (b) a
42
<PAGE>
Policyowner should not generally be taxed on the cash value under a
Policy, including increments thereof, prior to actual receipt. The
principal exceptions to these rules are corporations that are subject
to the alternative minimum tax, and thus may be subject to tax on
increments in the Policy's Total Account Value, and Policyowners who
acquire a Policy in a "transfer for value" and thus can become subject
to tax on the portion of the Death Benefit which exceeds the total of
their cost of acquisition and subsequent premium payments.
The Company intends to comply with any future final regulations issued
under Sections 7702 and 817(h) of the Code, and therefore reserves the
right to make such changes as it deems necessary to ensure such
compliance. Any such changes will apply uniformly to affected
Policyowners and will be made only after advance written notice.
General Rules
Upon the surrender or cancellation of any Policy, whether or not it is
a Modified Endowment Contract, the Policyowner will be taxed on the
Surrender Value only to the extent that it exceeds the gross premiums
paid less prior untaxed withdrawals. The amount of any unpaid Policy
Loans will, upon surrender, be added to the Surrender Value and will be
treated for this purpose as if it had been received.
Assuming the Policy is not a Modified Endowment Contract, the proceeds
of any Partial Surrenders are generally not taxable unless the total
amount received due to such surrenders exceeds total premiums paid less
prior untaxed Partial Surrender amounts. However, Partial Surrenders
made within the first 15 Policy Years may be taxable in certain limited
instances where the Surrender Value plus any unpaid Policy debt exceeds
the total premiums paid less the untaxed portion of any prior Partial
Surrenders. This result may occur even if the total amount of any
Partial Surrenders does not exceed total premiums paid to that date.
Loans received under the Policy will ordinarily be considered
indebtedness of the Policyowner, and assuming the Policy is not
considered a Modified Endowment Contract, Policy Loans will not be
treated as current distributions subject to tax. Generally, amounts of
loan interest paid by individuals will be considered nondeductible
"personal interest."
Modified Endowment Contracts
A class of contracts known as "Modified Endowment Contracts" has been
created under Section 7702A of the Code. The tax rules applicable to
loan proceeds and proceeds of a Partial Surrender of any Policy that is
considered to be a Modified Endowment Contract will differ from the
general rules noted above.
A contract will be considered a Modified Endowment Contract if it fails
the "7-pay test." A Policy fails the 7-pay test if, at any time in the
first seven Policy Years, the amount paid into the Policy exceeds the
amount that would have been paid had the Policy provided for the
payment of seven (7) level annual premiums. In the event of a
distribution under the Policy, the Company will notify the Policyowner
if the Policy is a Modified Endowment Contract.
In addition, each Policy is subject to the 7-pay test during the first
seven Policy Years following the time a material change takes effect. A
material change, for
43
<PAGE>
these purposes, includes the exchange of a life insurance policy for
another life insurance policy or the conversion of a term life
insurance policy into a whole life or universal life insurance policy.
In addition, an increase in the future benefits provided constitutes a
material change unless the increase is attributable to (1) the payment
of premiums necessary to fund the lowest Death Benefit payable in the
first seven Policy Years or (2) the crediting of interest or other
earnings with respect to such premiums. A reduction in death benefits
during the first seven Policy Years may also cause a Policy to be
considered a Modified Endowment Contract.
If the Policy is considered to be a Modified Endowment Contract, the
proceeds of any Partial Surrenders, any Policy Loans and most
assignments will be currently taxable to the extent that the Policy's
Total Account Value immediately before payment exceeds gross premiums
paid (increased by the amount of loans previously taxed and reduced by
untaxed amounts previously received). These rules may also apply to
Policy Loans or Partial Surrender proceeds received during the two-year
period prior to the time that a Policy becomes a Modified Endowment
Contract. If the Policy becomes a Modified Endowment Contract, it may
be aggregated with other Modified Endowment Contracts purchased by You
from the Company (and its affiliates) during any one calendar year for
purposes of determining the taxable portion of withdrawals from the
Policy.
A penalty tax equal to 10% of the amount includable in income will
apply to the taxable portion of the proceeds of any Policy Surrender or
Policy Loan received by any Policyowner of a Modified Endowment
Contract who is not an individual. Taxable policy distributions made to
an individual who has not reached the age of 59 1/2 will also be
subject to the penalty tax unless those distributions are attributable
to the individual becoming disabled, or are part of a series of equal
periodic payments made not less frequently than annually for the life
or life expectancy of such individual (i.e., an annuity).
Diversification Standards
Section 817(h) of the Code provides that separate account investments
(or the investments of a mutual fund, the shares of which are owned by
separate accounts of insurance companies) underlying the Policy must be
"adequately diversified" in accordance with Treasury regulations in
order for the Policy to qualify as life insurance. The Treasury
Department has issued regulations prescribing the diversification
requirements in connection with variable contracts. The Separate
Account, through the Funds, intends to comply with these requirements.
Investor Control
In certain circumstances, owners of variable contracts may be
considered the owners for federal income tax purposes of the assets of
the separate account used to support their contracts. In those
circumstances, income and gains from separate account assets would be
includable in the variable contractowner's gross income. In several
rulings published prior to the enactment of Section 817(h), the IRS
stated that a variable contractowner will be considered the owner of
separate account assets if the contractowner possesses incidents of
ownership in those assets, such as the ability to exercise investment
control over the assets. The Treasury Department has also announced, in
connection with the issuance of regulations under Section 817(h)
concerning diversification, that
44
<PAGE>
those regulations "do not provide guidance concerning the circumstances
in which investor control of the investments of a segregated asset
account may cause the investor (i.e., You), rather than the insurance
company, to be treated as the owner of the assets in the account." This
announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct
their investments to particular Funds without being treated as owners
of the underlying assets." As of the date of this Prospectus, no such
guidance has been issued.
The ownership rights under the Policy are similar to, but different in
certain respects from those described by the IRS in pre-Section 817(h)
rulings in which it was determined that Policyowners were not owners of
separate account assets. For example, a Policyowner has additional
flexibility in allocating premium payments and account values. While
the Company does not believe that these differences would result in a
Policyowner being treated as the owner of a pro rata portion of the
assets of the Separate Account, there is no regulation or ruling of the
IRS that confirms this conclusion. In addition, the Company does not
know what standards will be set forth, if any, in the regulations or
rulings which the Treasury Department has stated it expects to issue.
The Company therefore reserves the right to modify the Policy as
necessary or to limit the number of variable options available to
attempt to prevent a Policyowner from being considered the owner of a
pro rata share of the assets of the Separate Account.
Other Tax Considerations
Business-owned life insurance may be subject to certain additional
rules. Section 264(a)(1) of the Code generally prohibits employers from
deducting premiums on policies covering officers, employees or other
financially interested parties where the employer is a beneficiary
under the Policy. Additions to the Policy's Total Account Value may
also be subject to tax under the corporation alternative minimum tax
provisions. In addition, Section 264(a)(4) of the Code limits the
Policyowner's deduction for interest on loans taken against life
insurance covering the lives of officers, employees, or other
financially interested in the Policyowner's trade or business. Under
current tax law, interest may generally be deducted on an aggregate
total of $50,000 of loans per covered life only with respect to life
insurance policies covering each officer, employee or others who may
have a financial interest in the Policyowner's trade or business and
are considered key persons.
Generally, a key person means an officer or a 20 percent owner.
However, the number of key persons will be limited to the greater of
(a) 5 individuals, or (b) the lesser of 5 percent of the total officers
and employees of the taxpayor or 20 individuals. Deductible interest
for these contracts will be capped based on applicable Moody's
Corporate Bond Rate. Section 264 (f) denies a deduction for a portion
of a Policyowner's otherwise deductible interest that is allocable to
unborrowed policy cash values. The nondeductible interest amount is the
amount that bears the same ratio to such interest as the company's
average unborrowed cash values of life insurance and annuity policies
issued after June 8, 1997 bears to the sum of the average unborrowed
cash values of policies plus the average adjusted tax basis of other
assets owned by the company. This provision does not apply to policies
in which the insured is a 20 percent owner, officer, director or
employee of the business, including policies jointly covering such
individual and his or her spouse. The rule also will not apply where
the
45
<PAGE>
Policyowner is a natural person, unless a trade or business is directly
or indirectly the beneficiary of the policy.
Depending on the circumstances, the exchange of a policy, a change in
the Policy's Death Benefit Option, a Policy Loan, a Full or Partial
Surrender, a change in Ownership or an assignment of the Policy may
have federal income tax consequences. In addition, federal, state and
local transfer, estate, inheritance and other tax consequences of
policy ownership, premium payments and receipt of policy proceeds
depend on the circumstances of each Policyowner or beneficiary. Any
person concerned about these tax implications should consult a
competent tax adviser before initiating any transaction.
46
<PAGE>
Misc. Policy Provisions
The Policy
The Policy which You receive and the application You make when You
purchase the Policy are the whole contract. A copy of the application
is attached to the Policy when it is issued to You. Any application for
changes, once approved by us, will become part of the Policy.
Payment of Benefits
All benefits are payable at our Home Office. We may require submission
of the Policy before we grant loans, make changes or pay benefits.
Age
If age is misstated on the application, the amount payable on death
will be that which would have been purchased by the most recent monthly
deduction at the current age.
Incontestability
We will not contest coverage under the Policy after the Policy has been
in force during the lifetime of the insured for a period of two years
from the Policy's Date of Issue. Our right to contest coverage is not
affected by the Guaranteed Death Benefit provision.
For coverage which takes effect on a later date (e.g., an increase in
coverage), we will not contest such coverage after it has been in force
during the lifetime of the Insured more than two years from its
effective date.
Suicide
In most states, if the Insured commits suicide within two years from
the Date of Issue, the only benefit paid will be the sum of:
a) premiums paid less amounts allocated to the Separate Account; and
b) the Separate Account Value on the date of suicide, plus the portion
of the Monthly Deduction from the Separate Account Value, minus
c) the amount necessary to repay any loans in full and any interest
earned on the Loan Account Value transferred to the Separate Account
Value, and any surrenders from the Fixed Account.
If the Insured commits suicide within two years from the effective date
of any increase in coverage, we will pay as a benefit only the Monthly
Deduction for the increase, in lieu of the face amount of the increase.
All amounts described in (a) and (c) above will be calculated as of the
date of death.
Coverage Beyond Maturity
You may, by written request at any time before the Maturity Date of
this Policy, elect to continue coverage beyond the Maturity Date. At
Age 100, the Separate Account Value will be transferred to the Fixed
Account. If coverage beyond
47
<PAGE>
maturity is elected, we will continue to credit interest to the Total
Account Value of this Policy. Monthly Deductions will be calculated
with a Cost of Insurance rate equal to zero. (This provision is not
available in certain states including New York.)
At this time, uncertainties exist regarding the tax treatment of the
Policy should it continue beyond the Maturity Date. You should
therefore consult with Your tax advisor prior to making this election.
(See "Tax Matters.")
Nonparticipation
The Policy is not entitled to share in the divisible surplus of the
Company. No dividends are payable.
48
<PAGE>
Appendix A
Illustrations of Death Benefit, Total Account Values and Surrender Values,
Corporate Vul
The following tables illustrate how the Death Benefit, Total Account Values and
Surrender Values of a Policy change with the investment experience of the Fund.
The tables show how the Death Benefit, Total Account Values, and Surrender
Values of a Policy issued to an insured of a given age and a given premium
would vary over time if the investment return on the assets held in each Fund
were a uniform, gross, after tax annual rate of 0%, 6%, and 12%, respectively.
Tables I, II, V and VI illustrate Policies issued on a unisex basis, age 45, in
the preferred nonsmoker rate class. Tables III, IV, VII and VIII illustrate
Policies issued on a unisex basis, age 45 in the nonsmoker rate class. Tables I
through IV show values under the Guideline Premium Test for the definition of
life insurance, and Tables V through VIII show values under the Cash Value
Accumulation Test for the definition of life insurance. The Death Benefit,
Total Account Values, and Surrender Values would be different from those shown
if the gross annual investment rates of return averaged 0%, 6%, and 12%,
respectively, over a period of years, but fluctuated above and below those
averages for individual Policy Years.
The second column of each table shows the accumulated values of the premiums
paid at an assumed interest rate of 5%. The third through fifth columns
illustrate the Death Benefit of a Policy over the designated period. The sixth
through eighth columns illustrate the Total Account Values, while the ninth
through the eleventh columns illustrate the Surrender Values of each Policy
over the designated period. Tables I, III, V and VII assume that the maximum
Cost of Insurance allowable under the Policy are charged in all Policy Years.
These tables also assume that the maximum allowable mortality and expense risk
charge of 0.90% on an annual basis, the maximum allowable administrative
expense charge of 0.50% on an annual basis, and the maximum allowable premium
load of 10% up to the first year's Guaranteed Death Benefit Premium to age 80
and 5% over the Guaranteed Death Benefit Premium to age 80, are assessed in the
first Policy Year and 5% on all premium in all Policy Years thereafter. Tables
II, IV, VI and VIII assume that the current scale of Cost of Insurance Rates
applies during all Policy Years. These tables also assume the current mortality
and expense risk charge of 0.70% on an annual basis for the first 10 Policy
Years and 0.20% for Policy Years 11 and thereafter, the current administrative
expense charge of 0.30% on an annual basis, and the current premium load of 7%
up to the first year's Guaranteed Death Benefit Premium to age 80 and 2% over
the Guaranteed Death Benefit Premium to age 80 are assessed in the first Policy
Year and 2% on all premium in all Policy Years thereafter.
The amounts shown for Death Benefit, Surrender Values, and Total Account Values
reflect the fact that the net investment return is lower than the gross, after
tax return on the assets held in each Fund as a result of expenses paid by each
Fund and Separate Account charges levied.
The values shown take into account the daily investment advisory fee and other
Fund expenses paid by each Fund. See the individual prospectuses for each Fund
for more information.
In addition, a charge for mortality and expense risks of 0.70% for Policy Years
1-10 and 0.20% beginning in Policy Year 11 and thereafter (0.90% maximum) and
administrative expenses of 0.30% (0.50% maximum) has also been reflected in the
values shown. In addition, a charge for mortality and expense risks of 0.70%
for Policy Years 1-10 and 0.20% beginning in Policy Year 11 and thereafter
(0.90% maximum) and administrative expenses of 0.30% (0.50% maximum) has also
been reflected in the values shown. After deduction of these amounts, the
illustrated net annual return is -2.06%, 3.94% and 9.94% on the maximum charge
basis and -1.66%, 4.34% and 10.34% on a current charge basis for Policy Years
1-10. The illustrated net annual return is -1.16%, 4.84% and 10.84% on a
current charge basis for Policy Years 11 and thereafter.
49
<PAGE>
A weighted average has been used for the illustrations assuming that the Policy
Owner has invested in the Funds as follows: 4% in Aetna Variable Fund d/b/a
Aetna Growth and Income VP; 8% in Aetna Income Shares d/b/a Aetna Bond VP; 10%
in Aetna Variable Encore Fund d/b/a Aetna Money Market VP; 7% in Aetna Balanced
VP (Formerly Aetna Investment Advisers Fund, Inc.); 0% in Aetna Value
Opportunity VP (Formerly Aetna Variable Capital Appreciation Portfolio); 0% in
Aetna Index Plus Large Cap VP (Formerly Aetna Variable Index Plus Portfolio); 0%
in Aetna Growth VP (Formerly Aetna Variable Growth Portfolio); 0% in Aetna Small
Company VP (Formerly Aetna Variable Small Company Portfolio); 20% in Fidelity's
Variable Insurance Products Fund--Equity-Income Portfolio; 8% in Fidelity's
Variable Insurance Products Fund--Growth Portfolio; 0% in Fidelity's Variable
Insurance Products Fund--High Income Portfolio; 1% in Fidelity's Variable
Insurance Products Fund--Overseas Portfolio; 2% in Fidelity's Variable Insurance
Products Funds II--Asset Manager Portfolio; 9% in Fidelity's Variable Insurance
Products Fund II--Contrafund Portfolio; 7% in the Janus Aspen Aggressive Growth
Portfolio; 3% in Janus Aspen Balanced Portfolio; 0% in Janus Aspen Flexible
Income Portfolio; 4% in Janus Aspen Growth Portfolio; 5% in the Janus Aspen
Worldwide Growth Portfolio; 0% in MFS Total Return Series; 0% in MFS World
Governments Series; 0% Oppenheimer Aggressive Growth Fund (Formerly Oppenheimer
Capital Appreciation Fund); 0% Oppenheimer Global Securities Fund; 0%
Oppenheimer Growth & Income Fund; 0% Oppenheimer Strategic Bond Fund; 7% in
Portfolio Partners, Inc. MFS Emerging Equities Portfolio; 1% in Portfolio
Partners, Inc. MFS Research Growth Portfolio; 0% in Portfolio Partners, Inc. MFS
Value Equity Portfolio; 4% in Portfolio Partners, Inc. Scudder International
Growth Portfolio and 0% in Portfolio Partners, Inc. T. Rowe Price Growth Equity
Portfolio.
The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since we are 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%, 6%, or 12%
by an amount sufficient to cover the tax charges in order to produce the Death
Benefit, Total Account Values, and Surrender Values illustrated.
The tables illustrate the Policy Values that would result based upon the
hypothetical investment rates of return if premiums were paid as indicated, if
all Net Premiums were allocated to Variable Life Account B, and if no Policy
loans have been made. The tables are also based on the assumptions that the
Policyowner has not requested an increase or decrease in the Specified Amount
of the Policy, and no partial surrenders have been made.
Upon request, we will provide an illustration based upon the proposed Insured's
age, and underwriting classification, the Specified Amount or premium
requested, the proposed frequency of premium payments and any available riders
requested.
The hypothetical gross annual investment return assumed in such an illustration
will not exceed 12%.
50
<PAGE>
Appendix B
Illustrations of Death Benefit, Total Account Values and Surrender Values,
Corporate VUL II
The following tables illustrate how the Death Benefit, Total Account Values and
Surrender Values of a Policy change with the investment experience of the Fund.
The tables show how the Death Benefit, Total Account Values, and Surrender
Values of a Policy issued to an insured of a given age and a given premium would
vary over time if the investment return on the assets held in each Fund were a
uniform, gross, after tax annual rate of 0%, 6%, and 12%, respectively.
Tables I, II, VII and VIII illustrate Policies issued on a unisex basis, age 45,
in the preferred nonsmoker rate class for fully underwriting issue. Tables III,
IV, IX and X illustrate Policies issued on a unisex basis, age 45 in the
nonsmoker rate class for guaranteed issue underwriting. Tables V, VI, XI and XII
illustrate Policies issued on a unisex basis, age 45 in the nonsmoker rate class
for simplified issue underwriting. Tables I through VI show values under the
Guideline Premium Test for the definition of life insurance, and Tables VII
through XII show values under the Cash Value Accumulation Test for the
definition of life insurance. The Death Benefit, Total Account Values, and
Surrender Values would be different from those shown if the gross annual
investment rates of return averaged 0%, 6%, and 12%, respectively, over a period
of years, but fluctuated above and below those averages for individual Policy
Years.
The second column of each table shows the accumulated values of the premiums
paid at an assumed interest rate of 5%. The third through fifth columns
illustrate the Death Benefit of a Policy over the designated period. The sixth
through eighth columns illustrate the Total Account Values, while the ninth
through the eleventh columns illustrate the Surrender Values of each Policy over
the designated period. Tables I, III, V, VII, XI and VI assume that the maximum
Cost of Insurance allowable under the Policy are charged in all Policy Years.
These tables also assume that the maximum allowable mortality and expense risk
charge of 0.90% on an annual basis, the maximum allowable premium load of 15% up
to the first year's Target Premium and 6% over the Target Premium, are assessed
in the first Policy Year; the maximum allowable premium load of 10% up to the
second year's Target Premium and 6% over the Target Premium, are assessed in the
second Policy Year and 6% on all premium in all Policy Years thereafter, and an
assumed average Premium Tax charge of 2% on all premium in all Policy Years.
Tables II, IV, VI, VIII, X and XII assume that the current scale of Cost of
Insurance Rates applies during all Policy Years. These tables also assume the
current mortality and expense risk charge of 0.70% on an annual basis for the
first 10 Policy Years and 0.35% for Policy Years 11 and thereafter, the current
premium load of 10.5% up to the first year's Target Premium and 2.5% over the
Target Premium are assumed in the first Policy Year, the current premium load of
7.5% up to the second through the fifth years' Target Premiums and 1.5% over the
Target Premiums are assumed in the second through the fifth policy years, the
current premium load of 3.5% up to the sixth and the seventh years' Target
premiums and 1.5% over the Target Premiums are assumed in the sixth and the
seventh policy years, 1.5% on all premium in all Policy Years thereafter, and an
51
<PAGE>
assumed average Premium Tax charge of 2% on all premium in all Policy Years. The
values in all Tables also take into account a weighted average of Fund expenses
as described below. See the Prospectus for each Fund for the Fund's particular
level of total expenses.
A weighted average has been used for the illustrations assuming that the Policy
Owner has invested in the Funds as follows: 4% in Aetna Variable Fund d/b/a
Aetna Growth and Income VP; 8% in Aetna Income Shares d/b/a Aetna Bond VP; 10%
in Aetna Variable Encore Fund d/b/a Aetna Money Market VP; 7% in Aetna Balanced
VP (Formerly Aetna Investment Advisers Fund, Inc.); 0% in Aetna Value
Opportunity VP (Formerly Aetna Variable Capital Appreciation Portfolio); 0% in
Aetna Index Plus Large Cap VP (Formerly Aetna Variable Index Plus Portfolio); 0%
in Aetna Growth VP (Formerly Aetna Variable Growth Portfolio); 0% in Aetna Small
Company VP (Formerly Aetna Variable Small Company Portfolio); 20% in Fidelity's
Variable Insurance Products Fund--Equity-Income Portfolio; 8% in Fidelity's
Variable Insurance Products Fund--Growth Portfolio; 0% in Fidelity's Variable
Insurance Products Fund--High Income Portfolio; 1% in Fidelity's Variable
Insurance Products Fund--Overseas Portfolio; 2% in Fidelity's Variable Insurance
Products Funds II--Asset Manager Portfolio; 9% in Fidelity's Variable Insurance
Products Fund II--Contrafund Portfolio; 7% in the Janus Aspen Aggressive Growth
Portfolio; 3% in Janus Aspen Balanced Portfolio; 0% in Janus Aspen Flexible
Income Portfolio; 4% in Janus Aspen Growth Portfolio; 5% in the Janus Aspen
Worldwide Growth Portfolio; 0% in MFS Total Return Series; 0% in MFS World
Governments Series; 0% Oppenheimer Aggressive Growth Fund (Formerly Oppenheimer
Capital Appreciation Fund); 0% Oppenheimer Global Securities Fund; 0%
Oppenheimer Growth & Income Fund; 0% Oppenheimer Strategic Bond Fund; 7% in
Portfolio Partners, Inc. MFS Emerging Equities Portfolio; 1% in Portfolio
Partners, Inc. MFS Research Growth Portfolio; 0% in Portfolio Partners, Inc. MFS
Value Equity Portfolio; 4% in Portfolio Partners, Inc. Scudder International
Growth Portfolio and 0% in Portfolio Partners, Inc. T. Rowe Price Growth Equity
Portfolio.
The amounts shown for Death Benefit, Surrender Values, and Total Account Values
reflect the fact that the net investment return is lower than the gross, after
tax return on the assets held in each Fund as a result of expenses paid by each
Fund and the Separate Account charges described above. After deduction of these
amounts, the illustrated net annual return is -1.56%, 4.44% and 10.44% on the
maximum charge basis and -1.36%, 4.64% and 10.64% on a current charge basis for
Policy Years 1-10. The illustrated net annual return is -1.01%, 4.29% and
10.29% on a current charge basis for Policy Years 11 and thereafter.
The hypothetical values shown in the tables do not reflect any Separate Account
charges for federal income taxes, since we are 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%, 6%, or 12% by an
amount sufficient to cover the tax charges in order to produce the Death
Benefit, Total Account Values, and Surrender Values illustrated.
The tables illustrate the Policy Values that would result based upon the
hypothetical investment rates of return if premiums were paid as indicated, if
all Net Premiums were allocated to Variable Life Account B, and if no Policy
loans have been made. The tables are also based on the assumptions that the
Policyowner has not requested an increase or decrease in the Specified Amount
52
<PAGE>
of the Policy, and no partial surrenders have been made.
Upon request, we will provide an illustration based upon the proposed Insured's
age, and underwriting classification, the Specified Amount or premium requested,
the proposed frequency of premium payments and any available riders requested.
The hypothetical gross annual investment return assumed in such an illustration
will not exceed 12%.
53
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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.
UNDERTAKING PURSUANT TO RULE 484
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 will be governed by the final
adjudication of such issue.
REPRESENTATION PURSUANT TO SECTION 26(e)(2)(A) OF
THE INVESTMENT COMPANY ACT OF 1940
Aetna Life Insurance and Annuity Company represents that the fees and charges
deducted under the policies covered by this registration statement, 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.
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 7 TO THE REGISTRATION STATEMENT
This Post-Effective Amendment No. 7 to Registration Statement No. 33-75248 is
comprised of the following papers and documents:
[bullet] The facing sheet.
[bullet] One Corporate Variable Universal Life Prospectus (Corporate VUL)
<PAGE>
consisting of 64 pages
[bullet] The undertaking to file reports
[bullet] The undertaking pursuant to Rule 484
[bullet] Representation pursuant to Section 26(e)(2)(A) of the Investment
Company Act of 1940
[bullet] The signatures
[bullet] Written consents of the following persons:
A. Consent of Counsel (included as part of Exhibit No. 2 below)
B. Actuarial Consent (included as part of Exhibit No. 6 below)
C. Consent of Independent Auditors (included as Exhibit No. 7 below)
The following Exhibits:
1. Exhibits required by paragraph A of instructions to exhibits for
Form N-8B-2:
(1) Resolution establishing Variable Life Account B(1)
(2) Not Applicable
(3)(i) Specialty Broker Agreement
(3)(ii) Life Insurance Broker-Dealer Agreements(2)
(3)(iii) Restated and Amended Third Party Administration and
Transfer Agent Agreement(3)
(4) Not Applicable
(5)(i) Corporate VUL Policy (Containing information about Cash
Value Accumulation Method of Death Benefit Options
(70180-93US))(4)
(5)(ii) Corporate VUL Policy (Containing Tables of percentages for
the Guideline Premium Method for Death Benefit Options
(70182-93US))(4)
(5)(iii) Term Rider (70181-94US) to Corporate VUL Policy
70182-93US(4)
(5)(iv) Amendment Rider (70284-1998) to CVUL Policy 70180-93US
(5)(v) CVULII Policy (70180-1998US)
(5)(vi) CVULII Policy (70182-1998US)
(5)(vii) Term Insurance Rider (70181-1998US) to policies
70180-1998US and 70182-1998US
(6)(i) Certificate of Incorporation of Aetna Life Insurance and
Annuity Company(5)
(6)(ii) Amendment of Certificate of Incorporation of Aetna Life
Insurance and Annuity Company(6)
(6)(iii) By-Laws as amended September 17, 1997 of Aetna Life
Insurance and Annuity Company(7)
(7) Not Applicable
(8)(i) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996 and March 1, 1996(6)
(8)(ii) Fifth Amendment dated as of May 1, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated
<PAGE>
February 1, 1994 and amended on December 15, 1994,
February 1, 1995, May 1, 1995, January 1, 1996
and March 1, 1996(8)
(8)(iii) Sixth Amendment dated November 6, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996, March 1, 1996 and May 1, 1997(9)
(8)(iv) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company, Variable Insurance Products Fund II
and Fidelity Distributors Corporation dated February 1,
1994 and amended on December 15, 1994, February 1, 1995,
May 1, 1995, January 1, 1996 and March 1, 1996(6)
(8)(v) Fifth Amendment dated as of May 1, 1997 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996, and March 1, 1996(8)
(8)(vi) Sixth Amendment dated as of January 20, 1998 to the Fund
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May 1,
1995, January 1, 1996, March 1, 1996 and May 1, 1997
(8)(vii) Service Agreement between Aetna Life Insurance and Annuity
Company and Fidelity Investment Institutional Operations
Company dated November 1, 1995(8)
(8)(viii) Amendment dated January 1, 1997 to Service Agreement
between Aetna Life Insurance and Annuity Company and
Fidelity Investments Institutional Operations Company dated
as of November 1, 1995(10)
(8)(ix) Fund Participation Agreement among Janus Aspen Series and
Aetna Life Insurance and Annuity Company and Janus Capital
Corporation dated December 8, 1997(11)
(8)(x) Service Agreement between Janus Capital Corporation and
Aetna Life Insurance and Annuity Company dated December 8,
1997(11)
(8)(xi) Fund Participation Agreement among MFS Variable Insurance
Trust, Aetna Life Insurance and Annuity Company and
Massachusetts Financial Services Company(12)
(8)(xii) First Amendment dated September 3, 1996 to Fund
Participation Agreement among MFS Variable Insurance Trust,
Aetna Life Insurance and Annuity Company and Massachusetts
Financial Services Company(13)
(8)(xiii) Second Amendment dated March 14, 1997 to Fund Participation
Agreement among MFS Variable Insurance Trust, Aetna Life
Insurance and Annuity Company and Massachusetts Financial
Services Company(14)
(8)(xiv) Fund Participation Agreement between Aetna Life Insurance
and Annuity Company and Oppenheimer Variable Annuity
Account Funds and Oppenheimer Funds, Inc.(14)
(8)(xv) Service Agreement between Oppenheimer Funds, Inc. and
Aetna Life Insurance and Annuity Company(14)
(9) Not Applicable
(10)(i) Application (70158-93)
(10)(ii) Application (70159-93)
(10)(iii) Application Supplement (70276-97 (3/98))
(10)(iv) Application Supplement (70277-97 (3/98))
(10)(v) Application Supplement (70183-93)
(10)(vi) Premium Allocation Supplement (AppFunds)
2. Opinion and Consent of Counsel*
3. Not Applicable
4. Not Applicable
5. Not Applicable
6 Actuarial Opinion and Consent*
<PAGE>
7. Consent of Independent Auditors*
8. Copy of Power of Attorney(15)
*To be filed by Amendment
1. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on
February 16, 1996 (Accession No. 0000912057-96-0027723).
2. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form S-6 (File No. 33-76004), as filed electronically on
February 16, 1996 (Accession No. 0000912057-96-0027723).
3. Incorporated by reference to Post-Effective Amendment No. 6 to Registration
Statement on Form S-6 (File No. 33-75248), as filed electronically on
November 26, 1997 (Accession No. 0000950146-97-001792).
4. Incorporated by reference to Post-Effective Amendment No. 4 to Registration
Statement on Form S-6 (File No. 33-75248), as filed electronically on April
22, 1997.
5. Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement on Form S-1 (File No. 33-60477), as filed electronically on April
15, 1996.
6. Incorporated by reference to Post-Effective Amendment No. 12 to Registration
Statement on Form N-4 (File No. 33-75964), as filed electronically on
February 11, 1997.
7. Incorporated by reference to Post-Effective Amendment No. 12 to Registration
Statement on Form N-4 (File No. 33-91846), as filed electronically on
October 30, 1997 (Accession No. 0000950146-97-001589).
8. Incorporated by reference to Post-Effective Amendment No. 3 to Registration
Statement on Form N-4 (File No. 33-88720), as filed electronically on June
28, 1996.
9. Incorporated by Reference to Post-Effective Amendment No. 16 to Registration
Statement on Form N-4 (File No. 33-75964), as filed electronically on
February 9, 1998 (Accession No. 0000950146-98-000179).
10. Incorporated by reference to Post-Effective Amendment No. 30 to Registration
Statement on Form N-4 (File No. 33-34370), as filed electronically on
September 29, 1997 (Accession No. 0000950146-97-001485).
11. Incorporated by reference to Post-Effective Amendment No. 10 to Registration
Statement on Form N-4 (File No. 33-75992), as filed electronically on
December 31, 1997 (Accession No. 0000950146-97-001982).
12. Incorporated by reference Post-Effective Amendment No. 26 to Registration
Statement on Form N-4 (File No. 33-34370), as filed electronically on
February 21, 1997 (Accession No. 0000950146-97-000226).
13. Incorporated by reference Post-Effective Amendment No. 24 to Registration
Statement on Form N-4 (File No. 33-34370), as filed electronically on
September 16, 1996 (Accession No. 0000912057-96-020393).
14. Incorporated by reference to Post-Effective Amendment No. 27 to Registration
Statement on Form N-4 (File No. 33-34370), as filed electronically on
April 16, 1997 (Accession No. 0000950146-97-000617).
15. Incorporated by reference to Pre-Effective Amendment No. 1 to Registration
Statement on Form S-6 (File No. 333-27337), as filed electronically on
December 9, 1997 (Accession No. 0000950146-97-001872). In addition, a
certified copy of the resolution adopted by the Depositor's Board of
Directors authorizing filings pursuant to a power of attorney as required by
Rule 478 under the Securities Act of 1933 is incorporated by reference to
Post-Effective Amendment No. 5 to Registration Statement on Form N-4 (File
No. 33-75986), as filed electronically on April 12, 1996 (Accession No.
0000912057-96-006383).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Variable Life Account B of Aetna Life Insurance and Annuity Company, has duly
caused this Post-Effective Amendment No. 7 to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, and the seal
of the Depositor to be hereunto affixed and attested, all in the City of
Hartford, and State of Connecticut, on this 24th day of February, 1998.
VARIABLE LIFE ACCOUNT B OF AETNA LIFE
INSURANCE AND ANNUITY COMPANY
(Registrant)
(SEAL)
ATTEST: /s/ Karen A. Peddle
---------------------------------
Karen A. Peddle
Assistant Corporate Secretary
By: AETNA LIFE INSURANCE AND ANNUITY COMPANY
(Depositor)
By: Thomas J. McInerney*
---------------------------------------
Thomas J. McInerney
Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 7 to the Registration Statement has been signed below by the
following persons in the capacities indicated and on the dates indicated.
Signature Title Date
Thomas J. McInerney* Director and President )
- ----------------------------- (Principal Executive Officer) )
Thomas J. McInerney )
)
)
) February
J. Scott Fox* Director ) 24, 1998
- ----------------------------- )
J. Scott Fox )
)
)
Timothy A. Holt* Director )
- ----------------------------- )
Timothy A. Holt )
<PAGE>
John Y. Kim* Director )
- ----------------------------- )
John Y. Kim )
)
)
Shaun P. Mathews* Director )
- ----------------------------- )
Shaun P. Mathews )
)
)
Thomas P. Waldron* Director )
- ----------------------------- )
Thomas P. Waldron )
)
)
Deborah Koltenuk* Vice President and Treasurer, )
- ----------------------------- Corporate Controller )
Deborah Koltenuk )
By: /s/ Mary Katherine Johnson
______________________________
Mary Katherine Johnson
*Attorney-in-Fact
<PAGE>
VARIABLE LIFE ACCOUNT B
EXHIBIT INDEX
Exhibit No. Exhibit Page
- ----------- ------- ----
99-1.1 Resolution of the Board of Directors of Aetna Life *
Insurance and Annuity Company establishing Variable Life
Account B
99-1.3(i) Specialty Broker Agreement _____
99-1.3(ii) Life Insurance Broker-Dealer Agreements *
99-1.3(iii) Restated and Amended Third Party Administration and *
Transfer Agent Agreement
99-1.5(i) Corporate VUL Policy (Containing information about Cash *
Value Accumulation Method of Death Benefit Options)
(70180-93US)
99-1.5(ii) Corporate VUL Policy (Containing Tables of percentages *
for the Guideline Premium Method for Death Benefit
Options) (70182-93US)
99-1.5(iii) Term Rider (70181-94US) to Corporate VUL Policy *
70182-93US
99-1.5(iv) Amendment Rider (70284-1998) to CVUL Policy 70180-93US _____
99-1.5(v) CVULII Policy (70180-1998US) _____
99-1.5(vi) CVULII Policy (70182-1998US) _____
99-1.5(vii) Term Insurance Rider (70181-1998US) to policies _____
70180-1998US and 70182-1998US
99-1.6(i) Certificate of Incorporation of Aetna Life Insurance and *
Annuity Company
99-1.6(ii) Amendment of the Certificate of Incorporation of Aetna *
Life Insurance and Annuity Company
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-1.6(iii) By-Laws as amended September 17, 1997 of Aetna Life *
Insurance and Annuity Company
99-1.8(i) Fund Participation Agreement between Aetna Life *
Insurance and Annuity Company, Variable Insurance
Products Fund and Fidelity Distributors Corporation
dated February 1, 1994 and amended on December 15, 1994,
February 1, 1995, May 1, 1995, January 1, 1996 and March
1, 1996
99-1.8(ii) Fifth Amendment dated as of May 1, 1997 to the Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May
1, 1995, January 1, 1996 and March 1, 1996
99-1.8(iii) Sixth Amendment dated November 6, 1997 to the Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May
1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997
99-1.8(iv) Fund Participation Agreement between Aetna Life *
Insurance and Annuity Company, Variable Insurance
Products Fund II and Fidelity Distributors Corporation
dated February 1, 1994 and amended on December 15, 1994,
February 1, 1995, May 1, 1995, January 1, 1996 and March
1, 1996
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-1.8(v) Fifth Amendment dated as of May 1, 1997 to the Fund *
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May
1, 1995, January 1, 1996, and March 1, 1996
99-1.8(vi) Sixth Amendment dated as of January 20, 1998 to the Fund _____
Participation Agreement between Aetna Life Insurance and
Annuity Company, Variable Insurance Products Fund II and
Fidelity Distributors Corporation dated February 1, 1994
and amended on December 15, 1994, February 1, 1995, May
1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997
99-1.8(vii) Service Agreement between Aetna Life Insurance and *
Annuity Company and Fidelity Investment Institutional
Operations Company dated November 1, 1995
99-1.8(viii) Amendment dated January 1, 1997 to Service Agreement *
between Aetna Life Insurance and Annuity Company and
Fidelity Investments Institutional Operations Company
dated as of November 1, 1995
99-1.8(ix) Fund Participation Agreement among Janus Aspen Series *
and Aetna Life Insurance and Annuity Company and Janus
Capital Corporation dated December 8, 1997
99-1.8(x) Service Agreement between Janus Capital Corporation and *
Aetna Life Insurance and Annuity Company dated December
8, 1997
99-1.8(xi) Fund Participation Agreement among MFS Variable Insurance *
Trust, Aetna Life Insurance and Annuity Company and
Massachusetts Financial Services Company
99-1.8(xii) First Amendment dated September 3, 1996 to Fund *
Participation Agreement among MFS Variable Insurance
Trust, Aetna Life Insurance and Annuity Company and
Massachusetts Financial Services Company
99-1.8(xiii) Second Amendment dated March 14, 1997, to Fund Participation *
Agreement among MFS Variable Insurance Trust, Aetna Life
Insurance and Annuity Company and Massachusetts Financial
Services Company
99-1.8(xiv) Fund Participation Agreement between Aetna Life Insurance *
and Annuity Company and Oppenheimer Variable Annuity
Account Funds and Oppenheimer Funds, Inc.
99-1.8(xv) Service Agreement between Oppenheimer Funds, Inc. and *
Aetna Life Insurance and Annuity Company.
99-1.10(i) Application (70158-93) _____
99-1.10(ii) Application (70159-93) _____
99-1.10(iii) Application Supplement (70276-97(3/98)) _____
99-1.10(iv) Application Supplement (70277-97(3/98)) _____
*Incorporated by reference
<PAGE>
Exhibit No. Exhibit Page
- ----------- ------- ----
99-1.10(v) Application Supplement (70183-93) _____
99-1.10(vi) Premium Allocation Supplement (APPFunds) _____
99-2 Opinion and Consent of Counsel **
99-6 Actuarial Opinion and Consent **
99-7 Consent of Independent Auditors **
99-8 Copy of Power of Attorney *
*Incorporated by reference
**To be filed by amendment
SPECIALTY BROKER
AGREEMENT
SPECIALTY BROKER
<PAGE>
SPECIALTY BROKER AGREEMENT
SPECIALTY BROKER AGREEMENT between AETNA LIFE INSURANCE AND ANNUITY COMPANY,
with offices at 151 Farmington Avenue, Hartford, Connecticut 06156 (referred to
in this agreement as the "Company") and SPECIALTYBROKER at ADDRESS1, ADDRESS2,
ADDRESS3 (referred to in this agreement as "Specialty Broker").
Specialty Broker has read and fully understands the terms and conditions of this
Specialty Broker Agreement (the "Agreement"), and its attachments.
To signify their agreement to the following provisions, Company and Specialty
Broker have caused this instrument to be executed by their duly authorized
representatives.
Signed at____________________________on_____________________.
Effective:
SPECIALTY BROKER Aetna Life Insurance and Annuity Company
_____________________________________ ______________________________________
Specialty Broker Vice President
By: _________________________________
(Please print name and title)
- --------------------------------------------------------------------------------
Life Code No. ________________ Federal Tax Id. No.___________________
Aetna Life Insurance and Annuity Company
Code No. _____
<PAGE>
1. Appointment
The Company wishes to appoint The Specialty Broker as a specialty broker
of the Company, and Specialty Broker agrees to accept such appointment, subject
to the terms and conditions of this Agreement.
2. Status of Specialty Broker
Nothing contained in this Agreement shall be construed to create the
relationship of employer and employee between the Company and Specialty Broker.
The Specialty Broker is acting as an independent contractor only and not as an
employee, partner, joint venturer or associate of the Company.
3. Duties of the Specialty Broker
(a) The Specialty Broker is authorized to solicit and submit to the
Company personally or through its properly licensed agents or brokers (referred
to in this Agreement as "Agents") applications for the Company's Individual Life
Insurance products listed in the Company's Standard Schedule of Life Insurance
Specialty Broker Compensation ("Compensation Schedule"), to deliver the
policies, to collect first premiums, and to service the business.
(b) The Specialty Broker shall exercise reasonable due care for the
faithful performance, fidelity and honesty of its Agents and employees, and will
maintain responsibility for all funds collected and business done by or
entrusted to the Specialty Broker and its employees.
(c) The Specialty Broker will comply with all requirements of the
Company governing the submission of applications and shall make available to the
Company all information, whether favorable or unfavorable, which comes into the
Specialty Broker's possession concerning the underwriting of any risk.
(d) The Specialty Broker will obligate the Company only to the extent
authorized (1) by this Agreement, and amendments to this Agreement as may be
made by the Company from time to time; (2) by the published rules, procedures
and practices set forth by the Company; and (3) as may be authorized in writing
by an officer of the Company.
(e) The Specialty Broker shall pay all expenses of every nature incurred
in connection with the conduct and maintenance of its agency.
(f) The Specialty Broker will notify the Company in writing of a change
in its chief executive officer or its majority voting stock ownership, if a
corporation; a general partner if a partnership; or the majority ownership of
the agency.
(g) The Specialty Broker shall exercise reasonable care and diligence
and exert its best efforts to ensure that the policies issued under this
Agreement are maintained current and in force. The Specialty Broker shall
promote the interests of the Company as contemplated by this Agreement so as not
to adversely affect the Specialty Broker or Company's business reputation.
<PAGE>
4. Limitations of Specialty Broker's Authority
(a) The Specialty Broker is not authorized on behalf of the Company to
make, alter, modify, waive or change any of the terms, rates, or conditions of
any of the Company's forms, policies, contracts, or advertising materials. The
Specialty Broker shall not discharge contracts or waive forfeitures, quote rates
not approved by the Company, extend the time of payment of any premium, extend
credit, or guarantee dividends.
(b) The Specialty Broker is not authorized and is expressly forbidden on
behalf of the Company to estimate future policy performance except through the
use of authorized projections or illustrations of the Company.
(c) The Specialty Broker is not authorized to receive Company Funds (as
defined in Section 10) except initial premiums, and is not authorized to deduct
compensation, commissions, service fees, or allowances from Company Funds it
collects.
(d) The Specialty Broker has no exclusive territory.
(e) The Specialty Broker shall not hold itself out as an employee,
partner, joint venturer, officer, or associate of the Company; nor as an agent
of the Company in any other manner, or for any other purpose, than is
specifically provided in this Agreement.
5. Bond/Errors & Omissions
Specialty Broker shall maintain Errors & Omissions insurance coverage
and/or a Bond of Indemnity in such amount and in such form as the Company may
from time to time determine and the Specialty Broker shall provide evidence of
such coverage when requested by the Company.
6. Appointment of Agents
(a) The Specialty Broker has the authority to recruit insurance Agents,
at Specialty Broker's expense without any reimbursement from the Company, and
recommend their licensing and appointment to the Company. The Company reserves
the right to refuse to contract, license or appoint any such Agent.
(b) The Specialty Broker may not recruit Agents on behalf of the Company
who act as life insurance wholesalers or distributors without the prior written
approval of the Company. The Specialty Broker must remain at all times the sole
intermediary between the Agent and the Company.
(c) The Specialty Broker shall submit to the Company agreements with
Agents, on Company forms without modification, authorizing the Agents to solicit
life insurance applications for the Company. A copy of each executed agreement
shall be furnished to the Company by the Specialty Broker. These agreements are
not in effect until signed by the Company's authorized representative.
<PAGE>
(d) The Company may terminate an Agent agreement in its sole discretion
and without liability to the Specialty Broker. The Company will provide the
Specialty Broker a written explanation of the specific reasons for the
termination.
(e) The Specialty Broker shall be responsible for keeping its Agents
informed of Company's published rules, procedures, and practices which the
Company provides to the Specialty Broker.
(f) The Specialty Broker shall promptly report to the Company, in
writing, any known or alleged misappropriation of funds by any Agent or employee
regardless of whether such known or alleged misappropriation is with respect to
funds of this Company or funds of any other person or company.
(g) If an Agent terminates his or her relationship with the Specialty
Broker or Company, the Specialty Broker may designate another Agent to provide
service to the policyholder involved; provided, however, that such Agent meets
all of the requirements of this Agreement.
7. Licenses
(a) The Specialty Broker agrees not to solicit any Company products in
any state or jurisdiction unless the Specialty Broker and its writing Agent are
properly licensed in that state or jurisdiction, and, as necessary, registered
with the National Association of Securities Dealers.
(b) The Specialty Broker will be responsible for maintaining in effect
any required licenses to represent the Company and to sell life insurance within
each state in which the Specialty Broker intends to carry on business.
8. Acceptance of Applications
The Specialty Broker is responsible for assuring that applications for
insurance and other Company forms and payments obtained or received from Agents
will be promptly forwarded to the Company. The Company reserves the right in its
sole discretion and without liability to the Specialty Broker to refuse to
accept, approve, or amend any applications submitted by the Specialty Broker.
9. Delivery of Policies
(a) Delivery of a policy may be made only if (1) to the best of the
Specialty Broker or Agent's knowledge and belief, nothing material to the risk
has changed since the initial application for such policy; (2) all required
Company forms and amendments have been signed by the applicant and/or the
insured; (3) the first premium has been fully paid; and (4) delivery is made
within forty-five (45) days from the date the policy is mailed by the Company,
unless the delivery period is extended by the Company.
(b) The Specialty Broker will promptly return to the Company all
policies not delivered to the applicant within the forty-five (45) day period.
Any premium refunded by the Company to the Specialty Broker must be immediately
returned to the applicant.
(c) For each policy issued in a form as applied for and returned for
cancellation on account of non-acceptance by the applicant, or which is
rewritten at Specialty Broker's or Agent's request, the Company reserves the
right to require the Specialty Broker to reimburse the Company for the cost of
underwriting
<PAGE>
requirements and policy reissue, or the Company may elect to charge-back such
costs against any compensation otherwise due the Specialty Broker.
10. Company Funds
Any money due or to become due the Company from customers as premiums or
otherwise are funds of the Company ("Company Funds"). All Company Funds
collected by the Specialty Broker for the Company must be immediately delivered
to the Company and shall not be commingled with the Specialty Broker's personal
funds.
11. Policies Credited
The Specialty Broker will be credited with all life insurance policies
issued by the Company upon application bearing its name as Specialty Broker, or
the name of Agents appointed with the Company through the Specialty Broker.
12. Compensation
(a) The Specialty Broker shall receive compensation in accordance with
the Compensation Schedule in force on the date of issue of the policy for all
services that it performs for the Company, subject to all the terms and
conditions of this Agreement. The Compensation Schedule in effect on the date of
this Agreement is attached to and made part of this Agreement.
(b) The Company reserves the right to revise the Compensation Schedule
upon thirty (30) days notice to the Specialty Broker, but the revision of the
Compensation Schedule shall apply only to policies thereafter issued. Any
revised Compensation Schedule shall become a part of this Agreement on its
effective date.
13. Payments to Agents
(a) The Company shall pay commissions in accordance with the schedule of
commissions included in or attached to the Agents' agreements.
(b) The Company shall not be bound by an assignment or pledge of, or
lien on, any Agent's commissions on behalf of the Specialty Broker, unless the
Company has received specific and timely written notice of, and has agreed in
writing to honor such assignment, pledge or lien.
14. Refund of Compensation
Should the Company in its sole discretion for any reason refund or
credit to the customer any premium, the Specialty Broker will promptly, on
demand, refund to the Company all compensation paid to the Specialty Broker for
such premium. Compensation adjustments may be made on decreases in premium for
which first year compensation has previously been paid.
<PAGE>
15. Advances and Indebtedness
(a) The Company is authorized, at any time either before or after the
termination of this Agreement, to deduct from any compensation due from the
Company to the Specialty Broker the entire amount of any Company Funds or other
funds, including, but not limited to, advances or debts, owed by the Specialty
Broker to the Company or its affiliates, associates, parents or subsidiaries.
(b) Any compensation paid to the Specialty Broker for premiums later
refunded or credited to the customer, or any overpayment of compensation shall
be a debt due the Company from the Specialty Broker and payable in accordance
with this Section.
(c) In addition to all other rights available to the Company as a
creditor, the Company shall have a first lien on all compensation payable under
this Agreement for any of the funds, advances or debts described herein.
(d) To the extent that compensation due to the Specialty Broker from the
Company is insufficient to cover advances, the difference shall become a debt
due to the Company. Interest at the rate of 8% per annum shall be charged on any
indebtedness remaining due and payable to the Company after one year.
16. Assignment
An assignment of the Specialty Broker's rights and obligations under
this Agreement or any compensation hereunder shall not be binding upon the
Company until a copy of the assignment has been received at the Company's Home
Office and approved in writing by an officer of the Company. The Company does
not assume any responsibility for the validity, sufficiency or tax consequences
of any assignment.
17. Hold Harmless
(a) The Specialty Broker will indemnify and hold the Company harmless
for all expenses, loss or damage suffered by the Company because of a violation
of, or refusal or failure to comply with the terms of this Agreement or with any
federal or state laws, rules or regulations, or resulting from unauthorized acts
or transactions, errors or omissions by the Specialty Broker or the Specialty
Broker's employees except to the extent that the Company caused, contributed to
or compounded such violation, refusal, failure, or other such transactions,
acts, errors or omissions.
(b) The Company will indemnify and hold the Specialty Broker harmless
for all expenses, loss or damage suffered by the Specialty Broker caused by the
Company's errors in preparing, processing or billing of any policy, except to
the extent that the Specialty Broker caused, contributed to or compounded such
errors. However, the Company will not be liable to the Specialty Broker for any
legal or other expenses the Specialty Broker chooses to incur, solely on its
own, in connection with any such error.
<PAGE>
18. Settlement of Disputes
(a) Disputes between the Company, Specialty Broker, Agents, and/or
policyholders relating to the Company's business, may be settled in good faith
by the Company and such settlement is binding on the Specialty Broker.
(b) The Specialty Broker shall cooperate fully with the Company in any
investigation or proceeding of any regulatory or governmental body, or court of
competent jurisdiction, if it is determined by the Company that the
investigation or proceeding affects matters covered by or arising out of this
Agreement.
(c) The Specialty Broker has no authority to institute legal or
administrative proceedings in the Company's name nor institute such proceedings
in connection with the transaction of the Company's business unless the Company
provides prior written approval for such actions by the Specialty Broker.
(d) The Specialty Broker shall defend any act or alleged act of the
Specialty Broker at its own expense. The Specialty Broker shall reimburse the
Company for all costs, expenses or legal fees that the Company incurs for the
defense of any administrative action in which the Company or the Specialty
Broker is named and which is, in the Company's opinion, the consequence of any
unauthorized act of the Specialty Broker.
(e) The Specialty Broker shall immediately notify the Company if it is
served with any paper or has knowledge of any legal or administrative action
against the Company or which involves the Company.
19. General Conduct, Rebates, Replacements
(a) The Specialty Broker will comply with all published rules of the
Company and with applicable federal, state or other laws and regulations
governing the sale of the Company's products.
(b) The Specialty Broker shall not rebate, or offer to rebate, all or
any part of its compensation, commission or premium on a policy issued or to be
issued by the Company, except where permitted by, and in accordance with, state
law and established Company practices.
(c) The Specialty Broker shall comply with the replacement rules and
regulations of the Company and the state in which the Specialty Broker is
licensed.
20. Advertising
The Specialty Broker will not, directly or indirectly, use or
disseminate any advertising matter, prospectuses, circulars, letters, booklets,
schedules, stationery, broadcasting, or sales material of any kind concerning
the Company or its products, or which contains the Company's name or any of the
Company's trademarks, unless produced by the Company; or use the name of the
Company or any of the Company's trademarks in a publication of any form without
obtaining the prior written authorization of an officer of the Company.
<PAGE>
21. Ownership of Company Property
(a) In order to assist the Specialty Broker in the solicitation and sale
of Company's products, the Company may from time to time make available to the
Specialty Broker Company records, literature, authorization cards, sales aids,
sales and rate manuals, computer software, computer hardware, supplies and
equipment. The Specialty Broker recognizes that such materials and equipment of
every kind and nature furnished to the Specialty Broker by the Company shall be
and remain the property of the Company. The Specialty Broker shall not reproduce
such materials without the Company's prior written approval.
(b) The Specialty Broker shall safely keep and preserve Company property
and shall replace at the Specialty Broker's expense any part thereof which may
be lost, destroyed or defaced while the same are in the Specialty Broker's
possession or control. On termination, the Specialty Broker shall deliver to the
Company, or such person as it may designate, all Company property in the
Specialty Broker's possession or control. Pending return of these items, the
Company may withhold any and all compensation which may be due to the Specialty
Broker.
22. Termination and the Right to Compensation Thereafter
(a) This Agreement may be terminated without cause by either party upon
at least thirty days written notice specifying the termination date.
(b) This Agreement may be terminated at the Company's discretion, at
the end of any calendar year during which the Specialty Broker has not
maintained a minimum first year premium persistency of 85%.
(c) This Agreement will automatically terminate:
(i) upon the death or total and permanent physical or mental
disability of the Specialty Broker, if an individual,
(ii) upon the dissolution of the corporation, if the Specialty
Broker is a corporation; (iii) upon the dissolution of the
partnership, if the Specialty Broker is a partnership; or
(iv) upon the expiration or lapse of the Specialty Broker's
license to represent the Company.
If this Agreement is terminated as provided in Section 22(b) or Section
22(c), the Specialty Broker shall be entitled to compensation as set forth in
the Compensation Schedule subject to the provisions of Section 15.
(d) The Company may terminate this Agreement for cause at any time,
immediately upon notice to the Specialty Broker, if:
(i) the Specialty Broker shall knowingly and intentionally
fail to conform to the published rules and regulations of
the Company;
(ii) the Specialty Broker shall have his license to transact
business hereunder revoked, suspended, or refused by a
state licensing authority;
(iii) as it relates to a policy issued by the Company or while
the Specialty Broker is conducting business on the
Company's behalf, the Specialty Broker shall knowingly and
intentionally fail to comply with the laws, Insurance
Department regulations, or
<PAGE>
other administrative regulations, governing the insurance
business of the state in which the Specialty Broker is
licensed or of any other state in which the Company is
authorized to do business;
(iv) the Specialty Broker shall improperly induce any
policyholder of the Company to discontinue premium
payments, cancel or fail to renew his policy;
(v) the Specialty Broker shall knowingly or intentionally make
false or misleading statements about the Company or its
products; or
(vi) the Specialty Broker shall fail to remit Company Funds to
the Company or return Company property upon written
request; or subject the Company to any liability due to
the Specialty Broker's misfeasance or malfeasance; or
commit any fraud hereunder.
If the Company terminates this Agreement for cause, no further
compensation in any form shall be payable to the Specialty Broker after such
termination, except compensation, service fees, or expense reimbursement
allowance which were payable prior to such termination, less any outstanding
indebtedness to the Company.
(e) For purposes of determining whether this Agreement has been
breached, if the Specialty Broker is a partnership or a corporation, then the
acts of all general partners of the partnership, or of all officers, directors
and voting shareholders of the corporation, as the case may be, shall be deemed
acts of the Specialty Broker.
(f) Termination of this Agreement will result in the termination of all
agreements with Agents recruited by the Specialty Broker.
23. Revocation of Prior Agreements
(a) This Agreement, together with its attachments and schedules,
contains the entire agreement between the Specialty Broker and the Company as of
the effective date of this Agreement, and shall be effective to cover all
applications taken by the Specialty Broker on or after the date of this
Agreement.
(b) The execution of this Agreement by the Company and Specialty Broker
terminates and supersedes all previous written or verbal contracts or agreements
made between said parties except as to renewal commissions, first year
commissions and the service fees provided for in such contracts, if any, that
may now be due or shall become due the Specialty Broker on business heretofore
written. But nothing in this Agreement shall be construed to affect or waive any
claim of any kind, whether for money or otherwise, of the Company against the
Specialty Broker or any obligations or vested right under any prior contract or
agreement.
24. Provisions That Survive This Agreement
(a) Sections 14, 15, 17, and 18 of this Agreement shall survive the
termination of the other items and provisions of this Agreement.
(b) In the event that the Specialty Broker, or any partner of the
Specialty Broker, or any shareholder of the Specialty Broker, at any time after
the termination of this Agreement shall improperly induce any policyholder of
the Company to discontinue the payment of premiums, or cancel or fail to renew
any policy, contract or certificate with the Company, then the Company shall
have the right to terminate payment of any compensation of any sort hereunder.
<PAGE>
25. Governing Law
This contract shall be governed by the laws of the State of Connecticut.
26. Severability
In the event one or more, but not all of the provisions of this
Agreement are determined to be unlawful or unenforceable by a court or
regulatory agency of competent jurisdiction or rendered so by statute or
regulation, such determination shall not affect the legality or enforceability
of the remainder of the terms of this Agreement.
27. Modifications of this Agreement
This Agreement and its attached schedules may not be changed or
cancelled orally. The Company may, at any time after thirty (30) days notice to
Specialty Broker, amend this Agreement in whole or in part. Any such amendment,
however, shall in no way, except by mutual consent, affect policies issued or
applications submitted before the amendment date.
28. Notice
(a) All notices and demands made under this Agreement shall be valid
only if in writing and hand-delivered or properly sent by (i) United States
certified or registered mail, postage prepaid, return receipt requested; or (ii)
overnight delivery service such as Emery or Federal Express with provisions for
a receipt and delivery charge prepaid, addressed as follows or to any other
address a party may designate by giving notice to the other party.
(b) Any notice sent to the Company should be sent to Vice President,
Individual Life SBU, Aetna Life Insurance and Annuity Company, 151 Farmington
Avenue, Hartford, CT 06156. Any notice sent to the Specialty Broker should be
sent to the address indicated on page 1.
29. Benefit
This Agreement shall be binding upon, and inure to the benefit of the
parties hereto, their legal representatives, successors, and assigns (to the
extent limited by this Agreement).
30. Miscellaneous
(a) If the Specialty Broker or any of its Agents desires to sell any
product produced currently or in the future by the Company or any of the
Company's affiliates, the Specialty Broker or Agent must also hold a valid
agreement to distribute any such products.
(b) The Company reserves the right to:
(i) modify the amount or plan of any policy available for sale or
its premium rates;
(ii) modify any issue or underwriting rules;
(iii) cancel or rescind any existing product available for sale; or
(iv) withdraw any policy from any state at any time or introduce
new policies.
<PAGE>
(c) The failure of the Company to enforce the performance of any of the
terms of this Agreement will not constitute a waiver unless agreed to in writing
by the Company and the Specialty Broker.
(d) The captions and headings of the sections of this Agreement are for
convenience only and are not to be used to interpret, modify, define or limit
the provisions of this Agreement.
(e) The rights and remedies reserved by the Company in this Agreement
are in addition to and not exclusive of any other right or remedy available to
the Company.
<PAGE>
APPENDIX I
CORPORATE SPECIALTY MARKETS
SCHEDULE OF BROKER COMMISSIONS
Effective August 30, 1993
1. CORPORATE UNIVERSAL LIFE
A. DEFINITIONS
Commissionable Basic Premium (CBP) - The basic premium for the
insured's rate class (smoker, nonsmoker), and issue age, including
policy fees, plus the basic premium for commissionable riders,
benefits, and substandard extras.
B. COMMISSION RATES (Percent of applicable premium)
RENEWAL EXCESS
1ST YEAR YEARS 2-10 OVER CBP
UP TO CBP UP TO CBP ALL DURATIONS
--------- --------- -------------
Corporate UL 50 3% 0%
C. RIDERS
Term Rider 0% 0% 0%
Disability Waiver Same as base policy
2. SPECIAL CASES
Commissions payable in the following cases, irrespective of any other
provisions of this schedule, will be at the rates allowed under the
Company's rule and practices in effect at the time the premium is due.
A. Premiums on reinstatement of lapsed policies;
B. Premiums of insurance which, in the judgment of the Company, takes or
is to take the place of insurance previously issued by the Company on
the same life;
C. Premiums on cases carrying special rate quotations.
3. RATINGS
All policies with table ratings will be commissionable at regular rates.
Flat Dollar extras will be compensated as follows based on duration and
purpose of the rating:
A. Temporary Flat extras for medical purposes:
3% first year and renewal commission will be payable for Flat
extras of less than 6 years.
B. Permanent Flat extras for medical reasons:
Full first-year and renewal commissions, if any, will be paid.
C. Flat extras for aviation and avocation:
3% first-year and renewal commission, if any, is payable.
<PAGE>
APPENDIX I
CORPORATE SPECIALTY MARKETS
SCHEDULE OF BROKER COMMISSIONS
(Page 2)
4. COMMISSION RULES
A. INTERNAL REPLACEMENT RULES
Permanent Insurance to Permanent Insurance
------------------------------------------
A first-year commission rate equal to 50% of the regular
first-year rate (up to the commissionable basic premium on
Corporate UL plans) will be paid on the original amount of
insurance. Increases in coverage will be paid at normal rates.
Regular renewal rates will be paid on the entire face amount of
the new policy.
B. INCREASES
Commissions are earned as paid premiums are applied.
C. COMMISSION ON WAIVED PREMIUMS
Commissions are not payable on any premium or portion thereof which is
waived.
____________________________________________ ___________________
Signature Date
<PAGE>
APPENDIX II
CORPORATE SPECIALTY MARKETS
SPECIALTY BROKER COMPENSATION SCHEDULE
Effective August 30, 1993
EXPENSE ALLOWANCE PAYMENT
An expense allowance payment (EAP) equal to 20% of net earned first-year
commission will be payable on individual life insurance policies credited to the
Specialty Broker as defined in Section 11 of the Specialty Broker Agreement.
COMMISSION OVERRIDE
An override equal to 6% of net earned first-year commission will be paid on
individual life insurance policies credited to the Specialty Broker as defined
in Section 11 of the Specialty Broker Agreement. No override is paid in renewal
years.
ADDITIONAL RENEWAL COMPENSATION
Additional renewal compensation (ARC) will be calculated and paid at the end of
each calendar quarter based on cumulative net commissionable basic premiums paid
on Corporate Specialty Markets ("CSM") policies of brokers associated to the
Specialty Broker. The percentage payable will be calculated in accordance with
the following schedule:
ARC Payable on ARC Payable on
Earned First Year 2nd and 3rd Year 4th through 10th Year
Commissionable Basic Commissionable Basic Commissionable Basic
Premium During Premium Paid During Premium Paid During
Prior Calendar Year Current Calendar Year Current Calendar Year
0 to 99,999 0% 0%
100,000 to 499,999 2% 0%
500,000 to 999,999 3% 0%
1,000,000 to 2,499,999 5% 1%
2,500,000 to 4,999,999 8% 2%
5,000,000 to 9,999,999 12% 3%
10,000,000 to 14,999,999 13% 3%
15,000,000 & OVER 15% 3%
Notes:
(1) ARC will be calculated and paid quarterly.
(2) ARC limited to commissionable basic premium only and does not include
excess payments.
(3) ARC on CSM policies is based only upon production of CSM business. It is
not integrated with sales of other Aetna policies or other ARC compensation
contracts.
CONTINGENT RENEWAL
A 2% renewal commission will be paid after the 10th policy year if the Specialty
Broker has an active Specialty Broker contract and policies are being serviced
to policyholder and Company standards.
VESTING
All compensation except "Contingent Renewals" is vested to the Specialty Broker
subject to the provisions of Section 22 of the Specialty Broker Agreement.
____________________________________________ ___________________
Signature Date
[Aetna Logo]
EX-99.1.5(iv)
AMENDMENT RIDER
The following new paragraph is added to the Surrender Charge subsection as the
second paragraph:
At the time of the Date of Issue for a decrease in Specified Amount, We
will deduct a surrender charge from the Total Account Value. The applicable
surrender charge for this Policy for a decrease is the amount shown in the
Policy Specifications in the Table of Surrender Charges prorated for the
percentage decrease.
The Repayment subsection is amended as follows:
The Loan Account Value may be repaid in full or in part at any time as long
as this Policy is in force and the Insured is living. The amount necessary to
repay all loans in full is the Loan Account Value plus any accrued interest.
Loan repayments will be allocated to the Fixed Account Value and the Separate
Account Value in the same proportion in which the loan was taken. The proportion
allocated to the Separate Account Value will be further allocated to the Funds
in accordance with current premium allocation. The Loan Account Value will be
reduced by the amount of any loan repayment.
The first paragraph of the Change from Option 1 to 2 subsection is amended as
follows:
Changes from Option 1 to 2 will be allowed at any time. The Specified
Amount will be reduced to equal the Specified Amount less the Total Account
Value at the time of the change.
The first paragraph of the Change from Option 3 to 2 subsection is amended as
follows:
Changes from Option 3 to 2 will be allowed at any time. The Specified
Amount will be reduced to equal the Specified Amount prior to the change plus
the difference between the Total Account Value and the accumulated premiums at
the time of the change.
The first paragraph of the Decrease in Specified Amount subsection is amended as
follows:
Decreases will be allowed at any time. However, decreases made within the
first 5 Policy Years will be allowed only with our consent. The amount of a
decrease cannot reduce this Policy's Specified Amount below the Minimum
Specified Amount.
This Rider is attached to and made a part of this Policy. It is effective on May
1, 1998.
Aetna Life Insurance and Annuity Company
/s/ Kirk P. Wickman
Secretary
70284-1998
EX-99.1.5(v)
P O L I C Y S P E C I F I C A T I O N S
NAME OF
INSURED JOHN DOE
POLICY
NUMBER: I 1 111 000 MAY 1, 1998 DATE OF ISSUE
SEX AGE PREMIUM CLASS
MALE 35 PREFERRED NONSMOKER
BENEFICIARY - SEE ATTACHED BENEFICIARY AND POLICYOWNER ENDORSEMENTS SHEET.
POLICYOWNER - THE INSURED.
PLAN - FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL TARGET FACE AMOUNT: $300,000
MINIMUM SPECIFIED AMOUNT: $1,000 DEATH BENEFIT OPTION: 1
PREMIUM ACCUMULATION RATE: N/A
INITIAL BASIC POLICY SPECIFIED AMOUNT: $150,000
MINIMUM TARGET FACE AMOUNT: $100,000
MATURITY DATE: MAY 1, 2063
INITIAL PLANNED PREMIUM: $10,748.28
INITIAL PREMIUM MODE: ANNUAL
TARGET PREMIUM: $5,374.14
MONTHLY DEDUCTION DAY: THE 1ST DAY OF EACH MONTH
NET PREMIUM INITIAL ALLOCATION PERCENTAGES:
GENERAL ACCOUNT 100%
MONTHLY POLICY FEE: SEE PAGE PS3
GUARANTEED MAXIMUM PREMIUM LOAD: IN THE FIRST YEAR, 15% ON PREMIUM UP TO
TARGET PREMIUM AND 6% ON PREMIUM IN
EXCESS OF THAT AMOUNT; IN THE SECOND
THROUGH FIFTH YEARS, 10% ON PREMIUM
UP TO TARGET PREMIUM AND 6% ON
PREMIUM IN EXCESS OF THAT AMOUNT; 6%
ON ALL PREMIUM EACH YEAR THEREAFTER.
GUARANTEED MAXIMUM PREMIUM TAX CHARGE: 5%
POLICY LOAN INTEREST: VARIABLE
GUARANTEED INTEREST RATE FOR FIXED ACCOUNT VALUE: 4.0% PER YEAR
I 1 111 000 JOHN J. DOE PS 1
70180-1998US
<PAGE>
THE PLANNED PREMIUM AMOUNT SHOWN ABOVE MAY NOT CONTINUE THE POLICY INFORCE TO
THE MATURITY DATE EVEN IF THIS AMOUNT IS PAID AS SCHEDULED. THE PERIOD FOR WHICH
THE POLICY WILL CONTINUE WILL DEPEND ON:
1) THE AMOUNT, TIMING AND FREQUENCY OF PREMIUM PAYMENTS;
2) CHANGES IN THE SPECIFIED AMOUNT AND THE DEATH BENEFIT OPTIONS;
3) CHANGES IN INTEREST CREDITED, FUND PERFORMANCE AND MORTALITY
DEDUCTIONS;
4) DEDUCTIONS FOR RIDERS AND BENEFITS;
5) PARTIAL SURRENDERS AND POLICY LOANS.
I 1 111 000 JOHN J. DOE PS 2
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70180-1998US
<PAGE>
TABLE OF
GUARANTEED MAXIMUM INSURANCE RATES
(1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE)
PER $1,000 OF AMOUNT AT RISK
POLICY MONTHLY POLICY MONTHLY POLICY MONTHLY
YEAR RATE YEAR RATE YEAR RATE
1998 0.1367 2020 0.7506 2042 6.6202
1999 0.1442 2021 0.8207 2043 7.2522
2000 0.1525 2022 0.8966 2044 7.9604
2001 0.1634 2023 0.9843 2045 8.7645
2002 0.1750 2024 1.0812 2046 9.6778
2003 0.1875 2025 1.1931 2047 10.6795
2004 0.2025 2026 1.3234 2048 11.7575
2005 0.2167 2027 1.4705 2049 12.8813
2006 0.2342 2028 1.6318 2050 14.0599
2007 0.2509 2029 1.8066 2051 15.2671
2008 0.2717 2030 1.9931 2052 16.5210
2009 0.2926 2031 2.1915 2053 17.8367
2010 0.3151 2032 2.4074 2054 19.2390
2011 0.3409 2033 2.6520 2055 20.7666
2012 0.3676 2034 2.9679 2056 22.4984
2013 0.3968 2035 3.2514 2057 24.7092
2014 0.4319 2036 3.6273 2058 27.8276
2015 0.4711 2037 4.0488 2059 32.7885
2016 0.5161 2038 4.5069 2060 41.4578
2017 0.5678 2039 4.9957 2061 57.9566
2018 0.6237 2040 5.5110 2062 90.9091
2019 0.6846 2041 6.0472 2063 00.0000
THE CURRENT MONTHLY POLICY FEE IS $6.00. IT WILL NEVER EXCEED $10.00.
I 1 111 000 JOHN J. DOE PS 3
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70180-1998US
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Hartford, Connecticut 06156
(A STOCK COMPANY)
While this Policy is in force, Aetna will pay Proceeds John Doe
subject to all of this Policy's provisions. Other rights and
benefits are provided as described in this Policy. The
provisions of this and the following pages are part of this
Policy.
THIS POLICY IS A LEGAL CONTRACT BETWEEN YOU AND AETNA
PLEASE READ YOUR POLICY CAREFULLY
RIGHT OF POLICY EXAMINATION
This Policy may be returned to Aetna or its representative within 10 days after
its receipt. Return this Policy to Aetna, Individual Life Insurance, at 151
Farmington Avenue, Hartford, Connecticut 06156. Upon its return, this Policy
will be deemed void from its beginning. The amount refunded will be:
1. the difference between payments made and amounts allocated to Variable Life
Account B; plus
2. the value of amounts allocated to Variable Life Account B on the date the
returned contract is received by Aetna; plus
3. any charges made under this Policy's terms on the amounts allocated to
Variable Life Account B.
Signed for Aetna on its Date of Issue.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
President Secretary
_________________________
Registrar
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY OR
DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE
The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.
Values in each Fund held in a Separate Account may increase or decrease daily.
Such values are not guaranteed as to dollar amount. Refer to the Policy Values
section of this Policy for more information.
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70180-1998US
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
Page No.
Policy Specifications .......................................... PS1
Policy Summary ................................................. 1
Definitions .................................................... 1
Attained Age ............................................... 1
Date of Issue .............................................. 1
Death Benefit .............................................. 1
Fixed Account Value ........................................ 1
Fund(s) .................................................... 1
General Account ............................................ 2
Home Office ................................................ 2
Initial Coverage ........................................... 2
Loan Account Value ......................................... 2
Maturity Date .............................................. 2
Minimum Specified Amount ................................... 2
Monthly Deduction Day ...................................... 2
Net Premium ................................................ 2
Net Single Premium ......................................... 2
Policy Month ............................................... 2
Policy Year/Policy Anniversary ............................. 2
Premium Accumulation Rate .................................. 2
Premium Tax Charge ......................................... 2
Proceeds ................................................... 3
Separate Account ........................................... 3
Separate Account Value ..................................... 3
Specified Amount ........................................... 3
Subsequent Application(s) .................................. 3
Target Premium ............................................. 3
Total Account Value ........................................ 3
Valuation Date ............................................. 3
Valuation Period ........................................... 3
Variable Annuity Account B ................................. 3
Variable Life Account B .................................... 3
We, Our, Us, Company ....................................... 3
Written Request ............................................ 3
You, Your .................................................. 3
General Provisions ............................................. 4
The Contract ............................................... 4
Owner ...................................................... 4
Beneficiary ................................................ 4
Changes in Owner and Beneficiary ........................... 4
Assignment ................................................. 4
Non-Participating .......................................... 4
Policy Settlement .......................................... 4
Age ........................................................ 5
Change of Address .......................................... 5
Annual Report .............................................. 5
Projection of Benefits ..................................... 5
Proceeds ................................................... 5
Coverage Beyond Maturity ................................... 6
Right to Defer Payment ..................................... 6
Suicide and Incontestability ................................... 6
Suicide Exclusion .......................................... 6
Incontestability ........................................... 7
Premiums and Reinstatement ..................................... 7
General .................................................... 7
Planned Premiums ........................................... 8
Additional Premiums ........................................ 8
Allocation of Premium ...................................... 8
Changes in Allocation Percentages .......................... 8
Grace Period ............................................... 8
Reinstatement .............................................. 8
Death Benefit Options .......................................... 9
General .................................................... 9
Option 1 ................................................... 9
Option 2 ................................................... 9
Option 3 ................................................... 9
Policy Values .................................................. 9
Basis of Calculation ....................................... 9
Interest Credited .......................................... 9
Fixed Account Value ........................................ 10
Separate Account Value ..................................... 10
Charges to Policy Values ................................... 11
Transfers Within Accounts .................................. 11
Monthly Deductions ......................................... 11
Cost of Insurance .......................................... 11
Cost of Insurance Rate ..................................... 12
Nonforfeiture Provisions ....................................... 12
Continuation of Coverage ................................... 12
Surrender Value ............................................ 12
Partial Surrender .......................................... 12
Paid-Up Nonforfeiture Option ............................... 13
Policy Loans ................................................... 13
General .................................................... 13
Loan Interest Rate Charged ................................. 13
Loan Interest Rate Credited ................................ 14
Repayment .................................................. 14
Changes in Insurance Coverage .................................. 14
General .................................................... 14
Increase in Specified Amount ............................... 14
Decrease in Specified Amount ............................... 15
Change in Death Benefit Option ............................. 15
Change from Option 1 to 2 .................................. 15
Change from Option 2 to 1 .................................. 15
Change from Option 3 to 1 .................................. 15
Change from Option 3 to 2 .................................. 15
Change of Fund(s) .............................................. 15
Separate Account ............................................... 16
Settlement Options ............................................. 16
Conditions ................................................. 16
Separate Account ........................................... 17
Fund(s) Settlement Option Units of Variable Annuity
Account B .................................................. 17
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70180-1998US
<PAGE>
Table of Contents
- -------------------------------------------------------------------------
Page No.
Fund(s) Settlement Option Unit Value of Variable
Annuity Account B .............................................. 17
Fund Transfers During the Annuity Period ....................... 18
Annuity Options ................................................ 19
Option 1 - Payments for a Stated Period of Time ................ 19
Option 2 - Life Income Based on the Life of the
Payee .......................................................... 20
Option 3 - Life Income Based Upon the Lives of
Two Payees ..................................................... 24
Option 4 - Payment of Interest on Proceeds Left
With Us ........................................................ 26
Other Terms of Annuity Options ................................. 27
Death Benefit .................................................. 27
70180-1998US
<PAGE>
Policy Summary
It is important that You understand Your insurance policy. We have tried to use
understandable language throughout this Policy. However, should You have any
questions after You have read it, please call the representative who sold this
Policy to You or call Us. This summary is not a substitute for the detailed
policy provisions.
This is a flexible premium variable life insurance policy. Proceeds as described
in this Policy will be paid upon surrender, maturity, or death of the Insured.
You may allocate Net Premiums to the General Account, Variable Life Account B,
or both Accounts. Net Premiums allocated to Variable Life Account B must be
allocated to one or more Funds. Shares of these Funds support the benefits
provided by the variable portion of this Policy. The cash value in each Fund is
not guaranteed and will vary with the investment performance of that Fund.
If the General Account is selected, the Fixed Account Value in that Account will
accumulate at rates of interest We determine. Such rates will not be less than
4.0% a year.
Sufficient premiums must be paid to continue this Policy in force. Premium
reminder notices will be sent for planned premiums and for premiums required to
continue this Policy in force. This Policy may be reinstated.
Other rights and benefits are explained in this Policy.
Definitions
Attained Age
Issue age of the Insured as shown in the Policy Specifications, increased by the
number of Policy Years elapsed. Issue age is the Insured's age on his/her
birthday nearest this Policy's Date of Issue.
Date of Issue
The effective date for Initial Coverage is the Date of Issue shown in the Policy
Specifications. The Date of Issue and the effective date for any change in
coverage will be the Date of Coverage Change shown in the supplemental Policy
Specifications which will be sent to You. Coverage is conditional on payment of
the first premium, if any, and issue of this Policy as provided in the
application.
Death Benefit
The amount described in the Death Benefit Options provision which is payable on
the date of death, subject to all provisions contained in this Policy.
Fixed Account Value
The non-loaned portion of this Policy's Total Account Value attributable to the
non-variable portion of this Policy. The Fixed Account Value is held in the
General Account.
Fund(s)
One or more of the open-end management investment companies (mutual funds whose
shares pay for the benefits provided by the variable portion of this Policy).
Shares of the Funds held pursuant to this Policy are held in Variable Life
Account B except that shares of the Funds referenced in the Settlement Options
section of this Policy are held in Variable Annuity Account B. The Fund(s) held
in Variable Life Account B may differ from the Fund(s) held in Variable Annuity
Account B.
70180-1998US 1
<PAGE>
General Account
The account which holds the assets of the Company which are attributable to the
non-variable portion of this Policy. The Fixed Account Value and the Loan
Account Value are held in the General Account.
Home Office
Our main office, located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Initial Coverage
Coverage provided by this Policy prior to any change in coverage.
Loan Account Value
The sum of all unpaid loans. The amount necessary to repay all loans in full is
the Loan Account Value plus any accrued interest. The Loan Account Value is held
in the General Account.
Maturity Date
The Policy Anniversary on which the Insured reaches Attained Age 100.
Minimum Specified Amount
The Specified Amount for this Policy cannot be decreased below this amount. The
Minimum Specified Amount for this Policy is shown in the Policy Specifications.
Monthly Deduction Day
The first Monthly Deduction Day is the Date of Issue. Monthly Deduction Days
occur each month thereafter on the same day of the month as the Date of Issue.
Net Premium
The Net Premium is equal to:
1. the premium paid; less
2. a Premium Load not to exceed the Guaranteed Maximum Premium Load shown in
the Policy Specifications; less
3. a Premium Tax Charge.
Net Single Premium
The Net Single Premium per dollar is the amount We require to purchase one
dollar of paid up whole life insurance. We determine the Net Single Premium
using the number of elapsed Policy Years, the Insured's premium class and
Attained Age, an interest rate of 4.0% per annum and the guaranteed cost of
insurance rates specified in the Policy Specifications.
Policy Month
The Policy Month begins each month on the same day of the month as the Date of
Issue.
Policy Year/Policy Anniversary
The first Policy Year is the 12 month period beginning on the Date of Issue.
Your Policy Anniversary is equal to the Date of Issue plus 1 year, 2 years, etc.
Premium Accumulation Rate
The annual rate at which premiums paid will be accumulated to determine the
Death Benefit if Death Benefit Option 3 is selected. This rate is chosen by You
at issue. A rate requested in excess of 10% may be subject to additional
underwriting. The Premium Accumulation Rate is shown in the Policy
Specifications.
Premium Tax Charge
A charge equal to the state and municipal taxes associated with premiums
received.
70180-1998US 2
<PAGE>
Proceeds
The amount We will pay upon the death of the Insured, the Maturity Date, or upon
surrender of this Policy as described in the Proceeds provision.
Separate Account
Variable Life Account B; or, when referring to a settlement option as described
in the Settlement Option provisions of this Policy, Variable Annuity Account B.
Separate Account Value
The portion of this Policy's Total Account Value attributable to the variable
portion of this Policy. This Policy's Separate Account Value is held in Variable
Life Account B.
Specified Amount
The Specified Amount is shown in the Policy Specifications or in the
Supplemental Policy Specifications, if later changed.
Subsequent Application(s)
Any application after the initial application initiated by You or by Us.
Target Premium
The Target Premium is shown in the Policy Specifications or in the Supplemental
Policy Specifications, if later changed.
Total Account Value
The sum of the Fixed Account Value, the Separate Account Value, and the Loan
Account Value. This is the Policy's cash value.
Valuation Date
Any day on which the New York Stock Exchange is open for trading.
Valuation Period
The period of time commencing, usually at 4:15 p.m. Eastern Time on each
Valuation Date and ending at 4:15 p.m. Eastern Time on the next Valuation Date.
Variable Annuity Account B
A Separate Account which segregates assets attributable to the variable portion
of annuity contracts and life insurance settlement options from other assets of
the Company. Its assets are invested in shares of the Funds. Variable Annuity
Account B holds all or a portion of the Policy's Proceeds if a variable
settlement option is elected.
Variable Life Account B
A Separate Account which segregates assets attributable to the variable portion
of life insurance from other assets of the Company. Its assets are invested in
shares of the Funds.
We, Our, Us, Company
Refers to Aetna Life Insurance and Annuity Company, its successors, or assigns.
Written Request
A request in writing, in a form satisfactory to Us and received by Us at the
Home Office.
You, Your
Refers to the Owner(s) of this Policy.
70180-1998US 3
<PAGE>
General Provisions
The Contract
This Policy, the initial application on the Insured, any Subsequent Applications
and any riders constitute the entire contract. Copies of all applications are
attached to and made a part of this Policy.
Only the President, Executive Vice President, or the Corporate Secretary may
agree to a change in this Policy, and then only in writing.
All statements made by or for the Insured are representations and not
warranties.
No statement will be used to void this Policy or defend against a claim unless
it is contained in the initial application or Subsequent Applications.
Owner
Unless otherwise stated in the application or later changed, this Policy is
owned by the Insured.
During the lifetime of the Insured all rights granted by this Policy or allowed
by Us belong to the Owner.
If this Policy is owned jointly, any exercise of rights granted by this Policy
must be made jointly.
Beneficiary
The individual or entity that will receive any Proceeds on death is the
Beneficiary. The Beneficiary is stated in the application, unless later changed.
If no designated Beneficiary is living at the time of the death of the Insured,
all benefits will be paid to the Owner or the Owner's executors, administrators,
or assigns.
Changes in Owner and Beneficiary
Unless this Policy states otherwise, the Owner or Beneficiary, or both, may be
changed. This may be done as often as desired by the Owner of record during the
lifetime of the Insured and before the Maturity Date.
To change the Owner or Beneficiary, Your Written Request must be sent to Us.
When We give Our written acceptance, the change will take effect as of the date
Your Written Request was signed. The change will be subject to any action We
take before Our written acceptance of the change.
Assignment
A copy of an assignment must be on file at the Home Office. Until We receive
such notice, We will not be required to take notice of, or be responsible for,
any transfer of interest in this Policy by assignment, agreement, or otherwise.
We will not be responsible for the validity of any assignment.
Non-Participating No dividends will be paid.
Policy Settlement
All amounts payable by Us will be paid by the Home Office. The Loan Account
Value plus any accrued interest will be deducted from the amount payable at
settlement. We may require return of this Policy.
70180-1998US 4
<PAGE>
Age
If the Insured's age is misstated, the Death Benefit will be that which would
have been purchased by the most recent monthly deduction at the correct age.
Change of Address
You must notify Us at the Home Office of a change in Your mailing address.
Annual Report
We will send You a report at least once during each Policy Year. The report will
show the Total Account Value, the Surrender Value and the Death Benefit on the
date of the report. It will also show since the last report at least the
following information:
1. Gross premiums paid;
2. the cost of insurance and the cost of riders;
3. interest and investment return credited to the Total Account Value;
4. the amount of any surrenders or partial surrenders;
5. a summary of loan activity; and
6. any other information required by the State in which this Policy was
delivered.
Projection of Benefits
We will provide a projection of illustrative future death benefits and Total
Account Values at any time upon Written Request.
Proceeds
Proceeds on death of the Insured will equal:
1. The Death Benefit; less
2. the Loan Account Value plus any accrued interest; less
3. any overdue deductions.
Proceeds on death are payable after receipt at the Home Office of due proof of
death of the Insured.
Proceeds on maturity of this Policy will equal:
1. The Total Account Value on the Maturity Date; less
2. the Loan Account Value plus any accrued interest.
Proceeds on surrender of this Policy will equal the Surrender Value as described
in the Surrender Value provision.
All Proceeds are subject to adjustment under the Age, Incontestability, Suicide
Exclusion and Grace Period provisions.
70180-1998US 5
<PAGE>
Coverage Beyond Maturity
At any time prior to the Maturity Date of this Policy, You may, by Written
Request, elect to continue coverage beyond the Maturity Date. Any extra benefit
riders will be terminated on the Maturity Date. If elected, the following will
apply:
[bullet] We will continue to credit interest to the Total Account Value of this
Policy as described in the Interest Credited provision.
[bullet] After the Insured reaches Attained Age 100 the Separate Account Value
of this Policy will be transferred to the Fixed Account.
[bullet] Monthly Deductions will be calculated with a Cost of Insurance rate
equal to zero.
[bullet] Proceeds payable on death will be as described in the Proceeds
provision of this Policy.
The Paid Up Nonforfeiture Option will not be available once this option is
selected. All other rights and benefits as described within the provisions of
this Policy will be available during the lifetime of the Insured.
Right to Defer Payment
Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (1) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets; or (4) during any
other period when the SEC, by order, so permits for the protection of security
holders. For payment from the Separate Account in such instances, We may defer
payment of:
1. Surrender or partial surrender values;
2. any Proceeds on death in excess of the current Specified Amount; or
3. any portion of the Loan Value.
Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay premiums to Us.
Suicide and Incontestability
Suicide Exclusion
If the Insured dies by suicide, while sane or insane, within two years from the
Date of Issue of this Policy and while this Policy is inforce, We will pay:
1. Premiums paid less amounts allocated to Variable Life Account B; plus
2. the Separate Account Value; plus
3. the portion of the monthly deductions that have been deducted from the
Separate Account Value; less
70180-1998US 6
<PAGE>
4. the sum of:
(a) the Loan Account Value transferred from the Fixed Account Value; plus
(b) the interest due on the Loan Account Value; plus
(c) the value of any partial surrenders transferred from the Fixed Account
Value; plus
(d) any interest earned on the Loan Account Value transferred to the
Separate Account Value.
If the Insured dies by suicide, while sane or insane, within 2 years from the
Date of Issue of any increase in coverage, We will pay only the monthly
deductions for the increase.
If the Insured dies by suicide, while sane or insane, more than 2 years from the
Date of Issue of this Policy but within 2 years from the Date of Issue of any
increase in coverage, We will pay:
1. The Proceeds on death for any coverage in effect more than 2 years from the
Date of Issue of this Policy; plus
2. the monthly deductions for the increase in coverage.
All amounts will be calculated as of the date of death.
Incontestability
With respect to statements made in the initial application for the Insured:
[bullet] We will not contest this Policy after it has been in force during the
lifetime of the Insured for 2 years from its Date of Issue.
With respect to statements made in any Subsequent Applications for the Insured:
[bullet] We will not contest coverage relating to Subsequent Applications after
coverage has been in force during the lifetime of the Insured for 2
years from the Date of Issue of such coverage or from the effective
date of any reinstatement.
If this Policy is contested, Your rights or the Beneficiary's rights may be
affected.
Premiums and Reinstatement
General
Sufficient premiums must be paid to continue this Policy in force until the
Maturity Date. The first premium is due on the Date of Issue. Premium due dates
are measured from the Date of Issue.
Any premiums after the first premium are payable only at Our Home Office. Send
Your check or money order, payable to Aetna, to the Home Office. Please be sure
to write Your policy number on Your check. A receipt signed by an officer of the
Company will be given upon request.
We may apply limits for Planned Premiums and Additional Premiums as necessary to
preserve the status of this Policy as a life insurance policy under federal tax
law.
We may require satisfactory evidence of insurability if payment of the new
Planned Premium or an Additional Premium during the current Policy Year would
increase the difference between the Death Benefit and the Total Account Value.
70180-1998US 7
<PAGE>
Planned Premiums
Planned Premium is the premium amount You intend to pay and the amount that will
be billed. Premium reminder notices for Planned Premiums will be sent at
frequencies of 3, 6 or 12 months, or at any other frequency to which We agree.
Planned premiums as of the Date of Issue are shown in the Policy Specifications.
You may change the amount and frequency of Planned Premiums by Your Written
Request.
Additional Premiums
Additional Premiums are premium payments in excess of planned premiums.
Additional Premiums may be paid at any time while this Policy is in force and
before the Maturity Date.
Allocation of Premium
Each Net Premium will be credited to Variable Life Account B (and each of the
selected Funds) and/or the General Account in the percentages indicated in the
Policy Specifications, unless changed as provided in the Changes in Allocation
Percentages provision below.
Changes in Allocation Percentages
Allocation percentages may be changed at any time by Your request to Us.
Percentages must be changed in whole percentages. If these percentages are
changed in accordance with this provision, We will send a letter to You
confirming the change. The change will be effective as of the date of the next
premium payment after You notify Us.
Grace Period
If the Total Account Value less the Loan Account Value is not sufficient to
allow a Monthly Deduction on the Monthly Deduction Day, We will allow You 61
days of grace for payment of an amount sufficient to cover the Monthly
Deduction. We may require payment of the amount necessary to keep this Policy in
force for the current Policy Month plus two additional Policy Months.
Written notice will be mailed to Your last known address, according to Our
records, not less than 61 days before termination of this Policy. This notice
will also be mailed to the last known address of any assignee of record.
During the days of grace this Policy will stay in force. If the Insured's death
occurs during the days of grace, We will deduct an amount sufficient to cover
the overdue Monthly Deduction(s) from the Death Benefit.
If payment is not made within 61 days after the Monthly Deduction Day, the
Policy will terminate without value at the end of the Grace Period.
Reinstatement
If this Policy terminates as provided in the Grace Period provision, We may
allow it to be reinstated within 5 years after the date of termination and
before the Maturity Date. To reinstate this Policy, We will require:
1. satisfactory evidence of insurability on the Insured; and
2. payment of an amount sufficient to cover the current monthly deduction(s)
plus two additional Policy Months.
If this Policy is reinstated, it will be reinstated on the Monthly Deduction Day
following Our approval. This Policy's Total Account Value at reinstatement will
be the Net Premium paid less the monthly deduction for that day. Any Loan
Account Value will not be reinstated.
Death Benefit Options
70180-1998US 8
<PAGE>
General
The Proceeds payable upon the Insured's death will be as provided under one of
the following Death Benefit options. The option for this Policy as of the Date
of Issue is shown in the Policy Specifications. If You have changed the Death
Benefit option, the option is shown in the supplemental Policy Specifications
which will be sent to You.
Option 1
The Specified Amount shown in the Policy Specifications includes the Total
Account Value. Under this option, the Death Benefit will be the greater of: (a)
the Specified Amount on the date of death or (b) a percentage of the Total
Account Value. This percentage is one divided by the Net Single Premium per
dollar. The Net Single Premium is based on interest of 4.0% per annum and
guaranteed cost of insurance rates.
Option 2
The Specified Amount is in addition to the Total Account Value. Under this
option, the Death Benefit will be the greater of: (a) the Specified Amount plus
the Total Account Value on the date of death or (b) a percentage of the Total
Account Value. This percentage is one divided by the Net Single Premium per
dollar. The Net Single Premium is based on interest of 4.0% per annum and
guaranteed cost of insurance rates.
Option 3
Under this option, the Death Benefit will be the greater of (a) the Specified
Amount plus the Accumulated Premium(s) on the date of death, or (b) a percentage
of the Total Account Value. This percentage is one divided by the Net Single
Premium per dollar. The Net Single Premium is based on interest of 4.0% per
annum and guaranteed cost of insurance rates. The total death benefit under this
option is limited and will not exceed the total Death Benefit paid under
Option 2.
The Accumulated Premium is the sum of all premiums paid from the Date of Issue
accumulated at the Premium Accumulation Rate.
This option may be selected only at issue.
Policy Values
Basis of Calculation
The values of this Policy equal or exceed those required by the Standard
Nonforfeiture Law as provided in the Variable Life Insurance law in the state
where this Policy is delivered. A detailed statement has been filed with the
state which shows how to compute those values.
Interest Credited
We will credit interest on the Fixed Account Value at the guaranteed rate of
4.0% per year. This guaranteed rate equals 0.32737%, per month, compounded
monthly. We may credit interest in excess of the guaranteed rate. Additional
excess interest at a rate not to exceed 1/2% will be credited to policies in
force at least 10 years. The guaranteed interest rate will not be increased by
the additional excess interest rate.
Interest earned by the Loan Account Value is described in the Loan Interest
Credited provision.
70180-1998US 9
<PAGE>
Fixed Account Value
The Fixed Account Value for this Policy will be:
1. The value of the Net Premiums credited to the Fixed Account Value; less
2. the portion of monthly deductions from the Fixed Account Value; plus
3. interest credited; less
4. any transfers of value out of the Fixed Account Value; plus
5. any transfers from the Fund(s) to the Fixed Account Value; plus
6. any loan repayments credited to the Fixed Account Value.
Separate Account Value
The Separate Account Value of this Policy will be the sum of the Fund Account
Values.
A. Fund Account Value
The portion of each Net Premium allocated to a Fund plus any interest
earned on the Loan Account Value which is attributable to that Fund is
credited to this Policy in the form of accumulation units. Accumulation
units measure the net investment result of each Fund. The number of
accumulation units credited is equal to that portion of Net Premium divided
by the accumulation unit value for that Fund for the Valuation Period in
which the premium is received.
The Fund Account Value of each Fund will equal the accumulation unit value
for that Fund multiplied by the number of accumulation units for that Fund
credited to this Policy.
B. Accumulation Unit Value
A Fund Accumulation Unit Value is determined by multiplying the value of
the Fund's accumulation unit for the immediately preceding Valuation Period
by the net investment factor for the current period.
The net investment factor equals the net investment rate plus 1.0. The net
investment rate is determined separately for each Fund held in Variable
Life Account B as follows:
1. The net assets of the Fund held in Variable Life Account B at the end
of a Valuation Period; less
2. the net assets of the Fund held in Variable Life Account B at the
beginning of that Valuation Period, adjusted by any taxes or
provisions for taxes attributable to the operation of Variable Life
Account B; divided by
3. the value of the Fund's accumulation units held in Variable Life
Account B at the beginning of the Valuation Period; less
4. a daily charge at an annual rate not to exceed .90% of net assets of
the Fund for mortality and expense risks. The current mortality and
expense risk charge will be reduced by a percentage not to exceed .35%
for policies in force at least 10 years.
70180-1998US 10
<PAGE>
Charges to Policy Values
Charges and deductions made according to this Policy's provisions will be
deducted from the Separate Account Value and the Fixed Account Value in the same
proportion that these Values bear to the sum of the Fixed Account Value and the
Separate Account Value on the date of the deduction.
The portion of the deduction attributable to the Separate Account Value will
reduce each Fund Account Value proportionately. The value deducted from each
Fund is determined by dividing the amount of the deduction attributable to the
Fund by the Fund's accumulation unit value for the Valuation Period when the
charge was made. The resulting number of Fund accumulation units will be
deducted from the total accumulation units for that Fund.
The portion of the deduction attributable to the Fixed Account Value will be
deducted from that Value as a dollar amount.
Transfers Within Accounts
You may transfer all or part of each Fund Account Value to any other Fund or to
the Fixed Account Value at any time. There will be no charge for the first 12
transfers within a Policy Year, but we reserve the right to charge a $25
administrative fee for each additional transfer within that Policy Year.
Within the forty-five days following the Policy Anniversary, You may request a
transfer of a portion of the Fixed Account Value to one or more of the Funds.
This type of transfer is allowed only once within these forty-five days and We
must receive Your request at the Home Office within the forty-five days. The
transfer will be effective on the Valuation Date that Your request is received
by the Home Office. The amount of such transfer cannot exceed the greater of 20%
of the greatest amount in the Fixed Account Value during the prior 5 years or
$1000.
Accumulation units for each Fund will be added to or subtracted from the total
accumulation units for that Fund, based on each Fund's accumulation unit value
at the end of the Valuation Date when request for such transfer is received by
Us. A dollar amount will be added to or subtracted from the Fixed Account Value
according to the terms of Your request for transfer.
Monthly Deductions
Monthly deductions begin on the Date of Issue and occur on each Monthly
Deduction Day thereafter. The monthly deduction will be deducted from this
Policy's values as described in the Charges to Policy Values provision.
The monthly deduction is equal to:
1. the cost of insurance as calculated below; plus
2. the monthly policy fee, shown in the Policy Specifications.
Cost of Insurance
The Cost of Insurance on any Monthly Deduction Day will be (1) multiplied by the
result of (2) minus (3) where:
(1) is the monthly Cost of Insurance Rate on that date divided by 1,000;
(2) is the death benefit on that date divided by 1.0032737;
(3) is the Total Account Value on that date before computing the monthly
deductions for the cost of insurance for this Policy.
70180-1998US 11
<PAGE>
Cost of Insurance Rate
The monthly cost of insurance is based on the Insured's issue age, sex, number
of Policy Years elapsed and premium class. For Initial Coverage, the premium
class on the Date of Issue will be used. For any increase, the premium class for
that increase will be used. If the Insured is assigned a premium class which
designates "smoker" and this classification changes, You may, by Written
Request, reclassify the Insured any time after the first Policy Anniversary.
Upon Our acceptance of the change, supplemental Policy Specifications will be
sent to You.
The monthly Cost of Insurance Rates may be adjusted by Us from time to time.
Adjustments will be on a class basis and will be based on Our estimates for
future factors such as mortality, investment income, expenses, and the length of
time policies stay in force. Any adjustments will be made on a nondiscriminatory
basis.
The rate during any Policy Year will never exceed the rate shown for that year
in the Table of Guaranteed Maximum Insurance Rates in the Policy Specifications.
Guaranteed rates for this Policy are based on the 1980 Commissioner's Standard
Ordinary Mortality Table B.
Nonforfeiture Provisions
Continuation of Coverage
Coverage of this Policy will continue to the Maturity Date as long as the
Surrender Value is sufficient to cover each monthly deduction. If the Surrender
Value is not sufficient to cover a monthly deduction, the Grace Period provision
will apply.
Surrender Value
By Written Request, the Owner may surrender this Policy for its full surrender
value at any time during the lifetime of the Insured. All or a portion of the
premium load(s) and Premium Tax Charge in the first Policy Year will be refunded
to You within the first two Policy Years upon a full surrender. Decreases in the
Specified Amount will decrease the portion of the premium load(s) and Premium
Tax Charge refunded to you. All insurance coverage under this Policy will end on
the date of the full surrender. Partial surrenders will also be allowed.
The full Surrender Value will equal:
1. The Total Account Value on the date of surrender; less
2. the Loan Account Value plus any accrued interest; plus
3. the premium load refund, if any.
Partial Surrender
Partial surrenders may be made at any time after the first Policy Year while
this Policy is in force.
The minimum amount of any partial surrender is $500.
If the Death Benefit option for this Policy is option 1 or 3, a partial
surrender will reduce the Total Account Value, Death Benefit, and Specified
Amount. However, We will not allow a partial surrender if the Specified Amount
will be reduced below the Minimum Specified Amount.
If the Death Benefit on the date of the partial surrender is determined as a
percentage of the Total Account Value as described in the Death Benefit Options
section, the partial surrender may not reduce the Specified Amount.
If the Death Benefit option for this Policy is Option 2, a partial surrender
will reduce the Total Account Value and the Death Benefit. The Specified Amount
will not be reduced.
70180-1998US 12
<PAGE>
Paid-Up Nonforfeiture Option
By Written Request, You may elect, at any time prior to the Maturity Date, to
continue this Policy as paid-up life insurance with no further premiums due.
The Specified Amount of the paid-up insurance will be the amount, up to the
Death Benefit under this Policy as of the effective date of the paid-up
insurance, that the Surrender Value can purchase for a Net Single Premium at the
Insured's Attained Age and premium class on the date this option is elected. The
Net Single Premium will be based on the maximum cost of insurance rates in this
Policy and an interest rate of 4.0% compounded annually. Any excess value will
be refunded to You.
The effective date of the paid-up insurance will be the Monthly Deduction Day
which occurs on or immediately after the date Your request is received by Us.
As of the effective date:
[bullet] No further premium payments, monthly deductions, excess interest
credits or changes in coverage may be made; and
[bullet] No transfers from the Fixed Account Value back to the Separate Account
Value may be made; and
[bullet] all extra benefit riders will terminate.
You may, after electing paid-up insurance, surrender the Policy for its Total
Account Value. We will transfer the Separate Account Value to the Fixed Account
Value on the date we receive Your Written Request to elect this option.
Policy Loans
General
We will grant loans while this Policy is in force. The amount of the loan will
not be more than the Loan Value. The Loan Value for this Policy is 90% of the
sum of the Fixed Account Value and the Separate Account Value.
The amount of the loan will be transferred out of the Fixed Account and Separate
Account Values as described in the Charges to Policy Values provision. The loan
amount increases the Loan Account Value.
The Loan Account Value plus accrued interest will reduce any Proceeds under this
Policy. If the Loan Account Value exceeds the sum of the Separate Account Value
and Fixed Account Value, the Grace Period provision will apply.
Loan Interest Rate Charged
Interest, at an effective annual rate, will be charged on this Policy's Loan
Account Value. The rate of interest may change and applies to this Policy's
total Loan Account Value. Changes will be made only on a Policy Anniversary.
Interest is due and payable on the next Policy Anniversary, the date this Policy
ends or upon full repayment of the Loan Account Value. Any interest not paid
when due will be added to the Loan Account Value on the Policy Anniversary and
will itself bear interest on the same terms.
The interest rate is based on a Monthly Average. The Monthly Average will be the
Composite Yield on Corporate Bonds as published by Moody's Investors Service,
Inc., or any successor to that service. If such average is no longer published,
the average used will be determined by law or regulation of the insurance
supervisory official of the state where this policy is delivered. In no event
will the interest rate exceed the maximum rate imposed by law or regulation of
the state where this policy is delivered.
The interest rate charged during any Policy Year will not exceed the maximum
rate for that year. The maximum rate will be the greater of:
70180-1998US 13
<PAGE>
(1) the Monthly Average for the calendar month which ends 2 months before the
month in which the Policy Anniversary occurs; or
(2) 5.0%
We may increase the rate only when the maximum rate is at least .5% higher than
the rate in effect for the prior Policy Year.
We will reduce the rate only when the maximum rate is at least .5% lower than
the rate in effect for the prior Policy Year.
We will notify You of the current policy loan interest rate for this Policy at
the time a policy loan is taken. If the Policy has Loan Account Value, We will
notify You of any change in the interest rate before the new rate becomes
effective.
Loan Interest Rate Credited
The Loan Account Value will earn interest at a rate equal to the greater of:
(1) the policy loan interest rate less a rate not to exceed .90%; or
(2) 4.0%
We will notify You of the current policy loan interest rate for this Policy at
the time a policy loan is taken. If the Policy has Loan Account Value, We will
notify You of any change in the interest rate before the new rate becomes
effective.
The interest earned by the Loan Account Value will be credited to the Fixed
Account Value and the Separate Account Value in the same proportion in which the
loan amount was originally deducted from these values.
Repayment
The Loan Account Value may be repaid in full or in part at any time as long as
this Policy is in force and the Insured is living. The amount necessary to repay
all loans in full is the Loan Account Value plus any accrued interest. Loan
repayments will be allocated to the Fixed Account Value and the Separate Account
Value in the same proportion in which the loan was taken. The proportion
allocated to the Separate Account Value will be further allocated to the Funds
in accordance with current premium allocation. The Loan Account Value will be
reduced by the amount of any loan repayment.
Changes in Insurance Coverage
General
For any change in coverage We will require Your Written Request. Supplemental
Policy Specifications will be sent to You once the change is completed.
Increase in Specified Amount Increases will be allowed at any time.
Satisfactory evidence of insurability on the Insured will be required.
The Date of Issue for any increase will be shown in the Supplemental Policy
Specifications.
70180-1998US 14
<PAGE>
Decrease in Specified Amount
Decreases will be allowed at any time with our consent.
The amount of a decrease cannot reduce this Policy's Specified Amount below the
Minimum Specified Amount.
For a decrease in the Specified Amount, the Date of Issue will be the Monthly
Deduction Date on or next following the date on which Your Written Request is
received.
The decrease will reduce any past increases in the reverse order in which they
occurred.
Change in Death Benefit Option
Any change in the Death Benefit option is subject to the following conditions:
We will not allow a change from Death Benefit Options 1 or 2 to Death Benefit
Option 3.
We will not allow a change in the Death Benefit option if the Specified Amount
will be reduced below the Minimum Specified Amount.
The change will take effect on the Monthly Deduction Day on or next following
the date on which Your Written Request is received.
Evidence of insurability may be required.
Change from Option 1 to 2
Changes from Option 1 to 2 will be allowed at any time. The Specified Amount
will be reduced to equal the Specified Amount less the Total Account Value at
the time of the change.
Change from Option 2 to 1
Changes from Option 2 to 1 will be allowed at any time. The new Specified Amount
will equal the Specified Amount plus the Total Account Value at the time of the
change.
Change from Option 3 to 1
Changes from Option 3 to 1 will be allowed at any time. The Specified Amount
will be increased to equal the Specified Amount prior to the change, plus the
lesser of the accumulated premiums or the Total Account Value at the time of the
change.
Change from Option 3 to 2
Changes from Option 3 to 2 will be allowed at any time. The Specified Amount
will be reduced to equal the Specified Amount prior to the change plus the
difference between the Total Account Value and the accumulated premiums at the
time of the change.
Change of Fund(s)
The Company may:
1. Change the Fund(s) which may be invested in a Separate Account; and
2. replace the shares of Funds held in a Separate Account with shares of other
Funds(s).
70180-1998US 15
<PAGE>
Changes must be:
1. Approved by a majority vote of persons having an interest in the Separate
Account and its Fund(s); or
2. deemed necessary by Us under the Investment Company Act of 1940; or
3. deemed necessary by Us to accomplish the purpose of the Separate Account.
The investment policy of a Separate Account may not be changed without the
approval of the Insurance Commissioner of the State of Connecticut. The approval
process has been filed with the Commissioner.
We will notify You of any change.
Separate Account
Variable Life Account B is a Separate Account established by Us in accordance
with the laws of the State of Connecticut. Income, realized and unrealized gains
and losses from the assets of Variable Life Account B will be credited to or
charged against Variable Life Account B without regard to Our other income,
gains, or losses. Variable Life Account B's liabilities arise from the variable
life insurance policies that it supports. The assets of Variable Life Account B
are available to cover the liabilities of the General Account only to the extent
that Variable Life Account B's assets exceed its liabilities.
The value of the assets of Variable Life Account B is determined whenever the
policy benefits vary and at the end of every Valuation Period.
Settlement Options
Conditions
All or part of the Proceeds of this Certificate may be applied under one or more
of the options described below. An election shall be made by Written Request
filed with the Home Office. The Payee of Proceeds may make this election if no
prior election has been made. Our consent to the election of an option is
required if:
[bullet] the Payee is not a natural person receiving payments in his or her own
right; or
[bullet] the Payee is an assignee of this Certificate.
Whenany option is chosen, the Payee must designate whether the annuity will be:
(a) a fixed annuity
(b) a variable annuity, or
(c) a combination of (a) and (b).
If a fixed annuity is chosen, the annuity purchase rate for the option chosen
will reflect at least the minimum guaranteed interest rate of 3.0%.
Where a variable annuity is chosen, the Payee must elect an assumed annual net
return rate of 3.5% or 5.0%. If not elected, We will use an assumed annual net
return rate of 3.5%. The assumed annual net return rate is the interest rate
used to determine the amount of the first annuity payment under a variable
annuity.
70180-1998US 16
<PAGE>
If payments on a variable basis are not to decrease, We must earn a gross return
on the assets of Variable Annuity Account B of:
1. 4.75% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 3.5% is chosen;
or
2. 6.25% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 5% is chosen.
Payments will not change due to changes in the mortality or expense results or
administrative charges.
Separate Account
Payments on a variable basis will be made from the Proceeds held in Variable
Annuity Account B. Variable Annuity Account B is a Separate Account established
by Us in accordance with the laws of the State of Connecticut and the State of
New York. Income, realized and unrealized gains and losses from the assets of
Variable Annuity Account B will be credited to or charged against Variable
Annuity Account B without regard to Our other income, gains, or losses. Variable
Annuity Account B's liabilities arise from the variable portion of annuity
contracts and life insurance settlement options that it supports. The assets of
Variable Annuity Account B are available to cover the liabilities of the General
Account only to the extent that Variable Annuity Account B's assets exceed its
liabilities.
Fund(s) Settlement Option Units of Variable Annuity Account B
If payment on a variable basis is chosen, the first payment is calculated as
follows:
1. the portion of Proceeds applied to make payment on the variable basis;
divided by
2. 1,000; multiplied by
3. the payment rate for the option chosen.
This amount is divided by the Fund settlement option unit value on the tenth
Valuation Period before the due date of the first payment to determine the
number of Fund settlement option units. The number of Fund settlement option
units remains fixed unless a Fund transfer occurs. Each future payment is equal
to this number multiplied by the Fund settlement option unit value on the tenth
Valuation Period prior to the due date of the payment.
Fund(s) Settlement Option Unit Value of Variable Annuity Account B For any
Valuation Period the Fund settlement option unit value is equal to:
1. the value for the previous period; multiplied by
2. the net return factor(s) for the Period; multiplied by
3. a factor to reflect the assumed annual net return rate. The daily factor
for 3.5% per year is .9999058 or, for 5% per year, .9998663.
The dollar value of the Fund settlement option unit values and payments may
increase or decrease due to investment gain or loss.
70180-1998US 17
<PAGE>
Net Return Factor(s):
The net return factor(s) are used to compute Variable Annuity Account B values
and payments for any of its Funds.
The net return factor for each Fund is equal to 1.0000000 plus the net return
rate.
The net return rate is equal to:
1. the value of the shares of the Fund held by Variable Annuity Account B at
the end of a Valuation Period; less
2. the value of the shares of the Fund at the start of the Valuation Period;
adjusted by any taxes (or provisions for taxes) on Variable Annuity Account
B; divided by
3. the total value of the Fund settlement option units and other Fund
accumulation units of Variable Annuity Account B at the start of the
Valuation Period; less
4. a daily actuarial charge at an annual rate of 1.25% for annuity mortality
and expense risks and profit; and a daily administrative charge which will
not exceed .25% on an annual basis.
A net return rate may be more or less than 0.
The value of a share of the Fund is equal to the net assets of the Fund divided
by the number of shares outstanding.
If a variable annuity is chosen, the Payee must allocate the amount among the
allowable Funds. We reserve the right to allow no more than four funds to be
selected at any one time.
Fund Transfers During the Annuity Period:
At the request of the Payee, all or any portion of the amount allocated to a
Fund may be transferred from any Fund to any other allowable Fund. During the
annuity period, the maximum number of allowable transfers in a calendar year is
four. We reserve the right to change the number of allowable transfers.
Transfer requests must be expressed as a percentage of the allocation among the
Funds of the amount upon which the variable annuity will be based. We may
establish a minimum transfer amount. Transfers will be processed as of the
Valuation Date next following when a transfer request is received in good order
at Our Home Office.
70180-1998US 18
<PAGE>
Annuity Options:
Option 1 -- Payments for a Stated Period of Time -- An annuity will be paid for
5 to 30 years. If payments for this option are made under a variable annuity,
the present value of all or a portion of any remaining guaranteed payments may
be withdrawn at any time.
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- -------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- -------------------------------------------------------------------------------
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
- -------------------------------------------------------------------------------
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- --------------------------------------------------------------------------------
70180-1998US 19
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- --------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- --------------------------------------------------------------------------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- --------------------------------------------------------------------------------
Option 2 -- Life Income based on the life of the Payee -- Payments will be made
until the death of the Annuitant. When this option is chosen, a choice from the
following must be made:
(a) payments cease at the death of the Annuitant;
(b) payments may be guaranteed for 5-30 years; or
(c) Cash Refund: If the Annuitant dies, the Beneficiary will receive a lump
sum payment equal to the amount applied to the annuity option (less any
premium tax) allocated to the fixed annuity option less the total amount
of fixed annuity payments paid prior to such death. This cash refund
feature is only available on a fixed basis.
70180-1998US 20
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years
- -----------------------------------------------------------------------------
Adjusted Age
of Annuitant None 5 10 15 20 Cash
Refund
- -----------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12
55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49
60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56
70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33
75 8.06 7.82 7.14 6.25 5.38 6.51
- ------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70180-1998US 21
<PAGE>
OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years
- ------------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- ------------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- ------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70180-1998US 22
<PAGE>
OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years
- -----------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- -----------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- -----------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70180-1998US 23
<PAGE>
Option 3 -- Life Income based upon the lives of two Payees -- An annuity will be
paid during the lives of the Annuitant and a second Annuitant. Payments will
continue until both Annuitants have died. When this option is chosen, a choice
of the following must be made:
(a) 100% of the payment to continue after the first death;
(b) 66-2/3% of the payment to continue after the first death;
(c) 50% of the payment to continue after the first death;
(d) 100% of the payment to continue after the first death with a guarantee
of 5-30 years:
(e) 100% of the payment to continue at the death of the second annuitant
and 50% of the payment to continue at the death of the Annuitant; or
(f) 100% of the payment to continue after the first death with a cash
refund feature. If the Annuitant and joint Annuitant die, the
Beneficiary will receive a lump sum payment equal to the amount
applied to the annuity option (less any premium tax) less the total
amount of fixed annuity payments paid prior to such death. This cash
refund feature is only available on a fixed basis.
OPTION 3
Life Income for Two Payees
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- -------------------------------------------------------------------------------
Adjusted Ages
- --------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option Option
Annuitant 3a 3b 3c Guaranteed 3e 3f
- -------------------------------------------------------------------------------
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98
60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38
65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91
70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66
75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71
- -------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70180-1998US 24
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- -------------------------------------------------------------------------------
Adjusted Ages
- --------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option
Annuitant 3a 3b 3c Guaranteed 3e
- -------------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- ------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70180-1998US 25
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- -------------------------------------------------------------------------------
Adjusted Ages
- --------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option
Annuitant 3a 3b 3c Guaranteed 3e
- -------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
Option 4 -- Payment of interest on Proceeds left with Us -- Proceeds held under
this option may be left with Us after the Death of the Payee only with Our
consent. By Written Request, the Payee may later elect to:
[bullet] receive all or a portion of the amount held under this option; or
[bullet] apply all or a portion of this amount to Options 1, 2 or 3 as described
above.
Other Options -- We may make other options available as allowed by the laws of
the state in which this Certificate is delivered.
70180-1998US 26
<PAGE>
Other Terms of Annuity Options:
(a) Payments will be made on a monthly basis unless the Payee requests
otherwise.
(b) No choice of any annuity option may be made if the first payment would
be less than $50 or if the total payments in a year would be less than
$250 (unless otherwise required by state law).
(c) For purposes of calculating the guaranteed first payment of a variable
annuity or the payments for a fixed annuity, the Annuitant's and
second Annuitant's adjusted age will be used.
The Payee's and second Payee's adjusted age is his or her age as of
the birthday closest to the annuity commencement date reduced by one
year for annuity commencement dates occurring during the period of
time from July 1, 1992 through December 31, 1999. The Annuitant's and
second Annuitant's age will be reduced by two years for annuity
commencement dates occurring during the period of time from January 1,
2000 through December 31, 2009. The Annuitant's and second Annuitant's
age will be reduced by one additional year for annuity commencement
dates occurring in each succeeding decade.
(d) If a fixed annuity under Option 1, 2 or 3 is elected, We will use the
applicable current settlement option rate if it will provide higher
fixed annuity payments.
(e) When annuity payments start, the age of the Annuitant plus the number
of years for which payments are guaranteed must not exceed 95.
Death Benefit:
Upon the death of the Annuitant(s), any remaining guaranteed payments will
continue to the Beneficiary unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump sum. Such payments will be
paid at least as rapidly as under the method of distribution then in effect. If
the Beneficiary dies while receiving payments, the present value of any
remaining guaranteed payments will be paid in one sum to the beneficiary's
estate.
The interest rate used to determine the first annuity payment will be used to
calculate the present value. The present value will be determined as of the
Valuation Period in which proof of death acceptable to Us.
70180-1998US 27
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY OR
DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE
The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.
Values in each Fund held in a Separate Account may increase or decrease daily.
Such values are not guaranteed as to dollar amount. Refer to the Policy Values
section of this Policy for more information.
70180-1998US
EX-99.1.5(vi)
P O L I C Y S P E C I F I C A T I O N S
NAME OF
INSURED JOHN DOE
POLICY
NUMBER: I 1 111 000 MAY 1, 1998 DATE OF ISSUE
SEX AGE PREMIUM CLASS
MALE 35 PREFERRED NONSMOKER
BENEFICIARY - SEE ATTACHED BENEFICIARY AND POLICYOWNER ENDORSEMENTS SHEET.
POLICYOWNER - THE INSURED.
PLAN - FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INITIAL SPECIFIED AMOUNT: $100,000 DEATH BENEFIT OPTION: 1
PREMIUM ACCUMULATION RATE: N/A
MINIMUM SPECIFIED AMOUNT: $100,000
MATURITY DATE: MAY 1, 2063
INITIAL PLANNED PREMIUM: $3582.76
INITIAL PREMIUM MODE: ANNUAL
TARGET PREMIUM: $3582.76
MONTHLY DEDUCTION DAY: THE 1ST DAY OF EACH MONTH
NET PREMIUM INITIAL ALLOCATION PERCENTAGES:
GENERAL ACCOUNT 100%
MONTHLY POLICY FEE: SEE PAGE PS2
GUARANTEED MAXIMUM PREMIUM LOAD: IN THE FIRST YEAR, 15% ON PREMIUM UP TO
TARGET PREMIUM AND 6% ON PREMIUM IN
EXCESS OF THAT AMOUNT; IN THE SECOND
THROUGH FIFTH YEARS, 10% ON PREMIUM
UP TO TARGET PREMIUM AND 6% ON
PREMIUM IN EXCESS OF THAT AMOUNT; 6%
ON ALL PREMIUM EACH YEAR THEREAFTER.
GUARANTEED MAXIMUM PREMIUM TAX CHARGE: 5%
POLICY LOAN INTEREST: VARIABLE
GUARANTEED INTEREST RATE FOR FIXED ACCOUNT VALUE: 4.0% PER YEAR
THE PLANNED PREMIUM AMOUNT SHOWN ABOVE MAY NOT CONTINUE THE POLICY INFORCE TO
THE MATURITY DATE EVEN IF THIS AMOUNT IS PAID AS SCHEDULED. THE PERIOD FOR WHICH
THE POLICY WILL CONTINUE WILL DEPEND ON:
1) THE AMOUNT, TIMING AND FREQUENCY OF PREMIUM PAYMENTS;
2) CHANGES IN THE SPECIFIED AMOUNT AND THE DEATH BENEFIT OPTIONS;
3) CHANGES IN INTEREST CREDITED, FUND PERFORMANCE AND MORTALITY
DEDUCTIONS;
4) DEDUCTIONS FOR RIDERS AND BENEFITS;
5) PARTIAL SURRENDERS AND POLICY LOANS.
I 1 111 000 JOHN J. DOE PS 1 70182-1998US
<PAGE>
TABLE OF
GUARANTEED MAXIMUM INSURANCE RATES
(1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE)
PER $1,000 OF AMOUNT AT RISK
POLICY MONTHLY POLICY MONTHLY POLICY MONTHLY
YEAR RATE YEAR RATE YEAR RATE
1998 0.1367 2020 0.7506 2042 6.6202
1999 0.1442 2021 0.8207 2043 7.2522
2000 0.1525 2022 0.8966 2044 7.9604
2001 0.1634 2023 0.9843 2045 8.7645
2002 0.1750 2024 1.0812 2046 9.6778
2003 0.1875 2025 1.1931 2047 10.6795
2004 0.2025 2026 1.3234 2048 11.7575
2005 0.2167 2027 1.4705 2049 12.8813
2006 0.2342 2028 1.6318 2050 14.0599
2007 0.2509 2029 1.8066 2051 15.2671
2008 0.2717 2030 1.9931 2052 16.5210
2009 0.2926 2031 2.1915 2053 17.8367
2010 0.3151 2032 2.4074 2054 19.2390
2011 0.3409 2033 2.6520 2055 20.7666
2012 0.3676 2034 2.9679 2056 22.4984
2013 0.3968 2035 3.2514 2057 24.7092
2014 0.4319 2036 3.6273 2058 27.8276
2015 0.4711 2037 4.0488 2059 32.7885
2016 0.5161 2038 4.5069 2060 41.4578
2017 0.5678 2039 4.9957 2061 57.9566
2018 0.6237 2040 5.5110 2062 90.9091
2019 0.6846 2041 6.0472 2063 00.0000
THE CURRENT MONTHLY POLICY FEE IS $6.00. IT WILL NEVER EXCEED $10.00.
I 1 111 000 JOHN J. DOE
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70182-1998US
<PAGE>
AETNA LIFE INSURANCE AND ANNUITY COMPANY
Hartford, Connecticut 06156
(A STOCK COMPANY)
While this Policy is in force, Aetna will pay Proceeds John Doe
subject to all of this Policy's provisions. Other rights and
benefits are provided as described in this Policy. The
provisions of this and the following pages are part of this
Policy.
THIS POLICY IS A LEGAL CONTRACT BETWEEN YOU AND AETNA
PLEASE READ YOUR POLICY CAREFULLY
RIGHT OF POLICY EXAMINATION
This Policy may be returned to Aetna or its representative within 10 days after
its receipt. Return this Policy to Aetna, Individual Life Insurance, at 151
Farmington Avenue, Hartford, Connecticut 06156. Upon its return, this Policy
will be deemed void from its beginning. The amount refunded will be:
1. the difference between payments made and amounts allocated to Variable
Life Account B; plus
2. the value of amounts allocated to Variable Life Account B on the date
the returned contract is received by Aetna; plus
3. any charges made under this Policy's terms on the amounts allocated to
Variable Life Account B.
Signed for Aetna on its Date of Issue.
/s/ Thomas J. McInerney /s/ Kirk P. Wickman
President Secretary
____________________________
Registrar
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY OR
DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE
The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.
Values in each Fund held in a Separate Account may increase or decrease daily.
Such values are not guaranteed as to dollar amount. Refer to the Policy Values
section of this Policy for more information.
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70182-1998US
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
Page No.
Policy Specifications .............................................. PS1
Policy Summary ..................................................... 1
Definitions ........................................................ 1
Attained Age ................................................... 1
Date of Issue .................................................. 1
Death Benefit .................................................. 1
Fixed Account Value ............................................ 1
Fund(s) ........................................................ 1
General Account ................................................ 2
Home Office .................................................... 2
Initial Coverage ............................................... 2
Loan Account Value ............................................. 2
Maturity Date .................................................. 2
Minimum Specified Amount ....................................... 2
Monthly Deduction Day .......................................... 2
Net Premium .................................................... 2
Net Single Premium ............................................. 2
Policy Month ................................................... 2
Policy Year/Policy Anniversary ................................. 2
Premium Accumulation Rate ...................................... 2
Premium Tax Charge ............................................. 2
Proceeds ....................................................... 3
Separate Account ............................................... 3
Separate Account Value ......................................... 3
Specified Amount ............................................... 3
Subsequent Application(s) ...................................... 3
Target Premium ................................................. 3
Total Account Value ............................................ 3
Valuation Date ................................................. 3
Valuation Period ............................................... 3
Variable Annuity Account B ..................................... 3
Variable Life Account B ........................................ 3
We, Our, Us, Company ........................................... 3
Written Request ................................................ 3
You, Your ...................................................... 3
General Provisions .................................................. 4
The Contract ................................................... 4
Owner .......................................................... 4
Beneficiary .................................................... 4
Changes in Owner and Beneficiary ............................... 4
Assignment ..................................................... 4
Non-Participating .............................................. 4
Policy Settlement .............................................. 4
Age ............................................................ 5
Change of Address .............................................. 5
Annual Report .................................................. 5
Projection of Benefits ......................................... 5
Proceeds ....................................................... 5
Coverage Beyond Maturity ....................................... 6
Right to Defer Payment ......................................... 6
Suicide and Incontestability ........................................ 6
Suicide Exclusion .............................................. 6
Incontestability ............................................... 7
Premiums and Reinstatement .......................................... 7
General ........................................................ 7
Planned Premiums ............................................... 8
Additional Premiums ............................................ 8
Allocation of Premium .......................................... 8
Changes in Allocation Percentages .............................. 8
Grace Period ................................................... 8
Reinstatement .................................................. 8
Death Benefit Options ............................................... 9
General ........................................................ 9
Option 1 ....................................................... 9
Option 2 ....................................................... 9
Option 3 ....................................................... 9
Death Benefit Based on a Percentage ............................ 9
Policy Values ....................................................... 9
Basis of Calculation ........................................... 9
Interest Credited .............................................. 10
Fixed Account Value ............................................ 10
Separate Account Value ......................................... 10
Charges to Policy Values ....................................... 11
Transfers Within Accounts ...................................... 11
Monthly Deductions ............................................. 11
Cost of Insurance .............................................. 11
Cost of Insurance Rate ......................................... 12
Nonforfeiture Provisions ............................................ 12
Continuation of Coverage ....................................... 12
Surrender Value ................................................ 12
Partial Surrender .............................................. 12
Paid-Up Nonforfeiture Option ................................... 13
Policy Loans ........................................................ 13
General ........................................................ 13
Loan Interest Rate Charged ..................................... 13
Loan Interest Rate Credited .................................... 14
Repayment ...................................................... 14
Changes in Insurance Coverage ....................................... 14
General ........................................................ 14
Increase in Specified Amount ................................... 15
Decrease in Specified Amount ................................... 15
Change in Death Benefit Option ................................. 15
Change from Option 1 to 2 ...................................... 15
Change from Option 2 to 1 ...................................... 15
Change from Option 3 to 1 ...................................... 15
Change from Option 3 to 2 ...................................... 15
Change of Fund(s) ................................................... 15
Separate Account .................................................... 16
Settlement Options .................................................. 16
Conditions ..................................................... 16
Separate Account ............................................... 17
- --------------------------------------------------------------------------------
Any riders and a copy of the application(s) are at the end of this policy.
70182-1998US
<PAGE>
Table of Contents
- -------------------------------------------------------------------------
Page No.
Fund(s) Settlement Option Units of Variable Annuity
Account B ...................................................... 17
Fund(s) Settlement Option Unit Value of Variable
Annuity Account B .............................................. 17
Fund Transfers During the Annuity Period ....................... 18
Annuity Options ................................................ 19
Option 1 - Payments for a Stated Period of Time ................ 19
Option 2 - Life Income Based on the Life of the
Payee .......................................................... 20
Option 3 - Life Income Based Upon the Lives of
Two Payees ..................................................... 24
Option 4 - Payment of Interest on Proceeds Left
With Us ........................................................ 26
Other Terms of Annuity Options ................................. 27
Death Benefit .................................................. 27
70182-1998US
<PAGE>
Policy Summary
It is important that You understand Your insurance policy. We have tried to use
understandable language throughout this Policy. However, should You have any
questions after You have read it, please call the representative who sold this
Policy to You or call Us. This summary is not a substitute for the detailed
policy provisions.
This is a flexible premium variable life insurance policy. Proceeds as described
in this Policy will be paid upon surrender, maturity, or death of the Insured.
You may allocate Net Premiums to the General Account, Variable Life Account B,
or both Accounts. Net Premiums allocated to Variable Life Account B must be
allocated to one or more Funds. Shares of these Funds support the benefits
provided by the variable portion of this Policy. The cash value in each Fund is
not guaranteed and will vary with the investment performance of that Fund.
If the General Account is selected, the Fixed Account Value in that Account will
accumulate at rates of interest We determine. Such rates will not be less than
4.0% a year.
Sufficient premiums must be paid to continue this Policy in force. Premium
reminder notices will be sent for planned premiums and for premiums required to
continue this Policy in force. This Policy may be reinstated.
Other rights and benefits are explained in this Policy.
Definitions
Attained Age
Issue age of the Insured as shown in the Policy Specifications, increased by the
number of Policy Years elapsed. Issue age is the Insured's age on his/her
birthday nearest this Policy's Date of Issue.
Date of Issue
The effective date for Initial Coverage is the Date of Issue shown in the Policy
Specifications. The Date of Issue and the effective date for any change in
coverage will be the Date of Coverage Change shown in the supplemental Policy
Specifications which will be sent to You. Coverage is conditional on payment of
the first premium, if any, and issue of this Policy as provided in the
application.
Death Benefit
The amount described in the Death Benefit Options provision which is payable on
the date of death, subject to all provisions contained in this Policy.
Fixed Account Value
The non-loaned portion of this Policy's Total Account Value attributable to the
non-variable portion of this Policy. The Fixed Account Value is held in the
General Account.
Fund(s)
One or more of the open-end management investment companies (mutual funds whose
shares pay for the benefits provided by the variable portion of this Policy).
Shares of the Funds held pursuant to this Policy are held in Variable Life
Account B except that shares of the Funds referenced in the Settlement Options
section of this Policy are held in Variable Annuity Account B. The Fund(s) held
in Variable Life Account B may differ from the Fund(s) held in Variable Annuity
Account B.
70182-1998US 1
<PAGE>
General Account
The account which holds the assets of the Company which are attributable to the
non-variable portion of this Policy. The Fixed Account Value and the Loan
Account Value are held in the General Account.
Home Office
Our main office, located at 151 Farmington Avenue, Hartford, Connecticut 06156.
Initial Coverage
Coverage provided by this Policy prior to any change in coverage.
Loan Account Value
The sum of all unpaid loans. The amount necessary to repay all loans in full is
the Loan Account Value plus any accrued interest. The Loan Account Value is held
in the General Account.
Maturity Date
The Policy Anniversary on which the Insured reaches Attained Age 100.
Minimum Specified Amount
The Specified Amount for this Policy cannot be decreased below this amount. The
Minimum Specified Amount for this Policy is shown in the Policy Specifications.
Monthly Deduction Day
The first Monthly Deduction Day is the Date of Issue. Monthly Deduction Days
occur each month thereafter on the same day of the month as the Date of Issue.
Net Premium
The Net Premium is equal to:
1. the premium paid; less
2. a Premium Load not to exceed the Guaranteed Maximum Premium Load shown in
the Policy Specifications; less
3. a Premium Tax Charge.
Net Single Premium
The Net Single Premium per dollar is the amount We require to purchase one
dollar of paid up whole life insurance. We determine the Net Single Premium
using the number of elapsed Policy Years, the Insured's premium class and
Attained Age, an interest rate of 4.0% per annum and the guaranteed cost of
insurance rates specified in the Policy Specifications.
Policy Month
The Policy Month begins each month on the same day of the month as the Date of
Issue.
Policy Year/Policy Anniversary
The first Policy Year is the 12 month period beginning on the Date of Issue.
Your Policy Anniversary is equal to the Date of Issue plus 1 year, 2 years, etc.
Premium Accumulation Rate
The annual rate at which premiums paid will be accumulated to determine the
Death Benefit if Death Benefit Option 3 is selected. This rate is chosen by You
at issue. A rate requested in excess of 10% may be subject to additional
underwriting. The Premium Accumulation Rate is shown in the Policy
Specifications.
Premium Tax Charge
A charge equal to the state and municipal taxes associated with premiums
received.
70182-1998US 2
<PAGE>
Proceeds
The amount We will pay upon the death of the Insured, the Maturity Date, or upon
surrender of this Policy as described in the Proceeds provision.
Separate Account
Variable Life Account B; or, when referring to a settlement option as described
in the Settlement Option provisions of this Policy, Variable Annuity Account B.
Separate Account Value
The portion of this Policy's Total Account Value attributable to the variable
portion of this Policy. This Policy's Separate Account Value is held in Variable
Life Account B.
Specified Amount
The Specified Amount is shown in the Policy Specifications or in the
Supplemental Policy Specifications, if later changed.
Subsequent Application(s)
Any application after the initial application initiated by You or by Us.
Target Premium
The Target Premium is shown in the Policy Specifications or in the Supplemental
Policy Specifications, if later changed.
Total Account Value
The sum of the Fixed Account Value, the Separate Account Value, and the Loan
Account Value. This is the Policy's cash value.
Valuation Date
Any day on which the New York Stock Exchange is open for trading.
Valuation Period
The period of time commencing, usually at 4:15 p.m. Eastern Time on each
Valuation Date and ending at 4:15 p.m. Eastern Time on the next Valuation Date.
Variable Annuity Account B
A Separate Account which segregates assets attributable to the variable portion
of annuity contracts and life insurance settlement options from other assets of
the Company. Its assets are invested in shares of the Funds. Variable Annuity
Account B holds all or a portion of the Policy's Proceeds if a variable
settlement option is elected.
Variable Life Account B
A Separate Account which segregates assets attributable to the variable portion
of life insurance from other assets of the Company. Its assets are invested in
shares of the Funds.
We, Our, Us, Company
Refers to Aetna Life Insurance and Annuity Company, its successors, or assigns.
Written Request
A request in writing, in a form satisfactory to Us and received by Us at the
Home Office.
You, Your
Refers to the Owner(s) of this Policy.
70182-1998US 3
<PAGE>
General Provisions
The Contract
This Policy, the initial application on the Insured, any Subsequent Applications
and any riders constitute the entire contract. Copies of all applications are
attached to and made a part of this Policy.
Only the President, Executive Vice President, or the Corporate Secretary may
agree to a change in this Policy, and then only in writing.
All statements made by or for the Insured are representations and not
warranties.
No statement will be used to void this Policy or defend against a claim unless
it is contained in the initial application or Subsequent Applications.
Owner
Unless otherwise stated in the application or later changed, this Policy is
owned by the Insured.
During the lifetime of the Insured all rights granted by this Policy or allowed
by Us belong to the Owner.
If this Policy is owned jointly, any exercise of rights granted by this Policy
must be made jointly.
Beneficiary
The individual or entity that will receive any Proceeds on death is the
Beneficiary. The Beneficiary is stated in the application, unless later changed.
If no designated Beneficiary is living at the time of the death of the Insured,
all benefits will be paid to the Owner or the Owner's executors, administrators,
or assigns.
Changes in Owner and Beneficiary
Unless this Policy states otherwise, the Owner or Beneficiary, or both, may be
changed. This may be done as often as desired by the Owner of record during the
lifetime of the Insured and before the Maturity Date.
To change the Owner or Beneficiary, Your Written Request must be sent to Us.
When We give Our written acceptance, the change will take effect as of the date
Your Written Request was signed. The change will be subject to any action We
take before Our written acceptance of the change.
Assignment
A copy of an assignment must be on file at the Home Office. Until We receive
such notice, We will not be required to take notice of, or be responsible for,
any transfer of interest in this Policy by assignment, agreement, or otherwise.
We will not be responsible for the validity of any assignment.
Non-Participating
No dividends will be paid.
Policy Settlement
All amounts payable by Us will be paid by the Home Office. The Loan Account
Value plus any accrued interest will be deducted from the amount payable at
settlement. We may require return of this Policy.
70182-1998US 4
<PAGE>
Age
If the Insured's age is misstated, the Death Benefit will be that which would
have been purchased by the most recent monthly deduction at the correct age.
Change of Address
You must notify Us at the Home Office of a change in Your mailing address.
Annual Report
We will send You a report at least once during each Policy Year. The report will
show the Total Account Value, the Surrender Value and the Death Benefit on the
date of the report. It will also show since the last report at least the
following information:
1. Gross premiums paid;
2. the cost of insurance and the cost of riders;
3. interest and investment return credited to the Total Account Value;
4. the amount of any surrenders or partial surrenders;
5. a summary of loan activity; and
6. any other information required by the State in which this Policy was
delivered.
Projection of Benefits
We will provide a projection of illustrative future death benefits and Total
Account Values at any time upon Written Request.
Proceeds
Proceeds on death of the Insured will equal:
1. The Death Benefit; less
2. the Loan Account Value plus any accrued interest; less
3. any overdue deductions.
Proceeds on death are payable after receipt at the Home Office of due proof of
death of the Insured.
Proceeds on maturity of this Policy will equal:
1. The Total Account Value on the Maturity Date; less
2. the Loan Account Value plus any accrued interest.
Proceeds on surrender of this Policy will equal the Surrender Value as described
in the Surrender Value provision.
All Proceeds are subject to adjustment under the Age, Incontestability, Suicide
Exclusion and Grace Period provisions.
70182-1998US 5
<PAGE>
Coverage Beyond Maturity
At any time prior to the Maturity Date of this Policy, You may, by Written
Request, elect to continue coverage beyond the Maturity Date. Any extra benefit
riders will be terminated on the Maturity Date. If elected, the following will
apply:
[bullet] We will continue to credit interest to the Total Account Value of this
Policy as described in the Interest Credited provision.
[bullet] After the Insured reaches Attained Age 100 the Separate Account Value
of this Policy will be transferred to the Fixed Account.
[bullet] Monthly Deductions will be calculated with a Cost of Insurance rate
equal to zero.
[bullet] Proceeds payable on death will be as described in the Proceeds
provision of this Policy.
The Paid Up Nonforfeiture Option will not be available once this option is
selected. All other rights and benefits as described within the provisions of
this Policy will be available during the lifetime of the Insured.
Right to Defer Payment
Payments of any Separate Account Value will be made within 7 days after Our
receipt of Your Written Request. However, the Company reserves the right to
suspend or postpone the date of any payment of any benefit or values for any
Valuation Period (1) when the New York Stock Exchange is closed (except holidays
or weekends); (2) when trading on the Exchange is restricted; (3) when an
emergency exists as determined by the SEC so that disposal of the securities
held in the Funds is not reasonably practicable or it is not reasonably
practicable to determine the value of the Funds' net assets; or (4) during any
other period when the SEC, by order, so permits for the protection of security
holders. For payment from the Separate Account in such instances, We may defer
payment of:
1. Surrender or partial surrender values;
2. any Proceeds on death in excess of the current Specified Amount; or
3. any portion of the Loan Value.
Payment of any Fixed Account Value may be deferred for up to six months, except
when used to pay premiums to Us.
Suicide and Incontestability
Suicide Exclusion
If the Insured dies by suicide, while sane or insane, within two years from the
Date of Issue of this Policy and while this Policy is inforce, We will pay:
1. Premiums paid less amounts allocated to Variable Life Account B; plus
2. the Separate Account Value; plus
3. the portion of the monthly deductions that have been deducted from the
Separate Account Value; less
70182-1998US 6
<PAGE>
4. the sum of:
(a) the Loan Account Value transferred from the Fixed Account Value; plus
(b) the interest due on the Loan Account Value; plus
(c) the value of any partial surrenders transferred from the Fixed Account
Value; plus
(d) any interest earned on the Loan Account Value transferred to the
Separate Account Value.
If the Insured dies by suicide, while sane or insane, within 2 years from the
Date of Issue of any increase in coverage, We will pay only the monthly
deductions for the increase.
If the Insured dies by suicide, while sane or insane, more than 2 years from the
Date of Issue of this Policy but within 2 years from the Date of Issue of any
increase in coverage, We will pay:
1. The Proceeds on death for any coverage in effect more than 2 years from the
Date of Issue of this Policy; plus
2. the monthly deductions for the increase in coverage.
All amounts will be calculated as of the date of death.
Incontestability
With respect to statements made in the initial application for the Insured:
[bullet] We will not contest this Policy after it has been in force during the
lifetime of the Insured for 2 years from its Date of Issue.
With respect to statements made in any Subsequent Applications for the Insured:
[bullet] We will not contest coverage relating to Subsequent Applications after
coverage has been in force during the lifetime of the Insured for 2
years from the Date of Issue of such coverage or from the effective
date of any reinstatement.
If this Policy is contested, Your rights or the Beneficiary's rights may be
affected.
Premiums and Reinstatement
General
Sufficient premiums must be paid to continue this Policy in force until the
Maturity Date. The first premium is due on the Date of Issue. Premium due dates
are measured from the Date of Issue.
Any premiums after the first premium are payable only at Our Home Office. Send
Your check or money order, payable to Aetna, to the Home Office. Please be sure
to write Your policy number on Your check. A receipt signed by an officer of the
Company will be given upon request.
We may apply limits for Planned Premiums and Additional Premiums as necessary to
preserve the status of this Policy as a life insurance policy under federal tax
law.
We may require satisfactory evidence of insurability if payment of the new
Planned Premium or an Additional Premium during the current Policy Year would
increase the difference between the Death Benefit and the Total Account Value.
70182-1998US 7
<PAGE>
Planned Premiums
Planned Premium is the premium amount You intend to pay and the amount that will
be billed. Premium reminder notices for Planned Premiums will be sent at
frequencies of 3, 6 or 12 months, or at any other frequency to which We agree.
Planned premiums as of the Date of Issue are shown in the Policy Specifications.
You may change the amount and frequency of Planned Premiums by Your Written
Request.
Additional Premiums
Additional Premiums are premium payments in excess of planned premiums.
Additional Premiums may be paid at any time while this Policy is in force and
before the Maturity Date.
Allocation of Premium
Each Net Premium will be credited to Variable Life Account B (and each of the
selected Funds) and/or the General Account in the percentages indicated in the
Policy Specifications, unless changed as provided in the Changes in Allocation
Percentages provision below.
Changes in Allocation Percentages
Allocation percentages may be changed at any time by Your request to Us.
Percentages must be changed in whole percentages. If these percentages are
changed in accordance with this provision, We will send a letter to You
confirming the change. The change will be effective as of the date of the next
premium payment after You notify Us.
Grace Period
If the Total Account Value less the Loan Account Value is not sufficient to
allow a Monthly Deduction on the Monthly Deduction Day, We will allow You 61
days of grace for payment of an amount sufficient to cover the Monthly
Deduction. We may require payment of the amount necessary to keep this Policy in
force for the current Policy Month plus two additional Policy Months.
Written notice will be mailed to Your last known address, according to Our
records, not less than 61 days before termination of this Policy. This notice
will also be mailed to the last known address of any assignee of record.
During the days of grace this Policy will stay in force. If the Insured's death
occurs during the days of grace, We will deduct an amount sufficient to cover
the overdue Monthly Deduction(s) from the Death Benefit.
If payment is not made within 61 days after the Monthly Deduction Day, the
Policy will terminate without value at the end of the Grace Period.
Reinstatement
If this Policy terminates as provided in the Grace Period provision, We may
allow it to be reinstated within 5 years after the date of termination and
before the Maturity Date. To reinstate this Policy, We will require:
1. satisfactory evidence of insurability on the Insured; and
2. payment of an amount sufficient to cover the current monthly deduction(s)
plus two additional Policy Months.
If this Policy is reinstated, it will be reinstated on the Monthly Deduction Day
following Our approval. This Policy's Total Account Value at reinstatement will
be the Net Premium paid less the monthly deduction for that day. Any Loan
Account Value will not be reinstated.
Death Benefit Options
70182-1998US 8
<PAGE>
General
The Proceeds payable upon the Insured's death will be as provided under one of
the following Death Benefit options. The option for this Policy as of the Date
of Issue is shown in the Policy Specifications. If You have changed the Death
Benefit option, the option is shown in the supplemental Policy Specifications
which will be sent to You.
Option 1
The Specified Amount shown in the Policy Specifications includes the Total
Account Value. Under this option, the Death Benefit will be the greater of: (a)
the Specified Amount on the date of death or (b) a percentage of the Total
Account Value, as described in the table below.
Option 2
The Specified Amount is in addition to the Total Account Value. Under this
option, the Death Benefit will be the greater of: (a) the Specified Amount plus
the Total Account Value on the date of death or (b) a percentage of the Total
Account Value, as described in the table below.
Option 3
Under this option, the Death Benefit will be the greater of (a) the Specified
Amount plus the Accumulated Premium(s) on the date of death, or (b) a percentage
of the Total Account Value, as described below. This option may be selected only
at issue. The total death benefit under this option is limited and will not
exceed the total Death Benefit paid under Option 2.
The Accumulated Premium is the sum of all premiums paid from the Date of Issue
accumulated at the Premium Accumulation Rate.
Death Benefit Based on a Percentage
As determined below, Item (b) under either Death Benefit option will not be less
than a percentage of the Total Account Value on the date of death.
- --------------------------------------------------------------------------------
TOTAL TOTAL TOTAL TOTAL
ATTAINED ACCOUNT ATTAINED ACCOUNT ATTAINED ACCOUNT ATTAINED ACCOUNT
AGE VALUE % AGE VALUE % AGE VALUE % AGE VALUE %
- --------------------------------------------------------------------------------
0-40 250%
41 243 51 178% 61 128% 71 113%
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 101
50 185 60 130 70 115 95 + 100
- --------------------------------------------------------------------------------
Policy Values
Basis of Calculation
The values of this Policy equal or exceed those required by the Standard
Nonforfeiture Law as provided in the Variable Life Insurance law in the state
where this Policy is delivered. A detailed statement has been filed with the
state which shows how to compute those values.
70182-1998US 9
<PAGE>
Interest Credited
We will credit interest on the Fixed Account Value at the guaranteed rate of
4.0% per year. This guaranteed rate equals 0.32737%, per month, compounded
monthly. We may credit interest in excess of the guaranteed rate. Additional
excess interest at a rate not to exceed 1/2% will be credited to policies in
force at least 10 years. The guaranteed interest rate will not be increased by
the additional excess interest rate.
Interest earned by the Loan Account Value is described in the Loan Interest
Credited provision.
Fixed Account Value
The Fixed Account Value for this Policy will be:
1. The value of the Net Premiums credited to the Fixed Account Value; less
2. the portion of monthly deductions from the Fixed Account Value; plus
3. interest credited; less
4. any transfers of value out of the Fixed Account Value; plus
5. any transfers from the Fund(s) to the Fixed Account Value; plus
6. any loan repayments credited to the Fixed Account Value.
Separate Account Value
The Separate Account Value of this Policy will be the sum of the Fund Account
Values.
A. Fund Account Value
The portion of each Net Premium allocated to a Fund plus any interest
earned on the Loan Account Value which is attributable to that Fund is
credited to this Policy in the form of accumulation units. Accumulation
units measure the net investment result of each Fund. The number of
accumulation units credited is equal to that portion of Net Premium divided
by the accumulation unit value for that Fund for the Valuation Period in
which the premium is received.
The Fund Account Value of each Fund will equal the accumulation unit value
for that Fund multiplied by the number of accumulation units for that Fund
credited to this Policy.
B. Accumulation Unit Value
A Fund Accumulation Unit Value is determined by multiplying the value of
the Fund's accumulation unit for the immediately preceding Valuation Period
by the net investment factor for the current period.
The net investment factor equals the net investment rate plus 1.0. The net
investment rate is determined separately for each Fund held in Variable
Life Account B as follows:
1. The net assets of the Fund held in Variable Life Account B at the end
of a Valuation Period; less
2. the net assets of the Fund held in Variable Life Account B at the
beginning of that Valuation Period, adjusted by any taxes or
provisions for taxes attributable to the operation of Variable Life
Account B; divided by
3. the value of the Fund's accumulation units held in Variable Life
Account B at the beginning of the Valuation Period; less
70182-1998US 10
<PAGE>
4. a daily charge at an annual rate not to exceed .90% of net assets of
the Fund for mortality and expense risks. The current mortality and
expense risk charge will be reduced by a percentage not to exceed .35%
for policies in force at least 10 years.
Charges to Policy Values
Charges and deductions made according to this Policy's provisions will be
deducted from the Separate Account Value and the Fixed Account Value in the same
proportion that these Values bear to the sum of the Fixed Account Value and the
Separate Account Value on the date of the deduction.
The portion of the deduction attributable to the Separate Account Value will
reduce each Fund Account Value proportionately. The value deducted from each
Fund is determined by dividing the amount of the deduction attributable to the
Fund by the Fund's accumulation unit value for the Valuation Period when the
charge was made. The resulting number of Fund accumulation units will be
deducted from the total accumulation units for that Fund.
The portion of the deduction attributable to the Fixed Account Value will be
deducted from that Value as a dollar amount.
Transfers Within Accounts
You may transfer all or part of each Fund Account Value to any other Fund or to
the Fixed Account Value at any time. There will be no charge for the first 12
transfers within a Policy Year, but we reserve the right to charge a $25
administrative fee for each additional transfer within that Policy Year.
Within the forty-five days following the Policy Anniversary, You may request a
transfer of a portion of the Fixed Account Value to one or more of the Funds.
This type of transfer is allowed only once within these forty-five days and We
must receive Your request at the Home Office within the forty-five days. The
transfer will be effective on the Valuation Date that Your request is received
by the Home Office. The amount of such transfer cannot exceed the greater of 20%
of the greatest amount in the Fixed Account Value during the prior 5 years or
$1000.
Accumulation units for each Fund will be added to or subtracted from the total
accumulation units for that Fund, based on each Fund's accumulation unit value
at the end of the Valuation Date when request for such transfer is received by
Us. A dollar amount will be added to or subtracted from the Fixed Account Value
according to the terms of Your request for transfer.
Monthly Deductions
Monthly deductions begin on the Date of Issue and occur on each Monthly
Deduction Day thereafter. The monthly deduction will be deducted from this
Policy's values as described in the Charges to Policy Values provision.
The monthly deduction is equal to:
1. the cost of insurance as calculated below; plus
2. the monthly policy fee, shown in the Policy Specifications.
Cost of Insurance
The Cost of Insurance on any Monthly Deduction Day will be (1) multiplied by the
result of (2) minus (3) where:
(1) is the monthly Cost of Insurance Rate on that date divided by 1,000;
(2) is the death benefit on that date divided by 1.0032737;
(3) is the Total Account Value on that date before computing the monthly
deductions for the cost of insurance for this Policy.
70182-1998US 11
<PAGE>
Cost of Insurance Rate
The monthly cost of insurance is based on the Insured's issue age, sex, number
of Policy Years elapsed and premium class. For Initial Coverage, the premium
class on the Date of Issue will be used. For any increase, the premium class for
that increase will be used. If the Insured is assigned a premium class which
designates "smoker" and this classification changes, You may, by Written
Request, reclassify the Insured any time after the first Policy Anniversary.
Upon Our acceptance of the change, supplemental Policy Specifications will be
sent to You.
The monthly Cost of Insurance Rates may be adjusted by Us from time to time.
Adjustments will be on a class basis and will be based on Our estimates for
future factors such as mortality, investment income, expenses, and the length of
time policies stay in force. Any adjustments will be made on a nondiscriminatory
basis.
The rate during any Policy Year will never exceed the rate shown for that year
in the Table of Guaranteed Maximum Insurance Rates in the Policy Specifications.
Guaranteed rates for this Policy are based on the 1980 Commissioner's Standard
Ordinary Mortality Table B.
Nonforfeiture Provisions
Continuation of Coverage
Coverage of this Policy will continue to the Maturity Date as long as the
Surrender Value is sufficient to cover each monthly deduction. If the Surrender
Value is not sufficient to cover a monthly deduction, the Grace Period provision
will apply.
Surrender Value
By Written Request, the Owner may surrender this Policy for its full surrender
value at any time during the lifetime of the Insured. All or a portion of the
premium load(s) and Premium Tax Charge in the first Policy Year will be refunded
to You within the first two Policy Years upon a full surrender. Decreases in the
Specified Amount will decrease the portion of the premium load(s) and Premium
Tax Charge refunded to you. All insurance coverage under this Policy will end on
the date of the full surrender. Partial surrenders will also be allowed.
The full Surrender Value will equal:
1. The Total Account Value on the date of surrender; less
2. the Loan Account Value plus any accrued interest; plus
3. the premium load refund, if any.
Partial Surrender
Partial surrenders may be made at any time after the first Policy Year while
this Policy is in force.
The minimum amount of any partial surrender is $500.
If the Death Benefit option for this Policy is option 1 or 3, a partial
surrender will reduce the Total Account Value, Death Benefit, and Specified
Amount. However, We will not allow a partial surrender if the Specified Amount
will be reduced below the Minimum Specified Amount.
If the Death Benefit on the date of the partial surrender is determined as a
percentage of the Total Account Value as described in the Death Benefit Options
section, the partial surrender may not reduce the Specified Amount.
If the Death Benefit option for this Policy is Option 2, a partial surrender
will reduce the Total Account Value and the Death Benefit. The Specified Amount
will not be reduced.
Paid-Up Nonforfeiture Option
70182-1998US 12
<PAGE>
By Written Request, You may elect, at any time prior to the Maturity Date, to
continue this Policy as paid-up life insurance with no further premiums due.
The Specified Amount of the paid-up insurance will be the amount, up to the
Death Benefit under this Policy as of the effective date of the paid-up
insurance, that the Surrender Value can purchase for a Net Single Premium at the
Insured's Attained Age and premium class on the date this option is elected. The
Net Single Premium will be based on the maximum cost of insurance rates in this
Policy and an interest rate of 4.0% compounded annually. Any excess value will
be refunded to You.
The effective date of the paid-up insurance will be the Monthly Deduction Day
which occurs on or immediately after the date Your request is received by Us.
As of the effective date:
[bullet] No further premium payments, monthly deductions, excess interest
credits or changes in coverage may be made; and
[bullet] No transfers from the Fixed Account Value back to the Separate Account
Value may be made; and
[bullet] all extra benefit riders will terminate.
You may, after electing paid-up insurance, surrender the Policy for its Total
Account Value. We will transfer the Separate Account Value to the Fixed Account
Value on the date we receive Your Written Request to elect this option.
Policy Loans
General
We will grant loans while this Policy is in force. The amount of the loan will
not be more than the Loan Value. The Loan Value for this Policy is 90% of the
sum of the Fixed Account Value and the Separate Account Value.
The amount of the loan will be transferred out of the Fixed Account and Separate
Account Values as described in the Charges to Policy Values provision. The loan
amount increases the Loan Account Value.
The Loan Account Value plus accrued interest will reduce any Proceeds under this
Policy. If the Loan Account Value exceeds the sum of the Separate Account Value
and Fixed Account Value, the Grace Period provision will apply.
Loan Interest Rate Charged
Interest, at an effective annual rate, will be charged on this Policy's Loan
Account Value. The rate of interest may change and applies to this Policy's
total Loan Account Value. Changes will be made only on a Policy Anniversary.
Interest is due and payable on the next Policy Anniversary, the date this Policy
ends or upon full repayment of the Loan Account Value. Any interest not paid
when due will be added to the Loan Account Value on the Policy Anniversary and
will itself bear interest on the same terms.
70182-1998US 13
<PAGE>
The interest rate is based on a Monthly Average. The Monthly Average will be the
Composite Yield on Corporate Bonds as published by Moody's Investors Service,
Inc., or any successor to that service. If such average is no longer published,
the average used will be determined by law or regulation of the insurance
supervisory official of the state where this policy is delivered. In no event
will the interest rate exceed the maximum rate imposed by law or regulation of
the state where this policy is delivered.
The interest rate charged during any Policy Year will not exceed the maximum
rate for that year. The maximum rate will be the greater of:
(1) the Monthly Average for the calendar month which ends 2 months before the
month in which the Policy Anniversary occurs; or
(2) 5.0%
We may increase the rate only when the maximum rate is at least .5% higher than
the rate in effect for the prior Policy Year.
We will reduce the rate only when the maximum rate is at least .5% lower than
the rate in effect for the prior Policy Year.
We will notify You of the current policy loan interest rate for this Policy at
the time a policy loan is taken. If the Policy has Loan Account Value, We will
notify You of any change in the interest rate before the new rate becomes
effective.
Loan Interest Rate Credited
The Loan Account Value will earn interest at a rate equal to the greater of:
(1) the policy loan interest rate less a rate not to exceed .90%; or
(2) 4.0%
We will notify You of the current policy loan interest rate for this Policy at
the time a policy loan is taken. If the Policy has Loan Account Value, We will
notify You of any change in the interest rate before the new rate becomes
effective.
The interest earned by the Loan Account Value will be credited to the Fixed
Account Value and the Separate Account Value in the same proportion in which the
loan amount was originally deducted from these values.
Repayment
The Loan Account Value may be repaid in full or in part at any time as long as
this Policy is in force and the Insured is living. The amount necessary to repay
all loans in full is the Loan Account Value plus any accrued interest. Loan
repayments will be allocated to the Fixed Account Value and the Separate Account
Value in the same proportion in which the loan was taken. The proportion
allocated to the Separate Account Value will be further allocated to the Funds
in accordance with current premium allocation. The Loan Account Value will be
reduced by the amount of any loan repayment.
Changes in Insurance Coverage
General
For any change in coverage We will require Your Written Request. Supplemental
Policy Specifications will be sent to You once the change is completed.
70182-1998US 14
<PAGE>
Increase in Specified Amount
Increases will be allowed at any time.
Satisfactory evidence of insurability on the Insured will be required.
The Date of Issue for any increase will be shown in the Supplemental Policy
Specifications.
Decrease in Specified Amount
Decreases will be allowed at any time with our consent.
The amount of a decrease cannot reduce this Policy's Specified Amount below the
Minimum Specified Amount.
For a decrease in the Specified Amount, the Date of Issue will be the Monthly
Deduction Date on or next following the date on which Your Written Request is
received.
The decrease will reduce any past increases in the reverse order in which they
occurred.
Change in Death Benefit Option
Any change in the Death Benefit option is subject to the following conditions:
We will not allow a change from Death Benefit Options 1 or 2 to Death Benefit
Option 3.
We will not allow a change in the Death Benefit option if the Specified Amount
will be reduced below the Minimum Specified Amount.
The change will take effect on the Monthly Deduction Day on or next following
the date on which Your Written Request is received.
Evidence of insurability may be required.
Change from Option 1 to 2
Changes from Option 1 to 2 will be allowed at any time. The Specified Amount
will be reduced to equal the Specified Amount less the Total Account Value at
the time of the change.
Change from Option 2 to 1
Changes from Option 2 to 1 will be allowed at any time. The new Specified Amount
will equal the Specified Amount plus the Total Account Value at the time of the
change.
Change from Option 3 to 1
Changes from Option 3 to 1 will be allowed at any time. The Specified Amount
will be increased to equal the Specified Amount prior to the change, plus the
lesser of the accumulated premiums or the Total Account Value at the time of the
change.
Change from Option 3 to 2
Changes from Option 3 to 2 will be allowed at any time. The Specified Amount
will be reduced to equal the Specified Amount prior to the change plus the
difference between the Total Account Value and the accumulated premiums at the
time of the change.
Change of Fund(s)
The Company may:
1. Change the Fund(s) which may be invested in a Separate Account; and
2. replace the shares of Funds held in a Separate Account with shares of other
Funds(s).
70182-1998US 15
<PAGE>
Changes must be:
1. Approved by a majority vote of persons having an interest in the Separate
Account and its Fund(s); or
2. deemed necessary by Us under the Investment Company Act of 1940; or
3. deemed necessary by Us to accomplish the purpose of the Separate Account.
The investment policy of a Separate Account may not be changed without the
approval of the Insurance Commissioner of the State of Connecticut. The approval
process has been filed with the Commissioner.
We will notify You of any change.
Separate Account
Variable Life Account B is a Separate Account established by Us in accordance
with the laws of the State of Connecticut. Income, realized and unrealized gains
and losses from the assets of Variable Life Account B will be credited to or
charged against Variable Life Account B without regard to Our other income,
gains, or losses. Variable Life Account B's liabilities arise from the variable
life insurance policies that it supports. The assets of Variable Life Account B
are available to cover the liabilities of the General Account only to the extent
that Variable Life Account B's assets exceed its liabilities.
The value of the assets of Variable Life Account B is determined whenever the
policy benefits vary and at the end of every Valuation Period.
Settlement Options
Conditions
All or part of the Proceeds of this Certificate may be applied under one or more
of the options described below. An election shall be made by Written Request
filed with the Home Office. The Payee of Proceeds may make this election if no
prior election has been made.
Our consent to the election of an option is required if:
[bullet] the Payee is not a natural person receiving payments in his or her own
right; or
[bullet] the Payee is an assignee of this Certificate.
Whenany option is chosen, the Payee must designate whether the annuity will be:
(a) a fixed annuity
(b) a variable annuity, or
(c) a combination of (a) and (b).
If a fixed annuity is chosen, the annuity purchase rate for the option chosen
will reflect at least the minimum guaranteed interest rate of 3.0%.
Where a variable annuity is chosen, the Payee must elect an assumed annual net
return rate of 3.5% or 5.0%. If not elected, We will use an assumed annual net
return rate of 3.5%. The assumed annual net return rate is the interest rate
used to determine the amount of the first annuity payment under a variable
annuity.
70182-1998US 16
<PAGE>
If payments on a variable basis are not to decrease, We must earn a gross return
on the assets of Variable Annuity Account B of:
1. 4.75% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 3.5% is chosen;
or
2. 6.25% on an annual basis, plus an annual return of up to .25% needed to
offset the administrative charge set at the time the settlement option
payments started, if an assumed annual net return rate of 5% is chosen.
Payments will not change due to changes in the mortality or expense results or
administrative charges.
Separate Account
Payments on a variable basis will be made from the Proceeds held in Variable
Annuity Account B. Variable Annuity Account B is a Separate Account established
by Us in accordance with the laws of the State of Connecticut and the State of
New York. Income, realized and unrealized gains and losses from the assets of
Variable Annuity Account B will be credited to or charged against Variable
Annuity Account B without regard to Our other income, gains, or losses. Variable
Annuity Account B's liabilities arise from the variable portion of annuity
contracts and life insurance settlement options that it supports. The assets of
Variable Annuity Account B are available to cover the liabilities of the General
Account only to the extent that Variable Annuity Account B's assets exceed its
liabilities.
Fund(s) Settlement Option Units of Variable Annuity Account B
If payment on a variable basis is chosen, the first payment is calculated as
follows:
1. the portion of Proceeds applied to make payment on the variable basis;
divided by
2. 1,000; multiplied by
3. the payment rate for the option chosen.
This amount is divided by the Fund settlement option unit value on the tenth
Valuation Period before the due date of the first payment to determine the
number of Fund settlement option units. The number of Fund settlement option
units remains fixed unless a Fund transfer occurs. Each future payment is equal
to this number multiplied by the Fund settlement option unit value on the tenth
Valuation Period prior to the due date of the payment.
Fund(s) Settlement Option Unit Value of Variable Annuity Account B For any
Valuation Period the Fund settlement option unit value is equal to:
1. the value for the previous period; multiplied by
2. the net return factor(s) for the Period; multiplied by
3. a factor to reflect the assumed annual net return rate. The daily factor
for 3.5% per year is .9999058 or, for 5% per year, .9998663.
The dollar value of the Fund settlement option unit values and payments may
increase or decrease due to investment gain or loss.
70182-1998US 17
<PAGE>
Net Return Factor(s):
The net return factor(s) are used to compute Variable Annuity Account B values
and payments for any of its Funds.
The net return factor for each Fund is equal to 1.0000000 plus the net return
rate.
The net return rate is equal to:
1. the value of the shares of the Fund held by Variable Annuity Account B at
the end of a Valuation Period; less
2. the value of the shares of the Fund at the start of the Valuation Period;
adjusted by any taxes (or provisions for taxes) on Variable Annuity Account
B; divided by
3. the total value of the Fund settlement option units and other Fund
accumulation units of Variable Annuity Account B at the start of the
Valuation Period; less
4. a daily actuarial charge at an annual rate of 1.25% for annuity mortality
and expense risks and profit; and a daily administrative charge which will
not exceed .25% on an annual basis.
A net return rate may be more or less than 0.
The value of a share of the Fund is equal to the net assets of the Fund divided
by the number of shares outstanding.
If a variable annuity is chosen, the Payee must allocate the amount among the
allowable Funds. We reserve the right to allow no more than four funds to be
selected at any one time.
Fund Transfers During the Annuity Period:
At the request of the Payee, all or any portion of the amount allocated to a
Fund may be transferred from any Fund to any other allowable Fund. During the
annuity period, the maximum number of allowable transfers in a calendar year is
four. We reserve the right to change the number of allowable transfers.
Transfer requests must be expressed as a percentage of the allocation among the
Funds of the amount upon which the variable annuity will be based. We may
establish a minimum transfer amount. Transfers will be processed as of the
Valuation Date next following when a transfer request is received in good order
at Our Home Office.
70182-1998US 18
<PAGE>
Annuity Options:
Option 1 -- Payments for a Stated Period of Time -- An annuity will be paid for
5 to 30 years. If payments for this option are made under a variable annuity,
the present value of all or a portion of any remaining guaranteed payments may
be withdrawn at any time.
OPTION 1
Payments for a Stated Period of Time
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- ------------------------------------------------------------------------------
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
- ------------------------------------------------------------------------------
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ------------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- ------------------------------------------------------------------------------
5 18.12 18 6.20
6 15.35 19 5.97
7 13.38 20 5.75
8 11.90 21 5.56
9 10.75 22 5.39
10 9.83 23 5.24
11 9.09 24 5.09
12 8.46 25 4.96
13 7.94 26 4.84
14 7.49 27 4.73
15 7.10 28 4.63
16 6.76 29 4.53
17 6.47 30 4.45
- ------------------------------------------------------------------------------
70182-1998US 19
<PAGE>
OPTION 1
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- -------------------------------------------------------------------------
Monthly Monthly
Years Payment Years Payment
- -------------------------------------------------------------------------
5 18.74 18 6.94
6 15.99 19 6.71
7 14.02 20 6.51
8 12.56 21 6.33
9 11.42 22 6.17
10 10.51 23 6.02
11 9.77 24 5.88
12 9.16 25 5.76
13 8.64 26 5.65
14 8.20 27 5.54
15 7.82 28 5.45
16 7.49 29 5.36
17 7.20 30 5.28
- -------------------------------------------------------------------------
Option 2 -- Life Income based on the life of the Payee -- Payments will be made
until the death of the Annuitant. When this option is chosen, a choice from the
following must be made:
(a) payments cease at the death of the Annuitant;
(b) payments may be guaranteed for 5-30 years; or
(c) Cash Refund: If the Annuitant dies, the Beneficiary will receive a lump
sum payment equal to the amount applied to the annuity option (less any
premium tax) allocated to the fixed annuity option less the total amount
of fixed annuity payments paid prior to such death. This cash refund
feature is only available on a fixed basis.
70182-1998US 20
<PAGE>
OPTION 2
Life Income
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------
Adjusted Age Cash
of Annuitant None 5 10 15 20 Refund
- --------------------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89
51 4.12 4.11 4.09 4.05 3.99 3.94
52 4.19 4.19 4.16 4.11 4.04 4.00
53 4.27 4.26 4.23 4.18 4.10 4.06
54 4.35 4.34 4.31 4.25 4.16 4.12
55 4.44 4.42 4.39 4.32 4.22 4.19
56 4.53 4.51 4.47 4.40 4.29 4.26
57 4.62 4.61 4.56 4.48 4.35 4.33
58 4.72 4.71 4.65 4.56 4.42 4.41
59 4.83 4.81 4.75 4.64 4.49 4.49
60 4.95 4.93 4.86 4.73 4.55 4.57
61 5.07 5.05 4.97 4.83 4.62 4.66
62 5.20 5.17 5.08 4.92 4.69 4.76
63 5.34 5.31 5.20 5.02 4.76 4.85
64 5.49 5.45 5.33 5.12 4.83 4.96
65 5.65 5.61 5.47 5.22 4.89 5.06
66 5.82 5.77 5.61 5.33 4.96 5.18
67 6.01 5.94 5.75 5.44 5.02 5.30
68 6.20 6.13 5.91 5.54 5.08 5.42
69 6.41 6.33 6.07 5.65 5.14 5.56
70 6.64 6.54 6.23 5.76 5.19 5.70
71 6.88 6.76 6.41 5.86 5.24 5.84
72 7.14 7.00 6.59 5.97 5.28 6.00
73 7.43 7.26 6.77 6.06 5.32 6.16
74 7.73 7.53 6.96 6.16 5.35 6.33
75 8.06 7.82 7.14 6.25 5.38 6.51
- -----------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70182-1998US 21
<PAGE>
OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Years
- ------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- ------------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
- ------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70182-1998US 22
<PAGE>
OPTION 2
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Years
- --------------------------------------------------------------------------
Adjusted
Age of None 5 10 15 20
Annuitant
- --------------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 5.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
- --------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70182-1998US 23
<PAGE>
Option 3 -- Life Income based upon the lives of two Payees -- An annuity will be
paid during the lives of the Annuitant and a second Annuitant. Payments will
continue until both Annuitants have died. When this option is chosen, a choice
of the following must be made:
(a) 100% of the payment to continue after the first death;
(b) 66-2/3% of the payment to continue after the first death;
(c) 50% of the payment to continue after the first death;
(d) 100% of the payment to continue after the first death with a guarantee
of 5-30 years:
(e) 100% of the payment to continue at the death of the second annuitant
and 50% of the payment to continue at the death of the Annuitant; or
(f) 100% of the payment to continue after the first death with a cash
refund feature. If the Annuitant and joint Annuitant die, the
Beneficiary will receive a lump sum payment equal to the amount
applied to the annuity option (less any premium tax) less the total
amount of fixed annuity payments paid prior to such death. This cash
refund feature is only available on a fixed basis.
OPTION 3
Life Income for Two Payees
Amount of Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option Option
Annuitant 3a 3b 3c Guaranteed 3e 3f
- --------------------------------------------------------------------------------
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69
55 55 3.88 4.25 4.47 3.87 4.14 3.87
55 60 3.99 4.44 4.71 3.98 4.20 3.98
60 55 3.99 4.44 4.71 3.98 4.42 3.98
60 60 4.24 4.71 4.99 4.23 4.57 4.23
60 65 4.38 4.97 5.32 4.38 4.65 4.38
65 60 4.38 4.97 5.32 4.38 4.93 4.38
65 65 4.72 5.33 5.70 4.71 5.14 4.72
65 70 4.93 5.68 6.15 4.91 5.27 4.91
70 65 4.93 5.68 6.15 4.91 5.66 4.91
70 70 5.40 6.21 6.70 5.36 5.96 5.38
70 75 5.69 6.68 7.32 5.62 6.13 5.66
75 70 5.69 6.68 7.32 5.62 6.67 5.66
75 75 6.37 7.45 8.15 6.23 7.12 6.33
75 80 6.78 8.11 8.99 6.54 7.36 6.71
- --------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70182-1998US 24
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- -------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option
Annuitant 3a 3b 3c Guaranteed 3e
- -------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
- -------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
70182-1998US 25
<PAGE>
OPTION 3
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- -------------------------------------------------------------------------
Adjusted Ages
- ---------------------- Option 3d
Annuitant Second Option Option Option 10 Years Option
Annuitant 3a 3b 3c Guaranteed 3e
- -------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
- -------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
Option 4 -- Payment of interest on Proceeds left with Us -- Proceeds held under
this option may be left with Us after the Death of the Payee only with Our
consent. By Written Request, the Payee may later elect to:
[bullet] receive all or a portion of the amount held under this option; or
[bullet] apply all or a portion of this amount to Options 1, 2 or 3 as described
above.
Other Options -- We may make other options available as allowed by the laws of
the state in which this Certificate is delivered.
70182-1998US 26
<PAGE>
Other Terms of Annuity Options:
(a) Payments will be made on a monthly basis unless the Payee requests
otherwise.
(b) No choice of any annuity option may be made if the first payment would
be less than $50 or if the total payments in a year would be less than
$250 (unless otherwise required by state law).
(c) For purposes of calculating the guaranteed first payment of a variable
annuity or the payments for a fixed annuity, the Annuitant's and
second Annuitant's adjusted age will be used.
The Payee's and second Payee's adjusted age is his or her age as of
the birthday closest to the annuity commencement date reduced by one
year for annuity commencement dates occurring during the period of
time from July 1, 1992 through December 31, 1999. The Annuitant's and
second Annuitant's age will be reduced by two years for annuity
commencement dates occurring during the period of time from January
1, 2000 through December 31, 2009. The Annuitant's and second
Annuitant's age will be reduced by one additional year for annuity
commencement dates occurring in each succeeding decade.
(d) If a fixed annuity under Option 1, 2 or 3 is elected, We will use the
applicable current settlement option rate if it will provide higher
fixed annuity payments.
(e) When annuity payments start, the age of the Annuitant plus the number
of years for which payments are guaranteed must not exceed 95.
Death Benefit:
Upon the death of the Annuitant(s), any remaining guaranteed payments will
continue to the Beneficiary unless the Beneficiary elects to receive the present
value of any remaining guaranteed payments in a lump sum. Such payments will be
paid at least as rapidly as under the method of distribution then in effect. If
the Beneficiary dies while receiving payments, the present value of any
remaining guaranteed payments will be paid in one sum to the beneficiary's
estate.
The interest rate used to determine the first annuity payment will be used to
calculate the present value. The present value will be determined as of the
Valuation Period in which proof of death acceptable to Us.
70182-1998US 27
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
[bullet] FLEXIBLE PREMIUMS PAYABLE UNTIL MATURITY DATE OR DEATH
[bullet] PROCEEDS PAYABLE UPON THE FIRST EVENT TO OCCUR - SURRENDER, MATURITY OR
DEATH
[bullet] NON-PARTICIPATING - NO DIVIDENDS PAYABLE
The amount or duration of the death benefit may be fixed or variable. The death
benefit is payable as described in the Death Benefit Options and Proceeds
sections of this Policy.
Values in each Fund held in a Separate Account may increase or decrease daily.
Such values are not guaranteed as to dollar amount. Refer to the Policy Values
section of this Policy for more information.
70182-1998US
EX-99.1.5(vii)
[Aetna Logo] TERM INSURANCE RIDER
This extra benefit Rider is attached to and made a part of this Policy. It
provides non-participating term insurance on the life of the Insured named in
the Policy Specifications.
If this Rider is added after the Date of Issue of this Policy, the effective
date of the Rider is the date of coverage change shown on the supplemental
Policy Specifications, which will be sent to You. This Rider may be added after
the Date of Issue of this Policy only with Our consent.
Definitions
Basic Policy Specified Amount
The Basic Policy Specified Amount is shown in the Policy Specifications or in
the Supplemental Policy Specifications if later changed.
Minimum Target Face Amount
The Target Face Amount cannot be decreased below this amount. The Minimum Target
Face Amount is shown in the Policy Specifications or in the Supplemental Policy
Specifications if later changed. Upon the effective date of this Rider, all
references in the Policy to Minimum Specified Amount are replaced by references
to Minimum Target Face Amount.
Target Face Amount
The Target Face Amount is shown in the Policy Specifications or in the
Supplemental Policy Specifications if later changed. Upon the effective date of
this Rider, all references in the Policy to Specified Amount are replaced by
references to Target Face Amount.
Benefit Amount
The Benefit Amount of this Rider is the Target Face Amount minus the Basic
Policy Specified Amount. However, if the Death Benefit of the Policy is defined
as a percentage of the Total Account Value, the Benefit Amount is zero.
The Benefit Amount of the Rider is included in the total Death Benefit paid as
described in the Death Benefit Options provision of this Policy. Subject to the
terms of this Policy, We will pay the Benefit Amount for this Rider upon receipt
at the Home Office of due proof of death of the Insured. The death of the
Insured must occur while this Rider is in force.
Renewal
While this Policy is in force, We will automatically renew this Rider annually
until the Maturity Date of this Policy or the Insured's date of death as
provided in the Coverage Beyond Maturity provision.
We will renew this Rider without evidence of insurability for another one year
term on the first day of the Policy Year.
Other Provisions
Age
If the Insured's age is misstated, the Benefit Amount will be adjusted to
reflect the death benefit that would have been purchased by the most recent
Monthly Rider Cost at the correct age.
70181-1988US Page 1
<PAGE>
Reinstatement
If this policy is reinstated, this Rider may also be reinstated if satisfactory
evidence of insurability on the Insured is provided to Us.
Monthly Rider Cost
The Monthly Rider Cost will be the Benefit Amount for this Rider multiplied by
the Monthly Rider Rate. This Policy's Monthly Deduction will be increased by the
Monthly Rider Cost.
Monthly Rider Rate
The Monthly Rider Rate is based on the Insured's issue age, sex, number of
Policy Years elapsed and premium class.
We may adjust the Monthly Rider Rate from time to time. Adjustments will be on a
class basis and will be based on Our estimates for future cost factors, such as
mortality, investment income, expenses, and length of time Riders stay in force.
Any adjustments will be made on a nondiscriminatory basis. The rate during any
Rider year may never exceed the rate shown for that year in the Table of
Guaranteed Maximum Insurance Rates for Primary Insured as shown in the Policy
Specifications. Those rates are based on the 1980 Commissioner's Standard
Ordinary Mortality Table B.
Suicide and Incontestability
Suicide
If the Insured dies by suicide, while sane or insane, within 2 years from the
Date of Issue of this Rider, We will refund all Rider premiums paid. This
Rider's Benefit Amount will not be paid.
If the Insured dies by suicide while sane or insane, more than 2 years from the
Date of Issue of this Rider but within 2 years from the Date of Issue of any
increase in coverage, We will pay the Benefit Amount for any coverage in effect
more than 2 years from the Date of Issue of this Rider.
All amounts will be calculated as of the date of death.
Incontestability
With respect to statements made in the initial application for the Insured:
[bullet] We will not contest this Rider after it has been in force during the
lifetime of the Insured for 2 years from its Date of Issue.
With respect to statements made in any Subsequent Applications:
[bullet] We will not contest coverage relating to Subsequent Applications after
coverage has been in force during the lifetime of the Insured for 2
years from the Date of Issue of such coverage.
Termination
This Rider will end on the first to occur of:
1. The Maturity Date of this Policy; or
2. the date this Policy ends; or
3. the date on which this Policy's Target Face Amount is decreased below the
minimum Target Face Amount required to allow attachment of this Rider; or
4. the next Monthly Deduction Day after We receive Your Written Request to
terminate this Rider.
70181-1988US Page 2
<PAGE>
This Rider is attached to and made a part of this Policy. It is signed for Aetna
on its Date of Issue.
Issued by Aetna Life Insurance and Annuity Company.
/s/ Kirk P. Wickman
Secretary
70181-1988US Page 3
EX-99.1.8(vi)
SIXTH AMENDMENT TO
PARTICIPATION AGREEMENT
THIS SIXTH AMENDMENT TO THE FUND PARTICIPATION AGREEMENT (the "Sixth
Amendment") is made and entered into as of the 20th day of January, 1998, by and
among AETNA LIFE INSURANCE AND ANNUITY COMPANY (the "Company") a Connecticut
corporation, on its own behalf and on behalf of each segregated asset account of
the Company (each an "Account") set forth on Schedule A of the Original
Agreement (defined below), and the VARIABLE INSURANCE PRODUCTS FUND II, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (the
"Underwriter"), a Massachusetts corporation.
WITNESSETH
WHEREAS, the Company, the Fund and the Underwriter are parties to a
Participation Agreement, dated February 1, 1994, as supplemented by Amendments
to the Participation Agreement dated as of December 15, 1994, February 1, 1995,
May 1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997 (the "Original
Agreement"); and
WHEREAS, the Company, the Fund and the Underwriter now desire to modify
the Original Agreement (i) to add additional Contracts funded by each Account.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and promises expressed herein, the parties agree as follows:
1. Schedule A of the Original Agreement is hereby deleted and replaced
with Schedule A effective as of the date first written above;
2. The Original Agreement, as supplemented by this Sixth Amendment, is
ratified and confirmed; and
3. This Sixth Amendment may be executed in two or more counterparts, which
together shall constitute one instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Sixth Amendment as of
the date first above written.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: /s/ Laurie M. Leblanc
-----------------------------
Name: Laurie M. Leblanc
-----------------------------
Title: Vice President
-----------------------------
VARIABLE INSURANCE PRODUCTS FUND II
By: /s/ Robert C. Pozen
-----------------------------
Name: Robert C. Pozen
-----------------------------
Title: Senior Vice President
-----------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: /s/ Kevin Kelly
-----------------------------
Name: Kevin Kelly
-----------------------------
Title: Vice President
-----------------------------
2
<PAGE>
SCHEDULE A
- --------------------------------------------------------------------------------
Policy Form Numbers of Contracts Issued
Name of Separate Account Through Separate Account
- --------------------------------------------------------------------------------
Variable Annuity Account B I-CDA-IC(IR/NY) I-CDA-HI(NQ)
I-CDA-IC(NQ/NY) G-CDA-ID(DC)
I-CDA-IC(IR/MP) G-CDA-GP1(4/94)
I-CDA-IC(NQ/MP) I-CDA-GP1(4/94)
G-CDA-IB(IR) A050SP96
G-CDA-IC(IR) G-MP1(5/97)
G-CDA-IC(NQ) MP1CERT(5/97)
G-CDA-IC(NQ/NY) I-MP1CERT(5/96)
GMCC-IC(NQ) I-MP1(5/96)
GMCC-IC(NQ/NY) G-CDA-96(NY)
GMCC-IC(IR/NY) GMCC-96(NY)
G-CDA-HF I-CDA-HD
I-CDA-IA
- --------------------------------------------------------------------------------
Variable Life Account B 70180-93US 70225-95
70182-93US 70267-97
70181-94US 70263-97
38899 70225-97
38899-90
38899-93
- --------------------------------------------------------------------------------
Variable Annuity Account C G-CDA-IB(XC/SM) G-TDA-HH(XC/M)
G-CDA-IA(RPM/XC) G-TDA-HH(XC/S)
G-CDA-IB(AORP) GLID-CDA-HO
G-CDA-IB(ATORP) GIT-CDA-HO
G-CDA-95(TORP) GLIT-CDA-HO
GTCC-95(TORP) IST-CDA-HO
G-CDA-95(ORP) IRA-CDA-IC
GTCC-95(ORP) IP-CDA-IB(WI)
G-CDA-96(TORP) IP-CDA-IB(MN)
G-CDA-96(ORP) IP-CDA-IB(WA)
GTCC-96(TORP) G-CDA-ID(DC)
GTCC-96(ORP) GIP-CDA-HB
G-401-IB(X/M) I-CDA-HD
G-CDA-HF I-CDA-HD(XC)
G-CDA-HD IA-CDA-IA
GTCC-HF IA-CDA-IA(RP)
G-CDA-IA(RP) G-CDA-IB(IR)
GST-CDA-HO A001RP95
GSD-CDA-HO A007RC95
GID-CDA-HO A020RV95
A027RV95
- --------------------------------------------------------------------------------
Separate Account D GF-PVA-IC(NY) GFA-PVA-IC
GF-PVA-IC(CA) F.6F-PVA-TR
GF-PVA-IC(NJ)
- --------------------------------------------------------------------------------
Any state variation of the above-referenced contracts are considered included on
this Schedule A. Date of Amendment: January 20, 1998
3
Simplified Application for Aetna [ ] Aetna Life Insurance and Annuity Company
Life Insurance [ ] Aetna Life Insurance Company
Part I 151 Farmington Avenue
Hartford, Connecticut 06156
Section 1 Employer Information
- -------------------------------------------------------------------------------
Company Name |Taxpayer Identification Number
|
- --------------------------------------------------------------------------------
Address (City, State, ZIP)
- --------------------------------------------------------------------------------
Plan Administration Contact
- --------------------------------------------------------------------------------
Owner Designation (Select One) |Beneficiary Designation (Select One)
- -------------------------------------------|-----------------------------------
[ ] Company [ ] Insured | [ ] Corporation (Name)
[ ] Other (e.g., Trustee. |
Specify relationship to |
insured) |
- ------------------------------------------- ------------------------------------
Owner Name | [ ] Individual
| (Name and Relationship)
|
- -------------------------------------------|------------------------------------
Address (City, State, ZIP) | [ ] Other (e.g.; Trustee, Executors
| or Administrators)
|
- --------------------------------------------------------------------------------
Policy Information |
- -------------------------------------------|------------------------------------
State of Delivery | Basic Plan
- -------------------------------------------|------------------------------------
- --------------------------------|----------------------- -----------------------
Death Benefit Option _______ | Riders: ____________ $______ or ________ %
| ____________ $______ or ________ %
| ____________ $______ or ________ %
| ____________ $______ or ________ %
- --------------------------------------------------------------------------------
Coverage Information: (Select one) | Amount of life insurance
[ ] See attached Census | presently in force or applied
[ ] Face Amount $_____________ | for:
[ ] Face Amount equals Salary Multiple? | (Aetna) $____________________
[ ] 1x [ ] 2x [ ]3x [ ] 4x [ ] 5x | (other companies) $__________
Other _____________________ |________________________________
| Will life insurance or annuity
| in any company be replaced or
Is this an increase to an existing policy? | changed if insurance applied
[ ] Yes [ ] No | for is issued?
[ ] Yes [ ] No
- --------------------------------------------------------------------------------
Section 2
- ---------------------------------------|-----------------------------|----------
Employee Name | Social Security Number | Sex
| |
- -----------------------------------------------------|--------------------------
Address (City, State, ZIP) | Date of Birth (Mo-Day-Yr)
|
- -----------------------------------|---------------------|----------------------
Occupation Title | Employee Number |Hire Date (Mo-Day-Yr)
| |
- --------------------------------------------------------------------------------
List Duties
- --------------------------------------------------------------------------------
Yes No
1. Have you been actively at work daily on a full-time basis [ ] [ ]
(35 hours/week) for the past 3 months? (Disregard vacation
days, normal non-working days and absences that total less
than 4 consecutive days.) If No, complete Part II.
- --------------------------------------------------------------------------------
2. Are you receiving or entitled to receive disability [ ] [ ]
benefits?
- --------------------------------------------------------------------------------
3. Have you used any tobacco products in the past 12 months? [ ] [ ]
If yes, specify:
- --------------------------------------------------------------------------------
<PAGE>
Section 3 (Must be completed by Owner)
- --------------------------------------------------------------------------------
Owner Taxpayer Identification Number
- ----------------------------------------------|---------------------------------
[ ] Individual Taxpayer Identification Number | [ ]Partnership [ ]Corporation
| [ ]Trustee [ ]Other
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ] | [ ][ ]-[ ][ ][ ][ ][ ][ ][ ]
- --------------------------------------------------------------------------------
Certification. --- Under penalties of perjury, I certify that:
(1) The number shown above is my correct Taxpayer Identification Number (or 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
(IRS) that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS notified me that I am no
longer subject to backup withholding (does not apply to real estate
transactions, mortgage interest paid, the acquisition or abandonment of
secured property, contributions to an Individual Retirement Arrangement
(IRA), and payments other than interest and dividends).
CERTIFICATION INSTRUCTIONS. --- You must cross out item (2) above 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 answers above are true and complete to the best of my knowledge and belief.
I agree that coverage can take effect only if the proposed insured is alive, and
all answers material to the risk are still true and complete when the policy is
delivered and the entire first premium is paid for. I agree that no agent may
alter the terms of the application or the policy. No agent may waive any of
Aetna's rights or requirements.
If this is a request to exercise an option in an existing policy, the request
will become effective in accordance with the terms of that option. If this is a
request for change, any and all values may be used to pay for the change and to
repay any loan indebtedness. The changed policy will be subject to any loan
indebtedness not repaid. Any assignment in effect at the time of this request
will apply to any new insurance issued.
Signature of (Proposed) Insured_______________________ Date__________________
Signature of Owner____________________________________ Date__________________
Signature of Agent____________________________________ Date__________________
Signed at (City and State)____________________________
70158-93
Simplified Supplemental [ ] Aetna Life Insurance and Annuity Company
Application for Aetna Life [ ] Aetna Life Insurance Company
Insurance Part II 151 Farmington Avenue
Hartford, Connecticut 06156
Section 1: Insured Information
- --------------------------------------------------------------------------------
Proposed Insured A
(First, Middle Initial, Last)
- -------------------------------|------------------------------------------------
Date of Birth (Mo-Day-Yr) | Social Security Number
/ / |
- --------------------------------------------------------------------------------
Sex | Current
| Height ft in Weight lbs
- -------------|------------------------------------------------------------------
Residence Address (No., Street) P.O. Box City, State, ZIP
- --------------------------------------------------------------------------------
Name of Beneficiary and Relationship:
(Complete only if Owner is other than Employer)
______________________________________________________
- --------------------------------------------------------------------------------
Proposed Insured B
(First, Middle Initial, Last)
Complete for Spouse, Other Insured Rider, Joint
Application Relationship to proposed Insured A
- -------------------------------|------------------------------------------------
Date of Birth (Mo-Day-Yr) | Social Security Number
/ / |
- --------------------------------------------------------------------------------
Sex | Current
| Height ft in Weight lbs
- -------------|------------------------------------------------------------------
Residence Address (No., Street) P.O. Box City, State, ZIP
- --------------------------------------------------------------------------------
Name of Beneficiary and Relationship:
(Complete only if Owner is other than Employer)
______________________________________________________
- --------------------------------------------------------------------------------
If you answer NO to question 1, or YES to questions 3-7, Proposed Proposed
explain in the space provided. Insured Insured
A B
Yes No Yes No
1. Have you been actively at work daily on a full-time
basis (35 hours/week) for the past 3 months?
(Disregard vacation days, normal non-working days
absences that total less than 4 consecutive days.) [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
2. Are you receiving or entitled to receive disability
benefits? [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
3. Have you used any tobacco products in the past 12
months? If yes, specify: [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
Section 2: Medical & Related Information
- --------------------------------------------------------------------------------
4. Within the past 2 years, have you flown as a pilot or
crew member? If yes, submit Aviation Supplement. [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
5. Within the last five years have you used
hallucinogenic or narcotic drugs not prescribed by a
doctor? [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
6. Within the last 10 years, have you ever been
diagnosed or treated for: Acquired Immune Deficiency
Syndrome (AIDS), or AIDS-Related Complex (ARC)? [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
7. Other than the above, have you ever been diagnosed or
treated for:
a. cardiovascular disorder, stroke, high blood
pressure or lung disease? [ ] [ ] [ ] [ ]
b. diabetes, mental or nervous disorder, disease of
the brain or nervous system? [ ] [ ] [ ] [ ]
c. alcohol or drug abuse, disease of the intestines,
liver, kidneys, or pancreas? [ ] [ ] [ ] [ ]
d. cancer or tumor, disease of the lymph glands or
blood? [ ] [ ] [ ] [ ]
- --------------------------------------------------------------------------------
EXPLANATIONS:
- --------------------------------------------------------------------------------
Number, nature and severity of condition, frequency of attacks, treatments
received, medication, dates, name, address & phone number of medical attendants
and hospitals
- --------------------------------------------------------------------------------
Ques. |(Proposed) Insured A |Ques. |(Proposed) Insured A
| | |
- ----------------|-----------------------|----------------|----------------------
| | |
- ----------------|-----------------------|----------------|----------------------
| | |
- ----------------|-----------------------|----------------|----------------------
| | |
- ----------------|-----------------------|----------------|----------------------
<PAGE>
- --------------------------------------------------------------------------------
Name & Address of physician last seen | Name & Address of physician last seen
- ------------------------------------- -------------------------------------
Date last seen | Date last seen
|
- --------------------------------------------------------------------------------
Name & Address of primary care | Name & Address of primary care
physician | physician
|
- --------------------------------------------------------------------------------
Date and reason last consulted | Date and reason last consulted
|
- --------------------------------------------------------------------------------
The signatures below represent the following:
The answers above are true and complete to the best of my knowledge and belief.
I agree that coverage can take effect only if the proposed insured is alive, and
all answers material to the risk are still true and complete when the policy is
delivered and the entire first premium is paid for. I agree that no agent may
alter the terms of the application or the policy. No agent may waive any of
Aetna's rights or requirements.
If this is a request to exercise an option in an existing policy, the request
will become effective in accordance with the terms of that option. If this is a
request for change, any and all values may be used to pay for the change and to
repay any loan indebtedness. The changed policy will be subject to any loan
indebtedness not repaid. Any assignment in effect at the time of this request
will apply to any new insurance issued.
- --------------------------------------------------------------------------------
AUTHORIZATION TO RELEASE INFORMATION
TO: any licensed physician, medical practitioner, hospital, clinic or medically
related facility, insurance company, consumer reporting agency, MIB, Inc. and
the insurance agent through whom application is being made.
On behalf of myself and any of my minor children proposed for insurance in the
application, I authorize you to release to Aetna, or its representatives, for
purposes of determining eligibility for life or health insurance coverage or
claims for benefits:
any information or records concerning the mental and physical history, condition
and treatment, general character, habits, reputation, mode of living,
occupation, income, financial status, aviation activities and hazardous hobbies
of any person to be insured.
This authorization is valid until 2 years after the effective date of any policy
issued in connection with this authorization.
In addition, I authorize Aetna to obtain an investigative consumer report and
information from MIB, Inc. These reports usually include an interview with the
person to be insured. I understand that I am entitled to be interviewed by any
consumer reporting agency which may be asked to prepare such a report, as long
as I can reasonably be contacted during normal business hours.
[ ](Check if interview requested) Business hours telephone ___________________
I have received Aetna's Underwriting Notice, which includes the MIB, Inc., and
Fair Credit Reporting Act Notices. I understand that information pertaining to
me will not be disclosed without my authorization except as described under
"Disclosure of Information to Others" in the accompanying Underwriting Notice,
or as otherwise permitted or required by law.
I understand that the information released under this authorization will be used
for purposes of determining eligibility for life or health coverage or claims
for benefits, and I authorize Aetna to redisclose the information for those
purposes to MIB, Inc., to any reinsurer, and to other life insurance companies
with whom I have or may apply for coverage or to whom a claim for benefits may
be submitted.
A photocopy of this authorization shall be as valid as the original. I
understand that upon request I may receive a copy of this authorization.
Signed at (City & State) ________________________ on (Date)____________________
Signature(s) of:_________________________________ ____________________________
(Proposed Insured A) (Proposed Insured B)
- --------------------------------------------------------------------------------
70159-93
Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156
Supplement to Application for
Variable Life Insurance
Supplement to Application - INDIVIDUAL OWNER
1. Proposed Insured __________________________________________________________
First Middle Last
2. Premium Payment Allocation (Indicate Whole Percentages. Percentages must
equal 100%.)
[Global International
____% Fidelity VIP Overseas Portfolio
____% Janus Aspen Worldwide Growth Portfolio
____% Oppenheimer Global Securities Fund
____% PPI Scudder International Growth Portfolio
Aggressive Growth
____% Janus Aspen Aggressive Growth Portfolio
____% PPI MFS Emerging Equities Portfolio
Growth
____% Fidelity VIP Growth Portfolio
____% Fidelity VIP II Contrafund Portfolio
____% Janus Aspen Growth Portfolio
____% PPI MFS Value Equity Portfolio
____% PPI T. Rowe Price Growth Equity Portfolio
Growth & Income (Stocks)
____% Aetna Variable Fund
____% Aetna Variable Index Plus Portfolio
____% Fidelity VIP Equity-Income Portfolio
Growth & Income (Stocks & Bonds)
____% Aetna Investment Advisers Fund
____% Janus Aspen Balanced Portfolio
Income
____% Aetna Income Shares
____% Oppenheimber Strategic Bond Fund
Stability of Principal
____% Aetna Variable Encore Fund
____% Aetna Fixed Account
Asset Allocation
____% Fidelity VIP II Asset Manager Portfolio]
Owner's Suitability
The rules of the National Association of Securities Dealers, Inc. require that
the Sales Representative have reasonable grounds to believe that the sale is
suitable for the Owner, based on information provided by the Owner as shown on
this form and on information known by the Sales Representative.
3. Owner's Taxpayer Identification Number:
[ ] Individual [ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
4. Age: __________________________________________
5. Citizenship: __________________________________________
6. Marital Status: __________________________________________
7. Number of Dependents: __________________________________________
8. Occupation: __________________________________________
9. Employers' Name(s) & Address: __________________________________________
- --------------------------------------------------------------------------------
<PAGE>
10. Investment Objectives (check all applicable objectives)
[ ] Capital Preservation
[ ] Tax Advantage/Deferral
[ ] Current Income
[ ] Growth and Income
[ ] Growth
[ ] Aggressive Growth
[ ] Other (please specify) __________________
11. Insurance Objectives (Check all applicable objectives)
[ ] Estate Creation
[ ] Estate Conservation
[ ] Other (please specify)________________________________________________
12. Investment Knowledge: [ ] Limited [ ] Good [ ] Extensive
13. Risk Tolerance: [ ] None [ ] Low [ ] Medium [ ] High
14. Is the coverage in accord with the Owner's insurance objectives and
anticipated financial needs? [ ] Yes [ ] No
15. Total Income of Owner's Immediate Family
[ ] $ 250,000+
[ ] $100,000 - $249,999
[ ] $ 50,000 - $ 99,999
[ ] $ 25,000 - $ 49,999
[ ] Under $25,000
16. Estimated Net Worth of Owner's Immediate Family
[ ] $1,000,000+
[ ] $ 500,000 - $1,000,000
[ ] $ 250,000 - $ 500,000
[ ] $ 100,000 - $ 250,000
[ ] Under $100,000
17. Federal Tax Bracket: [ ] 15% [ ] 28%
[ ] Other (please specify) ___________________________
18. Is the Owner associated with a National Association of Securities
Dealers, Inc. firm? [ ] Yes [ ] No
19. If jointly, or business, owned, please provide the name(s) and signature(s)
of the person(s) authorized to exercise ownership rights:__________________
___________________________________________________________________________
<PAGE>
I understand that:
THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY UNDER SPECIFIED
CONDITIONS.
VALUES NOT IN THE FIXED ACCOUNT MAY INCREASE OR DECREASE IN ACCORDANCE WITH
THE EXPERIENCE OF THE SEPARATE ACCOUNT.
THE AMOUNT OF THE MATURITY BENEFIT IS NOT GUARANTEED BUT IS DEPENDENT UPON
THE THEN SURRENDER VALUE.
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, ACCOUNT VALUES, AND
SURRENDER VALUES ARE AVAILABLE UPON REQUEST.
I hereby acknowledge receipt of the Prospectus dated _________________ for all
applicable prospectus(es) pertaining to the Separate Account and all of the
variable options.
Signed at __________________________ on _________________
(City, State) (Mo/Day/Yr)
By_________________________________ By_____________________________________
Signature of Owner Signature of Owner
Based on information obtained from the Owner, I believe the investment is
suitable for the Owner's objectives.
______________________________________________ on _______________________
Signature of Registered Representative (Mo/Day/Yr)
70276-97 (3/98)
Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156
Supplement to Application for
Variable Life Insurance
Supplement to Application - BUSINESS OWNER
1. See attached census for listing of proposed Insureds.
2. Premium Payment Allocation (Indicate Whole Percentages. Percentages must
equal 100%.)
[Global/International Growth
____% Fidelity VIP Overseas Portfolio
____% Janus Aspen Worldwide Growth Portfolio
____% Oppenheimer Global Securities Fund
____% PPI Scudder International Growth Portfolio
Aggressive Growth
____% Janus Aspen Aggressive Growth Portfolio
____% PPI MFS Emerging Equities Portfolio
Growth
____% Fidelity VIP II Contrafund Portfolio
____% Fidelity VIP Growth Portfolio
____% Janus Aspen Growth Portfolio
____% PPI Value Equity Portfolio
____% PPI T. Rowe Price Growth Equity Portfolio
Growth & Income (Stocks)
____% Aetna Variable Fund
____% Aetna Variable Index Plus Portfolio
____% Fidelity VIP Equity-Income Portfolio
Growth & Income (Stocks & Bonds)
____% Aetna Investment Advisers Fund
____% Janus Aspen Balanced Portfolio
Income
____% Aetna Income Shares
____% Oppenheimer Strategic Bond Fund
Stability of Principal
____% Aetna Variable Encore Fund
____% Aetna Fixed Account
Asset Allocation
____% Fidelity VIP II Asset Manager Portfolio]
Owner's Suitability
The rules of the National Association of Securities Dealers, Inc. require that
the Sales Representative have reasonable grounds to believe that the sale is
suitable for the Owner, based on information provided by the Owner as shown on
this form and on information known by the Sales Representative.
3. Owner's Taxpayer Identification Number: [ ][ ]-[ ][ ][ ][ ][ ][ ][ ]
Type of Entity:
[ ] Corporation [ ] S-Corporation [ ] Non-Profit Organization
[ ] General Partnership [ ] Limited Partnership [ ] Sole Proprietorship
[ ] Other
4. Type of Business: _________________________________________
5. Approximate annual income
(All Sources)
[ ] Under $1,000,000 [ ] $1,000,001 to $10,000,000
[ ] $10,000,001 to $50,000,000 [ ] Over $50,000,000
6. Total Assets:
[ ] Under $1,000,000 [ ] $1,000,001 to $10,000,000
[ ] $10,000,001 to $50,000,000 [ ] Over $50,000,000
7. Investment Objectives (check all applicable objectives)
[ ] Capital Preservation
[ ] Tax Advantage/Deferral
[ ] Current Income
[ ] Growth and Income
[ ] Growth
[ ] Aggressive Growth
[ ] Other (please specify) _______________________
8. Please provide a brief description of your insurance objective in obtaining
this coverage:_____________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
<PAGE>
9. Is the Owner associated with a National Association of
Securities Dealers, Inc. firm? [ ] Yes [ ] No
10. Have the proper corporate resolutions been adopted authorizing the
acquisition of this coverage and exercise of rights thereunder:
[ ] Yes [ ] No
Aetna reserves the right to require you to provide a copy of such
resolutions.
11. Please identify and provide the name(s) and signatures of the officer(s),
partner(s), or individual(s) authorized to exercise ownership rights:
----------------------------------------------------------------------------
Print Name Title Signature
----------------------------------------------------------------------------
Print Name Title Signature
----------------------------------------------------------------------------
Print Name Title Signature
I understand that:
THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY UNDER SPECIFIED
CONDITIONS.
VALUES NOT IN THE FIXED ACCOUNT MAY INCREASE OR DECREASE IN ACCORDANCE WITH
THE EXPERIENCE OF THE SEPARATE ACCOUNT.
THE AMOUNT OF THE MATURITY BENEFIT IS NOT GUARANTEED BUT IS DEPENDENT UPON
THE THEN SURRENDER VALUE.
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, ACCOUNT VALUES, AND
SURRENDER VALUES ARE AVAILABLE UPON REQUEST.
I hereby acknowledge receipt of the Prospectus dated _________________ for all
applicable prospectus(es) pertaining to the Separate Account and all of the
variable options.
Signed at __________________________ on _________________
(City, State) (Mo/Day/Yr)
By_________________________________ By______________________________________
Signature of Owner Signature of Owner
Based on information obtained from the Owner, I believe the investment is
suitable for the Owner's objectives.
______________________________________________ on _______________________
Signature of Registered Representative (Mo/Day/Yr)
70277-97 (3/98)
Aetna Life Insurance and Annuity Company
Hartford, Connecticut 06156
Supplement to Application for
Flexible Premium Variable Life Insurance
1. Proposed Insured:
- --------------------------------------------------------------------------------
First Middle Last
2. Initial Specified Amount: $_________
3. Initial Premium: $_________
4. Planned Premium: $_________
5. Premium Payment Allocation (whole %)
_____ General (Fixed) Account
_____ Aetna Variable Fund
_____ Aetna Variable Encore Fund
_____ Aetna Income Shares
_____ Aetna Investment Advisers
_____ TCI Growth Fund
Scudder Variable Life Investment Fund -
_____ International Portfolio
Neuberger & Berman Advisers
_____ Management Trust Fund, Inc.
_____ Alger American Small Cap Fund
6. Billing Frequency: ___ Annual
___ Semi-Annual
___ Quarterly
___ Automatic Check Plan (Authorization)
___ Add to Existing ACP No. _________________
___ Other _________________________________
7. Death Benefit Option:
_____ Option 1
The policy value is included in the
Specified Amount.
_____ Option 2
The policy value is in addition to the
Specified Amount
____ Option 3
The policy value is included in the Specified Amount,
plus the accumulated premium.
Financial Data
National Association of Securities Dealers, Inc. (NASD) rules require that the
Sales Representative have reasonable grounds to believe that the sale is
suitable for the Policyowner, based on information provided by the Policyowner
as shown on this form and on information known by the Sales Representative.
Please complete Section A if the Policyowner is a Business Entity, and Section B
if the Policyowner is an Individual.
Type of Entity:
[ ] Corporation [ ] S-Corporation [ ] Non-Profit Organization
[ ] General Partnership [ ] Limited Partnership [ ] Sole Proprietorship
[ ] Individual (If Policyowner is an Individual, [ ] Other
please skip to Section B
Section A (Business Entity Policyowners Only)
8. Type of Business: __________________________________
9. Tax Identification Number: _________________________
10. Approximate annual income:
(All sources)
[ ] Under $1,000,000 [ ] $1,000,001 to $10,000,000
[ ] $10,000,001 to $50,000,000 [ ] Over $50,000,000
<PAGE>
11. Total Assets:
[ ] Under $1,000,000 [ ] $1,000,001 to $10,000,000
[ ] $10,000,001 to $50,000,000 [ ] Over $50,000,000
12. Investment Objectives: (If applicable, check more than one):
[ ] Income [ ] Long-Term Growth [ ] Conservation of Principal [ ] Other
13. Please provide a brief description of your insurance objective in
obtaining this policy: _____________________________________________________
____________________________________________________________________________
____________________________________________________________________________
14. Is the Policyowner associated with an NASD firm? (Yes/No): _________________
15. If the Policyowner is a Corporation, have the proper corporate
resolutions been adopted authorizing the acquisition of this policy and
exercise of rights thereunder? Yes _____ No ______
Aetna reserves the right to require you to provide a copy of such
resolutions.
16. Please identify and provide the name(s) and signature(s) of the officer(s),
partner(s), or individual(s) authorized to exercise rights under this
policy:_____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Section B (Individual Policyowners Only)
17. Social Security Number: __________________
18. Age: ______
19. Citizenship: _________________
20. Marital Status: ______________
21. Number of Dependents: _____
22. Occupation:_____________
23. Employer Name and Address: ________________________________________________
____________________________________________________________________________
24. Investment Objectives (if applicable, check more than one):
[ ] Retirement Income [ ] Long-Term Growth [ ] Conservation of Principal
[ ] Other
25. Estimated Net Worth of Immediate Family:
(All Sources) [ ] Under $100,000 [ ] $100,001 - $500,000 [ ] Over $500,000
26. Total Income of Immediate Family:
[ ] Under $100,000 [ ] $100,001 - $250,000 [ ] Over $250,000
27. Is the Policyowner associated with an NASD firm? (Yes/No): _________________
I understand that:
THE AMOUNT AND DURATION OF THE DEATH BENEFIT MAY VARY UNDER SPECIFIED
CONDITIONS.
POLICY VALUES NOT IN THE FIXED ACCOUNT MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE EXPERIENCE OF THE SEPARATE ACCOUNT.
THE AMOUNT OF BENEFIT PAYABLE ON THE MATURITY DATE IS NOT GUARANTEED BUT IS
DEPENDENT UPON THE THEN SURRENDER VALUE.
ILLUSTRATIONS OF BENEFITS, INCLUDING DEATH BENEFITS, POLICY VALUES, AND
SURRENDER VALUES ARE AVAILABLE UPON REQUEST.
<PAGE>
I hereby acknowledge receipt of the following prospectuses
dated _________________ for:
(1) Corporate VUL: Variable Life Account B (Flexible Premium Variable Life
Insurance); and
(2) Aetna Variable Fund, Aetna Income Shares, Aetna Variable Encore Fund,
Aetna Investment Advisers Fund, Inc., TCI Growth Fund, Inc., Scudder
Variable Life Investment Fund - International Portfolio, and Neuberger
& Berman Advisers Management Trust, and Alger American Small Cap Fund.
Signed at _____________________ on _________________ by ______________________
(City, State) (Mo/Day/Yr) Signature of Policyowner
X ______________________________________________
Signature of Registered Representative
70183-93
EX-99.1.10(vi)
[Aetna Retirement Services Logo]
Premium Allocation Supplement
Aetna Corporate Variable Universal Life
Allocations (whole %)
- --------------------------------------------------------------------------------
Global/International
______ % Fidelity VIP Fund - Overseas Portfolio (097)
______ % Janus Aspen Worldwide Growth Portfolio (085)
______ % Oppenheimer Global Securities Fund (504)
______ % PPI Scudder International Growth Portfolio(090)
Aggressive Growth
______ % Aetna Variable Small Company Portfolio (502)
______ % Janus Aspen Aggressive Growth Portfolio(083)
______ % Oppenheimer Capital Appreciation Fund (505)
______ % PPI MFS Emerging Equities Portfolio (094)
Growth
______ % Aetna Variable Cap. Appreciation Portfolio (501)
______ % Aetna Variable Growth Portfolio (500)
______ % Fidelity VIP II Contrafund Portfolio (096)
______ % Fidelity VIP Growth Portfolio (099)
______ % Janus Aspen Growth Portfolio (081)
______ % PPI MFS Value Equity Portfolio (510)
______ % PPI MFS Research Growth Portfolio (088)
______ % PPI T. Rowe Price Growth Equity (511)
Growth & Income (Stocks)
______ % Aetna Variable Fund (080)
______ % Aetna Variable Index Plus Portfolio (091)
______ % Fidelity VIP Equity-Income Portfolio (098)
Growth & Income (Stocks & Bonds)
______ % Aetna Investment Advisers Fund (084)
______ % Janus Aspen Balanced Portfolio (087)
______ % MFS Total Return Series (508)
______ % Oppenheimer Growth & Income Fund (506)
Income
______ % Aetna Income Shares (082)
______ % Fidelity VIP High Income Portfolio (512)
______ % Janus Aspen Ser. Flex. Income Portfolio (503)
______ % MFS World Governments Series (509)
______ % Oppenheimer Strategic Bond Fund (507)
Stability of Principal
______ % Aetna Var. Encore Fund (Money Market)(086)
______ % Aetna Fixed Account (001)
Asset Allocation
______ % Fidelity VIP II Asset Manager Portfolio (095)
- ------ %
100
- --------------------------------------------------------------------------------
Please set the Premium Allocation for future premiums paid and for any
future Fund Rebalancing transactions on Aetna policy number(s)
______________________ as specified above.
I understand that these elections will be in effect until I submit
another Premium Payment Allocation Supplement form superseding this one.
- -----------------------------------------------
Signature Date
- -----------------------------------------------
Company
APPFunds
