1933 Act
Rule 485(b)
April 26, 1996
VIA EDGAR
- ---------
Securities and Exchange Commission
460 Fifth Street, N.W.
Washington, D.C. 20549
RE: Phoenix Home Life Variable Universal Life Account
Phoenix Home Life Mutual Insurance Company
Post-Effective Amendment No. 13 to Form S-6
Registration No. 33-23251
To the Commission Staff:
Transmitted herewith is Post-Effective Amendment No. 13 to the
above-captioned registration statement, pursuant to Rule 485(b) under the
Securities Act of 1933, as amended (the "1933 Act").
Also being transmitted is an opinion of counsel representing that this
amendment does not contain disclosures which would render it ineligible to
become effective pursuant to paragraph (b) of Rule 485 under the 1933 Act.
This amendment is filed for the purposes of responding to staff comments on
Post-Effective Amendment No. 12; updating the financial statements; and
effecting certain other non-material modifications. Please note that no
Financial Data Schedules are filed as an EDGAR exhibit. This is in reliance upon
an April 16th letter from Lawrence A. Friend, Chief Accountant of the Division
of Investment Management, to George N. Gingold, Esq. stating that the staff
would raise no objection if such Schedules were not filed.
This amendment is to become effective on May 1, 1996 pursuant to paragraph
(b) of Rule 485.
Please call the undersigned at (860) 403-5788 if you have any questions
concerning this amendment.
Very truly yours,
/s/ Richard J. Wirth
Richard J. Wirth, Counsel
Phoenix Home Life
Mutual Insurance Company
<PAGE>
April 26, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Phoenix Home Life Variable Universal Life Account
Post-Effective Amendment No. 13
File No. 33-23251
Dear Sirs:
We hereby represent that Post-Effective Amendment No. 13 to the above
entity's Registration Statement under the above file number does not appear to
contain disclosures which would render it ineligible to become effective
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933, as
amended.
Very truly yours,
/s/ Richard J. Wirth
Richard J. Wirth, Counsel
Phoenix Home Life
Mutual Insurance Company
<PAGE>
As filed with the Securities and Exchange Commission on April 26, 1996
REGISTRATION NO. 33-23251
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
POST-EFFECTIVE AMENDMENT NO. 13
TO
FORM S-6
---------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8 B-2
---------------
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
(EXACT NAME OF TRUST)
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
(NAME OF DEPOSITOR)
---------------
ONE AMERICAN ROW
HARTFORD, CONNECTICUT 06115
(COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DONA D. YOUNG, ESQUIRE
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
ONE AMERICAN ROW
HARTFORD, CONNECTICUT 06115
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)
---------------
COPIES TO:
MICHAEL BERENSON, ESQ. RICHARD J. WIRTH, ESQ.
JORDEN BURT BERENSON & JOHNSON LLP COUNSEL
1025 THOMAS JEFFERSON ST. N.W. PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
SUITE 400 EAST ONE AMERICAN ROW
WASHINGTON, D.C. 20007-0805 HARTFORD, CONNECTICUT 06115
---------------
DECLARATION REQUIRED BY RULE 24F-2
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has chosen to register an indefinite amount of securities being offered. On
February 27, 1996, the Registrant filed its Rule 24f-2 Notice for the
Registrant's 1995 fiscal year.
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b);
[X] on May 1, 1996 pursuant to paragraph (b);
[ ] 60 days after filing pursuant to paragraph (a)(1); or
[ ] on pursuant to paragraph (a)(1) of Rule 485.
[ ] this Post-Effective Amendment designates a new effective date
for a previously filed post-effective amendment.
---------------
Registrant is relying on the exemptive relief provided by Rule 6e-3(T) under the
Investment Company Act of 1940 and elects to be governed by subparagraph
(b)(13)(i)(A) of that Rule.
===============================================================================
<PAGE>
<TABLE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
<CAPTION>
N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- ---------------------
<S> <C>
1 The VUL Account
2 Phoenix Home Life Mutual Insurance Company
3 Not Applicable
4 Sales of Policies
5 The VUL Account
6 The VUL Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 The Policy
11 Investments of the VUL Account
12 Investments of the VUL Account
13 Charges and Deductions; Investments of the VUL Account
14 Premium Payment; Allocation of Issue Premium; Right to Cancel Period
15 Allocation of Issue Premium; Transfer of Policy Value
16 Investments of the VUL Account
17 Surrenders
18 Allocation of Issue Premium; Transfer of Policy Value; Reinvestment and Redemption
19 Voting Rights; Reports
20 Not Applicable
21 Policy Loans
22 Not Applicable
23 Safekeeping of the VUL Account's Assets
24 Not Applicable
25 Phoenix Home Life Mutual Insurance Company
26 Charges and Other Deductions; Investments of the VUL Account
27 Phoenix Home Life Mutual Insurance Company
28 Phoenix Home Life Mutual Insurance Company; The Directors and Executive Officers of
Phoenix Home Life
29 Not Applicable
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Phoenix Home Life Mutual Insurance Company
36 Not Applicable
37 Not Applicable
38 Sales of Policies
39 Sales of Policies
40 Not Applicable
41 Sales of Policies
42 Not Applicable
43 Not Applicable
44 Determination of Sub-Account Values
45 Not Applicable
46 Determination of Sub-Account Values
47 Allocation of Issue Premium; Determination of Sub-Account Values
48 Not Applicable
49 Not Applicable
50 Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
N-8B-2 ITEM CAPTION IN PROSPECTUS
- ----------- ---------------------
<S> <C>
51 Phoenix Home Life Mutual Insurance Company; The Policy; Charges and Deductions
52 Investments of the VUL Account
53 Federal Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Not Applicable
</TABLE>
<PAGE>
THE WANGER ADVISORS TRUST
AND THE TWO
WANGER SUB-ACCOUNTS:
U.S. SMALL CAP AND INTERNATIONAL SMALL CAP,
MENTIONED HEREIN ARE NOT CURRENTLY AVAILABLE FOR
INVESTMENT. WE WILL NOTIFY POLICYHOLDERS
BY MAIL AS SOON AS THEY BECOME AVAILABLE.
P-1
<PAGE>
SINGLE LIFE POLICIES AND THE FEATURES AVAILABLE UNDER THESE POLICIES MAY NOT YET
BE AVAILABLE IN YOUR STATE. PLEASE CONTACT YOUR REGISTERED REPRESENTATIVE.
[VERSION A]
VARIABLE LIFE INSURANCE POLICY
ISSUED BY: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
101 MUNSON STREET
P.O. BOX 810
GREENFIELD, MASSACHUSETTS 01302-0810
TELEPHONE: (800) 892-4885
PROSPECTUS
MAY 1, 1996
This prospectus describes Flexible Premium Variable Life Insurance Policies
(the "Policies"), offered by Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life"). An applicant chooses the amount of Issue Premium desired
and it is then shown in the Policy. Generally, the minimum Issue Premium Phoenix
Home Life will accept is 1/6 of the Planned Annual Premium. Phoenix Home Life
may in some cases accept less than that amount. The amount and payment frequency
of planned premiums are as shown in the Policy. If too much is paid in premium
in the early Policy Years, the Policy could become a "modified endowment
contract."This would cause loans and other amounts received under the Policy
to be subject to tax and/or penalties. Currently, Phoenix Home Life notifies a
Policyowner when a Policy becomes a modified endowment contract.
Premium payments are allocated to one or more of the Sub-accounts of the
Phoenix Home Life Variable Universal Life Account (the "VUL Account") or to the
Guaranteed Interest Account ("GIA"), as specified in the applicant's application
for insurance. The VUL Account is divided into Sub-accounts, each of which
invests in a corresponding series of The Phoenix Edge Series Fund or Wanger
Advisors Trust (collectively, the "Funds"). For certain Policyowners, the Issue
Premium is first allocated to the Money Market Sub-account before being
allocated according to the instructions in the application.
There is no guaranteed minimum Policy Value except for that portion of
Policy Value invested in the GIA, which has a 4% minimum interest rate
guarantee. The Policy Value not invested in the GIA will vary to reflect the
investment experience of the Sub-accounts of the VUL Account to which premiums
have been allocated. A Policyowner bears the investment risk for all amounts so
allocated. The Policy will remain in effect so long as the Policy Value or Cash
Surrender Value is sufficient to pay certain monthly charges imposed in
connection with the Policy.
The death benefit under the Policy equals the Policy's face amount on the
date of the Insured's death or, if greater, the Policy Value on the date of
death increased by the applicable percentage set forth in the Policy. Other
death benefit options are also available.
A Policyowner may cancel the Policy within 10 days (or longer in some
states), after the Policyowner receives it or 10 days after Phoenix Home Life
mails or delivers a written notice of withdrawal right to the Policyowner, or
within 45 days of completing the application, whichever is latest.
It may not be advantageous to purchase a Policy as a replacement for your
current life insurance or to supplement an existing life insurance policy.
This prospectus is valid only if accompanied by or preceded by current
prospectuses for the Funds. This prospectus and the prospectuses for the Funds
should be read and retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
1
<PAGE>
TABLE OF CONTENTS
Page
- --------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICY ........................... 1
TABLE OF CONTENTS ........................................ 2
FINANCIAL HIGHLIGHTS ..................................... 3
SPECIAL TERMS ............................................ 5
SUMMARY .................................................. 6
PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT ............... 8
Phoenix Home Life Mutual Insurance Company ............... 8
The VUL Account ....................................... 8
The Guaranteed Interest Account ....................... 8
THE POLICY ............................................... 9
Introduction .......................................... 9
Eligible Purchasers ................................... 9
Premium Payment ....................................... 9
Allocation of Issue Premium ........................... 10
Right to Cancel Period ................................ 10
Temporary Insurance Coverage .......................... 10
Transfer of Policy Value .............................. 10
Determination of Sub-account Values ................... 11
Death Benefit ......................................... 11
Surrenders ............................................ 12
Policy Loans .......................................... 12
Lapse ................................................. 13
Payment of Premiums During Period of Disability ....... 14
Additional Insurance Options .......................... 14
Additional Rider Benefits ............................. 14
INVESTMENTS OF THE VUL ACCOUNT ........................... 15
Participating Mutual Funds ............................ 15
Investment Advisers to The Phoenix Edge Series Fund.... 16
Investment Advisers to The Wanger Advisors Trust....... 16
Reinvestment and Redemption ........................... 16
Substitution of Investments ........................... 16
Performance History ................................... 16
CHARGES AND DEDUCTIONS ................................... 18
Monthly Deduction ..................................... 18
Premium Taxes ......................................... 18
Federal Tax Charge..................................... 18
Mortality and Expense Risk Charge ..................... 18
Investment Management Charge .......................... 19
Other Charges ......................................... 19
GENERAL PROVISIONS ....................................... 20
Postponement of Payments .............................. 20
Payment by Check ...................................... 20
The Contract .......................................... 20
Suicide ............................................... 21
Incontestability ...................................... 21
Change of Owner or Beneficiary ........................ 21
Assignment ............................................ 21
Misstatement of Age or Sex ............................ 21
Surplus ............................................... 21
PAYMENT OF PROCEEDS ...................................... 21
Surrender and Death Benefit Proceeds................... 21
Payment Options ....................................... 21
FEDERAL TAX CONSIDERATIONS ............................... 22
Introduction .......................................... 22
Phoenix Home Life's Tax Status ........................ 22
Policy Benefits ....................................... 22
Business-Owned Policies................................ 23
Modified Endowment Contracts .......................... 23
Limitations on Unreasonable Mortality
and Expense Charges ................................ 24
Qualified Plans ....................................... 24
Diversification Standards ............................. 24
Change of Ownership or Insured or Assignment........... 24
Other Taxes ........................................... 24
VOTING RIGHTS ............................................ 24
The Funds ............................................. 24
Phoenix Home Life ..................................... 25
THE DIRECTORS AND EXECUTIVE OFFICERS
OF PHOENIX HOME LIFE .................................. 25
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS................... 26
SALES OF POLICIES ........................................ 26
STATE REGULATION ......................................... 26
REPORTS .................................................. 26
LEGAL PROCEEDINGS ........................................ 26
LEGAL MATTERS ............................................ 27
REGISTRATION STATEMENT ................................... 27
FINANCIAL STATEMENTS ..................................... 27
APPENDIX A ............................................... 69
APPENDIX B ............................................... 70
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
2
<PAGE>
FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FOLLOWING ARE THE UNAUDITED FINANCIAL HIGHLIGHTS FOR THE PERIODS INDICATED.
<TABLE>
MONEY MARKET SUB-ACCOUNT
------------------------------------------------------------------------------
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
------------------------- 6/20/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period. $1.263974 $1.226981 $1.202239 $1.171195 $1.115052 $1.038647 $1.000000
Unit value, end of period....... $1.325408 $1.263974 $1.226981 $1.202239 $1.171195 $1.115052 $1.038647
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 10,230 9,143 5,488 2,834 1,547 341 11
Joint Edge (000) 296 155 155 -- -- -- --
GROWTH SUB-ACCOUNT
----------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
------------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- ---------
Unit value, beginning of period $2.412541 $2.396670 $2.018313 $1.846577 $1.305400 $1.264680 $1.000000
Unit value, end of period...... $3.132626 $2.412541 $2.396670 $2.018313 $1.846577 $1.305400 $1.264680
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 36,539 23,650 13,483 5,452 1,514 217 42
Joint Edge (000) 1,113 533 37 -- -- -- --
MULTI-SECTOR SUB-ACCOUNT
(FORMERLY THE "BOND" SUB-ACCOUNT)
------------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- ---------
Unit value, beginning of period $1.527250 $1.628351 $1.416138 $1.297743 $1.094831 $1.048255 $1.000000
Unit value, end of period...... $1.871769 $1.527250 $1.628351 $1.416138 $1.297743 $1.094831 $1.048255
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 3,484 2,355 1,524 775 106 20 18
Joint Edge (000) 95 48 2 -- -- -- --
TOTAL RETURN SUB-ACCOUNT
----------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- ---------
Unit value, beginning of period $1.830914 $1.871886 $1.699829 $1.549846 $1.209456 $1.151223 $1.000000
Unit value, end of period...... $2.147078 $1.830914 $1.871886 $1.699829 $1.549846 $1.209456 $1.151223
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 9,236 6,582 4,089 2,219 647 89 19
Joint Edge (000) 195 93 12 -- -- -- --
</TABLE>
3
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
INTERNATIONAL SUB-ACCOUNT
-----------------------------------------------------------------
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 5/1/90 TO
1995 1994 1993 1992 1991 12/31/90
---- ---- ---- ---- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period $1.273020 $1.282423 $0.933826 $1.080888 $0.910823 $1.000000
Unit value, end of period...... $1.384037 $1.273020 $1.282423 $0.933826 $1.080888 $0.910823
========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 14,435 11,096 3,971 692 244 38
Joint Edge (000) 555 314 18 -- -- --
BALANCED SUB-ACCOUNT
------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 5/1/92 TO
1995 1994 1993 12/31/92
---- ---- ---- ---------
Unit value, beginning of period $1.129669 $1.171933 $1.087688 $1.000000
Unit value, end of period...... $1.382412 $1.129669 $1.171933 $1.087688
========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 9,522 7,513 5,339 1,772
Joint Edge (000) 401 338 18 --
</TABLE>
REAL ESTATE SECURITIES SUB-ACCOUNT
STRATEGIC THEME SUB-ACCOUNT
WANGER U.S. SMALL CAP SUB-ACCOUNT
WANGER INTERNATIONAL SMALL CAP SUB-ACCOUNT
THESE SUB-ACCOUNTS COMMENCED OPERATIONS AS OF THE DATE
OF THIS PROSPECTUS; ACCORDINGLY, FINANCIAL HIGHLIGHTS
FOR THESE SUB-ACCOUNTS ARE NOT YET AVAILABLE.
4
<PAGE>
SPECIAL TERMS
- -------------------------------------------------------------------------------
As used in this Prospectus, the following terms have the indicated meanings:
ATTAINED AGE: The age of the Insured on the birthday nearest the most recent
Policy Anniversary.
BENEFICIARY: The person or persons specified by the Policyowner as entitled to
receive the death benefits under a Policy.
CASH SURRENDER VALUE: The Policy Value less any surrender charge that would
apply on the date of surrender and less any Debt.
DEATH BENEFIT GUARANTEE: An additional benefit rider available with the Policy
that guarantees a death benefit equal to the initial face amount or the face
amount as later increased or decreased, provided that Minimum Required Premiums
are paid. See "Additional Rider Benefits."
DEBT: Outstanding loans against a Policy, plus accrued interest.
GENERAL ACCOUNT: The general asset account of Phoenix Home Life.
GUARANTEED INTEREST ACCOUNT (GIA): An allocation option under which amounts
deposited are guaranteed to earn a fixed rate of interest. Excess interest may
also be credited, in the sole discretion of Phoenix Home Life.
IN FORCE: Conditions under which the coverage under a Policy is in effect and
the Insured's life remains insured.
INSURED: The person upon whose life the Policy is issued.
IN WRITING (WRITTEN REQUEST): In a written form satisfactory to Phoenix Home
Life and delivered to Variable and Universal Life Administration.
ISSUE PREMIUM: The premium payment made in connection with the issue of the
Policy.
MINIMUM REQUIRED PREMIUM: The required premium as specified in the Policy. An
increase or decrease in the face amount of the policy will change the Minimum
Required Premium amount.
MONTHLY CALCULATION DAY: The first Monthly Calculation Day is the same day as
the Policy Date. Subsequent Monthly Calculation Days are the same day of each
month thereafter or, if such day does not fall within a given month, the last
day of that month will be the Monthly Calculation Day.
MULTIPLE LIFE POLICY: A Policy under which the number of Insureds is greater
than one (1) but no more than five (5), and under which the death benefit is
paid upon the death of the first insured to die.
PAYMENT DATE: The Valuation Date on which a premium payment or loan repayment is
received at Phoenix Home Life, unless it is received after the close of the New
York Stock Exchange, in which case it will be the next Valuation Date.
PHOENIX HOME LIFE: Phoenix Home Life Mutual Insurance Company, Hartford,
Connecticut.
PLANNED ANNUAL PREMIUM: The premium amount that the Policyowner agrees to pay
each Policy Year. It must be at least equal to the minimum premium required for
the face amount of insurance selected and must be no greater than the maximum
premium allowed for the face amount selected.
POLICY ANNIVERSARY: Each anniversary of the Policy Date.
POLICY DATE: The Policy Date as shown on the Schedule Page of the Policy. It is
the date from which Policy Years and Policy Anniversaries are measured.
POLICY MONTH: The period from one Monthly Calculation Day up to but not
including the next Monthly Calculation Day.
POLICYOWNER (OWNER): The owner of a Policy.
POLICY VALUE: The sum of a Policy's share in the values of each Sub-account of
the VUL Account plus the Policy's share in the values of the Guaranteed Interest
Account.
POLICY YEAR: The first Policy Year is the one-year period from the Policy Date
up to, but not including, the first Policy Anniversary. Each succeeding Policy
Year is the one-year period from the Policy anniversary up to but not including
the next Policy Anniversary.
PROPORTIONATE: Amounts allocated to Sub-accounts on a proportionate basis are
allocated by increasing (or decreasing) a Policy's share in the value of the
affected Sub-accounts so that such shares maintain the same ratio to each other
before and after the allocation.
SINGLE LIFE POLICY: A Policy that covers the life of one (1) Insured.
SUB-ACCOUNTS: Accounts within the VUL Account to which non-loaned assets under a
Policy are allocated.
UNIT: A standard of measurement used in determining the value of a Policy. The
value of a Unit for each Sub-account will reflect the investment performance of
that Sub-account and will vary in dollar amount.
VALUATION DATE: For any Sub-account, each date on which the net asset value of
the Fund is determined.
VALUATION PERIOD: For any Sub-account, the period in days from the end of one
Valuation Date through the next.
VARIABLE AND UNIVERSAL LIFE ADMINISTRATION: Variable and Universal Life
Administration Division of Phoenix Home Life Mutual Insurance Company.
VUL ACCOUNT: Phoenix Home Life Variable Universal Life Account.
5
<PAGE>
SUMMARY
- -------------------------------------------------------------------------------
1. WHAT IS THE DIFFERENCE BETWEEN THE POLICY AND A CONVENTIONAL
FIXED BENEFIT LIFE INSURANCE POLICY?
Like conventional fixed-benefit life insurance, so long as the Policy
remains In Force, the Policy will provide for: (1) the payment of a death
benefit to a Beneficiary upon the Insured's death; (2) the accumulation of cash
value; and (3) surrender rights and Policy loan privileges.
The Policy differs from conventional fixed-benefit life insurance by
allowing Policyowners to allocate premiums to one or more Sub-accounts of the
VUL Account or to the Guaranteed Interest Account. Each Sub-account invests
exclusively in a designated portfolio of the Fund. Also, under the Policy, the
Policy Value invested in the VUL Account is not guaranteed and may increase or
decrease depending upon the investment experience of the Sub-accounts of the VUL
Account. Accordingly, the Policyowner bears the investment risk of any
depreciation in value of the underlying assets but reaps the benefits of any
appreciation in value. See "Policy Value."
In addition, unlike conventional fixed benefit life insurance, a Policyowner
also has the flexibility to make additional premium payments and to thereby
adjust the Policy Value. However, unlike conventional fixed-benefit life
insurance, the Policy does not require a Policyowner to adhere to a fixed
premium payment schedule. Moreover, after the payment of the Issue Premium, the
failure to make additional premium payments will not in itself cause the Policy
to lapse. Conversely, the payment of additional premiums will not guarantee that
the Policy will remain In Force. Generally, lapse will occur when the Cash
Surrender Value is insufficient to pay certain charges deducted on the Monthly
Calculation Day, and a grace period expires without payment of the additional
amount required. See "Lapse."
If a Whole Life Exchange Option Rider is attached to the Policy, the
Policy may be exchanged for a fixed-benefit whole life policy. (See
"Additional Rider Benefits.")
2. IS THERE A GUARANTEED ACCOUNT OPTION?
Yes. A Policyowner may elect to have premium payments allocated to the
Guaranteed Interest Account. Amounts allocated to the GIA earn a fixed rate of
interest and Phoenix Home Life may also, in its sole discretion, credit excess
interest. (See Appendix A.)
3. WHAT IS THE DEATH BENEFIT UNDER THE POLICY?
The Policy provides for the payment of benefits upon the death of the
Insured. Upon application for a Policy, an applicant designates an Issue
Premium. The Policy indicates the face amount of insurance. The death benefit
will equal the face amount on the date of the Insured's death or, if greater,
the Policy Value on the date of the Insured's death increased by the applicable
percentage set forth in the Policy. If the increased death benefit option is
selected, the death benefit will equal the face amount on the date of the
Insured's death plus the Policy Value or, if greater, the Policy Value on the
date of the Insured's death increased by the applicable percentage set forth in
the Policy. Guaranteed death benefit and living benefits riders are also
available. See "Death Benefit."
4. HOW LONG WILL THE POLICY REMAIN IN FORCE?
The Policy will only lapse when the Cash Surrender Value is insufficient to
pay the monthly deduction (see "Charges and Deductions--Monthly Deductions"),
and a grace period expires without payment of the additional amount required. In
this respect, the Policy differs in two important respects from a conventional
life insurance Policy. First, the failure to pay additional premiums will not
automatically cause the Policy to lapse. Second, the payment of premiums of any
pre-specified amount does not guarantee that the Policy will remain In Force. A
rider is available to ensure that premium payments will continue during a period
of disability.
5. WHAT CHARGES ARE THERE IN CONNECTION WITH THE POLICY?
MONTHLY DEDUCTION: A deduction is made each Policy Month from the Policy
Value (excluding the value of the loaned portion of the Guaranteed Interest
Account) to pay the cost of insurance provided under the Policy; the cost of any
rider benefits provided; any unpaid balance of the Issue Expense Charge; and an
administrative charge as shown on the schedule page of the Policy. The
administrative charge may vary but in no event will it exceed $10 per month.
Currently, the administrative charge is $5.00 per month. The administrative
charge is set at a level designed to recover actual costs and is not designed to
result in any profit to Phoenix Home Life. See "Charges and Deductions."
OTHER CHARGES: A fee equal to the lesser of $25 or 2% of the partial
surrender amount paid is deducted from the Policy Value for each partial
surrender. A partial surrender charge equal to a pro-rata portion of the
applicable surrender charge that would apply to a full surrender, determined by
applying a formula, is also assessed against the VUL Account Sub-accounts or the
Guaranteed Interest Account when a partial surrender is made.
No charges are currently made from the VUL Account or the Guaranteed
Interest Account for federal or state income taxes. If Phoenix Home Life
determines that such taxes may be imposed, it may make deductions from the VUL
Account to pay these taxes.
Phoenix Home Life charges each Sub-account of the VUL Account the daily
equivalent of 0.80% for the first 15 years and then 0.25% on an annual basis of
the current value of the Sub-account's net assets for its assumption of certain
mortality and expense risks incurred in connection with Single Life Policies and
0.80% on an annual basis for Multiple Life Policies.
Premium amounts are also reduced by any applicable premium tax, a Federal
Tax Charge of 1.50% on Single Life Policies and, for payments made during a
grace period, by the amount needed to cover any monthly deductions made during
the grace period.
Investment advisory charges are imposed on an annual basis based on the
average daily net assets of the Series of the Fund as follows:
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PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $250,000,000 $250,000,000 $500,000,000
------ ------------ ------------ -------------
Money Market...... .40% .35% .30%
Multi-Sector.... .50% .45% .40%
Balanced.......... .55% .50% .45%
Total Return...... .60% .55% .50%
Growth............ .70% .65% .60%
International..... .75% .70% .65%
Strategic Theme... .75% .70% .65%
PHOENIX REALTY SECURITIES, INC.
-------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate....... .75% .70% .65%
WANGER ASSET MANAGEMENT, L.P.
-----------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $100,000,000 $150,000,000 $250,000,000
------ ------------ ------------ ------------
U.S. Small
Cap............... 1.00% .95% .90%
International 1.30% 1.20% 1.10%
Small Cap.........
In addition, each Series pays a portion or all of its other operating
expenses other than the management fees; the Growth, Multi-Sector, Total
Return, Money Market and Balanced Series will pay up to .15%; the Real Estate
and Strategic Theme Series will pay up to .25%; the International Series will
pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .50%; and the
Wanger International Small Cap Series will pay up to .60% of its average net
assets annually. See "Charges and Deductions."
6. IS THERE A RIGHT TO CANCEL PERIOD?
Yes. The Policyowner may cancel the Policy within 10 days after the
Policyowner receives it (or longer in some states), or 10 days after Phoenix
Home Life mails or delivers a written notice of withdrawal right to the
Policyowner, or within 45 days of completing the application, whichever is
latest.
7. HOW ARE PREMIUMS ALLOCATED?
If the applicant elects the Temporary Money Market Allocation Amendment in
the application, Phoenix Home Life will allocate the entire Issue Premium, less
applicable charges, to the Money Market Sub-account of the VUL Account. Phoenix
Home Life requires this election for all applicants in certain states and for
applicants in certain states who indicate on their application that they intend
the Policy to replace existing insurance. At the expiration of the Right to
Cancel Period for such Policyowners, the Policy Value will be allocated among
the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in
accordance with the Policyowner's allocation instructions in the application for
insurance. All other Policyowners will have their Issue Premium less applicable
charges allocated according to the instructions in the application on the date
it is received without first having the premium placed in the Money Market
Sub-account. The Policy Value may be allocated among the available Sub-accounts
of the VUL Account, each of which invests in shares of a designated portfolio of
the Funds, or to the Guaranteed Interest Account.
8. AFTER THE INITIAL ALLOCATION, MAY I CHANGE THE ALLOCATION OF
POLICY VALUE?
Yes. A Policyowner may transfer amounts among the Sub-accounts of the VUL
Account or the Guaranteed Interest Account. Only one transfer per Policy Year is
permitted from the unloaned portion of the Guaranteed Interest Account. The
amount of that transfer is limited to the higher of $1,000 or 25% of the value
of the Policy in the unloaned portion of the Guaranteed Interest Account. Also,
Phoenix Home Life reserves the right to require that transfers be made by
written request. Phoenix Home Life further reserves the right to permit
transfers of less than $500 only if the entire balance in the Sub-account of the
VUL Account or the Guaranteed Interest Account is transferred. A systematic
transfer program is also available. See "Transfer of Policy Value."
9. MAY THE POLICY BE SURRENDERED?
Yes. A Policyowner may totally surrender the Policy at any time and receive
the Cash Surrender Value. Subject to certain limitations, the Policyowner may
also partially surrender the Policy at any time prior to the Maturity Date. In
the future, Phoenix Home Life may set a minimum partial surrender amount, not to
exceed $500. See "Surrenders--Partial Surrenders." A partial surrender will
result in a decrease in the death benefit under the Policy. See "Death Benefit."
If the Policy is totally or partially surrendered during the first ten Policy
Years, a Surrender Charge will apply. See "Surrender Charge." In addition, there
may be certain tax consequences as the result of a surrender. For example, a
Policy may be a "modified endowment contract" if the amount of premium paid
during the first seven Policy Years is more than the amount that would have been
paid if the Policy had provided for paid-up benefits after the payment of seven
level annual premiums. Distributions such as loans and full or partial
surrenders under a modified endowment contract may be taxable income to the
extent they exceed the premiums paid. If such income is distributed before the
Policyowner attains age 59 1/2, a 10% penalty tax may be imposed. See "Federal
Tax Considerations."
10. WHAT IS THE POLICY'S LOAN PRIVILEGE?
A Policyowner may obtain Policy loans in an amount up to 90% of the result
of subtracting the remaining surrender charge from the Policy Value. The
interest rate on a loan is at an effective annual rate as stated in the Policy,
compounded daily and payable on each Policy Anniversary in arrears. The
requested loan amount is transferred from the VUL Account to the loaned portion
of the Guaranteed Interest Account and is credited with interest at an effective
annual rate as stated in the Policy. Phoenix Home Life reserves the right not to
allow loans of less than $200 unless the loans are to pay premiums on another
policy issued by Phoenix Home Life. See "The Policy--Policy Loans."
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The proceeds of Policy loans may be subject to Federal income tax
under certain circumstances. See "Federal Tax Considerations."
11. HOW ARE INSURANCE BENEFITS PAID?
Surrender and death benefits under the Policy may be paid in a lump sum or
under one of the payment options set forth in the Policy.
See "Payment Options."
PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT
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PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life") is a mutual
life insurance company originally chartered in Connecticut in 1851. Its
executive office is at One American Row, Hartford, Connecticut 06115 and its
main administrative office is at 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083-1900. Its New York principal office is at 99 Troy Road, East
Greenbush, New York 12061. Phoenix Home Life is the nation's 13th largest mutual
life insurance company and has admitted assets of approximately $13.2 billion.
Phoenix Home Life sells insurance policies and annuity contracts through its own
field force of full time agents and through brokers. Its operations are
conducted in all 50 states, the District of Columbia, Canada and Puerto Rico.
THE VUL ACCOUNT
The VUL Account is a separate account of Phoenix Home Life registered as a
unit investment trust under the Investment Company Act of 1940, as amended, and
it meets the definition of a "separate account" under that Act. Such
registration does not involve supervision of the management of the VUL Account
or Phoenix Home Life by the Securities and Exchange Commission.
The VUL Account currently has ten Sub-accounts available for allocation of
Policy Value. If in the future Phoenix Home Life determines that marketing needs
and investment conditions warrant, Phoenix Home Life may establish additional
Sub-accounts, which will be made available to existing Policyowners to the
extent and on a basis determined by Phoenix Home Life. Each Sub-account will
invest solely in shares of the Funds allocable to one of ten portfolios, each
having the specified investment objective set forth under "Investments of the
VUL Account--Participating Mutual Funds."
Phoenix Home Life does not guarantee the investment performance of the VUL
Account or any of its Sub-accounts. The Policy Value allocated to the VUL
Account depends on the investment performance of the Fund. Thus, the Policyowner
bears the full investment risk for all monies invested in the VUL Account.
The VUL Account may include in advertisements, sales literature and other
communications information about and Series or Adviser's current investment
strategies and management style. Current strategies and style may change to
allow any Series to respond quickly to changing market and economic conditions.
From time to time the VUL Account may include specific portfolio holdings or
industries in such communications. To illustrate components of overall
performance, the Funds may separate their cumulative and average annual returns
into income and capital gains components; or cite separately as a return figure
the equity or bond return figure to well-known indices of market performance,
including, but not limited to: the S&P 500 Index, Dow Jones Industrial Average,
First Boston High Yield Index and Salomon Brothers Corporate and Government Bond
Indices.
The VUL Account may from time to time include in advertisements containing
total return the ranking of those performance figures relative to such figures
for groups of Sub-accounts having similar investment objectives as categorized
by ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Funds may compare a Series performance results to other
investment or savings vehicles (such as certificates of deposit) and may refer
to results published in various publications such as Changing Times, Forbes,
Fortune, Money, Barrons, Business Week, Investor's Daily, The Stanger
Register, Stanger's Investment Adviser, The Wall Street Journal, The New York
Times, Consumer Reports, Registered Representative, Financial Planning,
Financial Services Weekly, Financial World, U.S. News and World Report,
Standard & Poor's, The Outlook, and Personal Investor. The Funds may from time
to time illustrate the benefits of tax deferral by comparing taxable investments
to investments made through tax-deferred retirement plans. The total return may
also be used to compare the performance of a Series against certain widely
acknowledged outside standards or indices for stock and bond market performance,
such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones
Industrial Average, Europe Australia Far East Index (EAFE), Consumer's Price
Index, Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P
500 is a commonly quoted market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 common stocks relative to the base
period 1940- 43. The S&P is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of a
few companies listed on the American Stock Exchange or traded over the counter
are included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P represents about 80%
of the market value of all issues traded on the New York Stock Exchange.
The VUL Account is administered and accounted for as part of the general
business of Phoenix Home Life, but the income, gains, or losses of the VUL
Account are credited to or charged against the assets held in the VUL Account,
without regard to other income, gains, or losses of any other business Phoenix
Home Life may conduct. Under New York law, the assets of the VUL Account are not
chargeable with liabilities arising out of any other business Phoenix Home Life
may conduct. Nevertheless all obligations arising under the Policy are general
corporate obligations of Phoenix Home Life.
THE GUARANTEED INTEREST ACCOUNT
The Guaranteed Interest Account is not part of the VUL Account. It is
accounted for as part of the General Account. Phoenix Home Life reserves the
right to limit cumulative deposits, including transfers, to the unloaned portion
of the Guaranteed Interest Account to no more than $250,000 during any one-week
period. Phoenix Home Life will credit interest daily on the amounts allocated
under the Policy to the Guaranteed Interest Account. The credited rate will be
uniform by class. The loaned portion of the Guaranteed Interest Account will be
credited interest at an effective annual fixed rate of 2% for Single Life
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Policies and 6% for Multiple Life Policies. Interest on the unloaned portion of
the Guaranteed Interest Account will be credited at an effective annual rate of
not less than 4%.
Bi-weekly, Phoenix Home Life sets the interest rate that will apply to any
net premium or transferred amounts deposited to the unloaned portion of the
Guaranteed Interest Account. That rate will remain in effect for such deposits
for an initial guarantee period of one full year from the date of deposit. Upon
expiration of the initial one-year guarantee period (and each subsequent
one-year guarantee period thereafter), the rate to be applied to any deposits
whose guarantee period has just ended shall be the same rate as is applied to
new deposits allocated to the Guaranteed Interest Account at the time that the
guarantee period expired. This rate will likewise remain in effect for a
guarantee period of one full year from the date the new rate is applied. For
more complete information concerning the Guaranteed Interest Account, see
Appendix A.
THE POLICY
- -------------------------------------------------------------------------------
INTRODUCTION
The Policy is a variable life insurance policy. The Policy has a death
benefit, Cash Surrender Value, and loan privilege such as is associated with a
traditional fixed benefit whole life policy. The Policy differs from a fixed
benefit whole life policy, however, because the Policyowner specifies into which
of several Sub-accounts of the VUL Account or the Guaranteed Interest Account
net premium is to be allocated. Each Sub-account of the VUL Account, in turn,
invests its assets exclusively in a portfolio of the Funds. The Policy Value
varies according to the investment performance of the Series to which Policy
Value has been allocated.
ELIGIBLE PURCHASERS
Any person up to the age of 75 is eligible to be insured under a newly
purchased Policy after providing acceptable evidence of insurability. A person
can purchase a Policy to insure the life of another person provided that the
Policyowner has an insurable interest in the life of the Insured, and the
Insured consents. A policy can also be purchased to cover from two to five lives
under one Policy, for any person up to the age of 80. Under such a Multiple Life
Policy, the death benefit is paid upon the first death under the Policy; the
Policy then terminates. Such a Policy could be purchased on the lives of
spouses, family members, business partners or other related groups.
PREMIUM PAYMENT
The minimum Issue Premium for a Policy is generally 1/6 of the Planned
Annual Premium. The Issue Premium is due on the Policy Date. The Insured must be
alive when the Issue Premium is paid. Thereafter, the amount and payment
frequency of planned premiums are as shown on the schedule page of the Policy.
All premiums are payable at Variable and Universal Life Administration, except
that the Issue Premium may be paid to an authorized agent of Phoenix Home Life
for forwarding to the Underwriting Department of Phoenix Home Life.
Any premium payments will be reduced by the applicable premium tax and on
Single Life Policies will also be reduced by a Federal Tax Charge of 1.50%. The
Issue Premium will also be reduced by the Issue Expense Charge on a pro rata
basis in equal monthly installments over a 12-month period. Any unpaid balance
of the Issue Expense Charge will be paid to Phoenix Home Life upon Policy Lapse
or termination.
Premium payments received during a grace period will also be reduced by the
amount needed to cover any monthly deductions during the grace period. The
remainder will be applied on the Payment Date to the various Sub-accounts of the
VUL Account or to the Guaranteed Interest Account, based on the premium
allocation schedule elected in the application for the Policy or as later
changed. The allocation schedule for premium payments may be changed by calling
or writing to Variable and Universal Life Administration. Allocations to the VUL
Account Sub-accounts or to the Guaranteed Interest Account must be expressed in
terms of whole percentages.
The number of units credited to a Sub-account of the VUL Account will be
determined by dividing the portion of the net premium applied to that
Sub-account by the unit value of the Sub-account on the Payment Date.
A Policyowner may increase or decrease the planned premium amount or payment
frequency at any time by written notice to Variable and Universal Life
Administration. Phoenix Home Life reserves the right to limit increases to such
maximums as may be established from time to time. Additional premium payments
may be made at any time. Each premium payment must at least equal $25 or, if
made during a grace period, the payment must equal the amount needed to prevent
lapse of the Policy.
A Policyholder may also elect a Waiver of Premium Rider. This rider provides
for the waiver of certain premium payments under the Policy under certain
conditions during a period of total disability of the Insured. Under its terms,
the specified premium will be waived upon Phoenix Home Life's receipt of proof
that the Insured is totally disabled and that the disability occurred while the
rider was In Force.
The Policy contains a total premium limit as shown on the Schedule Page.
This limit is applied to the sum of all premiums paid under the Policy. If the
total premium limit is exceeded, the Policyowner will receive the excess, with
interest at an annual rate of not less than 4%, not later than 60 days after the
end of the Policy Year in which the limit was exceeded. The Policy Value will
then be adjusted to reflect the refund. The amount to be taken from each
Sub-account or the Guaranteed Interest Account will be allocated in the same
manner as provided for monthly deductions unless the Policyowner requests
otherwise in writing. The total premium limit may be exceeded if additional
premium is needed to prevent lapse or if Phoenix Home Life determines that
additional premium would be permitted by Federal laws or regulations.
A Policyowner may authorize his bank to draw $25 or more from his personal
checking account monthly to purchase Units in any available Sub-account. The
amount the Policyowner designates will be automatically invested in the
Sub-account of his choice on the date the bank draws on his account.
Policies sold to officers, directors and employees of Phoenix Home Life (and
their spouses and children) will be credited with an amount equal to the
first-year commission that would apply on the
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amount of premium contributed. This option is also available to career agents of
Phoenix Home Life (and their spouses and children).
ALLOCATION OF ISSUE PREMIUM
Phoenix Home Life will generally allocate the Issue Premium less
applicable charges to the VUL Account or to the Guaranteed Interest Account
upon receipt of a completed application, in accordance with the allocation
instructions in the application for a Policy. However, Policies issued in
certain states, and Policies issued in certain states pursuant to applications
which state the Policy is intended to replace existing insurance, are issued
with a Temporary Money Market Allocation Amendment. Under this Amendment,
Phoenix Home Life temporarily allocates the entire Issue Premium paid less
applicable charges (along with any other premiums paid during the Right to
Cancel Period) to the Money Market Sub-account of the VUL Account, and, at the
expiration of the Right to Cancel Period, the Policy Value of the Money Market
Sub-account is allocated among the Sub-accounts of the VUL Account or to the
Guaranteed Interest Account in accordance with the applicant's allocation
instructions in the application for insurance.
RIGHT TO CANCEL PERIOD
A Policy may be returned by mailing or delivering it to Phoenix Home Life
within ten days after the Policyowner receives it (or longer in some states);
within ten days after Phoenix Home Life mails or delivers a written notice of
withdrawal right to the Policyowner; or within 45 days after the applicant signs
the application for insurance, whichever occurs latest (the "Right to Cancel
Period"). The returned Policy is treated as if Phoenix Home Life never issued
the Policy and, except for Policies issued with a Temporary Money Market
Allocation Amendment, Phoenix Home Life will return the sum of the following as
of the date Phoenix Home Life receives the returned Policy: (i) the then current
Policy Value less any unpaid loans and loan interest; plus (ii) any monthly
deductions, partial surrender fees, and other charges made under the Policy,
including investment advisory fees, or any Fund expenses deducted. The amount
returned for Policies issued with the Amendment will equal any premiums paid
less any unrepaid loans and loan interest, and less any partial surrender
amounts paid.
Phoenix Home Life reserves the right to disapprove an application for
processing within 7 days of receipt at Phoenix Home Life of the completed
application for insurance, in which event Phoenix Home Life will return the
premium paid. Even after approval of the application for processing, Phoenix
Home Life reserves the right to decline issuance of the Policy, in which event
Phoenix Home Life will refund the applicant the same amount as would have been
refunded under the Policy had it been issued but returned for refund during the
Right to Cancel Period.
TEMPORARY INSURANCE COVERAGE
On the date the application for a Policy is signed and submitted with the
Issue Premium, Phoenix Home Life issues a Temporary Insurance Receipt in
connection with the application. Under the Temporary Insurance Receipt, the
insurance protection applied for (subject to the limits of liability and in
accordance with the terms set forth in the Policy and in the Receipt) takes
effect on the date of the application.
TRANSFER OF POLICY VALUE
SYSTEMATIC TRANSFER PROGRAM
A Policyowner may elect to transfer funds automatically among the
Sub-accounts or the unloaned portion of the Guaranteed Interest Account ("GIA")
on a monthly, quarterly, semi-annual or annual basis under the Systematic
Transfer Program for Dollar Cost Averaging ("Systematic Transfer Program").
Under this Systematic Transfer Program, the minimum initial and subsequent
transfer amounts are $25 monthly, $75 quarterly, $150 semi-annually, or $300
annually. A Policyowner must have an initial value of $1,000 in the GIA or the
Sub-account that funds will be transferred from and if the value in that
Sub-account or the GIA drops below the elected transfer amount, the entire
remaining balance will be transferred and no more systematic transfers will be
processed. Funds may be transferred from only one Sub-account or the GIA, but
may be allocated to multiple Sub-accounts. Under the Systematic Transfer
Program, Policyowners may make more than one transfer per Policy Year from the
GIA, in approximately equal amounts over a minimum 18-month period. All
transfers under the Systematic Transfer Program will be executed on the basis of
the respective values as of the first of the month following receipt of the
transfer request. If the first of the month falls on a holiday or weekend, then
the transfer will be processed on the next succeeding business day.
NON-SYSTEMATIC TRANSFERS
Transfers among available Sub-accounts or the GIA and changes in premium
payment allocations may be requested in writing or by calling 1-800-892-4885,
between the hours of 8:30 AM and 4:00 PM Eastern Time and will be executed on
the date the request is received at Variable and Universal Life Administration,
except as noted below. Unless the Policyowner elects in writing not to authorize
telephone transfers or allocation changes, telephone transfer orders and
allocation changes will also be accepted on behalf of the Policyowner from his
or her registered representative. Phoenix Home Life and Phoenix Equity Planning
Corporation ("PEPCO") will employ reasonable procedures to confirm that
telephone instructions are genuine. They will require account and request
verification and will record telephone instructions on tape. All telephone
transfers will be confirmed in writing to the Policyowner. To the extent that
procedures reasonably designed to prevent unauthorized transfers are not
followed, Phoenix Home Life and PEPCO may be liable for following telephone
instructions for transfers that prove to be fraudulent. However, the Policyowner
would bear the risk of loss resulting from instructions entered by an
unauthorized third party that Phoenix Home Life and PEPCO reasonably believe to
be genuine. These telephone privileges may be modified or terminated at any time
and during times of extreme market volatility, may be difficult to exercise. In
such cases, the Policyowner should submit a written request.
Phoenix Home Life reserves the right to permit transfers of less than $500
only if the entire balance in the Sub-account or the GIA is transferred or if
the Systematic Transfer Program has been elected.
Phoenix Home Life reserves the right to prohibit a transfer to any
Sub-account of the VUL Account where the resultant value of the Policy's share
in that Sub-account immediately after the transfer
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would be less than $500. It further reserves the right to require that the
entire balance of a Sub-account or the GIA be transferred if the share of the
Policy in the value of that Sub-account would, immediately after the transfer,
be less than $500.
Unless Phoenix Home Life agrees otherwise or the Systematic Transfer Program
has been elected, a Policyowner may make only one transfer per Policy Year from
the unloaned portion of the GIA and the amount that may be transferred cannot
exceed the greater of $1,000 or 25% of the value of the Policy in the unloaned
portion of the GIA at the time of the transfer. Non-systematic transfers from
the unloaned portion of the GIA will be effectuated on the date of receipt by
Variable and Universal Life Administration except as otherwise may be requested
by the Policyowner.
For policies issued with the Temporary Money Market Allocation Amendment,
transfers may not be made until termination of the Right to Cancel Period.
DETERMINATION OF SUB-ACCOUNT VALUES
The unit value of each Sub-account of the VUL Account was set by Phoenix
Home Life on the first valuation date of each such Sub-account. The unit value
of a Sub-account of the VUL Account on any other Valuation Date is determined by
multiplying the unit value of that Sub-account on the just prior Valuation Date
by the Net Investment Factor for that Sub-account for the then current Valuation
Period. The unit value of each Sub-account of the VUL Account on a day other
than a Valuation Date is the unit value on the next Valuation Date. Unit values
are carried to 6 decimal places. The unit value of each Sub-account of the VUL
Account on a Valuation Date is determined at the end of that day.
The Net Investment Factor for each Sub-account of the VUL Account is
determined by the investment performance of the assets held by the Sub-account
during the Valuation Period. Each valuation will follow applicable law and
accepted procedures. The Net Investment Factor is equal to item (D) below
subtracted from the result of dividing the sum of items (A) and (B) by item (C).
(A) The value of the assets in the Sub-account on the
current Valuation Date, including accrued net
investment income and realized and unrealized capital
gains and losses, but excluding the net value of any
transactions during the current Valuation Period.
(B) The amount of any dividend (or, if applicable, any
capital gain distribution) received by the Sub-account
if the "ex-dividend" date for shares of the Fund
occurs during the current Valuation Period.
(C) The value of the assets in the Sub-account as of the
just prior Valuation Date, including accrued net
investment income and realized and unrealized capital
gains and losses, and including the net value of all
transactions during the Valuation Period ending on
that date.
(D) The sum of the following daily charges multiplied by
the number of days in the current Valuation Period:
1. the mortality and expense risk charge; and
2. the charge, if any, for taxes and reserves for taxes on
investment income, and realized and unrealized capital
gains.
DEATH BENEFIT
GENERAL
The death benefit (under Option 1) equals the Policy's face amount on the
date of the Insured's death or, if greater, the minimum death benefit on the
date of death. On Single Life Policies, under Option 2, the death benefit equals
the Policy's face amount on the date of the Insured's death plus the Policy
Value. On Multiple Life Policies, under Option 2, the death benefit equals the
Policy's face amount on the date of the first insured's death plus the Policy
Value to the later of the tenth policy anniversary or policy anniversary nearest
the oldest insured's 65th birthday. Under either Option, the minimum death
benefit is the Policy Value on the date of death of the Insured increased by the
applicable percentage from the table contained in the Policy, based on the
Insured's attained age at the beginning of the Policy Year in which the death
occurs. If no option is elected, Option 1 will apply.
GUARANTEED DEATH BENEFIT OPTION
For Policies with a face amount of at least $50,000, a guaranteed death
benefit rider may be purchased. Under this Policy rider, if a Policyowner pays
the required premium each year as specified in the rider, the death benefit
selected will be guaranteed for a certain specified number of years, regardless
of the investment performance of the Policy, and will equal either the initial
face amount or the face amount as later changed by increases or decreases. In
order to keep this guaranteed death benefit In Force, there may be limitations
on the amount of partial surrenders or decreases in face amount permitted.
LIVING BENEFITS OPTION
In the event of a terminal illness of the Insured, an accelerated payment of
up to 75% of the Policy's death benefit (up to a maximum of $250,000) is
available if a Living Benefits Rider has been purchased. The minimum face amount
of the Policy after any such accelerated benefit payment is $10,000.
REQUESTS FOR INCREASE IN FACE AMOUNT
Any time after the first Policy Anniversary, a Policyowner may request an
increase in the face amount of insurance provided under the Policy. Requests for
face amount increases must be made in writing, and Phoenix Home Life requires
additional evidence of insurability. The effective date of the increase will
generally be the Policy Anniversary following approval of the increase. The
increase may not be less than $25,000 and no increase will be permitted after
the Insured's age 75. The charge for the increase is $1.50 per thousand of face
amount increase requested subject to a maximum of $600. No additional monthly
administration charge will be assessed for face amount increases. Phoenix Home
Life will deduct any charges associated with the increase (the increases in cost
of insurance charges), from the Policy Value, whether or not the Policyowner
pays an additional premium in connection with the increase. The surrender charge
applicable to the Policy will also increase. At the time of the
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increase, the Cash Surrender Value must be sufficient to pay the monthly
deduction on that date, or additional premiums will be required to be paid on or
before the effective date. Also, a new Right to Cancel period (see "The
Policy--Right to Cancel Period") will be established for the amount of the
increase. For a discussion of possible implications of a material change in the
Policy resulting from the increase, see "Material Change Rules."
PARTIAL SURRENDER AND DECREASES IN FACE AMOUNT: EFFECT ON
DEATH BENEFIT
A partial surrender or a decrease in face amount generally decreases the
death benefit. Upon a decrease in face amount or partial surrender, a partial
surrender charge will be deducted from Policy Value based on the amount of the
decrease or partial surrender. With a decrease in face amount, the death benefit
under a Policy would be reduced on the next Monthly Calculation Day. With a
partial surrender, the death benefit under a Policy would be reduced
immediately. A decrease in the death benefit may have certain tax consequences.
See "Federal Tax Considerations."
REQUESTS FOR DECREASE IN FACE AMOUNT
A Policyowner may request a decrease in face amount at any time after the
first Policy Year. Unless Phoenix Home Life agrees otherwise, the decrease must
at least equal $10,000 and the face amount remaining after the decrease must at
least equal $25,000. All face amount decrease requests must be in writing and
will be effective on the first Monthly Calculation Day following the date
Phoenix Home Life approves the request. A partial surrender charge will be
deducted from the Policy Value based on the amount of the decrease. The charge
will equal the applicable surrender charge that would apply to a full surrender
multiplied by a fraction (the decrease in face amount divided by the face amount
of the Policy before the decrease).
SURRENDERS
GENERAL
At any time during the lifetime of the Insured(s) and while the Policy is In
Force, the Policyowner may partially or fully surrender the Policy by sending a
written release and surrender in a form satisfactory to Phoenix Home Life to
Variable and Universal Life Administration, along with the Policy if Phoenix
Home Life so requires. The amount available for surrender is the Cash Surrender
Value at the end of the Valuation Period during which the surrender request is
received at Variable and Universal Life Administration.
Upon partial or full surrender, Phoenix Home Life generally will pay the
amount surrendered to the Policyowner within seven days after Phoenix Home Life
receives the Written Request for the surrender. Under certain circumstances, the
surrender payment may be postponed. See "General Provisions--Postponement of
Payments." For the Federal tax effects of partial and full surrenders, see
"Federal Tax Considerations."
FULL SURRENDERS
If the Policy is being fully surrendered, the Policy itself must be returned
to Variable and Universal Life Administration, along with the written release
and surrender of all claims in a form satisfactory to Phoenix Home Life. A
Policyowner may elect to have the amount paid in a lump sum or under a payment
option. See "Surrender Charge" and "Payment Options."
PARTIAL SURRENDERS
A Policyowner may obtain a partial surrender of the Policy by requesting
that part of the Policy's Cash Surrender Value be paid. The Policyowner may do
this at any time during the lifetime of the Insured while the Policy is In Force
with a Written Request to Variable and Universal Life Administration. Phoenix
Home Life reserves the right to require that the Policy be returned before
payment is made. A partial surrender will be effective on the date the Written
Request is received or, if required, the date the Policy is received. Surrender
proceeds may be applied under any of the payment options described under
"Payment of Proceeds--Payment Options."
Phoenix Home Life reserves the right not to allow partial surrenders of less
than $500. In addition, if the share of the Policy Value in any Sub-account or
in the Guaranteed Interest Account that would be reduced as a result of a
partial surrender would, immediately after the partial surrender, be less than
$500, Phoenix Home Life reserves the right to require that as part of any
partial surrender, the entire remaining balance in that Sub-account or the
Guaranteed Interest Account be surrendered.
Upon a partial surrender the Policy Value will be reduced by the sum of the
following:
(i) The Partial Surrender Amount Paid. This amount comes from
a reduction in the Policy's share in the value of each Sub-
account or the Guaranteed Interest Account based on the
allocation requested at the time of the partial surrender. If no
allocation request is made, the assessment to each Sub-
account will be made in the same manner as that provided for
monthly deductions.
(ii) The Partial Surrender Fee. This fee is the lesser of $25 or 2%
of the partial surrender amount paid. The assessment to each
Sub-account or the Guaranteed Interest Account will be made in
the same manner as provided for the partial surrender amount
paid.
(iii) A Partial Surrender Charge. This charge is equal to a pro-rata
portion of the applicable surrender charge that would apply
to a full surrender, determined by multiplying the applicable
surrender charge by a fraction (equal to the partial surrender
amount payable divided by the result of subtracting the
applicable surrender charge from the Policy Value). This
amount is assessed against the Sub-account or the
Guaranteed Interest Account in the same manner as provided
for the partial surrender amount paid.
The Cash Surrender Value will be reduced by the partial surrender amount
paid plus the partial surrender fee. The Face Amount of the Policy will also be
reduced by the same amount as the Policy Value is reduced as described above.
POLICY LOANS
While the Policy is In Force, a loan may be obtained against the Policy up
to the available loan value. The loan value on any day is 90% of the result of
subtracting the then remaining surrender charge from
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the Policy Value. The available loan value is the loan value on the
current day less any outstanding Debt.
The amount of any loan will be added to the loaned portion of the Guaranteed
Interest Account and subtracted from the Policy's share of the Sub-accounts or
the unloaned portion of the Guaranteed Interest Account, based on the allocation
requested at the time of the loan. The total reduction will equal the amount
added to the loaned portion of the Guaranteed Interest Account. Allocations must
generally be expressed in terms of whole percentages. If no allocation request
is made, the amount subtracted from the share of each Sub-account or the
unloaned portion of the Guaranteed Interest Account will be determined in the
same manner as provided for monthly deductions. Interest will be credited and
the loaned portion of the GIA will increase at an effective annual rate of 2.00%
on Single Life Policies and 6% on Multiple Life Policies, compounded daily and
payable in arrears. At the end of each Policy Year and at the time of any Debt
repayment, interest credited to the loaned portion of the GIA will be
transferred to the unloaned portion of the GIA.
Debt may be repaid at any time during the lifetime of the Insured while the
Policy is In Force. Any Debt repayment received by Phoenix Home Life during a
grace period will be reduced to cover any overdue monthly deductions and only
the balance will be applied to reduce the Debt. Such balance, in excess of any
outstanding accrued loan interest, will be applied to reduce the loaned portion
of the Guaranteed Interest Account and will be transferred to the unloaned
portion of the Guaranteed Interest Account to the extent that loaned amounts
taken from such Account have not previously been repaid. Otherwise, such balance
will be transferred among the Sub-accounts as the Policyowner requests upon
repayment and, if no allocation request is made, according to the most recent
premium allocation schedule on file.
While there is outstanding Debt on the Policy, any payments received by
Phoenix Home Life for the Policy will be applied directly to reduce the Debt
unless specified as a premium payment by the Policyowner. Until the Debt is
fully repaid, additional Debt repayments may be made at any time during the
lifetime of the Insured while the Policy is In Force.
Failure to repay a policy loan or to pay loan interest will not terminate
the Policy except as otherwise provided under the terms of the Policy concerning
the grace period and lapse.
The proceeds of Policy loans may be subject to Federal income tax
under certain circumstances. See "Federal Tax Considerations."
In the future, Phoenix Home Life may set a minimum Policy loan amount not to
exceed $200. However, any such minimum loan amount will not apply to any loan,
the proceeds of which are used to pay a premium due on another policy issued by
Phoenix Home Life.
The Policyowner will pay interest on the loan at an effective annual rate,
compounded daily and payable in arrears. For the first ten Policy Years or until
the Policyowner reaches age 65, whichever occurs first, the rate will be 4.00%
on Single Life Policies and 8% on Multiple Life Policies. The loan interest rate
in subsequent years for Single Life Policies will be 3% through the 15th
Policy Year, then 2 1/2% thereafter. For Multiple Life Policies the loan
interest rate in subsequent Policy Years will be 7%. At the end of each Policy
Year, any interest due on the Debt will be treated as a loan and will be offset
by a transfer from the Policyowner's values to the value of the loaned portion
of the Guaranteed Interest Account.
A Policy loan, whether or not repaid, has a permanent effect on the Policy
Value because the investment results of the Sub-accounts or unloaned portion of
the Guaranteed Interest Account will apply only to the amount remaining in the
Sub-accounts or the unloaned portion of the Guaranteed Interest Account. The
longer a loan is outstanding, the greater the effect is likely to be. The effect
could be favorable or unfavorable. If the Sub-accounts or the unloaned portion
of the Guaranteed Interest Account earn more than the annual interest rate for
funds held in the loaned portion of the Guaranteed Interest Account, Policy
Value does not increase as rapidly as it would have had no loan been made. If
the Sub-accounts or the Guaranteed Interest Account earn less than the annual
interest rate for funds held in the loaned portion of the Guaranteed Interest
Account, Policy Value is greater than it would have been had no loan been made.
A Policy loan, whether or not repaid, also has an effect on the Policy's Death
Benefit due to any resulting differences in Cash Surrender Value.
LAPSE
Unlike conventional life insurance policies, the payment of the Issue
Premium, no matter how large, or the payment of additional premiums will not
necessarily continue the Policy In Force to its Maturity Date. Policy Value must
remain positive to avoid lapse. Beginning in the third Policy Year, the Cash
Surrender Value must also be positive to avoid lapse. However, until the Cash
Surrender Value becomes positive for the first time, the Policy will not lapse
as long as all premiums planned at issue have been paid. Subject to the
foregoing, lapse will occur when the Cash Surrender Value is insufficient to
cover the monthly deduction, and a grace period expires without payment of the
additional amount required. If the Cash Surrender Value is insufficient to cover
the monthly deduction, the Policyowner must pay during the grace period the
amount needed to equal three times the required monthly deduction. See "Charges
and Deductions."
If on any Monthly Calculation Day during the first two Policy Years, the
Policy Value is insufficient to cover the monthly deduction, a grace period of
61 days will be allowed for the payment of an amount equal to three times the
required monthly deduction. If on any Monthly Calculation Day during any
subsequent Policy Year, the Cash Surrender Value (which has become positive) is
less than the required monthly deduction, a grace period of 61 days will be
allowed for the payment of an amount equal to three times the required monthly
deduction. The Policy will continue In Force during any such grace period
although, Sub-account transfers, loans, partial or full surrenders will not be
permitted. Failure to pay the additional amount within the grace period will
result in lapse of the Policy, but not before 30 days have elapsed since Phoenix
Home Life mailed written notice to the Policyowner. If a premium payment for the
additional amount is received by Phoenix Home Life during the grace period, any
amount of premium over what is required to prevent lapse will be allocated among
the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in
accordance with the then current premium allocation schedule. In determining the
amount of "excess" premium to be applied to the Sub-accounts or the Guaranteed
Interest Account, Phoenix Home Life will deduct the premium tax and the amount
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needed to cover any monthly deductions made during the grace period. If the
Insured dies during the grace period, the death benefit will equal the amount of
the death benefit immediately prior to the commencement of the grace period.
PAYMENT OF PREMIUMS DURING PERIOD OF DISABILITY
A Policyholder may also elect a Waiver of Premium Rider. This rider provides
for the waiver of certain premium payments under the Policy under certain
conditions during a period of total disability of the Insured. Under its terms,
the specified premium will be waived upon Phoenix Home Life's receipt of proof
that the Insured is totally disabled and that the disability occurred while the
rider was In Force. The terms of this rider may vary by state.
ADDITIONAL INSURANCE OPTIONS
While the Policy is In Force and the Policyowner is insurable, the
Policyowner will have the option to purchase additional insurance on the same
Insured with the same guaranteed rates as the Policy without being assessed an
Issue Expense Charge. Phoenix Home Life will require evidence of insurability
and charges will be adjusted for the Insured's new attained age and any change
in risk classification. However, if elected on the application, the Policyowners
may, at predetermined future dates, purchase additional insurance protection on
the same Insured without evidence of insurability. (See "Purchase Protection
Plan Riders.")
In addition, once each Policy Year, for Single Life Policies only, a
Policyowner may request an increase in face amount. This request should be made
within 90 days prior to the Policy Anniversary and is subject to an issue
expense charge of $1.50 per $1,000 of increase in face amount, up to a maximum
of $600, and to Phoenix Home Life's receipt of adequate evidence of
insurability. A Right to Cancel Period as described in "The Policy" section of
this Prospectus applies to each increase in face amount.
ADDITIONAL RIDER BENEFITS
A Policyowner may purchase additional benefits under a Policy. These
benefits are cancellable by the Policyowner at any time. A charge will be
deducted monthly from the Policy Value for each additional rider benefit
chosen except where noted below. More details will be included in the form of a
rider to the Policy if any of these benefits is chosen. The following
benefits are currently available; however, additional riders may be available as
described in the Policy.
SINGLE LIFE POLICIES:
O DISABILITY WAIVER OF SPECIFIED PREMIUM RIDER
Phoenix Home Life waives the specified premium if the Insured becomes
totally disabled and the disability continues for at least six months.
Premiums will be waived to the Policy Anniversary nearest the Insured's 65th
birthday (provided that the disability continues), unless premiums have been
waived continuously during the entire five years prior to such date in which
case the waiver will continue beyond that date. The premium will be waived
upon Phoenix Home Life's receipt that the Insured is totally disabled and
that the disability occurred while the rider was In Force. The terms vary in
New York.
O ACCIDENTAL DEATH BENEFIT RIDER
An additional death benefit will be paid if the Insured dies from bodily
injury that results from an accident if the Insured dies no later than 90
days after injury; and before the Policy Anniversary nearest the Insured's
75th birthday.
O DEATH BENEFIT PROTECTION RIDER
The purchase of this rider provides that the death benefit will be
guaranteed. The amount of the guaranteed death benefit is equal to the
initial face amount, or the face amount that may later be increased or
decreased by the Policyholder provided that certain minimum premiums are
paid. Unless Phoenix Home Life agrees otherwise, the initial face amount and
the face amount remaining after any decrease must at least equal $50,000 and
the minimum issue age of the Insured is 20. Three (3) death benefit
guarantee periods are available in all States except New York. The minimum
premium required to maintain the guaranteed death benefit is based on the
length of the guarantee period as elected on the application. The 3
available guarantee periods are:
Level: Expiry Date of Death Benefit Guaranteed, the later of:
1 The Policy Anniversary nearest the Insured's 70th
birthday or the 7th Policy Year
2 The Policy Anniversary nearest the Insured's 80th
birthday or the 10th Policy Year
3 The Policy Anniversary nearest the Insured's 95th
birthday.
Level 1 or 2 guarantees may be extended provided that the Policy's Cash
Surrender Value is sufficient and the Policyowner pays the new Minimum Required
Premium.
For Policies issued in New York, two guarantee periods are available:
1 The Policy Anniversary nearest the Insured's 75th birthday
or the 10th Policy Year
2 The Policy Anniversary nearest the Insured's 95th birthday.
O WHOLE LIFE EXCHANGE OPTION RIDER
This rider permits the Policyowner to exchange his Policy for a
fixed-benefit whole life policy at the later of age 65 or Policy Year 15.
There is no charge for this rider.
O PURCHASE PROTECTION PLAN RIDER
Under this rider a Policyowner may, at pre-determined future dates, purchase
additional insurance protection without evidence of insurability.
O LIVING BENEFITS RIDER
Under certain conditions, in the event of the terminal illness of the
Insured, an accelerated payment of up to 75% of the Policy's death benefit
(up to a maximum of $250,000) is available. The minimum face amount of the
Policy after any such accelerated benefit payment is $10,000. There is no
charge for this rider.
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O CASH VALUE ACCUMULATION RIDER
This rider generally permits a Policyowner to pay more in premium than would
otherwise be permitted. This rider must be elected before the Policy is
issued. There is no charge for this rider.
MULTIPLE LIFE POLICIES:
O DISABILITY BENEFIT RIDER
In the case of disability of the Insured, a specified monthly amount may be
credited to the Policy and the monthly deductions will be waived. A
Disability Benefit Rider may be provided on any or all eligible Insureds.
The specified amount selected must be the same for all who elect coverage.
O SURVIVOR PURCHASE OPTION RIDER
The survivor(s) may purchase a new Multiple Life Policy for a face amount
equal to that of the original Policy upon the first death. The new Policy
will be based upon attained age rates.
O TERM INSURANCE RIDER
The Term Insurance Rider enables the face amount of coverage on each life to
be individually specified. A rider is available for each Insured and the
face amount of coverage under the rider may differ for each Insured. Based
upon the Policyowner's election at issue, the rider will provide coverage
for all Insureds to either age 70 or maturity of the Policy. The termination
age specified must be the same for all Insureds.
O POLICY EXCHANGE OPTION RIDER
The Multiple Life Policy may be exchanged for Single Life Policies where the
total face amount under the Policies is no greater than that under the
original Policy. There is no charge for this rider.
INVESTMENTS OF THE VUL ACCOUNT
- -------------------------------------------------------------------------------
PARTICIPATING MUTUAL FUNDS
THE PHOENIX EDGE SERIES FUND
Certain Sub-accounts of the VUL Account invest in corresponding Series of
The Phoenix Edge Series Fund. The Fund currently has the following Series
available through the Policies:
MONEY MARKET SERIES: The investment objective of the Money Market Series is
to provide maximum current income consistent with capital preservation and
liquidity.
GROWTH SERIES: The investment objective of the Growth Series is
to achieve intermediate and long-term growth of capital, with income
as a secondary consideration.
MULTI-SECTOR FIXED INCOME ("MULTI-SECTOR") SERIES: The investment
objective of the Multi-Sector Series is to seek long-term total return by
investing in a diversified portfolio of high yield (high risk) and high quality
fixed income securities. For a discussion of the risks associated with investing
in high yield bonds, please see the accompanying Fund prospectus.
TOTAL RETURN SERIES: The investment objective of the Total Return Series is
to realize as high a level of total rate of return over an extended period of
time as is considered consistent with prudent investment risk (total rate of
return consists of capital appreciation, current income, including dividends and
interest, possible premiums and short-term gains from purchasing and selling
options and financial futures).
INTERNATIONAL SERIES: The investment objective of the International Series
is to seek a high total return consistent with reasonable risk. The
International Series intends to invest primarily in an internationally
diversified portfolio of equity securities. It intends to reduce its risk by
engaging in hedging transactions involving options, futures contracts and
foreign currency transactions. The International Series provides a means for
investors to invest a portion of their assets outside the United States.
BALANCED SERIES: The investment objective of the Balanced Series is to seek
reasonable income, long-term capital growth and conservation of capital. The
Balanced Series intends to invest based on combined considerations of risk,
income, capital enhancement and protection of capital value.
REAL ESTATE SERIES: The investment objective of the Real Estate Securities
Series is to seek capital appreciation and income with approximately equal
emphasis. It intends under normal circumstances to invest in marketable
securities of publicly traded real estate investment trusts (REITs) and
companies that operate, develop, manage and/or invest in real estate located
primarily in the United States.
STRATEGIC THEME SERIES: The investment objective of the Strategic Theme
Series is to seek long-term appreciation of capital by identifying securities
benefiting from long-term trends present in the United States and abroad. The
Strategic Theme Series intends to invest primarily in common stocks believed to
have substantial potential for capital growth.
WANGER ADVISORS TRUST
Certain Sub-accounts of the VUL Account invest in corresponding Series of
the Wanger Advisors Trust. The available Series and their fundamental objectives
are as follows:
WANGER U.S. SMALL CAP ("U.S. SMALL CAP") SERIES: The investment objective
of the U.S. Small Cap Series is to provide long-term growth. The U.S. Small Cap
will invest primarily in securities of U.S. companies with total common stock
market capitalization of less than $1 billion.
WANGER INTERNATIONAL SMALL CAP ("INTERNATIONAL SMALL CAP") SERIES: The
investment objective of the International Small Cap Series is to provide
long-term growth. The International Small Cap will invest primarily in
securities of non-U.S. companies with total common stock market capitalization
of less than $1 billion.
Each Series will be subject to the market fluctuations and risks inherent in
the ownership of any security and there can be no assurance that any Series'
stated investment objective will be realized.
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In addition to being sold to the VUL Account, shares of the Funds are also
sold to the Phoenix Home Life Variable Accumulation Account, a separate account
utilized by Phoenix Home Life to receive and invest premiums paid under certain
variable annuity contracts issued by Phoenix Home Life. Shares of the Fund may
also be sold to other separate accounts of Phoenix Home Life or its affiliates
or of other insurance companies.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Fund simultaneously. Although neither Phoenix Home Life nor the
Fund currently foresees any such disadvantages either to variable life insurance
Policyowners or to variable annuity Contractowners, the Fund's Trustees intend
to monitor events in order to identify any material conflicts between variable
life insurance Policyowners and variable annuity Contractowners and to determine
what action, if any, should be taken in response thereto. Material conflicts
could result from, for example, (1) changes in state insurance laws, (2) changes
in Federal income tax laws, (3) changes in the investment management of any
portfolio of the Fund, or (4) differences in voting instructions between those
given by variable life insurance Policyowners and those given by variable
annuity Contractowners. Phoenix Home Life will, at its own expense, remedy
such material conflict including, if necessary, segregating the assets
underlying the variable life insurance policies and the variable annuity
contracts and establishing a new registered investment company.
INVESTMENT ADVISERS TO THE PHOENIX EDGE SERIES FUND
The Phoenix Edge Series Fund's investment advisers are Phoenix Investment
Counsel, Inc. ("PIC") and Phoenix Realty Securities, Inc. ("PRS") (the
"Advisers"), which are located at 56 and 38 Prospect Street, respectively,
Hartford, Connecticut 06115. PIC was originally organized in 1932 as John P.
Chase, Inc. In addition to the Fund, it also serves as investment adviser to the
Phoenix Series Fund, Phoenix Total Return Fund, Inc. and Phoenix Multi-Portfolio
Fund and as sub-adviser to American Skandia, Chubb America Fund, Inc., Sun
America Series Trust and JNL Series Trust.
PRS was formed in 1994 as an indirect subsidiary of Phoenix Home Life. In
addition to the Fund, it also serves as investment adviser to the Real Estate
Portfolio of the Phoenix Multi Portfolio Fund.
ABKB/LaSalle Securities Limited Partnership (ABKB), a subsidiary of LaSalle
Partners, serves as sub-adviser to the Real Estate Series. ABKB's principal
place of business is located at 100 East Pratt Street, Baltimore, Maryland
21202. ABKB has been a registered investment adviser since 1979.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("PEPCO"), an indirect subsidiary of Phoenix Home Life. PEPCO also
performs bookkeeping and pricing and administrative services for the Fund. PEPCO
is registered as a broker-dealer in fifty states. The executive offices of
Phoenix Home Life are located at One American Row, Hartford, Connecticut 06115
and the principal offices of PEPCO are located at 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, Connecticut 06083-2200.
INVESTMENT ADVISERS TO THE WANGER ADVISORS TRUST
The investment adviser to the Wanger Advisors Trust is Wanger Asset
Management, L.P. Wanger's principal place of business is located at 227 West
Monroe Street, Suite 3000, Chicago, Illinois 60606.
The Advisers furnish continuously an investment program for each Series and
manage the investment and reinvestment of the assets of each Series subject at
all times to the authority and supervision of the Trustees. A more detailed
discussion of the Advisers and the Investment Advisory Agreements is contained
in the accompanying prospectus for the Fund.
REINVESTMENT AND REDEMPTION
All dividend distributions of the Fund are automatically reinvested in
shares of the Fund at their net asset value on the date of distribution; all
capital gains distributions of the Fund, if any, are likewise reinvested at the
net asset value on the record date. Phoenix Home Life redeems Fund shares at
their net asset value to the extent necessary to make payments under the Policy.
SUBSTITUTION OF INVESTMENTS
Phoenix Home Life reserves the right, subject to compliance with the law as
currently applicable or subsequently changed, to make additions to, deletions
from, or substitutions for the investments held by the VUL Account. In the
future Phoenix Home Life may establish additional Sub-accounts within the VUL
Account, each of which will invest in shares of a designated portfolio of the
Fund with a specified investment objective. These portfolios will be established
if, and when, in the sole discretion of Phoenix Home Life, marketing needs and
investment conditions warrant, and will be made available under existing
Policies to the extent and on a basis to be determined by Phoenix Home Life.
If shares of any of the portfolios of the Fund should no longer be available
for investment, or if in the judgment of Phoenix Home Life's management further
investment in shares of any of the portfolios should become inappropriate in
view of the objectives of the Policy, then Phoenix Home Life may substitute
shares of another mutual fund for shares already purchased, or to be purchased
in the future, under the Policy. No substitution of mutual fund shares held by
the VUL Account may take place without prior approval of the Securities and
Exchange Commission and prior notice to the Policyowner. In the event of a
substitution, the Policyowner will be given the option of transferring the
Policy Value of the Sub-account in which the substitution is to occur to another
Sub-account.
PERFORMANCE HISTORY
From time to time the VUL Account may include the performance history of
any or all Sub-accounts, in advertisements, sales literature or reports.
PERFORMANCE INFORMATION ABOUT EACH SUB-ACCOUNT IS BASED ON PAST PERFORMANCE ONLY
AND IS NOT AN INDICATION OF FUTURE PERFORMANCE. Performance information may be
expressed as yield and effective yield of the Money Market Sub-account, as yield
of the Bond Sub-account and as total return of any Sub-account. Current
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yield for the Money Market Sub-account will be based on the income earned by the
Sub-account over a given 7-day period (less a hypothetical charge reflecting
deductions for expenses taken during the period) and then annualized, i.e., the
income earned in the period is assumed to be earned every seven days over a
52-week period and is stated in terms of an annual percentage return on the
investment. Effective yield is calculated similarly but reflects the compounding
effect of earnings on reinvested dividends. Yield and effective yield reflect
the recurring charges on the Account level including the monthly administrative
charge.
Yield calculations of the Money Market Sub-account used for illustration
purposes are based on the consideration of a hypothetical participant's account
having a balance of exactly one Unit at the beginning of a seven-day period,
which period will end on the date of the most recent financial statements. The
yield for the Sub-account during this seven-day period will be the change in the
value of the hypothetical participant's account's original Unit. The following
is an example of this yield calculation for the Money Market Sub-account based
on a seven-day period ending December 31, 1995.
Example:
Assumptions:
Value of hypothetical pre-existing account with exactly one unit
at the beginning of the period:................................ 1.324187
Value of the same account (excluding capital changes) at the
end of the seven-day period:................................... 1.325408
Calculation:
Ending account value .......................................... 1.325408
Less beginning account value .................................. 1.324187
Net change in account value ................................... 0.001221
Base period return:
(adjusted change/beginning account value) ..................... 0.000922
Current yield = return x (365/7) = ............................. 4.81%
Effective yield = [(1 + return)365/7] - 1 = .................... 4.92%
The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies, due to charges which
will be deducted on the Account level.
For the Multi-Sector Sub-account, quotations of yield will be based on all
investment income per unit earned during a given 30-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net investment income by the
maximum offering price per unit on the last day of the period.
When a Sub-account advertises its total return, it will usually be
calculated for one year, five years, and ten years or since inception if the
Sub-account has not been in existence for at least ten years. Total return is
measured by comparing the value of a hypothetical $10,000 investment in the
Sub-account at the beginning of the relevant period to the value of the
investment at the end of the period, assuming the reinvestment of all
distributions at net asset value and the deduction of applicable Policy charges
except for the cost of insurance and any surrender charges and premium taxes
(which vary by Insured and state).
For those Sub-accounts within the VUL Account that have not been available
for one of the quoted periods, the standardized average annual total return
quotations will show the investment performance such Sub-account would have
achieved (reduced by the applicable charges) had it been available to invest in
shares of the Fund for the period quoted.
Below are quotations of standardized average annual total return of Series
of the Phoenix Edge Series Fund. POLICY CHARGES ARE NOT REFLECTED.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED 12/31/95
-----------------------------
COMMENCEMENT LIFE OF
SERIES DATE 1 YEAR 5 YEARS 10 YEARS FUND
- ------ ---- ------ ------- -------- ----
Multi-Sector...... 01/01/83 20.06% 10.47% 8.87% 9.41%
Balanced.......... 05/01/92 19.88% N/A N/A 8.17%
Total Return...... 09/17/84 14.87% 11.34% 10.51% 11.33%
Growth............ 01/01/83 27.23% 18.32% 15.25% 17.33%
International..... 05/01/90 6.46% 7.86% N/A 5.02%
Money Market...... 01/01/83 2.67% 2.62% 4.38% 5.12%
ANNUAL TOTAL RETURNS*
---------------------
MULTI- TOTAL INTER- MONEY
YEAR SECTOR BALANCED RETURN GROWTH NATIONAL MARKET
- ---- ------ -------- ------ ------ -------- ------
1983......... 5.1% N/A N/A 31.7% N/A 7.4%
1984......... 10.3% N/A -1.4% 9.7% N/A 9.2%
1985......... 19.5% N/A 26.2% 33.7% N/A 7.1%
1986......... 18.2% N/A 14.7% 19.4% N/A 5.6%
1987......... 0.2% N/A 11.6% 6.0% N/A 5.6%
1988......... 9.5% N/A 1.4% 3.0% N/A 6.5%
1989......... 6.9% N/A 18.4% 34.4% N/A 7.9%
1990......... 4.4% N/A 5.1% 3.2% -8.9% 7.4%
1991......... 18.5% N/A 28.1% 41.5% 18.7% 5.0%
1992......... 9.1% 8.8% 9.7% 9.3% -13.6% 2.7%
1993......... 15.0% 7.8% 10.1% 18.8% 37.3% 2.1%
1994......... -6.2% -3.6% -2.2% 0.7% -0.7% 3.0%
1995......... 22.6% 22.4% 17.3% 29.9% 8.7% 4.9%
*Sales charges have not been deducted from the Annual Total Returns
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE
PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE
BENEFITS UNDER A POLICY; FOR THIS INFORMATION SEE APPENDIX B "ILLUSTRATIONS OF
DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES."
The Funds Annual Reports, available upon request and without charge,
contain a discussion of the performance of the Funds and a comparison of that
performance to a securities market index.
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CHARGES AND DEDUCTIONS
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Charges are deducted in connection with the Policy to compensate Phoenix
Home Life for: (1) incurring expenses in distributing the Policy; (2) issuing
the Policy; (3) premium and Federal Taxes incurred on premiums received; (4)
providing the insurance benefits set forth in the Policy; and (5) assuming
certain risks in connection with the Policy. The nature and amount of these
charges are described more fully below.
1. MONTHLY DEDUCTION
A charge is deducted monthly from the Policy Value under a Policy ("monthly
deduction") to pay: the cost of insurance provided under the Policy, the cost of
any rider benefits provided, any unpaid balance of the issue expense charge, and
an administrative charge. This administrative charge is currently set at $5.00
per month but it is guaranteed not to exceed $10.00 per month. The monthly
deduction is deducted on each Monthly Calculation Day. It is allocated among the
Sub-accounts of the VUL Account and the unloaned portion of the Guaranteed
Interest Account based on the allocation schedule for monthly deductions
specified by the applicant in the application for a Policy or as later changed
by the Policyowner. In the event that the Policy's share in the value of the
Sub-accounts or the unloaned portion of the Guaranteed Interest Account is
insufficient to permit the withdrawal of the full monthly deduction, the
remainder will be taken on a proportionate basis from the Policy's share of each
of the other Sub-accounts and the unloaned portion of the Guaranteed Interest
Account. The number of units deducted will be determined by dividing the portion
of the monthly deduction allocated to each Sub-account or to the unloaned
portion of the Guaranteed Interest Account by the unit value on the Monthly
Calculation Day. Because portions of the monthly deduction, such as the cost of
insurance, can vary from month to month, the monthly deduction itself may vary
in amount from month to month.
(a) ISSUE EXPENSE CHARGE. A cost-based issue administration
charge is assessed on a pro rata basis in equal monthly
installments over a 12-month period to compensate Phoenix
Home Life for underwriting and start-up expenses in
connection with issuing a Policy. For Multiple Life Policies,
the issue administrative charge is $150. For Single Life
Policies, the issue administrative charge is $1.50 per $1,000
of face amount, up to a maximum charge of $600. Phoenix
Home Life may reduce or eliminate the Issue Expense
Charge for Policies issued under group or sponsored
arrangements. Generally, administrative costs per Policy
vary with the size of the group or sponsored arrangement,
its stability as indicated by its term of existence and certain
characteristics of its members, the purposes for which the
Policies are purchased and other factors. The amounts of
any reductions will be considered on a case-by-case basis
and will reflect the reduced administration costs expected as
a result of sales to a particular group or sponsored
arrangement.
(b) COST OF INSURANCE. In order to calculate the cost of
insurance charge, Phoenix Home Life multiplies the
applicable cost of insurance rate by the difference between
the death benefit selected (death benefit Option 1 if no
selection is made) and the Policy Value. Generally, cost of
insurance rates for Single Life Policies are based on the sex,
issue age, duration and risk class; and for Multiple Life
Policies the cost of insurance rates are based on the sex,
attained age and risk class of the Insured(s). However, in
certain states and for policies issued in conjunction with certain
qualified plans, cost of insurance rates are not based on sex. The
actual monthly cost of insurance rates are based on Phoenix Home
Life's expectations of future mortality experience. They will
not, however, be greater than the guaranteed cost of
insurance rates set forth in the Policy. These guaranteed
maximum rates are equal to 100% of the 1980
Commissioner's Standard Ordinary ("CSO") Mortality Table,
with appropriate adjustment for the Insured's risk
classification. Any change in the cost of insurance rates will
apply to all persons of the same sex, insurance age and risk
class whose Policies have been In Force for the same length
of time. The risk class of an Insured may affect the cost of
insurance rate. Phoenix Home Life currently places Insureds
into a preferred or standard risk class or a risk class
involving a higher mortality risk, depending upon the health
of the Insured as determined by medical information that
Phoenix Home Life requests. In an otherwise identical
Policy, Insureds in the preferred or standard risk class will
have a lower cost of insurance than those in the risk class
with the higher mortality risk. The standard risk class is also
divided into categories: smokers, nonsmokers and those
who have never smoked. Non-smokers will generally incur
a lower cost of insurance than similarly situated Insureds
who smoke. A blended cost of insurance rate is applied
under Multiple Life Policies.
2. PREMIUM TAXES
Various states and subdivisions impose a tax on premiums received by
insurance companies. Premium taxes vary from state to state. Currently, the
taxes imposed by states on premiums range from 0.75% to 4% of premiums paid.
Moreover, certain municipalities in Louisiana, Kentucky and South Carolina also
impose taxes on premiums paid, in addition to the state taxes imposed. The
premium tax charge represents an amount Phoenix Home Life considers necessary to
pay all premium taxes imposed by such states and any subdivisions thereof, and
Phoenix Home Life does not expect to derive a profit from this charge. These
taxes are deducted from the Issue Premium, and from each subsequent premium
payment.
3. FEDERAL TAX CHARGE
On Single Life Policies, a charge equal to 1.50% of each premium will be
deducted from each premium payment to cover the estimated cost to Phoenix Home
Life of the Federal Income Tax treatment of deferred acquisition costs. The SEC
maximum sales load has been reduced to reflect this charge.
4. MORTALITY AND EXPENSE RISK CHARGE
Phoenix Home Life will deduct a daily charge from the VUL Account at an
annual rate of 0.80% of the average daily net assets of the VUL Account to
compensate for certain risks assumed in connection with the Policy. For Single
Life Policies, a reduced annual rate of .25% will apply after the 15th Policy
Year. This charge is not deducted from the Guaranteed Interest Account.
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The mortality risk assumed by Phoenix Home Life is that Insureds may live
for a shorter time than projected because of inaccuracies in that projecting
process and, accordingly, that an aggregate amount of death benefits greater
than that projected will be payable. The expense risk assumed is that expenses
incurred in issuing the Policies may exceed the limits on administrative charges
set in the Policies. If the expenses do not increase to an amount in excess of
the limits, or if the mortality projecting process proves to be accurate,
Phoenix Home Life may profit from this charge. Phoenix Home Life also assumes
risks with respect to other contingencies including the incidence of Policy
loans, which may cause Phoenix Home Life to incur greater costs than anticipated
when designing the Policies. To the extent Phoenix Home Life profits from this
charge, it may use those profits for any proper purpose, including the payment
of sales expenses or any other expenses that may exceed income in a given year.
5. INVESTMENT MANAGEMENT CHARGE
As compensation for investment management services to the Funds, the
Advisers are entitled to fees, payable monthly and based on an annual percentage
of the average aggregate daily net asset values of each Series as summarized in
the following table:
PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $250,000,000 $250,000,000 $500,000,000
- ------ ------------ ------------ ------------
Money Market........ .40% .35% .30%
Multi-Sector........ .50% .45% .40%
Balanced............ .55% .50% .45%
Total Return........ .60% .55% .50%
Growth.............. .70% .65% .60%
International....... .75% .70% .65%
Strategic Theme..... .75% .70% .65%
PHOENIX REALTY SECURITIES, INC.
-------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- -------------- --------------
Real Estate......... .75% .70% .65%
WANGER ASSET MANAGEMENT, L.P.
-----------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $100,000,000 $150,000,000 $250,000,000
- ------ ------------ ------------ ------------
U.S. Small
Cap................. 1.00% .95% .90%
International 1.30% 1.20% 1.10%
Small Cap...........
In addition, each Series pays a portion or all of its other annual operating
expenses other than the management fees; the Growth, Multi-Sector, Total
Return, Money Market and Balanced Series will pay up to .15%; the Real Estate
and Strategic Theme Series will pay up to .25%; the International Series will
pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .50%; and the
Wanger International Small Cap Series will pay up to .60% of its average net
assets annually. See "Charges and Deductions."
6. OTHER CHARGES
SURRENDER CHARGE
During the first ten Policy Years, there is a difference between the
amount of Policy Value and the amount of Cash Surrender Value of the Policy.
This difference is the surrender charge, consisting of a contingent deferred
sales charge designed to recover expenses for the distribution of Policies that
are terminated by surrender before distribution expenses have been recouped, and
a contingent deferred issue charge designed to recover expenses for the
administration of Policies that are terminated by surrender before
administrative expenses have been recouped. These are contingent charges because
they are paid only if the Policy is surrendered (or the Face Amount is reduced
or the Policy lapses) during this period. They are deferred charges because they
are not deducted from premiums. The contingent deferred issue charge is set at a
level designed to recover actual costs and is not designed to result in any
profit to Phoenix Home Life.
During the first ten Policy Years, the full Surrender Charge as described
below will apply if the Policyowner either surrenders the Policy for its Cash
Surrender Value or lets the Policy lapse. The applicable Surrender Charge in any
Policy Month is the full Surrender Charge minus any surrender charges that have
been previously paid. There is no Surrender Charge after the 10th Policy Year.
During the first two Policy Years on Single Life Policies and during the first
ten Policy Years on Multiple Life Policies, the maximum Surrender Charge that a
Policyowner could pay while he or she owns the Policy is equal to either A plus
B (as defined below) or the amount shown in the Policies Surrender Charge
Schedule, whichever is less. After the first two Policy Years on Single Life
Policies, the maximum Surrender Charge that a Policyowner could pay is based on
the amount shown in the Policy's Surrender Charge Schedule.
A (the contingent deferred sales charge) is equal to:
1) 30% of all premiums paid (up to and including the amount
stated in the Policy's Surrender Charge Schedule, which is
calculated according to a formula contained in a Securities
and Exchange Commission rule); plus
2) 10% of all premiums paid in excess of this amount but not
greater than twice this amount; plus
3) 9% of all premiums paid in excess of twice this amount.
B (the contingent deferred issue charge) is equal to:
$5.00 per $1,000 of initial Face Amount.
As an example, the following illustrates the maximum Surrender Charge on a
$100,000 Single Life Policy for a male age 35 who has never smoked, who has paid
$3,000 in premium payments, and who surrenders the Policy in the 70th Policy
Month. The Policy's Surrender Charge Schedule would show that the maximum
Surrender Charge to be paid would be equal to either A plus B (shown below) or
the amount shown in the chart in the Policy (also shown below), whichever is
less:
Example: If this policyowner surrenders his policy in the 70th
Policy month his surrender charge will be $1,186.78, as given in the
table.
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Example: If this policyowner surrenders his policy in the first two years he
may be eligible to receive a refund of a portion of the surrender charge,
depending on the amount of premium paid, or in other words his surrender charge
may be reduced. The surrender charge in the first 2 years would be equal to the
lesser of the amount in the surrender charge table and the sum of the following:
1) 28.5% of premiums paid up to $1,076.72, plus
2) 8.5% of premiums paid in excess of $1,076.72 but not
greater than $2,153.43, plus
3) 7.5% of premiums paid in excess of $2,153.43, plus $500
If this policyowner surrendered his policy in the 2nd year after paying
$2,000 of premiums his surrender charge would be the lesser of $1,307.54 from
the table, and $385.34, thus equaling $385.34. Thus, in this case, the
policyowner would pay less surrender charge if he surrenders his policy in the
first 2 Policy Years.
SURRENDER CHARGE TABLE
POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE MONTH CHARGE
----- ------ ----- ------ ----- ------
1-60 $1307.54 80 $1066.03 100 $727.09
61 1295.46 81 1053.95 101 690.65
62 1283.39 82 1041.88 102 654.22
63 1271.31 83 1029.80 103 617.78
64 1259.24 84 1017.73 104 581.35
65 1247.16 85 1005.65 105 544.91
66 1235.08 86 993.58 106 508.48
67 1223.01 87 981.50 107 472.05
68 1210.93 88 969.43 108 435.61
69 1198.86 89 957.35 109 399.18
70 1186.78 90 945.28 110 362.74
71 1174.71 91 933.20 111 326.31
72 1162.63 92 921.13 112 289.97
73 1150.56 93 909.05 113 253.44
74 1138.48 94 896.97 114 217.01
75 1126.41 95 884.90 115 180.57
76 1114.33 96 872.82 116 144.14
77 1102.26 97 836.39 117 107.70
78 1090.18 98 799.95 118 71.27
79 1078.10 99 763.52 119 34.83
120 .00
Phoenix Home Life may reduce the Surrender Charge for Policies issued under
group or sponsored arrangements. The amount of reduction will be considered on a
case-by-case basis and will reflect the reduced costs to Phoenix Home Life
expected as a result of sales to a particular group or sponsored arrangement.
PARTIAL SURRENDER FEE
A fee equal to the lesser of $25 or 2% of the amount withdrawn from the
Policy is deducted from the Policy Value upon a partial surrender of the Policy
to recover the actual costs of processing the partial surrender request. The
assessment to each Sub-account or to the Guaranteed Interest Account will be
made in the same manner as provided for the partial surrender amount paid. That
is, that the Policy's share in the value of each Sub-account or the Guaranteed
Interest Account will be reduced based on the allocation made at the time of the
partial surrender. If no allocation request is made, the assessment to each
Sub-account and to the Guaranteed Interest Account will be made in the same
manner as provided for monthly deductions.
PARTIAL SURRENDER CHARGE
A charge as described below is deducted from the Policy Value upon a partial
surrender of the Policy. The charge is equal to a pro-rata portion of the
applicable surrender charge that would apply to a full surrender, determined by
multiplying the applicable surrender charge by a fraction (equal to the partial
surrender amount payable divided by the result of subtracting the applicable
surrender charge from the Policy Value). This amount is assessed against the
Sub-accounts or the Guaranteed Interest Account in the same manner as provided
for with respect to the partial surrender amount paid.
A partial surrender charge is also deducted from Policy Value upon a
decrease in Face Amount. The charge is equal to the applicable surrender charge
multiplied by a fraction (equal to the decrease in Face Amount divided by the
Face Amount of the Policy prior to the decrease).
TAXES
Currently no charge is made to the VUL Account for Federal income taxes that
may be attributable to the VUL Account. Phoenix Home Life may, however, make
such a charge in the future. Charges for other taxes, if any, attributable to
the VUL Account may also be made. See "Charges and Deductions--Other Charges."
GENERAL PROVISIONS
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POSTPONEMENT OF PAYMENTS
GENERAL
Payment of any amount upon complete or partial surrender, Policy loan, or
benefits payable at death (in excess of the initial face amount) or maturity may
be postponed: (i) for up to six months from the date of the request, for any
transactions dependent upon the value of the GIA; (ii) whenever the New York
Stock Exchange is closed other than for customary weekend and holiday closings,
or trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission; or (iii) whenever an emergency exists, as
determined by the Commission as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to determine the
value of the VUL Account's net assets. Transfers may also be postponed under
these circumstances.
PAYMENT BY CHECK
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared the Policyowner's bank.
THE CONTRACT
The Policy and attached copy of the application are the entire contract.
Only statements in the application can be used to void the Policy. The
statements are considered representations and not warranties. Only an executive
officer of Phoenix Home Life can agree to change or waive any provisions of the
Policy.
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SUICIDE
If the Insured commits suicide within two years after the Policy's Date of
Issue, Phoenix Home Life will pay only the Policy Value adjusted by the addition
of any monthly deductions and other fees and charges made under the Policy and
the subtraction of any Debt owed to Phoenix Home Life under the Policy.
INCONTESTABILITY
Phoenix Home Life cannot contest this Policy or any attached rider after it
has been In Force during the lifetime of the Insured for two years from the
Policy Date.
CHANGE OF OWNER OR BENEFICIARY
The Beneficiary, as named in the Policy application or subsequently changed,
will receive the Policy benefits at the Insured's death. If the named
Beneficiary dies before the Insured, the contingent Beneficiary, if named,
becomes the Beneficiary. If no Beneficiary survives the Policyowner, the
benefits payable at the Insured's death will be paid to the Policyowner's
estate.
As long as the Policy is In Force, the Policyowner and the Beneficiary may
be changed by Written Request, satisfactory to Phoenix Home Life. A change in
Beneficiary will take effect as of the date the notice is signed, whether or not
the Insured is living when the notice is received by Phoenix Home Life. Phoenix
Home Life will not, however, be liable for any payment made or action taken
before receipt of the notice.
ASSIGNMENT
The Policy may be assigned. Phoenix Home Life will not be bound by the
assignment until a written copy has been received and will not be liable with
respect to any payment made prior to receipt. Phoenix Home Life assumes no
responsibility for determining whether an assignment is valid.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the death benefit will
be adjusted based on what the cost of insurance charge for the most recent
monthly deduction would have purchased based on the correct age and sex.
SURPLUS
Policyowners may share in divisible surplus of Phoenix Home Life to the
extent determined annually by the Phoenix Home Life Board of Directors. However,
it is not currently anticipated that the Board will authorize these payments
since Policyowners will be participating directly in investment results.
PAYMENT OF PROCEEDS
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SURRENDER AND DEATH BENEFIT PROCEEDS
Death benefit proceeds and the proceeds of full or partial surrenders
will be processed at unit values next computed after Phoenix Home Life receives
the request for surrender or due proof of death, provided such request is
complete and in good order. Payment of surrender or death proceeds will usually
be made in one lump-sum within seven days, unless another payment option has
been elected. Payment of the death proceeds, however, may be delayed if the
claim for payment of the death proceeds needs to be investigated; e.g., to
ensure payment of the proper amount to the proper payee. Any such delay will not
be beyond that reasonably necessary to investigate such claims consistent with
insurance practices customary in the life insurance industry. Under a Policy
covering multiple lives, the death proceeds will be paid upon the first death
under the Policy. In addition, under certain conditions, in the event of the
terminal illness of the Insured, an accelerated payment of up to 75% of the
Policy's Death Benefit (up to maximum of $250,000), is available under the
Living Benefits Rider. The minimum face amount remaining after any such
accelerated benefit payment is $10,000.
While the Insured is living, the Policyowner may elect a payment option for
payment of the death proceeds to the Beneficiary. The Policyowner may revoke or
change a prior election, unless such right has been waived. The Beneficiary may
make or change an election prior to payment of the death proceeds, unless the
Policyowner has made an election which does not permit such further election or
changes by the Beneficiary.
A written form satisfactory to Phoenix Home Life is required to elect,
change, or revoke a payment option.
The minimum amount of surrender or death proceeds that may be applied under
any income option is $1,000.
If the Policy is assigned as collateral security, Phoenix Home Life will pay
any amount due the assignee in one lump sum. Any remaining proceeds will remain
under the option elected.
PAYMENT OPTIONS
All or part of the surrender or death proceeds of a Policy may be applied
under one or more of the following payment options or such other payment options
or alternative versions of the options listed as Phoenix Home Life may choose to
make available in the future.
OPTION 1--LUMP SUM.
Payment in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest during the payee's lifetime on the amount payable as a
principal sum. Interest rates are guaranteed to be at least 3 percent per year.
OPTION 3--PAYMENT FOR A SPECIFIC PERIOD.
Equal income installments are paid for a specified period of years whether
the payee lives or dies. The first payment will be on the date of settlement.
The assumed interest rate on the unpaid balance is guaranteed not to be less
than 3 percent per year.
OPTION 4--LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN.
Equal installments are paid until the later of: (A) The death of the payee;
(B) The end of the period certain. The first payment will be on the date of
settlement. The period certain must be chosen at the time this option is
elected. The periods certain that may be chosen are as follows: (A) Ten years;
(B) Twenty years; (C) Until the installments paid refund the amount applied
under this option; and if the payee is not living when the final payment falls
due, that payment will be limited to the amount which needs to be added to the
payments already made
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to equal the amount applied under this option. If, for the
age of the payee, a period certain is chosen that is shorter than another period
certain paying the same installment amount, Phoenix Home Life will deem the
longer period certain as having been elected. Any life annuity provided under
Option 4 is calculated using an interest rate guaranteed to be no less than
3 3/8% per year, except that any life annuity providing a period certain of 20
years or more is calculated using an interest rate guaranteed to be no less than
3 1/4% per year.
OPTION 5--LIFE ANNUITY.
Equal installments are paid only during the lifetime of the payee. The first
payment will be on the date of settlement. Any life annuity as may be provided
under Option 5 is calculated using an interest rate guaranteed to be no less
than 3 1/2% per year.
OPTION 6--PAYMENTS OF A SPECIFIED AMOUNT.
Equal installments of a specified amount, out of the principal sum and
interest on that sum, are paid until the principal sum remaining is less than
the amount of the installment. When that happens, the principal sum remaining
with accrued interest will be paid as a final payment. The first payment will be
on the date of settlement. The payments will include interest on the principal
sum remaining at a rate guaranteed to at least equal 3 percent per year. This
interest will be credited at the end of each year. If the amount of interest
credited at the end of the year exceeds the income payments made in the last 12
months, that excess will be paid in one sum on the date credited.
OPTION 7--JOINT SURVIVORSHIP ANNUITY WITH 10 YEAR PERIOD
CERTAIN.
The first payment will be on the date of settlement. Equal income
installments are paid until the latest of: (A) The end of the 10-year period
certain; (B) The death of the Insured; (C) The death of the other named
annuitant. The other annuitant must be named at the time this option is elected
and cannot later be changed. The other annuitant must have an attained age of at
least 40. Any joint survivorship annuity as may be provided under this option is
calculated using an interest rate guaranteed to be no less than 3 3/8% per year.
For additional information concerning the above payment options,
see the Policy.
FEDERAL TAX CONSIDERATIONS
- -------------------------------------------------------------------------------
INTRODUCTION
The ultimate effect of Federal income taxes on values under the VUL Account
and on the economic benefit to the Policyowner or Beneficiary depends on Phoenix
Home Life's tax status and upon the tax status of the individual concerned. The
discussion contained herein is general in nature and is not intended as tax
advice. For complete information on Federal and state tax considerations, a
qualified tax adviser should be consulted. No attempt is made to consider any
estate and inheritance taxes, or any state, local or other tax laws. Because the
discussion herein is based upon Phoenix Home Life's understanding of Federal
income tax laws as they are currently interpreted, Phoenix Home Life cannot
guarantee the tax status of any Policy. No representation is made regarding the
likelihood of continuation of current Federal income tax laws, Treasury
regulations, or of the current interpretations by the Internal Revenue Service.
Phoenix Home Life reserves the right to make changes to the Policy in order to
assure that it will continue to qualify as a life insurance contract for Federal
income tax purposes.
PHOENIX HOME LIFE'S TAX STATUS
Phoenix Home Life is taxed as a life insurance company under the Internal
Revenue Code of 1986, as amended (the "Code"). For Federal income tax purposes,
neither the VUL Account nor the Guaranteed Interest Account is a separate entity
from Phoenix Home Life and their operations form a part of Phoenix Home Life.
Investment income and realized capital gains on the assets of the VUL
Account are reinvested and taken into account in determining the value of the
VUL Account. Investment income of the VUL Account, including realized net
capital gains, is not taxed to Phoenix Home Life. Due to Phoenix Home Life's tax
status under current provisions of the Code, no charge will currently be made to
the VUL Account for Phoenix Home Life's Federal income taxes which may be
attributable to the VUL Account. Phoenix Home Life reserves the right to make
a deduction for taxes if the Federal tax treatment of Phoenix Home Life is
determined to be other than what Phoenix Home Life currently believes it to be,
if changes are made affecting the tax treatment to Phoenix Home Life of variable
life insurance contracts, or if changes occur in Phoenix Home Life's tax status.
If imposed, such charge would be equal to the Federal income taxes attributable
to the investment results of the VUL Account.
POLICY BENEFITS
DEATH BENEFIT PROCEEDS. The Policy, whether or not it is a "modified
endowment contract" (see the discussion on modified endowment contracts below),
should be treated as meeting the definition of a life insurance contract for
Federal income tax purposes, under Section 7702 of the Code. As such, the death
benefit proceeds thereunder should be excludable from the gross income of the
Beneficiary under Code Section 101(a)(1). Also, the Policyowner should not be
deemed to be in constructive receipt of the Cash Value, including increments
thereon. See, however, the sections below on possible taxation of amounts
received under the Policy, via full surrender, partial surrender or loan. In
addition, a benefit paid under a Living Benefit Rider may be taxable as income
in the year of receipt.
Code Section 7702 imposes certain conditions with respect to premiums
received under a Policy. Phoenix Home Life intends to monitor the premiums to
assure compliance with such conditions. However, in the event that the premium
limitation is exceeded during the year, Phoenix Home Life may return the excess
premium, with interest, to the Policyowner within 60 days after the end of the
Policy Year, and maintain the qualification of the Policy as life insurance for
Federal income tax purposes.
FULL SURRENDER. Upon full surrender of a Policy for its Cash Value, the
excess, if any, of the Cash Value (unreduced by any outstanding indebtedness)
over the premiums paid will be treated as ordinary income for Federal income tax
purposes. The full surrender of a Policy which is a "modified endowment
contract" may result in the imposition of an additional 10 percent tax on any
income received.
PARTIAL SURRENDER. If the Policy is a "modified endowment contract," partial
surrenders are fully taxable to the extent of income
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in the Policy and are possibly subject to an additional 10 percent tax. See
the discussion on "modified endowment contracts" below. If the Policy is not a
"modified endowment contract," partial surrenders may still be taxable, as
follows. Code Section 7702(f)(7) provides that where a reduction in death
benefits occurs during the first 15 years after a Policy is issued and there is
a cash distribution associated with that reduction, the Policyowner may be taxed
on all or a part of the amount distributed. A reduction in death benefits may
result from a partial surrender. After 15 years, the proceeds will not be
subject to tax, except to the extent such proceeds exceed the total amount of
premiums paid but not previously recovered. Phoenix Home Life suggests you
consult with your tax adviser in advance of a proposed decrease in death
benefits or a partial surrender as to the portion, if any, which would be
subject to tax, and in addition as to the impact such partial surrender might
have under the new rules affecting "modified endowment contracts." The benefit
payment under the Living Benefits Rider is not considered a partial surrender.
LOANS. Phoenix Home Life believes that any loan received under a Policy will
be treated as indebtedness of the Policyowner. If the Policy is a "modified
endowment contract," loans are fully taxable to the extent of income in the
Policy and are possibly subject to an additional 10 percent tax. See the
discussion on "modified endowment contracts" below. If the Policy is not a
"modified endowment contract," Phoenix Home Life believes that no part of any
loan under a Policy will constitute income to the Policyowner.
The deductibility by the Policyowner of loan interest under a Policy may be
limited under Code Section 264, depending on the circumstances. Any Policyowner
intending to fund premium payments through borrowing should consult a tax
adviser with respect to the tax consequences thereof. Under the "personal"
interest limitation provisions of the Code, interest on Policy loans used for
personal purposes is not tax deductible. Other rules may apply to allow all or
part of the interest expense as a deduction if the loan proceeds are used for
"trade or business" or "investment" purposes. See your tax adviser for further
guidance.
BUSINESS-OWNED POLICIES
If the Policy is owned by a business or a corporation, the Code may impose
additional restrictions. The Code limits the interest deduction on
business-owned Policy loans and may impose tax upon the inside build-up of
corporate-owned life insurance policies through the corporate alternative
minimum tax.
MODIFIED ENDOWMENT CONTRACTS
GENERAL. Pursuant to Code Section 72(e), loans and other amounts received
under "modified endowment contracts" will in general be taxed to the extent of
accumulated income (generally, the excess of Cash Value over premiums paid).
Policies are "modified endowment contracts" if they meet the definition of life
insurance, but fail the "7-pay test." This test essentially provides that the
cumulative premiums paid under the Policy at any time during the Policy's first
7 years cannot exceed the sum of the net level premiums that would have been
paid on or before that time had the Policy provided for paid-up future benefits
after the payment of 7 level annual premiums. In addition, a modified endowment
contract includes any life insurance contract that is received in exchange for a
modified endowment contract. Premiums paid during a Policy Year that are
returned by Phoenix Home Life (with interest) within 60 days after the end of
the Policy Year will not cause the Policy to fail the 7-pay test.
REDUCTION IN BENEFITS DURING THE FIRST 7 YEARS. If there is a reduction in
benefits during the first 7 Policy Years, the premiums are redetermined for
purposes of the 7-pay test as if the Policy had originally been issued at the
reduced death benefit level and the new limitation is applied to the cumulative
amount paid for each of the first 7 Policy Years.
DISTRIBUTIONS AFFECTED. If a Policy fails to meet the 7-pay test, it is
considered a modified endowment contract only as to distributions in the year in
which the death benefit reduction takes effect and all subsequent Policy Years.
However, distributions made in anticipation of such failure (there is a
presumption that distributions made within two years prior to such failure were
"made in anticipation") also are considered distributions under a modified
endowment contract. If the Policy satisfies the "7-pay test" for 7 years,
distributions and loans will generally not be subject to the modified
endowment contract rules.
PENALTY TAX. Any amounts taxable under the modified endowment contract rule
will be subject to an additional 10 percent excise tax, with certain exceptions.
This additional tax will not apply in the case of distributions: (i) made on or
after the taxpayer attains age 59 1/2; (ii) which are attributable to the
taxpayer's disability (within the meaning of Code Section 72(m)(7)); or (iii)
which are part of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the taxpayer
or the joint lives (or life expectancies) of the taxpayer and his Beneficiary.
MATERIAL CHANGE RULES. Any determination of whether the Policy meets the
"7-pay test" will begin again any time the Policy undergoes a "material change,"
which includes any increase in death benefits or any increase in or addition of
a qualified additional benefit, with the following two exceptions. First, if an
increase is attributable to premiums paid "necessary to fund" the lowest death
benefit and qualified additional benefits payable in the first 7 Policy Years or
to the crediting of interest or dividends with respect to these premiums, the
"increase" does not constitute a material change. Second, to the extent provided
in regulations, if the death benefit or qualified additional benefit increases
as a result of a cost-of-living adjustment based on an established broad-based
index specified in the Policy, this does not constitute a material change if (1)
the cost-of-living determination period does not exceed the remaining premium
payment period under the Policy, and (2) the cost-of-living increase is funded
ratably over the remaining premium payment period of the Policy. A reduction in
death benefits is not considered a material change unless accompanied by a
reduction in premium payments.
A material change may occur at any time during the life of the Policy
(within the first 7 years or thereafter), and future taxation of distributions
or loans would turn on whether the Policy satisfied the applicable "7-pay test"
from the time of the material change. An exchange of policies is considered to
be a material change for all purposes.
SERIAL PURCHASE OF MODIFIED ENDOWMENT CONTRACTS. All modified endowment
contracts issued by the same insurer (or affiliated companies of the insurer) to
the same Policyowner within the same calendar year will be treated as one
modified endowment contract in
23
<PAGE>
determining the taxable portion of any loans or distributions made to the
Policyowner. The Treasury has been given specific legislative authority to issue
regulations to prevent the avoidance of the new distribution rules for modified
endowment contracts. A qualified tax adviser should be consulted about the tax
consequences of the purchase of more than one modified endowment contract within
any calendar year.
LIMITATIONS ON UNREASONABLE MORTALITY AND EXPENSE CHARGES
The Code imposes limitations on unreasonable mortality and expense charges
for purposes of ensuring that a Policy qualifies as a life insurance contract
for Federal income tax purposes. The mortality charges taken into account to
calculate permissible premium levels may not exceed those charges required to be
used in determining the Federal income tax reserve for the Policy, unless
Treasury regulations prescribe a higher level of charge. In addition, the
expense charges taken into account under the guideline premium test are required
to be reasonable, as defined by the Treasury regulations. Phoenix Home Life
intends to comply with the limitations in calculating the premium it is
permitted to receive from the Policyowner.
QUALIFIED PLANS
A Policy may be used in conjunction with certain qualified plans.Since the
rules governing such use are complex, a purchaser should not use the Policy in
conjunction with a qualified plan until he has consulted a competent pension
consultant or tax adviser.
DIVERSIFICATION STANDARDS
To comply with the diversification regulations under Code Section 817(h),
("Diversification Regulations") each Portfolio of the Fund is required to
diversify its investments. The Diversification Regulations generally require
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of the Fund's assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. A "look-through" rule applies to treat a
pro-rata portion of each asset of the Fund as an asset of the VUL Account;
therefore, each Series of the Fund will be tested for compliance with the
percentage limitations. For purposes of these diversification rules, all
securities of the same issuer are treated as a single investment, but each
United States Government agency or instrumentality is treated as a separate
issuer.
The general diversification requirements are modified if any of the assets
of the VUL Account are direct obligations of the United States Treasury. In this
case, there is no limit on the investment that may be made in United States
Treasury securities, and for purposes of determining whether assets other than
United States Treasury securities are adequately diversified, the generally
applicable percentage limitations are increased based on the value of the VUL
Account's investment in United States Treasury securities. Notwithstanding this
modification of the general diversification requirements, the portfolios of the
Fund will be structured to comply with the general diversification standards
because they serve as an investment vehicle for certain variable annuity
contracts which must comply with these standards.
In connection with the issuance of the Diversification Regulations, the
Treasury announced that such regulations do not provide guidance concerning the
extent to which policyowners may direct their investments to particular
divisions of a separate account. It is possible that a revenue ruling or other
form of administrative pronouncement in this regard may be issued in the near
future. It is not clear, at this time, what such a revenue ruling or other
pronouncement will provide. It is possible that the Policy may need to be
modified to comply with such future Treasury announcements. For these reasons,
Phoenix Home Life reserves the right to modify the Policy, as necessary, to
prevent the Policyowner from being considered the owner of the assets of the VUL
Account.
Phoenix Home Life intends to comply with the Diversification Regulations to
assure that the Policies continue to qualify as a life insurance contract for
Federal income tax purposes.
CHANGE OF OWNERSHIP OR INSURED OR ASSIGNMENT
Changing the Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances. Code Section
1035 provides that a life insurance contract can be exchanged for another life
insurance contract, without recognition of gain or loss, assuming that no money
or other property is received in the exchange, and that the policies relate to
the same Insured. If the surrendered policy is subject to a policy loan, this
may be treated as the receipt of money on the exchange. Phoenix Home Life
recommends that any person contemplating such actions seek the advice of a
qualified tax consultant.
OTHER TAXES
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary. Phoenix Home Life does not
make any representations or guarantees regarding the tax consequences of any
Policy with respect to these types of taxes.
VOTING RIGHTS
- -------------------------------------------------------------------------------
THE FUNDS
Phoenix Home Life will vote the Funds shares held by the Sub-accounts of
the VUL Account at any regular and special meetings of shareholders of the
Funds. To the extent required by law, such voting will be in accordance with
instructions received from the Policyowner. However, if the Investment Company
Act of 1940 or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result Phoenix Home Life
determines that it is permitted to vote the Funds shares at its own
discretion, it may elect to do so.
The number of votes that a Policyowner has the right to cast will be
determined by applying the Policyowner's percentage interest in a Sub-account to
the total number of votes attributable to the Sub-account. In determining the
number of votes, fractional shares will be recognized.
Funds shares held in a Sub-account for which no timely instructions are
received, and Funds shares which are not otherwise attributable to
Policyowners, will be voted by Phoenix Home Life in
24
<PAGE>
proportion to the voting instructions that are received with respect to all
Policies participating in that Sub-account. Voting instructions to abstain on
any item to be voted upon will be applied to reduce the votes eligible to be
cast by Phoenix Home Life.
Each Policyowner will receive proxy materials, reports, and other materials
relating to the Funds.
Phoenix Home Life 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
objective of one or more of the portfolios of the Funds or to approve or
disapprove an investment advisory contract for the Funds. In addition, Phoenix
Home Life itself may disregard voting instructions in favor of changes initiated
by a Policyowner in the investment policies or the Investment Adviser of the
Funds if Phoenix Home Life reasonably disapproves 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 Phoenix Home Life determined that
the change would have an adverse effect on the General Account because the
proposed investment policy for a portfolio may result in overly speculative or
unsound investments. In the event Phoenix Home Life does disregard voting
instructions, a summary of that action and the reasons for such action will be
included in the next periodic report to Policyowners.
PHOENIX HOME LIFE
A Policyowner (or the payee entitled to payment under a payment option if a
different person) will have the right to vote at annual meetings of all Phoenix
Home Life Policyholders for the election of members of the Board of Directors of
Phoenix Home Life and on other corporate matters, if any, where a Policyholder's
vote is taken. At meetings of all of the Phoenix Home Life Policyholders, a
Policyholder (or payee) may cast only one vote as the holder of a Policy,
irrespective of Policy Value or the number of the Policies held.
THE DIRECTORS AND EXECUTIVE OFFICERS OF
PHOENIX HOME LIFE
- -------------------------------------------------------------------------------
Phoenix Home Life is managed by its Board of Directors, the members of which
are elected by its Policyholders, including Owners of the Policies. See "Voting
Rights."
The following are the Directors and Executive Officers of Phoenix
Home Life:
DIRECTORS PRINCIPAL OCCUPATION
Sal H. Alfiero Chairman and Chief Executive
Officer, Mark IV Industries, Inc.
Amherst, New York
J. Carter Bacot Chairman and Chief Executive
Officer, The Bank of New York
New York, New York
Carol H. Baldi President, Carol H. Baldi, Inc.
New York, New York
Peter C. Browning Executive Vice President, Sunoco
Products Company
Hartsville, South Carolina
Richard N. Cooper Chairman, National Intelligence
Council, Central Intelligence Agency
McLean, Virginia; formerly
Professor of International
Economics, Harvard University
Gordon J. Davis, Esq. Partner, LeBoeuf, Lamb, Greene &
MacRae; formerly Partner, Lord Day
& Lord, Barret Smith
New York, New York
Robert W. Fiondella Chairman of the Board, President
and Chief Executive Officer, Phoenix
Home Life Mutual Insurance
Company
Hartford, Connecticut
Jerry J. Jasinowski President, National Association of
Manufacturers
Washington, D.C.
John W. Johnstone Chairman, President and Chief
Executive Officer, Olin Corporation
Norwalk, Connecticut
Marilyn E. LaMarche General Partner, Lazard Freres &
Company
New York, New York
Philip R. McLoughlin Executive Vice President and Chief
Investment Officer, Phoenix Home
Life Mutual Insurance Company
Hartford, Connecticut
Charles J. Paydos Executive Vice President, Phoenix
Home Life Mutual Insurance
Company
Hartford, Connecticut
Herbert Roth, Jr. Former Chairman, LFE Corporation
Clinton, Massachusetts
Robert F. Vizza President and Chief Executive
Officer, St. Francis Hospital
Roslyn, New York
Wilson Wilde Chairman, Executive Committee,
Hartford Steam Boiler Inspection
and Insurance Company
Hartford, Connecticut
Robert G. Wilson Former General Partner, Goldman
Sachs
New York, New York
25
<PAGE>
EXECUTIVE OFFICERS PRINCIPAL OCCUPATION
Robert W. Fiondella Chairman of the Board, President
and Chief Executive Officer
Richard H. Booth Executive Vice President, Strategic
Development; formerly President,
Traveler's Insurance Company
Philip R. McLoughlin Executive Vice President and Chief
Investment Officer
Charles J. Paydos Executive Vice President
David W. Searfoss Executive Vice President and Chief
Financial Officer
Dona D. Young Executive Vice President, Individual
Insurance and General Counsel
Kelly J. Carlson Senior Vice President, Career
Organization
Carl T. Chadburn Senior Vice President
Robert G. Chipkin Senior Vice President and Corporate
Actuary
Randall C. Giangiulio Senior Vice President, Group Sales
Joan E. Herman Senior Vice President
Edward P. Hourihan Senior Vice President, Information
Systems
Joseph E. Kelleher Senior Vice President
Gary J. Laughinghouse Senior Vice President; formerly
Senior Vice President, Home Life
Insurance Company of New York
Robert G. Lautensack, Jr. Senior Vice President
Scott C. Noble Senior Vice President, Real Estate
Frederick W. Sawyer, III Senior Vice President
Richard C. Shaw Senior Vice President, International
and Corporate Development
Simon Y. Tan Senior Vice President, Individual
Market Development
The above positions reflect the last held position in the organization
during the past five years.
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS
- -------------------------------------------------------------------------------
The assets of the VUL Account are held by Phoenix Home Life. The assets of
the VUL Account are kept physically segregated and held separate and apart from
the general account of Phoenix Home Life. Phoenix Home Life maintains records of
all purchases and redemptions of shares of the Fund.
SALES OF POLICIES
- -------------------------------------------------------------------------------
Policies may be purchased from registered representatives of W.S. Griffith &
Co., Inc. ("W. S. Griffith") licensed to sell Phoenix Home Life insurance
policies. W. S. Griffith, an indirect subsidiary of Phoenix Home Life, is
registered as a broker-dealer with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. Policies may also be purchased from other
broker-dealers registered under the Securities Exchange Act of 1934 whose
representatives are authorized by applicable law to sell Policies under terms of
agreements provided by PEPCO. Sales commissions will be paid to registered
representatives on purchase payments received by Phoenix Home Life under these
Policies. Total sales commission of a maximum of 50 percent of premiums will be
paid by Phoenix Home Life to PEPCO. To the extent that the sales charge under
the Policies is less than the sales commissions paid with respect to the
Policies, Phoenix Home Life will pay the shortfall from its general account
assets, which will include any profits it may derive under the Policies.
Phoenix Home Life through PEPCO will sponsor sales contests, training and
educational meetings and provide to all qualifying dealers, from its own profits
and resources, additional compensation in the form of trips, merchandise or
expense reimbursement. Brokers and dealers other than PEPCO may also make
customary additional charges for their services in effecting purchases, if they
notify the Fund of their intention to do so.
STATE REGULATION
- -------------------------------------------------------------------------------
Phoenix Home Life is subject to the provisions of the New York insurance
laws applicable to mutual life insurance companies and to regulation and
supervision by the New York Superintendent of Insurance. Phoenix Home Life is
also subject to the applicable insurance laws of all the other states and
jurisdictions in which it does an insurance business.
State regulation of Phoenix Home Life includes certain limitations on the
investments which it may make, including investments for the VUL Account and the
Guaranteed Interest Account. It does not include, however, any supervision over
the investment policies of the VUL Account.
REPORTS
- -------------------------------------------------------------------------------
All Policyowners will be furnished with those reports required by the
Investment Company Act of 1940 and regulations promulgated thereunder, or under
any other applicable law or regulation.
LEGAL PROCEEDINGS
- -------------------------------------------------------------------------------
The VUL Account is not engaged in any litigation. Phoenix Home Life is not
involved in any litigation that would have a material adverse effect on the
ability of Phoenix Home Life to meet its obligations under the Policies.
26
<PAGE>
LEGAL MATTERS
- -------------------------------------------------------------------------------
The organization of Phoenix Home Life, its authority to issue variable life
insurance Policies, and the validity of the Policy have been passed upon by
Richard J. Wirth, Counsel, Phoenix Home Life. Legal matters relating to the
Federal securities and income tax laws have been passed upon for Phoenix Home
Life by Jorden Burt Berenson & Johnson, LLP.
REGISTRATION STATEMENT
- -------------------------------------------------------------------------------
A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement and amendments thereto and exhibits
filed as a part thereof, to all of which reference is made for further
information concerning the VUL Account, Phoenix Home Life and the Policy.
Statements contained in this Prospectus as to the content of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof, reference is made to such instruments as filed.
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
The consolidated financial statements of Phoenix Home Life` contained
herein should be considered only as bearing upon Phoenix Home Life's ability to
meet its obligations under the Policy, and they should not be considered as
bearing on the investment performance of the VUL Account. The financial
statements of the VUL Account are for the Sub-accounts available as of the
period ended December 31, 1995.
27
<PAGE>
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 and 1994
28
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Report of Independent Accountants........................................30
Consolidated Balance Sheet...............................................31
Consolidated Statement of Operations and Surplus.........................32
Consolidated Statement of Cash Flows.....................................33
Notes to Consolidated Financial Statements............................34-58
29
<PAGE>
[logo: Price Waterhouse LLP] [logo: Price Waterhouse circle logo]
REPORT OF INDEPENDENT ACCOUNTANTS
February 14, 1996
To the Board of Directors
and Policyholders of
Phoenix Home Life Mutual Insurance Company
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and surplus and of cash flows present
fairly, in all material respects, the financial position of Phoenix Home Life
Mutual Insurance Company and its life insurance subsidiaries at December 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
30
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------
DECEMBER 31,
1995 1994
(IN THOUSANDS)
ASSETS
Bonds, at amortized cost $ 5,463,867 $ 4,976,248
First mortgage loans 963,092 1,130,882
Policy loans 1,617,872 1,585,485
Real estate, at depreciated cost 560,580 644,085
Investments in affiliates 82,945 59,569
Common stocks, at market value 247,424 161,772
Preferred stocks, at cost 73,299 75,352
Cash and short-term investments,
at amortized cost 360,874 182,404
Other invested assets 105,018 104,177
------------ ------------
Total cash and invested assets 9,474,971 8,919,974
Deferred and uncollected premiums 174,938 173,382
Due and accrued investment income 128,790 121,491
Other assets 106,691 136,800
Separate account assets 3,306,070 2,658,382
------------ ------------
Total assets $ 13,191,460 $ 12,010,029
============ ============
LIABILITIES, AVR AND SURPLUS
Reserves for future policy benefits $ 7,133,557 $ 6,748,851
Policyholders' funds at interest 611,000 649,853
Dividends to policyholders 308,636 281,227
Policy benefits in course of settlement 122,798 105,072
Accrued expenses and general liabilities 162,928 121,593
Reinsurance funds withheld liability 692,291 698,261
Interest maintenance reserve 11,872 6,043
Separate account liabilities 3,273,056 2,626,729
------------ ------------
Total liabilities 12,316,138 11,237,629
------------ ------------
Asset valuation reserve (AVR) 199,656 174,142
Policyholders' surplus 675,666 598,258
------------ ------------
Total AVR and surplus 875,322 772,400
------------ ------------
Total liabilities, AVR and surplus $ 13,191,460 $ 12,010,029
============ ============
The accompanying notes are an integral part of these statements.
31
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS AND SURPLUS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
INCOME
Premium income and annuity considerations $ 1,679,717 $ 1,594,756 $ 1,677,640
Net investment income 670,699 631,668 648,234
----------- ----------- -----------
Total income 2,350,416 2,226,424 2,325,874
----------- ----------- -----------
CURRENT AND FUTURE BENEFITS
Death benefits 271,723 268,192 264,636
Disability and health benefits 248,996 239,135 305,204
Annuity benefits and matured endowments 27,320 33,067 43,499
Surrender benefits 413,580 402,540 364,772
Interest on policy or contract funds 79,241 82,621 122,626
Settlement option payments 34,637 37,166 38,331
Increase in reserves for future policy benefits
and policyholders' funds 459,693 405,071 369,504
----------- ----------- -----------
Total current and future benefits 1,535,190 1,467,792 1,508,572
----------- ----------- -----------
OPERATING EXPENSES
Commissions and expense allowances 119,147 117,148 143,046
Premium, payroll and miscellaneous taxes 44,285 35,312 52,351
Other operating expenses 269,838 261,015 276,714
Federal income tax expense (benefit) 33,329 28,436 (2,249)
----------- ----------- -----------
Total operating expenses 466,599 441,911 469,862
----------- ----------- -----------
OPERATING GAIN BEFORE DIVIDENDS AND
REALIZED CAPITAL GAINS (LOSSES) 348,627 316,721 347,440
Dividends to policyholders (297,999) (269,357) (251,647)
----------- ----------- -----------
OPERATING GAIN AFTER DIVIDENDS AND
BEFORE REALIZED CAPITAL GAINS (LOSSES) 50,628 47,364 95,793
Realized capital gains (losses), net of income
taxes and interest maintenance reserves 9,270 (46,712) (65,835)
----------- ----------- -----------
NET INCOME 59,898 652 29,958
Unrealized capital gains, net 37,412 50,354 40,583
Other surplus changes, net 5,612 1,378 (775)
----------- ----------- -----------
NET INCREASE IN AVR AND SURPLUS 102,922 52,384 69,766
AVR AND SURPLUS, beginning of year 772,400 720,016 650,250
----------- ----------- -----------
AVR AND SURPLUS, end of year $ 875,322 $ 772,400 $ 720,016
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
32
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
CASH AND SHORT-TERM INVESTMENT SOURCES
Operations:
Premiums collected $ 1,601,408 $ 1,523,021 $ 1,620,128
Initial consideration received on
reinsurance assumed 99,851
Investment and other income received 773,021 751,074 754,049
----------- ----------- -----------
Total received 2,374,429 2,274,095 2,474,028
----------- ----------- -----------
Claims and benefits paid 1,091,725 1,304,238 1,577,792
Commissions and other expenses paid 549,155 486,766 530,075
Dividends to policyholders paid 270,749 249,701 242,192
Increase in policy loans 32,387 55,143 21,438
Federal income taxes paid (received) 9,319 (37,266) 26,720
----------- ----------- -----------
Total paid 1,953,335 2,058,582 2,398,217
----------- ----------- -----------
Cash proceeds from operations 421,094 215,513 75,811
Proceeds from sales, maturities and
scheduled repayments of investments:
Bonds 1,381,080 1,198,131 1,451,279
Stocks 329,104 347,884 767,540
First mortgage loans 186,172 160,882 731,877
Real estate and other invested assets 148,546 209,316 322,284
Non-operating increase in
policyholders' funds 47,340 52,694 75,123
----------- ----------- -----------
Total sources 2,513,336 2,184,420 3,423,914
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENT USES
Acquisitions of investments:
Bonds 1,842,467 1,756,955 2,144,981
Stocks 282,488 310,751 650,187
First mortgage loans 93,097 31,214 93,480
Real estate and other invested assets 73,482 173,988 255,255
Other uses 43,332 155,780 254,095
----------- ----------- -----------
Total uses 2,334,866 2,428,688 3,397,998
----------- ----------- -----------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 178,470 (244,268) 25,916
CASH AND SHORT-TERM INVESTMENTS, beginning of year 182,404 426,672 400,756
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENTS, end of year $ 360,874 $ 182,404 $ 426,672
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
33
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
Phoenix Home Life Mutual Insurance Company (Phoenix Home Life or the
Company) and its subsidiaries market a wide range of insurance and
investment products and services including individual participating life
insurance, variable life insurance, group life and health insurance, life
and health reinsurance, annuities, investment advisory and mutual fund
distribution services, insurance agency and brokerage operations. These
products and services are distributed among six primary segments which
include: Individual, Group Life and Health, Life Reinsurance, General Lines
Brokerage, Securities Management and Real Estate Management. See Note 9 for
segment information.
Effective June 30, 1993, Phoenix Home Life sold Home Life Financial
Assurance Corporation (HLFAC), a group life and health insurance
subsidiary. Accordingly, these financial statements include the results of
operations of this business for the six months ended June 30, 1993. See
Note 8 for additional information.
Effective January 1, 1995, the money management businesses of Phoenix Home
Life were completely transferred to Phoenix Securities Group, Inc. (Phoenix
Securities Group), an indirect wholly-owned subsidiary. Phoenix Securities
Group entered into contracts to manage the investments of the general and
separate accounts of Phoenix Home Life. On November 1, 1995, Phoenix Home
Life, through its subsidiary, PM Holdings, Inc. (PM Holdings), merged
Phoenix Securities Group into Duff & Phelps Corporation, forming Phoenix
Duff & Phelps Corporation (PDP). PM Holdings owns approximately 60% of the
outstanding PDP common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of Phoenix Home Life include the
domestic life insurance subsidiaries, Phoenix American Life Insurance
Company, American Phoenix Life and Reassurance Company, Phoenix Life
Insurance Company, PHL Variable Insurance Company and HLFAC, with
intercompany transactions eliminated. The non-insurance subsidiaries are
not consolidated in these financial statements. The significant accounting
policies which are used by Phoenix Home Life and its consolidated life
insurance subsidiaries in the preparation of the consolidated financial
statements are described below. Certain reclassifications have been made to
the 1994 and 1993 amounts to conform with the 1995 presentation.
BASIS OF PRESENTATION
Phoenix Home Life's policy is to prepare its financial statements on the
basis of accounting practices prescribed or permitted by the Insurance
Department of the State of New York. These practices are predominately
promulgated by the National Association of Insurance Commissioners (NAIC).
These practices currently are considered generally accepted accounting
principles (GAAP) for mutual life insurance companies. There were no
material practices not prescribed by the Insurance Department of the State
of New York.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
In April 1993, the Financial Accounting Standards Board issued
Interpretation No. 40, Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises, which
establishes a different definition of GAAP for mutual life insurance
companies. Under the Interpretation, financial statements of mutual life
insurance companies for periods beginning after December 15, 1995 which are
prepared on the basis of statutory accounting will no longer be
characterized as in conformity with GAAP.
34
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
Management of the Company has not finalized the effect on its December 31,
1995 financial statements of applying the Interpretation. The Company
intends to adopt the accounting changes required to present its financial
statements in conformity with GAAP in its 1996 financial statements. The
effect of the changes will be reported retroactively through restatement of
all previously issued financial statements. The cumulative effect of
adopting these changes will be included in the earliest year restated.
Effective January 1, 1995, the Company adopted the provisions of Statement
of Position 94-6 (SOP 94-6), Disclosure of Certain Significant Risks and
Uncertainties. SOP 94-6 requires disclosure about the nature of a reporting
entity's operations and the use of estimates in the preparation of
financial statements.
PREMIUM REVENUE AND RELATED EXPENSES
Generally, premium income and annuity considerations are recognized as
income over the premium paying periods of the policies or the annuity
contracts, respectively. Related underwriting expenses, commissions and
other costs of acquiring the policies and contracts are charged to
operations as incurred.
INSURANCE LIABILITIES
Benefit and loss reserves, included in reserves for future policy benefits,
are established in amounts adequate to meet estimated future obligations on
policies in force. Benefits to policyholders are charged to operations as
incurred.
Reserves for future policy benefits are determined using assumed rates of
interest, mortality and morbidity consistent with statutory requirements.
Most life insurance reserves for which the 1958 CSO and 1980 CSO mortality
tables are used as the mortality basis are determined using a modified
preliminary term reserve method. The net level premium method is used in
determining life insurance reserves based on earlier mortality tables.
Claim and loss liabilities, included in reserves for future policy
benefits, are established in amounts estimated to cover incurred losses.
These liabilities are based on individual case estimates for reported
losses and estimates of unreported losses based on past experience. Claim
and loss liabilities, net of ceded reinsurance, are not material.
As is customary practice in the insurance industry, Phoenix Home Life
assumes and cedes reinsurance as a means of diversifying underwriting risk.
The maximum amount of individual life insurance retained by the company on
any one life was increased from $5,000,000 to $8,000,000 for single life
and joint first-to-die policies and to $10,000,000 for joint last-to-die
policies on July 31, 1995, with excess amounts ceded to reinsurers. For
reinsurance ceded, the company remains liable in the event that assuming
reinsurers are unable to meet the contractual obligations.
INVESTMENTS
Investments are valued in accordance with methods prescribed by the NAIC.
Investments in bonds are generally carried at amortized cost and preferred
stocks, generally at cost.
Common stocks are carried at market value. Ownership interests in real
estate, venture capital, equity and oil and gas partnerships and joint
ventures are carried at equity in the underlying net assets. Mortgage loans
in good standing are valued at their unpaid principal balance. Prepayment
penalties are reported in investment income when received. Origination fees
and related expenses are recognized at the time of mortgage closings.
Policy loans are reported at their unpaid balances and are fully
collateralized by the cash values of the related policies.
Short-term investments are carried at amortized cost, which approximates
market value. The company considers highly liquid investments purchased
with a maturity of one year or less to be short-term investments.
35
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
The investments in affiliates represent both direct and indirect ownership
in the common and preferred stock of non-insurance subsidiaries. The common
stock of PDP is valued at the market value of shares owned less a discount
(15%), as determined by the NAIC Securities Valuation Office. The preferred
stock of PDP is valued at cost. The common stock of other unconsolidated
subsidiaries is valued at the equity in underlying net assets, determined
in accordance with GAAP. The Company's equity in the earnings of
affiliates, including PDP, is reflected in net investment income. Any
remaining adjustments such as those necessary to reflect changes in the
market value of PDP are recorded in unrealized capital gains, net.
Investment and Home Office real estate is generally valued at depreciated
cost less mortgage encumbrances. Foreclosed real estate is generally valued
at current market value at the date of foreclosure. Depreciation of real
estate is calculated using the straight line method over the estimated
lives of the assets (generally 45 years).
Realized capital gains and losses on investments are determined using the
specific identification method. Those realized capital gains and losses
resulting from interest rate changes are deferred and amortized to income
over the stated maturity of the disposed investment utilizing the Interest
Maintenance Reserve Group Method. Unrealized capital gains and losses,
resulting from changes in the difference between cost and the carrying
value of investments, are reflected in policyholders' surplus.
DERIVATIVES
Phoenix Home Life enters into interest rate swap agreements to hedge
certain variable rate investment income streams matched against fixed rate
liability streams. Such contracts generally have maturities of 7 years or
less and the counterparties are major international financial institutions.
The differential to be received on interest rate swap agreements is
recognized in investment income over the life of the agreements.
NON-ADMITTED ASSETS
In accordance with regulatory requirements, certain assets, including
unsecured loans or receivables, prepaid expenses and furniture and
equipment are not allowable and must be charged against surplus. Changes in
the write-off of these asset balances are reported in the consolidated
statement of operations and surplus in other surplus changes, net.
SEPARATE ACCOUNTS
Separate account assets are funds of separate account contractholders and
the company segregated into accounts with specific investment objectives.
The assets are generally carried at market value. An offsetting liability
is maintained to the extent of contractholders' interests in the assets.
Appreciation or depreciation of Phoenix Home Life's interest in the
separate accounts, including undistributed net investment income, is
reflected in policyholders' surplus. Contractholders' interests in net
investment income and realized and unrealized capital gains and losses on
separate account assets are not reflected in operations.
FEDERAL INCOME TAXES
Phoenix Home Life's statutory federal income tax liability is based on
estimates of federal income tax due. There are no provisions for deferred
taxes.
Phoenix Home Life and its eligible affiliated companies have elected to
file a life/nonlife consolidated federal income tax return for the tax
years ended December 31, 1995, 1994 and 1993.
36
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
POLICYHOLDERS' DIVIDENDS
Dividends on all individual coverages are provided on the basis of
estimated amounts payable in the following calendar year. Dividends on all
other coverages are provided on the basis of amounts incurred for the
current year.
APPROPRIATED SURPLUS
Phoenix Home Life's policyholders' surplus includes amounts available for
contingencies, some of which are required by state regulatory authorities.
The amounts as of December 31, 1995 and 1994 were approximately $44.5
million and $41.4 million, respectively.
EMPLOYEE BENEFIT PLANS
Phoenix Home Life sponsors pension and savings plans (the Plans) for its
employees and agents and those of its subsidiaries. Effective November 1,
1995, the Plans were reclassified from single-employer plans to
multi-employer plans in conjunction with the merger of Phoenix Securities
Group and Duff & Phelps Corporation. Former employees of Phoenix Securities
Group, who were participants of the Plans prior to the merger, have
remained as participants of the Plans. The qualified plans comply with
requirements established by the Employee Retirement Income Security Act of
1974 (ERISA) and excess benefit plans provide for that portion of pension
obligations which is in excess of amounts permitted by ERISA. Phoenix Home
Life also provides certain health care and life insurance benefits for
active and retired employees. In addition, Phoenix Home Life maintains
several deferred compensation incentive plans for its officers.
37
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES
RESERVES FOR FUTURE POLICY BENEFITS
The basis of assumptions for Phoenix Home Life's major categories of
reserves for future policy benefits and claims and settlements at December
31, are summarized below.
1995 1994
(IN THOUSANDS)
Life insurance:
American Experience, 2.5% to 4% $ 54,515 $ 59,657
1941 CSO, 2.25% to 4% 476,736 499,593
1958 CSO, 2% to 6% 2,679,897 2,867,403
1980 CSO, 5% to 6% 2,254,892 1,944,126
1980 CSO Select, 4.5% 8,522 6,932
1980 CSO, 3.5% to 4.5% 1,581,897 1,194,601
Various 71,941 64,504
---------- ----------
Total life insurance 7,128,400 6,636,816
---------- ----------
Annuities 646,171 706,038
---------- ----------
Claim and loss liabilities:
Disability 218,381 208,547
Accident and health 575,987 545,918
---------- ----------
Total claim and loss liabilities 794,368 754,465
---------- ----------
Supplementary contracts with
life contingencies 45,757 45,947
---------- ----------
All other 23,971 23,850
---------- ----------
Total before reinsurance ceded 8,638,667 8,167,116
Less - reinsurance ceded 1,505,110 1,418,265
---------- ----------
Reserves for future policy benefits $7,133,557 $6,748,851
========== ==========
38
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
WITHDRAWAL CHARACTERISTICS
Withdrawal characteristics of annuity actuarial reserves and deposit
liabilities as of December 31, (in thousands aside from percentages) are as
follows:
<TABLE>
<CAPTION>
1995 1994
% OF TOTAL % OF TOTAL
-------------------------- ------------------------
<S> <C> <C> <C> <C>
SUBJECT TO DISCRETIONARY WITHDRAWAL -
WITH ADJUSTMENT
- with market value adjustment $ 38,067 1.0 $ 90,178 3.0
- at book value less
surrender charge 145,871 4.0 296,295 8.0
- at market value 2,918,544 74.0 2,390,895 68.0
------------- ------ ---------- -----
Subtotal 3,102,482 79.0 2,777,368 79.0
SUBJECT TO DISCRETIONARY WITHDRAWAL -
WITHOUT ADJUSTMENT
- at book value (minimal or no
charge or adjustment) 594,839 15.0 428,986 12.0
Not subject to discretionary
withdrawal provision 264,454 6.0 332,454 9.0
------------- ------ ---------- -----
Total Annuity actuarial reserves
and deposit liabilities 3,961,775 100.0 3,538,808 100.0
------ -----
Less-reinsurance ceded 61,728 15,881
------------- ----------
Annuity actuarial reserves
and deposit liabilities $ 3,900,047 $3,522,927
============= ==========
</TABLE>
POLICYHOLDERS' FUNDS AT INTEREST
Phoenix Home Life's policyholders' funds at interest, principally group
pension reserves for guaranteed interest contracts and deposit
administration and immediate participation guarantee funds, are at a
weighted average interest rate of approximately 8.9% and 8.1% at December
31, 1995 and 1994, respectively.
At December 31, 1995, Phoenix Home Life had guaranteed interest contracts
which totaled $54.6 million. These were scheduled to mature as follows:
1996 - $19.8 million; 1997 - $16.5 million; 1998 - $3.0 million; 1999 -
$11.7 million; 2000 and beyond - $3.6 million.
In determining the fair market value of guaranteed interest contracts, a
discount rate equal to the appropriate treasury rate, plus 150 basis
points, was used to determine the present value of projected contractual
liability payments through final maturity. At December 31, 1995, the book
value of guaranteed interest contracts approximated fair value. The book
value and fair value of guaranteed interest contracts as of December 31,
1994 were $142.8 million and $140.3 million respectively.
39
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
POLICYHOLDERS' FUNDS AT INTEREST (CONTINUED)
The fair market value of deferred annuities and supplementary contracts
without life contingencies with an interest guarantee of one year or less
is valued at the amount of the policy reserve. In determining the fair
market value of deferred annuities and supplementary contracts without life
contingencies with interest guarantees greater than one year, a discount
rate equal to the appropriate treasury rate, plus 150 basis points, was
used to determine the present value of the projected account value of the
policy at the end of the current guarantee period. The book value, which
approximates fair market value, of deferred annuities is $625.9 million and
$660.9 million at December 31, 1995 and 1994, respectively. The fair market
value and book value of supplementary contracts without life contingencies
as of December 31, 1995 are $49.6 million and $49.4 million, respectively.
The fair market value and book value of supplementary contracts without
life contingencies as of December 31, 1994 were $45.7 million and $45.9
million, respectively.
Deposit type funds, including pension deposit administration contracts,
dividend accumulations, and other funds left on deposit not involving life
contingencies, have interest guarantees of less than one year for which
interest credited is closely tied to rates earned on owned assets. For such
liabilities, fair market value of liabilities is assumed to be equal to the
stated statutory liability balances.
REINSURANCE FUNDS WITHHELD LIABILITY
During 1993, a universal life reinsurance contract with an unaffiliated
reinsurer was amended to include certain American Experience and 1941 CSO
traditional life reserves on a 90% coinsurance basis. A reinsurance funds
withheld liability of $680.5 million and $669.0 million was held by Phoenix
Home Life at December 31, 1995 and 1994, respectively.
As described in Note 8, HLFAC was sold to an unaffiliated company during
1993. At December 31, 1995 and 1994, a reinsurance funds withheld liability
due HLFAC, as an unauthorized reinsurer, for group life and health reserves
ceded was $11.8 million and $29.2 million, respectively.
40
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
DIRECT BUSINESS WRITTEN AND REINSURANCE
Additional information on direct business written and reinsurance assumed
and ceded for the years ended December 31, is set forth below.
1995 1994 1993
(IN THOUSANDS)
Direct premiums $ 1,704,381 $ 1,693,494 $ 1,761,660
Reinsurance assumed 271,498 205,387 204,711
Reinsurance ceded (296,162) (304,125) (288,731)
------------ ------------ ------------
Net premiums $ 1,679,717 $ 1,594,756 $ 1,677,640
============ ============ ============
Direct commissions and
expense allowance $ 119,265 $ 133,138 $ 134,987
Reinsurance assumed 55,971 57,104 49,772
Reinsurance ceded (56,089) (73,094) (41,713)
------------ ------------ ------------
Net commissions and
expense allowance $ 119,147 $ 117,148 $ 143,046
============ ============ ============
Direct policy and contract
claims incurred $ 583,867 $ 591,029 $ 668,980
Reinsurance assumed 256,529 167,276 157,718
Reinsurance ceded (292,357) (217,911) (213,359)
------------ ------------ ------------
Net policy and contract
claims incurred $ 548,039 $ 540,394 $ 613,339
============ ============ ============
Direct policy and contract
claims payable $ 75,466 $ 72,037 $ 75,140
Reinsurance assumed 218,045 130,823 81,690
Reinsurance ceded (170,713) (97,788) (54,859)
------------ ------------ ------------
Net policy and contract
claims payable $ 122,798 $ 105,072 $ 101,971
============ ============ ============
Direct life insurance
in force $102,606,749 $ 95,717,768 $ 87,539,515
Reinsurance assumed 36,724,852 27,428,529 24,612,071
Reinsurance ceded (34,093,090) (24,372,415) (26,619,136)
------------ ------------ ------------
Net insurance in
force $105,238,511 $ 98,773,882 $ 85,532,450
============ ============ ============
Phoenix Home Life retroceded certain insurance coverages approximating $1.4
billion, $1.7 billion and $2.0 billion of life insurance in force at
December 31, 1995, 1994 and 1993 respectively, to an off-shore subsidiary.
Irrevocable letters of credit aggregating $7.0 million at December 31, 1995
have been arranged with United States commercial banks in favor of Phoenix
Home Life to collateralize the ceded reserves.
41
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS
Information pertaining to Phoenix Home Life's investments, net investment
income and capital gains and losses on investments follows:
BONDS, COMMON STOCKS AND PREFERRED STOCKS
Carrying values and alternate values at December 31, for investments in
bonds, preferred stocks and common stocks are set forth below. Bonds are
generally carried at amortized cost, common stocks, at market value and
preferred stocks, generally at cost. The alternate value for bonds and
preferred stocks is fair market value and for common stocks, cost.
<TABLE>
<CAPTION>
1995 1994
CARRYING ALTERNATE CARRYING ALTERNATE
VALUE VALUE VALUE VALUE
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BONDS
US Treasury bonds
and obligations of
US government
corporations and
agencies $ 572,305 $ 600,959 $ 391,801 $ 376,383
Obligations of states
and political
subdivisions:
- taxable 240,279 258,872 66,815 63,143
- non-taxable 95,043 103,157 67,688 66,666
Bonds issued by
foreign governments 59,149 63,781 45,688 39,154
Corporate bonds 2,210,972 2,404,592 2,187,444 2,112,494
Mortgage-backed
securities 2,286,119 2,363,252 2,216,812 2,030,265
----------- ----------- ----------- ------------
TOTAL BONDS $ 5,463,867 $ 5,794,613 $ 4,976,248 $ 4,688,105
=========== =========== =========== ============
COMMON STOCKS $ 247,424 $ 203,495 $ 161,772 $ 142,128
=========== =========== =========== ============
PREFERRED STOCKS $ 73,299 $ 91,400 $ 75,352 $ 75,731
=========== =========== =========== ============
</TABLE>
The fair market value on bonds include amounts for publicly traded bonds
that are based on quoted market prices, where available, or quoted market
prices of comparable instruments. Fair values of private placement bonds
are estimated using discounted cash flows that apply interest rates
currently being offered with similar terms to borrowers of similar credit
quality.
42
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
BONDS, COMMON STOCKS AND PREFERRED STOCKS (CONTINUED)
Fair values for defaulted bonds and preferred stocks are those values as
provided by the NAIC.
The carrying value and alternate value of bonds at December 31, 1995, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
CARRYING ALTERNATE
VALUE VALUE
(IN THOUSANDS)
Due in one year or less $ 35,979 $ 36,635
Due after one year through five years 562,144 590,095
Due after five years through ten years 1,266,895 1,367,640
Due after ten years 1,312,730 1,436,991
Mortgage-backed securities 2,286,119 2,363,252
------------ ------------
Total bonds $ 5,463,867 $ 5,794,613
============ ============
The carrying value of Phoenix Home Life's defaulted bonds is $7.0 million
and is net of reserves of $3.0 million.
Carrying values at December 31, for investments in mortgage-backed
securities, excluding U.S. government guaranteed investments, are set forth
below.
CARRYING VALUE
(IN THOUSANDS)
1995 1994
Planned Amortization Class $ 759,239 $ 750,533
Asset Backed 421,076 407,296
Mezzanine 354,497 398,064
Commercial 240,860 303,684
Sequential Pay 372,169 217,322
Pass Through 84,706 88,228
Other 53,572 51,685
------------ ------------
$ 2,286,119 $ 2,216,812
============ ============
Phoenix Home Life has 49% and 52% at December 31, 1995 and 1994,
respectively, in Planned Amortization Class and Mezzanine mortgage backed
securities which have reasonably predictable cash flows and a relatively
high degree of prepayment protection. Phoenix Home Life has limited
exposure in the more volatile residential derivative market such as
interest only, principal only or inverse float instruments.
43
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS
Real estate at December 31, carried net of accumulated depreciation and
encumbrances, is summarized below:
1995 1994
(IN THOUSANDS)
Investment real estate, less accumulated
depreciation of $64,279 and $59,256,
encumbrances of $2,362 and $2,380
and impairments of $23,699 and $44,249 $ 313,680 $ 389,050
Foreclosed properties, less accumulated
depreciation of $22,217 and $17,580 and
impairments of $29,571 and
$26,849 97,491 89,117
Real estate partnerships and ventures 54,378 84,831
Property used in Phoenix Home Life's
operations less accumulated depreciation
of $43,943 and $38,490 95,031 81,087
----------- -----------
Total real estate 560,580 644,085
Mortgage loans 963,092 1,130,882
----------- -----------
Total real estate and mortgage loans $ 1,523,672 $ 1,774,967
=========== ===========
The carrying value of mortgage loans includes impairment reserves for
mortgage loans in the process of foreclosure of $4.5 million and $0.6
million at December 31, 1995 and 1994, respectively.
Mortgage loans and real estate investments are diversified by property
type, location and issuer. Mortgage loans are collateralized by the related
properties and such collateral is generally 75% of the property's value at
the time the loan is made.
44
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS (CONTINUED)
Mortgage loans and real estate investments at December 31, are comprised of
the following property types and geographic regions:
MORTGAGE LOANS REAL ESTATE
1995 1994 1995 1994
(IN THOUSANDS) (IN THOUSANDS)
PROPERTY TYPE:
Home office $ 95,031 $ 81,087
Office buildings $ 191,672 $ 276,973 230,972 263,467
Retail 250,264 306,251 127,500 122,439
Apartment buildings 244,589 220,325 36,644 93,803
Industrial buildings 222,120 266,305 61,667 70,962
Other 54,447 61,028 8,766 12,327
--------- ---------- --------- ---------
Total $ 963,092 $1,130,882 $ 560,580 $ 644,085
========= ========== ========= =========
GEOGRAPHIC REGION:
Home office $ 95,031 $ 81,087
Northeast $ 233,670 $ 271,088 102,249 106,550
Southeast 250,019 233,571 94,410 101,293
North central 171,434 238,514 85,470 128,043
South central 50,819 67,303 91,670 116,191
West 257,150 320,406 91,750 110,921
--------- ---------- --------- ---------
Total $ 963,092 $1,130,882 $560,580 $ 644,085
========= ========== ======== =========
At December 31, scheduled mortgage loan maturities are as follows:
1995 1994
(IN THOUSANDS)
1995 $ 314,324
1996 $ 198,507 151,956
1997 144,030 138,914
1998 150,412 180,856
1999 102,517 116,743
Thereafter 367,626 228,089
--------- ----------
Total $ 963,092 $1,130,882
========= ==========
45
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS (CONTINUED)
The carrying value of delinquent and in process of foreclosure mortgage
loans at December 31, 1995 and 1994 is $9.4 million and $32.9 million,
respectively, and is net of impairment reserves of $4.5 million and $0.6
million, respectively.
Fair market values for mortgage loans in good standing are calculated as
the present value of scheduled payments, with the discount based upon (1)
the Treasury rate comparable for the remaining loan duration, plus (2) a
spread of between 175 and 450 basis points, depending upon the internal
quality rating of the loan. For loans in foreclosure or default, values
were determined assuming principal recovery was the lower of the loan
balance or the estimated value of the underlying property. The fair market
value of mortgage loans as of December 31, 1995 and 1994 is $955.8 million
and $1,081.0 million.
The maximum and minimum lending rates for mortgage loans during 1995 were
8.15% and 7.26%, respectively.
OTHER INVESTED ASSETS
Other invested assets at December 31, are summarized below.
1995 1994
(IN THOUSANDS)
Venture capital equity partnerships $ 50,919 $ 44,404
Stock income funds 763
Transportation and equipment leases 47,810 48,318
Oil and gas partnerships 4,305 8,575
Miscellaneous 1,984 2,117
---------- ----------
Total other invested assets $ 105,018 $ 104,177
========== ==========
46
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
INVESTMENT GUARANTEES, INTEREST RATE SWAPS, LINES OF CREDIT AND COMMITMENTS
Phoenix Home Life has various investment guarantees with regard to certain
subsidiary and partnership activities which totalled $310.9 million and
$242.8 million at December 31, 1995 and 1994, respectively.
Phoenix Home Life adopted the disclosure requirements of FAS 119 Disclosure
About Derivative Financial Instruments and Fair Value of Financial
Instruments. The definition of derivative financial instrument excludes all
on-balance sheet receivables and payables, including those that derived
their value or contractually required cash flows from the price of some
other security or index, such as mortgage-backed securities.
Phoenix Home Life enters into interest rate swap agreements, generally
having maturities of 7 years or less, to hedge certain variable rate
investment income streams matched against fixed rate liability streams. The
notional amounts of these instruments were $18.0 million and $34.0 million
at December 31, 1995 and 1994, respectively. Average received and average
pay rates were 9.01% and 5.92%, for 1995.
The increase in net investment income related to interest rate swap
contracts was $1.2 million, $3.1 million and $3.5 million for the years
ended December 31, 1995, 1994 and 1993, respectively. The fair value of
these interest rate swap agreements as of December 31, 1995 and 1994 was
not material.
The company has also guaranteed an interest rate swap agreement entered
into by a subsidiary. This agreement has the effect of the subsidiary
paying a fixed interest rate on a notional amount of $175 million of the
subsidiary's debt.
These agreements do not require the exchange of underlying principal
amounts, and accordingly the company's maximum exposure to credit risk is
the difference in interest payments exchanged. Management of Phoenix Home
Life considers the likelihood of any material loss on these guarantees or
interest rate swaps to be remote.
Phoenix Home Life has unused lines of credit with commercial banks totaling
$176.9 million at December 31, 1995.
At December 31, 1995, the company has leases covering certain facilities,
property and equipment which in no year exceeded $16.7 million and which
approximate $45.4 million in total. Such commitments extend through the
year 2000.
47
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
NON-INCOME PRODUCING MORTGAGE LOANS AND BONDS
The net carrying values of first mortgage loans and bonds which were
non-income producing for the preceding 12 months as of December 31, are as
follows:
1995 1994
(IN THOUSANDS)
First mortgage loans $ 3,805 $ 18,371
Bonds 322
---------- -----------
Total non-income producing mortgage loans
and bonds $ 3,805 $ 18,693
========== ===========
SEPARATE ACCOUNTS
Phoenix Home Life's investments in its separate accounts at December 31,
are summarized below.
<TABLE>
<CAPTION>
1995 1994
CARRYING CARRYING
VALUE COST VALUE COST
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Pooled separate accounts $ 22,575 $ 4,646 $ 26,030 $ 6,125
Closed end real estate account 4,597 4,460 5,623 6,314
Variable accumulation account 5,842 5,000
--------- -------- --------- --------
Total investments in
separate accounts $ 33,014 $ 14,106 $ 31,653 $ 12,439
========= ======== ========= ========
</TABLE>
Phoenix Home Life's investments at December 31, 1995 in the pooled separate
accounts represent seed money which was necessary to commence their
operations. Phoenix Home Life has a 10% investment in a separate account
which invests primarily in real estate properties and mortgage loans, a
100% investment in a separate account which invests in guaranteed interest
contracts with non-affiliates and a .4% investment in the real estate
sub-fund of a variable accumulation account.
POLICY LOANS
Fair market value of policy loans, $1,658 million and $1,474 million at
December 31, 1995 and 1994, respectively, was estimated as the present
value of loan interest and policy loan repayments discounted at the ten
year treasury rate. Loan repayments were assumed only to occur as a result
of anticipated policy lapses, and it was assumed that annual policy loan
interest payments were made at the guaranteed loan rate less 17.5 basis
points at December 31, 1995 and 1994, respectively. Discounting was at the
ten year treasury rate, except for policy loans with a variable policy loan
rate. Variable policy loans have an interest rate that is reset annually
based upon market rates and therefore, book value is a reasonable
approximation of fair market value.
48
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
NET INVESTMENT INCOME
The principal components of net investment income for the years ended
December 31, are set forth below.
<TABLE>
<CAPTION>
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
Interest on bonds $ 419,859 $ 380,345 $ 322,378
Interest on first mortgage loans 92,283 109,457 176,687
Interest on policy loans 115,055 105,678 104,002
Interest on short-term investments 21,974 11,673 14,213
Income on real estate, net of expenses
of $79,565, $82,085 and $59,918 20,243 16,478 14,470
Equity in income of affiliates 17,850 17,050 30,368
Dividends on common stocks 1,787 3,312 2,303
Dividends on preferred stocks 6,886 7,378 8,848
Net loss from other invested
assets (1,239) (1,046) (835)
Miscellaneous income 2,110 2,258 1,243
Amortization of the interest
maintenance reserve 1,824 1,644 2,425
Less:
Interest expenses 164 161 313
Investment expenses 27,769 22,398 27,555
---------- ---------- ----------
Net investment income $ 670,699 $ 631,668 $ 648,234
========== ========== ==========
</TABLE>
Income on real estate includes $18.3 million for Phoenix Home Life's
occupancy of its own properties for 1995. An offsetting amount is included
in investment and operating expenses.
Interest income of $1.0 million was not accrued on certain delinquent first
mortgage loans and defaulted bonds at December 31, 1995.
49
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
CAPITAL GAINS AND LOSSES
The principal components of capital gains and (losses) on investments
reflected in surplus for the years December 31, are set forth below.
<TABLE>
<CAPTION>
REALIZED UNREALIZED
1995 1994 1993 1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Bonds $ 9,865 $ (30,299) $ 15,923 $ (8,560) $ 6,967 $ 11,968
First mortgage loans (43,377) (7,149) (84,441) (1,548) (4,292) 9,674
Real estate (62,685) (29,612) (50,889) 49,923 35,856 9,067
Common stock of
consolidated subsidiaries 50,496
Investments in affiliates 122,452 (28,808) 6,000 (7,002)
Common stocks 27,828 (8,877) 20,178 23,552 2,427 7,434
Preferred stocks 515 1,302 (2,287) 153 5,963
Other invested assets 5,344 3,400 4,686 1,865 (165) 4,263
Foreign exchange (1,948) 1,096 1,432 (784)
Miscellaneous 6,066 (8,405) 88 (108) 1,976
--------- --------- ---------- ---------- --------- ---------
66,008 (81,588) (46,246) 37,412 50,354 40,583
Transfer to interest
maintenance reserve (7,276) 19,338 (11,051)
Income tax (expense) benefits (49,462) 15,538 (8,538)
--------- --------- ---------- --------- --------- ---------
Net capital gains (losses) $ 9,270 (46,712) $ (65,835) $ 37,412 $ 50,354 $ 40,583
========= ========= ========== ========= ========= =========
</TABLE>
Proceeds from sales of Phoenix Home Life's investments in bonds were $1.4
billion, $1.2 billion and $1.3 billion during 1995, 1994 and 1993. Gross
gains of $29.6 million, $15.2 million and $42.1 million and gross losses of
$19.7 million, $45.5 million and $26.2 million were realized on these sales
during 1995, 1994 and 1993.
50
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
CAPITAL GAINS AND LOSSES (CONTINUED)
Gross unrealized gains and losses on bonds at December 31, not reflected in
surplus, are as follows:
<TABLE>
<CAPTION>
UNREALIZED GAINS UNREALIZED LOSSES
1995 1994 1995 1994
(IN THOUSANDS)
<S> <C> <C> <C> <C>
US Treasury bonds and
obligations of US
government corporations
and agencies $ 29,682 $ 928 $ (1,028) $ (16,346)
Obligations of states and
political subdivisions:
- taxable 18,593 1 (3,673)
- non-taxable 8,257 619 (143) (1,641)
Bonds issued by foreign
governments 6,436 (1,804) (6,534)
Corporate bonds 198,684 34,216 (5,064) (109,166)
Mortgage-backed
securities 96,506 13,686 (19,373) (200,233)
---------- --------- --------- ----------
Total $ 358,158 $ 49,450 $ (27,412) $ (337,593)
========== ========= ========= ==========
</TABLE>
5. INVESTMENTS IN AFFILIATES
PM Holdings is a wholly-owned subsidiary organized to hold investments in
companies primarily engaged in the businesses of life insurance, mortgage
loan financing, investment advisory and mutual fund distribution services,
real estate and insurance agency and brokerage operations. As previously
disclosed, the life insurance subsidiaries of PM Holdings, which are
included on a consolidated basis in these financial statements, include the
following: Phoenix American Life Insurance Company, American Phoenix Life
and Reassurance Company, Phoenix Life Insurance Company and PHL Variable
Insurance Company. PM Holding's major non-life subsidiaries include:
Phoenix Realty Group, Inc., American Phoenix Corporation, Phoenix Founders,
Inc., W.S. Griffith & Company and Financial Administrative Services, Inc.
In addition, PM Holdings owns approximately 60% of the outstanding Phoenix
Duff & Phelps Corporation common stock.
51
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
5. INVESTMENTS IN AFFILIATES (CONTINUED)
Prior to July 1, 1993, HLFAC was a wholly-owned subsidiary of Phoenix Home
Life. As described in Note 8, effective June 30, 1993, HLFAC was sold to an
unaffiliated company, Community Mutual Insurance Company.
American Phoenix Life and Reassurance Company (formerly Phoenix Life and
Reassurance Company), previously a wholly-owned subsidiary of Phoenix Home
Life, organized for the purpose of holding and administering
non-participating reinsurance business, became a wholly-owned subsidiary of
PM Holdings on February 28, 1994.
Phoenix Life Insurance Company, formerly a wholly-owned subsidiary of
Phoenix Home Life, incorporated on June 3, 1992, became a wholly-owned
subsidiary of PM Holdings on February 28, 1994. On December 30, 1994, the
Company obtained licensing in the State of Connecticut and plans to market
interest sensitive products in the future.
PHL Variable Insurance Company was incorporated under the laws of
Connecticut on June 1, 1994 and has obtained licensing in several states
and began offering variable insurance products directly to the public in
1995.
During 1992 through 1994, Phoenix Mutual Mortgage Funding Corporation
(PMMFC), a former non-life subsidiary of PM Holdings, exercised its option
to double its sinking fund payments on existing debt. On September 12,
1994, PMMFC retired this debt and was liquidated.
On November 1, 1995, Phoenix Securities Group, Inc. (formerly PHL Mutual
Funds Holdings, Inc.), a wholly-owned subsidiary of PM Holdings merged with
Duff & Phelps Corporation. The merged company was named Phoenix Duff &
Phelps Corporation (PDP). PM Holdings owns approximately 60% of the
outstanding common stock of the new PDP. The investment in PDP common stock
is recorded at the market value of shares owned less a discount (15%), as
determined by the NAIC Securities Valuation Office.
PM Holding's consolidated entities invest primarily in bonds, first
mortgage loans and real estate. These investments are recorded using the
same accounting practices as the parent.
52
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
5. INVESTMENTS IN AFFILIATES (CONTINUED)
Summarized financial information of the non-insurance indirect subsidiaries
of Phoenix Home Life at December 31, and for the years ended is as follows:
1995 1994
(IN THOUSANDS)
BALANCE SHEET
Assets:
Common stock in affiliate $ 154,275
Preferred stock in affiliate 35,000
Other investments 67,010 $ 83,160
Other assets 138,374 142,684
--------- ---------
Total assets $ 394,659 $ 225,844
========= =========
Liabilities:
Notes and bonds payable $ 250,631 $ 98,066
Other liabilities 61,083 67,209
--------- ---------
Total liabilities 311,714 165,275
Stockholder's equity 82,945 60,569
--------- ---------
Total liabilities and
stockholder's equity $ 394,659 $ 225,844
========= =========
SUMMARY OF OPERATIONS 1995 1994 1993
(IN THOUSANDS)
Revenue:
Commissions and fees $ 137,492 $ 95,419 $110,576
Net investment and other income 49,155 37,740 27,166
--------- --------- --------
Total revenue 186,647 133,159 137,742
--------- --------- --------
Expenses:
Commission expenses 37,195 14,298 33,159
Interest and other expenses 132,485 100,424 81,810
Federal income tax expense 5,654 8,519 5,455
--------- --------- --------
Total expenses 175,334 123,241 120,424
--------- --------- --------
OPERATING INCOME BEFORE REALIZED
CAPITAL GAIN (LOSS) AND
MINORITY INTEREST 11,313 9,918 17,318
Realized capital gain (loss),
net of income taxes 126,852 (1,400) 11,263
Minority interest (271) 15 273
--------- --------- --------
Net income $ 137,894 $ 8,533 $ 28,854
Capital (returned to) contributed
by parent, net (59,335) 1,134 (15,067)
Other surplus changes (56,183) 28
Stockholder's equity,
beginning of year 60,569 50,874 37,087
--------- --------- --------
Stockholder's equity, end of year $ 82,945 $ 60,569 $ 50,874
========= ========= ========
53
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
6. FEDERAL INCOME TAXES
The federal income tax provision for 1995, 1994 and 1993 totalled $82.8
million, $12.9 million and $6.3 million, respectively, which included tax
expense or (benefits) applicable to realized capital gains or losses of
$49.5 million, $(15.5) million and $8.5 million. Significant adjustments to
book net income before federal income taxes were made for the differential
earnings rate, reduction in the policyholder dividends deduction and to
reflect the tax bases for investments, life insurance reserves, dividend
received deduction and deferred policy acquisition costs. Phoenix Home Life
had a net current federal income tax payable of $56.7 million and $20.3
million at December 31, 1995 and 1994, respectively. The federal income tax
payable is included in accrued expenses and general liabilities at December
31, 1995 and 1994.
The Internal Revenue Service (IRS) is currently examining the Company's tax
returns for 1991-1994. Management does not believe that there will be a
material adverse effect on the financial statements as a result of pending
tax matters.
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS
The company recognizes the costs of postretirement benefits other than
pensions for current retirees and fully eligible or vested employees at
transition. This liability is measured by discounting the projected future
costs of health benefits based on an estimate of health care cost trend
rates. Prior to the adoption of this standard, the company recognized such
costs as an expense when paid. The company has elected the deferred
recognition method of adoption where the postretirement benefit obligation
will be amortized as a component of net periodic cost over a period of 20
years.
Phoenix Home Life provides certain health care and life insurance benefits
for retired employees. A substantial portion of the company's employees may
become eligible for these benefits upon retirement. The health care and
life insurance plans generally require retiree contributions. These
contributions are based on years of service with the company.
The expense related to the company's postretirement benefit plans is $7.4
million and $6.8 million for the years ended December 31, 1995 and 1994,
respectively.
54
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
The following table shows the plan's funded status at December 31, 1995
(in thousands):
Accumulated postretirement benefit obligation
other than pensions (APBO):
Retirees $ 37,900
Fully eligible active plan participants 10,500
---------
Total APBO 48,400
Unrecognized net gain 6,600
Unrecognized transition obligation (40,200)
---------
Accrued postretirement benefit liability $ 14,800
=========
The accrued postretirement benefit liability is included in accrued
expenses and general liabilities. The estimated accumulated APBO for
non-vested employees at December 31, 1995 was $25.0 million. The net 1995
periodic postretirement benefit cost is included in other operating
expenses and consisted of the following components (in thousands):
Estimated eligibility cost - 1995 $ 1,400
Interest cost on APBO 3,700
Amortization of transition obligation over 20 years 2,400
Other (100)
---------
Net periodic postretirement benefit cost $ 7,400
=========
Determination of the accumulated postretirement benefit obligation was
based on an assumed discount rate of 8% and a long-term compensation
increase of 5%. The assumed rate of future increases in per capita cost of
health benefits (the health care cost trend) was 11% in 1996 grading to an
ultimate rate of 5.5% in 2002. The assumed health care cost trend reflects
the company's current claim experience and management's expectation that
future rates of growth will decline. Increasing the health care cost trend
by one percentage point for each future year would increase the accumulated
other postretirement benefit obligation by $2.3 million and the annual
service and interest cost by $0.3 million before taxes. Gains and losses
that occur because actual experience differs from that assumed are
reflected in unrealized gain and amortized over the average future service
period of employees.
As of January 1, 1995, Phoenix Home Life's defined benefit plan, the
Phoenix Home Life Mutual Insurance Company Employee Pension Plan (Employee
Pension Plan), was overfunded by approximately $2.2 million as measured
using the plan's then projected benefit obligation.
55
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
The Company recognizes the costs and obligations of severance, disability,
life insurance and health care benefits when paid to inactive or former
employees.
Phoenix Home Life's charge to expense for retirement benefit plans for the
year ended December 31, 1995 and 1994 was approximately $6.0 million and
$8.2 million, respectively. Certain pension costs incurred by Phoenix Home
Life are allocated to its subsidiaries.
The estimated funded status of the Employee Pension Plan as of January 1,
1995 is summarized as follows (in thousands):
Actuarial present value of benefit obligations:
Vested benefit obligation $ 160,592
Present value of non-vested benefits 15,251
---------
Accumulated benefit obligation 175,843
Present value of future salary increases 37,793
---------
Projected benefit obligation $ 213,636
=========
Plan assets at fair value at January 1 $ 215,858
=========
Plan assets at fair value in excess of
projected benefit obligation $ 2,222
=========
For the Employee Pension Plan, the present value of accumulated plan
benefits was determined based on the actual salary and service history of
the covered employees as of the date of the computation. The actuarial
present value of the plan liabilities, which considers future estimated
salary increases and other factors, is approximately $213.6 million at
January 1, 1995, the date of the most recent actuarial valuation. Actuarial
amounts were determined using 8% assumed rates of return for the qualified
employees' plan.
The assets of the company's pension and savings plans at December 31, 1994,
were invested as follows (in thousands):
Separate accounts of Phoenix Home Life $ 49,142
Phoenix Series Fund sponsored by
Phoenix Home Life 113,654
Phoenix Multi-Sector Fixed Income Fund
sponsored by Phoenix Home Life 8,683
Phoenix Worldwide Opportunities Fund
sponsored by Phoenix Home Life 6,735
Phoenix Asset Reserve
sponsored by Phoenix Home Life 700
Pension Plan Trust Account 165,664
Cash Management Account 1,052
---------
Total invested assets of pension savings plans $ 345,630
=========
56
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
8. DISPOSITION OF HLFAC
Effective June 30, 1993, HLFAC was sold to an unaffiliated company,
Community Mutual Insurance Company, resulting in a pre-tax realized capital
gain of $50.5 million. Results on a divisional basis for the period from
January 1, 1993 through June 30, 1993, which are included in the
consolidated statement of operations, are as follows (in thousands):
1993
Net premiums $ 171,822
Net investment income 6,437
-----------
Total income 178,259
-----------
Policy benefits 105,024
Expenses 56,000
-----------
Total benefits and expenses 161,024
-----------
Gain from operations before federal income taxes $ 17,235
===========
9. SEGMENT INFORMATION
Phoenix Home Life operates principally in six segments: Individual, Group
Life and Health, Life Reinsurance, General Lines Brokerage, Securities
Management and Real Estate Management.
Summarized financial information with respect to the business segments for
the years ended December 31, was as follows (in thousands):
1995 1994 1993
REVENUES
Individual $ 1,680,641 $ 1,595,725 $ 1,542,755
Group Life and Health 411,076 405,564 377,432
Life Reinsurance 125,657 93,346 97,177
General Lines Brokerage 23,796 21,949 14,687
Securities Management
(including PDP operations) 95,684 97,401 101,853
Real Estate Management 13,562 12,439 13,711
Other operations (HLFAC) 178,259
----------- ----------- -----------
Total revenues $ 2,350,416 $ 2,226,424 $ 2,325,874
=========== =========== ===========
57
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
9. SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
INCOME BEFORE REALIZED CAPITAL GAINS
(LOSSES), DIVIDENDS AND INCOME TAXES
Individual $ 333,524 $ 294,987 $ 260,645
Group Life and Health 17,401 17,451 28,974
Life Reinsurance 8,829 7,355 4,028
General Lines Brokerage 2,633 2,306 755
Securities Management
(including PDP operations) 19,753 22,431 33,816
Real Estate Management (184) 627 (262)
Other operations (HLFAC) 17,235
Total income before realized capital gains
(losses), dividends and income taxes $ 381,956 $ 345,157 $ 345,191
=========== =========== ===========
1995 1994
IDENTIFIABLE ASSETS
Individual $11,519,751 $10,501,598
Group Life and Health 506,712 461,540
Life Reinsurance 176,520 174,337
General Lines Brokerage 112,348 33,534
Securities Management 621,150 604,968
Real Estate Management 254,979 234,052
Total identifiable assets $ 13,191,460 $12,010,029
============ ===========
</TABLE>
10. CONTINGENCIES
The Company is a defendant in various legal actions arising from the normal
conduct of business. Management believes that, after consideration of
provisions made in the Company's financial statements, none of the actions
will have a material effect on the Company's financial position.
58
<PAGE>
PHOENIX HOME LIFE VARIABLE
UNIVERSAL LIFE ACCOUNT
FINANCIAL STATEMENTS
DECEMBER 31, 1995
59
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Assets
Investments at cost $13,959,460 $110,250,111 $ 6,357,472
============ ========= ==========
Investment in The Phoenix Edge Series Fund, at market 13,959,460 118,022,065 6,705,121
------------ --------- ----------
Total assets 13,959,460 118,022,065 6,705,121
Liabilities
Accrued expenses to related party 7,919 72,685 4,346
------------ --------- ----------
Net assets $13,951,541 $117,949,380 $6,700,775
============ ========= ==========
Accumulation units outstanding--Flex Edge 10,229,951 36,538,624 3,484,452
============ ========= ==========
Accumulation units outstanding--Joint Edge 296,269 1,113,293 95,464
============ ========= ==========
Unit value $ 1.325408 $ 3.132626 $ 1.871769
============ ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Assets
Investments at cost $19,900,213 $19,529,649 $ 12,424,740
============ ========= ==========
Investment in The Phoenix Edge Series Fund, at market 20,261,898 20,759,895 13,725,016
------------ --------- ----------
Total assets 20,261,898 20,759,895 13,725,016
Liabilities
Accrued expenses to related party 12,619 12,722 8,541
------------ --------- ----------
Net assets $20,249,279 $20,747,173 $13,716,475
============ ========= ==========
Accumulation units outstanding--Flex Edge 9,236,346 14,435,212 9,521,556
============ ========= ==========
Accumulation units outstanding--Joint Edge 194,742 555,114 400,572
============ ========= ==========
Unit value $ 2.147078 $ 1.384037 $ 1.382412
============ ========= ==========
</TABLE>
60
<PAGE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- ---------- ------------
<S> <C> <C> <C>
Investment income
Distributions $656,913 $ 963,473 $ 456,389
Expenses
Mortality and expense risk charges 94,526 688,907 42,067
------------ -------- ----------
Net investment income 562,387 274,566 414,322
------------ -------- ----------
Net realized gain from share transactions -- 4,178 1,800
Net realized gain distribution from Fund -- 12,514,179 --
Net unrealized appreciation on investment -- 9,293,459 651,393
------------ -------- ----------
Net gain on investments -- 21,811,816 653,193
------------ -------- ----------
Net increase in net assets resulting from operations $562,387 $22,086,382 $1,067,515
============ ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Investment income
Distributions $ 554,634 $ 65,980 $ 394,319
Expenses
Mortality and expense risk charges 130,115 141,161 88,010
------------ --------- ----------
Net investment income (loss) 424,519 (75,181) 306,309
------------ --------- ----------
Net realized gain (loss) from share transactions 1,051 (16,995) 527
Net realized gain distribution from Fund 1,221,316 380,538 272,172
Net unrealized appreciation on investment 873,761 1,259,164 1,647,649
------------ --------- ----------
Net gain on investments 2,096,128 1,622,707 1,920,348
------------ --------- ----------
Net increase in net assets resulting from operations $2,520,647 $ 1,547,526 $2,226,657
============ ========= ==========
</TABLE>
61
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
--------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income $ 562,387 $ 274,566 $ 414,322
Net realized gain -- 12,518,357 1,800
Net unrealized appreciation -- 9,293,459 651,393
------------- --------- ----------
Net increase in net assets resulting from operations 562,387 22,086,382 1,067,515
------------- --------- ----------
From accumulation unit transactions
Participant deposits 23,196,295 34,460,166 1,851,602
Participant transfers (19,227,932) 15,470,116 884,223
Participant withdrawals (2,331,740) (12,409,600) (772,642)
------------- --------- ----------
Net increase in net assets resulting from participant
transactions 1,636,623 37,520,682 1,963,183
------------- --------- ----------
Net increase in net assets 2,199,010 59,607,064 3,030,698
Net assets
Beginning of period 11,752,531 58,342,316 3,670,077
------------- --------- ----------
End of period $ 13,951,541 $117,949,380 $6,700,775
============= ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 424,519 $ (75,181) $ 306,309
Net realized gain (loss) 1,222,367 363,543 272,699
Net unrealized appreciation 873,761 1,259,164 1,647,649
------------ --------- ----------
Net increase in net assets resulting from operations 2,520,647 1,547,526 2,226,657
------------ --------- ----------
From accumulation unit transactions
Participant deposits 5,457,071 7,548,871 3,800,064
Participant transfers 2,208,588 (399,608) 581,841
Participant withdrawals (2,158,665) (2,474,965) (1,761,880)
------------ --------- ----------
Net increase in net assets resulting from participant
transactions 5,506,994 4,674,298 2,620,025
------------ --------- ----------
Net increase in net assets 8,027,641 6,221,824 4,846,682
Net assets
Beginning of period 12,221,638 14,525,349 8,869,793
------------ --------- ----------
End of period $20,249,279 $20,747,173 $13,716,475
============ ========= ==========
</TABLE>
62
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1994
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
--------------- ---------- ------------
<S> <C> <C> <C>
From operations
Net investment income $ 269,315 $ 294,375 $ 218,172
Net realized gain (loss) -- 3,213,016 (3,967)
Net unrealized depreciation -- (3,486,259) (392,992)
------------- -------- ----------
Net increase (decrease) in net assets resulting from
operations 269,315 21,132 (178,787)
------------- -------- ----------
From accumulation unit transactions
Participant deposits 21,682,948 26,040,831 1,844,201
Participant transfers (14,299,239) 7,532,883 23,923
Participant withdrawals (2,824,234) (7,655,667) (503,930)
------------- -------- ----------
Net increase in net assets resulting from participant
transactions 4,559,475 25,918,047 1,364,194
------------- -------- ----------
Net increase in net assets 4,828,790 25,939,179 1,185,407
Net assets
Beginning of period 6,923,741 32,403,137 2,484,670
------------- -------- ----------
End of period $ 11,752,531 $58,342,316 $3,670,077
============= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 227,212 $ (56,510) $ 212,403
Net realized gain 343,918 305,474 61,943
Net unrealized depreciation (771,056) (732,849) (556,387)
------------ --------- ----------
Net decrease in net assets resulting from operations (199,926) (483,885) (282,041)
------------ --------- ----------
From accumulation unit transactions
Participant deposits 5,110,267 6,568,479 3,993,661
Participant transfers 1,128,647 4,843,273 149,204
Participant withdrawals (1,493,881) (1,519,024) (1,268,580)
------------ --------- ----------
Net increase in net assets resulting from participant
transactions 4,745,033 9,892,728 2,874,285
------------ --------- ----------
Net increase in net assets 4,545,107 9,408,843 2,592,244
Net assets
Beginning of period 7,676,531 5,116,506 6,277,549
------------ --------- ----------
End of period $12,221,638 $14,525,349 $ 8,869,793
============ ========= ==========
</TABLE>
63
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
<TABLE>
<CAPTION>
Money Market Sub-Account Growth Sub-Account
----------------------------- --------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
------------ -------------- ------------ ----------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.263974 $ 1.226981 $2.412541 $ 2.396670
Income from investment operations
Net investment income 0.061434 0.036993 0.008952 0.221088
Net realized and unrealized gain
(loss) -- -- 0.711133 (0.205217 )
Total from investment operations 0.061434 0.036993 0.720085 0.015871
---------- ------------ ---------- ---------------
Unit value, end of period $ 1.325408 $ 1.263974 $3.132626 $ 2.412541
========== ============ ========== ===============
Total return 4.86% 3.01% 29.85% 0.66%
Net assets, end of period (000) $13,952 $11,753 $117,949 $58,342
</TABLE>
<TABLE>
<CAPTION>
Bond Sub-Account Total Return Sub-Account
------------------------- ------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
-------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $1.527250 $ 1.628351 $1.830914 $ 1.871886
Income from investment operations
Net investment income 0.133714 0.123373 0.053247 0.046564
Net realized and unrealized gain (loss) 0.210805 (0.224474) 0.262917 (0.087536 )
------ ----------- ---------- -------------
Total from investment operations 0.344519 (0.101101) 0.316164 (0.040972 )
------ ----------- ---------- -------------
Unit value, end of period $1.871769 $ 1.527250 $2.147078 $ 1.830914
====== =========== ========== =============
Total return 22.56% (6.21)% 17.27% (2.19)%
Net assets, end of period (000) $6,701 $3,670 $20,249 $12,222
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
<TABLE>
<CAPTION>
International Sub-Account Balanced Sub-Account
--------------------------------- -----------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.273020 $ 1.282423 $1.129669 $ 1.171933
Income from investment operations
Net investment income (loss) (0.005393 ) (0.001098 ) 0.034768 0.031829
Net realized and unrealized gain (loss) 0.116410 (0.008305 ) 0.217975 (0.074093 )
----------- --------------- ---------- ------------
Total from investment operations 0.111017 (0.009403 ) 0.252743 (0.042264 )
----------- --------------- ---------- ------------
Unit value, end of period $ 1.384037 $ 1.273020 $1.382412 $ 1.129669
=========== =============== ========== ============
Total return 8.72% (0.73)% 22.37% (3.61)%
Net assets, end of period (000) $20,747 $14,525 $13,716 $8,870
</TABLE>
64
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note 1--Organization:
Phoenix Home Life Variable Universal Life Account (the Account) is a
separate investment account of Phoenix Home Life Mutual Insurance Company
(Phoenix Home Life). The Account is offered as Flex Edge for individual
variable life insurance and as Joint Edge for variable first-to-die joint
life insurance. The account is organized as a unit investment trust under the
Investment Company Act of 1940, as amended, and currently consists of six
Sub-accounts, which invest in six of the available portfolios of The Phoenix
Edge Series Fund (the Fund). The Real Estate Series is currently not
available to the Account.
Each series has distinct investment objectives. The Money Market Series is
a short-term investment fund, the Growth Series is a growth common stock
fund, the Bond Series is a long-term debt fund, the Total Return Series
invests in equity securities and long and short-term debt, the International
Series invests primarily in internationally diversified equity securities and
the Balanced Series is a balanced fund which invests in growth stocks and at
least 25% of its assets in fixed income securities. Contract holders may also
direct the allocation of their investments between the account and the
Guaranteed Interest Account of the general account of Phoenix Home Life.
Note 2--Significant Accounting Policies:
Certain reclassifications have been made to prior year's amounts to conform
with the 1995 presentation.
A. Valuation of Investments: Investments are made exclusively in the Fund and
are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Fund as well as gains and losses
on sales of shares in the fund determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix Home Life
and under current federal income tax law, income arising from the Account is
not taxed since reserves are established equivalent to such income.
Therefore, no provision for related federal or state income taxes is
required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of The Phoenix Edge Series Fund:
Purchases and sales of shares of the Fund for the year ended December 31,
1995 aggregated the following:
<TABLE>
<CAPTION>
Sub-Account Purchases Sales
- ------------- ---------- ------------
<S> <C> <C>
Money Market $15,358,015 $13,127,029
Growth 52,656,500 2,386,549
Bond 3,150,173 775,101
Total Return 7,932,811 790,863
International 7,725,084 2,760,274
Balanced 4,832,165 1,642,462
</TABLE>
Note 4--Participant Accumulation Unit Transactions (in units):
<TABLE>
<CAPTION>
Sub-Account
-----------------------------------------------------------------------------------
Money Total
Market Growth Bond Return International Balanced
----------- ---------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Flex Edge:
Participant deposits 16,530,006 11,865,242 1,056,465 2,618,013 5,503,623 2,914,431
Participant transfers (13,776,782) 5,246,964 514,311 1,064,109 (387,514) 438,017
Participant withdrawals (1,666,716) (4,223,772) (441,021) (1,027,984) (1,776,981) (1,344,173)
Joint Edge:
Participant deposits 1,348,536 507,471 38,054 100,104 269,791 129,152
Participant transfers (1,073,563) 295,473 21,958 48,759 87,491 11,893
Participant withdrawals (133,344) (222,390) (12,913) (47,069) (116,238) (78,868)
</TABLE>
Note 5--Policy Loans:
Transfers are made to Phoenix Home Life's general account as a result of
policy loans. Contract provisions allow contract owners to borrow up to 90%
of a policy's cash value with an interest rate set in accordance with the
contract due and payable on each policy anniversary. At the time a loan is
granted, an amount equivalent to the amount of the loan is transferred from
the Account to Phoenix Home Life's general account as collateral for the
outstanding loan. These transfers are included in participant withdrawals in
the accompanying financial statements. Amounts in the general account are
credited with interest at 6%. Loan repayments result in a transfer of
collateral back to the Account.
Note 6--Investment Advisory Fees and Related Party Transactions:
Phoenix Home Life and its indirect, less than wholly owned subsidiary,
Phoenix Equity Planning Corporation, a registered broker/dealer in
securities, provide all services to the Account.
The cost of insurance is charged to each policy on a monthly basis by a
withdrawal of participant units prorated among the elected Sub- accounts. The
amount charged to each policy depends on a number of variables including sex,
age and risk class as well as the death benefit and cash value of the policy.
Such costs aggregated $14,392,712 during the year ended December 31, 1995.
Upon partial surrender of a policy a surrender fee of the lesser of $25 or
2% of the partial surrender amount paid and a partial surrender charge equal
to a pro rata portion of the applicable surrender charge is deducted from the
policy value and paid to Phoenix Home Life. Partial surrender fees paid
during the year ended December 31, 1995 were $853,600.
65
<PAGE>
Phoenix Equity Planning Corporation is the principal underwriter and
distributor of the Account. Phoenix Equity Planning Corporation is reimbursed
for its distribution and underwriting expenses by Phoenix Home Life.
Policies which are surrendered during the first ten policy years will
incur a surrender charge, consisting of a contingent deferred sales charge
designed to recover expenses for the distribution of Policies that are
terminated by surrender before distribution expenses have been recouped, and
a contingent deferred issue charge designed to recover expenses for the
administration of Policies that are terminated by surrender before
administrative expenses have been recouped. These are contingent charges
because they are paid only if the Policy is surrendered (or a partial
withdrawal is taken or the Face Amount is reduced or the Policy lapses)
during the first ten policy years. They are deferred charges because they are
not deducted from premiums.
Phoenix Home Life assumes the risk that insureds may live for a shorter
time than projected because of inaccuracies in the projecting process and,
accordingly, that an aggregate amount of death benefits greater than
projected will be payable and that its expenses may be higher than its
deductions for such expenses. In return for the assumption of these mortality
and expense risks, Phoenix Home Life charges the Account an annual rate of
0.80% of the average daily net assets of the Account for mortality and
expense risks assumed.
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable universal life contract, other than a contract issued in
connection with certain types of employee benefit plans, will not be treated
as a universal life contract for federal tax purposes for any period for
which the investments of the segregated asset account on which the contract
is based are not adequately diversified. The Code provides that the
"adequately diversified" requirement may be met if the underlying investments
satisfy either a statutory safe harbor test or diversification requirements
set forth in regulations issued by the Secretary of Treasury.
The Internal Revenue Service has issued regulations under Section 817(h)
of the Code. Phoenix Home Life believes that the Account satisfies the
current requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
66
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP [logo]
To the Participants of
Phoenix Home Life Variable
Universal Life Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub-Account, Bond Sub-Account, Total Return Sub-Account,
International Sub-Account and Balanced Sub- Account (constituting the Phoenix
Home Life Variable Universal Life Account, hereafter referred to as the
"Account") at December 31, 1995, the results of each of their operations for
the year then ended and the changes in each of their net assets for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
[Price Waterhouse LLP signature]
Hartford, CT 06103
February 13, 1996
67
<PAGE>
PHOENIX HOME LIFE
VARIABLE UNIVERSAL LIFE ACCOUNT
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
UNDERWRITER
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
CUSTODIAN
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
INTERNATIONAL SERIES CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
68
<PAGE>
APPENDIX A
THE GUARANTEED INTEREST ACCOUNT
Contributions to the Guaranteed Interest Account ("GIA") under the Policy
and transfers to the GIA become part of the general account of Phoenix Home Life
(the "General Account"), which supports insurance and annuity obligations.
Because of exemptive and exclusionary provisions, interest in the General
Account has not been registered under the Securities Act of 1933 ("1933 Act")
nor is the General Account registered as an investment company under the
Investment Company Act of 1940 ("1940 Act"). Accordingly, neither the General
Account nor any interest therein is specifically subject to the provisions of
the 1933 or 1940 Acts and the staff of the Securities and Exchange Commission
has not reviewed the disclosures in this Prospectus concerning the GIA.
Disclosures regarding the GIA and the General Account, however, may be subject
to certain generally applicable provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
The General Account is made up of all of the general assets of Phoenix Home
Life other than those allocated to any separate account. Premium payments will
be allocated to the GIA and, therefore, the General Account, as elected by the
Policyowner at the time of purchase or as subsequently changed. Phoenix Home
Life will invest the assets of the General Account in assets chosen by it and
allowed by applicable law. Investment income from General Account assets is
allocated between Phoenix Home Life and the contracts participating in the
General Account, in accordance with the terms of such contracts.
Investment income from the General Account allocated to Phoenix Home Life
includes compensation for mortality and expense risks borne by it in connection
with General Account contracts.
The amount of investment income allocated to the Policies will vary from
year to year in the sole discretion of Phoenix Home Life. However, Phoenix Home
Life guarantees that it will credit interest at a rate of not less than 4% per
year, compounded annually, to amounts allocated to the unloaned portion of the
GIA. The loaned portion of the GIA will be credited interest at an effective
annual rate of 6%. Phoenix Home Life may credit interest at a rate in excess of
4% per year; however, it is not obligated to credit any interest in excess of 4%
per year.
Bi-weekly, Phoenix Home Life will set the excess interest rate, if any, that
will apply to amounts deposited to the GIA. That rate will remain in effect for
such deposits for an initial guarantee period of one full year from the date of
deposit. Upon expiration of the initial one-year guarantee period (and each
subsequent one-year guarantee period thereafter), the rate to be applied to any
deposits whose guaranteed period has just ended will be the same rate as is
applied to new deposits allocated at that time to the GIA. This rate will
likewise remain in effect for a guarantee period of one full year from the date
the new rate is applied.
Excess interest, if any, will be determined by Phoenix Home Life based on
information as to expected investment yields. Some of the factors that Phoenix
Home Life may consider in determining whether to credit interest to amounts
allocated to the GIA and the amount thereof, are general economic trends, rates
of return currently available and anticipated on investments, regulatory and tax
requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED
TO THE GIA IN EXCESS OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF
PHOENIX HOME LIFE AND WITHOUT REGARD TO ANY SPECIFIC FORMULA. THE CONTRACT OWNER
ASSUMES THE RISK THAT INTEREST CREDITED TO GIA ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR.
Phoenix Home Life is aware of no statutory limitations on the maximum amount
of interest it may credit, and the Board of Directors has set no limitations.
However, inherent in Phoenix Home Life's exercise of discretion in this regard
is the equitable allocation of distributable earnings and surplus among its
various policyholders and contract owners.
Excess interest, if any, will be credited on the GIA Policy Value. Phoenix
Home Life guarantees that, at any time, the GIA Policy Value will not be less
than the amount of premium payments allocated to the GIA, plus interest at the
rate of 4% per year, compounded annually, plus any additional interest which
Phoenix Home Life may, in its discretion, credit to the GIA, less the sum of all
annual administrative or surrender charges, any applicable premium taxes, and
less any amounts surrendered or loaned. If the Policyowner surrenders the
Policy, the amount available from the GIA will be reduced by any applicable
surrender charge and annual administration charge (see "Deductions and
Charges").
IN GENERAL, ONE TRANSFER PER CONTRACT YEAR IS ALLOWED FROM THE GUARANTEED
INTEREST ACCOUNT. THE AMOUNT WHICH CAN BE TRANSFERRED IS LIMITED TO THE GREATER
OF $1,000 OR 25% OF THE CONTRACT VALUE IN THE GUARANTEED INTEREST ACCOUNT AS OF
THE LAST CONTRACT ANNIVERSARY. UNDER THE SYSTEMATIC TRANSFER PROGRAM, TRANSFERS
OF APPROXIMATELY EQUAL AMOUNTS MAY BE MADE OVER A MINIMUM 18-MONTH PERIOD.
NON-SYSTEMATIC TRANSFERS FROM THE GUARANTEED INTEREST ACCOUNT WILL BE
EFFECTUATED ON THE DATE OF RECEIPT BY VARIABLE PRODUCTS OPERATIONS, UNLESS
OTHERWISE REQUESTED BY THE CONTRACT OWNER.
69
<PAGE>
APPENDIX B
Illustrations of Death Benefits, Policy Values ("Account Values"),
and Cash Surrender Values.
The tables on the following pages illustrate how a Policy's Death Benefits,
Account Values and Cash Surrender Value could vary over time assuming constant
hypothetical gross (after tax) annual investment returns of 0% and 12%. The
Policy benefits will differ from those shown in the tables if the annual
investment returns are not absolutely constant. That is, the figures will be
different if the returns averaged 0% or 12% over a period of years but went
above or below those figures in individual Policy Years. The Policy benefits
will also differ, depending on your premium allocations to each Sub-account of
the VUL Account, if the overall actual rates of return averaged 0% or 12%, but
went above or below those figures for the individual Sub-accounts. The tables
are for standard risk males and females who have never smoked. In states where
cost of insurance rates are not based on the insured's sex, the tables
designated "male" apply to all standard risk insureds who have never smoked.
Account Values and Cash Surrender Values may be lower for smokers or former
smokers or for risk classes involving higher mortality risk. Planned premium
payments are assumed to be paid at the beginning of each Policy Year. The
difference between the Policy Value and the Cash Surrender Value in the first
ten years is the Surrender Charge. Tables are included for death benefit
Option 1 and Option 2. Tables are also included to reflect the blended cost of
insurance charge applied under a multiple life Policy.
The Death Benefit, Account Value, and Cash Surrender Value amounts reflect
the following current charges:
1. Issue Charge of $150.
2. Monthly Administrative Charge of $5.00 per month ($10 per month
guaranteed maximum).
3. Premium Tax Charge of 2.25% (will vary from state to state on Multiple
Life Policies).
4. A Federal Tax Charge of 1.5% (for Single Life Policies only).
5. Cost of Insurance Charge. The tables illustrate cost of insurance at
both the current rates and at the maximum rates guaranteed in the Policies.
(See "Charges and Deductions--Cost of Insurance.")
6. Mortality and Expense Risk Charge, which is a daily charge
equivalent to .80% on an annual basis (or for Single Life
Policies, .25% on an annual basis after the 15th Policy Year),
against the VUL Account for mortality and expense risks. (See
"Charges and Deductions--Mortality and Expense Risk Charge.")
These illustrations also assume an average investment advisory fee of .73%
on an annual basis, of the average daily net asset value of each of the Series
of the Funds. These illustrations also assume other ongoing average Fund
expenses of .22%. Management may decide to limit the amount of expense
reimbursement in the future. If expense reimbursement had not been in place for
the fiscal year ended December 31, 1995, total operating expenses for the
Multi-Sector Series, Real Estate Series, Strategic Theme Series, Wanger
U.S. Small Cap Series and Wanger International Small Cap Series would have been
approximately 0.73%, 1.98%, 1.33%, 2.35% and 4.20%, respectively, of the
average net assets of the Series. (See "Charges and Deductions--Investment
Management Charge.")
Taking into account the Mortality and Expense Risk Charge and the investment
advisory fees and expenses, the gross annual investment return rates of 0% and
12% on the Funds' assets are equivalent to net annual investment return rates
of approximately -1.74% and 10.17%, respectively. For individual
illustrations, interest rates ranging between 0% and 12% may be selected in
place of the 12% rate.
The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the VUL Account in the future. If such Tax Charges
are imposed in the future, then in order to produce after tax returns equal to
those illustrated for 0% and 12%, a sufficiently higher amount in excess of the
hypothetical interest rates would have to be earned. (See "Charges and
Deductions--Other Charges--Taxes.")
The second column of each table shows the amount that would accumulate if an
amount equal to the premiums paid were invested to earn interest, after taxes,
at 5% compounded annually. These tables show that if a Policy is returned in its
very early years for payment of its Cash Surrender Value, that Cash Surrender
Value may be low in comparison to the amount of the premiums accumulated with
interest. Thus, the cost of owning a Policy for a relatively short time may be
high.
On request, we will furnish the Policyowner with a comparable illustration
based on the age and sex of the proposed insured person(s), standard risk
assumptions and the initial face amount and planned premium chosen.
70
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE SUCCESS -- A FLEXIBLE PREMIUM VARIABLE UNIVERSAL
LIFE INSURANCE POLICY OPTION 1
<CAPTION>
Assuming
-------------------------------------------------------------------------
Current Charges Guaranteed Charges
---------------------------------- -----------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- -------- -------- --------- -------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 682 0 100,000 527 0 100,000
2 1,000 2,153 1,585 703 100,000 1,186 304 100,000
3 1,000 3,310 2,571 1,276 100,000 1,825 530 100,000
4 1,000 4,526 3,647 2,352 100,000 2,442 1,147 100,000
5 1,000 5,802 4,820 3,525 100,000 3,036 1,741 100,000
6 1,000 7,142 6,101 4,950 100,000 3,606 2,455 100,000
7 1,000 8,549 7,498 6,490 100,000 4,151 3,143 100,000
8 1,000 10,027 9,024 8,160 100,000 4,671 3,806 100,000
9 1,000 11,578 10,690 10,259 100,000 5,164 4,732 100,000
10 1,000 13,207 12,512 12,512 100,000 5,629 5,629 100,000
11 1,000 14,917 14,509 14,509 100,000 6,065 6,065 100,000
12 1,000 16,713 16,702 16,702 100,000 6,470 6,470 100,000
13 1,000 18,599 19,110 19,110 100,000 6,842 6,842 100,000
14 1,000 20,579 21,758 21,758 100,000 7,180 7,180 100,000
15 1,000 22,657 24,670 24,670 100,000 7,483 7,483 100,000
16 1,000 24,840 28,031 28,031 100,000 7,792 7,792 100,000
17 1,000 27,132 31,751 31,751 100,000 8,058 8,058 100,000
18 1,000 29,539 35,871 35,871 100,000 8,276 8,276 100,000
19 1,000 32,066 40,437 40,437 100,000 8,442 8,442 100,000
20 1,000 34,719 45,501 45,501 100,000 8,546 8,546 100,000
@ 62 27,000 57,403 100,567 100,567 128,726 7,017 7,017 100,000
@ 65 30,000 69,761 139,017 139,017 169,601 4,530 4,530 100,000
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
34.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% for fifteen years, then
0.25% and average fund operating expenses of 0.95% applicable to the
investment Sub-accounts of the VUL Separate Account). Hypothetical gross
interest rates are presented for illustrative purposes only to illustrate funds
allocated entirely to the investment Sub-accounts of the VUL Separate Account
and do not in any way represent actual results or suggest that such results will
be achieved in the future. Actual values will differ from those shown whenever
actual investment results differ from hypothetical gross interest rates
illustrated. A Guaranteed Interest Account providing interest at a minimum
guaranteed rate of 4% is also available under this product through the General
Account.
This illustration assumes a premium tax of 2.25%.
71
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE SUCCESS--A FLEXIBLE PREMIUM VARIABLE
UNIVERSAL LIFE INSURANCE POLICY OPTION 1
<CAPTION>
Assuming
-----------------------------------------------------------------------
Current Charges Guaranteed Charges
----------------------------------- ---------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- --------- --------- --------- -------- ---------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 711 0 100,000 549 0 100,000
2 1,000 2,153 1,645 794 100,000 1,228 377 100,000
3 1,000 3,310 2,664 1,480 100,000 1,886 702 100,000
4 1,000 4,526 3,778 2,593 100,000 2,523 1,338 100,000
5 1,000 5,802 4,994 3,809 100,000 3,136 1,951 100,000
6 1,000 7,142 6,322 5,267 100,000 3,725 2,670 100,000
7 1,000 8,549 7,771 6,846 100,000 4,288 3,363 100,000
8 1,000 10,027 9,354 8,560 100,000 4,825 4,031 100,000
9 1,000 11,578 11,087 10,691 100,000 5,338 4,942 100,000
10 1,000 13,207 12,985 12,985 100,000 5,826 5,826 100,000
11 1,000 14,917 15,071 15,071 100,000 6,290 6,290 100,000
12 1,000 16,713 17,366 17,366 100,000 6,728 6,728 100,000
13 1,000 18,599 19,892 19,892 100,000 7,140 7,140 100,000
14 1,000 20,579 22,673 22,673 100,000 7,524 7,524 100,000
15 1,000 22,657 25,737 25,737 100,000 7,880 7,880 100,000
16 1,000 24,840 29,273 29,273 100,000 8,252 8,252 100,000
17 1,000 27,132 33,194 33,194 100,000 8,593 8,593 100,000
18 1,000 29,539 37,542 37,542 100,000 8,899 8,899 100,000
19 1,000 32,066 42,364 42,364 100,000 9,166 9,166 100,000
20 1,000 34,719 47,716 47,716 100,000 9,394 9,394 100,000
@ 62 27,000 57,403 105,894 105,894 135,544 9,789 9,789 100,000
@ 65 30,000 69,761 146,636 146,636 178,897 9,010 9,010 100,000
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
39.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% for fifteen years, then
0.25% and average fund operating expenses of 0.95% applicable to the
investment Sub-accounts of the VUL Separate Account). Hypothetical gross
interest rates are presented for illustrative purposes only to illustrate funds
allocated entirely to the investment Sub-accounts of the VUL Separate Account
and do not in any way represent actual results or suggest that such results will
be achieved in the future. Actual values will differ from those shown whenever
actual investment results differ from hypothetical gross interest rates
illustrated. A Guaranteed Interest Account providing interest at a minimum
guaranteed rate of 4% is also available under this product through the General
Account.
This illustration assumes a premium tax of 2.25%.
72
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE SUCCESS--A FLEXIBLE PREMIUM VARIABLE
UNIVERSAL LIFE INSURANCE POLICY OPTION 2
<CAPTION>
Assuming
-------------------------------------------------------------------------
Current Charges Guaranteed Charges
----------------------------------- -----------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- -------- --------- --------- --------- --------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 681 0 100,681 526 0 100,526
2 1,000 2,153 1,581 699 101,581 1,183 301 101,183
3 1,000 3,310 2,561 1,266 102,561 1,818 523 101,818
4 1,000 4,526 3,628 2,333 103,629 2,430 1,135 102,430
5 1,000 5,802 4,790 3,495 104,790 3,017 1,722 103,018
6 1,000 7,142 6,054 4,902 106,054 3,579 2,428 103,580
7 1,000 8,549 7,427 6,419 107,428 4,114 3,106 104,115
8 1,000 10,027 8,922 8,058 108,923 4,622 3,757 104,622
9 1,000 11,578 10,547 10,116 110,548 5,100 4,668 105,100
10 1,000 13,207 12,316 12,316 112,317 5,549 5,549 105,549
11 1,000 14,917 14,247 14,247 114,248 5,965 5,965 105,965
12 1,000 16,713 16,357 16,357 116,357 6,347 6,347 106,347
13 1,000 18,599 18,662 18,662 118,663 6,694 6,694 106,694
14 1,000 20,579 21,183 21,183 121,184 7,004 7,004 107,004
15 1,000 22,657 23,940 23,940 123,940 7,274 7,274 107,274
16 1,000 24,840 27,106 27,106 127,107 7,545 7,545 107,546
17 1,000 27,132 30,588 30,588 130,589 7,770 7,770 107,771
18 1,000 29,539 34,418 34,418 134,418 7,941 7,941 107,942
19 1,000 32,066 38,629 38,629 138,629 8,054 8,054 108,054
20 1,000 34,719 43,259 43,259 143,259 8,099 8,099 108,100
@ 62 27,000 57,403 91,531 91,531 191,532 5,991 5,991 105,992
@ 65 30,000 69,761 123,984 123,984 223,985 3,216 3,216 103,217
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
33.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% for fifteen years, then
0.25% and average fund operating expenses of 0.95% applicable to the
investment Sub-accounts of the VUL Separate Account). Hypothetical gross
interest rates are presented for illustrative purposes only to illustrate funds
allocated entirely to the investment Sub-accounts of the VUL Separate Account
and do not in any way represent actual results or suggest that such results will
be achieved in the future. Actual values will differ from those shown whenever
actual investment results differ from hypothetical gross interest rates
illustrated. A Guaranteed Interest Account providing interest at a minimum
guaranteed rate of 4% is also available under this product through the General
Account.
This illustration assumes a premium tax of 2.25%.
73
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE SUCCESS--A FLEXIBLE PREMIUM VARIABLE
UNIVERSAL LIFE INSURANCE POLICY OPTION 2
<CAPTION>
Assuming
-----------------------------------------------------------------------
Current Charges Guaranteed Charges
---------------------------------- ---------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- ------- -------- --------- -------- --------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 710 0 100,710 547 0 100,548
2 1,000 2,153 1,641 790 101,641 1,225 374 101,226
3 1,000 3,310 2,656 1,471 102,656 1,880 695 101,880
4 1,000 4,526 3,762 2,577 103,763 2,512 1,327 102,512
5 1,000 5,802 4,967 3,782 104,967 3,118 1,934 103,119
6 1,000 7,142 6,279 5,225 106,280 3,700 2,645 103,700
7 1,000 8,549 7,707 6,783 107,708 4,253 3,329 104,254
8 1,000 10,027 9,263 8,469 109,263 4,779 3,985 104,780
9 1,000 11,578 10,959 10,562 110,959 5,278 4,882 105,279
10 1,000 13,207 12,809 12,809 112,809 5,751 5,751 105,751
11 1,000 14,917 14,836 14,836 114,836 6,196 6,196 106,197
12 1,000 16,713 17,057 17,057 117,057 6,614 6,614 106,614
13 1,000 18,599 19,492 19,492 119,492 7,003 7,003 107,003
14 1,000 20,579 22,161 22,161 122,162 7,361 7,361 107,361
15 1,000 22,657 25,090 25,090 125,090 7,688 7,688 107,689
16 1,000 24,840 28,458 28,458 128,459 8,026 8,026 108,027
17 1,000 27,132 32,175 32,175 132,175 8,330 8,330 108,330
18 1,000 29,539 36,275 36,275 136,276 8,595 8,595 108,595
19 1,000 32,066 40,798 40,798 140,798 8,816 8,816 108,816
20 1,000 34,719 45,789 45,789 145,790 8,992 8,992 108,993
@ 62 27,000 57,403 98,843 98,843 198,844 8,895 8,895 108,895
@ 65 30,000 69,761 135,388 135,388 235,389 7,822 7,822 107,823
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
38.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% for fifteen years, then
0.25% and average fund operating expenses of 0.95% applicable to the
investment Sub-accounts of the VUL Separate Account). Hypothetical gross
interest rates are presented for illustrative purposes only to illustrate funds
allocated entirely to the investment Sub-accounts of the VUL Separate Account
and do not in any way represent actual results or suggest that such results will
be achieved in the future. Actual values will differ from those shown whenever
actual investment results differ from hypothetical gross interest rates
illustrated. A Guaranteed Interest Account providing interest at a minimum
guaranteed rate of 4% is also available under this product through the General
Account.
This illustration assumes a premium tax of 2.25%.
74
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
FEMALE 35 NEVERSMOKE
JOINT EDGE--A FLEXIBLE PREMIUM VARIABLE
UNIVERSAL LIFE INSURANCE POLICY OPTION 1
<CAPTION>
Assuming
-----------------------------------------------------------------------
Current Charges Guaranteed Charges
---------------------------------- ---------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- ------- -------- --------- -------- --------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 597 0 100,000 382 0 100,000
2 1,000 2,153 1,403 419 100,000 891 0 100,000
3 1,000 3,310 2,280 1,198 100,000 1,372 290 100,000
4 1,000 4,526 3,235 2,063 100,000 1,822 650 100,000
5 1,000 5,802 4,275 3,066 100,000 2,240 1,031 100,000
6 1,000 7,142 5,407 4,343 100,000 2,622 1,559 100,000
7 1,000 8,549 6,640 5,721 100,000 2,966 2,047 100,000
8 1,000 10,027 7,982 7,284 100,000 3,270 2,572 100,000
9 1,000 11,578 9,449 8,971 100,000 3,534 3,056 100,000
10 1,000 13,207 11,047 11,047 100,000 3,757 3,757 100,000
11 1,000 14,917 12,792 12,792 100,000 3,936 3,936 100,000
12 1,000 16,713 14,689 14,689 100,000 4,069 4,069 100,000
13 1,000 18,599 16,754 16,754 100,000 4,152 4,152 100,000
14 1,000 20,579 19,005 19,005 100,000 4,182 4,182 100,000
15 1,000 22,657 21,459 21,459 100,000 4,155 4,155 100,000
16 1,000 24,840 24,138 24,138 100,000 4,067 4,067 100,000
17 1,000 27,132 27,071 27,071 100,000 3,907 3,907 100,000
18 1,000 29,539 30,283 30,283 100,000 3,668 3,668 100,000
19 1,000 32,066 33,805 33,805 100,000 3,337 3,337 100,000
20 1,000 34,719 37,670 37,670 100,000 2,904 2,904 100,000
@ 62 27,000 57,403 78,456 78,456 100,424 0 0 0
@ 65 30,000 69,761 106,780 106,780 130,273 0 0 0
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
24.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
75
<PAGE>
<TABLE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY Page 1 of 1
Statutory Home Office: East Greenbush, New York
FACE AMOUNT:$100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
FEMALE 35 NEVERSMOKE
JOINT EDGE--A FLEXIBLE PREMIUM JOINT UNIVERSAL
LIFE INSURANCE POLICY OPTION 2
<CAPTION>
Assuming
-----------------------------------------------------------------------
Current Charges Guaranteed Charges
---------------------------------- ---------------------------------
Assumed Cash Cash
Annual Premium Account Surrender Death Account Surrender Death
Premium Accum. Value Value Benefit Value Value Benefit
Year Payments @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- ------- ------- -------- --------- -------- --------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 595 0 100,596 380 0 100,381
2 1,000 2,153 1,396 413 101,397 886 0 100,886
3 1,000 3,310 2,267 1,185 102,267 1,361 279 101,361
4 1,000 4,526 3,210 2,038 103,211 1,804 632 101,804
5 1,000 5,802 4,234 3,026 104,235 2,211 1,002 102,212
6 1,000 7,142 5,344 4,281 105,345 2,582 1,518 102,582
7 1,000 8,549 6,549 5,630 106,549 2,911 1,992 102,911
8 1,000 10,027 7,853 7,155 107,853 3,198 2,500 103,199
9 1,000 11,578 9,270 8,792 109,270 3,442 2,964 103,443
10 1,000 13,207 10,806 10,806 110,806 3,643 3,643 103,644
11 1,000 14,917 12,470 12,470 112,471 3,798 3,798 103,798
12 1,000 16,713 14,266 14,266 114,267 3,903 3,903 103,903
13 1,000 18,599 16,204 16,204 116,204 3,956 3,956 103,956
14 1,000 20,579 18,294 18,294 118,294 3,953 3,953 103,954
15 1,000 22,657 20,548 20,548 120,549 3,892 3,892 103,893
16 1,000 24,840 22,980 22,980 122,981 3,767 3,767 103,767
17 1,000 27,132 25,608 25,608 125,608 3,570 3,570 103,570
18 1,000 29,539 28,445 28,445 128,446 3,291 3,291 103,292
19 1,000 32,066 31,508 31,508 131,508 2,921 2,921 102,921
20 1,000 34,719 34,810 34,810 134,811 2,451 2,451 102,451
@ 62 27,000 57,403 66,026 66,026 166,026 0 0 0
@ 65 30,000 69,761 84,905 84,905 184,905 0 0 0
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
24.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
76
<PAGE>
THE WANGER ADVISORS TRUST
AND THE TWO
WANGER SUB-ACCOUNTS:
U.S. SMALL CAP AND INTERNATIONAL SMALL CAP,
MENTIONED HEREIN ARE NOT CURRENTLY AVAILABLE FOR
INVESTMENT. WE WILL NOTIFY POLICYHOLDERS
BY MAIL AS SOON AS THEY BECOME AVAILABLE.
P-1
<PAGE>
VERSION B
---------
VARIABLE LIFE INSURANCE POLICY
ISSUED BY: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
101 MUNSON STREET
P.O. BOX 810
GREENFIELD, MASSACHUSETTS 01302-0810
TELEPHONE: (800) 892-4885
PROSPECTUS
MAY 1, 1996
This prospectus describes a Flexible Premium Variable Life Insurance Policy
(the "Policy"), offered by Phoenix Home Life Mutual Insurance Company ("Phoenix
Home Life"). An applicant chooses the amount of Issue Premium desired and it is
then shown in the Policy. Generally, the minimum Issue Premium Phoenix Home Life
will accept is 1/6 of the Planned Annual Premium. Phoenix Home Life may in
some cases accept less than that amount. The amount and payment frequency of
planned premiums are as shown in the Policy. If too much is paid in premium in
the early Policy Years, the Policy could become a "modified endowment
contract." This would cause loans and other amounts received under the Policy
to be subject to tax and/or penalties. Currently, Phoenix Home Life notifies a
Policyowner when a Policy becomes a modified endowment contract.
Premium payments are allocated to one or more of the Sub-accounts of the
Phoenix Home Life Variable Universal Life Account (the "VUL Account") or to the
Guaranteed Interest Account ("GIA"), as specified in the applicant's application
for insurance. The VUL Account is divided into Sub-accounts, each of which
invests in a corresponding series of the Phoenix Edge Series Fund or Wanger
Advisors Trust (collectively, the "Funds"). For certain Policyowners, the Issue
Premium is first allocated to the Money Market Sub-account before being
allocated according to the instructions in the application.
There is no guaranteed minimum Policy Value except for that portion of
Policy Value invested in the GIA, which has a 4% minimum interest rate
guarantee. The Policy Value not invested in the GIA will vary to reflect the
investment experience of the Sub-accounts of the VUL Account to which premiums
have been allocated. A Policyowner bears the investment risk for all amounts so
allocated. The Policy will remain in effect so long as the Policy Value or Cash
Surrender Value is sufficient to pay certain monthly charges imposed in
connection with the Policy.
The death benefit under the Policy equals the Policy's face amount on the
date of the Insured's death or, if greater, the Policy Value on the date of
death increased by the applicable percentage set forth in the Policy. Other
death benefit options are also available.
A Policyowner may cancel the Policy within 10 days (or longer in some
states), after the Policyowner receives it or 10 days after Phoenix Home Life
mails or delivers a written notice of withdrawal right to the Policyowner, or
within 45 days of completing the application, whichever is latest.
It may not be advantageous to purchase a Policy as a replacement for your
current life insurance or to supplement an existing life insurance policy.
This prospectus is valid only if accompanied by or preceded by current
prospectuses for the Funds. This prospectus and the prospectus for the Fund
should be read and retained for future reference.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
1
<PAGE>
TABLE OF CONTENTS
Page
- --------------------------------------------------------------
VARIABLE LIFE INSURANCE POLICY ........................... 1
TABLE OF CONTENTS ........................................ 2
FINANCIAL HIGHLIGHTS ..................................... 3
SPECIAL TERMS ............................................ 5
SUMMARY .................................................. 5
PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT ............... 7
Phoenix Home Life Mutual Insurance Company ............ 7
The VUL Account ....................................... 8
The Guaranteed Interest Account ....................... 8
THE POLICY ............................................... 9
Introduction .......................................... 9
Eligible Purchasers ................................... 9
Premium Payment ....................................... 9
Allocation of Issue Premium ........................... 9
Right to Cancel Period ................................ 10
Temporary Insurance Coverage .......................... 10
Transfer of Policy Value .............................. 10
Determination of Sub-account Values ................... 10
Death Benefit ......................................... 11
Surrenders ............................................ 11
Policy Loans .......................................... 12
Lapse ................................................. 13
Payment of Premiums During Period of Disability ....... 13
Additional Insurance Options .......................... 13
Additional Rider Benefits ............................. 13
INVESTMENTS OF THE VUL ACCOUNT ........................... 14
Participating Mutual Funds ............................ 14
Investment Adviser to The Phoenix Edge Series Fund .... 15
Investment Adviser to Wanger Advisors Trust............ 15
Reinvestment and Redemption ........................... 15
Substitution of Investments ........................... 16
Performance History ................................... 16
CHARGES AND DEDUCTIONS ................................... 17
Monthly Deduction ..................................... 17
Premium Taxes ......................................... 18
Mortality and Expense Risk Charge ..................... 18
Investment Management Charge .......................... 18
Other Charges ......................................... 18
GENERAL PROVISIONS ....................................... 19
Postponement of Payments .............................. 19
Payment by Check ...................................... 20
The Contract .......................................... 20
Suicide ............................................... 20
Incontestability ...................................... 20
Change of Owner or Beneficiary ........................ 20
Assignment ............................................ 20
Misstatement of Age or Sex ............................ 20
Surplus ............................................... 20
PAYMENT OF PROCEEDS ...................................... 20
Surrender and Death Benefit Proceeds .................. 20
Payment Options ....................................... 20
FEDERAL TAX CONSIDERATIONS ............................... 21
Introduction .......................................... 21
Phoenix Home Life's Tax Status ........................ 21
Policy Benefits ....................................... 21
Business-Owned Policies................................ 22
Modified Endowment Contracts .......................... 22
Limitations on Unreasonable Mortality
and Expense Charges ................................ 23
Qualified Plans ....................................... 23
Diversification Standards ............................. 23
Change of Ownership or Insured or Assignment .......... 23
Other Taxes ........................................... 23
VOTING RIGHTS ............................................ 24
The Funds ........................................... 24
Phoenix Home Life ..................................... 24
THE DIRECTORS AND EXECUTIVE OFFICERS
OF PHOENIX HOME LIFE .................................. 24
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS .................. 25
SALES OF POLICIES ........................................ 25
STATE REGULATION ......................................... 25
REPORTS .................................................. 26
LEGAL PROCEEDINGS ........................................ 26
LEGAL MATTERS ............................................ 26
REGISTRATION STATEMENT ................................... 26
FINANCIAL STATEMENTS ..................................... 26
APPENDIX A ............................................... 68
APPENDIX B ............................................... 69
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESPERSON, OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND IF GIVEN
OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
2
<PAGE>
FINANCIAL HIGHLIGHTS
FLEX-JOINT-VUL
(SELECTED DATA FOR A UNIT OUTSTANDING THROUGHOUT THE INDICATED PERIOD)
FOLLOWING ARE THE UNAUDITED FINANCIAL HIGHLIGHTS FOR THE PERIODS INDICATED.
<TABLE>
MONEY MARKET SUB-ACCOUNT
-----------------------------------------------------------------------------
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
------------------------- 6/20/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Unit Value, beginning of period. $1.263974 $1.226981 $1.202239 $1.171195 $1.115052 $1.038647 $1.000000
Unit value, end of period....... $1.325408 $1.263974 $1.226981 $1.202239 $1.171195 $1.115052 $1.038647
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 10,230 9,143 5,488 2,834 1,547 341 11
Joint Edge (000) 296 155 155 -- -- -- --
GROWTH SUB-ACCOUNT
----------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
------------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- --------
Unit value, beginning of period $2.412541 $2.396670 $2.018313 $1.846577 $1.305400 $1.264680 $1.000000
Unit value, end of period...... $3.132626 $2.412541 $2.396670 $2.018313 $1.846577 $1.305400 $1.264680
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 36,539 23,650 13,483 5,452 1,514 217 42
Joint Edge (000) 1,113 533 37 -- -- -- --
MULTI-SECTOR SUB-ACCOUNT
(FORMERLY THE "BOND" SUB-ACCOUNT)
-----------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- ---------
Unit value, beginning of period $1.527250 $1.628351 $1.416138 $1.297743 $1.094831 $1.048255 $1.000000
Unit value, end of period...... $1.871769 $1.527250 $1.628351 $1.416138 $1.297743 $1.094831 $1.048255
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 3,484 2,355 1,524 775 106 20 18
Joint Edge (000) 95 48 2 -- -- -- --
TOTAL RETURN SUB-ACCOUNT
----------------------------------------------------------------------------
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 2/9/89 TO
1995 1994 1993 1992 1991 1990 12/31/89
---- ---- ---- ---- ---- ---- --------
Unit value, beginning of period $1.830914 $1.871886 $1.699829 $1.549846 $1.209456 $1.151223 $1.000000
Unit value, end of period...... $2.147078 $1.830914 $1.871886 $1.699829 $1.549846 $1.209456 $1.151223
========= ========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 9,236 6,582 4,089 2,219 647 89 19
Joint Edge (000) 1,956 93 12 -- -- -- --
</TABLE>
3
<PAGE>
FINANCIAL HIGHLIGHTS
FLEX-JOINT-VUL
<TABLE>
INTERNATIONAL SUB-ACCOUNT
---------------------------------------------------------------------
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 5/1/90 TO
1995 1994 1993 1992 1991 12/31/90
---- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period $1.273020 $1.282423 $0.933826 $1.080888 $0.910823 $1.000000
Unit value, end of period...... $1.384037 $1.273020 $1.282423 $0.933826 $1.080888 $0.910823
========= ========= ========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 14,435 11,096 3,971 692 244 38
Joint Edge (000) 555 314 18 -- -- --
</TABLE>
<TABLE>
BALANCED SUB-ACCOUNT
------------------------------------------
<CAPTION>
FROM
YEAR ENDED DECEMBER 31, INCEPTION
----------------------- 5/1/92 TO
1995 1994 1993 12/31/92
---- ---- ---- ---------
<S> <C> <C> <C> <C>
Unit value, beginning of period $1.129669 $1.171933 $1.087688 $1.000000
Unit value, end of period...... $1.382412 $1.129669 $1.171933 $1.087688
========= ========= ========= =========
Number of units outstanding:
Flex Edge (000) 9,522 7,513 5,339 1,772
Joint Edge (000) 401 338 18 --
</TABLE>
REAL ESTATE SECURITIES SUB-ACCOUNT
STRATEGIC THEME SUB-ACCOUNT
WANGER U.S. SMALL CAP SUB-ACCOUNT
WANGER INTERNATIONAL SMALL CAP SUB-ACCOUNT
THESE SUB-ACCOUNTS COMMENCED OPERATIONS AS OF THE DATE OF THIS
PROSPECTUS; ACCORDINGLY, FINANCIAL HIGHLIGHTS
FOR THESE SUB-ACCOUNTS ARE NOT YET AVAILABLE.
4
<PAGE>
SPECIAL TERMS
- -------------------------------------------------------------------------------
As used in this Prospectus, the following terms have the indicated meanings:
ATTAINED AGE: The age of the Insured on the birthday nearest the most recent
Policy Anniversary.
BENEFICIARY: The person or persons specified by the Policyowner as entitled to
receive the death benefits under a Policy.
CASH SURRENDER VALUE: The Policy Value less any surrender charge that would
apply on the date of surrender and less any Debt.
DEATH BENEFIT GUARANTEE: An additional benefit rider available with the Policy
that guarantees a death benefit equal to the initial face amount or the face
amount as later increased or decreased, provided that Minimum Required Premiums
are paid. See "Additional Rider Benefits."
DEBT: Outstanding loans against a Policy, plus accrued interest.
GENERAL ACCOUNT: The general asset account of Phoenix Home Life.
GUARANTEED INTEREST ACCOUNT (GIA): An allocation option under which amounts
deposited are guaranteed to earn a fixed rate of interest. Excess interest may
also be credited, in the sole discretion of Phoenix Home Life.
IN FORCE: Conditions under which the coverage under a Policy is in effect and
the Insured's life remains insured.
INSURED: The person upon whose life the Policy is issued.
IN WRITING (WRITTEN REQUEST): In a written form satisfactory to Phoenix Home
Life and delivered to Variable and Universal Life Administration.
ISSUE PREMIUM: The premium payment made in connection with the issue of the
Policy.
MATURITY DATE: The latest date that the Policy will terminate.
MINIMUM REQUIRED PREMIUM: The required premium as specified in the Policy. An
increase or decrease in the face amount of the policy will change the Minimum
Required Premium amount.
MONTHLY CALCULATION DAY: The first Monthly Calculation Day is the same day as
the Policy Date. Subsequent Monthly Calculation Days are the same day of each
month thereafter or, if such day does not fall within a given month, the last
day of that month will be the Monthly Calculation Day.
PAYMENT DATE: The Valuation Date on which a premium payment or loan repayment is
received at Phoenix Home Life, unless it is received after the close of the New
York Stock Exchange, in which case it will be the next Valuation Date.
PHOENIX HOME LIFE: Phoenix Home Life Mutual Insurance Company, Hartford,
Connecticut.
PLANNED ANNUAL PREMIUM: The premium amount that the Policyowner agrees to pay
each Policy Year. It must be at least equal to the minimum premium required for
the face amount of insurance selected and must be no greater than the maximum
premium allowed for the face amount selected.
POLICY ANNIVERSARY: Each anniversary of the Policy Date.
POLICY DATE: The Policy Date as shown on the Schedule Page of the Policy. It is
the date from which Policy Years and Policy Anniversaries are measured.
POLICY MONTH: The period from one Monthly Calculation Day up to but not
including the next Monthly Calculation Day.
POLICYOWNER (OWNER): The owner of a Policy.
POLICY VALUE: The sum of a Policy's share in the values of each Sub-account of
the VUL Account plus the Policy's share in the values of the Guaranteed Interest
Account.
POLICY YEAR: The first Policy Year is the one-year period from the Policy Date
up to, but not including, the first Policy Anniversary. Each succeeding Policy
Year is the one-year period from the Policy anniversary up to but not including
the next Policy Anniversary.
PROPORTIONATE: Amounts allocated to Sub-accounts on a proportionate basis are
allocated by increasing (or decreasing) a Policy's share in the value of the
affected Sub-accounts so that such shares maintain the same ratio to each other
before and after the allocation.
SUB-ACCOUNTS: Accounts within the VUL Account to which non-loaned assets under a
Policy are allocated.
UNIT: A standard of measurement used in determining the value of a Policy. The
value of a Unit for each Sub-account will reflect the investment performance of
that Sub-account and will vary in dollar amount.
VALUATION DATE: For any Sub-account, each date on which the net asset value of
the Fund is determined.
VALUATION PERIOD: For any Sub-account, the period in days from the end of one
Valuation Date through the next.
VARIABLE AND UNIVERSAL LIFE ADMINISTRATION: Variable and Universal Life
Administration Division of Phoenix Home Life Mutual Insurance Company.
VUL ACCOUNT: Phoenix Home Life Variable Universal Life Account.
SUMMARY
- -------------------------------------------------------------------------------
1. WHAT IS THE DIFFERENCE BETWEEN THE POLICY AND A CONVENTIONAL
FIXED BENEFIT LIFE INSURANCE POLICY?
Like conventional fixed-benefit life insurance, so long as the Policy
remains In Force, the Policy will provide for: (1) the payment of a death
benefit to a Beneficiary upon the Insured's death; (2) the accumulation of cash
value; and (3) surrender rights and Policy loan privileges.
The Policy differs from conventional fixed-benefit life insurance by
allowing Policyowners to allocate premiums to one or more Sub-accounts of the
VUL Account or to the Guaranteed Interest Account. Each Sub-account invests
exclusively in a designated portfolio of the Fund. Also, under the Policy, the
Policy Value invested in the VUL Account is not guaranteed and may increase or
decrease depending upon the investment experience of the Sub-accounts of the VUL
Account. Accordingly, the Policyowner bears the investment risk of
5
<PAGE>
any depreciation in value of the underlying assets but reaps the benefits of any
appreciation in value. See "Policy Value."
In addition, unlike conventional fixed-benefit life insurance, a Policyowner
also has the flexibility to make additional premium payments and to thereby
adjust the Policy Value. However, unlike conventional fixed-benefit life
insurance, the Policy does not require a Policyowner to adhere to a fixed
premium payment schedule. Moreover, after the payment of the Issue Premium, the
failure to make additional premium payments will not in itself cause the Policy
to lapse. Conversely, the payment of additional premiums will not guarantee that
the Policy will remain In Force. Generally, lapse will occur when the Cash
Surrender Value is insufficient to pay certain charges deducted on the Monthly
Calculation Day, and a grace period expires without payment of the additional
amount required. See "Lapse."
If a Whole Life Exchange Option Rider is attached to the Policy, the
Policy may be exchanged for a fixed-benefit whole life policy. (See
"Additional Rider Benefits.")
2. IS THERE A GUARANTEED ACCOUNT OPTION?
Yes. A Policyowner may elect to have premium payments allocated to the
Guaranteed Interest Account. Amounts allocated to the GIA earn a fixed rate of
interest and Phoenix Home Life may also, in its sole discretion, credit excess
interest. (See Appendix A.)
3. WHAT IS THE DEATH BENEFIT UNDER THE POLICY?
The Policy provides for the payment of benefits upon the death of the
Insured. Upon application for a Policy, an applicant designates an Issue
Premium. The Policy indicates the face amount of insurance. The death benefit
will equal the face amount on the date of the Insured's death or, if greater,
the Policy Value on the date of the Insured's death increased by the applicable
percentage set forth in the Policy. If the enhanced death benefit option is
selected, the death benefit will equal the face amount on the date of the
Insured's death plus the Policy Value or, if greater, the Policy Value on the
date of the Insured's death increased by the applicable percentage set forth in
the Policy. Guaranteed death benefit and living benefits riders are also
available. See "Death Benefit."
4. HOW LONG WILL THE POLICY REMAIN IN FORCE?
The Policy will lapse only when the Cash Surrender Value is insufficient
to pay the monthly deduction (see "Charges and Deductions--Monthly Deductions"),
and a grace period expires without payment of the additional amount required. In
this respect, the Policy differs in two important respects from a conventional
life insurance Policy. First, the failure to pay additional premiums will not
automatically cause the Policy to lapse. Second, the payment of premiums of any
pre-specified amount does not guarantee that the Policy will remain In Force
until the Maturity Date. A rider is available to ensure that premium payments
will continue during a period of disability.
5. WHAT CHARGES ARE THERE IN CONNECTION WITH THE POLICY?
MONTHLY DEDUCTION: A deduction is made each Policy Month from the Policy
Value (excluding the value of the loaned portion of the Guaranteed Interest
Account) to pay the cost of insurance provided under the Policy; the cost of any
rider benefits provided; any unpaid balance of the $150 Issue Expense Charge;
and an administrative charge as shown on the schedule page of the Policy. The
administrative charge may vary but in no event will it exceed $10 per month.
Currently, the administrative charge is $5.00 per month. The administrative
charge is set at a level designed to recover actual costs and is not designed to
result in any profit to Phoenix Home Life. See "Charges and Deductions."
OTHER CHARGES: A fee equal to the lesser of $25 or 2% of the partial
surrender amount paid is deducted from the Policy Value for each partial
surrender. A partial surrender charge equal to a pro-rata portion of the
applicable surrender charge that would apply to a full surrender, determined by
applying a formula, is also assessed against the VUL Account Sub-accounts or the
Guaranteed Interest Account when a partial surrender is made.
No charges are currently made from the VUL Account or the Guaranteed
Interest Account for federal or state income taxes. If Phoenix Home Life
determines that such taxes may be imposed, it may make deductions from the VUL
Account to pay these taxes.
Phoenix Home Life charges each Sub-account of the VUL Account the daily
equivalent of 0.80% on an annual basis of the current value of the Sub-account's
net assets for its assumption of certain mortality and expense risks incurred in
connection with the Policy.
Premium amounts are also reduced by any applicable state premium tax based
on the Policyowner's last known address on record with Variable and Universal
Life Administration and, for payments made during a grace period, by the amount
needed to cover any monthly deductions made during the grace period.
Investment advisory charges are imposed on an annual basis based on the
average daily net assets of the Series of the Funds as follows:
PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $250,000,000 $250,000,000 $500,000,000
------ ------------ ------------ ------------
Money Market....... .40% .35% .30%
Multi-Sector....... .50% .45% .40%
Balanced........... .55% .50% .45%
Total Return....... .60% .55% .50%
Growth............. .70% .65% .60%
International...... .75% .70% .65%
Strategic Theme.... .75% .70% .65%
PHOENIX REALTY SECURITIES, INC.
-------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
------ -------------- -------------- --------------
Real Estate....... .75% .70% .65%
WANGER ASSET MANAGEMENT, L.P.
-----------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $100,000,000 $150,000,000 $250,000,000
------ ------------ ------------ ------------
U.S. Small Cap.... 1.00% .95% .90%
International
Small Cap......... 1.30% 1.20% 1.10%
6
<PAGE>
In addition, each Series pays a portion or all of its other operating
expenses other than the management fees: the Growth, Multi-Sector, Total Return,
Money Market and Balanced Series will pay up to .15%; the Real Estate and
Strategic Theme Series will pay up to .25%; the International Series will pay up
to .40%; the Wanger U.S. Small Cap Series will pay up to .50%; and the Wanger
International Small Cap Series will pay up to .60% of its average net assets
annually. See "Charges and Deductions."
6. IS THERE A RIGHT TO CANCEL PERIOD?
Yes. The Policyowner may cancel the Policy within 10 days after the
Policyowner receives it (or longer in some states), or 10 days after Phoenix
Home Life mails or delivers a written notice of withdrawal right to the
Policyowner, or within 45 days of completing the application, whichever is
latest.
7. HOW ARE PREMIUMS ALLOCATED?
If the applicant elects the Temporary Money Market Allocation Amendment in
the application, Phoenix Home Life will allocate the entire Issue Premium less
any applicable charges to the Money Market Sub-account of the VUL Account.
Phoenix Home Life requires this election for all applicants in certain states
and for applicants in certain states who indicate on their application that they
intend the Policy to replace existing insurance. At the expiration of the Right
to Cancel Period for such Policyowners, the Policy Value will be allocated among
the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in
accordance with the Policyowner's allocation instructions in the application for
insurance. All other Policyowners will have their Issue Premium less any
applicable charges allocated according to the instructions in the application on
the date it is received without first having the premium placed in the Money
Market Sub-account. The Policy Value may be allocated among the available
Sub-accounts of the VUL Account, each of which invests in shares of a designated
portfolio of the Funds, or to the Guaranteed Interest Account. The 10
portfolios of the Funds currently available are: Money Market Series, Growth
Series, Multi-Sector Series, Total Return Series, Balanced Series,
International Series, Strategic Theme Series, Real Estate Series, Wanger U.S.
Small Cap Series and Wanger International Small Cap Series. See "Investments of
the VUL Account."
8. AFTER THE INITIAL ALLOCATION, MAY I CHANGE THE ALLOCATION OF
POLICY VALUE?
Yes. A Policyowner may transfer amounts among the Sub-accounts of the VUL
Account or the Guaranteed Interest Account. Only one transfer per Policy Year is
permitted from the unloaned portion of the Guaranteed Interest Account. The
amount of that transfer is limited to the higher of $1,000 or 25% of the value
of the Policy in the unloaned portion of the Guaranteed Interest Account. Also,
Phoenix Home Life reserves the right to require that transfers be made by
written request. Phoenix Home Life further reserves the right to permit
transfers of less than $500 only if the entire balance in the Sub-account of the
VUL Account or the Guaranteed Interest Account is transferred. A systematic
transfer program is also available. See "Transfer of Policy Value."
9. MAY THE POLICY BE SURRENDERED?
Yes. A Policyowner may totally surrender the Policy at any time and receive
the Cash Surrender Value. Subject to certain limitations, the Policyowner may
also partially surrender the Policy at any time prior to the Maturity Date. In
the future, Phoenix Home Life may set a minimum partial surrender amount, not to
exceed $500. See "Surrenders--Partial Surrenders." A partial surrender will
result in a decrease in the death benefit under the Policy. See "Death Benefit."
If the Policy is totally or partially surrendered during the first ten Policy
Years, a Surrender Charge will apply. See "Surrender Charge." In addition, there
may be certain tax consequences as the result of a surrender. For example, a
Policy may be a "modified endowment contract" if the amount of premium paid
during the first seven Policy Years is more than the amount that would have been
paid if the Policy had provided for paid-up benefits after the payment of seven
level annual premiums. Distributions such as loans and full or partial
surrenders under a modified endowment contract may be taxable income to the
extent they exceed the premiums paid. If such income is distributed before the
Policyowner attains age 59 1/2, a 10% penalty tax may be imposed. See "Federal
Tax Considerations."
10. WHAT IS THE POLICY'S LOAN PRIVILEGE?
A Policyowner may obtain Policy loans in an amount up to 90% of the result
of subtracting the remaining surrender charge from the Policy Value. The
interest rate on a loan is at an effective annual rate as stated in the Policy,
compounded daily and payable on each Policy Anniversary in arrears. The
requested loan amount is transferred from the VUL Account to the loaned portion
of the Guaranteed Interest Account and is credited with interest at an effective
annual rate as stated in the Policy. Phoenix Home Life reserves the right not to
allow loans of less than $200 unless the loans are to pay premiums on another
policy issued by Phoenix Home Life. See "The Policy--Policy Loans."
The proceeds of Policy loans may be subject to Federal income tax under
certain circumstances. See "Federal Tax Considerations."
11. HOW ARE INSURANCE BENEFITS PAID?
Surrender and death benefits under the Policy may be paid in a lump sum or
under one of the payment options set forth in the Policy.
See "Payment Options."
PHOENIX HOME LIFE AND THE VARIABLE ACCOUNT
- -------------------------------------------------------------------------------
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Phoenix Home Life Mutual Insurance Company ("Phoenix Home Life") is a mutual
life insurance company originally chartered in Connecticut in 1851. Its
executive office is at One American Row, Hartford, Connecticut 06115 and its
main administrative office is at 100 Bright Meadow Boulevard, Enfield,
Connecticut 06083-1900. Its New York principal office is at 99 Troy Road, East
Greenbush, New York 12061. Phoenix Home Life is the nation's 13th largest mutual
life insurance company and has admitted assets of approximately $13.2
7
<PAGE>
billion. Phoenix Home Life sells insurance policies and annuity contracts
through its own field force of full time agents and through brokers. Its
operations are conducted in all 50 states, the District of Columbia, Canada and
Puerto Rico.
THE VUL ACCOUNT
The VUL Account is a separate account of Phoenix Home Life registered as a
unit investment trust under the Investment Company Act of 1940, as amended, and
it meets the definition of a "separate account" under that Act. Such
registration does not involve supervision of the management of the VUL Account
or Phoenix Home Life by the Securities and Exchange Commission.
The VUL Account currently has ten Sub-accounts available for allocation of
Policy Value. If in the future Phoenix Home Life determines that marketing needs
and investment conditions warrant, Phoenix Home Life may establish additional
Sub-accounts, which will be made available to existing Policyowners to the
extent and on a basis determined by Phoenix Home Life. Each Sub-account will
invest solely in shares of the Funds allocable to one of ten portfolios,
each having the specified investment objective set forth under "Investments of
the VUL Account--Participating Mutual Funds."
Phoenix Home Life does not guarantee the investment performance of the VUL
Account or any of its Sub-accounts. The Policy Value allocated to the VUL
Account depends on the investment performance of the Funds. Thus, the
Policyowner bears the full investment risk for all monies invested in the VUL
Account.
The VUL Account may include in advertisements, sales literature and other
communications information about and Series or Adviser's current investment
strategies and management style. Current strategies and style may change to
allow any Series to respond quickly to changing market and economic conditions.
From time to time the VUL Account may include specific portfolio holdings or
industries in such communications. To illustrate components of overall
performance, the Funds may separate their cumulative and average annual returns
into income and capital gains components; or cite separately as a return figure
the equity or bond return figure to well-known indices of market performance,
including, but not limited to: the S&P 500 Index, Dow Jones Industrial Average,
First Boston High Yield Index and Salomon Brothers Corporate and Government Bond
Indices.
The VUL Account may from time to time include in advertisements containing
total return the ranking of those performance figures relative to such figures
for groups of Sub-accounts having similar investment objectives as categorized
by ranking services such as Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc., Weisenberger Financial Services, Inc. and Morningstar, Inc.
Additionally, the Funds may compare a Series' performance results to other
investment or savings vehicles (such as certificates of deposit) and may refer
to results published in various publications such as Changing Times, Forbes,
Fortune, Money, Barron's, Business Week, Investor's Daily, The Stanger
Register, Stanger's Investment Adviser, The Wall Street Journal, The New York
Times, Consumer Reports, Registered Representative, Financial Planning,
Financial Services Weekly, Financial World, U.S. News and World Report,
Standard & Poor's, The Outlook, and Personal Investor. The Funds may from time
to time illustrate the benefits of tax deferral by comparing taxable investments
to investments made through tax-deferred retirement plans. The total return may
also be used to compare the performance of a Series against certain widely
acknowledged outside standards or indices for stock and bond market performance,
such as the Standard & Poor's 500 Stock Index (the "S&P 500"), Dow Jones
Industrial Average, Europe Australia Far East Index (EAFE), Consumer's Price
Index, Shearson Lehman Corporate Index and Shearson Lehman T-Bond Index. The S&P
500 is a commonly quoted market value-weighted and unmanaged index showing the
changes in the aggregate market value of 500 common stocks relative to the base
period 1940-43. The S&P is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of a
few companies listed on the American Stock Exchange or traded over the counter
are included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P represents about 80%
of the market value of all issues traded on the New York Stock Exchange.
The VUL Account is administered and accounted for as part of the general
business of Phoenix Home Life, but the income, gains, or losses of the VUL
Account are credited to or charged against the assets held in the VUL Account,
without regard to other income, gains, or losses of any other business Phoenix
Home Life may conduct. Under New York law, the assets of the VUL Account are not
chargeable with liabilities arising out of any other business Phoenix Home Life
may conduct. Nevertheless all obligations arising under the Policy are general
corporate obligations of Phoenix Home Life.
THE GUARANTEED INTEREST ACCOUNT
The Guaranteed Interest Account is not part of the VUL Account. It is
accounted for as part of the General Account. Phoenix Home Life reserves the
right to limit cumulative deposits, including transfers, to the unloaned portion
of the Guaranteed Interest Account to no more than $250,000 during any one-week
period. Phoenix Home Life will credit interest daily on the amounts allocated
under the Policy to the Guaranteed Interest Account. The credited rate will be
uniform by class. The loaned portion of the Guaranteed Interest Account will be
credited interest at an effective annual fixed rate of 6%. Interest on the
unloaned portion of the Guaranteed Interest Account will be credited at an
effective annual rate of not less than 4%.
Bi-weekly, Phoenix Home Life sets the interest rate that will apply to any
net premium or transferred amounts deposited to the unloaned portion of the
Guaranteed Interest Account. That rate will remain in effect for such deposits
for an initial guarantee period of one full year from the date of deposit. Upon
expiration of the initial one-year guarantee period (and each subsequent
one-year guarantee period thereafter), the rate to be applied to any deposits
whose guarantee period has just ended shall be the same rate as is applied to
new deposits allocated to the Guaranteed Interest Account at the time that the
guarantee period expired. This rate will likewise remain in effect for a
guarantee period of one full year from the date the new rate is applied. For
more complete information concerning the Guaranteed Interest Account, see
Appendix A.
8
<PAGE>
THE POLICY
- -------------------------------------------------------------------------------
INTRODUCTION
The Policy is a variable life insurance policy. The Policy has a death
benefit, Cash Surrender Value, and loan privilege such as is associated with a
traditional fixed benefit whole life policy. The Policy differs from a fixed
benefit whole life policy, however, because the Policyowner specifies into which
of several Sub-accounts of the VUL Account or the Guaranteed Interest Account
net premium is to be allocated. Each Sub-account of the VUL Account, in turn,
invests its assets exclusively in a portfolio of the Funds. The Policy Value
varies according to the investment performance of the Series to which Policy
Value has been allocated.
ELIGIBLE PURCHASERS
Any person up to the age of 75 is eligible to be insured under a newly
purchased Policy after providing acceptable evidence of insurability. A person
can purchase a Policy to insure the life of another person provided that the
Policyowner has an insurable interest in the life of the Insured, and the
Insured consents.
PREMIUM PAYMENT
The minimum Issue Premium for a Policy is generally 1/6 of the Planned
Annual Premium. The Issue Premium is due on the Policy Date. The Insured must be
alive when the Issue Premium is paid. Thereafter, the amount and payment
frequency of planned premiums are as shown on the schedule page of the Policy.
All premiums are payable in advance at Variable and Universal Life
Administration, except that the Issue Premium may be paid to an authorized agent
of Phoenix Home Life for forwarding to the Underwriting Department of Phoenix
Home Life.
Any premium payments will be reduced by the premium tax charge applicable in
the state of the Policyowner's last known address on record with Variable and
Universal Life Administration. The Issue Premium will also be reduced by the
Issue Expense Charge of $150 on a pro rata basis in equal monthly installments
over a 12 month period. Any unpaid balance of the Issue Expense Charge will be
paid to Phoenix Home Life upon Policy Lapse or termination.
Premium payments received during a grace period will also be reduced by the
amount needed to cover any monthly deductions during the grace period. The
remainder will be applied on the Payment Date to the various Sub-accounts of the
VUL Account or to the Guaranteed Interest Account, based on the premium
allocation schedule elected in the application for the Policy or as later
changed. The allocation schedule for premium payments may be changed by calling
or writing to Variable and Universal Life Administration. Allocations to the VUL
Account Sub-accounts or to the Guaranteed Interest Account must be expressed in
terms of whole percentages.
The number of units credited to a Sub-account of the VUL Account will be
determined by dividing the portion of the net premium applied to that
Sub-account by the unit value of the Sub-account on the Payment Date.
A Policyowner may increase or decrease the planned premium amount or payment
frequency at any time by written notice to Variable and Universal Life
Administration. Phoenix Home Life reserves the right to limit increases to such
maximums as may be established from time to time. Additional premium payments
may be made at any time. Each premium payment must at least equal $25 or, if
made during a grace period, the payment must equal the amount needed to prevent
lapse of the Policy.
A Policyholder may also elect a Waiver of Premium Rider. This rider provides
for the waiver of certain premium payments under the Policy under certain
conditions during a period of total disability of the Insured. Under its terms,
the specified premium will be waived upon Phoenix Home Life's receipt of proof
that the Insured is totally disabled and that the disability occurred while the
rider was In Force.
The Policy contains a total premium limit as shown on the Schedule Page.
This limit is applied to the sum of all premiums paid under the Policy. If the
total premium limit is exceeded, the Policyowner will receive the excess, with
interest at an annual rate of not less than 4%, not later than 60 days after the
end of the Policy Year in which the limit was exceeded. The Policy Value will
then be adjusted to reflect the refund. The amount to be taken from each
Sub-account or the Guaranteed Interest Account will be allocated in the same
manner as provided for monthly deductions unless the Policyowner requests
otherwise in writing. The total premium limit may be exceeded if additional
premium is needed to prevent lapse or if Phoenix Home Life determines that
additional premium would be permitted by Federal laws or regulations.
A Policyowner may authorize his bank to draw $25 or more from his personal
checking account monthly to purchase Units in any available Sub-account. The
amount the Policyowner designates will be automatically invested in the
Sub-account of his choice on the date the bank draws on his account.
Policies sold to officers, directors and employees of Phoenix Home Life (and
their spouses and children) will be credited with an amount equal to the
first-year commission that would apply on the amount of premium contributed.
This option is also available to career agents of Phoenix Home Life (and their
spouses and children).
ALLOCATION OF ISSUE PREMIUM
Phoenix Home Life will generally allocate the Issue Premium less
applicable charges to the VUL Account or to the Guaranteed Interest Account
upon receipt of a completed application, in accordance with the allocation
instructions in the application for a Policy. However, Policies issued in
certain states, and Policies issued in certain states pursuant to applications
which state the Policy is intended to replace existing insurance, are issued
with a Temporary Money Market Allocation Amendment. Under this Amendment,
Phoenix Home Life temporarily allocates the entire Issue Premium paid less
applicable charges (along with any other premiums paid during the Right to
Cancel Period) to the Money Market Sub-account of the VUL Account, and, at the
expiration of the Right to Cancel Period, the Policy Value of the Money Market
Sub-account is allocated among the Sub-accounts of the VUL Account or to the
Guaranteed Interest Account in accordance with the applicant's allocation
instructions in the application for insurance.
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RIGHT TO CANCEL PERIOD
A Policy may be returned by mailing or delivering it to Phoenix Home Life
within ten days after the Policyowner receives it (or longer in some states);
within ten days after Phoenix Home Life mails or delivers a written notice of
withdrawal right to the Policyowner; or within 45 days after the applicant signs
the application for insurance, whichever occurs latest (the "Right to Cancel
Period"). The returned Policy is treated as if Phoenix Home Life never issued
the Policy and, except for Policies issued with a Temporary Money Market
Allocation Amendment, Phoenix Home Life will return the sum of the following as
of the date Phoenix Home Life receives the returned Policy: (i) the then current
Policy Value less any unpaid loans and loan interest; plus (ii) any monthly
deductions, partial surrender fees, and other charges made under the Policy,
including investment advisory fees, or any Fund expenses deducted. The amount
returned for Policies issued with the Amendment will equal any premiums paid
less any unrepaid loans and loan interest, and less any partial surrender
amounts paid.
Phoenix Home Life reserves the right to disapprove an application for
processing within 7 days of receipt at Phoenix Home Life of the completed
application for insurance, in which event Phoenix Home Life will return the
premium paid. Even after approval of the application for processing, Phoenix
Home Life reserves the right to decline issuance of the Policy, in which event
Phoenix Home Life will refund the applicant the same amount as would have been
refunded under the Policy had it been issued but returned for refund during the
Right to Cancel Period.
TEMPORARY INSURANCE COVERAGE
On the date the application for a Policy is signed and submitted with the
Issue Premium, Phoenix Home Life issues a Temporary Insurance Receipt in
connection with the application. Under the Temporary Insurance Receipt, the
insurance protection applied for (subject to the limits of liability and in
accordance with the terms set forth in the Policy and in the Receipt) takes
effect on the date of the application.
TRANSFER OF POLICY VALUE
SYSTEMATIC TRANSFER PROGRAM
A Policyowner may elect to transfer funds automatically among the
Sub-accounts or the unloaned portion of the Guaranteed Interest Account ("GIA")
on a monthly, quarterly, semi-annual or annual basis under the Systematic
Transfer Program for Dollar Cost Averaging ("Systematic Transfer Program").
Under this Systematic Transfer Program, the minimum initial and subsequent
transfer amounts are $25 monthly, $75 quarterly, $150 semi-annually, or $300
annually. A Policyowner must have an initial value of $1,000 in the GIA or the
Sub-account that funds will be transferred from and if the value in that
Sub-account or the GIA drops below the elected transfer amount, the entire
remaining balance will be transferred and no more systematic transfers will be
processed. Funds may be transferred from only one Sub-account or the GIA, but
may be allocated to multiple Sub-accounts. Under the Systematic Transfer
Program, Policyowners may make more than one transfer per Policy Year from the
GIA, in approximate equal amounts over a minimum 18-month period. All transfers
under the Systematic Transfer Program will be executed on the basis of the
respective values as of the first of the month following receipt of the transfer
request. If the first of the month falls on a holiday or weekend, then the
transfer will be processed on the next succeeding business day.
NON-SYSTEMATIC TRANSFERS
Transfers among available Sub-accounts or the GIA and changes in premium
payment allocations may be requested in writing or by calling 1-800-892-4885,
between the hours of 8:30 AM and 4:00 PM Eastern Time and will be executed on
the date the request is received at Variable and Universal Life Administration,
except as noted below. Unless the Policyowner elects in writing not to authorize
telephone transfers or allocation changes, telephone transfer orders and
allocation changes will also be accepted on behalf of the Policyowner from his
or her registered representative. Phoenix Home Life and Phoenix Equity Planning
Corporation ("PEPCO") will employ reasonable procedures to confirm that
telephone instructions are genuine. They will require account and request
verification and will record telephone instructions on tape. All telephone
transfers will be confirmed in writing to the Policyowner. To the extent that
procedures reasonably designed to prevent unauthorized transfers are not
followed, Phoenix Home Life and PEPCO may be liable for following telephone
instructions for transfers that prove to be fraudulent. However, the Policyowner
would bear the risk of loss resulting from instructions entered by an
unauthorized third party that Phoenix Home Life and PEPCO reasonably believe to
be genuine. These telephone privileges may be modified or terminated at any time
and during times of extreme market volatility, may be difficult to exercise. In
such cases, the Policyowner should submit a Written Request.
Phoenix Home Life reserves the right to permit transfers of less than $500
only if the entire balance in the Sub-account or the GIA is transferred or if
the Systematic Transfer Program has been elected.
Phoenix Home Life reserves the right to prohibit a transfer to any
Sub-account of the VUL Account where the resultant value of the Policy's share
in that Sub-account immediately after the transfer would be less than $500. It
further reserves the right to require that the entire balance of a Sub-account
or the GIA be transferred if the share of the Policy in the value of that
Sub-account would, immediately after the transfer, be less than $500.
Unless Phoenix Home Life agrees otherwise or the Systematic Transfer Program
has been elected, a Policyowner may make only one transfer per Policy Year from
the unloaned portion of the GIA and the amount that may be transferred cannot
exceed the greater of $1,000 or 25% of the value of the Policy in the unloaned
portion of the GIA at the time of the transfer. Non-systematic transfers from
the unloaned portion of the GIA will be effectuated on the date of receipt by
Variable and Universal Life Administration except as otherwise may be requested
by the Policyowner.
For policies issued with the Temporary Money Market Allocation Amendment,
transfers may not be made until termination of the Right to Cancel Period.
DETERMINATION OF SUB-ACCOUNT VALUES
The unit value of each Sub-account of the VUL Account was set by Phoenix
Home Life on the first valuation date of each such Sub-account. The unit value
of a Sub-account of the VUL Account on any other Valuation Date is determined by
multiplying the unit value of that Sub-account on the just prior Valuation Date
by the Net Investment
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Factor for that Sub-account for the then current Valuation Period. The unit
value of each Sub-account of the VUL Account on a day other than a Valuation
Date is the unit value on the next Valuation Date. Unit values are carried to 6
decimal places. The unit value of each Sub-account of the VUL Account on a
Valuation Date is determined at the end of that day.
The Net Investment Factor for each Sub-account of the VUL Account is
determined by the investment performance of the assets held by the Sub-account
during the Valuation Period. Each valuation will follow applicable law and
accepted procedures. The Net Investment Factor is equal to item (D) below
subtracted from the result of dividing the sum of items (A) and (B) by item (C).
(A) The value of the assets in the Sub-account on the current Valuation
Date, including accrued net investment income and realized and
unrealized capital gains and losses, but excluding the net value of
any transactions during the current Valuation Period.
(B) The amount of any dividend (or, if applicable, any capital gain
distribution) received by the Sub-account if the "ex-dividend" date
for shares of the Fund occurs during the current Valuation Period.
(C) The value of the assets in the Sub-account as of the just prior
Valuation Date, including accrued net investment income and realized
and unrealized capital gains and losses, and including the net value
of all transactions during the Valuation Period ending on that date.
(D) The sum of the following daily charges multiplied by the number of
days in the current Valuation Period:
1. the mortality and expense risk charge; and
2. the charge, if any, for taxes and reserves for taxes on
investment income, and realized and unrealized capital gains.
DEATH BENEFIT
GENERAL
The death benefit (under Option 1) equals the Policy's face amount on the
date of the Insured's death or, if greater, the minimum death benefit on the
date of death. Under Option 2, the death benefit equals the Policy's face amount
on the date of the Insured's death plus the Policy Value. Under either Option,
the minimum death benefit is the Policy Value on the date of death of the
Insured increased by the applicable percentage from the table contained in the
Policy, based on the Insured's attained age at the beginning of the Policy Year
in which the death occurs. If no option is elected, Option 1 will apply.
GUARANTEED DEATH BENEFIT OPTION
For Policies with a face amount of at least $50,000, a guaranteed death
benefit rider may be purchased. Under this Policy rider, if a Policyowner pays
the required premium each year as specified in the rider, the death benefit
selected will be guaranteed for a certain specified number of years, regardless
of the investment performance of the Policy, and will equal either the initial
face amount or the face amount as later changed by increases or decreases. In
order to keep this guaranteed death benefit In Force, there may be limitations
on the amount of partial surrenders or decreases in face amount permitted.
LIVING BENEFITS OPTION
In the event of a terminal illness of the Insured, an accelerated payment of
up to 75% of the Policy's death benefit (up to a maximum of $250,000) is
available. The minimum face amount of the Policy after any such accelerated
benefit payment is $10,000.
PARTIAL SURRENDER AND DECREASES IN FACE AMOUNT: EFFECT ON
DEATH BENEFIT
A partial surrender or a decrease in face amount generally decreases the
death benefit. Upon a decrease in face amount or partial surrender, a partial
surrender charge will be deducted from Policy Value based on the amount of the
decrease or partial surrender. With a decrease in face amount, the death benefit
under a Policy would be reduced on the next Monthly Calculation Day. With a
partial surrender, the death benefit under a Policy would be reduced
immediately. A decrease in the death benefit may have certain tax consequences.
See "Federal Tax Considerations."
REQUESTS FOR DECREASE IN FACE AMOUNT
A Policyowner may request a decrease in face amount at any time after the
first Policy Year. Unless Phoenix Home Life agrees otherwise, the decrease must
at least equal $10,000 and the face amount remaining after the decrease must at
least equal $25,000. All face amount decrease requests must be in writing and
will be effective on the first Monthly Calculation Day following the date
Phoenix Home Life approves the request. A partial surrender charge will be
deducted from the Policy Value based on the amount of the decrease, upon a
decrease in face amount. The charge will equal the applicable surrender charge
that would apply to a full surrender multiplied by a fraction (the decrease in
face amount divided by the face amount of the Policy before the decrease).
SURRENDERS
GENERAL
At any time during the lifetime of the Insured and while the Policy is In
Force, the Policyowner may partially or fully surrender the Policy by sending a
written release and surrender in a form satisfactory to Phoenix Home Life to
Variable and Universal Life Administration, along with the Policy if Phoenix
Home Life so requires. The amount available for surrender is the Cash Surrender
Value at the end of the Valuation Period during which the surrender request is
received at Variable and Universal Life Administration.
Upon partial or full surrender, Phoenix Home Life generally will pay the
amount surrendered to the Policyowner within seven days after Phoenix Home Life
receives the Written Request for the surrender. Under certain circumstances, the
surrender payment may be postponed. See "General Provisions--Postponement of
Payments." For the Federal tax effects of partial and full surrenders, see
"Federal Tax Considerations."
FULL SURRENDERS
If the Policy is being fully surrendered, the Policy itself must be returned
to Variable and Universal Life Administration, along with the written release
and surrender of all claims in a form satisfactory to
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Phoenix Home Life. A Policyowner may elect to have the amount paid in a lump sum
or under a payment option. See "Surrender Charge" and "Payment Options."
PARTIAL SURRENDERS
A Policyowner may obtain a partial surrender of the Policy by requesting
that part of the Policy's Cash Surrender Value be paid. The Policyowner may do
this at any time during the lifetime of the Insured while the Policy is In Force
with a Written Request to Variable and Universal Life Administration. Phoenix
Home Life reserves the right to require that the Policy be returned before
payment is made. A partial surrender will be effective on the date the Written
Request is received or, if required, the date the Policy is received. Surrender
proceeds may be applied under any of the payment options described under
"Payment of Proceeds--Payment Options."
Phoenix Home Life reserves the right not to allow partial surrenders of less
than $500. In addition, if the share of the Policy Value in any Sub-account or
in the Guaranteed Interest Account that would be reduced as a result of a
partial surrender would, immediately after the partial surrender, be less than
$500, Phoenix Home Life reserves the right to require that as part of any
partial surrender, the entire remaining balance in that Sub-account or the
Guaranteed Interest Account be surrendered.
Upon a partial surrender the Policy Value will be reduced by the sum of the
following:
(i) The Partial Surrender Amount Paid. This amount comes from a
reduction in the Policy's share in the value of each Sub-account or
the Guaranteed Interest Account based on the allocation requested at
the time of the partial surrender. If no allocation request is made,
the assessment to each Sub-account will be made in the same manner
as that provided for monthly deductions.
(ii) The Partial Surrender Fee. This fee is the lesser of $25 or 2% of
the partial surrender amount paid. The assessment to each
Sub-account or the Guaranteed Interest Account will be made in the
same manner as provided for the partial surrender amount paid.
(iii) A Partial Surrender Charge. This charge is equal to a pro-rata
portion of the applicable surrender charge that would apply
to a full surrender, determined by multiplying the applicable
surrender charge by a fraction (equal to the partial surrender
amount payable divided by the result of subtracting the
applicable surrender charge from the Policy Value). This
amount is assessed against the Sub-account or the
Guaranteed Interest Account in the same manner as provided
for the partial surrender amount paid.
The Cash Surrender Value will be reduced by the partial surrender amount
paid plus the partial surrender fee. The Face Amount of the Policy will also be
reduced by the same amount as the Policy Value is reduced as described above.
POLICY LOANS
While the Policy is In Force, a loan may be obtained against the Policy up
to the available loan value. The loan value on any day is 90% of the result of
subtracting the then remaining surrender charge from the Policy Value. The
available loan value is the loan value on the current day less any outstanding
Debt.
The amount of any loan will be added to the loaned portion of the Guaranteed
Interest Account and subtracted from the Policy's share of the Sub-accounts or
the unloaned portion of the Guaranteed Interest Account, based on the allocation
requested at the time of the loan. The total reduction will equal the amount
added to the loaned portion of the Guaranteed Interest Account. Allocations must
generally be expressed in terms of whole percentages. If no allocation request
is made, the amount subtracted from the share of each Sub-account or the
unloaned portion of the Guaranteed Interest Account will be determined in the
same manner as provided for monthly deductions. Interest will be credited and
the loaned portion of the GIA will increase at an effective annual rate of
6.00%, compounded daily and payable in arrears. At the end of each Policy Year
and at the time of any Debt repayment, interest credited to the loaned portion
of the GIA will be transferred to the unloaned portion of the GIA.
Debt may be repaid at any time during the lifetime of the Insured while the
Policy is In Force. Any Debt repayment received by Phoenix Home Life during a
grace period will be reduced to cover any overdue monthly deductions and only
the balance will be applied to reduce the Debt. Such balance, in excess of any
outstanding accrued loan interest, will be applied to reduce the loaned portion
of the Guaranteed Interest Account and will be transferred to the unloaned
portion of the Guaranteed Interest Account to the extent that loaned amounts
taken from such Account have not previously been repaid. Otherwise, such balance
will be transferred among the Sub-accounts as the Policyowner requests upon
repayment and, if no allocation request is made, according to the most recent
premium allocation schedule on file.
While there is outstanding Debt on the Policy, any payments received by
Phoenix Home Life for the Policy will be applied directly to reduce the Debt
unless specified as a premium payment by the Policyowner. Until the Debt is
fully repaid, additional Debt repayments may be made at any time during the
lifetime of the Insured while the Policy is In Force.
Failure to repay a policy loan or to pay loan interest will not terminate
the Policy except as otherwise provided under the terms of the Policy concerning
the grace period and lapse.
The proceeds of Policy loans may be subject to Federal income tax
under certain circumstances. See "Federal Tax Considerations."
In the future, Phoenix Home Life may set a minimum Policy loan amount not to
exceed $200. However, any such minimum loan amount will not apply to any loan,
the proceeds of which are used to pay a premium due on another policy issued by
Phoenix Home Life.
The Policyowner will pay interest on the loan at an effective annual rate,
compounded daily and payable in arrears. For the first ten Policy Years or until
the Policyowner reaches age 65, whichever occurs first, the rate will be 8.00%
and thereafter the rate will be 7.00%. At the end of each Policy Year, any
interest due on the Debt will be treated as a loan and will be offset by a
transfer from the Policyowner's values to the value of the loaned portion of the
Guaranteed Interest Account.
A Policy loan, whether or not repaid, has a permanent effect on the Policy
Value because the investment results of the Sub-accounts or
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unloaned portion of the Guaranteed Interest Account will apply only to the
amount remaining in the Sub-accounts or the unloaned portion of the Guaranteed
Interest Account. The longer a loan is outstanding, the greater the effect is
likely to be. The effect could be favorable or unfavorable. If the Sub-accounts
or the unloaned portion of the Guaranteed Interest Account earn more than 6.00%
per annum, which is the annual interest rate for funds held in the loaned
portion of the Guaranteed Interest Account, Policy Value does not increase as
rapidly as it would have had no loan been made. If the Sub-accounts or the
Guaranteed Interest Account earn less than 6.00% per annum, Policy Value is
greater than it would have been had no loan been made. A Policy loan, whether or
not repaid, also has an effect on the Policy's Death Benefit due to any
resulting differences in Cash Surrender Value.
LAPSE
Unlike conventional life insurance policies, the payment of the Issue
Premium, no matter how large, or the payment of additional premiums will not
necessarily continue the Policy In Force to its Maturity Date. Policy Value must
remain positive to avoid lapse. Beginning in the third Policy Year, the Cash
Surrender Value must also be positive to avoid lapse. However, until the Cash
Surrender Value becomes positive for the first time, the Policy will not lapse
as long as all premiums planned at issue have been paid. Subject to the
foregoing, lapse will occur when the Cash Surrender Value is insufficient to
cover the monthly deduction, and a grace period expires without payment of the
additional amount required. If the Cash Surrender Value is insufficient to cover
the monthly deduction, the Policyowner must pay during the grace period the
amount equal to three times the required monthly deduction. See "Charges and
Deductions."
If on any Monthly Calculation Day during the first two Policy Years, the
Policy Value is insufficient to cover the monthly deduction, a grace period of
61 days will be allowed for the payment of an amount equal to three times the
required monthly deduction. If on any Monthly Calculation Day during any
subsequent Policy Year, the Cash Surrender Value (which has become positive) is
less than the required monthly deduction, a grace period of 61 days will be
allowed for the payment of an amount equal to three times the required monthly
deduction. The Policy will continue In Force during any such grace period
although, Sub-account transfers, loans, partial or full surrenders will not be
permitted. Failure to pay the additional amount within the grace period will
result in lapse of the Policy, but not before 30 days have elapsed since Phoenix
Home Life mailed written notice to the Policyowner. If a premium payment for the
additional amount is received by Phoenix Home Life during the grace period, any
amount of premium over what is required to prevent lapse will be allocated among
the Sub-accounts of the VUL Account or to the Guaranteed Interest Account in
accordance with the then current premium allocation schedule. In determining the
amount of "excess" premium to be applied to the Sub-accounts or the Guaranteed
Interest Account, Phoenix Home Life will deduct the premium tax and the amount
needed to cover any monthly deductions made during the grace period. If the
Insured dies during the grace period, the death benefit will equal the amount of
the death benefit immediately prior to the commencement of the grace period.
PAYMENT OF PREMIUMS DURING PERIOD OF DISABILITY
A Policyholder may also elect a Waiver of Premium Rider. This rider provides
for the waiver of certain premium payments under the Policy under certain
conditions during a period of total disability of the Insured. Under its terms,
the specified premium will be waived upon Phoenix Home Life's receipt of proof
that the insured is totally disabled and that the disability occurred while the
rider was In Force. The terms of this rider may vary by state.
ADDITIONAL INSURANCE OPTIONS
While the Policy is In Force and the Policyowner is insurable, the
Policyowner will have the option to purchase additional insurance on the same
Insured with the same guaranteed rates as the Policy without being assessed an
Issue Expense Charge. Phoenix Home Life will require evidence of insurability
and charges will be adjusted for the Insured's new attained age and any change
in risk classification. However, if elected on the application, the Policyowners
may, at predetermined future dates, purchase additional insurance protection on
the same Insured without evidence of insurability. (See "Purchase Protection
Plan Riders.")
In addition, once each Policy Year, a Policyowner may request an increase in
face amount. This request should be made within 90 days prior to the Policy
Anniversary and is subject to an issue expense charge of $3.00 per $1,000 of
increase in face amount, up to a maximum of $150, and to Phoenix Home Life's
receipt of adequate evidence of insurability. A Right to Cancel Period as
described in "The Policy" section of this Prospectus applies to each increase in
face amount.
ADDITIONAL RIDER BENEFITS
A Policyowner may purchase additional benefits under a Policy. These
benefits are cancellable by the Policyowner at any time. A charge will be
deducted monthly from your Policy Value for each additional rider benefit
chosen except where noted below. Riders listed below that specify "no charge"
are automatically included in your Policy. More details will be included in
the form of a Policy rider if any of these benefits is chosen. The following
benefits are currently available; however, additional riders may be available as
described in the Policy.
O DISABILITY WAIVER OF SPECIFIED PREMIUM RIDER
Phoenix Home Life waives the specified premium if the Insured becomes
totally disabled and the disability continues for at least six months.
Premiums will be waived to the Policy Anniversary nearest the Insured's
65th birthday (provided that the disability continues), unless premiums
have been waived continuously during the entire five years prior to such
date in which case the waiver will continue beyond that date. The
premium will be waived upon Phoenix Home Life's receipt that the Insured
is totally disabled and that the disability occurred while the rider was
In Force. The terms may vary by State.
O ACCIDENTAL DEATH BENEFIT RIDER
An additional death benefit will be paid if the Insured dies from bodily
injury that results from an accident if the Insured dies no later than
90 days after injury; and before the Policy Anniversary nearest the
Insured's 75th birthday.
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O DEATH BENEFIT PROTECTION RIDER
The purchase of this rider provides that the death benefit will be
guaranteed. The amount of the guaranteed death benefit is equal to the
initial face amount, or the face amount that may later be increased or
decreased by the Policyholder provided that certain minimum premiums are
paid. Unless Phoenix Home Life agrees otherwise, the initial face amount
and the face amount remaining after any decrease must at least equal
$50,000 and the minimum issue age of the Insured is 20. Three (3) death
benefit guarantee periods are available in all States except New York.
The minimum premium required to maintain the guaranteed death benefit is
based on the length of the guarantee period as elected on the
application. The 3 available guarantee periods are:
Level: Expiry Date of Death Benefit Guaranteed, the later of:
1 The policy anniversary nearest the Insured's 70th
birthday or the 7th Policy Year
2 The policy anniversary nearest the Insured's 80th
birthday or the 10th Policy Year
3 The policy anniversary nearest the Insured's 95th
birthday.
Level 1 or 2 guarantees may be extended provided that the Policy's Cash
Surrender Value is sufficient and the Policyowner pays the new Minimum Required
Premium.
For Policies issued in New York, 2 guarantee periods are available:
1 The policy anniversary nearest the Insured's 75th birthday
or the 10th Policy Year
2 The policy anniversary nearest the Insured's 95th birthday.
O FACE AMOUNT OF INSURANCE INCREASE RIDER
Under the terms of this rider, any time after the first Policy
Anniversary, a Policyholder may request an increase in the face amount
of insurance provided under the Policy. Requests for face amount
increases must be made in writing, and Phoenix Home Life requires
additional evidence of insurability. The effective date of the increase
will generally be the Policy Anniversary following approval of the
increase. The increase may not be less than $25,000 and no increase
will be permitted after the Insured's age 75. The charge for the
increase is $3 per thousand of face amount increase requested subject
to a maximum of $150. No additional monthly administration charge will
be assessed for face amount increases. Phoenix Home Life will deduct
any charges associated with the increase (the increases in cost of
insurance charges), from the Policy Value, whether or not the
Policyowner pays an additional premium in connection with the increase.
The surrender charge applicable to the Policy will also increase. At
the time of the increase, the Cash Surrender Value must be sufficient
to pay the monthly deduction on that date, or additional premiums will
be required to be paid on or before the effective date. Also, a new
Right to Cancel period (see "The Policy--Right to Cancel Period") will
be established for the amount of the increase. For a discussion of
possible implications of a material change in the Policy resulting from
the increase, see "Material Change Rules." There is no charge for this
rider.
O WHOLE LIFE EXCHANGE OPTION RIDER
This rider permits the Policyowner to exchange his Policy for a
fixed-benefit whole life policy at the later of age 65 or Policy Year
15. There is no charge for this rider.
O PURCHASE PROTECTION PLAN RIDER
Under this rider a Policyowner may, at pre-determined future dates,
purchase additional insurance protection without evidence of
insurability.
O LIVING BENEFITS RIDER
Under certain conditions, in the event of the terminal illness of the
Insured, an accelerated payment of up to 75% of the Policy's death
benefit (up to a maximum of $250,000) is available. The minimum face
amount of the Policy after any such accelerated benefit payment is
$10,000. There is no charge for this rider.
INVESTMENTS OF THE VUL ACCOUNT
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PARTICIPATING MUTUAL FUNDS
THE PHOENIX EDGE SERIES FUND
Certain Sub-accounts of the VUL Account invest in corresponding Series of
The Phoenix Edge Series Fund, a Massachusetts business trust. The Fund currently
has the following Series available through the Policies:
MONEY MARKET SERIES: The investment objective of the Money Market Series is
to provide maximum current income consistent with capital preservation and
liquidity.
GROWTH SERIES: The investment objective of the Growth Series is to achieve
intermediate and long-term growth of capital, with income as a secondary
consideration.
MULTI-SECTOR FIXED INCOME ("MULTI-SECTOR") SERIES: The investment
objective of the Multi-Sector Series is to seek long-term total return by
investing in a diversified portfolio of high yield (high risk) and high quality
fixed income securities. For a discussion of the risks associated with investing
in high yield bonds, please see the accompanying Fund prospectus.
TOTAL RETURN SERIES: The investment objective of the Total Return Series is
to realize as high a level of total rate of return over an extended period of
time as is considered consistent with prudent investment risk (total rate of
return consists of capital appreciation, current income, including dividends and
interest, possible premiums and short-term gains from purchasing and selling
options and financial futures).
INTERNATIONAL SERIES: The investment objective of the International Series
is to seek a high total return consistent with reasonable risk. The
International Series intends to invest primarily in an internationally
diversified portfolio of equity securities. It intends to reduce its risk by
engaging in hedging transactions involving options, futures contracts
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and foreign currency transactions. The International Series provides a means for
investors to invest a portion of their assets outside the United States.
BALANCED SERIES: The investment objective of the Balanced Series is to seek
reasonable income, long-term capital growth and conservation of capital. The
Balanced Series intends to invest based on combined considerations of risk,
income, capital enhancement and protection of capital value.
REAL ESTATE SERIES: The investment objective of the Real Estate Securities
Series is to seek capital appreciation and income with approximately equal
emphasis. It intends under normal circumstances to invest in marketable
securities of publicly traded real estate investment trusts (REITs) and
companies that operate, develop, manage and/or invest in real estate located
primarily in the United States.
STRATEGIC THEME SERIES: The investment objective of the Strategic Theme
Series is to seek long-term appreciation of capital by identifying securities
benefiting from long-term trends present in the United States and abroad. The
Strategic Theme Series intends to invest primarily in common stocks believed to
have substantial potential for capital growth.
WANGER ADVISORS TRUST
Certain Sub-accounts of the VUL Account invest in corresponding Series of
the Wanger Advisors Trust. The available Series and their fundamental objectives
are as follows:
WANGER U.S. SMALL CAP ("U.S. SMALL CAP") SERIES: The investment
objective of the U.S. Small Cap Series is to provide long-term growth. The
U.S. Small Cap will invest primarily in securities of U.S. companies with
total common stock market capitalization of less than $1 billion.
WANGER INTERNATIONAL SMALL CAP ("INTERNATIONAL SMALL CAP") SERIES: The
investment objective of the International Small Cap Series is to provide
long-term growth. The International Small Cap will invest primarily in
securities of non-U.S. companies with total common stock market capitalization
of less than $1 billion.
Each Series will be subject to the market fluctuations and risks inherent in
the ownership of any security and there can be no assurance that any Series'
stated investment objective will be realized.
In addition to being sold to the VUL Account, shares of the Fund are also
sold to the Phoenix Home Life Variable Accumulation Account, a separate account
utilized by Phoenix Home Life to receive and invest premiums paid under certain
variable annuity contracts issued by Phoenix Home Life. Shares of the Fund may
also be sold to other separate accounts of Phoenix Home Life or its affiliates
or of other insurance companies.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Fund simultaneously. Although neither Phoenix Home Life nor the
Fund currently foresees any such disadvantages either to variable life insurance
Policyowners or to variable annuity Contractowners, the Fund's Trustees intend
to monitor events in order to identify any material conflicts between variable
life insurance Policyowners and variable annuity Contractowners and to determine
what action, if any, should be taken in response thereto. Material conflicts
could result from, for example, (1) changes in state insurance laws, (2) changes
in Federal income tax laws, (3) changes in the investment management of any
portfolio of the Fund, or (4) differences in voting instructions between those
given by variable life insurance Policyowners and those given by variable
annuity Contractowners. Phoenix Home Life will, at its own expense, remedy
such material conflict including, if necessary, segregating the assets
underlying the variable life insurance policies and the variable annuity
contracts and establishing a new registered investment company.
INVESTMENT ADVISERS TO THE PHOENIX EDGE SERIES FUND
The Phoenix Edge Series Fund's investment advisers are Phoenix Investment
Counsel, Inc. ("PIC") and Phoenix Realty Securities, Inc. ("PRS") (the
"Advisers"), which are located at 56 and 38 Prospect Street, respectively,
Hartford, Connecticut 06115. PIC was originally organized in 1932 as John P.
Chase, Inc. In addition to the Fund, it also serves as investment adviser to
the Phoenix Series Fund, Phoenix Total Return Fund, Inc.and Phoenix
Multi-Portfolio Fund and as sub-adviser to American Skandia, Chubb America
Fund, Inc., Sun America Series Trust and JNL Series Trust.
PRS was formed in 1994 as an indirect subsidiary of Phoenix Home Life. In
addition to the Fund, it also serves as investment adviser to the Real Estate
Portfolio of the Phoenix Multi-Portfolio Fund.
ABKB/LaSalle Securities Limited Partnership (ABKB), a subsidiary of LaSalle
Partners, serves as sub-adviser to the Real Estate Series. ABKB's principal
place of business is located at 100 East Pratt Street, Baltimore, Maryland
21202. ABKB has been a registered investment adviser since 1979.
All of the outstanding stock of PIC is owned by Phoenix Equity Planning
Corporation ("PEPCO"), an indirect subsidiary of Phoenix Home Life. PEPCO also
performs bookkeeping and pricing and administrative services for the Fund. PEPCO
is registered as a broker-dealer in fifty states. The executive offices of
Phoenix Home Life are located at One American Row, Hartford, Connecticut 06115
and the principal offices of PEPCO are located at 100 Bright Meadow Boulevard,
P.O. Box 2200, Enfield, Connecticut 06083-2200.
INVESTMENT ADVISERS TO THE WANGER ADVISORS TRUST
The investment adviser to the Wanger Advisors Trust is Wanger Asset
Management, L.P. Wanger's principal place of business is located at 227 West
Monroe Street, Suite 3000, Chicago, Illinois 60606.
The Advisers furnish continuously an investment program for each Series and
manage the investment and reinvestment of the assets of each Series subject at
all times to the authority and supervision of the Trustees. A more detailed
discussion of the Advisers and the Investment Advisory Agreements is contained
in the accompanying prospectus for the Fund.
REINVESTMENT AND REDEMPTION
All dividend distributions of the Funds are automatically
reinvested in shares of the Funds at their net asset value on the date
of distribution; all capital gains distributions of the Funds, if any, are
likewise reinvested at the net asset value on the record date. Phoenix
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Home Life redeems Funds shares at their net asset value to the extent
necessary to make payments under the Policy.
SUBSTITUTION OF INVESTMENTS
Phoenix Home Life reserves the right, subject to compliance with the law as
currently applicable or subsequently changed, to make additions to, deletions
from, or substitutions for the investments held by the VUL Account. In the
future Phoenix Home Life may establish additional Sub-accounts within the VUL
Account, each of which will invest solely in shares of a designated portfolio of
the Funds with a specified investment objective. These portfolios will be
established if, and when, in the sole discretion of Phoenix Home Life, marketing
needs and investment conditions warrant, and will be made available under
existing Policies to the extent and on a basis to be determined by Phoenix Home
Life.
If shares of any of the portfolios of the Funds should no longer be
available for investment, or if in the judgment of Phoenix Home Life's
management further investment in shares of any of the portfolios should become
inappropriate in view of the objectives of the Policy, then Phoenix Home Life
may substitute shares of another mutual fund for shares already purchased, or to
be purchased in the future, under the Policy. No substitution of mutual fund
shares held by the VUL Account may take place without prior approval of the
Securities and Exchange Commission, and prior notice to the Policyowner. In the
event of a substitution, the Policyowner will be given the option of
transferring the Policy Value of the Sub-account in which the substitution is to
occur to another Sub-account.
PERFORMANCE HISTORY
From time to time the VUL Account may include the performance history of any
or all Sub-accounts, in advertisements, sales literature or reports. PERFORMANCE
INFORMATION ABOUT EACH SUB-ACCOUNT IS BASED ON PAST PERFORMANCE ONLY AND IS NOT
AN INDICATION OF FUTURE PERFORMANCE. Performance information may be expressed as
yield and effective yield of the Money Market Sub-account, as yield of the
Multi-Sector Sub-account and as total return of any Sub-account. Current yield
for the Money Market Sub-account will be based on the income earned by the
Sub-account over a given 7-day period (less a hypothetical charge reflecting
deductions for expenses taken during the period) and then annualized, i.e., the
income earned in the period is assumed to be earned every seven days over a
52-week period and is stated in terms of an annual percentage return on the
investment. Effective yield is calculated similarly but reflects the compounding
effect of earnings on reinvested dividends. Yield and effective yield reflect
the recurring charges on the Account level including the monthly administrative
charge.
Yield calculations of the Money Market Sub-account used for illustration
purposes are based on the consideration of a hypothetical participant's account
having a balance of exactly one Unit at the beginning of a seven-day period,
which period will end on the date of the most recent financial statements. The
yield for the Sub-account during this seven-day period will be the change in
the value of the hypothetical participant's account's original Unit. The
following is an example of this yield calculation for the Money Market
Sub-account based on a seven-day period ending December 31, 1995.
Example:
Assumptions:
Value of hypothetical pre-existing account with exactly one unit
at the beginning of the period:................. 1.324187
Value of the same account (excluding capital changes) at the
end of the seven-day period:.................................... 1.325408
Calculation:
Ending account value ............................................ 1.325408
Less beginning account value .................................... 1.324187
Net change in account value ..................................... 0.001221
Base period return:
(adjusted change/beginning account value) ....................... 0.000922
Current yield = return x (365/7) = ............................... 4.81%
Effective yield = [(1 + return)365/7] - 1 = ...................... 4.92%
The current yield and effective yield information will fluctuate, and
publication of yield information may not provide a basis for comparison with
bank deposits, other investments which are insured and/or pay a fixed yield for
a stated period of time, or other investment companies, due to charges which
will be deducted on the Account level.
For the Multi-Sector Sub-account, quotations of yield will be based on all
investment income per unit earned during a given 30-day period (including
dividends and interest), less expenses accrued during the period ("net
investment income"), and are computed by dividing net investment income by the
maximum offering price per unit on the last day of the period.
When a Sub-account advertises its total return, it will usually be
calculated for one year, five years, and ten years or since inception if the
Sub-account has not been in existence for at least ten years. Total return is
measured by comparing the value of a hypothetical $10,000 investment in the
Sub-account at the beginning of the relevant period to the value of the
investment at the end of the period, assuming the reinvestment of all
distributions at net asset value and the deduction of an applicable Policy
charges except for cost of insurance and surrender charges (which vary by
Insured) and premium taxes (which vary by state) at the beginning of the
relevant period.
For those Sub-accounts within the VUL Account that have not been available
for one of the quoted periods, the standardized average annual total return
quotations will show the investment performance such Sub-account would have
achieved (reduced by the applicable charges) had it been available to invest in
shares of the Fund for the period quoted.
Below are quotations of standardized average annual total return calculated
as described above.
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIOD ENDED 12/31/95
-----------------------------
COMMENCEMENT LIFE OF
SERIES DATES 1 YEAR 5 YEARS 10 YEARS FUND
- ------ ----- ------ ------- -------- ----
Multi-Sector..... 01/01/83 20.06% 10.47% 8.87% 9.41%
Balanced......... 05/01/92 19.88% N/A N/A 8.17%
Total Return..... 09/17/84 14.87% 11.34% 10.51% 11.33%
Growth........... 01/01/83 27.23% 18.32% 15.25% 17.33%
International.... 05/01/90 6.46% 7.86% N/A 5.02%
Money Market..... 01/01/83 2.67% 2.62% 4.38% 5.12%
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ANNUAL TOTAL RETURNS*
---------------------
MULTI- TOTAL INTER- MONEY
YEAR SECTOR BALANCED RETURN GROWTH NATIONAL MARKET
- ---- ------ -------- ------ ------ -------- ------
1983........... 5.1% N/A N/A 31.7% N/A 7.4%
1984........... 10.3% N/A -1.4% 9.7% N/A 9.2%
1985........... 19.5% N/A 26.2% 33.7% N/A 7.1%
1986........... 18.2% N/A 14.7% 19.4% N/A 5.6%
1987........... 0.2% N/A 11.6% 6.0% N/A 5.6%
1988........... 9.5% N/A 1.4% 3.0% N/A 6.5%
1989........... 6.9% N/A 18.4% 34.4% N/A 7.9%
1990........... 4.4% N/A 5.1% 3.2% -8.9% 7.4%
1991........... 18.5% N/A 28.1% 41.5% 18.7% 5.0%
1992........... 9.1% 8.8% 9.7% 9.3% -13.6% 2.7%
1993........... 15.0% 7.8% 10.1% 18.8% 37.3% 2.1%
1994........... -6.2% -3.6% -2.2% 0.7% -0.7% 3.0%
1995........... 22.6% 22.4% 17.3% 29.9% 8.7% 4.9%
*Sales charges have not been deducted from the Annual Total Returns
THESE RATES OF RETURN ARE NOT AN ESTIMATE OR GUARANTEE OF FUTURE
PERFORMANCE. THEY DO NOT ILLUSTRATE HOW ACTUAL PERFORMANCE WILL AFFECT THE
BENEFITS UNDER A POLICY; FOR THIS INFORMATION SEE APPENDIX B "ILLUSTRATIONS OF
DEATH BENEFITS, POLICY VALUES AND CASH SURRENDER VALUES."
The Funds Annual Reports, available upon request and without charge,
contain a discussion of the performance of the Funds and a comparison of that
performance to a securities market index.
CHARGES AND DEDUCTIONS
- -------------------------------------------------------------------------------
Charges are deducted in connection with the Policy to compensate Phoenix
Home Life for: (1) incurring expenses in distributing the Policy; (2) issuing
the Policy; (3) premium taxes incurred on premiums received; (4) providing the
insurance benefits set forth in the Policy; and (5) assuming certain risks in
connection with the Policy. The nature and amount of these charges are described
more fully below.
1. MONTHLY DEDUCTION
A charge is deducted monthly from the Policy Value under a Policy ("monthly
deduction") to pay: the cost of insurance provided under the Policy, the cost of
any rider benefits provided, any unpaid balance of the issue expense charge, and
an administrative charge. This administrative charge is currently set at $5.00
per month but it is guaranteed not to exceed $10.00 per month. The monthly
deduction is deducted on each Monthly Calculation Day. It is allocated among the
Sub-accounts of the VUL Account and the unloaned portion of the Guaranteed
Interest Account based on the allocation schedule for monthly deductions
specified by the applicant in the application for a Policy or as later changed
by the Policyowner. In the event that the Policy's share in the value of the
Sub-accounts or the unloaned portion of the Guaranteed Interest Account is
insufficient to permit the withdrawal of the full monthly deduction, the
remainder will be taken on a proportionate basis from the Policy's share of each
of the other Sub-accounts and the unloaned portion of the Guaranteed Interest
Account. The number of units deducted will be determined by dividing the portion
of the monthly deduction allocated to each Sub-account or to the unloaned
portion of the Guaranteed Interest Account by the unit value on the Monthly
Calculation Day. Because portions of the monthly deduction, such as the cost of
insurance, can vary from month to month, the monthly deduction itself may vary
in amount from month to month.
(a) ISSUE EXPENSE CHARGE. A cost-based issue administration
charge of $150 is assessed on a pro rata basis in equal
monthly installments over a 12-month period to
compensate Phoenix Home Life for underwriting and start-
up expenses in connection with issuing a Policy. Phoenix
Home Life may reduce or eliminate the Issue Expense
Charge for Policies issued under group or sponsored
arrangements. Generally, administrative costs per Policy
vary with the size of the group or sponsored arrangement,
its stability as indicated by its term of existence and certain
characteristics of its members, the purposes for which the
Policies are purchased and other factors. The amounts of
any reductions will be considered on a case-by-case basis
and will reflect the reduced administration costs expected as
a result of sales to a particular group or sponsored
arrangement.
(b) COST OF INSURANCE. In order to calculate the cost of
insurance charge, Phoenix Home Life multiplies the
applicable cost of insurance rate by the difference between
the death benefit selected (death benefit Option 1 if no
selection is made) and the Policy Value. Generally, cost of
insurance rates are based on the sex, attained age and risk
class of the Insured. However, in certain states and for
policies issued in conjunction with certain qualified plans,
cost of insurance rates are not based on sex. The actual
monthly cost of insurance rates are based on Phoenix Home
Life's expectations of future mortality experience. They will
not, however, be greater than the guaranteed cost of
insurance rates set forth in the Policy. These guaranteed
maximum rates are equal to 100% of the 1980
Commissioners Standard Ordinary ("CSO") Mortality Table,
with appropriate adjustment for the Insured's risk
classification. Any change in the cost of insurance rates will
apply to all persons of the same sex, insurance age and risk
class whose Policies have been In Force for the same length
of time. The risk class of an Insured may affect the cost of
insurance rate. Phoenix Home Life currently places Insureds
into a standard risk class or a risk class involving a higher
mortality risk, depending upon the health of the Insured as
determined by medical information that Phoenix Home Life
requests. In an otherwise identical Policy, Insureds in the
standard risk class will have a lower cost of insurance than
those in the risk class with the higher mortality risk. The
standard risk class is also divided into three categories:
smokers and nonsmokers and those who have never
smoked. Non-smokers will generally incur a lower cost of
insurance than similarly situated Insureds who smoke.
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2. PREMIUM TAXES.
Various states and subdivisions impose a tax on premiums received by
insurance companies. Premium taxes vary from state to state. The assessment made
for each premium paid is equal to the tax assessed by the state in which the
Policyowner resides according to Phoenix Home Life's records at the time of the
payment. Currently, the taxes imposed by states on premiums range from 0.75% to
4% of premiums paid. Moreover, certain municipalities in Louisiana, Kentucky and
South Carolina also impose taxes on premiums paid, in addition to the state
taxes imposed by these states. The premium tax charge represents an amount
Phoenix Home Life considers necessary to pay all premium taxes imposed by such
states and any subdivisions thereof, and Phoenix Home Life does not expect to
derive a profit from this charge. These taxes are deducted from the Issue
Premium, and from each subsequent premium payment.
3. MORTALITY AND EXPENSE RISK CHARGE
Phoenix Home Life will deduct a daily charge from the VUL Account at an
annual rate of 0.80% of the average daily net assets of the VUL Account to
compensate for certain risks assumed in connection with the Policy. This charge
is not deducted from the Guaranteed Interest Account.
The mortality risk assumed by Phoenix Home Life is that Insureds may live
for a shorter time than projected because of inaccuracies in that projecting
process and, accordingly, that an aggregate amount of death benefits greater
than that projected will be payable. The expense risk assumed is that expenses
incurred in issuing the Policies may exceed the limits on administrative charges
set in the Policies. If the expenses do not increase to an amount in excess of
the limits, or if the mortality projecting process proves to be accurate,
Phoenix Home Life may profit from this charge. Phoenix Home Life also assumes
risks with respect to other contingencies including the incidence of Policy
loans, which may cause Phoenix Home Life to incur greater costs than anticipated
when designing the Policies. To the extent Phoenix Home Life profits from this
charge, it may use those profits for any proper purpose, including the payment
of sales expenses or any other expenses that may exceed income in a given year.
4. INVESTMENT MANAGEMENT CHARGE
As compensation for their investment management services to the Fund, the
Advisers are entitled to fees, payable monthly and based on an annual percentage
of the average aggregate daily net asset values of each Series as summarized in
the following tables:
PHOENIX INVESTMENT COUNSEL, INC.
--------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $250,000,000 $250,000,000 $500,000,000
- -------- ------------ ------------ ------------
Money Market........ .40% .35% .30%
Bond................ .50% .45% .40%
Balanced............ .55% .50% .45%
Total Return........ .60% .55% .50%
Growth.............. .70% .65% .60%
International....... .75% .70% .65%
Strategic Theme..... .75% .70% .65%
PHOENIX REALTY SECURITIES, INC.
-------------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $1,000,000,000 $1,000,000,000 $2,000,000,000
- ------ -------------- --------------- --------------
Real Estate......... .75% .70% .65%
WANGER ASSET MANAGEMENT, L.P.
-----------------------------
RATE FOR EXCESS
RATE FOR FIRST RATE FOR NEXT OVER
SERIES $100,000,000 $150,000,000 $250,000,000
- ------ ------------ ------------ ------------
U.S. Small
Cap................. 1.00% .95% .90%
International 1.30% 1.20% 1.10%
Small Cap...........
In addition, each Series pays a portion or all of its other annual operating
expenses other than the management fees; the Growth, Multi-Sector, Total
Return, Money Market and Balanced Series will pay up to .15%; the Real Estate
and Strategic Theme Series will pay up to .25%; the International Series will
pay up to .40%; the Wanger U.S. Small Cap Series will pay up to .50%; and the
Wanger International Small Cap Series will pay up to .60% of its average net
assets annually.
5. OTHER CHARGES
SURRENDER CHARGE
During the first 10 Policy Years, there is a difference between the
amount of Policy Value and the amount of Cash Surrender Value of the Policy.
This difference is the surrender charge, consisting of a contingent deferred
sales charge designed to recover expenses for the distribution of Policies that
are terminated by surrender before distribution expenses have been recouped, and
a contingent deferred issue charge designed to recover expenses for the
administration of Policies that are terminated by surrender before
administrative expenses have been recouped. These are contingent charges because
they are paid only if the Policy is surrendered (or the Face Amount is reduced
or the Policy lapses) during the first 10 Policy Years. They are deferred
charges because they are not deducted from premiums. The contingent deferred
issue charge is set at a level designed to recover actual costs and is not
designed to result in any profit to Phoenix Home Life.
In Policy Years one through ten the full Surrender Charge as described below
will apply if the Policyowner either surrenders the Policy for its Cash
Surrender Value or lets the Policy lapse. The applicable Surrender Charge in any
Policy Month is the full Surrender Charge minus any surrender charges that have
been previously paid. There is no Surrender Charge after the 10th Policy Year.
The maximum Surrender Charge that a Policyowner could pay while he or she owns
the Policy is equal to either A plus B (as defined below) or the amount shown in
the table on Schedule Page 4 of the Policy, whichever is less.
A (the contingent deferred sales charge) is equal to:
1) 30% of all premiums paid (up to and including the amount
stated on Schedule Page 4 of the Policy, which is calculated
according to a formula contained in a Securities and Exchange
Commission rule); plus
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2) 10% of all premiums paid in excess of this amount but not
greater than twice this amount; plus
3) 9% of all premiums paid in excess of twice this amount.
B (the contingent deferred issue charge) is equal to:
$5.00 per $1,000 of initial Face Amount.
As an example, the following illustrates the maximum Surrender Charge on a
$100,000 Policy for a male age 35 who has never smoked who has paid $3,000 in
premium payments, and who surrenders the Policy in the 70th Policy Month.
Schedule Page 4 of the Policy would show that the maximum Surrender Charge to be
paid would be equal to either A plus B (shown below) or the amount shown in the
chart in the Policy (also shown below), whichever is less:
A is equal to:
1) 30% of all premiums paid, up to $1,058.45 (equals
$317.54); plus
2) 10% of all premiums paid in excess of $1,058.45 but not
greater than $2,116.90 (equals $105.83); plus
3) 9% of all premiums paid in excess of $2,116.90 (equals
$79.48); plus
B which is equal to $500.
Therefore A plus B is equal to $1,002.87.
The chart that would be shown in the Policy is reproduced below:
MAXIMUM SURRENDER CHARGE TABLE
POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE MONTH CHARGE
----- ------ ----- ------ ----- ------
1-60 $1029.22 80 $823.38 100 $531.90
61 1018.93 81 813.09 101 516.26
62 1008.64 82 802.80 102 500.61
63 998.35 83 792.50 103 484.97
64 988.06 84 782.21 104 469.33
65 977.76 85 766.57 105 453.68
66 967.47 86 750.92 106 438.04
67 957.18 87 735.28 107 422.39
68 946.89 88 719.63 108 406.75
69 936.59 89 703.99 109 372.85
70 926.30 90 688.35 110 338.96
71 916.01 91 672.70 111 305.06
72 905.72 92 657.06 112 271.17
73 895.43 93 641.41 113 237.27
74 885.13 94 625.77 114 203.37
75 874.84 95 610.12 115 169.48
76 864.55 96 594.48 116 135.58
77 854.26 97 578.84 117 101.69
78 843.96 98 563.19 118 67.79
79 833.67 99 547.55 119 33.90
120 .00
If the Surrender occurred in Policy Month 70, the Policyowner would pay the
lesser of $1002.87 (as computed above) or $926.30 (amount in table above). This
Policyowner would pay a Surrender Charge of $926.30. Phoenix Home Life may
reduce the surrender charge for Policies issued under group or sponsored
arrangements. The amounts of reductions will be considered on a case-by-case
basis and will reflect the reduced costs to Phoenix Home Life expected as a
result of sales to a particular group or sponsored arrangement.
PARTIAL SURRENDER FEE
A fee equal to the lesser of $25 or 2% of the amount withdrawn from the
Policy is deducted from the Policy Value upon a partial surrender of the Policy
to recover the actual costs of processing the partial surrender request. The
assessment to each Sub-account or to the Guaranteed Interest Account will be
made in the same manner as provided for the partial surrender amount paid. That
is, that the Policy's share in the value of each Sub-account or the Guaranteed
Interest Account will be reduced based on the allocation made at the time of the
partial surrender. If no allocation request is made, the assessment to each
Sub-account and to the Guaranteed Interest Account will be made in the same
manner as provided for monthly deductions.
PARTIAL SURRENDER CHARGE
A charge as described below is deducted from the Policy Value upon a partial
surrender of the Policy. The charge is equal to a pro-rata portion of the
applicable surrender charge that would apply to a full surrender, determined by
multiplying the applicable surrender charge by a fraction (equal to the partial
surrender amount payable divided by the result of subtracting the applicable
surrender charge from the Policy Value). This amount is assessed against the
Sub-accounts or the Guaranteed Interest Account in the same manner as provided
for with respect to the partial surrender amount paid.
A partial surrender charge is also deducted from Policy Value upon a
decrease in Face Amount. The charge is equal to the applicable surrender charge
multiplied by a fraction (equal to the decrease in Face Amount divided by the
Face Amount of the Policy prior to the decrease).
TAXES
Currently no charge is made to the VUL Account for Federal income taxes that
may be attributable to the VUL Account. Phoenix Home Life may, however, make
such a charge in the future. Charges for other taxes, if any, attributable to
the VUL Account may also be made. See "Charges and Deductions--Other Charges."
GENERAL PROVISIONS
POSTPONEMENT OF PAYMENTS
GENERAL
Payment of any amount upon complete or partial surrender, Policy loan, or
benefits payable at death (in excess of the initial face amount) or maturity may
be postponed: (i) for up to six months from the date of the request, for any
transactions dependent upon the value of the GIA; (ii) whenever the New York
Stock Exchange is closed other than for customary weekend and holiday closings,
or trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission; or (iii) whenever an emergency exists, as
determined by the Commission as a result of which disposal of securities is not
reasonably practicable or it is not reasonably
19
<PAGE>
practicable to determine the value of the VUL Account's net assets. Transfers
may also be postponed under these circumstances.
PAYMENT BY CHECK
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until such time as the check has cleared the Policyowner's bank.
THE CONTRACT
The Policy and attached copy of the application are the entire contract.
Only statements in the application can be used to void the Policy. The
statements are considered representations and not warranties. Only an executive
officer of Phoenix Home Life can agree to change or waive any provisions of the
Policy.
SUICIDE
If the Insured commits suicide within two years after the Policy's Date of
Issue, Phoenix Home Life will pay only the Policy Value adjusted by the addition
of any monthly deductions and other fees and charges made under the Policy and
the subtraction of any Debt owed to Phoenix Home Life under the Policy.
INCONTESTABILITY
Phoenix Home Life cannot contest this Policy or any attached rider after it
has been In Force during the lifetime of the Insured for two years from the
Policy Date.
CHANGE OF OWNER OR BENEFICIARY
The Beneficiary, as named in the Policy application or subsequently changed,
will receive the Policy benefits at the Insured's death. If the named
Beneficiary dies before the Insured, the contingent Beneficiary, if named,
becomes the Beneficiary. If no Beneficiary survives the Policyowner, the
benefits payable at the Insured's death will be paid to the Policyowner's
estate.
As long as the Policy is In Force, the Policyowner and the Beneficiary may
be changed by Written Request, satisfactory to Phoenix Home Life. A change in
Beneficiary will take effect as of the date the notice is signed, whether or not
the Insured is living when the notice is received by Phoenix Home Life. Phoenix
Home Life will not, however, be liable for any payment made or action taken
before receipt of the notice.
ASSIGNMENT
The Policy may be assigned. Phoenix Home Life will not be bound by the
assignment until a written copy has been received and will not be liable with
respect to any payment made prior to receipt. Phoenix Home Life assumes no
responsibility for determining whether an assignment is valid.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the death benefit will
be adjusted based on what the cost of insurance charge for the most recent
monthly deduction would have purchased based on the correct age and sex.
SURPLUS
Policyowners may share in divisible surplus of Phoenix Home Life to the
extent determined annually by the Phoenix Home Life Board of Directors. However,
it is not currently anticipated that the Board will authorize these payments
since Policyowners will be participating directly in investment results.
PAYMENT OF PROCEEDS
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SURRENDER AND DEATH BENEFIT PROCEEDS
Death benefit proceeds and the proceeds of full or partial surrenders
will be processed at unit values next computed after Phoenix Home Life receives
the request for surrender of due proof of death, provided such request is
complete and in good order. Payment of surrender or death proceeds will usually
be made in one lump-sum within seven days, unless another payment option has
been elected. Payment of the death proceeds, however, may be delayed if the
claim for payment of the death proceeds needs to be investigated; e.g., to
ensure payment of the proper amount to the proper payee. Any such delay will not
be beyond that reasonably necessary to investigate such claims consistent with
insurance practices customary in the life insurance industry. In addition, under
certain conditions, in the event of the terminal illness of the Insured, an
accelerated payment of up to 75% of the Policy's Death Benefit (up to a maximum
of $250,000), is available under the Living Benefits Rider. The minimum face
amount remaining after any such accelerated benefit payment is $10,000.
While the Insured is living, the Policyowner may elect a payment option for
payment of the death proceeds to the Beneficiary. The Policyowner may revoke or
change a prior election, unless such right has been waived. The Beneficiary may
make or change an election prior to payment of the death proceeds, unless the
Policyowner has made an election which does not permit such further election or
changes by the Beneficiary.
A written form satisfactory to Phoenix Home Life is required to elect,
change, or revoke a payment option.
The minimum amount of surrender or death proceeds that may be applied under
any income option is $1,000.
If the Policy is assigned as collateral security, Phoenix Home Life will pay
any amount due the assignee in one lump sum. Any remaining proceeds will remain
under the option elected.
PAYMENT OPTIONS
All or part of the surrender or death proceeds of a Policy may be applied
under one or more of the following payment options or such other payment options
or alternative versions of the options listed as Phoenix Home Life may choose to
make available in the future.
OPTION 1--LUMP SUM.
Payment in one lump sum.
OPTION 2--LEFT TO EARN INTEREST.
A payment of interest during the payee's lifetime on the amount payable as a
principal sum. Interest rates are guaranteed to be at least 3 percent per year.
OPTION 3--PAYMENT FOR A SPECIFIC PERIOD.
Equal income installments are paid for a specified period of years whether
the payee lives or dies. The first payment will be on the date
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of settlement. The assumed interest rate on the unpaid balance is guaranteed not
to be less than 3 percent per year.
OPTION 4--LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN.
Equal installments are paid until the later of: (A) The death of the payee;
(B) The end of the period certain. The first payment will be on the date of
settlement. The period certain must be chosen at the time this option is
elected. The periods certain that may be chosen are as follows: (A) Ten years;
(B) Twenty years; (C) Until the installments paid refund the amount applied
under this option; and if the payee is not living when the final payment falls
due, that payment will be limited to the amount which needs to be added to the
payments already made to equal the amount applied under this option. If, for the
age of the payee, a period certain is chosen that is shorter than another period
certain paying the same installment amount, Phoenix Home Life will deem the
longer period certain as having been elected. Any life annuity provided under
Option 4 is calculated using an interest rate guaranteed to be no less than
3 3/8% per year, except that any life annuity providing a period certain of 20
years or more is calculated using an interest rate guaranteed to be no less than
3 1/4% per year.
OPTION 5--LIFE ANNUITY.
Equal installments are paid only during the lifetime of the payee. The first
payment will be on the date of settlement. Any life annuity as may be provided
under Option 5 is calculated using an interest rate guaranteed to be no less
than 3 1/2% per year.
OPTION 6--PAYMENTS OF A SPECIFIED AMOUNT.
Equal installments of a specified amount, out of the principal sum and
interest on that sum, are paid until the principal sum remaining is less than
the amount of the installment. When that happens, the principal sum remaining
with accrued interest will be paid as a final payment. The first payment will be
on the date of settlement. The payments will include interest on the principal
sum remaining at a rate guaranteed to at least equal 3 percent per year. This
interest will be credited at the end of each year. If the amount of interest
credited at the end of the year exceeds the income payments made in the last 12
months, that excess will be paid in one sum on the date credited.
OPTION 7--JOINT SURVIVORSHIP ANNUITY WITH 10-YEAR PERIOD
CERTAIN.
The first payment will be on the date of settlement. Equal income
installments are paid until the latest of: (A) The end of the 10-year period
certain; (B) The death of the Insured; (C) The death of the other named
annuitant. The other annuitant must be named at the time this option is elected
and cannot later be changed. The other annuitant must have an attained age of at
least 40. Any joint survivorship annuity as may be provided under this option is
calculated using an interest rate guaranteed to be no less than 3 3/8% per year.
For additional information concerning the above payment options,
see the Policy.
FEDERAL TAX CONSIDERATIONS
INTRODUCTION
The ultimate effect of Federal income taxes on values under the VUL Account
and on the economic benefit to the Policyowner or Beneficiary depends on Phoenix
Home Life's tax status and upon the tax status of the individual concerned. The
discussion contained herein is general in nature and is not intended as tax
advice. For complete information on Federal and state tax considerations, a
qualified tax adviser should be consulted. No attempt is made to consider any
estate and inheritance taxes, or any state, local or other tax laws. Because the
discussion herein is based upon Phoenix Home Life's understanding of Federal
income tax laws as they are currently interpreted, Phoenix Home Life cannot
guarantee the tax status of any Policy. No representation is made regarding the
likelihood of continuation of current Federal income tax laws, Treasury
regulations, or of the current interpretations by the Internal Revenue Service.
Phoenix Home Life reserves the right to make changes to the Policy in order to
assure that it will continue to qualify as a life insurance contract for Federal
income tax purposes.
PHOENIX HOME LIFE'S TAX STATUS
Phoenix Home Life is taxed as a life insurance company under the Internal
Revenue Code of 1986, as amended (the "Code"). For Federal income tax purposes,
neither the VUL Account nor the Guaranteed Interest Account is a separate entity
from Phoenix Home Life and their operations form a part of Phoenix Home Life.
Investment income and realized capital gains on the assets of the VUL
Account are reinvested and taken into account in determining the value of the
VUL Account. Investment income of the VUL Account, including realized net
capital gains, is not taxed to Phoenix Home Life. Due to Phoenix Home Life's tax
status under current provisions of the Code, no charge will currently be made to
the VUL Account for Phoenix Home Life's Federal income taxes which may be
attributable to the VUL Account. Phoenix Home Life reserves the right to make
a deduction for taxes if the Federal tax treatment of Phoenix Home Life is
determined to be other than what Phoenix Home Life currently believes it to be,
if changes are made affecting the tax treatment to Phoenix Home Life of variable
life insurance contracts, or if changes occur in Phoenix Home Life's tax status.
If imposed, such charge would be equal to the Federal income taxes attributable
to the investment results of the VUL Account.
POLICY BENEFITS
DEATH BENEFIT PROCEEDS. The Policy, whether or not it is a "modified
endowment contract" (see the discussion on modified endowment contracts below),
should be treated as meeting the definition of a life insurance contract for
Federal income tax purposes, under Section 7702 of the Code. As such, the death
benefit proceeds thereunder should be excludable from the gross income of the
Beneficiary under Code Section 101(a)(1). Also, the Policyowner should not be
deemed to be in constructive receipt of the Cash Value,
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including increments thereon. See, however, the sections below on possible
taxation of amounts received under the Policy, via full surrender, partial
surrender or loan. In addition, a benefit paid under a Living Benefit Rider may
be taxable as income in the year of receipt.
Code Section 7702 imposes certain conditions with respect to premiums
received under a Policy. Phoenix Home Life intends to monitor the premiums to
assure compliance with such conditions. However, in the event that the premium
limitation is exceeded during the year, Phoenix Home Life may return the excess
premium, with interest, to the Policyowner within 60 days after the end of the
Policy Year, and maintain the qualification of the Policy as life insurance for
Federal income tax purposes.
FULL SURRENDER. Upon full surrender of a Policy for its Cash Value, the
excess, if any, of the Cash Value (unreduced by any outstanding indebtedness)
over the premiums paid will be treated as ordinary income for Federal income tax
purposes. The full surrender of a Policy which is a "modified endowment
contract" may result in the imposition of an additional 10 percent tax on any
income received.
PARTIAL SURRENDER. If the Policy is a "modified endowment contract," partial
surrenders are fully taxable to the extent of income in the Policy and are
possibly subject to an additional 10 percent tax. See the discussion on
"modified endowment contracts" below. If the Policy is not a "modified endowment
contract," partial surrenders may still be taxable, as follows. Code Section
7702(f)(7) provides that where a reduction in death benefits occurs during the
first 15 years after a Policy is issued and there is a cash distribution
associated with that reduction, the Policyowner may be taxed on all or a part of
the amount distributed. A reduction in death benefits may result from a partial
surrender. After 15 years, the proceeds will not be subject to tax, except to
the extent such proceeds exceed the total amount of premiums paid but not
previously recovered. Phoenix Home Life suggests you consult with your tax
adviser in advance of a proposed decrease in death benefits or a partial
surrender as to the portion, if any, which would be subject to tax, and in
addition as to the impact such partial surrender might have under the rules
affecting "modified endowment contracts."
LOANS. Phoenix Home Life believes that any loan received under a Policy will
be treated as indebtedness of the Policyowner. If the Policy is a "modified
endowment contract," loans are fully taxable to the extent of income in the
Policy and are possibly subject to an additional 10 percent tax. See the
discussion on "modified endowment contracts" below. If the Policy is not a
"modified endowment contract," Phoenix Home Life believes that no part of any
loan under a Policy will constitute income to the Policyowner.
The deductibility by the Policyowner of loan interest under a Policy may be
limited under Code Section 264, depending on the circumstances. Any Policyowner
intending to fund premium payments through borrowing should consult a tax
adviser with respect to the tax consequences thereof. Under the "personal"
interest limitation provisions of the Code, interest on Policy loans used for
personal purposes is not tax deductible. Other rules may apply to allow all or
part of the interest expense as a deduction if the loan proceeds are used for
"trade or business" or "investment" purposes. See your tax adviser for further
guidance.
BUSINESS-OWNED POLICIES
If the Policy is owned by a business or a corporation, the Code may impose
additional restrictions. The Code limits the interest deduction on
business-owned Policy loans and may impose tax upon the inside build-up of
corporate-owned life insurance policies through the corporate alternative
minimum tax.
MODIFIED ENDOWMENT CONTRACTS
GENERAL. Pursuant to Code Section 72(e), loans and other amounts received
under "modified endowment contracts" will in general be taxed to the extent of
accumulated income (generally, the excess of Cash Value over premiums paid).
Policies are "modified endowment contracts" if they meet the definition of life
insurance, but fail the "7-pay test." This test essentially provides that the
cumulative premiums paid under the Policy at any time during the Policy's first
7 years cannot exceed the sum of the net level premiums that would have been
paid on or before that time had the Policy provided for paid-up future benefits
after the payment of 7 level annual premiums. In addition, a modified endowment
contract includes any life insurance contract that is received in exchange for a
modified endowment contract. Premiums paid during a Policy Year that are
returned by Phoenix Home Life (with interest) within 60 days after the end of
the Policy Year will not cause the Policy to fail the 7-pay test.
REDUCTION IN BENEFITS DURING THE FIRST 7 YEARS. If there is a reduction in
benefits during the first 7 Policy Years, the premiums are redetermined for
purposes of the 7-pay test as if the Policy had originally been issued at the
reduced death benefit level and the new limitation is applied to the cumulative
amount paid for each of the first 7 Policy Years.
DISTRIBUTIONS AFFECTED. If a Policy fails to meet the 7-pay test, it is
considered a modified endowment contract only as to distributions in the year in
which the death benefit reduction takes effect and all subsequent Policy Years.
However, distributions made in anticipation of such failure (there is a
presumption that distributions made within two years prior to such failure were
"made in anticipation") also are considered distributions under a modified
endowment contract. If the Policy satisfies the "7-pay test" for 7 years,
distributions and loans will generally not be subject to the modified
endowment contract tax rules.
PENALTY TAX. Any amounts taxable under the modified endowment contract rule
will be subject to an additional 10 percent excise tax, with certain exceptions.
This additional tax will not apply in the case of distributions: (i) made on or
after the taxpayer attains age 59 1/2; (ii) which are attributable to the
taxpayer's disability (within the meaning of Code Section 72(m)(7)); or (iii)
which are part of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the taxpayer
or the joint lives (or life expectancies) of the taxpayer and his Beneficiary.
MATERIAL CHANGE RULES. Any determination of whether the Policy meets the
"7-pay test" will begin again any time the Policy undergoes a "material change,"
which includes any increase in death benefits or any increase in or addition of
a qualified additional benefit, with the following two exceptions. First, if an
increase is attributable to premiums paid "necessary to fund" the lowest death
benefit and qualified additional benefits payable in the first 7 Policy Years or
to the crediting of interest or dividends with respect to these premiums, the
"increase" does not constitute a material change. Second, to the extent
22
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provided in regulations, if the death benefit or qualified additional benefit
increases as a result of a cost-of-living adjustment based on an established
broad-based index specified in the Policy, this does not constitute a material
change if (1) the cost-of-living determination period does not exceed the
remaining premium payment period under the Policy, and (2) the cost-of-living
increase is funded ratably over the remaining premium payment period of the
Policy. A reduction in death benefits is not considered a material change unless
accompanied by a reduction in premium payments.
A material change may occur at any time during the life of the Policy
(within the first 7 years or thereafter), and future taxation of distributions
or loans would turn on whether the Policy satisfied the applicable "7-pay test"
from the time of the material change. An exchange of policies is considered to
be a material change for all purposes.
SERIAL PURCHASE OF MODIFIED ENDOWMENT CONTRACTS. All modified endowment
contracts issued by the same insurer (or affiliated companies of the insurer) to
the same Policyowner within the same calendar year will be treated as one
modified endowment contract in determining the taxable portion of any loans or
distributions made to the Policyowner. The Treasury has been given specific
legislative authority to issue regulations to prevent the avoidance of the new
distribution rules for modified endowment contracts. A qualified tax adviser
should be consulted about the tax consequences of the purchase of more than one
modified endowment contract within any calendar year.
LIMITATIONS ON UNREASONABLE MORTALITY AND EXPENSE CHARGES
The Code imposes limitations on unreasonable mortality and expense charges
for purposes of ensuring that a Policy qualifies as life insurance. The
mortality charges taken into account to calculate permissible premium levels may
not exceed those charges required to be used in determining the Federal income
tax reserve for the Policy, unless Treasury regulations prescribe a higher level
of charge. In addition, the expense charges taken into account under the
guideline premium test are required to be reasonable, as defined by the Treasury
regulations. Phoenix Home Life intends to comply with the limitations in
calculating the premium it is permitted to receive from the Policyowner.
QUALIFIED PLANS
A Policy may be used in conjunction with certain qualified plans. Since the
rules governing such use are complex, a purchaser should not use the Policy in
conjunction with a qualified plan until he has consulted a competent pension
consultant or tax adviser.
DIVERSIFICATION STANDARDS
To comply with the diversification regulations under Code Section 817(h),
("Diversification Regulations") each Portfolio of the Funds is required to
diversify its investments. The Diversification Regulations generally require
that on the last day of each quarter of a calendar year no more than 55 percent
of the value of the Funds assets is represented by any one investment, no more
than 70 percent is represented by any two investments, no more than 80 percent
is represented by any three investments, and no more than 90 percent is
represented by any four investments. A "look-through" rule applies to treat a
pro-rata portion of each asset of the Funds as an asset of the VUL Account;
therefore, each Series of the Funds will be tested for compliance with the
percentage limitations. For purposes of these diversification rules, all
securities of the same issuer are treated as a single investment, but each
United States Government agency or instrumentality is treated as a separate
issuer.
The general diversification requirements are modified if any of the assets
of the VUL Account are direct obligations of the United States Treasury. In this
case, there is no limit on the investment that may be made in United States
Treasury securities, and for purposes of determining whether assets other than
United States Treasury securities are adequately diversified, the generally
applicable percentage limitations are increased based on the value of the VUL
Account's investment in United States Treasury securities. Notwithstanding this
modification of the general diversification requirements, the portfolios of the
Funds will be structured to comply with the general diversification standards
because they serve as an investment vehicle for certain variable annuity
contracts which must comply with these standards.
In connection with the issuance of the Diversification Regulations, the
Treasury announced that such regulations do not provide guidance concerning the
extent to which policyowners may direct their investments to particular
divisions of a separate account. It is possible that a revenue ruling or other
form of administrative pronouncement in this regard may be issued in the near
future. It is not clear, at this time, what such a revenue ruling or other
pronouncement will provide. It is possible that the Policy may need to be
modified to comply with such future Treasury announcements. For these reasons,
Phoenix Home Life reserves the right to modify the Policy, as necessary, to
prevent the Policyowner from being considered the owner of the assets of the VUL
Account.
Phoenix Home Life intends to comply with the Diversification Regulations to
assure that the Policies continue to qualify as a life insurance contract for
Federal income tax purposes.
CHANGE OF OWNERSHIP OR INSURED OR ASSIGNMENT
Changing the Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances. Code Section
1035 provides that a life insurance contract can be exchanged for another life
insurance contract, without recognition of gain or loss, assuming that no money
or other property is received in the exchange, and that the policies relate to
the same Insured. If the surrendered policy is subject to a policy loan, this
may be treated as the receipt of money on the exchange. Phoenix Home Life
recommends that any person contemplating such actions seek the advice of a
qualified tax consultant.
OTHER TAXES
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary. Phoenix Home Life does not
make any representations or guarantees regarding the tax consequences of any
Policy with respect to these types of taxes.
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VOTING RIGHTS
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THE FUNDS
Phoenix Home Life will vote the Funds shares held by the Sub-accounts of
the VUL Account at any regular and special meetings of shareholders of the
Funds, a Massachusetts business trust. To the extent required by law, such
voting will be in accordance with instructions received from the Policyowner.
However, if the Investment Company Act of 1940 or any regulation thereunder
should be amended or if the present interpretation thereof should change, and as
a result Phoenix Home Life determines that it is permitted to vote the Funds
shares at its own discretion, it may elect to do so.
The number of votes that a Policyowner has the right to cast will be
determined by applying the Policyowner's percentage interest in a Sub-account to
the total number of votes attributable to the Sub-account. In determining the
number of votes, fractional shares will be recognized.
Funds shares held in a Sub-account for which no timely instructions are
received, and Funds shares which are not otherwise attributable to
Policyowners, will be voted by Phoenix Home Life in proportion to the voting
instructions that are received with respect to all Policies participating in
that Sub-account. Voting instructions to abstain on any item to be voted upon
will be applied to reduce the votes eligible to be cast by Phoenix Home Life.
Each Policyowner will receive proxy materials, reports, and other materials
relating to the Funds.
Phoenix Home Life 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
objective of one or more of the portfolios of the Funds or to approve or
disapprove an investment advisory contract for the Funds. In addition, Phoenix
Home Life itself may disregard voting instructions in favor of changes initiated
by a Policyowner in the investment policies or the Investment Advisers of the
Funds if Phoenix Home Life reasonably disapproves 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 Phoenix Home Life determined that
the change would have an adverse effect on the General Account because the
proposed investment policy for a portfolio may result in overly speculative or
unsound investments. In the event Phoenix Home Life does disregard voting
instructions, a summary of that action and the reasons for such action will be
included in the next periodic report to Policyowners.
PHOENIX HOME LIFE
A Policyowner (or the payee entitled to payment under a payment option if a
different person) will have the right to vote at annual meetings of all Phoenix
Home Life Policyholders for the election of members of the Board of Directors of
Phoenix Home Life and on other corporate matters, if any, where a Policyholder's
vote is taken. At meetings of all of the Phoenix Home Life Policyholders, a
Policyholder (or payee) may cast only one vote as the holder of a Policy,
irrespective of Policy Value or the number of the Policies held.
THE DIRECTORS AND EXECUTIVE OFFICERS OF PHOENIX HOME LIFE
- -------------------------------------------------------------------------------
Phoenix Home Life is managed by its Board of Directors, the members of which
are elected by its Policyholders, including Owners of the Policies. See "Voting
Rights."
The following are the Directors and Executive Officers of Phoenix
Home Life:
DIRECTORS PRINCIPAL OCCUPATION
Sal H. Alfiero Chairman and Chief Executive Officer,
Mark IV Industries, Inc.
Amherst, New York
J. Carter Bacot Chairman and Chief Executive Officer,
The Bank of New York
New York, New York
Carol H. Baldi President, Carol H. Baldi, Inc.
New York, New York
Peter C. Browning Executive Vice President, Sunoco
Products Company
Hartsville, South Carolina
Richard N. Cooper Chairman, National Intelligence
Council, Central Intelligence Agency
McLean, Virginia; formerly Professor
of International Economics, Harvard
University
Gordon J. Davis, Esq. Partner, LeBoeuf, Lamb, Greene &
MacRae; formerly Partner, Lord Day
& Lord, Barret Smith
New York, New York
Robert W. Fiondella Chairman of the Board, President
and Chief Executive Officer, Phoenix
Home Life Mutual Insurance
Company
Hartford, Connecticut
Jerry J. Jasinowski President, National Association of
Manufacturers
Washington, D.C.
John W. Johnstone Chairman, President and Chief
Executive Officer, Olin Corporation
Norwalk, Connecticut
Marilyn E. LaMarche General Partner, Lazard Freres &
Company
New York, New York
Philip R. McLoughlin Executive Vice President and Chief
Investment Officer, Phoenix Home
Life Mutual Insurance Company
Hartford, Connecticut
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Charles J. Paydos Executive Vice President, Phoenix
Home Life Mutual Insurance
Company
Hartford, Connecticut
Herbert Roth, Jr. Former Chairman, LFE Corporation
Clinton, Massachusetts
Robert F. Vizza President and Chief Executive
Officer, St. Francis Hospital
Roslyn, New York
Wilson Wilde Chairman, Executive Committee,
Hartford Steam Boiler Inspection and
Insurance Company
Hartford, Connecticut
Robert G. Wilson Former General Partner, Goldman
Sachs
New York, New York
EXECUTIVE OFFICERS PRINCIPAL OCCUPATION
Robert W. Fiondella Chairman of the Board, President
and Chief Executive Officer
Richard H. Booth Executive Vice President, Strategic
Development; formerly President,
Traveler's Insurance Company
Philip R. McLoughlin Executive Vice President and Chief
Investment Officer
Charles J. Paydos Executive Vice President
David W. Searfoss Executive Vice President and Chief
Financial Officer
Dona D. Young Executive Vice President, Individual
Insurance and General Counsel
Kelly J. Carlson Senior Vice President, Career
Organization
Carl T. Chadburn Senior Vice President
Robert G. Chipkin Senior Vice President and Corporate
Actuary
Randall C. Giangiulio Senior Vice President, Group Sales
Joan E. Herman Senior Vice President
Edward P. Hourihan Senior Vice President, Information
Systems
Joseph E. Kelleher Senior Vice President
Gary J. Laughinghouse Senior Vice President; formerly
Senior Vice President, Home Life
Insurance Company of New York
Robert G. Lautensack, Jr. Senior Vice President
Scott C. Noble Senior Vice President, Real Estate
Frederick W. Sawyer, III Senior Vice President
Richard C. Shaw Senior Vice President, International
and Corporate Development
Simon Y. Tan Senior Vice President, Individual
Market Development
The above positions reflect the last held position in the organization
during the past five years.
SAFEKEEPING OF THE VUL ACCOUNT'S ASSETS
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The assets of the VUL Account are held by Phoenix Home Life. The assets of
the VUL Account are kept physically segregated and held separate and apart from
the general account of Phoenix Home Life. Phoenix Home Life maintains records of
all purchases and redemptions of shares of the Fund.
SALES OF POLICIES
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Policies may be purchased from registered representatives of W.S. Griffith &
Co., Inc. ("W. S. Griffith") licensed to sell Phoenix Home Life insurance
policies. W. S. Griffith, an indirect subsidiary of Phoenix Home Life, is
registered as a broker-dealer with the Securities and Exchange Commission under
the Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. Policies may be purchased from other broker-dealers
registered under the Securities Exchange Act of 1934 whose representatives are
authorized by applicable law to sell Policies under terms of agreement provided
by PEPCO. Sales commissions will be paid to registered representatives on
purchase payments received by Phoenix Home Life under these Policies. Total
sales commission of a maximum of 50 percent of premiums will be paid by
Phoenix Home Life to PEPCO. To the extent that the sales charge under the
Policies is less than the sales commissions paid with respect to the Policies,
Phoenix Home Life will pay the shortfall from its general account assets, which
will include any profits it may derive under the Policies.
Phoenix Home Life through PEPCO will sponsor sales contests, training and
educational meetings and provide to all qualifying dealers, from its own profits
and resources, additional compensation in the form of trips, merchandise or
expense reimbursement. Brokers and dealers other than PEPCO may also make
customary additional charges for their services in effecting purchases, if they
notify the Funds of their intention to do so.
STATE REGULATION
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Phoenix Home Life is subject to the provisions of the New York insurance
laws applicable to mutual life insurance companies and to regulation and
supervision by the New York Superintendent of Insurance. Phoenix Home Life is
also subject to the applicable insurance laws of all the other states and
jurisdictions in which it does an insurance business.
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State regulation of Phoenix Home Life includes certain limitations on the
investments which it may make, including investments for the VUL Account and the
Guaranteed Interest Account. It does not include, however, any supervision over
the investment policies of the VUL Account.
REPORTS
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All Policyowners will be furnished with those reports required by the
Investment Company Act of 1940 and regulations promulgated thereunder, or under
any other applicable law or regulation.
LEGAL PROCEEDINGS
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The VUL Account is not engaged in any litigation. Phoenix Home Life is not
involved in any litigation that would have a material adverse effect on the
ability of Phoenix Home Life to meet its obligations under the Policies.
LEGAL MATTERS
- -------------------------------------------------------------------------------
The organization of Phoenix Home Life, its authority to issue variable life
insurance Policies, and the validity of the Policy have been passed upon by
Richard J. Wirth, Counsel, Phoenix Home Life. Legal matters relating to the
Federal securities and income tax laws have been passed upon for Phoenix Home
Life by Jorden Burt Berenson & Johnson LLP.
REGISTRATION STATEMENT
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A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
securities offered hereby. This Prospectus does not contain all the information
set forth in the Registration Statement and amendments thereto and exhibits
filed as a part thereof, to all of which reference is made for further
information concerning the VUL Account, Phoenix Home Life and the Policy.
Statements contained in this Prospectus as to the content of the Policy and
other legal instruments are summaries. For a complete statement of the terms
thereof, reference is made to such instruments as filed.
FINANCIAL STATEMENTS
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The consolidated financial statements of Phoenix Home Life as contained
herein should be considered only as bearing upon Phoenix Home Life's ability to
meet its obligations under the Policy, and they should not be considered as
bearing on the investment performance of the VUL Account. The financial
statements of the VUL Account are for the Sub-accounts available as of the
period ended December 31, 1995.
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PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 and 1994
27
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PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
Report of Independent Accountants........................................29
Consolidated Balance Sheet...............................................30
Consolidated Statement of Operations and Surplus.........................31
Consolidated Statement of Cash Flows.....................................32
Notes to Consolidated Financial Statements............................33-57
28
<PAGE>
[logo: Price Waterhouse LLP] [logo: Price Waterhouse circle logo]
REPORT OF INDEPENDENT ACCOUNTANTS
February 14, 1996
To the Board of Directors
and Policyholders of
Phoenix Home Life Mutual Insurance Company
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and surplus and of cash flows present
fairly, in all material respects, the financial position of Phoenix Home Life
Mutual Insurance Company and its life insurance subsidiaries at December 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
29
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED BALANCE SHEET
- ------------------------------------------------------------------------------
DECEMBER 31,
1995 1994
(IN THOUSANDS)
ASSETS
Bonds, at amortized cost $ 5,463,867 $ 4,976,248
First mortgage loans 963,092 1,130,882
Policy loans 1,617,872 1,585,485
Real estate, at depreciated cost 560,580 644,085
Investments in affiliates 82,945 59,569
Common stocks, at market value 247,424 161,772
Preferred stocks, at cost 73,299 75,352
Cash and short-term investments,
at amortized cost 360,874 182,404
Other invested assets 105,018 104,177
------------ ------------
Total cash and invested assets 9,474,971 8,919,974
Deferred and uncollected premiums 174,938 173,382
Due and accrued investment income 128,790 121,491
Other assets 106,691 136,800
Separate account assets 3,306,070 2,658,382
------------ ------------
Total assets $ 13,191,460 $ 12,010,029
============ ============
LIABILITIES, AVR AND SURPLUS
Reserves for future policy benefits $ 7,133,557 $ 6,748,851
Policyholders' funds at interest 611,000 649,853
Dividends to policyholders 308,636 281,227
Policy benefits in course of settlement 122,798 105,072
Accrued expenses and general liabilities 162,928 121,593
Reinsurance funds withheld liability 692,291 698,261
Interest maintenance reserve 11,872 6,043
Separate account liabilities 3,273,056 2,626,729
------------ ------------
Total liabilities 12,316,138 11,237,629
------------ ------------
Asset valuation reserve (AVR) 199,656 174,142
Policyholders' surplus 675,666 598,258
------------ ------------
Total AVR and surplus 875,322 772,400
------------ ------------
Total liabilities, AVR and surplus $ 13,191,460 $ 12,010,029
============ ============
The accompanying notes are an integral part of these statements.
30
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED STATEMENT OF OPERATIONS AND SURPLUS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
INCOME
Premium income and annuity considerations $ 1,679,717 $ 1,594,756 $ 1,677,640
Net investment income 670,699 631,668 648,234
----------- ----------- -----------
Total income 2,350,416 2,226,424 2,325,874
----------- ----------- -----------
CURRENT AND FUTURE BENEFITS
Death benefits 271,723 268,192 264,636
Disability and health benefits 248,996 239,135 305,204
Annuity benefits and matured endowments 27,320 33,067 43,499
Surrender benefits 413,580 402,540 364,772
Interest on policy or contract funds 79,241 82,621 122,626
Settlement option payments 34,637 37,166 38,331
Increase in reserves for future policy benefits
and policyholders' funds 459,693 405,071 369,504
----------- ----------- -----------
Total current and future benefits 1,535,190 1,467,792 1,508,572
----------- ----------- -----------
OPERATING EXPENSES
Commissions and expense allowances 119,147 117,148 143,046
Premium, payroll and miscellaneous taxes 44,285 35,312 52,351
Other operating expenses 269,838 261,015 276,714
Federal income tax expense (benefit) 33,329 28,436 (2,249)
----------- ----------- -----------
Total operating expenses 466,599 441,911 469,862
----------- ----------- -----------
OPERATING GAIN BEFORE DIVIDENDS AND
REALIZED CAPITAL GAINS (LOSSES) 348,627 316,721 347,440
Dividends to policyholders (297,999) (269,357) (251,647)
----------- ----------- -----------
OPERATING GAIN AFTER DIVIDENDS AND
BEFORE REALIZED CAPITAL GAINS (LOSSES) 50,628 47,364 95,793
Realized capital gains (losses), net of income
taxes and interest maintenance reserves 9,270 (46,712) (65,835)
----------- ----------- -----------
NET INCOME 59,898 652 29,958
Unrealized capital gains, net 37,412 50,354 40,583
Other surplus changes, net 5,612 1,378 (775)
----------- ----------- -----------
NET INCREASE IN AVR AND SURPLUS 102,922 52,384 69,766
AVR AND SURPLUS, beginning of year 772,400 720,016 650,250
----------- ----------- -----------
AVR AND SURPLUS, end of year $ 875,322 $ 772,400 $ 720,016
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
31
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
CASH AND SHORT-TERM INVESTMENT SOURCES
Operations:
Premiums collected $ 1,601,408 $ 1,523,021 $ 1,620,128
Initial consideration received on
reinsurance assumed 99,851
Investment and other income received 773,021 751,074 754,049
----------- ----------- -----------
Total received 2,374,429 2,274,095 2,474,028
----------- ----------- -----------
Claims and benefits paid 1,091,725 1,304,238 1,577,792
Commissions and other expenses paid 549,155 486,766 530,075
Dividends to policyholders paid 270,749 249,701 242,192
Increase in policy loans 32,387 55,143 21,438
Federal income taxes paid (received) 9,319 (37,266) 26,720
----------- ----------- -----------
Total paid 1,953,335 2,058,582 2,398,217
----------- ----------- -----------
Cash proceeds from operations 421,094 215,513 75,811
Proceeds from sales, maturities and
scheduled repayments of investments:
Bonds 1,381,080 1,198,131 1,451,279
Stocks 329,104 347,884 767,540
First mortgage loans 186,172 160,882 731,877
Real estate and other invested assets 148,546 209,316 322,284
Non-operating increase in
policyholders' funds 47,340 52,694 75,123
----------- ----------- -----------
Total sources 2,513,336 2,184,420 3,423,914
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENT USES
Acquisitions of investments:
Bonds 1,842,467 1,756,955 2,144,981
Stocks 282,488 310,751 650,187
First mortgage loans 93,097 31,214 93,480
Real estate and other invested assets 73,482 173,988 255,255
Other uses 43,332 155,780 254,095
----------- ----------- -----------
Total uses 2,334,866 2,428,688 3,397,998
----------- ----------- -----------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 178,470 (244,268) 25,916
CASH AND SHORT-TERM INVESTMENTS, beginning of year 182,404 426,672 400,756
----------- ----------- -----------
CASH AND SHORT-TERM INVESTMENTS, end of year $ 360,874 $ 182,404 $ 426,672
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
32
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS
Phoenix Home Life Mutual Insurance Company (Phoenix Home Life or the
Company) and its subsidiaries market a wide range of insurance and
investment products and services including individual participating life
insurance, variable life insurance, group life and health insurance, life
and health reinsurance, annuities, investment advisory and mutual fund
distribution services, insurance agency and brokerage operations. These
products and services are distributed among six primary segments which
include: Individual, Group Life and Health, Life Reinsurance, General Lines
Brokerage, Securities Management and Real Estate Management. See Note 9 for
segment information.
Effective June 30, 1993, Phoenix Home Life sold Home Life Financial
Assurance Corporation (HLFAC), a group life and health insurance
subsidiary. Accordingly, these financial statements include the results of
operations of this business for the six months ended June 30, 1993. See
Note 8 for additional information.
Effective January 1, 1995, the money management businesses of Phoenix Home
Life were completely transferred to Phoenix Securities Group, Inc. (Phoenix
Securities Group), an indirect wholly-owned subsidiary. Phoenix Securities
Group entered into contracts to manage the investments of the general and
separate accounts of Phoenix Home Life. On November 1, 1995, Phoenix Home
Life, through its subsidiary, PM Holdings, Inc. (PM Holdings), merged
Phoenix Securities Group into Duff & Phelps Corporation, forming Phoenix
Duff & Phelps Corporation (PDP). PM Holdings owns approximately 60% of the
outstanding PDP common stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of Phoenix Home Life include the
domestic life insurance subsidiaries, Phoenix American Life Insurance
Company, American Phoenix Life and Reassurance Company, Phoenix Life
Insurance Company, PHL Variable Insurance Company and HLFAC, with
intercompany transactions eliminated. The non-insurance subsidiaries are
not consolidated in these financial statements. The significant accounting
policies which are used by Phoenix Home Life and its consolidated life
insurance subsidiaries in the preparation of the consolidated financial
statements are described below. Certain reclassifications have been made to
the 1994 and 1993 amounts to conform with the 1995 presentation.
BASIS OF PRESENTATION
Phoenix Home Life's policy is to prepare its financial statements on the
basis of accounting practices prescribed or permitted by the Insurance
Department of the State of New York. These practices are predominately
promulgated by the National Association of Insurance Commissioners (NAIC).
These practices currently are considered generally accepted accounting
principles (GAAP) for mutual life insurance companies. There were no
material practices not prescribed by the Insurance Department of the State
of New York.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS
In April 1993, the Financial Accounting Standards Board issued
Interpretation No. 40, Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises, which
establishes a different definition of GAAP for mutual life insurance
companies. Under the Interpretation, financial statements of mutual life
insurance companies for periods beginning after December 15, 1995 which are
prepared on the basis of statutory accounting will no longer be
characterized as in conformity with GAAP.
33
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
Management of the Company has not finalized the effect on its December 31,
1995 financial statements of applying the Interpretation. The Company
intends to adopt the accounting changes required to present its financial
statements in conformity with GAAP in its 1996 financial statements. The
effect of the changes will be reported retroactively through restatement of
all previously issued financial statements. The cumulative effect of
adopting these changes will be included in the earliest year restated.
Effective January 1, 1995, the Company adopted the provisions of Statement
of Position 94-6 (SOP 94-6), Disclosure of Certain Significant Risks and
Uncertainties. SOP 94-6 requires disclosure about the nature of a reporting
entity's operations and the use of estimates in the preparation of
financial statements.
PREMIUM REVENUE AND RELATED EXPENSES
Generally, premium income and annuity considerations are recognized as
income over the premium paying periods of the policies or the annuity
contracts, respectively. Related underwriting expenses, commissions and
other costs of acquiring the policies and contracts are charged to
operations as incurred.
INSURANCE LIABILITIES
Benefit and loss reserves, included in reserves for future policy benefits,
are established in amounts adequate to meet estimated future obligations on
policies in force. Benefits to policyholders are charged to operations as
incurred.
Reserves for future policy benefits are determined using assumed rates of
interest, mortality and morbidity consistent with statutory requirements.
Most life insurance reserves for which the 1958 CSO and 1980 CSO mortality
tables are used as the mortality basis are determined using a modified
preliminary term reserve method. The net level premium method is used in
determining life insurance reserves based on earlier mortality tables.
Claim and loss liabilities, included in reserves for future policy
benefits, are established in amounts estimated to cover incurred losses.
These liabilities are based on individual case estimates for reported
losses and estimates of unreported losses based on past experience. Claim
and loss liabilities, net of ceded reinsurance, are not material.
As is customary practice in the insurance industry, Phoenix Home Life
assumes and cedes reinsurance as a means of diversifying underwriting risk.
The maximum amount of individual life insurance retained by the company on
any one life was increased from $5,000,000 to $8,000,000 for single life
and joint first-to-die policies and to $10,000,000 for joint last-to-die
policies on July 31, 1995, with excess amounts ceded to reinsurers. For
reinsurance ceded, the company remains liable in the event that assuming
reinsurers are unable to meet the contractual obligations.
INVESTMENTS
Investments are valued in accordance with methods prescribed by the NAIC.
Investments in bonds are generally carried at amortized cost and preferred
stocks, generally at cost.
Common stocks are carried at market value. Ownership interests in real
estate, venture capital, equity and oil and gas partnerships and joint
ventures are carried at equity in the underlying net assets. Mortgage loans
in good standing are valued at their unpaid principal balance. Prepayment
penalties are reported in investment income when received. Origination fees
and related expenses are recognized at the time of mortgage closings.
Policy loans are reported at their unpaid balances and are fully
collateralized by the cash values of the related policies.
Short-term investments are carried at amortized cost, which approximates
market value. The company considers highly liquid investments purchased
with a maturity of one year or less to be short-term investments.
34
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)
The investments in affiliates represent both direct and indirect ownership
in the common and preferred stock of non-insurance subsidiaries. The common
stock of PDP is valued at the market value of shares owned less a discount
(15%), as determined by the NAIC Securities Valuation Office. The preferred
stock of PDP is valued at cost. The common stock of other unconsolidated
subsidiaries is valued at the equity in underlying net assets, determined
in accordance with GAAP. The Company's equity in the earnings of
affiliates, including PDP, is reflected in net investment income. Any
remaining adjustments such as those necessary to reflect changes in the
market value of PDP are recorded in unrealized capital gains, net.
Investment and Home Office real estate is generally valued at depreciated
cost less mortgage encumbrances. Foreclosed real estate is generally valued
at current market value at the date of foreclosure. Depreciation of real
estate is calculated using the straight line method over the estimated
lives of the assets (generally 45 years).
Realized capital gains and losses on investments are determined using the
specific identification method. Those realized capital gains and losses
resulting from interest rate changes are deferred and amortized to income
over the stated maturity of the disposed investment utilizing the Interest
Maintenance Reserve Group Method. Unrealized capital gains and losses,
resulting from changes in the difference between cost and the carrying
value of investments, are reflected in policyholders' surplus.
DERIVATIVES
Phoenix Home Life enters into interest rate swap agreements to hedge
certain variable rate investment income streams matched against fixed rate
liability streams. Such contracts generally have maturities of 7 years or
less and the counterparties are major international financial institutions.
The differential to be received on interest rate swap agreements is
recognized in investment income over the life of the agreements.
NON-ADMITTED ASSETS
In accordance with regulatory requirements, certain assets, including
unsecured loans or receivables, prepaid expenses and furniture and
equipment are not allowable and must be charged against surplus. Changes in
the write-off of these asset balances are reported in the consolidated
statement of operations and surplus in other surplus changes, net.
SEPARATE ACCOUNTS
Separate account assets are funds of separate account contractholders and
the company segregated into accounts with specific investment objectives.
The assets are generally carried at market value. An offsetting liability
is maintained to the extent of contractholders' interests in the assets.
Appreciation or depreciation of Phoenix Home Life's interest in the
separate accounts, including undistributed net investment income, is
reflected in policyholders' surplus. Contractholders' interests in net
investment income and realized and unrealized capital gains and losses on
separate account assets are not reflected in operations.
FEDERAL INCOME TAXES
Phoenix Home Life's statutory federal income tax liability is based on
estimates of federal income tax due. There are no provisions for deferred
taxes.
Phoenix Home Life and its eligible affiliated companies have elected to
file a life/nonlife consolidated federal income tax return for the tax
years ended December 31, 1995, 1994 and 1993.
35
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
POLICYHOLDERS' DIVIDENDS
Dividends on all individual coverages are provided on the basis of
estimated amounts payable in the following calendar year. Dividends on all
other coverages are provided on the basis of amounts incurred for the
current year.
APPROPRIATED SURPLUS
Phoenix Home Life's policyholders' surplus includes amounts available for
contingencies, some of which are required by state regulatory authorities.
The amounts as of December 31, 1995 and 1994 were approximately $44.5
million and $41.4 million, respectively.
EMPLOYEE BENEFIT PLANS
Phoenix Home Life sponsors pension and savings plans (the Plans) for its
employees and agents and those of its subsidiaries. Effective November 1,
1995, the Plans were reclassified from single-employer plans to
multi-employer plans in conjunction with the merger of Phoenix Securities
Group and Duff & Phelps Corporation. Former employees of Phoenix Securities
Group, who were participants of the Plans prior to the merger, have
remained as participants of the Plans. The qualified plans comply with
requirements established by the Employee Retirement Income Security Act of
1974 (ERISA) and excess benefit plans provide for that portion of pension
obligations which is in excess of amounts permitted by ERISA. Phoenix Home
Life also provides certain health care and life insurance benefits for
active and retired employees. In addition, Phoenix Home Life maintains
several deferred compensation incentive plans for its officers.
36
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES
RESERVES FOR FUTURE POLICY BENEFITS
The basis of assumptions for Phoenix Home Life's major categories of
reserves for future policy benefits and claims and settlements at December
31, are summarized below.
1995 1994
(IN THOUSANDS)
Life insurance:
American Experience, 2.5% to 4% $ 54,515 $ 59,657
1941 CSO, 2.25% to 4% 476,736 499,593
1958 CSO, 2% to 6% 2,679,897 2,867,403
1980 CSO, 5% to 6% 2,254,892 1,944,126
1980 CSO Select, 4.5% 8,522 6,932
1980 CSO, 3.5% to 4.5% 1,581,897 1,194,601
Various 71,941 64,504
---------- ----------
Total life insurance 7,128,400 6,636,816
---------- ----------
Annuities 646,171 706,038
---------- ----------
Claim and loss liabilities:
Disability 218,381 208,547
Accident and health 575,987 545,918
---------- ----------
Total claim and loss liabilities 794,368 754,465
---------- ----------
Supplementary contracts with
life contingencies 45,757 45,947
---------- ----------
All other 23,971 23,850
---------- ----------
Total before reinsurance ceded 8,638,667 8,167,116
Less - reinsurance ceded 1,505,110 1,418,265
---------- ----------
Reserves for future policy benefits $7,133,557 $6,748,851
========== ==========
37
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
WITHDRAWAL CHARACTERISTICS
Withdrawal characteristics of annuity actuarial reserves and deposit
liabilities as of December 31, (in thousands aside from percentages) are as
follows:
<TABLE>
<CAPTION>
1995 1994
% OF TOTAL % OF TOTAL
-------------------------- ------------------------
<S> <C> <C> <C> <C>
SUBJECT TO DISCRETIONARY WITHDRAWAL -
WITH ADJUSTMENT
- with market value adjustment $ 38,067 1.0 $ 90,178 3.0
- at book value less
surrender charge 145,871 4.0 296,295 8.0
- at market value 2,918,544 74.0 2,390,895 68.0
------------- ------ ---------- -----
Subtotal 3,102,482 79.0 2,777,368 79.0
SUBJECT TO DISCRETIONARY WITHDRAWAL -
WITHOUT ADJUSTMENT
- at book value (minimal or no
charge or adjustment) 594,839 15.0 428,986 12.0
Not subject to discretionary
withdrawal provision 264,454 6.0 332,454 9.0
------------- ------ ---------- -----
Total Annuity actuarial reserves
and deposit liabilities 3,961,775 100.0 3,538,808 100.0
------ -----
Less-reinsurance ceded 61,728 15,881
------------- ----------
Annuity actuarial reserves
and deposit liabilities $ 3,900,047 $3,522,927
============= ==========
</TABLE>
POLICYHOLDERS' FUNDS AT INTEREST
Phoenix Home Life's policyholders' funds at interest, principally group
pension reserves for guaranteed interest contracts and deposit
administration and immediate participation guarantee funds, are at a
weighted average interest rate of approximately 8.9% and 8.1% at December
31, 1995 and 1994, respectively.
At December 31, 1995, Phoenix Home Life had guaranteed interest contracts
which totaled $54.6 million. These were scheduled to mature as follows:
1996 - $19.8 million; 1997 - $16.5 million; 1998 - $3.0 million; 1999 -
$11.7 million; 2000 and beyond - $3.6 million.
In determining the fair market value of guaranteed interest contracts, a
discount rate equal to the appropriate treasury rate, plus 150 basis
points, was used to determine the present value of projected contractual
liability payments through final maturity. At December 31, 1995, the book
value of guaranteed interest contracts approximated fair value. The book
value and fair value of guaranteed interest contracts as of December 31,
1994 were $142.8 million and $140.3 million respectively.
38
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
POLICYHOLDERS' FUNDS AT INTEREST (CONTINUED)
The fair market value of deferred annuities and supplementary contracts
without life contingencies with an interest guarantee of one year or less
is valued at the amount of the policy reserve. In determining the fair
market value of deferred annuities and supplementary contracts without life
contingencies with interest guarantees greater than one year, a discount
rate equal to the appropriate treasury rate, plus 150 basis points, was
used to determine the present value of the projected account value of the
policy at the end of the current guarantee period. The book value, which
approximates fair market value, of deferred annuities is $625.9 million and
$660.9 million at December 31, 1995 and 1994, respectively. The fair market
value and book value of supplementary contracts without life contingencies
as of December 31, 1995 are $49.6 million and $49.4 million, respectively.
The fair market value and book value of supplementary contracts without
life contingencies as of December 31, 1994 were $45.7 million and $45.9
million, respectively.
Deposit type funds, including pension deposit administration contracts,
dividend accumulations, and other funds left on deposit not involving life
contingencies, have interest guarantees of less than one year for which
interest credited is closely tied to rates earned on owned assets. For such
liabilities, fair market value of liabilities is assumed to be equal to the
stated statutory liability balances.
REINSURANCE FUNDS WITHHELD LIABILITY
During 1993, a universal life reinsurance contract with an unaffiliated
reinsurer was amended to include certain American Experience and 1941 CSO
traditional life reserves on a 90% coinsurance basis. A reinsurance funds
withheld liability of $680.5 million and $669.0 million was held by Phoenix
Home Life at December 31, 1995 and 1994, respectively.
As described in Note 8, HLFAC was sold to an unaffiliated company during
1993. At December 31, 1995 and 1994, a reinsurance funds withheld liability
due HLFAC, as an unauthorized reinsurer, for group life and health reserves
ceded was $11.8 million and $29.2 million, respectively.
39
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. INSURANCE LIABILITIES (CONTINUED)
DIRECT BUSINESS WRITTEN AND REINSURANCE
Additional information on direct business written and reinsurance assumed
and ceded for the years ended December 31, is set forth below.
1995 1994 1993
(IN THOUSANDS)
Direct premiums $ 1,704,381 $ 1,693,494 $ 1,761,660
Reinsurance assumed 271,498 205,387 204,711
Reinsurance ceded (296,162) (304,125) (288,731)
------------ ------------ ------------
Net premiums $ 1,679,717 $ 1,594,756 $ 1,677,640
============ ============ ============
Direct commissions and
expense allowance $ 119,265 $ 133,138 $ 134,987
Reinsurance assumed 55,971 57,104 49,772
Reinsurance ceded (56,089) (73,094) (41,713)
------------ ------------ ------------
Net commissions and
expense allowance $ 119,147 $ 117,148 $ 143,046
============ ============ ============
Direct policy and contract
claims incurred $ 583,867 $ 591,029 $ 668,980
Reinsurance assumed 256,529 167,276 157,718
Reinsurance ceded (292,357) (217,911) (213,359)
------------ ------------ ------------
Net policy and contract
claims incurred $ 548,039 $ 540,394 $ 613,339
============ ============ ============
Direct policy and contract
claims payable $ 75,466 $ 72,037 $ 75,140
Reinsurance assumed 218,045 130,823 81,690
Reinsurance ceded (170,713) (97,788) (54,859)
------------ ------------ ------------
Net policy and contract
claims payable $ 122,798 $ 105,072 $ 101,971
============ ============ ============
Direct life insurance
in force $102,606,749 $ 95,717,768 $ 87,539,515
Reinsurance assumed 36,724,852 27,428,529 24,612,071
Reinsurance ceded (34,093,090) (24,372,415) (26,619,136)
------------ ------------ ------------
Net insurance in
force $105,238,511 $ 98,773,882 $ 85,532,450
============ ============ ============
Phoenix Home Life retroceded certain insurance coverages approximating $1.4
billion, $1.7 billion and $2.0 billion of life insurance in force at
December 31, 1995, 1994 and 1993 respectively, to an off-shore subsidiary.
Irrevocable letters of credit aggregating $7.0 million at December 31, 1995
have been arranged with United States commercial banks in favor of Phoenix
Home Life to collateralize the ceded reserves.
40
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS
Information pertaining to Phoenix Home Life's investments, net investment
income and capital gains and losses on investments follows:
BONDS, COMMON STOCKS AND PREFERRED STOCKS
Carrying values and alternate values at December 31, for investments in
bonds, preferred stocks and common stocks are set forth below. Bonds are
generally carried at amortized cost, common stocks, at market value and
preferred stocks, generally at cost. The alternate value for bonds and
preferred stocks is fair market value and for common stocks, cost.
<TABLE>
<CAPTION>
1995 1994
CARRYING ALTERNATE CARRYING ALTERNATE
VALUE VALUE VALUE VALUE
(IN THOUSANDS)
<S> <C> <C> <C> <C>
BONDS
US Treasury bonds
and obligations of
US government
corporations and
agencies $ 572,305 $ 600,959 $ 391,801 $ 376,383
Obligations of states
and political
subdivisions:
- taxable 240,279 258,872 66,815 63,143
- non-taxable 95,043 103,157 67,688 66,666
Bonds issued by
foreign governments 59,149 63,781 45,688 39,154
Corporate bonds 2,210,972 2,404,592 2,187,444 2,112,494
Mortgage-backed
securities 2,286,119 2,363,252 2,216,812 2,030,265
----------- ----------- ----------- ------------
TOTAL BONDS $ 5,463,867 $ 5,794,613 $ 4,976,248 $ 4,688,105
=========== =========== =========== ============
COMMON STOCKS $ 247,424 $ 203,495 $ 161,772 $ 142,128
=========== =========== =========== ============
PREFERRED STOCKS $ 73,299 $ 91,400 $ 75,352 $ 75,731
=========== =========== =========== ============
</TABLE>
The fair market value on bonds include amounts for publicly traded bonds
that are based on quoted market prices, where available, or quoted market
prices of comparable instruments. Fair values of private placement bonds
are estimated using discounted cash flows that apply interest rates
currently being offered with similar terms to borrowers of similar credit
quality.
41
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
BONDS, COMMON STOCKS AND PREFERRED STOCKS (CONTINUED)
Fair values for defaulted bonds and preferred stocks are those values as
provided by the NAIC.
The carrying value and alternate value of bonds at December 31, 1995, by
contractual maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
CARRYING ALTERNATE
VALUE VALUE
(IN THOUSANDS)
Due in one year or less $ 35,979 $ 36,635
Due after one year through five years 562,144 590,095
Due after five years through ten years 1,266,895 1,367,640
Due after ten years 1,312,730 1,436,991
Mortgage-backed securities 2,286,119 2,363,252
------------ ------------
Total bonds $ 5,463,867 $ 5,794,613
============ ============
The carrying value of Phoenix Home Life's defaulted bonds is $7.0 million
and is net of reserves of $3.0 million.
Carrying values at December 31, for investments in mortgage-backed
securities, excluding U.S. government guaranteed investments, are set forth
below.
CARRYING VALUE
(IN THOUSANDS)
1995 1994
Planned Amortization Class $ 759,239 $ 750,533
Asset Backed 421,076 407,296
Mezzanine 354,497 398,064
Commercial 240,860 303,684
Sequential Pay 372,169 217,322
Pass Through 84,706 88,228
Other 53,572 51,685
------------ ------------
$ 2,286,119 $ 2,216,812
============ ============
Phoenix Home Life has 49% and 52% at December 31, 1995 and 1994,
respectively, in Planned Amortization Class and Mezzanine mortgage backed
securities which have reasonably predictable cash flows and a relatively
high degree of prepayment protection. Phoenix Home Life has limited
exposure in the more volatile residential derivative market such as
interest only, principal only or inverse float instruments.
42
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS
Real estate at December 31, carried net of accumulated depreciation and
encumbrances, is summarized below:
1995 1994
(IN THOUSANDS)
Investment real estate, less accumulated
depreciation of $64,279 and $59,256,
encumbrances of $2,362 and $2,380
and impairments of $23,699 and $44,249 $ 313,680 $ 389,050
Foreclosed properties, less accumulated
depreciation of $22,217 and $17,580 and
impairments of $29,571 and
$26,849 97,491 89,117
Real estate partnerships and ventures 54,378 84,831
Property used in Phoenix Home Life's
operations less accumulated depreciation
of $43,943 and $38,490 95,031 81,087
----------- -----------
Total real estate 560,580 644,085
Mortgage loans 963,092 1,130,882
----------- -----------
Total real estate and mortgage loans $ 1,523,672 $ 1,774,967
=========== ===========
The carrying value of mortgage loans includes impairment reserves for
mortgage loans in the process of foreclosure of $4.5 million and $0.6
million at December 31, 1995 and 1994, respectively.
Mortgage loans and real estate investments are diversified by property
type, location and issuer. Mortgage loans are collateralized by the related
properties and such collateral is generally 75% of the property's value at
the time the loan is made.
43
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS (CONTINUED)
Mortgage loans and real estate investments at December 31, are comprised of
the following property types and geographic regions:
MORTGAGE LOANS REAL ESTATE
1995 1994 1995 1994
(IN THOUSANDS) (IN THOUSANDS)
PROPERTY TYPE:
Home office $ 95,031 $ 81,087
Office buildings $ 191,672 $ 276,973 230,972 263,467
Retail 250,264 306,251 127,500 122,439
Apartment buildings 244,589 220,325 36,644 93,803
Industrial buildings 222,120 266,305 61,667 70,962
Other 54,447 61,028 8,766 12,327
--------- ---------- --------- ---------
Total $ 963,092 $1,130,882 $ 560,580 $ 644,085
========= ========== ========= =========
GEOGRAPHIC REGION:
Home office $ 95,031 $ 81,087
Northeast $ 233,670 $ 271,088 102,249 106,550
Southeast 250,019 233,571 94,410 101,293
North central 171,434 238,514 85,470 128,043
South central 50,819 67,303 91,670 116,191
West 257,150 320,406 91,750 110,921
--------- ---------- --------- ---------
Total $ 963,092 $1,130,882 $560,580 $ 644,085
========= ========== ======== =========
At December 31, scheduled mortgage loan maturities are as follows:
1995 1994
(IN THOUSANDS)
1995 $ 314,324
1996 $ 198,507 151,956
1997 144,030 138,914
1998 150,412 180,856
1999 102,517 116,743
Thereafter 367,626 228,089
--------- ----------
Total $ 963,092 $1,130,882
========= ==========
44
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
REAL ESTATE AND MORTGAGE LOANS (CONTINUED)
The carrying value of delinquent and in process of foreclosure mortgage
loans at December 31, 1995 and 1994 is $9.4 million and $32.9 million,
respectively, and is net of impairment reserves of $4.5 million and $0.6
million, respectively.
Fair market values for mortgage loans in good standing are calculated as
the present value of scheduled payments, with the discount based upon (1)
the Treasury rate comparable for the remaining loan duration, plus (2) a
spread of between 175 and 450 basis points, depending upon the internal
quality rating of the loan. For loans in foreclosure or default, values
were determined assuming principal recovery was the lower of the loan
balance or the estimated value of the underlying property. The fair market
value of mortgage loans as of December 31, 1995 and 1994 is $955.8 million
and $1,081.0 million.
The maximum and minimum lending rates for mortgage loans during 1995 were
8.15% and 7.26%, respectively.
OTHER INVESTED ASSETS
Other invested assets at December 31, are summarized below.
1995 1994
(IN THOUSANDS)
Venture capital equity partnerships $ 50,919 $ 44,404
Stock income funds 763
Transportation and equipment leases 47,810 48,318
Oil and gas partnerships 4,305 8,575
Miscellaneous 1,984 2,117
---------- ----------
Total other invested assets $ 105,018 $ 104,177
========== ==========
45
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
INVESTMENT GUARANTEES, INTEREST RATE SWAPS, LINES OF CREDIT AND COMMITMENTS
Phoenix Home Life has various investment guarantees with regard to certain
subsidiary and partnership activities which totalled $310.9 million and
$242.8 million at December 31, 1995 and 1994, respectively.
Phoenix Home Life adopted the disclosure requirements of FAS 119 Disclosure
About Derivative Financial Instruments and Fair Value of Financial
Instruments. The definition of derivative financial instrument excludes all
on-balance sheet receivables and payables, including those that derived
their value or contractually required cash flows from the price of some
other security or index, such as mortgage-backed securities.
Phoenix Home Life enters into interest rate swap agreements, generally
having maturities of 7 years or less, to hedge certain variable rate
investment income streams matched against fixed rate liability streams. The
notional amounts of these instruments were $18.0 million and $34.0 million
at December 31, 1995 and 1994, respectively. Average received and average
pay rates were 9.01% and 5.92%, for 1995.
The increase in net investment income related to interest rate swap
contracts was $1.2 million, $3.1 million and $3.5 million for the years
ended December 31, 1995, 1994 and 1993, respectively. The fair value of
these interest rate swap agreements as of December 31, 1995 and 1994 was
not material.
The company has also guaranteed an interest rate swap agreement entered
into by a subsidiary. This agreement has the effect of the subsidiary
paying a fixed interest rate on a notional amount of $175 million of the
subsidiary's debt.
These agreements do not require the exchange of underlying principal
amounts, and accordingly the company's maximum exposure to credit risk is
the difference in interest payments exchanged. Management of Phoenix Home
Life considers the likelihood of any material loss on these guarantees or
interest rate swaps to be remote.
Phoenix Home Life has unused lines of credit with commercial banks totaling
$176.9 million at December 31, 1995.
At December 31, 1995, the company has leases covering certain facilities,
property and equipment which in no year exceeded $16.7 million and which
approximate $45.4 million in total. Such commitments extend through the
year 2000.
46
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
NON-INCOME PRODUCING MORTGAGE LOANS AND BONDS
The net carrying values of first mortgage loans and bonds which were
non-income producing for the preceding 12 months as of December 31, are as
follows:
1995 1994
(IN THOUSANDS)
First mortgage loans $ 3,805 $ 18,371
Bonds 322
---------- -----------
Total non-income producing mortgage loans
and bonds $ 3,805 $ 18,693
========== ===========
SEPARATE ACCOUNTS
Phoenix Home Life's investments in its separate accounts at December 31,
are summarized below.
<TABLE>
<CAPTION>
1995 1994
CARRYING CARRYING
VALUE COST VALUE COST
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Pooled separate accounts $ 22,575 $ 4,646 $ 26,030 $ 6,125
Closed end real estate account 4,597 4,460 5,623 6,314
Variable accumulation account 5,842 5,000
--------- -------- --------- --------
Total investments in
separate accounts $ 33,014 $ 14,106 $ 31,653 $ 12,439
========= ======== ========= ========
</TABLE>
Phoenix Home Life's investments at December 31, 1995 in the pooled separate
accounts represent seed money which was necessary to commence their
operations. Phoenix Home Life has a 10% investment in a separate account
which invests primarily in real estate properties and mortgage loans, a
100% investment in a separate account which invests in guaranteed interest
contracts with non-affiliates and a .4% investment in the real estate
sub-fund of a variable accumulation account.
POLICY LOANS
Fair market value of policy loans, $1,658 million and $1,474 million at
December 31, 1995 and 1994, respectively, was estimated as the present
value of loan interest and policy loan repayments discounted at the ten
year treasury rate. Loan repayments were assumed only to occur as a result
of anticipated policy lapses, and it was assumed that annual policy loan
interest payments were made at the guaranteed loan rate less 17.5 basis
points at December 31, 1995 and 1994, respectively. Discounting was at the
ten year treasury rate, except for policy loans with a variable policy loan
rate. Variable policy loans have an interest rate that is reset annually
based upon market rates and therefore, book value is a reasonable
approximation of fair market value.
47
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
NET INVESTMENT INCOME
The principal components of net investment income for the years ended
December 31, are set forth below.
<TABLE>
<CAPTION>
1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C>
Interest on bonds $ 419,859 $ 380,345 $ 322,378
Interest on first mortgage loans 92,283 109,457 176,687
Interest on policy loans 115,055 105,678 104,002
Interest on short-term investments 21,974 11,673 14,213
Income on real estate, net of expenses
of $79,565, $82,085 and $59,918 20,243 16,478 14,470
Equity in income of affiliates 17,850 17,050 30,368
Dividends on common stocks 1,787 3,312 2,303
Dividends on preferred stocks 6,886 7,378 8,848
Net loss from other invested
assets (1,239) (1,046) (835)
Miscellaneous income 2,110 2,258 1,243
Amortization of the interest
maintenance reserve 1,824 1,644 2,425
Less:
Interest expenses 164 161 313
Investment expenses 27,769 22,398 27,555
---------- ---------- ----------
Net investment income $ 670,699 $ 631,668 $ 648,234
========== ========== ==========
</TABLE>
Income on real estate includes $18.3 million for Phoenix Home Life's
occupancy of its own properties for 1995. An offsetting amount is included
in investment and operating expenses.
Interest income of $1.0 million was not accrued on certain delinquent first
mortgage loans and defaulted bonds at December 31, 1995.
48
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
CAPITAL GAINS AND LOSSES
The principal components of capital gains and (losses) on investments
reflected in surplus for the years December 31, are set forth below.
<TABLE>
<CAPTION>
REALIZED UNREALIZED
1995 1994 1993 1995 1994 1993
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Bonds $ 9,865 $ (30,299) $ 15,923 $ (8,560) $ 6,967 $ 11,968
First mortgage loans (43,377) (7,149) (84,441) (1,548) (4,292) 9,674
Real estate (62,685) (29,612) (50,889) 49,923 35,856 9,067
Common stock of
consolidated subsidiaries 50,496
Investments in affiliates 122,452 (28,808) 6,000 (7,002)
Common stocks 27,828 (8,877) 20,178 23,552 2,427 7,434
Preferred stocks 515 1,302 (2,287) 153 5,963
Other invested assets 5,344 3,400 4,686 1,865 (165) 4,263
Foreign exchange (1,948) 1,096 1,432 (784)
Miscellaneous 6,066 (8,405) 88 (108) 1,976
--------- --------- ---------- ---------- --------- ---------
66,008 (81,588) (46,246) 37,412 50,354 40,583
Transfer to interest
maintenance reserve (7,276) 19,338 (11,051)
Income tax (expense) benefits (49,462) 15,538 (8,538)
--------- --------- ---------- --------- --------- ---------
Net capital gains (losses) $ 9,270 (46,712) $ (65,835) $ 37,412 $ 50,354 $ 40,583
========= ========= ========== ========= ========= =========
</TABLE>
Proceeds from sales of Phoenix Home Life's investments in bonds were $1.4
billion, $1.2 billion and $1.3 billion during 1995, 1994 and 1993. Gross
gains of $29.6 million, $15.2 million and $42.1 million and gross losses of
$19.7 million, $45.5 million and $26.2 million were realized on these sales
during 1995, 1994 and 1993.
49
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
4. INVESTMENTS (CONTINUED)
CAPITAL GAINS AND LOSSES (CONTINUED)
Gross unrealized gains and losses on bonds at December 31, not reflected in
surplus, are as follows:
<TABLE>
<CAPTION>
UNREALIZED GAINS UNREALIZED LOSSES
1995 1994 1995 1994
(IN THOUSANDS)
<S> <C> <C> <C> <C>
US Treasury bonds and
obligations of US
government corporations
and agencies $ 29,682 $ 928 $ (1,028) $ (16,346)
Obligations of states and
political subdivisions:
- taxable 18,593 1 (3,673)
- non-taxable 8,257 619 (143) (1,641)
Bonds issued by foreign
governments 6,436 (1,804) (6,534)
Corporate bonds 198,684 34,216 (5,064) (109,166)
Mortgage-backed
securities 96,506 13,686 (19,373) (200,233)
---------- --------- --------- ----------
Total $ 358,158 $ 49,450 $ (27,412) $ (337,593)
========== ========= ========= ==========
</TABLE>
5. INVESTMENTS IN AFFILIATES
PM Holdings is a wholly-owned subsidiary organized to hold investments in
companies primarily engaged in the businesses of life insurance, mortgage
loan financing, investment advisory and mutual fund distribution services,
real estate and insurance agency and brokerage operations. As previously
disclosed, the life insurance subsidiaries of PM Holdings, which are
included on a consolidated basis in these financial statements, include the
following: Phoenix American Life Insurance Company, American Phoenix Life
and Reassurance Company, Phoenix Life Insurance Company and PHL Variable
Insurance Company. PM Holding's major non-life subsidiaries include:
Phoenix Realty Group, Inc., American Phoenix Corporation, Phoenix Founders,
Inc., W.S. Griffith & Company and Financial Administrative Services, Inc.
In addition, PM Holdings owns approximately 60% of the outstanding Phoenix
Duff & Phelps Corporation common stock.
50
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
5. INVESTMENTS IN AFFILIATES (CONTINUED)
Prior to July 1, 1993, HLFAC was a wholly-owned subsidiary of Phoenix Home
Life. As described in Note 8, effective June 30, 1993, HLFAC was sold to an
unaffiliated company, Community Mutual Insurance Company.
American Phoenix Life and Reassurance Company (formerly Phoenix Life and
Reassurance Company), previously a wholly-owned subsidiary of Phoenix Home
Life, organized for the purpose of holding and administering
non-participating reinsurance business, became a wholly-owned subsidiary of
PM Holdings on February 28, 1994.
Phoenix Life Insurance Company, formerly a wholly-owned subsidiary of
Phoenix Home Life, incorporated on June 3, 1992, became a wholly-owned
subsidiary of PM Holdings on February 28, 1994. On December 30, 1994, the
Company obtained licensing in the State of Connecticut and plans to market
interest sensitive products in the future.
PHL Variable Insurance Company was incorporated under the laws of
Connecticut on June 1, 1994 and has obtained licensing in several states
and began offering variable insurance products directly to the public in
1995.
During 1992 through 1994, Phoenix Mutual Mortgage Funding Corporation
(PMMFC), a former non-life subsidiary of PM Holdings, exercised its option
to double its sinking fund payments on existing debt. On September 12,
1994, PMMFC retired this debt and was liquidated.
On November 1, 1995, Phoenix Securities Group, Inc. (formerly PHL Mutual
Funds Holdings, Inc.), a wholly-owned subsidiary of PM Holdings merged with
Duff & Phelps Corporation. The merged company was named Phoenix Duff &
Phelps Corporation (PDP). PM Holdings owns approximately 60% of the
outstanding common stock of the new PDP. The investment in PDP common stock
is recorded at the market value of shares owned less a discount (15%), as
determined by the NAIC Securities Valuation Office.
PM Holding's consolidated entities invest primarily in bonds, first
mortgage loans and real estate. These investments are recorded using the
same accounting practices as the parent.
51
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
5. INVESTMENTS IN AFFILIATES (CONTINUED)
Summarized financial information of the non-insurance indirect subsidiaries
of Phoenix Home Life at December 31, and for the years ended is as follows:
1995 1994
(IN THOUSANDS)
BALANCE SHEET
Assets:
Common stock in affiliate $ 154,275
Preferred stock in affiliate 35,000
Other investments 67,010 $ 83,160
Other assets 138,374 142,684
--------- ---------
Total assets $ 394,659 $ 225,844
========= =========
Liabilities:
Notes and bonds payable $ 250,631 $ 98,066
Other liabilities 61,083 67,209
--------- ---------
Total liabilities 311,714 165,275
Stockholder's equity 82,945 60,569
--------- ---------
Total liabilities and
stockholder's equity $ 394,659 $ 225,844
========= =========
SUMMARY OF OPERATIONS 1995 1994 1993
(IN THOUSANDS)
Revenue:
Commissions and fees $ 137,492 $ 95,419 $110,576
Net investment and other income 49,155 37,740 27,166
--------- --------- --------
Total revenue 186,647 133,159 137,742
--------- --------- --------
Expenses:
Commission expenses 37,195 14,298 33,159
Interest and other expenses 132,485 100,424 81,810
Federal income tax expense 5,654 8,519 5,455
--------- --------- --------
Total expenses 175,334 123,241 120,424
--------- --------- --------
OPERATING INCOME BEFORE REALIZED
CAPITAL GAIN (LOSS) AND
MINORITY INTEREST 11,313 9,918 17,318
Realized capital gain (loss),
net of income taxes 126,852 (1,400) 11,263
Minority interest (271) 15 273
--------- --------- --------
Net income $ 137,894 $ 8,533 $ 28,854
Capital (returned to) contributed
by parent, net (59,335) 1,134 (15,067)
Other surplus changes (56,183) 28
Stockholder's equity,
beginning of year 60,569 50,874 37,087
--------- --------- --------
Stockholder's equity, end of year $ 82,945 $ 60,569 $ 50,874
========= ========= ========
52
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
6. FEDERAL INCOME TAXES
The federal income tax provision for 1995, 1994 and 1993 totalled $82.8
million, $12.9 million and $6.3 million, respectively, which included tax
expense or (benefits) applicable to realized capital gains or losses of
$49.5 million, $(15.5) million and $8.5 million. Significant adjustments to
book net income before federal income taxes were made for the differential
earnings rate, reduction in the policyholder dividends deduction and to
reflect the tax bases for investments, life insurance reserves, dividend
received deduction and deferred policy acquisition costs. Phoenix Home Life
had a net current federal income tax payable of $56.7 million and $20.3
million at December 31, 1995 and 1994, respectively. The federal income tax
payable is included in accrued expenses and general liabilities at December
31, 1995 and 1994.
The Internal Revenue Service (IRS) is currently examining the Company's tax
returns for 1991-1994. Management does not believe that there will be a
material adverse effect on the financial statements as a result of pending
tax matters.
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS
The company recognizes the costs of postretirement benefits other than
pensions for current retirees and fully eligible or vested employees at
transition. This liability is measured by discounting the projected future
costs of health benefits based on an estimate of health care cost trend
rates. Prior to the adoption of this standard, the company recognized such
costs as an expense when paid. The company has elected the deferred
recognition method of adoption where the postretirement benefit obligation
will be amortized as a component of net periodic cost over a period of 20
years.
Phoenix Home Life provides certain health care and life insurance benefits
for retired employees. A substantial portion of the company's employees may
become eligible for these benefits upon retirement. The health care and
life insurance plans generally require retiree contributions. These
contributions are based on years of service with the company.
The expense related to the company's postretirement benefit plans is $7.4
million and $6.8 million for the years ended December 31, 1995 and 1994,
respectively.
53
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
The following table shows the plan's funded status at December 31, 1995
(in thousands):
Accumulated postretirement benefit obligation
other than pensions (APBO):
Retirees $ 37,900
Fully eligible active plan participants 10,500
---------
Total APBO 48,400
Unrecognized net gain 6,600
Unrecognized transition obligation (40,200)
---------
Accrued postretirement benefit liability $ 14,800
=========
The accrued postretirement benefit liability is included in accrued
expenses and general liabilities. The estimated accumulated APBO for
non-vested employees at December 31, 1995 was $25.0 million. The net 1995
periodic postretirement benefit cost is included in other operating
expenses and consisted of the following components (in thousands):
Estimated eligibility cost - 1995 $ 1,400
Interest cost on APBO 3,700
Amortization of transition obligation over 20 years 2,400
Other (100)
---------
Net periodic postretirement benefit cost $ 7,400
=========
Determination of the accumulated postretirement benefit obligation was
based on an assumed discount rate of 8% and a long-term compensation
increase of 5%. The assumed rate of future increases in per capita cost of
health benefits (the health care cost trend) was 11% in 1996 grading to an
ultimate rate of 5.5% in 2002. The assumed health care cost trend reflects
the company's current claim experience and management's expectation that
future rates of growth will decline. Increasing the health care cost trend
by one percentage point for each future year would increase the accumulated
other postretirement benefit obligation by $2.3 million and the annual
service and interest cost by $0.3 million before taxes. Gains and losses
that occur because actual experience differs from that assumed are
reflected in unrealized gain and amortized over the average future service
period of employees.
As of January 1, 1995, Phoenix Home Life's defined benefit plan, the
Phoenix Home Life Mutual Insurance Company Employee Pension Plan (Employee
Pension Plan), was overfunded by approximately $2.2 million as measured
using the plan's then projected benefit obligation.
54
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
7. EMPLOYEE AND OTHER POSTEMPLOYMENT BENEFITS (CONTINUED)
The Company recognizes the costs and obligations of severance, disability,
life insurance and health care benefits when paid to inactive or former
employees.
Phoenix Home Life's charge to expense for retirement benefit plans for the
year ended December 31, 1995 and 1994 was approximately $6.0 million and
$8.2 million, respectively. Certain pension costs incurred by Phoenix Home
Life are allocated to its subsidiaries.
The estimated funded status of the Employee Pension Plan as of January 1,
1995 is summarized as follows (in thousands):
Actuarial present value of benefit obligations:
Vested benefit obligation $ 160,592
Present value of non-vested benefits 15,251
---------
Accumulated benefit obligation 175,843
Present value of future salary increases 37,793
---------
Projected benefit obligation $ 213,636
=========
Plan assets at fair value at January 1 $ 215,858
=========
Plan assets at fair value in excess of
projected benefit obligation $ 2,222
=========
For the Employee Pension Plan, the present value of accumulated plan
benefits was determined based on the actual salary and service history of
the covered employees as of the date of the computation. The actuarial
present value of the plan liabilities, which considers future estimated
salary increases and other factors, is approximately $213.6 million at
January 1, 1995, the date of the most recent actuarial valuation. Actuarial
amounts were determined using 8% assumed rates of return for the qualified
employees' plan.
The assets of the company's pension and savings plans at December 31, 1994,
were invested as follows (in thousands):
Separate accounts of Phoenix Home Life $ 49,142
Phoenix Series Fund sponsored by
Phoenix Home Life 113,654
Phoenix Multi-Sector Fixed Income Fund
sponsored by Phoenix Home Life 8,683
Phoenix Worldwide Opportunities Fund
sponsored by Phoenix Home Life 6,735
Phoenix Asset Reserve
sponsored by Phoenix Home Life 700
Pension Plan Trust Account 165,664
Cash Management Account 1,052
---------
Total invested assets of pension savings plans $ 345,630
=========
55
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
8. DISPOSITION OF HLFAC
Effective June 30, 1993, HLFAC was sold to an unaffiliated company,
Community Mutual Insurance Company, resulting in a pre-tax realized capital
gain of $50.5 million. Results on a divisional basis for the period from
January 1, 1993 through June 30, 1993, which are included in the
consolidated statement of operations, are as follows (in thousands):
1993
Net premiums $ 171,822
Net investment income 6,437
-----------
Total income 178,259
-----------
Policy benefits 105,024
Expenses 56,000
-----------
Total benefits and expenses 161,024
-----------
Gain from operations before federal income taxes $ 17,235
===========
9. SEGMENT INFORMATION
Phoenix Home Life operates principally in six segments: Individual, Group
Life and Health, Life Reinsurance, General Lines Brokerage, Securities
Management and Real Estate Management.
Summarized financial information with respect to the business segments for
the years ended December 31, was as follows (in thousands):
1995 1994 1993
REVENUES
Individual $ 1,680,641 $ 1,595,725 $ 1,542,755
Group Life and Health 411,076 405,564 377,432
Life Reinsurance 125,657 93,346 97,177
General Lines Brokerage 23,796 21,949 14,687
Securities Management
(including PDP operations) 95,684 97,401 101,853
Real Estate Management 13,562 12,439 13,711
Other operations (HLFAC) 178,259
----------- ----------- -----------
Total revenues $ 2,350,416 $ 2,226,424 $ 2,325,874
=========== =========== ===========
56
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
9. SEGMENT INFORMATION (CONTINUED)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
INCOME BEFORE REALIZED CAPITAL GAINS
(LOSSES), DIVIDENDS AND INCOME TAXES
Individual $ 333,524 $ 294,987 $ 260,645
Group Life and Health 17,401 17,451 28,974
Life Reinsurance 8,829 7,355 4,028
General Lines Brokerage 2,633 2,306 755
Securities Management
(including PDP operations) 19,753 22,431 33,816
Real Estate Management (184) 627 (262)
Other operations (HLFAC) 17,235
Total income before realized capital gains
(losses), dividends and income taxes $ 381,956 $ 345,157 $ 345,191
=========== =========== ===========
1995 1994
IDENTIFIABLE ASSETS
Individual $11,519,751 $10,501,598
Group Life and Health 506,712 461,540
Life Reinsurance 176,520 174,337
General Lines Brokerage 112,348 33,534
Securities Management 621,150 604,968
Real Estate Management 254,979 234,052
Total identifiable assets $ 13,191,460 $12,010,029
============ ===========
</TABLE>
10. CONTINGENCIES
The Company is a defendant in various legal actions arising from the normal
conduct of business. Management believes that, after consideration of
provisions made in the Company's financial statements, none of the actions
will have a material effect on the Company's financial position.
57
<PAGE>
PHOENIX HOME LIFE VARIABLE
UNIVERSAL LIFE ACCOUNT
FINANCIAL STATEMENTS
DECEMBER 31, 1995
58
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Assets
Investments at cost $13,959,460 $110,250,111 $ 6,357,472
============ ========= ==========
Investment in The Phoenix Edge Series Fund, at market 13,959,460 118,022,065 6,705,121
------------ --------- ----------
Total assets 13,959,460 118,022,065 6,705,121
Liabilities
Accrued expenses to related party 7,919 72,685 4,346
------------ --------- ----------
Net assets $13,951,541 $117,949,380 $6,700,775
============ ========= ==========
Accumulation units outstanding--Flex Edge 10,229,951 36,538,624 3,484,452
============ ========= ==========
Accumulation units outstanding--Joint Edge 296,269 1,113,293 95,464
============ ========= ==========
Unit value $ 1.325408 $ 3.132626 $ 1.871769
============ ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Assets
Investments at cost $19,900,213 $19,529,649 $ 12,424,740
============ ========= ==========
Investment in The Phoenix Edge Series Fund, at market 20,261,898 20,759,895 13,725,016
------------ --------- ----------
Total assets 20,261,898 20,759,895 13,725,016
Liabilities
Accrued expenses to related party 12,619 12,722 8,541
------------ --------- ----------
Net assets $20,249,279 $20,747,173 $13,716,475
============ ========= ==========
Accumulation units outstanding--Flex Edge 9,236,346 14,435,212 9,521,556
============ ========= ==========
Accumulation units outstanding--Joint Edge 194,742 555,114 400,572
============ ========= ==========
Unit value $ 2.147078 $ 1.384037 $ 1.382412
============ ========= ==========
</TABLE>
59
<PAGE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
-------------- ---------- ------------
<S> <C> <C> <C>
Investment income
Distributions $656,913 $ 963,473 $ 456,389
Expenses
Mortality and expense risk charges 94,526 688,907 42,067
------------ -------- ----------
Net investment income 562,387 274,566 414,322
------------ -------- ----------
Net realized gain from share transactions -- 4,178 1,800
Net realized gain distribution from Fund -- 12,514,179 --
Net unrealized appreciation on investment -- 9,293,459 651,393
------------ -------- ----------
Net gain on investments -- 21,811,816 653,193
------------ -------- ----------
Net increase in net assets resulting from operations $562,387 $22,086,382 $1,067,515
============ ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
Investment income
Distributions $ 554,634 $ 65,980 $ 394,319
Expenses
Mortality and expense risk charges 130,115 141,161 88,010
------------ --------- ----------
Net investment income (loss) 424,519 (75,181) 306,309
------------ --------- ----------
Net realized gain (loss) from share transactions 1,051 (16,995) 527
Net realized gain distribution from Fund 1,221,316 380,538 272,172
Net unrealized appreciation on investment 873,761 1,259,164 1,647,649
------------ --------- ----------
Net gain on investments 2,096,128 1,622,707 1,920,348
------------ --------- ----------
Net increase in net assets resulting from operations $2,520,647 $ 1,547,526 $2,226,657
============ ========= ==========
</TABLE>
60
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
--------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income $ 562,387 $ 274,566 $ 414,322
Net realized gain -- 12,518,357 1,800
Net unrealized appreciation -- 9,293,459 651,393
------------- --------- ----------
Net increase in net assets resulting from operations 562,387 22,086,382 1,067,515
------------- --------- ----------
From accumulation unit transactions
Participant deposits 23,196,295 34,460,166 1,851,602
Participant transfers (19,227,932) 15,470,116 884,223
Participant withdrawals (2,331,740) (12,409,600) (772,642)
------------- --------- ----------
Net increase in net assets resulting from participant
transactions 1,636,623 37,520,682 1,963,183
------------- --------- ----------
Net increase in net assets 2,199,010 59,607,064 3,030,698
Net assets
Beginning of period 11,752,531 58,342,316 3,670,077
------------- --------- ----------
End of period $ 13,951,541 $117,949,380 $6,700,775
============= ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 424,519 $ (75,181) $ 306,309
Net realized gain (loss) 1,222,367 363,543 272,699
Net unrealized appreciation 873,761 1,259,164 1,647,649
------------ --------- ----------
Net increase in net assets resulting from operations 2,520,647 1,547,526 2,226,657
------------ --------- ----------
From accumulation unit transactions
Participant deposits 5,457,071 7,548,871 3,800,064
Participant transfers 2,208,588 (399,608) 581,841
Participant withdrawals (2,158,665) (2,474,965) (1,761,880)
------------ --------- ----------
Net increase in net assets resulting from participant
transactions 5,506,994 4,674,298 2,620,025
------------ --------- ----------
Net increase in net assets 8,027,641 6,221,824 4,846,682
Net assets
Beginning of period 12,221,638 14,525,349 8,869,793
------------ --------- ----------
End of period $20,249,279 $20,747,173 $13,716,475
============ ========= ==========
</TABLE>
61
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1994
<TABLE>
<CAPTION>
Money Market Growth Bond
Sub-Account Sub-Account Sub-Account
--------------- ---------- ------------
<S> <C> <C> <C>
From operations
Net investment income $ 269,315 $ 294,375 $ 218,172
Net realized gain (loss) -- 3,213,016 (3,967)
Net unrealized depreciation -- (3,486,259) (392,992)
------------- -------- ----------
Net increase (decrease) in net assets resulting from
operations 269,315 21,132 (178,787)
------------- -------- ----------
From accumulation unit transactions
Participant deposits 21,682,948 26,040,831 1,844,201
Participant transfers (14,299,239) 7,532,883 23,923
Participant withdrawals (2,824,234) (7,655,667) (503,930)
------------- -------- ----------
Net increase in net assets resulting from participant
transactions 4,559,475 25,918,047 1,364,194
------------- -------- ----------
Net increase in net assets 4,828,790 25,939,179 1,185,407
Net assets
Beginning of period 6,923,741 32,403,137 2,484,670
------------- -------- ----------
End of period $ 11,752,531 $58,342,316 $3,670,077
============= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
Total Return International Balanced
Sub-Account Sub-Account Sub-Account
-------------- ----------- ------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 227,212 $ (56,510) $ 212,403
Net realized gain 343,918 305,474 61,943
Net unrealized depreciation (771,056) (732,849) (556,387)
------------ --------- ----------
Net decrease in net assets resulting from operations (199,926) (483,885) (282,041)
------------ --------- ----------
From accumulation unit transactions
Participant deposits 5,110,267 6,568,479 3,993,661
Participant transfers 1,128,647 4,843,273 149,204
Participant withdrawals (1,493,881) (1,519,024) (1,268,580)
------------ --------- ----------
Net increase in net assets resulting from participant
transactions 4,745,033 9,892,728 2,874,285
------------ --------- ----------
Net increase in net assets 4,545,107 9,408,843 2,592,244
Net assets
Beginning of period 7,676,531 5,116,506 6,277,549
------------ --------- ----------
End of period $12,221,638 $14,525,349 $ 8,869,793
============ ========= ==========
</TABLE>
62
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
<TABLE>
<CAPTION>
Money Market Sub-Account Growth Sub-Account
----------------------------- --------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
------------ -------------- ------------ ----------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.263974 $ 1.226981 $2.412541 $ 2.396670
Income from investment operations
Net investment income 0.061434 0.036993 0.008952 0.221088
Net realized and unrealized gain
(loss) -- -- 0.711133 (0.205217 )
Total from investment operations 0.061434 0.036993 0.720085 0.015871
---------- ------------ ---------- ---------------
Unit value, end of period $ 1.325408 $ 1.263974 $3.132626 $ 2.412541
========== ============ ========== ===============
Total return 4.86% 3.01% 29.85% 0.66%
Net assets, end of period (000) $13,952 $11,753 $117,949 $58,342
</TABLE>
<TABLE>
<CAPTION>
Bond Sub-Account Total Return Sub-Account
------------------------- ------------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
-------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $1.527250 $ 1.628351 $1.830914 $ 1.871886
Income from investment operations
Net investment income 0.133714 0.123373 0.053247 0.046564
Net realized and unrealized gain (loss) 0.210805 (0.224474) 0.262917 (0.087536 )
------ ----------- ---------- -------------
Total from investment operations 0.344519 (0.101101) 0.316164 (0.040972 )
------ ----------- ---------- -------------
Unit value, end of period $1.871769 $ 1.527250 $2.147078 $ 1.830914
====== =========== ========== =============
Total return 22.56% (6.21)% 17.27% (2.19)%
Net assets, end of period (000) $6,701 $3,670 $20,249 $12,222
</TABLE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
<TABLE>
<CAPTION>
International Sub-Account Balanced Sub-Account
--------------------------------- -----------------------------
Year Ended December 31, Year Ended December 31,
1995 1994 1995 1994
------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.273020 $ 1.282423 $1.129669 $ 1.171933
Income from investment operations
Net investment income (loss) (0.005393 ) (0.001098 ) 0.034768 0.031829
Net realized and unrealized gain (loss) 0.116410 (0.008305 ) 0.217975 (0.074093 )
----------- --------------- ---------- ------------
Total from investment operations 0.111017 (0.009403 ) 0.252743 (0.042264 )
----------- --------------- ---------- ------------
Unit value, end of period $ 1.384037 $ 1.273020 $1.382412 $ 1.129669
=========== =============== ========== ============
Total return 8.72% (0.73)% 22.37% (3.61)%
Net assets, end of period (000) $20,747 $14,525 $13,716 $8,870
</TABLE>
63
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
Note 1--Organization:
Phoenix Home Life Variable Universal Life Account (the Account) is a
separate investment account of Phoenix Home Life Mutual Insurance Company
(Phoenix Home Life). The Account is offered as Flex Edge for individual
variable life insurance and as Joint Edge for variable first-to-die joint
life insurance. The account is organized as a unit investment trust under the
Investment Company Act of 1940, as amended, and currently consists of six
Sub-accounts, which invest in six of the available portfolios of The Phoenix
Edge Series Fund (the Fund). The Real Estate Series is currently not
available to the Account.
Each series has distinct investment objectives. The Money Market Series is
a short-term investment fund, the Growth Series is a growth common stock
fund, the Bond Series is a long-term debt fund, the Total Return Series
invests in equity securities and long and short-term debt, the International
Series invests primarily in internationally diversified equity securities and
the Balanced Series is a balanced fund which invests in growth stocks and at
least 25% of its assets in fixed income securities. Contract holders may also
direct the allocation of their investments between the account and the
Guaranteed Interest Account of the general account of Phoenix Home Life.
Note 2--Significant Accounting Policies:
Certain reclassifications have been made to prior year's amounts to conform
with the 1995 presentation.
A. Valuation of Investments: Investments are made exclusively in the Fund and
are valued at the net asset values per share of the respective Series.
B. Investment transactions and related income: Realized gains and losses
include capital gain distributions from the Fund as well as gains and losses
on sales of shares in the fund determined on the LIFO (last in, first out)
basis.
C. Income taxes: The Account is not a separate entity from Phoenix Home Life
and under current federal income tax law, income arising from the Account is
not taxed since reserves are established equivalent to such income.
Therefore, no provision for related federal or state income taxes is
required.
D. Distributions: Distributions are recorded as investment income on the
ex-dividend date.
Note 3--Purchases and Sales of Shares of The Phoenix Edge Series Fund:
Purchases and sales of shares of the Fund for the year ended December 31,
1995 aggregated the following:
<TABLE>
<CAPTION>
Sub-Account Purchases Sales
- ------------- ---------- ------------
<S> <C> <C>
Money Market $15,358,015 $13,127,029
Growth 52,656,500 2,386,549
Bond 3,150,173 775,101
Total Return 7,932,811 790,863
International 7,725,084 2,760,274
Balanced 4,832,165 1,642,462
</TABLE>
Note 4--Participant Accumulation Unit Transactions (in units):
<TABLE>
<CAPTION>
Sub-Account
-----------------------------------------------------------------------------------
Money Total
Market Growth Bond Return International Balanced
----------- ---------- -------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Flex Edge:
Participant deposits 16,530,006 11,865,242 1,056,465 2,618,013 5,503,623 2,914,431
Participant transfers (13,776,782) 5,246,964 514,311 1,064,109 (387,514) 438,017
Participant withdrawals (1,666,716) (4,223,772) (441,021) (1,027,984) (1,776,981) (1,344,173)
Joint Edge:
Participant deposits 1,348,536 507,471 38,054 100,104 269,791 129,152
Participant transfers (1,073,563) 295,473 21,958 48,759 87,491 11,893
Participant withdrawals (133,344) (222,390) (12,913) (47,069) (116,238) (78,868)
</TABLE>
Note 5--Policy Loans:
Transfers are made to Phoenix Home Life's general account as a result of
policy loans. Contract provisions allow contract owners to borrow up to 90%
of a policy's cash value with an interest rate set in accordance with the
contract due and payable on each policy anniversary. At the time a loan is
granted, an amount equivalent to the amount of the loan is transferred from
the Account to Phoenix Home Life's general account as collateral for the
outstanding loan. These transfers are included in participant withdrawals in
the accompanying financial statements. Amounts in the general account are
credited with interest at 6%. Loan repayments result in a transfer of
collateral back to the Account.
Note 6--Investment Advisory Fees and Related Party Transactions:
Phoenix Home Life and its indirect, less than wholly owned subsidiary,
Phoenix Equity Planning Corporation, a registered broker/dealer in
securities, provide all services to the Account.
The cost of insurance is charged to each policy on a monthly basis by a
withdrawal of participant units prorated among the elected Sub- accounts. The
amount charged to each policy depends on a number of variables including sex,
age and risk class as well as the death benefit and cash value of the policy.
Such costs aggregated $14,392,712 during the year ended December 31, 1995.
Upon partial surrender of a policy a surrender fee of the lesser of $25 or
2% of the partial surrender amount paid and a partial surrender charge equal
to a pro rata portion of the applicable surrender charge is deducted from the
policy value and paid to Phoenix Home Life. Partial surrender fees paid
during the year ended December 31, 1995 were $853,600.
64
<PAGE>
Phoenix Equity Planning Corporation is the principal underwriter and
distributor of the Account. Phoenix Equity Planning Corporation is reimbursed
for its distribution and underwriting expenses by Phoenix Home Life.
Policies which are surrendered during the first ten policy years will
incur a surrender charge, consisting of a contingent deferred sales charge
designed to recover expenses for the distribution of Policies that are
terminated by surrender before distribution expenses have been recouped, and
a contingent deferred issue charge designed to recover expenses for the
administration of Policies that are terminated by surrender before
administrative expenses have been recouped. These are contingent charges
because they are paid only if the Policy is surrendered (or a partial
withdrawal is taken or the Face Amount is reduced or the Policy lapses)
during the first ten policy years. They are deferred charges because they are
not deducted from premiums.
Phoenix Home Life assumes the risk that insureds may live for a shorter
time than projected because of inaccuracies in the projecting process and,
accordingly, that an aggregate amount of death benefits greater than
projected will be payable and that its expenses may be higher than its
deductions for such expenses. In return for the assumption of these mortality
and expense risks, Phoenix Home Life charges the Account an annual rate of
0.80% of the average daily net assets of the Account for mortality and
expense risks assumed.
Note 7--Diversification Requirements
Under the provisions of Section 817(h) of the Internal Revenue Code (the
Code), a variable universal life contract, other than a contract issued in
connection with certain types of employee benefit plans, will not be treated
as a universal life contract for federal tax purposes for any period for
which the investments of the segregated asset account on which the contract
is based are not adequately diversified. The Code provides that the
"adequately diversified" requirement may be met if the underlying investments
satisfy either a statutory safe harbor test or diversification requirements
set forth in regulations issued by the Secretary of Treasury.
The Internal Revenue Service has issued regulations under Section 817(h)
of the Code. Phoenix Home Life believes that the Account satisfies the
current requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
65
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP [logo]
To the Participants of
Phoenix Home Life Variable
Universal Life Account
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets present fairly,
in all material respects, the financial position of the Money Market
Sub-Account, Growth Sub-Account, Bond Sub-Account, Total Return Sub-Account,
International Sub-Account and Balanced Sub- Account (constituting the Phoenix
Home Life Variable Universal Life Account, hereafter referred to as the
"Account") at December 31, 1995, the results of each of their operations for
the year then ended and the changes in each of their net assets for each of
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the
Account's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
[Price Waterhouse LLP signature]
Hartford, CT 06103
February 13, 1996
66
<PAGE>
PHOENIX HOME LIFE
VARIABLE UNIVERSAL LIFE ACCOUNT
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
UNDERWRITER
Phoenix Equity Planning Corporation
P.O. Box 2200
100 Bright Meadow Boulevard
Enfield, Connecticut 06083-2200
CUSTODIAN
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
Floor 3B
New York, New York 10081
INTERNATIONAL SERIES CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
One Financial Plaza
Hartford, Connecticut 06103
67
<PAGE>
APPENDIX A
THE GUARANTEED INTEREST ACCOUNT
Contributions to the Guaranteed Interest Account ("GIA") under the Policy
and transfers to the GIA become part of the general account of Phoenix Home Life
(the "General Account"), which supports insurance and annuity obligations.
Because of exemptive and exclusionary provisions, interest in the General
Account has not been registered under the Securities Act of 1933 ("1933 Act")
nor is the General Account registered as an investment company under the
Investment Company Act of 1940 ("1940 Act"). Accordingly, neither the General
Account nor any interest therein is specifically subject to the provisions of
the 1933 or 1940 Acts and the staff of the Securities and Exchange Commission
has not reviewed the disclosures in this Prospectus concerning the GIA.
Disclosures regarding the GIA and the General Account, however, may be subject
to certain generally applicable provisions of the federal securities laws
relating to the accuracy and completeness of statements made in prospectuses.
The General Account is made up of all of the general assets of Phoenix Home
Life other than those allocated to any separate account. Premium payments will
be allocated to the GIA and, therefore, the General Account, as elected by the
Policyowner at the time of purchase or as subsequently changed. Phoenix Home
Life will invest the assets of the General Account in assets chosen by it and
allowed by applicable law. Investment income from General Account assets is
allocated between Phoenix Home Life and the contracts participating in the
General Account, in accordance with the terms of such contracts.
Investment income from the General Account allocated to Phoenix Home Life
includes compensation for mortality and expense risks borne by it in connection
with General Account contracts.
The amount of investment income allocated to the Policies will vary from
year to year in the sole discretion of Phoenix Home Life. However, Phoenix Home
Life guarantees that it will credit interest at a rate of not less than 4% per
year, compounded annually, to amounts allocated to the unloaned portion of the
GIA. The loaned portion of the GIA will be credited interest at an effective
annual rate of 6%. Phoenix Home Life may credit interest at a rate in excess of
4% per year; however, it is not obligated to credit any interest in excess of 4%
per year.
Bi-weekly, Phoenix Home Life will set the excess interest rate, if any, that
will apply to amounts deposited to the GIA. That rate will remain in effect for
such deposits for an initial guarantee period of one full year from the date of
deposit. Upon expiration of the initial one-year guarantee period (and each
subsequent one-year guarantee period thereafter), the rate to be applied to any
deposits whose guaranteed period has just ended will be the same rate as is
applied to new deposits allocated at that time to the GIA. This rate will
likewise remain in effect for a guarantee period of one full year from the date
the new rate is applied.
Excess interest, if any, will be determined by Phoenix Home Life based on
information as to expected investment yields. Some of the factors that Phoenix
Home Life may consider in determining whether to credit interest to amounts
allocated to the GIA and the amount thereof, are general economic trends, rates
of return currently available and anticipated on investments, regulatory and tax
requirements and competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED
TO THE GIA IN EXCESS OF 4% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF
PHOENIX HOME LIFE AND WITHOUT REGARD TO ANY SPECIFIC FORMULA. THE CONTRACT OWNER
ASSUMES THE RISK THAT INTEREST CREDITED TO GIA ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR.
Phoenix Home Life is aware of no statutory limitations on the maximum amount
of interest it may credit, and the Board of Directors has set no limitations.
However, inherent in Phoenix Home Life's exercise of discretion in this regard
is the equitable allocation of distributable earnings and surplus among its
various policyholders and contract owners.
Excess interest, if any, will be credited on the GIA Policy Value. Phoenix
Home Life guarantees that, at any time, the GIA Policy Value will not be less
than the amount of premium payments allocated to the GIA, plus interest at the
rate of 4% per year, compounded annually, plus any additional interest which
Phoenix Home Life may, in its discretion, credit to the GIA, less the sum of all
annual administrative or surrender charges, any applicable premium taxes, and
less any amounts surrendered or loaned. If the Policyowner surrenders the
Policy, the amount available from the GIA will be reduced by any applicable
surrender charge and annual administration charge (see "Deductions and
Charges").
IN GENERAL, ONE TRANSFER PER CONTRACT YEAR IS ALLOWED FROM THE GUARANTEED
INTEREST ACCOUNT. THE AMOUNT WHICH CAN BE TRANSFERRED IS LIMITED TO THE GREATER
OF $1,000 OR 25% OF THE CONTRACT VALUE IN THE GUARANTEED INTEREST ACCOUNT AS OF
THE LAST CONTRACT ANNIVERSARY. UNDER THE SYSTEMATIC TRANSFER PROGRAM, TRANSFERS
OF APPROXIMATELY EQUAL AMOUNTS MAY BE MADE OVER A MINIMUM 18-MONTH PERIOD.
NON-SYSTEMATIC TRANSFERS FROM THE GUARANTEED INTEREST ACCOUNT WILL BE
EFFECTUATED ON THE DATE OF RECEIPT BY VARIABLE PRODUCTS OPERATIONS, UNLESS
OTHERWISE REQUESTED BY THE CONTRACT OWNER.
68
<PAGE>
APPENDIX B
ILLUSTRATIONS OF DEATH BENEFITS, POLICY VALUES ("ACCOUNT VALUES"), AND
CASH SURRENDER VALUES.
The tables on the following pages illustrate how a Policy's Death Benefits,
Account Values and Cash Surrender Value could vary over time assuming constant
hypothetical gross (after tax) annual investment returns of 0% and 12%. The
Policy benefits will differ from those shown in the tables if the annual
investment returns are not absolutely constant. That is, the figures will be
different if the returns averaged 0% or 12% over a period of years but went
above or below those figures in individual Policy Years. The Policy benefits
will also differ, depending on your premium allocations to each Sub-account of
the VUL Account, if the overall actual rates of return averaged 0% or 12%, but
went above or below those figures for the individual Sub-accounts. The tables
are for standard risk males and females who have never smoked. In states where
cost of insurance rates are not based on the insured's sex, the tables
designated "male" apply to all standard risk insureds who have never smoked.
Account Values and Cash Surrender Values may be lower for smokers or former
smokers or for risk classes involving higher mortality risk. Planned premium
payments are assumed to be paid at the beginning of each Policy Year. The
difference between the Policy Value and the Cash Surrender Value in the first
ten years is the Surrender Charge. Illustrated tables are included for death
benefit Option 1 and Option 2. Tables are also included to reflect the blended
cost of insurance charge applied under multiple lives Policies.
The Death Benefit, Account Value, and Cash Surrender Value amounts reflect
the following current charges:
1. Issue Charge of $150.
2. Monthly Administrative Charge of $5.00 per month ($10 per month guaranteed
maximum).
3. Premium Tax Charge of 2.25% (will vary from state to state).
4. Cost of Insurance Charge. The tables illustrate cost of insurance at both
the current rates and at the maximum rates guaranteed in the Policies. (See
"Charges and Deductions--Cost of Insurance.")
5. Mortality and Expense Risk Charge, which is a daily charge equivalent to
.80% on an annual basis against the VUL Account for mortality and expense
risks. (See "Charges and Deductions--Mortality and Expense Risk Charge.")
These illustrations also assume an average investment advisory fee of .73%
on an annual basis, of the average daily net asset value of each of the Series
of the Funds. These illustrations also assume other ongoing average Fund
expenses of .22%. All other Fund expenses, except capital items such as
brokerage commissions, are assumed by the Adviser or by Phoenix Home Life.
Management may decide to limit the amount of expense reimbursement in the
future. If this reimbursement had not been in place for the fiscal year ended
December 31, 1995, total operating expenses for the Multi-Sector Series, Real
Estate Series, Strategic Theme Series, Wanger U.S. Small Cap Series and Wanger
International Small Cap Series would have been approximately 0.73%, 1.98% 1.33%,
2.35% and 4.20%, respectively, of the average net assets of the Series. (See
"Charges and Deductions--Investment Management Charge.")
Taking into account the Mortality and Expense Risk Charge and the investment
advisory fees and expenses, the gross annual investment return rates of 0% and
12% on the Funds' assets are equivalent to net annual investment return rates
of approximately -1.74% and 10.17%, respectively. For individual illustrations,
interest rates ranging between 0% and 12% may be selected in place of the 12%
rate.
The hypothetical returns shown in the tables are without any tax charges that
may be attributable to the VUL Account in the future. If such Tax Charges are
imposed in the future, then in order to produce after tax returns equal to those
illustrated for 0% and 12%, a sufficiently higher amount in excess of the
hypothetical interest rates would have to be earned. (See "Charges and
Deductions--Other Charges--Taxes.")
The second column of each table shows the amount that would accumulate if an
amount equal to the premiums paid were invested to earn interest, after taxes,
at 5% compounded annually. These tables show that if a Policy is returned in its
very early years for payment of its Cash Surrender Value, that Cash Surrender
Value may be low in comparison to the amount of the premiums accumulated with
interest. Thus, the cost of owning a Policy for a relatively short time may be
high.
On request, we will furnish the Policyowner with a comparable illustration based
on the age and sex of the proposed insured person(s), standard risk assumptions
and the initial face amount and planned premium chosen.
69
<PAGE>
<TABLE>
Page 1 of 1
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Statutory Home Office: East Greenbush, New York FACE AMOUNT: $100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
<CAPTION>
ASSUMING
-----------------------------------------------------------------------------
CURRENT CHARGES GUARANTEED CHARGES
--------------------------------------- -----------------------------------
ASSUMED CASH CASH
ANNUAL PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- -------- -------- -------- -------- -------- ---------- ------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 704 0 100,000 527 0 100,000
2 1,000 2,153 1,633 720 100,000 1,186 274 100,000
3 1,000 3,310 2,651 1,647 100,000 1,825 821 100,000
4 1,000 4,526 3,766 2,736 100,000 2,442 1,411 100,000
5 1,000 5,802 4,989 3,959 100,000 3,036 2,005 100,000
6 1,000 7,142 6,329 5,422 100,000 3,606 2,700 100,000
7 1,000 8,549 7,796 7,013 100,000 4,151 3,368 100,000
8 1,000 10,027 9,402 8,807 100,000 4,671 4,076 100,000
9 1,000 11,578 11,162 10,754 100,000 5,164 4,756 100,000
10 1,000 13,207 13,090 13,090 100,000 5,629 5,629 100,000
11 1,000 14,917 15,206 15,206 100,000 6,065 6,065 100,000
12 1,000 16,713 17,521 17,521 100,000 6,470 6,470 100,000
13 1,000 18,599 20,058 20,058 100,000 6,842 6,842 100,000
14 1,000 20,579 22,838 22,838 100,000 7,180 7,180 100,000
15 1,000 22,657 25,887 25,887 100,000 7,483 7,483 100,000
16 1,000 24,840 29,233 29,233 100,000 7,747 7,747 100,000
17 1,000 27,132 32,909 32,909 100,000 7,968 7,968 100,000
18 1,000 29,539 36,949 36,949 100,000 8,140 8,140 100,000
19 1,000 32,066 41,393 41,393 100,000 8,259 8,259 100,000
20 1,000 34,719 46,283 46,283 100,000 8,316 8,316 100,000
@ 62 27,000 57,403 98,005 98,005 125,447 6,474 6,474 100,000
@ 65 30,000 69,761 133,186 133,186 162,487 3,882 3,882 100,000
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
33.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
70
<PAGE>
<TABLE>
Page 1 of 1
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Statutory Home Office: East Greenbush, New York FACE AMOUNT:$100,000
FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 1
<CAPTION>
ASSUMING
-------------------------------------------------------------------------
CURRENT CHARGES GUARANTEED CHARGES
----------------------------------- -----------------------------------
ASSUMED CASH CASH
ANNUAL PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- --------- --------- -------- --------- -------- ----------- ------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 720 0 100,000 549 0 100,000
2 1,000 2,153 1,666 785 100,000 1,228 347 100,000
3 1,000 3,310 2,701 1,744 100,000 1,886 929 100,000
4 1,000 4,526 3,836 2,878 100,000 2,523 1,565 100,000
5 1,000 5,802 5,078 4,121 100,000 3,136 2,178 100,000
6 1,000 7,142 6,440 5,598 100,000 3,725 2,882 100,000
7 1,000 8,549 7,935 7,208 100,000 4,288 3,560 100,000
8 1,000 10,027 9,577 9,024 100,000 4,825 4,272 100,000
9 1,000 11,578 11,382 11,004 100,000 5,338 4,960 100,000
10 1,000 13,207 13,364 13,364 100,000 5,826 5,826 100,000
11 1,000 14,917 15,541 15,541 100,000 6,290 6,290 100,000
12 1,000 16,713 17,929 17,929 100,000 6,728 6,728 100,000
13 1,000 18,599 20,551 20,551 100,000 7,140 7,140 100,000
14 1,000 20,579 23,432 23,432 100,000 7,524 7,524 100,000
15 1,000 22,657 26,597 26,597 100,000 7,880 7,880 100,000
16 1,000 24,840 30,078 30,078 100,000 8,205 8,205 100,000
17 1,000 27,132 33,910 33,910 100,000 8,498 8,498 100,000
18 1,000 29,539 38,132 38,132 100,000 8,755 8,755 100,000
19 1,000 32,066 42,785 42,785 100,000 8,972 8,972 100,000
20 1,000 34,719 47,916 47,916 100,000 9,149 9,149 100,000
@ 62 27,000 57,403 102,127 102,127 130,723 9,178 9,178 100,000
@ 65 30,000 69,761 139,026 139,026 169,613 8,249 8,249 100,000
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
38.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
71
<PAGE>
<TABLE>
Page 1 of 1
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Statutory Home Office: East Greenbush, New York FACE AMOUNT:$100,000
MALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
<CAPTION>
ASSUMING
-------------------------------------------------------------------------
CURRENT CHARGES GUARANTEED CHARGES
----------------------------------- -----------------------------------
ASSUMED CASH CASH
ANNUAL PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- -------- --------- -------- --------- -------- ---------- ------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 703 0 100,703 526 0 100,526
2 1,000 2,153 1,629 716 101,629 1,183 271 101,183
3 1,000 3,310 2,642 1,639 102,643 1,818 814 101,818
4 1,000 4,526 3,751 2,720 103,751 2,430 1,399 102,430
5 1,000 5,802 4,963 3,932 104,963 3,017 1,987 103,018
6 1,000 7,142 6,288 5,381 106,289 3,579 2,673 103,580
7 1,000 8,549 7,736 6,953 107,736 4,114 3,331 104,115
8 1,000 10,027 9,316 8,721 109,316 4,622 4,027 104,622
9 1,000 11,578 11,041 10,634 111,042 5,100 4,692 105,100
10 1,000 13,207 12,926 12,926 112,927 5,549 5,549 105,549
11 1,000 14,917 14,986 14,986 114,986 5,965 5,965 105,965
12 1,000 16,713 17,230 17,230 117,230 6,347 6,347 106,347
13 1,000 18,599 19,676 19,676 119,676 6,694 6,694 106,694
14 1,000 20,579 22,341 22,341 122,342 7,004 7,004 107,004
15 1,000 22,657 25,245 25,245 125,246 7,274 7,274 107,274
16 1,000 24,840 28,410 28,410 128,411 7,502 7,502 107,503
17 1,000 27,132 31,860 31,860 131,861 7,683 7,683 107,684
18 1,000 29,539 35,620 35,620 135,621 7,811 7,811 107,811
19 1,000 32,066 39,716 39,716 139,717 7,879 7,879 107,880
20 1,000 34,719 44,175 44,175 144,176 7,811 7,811 107,882
@ 62 27,000 57,403 88,644 88,644 188,645 5,513 5,513 105,514
@ 65 30,000 69,761 117,450 117,450 217,450 2,680 2,680 102,681
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
32.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
72
<PAGE>
<TABLE>
Page 1 of 1
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Statutory Home Office: East Greenbush, New York FACE AMOUNT:$100,000
FEMALE 35 NEVERSMOKE INITIAL ANNUAL PREMIUM: $1,000
THE FLEX EDGE--A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY OPTION 2
<CAPTION>
ASSUMING
-------------------------------------------------------------------------
CURRENT CHARGES GUARANTEED CHARGES
------------------------------------ -----------------------------------
ASSUMED CASH CASH
ANNUAL PREMIUM ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
PREMIUM ACCUM. VALUE VALUE BENEFIT VALUE VALUE BENEFIT
YEAR PAYMENTS @ 5.0% @ 12.00% @ 12.00% @ 12.00% @ 0.0% @ 0.0% @ 0.0%
- --------- -------- -------- ---------- -------- ----------- ------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,000 1,050 719 0 100,720 547 0 100,548
2 1,000 2,153 1,662 781 101,663 1,225 344 101,226
3 1,000 3,310 2,693 1,736 102,694 1,880 922 101,880
4 1,000 4,526 3,821 2,863 103,821 2,512 1,554 102,512
5 1,000 5,802 5,054 4,096 105,054 3,118 2,161 103,119
6 1,000 7,142 6,402 5,559 106,402 3,700 2,857 103,700
7 1,000 8,549 7,879 7,151 107,879 4,253 3,526 104,254
8 1,000 10,027 9,496 8,943 109,497 4,779 4,226 104,780
9 1,000 11,578 11,271 10,893 111,272 5,278 4,900 105,279
10 1,000 13,207 13,215 13,215 113,215 5,751 5,751 105,751
11 1,000 14,917 15,342 15,342 115,342 6,196 6,196 106,197
12 1,000 16,713 17,667 17,667 117,668 6,614 6,614 106,614
13 1,000 18,599 20,211 20,211 120,211 7,003 7,003 107,003
14 1,000 20,579 22,992 22,992 122,993 7,361 7,361 107,361
15 1,000 22,657 26,035 26,035 126,035 7,688 7,688 107,689
16 1,000 24,840 29,363 29,363 129,364 7,981 7,981 107,981
17 1,000 27,132 33,009 33,009 133,009 8,238 8,238 108,238
18 1,000 29,539 37,002 37,002 137,003 8,456 8,456 108,456
19 1,000 32,066 41,377 41,377 141,378 8,629 8,629 108,629
20 1,000 34,719 46,171 46,171 146,172 8,758 8,758 108,758
@ 62 27,000 57,403 95,015 95,015 195,016 8,339 8,339 108,340
@ 65 30,000 69,761 127,307 127,307 227,308 7,152 7,152 107,153
</TABLE>
Based on 0% interest rate and guaranteed charges, the policy will lapse in year
37.
Death Benefit, Account Value, and Cash Surrender Value are based on hypothetical
gross interest rates shown, assume current and guaranteed charges and no policy
loans or withdrawals, and are calculated at the end of the Policy Year. Assumed
Premium Payments shown are assumed paid in full at the beginning of the Policy
Year. Payment of premiums shown other than in full at the beginning of the
Policy Year would reduce values and benefits below the hypothetical illustrated
amounts shown. Values shown reflect an effective annual asset charge of 1.75%
(includes mortality and expense risk charge of 0.8% and average fund operating
expenses of 0.95% applicable to the investment Sub-accounts of the VUL
Separate Account). Hypothetical gross interest rates are presented for
illustrative purposes only to illustrate funds allocated entirely to the
investment Sub-accounts of the VUL Separate Account and do not in any way
represent actual results or suggest that such results will be achieved in the
future. Actual values will differ from those shown whenever actual investment
results differ from hypothetical gross interest rates illustrated. A Guaranteed
Interest Account providing interest at a minimum guaranteed rate of 4% is also
available under this product through the General Account.
This illustration assumes a premium tax of 2.25%.
73
<PAGE>
PART II. OTHER INFORMATION
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.
RULE 484 UNDERTAKING
Section 723 of the New York Business Corporation Law, as made applicable to
insurance companies by Section 108 of the New York Insurance Law, provides that
a corporation may indemnify any director or officer of the corporation made, or
threatened to be made, a party to an action or proceeding other than one by or
in the right of the corporation to procure a judgment in its favor, whether
civil or criminal, including an action by or in the right of any other
corporation of any type or kind, by reason of the fact that he, his testator or
intestate, served such other corporation in any capacity at the request of the
indemnifying corporation.
Article VI Section 6.1 of the By-Laws of Phoenix Home Life provides that:
"To the full extent permitted by the laws of the State of New York, the Company
shall indemnify any person made or threatened to be made a party to any action,
proceeding or investigation, whether civil or criminal, by reason of the fact
that such person . . . is or was a Director or Officer of the Company; or . . .
serves or served another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity at the request of the
Company, and also is or was a Director or Officer of the Company . . . The
Company shall also indemnify any [such] person . . . by reason of the fact that
such person or such person's testator or intestate is or was an employee or
agent of the Company . . . ."
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATIONS, DESCRIPTION AND UNDERTAKINGS PURSUANT TO PARAGRAPH
(B)(13)(III)(F) OF RULE 6E-3(T) UNDER THE INVESTMENT COMPANY ACT OF 1940.
Registrant makes the following representations:
(1) Section 6e-3(T)(b)(13)(iii)(F) is being relied upon.
(2) The level of the mortality and expense risk charge is within the range
of industry practice for comparable flexible or scheduled contracts.
(3) Phoenix Home Life Mutual Insurance Company has concluded that there is
a reasonable likelihood that the distribution financing arrangement of
Phoenix Home Life Variable Universal Life Account (the "VUL Account")
will benefit the VUL Account and Policyowners.
(4) The VUL Account will invest only in management companies which have
undertaken to have a board of directors, a majority of whom are not
interested persons of the company, formulate and approve any plan
under Rule 12b-1 to finance distribution expenses.
The methodology used to support the representation made in paragraph (2)
above is based on an analysis of selected variable life insurance policies whose
registration statements have been declared effective by the Commission which
contain similar guarantees and are sold in similar markets. Registrant
undertakes to keep and make available to the Commission on request the documents
used to support the representation in paragraph (2) above and a memorandum
setting forth the basis for the representation in paragraph (3) above.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to Form S-6 Registration Statement, File No.
33-23251, comprises the following papers and documents:
The facing sheet.
The cross-reference sheet to Form N-8B-2.
The Prospectus describing Phoenix Home Life Policy Form 2667 and riders
thereto ("Flex Edge"), consisting of 73 pages.
The Prospectus describing Phoenix Home Life Policy Forms V601 and V603 and
riders thereto ("Joint Edge" and "Flex Edge Success," respectively),
consisting of 68 pages.
The undertaking to file reports.
The Rule 484 undertaking.
Representations, Description and Undertakings Pursuant to Paragraph
(b)(13)(iii)(F) of Rule 6e-3(T) under the Investment Company Act of 1940.
The signature page.
The powers of attorney.*
Written consents of the following persons:
(a) Richard J. Wirth, Esq.*
(b) Jorden Burt Berenson & Johnson LLP*
(c) Price Waterhouse, LLP*
(d) M. Spencer Hamilton, F.S.A.*
The following exhibits:
1. The following exhibits correspond to those required by paragraph A to the
instructions as to exhibits in Form N-8B-2:
A. (1) Resolution of the Board of Directors of Depositor establishing
the VUL Account.****
(2) Not Applicable.
(3) Distribution of Policies:
(a) Form of Underwriting Agreement between Depositor and Phoenix
Equity Planning Corporation.**
(b) Form of Agreement between Phoenix Equity Planning Corporation
and Independent Brokers with respect to the sale of
Policies.**
(c) Not Applicable.
(4) Not Applicable.
(5) Specimen Policies with optional riders
(a) Flexible Premium Variable Universal Life Insurance Policy
Form Number 2667 of Depositor, together with Amendment
Permitting Face Amount Increases VR01, Death Benefit
Protection Rider VR02, Variable Life Policy Exchange Option
Rider VR08, Death Benefit Option - Policy Amendment VR23,
Temporary Money Market Allocation Amendment VR130, Accidental
Death Benefit Rider VR147, Disability Payment of Specified
Annual Premium Amount Rider VR148, Death Benefit Options
-Policy Amendment VR149, Additional Purchase Option Rider
VR150, and Accelerated Living Benefit Rider VR162. ("Flex
Edge")*****
(b) Flexible Premium Joint Variable Universal Life Policy Form
Number V601 of Depositor, together with Temporary Money
Market Allocation Amendment VR130, Survivor Insurance
Purchase Option Rider VR03, Variable Joint Life Policy
Exchange Option Rider VR04, Disability Benefit to Age 65
Rider VR05 and Term Insurance Rider VR06. ("Joint
Edge")*****
(c) Flexible Premium Variable Universal Life Insurance Policy
Form Number V603 of Depositor, together with Temporary Money
Market Allocation Amendment VR130, Accidental Death Benefit
Rider VR147, Disability Payment of Specified Annual Premium
Amount Rider VR148, Purchase Protector Rider VR150, Living
Benefit Rider VR162, Whole Life Exchange Option Rider VR08,
Cash Value Accumulation Test Rider VR11 and Death Benefit
Protection Rider VR24. ("Flex Edge Success")*****
II-2
<PAGE>
(6) (a) Charter of Phoenix Home Life.*****
(b) By-Laws of Phoenix Home Life.*****
(7) Not Applicable.
(8) Not Applicable.
(9) Not Applicable.
(10) Forms of application for each of Flex Edge, Joint Edge and Flex
Edge Success.*
(11) Memorandum describing transfer and redemption procedures and
method of computing adjustments in payments and cash values upon
conversion to fixed benefit policies.***
2. See Exhibit 1.A(5).
3. Opinion of Richard J. Wirth, Esq., Counsel of Depositor as to the
legality of the securities being registered.* (See number 9 below.)
4. Opinion of M. Spencer Hamilton, Actuary, as to Illustrations. (See
number 10 below.)
5. Not Applicable. No financial statement will be omitted from the Prospectus
pursuant to Instruction 1(b) or (c) of Part I.
6. Not Applicable.
7. Consent of Jorden Burt Berenson & Johnson, LLP.*
8. Consent of Price Waterhouse, LLP.*
9. Consent of Richard J. Wirth, Esq.*
10. Consent of M. Spencer Hamilton, F.S.A.*
- --------------
* Filed herewith.
** This exhibit was previously filed as an exhibit to Post-Effective
Amendment No. 2 to the registration statement filed May 1, 1990, and
is incorporated by reference from such Post-Effective Amendment.
*** This exhibit was previously filed as an exhibit to Pre-Effective
Amendment No. 1 to the registration statement, filed October 21,
1988, and is incorporated by reference from such Pre-Effective
Amendment.
**** This exhibit was previously filed as an exhibit to this registration
statement, filed July 21, 1988, and is incorporated by reference
from such Pre-Effective Amendment.
***** This exhibit was previously filed as an exhibit to Post-Effective
Amendment No. 12 to the registration statement filed February 13,
1996 via EDGAR, and is incorporated by reference from such
Post-Effective Amendment.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Phoenix Home Life Variable Universal Life Account certifies that it meets all of
the requirements for effectiveness of this registration statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
No. 12 to the Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, in the City of Hartford, State of
Connecticut on the 24th day of April, 1996.
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
---------------------------------------------------------------
(Registrant)
By: PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
---------------------------------------------------------------
(Depositor)
By: /s/ Dona D. Young
---------------------------------------------------------------
*Dona D. Young, Executive Vice President,
Individual Insurance and General Counsel
ATTEST: /s/ Lewis A. Singer
------------------------------------
Lewis A. Singer, Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director April 24, 1996
- ---------------------------------------
*Sal H. Alfiero
Director April 24, 1996
- ---------------------------------------
*J. Carter Bacot
Director April 24, 1996
- ---------------------------------------
*Carol H. Baldi
Director April 24, 1996
- ---------------------------------------
*Peter C. Browning
Director April 24, 1996
- ---------------------------------------
*Richard N. Cooper
Director April 24, 1996
- ---------------------------------------
*Gordon J. Davis
Chairman of the Board, President and Chief April 24, 1996
- ---------------------------------------
*Robert W. Fiondella Executive Officer (Principal Executive Officer)
Director April 24, 1996
- ---------------------------------------
*Jerry J. Jasinowski
Director April 24, 1996
- ---------------------------------------
*Marilyn E. LaMarche
Director April 24, 1996
- ---------------------------------------
*Philip R. McLoughlin
</TABLE>
S-1(c)
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director April 24, 1996
- ---------------------------------------
*Charles J. Paydos
Director April 24, 1996
- ---------------------------------------
*Herbert Roth, Jr.
Director April 24, 1996
- ---------------------------------------
*Robert F. Vizza
Director April 24, 1996
- ---------------------------------------
*Wilson Wilde
Director April 24, 1996
- ---------------------------------------
*Robert G. Wilson
Executive Vice President and Chief Financial April 24, 1996
- ---------------------------------------
*David W. Searfoss Officer (Principal Accounting and Financial
Officer)
</TABLE>
By: /s/ Dona D. Young
---------------------------------------
* Dona D. Young as Attorney in Fact Pursuant to Powers of Attorney, copies
of which are filed herewith.
S-2(c)
<PAGE>
POWERS OF ATTORNEY
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Sal H. Alfiero Director April 15, 1996
-------------------------------
Sal H. Alfiero
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ J. Carter Bacot Director April 15, 1996
-----------------------------------
J. Carter Bacot
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Carol H. Baldi Director April 15, 1996
--------------------------------
Carol H. Baldi
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Peter C. Browning Director April 15, 1996
--------------------------------
Peter C. Browning
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Richard N. Cooper Director April 15, 1996
--------------------------------
Richard N. Cooper
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Gordon J. Davis Director April 15, 1996
--------------------------------
Gordon J. Davis
<PAGE>
POWER OF ATTORNEY
I, the undersigned Chairman of the Board Directors of Phoenix Home Life
Mutual Insurance Company, hereby constitute and appoint Patricia O. McLaughlin,
Lewis A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true
and lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Robert W. Fiondella Chairman of the Board, April 15, 1996
-------------------------------- President and
Robert W. Fiondella Chief Executive Officer
Phoenix Home Life Mutual
Insurance Company
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
WITNESS my hand and seal on the date set forth below.
/s/ Jerry J. Jasinowski Director April 15, 1996
--------------------------------
Jerry J. Jasinowski
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ John W. Johnstone Director April 15, 1996
--------------------------------
John W. Johnstone
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Marilyn E. LaMarche Director April 15, 1996
--------------------------------
Marilyn E. LaMarche
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Philip R. McLoughlin Director April 15, 1996
--------------------------------
Philip R. McLoughlin
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Charles J. Paydos Director April 15, 1996
--------------------------------
Charles J. Paydos
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Herbert Roth, Jr. Director April 15, 1996
--------------------------------
Herbert Roth, Jr.
<PAGE>
POWER OF ATTORNEY
I, the undersigned Executive Vice President and Chief Financial Officer of
Phoenix Home Life Mutual Insurance Company, hereby constitute and appoint
Patricia O. McLaughlin, Lewis A. Singer, Richard J. Wirth and Dona D. Young or
any of them as my true and lawful attorneys and agents with full power to sign
for me in the capacities indicated below, any or all Registration Statements or
amendments thereto filed with the Securities and Exchange Commission under the
Securities Act of 1933 and/or the Investment Company Act of 1940 relating to the
Phoenix Home Life Variable Universal Life Account, and hereby ratify and confirm
my signature as it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ David W. Searfoss Executive Vice President April 15, 1996
-------------------------------- and Chief Financial Officer
David W. Searfoss
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Robert F. Vizza Director April 15, 1996
-------------------------------
Robert F. Vizza
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Wilson Wilde Director April 15, 1996
-------------------------------
Wilson Wilde
<PAGE>
POWER OF ATTORNEY
I, the undersigned member of the Board Directors of Phoenix Home Life Mutual
Insurance Company, hereby constitute and appoint Patricia O. McLaughlin, Lewis
A. Singer, Richard J. Wirth and Dona D. Young or any of them as my true and
lawful attorneys and agents with full power to sign for me in the capacities
indicated below, any or all Registration Statements or amendments thereto filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 relating to the Phoenix Home Life
Variable Universal Life Account, and hereby ratify and confirm my signature as
it may be signed by said attorneys and agents.
I hereby further revoke any and all powers of attorney previously given by
me with respect to said Phoenix Home Life Variable Universal Life Account,
provided that this revocation shall not affect the exercise of such prior powers
prior to the date hereof.
WITNESS my hand and seal on the date set forth below.
/s/ Robert G. Wilson Director April 15, 1996
--------------------------------
Robert G. Wilson
<PAGE>
EXHIBIT 1A(10)
FORMS OF APPLICATION FOR EACH OF FLEX EDGE,
JOINT EDGE AND FLEX EDGE SUCCESS
<PAGE>
<TABLE>
<S><C>
[PHOENIX HOME LIFE LOGO] Phoenix Home Life Mutual Insurance Company APPLICATION FOR LIFE INSURANCE
100 Bright Meadow Boulevard
P.O. Box 1900
Enfield, CT 06083-1900
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION I - PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
Print Name as it is to appear on policy (First, Middle, Last) Sex Birthdate (Month, Day, Year)
John Doe /x/ Male / /Female 3-15-60
- -----------------------------------------------------------------------------------------------------------------------------------
Birthplace (State or Country) United States Citizen Social Security Number
USA /x/ Yes / / No 000-00-0000
- -----------------------------------------------------------------------------------------------------------------------------------
Home Telephone Number Business Telephone Number (include Extension) Driver's License Number (Include State)
( 000 ) 000-0000 ( 000 ) 000-0000 ext. 000 XX0000000000
- -----------------------------------------------------------------------------------------------------------------------------------
Home Address (Include Street, Apt. Number, City, State, and Zip Code)
street address, city, state, 00000
- -----------------------------------------------------------------------------------------------------------------------------------
Give Prior Address if at address less than 2 years (Include Street, Apt. Number, City, State, and Zip Code)
- -----------------------------------------------------------------------------------------------------------------------------------
Current Occupation and Duties Employer Length of Employment
occupation Doe & Doe X years
- -----------------------------------------------------------------------------------------------------------------------------------
Business Address (Include Street, Apt. Number, City, State, and Zip Code)
street address, city, state 00000
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION II - OWNERSHIP
- -----------------------------------------------------------------------------------------------------------------------------------
/x/ A. Insured / / D. Partnership (Include Name of all Partners - if partnership
is limited, indicate which partners are general partners)
/ / B. Successive Owners OR / / Owners Jointly / / E. Sole Proprietorship (Include Name of Sole Proprietor)
/ / C. Corporation its successors or assigns / / F. Trust (Include Name and Date of Trust, Name of Trustee(s)
(Include state of incorporation) and of Grantor)
IF OWNER IS OTHER THAN PROPOSED INSURED, give Owner's name, Mailing Address, Relationship to Proposed Insured, and Social Security
Number or Tax Identification Number:
Name:
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
Address:
-------------------------------------------------------------------------------------------------------------------------
Social Security or Tax I.D. Number Relationship Date of Birth
------------------------------- ------------------------- -----------
CONTINGENT OWNER
Name: Date of Birth
-------------------------------------------------------------------------------------------------- -----------
Relationship:
----------------------------------------------------------------------------------------------------------------------
ULTIMATE OWNER, Check one. If none checked, insured will be ultimate owner.
/ / Insured / / Executor or administrator of the survivor of the primary and contingent owners
- -----------------------------------------------------------------------------------------------------------------------------------
Send premium notices to: (in addition to owner)
/x/ Proposed Insured: /x/ Home Address / / Business Address
/ / Other (Name and Address)
-------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Confirm Statements and Proxies (in addition to owner)
/ / Insured / / Other
-----------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION III - BENEFICIARY FOR THE PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
Primary Beneficiary Relationship to Proposed Insured Date of Birth (if Available) Social Security No. (if known)
Jane Doe Wife 4-20-60 000-00-0000
- -----------------------------------------------------------------------------------------------------------------------------------
Contingent Beneficiary Relationship to Proposed Insured Date of Birth (If Available) Social Security No. (if known)
John Doe, Jr son 7-10-93 000-00-0000
- -----------------------------------------------------------------------------------------------------------------------------------
Trust
/ / Trust under insured's will
/ / Inter vivos - Provide name of Trustee Date of Trust
--------------------------------------------------------------- -------------
- -----------------------------------------------------------------------------------------------------------------------------------
A beneficiary to qualify for payment must be living: (Check A or B, otherwise A will apply)
/ / A. at the Proposed Insured's death.
/ / B. on the 30th day after the date of the Proposed Insured's death
- -----------------------------------------------------------------------------------------------------------------------------------
OL2140 10-95
1 of 5
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION IV - COVERAGE APPLIED FOR
- -----------------------------------------------------------------------------------------------------------------------------------
Plan of Insurance For Proposed Insured's Ages 18 Years and Older ONLY Basic Policy Amount
WLS / / Smoker /x/ Nonsmoker / / Neversmoke $ 100,000
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION V - RIDERS AND FEATURES FOR TRADITIONAL PLANS OF INSURANCE
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Accidental Death Benefit
/x/ Disability Waiver of Premium on Insured
/ / Conditional Exchange
/ / Guaranteed Renewability Rider
/ / Purchase Protector units
----------------
/ / Family Protection
/ / Living Benefit Rider
/ / Other
-------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Additional Death Benefit Riders:
PITR $
-------------
Other Rider Name Amount $
-------------- ---------------
- -----------------------------------------------------------------------------------------------------------------------------------
/ / PAPOR (check one)
/ / A-Flexible / / B-Flexible with Option term
Number of years payable
----------------------
Intended premium payments for the first 7 years:
Year 1 Year 5
----------------- -------------------
Year 2 Year 6
----------------- -------------------
Year 3 Year 7
----------------- -------------------
Year 4 MAXIMUM AMOUNT $
----------------- ----------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Dividend Option
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Optionterm
Optionterm Death Benefit $
-------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Premium Paying Coverage / / Yes / / No OR
% of Increase
--------------------------------------------------
/ / Accumulate at Interest
/ / Paid-up Additional Insurance (PUA)
/ / One Year Term with Balanced to:
/ / Cash / / PUA / / ACCUM
/ / Reduce Premium
/ / Cash
/ / Other
----------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Automatic Premium Loan, if applicable (If none checked "Yes" will apply.)
/ / Yes / / No
- -----------------------------------------------------------------------------------------------------------------------------------
Policy Loan Interest Rate, if applicable (If none checked, "Variable" will apply.)
/ / Variable / / Fixed
- -----------------------------------------------------------------------------------------------------------------------------------
Total Insurance Face Amount (Total of all shaded areas)
$ 100.00
------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION VI - RIDERS AND FEATURES FOR VARIABLE OR UNIVERSAL PLANS OF INSURANCE
- -----------------------------------------------------------------------------------------------------------------------------------
/ / Disability Payment of a specified Annual Premium Amount.
Annual Amount $
------------------------------------------------
/ / Accidental Death Benefit
/ / Enhanced Flex Edge (Guaranteed Death Benefit)
/ / Age 70 / / Age 80 / / Age 95
/ / Other Insured Person Rider (VistaFlex ONLY)
/ / Guaranteed Insurability Option Rider (VistaFlex and UNIVISTA
ONLY) Amount $
-----------------------------------------------------
Death Benefit Option (check one): If none checked Option 1 will apply.
/ / Option 1 - Level Face Amount
/ / Option 2 - Increasing Face Amount
/ / Living Benefit Rider
/ / Purchase Protector units
---------------------------------------
/ / Other
---------------------------------------------------------
- -------------------------------------------------------------------
- -------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
First Year Anticipated, BILLED Premium (Excluding 1035 Exchange, Lump Sum Funds, etc.) Subsequent Planned Annual Premium
- -----------------------------------------------------------------------------------------------------------------------------------
Sub-Account Allocation Do Not Use Fractional Percentages. (Must total 100%)
% Growth % Total Return % GIA % Other
- ----- ----- ----- -----
% International % Balanced % Other % Other
- ----- ----- ----- -----
% Money Market % Bond % Other % Other
- ----- ----- ----- -----
TEMPORARY MONEY MARKET ALLOCATION / / Yes / / No If yes, I elect to temporarily allocate my premiums to the Money Market sub-
account until termination of the Right to Cancel period as stated in the policy. (Yes will apply to all states which require
Temporary Money Market).
- -----------------------------------------------------------------------------------------------------------------------------------
Telephone Transfers/Exchanges
/ / Yes / / No Telephone transfers/and changes in payment allocation are subject to the terms of the prospectus. If you check the
"yes" box, telephone orders will be accepted from you and your registered representative and you agree that,
because we cannot verify the authenticity of telephone instructions, we will not be liable for any loss caused by
our acting on telephone instructions, unless caused by our gross negligence.
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION VII - MODE OF PREMIUM PAYMENT
- -----------------------------------------------------------------------------------------------------------------------------------
/x/ Annual / / PCS (Phoenix Check-O-Matic Service) / / Quarterly / / Semi-Annual / / Monthly (Variable Life Insurance only)
Multiple Billing Option - Give # or Details
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
/ / List Bill / / EICS / / Salary Allotment / / Pension / / Money Purchase Pension
/ / Other
--------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
OL2140 10-95
2 of 5
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION VIII - EXISTING LIFE INSURANCE FOR THE PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
/ / YES /x/ NO With this policy, do you plan to replace (in whole or in part, now or in the future) any existing insurance or
annuity in force?
/ / YES /x/ NO Do you plan to borrow or otherwise use values from an existing insurance policy or annuity to pay an initial or
subsequent premium(s) for this policy?
For all Yes answers above, please provide the following information.
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY INSURED YEAR ISSUED POLICY NUMBER AMOUNT PERSONAL/BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
Describe all additional coverage in force for proposed insured. Include individual and group. If none, write none.
- -----------------------------------------------------------------------------------------------------------------------------------
COMPANY YEAR ISSUED POLICY NUMBER AMOUNT PERSONAL/BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
$ / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
Total Accidental Death Benefit Amount $
-------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION IX - ADDITIONAL INFORMATION REGARDING THE PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
Proposed Insured's Earned Income Independent Income Net Worth
50,000 -0- 50,000
- -----------------------------------------------------------------------------------------------------------------------------------
YES NO
/ / /x/ 1. Have you smoked any cigarettes in the past 12 months?
/ / /x/ 2. Have you used tobacco or nicotine products in any form in the past 12 months?
/x/ / / 3. Have you used tobacco or nicotine products in any form in the past 15 years?
/ / /x/ 4. Have you ever applied for life, accident, or health insurance and been declined, postponed, or been offered a policy
differing in plan, amount or premium rate from that applied for? (If "Yes", give date, company and reason).
/ / /x/ 5. Are you negotiating for other insurance? (If "Yes", name companies and total amount to be placed in force.)
/x/ / / 6. Do you intend to live or travel outside the United States or Canada? (If "Yes", state where and for how long).
/ / /x/ 7. Have you flown during the past three years as a pilot, student pilot or crew member? (If "Yes", complete Aviation
Questionnaire, form FN 7).
/ / /x/ 8. Have you participated in the past 3 years or plan to engage in any hazardous activity such as motor vehicle,
motorcycle or motorboat racing, parachute jumping, skin or scuba diving or other underwater activity, hang
gliding or other hazardous avocation? (If "Yes", complete Avocation Questionnaire).
/x/ / / 9. Have you in the past three years been the driver of a motor vehicle involved in an accident, or charged with a
moving violation of any motor vehicle law, or had your driver's license suspended or revoked?
- -----------------------------------------------------------------------------------------------------------------------------------
Give full details for all "Yes" answers.
#3 - quit smoking cigars 3 years ago; #6 - vacation travel to Europe, summer of 1996
- -----------------------------------------------------------------------------------------------------------------------------------
#9 - rear-ended, icy conditions, January 1995.
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION X - COMPLETE FOR INSURED IF TEMPORARY INSURANCE IS REQUESTED
- -----------------------------------------------------------------------------------------------------------------------------------
If either of the following questions are answered "Yes" or left blank, no agent or broker is authorized to accept money and a
Temporary Insurance Agreement MAY NOT be issued, and no coverage will take effect.
Have you:
/ / Yes /x/ No a. Within the past two years been treated for heart disease, stroke, or cancer or had such treatment recommended?
/ / Yes /x/ No b. Been advised within the past 60 days by a physician or other practitioner to have any diagnostic test or
surgery not yet performed?
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
FOR HOME OFFICE OR ADMINISTRATIVE OFFICE USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------------
Minor Correction. (No change will be made in amount, amount of premium, age at issue, class, plan or benefits unless agreed to
in writing.)
OL2140 10-95
3 of 5
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION XI - MEDICAL HISTORY OF PROPOSED INSURED (If Proposed Insured is Less Than Age 15, Questions Are To Be Answered By The
Parent)
- -----------------------------------------------------------------------------------------------------------------------------------
Height Weight Has Your Weight Decreased by 10 or More Pounds In The Past 2 Years? If "yes," how
6'3" 195 lbs much? lbs. / / Yes /x/ No
------------
- -----------------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(s) of Personal Physician(s) or Health Care Facility(s). / / None
Dr. Doctor, street address, city, state 00000
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Date and Reason for Last Consultation:
5/95 - routine yearly physical - results - OK
- -----------------------------------------------------------------------------------------------------------------------------------
Did Your Mother, Father or Any Sibling Die Prior To The Age Of 60?
/ / Yes /x/ No If "yes", give cause.
- -----------------------------------------------------------------------------------------------------------------------------------
YES NO
Have you within the past 10 years been treated for or had any indication of:
/ / /x/ 1. Heart disease, abnormal heart rhythm, heart murmur, chest pain, angina, high blood pressure, or other disorder of
the heart or blood vessels?
/ / /x/ 2. Skin disease, cancer, tumor, anemia or blood or lymph gland disorder?
/ / /x/ 3. Epilepsy, fainting spells, stroke, nervous or mental condition, paralysis or any other abnormality of the brain or
nervous system?
/ / /x/ 4. Colitis or Crohn's disease, ulcer, hepatitis, liver or digestive disorder?
/ / /x/ 5. Asthma, shortness of breath, emphysema, or other lung disorder?
/ / /x/ 6. Diabetes or elevated blood sugar, bladder, kidney or other urinary disorder?
/ / /x/ 7. Arthritis, or any other disorder of the back, spine, neck or joints?
In the past 5 years, have you:
/x/ / / 8. Had an electrocardiogram, x-ray, or blood, urine or other medical tests?
/ / /x/ 9. Been advised to have any diagnostic test, hospitalization or surgery that was not completed?
/ / /x/ 10. Other than noted above, have you in the last 5 years seen a doctor, counselor, therapist or had any
illness, injury or surgery?
/ / /x/ 11. Have you ever been diagnosed or treated by a medical professional for Acquired Immune Deficiency Syndrome (AIDS)
or AIDS Related Complex (ARC)?
/ / /x/ 12. Are you currently taking any medication, treatment, therapy or under medical observation?
/ / /x/ 13. During the past 10 years, have you used narcotics, amphetamines, cocaine or any prescription drug except in
accordance with a physician's instructions?
/ / /x/ 14. During the past 10 years, have you been advised or has treatment been recommended to limit or stop your intake of
alcohol?
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Give details to any "Yes" answers to questions. Use OL 1590 if additional space is necessary to record all details.
- -----------------------------------------------------------------------------------------------------------------------------------
QUESTION DIAGNOSIS DATE OF EACH / DURATION / CURRENT NAME AND ADDRESSES OF
NUMBER OCCURRENCE STATUS DOCTORS AND MEDICAL FACILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
8 results - normal 5/95 yearly physical same as above
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
OL2140 10-95
</TABLE>
4 of 5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$100 has been paid by John Doe to the producer named below for proposed
insurance applied for in this application. This sum is to be applied in
accordance with and subject to the terms of the Temporary Insurance Receipt
bearing the same number as this application.
I understand that i) no statement made to, or information acquired by any
producer who takes this application, shall bind the Company unless stated in
Part I and/or Part II of this application; ii) the producer has no authority to
make, modify, alter or discharge any contract hereby applied for and; iii) the
insurance applied for shall not take effect until the issuance of a contract and
payment of the issue premium due.
I have reviewed this application, and I hereby verify that all information given
here and any in Part II of this application is true and complete to the best of
my knowledge and belief, and has been fully and correctly recorded.
Under penalty of perjury, I certify that the number given is my correct social
security or taxpayer identification number and that I am not subject to backup
withholding (strike this out and initial if not true).
Any person who, with intent to defraud or knowing that he/she is facilitating a
fraud against an insurer, submits an application or files a claim containing a
false or deceptive statement is guilty of insurance fraud as determined by a
court of competent jurisdiction. This application should be carefully reviewed
by the undersigned to verify that any and all information given to the producer
taking this application has been fully and correctly entered.
The right is reserved to the Company to call for a medical examination by an
appointed medical examiner should further evidence of insurability be deemed
necessary. The producer taking this application certifies that he/she has truly
and accurately recorded on the application the information supplied by the
proposed insured(s).
THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY MAY INCREASE OR
DECREASE IN AMOUNT OR DURATION BASED ON THE INVESTMENT EXPERIENCE OF THE
UNDERLYING SUB-ACCOUNTS.
If I have purchased a Variable Life Policy, I certify that I have received the
prospectus for that policy and its underlying funds.
- --------------------------------------------------------------------------------
AUTHORIZATION REQUEST FOR INTERVIEW
/ / I do / / I do not (check one only) require that I be interviewed in
connection with any investigative consumer report that may be prepared.
AUTHORIZATION TO OBTAIN INSURANCE (NONMEDICAL) INFORMATION
I hereby authorize any insurance company to which I have applied for or inquired
about insurance coverage or benefits to give to the Phoenix Home Life Mutual
Insurance Company or its reinsurers any information relating to or obtained in
connection with such application or inquiry including the dollar amounts and
status of any policies or claims.
AUTHORIZATION TO OBTAIN HEALTH CARE (MEDICAL) INFORMATION
I hereby authorize any physician, hospital, clinic or other health care provider
or any persons who have health care information about me, including insurance
companies and MIB, Inc., to give that information to the Phoenix Home Life
Mutual Insurance Company. If the record contains information relating to alcohol
or drug abuse or mental health care, enough of this information is also to be
released to accomplish the purposes for which the information is requested. This
information may be used only for the purpose of risk evaluation, the
administration of claims and implementation of policy provisions and for
insurance statistical studies.
Phoenix Home Life may then redisclose it to other persons, including MIB, Inc.;
legal representatives, medical consultants, reinsurance companies and consumer
reporting agencies, only to the extent required to perform their services for
the Company (MIB information is not disclosed to consumer reporting agencies).
They may disclose certain information to a person or organization for use in
risk evaluation, administration of claims or implementation of policy
provisions. Phoenix Home Life may also be required to provide certain
information to a state insurance or health department. The information may also
be redisclosed as otherwise required or permitted by law, but no information
will be given, sold or transferred to any other person not mentioned in this
authorization.
This authorization or a true photocopy thereof shall continue to be valid for 30
months from the date signed below unless otherwise required by law. It may be
revoked in writing to the company at any time until the insurance coverage has
been placed in force. I may receive a copy of it on request.
I acknowledge that I have received a copy of the Pre-Notification to applicants
regarding the Medical Information Bureau, Investigative Consumer Reports and the
Underwriting Process.
- --------------------------------------------------------------------------------
Insured Parent (for minor insured)
X /s/ John Doe
- --------------------------------------------------------------------------------
Owner (if other than proposed insured) Witness Date
10/9/95
- --------------------------------------------------------------------------------
Signed At
X USA
- --------------------------------------------------------------------------------
The Producer hereby certifies that the Applicant signed this application in
his/her presence; that he/she has truly and accurately recorded on the
application the information supplied by the proposed insured(s); and that he/she
is qualified and authorized to discuss the contract herein applied for.
WILL THE APPLICANT UTILIZE VALUES FROM ANOTHER INSURANCE POLICY (THROUGH LOANS,
SURRENDERS OR OTHERWISE) TO PAY FOR THE INITIAL OR SUBSEQUENT PREMIUM(S) FOR THE
POLICY APPLIED FOR? / / YES / / NO
- --------------------------------------------------------------------------------
Producer's Signature Date Producer I.D. Number
X /s/ A. Producer 10/9/95 XXXXX
- --------------------------------------------------------------------------------
Broker/Dealer Name and Address Broker/Dealer Number
- --------------------------------------------------------------------------------
OL2140 10-95
5 of 5
<PAGE>
<TABLE>
<S><C>
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE PLEASE MAKE CHECK PAYABLE TO PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
UNIVERSAL LIFE INSURANCE PART 1, SEND CHECK AND APPLICATION TO:
TO THE PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY VARIABLE AND UNIVERSAL LIFE ADMINISTRATION
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
P.O. BOX 810
GREENFIELD, MA 01302-0810
- -----------------------------------------------------------------------------------------------------------------------------------
Main Administrative Office Use Only CASE NUMBER POLICY NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
1. Full Name of Proposed Insured (First, Middle Initial, Last) PLEASE PRINT 2. Date of Birth 3. Sex 4. Social Sec. No.
(Mo., Day, Yr.) / / Male
/ / Female
- -----------------------------------------------------------------------------------------------------------------------------------
5. Place of Birth (City and State or Country) 6. / / Single / / Widowed / / Separated 7. U.S. Citizen? / / Yes / / No
/ / Married / / Divorced (If "No", Country)
- -----------------------------------------------------------------------------------------------------------------------------------
8. Residence (No., Street, City, State, Zip Code) Yrs. Home Phone # Former Residence (Last 2 yrs.)
- -----------------------------------------------------------------------------------------------------------------------------------
9. Business Address Yrs. Business Phone # Nature of Business Occupation and Duties Performed
(No., Street, City, State, Zip Code)
- -----------------------------------------------------------------------------------------------------------------------------------
10. Employer's Name 11. Plan 12. Face Amount
- -----------------------------------------------------------------------------------------------------------------------------------
13. Issue Premium 14. Subsequent Premiums (Describe if not level) 15. Premium Mode
/ / Annual / / Quarterly
/ / Semi-Annual / / Monthly Check-O-Matic
- -----------------------------------------------------------------------------------------------------------------------------------
16. Are you applying for Non-Smoker Rates? 17 Riders & Features (if available)
/ / Yes / / No
(if "yes", complete Supplement to Application OL 348)
- -----------------------------------------------------------------------------------------------------------------------------------
18. Owner During Lifetime of Insured (Check one; if none checked (A) will apply) 19. Address of Owner if Other Than Insured
/ / A. Insured
/ / B. Other For B: Social Security No.
--------------------------------------------
(IF AN INDIVIDUAL, STATE RELATIONSHIP TO INSURED)
- -----------------------------------------------------------------------------------------------------------------------------------
20. Premium Notices/Confirmation Notices
/ / A. Insured / / B. Owner / / C.
-------------------------------------------------------------------------------------------
(NAME AND ADDRESS)
- -----------------------------------------------------------------------------------------------------------------------------------
21. Primary Beneficiary (Name) Address Social Security No. Relationship
- -----------------------------------------------------------------------------------------------------------------------------------
Contingent Beneficiary (Name) Address Social Security No. Relationship
- -----------------------------------------------------------------------------------------------------------------------------------
22. Sub-account Allocation. Do not use fractional percentages.
MONTHLY
PREMIUMS DEDUCTIONS
/ / Money Market Sub-account ____________% Designate sub-accounts from which monthly
/ / Stock Sub-account ____________% / / deductions will be taken. If no designation is
/ / Bond Sub-account ____________% / / made the sub-accounts to which premiums are
/ / Total-Vest Sub-account ____________% / / allocated will be the designated sub-accounts.
/ / Guaranteed Interest Account ____________% / / If the sub-accounts designated for monthly
____________% / / deductions are insufficient, deductions will be
TOTAL 100% taken from all available sub-accounts. All
deductions are taken pro-rata based on value.
- -----------------------------------------------------------------------------------------------------------------------------------
Please check (CHECK MARK) appropriate box. Yes No
- -----------------------------------------------------------------------------------------------------------------------------------
23. Temporary Money Market Allocation Amendment - I authorize that any purchase payment amounts to be temporarily
applied entirely to the Money Market sub-account until termination of the Right to Cancel period provided in
the policy and then automatically reallocated to the above designated sub-account(s) if by the end of the
Right to Cancel period the policy has not been returned to the Company's Variable and Universal Life
Administration Division for a refund. / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
24. Suitability
A. Did you receive copies of the prospectuses for both the policy and The Big Edge Series Fund? / / / /
B. Do you understand that:
-- the death benefit may increase or decrease based on the investment experience of the underlying
sub-accounts? / / / /
-- the cash value may increase or decrease based on the investment experience of the underlying
sub-accounts? / / / /
-- the duration of coverage may increase or decrease based on the investment experience of the underlying
sub-accounts? / / / /
C. Do you believe that the policy will meet your insurance needs and financial objectives? / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
OL 1320 8-88 Continued on Reverse Side
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
Yes No
- -----------------------------------------------------------------------------------------------------------------------------------
25. Is this insurance intended to replace (in whole or in part) any existing insurance or annuity in this or any other / / / /
company, or do you intend to borrow from existing contracts to pay this premium? (If "yes" state company, amount,
reason and full details in No. 31)
- -----------------------------------------------------------------------------------------------------------------------------------
26. Do you or any other proposed insured plan to travel or reside outside the U.S.A.? (If "yes" state where and for
how long in No. 31) / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
27. A. Have you flown during the past three years as a student pilot, pilot, crew member, or with any other duties
aboard any aircraft in flight? / / / /
B. Do you contemplate making any flights other than as a passenger on a commercial airline? / / / /
(If either 27A or 27B answered "yes", complete Aviation Supplement FN7.)
- -----------------------------------------------------------------------------------------------------------------------------------
28. Have you ever applied to any company for life, accident, or health insurance and been declined, postponed or been
offered a policy differing in plan, amount or premium rate from that applied for? (If "yes", state reason, date and
company in No. 31.) / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
29. A. In the past three years have you or any other proposed insured participated in motor vehicle, motorcycle or
motorboat racing, parachute jumping, skin or scuba diving, or other underwater activity, or hang gliding or is
such activity contemplated? (if "yes", give dates and details in No. 31.) / / / /
B. Are you a member of or do you contemplate joining any branch of the armed forces? (if "yes", give details in
No. 31.) / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
30. Have you in the past 3 years been the driver of a motor vehicle involved in an accident, or charged with a moving
violation of any motor vehicle law, or had your driver's license suspended or revoked? (If "Yes", give date,
circumstances, location, other details and driver's license number in No. 31.) / / / /
- -----------------------------------------------------------------------------------------------------------------------------------
31. Details of "Yes" Answers and Remarks
- -----------------------------------------------------------------------------------------------------------------------------------
32. FOR MAIN ADMINISTRATIVE OFFICE USE ONLY - Minor Corrections (No change will be made in amount, amount of premium, age at issue,
class, plan or benefits unless agreed to in writing.)
- -----------------------------------------------------------------------------------------------------------------------------------
Any policy issued hereunder in the state of Missouri or Oklahoma shall be considered a Missouri or Oklahoma contract respectively
and its terms, including those concerning the receiving of information by the agent, shall be construed in accordance with the laws
of the state of Missouri or Oklahoma respectively.
- -----------------------------------------------------------------------------------------------------------------------------------
APPLICANT'S SIGNATURE AND CERTIFICATION
On the date of this application, the undersigned applicant paid to the agent named hereunder $_________ for proposed insurance
applied for in this application. This sum is to be applied in accordance with the terms of the Temporary Insurance Receipt given
in conjunction with this application.
I declare that the statements made in this Part I and any Part II of this application are full, complete and true to the best of my
knowledge and belief. No statement made to, or information acquired by any representative of the Company shall bind the Company
unless stated in Part I including any Part II of this application; that the agent taking this application has no authority to make,
modify, alter or discharge any contract hereby applied for; that the insurance applied for shall not take effect until the issuance
of a contract and the payment of the issue premium due; and that the Company reserves the right to call for a medical examination by
an appointed medical examiner should further evidence of insurability be deemed necessary.
Under penalty of perjury, I certify (1) that the number shown on this form is my correct taxpayer identification number and (2) that
I am not subject to backup withholding either because 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 the IRS has notified me that I am no
longer subject to backup withholding. If you have been notified by the IRS that you are currently subject to a backup withholding
strike out phrase (2) above and initial the deletion.
THE DEATH BENEFIT AND CASH VALUES UNDER THE POLICY MAY INCREASE OR DECREASE IN AMOUNT OR DURATION BASED ON THE INVESTMENT EXPERIENCE
OF THE UNDERLYING SUB-ACCOUNTS.
- -----------------------------------------------------------------------------------------------------------------------------------
Signed At Date
- -----------------------------------------------------------------------------------------------------------------------------------
Signature of Witness-Agent Signature of Proposed Insured
- -----------------------------------------------------------------------------------------------------------------------------------
Witness Signature of Applicant
- -----------------------------------------------------------------------------------------------------------------------------------
AGENT'S STATEMENT Yes No
Is this insurance intended to replace (in whole or in part) any existing insurance or annuity in this or any
other company? / / / /
Is this replacement meant to be a tax-free exchange under Section 1035? / / / /
If "Yes", give particulars below.
The Agent hereby certifies that the Applicant signed this application in his/her presence; that he/she has truly and accurately
recorded on the application the information supplied by the proposed insured; and that he/she is qualified and authorized to discuss
the contract herein applied for.
- -----------------------------------------------------------------------------------------------------------------------------------
AGENT'S SIGNATURE DATE
- -----------------------------------------------------------------------------------------------------------------------------------
AGENT/BROKER NAME AND I.D. NO. (Please Print) AGENCY/BROKER DEALER NAME & ADDRESS AGENT BROKER PHONE NO.
( )
- -----------------------------------------------------------------------------------------------------------------------------------
INSURANCE AGENCY NAME AND ADDRESS (IF OTHER THAN ABOVE) BRANCH OFFICE NAME AND ADDRESS
- -----------------------------------------------------------------------------------------------------------------------------------
<PAGE>
PHOENIX HOME LIFE LIFE INSURANCE APPLICATION PART I TO THE
MUTUAL INSURANCE COMPANY PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
- -----------------------------------------------------------------------------------------------------------------------------------
FOR MULTI-LIFE PLANS ONLY: When this application is used for a Multi-life Plan such as SLP or JLP, the term "insured" and all
relationships shown shall be read to refer to the first insured, except as otherwise specifically noted as in Application supplement
Sections 6 and 7 which refer to the second insured.
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 1 - PROPOSED INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
1. FULL NAME OF PROPOSED INSURED (First, Middle, Last) 2. SEX 3. DATE OF BIRTH (Mo., Day, Year)
/ / Male / / Female
- -----------------------------------------------------------------------------------------------------------------------------------
4. PLACE OF BIRTH (City and State or Country) 5. SOCIAL SECURITY NUMBER 6. UNITED STATES CITIZEN
/ / Yes / / No
- -----------------------------------------------------------------------------------------------------------------------------------
7. MARITAL STATUS 8. TELEPHONE NUMBER(S)
/ / Single / / Married / / Widowed / / Divorced / / Separated Home: ( ) Business: ( )
- -----------------------------------------------------------------------------------------------------------------------------------
9. PROPOSED INSURED'S RESIDENCE ADDRESS (Apt. #, No., Street, City, State, Zip Code) 10. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
11. EMPLOYER OR FIRM (If employed) 12. NATURE OF BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------------
13. PROPOSED INSURED'S BUSINESS ADDRESS (No., Street, City, State, Zip Code) 14. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
15. PROPOSED INSURED'S OCCUPATION AND DUTIES INVOLVED
- -----------------------------------------------------------------------------------------------------------------------------------
16. DO YOU PLAN ANY CHANGE IN OCCUPATION OR DO YOU HAVE ANY OTHER OCCUPATION?
/ / Yes / / No If "Yes", explain
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 2 - OWNER
- -----------------------------------------------------------------------------------------------------------------------------------
PLEASE CHECK ONE (If none checked, A will apply)
/ / A. Insured / / D. Partnership (complete Section H below and include names of all
/ / B. Successive owners while living in sequence partners - if partnership is limited, indicate which partners are
(complete Section G below) general partners)
/ / C. Corporation, its successors or assigns / / E. Sole Proprietorship (complete Section H below and include
(complete Section H below and include state name of sole proprietor)
of incorporation)
/ / F. Trust (complete Section H below and include name and date of
trust, name of trustee(s) and of grantor)
- -----------------------------------------------------------------------------------------------------------------------------------
G. PRIMARY OWNER (complete 1, J, K below) RELATIONSHIP
SUCCESSIVE
OWNERS ----------------------------------------------------------------------------------------------------------------------
CONTINGENT OWNER RELATIONSHIP
----------------------------------------------------------------------------------------------------------------------
ULTIMATE OWNER (Check one. If none checked, insured will be ultimate owner.)
/ / Insured / / Executor or administrator of the survivor of the primary and contingent owners
- -----------------------------------------------------------------------------------------------------------------------------------
H. (complete I, J, K below)
AUTHORIZED
NAME
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
I. ADDRESS (No., Street, City, State, Zip Code) J. OWNER'S SOC. SEC. NO. OR TAX I.D. NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
K. IF SOMEONE IN ADDITION TO THE OWNER SHOULD RECEIVE PREMIUM NOTICES, GIVE NAME AND ADDRESS
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 3 - BENEFICIARY
- -----------------------------------------------------------------------------------------------------------------------------------
/ / A. Same as Owner
- -----------------------------------------------------------------------------------------------------------------------------------
PRIMARY BENEFICIARY RELATIONSHIP TO INSURED SOCIAL SECURITY NUMBER
/ / B. ----------------------------------------------------------------------------------------------------------------------------
CONTINGENT BENEFICIARY RELATIONSHIP TO INSURED SOCIAL SECURITY NUMBER
----------------------------------------------------------------------------------------------------------------------------
TRUST DATE OF TRUST
/ / C. / / Trust under insured's will
/ / Inter vivos - Provide name of trustee
-------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
ADDRESS OF BENEFICIARY (No., Street, City, State, Zip Code)
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 1 of 6
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 4 - PLAN INFORMATION
- -----------------------------------------------------------------------------------------------------------------------------------
TRADITIONAL PLANS OF INSURANCE
- -----------------------------------------------------------------------------------------------------------------------------------
1. PLAN OF INSURANCE (CHECK ONE): 2. BASIC FACE AMOUNT
/ / MLP / / GLP / / SLP
/ / TLP / / PLP / / JLP
/ / EEA / / LP at age ____ / / Other ____________
- -----------------------------------------------------------------------------------------------------------------------------------
3. DIVIDEND OPTION (CHECK ONE): 4. OPTIONTERM AMOUNT
/ / Paid Up Additions / / Cash / / Optionterm (if checked,
/ / Reduce Premium / / Accumulate note amount in # 4)
/ / One Year Term with the balance to (check one):
/ / Cash / / Paid up Additions / / Reduce Premiums
- -----------------------------------------------------------------------------------------------------------------------------------
Add the Basic Face Amount and the Optionterm Amount (if selected) and enter 5. TOTAL INITIAL DEATH BENEFIT
the total in # 5.
- -----------------------------------------------------------------------------------------------------------------------------------
6. PREMIUM MODE (CHECK ONE):
/ / Annual / / Quarterly / / Discount Salary Allotment
/ / Semi-annual / / Phoenix Check-o-matic / / Monthly Corporate Pay
/ / Monthly E.I.C.S. # ______________________ / / List Bill # __________________________ (prem. mode ______________________)
- -----------------------------------------------------------------------------------------------------------------------------------
7. RIDERS AND FEATURES:
/ / Accidental Death Benefit _______________ / /PAPOR (check one)
/ / Disability Waiver of Premium / /A-Flexible / / B-Flexible with Optionterm
/ / Acceleration Number of years payable ___________
/ / Conditional Exchange Option (SLP only) Intended premium payments for the first 7 years:
/ / 4 Year Term (SLP only) Year 1 ____________ Year 5 _______________
/ / Survivor Insurability Purchase Option Year 2 ____________ Year 6 _______________
(JLP only) Year 3 ____________ Year 7 _______________
___________ units Year 4 ____________
/ / Purchase Protector ______ units Maximum Amount $ _______________
/ / Family Protection _______ units
/ / Children's Protection _____ units
/ / Other ______________________________
(For proposed insureds ages 18 and older) I am applying for: / / Smoker Class / / Nonsmoker Class / / Neversmoked Class
Automatic Premium Loan will be effective if applicable unless checked here. / /
Cost of Living Rider will be effective if applicable unless checked here. / /
Policy Loan Interest Rate will be variable unless otherwise specified here. / / Fixed
- -----------------------------------------------------------------------------------------------------------------------------------
UNIVERSAL LIFE PLANS
- -----------------------------------------------------------------------------------------------------------------------------------
8. / / FLEX 80
- -----------------------------------------------------------------------------------------------------------------------------------
9. FIRST PREMIUM (INCLUDING EXCESS PREMIUM) 10. SUBSEQUENT ANNUAL PREMIUM 11. BASIC FACE AMOUNT
$ $
- -----------------------------------------------------------------------------------------------------------------------------------
12. PREMIUM MODE (CHECK ONE):
/ / Annual / / Semi-annual / / Quarterly / / Phoenix Check-o-matic
- -----------------------------------------------------------------------------------------------------------------------------------
13. DEATH BENEFIT OPTION (CHECK ONE):
/ / Option # 1 - Level Face Amount / / Option # 2 - Increasing Face Amount
- -----------------------------------------------------------------------------------------------------------------------------------
14. RIDERS AND FEATURES:
/ / Accidental Death Benefit / / Disability Payment of A Specified Annual Premium Amount
/ / Other ___________________ Annual Amount $ __________________
(For proposed insureds ages 18 and older) I am applying for: / / Smoker Class / / Nonsmoker Class / / Neversmoked Class
Note that all dividends shall be paid in cash.
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 2 of 6
</TABLE>
<PAGE>
<TABLE>
<C> <S>
- ----------------------------------------------------------------------------------------------------------------------------------
15. __ ESTATE BUILDER LIFE (EBL)
- ----------------------------------------------------------------------------------------------------------------------------------
16. PREMIUM MODE (CHECK ONE): 17. BASIC FACE AMOUNT
__ Annual __ Semi-annual __ Quarterly __Phoenix Check-o-matic
- -----------------------------------------------------------------------------------------------------------------------------------
18. RIDERS AND FEATURES:
__ Accidental Death Benefit __ Waiver of Premium
__ Automatic Premium Loan __ Other
(For proposed insureds ages 18 and older) I am applying for: __ Smoker Class __ Nonsmoker Class __ Neversmoked Class
- -----------------------------------------------------------------------------------------------------------------------------------
19. DIVIDEND OPTION (CHECK ONE): __ Cash __ Accumulation __ Paid up Additions __ Reduce Premium
- -----------------------------------------------------------------------------------------------------------------------------------
20. __ EVP (ONLY FOR STATES WHERE INDIVIDUAL CONTRACT FORM HAS BEEN APPROVED)
- -----------------------------------------------------------------------------------------------------------------------------------
21. ANNUAL PREMIUM 22. BASIC FACE AMOUNT
$
- -----------------------------------------------------------------------------------------------------------------------------------
23. PREMIUM MODE (CHECK ONE):
__ Annual __ Semi-annual __ Quarterly __ Phoenix Check-o-matic __ List Bill # ____________ (prem. mode ____________)
- -----------------------------------------------------------------------------------------------------------------------------------
24. DEATH BENEFIT OPTION (CHECK ONE): __ Option # 1 - Level Face Amount __ Option # 2 - Increasing Face Amount
- -----------------------------------------------------------------------------------------------------------------------------------
25. RIDERS AND FEATURES:
__ Disability Payment of A Specified Annual Premium Amount
Annual Amount $_____________ __ Other _________________________
(For proposed insureds age 18 and older) I am applying for __ Smoker Class __ Nonsmoker Class __ Neversmoked Class
Note that all dividends shall be paid in cash.
- -----------------------------------------------------------------------------------------------------------------------------------
VARIABLE LIFE PLANS
- -----------------------------------------------------------------------------------------------------------------------------------
26. __ FLEX EDGE
- -----------------------------------------------------------------------------------------------------------------------------------
27. PREMIUM SUBMITTED WITH APPLICATION 28. SUBSEQUENT PLANNED ANNUAL PREMIUM 29. BASIC FACE AMOUNT
$ $
- -----------------------------------------------------------------------------------------------------------------------------------
30. PREMIUM MODE (CHECK ONE): __ Annual __ Quarterly __ Semi-annual __ Phoenix Check-o-matic
- -----------------------------------------------------------------------------------------------------------------------------------
31. DEATH BENEFIT OPTION (CHECK ONE): __ Option # 1 - Level Face Amount __ Option # 2 - Increasing Face Amount
- -----------------------------------------------------------------------------------------------------------------------------------
32. RIDERS AND FEATURES:
__ Accidental Death Benefit __ Disability Waiver of Premium
__ Other _____________________ Amount to be waived $____________________
(For proposed insureds ages 18 and older) I am applying for: __ Smoker Class __ Nonsmoker Class __ Neversmoked Class
- -----------------------------------------------------------------------------------------------------------------------------------
33. SUB-ACCOUNT ALLOCATION (USE WHOLE PERCENTS ONLY): MONTHLY DEDUCTIONS*
__ Money Market _____________________% __ * Designate sub-accounts from which monthly
deductions will be taken. If no designation is
__ Stock _____________________% __ made, the sub-accounts to which premiums
are allocated will be designated sub-accounts.
__ Bond _____________________% __ If the sub-accounts designated for monthly
deductions are insufficient, deductions will be
__ Total Vest _____________________% __ taken from all available sub-accounts. All
deductions are taken pro-rata based on value.
__ International _____________________% __
__ Guaranteed Interest _____________________% __
__ Other _____________________% __
Total 100%
- -----------------------------------------------------------------------------------------------------------------------------------
34. TEMPORARY MONEY MARKET ALLOCATION:
__ Yes __ No I elect to temporarily allocate my premiums to the variable insurance Money Market Sub-Account until termination of
the Right to Cancel period as stated in the policy.
- -----------------------------------------------------------------------------------------------------------------------------------
35. SUITABILITY:
YES NO
__ __ A. Did you receive copies of the applicable prospectus(es)?
__ __ B. Do you understand that for variable insurance: the death benefit cash value and duration of coverage may
increase or decrease based on the investment experience of the underlying sub-accounts?
__ __ C. Do you believe that the insurance selected will meet your financial objectives?
- -----------------------------------------------------------------------------------------------------------------------------------
36. TELEPHONE TRANSFERS/EXCHANGES:
__Yes __ No Telephone transfers/exchanges are subject to the terms of the prospectus. If you check the "yes" box, telephone
orders will be accepted from you and your registered representative and you agree that, because we cannot verify
the authenticity of telephone instructions, we will not be liable for any loss caused by our acting on telephone
instructions, unless caused by our negligence.
- -----------------------------------------------------------------------------------------------------------------------------------
37. CONFIRM STATEMENTS AND PROXIES TO: __ Owner __ Insured __ Other _______________________________________________________________
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 3 Of 6
</TABLE>
<PAGE>
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<C> <S>
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 5 - SLP SUPPLEMENT (TO BE COMPLETED ONLY IF APPLYING FOR SLP PRODUCT PAYABLE ON SECOND DEATH)
- -----------------------------------------------------------------------------------------------------------------------------------
SECOND PROPOSED INSURED (ALSO COMPLETE INSURABILITY SECTION FOR SECOND PROPOSED INSURED)
- -----------------------------------------------------------------------------------------------------------------------------------
1. FULL NAME OF PROPOSED INSURED (First, Middle, Last) 2. SEX 3. DATE OF BIRTH (Mo., Day, Year)
__ Male __ Female
- -----------------------------------------------------------------------------------------------------------------------------------
4. PLACE OF BIRTH (City and State or Country) 5. SOCIAL SECURITY NUMBER 6. UNITED STATES CITIZEN
__ Yes __ No
- -----------------------------------------------------------------------------------------------------------------------------------
7. MARITAL STATUS 8. TELEPHONE NUMBER(S)
__ Single __ Married __ Widowed __ Divorced __ Separated Home: ( ) Business: ( )
- -----------------------------------------------------------------------------------------------------------------------------------
9. PROPOSED INSURED'S RESIDENCE ADDRESS (Apt. #, No., Street, City, State, Zip Code) 10. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
11. EMPLOYER OR FIRM (If employed) 12. NATURE OF BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------------
13. PROPOSED INSURED'S BUSINESS ADDRESS (No., Street, City, State, Zip Code) 14. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
15. PROPOSED INSURED'S OCCUPATION AND DUTIES INVOLVED
- -----------------------------------------------------------------------------------------------------------------------------------
16. DO YOU PLAN ANY CHANGE IN OCCUPATION OR DO YOU HAVE ANY OTHER OCCUPATION?
__ Yes __ No If "Yes", explain
- -----------------------------------------------------------------------------------------------------------------------------------
17. (FOR PROPOSED INSUREDS AGES 18 AND OLDER) I AM APPLYING FOR: 18.
__ Smoker Class __ Nonsmoker Class __ Neversmoked Class Waiver of premium will not apply unless checked here. __
- -----------------------------------------------------------------------------------------------------------------------------------
19. OTHER RIDERS OR FEATURES, IF AVAILABLE
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 6 - JLP SUPPLEMENT (TO BE COMPLETED ONLY IF APPLYING FOR JLP PRODUCT PAYABLE ON FIRST DEATH)
- -----------------------------------------------------------------------------------------------------------------------------------
SECOND PROPOSED INSURED (ALSO COMPLETE INSURABILITY SECTION FOR SECOND PROPOSED INSURED)
- -----------------------------------------------------------------------------------------------------------------------------------
1. FULL NAME OF PROPOSED INSURED (First, Middle, Last) 2. SEX 3. DATE OF BIRTH (Mo., Day, Year)
__ Male __ Female
- -----------------------------------------------------------------------------------------------------------------------------------
4. PLACE OF BIRTH (City and State or Country) 5. SOCIAL SECURITY NUMBER 6. UNITED STATES CITIZEN
__ Yes __ No
- -----------------------------------------------------------------------------------------------------------------------------------
7. MARITAL STATUS 8. TELEPHONE NUMBER(S)
__ Single __ Married __ Widowed __ Divorced __ Separated Home: ( ) Business: ( )
- -----------------------------------------------------------------------------------------------------------------------------------
9. PROPOSED INSURED'S RESIDENCE ADDRESS (Apt.#, No., Street, City, State, Zip Code) 10. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
11. EMPLOYER OR FIRM (if employed) 12. NATURE OF BUSINESS
- -----------------------------------------------------------------------------------------------------------------------------------
13. PROPOSED INSURED'S BUSINESS ADDRESS (No., Street, City, State, Zip Code) 14. NUMBER OF YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
15. PROPOSED INSURED'S OCCUPATION AND DUTIES INVOLVED
- -----------------------------------------------------------------------------------------------------------------------------------
16. DO YOU PLAN ANY CHANGE IN OCCUPATION OR DO YOU HAVE ANY OTHER OCCUPATION?
__ Yes __ No If "Yes", explain
- -----------------------------------------------------------------------------------------------------------------------------------
17. (FOR PROPOSED INSUREDS AGES 18 AND OLDER) I AM APPLYING FOR: 18.
__ Smoker Class __ Nonsmoker Class __ Neversmoked Class Waiver of premium will not apply unless checked here. __
- -----------------------------------------------------------------------------------------------------------------------------------
19. OTHER RIDERS OR FEATURES, IF AVAILABLE
- -----------------------------------------------------------------------------------------------------------------------------------
A. BASIC FACE AMOUNT
20. Basic Face Amount (Carry over amount from first
proposed insured)
- -----------------------------------------------------------------------------------------------------------------------------------
B. OPTIONTERM AMOUNT
If Optionterm is selected as dividend method, enter amount for
second proposed insured here:
- -----------------------------------------------------------------------------------------------------------------------------------
C. TOTAL INITIAL DEATH BENEFIT
Add the Basic Face Amount and the Optionterm Amount (if
selected) and enter the total in 20C.
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 4 of 6
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 7 - INSURABILITY INFORMATION (ATTACH ADDITIONAL SHEET IF NEEDED)
- -----------------------------------------------------------------------------------------------------------------------------------
FIRST INSURED SECOND INSURED (MULTI-LIFE PLANS ONLY)
- -----------------------------------------------------------------------------------------------------------------------------------
1. TOTAL LIFE INSURANCE IN FORCE (if none, so indicate) 13. TOTAL LIFE INSURANCE IN FORCE (if none, so indicate)
$ __ None $ __ None
- -----------------------------------------------------------------------------------------------------------------------------------
2. TOTAL AMOUNT OF ACCIDENTAL DEATH BENEFIT (ADB) IN FORCE 14. TOTAL AMOUNT OF ACCIDENTAL DEATH BENEFIT (ADB) IN FORCE
(if none, so indicate) (if none, so indicate)
$ __ None $ __ None
- -----------------------------------------------------------------------------------------------------------------------------------
YEAR YEAR
3. NAME OF COMPANY PURCHASED AMOUNT 15. NAME OF COMPANY PURCHASED AMOUNT
- -----------------------------------------------------------------------------------------------------------------------------------
P
E $ $
- -----------------------------------------------------------------------------------------------------------------------------------
R
S $ $
- -----------------------------------------------------------------------------------------------------------------------------------
O
N $ $
- -----------------------------------------------------------------------------------------------------------------------------------
A
L $ $
- -----------------------------------------------------------------------------------------------------------------------------------
B
U $ $
- -----------------------------------------------------------------------------------------------------------------------------------
S
I $ $
- -----------------------------------------------------------------------------------------------------------------------------------
N
E $ $
- -----------------------------------------------------------------------------------------------------------------------------------
S
S $ $
- -----------------------------------------------------------------------------------------------------------------------------------
FIRST INSURED PROVIDE DETAILS OF ALL "YES" ANSWERS TO QUESTIONS IN # 25. SECOND INSURED
- -----------------------------------------------------------------------------------------------------------------------------------
YES NO YES NO
4. __ __ Do you now smoke cigarettes or have you smoked cigarettes anytime in the past 12 months? 16. __ __
5. __ __ Have you used tobacco at anytime during the last 15 years? 17. __ __
6. __ __ Do you plan to replace (in whole or in part) (now or in the future)) any existing insurance or 18. __ __
annuity in force on your life, or do you plan to borrow from an existing contract to pay this
premium? (If "Yes", provide full details of planned replacement or purchase below).
7. __ __ Do you or any other proposed insured plan any foreign residence or travel? (If "Yes", state where 19. __ __
and for how long).
8. __ __ Have you flown during the past three years as a pilot, student pilot or crew member? (If "Yes", 20. __ __
complete Aviation Questionnaire, form FN 7).
9. __ __ Have you ever applied for life, accident, or health insurance and been declined, postponed, or 21. __ __
been offered a policy differing in plan, amount or premium rate from that applied for? (If "Yes",
give date, company and reason).
10. __ __ Are you negotiating for other insurance? (If "Yes", name companies and total amount to be placed 22. __ __
in force.)
11. __ __ Have you or any other proposed insured participated in the past 3 years or plan to engage in any 23. __ __
hazardous activity such as motor vehicle, motorcycle or motorboat racing, parachute jumping, skin
or scuba diving or other underwater activity, hang gliding or other hazardous avocation? (If "Yes",
complete Avocation Questionnaire, form OL 1064).
12. __ __ Have you in the past three years been the driver of a motor vehicle involved in an accident, or 24. __ __
charged with a moving violation of any motor vehicle law, or had your driver's license suspended
or revoked? (If "Yes", give dates, full details and driver's license number).
- -----------------------------------------------------------------------------------------------------------------------------------
25. DETAILS AND REMARKS. PLEASE PROVIDE QUESTION NUMBERS.
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 5 of 6
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<PAGE>
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SECTION 8 - CERTIFICATION AND SIGNATURES
- -----------------------------------------------------------------------------------------------------------------------------------
NEVERSMOKED CLASSIFICATION
- -----------------------------------------------------------------------------------------------------------------------------------
I understand that the issuance of a Traditional Plan of Insurance as noted in section #4 on a neversmoked risk classification
basis does not guarantee me enhanced policy benefits beyond those that are guaranteed to persons only applying for non-smoker
class under section # 4 (and # 5 or # 6 if applicable). The neversmoked classification would simply classify me as eligible for
enhanced dividends based on the company's current dividend scale which is not guaranteed to continue into the future. I
further understand that a change in the dividend scale may result in a decrease in benefits or an increase in required cash
net-premium outlay beyond such amounts shown to me in sales illustrations presented at the time of sale.
- -----------------------------------------------------------------------------------------------------------------------------------
FOR H.O. OR ADMIN. OFFICE USE ONLY
- -----------------------------------------------------------------------------------------------------------------------------------
Minor Corrections. (No change will be made in amount, amount of premium, age at issue, class, plan or benefits unless agreed to in
writing.)
- -----------------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS
- -----------------------------------------------------------------------------------------------------------------------------------
Any insurance policy issued hereunder in the state of Missouri or Oklahoma shall be considered a Missouri or Oklahoma
contract, respectively, and its terms, including those concerning the receiving of information by the agent, shall be construed
in accordance with the laws of the state of Missouri or Oklahoma, respectively.
- -----------------------------------------------------------------------------------------------------------------------------------
$__________ has been paid by _________________________________ to the agent named below for proposed insurance applied for in this
application. This sum is to be applied in accordance with and subject to the terms of the Temporary Insurance Receipt bearing the
same number as this application.
I understand that i) no statement made to, or information acquired by any agent who takes this application, shall bind the
Company unless stated in Part I and Part II of this application; ii) the agent has no authority to make, modify, alter or
discharge any contract hereby applied for and; iii) the insurance applied for shall not take effect until the issuance of a
contract and payment of the issue premium due.
I have read the prospectus(es) for the investment choices I have made.
I have reviewed this application, and I hereby verify that all information given here and any in Part II of this application is
true and complete to the best of my knowledge and belief, and has been fully and correctly recorded.
Under penalty of perjury, I certify that the number given is my correct social security or taxpayer identification number and that
I am not subject to backup withholding (strike this out and initial if not true).
Any person who, with intent to defraud or knowing that he/she is facilitating a fraud against an insurer, submits an application
or files a claim containing a false or deceptive statement is guilty of insurance fraud. This application should be carefully
reviewed by the undersigned to verify that any and all information given to the agent taking this application has been fully
and correctly entered.
The right is reserved to the Company to call for a medical examination by an appointed medical examiner should further
evidence of insurability be deemed necessary. The agent taking this application certifies that he/she has truly and
accurately recorded on the application the information supplied by the proposed insured(s).
THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY APPLIED FOR MAY INCREASE OR DECREASE IN AMOUNT OR
DURATION BASED ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNED AT WITNESS DATE
- -----------------------------------------------------------------------------------------------------------------------------------
FIRST INSURED (both insureds must sign if a multiple life plan is being applied for) SECOND INSURED (if any)
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNED AT WITNESS DATE
- -----------------------------------------------------------------------------------------------------------------------------------
PURCHASER (if other than proposed insured)
- -----------------------------------------------------------------------------------------------------------------------------------
Is this insurance intended to replace (in whole or in part) any existing insurance or annuity in this or any other __ Yes __ No
company?
The Agent hereby certifies that the Applicant signed this application in his/her presence; that he/she has truly and accurately
recorded on the application the information supplied by the proposed insured(s); and that he/she is qualified and authorized to
discuss the contract herein applied for.
- -----------------------------------------------------------------------------------------------------------------------------------
AGENT'S SIGNATURE DATE AGENT/BROKER I.D. NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
AGENT/BROKER NAME (please print full name) TELEPHONE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
BROKER DEALER NAME & ADDRESS BROKER/DEALER NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
INSURANCE AGENCY NAME AND ADDRESS (if other than above) BRANCH OFFICE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
BRANCH OFFICE NAME AND ADDRESS BRANCH OFFICE TELEPHONE NUMBER
- -----------------------------------------------------------------------------------------------------------------------------------
OL 415 6-91 6 of 6
</TABLE>
<PAGE>
[LOGO] PHOENIX HOME LIFE OTHER INSURED SUPPLEMENT
<TABLE>
<C> <S>
- ----------------------------------------------------------------------------------------------------------------------------------
TO BE COMPLETED ONLY IF APPLYING FOR MULTILIFE PRODUCT
- ----------------------------------------------------------------------------------------------------------------------------------
1. FULL NAME OF PROPOSED INSURED (First, Middle, Last) 2. SEX 3. DATE OF BIRTH (Mo., Day, Year)
Robert J. Client /X/ Male / / Female 4-15-49
- ----------------------------------------------------------------------------------------------------------------------------------
4. PLACE OF BIRTH (City and State or Country) S. SOCIAL SECURITY NUMBER 6. UNITED STATES CITIZEN
Sometown, CA /X/ Yes / / No
- ----------------------------------------------------------------------------------------------------------------------------------
7. PROPOSED INSURED'S RESIDENCE ADDRESS (Apt. #, No., Street, City, State, Zip Code) 8. NUMBER OF YEARS
1000 Main Street, Hartford, CT 06115 20
- ----------------------------------------------------------------------------------------------------------------------------------
9. TELEPHONE NUMBER(S)
Home: (203) 275-5000 Business: (203) 275-6000
- ----------------------------------------------------------------------------------------------------------------------------------
10. EMPLOYER OR FIRM (If employed) 12. NUMBER OF YEARS
Phoenix Home Life Mutual Insurance Company 20
- ----------------------------------------------------------------------------------------------------------------------------------
11. PROPOSED INSURED'S BUSINESS ADDRESS (No., Street, City, State, Zip Code)
One American Row, Hartford, CT 06115
- ----------------------------------------------------------------------------------------------------------------------------------
13. PROPOSED INSURED'S OCCUPATION AND DUTIES INVOLVED
Insurance Agent - Sells Insurance
- ----------------------------------------------------------------------------------------------------------------------------------
INSURABILITY INFORMATION (ATTACH ADDITIONAL SHEET IF NEEDED)
- ----------------------------------------------------------------------------------------------------------------------------------
14. TOTAL LIFE INSURANCE INFORCE (if none, so indicate) 15. TOTAL AMOUNT OF ACCIDENTAL DEATH BENEFIT (ADB) (if none, so indicate)
$ 1,000,000 / / None $ /X/ None
- ----------------------------------------------------------------------------------------------------------------------------------
NAME OF COMPANY YEAR PUR- AMOUNT NAME OF COMPANY YEAR PUR- AMOUNT
CHASED CHASED
- ----------------------------------------------------------------------------------------------------------------------------------
Phoenix Home Life 1991 $1,000,000 $
------------------------------------------------ ---------------------------------------------------------------
$ $
PERSONAL ------------------------------------------------ BUSINESS ---------------------------------------------------------------
$ $
- ----------------------------------------------------------------------------------------------------------------------------------
PROVIDE DETAILS OF ALL "YES" ANSWERS TO QUESTIONS IN # 25. INSURED
- ----------------------------------------------------------------------------------------------------------------------------------
YES NO
Do you now smoke cigarettes or have you smoked cigarettes anytime in the past 12 months? 16. / / /X/
Have you used tobacco at anytime during the last 15 years? 17. / / /X/
Do you plan to replace {(in whole or in part) (now or in the future)} any existing insurance or annuity in force 18. / / /X/
on your life, or do you plan to borrow from an existing contract to pay this
premium? (If "Yes", provide full details of planned replacement or purchase below).
Do you plan any foreign residence or travel? (If "Yes", state where and for how long). 19. / / /X/
Have you flown during the past three years as a pilot, student pilot or crew member (If "Yes", complete 20. / / /X/
Aviation Questionnaire, form FN 7).
Have you ever applied for life, accident, or health insurance and been declined, postponed, or been offered a 21. / / /X/
policy differing in plan, amount or premium rate from that applied for? (If "Yes", give date, company and reason).
Are you negotiating for other insurance? (If "Yes", name companies and total amount to be placed in force.) 22. / / /X/
Have you participated in the past 3 years or plan to engage in any hazardous activity such as motor vehicle, 23. / / /X/
motorcycle or motorboat racing; parachute jumping; skin or scuba diving or other underwater activity; hang
gliding or other hazardous avocation? (If "Yes", complete Avocation Questionnaire, form OL 1064).
Have you in the past three years been the driver of a motor vehicle involved in an accident or charged with a 24. / / /X/
moving violation of any motor vehicle law, or had your driver's license suspended or revoked? (if "Yes", give
dates, full details and driver's license number).
- ----------------------------------------------------------------------------------------------------------------------------------
25. Details and remarks. Please provide question numbers.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
THE FOREGOING STATEMENTS ARE FULL, COMPLETE AND TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF AND I AGREE THAT THEY SHALL FORM A
PART OF MY APPLICATION FOR INSURANCE.
- ----------------------------------------------------------------------------------------------------------------------------------
SIGNED AT WITNESS DATE
Phoenix Home Life Mutual Insurance Company Arthur Marshall 3-30-93
- ----------------------------------------------------------------------------------------------------------------------------------
INSURED
X
- ----------------------------------------------------------------------------------------------------------------------------------
OL 1797 3-93
</TABLE>
<PAGE>
<TABLE>
<C> <S>
- ----------------------------------------------------------------------------------------------------------------------------------
10. Sub-Account Allocation (use whole percents only) MONTHLY DEDUCTIONS*
/X/ Money Market ____________50____________ % __ * Designate sub-accounts from which monthly
__ Growth __________________________ % __ deductions will be taken. If no designation is
__ Bond __________________________ % __ made, the sub-accounts to which premiums
__ Total Return __________________________ % __ are allocated will be designated sub-accounts.
__ International __________________________ % __ If the sub-accounts designated for monthly
__ Guaranteed Interest __________________________ % __ deductions are insufficient, deductions will be
/X/ Balanced ____________50____________ % __ taken from all available sub-accounts. All
__ Other __________________________ % __ deductions are taken pro-rata based on value.
Total 100%
- ----------------------------------------------------------------------------------------------------------------------------------
11. Temporary Money Market Allocation:
/X/ Yes __ No I/We elect to temporarily allocate my premiums to the variable insurance Money Market Sub-Account until termination
of the Right to Cancel period as stated in the policy.
- ----------------------------------------------------------------------------------------------------------------------------------
12. Suitability:
YES NO
/X/ __ A. Did you receive copies of the applicable prospectus(es)?
/X/ __ B. Do you understand that for variable insurance: the death benefit cash value and duration of coverage may
increase or decrease based on the investment experience of the underlying sub-accounts?
/X/ __ C. Do you believe that the insurance selected will meet your financial objectives?
- ----------------------------------------------------------------------------------------------------------------------------------
13. Telephone Transfers/Exchanges(not available in New York):
/X/ Yes __ No Telephone transfers and changes in payment allocation are subject to the terms of the Prospectus. If you check the
"yes" box, telephone orders will be accepted from you and your registered representative and you agree that,
because we cannot verify the authenticity of telephone instructions, we will not be liable for any loss caused by
our acting on telephone instructions, unless caused by our gross negligence.
- ----------------------------------------------------------------------------------------------------------------------------------
14. Dollar Cost Averaging:
a. Investment Amount $___________________ ($2,000 Minimum)
b. Select one deposit Sub-account
__ Money Market __ Guaranteed Interest Account* __ Balanced __ Growth
__ Total Return __ Bond __ International
c. Indicate Frequency of Transfer __ Monthly __ Quarterly __ Semi-Annual __ Annual
d. Select the Sub-accounts that will receive Transfers
Transfer Amount Transfer Amount
____________________________________ $______________ ____________________________________ $______________
____________________________________ $______________ ____________________________________ $______________
* Some restrictions may apply
- ----------------------------------------------------------------------------------------------------------------------------------
15. Confirm Statements and Proxies to: /X/ Owner __ Other ______________________________________________________________________
- ----------------------------------------------------------------------------------------------------------------------------------
__ I/We have read the prospectus(es) for the investment choices I/We have made.
I/WE HAVE REVIEWED THIS PART I SUPPLEMENT, THE BASIC APPLICATION AND ANY PART II TO WHICH THIS SUPPLEMENT APPLIES, AND
VERIFY THAT ALL INFORMATION GIVEN HERE AND IN SUCH BASIC APPLICATION AND ANY PART II HAS BEEN FULLY AND CORRECTLY RECORDED.
THE DEATH BENEFIT AND CASH VALUES UNDER ANY VARIABLE POLICY APPLIED FOR MAY INCREASE OR DECREASE IN
AMOUNT OR DURATION BASED ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS
- ----------------------------------------------------------------------------------------------------------------------------------
Signed at Witness Date
Phoenix Home Life Mutual Insurance Company Arthur Marshall 3/30/93
- ----------------------------------------------------------------------------------------------------------------------------------
Insured Date Insured Date
x X
- ----------------------------------------------------------------------------------------------------------------------------------
Insured Date Insured Date
x X
- ----------------------------------------------------------------------------------------------------------------------------------
Insured Date Insured Date
x X
- ----------------------------------------------------------------------------------------------------------------------------------
Insured Date Insured Date
x X
- ----------------------------------------------------------------------------------------------------------------------------------
Purchaser (if other than Proposed Insureds) Date
X
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<C> <S>
[LOGO] PHOENIX HOME LIFE MULTIPLE JOINT VARIABLE LIFE PART I SUPPLEMENT
- ----------------------------------------------------------------------------------------------------------------------------------
1. Basic Face Amount: 1,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
2. Full Name of Proposed Insured (First, Middle, Last) 3. Term Insurance Rider Amount 4. Total Insurance Amount
John Q. Phoenix 1,000,000 2,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Robert J. Client -0- 1,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Mary A. Customer 500,000 1,500,000
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
5. Premium Submitted with Application 6. Subsequent Planned Annual Premium
$ 5,000.00 $ 5,000.00
- ----------------------------------------------------------------------------------------------------------------------------------
7. Premium Mode:
Annual
- ----------------------------------------------------------------------------------------------------------------------------------
8. Death Benefit Option:
Option A
- ----------------------------------------------------------------------------------------------------------------------------------
9. Riders and Features:
John Q. Phoenix - Disability Waiver; Term Insurance Rider to Age 95
Robert J. Client - Disability Waiver
Mary A. Customer - Term Insurance Rider
- ----------------------------------------------------------------------------------------------------------------------------------
OL 1796 3-93 Continued on Reverse Side
</TABLE>
<PAGE>
EXHIBIT 7
CONSENT OF JORDEN BURT BERENSON & JOHNSON LLP
<PAGE>
JORDEN BURT BERENSON & JOHNSON LLP
1025 Thomas Jefferson Street, N.W.
Suite 400 East
Washington, DC 20007-0805
(202) 965-8100
Telecopier (202) 965-8104
April 19, 1996
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06102
Ladies and Gentlemen:
We hereby consent to the use of our name under the caption "Legal Matters"
in the Prospectus contained in Post-Effective Amendment No. 13 to the
Registration Statement on Form S-6 (Registration No. 33-23251) filed by Phoenix
Home Life Mutual Insurance Company and Phoenix Home Life Variable Universal Life
Account with the Securities and Exchange Commission under the Securities Act of
1933, as amended.
Very truly yours,
/s/ Jorden Burt Berenson & Johnson LLP
JORDEN BURT BERENSON & JOHNSON LLP
<PAGE>
EXHIBIT 8
CONSENT OF INDEPENDENT ACCOUNTANTS
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 13 to the registration statement on Form S-6 (the
"Registration Statement") of our reports dated February 13, 1996 and February
14, 1996, relating to the financial statements of Phoenix Home Life Variable
Universal Life Account and the financial statements of Phoenix Home Life Mutual
Insurance Company, respectively, which appear in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
April 17, 1996
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Post-Effective Amendment No. 13 to the registration statement on Form S-6 (the
"Registration Statement") of our reports dated February 13, 1996 and February
14, 1996, relating to the financial statements of Phoenix Home Life Variable
Universal Life Account and the financial statements of Phoenix Home Life Mutual
Insurance Company, respectively, which appear in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Hartford, Connecticut
April 17, 1996
<PAGE>
EXHIBIT 9
CONSENT OF RICHARD J. WIRTH
<PAGE>
April 24, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: REGISTRATION STATEMENT NO. 33-23251
Dear Sirs:
As Counsel to the depositor, we are familiar with the flexible premium
variable life insurance policies (the "Policies") which are the subject of the
above-captioned Registration Statement on Form S-6.
In connection with this opinion, we have reviewed the Policies, the
Registration Statement, the Charter and By-Laws of the Company, relevant
proceedings of the Board of Directors, and the provisions of New York insurance
law relevant to the issuance of the Policies.
Based upon this review, we are of the opinion that each of the Policies,
when issued, will have been validly issued, and will constitute a legal and
binding obligation of Phoenix Home Life Mutual Insurance Company.
We further consent to the use of this opinion as an exhibit to the
above-captioned Registration Statement and to my being named under "Legal
Matters" therein.
Very truly yours,
/s/ Richard J. Wirth
Richard J. Wirth, Counsel
Phoenix Home Life
Mutual Insurance Company
<PAGE>
EXHIBIT 10
CONSENT OF M. SPENCER HAMILTON
<PAGE>
April 22, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Gentlemen:
This opinion is furnished in connection with the registration of flexible
premium variable life insurance policies ("Policies") under the Securities Act
of 1933. The prospectuses included in the Registration Statement on Form S-6
(SEC File No. 33-23251) describe the Policies. The forms of Policies were
prepared under my direction, and I am familiar with the Registration Statement
and Exhibits thereto.
In my opinion, the illustrations of death benefits and cash values included
in the section entitled "Illustrations of Death Benefits, Policy Values
("Account Values"), and Cash Surrender Values" in Appendix B of the
prospectuses, based on the assumptions stated in the illustrations, are
consistent with the provisions of the respective forms of the Policies.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ M. Spencer Hamilton
M. Spencer Hamilton
Associate Actuary
<PAGE>
