[FRONT COVER]
[LOGO] Phoenix Home Life
Flex Edge Success(SM)
Flex Edge
Joint Edge(R)
Semi-Annual Reports for:
Phoenix Home Life Variable
Universal Life Account
Phoenix Edge Series Fund
June 30, 1996
<PAGE>
[LOGO] Phoenix Home Life
[POSTAGE]
BULK RATE
U.S. Postage
PAID
Permit No. 444
Springfield, MA
Phoenix Home Life Mutual Insurance Company
101 Munson Street
P.O. Box 942
Greenfield, Massachusetts 01302-0942
OL 1320J (8/96)
[RECYCLE LOGO] Printed on Recycled Paper.
(C) 1996 Phoenix Home Life Mutual Insurance Company
<PAGE>
TABLE OF CONTENTS
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
Money Market Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Growth Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Multi-Sector Fixed Income Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Total Return Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
International Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Balanced Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Real Estate Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Strategic Theme Sub-Account
Statement of Assets and Liabilities ... 2
Statement of Operations ............... 3
Statement of Changes in Net Assets .... 4
Financial Highlights .................. 6
Notes to Financial Statements ........... 7
THE PHOENIX EDGE SERIES FUND
Money Market Series
Schedule of Investments ............. 2-2
Statement of Assets and Liabilities... 2-4
Statement of Operations ............. 2-4
Statement of Changes in Net Assets ... 2-5
Financial Highlights ................ 2-5
Growth Series
Schedule of Investments ............. 2-6
Statement of Assets and Liabilities... 2-9
Statement of Operations ............. 2-9
Statement of Changes in Net Assets ... 2-10
Financial Highlights ................ 2-10
Multi-Sector Fixed Income Series
Schedule of Investments ............. 2-11
Statement of Assets and Liabilities .. 2-14
Statement of Operations ............. 2-14
Statement of Changes in Net Assets ... 2-15
Financial Highlights ................ 2-15
Total Return Series
Schedule of Investments ............. 2-17
Statement of Assets and Liabilities .. 2-20
Statement of Operations ............. 2-20
Statement of Changes in Net Assets ... 2-21
Financial Highlights ................ 2-21
International Series
Schedule of Investments ............. 2-22
Statement of Assets and Liabilities .. 2-25
Statement of Operations ............. 2-25
Statement of Changes in Net Assets ... 2-26
Financial Highlights ................ 2-26
Balanced Series
Schedule of Investments ............. 2-28
Statement of Assets and Liabilities .. 2-31
Statement of Operations ............. 2-31
Statement of Changes in Net Assets ... 2-32
Financial Highlights .................. 2-32
Real Estate Series
Schedule of Investments ............. 2-33
Statement of Assets and Liabilities .. 2-35
Statement of Operations ............. 2-35
Statement of Changes in Net Assets ... 2-36
Financial Highlights ................ 2-36
Strategic Theme
Schedule of Investments ............. 2-38
Statement of Assets and Liabilities .. 2-40
Statement of Operations ............. 2-40
Statement of Changes in Net Assets ... 2-41
Financial Highlights ................ 2-41
Notes to Financial Statements ......... 2-42
<PAGE>
This semi-annual report for the Phoenix
Home Life Variable Universal Life Account
for the period ended June 30, 1996,
contains the financial statements for the
Account's variable universal life policies. This
report also contains a list of portfolio holdings,
management's discussion of performance and
investment strategy and financial statements
for each of the mutual funds that comprise the
Phoenix Edge Series Fund.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ------------ ------------
<S> <C> <C> <C>
Assets
Investments at cost $12,917,694 $131,441,422 $7,938,516
========== =========== ===========
Investment in The Phoenix Edge Series Fund, at market $12,917,694 $145,777,017 $8,191,117
---------- ----------- -----------
Total assets 12,917,694 145,777,017 8,191,117
Liabilities
Accrued expenses to related party 7,616 87,473 4,952
---------- ----------- -----------
Net assets $12,910,078 $145,689,544 $8,186,165
========== =========== ===========
Accumulation units outstanding--Flex Edge and Flex Edge Success 9,197,302 42,477,955 4,149,081
========== =========== ===========
Accumulation units outstanding--Joint Edge 347,150 1,486,059 122,073
========== =========== ===========
Unit value $ 1.352626 $ 3.313836 $ 1.916617
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ------------ ------------
<S> <C> <C> <C>
Assets
Investments at cost $22,395,473 $23,776,277 $13,629,182
========== =========== ===========
Investment in The Phoenix Edge Series Fund, at market $23,292,092 $28,008,700 $14,629,235
---------- ----------- -----------
Total assets 23,292,092 28,008,700 14,629,235
Liabilities
Accrued expenses to related party 14,085 16,715 8,879
---------- ----------- -----------
Net assets $23,278,007 $27,991,985 $14,620,356
========== =========== ===========
Accumulation units outstanding--Flex Edge and Flex Edge Success 10,181,667 17,207,146 9,843,968
========== =========== ===========
Accumulation units outstanding--Joint Edge 247,647 725,855 455,105
========== =========== ===========
Unit value $ 2.231979 $ 1.560920 $ 1.419580
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Strategic
Real Estate Theme
Sub-Account Sub-Account
----------- -------------
<S> <C> <C>
Assets
Investments at cost $ 40,540 $ 494,429
========== ============
Investment in The Phoenix Edge Series Fund, at market $ 40,633 $ 480,884
---------- ------------
Total assets 40,633 480,884
Liabilities
Accrued expenses to related party 18 237
---------- ------------
Net assets $ 40,615 $ 480,647
========== ============
Accumulation units outstanding--Flex Edge and Flex Edge Success 38,811 455,590
========== ============
Accumulation units outstanding--Joint Edge -- 27,782
========== ============
Unit value $1.046490 $0.994363
========== ============
</TABLE>
See Notes to Financial Statements
2
<PAGE>
STATEMENT OF OPERATIONS
For the period ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Money Multi-Sector
Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
----------- ----------- ------------
<S> <C> <C> <C>
Investment income
Distributions $302,306 $ 570,739 $303,384
Expenses
Mortality and expense risk charges 49,435 524,306 30,546
---------- ---------- -----------
Net investment income 252,871 46,433 272,838
---------- ---------- -----------
Net realized loss from share transactions (15) (4,917) (3,772)
Net realized gain distribution from Fund -- 954,306 --
Net unrealized appreciation (depreciation) on
investment -- 6,563,641 (95,049)
---------- ---------- -----------
Net gain (loss) on investments (15) 7,513,030 (98,821)
---------- ---------- -----------
Net increase in net assets resulting from operations $252,856 $7,559,463 $174,017
========== ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Total
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ------------ ------------
<S> <C> <C> <C>
Investment income
Distributions $282,638 $ -- $ 206,958
Expenses
Mortality and expense risk charges 86,397 97,074 55,780
---------- ----------- -----------
Net investment income (loss) 196,241 (97,074) 151,178
---------- ----------- -----------
Net realized gain (loss) from share transactions 3,212 53 (5,598)
Net realized gain distribution from Fund 123,798 35,055 522,387
Net unrealized appreciation (depreciation) on
investment 534,934 3,002,177 (300,223)
---------- ----------- -----------
Net gain on investments 661,944 3,037,285 216,566
---------- ----------- -----------
Net increase in net assets resulting from operations $858,185 $2,940,211 $ 367,744
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account(1) Sub-Account(2)
------------ ------------
<S> <C> <C>
Investment income
Distributions $ 554 $ --
Expenses
Mortality and expense risk charges 19 287
----------- -----------
Net investment income (loss) 535 (287)
----------- -----------
Net realized gain (loss) from share transactions (6) 1
Net unrealized appreciation (depreciation) on investment 93 (13,545)
----------- -----------
Net gain (loss) on investments 87 (13,544)
----------- -----------
Net increase (decrease) in net assets resulting from
operations $622 $(13,831)
=========== ===========
</TABLE>
(1) From inception May 1, 1996 to June 30, 1996
(2) From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
3
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the period ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
Sub-Account Sub-Account Sub-Account
------------ ------------ ------------
<S> <C> <C> <C>
From operations
Net investment income $ 252,871 $ 46,433 $ 272,838
Net realized gain (loss) (15) 949,389 (3,772)
Net unrealized appreciation (depreciation) -- 6,563,641 (95,049)
----------- ----------- -----------
Net increase in net assets resulting from operations 252,856 7,559,463 174,017
----------- ----------- -----------
From accumulation unit transactions
Participant deposits 10,777,544 22,352,475 1,197,325
Participant transfers (10,183,628) 6,875,855 584,984
Participant withdrawals (1,888,235) (9,047,629) (470,936)
----------- ----------- -----------
Net increase (decrease) in net assets resulting from
participant transactions (1,294,319) 20,180,701 1,311,373
----------- ----------- -----------
Net increase (decrease) in net assets (1,041,463) 27,740,164 1,485,390
Net assets
Beginning of period 13,951,541 117,949,380 6,700,775
----------- ----------- -----------
End of period $ 12,910,078 $145,689,544 $8,186,165
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Money
Market
Total Fixed Income
Return International Balanced
Sub-Account Sub-Account Sub-Account
----------- ------------ ------------
<S> <C> <C> <C>
From operations
Net investment income (loss) $ 196,241 $ (97,074) $ 151,178
Net realized gain 127,010 35,108 516,789
Net unrealized appreciation (depreciation) 534,934 3,002,177 (300,223)
---------- ----------- -----------
Net increase in net assets resulting from operations 858,185 2,940,211 367,744
---------- ----------- -----------
From accumulation unit transactions
Participant deposits 3,028,783 3,847,167 1,838,251
Participant transfers 625,622 2,030,594 (353,512)
Participant withdrawals (1,483,862) (1,573,160) (948,602)
---------- ----------- -----------
Net increase in net assets resulting from participant
transactions 2,170,543 4,304,601 536,137
---------- ----------- -----------
Net increase in net assets 3,028,728 7,244,812 903,881
Net assets
Beginning of period 20,249,279 20,747,173 13,716,475
---------- ----------- -----------
End of period $ 23,278,007 $27,991,985 $14,620,356
========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Strategic
Real Estate Theme
Sub-Account Sub-Account
(1) (2)
------------ ------------
<S> <C> <C>
From operations
Net investment income (loss) $ 535 $ (287)
Net realized gain (loss) (6) 1
Net unrealized appreciation (depreciation) 93 (13,545)
----------- -----------
Net increase (decrease) in net assets resulting from operations 622 (13,831)
----------- -----------
From accumulation unit transactions
Participant deposits 1,452 46,025
Participant transfers 41,132 456,093
Participant withdrawals (2,591) (7,640)
----------- -----------
Net increase in net assets resulting form participant
transactions 39,993 494,478
----------- -----------
Net increase in net assets 40,615 480,647
Net assets
Beginning of period 0 0
----------- -----------
End of period $40,615 $480,647
=========== ===========
</TABLE>
(1) From inception May 1, 1996 to June 30, 1996
(2) From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
4
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
Multi-Sector
Money Market Growth Fixed Income
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>
Money
Market
Total Fixed Income
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 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>
See Notes to Financial Statements
5
<PAGE>
FINANCIAL HIGHLIGHTS
(Selected data for a unit outstanding throughout the indicated period)
(Unaudited)
<TABLE>
<CAPTION>
Money Market
Sub-Account Growth Sub-Account
---------------------- ----------------------
For the period ended For the period ended
6/30/96 12/31/95 6/30/96 12/31/95
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.325408 $1.263974 $3.132626 $2.412541
Income from investment operations
Net investment income 0.027220 0.061434 0.001113 0.008952
Net realized and unrealized gain
(loss) (0.000002) -- 0.180097 0.711133
--------- -------- -------- ---------
Total from investment operations 0.027218 0.061434 0.181210 0.720085
--------- -------- -------- ---------
Unit value, end of period $ 1.352626 $1.325408 $3.313836 $3.132626
========= ======== ======== =========
Total return 2.05%(1) 4.86% 5.78%(1) 29.85%
Net assets, end of period (000) $ 12,910 $ 13,952 $ 145,690 $ 117,949
</TABLE>
<TABLE>
<CAPTION>
Multi-Sector Fixed Total Return
Income Sub-Account Sub-Account
---------------------- ----------------------
For the period ended For the period ended
6/30/96 12/31/95 6/30/96 12/31/95
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.871769 $1.527250 $2.147078 $1.830914
Income from investment operations
Net investment income 0.070316 0.133714 0.019414 0.053247
Net realized and unrealized gain (loss) (0.025468) 0.210805 0.065487 0.262917
--------- -------- -------- ---------
Total from investment operations 0.044848 0.344519 0.084901 0.316164
--------- -------- -------- ---------
Unit value, end of period $ 1.916617 $1.871769 $2.231979 $2.147078
========= ======== ======== =========
Total return 2.40%(1) 22.56% 3.95%(1) 17.27%
Net assets, end of period (000) $ 8,186 $ 6,701 $ 23,278 $ 20,249
</TABLE>
<TABLE>
<CAPTION>
International
Sub-Account Balanced Sub-Account
----------------------- ----------------------
For the period ended For the period ended
6/30/96 12/31/95 6/30/96 12/31/95
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Unit value, beginning of period $ 1.384037 $ 1.273020 $1.382412 $1.129669
Income from investment operations
Net investment income (loss) (0.005840) (0.005393) 0.015280 0.034768
Net realized and unrealized gain 0.182723 0.116410 0.021888 0.217975
--------- --------- -------- ---------
Total from investment operations 0.176883 0.111017 0.037168 0.252743
--------- --------- -------- ---------
Unit value, end of period $ 1.560920 $ 1.384037 $1.419580 $1.382412
========= ========= ======== =========
Total return 12.78%(1) 8.72% 2.69%(1) 22.37%
Net assets, end of period (000) $ 27,992 $ 20,747 $ 14,620 $ 13,716
</TABLE>
<TABLE>
<CAPTION>
Real Estate Strategic Theme
Sub-Account (2) Sub-Account(3)
---------------------- ---------------------------
For the period ended For the period ended
6/30/96 6/30/96
---------------------- ---------------------------
<S> <C> <C>
Unit value, beginning of period $1.000000 $ 1.000000
Income from investment operations
Net investment income (loss) 0.039987 (0.000117)
Net realized and unrealized gain (loss) 0.006503 (0.005520)
--------------------- --------------------------
Total from investment operations 0.046490 (0.005637)
--------------------- --------------------------
Unit value, end of period $1.046490 $ 0.994363
===================== ==========================
Total return 4.65% (1) -0.56% (1)
Net assets, end of period (000) $ 41 $ 481
</TABLE>
(1) Unannualized
(2) From inception May 1, 1996 to June 30, 1996
(3) From inception January 29, 1996 to June 30, 1996
See Notes to Financial Statements
6
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
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). The Account is offered as Flex Edge and Flex Edge Success 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 eight Sub-accounts, which invest in eight of the
available portfolios of The Phoenix Edge Series Fund (the Fund).
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 Multi-Sector Fixed Income Series (formerly Bond) 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. The Real Estate Series invests in marketable
securities of publicly traded real estate investment trusts ("REITs") and
companies that are principally engaged in the real estate industry and the
Strategic Theme Series invests in securities of companies believed to benefit
from specific trends. Policy holders may also direct the allocation of their
investments between the account and the Guaranteed Interest Account of the
general account of Phoenix.
Note 2--Significant Accounting Policies
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 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 period ended June 30, 1996
aggregated the following:
Sub-Account Purchases Sales
------------------------- ---------- -----------
Money Market $ 6,157,047 $7,198,798
Growth 23,550,499 2,354,271
Multi-Sector Fixed Income 2,159,442 574,626
Total Return 3,402,353 910,305
International 4,868,599 622,024
Balanced 2,618,099 1,408,059
Real Estate 43,390 2,844
Strategic Theme 494,914 486
Note 4--Participant Accumulation Unit Transactions (in units):
<TABLE>
<CAPTION>
Sub-Account
----------------------------------------------------------------------------------------------------------
Money Multi-Sector Total Strategic
Market Growth Fixed Income Return International Balanced Real Estate Theme
----------- ----------- ------------ --------- ------------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Flex Edge and Flex Edge
Success:
Participant deposits 7,594,871 6,563,994 612,925 1,321,980 2,463,448 1,238,506 1,403 37,609
Participant transfers (7,520,036) 2,162,659 296,176 295,226 1,338,848 (256,153) 39,957 424,092
Participant withdrawals (1,107,484) (2,787,322) (244,472) (671,885) (1,030,362) (659,941) (2,549) (6,111)
Joint Edge:
Participant deposits 712,559 390,410 24,006 59,587 162,922 79,175 0 6,009
Participant transfers (595,295) 171,564 12,238 21,497 75,978 9,296 0 22,749
Participant withdrawals (66,383) (189,208) (9,635) (28,179) (68,159) (33,938) 0 (976)
</TABLE>
Note 5--Policy Loans:
Transfers are made to Phoenix's general account as a result of policy
loans. Policy provisions allow policy 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'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%, except for Flex Edge Success policies which are credited 2%.
Loan repayments result in a transfer of collateral back to the Account.
7
<PAGE>
PHOENIX HOME LIFE VARIABLE UNIVERSAL LIFE ACCOUNT
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited) (Continued)
Note 6--Investment Advisory Fees and Related Party Transactions:
Phoenix and its indirect, majority 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 $8,992,979 during the period ended June 30, 1996.
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. Partial surrender fees paid during the
period ended June 30, 1996 were $918,873.
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.
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 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 charges the Account an annual rate of 0.80% of the average daily net
assets of the Account for mortality and expense risks assumed. For Flex Edge
Success the Account is charged an annual rate of 0.80% for the first fifteen
years, then 0.25%.
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 believes that the Account satisfies the current
requirements of the regulations, and it intends that the Account will
continue to meet such requirements.
8
<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
BROWN BROTHERS HARRIMAN & CO.
(International Series)
40 Water Street
Boston, Massachusetts 02109
STATE STREET BANK AND TRUST
(Real Estate Series)
P.O. Box 351
Boston, Massachusetts, 02101
