<PAGE> 1
Filed Pursuant to Rule 497(a)
Registration No. 333-53477
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
ISSUED BY
GENERAL AMERICAN LIFE INSURANCE COMPANY
700 Market Street St. Louis, MO 63101 (314) 231-1700
This Prospectus describes an individual flexible premium variable life
insurance Policy ("the Policy") offered by General American Life Insurance
Company ("General American" or "the Company"). The Policy is designed to
provide lifetime insurance protection and at the same time provide maximum
flexibility to vary premium payments and change the level of death benefits
payable under the Policy. This flexibility allows an Owner to provide for
changing insurance needs under a single insurance policy. An Owner also has
the opportunity to allocate Net Premiums among several investment portfolios
with different investment objectives.
The Policy provides for: (1) a Cash Surrender Value that can be obtained by
surrendering the Policy; (2) Policy Loans; and (3) a death benefit payable at
the Insured's death. As long as a Policy remains in force before the
Insured's Attained Age 100, the death benefit will not be less than the
current Face Amount of the Policy. A Policy will remain in force so long as
its Cash Surrender Value is sufficient to pay certain monthly charges imposed
in connection with the Policy.
After the end of the "Right to Examine Policy" period, Net Premiums may be
allocated to one or more of the Divisions of General American Separate
Account Eleven ("the Separate Account") or in certain contracts to General
American's General Account. If Net Premiums are allocated to the Separate
Account, the amount of the Cash Value will vary to reflect the investment
performance of the investment Divisions selected by the Owner, the Policy may
lapse, and, depending on the death benefit option elected, the amount of the
death benefit above the minimum may also vary with that investment
performance. The Owner bears the entire investment risk for all amounts
allocated to the Separate Account; there is no minimum guaranteed Cash Value.
Divisions of the Separate Account invest in corresponding Funds from the
following open-end, diversified management investment companies: General
American Capital Company, Russell Insurance Funds, American Century Variable
Portfolios, J.P. Morgan Series Trust II, Variable Insurance Products Fund,
Variable Insurance Products Fund II, and Van Eck Worldwide Insurance Trust.
Funds offered from General American Capital Company include the S & P 500
Index Fund, the Money Market Fund, the Bond Index Fund, the Managed Equity
Fund, the Asset Allocation Fund, the International Index Fund, the Mid-Cap
Equity Fund, and the Small-Cap Equity Fund. Funds offered from Russell
Insurance Funds include the Multi-Style Equity Fund, the Aggressive Equity
Fund, the Non-U.S. Fund, and the Core Bond Fund. Funds offered from
American Century Variable Portfolios include the Income & Growth Fund, the
International Fund, and the Value Fund. Funds offered from J.P. Morgan
Series Trust II include the Bond Portfolio and the Small Company Portfolio.
Funds offered from Variable Insurance Products Fund include the Equity-Income
Portfolio, the Growth Portfolio, the High Income Portfolio, and the Overseas
Portfolio. The Fund offered from Variable Insurance Products Fund II is the
Asset Manager Portfolio. The Funds offered from Van Eck Worldwide Insurance
Trust are the Worldwide Hard Assets Fund and the Worldwide Emerging Markets
Fund. A full description of the Funds, including the investment policies,
restrictions, risks, and charges is contained in the Prospectus of each Fund.
It may not be advantageous to purchase a Policy as a replacement for another
type of life insurance or as a means to obtain additional insurance
protection if the purchaser already owns another flexible premium variable
life insurance policy.
This Prospectus must be accompanied by current Prospectuses for each Fund.
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.
Please read this Prospectus carefully and retain it for future reference.
The date of this Prospectus is July 1, 1998. The Policies are not available
in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESMAN, 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.
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
Definitions 1
Summary 2
The Company and the Separate Account 8
The Company
The Separate Account
General American Capital Company
Russell Insurance Funds
American Century Variable Portfolios
J.P. Morgan Series Trust II
Variable Insurance Products Fund
Variable Insurance Products Fund II
Van Eck Worldwide Insurance Trust
Addition, Deletion, or Substitution of Investments 12
Policy Benefits 12
Death Benefit
Cash Value
Policy Rights 16
Loans
Surrender, Partial Withdrawals and Pro Rate Surrender
Transfers
Portfolio Rebalancing
Dollar Cost Averaging
Right to Examine Policy
Death Benefit at Attained Age 100
Payment and Allocation of Premiums 21
Issuance of a Policy
Premiums
Allocation of Net Premiums and Cash Value
Policy Lapse and Reinstatement
Charges and Deductions 24
Premium Expense Charges
Monthly Deduction
Contingent Deferred Sales Charge
Separate Account Charges
Dividends 27
The General Account 27
General Matters 29
Distribution of the Policies 32
Federal Tax Matters 32
Unisex Requirements Under Montana Law 36
Safekeeping of the Separate Account's Assets 36
Voting Rights 36
State Regulation of the Company 37
Management of the Company 38
Legal Matters 40
Legal Proceedings 41
Experts 41
Additional Information 41
Financial Statements 41
Appendix A - Illustration of Death Benefits and Cash Values 43
</TABLE>
<PAGE> 3
DEFINITIONS
Attained Age - The Issue Age of the Insured plus the number of completed
Policy Years.
Beneficiary - The person(s) named in the application or by later designation
to receive Policy proceeds in the event of the Insured's death. A
Beneficiary may be changed as set forth in the Policy and this Prospectus.
Cash Value - The total amount that a Policy provides for investment at any
time. It is equal to the total of the amounts credited to the Owner in the
Separate Account and the General Account, including the Loan Account.
Cash Surrender Value - The Cash Value of a Policy on the date of surrender,
less any Indebtedness, and less any surrender charges.
Division - A subaccount of the Separate Account. Each Division invests
exclusively in the shares of a corresponding Fund of either General American
Capital Company, Russell Insurance Funds, American Century Variable
Portfolios, J.P. Morgan Series Trust II, Variable Insurance Products Fund,
Variable Insurance Products Fund II, or Van Eck Worldwide Insurance Trust.
Effective Date - The date as of which insurance coverage begins under a
policy.
Face Amount - The minimum death benefit under the Policy so long as the
Policy remains in force.
Fund - A separate investment Portfolio of either General American Capital
Company, Russell Insurance Funds, American Century Variable Portfolios, J.P.
Morgan Series Trust II, Variable Insurance Products Fund, Variable Insurance
Products Fund II, or Van Eck Worldwide Insurance Trust. Although sometimes
referred to elsewhere as "Portfolios," they are referred to herein as
"Funds," except where "Portfolio" is part of their name.
General Account -The assets of the Company other than those allocated to the
Separate Account or any other separate account. The Loan Account is part of
the General Account.
Home Office - The service office of General American Life Insurance Company,
the mailing address of which is P.O. Box 14490, St. Louis, Missouri 63178.
Indebtedness - The sum of all unpaid Policy Loans and accrued interest on
loans.
Insured - The person whose life is insured under the Policy.
Investment Start Date - The date the initial premium is applied to the
General Account and/or the Divisions of the Separate Account. This date is
the later of the Issue Date or the date the initial premium is received at
General American's Home Office.
Issue Age - The Insured's age at his or her nearest birthday as of the date
the Policy is issued.
Issue Date - The date from which Policy Anniversaries, Policy Years, and
Policy Months are measured.
Loan Account - The account of the Company to which amounts securing Policy
Loans are allocated. The Loan Account is part of General American's General
Account.
Loan Subaccount - A Loan Subaccount exists for the General Account and for
each Division of the Separate Account. Any Cash Value transferred to the
Loan Account will be allocated to the appropriate Loan Subaccount to reflect
the origin of the Cash Value. At any point in time, the Loan Account will
equal the sum of all the Loan Subaccounts.
Monthly Anniversary - The same date in each succeeding month as the Issue
Date except that whenever the Monthly Anniversary falls on a date other than
a Valuation Date, the Monthly Anniversary will be deemed the next Valuation
Date. If any Monthly Anniversary would be the 29th, 30th, or 31st day of a
month that does not have that number of days, then the Monthly Anniversary
will be the last day of that month.
Net Premium - The premium less the premium expense charges (consisting of the
sales charge and the premium tax charge).
Owner - The Owner of a Policy, as designated in the application or as
subsequently changed.
Policy - The flexible premium variable life insurance Policy offered by the
Company and described in this Prospectus.
Policy Anniversary - The same date each year as the Issue Date.
Policy Month - A month beginning on the Monthly Anniversary.
Policy Year - A period beginning on a Policy Anniversary and ending on the
day immediately preceding the next Policy Anniversary.
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Portfolio - see Fund.
Pro-Rata Surrender - A requested reduction of both the Face Amount and the
Cash Value by a given percentage.
SEC - The United States Securities and Exchange Commission.
Separate Account - General American Separate Account Eleven, a separate
investment account established by the Company to receive and invest the Net
Premiums paid under the Policy, and certain other variable life policies, and
allocated by the Owner to provide variable benefits.
Target Premium - A premium calculated when a Policy is issued, based on the
Insured's age, sex (except in unisex policies) and risk class. The target
premium is used to calculate the first year's premium expense charge, the
contingent deferred sales charge, and agent compensation under the Policy.
(See Charges and Deductions.)
Valuation Date - Each day that the New York Stock Exchange is open for
trading and the Company is open for business. The Company is not open for
business the day after Thanksgiving.
Valuation Period - The period between two successive Valuation Dates,
commencing at 4:00 p.m. (Eastern Standard Time) on a Valuation Date and
ending 4:00 p.m. on the next succeeding Valuation Date.
SUMMARY
The following summary of Prospectus information should be read in conjunction
with the detailed information appearing elsewhere in this Prospectus. Unless
otherwise indicated, the description of the Policies contained in this
Prospectus assumes that a Policy is in force and that there is no outstanding
Indebtedness.
The Policy. Under the flexible premium variable life insurance Policy
described in this Prospectus, the Owner may, subject to certain limitations,
make premium payments in any amount and at any frequency. The Policy is a
life insurance contract with death benefits, Cash Value, surrender rights,
Policy Loan privileges, and other features traditionally associated with life
insurance. It is a "flexible premium" Policy because, unlike traditional
insurance policies, there is no fixed schedule for premium payments.
Although the Owner may establish a schedule of premium payments ("planned
premium payments"), failure to make the planned premium payments will not
necessarily cause a Policy to lapse nor will making the planned premium
payments guarantee that a Policy will remain in force. Thus, an Owner may,
but is not required to, pay additional premiums. This flexibility permits an
Owner to provide for changing insurance needs within a single insurance
policy.
The Policy is a "variable" Policy because, unlike the fixed benefits under an
ordinary life insurance contract, to the extent that Net Premiums are
allocated to the Separate Account, the Cash Value and, under certain
circumstances, the death benefit under a Policy may increase or decrease
depending upon the investment performance of the Divisions of the Separate
Account to which the Owner has allocated Net Premium payments. However, so
long as a Policy's Cash Surrender Value continues to be sufficient to pay the
monthly deductions, an Owner is guaranteed a minimum death benefit equal to
the Face Amount of his or her Policy, less any outstanding Indebtedness.
A Policy will lapse (and terminate without value) when the Cash Surrender
Value is insufficient to pay the next monthly deduction and a grace period of
62 days expires without an adequate payment being made by the Owner. (See
Payment and Allocation of Premiums - Policy Lapse and Reinstatement.)
The Separate Account. After the end of the "Right to Examine Policy" period,
the Owner may allocate the Net Premiums to the Separate Account and, if it is
available, to the General Account. Amounts allocated to the Separate Account
are further allocated to one or more Divisions. Assets of each Division are
invested at net asset value in shares of a corresponding Fund. (See The
Company and the Separate Account,) An Owner may change future allocations of
Net Premiums at any time.
The option offered in connection with the Policies to allocate Net Premiums
or to transfer Cash Value to the General Account may not be made available,
at the Company's discretion, under all Policies. Further, the option may be
limited with respect to some Policies. The Company may, from time to time,
adjust the extent to which future premiums may be allocated to the General
Account in regard to any or all outstanding Policies. Such adjustments may
not be uniform as to all Policies.
Until the end of the "Right to Examine Policy" period (See Policy Rights -
Right to Examine Policy), all Net Premiums automatically will be allocated to
the Division that invests in the Money Market Fund. (See Payment and
Allocation of Premiums - Allocation of Net Premiums and Cash Value.)
To the extent Net Premiums are allocated to the Divisions of the Separate
Account, the Cash Value
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will, and the death benefit may, vary with the investment performance of the
chosen Division. To the extent Net Premiums are allocated to the General
Account, the Cash Value will accrue interest at a guaranteed minimum rate.
(See The General Account.) Thus, depending upon the allocation of Net
Premiums, investment risk over the life of a Policy may be borne by the
Owner, by the Company, or by both.
Subject to certain restrictions, an Owner may transfer Cash Values among the
Divisions of the Separate Account or, it available, between the Separate
Account and the General Account. Currently, no transaction charge is assessed
for the first twelve requested transfers or partial withdrawals in a Policy
Year. A charge of $25 applies to requested transfers or partial withdrawals
in excess of twelve. The Company reserves the right to revoke or modify the
transfer privilege. (See Policy Rights - Transfers.)
Charges and Deductions. A premium expense charge will be deducted from each
premium payment prior to allocation. The premium expense charge consists of
a sales charge and a charge to cover premium taxes and federal taxes. The
sales charge will never exceed the following levels:
<TABLE>
<S> <C>
Policy Year 1 15% of premium up to Target
5% of premium above Target
Policy Years 2-10 5% of all premium paid
Policy Years 11+ 2% of all premium paid
</TABLE>
For policies issued in the state of Oregon, the amounts shown above are
increased by 2%.
In addition to the sales charges shown above, there is a premium tax charge
in all policy years. This charge varies by state or other jurisdiction and
provides a pass-through of the actual premium tax (if any) incurred as a
result of taxes imposed by the state or other jurisdiction. State premium
taxes currently range from 0% to 3.5% (4% in Puerto Rico), with an average of
approximately 2.1%. We reserve the right to change the premium tax charge as
a result of rate changes by the governing jurisdiction. There is a federal
tax charge designed to pass through the equivalent of the federal tax
consequences applicable to the policy. The federal tax charge is currently
1.3% of premium paid, and is guaranteed not to increase except to the extent
of any increases in the federal tax. (See Charges and Deductions - Premium
Expense Charges.)
A Contingent Deferred Sales Charge (CDSC or Surrender Charge) to compensate
for sales expenses will also be assessed against the Cash Value under a
Policy upon a surrender, a lapse, a partial withdrawal, or Pro-Rata
Surrender. The CDSC will never exceed 45% of the annual Target Premium
attributable to the base policy. (See Policy Rights - Surrender, Partial
Withdrawals, and Pro-Rata Surrender; Policy Benefits - Death Benefit; and
Charges and Deductions - Contingent Deferred Sales Charge.) Reductions in
the Contingent Deferred Sales Charge are available in some situations. (See
Adjustment of Charges.)
On each Monthly Anniversary, the Cash Value will be reduced by a monthly
deduction. The monthly deduction includes an administrative charge which is
generally $25 per month for each Policy Month during the first Policy Year,
and $6 per month for each Policy Month beginning in the second Policy Year.
During the first ten Policy Years following the Issue Date and following an
increase in the Face Amount, we generally make a deduction for a selection
and issue expense charge. This amount ranges from about 4 cents to 65 cents
per $1,000 of face amount, and varies by the Insured's age, sex, and risk
class. (See Charges and Deductions - Monthly Deduction.) A monthly charge
is also made for the cost of insurance, and the cost of any additional
benefits provided by rider. (See Charges and Deductions - Monthly
Deduction.)
A daily charge based on a percentage of the net assets of each Division of
the Separate Account will be imposed for the Company's assumption of certain
mortality and expense risks incurred in connection with the Policies. The
charge will not exceed an amount equal to the following effective annual
charges:
<TABLE>
<S> <C>
Policy Years 1-10 .55% of net Separate Account assets
Policy Years 11-20 .45% of net Separate Account assets
Policy Years 21+ .35% of net Separate Account Assets
</TABLE>
This charge is not deducted from the Cash Value, but rather is applied to the
calculation of the net investment factor. (See Charges and Deductions -
Separate Account Charges.)
The Company may make a charge for any taxes or economic burden resulting
from the application of the tax laws that it determines to be properly
attributable to the Separate Account or to the Policy. (See Federal Tax
Matters.)
The operating expenses of the Separate Account are paid by General American.
Investment Advisory fees and other operating expenses of the Funds are paid
by the Funds and are reflected in the value of the assets of the
corresponding Division of the Separate Account. For a description of these
charges, see Charges and Deductions--Separate Account Charges.
The following chart shows the operating expenses of the Funds as reported for
the fiscal year ending December 31, 1997:
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<TABLE>
- ----------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses<F1>
As a Percentage of Average Net Assets
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Investment
Fund Advisory/ Other Expenses Total
Management
Fee
- ----------------------------------------------------------------------------------------------------------------
General American Capital Company
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index Fund .25% .05% .30%
- ----------------------------------------------------------------------------------------------------------------
Money Market Fund .125% .08% .205%
- ----------------------------------------------------------------------------------------------------------------
Bond Index Fund .25% .05% .30%
- ----------------------------------------------------------------------------------------------------------------
Managed Equity Fund .40%<F2> .10% .50%
- ----------------------------------------------------------------------------------------------------------------
Asset Allocation Fund .50% .10% .60%
- ----------------------------------------------------------------------------------------------------------------
International Index Fund .50%<F3> .30% .80%
- ----------------------------------------------------------------------------------------------------------------
Mid-Cap Equity Fund .55%<F4> .10% .65%
- ----------------------------------------------------------------------------------------------------------------
Small-Cap Equity Fund .25% .05% .30%
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Russell Insurance Funds
(AMOUNTS SHOWN ARE AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS DESCRIBED BELOW.)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Multi-Style Equity Fund .09%<F5> .83% .92%<F5>
- ----------------------------------------------------------------------------------------------------------------
Aggressive Equity Fund .00%<F6> 1.25% 1.25%<F6>
- ----------------------------------------------------------------------------------------------------------------
Non-U.S. Fund .00%<F7> 1.30% 1.30%<F7>
- ----------------------------------------------------------------------------------------------------------------
Core Bond Fund .00%<F8> .80% .80%<F8>
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
American Century Variable Portfolios
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income & Growth Fund .70% .00% .70%
- ----------------------------------------------------------------------------------------------------------------
International Fund 1.50% .00% 1.50%
- ----------------------------------------------------------------------------------------------------------------
Value Fund 1.00% .00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
J.P. Morgan Series Trust II
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bond Portfolio .30% .45% .75%
- ----------------------------------------------------------------------------------------------------------------
Small Company Portfolio .60% .55% 1.15%
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Variable Insurance Products Fund
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity-Income Portfolio .50% .08% .58%
- ----------------------------------------------------------------------------------------------------------------
Growth Portfolio .60% .09% .69%
- ----------------------------------------------------------------------------------------------------------------
Overseas Portfolio .75% .17% .92%
- ----------------------------------------------------------------------------------------------------------------
High Income Portfolio .59% .12% .71%
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Variable Insurance Products Fund II
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Manager .55% .10% .65%
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Van Eck Worldwide Insurance Trust
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Hard Assets Fund 1.00% .00% 1.00%
- ----------------------------------------------------------------------------------------------------------------
Worldwide Emerging Markets Fund 1.50% .00% 1.50%
- ----------------------------------------------------------------------------------------------------------------
<FN>
<F1> The Fund expenses shown above are assessed at the underlying Fund level
and are not direct charges against the Separate Account assets or reductions
from the Policy's Cash Value. These underlying Fund Expenses are taken into
consideration in computing each Fund's net asset value, which is used to
calculate the unit values in the Separate Account. The management fees and
other expenses are more fully described in the prospectus of each individual
Fund. The information relating to the Fund expenses was provided by the Fund
and was not independently verified by General American. Except as otherwise
specifically noted, the management fees and other expenses are not currently
subject to fee waivers or expense reimbursements.
<F2> The fees charged by the Managed Equity Fund are stated as a series of
annual percentages of the average daily value of the net assets of the Fund.
The percentages decrease with respect to assets of the Fund above certain
amounts, as follows: First $10 million, 0.40%; Next $20 million, 0.30%;
Balance over $30 million, 0.25%.
<F3> The fees charged by the International Index Fund are stated as a series
of annual percentages of the average daily value of the net assets of the
Funds. The percentages decrease with respect to assets of the Fund above
certain amounts, as follows: First $10 million, 0.50%; Next $20 million,
0.40%; Balance over $20 million, 0.30%.
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<F4> The fees charged by the Mid-Cap Equity Fund are stated as a series of
annual percentages of the average daily value of the net assets of the Funds.
The percentages decrease with respect to assets of the Fund above certain
amounts, as follows: First $10 million, 0.55%; Next $10 million, 0.45%;
Balance over $20 million, 0.40%.
<F5> The Manager has voluntarily agreed to waive a portion of its 0.78%
management fee, up to the full amount of that fee, equal to the amount by
which the Fund's total operating expenses exceed 0.92% of the Fund's average
daily net assets on an annual basis, and to reimburse the Fund for all
remaining expenses after fee waivers which exceed 0.92% of average daily net
assets on an annual basis. The management fee waivers and reimbursements are
intended to be in effect for 1998, but may be revised or eliminated at any
time thereafter without notice to shareholders. Absent the waiver, the
management fee would have been 0.78%, and total Fund expenses would have been
1.61% of average daily net assets.
<F6> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount by
which the Fund's total operating expenses exceed 1.25% of the Fund's average
daily net assets on an annual basis, and to reimburse the Fund for all
remaining expenses after fee waivers which exceed 1.25% of average daily net
assets on an annual basis. The management fee waivers and reimbursements are
intended to be in effect for 1998, but may be revised or eliminated at any
time thereafter without notice to shareholders. Absent the waiver, the
management fee would have been 0.95%, other expenses would have been 1.27%,
and total Fund expenses would have been 2.22% of average daily net assets.
<F7> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount by
which the Fund's total operating expenses exceed 1.30% of the Fund's average
daily net assets on an annual basis, and to reimburse the Fund for all
remaining expenses after fee waivers which exceed 1.30% of average daily net
assets on an annual basis. The management fee waivers and reimbursements are
intended to be in effect for 1998, but may be revised or eliminated at any
time thereafter without notice to shareholders. Absent the waiver, the
management fee would have been 0.95%, other expenses would have been 2.70%,
and total Fund expenses would have been 3.65% of average daily net assets.
<F8> The Manager has voluntarily agreed to waive a portion of its 0.60%
management fee, up to the full amount of that fee, equal to the amount by
which the Fund's total operating expenses exceed 0.80% of the Fund's average
daily net assets on an annual basis, and to reimburse the Fund for all
remaining expenses after fee waivers which exceed 0.80% of average daily net
assets on an annual basis. The management fee waivers and reimbursements are
intended to be in effect for 1998, but may be revised or eliminated at any
time thereafter without notice to shareholders. Absent the waiver, the
management fee would have been 0.60%, other expenses would have been 1.70%,
and total Fund expenses would have been 2.30% of average daily net assets.
</TABLE>
There are no transaction charges to cover the administrative costs of
processing the first twelve partial withdrawals or requested transfers of
Cash Value between Divisions of the Separate Account or the General Account
in any Policy Year. There is a charge of $25 for each partial withdrawal or
requested transfer in excess of twelve. (See Payment and Allocation of
Premiums - Allocation of Net Premiums and Cash Value; Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender; and The General
Account.)
Premiums. An Owner has considerable flexibility concerning the amount and
frequency of premium payments. A Policy will not become effective until the
Owner has paid an initial premium equal to one-twelfth (1/12) of the "Minimum
Premium" for the Policy. This amount will be different for each Policy.
Thereafter, an Owner may, subject to certain restrictions, make premium
payments in any amount and at any frequency. The Owner may also determine a
planned premium payment schedule. The schedule will provide for a premium
payment of a level amount at a fixed interval over a specified period of
time. An Owner need not, however, adhere to the planned premium payment
schedule. For policies issued as a result of a term conversion from certain
General American term policies, the Company requires the Owner to pay an
initial premium, which combined with conversion credits given, if any, will
equal one full "Minimum Premium" for the Policy. (See Payment and Allocation
of Premiums.)
If, during the first five Policy Years, the sum of all premiums paid on the
Policy, reduced by any partial withdrawals and any outstanding loan balance,
is greater than or equal to the sum of the no lapse monthly premiums for the
elapsed months since the Issue Date, the Policy will not lapse as a result of
a Cash Value less any loans, loans interest due, and any surrender charge
being insufficient to pay the monthly deduction. A Policy will lapse only
when the Cash Surrender Value is insufficient to pay the next monthly
deduction (See Charges and Deductions - Monthly Deduction.) and a grace
period expires without a sufficient payment by the Owner. (See Payment and
Allocation of Premiums - Policy Lapse and Reinstatement.)
Death Benefit. A death benefit is payable to the named Beneficiary when the
Insured under a Policy dies. Three death benefit options are available.
Under Death Benefit Option A, the death benefit is
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<PAGE> 8
the Face Amount of the Policy or, if greater, the applicable percentage of
Cash Value. Under Death Benefit Option B, the death benefit is the Face
Amount of the Policy plus the Cash Value or, if greater, the applicable
percentage of Cash Value. Under Death Benefit Option C, the death benefit is
the Face Amount of the Policy or, if greater, the Cash Value multiplied by
the Attained Age factor. So long as the Policy remains in force, prior to
Attained Age 100 the minimum death benefit under any death benefit option
will be at least the current Face Amount. The death benefit will be
increased by any unpaid dividends determined prior to the Insured's death,
and by the amount of the cost of insurance for the portion of the month from
the date of death to the end of the month, and reduced by any outstanding
Indebtedness. The death benefit will be paid according to the settlement
options available at the time of death. (See Policy Benefits - Death
Benefit.)
The minimum Face Amount at issue is generally $50,000 under the Company's
current rules. Subject to certain restrictions, the Owner may change the
Face Amount and the death benefit option. In certain cases evidence of
insurability may be required. (See Change in Death Benefit Option, and
Change In Face Amount.)
Additional insurance benefits are offered under the Policy. (See General
Matters - Additional Insurance Benefits.) The cost of these additional
insurance benefits will be deducted from the Cash Value as part of the
monthly deduction. (See Charges and Deductions - Monthly Deduction.)
Cash Value. The Policies provide for a Cash Value equal to the total of the
amounts credited to the Owner in the Separate Account, the Loan Account
(securing Policy Loans) and in certain contracts, the General Account. A
Policy's Cash Value will reflect the amount and frequency of Net Premium
payments, the investment performance of any selected Divisions of the
Separate Account, any Policy Loans and related interest, any partial
withdrawals, and the charges imposed in connection with the Policy. (See
Policy Benefits - Cash Value.) There is no minimum guaranteed Cash Value.
Policy Loans. An Owner may borrow against the Cash Value of a Policy. The
maximum amount that may be borrowed under a Policy ("the Loan Value") is the
Cash Value of the Policy on the date the loan request is received, plus
interest expected to be earned on the loan balance to the next Policy
Anniversary at the General Account's guaranteed interest rate, less loan
interest to the next Policy Anniversary, less any outstanding Indebtedness,
less any surrender charges, less monthly deductions to the next loan interest
due date. Loan interest is payable on each Policy Anniversary and all
outstanding Indebtedness will be deducted from proceeds payable at the
Insured's death, upon the exercise of a settlement option, or upon surrender.
A Policy loan will be allocated among the General Account (if available) and
the various Divisions of the Separate Account. When a loan is allocated to
the Divisions of the Separate Account, a portion of the Policy's Cash Value
in the Divisions of the Separate Account sufficient to secure the loan will
be transferred to the Loan Account as security for the loan. Therefore, a
loan may have impact on the Policy's Cash Value even if it is repaid. A
Policy Loan may be repaid in whole or in part at any time while the Policy is
in force. (See Policy Rights - Loans.) Loans taken from, or secured by, a
Policy may have Federal income tax consequences. (See Federal Tax Matters.)
Surrender, Partial Withdrawals, and Pro-Rata Surrender. At any time that a
Policy is in force, an Owner may elect to surrender the Policy and receive
its Cash Surrender Value plus the value of dividends (if any) determined
prior to the surrender. After the first year, an Owner may also request a
partial withdrawal of the Cash Surrender Value of the Policy. When the death
benefit is not based on an applicable percentage of the Cash Value, a partial
withdrawal reduces the death benefit payable under the Policy by an amount
equal to the reduction in the Policy's Cash Value unless the withdrawal is
made under the terms of the anniversary partial withdrawal rider. (See
General Matters - Additional Insurance Benefits.) An Owner may also request
a Pro-Rata Surrender of the Policy. (See Policy Rights - Surrender, Partial
Withdrawals, and Pro-Rata Surrender.) A surrender, partial withdrawal, or
Pro-Rata Surrender may have Federal income tax consequences. (See Federal
Tax Matters.)
Right to Examine Policy. The Owner has a limited right to return a Policy
for cancellation within 20 days after receiving it (30 days if the Owner is a
resident of California and is age 60 or older), or within 45 days after the
application is signed, whichever is later (or such longer period, if any, as
required by law). If a Policy is canceled within this time period, a refund
will be paid which will equal all premiums paid under the Policy except in
Kansas. The Owner also has a similar right to cancel a requested increase in
Face Amount. Upon cancellation of an increase, the additional charges
deducted in connection with the increase will be added to the Cash Value.
(See Policy Rights - Right to Examine Policy.)
Illustrations of Death Benefits and Cash Surrender Values. Illustrations in
Appendix A show how death benefits and Cash Surrender Values may vary based
on certain rate of return assumptions and how these
6
<PAGE> 9
benefits compare with amounts which would accumulate if premiums were
invested to earn interest at 5% compounded annually. If a Policy is
surrendered in the early Policy Years the Cash Surrender Value payable will
be low as compared to premiums accumulated at interest, and consequently the
insurance protection provided prior to surrender will be costly. You may
make a written request for a projection of illustrated future Cash Values
and death benefits for a nominal fee not to exceed $25.00.
Tax Consequences of the Policy. If a Policy is issued on the basis of a
standard premium class or on a guaranteed or simplified issue basis, while
limited guidance exists, the Company believes that the Policy should qualify
as a life insurance contract for Federal income tax purposes. However, if a
Policy is issued on a substandard basis, it is unclear whether or not such a
Policy would qualify as a life insurance contract for Federal income tax
purposes. Assuming that the Policy qualifies as a life insurance contract
for Federal income tax purposes, the Company believes the Cash Value of the
Policy should be subject to the same Federal income tax treatment as the Cash
Value of a conventional fixed-benefit contract. If so, the Owner is not
considered to be in constructive receipt of the Cash Value under the Policy
until there is a distribution. A change of Owners, a surrender, a partial
withdrawal, a Pro-Rata Surrender, a lapse with outstanding Indebtedness, or
an exchange may have tax consequences, depending on the particular
circumstances. (See Federal Tax Matters.)
A Policy may be treated as a "modified endowment contract" depending upon the
amount of premiums paid in relation to the death benefit. If the Policy is a
modified endowment contract, then all pre-death distributions, including
Policy Loans and due but unpaid loan interest, will be treated first as a
distribution of taxable income and then as a return of basis or investment in
the contract. In addition, prior to the Owner's age 59 1/2 taxable income
from such distributions generally will be subject to a 10% additional tax.
If the Policy is not a modified endowment contract, distributions generally
will be treated first as a return of basis or investment in the contract and
then as disbursing taxable income. Moreover, loans will not be treated as
distributions. Finally, neither distributions nor loans from a Policy that
is not a modified endowment contract are subject to the 10% additional tax.
(See Federal Tax Matters.)
Dividends. We do not anticipate that the Policy will share in the divisible
surplus of the Company in the form of a dividend. (See Dividends.)
* * *
This Prospectus describes only those aspects of the Policy that relate to the
Separate Account, except where General Account matters are specifically
mentioned. For a brief summary of the aspects of the Policy relating to the
General Account, see The General Account.
THE COMPANY AND THE SEPARATE
ACCOUNT
The Company
General American Life Insurance Company ("General American" or "the Company")
was originally incorporated as a stock company in 1933. In 1936, General
American initiated a program to convert to a mutual life insurance company.
In 1997, General American's policyholders approved a reorganization of the
Company into a mutual holding company structure under which General American
became a stock company wholly owned by GenAmerica Corporation, an
intermediate stock holding company. GenAmerica is wholly owned by General
American Mutual Life Insurance Company, a mutual holding company organized
under Missouri law. The mutual holding company structure retains mutuality
as General American's ultimate parent company is wholly owned by General
American's policyholders.
General American is principally engaged in writing individual and group life
insurance policies and annuity contracts. As of December 31, 1997, it had
consolidated assets of approximately $24 billion. It is admitted to do
business in 49 states, the District of Columbia, Puerto Rico, and in ten
Canadian provinces. The principal offices of General American are located at
700 Market Street, St. Louis, Missouri 63101. The mailing address of General
American's service center ("the Home Office") is P.O. Box 14490, St. Louis,
Missouri 63178.
The Separate Account
General American Life Insurance Company Separate Account Eleven ("the
Separate Account") was established by General American as a separate
investment account on January 24, 1985 under Missouri law. The Separate
Account will receive and invest the Net Premiums paid under this Policy and
allocated to it. In addition, the Separate Account currently receives and
invests Net Premiums for other classes of flexible premium variable life
insurance policies and might do so for additional classes in the future.
The Separate Account has been registered with the SEC as a unit investment
trust under the Investment Company Act of 1940 ("the 1940 Act") and meets
7
<PAGE> 10
the definition of a "separate account" under Federal securities laws.
Registration with the SEC does not involve supervision of the management or
investment practices or policies of the Separate Account or General American
by the SEC.
The Separate Account currently is divided into twenty-four Divisions.
Divisions invest in corresponding Funds from one of seven open-end,
diversified management investment companies: (1) General American Capital
Company, (2) Russell Insurance Funds, (3) American Century Variable
Portfolios, (4) J.P. Morgan Series Trust II, (5) Variable Insurance Products
Fund, (6) Variable Insurance Products Fund II, and (7) Van Eck Worldwide
Insurance Trust. Income and both realized and unrealized gains or losses
from the assets of each Division of the Separate Account are credited to or
charged against that Division without regard to income, gains, or losses from
any other Division of the Separate Account or arising out of any other
business General American may conduct.
Although the assets of the Separate Account are the property of General
American, the assets in the Separate Account equal to the reserves and other
liabilities of the Separate Account are not chargeable with liabilities
arising out of any other business which General American may conduct. The
assets of the Separate Account are available to cover the general liabilities
of General American only to the extent that the Separate Account's assets
exceed its liabilities arising under the Policies. From time to time, the
Company may transfer to its General Account any assets of the Separate
Account that exceed the reserves and the Policy liabilities of the Separate
Account (which will always be at least equal to the aggregate Policy value
allocated to the Separate Account under the Policies). Before making any
such transfers, General American will consider any possible adverse impact
the transfer may have on the Separate Account.
General American Capital Company
General American Capital Company ("the Capital Company") is an open-end,
diversified management investment company which was incorporated in Maryland
on November 15, 1985, and commenced operations on October 1, 1987. Only the
Funds described in this section of the Prospectus are currently available as
investment choices for this Policy even though additional Funds may be
described in the prospectus for the Capital Company. Shares of Capital
Company are currently offered to separate accounts established by General
American Life Insurance Company and affiliates. The Capital Company's
investment adviser is Conning Asset Management Company ("the Adviser"), an
indirect, majority-owned subsidiary of General American. The adviser selects
investments for the Funds.
The investment objectives and policies of each Fund are summarized below:
S&P 500 Index Fund: The investment objective of this Fund is to
provide investment results that parallel the price and yield
performance of publicly-traded common stocks in the aggregate.
The Fund uses the Standard & Poor's Composite Index of 500 Stocks
("the S&P Index") as its standard for performance comparison.
The Fund attempts to duplicate the performance of the S&P Index
and includes dividend income as a component of the Fund's total
return. The Fund is not managed by Standard & Poor's.
The Money Market Fund: The investment objective of the Money
Market Fund is to obtain the highest level of current income
which is consistent with the preservation of capital and
maintenance of liquidity. The Fund invests primarily in
high-quality, short-term money market instruments. An investment
in the Money Market Fund is neither insured nor guaranteed by the
U. S. Government.
Bond Index Fund: The investment objective of this Fund is to
provide a rate of return that reflects the performance of the
publicly-traded bond market as a whole. The Fund uses the Lehman
Brothers Government/Corporate Bond Index as its standard for
performance comparison.
Managed Equity Fund: The investment objective of this Fund is
long-term growth of capital, obtained by investing primarily in
common stocks. Securing moderate current income is a secondary
objective.
Asset Allocation Fund: The investment objective of this Fund is a
high rate of long-term total return composed of capital growth
and income payments. Preservation of capital is the secondary
objective and chief limit on investment risk. The Fund will
invest only in those types of securities that the other Capital
Company Funds may invest in. The Asset Allocation Fund invests
in a combination of common stocks, bonds, or money market
instruments in accordance with guidelines established from time
to time by Capital Company's Board of Directors.
International Index Fund: The investment objective of this Fund
is to obtain investment results that parallel the price and yield
performance of publicly-traded common stocks
8
<PAGE> 11
in the Morgan Stanley Capital International ("MSCI") Europe,
Australia and Far East Index ("EAFE").
Mid-Cap Equity Fund: The investment objective of this Fund is
capital appreciation. It pursues this objective by investing
primarily in common stocks of United States-based, publicly
traded companies with medium market capitalizations falling
within the capitalization range of the S&P Mid-Cap 400 at the
time of the Fund's investment.
Small-Cap Equity Fund: The investment objective of this Fund is
to provide a rate of return that corresponds to the performance
of the common stock of small companies, while incurring a level
of risk that is generally equal to the risks associated with
small company common stock. The Fund attempts to duplicate the
performance of the smallest 20% of companies, based on
capitalization size, that are based in the United States and
listed on the New York Stock Exchange ("NYSE").
Russell Insurance Funds
Russell Insurance Funds ("RIF") is organized as a Massachusetts business
trust under a Master Trust Agreement dated July 11, 1996. RIF is authorized
to issue an unlimited number of shares evidencing beneficial interests in
different investment Funds, which interests may be offered in one or more
classes. RIF is a diversified open end management investment company,
commonly known as a "mutual fund." Frank Russell Company, which is a
consultant to RIF, has been primarily engaged since 1969 in providing asset
management consulting services to large corporate employee benefit funds.
Major components of its consulting services are: (i) quantitative and
qualitative research and evaluation aimed at identifying the most appropriate
investment management firms to invest large pools of assets in accord with
specific investment objectives and styles; and (ii) the development of
strategies for investing assets using "multi-style, multi-manager
diversification." This is a method for investing large pools of assets by
dividing the assets into segments to be invested using different investment
styles, and selecting money managers for each segment based upon their
expertise in that style of investment. General management of RIF is provided
by Frank Russell Investment Management Company, a wholly-owned subsidiary of
Frank Russell Company, which furnishes officers and staff required to manage
and administer RIF on a day-to-day basis.
The investment objectives and policies of each Fund are summarized below:
Multi-Style Equity Fund: The investment objective of this Fund is to provide
income and capital growth by investing principally in equity securities.
Aggressive Equity Fund: This Fund seeks to provide capital appreciation by
assuming a higher level of volatility than is ordinarily expected from the
Multi-Style Equity Fund while still investing in equity securities.
Non-U.S. Fund: This Fund's objective is to provide favorable total return
and additional diversification for U.S. investors by investing primarily in
equity and fixed-income securities of non-U.S. companies, and securities
issued by non-U.S. governments.
Core Bond Fund: This Fund's objective is to maximize total return, through
capital appreciation and income, by assuming a level of volatility
consistent with the broad fixed-income market. The Fund invests in
fixed-income securities.
American Century Variable Portfolios
American Century Variable Portfolios, Inc., a part of American Century
Investments, was organized as a Maryland corporation on June 4, 1987. It is
a diversified, open-end management investment company. Its business and
affairs are managed by its officers under the Direction of its Board of
Directors. American Century Investment Management, Inc. serves as the
investment manager of the fund.
The investment objective and policies of the Funds are summarized below:
Income & Growth Fund: The investment objective of this Fund is
to attain long-term growth of capital as well as current income.
The Fund pursues a total return and dividend yield that exceed
those of the S&P 500 by investing in stocks of companies with
strong dividend growth potential. Dividends are paid monthly.
International Fund: This Fund seeks capital growth over time by
investing in common stocks of foreign companies considered to
have better-than-average prospects for appreciation. Because the
Fund invests in foreign securities, a higher degree of short-term
price volatility, or risk, is expected due to factors such as
currency fluctuation and political instability.
Value Fund: This Fund is a core equity fund that seeks long-term
capital growth. Income is a secondary objective. To pursue its
objectives, the fund invests primarily in equity securities of
9
<PAGE> 12
well-established companies that are believed by management to be
undervalued at the time of purchase. Please note that this is an
equity investment and, by nature, may fluctuate in value.
J.P. Morgan Series Trust II
J.P. Morgan Series Trust II is an open-end diversified management investment
company organized as a Delaware Business Trust. The Trust's investment
adviser is J.P. Morgan Investment Management, Inc., a registered investment
adviser and a wholly owned subsidiary of J.P. Morgan & Co., Incorporated, a
bank holding company organized under the laws of Delaware.
The investment objective and policies of the Funds are summarized below:
Bond Portfolio: This Fund seeks to provide a high total return
consistent with moderate risk of capital and maintenance of
liquidity. The Fund is designed for investors who seek a total
return over time that is higher than that generally available
from a portfolio of short-term obligations while acknowledging
the greater price fluctuation of longer-term instruments.
Small Company Portfolio: The investment objective of this Fund
is to provide high total return from a portfolio of equity
securities of small companies. The Fund invests at least 65% of
the value of its total assets in the common stock of small U.S.
Companies primarily with market capitalizations less than $1
billion. The Fund is designed for investors who are willing to
assume the somewhat higher risk of investing in small companies
in order to seek a higher return over time than might be expected
from a portfolio of stocks of large companies.
Variable Insurance Products Fund
Variable Insurance Products Fund ("VIP") is an open-end, diversified
management investment company organized as a Massachusetts business trust on
November 13, 1981. Only the Funds described in this section of the
Prospectus are currently available as investment choices for this Policy even
though additional Funds may be described in the prospectus for VIP. VIP
shares are purchased by insurance companies to fund benefits under variable
insurance and annuity policies. Fidelity Management & Research Company
("FMR") of Boston, Massachusetts is the Funds' Manager.
The investment objectives and policies of each Fund are summarized below:
Equity-Income Portfolio: The investment objective of this Fund is
income, obtained by investing primarily in income-producing
equity securities. In choosing these securities, FMR will also
consider the potential for capital appreciation. The Fund's goal
is to achieve a yield which exceeds the composite yield on the
securities comprising the Standard & Poor's Composite Index of
500 Stocks.
Growth Portfolio: The investment objective of this Fund is
capital appreciation. The Fund normally purchases common stocks,
although its investments are not restricted to any one type of
security. Capital appreciation may also be obtained from other
types of securities, including bonds and preferred stocks.
Overseas Portfolio: The investment objective of this Fund is
long-term growth of capital. The Fund invests primarily in
foreign securities. The Overseas Portfolio provides a means for
investors to diversify their own portfolios by participation in
companies and economies outside of the United States.
High Income Portfolio: The investment objective of this Fund is
a high level of current income. The Fund seeks to fulfill the
objective by investing primarily in high-yielding, lower-rated,
fixed-income securities, while also considering growth of
capital. Lower-rated securities, commonly referred to as "junk
bonds," involve greater risk of default or price change than
securities assigned a higher quality rating.
Variable Insurance Products Fund II
Variable Insurance Products Fund II ("VIP II") is an open-end, diversified
management investment company organized as a Massachusetts business trust on
March 21, 1988. Only the Fund described in this section of the Prospectus is
currently available as an investment choice for this Policy even though
additional Funds may be described in the prospectus for VIP II. VIP II
shares are purchased by insurance companies to fund benefits under variable
insurance and annuity policies. FMR is the Fund's manager.
The investment objective and policies of the Funds are summarized below:
Asset Manager: The investment objective of this Fund is to seek
a high total return with reduced risk over the long-term by
allocating its assets among domestic and foreign stocks, bonds,
and short-term fixed income instruments.
10
<PAGE> 13
Van Eck Worldwide Insurance Trust
Van Eck Worldwide Insurance Trust ("Van Eck") is an open-end management
investment company organized as a Massachusetts business trust on January 7,
1987. Only the Funds described in this section of the Prospectus is
currently available as an investment choice for this Policy even though
additional Funds may be described in the prospectus for Van Eck. Shares of
Van Eck are offered only to separate accounts of various insurance companies
to support benefits of variable insurance and annuity policies. The assets
of Van Eck are managed by Van Eck Associates Corporation of New York, New
York.
The investment objectives and policies of the Fund are summarized below:
Worldwide Hard Assets Fund: The investment objective of the Fund
is to seek long-term capital appreciation by investing in equity
and debt securities of companies engaged in the exploration,
development, production, and distribution of one or more of the
following: (i) precious metals, (ii) ferrous and non-ferrous
metals, (iii) oil and gas, (iv) forest products, (v) real estate,
and (vi) other basic non-agricultural commodities (together,
"Hard Assets"). Current income is not an objective.
Worldwide Emerging Markets Fund: The investment objective of
this Fund is to obtain long-term capital appreciation by
investing in equity securities in emerging markets around the
world. The Fund emphasizes primarily investment in countries
that, compared to the world's major economies, exhibit relatively
low gross national product per capita, as well as the potential
for rapid economic growth.
There is no assurance that any of the Funds will achieve its stated
objective. It is conceivable that in the future it may be disadvantageous
for Funds to offer shares to separate accounts of various insurance companies
to serve as the investment medium for their variable products or for both
variable life and annuity separate accounts to invest simultaneously in a
Fund. The Boards of Trustees of RIF, VIP, VIP II, and Van Eck, the Boards of
Directors of Capital Company, American Century, and J.P. Morgan, the
respective Advisers of each Fund, and the Company and any other insurance
companies participating in the Funds are required to monitor events to
identify any material irreconcilable conflicts that may possibly arise, and
to determine what action, if any, should be taken in response to those events
or conflicts. A more detailed description of the Funds, their investment
policies, restrictions, risks, and charges is in the prospectuses for each
Fund, which must accompany or precede this Prospectus and which should be
read carefully.
Addition, Deletion, or Substitution of Investments
The Company reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, or substitutions for the shares that are
held by the Separate Account or that the Separate Account may purchase. The
Company reserves the right to eliminate the shares of any of the Funds and to
substitute shares of another Fund of Capital Company, RIF, VIP, VIP II, Van
Eck, American Century, J.P. Morgan or of another registered open-end
investment company if the shares of a Fund are no longer available for
investment or if in its judgment further investment in any Fund becomes
inappropriate in view of the purposes of the Separate Account. The Company
will not substitute any shares attributable to an Owner's interest in a
Division of the Separate Account without notice to the Owner and prior
approval of the SEC, to the extent required by the 1940 Act or other
applicable law. Nothing contained in this Prospectus shall prevent the
Separate Account from purchasing other securities for other series or classes
of policies, or from permitting a conversion between series or classes of
policies on the basis of requests made by Owners.
The Company also reserves the right to establish additional Divisions of the
Separate Account, each of which would invest in a new Fund with a specified
investment objective. New Divisions may be established when, in the sole
discretion of the Company, marketing needs or investment conditions warrant.
Any new Division will be made available to existing Owners on a basis to be
determined by the Company. To the extent approved by the SEC, the Company
may also eliminate or combine one or more Divisions, substitute one Division
for another Division, or transfer assets between Divisions if, in its sole
discretion, marketing, tax, or investment conditions warrant.
In the event of a substitution or change, the Company may, if it considers it
necessary, make such changes in the Policy by appropriate endorsement and
offer conversion options required by law, if any. The Company will notify
all Owners of any such changes.
If deemed by the Company to be in the best interests of persons having voting
rights under the Policy, and to the extent any necessary SEC approvals or
Owner votes are obtained, the Separate Account may be: (a) operated as a
management company under the 1940 Act; (b) de-registered under that Act in
the event such registration is no longer required; or (c) combined with other
separate accounts of the Company. To the extent permitted by applicable
11
<PAGE> 14
law, the Company may also transfer the assets of the Separate Account
associated with the Policy to another separate account.
POLICY BENEFITS
Death Benefit
As long as the Policy remains in force (See Payment and Allocation of
Premiums - Policy Lapse and Reinstatement), the Company will, upon receipt of
proof of the Insured's death at its Home Office, pay the death benefit in a
lump sum. The amount of the death benefit payable will be determined at the
end of the Valuation Period during which the Insured's death occurred. The
death benefit will be paid to the surviving Beneficiary or Beneficiaries
specified in the application or as subsequently changed.
The Policy provides three death benefit options: "Death Benefit Option A,"
"Death Benefit Option B," and "Death Benefit Option C." The death benefit
under all options will never be less than the current Face Amount of the
Policy (less Indebtedness) as long as the Policy remains in force. (See
Payment and Allocation of Premiums - Policy Lapse and Reinstatement.) The
current minimum Face Amount is generally $50,000.
Death Benefit Option A. Under Death Benefit Option A, the death benefit
until the Insured reaches Attained Age 100 is the current Face Amount of the
Policy or, if greater, the applicable percentage of Cash Value on the date of
death. At Attained Age 100 and above, the death benefit is 101% of the Cash
Value. The applicable percentage is 250% for an Insured reaching Attained
Age 40 or below on the Policy Anniversary prior to the date of death. For
Insureds with an a Attained Age over 40 on that Policy Anniversary, the
percentage is lower and declines with age as shown in the Applicable
Percentage of Cash Value Table shown below. Accordingly, under Death Benefit
Option A the death benefit will remain level at the Face Amount unless the
applicable percentage of Cash Value exceeds the current Face Amount, in which
case the amount of the death benefit will vary as the Cash Value varies.
(See Illustrations of Death Benefits and Cash Values, Appendix A.)
Death Benefit Option B. Under Death Benefit Option B, the death benefit
until the Insured reaches Attained Age 100 is equal to the current Face
Amount plus the Cash Value of the Policy on the date of death or, if greater,
the applicable percentage of the Cash Value on the date of death. At
Attained Age 100 and above, the death benefit is 101% of the Cash Value. The
applicable percentage is the same as under Death Benefit Option A: 250% for
an Insured Attained Age 40 or below on the Policy Anniversary prior to the
date of death, and for Insureds with an Attained Age over 40 on that Policy
Anniversary the percentage declines as shown in the Applicable Percentage of
Cash Value Table shown below. Accordingly, under Death Benefit Option B the
amount of the death benefit will always vary as the Cash Value varies (but
will never be less than the Face Amount). (See Illustrations of Death
Benefits and Cash Values, Appendix A.)
<TABLE>
- -------------------------------------------------------------------------
Applicable Percentage of Cash Value Table
For Insureds Less Than Age 100<F*>
- -------------------------------------------------------------------------
<CAPTION>
Insured Person's Age Policy Account Multiple
Percentage
- -------------------------------------------------------------------------
<S> <C>
40 or under 250%
- -------------------------------------------------------------------------
45 215%
- -------------------------------------------------------------------------
50 185%
- -------------------------------------------------------------------------
55 150%
- -------------------------------------------------------------------------
60 130%
- -------------------------------------------------------------------------
65 120%
- -------------------------------------------------------------------------
70 115%
- -------------------------------------------------------------------------
78 to 90 105%
- -------------------------------------------------------------------------
95 to 99 101%
- -------------------------------------------------------------------------
<FN>
<F*>For ages that are not shown on this table, the applicable percentage
multiples will decrease by a ratable portion for each full year.
</TABLE>
Death Benefit Option C. Under Death Benefit Option C, the death benefit is
equal to the current Face Amount of the Policy or, if greater, the Cash Value
on the date of death multiplied by the "Attained Age factor" (a list of
sample Attained Age factors is shown in the Sample Attained Age Factor Table
below). At Attained Age 100 and above, the death benefit is 101% of the Cash
Value. Accordingly, under Death Benefit Option C the death benefit will
remain level at the Face Amount unless the Cash Value multiplied by the
Attained Age factor exceeds the current Face Amount, in which case the amount
of the death benefit will vary as the Cash Value varies. (See Illustrations
of Death Benefits and Cash Values, Appendix A.)
12
<PAGE> 15
<TABLE>
- ----------------------------------------------------------------------------------------------
Death Benefit Option C
Sample Attained Age Factor Table
Non-Smoker Rates
- ----------------------------------------------------------------------------------------------
<CAPTION>
Insured Male Lives Female Lives
Attained Age Factor Factor
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
20 7.005753 7.978495
- ----------------------------------------------------------------------------------------------
25 6.022987 6.777620
- ----------------------------------------------------------------------------------------------
30 5.118855 5.739715
- ----------------------------------------------------------------------------------------------
35 4.326687 4.852022
- ----------------------------------------------------------------------------------------------
40 3.657390 4.105161
- ----------------------------------------------------------------------------------------------
45 3.101789 3.489815
- ----------------------------------------------------------------------------------------------
50 2.642973 2.978976
- ----------------------------------------------------------------------------------------------
55 2.266395 2.555211
- ----------------------------------------------------------------------------------------------
60 1.962872 2.203321
- ----------------------------------------------------------------------------------------------
65 1.720583 1.909085
- ----------------------------------------------------------------------------------------------
70 1.531494 1.672354
- ----------------------------------------------------------------------------------------------
75 1.386501 1.480860
- ----------------------------------------------------------------------------------------------
80 1.280475 1.337304
- ----------------------------------------------------------------------------------------------
85 1.201521 1.231035
- ----------------------------------------------------------------------------------------------
90 1.145430 1.156319
- ----------------------------------------------------------------------------------------------
95 1.089164 1.090579
- ----------------------------------------------------------------------------------------------
</TABLE>
Changes In Death Benefit Option. If the Policy was issued with either Death
Benefit Option A or Death Benefit Option B, the death benefit option may be
changed. A request for change must be made to the Company in writing. The
effective date of such a change will be the Monthly Anniversary on or
following the date the Company receives the change request. A change in
death benefit option may have Federal income tax consequences. (See Federal
Tax Matters.)
A Death Benefit Option A Policy may be changed to have Death Benefit Option
B. The Face Amount will be decreased to equal the death benefit less the
Cash Value on the effective date of change. A Death Benefit Option B Policy
may be changed to have Death Benefit Option A. The Face Amount will be
increased to equal the death benefit on the effective date of change. A
Policy issued under Death Benefit Option C may not change to either Death
Benefit Option A or Death Benefit Option B for the entire lifetime of the
Contract. Similarly, a Policy issued under either Death Benefit Option A or
B may not change to Death Benefit Option C for the lifetime of the Policy.
Satisfactory evidence of insurability must be submitted to the Company in
connection with a request for a change from Death Benefit Option A to Death
Benefit Option B. A change may not be made if it would result in a Face
Amount of less than the minimum Face Amount.
A change in death benefit option will not in itself result in an immediate
change in the amount of a Policy's death benefit or Cash Value. In addition,
if, prior to or accompanying a change in the death benefit option, there has
been an increase in the Face Amount, the cost of insurance charge may be
different for the increased amount. (See Monthly Deduction - Cost of
Insurance.)
Change in Face Amount. Subject to certain limitations set forth below, an
Owner may increase or decrease the Face Amount of a Policy once each Policy
Year but not before the first Policy Anniversary. A written request is
required for a change in the Face Amount. A change in Face Amount may affect
the cost of insurance rate and the net amount at risk, both of which affect
an Owner's cost of insurance charge. (See Monthly Deduction - Cost of
Insurance.) A change in the Face Amount of a Policy may have Federal income
tax consequences. (See Federal Tax Matters.)
For an increase in the Face Amount, the Company requires that satisfactory
evidence of insurability be submitted. An application for an increase must
be received by the Company. If approved, the increase will become effective
as of the Monthly Anniversary on or following receipt of the application by
the Company, but not before the first Policy Anniversary. In addition, the
Insured must have an Attained Age of not greater than 80 on the effective
date of the increase. The increase may not be less than $5,000 ($2,000 for
policies issued in qualified pension plans). Although an application for an
increase need not be accompanied by an additional premium, the Cash Surrender
Value in effect immediately after the increase must be sufficient to cover
the next monthly deduction. To the extent the Cash Surrender Value is not
sufficient, an additional premium must be paid. (See Charges and Deductions
- - Monthly Deduction.) An increase in the Face Amount may result in certain
additional charges. (See Charges and Deductions - Monthly Deduction.)
For the Owner's rights upon an increase in Face Amount, see Policy Rights -
Right to Examine Policy. Owners should consult their sales representative
before deciding whether to increase coverage by increasing the Face Amount of
a Policy.
Any decrease in the Face Amount will become effective on the Monthly
Anniversary on or following receipt of the written request by the Company.
The amount of the requested decrease must be at least $5,000 ($2,000 for
policies issued in qualified pension plans) and the Face Amount remaining in
force after any requested decrease may not be less than minimum Face Amount.
If following a decrease in Face Amount, the Policy would not comply with the
maximum premium limitations required by Federal tax law (see Payment and
Allocation of Premiums), the decrease may be
13
<PAGE> 16
limited or Cash Value may be returned to the Owner (at the Owner's election),
to the extent necessary to meet these requirements. Decreases will generally
be applied to prior increases in the Face Amount, if any, in the reverse
order in which such increases occurred, and then to the original Face Amount.
This order of reduction will be used to determine the amount of subsequent
cost of insurance charges (See Monthly Deduction - Cost of Insurance; and
Charges and Deductions - Contingent Deferred Sales Charge.)
Payment of the Death Benefit. The death benefit under the Policy will
ordinarily be paid in a lump sum within seven days after the Company receives
all documentation required for such a payment. Payment may, however, be
postponed in certain circumstances. (See General Matters - Postponement of
Payment from the Separate Account.) The death benefit will be increased by
any unpaid dividends determined prior to the Insured's death, and by the
amount of the monthly cost of insurance for the portion of the month from the
date of death to the end of the month, and reduced by any outstanding
Indebtedness. (See General Matters - Additional Insurance Benefits,
Dividends, and Charges and Deductions.) The Company will pay interest on the
death benefit from the date of the Insured's death to the date of payment.
Interest will be at an annual rate determined by the Company, but will never
be less than the guaranteed rate of 4%. Provisions for settlement of
proceeds other than a lump sum payment may only be made upon written
agreement with the Company.
Cash Value
The Cash Value of the Policy is equal to the total of the amounts credited to
the Owner in the Separate Account, the Loan Account (securing Policy Loans),
and, in certain contracts, the General Account. The Policy's Cash Value in
the Separate Account will reflect the investment performance of the chosen
Divisions of the Separate Account as measured by each Division's Net
Investment Factor (defined below), the frequency and amount of Net Premiums
paid, transfers, partial withdrawals, loans and the charges assessed in
connection with the Policy. An Owner may at any time surrender the Policy
and receive the Policy's Cash Surrender Value. (See Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender.) The Policy's Cash
Value in the Separate Account equals the sum of the Policy's Cash Values in
each Division. There is no guaranteed minimum Cash Value.
Determination of Cash Value. For each Division of the Separate Account, the
Cash Value is determined on each Valuation Date. On the Investment Start
Date, the Cash Value in a Division will equal the portion of any Net Premium
allocated to the Division, reduced by the portion allocated to that Division
of the monthly deduction(s) due from the Issue Date through the Investment
Start Date. (See Payment and Allocation of Premiums.) Thereafter, on each
Valuation Date, the Cash Value in a Division of the Separate Account will
equal:
(1) The Cash Value in the Division on the preceding Valuation Date,
multiplied by the Division's Net Investment Factor (defined
below) for the current Valuation Period; plus
(2) Any Net Premium payments received during the current Valuation
Period which are allocated to the Division; plus
(3) Any loan repayments allocated to the Division during the current
Valuation Period; plus
(4) Any amounts transferred to the Division from the General Account
or from another Division during the current Valuation Period; plus
(5) That portion of the interest credited on outstanding loans which
is allocated to the Division during the current Valuation Period; minus
(6) Any amounts transferred from the Division to the General Account,
Loan Account, or to another Division during the current Valuation
Period (including any transfer charges); minus
(7) Any partial withdrawals from the Division during the current
Valuation Period; minus
(8) Any withdrawal due to a Pro-Rata Surrender from the Division
during the current Valuation Period; minus
(9) Any withdrawal or surrender charges incurred during the current
Valuation Period attributed to the Division in connection with a
partial withdrawal or Pro-Rata Surrender; minus
(10) If a Monthly Anniversary occurs during the current Valuation
Period, the portion of the monthly deduction allocated to the Division
during the current Valuation Period to cover the Policy Month which
starts during that Valuation Period (See Charges and Deductions.); plus
(11) If a Policy Anniversary occurs during the current Valuation
Period, the portion of the dividend paid, if any, allocated to the
Division.
14
<PAGE> 17
Net Investment Factor: The Net Investment Factor measures the investment
performance of a Division during a Valuation Period. The Net Investment
Factor for each Division for a Valuation period is calculated as follows:
(1) The value of the assets at the end of the preceding Valuation
Period; plus
(2) The investment income and capital gains, realized or unrealized,
credited to the assets in the Valuation Period for which the Net
Investment Factor is being determined; minus
(3) The capital losses, realized or unrealized, charged against those
assets during the Valuation Period; minus
(4) Any amount charged against each Division for taxes, including any
tax or other economic burden resulting from the application of the tax
laws determined by the Company to be properly attributable to the
Divisions of the Separate Account, or any amount set aside during the
Valuation Period as a reserve for taxes attributable to the operation
or maintenance of each Division; minus
(5) A charge equal to a percentage of the average net assets for each
day in the Valuation Period. This charge, for mortality and expense
risks, is determined by the length of time the policy has been in
force. It will not exceed the amounts shown in the following table:
<TABLE>
<CAPTION>
Policy Percentage of Effective
Years Avg. Net Assets Annual Rate
<S> <C> <C>
1-10 0.0015027 0.55%
11-20 0.0012301 0.45%
21+ 0.0009572 0.35%;
divided by
</TABLE>
(6) The value of the assets at the end of the preceding Valuation
Period.
POLICY RIGHTS
Loans
Loan Privileges. The Owner may, by written request to General American,
borrow an amount up to the Loan Value of the Policy, with the Policy serving
as sole security for such loan. A loan taken from, or secured by, a Policy
may have Federal income tax consequences. (See Federal Tax Matters.)
The Loan Value is the Cash Value of the Policy on the date the loan request
is received, less interest to the next loan interest due date, less
anticipated monthly deductions to the next loan interest due date, less any
existing loan, less any surrender charge, plus interest expected to be earned
on the loan balance to the next loan interest due date. Policy Loan interest
is payable on each Policy Anniversary.
The minimum amount that may be borrowed is $500. The loan may be completely
or partially repaid at any time while the Insured is living. Any amount due
to an Owner under a Policy Loan ordinarily will be paid within seven days
after General American receives the loan request at its Home Office, although
payments may be postponed under certain circumstances. (See General
Matters-Postponement of Payments from the Separate Account.)
When a Policy Loan is made, Cash Value equal to the amount of the loan plus
interest due will be transferred to the Loan Account as security for the
loan. A Loan Subaccount exists within the Loan Account for the General
Account and each Division of the Separate Account. Amounts transferred to
the Loan Account to secure Indebtedness are allocated to the appropriate Loan
Subaccount to reflect its origin. Unless the Owner requests a different
allocation, amounts will be transferred from the Divisions of the Separate
Account and the General Account in the same proportion that the Policy's Cash
Value in each Division and the General Account, if any, bears to the Policy's
total Cash Value, less the Cash Value in the Loan Account, at the end of the
Valuation Period during which the request for a Policy Loan is received.
This will reduce the Policy's Cash Value in the General Account and Separate
Account. These transactions will not be considered transfers for purposes of
the limitations on transfers between Divisions or to or from the General
Account.
Cash Value in the Loan Account is expected to earn interest at a rate ("the
earnings rate") which is lower than the rate charged on the Policy Loan ("the
borrowing rate"). Cash Value in the Loan Account will accrue interest daily
at an annual earnings rate of 4%.
Interest credited on the Cash Value held in the Loan Account will be
allocated on Policy Anniversaries to the General Account and the Divisions of
the Separate Account in the same proportion that the Cash Value in each Loan
Subaccount bears to the Cash Value in the Loan Account. The interest
credited will also be transferred: (1) when a new loan is made; (2) when a
loan is partially or fully repaid; and (3) when an amount is needed to meet a
monthly deduction.
Interest Charged. The borrowing rate we charge for Policy Loan interest will
be based on the following schedule:
15
<PAGE> 18
<TABLE>
<CAPTION>
For Loans Annual
Outstanding During Interest Rate
<S> <C>
Policy Years 1-10 4.50%
Policy Years 11-20 4.25%
Policy Years 21+ 4.15%
</TABLE>
General American will inform the Owner of the current borrowing rate when a
Policy Loan is requested.
Policy Loan interest is due and payable annually on each Policy Anniversary.
If the Owner does not pay the interest when it is due, the unpaid loan
interest will be added to the outstanding Indebtedness as of the due date and
will be charged interest at the same rate as the rest of the Indebtedness.
(See Effect of Policy Loans below.) The amount of Policy Loan interest which
is transferred to the Loan Account will be deducted from the Divisions of the
Separate Account and from the General Account in the same proportion that the
portion of the Cash Value in each Division and in the General Account,
respectively, bears to the total Cash Value of the Policy minus the Cash
Value in the Loan Account.
Effect of Policy Loans. Whether or not a Policy Loan is repaid, it will
permanently affect the Cash Value of a Policy, and may permanently affect the
amount of the death benefit. The collateral for the loan (the amount held in
the Loan Account) does not participate in the performance of the Separate
Account while the loan is outstanding. If the Loan Account earnings rate is
less than the investment performance of the selected Division(s), the Cash
Value of the Policy will be lower as a result of the Policy Loan.
Conversely, if the Loan Account earnings rate is higher than the investment
performance of the Division(s), the Cash Value may be higher.
In addition, if the Indebtedness (See Definitions) exceeds the Cash Value
minus the surrender charge on any Monthly Anniversary, the Policy will lapse,
subject to a grace period. (See Payment and Allocation of Premiums - Policy
Lapse and Reinstatement.) A sufficient payment must be made within the later
of the grace period of 62 days from the Monthly Anniversary immediately
before the date Indebtedness exceeds the Cash Value less any surrender
charges, or 31 days after notice that a Policy will terminate unless a
sufficient payment has been mailed, or the Policy will lapse and terminate
without value. A lapsed Policy, however, may later be reinstated subject to
certain limitations. (See Payment and Allocation of Premiums - Policy Lapse
and Reinstatement.)
Any outstanding Indebtedness will be deducted from the proceeds payable upon
the death of the Insured or the surrender of the Policy. Upon a complete
surrender or lapse of any Policy, if the amount received plus the amount of
outstanding Indebtedness exceeds the total investment in the Policy, the
excess will generally be treated as ordinary income subject to tax. (See
Federal Tax Matters.)
Repayment of Indebtedness. A Policy Loan may be repaid in whole or in part
at any time prior to the death of the Insured and as long as a Policy is in
force. When a loan repayment is made, an amount securing the Indebtedness in
the Loan Account equal to the loan repayment will be transferred to the
Divisions of the Separate Account and the General Account in the same
proportion that the Cash Value in each Loan Subaccount bears to Cash Value in
the Loan Account. Amounts paid while a Policy Loan is outstanding will be
treated as premiums unless the Owner requests in writing that they be treated
as repayment of Indebtedness.
Surrender, Partial Withdrawals and Pro-Rata Surrender
At any time during the lifetime of the Insured and while a Policy is in
force, the Owner may surrender the Policy by sending a written request to the
Company. After the first Policy Year, an Owner may make a partial withdrawal
by sending a written request to the Company. 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 the Company's Home Office.
Amounts payable from the Separate Account upon surrender, partial withdrawal,
or a Pro-Rata Surrender will ordinarily be paid within seven days of receipt
of the written request. (See General Matters - Postponement of Payments from
the Separate Account.)
Surrenders. To effect a surrender, either the Policy itself must be returned
to the Company along with the request, or the request must be accompanied by
a completed affidavit of loss, which is available from the Company. Upon
surrender, the Company will pay the Cash Surrender Value plus any unpaid
dividends determined prior to surrender (See Dividends) to the Owner in a
single sum. The Cash Surrender Value equals the Cash Value on the date of
surrender, less any Indebtedness, and less any surrender charge. (See
Charges and Deductions - Contingent Deferred Sales Charge.) The Company will
determine the Cash Surrender Value as of the date that an Owner's written
request is received at the Company's Home Office. If the request is received
on a Monthly Anniversary, the monthly deduction otherwise deductible will be
included in the amount paid. Coverage under a Policy will terminate as of
the date of surrender. The Insured must be living at the time of a
surrender. A surrender may have
16
<PAGE> 19
Federal income tax consequences. (See Federal Tax Matters.)
Partial Withdrawals. After the first Policy Year, an Owner may make partial
withdrawals from the Policy's Cash Surrender Value. There is no transaction
charge for the first twelve partial withdrawals or requested transfers in a
Policy Year. General American will impose a charge of $25 for each partial
withdrawal or requested transfer in excess of twelve in a Policy Year. A
partial withdrawal may have Federal income tax consequences. (See Federal Tax
Matters.)
The minimum amount of a partial withdrawal request, net of any applicable
surrender charges, is the lesser of a) $500 from a Division of the Separate
Account, or b) the Policy's Cash Value in a Division. (See Charges and
Deductions - Contingent Deferred Sales Charge.) Partial withdrawals made
during a Policy Year may not exceed the following limits. The maximum amount
that may be withdrawn from a Division of the Separate Account is the Policy's
Cash Value net of any applicable surrender charges in that Division. The
total partial withdrawals and transfers from the General Account over the
Policy Year may not exceed a maximum amount equal to the greatest of the
following: (1) 25% of the Cash Surrender Value in the General Account at the
beginning of the Policy Year, multiplied by the withdrawal percentage limit
shown in the policy, or (2) the previous Policy Year's maximum amount.
The Owner may allocate the amount withdrawn plus any applicable surrender
charge, subject to the above conditions, among the Divisions of the Separate
Account and the General Account. If no allocation is specified, then the
partial withdrawal will be allocated among the Divisions of the Separate
Account and the General Account in the same proportion that the Policy's Cash
Value in each Division and the General Account bears to the total Cash Value
of the Policy, less the Cash Value in the Loan Account, on the date the
request for the partial withdrawal is received. If the limitations on
withdrawals from the General Account will not permit this proportionate
allocation, the Owner will be requested to provide an alternate allocation.
(See The General Account.)
No amount may be withdrawn that would result in there being insufficient Cash
Value to meet any surrender charge that would be payable immediately
following the withdrawal upon the surrender of the remaining Cash Value.
The death benefit will be affected by a partial withdrawal, unless Death
Benefit Option A or Option C is in effect and the withdrawal is made under
the terms of an anniversary partial withdrawal rider. (See General Matters -
Additional Insurance Benefits.) If Death Benefit Option A or Death Benefit
Option C is in effect and the death benefit equals the Face Amount, then a
partial withdrawal will decrease the Face Amount by an amount equal to the
partial withdrawal plus the applicable surrender charge resulting from that
partial withdrawal. If the death benefit is based on a percentage of the
Cash Value, then a partial withdrawal will decrease the Face Amount by an
amount by which the partial withdrawal plus the applicable surrender charge
exceeds the difference between the death benefit and the Face Amount. If
Death Option B is in effect, the Face Amount will not change.
The Face Amount remaining in force after a partial withdrawal may not be less
than the minimum Face Amount. Any request for a partial withdrawal that
would reduce the Face Amount below this amount will not be implemented.
Partial withdrawals may affect the way in which the cost of insurance charge
is calculated and the amount of pure insurance protection afforded under a
Policy. (See Monthly Deduction - Cost of Insurance.) Partial withdrawals
will be applied first to reduce the initial Face Amount and then to each
increase in Face Amount in order, starting with the first increase. The
Company may change the minimum amount required for a partial withdrawal or
the number of times partial withdrawals may be made.
Pro-Rata Surrender. After the first Policy Year, an Owner can make a
Pro-Rata Surrender of the Policy. The Pro-Rata Surrender will reduce the
Face Amount and the Cash Value by a percentage chosen by the Owner. This
percentage must be any whole number. A Pro-Rata Surrender may have Federal
income tax consequences. (See Federal Tax Matters.) The percentage will be
applied to the Face Amount and the Cash Value on the Monthly Anniversary on
or following our receipt of the request.
The Owner may allocate the amount of decrease in Cash Value plus any
applicable surrender charge among the Divisions of the Separate Account and
the General Account. (See Charges and Deductions - Contingent Deferred Sales
Charge.) If no allocation is specified, then the decrease in Cash Value and
any applicable surrender charge will be allocated among the Divisions of the
Separate Account and the General Account in the same proportion that the
Policy's Cash Value in each Division and the General Account bears to the
total Cash Value of the Policy, less the Cash Value in the Loan Account, on
the date the request for Pro-Rata Surrender is received.
A Pro-Rata Surrender can not be processed if it will reduce the Face Amount
below the minimum Face Amount of the Policy. No Pro-Rata Surrender will be
processed for more Cash Surrender Value than is
17
<PAGE> 20
available on the date of the Pro-Rata Surrender. A cash payment will be made
to the Owner for the amount of Cash Value reduction less any applicable
surrender charges.
Pro-Rata Surrenders may affect the way in which the cost of insurance charge
is calculated and the amount of the pure insurance protection afforded under
the Policy. (See Monthly Deduction - Cost of Insurance.) Pro-Rata Surrenders
will be applied to prior increases in the Face Amount, if any, in the reverse
order in which such increases occurred, and then to the original Face Amount.
Charges on Surrender, Partial Withdrawals and Pro-Rata Surrender. If a
Policy is surrendered within the first ten Policy Years, the Contingent
Deferred Sales Charge will apply. (See Contingent Deferred Sales Charge.)
A partial withdrawal or Pro-Rata Surrender may also result in a Contingent
Deferred Sales Charge. The amount of the charge assessed is a portion of the
Contingent Deferred Sales Charge that would be deducted upon surrender or
lapse. Charges are described in more detail under Charges and Deductions -
Contingent Deferred Sales Charge.
While partial withdrawals and Pro-Rata Surrenders are each methods of
reducing a Policy's Cash Value, a Pro-Rata Surrender differs from a partial
withdrawal in that a partial withdrawal does not typically have a
proportionate effect on a Policy's death benefit by reducing the Policy's
Face Amount, while a Pro-Rata Surrender does. Assuming that a Policy's death
benefit is not a percentage of the Policy's Cash Value, a Pro-Rata Surrender
will reduce the Policy's death benefit in the same proportion that the
Policy's Cash Value is reduced, while a partial withdrawal will reduce the
death benefit by one dollar for each dollar of Cash Value withdrawn. Partial
Withdrawals and Pro-Rata Surrenders will also result in there being different
cost of insurance charges subsequently deducted. (See Monthly Deduction -
Cost of Insurance; Surrender, Partial Withdrawals and Pro-Rata Surrender -
Partial Withdrawals; and Surrenders, Partial Withdrawals, and Pro-Rata
Surrenders-Pro-Rata Surrender.)
Transfers
Under General American's current practices, a Policy's Cash Value, except
amounts credited to the Loan Account, may be transferred among the Divisions
of the Separate Account and for certain contracts, between the General
Account and the Divisions. Transfers to and from the General Account are
subject to restrictions (See The General Account). Requests for transfers
from or among Divisions of the Separate Account may be made in writing or by
telephone. Transfers from or among the Divisions of the Separate Account
must be in amounts of at least $500 or, if smaller, the Policy's Cash Value
in a Division. The first twelve requested transfers or partial withdrawals
per policy year will be allowed free of charge. Thereafter, the Company will
impose a charge of $25 for each requested transfer or partial withdrawal.
General American ordinarily will make transfers and determine all values in
connection with transfers as of the end of the Valuation Period during which
the transfer request is received.
All requests received on the same Valuation Date will be considered a single
transfer request. Each transfer must meet the minimum requirement of $500 or
the entire Cash Value in a Division, whichever is smaller. Where a single
transfer request calls for more than one transfer, and not all of the
transfers would meet the minimum requirements, General American will make
those transfers that do meet the requirements. Transfers resulting from
Policy Loans will not be counted for purposes of the limitations on the
amount or frequency of transfers allowed in each Policy Month or Policy Year.
Although General American currently intends to continue to permit transfers
for the foreseeable future, the Policy provides that General American may at
any time revoke, modify, or limit the transfer privilege, including the
minimum amount transferable, the maximum General Account allocation percent,
and the frequency of such transfers.
Portfolio Rebalancing
Over time, the funds in the General Account and the Divisions of the Separate
Account will accumulate at different rates as a result of different
investment returns. The Owner may direct that from time to time we
automatically restore the balance of the Cash Value in the General Account
and in the Divisions of the Separate Account to the percentages determined in
advance. There are two methods of rebalancing available - periodic and
variance.
Periodic Rebalancing. Under this option the Owner elects a frequency
(monthly, quarterly, semiannually or annually), measured from the Policy
Anniversary. On each date elected, we will rebalance the funds by generating
transfers to reallocate the funds according to the investment percentages
elected.
Variance Rebalancing. Under this option the Owner elects a specific
allocation percentage for the General Account and each Division of the
Separate Account. For each such account, the allocation percentage (if not
zero) must be a whole percentage and must not be less than five percent (5%).
The
18
<PAGE> 21
Owner also elects a maximum variance percentage (5%, 10%, 15%, or 20% only),
and can exclude specific funds from being rebalanced. On each Monthly
Anniversary we will review the current fund balances to determine whether any
fund balance is outside of the variance range (either above or below) as a
percentage of the specified allocation percentage for that fund. If any fund
is outside of the variance range, we will generate transfers to rebalance all
of the specified funds back to the predetermined percentages.
Owners should consider that portfolio rebalancing entails the transfer of
Cash Value from better performing portfolios to lesser performing portfolios.
Transfers resulting from portfolio rebalancing will not be counted against
the total number of transfers allowed in a Policy Year before a charge is
applied.
The Owner may elect either form of portfolio rebalancing by specifying it on
the policy application, or may elect it later for an in-force Policy, or may
cancel it, by submitting a change form acceptable to General American under
its administrative rules.
Only one form of portfolio rebalancing may be elected at any one time, and
portfolio rebalancing may not be used in conjunction with dollar cost
averaging (see below).
General American reserves the right to suspend portfolio rebalancing at any
time on any class of Policies on a nondiscriminatory basis, or to charge an
administrative fee for election changes in excess of a specified number in a
Policy Year in accordance with its administrative rules.
Dollar Cost Averaging
The Owner may direct the Company to transfer amounts on a monthly basis from
the Money Market Fund to any other Division of the Separate Account. This
service is intended to allow the Owner to utilize "dollar cost averaging"
("DCA"), a long-term investment technique which provides for regular, level
investments over time. The Company makes no guarantee that DCA will result
in a profit or protect against loss.
The following rules and restrictions apply to DCA transfers:
(1) The minimum DCA transfer amount is $100.
(2) A written election of the DCA service, on a form provided by the
Company, must be completed by the Owner and on file with the Company in
order to begin DCA transfers.
(3) In the written election of the DCA service, the Owner indicates
how DCA transfers are to be allocated among the Divisions of the
Separate Account. For any Division chosen to receive DCA transfers,
the minimum percentage that may be allocated to a Division is 5% of the
DCA transfer amount, and fractional percentages may not be used.
(4) DCA transfers can only be made from the Money Market Fund, and DCA
transfers will not be allowed to the General Account.
(5) The DCA transfers will not count against the Policy's normal
transfer restrictions. (See Policy Rights -- Transfers.)
(6) The DCA transfer percentages may differ from the allocation
percentages the Owner specifies for the allocation of Net Premiums.
(See Payment and Allocation of Premiums -- Allocation of Net Premiums
and Cash Values.)
(7) Once elected, DCA transfers from the Money Market Fund will be
processed monthly until either the value in the Money Market Fund is
completely depleted or the Owner instructs the Company in writing to
cancel the DCA service.
(8) Transfers as a result of a Policy Loan or repayment, or in
exercise of the conversion privilege, are not subject to the DCA rules
and restrictions. The DCA service terminates at the time the
conversion privilege is exercised, when any outstanding amount in any
Division of the Separate Account is immediately transferred to the
General Account. (See Policy Rights - Loans, and Policy Rights -
Conversion Privilege.)
(9) DCA transfers will not be made until the Right to Examine Policy
period has expired (See Policy Rights - Right to Examine Policy).
The Company reserves the right to assess a processing fee for the DCA
service. The Company reserves the right to discontinue offering DCA upon 30
days' written notice to Owners. However, any such discontinuation will not
affect DCA services already commenced. The Company reserves the right to
impose a minimum total Cash Value, less outstanding Indebtedness, in order to
qualify for DCA service. Also, the Company reserves the right to change the
minimum necessary Cash Value and the minimum required DCA transfer amount.
Transfers made under Dollar Cost Averaging do not count against the total of
twelve requested transfers
19
<PAGE> 22
or partial withdrawals allowed without charge in a Policy Year.
Right to Examine Policy
The Owner may cancel a Policy within 20 days after receiving it (30 days if
the Owner is a resident of California and is age 60 or older) or within 45
days after the application was signed, whichever is later. If a Policy is
canceled within this time period, a refund will be paid. Where required by
state law, the refund will equal all premiums paid under the Policy. Where
required by state law, General American will refund an amount equal to the
greater of premiums paid or (1) plus (2) where (1) is the difference between
the premiums paid, including any policy fees or other charges, and the
amounts allocated to the Separate Account under the Policy and (2) is the
value of the amounts allocated to the Separate Account under the Policy on
the date the returned Policy is received by General American or its agent.
To cancel the Policy, the Owner should mail or deliver the Policy to either
General American or the agent who sold it. A refund of premiums paid by
check may be delayed until the Owner's check has cleared the bank upon which
it was drawn. (See General Matters - Postponement of Payments from the
Separate Account.)
A request for an increase in Face Amount (see Policy Benefits - Death
Benefit) may also be canceled. The request for cancellation must be made
within the later of 20 days from the date the Owner received the new Policy
specifications page for the increase, or 45 days after the application for
the increase was signed.
Death Benefit at Attained Age 100
If the Insured is living and the Policy is in force when the Insured reaches
Attained Age 100, the death benefit will be equal to 101% of the Cash Value
of the Policy unless the Lifetime Coverage Rider is in effect. (See
Additional Insurance Benefits.) At that point, no further premium payments
will be required or accepted, and no further monthly deductions will be taken
to cover the cost of insurance.
PAYMENT AND ALLOCATION OF
PREMIUMS
Issuance of a Policy
Individuals wishing to purchase a Policy must complete an application and
submit it to an authorized registered agent of General American or to General
American's Home Office. A Policy will generally be issued to Insureds of
Issue Ages 0 through 85 for regularly underwritten contracts, and to Insureds
of Issue Ages 20 through 70 for Policies issued in qualified pension plans,
for guaranteed issue contracts and, should they become available in the
future, for simplified issue contracts. General American may, in its sole
discretion, issue Policies to individuals falling outside of those Issue
Ages. Acceptance of an application is subject to General American's
underwriting rules and General American reserves the right to reject an
application for any reason.
The Issue Date is determined by General American in accordance with its
standard underwriting procedures for variable life insurance policies. The
Issue Date is used to determine Policy Anniversaries, Policy Years, and
Policy Months. Insurance coverages under a Policy will not take effect until
the Policy has been delivered and the initial premium has been paid prior to
the Insured's death and prior to any change in health as shown in the
application.
Premiums
The initial premium is due on the Issue Date, and may be paid to an
authorized registered agent of General American or to General American at its
Home Office. General American currently requires that the initial premium
for a Policy be at least equal to one-twelfth (1/12) of the Minimum Premium
for the Policy. The Minimum Premium is the amount specified for each Policy
based on the requested initial Face Amount and the charges under the Policy
which vary according to the Issue Age, sex, underwriting risk class, and
smoker status of the Insured. (See Charges and Deductions.) For policies
issued as a result of a term conversion from certain General American term
policies, the Company requires the Owner to pay an initial premium, which
combined with conversion credits given, if any, will equal one full "Minimum
Premium" for the Policy.
Following the initial premium, subject to the limitations described below,
premiums may be paid in any amount and at any interval. Premiums after the
first premium payment must be paid to General American at its Home Office.
An Owner may establish a schedule of planned premiums which will be billed by
the Company at regular intervals. Failure to pay planned premiums, however,
will not itself cause the Policy to lapse. (See Policy Lapse and
Reinstatement.) Premium receipts will be furnished upon request.
An Owner may make unscheduled premium payments at any time in any amount, or
skip planned premium payments, subject to the minimum and maximum premium
limitations described below.
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<PAGE> 23
If a Policy is in the intended Owner's possession but the initial premium has
not been paid, the Policy is not in force. The intended Owner is deemed to
have the Policy for inspection only.
Premium Limitations. Every premium payment must be at least $10. In no
event may the total of all premiums paid in any Policy Year exceed the
current maximum premium limitations for that Policy Year. Maximum premium
limits for the Policy Year will be shown in an Owner's annual report.
In general, for policies issued with Death Benefit Option A or Death Benefit
Option B, the maximum premium limit for a Policy Year is the largest amount
of premium that can be paid in that Policy Year such that the sum of the
premiums paid under the Policy will not at any time exceed the guideline
premium limitations needed to comply with the tax definition of life
insurance. For policies issued with Death Benefit Option C, the company
reserves the right to impose other restrictions upon the amount of premium
that may be paid into the Policy. If at any time a premium is paid which
would result in total premiums exceeding the current maximum premium
limitations, the Company will only accept that portion of the premium which
will make total premiums equal the maximum. Any part of the premium in
excess of that amount will be returned or applied as otherwise agreed, and no
further premiums will be accepted until allowed under the current maximum
premium limitations.
In addition to the foregoing tax definitional limits on premiums, for
purposes of determining whether distributions (including loans) are a return
of income first, the Company monitors the Policy to detect whether the "seven
pay limit" has been exceeded. If the seven pay limit is exceeded, the Policy
becomes a "Modified Endowment". The Company has adopted administrative steps
designed to notify an Owner when it is believed that a premium payment will
cause a Policy to become a modified endowment contract. The Owner will be
given a limited amount of time to request that the premium be reversed in
order to avoid the Policy's being classified as a modified endowment
contract. (See Federal Tax Matters.)
If the Company receives a premium payment which would cause the death benefit
to increase by an amount that exceeds the Net Premium portion of the payment,
then the Company reserves the right to (1) refuse that premium payment, or
(2) require additional evidence of insurability before it accepts the
premium.
Allocation of Net Premiums and Cash Value
Allocation of Net Premiums. In the application for a Policy, the Owner
indicates how Net Premiums are to be allocated among the Divisions of the
Separate Account, to the General Account (if available), or both. For each
Division chosen, the minimum percentage that may be allocated to a Division
is 5% of the Net Premium, and fractional percentages may not be used.
Certain other restrictions apply to allocations made to the General Account
(see General Account). For policies issued with an allowable percentage to
the General Account of more than 5%, the minimum percentage is 5%, and
fractional percentages may not be used.
The allocation for future Net Premiums may be changed without charge at any
time by providing notice to the Company. Any change in allocation will take
effect immediately upon receipt by the Company of written notice. No charge
is imposed for changing the allocations of future premiums. The initial
allocation will be shown on the application which is attached to the Policy.
The Company may at any time modify the maximum percentage of future Net
Premiums that may be allocated to the General Account.
During the period from the Issue Date to the end of the Right to Examine
Policy Period (See Policy Rights - Right to Examine Policy), Net Premiums
will automatically be allocated to the Division that invests in the Money
Market Fund of Capital Company. When this period expires, the Policy's Cash
Value in that Division will be transferred to the Divisions of the Separate
Account and to the General Account (if available) in accordance with the
allocation requested in the application for the Policy, or any allocation
instructions received subsequent to receipt of the application. Net Premiums
received after the Right to Examine Policy Period will be allocated according
to the allocation instructions most recently received by the Company unless
otherwise instructed for that particular premium receipt.
The Policy's Cash Value may also be transferred between Divisions of the
Separate Account, and, if the General Account is available under the Policy,
between those Divisions and the General Account. (See Policy Rights -
Transfers.)
The value of amounts allocated to Divisions of the Separate Account will vary
with the investment performance of the chosen Divisions and the Owner bears
the entire investment risk. This will affect the Policy's Cash Value, and
may affect the death benefit as well. Owners should periodically review
their allocations of Net Premiums and the Policy's Cash Value in light of
market conditions and their overall financial planning requirements.
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<PAGE> 24
Policy Lapse and Reinstatement
Lapse. Unlike conventional whole life insurance policies, the failure to
make a premium payment following the initial premium will not itself cause a
Policy to lapse. If, during the first five Policy Years, the sum of all
premiums paid on the Policy, reduced by any partial withdrawals and any
outstanding loan balance, is greater than or equal to the sum of the No Lapse
Monthly Premiums for the elapsed months since the Issue Date, the Policy will
not lapse as a result of the Cash Value less any loans, loan interest due,
and any surrender charge being insufficient to pay the monthly deduction.
Lapse will occur (except as described above) when the Cash Surrender Value is
insufficient to cover the monthly deduction, and a grace period expires
without a sufficient payment being made.
The grace period, which is 62 days, begins on the Monthly Anniversary on
which the Cash Surrender Value becomes insufficient to meet the next monthly
deduction. The Company will notify the Owner at the beginning of the grace
period by mail addressed to the last known address on file with the Company.
The notice to the Owner will indicate the amount of additional premium that
must be paid. The amount of the premium required to keep the Policy in force
will be the amount to cover the outstanding monthly deductions and premium
expense charges. (See Charges and Deductions - Monthly Deduction.) If the
Company does not receive the required amount within the grace period, the
Policy will lapse and terminate without Cash Value.
If the Insured dies during the grace period, any overdue monthly deductions
will be deducted from the death benefit otherwise payable.
Reinstatement. The Owner may reinstate a lapsed Policy by written
application any time within five years after the date of lapse and before the
Insured's Attained Age 100. Reinstatement is subject to the following
conditions:
1. Evidence of the insurability of the Insured satisfactory to the
Company (including evidence of insurability of any person covered by a
rider to reinstate the rider).
2. Payment of a premium that, after the deduction of premium expense
charges, is large enough to cover: (a) the monthly deductions due at
the time of lapse, and (b) two times the monthly deduction due at the
time of reinstatement.
3. Payment or reinstatement of any Indebtedness. Any Indebtedness
reinstated will cause Cash Value of an equal amount also to be
reinstated. Any loan interest due and unpaid on the Policy Anniversary
prior to reinstatement must be repaid at the time of reinstatement.
Any loan paid at the time of reinstatement will cause an increase in
Cash Value equal to the amount to be reinstated.
The Policy cannot be reinstated if it has been surrendered.
The amount of Cash Value on the date of reinstatement will be equal to the
amount of any Policy Loan reinstated, increased by the Net Premiums paid at
reinstatement, any Policy Loan paid at the time of reinstatement, and the
amount of any surrender charge paid at the time of lapse.
The Insured must be alive on the date the Company approves the application
for reinstatement. If the Insured is not then alive, such approval is void
and of no effect.
The effective date of reinstatement will be the date the Company approves the
application for reinstatement. There will be a full monthly deduction for
the Policy Month which includes that date. (See Charges and
Deductions-Monthly Deduction.)
The surrender charge in effect at the time of reinstatement will equal the
surrender charge in effect at the time of lapse.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate the
Company for providing the insurance benefits set forth in the Policy and any
additional benefits added by rider, administering the Policies, incurring
expenses in distributing the Policies, and assuming certain risks in
connection with the Policy.
Premium Expense Charges
Prior to allocation of Net Premiums, premium payments will be reduced by
premium expense charges consisting of a sales charge and a charge for premium
taxes. The premium payment less the premium expense charge equals the Net
Premium.
Sales Charge. A sales charge will be deducted from each premium payment to
partially compensate the Company for expenses incurred in distributing the
Policy and any additional benefits provided by riders. The Company currently
intends to deduct a sales charge determined according to the following
schedule:
22
<PAGE> 25
<TABLE>
<S> <C>
Policy Year 1 15% of premium up to Target
5% of premium above Target
Policy Years 2-10 5% of all premium paid
Policy Years 11+ 2% of all premium paid
</TABLE>
For policies issued in the state of Oregon, the amounts shown above are
increased by 2%. Consistent with the requirements of the Texas non-forfeiture
laws, the guaranteed sales charge varies for policies issued in Texas. As of
the date of this prospectus, the current sales charge for Texas policies is
the same as shown above.
The expenses covered by the sales charge include agent sales commissions, the
cost of printing Prospectuses and sales literature, and any advertising
costs. Where Policies are issued to Insureds with higher mortality risks or
to Insureds who have selected additional insurance benefits, a portion of the
amount deducted for sales charge is used to pay distribution expenses and
other costs associated with these additional coverages. No increase in this
sales charge will occur that would result in an increase in the sales charge
percentage deducted in any previous Policy year.
A Contingent Deferred Sales Charge is also imposed under certain
circumstances for expenses incurred in distributing the Policies. That
charge is discussed below.
To the extent that sales expenses are not recovered from the sales charge and
the surrender charge, those expenses may be recovered from other sources,
including the mortality and expense risk charge described below.
Premium Taxes. Various states or other governing jurisdictions and their
subdivisions impose a tax on premiums received by insurance companies.
Premium taxes vary by jurisdiction. A deduction equal to the amount of the
actual premium tax (if any) is taken from each premium payment for these
taxes. The deduction allows the Company to pass through the amount of the
taxes imposed on the policy by the state or other governing jurisdiction and
any subdivisions thereof. State premium taxes currently range from 0% to
3.5% (4% in Puerto Rico), with an average of approximately 2.1%.
Federal Tax Charge. This charge is designed to pass through the equivalent
of the federal tax consequences applicable to the policy. The charge is
currently 1.3% of premium paid, and is guaranteed not to increase except to
the extent of any increases in the federal tax
Monthly Deduction
Charges will be deducted monthly from the Cash Value of each Policy ("the
monthly deduction") to compensate the Company for (a) certain administrative
costs; (b) the cost of insurance; and (c) the cost of optional benefits added
by rider. The monthly deduction will be taken on the Investment Start Date
and on each Monthly Anniversary. It will be allocated among the General
Account and each Division of the Separate Account in the same proportion that
a Policy's Cash Value in the General Account and the Policy's Cash Value in
each Division bear to the total Cash Value of the Policy, less the Cash Value
in the Loan Account, on the date the deduction is taken. Because portions of
the monthly deduction, such as the cost of insurance, can vary from month to
month, the monthly deduction itself can vary in amount from month to month.
Selection and Issue Expense Charge. During the first ten Policy Years, and
during the first ten Policy Years following an increase in Face Amount, the
Company generally assesses a monthly charge to cover the costs associated
with the underwriting and issue of the policy or the increase. The monthly
charge per $1,000 of face amount ranges from approximately 4 cents to 65
cents, and varies by issue age, risk class, and (except on unisex Policies)
sex of the Insured. The duration of the guaranteed charges varies for
policies issued in Texas to ensure compliance with the Texas non-forfeiture
laws. On a current basis, as of the date of this prospectus, the duration is
the same as described above.
Monthly Administrative Charge. The Company has responsibility for the
administration of the Policies and the Separate Account. Administrative
expenses include premium billing and collection, record keeping, processing
death benefit claims, cash surrenders, partial withdrawals, Policy changes,
and reporting and overhead costs, processing applications, and establishing
Policy records. As reimbursement for administrative expenses related to the
maintenance of each Policy and the Separate Account, the Company assesses a
monthly administration charge from each Policy. This charge is generally $25
per month in the first Policy Year, and $6 per month for all Policy Years
thereafter, and is guaranteed not to increase while the Policy is in force.
The Company may administer the Policy itself, or may purchase administrative
services from such sources (including affiliates) as may be available. Such
services will be acquired on a basis which, in the Company's sole discretion,
affords the best services at the lowest cost. The Company reserves the right
to select a company to provide services which the Company deems, in its sole
discretion, is the best able to perform such services in a satisfactory
manner even though the costs for such services may be higher than would
prevail elsewhere.
Cost of Insurance. The cost of insurance is deducted on each Monthly
Anniversary for the following
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<PAGE> 26
Policy Month. Because the cost of insurance depends upon a number of
variables, the cost will vary for each Policy Month. The cost of insurance
is determined separately for the initial Face Amount and for any subsequent
increases in Face Amount. The Company will determine the cost of insurance
charge by multiplying the applicable cost of insurance rate or rates by the
net amount at risk (defined below) for each Policy Month.
The cost of insurance rates are determined at the beginning of each Policy
Year for the initial Face Amount and each increase in Face Amount. The rates
will be based on the Attained Age, duration, rate class, and (except for
unisex Policies) sex of the Insured at issue or the date of an increase in
Face Amount. (See Unisex Requirements Under Montana Law.) The cost of
insurance rates generally increase as the Insured's Attained Age increases.
The rate class of an Insured also will affect the cost of insurance rate.
For the initial Face Amount, the Company will use the rate class on the Issue
Date. For each increase in Face Amount, other than one caused by a change in
the death benefit option, the Company will use the rate class applicable to
that increase. If the death benefit equals a percentage of Cash Value, an
increase in Cash Value will cause an automatic increase in the death benefit.
The rate class for such increase will be the same as that used for the most
recent increase that required proof of insurability.
The Company currently places Insureds into a preferred rate class, a standard
rate class, or into rate classes involving a higher mortality risk. The
degree of underwriting imposed may vary from full underwriting, to simplified
issue underwriting, to guaranteed issue underwriting.
Actual cost of insurance rates may change, and the actual monthly cost of
insurance rates will be determined by the Company based on its expectations
as to future mortality experience. However, the actual cost of insurance
rates will not be greater than the guaranteed cost of insurance rates set
forth in the Policy. For fully underwritten, guaranteed issue and simplified
issue Policies which are not in a substandard risk class, the guaranteed cost
of insurance rates are equal to 100% of the rates set forth in the
male/female smoker/non-smoker 1980 CSO Mortality Tables (1980 CSO Tables NA
and SA and 1980 CSO Tables NG and SG for sex distinct; 1980 CSO Tables NB and
SB for unisex policies issued in qualified pension plans; 1980 CSO Tables NA
and SA for unisex policies issued in compliance with Montana law), for the
age nearest birthday. Higher rates apply if the Insured is determined to be
in a substandard risk class.
In two otherwise identical Policies, an Insured in the preferred rate class
will have a lower cost of insurance than an Insured in a rate class involving
higher mortality risk. Each rate class is also divided into two categories:
smokers and nonsmokers. Nonsmoker Insureds will generally incur a lower cost
of insurance than similarly situated Insureds who smoke. (Insureds under
Attained Age 20 are automatically assigned to the non-smoker rate class.)
Policies issued with simplified underwriting or guaranteed issue will in
general incur a higher cost of insurance than fully underwritten Policies.
Guaranteed issue Policies will in general incur the highest current or actual
cost of insurance rates.
The net amount at risk for a Policy Month is (a) the death benefit at the
beginning of the Policy Month divided by 1.0032737 (which reduces the net
amount at risk, solely for purposes of computing the cost of insurance, by
taking into account assumed monthly earnings at an annual rate of 4%), less
(b) the Cash Value at the beginning of the Policy Month. If there is an
increase in the Face Amount, a net amount at risk will be calculated
separately for the initial Face Amount and for each increase in Face Amount.
If Death Benefit Option A or Death Option C is in effect, for purposes of
determining the net amounts at risk for the initial Face Amount and for each
increase in Face Amount, Cash Value will first be considered a part of the
initial Face Amount. If the Cash Value is greater than the initial Face
Amount, the excess Cash Value will then be considered a part of each increase
in order, starting with the first increase. If Death Benefit Option B is in
effect, the net amount at risk will be determined separately for the initial
Face Amount and for each increase in Face Amount. In calculating the cost of
insurance charges, the cost of insurance rate for a Face Amount is applied to
the net amount at risk for that Face Amount.
Additional Insurance Benefits. The monthly deduction will include charges
for any additional benefits provided by rider. (See General Matters -
Additional Insurance Benefits.)
Contingent Deferred Sales Charge ("CDSC")
For a period of up to ten years after the Issue Date, and for a period of up
to ten years following an increase in the Face Amount, the Company will
impose a CDSC upon surrender or lapse of the Policy, upon a partial
withdrawal, or upon a Pro-Rata Surrender. The amount of the charge assessed
will depend upon a number of factors, including the type of event (a full
surrender, lapse, or partial withdrawal), the amount of any premium payments
made under the Policy prior to the event, and the number of Policy Years
having elapsed since the Policy was issued.
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<PAGE> 27
The Contingent Deferred Sales Charge compensates the Company for expenses
relating to the distribution of the Policy, including agents' commissions,
advertising, and the printing of the Prospectus and sales literature.
Calculation of Charge. If a Policy is surrendered, the charge will not
exceed the Contingent Deferred Sales Charge Percentage multiplied by the
annual Target Premium attributable to the base policy or to the increase in
Face Amount.
The Contingent Deferred Sales Charge Percentage is shown in the following
table.
<TABLE>
Contingent Deferred Sales Charge
Percentage Table
<CAPTION>
If surrender or lapse The percentage of the
occurs in the last month annual Target
of Policy Year: Premium payable is:
<S> <C>
1 through 5 45%
6 40%
7 30%
8 20%
9 10%
10 and later 0%
</TABLE>
In addition, the percentages are reduced equally for each Policy Month during
the years shown. For example, during the seventh year, the percentage is
reduced equally each month from 40% at the end of the sixth Year to 30% at
the end of the seventh Year. This table may be modified if required by law
or regulation of the governing jurisdiction.
Charge Assessed Upon Partial Withdrawals or Pro-Rata Surrender. The amount
of the Contingent Deferred Sales Charge deducted upon a partial withdrawal or
Pro-Rata Surrender will equal a fraction of the charge that would be deducted
if the Policy were surrendered at that time. The fraction will be determined
by dividing the amount of the withdrawal of cash by the Cash Value before the
withdrawal and multiplying the result by the charge. Immediately after a
withdrawal, the Policy's remaining surrender charge will equal the amount of
the surrender charge immediately before the withdrawal less the amount
deducted in connection with the withdrawal.
Transaction Charges. There are no transaction charges for processing the
first twelve transfers or partial withdrawals in a policy year. There is a
charge of $25 for each transfer or partial withdrawal in excess of twelve.
Adjustment of Charges. The Policy is available for purchase by individuals,
corporations, and other institutions. For certain individuals and certain
corporate or other group or sponsored arrangements purchasing one or more
Policies, General American may waive or adjust the amount of the Sales
Charge, Contingent Deferred Sales Charge, monthly administrative charge, or
other charges where the expenses associated with the sale of the Policy or
Policies or the underwriting or other administrative costs associated with
the Policy or Policies warrant an adjustment.
Sales, underwriting, or other administrative expenses may be reduced for
reasons such as expected economies resulting from a corporate purchase or a
group or sponsored arrangement; from the amount of the initial premium
payment or payments; or from the amount of projected premium payments.
General American will determine in its discretion if, and in what amount, an
adjustment is appropriate. The Company may modify its criteria for
qualification for adjustment of charges as experience is gained, subject to
the limitation that such adjustments will not be unfairly discriminatory
against the interests of any Owner.
Separate Account Charges
Mortality and Expense Risk Charge. General American will deduct a daily
charge from the Separate Account. The amount of the deduction is determined
as a percentage of the average net assets of each Division of the Separate
Account. The daily deduction percentages, and the equivalent effective
annual rate, are:
<TABLE>
<CAPTION>
Policy Years Daily Charge Annual
Factor Equivalent
<S> <C> <C>
1-10 .0015027% 0.55%
11-20 .0012301% 0.45%
21+ .0009572% 0.35%
</TABLE>
This deduction is guaranteed not to increase while the Policy is in force.
General American may realize a profit from this charge.
The mortality risk assumed by General American is that Insureds may die
sooner than anticipated and that therefore General American will pay an
aggregate amount of death benefits greater than anticipated. The expense
risk assumed is that expenses incurred in issuing and administering the
Policy will exceed the amounts realized from the administrative charges
assessed against the Policy.
Fund Expenses. The value of the net assets of the Separate Account will
reflect the investment advisory fee and other expenses incurred by the
underlying investment companies. A summary of the annual Fund operating
expenses is provided on page 4 of this prospectus. See the prospectuses for
the respective Funds for a description of investment advisory fees and other
expenses.
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<PAGE> 28
Taxes. No charges are currently made to the Separate Account for Federal,
state, or local taxes that the Company incurs which may be attributable to
such Separate Account or to the Policy. The Company may make such a charge
for any such taxes or economic burden resulting from the application of the
tax laws that it determines to be properly attributable to the Separate
Account or to the Policy. (See Federal Tax Matters.)
DIVIDENDS
The Policy is issued both as a participating Policy, which provides the Owner
an ownership interest in General American Mutual Holding Company, the parent
company of General American Life Insurance Company and as a non-participating
Policy, which provides no ownership interest in General American Mutual
Holding Company or General American Life Insurance Company. However, we do
not anticipate that the Policy will share in the divisible surplus of the
Company in the form of a dividend.
THE GENERAL ACCOUNT
Because of exemptive and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 and the
General Account has not been registered as an investment company under the
1940 Act. Accordingly, neither the General Account nor any interests therein
are subject to the provisions of these Acts and, as a result, the staff of
the SEC has not reviewed the disclosure in this Prospectus relating to the
General Account. The disclosure regarding the General Account may, however,
be subject to certain generally applicable provisions of the Federal
securities laws relating to the accuracy and completeness of statements made
in prospectuses.
Note: The General Account is not available in the State of Texas.
General Description
The General Account consists of all assets owned by General American other
than those in the Separate Account and other separate accounts. Subject to
applicable law, General American has sole discretion over the investment of
the assets of the General Account.
At issue, General American will determine the maximum percentage of the
non-borrowed Cash Value that may be allocated, either initially or by transfer,
to the General Account. The ability to allocate Net Premiums or to transfer
Cash Value to the General Account may not be made available, in the Company's
discretion, under certain Policies. Further, the option may be limited with
respect to some Policies. The Company may, from time to time, adjust the
extent to which premiums or Cash Value may be allocated to the General
Account (the "maximum allocation percentage"). Such adjustments may not be
uniform as to all Policies. General American may at any time modify the
General Account maximum allocation percent. Subject to this maximum, an
Owner may elect to allocate Net Premiums to the General Account, the Separate
Account, or both. Subject to this maximum, the Owner may also transfer Cash
Value from the Divisions of the Separate Account to the General Account, or
from the General Account to the Divisions of the Separate Account. The
allocation of Net Premiums or the transfer of Cash Value to the General
Account does not entitle an Owner to share in the investment experience of
the General Account. Instead, General American guarantees that Cash Value
allocated to the General Account will accrue interest at a rate of at least
4%, compounded annually, independent of the actual investment experience of
the General Account.
The Loan Account is part of the General Account.
The Policy
This Prospectus describes a flexible premium variable life insurance policy.
This Prospectus is generally intended to serve as a disclosure document only
for the aspects of the Policy relating to the Separate Account. For complete
details regarding the General Account, see the Policy itself.
General Account Benefits
If the Owner allocates all Net Premiums only to the General Account and makes
no transfers, partial withdrawals, Pro-Rata Surrenders, or Policy Loans, the
entire investment risk will be borne by General American, and General
American guarantees that it will pay at least a minimum specified death
benefit. The Owner may select Death Benefit Option A, B or C under the
Policy and may change the Policy's Face Amount subject to satisfactory
evidence of insurability.
General Account Cash Value
Net Premiums allocated to the General Account are credited to the Cash Value.
General American bears the full investment risk for these amounts and
guarantees that interest will be credited to each Owner's Cash Value in the
General Account at a rate of no less than 4% per year, compounded annually.
General American may, AT ITS SOLE DISCRETION, credit a higher rate of
interest,
26
<PAGE> 29
although it is not obligated to credit interest in excess of 4% per year, and
might not do so. ANY INTEREST CREDITED ON THE POLICY'S CASH VALUE IN THE
GENERAL ACCOUNT IN EXCESS OF THE GUARANTEED MINIMUM RATE OF 4% PER YEAR WILL
BE DETERMINED IN THE SOLE DISCRETION OF GENERAL AMERICAN. THE POLICY OWNER
ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE GUARANTEED MINIMUM
RATE OF 4% PER YEAR. If excess interest is credited, a different rate of
interest may be applied to the Cash Value in the Loan Account. The Cash
Value in the General Account will be calculated on each Monthly Anniversary
of the Policy.
General American guarantees that, on each Valuation Date, the Cash Value in
the General Account will be the amount of the Net Premiums allocated or Cash
Value transferred to the General Account, plus interest at the rate of 4% per
year, plus any excess interest which General American credits and any amounts
transferred into the General Account, less the sum of all Policy charges
allocable to the General Account and any amounts deducted from the General
Account in connection with partial withdrawals, Pro-Rata Surrenders,
surrender charges or transfers to the Separate Account.
Transfers, Surrenders, Partial Withdrawals and Policy Loans
After the first Policy Year, a portion of Cash Value may be withdrawn from
the General Account or transferred from the General Account to the Separate
Account. A partial withdrawal, net of any applicable surrender charges, and
any transfer must be at least $500 or, the Policy's entire Cash Value in the
General Account if less than $500. No amount may be withdrawn from the
General Account that would result in there being insufficient Cash Value to
meet any surrender charges that would be payable immediately following the
withdrawal upon the surrender of the remaining Cash Value of the Policy. The
total amount of transfers and withdrawals in a Policy Year may not exceed a
Maximum Amount equal to the greater of (a) 25% of a Policy's Cash Surrender
Value in the General Account at the beginning of the Policy Year, or (b) the
previous Policy Year's Maximum Amount (not to exceed the total Cash Surrender
Value of the Policy).
Transfers to the General Account are limited by the maximum allocation
percentage (described below) in effect for a Policy at the time a transfer
request is made.
Policy Loans may also be made from the Policy's Cash Value in the General
Account.
Loans and withdrawals from the General Account may have Federal income tax
consequences. (See Federal Tax Matters.)
There is no transaction charge for the first twelve partial withdrawals or
requested transfers in a Policy Year. General American will impose a charge of
$25 for each partial withdrawal or requested transfer in excess of twelve in a
Policy Year. General American may revoke or modify the privilege of
transferring amounts to or from the General Account at any time. Partial
withdrawals and Pro-Rata Surrenders will result in the imposition of the
applicable surrender charge.
Transfers, surrenders, partial withdrawals and Pro-Rata Surrenders payable
from the General Account and the payment of Policy Loans allocated to the
General Account may, subject to certain limitations, be delayed for up to six
months. However, if payment is deferred for 30 days or more, General
American will pay interest at the rate of 2.5% per year for the period of the
deferment. Amounts from the General Account used to pay premiums on policies
with General American will not be delayed.
GENERAL MATTERS
Postponement of Payments from the Separate Account
The Company usually pays amounts payable on partial withdrawal, Pro-Rata
Surrender, surrender, or Policy Loan allocated to the Separate Account
Divisions within seven days after written notice is received. Payment of any
amount payable from the Divisions of the Separate Account upon surrender,
partial withdrawals, Pro-Rata Surrender, or death of Insured, as well as
payments of a Policy Loan and transfers, may be postponed whenever: (1) the
New York Stock Exchange is closed other than customary weekend and holiday
closings, or trading on the New York Stock Exchange is restricted as
determined by the SEC; (2) the SEC by order permits postponement for the
protection of Owners; or (3) an emergency exists, as determined by the SEC,
as a result of which disposal of securities is not reasonably practicable or
it is not reasonably practicable to determine the value of the Separate
Account's net assets. The Company may defer payment of the portion of any
Policy Loan from the General Account for not more than six months.
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until the Owner's check has cleared the bank upon which it
was drawn.
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The Contract
The Policy, the attached application, any riders, endorsements, any
application for an increase in Face Amount, and any application for
reinstatement constitute the entire contract. All statements made by the
Insured in the application and any supplemental applications can be used to
contest a claim or the validity of the Policy. Any change to the Policy must
be in writing and approved by the President, a Vice President, or the
Secretary of the Company. No agent has the authority to alter or modify any
of the terms, conditions, or agreements of the Policy or to waive any of its
provisions.
Control of Policy
The Insured is the Owner of the Policy unless another person or entity is
shown as the Owner in the application. Ownership may be changed, however, as
described below. The Owner is entitled to all rights provided by the Policy.
Any person whose rights of ownership depend upon some future event does not
possess any present rights of ownership. If there is more than one Owner at
a given time, all Owners must exercise the rights of ownership by joint
action. If the Owner dies, and the Owner is not the Insured, the Owner's
interest in the Policy becomes the property of his or her estate unless
otherwise provided. Unless otherwise provided, the Policy is jointly owned
by all Owners named in the Policy or by the survivors of those joint Owners.
Unless otherwise stated in the Policy, the final Owner is the estate of the
last joint Owner to die. The Company may rely on the written request of any
trustee of a trust which is the Owner of the Policy, and the Company is not
responsible for the proper administration of any such trust.
Beneficiary
The Beneficiary(ies) is (are) the person(s) specified in the application or
by later designation. Unless otherwise stated in the Policy, the Beneficiary
has no rights in a Policy before the death of the Insured. If there is more
than one Beneficiary at the death of the Insured, each Beneficiary will
receive equal payments unless otherwise provided by the Owner. If no
Beneficiary is living at the death of the Insured, the proceeds will be
payable to the Owner or, if the Owner is not living, to the Owner's estate.
The Company permits the designation of various types of trusts as
Beneficiary(ies), including trusts for minor beneficiaries, trusts under a
will, and trusts under a separate written agreement. An Owner is also
permitted to designate several types of beneficiaries, including business
beneficiaries.
Change of Owner or Beneficiary
The Owner may change the ownership and/or Beneficiary designation by written
request in a form acceptable to the Company at any time during the Insured's
lifetime subject to any restrictions stated in the Policy and this
Prospectus. The Company may require that the Policy be returned for
endorsement of any change. If acceptable to us, the change will take effect
as of the date the request is signed, whether or not the Insured is living
when the request is received at the Company's Home Office. The Company is
not liable for any payment made or action taken before the Company received
the written request for change. If the Owner is also a Beneficiary of the
Policy at the time of the Insured's death, the Owner may, within sixty days
of the Insured's death, designate another person to receive the Policy
proceeds. Any change will be subject to any assignment of the Policy or any
other legal restrictions.
Policy Changes
The Company reserves the right to limit the number of changes to a Policy to
one per Policy Year and to restrict changes in the first Policy Year.
Currently, only one change is permitted during any Policy Year and no change
may be made during the first Policy Year. For this purpose, changes include
increases or decreases in Face Amount and changes in the death benefit
option. No change will be permitted, if as a result, the Policy would fail
to satisfy the definition of life insurance in Section 7702 of the Internal
Revenue Code or any applicable successor provision.
Conformity with Statutes
If any provision in a Policy is in conflict with the laws of the state
governing the Policy, the provision will be deemed to be amended to conform
to such laws. In addition, the Company reserves the right to change the
Policy if it determines that a change is necessary to cause this Policy to
comply with, or give the Owner the benefit of any Federal or state statute,
rule, or regulation, including, but not limited to, requirements of the
Internal Revenue Code, or its regulations or published rulings.
Claims of Creditors
To the extent permitted by law, neither the Policy nor any payment under it
will be subject to the claims of creditors or to any legal process.
Incontestability
The Policy is incontestable after it has been in force for two years from the
Issue Date during the lifetime of the Insured. An increase in Face Amount or
addition of a rider after the Issue Date is
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incontestable after such increase or addition has been in force for two years
from its effective date during the lifetime of the Insured. Any
reinstatement of a Policy is incontestable only after it has been in force
during the lifetime of the Insured for two years after the effective date of
the reinstatement.
Assignment
The Company will be bound by an assignment of a Policy only if: (a) the
assignment is in writing; (b) the original assignment instrument or a
certified copy thereof is filed with the Company at its Home Office; and (c)
the Company returns an acknowledged copy of the assignment instrument to the
Owner. The Company is not responsible for determining the validity of any
assignment. Payment of Policy proceeds is subject to the rights of any
assignee of record. If a claim is based on an assignment, the Company may
require proof of the interest of the claimant. A valid assignment will take
precedence over the claim of any Beneficiary.
Suicide
Suicide within two years of the Issue Date is not covered by the Policy. If
the Insured dies by suicide, while sane or insane, within two years from the
Issue Date (or within the maximum period permitted by the laws of the state
in which the Policy was delivered, if less than two years), the amount
payable will be limited to premiums paid, less any partial withdrawals and
outstanding Indebtedness subject to certain limitations, if the Insured,
while sane or insane, dies by suicide within two years after the effective
date of an increase in Face Amount, the death benefit for that increase will
be limited to the amount of the monthly deductions for the increase.
If the Insured is a Missouri citizen when the Policy is issued, this
provision does not apply on the Issue Date of the Policy, or on the effective
date of any increase in Face Amount, unless the Insured intended suicide when
the Policy, or the increase in Face Amount, was applied for.
Misstatement of Age or Sex and Corrections
If the age or sex (except in unisex Policies, see Unisex Requirements Under
Montana Law) of the Insured has been misstated in the application, the amount
of the death benefit will be that which the most recent cost of insurance
charge would have purchased for the correct age and sex.
Any payment or Policy changes made by the Company in good faith, relying on
its records or evidence supplied with respect to such payment, will fully
discharge the Company's duty. The Company reserves the right to correct any
errors in the Policy.
Additional Insurance Benefits
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to a Policy by rider. The descriptions below
are intended to be general; the terms of the Policy riders providing the
additional benefits may vary from state to state, and the Policy should be
consulted. The cost of any additional insurance benefits which require
additional charges will be deducted as part of the monthly deduction from the
Policy's Cash Value. (See Charges and Deductions - Monthly Deduction.)
Certain restrictions may apply and are described in the applicable rider. An
insurance agent authorized to sell the Policy can describe these extra
benefits further. Samples of the provisions are available from General
American upon written request.
Waiver of Monthly Deduction Rider. Provides for the waiver of the monthly
deductions while the Insured is totally disabled, subject to certain
limitations described in the rider. The Insured must have become disabled
after age 5 and before age 65.
Waiver of Specified Premium Rider. Provides for crediting the Policy's Cash
Value with a specified monthly premium while the Insured is totally disabled.
The monthly premium selected at issue is not guaranteed to keep the Policy in
force. The Insured must have become disabled after age 5 and before age 65.
Adjustable Benefit Term Rider. This rider allows an employer who is the
Owner to provide adjustable term insurance to comply with the terms of an
associated employee benefit plan. The increase in coverage occurs on each
Policy Anniversary.
Anniversary Partial Withdrawal Rider. This rider allows the owner to
withdraw up to 15% of the Policy's Cash Surrender Value on any Policy
Anniversary without reducing the Face Amount. A Contingent Deferred Sales
Charge will still apply.
Guaranteed Survivor Purchase Option (GSPO-Plus). This rider grants the
policy Owner or the Insured's Beneficiary the option to purchase, upon the
death of the Insured, on the 10th anniversary of the rider, and on the rider
anniversary nearest the Designated Life's 65th birthday, a specified amount
of additional insurance coverage on the Designated Life (or Lives) without
furnishing evidence of insurability.
Supplemental Coverage Term Rider. This rider provides level term insurance
on the life of the Insured under the base policy. It can be added only
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at issue. It cannot be increased or added to an existing Policy.
Preliminary Term Insurance. This rider provides preliminary term insurance
from the date of hire of a new employee until the plan anniversary when a
corporate-sponsored Policy is issued. The rider provides level term
insurance equal to the initial face amount of the Policy and all attached
riders.
Accelerated Benefit Rider. This rider provides a benefit to the Owner if the
Insured becomes terminally ill and is not expected to live more then twelve
months. The Owner may receive 25%, 50% or 75% (but no more than $250,000) of
the eligible proceeds in a lump sum. "Eligible proceeds" means the death
benefit that would have been payable had the insured died on the date the
rider is exercised.
Children's Insurance Rider. This rider allows the Policy Owner to add term
insurance coverage on his or her children.
Secondary Guarantee Rider. This rider guarantees that if, during the
secondary guarantee period, the sum of all premiums paid on the Policy,
reduced by any partial withdrawals and any outstanding loan balance, is
greater than or equal to the sum of the secondary guarantee premiums required
since the Issue Date, the Policy will not lapse as a result of a Cash Value
less any loans, loans interest due, and any surrender charge being
insufficient to pay the monthly deduction.
The secondary guarantee period is the lesser of twenty Policy Years, or the
number of Policy Years until the Insured reaches Attained Age 70. For
Policies issued after Attained Age 60, the secondary guarantee period is ten
Policy Years.
Lifetime Coverage Rider. This rider provides the continuation of the
Policy's face amount beyond age 100, provided the policy remains in force to
age 100 with a positive cash surrender value. If the Policy is in force
after the Insured's Attained Age 100, the death benefit will be the greater
of the face amount or 101% of the Cash Value.
Records and Reports
The Company will maintain all records relating to the Separate Account and
will mail to the Owner once each Policy Year, at the last known address of
record, a report which shows the current Policy values, premiums paid,
deductions made since the last report, and any outstanding Policy Loans. The
Owner will also be sent a periodic report for each Fund. Receipt of premium
payments, transfers, partial withdrawals, Pro-Rata Surrenders, Policy Loans,
loan repayments, changes in death benefit options, increases or decreases in
Face Amount, surrenders and reinstatements will be confirmed promptly
following each transaction.
An Owner may request in writing a projection of illustrated future Cash
Surrender Values and death benefits. This projection will be furnished by
the Company for a nominal fee which will not exceed $25.
DISTRIBUTION OF THE POLICIES
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for the Company, are also registered representatives of
Walnut Street Securities, Inc. ("Walnut Street"), the principal underwriter
of the Policy, or of broker-dealers who have entered into written sales
agreements with Walnut Street. Walnut Street was incorporated under the laws
of Missouri in 1984 and is a wholly-owned subsidiary of General American
Holding Company, which is, in turn, a wholly-owned subsidiary of the
Company. Walnut Street is registered with the SEC under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. No director or officer of Walnut
Street owns any units in the Separate Account.
Writing agents will receive commissions based on a commission schedule and
rules. Currently, agent first-year commissions equal 50% of target premiums
and 2.25% of excess premium paid in Policy Year 1. In renewal years, the
agent commissions vary from 1.0% to 2.0% of premiums paid in Policy Years 2
and later, depending on the agent's contract type. An additional service
fee, determined as a percentage of the Policy's unloaned Cash Value, is also
paid. The percentage varies by Policy Year from 0% to 0.20% of average
monthly unloaned assets. Reductions may be possible under the circumstances
outlined in the section entitled Adjustment of Charges. General Agents
receive compensation which may be in part based on the level of agent
commissions in their agencies.
As principal underwriter for the Policies, Walnut Street receives commission
income. Walnut Street receives an administrative fee of 2% of premium from
sales of the Policies.
The general agent commission schedules and rules differ for different types
of agency contracts.
General American may use other distribution channels to sell the
non-participating version of the Policy.
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FEDERAL TAX MATTERS
Introduction
The following summary provides a general description of the Federal income
tax considerations associated with the Policy and does not purport to be
complete or to cover all situations. This discussion is not intended as tax
advice. Counsel or other competent tax Advisers should be consulted for more
complete information. This discussion is based upon General American's
understanding of the present Federal income tax laws as they are currently
interpreted by the Internal Revenue Service. No representation is made as to
the likelihood of continuation of the present Federal income tax laws or of
the current interpretations by the Internal Revenue Service.
Tax Status of the Policy
Section 7702 of the Internal Revenue Code of 1986, as amended (the "Code")
includes a definition of a life insurance contract for Federal tax purposes.
The Secretary of the Treasury (the "Treasury") issued proposed regulations
which specify what will be considered reasonable mortality charges under
Section 7702. Guidance as to how Section 7702 is to be applied is, however,
limited. If a Policy were determined not to be a life insurance contract for
purposes of Section 7702, such Policy would not provide most of the tax
advantages normally provided by a life insurance policy.
With respect to a Policy issued on a basis of a standard premium class or on
a guaranteed or simplified issue basis, while there is some uncertainty due
to the limited guidance under Section 7702, the Company believes that such a
Policy should meet the Section 7702 definition of a life insurance contract.
However, with respect to a Policy issued on a substandard basis (i.e., a
premium class involving higher than standard mortality risk), it is not clear
whether such a Policy would satisfy Section 7702, particularly if the Owner
pays the full amount of premiums permitted under the Policy.
If it is subsequently determined that a Policy does not satisfy Section 7702,
the Company will take whatever steps are appropriate and necessary to attempt
to cause such a Policy to comply with Section 7702, including possibly
refunding any premiums paid that exceed the limitations allowable under
Section 7702 (together with interest or other earnings on any such premiums
refunded as required by law). For these reasons, the Company reserves the
right to modify the Policy as necessary to attempt to qualify it as a life
insurance contract under Section 7702.
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Separate Account to be
"adequately diversified" in order for the Policy to be treated as a life
insurance contract for Federal tax purposes. The Separate Account, intends
to comply with the diversification requirements prescribed by the Treasury in
Regulation Section 1.817-5, which affect how assets may be invested.
Although General American does not control the Funds, it has entered into
agreements, which require these investment companies to be operated in
compliance with the requirements prescribed by the Treasury.
The IRS has stated in published rulings that a variable contract owner will
be considered the owner of separate account assets, for federal income tax
purposes, if the contract owner possesses incidents of ownership in those
assets, such as the ability to exercise investment control over the assets.
If that were to be determined to be the case, income and gains from the
separate account assets would be includible in the variable contract owner's
gross income. The Treasury Department has also announced, in connection with
the issuance of regulations concerning diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause
the investor (i.e., the Owner), rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
stated that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets."
The ownership rights under the Policy are different in certain respects from
those described by the IRS in rulings in which it was determined that policy
owners were not owners of separate account assets. For example, the Owner
has additional flexibility in allocating Premium payments and Policy Values.
These differences could result in an Owner being treated as the owner of a
pro rata portion of the assets of the Separate Account. In addition, the
Company does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. The Company therefore reserves the right to modify the Policy as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Separate Account.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
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1. Tax Treatment of Policy Benefits. In general, the Company believes
that the proceeds and Cash Value increases of a Policy should be treated in a
manner consistent with a fixed-benefit life insurance policy for Federal
income tax purposes. Thus, the death benefit under the Policy should be
excludable from the gross income of the Beneficiary under Section 101(a)(1)
of the Code, unless a transfer for value (generally a sale of the policy) has
occurred.
Many changes or transactions involving a Policy may have tax consequences,
depending on the circumstances. Such changes include, but are not limited
to, the exchange of the Policy, a change of the Policy's Face Amount, a
Policy Loan, an additional premium payment, a Policy lapse with an
outstanding Policy Loan, a partial withdrawal, or a surrender of the Policy.
In addition, Federal estate and state and local estate, inheritance, and
other tax consequences of ownership or receipt of Policy proceeds depend upon
the circumstances of each Owner or Beneficiary. A competent tax adviser
should be consulted for further information.
A Policy may also be used in various arrangements, including non-qualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans, retiree medical benefit plans and others. The
tax consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a Policy in any arrangement the value of which
depends in part on its tax consequences, you should be sure to consult a
qualified tax adviser regarding the tax attributes of the particular
arrangement.
Generally, the Owner will not be deemed to be in constructive receipt of the
Policy's Cash Value, including increments thereof, under the Policy until
there is a distribution. The tax consequences of distributions from, and
Policy Loans taken from or secured by, a Policy depend upon whether the
Policy is classified as a "modified endowment contract". However, upon a
complete surrender or lapse of any Policy, if the amount received plus the
amount of outstanding Indebtedness exceeds the total investment in the
Policy, the excess will generally be treated as ordinary income subject to
tax.
2. Modified Endowment Contracts. A policy may be treated as a modified
endowment contract depending upon the amount of premiums paid in relation to
the death benefit provided under such Policy. The premium limitation rules
for determining whether a Policy is a modified endowment contract are
extremely complex. In general, however, a Policy will be a modified
endowment contract if the accumulated premiums paid at any time during the
first seven Policy Years exceed the sum of the net level premiums which would
have been paid on or before such time if the Policy provided for paid-up
future benefits after the payment of seven level annual premiums.
In addition, if a Policy is "materially changed" it may cause such Policy to
be treated as a modified endowment contract. The material change rules for
determining whether a Policy is a modified endowment contract are also
extremely complex. In general, however, the determination of whether a
Policy will be a modified endowment contract after a material change
generally depends upon the relationship among the death benefit at the time
of such change, the Cash Value at the time of the change and the additional
premiums paid in the seven Policy Years starting with the date on which the
material change occurs.
Moreover, a life insurance contract received in exchange for a life insurance
contract classified as a modified endowment contract will also be treated as
a modified endowment contract. A reduction in a Policy's benefits may also
cause such Policy to become a modified endowment contract.
Due to the Policy's flexibility, classification of a Policy as a modified
endowment contract will depend upon the circumstances of each Policy. The
Company has, however, adopted administrative steps designed to protect an
Owner against the possibility that the Policy might become a modified
endowment contract. The Company believes the safeguards are adequate for
most situations, but it cannot provide complete assurance that a Policy will
not be classified as a modified endowment contract. At the time a premium is
credited which would cause the Policy to become a modified endowment
contract, the Company will notify the Owner that unless a refund of the
excess premium is requested by the Owner, the Policy will become a modified
endowment contract. The Owner will have 30 days after receiving such
notification to request the refund. The excess premium paid will be returned
to the Owner upon receipt by the Company of the refund request. The amount
to be refunded will be deducted from the Policy Cash Value in the Divisions
of the Separate Account and in the General Account in the same proportion as
the premium payment was allocated to such Divisions.
Accordingly, a prospective Owner should contact a competent tax adviser
before purchasing a Policy to determine the circumstances under which the
Policy would be a modified endowment contract. In addition, an Owner should
contact a competent tax adviser before paying any additional premiums or
making any other change to, including an exchange of, a Policy to determine
whether such premium or change would cause the Policy (or the new Policy in
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the case of an exchange) to be treated as a modified endowment contract.
3. Distributions from Policies Classified as Modified Endowment Contract.
Policies classified as modified endowment contracts will be subject to the
following tax rules: First, all distributions, including distributions upon
surrender, from such a Policy are treated as ordinary income subject to tax
up to the amount equal to the excess (if any) of the Cash Value immediately
before the distribution over the investment in the Policy (described below)
at such time. Second, Policy Loans taken from, or secured by, such a Policy,
as well as due but unpaid interest thereon, are treated as distributions from
such a Policy and taxed accordingly. Third, a 10 percent additional income
tax is imposed on the portion of any distribution from, or Policy Loan taken
from or secured by, such a Policy that (a) is included in income, except
where the distribution or Policy Loan is made on or after the Owner attains
age 59 1/2, (b) is attributable to the Owner's becoming disabled, or (c) is
part of a series of substantially equal periodic payments for the life (or
life expectancy) of the Owner or the joint lives (or joint life expectancies)
of the Owner and the Owner's Beneficiary.
4. Distributions From Policies Not Classified as Modified Endowment
Contract. Distributions from Policies not classified as a modified
endowment contracts are generally treated as first recovering the investment
in the Policy (described below) and then, only after the return of all such
investment in the Policy, as distributing taxable income. An exception to
this general rule occurs in the case of a decrease in the Policy's death
benefit (possibly including a partial withdrawal) or any other change that
reduces benefits under the Policy in the first 15 years after the Policy is
issued and that results in cash distribution to the Owner in order for the
Policy to continue complying with the Section 7702 definitional limits. Such
a cash distribution will be taxed in whole or in part as ordinary income (to
the extent of any gain in the Policy) under rules prescribed in Section 7702.
Policy Loans from, or secured by, a Policy that is not a modified endowment
contract are not treated as distributions. Instead, such loans are treated
as indebtedness of the Owner.
Upon a complete surrender or lapse of a Policy that is not a modified
endowment contract, if the amount received plus the amount of indebtedness
exceeds the total investment in the Policy, the excess will generally be
treated as ordinary income subject to tax.
Neither distributions (including distributions upon surrender or lapse) nor
Policy Loans from, or secured by, a Policy that is not a modified endowment
contract are subject to the 10 percent additional income tax.
If a Policy which is not a modified endowment contract subsequently becomes a
modified endowment contract, then any distribution made from the Policy
within two years prior to the date of such change in status may become
taxable.
5. Policy Loan Interest. Generally, interest paid on any loan under a
life insurance Policy owned by an individual is not deductible. In addition,
interest on any loan under a life insurance Policy owned by a business
taxpayer on the life of any individual who is an officer of or is financially
interested in the business carried on by that taxpayer is deductible only
under certain very limited circumstances. An Owner should consult a
competent tax adviser before deducting any loan interest.
6. Interest Expense on Unrelated Indebtedness. Under provisions added to
the Code in 1997 for policies issued after June 8, 1997, if a business
taxpayer owns or is the beneficiary of a Policy on the life of any individual
who is not an officer, director, employee, or 20 percent owner of the
business, and the taxpayer also has debt unrelated to the Policy, a portion
of the taxpayer's unrelated interest expense deductions may be lost. No
business taxpayer should purchase, exchange, or increase the death benefit
under a Policy on the life of any individual who is not an officer, director,
employee, or 20 percent owner of the business without first consulting a
competent tax Adviser.
7. Investment in the Policy. Investment in the Policy means (i) the
aggregate amount of any premiums or other consideration paid for a Policy,
minus (ii) the aggregate amount received under the Policy which is excluded
from gross income of the Owner (except that the amount of any Policy Loan
from, or secured by, a Policy that is a modified endowment contract, to the
extent such amount is excluded from gross income, will be disregarded), plus
(iii) the amount of any Policy Loan from, or secured by, a Policy that is a
modified endowment contract to the extent that such amount is included in the
gross income of the Owner.
8. Multiple Policies. All modified endowment contracts that are issued by
the Company (or its affiliates) to the same Owner during any calendar year
are treated as one modified endowment contract for purposes of determining
the amount includible in gross income under Section 72(e) of the Code.
9. Possible Charge for Taxes. At the present time, the Company makes no
charge to the Separate Account for any Federal, state, or local taxes (as
opposed to Premium Tax Charges which are
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deducted from premium payments) that it incurs which may be attributable to
such Separate Account or to the Policies. The Company, however, reserves the
right in the future to make a charge for any such tax or other economic
burden resulting from the application of the tax laws that it determines to
be properly attributable to the Separate Account or to the Policies.
10. Possible Changes in Taxation. As of the date of this Prospectus, the
President's budget for fiscal year 1999 contains a number of proposals that
would adversely affect the Federal income tax treatment of life insurance
contracts. Of particular importance to owners of variable life insurance
contracts such as the Policy are two proposals under which, if adopted: (1)
the inside buildup of variable life insurance contracts like the Policy would
be taxed whenever cash values were reallocated among the available investment
options, for example, if the Periodic and Variance Rebalancing options
available under the Policy were used, and (2) it would no longer be possible
to exchange a variable life insurance contract tax free under Code section
1035. Moreover, it is always possible that any changes in the tax treatment
of life insurance contracts could be effective prior to the date of any new
legislation.
UNISEX REQUIREMENTS UNDER MONTANA LAW
The State of Montana generally prohibits the use of actuarial tables that
distinguish between men and women in determining premiums and Policy benefits
for policies issued on the lives of their residents. Therefore, all Policies
offered by this Prospectus to insure residents of Montana will have premiums
and benefits which are based on actuarial tables that do not differentiate on
the basis of sex.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
General American holds the assets of the Separate Account in a custodial
account in its name at the Bank of New York. The Company maintains records
of all purchases and redemptions of applicable Fund shares by each of the
Divisions. Additional protection for the assets of the Separate Account is
afforded by a blanket fidelity bond issued by Lloyd's Underwriters in the
amount of five million dollars, covering all officers and employees of the
Company who have access to the assets of the Separate Account.
VOTING RIGHTS
Based on its understanding of current applicable legal requirements, the
Company will vote the shares of the Funds held in the Separate Account at
regular and special shareholder meetings of the mutual funds in accordance
with the instructions received from persons having voting interests in the
corresponding Divisions of the Separate Account. If, however, the 1940 Act
or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result the Company determines
that it is permitted to vote shares of the Fund in its own right, it may
elect to do so. No voting privileges apply to the Policies with respect to
Cash Value removed from the Separate Account as a result of a Policy Loan.
The number of votes which an Owner has the right to instruct will be
calculated separately for each Division. Voting rights reflect the dollar
value of the total number of units of each Division of the Separate Account
credited to the Owner at the record date, rather than the number of units
alone. Fractional shares will be counted. The number of votes of the Fund
which the Owner has the right to instruct will be determined as of the date
coincident with the date established by that Fund for determining
shareholders eligible. Voting instructions will be solicited by written
communications prior to such meeting in accordance with procedures
established by the mutual funds.
The company will vote shares of a Fund for which no timely instructions are
received in proportion to the voting instructions which are received with
respect to that Fund. The Company will also vote any shares of the Funds
which are not attributable to Policies in the same proportion.
Each person having a voting interest in a Division will receive any proxy
material, reports, and other materials relating to the appropriate Fund.
Disregard of Voting Instructions. The Company 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
subclassification or investment objective of the Fund or to approve or
disapprove an investment Advisory contract for a Fund. In addition, the
Company itself may disregard voting instructions in favor of changes
initiated by an Owner in the investment policy or the investment adviser or
sub-adviser of a Fund if the Company reasonably disapproves of such changes.
A proposed change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities, or the
Company determined that the change would have an adverse effect on its
General Account in that the proposed investment policy for a Fund may result
in overly speculative or unsound investments. If the Company disregards
voting instructions, a summary of that action and the
34
<PAGE> 37
reasons for such action will be included in the next annual report to Owners.
STATE REGULATION OF THE COMPANY
The Company, a stock life insurance company organized under the laws of
Missouri, and the Separate Account are subject to regulation by the Missouri
Department of Insurance. An annual statement is filed with the Director of
Insurance on or before March 1st of each year covering the operations and
reporting on the financial condition of the Company as of December 31 of the
preceding year. Periodically, the Director of Insurance examines the
liabilities and reserves of the Company and the Separate Account and
certifies their adequacy, and a full examination of the Company's operations
is conducted by the National Association of Insurance Commissioners at least
once every three years.
In addition, the Company is subject to the insurance laws and regulations of
other states within which it is licensed or may become licensed to operate.
Generally, the insurance departments of other states apply the laws of the
state of domicile in determining permissible investments.
35
<PAGE> 38
<TABLE>
MANAGEMENT OF THE COMPANY
<CAPTION>
PRINCIPAL OCCUPATION (s)
NAME DURING PAST FIVE YEARS<F*>
---- --------------------------
PRINCIPAL OFFICERS<F**>
- -----------------------
<C> <S>
Richard A. Liddy Chairman, President and CEO, 1/95-present; Chairman of the Executive
Committee, 5/92-present. Formerly President and CEO, 5/92-1/95.
Robert J. Banstetter, Sr. Vice President, General Counsel and Secretary, 2/91-present.
John W. Barber Vice President and Controller, 12/84-present.
O'Neil P. Boudreaux Vice President-Sales and Marketing, 10/96-present. Formerly Vice
President-Group Field Accounts, 4/87-10/96.
Kevin C. Eichner Executive Vice President of General American, Chairman of GenMark,
Chairman of Walnut Street Securities, 10/97-Present. President and CEO,
Collaborative Strategies, 1983-Present.
E. Thomas Hughes Corporate Actuary and Treasurer, 10/94-present. Formerly Executive
Vice President-Group Pensions, 3/90-10/94
Michael P. Ingrassia Vice President-Group Executive Accounts, 3/92-present.
Warren J. Winer Executive Vice President-Group Life and Health, 8/95-present. Formerly
Managing Director, William M. Mercer, Inc., 7/93-8/95; President and
Chief Operating Officer, W. F. Corroon, 1986-7/93.
Bernard H. Wolzenski Executive Vice President-Individual Insurance, 10/91-present.
A. Greig Woodring President and Chief Executive Officer, Reinsurance Group of America,
12/92-present.
<FN>
<F*> All positions listed are with General American unless otherwise indicated.
<F**>The prinicpal business address of Messrs. Banstetter, Hughes, and Liddy is
General American Life Insurance Company, 700 Market Street, St. Louis,
Missouri 63101. The principal business address for Messrs. Barber, Boudreaux,
Ingrassia, Winer and Wolzenski is 13045 Tesson Ferry Road, St. Louis, Missouri
63128. The principal business address for Mr. Woodring is 660 Mason Ridge
Center Drive, Suite 300, St. Louis, Missouri 63141. The principal business
address for Mr. Eichner is 670 Mason Ridge Center Drive, Suite 100, St. Louis,
Missouri 63141.
36
<PAGE> 39
<CAPTION>
PRINCIPAL OCCUPATIONS (s)
NAME DURING PAST FIVE YEARS<F*>
---- --------------------------
DIRECTORS
- ---------
<C> <S>
August A. Busch III Chairman of the Board and President, Anheuser-Busch Companies, Inc.
Anheuser-Busch Companies, Inc. (beer business).
One Busch Place
St. Louis, Missouri 63118
William E. Cornelius Retired Chairman and Chief Executive Officer, Union Electric Company
Union Electric Company (electric utility business).
P.O. Box 149
St. Louis, Missouri 63166
John C. Danforth Partner, Bryan Cave (law firm). Formerly, U. S. Senator, State of Missouri.
Bryan Cave
One Metropolitan Square,
Suite 3600
St. Louis, Missouri 63102
Bernard A. Edison Past President, Edison Brothers Stores, Inc. (retail specialty stores)
Edison Brothers Stores, Inc.
P.O. Box 14020
St. Louis, Missouri 63178
Richard A. Liddy Chairman, President and CEO, General American
General American Life Insurance Co.
700 Market Street
St. Louis, MO 63101
William E. Maritz Chairman and Chief Executive Officer, Maritz, Inc.(motivation, travel
Maritz, Inc. communications, training and marketing research business).
1375 North Highway Drive
Fenton, Missouri 63099
Craig D. Schnuck Chairman and Chief Executive Officer, Schnuck Markets, Inc. (retail
Schnuck Markets, Inc. supermarket chain).
11420 Lackland Road
P.O. Box 46928
St. Louis, Missouri 63146
William P. Stiritz Chairman, Chief Executive Officer and President, Agribrands International,
Agribrands International, Inc. Inc. Formerly Chairman, Chief Executive Officer and President, Ralston Purina
9811 So. Forty Drive Company (pet food, batteries, and bread business); Chairman, Ralcorp Holdings,
St. Louis, Missouri 63124 Inc. (ready-to-eat cereal, baby food, ski resorts).
Andrew C. Taylor Chief Executive Officer and President, Enterprise Rent-A-Car (car
Enterprise Rent-A-Car rental).
600 Corporate Park Drive
St. Louis, Missouri 63105
37
<PAGE> 40
PRINCIPAL OCCUPATIONS (s)
NAME DURING PAST FIVE YEARS<F*>
---- --------------------------
DIRECTORS (CONTINUED)
- ---------------------
H. Edwin Trusheim Retired Chairman and Chief Executive Officer, General American
General American Life Insurance Co. Life Insurance Company
P.O. Box 396
St. Louis, MO 63166
Robert L. Virgil Principal, Edward Jones (investments)
Edward Jones
12555 Manchester
St. Louis, Missouri 63131-3729
Virginia V. Weldon, M.D. Director, Center for the Study of American Business, Washington
Monsanto Company University. Retired Senior Vice President, Public Policy, Monsanto
800 North Lindbergh Company (chemicals diversified industry, pharmaceuticals, life
St. Louis, Missouri 63167 science products, and food ingredients business).
Ted C. Wetterau President, Wetterau Associates, L.L.C. Retired Chairman and Chief
Wetterau Associates, L.L.C. Executive Officer, Wetterau Incorporated (retail and wholesale
7700 Bonhomme, Suite 750 grocery, manufacturing business).
St. Louis, Missouri 63105
<FN>
<F*>All positions listed are with General American unless otherwise indicated.
</TABLE>
38
<PAGE> 41
LEGAL MATTERS
All matters of Missouri law pertaining to the Policy, including the validity
of the Policy and General American's right to issue the Policy under Missouri
insurance law, have been passed upon by Matthew P. McCauley, Vice President
and Associate General Counsel of General American.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. General American is
not involved in any litigation that is of material importance in relation to
its total assets or that relates to the Separate Account.
EXPERTS
The audited financial statements of General American and the Separate Account
have been included in this Prospectus in reliance on the reports of KPMG Peat
Marwick LLP independent certified public accountants, and on the authority of
said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1997 financial
statements of General American refers to the adoption of Statement of
Financial Accounting Standards No. 120, Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts.
Actuarial matters included in this Prospectus have been examined by Susan
Benjamin, FSA, MAAA, Senior Product Actuary of General American, as stated
in the opinion filed as an exhibit to the registration statement.
ADDITIONAL INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933, as amended, with respect to the
Policy offered hereby. This Prospectus does not contain all the information
set forth in the registration statement and the amendments and exhibits to
the registration statement, to all of which reference is made for further
information concerning the Separate Account, General American and the Policy
offered hereby. Statements contained in this Prospectus as to the contents
of the Policy and other legal instruments are summaries. For a complete
statement of the terms thereof reference is made to such instruments as
filed.
Like all financial services providers, General American utilizes systems that
may be affected by the Year 2000 transition issues, and it relies on services
providers, including the Funds, that may also be affected. The Company has
developed, and is in the process of implementing, a Year 2000 transition
plan, and is confirming that its services providers are also so engaged. The
resources that are being devoted to this effort are substantial. It is
difficult to predict with precision whether the amount of resources
ultimately devoted, or the outcome of these efforts, will have any negative
impact on the Company. However, as of the date of this prospectus, we do not
anticipate that Policy Owners will experience negative effects on their
investment, or on the services provided in connection therewith, as a result
of Year 2000 transition implementation. General American currently
anticipates that its systems will be Year 2000 compliant, but there can be no
assurance that the Company will be successful, or that interaction with other
service providers will not impair the Company's services at that time.
FINANCIAL STATEMENTS
The financial statements of General American which are included in this
Prospectus should be distinguished from the financial statements of the
Separate Account, and should be considered only as bearing on the ability of
General American to meet its obligations under the Policy. They should not
be considered as bearing on the investment performance of the assets held in
the Separate Account. Financial information is not provided for four of the
seventeen Divisions of the Separate Account because those Divisions have only
recently been established, and therefore no operating history exists for
those Divisions.
Interim financial statements for General American or the Separate Account are
not part of this prospectus because General American does not prepare audited
financial statements more often than annually, and believes that any incremental
benefit to prospective Policy Owners that may result from preparing and
delivering more current financial statements, though unaudited, does not
justify the additional cost that would be incurred. General American represents
that there have been no adverse changes in the financial condition or
operations of General American or the Separate Account between the end of
the most recent fiscal year and the date of this prospectus.
39
<PAGE> 42
APPENDIX A
Illustrations of Death Benefits and Cash Values
The following tables illustrate how the Cash Value, Cash Surrender Value, and
death benefit of a Policy change with the investment experience of a Division
of the Separate Account. The tables show how the Cash Value, Cash Surrender
Value, and death benefit of a Policy issued to an insured of a given age and
at a given premium would vary over time if the investment return on the
assets held in each Division of the Separate Account were a uniform, gross,
after-tax annual rate of 0%, 6%, or 12%. The tables illustrate Policies
issued in Missouri (using a 2% premium tax rate and a 1.3% federal tax
charge) to males, age 35 and 50 in a preferred nonsmoker rate class. If the
insured falls into a smoker rate class, the Cash Values, Cash Surrender Values,
and death benefits would be lower than those shown in the tables. In addition,
the Cash Values, Cash Surrender Values, and death benefits would be different
from those shown if the gross annual investment rates of return averaged 0%,
6%, and 12% over a period of years, but fluctuated above and below those
averages for individual Policy Years.
The Cash Value column under the "Guaranteed" heading shows the accumulated
value of the Net Premiums paid at the stated interest rate, reflecting
deduction of all policy charges described in this prospectus at the
guaranteed maximum rate. The Cash Surrender Value column under the
"Guaranteed" heading shows the projected Cash Surrender Value of the Policy,
which is calculated by taking the Cash Value under the "Guaranteed" heading
and deducting any appropriate Contingent Deferred Sales Charge. The Cash
value column under the "Current" heading shows the accumulated value of the
Net Premiums paid at the stated interest rate, reflecting deduction of all
policy charges as described in this prospectus at the current rate. The Cash
Surrender Value column under the "Current" heading shows the projected Cash
Surrender Value of the Policy, which is calculated by taking the Cash Value
under the "Current" heading and deducting any appropriate Contingent Deferred
Sales Charge. The illustrations of death benefits reflect the above
assumptions. The death benefits also vary between tables depending upon
whether Death Benefit Options A or C (Level Type) or Death Benefit Option B
(Increasing Type) are illustrated.
The amounts deducted from the Cash Value in the illustrations include the
sales charge, premium tax, federal tax charge, selection and issue expense
charge, monthly administrative charge, and cost of insurance. These charges
are described in the prospectus under Charges and Deductions.
The amounts shown for Cash Value, Cash Surrender Value, and death benefit
reflect charges that produce an investment rate of return that is lower than
the gross return on the assets held in a Division of the Separate Account.
The charges include a charge for mortality and expense risk (equivalent to
.55% for Policy Years 1-10, .45% for Policy Years 11-20, and .35%
thereafter), and an assumed .78% charge for the investment advisory fee and
Fund administrative expenses combined, based on the average Fund expense for
all available investment Funds. The actual investment advisory fee
applicable to each Division is shown in the respective Prospectuses of each
Fund. After deduction for these amounts, the illustrated gross annual
investment rates of return of 0%, 6%, and 12% correspond to approximate
initial net annual rates of -1.33%, 4.67%, and 10.67%, respectively. The
Prospectuses for each Fund should be consulted for details about the nature
and extent of their expenses.
The hypothetical values shown in the tables do not reflect any charges for
Federal income taxes against the Separate Account (as opposed to Premium
Charges which are deducted from premium payments), since General American is
not currently making any such charges. However, such charges may be made in
the future and, in that event, the gross annual investment rate of return of
the Divisions of the Separate Account would have to exceed 0%, 6%, and 12% by
an amount sufficient to cover the tax charges in order to produce the death
benefit and Cash Value illustration. (See Federal Tax Matters.)
The tables illustrate the Policy values that would result based upon the
investment rates of return if premiums are paid as indicated, if all Net
Premiums are allocated to the Separate Account, if no Policy Loans have been
made. The tables are also based on the assumptions that the Owner has not
requested an increase or decrease in the Face Amount, that no partial
withdrawals have been made, that no transfer charges were incurred, and that
no optional riders have been requested.
Upon request, General American will provide a comparable illustration based
upon the proposed Insured's age, sex, and rate class, the Face Amount or
premium requested, the proposed frequency of premium payments, and any
available riders requested.
40
<PAGE> 43
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 890 1,768 250,000 654 1,531 250,000
2 36 3,000 6,458 3,031 3,909 250,000 2,567 3,444 250,000
3 36 3,000 9,930 5,097 5,975 250,000 4,431 5,308 250,000
4 37 3,000 13,577 7,116 7,994 250,000 6,245 7,123 250,000
5 37 3,000 17,406 9,092 9,970 250,000 8,005 8,883 250,000
6 38 3,000 21,426 11,135 11,915 250,000 9,808 10,588 250,000
7 38 3,000 25,647 13,232 13,817 250,000 11,647 12,232 250,000
8 39 3,000 30,080 15,291 15,681 250,000 13,426 13,816 250,000
9 39 3,000 34,734 17,311 17,506 250,000 15,140 15,335 250,000
10 40 3,000 39,620 19,298 19,298 250,000 16,789 16,789 250,000
11 40 3,000 44,751 21,440 21,440 250,000 18,555 18,555 250,000
12 41 3,000 50,139 23,554 23,554 250,000 20,244 20,244 250,000
13 41 3,000 55,796 25,637 25,637 250,000 21,853 21,853 250,000
14 42 3,000 61,736 27,692 27,692 250,000 23,379 23,379 250,000
15 42 3,000 67,972 29,725 29,725 250,000 24,815 24,815 250,000
16 43 3,000 74,521 31,689 31,689 250,000 26,157 26,157 250,000
17 43 3,000 81,397 33,590 33,590 250,000 27,393 27,393 250,000
18 44 3,000 88,617 35,423 35,423 250,000 28,509 28,509 250,000
19 44 3,000 96,198 37,186 37,186 250,000 29,493 29,493 250,000
20 45 3,000 104,158 38,876 38,876 250,000 30,328 30,328 250,000
21 45 3,000 112,516 40,530 40,530 250,000 31,033 31,033 250,000
22 46 3,000 121,291 42,102 42,102 250,000 31,561 31,561 250,000
23 46 3,000 130,506 43,587 43,587 250,000 31,902 31,902 250,000
24 47 3,000 140,181 44,977 44,977 250,000 32,042 32,042 250,000
25 47 3,000 150,340 46,262 46,262 250,000 31,956 31,956 250,000
26 48 3,000 161,007 47,431 47,431 250,000 31,617 31,617 250,000
27 48 3,000 172,208 48,476 48,476 250,000 30,997 30,997 250,000
28 49 3,000 183,968 49,387 49,387 250,000 30,054 30,054 250,000
29 49 3,000 196,317 50,155 50,155 250,000 28,739 28,739 250,000
30 50 3,000 209,282 50,767 50,767 250,000 26,995 26,995 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
41
<PAGE> 44
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,019 1,897 250,000 775 1,652 250,000
2 36 3,000 6,458 3,419 4,297 250,000 2,925 3,803 250,000
3 36 3,000 9,930 5,884 6,762 250,000 5,153 6,030 250,000
4 37 3,000 13,577 8,445 9,322 250,000 7,459 8,337 250,000
5 37 3,000 17,406 11,109 11,986 250,000 9,844 10,721 250,000
6 38 3,000 21,426 13,990 14,770 250,000 12,406 13,186 250,000
7 38 3,000 25,647 17,084 17,669 250,000 15,144 15,729 250,000
8 39 3,000 30,080 20,301 20,691 250,000 17,965 18,355 250,000
9 39 3,000 34,734 23,648 23,843 250,000 20,866 21,061 250,000
10 40 3,000 39,620 27,134 27,134 250,000 23,853 23,853 250,000
11 40 3,000 44,751 30,978 30,978 250,000 27,134 27,134 250,000
12 41 3,000 50,139 35,007 35,007 250,000 30,521 30,521 250,000
13 41 3,000 55,796 39,226 39,226 250,000 34,019 34,019 250,000
14 42 3,000 61,736 43,649 43,649 250,000 37,630 37,630 250,000
15 42 3,000 67,972 48,289 48,289 250,000 41,355 41,355 250,000
16 43 3,000 74,521 53,115 53,115 250,000 45,197 45,197 250,000
17 43 3,000 81,397 58,141 58,141 250,000 49,151 49,151 250,000
18 44 3,000 88,617 63,374 63,374 250,000 53,214 53,214 250,000
19 44 3,000 96,198 68,824 68,824 250,000 57,382 57,382 250,000
20 45 3,000 104,158 74,499 74,499 250,000 61,649 61,649 250,000
21 45 3,000 112,516 80,488 80,488 250,000 66,077 66,077 250,000
22 46 3,000 121,291 86,731 86,731 250,000 70,607 70,607 250,000
23 46 3,000 130,506 93,241 93,241 250,000 75,245 75,245 250,000
24 47 3,000 140,181 100,030 100,030 250,000 79,991 79,991 250,000
25 47 3,000 150,340 107,109 107,109 250,000 84,842 84,842 250,000
26 48 3,000 161,007 114,493 114,493 250,000 89,793 89,793 250,000
27 48 3,000 172,208 122,198 122,198 250,000 94,843 94,843 250,000
28 49 3,000 183,968 130,244 130,244 250,000 99,983 99,983 250,000
29 49 3,000 196,317 138,654 138,654 250,000 105,203 105,203 250,000
30 50 3,000 209,282 147,454 147,454 250,000 110,496 110,496 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
42
<PAGE> 45
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,148 2,026 250,000 896 1,774 250,000
2 36 3,000 6,458 3,824 4,701 250,000 3,299 4,177 250,000
3 36 3,000 9,930 6,736 7,614 250,000 5,935 6,813 250,000
4 37 3,000 13,577 9,940 10,817 250,000 8,828 9,705 250,000
5 37 3,000 17,406 13,470 14,347 250,000 12,000 12,877 250,000
6 38 3,000 21,426 17,471 18,251 250,000 15,579 16,359 250,000
7 38 3,000 25,647 21,972 22,557 250,000 19,592 20,177 250,000
8 39 3,000 30,080 26,923 27,313 250,000 23,979 24,369 250,000
9 39 3,000 34,734 32,372 32,567 250,000 28,777 28,972 250,000
10 40 3,000 39,620 38,378 38,378 250,000 34,033 34,033 250,000
11 40 3,000 44,751 45,240 45,240 250,000 40,026 40,026 250,000
12 41 3,000 50,139 52,847 52,847 250,000 46,627 46,627 250,000
13 41 3,000 55,796 61,279 61,279 250,000 53,905 53,905 250,000
14 42 3,000 61,736 70,629 70,629 250,000 61,935 61,935 250,000
15 42 3,000 67,972 81,003 81,003 250,000 70,800 70,800 250,000
16 43 3,000 74,521 92,476 92,476 250,000 80,598 80,598 250,000
17 43 3,000 81,397 105,177 105,177 250,000 91,428 91,428 250,000
18 44 3,000 88,617 119,242 119,242 250,000 103,407 103,407 250,000
19 44 3,000 96,198 134,826 134,826 250,000 116,671 116,671 250,000
20 45 3,000 104,158 152,102 152,102 250,000 131,370 131,370 250,000
21 45 3,000 112,516 171,418 171,418 257,126 147,819 147,819 250,000
22 46 3,000 121,291 192,816 192,816 281,512 166,120 166,120 250,000
23 46 3,000 130,506 216,500 216,500 307,430 186,480 186,480 264,801
24 47 3,000 140,181 242,715 242,715 334,946 208,991 208,991 288,407
25 47 3,000 150,340 271,735 271,735 364,124 233,864 233,864 313,378
26 48 3,000 161,007 303,866 303,866 395,026 261,362 261,362 339,771
27 48 3,000 172,208 339,414 339,414 434,450 291,702 291,702 373,378
28 49 3,000 183,968 378,742 378,742 477,215 325,174 325,174 409,719
29 49 3,000 196,317 422,255 422,255 523,597 362,100 362,100 449,004
30 50 3,000 209,282 470,403 470,403 573,891 402,841 402,841 491,466
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
43
<PAGE> 46
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 889 1,766 251,766 650 1,528 251,528
2 36 3,000 6,458 3,026 3,904 253,904 2,557 3,434 253,434
3 36 3,000 9,930 5,086 5,964 255,964 4,410 5,288 255,288
4 37 3,000 13,577 7,096 7,973 257,973 6,210 7,087 257,087
5 37 3,000 17,406 9,060 9,937 259,937 7,951 8,828 258,828
6 38 3,000 21,426 11,088 11,868 261,868 9,729 10,509 260,509
7 38 3,000 25,647 13,168 13,753 263,753 11,537 12,122 262,122
8 39 3,000 30,080 15,205 15,595 265,595 13,280 13,670 263,670
9 39 3,000 34,734 17,201 17,396 267,396 14,950 15,145 265,145
10 40 3,000 39,620 19,160 19,160 269,160 16,549 16,549 266,549
11 40 3,000 44,751 21,271 21,271 271,271 18,256 18,256 268,256
12 41 3,000 50,139 23,349 23,349 273,349 19,874 19,874 269,874
13 41 3,000 55,796 25,393 25,393 275,393 21,401 21,401 271,401
14 42 3,000 61,736 27,405 27,405 277,405 22,833 22,833 272,833
15 42 3,000 67,972 29,392 29,392 279,392 24,160 24,160 274,160
16 43 3,000 74,521 31,301 31,301 281,301 25,380 25,380 275,380
17 43 3,000 81,397 33,136 33,136 283,136 26,475 26,475 276,475
18 44 3,000 88,617 34,894 34,894 284,894 27,431 27,431 277,431
19 44 3,000 96,198 36,569 36,569 286,569 28,235 28,235 278,235
20 45 3,000 104,158 38,157 38,157 288,157 28,865 28,865 278,865
21 45 3,000 112,516 39,692 39,692 289,692 29,337 29,337 279,337
22 46 3,000 121,291 41,128 41,128 291,128 29,603 29,603 279,603
23 46 3,000 130,506 42,457 42,457 292,457 29,654 29,654 279,654
24 47 3,000 140,181 43,669 43,669 293,669 29,474 29,474 279,474
25 47 3,000 150,340 44,750 44,750 294,750 29,036 29,036 279,036
26 48 3,000 161,007 45,687 45,687 295,687 28,313 28,313 278,313
27 48 3,000 172,208 46,467 46,467 296,467 27,276 27,276 277,276
28 49 3,000 183,968 47,078 47,078 297,078 25,885 25,885 275,885
29 49 3,000 196,317 47,508 47,508 297,508 24,091 24,091 274,091
30 50 3,000 209,282 47,741 47,741 297,741 21,844 21,844 271,844
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
44
<PAGE> 47
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,017 1,895 251,895 771 1,649 251,649
2 36 3,000 6,458 3,414 4,291 254,291 2,914 3,792 253,792
3 36 3,000 9,930 5,871 6,749 256,749 5,129 6,006 256,006
4 37 3,000 13,577 8,420 9,298 259,298 7,417 8,294 258,294
5 37 3,000 17,406 11,069 11,946 261,946 9,775 10,653 260,653
6 38 3,000 21,426 13,930 14,710 264,710 12,304 13,084 263,084
7 38 3,000 25,647 16,998 17,583 267,583 14,997 15,582 265,582
8 39 3,000 30,080 20,182 20,572 270,572 17,761 18,151 268,151
9 39 3,000 34,734 23,488 23,683 273,683 20,591 20,786 270,786
10 40 3,000 39,620 26,926 26,926 276,926 23,491 23,491 273,491
11 40 3,000 44,751 30,712 30,712 280,712 26,663 26,663 276,663
12 41 3,000 50,139 34,673 34,673 284,673 29,917 29,917 279,917
13 41 3,000 55,796 38,812 38,812 288,812 33,252 33,252 283,252
14 42 3,000 61,736 43,143 43,143 293,143 36,668 36,668 286,668
15 42 3,000 67,972 47,679 47,679 297,679 40,157 40,157 290,157
16 43 3,000 74,521 52,378 52,378 302,378 43,717 43,717 293,717
17 43 3,000 81,397 57,248 57,248 307,248 47,336 47,336 297,336
18 44 3,000 88,617 62,294 62,294 312,294 50,997 50,997 300,997
19 44 3,000 96,198 67,517 67,517 317,517 54,686 54,686 304,686
20 45 3,000 104,158 72,921 72,921 322,921 58,384 58,384 308,384
21 45 3,000 112,516 78,582 78,582 328,582 62,132 62,132 312,132
22 46 3,000 121,291 84,435 84,435 334,435 65,855 65,855 315,855
23 46 3,000 130,506 90,478 90,478 340,478 69,540 69,540 319,540
24 47 3,000 140,181 96,711 96,711 346,711 73,167 73,167 323,167
25 47 3,000 150,340 103,126 103,126 353,126 76,702 76,702 326,702
26 48 3,000 161,007 109,718 109,718 359,718 80,111 80,111 330,111
27 48 3,000 172,208 116,480 116,480 366,480 83,354 83,354 333,354
28 49 3,000 183,968 123,406 123,406 373,406 86,378 86,378 336,378
29 49 3,000 196,317 130,490 130,490 380,490 89,116 89,116 339,116
30 50 3,000 209,282 137,721 137,721 387,721 91,501 91,501 341,501
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
45
<PAGE> 48
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,147 2,024 252,024 893 1,770 251,770
2 36 3,000 6,458 3,818 4,695 254,695 3,287 4,165 264,165
3 36 3,000 9,930 6,721 7,599 257,599 5,908 6,786 256,786
4 37 3,000 13,577 9,911 10,788 260,788 8,777 9,655 259,655
5 37 3,000 17,406 13,420 14,298 264,298 11,916 12,793 262,793
6 38 3,000 21,426 17,394 18,174 268,174 15,447 16,227 266,227
7 38 3,000 25,647 21,857 22,442 272,442 19,395 19,980 269,980
8 39 3,000 30,080 26,758 27,148 277,442 23,696 24,086 274,086
9 39 3,000 34,734 32,142 32,337 282,337 28,380 33,488 278,575
10 40 3,000 39,620 38,066 38,066 288,066 33,488 33,488 283,488
11 40 3,000 44,751 44,824 44,824 294,824 39,287 39,287 289,287
12 41 3,000 50,139 52,302 52,302 302,302 45,641 45,641 295,641
13 41 3,000 55,796 60,576 60,576 310,576 52,602 52,602 302,602
14 42 3,000 61,736 69,734 69,734 319,734 60,231 60,231 310,231
15 42 3,000 67,972 79,878 79,878 329,878 68,590 68,590 318,590
16 43 3,000 74,521 91,059 91,059 341,059 77,753 77,753 327,753
17 43 3,000 81,397 103,390 103,390 353,390 87,786 87,786 337,786
18 44 3,000 88,617 116,990 116,990 366,990 98,766 98,766 348,766
19 44 3,000 96,198 131,990 131,990 381,990 110,778 110,778 360,778
20 45 3,000 104,158 148,535 148,535 398,535 123,911 123,911 373,911
21 45 3,000 112,516 166,935 166,935 416,935 138,393 138,393 388,393
22 46 3,000 121,291 187,248 187,248 437,248 154,236 154,236 404,236
23 46 3,000 130,506 209,673 209,673 459,673 171,575 171,575 421,575
24 47 3,000 140,181 234,427 234,427 484,427 190,555 190,555 440,555
25 47 3,000 150,340 261,748 261,748 511,748 211,323 211,323 461,323
26 48 3,000 161,007 291,900 291,900 541,900 234,042 234,042 484,042
27 48 3,000 172,208 325,174 325,174 575,174 258,889 258,889 508,889
28 49 3,000 183,968 361,896 361,896 611,896 286,050 286,050 536,050
29 49 3,000 196,317 402,426 402,426 652,426 315,721 315,721 565,721
30 50 3,000 209,282 447,159 447,159 697,159 348,118 348,118 598,118
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
46
<PAGE> 49
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 890 1,768 250,000 654 1,531 250,000
2 36 3,000 6,458 3,031 3,909 250,000 2,567 3,444 250,000
3 36 3,000 9,930 5,097 5,975 250,000 4,431 5,308 250,000
4 37 3,000 13,577 7,116 7,994 250,000 6,245 7,123 250,000
5 37 3,000 17,406 9,092 9,970 250,000 8,005 8,883 250,000
6 38 3,000 21,426 11,135 11,915 250,000 9,808 10,588 250,000
7 38 3,000 25,647 13,232 13,817 250,000 11,647 12,232 250,000
8 39 3,000 30,080 15,291 15,681 250,000 13,426 13,816 250,000
9 39 3,000 34,734 17,311 17,506 250,000 15,140 15,335 250,000
10 40 3,000 39,620 19,298 19,298 250,000 16,789 16,789 250,000
11 40 3,000 44,751 21,440 21,440 250,000 18,555 18,555 250,000
12 41 3,000 50,139 23,554 23,554 250,000 20,244 20,244 250,000
13 41 3,000 55,796 25,637 25,637 250,000 21,853 21,853 250,000
14 42 3,000 61,736 27,692 27,692 250,000 23,379 23,379 250,000
15 42 3,000 67,972 29,725 29,725 250,000 24,815 24,815 250,000
16 43 3,000 74,521 31,689 31,689 250,000 26,157 26,157 250,000
17 43 3,000 81,397 33,590 33,590 250,000 27,393 27,393 250,000
18 44 3,000 88,617 35,423 35,423 250,000 28,509 28,509 250,000
19 44 3,000 96,198 37,186 37,186 250,000 29,493 29,493 250,000
20 45 3,000 104,158 38,876 38,876 250,000 30,328 30,328 250,000
21 45 3,000 112,516 40,530 40,530 250,000 31,033 31,033 250,000
22 46 3,000 121,291 42,102 42,102 250,000 31,561 31,561 250,000
23 46 3,000 130,506 43,587 43,587 250,000 31,902 31,902 250,000
24 47 3,000 140,181 44,977 44,977 250,000 32,042 32,042 250,000
25 47 3,000 150,340 46,262 46,262 250,000 31,956 31,956 250,000
26 48 3,000 161,007 47,431 47,431 250,000 31,617 31,617 250,000
27 48 3,000 172,208 48,476 48,476 250,000 30,997 30,997 250,000
28 49 3,000 183,968 49,387 49,387 250,000 30,054 30,054 250,000
29 49 3,000 196,317 50,155 50,155 250,000 28,739 28,739 250,000
30 50 3,000 209,282 50,767 50,767 250,000 26,995 26,995 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
47
<PAGE> 50
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,019 1,897 250,000 775 1,652 250,000
2 36 3,000 6,458 3,419 4,297 250,000 2,925 3,803 250,000
3 36 3,000 9,930 5,884 6,762 250,000 5,153 6,030 250,000
4 37 3,000 13,577 8,445 9,322 250,000 7,459 8,337 250,000
5 37 3,000 17,406 11,109 11,986 250,000 9,844 10,721 250,000
6 38 3,000 21,426 13,990 14,770 250,000 12,406 13,186 250,000
7 38 3,000 25,647 17,084 17,669 250,000 15,144 15,729 250,000
8 39 3,000 30,080 20,301 20,691 250,000 17,965 18,355 250,000
9 39 3,000 34,734 23,648 23,843 250,000 20,866 21,061 250,000
10 40 3,000 39,620 27,134 27,134 250,000 23,853 23,853 250,000
11 40 3,000 44,751 30,978 30,978 250,000 27,134 27,134 250,000
12 41 3,000 50,139 35,007 35,007 250,000 30,521 30,521 250,000
13 41 3,000 55,796 39,226 39,226 250,000 34,019 34,019 250,000
14 42 3,000 61,736 43,649 43,649 250,000 37,630 37,630 250,000
15 42 3,000 67,972 48,289 48,289 250,000 41,355 41,355 250,000
16 43 3,000 74,521 53,115 53,115 250,000 45,197 45,197 250,000
17 43 3,000 81,397 58,141 58,141 250,000 49,151 49,151 250,000
18 44 3,000 88,617 63,374 63,374 250,000 53,214 53,214 250,000
19 44 3,000 96,198 68,824 68,824 250,000 57,382 57,382 250,000
20 45 3,000 104,158 74,499 74,499 250,000 61,649 61,649 250,000
21 45 3,000 112,516 80,488 80,488 250,000 66,077 66,077 250,000
22 46 3,000 121,291 86,731 86,731 250,000 70,607 70,607 250,000
23 46 3,000 130,506 93,241 93,241 250,000 75,245 75,245 250,000
24 47 3,000 140,181 100,030 100,030 250,000 79,991 79,991 250,000
25 47 3,000 150,340 107,109 107,109 250,000 84,842 84,842 250,000
26 48 3,000 161,007 114,493 114,493 250,000 89,793 89,793 250,000
27 48 3,000 172,208 122,198 122,198 250,000 94,843 94,843 250,000
28 49 3,000 183,968 130,244 130,244 250,000 99,983 99,983 250,000
29 49 3,000 196,317 138,653 138,653 251,046 105,203 105,203 250,000
30 50 3,000 209,282 147,411 147,411 260,106 110,496 110,496 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
48
<PAGE> 51
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $3,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 3,000 3,150 1,148 2,026 250,000 896 1,774 250,000
2 36 3,000 6,458 3,824 4,701 250,000 3,299 4,177 250,000
3 36 3,000 9,930 6,736 7,614 250,000 5,935 6,813 250,000
4 37 3,000 13,577 9,940 10,817 250,000 8,828 9,705 250,000
5 37 3,000 17,406 13,470 14,347 250,000 12,000 12,877 250,000
6 38 3,000 21,426 17,471 18,251 250,000 15,579 16,359 250,000
7 38 3,000 25,647 21,972 22,557 250,000 19,592 20,177 250,000
8 39 3,000 30,080 26,923 27,313 250,000 23,979 24,369 250,000
9 39 3,000 34,734 32,372 32,567 250,000 28,777 28,972 250,000
10 40 3,000 39,620 38,378 38,378 250,000 34,033 34,033 250,000
11 40 3,000 44,751 45,240 45,240 250,000 40,026 40,026 250,000
12 41 3,000 50,139 52,847 52,847 250,000 46,627 46,627 250,000
13 41 3,000 55,796 61,279 61,279 250,000 53,905 53,905 250,000
14 42 3,000 61,736 70,629 70,629 250,000 61,935 61,935 250,000
15 42 3,000 67,972 81,003 81,003 250,000 70,800 70,800 250,000
16 43 3,000 74,521 92,476 92,476 250,000 80,598 80,598 250,000
17 43 3,000 81,397 105,162 105,162 269,361 91,428 91,428 250,000
18 44 3,000 88,617 119,150 119,150 295,836 103,402 103,402 256,736
19 44 3,000 96,198 134,568 134,568 323,999 116,545 116,545 280,605
20 45 3,000 104,158 151,559 151,559 353,967 130,918 130,918 305,759
21 45 3,000 112,516 170,433 170,433 386,270 146,757 146,757 332,611
22 46 3,000 121,291 191,240 191,240 420,785 164,071 164,071 361,005
23 46 3,000 130,506 214,170 214,170 457,702 182,989 182,989 391,066
24 47 3,000 140,181 239,432 239,432 497,180 203,652 203,652 422,883
25 47 3,000 150,340 267,249 267,249 539,442 226,199 226,199 456,583
26 48 3,000 161,007 297,868 297,868 584,685 250,784 250,784 492,265
27 48 3,000 172,208 331,559 331,559 633,211 277,570 277,570 530,103
28 49 3,000 183,968 368,618 368,618 685,262 306,720 306,720 570,192
29 49 3,000 196,317 409,373 409,373 741,211 338,401 338,401 612,709
30 50 3,000 209,282 454,177 454,177 801,396 372,792 372,792 657,791
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
49
<PAGE> 52
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,185 3,906 250,000 1,296 3,017 250,000
2 51 6,000 12,915 6,532 8,254 250,000 4,787 6,508 250,000
3 51 6,000 19,861 10,739 12,460 250,000 8,130 9,851 250,000
4 52 6,000 27,154 14,817 16,538 250,000 11,315 13,036 250,000
5 52 6,000 34,811 18,722 20,494 250,000 14,325 16,046 250,000
6 53 6,000 42,852 22,815 24,345 250,000 17,340 18,870 250,000
7 53 6,000 51,295 26,945 28,093 250,000 20,349 21,497 250,000
8 54 6,000 60,159 30,981 31,746 250,000 23,154 23,919 250,000
9 54 6,000 69,467 34,912 35,295 250,000 25,744 26,127 250,000
10 55 6,000 79,241 38,736 38,736 250,000 28,098 28,098 250,000
11 55 6,000 89,503 42,777 42,777 250,000 30,564 30,564 250,000
12 56 6,000 100,278 46,685 46,685 250,000 32,752 32,752 250,000
13 56 6,000 111,592 50,480 50,480 250,000 34,629 34,629 250,000
14 57 6,000 123,471 54,180 54,180 250,000 36,155 36,155 250,000
15 57 6,000 135,945 57,797 57,797 250,000 37,288 37,288 250,000
16 58 6,000 149,042 60,991 60,991 250,000 37,988 37,988 250,000
17 58 6,000 162,794 64,001 64,001 250,000 38,220 38,220 250,000
18 59 6,000 177,234 66,814 66,814 250,000 37,941 37,941 250,000
19 59 6,000 192,396 69,417 69,417 250,000 37,105 37,105 250,000
20 60 6,000 208,316 71,794 71,794 250,000 35,647 35,647 250,000
21 60 6,000 225,031 74,006 74,006 250,000 33,507 33,507 250,000
22 61 6,000 242,583 75,964 75,964 250,000 30,392 30,392 250,000
23 61 6,000 261,012 77,652 77,652 250,000 26,387 26,387 250,000
24 62 6,000 280,363 79,051 79,051 250,000 21,157 21,157 250,000
25 62 6,000 300,681 80,131 80,131 250,000 14,467 14,467 250,000
26 63 6,000 322,015 80,862 80,862 250,000 6,084 6,084 250,000
27 63 6,000 344,415 81,206 81,206 250,000 <F*> <F*> <F*>
28 64 6,000 367,936 81,113 81,113 250,000 <F*> <F*> <F*>
29 64 6,000 392,633 80,532 80,532 250,000 <F*> <F*> <F*>
30 65 6,000 418,565 79,404 79,404 250,000 <F*> <F*> <F*>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
<FN>
<F*> UNLESS ADDITIONAL PREMIIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
</TABLE>
50
<PAGE> 53
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,455 4,176 250,000 1,537 3,258 250,000
2 51 6,000 12,915 7,346 9,068 250,000 5,492 7,213 250,000
3 51 6,000 19,861 12,383 14,104 250,000 9,529 11,250 250,000
4 52 6,000 27,154 17,582 19,303 250,000 13,643 15,364 250,000
5 52 6,000 34,811 22,958 24,679 250,000 17,822 19,543 250,000
6 53 6,000 42,852 28,729 30,259 250,000 22,249 23,779 250,000
7 53 6,000 51,295 34,906 36,053 250,000 26,917 28,064 250,000
8 54 6,000 60,159 41,317 42,082 250,000 31,632 32,397 250,000
9 54 6,000 69,467 47,966 48,348 250,000 36,390 36,772 250,000
10 55 6,000 79,241 54,861 54,861 250,000 41,175 41,175 250,000
11 55 6,000 89,503 62,391 62,391 250,000 46,387 46,387 250,000
12 56 6,000 100,278 70,225 70,225 250,000 51,651 51,651 250,000
13 56 6,000 111,592 78,400 78,400 250,000 56,951 56,951 250,000
14 57 6,000 123,471 86,953 86,953 250,000 62,263 62,263 250,000
15 57 6,000 135,945 95,922 95,922 250,000 67,567 67,567 250,000
16 58 6,000 149,042 105,054 105,054 250,000 72,846 72,846 250,000
17 58 6,000 162,794 114,575 114,575 250,000 78,093 78,093 250,000
18 59 6,000 177,234 124,510 124,510 250,000 83,298 83,298 250,000
19 59 6,000 192,396 134,892 134,892 250,000 88,454 88,454 250,000
20 60 6,000 208,316 145,760 145,760 250,000 93,547 93,547 250,000
21 60 6,000 225,031 157,311 157,311 250,000 98,643 98,643 250,000
22 61 6,000 242,583 169,471 169,471 250,000 103,527 103,527 250,000
23 61 6,000 261,012 182,311 182,311 250,000 108,316 108,316 250,000
24 62 6,000 280,363 195,910 195,910 250,000 112,863 112,863 250,000
25 62 6,000 300,681 210,364 210,364 250,000 117,108 117,108 250,000
26 63 6,000 322,015 225,787 225,787 250,000 121,015 121,015 250,000
27 63 6,000 344,415 242,292 242,292 254,406 124,545 124,545 250,000
28 64 6,000 367,936 259,596 259,596 272,576 127,659 127,659 250,000
29 64 6,000 392,633 277,677 277,677 291,560 130,317 130,317 250,000
30 65 6,000 418,565 296,560 296,560 311,388 132,447 132,447 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
51
<PAGE> 54
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,725 4,447 250,000 1,779 3,501 250,000
2 51 6,000 12,915 8,194 9,916 250,000 6,228 7,949 250,000
3 51 6,000 19,861 14,162 15,884 250,000 11,049 12,770 250,000
4 52 6,000 27,154 20,696 22,417 250,000 16,277 17,998 250,000
5 52 6,000 34,811 27,864 29,586 250,000 21,942 23,663 250,000
6 53 6,000 42,852 35,948 37,478 250,000 28,277 29,807 250,000
7 53 6,000 51,295 45,028 46,176 250,000 35,329 36,476 250,000
8 54 6,000 60,159 55,014 55,779 250,000 42,968 43,733 250,000
9 54 6,000 69,467 66,000 66,382 250,000 51,261 51,644 250,000
10 55 6,000 79,241 78,097 78,097 250,000 60,278 60,278 250,000
11 55 6,000 89,503 91,867 91,867 250,000 70,559 70,559 250,000
12 56 6,000 100,278 107,115 107,115 250,000 81,856 81,856 250,000
13 56 6,000 111,592 124,038 124,038 250,000 94,296 94,296 250,000
14 57 6,000 123,471 142,850 142,850 250,000 108,027 108,027 250,000
15 57 6,000 135,945 163,789 163,789 250,000 123,232 123,232 250,000
16 58 6,000 149,042 186,971 186,971 250,000 140,138 140,138 250,000
17 58 6,000 162,794 212,828 212,828 253,265 159,028 159,028 250,000
18 59 6,000 177,234 241,492 241,492 284,960 180,242 180,242 250,000
19 59 6,000 192,396 273,157 273,157 319,593 204,201 204,201 250,000
20 60 6,000 208,316 308,135 308,135 357,436 231,207 231,207 268,201
21 60 6,000 225,031 347,084 347,084 399,147 261,196 261,196 300,375
22 61 6,000 242,583 390,209 390,209 440,937 294,312 294,312 332,572
23 61 6,000 261,012 437,984 437,984 486,163 330,966 330,966 367,373
24 62 6,000 280,363 490,944 490,944 535,129 371,569 371,569 405,010
25 62 6,000 300,681 549,697 549,697 588,176 416,629 416,629 445,793
26 63 6,000 322,015 614,936 614,936 645,683 466,759 466,759 490,097
27 63 6,000 344,415 687,100 687,100 721,454 522,011 522,011 548,112
28 64 6,000 367,936 766,900 766,900 805,245 582,879 582,879 612,023
29 64 6,000 392,633 855,123 855,123 897,879 649,899 649,899 682,394
30 65 6,000 418,565 952,629 952,629 1,000,260 723,651 723,651 759,834
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
52
<PAGE> 55
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,179 3,901 253,901 1,276 2,997 252,997
2 51 6,000 12,915 6,512 8,233 258,233 4,728 6,449 256,449
3 51 6,000 19,861 10,691 12,412 262,412 8,008 9,729 259,729
4 52 6,000 27,154 14,727 16,448 266,448 11,103 12,825 262,825
5 52 6,000 34,811 18,624 20,346 270,346 13,995 15,716 265,716
6 53 6,000 42,852 22,592 24,122 274,122 16,858 18,388 268,388
7 53 6,000 51,295 26,627 27,774 277,774 19,677 20,825 270,825
8 54 6,000 60,159 30,548 31,313 281,313 22,251 23,016 273,016
9 54 6,000 69,467 34,342 34,724 284,724 24,566 24,948 274,948
10 55 6,000 79,241 38,001 38,001 288,001 26,595 26,595 276,595
11 55 6,000 89,503 41,836 41,836 291,836 28,676 28,676 278,676
12 56 6,000 100,278 45,497 45,497 295,497 30,409 30,409 280,409
13 56 6,000 111,592 49,004 49,004 299,004 31,754 31,754 281,754
14 57 6,000 123,471 52,377 52,377 302,377 32,665 32,665 282,665
15 57 6,000 135,945 55,631 55,631 305,631 33,092 33,092 283,092
16 58 6,000 149,042 58,309 58,309 308,309 32,992 32,992 282,992
17 58 6,000 162,794 60,722 60,722 310,722 32,332 32,332 282,332
18 59 6,000 177,234 62,846 62,846 312,846 31,071 31,071 281,071
19 59 6,000 192,396 64,658 64,658 314,658 29,172 29,172 279,172
20 60 6,000 208,316 66,132 66,132 316,132 26,584 26,584 276,584
21 60 6,000 225,031 67,310 67,310 317,310 23,251 23,251 273,251
22 61 6,000 242,583 68,096 68,096 318,096 18,895 18,895 268,895
23 61 6,000 261,012 68,467 68,467 318,467 13,684 13,684 263,684
24 62 6,000 280,363 68,391 68,391 318,391 7,323 7,323 257,323
25 62 6,000 300,681 67,827 67,827 317,827 <F*> <F*> <F*>
26 63 6,000 322,015 66,735 66,735 316,735 <F*> <F*> <F*>
27 63 6,000 344,415 65,062 65,062 315,062 <F*> <F*> <F*>
28 64 6,000 367,936 62,750 62,750 312,750 <F*> <F*> <F*>
29 64 6,000 392,633 59,740 59,740 309,740 <F*> <F*> <F*>
30 65 6,000 418,565 55,974 55,974 305,974 <F*> <F*> <F*>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
<FN>
<F*> UNLESS ADDITIONAL PREMIIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
</TABLE>
53
<PAGE> 56
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,449 4,170 254,170 1,516 3,237 253,237
2 51 6,000 12,915 7,324 9,045 259,045 5,426 7,147 257,147
3 51 6,000 19,861 12,328 14,049 264,049 9,388 11,109 261,109
4 52 6,000 27,154 17,475 19,196 269,196 13,390 15,111 265,111
5 52 6,000 34,811 22,775 24,496 274,496 17,411 19,132 269,132
6 53 6,000 42,852 28,442 29,972 279,972 21,624 23,154 273,154
7 53 6,000 51,295 34,480 35,628 285,628 26,009 27,157 277,157
8 54 6,000 60,159 40,715 41,480 291,480 30,362 31,127 281,127
9 54 6,000 69,467 47,140 47,523 297,523 34,663 35,045 285,045
10 55 6,000 79,241 53,756 53,756 303,756 38,879 38,879 288,879
11 55 6,000 89,503 60,921 60,921 310,921 43,378 43,378 293,378
12 56 6,000 100,278 68,297 68,297 318,297 47,759 47,759 297,759
13 56 6,000 111,592 75,912 75,912 325,912 51,972 51,972 301,972
14 57 6,000 123,471 83,796 83,796 333,796 55,954 55,954 305,954
15 57 6,000 135,945 91,978 91,978 341,978 59,639 59,639 309,639
16 58 6,000 149,042 99,996 99,996 349,996 62,961 62,961 312,961
17 58 6,000 162,794 108,157 108,157 358,157 65,862 65,862 315,862
18 59 6,000 177,234 116,441 116,441 366,441 68,273 68,273 318,273
19 59 6,000 192,396 124,825 124,825 374,825 70,126 70,126 320,126
20 60 6,000 208,316 133,283 133,283 383,283 71,332 71,332 321,332
21 60 6,000 225,031 141,923 141,923 391,923 71,838 71,838 321,838
22 61 6,000 242,583 150,595 150,595 400,595 71,275 71,275 321,275
23 61 6,000 261,012 159,269 159,269 409,269 69,752 69,752 319,752
24 62 6,000 280,363 167,910 167,910 417,910 66,908 66,908 316,908
25 62 6,000 300,681 176,469 176,469 426,469 62,525 62,525 312,525
26 63 6,000 322,015 184,894 184,894 434,894 56,425 56,425 306,425
27 63 6,000 344,415 193,119 193,119 443,119 48,427 48,427 298,427
28 64 6,000 367,936 201,066 201,066 451,066 38,356 38,356 288,356
29 64 6,000 392,633 208,656 208,656 458,656 26,046 26,046 276,046
30 65 6,000 418,565 215,801 215,801 465,801 11,281 11,281 261,281
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
54
<PAGE> 57
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,719 4,440 254,440 1,757 3,478 253,478
2 51 6,000 12,915 8,169 9,891 259,891 6,155 7,876 257,876
3 51 6,000 19,861 14,100 15,821 265,821 10,888 12,609 262,609
4 52 6,000 27,154 20,569 22,291 272,291 15,976 17,697 267,697
5 52 6,000 34,811 27,639 29,361 279,361 21,433 23,154 273,154
6 53 6,000 42,852 35,581 37,111 287,111 27,472 29,002 279,002
7 53 6,000 51,295 44,463 45,610 295,610 34,113 35,260 285,260
8 54 6,000 60,159 54,181 54,946 304,946 41,195 41,960 291,960
9 54 6,000 69,467 64,812 65,194 315,194 48,748 49,130 299,130
10 55 6,000 79,241 76,400 76,440 326,440 56,789 56,789 306,789
11 55 6,000 89,503 89,573 89,573 339,573 65,789 65,789 315,789
12 56 6,000 100,278 103,985 103,985 353,985 75,416 75,416 325,416
13 56 6,000 111,592 119,834 119,834 369,834 85,691 85,691 335,691
14 57 6,000 123,471 137,293 137,293 387,293 96,628 96,628 346,628
15 57 6,000 135,945 156,550 156,550 406,550 108,241 108,241 358,241
16 58 6,000 149,042 177,312 177,312 427,312 120,551 120,551 370,551
17 58 6,000 162,794 200,065 200,065 450,065 133,590 133,590 383,590
18 59 6,000 177,234 224,993 224,993 474,993 147,387 147,387 397,387
19 59 6,000 192,396 252,303 252,303 502,303 161,978 161,978 411,978
20 60 6,000 208,316 282,220 282,220 532,220 177,384 177,384 427,384
21 60 6,000 225,031 315,278 315,278 565,278 193,776 193,776 443,776
22 61 6,000 242,583 351,529 351,529 601,529 210,826 210,826 460,826
23 61 6,000 261,012 391,292 391,292 641,292 228,772 228,772 478,772
24 62 6,000 280,363 434,910 434,910 684,910 247,389 247,389 497,389
25 62 6,000 300,681 482,756 482,756 732,756 266,594 266,594 516,594
26 63 6,000 322,015 535,239 535,239 785,239 286,345 286,345 536,345
27 63 6,000 344,415 592,806 592,806 842,806 306,603 306,603 556,603
28 64 6,000 367,936 655,940 655,940 905,940 327,340 327,340 577,340
29 64 6,000 392,633 725,180 725,180 975,180 348,544 348,544 598,544
30 65 6,000 418,565 801,120 801,120 1,051,120 370,157 370,157 620,157
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
55
<PAGE> 58
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,185 3,906 250,000 1,296 3,017 250,000
2 51 6,000 12,915 6,532 8,254 250,000 4,787 6,508 250,000
3 51 6,000 19,861 10,739 12,460 250,000 8,130 9,851 250,000
4 52 6,000 27,154 14,817 16,538 250,000 11,315 13,036 250,000
5 52 6,000 34,811 18,772 20,494 250,000 14,325 16,046 250,000
6 53 6,000 42,852 22,815 24,345 250,000 17,340 18,870 250,000
7 53 6,000 51,295 26,945 28,093 250,000 20,349 21,497 250,000
8 54 6,000 60,159 30,981 31,746 250,000 23,154 23,919 250,000
9 54 6,000 69,467 34,912 35,295 250,000 25,744 26,127 250,000
10 55 6,000 79,241 38,736 38,736 250,000 28,098 28,098 250,000
11 55 6,000 89,503 42,777 42,777 250,000 30,564 30,564 250,000
12 56 6,000 100,278 46,685 46,685 250,000 32,752 32,752 250,000
13 56 6,000 111,592 50,480 50,480 250,000 34,629 34,629 250,000
14 57 6,000 123,471 54,180 54,180 250,000 36,155 36,155 250,000
15 57 6,000 135,945 57,797 57,797 250,000 37,288 37,288 250,000
16 58 6,000 149,042 60,991 60,991 250,000 37,988 37,988 250,000
17 58 6,000 162,794 64,001 64,001 250,000 38,220 38,220 250,000
18 59 6,000 177,234 66,814 66,814 250,000 37,941 37,941 250,000
19 59 6,000 192,396 69,417 69,417 250,000 37,105 37,105 250,000
20 60 6,000 208,316 71,794 71,794 250,000 35,647 35,647 250,000
21 60 6,000 225,031 74,006 74,006 250,000 33,507 33,507 250,000
22 61 6,000 242,583 75,964 75,964 250,000 30,392 30,392 250,000
23 61 6,000 261,012 77,652 77,652 250,000 26,387 26,387 250,000
24 62 6,000 280,363 79,051 79,051 250,000 21,157 21,157 250,000
25 62 6,000 300,681 80,131 80,131 250,000 14,467 14,467 250,000
26 63 6,000 322,015 80,862 80,862 250,000 6,084 6,084 250,000
27 63 6,000 344,415 81,206 81,206 250,000 <F*> <F*> <F*>
28 64 6,000 367,936 81,113 81,113 250,000 <F*> <F*> <F*>
29 64 6,000 392,633 80,532 80,532 250,000 <F*> <F*> <F*>
30 65 6,000 418,565 79,404 79,404 250,000 <F*> <F*> <F*>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
<FN>
<F*> UNLESS ADDITIONAL PREMIIUM IS PAID, POLICY WILL LAPSE WITHOUT VALUE
</TABLE>
56
<PAGE> 59
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,455 4,176 250,000 1,537 3,258 250,000
2 51 6,000 12,915 7,346 9,068 250,000 5,492 7,213 250,000
3 51 6,000 19,861 12,383 14,104 250,000 9,529 11,250 250,000
4 52 6,000 27,154 17,582 19,303 250,000 13,643 15,364 250,000
5 52 6,000 34,811 22,958 24,679 250,000 17,822 19,543 250,000
6 53 6,000 42,852 28,729 30,259 250,000 22,249 23,779 250,000
7 53 6,000 51,295 34,906 36,053 250,000 26,917 28,064 250,000
8 54 6,000 60,159 41,317 42,082 250,000 31,632 32,397 250,000
9 54 6,000 69,467 47,966 48,348 250,000 36,390 36,772 250,000
10 55 6,000 79,241 54,861 54,861 250,000 41,175 41,175 250,000
11 55 6,000 89,503 62,391 62,391 250,000 46,387 46,387 250,000
12 56 6,000 100,278 70,225 70,225 250,000 51,651 51,651 250,000
13 56 6,000 111,592 78,400 78,400 250,000 56,951 56,951 250,000
14 57 6,000 123,471 86,953 86,953 250,000 62,263 62,263 250,000
15 57 6,000 135,945 95,922 95,922 250,000 67,567 67,567 250,000
16 58 6,000 149,042 105,054 105,054 250,000 72,846 72,846 250,000
17 58 6,000 162,794 114,575 114,575 250,000 78,093 78,093 250,000
18 59 6,000 177,234 124,510 124,510 250,000 83,298 83,298 250,000
19 59 6,000 192,396 134,892 134,892 250,000 88,454 88,454 250,000
20 60 6,000 208,316 145,760 145,760 250,000 93,547 93,547 250,000
21 60 6,000 225,031 157,311 157,311 250,000 98,643 98,643 250,000
22 61 6,000 242,583 169,455 169,455 254,013 103,527 103,527 250,000
23 61 6,000 261,012 182,062 182,062 267,359 108,316 108,316 250,000
24 62 6,000 280,363 195,121 195,121 280,858 112,863 112,863 250,000
25 62 6,000 300,681 208,640 208,640 294,621 117,108 117,108 250,000
26 63 6,000 322,015 222,629 222,629 308,697 121,015 121,015 250,000
27 63 6,000 344,415 237,093 237,093 323,086 124,545 124,545 250,000
28 64 6,000 367,936 252,037 252,037 337,806 127,659 127,659 250,000
29 64 6,000 392,633 267,469 267,469 352,871 130,317 130,317 250,000
30 65 6,000 418,565 283,396 283,396 368,245 132,447 132,447 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
57
<PAGE> 60
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) ANNUAL PREMIUM = $6,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 6,000 6,300 2,725 4,447 250,000 1,779 3,501 250,000
2 51 6,000 12,915 8,194 9,916 250,000 6,228 7,949 250,000
3 51 6,000 19,861 14,162 15,884 250,000 11,049 12,770 250,000
4 52 6,000 27,154 20,696 22,417 250,000 16,277 17,998 250,000
5 52 6,000 34,811 27,864 29,586 250,000 21,942 23,663 250,000
6 53 6,000 42,852 35,948 37,478 250,000 28,277 29,807 250,000
7 53 6,000 51,295 45,028 46,176 250,000 35,329 36,476 250,000
8 54 6,000 60,159 55,014 55,779 250,000 42,968 43,733 250,000
9 54 6,000 69,467 66,000 66,382 250,000 51,261 51,644 250,000
10 55 6,000 79,241 78,097 78,097 250,000 60,278 60,278 250,000
11 55 6,000 89,503 91,867 91,867 250,000 70,559 70,559 250,000
12 56 6,000 100,278 107,115 107,115 250,000 81,856 81,856 250,000
13 56 6,000 111,592 124,038 124,038 250,000 94,296 94,296 250,000
14 57 6,000 123,471 142,841 142,841 258,628 108,027 108,027 250,000
15 57 6,000 135,945 163,606 163,606 288,683 123,232 123,232 250,000
16 58 6,000 149,042 186,254 186,254 320,469 140,138 140,138 250,000
17 58 6,000 162,794 211,126 211,126 354,480 158,878 158,878 266,757
18 59 6,000 177,234 238,427 238,427 390,877 179,210 179,210 293,797
19 59 6,000 192,396 268,383 268,383 429,869 201,238 201,238 322,323
20 60 6,000 208,316 301,239 301,239 471,679 225,087 225,087 352,441
21 60 6,000 225,031 337,568 337,568 516,985 251,102 251,102 384,562
22 61 6,000 242,583 377,425 377,425 565,760 279,136 279,136 418,424
23 61 6,000 261,012 421,143 421,143 618,448 309,456 309,456 454,436
24 62 6,000 280,363 469,085 469,085 675,200 342,098 342,098 492,416
25 62 6,000 300,681 521,637 521,637 736,603 377,177 377,177 532,611
26 63 6,000 322,015 579,219 579,219 803,145 414,844 414,844 575,223
27 63 6,000 344,415 642,285 642,285 875,242 455,272 455,272 620,399
28 64 6,000 367,936 711,318 711,318 953,380 498,657 498,657 668,350
29 64 6,000 392,633 786,850 786,850 1,038,091 545,229 545,229 719,321
30 65 6,000 418,565 869,465 869,465 1,129,783 595,221 595,221 773,430
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
58
