<PAGE>
REGISTRATION NO. 333-30329
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
POST-EFFECTIVE AMENDMENT NO. 17
TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUST
REGISTERED ON FORM N-8B-2
A. Exact name of Trust: Separate Account SL
B. Name of depositor: SAFECO Life Insurance Company
C. Complete address of depositor's principal executive offices:
15411 N.E. 51st St., Redmond, Washington 98052
D. Name and address of agent for service:
William E. Crawford, Esq.
SAFECO Life Insurance Company
15411 N.E. 51st Street
Redmond, Washington 98052
Copies to:
Leslie A. Harrison
SAFECO Corporation
SAFECO Plaza
Seattle, WA 98185
E. Title and amount of securities being registered:
Individual Flexible Premium Variable Life Insurance Policies
Approximate Date of Proposed Public Offering:
As soon as is possible after Effective Date.
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485.
[ ] on April 30, 1999 pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485.
[X] on April 30, 1999 pursuant to paragraph (a)(i) of Rule 485.
[ ] 75 days after filing pursuant to paragraph (a)(i)
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Rule 24f-2. Registrant filed the Rule 24f-2
Notice for the most recent fiscal year on or about March 28, 1998.
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
N-8B-2 Items Caption in Prospectus
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1. SAFECO, The Separate Account
2. SAFECO
3. Not Applicable
4. Distribution of the Policies
5. The Separate Account
6.(a) Not Applicable
6.(b) Not Applicable
9. Legal Proceedings
10. The Policy
11. Variable Insurance Products Funds
12. Variable Insurance Products Funds
13. Charges and Deductions
14. The Policy
15. The Separate Account
16. Variable Insurance Products Funds
17. Policy Benefits and Rights
18. The Policy
19. Not Applicable
20. Not Applicable
21. Not Applicable
22. Not Applicable
23. Not Applicable
24. Not Applicable
25. SAFECO
26. SAFECO
27. SAFECO
28. SAFECO
29. SAFECO
30. SAFECO
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. Not Applicable
36. SAFECO
37. Not Applicable
38. Distribution of the Policies
39. Distribution of the Policies
40. Not Applicable
41.(a) Distribution of the Policies
42. Not Applicable
43. Not Applicable
44. The Policy
45. Not Applicable
46. Policy Benefits and Rights
47. Not Applicable
48. Not Applicable
49. Not Applicable
50. Not Applicable
51. SAFECO, The Policy
52. Variable Insurance Products Funds
53. Tax Status
54. Financial Statements
55. Not Applicable
<PAGE>
REPRESENTATIONS
1. Registrant represents that Section (b)(13)(iii)(F) of Rule 6e-3(T) is being
relied on.
2. Registrant represents that the level of the risk charge is reasonable in
relation to the risks assumed by the life insurer under the Policies.
3. Registrant represents that it has analyzed the risk charge taking into
consideration such facts as current charge levels, potential adverse
mortality, the manner in which charges are imposed, the markets in which
the Policy will be offered and anticipated sales and lapse rates.
Registrant also represents that a memorandum has been prepared in
connection with the analysis of the risk charge as set forth above.
Registrant undertakes to keep and make available to the Commission on
request the memorandum.
4. Registrant represents that the Company has concluded that there is a
reasonable likelihood that the distribution financing arrangement of the
Separate Account will benefit the Separate Account and policyholders and
will keep and make available to the Commission on request a memorandum
setting forth the basis for this representation.
5. Registrant represents that the Separate Account will invest only in
management investment companies which have undertaken to have a Board of
Directors, a majority of whom are not interested persons of the Company,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
<PAGE>
PREMIER
ACCUMULATION LIFE-TM-
INDIVIDUAL FLEXIBLE PREMIUM LIFE INSURANCE POLICY
issued by
SAFECO SEPARATE ACCOUNT SL
and
SAFECO LIFE INSURANCE COMPANY
This prospectus describes the PREMIER Accumulation Life Individual Flexible
Premium Variable Life Insurance Policy and contains important information.
Please read it before investing and keep it on file for future reference.
This prospectus has been filed with the Securities and Exchange Commission
(SEC). The SEC maintains a website (http:\\www.sec.gov) that contains material
incorporated by reference, and other information regarding registrants that file
electronically with the SEC. You may request a free paper copy of this
prospectus if you have received it in an electronic format, by calling us at
(800) 426-7355 or writing us at: PO Box 34690 Seattle, WA 98124-1690.
VARIABLE INSURANCE PRODUCTS FUND
Managed by Fidelity Management & Research Company
- VIP Money Market Portfolio
- VIP High Income Portfolio
- VIP Equity-Income Portfolio
- VIP Growth Portfolio
- VIP Overseas Portfolio
VARIABLE INSURANCE PRODUCTS FUND II
Managed by Fidelity Management & Research Company
- VIP II Investment Grade Bond Portfolio
- VIP II Asset Manager Portfolio
- VIP II Index 500 Portfolio
- VIP II Asset Manager: Growth Portfolio
- VIP II Contrafund Portfolio
VARIABLE INSURANCE PRODUCTS FUND III
Managed by Fidelity Management & Research Company
- VIP III Growth Opportunities Portfolio
- VIP III Growth & Income Portfolio
- VIP III Balanced Portfolio
LEXINGTON NATURAL RESOURCES TRUST
Managed by Lexington Management Corporation
- Lexington Natural Resources Trust
LEXINGTON EMERGING MARKETS FUND, INC.
Managed by Lexington Management Corporation
- Lexington Emerging Markets Fund, Inc.
SAFECO RESOURCE SERIES TRUST
Managed by SAFECO Asset Management
- RST Equity Portfolio
- RST Growth Portfolio
- RST Northwest Portfolio
- RST Bond Portfolio
- RST Small Company Portfolio
WANGER ADVISORS TRUST
Managed by Wanger Asset Management, L.P.
- Wanger U.S. Small Cap Portfolio
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
Managed by American Century Investment Management, Inc.
- VP International
- VP Balanced
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INVESTMENT IN A VARIABLE LIFE INSURANCE POLICY IS SUBJECT TO RISKS, INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL. THE POLICIES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.
NEITHER THE SEC OR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
DATED: _________, 1999
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<PAGE>
TABLE OF CONTENTS Page
SUMMARY
FEE TABLE
PART I
1. THE POLICY
Owner
Insured
Beneficiary
Assignment
2. PREMIUMS
Allocation of Premium and Cash Value
Accumulation Units
Policy Lapse and Grace Period
Reinstatement
Right to Examine
3. INVESTMENT OPTIONS
Variable Investment Options
Fixed Account
Transfers
Scheduled Transfers
Substitution
4. EXPENSES
Insurance Charge
Monthly Charges
Surrender Charge
Premium Tax Charge
Income or Other Taxes
Portfolio Expenses
5. INSURANCE BENEFITS
Changes in the Face Amount of Insurance and/or the Death Benefit Options
Guaranteed Death Benefit Endorsement
Extended Maturity Benefit Endorsement
6. TAXES
Life Insurance In General
Diversification
Tax Withholding
7. ACCESS TO YOUR MONEY
Loans
Withdrawals
SMART-TM- Distributions
Surrender
Maturity Date
Minimum Value
<PAGE>
8. OTHER INFORMATION
SAFECO Life
Separate Account
General Account
Distribution (Principal Underwriter)
Legal Proceedings
Right to Suspend Payments, Transfers, Loans, or Withdrawals
Voting Rights
Disregard of Voting Instructions
Reduction of Charges or Additional Amounts Credited
Year 2000
Internet Information
Experts
Financial Statements
PART II
Executive Officers and Directors of SAFECO Life
Misstatement of Age or Sex
SAFECO Life's Right to Contest
Federal Tax Status
Advertising
Appendix A- Financial Statements
Appendix B- Hypothetical Illustrations
Appendix C- Illustrations
Appendix D- Standard and Poor's 500
Appendix E- Long Term Market Trends
<PAGE>
SUMMARY
This Prospectus is divided into three parts, the Summary, Part I and Part II.
The topics in this Summary correspond to sections in Part I of the Prospectus
which discuss the topics in detail. Other important information is contained in
Part II.
THE POLICY
The life insurance policy is an agreement between you, the owner, and SAFECO
Life Insurance Company, ("SAFECO Life", "we" and "us"). In the policy we
promise to pay a death benefit to the named beneficiary when the insured dies.
The insured is the person covered under the policy. The owner can, but does not
have to be, the same as the insured.
The policy can be used for estate planning or to save for retirement. You
should consider the policy in conjunction with other insurance you own. The
policy is not suitable as a short-term investment.
You can choose among 23 variable investment portfolios and 1 fixed account. At
any one time you can have money in 17 of these portfolios and the fixed account.
The value of the portfolios can fluctuate up or down based on the performance of
the underlying investments. Your investment in the portfolios is not guaranteed
and you may lose money. The fixed account offers an interest rate guaranteed by
SAFECO Life. Your choices for the various investment options are found in
Section 3.
Your earnings are based on the investment performance of the portfolios you
select and/or the interest rate credited to the fixed account. Your earnings
are generally not taxed unless you take them out.
The amount of money you are able to accumulate in your policy value determines
the amount available for policy charges, loans, withdrawal or surrender, and may
affect the death benefit.
PREMIUMS
Premiums are the monies you give us to buy your policy. A medical examination
and other information may be required before we accept premium. The initial
premium is due before or when you receive your policy. You may vary the amount
and the
<PAGE>
frequency of subsequent premiums as long as total premiums received do not
disqualify the policy as life insurance under federal tax law.
You must pay enough premium or have sufficient money in your policy account to
cover all policy charges or your policy will lapse.
INVESTMENT OPTIONS
Not all portfolios listed below may be available for all policies. You can have
money in up to 17 of available portfolios under the policy at any one time. Each
portfolio is fully described in its accompanying prospectus.
MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP Money Market Portfolio
VIP High Income Portfolio
VIP Equity-Income Portfolio
VIP Growth Portfolio
VIP Overseas Portfolio
VIP II Investment Grade Bond Portfolio
VIP II Asset Manager Portfolio
VIP II Index 500 Portfolio
VIP II Asset Manager: Growth Portfolio
VIP II Contrafund Portfolio
VIP III Growth Opportunities Portfolio
VIP III Growth & Income Portfolio
VIP III Balanced Portfolio
MANAGED BY LEXINGTON MANAGEMENT CORPORATION
Lexington Natural Resources Trust
Lexington Emerging Markets Fund, Inc.
MANAGED BY SAFECO ASSET MANAGEMENT COMPANY
RST Equity Portfolio
RST Growth Portfolio
RST Northwest Portfolio
RST Bond Portfolio
RST Small Company Stock Portfolio
MANAGED BY WANGER ASSET MANAGEMENT, L.P.
Wanger U.S. Small Cap Portfolio
MANAGED BY AMERICAN CENTURY INVESTMENT MANAGEMENT, INC
VP Balanced
VP International
Depending upon market conditions, you can make or lose money in any of these
portfolios. You may also allocate money to the fixed account, which credits
guaranteed interest.
<PAGE>
EXPENSES
The policy has insurance features and investment features, and there are costs
related to each.
We deduct a Mortality and Expense Risk charge which equals .70% annually of
the average daily value of the portion of your policy allocated to the
portfolios. This is not charged on money allocated to the fixed account.
Each policy month we deduct an administration charge. During the first
policy year the monthly administration charge is $25. After the first policy
year, the charge drops to $5 per month.
Each policy month we deduct a cost of insurance charge from the policy value.
This charge depends on the sex, age and risk classification of the insured, the
amount of insurance coverage, and the cost of any additional benefits provided
by riders to the policy.
If you surrender your policy or reduce the amount of insurance specified in
your policy ("face amount") during the first ten policy years, we will deduct
a surrender charge. The surrender charge will be the lesser of 50% for the
first 6 years of the annual level premium required to keep the face amount of
insurance in force, decreasing by 10% each year until it reaches 0% for years
11 or after, or 30% of the actual premium paid in the first year up to the
annual level premium described above, plus 9% of all other premiums. If you
request a reduction in face amount, the surrender charge applies on a pro
rata basis.
We deduct a premium tax of up to 3.5% depending on the state.
There are also annual portfolio charges that vary depending upon the portfolios
you select. In 1997, these expenses ranged from 0.28% to 1.84%.
Your policy could lapse if your surrender value is insufficient to cover any
charges due. See Section 4 - Expenses for a complete discussion of charges.
<PAGE>
INSURANCE BENEFITS
The policy has a face amount of insurance. The actual amount paid to the
beneficiary at the insured's death depends on the death benefit option you
select, either face amount or face amount plus policy value, and if there are
any outstanding loans or charges. Withdrawals reduce the face amount of
insurance by the amount of the withdrawal.
TAXES
Your policy is designed to qualify as life insurance under applicable tax
law. The death benefit is paid to the beneficiary free of federal income tax.
Estate and other taxes may apply. Investment earnings are not taxed unless
you take them out. Generally, you're allowed to withdraw your investment in
the policy before withdrawing taxable earnings. If your policy is a modified
endowment contract (MEC), loans and withdrawals are treated as distributions
of taxable earnings first. A 10% tax penalty may also apply unless you're
over age 59 1/2 or disabled. There are several ways your policy can become a
MEC. We monitor the status of your policy and will advise you when you are
about to perform a transaction that may cause it to become a MEC. You should
consult your tax advisor to determine the impact MEC status will have on you
before going forward with such a transaction.
Other events such as a policy lapse, surrender or reaching the maturity date
during the life of the insured may also cause unintended tax consequences. This
is only a summary. Tax laws are complex and subject to change. You are
encouraged to seek advice from a competent tax advisor prior to purchasing this
policy and periodically throughout your ownership of it.
ACCESS TO YOUR MONEY
You may surrender your policy at any time and receive the surrender value.
During the first ten policy years, you will be charged a surrender charge.
You may take some of your policy value as preferred loans, non-preferred
loans, or, after the first policy year, withdrawals. Non-preferred loans are
charged loan interest during the first ten policy years. Withdrawals and
loans affect the policy value, investment performance, and the death benefit.
OTHER INFORMATION
RIGHT TO EXAMINE. You may examine the policy and if for any reason you are
not satisfied, you may cancel the policy by returning it to us with a written
request for cancellation by the later of: (a) the 30th day after receipt; or
(b) the 45th day after Part I of the application was signed. If you cancel
the policy, SAFECO Life will refund an amount equal to the premium payments
made under the policy.
TRANSACTIONS. You can initiate transfers or withdrawals as needed or schedule
them in advance under the following strategies:
<PAGE>
- Dollar Cost Averaging: You may elect to automatically transfer a set
amount from any investment option to any other investment options on a
regular basis. This feature attempts to achieve a lower average cost
per unit over time.
- Portfolio Rebalancing: You may elect to have each portfolio
rebalanced on a regular basis to maintain your specified allocation
percentages.
- SMART Distribution Program: After the second policy year, you may
elect to take systematic withdrawals, loans, or a combination of both
so that you receive a level stream of income over a time period you
select. There may be tax consequences.
INQUIRIES
If you need more information, please contact us at:
SAFECO Life Insurance Company
15411 N.E. 51st Street
Redmond, WA 98052
800-426-7355
http:\\www.SAFECO.com
<PAGE>
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SAFECO SEPARATE ACCOUNT SL FEE TABLE
- --------------------------------------------------------------------------------
The purpose of the Fee Table is to show you the various expenses you will incur
directly and indirectly by investing in the policy. The Fee Table reflects the
expenses of the Separate Account as well as the portfolios.
ADMINISTRATION CHARGE
$25.00 each month for the first policy year.
$5.00 each month thereafter.
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COST OF INSURANCE CHARGE
This charge is based on the insured's sex, age and risk classification and
the 1980 Commissioner's
Standard Ordinary Mortality Table. It is deducted each month.
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SURRENDER CHARGE
This charge is assessed if the policy is surrendered in the first 10 policy
years. It will be the lesser of:
- 50% of the required annual level premium for years 1 through 6,
decreasing by 10% per year for years 7 through 10;
or
- 30% of the actual premium paid in the first year, up to the annual
level premium, plus 9% of all other premiums.
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SEPARATE ACCOUNT ANNUAL EXPENSES Mortality and Expense Risk Charge... .70%
(as a percentage of average account value)
<TABLE>
<CAPTION>
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PORTFOLIO EXPENSES Other Expenses
(as a percentage of average net assets) (after expense
Management reimbursement for Total Annual
Fees certain Portfolios) Portfolio Expenses
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Managed by Fidelity Management & Research Company (b)
VIP Money Market Portfolio .21% .10% .31%
VIP High Income Portfolio .59% .12% .71%
VIP Equity-Income Portfolio .50% .08% .58%
VIP Growth Portfolio .60% .09% .69%
VIP Overseas Portfolio .75% .17% .92%
VIP II Investment Grade Bond Portfolio .44% .14% .58%
VIP II Asset Manager Portfolio .55% .10% .65%
VIP II Index 500 Portfolio (a) .24% .04% .28%
VIP II Asset Manager: Growth Portfolio .60% .11% .71%
VIP II Contrafund Portfolio .60% .17% .77%
VIP III Growth Opportunities Portfolio .45% .16% .61%
VIP III Growth & Income Portfolio .60% .14% .74%
VIP III Balanced Portfolio .49% .21% .70%
Managed by Lexington Management Corporation (a)
Lexington Natural Resources Trust 1.00% .25% 1.25%
Lexington Emerging Markets Fund, Inc. .85% .99% 1.84%
Managed by SAFECO Asset Management Company (a)
RST Equity Portfolio .73% .02% .75%
RST Growth Portfolio .74% .03% .77%
RST Northwest Portfolio .73% .00% .73%
RST Bond Portfolio .74% .00% .74%
RST Small Company Stock Portfolio .85% .10% .95%
Managed by Wanger Asset Management, L.P. (b)
Wanger U.S. Small Cap Portfolio .97% .09% 1.06%
Managed by American Century Investment Management, Inc (a)
VP Balanced 1.00% .00% 1.00%
VP International 1.50% .00% 1.50%
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</TABLE>
<PAGE>
(a) In some cases the fund advisers agree to waive or reimburse all or a
portion of the portfolio expenses. For those portfolios where such an
agreement exists, the expenses absent waiver or reimbursement would have been
.40% for the VIP II Index 500 Portfolio; 1.91% for the Lexington Emerging
Markets Fund, Inc; .94% for the RST Equity Portfolio; and .90% for the RST
Bond Portfolio. In addition, we have Fund Participation Agreements with each
of the non-SAFECO fund managers that describe the administrative practices
and responsibilities of the parties.
(b) A portion of the brokerage commissions certain funds pay was used to
reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian whereby credits realized, as a result of
uninvested cash balances were used to reduce custodian expenses. Including
these reductions, the total operating expenses presented in the table would
have been .57% for the VIP Equity-Income Portfolio; .67% for the VIP Growth
Portfolio; .90% for VIP Overseas Portfolio; .64% for the VIP II Asset Manager
Portfolio; .68% for the VIP II Contrafund Portfolio; .76% for the VIP II
Asset Manager: Growth Portfolio; .73% for the VIP III Growth Opportunities
Portfolio; .60% for the VIP III Balanced Portfolio; and 1.04% for the Wanger
U.S. Small Cap Portfolio.
The above portfolio expenses were provided by the portfolios. We have not
independently verified the accuracy of the information.
<PAGE>
1. THE POLICY
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The Flexible Premium Variable Life Insurance Policy described in this
prospectus is a contract between you, the owner, and SAFECO Life Insurance
Company, ("SAFECO Life", "we" and "us"). While the policy is in force, we
promise to pay a death benefit to the named beneficiary when the insured dies.
The policy is called "flexible" because you can vary the amount and
frequency of premiums, choose between death benefit options, and
increase or decrease the face amount of insurance.
The policy is called "variable" because you can choose among 23
variable investment portfolios in which you can make or lose money
depending upon market conditions. The investment performance of
the portfolio(s) you choose affects the value of your policy.
The policy also has a fixed account. Your money earns interest at a rate we
set. The annual effective interest rate will never be less than 4% and is
guaranteed for at least 12 months.
The policy benefits from tax deferral. While the insured is living, you pay
no tax on policy earnings unless you take money out. When the insured dies,
the death benefit is paid to your named beneficiary free from federal income
tax.
OWNER
The owner of the policy is as shown on the policy application
unless changed. You, as owner, may exercise all ownership rights
under the policy.
INSURED
The insured is the person whose life is covered under the policy.
The owner can, but does not have to be, the same as the insured.
BENEFICIARY
The beneficiary is the person or entity you choose to receive the death
benefit when the insured dies.
ASSIGNMENT You may assign the policy. The assignment will become effective
when we receive written notification. Your rights and those of any other
person under the policy are subject to the assignment. We are not
responsible for the validity of any assignments. An absolute assignment will
be considered a change of ownership.
<PAGE>
2. PREMIUMS
- --------------------------------------------------------------------------------
You may purchase the policy by delivering a check for the full initial premium
made out to SAFECO Life to us directly or to your agent. The initial premium
must be sufficient to cover all policy charges for a period of two months. Upon
payment of the initial premium, we may provide temporary insurance, subject to a
maximum amount. The effective date of permanent insurance coverage is dependant
upon the completion of all underwriting requirements, payment of the initial
premium, and delivery of the policy while the insured is still living.
Additional premium payments may be made at any time while the policy is in
force. We reserve the right to require satisfactory evidence of insurability
before accepting any premium payment that would result in an increase in the net
amount of coverage at risk. We will refund any portion of any premium payment
we determine to be in excess of the premium limit established by law to qualify
the policy as life insurance. We may also require any existing policy loans be
repaid prior to accepting any additional premium payments. Additional premium
payments or other changes to the policy can jeopardize a policy's non-modified
endowment status. We will monitor premiums paid and other policy transactions
and will notify you when the non-modified endowment contract status is in
jeopardy. See Section 6 - Taxes.
ALLOCATION OF PREMIUM AND CASH VALUE.
You designate how your premiums are to be allocated when you apply for a policy.
You may change the way future premiums are allocated by giving written notice to
us. All percentage allocations must be in whole numbers, and must be at least
1%. The sum of the allocations must equal 100%. At the time a policy is issued,
its cash value will be determined as if the policy had been issued and the
initial premium was invested on the date we received it.
On the date your policy is effective, premiums are invested in the money market
portfolio for 25 days. On the 26th day your money is allocated to the
portfolios and/or the fixed account in accordance with your instructions. Any
amounts allocated to the portfolios are effective and valued as of the next
close of the New York Stock Exchange ("NYSE"). This is usually 4:00 p.m.
eastern time. If for any reason the NYSE has closed for the day prior to our
receipt of your money it will be valued as of the close of the NYSE on its next
regular business day.
ACCUMULATION UNITS
The value of the variable portion of your policy will go up or down depending
upon the investment performance of the portfolio(s) you choose. In order to
keep track of this we use a unit of measure called an accumulation unit, which
works like a share of a mutual fund.
We calculate the value of an accumulation unit, for each portfolio, after the
NYSE closes each day by:
<PAGE>
1. determining the total value of the particular portfolio;
2. subtracting from that amount insurance and other charges; and
3. dividing this amount by the number of outstanding accumulation units of the
particular portfolio.
The value of an accumulation unit may go up or down from day to day.
When you make premium payments or transfers into a portfolio, we credit your
contract with accumulation units. Conversely, when you request a withdrawal or
a transfer of money from a portfolio, accumulation units are liquidated. In
either case, the increase or decrease in the number of your accumulation units
is determined by taking the amount of the premium payment, transfer or
withdrawal and dividing it by the value of an accumulation unit on the date the
transaction occurs.
EXAMPLE: On Monday we receive a $1,000 premium payment from you before the
NYSE closes. You have told us you want this to go to the RST Growth
Portfolio. When the NYSE closes on that Monday, we determine that the
value of an accumulation unit for the RST Growth Portfolio is $34.12. We
then divide $1,000 by $34.12 and credit your policy on Monday night with
29.31 accumulation units for the RST Growth Portfolio.
POLICY LAPSE AND GRACE PERIOD
You must have enough money in your policy to cover the monthly deductions and
any surrender charges. These are described in Section 4 - Expenses. If you
don't have enough money to cover these charges, we will send written notice
to you and any assignee of record that a grace period of 61 days has begun as
of the date notice was sent. We will tell you how much money (either a loan
repayment or a premium payment) you need to send us to keep your policy in
force. The amount will be enough to cover all the policy charges for three
months.
If we don't receive this amount before the end of the grace period, we will
send written notice to you and any assignee of record that your policy ended
without value ("lapsed"). If the insured dies during the grace period, we
will pay the death benefit to the beneficiary. The grace period provisions
don't apply if the Guaranteed Death Benefit Endorsement is in effect. See
Section 5 - Insurance Benefits.
REINSTATEMENT
If your policy lapses, you have five years from the end of the grace period
and while the insured is living, to request reinstatement of your policy.
Reinstatement allows you to keep your original policy anniversary date and
may or may not result in lower policy charges than you would incur under a
new policy. To reinstate your policy you must:
- provide us satisfactory evidence of insurability;
- pay enough premium to cover policy charges for three months after the
reinstatement date;
- pay any indebtedness that existed at the end of the grace period; and
- pay enough premium to cover the monthly deductions that were due during
the grace period.
Unlike many companies, we do not ask you to pay premium of the period after
the policy lapsed and before reinstatement, nor is there insurance coverage
for this period. Coverage will be effective on the first policy monthly
anniversary to occur on or after the date we approve your reinstatement
application.
You may not reinstate a policy that you surrendered for policy value.
RIGHT TO EXAMINE You may examine the policy and if for any reason you are not
satisfied, you may cancel the policy by returning it to us with a written
request for cancellation by the later of: (a) the 30th day after receipt; or
(b) the 45th day after Part I of the application was signed. If you cancel
the policy, SAFECO Life will refund an amount equal to the premium payments
made under the policy.
3. INVESTMENT OPTIONS
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MANAGED BY FIDELITY MANAGEMENT & RESEARCH COMPANY
VIP Money Market Portfolio
VIP High Income Portfolio
VIP Equity-Income Portfolio
VIP Growth Portfolio
VIP Overseas Portfolio
VIP II Investment Grade Bond Portfolio
VIP II Asset Manager Portfolio
VIP II Index 500 Portfolio
VIP II Asset Manager: Growth Portfolio
VIP II Contrafund Portfolio
<PAGE>
VIP III Growth Opportunities Portfolio
VIP III Growth & Income Portfolio
VIP III Balanced Portfolio
MANAGED BY LEXINGTON MANAGEMENT CORPORATION
Lexington Natural Resources Trust
Lexington Emerging Markets Fund, Inc.
MANAGED BY SAFECO ASSET MANAGEMENT COMPANY
RST Equity Portfolio
RST Growth Portfolio
RST Northwest Portfolio
RST Bond Portfolio
RST Small Company Stock Portfolio
MANAGED BY WANGER ASSET MANAGEMENT, L.P.
Wanger U.S. Small Cap Portfolio
MANAGED BY AMERICAN CENTURY INVESTMENT MANAGEMENT, INC
VP International
VP Balanced
Not all portfolios listed above may be available for all policies. You can have
money in up to 17 of available portfolios and the fixed account at any one time.
Additional portfolios may be available in the future. The portfolios are not
offered directly to the public but are available exclusively to life insurance
companies as investment options for variable annuity and variable life insurance
contracts. The performance for these portfolios may differ substantially from
publicly traded mutual funds with similar names and objectives.
EACH PORTFOLIO HAS ITS OWN INVESTMENT OBJECTIVE. YOU SHOULD READ THE
PROSPECTUSES FOR THESE PORTFOLIOS CAREFULLY BEFORE INVESTING. COPIES OF THESE
PROSPECTUSES ARE INCLUDED WITH THIS PROSPECTUS AND MAY INCLUDE INFORMATION ON
OTHER PORTFOLIOS NOT AVAILABLE UNDER THIS POLICY.
FIXED ACCOUNT
The policy also offers a fixed account with interest rates that are set and
guaranteed by SAFECO Life for at least 12 months. Annual effective guaranteed
interest rates will
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never be less than 4%.
TRANSFERS
You can transfer money among the 23 portfolios and the fixed account.
You can have money in a maximum of 17 portfolios at any one time.
Transfers to or from the portfolios will take effect on the next close of the
NYSE after we receive the request. Amounts equal to loans and loan interest are
not available for transfer.
We will accept transfers by signed written request or by telephone. Each
transfer must identify:
- your policy;
- the amount of the transfer; and
- which investment options are affected.
Transfers by telephone will be accepted if we have properly signed
authorization on record. You may authorize someone else to make
transfers by telephone on your behalf. We will use reasonable
procedures to confirm that instructions given to us by telephone are
genuine. If we do not use such procedures, we may be liable for any
losses due to unauthorized or fraudulent instructions. We tape record
all telephone instructions.
We reserve the right to limit transfers from the fixed account in the following
manner:
- postpone the transfer for 30 days;
- reduce the amount of the transfer to not more than 25% of the amount
available for transfer in the fixed account; and
- limit the total number of transfers to one per policy year. If
limited, the transfer will be effective on the policy anniversary
after the date we receive it.
We reserve the right to modify, suspend or terminate transfer privileges
at any time.
SCHEDULED TRANSFERS
You can initiate the following scheduled transfers among your investment
options. Once started, these scheduled transfers will continue until you
instruct us to stop or all money has been transferred out of the "source"
investment option.
DOLLAR COST AVERAGING. This strategy is designed to achieve a lower average
cost per unit over time. It does not assure a profit nor protect against a
loss. Investing should continue at a consistent level in both market ups and
downs. You can systematically transfer set amounts each month or quarter from
any portfolio or the fixed account to any of the other portfolios.
<PAGE>
PORTFOLIO REBALANCING. After your money has been invested, the performance of
the portfolios may cause the percentage in each portfolio to change from your
original allocations. You can instruct us to adjust your investment in the
portfolios to maintain a predetermined mix on a quarterly, semi-annual or annual
basis. Portfolio Rebalancing can be used with Dollar Cost Averaging.
SUBSTITUTION
If any shares of the portfolios are no longer available, or if in our view no
longer meet the purpose of the policy, it may be necessary to substitute shares
of another portfolio. We will seek prior approval of the SEC and give you
notice before doing this.
4. EXPENSES
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There are charges and other expenses associated with the policy that reduce the
return on your investment in the policy. These charges and expenses are:
INSURANCE CHARGE
We make a daily deduction for the mortality and expense risk charge. This is
done as a part of our calculation of accumulation unit value. This charge is
equal, on an annual basis, to .70% of the average daily net asset value of each
portfolio. This charge helps pay for insurance benefits (the death benefit) and
for the risk (expense risk) that the current charges will not be sufficient in
the future to cover the cost of administering the policy. If the charges under
the policy are not sufficient, then we will bear the loss. If the charges are
more than sufficient, we will retain the excess. The rate of the mortality and
expense risk charge will not be increased.
MONTHLY CHARGES
We deduct the following charges from your policy value monthly:
- the monthly cost of insurance;
- the monthly cost of additional benefits provided by riders; plus
- the monthly administration charge.
MONTHLY COST OF INSURANCE. The monthly cost of insurance charge varies
from policy to policy and from month to month. We determine the charge by
multiplying the monthly cost of insurance rate times the amount of the
death benefit that is covered by insurance. The monthly cost of insurance
rate is based on:
- the insured's age;
- gender, if permitted by law;
- risk classification; and
- the policy's duration.
Monthly cost of insurance rates will not exceed those guaranteed in the
policy and will not be increased more than once in any 12-month period.
Rates for standard risks are based on the applicable 1980 Commissioner's
Standard Ordinary Mortality
<PAGE>
Table ("1980 CSO"). Guaranteed cost of insurance rates for policies that
involve a higher mortality risk may be issued using an appropriate multiple
of the 1980 CSO.
The risk class of an insured, including age and gender, may affect the cost
of insurance rate. A preferred risk class is available to smokers and
non-smokers who we determine have a better than average mortality.
For a better understanding of how the cost of insurance and other charges
affect policy values, you should request a personalized illustration from
your registered representative.
MONTHLY COST OF ADDITIONAL BENEFITS. The monthly cost of any additional
benefits provided by riders under this policy is shown in the policy and
will not change.
MONTHLY ADMINISTRATION CHARGE. During the first policy year the
administration charge is $25 per month. For policy years after the first,
the charge drops to a current charge of $5 per month. (Maximum charge $8
per month). We do not expect to profit from this charge.
SURRENDER CHARGE
Unlike many other life insurance policies, there is no charge on withdrawals
while this policy remains in force. There is a surrender charge during the
first ten policy years if you:
- request a reduction in the face amount of insurance;
- surrender the policy for value; or
- allow the policy to lapse.
If you increase your face amount, a new surrender charge and a new ten-year
period will apply to the amount of the increase.
If you surrender the entire policy, the surrender charge will be the lesser
of:
- 50% during the first six policy years, of the annual level premium
required to keep the policy in force at the applicable face amount from
the issue date until the insured's age 95, decreasing by 10% each year
until it reaches 0% for years eleven and later; or
- 30% of actual premiums received during the first policy year up to an
amount equal to the annual level premium described above, plus 9% of all
other premium paid and less the amount of any pro rata surrender charge
previously made under the policy.
If you request a reduction in face amount, we will deduct a pro rata
surrender charge from your policy value.
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A table of the surrender charge amount you would pay per $1,000 of specified
insurance coverage is shown in the "Table of Surrender Charges" in your
policy. Below is an example of a surrender charge for a $100,000 policy for a
male preferred non-smoker, issue age 45.
<TABLE>
<CAPTION>
ANNUAL
POLICY YEAR PERCENTAGE LEVEL PREMIUM SURRENDER CHARGE
----------- ---------- -------------- ----------------
<S> <C> <C> <C>
1-6 50% x $1,716 $858
7 40% x $1,716 $686
8 30% x $1,716 $515
9 20% x $1,716 $343
10 10% x $1,716 $172
11 and after 0% x $1,716 $0
</TABLE>
You might have a lower maximum surrender charge if you paid fewer premiums in
the first year.
The surrender charge is for expenses incurred in connection with the
promotion, sale and distribution of the policies. If the surrender charge is
insufficient, excess amounts resulting from the mortality and expense risk
charge may be used to recover these expenses. We may reduce or eliminate the
amount of the surrender charge when the policy is sold under circumstances
which reduce our sales expense. See Section 8 - Other Information.
PREMIUM TAX CHARGE
States and other governmental entities (e.g., municipalities) may charge premium
taxes ranging from 0% to 3.5%. These taxes vary by state and are subject to
change. Based on your state of residence, we deduct the applicable tax from
your premium before allocating amounts to the portfolios or to the fixed account
in accordance with your instructions. Generally, references to allocations of
premiums in this prospectus reflect the deductions made to cover this tax.
INCOME OR OTHER TAXES
Currently we do not pay income or other taxes on earnings attributable to your
policy. However, if we ever incur such taxes, we reserve the right to deduct
them from your policy.
PORTFOLIO EXPENSES
There are deductions from and expenses paid out of the assets of the various
portfolios. These expenses are summarized in the Fee Table of this prospectus.
For more detailed information, you should refer to the enclosed portfolio
prospectuses.
<PAGE>
5. INSURANCE BENEFITS
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The primary purpose of the policy is to provide death benefit protection on the
life of the insured. You select the face amount of insurance and death benefit
option "A" or "B" on your policy application. Face amount of insurance is the
fixed portion of a death benefit that you want the beneficiary to receive.
Under option "A" the death benefit equals the face amount on your insurance
policy. Gains in your policy value reduce the amount of insurance coverage you
pay for without changing the amount of the death benefit. Under option "B" the
death benefit equals the face amount on your insurance policy, plus your policy
value. The amount of insurance coverage you pay for stays the same, but the
death benefit may be greater than the face amount, depending on performance.
Upon receipt of proof that the insured died while the policy was in force, we
will pay the death proceeds to the beneficiary in a lump sum or under an
optional method of payment provided by the policy and that you or the
beneficiary select. The death proceeds equal:
- the death benefit under the policy; plus
- any benefits due from riders; less
- any loans and loan interest; and less
- any overdue charges if the insured dies during the grace period.
Whether you choose the death benefit under "A" or "B", we guarantee that the
death benefit under the option you select will never be less than the
applicable percentage of your policy value. Sample ages and percentages are
shown below.
<TABLE>
<CAPTION>
Insured's Age at the
beginning of the policy Percentage of policy value
year in which insured dies. as of the date of death.
----------------------------------------------------------
<S> <C>
40 and under 250%
45 215%
50 185%
55 150%
60 130%
65 120%
70 115%
75-90 105%
95 100%
</TABLE>
CHANGES IN THE FACE AMOUNT OF INSURANCE AND/OR THE DEATH BENEFIT OPTIONS
After the first policy year you can request changes in the face amount of
insurance or the death benefit option by writing to us. Increases in the face
amount of insurance
<PAGE>
must be at least $10,000. The insured must be under age 80 and provide proof
of insurability. Decreases in the face amount of insurance during the first
ten policy years have a surrender charge. See Section 4 - Expenses. Changes
take effect on the first monthly anniversary on or after we approve the
change. We may decline to make a change that would decrease your face amount
of insurance to less than the minimum amount that we would issue on a new
policy or if it would disqualify your policy as life insurance under tax law.
See Section 6-Taxes.
GUARANTEED DEATH BENEFIT ENDORSEMENT
You receive a Guaranteed Death Benefit Endorsement with your policy if:
- the endorsement is approved by your state;
- your policy is not extra rated; and
- your policy does not have an increasing premium additional term rider.
The endorsement guarantees that your policy will not lapse prior to the end
of the policy year that the insured turns age 80, as long as premium
requirements are met. This protects your insurance coverage if your policy
value drops below the amount normally required to keep your policy in force.
There is no charge for this endorsement, but a minimum level of monthly
premium is required to keep the endorsement in force. This minimum is shown
in your policy and will not change unless your policy changes.
The endorsement will lapse if the total premiums paid, less any withdrawals,
loan, and loan interest, is less than the sum of monthly guaranteed death
benefit premiums required since policy issue. You will then have 61 days to pay
the required premium or the endorsement will terminate and cannot be reinstated.
EXTENDED MATURITY BENEFIT ENDORSEMENT The policy matures on the policy
anniversary following the insured's 95th birthday. See Section 7 - Access
to Your Money for a discussion of the Maturity Date. You can extend the
maturity date of your policy until the death of the insured if the Extended
Maturity Benefit Endorsement was approved for use in your state at the time
your policy was issued. There is no charge for this endorsement. The
endorsement is not effective unless we receive your irrevocable election to
use the benefit in writing and prior to the maturity date.
Under the endorsement and as of the maturity date:
- we transfer money in the portfolios to the fixed account as of the
next close of the NYSE;
- all riders on the policy terminate; and
- cost of insurance charges are no longer deducted.
On the death of the insured, the death benefit under the endorsement is equal to
the policy value less existing loans, and loan interest. The tax consequences
of extending the maturity date past age 95 are unclear. You should consult your
personal tax advisor before extending the policy maturity date.
<PAGE>
6. TAXES
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This section discusses how federal income tax applies to life insurance policies
in general. This information is not complete and is not intended as tax advice.
Tax laws and their interpretations are complex and subject to change. No
attempt is made to discuss state or other tax laws. SAFECO Life does not
guarantee the tax treatment of any policy or any transaction involving a policy.
You should consult a competent tax adviser about your individual circumstances.
LIFE INSURANCE IN GENERAL
If your policy meets certain tests under the Internal Revenue Code of 1986, as
amended ("Code"), it will be treated as life insurance for federal tax purposes.
Death proceeds payable under a life insurance policy when the insured dies are
not taxed to the beneficiary. We will monitor compliance of your policy with
these tests.
If your life insurance policy is also a modified endowment contract (you have a
higher ratio of cash value to insurance protection), amounts you take out while
the insured is living, including loans and collateral assignments, may be
subject to income tax. There may be a 10% tax penalty on the taxable amount
taken before age 59 1/2 unless you are disabled as defined by the Code or
another exception applies.
A surrender or termination of the policy by lapse may have tax
consequences if the surrender value plus outstanding loans and loan interest is
greater than premiums paid into the policy. If the insured is alive on the
maturity date and you have not elected the extended maturity option in writing,
you may have to pay federal income tax on the policy value (including
outstanding loan amounts) that are attributable to earnings in the portfolios
or interest in the fixed account.
Ownership of a life insurance policy or receipt of policy proceeds before or
after the death of the insured, may result in federal taxes such as income,
estate, gift, or generation-skipping transfer tax, as well as state and local
taxes such as inheritance or income tax. Tax consequences depend on your or
your beneficiary's individual circumstances. You should consult your personal
tax advisor regarding the tax treatment of a life insurance policy that you own.
Changes in federal and state tax law or in the interpretation of current tax law
could adversely affect the tax treatment of your policy and policy proceeds.
DIVERSIFICATION
Variable life insurance policies receive tax deferral while the insured is
living as long as investment in the portfolios meet diversification standards
set by Treasury Regulations. This favorable tax treatment allows you to select
and make transfers among portfolios without paying income tax unless you take
money out.
We believe the portfolios offered under this policy are being managed to comply
with existing standards. To date, neither Treasury Regulations nor the Code
give specific
<PAGE>
guidance as to the circumstances under which your policy might lose its tax
favored status as life insurance because of the number and type of portfolios
you can select from, and the extent to which you can make transfers. If
issued, such guidance could be applied either prospectively or retroactively.
Due to the uncertainty in this area, we reserve the right to modify the policy
in an attempt to maintain favorable tax treatment.
TAX WITHHOLDING
Generally while the insured is living, federal income tax is withheld from the
taxable portion of proceeds at a rate of 10%. Typically, you may elect
not to have income taxes withheld or to have withholding done at a different
rate.
7. ACCESS TO YOUR MONEY
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You can access money in your policy in the following ways:
- by taking loans against your policy value;
- by requesting withdrawals after the first policy year;
- by taking SMART-TM- distributions (beginning after the second policy
year);
- by surrendering your entire policy for value;
- by receiving the surrender value if the insured is alive on the
maturity date; or
- when a death benefit is paid to your beneficiary. See Section 5 -
Insurance Benefits.
LOANS
You may take loans in any amount up to 90% (or other maximum required by your
state), of your policy surrender value by writing to us. Loaned amounts do not
participate in earnings from the portfolios or receive higher interest rate
guarantees in the fixed account. For this reason loans, whether or not repaid,
have a permanent affect on the amount of money you are able to accumulate in
your policy. Unless you tell us differently, we will deduct loan amounts from
the portfolios and the fixed account in the same proportion as we take monthly
deductions. If this is not possible, we deduct loan amounts on a pro rata basis
from the investment options. Once we receive your request, the loan will be
effective as of the next close of the NYSE. Loan amounts are not available for
withdrawal or surrender.
There is no cost to you on new and existing loans that do not exceed the
total investment gain in your policy, less policy charges and existing loan
amounts, or on any new or existing loans after the tenth policy year. During
the first ten policy years, we call these no-cost loans "preferred". To
determine what loan amount is currently available to you on a preferred
basis, add the amount of any withdrawals you have taken to your current
policy value and then subtract all premiums paid.
<PAGE>
The interest rate charged on new and existing loans is set each policy
anniversary, subject to a maximum rate that is the greater of:
- Moody's Corporate Bond Yield Average for the calendar month that ends
two months before your policy anniversary date; or
- 5%.
The current loan interest rate results in an annualized cost to you of 2% for
non-preferred loans. Changes in the loan interest rate we charge will never be
less than 0.5% up or down. We will notify you in advance of any change in the
cost of your loan.
Loan interest is payable in advance on the date of the loan and on each
subsequent policy anniversary until the loan is repaid. Loan interest that is
not paid on the date due increases your loan amount and is charged loan
interest. During the first ten policy years, loans will be reallocated as
preferred or non-preferred once a year on the policy anniversary. If the
unloaned portion of your policy value experienced gains during the 12-month
period prior to your policy anniversary, a greater portion of existing loan
amounts may be preferred during the next policy year. If your policy value
experienced losses during this period, a greater portion of existing loans may
be non-preferred and result in a cost to you if you do not repay the loan.
Loan payments of $50 or more may be made at anytime while the insured is living
and the policy is in force. When a loan is outstanding, we consider any money
you give us, other than by electronic funds transfer, to be a loan payment
unless clearly marked otherwise. Unless you tell us differently, loan payments
are allocated to the portfolios and/or the fixed account in accordance with your
current premium allocations on file. Non-preferred loans are repaid first.
Loan payments are not considered additional premium under the policy.
Loans allow you to access money in your policy at little or no cost and are
tax-free, unless your policy is a modified endowment contract. See Section 6
- -Taxes. However, loans reduce the number of accumulation units in the
portfolios and/or the value in the fixed account. Loans increase your risk
that:
- you will not accumulate enough policy value to meet your future
financial needs;
- your policy will lapse;
- the Guaranteed Death Benefit Endorsement will terminate;
- your beneficiary will receive less money.
WITHDRAWALS
After the first policy year, you can take money out by writing to us. There is
no minimum withdrawal amount. The maximum withdrawal amount is equal to your
policy surrender value less policy charges for three months.
<PAGE>
Unless you tell us differently, we will take withdrawals from the portfolios and
the fixed account in the same proportion as we take monthly deductions or, if
this is not possible, on a pro rata basis from the investment options. Once we
receive your request, withdrawals from the portfolios will be effective as of
the next close of the NYSE.
Unlike many other policies, there is no charge on withdrawals as long as your
policy remains in force. However, withdrawals reduce the number of accumulation
units in the portfolios and/or the value of the fixed account and may have tax
consequences. See Section 6 - Taxes. Withdrawals lower the face amount of
insurance on your policy dollar for dollar and increase the risk that:
- you will not accumulate enough policy value to meet your future
financial needs;
- your policy will lose its current tax status;
- your policy will lapse;
- the Guaranteed Death Benefit Endorsement will terminate;
- your beneficiary will receive less money.
We may refuse any withdrawal request that reduces the face amount below the
minimum we require for policy issue or that would disqualify the policy as life
insurance under tax law.
SMART-TM- DISTRIBUTIONS
After the second policy year, you can take money out electronically through
systematic withdrawals, loans or a combination of both so that you receive a
level stream of income over a period of time you select. The distributions must
satisfy applicable requirements for taking withdrawals or loans and may be
modified to ensure that insurance coverage remains in force. These
distributions have the same risks as random loans and withdrawals. All or some
of these distributions may be subject to current tax and tax penalties. See
Section 6 - Tax.
SURRENDER
You may end the insurance coverage under this policy and receive the surrender
value at any time by sending written instruction and the policy to us while the
insured is living. A surrender charge will apply during the first ten policy
years. See Section 4 - Expenses. The surrender value may be subject to current
tax and tax penalties. See Section 6 - Taxes.
MATURITY DATE
The policy matures on the policy anniversary following the insured's 95th
birthday. If the insured is alive on the maturity date, the policy terminates
and you receive the policy surrender value in a lump sum or alternate payment
option provided by your policy and that you select. Current tax may apply.
Under some circumstances the maturity date may be extended until the death of
the insured. See Section 5 - Insurance Benefits for a discussion of the
Extended Maturity Benefit Endorsement.
<PAGE>
MINIMUM VALUE
If the surrender value of your policy (policy value less surrender charges and
outstanding loan amounts), is too low to pay the monthly policy charges or loan
interest that is due, insurance coverage will end and your policy will lapse
without value. See Section 2 Premiums for information on policy lapse and
reinstatement.
8. OTHER INFORMATION
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SAFECO LIFE
SAFECO Life was incorporated as a stock life insurance company under Washington
law on January 23, 1957. We provide individual and group life, accident and
health insurance, and annuity products and are licensed to do business in the
District of Columbia and all states except New York. We are a wholly owned
subsidiary of SAFECO Corporation which is a holding company whose subsidiaries
are primarily engaged in insurance and financial service businesses.
SEPARATE ACCOUNT
We adopted a Board Resolution to establish SAFECO Separate Account SL ("Separate
Account") under Washington law on November 6, 1986. The Separate Account holds
the assets that underlie policy values invested in the portfolios. The Separate
Account is registered with the SEC as a unit investment trust under the
Investment Company Act of 1940, as amended.
Under Washington law, the assets in the Separate Account are the property of
SAFECO Life. However, assets in the Separate Account that are attributable to
policies are not chargeable with liabilities arising out of any other business
we may conduct. Income, gains and losses (realized and unrealized), resulting
from assets in the Separate Account are credited to or charged against the
Separate Account without regard to other income, gains or losses of SAFECO Life.
Promises we make in the policy are general corporate obligations of SAFECO Life
and are not dependent on assets in the Separate Account.
GENERAL ACCOUNT
If you put your money into the fixed account, it goes into SAFECO Life's general
account. The general account is made up of all of SAFECO Life's assets other
than those attributable to separate accounts. All of the assets of the general
account are chargeable with the claims of any of our policy owners as well as
our creditors. The general account invests its assets in accordance with state
insurance law.
We are not required to register the fixed account or any interests therein, with
the SEC. For this reason, SEC staff has not reviewed disclosure relating to the
fixed account. However, such disclosure may be subject to general provisions in
federal securities laws that relate to accuracy and completeness of statements
made in the prospectus.
DISTRIBUTION (PRINCIPAL UNDERWRITER)
The policies are underwritten by SAFECO Securities, Inc. ("SSI"). They are sold
by individuals who, in addition to being licensed to sell variable life
insurance for
<PAGE>
SAFECO Life, are also registered representatives of broker-dealers who have a
current sales agreement with SSI. SSI is an affiliate of SAFECO Life and is
located at 10865 Willows Road NE, Redmond, Washington 98052. It is registered
as a broker-dealer with the SEC under the Securities Act of 1934 and is a member
of the National Association of Securities Dealers, Inc. No amounts are retained
by SSI for acting as principal underwriter for SAFECO Life policies.
The commissions paid to registered representatives on the sale of policies are
not more than 60% of premiums paid during the first year nor more than 2% during
years after the first. In addition, commissions, allowances and bonuses may be
paid to registered representatives and/or other distributors of the policies. A
bonus dependent upon persistency is one type of bonus that may be paid.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account or SSI is a party.
SAFECO Life is engaged in various kinds of litigation which, in the opinion of
SAFECO Life, are not of material importance in relation to the total capital and
surplus of SAFECO Life.
RIGHT TO SUSPEND TRANSFERS, LOANS, WITHDRAWAL, OR SURRENDER
We may be required to suspend or postpone payment of transfers, loans,
withdrawals or surrender from the portfolios for any period of time when:
- the NYSE is closed (other than customary weekend or holiday closings);
- trading on the NYSE is restricted;
- an emergency exists such that disposal of or determination of the
value of the portfolio shares is not reasonably practicable; or
- the SEC, by order, so permits for your protection.
Additionally, we reserve the right to defer payment of transfers, loans,
withdrawals, or surrender from the fixed account for the period permitted by
law, but not for more than six months.
VOTING RIGHTS
SAFECO Life is the legal owner of the portfolios' shares. However, when a
portfolio solicits proxies in conjunction with a shareholder vote, we are
required to ask you for instructions as to how to vote those shares. All shares
are voted in the same proportion as the instructions we received. Should we
determine that we are no longer required to comply with the above, we will vote
the shares in our own right.
DISREGARD OF VOTING INSTRUCTIONS
SAFECO Life may, when required to do so by state insurance authorities, vote
shares of the funds without regard to instructions from owners if such
instructions would require the shares to be voted to cause any portfolio to make
(or refrain from making), investments which would result in changes in the
sub-classification or investment objectives of the portfolio. SAFECO Life may
also disapprove changes in the
<PAGE>
investment policy initiated by the owners or trustees of the funds, if such
disapproval is reasonable and is based on a good faith determination by SAFECO
Life that the change would violate state or federal law or the change would not
be consistent with the investment objectives of the portfolios or which varies
from the general quality and nature of investments and investment techniques
used by other funds with similar investment objectives underlying other variable
policies offered by SAFECO Life or of an affiliated life insurance company. In
the event that SAFECO Life does disregard voting instructions, a summary of this
action and the reasons for such action will be included in the next semi-annual
report to owners.
REDUCTION OF CHARGES OR ADDITIONAL AMOUNTS CREDITED
Under some circumstances we may expect to experience lower costs or higher
revenues associated with issuing and administering certain policies. For
example, sales expenses are expected to be less when policies are sold to a
large group of individuals. Under such circumstances we may pass a portion of
these anticipated savings on to you by reducing certain policy charges
(including the surrender charge) or crediting additional fixed account interest.
We may also take such action in connection with policies sold to our officers,
directors, and employees and their family members, employees of our affiliates
and their family members, and registered representatives and employees of
broker-dealers that have a current selling agreement with us. In each
circumstance such actions will be reasonably related to the savings or revenues
anticipated and will be applied in a non-discriminatory manner. These actions
may be withdrawn or modified by us at any time.
REPORTS TO POLICY OWNERS
We send you quarterly statements about your policy which, taken together,
provide you with an annual report of your policy each policy year. Statements
include information about:
- the death benefit;
- policy values including surrender value;
- policy charges;
- loan amounts including loan interest;
- premiums paid during the year; and
- investment performance.
YEAR 2000
Like other insurance, mutual fund, financial and business organizations, and
individuals around the world, SAFECO Life and the Separate Account could be
adversely affected if the computer systems used by SAFECO Life, its principal
underwriter, underlying mutual fund managers and investment advisers, or other
companies that provide services to the Separate Account do not properly process
and calculate date related
<PAGE>
information from and after January 1, 2000. This is commonly called the "Year
2000 problem." SAFECO Life is taking steps it believes are reasonably designed
to address the Year 2000 problem with respect to the computer systems that each
of them uses and to obtain satisfactory assurances that comparable steps are
being taken by each of SAFECO Life's other, major service providers. It is not
anticipated that the Separate Account will incur any charges or that there will
be any difficulties in accurate and timely reporting resulting from the change
in year from 1999 to 2000. However, with approximately 90% of its systems year
2000 ready, SAFECO Life is currently developing business continuity plans for
year 2000 contingencies.
INTERNET INFORMATION
You can find more information about the Premier Accumulation Life Flexible
Premium Variable Life Insurance Policy as well as other products and financial
services offered by SAFECO companies on the Internet at HTTP://WWW.SAFECO.COM.
This website is frequently updated with new information and can help you locate
a representative near you. If you already own a Premier Accumulation Life
policy you can obtain specific information about your policy and additional
online services.
The SEC also maintains a website at HTTP://WWW.SEC.GOV, which contains a copy of
the Separate Account's most recent registration statement and general consumer
information.
EXPERTS
The financial statements of SAFECO Separate Account SL and SAFECO Life Insurance
Company and Subsidiaries, to be included as an Appendix to this prospectus by
post-effective amendment at a later date, will be audited by Ernst & Young LLP,
independent auditors, to the extent indicated in their reports thereon. Such
financial statements will be included later in reliance on their reports given
upon the authority of such firm as experts in accounting and auditing.
FINANCIAL STATEMENTS The financial statements of SAFECO Separate Account SL
and SAFECO Life Insurance Company and Subsidiaries, to be included as an
Appendix to this prospectus by post-effective amendment at a later date,
should be considered only as bearing upon our ability to meet our obligations
under the policy. They should not be considered as bearing upon the
investment experience of the portfolios.
<PAGE>
PART II
MORE INFORMATION
EXECUTIVE OFFICERS AND DIRECTORS OF SAFECO LIFE
OFFICERS:
Roger H. Eigsti Chairman of the Board
Randall H. Talbot President
John P. Fenlason Senior Vice President
James T. Flynn Vice President, Controller and Assistant Secretary
Roger F. Harbin Executive Vice President and Actuary
Michael J. Kinzer Vice President and Chief Actuary
Rod A. Pierson Senior Vice President and Secretary
DIRECTORS:
Donald S. Chapman Director
Boh A. Dickey Director
Roger H. Eigsti Director
Rod A. Pierson Director
James W. Ruddy Director
Robert L. Spaulding Director
Randall H. Talbot Director
W. Randall Stoddard Director
Dale E. Lauer Director
*The business address for Messrs. Talbot, Fenlason, Flynn, Harbin, and Kinzer is
15411 N.E. 51st Street, Redmond, Washington 98052. The business address for
Messr. Lauer is 500 N. Meridian Street, Indianapolis, IN 46204. The business
address for all other individuals listed is SAFECO Plaza, Seattle, Washington
98185.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the insured has been incorrectly stated, the death benefit
and any benefits provided by riders will be adjusted to reflect the death
benefit that would have been purchased at the correct age or sex using the cost
of insurance rate in effect when the policy was issued.
SAFECO LIFE'S RIGHT TO CONTEST
SAFECO Life cannot contest the validity of the policy except in the case of
fraud after it has been in effect during the insured's lifetime for two years
from the policy date or, with regard to an increase in insurance coverage, two
years from the effective date of that increase. If the policy is reinstated,
the two-year period is measured from the date of reinstatement. If the insured
commits suicide within two years of the policy date, or such period as specified
in state law, the benefit is limited to a return of premiums
<PAGE>
adjusted for loans, withdrawals, and investment experience, gain or loss, in the
portfolios.
FEDERAL TAX STATUS
NOTE: The following description is based upon SAFECO Life's understanding of
current federal income tax law applicable to life insurance in general. SAFECO
Life cannot predict the probability that any changes in such laws will be made.
Purchasers are cautioned to seek competent tax advice regarding the possibility
of such changes. Section 7702 of the Internal Revenue Code of 1986, as amended
(the "Code"), defines the term "life insurance contract" for purposes of the
Code. SAFECO Life believes that the policies to be issued will qualify as "life
insurance contracts" under Section 7702. SAFECO Life does not guarantee the tax
status of the policies. Purchasers bear the complete risk that the policies may
not be treated as "life insurance" under federal income tax laws. Purchasers
should consult their own tax advisers. It should be further understood that the
following discussion is not exhaustive and that special rules not described in
this Prospectus may be applicable in certain situations.
INTRODUCTION: The discussion contained herein is general in nature and is not
intended as tax advice. Each person concerned should consult a competent tax
adviser. No attempt is made to consider any applicable state or other tax laws.
Moreover, the discussion herein is based upon SAFECO Life's understanding of
current federal income tax laws as they are currently interpreted. No
representation is made regarding the likelihood of continuation of those current
federal income tax laws or of the current interpretations by the Internal
Revenue Service.
SAFECO Life is taxed as a life insurance company under the Code. For federal
income tax purposes, the Separate Account is not a separate entity from SAFECO
Life and its operations form a part of SAFECO Life.
DIVERSIFICATION: Section 817(h) of the Code imposes certain diversification
standards on the underlying assets of variable life insurance policies. The Code
provides that a variable life insurance policy will not be treated as life
insurance for any period (and any subsequent period) for which the investments
are not, in accordance with regulations prescribed by the United States Treasury
Department ("Treasury Department"), adequately diversified. Disqualification of
the policy as a life insurance contract would result in imposition of federal
income tax on the owner with respect to earnings allocable to the policy prior
to the receipt of payments under the policy. The Code contains a safe harbor
provision which provides that life insurance policies such as the policies meet
the diversification requirements if, as of the close of each quarter, the
underlying assets meet the diversification standards for a regulated investment
company and no more than fifty-five (55%) percent of the total assets consist of
cash, cash items, U.S. Government securities and securities of other regulated
investment companies. There is an exception for securities issued by the U.S.
Treasury in connection with variable life insurance policies.
<PAGE>
On March 2, 1989, the Treasury Department issued Regulations (Treas. Reg.
Section 1.817-5), which establish diversification requirements for the
investment portfolios underlying variable contracts such as the policies. The
Regulations amplify the diversification requirements for variable contracts set
forth in the Code and provide an alternative to the safe harbor provision
described above. Under the Regulations, an investment portfolio will be deemed
adequately diversified if: (i) no more than 55% of the value of the total assets
of the portfolio is represented by any one investment; (ii) no more than 70% of
the value of the total assets of the portfolio is represented by any two
investments; (iii) no more than 80% of the value of the total assets of the
portfolio is represented by any three investments; and (iv) no more than 90% of
the value of the total assets of the portfolio is represented by any four
investments. For purposes of these Regulations, all securities of the same
issuer are treated as a single investment.
The Technical and Miscellaneous Revenue Act of 1988 ("TAMRA") provides that, for
purposes of determining whether or not the diversification standards imposed on
the underlying assets of variable contracts by Section 817(h) of the Code have
been met, "each United States government agency or instrumentality shall be
treated as a separate issuer."
SAFECO Life intends that each investment portfolio underlying the policies will
be managed by the managers in such a manner as to comply with these
diversification requirements.
The Treasury Department has indicated that the diversification regulations do
not provide guidance regarding the circumstances in which owner control of the
investments of the Separate Account will cause the owner to be treated as the
owner of the assets of the Separate Account, thereby resulting in the loss of
favorable tax treatment for the policy. At this time it cannot be determined
whether additional guidance will be provided and what standards may be contained
in such guidance.
The amount of owner control which may be exercised under the policy is different
in some respects from the situations addressed in published rulings issued by
the Internal Revenue Service in which it was held that the policy owner was not
the owner of the assets of the Separate Account. It is unknown whether these
differences, such as the owner's ability to transfer among investment choices or
the number and type of investment choices available, would cause the owner to be
considered as the owner of the assets of the Separate Account.
In the event any forthcoming guidance or ruling is considered to set forth a new
position, such guidance or ruling will generally be applied only prospectively.
However, if such ruling or guidance was not considered to set forth a new
position, it may be applied retroactively resulting in the owner being
retroactively determined to be the owner of the assets of the Separate Account.
Due to the uncertainty in this area, SAFECO Life reserves the right to modify
the policy in an attempt to maintain favorable tax treatment.
<PAGE>
TAX TREATMENT OF THE POLICY: The policy has been designed to comply with the
definition of life insurance contained in Section 7702 of the Code. Although
some interim guidance has been provided and proposed regulations have been
issued, final regulations have not been adopted. Section 7702 of the Code
requires the use of reasonable mortality and other expense charges. In
establishing these charges, SAFECO Life has relied on the interim guidance
provided in IRS Notice 88-128 and proposed regulations issued on July 5, 1991.
Currently, there is even less guidance as to a policy issued on a substandard
risk basis and thus it is even less clear whether a policy issued on such basis
would meet the requirements of Section 7702 of the Code.
While SAFECO Life has attempted to comply with Section 7702, the law in this
area is very complex and unclear. There is a risk, therefore, that the Internal
Revenue Service will not concur with SAFECO Life's interpretations of Section
7702 that were made in determining such compliance. In the event the policy is
determined not to so comply, it would not qualify for the favorable tax
treatment usually accorded life insurance policies. Owners should consult their
tax advisers with respect to the tax consequences of purchasing the policy.
POLICY PROCEEDS: The tax treatment accorded to loan proceeds and/or withdrawals
or surrenders from the policies will depend on whether the policy is considered
to be a modified endowment contract. Otherwise, SAFECO Life believes that the
policy should receive the same federal income tax treatment as any other type of
life insurance. As such, the death benefit thereunder is excludable from the
gross income of the beneficiary under Section 101(a) of the Code. Also, the
owner is not deemed to be in constructive receipt of the policy Account or Net
Cash Surrender Value, including increments thereon, under a policy until there
is a distribution of such amounts.
Federal, state and local estate, inheritance and other tax consequences of
ownership, or receipt of policy proceeds, depend on the circumstances of each
owner or beneficiary.
TAX TREATMENT OF LOANS, WITHDRAWALS, AND SURRENDERS: Section 7702A of the Code
sets forth the rules for determining when a life insurance policy will be deemed
to be a Modified Endowment Contract. A modified endowment contract is a contract
which is entered into or materially changed on or after June 21, 1988 and fails
to meet the 7-pay test. A policy fails to meet the 7-pay test when the
cumulative amount paid under the policy at any time during the first seven
policy Years exceeds 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. A material change would
include any increase in the future benefits or addition of qualified additional
benefits provided under a policy unless the increase is attributable to: (1) the
payment of premiums necessary to fund the lowest death benefit and qualified
additional benefits payable in the first seven policy years; or (2) the
crediting of interest or other earnings (including policyholder dividends) with
respect to such premiums.
<PAGE>
Furthermore, any policy received in exchange for a policy classified as a
modified endowment contract will be treated as a modified endowment contract
regardless of whether it meets the 7-pay test. The status of an exchange of a
contract issued before June 21, 1988 is unclear; however, the Internal Revenue
Service has taken the position in a Private Letter Ruling that a contract
received in an exchange on or after June 21, 1988 will be considered as entered
into as of the date of the exchange and therefore subject to Section 7702A. Due
to the flexible premium nature of the policy, the determination of whether it
qualifies for treatment as a modified endowment contract depends on the
individual circumstances of each policy.
If the policy is classified as a modified endowment contract, then withdrawals
and surrenders and/or loan proceeds are taxable to the extent of income in the
policy. Such distributions are deemed to be on a last-in, first-out basis, which
means the taxable income is distributed first. Loan proceeds and/or surrender
payments may also be subject to an additional 10% federal income tax penalty
applied to the income portion of such distribution. The penalty shall not apply,
however, to any distributions: (1) made on or after the date on which the
taxpayer reaches age 59 1/2; (2) which is attributable to the taxpayer becoming
disabled within the meaning of Section 72(m)(7) of the Code); or (3) which is
part of a series of substantially equal periodic payments made not less
frequently than annually for the life or life expectancy of the taxpayer or the
joint lives or joint life expectancies of such taxpayer and his beneficiary.
If a policy is not classified as a modified endowment contract, then any
withdrawals will be treated first as a recovery of the investment in the policy,
which would not be received as taxable income. However, if a distribution is the
result of a reduction in benefits under the policy within the first fifteen
years after the policy is issued in order to comply with Section 7702, such
distribution will, under rules set forth in Section 7702, be taxed as ordinary
income to the extent of income in the policy.
Any loans from a policy which is not classified as a modified endowment
contract, will be treated as indebtedness of the owner and not a distribution.
Personal interest payable on a loan under a policy owned by an individual is
generally not deductible. Furthermore, no deduction will be allowed for
interest on loans under policies covering the life of any employee or officer of
the taxpayer or any person financially interested in the business carried on by
the taxpayer to the extent the indebtedness for such employee, officer or
financially interested person exceeds $50,000. The deductibility of interest
payable on policy loans may be subject to further rules and limitations under
Sections 163 and 264 of the Code.
Policy owners should seek competent tax advice on the tax consequences of taking
loans, withdrawals or surrendering any policy.
QUALIFIED PLANS: The policies may be used in conjunction with certain qualified
plans. Because the rules governing such use are complex, a purchaser should not
do so until he has consulted a competent qualified plans consultant.
<PAGE>
ADVERTISING
The Company is ranked and rated by independent financial rating services,
including Moody's, Standard and Poor's and A.M. Best Company. The purpose of
these ratings is to reflect the financial strength or claims-paying ability of
the Company. The ratings are not intended to reflect the investment experience
or financial strength of the Variable Account. The company may advertise
ratings from time to time. In addition, the Company may include in certain
advertisements, endorsements in the form of a list of organizations, individuals
or other parties that recommend the Company or the policies. Furthermore, the
other parties that recommend the Company may occasionally include in
advertisements comparisons of currently taxable and tax deferred investment
programs, based on selected tax brackets, or discussions of alternative
investment vehicles and general economic conditions.
<PAGE>
TO BE FILED BY POST EFFECTIVE AMENDMENT
SAFECO LIFE
SEPARATE ACCOUNT SL
AUDITED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
SAFECO LIFE INSURANCE COMPANY
AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
<PAGE>
HYPOTHETICAL ILLUSTRATIONS
- -------------------------------------------------------------------
OF DEATH BENEFITS, POLICY ACCOUNT, CASH SURRENDER VALUES, AND ACCUMULATED
PREMIUMS
The following tables have been prepared to show how the key financial elements
of the Policy work. The tables show how death benefits, Policy Account and Cash
Surrender Values (policy benefits) could vary over an extended period of time if
the Investment Division of the Separate Account had constant hypothetical gross
annual investment returns of 0%, 6% or 12% over the years covered by each table.
The policy benefits will differ from those shown in the tables if the annual
investment returns are not absolutely constant. That is, the figures will be
different if the returns averaged 0%, 6% or 12% over a period of years, but went
above or below those figures in individual Policy Years. The Policy benefits
will also differ, depending on the premium allocations to each Investment
Division, if the overall actual rates of return averaged 0%, 6% or 12%, but went
above or below those figures for the individual Investment Divisions. The tables
are for preferred and standard risk male non-smokers. Planned premium payments
are assumed to be paid at the beginning of each Policy Year. The difference
between the Policy Account and the Cash Surrender Value in the first ten years
is the surrender charge. The Policy Account amounts reflect the front-end
charges.
The tables illustrate cost of insurance and expense charges (Policy cost
factors) at both the current rates and the maximum rates guaranteed in the
Policies. The amounts shown at the end of each Policy Year reflect a daily
charge against the Investment Divisions. This charge includes a .70% charge
against the Separate Account for mortality and expense risks; the effect on each
Division's investment experience of the charge to Funds' assets for investment
management (0.68%, an average of the 1997 actual investment management fees
charged to the various Portfolios of the Funds); and 0.14% direct Funds'
operating expenses. The effect of these adjustments is that on a 0% gross rate
of return the net rate of return would be -1.52%, on 6% it would be 4.48%, and
on 12% it would be 10.48%.
The tables assume deduction of an applicable premium tax rate based on 2.1% of
premiums. There are tables for both male preferred non-smoker age 45 and male
standard non-smoker age 45 and each class is illustrated using CURRENT and
GUARANTEED Policy cost factors. The current tables assume that the monthly
charge remains constant at $5.00. The guaranteed tables assume that the monthly
charge remains constant at $8.00. The tables reflect the fact that SAFECO does
not currently make any charge for federal taxes.
If SAFECO charged for those taxes in the future, it will take a higher rate of
return to produce after-tax returns of 0%, 6% or 12%.
The second column of each table shows what would happen if an amount equal to
the premiums was invested to earn interest, after taxes, of 5% compounded
annually. These tables show that if a policy is returned in its very early years
for payment of its Cash Surrender Value, that Cash Surrender Value will be low
in comparison to the amount of the premiums accumulated with interest. Thus, the
cost of holding a Policy for a relatively short time will be high.
INDIVIDUAL ILLUSTRATIONS. If requested, SAFECO will furnish a comparable
illustration based on the age, sex and underwriting classification of the
proposed Primary Insured, and an initial Face Amount of Insurance and planned
premiums as selected. If a Policy is purchased, SAFECO will deliver an
individualized illustration reflecting the planned premium chosen and the
Primary Insured's actual risk class.
B-1
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C>
Initial Face Amount: $250,000
Death Benefit Option: A
Death Benefits Payable to
Age: 95
Annual Planned Premium(1): $4,000.00
Issue Age: 45
Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESULTS ASSUMING CURRENT CHARGES(2)
Assuming Hypothetical Gross Annual Investment Return of:
<TABLE>
<CAPTION>
0.00% 6.00%
--------------------------------------- ---------------------------------------
ACCUM POLICY CASH POLICY CASH
END OF PREMIUM (5% DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER
POLICY YEAR INT) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 2,902 1,702 250,000 3,160 1,906
2 8,610 250,000 5,904 4,344 250,000 6,501 4,941
3 13,241 250,000 8,795 6,875 250,000 9,982 8,062
4 18,103 250,000 11,603 9,458 250,000 13,582 11,437
5 23,208 250,000 14,351 12,206 250,000 17,329 15,184
6 28,568 250,000 17,045 14,900 250,000 21,236 19,091
7 34,196 250,000 19,665 17,949 250,000 25,289 23,573
8 40,106 250,000 22,214 20,927 250,000 29,500 28,213
9 46,312 250,000 24,698 23,840 250,000 33,881 33,023
10 52,827 250,000 27,121 26,692 250,000 38,445 38,016
11 59,669 250,000 29,413 29,413 250,000 43,132 43,132
12 66,852 250,000 31,556 31,556 250,000 47,934 47,934
13 74,395 250,000 33,546 33,546 250,000 52,853 52,853
14 82,314 250,000 35,367 35,367 250,000 57,884 57,884
15 90,630 250,000 37,005 37,005 250,000 63,025 63,025
16 99,361 250,000 38,499 38,449 250,000 68,273 68,273
17 108,530 250,000 39,690 39,690 250,000 73,635 73,635
18 118,156 250,000 40,721 40,721 250,000 79,116 79,116
19 128,264 250,000 41,524 41,524 250,000 84,720 84,720
20 138,877 250,000 42,082 42,082 250,000 90,448 90,448
Age 75 297,195 250,000 18,886 18,886 250,000 161,309 161,309
<CAPTION>
12.00%
---------------------------------------
POLICY CASH
END OF DEATH ACCOUNT SURRENDER
POLICY YEAR BENEFIT VALUE VALUE
<S> <C> <C> <C>
1 250,000 3,310 2,110
2 250,000 7,123 5,563
3 250,000 11,270 9,350
4 250,000 15,817 13,672
5 250,000 20,829 18,684
6 250,000 26,365 24,220
7 250,000 32,460 30,744
8 250,000 39,180 37,893
9 250,000 46,599 45,741
10 250,000 54,800 54,371
11 250,000 63,804 63,804
12 250,000 73,693 73,693
13 250,000 84,568 84,568
14 250,000 96,539 96,539
15 250,000 109,735 109,735
16 250,000 124,303 124,303
17 250,000 140,424 140,424
18 250,000 158,300 158,300
19 250,000 178,166 178,166
20 250,000 200,294 200,294
Age 75 692,076 659,120 659,120
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS' PORTFOLIOS. THE DEATH BENEFIT AND CASH VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY SAFECO OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
B-2
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C>
Initial Face Amount: $250,000
Death Benefit Option: A
Death Benefits Payable to
Age: 95
Annual Planned Premium(1): $4,000.00
Issue Age: 45
Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESULTS ASSUMING GUARANTEED CHARGES(2)
Assuming Hypothetical Gross Annual Investment Return of:
<TABLE>
<CAPTION>
0.00% 6.00%
--------------------------------------- ---------------------------------------
END OF ACCUM POLICY CASH POLICY CASH
POLICY PREMIUM (5% DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER
YEAR INT) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 2,678 1,478 250,000 2,875 1,675
2 8,610 250,000 5,498 3,938 250,000 6,069 4,509
3 13,241 250,000 8,215 6,295 250,000 9,344 7,424
4 18,103 250,000 10,818 8,673 250,000 12,696 10,551
5 23,208 250,000 13,309 11,164 250,000 16,127 13,982
6 28,568 250,000 15,675 13,530 250,000 19,629 17,484
7 34,196 250,000 17,911 16,195 250,000 23,198 21,482
8 40,106 250,000 20,002 18,715 250,000 26,824 25,537
9 46,312 250,000 21,932 21,074 250,000 30,496 29,638
10 52,827 250,000 23,691 23,262 250,000 34,204 33,775
11 59,669 250,000 25,262 25,262 250,000 37,937 37,937
12 66,852 250,000 26,637 26,637 250,000 41,690 41,690
13 74,395 250,000 27,805 27,805 250,000 45,458 45,458
14 82,314 250,000 28,752 28,752 250,000 49,231 49,231
15 90,630 250,000 29,446 29,446 250,000 52,985 52,985
16 99,361 250,000 29,866 29,866 250,000 56,707 56,707
17 108,530 250,000 29,983 29,983 250,000 60,376 60,376
18 118,156 250,000 29,747 29,747 250,000 63,956 63,956
19 128,264 250,000 29,109 29,109 250,000 67,413 67,413
20 138,877 250,000 28,028 28,028 250,000 70,718 70,718
Age 75 297,195 250,000 81,200 81,200
<CAPTION>
12.00%
---------------------------------------
END OF POLICY CASH
POLICY DEATH ACCOUNT SURRENDER
YEAR BENEFIT VALUE VALUE
<S> <C> <C> <C>
1 250,000 3,072 1,872
2 250,000 6,664 5,104
3 250,000 10,571 8,651
4 250,000 14,818 12,673
5 250,000 19,443 17,298
6 250,000 24,477 22,332
7 250,000 29,957 28,241
8 250,000 35,922 34,635
9 250,000 42,416 41,558
10 250,000 49,489 49,060
11 250,000 57,201 57,201
12 250,000 65,626 65,626
13 250,000 74,849 74,849
14 250,000 84,964 84,964
15 250,000 96,072 96,072
16 250,000 108,300 108,300
17 250,000 121,793 121,793
18 250,000 136,716 136,716
19 250,000 153,272 153,272
20 250,000 171,714 171,714
Age 75 591,345 563,186 563,186
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS' PORTFOLIOS. THE DEATH BENEFIT AND CASH VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY SAFECO OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
B-3
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
STANDARD NON-SMOKER
<TABLE>
<S> <C>
Initial Face Amount: $250,000
Death Benefit Option: A
Death Benefits Payable to
Age: 95
Annual Planned Premium(1): $4,000.00
Issue Age: 45
Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESULTS ASSUMING CURRENT CHARGES(2)
Assuming Hypothetical Gross Annual Investment Return of:
<TABLE>
<CAPTION>
0.00% 6.00%
--------------------------------------- ---------------------------------------
ACCUM POLICY CASH POLICY CASH
END OF PREMIUM (5% DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER
POLICY YEAR INT) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 2,725 1,525 250,000 2,924 1,724
2 8,610 250,000 5,581 4,021 250,000 6,157 4,597
3 13,241 250,000 8,332 6,412 250,000 9,474 7,554
4 18,103 250,000 10,993 8,848 250,000 12,892 10,747
5 23,208 250,000 13,605 11,460 250,000 16,459 14,314
6 28,568 250,000 16,171 14,026 250,000 20,185 18,040
7 34,196 250,000 18,671 16,955 250,000 24,055 22,339
8 40,106 250,000 21,112 19,825 250,000 28,085 26,798
9 46,312 250,000 23,495 22,637 250,000 32,284 31,426
10 52,827 250,000 25,821 25,392 250,000 36,660 36,231
11 59,669 250,000 28,021 28,021 250,000 41,155 41,155
12 66,852 250,000 30,060 30,060 250,000 45,744 45,744
13 74,395 250,000 31,931 31,931 250,000 50,425 50,425
14 82,314 250,000 33,622 33,622 250,000 55,195 55,195
15 90,630 250,000 35,118 35,118 250,000 60,050 60,050
16 99,361 250,000 36,404 36,404 250,000 64,984 64,984
17 108,530 250,000 37,478 37,478 250,000 70,008 70,008
18 118,156 250,000 38,324 38,324 250,000 75,118 75,118
19 128,264 250,000 38,928 38,928 250,000 80,319 80,319
20 138,877 250,000 39,273 39,273 250,000 85,611 85,611
Age 75 297,195 250,000 12,337 12,337 250,000 148,025 148,025
<CAPTION>
12.00%
---------------------------------------
POLICY CASH
END OF DEATH ACCOUNT SURRENDER
POLICY YEAR BENEFIT VALUE VALUE
<S> <C> <C> <C>
1 250,000 3,123 1,923
2 250,000 6,758 5,198
3 250,000 10,714 8,794
4 250,000 15,039 12,894
5 250,000 19,817 17,672
6 250,000 25,101 22,956
7 250,000 30,927 29,211
8 250,000 37,360 36,073
9 250,000 44,469 43,611
10 250,000 52,331 51,902
11 250,000 60,966 60,966
12 250,000 70,436 70,436
13 250,000 80,835 80,835
14 250,000 92,271 92,271
15 250,000 104,866 104,866
16 250,000 118,761 118,761
17 250,000 134,132 134,132
18 250,000 151,170 151,170
19 250,000 170,103 170,103
20 250,000 191,196 191,196
Age 75 662,966 631,396 631,396
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS' PORTFOLIOS. THE DEATH BENEFIT AND CASH VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY SAFECO OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
B-4
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
STANDARD NON-SMOKER
<TABLE>
<S> <C>
Initial Face Amount: $250,000
Death Benefit Option: A
Death Benefits Payable to
Age: 95
Annual Planned Premium(1): $4,000.00
Issue Age: 45
Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESULTS ASSUMING GUARANTEED CHARGES(2)
Assuming Hypothetical Gross Annual Investment Return of:
<TABLE>
<CAPTION>
0.00% 6.00%
--------------------------------------- ---------------------------------------
END OF ACCUM POLICY CASH POLICY CASH
POLICY PREMIUM (5% DEATH ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER
YEAR INT) BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C> <C>
1 4,200 250,000 2,678 1,478 250,000 2,875 1,675
2 8,610 250,000 5,498 3,938 250,000 6,069 4,509
3 13,241 250,000 8,215 6,295 250,000 9,344 7,424
4 18,103 250,000 10,818 8,673 250,000 12,696 10,551
5 23,208 250,000 13,309 11,164 250,000 16,127 13,982
6 28,568 250,000 15,675 13,530 250,000 19,629 17,484
7 34,196 250,000 17,911 16,195 250,000 23,198 21,482
8 40,106 250,000 20,002 18,715 250,000 26,824 25,537
9 46,312 250,000 21,932 21,074 250,000 30,496 29,638
10 52,827 250,000 23,691 23,262 250,000 34,204 33,775
11 59,669 250,000 25,262 25,262 250,000 37,937 37,937
12 66,852 250,000 26,637 26,637 250,000 41,690 41,690
13 74,395 250,000 27,805 27,805 250,000 45,458 45,458
14 82,314 250,000 28,752 28,752 250,000 49,231 49,231
15 90,630 250,000 29,446 29,446 250,000 52,985 52,985
16 99,361 250,000 29,866 29,866 250,000 56,707 56,707
17 108,530 250,000 29,983 29,983 250,000 60,376 60,376
18 118,156 250,000 29,747 29,747 250,000 63,956 63,956
19 128,264 250,000 29,109 29,109 250,000 67,413 67,413
20 138,877 250,000 28,028 28,028 250,000 70,718 70,718
Age 75 297,195 250,000 81,200 81,200
<CAPTION>
12.00%
---------------------------------------
END OF POLICY CASH
POLICY DEATH ACCOUNT SURRENDER
YEAR BENEFIT VALUE VALUE
<S> <C> <C> <C>
1 250,000 3,072 1,872
2 250,000 6,664 5,104
3 250,000 10,571 8,651
4 250,000 14,818 12,673
5 250,000 19,443 17,298
6 250,000 24,477 22,332
7 250,000 29,957 28,241
8 250,000 35,922 34,635
9 250,000 42,416 41,558
10 250,000 49,489 49,060
11 250,000 57,201 57,201
12 250,000 65,626 65,626
13 250,000 74,849 74,849
14 250,000 84,964 84,964
15 250,000 96,072 96,072
16 250,000 108,300 108,300
17 250,000 121,793 121,793
18 250,000 136,716 136,716
19 250,000 153,272 153,272
20 250,000 171,714 171,714
Age 75 591,345 563,186 563,186
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
(2) Assumes that no policy loans or withdrawals have been made. Zero values
indicate lapse in the absence of an additional premium payment.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY
BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS,
INCLUDING THE INVESTMENT ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES
OF RETURN FOR THE FUNDS' PORTFOLIOS. THE DEATH BENEFIT AND CASH VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL INVESTMENT RATES OF
RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN
BE MADE BY SAFECO OR THE FUNDS THAT THIS ASSUMED INVESTMENT RATE OF RETURN CAN
BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
B-5
<PAGE>
ILLUSTRATIONS
- -------------------------------------------------------------------
OF VARIATION IN DEATH BENEFIT, POLICY ACCOUNT AND CASH SURRENDER
VALUES IN RELATION TO THE FUNDS' INVESTMENT EXPERIENCE
In order to demonstrate how actual investment experience of the Funds affected
the Death Benefits, Policy Account and Cash Surrender Values (policy benefits)
of a Policy, the following hypothetical illustrations were developed and are
based upon the actual experience of the Portfolios of the Funds. These
illustrations assume that the Separate Account acquired an interest in the
Portfolios at their inception.
These tables illustrate cost of insurance and expense charges (Policy cost
factors) at both the current rates and the maximum rates guaranteed in the
Policies. The amounts shown at the end of each Policy Year reflect a daily
charge against the Investment Divisions. This charge includes a .70% charge
against the Separate Account for mortality and expense risks, the effect on each
Division's actual investment experience of the investment management fees and
direct operating expenses. These tables also assume deduction of a premium tax
rate based on 2.1% of premiums. The tables are for preferred risk male
non-smoker age 45. Planned premium payments are assumed to be paid at the
beginning of each Policy Year.
C-1
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP MONEY MARKET DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1983 250,000 3,241 2,041 250,000 3,005 1,805
1984 250,000 6,995 5,435 250,000 6,538 4,978
1985 250,000 10,807 8,887 250,000 10,125 8,205
1986 250,000 14,665 12,520 250,000 13,719 11,574
1987 250,000 18,694 16,549 250,000 17,415 15,270
1988 250,000 23,157 21,441 250,000 21,439 19,723
1989 250,000 28,353 27,066 250,000 26,072 24,785
1990 250,000 33,626 32,768 250,000 30,683 29,825
1991 250,000 38,548 38,119 250,000 34,863 34,434
1992 250,000 42,804 42,804 250,000 38,313 38,313
1993 250,000 46,807 46,807 250,000 41,458 41,458
1994 250,000 51,329 51,329 250,000 44,987 44,987
1995 250,000 56,798 56,798 250,000 49,268 49,268
1996 250,000 62,174 62,174 250,000 53,373 53,373
1997 250,000 67,757 67,757 250,000 57,552 57,552
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP HIGH INCOME DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1986 250,000 3,532 2,332 250,000 3,286 2,086
1987 250,000 6,669 5,109 250,000 6,233 4,673
1988 250,000 10,813 8,893 250,000 10,135 8,215
1989 250,000 13,122 10,977 250,000 12,266 10,121
1990 250,000 15,620 13,475 250,000 14,521 12,376
1991 250,000 25,150 23,434 250,000 23,270 21,554
1992 250,000 34,545 33,258 250,000 31,800 30,513
1993 250,000 45,001 44,143 250,000 41,205 40,347
1994 250,000 46,840 46,411 250,000 42,591 42,162
1995 250,000 59,870 59,870 250,000 54,056 54,056
1996 250,000 71,241 71,241 250,000 63,921 63,921
1997 250,000 86,811 86,811 250,000 77,479 77,479
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-2
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP EQUITY-INCOME DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1987 250,000 2,891 1,691 250,000 2,667 1,467
1988 250,000 7,395 5,835 250,000 6,912 5,352
1989 250,000 12,241 10,321 250,000 11,478 9,558
1990 250,000 12,742 10,597 250,000 11,904 9,759
1991 250,000 20,704 18,559 250,000 19,295 17,150
1992 250,000 27,607 25,891 250,000 25,602 23,886
1993 250,000 36,049 34,762 250,000 33,261 31,974
1994 250,000 41,537 40,679 250,000 38,093 37,235
1995 250,000 59,989 59,560 250,000 54,723 54,294
1996 250,000 71,630 71,630 250,000 64,987 64,987
1997 250,000 95,230 95,230 250,000 86,038 86,038
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP GROWTH DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1987 250,000 3,053 1,853 250,000 2,824 1,624
1988 250,000 7,127 5,567 250,000 6,660 5,100
1989 250,000 13,431 11,511 250,000 12,607 10,687
1990 250,000 14,346 12,201 250,000 13,424 11,279
1991 250,000 25,319 23,174 250,000 23,654 21,509
1992 250,000 30,808 29,092 250,000 28,650 26,934
1993 250,000 40,198 38,911 250,000 37,211 35,924
1994 250,000 42,871 42,013 250,000 39,449 38,591
1995 250,000 61,915 61,486 250,000 56,673 56,244
1996 250,000 74,109 74,109 250,000 67,477 67,477
1997 250,000 94,805 94,805 250,000 85,954 85,954
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-3
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP OVERSEAS DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1988 250,000 3,206 2,006 250,000 2,971 1,771
1989 250,000 8,020 6,460 250,000 7,512 5,952
1990 250,000 10,789 8,869 250,000 10,111 8,191
1991 250,000 14,831 12,686 250,000 13,880 11,735
1992 250,000 15,734 13,589 250,000 14,638 12,493
1993 250,000 25,740 24,024 250,000 23,835 22,119
1994 250,000 29,005 27,718 250,000 26,679 25,392
1995 250,000 34,860 34,002 250,000 31,829 30,971
1996 250,000 42,561 42,132 250,000 38,553 38,124
1997 250,000 50,492 50,492 250,000 45,347 45,347
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP II INVESTMENT GRADE BOND DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1989 250,000 3,278 2,078 250,000 3,041 1,841
1990 250,000 6,751 5,191 250,000 6,307 4,747
1991 250,000 11,389 9,469 250,000 10,676 8,756
1992 250,000 15,277 13,132 250,000 14,299 12,154
1993 250,000 20,190 18,045 250,000 18,827 16,682
1994 250,000 22,123 20,407 250,000 20,488 18,772
1995 250,000 29,325 28,038 250,000 26,983 25,696
1996 250,000 33,083 32,225 250,000 30,201 29,343
1997 250,000 39,059 38,630 250,000 35,344 34,915
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-4
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP II ASSET MANAGER DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1990 250,000 3,158 1,958 250,000 2,924 1,724
1991 250,000 7,712 6,152 250,000 7,218 5,658
1992 250,000 11,982 10,062 250,000 11,239 9,319
1993 250,000 18,160 16,015 250,000 17,027 14,882
1994 250,000 19,520 17,375 250,000 18,215 16,070
1995 250,000 26,241 24,525 250,000 24,356 22,640
1996 250,000 33,339 32,052 250,000 30,767 29,480
1997 250,000 43,644 42,786 250,000 40,047 39,189
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP II INDEX 500 DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1993 250,000 3,261 2,061 250,000 3,024 1,824
1994 250,000 6,383 4,823 250,000 5,957 4,397
1995 250,000 13,016 11,096 250,000 12,216 10,296
1996 250,000 19,656 17,511 250,000 18,441 16,296
1997 250,000 30,097 27,952 250,000 28,183 26,038
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-5
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP II ASSET MANAGER: GROWTH DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 3,719 2,519 250,000 3,466 2,266
1996 250,000 8,216 6,656 250,000 7,708 6,148
1997 250,000 14,106 12,186 250,000 13,268 11,348
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP II CONTRAFUND DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 4,286 3,086 250,000 4,015 2,815
1996 250,000 8,986 7,426 250,000 8,452 6,892
1997 250,000 14,952 13,032 250,000 14,088 12,168
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-6
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to
Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FIDELITY'S VIP III BALANCED DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 3,403 2,203 250,000 3,162 1,962
1996 250,000 7,143 5,583 250,000 6,682 5,122
1997 250,000 12,461 10,541 250,000 11,696 9,776
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP III GROWTH OPPORTUNITIES DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 4,041 2,841 250,000 3,778 2,578
1996 250,000 8,468 6,908 250,000 7,954 6,394
1997 250,000 15,005 13,085 250,000 14,130 12,210
</TABLE>
- --------------------------------------------------------------------------------
FIDELITY'S VIP III GROWTH & INCOME DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
POLICY ------------------------------------------- -------------------------------------------
YEAR END DEATH POLICY CASH SURRENDER DEATH POLICY CASH SURRENDER
DECEMBER 31ST BENEFIT ACCOUNT VALUE VALUE BENEFIT ACCOUNT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1997 250,000 3,958 2,758 250,000 3,697 2,497
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-7
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LEXINGTON NATURAL RESOURCES DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1992 250,000 3,038 1,838 250,000 2,809 1,609
1993 250,000 6,803 5,243 250,000 6,352 4,792
1994 250,000 9,216 7,296 250,000 8,614 6,694
1995 250,000 14,261 12,116 250,000 13,327 11,182
1996 250,000 21,891 19,746 250,000 20,406 18,261
1997 250,000 26,520 24,804 250,000 24,589 22,873
</TABLE>
- --------------------------------------------------------------------------------
LEXINGTON EMERGING MARKETS DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
POLICY ------------------------------------------- -------------------------------------------
YEAR END DEATH POLICY CASH SURRENDER DEATH POLICY CASH SURRENDER
DECEMBER 31ST BENEFIT ACCOUNT VALUE VALUE BENEFIT ACCOUNT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 2,796 1,596 250,000 2,575 1,375
1996 250,000 6,318 4,758 250,000 5,888 4,328
1997 250,000 8,157 6,237 250,000 7,607 5,687
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-8
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SAFECO RST BOND DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1988 250,000 3,168 1,968 250,000 2,934 1,734
1989 250,000 6,973 5,413 250,000 6,516 4,956
1990 250,000 10,623 8,703 250,000 9,949 8,029
1991 250,000 15,494 13,349 250,000 14,500 12,355
1992 250,000 19,646 17,501 250,000 18,312 16,167
1993 250,000 24,907 23,191 250,000 23,084 21,368
1994 250,000 26,840 25,553 250,000 24,691 23,404
1995 250,000 34,973 34,115 250,000 31,936 31,078
1996 250,000 37,841 37,412 250,000 34,243 33,814
1997 250,000 43,934 43,934 250,000 39,356 39,356
</TABLE>
- --------------------------------------------------------------------------------
SAFECO RST EQUITY DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1988 250,000 3,817 2,617 250,000 3,561 2,361
1989 250,000 8,851 7,291 250,000 8,314 6,754
1990 250,000 11,167 9,247 250,000 10,484 8,564
1991 250,000 17,997 15,852 250,000 16,892 14,747
1992 250,000 22,578 20,433 250,000 21,113 18,968
1993 250,000 32,668 30,952 250,000 30,422 28,706
1994 250,000 38,642 37,355 250,000 35,806 34,519
1995 250,000 53,397 52,539 250,000 49,250 48,392
1996 250,000 70,128 69,699 250,000 64,399 63,970
1997 250,000 90,995 90,995 250,000 83,227 83,227
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-9
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SAFECO RST GROWTH DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1994 250,000 3,335 2,135 250,000 3,096 1,896
1995 250,000 9,193 7,633 250,000 8,630 7,070
1996 250,000 16,213 14,293 250,000 15,262 13,342
1997 250,000 27,876 25,731 250,000 26,249 24,104
</TABLE>
- --------------------------------------------------------------------------------
SAFECO RST NORTHWEST DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1994 250,000 3,053 1,853 250,000 2,823 1,623
1995 250,000 6,592 5,032 250,000 6,152 4,592
1996 250,000 10,808 8,888 250,000 10,120 8,200
1997 250,000 18,138 15,993 250,000 16,993 14,848
</TABLE>
- --------------------------------------------------------------------------------
SAFECO RST SMALL COMPANY DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
POLICY ------------------------------------------- -------------------------------------------
YEAR END DEATH POLICY CASH SURRENDER DEATH POLICY CASH SURRENDER
DECEMBER 31ST BENEFIT ACCOUNT VALUE VALUE BENEFIT ACCOUNT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1997 250,000 2,929 1,729 250,000 2,704 1,504
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-10
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WANGER U.S. SMALL CAP DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
POLICY ------------------------------------------- -------------------------------------------
YEAR END DEATH POLICY CASH SURRENDER DEATH POLICY CASH SURRENDER
DECEMBER 31ST BENEFIT ACCOUNT VALUE VALUE BENEFIT ACCOUNT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1996 250,000 4,528 3,328 250,000 4,249 3,049
1997 250,000 9,938 8,378 250,000 9,364 7,804
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-11
<PAGE>
VARIABLE UNIVERSAL LIFE
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
MALE
PREFERRED NON-SMOKER
<TABLE>
<S> <C> <C> <C>
Initial Face Amount: $250,000 Annual Planned Premium(1): $4,000.00
Death Benefit Option: A Issue Age: 45
Death Benefits Payable to Age: 95 Premiums Payable to Age: 95
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICAN CENTURY VP INTERNATIONAL DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1995 250,000 3,345 2,145 250,000 3,105 1,905
1996 250,000 7,374 5,814 250,000 6,901 5,341
1997 250,000 12,357 10,437 250,000 11,597 9,677
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICAN CENTURY VP BALANCED DIVISION
<TABLE>
<CAPTION>
BASED UPON CURRENT CHARGES BASED UPON GUARANTEED CHARGES
----------------------------------------- -----------------------------------------
POLICY POLICY POLICY
YEAR END DEATH ACCOUNT CASH SURRENDER DEATH ACCOUNT CASH SURRENDER
DECEMBER 31ST BENEFIT VALUE VALUE BENEFIT VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
1992 250,000 2,725 1,525 250,000 2,507 1,307
1993 250,000 6,258 4,698 250,000 5,830 4,270
1994 250,000 9,283 7,363 250,000 8,670 6,750
1995 250,000 14,879 12,734 250,000 13,901 11,756
1996 250,000 19,958 17,813 250,000 18,584 16,439
1997 250,000 26,484 24,768 250,000 24,535 22,819
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Assumes the premium shown is paid at the beginning of each policy year.
Values would be different if premiums are paid with a different frequency or
in different amounts.
THESE ILLUSTRATIONS ARE BASED UPON PAST PERFORMANCE AND ARE NOT INDICATIVE OF
FUTURE RESULTS. FUTURE POLICY BENEFITS WILL FLUCTUATE BASED UPON ACTUAL
INVESTMENT RESULTS WHICH MAY BE MORE OR LESS THAN THOSE ACHIEVED IN THE PAST AND
WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS BY THE
OWNER. NO REPRESENTATION CAN BE MADE BY SAFECO OR THE FUNDS THAT THESE RESULTS
CAN BE ACHIEVED IN THE FUTURE.
C-12
<PAGE>
NET RATES OF RETURN
The VIP, VIP II, and VIP III Division tables shown earlier in this section
appendix are based on the investment performance, after actual expenses, of the
corresponding VIP, VIP II, and VIP III Portfolios. The average annual total
return used in calculating the death benefit, policy account value and cash
surrender value for the respective Portfolios are listed below. These annual
total returns do not account for insurance and administrative charges but are
net of the mortality and expense risk charge of 0.70%; and, they are not an
estimate or a guarantee of future investment performance.
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE VIP PORTFOLIOS
<TABLE>
<CAPTION>
VIP VIP VIP
MONEY HIGH EQUITY- VIP VIP
YEAR MARKET INCOME INCOME GROWTH OVERSEAS
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1983 8.46
1984 9.73
1985 7.41
1986 6.00 16.98
1987 5.74 0.52 -1.83 2.96
1988 6.69 10.94 22.01 14.88 7.43
1989 8.42 -4.87 16.64 30.81 25.58
1990 7.34 -2.93 -15.99 -12.43 -2.37
1991 5.39 34.38 30.74 44.81 7.30
1992 3.20 22.47 16.19 8.62 -11.42
1993 2.53 19.70 17.59 18.67 36.65
1994 3.55 -2.34 6.37 -0.72 1.02
1995 5.17 20.02 34.39 34.66 8.98
1996 4.71 13.33 13.58 14.01 12.45
1997 4.81 16.97 27.41 22.78 10.86
</TABLE>
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE VIP II PORTFOLIOS
<TABLE>
<CAPTION>
VIP II
INVESTMENT VIP II VIP II VIP II VIP II
GRADE ASSET INDEX ASSET MGR: CONTRA-
YEAR BOND MANAGER 500 GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1989 9.56
1990 5.51 6.02
1991 15.68 21.86
1992 5.95 11.01
1993 10.26 20.53 9.04
1994 -4.46 -6.79 0.34
1995 16.62 16.26 36.49 22.43 38.92
1996 2.49 13.90 22.01 19.34 20.52
1997 8.36 19.95 32.12 24.37 23.44
</TABLE>
C-13
<PAGE>
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE VIP III PORTFOLIOS
<TABLE>
<CAPTION>
VIP III VIP III
GROWTH VIP III GROWTH &
YEAR OPPORTUNITIES BALANCED INCOME
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1995 31.82 13.22
1996 17.57 9.28
1997 29.25 21.48 29.39
</TABLE>
The Lexington Natural Resources Trust and Lexington Emerging Markets Fund
("Lexington") Division tables shown earlier in this appendix are based on the
investment performance, after actual expenses, of the corresponding Lexington
Portfolios. The average annual total return used in calculating the death
benefit, policy account value and cash surrender value for the respective
Portfolios are listed below. These annual total returns do not account for
insurance and administrative charges but are net of the mortality and expense
risk charge of 0.70%; and, they are not an estimate or a guarantee of future
investment performance.
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE LEXINGTON PORTFOLIOS
<TABLE>
<CAPTION>
LEXINGTON LEXINGTON
NATURAL EMERGING
YEAR RESOURCES MARKETS
- -------------------------------------------------------
<S> <C> <C>
1992 2.52
1993 10.20
1994 -6.08
1995 16.17 -4.63
1996 26.19 6.76
1997 6.45 -12.25
</TABLE>
The Wanger Advisors Trust ("Wanger") Division tables shown earlier in this
appendix are based on the investment performance, after actual expenses, of the
corresponding Wanger Portfolios. The average annual total return used in
calculating the death benefit, policy account value and cash surrender value for
the respective Portfolios are listed below. These annual total returns do not
account for insurance and administrative charges but are net of the mortality
and expense risk charge of 0.70%; and, they are not an estimate or a guarantee
of future investment performance.
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE WANGER PORTFOLIOS
<TABLE>
<CAPTION>
WANGER
U.S. SMALL
YEAR CAP
- --------------------------------------
<S> <C>
1996 45.93
1997 28.71
</TABLE>
C-14
<PAGE>
The SAFECO RST Division tables shown earlier in this appendix are based on the
investment performance, after actual expenses, of the corresponding SAFECO RST
Portfolios. The average annual total return used in calculating the death
benefit, policy account value and cash surrender value for the respective
Portfolios are listed below. These annual total returns do not account for
insurance and administrative charges but are net of the mortality and expense
risk charge of 0.70%; and, they are not an estimate or a guarantee of future
investment performance.
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE SAFECO RST PORTFOLIOS
<TABLE>
<CAPTION>
SAFECO SAFECO SAFECO SAFECO SAFECO
RST RST RST RST RST
YEAR BOND EQUITY GROWTH NORTHWEST SMALL CO.
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1988 6.33 25.28
1989 10.60 26.41
1990 5.87 -5.91
1991 13.28 26.15
1992 6.12 7.36
1993 9.85 27.22
1994 -3.63 8.24 11.22 2.95
1995 17.17 27.93 40.30 6.72
1996 -0.16 24.09 31.36 11.74
1997 7.71 24.15 43.85 30.32 n/a
</TABLE>
The American Century Variable Portfolios, Inc. ("ACVP") Division tables shown
earlier in this appendix are based on the investment performance, after actual
expenses, of the corresponding ACVP Portfolios. The average annual total return
used in calculating the death benefit, policy account value and cash surrender
value for the respective Portfolios are listed below. These annual total returns
do not account for insurance and administrative charges, but are net of the
mortality and expense risk charge of 0.70%; and, they are not an estimate or a
guarantee of future investment performance.
CALENDAR YEAR AVERAGE NET ANNUAL TOTAL RETURN (%) FOR THE ACVP PORTFOLIOS
<TABLE>
<CAPTION>
ACVP ACVP
YEAR BALANCED INTERNATIONAL
- -----------------------------------------------------------------------
<S> <C> <C>
1992 -6.70
1993 7.00
1994 -0.10
1995 20.40 11.50
1996 11.40 13.60
1997 15.11 17.93
</TABLE>
C-15
<PAGE>
STANDARD AND POOR'S 500
- -------------------------------------------------------------------
The Standard and Poor's ("S&P 500") is a weighted index of 500 widely held
stocks: 400 Industrials, 40 Financial Company Stocks, 40 Public Utilities, and
20 Transportation stocks, most of which are traded on the New York Stock
Exchange. The S&P 500 is generally regarded as an accurate composite of the
overall stock market.
STANDARD AND POOR'S 500
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
1983 164.93
1984 167.24
1985 211.28
1986 242.17
1987 247.08
1988 277.72
1989 353.40
1990 330.22
1991 417.09
1992 435.71
1993 466.45
1994 459.27
1995 615.93
1996 740.74
1997 970.43
</TABLE>
ILLUSTRATION OF POLICY VALUES--
VARIABLE UNIVERSAL LIFE
Policy accumulation values are calculated assuming the Standard and Poor's 500
Index annual rates of return on a $250,000 policy, death benefit option A, which
was purchased in 1983 by a 45 year old, male, preferred non-smoker. The current
schedule of cost of insurance rates were used.
<TABLE>
<CAPTION>
S&P 500 POLICY CASH
ANNUAL ACCOUNT SURRENDER DEATH
YEAR RETURN VALUE VALUE BENEFIT
- ----------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
1983 22.43% 3,695 2,495 250,000
1984 6.10% 7,184 5,624 250,000
1985 31.57% 13,512 11,592 250,000
1986 18.21% 19,498 17,353 250,000
1987 5.17% 23,532 21,387 250,000
1988 16.50% 30,800 29,084 250,000
1989 31.43% 44,327 43,040 250,000
1990 -3.19% 45,470 44,612 250,000
1991 30.55% 63,073 62,644 250,000
1992 7.68% 70,748 70,748 250,000
1993 10.00% 80,635 80,635 250,000
1994 1.32% 84,086 84,086 250,000
1995 37.51% 119,219 119,219 250,000
1996 23.25% 149,941 149,941 250,000
1997 33.35% 203,337 203,337 264,338
</TABLE>
1) Assumes an annual $4000 premium is paid at the beginning of each policy
year. Values would be different if premiums are paid with a different
frequency or in different amounts.
2) Assumes that no policy loan has been made. Excessive loans or withdrawals
may cause this policy to lapse because of insufficient cash value.
THE STANDARD AND POOR'S INDEX RATES SHOWN ABOVE FOR THE LAST 15 YEARS IS A
DEMONSTRATION OF A WEIGHTED AVERAGE OF 500 WIDELY HELD STOCKS. IT SHOULD NOT BE
DEEMED A REPRESENTATION OF FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATIONS
MADE BY THE OWNER, THE SIZE OF THE POLICY, ACTUAL PREMIUMS PAID, AND COST OF
INSURANCE. THE INFORMATION IN THE CHART IS NOT NECESSARILY INDICATIVE OF FUTURE
PERFORMANCE.
D-1
<PAGE>
LONG TERM MARKET TRENDS
- -------------------------------------------------------------------
The information below covering the period of 1926-1997 an examination of the
basic relationship between risk and return among the different asset classes,
and between nominal and real (inflation-adjusted) returns. The information is
provided because the policyowners have varied investment portfolios available
which have different investment objectives and policies. The chart generally
demonstrates how different classes of investments have performed during the
period. The study of asset returns provides a period long enough to include most
of the major types of events that investors have experienced in the past and may
experience in the future. This is a historical record and is not intended as a
projection of future performance.
The graph depicts the growth of a dollar invested in large company stocks, small
company stocks, long-term government bonds, Treasury bills, and a hypothetical
asset returning the inflation rate over the period from the end of 1925 to the
end of 1997. All results assume reinvestment of dividends on stocks or coupons
on bonds and no taxes. Transaction costs are not included, except in the small
company stock index starting in 1982. Charges associated with a variable
insurance policy are not reflected in the chart.
Each of the cumulative index values is initiated at $1.00 at year-end 1925. The
graph illustrates that large company stocks and small company stocks gained the
most over the entire period. This growth, however, was earned by taking
substantial risk. In contrast, long-term government bonds (with approximately
20-year maturity), which exposed the holder to less risk, grew less.
The lowest risk strategy over the entire period was to buy U.S. Treasury bills.
Since Treasury bills tended to track inflation, the resulting real
(inflation-adjusted) returns were near zero for the entire 1926-1997 period.
[Graph appears here showing the growth of a dollar invested in large company
stocks, long-term government bonds, Treasury bills, and a hypothetical asset
returning the inflation rate over the period from the end of 1925 to the end of
1997.]
Year End 1925 = $1.00
Source: Stocks, Bonds, Bills and Inflation 1998 Yearbook-TM-
Ibbotson Associates, Chicago (annually updates work by
Roger G. Ibbotson and Rex A. Sinquefield). Used with permission.
All rights reserved.
E-1
<PAGE>
REPRESENTATIONS
1. Registrant represents that Section (b)(13)(iii)(F) of Rule 6e-3(T) is being
relied on.
2. Registrant represents that the level of the risk charge is reasonable in
relation to the risks assumed by the life insurer under the Policies.
3. Registrant represents that it has analyzed the risk charge taking into
consideration such facts as current charge levels, potential adverse
mortality, the manner in which charges are imposed, the markets in which
the Policy will be offered and anticipated sales and lapse rates.
Registrant also represents that a memorandum has been prepared in
connection with the analysis of the risk charge as set forth above.
Registrant undertakes to keep and make available to the Commission on
request the memorandum.
4. Registrant represents that the Company has concluded that there is a
reasonable likelihood that the distribution financing arrangement of the
Separate Account will benefit the Separate Account and policyholders and
will keep and make available to the Commission on request a memorandum
setting forth the basis for this representation.
5. Registrant represents that the Separate Account will invest only in
management investment companies which have undertaken to have a Board of
Directors, a majority of whom are not interested persons of the Company,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15 (d) of the Securities Exchange
Act of 1934. The undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and reports as may be prescribed by any rule or regulation of the
Commission theretofore or hereafter duly adopted pursuant to authority conferred
in that section.
Pursuant to section 26(e) of the Investment Company Act of 1940, the
registrant and SAFECO Life Insurance Company represent that the fees and
charges deducted under the contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred and
risks assumed by the insurance company.
INDEMNIFICATION
Under its Bylaws, SAFECO, to the full extent permitted by the Washington
Business Corporation Act, shall indemnify any person who was or is a party to
any proceeding (whether brought by or in the right of SAFECO or otherwise) by
reason of the fact that he or she is or was a director of SAFECO, or, while a
director of SAFECO, is or was serving at the request of SAFECO as a director,
officer, partner, trustee, employee, or agent or another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise, or employee
benefit plan, against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by him or her in connection with such proceeding.
SAFECO shall extend such indemnification as if provided to directors above to
any person, not a director of SAFECO, who is or was an officer of SAFECO or is
or was serving at the request of SAFECO as a director, officer, partner,
trustee, or agent of another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan. In addition, the
Board of Directors of SAFECO may, by resolution, extend such further
indemnification to an officer or such other person as may to it seem fair and
reasonable in view of all relevant circumstances.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of SAFECO
pursuant to such provisions of the bylaws or statutes or otherwise, SAFECO has
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in said Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by SAFECO of expenses incurred or paid
by a director, officer or controlling person of SAFECO in the successful defense
of any such action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the Policies issued by the Separate
Account, SAFECO will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in said Act and will be governed by the final adjudication of such
issue.
<PAGE>
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
SAFECO Life Insurance Company ("SAFECO") established SAFECO ("Registrant") by
resolution of its Board of Directors pursuant to Washington law. SAFECO is a
wholly owned subsidiary of SAFECO Corporation, which is a publicly owned
company. Both companies were organized under Washington law. SAFECO
Corporation, a Washington Corporation, owns 100% of the following Washington
corporations: SAFECO Insurance Company of America, General Insurance Company
of America, First National Insurance Company of America, SAFECO Life Insurance
Company, SAFECO Assigned Benefits Service Company, SAFECO Administrative
Services, Inc., SAFECO Properties Inc., SAFECO Credit Company, Inc., SAFECO
Asset Management Company, SAFECO Securities, Inc., SAFECO Services
Corporation, SAFECO Trust Company and General America Corporation. SAFECO
Corporation owns 100% of SAFECO National Insurance Company, a Missouri
corporation, SAFECO Insurance Company of Illinois, an Illinois corporation and
SAFECO Insurance Company of Pennsylvania, a Pennsylvania corporation. SAFECO
Insurance Company of America owns 100% of SAFECO Surplus Lines Insurance
Company, a Washington corporation, and Market Square Holding, Inc., a
Minnesota corporation. SAFECO Life Insurance Company owns 100% of SAFECO
National Life Insurance Company, a Washington corporation, First SAFECO
National Life Insurance Company of New York, a New York corporation, and 100%
of Empire Life Insurance Company, a Washington corporation. SAFECO
Administrative Services, Inc. owns 100% of Employee Benefit Claims of
Wisconsin, Inc. and Wisconsin Pension and Group Services, Inc., each a
Wisconsin corporation. General America Corporation owns 100% of COMAV
Managers, Inc., an Illinois corporation, F.B. Beattie & Co., Inc., a
Washington corporation, General America Corp. of Texas, a Texas corporation,
Talbot Financial Corporation, a Washington corporation, Goldware & Taylor
Insurance Service, a California corporation and SAFECO Select Insurance
Services, Inc., a California corporation. F.B. Beattie & Co., Inc. owns 100%
of F.B. Beattie Insurance Services, Inc., a California corporation. General
America Corp. of Texas is Attorney-in-fact for SAFECO Lloyds Insurance
Company, a Texas corporation. Talbot Financial Corporation owns 100% of Talbot
Agency, Inc., a New Mexico corporation. Talbot Agency, Inc. owns 100% of
SAFECO Investment Services, Inc., a Washington corporation. SAFECO Properties
Inc. owns 100% of the following, each a Washington corporation: SAFECARE
Company, Inc. and Winmar Company, Inc. SAFECARE Company, Inc. owns 100% of the
following, each a Washington corporation: RIA Development, Inc., S.C.
Arkansas, Inc., S.C. Bellevue/Lynn, S.C. Bellevue, Inc., S.C. Everett, Inc.,
S.C. Everett/Lynn, S.C. Lynden, Inc., S.C. Lynden/Lynn, S.C. Marysville, Inc.,
S.C. Northgate, Inc., S.C. Northgate/LR1, L.L.C., S.C. Vancouver, Inc., S.C.
Vancouver/Lynn (Joint Venture), SAFECARE S.C. Bakersfield, Inc. and SAFECARE
S.C. Bakersfield/Lynn Limited Partnership. SAFECARE Company, Inc. owns 50% of
Lifeguard Ventures, Inc., a California corporation, and S.C. River Oaks, Inc.,
a Washington corporation. Winmar Company, Inc. owns 100% of the following: C-W
Properties, Inc., Gem State Investors, Inc., Kitsap Mall, Inc., WNY
Development, Inc., Winmar Cascade, Inc., Winmar Metro, Inc., Winmar Northwest,
Inc., Winmar Redmond, Inc. and Winmar of Kitsap, Inc., each a Washington
corporation, and Capitol Court Corp., a Wisconsin corporation, SAFECO
Properties of Boise, Inc., an Idaho corporation, SCIT, Inc., a Massachusetts
corporation, Valley Fair Shopping Centers, Inc., a Delaware corporation, WDI
Golf Club, Inc., a California corporation, Winmar Oregon, Inc., an Oregon
corporation, Winmar of Texas, Inc., a Texas corporation, and Winmar of the
Desert, Inc., a California corporation. Winmar Oregon, Inc. owns 100% of the
following, each an Oregon corporation: North Coast Management, Inc., Pacific
Surfside Corp., Winmar of Jantzen Beach, Inc. and W-P Development, Inc., and
100% of the following, each a Washington corporation: Washington Square, Inc.
and Winmar Pacific, Inc.
SAFECO Corporation, a Washington corporation, owns 100% of American States
Financial Corporation, an Indiana corporation. American States Financial
Corporation owns 100% of American States Insurance Company, an Indiana
corporation. American States Insurance Company owns 100% of the following
Indiana corporations: American Economy Insurance Company, American States
Preferred Insurance Company, American States Life Insurance company, and City
Insurance Agency, Inc. American States Insurance Company owns 100% of
Insurance Company of Illinois, an Illinois corporation, and American States
Lloyds Insurance Company, a Texas corporation. American Economy Insurance
Company owns 100% of American States Insurance Company of Texas, a Texas
corporation.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises:
I. The following papers and documents:
The facing sheet.
The Prospectus consisting of __ pages.
The undertaking to file reports.
The signatures. Written consents of the following persons:
(1) Ernst & Young LLP, Independent Auditors
(2) James Mankin, Actuary
II. The following exhibits:
A. Copies of all exhibits required by paragraph A of instructions
for Exhibits in Form N-8B-2.
(1) Resolution of Board of Directors of the Company authorizing
the Separate Account *
(2) Not Applicable
(3) (a) Principal Underwriter's Agreement *
(b) Broker-Dealer Selling Agreement *
(c) Commission Schedule ****
(4) Not Applicable
(5) Individual Flexible Premium Variable
Life Insurance Policy ****
(6) (a) Articles of Incorporation of the Company
Revised as of 11/90 *
(b) Bylaws of the Company
Revised as of 11/91 *
(7) Not Applicable
(8) Not Applicable
(9) (a) Reinsurance Agreement*
(b) Form of Participation Agreement (Fidelity VIP I & II)
Form of Sub-Licensing Agreement *
(c) Form of Participation Agreement (Fidelity VIP III)
Form of Sub-Licensing Agreement ****
(d) Participation Agreement by and among SAFECO
Life Insurance Company, Lexington
Natural Resources Trust, and
Lexington Management Corporation **
(e) Form of Participation Agreement (Wanger)
Form of Sub-Licensing Agreement ****
(f) Form of Participation Agreement (ACVP)
Form of Sub-Licensing Agreement ****
(10) (a) Application Form (revised 4/91) *
(b) Part IV of Application Form (revised 7/97) *****
(13) Power Of Attorney ***
99.C1 Consent of Independent Auditors
99.2 Opinion and Consent of Counsel
(SAFECO Life Ins. Co.)
99.C6 Consent of Actuary (James Mankin)
* Incorporated by reference to Post-Effective
Amendment of SAFECO Separate Account SL filed with
the SEC on April 30, 1997 (File No. 33-10248)
** Incorporated by reference to Post-Effective
Amendment of SAFECO Separate Account C filed with
the SEC on April 29, 1996 (File No. 33-69712)
*** Incorporated by reference to Registrant's
Post-Effective Amendment filed with the SEC on
May 1, 1998 (File No. 33-69712)
**** Incorporated by reference to Pre-Effective
Amendment of SAFECO Separate Account SL filed with
the SEC on October 30, 1997 (File No. 333-30329)
***** Incorporated by reference to Post-Effective
Amendment of SAFECO Separate Account SL filed with
the SEC on April 30, 1998 (File No. 33-10248)
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485 under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf thereto duly authorized, in the City of
Seattle and State of Washington on the 26th day of February, 1999.
SAFECO Separate Account SL
By: SAFECO Life Insurance Company
(Depositor)
By: /s/ Randall H. Talbot
Randall H. Talbot, President
ATTEST: /s/ Rod Pierson
Rod Pierson, Secretary
Pursuant to the requirements of the Securities Act of 1933, this Post
Effective Amendment No. 17 to the Registration Statement on Form S-6 has been
signed by the following persons in the capacities and on the dates indicated.
Those signatures with an asterisk indicate the signature was supplied by a duly
appointed attorney-in-fact under a valid Power of Attorney.
Name Title Title Date
- ---- ----- ----------
Donald S. Chapman* Director
Donald S. Chapman
/s/ Boh A. Dickey Director
Boh A. Dickey
R.H. Eigsti* Director and Chairman
R.H. Eigsti
James T. Flynn* Vice President and
Controller (Principal
James T. Flynn Accounting Officer)
Rod Pierson* Director, Senior Vice
Rod Pierson President and Secretary
James W. Ruddy* Director
James W. Ruddy
Robert L. Spaulding* Director
Robert L. Spaulding
W. Randall Stoddard* Director
W. Randall Stoddard
Dale E. Lauer** Director
Dale E. Lauer
*By /s/ Boh A. Dickey
Boh A. Dickey
Attorney-in-Fact
*By /s/ Randall H. Talbot
Randall H. Talbot
Attorney-in-Fact
<PAGE>
EXHIBITS TO
POST-EFFECTIVE AMENDMENT NO. 16
TO
FORM S-6
FOR
SEPARATE ACCOUNT SL
<PAGE>
EXHIBITS
99.C1 Consent of Independent Auditors
99.2 Opinion and Consent of Counsel
99.C6 Consent of Actuary
<PAGE>
TO BE FILED BY POST EFFECTIVE AMENDMENT
<PAGE>
February 26, 1999
Board of Directors
SAFECO Life Insurance Company
SAFECO Plaza
Seattle, WA 98185
Re: Registration NO. 333-30329
Gentlemen:
I have acted as counsel in connection with the filing with the Securities and
Exchange Commission of Post-Effective Amendment No. 17 to a Registration
Statement on Form S-6 for the Individual Flexible Premium Life Insurance Policy
(the "Policy") to be issued by SAFECO Life Insurance Company and its separate
account, Separate Account SL.
I have made such examination of the law and have examined such records and
documents as in my opinion are necessary or appropriate to enable me to render
the following opinion:
1. SAFECO Life Insurance Company is a valid and existing stock life insurance
company of the state of Washington.
2. Separate Account SL is a separate investment account of SAFECO Life
Insurance Company created and validly existing pursuant to the insurance
laws and regulations of the state of Washington.
3. All of the prescribed corporate procedures for the issuance of the Policies
have been followed, and, when such Policies are issued in accordance with
the Prospectus contained in the Registration Statement, all state
requirements relating to such Policies will have been complied with.
4. Upon the acceptance of Premium Payments made by a Policyowner pursuant to a
Policy issued in accordance with the prospectus contained in the
Registration Statement and upon compliance with acceptable law, such a
Policyowner will have legally-issued, fully paid, non-assessable
contractual interest under such Policy.
You may use this opinion letter, or a copy hereof, as an exhibit to the
Registration Statement.
Very truly yours,
William E. Crawford
Counsel
<PAGE>
TO BE FILED BY POST EFFECTIVE AMENDMENT
