<PAGE>
Registration No. 33-13774
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
POST-EFFECTIVE
AMENDMENT NO. 19
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF l933
SEPARATE ACCOUNT FOUR
OF
THE MANUFACTURERS LIFE
INSURANCE COMPANY OF AMERICA
(Exact name of trust)
THE MANUFACTURERS LIFE
INSURANCE COMPANY OF AMERICA
(Name of depositor)
500 N. Woodward Avenue
Bloomfield Hills, Michigan 48304
(Address of depositor's principal executive offices)
STEPHEN C. NESBITT
Secretary and General Counsel Notice to:
The Manufacturers Life J. Sumner Jones, Esq.
Insurance Company of America Jones & Blouch
500 N. Woodward Avenue 1025 Thomas Jefferson St.,
N.W.
Bloomfield Hills, Michican 48304 Washington, D.C. 20007
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of
Rule 485
___ on February 14, 1996 pursuant to paragraph (b) of
Rule 485
___ 60 days after filing pursuant to paragraph (a)(1) of
Rule 485
_x_ on February 14, 1996 pursuant to paragraph (a)(1) of
Rule 485
___ 75 days after filing pursuant to paragraph (a)(2) of
Rule 485
Registrant has registered, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, an indefinite number of
individual variable annuity contracts for sale under the
Securities Act of 1933 and filed a Rule 24f-2 notice on
February 28, 1995 for its its fiscal year ended December 31,
1994.
<PAGE>
SEPARATE ACCOUNT FOUR
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
Registration Statement on Form S-6
Cross-Reference Sheet
Form
N-8B-2
Item No. Caption in Prospectus
1 ----- Cover Page; General Information About
Manufacturers Life of America, Separate Account
Four, Manulife Series Fund and NASL Series
Trust (What Is Manufacturers Life of America's
Separate Account Four?)
2 ----- Cover Page; General Information About
Manufacturers Life of America, Separate Account
Four, Manulife Series Fund and NASL Series
Trust (Who Are Manufacturers Life Of America
And Manufacturers Life?)
3 ----- *
4 ----- Other Matters (Who Sells The Policies And What
Are The Sales Commissions?)
5 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Is
Manufacturers Life of America's Separate
Account Four?)
6 ----- General Information About Manufacturers Life of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Is
Manufacturers Life of America's Separate
Account Four?)
7 ----- *
8 ----- *
9 ----- Other Matters (Is There Any Litigation
Pending?)
10 ----- Detailed Information About The Policies
11 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Is Manulife
Series Fund, Inc.?)
12 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Are Manulife
Series Fund and NASL Series Trust?)
<PAGE> - 3 -
<PAGE>
Form
N-8B-2
Item No. Caption in Prospectus
13 ----- Detailed Information About The Policies
(Charges)
14 ----- Detailed Information About the Policies
(Premium Provisions -- What Are the
Requirements and Procedures for Issuance of a
Policy?); Other Matters (What Responsibilities
Has Manufacturers Life Assumed?)
15 ----- Detailed Information About The Policies
(Premium Provisions -- What Are the
Requirements and Procedures for Issuance of a
Policy?)
16 ----- **
17 ----- Detailed Information About The Policies (Policy
Values -- How May a Policyowner Obtain the Net
Cash Surrender Value?; Other Provisions -- When
Are Proceeds Paid?)
18 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund, and NASL Series Trust
19 ----- Detailed Information About The Policies (Other
Provisions -- What Reports Will Be Sent To
Policyowners?); Other Matters (What
Responsibilities Has Manufacturers Life
Assumed?)
20 ----- *
21 ----- Detailed Information About The Policies
22 ----- *
23 ----- **
24 ----- Detailed Information About the Policies (Other
Provisions -- What Are The Other General Policy
Provisions?)
25 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (Who Are
Manufacturers Life Of America And Manufacturers
Life?)
26 ----- *
27 ----- **
* Omitted since answer is negative or item is not
applicable.
** Omitted.
<PAGE> - 4 -
<PAGE>
Form
N-8B-2
Item No. Caption in Prospectus
28 ----- Other Matters (Who Are The Directors And
Officers Of Manufacturers Life Of America?)
29 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (Who Are
Manufacturers Life Of America And Manufacturers
Life?)
30 ----- *
31 ----- *
32 ----- *
33 ----- *
34 ----- *
35 ----- **
36 ----- *
37 ----- *
38 ----- Other Matters (Who Sells The Policies And What
Are The Sales Commissions?; What
Responsibilities Has Manufacturers Life
Assumed?)
39 ----- Other Matters (Who Sells The Policies And What
Are The Sales Commissions?)
40 ----- *
41 ----- **
42 ----- *
43 ----- *
44 ----- Detailed Information About The Policies (Policy
Values -- What Is the Policy Value and How Is
It Determined?)
45 ----- *
46 ----- Detailed Information About The Policies (Policy
Values -- How May a Policyowner Obtain the Net
Cash Surrender Value?; Other Provisions -- When
Are Proceeds Paid?)
47 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Are Manulife
Series Fund and NASL Series Trust?)
48 ----- *
49 ----- *
* Omitted since answer is negative or item is not
applicable.
** Omitted.
<PAGE> - 5 -
<PAGE>
Form
N-8B-2
Item No. Caption in Prospectus
50 ----- General Information About Manufacturers Life Of
America, Separate Account Four, Manulife Series
Fund and NASL Series Trust (What Is
Manufacturers Life Of America's Separate
Account Four?)
51 ----- Detailed Information About The Policies
52 ----- Detailed Information About The Policies (Other
Provisions -- Under What Circumstances May Fund
Shares Be Substituted?)
53 ----- **
54 ----- *
55 ----- *
56 ----- *
57 ----- *
58 ----- *
59 ----- Financial Statements
* Omitted since answer is negative or item is not
applicable.
** Omitted.
<PAGE> - 6 -
<PAGE>
PART I
PROSPECTUS
<PAGE> - 7 -
<PAGE>
Prospectus for
Flexible Premium Variable
Life Insurance
Issued by
The Manufacturers Life Insurance
Company of America
<PAGE> - 8 -
<PAGE>
Prospectus
The Manufacturers Life Insurance
Company of America
Separate Account Four
Flexible Premium Variable Life Insurance Policy
This prospectus describes the flexible premium variable life
insurance policy (the "Policy") issued by The Manufacturers
Life Insurance Company of America ("Manufacturers Life of
America" or the "Company"), a stock life insurance company
that is an indirect wholly-owned subsidiary of The
Manufacturers Life Insurance Company ("Manufacturers Life").
The Policies are designed to provide lifetime insurance
protection together with flexibility as to the timing and
amount of premium payments, the investments underlying the
Policy Value and the amount of insurance coverage. This
flexibility allows the policyowner to pay premiums and adjust
insurance coverage in light of his or her current financial
circumstances and insurance needs. The Policies provide for:
(1) a Net Cash Surrender Value that can be obtained by
surrendering the Policy; (2) policy loans; and (3) an
insurance benefit payable at the life insured's death. As long
as a Policy remains in force, the death benefit will not be
less than the current face amount of the Policy.
<REDLINE>
A Policy's Policy Value may be accumulated on a fixed basis or
vary with the investment performance of the sub-accounts of
Manufacturers Life of America's Separate Account Four (the
"Separate Account") to which the policyowner allocates net
premiums. The assets of each sub-account will be used to
purchase shares of a particular investment portfolio ( a
"Portfolio") of Manulife Series Fund, Inc. ("Manulife Series
Fund") or NASL Series Trust. The accompanying prospectuses
for Manulife Series Fund and NASL Series Trust, and the
corresponding statements of additional information, describe
the investment objectives of the Portfolios in which net
premiums may be invested. The Portfolios available for
allocation of net premiums are the following Portfolios of
Manulife Series Fund: the Emerging Growth Equity Fund, the
Balanced Assets Fund, the Capital Growth Bond Fund, the
Money-Market Fund, the Common Stock Fund, the Real Estate
Securities Fund, the International Fund, the Pacific Rim
Emerging Markets Fund, and, subject to regulatory approval,
the Equity Index Fund (collectively the "Manulife Funds") and
the following Portfolios of NASL Series Trust: the Value
Equity Trust, the U.S. Government Securities Trust, the Growth
and Income Trust, the Equity Trust, the Conservative Asset
Allocation Trust, the Moderate Asset Allocation Trust and the
Aggressive Asset Allocation Trust (collectively the "NASL
<PAGE> - 9 -
<PAGE>
Trusts"). Other sub-accounts and Portfolios may be added in
the future.</REDLINE>
Prospective purchasers should note that it may not be
advisable to purchase a Policy as a replacement for existing
insurance.
Because of the substantial nature of the surrender charges,
the Policy is not suitable for short-term investment purposes.
A policyowner contemplating surrender of a Policy should pay
special attention to the refund rights described in this
prospectus, which are available only during the first two
years following issuance of the Policy or following an
increase in face amount. Also, policyowners should note that
their Policy could be a modified endowment contract under
federal tax law and any policy loan or surrender may result in
adverse tax consequences and a penalty.
<REDLINE>
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE. IT IS VALID ONLY WHEN ACCOMPANIED BY A CURRENT
PROSPECTUS FOR MANULIFE SERIES FUND, INC. AND NASL SERIES
TRUST.
</REDLINE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Manufacturers Life Insurance
Company of America
500 North Woodward Avenue,
Bloomfield Hills, Michigan 48304
Service Office:
200 Bloor Street East
Toronto, Ontario, Canada M4W 1E5
TELEPHONE: 1 (800) 827-4546
1 (800) VARILIN(E)
<REDLINE>
The date of this Prospectus is February 14, 1996.</REDLINE>
<PAGE> - 10 -
<PAGE>
Prospectus Contents
Page
Definitions
Introduction To Policies
<REDLINE>
General Information About Manufacturers Life of
America, Separate Account Four,
Manulife Series Fund and NASL Series Trust
</REDLINE>
Who Are Manufacturers Life of America And
Manufacturers Life?
What Is Manufacturers Life of America's Separate
Account Four?
<REDLINE>
What Are Manulife Series Fund And
NASL Series Trust?
What Are The Investment Objectives Of
The Portfolios?
</REDLINE>
Detailed Information About The Policies
PREMIUM PROVISIONS
What Are The Requirements And Procedures For
Issuance Of A Policy?
What Limitations Apply To Premium
Amounts?
Is There A Death Benefit Guarantee?
When Does A Policy Go Into Default?
How Can A Terminated Policy Be Reinstated?
How May Net Premiums Be Invested?
Is There A Short-Term Cancellation Right, Or
"Free Look"?
What Are The Conversion Privileges Of The Policy?
INSURANCE BENEFIT
What Is The Insurance Benefit?
What Death Benefit Options Are Available?
Can The Death Benefit Option Be Changed?
Can The Face Amount Of A Policy Be Changed?
POLICY VALUES
What Is The Policy Value And How Is It Determined?
Transfers Of Policy Value
What Are The Provisions Governing Policy
Loans?
How May A Policyowner Obtain The Net Cash
Surrender Value?
CHARGES
What Deductions Are Made From Premiums?
What Are The Surrender Charges?
What Are The Monthly Deductions?
Are There Special Provisions For Group Or
Sponsored Arrangements?
Are There Special Provisions For Exchanges?
<PAGE> - 11 -
<PAGE>
Page
What Are The Risk Charges Assessed Against
Separate Account Assets?
Are There Other Relevant Charges?
THE GENERAL ACCOUNT
What Is The General Account?
OTHER PROVISIONS
What Supplementary Benefits Are Available?
Under What Circumstances May Fund Shares Be
Substituted?
What Are The Other General Policy Provisions?
When Are Proceeds Paid?
What Reports Will Be Sent To Policyowners?
Other Matters
What Is The Federal Tax Treatment Of The Policies?
Tax Status Of The Policy
What Is The Tax Treatment Of Policy Benefits?
What Are The Company's Tax Considerations?
Who Sells The Policies And What Are The Sales
Commissions?
What Responsibilities Has Manufacturers Life
Assumed?
What Are The Voting Rights?
Who Are The Directors And Officers Of
Manufacturers Life of America?
What State Regulations Apply?
Is There Any Litigation Pending?
Where Can Further Information Be Found?
Legal Considerations
Legal Matters
Experts
Financial Statements
Appendix
What Are Some Illustrations Of Policy Values, Cash
Surrender Values And Death Benefits?
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY
JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
NO PERSON IS AUTHORIZED TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, THE PROSPECTUS OF MANULIFE SERIES FUND OR
NASL SERIES TRUST, OR THE STATEMENT OF ADDITIONAL INFORMATION
OF MANULIFE SERIES FUND OR NASL SERIES TRUST.
You are urged to examine this prospectus carefully. The
INTRODUCTION TO POLICIES will briefly describe the Flexible
Premium Variable Life Insurance Policy. More detailed
information will be found further in the prospectus.
<PAGE> - 12 -
<PAGE>
Definitions
Business Day-any day that the net asset value of the
underlying shares of a sub-account of the Separate Account is
determined.
Cash Surrender Value-the Policy Value less the deferred sales
charge, the deferred underwriting charge and any outstanding
monthly deductions due.
Guaranteed Interest Account-that part of the Policy Value
which reflects the value the policyowner has in the general
account of Manufacturers Life of America.
Investment Account-that part of the Policy Value which
reflects the value the policyowner has in one of the
sub-accounts of the Separate Account.
Loan Account-that part of the Policy Value which reflects
policy loans and interest credited to the Policy Value in
connection with such loans.
Modified Policy Debt-as of any date the Policy Debt plus the
amount of interest to be charged to the next policy
anniversary, all discounted from the next policy anniversary
to such date at an annual rate of 4%.
Net Cash Surrender Value-the Cash Surrender Value less the
value in the Loan Account.
Net Policy Value-the Policy Value less the value in the Loan
Account.
Policy Debt-as of any date the aggregate amount of policy
loans, including borrowed interest, less any loan repayments.
Policy Value-the sum of the values in the Loan Account, the
Guaranteed Interest Account and the Investment Accounts.
Service Office-the office we designate to service the
Policies, which is shown on the cover page of this prospectus.
Target Premium-a premium amount used to measure the maximum
deferred sales charge under a Policy. The Target Premium for
the initial face amount is set forth in the Policy. The
policyowner will be advised of the Target Premium for any
increase in face amount.
Withdrawal Tier Amount-as of any date the product of the Net
Cash Surrender Value at the previous policy anniversary
multiplied by 10%.
<PAGE> - 13 -
<PAGE>
Introduction To Policies
The following summary is intended to provide a general
description of the most important features of the Policy. It
is not comprehensive and is qualified in its entirety by the
more detailed information contained in this prospectus. Unless
otherwise indicated or required by the context, the discussion
throughout this prospectus assumes that the Policy has not
gone into default, there is no outstanding Policy Debt and the
death benefit is not determined by the corridor percentage
test.
General. The Policy provides a death benefit in the event of
the death of the life insured. There are two death benefit
options. The policyowner may change death benefit options and
may increase or decrease the face amount of the Policy.
Premium payments may be made at any time and in any amount,
subject to certain limitations.
<REDLINE>
After certain deductions, premiums will be allocated,
according to the policyowner's instructions, to one or more of
the general account and the sub-accounts of Manufacturers Life
of America's Separate Account Four. Assets of the sub-accounts
of Separate Account Four are invested in shares of a
particular Portfolio of Manulife Series Fund or NASL Series
Trust. Allocation instructions may be changed at any time and
transfers among the accounts may be made.
The Manulife Funds currently offered are the: Emerging Growth
Equity Fund, Common Stock Fund, Real Estate Securities Fund,
Balanced Assets Fund, Capital Growth Bond Fund, Money-Market
Fund, International Fund, Pacific Rim Emerging Markets Fund,
and, subject to regulatory approval, the Equity Index Fund.
The NASL Trusts currently offered are the: Value Equity Trust,
U.S. Government Securities Trust, Growth and Income Trust,
Equity Trust, Conservative Asset Allocation Trust, Moderate
Asset Allocation Trust and Aggressive Asset Allocation
Trust.</REDLINE>
The Policy has a Policy Value reflecting premiums paid,
certain charges for expenses and cost of insurance, and the
investment performance of the accounts to which the
policyowner has allocated premiums. The policyowner may obtain
a portion of the Policy Value by taking a policy loan or a
partial withdrawal, or by full surrender of the Policy.
Death Benefit.
Death Benefit Options. The policyowner elects to have the
Policy's death benefit determined under one of two options:
<PAGE> - 14 -
<PAGE>
. a death benefit equal to the face amount of the Policy,
and
. a death benefit equal to the face amount of the Policy
plus the Policy Value.
Under either option, the death benefit may be increased to a
multiple of the Policy Value to satisfy the corridor
percentage test under the definition of life insurance in the
Internal Revenue Code. (See Detailed Information About The
Policies: Insurance Benefit "What Is The Insurance Benefit?"
and "What Death Benefit Options Are Available?")
The Policyowner May Change The Death Benefit Option. A change
in the death benefit option may be requested after the Policy
has been in force for two years. A change in death benefit
option will be effective on a policy anniversary. (See
Detailed Information About The Policies; Insurance Benefit
"Can The Death Benefit Option Be Changed?")
The Policyowner May Increase The Face Amount. After the
Policy has been in force for one year, an increase in the face
amount of the Policy may be requested once per policy year. An
increase in the face amount is subject to satisfactory
evidence of insurability and will usually result in the
Policy's being subject to new surrender charges. (See Detailed
Information About The Policies; Insurance Benefit "Can The
Face Amount Of A Policy Be Changed?")
The Policyowner May Decrease The Face Amount. A decrease in
the face amount may be requested after the Policy has been in
force for one year, except during the one-year period
following any increase in face amount. In addition, during the
two-year period following an increase in face amount, the
policyowner may elect at any time to cancel the increase and
have the deferred sales charge for the increase reduced by the
refund of any excess sales load attributable to the increase.
A decrease in face amount will be effective only on a policy
anniversary and may result in certain surrender charges being
deducted from the Policy Value. (See Detailed Information
About The Policies; Insurance Benefit "Can The Face Amount
Of A Policy Be Changed?")
Premium Payments Are Flexible.
The policyowner may pay premiums at any time and in any
amount, subject to certain limitations. (See Detailed
Information About The Policies; Premium Provisions "What Are
The Requirements And Procedures For Issuance Of A Policy?" and
"What Limitations Apply To Premium Amounts?")
<PAGE> - 15 -
<PAGE>
In the first two policy years the policyowner must pay a
minimum premium to keep the Policy in force. (See Detailed
Information About The Policies; Premium Provisions "What
Limitations Apply To Premium Amounts?" and "Is There A Death
Benefit Guarantee?")
After the second policy year there is no minimum premium
required; however, by complying with the minimum premium
schedule for the Policy, the policyowner can ensure the Policy
will not go into default prior to the life insured's reaching
age 70. (See Detailed Information About The Policies; Premium
Provisions "Is There A Death Benefit Guarantee?")
Certain maximum premium limitations apply to the Policy,
ensuring the Policy qualifies as life insurance under rules
defined in the Internal Revenue Code. (See Detailed
Information About The Policies; Premium Provisions "What
Limitations Apply To Premium Amounts?")
Summary of Charges And Deductions.
Charges under the Policy are assessed as:
(1) deductions from premiums
. 3% sales charge
. 2% state premium tax
(2) surrender charges upon surrender, partial withdrawal,
decrease in face amount or lapse
. deferred underwriting charge of $2-$6 for each
$1,000 of face amount
. deferred sales charge of up to 47% of two Target
Premiums
(3) monthly deductions
. administration charge of $6
. cost of insurance charge (including $1 per $1,000 of
face amount for policies less than $25,000)
. supplementary benefits charge
(4) Certain transfers
. a Dollar Cost Averaging transfer charge of $5 when
Policy Value does not exceed $15,000
. an Asset Allocation Balancer transfer charge of $15
(5) Separate Account charges
. mortality and expense risk charge of .65% per annum
assessed daily against the value of the Separate
Account assets
(6) Other Charges
<REDLINE> For the Manulife Funds:
<PAGE> - 16 -
<PAGE>
. investment management fee of .50% per annum assessed
against the assets of the Emerging Growth Equity
Fund, Common Stock Fund, Real Estate Securities
Fund, Balanced Assets Fund, Capital Growth Bond Fund
and Money-Market Fund
. investment management fee of (i) .85% per annum
assessed against the first $100 million of assets
and (ii) .70% per annum assessed against the assets
over $100 million of each of the International Fund
and the Pacific Rim Emerging Markets Fund
. investment management fee of .25% per assum assessed
against the assets of the Equity Index Fund
. expenses of up to .50% and .65% per annum assessed
against the assets of the International Fund and the
Pacific Rim Emerging Markets Fund, respectively
. expenses of up to .15% per annum assessed against
the assets of the Equity Index Fund
For the NASL Trusts:
. investment management fee of .800% assessed against the
assets of the Value Equity Trust
. investment management fee of .650% assessed against the
assets of the U.S. Government Securities Trust
. investment management fee of .750% assessed against the
assets of the Growth and Income Trust
. investment management fee of .750% assessed against the
assets of the Equity Trust
. investment management fee of .750% assessed against the
assets of the Conservative Asset Allocation Trust
. investment management fee of .750% assessed against the
assets of the Moderate Asset Allocation Trust
. investment management fee of .750% assessed against the
assets of the Conservative Asset Allocation Trust
. expenses of up to .50% assessed against the assets of the
NASL Trusts.</REDLINE>
For a complete discussion of charges and deductions see the
heading Charges And Deductions in this Introduction and the
references therein.
Investment Options.
After deductions for sales charges of 3% and state premium
taxes of 2%, net premiums will be allocated, according to the
policyowner's instructions, to any combination of the general
account or one or more of the sub-accounts of Manufacturers
Life of America's Separate Account Four.
Each of the sub-accounts of Separate Account Four invests its
assets in the shares of one of the following:
<PAGE> - 17 -
<PAGE>
<REDLINE> For the Manulife Funds:
. Emerging Growth Equity Fund
. Balanced Assets Fund
. Capital Growth Bond Fund
. Money-Market Fund
. Common Stock Fund
. Real Estate Securities Fund
. International Fund
. Pacific Rim Emerging Markets Fund
. subject to regulatory approval, Equity Index Fund
For the NASL Trusts:
. Value Equity Trust
. U.S. Government Securities Trust
. Growth and Income Trust
. Equity Trust
. Conservative Asset Allocation Trust
. Moderate Asset Allocation Trust
. Aggressive Asset Allocation Trust
The policyowner may change the allocation of net premiums
among the general account and the sub-accounts at any time.
(See General Information About Manufacturers Life of America,
Separate Account Four, Manulife Series Fund And Nasl Series
Trust and Detailed Information About The Policies; Premium
Provisions "How May Net Premiums Be Invested?" and Policy
Values "What Is The Policy Value And How Is It
Determined?")</REDLINE>
The Policy Value.
The Policy has a Policy Value which reflects the following:
premium payments made; deduction of charges described under
"Charges And Deductions" below; investment performance of the
sub-accounts to which amounts have been allocated; and
interest credited by the Company to amounts allocated to the
general account.
The Policy Value is the sum of the values in the Investment
Accounts, the Guaranteed Interest Account and the Loan
Account.
Investment Account. An Investment Account is established under
the Policy for each sub-account of the Separate Account to
which net premiums or transfer amounts have been allocated. An
Investment Account measures the interest of the Policy in the
corresponding sub-account.
The value of each Investment Account under the Policy varies
each Business Day and reflects the investment performance of
the Portfolio shares held in the corresponding sub-account.
<PAGE> - 18 -
<PAGE>
(See Detailed Information About The Policies; Policy Values
"What Is The Policy Value And How Is It Determined?")
Guaranteed Interest Account. The Guaranteed Interest Account
consists of that portion of the Policy Value based on net
premiums allocated to and amounts transferred to the general
account of the Company.
Manufacturers Life of America credits interest on amounts in
the Guaranteed Interest Account at an effective annual rate
guaranteed to be at least 4%. (See Detailed Information About
The Policies; The General Account "What Is The General
Account?")
Loan Account. When a policy loan is made, Manufacturers Life
of America will establish a Loan Account under the Policy and
will transfer an amount from the Investment Accounts and the
Guaranteed Interest Account to the Loan Account.
The Company will credit interest to amounts in the Loan
Account at an effective annual rate of at least 4%. The actual
rate credited will be the rate charged on policy loans less an
interest rate differential, which is currently 1.25%.
Under certain conditions the Company will credit interest to a
portion of the amounts in the Loan Account at an effective
annual rate equal to the rate charged on policy loans less
0.50%. (See Detailed Information About The Policies; Policy
Values "What Are The Provisions Governing Policy Loans?")
Transfers Are Permitted. A policyowner may change the extent
to which the Policy Value is based upon any specific
sub-account of Separate Account Four or the Company's general
account by requesting a transfer of a portion or all amounts
in one account to another account.
One transfer per policy month may be made. All transfer
requests received at the same time are treated as a single
transfer request. The minimum amount that may be transferred
is the lesser of $500 or the entire account value. In addition
transfers may be effected through the Dollar Cost Averaging or
Asset Allocation Balancer transfer programs.
Certain restrictions may apply to transfer requests. (See
Detailed Information About The Policies; Policy Values "What
Is The Policy Value And How Is It Determined?" (Transfer of
Policy Value))
Using The Policy Value.
<PAGE> - 19 -
<PAGE>
Borrowing Against The Policy Value. After the first policy
anniversary, the policyowner may borrow against the Policy
Value. The minimum loan amount is $500.
Loan interest will be charged either on a fixed basis or on a
variable basis. Interest on a fixed basis will be at an
effective annual rate of 8%. Interest on a variable basis will
be at an effective annual rate equal to the greater of 6% or
the Moody's Corporate Bond Yield Average Monthly Average
Corporates. (See Detailed Information About The Policies;
Policy Values "What Are The Provisions Governing Policy
Loans?")
A Policyowner May Make A Partial Withdrawal Of The Policy
Value. After a Policy has been in force for two years the
policyowner may make a partial withdrawal of the Policy Value.
The minimum withdrawal amount is $500. The policyowner may
specify that the withdrawal is to be made from a specific
Investment Account or the Guaranteed Interest Account.
A partial withdrawal may result in a reduction in the face
amount of the Policy. A partial withdrawal may also result in
the assessment of a portion of the surrender charges to which
the Policy is subject. (See Detailed Information About The
Policies; Policy Values "How May A Policyowner Obtain The
Net Cash Surrender Value?" and Charges "What Are The
Surrender Charges?")
The Policy May Be Surrendered For Its Net Cash Surrender
Value. A Policy may be surrendered for its Net Cash Surrender
Value at any time while the life insured is living.
The Net Cash Surrender Value is equal to the Policy Value less
surrender charges and outstanding monthly deductions due minus
the value of the Loan Account. Surrender of a Policy within 15
years after policy issue or following an increase in the face
amount will usually result in assessment of surrender charges.
(See Detailed Information About The Policies; Policy Values
"How May A Policyowner Obtain The Net Cash Surrender Value?"
and Charges "What Are The Surrender Charges?")
Charges And Deductions.
Charges Made From Premium Payments. Two deductions are made
when premiums are paid:
. a sales charge of 3% of premium, and
. a charge of 2% for state premium taxes.
<PAGE> - 20 -
<PAGE>
The 3% sales charge and the deferred sales charge described
below compensate the Company for some of the expenses of
selling and distributing the Policies. (See Detailed
Information About The Policies; Charges "What Deductions Are
Made From Premiums?") A portion of the sales charge and the
deferred sales charge may be subject to refund under certain
circumstances. (See Detailed Information About The Policies;
Charges "What Are The Surrender Charges?"; Refund Of Excess
Sales Charges)
Charges On Surrender. Manufacturers Life of America will
usually deduct a deferred underwriting charge and a deferred
sales charge if, during the 15 years following Policy issue or
an increase in the face amount:
. the Policy is surrendered for its Net Cash Surrender
Value,
. a partial withdrawal is made in excess of the Withdrawal
Tier Amount,
. a decrease in face amount is requested, or
. the Policy lapses.
The deferred underwriting charge ranges from $2.00 to $6.00
for each $1,000 of face amount depending on the age of the
life insured. The charge is guaranteed not to exceed $1,000
for each level of coverage.
The maximum deferred sales charge is 47% of premiums paid up
to two Target Premiums.
The full amount of charges will be in effect for up to five
years following issue of the Policy. Beginning no later than
the sixth year these charges grade downward each month over a
10-year period. In the event of a face amount increase, the
charges applicable to the increase, which will be at the same
rates that would apply if a Policy were issued to the life
insured at his or her then attained age, will be in effect for
up to five years following such increase and thereafter grade
downward over a 10-year period. (See Detailed Information
About The Policies; Charges "What Are The Surrender
Charges?")
Sales Charge Refund. If the Policy is surrendered at any time
during the first two years following issuance or following an
increase in face amount or if the increase is cancelled during
the two-year period following the increase or face amount
decreased during the second year after issuance or after
increase in face amount, Manufacturers Life of America will
<PAGE> - 21 -
<PAGE>
refund the difference, if any, between total sales charges
deducted and the maximum sales charge allowable with respect
to the Policy or the increase, as applicable. (See Detailed
Information About The Policies; Charges "What Are The
Surrender Charges?") If the Policy is surrendered after such
two- year period, no refund will be available and the full
amount of the surrender charge will apply.
Monthly Charges. At the beginning of each month Manufacturers
Life of America deducts from the Policy Value:
. an administration charge of $6,
. a charge for the cost of insurance (plus, if applicable,
$1 per $1,000 of face amount for policies with a face
amount of less than $25,000), and
. a charge for any supplementary benefits added to the
Policy.
The cost of insurance charge varies based on the net amount at
risk under the Policy and the applicable cost of insurance
rate. Cost of insurance rates vary according to age, amount of
coverage, duration of coverage, and sex and risk class of the
life insured. The maximum cost of insurance rate that can be
charged is guaranteed not to exceed the 1980 Commissioners
Standard Ordinary Smoker/ Nonsmoker Mortality Tables.
Currently, the cost of insurance rates assessed under the
Policies are less than the maximum rates that can be charged.
The cost of insurance charge will reflect any extra charges
for additional ratings as indicated in the Policy. (See
Detailed Information About The Policies; Charges "What Are
The Monthly Deductions?")
Charges For Certain Transfers. Charges will be imposed on
certain transfers of Policy Values, including a $15 charge for
each Asset Allocation Balancer transfer and a $5 charge for
each Dollar Cost Averaging transfer when Policy Value does not
exceed $15,000. See Policy Values "Transfers of Policy
Value."
Charges Assessed Against Assets Of The Separate Account.
Manufacturers Life of America makes a daily charge to the
Separate Account at an annual rate of .65% of the value of the
Separate Account assets for the mortality and expense risks it
assumes under the Policies. (See Detailed Information About
The Policies; Charges "What Are The Risk Charges Assessed
Against Separate Account Assets?")
Other Charges. Manufacturers Life of America reserves the
right to charge or establish a provision for any federal,
state or local taxes that may be attributable to the Separate
<PAGE> - 22 -
<PAGE>
Account or the operations of the Company with respect to the
Policies. No such charge is currently made.
<REDLINE> Certain expenses are, or will be, assessed against
the assets of Portfolios, as follows:
For Manulife Series Fund:
(1) an investment management fee of (1) .50% per annum
assessed against the assets of the Emerging Growth
Equity Fund, Common Stock Fund, Real Estate
Securities Fund, Balanced Assets Fund, Capital
Growth Bond Fund and Money-Market Fund;
(2) an investment management fee of .85% per annum
assessed against the first $100 million of assets
and .70% per annum assessed against the assets over
$100 million of each of the International Fund and
the Pacific Rim Emerging Markets Fund,
(3) an investment management fee of .25% per annum
assessed against the assets of the Equity Index
Fund, and
(4) expenses of up to .50% and .65% per annum assessed
against the assets of the International Fund and the
Pacific Rim Emerging Markets Fund, respectively, and
up to .15% per annum against the assets of the
Equity Index Fund. (See Detailed Information About
The Policies; Charges "Are There Other Relevant
Charges?")
For NASL Series Trust:
(1) investment management fee of .800% assessed against the
assets of the Value Equity Trust
(2) investment management fee of .650% assessed against the
assets of the U.S. Government Securities Trust
(3) investment management fee of .750% assessed against the
assets of the Growth and Income Trust
(4) investment management fee of .750% assessed against the
assets of the Equity Trust
(5) investment management fee of .750% assessed against the
assets of the Conservative Asset Allocation Trust
(6) investment management fee of .750% assessed against the
assets of the Moderate Asset Allocation Trust
(7) investment management fee of .750% assessed against the
assets of the Conservative Asset Allocation Trust
(8) expenses of up to .50% assessed against the assets of
each of the NASL Trusts.</REDLINE>
Supplementary Benefits.
A policyowner may choose to include certain supplementary
benefits to the Policy. These supplementary benefits include
an accidental death benefit, life insurance for additional
<PAGE> - 23 -
<PAGE>
insured persons, an option to purchase additional insurance, a
disability benefit to waive the cost of monthly deductions, a
change of life insured option and an option to ensure a
guaranteed Policy Value. The cost of any supplementary
benefits will be deducted from the Policy Value monthly. (See
Detailed Information About The Policies; Other Provisions
"What Supplementary Benefits Are Available?")
Default.
The Policy will go into default (a) during the first two
policy years, if the policyowner does not pay the required
minimum premiums, or (b) after the second policy anniversary,
if at the beginning of any policy month the Policy's Net Cash
Surrender Value would go below zero after deducting the
monthly charges then due. The Company will notify the
policyowner in the event the Policy goes into default, and
will allow a grace period in which the policyowner may make a
premium payment sufficient to bring the Policy out of default.
If the required premium is not paid during the grace period
the Policy will terminate. (See Detailed Information About The
Policies; Premium Provisions "When Does A Policy Go Into
Default?")
Death Benefit Guarantee.
As long as the premiums paid by the policyowner at least equal
the minimum premiums for the Policy, the Company guarantees
that the Policy will not go into default prior to the life
insured's age 70, regardless of the investment performance of
the Funds underlying the Policy Value. (See Detailed
Information About The Policies; Premium Provisions "Is There
A Death Benefit Guarantee?")
<PAGE> - 24 -
<PAGE>
Reinstatement.
A terminated policy may be reinstated by the policyowner
within the five-year period following the date of termination,
providing certain conditions are met. (See Detailed
Information About The Policies; Premium Provisions "How Can
A Terminated Policy Be Reinstated?")
Free Look.
A Policy may be returned for a full refund within the later
of:
. 10 days after it is received
. 45 days after the application for the Policy is signed
. 10 days after Manufacturers Life of America mails or
delivers a notice of this right of withdrawal.
If a policyowner requests an increase in face amount which
results in new surrender charges, these rights to cancel the
increase will also apply. (See Detailed Information About The
Policies; Premium Provisions "Is There A Short-Term
Cancellation Right, Or `Free Look'?")
Conversion.
At any time, the policyowner may convert the Policy to a fixed
benefit Policy with a Policy Value, other values based on the
Policy Value and a death benefit which is determinable and
guaranteed. The conversion is effected by transferring the
Policy Value in all of the Investment Accounts to the
Guaranteed Interest Account. (See Detailed Information About
The Policies; Premium Provisions "What Are The Conversion
Privileges Of The Policy?")
Federal Tax Matters.
Manufacturers Life of America believes that a Policy issued on
a standard risk class basis should meet the definition of a
life insurance contract as set forth in Section 7702 of the
Internal Revenue Code of 1986. With respect to a Policy issued
on a substandard basis, there is less guidance available to
determine if such a Policy would satisfy the Section 7702
definition of a life insurance contract, particularly if the
policyowner pays the full amount of premiums permitted under
such a Policy. Assuming that a Policy qualifies as a life
insurance contract for federal income tax payments, a
policyowner should not be deemed to be in constructive receipt
of Policy Value under a Policy until there is a distribution
from the Policy. Moreover, death benefits payable under a
<PAGE> - 25 -
<PAGE>
Policy should be completely excludable from the gross income
of the beneficiary. As a result, the beneficiary generally
should not be taxed on these proceeds. See Other Matters
"What Is The Federal Tax Treatment Of The Policies?" (Tax
Status Of The Policy).
Under certain circumstances, a Policy may be treated as a
"Modified Endowment Contract." If the Policy is a Modified
Endowment Contract, then all pre-death distributions,
including Policy loans, will be treated first as a
distribution of taxable income and then as a return of
investment in the Policy. In addition, prior to age 59 1/2 any
such distributions generally will be subject to a 10% penalty
tax. See Other Matters "What Is The Tax Treatment Of Policy
Benefits?" (Tax Treatment Of Policy Benefits).
If the Policy is not a Modified Endowment Contract,
distributions generally will be treated first as a return of
investment in the Policy and then a disbursement of taxable
income. Moreover, loans will not be treated as distributions.
A policyowner considering the use of systematic policy loans
as one element of a comprehensive retirement income plan
should consult his or her personal tax adviser regarding the
potential tax consequences if such loans were to so reduce
Policy Value that the Policy would lapse, absent additional
payments. The premium payment necessary to avert lapse would
increase with the age of the insured. Finally, neither
distributions nor loans under a Policy that is not a Modified
Endowment Contract are subject to the 10% penalty tax. See
Other Matters "What Is The Tax Treatment Of Policy
Benefits?" (Distributions From Policies Not Classified As
Modified Endowment Contracts).
<REDLINE> General Information About Manufacturers Life of
America, Separate Account Four, Manulife Series Fund And NASL
Series Trust </REDLINE>
Who Are Manufacturers Life of America And
Manufacturers Life?
Manufacturers Life of America, a wholly-owned subsidiary of
The Manufacturers Life Insurance Company of Michigan, is a
stock life insurance company organized under the laws of
Pennsylvania on April 11, 1977 and redomesticated under the
laws of Michigan on December 9, 1992. It is a licensed life
insurance company in the District of Columbia and all states
of the United States except New York. The Manufacturers Life
Insurance Company of Michigan is a life insurance company
organized in 1983 under the laws of Michigan and is a
wholly-owned subsidiary of Manufacturers Life, a mutual life
insurance company based in Toronto, Canada. Manufacturers Life
and its subsidiaries, together, constitute one of the largest
<PAGE> - 26 -
<PAGE>
life insurance companies in North America as measured by
assets.
What Is Manufacturers Life of America's Separate Account Four?
Manufacturers Life of America established its Separate Account
Four on March 17, 1987 as a separate account under
Pennsylvania law. Since December 9, 1992, it has been operated
under Michigan law. The Separate Account holds assets that are
segregated from all of Manufacturers Life of America's other
assets. The Separate Account is currently used only to support
variable life insurance policies.
Manufacturers Life of America is the legal owner of the assets
in the Separate Account. The income, gains and losses of the
Separate Account, whether or not realized, are, in accordance
with applicable contracts, credited to or charged against the
Account without regard to the other income, gains or losses of
Manufacturers Life of America. Manufacturers Life of America
will at all times maintain assets in the Separate Account with
a total market value at least equal to the reserves and other
liabilities relating to variable benefits under all policies
participating in the Separate Account. These assets may not be
charged with liabilities which arise from any other business
Manufacturers Life of America conducts. However, all
obligations under the variable life insurance policies are
general corporate obligations of Manufacturers Life of
America.
The Separate Account is registered with the Securities and
Exchange Commission ("S.E.C.") under the Investment Company
Act of 1940 ("1940 Act") as a unit investment trust. A unit
investment trust is a type of investment company which invests
its assets in specified securities, such as the shares of one
or more investment companies, rather than in a portfolio of
unspecified securities. Registration under the 1940 Act does
not involve any supervision by the S.E.C. of the management or
investment policies or practices of the Separate Account. For
state law purposes the Separate Account is treated as a part
or division of Manufacturers Life of America.
<REDLINE> What Are Manulife Series Fund And NASL Series Trust?
Each sub-account of the Separate Account will purchase shares
only of a particular Manulife Fund or NASL Trust. Manulife
Series Fund and NASL Series Trust are registered under the
1940 Act as open-end management investment companies. The
Separate Account will purchase and redeem shares of the
Manulife Funds and the NASL Trusts at net asset value.
Shares will be redeemed to the extent necessary for
Manufacturers Life of America to provide benefits under the
Policies, to transfer assets from one sub-account to another
<PAGE> - 27 -
<PAGE>
or to the general account as requested by policyowners, and
for other purposes not inconsistent with the Policies. Any
dividend or capital gain distribution received from a
Portfolio with respect to the Policies will be reinvested
immediately at net asset value in shares of that Portfolio and
retained as assets of the corresponding sub-account.
Manulife Series Fund and NASL Series Trust shares are issued
to fund benefits under both variable annuity contracts and
variable life insurance policies issued by the Company and,
with respect to Manufacturers Life of America only, shares of
the Manulife Series Fund are issued to its general account for
certain limited purposes including initial portfolio seed
money. For a description of the procedures for handling
potential conflicts of interest arising from the funding of
such benefits see the accompanying Manulife Series Fund
prospectus and the accompanying NASL Series Trust prospectus.
The Series Fund receives investment management services from
Manufacturers Adviser Corporation. Manufacturers Adviser
Corporation is a registered investment adviser under the
Investment Advisers Act of 1940. NASL Series Trust receives
investment advisory services from NASL Financial Services,
Inc. NASL Financial Services, Inc. is a registered investment
adviser under the Investment Advisers Act of 1940. NASL
Series Trust also employs subadvisers. Fidelity Management
Trust Company provides investment subadvisory services to the
Equity, Conservative Asset Allocation, Moderate Asset
Allocation and Aggressive Asset Allocation Trusts. Goldman
Sachs Asset Management provides investment subadvisory
services to the Value Equity Trust. Wellington Management
Company provides investment subadvisory services to the Growth
and Income Trust and Salomon Brothers Asset Management Inc
provides investment subadvisory services to the U.S.
Government Securities Trust.
What Are The Investment Objectives Of The Portfolios?
The investment objectives of the Portfolios currently
available to policyowners through corresponding sub-accounts
are set forth below. There is, of course, no assurance that
these objectives will be met.
Manulife Funds
Emerging Growth Equity Fund. The investment objective of the
Emerging Growth Equity Fund is to achieve growth of capital by
investing primarily in equity securities of companies believed
to offer growth potential over both the intermediate and the
long term. Current income is not a significant consideration.
In selecting investments, emphasis will be placed on
securities of progressive companies with aggressive and
<PAGE> - 28 -
<PAGE>
competent managements. A substantial portion of the Fund's
assets may be invested in emerging growth companies, which at
the time of the Fund's investment may be paying no dividends
to their shareholders.
Balanced Assets Fund. The investment objective of the Balanced
Assets Fund is to achieve intermediate and long-term growth
through capital appreciation and income by investing in both
debt and equity securities. The Fund will maintain at all
times a balance between debt securities or preferred stocks,
on the one hand, and common stocks, on the other. At least 25%
of the Fund's assets will be invested in each of the two basic
categories.
Capital Growth Bond Fund. The investment objective of the
Capital Growth Bond Fund is to achieve growth of capital by
investing in medium-grade or better debt securities with
income as a secondary consideration. The Capital Growth Bond
Fund differs from most "bond" funds in that its primary
objective is capital appreciation, not income. The Fund will
be carefully positioned in relation to the term of debt
obligations and the anticipated movement of interest rates.
Money-Market Fund. The investment objective of the
Money-Market Fund is to provide maximum current income
consistent with capital preservation and liquidity by
investing in a portfolio of high-quality money market
instruments.
Common Stock Fund. The investment objective of the Common
Stock Fund is to achieve intermediate and long-term growth
through capital appreciation and current income by investing
in common stocks and other equity securities of well
established companies with promising prospects for providing
an above-average rate of return. In selecting investments,
emphasis will be placed on companies with good financial
resources, strong balance sheet, satisfactory rate of return
on capital, good industry position, superior management
skills, and earnings that tend to grow consistently. The
Fund's investments are not limited to any particular type or
size of company, but high-quality growth stocks are
emphasized.
Real Estate Securities Fund. The investment objective of the
Real Estate Securities Fund is to achieve a combination of
long-term capital appreciation and satisfactory current income
by investing in real estate related equity and debt
securities. In pursuit of its objective, the Real Estate
Securities Fund will invest principally in real estate
investment trust equity and debt securities and other
securities issued by companies which invest in real estate or
interests therein. The Fund may also purchase the common
<PAGE> - 29 -
<PAGE>
stocks, preferred stocks, convertible securities and bonds of
companies operating in industry groups relating to the real
estate industry. This would include companies engaged in the
development of real estate, building and construction, and
other market segments related to real estate. The Fund will
not invest directly in real property nor will it purchase
mortgage notes directly. Under normal circumstances, at least
65% of the value of the Fund's total assets will be invested
in real estate related equity and debt securities.
International Fund. The investment objective of the
International Fund is to achieve long-term growth of capital
by investing in a diversified portfolio that is comprised
primarily of common stocks and equity-related securities of
companies domiciled in countries other than the United States
and Canada. It invests primarily in the securities markets of
Western European countries, Australia, the Far East, Mexico
and South America. The Fund will, under normal conditions,
invest at least 65% of its net assets in common stocks and
equity-related securities of established larger-capitalization
companies that have attractive long-term prospects for growth
of capital.
Pacific Rim Emerging Markets Fund. The investment objective of
the Pacific Rim Emerging Markets Fund is to achieve long-term
growth of capital by investing in a diversified portfolio that
is comprised primarily of common stocks and equity-related
securities of companies domiciled in the countries of the
Pacific Rim region. The Fund will, under normal conditions,
invest at least 65% of its net assets in common stocks and
equity-related securities of established larger-capitalization
companies that have attractive long-term prospects for growth
of capital.
Equity Index Fund. The investment objective of the Equity
Index Fund is to achieve investment results which approximate
the total return of publicly-traded common stocks in the
aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index.
A full description of the Manulife Series Fund, its investment
objectives, policies and restrictions, its expenses, the risks
associated therewith, and other aspects of its operation, is
contained in the accompanying Manulife Series Fund prospectus,
which should be read together with this prospectus.
NASL Trusts
Equity Trust. The investment objective of the Equity Trust is
to seek growth of capital by investing primarily in common
stocks of United States issuers and securities convertible
into or carrying the right to buy common stocks.
<PAGE> - 30 -
<PAGE>
Value Equity Trust. The investment objective of the Value
Equity Trust is to seek long-term growth of capital by
investing primarily in common stocks and securities
convertible into or carrying the right to buy common stocks.
Growth and Income Trust. The investment objective of the
Growth and Income Trust is to seek long-term growth of capital
and income, consistent with prudent investment risk, by
investing primarily in a diversified portfolio of common
stocks of U.S. issuers which the subadviser believes are of
high quality.
U.S. Government Securities Trust. The investment objective of
the U.S. Government Securities Trust is to seek a high level
of current income consistent with preservation of capital and
maintenance of liquidity by investing in debt obligations and
mortgage-backed securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities and derivative
securities such as collateralized mortgage obligations backed
by such securities.
Automatic Asset Allocation Trusts. The investment objective
of the Automatic Asset Allocation Trusts is to seek the
highest potential return consistent with a specified level of
risk tolerance -- conservative, moderate or aggressive -- by
investing primarily in debt, equity, and money market
securities.
. The Aggressive Asset Allocation Trust seeks the highest
total return consistent with an aggressive level of risk
tolerance. The Trust attempts to limit the decline in
portfolio value in very adverse market conditions to 15%
over any twelve month period.
. The Moderate Asset Allocation Trust seeks the highest
total return consistent with a moderate level of risk
tolerance. The Trust attempts to limit the decline in
portfolio value in very adverse market conditions to 10%
over any twelve month period.
. The Conservative Asset Allocation Trust seeks the highest
total return consistent with a conservative level of risk
tolerance. The Trust attempts to limit the decline in
portfolio value in very adverse market conditions to 5%
over any twelve month period.
A full description of the NASL Series Trust, its investment
objectives, policies and restrictions, the risks associated
therewith, its expenses, and other aspects of its operation is
contained in the accompanying NASL Series Trust prospectus,
which should be read together with this prospectus.
</REDLINE>
<PAGE> - 31 -
<PAGE>
Detailed Information About The Policies
Premium Provisions
What Are The Requirements And Procedures For Issuance Of A
Policy?
To purchase a Policy, an applicant must submit a completed
application. Manufacturers Life of America will issue a Policy
only if it has a face amount of at least $25,000, except for
Policies issued under group or sponsored arrangements in which
case the minimum face amount is $10,000. A Policy will
generally be issued to persons between ages 0 and 80. In
certain circumstances the Company may at its sole discretion
issue a Policy to persons above age 80. Before issuing a
Policy, Manufacturers Life of America will require evidence of
insurability satisfactory to it. A life insured meeting
standard underwriting rules will have a risk class of either
"standard" or "nonsmoker." Persons failing to meet standard
underwriting requirements may be eligible for a Policy with an
additional rating assigned to it. Acceptance of an application
is subject to the Company's insurance underwriting rules. Each
Policy is issued with a policy date from which policy years,
policy months and policy anniversaries are all determined.
Each Policy also has an effective date which is the date the
Company becomes obligated under the Policy and when the first
monthly deductions are taken. If an application is accompanied
by a check for all or a portion of the initial premium and the
application is accepted, the policy date will be the date the
application and check were received at the Manufacturers Life
of America Service Office and the effective date will be the
date Manufacturers Life of America's underwriters approve
issuance of the Policy. If an application is accompanied by a
check for all or a portion of the initial premium, the life
insured may be covered under the terms of a conditional
insurance agreement until the effective date. If an
application accepted by the Company is not accompanied by a
check for the initial premium, the Policy will be issued with
a policy date which is seven days after issuance of the Policy
and with an effective date which is the date the Service
Office receives at least the initial planned premium. In
certain situations a different policy date may be used. The
initial planned premium must be received within 60 days after
the policy date. If the premium is not paid or if the
application is rejected, the Policy will be cancelled and any
partial premiums paid will be returned to the applicant.
Under certain circumstances a Policy may be issued with a
backdated policy date. A Policy will not be backdated more
than six months before the date of the application for the
Policy. Monthly deductions will be made for the period the
policy date is backdated.
<PAGE> - 32 -
<PAGE>
All premiums received prior to the effective date of a Policy
will be credited with interest from the date of receipt at the
rate of return then being earned on amounts allocated to the
Money-Market Fund. On the effective date, the premiums paid
plus interest credited, net of deductions for federal, state
and local taxes, will be allocated among the Investment
Accounts or the Guaranteed Interest Account in accordance with
the policyowner's instructions.
All premiums received on or after the effective date will be
allocated among Investment Accounts or the Guaranteed Interest
Account as of the date the premiums were received at the
Manufacturers Life of America Service Office. Monthly
deductions are due on the policy date and at the beginning of
each policy month thereafter. However, if due prior to the
effective date, they will be taken on the effective date
instead of the dates they were due.
What Limitations Apply To Premium Amounts?
After the payment of the initial premium, premiums may be paid
at any time and in any amount during the lifetime of the life
insured, subject to the limitations on premium amount and the
minimum premium requirement described below. Premiums after
the first must be paid to the Manufacturers Life of America
Service Office. Unlike traditional insurance, premiums are not
payable at specified intervals and in specified amounts. A
Policy will be issued with a planned premium, which is based
on the amount of premium the policyowner wishes to pay. The
planned premium during the first two policy years must be such
that the minimum premium requirement will be met.
Manufacturers Life of America will send notices to the
policyowner setting forth the planned premium at the payment
interval selected by the policyowner, unless payment is being
made pursuant to a pre-authorized payment plan. However, the
policyowner is under no obligation to make the indicated
payment.
Manufacturers Life of America will not accept any premium
payment which is less than $50, unless the premium is payable
pursuant to a pre-authorized payment plan. In that case the
Company will accept a payment of as little as $10.
Manufacturers Life of America may change these minimums on 90
days' written notice. The Policies also limit the sum of the
premiums that may be paid at any time so as to preserve the
qualification of the Policies as life insurance for federal
tax purposes. These limitations are set forth in each Policy.
Manufacturers Life of America reserves the right to refuse or
refund any premium payments that may cause the Policy to fail
to qualify as life insurance under applicable tax law.
<PAGE> - 33 -
<PAGE>
Minimum Premium Requirement. The Policy provides for a minimum
premium requirement. The minimum premium requirement is met if
at the beginning of each policy month the sum of all premiums
paid less any partial withdrawals and any Policy Debt is at
least equal to the sum of the minimum monthly premiums since
the policy date. The minimum premium as an annualized amount
is set forth in the Policy. It is subject to change if the
face amount of the Policy or the death benefit option is
changed (see Insurance Benefit "Can The Death Benefit Option
Be Changed?" and "Can The Face Amount Of A Policy Be
Changed?") or if there is any change in the supplementary
benefits added to the Policy or in the rate classification of
the life insured.
Is There A Death Benefit Guarantee?
If the minimum premium requirement is met, Manufacturers Life
of America will guarantee that the Policy will not go into
default even if a combination of policy loans, adverse
investment experience or other factors should cause the
Policy's Net Cash Surrender Value to be insufficient to meet
the monthly deduction due at the beginning of a policy month.
If the guarantee is in effect, Manufacturers Life of America
will not allow the Net Policy Value to go below zero, although
it will continue to assess a monthly deduction at the
beginning of each policy month until the Net Policy Value
should fall to zero. The guarantee provides assurance to the
policyowner that the Policy will remain in force regardless of
the investment performance of the sub-accounts selected by the
policyowner, provided the policyowner has satisfied the
minimum premium requirement.
The death benefit guarantee will expire on the policy
anniversary on which the life insured is 70 years old, or two
years after the policy date if later. While the guarantee is
in effect, Manufacturers Life of America will determine at the
beginning of each policy month whether the minimum premium
requirement has been met. If it has not been met, the Company
will notify the policyowner of that fact and allow a 61-day
grace period in which the policyowner may make a premium
payment sufficient to keep the death benefit guarantee in
effect. The required payment will be equal to the minimum
premium due at the date the minimum premium requirement was
not met plus the minimum premium due for the next two policy
months. If the required payment is not received by the end of
the grace period, the death benefit guarantee will terminate.
Once it is terminated, it cannot be reinstated.
When Does A Policy Go Into Default?
Default Prior To Second Policy Anniversary. If the minimum
premium requirement should not be met at the beginning of any
<PAGE> - 34 -
<PAGE>
policy month during the first two policy years, the Policy
will go into default. Manufacturers Life of America will
notify the policyowner of the default and allow a 61-day grace
period in which the policyowner may make a premium payment
sufficient to bring the Policy out of default. The required
premium will be equal to the minimum premium due at the date
of default plus the minimum premium due for the next two
policy months. If the required payment is not received by the
end of the grace period, the Policy will terminate and the Net
Cash Surrender Value as of the date of default less the
monthly deduction then due will be paid to the policyowner
together with any refund of excess sales loading to which the
policyowner is entitled. See Charges "What Are The Surrender
Charges?"
Default After Second Policy Anniversary. If the death benefit
guarantee is no longer in effect, a Policy will go into
default after the second policy anniversary if at the
beginning of any policy month the Policy's Net Cash Surrender
Value would go below zero after deducting the monthly
deduction then due. As with a default during the first two
policy years, Manufacturers Life of America will notify the
policyowner of the default and will allow a 61-day grace
period in which the policyowner may make a premium payment
sufficient to bring the Policy out of default. The required
payment will be equal to the amount necessary to bring the Net
Cash Surrender Value to zero, if it was less than zero at the
date of default, plus the monthly deductions due at the date
of default and payable at the beginning of each of the two
policy months thereafter. If the required payment is not
received by the end of the grace period, the Policy will
terminate and the Net Cash Surrender Value as of the date of
default less the monthly deduction then due will be paid to
the policyowner together with any refund of excess sales
loading to which the policyowner is entitled. See Charges
"What Are The Surrender Charges?" If the life insured should
die during the grace period following a Policy's going into
default, the Policy Value used in the calculation of the death
benefit will be the Policy Value as of the date of default and
the insurance benefit payable will be reduced by any
outstanding monthly deductions due at the time of death.
How Can A Terminated Policy Be Reinstated?
A policyowner can reinstate a Policy which has terminated
after going into default at any time within the five-year
period following the date of termination subject to the
following conditions:
(a) The Policy must not have been surrendered for its Net
Cash Surrender Value;
<PAGE> - 35 -
<PAGE>
(b) Evidence of the life insured's insurability satisfactory
to Manufacturers Life of America is furnished to it;
(c) A premium equal to the payment required during the grace
period following default to keep the Policy in force is paid
to Manufacturers Life of America; and
(d) An amount equal to any amounts paid by Manufacturers Life
of America in connection with the termination of the Policy is
repaid to Manufacturers Life of America.
If the reinstatement is approved, the date of reinstatement
will be the later of the date of the policyowner's written
request or the date the required payment is received at the
Manufacturers Life of America Service Office.
How May Net Premiums Be Invested?
<REDLINE>
Net premiums (gross premiums less the premium tax deduction
and sales charge) may be allocated to either the Guaranteed
Interest Account for accumulation at a rate of interest equal
to at least 4% or to one or more of the Investment Accounts
for investment in the Portfolio shares held by the
corresponding sub-account of the Separate Account. Allocations
among the Investment Accounts and the Guaranteed Interest
Account are made as a percentage of the net premium. The
percentage allocation to any account may be any whole number
between zero and 100, provided the total percentage
allocations equal 100. A policyowner may change the way in
which net premiums are allocated at any time without charge.
The change will take effect on the date a written or
telephonic request for change satisfactory to the Company is
received at the Manufacturers Life of America Service
Office.</REDLINE>
Is There A Short-Term Cancellation Right,
Or "Free Look"?
A Policy may be returned for a full refund within 10 days
after it is received, within 45 days after the application for
the Policy is signed, or within 10 days after Manufacturers
Life of America mails or delivers a notice of right of
withdrawal, whichever is latest. The Policy can be mailed or
delivered to the Manufacturers Life of America agent who sold
it or to the Manufacturers Life of America Service Office.
Immediately on such delivery or mailing, the Policy shall be
deemed void from the beginning. Within seven days after
receipt of the returned Policy at its Service Office,
Manufacturers Life of America will refund any premium paid.
Manufacturers Life of America reserves the right to delay the
refund of any premium paid by check until the check has
cleared.
<PAGE> - 36 -
<PAGE>
If a policyowner requests an increase in face amount which
results in new surrender charges, he or she will have the same
rights as described above to cancel the increase. If
cancelled, the Policy Value and the surrender charges will be
recalculated to the amounts they would have been had the
increase not taken place. A policyowner may request a refund
of all or any portion of premiums paid during the free look
period, and the Policy Value and the surrender charges will be
recalculated to the amounts they would have been had the
premiums not been paid.
What Are The Conversion Privileges Of The Policy?
The policyowner may effectively convert his or her Policy to a
fixed benefit policy by transferring the Policy Value in all
of the Investment Accounts to the Guaranteed Interest Account
and by changing his or her allocation of net premiums entirely
to the Guaranteed Interest Account. As long as the entire
Policy Value is allocated to the Guaranteed Interest Account,
the Policy Value, other values based thereon and the death
benefit will be determinable and guaranteed. The Investment
Account values to be transferred to the Guaranteed Interest
Account will be determined as of the Business Day on which
Manufacturers Life of America receives the request for
conversion. There will be no change in the issue age, risk
class of the life insured or face amount as a result of the
conversion. A transfer of any or all of the Policy Value to
the Guaranteed Interest Account can be made at any time, even
if a prior transfer has been made during the policy month.
Insurance Benefit
What Is The Insurance Benefit?
If the Policy is in force at the time of the life insured's
death, Manufacturers Life of America will pay an insurance
benefit based on the death benefit option selected by the
policyowner upon receipt of due proof of death. The amount
payable will be the death benefit under the selected option,
plus any amounts payable under any supplementary benefits
added to the Policy, less the value of the Loan Account at the
date of death. The insurance benefit will be paid in one sum
unless another form of settlement option is agreed to by the
beneficiary and the Company. If the insurance benefit is paid
in one sum, Manufacturers Life of America will pay interest
from the date of death to the date of payment. If the life
insured should die after the Company's receipt of a request
for surrender, no insurance benefit will be payable, and
Manufacturers Life of America will pay only the Net Cash
Surrender Value.
What Death Benefit Options Are Available?
<PAGE> - 37 -
<PAGE>
The Policies permit the policyowner to select one of two death
benefit options Option 1 and Option 2. Under Option 1 the
death benefit is the face amount of the Policy at the date of
death or, if greater, the Policy Value at the date of death
multiplied by the applicable percentage in the table set forth
below. Under Option 2 the death benefit is the face amount of
the Policy plus the Policy Value at the date of death or, if
greater, the Policy Value at the date of death multiplied by
the applicable percentage in the following table:
<PAGE> - 38 -
<PAGE>
<TABLE>
<CAPTION>
Attained Corridor
Age Percentage
<S> <C>
40 & below 250%
41 243
42 236
43 229
44 222
45 215
46 209
47 203
48 197
49 191
50 185
51 178
52 171
53 164
54 157
55 150
56 146
57 142
58 138
59 134
60 130
61 128
62 126
63 124
64 122
65 120
66 119
</TABLE
<PAGE> - 39 -
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Attained Corridor
Age Percentage
<S> <C>
67 118
68 117
69 116
70 115
71 113
72 111
73 109
74 107
75-90 105
91 104
92 103
93 102
94 101
95 & above 100
</TABLE>
Regardless of which death benefit option is in effect, the
relationship of Policy Value to death benefit will change
whenever the "corridor percentages" are used to determine the
amount of the death benefit, in other words, whenever
multiplying the Policy Value by the applicable percentage set
forth in the above table results in a greater death benefit
than would otherwise apply under the selected option. For
example, assume the life insured under a Policy with a face
amount of $100,000 has an attained age of 40. If Option 1 is
in effect, the corridor percentage will produce a greater
death benefit whenever the Policy Value exceeds $40,000 (250%
X $40,000 = $100,000). If the Policy Value is less than
$40,000, an incremental change in Policy Value, up or down,
will have no effect on the death benefit. If the Policy Value
is greater than $40,000, an incremental change in Policy Value
will result in a change in the death benefit by a factor of
2.5. Thus, if the Policy Value were to increase to $40,010,
the death benefit would be increased to $100,025 (250% X
$40,010 = $100,025).
If Option 2 were in effect in the above example, the corridor
percentage would produce a greater death benefit whenever the
Policy Value exceeded $66,667. At that point the death benefit
produced by multiplying the Policy Value by 250% would result
in a greater amount than adding the Policy Value to the face
amount of the Policy. If the Policy Value is less than
$66,667, an incremental change in Policy Value will have a
dollar-for-dollar effect on the death benefit. If the Policy
Value is greater than $66,667, an incremental change in Policy
<PAGE> - 40 -
<PAGE>
Value will result in a change in the death benefit by a factor
of 2.5 in the same manner as would be the case under Option 1
when the corridor percentage determined the death benefit.
Can The Death Benefit Option Be Changed?
The death benefit option is selected initially by the
policyowner in the application. After the Policy has been in
force for two years the death benefit option may be changed
effective with a policy anniversary. Written request for a
change must be received by Manufacturers Life of America at
least 30 days prior to a policy anniversary in order to become
effective on that date. The Company reserves the right to
limit a request for change if the change would cause the
Policy to fail to qualify as life insurance for tax purposes.
A change in death benefit option will result in a change in
the Policy's face amount in order to avoid any change in the
amount of the death benefit. If the change in death benefit is
from Option 1 to Option 2, the new face amount will be equal
to the face amount prior to the change minus the Policy Value
on the effective date of the change. If the change in death
benefit is from Option 2 to Option 1, the new face amount will
be equal to the face amount prior to the change plus the
Policy Value on the effective date of the change. The increase
in face amount resulting from a change to Option 1 will not
affect the amount of surrender charges to which a Policy may
be subject. A change to Option 2 will be subject to
satisfactory evidence of insurability and will not be allowed
if it would cause the face amount of the Policy to go below
the minimum face amount of $25,000.
Policyowners who wish to have level insurance coverage should
generally select Option 1. Under Option 1, increases in Policy
Value usually will reduce the net amount of risk under a
Policy which will reduce cost of insurance charges. This means
that favorable investment performance should result in a
faster increase in Policy Value than would occur under an
identical Policy with Option 2 in effect. However, the larger
Policy Value which may result under Option 1 will not affect
the amount of the death benefit unless the corridor
percentages are used to determine the death benefit.
Policyowners who want to have the Policy Value reflected in
the death benefit so that any increases in Policy Value will
increase the death benefit should generally select Option 2.
Under Option 2 the net amount at risk will remain level unless
the corridor percentages are used to determine death benefit,
in which case increases in Policy Value will increase the net
amount at risk.
<PAGE> - 41 -
<PAGE>
Can The Face Amount Of A Policy Be Changed?
Subject to certain limitations, a policyowner may, upon
written request, increase or decrease the face amount of the
Policy. A change in face amount will usually affect the
minimum premium requirement, the monthly deduction and
surrender charges (see "Charges"). Currently, a change in face
amount must be at least $10,000, except in the case of group
or sponsored arrangements where the minimum change is $5,000.
Manufacturers Life of America reserves the right to increase
or decrease the minimum face amount change on 90 days' written
notice to the policyowner. The Company also reserves the right
to limit a change in face amount so as to prevent the Policy
from failing to qualify as life insurance for tax purposes.
Increases. Increases in face amount are subject to
satisfactory evidence of insurability. Increases may be made
only once per policy year and only after the first policy
year. An increase will become effective at the beginning of
the policy month following the date Manufacturers Life of
America approves the requested increase. The Company reserves
the right to refuse a requested increase if the life insured's
age at the effective date of the increase would be greater
than the maximum issue age for new Policies at that time.
An increase in face amount will usually result in the Policy's
being subject to new surrender charges. The new surrender
charges will be computed as if a new Policy were being
purchased for the increase in face amount. For purposes of
determining the new deferred sales charge, a portion of the
Policy Value at the time of the increase, and a portion of the
premiums paid on or subsequent to the increase, will be deemed
to be premiums attributable to the increase. See Charges
"What Are The Surrender Charges?" Any increase in face amount
to a level less than the highest face amount previously in
effect will have no effect on the surrender charges to which
the Policy is subject, since surrender charges, if applicable,
will have been assessed in connection with the prior decrease
in face amount. As with the purchase of a Policy, a
policyowner will have free look and refund rights with respect
to any increase resulting in new surrender charges.
No additional premium is required for a face amount increase.
However, a premium payment may be necessary to avoid the
Policy's going into default, since new surrender charges
resulting from an increase would automatically reduce the Net
Cash Surrender Value of the Policy. Moreover, a new minimum
premium will be determined for purposes of the death benefit
guarantee. The insurance coverage eliminated by the decrease
of the oldest face amount will be deemed to be restored first.
<PAGE> - 42 -
<PAGE>
Decreases. A decrease in the face amount may be requested
after the Policy has been in force for one year, except during
the one-year period following any increase in face amount. In
addition, during the two-year period following an increase in
face amount, the policyowner may elect at any time to cancel
the increase and have the deferred sales charge for the
increase reduced by the refund of any excess sales load
attributable to the increase. A decrease in face amount will
be effective only on a policy anniversary. Written request for
a decrease must be received by Manufacturers Life of America
at least 30 days prior to a policy anniversary in order to
become effective on that date. A decrease will not be allowed
if it would cause the face amount to go below the minimum face
amount of $25,000, or $10,000 in the case of group or
sponsored arrangements.
A decrease in face amount during the 15-year period following
issuance of the Policy or any increase in face amount will
usually result in surrender charges being deducted from the
Policy Value. See Charges "What Are The Surrender Charges?"
For purposes of determining surrender and cost of insurance
charges, a decrease will reduce face amount in the following
order: (a) the face amount provided by the most recent
increase, then (b) the face amounts provided by the next most
recent increases successively, and finally (c) the initial
face amount.
Policy Values
What Is The Policy Value And How Is It Determined?
<REDLINE>
A Policy has a Policy Value, a portion of which is available
to the policyowner by making a policy loan or partial
withdrawal or upon surrender of the Policy. See "What Are The
Provisions Governing Policy Loans?" and "How May A Policyowner
Obtain The Net Cash Surrender Value?" below. The Policy Value
may also affect the amount of the death benefit (see Insurance
Benefit "What Death Benefit Options Are Available?"). The
Policy Value at any time is equal to the sum of the Values in
the Investment Accounts, the Guaranteed Interest Account and
the Loan Account. The following discussion relates only to the
Investment Accounts. Policy loans are discussed under "What
Are The Provisions Governing Policy Loans?" and the Guaranteed
Interest Account is discussed under "The General Account." The
portion of the Policy Value based on the Investment Accounts
is not guaranteed and will vary each Business Day with the
investment performance of the underlying Portfolios.</REDLINE>
An Investment Account is established under each Policy for
each sub-account of the Separate Account to which net premiums
or transfer amounts have been allocated. Each Investment
Account under a Policy measures the interest of the Policy in
<PAGE> - 43 -
<PAGE>
the corresponding sub-account. The value of the Investment
Account established for a particular sub-account is equal to
the number of units of that sub-account credited to the Policy
times the value of such units.
Units of a particular sub-account are credited to a Policy
when net premiums are allocated to that sub-account or amounts
are transferred to that sub-account. Units of a sub-account
are cancelled whenever amounts are deducted, transferred or
withdrawn from the sub-account. The number of units credited
or cancelled for a specific transaction is based on the dollar
amount of the transaction divided by the value of the unit on
the Business Day on which the transaction occurs. The number
of units credited with respect to a premium payment will be
based on the applicable unit values for the Business Day on
which the premium is received at the Manufacturers Life of
America Service Office, except for any premiums received
before the policy date as to which the applicable unit values
will be the values determined on such date.
Units are valued at the end of each Business Day, which is any
day that the net asset value of the Fund shares held by the
applicable sub-account is determined. A Business Day is deemed
to end at the time of such determination. When an order
involving the crediting or cancelling of units is received at
the Manufacturers Life of America Service Office after the end
of a Business Day or on a day which is not a Business Day, the
order will be processed on the basis of unit values determined
on the next Business Day. Similarly, any determination of
Policy Value, Investment Account value or death benefit to be
made on a day which is not a Business Day will be made on the
next Business Day.
The value of a unit of each sub-account was initially fixed at
$10.00. For each subsequent Business Day the unit value is
determined by taking the value of the adjusted net assets of
the particular sub-account at the end of the Business Day
divided by the total number of units. The value of a unit may
increase, decrease or remain the same, depending on the
investment performance of a sub-account from one Business Day
to the next. The unit value for a sub-account for any Business
Day is equal to (a) minus (b), divided by (c), where:
(a) is the net asset value of the sub-account at the end of
such Business Day;
(b) is a charge not exceeding 0.000017866 for each calendar
day since the preceding Business Day, multiplied by the net
assets of the sub-account as of the end of such Business Day,
corresponding to a charge not exceeding 0.65% per year for
mortality and expense risks; and
<PAGE> - 44 -
<PAGE>
(c) is the total number of units of the sub-account.
Manufacturers Life of America reserves the right to adjust the
above formula for any taxes determined by it to be
attributable to the operations of the sub-account.
Transfers Of Policy Value.
Under the Policies a policyowner may change the extent to
which his or her Policy Value is based upon any specific
sub-account of the Separate Account or the Company's general
account. Such changes are made by transferring amounts from
one or more Investment Accounts or the Company's general
account to other Investment Accounts or the Company's general
account. A policyowner is permitted to make one transfer each
policy month. For this purpose all transfer requests received
by Manufacturers Life of America on the same Business Day are
treated as a single transfer. Transfers are free of charge.
The minimum amount that may be transferred from an account is
the lesser of $500 or the entire account value. The maximum
amount that may be transferred from the Guaranteed Interest
Account in any one policy year is the greater of $500 or 15%
of the Guaranteed Interest Account value at the previous
policy anniversary. Any transfer which involves a transfer out
of the Guaranteed Interest Account may not involve a transfer
to the Investment Account for the Money-Market Fund.
Transfer requests must be in a format satisfactory to
Manufacturers Life of America and in writing, or by telephone
if a currently valid telephone transfer authorization form is
on file. Although failure to follow reasonable procedures may
result in Manufacturers Life of America's liability for any
losses resulting from unauthorized or fraudulent telephone
transfers, Manufacturers Life of America will not be liable
for following instructions communicated by telephone that it
reasonably believes to be genuine. Manufacturers Life of
America will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Such
procedures shall consist of confirming a valid telephone
authorization form is on file, tape recording all telephone
transactions and providing written confirmation thereof.
The policyowner may effectively convert his or her Policy to a
fixed benefit policy by transferring the Policy Value in all
of the Investment Accounts to the Guaranteed Interest Account
and by changing his or her allocation of net premiums entirely
to the Guaranteed Interest Account. As long as the entire
Policy Value is allocated to the Guaranteed Interest Account,
the Policy Value, other values based thereon and the death
benefit will be determinable and guaranteed. The Investment
Account values to be transferred to the Guaranteed Interest
<PAGE> - 45 -
<PAGE>
Account will be determined as of the Business Day on which
Manufacturers Life of America receives the request for
conversion. There will be no change in the issue age, risk
class of the life insured or face amount as a result of the
conversion. A transfer of any or all of the Policy Value to
the Guaranteed Interest Account can be made at any time, even
if a prior transfer has been made during the policy month.
Dollar Cost Averaging. Manufacturers Life of America will
offer policyowners a Dollar Cost Averaging program. Under this
program amounts will be automatically transferred at
predetermined intervals from one Investment Account to any
other Investment Account(s) or the Guaranteed Interest
Account.
Under the Dollar Cost Averaging program the policyowner will
designate an amount to be transferred each month from one
Investment Account into any other Investment Account(s) or the
Guaranteed Interest Account. Each transfer under the Dollar
Cost Averaging program must be of a minimum amount as set by
Manufacturers Life of America. Once set, this minimum may be
changed at any time at the discretion of Manufacturers Life of
America. Currently, no charge will be made for this program if
the Policy Value exceeds $15,000 on the date of transfer.
Otherwise, there will be a charge of $5 for each transfer
under this program. The charge will be deducted from the value
of the Investment Account out of which the transfer occurs. If
insufficient funds exist to effect a Dollar Cost Averaging
transfer, including the charge, if applicable, the transfer
will not be effected and the policyowner will be so notified.
Manufacturers Life of America reserves the right to cease to
offer this program on 90 days' written notice to the
policyowner.
Asset Allocation Balancer Transfers. Manufacturers Life of
America will also offer policyowners the ability to have
amounts automatically transferred among stipulated Investment
Accounts to maintain an allocated percentage in each
stipulated Investment Account.
Under the Asset Allocation Balancer program the policyowner
will designate an allocation of Policy Value among Investment
Accounts. On the policy anniversary, and at six month
intervals thereafter, Manufacturers Life of America will move
amounts among the Investment Accounts as necessary to maintain
the policyowner's chosen allocation. Currently, the charge for
this program is $15 per transfer or series of transfers
occurring on the same transfer date. This charge will be
deducted from all accounts affected by the Asset Allocation
Balancer transfer in the same proportion that the value in
each account bears to the Policy Value immediately after the
transfer. Manufacturers Life of America reserves the right to
<PAGE> - 46 -
<PAGE>
cease to offer this program on 90 days' written notice to the
policyowner.
What Are The Provisions Governing Policy Loans?
On or after the first policy anniversary, while the Policy is
in force, the policyowner may borrow against the Policy Value
of his or her Policy. The one-year waiting period for
borrowing against the Policy Value is waived in the case of
policies which are exchanged for Manufacturers Life of America
Policies and a policy loan will be permitted in an amount
equal to the lesser of (a) the amount rolled over into the
Manufacturers Life of America Policy and (b) the loan value of
the Policy. The Policy serves as the only security for the
loan. The amount of any loan must be at least $500 and cannot
exceed the amount which would cause the Modified Policy Debt
to equal the loan value of the Policy on the date of the loan.
The loan value is the Policy's Cash Surrender Value less the
monthly deductions due to the next policy anniversary. The
Modified Policy Debt as of any date is the Policy Debt (the
aggregate amount of policy loans, including borrowed interest,
less any loan repayments) plus the amount of interest to be
charged to the next policy anniversary, all discounted from
the next policy anniversary to such date at an annual rate of
4%. An amount equal to the Modified Policy Debt is transferred
to the Loan Account to ensure that a sufficient amount will be
available to pay interest on the Policy Debt at the next
policy anniversary.
For example, assume a Policy with a loan value of $5,000, no
outstanding policy loans and a loan interest rate of 8%. The
maximum amount that can be borrowed is an amount that will
cause the Modified Policy Debt to equal $5,000. If the loan is
made on a policy anniversary, the maximum loan will be $4,815.
This amount at 8% interest will equal $5,200 one year later;
$5,200 discounted to the date of the loan at 4% (the Modified
Policy Debt) equals $5,000. Because the minimum rate of
interest credited to the Loan Account is 4%, $5,000 must be
transferred to the Loan Account to ensure that $5,200 will be
available at the next policy anniversary to cover the interest
accrued on the Policy Debt.
When a loan is made, Manufacturers Life of America will deduct
from the Investment Accounts or the Guaranteed Interest
Account, and transfer to the Loan Account, an amount which
will result in the Loan Account value being equal to the
Modified Policy Debt. The policyowner may designate how the
amount to be transferred to the Loan Account is allocated
among the accounts from which the transfer is to be made. In
the absence of instructions, the amount to be transferred will
be allocated to each account in the same proportion as the
value in each Investment Account and the Guaranteed Interest
<PAGE> - 47 -
<PAGE>
Account bears to the Net Policy Value. A transfer from an
Investment Account will result in the cancellation of units of
the underlying sub-account equal in value to the amount
transferred from the Investment Account. However, since the
Loan Account is part of the Policy Value, transfers made in
connection with a loan will not change the Policy Value.
A policy loan may result in a Policy's failing to satisfy the
minimum premium requirement, since the Policy Debt is
subtracted from the sum of the premiums Paid in determining
whether the minimum premium requirement is met. See Premium
Provisions "What Limitations Apply To Premium Amounts?;
Minimum Premium Requirement." As a result, the Policy may go
into default if the minimum premium requirement is not met
during the first two policy years, or the death benefit
guarantee may terminate if the minimum premium requirement is
not met either before or after the second policy anniversary.
See Premium Provisions "Is There A Death Benefit Guarantee?"
and "When Does A Policy Go Into Default?" Moreover, if the
death benefit guarantee is not in force, a policy loan may
cause a Policy to be more susceptible to going into default,
since a policy loan will be reflected in the Net Cash
Surrender Value. See Premium Provisions "When Does A Policy
Go Into Default?" A policy loan will also have an effect on
future Policy Values, since that portion of the Policy Value
in the Loan Account will increase in value at the crediting
interest rate rather than varying with the performance of the
underlying Funds selected by the policyowner or increasing in
value at the rate of interest credited for amounts allocated
to the Guaranteed Interest Account. Finally, a policy loan
will affect the amount payable on the death of the life
insured, since the death benefit is reduced by the value of
the Loan Account at the date of death in arriving at the
insurance benefit.
Interest Charged On Policy Loans. Interest on the Policy Debt
will accrue daily and be payable annually on the policy
anniversary. The rate of interest charged will be either on a
fixed basis or a variable basis as selected by the policyowner
in the application. The policyowner may change the interest
basis on any policy anniversary provided a written request for
change is received by the Company at least 60 days before the
anniversary on which such change is to be effective.
If the policyowner elects to have interest charged on a fixed
basis, interest will be at an effective annual rate of 8%. If
the policyowner elects to have interest charged on a variable
basis, the rate will be determined by Manufacturers Life of
America at the beginning of each policy year, and the rate so
determined will be effective until the next policy anniversary
at which time it will be recalculated. Except as described
below, the variable rate will not exceed the greater of 6% per
<PAGE> - 48 -
<PAGE>
year or the Moody's Corporate Bond Yield Average Monthly
Average Corporates for the calendar month ending two months
before the beginning of the month in which the policy
anniversary falls. On each policy anniversary, the annual rate
of interest may be adjusted up or down, but no adjustment will
be made unless the Moody's Average for the month ending two
months before the date of determination is at least one-half
of one percent greater or less than the rate in effect for the
year then ending. If the interest due on a policy anniversary
is not paid by the policyowner, the interest will be borrowed
against the policy.
Interest Credited To The Loan Account. Manufacturers Life of
America will credit interest to any amount in the Loan Account
at an effective annual rate of at least 4%. The actual rate
credited is:
. the rate of interest charged on the policy loan less .50%
on amounts up to the Policy's "loan tier amount"; and
. the rate of interest charged on the policy loan less an
interest rate differential (currently 1.25%) on amounts
in excess of the "loan tier amount."
Manufacturers Life of America may change the interest rate
differential on 90 days' written notice to the policyowner.
The loan tier amount at any time is equal to 25% of (a) minus
(b) where (a) is the Policy's Cash Surrender Value at the
previous policy anniversary and (b) is the sum of the minimum
monthly premiums since issuance of the Policy to that date
(see Premium Provisions "What Limitations Apply To Premium
Amounts?"). The loan tier amount cannot be a negative number.
To illustrate the application of the loan tier amount, assume
a Policy with a Cash Surrender Value at the previous policy
anniversary of $10,000, the sum of the minimum monthly
premiums since issuance to the previous policy anniversary of
$6,000 and a Loan Account value of $8,000. The loan tier
amount is $1,000 [25% X ($10,000 - $6,000)]. If loan interest
is being charged at the fixed rate of 8%, $1,000 of the Loan
Account value will accrue interest at 7.5% and the remaining
$7,000 will accrue interest at 6.75%.
Loan Account Adjustments. When a loan is first taken out, and
at specified events thereafter, the value of the Loan Account
is adjusted. Whenever the Loan account is adjusted, the
difference between (i) the Loan Account before any adjustment
and (ii) the Modified Policy Debt at the time of adjustment,
is transferred between the Loan Account and the Investment
Accounts or the Guaranteed Interest Account. The amount
transferred to or from the Loan Account will be such that the
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<PAGE>
value of the Loan Account is equal to the Modified Policy Debt
after the adjustment.
The specified events which cause an adjustment to the Loan
Account are (i) a policy anniversary, (ii) a partial or full
loan repayment, (iii) a new loan being taken out, or (iv) when
an amount is needed to meet a monthly deduction. A loan
repayment may be implicit in that policy debt is effectively
repaid upon termination, that is upon death of the life
insured, surrender or lapse of the policy. In each of these
instances, the Loan Account will be adjusted with any excess
of the Loan Account over the Modified Policy Debt after the
repayment being included in the termination proceeds.
Except as noted below in the Loan Repayments section, amounts
transferred from the Loan Account will be allocated to the
Investment Accounts and the Guaranteed Interest Account in the
same proportion as the value in the corresponding "loan
sub-account" bears to the value of the Loan Account. A "loan
sub-account" exists for each Investment Account and for the
Guaranteed Interest Account. Amounts transferred to the Loan
Account are allocated to the appropriate loan sub-account to
reflect the account from which the transfer was made.
Loan Account Illustration. The operation of the Loan Account
may be illustrated by consideration of the Policy previously
described with a loan value of $5,000, a loan interest rate of
8%, and a maximum loan amount on a policy anniversary of
$4,815. For purposes of the illustration, assume that the loan
tier amount is zero. If a loan in the maximum amount of $4,815
is made, an amount equal to the Modified Policy Debt, $5,000,
is transferred to the Loan Account. At the next policy
anniversary the value of the Loan Account will have increased
to $5,337.50 ($5,000 X 1.0675) reflecting interest credited at
an effective annual rate of 6.75%. At that time the loan will
have accrued interest charges of $385 ($4,815 X .08) bringing
the Policy Debt to $5,200.
If the accrued interest charges are paid on the policy
anniversary, the Policy Debt will continue to be $4,815, and
the Modified Policy Debt, reflecting interest for the next
policy year and discounting the Policy Debt and such interest
at 4%, will be $5,000. An amount will be transferred from the
Loan Account to the Guaranteed Interest Account or the
Investment Accounts so that the Loan Account value will equal
the Modified Policy Debt.
Since the Loan Account value was $5,337.50, a transfer of
$337.50 will be required ($5,337.50 - $5,000).
If, however, the accrued interest charges of $385 are
borrowed, an amount will be transferred from the Investment
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<PAGE>
Accounts and the Guaranteed Interest Account so that the Loan
Account value will equal the Modified Policy Debt recomputed
at the policy anniversary. The new Modified Policy Debt is the
Policy Debt, $5,200, plus loan interest to be charged to the
next policy anniversary, $416 ($5,200 X .08), discounted at
4%, which results in a figure of $5,400. Since the value of
the Loan Account was $5,337.50, a transfer of $62.50 will be
required. This amount is equivalent to the 1.25% interest rate
differential on the $5,000 transferred to the Loan Account on
the previous policy anniversary.
Loan Repayments. Policy Debt may be repaid in whole or in part
at any time prior to the death of the life insured provided
the Policy is in force. When a repayment is made, the amount
is credited to the Loan Account and a transfer is made to the
Guaranteed Interest Account or the Investment Accounts so that
the Loan Account at that time equals the Modified Policy Debt.
Loan repayments will first be allocated to the Guaranteed
Interest Account until the associated loan sub-account is
reduced to zero. Any other amounts transferred from the Loan
Account will be allocated to the Guaranteed Interest Account
and each Investment Account in the same proportion as the
value in the corresponding loan sub-account bears to the value
of the Loan Account. Amounts paid to the Company not
specifically designated in writing as loan repayments will be
treated as premiums.
How May A Policyowner Obtain The Net Cash Surrender Value?
A Policy may be surrendered for its Net Cash Surrender Value
at any time while the life insured is living. The Net Cash
Surrender Value is equal to the Policy Value less any
surrender charges and outstanding monthly deductions due (the
"Cash Surrender Value") minus the value of the Loan Account.
The Net Cash Surrender Value will be determined at the end of
the Business Day on which Manufacturers Life of America
receives the Policy and a written request for surrender at its
Service Office. After a Policy is surrendered, the insurance
coverage and all other benefits under the Policy will
terminate. Surrender of a Policy within 15 years of issuance
or an increase in face amount will usually result in the
assessment by Manufacturers Life of America of surrender
charges. (See Charges "What Are The Surrender Charges?")
After a Policy has been in force for two policy years, the
policyowner may make a partial withdrawal of the Net Cash
Surrender Value. The minimum amount that may be withdrawn is
$500. The policyowner should specify the portion of the
withdrawal to be taken from each Investment Account and the
Guaranteed Interest Account. In the absence of instructions,
the withdrawal will be allocated among such accounts in the
same proportion as the Policy Value in each account bears to
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the Net Policy Value. No more than one partial withdrawal may
be made in any one policy month.
Like surrender of a Policy, a partial withdrawal made within
15 years following issuance of the Policy or a face amount
increase will result in the assessment of a portion of the
surrender charges to which the Policy is subject if the
withdrawal is in excess of the Withdrawal Tier Amount. The
Withdrawal Tier Amount is equal to 10% of the Net Cash
Surrender Value determined as of the previous policy
anniversary. In determining what, if any, portion of a partial
Net Cash Surrender Value withdrawal is in excess of the
Withdrawal Tier Amount, all previous partial Net Cash
Surrender Value withdrawals that have occurred in the current
policy year are included. The portion of the surrender charges
assessed will be based on the ratio of the amount of the
withdrawal which exceeds the Withdrawal Tier Amount to the Net
Cash Surrender Value of the Policy immediately prior to the
withdrawal. The surrender charges will be deducted from each
Investment Account and the Guaranteed Interest Account in the
same proportion as the amount of the withdrawal taken from
such account bears to the total amount of the withdrawal (see
Charges "What Are The Surrender Charges?"). If the amount in
the account is not sufficient to pay the portion of the
surrender charges allocated to that account, then the portion
of the withdrawal allocated to that account will be reduced so
that the withdrawal plus the portion of the surrender charges
allocated to that account equal the value of that account.
Units equal to the amount of the partial withdrawal taken, and
surrender charges deducted, from each Investment Account will
be cancelled based on the value of such units determined at
the end of the Business Day on which Manufacturers Life of
America receives a written request for withdrawal at its
Service Office.
If the Option 1 death benefit is in effect under a Policy from
which a partial withdrawal is made, the face amount of the
Policy will be reduced. If the death benefit is equal to the
face amount at the time of withdrawal, the face amount will be
reduced by the amount of the withdrawal plus the portion of
the surrender charges assessed. If the death benefit is based
upon the Policy Value times the applicable percentage set
forth under Insurance Benefit "What Death Benefit Options Are
Available?" above, the face amount will be reduced only to the
extent that the amount of the withdrawal plus the portion of
the surrender charges assessed exceeds the difference between
the death benefit and the face amount. Reductions in face
amount resulting from partial withdrawals will not incur any
surrender charges above the surrender charges applicable to
the withdrawal. When the face amount of a Policy is based on
one or more increases subsequent to issuance of the Policy, a
reduction resulting from a partial withdrawal will be applied
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<PAGE>
in the same manner as a requested decrease in face amount,
i.e., against the face amount provided by the most recent
increase, then against the next most recent increases
successively and finally against the initial face amount.
Charges
Charges under the Policies are assessed as (i) deductions from
premiums when made, (ii) surrender charges upon surrender,
partial withdrawals, decreases in face amount or termination
following default, (iii) monthly deductions from the Policy
Value, and (iv) risk charges assessed against Separate Account
assets. These charges are described below.
What Deductions Are Made From Premiums?
Manufacturers Life of America deducts a sales charge of 3% of
each premium payment. A deferred sales charge in the maximum
amount of 47% of premiums paid up to two Target Premiums is
deducted from the Policy Value upon certain transactions. See
"What Are The Surrender Charges?" below. These charges
compensate the Company for some of the expenses of selling and
distributing the Policies, including agents' commissions,
advertising, agent training and the printing of prospectuses
and sales literature.
The sales charges deducted in any policy year are not
specifically related to sales expenses incurred in that year.
Instead, the Company expects that the major portion of the
sales expenses attributable to a Policy will be incurred
during the first policy year, although the sales charge
deducted from premiums and any deferred sales charge may be
spread out over the period the Policy is in force.
Manufacturers Life of America anticipates that the aggregate
amounts received under the Policies for sales loading will be
insufficient to cover aggregate sales expenses. To the extent
that sales expenses exceed sales charges, Manufacturers Life
of America will pay the excess from its other assets or
surplus, including amounts derived from the mortality and
expense risks charge described below. A portion of the sales
charge and the deferred sales charge may be subject to refund
if the Policy is surrendered for its Net Cash Surrender Value
at any time during the first two years following issuance or
following an increase in face amount or if the increase is
cancelled during the two-year period following the increase.
See "What Are The Surrender Charges?" (Refund Of Excess Sales
Charges).
Manufacturers Life of America deducts a premium tax charge of
2% of each premium payment. State and local premium taxes
differ from state to state. The 2% rate, which cannot be
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<PAGE>
changed, is expected to be sufficient, on average, to pay
premium taxes where required.
What Are The Surrender Charges?
Manufacturers Life of America will assess surrender charges
upon surrender or lapse of a Policy, a partial withdrawal of
Policy Value in excess of the Withdrawal Tier Amount or a
requested decrease in face amount. The charges will be
assessed if any of the above transactions occurs within 15
years after issuance of the Policy or any increase in face
amount unless the charges have been previously deducted. There
are two surrender charges a deferred underwriting charge and
a deferred sales charge.
Deferred Underwriting Charge. The deferred underwriting charge
is a dollar amount for each $1,000 of face amount of insurance
in accordance with the following schedule:
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<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
Age: 0-20 21-40 41-50 51-60 61 & above
Charge Per $1,000: $2.00 $3.00 $4.00 $5.00 $6.00
</TABLE>
The charge per $1,000 will be determined on the basis of the
age of the life insured at issue or upon increase of the face
amount, as applicable. The deferred underwriting charge
applicable to each level of insurance coverage cannot exceed
$1,000. The amount of the charge remains level for five years.
Following the fifth year after issuance of the Policy or a
face amount increase, the charge applicable to the initial
face amount or increase will decrease each month by .83%, or
10% per year. After the monthly deduction is taken for the
last policy month preceding the end of the fifteenth year
after issuance or face amount increase, the charge will have
decreased to zero. The applicable percentage of the surrender
charges to which the Policy would otherwise be subject is
illustrated on an annual basis by the following table:
Transaction Occurs
After Monthly Deduction
Taken for Last Month Percent of
Preceding End of Year Surrender Charges
5 & below 100%
6 90%
7 80%
8 70%
9 60%
10 50%
11 40%
12 30%
13 20%
14 10%
15 & above 0%
The surrender charges begin to grade downward before the
beginning of the sixth year for issue ages above 69. For issue
ages 70, 71, 72, 73, and issue ages 74 to 80, the surrender
charges begin to grade downward at the beginning of the fifth,
fourth, third, second, and first years, respectively.
The deferred underwriting charge is designed to cover the
administrative expenses associated with underwriting and
policy issue, including the costs of processing applications,
conducting medical examinations, determining the life
insured's risk class and establishing policy records.
Manufacturers Life of America does not expect to recover from
the deferred underwriting charge any amount in excess of its
expenses associated with underwriting and policy issue.
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<PAGE>
Deferred Sales Charge. The maximum deferred sales charge is
equal to 47% of the premiums paid under the Policy up to two
Target Premiums described below. For life insureds over age 69
at issue or face amount increase, the applicable percentage of
premiums will be reduced in accordance with the following
table:
Applicable
Age Percentage of Premiums
70 45%
71 43%
72 41%
73 39%
74 37%
75 35%
76 34%
77 33%
78 32%
79 31%
80 30%
Like the deferred underwriting charge, the percentage deferred
sales charge applicable to the initial face amount or face
amount increase will remain level for five years (or less for
issue ages above 69) and following such period will decrease
.83% per month, or 10% per year, from the charge that would
otherwise apply. See chart under "Deferred Underwriting
Charge" above.
As noted above, the deferred sales charge may not exceed 47%
of two Target Premiums. The Target Premium for the initial
face amount is set forth in the Policy. A Target Premium will
be computed for each increase in face amount above the highest
face amount of coverage previously in effect, and the
policyowner will be advised of such Target Premium. Target
Premiums are determined on the basis of a target premium rate
and the face amount of insurance provided at issue or by the
increase. The applicable rate varies with the issue age and
sex (unless unisex rates are required by law) of the life
insured and, in the case of certain Policies issued in group
or sponsored arrangements providing for reduction in cost of
insurance charges (see "Are There Special Provisions For Group
Or Sponsored Arrangements?"), the amount of insurance
coverage. In order to determine the deferred sales charge
applicable to a face amount increase, Manufacturers Life of
America will treat a portion of the Policy Value on the date
of increase as a premium attributable to the increase. In
addition, a portion of each premium paid subsequent to the
increase will be attributed to the increase. In each case, the
portion attributable to the increase will be the ratio of the
guideline annual premium (described below) for the increase to
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<PAGE>
the sum of the guideline annual premiums for the initial face
amount and all increases including the requested increase.
Refund Of Excess Sales Charges. If a Policy is surrendered for
its Net Cash Surrender Value at any time during the first two
years following issuance or following an increase in face
amount or the face amount decreased during the second year
after issuance or after increase in face amount, Manufacturers
Life of America will refund that part of the total sales
charges deducted (the sum of the deferred sales charge and the
sales charge deducted from premiums) with respect to
"premiums" paid for the initial face amount or such increase
(including premiums allocated to the increase as described in
the preceding paragraph), whichever is applicable, which is in
excess of (i) the sum of 30% of the "premiums" paid up to one
guideline annual premium plus 10% of the "premiums" paid in
excess of one guideline annual premium up to two guideline
annual premiums and (ii) up to 9% of the "premiums" paid in
excess of two guideline annual premiums. Since Target Premiums
are always less than guideline annual premiums, with the
deferred sales charge structure described above, there will be
no refund with respect to "premiums" paid in excess of two
guideline annual premiums and these excess "premiums" will not
reduce the refund applicable to "premiums" paid up to two
guideline annual premiums.
A policyowner may also elect to cancel an increase in face
amount during the first two years following the increase and
have the deferred sales charge for the increase reduced by the
refund of any excess sales load attributable to the increase.
The guideline annual premium, which is set forth in the
Policy, is the level annual premium that would be payable for
the life of the Policy for a specific amount of coverage if
premiums were fixed as to both timing and amount and based on
the 1980 Commissioners Standard Ordinary Smoker/Nonsmoker
Mortality Tables, net investment earnings at an effective
annual rate of 5% and fees and charges as set forth in the
Policy. In determining the maximum sales charge allowable,
"premiums" will be attributed to the initial face amount and
each increase in the same manner as used in determining the
deferred sales charge applicable to the face amount and each
increase, and the guideline annual premium will be determined
separately for the initial face amount and each increase.
The operation of the maximum sales charge allowable is
illustrated by the following example. Assume that the
policyowner has paid $3,000 in premiums under a Policy with a
guideline annual premium of $2,000 and a Target Premium of
$1,500 and decides to surrender his or her Policy during the
second policy year. In the absence of the refund right, the
deferred sales charge would be $1,410 (47% of $3,000).
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<PAGE>
However, under the formula described above, the maximum sales
charge allowable is the sum of $600 (30% of $2,000) and $100
(10% of $1,000), or $700. Since a sales load of $90 (3% of
$3,000) was deducted from the premiums when received, and
therefore only $610 ($700 - $90) of the deferred sales charge
may be retained by the Company, a refund of $800 ($1,410 -
$610) will be payable to the policyowner. Since a deferred
sales charge is deducted in the event a Policy terminates for
failure to make the required payment following the Policy's
going into default, the refund right will apply if such
termination occurs during the two-year period following
issuance of the Policy or any increase in face amount. If the
Policy terminates during the two years after a face amount
increase, the refund will relate only to the sales charges
assessed against premiums attributable to the increase.
Charges On Partial Withdrawals. As noted above, both the
deferred sales charge and the deferred underwriting charge are
applicable in the event of a partial withdrawal of the Net
Cash Surrender Value in excess of the Withdrawal Tier Amount.
A portion of the surrender charges applicable to the initial
face amount and to each increase in face amount will be
deducted as a result of the withdrawal. The portion to be
deducted will be the same as the ratio of the amount of the
withdrawal to the Net Cash Surrender Value prior to the
withdrawal.
The charges will be deducted from the Policy Value, and the
amount so deducted will be allocated among the Investment
Accounts and the Guaranteed Interest Account in the same
proportion that the withdrawal is allocated among such
accounts. Whenever a portion of the surrender charges are
deducted as a result of a partial withdrawal, the Policy's
remaining surrender charges will be reduced by the amount of
the charges taken. The surrender charges not assessed as a
result of the 10% free withdrawal provision remain in effect
under the Policy and may be assessed upon surrender or lapse,
other partial withdrawals or a requested decrease in face
amount.
Charges On Decreases In Face Amount. As with partial
withdrawals, a portion of a Policy's surrender charges will be
deducted upon a decrease in or cancellation of face amount
requested by the policyowner. Since surrender charges are
determined separately for the initial face amount and each
face amount increase and since a decrease in face amount will
have a different impact on each level of insurance coverage,
the portion of the surrender charges to be deducted with
respect to each level of insurance coverage will be determined
separately. Such portion will be the same as the ratio of the
amount of the reduction in such coverage to the amount of such
coverage prior to the reduction. As noted under Insurance
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<PAGE>
Benefit "Can The Face Amount Of A Policy Be Changed?"
decreases are applied to the most recent increase first and
thereafter to the next most recent increases successively. The
charges will be deducted from the Policy Value, and the amount
so deducted will be allocated among the Investment Accounts
and the Guaranteed Interest Account in the same proportion as
the Policy Value in each bears to the Net Policy Value.
Whenever a portion of the surrender charges is deducted as a
result of a decrease in face amount, the Policy's remaining
surrender charges will be reduced by the amount of the charges
taken.
What Are The Monthly Deductions?
On the policy date and at the beginning of each policy month,
a deduction is due from the Policy Value to cover certain
charges in connection with the Policy. Monthly deductions due
prior to the effective date will be taken on the effective
date instead of the dates they were due. The charges consist
of (i) a monthly administration charge, (ii) a monthly charge
for the cost of insurance, and (iii) a monthly charge for any
supplementary benefits added to the Policy (see Other
Provisions "What Supplementary Benefits Are Available?").
The monthly deduction will be allocated among the Investment
Accounts and the Guaranteed Interest Account in the same
proportion as the Policy Value in each bears to the Net Policy
Value.
The monthly administration charge is $6.00. The charge is
designed to cover certain administrative expenses associated
with the Policy, including maintaining policy records,
collecting premiums and processing death claims, surrender and
withdrawal requests and various changes permitted under a
Policy. Manufacturers Life of America does not expect to
recover from the monthly administration charge any amount in
excess of its accumulated administrative expenses relating to
the Policies and the Separate Account. Even though
administrative expenses may increase, the Company guarantees
that it will not increase the amount of the monthly
administration charge.
The monthly charge for the cost of insurance is determined by
multiplying the applicable cost of insurance rate times the
net amount at risk at the beginning of each policy month. The
charge for the cost of insurance will reflect any extra
charges for additional ratings indicated in the Policy. The
cost of insurance rate is based on the life insured's age, sex
(unless unisex rates are required by law), risk class, the
duration of the insurance coverage and, in the case of certain
Policies issued in group or sponsored arrangements providing
for reduction in cost of insurance charges (see "Are There
Special Provisions For Group Or Sponsored Arrangements?"), the
<PAGE> - 59 -
<PAGE>
face amount of the Policy. See Other Matters Legal
Considerations. The rate is determined separately for the
initial face amount and for each increase in face amount. Cost
of insurance rates will generally increase with the life
insured's age.
The cost of insurance rates used by Manufacturers Life of
America reflect its expectations as to future mortality
experience. The rates may be changed from time to time on a
basis which does not unfairly discriminate within the class of
lives insured. In no event will the cost of insurance rate
exceed the guaranteed rates set forth in the Policy except to
the extent that an extra charge is imposed because of an
additional rating applicable to the life insured or if
simplified underwriting is granted in a group or sponsored
arrangement (see "Are There Special Provisions For Group Or
Sponsored Arrangements?"). The guaranteed rates are based on
the 1980 Commissioners Standard Ordinary Smoker/Nonsmoker
Mortality Tables.
The net amount at risk to which the cost of insurance rate is
applied is the difference between the death benefit, divided
by 1.0032737 (a factor which reduces the net amount at risk
for cost of insurance charge purposes by taking into account
assumed monthly earnings at an annual rate of 4%), and the
Policy Value. Because different cost of insurance rates may
apply to different levels of insurance coverage, the net
amount at risk will be calculated separately for each level of
insurance coverage. When the Option 1 death benefit is in
effect, for purposes of determining the net amount at risk
applicable to each level of insurance coverage, the Policy
Value is attributed first to the initial face amount and then,
if the Policy Value is greater than the initial face amount,
to each increase in face amount in the order made.
Because the calculation of the net amount at risk is different
under the death benefit options when more than one level of
insurance coverage is in effect, a change in the death benefit
option may result in a different net amount at risk for each
level of insurance coverage than would have occurred had the
death benefit option not been changed. Since the cost of
insurance is calculated separately for each level of insurance
coverage, any change in the net amount at risk for a level of
insurance coverage resulting from a change in the death
benefit option may affect the amount of the charge for the
cost of insurance. Partial withdrawals and decreases in face
amount will also affect the manner in which the net amount at
risk for each level of insurance coverage is calculated.
In group or sponsored arrangements where Manufacturers Life of
America issues Policies with a face amount of less than
$25,000 but not less than $10,000, Policies issued with a face
<PAGE> - 60 -
<PAGE>
amount of less than $25,000 may be subject to an additional
premium deduction equal to $1.00 per $1,000 face amount. This
amount is added to the cost of insurance and deducted monthly.
The amount so added will not cause the cost of insurance
deducted to exceed the guaranteed rates set forth in the
Policy.
Are There Special Provisions For Group Or Sponsored
Arrangements?
Where permitted by state insurance laws, Policies may be
purchased under group or sponsored arrangements, as well as on
an individual basis. As noted previously, the minimum face
amount and minimum change in face amount are reduced to
$10,000 and $5,000, respectively, for Policies issued pursuant
to such arrangements. A "group arrangement" includes a program
under which a trustee, employer or similar entity purchases
Policies covering a group of individuals on a group basis. In
California all participants of group arrangements will be
individually underwritten. A "sponsored arrangement" includes
a program under which an employer permits group solicitation
of its employees or an association permits group solicitation
of its members for the purchase of Policies on an individual
basis.
The sales charge, monthly deductions, surrender charges, and
other charges described above may be reduced for Policies
issued in connection with group or sponsored arrangements.
Such arrangements may include sales without withdrawal charges
and deductions to employees, officers, directors, agents,
immediate family members of the foregoing, and employees of
agents of Manufacturers Life and its subsidiaries.
Manufacturers Life of America will reduce the above charges in
accordance with its rules in effect as of the date an
application for a Policy is approved. To qualify for such a
reduction, a group or sponsored arrangement must satisfy
certain criteria as to, for example, size of the group,
expected number of participants and anticipated premium
payments from the group. Generally, the sales contacts and
effort, administrative costs and mortality cost per Policy
vary based on such factors as the size of the group or
sponsored arrangements, the purposes for which Policies are
purchased and certain characteristics of its members. The
amount of reduction and the criteria for qualification will
reflect the reduced sales effort and administrative costs
resulting from, and the different mortality experience
expected as a result of, sales to qualifying groups and
sponsored arrangements.
Manufacturers Life of America may modify from time to time, on
a uniform basis, both the amounts of reductions and the
criteria for qualification. Reductions in these charges will
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<PAGE>
not be unfairly discriminatory against any person, including
the affected policyowners and all other policyowners funded by
the Separate Account.
In addition, groups or persons purchasing under a sponsored
arrangement may apply for simplified underwriting. If
simplified underwriting is granted, the cost of insurance
charge may increase as a result of higher anticipated
mortality experience. In addition, groups or persons
purchasing under a sponsored arrangement may request increases
and decreases in face amount at any time after issue and
decreases in face amount at any time after an increase in face
amount. Increases in face amount requested by groups or
persons purchasing under a sponsored arrangement are not
subject to a minimum amount. Decreases in face amount may
involve imposition of a surrender charge.
Are There Special Provisions For Exchanges?
Manufacturers Life of America will permit owners of certain
fixed benefit life insurance policies issued either by the
Company or Manufacturers Life to exchange their policies for
the Policies described in this prospectus. A portion of the
cash values transferred from such policies will be credited to
the Policies without deduction of the 3% sales charge.
Moreover, surrender charges under the policies being exchanged
or the Policies issued in exchange therefor may be reduced or
eliminated. Policy loans made under policies being exchanged
may be carried over to the new Policies without repayment at
the time of exchange. Policyowners considering an exchange
should consult their tax advisers as to the tax consequences
of an exchange.
Manufacturers Life of America has obtained an order from the
Securities and Exchange Commission dated November 28, 1990
pursuant to which holders of Manufacturers Life of America's
scheduled premium variable life ("Director 2000") insurance
policies may elect to exchange those policies for the Policies
described in this prospectus (the "Exchange Offer").
The terms and conditions under which Director 2000
policyowners may exchange their policies for the Policies
differ from the terms and conditions set forth in this
prospectus and are available only to Director 2000
policyowners who accept the Exchange Offer.
Those Director 2000 policyowners who accept the Exchange Offer
will be able to exchange their existing policies for Policies
of like face amount without any new evidence of insurability.
No direct or deferred sales charge will be imposed on the cash
values rolled over into the Policy. No deferred sales charges
or underwriting charges will be imposed on surrenders of
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Policies acquired through this Exchange Offer except in
connection with premium payments attributable to an increase
in face amount. Increases in the face amount of a Policy
issued pursuant to the Exchange Offer will be permitted one
month after issuance. In addition, a Policy may be issued with
a face amount less than $25,000 if issued pursuant to the
Exchange Offer.
What Are The Risk Charges Assessed Against Separate Account
Assets?
Manufacturers Life of America makes a daily charge to the
Separate Account for the mortality and expense risks it
assumes under the Policies. This charge is made each Business
Day at an annual rate of .65% of the value of the Separate
Account's assets. The mortality risk assumed is that lives
insured may live for a shorter period of time than the Company
estimated. The expense risk assumed is that expenses incurred
in issuing and administering the Policies will be greater than
the Company estimated. Manufacturers Life of America will
realize a gain from this charge to the extent it is not needed
to provide benefits and pay expenses under the Policies.
Are There Other Relevant Charges?
Currently, Manufacturers Life of America makes no charge
against the Separate Account for federal, state or local taxes
that may be attributable to the Separate Account or to the
operations of the Company with respect to the Policies.
However, if Manufacturers Life of America incurs any such
taxes, it may make a charge or establish a provision for those
taxes.
Charges will be imposed on certain transfers of Policy Values,
including a $15 charge for each Asset Allocation Balancer
transfer and a $5 charge for each Dollar Cost Averaging
transfer when Policy Value does not exceed $15,000. See Policy
Values "Transfers Of Policy Value."
<REDLINE>
The Separate Account purchases shares of the Portfolios at net
asset value. The net asset value of those shares reflects:
For the Manulife Funds:
(i) an investment management fee equivalent to an
annual rate of .50% of the value of the average
daily net assets of the Emerging Growth Equity
Fund, Common Stock Fund, Real Estate Securities
Fund, Balanced Assets Fund, Capital Growth Bond
Fund and Money-Market Fund;
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(ii) an investment management fee equivalent to an
annual rate of (a) .85% of the value of the
first $100 million of average daily net assets
and (b) .70% of the value of the average daily
net assets over $100 million of each of the
International Fund and the Pacific Rim Emerging
Markets Fund;
(iii) an investment management fee equivalent to an
annual rate of .25% of the average of daily net
assets of the Equity Index Fund,
(iv) expenses of up to .50% and .65% per annum
assessed against the assets of the
International Fund and the Pacific Rim Emerging
Markets Fund, respectively; and
(v) expenses of up to .15% per annum assessed
against the assets of the Equity Index Fund;
and
(vi) other expenses already deducted from the assets
of the Manulife Funds.
For the NASL Trusts:
(i) investment management fee equivalent to an
annual rate of .800% of the value of the
average daily net assets of the Value Equity
Trust;
(ii) investment management fee equivalent to an
annual rate of .650% of the value of the
average daily net assets of the U.S. Government
Securities Trust;
(iii) investment management fee equivalent to an
annual rate of .750% of the value of the
average daily net assets of the Growth and
Income Trust;
(iv) investment management fee equivalent to an
annual rate of .750% of the value of the
average daily net assets of the Equity Trust;
(v) investment management fee equivalent to an
annual rate of .750% of the average daily net
assets of the Conservative Asset Allocation
Trust;
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(vi) investment management fee equivalent to an
annual rate of .750% of the average daily net
assets of the Moderate Asset Allocation Trust;
(vii) investment management fee equivalent to an
annual rate of .750% of the average daily net
assets of the Conservative Asset Allocation
Trust; and
(viii) expenses of up to .50% per annum assessed
against the assets of each of the NASL Trusts;
and
(ix) other expenses already deducted from the assets
of the NASL Trusts.
Detailed information concerning such fees and expenses is set
forth under the caption "Management Of The Funds" in the
Prospectus for the Manulife Series Fund that accompanies this
Prospectus and under the caption "Management of The Trust" in
the Prospectus for the NASL Series Trust that accompanies this
Prospectus.
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The General Account
By virtue of exclusionary provisions, interests in the general
account of Manufacturers Life of America have not been
registered under the Securities Act of 1933 and the general
account has not been registered as an investment company under
the Investment Company Act of 1940. Accordingly, neither the
general account nor any interests therein are subject to the
provisions of these acts, and as a result the staff of the
Securities and Exchange Commission has not reviewed the
disclosures in this prospectus relating to the general
account. Disclosures regarding the general account may,
however, be subject to certain generally applicable provisions
of the federal securities laws relating to the accuracy and
completeness of statements made in a prospectus.
What Is The General Account?
The general account of Manufacturers Life of America consists
of all assets owned by the Company other than those in the
Separate Account and other separate accounts of the Company.
Subject to applicable law, Manufacturers Life of America has
sole discretion over the investment of the assets of the
general account.
A policyowner may elect to allocate net premiums to the
Guaranteed Interest Account or to transfer all or a portion of
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the Policy Value to the Guaranteed Interest Account from the
Investment Accounts. Manufacturers Life of America will hold
the reserves required for any portion of the Policy Value
allocated to the Guaranteed Interest Account in its general
account. However, an allocation of Policy Value to the
Guaranteed Interest Account does not entitle the policyowner
to share in the investment experience of the general account.
Instead, Manufacturers Life of America guarantees that the
Policy Value in the Guaranteed Interest Account will accrue
interest daily at an effective annual rate of at least 4%,
without regard to the actual investment experience of the
general account. Consequently, if a policyowner pays the
planned premiums, allocates all net premiums only to the
general account and makes no transfers, partial withdrawals,
or policy loans, the minimum amount and duration of his or her
death benefit will be determinable and guaranteed. Transfers
from the Guaranteed Interest Account to the Investment
Accounts are subject to restrictions (see Policy Values
"What Is The Policy Value And How Is It Determined?").
The Policy Value in the Guaranteed Interest Account is equal
to the portion of the net premiums allocated to it, plus any
amounts transferred to it and interest credited to it minus
any charges deducted from it or partial withdrawals or amounts
transferred from it. Manufacturers Life of America guarantees
that the interest credited to the Policy Value in the
Guaranteed Interest Account will not be less than an effective
annual rate of 4%. The Company may, at its sole discretion,
credit a higher rate of interest, although it is not obligated
to do so. The policyowner assumes the risk that interest
credited may not exceed the guaranteed minimum rate of 4% per
year.
Other Provisions
What Supplementary Benefits Are Available?
Subject to certain requirements, one or more supplementary
benefits may be added to a Policy, including those providing
term insurance for various persons, guaranteeing insurability,
providing accidental death coverage, waiving monthly
deductions upon disability, guaranteeing the Policy Value and,
in the case of corporate-owned Policies, permitting a change
of the life insured. The guarantee of Policy Value is a
supplementary benefit which guarantees that at the life
insured's age 65 the Policy Value will at least equal the
value that would have accumulated if all net premiums had been
allocated to the Guaranteed Interest Account with interest
credited at an effective annual rate of 5.5% and maximum
charges for cost of insurance and supplementary benefits,
where appropriate. This supplementary benefit must be made a
part of the Policy at issue, and the minimum premium
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requirement of the Policy must be satisfied at all times for
the guarantee to remain in effect. The cost of the benefit for
each $1,000 of face amount ranges from 1 cent to 4 cents per
month, depending on the current age of the life insured. More
detailed information concerning this and other supplementary
benefits may be obtained from an authorized agent of the
Company. The cost of any supplementary benefits will be
deducted as part of the monthly deduction. See Charges "What
Are The Monthly Deductions?"
Under What Circumstances May Fund Shares Be Substituted?
Although Manufacturers Life of America believes it to be
highly unlikely, it is possible that in the judgment of its
management, one or more of the Funds may become unsuitable for
investment by the Separate Account because of a change in
investment policy or a change in the applicable laws or
regulations, because the shares are no longer available for
investment, or for some other reason. In that event,
Manufacturers Life of America may seek to substitute the
shares of another Fund or of an entirely different mutual
fund. Before this can be done, the approval of the S.E.C. and
one or more state insurance departments may be required.
Manufacturers Life of America also reserves the right to
combine other separate accounts with the Separate Account, to
establish additional sub-accounts within the Separate Account,
to operate the Separate Account as a management investment
company or other form permitted by law, and to de-register the
Separate Account under the 1940 Act. Any such change would be
made only if permissible under applicable federal and state
law.
The investment objective of the Separate Account will not be
changed materially without the approval of the Insurance
Commissioner of the Commonwealth of Pennsylvania. Policyowners
will be advised of any such change at the time it is made.
What Are The Other General Policy Provisions?
Beneficiary. One or more beneficiaries of the Policy may be
appointed by the policyowner by naming them in the
application. Beneficiaries may be appointed in three classes
primary, secondary and final. There after the beneficiary may
be changed by the policyowner during the life insured's
lifetime by giving written notice to Manufacturers Life of
America in a form satisfactory to it unless an irrevocable
designation has been elected. If the life insured dies and
there is no surviving beneficiary, the policyowner, or the
policyowner's estate if the policyowner is the life insured,
will be the beneficiary. If a beneficiary dies before the
seventh day after the death of the life insured, the Company
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will pay the insurance benefit as if the beneficiary had died
before the life insured.
Incontestability. Manufacturers Life of America will not
contest the validity of a Policy after it has been in force
during the life insured's lifetime for two years from the
policy date. It will not contest the validity of an increase
in face amount or the addition of a supplementary benefit
after such increase or addition has been in force during the
life insured's lifetime for two years. If a Policy has been
reinstated and been in force for less than two years from the
reinstatement date, the Company can contest any
misrepresentation of a fact material to the reinstatement.
Misstatement Of Age Or Sex. If the life insured's stated age
or sex or both in the Policy are incorrect, Manufacturers Life
of America will change the face amount of insurance so that
the death benefit will be that which the most recent monthly
charge for the cost of insurance would have bought for the
correct age and sex.
Suicide Exclusion. If the life insured, whether sane or
insane, dies by suicide within one year from the policy date,
Manufacturers Life of America will pay only the premiums paid
less any partial withdrawals of the Net Cash Surrender Value
and any amount in the Loan Account. If the life insured should
die by suicide within one year after a face amount increase,
the death benefit for the increase will be limited to the
monthly deduction for the increase.
Assignment. Manufacturers Life of America will not be bound by
an assignment until it receives a copy of it at its Service
Office. Manufacturers Life of America assumes no
responsibility for the validity or effects of any assignment.
When Are Proceeds Paid?
As long as the Policy is in force, Manufacturers Life of
America will ordinarily pay any policy loans, partial
withdrawals, Net Cash Surrender Value or any insurance benefit
within seven days after receipt at the Manufacturers Life of
America Service Office of all the documents required for such
a payment. The Company may delay the payment of any policy
loans, partial withdrawals, Net Cash Surrender Value or the
portion of any insurance benefit that depends on Investment
Account values for up to six months if such payments are based
on values which do not depend on the investment performance of
the sub-accounts; otherwise for any period during which the
New York Stock Exchange is closed for trading (except for
normal holiday closings) or when the Securities and Exchange
Commission has determined that a state of emergency exists
which may make such payment impracticable.
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What Reports Will Be Sent To Policyowners?
Within 30 days after each policy anniversary, Manufacturers
Life of America will send the policyowner a statement showing,
among other things, the amount of the death benefit, the
Policy Value and its allocation among the Investment Accounts,
the Guaranteed Interest Account and the Loan Account, the
value of the units in each Investment Account to which the
Policy Value is allocated, any Loan Account balance and any
interest charged since the last report, the premiums paid and
policy transactions made during the period since the last
statement and any other information required by law.
Each policyowner will also be sent an annual and a semi-annual
report for the Series Fund which will include a list of the
securities held in each Fund as required by the 1940 Act.
Other Matters
What Is The Federal Tax Treatment Of Policies?
The following summary provides a general description of the
federal income tax considerations associated with the Policy
and does not purport to be complete or to cover all
situations. This discussion is not intended as tax advice.
Counsel or other competent tax advisers should be consulted
for more complete information. This discussion is based upon
the Company's understanding of the present federal income tax
laws as they are currently interpreted by the Internal Revenue
Service (the "Service"). No representation is made as to the
likelihood of continuation of the present federal income tax
laws nor of the current interpretations by the Service. WE DO
NOT MAKE ANY GUARANTEE REGARDING THE TAX STATUS OF ANY POLICY
OR ANY TRANSACTION REGARDING THE POLICIES.
Tax Status Of The Policy
Section 7702 of the Internal Revenue Code of 1986, as amended
(the "Code") sets forth a definition of a life insurance
contract for federal tax purposes. The Secretary of Treasury
(the "Treasury") is authorized to prescribe regulations
implementing Section 7702. However, while proposed regulations
and other interim guidance have been issued, final regulations
have not been adopted and guidance as to how Section 7702 is
to be applied is limited. If a Policy were determined not to
be a life insurance contract for purposes of Section 7702,
such Policy would not provide the tax advantages normally
provided by a life insurance policy.
With respect to a Policy issued on the basis of a standard
rate class, the Company believes (largely in reliance on IRS
Notice 88-128 and the proposed mortality charge regulations
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under Section 7702, issued on July 5, 1991) that such a Policy
should meet the Section 7702 definition of a life insurance
contract.
With respect to a Policy that is issued on a substandard basis
(i.e., a premium class involving higher-than-standard
mortality risk), there is less guidance, in particular as to
how mortality and other expense requirements of Section 7702
are to be applied in determining whether such a Policy meets
the Section 7702 definition of a life insurance contract.
Thus, it is not clear whether or not such a Policy would
satisfy Section 7702, particularly if the policyowner pays the
full amount of premiums permitted under the Policy.
If it is subsequently determined that a Policy does not
satisfy Section 7702, the Company may take whatever steps are
appropriate and reasonable to attempt to cause such a Policy
to comply with Section 7702. For these reasons, the Company
reserves the right to restrict Policy transactions as
necessary to attempt to qualify it as a life insurance
contract under Section 7702.
Section 817(h) of the Code requires that the investments of
the Separate Account be "adequately diversified" in accordance
with Treasury regulations in order for the Policy to qualify
as a life insurance contract under Section 7702 of the Code
(discussed above). The Separate Account, through the Series
Fund, intends to comply with the diversification requirements
prescribed in Treas. Reg. Sec.1.817-5, which affect how the
Series Fund's assets are to be invested. The Company believes
that the Separate Account will thus meet the diversification
requirement, and the Company will monitor continued compliance
with the requirement.
In certain circumstances, owners of variable life insurance
Policies may be considered the owners, for federal income tax
purposes, of the assets of the separate account used to
support their Policies. In those circumstances, income and
gains from the separate account assets would be includible in
the variable policyowner's gross income. The IRS has stated in
published rulings that a variable policyowner will be
considered the owner of separate account assets if the
policyowner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the
assets. The Treasury Department has also announced, in
connection with the issuance of regulations concerning
diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor
control of the investments of a segregated asset account may
cause the investor (i.e., the policyowner), rather than the
insurance company, to be treated as the owner of the assets in
the account." This announcement also stated that guidance
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would be issued by way of regulations or rulings on the
"extent to which policyowners may direct their investments to
particular subaccounts without being treated as owners of the
underlying assets." As of the date of this Prospectus, no such
guidance has been issued.
The ownership rights under the Policy are similar to, but
different in certain respects from, those described by the IRS
in rulings in which it was determined that policyowners were
not owners of separate account assets. For example, the owner
has additional flexibility in allocating premium payments and
Policy Values. These differences could result in an owner
being treated as the owner of a pro rata portion of the assets
of the Separate Account. In addition, the Company does not
know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has
stated it expects to issue. The Company therefore reserves the
right to modify the Policy as necessary to attempt to prevent
an owner from being considered the owner of a pro rata share
of the assets of the Separate Account.
The following discussion assumes that the Policy will qualify
as a life insurance contract for federal income tax purposes.
What Is The Tax Treatment Of Policy Benefits?
In General. The Company believes that the proceeds and cash
value increases of a Policy should be treated in a manner
consistent with a fixed-benefit life insurance policy for
federal income tax purposes. Thus, the death benefit under the
Policy should be excludable from the gross income of the
beneficiary under Section 101(a)(1) of the Code.
Depending on the circumstances, the exchange of a Policy, a
change in the Policy's death benefit option, a Policy loan, a
partial withdrawal, a surrender, a change in ownership, a
change of insured, the addition of an accelerated death
benefit rider, or an assignment of the Policy may have federal
income tax consequences. In addition, federal, state and local
transfer, and other tax consequences of ownership or receipt
of Policy proceeds depend on the circumstances of each
policyowner or beneficiary.
Generally, the policyowner will not be deemed to be in
constructive receipt of the Policy Value, including increments
thereof, until there is a distribution. The tax consequences
of distributions from, and loans taken from or secured by, a
Policy depend on whether the Policy is classified as a
"Modified Endowment Contract." Upon a complete surrender or
lapse of a Policy or when benefits are paid at a Policy's
maturity date, if the amount received plus the amount of
indebtedness exceeds the total investment in the Policy, the
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excess will generally be treated as ordinary income subject to
tax, regardless of whether the Policy is or is not a Modified
Endowment Contract.
Modified Endowment Contracts. Section 7702A establishes a
class of life insurance contracts designated as "Modified
Endowment Contracts," which applies to Policies entered into
or materially changed after June 20, 1988.
Because of the Policy's flexibility, classification as a
Modified Endowment Contract will depend on the individual
circumstances of each Policy. In general, a Policy will be a
Modified Endowment Contract if the accumulated premiums paid
at any time during the first seven policy years exceed the sum
of the net level premiums which would have been paid on or
before such time if the Policy provided for paid-up future
benefits after the payment of seven level annual premiums. The
determination of whether a Policy will be a Modified Endowment
Contract after a material change generally depends upon the
relationship of the death benefit and Policy Value at the time
of such change and the additional premiums paid in the seven
years following the material change. If a premium is credited
or transaction conducted which would cause the Policy to
become a Modified Endowment Contract, the Company will notify
the policyowner that unless a refund of the excess premium is
requested by the policyowner within 45 days of the policy
anniversary next occurring, thereafter the Policy will become
a Modified Endowment Contract.
The rules relating to whether a Policy will be treated as a
Modified Endowment Contract are extremely complex and cannot
be adequately described in the limited confines of this
summary. Therefore, a current or prospective policyowner
should consult with a competent adviser to determine whether a
transaction will cause the Policy to be treated as a Modified
Endowment Contract.
Distributions From Policies Classified As Modified Endowment
Contracts. Policies classified as Modified Endowment Contracts
will be subject to the following tax rules: First, all partial
withdrawals from such a Policy are treated as ordinary income
subject to tax up to the amount equal to the excess (if any)
of the Policy Value immediately before the distribution over
the investment in the Policy (described below) at such time.
Second, loans taken from or secured by such a Policy are
treated as partial withdrawals from the Policy and taxed
accordingly. Past-due loan interest that is added to the loan
amount is treated as a loan. Third, a 10% additional income
tax is imposed on the portion of any distribution (including
distributions upon surrender) from, or loan taken from or
secured by, such a Policy that is included in income except
where the distribution or loan is made on or after the
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policyowner attains age 59 1/2, is attributable to the
policyowner's becoming disabled, or is part of a series of
substantially equal periodic payments for the life (or life
expectancy) of the policyowner or the joint lives (or joint
life expectancies) of the policyowner and the policyowner's
beneficiary.
Distributions From Policies Not Classified As Modified
Endowment Contracts. A distribution from a Policy that is not
a Modified Endowment Contract is generally treated as a
tax-free recovery by the policyowner of the investment in the
Policy (described below) to the extent of such investment in
the Policy, and as a distribution of taxable income only to
the extent the distribution exceeds the investment in the
Policy. An exception to this general rule occurs in the case
of a decrease in the Policy's death benefit or any other
change that reduces benefits under the Policy in the first 15
years after the Policy is issued and that results in a cash
distribution to the policyowner in order for the Policy to
continue complying with the Section 7702 definitional limits.
Such a cash distribution will be taxed in whole or in part as
ordinary income (to the extent of any gain in the Policy)
under rules prescribed in Section 7702.
Loans from, or secured by, a Policy that is not a Modified
Endowment Contract are not treated as distributions. Instead,
such loans are treated as indebtedness of the policyowner.
Select Loans may, however, be treated as a distribution.
Finally, neither distributions (including distributions upon
surrender) nor loans from, or secured by, a Policy that is not
a Modified Endowment Contract are subject to the 10%
additional tax.
Policy Loan Interest. Generally, personal interest paid on any
loan under a Policy which is owned by an individual is not
deductible. In addition, interest on any loan under a Policy
owned by a taxpayer and covering the life of any individual
who is an officer or employee of or is financially interested
in the business carried on by that taxpayer will not be tax
deductible to the extent the aggregate amount of such loans
with respect to contracts covering such individual exceeds
$50,000. The deduction of interest on Policy loans may also be
subject to other restrictions under Section 264 of the Code.
Investment In The Policy. Investment in the Policy means (i)
the aggregate amount of any premiums or other consideration
paid for a Policy, minus (ii) the aggregate amount received
under the Policy which has been excluded from gross income of
the policyowner (except that the amount of any loan from, or
secured by, a Policy that is a Modified Endowment Contract, to
the extent such amount has been excluded from gross income,
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will be disregarded), plus (iii) the amount of any loan from,
or secured by, a Policy that is a Modified Endowment Contract
to the extent that such amount has been included in the gross
income of the policyowner.
Multiple Policies. All Modified Endowment Contracts that are
issued by the Company (or its affiliates) to the same
policyowner during any calendar year are treated as one
Modified Endowment Contract for purposes of determining the
amount includible in the gross income under Section 72(e) of
the Code.
What Are The Company's Tax Considerations?
As a result of the Omnibus Budget Reconciliation Act of 1990,
insurance companies are generally required to capitalize and
amortize certain policy acquisition expenses over a 10-year
period rather than currently deducting such expenses. This
treatment applies to the deferred acquisition expenses of a
Policy and results in a significantly higher corporate income
tax liability for the Company.
At the present time, the Company makes no charge to the
Separate Account for any federal, state or local taxes that
the Company incurs that may be attributable to such Account or
to the Policies. The Company, however, reserves the right in
the future to make a charge for any such tax or other economic
burden resulting from the application of the tax laws that it
determines to be properly attributable to the Separate Account
or to the Policies.
Who Sells The Policies And What Are The Sales Commissions?
ManEquity, Inc., an indirect wholly-owned subsidiary of
Manufacturers Life, will act as the principal underwriter of,
and continuously offer, the Policies pursuant to a
Distribution Agreement with Manufacturers Life of America.
ManEquity, Inc. is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers. The Policies will
be sold by registered representatives of either ManEquity,
Inc. or other broker-dealers having distribution agreements
with ManEquity, Inc. who are also authorized by state
insurance departments to do so. A registered representative
will receive first-year commissions not to exceed 50% of
premiums paid up to the "target commissionable premium,"
commissions of 3% of premiums in excess thereof and, on and
after the third anniversary, 0.15% of the Policy Value per
annum. In addition, representatives may be eligible for
bonuses of up to 90% of first-year commissions.
Representatives who meet certain productivity standards with
regard to the sale of the Policies and certain other policies
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issued by Manufacturers Life of America or Manufacturers Life
will be eligible for additional compensation.
What Responsibilities Has Manufacturers Life Assumed?
Manufacturers Life has entered into an agreement with
ManEquity, Inc. pursuant to which Manufacturers Life, on
behalf of ManEquity, Inc., will pay the sales commissions in
respect of the Policies and certain other policies issued by
Manufacturers Life of America, prepare and maintain all books
and records required to be prepared and maintained by
ManEquity, Inc. with respect to the Policies and such other
policies, and send all confirmations required to be sent by
ManEquity, Inc. with respect to the Policies and such other
policies. ManEquity, Inc. will promptly reimburse
Manufacturers Life for all sales commissions paid by
Manufacturers Life and will pay Manufacturers Life for its
other services under the agreement in such amounts and at such
times as agreed to by the parties.
Manufacturers Life has also entered into a Service Agreement
with Manufacturers Life of America pursuant to which
Manufacturers Life will provide to Manufacturers Life of
America in Toronto, Ontario, Canada all issue, administrative,
general services and recordkeeping functions on behalf of
Manufacturers Life of America with respect to all of its
insurance policies including the Policies.
Finally, Manufacturers Life has entered into a Stoploss
Reinsurance Agreement with Manufacturers Life of America under
which Manufacturers Life reinsures all aggregate claims in
excess of 110% of the expected claims for all Flexible Premium
Variable Life Insurance Policies. Under the agreement
Manufacturers Life will automatically reinsure the risk for
any one life up to a maximum of $7,500,000, except in the case
of aviation risks where the maximum will be $5,000,000.
However, Manufacturers Life may also consider reinsuring any
non-aviation risk in excess of $7,500,000 and any aviation
risk in excess of $5,000,000.
What Are The Voting Rights?
<REDLINE>
As stated above, all of the assets held in the sub-accounts of
the Separate Account will be invested in shares of a
particular Portfolio of Manulife Series Fund or NASL Series
Trust. Manufacturers Life of America is the legal owner of
those shares and as such has the right to vote upon certain
matters that are required by the 1940 Act to be approved or
ratified by the shareholders of a mutual fund and to vote upon
any other matters that may be voted upon at a shareholders'
meeting. However, Manufacturers Life of America will vote
shares held in the sub-accounts in accordance with
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instructions received from policyowners having an interest in
such sub-accounts. Shares held in each sub-account for which
no timely instructions from policyowners are received,
including shares not attributable to Policies, will be voted
by Manufacturers Life of America in the same proportion as
those shares in that sub-account for which instructions are
received. Should the applicable federal securities laws or
regulations change so as to permit Manufacturers Life of
America to vote shares held in the Separate Account in its own
right, it may elect to do so.
The number of shares in each sub-account for which
instructions may be given by a policyowner is determined by
dividing the portion of the Policy Value derived from
participation in that sub-account, if any, by the value of one
share of the corresponding Manulife Fund or NASL Trust. The
number will be determined as of a date chosen by Manufacturers
Life of America, but not more than 90 days before the
shareholders' meeting. Fractional votes are counted. Voting
instructions will be solicited in writing at least 14 days
prior to the meeting.
Manufacturers Life of America may, if required by state
insurance officials, disregard voting instructions if such
instructions would require shares to be voted so as to cause a
change in the sub-classification or investment policies of one
or more of the Portfolios, or to approve or disapprove an
investment management contract. In addition, Manufacturers
Life of America itself may disregard voting instructions that
would require changes in the investment policies or investment
adviser, provided that Manufacturers Life of America
reasonably disapproves such changes in accordance with
applicable federal regulations. If Manufacturers Life of
America does disregard voting instructions, it will advise
policyowners of that action and its reasons for such action in
the next communication to policyowners.
</REDLINE>
Who Are The Directors And Officers Of Manufacturers Life of
America?
The directors and executive officers of Manufacturers Life of
America, together with their principal occupations during the
past five years, are as follows:
<PAGE> - 76 -
<PAGE>
<TABLE>
<CAPTION>
Position With
Manufacturers Life
Name of America Principal Occupation
<S> <C> <C>
Sandra M. Cotter Director Attorney 1989-present, Dykema
Gossett
Leonard V. Day, Jr. Director General Manager, Philadelphia
Branch 1970-present, The
Manufacturers Life Insurance
Company
Donald A. Guloien President and Director Senior Vice President, Business
Development 1994-present, The
Manufacturers Life Insurance
Company; Vice President, U.S.
Individual Business 1990-1994,
The Manufacturers Life Insurance
Company
Stephen C. Nesbitt Secretary, General Legal Vice President 1990-present,
Counsel and Director The Manufacturers Life Insurance
Company
Joseph J. Pietroski Director Senior Vice President, General
Counsel and Corporate Secretary
1988-present, The Manufacturers
Life Insurance Company
</TABLE>
<PAGE> - 77 -
<PAGE>
<TABLE>
<CAPTION>
Position With
Manufacturers Life
Name of America Principal Occupation
<S> <C> <C>
John D. Richardson Chairman and Director Senior Vice President and General
Manager, U.S. Operations
1995-present, The Manufacturers
Life Insurance Company; Senior
Vice President and General
Manager, Canadian Operations
1992-1994, The Manufacturers Life
Insurance Company; Senior Vice
President, Financial Services
1992, The Manufacturers Life
Insurance Company; Executive Vice
Chairman and CFO 1989-1991,
Canada Trust
Diane M. Schwartz Director Senior Vice President,
International Operations
1992-present, The Manufacturers
Life Insurance Company; Senior
Vice President and General
Manager, U.S. Operations
1988-1992, The Manufacturers Life
Insurance Company
John R. Ostler Vice President, Chief Financial Vice President 1992-
Actuary and Treasurer present, The Manufacturers Life
Insurance Company; Vice President,
Insurance Products 1990-1992,
The Manufacturers Life Insurance
Company
</TABLE>
<PAGE> - 78 -
<PAGE>
<TABLE>
<CAPTION>
Position With
Manufacturers Life
Name of America Principal Occupation
<S> <C> <C>
Douglas H. Myers Vice President, Assistant Vice President and
Finance and Compliance Controller, U.S. Operations 1988-
Controller present, The Manufacturers Life
Insurance Company
</TABLE>
What State Regulations Apply?
Manufacturers Life of America is subject to regulation and
supervision by the Michigan Department of Insurance, which
periodically examines its financial condition and operations.
It is also subject to the insurance laws and regulations of
all jurisdictions in which it is authorized to do business.
The Policies have been filed with insurance officials, and
meet all standards set by law, in each jurisdiction where they
are sold.
Manufacturers Life of America is required to submit annual
statements of its operations, including financial statements,
to the insurance departments of the various jurisdictions in
which it does business for the purposes of determining
solvency and compliance with local insurance laws and
regulations.
Is There Any Litigation Pending?
No litigation is pending that would have a material effect
upon the Separate Account or the Series Fund.
Where Can Further Information Be Found?
A registration statement under the Securities Act of 1933 has
been filed with the S.E.C. relating to the offering described
in this prospectus. This prospectus does not include all the
information set forth in the registration statement. The
omitted information may be obtained from the S.E.C.'s
principal office in Washington, D.C. upon payment of the
prescribed fee.
For further information you may also contact Manufacturers
Life of America's Service Office, the address and telephone
number of which are on the first page of this prospectus.
<PAGE> - 79 -
<PAGE>
Legal Considerations
On July 6, 1983, the Supreme Court of The United States held
in Arizona Governing Committee v. Norris that certain annuity
benefits provided by employers' retirement and fringe benefit
programs may not, under Title VII of the Civil Rights Act of
1964, vary between men and women. Unless requested by the
applicant, the Policy which will be issued by Manufacturers
Life of America will be based on actuarial tables which
distinguish between men and women and thus provide different
benefits to men and women of the same age. Accordingly,
employers and employee organizations should consider, in
consultation with legal counsel, the effect of Norris or any
other applicable law on any employment-related insurance
benefit program before purchasing a Policy. If requested by
the applicant, Manufacturers Life of America may offer the
Policy with provisions based on actuarial tables that do not
differentiate on the basis of sex to such prospective
purchasers in states where the unisex version of the Policy
has been approved.
The State of Montana currently prohibits the use of actuarial
tables that distinguish between men and women in determining
premiums and policy benefits for policies issued on the life
of any of its residents. Consequently, a Policy will be issued
pursuant to the offer contained in this prospectus to a
Montana resident having premiums and benefits which are based
on actuarial tables that do not differentiate on the basis of
sex.
Legal Matters
The legal validity of the policies has been passed on by
Stephen C. Nesbitt, Esq., Secretary and General Counsel of
Manufacturers Life of America. Jones & Blouch L.L.P.,
Washington D.C., has passed on certain matters relating to the
federal securities laws.
Experts
The financial statements of the Manufacturers Life Insurance
Company of America and the Manufacturers Life Insurance
Company of America Separate Account Four appearing in this
prospectus for the period ended September 30, 1995 are
unaudited.
The financial statements of The Manufacturers Life Insurance
Company of America and of The Manufacturers Life Insurance
Company of America Separate Account Four appearing in this
prospectus for the periods ending December 31 have been
audited by Ernst & Young LLP, independent auditors to the
extent indicated in their reports thereon also appearing
<PAGE> - 80 -
<PAGE>
elsewhere herein. Such financial statements have been
included herein in reliance upon such reports given upon the
authority of such firm as experts in auditing and accounting.
Actuarial matters included in this prospectus have been
examined by John Ostler, Vice President, Chief Actuary and
Treasurer of Manufacturers Life of America, whose opinion is
filed as an exhibit to the registration statement.
<PAGE> - 81 -
<PAGE>
FINANCIAL STATEMENTS
The financial statements of Manufacturers Life of America
included herein should be distinguished from the financial
statements of the Account and should be considered only as
bearing upon the ability of Manufacturers Life of America to
meet its obligations under the Policies.
<PAGE> - 82 -
<PAGE>
The following financial statements
for Separate Account Four
for the period ended
September 30, 1995 only
are unaudited.
<PAGE> - 83 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Emerging Common Real
Growth Stock Estate
Equity Sub-
Securities
Sub-Account Account S u b -
Account
<S> <C> <C> <C>
ASSETS
Investment in Manulife Series
Fund, Inc. at market value
Emerging Growth Equity Fund, $49,066,212
2,145,195 shares (cost $41,029,701)
Common Stock Fund, $17,783,825
1,096,703 shares (cost $15,687,052)
Real Estate Securities Fund, $13,262,787
904,053 shares (cost $12,822,773)
Balanced Assets Fund,
2,204,515 shares (cost $32,995,887)
Capital Growth Bond Fund,
986,200 shares (cost $11,076,668)
Money Market Fund,
573,328 shares (cost $5,978,646)
International Fund,
145,624 shares (cost $1,442,979)
Pacific Rim Emerging Markets Fund,
112,980 shares (cost $1,060,074)
49,066,212 17,783,825 13,262,787
Receivable for Policy-related
Transactions (131,780) 7,112 3,785
NET ASSETS $48,934,432 $17,790,937 $13,266,572
Units Outstanding 951,476 692,524 511,236
Net asset value per unit $51.43 $25.69 $25.95
</TABLE>
See accompanying notes.
<PAGE> - 84 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Capital
Balanced Growth Money-
Asset Bond Market
Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C>
ASSETS
Investment in Manulife Series
Fund, Inc. at market value
Emerging Growth Equity Fund,
2,145,195 shares (cost $41,029,701)
Common Stock Fund,
1,096,703 shares (cost $15,687,052)
Real Estate Securities Fund,
904,053 shares (cost $12,822,773)
Balanced Assets Fund, $35,843,819
2,204,515 shares (cost $32,995,887)
Capital Growth Bond Fund, $11,424,057
986,200 shares (cost $11,076,668)
Money Market Fund, $6,132,336
573,328 shares (cost $5,978,646)
International Fund,
145,624 shares (cost $1,442,979)
Pacific Rim Emerging Markets Fund,
112,980 shares (cost $1,060,074)
35,843,819 11,424,057 6,132,336
Receivable for Policy-related
Transations 381,506 71,807
(167,714)
NET ASSETS $36,225,325 $11,495,864 $5,964,622
Units Outstanding 1,654,124 612,459 409,377
Net asset value per unit $21.90 $18.77 $14.57
</TABLE>
See accompanying notes.
<PAGE> - 85 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Pacific Rim
Inter- Emerging
national Markets
Sub-Account Sub-Account Total
<S> <C> <C> <C>
ASSETS
Investment in Manulife Series
Fund, Inc. at market value
Emerging Growth Equity Fund, $49,066,212
2,145,195 shares (cost $41,029,701)
Common Stock Fund, 17,783,825
1,096,703 shares (cost $15,687,052)
Real Estate Securities Fund, 13,262,787
904,053 shares (cost $12,822,773)
Balanced Assets Fund, 35,843,819
2,204,515 shares (cost $32,995,887)
Capital Growth Bond Fund, 11,424,057
986,200 shares (cost $11,076,668)
Money Market Fund, 6,132,336
573,328 shares (cost $5,978,646)
International Fund, 1,528,862 1,528,862
145,624 shares (cost $1,442,979)
Pacific Rim Emerging Markets Fund, $1,133,144 $1,133,144
112,980 shares (cost $1,060,074)
1,528,862 1,133,144 136,175,042
Receivable for Policy-related
Transaction 11,456 11,983 188,155
NET ASSETS $1,540,318 $1,145,127 $136,363,197
Units Outstanding 148,823 114,513
Net asset value per unit $10.35 $10.00
</TABLE>
See accompanying notes.
<PAGE> - 86 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994 (Unaudited)
<TABLE>
<CAPTION>
Emerging Growth
Equity Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) $1,034,415 ($53,653)
Net realized gain (loss) 357,276 259,712
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 7,925,450 (1,227,841)
derived from operations 9,317,141 (1,021,782)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 12,226,601 14,531,343
Transfer of terminations (3,504,188) (2,706,223)
Transfer of policy loans (390,374) (308,656)
Net interfund transfers 284,071 322,712
8,616,110 11,839,176
Net increase in net assets 17,933,251 10,817,394
NET ASSETS
Beginning of Year 31,001,181 20,183,787
End of Period $48,934,432 $31,001,181
</TABLE>
See accompanying notes.
<PAGE> - 87 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($74,049) $554,517
Net realized gain (loss) 141,436 92,981
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 2,880,841 (1,183,509)
derived from operations 2,948,228 (536,011)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 3,871,912 5,946,303
Transfer of terminations (1,786,901) (1,073,532)
Transfer of policy loans (121,761) (97,701)
Net interfund transfers 142,840 (252,248)
2,106,090 4,522,822
Net increase in net assets 5,054,318 3,986,811
NET ASSETS
Beginning of Year 12,736,619 8,749,808
End of Period $17,790,937 $12,736,619
</TABLE>
See accompanying notes.
<PAGE> - 88 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Real Estate Securities
Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) $169,867 $177,093
Net realized gain (loss) 153,651 108,207
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 1,007,361 (691,776)
derived from operations 1,330,879 (406,476)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 3,246,554 4,968,671
Transfer of terminations (1,082,526) (931,394)
Transfer of policy loans (40,583) (85,424)
Net interfund transfers (815,694) 267,605
1,307,751 4,219,458
Net increase in net assets 2,638,630 3,812,982
NET ASSETS
Beginning of Year 10,627,942 6,814,960
End of Period $13,266,572 $10,627,942
</TABLE>
See accompanying notes.
<PAGE> - 89 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Balanced Assets
Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($104,582) $1,257,677
Net realized gain (loss) 84,992 72,510
Unrealized appreciation (depreciation)
of investments during the period 5,103,606 (2,560,365)
Increase (decrease) in net assets
derived from operations 5,084,016 (1,230,178)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 8,467,229 11,014,712
Transfer of terminations (2,480,132) (3,111,863)
Transfer of policy loans (278,336) (287,843)
Net interfund transfers (1,505,927) (396,171)
4,202,834 7,218,835
Net increase in net assets 9,286,850 5,988,657
NET ASSETS
Beginning of Year 26,938,475 20,949,818
End of Period $36,225,325 $26,938,475
</TABLE>
See accompanying notes.
<PAGE> - 90 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Capital Growth
Bond Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($47,077) $492,509
Net realized gain (loss) (21,982) (29,791)
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 1,360,541 (822,528)
derived from operations 1,291,482 (359,810)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 2,279,651 3,088,112
Transfer of terminations (979,185) (628,592)
Transfer of policy loans (56,737) (55,847)
Net interfund transfers 508,887 (86,125)
1,752,616 2,317,548
Net increase in net assets 3,044,098 1,957,738
NET ASSETS
Beginning of Year 8,451,766 6,494,028
End of Period $11,495,864 $8,451,766
</TABLE>
See accompanying notes.
<PAGE> - 91 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Money-Market
Sub-Account
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($26,185) $120,825
Net realized gain (loss) 40,736 11,641
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 185,114 (19,907)
derived from operations 199,665 112,559
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 1,753,522 2,895,838
Transfer of terminations (547,311) (1,071,814)
Transfer of policy loans (29,895) (42,089)
Net interfund transfers 11,223 (234,848)
1,187,539 1,547,087
Net increase in net assets 1,387,204 1,659,646
NET ASSETS
Beginning of Year 4,577,418 2,917,772
End of Period $5,964,622 $4,577,418
</TABLE>
See accompanying notes.
<PAGE> - 92 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
*International
Sub-Account
<S> <C> <C>
Period Ended Period Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($4,465) $533
Net realized gain (loss) 537 (215)
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 86,807 (924)
derived from operations 82,879 (606)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 349,308 36,857
Transfer of terminations (61,827) (2,007)
Transfer of policy loans (6,014) 0
Net interfund transfers 904,565 237,163
1,186,032 272,013
Net increase in net assets 1,268,911 271,407
NET ASSETS
Beginning of Year 271,407 0
End of Period $1,540,318 $271,407
</TABLE>
See accompanying notes.
<PAGE> - 93 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
*Pacific Rim
Emerging Markets
Sub-Account
<S> <C> <C>
Period Ended Period Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) ($2,485) $572
Net realized gain (loss) (290) (31)
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 78,555 (5,485)
derived from operations 75,780 (4,944)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 244,039 37,942
Transfer of terminations (46,572) (1,460)
Transfer of policy loans (4,216) 0
Net interfund transfers 701,053 143,505
894,304 179,987
Net increase in net assets 970,084 175,043
NET ASSETS
Beginning of Year 175,043 0
End of Period $1,145,127 $175,043
</TABLE>
* Reflects the period from commencement of operations October
4, 1994 through December 31, 1994.
See accompanying notes.
<PAGE> - 94 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF CHANGES IN NET ASSETS
PERIOD ENDED SEPTEMBER 30, 1995 and DECEMBER 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
Total
<S> <C> <C>
Period Ended Year Ended
Sept. 30/95 Dec. 31/94
FROM OPERATIONS
Net investment income (loss) $945,439 $2,550,073
Net realized gain (loss) 756,356 515,014
Unrealized appreciation (depreciation)
of investments during the period
Increase (decrease) in net assets 18,628,275 (6,512,335)
derived from operations 20,330,070 (3,447,248)
FROM CAPTIAL TRANSACTIONS
Additions (deductions) from:
Transfer of net premiums 32,438,816 42,519,778
Transfer of terminations (10,488,642) (9,526,885)
Transfer of policy loans (927,916) (877,560)
Net interfund transfers 231,018 1,593
21,253,276 32,116,926
Net increase in net assets 41,583,346 28,669,678
NET ASSETS
Beginning of Year 94,779,851 66,110,173
End of Period $136,363,197 $94,779,851
</TABLE>
See accompanying notes.
<PAGE> - 95 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Emerging Growth Common Stock
Equity Sub-Account Sub-Account
<S> <C> <C>
Investment income:
Dividend Income $1,225,634 $0
Expenses
Mortality and expense risk charge 191,219 74,049
Net investment income (loss) 1,034,415 (74,049)
Realized and unrealized gain (loss) from
security transactions:
Proceeds from sales 2,005,042 1,064,936
Cost of securities sold 1,647,766 923,500
Net realized gain (loss) 357,276 141,436
Unrealized appreciation (depreciation)
of Investments
Beginning of Year 111,061 (784,068)
End of Period 8,036,511 2,096,773
Net unrealized depreciation
during the period 7,925,450 2,880,841
Net realized and unrealized gain (loss)
on investments 8,282,726 3,022,277
Net increase (decrease) in net
assets derived from operations $9,317,141 $2,948,228
</TABLE>
See accompanying notes.
<PAGE> - 96 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Real Estate Securities Balanced Assets
Sub-Account Sub-Account
<S> <C> <C>
Investment income:
Dividend Income $226,773 $46,122
Expenses
Mortality and expense risk charge 56,906 150,704
Net investment income (loss) 169,867 (104,582)
Realized and unrealized gain (loss) from
security transactions:
Proceeds from sales 1,113,564 2,716,959
Cost of securities sold 959,913 2,631,967
Net realized gain (loss) 153,651 84,992
Unrealized appreciation (depreciation)
of Investments
Beginning of Year (567,347) (2,255,674)
End of Period 440,014 2,847,932
Net unrealized depreciation
during the period 1,007,361 5,103,606
Net realized and unrealized gain (loss)
on investments 1,161,012 5,188,598
Net increase (decrease) in net
assets derived from operations $1,330,879 $5,084,016
</TABLE>
See accompanying notes.
<PAGE> - 97 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Capital Growth Money-Market
Bond Sub-Account Sub-Account
<S> <C> <C>
Investment income:
Dividend Income $1,636 $268
Expenses
Mortality and expense risk charge 48,713 26,453
Net investment income (loss) (47,077) (26,185)
Realized and unrealized gain (loss) from
security transactions:
Proceeds from sales 771,922 1,770,898
Cost of securities sold 793,904 1,730,162
Net realized gain (loss) (21,982) 40,736
Unrealized appreciation (depreciation)
of Investments
Beginning of Year (1,013,152) (31,424)
End of Period 347,389 153,690
Net unrealized depreciation
during the period 1,360,541 185,114
Net realized and unrealized gain (loss)
on investments 1,338,559 225,850
Net increase (decrease) in net
assets derived from operations $1,291,482 $199,665
</TABLE>
See accompanying notes.
<PAGE> - 98 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Pacific Rim
International Emerging Markets
Sub-Account Sub-Account
<S> <C> <C>
Investment income:
Dividend Income $423 $1,174
Expenses
Mortality and expense risk charge 4,888 3,659
Net investment income (loss) (4,465) (2,485)
Realized and unrealized gain (loss) from
security transactions:
Proceeds from sales 31,316 25,464
Cost of securities sold 30,779 25,754
Net realized gain (loss) 537 (290)
Unrealized appreciation (depreciation)
of Investments
Beginning of Year (924) (5,485)
End of Period 85,883 73,070
Net unrealized depreciation
during the period 86,807 78,555
Net realized and unrealized gain (loss)
on investments 87,344 78,265
Net increase (decrease) in net
assets derived from operations $82,879 $75,780
</TABLE>
See accompanying notes.
<PAGE> - 99 -
<PAGE>
SEPARATE ACCOUNT FOUR OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF AMERICA
STATEMENT OF OPERATIONS
PERIOD ENDED SEPTEMBER 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Total
<S> <C>
Investment income:
Dividend Income $1,502,030
Expenses
Mortality and expense risk charge 556,591
Net investment income (loss) 945,439
Realized and unrealized gain (loss) from
security transactions:
Proceeds from sales 9,500,101
Cost of securities sold 8,743,745
Net realized gain (loss) 756,356
Unrealized appreciation (depreciation)
of Investments
Beginning of Year (4,547,013)
End of Period 14,081,262
Net unrealized depreciation
during the period 18,628,275
Net realized and unrealized gain (loss)
on investments 19,384,631
Net increase (decrease) in net
assets derived from operations $20,330,070
</TABLE>
See accompanying notes.
<PAGE> - 100 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Notes to Financial Statements
September 30, 1995
1. Organization
Separate Account Four of The Manufacturers Life Insurance
Company of America (the "Separate Account") is a unit
investment trust registered under the Investment Company Act
of 1940, as amended. The Separate Account is currently
comprised of eight investment sub-accounts, one for each
series of shares of Manulife Series Fund, Inc., available for
allocation of net premiums under variable universal life
insurance policies (the "Policies") issued by The
Manufacturers Life Insurance Company of America
("Manufacturers Life of America").
The Separate Account was established by Manufacturers Life of
America, a wholly-owned subsidiary of The Manufacturers Life
Insurance Company of Michigan ("MLIM"), as a separate
investment account on March 17, 1987. MLIM is a life
insurance holding company organized in 1983 under Michigan law
and a wholly-owned subsidiary of The Manufacturers Life
Insurance Company ("Manulife Financial"), a mutual life
insurance company based in Toronto, Canada.
The assets of the Separate Account are the property of
Manufacturers Life of America. The portion of the Separate
Account's assets applicable to the Policies will not be
chargeable with liabilities arising out of any other business
Manufacturers Life of America may conduct.
The net assets may not be less than the amount required under
state insurance law to provide for death (without regard to
the minimum death benefit guarantee) and other Policy
benefits.
Additional assets are held in Manufacturers Life of America's
general account to cover the contingency that the guaranteed
minimum death benefit might exceed the death benefit which
would have been payable in the absence of such guarantee.
<PAGE> - 101 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
2. Significant Accounting Policies
The following is a summary of significant accounting policies
followed by the Separate Account in preparation of its
financial statements:
a. Valuation of Investments - Investments are made among the
eight Funds of Manulife Series Fund, Inc. and are valued at
the reported net asset values of these Funds. Transactions
are recorded on the trade date.
b. Realized gains and losses on the sale of investments are
computed on the first-in, first-out basis.
c. Dividend income is recorded on the ex-dividend date.
d. Federal Income Taxes - Manufacturers Life of America, the
Separate Account's sponsor, is taxed as a "life insurance
company" under the Internal Revenue Code. Under these
provisions of the Code, the operations of the Separate Account
form part of the sponsor's total operations and are not taxed
separately.
The current year's operations of the Separate Account are not
expected to affect the sponsor's tax liabilities and,
accordingly, no charges were made against the Separate Account
for federal, state and local taxes. However, in the future,
should the sponsor incur significant tax liabilities related
to Separate Account operations, it intends to make a charge or
establish a provision within the Separate Account for such
taxes.
3. Mortality and Expense Risks Charge
Manufacturers Life of America deducts from the assets of the
Separate Account a daily charge equivalent to an annual rate
of 0.65% of the average net value of the Separate Account's
assets for mortality and expense risks.
4. Premium Deductions
Manufacturers Life of America deducts a sales charge of 3% and
a charge of 2% to cover state premium taxes from the gross
single premium and any additional premiums before placing the
remaining net premiums in the sub-accounts.
<PAGE> - 102 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
5. Purchases and Sales of Manulife Series Fund, Inc. Shares
Purchases and sales of the shares of common stock of Manulife
Series Fund, Inc. for the period ended September 30, 1995 were
$31,775,830 and $9,500,101 respectively, and for the year
ended December 31, 1994 were $41,461,367 and $7,038,820
respectively.
6. Related Party Transactions
ManEquity, Inc., a registered broker-dealer and indirect
wholly-owned subsidiary of Manulife Financial, acts as the
principal underwriter of the Policies pursuant to a
Distribution Agreement with Manufacturers Life of America.
Registered representatives of either ManEquity, Inc. or other
broker-dealers having distribution agreements with ManEquity,
Inc. who are also authorized as variable life insurance agents
under applicable state insurance laws, sell the Policies.
Registered representatives are compensated on a commission
basis.
Manufacturers Life of America has a formal service agreement
with its affiliates, Manulife Financial, which can be
terminated by either party upon two months' notice. Under
this Agreement, Manufacturers Life of America pays for legal,
actuarial, investment and certain other administrative
services.
<PAGE> - 103 -
<PAGE>
Report of Independent Auditors
To the Board of Directors
The Manufacturers Life Insurance
Company of America
We have audited the statement of assets and liabilities as of
December 31, 1994 and the statement of operations and the
statements of changes in net assets for each of the periods
presented herein of Separate Account Four of The Manufacturers
Life Insurance Company of America (comprising, respectively,
the Emerging Growth Equity Sub-Account, Common Stock
Sub-Account, Real Estate Securities Sub-Account, Balanced
Assets Sub-Account, Capital Growth Bond Sub-Account, Money
Markets Sub-Account, International Sub-Account, and Pacific
Rim Emerging Markets Sub-Account). These financial statements
are the responsibility of the management of The Manufacturers
Life Insurance Company of America. Our responsibility is to
express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of each of the respective sub-accounts constituting
Separate Account Four of The Manufacturers Life Insurance
Company of America at December 31, 1994, and the results of
their operations and changes in their net assets for each of
the periods presented herein, in conformity with generally
accepted accounting principles.
Ernst & Young LLP
Philadelphia, Pennsylvania
February 6, 1995
<PAGE> - 104 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Assets and Liabilities
December 31, 1994
<TABLE>
<CAPTION>
Emerging Growth Common Stock Real Estate
Securities
Equity Sub-Account Sub-Account Sub-Account
<S> <C> <C>
Assets
Investment in Manulife
Series Fund, Inc. -- at
market value:
Emerging Growth Equity Fund,
1,669,953 shares
(cost $30,867,826) $30,978,887
Common Stock Fund,
952,286 shares (cost
$13,509,634) $12,725,566
Real Estate Securities Fund,
795,505 shares (cost
$11,183,037) $10,615,690
Balanced Assets Fund,
1,943,930 shares (cost
$29,032,874)
Capital Growth Bond Fund,
836,856 shares (cost
$9,464,548)
Money Market Fund,
440,414 shares (cost
$4,551,021)
International Fund,
27,640 shares (cost
$272,301)
Pacific Rim Emerging Markets Fund,
18,600 shares (cost
$180,453)
30,978,887 12,725,566 10,615,690
Receivable for policy-
related transactions 22,294 11,053 12,252
Net assets $31,001,181 $12,736,619 $10,627,942
Units outstanding $758,547 $598,807 $455,939
Net asset value per unit $40.87 $21.27 $23.31
See accompanying notes.
</TABLE>
<PAGE> - 105 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Assets and Liabilities (continued)
December 31, 1994
<TABLE>
<CAPTION>
Balanced Assets Capital Growth Money Market
Sub-Account Bond Sub-Account Sub-Account
<S> <C> <C> <C>
Assets
Investment in Manulife
Series Fund, Inc. -- at
market value:
Emerging Growth Equity Fund,
1,669,953 shares
(cost $30,867,826)
Common Stock Fund,
952,286 shares (cost
$13,509,634)
Real Estate Securities Fund,
795,505 shares (cost
$11,183,037)
Balanced Assets Fund,
1,943,930 shares (cost
$29,032,874) $26,777,200
Capital Growth Bond Fund,
836,856 shares (cost
$9,464,548) $8,451,396
Money Market Fund,
440,414 shares (cost
$4,551,021) $4,519,597
International Fund,
27,640 shares (cost
$272,301)
Pacific Rim Emerging Markets Fund,
18,600 shares (cost
$180,453)
26,777,200 $8,451,396 $4,519,597
Receivable for policy-
related transactions 161,275 370 57,821
Net assets $26,938,475 $8,451,766 $4,577,418
Units outstanding 1,446,749 514,098 326,027
Net asset value per unit $18.62 $16.44 $14.04
See accompanying notes.
</TABLE>
<PAGE> - 106 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Assets and Liabilities (continued)
December 31, 1994
<TABLE>
<CAPTION>
International Pacific Rim
Sub-Account Emerging Markets
Sub-Account Total
<S> <C> <C> <C>
Assets
Investment in Manulife
Series Fund, Inc. -- at
market value:
Emerging Growth Equity Fund,
1,669,953 shares
(cost $30,867,826) $30,978,887
Common Stock Fund,
952,286 shares (cost
$13,509,634) 12,725,566
Real Estate Securities Fund,
795,505 shares (cost
$11,183,037) 10,615,690
Balanced Assets Fund,
1,943,930 shares (cost
$29,032,874) 26,777,200
Capital Growth Bond Fund,
836,856 shares (cost
$9,464,548) 8,451,396
Money Market Fund,
440,414 shares (cost
$4,551,021) 4,519,597
International Fund,
27,640 shares (cost
$272,301) $271,377 271,377
Pacific Rim Emerging Markets
Fund, 18,600 shares (cost
$180,453) $174,968 174,968
271,377 174,968 94,514,681
Receivable for policy-
related transactions 30 75 265,170
Net assets $271,407 175,043 $94,779,851
Units outstanding 27,894 18,582
Net asset value per unit $9.73 $9.42
See accompanying notes.
</TABLE>
<PAGE> - 107 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Operations
December 31, 1994
<TABLE>
<CAPTION>
Emerging Growth Common Stock Real Estate
Securities
Equity Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C>
Investment Income:
Dividend income $109,977 $624,444 $235,629
Expenses:
Mortality and expense
risks charge 163,630 69,927 58,536
Net investment (loss) income (53,653) 554,517 177,093
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) from security
transactions:
Proceeds from sales 1,283,379 726,604 471,250
Cost of securities sold 1,023,667 633,623 363,043
Net realized gain (loss) 259,712 92,981 108,207
Unrealized appreciation
(depreciation) of investments:
Beginning of year 1,338,902 399,441 124,429
End of year 111,061 (784,068) (567,347)
Net unrealized depreciation
during the year (1,227,841) (1,183,509) (691,776)
Net realized and unrealized
loss on investments (968,129) (1,090,528) (583,569)
Net (decrease) increase in
net assets derived from
operations $(1,021,782) $(536,011) $(406,476)
</TABLE>
See accompanying notes.
<PAGE> - 108 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Operations (continued)
December 31, 1994
<TABLE>
<CAPTION>
Balanced Assets Capital Growth Money-Market
Sub-Account Bond Sub-Account Sub-Account
<S> <C> <C> <C>
Investment Income:
Dividend income $1,417,788 $539,847 $143,363
Expenses:
Mortality and expense
risks charge 160,111 47,338 22,538
Net investment (loss) income 1,257,677 492,509 120,825
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) from security
transactions:
Proceeds from sales 1,213,103 483,080 2,855,562
Cost of securities sold 1,140,593 512,871 2,843,921
Net realized gain (loss) 72,510 (29,791) 11,641
Unrealized appreciation
(depreciation) of investments:
Beginning of year 304,691 (190,624) (11,517)
End of year (2,255,674) (1,013,152) (31,424)
Net unrealized depreciation
during the year (2,560,365) (822,528) (19,907)
Net realized and unrealized
loss on investments (2,487,855) (852,319) (8,266)
Net (decrease) increase in
net assets derived from
operations $(1,230,178) $(359,810) $112,559
See accompanying notes.
</TABLE>
<PAGE> - 109 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statement of Operations (continued)
December 31, 1994
<TABLE>
<CAPTION>
*Pacific Rim
*International Emerging Markets
Sub-Account Sub-Account Total
<S> <C> <C> <C>
Investment Income:
Dividend income $ 704 $ 624 $3,072,376
Expenses:
Mortality and expense
risks charge 171 52 522,303
Net investment (loss) income 533 572 2,550,073
Realized and unrealized gain
(loss) on investments:
Realized gain (loss) from security
transactions:
Proceeds from sales 5,218 624 7,038,820
Cost of securities sold 5,433 655 6,523,806
Net realized gain (loss) (215) (31) 515,014
Unrealized appreciation
(depreciation) of investments:
Beginning of year -- -- 1,965,322
End of year (924) (5,485) (4,547,013)
Net unrealized depreciation
during the year (924) (5,485) (6,512,335)
Net realized and unrealized
loss on investments (1,139) (5,516) (5,997,321)
Net (decrease) increase in
net assets derived from
operations $(606) $(4,944) $(3,447,248)
*Reflects the period from commencement of operations October
4,
1994 through December 31, 1994.
</TABLE>
<PAGE> - 110 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statements of Changes in Net Assets
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Emerging Growth Common Stock
Equity Sub-Account Sub-Account
Year ended Year ended Year ended Year
ended
Dec. 31/94 Dec. 31/93 Dec. 31/94 Dec.
31/93
<S> <C> <C> <C> <C>
From operations
Net investment (loss) income $(53,653) $2,072,766 $554,517 $431,862
Net realized gain (loss) 259,712 326,893 92,981 103,985
Unrealized (depreciation)
appreciation of investments
during the period (1,227,841) 559,356 (1,183,509) 147,571
Increase (decrease) in net
assets derived from operations (1,021,782) 2,959,015 (536,011) 683,418
From capital transactions
Additions (deductions) from:
Transfer of net premiums 14,531,343 10,608,613 5,946,303 4,791,211
Transfer of terminations (2,706,223) (1,527,711) (1,073,532) (646,557)
Transfer of policy loans (308,656) (277,430) (97,701) (72,082)
Net interfund transfers 322,712 776,331 (252,248) 235,452
11,839,176 9,579,803 4,522,822 4,308,024
Net increase in net assets 10,817,394 12,538,818 3,986,811 4,991,442
Net Assets
Beginning of year 20,183,787 7,644,969 8,749,808 3,758,366
End of year $31,001,181 $20,183,787 $12,736,619 $8,749,808
</TABLE>
See accompanying notes.
<PAGE> - 111 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statements of Changes in Net Assets (continued)
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Real Estate Securities Balanced Assets
Sub-Account Sub-Account
Year ended Year ended Year ended Year
ended
Dec. 31/94 Dec. 31/93 Dec. 31/94 Dec.
31/93
<S> <C> <C> <C> <C>
From operations
Net investment (loss) income $177,093 $545,615 $1,257,677 $1,183,263
Net realized gain (loss) 108,207 64,725 72,510 169,830
Unrealized (depreciation)
appreciation of investments
during the period (691,776) (60,818) (2,560,365) 61,409
Increase (decrease) in net
assets derived from operations (406,476) 549,522 (1,230,178) 1,414,502
From capital transactions
Additions (deductions) from:
Transfer of net premiums 4,968,671 4,225,128 11,014,712 11,670,937
Transfer of terminations (931,394) (407,115) (3,111,863) (1,726,315)
Transfer of policy loans (85,424) (94,310) (287,843) (146,296)
Net interfund transfers 267,605 1,150,615 (396,171) 639,550
4,219,458 4,874,318 7,218,835 10,437,876
Net increase in net assets 3,812,982 5,423,840 5,988,657 11,852,378
Net Assets
Beginning of year 6,814,960 1,391,120 20,949,818 9,097,440
End of year $10,627,942 $6,814,960 $26,938,475 $20,949,818
</TABLE>
See accompanying notes.
<PAGE> - 112 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statements of Changes in Net Assets (continued)
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Capital Growth Money-Market
Bond Sub-Account Sub-Account
Year ended Year ended Year ended Year
ended
Dec. 31/94 Dec. 31/93 Dec. 31/94 Dec.
31/93
<S> <C> <C> <C> <C>
From operations
Net investment (loss) income $492,509 $394,202 $120,825 $53,886
Net realized gain (loss) (29,791) 27,300 11,641 (1,285)
Unrealized (depreciation)
appreciation of investments
during the period (822,528) (160,971) (19,907) 1,684
Increase (decrease) in net
assets derived from operations (359,810) 260,531 112,559 54,285
From capital transactions
Additions (deductions) from:
Transfer of net premiums 3,088,112 4,597,900 2,895,838 3,473,746
Transfer of terminations (628,592) (379,641) (1,071,814) (439,675)
Transfer of policy loans (55,847) (135,497) (42,089) (31,176)
Net interfund transfers (86,125) (23,707) (234,848) (2,531,629)
2,317,548 4,059,055 1,547,087 471,266
Net increase in net assets 1,957,738 4,319,586 1,659,646 525,551
Net Assets
Beginning of year 6,494,028 2,174,442 2,917,772 2,392,221
End of year $8,451,766 $6,494,028 $4,577,418 $2,917,772
</TABLE>
See accompanying notes.
<PAGE> - 113 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Statements of Changes in Net Assets (continued)
Years ended December 31, 1994 and 1993
<TABLE>
<CAPTION>
Pacific Rim
International Emerging Markets
Sub-Account Sub-Account Total
Period ended Period ended Year ended Year
ended
Dec. 31/94* Dec. 31/94* Dec. 31/94* Dec.
31/93
<S> <C> <C> <C> <C>
From operations
Net investment (loss) income $ 533 $ 572 $2,550,073 $4,681,594
Net realized gain (loss) (215) (31) 515,014 691,448
Unrealized (depreciation)
appreciation of investments
during the period (924) (5,485) (6,512,335) 548,231
Increase (decrease) in net
assets derived from operations (606) (4,944) (3,447,248) 5,921,273
From capital transactions
Additions (deductions) from:
Transfer of net premiums 36,857 37,942 42,519,778 39,367,535
Transfer of terminations (2,007) (1,460) (9,526,885)
(5,127,014)
Transfer of policy loans --- --- (877,560)
(756,791)
Net interfund transfers 237,163 143,505 1,593 246,612
272,013 179,987 32,116,926 33,730,342
Net increase in net assets 271,407 175,043 28,669,678 39,651,615
Net Assets
Beginning of year --- --- 66,110,173 26,458,558
End of year $271,407 $175,043 $94,779,851 $66,110,173
</TABLE>
*Reflects the period from commencement of operations October
4,
1994 through December 31, 1994.
See accompanying notes.
<PAGE> - 114 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Notes to Financial Statements
December 31, 1994
1. Organization
Separate Account Four of The Manufacturers Life Insurance
Company of America (the "Separate Account") is a unit
investment trust registered under the Investment Company Act
of 1940, as amended. The Separate Account is currently
comprised of eight investment sub-accounts, one for each
series of shares of Manulife Series Fund, Inc., available for
allocation of net premiums under variable universal life
insurance policies (the "Policies") issued by The
Manufacturers Life Insurance Company of America
("Manufacturers Life of America").
The Separate Account was established by Manufacturers Life of
America, a wholly-owned subsidiary of The Manufacturers Life
Insurance Company of Michigan ("MLIM"), as a separate
investment account on March 17, 1987. MLIM is a life
insurance holding company organized in 1983 under Michigan law
and a wholly-owned subsidiary of The Manufacturers Life
Insurance Company ("Manulife Financial"), a mutual life
insurance company based in Toronto, Canada.
The assets of the Separate Account are the property of
Manufacturers Life of America. The portion of the Separate
Account's assets applicable to the Policies will not be
chargeable with liabilities arising out of any other business
Manufacturers Life of America may conduct.
The net assets may not be less than the amount required under
state insurance law to provide for death (without regard to
the minimum death benefit guarantee) and other Policy
benefits.
Additional assets are held in Manufacturers Life of America's
general account to cover the contingency that the guaranteed
minimum death benefit might exceed the death benefit which
would have been payable in the absence of such guarantee.
<PAGE> - 115 -
<PAGE>
Separate Account Four of
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
2. Significant Accounting Policies
The following is a summary of significant accounting policies
followed by the Separate Account in preparation of its
financial statements.
a. Valuation of Investments - Investments are made among the
eight Funds of Manulife Series Fund, Inc. and are valued
at the reported net asset values of these Funds.
Transactions are recorded on the trade date.
b. Realized gains and losses on the sale of investments are
computed on the first-in, first-out basis.
c. Dividend income is recorded on the ex-dividend date.
d. Federal Income Taxes - Manufacturers Life of America, the
Separate Account's sponsor, is taxed as a "life insurance
company" under the Internal Revenue Code. Under these
provisions of the Code, the operations of the Separate
Account form part of the sponsor's total operations and
are not taxed separately.
The current year's operations of the Separate Account are not
expected to affect the sponsor's tax liabilities and,
accordingly, no charges were made against the Separate Account
for federal, state and local taxes. However, in the future,
should the sponsor incur significant tax liabilities related
to Separate Account operations, it intends to make a charge or
establish a provision within the Separate Account for such
taxes.
3. Mortality and Expense Risks Charge
Manufacturers Life of America deducts from the assets of the
Separate Account a daily charge equivalent to an annual rate
of 0.65% of the average net value of the Separate Account's
assets for mortality and expense risks.
4. Premium Deductions
Manufacturers Life of America deducts a sales charge of 3% and
a charge of 2% to cover state premium taxes from the gross
single premium and any additional premiums before placing the
remaining net premiums in the sub-accounts.
<PAGE> - 116 -
<PAGE>
5. Purchases and Sales of Manulife Series Fund, Inc. Shares
Purchases and sales of the shares of common stock of Manulife
Series Fund, Inc. for the year ended December 31, 1994 were
$41,461,367 and $7,038,820, respectively, and for the year
ended December 31, 1993 were $45,471,528 and $6,994,499,
respectively.
6. Related Party Transactions
ManEquity, Inc., a registered broker-dealer and indirect
wholly-owned subsidiary of Manulife Financial, acts as the
principal underwriter of the Policies pursuant to a
Distribution Agreement with Manufacturers Life of America.
Registered representatives of either ManEquity, Inc. or other
broker-dealers having distribution agreements with ManEquity,
Inc. who are also authorized as variable life insurance agents
under applicable state insurance laws, sell the Policies.
Registered representatives are compensated on a commission
basis.
Manufacturers Life of America has a formal service agreement
with its affiliate, Manulife Financial, which can be
terminated by either party upon two months' notice. Under
this Agreement, Manufacturers Life of America pays for legal,
actuarial, investment and certain other administrative
services.
<PAGE> - 117 -
<PAGE>
The following financial statements
for The Manufacturers Life Insurance Company
of America for the period ended
September 30, 1995 only
are unaudited.
<PAGE> - 118 -
<PAGE>
The Manufacturers Life Insurance Company of America
Balance Sheets
<TABLE>
<CAPTION>
September 30 December 31
1995 1994
(Unaudited)
<S> <C> <C>
Assets
Bonds, at amortized cost
(market $60,296,680 -1995
and $51,080,395 - 1994) $57,902,241 $52,149,080
Stocks (Note 7) 24,052,190 25,629,580
Short-term investments 189,672 10,914,561
Policy loans 6,582,470 4,494,390
Total investments 88,726,573 93,187,611
Cash on hand and on deposit 3,584,824 5,069,197
Life insurance premiums deferred
and uncollected 247,393 13,646
Accrued investment income 1,047,513 796,333
Separate account assets 439,258,680 302,736,198
Funds receivable on reinsurance assumed 421,666 880,284
Receivable for undelivered securities 15,682 69,003
Other assets 156,570 333,651
Total assets $533,458,901 $403,085,923
Liabilities, capital and surplus
Aggregate policy reserves $33,749,082 $29,761,174
Contract deposit funds 2,750,817 3,938,425
Interest maintenance and asset
valuation reserves 4,209,156 111,566
Policy and contract claims 77,415 94,346
Provision for policyholder
dividends payable 2,379,081 1,385,409
Amounts due to affiliates 6,872,260 7,377,108
Accrued liabilities 3,803,608 4,773,565
Amounts payable for
undelivered securities 7,841 3,512,459
Separate account liablilities 439,258,680 302,736,198
Total liabilities 493,107,940 353,690,250
Capital and surplus:
Common shares, par value $ 1.00; authorized,
5,000,000 shares; issued and outstanding shares
(4,501,856- - 1995 and 4,501,855- -1994) 4,501,856 4,501,855
Preferred shared, par value $ 1.00; authorized,
5,000,000 shares; issued and outstanding shares
105,000- - 1995 and 1994) 10,500,000 10,500,000
Capital paid in excess of par value 54,999,997 49,849,998
Surplus (29,650,892) (15,456,180)
Total capital and surplus 40,350,961 49,395,673
Total liablilities, capital,
and surplus $533,458,901 $403,085,923
<PAGE> - 119 -
<PAGE>
</TABLE>
See accompanying notes.
<PAGE> - 120 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statement of Operations (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Life premiums $26,544,818 $21,796,303 $87,786,742 $73,901,637
Annuity deposits 9,176,744 15,984,688 29,606,973 63,516,003
Investment income, net of
investment expenses 1,197,939 595,134 3,854,192 2,193,338
Amortization of interest
maintenance reserve 8,353 (11,691) 14,172 27,901
Foreign exchange gain (loss) (329,945) 492,338 (329,662) 128,130
Other revenue 37,106 12,096 92,821 29,638
Total revenues 36,635,015 38,868,868 121,025,238 139,796,647
Benefits paid or provided:
Increase (decrease) in
aggregate policy
reserves (2,172,807) (2,690,406) 3,987,908 (4,359,854)
Increase (decrease) in
liability for
deposit funds (701,354) (2,211,032) (1,187,608) 773,375
Transfers to separate
accounts, net 21,999,494 31,050,361 73,046,861 112,599,442
Death benefits 694,831 207,720 2,163,196 329,505
Annuity benefits (506,892) (21,953) 30,802 224,706
Surrender benefits 6,683,913 707,625 12,938,150 2,100,743
25,997,185 27,042,315 90,979,309 111,667,917
Insurance expenses:
Intercompany service fee 5,289,000 5,895,734 16,764,000 16,358,143
Commissions 4,471,643 5,562,635 13,449,277 17,953,310
General expenses 4,665,024 1,726,021 9,470,575 4,609,828
Commission and expense
allowances on reinsurance
assumed 13,329 53,332 942,979 583,192
14,438,996 13,237,722 40,626,831 39,504,473
Loss before policyholders'
dividends and federal income
tax benefit (3,801,166) (1,411,169) (10,580,902)(11,375,743)
Dividends to policyholders 263,345 (152,804) 2,172,621 593,435
Loss before federal income tax
benefit (4,064,511) (1,258,365) (12,753,523)(11,969,178)
Federal income tax benefit - 99,969 - 499,393
Net loss from operations after
policyholders' dividends and
federal income tax (4,064,511) (1,358,334) (12,753,523)(12,468,571)
Net realized capital gain (loss)
net of transfer to interest
maintenance reserve 38,348 (75) 630,788 (554,046)
<PAGE> - 121 -
<PAGE>
($4,026,163)($1,358,409)($12,122,735)($13,022,617)
</TABLE>
See accompanying notes.
<PAGE> - 122 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
1995 1994
<S> <C> <C>
Operating activities:
Premiums collected, net $ll7,l59,968 $137,421,718
Policy benefits paid, net (15,137,221) (2,797,112)
Commissions and other expenses paid (43,854,220) (35,341,889)
Net investment income 3,569,190 2,179,963
Dividends paid to policyholders (1,178,949) (724,935)
Other income and expenses (172,880) (786,657)
Transfers to separate accounts, net (72,596,690) (112,179,755)
Net cash used in operating activities (12,210,802) (12,228,667)
Investing activities
Sale, maturity, or repayment of investments 62,744,420 36,295,459
Purchase of investments (67,892,880) (27,311,651)
Net cash (used in) provided by
investing activities (5,148,460) 8,983,808
Financing Activities
Issuance of stock 5,150,000 -
Net increase in cash and short-term
investments (12,209,262) (3,244,859)
Cash and short-term investments
at beginning of year 15,983,758 9,058,136
Cash and short-term investments
at end of year $3,774,496 $5,813,277
</TABLE>
See accompanying notes.
<PAGE> - 123 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statement of Changes in Capital and Surplus
(Unaudited)
<TABLE>
<CAPTION>
Capital
Paid in
Excess of
Capital Par Value Surplus Total
<S> <C> <C> <C>
Balance, December 31,
1994 $15,001,855 $49,849,998 ($15,456,180)$49,395,673
Net loss from operations (12,122,735)(12,122,735)
Issuance of common stock 1 5,149,999 5,150,000
Increase in asset valuation
reserve (2,869,008) (2,869,008)
Increase in nonadmitted assets (1,710,551) (1,710,551)
Change in liability for
reinsurance
in unauthorized companies (54,935) (54,935)
Change in net unrealized
capital gains 2,562,517 2,562,517
Balance, September 30, 1995 15,001,856 $54,999,997 ($29,650,892)$40,350,961
</TABLE>
See accompanying notes.
<PAGE> - 124 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements
(Unaudited)
September 30, 1995
1. Organization
The Manufacturers Life Insurance Company of America
("Manufacturers Life of America" or the "Company") is a
wholly-owned subsidiary of The Manufacturers Life Insurance
Company of Michigan (the "Parent"), which is in turn a wholly-
owned subsidiary of The Manufacturers Life Insurance Company
("Manulife Financial"), a Canadian-based mutual life insurance
company (Notes 4 and 5).
During the nine months ended September 30, 1995, the Company
received a capital contribution of $5,150,000 from the Parent
in return for one share of common stock (par value $1).
Subsequent to the end of the period the Company received a
capital contribution of $7,420,000 from the Parent in return
for one share of common stock (par value $1).
2. Significant Accounting Policies
Basis of Presentation
The accompanying unaudited financial statements of The
Manufacturers Life Insurance Company of America have been
prepared in accordance with accounting practices prescribed or
permitted for interim financial information by the Insurance
Department of Michigan (statutory practices) and with the
instructions to Form 1O-Q and Article 10 Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements for mutual life insurance
companies and their wholly-owned and indirect subsidiaries.
Statutory practices differ in certain respects from generally
accepted accounting principles followed by stock life
insurance companies in determining financial position and
results of operations. In general, the differences are: (1)
commissions and other costs of acquiring and writing policies
are charged to expense in the year incurred rather than being
amortized over the related policy term; (2) certain non-
admitted assets are excluded from the balance sheet; (3)
deferred income taxes are not provided for timing differences
in recording certain items for financial statement and tax
purposes; (4) certain transactions are reflected directly to
surplus rather than reflected in net income from operations,
and (5) debt securities are carried at amortized cost.
Operating results for the nine month period ended September
30, 1995 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1995. For
<PAGE> - 125 -
<PAGE>
further information, refer to the financial statements and
footnotes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1994.
<PAGE> - 126 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
2. Significant Accounting Policies (continued)
In April 1993, the Financial Accounting Standard Board issued
Interpretation 40, "Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and Other
Enterprises." The interpretation, which has been amended to be
effective for 1996 annual financial statements and thereafter,
will no longer allow statutory financial statements to be
described as being prepared in conformity with generally
accepted accounting principles (GAAP). This will require life
insurance companies to adopt all applicable standards
promulgated by the FASB in any general purpose financial
statements such companies may issue. While GAAP standards
have recently been developed for mutual life insurance
companies, the Company has not yet quantified the effects of
the Interpretation on its general purpose financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.
All amounts presented are expressed in U.S. Dollars.
Certain amounts from prior years have been restated to conform
to the current year's presentation.
Stocks
Stocks are carried at market value.
Bonds
Bonds are carried at amortized cost. Discounts and premiums
on investments are amortized using the effective interest
method. Gains and losses on sales of bonds are calculated on
the specific identification method and recognized into income
based on NAIC prescribed formulas. Short-term investments
include investments with maturities of less than one year at
the date of acquisition. Market values disclosed are based on
NAIC quoted values.
Asset Valuation Reserve and Interest Maintenance Reserve
The Asset Valuation Reserve and Interest Maintenance Reserve
were determined by NAIC prescribed formulas and are reported
as liabilities rather than as valuation allowances or
appropriations of surplus.
Policy and Contract Claims
<PAGE> - 127 -
<PAGE>
Policy and contract claims are determined on an individual
case basis for reported losses. Estimates of incurred but not
reported losses are developed on the basis of past experience.
<PAGE> - 128 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
2. Significant Accounting Policies (continued)
Separate Accounts
Separate account assets and liabilities reported in the
accompanying financial statements represent funds that are
separately administered, principally for variable annuity and
variable life contracts, and for which the contract holder,
rather than the Company, bears the investment risk. Separate
account assets are recorded at market value. Operations of
the separate accounts are not included in the accompanying
financial statements.
Revenue Recognition
Both premium and investment income are recorded when due.
Reinsurance
Reinsurance premiums and claims are accounted for on a basis
consistent with that used in accounting for the original
policies issued and the terms of the reinsurance contracts.
Premiums and claims are reported net of reinsured amounts.
Policy Reserves
Certain policy reserves are calculated based on statutorily
required interest and mortality assumptions.
3. Investments and Investment Income
The amortized cost and market value of investments in fixed
maturities (bonds) as of September 30, 1995 is summarized as
follows:
<TABLE>
<CAPTION>
Quoted or
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government Securities $21,034,081 $706,256 $(49,695) $21,690,642
Foreign Government Securities 7,116,744 299,468 (13,898) 7,402,314
Corporate Securities 29,751,416 1,530,866 (78,558) 31,203,724
$57,902,241 $2,536,590 (142,151) $60,296,680
</TABLE>
<PAGE> - 129 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
3. Investments and Investment Income (continued)
Proceeds from sales of investments in debt securities during
the first nine months of 1995 were $58,728,738. Gross gains
of $2,416,264 and gross losses of $199,627 were realized on
those sales.
The amortized cost and market value of investments in fixed
maturities (bonds) as of December 31, 1994 is summarized as
follows:
<TABLE>
<CAPTION>
Quoted or
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities $34,265,152 $243,971 $(441,592) $34,067,531
Foreign Government securities 7,388,458 (294,385) 7,094,073
Corporate securities 10,495,470 2,457 (577,136) 9,920,791
$52,149,080 $246,428 $(1,313,113) $51,082,395
</TABLE>
The amortized cost and market value of fixed maturities at
September 30, 1995 by contractual maturities, are shown below.
Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Years to Maturity Amortized Cost Market Value
<S> <C> <C>
One year or less $675,639 $679,474
Greater than 1; up to 5 years 5,706,420 5,786,646
Greater than 5; up to 1O years 17,870,070 19,000,568
Due after IO years 33,650,112 34,829,992
</TABLE> $57,902,241 60,296,680
At September 30, 1995, $5,696,857 of bonds at amortized costs
were on deposit with government insurance departments to
satisfy regulatory regulations.
<PAGE> - 130 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
3. Investments and Investment Income (continued)
Major categories of net investment income for the nine months
ended September 30, 1995 were as follows:
<TABLE>
<CAPTION>
Net Investment Income
1995 1994
<S> <C> <C>
Gross investment income:
Bond Income $3,190,652 $1,311,007
Dividends: Manulife Series Fund, Inc.
(Note 7) 7,848 407,610
Policy Loans 296,205 192,491
Short-term investments 624,593 366,387
4,119,298 2,277,495
Investment Expenses (265,106) (84,157)
Net investment income $3,854,192 $2,193,338
</TABLE>
4. Related Party Transactions
Manufacturers Life of America has a formal service agreement
with Manulife Financial which can be terminated by either
party upon two months' notice. Under the Agreement,
Manufacturers Life of America will pay direct operating
expenses incurred each year by Manulife Financial on behalf of
Manufacturers Life of America. Services provided under the
Agreement include legal, actuarial, investment, data
processing and certain other administrative services. Costs
incurred under this Agreement, for the nine months ended
September 30, 1995 and 1994, were $17,029,106 and $16,442,300
respectively.
In addition, the Company has several reinsurance agreements
with Manulife Financial which may be terminated upon the
specified notice by either party. These agreements are
summarized as follows:
(a) The Company assumes two blocks of insurance from Manulife
Financial under coinsurance treaties. The Company's risk
is limited to $100,000 of initial face amount per claim
plus a prorata share of any increase in face amount.
<PAGE> - 131 -
<PAGE>
(b) The Company cedes the risk in excess of $25,000 per life
to Manulife Financial under the terms of an automatic
reinsurance agreement.
<PAGE> - 132 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
4. Related Party Transactions (continued)
(c) The Company cedes a substantial portion of its risk on its
Flexible Premium Variable Life policies to Manulife
Financial under the terms of a stop loss reinsurance
agreement.
(d) Under the terms of an automatic coinsurance agreement, the
Company cedes its risk on structured settlements to
Manulife Financial.
Selected amounts for the nine months ended September 30, 1995
and 1994 relating to the above treaties reflected in the
financial statements are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Life and annuity premiums assumed $5,540,617 $2,577,230
Other life and annuity
consideration ceded (431,357) (544,056)
Commissions and expense allowances
on reinsurance assumed (942,979) (583,192)
Policy reserves assumed 50,651,383 25,896,167
Policy reserves ceded 3,862,617 3,763,793
</TABLE>
5. Federal Income Tax
The Company joins the Parent and another wholly-owned life
insurance subsidiary in filing a U.S. consolidated income tax
return as a life insurance group under provisions of the
Internal Revenue Code. In accordance with an income tax-
sharing agreement dated December 29, 1983, the Company's
income tax provision (or benefit) is computed as if the
Company filed a separate income tax return. The Company
receives no surtax exemption. Tax benefits from operating
losses are provided at the U.S. statutory rate plus any tax
credits attributable to the Company, provided the consolidated
group utilizes such benefits currently. The tax provision or
benefit is the estimated amount that the Company will receive
from the consolidated group under the tax sharing agreement.
<PAGE> - 133 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
(Unaudited)
6. Statutory Restrictions on Dividends
The Company is subject to statutory limitations on the payment
of dividends to its Parent. The Company cannot pay dividends
during 1995 without the prior approval of insurance regulatory
authorities.
7. Investment in Manulife Series Fund, Inc.
The Company markets variable life insurance and variable
annuity products through Separate Accounts which use Manulife
Series Fund, Inc. as its investment vehicle.
Common stock represents the Company's seed money investment in
Manulife Series Fund, Inc.
<PAGE> - 134 -
<PAGE>
Report of Independent Auditors
The Board of Directors
The Manufacturers Life Insurance
Company of America
We have audited the accompanying balance sheets of The
Manufacturers Life Insurance Company of America as of December
31, 1994 and 1993, and the related statements of operations,
changes in capital and surplus, and cash flows for each of the
three years in the period ended December 31, 1994. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of The Manufacturers Life Insurance Company of
America at December 31, 1994 and 1993, and the results of its
operations and its cash flows for each of the three years in
the period ended December 31, 1994, in conformity with
generally accepted accounting principles and with reporting
practices prescribed or permitted by the Insurance Department
of the State of Michigan. Also in our opinion, the related
financial statement schedules when considered in relation to
the basic financial statements taken as a whole present fairly
in all material respects the information set forth therein.
Philadelphia, Pennsylvania ERNST & YOUNG LLP
February 20, 1995
<PAGE> - 135 -
<PAGE>
The Manufacturers Life Insurance Company of America
Balance Sheets
<TABLE>
<CAPTION>
December 31
1994 1993
<S> <C> <C>
Assets
Bonds, at amortized cost (market)
$51,082,395--1994 and
$24,120,198--1993) $52,149,080 $23,375,773
Stocks (note 9) 25,629,580 40,549,278
Short-term investments 10,914,561 797,875
Policy loans 4,494,390 3,023,275
Total investments 93,187,611 67,746,201
Cash 5,069,197 8,260,261
Life insurance premiums
deferred and uncollected 13,646 31,574
Accrued investment income 796,333 468,968
Separate account assets 302,736,198 174,182,746
Funds receivable on reinsurance assumed 880,284 2,240,200
Receivable for undelivered securities 69,003 353,576
Other assets 333,651 108,260
Total assets $ 403,085,923 $253,391,786
Liabilities, capital and surplus
Aggregate policy reserves $ 29,761,174 $13,019,605
Other contract deposits 3,938,425 3,284,211
Interest maintenance and asset
valuation reserves 111,566 431,400
Policy and contract claims 94,346 153,709
Provision for policyholder
dividends payable 1,385,409 1,016,502
Amounts due to affiliates 7,377,108 7,953,242
Payable for undelivered securities 3,512,459 -
Accrued liabilities 4,773,565 2,694,433
Separate account liabilities 302,736,198 174,182,746
Total liabilities 353,690,250 202,735,848
Capital and surplus:
Common shares, par value $1.00;
authorized, 5,000,000 shares; issued
and outstanding 4,501,855 shares
(1,501,854 shares in 1993) 4,501,855 1,501,854
Preferred shares, par value $100;
authorized 5,000,000 shares; issued
and outstanding 105,000 shares
(335,000 shares in 1993) 10,500,000 33,500,000
</TABLE>
<PAGE> - 136 -
<PAGE>
The Manufacturers Life Insurance Company of America
Balance Sheets (continued)
<TABLE>
<CAPTION>
December 31
1994 1993
<S> <C> <C>
Capital paid in excess of par value 49,849,998 9,849,999
Surplus (deficit) (15,456,180) 5,804,085
Total capital and surplus 49,395,673 50,655,938
Total liabilities, capital and surplus $ 403,085,923 $253,391,786
</TABLE>
See accompanying notes.
<PAGE> - 137 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statements of Operations
<TABLE>
<CAPTION>
Year ended December 31
Revenues: 1994 1993 1992
<S> <C> <C> <C>
Life and annuity premiums, principally
reinsurance assumed $ 25,385,628 $12,745,981 $6,579,233
Other life and annuity considerations 168,075,003 113,332,974 33,268,869
Investment income, net of investment
expenses ($106,908 in 1994,
$89,186 in 1993, $58,423 in 1992) 3,588,629 3,323,962 1,430,454
Amortization of interest maintenance
reserve 19,527 32,866 7,707
Commission and expense allowance
on reinsurance ceded 187,694 - -
Foreign exchange gain (loss) 114,728 (197,971) 24,657
Other revenue 54,763 33,935 4,903
Total revenues 197,425,972 129,271,747 41,315,823
Benefits paid or provided:
Increase in aggregate policy reserves 16,741,569 5,168,484 3,625,964
Increase in liability for deposit funds 654,214 2,820,520 422,369
Transfers to separate accounts, net 136,896,150 98,601,141 26,789,260
Death benefits 640,875 582,534 286,278
Maturity benefits 580,615 79,253 -
Surrender benefits 3,701,591 2,319,926 1,596,434
159,215,014 109,571,858 32,720,305
Insurance expenses:
Management fee 21,222,310 12,378,288 4,861,244
Commissions 23,416,110 14,742,130 5,192,462
General expenses 8,260,467 5,108,104 2,744,475
Commissions and expense allowances
on reinsurance assumed 810,252 329,634 269,141
53,709,139 32,558,156 13,067,322
Loss before policyholders' dividends
and federal income tax (15,498,181) (12,858,267) (4,471,804)
Dividends to policyholders 1,149,719 837,454 634,652
Loss before federal income tax (16,647,900) (13,695,721) (5,106,456)
</TABLE>
<PAGE> - 138 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statements of Operations (continued)
<TABLE>
<CAPTION>
Year ended December 31
Revenues: 1994 1993 1992
<S> <C> <C> <C>
Federal income tax provision (benefit) - (324,643) 339,539
Net loss from operations after
policyholders' dividends and
federal income tax (16,647,900) (13,371,078) (5,445,995)
Net realized capital gains (net of capital
gains tax of $0 in 1994, $236,415 in 1993,
and $0 in 1992 and $(554,000) in 1994,
$347,292 in 1993, and $68,401 in 1992
transferred to (from) the interest
maintenance reserve) (3,012,485) 93,618 139,261
Net loss from operations $(19,660,385) $(13,277,460)$(5,306,734)
</TABLE>
See accompanying notes.
<PAGE> - 139 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statements of Changes in Capital and Surplus
<TABLE>
<CAPTION>
Capital
Paid in
Excess of Surplus
Capital Par Value (Deficit) Total
<S> <C> <C> <C> <C>
Balance, December 31, 1991 $29,001,853 $4,000,000 $19,650,265 $52,652,118
Net loss from operations (5,306,734) (5,306,734)
Issuance of preferred shares 6,000,000 6,000,000
Increase in asset valuation
reserve (8,813) (8,813)
Increase in nonadmitted assets (1,025,556) (1,025,556)
Change in liability for
reinsurance in unauthorized
companies (7,166) (7,166)
Company's share of increase
in separate account assets, net 3,240,199 3,240,199
Balance, December 31, 1992 35,001,853 4,000,000 16,542,195 55,544,048
Net loss from operations (13,277,460)
(13,277,460)
Issuance of common stocks 1 5,849,999 5,850,000
Increase in asset valuation
reserve (13,076) (13,076)
Increase in nonadmitted assets (133,575) (133,575)
Change in net unrealized capital
losses (1,592,242) (1,592,242)
Change in liability for
reinsurance in unauthorized
companies (29,905) (29,905)
Company's share of increase in
separate account assets, net 4,308,148 4,308,148
Balance, December 31, 1993 35,001,854 9,849,999 5,804,085 50,655,938
Net loss from operations (19,660,385)(19,660,385)
Issuance of common shares 1 19,999,999 20,000,000
Capital restructuring of
preference shares (20,000,000) 20,000,000 -
Increase in asset valuation
reserve (55,286) (55,286)
Increase in nonadmitted assets (1,021,357) (1,021,357)
Change in net unrealized capital
losses (425,082) (425,082)
Change in liability for
reinsurance in unauthorized
companies (98,155) (98,155)
Company's share of increase in
<PAGE> - 140 -
<PAGE>
separate account assets, net -
-
Balance, December 31, 1994 $15,001,855 $49,849,998$(15,456,180) $49,395,673
</TABLE>
See accompanying notes.
<PAGE> - 141 -
<PAGE>
The Manufacturers Life Insurance Company of America
Statements of Cash Flows
<TABLE>
<CAPTION>
Year ended December 31
1994 1993 1992
<S> <C> <C> <C>
Operating activities
Premiums collected, net $193,478,637 $126,075,035 $39,842,600
Policy benefits paid, net (4,982,444) (2,829,812) (1,932,712)
Commissions and other expenses paid (48,141,400) (35,203,997) (9,431,344)
Net investment income 3,343,515 3,197,892 1,356,553
Other income and expenses (1,946,063) (1,592,957) (1,849,180)
Transfers to separate accounts, net (136,950,482) (98,220,292) (26,266,436)
Net cash provided by (used in)
operating activities 4,801,763 (8,574,131) 1,719,481
Investing activities
Sale, maturity, or repayment
of investments 73,187,733 28,248,633 11,975,475
Purchase of investments (91,063,874) (73,688,735) (24,400,135)
Net cash used in investing activities (17,876,141) (45,440,102) (12,424,660)
Financing activities
Issuance of shares 20,000,000 5,850,000 6,000,000
Surplus withdrawn from
separate account - 48,701,076 6,000,000
Net cash provided by
financing activities 20,000,000 54,551,076 12,000,000
Net increase in cash and short-term
investments 6,925,622 536,843 1,294,821
Cash and short-term investments
at beginning of year 9,058,136 8,521,293 7,226,472
Cash and short-term investments
at end of year $15,983,758 $9,058,136 $8,521,293
</TABLE>
See accompanying notes.
<PAGE> - 142 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
December 31, 1994
1. Organization
Organization
The Manufacturers Life Insurance Company of America
(Manufacturers Life of America or the Company) is a
wholly-owned subsidiary of The Manufacturers Life Insurance
Company of Michigan (the Parent), which is in turn a
wholly-owned subsidiary of The Manufacturers Life Insurance
Company (Manulife Financial), a Canadian-based mutual life
insurance company (Notes 4 and 5).
During 1994, the Company's parent contributed $20,000,000
capital in return for 1 share of the Company's common stock
par value $1 with the remaining $19,999,999 being recorded as
contributed surplus. During 1994 the Company restructured its
capital by exchanging 230,000 shares of preferred stock with a
par value of $23,000,000 for 3,000,000 shares of common stock
par value $3,000,000 with the remaining $20,000,000 being
recorded as contributed surplus.
The Parent contributed $5,850,000 in capital in return for 1
share of common stock during 1993, $6,000,000 in capital in
return for 60,000 shares of preferred stock during 1992.
During 1991, the Company invested $1,800,000 to fund initial
branch operations in Taiwan. This investment in Taiwan was
increased by $6,000,000 in 1992 and a further investment of
$5,200,000 in 1993. There was no new funding in 1994 for the
Taiwan branch.
2. Significant Accounting Policies
Basis of Presentation
The accompanying financial statements of Manufacturers Life of
America have been prepared in accordance with accounting
practices prescribed or permitted by the Insurance Department
of Michigan, which are considered generally accepted
accounting principles for mutual life insurance companies and
their wholly-owned direct and indirect subsidiaries. Such
practices differ in certain respects from generally accepted
accounting principles followed by stock life insurance
companies in determining financial position and results of
operations. In general, the differences are: (1) commissions
and other costs of acquiring and writing policies are charged
to expense in the year incurred rather than being amortized
over the related policy term; (2) certain non-admitted assets
are excluded from the balance sheet; (3) deferred income taxes
are not provided for timing differences in recording certain
items for financial statement and tax purposes; (4) certain
transactions are reflected directly to surplus rather than
reflected in net income from operations (for example, certain
<PAGE> - 143 -
<PAGE>
transactions related to the separate accounts); and (5) debt
securities are carried at amortized cost.
<PAGE> - 144 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Basis of Presentation (continued)
In April 1993, the Financial Accounting Standards Board issued
Interpretation 40, "Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and Other
Enterprises." The interpretation, which has been amended to
be effective for 1996 annual financial statements and
thereafter, will no longer allow statutory financial
statements to be described as being prepared in conformity
with generally accepted accounting principles (GAAP). This
will require life insurance companies to adopt all applicable
standards promulgated by the FASB in any general purpose
financial statements such companies may issue. While GAAP
standards have recently been developed for mutual life
insurance companies, the Company has not yet completed the
complex and extensive historical calculations and thus is
unable to quantify the effects of the Interpretation on its
financial statements.
All amounts presented are expressed in U.S. Dollars. Certain
amounts from prior periods have been reclassified to conform
with current period presentation.
Stocks
Stocks are carried at market value.
Bonds
Bonds are carried at amortized cost. Discounts and premiums
on investments are amortized using the effective interest
method. Gains and losses on sales of bonds are calculated on
the specific identification method and recognized into income
based on NAIC prescribed formulas. Short-term investments
include investments with maturities of less than one year at
the date of acquisition. Market values disclosed are based on
NAIC quoted values.
Asset Valuation Reserve and Interest Maintenance Reserve
The Asset Valuation Reserve and Interest Maintenance Reserve
were determined by NAIC prescribed formulas and are reported
as liabilities rather than as valuation allowances or
appropriations of surplus.
Policy and Contract Claims
<PAGE> - 145 -
<PAGE>
Policy and contract claims are determined on an individual
case basis for reported losses. Estimates of incurred but not
reported losses are developed on the basis of past experience.
<PAGE> - 146 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
2. Significant Accounting Policies (continued)
Separate Accounts
Separate account assets and liabilities reported in the
accompanying financial statements represent funds that are
separately administered, principally for variable annuity and
variable life contracts. For the majority of these contracts
the contractholder, rather than the Company, bears the
investment risk. Separate account assets are recorded at
market value. Operations of the separate accounts are not
included in the accompanying financial statements.
Revenue Recognition
Both premium and investment income are recorded when due.
Reinsurance
Reinsurance premiums and claims are accounted for on a basis
consistent with that used in accounting for the original
policies issued and the terms of the reinsurance contracts.
Premiums and claims are reported net of reinsured amounts.
Policy Reserves
Certain policy reserves are calculated based on statutorily
required interest and mortality assumptions.
3. Investments and Investment Income
The amortized cost and market value of investments in fixed
maturities (bonds) as of December 31, 1994 are summarized as
follows:
<TABLE>
<CAPTION>
Quoted or
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities $34,265,152 $243,971 $(441,592) $34,067,531
Foreign government
securities 7,388,458 - (294,385) 7,094,073
Corporate securities 10,495,470 2,457 (577,136) 9,920,791
$52,149,080 $246,428 $(1,313,113) $51,082,395
</TABLE>
<PAGE> - 147 -
<PAGE>
Proceeds from sales of investments in debt securities during
1994 were $43,175,845. Gross gains of $167,738 and gross
losses of $1,006,702 were realized on those sales.
<PAGE> - 148 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
3. Investments and Investment Income (continued)
The amortized cost and market value of investments in fixed
maturities (bonds) as of December 31, 1993 are summarized as
follows:
<TABLE>
<CAPTION>
Quoted or
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government securities $15,473,821 725,851 $(19,830) $16,179,842
Foreign government
securities 3,277,886 39,710 (5,316) 3,312,280
Corporate securities 4,624,066 47,402 (43,392) 4,628,076
$23,375,773 $812,963 $(68,538) $24,120,198
</TABLE>
Proceeds from sales of investments in debt securities during
1993 were $28,248,633. Gross gains of $694,800 and gross
losses of $17,715 were realized on those sales.
The investments above are valued, for financial statement
purposes, as described in Note 2 to these financial
statements.
The amortized cost and market value of fixed maturities at
December 31, 1994 by contractual maturities, are shown below.
Expected maturities may differ from contractual maturities
because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Years to Maturity Amortized Cost Market Value
<S> <C> <C>
One year or less $107,413 $108,160
Greater than 1; up to 5 years 5,213,296 5,217,002
Greater than 5; up to 10 years 24,217,449 23,599,525
Due after 10 years 22,610,922 22,157,708
$52,149,080 $51,082,395
</TABLE>
At December 31, 1994, $4,447,934 of bonds at amortized cost
were on deposit with government insurance departments to
satisfy regulatory regulations.
<PAGE> - 149 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
3. Investments and Investment Income (continued)
Major categories of net investment income for each year were
as follows:
<TABLE>
<CAPTION>
Net Investment Income
1994 1993 1992
<S> <C> <C> <C>
Gross investment income:
Dividends; Manulife Series
Fund, Inc. (Note 9) $ 1,244,794 $1,440,392 $ -
Bond income 1,712,294 1,422,064 1,043,273
Policy loans 236,972 166,514 131,606
Short-term investments 501,477 384,178 313,998
3,695,537 3,413,148 1,488,877
Investment expenses (106,908) (89,786) (58,423)
Net investment income $3,588,629 $3,323,962 $1,430,454
</TABLE>
4. Related Party Transactions
The Company has a formal service agreement with Manulife
Financial which can be terminated by either party upon two
months' notice. Under the Agreement, the Company will pay
direct operating expenses incurred each year by Manulife
Financial on behalf of the Company. Services provided under
the Agreement include legal, actuarial, investment, data
processing and certain other administrative services. Costs
incurred under this Agreement were $21,326,446 in 1994,
$12,467,474 in 1993, and $4,919,667 in 1992. In addition,
there were $7,795,184 agents' bonuses in 1994, $5,363,558 in
1993, and $1,871,799 in 1992 which were allocated to the
Company and are included in commissions.
In addition, the Company has several reinsurance agreements
with Manulife Financial which may be terminated upon the
specified notice by either party. These agreements are
summarized as follows:
(a) The Company assumes two blocks of insurance from Manulife
Financial under coinsurance treaties. The Company's risk
is limited to $100,000 of initial face amount per claim
plus a pro-rata share of any increase in face amount.
(b) The Company cedes the risk in excess of $25,000 per life
to Manulife Financial under the terms of an
automatic reinsurance agreement.
<PAGE> - 150 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
4. Related Party Transactions (continued)
(c) The Company cedes a substantial portion of its risk on
its Flexible Premium Variable Life policies to Manulife
Financial under the terms of a stop loss reinsurance
agreement.
(d) Under the terms of an automatic coinsurance agreement,
the Company cedes its risk on structured settlements to
Manulife Financial.
Selected amounts relating to the above treaties reflected in
the financial statements are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Life and annuity premiums assumed $25,385,628 $12,745,981 $6,579,233
Other life and annuity
considerations ceded (437,650) (201,685) (114,505)
Commissions and expense allowances
on reinsurance assumed (810,252) (329,634) (269,141)
Policy reserves assumed 47,672,591 23,070,952 10,799,350
Policy reserves ceded 3,786,647 3,782,156 3,662,930
</TABLE>
During 1992 and 1993 the Company assumed the first $50,000 of
initial face amount on two blocks of business. This resulted
in transfers of $5,031,000 and $10,837,000, respectively, to
establish the initial reserves. In 1994 the treaties were
amended to assume the first $100,000 of initial face amount
for the same blocks of business. This resulted in a transfer
of $21,477,000 to establish the additional reserve.
Commissions equal to 17% are charged for all renewed premiums
related to these contracts.
During 1994, the Company terminated another treaty resulting
in a premium to Manulife Financial to transfer the reserve of
$799,874.
<PAGE> - 151 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
5. Federal Income Tax
The Company joins the Parent, The Manufacturers Life Insurance
Co. (U.S.A.) and Manufacturers Reinsurance Limited in filing a
U.S. consolidated income tax return as a life insurance group
under provisions of the Internal Revenue Code. In accordance
with an income tax-sharing agreement dated December 29, 1983,
the Company's income tax provision (or benefit) is computed as
if the Company filed a separate income tax return. The
Company receives no surtax exemption. Tax benefits from
operating losses are provided at the U.S. statutory rate plus
any tax credits attributable to the Company, provided the
consolidated group utilizes such benefits currently. In 1994,
1993, and 1992, the Company's provision (benefit) based upon
the above agreement will be paid to one or more members of the
consolidated group in accordance with the income tax-sharing
agreement.
The Company, Parent and The Manufacturers Life Insurance Co.
(U.S.A.) have available consolidated net operating losses of
approximately $92,600,000 which will expire in the years 2007
to 2009, and capital loss carryforwards of $129,600,000 which
will expire in 1999. The losses of the Company, Parent and
The Manufacturers Life Insurance Co. (U.S.A.) may be used to
offset the ordinary and capital gain income of Manufacturers
Reinsurance Limited. However, losses of Manufacturers
Reinsurance Limited may not be used to offset the income of
the other members of the consolidated group.
6. Statutory Restrictions on Dividends
The Company is subject to statutory limitations on the payment
of dividends to its Parent. The Company cannot pay dividends
during 1995 without the prior approval of insurance regulatory
authorities.
7. Reinsurance
The Company cedes reinsurance as a party to several
reinsurance treaties with major unrelated insurance companies.
Summary financial information related to these reinsurance
activities is as follows:
<PAGE> - 152 -
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Life insurance premiums assumed $ - $ - $28,887,669
Life insurance premiums ceded (218,767) (130,913) (28,809,307)
</TABLE>
During 1992, the Company assumed and ceded a significant block
of business on a yearly renewable term basis. This contract
was not renewed in 1993.
<PAGE> - 153 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
8. Aggregate Policy Reserves
Aggregate policy reserves for life policies including variable
life are based on statutory mortality tables and interest
assumptions using either the net level or commissioners'
reserve valuation method. The composition of the aggregate
policy reserves at December 31, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
Mortality Interest
Aggregate Reserves Table Rates
1994 1993
<S> <C> <C> <C>
$ - $758,158 1958 CSO 4%
28,553,885 11,792,874 1980 CSO 4%
(189,080) (62,228) Reinsurance ceded
1,396,369 530,801 Miscellaneous
$29,761,174 $13,019,605
</TABLE>
9. Investment in Separate Accounts
During 1984, the Company initiated plans to market variable
life insurance products through Separate Account One of The
Manufacturers Life Insurance Company of America ("Separate
Account One") using Manulife Series Fund, Inc. as its
investment vehicle. Initial capitalization was $15,000,000.
Through 1988, the Company provided an additional
capitalization of $6,000,000.
In December 1993, the Company transferred all of its shares,
related to seed money, in Manulife Series Fund, Inc. out of
Separate Account One to the General Account. At December 31,
1994, the $25,629,580 common stock represents the Company's
seed money investment in Manulife Series Fund, Inc.
During 1994, 1993, and 1992, the following dividends were
received from Manulife Series Fund, Inc.:
<PAGE> - 154 -
<PAGE>
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Separate Account One $38,732 $1,610,693 $3,166,712
Separate Account Two 4,574,620 7,377,861 1,706,218
Separate Account Three 1,490,374 666,141 277,830
Separate Account Four 3,072,376 4,966,559 1,578,932
General Account 1,244,794 1,440,392 -
</TABLE>
<PAGE> - 155 -
<PAGE>
The Manufacturers Life Insurance Company of America
Notes to Financial Statements (continued)
9. Investment in Separate Accounts (continued)
Dividends have been reinvested by the Company in Manulife
Series Fund, Inc.
During 1993, the Company withdrew $8,000,000 of its seed money
and accumulated earnings from Separate Account One and the
Manulife Series Fund, Inc. and utilized these funds to pay
down its intercompany debt.
During 1994, the Company withdrew $13,011,137 of its seed
money and accumulated earnings from the Manulife Series Fund,
Inc. and utilized these funds to pay down its intercompany
debt.
<PAGE> - 156 -
<PAGE>
APPENDIX
What Are Some Illustrations Of Policy Values, Cash Surrender
Values And Death Benefits?
<REDLINE>
The following tables have been prepared to help show how
values under the Policy change with investment performance.
The tables include both Policy Values and Cash Surrender
Values as well as Death Benefits. The Policy Value is the sum
of the values in the Investment Accounts, as the tables assume
no values in the Guaranteed Interest Account or Loan Account.
The Cash Surrender Value is the Policy Value less the deferred
sales charge and deferred underwriting charge. The tables
illustrate how Policy Values and Cash Surrender Values, which
reflect the deduction of all applicable charges including the
premium tax charge and the sales charge, and death benefits of
the Policy on an insured of a given age would vary over time
if the return on the assets of the Portfolios was a uniform,
gross, after-tax, annual rate of 0%, 6% or 12%. The Policy
Values, death benefits and Cash Surrender Values would be
different from those shown if the returns averaged 0%, 6% or
12%, but fluctuated over and under those averages throughout
the years.
The amounts shown for the Policy Value, death benefit and Cash
Surrender Value as of each policy year reflect the fact that
the net investment return on the assets held in the
sub-accounts is lower than the gross, after-tax return. This
is because the daily charge to the Separate Account for
assuming mortality and expense risks (0.65% on an annual
basis) and the expenses and fees borne by the Manulife Series
Fund and NASL Series Trust are deducted from the gross return.
The illustrations reflect an average of those Portfolios'
expenses, which is approximately .76% on an annual basis. The
gross annual rates of return of 0%, 6% and 12% correspond to
approximate net annual rates of return of -1.40%, 4.52%, and
10.43%.
The tables assume that no premiums have been allocated to the
Guaranteed Interest Account, that planned premiums are paid on
the policy anniversary and that no transfers, partial
withdrawals, policy loans, changes in death benefit options or
changes in face amount have been made. The tables reflect the
fact that no charges for federal, state or local taxes are
currently made against the Separate Account. If such a charge
is made in the future, it will take a higher gross rate of
return to produce after-tax returns of 0%, 6% and 12% than it
does now.
There are two tables shown for each combination of age and
death benefit option for male nonsmokers, one based on current
<PAGE> - 157 -
<PAGE>
cost of insurance charges assessed by the Company and the
other based on the maximum cost of insurance charges based on
the 1980 Commissioners Standard Ordinary Smoker/ Nonsmoker
Mortality Tables. Current cost of insurance charges are not
guaranteed and may be changed. Upon request, Manufacturers
Life of America will furnish a comparable illustration based
on the proposed life insured's age, sex and risk class, any
additional ratings and the death benefit option, face amount
and planned premium requested. Illustrations for smokers would
show less favorable results than the illustrations shown
below.
From time to time, in advertisements or sales literature for
the Policies that quote performance data of one or more of the
Portfolios, the Company may include cash surrender values and
death benefit figures computed using the same methodology as
that used in the following illustrations, but with the average
annual total return of the Portfolio for which performance
data is shown in the advertisement replacing the hypothetical
rates of return shown in the following tables.
The Policies were first sold to the public on December 7,
1987. However, total return data may be advertised for as long
a period of time as the underlying Portfolio has been in
existence. The results for any period prior to the Policies
being offered would be calculated as if the Policies had been
offered during that period of time, with all charges assumed
to be the same as for the first full year the Policies were
offered.
</REDLINE>
<PAGE> - 158 -
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 25
$100,000 Face Amount Death Benefit Option 1
$575 Annual Planned Premium
ASSUMING CURRENT CHARGES
<TABLE>
<REDLINE>
0% Hypothetical
Gross Investment Return
<CAPTION>
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $383 $0 $100,000
2 1,238 756 0 100,000
3 1,903 1,115 348 100,000
4 2,602 1,462 695 100,000
5 3,336 1,798 1,031 100,000
6 4,107 2,122 1,432 100,000
7 4,916 2,433 1,820 100,000
8 5,765 2,735 2,198 100,000
9 6,657 3,027 2,567 100,000
10 7,594 3,306 2,923 100,000
15 13,028 4,498 4,498 100,000
20 19,964 5,284 5,284 100,000
25 28,815 5,482 5,482 100,000
30 40,112 4,881 4,881 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
<PAGE> - 159 -
<PAGE>
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 160 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $411 $0 $100,000
2 1,238 834 67 100,000
3 1,903 1,269 501 100,000
4 2,602 1,716 949 100,000
5 3,336 2,177 1,410 100,000
6 4,107 2,651 1,960 100,000
7 4,916 3,138 2,524 100,000
8 5,765 3,642 3,105 100,000
9 6,657 4,164 3,704 100,000
10 7,594 4,701 4,318 100,000
15 13,028 7,622 7,622 100,000
20 19,964 10,929 10,929 100,000
25 28,815 14,531 14,531 100,000
30 40,112 18,305 18,305 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
<PAGE> - 161 -
<PAGE>
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 162 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12%Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $438 $0 $100,000
2 1,238 916 149 100,000
3 1,903 1,435 668 100,000
4 2,602 2,002 1,235 100,000
5 3,336 2,622 1,854 100,000
6 4,107 3,298 2,607 100,000
7 4,916 4,037 3,423 100,000
8 5,765 4,848 4,311 100,000
9 6,657 5,739 5,279 100,000
10 7,594 6,715 6,331 100,000
15 13,028 13,209 13,209 100,000
20 19,964 23,590 23,590 100,000
25 28,815 40,338 40,338 100,000
30 40,112 67,830 67,830 106,493
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
<PAGE> - 163 -
<PAGE>
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 164 -
<PAGE>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 25
$100,000 Face Amount Death Benefit Option 1
$575 Annual Planned Premium
ASSUMING GUARANTEED CHARGES
<TABLE>
<REDLINE>
<CAPTION>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $383 $0 $100,000
2 1,238 700 0 100,000
3 1,903 1,015 247 100,000
4 2,602 1,327 560 100,000
5 3,336 1,636 869 100,000
6 4,107 1,940 1,250 100,000
7 4,916 2,238 1,625 100,000
8 5,765 2,530 1,993 100,000
9 6,657 2,813 2,353 100,000
10 7,594 3,087 2,703 100,000
15 13,028 4,271 4,271 100,000
20 19,964 5,031 5,031 100,000
25 28,815 5,181 5,181 100,000
30 40,112 4,388 4,388 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
<PAGE> - 165 -
<PAGE>
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 166 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $411 0 $100,000
2 1,238 777 9 100,000
3 1,903 1,162 394 100,000
4 2,602 1,567 800 100,000
5 3,336 1,991 1,223 100,000
6 4,107 2,434 1,744 100,000
7 4,916 2,896 2,282 100,000
8 5,765 3,376 2,839 100,000
9 6,657 3,873 3,413 100,000
10 7,594 4,388 4,005 100,000
15 13,028 7,204 7,204 100,000
20 19,964 10,359 10,359 100,000
25 28,815 13,742 13,742 100,000
30 40,112 17,092 17,092 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
<PAGE> - 167 -
<PAGE>
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 168 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $438 $0 $100,000
2 1,238 857 90 100,000
3 1,903 1,322 555 100,000
4 2,602 1,838 1,071 100,000
5 3,336 2,409 1,642 100,000
6 4,107 3,041 2,350 100,000
7 4,916 3,736 3,123 100,000
8 5,765 4,502 3,965 100,000
9 6,657 5,345 4,885 100,000
10 7,594 6,271 5,887 100,000
15 13,028 12,445 12,445 100,000
20 19,964 22,274 22,274 100,000
25 28,815 38,078 38,078 100,000
30 40,112 63,903 63,903 100,328
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
<PAGE> - 169 -
<PAGE>
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 170 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 25
$100,000 Face Amount Death Benefit Option 2
$575 Annual Planned Premium
ASSUMING CURRENT CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $383 $0 $100,383
2 1,238 754 0 100,754
3 1,903 1,112 345 101,112
4 2,602 1,458 691 101,458
5 3,336 1,792 1,025 101,792
6 4,107 2,113 1,423 102,113
7 4,916 2,422 1,808 102,422
8 5,765 2,720 2,183 102,720
9 6,657 3,007 2,547 103,007
10 7,594 3,282 2,898 103,282
15 13,028 4,437 4,437 104,437
20 19,964 5,162 5,162 105,162
25 28,815 5,265 5,265 105,265
30 40,112 4,533 4,533 104,533
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
<PAGE> - 171 -
<PAGE>
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 172 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $410 $0 $100,410
2 1,238 833 65 100,833
3 1,903 1,266 499 101,266
4 2,602 1,711 944 101,711
5 3,336 2,169 1,402 102,169
6 4,107 2,639 1,949 102,639
7 4,916 3,122 2,508 103,122
8 5,765 3,621 3,084 103,621
9 6,657 4,136 3,675 104,136
10 7,594 4,664 4,280 104,664
15 13,028 7,509 7,509 107,509
20 19,964 10,651 10,651 110,651
25 28,815 13,912 13,912 113,912
30 40,112 17,023 17,023 117,023
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
<PAGE> - 173 -
<PAGE>
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 174 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $438 $0 $100,438
2 1,238 914 147 100,914
3 1,903 1,432 665 101,432
4 2,602 1,997 1,229 101,997
5 3,336 2,612 1,845 102,612
6 4,107 3,283 2,593 103,283
7 4,916 4,015 3,401 104,015
8 5,765 4,817 4,280 104,817
9 6,657 5,697 5,237 105,697
10 7,594 6,658 6,275 106,658
15 13,028 12,998 12,998 112,998
20 19,964 22,945 22,945 122,945
25 28,815 38,525 38,525 138,525
30 40,112 63,014 63,014 163,014
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
<PAGE> - 175 -
<PAGE>
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 176 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 25
$100,000 Face Amount Death Benefit Option 2
$575 Annual Planned Premium
ASSUMING GUARANTEED CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 383 $0 $100,383
2 1,238 698 0 100,698
3 1,903 1,011 244 101,011
4 2,602 1,322 555 101,322
5 3,336 1,628 861 101,628
6 4,107 1,930 1,240 101,930
7 4,916 2,225 1,611 102,225
8 5,765 2,512 1,975 102,512
9 6,657 2,791 2,331 102,791
10 7,594 3,060 2,676 103,060
15 13,028 4,210 4,210 104,210
20 19,964 4,909 4,909 104,909
25 28,815 4,965 4,965 104,965
30 40,112 4,040 4,040 104,040
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
<PAGE> - 177 -
<PAGE>
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 178 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $410 $0 $100,410
2 1,238 775 8 100,775
3 1,903 1,158 391 101,158
4 2,602 1,560 793 101,560
5 3,336 1,981 1,214 101,981
6 4,107 2,421 1,730 102,421
7 4,916 2,877 2,263 102,877
8 5,765 3,351 2,814 103,351
9 6,657 3,842 3,381 103,842
10 7,594 4,348 3,964 104,348
15 13,028 7,090 7,090 107,090
20 19,964 10,082 10,082 110,082
25 28,815 13,129 13,129 113,129
30 40,112 15,810 15,810 115,810
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
<PAGE> - 179 -
<PAGE>
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 180 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $604 $438 $0 $100,438
2 1,238 855 88 100,855
3 1,903 1,318 550 101,318
4 2,602 1,831 1,064 101,831
5 3,336 2,398 1,630 102,398
6 4,107 3,023 2,333 103,023
7 4,916 3,711 3,098 103,711
8 5,765 4,468 3,931 104,468
9 6,657 5,298 4,838 105,298
10 7,594 6,209 5,825 106,209
15 13,028 12,231 12,231 112,231
20 19,964 21,631 21,631 121,631
25 28,815 36,284 36,284 136,284
30 40,112 59,070 59,070 159,070
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
<PAGE> - 181 -
<PAGE>
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 182 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 45
$100,000 Face Amount Death Benefit Option 1
$1,325 Annual Planned Premium
ASSUMING CURRENT CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $896 $0 $100,000
2 2,852 1,762 202 100,000
3 4,386 2,591 1,031 100,000
4 5,996 3,382 1,822 100,000
5 7,688 4,128 2,568 100,000
6 9,463 4,830 3,426 100,000
7 11,328 5,482 4,234 100,000
8 13,285 6,092 5,000 100,000
9 15,341 6,652 5,716 100,000
10 17,499 7,165 6,385 100,000
15 30,021 8,936 8,936 100,000
20 46,003 8,941 8,941 100,000
25 66,400 4,663 4,663 100,000
30 92,433 0(4) 0(4) 0(4)
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
<PAGE> - 183 -
<PAGE>
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 184 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $960 $0 $100,000
2 2,852 1,945 385 100,000
3 4,386 2,949 1,389 100,000
4 5,996 3,973 2,413 100,000
5 7,688 5,008 3,448 100,000
6 9,463 6,058 4,654 100,000
7 11,328 7,116 5,868 100,000
8 13,285 8,190 7,098 100,000
9 15,341 9,275 8,339 100,000
10 17,499 10,371 9,591 100,000
15 30,021 15,997 15,997 100,000
20 46,003 21,557 21,557 100,000
25 66,400 24,883 24,883 100,000
30 92,433 23,366 23,366 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
<PAGE> - 185 -
<PAGE>
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 186 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $1,023 $0 $100,000
2 2,852 2,135 575 100,000
3 4,386 3,338 1,778 100,000
4 5,996 4,640 3,080 100,000
5 7,688 6,044 4,484 100,000
6 9,463 7,563 6,159 100,000
7 11,328 9,204 7,956 100,000
8 13,285 10,987 9,895 100,000
9 15,341 12,923 11,987 100,000
10 17,499 15,031 14,251 100,000
15 30,021 28,881 28,881 100,000
20 46,003 51,063 51,063 100,000
25 66,400 87,773 87,773 101,816
30 92,433 149,516 149,516 159,982
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
<PAGE> - 187 -
<PAGE>
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 188 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Non-Smoker Issue Age 45
$100,000 Face Amount Death Benefit Option 1
$1,325 Annual Planned Premium
ASSUMING GUARANTEED CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $896 $0 $100,000
2 2,852 1,705 145 100,000
3 4,386 2,477 917 100,000
4 5,996 3,212 1,652 100,000
5 7,688 3,907 2,347 100,000
6 9,463 4,560 3,156 100,000
7 11,328 5,166 3,918 100,000
8 13,285 5,719 4,627 100,000
9 15,341 6,214 5,278 100,000
10 17,499 6,645 5,865 100,000
15 30,021 7,635 7,635 100,000
20 46,003 5,834 5,834 100,000
25 66,400 0(4) 0(4) 100,000(4)
30 92,433 0(5) 0(5) 0(5)
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) Provided the Minimum Premium Requirement has been met,
the death benefit guarantee will have kept the Policy in
force until this point, i.e. the policy anniversary on
which the life insured is 70 years old, at which time the
death benefit guarantee will expire and in the absence of
additional premium payments the Policy will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
<PAGE> - 189 -
<PAGE>
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 190 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) enefit
<S> <C> <C> <C> <C>
1 $1,391 $960 $0 $100,000
2 2,852 1,886 326 100,000
3 4,386 2,828 1,268 100,000
4 5,996 3,787 2,227 100,000
5 7,688 4,759 3,199 100,000
6 9,463 5,744 4,340 100,000
7 11,328 6,737 5,489 100,000
8 13,285 7,732 6,640 100,000
9 15,341 8,724 7,788 100,000
10 17,499 9,708 8,928 100,000
15 30,021 14,280 14,280 100,000
20 46,003 17,398 17,398 100,000
25 66,400 16,666 16,666 100,000
30 92,433 6,831 6,831 100,000
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) Provided the Minimum Premium Requirement has been met,
the death benefit guarantee will have kept the Policy in
force until this point, i.e. the policy anniversary on
which the life insured is 70 years old, at which time the
death benefit guarantee will expire and in the absence of
additional premium payments the Policy will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
<PAGE> - 191 -
<PAGE>
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 192 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $1,023 $0 $100,000
2 2,852 2,074 515 100,000
3 4,386 3,210 1,650 100,000
4 5,996 4,438 2,878 100,000
5 7,688 5,764 4,204 100,000
6 9,463 7,200 5,796 100,000
7 11,328 8,750 7,502 100,000
8 13,285 10,424 9,332 100,000
9 15,341 12,229 11,293 100,000
10 17,499 14,176 13,396 100,000
15 30,021 26,540 26,540 100,000
20 46,003 45,313 45,313 100,000
25 66,400 75,844 75,844 100,000
30 92,433 129,308 129,308 138,360
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) Provided the Minimum Premium Requirement has been met,
the death benefit guarantee will have kept the Policy in
force until this point, i.e. the policy anniversary on
which the life insured is 70 years old, at which time the
death benefit guarantee will expire and in the absence of
additional premium payments the Policy will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
<PAGE> - 193 -
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 194 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 45
$100,000 Face Amount Death Benefit Option 2
$1,325 Annual Planned Premium
ASSUMING CURRENT CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $893 $0 $100,893
2 2,852 1,754 194 101,754
3 4,386 2,573 1,014 102,573
4 5,996 3,352 1,792 103,352
5 7,688 4,081 2,521 104,081
6 9,463 4,761 3,357 104,761
7 11,328 5,387 4,139 105,387
8 13,285 5,965 4,873 105,965
9 15,341 6,487 5,551 106,487
10 17,499 6,956 6,176 106,956
15 30,021 8,409 8,409 108,409
20 46,003 7,901 7,901 107,901
25 66,400 2,922 2,922 102,922
30 92,433 0(4) 0(4) 0(4)
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
<PAGE> - 195 -
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 196 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $956 $0 $100,956
2 2,852 1,935 375 101,935
3 4,386 2,929 1,369 102,929
4 5,996 3,937 2,377 103,937
5 7,688 4,950 3,390 104,950
6 9,463 5,969 4,565 105,969
7 11,328 6,988 5,740 106,988
8 13,285 8,012 6,920 108,012
9 15,341 9,034 8,098 109,034
10 17,499 10,054 9,274 110,054
15 30,021 15,002 15,002 115,002
20 46,003 19,051 19,051 119,051
25 66,400 18,949 18,949 118,949
30 92,433 11,089 11,089 111,089
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
<PAGE> - 197 -
<PAGE>
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 198 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $1,020 $0 $101,020
2 2,852 2,125 565 102,125
3 4,386 3,314 1,755 103,314
4 5,996 4,597 3,037 104,597
5 7,688 5,971 4,411 105,971
6 9,463 7,449 6,045 107,449
7 11,328 9,032 7,784 109,032
8 13,285 10,739 9,647 110,739
9 15,341 12,574 11,638 112,574
10 17,499 14,551 13,771 114,551
15 30,021 27,004 27,004 127,004
20 46,003 45,043 45,043 145,043
25 66,400 68,784 68,784 168,784
30 92,433 98,875 98,875 198,875
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
<PAGE> - 199 -
<PAGE>
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 200 -
<PAGE>
<TABLE>
<CAPTION>
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Male Nonsmoker Issue Age 45
$100,000 Face Amount Death Benefit Option 2
$1,325 Annual Planned Premium
ASSUMING GUARANTEED CHARGES
<REDLINE>
0% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $893 $0 $100,893
2 2,852 1,695 135 101,695
3 4,386 2,458 898 102,458
4 5,996 3,178 1,618 103,178
5 7,688 3,855 2,295 103,855
6 9,463 4,485 3,081 104,485
7 11,328 5,062 3,814 105,062
8 13,285 5,582 4,490 105,582
9 15,341 6,027 5,101 106,037
10 17,499 6,421 5,641 106,421
15 30,021 7,058 7,058 107,058
20 46,003 4,728 4,728 104,728
25 66,400 0(4) 0(4) 100,000(4)
30 92,433 0(5) 0(5) 0(5)
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
<PAGE> - 201 -
<PAGE>
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 202 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
6% Hypothetical
Gross Investment Return
End of Cash
Policy Aaccumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $956 $0 $100,956
2 2,852 1,875 315 101,875
3 4,386 2,806 1,246 102,806
4 5,996 3,746 2,186 103,746
5 7,688 4,694 3,134 104,694
6 9,463 5,647 4,243 105,647
7 11,328 6,597 5,349 106,597
8 13,285 7,539 6,447 107,539
9 15,341 8,465 7,529 108,465
10 17,499 9,365 8,585 109,365
15 30,021 13,176 13,176 113,176
20 46,003 14,577 14,577 114,577
25 66,400 10,545 10,545 110,545
30 92,433 0(5) 0(5) 0(5)
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
<PAGE> - 203 -
<PAGE>
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 204 -
<PAGE>
<TABLE>
<REDLINE>
<CAPTION>
12% Hypothetical
Gross Investment Return
End of Cash
Policy Accumulated Policy Surrender Death
Year(1) Premiums(2) Value Value(3) Benefit
<S> <C> <C> <C> <C>
1 $1,391 $1,020 $0 $101,020
2 2,852 2,063 503 102,063
3 4,386 3,184 1,624 103,184
4 5,996 4,389 2,829 104,389
5 7,688 5,684 4,124 105,684
6 9,463 7,074 5,670 107,074
7 11,328 8,563 7,315 108,563
8 13,285 10,154 9,062 110,154
9 15,341 11,851 10,915 111,851
10 17,499 13,655 12,875 113,655
15 30,021 24,438 24,438 124,438
20 46,003 38,309 38,309 138,309
25 66,400 54,457 54,457 154,457
30 92,433 70,144 70,144 170,144
</TABLE>
(1) All values shown are as of the end of the policy year
indicated and assume that (a) premiums paid after the
initial premium are received on the policy anniversary,
(b) no policy loan has been made, (c) no partial
withdrawal of the Cash Surrender Value has been made and
(d) no premiums have been allocated to the Guaranteed
Interest Account.
(2) Assumes net interest of 5% compounded annually.
(3) Provided the Minimum Premium Requirement has been and
continues to be met, the death benefit guarantee will
keep the Policy in force until the policy anniversary on
which the life insured is 70 years old.
(4) In the absence of additional premium payments, the Policy
will lapse.
(5) In the absence of additional premium payments, the Policy
will lapse.
THE POLICY VALUE, CASH SURRENDER VALUE AND THE DEATH BENEFIT
WILL DIFFER IF PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR
FREQUENCIES.
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RETURNS ARE
ILLUSTRATIVE ONLY, AND SHOULD NOT BE DEEMED A REPRESENTATION
OF PAST OR FUTURE RESULTS. ACTUAL INVESTMENT RETURNS MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF
FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE
<PAGE> - 205 -
<PAGE>
POLICYOWNER, AND THE INVESTMENT RETURNS FOR THE FUNDS OF
MANULIFE SERIES FUND, INC. AND NASL SERIES TRUST. THE POLICY
VALUE, CASH SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY
WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL RATES OF
INVESTMENT RETURN AVERAGED THE RATE SHOWN ABOVE OVER A PERIOD
OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATIONS CAN BE MADE THAT
THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE
YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
</REDLINE>
<PAGE> - 206 -
<PAGE>
PART II. OTHER INFORMATION
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and
documents:
The facing sheet;
The Prospectus, consisting of _____ pages;
The signatures;
Written consents of the following persons:
Jones & Blouch L.L.P.
Ernst & Young LLP
John R. Ostler
The following exhibits, filed as part of this Post-Effective
Amendment No. 9 are incorporated herein by reference to the
designated filings:
1. Copies of all exhibits required by paragraph A of the
instructions as to exhibits in Form N-8B-2 are set
forth below under designations based on such
instructions:
A(1)
Resolutions of Board of Directors of The
Manufacturers Life Insurance Company of
America establishing Separate Account
Four, previously filed as Exhibit A(1) to
Registrant's registration statement on
Form S-6, April 24, 1987.
A(3) (a)(i) Distribution Agreement between The
Manufacturers Life Insurance Company of
America and ManEquity, Inc., previously
filed as Exhibit (A)(3)(a) to Pre-
Effective Amendment No. 1, August 13,
1987.
A(3)(a)(ii) Amendment to Distribution Agreement,
previously filed as Exhibit A(3)(a)(ii) to
<PAGE> - 207 -
<PAGE>
Post-Effective Amendment No. 9, February
28, 1992.
A(3)(b)(i) Specimen agreement between ManEquity, Inc.
and registered representatives, previously
filed as Exhibit A(3)(b)(i) to Post-
Effective Amendment No.9, February 28,
1992.
A(3)(b)(ii) Specimen agreement between ManEquity, Inc.
and dealers, previously filed as Exhibit
A(3)(b)(ii) to Post-Effective Amendment
No. 11, February 26, 1993.
A(3)(c) Schedule of Sales Commissions, previously
filed as Exhibit A(3)(c) to Post-Effective
Amendment No. 9, February 28, 1992.
A(5)(a) Form of Flexible Premium Variable Life
Insurance Policy, as amended, previously
filed as Exhibit A(5) to Pre-Effective
Amendment No. 2, November 19, 1987.
A(5)(b) Endorsement to Flexible Premium Variable
Life Insurance Policy, previously filed as
Exhibit A(5)(b) to Post-Effective
Amendment No. 9, February 28, 1992.
A(5)(c) Endorsement to Flexible Premium Variable
Life Insurance Policy re redomestication,
previously filed as Exhibit A(5)(c) to
Post-Effective Amendment No. 11, February
26, 1993.
A(6)(a) Restated Articles of Redomestication of
The Manufacturers Life Insurance Company
of America, previously filed as Exhibit
A(6)(a) to Post-Effective Amendment No.
11, February 26, 1993.
A(6)(b) By-Laws of The Manufacturers Life
Insurance Company of America, previously
filed as Exhibit A(6)(b) to Post-Effective
Amendment No. 11, February 26, 1993.
A(8)(a) Service Agreement between The
Manufacturers Life Insurance Company of
America and The Manufacturers Life
Insurance Company, previously filed as
Exhibit 1.A(8)(a) to Post-Effective
Amendment No. 7 to the registration
<PAGE> - 208 -
<PAGE>
statement on Form N-4 of Separate Account
One of The Manufacturers Life Insurance
Company of America (File No. 2-88607),
March 2, 1989.
A(8)(a)(i) Amendment to Service Agreement, previously
filed as Exhibit A(8)(a)(i) to Post-
Effective Amendment No. 11, February 26,
1993.
A(8)(a)(ii) Amendments to Service Agreement: May 31,
1993 and June 30, 1993. Previously filed
as Exhibit A(8)(a)(ii) to Post-Effective
Amendment No. 13, March 1, 1994.
A(8)(b) Stoploss Reinsurance Agreement between The
Manufacturers Life Insurance Company of
America and The Manufacturers Life
Insurance Company, previously filed as
Exhibit A(8)(b) to Pre-Effective Amendment
No. 1, August 13, 1987.
A(8)(c) Automatic Coinsurance Agreement between
The Manufacturers Life Insurance Company
of America and The Manufacturers Life
Insurance Company, previously filed as
Exhibit (7) to Pre-Effective Amendment No.
1 to the registration statement on Form N-
4 of Separate Account Two of The
Manufacturers Life Insurance Company of
America (File No. 33-14499), September 4,
1987.
A(8)(d) Service Agreement between between The
Manufacturers Life Insurance Company and
ManEquity, Inc. dated January 2, 1991 as
amended March 1, 1994, previously filed as
Exhibit A(8)(d) to Post-Effective
Amendment No. 14, April 26, 1994.
A(10)(a) Form of Application for Flexible Premium
Variable Life Insurance Policy, previously
filed as Exhibit A(10) to Pre-Effective
Amendment No. 1, August 13, 1987.
A(10)(b) Form of Streamlined Application for
Flexible Premium Variable Life Insurance
Policy, previously filed as Exhibit
A(10)(b) to Post-Effective Amendment No.
5, March 2, 1990.
<PAGE> - 209 -
<PAGE>
A(10)(c) Form of Short Form Application for
Flexible Premium Variable Life Insurance
Policy, previously filed as Exhibit
A(10)(c) to Post-Effective Amendment No.
5, March 2, 1990.
A(10)(d) Form of Application Supplement for
Flexible Premium Variable Life Insurance
Policy, previously filed as Exhibit
A(10)(d) to Post-Effective Amendment
No. 7, March 1, 1991.
2. See Exhibit A(5).
3. Opinion and consent of Stephen C. Nesbitt, Esq.,
General Counsel of The Manufacturers Life Insurance
Company of America, previously filed as Exhibit 3 to
Pre-Effective Amendment No. 1, August 13, 1987.
4. No financial statements are omitted from the prospectus
pursuant to instruction 1(b) or (c) of Part I.
5. Not applicable.
6. Opinion and consent of John R. Ostler, Vice-President,
Chief Actuary and Treasurer of The Manufacturers Life
Insurance Company of America.**
7. Form of notice of short term cancellation right and
request for refund, previously filed as Exhibit 7 to
pre-Effective Amendment No. 1, August 13, 1987.
8(a). Form of notice of right of surrender and refund,
previously filed as Exhibit 8 to Pre-Effective
Amendment No. 1, August 13, 1987.
8(b). Form of notice of right of surrender and refund (face
amount increase), previously filed as Exhibit 8(b) to
Post-Effective Amendment No. 9, February 28, 1992.
9. Memorandum Regarding Issuance, Face Amount Increase,
Redemption and Transfer Procedures for the Policies,
previously filed as Exhibit 9 to Post-Effective
Amendment No. 18, April 27, 1995.
10. Consent of Ernst & Young LLP.**
11. Consent of Jones & Blouch L.L.P.**
12. Financial Data Schedule.**
** Filed Herewith Electronically
<PAGE> - 210 -
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the
Investment Company Act of l940, the registrant, SEPARATE
ACCOUNT FOUR OF THE MANUFACTURERS LIFE INSURANCE COMPANY OF
AMERICA, and its depositor, THE MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA, have caused this amended registration
statement to be signed on their behalf in the City of Toronto,
Province of Ontario, Canada, on the 13th day of December,
1995.
[SEAL] SEPARATE ACCOUNT FOUR OF THE
MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA
(Registrant)
By: THE MANUFACTURERS LIFE
INSURANCE COMPANY OF AMERICA
(Depositor)
By: Donald A. Guloien
-----------------------------
DONALD A. GULOIEN
President
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA
By: Donald A. Guloien
-----------------------------
DONALD A.GULOIEN
President
Attest
Sheri L. Kocen
----------------
(60)SA4-486(a)
<PAGE> - 211 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
l933, this Registration Statement has been signed by the
following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Donald A. Guloien President and Director December 13, 1995
DONALD A. GULOIEN (Principal Executive Officer)
Director
SANDRA M. COTTER
Director
LEONARD V. DAY, Jr.
Stephen C. Nesbitt Director December 13, 1995
STEPHEN C. NESBITT
Joseph J. Pietroski Director December 13, 1995
JOSEPH J. PIETROSKI
John D. Richardson Director and Chairman December 13, 1995
JOHN D. RICHARDSON
Diane M. Schwartz Director December 13, 1995
DIANE M. SCHWARTZ
Douglas H. Myers Vice President, Finance December 13, 1995
DOUGLAS H. MYERS (Principal Financial and
Accounting Officer)
</TABLE>
<PAGE> - 212 -
<PAGE>
EXHIBITS
<PAGE> - 213 -
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
A(1) Resolutions of Board Previously filed as
of Directors of The Exhibit A(1) to Regis-
Manufacturers Life trant's registration
Insurance Company of statement on Form S-6,
America establishing April 24, 1987.
Separate Account Four
A(3)(a)(i) Distribution Agreement Previously filed as
between The Manufacturers Exhibit (A)(3)(a) to
Life Insurance Company of Pre-Effective Amendment
America and ManEquity, Inc. No. 1, August 13, 1987.
A(3)(a)(ii) Amendment to Distribution Previously filed as
Agreement. Exhibit A(3)(a)(ii) to
Post-Effective Amendment
No.9, February 28, 1992.
A(3)(b)(i) Specimen agreement Previously filed as
between ManEquity, Inc. Exhibit A(3)(b)(i) to
and registered repre- Post-Effective Amendment
sentatives. No. 9, February 28, 1992.
A(3)(b)(ii) Specimen agreement Previously filed as
between ManEquity, Inc. Exhibit A(3)(b)(ii) to
and dealers. Post-Effective Amendment
No. 11, February 26, 1993.
A(3)(c) Schedule of Sales Previously filed as
Commissions. Exhibit A(3)(c) to
Post-Effective Amendment
No. 9, February 28, 1992.
A(5)(a) Form of Flexible Premium Previously filed as
Variable Life Insurance Exhibit A(5) to Pre-
Policy, as amended Effective Amendment
No. 2, November 19, 1987.
A(5)(b) Endorsement to Flexible Previously filed as
Premium Variable Life Exhibit A(5)(b) to Post-
Insurance Policy. Effective Amendment
No. 9, February 28, 1992.
</TABLE>
<PAGE> - 214 -
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
A(5)(c) Endorsement to Flexible Previously filed as
Premium Variable Life Exhibit A(5)(c) to Post-
Insurance Policy re Effective Amendment No. 11,
redomestication. February 26, 1993.
A(6)(a) Restated Articles of Previously filed as
Redomestication of The Exhibit A(6)(a) to
Manufacturers Life Post-Effective Amendment
Insurance Company of No. 11, February 26, 1993.
America.
A(6)(b) By-Laws of The Manu- Previously filed as
facturers Life Insurance Exhibit A(6)(b) to
Company of America. Post-Effective Amendment
No. 11, February 26, 1993.
A(8)(a) Service Agreement between Previously filed as
The Manufacturers Life Exhibit 1.A(8)(a) to
Insurance Company of Post-Effective Amend-
America and The Manu- ment No. 7 to the
facturers Life Insurance registration statement
Company. on Form N-4 of Separate
Account One of The
Manufacturers Life Insurance
Company of America (File No.
2-88607), March 2, 1989.
A(8)(a)(i) Amendment to Service Previously filed as
Agreement Exhibit A(8)(a)(i) to
Post-Effective Amendment
No. 11, February 26, 1993.
A(8)(a)(ii) Amendments to Service Previously filed as
Agreement: May 31, 1993 Exhibit A(8)(a)(ii) to
and June 30, 1993 Post-Effective Amendment
No. 13, March 1, 1994.
A(8)(b) Stoploss Reinsurance Previously filed as
Agreement between The Exhibit A(8)(b) to
Manufacturers Life Pre-Effective Amend-
Insurance Company of ment No. 1, August 13, 1987
America and The Manu-
facturers Life Insurance
Company.
</TABLE>
<PAGE> - 215 -
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
A(8)(c) Automatic Coinsurance Previously filed as
Agreement between The Exhibit (7) to Pre-
Manufacturers Life Effective Amendment
Insurance Company of No. 1 to the regis-
America and The Manu- tration statement on
facturers Life Insurance Form N-4 of Separate
Company. Account Two of The Manu-
facturers Life Insurance
Company of America (File No.
33-14499), September 4, 1987.
A(8)(d) Service Agreement between Previously filed as
between The Manufacturers Exhibit A(8)(d) to Post-
Life Insurance Company and Effective Amendment
ManEquity, Inc. dated No. 14, April 26, 1994.
January 2, 1991 as amended
March 1, 1994.
A(10)(a) Form of Application for Previously filed as
Flexible Premium Variable Exhibit A(10) to Pre-
Life Insurance Policy. Effective Amendment No.
1, August 13, 1987.
A(10)(b) Form of Streamlined Previously filed as
Application for Flexible Exhibit A(10)(b) to
Premium Variable Life Post-Effective Amend-
Insurance Policy. ment No. 5, March 2, 1990.
</TABLE>
<PAGE> - 216 -
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
A(10)(c) Form of Short Form Previously filed as
Application for Flexible Exhibit A(10)(c) to
Premium Variable Life Post-Effective Amend-
Insurance Policy. ment No. 5, March 2, 1990.
A(10)(d) Form of Application Previously filed as
Supplement for Flexible Exhibit A(10)(d) to
Premium Variable Life Post-Effective Amend-
Insurance Policy. ment No. 7, March 1, 1991.
2. See Exhibit A(5).
3. Opinion and consent of Previously filed as
Stephen C. Nesbitt, Esq., Exhibit 3 to Pre-
General Counsel of The Effective Amendment
Manufacturers Life Insurance No. 1, August 13, 1987.
Company of America.
4. No financial statements
are omitted from the
prospectus pursuant to instruction
1(b) or (c) of Part I.
5. Not applicable.
6. Opinion and consent of
John R. Ostler, Vice-
President, Chief Actuary
and Treasurer of The Manu-
facturers Life Insurance
Company of America.**
7. Form of notice of short- Previously filed as
term cancellation right Exhibit 7 to Post-
and request for refund. Effective Amendment
No. 9, February 28, 1992.
8(a). Form of notice of right Previously filed as
of surrender and refund. Exhibit 8 to Pre-
Effective Amendment No.
1, August 13, 1987.
</TABLE>
** Filed Herewith Electronically
<PAGE> - 217 -
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
8(b). Form of notice of right Previously filed as
of surrender and refund Exhibit 8(b) to Post-
(face amount increase). Effective Amendment
No. 9, February 28, 1992.
9. Memorandum Regarding Previously filed as
Issuance, Face Amount Exhibit 9 to Post-
Increase, Redemption Effective Amendment
and Transfer Procedures No. 18, April 27,
for the Policies. 1995.
10. Consent of Ernst &
Young LLP.**
11. Consent of Jones &
Blouch L.L.P.**
12. Financial Data Schedule.**
</TABLE>
Filed Herewith Electronically.
<PAGE> - 218 -
<PAGE>
<PAGE> - 219 -
EXHIBIT 99-6
December 13, 1995
The Manufacturers Life Insurance
Company of America
500 N. Woodward Avenue
Suite 250
Bloomfield Hills Michigan 48304
U.S.A.
Gentlemen:
This opinion is furnished in connection with the filing of Post-
Effective Amendment No. 19 to Registration Statement No. 33-13774
on Form S-6 ("Registration Statement") which covers premiums
expected to be received under Flexible Premium Variable Life
Insurance Policies ("Policies") to be offered by The
Manufacturers Life Insurance Company of America ("Company"). The
prospectus included in the Registration Statement describes
Policies which will be offered by the Company in each State where
they have been approved by appropriate State insurance
authorities. The Policy form was prepared under my direction,
and I am familiar with the amended Registration Statement and
Exhibits thereto. In my opinion:
(l) The table of corridor percentages shown under the
caption "What Death Benefit Options Are Available?" is
consistent with the Policy's provisions.
(2) The illustrations of death benefits based on Policy
Value multiplied by corridor percentage shown under the
caption "What Death Benefit Options Are Available?",
based on the assumptions stated in the illustrations,
are consistent with the provisions of the Policy.
(3) The illustration of Modified Policy Debt shown in the
second paragraph under the caption "What Are The
Provisions Governing Policy Loans?", based on the
assumptions stated in the illustration, is consistent
with the Policy's provisions.
(4) The illustration of an application of the loan tier
amount shown under the sub-caption "Interest Credited
to the Loan Account" of the caption "What Are The
Provisions Governing Policy Loans?", based on the
assumptions stated in the illustration, is consistent
with the provisions of the Policy.
(5) The Loan Account illustration shown as a sub-caption
under the caption "What Are The Provisions Governing
<PAGE>
Policy Loans", based on the assumption stated in the
illustration, isconsistent with the Policy'sprovisions.
(6) The schedule of deferred underwriting charges shown
under the sub-caption "Deferred Underwriting Charge" of
the caption "What Are The Surrender Charges?" is
consistent with the Policy's provisions.
(7) The table under the sub-caption "Deferred Underwriting
Charge" of the caption "What Are The Surrender
Charges?" showing, on an annual basis, the surrender
charge applied to the Policy five years or more after
issuance of the Policy or a face amount increase, is
consistent with the provisions of the Policy.
(8) The table under sub-section "Deferred Sales Charge" of
the caption "What Are The Surrender Charges?" showing
for life insureds over age 69 at issue or face amount
increase the applicable percent of premium reduction
against which the deferred sales charge is applied is
consistent with the Policy's sales charge structure.
(9) The illustration of the operation of the maximum sales
charge under the sub-caption "Refund of Excess Sales
Charge" of the caption "What Are The Surrender
Charges?", based on the assumptions stated in the
illustration, is consistent with the Policy's sales
charge structure.
(10) The illustrations of Accumulated Premiums, Policy
Values, Cash Surrender Values, and Death Benefits for
the Policy shown in the Appendix under the caption
"What Are Some Illustration Of Policy Values, Cash
Surrender Values and Death Benefits?", based on the
assumptions stated in the illustrations, are consistent
with the provisions of the Policy. The rate structure
of the Policy has not been designed so as to make the
relationship between premiums and benefits, as shown in
these illustrations, appear to be correspondingly more
favorable to a prospective purchaser of the Policy for
male ages 25 and 35, than to prospective purchasers of
the Policy for females or males at other ages.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to my name under the
heading "Experts" in the Prospectus.
Very truly yours,
John R. Ostler
John R. Ostler
Vice President, Treasurer and Chief Actuary
<PAGE>
EXHIBIT 99-10
Consent of Independent Auditors
We consent to the reference to our firm under the caption
Experts and to the use of our report dated February 20, 1995
accompanying the financial statements of The Manufacturers
Life Insurance Company of America and to the use of our report
dated February 6, 1995 accompanying the financial statements
of Separate Account Four of The Manufacturers Life Insurance
Company of America, in the Registration Statement on Form S-6
and related prospectus of Separate Account Four of The
Manufacturers Life Insurance Company of America.
Ernst & Young LLP
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
December 13, 1995
<PAGE>
EXHIBIT 99-11
Jones & Blouch L.L.P.
1025 THOMAS JEFFERSON STREET, N.W.
WASHINGTON, D.C. 20007
(202) 965-8110
December 13, 1995
The Board of Directors
The Manufacturers Life Insurance
Company of America
500 N. Woodward Avenue
Bloomfield Hills, MI 48304
Dear Sirs:
We hereby consent to the reference to this firm under the
caption "Legal Matters" in the prospectus contained in post-
effective amendment No. 19 to the registration statement on
Form S-6 of Separate Account Four of The Manufacturers Life
Insurance company of America, File No. 33-13774, to be filed
with the Securities and Exchange Commission pursuant to the
Securities Act of 1933.
Very truly yours,
Jones & Blouch L.L.P.
Jones & Blouch L.L.P.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> Separate Account Four of The
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurance
Company of America
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurance
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<SERIES>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurance
Company of America
<SERIES>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurnace
Company of America
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurnace
Company of America
<SERIES>
<NUMBER> 07
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<PAID-IN-CAPITAL-COMMON> 1,458,045
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<SHARES-COMMON-PRIOR> 27,894
<ACCUMULATED-NII-CURRENT> (3,932)
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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[DISTRIBUTIONS-OF-INCOME] 0
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<NET-CHANGE-IN-ASSETS> 1,268,911
<ACCUMULATED-NII-PRIOR> 533
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<PAGE>
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<CIK> 0000813572
<NAME> Separate Account Four of The
Manufacturers Life Insurance
Company of America
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<NAME> Pacific Rim Emerging Markets Fund
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<S> <C>
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