Securities and Exchange Commission
450 5 Street, N.W.
Washington, DC 20549
RE: Midland National Life Separate Account A; Variable Survivorship Life
Commissioners:
Enclosed for filing under the Securities Act of 1933 and the Investment
Company Act of 1940 (the "1940 Act") please find a copy of a Registration
Statement on Form S-6, registering a new class of variable insurance
policies under the 1933 Act. In addition, an amended Registration Statement
under the 1940 Act of Form N-8B-2 for Midland National Life Separate
Account A will be filed via amendment.
The Midland National Life Separate Account A ("Separate Account") has
previously registered as a unit investment trust under the Investment
Company Act of 1940 (File Number 811-5271) in connection with other
variable life insurance products.
Midland National Life Insurance Company and the Separate Account are
relying on Rule 6e-3(T) under the Investment Company Act of 1940, and
no additional exemptive relief is required. Therefore, this filing is
complete as is.
If you have any questions about this filing, please contact Fred Bellamy
of Sutherland Asbill and Brennan LLP at 202-383-0126.
Sincerely,
Paul M. Phalen CLU, FLMI
Assistant Vice President -
Product Implementation
Midland National Life Insurance Company
One Midland Plaza
Sioux Falls, SD 57193
VLSLCVR.txt
<PAGE>
As filed with the Securities and Exchange Commission on June 15, 1999.
Registration No. 333-
811-5271
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
--------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
MIDLAND NATIONAL LIFE SEPARATE ACCOUNT A
(with respect to Variable Survivorship policies)
________________________________________
(Exact Name of Trust)
MIDLAND NATIONAL LIFE INSURANCE COMPANY
(Name of Depositor)
One Midland Plaza
Sioux Falls, SD 57193
(Address of Principal Executive Office)
_________________________
Jack L. Briggs, Vice President, Secretary and General Counsel
Midland National Life Insurance Company
One Midland Plaza
Sioux Falls, SD 57193
(Name and Address of Agent for Service of Process)
Copy to:
Frederick R. Bellamy
Sutherland Asbill & Brennan L L P
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2404
Approximate date of proposed public offering: As soon as practicable after the
effectiveness of the Registration
Statement.
An indefinite amount of securities is being registered pursuant to Rule
24f-2 under the Investment Company Act of 1940.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), shall determine.
S6CVVLSL.txt
<PAGE>
VARIABLE SURVIVORSHIP LIFE
Issued By:
Midland National Life (An Iowa Corporation)
7755 Office Plaza Drive North, Suite 105 West Des Moines, IA 50266
(605) 335-5700
Variable Survivorship Life is a last survivor variable life insurance policy
issued by Midland National Life Insurance Company. Variable Survivorship Life:
provides insurance coverage with flexibility in death benefits and premiums;
pays a death benefit if both of the two insureds die while the contract is
still in force;
can provide substantial cash value build-up on a tax-deferred basis. However,
there is no guaranteed cash value for amounts you allocate to the Investment
Divisions. You bear the risk of poor investment performance for those amounts.
lets you borrow against your contract, withdraw part of the net cash surrender
value, or completely surrender your contract. Loans and withdrawals affect the
cash value, and may affect the death benefit.
After the first premium, you may decide how much your premiums will be and how
often you wish to pay them, within limits. You may also increase or decrease
the amount of insurance protection, within limits.
Depending on the amount of premiums paid, this may or may not be a Modified
Endowment contract. If it is a Modified Endowment contract, then loans and
withdrawals may have negative tax consequences.
You have a limited right to examine your contract and return it to
us for a refund.
You may allocate your cash value to our General Account or up to ten investment
divisions. Each division invests in a specified mutual fund portfolio. You
can choose among the following twenty-three investment divisions:
1. VIP Money Market Portfolio
2. VIP High Income Portfolio
3. VIP Equity-Income Portfolio
4. VIP Growth Portfolio
5. VIP Overseas Portfolio
6. VIP II Asset Manager Portfolio
7. VIP II Investment Grade Bond Portfolio
8. VIP II Contrafund Portfolio
9. VIP II Asset Manager: Growth Portfolio
10. VIP II Index 500 Portfolio
11. VIP III Growth & Income Portfolio
12. VIP III Balanced Portfolio
13. VIP III Growth Opportunities Portfolio
14. American Century VP Capital Appreciation Portfolio
15. American Century VP Value Portfolio
16. American Century VP Balanced Portfolio
17. American Century VP International Portfolio
18. American Century VP Income & Growth
19. MFS VIT Emerging Growth
20. MFS VIT Research
21. MFS VIT Growth with Income
22. MFS VIT New Discovery
23. Lord Abbett VC Growth and Income
Your cash value in the investment divisions will increase or decrease based on
investment performance. You bear this risk. The U.S. Government does not
insure or guarantee any of these investments. Separate prospectuses describe
the investment objectives, policies and risks of the portfolios.
The Securities and Exchange Commission has not approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Prospectus: _________ 1999.
Table of Contents
PART 1: SUMMARY 4
FEATURES OF VARIABLE SURVIVORSHIP LIFE 4
Death Benefit Options 4
Contract Changes 4
Flexible Premium Payments 4
Additional Benefits 4
INVESTMENT CHOICES 5
YOUR CASH VALUE 5
Transfers 6
Policy Loans 6
Withdrawing Money 6
Surrendering Your Contract 6
DEDUCTIONS AND CHARGES 6
Deductions From Your Premiums 6
Deductions From Your Cash Value 6
Surrender Charges 7
Portfolio Expenses 7
ADDITIONAL INFORMATION ABOUT THE CONTRACTS 8
Your Right To Examine This Contract 8
Your Contract Can Lapse 8
Tax Effects of Variable Survivorship Life 8
Illustrations 8
PART 2: DETAILED INFORMATION ABOUT VARIABLE SURVIVORSHIP LIFE
9
INSURANCE FEATURES 9
How the Contracts Differ From Whole Life Insurance 9
Application for Insurance 9
Death Benefit 9
Maturity Benefit 11
Changes In Variable Survivorship Life 11
Changing The Face Amount of Insurance 12
Changing Your Death Benefit Option 12
When Contract Changes Go Into Effect 12
Flexible Premium Payments 13
Allocation of Premiums 14
Additional Benefits 14
Policy Split Option 14
SEPARATE ACCOUNT INVESTMENT CHOICES 15
Our Separate Account And Its Investment Divisions 15
The Funds 15
Investment Policies Of The Portfolios 15
USING YOUR CASH VALUE 18
The Cash Value 18
Amounts In Our Separate Account 18
How We Determine The Accumulation Unit Value 18
Cash Value Transactions 18
Transfers Of Cash Value 19
Dollar Cost Averaging 19
Contract Loans 20
Withdrawing Money From Your Cash Value 21
Surrendering Your Contract 21
THE GENERAL ACCOUNT 21
DEDUCTIONS AND CHARGES 22
Deductions From Your Premiums 22
Deductions From Your Cash Value 23
Charges Against The Separate Account 23
Transaction Charges 24
How Cash Value Charges Are Allocated 24
Surrender Charges 24
Charges In The Funds 25
ADDITIONAL INFORMATION ABOUT THE CONTRACTS 26
Your Right To Examine The Contract 26
Your Contract Can Lapse 26
You May Reinstate Your Contract 27
Contract Periods And Anniversaries 27
Maturity Date 27
We Own The Assets Of Our Separate Account 27
Changing the Separate Account 27
Limits On Our Right To Challenge The Contract 28
Your Payment Options 28
Your Beneficiary 29
Assigning Your Contract 29
When We Pay Proceeds From This Contract 29
TAX EFFECTS 30
Tax Status of the Policy 30
Tax Treatment of Policy Benefits - In General 30
Tax Treatment of Distributions - Modified Endowment Contracts
31
Tax Treatment of Distributions - Contracts That Are Not Modified
Endowment
Contracts 31
Investment in the Contract 32
Loans 32
Multiple Policies 32
Tax Treatment of Policy Split Option 32
Other Policy Owner Tax Matters 32
Possible Tax Law Changes 32
Possible Charge for Midland's Taxes 32
Other Tax Considerations 33
PART 3: ADDITIONAL INFORMATION 33
MIDLAND NATIONAL LIFE INSURANCE COMPANY 33
YOUR VOTING RIGHTS AS AN OWNER 33
OUR REPORTS TO CONTRACT OWNERS 34
DIVIDENDS 34
MIDLAND'S SALES AND OTHER AGREEMENTS 34
REGULATION 34
YEAR 2000 35
DISCOUNT FOR MIDLAND EMPLOYEES 35
LEGAL MATTERS 35
FINANCIAL 35
ADDITIONAL INFORMATION 35
MANAGEMENT OF MIDLAND 37
ILLUSTRATIONS 39
DEFINITIONS 47
PERFORMANCE 49
FINANCIAL STATEMENTS 50
APPENDIX A 51
This prospectus generally describes only the variable portion of the Contract,
except where the General Account is specifically mentioned.
Buying this contract might not be a good way of replacing your existing
insurance or adding more insurance if you already own a flexible premium
variable life insurance contract.
You should read this prospectus carefully and keep it for future
reference. You should also have and read the current prospectuses for the funds
PART 1: SUMMARY
In this prospectus "We", "Our", and "Us" mean Midland National Life Insurance
Company.
"You" and "Your" mean the owner of the contract. We refer to the two persons
who are covered by the contract as the "Insured" or "Insured Person(s),"
because the owner may not be one of the insureds.
There is a list of definitions at the end of this prospectus, explaining many
words and phrases used here and in the actual insurance policy.
The detailed information appearing later in this prospectus further explains
the following summary. This summary must be read along with that detailed
information. Unless otherwise indicated, the description of the contract in
this prospectus assumes that the contract is in force and that there is
no outstanding contract loan.
FEATURES OF VARIABLE SURVIVORSHIP LIFE
Death Benefit Options
Variable Survivorship Life is life insurance on two insureds. If the contract
is in force when the second of the two insureds dies, we will pay a death
benefit. No benefit is paid when the first insured dies. You choose between
two death benefit options:
Option 1: death benefit equals the face amount ("Specified Amount") of the
insurance contract. This is sometimes called a "level" death benefit.
Option 2: death benefit equals the face amount plus the cash value. This is
sometimes called a "variable" death benefit.
You also choose between two corridor percentages that might, in some
circumstances, result in an even larger death benefit. See "Death Benefit" on
page 9.
We deduct any outstanding loans and unpaid charges before paying any benefits.
The beneficiary can take the death benefit in a lump sum or under a variety of
payment plans.
Whether your contract lapses or remains in force can depend on the amount of
your cash value (less any outstanding loans and surrender charges). The cash
value, in turn, depends on the investment performance of the investment
divisions you select. (The cash value also depends on the premiums you pay and
the charges we deduct.)However, during the Minimum Premium Period, you can keep
your policy in force by paying a certain level of premiums.
The minimum face amount is $200,000
Contract Changes
You may make limited changes to the death benefit option you have chosen. You
may also increase or decrease the face amount of your contract, within limits.
Flexible Premium Payments
You may pay premiums whenever and in whatever amount you want, within certain
limits. We require an initial minimum premium based on the Joint Equal Age.
(See Appendix A for how the Joint Equal Age is determined.)
You choose a planned periodic premium. But payment of the planned premiums
does not ensure that your contract will remain in force. Additional premiums
may be required to keep your policy from lapsing. You need not pay premiums
according to the planned schedule. However, you can ensure that your contract
stays in force during the first 5 years (the Minimum Premium Period) by paying
premiums equal to the accumulated minimum premium amounts. See "Flexible
Premium Payments" on page 13.
Additional Benefits
You may choose to include additional benefits in the contract by rider. These
benefits may include:
a disability waiver benefit (to waive the cost of monthly deductions)
extending the maturity date
a death benefit guarantee to maturity
additional survivor life insurance protection during the first four years
a benefit to waive the cost of monthly deductions upon one insured's death
additional survivor life insurance protection until the maturity date
insurance protection for one of the insureds
We deduct any costs of additional benefits from your cash value monthly. See
"Additional Benefits" on page 53.
INVESTMENT CHOICES
You may allocate your cash value to up to ten of the following
investment divisions:
1. Fidelity's Variable Insurance Products Fund (VIP) Money Market
Portfolio
2. Fidelity's Variable Insurance Products Fund (VIP) High Income
Portfolio
3. Fidelity's Variable Insurance Products Fund (VIP) Equity-Income
Portfolio
4. Fidelity's Variable Insurance Products Fund (VIP) Growth
Portfolio
5. Fidelity's Variable Insurance Products Fund (VIP) Overseas
Portfolio
6. Fidelity's Variable Insurance Products Fund II (VIP II) Asset
Manager Portfolio
7. Fidelity's Variable Insurance Products Fund II (VIP II)
Investment Grade Bond Portfolio
8. Fidelity's Variable Insurance Products Fund II (VIP II)
Contrafund Portfolio
9. Fidelity's Variable Insurance Products Fund II (VIP II) Asset
Manager: Growth Portfolio
10. Fidelity's Variable Insurance Products Fund II (VIP II) Index
500 Portfolio
11. Fidelity's Variable Insurance Products Fund III (VIP III)
Growth & Income Portfolio
12. Fidelity's Variable Insurance Products Fund III (VIP III)
Balanced Portfolio
13. Fidelity's Variable Insurance Products Fund III (VIP III)
Growth Opportunities Portfolio
14. American Century VP Capital Appreciation Portfolio
15. American Century VP Value Portfolio
16. American Century VP Balanced Portfolio
17. American Century VP International Portfolio
18. American Century VP Income & Growth
19. MFS VIT Emerging Growth
20. MFS VIT Research
21. MFS VIT Growth with Income
22. MFS VIT New Discovery
23. Lord Abbett VC Growth and Income
You bear the complete investment risk for all amounts allocated to any of these
investment divisions. You may also allocate your cash value to our General
Account, where we guarantee the safety of principal and a minimum
interest rate.
For more information, see "The Funds" on page 15.
YOUR CASH VALUE
Your cash value begins with your first premium payment. From your premium we
deduct a sales charge, a premium tax, a federal tax and any per premium
expenses. The balance of the premium is your beginning cash value.
Your cash value reflects:
the amount and frequency of premium payments,
monthly deductions for the cost of insurance and expenses,
the investment performance of your chosen investment divisions,
interest earned on amounts allocated to the General Account,
loans, and
partial withdrawals.
There is no guaranteed cash value for amounts allocated to the
investment divisions.
See "The Cash Value" on page 18.
Transfers
You may transfer your cash value between the General Account and the various
investment divisions. Transfers take effect when we receive your request. We
require a minimum amount for each transfer, usually $200. Currently, we allow
an unlimited number of transfers. We reserve the right to charge a $25 fee
after the 12th transfer in a contract year. There are other limitations on
transfers to and from the General Account. See "Transfers Of Cash Value" on
page 19.
Policy Loans
You may borrow up to 92% of your cash surrender value (the cash value less the
surrender charge). Your contract will be the sole security for the loan. Your
contract states a minimum loan amount, usually $200. Contract loan interest
accrues daily at an annually adjusted rate. See "Contract Loans" on page 53.
Contract loan interest is not tax deductible on contracts owned by an
individual. There may be federal tax consequences for taking a policy loan.
See "TAX EFFECTS" on page 30.
Withdrawing Money
You may make a partial withdrawal from your cash value. The current minimum
withdrawal amount is $200. The maximum partial withdrawal you can make is 50%
of the net cash surrender value. The Net Cash Surrender Value is the cash
surrender value (your cash value minus any surrender charge) minus any
outstanding loan and loan interest due. Withdrawals are subject to other
requirements. If you make more than one withdrawal in a contract year, then we
deduct a service charge (no more than $25). See "Withdrawing Money From Your
Cash Value" on page 21. Withdrawals and surrenders may have negative tax
effects. See "TAX EFFECTS" on page 30.
Surrendering Your Contract
You can surrender your contract for cash and then we will pay you the net cash
surrender value. A surrender charge may be deducted, and taxes and a tax
penalty may apply. See "Surrendering Your Contract" on page 21.
DEDUCTIONS AND CHARGES
Deductions From Your Premiums
We deduct a 2.25% sales charge from each premium payment. This charge
partially reimburses us for the selling and distributing costs of this
contract. We also charge a 2.25% premium tax on each premium payment and
1.50% for Federal taxes. We may decrease or increase these charges
depending on our taxes, and we may vary the premium tax by state. If you
elect to pay premiums by Civil Service
Allotment, we also deduct a 46 charge from each premium payment.
See "Deductions From Your Premiums" on page 22.
Deductions From Your Cash Value
Certain amounts are deducted from your cash value each month.
These are:
a policy charge of $10.00 (currently, we plan to make this
deduction for only the first 10 contract years),
an expense charge that is based upon the insured person's issue
age, sex, risk class, and the amount of insurance under your contract
a cost of insurance charge. The amount of this charge is based
on the insured persons' issue age, sex, risk class, the contract duration, and
the amount of insurance under your contract; and
charges for additional benefits.
In addition, we deduct fees when you make:
a partial withdrawal of net cash surrender value more than once in a contract
year or
more than twelve transfers a year between investment divisions.
(We currently waive this charge).
See "Deductions From Your Cash Value" on page 23.
We also deduct a daily charge at an annual rate of 0.50% of the assets in every
investment division. This rate will decrease to 0.25% after the 10th contract
year. This charge is for certain mortality and expense risks.
Surrender Charges
We deduct a surrender charge only if you surrender your contract for its net
cash surrender value or let your contract lapse during the surrender charge
period (this period is the earlier of 15 years or the attained Joint Equal Age
of 95). If you keep this contract in force for the surrender charge period,
then you will not incur a surrender charge.
The surrender charge is on a fixed schedule per thousand dollars of face amount
and decreases to $0.00 after the surrender charge period. The initial
surrender charge is based on the Joint Equal Age at the time of issue and
the face amount. This summary of the surrender charge assumes no changes in
face amount. See "Surrender Charges" on page 24.
Portfolio Expenses
Each investment division invests exclusively in a corresponding mutual fund
portfolio. Each portfolio pays an investment advisory fee, and may also incur
other operating expenses. The total expenses for each portfolio (as a
percentage of assets) for the year ending December 31, 1998 are shown in the
table below (except as otherwise noted).
Total
Portfolio Expenses
VIP Money Market .30%
VIP High Income .70%
VIP Equity-Income(1) .58%
VIP Growth(1) .68%
VIP Overseas(1) .91%
VIP II Asset Manager(1) .64%
VIP II Investment Grade Bond .57%
VIP II Contrafund(1) .70%
VIP II Asset Manager: Growth(1) .73%
VIP II Index 500(1) .35%
VIP III Growth & Income(1) .61%
VIP III Balanced(1) .59%
VIP III Growth Opportunities(1) .71%
American Century VP Capital Appreciation 1.00%
American Century VP Value 1.00%
American Century VP Balanced 1.00%
American Century VP International 1.47%
American Century VP Income & Growth .70%
MFS VIT Emerging Growth(3) .85%
MFS VIT Research(3) .86%
MFS VIT Growth with Income(3) .88%
MFS VIT New Discovery(2) (3) 1.17%
Lord Abbett VC Growth and Income .51%
(1) This portfolio used a portion of its paid brokerage commissions to reduce
its expenses. Certain portfolios used credits gained as a result of uninvested
cash balances to reduce custodian and transfer agent expenses. Including these
reductions, total operating expenses would have been as follows:
VIP Equity-Income 0.57%
VIP Growth 0.66%
VIP Overseas 0.89%
VIP II Asset Manager 0.63%
VIP II Index 500 0.28%
VIP II Contrafund 0.66%
VIP II Asset Manager: Growth 0.72%
VIP III Balanced 0.58%
VIP III Growth Opportunities 0.70%
VIP III Growth & Income 0.60%
(2) MFS has agreed to bear expenses for this portfolio, such that the
portfolio's other expenses shall not exceed 0.25%. Without this limitation,
the other expenses and total expenses would be 4.32% and 5.22% for the
MFS VIT New Discovery.
(2) Each of the MFS Series has an expense offset arrangement, which reduces the
series' custodian fee based upon the amount of cash maintained by the series
with its custodian and dividend disbursing agent. Each series may enter into
other such arrangements and directed brokerage arrangements, which would also
havae the effect of reducing the series' expenses. The expenses shown above do
not take into account these expense reductions, and are therefore higher than
the actual expenses of the series. See "Charges In The Funds" on page 25.
ADDITIONAL INFORMATION ABOUT THE CONTRACTS
Your Right To Examine This Contract
You have a right to examine and cancel the contract.
Your cancellation request must be postmarked by the latest of the
following 3 dates:
10 days after you receive your contract,
10 days after we mail you a notice of this right, or
45 days after you sign the contract application.
If you cancel your contract during this period, then we will return your cash
value plus all of the charges we have deducted from premiums or from the
investment divisions or the cash value. Expenses of the portfolios are not
returned.
See "Your Right To Examine The Contract" on page 26.
Your Contract Can Lapse
Your contract remains in force if the net cash surrender value can pay the
monthly charges. In addition, during the Minimum Premium Period, your contract
will remain in force as long as you meet the applicable minimum premium
requirements. However, the contract can lapse after the Minimum Premium Period
no matter how much you pay in premiums, if the net cash surrender value is
insufficient to pay the monthly charges (subject to the grace period). See
"Your Contract Can Lapse" on page 26.
Tax Effects of Variable Survivorship Life
It is reasonable to conclude that a contract should qualify as a life insurance
contract for federal income tax purposes, although there is some uncertainty
due to lack of pertinent authority and particularly if you pay the
full amount of premiums permitted under the contract. If a contract does not
satisfy Section 7702 of the Internal Revenue code (defining life insurance
for tax purposes), we will take appropriate and reasonable steps to try to
get the contract to comply with Section 7702.
If a contract qualifies as a life insurance contract for federal income tax
purposes, then the death benefit payment is not subject to federal income tax.
In addition, under current federal tax law, you do not have to pay income
tax on any increases in your cash value as long as they remain in your
contract.
A contract may be treated as a "Modified Endowment contract" depending upon the
amount of premiums paid in relation to the death benefit. If the contract is a
Modified Endowment contract, then all pre-death distributions, including
contract loans, will be treated first as distributions of taxable income and
then as a return of your investment in the contract. In addition, prior to the
taxpayer attaining age 59 1/2, such distributions generally will be subject
to a 10% penalty tax.
If the contract is not a Modified Endowment contract, distributions generally
will be treated first as a return of your investment in the contract and
then as a distribution of taxable income. Moreover, loans will not be
treated as distributions. Finally, distributions and loans from a contract
that is not a Modified Endowment contract are not subject to the 10% penalty
tax. See "TAX EFFECTS" on page 30.
Illustrations
This prospectus includes sample projections of hypothetical death benefits and
cash surrender values, beginning on page 40. These are only hypothetical
figures and are not indications of either past or anticipated future investment
performance. These hypothetical value projections may be helpful in
understanding the long-term effects of different levels of investment
performance, charges and deductions. They may help in comparing this contract
to other life insurance contracts. They indicate that if the contract is
surrendered in the early contract years, the net cash surrender value
may be low compared to never purchasing the policy and investing the money used
as premiums at 5% per year. This demonstrates that this contract should not be
purchased as a short-term investment.
PART 2: DETAILED INFORMATION ABOUT VARIABLE SURVIVORSHIP LIFE
INSURANCE FEATURES
This prospectus describes our Variable Survivorship Life contract. There may be
contractual variances because of requirements of the state where your contract
is issued.
How the Contracts Differ From Whole Life Insurance
Variable Survivorship Life (VSL) provides insurance coverage with
flexibility in death benefits and premium payments. It enables you to
respond to changes in your life and to take advantage of favorable financial
conditions. VSL differs from traditional whole life insurance because you
may choose the amount and frequency of premium payments, within limits.
In addition, VSL has two types of death benefit options. You may switch back
and forth between these options. Variable Survivorship Life also allows you to
change the face amount without purchasing a new insurance policy. However,
evidence of insurability may be required.
Finally, VSL is called 'last survivor' or 'survivorship' because no death
benefit is paid until the last, 'surviving' insured dies. No death benefit is
paid and no adjustment will be made when just one insured dies.
Application for Insurance
To apply for a contract you must submit a completed application on both
insureds. We decide whether to issue a contract based on the information in the
application and our standards for issuing insurance and classifying risks.
If we decide not to issue a contract, then we will return the sum of
premiums paid plus interest credited. The maximum individual issue age is
85 and the minimum individual issue age is 20. The maximum Joint Equal Age
is 85 and the minimum Joint Equal Age is 20. The Joint Equal Age of the
policy is a single age which is derived from the two individual ages,
substandard ratings, risk classes and sexes of the two insureds on the
policy. We will determine the Joint Equal Age for each policy as shown in
Appendix A.
Death Benefit
Death Benefit Options: We pay the death benefit to the beneficiary after the
last surviving insured dies (outstanding indebtedness will be deducted from the
proceeds). As the owner, you may choose between two death benefit options:
Option 1 provides a benefit that equals the face amount of the contract. This
"level" death benefit is for owners who prefer insurance coverage that does not
vary in amount and has lower insurance charges. Except as described below, the
death benefit under option 1 is level or fixed at the face amount.
Option 2 provides a benefit that equals the face amount of the contract
plus the cash value on the day the insured person dies. This "variable"
death benefit is for owners who prefer to have investment performance
reflected in the amount of their insurance coverage. Under Option 2, the
value of the death benefit fluctuates with your cash value.
Death Benefit Corridor Percentages. You also choose between two death benefit
corridor percentage tables. These percentages are applied to the cash value at
the death of the second insured, and if that result is greater than that
described above, then it will be the death benefit amount.
The percentage is 250% up to age 40, and then the percentages generally decline
as the insured person gets older. This alternative minimum death benefit will
be the cash value on the day the last surviving insured dies multiplied by the
corridor percentage for the younger insured's age. For this purpose, age is
the attained age (age last birthday) at the beginning of the contract
year of the younger insured. (If the younger insured dies first, then the
younger insured's nominal age is used; that is the age the younger insured
would have attained if he or she were still alive at the survivor's death.)
You can choose either a standard corridor percentage table or an enhanced
corridor percentage table (both tables are available under either death benefit
option 1 or option 2). The tables are the same for ages 0 through 85. The
difference is that the enhanced corridor percentage table provides a higher
multiple of your cash values for attained ages 86 through 95. As a result,
your beneficiaries may receive a larger death benefit if the last
survivor dies when the younger insured's attained age (or nominal attained
age) is between 86 and 95. However, when the death benefit is larger, we
deduct higher cost of insurance charges from your cash value (because the
charge is based on the difference between the cash value and the death
benefit amount). This results in a lower cash value, which would eventually
result in a lower death benefit than under the standard corridor percentage
table.
Once your contract is issued, you can never change the corridor
percentage table that you selected.
The standard and the enhanced corridor percentage tables are shown
below:
Standard Death Benefit
Corridor Percentage Table
The Death The Death
Benefit Will Benefit Will
Be At Least Be At Least
If The Equal To If The Equal To
Younger This Percent Younger This Percent
Insured's of The Insured's of The
Age Is Cash Value Age Is Cash Value
0-40 250% 60 130%
41 243% 61 128%
42 236% 62 126%
43 229% 63 124%
44 222% 64 122%
45 215% 65 120%
46 209% 66 119%
47 203% 67 118%
48 197% 68 117%
49 191% 69 116%
50 185% 70 115%
51 178% 71 113%
52 171% 72 111%
53 164% 73 109%
54 157% 74 107%
55 150% 75-90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94 101%
95-99 100%
These percentages are based on federal income tax law which require a minimum
death benefit, in relation to cash value, for your contract to qualify as life
insurance.
Enhanced Death Benefit
Corridor Percentage Table
The Death The Death
Benefit Will Benefit Will
Be At Least Be At Least
If The Equal To If The Equal To
Younger This Percent Younger This Percent
Insured's of The Insured's of The
Age Is Cash Value Age Is Cash Value
0-40 250% 65 120%
41 243% 66 119%
42 236% 67 118%
43 229% 68 117%
44 222% 69 116%
45 215% 70 115%
46 209% 71 113%
47 203% 72 111%
48 197% 73 109%
49 191% 74 107%
50 185% 75-85 105%
51 178% 86 109%
52 171% 87 113%
53 164% 88 118%
54 157% 89 122%
55 150% 90 126%
56 146% 91 121%
57 142% 92 115%
58 138% 93 110%
59 134% 94 105%
60 130% 95 100%
61 128% 96 100%
62 126% 97 100%
63 124% 98 100%
64 122% 99 100%
The following example will clarify how these factors work. Assume the younger
insured person is 55 years old and the face amount is $100,000. The "corridor
percentage" at that age is 150%. Under Option 1, the death benefit will
generally be $100,000. However, when the cash value is greater than $66,666.67,
the corridor percentage applies and the death benefit will be greater than
$100,000 (since 150% of $66,666.67 equals $100,000). In this case, at age 55,
we multiply the cash value by a factor of 150%. So if the cash value were
$70,000, then the death benefit would be $105,000.
Under Option 2, the death benefit is the face amount plus the cash value. In
this example, if the younger insured is 55 years-old, the face amount is
$100,000, and the cash value is $200,000, then the death benefit would be
$300,000. This figure results from either: (a) adding the face amount to the
cash value or (b) multiplying the cash value by the corridor percentage. For
all cash values higher than this level, the corridor percentage would apply.
Therefore, for every $1.00 added to the cash value above $200,000, the death
benefit would increase by $1.50 (at that age).
Under any option, the length of time your contract remains in force depends on
the net cash surrender value of your contract and whether you meet the Minimum
Premium Period requirements. Your coverage lasts as long as your net cash
surrender value can cover the monthly deductions from your cash value. In
addition, during the Minimum Premium Period, your contract remains in force if
the sum of your premium payments (minus any loans or withdrawals) is greater
than the sum of the monthly minimum premiums for all of the contract months
since the contract was issued.
The investment performances of the investment divisions and the interest earned
in the General Account affect your cash value. Therefore, the returns from
these investment options can affect the length of time your contract remains in
force.
The minimum initial face amount is $200,000.
Notice and Proof of Death. We require satisfactory proof of both insured's
death before we pay the death benefit. That can be a certified copy of a death
certificate, a written statement by the attending physician, a certified
copy of a decree of a court of competent jurisdiction as to the finding of
death, or any other proof satisfactory to us.
You should notify us of the first insured's death as soon as possible after it
occurs. You should submit proof of death at that time, because it will probably
be easier to obtain proof of death shortly after it occurs instead of possibly
years later. This will help avoid delay in making payment after the survivor's
death, and it may affect an additional benefit provided by rider.
Maturity Benefit
If at least one insured person is still living on the maturity date, we
will pay you the cash value minus any outstanding loans. The contract will
then end. The maturity date is the contract anniversary after the younger
insured person's 100th birthday. If your policy contains the Extended
Maturity Rider, you may extend the maturity date. See "Additional Benefits"
on page 14.
Changes In Variable Survivorship Life
Variable Survivorship Life gives you the flexibility to choose from a
variety of strategies that enable you to increase or decrease your insurance
protection.
A reduction in face amount lessens the emphasis on a contract's insurance
coverage by reducing both the death benefit and the amount of pure insurance
provided. The amount of pure insurance is the difference between the cash
value and the death benefit. This is the amount of risk we take. A
reduced amount at risk results in lower cost of insurance deductions from
your cash value.
A partial withdrawal reduces the cash value and may reduce the death benefit,
while providing you with a cash payment, but generally does not reduce the
amount at risk. Choosing not to make premium payments may have the effect of
reducing the cash value. Under death benefit option 1, reducing the cash value
increases the amount at risk (thereby increasing the cost of insurance
deductions) while leaving the death benefit unchanged; under death benefit
option 2, it decreases the death benefit while leaving the amount at risk
unchanged.
Increases in the face amount have the exact opposite effect of decreases.
Changing The Face Amount of Insurance
You may change the face amount of your contract by sending a written request to
our executive office. You can only change the face amount twice each contract
year. All changes are subject to our approval and to the following conditions.
For increases:
Increases in the face amount must be at least $50,000.
To increase the face amount, you must provide satisfactory evidence of
insurability for both insureds. If either insured person has become a more
expensive risk, then we charge higher cost of insurance fees for the additional
amounts of insurance (we may change this procedure in the future).
Monthly cost of insurance deductions from your cash value will increase. There
will also be a surrender charge increase and a minimum premium increase. These
begin on the date the face amount increase takes effect.
The right to examine this contract does not apply to face amount increases.
(It only applies when you first buy the contract.)
For decreases:
You cannot reduce the face amount below the minimum we require to issue this
contract at the time of the reduction.
Monthly cost of insurance deductions from your cash value will
decrease.
The federal tax law may limit a decrease in the face amount
If you request a face amount decrease after you have already increased the face
amount at substandard (i.e., higher) risk charges, and the original face amount
was at standard risk charges, then we will first decrease the face amount that
is at substandard higher risk charges. We may change this procedure.
Changing the face amount of insurance may have tax consequences. You should
consult a tax advisor before changing the face amount of insurance.
Changing Your Death Benefit Option
You may change your death benefit option by sending a written request to our
executive office. (However, as noted above, you cannot change your corridor
percentage table.) We require satisfactory evidence of insurability (for both
insureds) to change the death benefit option.
If you change from option 1 to option 2, the face amount decreases by your cash
value on the date of the change. This keeps the death benefit and amount at
risk the same as before the change. We may not allow a change in death benefit
option if it would reduce the face amount below the minimum we require to issue
this contract at the time of the reduction.
If you change from option 2 to option 1, then the face amount increases by the
amount of your cash value on the date of the change. These increases and
decreases in face amount are made so that the amount of the death benefit
remains the same on the date of the change. When the death benefit remains the
same, there is no change in the net amount at risk. This is the amount on
which the cost of insurance charges are based.
Changing the death benefit option may have tax consequences. You
should consult a tax advisor before changing the death benefit option.
When Contract Changes Go Into Effect
Any changes in the face amount or the death benefit option will go into effect
on the monthly anniversary following the date we approved your request. After
your request is approved, you will receive a written notice showing each
change. You should attach this notice to your contract. We may also ask
you to return your contract to us at our executive office so that we can make a
change. We will notify you if we do not approve a change you request. For
example, we might not approve a change that would disqualify your contract as
life insurance for income tax purposes.
Contract changes may have negative tax consequences. See "TAX EFFECTS" on
page 30.
Flexible Premium Payments
You may choose the amount and frequency of premium payments,
within the limits described below.
Even though your premiums are flexible, your contract information page will
show a "planned" periodic premium. You determine the planned premiums
when you apply and can change them at any time. You will specify the frequency
to be on a quarterly, semi-annual or annual basis. Planned periodic premiums
may be monthly if paid by pre-authorized check. Premiums may be bi-weekly if
paid by Civil Service Allotment. The planned premiums may not be enough to keep
your contract in force.
The insurance goes into effect when we receive your initial minimum premium
payment (and approve your application). We determine the initial
minimum premium based on:
1) the ages, sexes and rating classes of the insured persons,
2) the initial face amount of the contract, and
3) any additional benefits selected.
All premium payments should be payable to "Midland". After your first premium
payment, all additional premiums should be sent directly to our executive
office.
We will send you premium reminders based on your planned premium schedule.
You may make the planned payment, skip the planned payment, or change the
frequency or the amount of the payment. Generally, you may pay premiums at any
time. Amounts must be at least $50, unless made by pre-authorized check.
Amounts made by pre-authorized check can be as low as $30.
Payment of the planned premiums does not guarantee that your contract will stay
in force. Additional premium payments may be necessary. The planned premiums
increase when the face amount of insurance increases.
If you send us a premium payment that would cause your contract to cease to
qualify as life insurance under Federal tax law, we will notify you and return
that portion of the premium that would cause the disqualification.
Premium Provisions During The Minimum Premium Period. During the Minimum
Premium Period, you can keep your contract in force by meeting a minimum
premium requirement. The Minimum Premium Period lasts until the 5th contract
anniversary. A monthly minimum premium is shown on your contract information
page. (This is not the same as the planned premiums.) The minimum premium
requirement will be satisfied if the sum of premiums you have paid, less your
loans or withdrawals, is more than the sum of the monthly minimum premiums
required to that date. The minimum premium increases when the face amount
increases.
During the Minimum Premium Period, your contract will lapse if:
the net cash surrender value cannot cover the monthly deductions
from your cash value; and
the premiums you have paid, less your loans or withdrawals, are less than the
total monthly minimum premiums required to that date.
This contract lapse can occur even if you pay all of the planned premiums.
Premium Provisions After The Minimum Premium Period. After the Minimum
Premium Period, your contract will lapse if the net cash surrender value cannot
cover the monthly deductions from your cash value. Paying your planned
premiums may not be sufficient to maintain your contract because of
investment performance, charges and deductions, contract changes or other
factors. Therefore, additional premiums may be necessary to keep your
contract in force.
Allocation of Premiums
Each net premium will be allocated to the investment divisions or to our
General Account on the day we receive it (except that any premium received
before the record date (which is the date we issue the contract) will not be
allocated or invested until the record date). The net premium is the premium
minus a sales charge, a state premium tax charge, a federal tax charge and any
expense charges. Each premium is put into your cash value according to
your instructions. Your contract application may provide directions to
allocate net premiums to our General Account or the investment divisions. You
may not allocate your cash value to more than 10 investment divisions at
any one point in time. Your allocation instructions will apply to all of your
premiums unless you write to our executive office with new instructions.
Allocation percentages may be any whole number from 0 to 100. The sum of
the allocation percentages must equal 100. Of course, you may choose not
to allocate a premium to any particular investment division. See "THE
GENERAL ACCOUNT" on page 21. Any premium received before the record date
will be held and earn interest in the General Account until the day after
the record date. When this period ends your instructions will dictate how
we allocate it.
Additional Benefits
You may include additional benefits in your contract. Certain
benefits result
in an additional monthly deduction from your cash value. You may
cancel these
benefits at any time. The following briefly summarizes the
additional benefits
that are currently available:
(1) Disability Waiver Benefit: With this benefit, we waive
monthly charges
from the cash value if the designated insured person becomes
totally disabled on
or after his/her 20th birthday and the disability continues for at
least 6
months. If a disability starts before the contract anniversary
following the
designated insured person's 60th birthday, then we will waive
monthly deductions
for as long as the disability continues. The designated insured
is the person
named in the Disability Waiver Benefit application as the person
on whom
coverage should apply.
(2) Extended Maturity Option: With this benefit, we will extend
the maturity
date indefinitely, or as long as allowed by the IRS. If at least
one of the
insureds is living on the maturity date and this contract is still
in force,
this benefit will transfer all the cash value to the General
Account and will
cease all cash value deductions. This will allow the policy to
remain in force
until the last survivor dies or the policy is surrendered.
(3) Death Benefit Guarantee to Maturity: With this benefit, the
policy is
guaranteed to remain in force until the maturity date if a
sufficient premium is
paid. The premium required to provide this guarantee is
substantially higher
than the minimum premium.
(4) Death Waiver Benefit: This benefit will waive all future
monthly charges
from the cash value if the selected insured dies before the other
insured. The
selected insured is the individual named in the policy application
for the Death
Waiver Benefit.
(5) Additional Four Year Survivor Insurance: This benefit
provides an
additional death benefit if both insureds die during the first 4
years the
contract is in force.
(6) Additional Survivor Insurance: This benefit provides an
additional death
benefit if the survivor dies while this benefit is in force.
(7) Single Life Insurance. With this benefit, an additional
death benefit will
be paid upon the death of the selected insured. The selected
insured is the
individual named in the policy application for the Single Life
Insurance
coverage.
Policy Split Option
This feature allows the contract to be split into two individual
contracts if
both insureds submit satisfactory evidence of insurability. There
is no charge
for this option. The death benefit for each individual policy may
be for any
amount as long as the total death benefit does not exceed the
death benefit
under the Variable Survivorship Life. The surrender charge is
waived at the
time the policy split option is exercised. Any cash value and
loan value will
be split in the same proportion as the death benefit.
SEPARATE ACCOUNT INVESTMENT CHOICES
Our Separate Account And Its Investment Divisions
The "Separate Account" is our Separate Account A, established
under the
insurance laws of the State of South Dakota. It is a unit
investment trust
registered with the Securities and Exchange Commission (SEC) under
the
Investment Company Act of 1940 but this registration does not
involve any SEC
supervision of its management or investment policies. The
Separate Account
meets the definition of a "Separate Account" under the federal
securities laws.
The Separate Account has a number of investment divisions, each of
which invests
in the shares of a corresponding portfolio of the Funds. You may
allocate part
or all of your net premiums to ten of the twenty-three investment
divisions of
our Separate Account.
The Funds
Each of the 23 portfolios available under the contract is a
"series" of one of
the following investment companies:
1. Fidelity's Variable Insurance Products Fund,
2. Fidelity's Variable Insurance Products Fund II,
3. Fidelity's Variable Insurance Products Fund III,
4. American Century Variable Portfolios, Inc.,
5. MFS(r) Variable Insurance Trusts, and
6. Lord Abbett's Series Fund, Inc.
The Funds' shares are bought and sold by our Separate Account at
net asset
value. More detailed information about the Funds and their
investment
objectives, policies, risks, expenses and other aspects of their
operations,
appear in their prospectuses, which accompany this prospectus.
Midland may from time to time receive revenue from the Funds
and/or from their
managers. The amounts of the revenue, if any, may be based on the
amount of
Midland's investments in the Funds.
Investment Policies Of The Portfolios
Each portfolio tries to achieve a specified investment objective
by following
certain investment policies. A portfolio's objectives and policies
affect its
returns and risks. Each investment division's performance depends
on the
experience of the corresponding portfolio. The objectives of the
portfolios are
as follows:
Portfolio Objective
VIP Money Market Seeks as high a level of current income
as is
consistent with
preservation of
capital and
liquidity by
investing in
U.S. dollar-denominated
money market securities.
VIP High Income
Seeks a
high level of
current income
by investing
primarily in
income-producing debt
securities while
also considering
growth of capital.
Policy owners
should understand that
the fund's
unit price
may be volatile
due to the
nature of the
high yield
bond marketplace.
VIP Equity -Income
Seeks reasonable
income by
investing
primarily in
income-producing
equity securities. In
choosing these
securities, the
Manager will
consider
the potential for
capital
appreciation.
The Portfolio's goal
is to achieve
a yield which
exceeds the
composite yield
on the
securities
comprising the
Standard & Poor's
Composite Index of
500 Stocks.
VIP Growth
Seeks capital
appreciation by
investing in
common stocks.
The adviser
invests the
fund's assets in
companies the
adviser believes
have above-average
growth potential.
VIP Overseas
Seeks long-term
growth of
capital, primarily
through investments in
foreign securities.
VIP II Asset Manager
Seeks high
total return
with reduced
risk over the
long term by
allocating its
assets among
domestic and
foreign stocks,
bonds and
short-term
instruments.
VIP II Investment Grade Bond
Seeks a high a
level of current
income as is
consistent with
the preservation of
capital by
investing in
U.S. dollar-denominated
investment-grade bonds.
VIP II Contrafund
Seeks to achieve
capital appreciation
over the long
term by investing in
common stocks and
securities of
companies whose
value the
manager believes
is not fully
recognized by
the public.
VIP II Asset Manager: Growth
Seeks to
maximize total
return by
allocating its
assets among
stocks, bonds,
short-term
instruments,
and other
investments.
VIP II Index 500
Seeks to
provide investment
results that
correspond to
the total return
of common stocks
publicly traded
in the United States
by duplicating the
composition and
total return
of the Standard &
Poor's Composite
Index of 500 Stocks.
VIP III Growth & Income
Seeks high
total return,
combining current
income and
capital appreciation.
Invests mainly
in stocks that pay
current dividends and
show potential for
capital appreciation.
VIP III Balanced
Seeks both
income and
growth of
capital.
When FMR's
outlook is
neutral, it will
invest approximately
60% of the
fund's assets in
equity securities and
will always
invest at
least 25% of
the fund's
assets in
fixed-income
senior securities.
VIP III Growth Opportunities
Seeks capital
growth by
investing primarily in
common stocks.
Although the
fund invests
primarily in
common stocks,
it has the
ability to
purchase other
securities,
including bonds,
which may be
lower-quality
debt securities.
American Century VP Capital Appreciation
Seeks capital
growth by
investing primarily in
common stocks
that management
considers to
have better-than-
average prospects for
appreciation.
American Century VP Value
Seeks long-term
capital growth
with income
as a secondary
objective.
Invests primarily in
equity securities of
well-established
companies that
management believes
to be under-valued.
American Century VP Balanced
Seeks capital
growth and
current income.
Invests approximately
60 percent
of its assets in
common stocks
that management
considers to
have better
than average
potential for
appreciation and
the rest in fixed
income securities.
American Century VP International
Seeks capital
growth by
investing
primarily in
securities of
foreign companies that
management
believes to have
potential for
appreciation.
American Century VP Income & Growth
Seeks dividend
growth, current
income and
capital appreciation.
The Portfolio will
seek to achieve
its investment
objective by
investing in
common stocks.
MFS VIT Emerging Growth
Seeks to
provide long-term
growth of
capital. Dividend and
interest income
from portfolio
securities, if any,
is incidental to the
Series' investment
objective of
long-term
growth capital.
MFS VIT Research
Seeks to provide
long-term
growth of
capital and
future income.
MFS VIT Growth with Income
Seeks to
provide reasonable
current income
and long-term
growth of
capital and income.
MFS VIT New Discovery
Seeks capital appreciation.
Lord Abbett VC Growth and Income
Seeks long-term
Growth of
capital and
income without
excessive fluctuation in
market value.
Fidelity Management & Research Company manages the VIP, VIP II and
VIP III
portfolios. American Century Investment Management, Inc. manages
the American
Century VP Portfolios. MFS(r) Services Company manages the MFS
Variable
Insurance Trusts. Lord Abbett & Co. manages the Lord Abbett
Series Fund, Inc.
The Fund portfolios available under these contracts are not
available for
purchase directly by the general public, and are not the same as
the mutual
funds with very similar or nearly identical names that are sold
directly to the
public. However, the investment objectives and policies of the
portfolios are
very similar to the investment objectives and policies of other
(publicly
available) mutual fund portfolios that have very similar or nearly
identical
names and that are or may be managed by the same investment
advisor or manager.
Nevertheless, the investment performance and results of any of the
Funds'
portfolios that are available under the contracts may be lower, or
higher, than
the investment results of such other (publicly available)
portfolios. There can
be no assurance, and no representation is made, that the
investment results of
any of the available portfolios will be comparable to the
investment results of
any other portfolio or mutual fund, even if the other portfolio or
mutual fund
has the same investment advisor or manager and the same investment
objectives
and policies and a very similar or nearly identical name.
USING YOUR CASH VALUE
The Cash Value
Your cash value is the sum of your amounts in the various
investment divisions
and in the General Account (including any amount in our General
Account securing
a contract loan). Your cash value reflects various charges. See
"DEDUCTIONS AND
CHARGES" on page 22. Monthly deductions are made on the first day
of each
contract month. Transaction and surrender charges are made on the
effective
date of the transaction. Charges against our Separate Account are
reflected
daily.
We guarantee amounts allocated to the General Account. There is
no guaranteed
minimum cash value for amounts allocated to the investment
divisions of our
Separate Account. You bear that investment risk. An investment
division's
performance will cause your cash value to go up or down.
Amounts In Our Separate Account
Amounts allocated or transferred to the investment divisions are
used to
purchase accumulation units. Accumulation units of an investment
division are
purchased when you allocate premiums, repay loans or transfer
amounts to that
division. Accumulation units are redeemed when you make
withdrawals or transfer
amounts from an investment division (including transfers for
loans), when we
make monthly deductions and charges, and when we pay the death
benefit. The
number of accumulation units purchased or redeemed in an
investment division is
calculated by dividing the dollar amount of the transaction by the
division's
accumulation unit value at the end of that day. The value you
have in an
investment division is the accumulation unit value times the
number of
accumulation units credited to you. The number of accumulation
units credited to
you will not vary because of changes in accumulation unit values.
How We Determine The Accumulation Unit Value
We determine accumulation unit values for the investment divisions
at the end of
each business day. Accumulation unit values fluctuate with the
investment
performance of the corresponding portfolios of the Funds. They
reflect
investment income, the portfolio's realized and unrealized capital
gains and
losses, the Funds' expenses, and our deductions and charges. The
accumulation
unit value for each investment division is set at $10.00 on the
first day there
are contract transactions in our Separate Account associated with
these
contracts. After that, the accumulation unit value for any
business day is
equal to the accumulation unit value for the previous business day
multiplied by
the net investment factor for that division on that business day.
We determine the net investment factor for each investment
division every
business day as follows:
We take the value of the shares belonging to the division in the
corresponding
Fund portfolio at the close of business that day (before giving
effect to any
contract transactions for that day, such as premium payments or
surrenders). We
use the share value reported to us by the Fund.
We add any dividends or capital gains distributions paid by the
portfolio on
that day.
We divide this amount by the value of the amounts in the
investment division at
the close of business on the preceding business day (after giving
effect to any
contract transactions on that day).
We subtract a daily asset charge for each calendar day between
business days
(for example, a Monday calculation may include charges for
Saturday and Sunday).
The daily charge is .0013733%, which is an effective annual rate
of 0.50%. We
will reduce this charge to 0.25% after the 10th contract year.
(See "Mortality
and Expense Risks" on page 21.)
We may subtract any daily charge for taxes or amounts set aside as
tax reserves.
Cash Value Transactions
The transactions described below may have different effects on
your cash value,
death benefit, face amount or cost of insurance changes. You
should consider
the net effects before making any cash value transactions.
Certain transactions
have fees. Remember that upon completion of these transactions,
you may not have
your cash value allocated to more than 10 investment divisions.
Transfers Of Cash Value
You may transfer amounts among the investment divisions and
between the General
Account and any investment divisions. To make a transfer of cash
value, write
to our executive office. Currently, you may make an unlimited
number of
transfers of cash value in each contract year. But we reserve the
right to
assess a $25 charge after the 12th transfer in a contract year.
If we charge
you for making a transfer, then we will allocate the charge as
described under
"Deductions and Charges - How Cash Value Charges Are Allocated" on
page 24.
Although a single transfer request may include multiple transfers,
it will be
considered a single transfer for fee purposes.
Transfer requests received before 3:00 p.m. (Central Standard
Time) will take
affect on the same day if that day is a business day. Otherwise,
the transfer
request will take affect on the business day following the day we
receive your
request. The unit values are determined on the day the transfer
takes affect.
The minimum transfer amount is $200. The minimum amount does not
have to come
from or be transferred to just one investment division. The only
requirement is
that the total amount transferred that day equals the transfer
minimum.
The total amount that can be transferred from the General Account
to the
Separate Account, in any contract year, cannot exceed the larger
of:
1. 25% of the unloaned amount in the General Account at the
beginning of the
contract year, or
2. $25,000
These limits do not apply to transfers made in a Dollar Cost
Averaging program
that occurs over a time period of 12 or more months.
Dollar Cost Averaging
The Dollar Cost Averaging (DCA) program enables you to make
monthly transfers
of a predetermined dollar amount from the DCA source account (any
investment
division or the General Account) into one or more of the
investment divisions.
By allocating monthly, as opposed to allocating the total amount
at one time,
you may reduce the impact of market fluctuations. This plan of
investing does
not insure a profit or protect against a loss in declining
markets. The minimum
monthly amount to be transferred using DCA is $200.
You can elect the DCA program at any time. You must complete the
proper request
form, and there must be a sufficient amount in the DCA source
account. The
minimum amount required in the DCA source account for DCA to begin
is the sum
of $2,400 and the minimum premium. You can get a sufficient
amount by paying a
premium with the DCA request form, allocating premiums, or
transferring amounts
to the DCA source account. The DCA election will specify:
a. The DCA source account from which DCA transfers will be made,
b.
b. That any money received with the form is to be placed into the
DCA source
account,
c. The total monthly amount to be transferred to the other
investment divisions,
and
d.
e. How that monthly amount is to be allocated among the investment
divisions.
The DCA request form must be received with any premium payments
you intend to
apply to DCA.
Once DCA is elected, additional premiums can be deposited into the
DCA source
account by sending them in with a DCA request form. All amounts
in the DCA
source account will be available for transfer under the DCA
program.
Any premium payments received while the DCA program is in effect
will be
allocated using the allocation percentages from the DCA request
form, unless you
specify otherwise. You may change the DCA allocation percentages
or DCA
transfer amounts twice during a contract year.
If it is requested when the contract is issued, then DCA will
start at the
beginning of the 2nd contract month. If it is requested after
issue, then DCA
will start at the beginning of the 1st contract month which occurs
at least 30
days after the request is received.
DCA will last until the value in the DCA source account falls
below the
allowable limit or until we receive your written termination
request. DCA
automatically terminates on the maturity date.
We reserve the right to end the DCA program by sending you one
month's notice.
Contract Loans
Whenever your contract has a net cash surrender value, you may
borrow up to 92%
of the cash surrender value using only your contract as security
for the loan.
We pay you interest on this loaned amount, currently at an annual
rate of 4%.
(We charge you interest on the loaned amount at a higher rate, see
below.)
A loan taken from, or secured by, a contract may have federal
income tax
consequences. See "TAX EFFECTS" on page 30.
You may request a loan by contacting our executive office. You
should tell us
how much of the loan you want taken from your unloaned amount in
the General
Account or from the Separate Account investment divisions. If you
do not tell
us how to allocate your loan, the loan will be allocated according
to your
deduction allocation percentages as described under "How Cash
Value Charges Are
Allocated" on page 24. If the loan cannot be allocated this way,
then we will
allocate it in proportion to the unloaned amounts of your cash
value in the
General Account and each investment division. We will redeem
units from each
investment division equal in value to the amount of the loan
allocated to that
investment division (and transfer these amounts to the General
Account).
If you request an additional loan, then the outstanding loan and
loan interest
will be added to the additional loan amount and the original loan
will be
canceled. Thus, you will only have one outstanding loan.
Contract Loan Interest. Interest on a contract loan accrues daily
at an annual
interest rate of 6%.
After the 10th contract year, we guarantee that the annual rate of
interest
charged on the contract loan will equal 4% (which is equal to the
interest rate
paid on the loaned portion of the cash value) for the portion of
the loan that
is from earnings (that is, the portion that does not exceed the
cash value minus
total premiums paid).
Interest is due on each contract anniversary. If you do not pay
the interest
when it is due, then it will be added to your outstanding loan and
allocated
based on the deduction allocation percentages for your cash value.
This means
we make an additional loan to pay the interest and will transfer
amounts from
the General Account or the investment divisions to make the loan.
If we cannot
allocate the interest based on these percentages, then we will
allocate it as
described above for allocating your loan.
Repaying The Loan. You may repay all or part of a contract loan
while your
contract is in force. While you have a contract loan, we assume
that any money
you send us is meant to repay the loan. If you wish to have any
of these
payments serve as premium payments, then you must tell us in
writing.
You may choose how you want us to allocate your repayments. If you
do not give
us instructions, we will allocate your repayments based on your
premium
allocation percentages.
The Effects Of A Contract Loan On Your Cash Value. A loan against
your contract
will have a permanent effect on your cash value and benefits, even
if the loan
is repaid. When you borrow on your contract, we transfer your
loan amount into
our General Account where it earns a declared rate of interest.
You cannot
invest that loan amount in any Separate Account investment
divisions. You may
earn more or less on the loan amount, depending on the performance
of the
investment divisions and whether they are better or worse than the
rates
declared for the unloaned portion of the General Account.
Your Contract May Lapse. Your loan may affect the amount of time
that your
contract remains in force. For example, your contract may lapse
because the
loaned amount cannot be used to cover the monthly deductions that
are taken from
your cash value. If these deductions are more than the net cash
surrender value
of your contract, then the contract's lapse provisions may apply.
Since the
contract permits loans up to 92% of the cash surrender value, loan
repayments or
additional premium payments may be required to keep the contract
in force,
especially if you borrow the maximum. If your policy lapses with
a loan
outstanding, there may be adverse tax consequences.
Withdrawing Money From Your Cash Value
You may request a partial withdrawal of your net cash surrender
value by writing
to our executive office. You will not incur a surrender charge.
Partial
withdrawals are subject to certain conditions. They must:
be at least $200,
total no more than 50% of the net cash surrender value in any
contract year,
allow the death benefit to remain above the minimum for which we
would issue
the contract at that time,
allow the contract to still qualify as life insurance under
applicable tax law.
You may specify how much of the withdrawal you want taken from
each investment
division. If you do not tell us, then we will make the withdrawal
as described
in "Deductions and Charges - How Cash Value Charges Are Allocated"
on page 24. A
withdrawal may have adverse tax consequences.
Withdrawal Charges. When you make a partial withdrawal more than
once in a
contract year, a charge of $25 (or 2% of the amount withdrawn,
whichever is
less), will be deducted from your cash value. If you do not give
us
instructions for deducting the charge, then it will be deducted as
described
under "Deductions and Charges - How Cash Value Charges Are
Allocated" on page
24.
In general, we do not permit you to make a withdrawal on monies
for which your
premium check has not cleared your bank.
The Effects Of A Partial Withdrawal. A partial withdrawal reduces
the amount in
your cash value, the cash surrender value and generally the death
benefit on a
dollar-for-dollar basis. If the death benefit is based on the
corridor
percentage multiple, then the death benefit reduction could be
greater. If you
have death benefit option 1, then we will also reduce the face
amount of your
contract so that there will be no change in the net amount at
risk. We will
send you a new contract information page to reflect this change.
Both the
withdrawal and any reductions will be effective as of the date we
receive your
request at our executive office.
A contract loan might be better than a partial withdrawal if you
need temporary
cash.
Surrendering Your Contract
You may surrender your contract for its net cash surrender value
while at least
one of the insured persons is living. You do this by sending both
a written
request and the contract to our executive office. The net cash
surrender value
equals the cash surrender value minus any loan outstanding
(including loan
interest). During the surrender charge period (earlier of 15
years or the
attained Joint Equal Age of 95), the cash surrender value is the
cash value
minus the surrender charge. After the surrender charge period,
the cash
surrender value equals the cash value. We will compute the net
cash surrender
value as of the date we receive your request and contract at our
executive
office. All of your insurance coverage will end on that date. A
surrender may
have adverse tax consequences.
THE GENERAL ACCOUNT
You may allocate all or some of your cash value to the General
Account. The
General Account pays interest at a declared rate. We guarantee
the principal
after deductions. The General Account supports our insurance and
annuity
obligations. Because of applicable exemptive and exclusionary
provisions,
interests in the General Account have not been registered under
the Securities
Act of 1933, and the General Account has not been registered as an
investment
company under the Investment Company Act of 1940. Accordingly,
neither the
General Account nor any interests therein are generally subject to
regulation
under the 1933 Act or the 1940 Act. We have been advised that the
staff of the
SEC has not made a review of the disclosures which are included in
this
prospectus for your information and which relate to the General
Account.
You may accumulate amounts in the General Account by:
allocating net premium and loan payments,
transferring amounts from the investment divisions,
securing any contract loans, or
earning interest on amounts you already have in the General
Account.
This amount is reduced by transfers, withdrawals and allocated
deductions.
We pay interest on all your amounts in the General Account. The
annual interest
rates will never be less than 3.5%. We may, at our sole
discretion, credit
interest in excess of 3.5%. You assume the risk that interest
credited may not
exceed 3.5%. We may pay different rates on unloaned and loaned
amounts in the
General Account. Interest compounds daily at an effective annual
rate that
equals the annual rate we declared.
You may request a transfer between the General Account and one or
more of the
investment divisions, within limits. See "Transfers of Cash
Value".
DEDUCTIONS AND CHARGES
Deductions From Your Premiums
We deduct a sales charge, a premium tax charge, and a federal tax
charges from
each premium. These three charges total 6% of each premium. In
addition, in
some cases we also deduct a service charge. The rest of each
premium (called
the net premium) is placed in your cash value.
Sales Charge. We deduct a 2.25% sales charge from each premium
payment. This
charge partially reimburses us for the selling and distributing
costs of this
contract. These include commissions and the costs of preparing
sales literature
and printing prospectuses. (We also deduct a surrender charge if
you surrender
your contract for its net cash surrender value or let your
contract lapse during
the surrender charge period. See "Surrender Charges" on page 24.)
Premium Tax Charge. Some states and other jurisdictions (cities,
counties,
municipalities) tax premium payments and some levy other charges.
We deduct
2.25% of each premium for those tax charges. These tax rates
currently range
from 0.75% to 4%. We expect to pay an average of 2.25% in premium
tax because
of certain retaliatory provisions in the premium tax regulations.
If we pay
less, we may change the premium tax charge for that premium.
This is a tax to Midland so you cannot deduct it on your income
tax return.
Since the charge is a percentage of your premium, the amount of
the charge will
vary with the amount of the premium.
We may increase this charge if our premium tax expenses increase.
We reserve
the right to vary this charge by state. If we make such a change,
then we will
notify you.
Federal Tax Charge. A charge equal to 1.50% is deducted from each
premium to
pay applicable Federal taxes. We reserve the right to change this
charge to
reflect any changes in the law.
Service Charge. If you have chosen the Civil Service Allotment
Mode, then we
deduct $.46 from each premium payment. The $.46 covers the extra
expenses we
incur in processing bi-weekly premium payments.
Deductions From Your Cash Value
At the beginning of each contract month (including the contract
date), the
following three deductions are taken from your cash value:
1. Policy Charge: This charge is $10.00 per month (currently we
plan to make
this deduction for the first 10 years only, but we reserve the
right to deduct
it throughout the life of the contract). This charge covers the
continuing costs
of maintaining your contract, such as premium billing and
collections, claim
processing, contract transactions, record keeping, communications
with owners
and other expense and overhead items.
2. Expense Charge. The expense charge is based on the amount of
insurance on
your contract and is only deducted during the first 10 contract
years. This
charge varies based on the Joint Equal Age of the policy at the
time of issue.
This monthly charge ranges from $.065 for each $1,000 of insurance
to $.782 for
each $1,000 of insurance. This charge is used to recover certain
sales expenses
and distribution expenses. In addition, we expect to profit from
this charge.
3. Charges for Additional Benefits: Monthly deductions are made
for the cost of
any additional benefits (riders). We may change these charges,
but your
contract contains tables showing the guaranteed maximum rates for
all of these
insurance costs.
4. Cost of Insurance Charge: The cost of insurance is our current
monthly cost
of insurance rate times the amount at risk at the beginning of the
contract
month. If the current death benefit for the month is increased due
to the
requirements of Federal tax law, then your amount at risk for the
month will
also increase. For this purpose, your cash value amount is
determined before
deduction of the cost of insurance charge, but after all of the
other deductions
due on that date. The amount of the cost of insurance charge will
vary from
month to month with changes in the amount at risk.
The cost of insurance rate is based on the sex, issue age,
duration, and rating
class of each insured person at the time of the charge. We place
an insured
person who is a standard risk in the following rate classes:
preferred non-
smoker, non-smoker, and smoker. An insured person may also be
placed in a rate
class involving a higher mortality risk, known as a substandard
class. We may
change the cost of insurance rates, but they will never be more
than the
guaranteed maximum rates set forth in your contract. The maximum
charges are
based on the charges specified in the Commissioner's 1980 Standard
Ordinary
Mortality Table.
If Variable Survivorship Life is purchased in connection with an
employment-
related insurance or benefit plan, employers and employee
organizations should
consider, in consultation with counsel, the impact of Title VII of
the Civil
Rights Act of 1964. In 1983, the United States Supreme Court held
that under
Title VII, optional annuity benefits under a deferred compensation
plan could
not vary on the basis of sex.
The non-smoker cost of insurance rates are lower than the smoker
cost of
insurance rates. To qualify, an insured must be a standard risk
and must meet
additional requirements that relate to smoking habits. The
reduced cost of
insurance rates depends on such variables as the attained age and
sex of the
insured.
The preferred non-smoker cost of insurance rates are lower than
the non-smoker
cost of insurance rates. To qualify for the preferred non-smoker
class, an
insured person must be age 20 or over and meet certain
underwriting
requirements.
Changes in Monthly Charges. Any changes in the cost of insurance,
charges for
additional benefits or expense charges will be by class of insured
and will be
based on changes in future expectations of investment earnings,
mortality, the
length of time contracts will remain in effect, expenses and
taxes.
Charges Against The Separate Account
Fees and charges allocated to the investment divisions reduce the
amount in your
cash value.
Mortality and Expense Risk Charge. We charge for assuming
mortality and expense
risks. We guarantee that monthly administrative and insurance
deductions from
your cash value will never be greater than the maximum amounts
shown in your
contract.
The mortality risk we assume is that insured people will live for
shorter
periods than we estimated. When this happens, we have to pay a
greater amount
of death benefits than we expected. The expense risk we assume is
that the cost
of issuing and administering contracts will be greater than we
expected. We
charge for mortality and expense risks at an effective annual rate
of 0.50% of
the value of the assets in the Separate Account attributable to
Variable
Survivorship Life. We will reduce this charge to 0.25% after the
10th contract
year. The investment divisions' accumulation unit values reflect
this charge.
See "Using Your Cash Value - How We Determine The Accumulation
Unit Value" on
page 18. If the money we collect from this charge is not needed,
then we
profit. We expect to make money from this charge. To the extent
sales expenses
are not covered by the sales charge and surrender charge, our
General Account
funds, which may include amounts derived from this mortality and
expense risk
charge, will be used to cover sales expenses.
Tax Reserve. We reserve the right to charge for taxes or tax
reserves, which
may reduce the investment performance of the investment divisions.
Currently,
no such charge is made.
Transaction Charges
In addition to the deductions described above, we charge fees for
certain
contract transactions that you make:
Partial Withdrawal of Net Cash Surrender Value. You may make one
partial
withdrawal during each Contract Year without a charge. There is
an
administrative charge of $25 (or 2 percent of the amount
withdrawn, whichever is
less), each time You make a partial withdrawal if more than one
withdrawal is
made during a Contract Year.
Transfers. Currently, we do not charge when You make transfers of
Cash Value
among investment divisions. We reserve the right to assess a $25
charge after
the twelfth transfer in a Contract Year.
How Cash Value Charges Are Allocated
Generally, deductions from your cash value for monthly or partial
withdrawal
charges are made from the investment divisions and the unloaned
portion of the
General Account. They are made in accordance with your specified
deduction
allocation percentages unless you instruct us otherwise. Your
deduction
allocation percentages may be any whole numbers (from 10 to 100)
which add up to
100. You may change your deduction allocation percentages by
writing to our
executive office. Changes will be effective as of the date we
receive them.
If we cannot make a deduction in accordance with these
percentages, we will make
it based on the proportion of (a) to (b) where (a) is your
unloaned amounts in
the General Account and your amounts in the investment divisions
and (b) is the
total unloaned amount of your cash value.
Deductions for transfer charges are made equally between the
investment
divisions from which the transfer was made. For example, if the
transfer is made
from two investment divisions, then the transfer charge assessed
to each of the
investment divisions will be $12.50.
Surrender Charges
The surrender charge is the difference between the amount in your
cash value and
your contract's cash surrender value during the surrender charge
period (the
first 15 contract years or until the attained Joint Equal Age is
95, whichever
occurs first). It is a contingent, deferred charge designed to
partially
recover our expenses in distributing and issuing contracts which
are terminated
by surrender in their early years (the sales charge is also
designed to
partially reimburse us for these expenses). It is a contingent
load because you
pay it only if you surrender your contract (or let it lapse)
during the
surrender charge period. It is a deferred load because we do not
deduct it from
your premiums. The amount of the load in a contract year is not
necessarily
related to our actual sales expenses in that year. We anticipate
that the
sales charge and surrender charge will not fully cover our sales
expenses. If
sales expenses are not covered by the sales and surrender charges,
we will cover
them with other funds. The net cash surrender value, the amount
we pay you if
you surrender your contract for cash, equals the cash surrender
value minus any
outstanding loan and loan interest.
The following table provides some examples of the first year
surrender charge
per $1,000 of the face amount. This charge gradually decreases
and is
completely eliminated after the surrender charge period.
Table of First Year Surrender Charges
Per Thousand of Face Amount
for Two Standard Non-Smokers
Male Age 35, Female Age 35 $ 5.20
Male Age 45, Female Age 45 $ 7.70
Male Age 55, Female Age 55 $14.60
Male Age 65, Female Age 65 $28.00
Male Age 75, Female Age 75 $39.00
If there has been a change in face amount during the life of the
contract, then
the surrender charge is applied against the highest face amount in
force during
the life of the contract. Your contract will specify your actual
surrender
charge rates.
Charges In The Funds
The Funds charge for managing investments and providing services.
Each
portfolio's charges vary.
The VIP, the VIP II, and the VIP III Portfolios have an annual
management fee.
That fee is the sum of an individual fund fee rate and a group fee
rate based on
the monthly average net assets of Fidelity Management & Research
Company's
mutual funds. In addition, each of these portfolios' total
operating expenses
includes fees for management and shareholder services and other
expenses
(custodial, legal, accounting, and other miscellaneous fees). See
the VIP, VIP
II and VIP III prospectuses for additional information on how
these charges are
determined and on the minimum and maximum charges allowed.
The American Century Variable Portfolios have annual management
fees that are
based on the monthly average of the net assets in each of the
portfolios. See
the American Century Variable Portfolios prospectus for details.
The MFS Portfolios have annual management fees that are based on
the monthly
average of the net assets in each of the portfolios. See the MFS
Portfolios
prospectus for details.
The Lord Abbett Portfolio has an annual management fee that is
based on the
monthly average of the net assets in the portfolio. See the Lord
Abbett
Portfolio prospectus for details.
The expenses for all 23 portfolios for the year ending December
31, 1998,
(except as otherwise noted) are shown in the table below.
Management Other Total
Portfolio Fee Expenses
VIP Money Market .20% .10% .30%
VIP High Income .58% .12% .70%
VIP Equity-Income(1) .49% .09% .58%
VIP Growth(1) .59% .09% .68%
VIP Overseas(1) .74% .17% .91%
VIP II Asset Manager(1) .54% .10% .64%
VIP II Investment
Grade Bond .43% .14% .57%
VIP II Contrafund(1) .59% .11% .70%
VIP II Asset
Manager: Growth(1) .59% .14% .73%
VIP II Index 500(1) .24% .11% .35%
VIP III Growth &
Income(1) .49% .12% .61%
VIP III Balanced(1) .44% .15% .59%
VIP III Growth
Opportunities(1) .59% .12% .71%
American Century VP
Capital Appreciation 1.00% .00% 1.00%
American Century VP
Value 1.00% .00% 1.00%
American Century VP
Balanced .97% .00% .97%
American Century VP
International 1.47% .00% 1.47%
American Century VP
Income & Growth .70% .00% .70
MFS VIT Emerging
Growth(3) .75% .10% .85%
MFS VIT Research(3) .75% .11% .86%
MFS VIT Growth
With Income(3) .75% .13% .88%
MFS VIT New
Discovery(2) (3) .90% .27% 1.17%
Lord Abbett VC
Growth and Income .50% .01% .51%
(1) The portfolio used a portion of its paid brokerage
commissions to reduce
its expenses. Certain portfolios used credits gained as a result
of uninvested
cash balances to reduce custodian and transfer agent expenses.
Including these
reductions, total operating expenses would have been as follows:
VIP Equity-Income 0.57%
VIP Growth 0.66%
VIP Overseas 0.89%
VIP II Asset Manager 0.63%
VIP II Index 500 0.28%
VIP II Contrafund 0.66%
VIP II Asset Manager: Growth 0.72%
VIP III Balanced 0.58%
VIP III Growth Opportunities 0.70%
VIP III Growth & Income 0.60%
(2) MFS has agreed to bear expenses for this portfolio (subject
to
reimbursement by these portfolios) such that the portfolio's other
expenses
shall not exceed 0.25%. Without this limitation, the other
expenses and total
expenses would be:
Other Total
Expenses Expenses
MFS VIT New Discovery 4.32% 5.22%
(3) Each of the MFS Series has an expense offset arrangement,
which reduces the
series' custodian fee based upon the amount of cash maintained by
the series
with its custodian and dividend disbursing agent. Each series may
enter into
other such arrangements and directed brokerage arrangements, which
would also
have the effect of reducing the series' expenses. The expenses
shown above do
not take into account these expense reductions, and are therefore
higher than
the actual expenses of the series.
ADDITIONAL INFORMATION ABOUT THE CONTRACTS
Your Right To Examine The Contract
You have a right to examine the contract. If for any reason you
are not
satisfied with it, then you may cancel the contract within a
specific time
period. You cancel the contract by sending it to our executive
office along
with a written cancellation request. Your cancellation request
must be
postmarked by the latest of the following three dates:
10 days after you receive your contract,
10 days after we mail you a written notice telling you about your
rights to
cancel (Notice of Withdrawal Right), or
45 days after you sign Part 1 of the contract application.
If you cancel your contract, then we will return all of the
charges deducted
from your paid premiums and cash value, plus the cash value.
Insurance coverage ends when you send your request.
Your Contract Can Lapse
Your Variable Survivorship Life insurance coverage continues as
long as the net
cash surrender value of your contract is enough to pay the monthly
deductions
that are taken out of your cash value. During the Minimum Premium
Period,
coverage continues if your paid premiums exceed the schedule of
required minimum
premiums. If neither of these conditions is true at the beginning
of any
contract month, we will send written notification to you (and any
assignees on
our records) that a 61-day grace period has begun. This will tell
you the
amount of premium payment that is needed to satisfy the minimum
requirement for
two months.
If we receive payment of this amount before the end of the grace
period, then we
will use that amount to pay the overdue deductions. We will put
any remaining
balance in your cash value and allocate it in the same manner as
your previous
premium payments.
If we do not receive payment within 61 days, then your contract
will lapse
without value. We will withdraw any amount left in your cash
value. We will
apply this amount to the deductions owed to us, including any
applicable
surrender charge. We will inform you (and any assignee) that your
contract has
ended without value.
If the last surviving insured dies during the grace period, we
will pay the
insurance benefits to the beneficiary, minus any loan, loan
interest, and
overdue deductions.
You May Reinstate Your Contract
You may reinstate the contract within five years after it lapses
if you did not
surrender the contract for its net cash surrender value. To
reinstate the
contract, you must:
complete an application for reinstatement,
provide satisfactory evidence of insurability for both insured
persons,
pay enough premium to cover all overdue monthly deductions,
including the
premium tax on those deductions,
increase the cash value so that the cash value minus any contract
debt equals
the surrender charges,
cover the next two months' deductions, and
pay or restore any contract debt.
The contract date of the reinstated contract will be the beginning
of the
contract month that coincides with or follows the date that we
approve your
reinstatement application. Previous loans will not be reinstated.
Contract Periods And Anniversaries
We measure contract years, contract months, and contract
anniversaries from the
contract date shown on your contract information page. Each
contract month
begins on the same day in each calendar month. The calendar days
of 29, 30,
and 31 are not used. Our right to challenge a contract and the
suicide
exclusion are measured from the contract date. See "Limits On Our
Right To
Challenge The Contract" on page 28.
Maturity Date
The maturity date is the first contract anniversary after the
younger insured
person's 100th birthday unless your contract contains the Extended
Maturity
Rider. The contract ends on that date if at least one of the
insured persons is
still alive and the maturity benefit is paid.
If at least one of the insured persons survives to the maturity
date and your
contract contains the Extended Maturity Rider, we will extend the
maturity date
as long as this contract still qualifies as life insurance
according to the
Internal Revenue Service and your state. If the maturity date is
extended, the
contract may not qualify as life insurance and there may be tax
consequences. A
tax advisor should be consulted before you elect to extend the
maturity date.
We Own The Assets Of Our Separate Account
We own the assets of our Separate Account and use them to support
your contract
and other variable life contracts. We may permit charges owed to
us to stay in
the Separate Account. Thus, we may also participate
proportionately in the
Separate Account. These accumulated amounts belong to us and we
may transfer
them from the Separate Account to our General Account. The assets
in the
Separate Account generally are not chargeable with liabilities
arising out of
any other business we conduct. Under certain unlikely
circumstances, one
investment division of the Separate Account may be liable for
claims relating to
the operations of another division.
Changing the Separate Account
We have the right to modify how we operate our Separate Account.
We have the
right to:
add investment divisions to, or remove investment divisions from,
our Separate
Account;
combine two or more divisions within our Separate Account;
withdraw assets relating to Variable Survivorship Life from one
investment
division and put them into another;
eliminate the shares of a portfolio and substitute shares of
another portfolio
of the Funds or another open-end investment company. This may
happen if the
shares of the portfolio are no longer available for investment or,
if in our
judgment, further investment in the portfolio is inappropriate in
view of the
purposes of Separate Account A;
register or end the registration of our Separate Account under the
Investment
Company Act of 1940;
operate our Separate Account under the direction of a committee or
discharge
such a committee at any time (the committee may be composed
entirely of
interested parties of Midland);
disregard instructions from contract owners regarding a change in
the investment
objectives of the portfolio or the approval or disapproval of an
investment
advisory contract. (We would do so only if required by state
insurance
regulatory authorities or otherwise pursuant to insurance law or
regulation);
and
operate our Separate Account or one or more of the investment
divisions in any
other form the law allows, including a form that allows us to make
direct
investments. In choosing these investments, we will rely on our
own or outside
counsel for advice. In addition, we may disapprove of any change
in investment
advisors or in investment policies unless a law or regulation
provides
differently.
Limits On Our Right To Challenge The Contract
We can challenge the validity of your insurance contract (based on
material
misstatements in the application) if it appears that at least one
of the insured
persons is not actually covered by the contract under our rules.
There are
limits on how and when we can challenge the contract:
We cannot challenge the contract after it has been in effect,
during at least
one of the insured persons' lifetime, for two years from the date
the contract
was issued or reinstated. (Some states may require us to measure
this in some
other way.)
We cannot challenge any contract change that requires evidence of
insurability
(such as an increase in face amount) after the change has been in
effect for two
years during at least one of the insured persons' lifetime.
We can challenge at any time (and require proof of continuing
disability) an
additional benefit that provides benefits to an insured person in
the event that
an insured person becomes totally disabled.
If the last of the surviving insured persons dies during the time
that we may
challenge the validity of the contract, then we may delay payment
until we
decide whether to challenge the contract.
If an insured person's age or sex is misstated on any application,
then the
death benefit and any additional benefits will be changed. They
will be those
which would be purchased by the most recent deduction for the cost
of insurance
and the cost of any additional benefits at the correct age and
sex.
If either insured person commits suicide within two years after
the date on
which the contract was issued or reinstated, then the death
benefit will be
limited to the total of all paid premiums minus the amount of any
outstanding
contract loan and loan interest minus any partial withdrawals of
net cash
surrender value. If either insured person commits suicide within
two years
after the effective date of your requested face amount increase,
then we will
pay the face amount which was in effect before the increase, plus
the monthly
cost of insurance deductions for the increase (Some states require
us to measure
this time by some other date).
Your Payment Options
You may choose for contract benefits and other payments (such as
the net cash
surrender value or death benefit) to be paid immediately in one
lump sum or in
another form of payment. Payments under these options are not
affected by the
investment performance of any investment division. Instead,
interest accrues
pursuant to the option chosen. If you do not arrange for a
specific form of
payment before the insured person dies, then the beneficiary will
have this
choice. However, if you do make an arrangement with us for how
the money will
be paid, then the beneficiary cannot change your choice. Payment
options will
also be subject to our rules at the time of selection. Our
consent is required
when an optional payment is selected and the payee is either an
assignee or not
a natural person (i.e., a corporation). Currently, these
alternate payment
options are only available if the proceeds applied are more than
$1,000 and
periodic payments are at least $20.You have the following payment
options:
1. Deposit Option: The money will stay on deposit with us for a
period that
we agree upon. You will receive interest on the money at a
declared interest
rate.
2. Installment Options: There are two ways that we pay
installments:
a. Fixed Period: We will pay the amount applied in equal
installments plus
applicable interest, for a specified time, up to 30 years.
b. Fixed Amount: We will pay the sum in installments in an
amount that we
agree upon. We will continue to pay the installments until we pay
the original
amount, together with any interest you have earned.
3. Monthly Life Income Option: We will pay the money as monthly
income for
life. You may choose from 1 of 4 ways to receive the income. We
will guarantee
payments for:
(1) at least 5 years (called "5 Years Certain");
(2) at least 10 years (called "10 Years Certain");
(3) at least 20 years (called "20 Years Certain"); or
(4) payment for life. With a life only payment option, payments
will only be
made as long as the payee is alive. Therefore, if the payee dies
after
the first payment, only one payment will be made.
4. Other: You may ask us to apply the money under any option
that we make
available at the time the benefit is paid.
We guarantee interest under the deposit and installation options
at 2.75% a
year, but we may allow a higher rate of interest.
The beneficiary, or any other person who is entitled to receive
payment, may
name a successor to receive any amount that we would otherwise pay
to that
person's estate if that person died. The person who is entitled
to receive
payment may change the successor at any time.
We must approve any arrangements that involve more than one of the
payment
options, or a payee who is a fiduciary or not a natural person.
Also, the
details of all arrangements will be subject to our rules at the
time the
arrangements take effect. These include:
rules on the minimum amount we will pay under an option,
minimum amounts for installment payments,
withdrawal or commutation rights (your rights to receive payments
over time, for
which we may offer you a lump sum payment),
the naming of people who are entitled to receive payment and their
successors,
and
the ways of proving age and survival.
You will choose a payment option (or any later changes) and your
choice will
take effect in the same way as it would if you were changing a
beneficiary. (See
"Your Beneficiary" below). Any amounts that we pay under the
payment options
will not be subject to the claims of creditors or to legal
process, to the
extent that the law provides.
Your Beneficiary
You name your beneficiary in your contract application. The
beneficiary is
entitled to the insurance benefits of the contract. You may
change the
beneficiary during either insured person's lifetime by writing to
our executive
office. If no beneficiary is living when the last surviving
insured person
dies, then we will pay the death benefit to you. If the owner is
not surviving,
we will pay the death benefit to the owner's estate.
Assigning Your Contract
You may assign your rights in this contract. You must send a copy
of the
assignment to our executive office. We are not responsible for the
validity of
the assignment or for any payment we make or any action we take
before we
receive notice of the assignment. An absolute assignment is a
change of
ownership. There may be tax consequences.
When We Pay Proceeds From This Contract
We will generally pay any death benefits, net cash surrender
value, or loan
proceeds within seven days after receiving the required form(s) at
our executive
office. Death benefits are determined as of the date of the last
surviving
insured person's death and will not be affected by subsequent
changes in the
accumulation unit values of the investment divisions. We pay
interest from the
date of death to the date of payment.
We may delay payment for one or more of the following reasons:
(1) We contest the contract.
(2) We cannot determine the amount of the payment because the New
York Stock
Exchange is closed, the SEC has restricted trading in securities,
or the SEC has
declared that an emergency exists.
(3) The SEC, by order, permits us to delay payment to protect our
contract
owners.
We may also delay any payment until your premium checks have
cleared your bank.
We may defer payment of any loan amount, withdrawal, or surrender
from the
General Account for up to six months after we receive your
request.
TAX EFFECTS
Tax Status of the Policy
In order to qualify as a life insurance contract for Federal
income tax purposes
and to receive the tax treatment normally accorded life insurance
contracts
under Federeal tax law, a contract must satisfy certain
requirements which are
set forth in the Internal Revenue Code. Guidance as to how these
requirements
are to be applied is limited, particularly as to contracts that
insure more than
one individual. Nevertheless, we believe that it is reasonable to
conclude that
a contract will satisfy the applicable requirements, although
there is some
uncertainty, particularly if the contract owner pays the full
amount of premiums
permitted under the contract.
If it is subsequently determined that a contract does not satisfy
the applicable
requirements, Midland may take appropriate steps to bring the
contract into
compliance with such requirements and we resere the right to
restrict contract
transactions in order to do so.
In certain circumstances, owners of variable life insurance
contracts have been
considered for Federal income tax purposes to be the owners of the
assets of the
separate account supporting their contracts due to their ability
to exercise
investment control over those assets. Where this is the case, the
contract
owners have been currently taxed on income and gains attributable
to the
variable account assets. There is little guidance in this area,
and some
features of the contract, such as the flexibility of the contract
owner to
allocate payments and cash values, have not been explicitly
addressed in
published rulings. While Midland believes that the contract does
not give the
contract owner investment control over Separate Account assets,
Midland reserves
the right to modify the contract as necessary to prevent the
contract owner from
being treated as the owner of the Variable Account assets
supporting the
contract.
In addition, the Code requires that the investments of the
Separate Account be
"adequately diversified" in order for the contract to be treated
as a life
insurance contract for Federal income tax purposes. It is
intended that the
Separate Account, through the portfolios, will satisfy these
diversification
requirements.
The following discussion assumes that the contract will qualify as
a life
insurance contract for Federal income tax purposes.
Tax Treatment of Policy Benefits - In General
We believe that the death benefit payable to the beneficiary under
a contract on
the death of the second insured to die should be excludible from
the gross
income of the beneficiary. Federal, state and local transfer, and
other tax
consequences of ownership or receipt of contract proceeds depend
on the
circumstances of each contract owner or beneficiary. A tax
advisor should be
consulted on these consequences.
Generally, the contract owner will not be deemed to be in
constructive receipt
of the contract's cash value until there is a distribution. When
distributions
from a contract occur, or when loans are taken out from or secured
by a
contract, the tax consequences depend on whether the contract is
classified as a
"Modified Endowment contract."
Tax Treatment of Distributions - Modified Endowment Contracts
Under the Internal Revenue Code, certain life insurance contracts
are classified
as "Modified Endowment contracts," with less favorable tax
treatment than other
life insurance contracts. Due to the flexibility of the contracts
as to
premiums and benefits, the individual circumstances of each
contract will
determine whether it is classified as a Modified Endowment
contract. The rules
are too complex to be summarized here, but generally depend on the
amount of
premiumd paid during the first seven contract years. Certain
changes in a
contract after it is issued (including a reduction in benefits at
any time after
issuance) could also cause it to be classified as a Modified
Endowment contract.
A current or prospective contract owner should consult with a
competent tax
advisor to determine whether a contract transaction will cause the
contract to
be classified as a Modified Endowment contract.
Contracts classified as Modified Endowment contracts are subject
to the
following tax rules:
(1) All distributions other than death benefits, including
distributions upon
surrender and withdrawals, from a Modified Endowment contract will
be treated
first as distributions of gain taxable as ordinary income and as
tax-free
recovery of the contract owner's investment in the contract only
after all gain
has been distributed.
(2) Loans taken from or secured by a contract classified as a
Modified Endowment
contract (e.g., collateral assignments) are treated as
distributions and taxed
accordingly.
(3) A 10 percent additional income tax is imposed on the amount
subject to tax
except where the distribution or loan is made when the contract
owner has
attained age 59 1/2 or is disabled, or where the distribution is
part of a
series of substantially equal periodic payments for the life (or
life
expectancy) of the contract owner or the joint lives (or joint
life
expectancies) of the contract owner and the contract owner's
beneficiary or
designated beneficiary.
If a contract becomes a Modified Endowment contract, distributions
that occur
during the contract year will be taxed as distributions from a
Modified
Endowment contract. In addition, distributions from a contract
within two years
before it becomes a Modified Endowment contract will be taxed in
this manner.
This means that a distribution from a contract that is not a
Modified Endowment
contract at the time when the distribution is made could later
become taxable as
a distribution from a Modified Endowment contract.
Tax Treatment of Distributions - Contracts That Are Not Modified
Endowment
Contracts
Distributions other than death benefits from a contract that is
not classified
as a Modified Endowment contract are generally treated first as a
recovery of
the contract owner's investment in the contract and only after the
recovery of
all investment in the contract as taxable income. However,
certain
distributions which must be made in order to enable the contract
to continue to
qualify as a life insurance contract for Federal income tax
purposes if contract
benefits are reduced during the first 15 contract years may be
treated in whole
or in part as ordinary income subject to tax.
Loans from or secured by a contract that is not a Modified
Endowment contract
are generally not treated as distributions. However, the tax
consequences
associated with contract loans that are outstanding after the
first 10 contract
years, to the extent such loans do not exceed earnings, are less
clear and a tax
advisor should be consulted about such loans.
Finally, neither distributions from nor loans from or secured by a
contract that
is not a Modified Endowment contract are subject to the 10 percent
additional
income tax.
Investment in the Contract
Your investment in the contract is generally your aggregate
premiums. When a
distribution is taken from the contract, your investment in the
contract is
reduced by the amount of the distribution that is tax-free.
Loans
In general, interest on a contract loan will not be deductible.
Before taking
out a contract loan, you should consult a tax advisor as to the
tax
consequences.
Multiple Policies
All Modified Endowment contracts that are issued by Midland (or
its affiliates)
to the same contract owner during any calendar year are treated as
one Modified
Endowment contract for purposes of determining the amount
includible in the
contract owner's income when a taxable distribution occurs.
Tax Treatment of Policy Split Option
The policy split option allows the contract to be split into two
individual
contracts if both insureds submit evidence of insurability. It is
not clear
whether exercising the policy split rider will be treated as a
taxable
transaction or whether the individual contracts that result would
be classified
as Modified Endowment contracts. A competent tax advisor should
be consulted
before exercising the policy split option.
Other Policy Owner Tax Matters
Federal and state estate, inheritance, transfer, and other tax
consequences
depend on the individual circumstances of each contract owner or
beneficiary.
The transfer of the contract or designation of a beneficiary may
have federal,
state, and/or local transfer and inheritance tax consequences,
including the
imposition of gift, estate, and generation-skipping transfer
taxes. For
example, the transfer of the contract to, or the designation as a
beneficiary
of, or the payment of proceeds to, a person who is assigned to a
generation
which is two or more generations below the generation assignment
of the contract
owner may have generation-skipping transfer tax consequences under
federal tax
law. The individual situation of each contract owner or
beneficiary will
determine the extent, if any, to which federal, state, and local
transfer and
inheritance taxes may be imposed and how ownership or receipt of
contract
proceeds will be treated for purposes of federal, state and local
estate,
inheritance, generation-skipping and other taxes.
Businesses can use the contract in various arrangements, including
nonqualified
deferred compensation or salary continuance plans, split dollar
insurance plans,
executive bonus plans, tax exempt and nonexempt welfare benefit
plans, retiree
medical benefit plans and others. The tax consequences of such
plans may vary
depending on the particular facts and circumstances. If you are
purchasing the
contract for any arrangement the value of which depends in part on
its tax
consequences, you should consult a qualified tax advisor. In
recent years,
moreover, Congress has adopted new rules relating to life
insurance owned by
businesses. Any business contemplating the purchase of a new
contract or a
change in an existing contract should consult a tax advisor.
Possible Tax Law Changes
Although the likelihood of legislative changes is uncertain, there
is always the
possibility that the tax treatment of the contract could change by
legislation
or otherwise. Consult a tax advisor with respect to legislative
developments
and their effect on the contract.
Possible Charge for Midland's Taxes
At the present time, Midland makes no charge to the Separate
Account for any
federal, state, or local taxes (other than premium taxes) that it
incurs which
may be attributable to such account or to the contracts. Midland
reserves the
right to make a charge for any such tax or other economic burden
resulting from
the application of the tax laws.
If such a charge is made, it would be set aside as a provision for
taxes which
we would keep in the effected division rather than in our General
Account.
Other Tax Considerations
The foregoing discussion is general and is not intended as tax
advice. If you
are concerned about these tax implications, you should consult a
competent tax
advisor. This discussion is based on our understanding of the
Internal Revenue
Service's current interpretation of the present federal income tax
laws. No
representation is made as to the likelihood of continuation of
these current
laws and interpretations, and we do not make any guarantee as to
the tax status
of the contract. It should be further understood that the
foregoing discussion
is not complete and that special rules not described in this
prospectus may be
applicable in certain situations. Moreover, no attempt has been
made to consider
any applicable state or other tax laws.
PART 3: ADDITIONAL INFORMATION
MIDLAND NATIONAL LIFE INSURANCE COMPANY
We are Midland National Life Insurance Company, a stock life
insurance company.
Midland was organized, in 1906, in South Dakota, as a mutual life
insurance
company at that time named "The Dakota Mutual Life Insurance
Company". We
were reincorporated as a stock life insurance company in 1909. Our
name
"Midland" was adopted in 1925. We were redomesticated to Iowa in
1999. We are
licensed to do business in 49 states, the District of Columbia,
and Puerto Rico.
Our officers and directors are listed beginning on page 36.
Midland is a subsidiary of Sammons Enterprises, Inc., Dallas,
Texas. Sammons has
controlling or substantial stock interests in a large number of
other companies
engaged in the areas of insurance, corporate services, and
industrial
distribution.
YOUR VOTING RIGHTS AS AN OWNER
We invest the assets of our Separate Account divisions in shares
of the Funds'
portfolios. Midland is the legal owner of the shares and has the
right to vote
on certain matters. Among other things, we may vote:
to elect the Funds' Board of Directors,
to ratify the selection of independent auditors for the Funds, and
on any other matters described in the Funds' current prospectuses
or requiring a
vote by shareholders under the Investment Company Act of 1940.
Even though we own the shares, we give you the opportunity to tell
us how to
vote the number of shares that are allocated to your contract. We
will vote at
shareholder meetings according to your instructions.
The Funds will determine how often shareholder meetings are held.
As we receive
notice of these meetings, we will ask for your voting
instructions. The Funds
are not required to hold regular annual meetings.
If we do not receive instructions in time from all contract
owners, then we will
vote those shares in the same proportion as we vote shares for
which we have
received instructions in that portfolio. We will also vote any
Fund shares that
we alone are entitled to vote in the same proportions that
contract owners vote.
If the federal securities laws or regulations or interpretations
of them change
so that we are permitted to vote shares of the Fund in our own
right or to
restrict contract owner voting, then we may do so.
You may participate in voting only on matters concerning the Fund
portfolios in
which your cash value has been invested. We determine your voting
shares in each
division by dividing the amount of your cash value allocated to
that division by
the net asset value of one share of the corresponding Fund
portfolio. This is
determined as of the record date set by the Funds' Board for the
shareholders
meeting. We count fractional shares.
If you have a voting interest, we will send you proxy material and
a form for
giving us voting instructions. In certain cases, we may disregard
instructions
relating to changes in the Funds' advisor or the investment
policies of its
portfolios. We will advise you if we do.
Other insurance companies own shares in the Funds to support their
variable
insurance products. We do not foresee any disadvantage to this.
Nevertheless,
the Funds' Board of Directors will monitor events to identify
conflicts that may
arise and determine appropriate action. If we disagree with any
Fund action,
then we will see that appropriate action is taken to protect our
contract
owners.
OUR REPORTS TO CONTRACT OWNERS
Shortly after the end of the third, sixth, ninth, and twelfth
contract months,
we will send you reports that show:
the current death benefit for your contract,
your cash value,
information about investment divisions,
the cash surrender value of your contract,
the amount of your outstanding contract loans,
the amount of any interest that you owe on the loan, and
information about the current loan interest rate.
The annual report will show any transactions involving your cash
value that
occurred during the year. Transactions include your premium
allocations, our
deductions, and your transfers or withdrawals.
We will send you semi-annual reports with financial information on
the Funds,
including a list of the investments held by each portfolio.
Our report also contains information that is required by the
insurance
supervisory official in the jurisdiction in which this insurance
contract is
delivered.
Notices will be sent to you for transfers of amounts between
investment
divisions and certain other contract transactions.
DIVIDENDS
We do not pay any dividends on the contract described in this
prospectus.
MIDLAND'S SALES AND OTHER AGREEMENTS
The contract will be sold by individuals who, in addition to being
licensed as
life insurance agents for Midland National Life, are registered
representatives
of Walnut Street Securities (WSS) or broker-dealers who have
entered into
written sales agreements with WSS. WSS, the principal underwriter
of the
contracts, is registered with the SEC as a broker-dealer under the
Securities
Exchange Act of 1934 and is a member of the National Association
of Securities
Dealers, Inc. The address for Walnut Street Securities is 670
Mason Ridge
Center Drive, Suite 301, St. Louis, Missouri 63141.
During the first contract year, we will pay agents a commission of
up to 68% of
premiums paid. For subsequent years, the commission allowance may
equal an
amount up to 2.5% of premiums paid. After the 15th contract year,
we pay no
commission. Certain persistency and production bonuses may be
paid.
We may sell our contracts through broker-dealers registered with
the Securities
and Exchange Commission under the Securities Exchange Act of 1934
that enter
into selling agreements with us. The commission for broker-
dealers will be no
more than that described above.
REGULATION
We are regulated and supervised by the Iowa Insurance Department.
We are
subject to the insurance laws and regulations in every
jurisdiction where we
sell contracts. This contract has been filed with and approved by
insurance
officials in those states. The provisions of this contract may
vary somewhat
from jurisdiction to jurisdiction.
We submit annual reports on our operations and finances to
insurance officials
in all the jurisdictions where we sell contracts. The officials
are responsible
for reviewing our reports to be sure that we are financially sound
and are
complying with the applicable laws and regulations.
We are also subject to various federal securities laws and
regulations.
YEAR 2000
The Year 2000 issue (Y2K) relates to the ability of computer
systems to properly
recognize a four-digit year code. Many computer systems only
allowed for a two-
digit year code and thus years such as 1998 were simply recognized
as 98. Using
a two-digit year code for the years 2000 and beyond could result
in errors and
miscalculations.
Midland National Life relies extensively on computer systems in
its daily
operations. Several years ago, we began implementing a Plan to
modify all of our
computer systems to properly recognize the year 2000. Our Y2K Plan
focused on
assuring compliance in the following areas: Information Technology
("IT") and
non-information ("non-IT") hardware, operating systems, software
applications
and custom applications. We are in the process of the remediation
and testing of
other systems, including telephone, heating and cooling,
mechanical and other
equipment having embedded, date sensitive technology for Year 2000
compliance,
In addition, we are reviewing the Year 2000 compliance status of
our mission
critical customers, vendors and service providers.
We have upgraded our mainframe computer hardware, systems software
and
applications software to address Y2K issues and we expect to
complete compliance
testing by June 30, 1999. Most of our systems run on the IBM
mainframe computer
platform, where future dated systems testing has been performed
through December
31, 2000. We are in the process of updating and testing hardware
and software
running on personal computer (PC) platforms and expect to have any
Y2K issues
resolved by June 30, 1999.
Y2K issues have been handled primarily by our internal staff.
We are currently in the process of developing a Y2K Contingency
Plan and will
involve representatives from our IT and non-IT business units in
the planning
process. The Y2K Contingency Plan may include potential Y2K issues
generated
within our own Company and potential Y2K issues generated by third
parties that
have a mission critical business relationship with us.
While we cannot guarantee that our computer systems nor those of
the parties
with which we conduct business will properly function once the
year 2000 is
reached, Midland National Life is committed to maintaining
reliable computer
systems which properly recognize the year 2000.
DISCOUNT FOR MIDLAND EMPLOYEES
Midland employees may receive a discount of up to 25% of first
year premiums.
Midland will pay the discount as the employee contributes the
premium. All
other contract provisions will apply.
LEGAL MATTERS
The law firm of Sutherland Asbill & Brennan LLP, Washington, DC,
has provided
advice regarding certain matters relating to federal securities
laws.
We are not involved in any material legal proceedings.
FINANCIAL
The financial statements of Midland National Life Separate Account
A and Midland
National Life Insurance Company, included in this prospectus and
the
registration statement, have been audited by
PricewaterhouseCoopers LLP,
independent auditors, for the periods indicated in their report
which appears in
this prospectus and in the registration statement. The address for
PricewaterhouseCoopers LLP is IBM Park Building, Suite 1300, 650
Third Avenue
South, Minneapolis, Minnesota 55402-4333. The financial
statements have been
included in reliance upon reports given upon the authority of the
firm as
experts in accounting and auditing.
ADDITIONAL INFORMATION
We have filed a Registration Statement relating to the Separate
Account and the
variable life insurance contract described in this prospectus with
the
Securities and Exchange Commission. The Registration Statement,
which is
required by the Securities Act of 1933, includes additional
information that is
not required in this prospectus under the rules and regulations of
the SEC. If
you would like the additional information, then you may obtain it
from the SEC's
main office in Washington, DC. You will have to pay a fee for the
material.
Management of Midland
Here is a list of our directors and officers.
Directors
Name and
Business Address PrincipalOccupation Principal Occupation During
Past Five Years
Michael M. Masterson
Midland National Life
One Midland Plaza
Sioux Falls,SD 57193-0001
Chairman of the Board,President and Chief
Executive Officer
Chairman of the Board (March
1999 to present), Chief Executive
Officer and President (March 1997
to present) President and Chief
Operating Officer (March 1996 to
February 1997), Executive Vice
President-Marketing (March 1995
to February 1996), Midland
National Life Insurance Company;
Vice President - Individual Sales
(prior thereto), Northwestern
National Life
John J. Craig, II
Midland National Life
One Midland Plaza
Sioux Falls, SD 57193-0001
Executive Vice President
Executive Vice President (January
1998 to present), Midland National
Life Insurance Company; Senior
Vice President and Chief Financial
Officer (October 1993 to 1998),
Midland National Life Insurance
Company; Treasurer (January 1996
to present), Briggs ITD Corp.;
Treasurer (March 1996 to present),
Sammons Financial Holdings, Inc.;
Treasurer (November 1993 to
present), CH Holdings; Treasurer
(November 1993 to present),
Consolidated Investment Services,
Inc.; Treasurer (November 1993 to
present), Richmond Holding
Company, L.L.C.; Partner (prior
thereto), Ernst and Young
Steven C. Palmitier
Midland National Life
One Midland Plaza
Sioux Falls, SD 57193-0001
Senior Vice President and
Chief Marketing Officer
Senior Vice President and Chief
Marketing Officer (March 1997 to
present), Senior Vice President-
Sales (August 1996 to February
1997), Midland National Life
Insurance Company; Senior Vice
President-Sales (prior thereto),
Penn Mutual Life Insurance
Robert W. Korba
Sammons Enterprises,Inc.
300 Crescent CT
Dallas, TX 75201
Board of Directors
Member, Vice President
President and Director (since
1988), Sammons Enterprises, Inc.,
Vice President (August 1998 to
present), Midland National Life
Insurance Company
Executive Officers (other than Directors)
Unless otherwise indicated, the addresses for the following are
One Midland
Plaza, Sioux Falls, SD 57193-0001
Name and
Business Address Principal Occupation Principal Occupation During
Past Five
Years
E John Fromelt
Midland National Life
Senior Vice President,
Chief Investment Officer
Senior Vice President, Chief
Investment Officer (since 1990),
Midland National Life Insurance
Company; President (since August
1995), Midland Advisors
Company; Chief Investment Officer
(1996 to present), North American
Company for Life and Health
Stephen P. Horvat, Jr.
Midland National Life
Senior Vice President
Senior Vice President (January
1997 to present), Midland National
Life Insurance Company;
Shareholder (June 1996 to
December 1997), Sorling Law
Firm; Sernior Vice President,
General Counsel & Secretary (prior
thereto), Franklin Life Insurance
Company
Gary J. Gaspar
North American
Company for Life &
Health Insurance
222 South Riverside Plaza
Chicago, IL 60606-5929
Senior Vice President &
Chief Information Officer
Senior Vice President & Chief
Information Officer (August 1998
to present), Midland National Life
Insurance Company; Senior Vice
President Information Systems
Officer (1985 to present); North
American Company for Life &
Health Insurance
Jack L. Briggs
Midland National Life
Vice President,
Secretary, and General Counsel
Vice President, Secretary and
General Counsel (since 1978),
Midland National Life Insurance
Company
Gary W. Helder
Midland National Life
Vice President-Policy
Administration
Vice President-Policy
Administration (since 1991),
Midland National Life Insurance
Company
Robert W. Buchanan
Midland National Life
Vice President- Marketing
Services
Vice President-Marketing Services
(March 1996 to present), Second
Vice President-Sales Development
(prior thereto), Midland National
Life Insurance Company
Thomas M. Meyer
Midland National Life
Vice President and
Chief Financial Officer
Vice President and Chief Financial
Officer (January 1998 to present),
Second Vice President and
Controller (1995 to 1998), Midland
National Life Insurance Company
Julia B. Roper
North American
Company for Life &
Health Insurance
222 South Riverside Plaza
Chicago, IL 60606-5929
Vice President &
Chief Compliance Officer
Vice President & Chief
Compliance Officer (August 1998
to present), Midland National Life
Insurance; Vice President & Chief
Compliance Officer (September
1997 to present), North American
Company for Life & Health
Insurance; Assistant Vice President
(prior thereto), CNA Insurance
Companies
Joseph B. Moran
Parkway Mortgage
1700 Galloping Hill Road
Kenilworth, NJ 07033
Vice President -
Parkway Mortgage
Division
Vice President - Parkway
Mortgage Division (January 1999
to present), Midland National Life
Insurance Company; President
(prior thereto), Parkway Mortgage,
Inc.
James T. Fehon
Parkway Mortgage
1700 Galloping Hill Road
Kenilworth, NJ 07033
Vice President -
Parkway Mortgage Division
Vice President - Parkway
Mortgage Division (January 1999
to present), Midland National Life
Insurance Company; Executive
Vice President (prior thereto),
Parkway Mortgage, Inc.
Illustration
Following are a series of tables that illustrate how the cash
values, cash
surrender values, and death benefits of a contract change with the
investment
performance of the Funds. The tables show how the cash values,
cash surrender
values, and death benefits of a contract issued to two insureds of
a given age
and given premium would vary over time if the return on the assets
held in each
Portfolio of the Funds were a constant gross, after tax annual
rate of 0%, 6%,
or 12%.
The tables on the following pages illustrate the following
examples:
Death Benefit Option 1 Standard Corridor Percentage Table, Face
Amount
$1,000,000, Annual Premium $15,000, male preferred non-smoker
issue age 55
and a female preferred non-smoker issue age 55 (both current and
guaranteed
charges).
Death Benefit Option 2 Standard Corridor Percentage Table, Face
Amount
$1,000,000, Annual Premium $30,000, male preferred non-smoker
issue age 55
and a female preferred non-smoker issue age 55 (both current and
guaranteed
charges).
The cash values, cash surrender values, and death benefits would
be different
from those shown if the returns averaged 0%, 6%, and 12% over a
period of years,
but fluctuated above and below those averages for individual
contract years.
The amount of the cash value exceeds the cash surrender value
until the end of
the surrender charge period (earlier of the end of 15 policy years
or the
attained Joint Equal Age of 95) due to the surrender charge. For
contract years
after the expiration of the surrender charge period, the cash
value and cash
surrender value are equal, since the surrender charge has reduced
to zero.
The second column shows the accumulation value of the premiums
paid at the
stated interest rate. The third and sixth columns illustrate the
cash values and
the fourth and seventh columns illustrate the cash surrender
values of the
contract over the designated period. The cash values shown in the
third column
and the cash values shown in the fourth column assume the monthly
charge for
cost of insurance is based upon the current cost of insurance
rates. The cash
values shown in the sixth column and the cash surrender values
shown in the
seventh column assume the monthly charge for cost of insurance is
based upon the
cost of insurance rates that we guarantee. The maximum cost of
insurance rates
allowable under the contract are based on the Commissioner's 1980
Standard
Ordinary Mortality Table. The fifth and eighth columns illustrate
the death
benefit of a contract over the designated period. The
illustrations of death
benefits reflect the same assumptions as the cash value and cash
surrender
values. The death benefit values also vary between tables,
depending
upon whether Option 1 or Option 2 death benefits are illustrated
and depending
on whether the standard or enhanced corridor table has been
selected.
The amounts shown for the death benefit, cash values, and cash
surrender values
reflect the fact that the net investment return of the divisions
of our Separate
Account is lower than the gross, after-tax return on the assets in
the Funds, as
a result of expenses paid by the Funds and charges levied against
the divisions
of our Separate Account. The illustrations also reflect the 2.25%
sales charge
deduction from each premium, the 2.25% state premium tax deduction
and the 1.5%
federal tax charge from each premium, the $10.00 per month policy
charge (for
the first ten years on a current basis) the expense charge, as
well as current
and guaranteed cost of insurance charges.
The contract values shown assume daily investment advisory fees
and operating
expenses equivalent to an annual rate of .76% of the aggregate
average daily net
assets of the Portfolios of the Funds (the average rate of the
Portfolios for
the period ending December 31, 1998). The actual fees and expenses
associated
with the contract may be more or less than .76% and will depend on
how
allocations are made to each investment division. The contract
values also take
into account a daily charge to each division of Separate Account A
for assuming
mortality and expense risks and administrative charges which is
equivalent to a
charge at an annual rate of .50% (.25% after year 10 on both a
current and
guaranteed basis) of the average net assets of the divisions of
Separate Account
A. After deductions of these amounts, the illustrated gross
investment rates of
0%, 6%, and 12% correspond to approximate net annual rates of -
1.26%, 4.74%, and
10.74%, respectively (-1.01%, 4.99%, 10.99% after year 10).
The tables illustrate the contract values that would result based
on
hypothetical investment rates of return if premiums are paid in
full at the
beginning of each year and if no contract loans have been made.
The values would
vary from those shown if the assumed annual premium payments were
paid in
installments during a year. The values would also vary if the
contract owner
varied the amount or frequency of premium payments. The tables
also assume that
the contract owner has not requested an increase or decrease in
face amount,
that no withdrawals have been made and no withdrawal charges
imposed, that no
contract loans have been taken, and that no transfers have been
made and no
transfer charges imposed.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 1 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $15,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
0%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2) VALUE(2) BENEFIT(2)
1 15,750 11,894 0 1,000,000 11,845 0 1,000,000
2 32,288 23,630 9,030 1,000,000 23,424 8,824 1,000,000
3 49,652 35,207 21,337 1,000,000 34,716 20,846 1,000,000
4 67,884 46,624 33,484 1,000,000 45,701 32,561 1,000,000
5 87,029 57,874 45,464 1,000,000 56,350 43,940 1,000,000
6 107,130 68,966 57,286 1,000,000 66,627 54,947 1,000,000
7 128,237 79,908 68,958 1,000,000 76,488 65,538 1,000,000
8 150,398 90,688 80,468 1,000,000 85,869 75,649 1,000,000
9 173,668 101,304 91,814 1,000,000 94,691 85,201 1,000,000
10 198,102 111,755 102,995 1,000,000 102,863 94,103 1,000,000
11 223,757 124,383 116,353 1,000,000 112,487 104,457 1,000,000
12 250,695 136,834 129,534 1,000,000 121,265 113,965 1,000,000
13 278,979 149,083 142,513 1,000,000 129,091 122,521 1,000,000
14 308,678 161,117 155,277 1,000,000 135,841 130,001 1,000,000
15 339,862 172,889 169,969 1,000,000 141,352 138,432 1,000,000
16 372,605 184,357 184,357 1,000,000 145,403 145,403 1,000,000
17 406,986 195,515 195,515 1,000,000 147,690 147,690 1,000,000
18 443,085 206,321 206,321 1,000,000 147,812 147,812 1,000,000
19 480,989 216,728 216,728 1,000,000 145,278 145,278 1,000,000
20 520,789 226,680 226,680 1,000,000 139,528 139,528 1,000,000
21 562,578 236,100 236,100 1,000,000 129,934 129,934 1,000,000
22 606,457 244,884 244,884 1,000,000 115,797 115,797 1,000,000
23 652,530 252,904 252,904 1,000,000 96,307 96,307 1,000,000
24 700,906 260,018 260,018 1,000,000 70,451 70,451 1,000,000
25 751,702 266,063 266,063 1,000,000 36,864 36,864 1,000,000
30 1,046,412 270,541 270,541 1,000,000 0 0 0
35 1,422,545 183,934 183,934 1,000,000 0 0 0
40 1,902,596 0 0 0 0 0 0
45 2,515,277 0 0 0 0 0 0
1. ASSUMES A $15,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 1 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $15,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
6%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5% INTEREST CASH SURRENDER DEATH CASH
SURRENDER DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2)
VALUE(2) BENEFIT(2)
1 15,750 12,674 0 1,000,000 12,623 0
1,000,000
2 32,288 25,940 11,340 1,000,000 25,725 11,125
1,000,000
3 49,652 39,824 25,954 1,000,000 39,303 25,433
1,000,000
4 67,884 54,352 41,212 1,000,000 53,356 40,216
1,000,000
5 87,029 69,544 57,134 1,000,000 67,874 55,464
1,000,000
6 107,130 85,441 73,761 1,000,000 82,843 71,163
1,000,000
7 128,237 102,080 91,130 1,000,000 98,237 87,287
1,000,000
8 150,398 119,485 109,265 1,000,000 114,011 103,791
1,000,000
9 173,668 137,688 128,198 1,000,000 130,105 120,615
1,000,000
10 198,102 156,724 147,964 1,000,000 146,450 137,690
1,000,000
11 223,757 179,153 171,123 1,000,000 165,336 157,306
1,000,000
12 250,695 202,656 195,356 1,000,000 184,482 177,182
1,000,000
13 278,979 227,263 220,693 1,000,000 203,814 197,244
1,000,000
14 308,678 253,019 247,179 1,000,000 223,252 217,412
1,000,000
15 339,862 279,941 277,021 1,000,000 242,680 239,760
1,000,000
16 372,605 308,054 308,054 1,000,000 261,939 261,939
1,000,000
17 406,986 337,421 337,421 1,000,000 280,807 280,807
1,000,000
18 443,085 368,077 368,077 1,000,000 298,991 298,991
1,000,000
19 480,989 400,066 400,066 1,000,000 316,138 316,138
1,000,000
20 520,789 433,429 433,429 1,000,000 331,862 331,862
1,000,000
21 562,578 468,205 468,205 1,000,000 345,751 345,751
1,000,000
22 606,457 504,429 504,429 1,000,000 357,367 357,367
1,000,000
23 652,530 542,139 542,139 1,000,000 366,222 366,222
1,000,000
24 700,906 581,394 581,394 1,000,000 371,719 371,719
1,000,000
25 751,702 622,273 622,273 1,000,000 373,046 373,046
1,000,000
30 1,046,412 855,930 855,930 1,000,000 258,958 258,958
1,000,000
35 1,422,545 1,160,286 1,160,286 1,218,300 0 0
0
40 1,902,596 1,545,267 1,545,267 1,560,719 0 0
0
45 2,515,277 2,053,039 2,053,039 2,053,039 0 0
0
1. ASSUMES A $15,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 1 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $15,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
12%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5%INTEREST CASH SURRENDER DEATH CASH SURRENDER
DEATH
YEAR PER YEAR VALUE(2)VALUE(2) BENEFIT(2)VALUE(2)VALUE(2)
BENEFIT(2)
1 15,750 13,455 0 1,000,000 13,403 0
1,000,000
2 32,288 28,347 13,747 1,000,000 28,121 13,521
1,000,000
3 49,652 44,826 30,956 1,000,000 44,273 30,403
1,000,000
4 67,884 63,060 49,920 1,000,000 61,987 48,847
1,000,000
5 87,029 83,229 70,819 1,000,000 81,402 68,992
1,000,000
6 107,130 105,549 93,869 1,000,000 102,666 90,986
1,000,000
7 128,237 130,255 119,305 1,000,000 125,935 114,985
1,000,000
8 150,398 157,593 147,373 1,000,000 151,369 141,149
1,000,000
9 173,668 187,842 178,352 1,000,000 179,136 169,646
1,000,000
10 198,102 221,313 212,553 1,000,000 209,423 200,663
1,000,000
11 223,757 261,101 253,071 1,000,000 245,032 237,002
1,000,000
12 250,695 305,225 297,925 1,000,000 284,002 276,702
1,000,000
13 278,979 354,148 347,578 1,000,000 326,688 320,118
1,000,000
14 308,678 408,392 402,552 1,000,000 373,498 367,658
1,000,000
15 339,862 468,523 465,603 1,000,000 424,902 421,982
1,000,000
16 372,605 535,183 535,183 1,000,000 481,438 481,438
1,000,000
17 406,986 609,121 609,121 1,000,000 543,740 543,740
1,000,000
18 443,085 691,165 691,165 1,000,000 612,579 612,579
1,000,000
19 480,989 782,252 782,252 1,000,000 688,945 688,945
1,000,000
20 520,789 883,457 883,457 1,000,000 774,151 774,151
1,000,000
21 562,578 995,989 995,989 1,045,788 869,942 869,942
1,000,000
22 606,457 1,120,889 1,120,889 1,176,933 978,560 978,560
1,027,488
23 652,530 1,259,429 1,259,429 1,322,400 1,099,616 1,099,616
1,154,597
24 700,906 1,413,076 1,413,076 1,483,730 1,233,339 1,233,339
1,295,006
25 751,702 1,583,446 1,583,446 1,662,618 1,380,940 1,380,940
1,449,987
30 1,046,412 2,754,594 2,754,594 2,892,324 2,374,535 2,374,535
2,493,261
35 1,422,545 4,692,334 4,692,334 4,926,951 3,936,171 3,936,171
4,132,979
40 1,902,596 7,913,707 7,913,707 7,992,844 6,469,381 6,469,381
6,534,074
45 2,515,27713,426,49413,426,494 13,426,49410,993,02510,993,025
10,993,025
1. ASSUMES A $15,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 2 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $30,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
0%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5% INTEREST CASH SURRENDER DEATH CASH
SURRENDER DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2)
VALUE(2) BENEFIT(2)
1 31,500 25,812 11,212 1,025,812 25,767
11,167 1,000,000
2 64,575 51,274 36,674 1,051,274 51,088
36,488 1,051,088
3 99,304 76,382 62,512 1,076,382 75,943
62,073 1,075,943
4 135,769 101,129 87,989 1,101,129 100,307
87,167 1,100,307
5 174,057 125,491 113,081 1,125,491 124,149
111,739 1,124,149
6 214,260 149,500 137,820 1,149,500 147,427
135,747 1,147,427
7 256,473 173,177 162,227 1,173,177 170,090
159,140 1,170,090
8 300,797 196,489 186,269 1,196,489 192,064
181,844 1,192,064
9 347,337 219,433 209,943 1,219,433 213,255
203,765 1,213,255
10 396,204 242,005 233,245 1,242,005 233,556
224,796 1,233,556
11 447,514 266,918 258,888 1,266,918 255,405
247,375 1,255,405
12 501,389 291,451 284,151 1,291,451 276,141
268,841 1,276,141
13 557,959 315,548 308,978 1,315,548 295,629
289,059 1,295,629
14 617,357 339,177 333,337 1,339,177 313,715
307,875 1,313,715
15 679,725 362,232 359,312 1,362,232 330,199
327,279 1,330,199
16 745,211 384,519 384,519 1,384,519 344,814
344,814 1,344,814
17 813,972 406,065 406,065 1,406,065 357,209
357,209 1,357,209
18 886,170 426,748 426,748 1,426,748 366,924
366,924 1,366,924
19 961,979 446,443 446,443 1,446,443 373,420
373,420 1,373,420
201,041,578 464,993 464,993 1,464,993 376,118
376,118 1,376,118
211,125,156 482,192 482,192 1,482,192 374,425
374,425 1,374,425
221,212,914 497,757 497,757 1,497,757 367,753
367,753 1,367,753
231,305,060 511,349 511,349 1,511,349 355,516
355,516 1,355,516
241,401,813 522,604 522,604 1,522,604 337,069
337,069 1,337,069
251,503,404 531,105 531,105 1,531,105 311,616
311,616 1,311,616
302,092,824 509,818 509,818 1,509,818 36,109
36,109 1,036,109
352,845,090 296,621 296,621 1,296,621 0
0 0
403,805,193 0 0 0 0
0 0
455,030,555 0 0 0 0
0 0
1. ASSUMES A $30,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 2 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $30,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
6%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5%INTEREST CASH SURRENDER DEATH CASH SURRENDER
DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2) VALUE(2)VALUE(2)
BENEFIT(2)
1 31,500 27,438 12,838 1,027,438 27,391 12,791
1,000,000
2 64,575 56,151 41,551 1,056,151 55,956 41,356
1,055,956
3 99,304 86,190 72,320 1,086,190 85,722 71,852
1,085,722
4 135,769 117,607 104,467 1,117,607 116,716 103,576
1,116,716
5 174,057 150,438 138,028 1,150,438 148,957 136,547
1,148,957
6 214,260 184,778 173,098 1,184,778 182,455 170,775
1,182,455
7 256,473 220,715 209,765 1,220,715 217,208 206,258
1,217,208
8 300,797 258,286 248,066 1,258,286 253,191 242,971
1,253,191
9 347,337 297,562 288,072 1,297,562 290,357 280,867
1,290,357
10 396,204 338,614 329,854 1,338,614 328,642 319,882
1,328,642
11 447,514 384,542 376,512 1,384,542 370,821 362,791
1,370,821
12 501,389 432,628 425,328 1,432,628 414,183 406,883
1,414,183
13 557,959 482,921 476,351 1,482,921 458,637 452,067
1,458,637
14 617,357 535,491 529,651 1,535,491 504,064 498,224
1,504,064
15 679,725 590,338 587,418 1,590,338 550,293 547,373
1,550,293
16 745,211 647,370 647,370 1,647,370 597,071 597,071
1,597,071
17 813,972 706,714 706,714 1,706,714 644,043 644,043
1,644,043
18 886,170 768,354 768,354 1,768,354 690,721 690,721
1,690,721
19 961,979 832,265 832,265 1,832,265 736,507 736,507
1,736,507
20 1,041,578 898,389 898,389 1,898,389 780,724 780,724
1,780,724
21 1,125,156 966,609 966,609 1,966,609 822,641 822,641
1,822,641
22 1,212,914 1,036,728 1,036,728 2,036,728 861,493 861,493
1,861,493
23 1,305,060 1,108,470 1,108,470 2,108,470 896,466 896,466
1,896,466
24 1,401,813 1,181,520 1,181,520 2,181,520 926,646 926,646
1,926,646
25 1,503,404 1,255,491 1,255,491 2,255,491 950,907 950,907
1,950,907
30 2,092,824 1,615,158 1,615,158 2,615,158 922,701 922,701
1,922,701
35 2,845,090 1,853,286 1,853,286 2,853,286 440,546 440,546
1,440,546
40 3,805,193 1,803,713 1,803,713 2,803,713 0 0
0
45 5,030,555 1,352,939 1,352,939 2,352,939 0 0
0
1. ASSUMES A $30,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
MIDLAND NATIONAL LIFE INSURANCE COMPANY - VSL
DEATH BENEFIT OPTION 2 STANDARD CORRIDOR TABLE FACE AMOUNT:
$1,000,000
MALE PREFERRED NON-SMOKER ISSUE AGE 55 FEMALE PREFERRED NON-
SMOKER ISSUE AGE
55
ASSUMED ANNUAL PREMIUM(1): $30,000 HYPOTHETICAL GROSS AMOUNT RATE
OF PREMIUM:
12%
PREMIUMS ASSUMING CURRENT COSTS ASSUMING
GUARANTEED COSTS
END ACCUMULATED
OF AT 5% INTEREST CASH SURRENDER DEATH CASH SURRENDER
DEATH
YEAR PER YEAR VALUE(2) VALUE(2) BENEFIT(2)VALUE(2)VALUE(2)
BENEFIT(2)
1 31,500 29,065 14,465 1,029,065 29,017
14,417 1,029,017
2 64,575 61,225 46,625 1,061,225 61,021
46,421 1,061,021
3 99,304 96,803 82,933 1,096,803 96,306
82,436 1,096,306
4 135,769 136,156 123,016 1,136,156 135,191
122,051 1,135,191
5 174,057 179,657 167,247 1,179,657 178,023
165,613 1,178,023
6 214,260 227,780 216,100 1,227,780 225,176
213,496 1,225,176
7 256,473 281,041 270,091 1,281,041 277,050
266,100 1,277,050
8 300,797 339,951 329,731 1,339,951 334,066
323,846 1,334,066
9 347,337 405,109 395,619 1,405,109 396,666
387,176 1,396,666
10 396,204 477,177 468,417 1,477,177 465,327
456,567 1,465,327
11 447,514 560,324 552,294 1,560,324 543,819
535,789 1,543,819
12 501,389 652,472 645,172 1,652,472 629,989
622,689 1,629,989
13 557,959 754,547 747,977 1,754,547 724,522
717,952 1,724,522
14 617,357 867,602 861,762 1,867,602 828,162
822,322 1,828,162
15 679,725 992,723 989,803 1,992,723 941,681
938,761 1,941,681
16 745,211 1,131,026 1,131,026 2,131,026 1,065,864
1,065,864 2,065,864
17 813,972 1,283,979 1,283,979 2,283,979 1,201,488
1,201,488 2,201,488
18 886,170 1,453,056 1,453,056 2,453,056 1,349,299
1,349,299 2,349,299
19 961,979 1,639,883 1,639,883 2,639,883 1,510,032
1,510,032 2,510,032
20 1,041,578 1,846,237 1,846,237 2,846,237 1,684,457
1,684,457 2,684,457
21 1,125,156 2,074,030 2,074,030 3,074,030 1,873,406
1,873,406 2,873,406
22 1,212,914 2,325,303 2,325,303 3,325,303 2,077,803
2,077,803 3,077,803
23 1,305,060 2,602,259 2,602,259 3,602,259 2,298,667
2,298,667 3,298,667
24 1,401,813 2,907,310 2,907,310 3,907,310 2,537,064
2,537,064 3,537,064
25 1,503,404 3,243,076 3,243,076 4,243,076 2,794,004
2,794,004 3,794,004
30 2,092,824 5,486,594 5,486,594 6,486,594 4,382,166
4,382,166 5,382,166
35 2,845,090 9,013,198 9,013,198 10,013,198 6,543,935
6,543,935 7,543,935
40 3,805,193 14,544,327 14,544,327 15,544,327 9,394,245
9,394,245 10,394,245
45 5,030,555 23,410,342 23,410,342 24,410,34211,271,044
11,271,044 12,271,044
1. ASSUMES A $30,000 PREMIUM IS PAID AT THE BEGINNING OF EACH
CONTRACT YEAR.
VALUES WOULD BE DIFFERENT IF PREMIUMS ARE PAID WITH A DIFFERENT
FREQUENCY OR IN
DIFFERENT AMOUNTS.
2. ASSUMES THAT NO CONTRACT LOANS OR WITHDRAWALS HAVE BEEN MADE.
ZERO VALUES
INDICATE LAPSE IN THE ABSENCE OF AN ADDITIONAL PREMIUM PAYMENT.
THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE ARE
ILLUSTRATIVE
ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE
INVESTMENT
RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE MORE OR
LESS THAN
THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING THE
INVESTMENT
ALLOCATIONS BY THE OWNER AND DIFFERENT INVESTMENT RATES OF RETURN
FOR THE
FUND SERIES. THE CONTRACT FUND, SURRENDER VALUE AND DEATH BENEFIT
FOR A
CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF THE ACTUAL
INVESTMENT
RATES OF RETURN AVERAGED OVER A PERIOD OF YEARS, BUT FLUCTUATED
ABOVE OR
BELOW THOSE AVERAGES FOR THE INDIVIDUAL CONTRACT YEARS. NO
REPRESENTATION
CAN BE MADE BY MIDLAND, THE SEPARATE ACCOUNT, OR THE FUND THAT
THIS ASSUMED
INVESTMENT RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR
SUSTAINED OVER
ANY PERIOD OF TIME.
Definitions
Accumulation Unit means the units credited to each investment
division in the
Separate Account.
Age means the age of the Insured Person on his/her birthday which
immediately
precedes the Contract Date.
Beneficiary means the person or persons to whom the contract's
death benefit is
paid when the Last Surviving Insured Person dies.
Business Day means any day we are open and the New York Stock
Exchange is
open for trading. The holidays which we are closed but the New
York Stock
Exchange is open are the day after Thanksgiving, December 23, and
December 31.
These days along with the days the New York Stock Exchange is not
open for
trading will not be counted as Business Days.
Contract Fund means the total amount of monies in our Separate
Account A
attributable to your in force contract. It also includes monies in
our General
Account for your contract.
Cash Surrender Value means the Contract Fund on the date of
surrender, less any
Surrender Charges.
Cash Value is the value of your contract fund.
Contract Anniversary: The same month and day of the Contract Date
in each year
following the Contract Date.
Contract Date means the date from which Contract Anniversaries and
Contract
Years are determined.
Contract Month means a month that starts on a Monthly Anniversary
and ends on
the following Monthly Anniversary.
Contract Year means a year that starts on the Contract Date or on
each
anniversary thereafter.
Death Benefit means the amount payable under your contract when
the Last
Surviving Insured Person dies.
Evidence of Insurability means evidence, satisfactory to us, that
the insured
person is insurable and meets our underwriting standards.
Executive Office means where you write to us to pay premiums or
take other
action, such as transfers between investment divisions, changes in
Face Amount,
or other such action regarding your contract. The address is:
Midland National Life Insurance Company
One Midland Plaza
Sioux Falls, SD 57193
Funds mean the investment companies, more commonly called mutual
funds,
available for investment by Separate Account A on the Contract
Date or as later
changed by us.
In Force means the Insured Persons' lives remain insured under the
terms of the
contract.
Investment Division means a division of Separate Account A which
invests
exclusively in the shares of a specified Portfolio of the Fund.
Minimum Premium Period: This is the period of time beginning on
the Contract
Date and ending five years from the Contract Date.
Modified Endowment Contract is a contract where premiums are paid
more
rapidly than the rate defined by a 7-Pay Test.
Monthly Anniversary means the day of each month that has the same
numerical
date as the Contract Date.
Net Cash Surrender Value means the Cash Surrender Value less any
outstanding
contract loan.
Net Premium means the premium paid less the 6% deduction for the
sales charge,
Federal taxes and state premium taxes, and less any per premium
expense charge.
Record Date means the date the contract is recorded on Our books
as an In Force
contract.
Separate Account means Our Separate Account A which receives and
invests your
net premiums under the contract.
Surrender Charges means a charge made only upon surrender of the
contract.
Performance
Performance information for the investment divisions may appear in
reports and
advertising to current and prospective owners. We base the
performance
information on the investment experience of the investment
division and the
Funds. The information does not indicate or represent future
performance.
Total return quotations reflect changes in Funds' share prices,
the automatic
reinvestment by the Separate Account of all distributions and the
deduction of
the mortality and expense risk charge. The quotations will not
reflect
deductions from premiums (the sales charge, premium tax charge,
and any per
premium expense charge), the monthly deduction from the cash value
(the expense
charge, the cost of insurance charge, and any charges for
additional benefits),
the surrender charge, or other transaction charges. Therefore,
these returns do
not show how actual investment performance will affect contract
benefits.
A cumulative total return reflects performance over a stated
period of time. An
average annual total return reflects the hypothetical annually
compounded return
that would have produced the same cumulative total return if the
performance had
been constant over the entire period. Average annual total
returns tend to
smooth out variations in an investment division's returns and are
not the same
as actual year-by-year results.
Midland may advertise performance figures for the investment
divisions based on
the performance of a portfolio before the Separate Account
commenced operations.
Midland may provide individual hypothetical illustrations of cash
value, cash
surrender value, and death benefits based on the Funds' historical
investment
returns. These illustrations will reflect the deduction of
expenses in the
Funds and the deduction of contract charges, including the
mortality and expense
risk charge, the deductions from premiums, the monthly deduction
from the cash
value and the surrender charge. The illustrations do not indicate
what contract
benefits will be in the future.
Financial Statements
The financial statements of Midland National Life Insurance
Company included in
this prospectus should be distinguished from the financial
statements of the
Midland National Life Separate Account A and should be considered
only as
bearing upon the ability of Midland to meet its obligations under
the Contracts.
They should not be considered as bearing upon the investment
performance of the
assets held in the Separate Account.
Appendix A
Joint Equal Age Calculation
A Joint Equal Age (JEA) calculation changes many possible
combinations of ages,
risk classes, substandard ratings and sexes of two lives into a
single JEA which
is used for setting various charges and the minimum premium.
Midland National
Life's VSL product uses the Joint Equal Age calculation shown
below.
The surrender charges, the expense charge and the minimum premium
are based on
the JEA of the policy at the time of issue. The steps to
calculating the JEA
are as follows:
1. Smoker Adjustment. Adjust the age of any insured who is
classified as a
Smoker as follows:
Male Female Unisex
+5 +3 +4
Note: The individual age cannot exceed 85 nor be less than
20 before
adjustments. The preferred class does not allow for
individual ages which
exceed 80.
2. Female Adjustment. Reduce the age of all females by 5
years. Reduce the
age of all unisex by 1 year.
3. Table Rating Adjustment. Increase the age of any rated
insureds according
to the following table.
Table Rating 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Unins
Age Increase 0 2 4 6 7 8 9 10 11 12 13 14 15 16 17 18 19
30
4. Cap Adjusted Age at 110. If the adjusted age for any
individual exceeds age
110, we will reduce the adjusted age to age 110.
5. Age Difference Adjustment. The ages need to be adjusted for
the difference
in ages. After making the above adjustments, subtract the younger
age from the
older age. Using the table below, find the Age Difference
Adjustment and add
this to the younger Adjusted Age.
Age Age
Difference Adjustment Difference Adjustment
0 0 45-47 13
1-2 1 48-50 14
3-4 2 51-53 15
5-6 3 54-56 16
7-9 4 57-60 17
10-12 5 61-64 18
13-15 6 65-69 19
16-18 7 70-75 20
19-23 8 76-82 21
24-28 9 83-91 22
29-34 10 92-100 23
35-39 11
40-44 12
The Maximum JEA allowed is 85 and the minimum is 20. JEA
which do not
fall into these limits do not qualify for issue.
Example 1: Assume the policy has a 55 year old Male Smoker
who is
standard
and a 63 year old Female Non-Smoker with a table 6 rating.
Male Female
Initial Age 55 63
Step 1 Adjustment +5 -
Step 2 Adjustment - -5
Step 3 Adjustment - +9
Total Step 1, 2 and 3 60 67
Step 4 Adjustment N/A
Step 5 Adjustment +4
Joint Equal Age is 64.
6730VSL.txt
<PAGE>
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securi-
ties Exchange Act of 1934, the undersigned registrant hereby undertakes
to file with the Securities and Exchange Commission such supplementary
and periodic information, documents, and reports as may be prescribed by
any rule or regulation of the Commission heretofore, or hereafter duly
adopted pursuant to authority conferred in that section.
RULE 484 UNDERTAKING
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling per-
sons of the registrant pursuant to the foregoing provisions, or other-
wise, the registrant has been advised that in the opinion of the Securi-
ties and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnifi-
cation by it is against public policy as expressed in the Act and will
be governed by the final jurisdiction of such issue.
UNDRTAKE.txt
<PAGE>
REPRESENTATIONS PURSUANT TO SECTION 26 (e) OF THE INVESTMENT COMPANY ACT
Midland National Life Insurance Company hereby represents that the
fees and charges deducted under the Contract, in the aggregate, are
reasonable in relation to the services rendered, the expenses expected
to be incurred, and the risks assumed by Midland National Life Insurance
Company.
S6FORM.TXT
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
----------------------------------
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
The prospectus consisting of 52 pages.
The undertaking to file reports.
Representations pursuant to Section 26(e) of the Investment
Company Act.
The signatures.
Written consents of the following persons:
(a) Jack L. Briggs 1
(b) Sutherland Asbill & Brennan L L P 5
(c) PricewaterhouseCoopers L L P 5
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as to the exhibits in Form N-8B-2:
(1) Resolution of the Board of Directors of Midland National Life
establishing the Separate Account A. 3
(2) Not applicable.
(3) (a) Principal Underwriting Agreement. 1
(b) Selling Agreement. 1
(c) Commission schedule. 5
(4) Not applicable.
(5) Form of Contract. 5
1 Filed previously in Pre-Effective Amendment No. 1 for Form S-6 File
No. 333-14061 on January 31, 1997.
2 Filed previously in Pre-Effective Amendment No. 2 for Form S-6 File
No. 333-14061 on April 23, 1997.
3 Filed previously in Post Effective Amendment No. 1 for Form S-6 File
No. 333-14061 on April 28, 1998.
4 Filed previously in Post Effective Amendment No. 3 for Form S-6 File
No. 333-14061 on April 29, 1999.
5 To be filed by amendment.
- --------------
<PAGE>
(6) (a) Articles of Incorporation of Midland National Life. 3
(b) By-Laws of Midland National Life. 3
(7) Not applicable.
(8) (a) Participation Agreements for Fidelity Distributors
Corporation/Variable Insurance Products Fund,
and Variable Products Fund II. 2
(b) Amendments to Participation Agreements for Fidelity
Distributors Corporation/Variable Insurance Products Fund,
and Variable Products Fund II. 2
(c) Participation Agreement for Fidelity Distributors
Corporation/Variable Insurance Products Fund III. 3
(d) Participation Agreement for American Century Investment
Services, Inc. 2
(e) Participation Agreement for Lord Abbett Series Funds, Inc. 4
(f) Amendments to Participation Agreement for Lord Abbett
Series Funds, Inc. 5
(g) Participation Agreement for Massachusetts Financial Variable
Insurance Trusts. 4
(9) Not applicable.
(10) Application Form. 5
(11) Memorandum describing Midland National Life's issuance, transfer
and redemption procedures for the Contract. 5
2. See Exhibit 1(5).
---
3. Opinion and Consent of Jack L. Briggs. 1
4. No financial statements are omitted from the Prospectus pursuant to
Instruction 1(b) or (c) or Part I.
5. Not applicable.
6. Not applicable.
7. Consent of Sutherland Asbill & Brennan L L P 5
8. Consent of PricewaterhouseCoopers L L P 5
1 Filed previously in Pre-Effective Amendment No. 1 for Form S-6 File
No. 333-14061 on January 31, 1997.
2 Filed previously in Pre-Effective Amendment No. 2 for Form S-6 File
No. 333-14061 on April 23, 1997.
3 Filed previously in Post Effective Amendment No. 1 for Form S-6 File
No. 333-14061 on April 28, 1998.
4 Filed previously in Post Effective Amendment No. 3 for Form S-6 File
No. 333-14061 on April 29, 1999.
5 To be filed by amendment.
CONVLSL.txt
<PAGE>
SIGNATURES
__________
Pursuant to the requirements of the Securities Act of 1933, the
registrant, Midland National Life Separate Account A, has duly
caused this Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, and its seal to be hereunto
affixed, all in Sioux Falls, South Dakota, on the 15th day of June, 1999.
Midland National Life Separate Account A
(Seal) By: Midland National Life Insurance Company
By:_/s/ Michael M. Masterson__
President
Pursuant to the requirements of the Securities Act of 1933, Midland
National Life Insurance Company has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto
duly authorized, and its seal to be hereunto affixed, all in Sioux
Falls, South Dakota on the 15th day of June, 1999.
(Seal) By: Midland National Life Insurance Company
By:__/s/ Michael M. Masterson ____
President
Signature Title Date
--------- ----- ----
/s/_ Michael M. Masterson Director, Chairman of the June 15, 1999
Michael M. Masterson Board, Chief Executive
Officer and President
_/s/ John J. Craig II Director, Executive Vice June 15, 1999
John J. Craig II President
_/s/ Steven C. Palmitier Director, Senior Vice June 15, 1999
Steven C. Palmitier President and Chief
Marketing Officer
_/s/ Stephen P. Horvat, Jr. Director, Senior Vice June 15, 1999
Stephen P. Horvat, Jr. President - Legal
_/s/ Thomas M. Meyer Vice President and June 15, 1999
Thomas M. Meyer Chief Financial
Officer
_____________________ Director and Vice President June 15, 1999
Robert W. Korba
VLSLSIG.TXT
<PAGE>
