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FORTIS BENEFITS INSURANCE COMPANY
MAY 1, 1998
PROFILE
OF THE FORTIS EMPOWER COMBINATION VARIABLE AND FIXED REFERRED ANNUITY CONTRACTS.
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD
CONSIDER AND KNOW BEFORE PURCHASING THE CONTRACT. THIS ANNUITY IS MORE FULLY
DESCRIBED IN THE PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ THE
PROSPECTUS CAREFULLY.
1. THE ANNUITY CONTRACT
Fortis EmPower Variable Annuity is a contract between you and Fortis
Benefits Insurance Company. It is designed to help you accumulate assets
for your retirement and other long term financial goals on a tax deferred
basis.
Fortis EmPower offers you a diverse selection of money managers and
investment options. You may divide your money among the 18 investment
portfolios of the Fortis Series Fund and a fixed account of Fortis Benefits.
The investment portfolios offer professionally managed investment options
with goals ranging from capital preservation to aggressive growth. Your
choices are found on the next page. These portfolios are designed to
provide you with better potential return than the fixed account. Your
investment, however, is not guaranteed. The value of your Fortis EmPower
contract can fluctuate up or down based on your choices and you may
experience a loss. Fortis EmPower does provide you with a death benefit
that protects your beneficiaries from such loss.
The fixed accounts provide guaranteed interest rates set by Fortis Benefits
for periods from one to ten years. When you invest in these guarantee
periods, and leave the money in the contract until the end of the period,
your investment and the interest rates are guaranteed. If you make any
transfers or withdrawals of your investment before the end of the selected
period, your contract value may increase or decrease depending on interest
rate changes.
Like most annuities, this contract has two phases: the accumulation phase
and the income phase. During the accumulation phase, you invest money in
your contract. Your contract value is based on your investment choices. You
may withdraw money from your contract. However, as with most other tax-
deferred investments, you will pay taxes on earnings and untaxed
contributions when you withdraw them. You may also be subject to an IRS tax
penalty if you make withdrawals before age 59 1/2.
During the income phase, you can elect to receive regular payments from your
contract. Depending on your choice, these payments can be fixed in dollar
amount or can vary with investment performance. The amount of these income
payments also are determined by the amount you are able to accumulate during
the accumulation phase of your contract.
2. ANNUITY INCOME OPTIONS
(THE INCOME PHASE)
You may select one of four annuity income options:
(1) monthly payments during your lifetime;
(2) monthly payments during your lifetime, but with payments continuing
to your beneficiary for a period from 10 to 20 years (as you select)
if you die before the end of the selected period;
(3) monthly payments during your lifetime and the lifetime of another
person you select; and
(4) monthly payments during your lifetime and the lifetime of another
person, with the payments reduced by 1/2 when one of you dies.
At the start of the income phase, you can choose to have the payments come from
the fixed account, the investment portfolios, or both. The dollar amount of
your payments coming from the fixed account will be fixed. The payments from
the investment portfolios you select will go up or down depending on their
performance. Once payments begin, you cannot change your annuity option.
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3. PURCHASING A FORTIS EMPOWER
VARIABLE ANNUITY CONTRACT
You can buy this contract through your registered representative who can
help you complete the proper forms. The minimum initial investment is
$25,000 for non-qualified and $10,000 for qualified investments. You can
make additional contributions of at least $1,000 at any time during the
accumulation period. The minimum investment may be smaller for certain
employer sponsored plans.
4. INVESTMENT OPTIONS
You can invest your money in any of the following investment portfolios
which are described in the fund prospectus:
INTERNATIONAL STOCK
Lazard Freres - International Stock Series
Fortis - Global Growth Series
Morgan Stanley - Global Asset Allocation Series
DOMESTIC STOCK
SMALL CAP Fortis - Aggressive Growth Series
Berger - Small Cap Value Series
MID CAP Fortis - Growth Stock Series
Dreyfus - Mid Cap Stock Series
LARGE CAP Alliance - Large Cap Growth Series
T. Rowe Price - Blue Chip Stock Series
Dreyfus - S & P 500 Index Series
Fortis - Growth & Income Series
Fortis - Value Series
Fortis - Asset Allocation Series
INTERNATIONAL BONDS
Mercury - Global Bond Series
DOMESTIC BONDS
Fortis - High Yield Series
Fortis - Diversified Income Series
Fortis - U.S. Government Securities Series
CASH Fortis - Money Market Series
You may also choose to invest in the guaranteed fixed accounts. You can
choose among guarantee periods ranging from one to ten years, each with its
own interest rate. Once set, the rate will not change during the selected
period. These accounts (except for the one year period) have a feature
known as a market value adjustment (MVA). This means that if you transfer,
withdraw or begin an income phase from one of these accounts before the end
of the selected period, your contract value will be adjusted up or down
depending on current interest rates.
5. EXPENSES
Each year we deduct a $30 contract maintenance fee from your contract value.
This fee is waived if your contract value is at least $100,000. We also
deduct insurance charges equal to 1.25% annually of the average daily value
of your contract in the investment portfolios. As with other professionally
managed investments, there are also investment charges on money in the
investment portfolios, estimated to range from 0.38% to 1.16%.
There is no withdrawal charge if you decide to withdraw your money or cancel
the contract.
In a limited number of states, you may also be assessed a state premium tax
charge of up to 4%, depending upon the state. In these states, this tax will
be deducted when you cancel the contract, begin the income phase, or if a
death benefit is paid. In many states, there is no tax at all.
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The following chart is designed to help you understand the expenses in your
contract. The column labeled "Total Annual Expenses" shows the total of the
$30 contract maintenance fee (included as 0.05%), the 1.25% insurance charge
and the investment management expenses for each portfolio. The right side
of the chart shows you two examples of the expenses, in dollars, you would
pay under the contract. The examples assume that you invest $1,000, earn 5%
annually and withdraw your money: (1) at the end of one year, and (2) at the
end of ten years. The premium tax is assumed to be 0% for both examples.
Please see the Fee Table in the prospectus for more complete examples.
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INTERNATIONAL STOCK
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Lazard Freres - International Stock 1.30% 1.08% 2.38% $24 $268
Fortis - Global Growth 1.30% 0.79% 2.09% $21 $239
Morgan Stanley - Global Asset Allocation 1.30% 1.16% 2.46% $25 $276
DOMESTIC STOCK
SMALL CAP
Fortis - Aggressive Growth 1.30% 0.76% 2.06% $21 $236
Berger - Small Cap Value 1.30% 1.10% 2.40% $24 $270
MID CAP
Fortis - Growth Stock 1.30% 0.66% 1.96% $20 $225
Dreyfus - Mid Cap Stock 1.30% 1.10% 2.40% $24 $270
LARGE CAP
Alliance - Large Cap Growth 1.30% 1.10% 2.40% $24 $270
T. Rowe Price - Blue Chip Stock 1.30% 1.02% 2.32% $23 $262
Dreyfus - S&P 500 Index 1.30% 0.51% 1.81% $18 $209
Fortis - Growth & Income 1.30% 0.70% 2.00% $20 $229
Fortis - Value 1.30% 0.83% 2.13% $21 $243
Fortis - Asset Allocation 1.30% 0.53% 1.83% $18 $211
INTERNATIONAL BONDS
Mercury - Global Bond 1.30% 1.10% 2.40% $24 $270
DOMESTIC BONDS
Fortis - High Yield 1.30% 0.62% 1.92% $19 $221
Fortis - Diversified Income 1.30% 0.55% 1.85% $18 $212
Fortis - U.S. Government Securities 1.30% 0.54% 1.84% $18 $212
CASH
Fortis - Money Market 1.30% 0.38% 1.68% $17 $195
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6. TAXES
Your earnings are not taxed until you withdraw them from the contract. If
you take money out during the accumulation phase, earnings come out first
and are taxable ordinary income. If you make a withdrawal prior to age
59 1/2, you may be charged a 10% federal tax penalty on that amount.
Payments during the income phase are considered partly a return of your
original investment and partly earnings. You will only be taxed on the
earnings portion. However, if your contract is funded with pretax or tax
deductible dollars (qualified plan contributions), then the entire payment
will be taxable.
7. ACCESS TO YOUR MONEY
You can make withdrawals at any time during the accumulation phase. The
minimum amount you can withdraw is $1,000. If you withdraw from the fixed
account, your contract value may be subject to a market value adjustment.
You may also have to pay income tax and a tax penalty on any money you
withdraw.
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SYSTEMATIC WITHDRAWALS: You can have money automatically sent to you each
month during the accumulation phase of your contract. Systematic
withdrawals are available for amounts of $100 or more. Of course,
withdrawals may be taxable and subject to an IRS tax penalty.
8. PERFORMANCE
The value of your contract will go up or down depending on the investment
portfolios you choose. The following chart shows the total return for each
investment portfolio for the time periods shown. Insurance charges,
investment management charges and all other expenses of the investment
portfolio have been deducted from these numbers. These numbers do not
reflect any withdrawal charges which, if applied, would reduce the
performance. Past performance is not a guarantee of future results.
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<CAPTION>
PORTFOLIO 1997 1996 1995 1994 1993 1992 1991 1990 1989
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INTERNATIONAL STOCK
Lazard Freres - International Stock 11.65% 11.63% 13.03% - - - - - -
Fortis - Global Growth 5.25% 17.74% 28.32% -3.88% 15.96% - - - -
Morgan Stanley - Global Asset Allocation 12.14% 11.19% 15.72% - - - - - -
DOMESTIC STOCK - SMALL CAP
Fortis - Aggressive Growth -0.52% 7.66% 26.11% - - - - - -
Berger - Small Cap Value* - - - - - - - - -
DOMESTIC STOCK - MID CAP
Fortis - Growth Stock 9.85% 16.09% 24.92% -3.61% 7.47% 1.11% 52.59% -4.03% 33.68%
Dreyfus - Mid Cap Stock* - - - - - - - - -
DOMESTIC STOCK - LARGE CAP
Alliance - Large Cap Growth* - - - - - - - - -
T. Rowe Price - Blue Chip Stock 23.72% - - - - - - - -
Dreyfus - S&P 500 Index 28.42% - - - - - - - -
Fortis - Growth & Income 24.38% 21.83% 27.45% - - - - - -
Fortis - Value 22.13% - - - - - - - -
Fortis - Asset Allocation 17.23% 12.43% 19.70% -1.35% 8.26% 5.63% 26.39% 0.56% 21.79%
INTERNATIONAL BONDS
Mercury - Global Bond -0.70% 1.69% 17.51% - - - - - -
DOMESTIC BONDS
Fortis - High Yield 8.10% 9.13% 11.46% - - - - - -
Fortis - Diversified Income 8.11% 3.66% 15.43% -6.45% 11.28% 5.89% 13.29% 7.16% 11.03%
Fortis - U.S. Government Securities 6.91% 1.69% 16.82% -7.59% 8.00% 5.05% 13.04% 6.19% -
CASH
Fortis - Money Market 3.98% 3.84% 4.33% 2.57% 1.44% 2.02% 4.57% 6.47% 8.04%
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*As these portfolios are new, no performance data is available.
**Fortis EmPower was first offered for sale on May 1, 1998.
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9. DEATH BENEFIT
If you die during the accumulation phase, your beneficiary will receive a
death benefit. This death benefit will be the greater of three amounts:
1) the value of your contract;
2) the money you put in less a proportionate reduction related to any
withdrawals; and
3) at the time of death, the highest five year anniversary contract
value up to your 75th birthday; plus (a) any money you put in since
that anniversary, less (b) a proportionate reduction related to any
money you took out since that anniversary.
10. OTHER INFORMATION
FREE LOOK PERIOD: You may cancel your contract within 10 days of receiving
it (or whatever period is required by your state). We will pay you the
value of your contract without imposing a withdrawal charge. This may be
more or less than the amount you invested. If required by law, we will
return your original payment.
11. INQUIRIES
If you need more information, please contact us at:
Fortis Benefits Insurance Company
P.O. Box 64272
St. Paul, MN 55164
800-800-2000, Ext. 3057
