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[LOGO] Fortis-SM-
Fortis Benefits Insurance Company
December 31, 1998
PROFILE OF THE TRIPLE CROWN 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
The Triple Crown 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.
The Triple Crown offers you a diverse selection of investment options. You
may divide your money among the 8 investment portfolios of the Federated
Insurance Series 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 Triple Crown
contract can fluctuate up or down based on your choices and you may
experience a loss. The Triple Crown 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 the guarantee periods
fixed account, 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. In states where guarantee periods fixed accounts are
not offered, you can choose an interest in a fixed account which has a
minimum interest rate guarantee and a higher current rate which can be
changed from time to time.
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 TRIPLE CROWN
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
$5,000 for non-qualified and $2,000 for qualified investments. You can make
additional contributions of at least $500 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:
Federated American Leaders Fund II
Federated Equity Income Fund II
Federated Fund for U.S. Government Securities II
Federated Growth Strategies Fund II
Federated High Income Bond Fund II
Federated International Equity Fund II
Federated Prime Money Fund II
Federated Utility Fund II
In most states you may also choose to invest in a guarantee periods fixed
account. 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
may be adjusted up or down depending on current interest rates. In states
where guarantee periods fixed accounts are not offered, you can choose an
interest in a fixed account which has a minimum interest rate guarantee and
a higher current rate which can be changed from time to time.
5. EXPENSES
We also deduct insurance charges equal to an annual percentage of the
average daily value of your contract allocated to the investment
portfolios, as follows:
- If all of the owners of a contract are less than 61 years old when the
contract is purchased, the rate is 1.10%
- If one or more of the owners of the contract is 61 years old, or
older, the rate is 1.30%
As with other professionally managed investments, there are also investment
charges on money in the investment portfolios, estimated to range from
0.80% to 1.23%.
In a limited number of states, you may also be assessed a state premium tax
charge of up to 3.5%, 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 most states, there is no tax at all.
If you decide to cancel your contract or take money out in excess of the
annual free withdrawal amount, there may be a withdrawal charge of a
percentage of your investment. The annual free withdrawal amount is 10% of
payments made within the last 7 years plus any earnings. The withdrawal
charge percentage declines with each year the payment is in the contract as
follows:
<TABLE>
<CAPTION>
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YEAR 1 2 3 4 5 6 7 8+
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Withdrawal
Charge 7% 7% 7% 5% 4% 3% 2% 0%
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</TABLE>
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 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. The total annual investment
expenses for the portfolios reflected in the table below are net of
voluntary waivers of a portion of the management fees. Please see the Fee
Table in the prospectus for more complete examples.
<TABLE>
<CAPTION>
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All contract holders under age 61
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EXAMPLES
TOTAL TOTAL TOTAL ANNUAL
ANNUAL ANNUAL TOTAL EXPENSES AT END OF
INSURANCE INVESTMENT ANNUAL ----------------------
PORTFOLIO EXPENSES EXPENSES EXPENSES EXPENSES 1 YEAR 10 YEARS
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<S> <C> <C> <C> <C> <C>
American Leaders II 1.20% 0.85% 2.05% $21 $234
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Equity Income Fund II 1.20% 0.85% 2.05% $21 $234
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Fund for U.S Govt Securities II 1.20% 0.80% 2.00% $20 $229
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Growth Strategies Fund II 1.20% 0.85% 2.05% $21 $234
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High Income Bond Fund II 1.20% 0.80% 2.00% $20 $229
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International Equity Fund II 1.20% 1.23% 2.43% $24 $273
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Prime Money Fund II 1.20% 0.80% 2.00% $20 $229
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Utility Fund II 1.20% 0.85% 2.05% $21 $234
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</TABLE>
<TABLE>
<CAPTION>
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One of more contract owners age 61 or older
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EXAMPLES
TOTAL TOTAL TOTAL ANNUAL
ANNUAL ANNUAL TOTAL EXPENSES AT END OF
INSURANCE INVESTMENT ANNUAL ----------------------
PORTFOLIO EXPENSES EXPENSES EXPENSES EXPENSES 1 YEAR 10 YEARS
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<S> <C> <C> <C> <C> <C>
American Leaders II 1.40% 0.85% 2.25% $23 $255
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Equity Income Fund II 1.40% 0.85% 2.25% $23 $255
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Fund for U.S Govt Securities II 1.40% 0.80% 2.20% $22 $250
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Growth Strategies Fund II 1.40% 0.85% 2.25% $23 $255
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High Income Bond Fund II 1.40% 0.80% 2.20% $22 $250
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International Equity Fund II 1.40% 1.23% 2.63% $26 $293
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Prime Money Fund II 1.40% 0.80% 2.20% $22 $250
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Utility Fund II 1.40% 0.85% 2.25% $23 $255
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</TABLE>
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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
guarantee periods fixed account, your contract value may be subject to a
market value adjustment. Withdrawals within 7 years of a purchase payment
may be subject to a withdrawal charge. See Section 5 -- Expenses above
for a more complete discussion. You may also have to pay income tax and a
tax penalty on any money you withdraw.
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. Since these contracts only began to be issued on
December 31, 1998, there is no standardized historical performance for the
portfolios included in this Profile.
9. DEATH BENEFIT
If you die during the accumulation phase, your beneficiary will receive a
death benefit. If all of the owners are less than 61 years old at the sale
of purchase this death benefit will be the greater of three amounts:
1) the value of your contract;
2) the highest anniversary contract value up to your 80th 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.
3) if youdie before your 80th birthday, the accumulation at 4% (3% for
Washington policies) of the payments you put in, less a proportionate
adjustment for any money you took out. If you die after age 80, the
death benefit is slightly different.
If one or more of the owners is 61 years old, or older, as of the date of
purchase, the death benefit will be the same as provided above, except that
the references to age 80 in (2) and (3) are changed to age 75.
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 64273
St. Paul, MN 55164
800-963-9222
