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PACIFIC SELECT ESTATE PRESERVER
Last Survivor Flexible Premium Variable Universal Life Insurance Policy
Issued by Pacific Life Insurance Company
Supplement dated December 17, 1999 to
Prospectus dated May 1, 1999
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This supplement changes the prospectus to reflect the following effective
January 1, 2000:
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Two new variable investment The two new investment options are added to the list on page 1 of the
options are available prospectus. References to the 18 variable investment options throughout the
prospectus are changed to refer to 20 variable investment options.
. Diversified Research
. International Large-Cap
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The names of two variable The Growth variable investment option is now called the Small-Cap Equity
investment options are changed variable investment option.
The International variable investment option is now called the International
Value variable investment option.
These new names reflect the change in name of the underlying portfolios of
Pacific Select Fund. Throughout the prospectus or supplement thereof, any
reference to the Growth or International portfolio, variable account or
variable investment option is changed to refer to the Small-Cap Equity or
International Value portfolio, variable account or variable investment option,
respectively.
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An overview of Pacific Select Estate The following is added to the chart under Fees and expenses paid by the Pacific
Preserver is amended Select Fund:
-------------------------------------------------------------------------------
Portfolio Advisory Fee Other Expenses Total Expenses+
-------------------------------------------------------------------------------
Diversified Research* 0.90% 0.05% 0.95%
International Large-Cap* 1.05% 0.15% 1.20%
* Expenses are estimated. There were no actual advisory fees or other expenses
for these portfolios in 1998 because the portfolios started on January 3,
2000. See page 11 of the prospectus for information about expense caps
through December 31, 2000 for these portfolios.
+ Effective January 1, 2000, the fund will implement a brokerage enhancement
12b-1 plan, under which brokerage transactions may be placed with broker-
dealers in return for credits that may be used to help promote distribution
of fund shares. There are no fees or charges to any portfolio under this
plan, although the fund's distributor may defray expenses which it would
otherwise incur for distribution. If you assume the credits are a direct fund
expense, the expense would have no effect on Other expenses shown above.
The expenses for the Equity Index Portfolio in the chart under Fees and
expenses paid by the Pacific Select Fund are replaced with the following:
-------------------------------------------------------------------------------
Portfolio Advisory Fee Other Expenses Total Expenses+
-------------------------------------------------------------------------------
Equity Index 0.25% 0.05% 0.30%
1
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The following portfolios have new Alliance Capital Management L.P. is the portfolio manager of the Emerging
portfolio managers Markets portfolio.
Mercury Asset Management US is the portfolio manager of the Equity Index and
Small-Cap Index portfolios.
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Your Investment Options is amended The chart on page 30 of the prospectus is replaced with the chart on page 3 of
this supplement.
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Illustrations is amended The seventh and eighth bullet points under Assumptions are replaced with the
following:
. Illustrations 1 through 8 assume total annual advisory fees and expenses of
.80% of total average daily net assets of the fund. This reflects average
advisory fees of .72% and average expenses of .08% based upon fees and
expenses of portfolios available as investment options under the policy.
. Illustrations 9 and 10 assume total annual advisory fees and expenses of .68%
of total average daily net assets of the fund. This reflects weighted average
advisory fees of .61% and weighted average expenses of .07% based upon fees
and expenses of portfolios available as investment options under the policy.
The second bullet point under Things to keep in mind is replaced with the
following:
. After we've deducted the charges and fund expenses described in the
assumptions above, the illustrated gross annual investment rates of return of
0%, 6% and 12% correspond to approximate net annual rates of return of -.80%,
5.15%, and 11.10% for illustrations 1 through 8 and -.68%, 5.28%, and 11.24%
for illustrations 9 and 10.
Illustrations 1 through 10 are replaced with pages 4 through 13 of this
supplement.
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YOUR INVESTMENT OPTIONS
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PORTFOLIO THE PORTFOLIO'S THE PORTFOLIO'S PORTFOLIO
INVESTMENT GOAL MAIN INVESTMENTS MANAGER
- ------------------------------------------------------------------------------------------------------------------------
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Aggressive Equity Capital appreciation. Equity securities of small Alliance Capital
emerging-growth companies and Management L.P.
medium-sized companies.
- ------------------------------------------------------------------------------------------------------------------------
Emerging Markets Long-term growth of Equity securities of companies Alliance Capital
capital. that are located in countries Management L.P.
generally regarded as "emerging
market" countries.
- ------------------------------------------------------------------------------------------------------------------------
Diversified Research Long-term growth of Equity securities of U.S. Capital Guardian
capital. companies and securities whose Trust Company
principal markets are in the
U.S.
- ------------------------------------------------------------------------------------------------------------------------
Small-Cap Equity Growth of capital. Equity securities of smaller Capital Guardian
(formerly called and medium-sized companies. Trust Company
Growth)
- ------------------------------------------------------------------------------------------------------------------------
International Large-Cap Long-term growth of Equity securities of non-U.S. Capital Guardian
capital. companies and securities whose Trust Company
principal markets are outside
of the U.S.
- ------------------------------------------------------------------------------------------------------------------------
Bond and Income Total return and income A wide range of fixed income Goldman Sachs Asset
consistent with prudent securities with varying terms Management
investment management. to maturity, with an emphasis
on long-term bonds.
- ------------------------------------------------------------------------------------------------------------------------
Equity Capital appreciation. Equity securities of large U.S. Goldman Sachs Asset
Current income is of growth-oriented companies. Management
secondary importance.
- ------------------------------------------------------------------------------------------------------------------------
Multi-Strategy High total return. A mix of equity and fixed J.P. Morgan
income securities. Investment Management
Inc.
- ------------------------------------------------------------------------------------------------------------------------
Equity Income Long-term growth of capital Equity securities of large and J.P. Morgan
and income. medium-sized dividend-paying Investment Management
U.S. companies. Inc.
- ------------------------------------------------------------------------------------------------------------------------
Growth LT Long-term growth of capital Equity securities of a large Janus Capital
consistent with the number of companies of any Corporation
preservation of capital. size.
- ------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value Capital appreciation. Equity securities of medium- Lazard Asset
sized U.S. companies believed Management
to be undervalued.
- ------------------------------------------------------------------------------------------------------------------------
Equity Index Investment results that Equity securities of companies Mercury Asset
correspond to the total that are included in the Management US
return of common stocks Standard & Poor's 500 Composite
publicly traded in the U.S. Stock Price Index.
- ------------------------------------------------------------------------------------------------------------------------
Small-Cap Index Investment results that Equity securities of companies Mercury Asset
correspond to the total that are included in the Management US
return of an index of small Russell 2000 Small Stock Index.
capitalization companies.
- ------------------------------------------------------------------------------------------------------------------------
REIT Current income and long- Equity securities of real Morgan Stanley Asset
term capital appreciation. estate investment trusts. Management
- ------------------------------------------------------------------------------------------------------------------------
International Value Long-term capital Equity securities of companies Morgan Stanley Asset
(formerly called appreciation primarily of any size located in Management
International) through investment in developed countries outside of
equity securities of the U.S.
corporations domiciled in
countries other than the
United States.
- ------------------------------------------------------------------------------------------------------------------------
Government Securities Maximize total return Fixed income securities that Pacific Investment
consistent with prudent are issued or guaranteed by the Management Company
investment management. U.S. government, its
agencies or government-
sponsored enterprises.
- ------------------------------------------------------------------------------------------------------------------------
Managed Bond Maximize total return Medium and high-quality fixed Pacific Investment
consistent with prudent income securities with varying Management Company
investment management. terms to maturity.
- ------------------------------------------------------------------------------------------------------------------------
Money Market Current income consistent Highest quality money market Pacific Life
with preservation of instruments believed to have
capital. limited credit risk.
- ------------------------------------------------------------------------------------------------------------------------
High Yield Bond High level of current Fixed income securities with Pacific Life
income. lower and medium-quality credit
ratings and intermediate to
long terms to maturity.
- ------------------------------------------------------------------------------------------------------------------------
Large-Cap Value Long-term growth of Equity securities of large U.S. Salomon Brothers
capital. Current income is companies. Asset Management Inc
of secondary importance.
- ------------------------------------------------------------------------------------------------------------------------
3
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ILLUSTRATIONS
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Illustration 1
Death benefit Option A at current cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
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Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if --------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans or 3 $106,360 $1,500,000 $1,500,000 $1,500,000
partial withdrawals have been made. 4 $145,416 $1,500,000 $1,500,000 $1,500,000
5 $186,425 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values and 6 $229,485 $1,500,000 $1,500,000 $1,500,000
cash surrender values will differ if 7 $274,697 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 8 $322,170 $1,500,000 $1,500,000 $1,500,000
frequencies. 9 $372,017 $1,500,000 $1,500,000 $1,500,000
10 $424,356 $1,500,000 $1,500,000 $1,500,000
The hypothetical investment rates shown 15 $728,023 $1,500,000 $1,500,000 $1,500,000
above and elsewhere in this prospectus 20 $1,115,587 $1,500,000 $1,500,000 $2,004,601
are illustrative only and should not be 25 $1,610,229 $1,500,000 $1,500,000 $3,526,138
interpreted as a representation of past or 30 $2,241,530 $1,500,000 $1,978,416 $6,134,810
future investment results. Actual rates of 35 $3,047,247 $1,500,000 $2,687,510 $10,451,095
return may be more or less than those --------------------------------------------------------------------------------
shown and will depend on a number of End of year End of year
factors, including the investment ACCUMULATED VALUE NET CASH SURRENDER VALUE
allocations made to variable accounts by End of assuming hypothetical gross assuming hypothetical gross
the owner and the experience of the policy annual investment return of annual investment return of
accounts. No representation can be made by year 0% 6% 12% 0% 6% 12%
us, the separate account or the fund that --------------------------------------------------------------------------------
these hypothetical rates of return can be 1 $26,536 $28,196 $29,857 $14,184 $15,843 $17,505
achieved for any one year or sustained 2 $52,575 $57,544 $62,713 $41,595 $46,564 $51,733
over any period of time. 3 $78,091 $88,069 $98,860 $68,484 $78,461 $89,252
4 $103,056 $119,795 $138,622 $94,821 $111,560 $130,387
This is an illustration only. An 5 $127,439 $152,748 $182,362 $120,577 $145,886 $175,500
illustration is not intended to predict 6 $151,323 $187,072 $230,605 $145,833 $181,582 $225,115
actual performance. Interest rates, 7 $174,911 $223,036 $284,043 $170,793 $218,919 $279,926
dividends, and values set forth in the 8 $198,237 $260,754 $343,277 $195,492 $258,009 $340,532
illustration are not guaranteed. 9 $221,304 $300,313 $408,941 $219,932 $298,941 $407,569
10 $244,117 $341,807 $481,738 $244,117 $341,807 $481,738
15 $368,109 $597,868 $1,001,925 $368,109 $597,868 $1,001,925
20 $482,857 $921,815 $1,873,459 $482,857 $921,815 $1,873,459
25 $582,430 $1,342,800 $3,358,226 $582,430 $1,342,800 $3,358,226
30 $637,039 $1,884,205 $5,842,677 $637,039 $1,884,205 $5,842,677
35 $580,912 $2,559,533 $9,953,424 $580,912 $2,559,533 $9,953,424
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Illustration 2
Death benefit Option A at guaranteed cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
--------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if --------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans 3 $106,360 $1,500,000 $1,500,000 $1,500,000
or partial withdrawals have been made. 4 $145,416 $1,500,000 $1,500,000 $1,500,000
5 $186,425 $1,500,000 $1,500,000 $1,500,000
*Additional payment will be required to 6 $229,485 $1,500,000 $1,500,000 $1,500,000
prevent policy termination. 7 $274,697 $1,500,000 $1,500,000 $1,500,000
8 $322,170 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values and 9 $372,017 $1,500,000 $1,500,000 $1,500,000
cash surrender values will differ if 10 $424,356 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 15 $728,023 $1,500,000 $1,500,000 $1,500,000
frequencies. 20 $1,115,587 $1,500,000 $1,500,000 $1,912,580
25 $1,610,229 $1,500,000 $1,500,000 $3,349,521
The hypothetical investment rates shown 30 $2,241,530 $0* $1,569,156 $5,754,522
above and elsewhere in this prospectus are 35 $3,047,247 $0* $2,115,323 $9,568,276
illustrative only and should not be --------------------------------------------------------------------------------
interpreted as a representation of past or End of year End of year
future investment results. Actual rates of ACCUMULATED VALUE NET CASH SURRENDER VALUE
return may be more or less than those shown End of assuming hypothetical gross assuming hypothetical gross
and will depend on a number of factors, policy annual investment return of annual investment return of
including the investment allocations made year 0% 6% 12% 0% 6% 12%
to variable accounts by the owner and --------------------------------------------------------------------------------
the experience of the accounts. No 1 $26,520 $28,179 $29,840 $14,167 $15,827 $17,487
representation can be made by us, the 2 $52,507 $57,473 $62,639 $41,527 $46,493 $51,659
separate account or the fund that these 3 $77,929 $87,897 $98,677 $68,321 $78,289 $89,070
hypothetical rates of return can be 4 $102,753 $119,469 $138,272 $94,518 $111,234 $130,037
achieved for any one year or sustained 5 $126,943 $152,206 $181,772 $120,080 $145,344 $174,909
over any period of time. 6 $150,572 $186,242 $229,687 $145,082 $180,752 $224,197
7 $173,458 $221,456 $282,325 $169,341 $217,338 $278,207
This is an illustration only. An 8 $195,518 $257,829 $340,140 $192,773 $255,084 $337,395
illustration is not intended to predict 9 $216,638 $295,317 $403,631 $215,266 $293,945 $402,259
actual performance. Interest rates, 10 $236,694 $333,872 $473,365 $236,694 $333,872 $473,365
dividends, and values set forth in the 15 $330,226 $557,671 $962,514 $330,226 $557,671 $962,514
illustration are not guaranteed. 20 $369,377 $808,615 $1,787,457 $369,377 $808,615 $1,787,457
25 $289,020 $1,098,928 $3,190,021 $289,020 $1,098,928 $3,190,021
30 $0* $1,494,435 $5,480,498 $0* $1,494,435 $5,480,498
35 $0* $2,014,594 $9,112,644 $0* $2,014,594 $9,112,644
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ILLUSTRATIONS
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Illustration 3
Death benefit Option B at current cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:B
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$120,584
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Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if --------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $126,613 $1,606,274 $1,612,718 $1,619,164
2 $259,557 $1,711,167 $1,730,668 $1,750,935
This illustration assumes no policy loans 3 $399,148 $1,814,653 $1,854,057 $1,896,627
or partial withdrawals have been made. 4 $545,719 $1,916,702 $1,983,103 $2,057,691
5 $699,618 $2,017,279 $2,118,029 $2,235,731
The death benefits, accumulated values and 6 $861,213 $2,116,458 $2,259,178 $2,432,635
cash surrender values will differ if 7 $1,030,886 $2,214,482 $2,407,085 $2,650,677
premiums are paid in different amounts or 8 $1,209,044 $2,311,397 $2,562,113 $2,892,171
frequencies. 9 $1,396,109 $2,407,215 $2,724,604 $3,159,641
10 $1,592,528 $2,501,946 $2,894,919 $3,455,885
The hypothetical investment rates shown 15 $2,732,132 $2,981,867 $3,903,869 $5,520,362
above and elsewhere in this prospectus 20 $4,186,587 $3,431,227 $5,176,337 $8,957,698
are illustrative only and should not be 25 $6,042,881 $3,853,446 $6,810,955 $14,789,652
interpreted as a representation of past or 30 $8,412,034 $4,183,476 $8,819,143 $24,522,986
future investment results. Actual rates of 35 $11,435,740 $4,311,655 $11,178,200 $41,122,236
return may be more or less than those --------------------------------------------------------------------------------
shown and will depend on a number of End of year End of year
factors, including the investment ACCUMULATED VALUE NET CASH SURRENDER VALUE
allocations made to variable accounts by End of assuming hypothetical gross assuming hypothetical gross
the owner and the experience of the policy annual investment return of annual investment return of
accounts. No representation can be made by year 0% 6% 12% 0% 6% 12%
us, the separate account or the fund that --------------------------------------------------------------------------------
these hypothetical rates of return can be 1 $106,274 $112,718 $119,164 $93,922 $100,366 $106,812
achieved for any one year or sustained 2 $211,167 $230,667 $250,935 $200,187 $219,687 $239,955
over any period of time. 3 $314,653 $354,057 $396,627 $305,045 $344,449 $387,019
4 $416,702 $483,103 $557,691 $408,467 $474,868 $549,456
This is an illustration only. An 5 $517,279 $618,029 $735,731 $510,416 $611,167 $728,868
illustration is not intended to predict 6 $616,458 $759,178 $932,634 $610,968 $753,688 $927,144
actual performance. Interest rates, 7 $714,482 $907,085 $1,150,677 $710,365 $902,968 $1,146,560
dividends, and values set forth in the 8 $811,397 $1,062,113 $1,392,171 $808,652 $1,059,368 $1,389,426
illustration are not guaranteed. 9 $907,215 $1,224,604 $1,659,641 $905,842 $1,223,231 $1,658,268
10 $1,001,946 $1,394,919 $1,955,885 $1,001,946 $1,394,919 $1,955,885
15 $1,481,867 $2,403,869 $4,020,362 $1,481,867 $2,403,869 $4,020,362
20 $1,931,227 $3,676,337 $7,457,698 $1,931,227 $3,676,337 $7,457,698
25 $2,353,446 $5,310,955 $13,289,652 $2,353,446 $5,310,955 $13,289,652
30 $2,683,476 $7,319,143 $23,022,986 $2,683,476 $7,319,143 $23,022,986
35 $2,811,655 $9,678,200 $39,164,036 $2,811,655 $9,678,200 $39,164,036
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Illustration 4
Death benefit Option B at guaranteed cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:B
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$120,584
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Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if --------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $126,613 $1,606,258 $1,612,701 $1,619,147
2 $259,557 $1,711,097 $1,730,594 $1,750,858
This illustration assumes no policy loans 3 $399,148 $1,814,483 $1,853,876 $1,896,435
or partial withdrawals have been made. 4 $545,719 $1,916,381 $1,982,756 $2,057,317
5 $699,618 $2,016,746 $2,117,443 $2,235,087
The death benefits, accumulated values and 6 $861,213 $2,115,643 $2,258,267 $2,431,616
cash surrender values will differ if 7 $1,030,886 $2,212,874 $2,405,302 $2,648,696
premiums are paid in different amounts or 8 $1,209,044 $2,308,332 $2,558,722 $2,888,409
frequencies. 9 $1,396,109 $2,401,872 $2,718,666 $3,153,019
10 $1,592,528 $2,493,328 $2,885,255 $3,445,010
The hypothetical investment rates shown 15 $2,732,132 $2,935,028 $3,847,905 $5,452,876
above and elsewhere in this prospectus 20 $4,186,587 $3,284,619 $4,989,376 $8,713,862
are illustrative only and should not be 25 $6,042,881 $3,478,713 $6,305,041 $14,078,058
interpreted as a representation of past or 30 $8,412,034 $3,367,075 $7,651,345 $22,743,088
future investment results. Actual rates of 35 $11,435,740 $2,722,700 $8,764,518 $36,907,976
return may be more or less than those shown --------------------------------------------------------------------------------
and will depend on a number of factors, End of year End of year
including the investment allocations made ACCUMULATED VALUE NET CASH SURRENDER VALUE assuming
to variable accounts by the owner and End of assuming hypothetical gross hypothetical gross
the experience of the accounts. No policy annual investment return of annual investment return of
representation can be made by us, the year 0% 6% 12% 0% 6% 12%
separate account or the fund that these --------------------------------------------------------------------------------
hypothetical rates of return can be 1 $106,258 $112,701 $119,146 $93,905 $100,349 $106,794
achieved for any one year or sustained 2 $211,097 $230,593 $250,858 $200,117 $219,613 $239,878
over any period of time. 3 $314,483 $353,876 $396,435 $304,875 $344,269 $386,828
4 $416,381 $482,756 $557,317 $408,146 $474,521 $549,082
This is an illustration only. An 5 $516,746 $617,443 $735,087 $509,884 $610,581 $728,225
illustration is not intended to predict 6 $615,643 $758,267 $931,616 $610,153 $752,777 $926,126
actual performance. Interest rates, 7 $712,873 $905,302 $1,148,696 $708,756 $901,184 $1,144,578
dividends, and values set forth in the 8 $808,332 $1,058,722 $1,388,409 $805,587 $1,055,977 $1,385,664
illustration are not guaranteed. 9 $901,872 $1,218,665 $1,653,019 $900,499 $1,217,293 $1,651,646
10 $993,328 $1,385,255 $1,945,010 $993,328 $1,385,255 $1,945,010
15 $1,435,028 $2,347,905 $3,952,876 $1,435,028 $2,347,905 $3,952,876
20 $1,784,619 $3,489,376 $7,213,862 $1,784,619 $3,489,376 $7,213,862
25 $1,978,712 $4,805,041 $12,578,058 $1,978,712 $4,805,041 $12,578,058
30 $1,867,075 $6,151,345 $21,243,088 $1,867,075 $6,151,345 $21,243,088
35 $1,222,700 $7,264,518 $35,150,456 $1,222,700 $7,264,518 $35,150,456
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ILLUSTRATIONS
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Illustration 5
Death benefit Option C at current cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:C
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,532,132 $1,532,132 $1,532,132
2 $69,163 $1,564,263 $1,564,263 $1,564,263
This illustration assumes no policy loans 3 $106,360 $1,596,395 $1,596,395 $1,596,395
or partial withdrawals have been made. 4 $145,416 $1,628,527 $1,628,527 $1,628,527
5 $186,425 $1,660,658 $1,660,658 $1,660,658
The death benefits, accumulated values and 6 $229,485 $1,692,790 $1,692,790 $1,692,790
cash surrender values will differ if 7 $274,697 $1,724,922 $1,724,922 $1,724,922
premiums are paid in different amounts or 8 $322,170 $1,757,054 $1,757,054 $1,757,054
frequencies. 9 $372,017 $1,789,185 $1,789,185 $1,789,185
10 $424,356 $1,821,317 $1,821,317 $1,821,317
The hypothetical investment rates shown 15 $728,023 $1,981,975 $1,981,975 $1,981,975
above and elsewhere in this prospectus are 20 $1,115,587 $2,142,634 $2,142,634 $2,142,634
illustrative only and should not be 25 $1,610,229 $2,303,292 $2,303,292 $3,493,581
interpreted as a representation of past or 30 $2,241,530 $2,463,951 $2,463,951 $6,080,164
future investment results. Actual rate's of 35 $3,047,247 $2,624,609 $2,624,609 $10,359,918
return may be more or less than those shown ------------------------------------------------------------------------------
and will depend on a number of factors, End of year End of year
including the investment allocations made to ACCUMULATED VALUE NET CASH SURRENDER VALUE
variable accounts by the owner and the End of assuming hypothetical gross assuming hypothetical gross
experience of the accounts. No policy annual investment return of annual investment return of
representation can be made by us, the year 0% 6% 12% 0% 6% 12%
separate account or the fund that these ------------------------------------------------------------------------------
hypothetical rates of return can be achieved 1 $26,534 $28,194 $29,855 $14,182 $15,841 $17,503
for any one year or sustained over any 2 $52,560 $57,529 $62,697 $41,580 $46,549 $51,717
period of time. 3 $78,040 $88,015 $98,803 $68,432 $78,407 $89,195
4 $102,931 $119,662 $138,480 $94,696 $111,427 $130,245
This is an illustration only. An 5 $127,185 $152,473 $182,066 $120,322 $145,611 $175,203
illustration is not intended to predict 6 $150,860 $186,566 $230,052 $145,370 $181,076 $224,562
actual performance. Interest rates, 7 $174,197 $222,242 $283,159 $170,080 $218,124 $279,041
dividends, and values set forth in the 8 $197,233 $259,613 $341,980 $194,488 $256,868 $339,235
illustration are not guaranteed. 9 $219,969 $298,763 $407,139 $218,596 $297,391 $405,766
10 $242,407 $339,781 $479,327 $242,407 $339,781 $479,327
15 $363,847 $592,258 $994,404 $363,847 $592,258 $994,404
20 $473,176 $908,279 $1,855,346 $473,176 $908,279 $1,855,346
25 $553,106 $1,302,624 $3,327,220 $553,106 $1,302,624 $3,327,220
30 $535,414 $1,768,327 $5,790,633 $535,414 $1,768,327 $5,790,633
35 $223,386 $2,325,081 $9,866,589 $223,386 $2,325,081 $9,866,589
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8
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<S> <C>
------------------------------------------------------------------------------
Illustration 6
Death benefit Option C at guaranteed cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:C
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,532,132 $1,532,132 $1,532,132
2 $69,163 $1,564,263 $1,564,263 $1,564,263
This illustration assumes no policy loans 3 $106,360 $1,596,395 $1,596,395 $1,596,395
or partial withdrawals have been made. 4 $145,416 $1,628,527 $1,628,527 $1,628,527
5 $186,425 $1,660,658 $1,660,658 $1,660,658
*Additional payment will be required to 6 $229,485 $1,692,790 $1,692,790 $1,692,790
prevent policy termination. 7 $274,697 $1,724,922 $1,724,922 $1,724,922
8 $322,170 $1,757,054 $1,757,054 $1,757,054
The death benefits, accumulated values and 9 $372,017 $1,789,185 $1,789,185 $1,789,185
cash surrender values will differ if 10 $424,356 $1,821,317 $1,821,317 $1,821,317
premiums are paid in different amounts or 15 $728,023 $1,981,975 $1,981,975 $1,981,975
frequencies. 20 $1,115,587 $2,142,634 $2,142,634 $2,142,634
25 $1,610,229 $2,303,292 $2,303,292 $3,163,257
The hypothetical investment rates shown 30 $2,241,530 $0* $2,463,951 $5,446,419
above and elsewhere in this prospectus 35 $3,047,247 $0* $0* $9,067,306
are illustrative only and should not be ------------------------------------------------------------------------------
interpreted as a representation of past or End of year End of year
future investment results. Actual rates of ACCUMULATED VALUE NET CASH SURRENDER VALUE
return may be more or less than those shown End of assuming hypothetical gross assuming hypothetical gross
and will depend on a number of factors, policy annual investment return of annual investment return of
including the investment allocations made to year 0% 6% 12% 0% 6% 12%
variable accounts by the owner and the ------------------------------------------------------------------------------
experience of the accounts. No 1 $26,517 $28,177 $29,837 $14,165 $15,824 $17,485
representation can be made by us, the 2 $52,489 $57,454 $62,619 $41,509 $46,474 $51,639
separate account or the fund that these 3 $77,868 $87,833 $98,611 $68,261 $78,225 $89,003
hypothetical rates of return can be achieved 4 $102,606 $119,312 $138,105 $94,371 $111,077 $129,870
for any one year or sustained over any 5 $126,643 $151,883 $181,422 $119,781 $145,020 $174,560
period of time. 6 $150,028 $185,647 $229,037 $144,538 $180,157 $223,547
7 $172,543 $220,443 $281,203 $168,426 $216,325 $277,086
This is an illustration only. An 8 $194,060 $256,196 $338,309 $191,315 $253,451 $335,564
illustration is not intended to predict 9 $214,403 $292,786 $400,758 $213,031 $291,414 $399,386
actual performance. Interest rates, 10 $233,371 $330,069 $468,997 $233,371 $330,069 $468,997
dividends, and values set forth in the 15 $312,946 $536,857 $937,119 $312,946 $536,857 $937,119
illustration are not guaranteed. 20 $303,907 $725,919 $1,690,773 $303,907 $725,919 $1,690,773
25 $63,508 $800,156 $3,012,626 $63,508 $800,156 $3,012,626
30 $0* $450,135 $5,187,066 $0* $450,135 $5,187,066
35 $0* $0* $8,635,530 $0* $0* $8,635,530
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9
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<PAGE>
<TABLE>
<CAPTION>
ILLUSTRATIONS
<S> <C>
------------------------------------------------------------------------------
Illustration 7
Death benefit Option D at current cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:D
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,503,000 $1,503,000 $1,503,000
This illustration assumes no policy loans 3 $106,360 $1,506,000 $1,506,000 $1,506,000
or partial withdrawals have been made. 4 $145,416 $1,510,500 $1,510,500 $1,510,500
5 $186,425 $1,516,500 $1,516,500 $1,516,500
The death benefits, accumulated values and 6 $229,485 $1,522,500 $1,522,500 $1,522,500
cash surrender values will differ if 7 $274,697 $1,530,000 $1,530,000 $1,530,000
premiums are paid in different amounts or 8 $322,170 $1,539,000 $1,539,000 $1,539,000
frequencies. 9 $372,017 $1,549,500 $1,549,500 $1,549,500
10 $424,356 $1,563,000 $1,563,000 $1,563,000
The hypothetical investment rates shown 15 $728,023 $1,675,500 $1,675,500 $1,675,500
above and elsewhere in this prospectus are 20 $1,115,587 $1,903,500 $1,903,500 $1,999,561
illustrative only and should not be 25 $1,610,229 $2,317,500 $2,317,500 $3,517,816
interpreted as a representation of past or 30 $2,241,530 $2,766,000 $2,766,000 $6,120,843
future investment results. Actual rates of 35 $3,047,247 $3,000,000 $3,000,000 $10,427,790
return may be more or less than those shown ------------------------------------------------------------------------------
and will depend on a number of factors, End of year End of year
including the investment allocations made to ACCUMULATED VALUE NET CASH SURRENDER VALUE
variable accounts by the owner and the End of assuming hypothetical gross assuming hypothetical gross
experience of the accounts. No policy annual investment return of annual investment return of
representation can be made by us, the year 0% 6% 12% 0% 6% 12%
separate account or the fund that these ------------------------------------------------------------------------------
hypothetical rates of return can be achieved 1 $26,536 $28,196 $29,857 $14,184 $15,843 $17,505
for any one year or sustained over any 2 $52,575 $57,544 $62,713 $41,595 $46,564 $51,733
period of time. 3 $78,088 $88,066 $98,857 $68,481 $78,458 $89,249
4 $103,047 $119,786 $138,612 $94,812 $111,551 $130,377
This is an illustration only. An 5 $127,417 $152,725 $182,337 $120,555 $145,862 $175,475
illustration is not intended to predict 6 $151,276 $187,022 $230,550 $145,786 $181,532 $225,060
actual performance. Interest rates, 7 $174,830 $222,948 $283,947 $170,713 $218,831 $279,829
dividends, and values set forth in the 8 $198,112 $260,615 $343,122 $195,367 $257,870 $340,377
illustration are not guaranteed. 9 $221,123 $300,107 $408,707 $219,750 $298,735 $407,335
10 $243,861 $341,513 $481,398 $243,861 $341,513 $481,398
15 $367,082 $596,605 $1,000,349 $367,082 $596,605 $1,000,349
20 $478,874 $916,834 $1,868,749 $478,874 $916,834 $1,868,749
25 $560,706 $1,316,326 $3,350,301 $560,706 $1,316,326 $3,350,301
30 $526,729 $1,769,011 $5,829,375 $526,729 $1,769,011 $5,829,375
35 $126,383 $2,227,104 $9,931,229 $126,383 $2,227,104 $9,931,229
------------------------------------------------------------------------------
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10
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<TABLE>
<S> <C>
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Illustration 8
Death benefit Option D at guaranteed cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:D
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
-------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,503,000 $1,503,000 $1,503,000
This illustration assumes no policy loans 3 $106,360 $1,506,000 $1,506,000 $1,506,000
or partial withdrawals have been made. 4 $145,416 $1,510,500 $1,510,500 $1,510,500
5 $186,425 $1,516,500 $1,516,500 $1,516,500
*Additional payment will be required to 6 $229,485 $1,522,500 $1,522,500 $1,522,500
prevent policy termination. 7 $274,697 $1,530,000 $1,530,000 $1,530,000
8 $322,170 $1,539,000 $1,539,000 $1,539,000
The death benefits, accumulated values and 9 $372,017 $1,549,500 $1,549,500 $1,549,500
cash surrender values will differ if 10 $424,356 $1,563,000 $1,563,000 $1,563,000
premiums are paid in different amounts or 15 $728,023 $1,675,500 $1,675,500 $1,675,500
frequencies. 20 $1,115,587 $1,903,500 $1,903,500 $1,903,500
25 $1,610,229 $2,317,500 $2,317,500 $3,289,651
The hypothetical investment rates shown 30 $2,241,530 $0* $2,766,000 $5,655,488
above and elsewhere in this prospectus are 35 $3,047,247 $0* $0* $9,407,250
illustrative only and should not be ------------------------------------------------------------------------------
interpreted as a representation of past or End of year End of year
future investment results. Actual rates of ACCUMULATED VALUE NET CASH SURRENDER VALUE
return may be more or less than those shown End of assuming hypothetical gross assuming hypothetical gross
and will depend on a number of factors, policy annual investment return of annual investment return of
including the investment allocations made to year 0% 6% 12% 0% 6% 12%
variable accounts by the owner and the ------------------------------------------------------------------------------
experience of the accounts. No 1 $26,520 $28,179 $29,840 $14,167 $15,827 $17,487
representation can be made by us, the 2 $52,506 $57,472 $62,638 $41,526 $46,492 $51,658
separate account or the fund that these 3 $77,925 $87,893 $98,674 $68,318 $78,286 $89,066
hypothetical rates of return can be achieved 4 $102,743 $119,458 $138,260 $94,508 $111,223 $130,025
for any one year or sustained over any 5 $126,917 $152,178 $181,742 $120,054 $145,316 $174,879
period of time. 6 $150,517 $186,183 $229,624 $145,027 $180,693 $224,134
7 $173,354 $221,342 $282,200 $169,236 $217,224 $278,083
This is an illustration only. An 8 $195,331 $257,623 $339,913 $192,586 $254,878 $337,168
illustration is not intended to predict 9 $216,317 $294,961 $403,236 $214,945 $293,589 $401,863
actual performance. Interest rates, 10 $236,159 $333,274 $472,696 $236,159 $333,274 $472,696
dividends, and values set forth in the 15 $325,377 $552,067 $955,987 $325,377 $552,067 $955,987
illustration are not guaranteed. 20 $338,815 $772,249 $1,754,080 $338,815 $772,249 $1,754,080
25 $120,929 $892,759 $3,133,001 $120,929 $892,759 $3,133,001
30 $0* $522,435 $5,386,180 $0* $522,435 $5,386,180
35 $0* $0* $8,959,286 $0* $0* $8,959,286
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11
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<TABLE>
<CAPTION>
ILLUSTRATIONS
<S> <C>
-------------------------------------------------------------------------------
Illustration 9
Death benefit Option A at current cost of insurance rates
Based on a weighted average of annual advisory fees and expenses of the
portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans 3 $106,360 $1,500,000 $1,500,000 $1,500,000
or partial withdrawals have been made. 4 $145,416 $1,500,000 $1,500,000 $1,500,000
5 $186,425 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values and 6 $229,485 $1,500,000 $1,500,000 $1,500,000
cash surrender values will differ if 7 $274,697 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 8 $322,170 $1,500,000 $1,500,000 $1,500,000
frequencies. 9 $372,017 $1,500,000 $1,500,000 $1,500,000
10 $424,356 $1,500,000 $1,500,000 $1,500,000
The hypothetical investment rates shown 15 $728,023 $1,500,000 $1,500,000 $1,500,000
above and elsewhere in this prospectus are 20 $1,115,587 $1,500,000 $1,500,000 $2,037,938
illustrative only and should not be 25 $1,610,229 $1,500,000 $1,500,000 $3,602,412
interpreted as a representation of past or 30 $2,241,530 $1,500,000 $2,024,950 $6,300,328
future investment results. Actual rates of 35 $3,047,247 $1,500,000 $2,762,698 $10,791,807
return may be more or less than those shown ------------------------------------------------------------------------------
and will depend on a number of factors, End of year End of year
including the investment allocations made to ACCUMULATED VALUE NET CASH SURRENDER VALUE
variable accounts by the owner and the End of assuming hypothetical gross assuming hypothetical gross
experience of the accounts. No policy annual investment return of annual investment return of
representation can be made by us, the year 0% 6% 12% 0% 6% 12%
separate account or the fund that these ------------------------------------------------------------------------------
hypothetical rates of return can be achieved 1 $26,569 $28,231 $29,895 $14,217 $15,879 $17,542
for any one year or sustained over any 2 $52,674 $57,653 $62,832 $41,694 $46,673 $51,852
period of time. 3 $78,285 $88,291 $99,113 $68,677 $78,683 $89,505
4 $103,374 $120,175 $139,073 $95,139 $111,940 $130,838
This is an illustration only. An 5 $127,911 $153,334 $183,085 $121,048 $146,472 $176,223
illustration is not intended to predict 6 $151,975 $187,916 $231,688 $146,485 $182,426 $226,198
actual performance. Interest rates, 7 $175,771 $224,195 $285,592 $171,654 $220,077 $281,474
dividends, and values set forth in the 8 $199,332 $262,289 $345,414 $196,587 $259,544 $342,669
illustration are not guaranteed. 9 $222,660 $302,292 $411,811 $221,288 $300,920 $410,438
10 $245,758 $344,303 $485,510 $245,758 $344,303 $485,510
15 $371,587 $604,324 $1,013,954 $371,587 $604,324 $1,013,954
20 $488,821 $935,362 $1,904,615 $488,821 $935,362 $1,904,615
25 $591,629 $1,368,587 $3,430,869 $591,629 $1,368,587 $3,430,869
30 $650,490 $1,928,524 $6,000,312 $650,490 $1,928,524 $6,000,312
35 $601,046 $2,631,141 $10,277,912 $601,046 $2,631,141 $10,277,912
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12
<PAGE>
<TABLE>
<S> <C>
------------------------------------------------------------------------------
Illustration 10
Death benefit Option A at guaranteed cost of insurance rates
Based on a weighted average of annual advisory fees and expenses of the
portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE SELECT NONSMOKER ISSUE AGE 55
FEMALE SELECT NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans 3 $106,360 $1,500,000 $1,500,000 $1,500,000
or partial withdrawals have been made. 4 $145,416 $1,500,000 $1,500,000 $1,500,000
5 $186,425 $1,500,000 $1,500,000 $1,500,000
*Additional payment will be required to 6 $229,485 $1,500,000 $1,500,000 $1,500,000
prevent policy termination. 7 $274,697 $1,500,000 $1,500,000 $1,500,000
8 $322,170 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values and 9 $372,017 $1,500,000 $1,500,000 $1,500,000
cash surrender values will differ if 10 $424,356 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 15 $728,023 $1,500,000 $1,500,000 $1,500,000
frequencies. 20 $1,115,587 $1,500,000 $1,500,000 $1,946,190
25 $1,610,229 $1,500,000 $1,500,000 $3,424,763
The hypothetical investment rates shown 30 $2,241,530 $0* $1,630,833 $5,914,147
above and elsewhere in this prospectus are 35 $3,047,247 $0* $2,204,346 $9,886,928
illustrative only and should not be ------------------------------------------------------------------------------
interpreted as a representation of past or End of year End of year
future investment results. Actual rates of ACCUMULATED VALUE NET CASH SURRENDER VALUE
return may be more or less than those shown End of assuming hypothetical gross assuming hypothetical gross
and will depend on a number of factors, policy annual investment return of annual investment return of
including the investment allocations made to year 0% 6% 12% 0% 6% 12%
variable accounts by the owner and the ------------------------------------------------------------------------------
experience of the accounts. No 1 $26,553 $28,215 $29,877 $14,201 $15,862 $17,525
representation can be made by us, the 2 $52,605 $57,581 $62,758 $41,625 $46,601 $51,778
separate account or the fund that these 3 $78,122 $88,118 $98,930 $68,515 $78,511 $89,323
hypothetical rates of return can be achieved 4 $103,071 $119,848 $138,722 $94,836 $111,613 $130,487
for any one year or sustained over any 5 $127,413 $152,791 $182,493 $120,551 $145,929 $175,631
period of time. 6 $151,223 $187,084 $230,769 $145,733 $181,594 $225,279
7 $174,316 $222,612 $283,870 $170,199 $218,494 $279,752
This is an illustration only. An 8 $196,609 $259,360 $342,272 $193,864 $256,615 $339,527
illustration is not intended to predict 9 $217,987 $297,289 $406,494 $216,615 $295,917 $405,122
actual performance. Interest rates, 10 $238,324 $336,357 $477,128 $238,324 $336,357 $477,128
dividends, and values set forth in the 15 $333,640 $564,102 $974,620 $333,640 $564,102 $974,620
illustration are not guaranteed. 20 $375,183 $822,429 $1,818,869 $375,183 $822,429 $1,818,869
25 $298,106 $1,127,673 $3,261,680 $298,106 $1,127,673 $3,261,680
30 $0* $1,553,174 $5,632,521 $0* $1,553,174 $5,632,521
35 $0* $2,099,377 $9,416,122 $0* $2,099,377 $9,416,122
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13
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<PAGE>
Form No. 15-22031-00
<PAGE>
Supplement dated December 17, 1999 to Prospectus Dated May 1, 1999 for
Pacific Select Estate Preserver Last Survivor
Flexible Premium Variable Life Insurance Policies
Issued by Pacific Life Insurance Company
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<S> <C>
In this supplement, you and your mean the This supplement provides information about four additional variable investment
Policyholder or Owner. Pacific Life, we, us, options offered under the policy. Each of these investment options is set up as
and our refer to Pacific Life Insurance a variable account under our separate account and invests in a corresponding
Company. M Fund refers to M Fund, Inc. portfolio of the M Fund.
You'll find an explanation of what terms
used in this supplement mean in the Variable Account I: Brandes International Equity Fund
accompanying variable life insurance Variable Account II: Turner Core Growth Fund
prospectus or the M Fund prospectus. Variable Account III: Frontier Capital Appreciation Fund
Variable Account IV: Enhanced U.S. Equity Fund
The M Fund is described in detail in its
prospectus and in its Statement of You can allocate premium payments and transfer accumulated value to these
Additional Information (SAI). variable investment options, as well as to the other investment options
described in the accompanying Pacific Select Estate Preserver prospectus.
Pacific Select Estate Preserver is described
in detail in the accompanying variable life
insurance prospectus. Except as described
below, all features and procedures of the
Policy described in its prospectus remain
intact.
1
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<TABLE>
<S> <C>
Your policy's accumulated About the variable investment options
value will fluctuate The following chart is a summary of the M Fund portfolios. Each M Fund
depending on the investment portfolio invests in different securities and has its own investment goals,
options you've chosen. strategies and risks. The value of each portfolio will fluctuate with the value
of the investments it holds and returns are not guaranteed. You'll find
detailed descriptions of the portfolios, including the risks associated with
investing in the portfolios, in the accompanying M Fund prospectus. There's no
guarantee that a portfolio will achieve its investment objective. You should
read the M Fund prospectus carefully before investing.
The Portfolio's The Portfolio's Main
Portfolio Investment Goal Investments Portfolio Manager
Brandes Long-term capital Equity securities of foreign Brandes Investment
International appreciation. issuers, including common stocks, Partners, L.P.
Equity preferred stocks and securities
that are convertible into common
stocks. Focuses on stocks with
capitalizations of $1 billion
or more.
Turner Core Long-term capital Common stocks that show strong Turner Investment
Growth Fund appreciation. earnings potential and also have Partners, Inc.
reasonable valuations.
Frontier Capital Maximum capital Common stock of companies of all Frontier Capital
Appreciation appreciation. sizes with emphasis on stocks Management
companies with capitalizations of
Company, Inc. less than $3 billion.
Enhanced U.S. Above-market Common stocks of U.S. companies Franklin Portfolio
Equity total return. which the portfolio manager Associates LLC
believes have the potential for
higher rates of return than the
Standard & Poor's 500 Composite
Stock Price Index while having
risks similar to those of the
index.
We are not responsible for M Financial Investment Advisers, Inc. (MFIA) is the investment adviser for each
the operation of the M Fund or portfolio of the M Fund, and has retained other firms to manage the portfolios.
any of its portfolios. We also MFIA and the M Fund's Board of Directors oversee the management of all of the M
are not responsible for ensuring Fund's portfolios.
that the M Fund and its
portfolios comply with any
laws that apply.
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You'll find more information about Policy Fees and expenses paid by the M Fund
charges in An overview of Pacific Select The M Fund pays advisory fees and other expenses. These are deducted from the
Estate Preserver in the accompanying assets of each Portfolio and may vary from year to year. They are not fixed and
variable life insurance prospectus. are not part of the terms of your policy. If you choose a variable investment
option, these fees and expenses affect you indirectly because they reduce
portfolio returns.
You'll find more about M Fund fees and
expenses in the accompanying M Fund's expenses are assessed at the Fund level and are not direct charges
M Fund prospectus. against the Variable Accounts or the Policy's Accumulated Value. The unit value
of a variable account will change with the value of its corresponding M Fund
portfolio.
. Advisory fee
MFIA is the investment adviser to the M Fund. The M Fund pays an advisory fee
to MFIA for these services. The table below shows the advisory fee as an annual
percentage of each portfolio's average daily net assets.
. Other expenses
The table also shows expenses the M Fund paid in 1998 as an annual percentage
of each portfolio's average daily net assets. MFIA has agreed to pay operating
expenses of the M Fund (not including brokerage or other portfolio transaction
expenses, expenses for litigation, indemnification, taxes, or other
extraordinary expenses) that exceed 0.25% of each portfolio's average daily net
assets. MFIA does this voluntarily, but does not guarantee that it will
continue to do so after December 31, 1999.
M Fund Expenses after Expense Limitation/1/
Advisory Other Total
fee expenses expenses
-------- -------- --------
Brandes International Equity 1.05% 0.25% 1.30%
Turner Core Growth 0.45% 0.25% 0.70%
Frontier Capital Appreciation 0.90% 0.25% 1.15%
Enhanced U.S. Equity 0.55% 0.25% 0.80%
/1/Actual expenses for 1998 were 3.57% for Brandes International Equity, 3.42%
for Turner Core Growth, 1.75% for Frontier Capital Appreciation, and 2.34% for
Enhanced U.S. Equity. MFIA paid the difference.
Statements and reports we'll send you
We'll send you financial statements that we receive from M Fund.
The rights we describe in the Voting rights
accompanying variable life We're the legal owner of the shares of the M Fund that are held by the variable
insurance prospectus under Making accounts. The voting rights we describe in the Voting rights section of the
changes to the separate account accompanying variable life insurance prospectus and how we'll exercise them
also apply to the M Fund. also apply to the M Fund.
3
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ILLUSTRATIONS
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If you ask us, we'll provide you with Illustrations 1 and 2, which appear on the following pages, illustrate how the
different kinds of illustrations: death benefit, accumulated value and net cash surrender value of a hypothetical
policy may vary over an extended period of time, based on certain hypothetical
. Illustrations similar to the ones in the rates of return.
prospectus and this supplement, but
based on information you give us about These illustrations are based on a hypothetical policy with the following
the ages of the two people to be insured by characteristics:
the policy, their risk classes, the face
amount, the death benefit and premium payments. . the death benefit option is Option A
. the face amount is $1,500,000
. Illustrations that show the allocation of . the annual premium is $32,132
premium payments to specified Variable . on the policy date, the people insured by the policy are:
Accounts. These will reflect the - a 55-year old male non-smoker
expenses of the portfolio in which - a 55-year old female non-smoker
the variable account invests.
The cost of insurance rates vary by illustration, as follows:
. Illustrations that use a hypothetical gross ----------------------------------------------
rate of return that's greater than 12%. Cost of insurance rate
These are available only to certain large ----------------------------------------------
institutional investors. Illustration 1 Current
Illustration 2 Guaranteed
----------------------------------------------
Assumptions
The illustrations are based on the guideline premium test. Here are the
assumptions we're using:
. The hypothetical rates of return are equal to constant gross annual rates of
0%, 6% and 12%.
. All premium payments are made at the beginning of the policy year.
. An amount equal to the annual premium, after taxes, is invested to earn
interest at 5% compounded annually for the second column of each table, Total
premiums paid plus interest at 5%, which shows the amount that would
accumulate.
. No policy loans have been taken out.
. The amounts shown for the death benefits, accumulated values and net cash
surrender values reflect charges deducted from the variable accounts. This
means that the net investment return on the variable accounts is lower than
the gross investment return on the assets.
. The amounts shown for the death benefits, accumulated values and net cash
surrender values also reflect premium loads, administrative charges and
mortality and expense risk charges.
The Pacific Select Fund's investment . The illustrations assume total annual advisory fees and expenses of 80% of
advisory fees and expenses are shown in total average daily net assets of the portfolios. This reflects average
An overview of Pacific Select Estate advisory fees of .69% and average expenses of .11% based upon fees and
Preserver. expenses of portfolios available as investment options under the policy.
The M Fund's investment advisory fees
and expenses are shown on page 3 of this
supplement.
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. There are no charges against the variable accounts for income taxes but we
reserve the right to impose charges in the future.
Things to keep in mind
Here are a few things to keep in mind when reviewing the illustrations:
. The values shown would be different if, although the gross annual investment
rates of return averaged 0%, 6% or 12% over a period of years, they also rose
above or fell below those averages for individual policy years.
. After we've deducted the charges and fund expenses described in the
assumptions above, the illustrated gross annual investment rates of return of
0%, 6% and 12% correspond to approximate net annual rates of return of -.80%,
5.15%, and 11.10%.
. The amounts shown would be different if unisex insurance rates were used or
if the people insured by the policy were females and insurance rates for
females were used.
. For the illustration that assumes current cost of insurance rates, the
amounts shown would be different if either person insured by the policy was a
smoker and rates for smokers were used.
. The portfolio expenses used in the illustrations do not include foreign
taxes. Here's what foreign taxes were for the year ended December 31, 1998:
---------------------------------------------------------------------
Percentage of average
Portfolio daily net assets
---------------------------------------------------------------------
Pacific Select Fund:
Aggressive Equity 0.01%
Growth LT 0.01%
Equity Income 0.01%
Equity Index 0.01%
International 0.23%
Emerging Markets 0.26%
M Fund:
Brandes International Equity 0.18%
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Illustration 1
Death benefit Option A at current cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE NONSMOKER ISSUE AGE 55
FEMALE NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
--------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
End of paid plus End of year DEATH BENEFIT assuming
Illustration of death benefits, accumulated policy interest at hypothetical gross annual investment return of
values and net cash surrender values. year 5% 0% 6% 12%
--------------------------------------------------------------------------------
All premium payments are illustrated as if 1 $33,738 $1,500,000 $1,500,000 $1,500,000
made at the beginning of the policy year. 2 $69,163 $1,500,000 $1,500,000 $1,500,000
3 $106,360 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans or 4 $145,416 $1,500,000 $1,500,000 $1,500,000
partial withdrawals have been made. 5 $186,425 $1,500,000 $1,500,000 $1,500,000
6 $229,485 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values 7 $274,697 $1,500,000 $1,500,000 $1,500,000
and cash surrender values will differ if 8 $322,170 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 9 $372,017 $1,500,000 $1,500,000 $1,500,000
frequencies. 10 $424,356 $1,500,000 $1,500,000 $1,500,000
15 $728,023 $1,500,000 $1,500,000 $1,500,000
The hypothetical investment rates shown 20 $1,115,587 $1,500,000 $1,500,000 $1,996,351
above and elsewhere in this prospectus 25 $1,610,229 $1,500,000 $1,500,000 $3,507,322
are illustrative only and should not be 30 $2,241,530 $1,500,000 $1,966,938 $6,094,118
interpreted as a representation of past or 35 $3,047,247 $1,500,000 $2,669,031 $10,367,617
future investment results. Actual rates of --------------------------------------------------------------------------------
return may be more or less than those End of year End of year
shown and will depend on a number of ACCUMULATED VALUE NET CASH SURRENDER VALUE
factors, including the investment End of assuming hypothetical gross assuming hypothetical gross
allocations made to variable accounts by policy annual investment return of annual investment return of
the owner and the experience of the year 0% 6% 12% 0% 6% 12%
accounts. No representation can be made --------------------------------------------------------------------------------
by us, the separate account or the 1 $26,528 $28,187 $29,848 $14,175 $15,835 $17,495
underlying funds that these hypothetical 2 $52,551 $57,517 $62,684 $41,571 $46,537 $51,704
rates of return can be achieved for any 3 $78,043 $88,013 $98,796 $68,435 $78,406 $89,189
one year or sustained over any period of 4 $102,977 $119,700 $138,510 $94,742 $111,465 $130,275
time. 5 $127,322 $152,602 $182,182 $120,459 $145,740 $175,320
6 $151,160 $186,861 $230,334 $145,670 $181,371 $224,844
This is an illustration only. An illustration 7 $174,696 $222,747 $283,657 $170,578 $218,630 $279,539
is not intended to predict actual 8 $197,964 $260,371 $342,745 $195,219 $257,626 $340,000
performance. Interest rates, dividends, and 9 $220,967 $299,820 $408,226 $219,594 $298,448 $406,854
values set forth in the illustration are not 10 $243,708 $341,186 $480,799 $243,708 $341,186 $480,799
guaranteed. 15 $367,244 $596,264 $998,939 $367,244 $596,264 $998,939
20 $481,379 $918,461 $1,865,748 $481,379 $918,461 $1,865,748
25 $580,156 $1,336,433 $3,340,307 $580,156 $1,336,433 $3,340,307
30 $633,722 $1,873,275 $5,803,922 $633,722 $1,873,275 $5,803,922
35 $575,964 $2,541,934 $9,873,921 $575,964 $2,541,934 $9,873,921
--------------------------------------------------------------------------------
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Illustration 2
Death benefit Option A at guaranteed cost of insurance rates
Based on average annual advisory fees and expenses of the portfolios
DEATH BENEFIT OPTION:A
FACE AMOUNT:$1,500,000
MALE NONSMOKER ISSUE AGE 55
FEMALE NONSMOKER ISSUE AGE 55
GUIDELINE PREMIUM TEST
ANNUAL PREMIUM:$32,132
----------------------------------------------------------------------------------
Flexible premium survivorship Total
variable universal life premiums
Illustration of death benefits, accumulated End of paid plus End of year DEATH BENEFIT assuming
values and net cash surrender values. policy interest at hypothetical gross annual investment return of
year 5% 0% 6% 12%
All premium payments are illustrated as if ----------------------------------------------------------------------------------
made at the beginning of the policy year. 1 $33,738 $1,500,000 $1,500,000 $1,500,000
2 $69,163 $1,500,000 $1,500,000 $1,500,000
This illustration assumes no policy loans or 3 $106,360 $1,500,000 $1,500,000 $1,500,000
partial withdrawals have been made. 4 $145,416 $1,500,000 $1,500,000 $1,500,000
5 $186,425 $1,500,000 $1,500,000 $1,500,000
*Additional payment will be required to 6 $229,485 $1,500,000 $1,500,000 $1,500,000
prevent policy termination. 7 $274,697 $1,500,000 $1,500,000 $1,500,000
8 $322,170 $1,500,000 $1,500,000 $1,500,000
The death benefits, accumulated values 9 $372,017 $1,500,000 $1,500,000 $1,500,000
and cash surrender values will differ if 10 $424,356 $1,500,000 $1,500,000 $1,500,000
premiums are paid in different amounts or 15 $728,023 $1,500,000 $1,500,000 $1,500,000
frequencies. 20 $1,115,587 $1,500,000 $1,500,000 $1,904,253
25 $1,610,229 $1,500,000 $1,500,000 $3,330,951
The hypothetical investment rates shown 30 $2,241,530 $0* $1,553,695 $5,715,263
above and elsewhere in this prospectus 35 $3,047,247 $0* $2,093,168 $9,490,186
are illustrative only and should not be ----------------------------------------------------------------------------------
interpreted as a representation of past or End of year End of year
future investment results. Actual rates of ACCUMULATED VALUE NET CASH SURRENDER VALUE
return may be more or less than those End of assuming hypothetical gross assuming hypothetical gross
shown and will depend on a number of policy annual investment return of annual investment return of
factors, including the investment year 0% 6% 12% 0% 6% 12%
allocations made to variable accounts by ----------------------------------------------------------------------------------
the owner and the experience of the 1 $26,511 $28,170 $29,831 $14,159 $15,818 $17,478
accounts. No representation can be made 2 $52,482 $57,446 $62,609 $41,502 $46,466 $51,629
by us, the separate account or the 3 $77,881 $87,841 $98,614 $68,273 $78,234 $89,007
underlying funds that these hypothetical 4 $102,674 $119,374 $138,160 $94,439 $111,139 $129,925
rates of return can be achieved for any 5 $126,825 $152,060 $181,591 $119,963 $145,198 $174,729
one year or sustained over any period of 6 $150,410 $186,032 $229,418 $144,920 $180,542 $223,928
time. 7 $173,244 $221,168 $281,939 $169,127 $217,050 $277,822
8 $195,246 $257,447 $339,609 $192,501 $254,702 $336,864
This is an illustration only. An illustration 9 $216,302 $294,826 $402,918 $214,929 $293,453 $401,545
is not intended to predict actual 10 $236,287 $333,253 $472,429 $236,287 $333,253 $472,429
performance. Interest rates, dividends, and 15 $329,377 $556,074 $959,509 $329,377 $556,074 $959,509
values set forth in the illustration are not 20 $367,939 $805,195 $1,779,676 $367,939 $805,195 $1,779,676
guaranteed. 25 $286,778 $1,091,838 $3,172,334 $286,778 $1,091,838 $3,172,334
30 $0* $1,479,710 $5,443,108 $0* $1,479,710 $5,443,108
35 $0* $1,993,493 $9,038,273 $0* $1,993,493 $9,038,273
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Form No. 15-21535-01
