<PAGE>
As Filed with the Securities and Exchange Commission on August 14, 1997
Registration No. 333-22557
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NUMBER 3
TO
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 OF SECURITIES OF
UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
Massachusetts Mutual Variable Life Separate Account I
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(Exact Name of Registrant)
Massachusetts Mutual Life Insurance Company
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1295 State Street
Springfield, Massachusetts 01111
(Address of Principal Executive Office)
Thomas Finnegan, Corporate Secretary
------------------------------------
1295 State Street
Springfield, Massachusetts 01111
(Name and Address of Agent for Service of Process)
GROUP FLEXIBLE PREMIUM VARIABLE LIFE
Approximate date of proposed public offering: As soon as possible after the
effective date of this Registration Statement.
Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant
hereby declares that an indefinite amount of its securities is being registered
under the Securities Act of 1933.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said section, may determine.
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
Item No. of Caption in Prospectus
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Form N-8B-2
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1 Cover Page; Glossary; The Separate Account
2 Cover Page; What is MassMutual; The
Separate Account
3 Investment of the Separate Account
4 Sales and Other Agreements
5 The Separate Account
6 The Separate Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Cover Page; Basic Questions and Answers
About Us and Our Policy; Initial Minimum Premium
Requirements; Death Benefits
Under the Policy; Free Look Provision;
Account Value and Cash Surrender Value; Policy
Loan Privilege; The Separate Account; Charges
Under the Policy; Modal Term Premiums;
Sales and Other Agreements;
When We Pay Proceeds; Payment Options; Our
Rights; Your Voting Rights; Basic Questions
and Answers About Us and Our Policy
11 The Separate Account
12 The Separate Account; Sales and Other
Agreements
13 The Separate Account; Charges Under the Policy
14 Basic Questions and Answers About Us and Our
Policy; The Separate Account; Sales and Other
Agreements
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
Item No. of Caption in Prospectus
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Form N-8B-2
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15 Basic Questions and Answers About Us and Our
Policy; General Provisions of the Policy
16 The Separate Account; Investment Return
17 The Separate Account; Account Value and Cash Surrender
Value; Withdrawal Rights and Payment Options
18 The Separate Account
19 Records and Reports
20 Not Applicable
21 What is the loan privilege and how does a
loan affect the Policy's Death Benefit and
Cash Surrender Value; Policy Loan Privilege
22 Not Applicable
23 Bonding Arrangement
24 Limits on Our Right to Challenge the Policy;
Suicide; Misstatement of Age or Sex;
Assignment; Beneficiary; Our Rights; The
Separate Account; Optional Benefits Obtainable
by Rider
25 Basic Questions and Answers About Us and Our
Policy
26 Not Applicable
27 Basic Questions and Answers About Us and
Our Policy
28 Directors and Executive Officers of MassMutual
29 Basic Questions and Answers About Us and
Our Policy
30 Not Applicable
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
Item No. of Caption in Prospectus
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Form N-8B-2
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31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Basic Questions and Answers About Us and
Our Policy
36 Not Applicable
37 Not Applicable
Sales and Other Agreements
38 Sales and Other Agreements
39 Sales and Other Agreements
40 Sales and Other Agreements
41 Sales and Other Agreements
42 Not Applicable
43 Sales and Other Agreements
44 The Separate Account; Investment Return;
Charges for Federal Income Tax; General
Provisions of the Policy
45 Not Applicable
46 The Separate Account; Investment Return
47 The Separate Account
48 The Separate Account; Investment Return
49 Not Applicable
<PAGE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
Item No. of Caption in Prospectus
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Form N-8B-2
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50 The Separate Account
51 Cover Page; Basic Questions and Answers
About Us and Our Policy
52 The Separate Account; Your Voting Rights; Our Rights
53 Federal Income Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
Variable Rider
to
Group Flexible Premium Adjustable Life Insurance Certificate
This prospectus describes a variable rider issued in connection with
certificates issued to individuals participating under group flexible premium
adjustable life insurance policies issued by Massachusetts Mutual Life Insurance
Company ("MassMutual"). The group policies allow individual owners to elect
certificates offering participation in MassMutual's fixed account and to elect a
rider to the certificate offering additional participation in a separate account
of MassMutual. The certificates issued to individuals who also elect the
variable rider are referred to herein as "Policies" or "Policy." The Policy
provides lifetime insurance protection and has flexibility with respect to
premium payments. Payments are based upon the Selected Face Amounts chosen in
the Enrollment Form or Application. Policyowners have several investment
alternatives from which to choose. An individual Policyowner may generally
allocate the premium for his or her Policy among a Guaranteed Principal Account
("GPA") and the sixteen Separate Account divisions of a designated segment (the
"GVUL Segment") of Massachusetts Mutual Variable Life Separate Account I (the
"Separate Account") after certain deductions have been made. (For details see
"Deductions From Premiums.") At any one time, only eight divisions of the
Separate Account plus the GPA are available to a Policyowner. The GVUL Segment
of the Separate Account is divided into sixteen divisions (the "Divisions"). One
division, (the "MML Equity Index Division") invests in one fund of the MML
Series Investment Fund (the "MML Trust"); nine divisions, (the "Oppenheimer
Divisions") invest in nine funds of Oppenheimer Variable Account Funds (the
"Oppenheimer Trust"); and six divisions, (the "Panorama Divisions") invest in
six series of the Panorama Series Fund, Inc. (the "Panorama Fund").
The Death Benefit may, and Cash Surrender Value of a Policy most likely will,
vary up or down depending on the investment performance of the Divisions of the
Separate Account. While there is no guaranteed minimum Cash Surrender Value for
a Policy invested in the Separate Account, a Policy's Death Benefit will never
be less than its Selected Face Amount. The Cash Surrender Value can increase,
decrease, or remain level each year based upon the Selected Face Amount and
Death Benefit Option chosen by the Policyowner, subject to certain rules
established by MassMutual. Furthermore, the Policy will not lapse provided there
is sufficient Account Value available to pay applicable monthly charges. (For
details see "Account Value Charges" and "Separate Account Charges.")
The Divisions have distinct investment portfolios. The MML Equity Index Division
invests in shares of MML Equity Index Fund, which invests substantially all its
assets, to the extent practicable, in the stocks that compose the Standard &
Poor's 500 Composite Stock Price Index. The Oppenheimer Money Division invests
in shares of Oppenheimer Money Fund which invests primarily in "money market"
securities consistent with low capital risk and maintenance of liquidity. The
Oppenheimer Bond Division invests in shares of Oppenheimer Bond Fund which
invests primarily in high yield fixed-income securities. The Oppenheimer
Strategic Bond Division invests in shares of Oppenheimer Strategic Bond Fund
which invests primarily in: (i) foreign government and corporate debt
securities; (ii) U.S. government securities; and (iii) lower-rated high yield,
high-risk debt securities. The Oppenheimer High Income Division invests in
shares of Oppenheimer High Income Fund which invests primarily in lower-rated,
high yield, high risk income securities. The Oppenheimer Growth & Income
Division invests in shares of Oppenheimer Growth & Income Fund which invests
primarily in equity and debt securities. The Oppenheimer Multiple Strategies
Division invests in shares of Oppenheimer Multiple Strategies Fund which invests
primarily in common stocks and other equity securities, bonds, other debt
securities and "money market securities." The Oppenheimer Growth Division
invests in shares of Oppenheimer
<PAGE>
Growth Fund which invests primarily in securities of well-known companies. The
Oppenheimer Capital Appreciation Division invests in shares of Oppenheimer
Capital Appreciation Fund which invests primarily in securities of growth-type
companies. The Oppenheimer Global Securities Division invests in shares of
Oppenheimer Global Securities Fund which invests primarily in securities of
foreign issuers, growth type companies, cyclical industries and special
situations which are believed will appreciate in value. The Panorama Total
Return Division invests in shares of the Panorama Total Return Portfolio which
invests primarily in stocks, corporate bonds, U.S. Government securities, and
money market instruments. The Panorama Growth Division invests in shares of the
Panorama Growth Portfolio which invests primarily in common stocks with low
price-earnings ratios and better than anticipated earnings. The Panorama
International Equity Division invests in shares of the Panorama International
Equity Portfolio which invests primarily in equity securities of companies based
outside of the United States. The Panorama LifeSpan Capital Appreciation
Division invests in shares of the Panorama LifeSpan Capital Appreciation
Portfolio which invests in a strategically allocated portfolio consisting
primarily of equity securities. The Panorama LifeSpan Balanced Division invests
in shares of the Panorama LifeSpan Balanced Portfolio which invests in a
strategically allocated portfolio of equity securities and fixed income
securities with a slightly stronger focus on equity securities. The Panorama
LifeSpan Diversified Income Division invests in shares of the Panorama LifeSpan
Diversified Income Portfolio which invests in a strategically allocated
portfolio with a focus on fixed income securities. (Collectively, these sixteen
funds are referred to as the "Funds.") The shares of the underlying Funds
purchased by the Divisions are held by MassMutual as custodian of the Separate
Account. (For details regarding the charges against the Separate Account, see
"Separate Account Charges.")
All Policies are serviced through MassMutual's Home Office which is located in
Springfield, Massachusetts. The mailing address is Massachusetts Mutual Life
Insurance Company, Springfield, Massachusetts 01111. The telephone number is
(413) 788-8411.
August 14, 1997
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE PROSPECTUSES OF THE MML
EQUITY INDEX FUND, OPPENHEIMER VARIABLE ACCOUNT FUNDS, AND PANORAMA SERIES FUND,
INC.
<PAGE>
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FURTHER REFERENCE.
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR
A POLICY'S BENEFICIARY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY SIMILAR TO
OR COMPARABLE TO A MUTUAL FUND'S SYSTEMATIC INVESTMENT PLAN.
REPLACING EXISTING INSURANCE WITH THE POLICY DESCRIBED IN THIS PROSPECTUS MAY
NOT BE TO YOUR ADVANTAGE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF, OR SOLICITATION OF AN OFFER TO
ACQUIRE, ANY INTEREST OR PARTICIPATION IN THE VARIABLE RIDER TO GROUP FLEXIBLE
PREMIUM ADJUSTABLE LIFE INSURANCE CERTIFICATE OFFERED BY THIS PROSPECTUS IN ANY
JURISDICTION TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION IN SUCH JURISDICTION.
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents Page
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<S> <C> <C>
Definitions Of Terms
Basic Questions And Answers About Us And Our Policy
What is MassMutual?
What variable life insurance policy are We offering?
Availability
Initial Minimum Premium Requirements
Underwriting
What is the Account Value of the Policy?
What are the Divisions of the Separate Account?
What is the Guaranteed Principal Account ("GPA")?
Is the level of the Death Benefit guaranteed?
Is the Death Benefit subject to income taxes?
Does the Policy have a Cash Surrender Value?
What is a modified endowment contract?
Can this Policy become a modified endowment contract?
What about Premiums?
When are Initial Premiums allocated to the Guaranteed Principal Account
or the Separate Account?
How can the Net Premium and the Account Value of the Policy be allocated
among the Guaranteed Principal Account and the Separate Account
Divisions?
How long will the Policy remain in force?
Are there charges against the Policy?
What is the loan privilege and how does a loan affect the Policy's
Death Benefit and Cash Surrender Value?
Are dividends paid on the Policy?
Do I have a right to cancel?
Charges Under The Policy
Deductions from Premiums
Sales Load
State Premium Tax Charge
Deferred Acquisition Cost ("DAC") Tax Charge
Account Value Charges
Administrative Charge
Charge for Cost of Insurance Protection
Separate Account Charges
Charges for Mortality and Expense Risks
Charges for Federal Income Taxes
Fund Charges
The Separate Account
Investment of the Separate Account
Investment Objectives
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents Page
- ----------------- ----
<S> <C> <C>
Rates of Return
General Provisions Of The Policy
Premiums
Planned Policy Premiums - Modal Term Premiums
Minimum and Maximum Premium Payments
Termination
Grace Period
Death Benefit Under The Policy
Account Value And Cash Surrender Value
Account Value
Transfers
Automated Account Re-Balancing
Investment Return
Cash Surrender Value
Withdrawals
Policy Loan Privilege
Source of Loan
If Loans Exceed the Policy Account Value
Interest
Repayment
Interest on Loaned Value
Effect of Loan
Free Look Provision
Exchange Privilege
Your Voting Rights
Our Rights
Directors And Executive Vice Presidents Of MassMutual
The Guaranteed Principal Account
Federal Income Tax Considerations
MassMutual - Tax Status
Policy Proceeds, Premiums, and Loans
Modified Endowment Contracts
Diversification Standards
Additional Provisions Of The Policy
Paid-up Policy Date
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents Page
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<S> <C> <C>
Reinstatement Option
Payment Options
Fixed Amount Payment Option
Fixed Time Payment Option
Interest Payment Option
Lifetime Payment Option
Joint Lifetime Payment Option
Joint Lifetime Payment Option with Reduced Payments
Withdrawal Rights under Payment Options
Beneficiary
Changing the Policyowner or Beneficiary
Right to Substitute Insured
Assignment
Dividends
Limits on Our Right to Challenge the Policy
Misstatement of Age or Sex
Suicide
When We Pay Proceeds
Optional Benefits Obtainable By Rider
Waiver of Monthly Charges Rider
Accelerated Benefits Rider
Accidental Death and Dismemberment Rider
Records And Reports
Sales And Other Agreements
Commissions Schedule
Bonding Arrangement
Legal Proceedings
Experts
Financial Statements
Appendix A
Appendix B
</TABLE>
<PAGE>
DEFINITION OF TERMS
Account Value: The sum of the Variable Account Value and the Fixed Account
- -------------
Value of the Policy.
Application: The form used to apply for an increase in the Selected Face Amount
- -----------
of the Policy after the Policyowner ceases to be associated with an Employer.
Enrollment Forms are used to apply for the initial Selected Face Amount and any
subsequent increases when the Policyowner remains associated with the Employer.
A supplement to the Application is used to apply for the variable rider.
Beneficiary: The person or persons that the Policyowner specifies to Us in
- -----------
writing to receive insurance proceeds after the Insured dies.
Cash Surrender Value: The amount payable to a Policyowner upon Surrender of the
- --------------------
Policy. It is equal to the Account Value less any Policy Debt.
Certificate: A document issued by Us under a group flexible premium adjustable
- -----------
life insurance contract to Certificate owners, setting forth or summarizing the
Certificate owner's rights and benefits.
Death Benefit: The amount payable to the named Beneficiary when the Insured
- -------------
dies. A choice of Death Benefits is available under the Policy (referred to as
"Option A" and "Option B"). The Death Benefit under Option A equals the greater
of the Selected Face Amount or the Minimum Face Amount in effect on the date of
death, with possible additions and deductions. The Death Benefit under Option B
equals the greater of the Selected Face Amount plus the Account Value or the
Minimum Face Amount in effect on the date of death, with possible additions and
deductions. Possible additions include the portion of the Monthly Deduction
attributable to death benefit coverage after the Insured's death. Possible
deductions include Policy Debt and unpaid Monthly Deductions.
Divisions: The subaccounts of the Separate Account, each of which invests in
- ---------
shares of the MML Series Investment Fund (the "MML Trust"), the Oppenheimer
Variable Account Funds (the "Oppenheimer Trust"), or the Panorama Series Fund,
Inc. (the "Panorama Fund").
Employee: A person who is associated with an Employer and the spouse of such
- --------
person.
Employer: The employer, association, sponsoring organization or trust which has
- --------
executed a Participation Agreement electing participation in a Group
Contract.
Enrollment Form: A document used by potential Certificate owners to apply for
- ---------------
the Certificates and to apply for an increase in the Selected Face Amount of the
Certificate when the Certificate owner is associated with an Employer.
Fixed Account Value: The Account Value which is allocated to the GPA.
- -------------------
Free Look Period: The period during which a Certificate owner may return the
- ----------------
Certificate. It must be within 10 days of receipt of the Certificate (unless a
different period is mandated under applicable state law). If You have added the
variable rider to the Certificate prior to the expiration of Your Certificate's
Free Look Period, amounts will be held in the Guaranteed Principal Account until
the period's expiration.
<PAGE>
Group Contract: A group flexible premium adjustable life insurance contract in
- --------------
which the Employer elects to participate and which is issued by MassMutual.
Guaranteed Principal Account ("GPA"): A fixed account to which a Policyowner may
- ------------------------------------
allocate Net Premium or Account Value, which guarantees both the principal and a
minimum interest rate. The GPA is part of Our General Account and its investment
performance has no bearing upon the investment performance of the Separate
Account.
Home Office: The Home Office of MassMutual is located at 1295 State Street in
- -----------
Springfield, Massachusetts.
Insured: Person whose life the Policy insures.
- -------
Issue Age: The Insured's Age at his or her last birthday as of the date the
- ---------
Certificate is issued.
Issue Date: The date shown on the Policy schedule page. It is the start date of
- ----------
the suicide and contestability periods. It is also the date from which the
Certificate is in force if the first premium has been paid.
Minimum Face Amount: An amount equal to Account Value times the applicable
- -------------------
Minimum Face Amount percentage. This percentage depends upon the Insured's age.
The Minimum Face Amount in any event may not be less than $50,000.
Modal Term: A period selected by the Employer for which Modal Term Premiums will
- ----------
be paid in advance by the Employer. This period may be monthly, quarterly,
semi-annual or annual. Your Modal Term is specified in Your Policy schedule
page.
Modal Term Premium: The estimated premium amount sufficient to pay the Premium
- ------------------
Deduction and Monthly Deduction(s) under the Policy during one Modal Term. For
example, if a Policy has a monthly Modal Term, the Modal Term Premium would be
one estimated Monthly Deduction plus one estimated Premium Deduction. If a
Policy maintains a yearly Modal Term, the Modal Term Premium would be twelve
estimated Monthly Deductions plus one estimated Premium Deduction. The Monthly
Deduction necessary under any Policy varies by initial Selected Face Amount,
issue age, underwriting classification, and rider(s) selected.
Monthly Calculation Date: The monthly date on which the Monthly Deductions under
- ------------------------
the Policy are generally deducted from the Account Value. The first Monthly
Calculation Date will be the Policy Date, and subsequent Monthly Deductions will
be on the same date of each succeeding calendar month. Monthly Deductions from
Your Policy are made on the Monthly Calculation Date. However, if the Monthly
Calculation Date does not fall on a Valuation Date, the Monthly Deduction will
occur on the next succeeding Valuation Date. Monthly Deductions will occur on a
date other than the Monthly Calculation Date when: 1) We receive the initial
premium for Your Certificate; and 2) We receive a premium amount sufficient to
prevent termination of the Policy in accordance with the Grace Period and
Termination provisions of the Policy. (See "Grace Period" and "Termination.").
All Policies issued to the same group are generally aggregated for purposes of
maintaining the same monthly date. The Policies are Certificates to which
variable account riders have been added. Therefore, the monthly calculation date
and policy date remain the same in Your Certificate even after You have elected
the variable account rider.
<PAGE>
Monthly Deduction: The deductions from the Account Value under the Policy which
- -----------------
are generally deducted on the Monthly Calculation Date. The deductions are equal
to the sum of the charge for cost of insurance protection, plus the
Administrative Charge, plus a charge for the cost of any additional benefits
provided by rider.
Net Premium: Premium paid less sales load, state premium tax charges and
- -----------
deferred acquisition cost tax charges.
Paid-up Policy Date: The Policy Anniversary Date succeeding the Insured's 100th
- -------------------
birthday.
Participation Agreement: An agreement executed by the Employer requesting
- -----------------------
participation in a Group Contract issued by MassMutual.
Policy: The Certificate, as amended by the variable rider, offered by MassMutual
- ------
and described in this Prospectus.
Policy Anniversary: The anniversary of the Policy Date.
- ------------------
Policy Date: The date shown on the Policy schedule page used as the starting
- -----------
point for determining Policy Anniversary Dates, Policy Years and Monthly
Calculation Dates. The Policies are Certificates to which variable account
riders have been added. Therefore, the policy dates, anniversary dates, policy
years, and monthly calculation dates remain the same in Your Policy even after
You have elected the variable account rider.
Policy Debt: The amount of obligation from a Policyowner to MassMutual from
- -----------
outstanding loans made to the Policyowner under the Policy. This amount includes
any loan interest accrued to date.
Policy Year: The twelve month period commencing with the Policy Date, and each
- -----------
successive twelve month period thereafter.
Policyowner: The owner of a Policy, as designated in the Enrollment Form or
- -----------
Application, or as subsequently changed.
Premium: The payment that may be paid to Us to purchase life insurance and to
- -------
increase the Account Value of the Policy.
Premium Deduction: The deductions We make from premiums prior to the allocation
- -----------------
of such premiums to the GPA or the selected Divisions. The deductions are equal
to the sum of the charges for sales load, state premium tax, and deferred
acquisition ("DAC") tax.
Premium Tax: The amount of premium tax, if any, charged by a state or other
- -----------
governmental authority.
Selected Face Amount: The amount of insurance coverage chosen by the
- --------------------
Policyowner.
Separate Account: The segregated asset account called "Massachusetts Mutual
- ----------------
Variable Life Separate Account I" established by MassMutual under the laws of
Massachusetts and registered as a unit investment trust under the Investment
Company Act of 1940, as amended. The Separate Account will be used to
<PAGE>
receive and invest premiums for this Policy and for other variable life
insurance policies MassMutual issues. For each class of policy there will be a
designated segment of the Separate Account.
Surrender: A surrender by the Policyowner of all rights under the Policy while
- ---------
the Policy is in force in exchange for the entire Account Value minus any Policy
Debt under the Policy.
Valuation Date: Any date on which the net asset value of the shares of the Funds
- --------------
is determined. Generally, this will be any date on which the New York Stock
Exchange (or its successor) is open for trading.
Valuation Period: The period of time from the end of one Valuation Date to the
- ----------------
end of the next Valuation Date.
Valuation Time: The time the New York Stock Exchange (or its successor) closes
- --------------
on a Valuation Date (currently 4:00 p.m. New York time). All actions which are
to be performed on a Valuation Date will be performed as of the Valuation Time.
Variable Account Values: Account Values which are allocated to any of the
- -----------------------
Divisions of the GVUL Segment of the Separate Account.
We, Us, or Our: Refers to MassMutual.
- --------------
Withdrawal: A withdrawal of Account Value by the Policyowner.
- ----------
You or Yours: Refers to the Policyowner.
- ------------
<PAGE>
BASIC QUESTIONS AND ANSWERS ABOUT US AND OUR POLICY
What is MassMutual? MassMutual is a mutual life insurance company chartered in
- ------------------
1851 under the laws of Massachusetts. Its Home Office is located at 1295 State
Street in Springfield, Massachusetts. MassMutual is licensed to transact life,
accident and health business in all fifty states of the United States, the
District of Columbia, Puerto Rico, and certain provinces of Canada.
On February 29, 1996, MassMutual and Connecticut Mutual Life Insurance Company
("Connecticut Mutual") merged. As a result, the separate existence of
Connecticut Mutual ceased and MassMutual continues its corporate existence under
its current name. As of December 31, 1996, MassMutual had total contingency
reserves in excess of $2.6 billion and consolidated assets of $55.8 billion.
What variable life insurance policy are We offering? In this Prospectus We are
- ---------------------------------------------------
offering a variable account rider to a Certificate (the "Policy") which provides
the Policyowner the opportunity to allocate Account Value to the Separate
Account. The Policy is evidence of individual insurance containing a variable
accumulation option. We issue the Policy to provide for a Death Benefit and Cash
Surrender Value, as well as loan privileges and flexible premiums. The
Policyowner may select the timing and amount of premium payments. The Policy is
considered "variable" because, unlike the fixed benefits of a traditional whole
life policy, the Death Benefit may, and Cash Surrender Value most likely will,
vary to the extent that the Account Value under the Policy is allocated to the
Division(s). Certain provisions of the Policy as described herein may be
somewhat different in any particular state because of specific state
requirements.
The Policy evidences a legal contract between the Employer, Policyowner and
MassMutual. The entire contract consists of the Group Contract, the Enrollment
Form, the Application, the Policy and any amendments, supplements, or riders
added thereto. In the event of a conflict between the contract, as evidenced by
the aforementioned documents, and this prospectus, the terms of the contract
shall apply.
Availability. The variable rider may only be elected by Certificate owners. The
- ------------
Certificates are only available to individuals who are members of a group
acceptable to MassMutual where the group sponsor such as an employer,
association, sponsoring organization or trust executes a Participation Agreement
requesting participation in a Group Contract issued by MassMutual. Each
individual in a group accepted by MassMutual is aggregated for purposes of
determining Issue Dates, Policy Dates, underwriting classification, and sales
load percentages. The Group Contract and the Participation Agreement specify the
rights and privileges of the group sponsor ("Employer"). The Policy is evidence
of coverage under the Group Contract and Individuals may exercise all rights and
privileges under the Policy through the Employer. After termination of the
employment or other relationship, an individual who has been issued the Policy
may exercise all rights and privileges directly with MassMutual.
Initial Minimum Premium Requirements. The minimum initial premium for the
- ------------------------------------
variable rider to Your Certificate is a $500 lump sum premium payment. Your
election of the variable rider activates the minimum premium requirement.
Underwriting. MassMutual does not require underwriting prior to issuance of the
- ------------
variable rider. However, before issuing any Certificate We will require
satisfactory evidence of insurability, except under a guaranteed issue
underwriting approach. (For details see "Death Benefit Under The Policy.")
<PAGE>
What is the Account Value of the Policy? The Account Value is determined by the
- ---------------------------------------
amount and frequency of premium payments, the investment experience of the
Divisions chosen by the Policyowner (the Variable Account Value), the interest
earned on Account Value allocated to the GPA (the Fixed Account Value), and any
Withdrawals or charges imposed in connection with the Policy. The Policyowner
bears the investment risk of any reduction in value of the underlying assets of
the Divisions but also may benefit from any appreciation in value. (For details
see "Account Value.")
What are the Divisions of the Separate Account? The Separate Account has sixteen
- ----------------------------------------------
Divisions: the MML Equity Index Division, the Oppenheimer Money Division, the
Oppenheimer Bond Division, the Oppenheimer Strategic Bond Division, the
Oppenheimer High Income Division, the Oppenheimer Growth & Income Division, the
Oppenheimer Multiple Strategies Division, the Oppenheimer Growth Division, the
Oppenheimer Capital Appreciation Division, the Oppenheimer Global Division, the
Panorama Total Return Division, the Panorama Growth Division, the Panorama
International Equity Division, the Panorama LifeSpan Capital Appreciation
Division, the Panorama LifeSpan Balanced Division, and the Panorama LifeSpan
Diversified Income Division. Each Division invests only in shares of a single
investment company or a single series of an investment company. The Divisions
are intended to provide money to pay benefits under the Policy but do not
guarantee a minimum interest rate or guarantee against asset depreciation. (For
details see "The Separate Account.")
What is the Guaranteed Principal Account ("GPA")? As an alternative to the
- ------------------------------------------------
Separate Account, the Policyowner may allocate Net Premium or transfer Account
Value to the GPA. Amounts so allocated or transferred become part of
MassMutual's general account assets. The Policyowner is not entitled to share in
the investment experience of those assets. Rather, MassMutual guarantees a rate
of return on the allocated amount equal to 3%. Although MassMutual is not
obligated to credit interest at a rate higher than this minimum, it may declare
a higher rate applicable for such periods as it deems appropriate. (For details
see "The Guaranteed Principal Account.")
Is the level of the Death Benefit guaranteed? There are two Death Benefit
- --------------------------------------------
options - Death Benefit Option A and Death Benefit Option B. The Death Benefit
equals the greater of the Policy's Selected Face Amount for the Policy Year of
death (plus the Account Value on the date of death if Death Benefit Option B is
elected) or the Minimum Face Amount in effect on the date of death of the
Insured. Death Benefit proceeds under either Option will be reduced by any
outstanding Policy Debt and unpaid Monthly Deductions and increased by the
portion of the Monthly Deduction attributable to death benefit coverage after
the Insured's death. So long as the Policy remains in force, the Death Benefit
You have selected will be available. (For details see "Death Benefit Under The
Policy.")
Is the Death Benefit subject to income taxes? A Death Benefit paid under our
- --------------------------------------------
Policies is usually fully excludable from the gross income of the Beneficiary
for federal income tax purposes. (For details see "Federal Income Tax
Considerations" - "Policy Proceeds, Premiums and Loans.")
Does the Policy have a Cash Surrender Value? The Policyowner may surrender the
- -------------------------------------------
Policy at any time and receive its Account Value less any Policy Debt. There is
no surrender charge on full surrenders. Partial withdrawals are allowed subject
to certain restrictions and are subject to a withdrawal charge of the lesser of
2% of the Account Value or $25.00 which is deducted from each Withdrawal. (For
details see "Withdrawals.") The Cash Surrender Value of a Policy fluctuates with
the investment performance of the Divisions in which the Policy has Account
Value, and with the interest rate on the amount held in the GPA. It may increase
or decrease daily. For federal income tax purposes, the Policyowner usually is
not taxed on increases in the Cash Surrender Value until the Policy is
surrendered. In connection with certain
<PAGE>
Withdrawals of Account Value and loans on the Policy, however, the Policyowner
may be taxed on all or a part of the amount distributed. (For details see "Cash
Surrender Value" and "Federal Income Tax Considerations" - "Policy Proceeds,
Premiums and Loans.")
What is a modified endowment contract? A modified endowment contract (as defined
- -------------------------------------
by the Internal Revenue Code) is a life insurance policy under which the
premiums paid during the first seven contract years exceed the cumulative
premiums payable under a policy providing for guaranteed benefits upon the
payment of seven level annual premiums. Certain changes to a life insurance
policy can subject it to re-testing for a new seven-year period. During an
insured's lifetime, distributions from a modified endowment contract, including
collateral assignments, loans, and withdrawals, are taxable to the extent of any
income in the contract and may also incur a penalty tax if the Policyowner is
not 59-1/2. (For details see "Modified Endowment Contracts.")
Can this Policy become a modified endowment contract? Since this Policy permits
- ----------------------------------------------------
flexible premium payments, it may become a modified endowment contract. The
Company has the systems capacity to test a Policy at issue to determine whether
it will be classified as a modified endowment contract ("MEC"). This test
examines the Policy for MEC status at the time of issue. The Company has further
safeguards in place to monitor whether a Policy may become a modified endowment
contract after issue. (For details see "Federal Income Tax Considerations" -
"Modified Endowment Contracts.")
What about Premiums? The minimum initial premium for the variable rider to the
- -------------------
Certificate is $500 which must be paid by You in a lump sum. Since the Policy is
a "flexible premium policy" You may choose to pay more or less than the planned
premium.
Your Employer is not required to pay a minimum initial premium for Your Policy.
However, the Employer must pay the estimated premium amount sufficient to pay
the Premium Deduction and Monthly Deduction(s) under Your Policy for the term
selected by Your Employer. The term selected by Your Employer can be one month,
one quarter, or semi-annual or annual and is called a Modal Term. Your Modal
Term is specified in Your Policy's schedule page. The premium paid for the Modal
Term is called a Modal Term Premium. The Modal Term Premium for a Policy is
based upon its cost of insurance rates, Sales Load, State Premium Tax Charge,
DAC Tax Charge, and the Administrative Charge. The method of calculating the
Modal Term Premium is shown in Appendix B. The planned Employer paid premium is
the Modal Term Premium for Your Policy.
Once the Policy is in force, the Modal Term selected by the Employer becomes the
basis for the Policy's premium billing. We will forward billing statements to
the Employer for each Modal Term. The Employer may change the Modal Term at any
time upon written request; however, it may not be changed to a term of less than
one month.
Once the Policyowner leaves his or her association with the Employer, the
Policyowner may choose to continue the Policy. If the Policyowner chooses to
continue the Policy, all of the rights and obligations previously held by the
Employer will be vested in the Policyowner. In this event, MassMutual will
discontinue billing for Your Modal Term premium. (For details see "General
Provisions Of The Policy" - "Premiums.")
When are Initial Premiums allocated to the Guaranteed Principal Account or the
- ------------------------------------------------------------------------------
Separate Account? If Your Certificate has an unexpired Free Look Period at the
- ----------------
time You elect the variable account rider, the initial Net Premium (i.e.,
premium paid less the Premium Deduction) will be initially allocated to the
Guaranteed Principal Account during the Free Look Period (see "Free Look
Provision"). At the end of the
<PAGE>
Free Look Period, the Net Premium paid by You is allocated to the GPA and/or
Divisions according to Your instructions in the Application and subject to
MassMutual's then current allocation rules. Billed Modal Term Premiums are
always initially allocated to the GPA.
How can the Net Premium and the Account Value of the Policy be allocated among
- ------------------------------------------------------------------------------
the Guaranteed Principal Account and the Divisions? Premiums paid by You under
- --------------------------------------------------
the Policy may be allocated to the Divisions (maximum of eight at one time) and
the GPA. You choose the percentages of Your premiums to be allocated to the
Divisions and/or the GPA when You elect the variable rider to Your Certificate.
A Policyowner may choose any whole-number percentages as long as the total is
100%. The allocation of future Net Premiums may be changed at any time without
charge. Billed Modal Term Premiums payable by Your Employer are always allocated
to the GPA. Transfers from the GPA are subject to certain restrictions. (For
details see "Transfers.")
The Account Value of the Policy may be transferred between the GPA and/or the
Divisions by written request. Account Value may be transferred by dollar amount
or by whole-number percentage, subject to restrictions. Only eight Divisions
plus the GPA are available to a Policyowner at any one time. To allocate Net
Premiums or to transfer Account Value to a ninth Division, the Policyowner must
transfer 100% of the Account Value from one or more of the eight Divisions to
which allocations are currently made. Transfers from the GPA are also subject to
certain restrictions. (For details see "The Separate Account" and "Account Value
and Cash Surrender Value - Account Value.") Automated Account Re-Balancing and
Automated Account Value Transfer is also available. (For details see "Automated
Account Re-Balancing" and "Automated Account Value Transfer.")
How long will the Policy remain in force? The Policy does not automatically
- ----------------------------------------
terminate for failure of the Employer or You to pay planned Policy premiums or
Modal Term Premiums. Conversely, payment of these amounts does not guarantee the
Policy will remain in force. The Policy terminates only when the Account Value
less any Policy Debt is insufficient to pay the Monthly Deduction, and a grace
period expires without sufficient payment. (For details see "Termination and
Grace Period.")
Are there charges against the Policy? Certain charges are made against the
- ------------------------------------
Policy. Before allocation of any premium to the Account Value, a percentage of
each premium paid is deducted for expenses related to the sale and distribution
of the Policies. These charges are called sales loads and the percentages may
vary depending on group enrollment procedures selected by the Employer, total
group premium paid by the Employer, the size of the Employer group, and other
factors. This charge is specified on the schedule page to your Policy and is
computed as a percentage of premiums paid by either You or the Employer. The
charge is guaranteed not to exceed 5% of premiums. Once the charge is set, it
will never change for any of the Policies issued to individuals under the same
group.
There are two additional deductions from gross premiums: (1) for state premium
taxes; and (2) for Deferred Acquisition Cost ("DAC") tax expense. Each premium,
net of these charges, is allocated to the GPA or the Divisions and becomes a
part of the Account Value. (For details see "Deductions From Premium.")
Certain monthly charges are generally deducted directly from the Policy's
Account Value on each Monthly Calculation Date. These Monthly Deductions are
equal to the sum of a charge for cost of insurance protection, the
Administrative Charge, and a charge for the cost of any additional benefits
provided by rider.
<PAGE>
Some deductions are made on a daily basis against the assets of the Divisions. A
daily charge calculated at a current annual rate of 0.75% of the value of the
assets of each Division is charged for mortality and expense risks. In no event
will this rate exceed 1.00%. Similarly, tax assessments are calculated daily.
Currently, We are not making any charges for income taxes, but We may make
charges in the future against the Divisions for federal income taxes
attributable to them.
Withdrawals of Account Value are permitted subject to certain restrictions. A
charge equal to the lesser of $25 or 2% of the amount withdrawn is imposed for
each Withdrawal.
(For details see "Charges Under The Policy" and "Federal Income Tax
Considerations.")
What is the loan privilege and how does a loan affect the Policy's Death Benefit
- --------------------------------------------------------------------------------
and Cash Surrender Value? While the Policy is in force, a loan may be made on
- ------------------------
the Policy, in a maximum amount equal to; 1) 90% of Your Account Value at the
time of the loan; less 2) any outstanding Policy Debt before the new loan; less
3) interest on the loan being made and on other outstanding loan(s) to Your next
Policy Anniversary Date; less 4) an amount equal to one plus the number of
Monthly Calculation Dates remaining in Your Modal Term multiplied by Your most
recent Monthly Deduction. (The maximum loan amount may be different if required
by state law.) (For details see "Policy Loan Privilege.")
Are dividends paid on the Policy? The Policy is participating, therefore, it may
- --------------------------------
share in any dividends that MassMutual pays. Dividends are based on the Policy's
contribution to any divisible surplus of MassMutual. Any dividends will be
payable on the Policy Anniversary Date. MassMutual does not expect that any
dividends will be paid under the Policies. (For details see "Dividends.")
Do I have a right to cancel? Under the Free Look Provision, the owner of a
- ---------------------------
Certificate has a limited right to return the Certificate and receive a refund.
This right expires ten days after You receive the Certificate (or a longer
period if required by state law). The Certificate may be returned to Our Home
Office, to any of Our agency offices, or to the agent who sold You the
Certificate. Your Policy is a Certificate to which a variable account rider has
been added. Therefore, Your election of the rider does not affect the duration
of the Certificate's Free Look Period. (For details see "Free Look Provision.")
CHARGES UNDER THE POLICY
Certain charges are deducted to compensate MassMutual for providing the
insurance benefits under the Policy, for administering the Policy, for assuming
certain risks, and for incurring certain expenses in distributing the Policy.
DEDUCTIONS FROM PREMIUMS
Prior to the allocation of the premium payment to the GPA or the selected
Divisions, a deduction as a percentage of premium is made for the sales load,
state premium taxes, and the DAC tax expense ("Premium Deduction").
Sales Load. The sales load component of the premium varies for each Employer
- ----------
group depending on group enrollment procedures selected by the Employer, total
group premium paid by the Employer, the size of the Employer group, and other
factors. The sales load is generally 0.75% of premiums and is guaranteed not to
exceed 5% of premiums. All Policies within an Employer group will have the same
sales load expressed as a percentage of premiums paid. The charge applies to
premiums paid under the Policy by either You or Your Employer. Once the charge
is set, it will never change for any of the Policies issued
<PAGE>
to individuals under the same group. The sales load percentage appears on your
Policy schedule page. There are no back-end surrender charges or contingent
deferred sales loads applicable to the Policies.
The amount of the sales load in a Policy Year is not necessarily related to our
actual sales expenses for that particular year. To the extent that sales
expenses are not covered by the sales load, they will be recovered from
MassMutual surplus, including any amounts derived from the mortality and expense
risk charge or the cost of insurance charge. (For a discussion of the
commissions paid under the Policy, see "Sales And Other Agreements - Commission
Schedule.")
State Premium Tax Charge. Various states apply premium taxes at various rates.
- ------------------------
We currently deduct a percentage equal to the applicable state rate of each
premium to cover premium taxes assessed against MassMutual by the various
states. The applicable state rate will be either the Massachusetts rate or a
higher rate. The current state premium tax charge ranges from 2.0% to 4% of each
premium. This charge may increase or decrease to reflect either any change in
the tax or changes of residence. The Policyowner should notify MassMutual of any
change of residence. Any change in this charge would be effective immediately.
Deferred Acquisition Cost ("DAC") Tax Charge. We currently deduct 0.25% of each
- --------------------------------------------
premium to cover a federal premium tax assessed against MassMutual. This charge
relates to MassMutual's federal income tax burden, under Internal Revenue Code
Section 848, resulting from the receipt of premiums. This charge may be
increased or decreased by Us.
ACCOUNT VALUE CHARGES
A monthly Administrative Charge and a cost of insurance charge are generally
deducted from the Fixed Account Value on each Monthly Calculation Date. If the
Fixed Account Value is less than the Administrative Charge and cost of insurance
charge, then the deficiency is deducted from the Variable Account Value.
Administrative Charge. A monthly fee is deducted to compensate MassMutual for
- ---------------------
costs incurred in providing certain administrative services including premium
collection, record keeping, processing claims, and communicating with
Policyowners. Currently, the charge is $5.25 per month for each Policy. While
this charge may increase or decrease, the maximum monthly Administrative Charge
is $9 per month. (The maximum charge may be different if required by state law.)
We deduct this charge from Your Policy's Fixed Account Value each month. If
there are insufficient Fixed Account Values to pay the charge, We will deduct
the deficiency from Your Policy's Variable Account Value pro rata according to
Your Variable Account Value in the Divisions.
Charge for Cost of Insurance Protection. A charge for the cost of insurance
- ---------------------------------------
protection (also called a Mortality Charge in the Policy) is generally deducted
on each Monthly Calculation Date and is based on the Insured's age and group
rating. We deduct this charge from Your Policy's Fixed Account Value. If there
are insufficient Fixed Account Values to pay the charge, We will deduct the
deficiency from Your Policy's Variable Account Value pro rata according to Your
Variable Account Value in the Divisions. The charge varies monthly because it is
determined by multiplying the applicable cost of insurance rates by the amount
at risk each Policy month. The maximum monthly cost of insurance charge for each
$1,000 of insurance protection provided is shown in the Table of Maximum Monthly
Mortality Charges in the Policy. MassMutual may charge less than these maximum
charges. Any change in these charges will apply to all Policies in the same
group and class.
<PAGE>
SEPARATE ACCOUNT CHARGES
Charges for Mortality and Expense Risks. We charge the Divisions for the
- ---------------------------------------
mortality and expense risks We assume. We deduct a daily charge at a current
effective annual rate of 0.75% of the value of each Division's assets that come
from the Policy. While this charge may increase or decrease, the maximum charge
is 1.00% annually. The charges are deducted daily and paid quarterly against the
Separate Account divisions.
The mortality risk We assume is that the group of lives insured under our
Policies may, on average, live for shorter periods of time than We estimated.
The expense risk We assume is that our costs of issuing and administering
Policies may be more than We estimated.
If all the money We collect from this charge is not needed to cover Death
Benefits and expenses, it will be our gain and will be used for any proper
purpose, including payment of sales commissions. Conversely, even if the money
We collect is insufficient, We will provide for all Death Benefits and expenses.
Charges for Federal Income Taxes. We do not currently make any charge against
- --------------------------------
the Divisions for federal income taxes attributable to them. We may make such a
charge eventually, however, in order to provide for the future federal income
tax liability of the Divisions. (For more information on charges for federal
income taxes, see "Federal Income Tax Considerations" - "MassMutual" - "Tax
Status.")
Fund Charges. MassMutual serves as investment manager of the MML Equity Index
- ------------
Fund pursuant to an investment management agreement which provides for the Fund
to pay MassMutual a quarterly fee at the annual rate of 0.40% of the first $100
million of net assets, 0.38% of the next $150 million, and 0.36% of net assets
in excess of $250 million. MassMutual has entered into a sub-advisery agreement
with Mellon Equity Associates ("Mellon Equity"), an indirect wholly owned
subsidiary of Mellon Bank Corporation, whereby Mellon Equity manages the
investment and reinvestment of the assets of the MML Equity Index Fund as
sub-adviser to the Fund. For providing its services under the sub-advisery
agreement with MassMutual, Mellon Equity will receive a monthly fee, computed
daily at an annual rate based on the collective daily net assets of the MML
Equity Index Fund. The annual fee paid to Mellon Equity is as follows: 0.09% for
the first $100 million of net assets, 0.07% of the next $150 million of net
assets, and 0.05% of net assets over $250 million. No fees were paid to either
MassMutual or Mellon Equity by the MML Equity Index Fund during 1996 because the
Fund did not commence operations until 1997.
MassMutual is also the investment adviser to MassMutual Corporate Investors and
MassMutual Participation Investors, closed-end investment companies; certain
wholly-owned subsidiaries of MassMutual; and various employee benefit plans.
MassMutual also serves as the collateral co-manager for MassMutual Carlson CBO,
N.V.
Oppenheimer Funds, Inc. ("OFI") serves as investment manager of each of the
Oppenheimer Funds pursuant to Investment Management Agreements, each of which
provides for the Oppenheimer Fund to pay OFI a monthly management fee computed
separately on the net assets of each Fund as of the close of business each day.
The management fee rates are as follows: (i) for Money Fund: 0.450% of the first
$500 million of net assets, 0.425% of the next $500 million, 0.400% of the next
$500 million, and 0.375% of net assets over $1.5 billion; (ii) for Capital
Appreciation Fund, Growth Fund, Growth & Income Fund, Multiple Strategies Fund,
and Global Securities Fund: 0.75% of the first $200 million of net assets, 0.72%
of the next $200 million, 0.69% of the next $200 million, 0.66% of the next $200
million, and 0.60% of net assets over $800 million; and (iii) for High Income
Fund, Bond Fund, and Strategic Bond Fund: 0.75% of the first $200 million of net
assets, 0.72% of the next $200 million, 0.69% of the next $200 million, 0.66% of
the next $200 million, 0.60% of
<PAGE>
the next $200 million, and 0.50% of net assets over $1 billion. During 1996 OFI
earned investment management fees of $445,899 from the Money Fund, $3,382,840
from the Capital Appreciation Fund, $1,139,255 from the Growth Fund, $160,819
from the Growth & Income Fund, $3,132,569 from the Multiple Strategies Fund,
$3,395,740 from the Global Securities Fund, $1,177,754 from the High Income
Fund, $2,188,350 from the Bond Fund, and $618,338 from the Strategic Bond Fund.
OFI also serves as investment manager of each of the Portfolios of the Panorama
Fund pursuant to Investment Management Agreements, each of which provides for
the Portfolio to pay OFI a monthly management fee computed separately on the net
assets of each Fund as of the close of business each day. The management fee
rates are as follows: (i) for the Total Return Portfolio: 0.625% of the first
$600 million of net assets, 0.45% of net assets over $600 million; and (ii) for
the Growth Portfolio: 0.625% of the first $300 million of net assets, 0.500% of
the next $100 million, and 0.450% of net assets over $400 million; and (iii) for
the International Equity Portfolio: 1.00% of the first $250 million of net
assets and 0.90% of net assets over $250 million; and (iv) for the LifeSpan
Capital Appreciation Portfolio and LifeSpan Balanced Portfolio: 0.85% of the
first $250 million of net assets and 0.75% of net assets in excess of $250
million, and (v) for the LifeSpan Diversified Income Portfolio: 0.75% of the
first $250 million of net assets and 0.65% of net assets in excess of $250
million. During 1996 OFI earned investment management fees of $5,817,245 for the
Total Return Portfolio, $2,801,667 for the Growth Portfolio, $569,471 for the
International Equity Portfolio, $281,564 for the LifeSpan Capital Appreciation
Portfolio, $355,893 for the LifeSpan Balanced Portfolio, and $171,569 for the
LifeSpan Diversified Income Portfolio.
OFI, located at Two World Trade Center, New York, NY 10048-0203, has operated as
an investment adviser since April 30, 1959. It and its affiliates currently
advise U.S. investment companies with assets aggregating over $62 billion as of
December 31, 1996, and having more than 3 million shareholder accounts. OFI is
owned by Oppenheimer Acquisition Corp., a holding company owned in part by
senior management of OFI, and ultimately controlled by MassMutual.
OFI has entered into sub-advisery agreements with other investment advisers
under which the sub-adviser manages the investments of one or more of the
underlying Portfolios of the Panorama Fund. OFI has entered into investment
sub-advisery agreements with three-sub advisers to assist in the selection of
portfolio investments for the Panorama Fund's International Equity Portfolio,
LifeSpan Diversified Income Portfolio, LifeSpan Balanced Portfolio, and LifeSpan
Capital Appreciation Portfolio.
Babson-Stewart Ivory International ("Babson-Stewart") located in Cambridge,
Massachusetts is the sub-adviser to the Panorama Fund's International Equity
Portfolio and the international stock components of the LifeSpan Balanced
Portfolio and the LifeSpan Capital Appreciation Portfolio. Babson-Stewart is a
partnership formed in 1987 between David L. Babson & Company, Inc., an indirect
wholly-owned subsidiary of MassMutual, and Stewart Ivory & Company, Ltd.,
located in Edinburgh, Scotland. For providing its services under the
sub-advisery agreement with OFI, Babson-Stewart will receive a monthly fee from
OFI, computed daily at an annual rate based on the average daily net assets
of the International Equity Fund and the portion of the LifeSpan Capital
Appreciation Portfolio and LifeSpan Balanced Portfolio allocated to the
international equity component. The annual fee paid to Babson-Stewart by OFI is
as follows: 0.75% for the first $10 million of net assets, 0.625% of the next
$15 million of net assets, 0.50% of the next $25 million of net assets, and
0.375% of net assets over $50 million. For purposes of determining the
break-points in the sub-advisery fee, the assets of the International Equity
Portfolio, the international equity component of the LifeSpan Capital
Appreciation Portfolio and the International Equity component of the LifeSpan
Balanced Portfolio are not aggregated. In 1996, Babson-Stewart received $486,204
for managing the assets of the International Equity Portfolio.
<PAGE>
BEA Associates ("BEA"), located in New York, New York is the sub-adviser to the
high yield bond component of the Panorama Fund's LifeSpan Diversified Income
Portfolio, the LifeSpan Balanced Portfolio, and the LifeSpan Capital
Appreciation Portfolio. For providing its services under the sub-advisory
agreement with OFI, BEA will receive a monthly fee from OFI, computed daily at
an annual rate based on the collective average daily net assets of the portion
of the LifeSpan Diversified Income LifeSpan Capital Appreciation, and LifeSpan
Balanced Portfolios allocated to the high yield bond component. The annual fee
paid to BEA is as follows: 0.45% for the first $25 million of collective net
assets, 0.40% of the next $25 million of collective net assets, 35% of the next
$50 million of collective net assets, and 0.25% of collective net assets over
$100 million. For purposes of calculating the fee payable to BEA, the collective
net assets of the portion of the LifeSpan Portfolios allocated to the high yield
bond component are aggregated with that portion of the net assets of the
Oppenheimer Series Fund, Inc. managed by BEA.
Pilgrim, Baxter & Associates ("Pilgrim Baxter") is the sub-adviser to the small
cap component of the Panorama Fund's LifeSpan Balanced Portfolio and the
LifeSpan Capital Appreciation Portfolio. For providing its services under the
sub-advisory agreement with OFI, Pilgrim Baxter will receive a monthly fee from
OFI, computed daily at an annual rate based on the collective average daily net
assets of the portion of the LifeSpan Balanced Portfolio and LifeSpan Capital
Appreciation Portfolio allocated to the small cap component. The annual fee paid
to Pilgrim Baxter is 0.60% of collective net assets. For purposes of calculating
the fee payable to Pilgrim Baxter, the collective net assets of the portion of
the LifeSpan Portfolios allocated to the small cap component are aggregated with
that portion of the net assets of the Oppenheimer Series Fund, Inc. managed by
Pilgrim Baxter.
MML Series Investment Fund Annual Expenses for 1996
(as a percentage of the average net assets of a Fund)
<TABLE>
<CAPTION>
Fund
----
Management Fees Other Expenses Operating
--------------- -------------- ---------
Expenses
--------
<S> <C> <C> <C>
MML Equity Index Fund 0.40%(1) 0.11%(1) 0.51%(1)
</TABLE>
(1) The MML Equity Index Fund had no operating expenses in 1996 since it had not
yet commenced operations. These figures represent MassMutual's estimate of the
Fund Operating Expenses for the MML Equity Index Fund in 1997. MassMutual has
agreed to bear the expenses of the MML Equity Index Fund (other than the
management fee, interest, taxes, brokerage commissions and extraordinary
expenses) in excess of 0.11% of average daily net asset value of the Fund
through April 30, 1998. MassMutual expects that it will be required to reimburse
the expenses of the MML Equity Index Fund pursuant to this undertaking in 1997.
Oppenheimer Variable Account Funds Annual Expenses for 1996
(as a percentage of the average net assets of a Fund)
<TABLE>
<CAPTION>
Total Fund
----------
Management Fees Other Expenses Operating
--------------- -------------- ---------
Expenses
--------
<S> <C> <C> <C>
Oppenheimer Global Securities Fund 0.73% 0.08% 0.81%
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Oppenheimer Capital Appreciation Fund 0.72% 0.03% 0.75%
Oppenheimer Growth Fund 0.75% 0.04% (1) 0.79% (1)
Oppenheimer Growth & Income Fund 0.75% 0.25% 1.00%
Oppenheimer Multiple Strategies Fund 0.73% 0.04% 0.77%
Oppenheimer High Income Fund 0.75% 0.06% 0.81%
Oppenheimer Strategic Bond Fund 0.75% 0.10% 0.85%
Oppenheimer Bond Fund 0.74% 0.04% 0.78%
Oppenheimer Money Fund 0.45% 0.04% 0.49%
</TABLE>
(1) In 1996, OFI, on a voluntary one-time basis, agreed to reimburse the
Oppenheimer Growth Fund an amount equal to 0.02% of average daily net asset
value due to non-recurring expenses incurred in connection with the Jefferson
Pilot Appreciation Fund, Inc. acquisition. Absent this reimbursement, the Other
Expenses for this Fund would have been 0.06% and the Total Operating Expenses
would have been 0.81%. OFI does not anticipate making any expense reimbursements
to this Fund in 1997.
Panorama Series Fund, Inc. Annual Expenses for 1996
(as a percentage of the average net assets of a Portfolio)
<TABLE>
<CAPTION>
Total Fund
----------
Management Fees Other Expenses Operating
--------------- -------------- ---------
Expenses
--------
<S> <C> <C> <C>
Panorama Total Return Portfolio 0.55% 0.0% 0.55%
Panorama Growth Portfolio 0.57% 0.01% 0.58%
Panorama International Equity Portfolio 1.00% 0.21% 1.21%
Panorama LifeSpan Diversified Income Portfolio 0.75% 0.32% 1.07%
Panorama LifeSpan Balanced Portfolio 0.85% 0.32% 1.17%
Panorama LifeSpan Capital Appreciation Portfolio 0.85% 0.45% 1.30%
</TABLE>
Additional and more detailed information concerning the MML Funds, the
Oppenheimer Funds, and the Panorama Fund's Portfolios, including information
about the other expenses of such Funds and Portfolios, may be found in the
accompanying Prospectuses for the MML Trust, the Oppenheimer Trust, and the
Panorama Fund.
THE SEPARATE ACCOUNT
The Separate Account was established on July 13, 1988 as a separate investment
account of MassMutual by MassMutual's Board of Directors in accordance with the
provisions of Section 132G of Chapter 175 of the Massachusetts General Laws.
The Separate Account is registered under the Investment Company Act of 1940, as
amended, as a unit investment trust. Registration does not involve supervision
of the management or investment practices or policies of either the Separate
Account or of MassMutual. Under Massachusetts law, however, both MassMutual and
the Separate Account are subject to regulation by the Division of Insurance of
the Commonwealth of Massachusetts. Designated segments of the Separate Account
will be used to receive and invest premiums for other variable life insurance
policies issued by MassMutual. Such a segment, the GVUL Segment, has been
established for the Policy.
<PAGE>
Although the assets of the Separate Account are assets of MassMutual, that
portion of the Separate Account assets equal to the reserves and other
liabilities of the Separate Account attributable to the Policies may not be used
to satisfy any obligations that may arise out of any other business We may
conduct. They may, however, become subject to liabilities arising from other
variable life insurance policies which the Separate Account funds. In addition,
We may from time to time, at our discretion, transfer to Our general account
those assets which exceed the reserves and other liabilities of the Separate
Account. Such transfers will not adversely affect the Separate Account.
Income, realized gains or losses, and unrealized gains or losses from each
Division are credited to or charged against that Division without regard to any
of our other income, gains, or losses.
MassMutual may accumulate in the Separate Account the charge for expense and
mortality risks, the Monthly Deduction assessed against the Policy and
investment results applicable to those assets that are in excess of net assets
supporting the Policies.
Investment of the Separate Account. The designated segment of the Separate
- ----------------------------------
Account has sixteen Divisions attributable to the Policy. Each Division invests
in shares of either the MML Trust, the Oppenheimer Trust, or the Panorama Fund.
The Divisions of the Separate Account are:
The MML Equity Index Division - Amounts credited to this Division are invested
in shares of MML Equity Index Fund, or its successor.
The Oppenheimer Money Division - Amounts credited to this Division are invested
in shares of Oppenheimer Money Fund, or its successor.
The Oppenheimer Bond Division - Amounts credited to this Division are invested
in shares of Oppenheimer Bond Fund, or its successor.
The Oppenheimer Strategic Bond Division - Amounts credited to this Division are
invested in shares of Oppenheimer Strategic Bond Fund, or its successor.
The Oppenheimer High Income Division - Amounts credited to this Division are
invested in shares of Oppenheimer High Income Fund, or its successor.
The Oppenheimer Growth & Income Division - Amounts credited to this Division are
invested in shares of Oppenheimer Growth & Income Fund, or its successor.
The Oppenheimer Multiple Strategies Division - Amounts credited to this Division
are invested in shares of Oppenheimer Multiple Strategies Fund, or its
successor.
The Oppenheimer Growth Division - Amounts credited to this Division are invested
in shares of Oppenheimer Growth Fund, or its successor.
The Oppenheimer Capital Appreciation Division - Amounts credited to this
Division are invested in shares of Oppenheimer Capital Appreciation Fund, or its
successor.
<PAGE>
The Oppenheimer Global Securities Division - Amounts credited to this Division
are invested in shares of Oppenheimer Global Securities Fund, or its successor.
The Panorama Total Return Division - Amounts credited to this Division are
invested in shares of the Panorama Total Return Portfolio, or its successor.
The Panorama Growth Division - Amounts credited to this Division are invested in
shares of the Panorama Growth Portfolio, or its successor.
The Panorama International Equity Division - Amounts credited to this Division
are invested in shares of the Panorama International Equity Portfolio, or its
successor.
The Panorama LifeSpan Capital Appreciation Division - Amounts credited to this
Division are invested in shares of the Panorama LifeSpan Capital Appreciation
Portfolio, or its successor.
The Panorama LifeSpan Balanced Division - Amounts credited to this Division are
invested in shares of the Panorama LifeSpan Balanced Portfolio, or its
successor.
The Panorama LifeSpan Diversified Income Division - Amounts credited to this
Division are invested in shares of the Panorama LifeSpan Diversified Income
Portfolio, or its successor.
The shares of the underlying Fund purchased by each Division will be held by
MassMutual as custodian of the Separate Account.
Although there are currently sixteen Divisions available to a Policyowner, a
Policyowner may allocate Account Value to no more than eight Divisions at any
one time. To allocate Net Premium or to transfer Account Value to a ninth
Division which does not have Account Value allocated to it, a Policyowner must
transfer 100% of the Account Value from one or more of the eight "active"
Divisions to which allocations are currently made.
MML Equity Index Fund (the "MML Fund") is a separate series of shares of MML
Series Investment Fund (the "MML Trust"), a no load, open-end management
investment company. MassMutual acts as investment manager to each of the MML
Funds which are part of the MML Trust, including the MML Equity Index Fund.
MassMutual has entered into an investment sub-advisery agreement with Mellon
Equity Associates ("Mellon Equity") providing for Mellon Equity to manage the
investment and reinvestment of assets with respect to the management of the MML
Equity Index Fund. Mellon Equity is an indirect subsidiary of Mellon Bank
Corporation and is located in Pittsburgh, Pennsylvania. As of December 31, 1996,
Mellon Equity and its employees managed approximately $11 billion and served as
the investment adviser or sub-adviser of 9 other investment companies.
MassMutual and Mellon Equity are registered as investment advisers under the
Investment Advisers Act of 1940.
OppenheimerFunds, Inc. ("OFI") acts as investment manager to the Oppenheimer
Variable Account Funds (the "Oppenheimer Trust") and the Panorama Series Fund,
Inc. (the "Panorama Fund"). The Oppenheimer Money Fund, Oppenheimer Bond Fund,
Oppenheimer Strategic Bond Fund, Oppenheimer High Income Fund, Oppenheimer
Growth & Income Fund, Oppenheimer Multiple Strategies Fund, Oppenheimer Growth
Fund, Oppenheimer Capital Appreciation Fund, and Oppenheimer Global Fund are
part of the Oppenheimer Trust, an open-end, diversified, management investment
company, which is available to act as the investment vehicle for separate
accounts for variable insurance policies offered by insurance
<PAGE>
companies. The Panorama Total Return Portfolio, Panorama Growth Portfolio,
Panorama International Equity Portfolio, Panorama LifeSpan Capital Appreciation
Portfolio, Panorama LifeSpan Balanced Portfolio, and Panorama LifeSpan
Diversified Income Portfolio are part of the Panorama Series Fund, Inc., an
open-end, diversified, management investment company, which is available to act
as the investment vehicle for separate accounts for variable insurance policies
offered by insurance companies.
OFI has entered into investment sub-advisery agreements with three sub-advisers
to assist in the selection of portfolio investments for the Panorama Fund's
International Equity Portfolio, LifeSpan Diversified Income Portfolio, LifeSpan
Balanced Portfolio, and LifeSpan Capital Appreciation Portfolio. Babson-Stewart
Ivory International ("Babson-Stewart") located in Cambridge, Massachusetts is
the sub-adviser to the International Equity Portfolio and the international
stock components of the LifeSpan Balanced Portfolio and the LifeSpan Capital
Appreciation Portfolio. Babson-Stewart is a partnership formed in 1987 between
David L. Babson & Company, Inc., an indirect wholly-owned subsidiary of
MassMutual, and Stewart Ivory & Company, Ltd., located in Edinburgh, Scotland.
BEA Associates located in New York, New York is the sub-adviser to the high
yield bond component of the LifeSpan Diversified Income Portfolio, the LifeSpan
Balanced Portfolio, and the LifeSpan Capital Appreciation Portfolio. Pilgrim,
Baxter & Associates ("Pilgrim Baxter") is the sub-adviser to the small cap
component of the LifeSpan Balanced Portfolio and the LifeSpan Capital
Appreciation Portfolio. With respect to the Oppenheimer Trust Funds and those
Panorama Fund portfolios which do not utilize sub-advisers, OFI defines the
composition of each respective fund and portfolio, and furnishes advice and
recommendations with respect to the investments, investment policies and
purchase and sale of securities. OFI, Babson-Stewart, BEA Associates, and
Pilgrim Baxter are registered as investment advisers under the Investment
Advisers Act of 1940.
The MML Trust is a no load, open end management investment company registered
under the 1940 Act. The Oppenheimer Trust and the Panorama Fund are open-end,
diversified management investment companies registered under the 1940 Act. The
MML Trust consists of five MML Funds each of which has its own investment
objectives and policies. The Oppenheimer Trust consists of nine Oppenheimer
Funds, each of which has its own investment objectives and policies. The
Panorama Fund consists of seven portfolios, each of which has its own investment
objectives and policies. MassMutual maintains the MML Trust for the purpose of
providing vehicles for the investment of assets held in various separate
investment accounts, including the Separate Account, established by MassMutual
or by life insurance companies which are subsidiaries of MassMutual. The
Oppenheimer Trust and Panorama Fund were established for the purpose of
providing investment vehicles for investment only by variable life insurance
contracts and variable annuity contracts. Shares of the MML Funds are not
offered to the general public, but solely to separate investment accounts
established by MassMutual and life insurance company subsidiaries of MassMutual.
Shares of the Oppenheimer Trust and Panorama Fund are not offered to the general
public, but solely to insurance company separate accounts affiliated and
unaffiliated with MassMutual which fund variable annuities and variable life
insurance contracts.
INVESTMENT OBJECTIVES
The investment objective of MML Equity Index Fund is to provide investment
results that correspond to the price and yield performance of publicly traded
common stocks in the aggregate, as represented by the Standard & Poor's 500
Composite Stock Price Index. ("Standard & Poor's 500" and "S&P 500(C)" are
trademarks of The McGraw-Hill Companies, Inc., and have been licensed for use.
The Fund is not sponsored, endorsed, sold or promoted by Standard & Poor's or
The McGraw-Hill Companies, Inc.)
<PAGE>
The investment objective of the Oppenheimer Money Fund is to maximize current
income from investments in "money market" securities consistent with low capital
risk and maintenance of liquidity.
The investment objective of the Oppenheimer Bond Fund is to seek a high level of
current income from investment in high yield fixed-income securities rated "Baa"
or better by Moody's or "BBB" or better by Standard & Poor's. Secondarily, the
Fund seeks capital growth when consistent with its primary objective.
The investment objective of the Oppenheimer Strategic Bond Fund is to seek a
high level of current income principally derived from interest income from
investments in U.S. government securities, high yield fixed-income securities,
and foreign fixed income securities and to seek to enhance such income by
writing covered call options on debt securities.
The investment objective of the Oppenheimer High Income Fund is to earn a high
level of current income by investing primarily in a diversified portfolio of
high yield, fixed-income securities, including long-term debt obligations and
preferred stock issues believed by OFI, in its capacity as investment manager of
the Fund, not to involve undue risk. This Fund's investment policy is to assume
certain risks (described more fully in the attached prospectus for the
Oppenheimer Trust) in seeking high yield, which is ordinarily associated with
high risk securities, commonly known as "junk bonds," in the lower rating
categories of the established securities ratings services, and unrated
securities.
The investment objective of the Oppenheimer Growth & Income Fund is to seek a
high total return (which includes growth in the value of its shares as well as
current income) from equity and debt securities. From time to time this Fund may
focus on small to medium capitalization common stocks, bonds and convertible
securities.
The investment objective of the Oppenheimer Multiple Strategies Fund is to seek
a total investment return (which includes current income and capital
appreciation in the value of its shares) from investments in common stocks and
other equity securities, bonds and other debt securities, and "money market"
securities.
The investment objective of the Oppenheimer Growth Fund is to seek to achieve
capital appreciation by investing in securities of well-known established
companies (companies which have a history of earnings and dividends). The type
of securities in which this Fund invests will be primarily common stocks, as
well as securities having the investment characteristics of common stocks, such
as convertible preferred stock and convertible bonds.
The investment objective of the Oppenheimer Capital Appreciation Fund is capital
appreciation. The type of securities in which this Fund invests will be
primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock and
convertible bonds. In seeking this objective the Fund will emphasize investments
in securities of "growth-type" companies. Such companies are believed to have
relatively favorable long-term prospects for an increased demand for the
particular company's products or services.
The investment objective of the Oppenheimer Global Securities Fund is to seek
long-term capital appreciation through investing a substantial portion of its
invested assets in securities of foreign issuers, growth-type companies and
special investment opportunities (anticipated acquisitions, mergers or other
unusual developments) which are considered by OFI, in its capacity as investment
manager of the Funds, to have appreciation possibilities. The type of securities
in which this Fund invests will be primarily common stocks, as well as
securities having the investment characteristics of common stocks, such as
convertible
<PAGE>
preferred stock, convertible bonds and American Depository Receipts. Current
income is not an investment objective of the Oppenheimer Global Securities Fund.
The investment objective of the Panorama Total Return Portfolio is to seek to
maximize total investment return (including both capital appreciation and
income) principally by allocating its asset among stocks, corporate bonds, U.S.
Government securities and money market instruments according to changing market
conditions.
The investment objective of the Panorama Growth Portfolio is to seek long-term
growth of capital by investing primarily in common stocks with low
price-earnings ratios and better-than-anticipated earnings. Realization of
current income is a secondary consideration.
The investment objective of the Panorama International Equity Portfolio is to
seek long-term growth of capital by investing primarily in equity securities of
companies wherever located, the primary stock market of which is outside the
United States.
The investment objective of the Panorama LifeSpan Capital Appreciation Portfolio
is to seek long-term capital appreciation by investing in a strategically
allocated portfolio of equities and fixed income securities consisting primarily
of stocks. Current income is not a primary consideration.
The investment objective of the Panorama LifeSpan Balanced Portfolio is to seek
a blend of capital appreciation and income by investing in a strategically
allocated portfolio of stocks and bonds with a slightly stronger emphasis on
stocks.
The investment objective of the Panorama LifeSpan Diversified Income Portfolio
is to seek high current income, with opportunities for capital appreciation by
investing in a strategically allocated portfolio of equities and fixed income
securities consisting primarily of bonds.
The Separate Account purchases and redeems shares of the Funds at their net
asset value which is determined at the time of the receipt of the purchase order
or redemption request without the imposition of any sales or redemption charge.
Boston Safe Deposit and Trust Company, with its home office located at One
Boston Place, Boston, Massachusetts 02108 acts as custodian for the MML Equity
Index Fund. The Bank of New York, with its home office located at One Wall
Street, New York, NY 10015, acts as custodian for each of the Oppenheimer Funds.
State Street Bank and Trust Company, with its home office located at 225
Franklin Street, Boston, Massachusetts, 02110, acts as custodian for the
Panorama Fund and each of its Portfolios.
The assets of certain variable annuity separate accounts for which MassMutual or
an affiliate is the depositor are invested in shares of the MML Funds. Because
these separate accounts are invested in the same underlying MML Funds it is
possible that material conflicts could arise between Policyowners and owners of
the variable annuity contracts. Possible conflicts could arise if: (i) state
insurance regulators should disapprove or require changes in investment
policies, investment advisers or principal underwriters or if MassMutual should
be permitted to act contrary to actions approved by holders of the Policies
under rules of the Securities and Exchange Commission; (ii) adverse tax
treatment of the Policies or the variable annuity contracts would result from
utilizing the same underlying MML Funds; (iii) different investment strategies
would be more suitable for the variable annuity contracts than for the Policies;
or (iv) state insurance laws or regulations or other applicable laws would
prohibit the funding of both the Separate Account and other investment accounts
by the same MML Funds. The Board of Trustees of the MML Trust will follow
monitoring procedures which have been developed to determine whether material
conflicts
<PAGE>
have arisen. Such Board will have a majority of Trustees who are not interested
persons of the MML Trust or MassMutual and determinations whether or not a
material conflict exists will be made by a majority of such disinterested
Trustees. If a material irreconcilable conflict exists, MassMutual will take
such action at its own expense as may be required to cause the Separate Account
to be invested solely in shares of mutual funds which offer their shares
exclusively to variable life insurance separate accounts unless, in certain
cases, the holders of both the Policies and the variable annuity contracts vote
not to effect such segregation.
The Oppenheimer Trust and the Panorama Fund were established for use as an
investment vehicle by variable contract separate accounts such as the Separate
Account. Accordingly, it is possible that a material irreconcilable conflict may
develop between the interests of Policyowners and other separate accounts
investing in the Oppenheimer Trust or Panorama Fund. The Board of Trustees of
the Oppenheimer Trust (the "Trustees") and the Board of Directors of the
Panorama Fund (the "Directors") will monitor their respective investment company
for the existence of any such conflicts. If it is determined that a conflict
exists, the Trustees or the Directors, as the case may be, will notify
MassMutual, and appropriate action will be taken to eliminate such
irreconcilable conflicts. Such steps may include: (i) withdrawing the assets
allocable to some or all of the separate accounts from the particular
Oppenheimer Fund or Panorama Fund Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Oppenheimer
Fund or Panorama Fund Portfolio; (ii) submitting the question whether such
segregation should be implemented to a vote of all affected Policyowners; and
(iii) establishing a new registered management investment company or managed
separate account.
Rates of Return. Tables 1 and 2 show the Effective Annual Rates of Return and
- ---------------
One Year Total Returns, respectively, of the Funds based on the actual
investment performance (after deduction of investment management fees and direct
operation expenses). These rates of return do not reflect the mortality and
expense risk charges assessed against the Separate Account.
Table 3 shows the return of the Separate Account, after deduction of investment
management fees and direct operation expenses of the fund, and deduction of the
mortality and expense risk charges assessed against the Separate Account.
The returns in Tables 1, 2, and 3 do not reflect deduction from premiums for
Sales Load, State Premium Tax Charge, Deferred Acquisition Cost ("DAC") Tax
Charge, Administrative Charge tax, or Charge for Cost of Insurance Protection.
Therefore, these rates are not illustrative of how actual investment
performance will affect the benefit rates under the Policy. If these charges
were included, the return figures would be lower. The rates of return shown are
not necessarily indicative of future performance. They may be considered in
assessing the competence and performance of MassMutual, OFI, Mellon Equity,
Babson-Stewart, BEA, and Pilgrim Baxter as investment advisers to the Funds.
Table 4 illustrates the performance information pertaining to a hypothetical
Policy. These figures reflect deductions from premiums for Sales Load, State
Premium Tax Charges, DAC Tax Charge, Administrative Charge, charge for Cost of
Insurance Protection, plus deduction from the Separate Account of current
mortality and expense risk charges and Fund Operating Expenses.
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
Fund Since 20 15 10 5 3 1
Inception Years Years Years Years Years Year
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oppenheimer Money 5.98% --- --- 5.92% 4.42% 5.00% 5.13%
(date of inception - 04/03/85)
Oppenheimer Bond 9.94% --- --- 8.81% 7.68% 6.33% 4.80%
(date of inception - 04/03/85)
Oppenheimer Strategic Bond 7.35% --- --- --- --- 7.54% 12.07%
(date of inception - 05/03/93)
Oppenheimer High Income 13.46% --- 13.89% 14.88% 10.34% 15.26%
(date of inception - 04/30/86)
Oppenheimer Growth & Income 40.54% --- --- --- --- --- 32.51%
(date of inception - 07/05/95)
Oppenheimer Multiple Strategies 11.52% --- --- --- 11.67% 11.18% 15.50%
(date of inception - 02/09/87)
Oppenheimer Growth 14.52% --- --- 14.32% 16.24% 19.99% 25.20%
(date of inception - 04/03/85)
Oppenheimer Capital Appreciation 15.66% --- --- 16.50% 16.68% 13.74% 20.16%
(date of inception - 08/15/86)
Oppenheimer Global Securities 10.65% --- --- --- 12.38% 4.25% 17.80%
(date of inception - 11/20/90)
Panorama Total Return 13.73% --- --- 12.32% 11.52% 10.41% 10.14%
(date of inception - 09/30/82)
Panorama Growth 17.79% --- --- 15.94% 17.33% 17.75% 18.87%
(date of inception - 01/21/82)
Panorama International Equity 8.78% --- --- --- --- 8.21% 13.26%
(date of inception - 05/13/92)
Panorama LifeSpan Capital 18.80% --- --- --- --- 17.97%
Appreciation (date of inception -
09/01/95)
Panorama LifeSpan Balanced 14.85% --- --- --- --- --- 13.38%
(date of inception - 09/01/95)
Panorama LifeSpan Diversified 9.61% --- --- --- --- --- 6.93%
Income
(date of inception - 09/01/95)
</TABLE>
NOTE: This Table 1 shows the effective annual rates of return of the
Funds based on the actual investment performance (after deduction of
investment management fees and direct operation expenses). These rates
of return do not reflect the mortality and expense risk charges
assessed against the Separate Account. The rates of return also do not
reflect deduction from premiums for Sales Load, State Premium Tax
Charge, DAC Tax Charge, Administrative Charge, or charge for Cost of
Insurance Protection. The MML Equity Index Fund did not commence
operations until April 30, 1997. Therefore, historical investment
results for the 1, 3, 5, 10, 15, and 20 year periods listed above do
not exist for this Fund.
<PAGE>
<TABLE>
<CAPTION>
TABLE 2
ONE YEAR TOTAL RETURNS
For the year ended 1996 1995 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oppenheimer Money 5.13% 5.62% 4.20% 3.12% 3.76% 5.97% 7.80%
(date of inception - 04/03/85)
Oppenheimer Bond 4.80% 17.00% (1.94)% 13.04% 6.50% 17.63% 7.92%
(date of inception - 04/03/85)
Oppenheimer Strategic Bond 12.07% 15.33% (3.78)% 4.25%* -- -- --
(date of inception - 05/03/93)
Oppenheimer High Income 15.26% 20.37% (3.18)% 26.34% 17.92% 33.91% 4.65%
(date of inception - 04/30/86)
Oppenheimer Growth & Income 32.51% 23.52%* -- -- -- -- --
(date of inception - 07/05/95)
Oppenheimer Multiple Strategies 15.50% 21.36% (1.95)% 15.95% 8.99% 17.48% (1.91)%
(date of inception - 02/09/87)
Oppenheimer Growth 25.20% 36.65% 0.97% 7.25% 14.53% 25.54% (8.21)%
(date of inception - 04/03/85)
Oppenheimer Capital Appreciation 20.16% 32.52% (7.59)% 27.32% 15.42% 54.72% (16.82)%
(date of inception - 08/15/86)
Oppenheimer Global Securities 17.80% 2.24% (5.72)% 70.32% (7.11)% 3.39% 0.40%*
(date of inception - 11/20/90)
Panorama Total Return 10.14% 24.66% (1.97)% 16.28% 10.21% 28.79% 0.50%
(date of inception - 09/30/82)
Panorama Growth 18.87% 38.06% (0.51)% 21.22% 12.36% 37.53% (7.90)%
(date of inception - 01/21/82)
Panorama International Equity 13.26% 10.30% 1.44% 21.80% (4.32)%* -- --
(date of inception - 05/13/92)
Panorama LifeSpan Capital Appreciation 17.97% 6.65%* -- -- -- -- --
(date of inception - 09/01/95)
Panorama LifeSpan Balanced 13.38% 6.08%* -- -- -- -- --
(date of inception - 09/01/95)
Panorama LifeSpan Diversified Income 6.93% 5.69%* -- -- -- -- --
(date of inception - 09/01/95)
<CAPTION>
TABLE 2
ONE YEAR TOTAL RETURNS
For the year ended 1989 1988 1987 1986 1985 1984 1983 1982
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Oppenheimer Money 8.82% 7.31% 6.33% 5.68% 7.25%* -- -- --
(date of inception - 04/03/85)
Oppenheimer Bond 13.32% 8.97% 2.52% 10.12% 18.82%* -- -- --
(date of inception - 04/03/85)
Oppenheimer Strategic Bond -- -- -- -- -- -- -- --
(date of inception - 05/03/93)
Oppenheimer High Income 4.84% 15.58% 8.07% 4.73%* -- -- -- --
(date of inception - 04/30/86)
Oppenheimer Growth & Income -- -- -- -- -- -- -- --
(date of inception - 07/05/95)
Oppenheimer Multiple Strategies 15.76% 22.15% 3.97%* -- -- -- -- --
(date of inception - 02/09/87)
Oppenheimer Growth 23.59% 22.09% 3.32% 17.76% 9.50%* -- -- --
(date of inception - 04/03/85)
Oppenheimer Capital Appreciation 27.57% 13.41% 14.34% (1.65)%* -- -- -- --
(date of inception - 08/15/86)
Oppenheimer Global Securities -- -- -- -- -- -- -- ---
(date of inception - 11/20/90)
Panorama Total Return 22.98% 11.64% 4.26% 12.58% 25.43% 6.68% 20.20% 8.10%*
(date of inception - 09/30/82)
Panorama Growth 35.81% 14.46% 0.25% 11.58% 27.31% 4.89% 32.72% 33.00%*
(date of inception - 01/21/82)
Panorama International Equity -- -- -- -- -- -- -- --
(date of inception - 05/13/92)
Panorama LifeSpan Capital Appreciation -- -- -- -- -- -- -- --
(date of inception - 09/01/95)
Panorama LifeSpan Balanced -- -- -- -- -- -- -- --
(date of inception - 09/01/95)
Panorama LifeSpan Diversified Income -- -- -- -- -- -- -- --
(date of inception - 09/01/95)
</TABLE>
* The figures shown are one year total returns from inception of the Funds.
NOTE: This Table 2 shows the One Year Total Returns of the Funds based on the
actual investment performance (after deduction of investment management fees and
direct operation expenses). These rates of return do not reflect the mortality
and expense risk charges assessed against the Separate Account. The rates of
return also do not reflect deduction from premiums for Sales Load, State Premium
Tax Charge, DAC Tax Charge, Administrative Charge, or Charge for Cost of
Insurance Protection. The MML Equity Index Fund did not commence operations
until April 30, 1997. Therefore, historical investment results for the above
periods do not exist for this Fund.
<PAGE>
TABLE 3
AVERAGE ANNUAL TOTAL RETURN OF EACH DIVISION OF THE SEPARATE ACCOUNT
AS OF DECEMBER 31, 1996
The following performance information of the Divisions of the Separate Account
assumes that the Divisions have been in operation for the same periods as the
underlying Funds in which they invest. The returns reflect the total of the
income generated by the Fund net of Fund operating expenses, plus or minus
capital gains and losses, realized or unrealized, and net of the current
mortality and expense risk charge. The returns do not reflect deduction from
premiums for Sales Load, State Premium Tax Charge, DAC Tax Charge,
Administrative Charge, or charge for Cost of Insurance Protection.
<TABLE>
<CAPTION>
Fund 1 5 10 Since
Year Years Years Inception
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oppenheimer Money* 4.38% 3.67% 5.17% 5.23%
(date of inception - 04/03/85)
Oppenheimer Bond 4.05% 6.93% 8.06% 9.19%
(date of inception - 04/03/85)
Oppenheimer Strategic Bond 11.32% -- -- 6.60%
(date of inception - 05/03/93)
Oppenheimer High Income 14.51% 14.13% 13.14% 12.71%
(date of inception - 04/30/86)
Oppenheimer Growth & Income 31.76% -- -- 39.79%
(date of inception - 07/05/95)
Oppenheimer Multiple Strategies 14.75% 10.92% -- 10.77%
(date of inception - 02/09/87)
Oppenheimer Growth 24.45% 15.49% 13.57% 13.77%
(date of inception - 04/03/85)
Oppenheimer Capital Appreciation 19.41% 15.93% 15.75% 14.91%
(date of inception - 08/15/86)
Oppenheimer Global Securities 17.05% 11.63% -- 9.90%
(date of inception - 11/20/90)
Panorama Total Return 9.39% 10.77% 11.57% 12.98%
(date of inception - 09/30/82)
Panorama Growth 18.12% 16.58% 15.19% 17.04%
(date of inception - 01/21/82)
Panorama International Equity 12.51% -- -- 8.03%
(date of inception - 05/13/92)
Panorama LifeSpan Capital Appreciation 17.22% -- -- 18.05%
(date of inception - 09/01/95)
Panorama LifeSpan Balanced 12.63% -- -- 14.10%
(date of inception - 09/01/95)
Panorama LifeSpan Diversified Income 6.18% -- -- 8.86%
(date of inception - 09/01/95)
</TABLE>
<PAGE>
As of the date of this prospectus, the Separate Account Divisions had not
commenced operations and therefore have no performance history. The performance
figures for the Separate Account Divisions are historical and provide returns
which would have been achieved assuming that each Division of the Separate
Account had been in operation for the same periods as the corresponding Fund and
investing in the corresponding Fund during such period. Performance information
assumes current mortality and expense risk charges. If guaranteed mortality and
risk expense charges were used, the performance results would be lower.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the Fund in which the
Division invests and the market conditions during the given time period, and
should not be considered as a representation of what may be achieved in the
future. Actual returns may be more or less than those shown and will depend on a
number of factors, including the investment allocations by a Policyowner and the
different investment rates of return for the Divisions.
* Although the Oppenheimer Money Fund commenced operations on 4/3/85, the
information necessary to calculate the performance information is available only
for the year 1987 and subsequent periods.
NOTE: The MML Equity Index Fund did not commence operations until April 30,
1997. Therefore, historical investment results for the 1, 5, and 10 year periods
for this Fund do not exist.
TABLE 4
POLICY PERFORMANCE
This table illustrates the Account Value and Death Benefit of a hypothetical
Policy assuming the following:
- --------------------------------------------------------------------------------
. The Policy is in force for the period illustrated;
. Current Fund Investment Management Fees and Direct Operation Expenses,
Separate Account Mortality and Expense Risk Charge, Sales Load, State
Premium Tax Charge of 2%, DAC Tax Charge, Administrative Charge, Charge for
Cost of Insurance Protection, and Underwriting Charge**;
. An annual premium of $4,000, plus the Modal Term Premium, for 20 years;
. Modal Term Premium allocated to the GPA assuming a 3% crediting rate;
. 100% allocation (above the Modal Term Premium), to the respective Fund for
each period;
. The Insured is issue age 45;
. Mandatory participation assumed, unismoker rates;
. A Selected Face Amount of $250,000;
. Guaranteed Issue Underwriting and Death Benefit Option A.
- --------------------------------------------------------------------------------
The Cash Surrender Value is not illustrated because there is no surrender charge
and we assume no Policy Debt.
- --------------------------------------------------------------------------------
HISTORICAL RESULTS* - AS OF JUNE 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
MML Opp. Opp. Opp. Opp. Opp. Opp. Opp. Opp.
Equity Glob. Capital Growth Growth Multiple High Strategic Bond
Index Sec. Appr. & Strategy Income Bond
Income
- ------------------------------------------------------------------------------------------------------------------------------
For a Certificate In Force One Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $ $4,467 $4,467 $4,467 $4,467 $4,467 $4,467 $4,467 $4,467
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $ $4,534 $4,636 $4,830 $5,112 $4,455 $4,446 $4,323 $4,043
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $ $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Five Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $ $22,751 $22,751 $22,751 $ $22,751 $22,751 $ $22,751
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $ $27,550 $31,614 $33,003 $ $27,672 $28,881 $ $23,961
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $ $250,000 $250,000 $250,000 $ $250,000 $250,000 $ $250,000
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Ten Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $ $ $46,916 $46,916 $ $ $46,916 $ $46,916
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $ $ $99,531 $90,988 $ $ $86,493 $ $62,063
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $ $ $250,000 $250,000 $ $ $250,000 $ $250,000
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Since Inception of the Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $ $32,200 $51,967 $57,131 $8,970 $46,916 $51,967 $18,111 $57,131
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $ $39,902 $105,995 $118,608 $10,944 $70,685 $96,025 $18,950 $81,390
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $ $250,000 $250,000 $256,192 $250,000 $250,000 $250,000 $250,000 $250,000
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Opp. Pan. Pan. Pan. Pan. Pan. Pan.
Money Inter. Growth Total LifeSpan LifeSpan LifeSpan
Mkt.** Equity Return Capital Bal. Div.
Appr. Income
- ------------------------------------------------------------------------------------------------------------------------------
For a Certificate In Force One Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $4,467 $4,467 $4,467 $4,467 $4,467 $4,467 $4,467
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $4,056 $4,369 $4,586 $4,249 $4,551 $4,374 $4,125
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $250,000 $250,000 $250,000 $250,000 $250,000 $250,000 $250,000
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Five Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $22,751 $ $22,751 $22,751 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $21,964 $ $33,013 $27,102 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $250,000 $ $250,000 $250,000 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Ten Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $46,916 $ $46,916 $46,916 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $50,914 $ $101,539 $77,179 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $250,000 $ $250,000 $250,000 $ $ $
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For a Certificate In Force Since Inception of the Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cumulative Premium $46,916 $22,751 $73,335 $73,335 $8,970 $8,970 $8,970
- ------------------------------------------------------------------------------------------------------------------------------
Account Value $50,914 $24,381 $237,049 $155,026 $9,251 $8,984 $8,731
- ------------------------------------------------------------------------------------------------------------------------------
Death Benefit $250,000 $250,000 $474,097 $310,052 $250,000 $250,000 $250,000
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Historical investment results and current charges are used to determine
values; if guaranteed charges were used the results would be lower. The
Account Value reflects premiums paid, plus investment earnings; less all
charges. You may obtain a personalized illustration which reflects charges
based on your individual characteristics.
** Although the Oppenheimer Money Fund commenced operations on 4/3/85, the
information necessary to calculate the Historical Results is available
only for the year 1987 and subsequent periods.
<PAGE>
GENERAL PROVISIONS OF THE POLICY
Premiums. The minimum initial premium payable by You when electing the variable
- --------
rider to the Certificate is $500. This amount must be paid in one lump sum. A
Policy is a Certificate to which a variable rider has been added. Your Employer
pays the estimated premium amount sufficient to pay the Premium Deduction and
Monthly Deduction(s) under the Policy during a selected term. This estimated
premium amount is called a Modal Term Premium. The term selected by Your
Employer can be one month, one quarter, a six month period or one year and is
called a Modal Term. The Modal Term Premium for a Policy is based upon cost of
insurance rates plus the Sales Load, State Premium Tax Charge, DAC Tax Charge,
the Monthly Administrative Charge, and any applicable rider charges. The method
of calculating the Modal Term Premium is shown in Appendix B. The planned
Employer paid premium is the Modal Term Premium for Your Policy. Subject to the
minimum and maximum premium limitations described below, You and Your Employer
may make unscheduled premium payments at any time and in any amount.
Planned Policy Premiums - Modal Term Premiums. The Modal Term selected by the
- ---------------------------------------------
Employer in the Participation Agreement forms the basis for the billing cycle
for your Policy. If the Employer selects a monthly Modal Term, then We will send
Your Employer a monthly premium invoice for your Policy. If the Employer selects
a yearly Modal Term, then We will send Your Employer an annual premium invoice.
The Employer may change the selected Modal Term at any time by written request
to Us. Your Modal Term is specified in Your Policy's schedule page. If You
become disassociated with the Employer, You may elect to continue the Policy on
Your own. If You choose to continue the Policy, You will become vested in all
Policy rights previously held by Your Employer, including the right to change
the Modal Term to any mode but monthly. In this event, MassMutual will
discontinue billing for Your Modal Term premium.
The Modal Term Premium for the Policy may be subject to minimum and maximum
amounts depending on the Selected Face Amount of the Policy, the Insured's age,
and the Employer group.
There is no penalty if the Modal Term Premium is not paid, nor does payment of
this amount guarantee coverage for any period of time. Instead, the duration of
the Policy depends upon the Policy's Account Value. Even if Modal Term Premiums
are paid, the Policy terminates when the Account Value becomes insufficient to
pay certain monthly charges and a grace period expires without sufficient
payment. (For details see "Termination.")
Minimum and Maximum Premium Payments. While the Policy is in force, premiums may
- ------------------------------------
be paid at any time before the death of the Insured subject to certain
restrictions. There are no minimum or maximum premium payments under the Policy.
However, We have the right to refund all or a portion of a premium paid in any
year if it will increase the amount of insurance which requires a charge under
the Policy. Premium payments should be sent to our Home Office or to the address
indicated for payment on any billing notice.
Termination. This Policy does not terminate for failure to pay premiums since
- -----------
payments, other than the initial premium for the variable account rider, are not
specifically required. Rather, if on a Monthly Calculation Date, the Account
Value less any Policy Debt is insufficient to cover the Monthly Deduction, the
Policy enters a 61-day grace period.
<PAGE>
Grace Period. We allow 61 days to pay any premium necessary to cover the overdue
- ------------
Monthly Deduction. An Employer (or the Policyowner if the Policyowner has
disassociated from the Employer) will receive a notice from Us which sets forth
this amount. During the grace period, the Policy remains in force. If the
payment is not made by the later of the 61 days or 30 days after We have mailed
the written notice, the Policy will terminate without value and insurance
coverage will cease.
DEATH BENEFIT UNDER THE POLICY
The Death Benefit is the amount payable to the named Beneficiary(ies) when the
Insured dies. We pay the Beneficiary the Death Benefit amount determined as of
the date of death upon receipt of proof of death in good order. All or part of
the benefit can be paid in cash or applied under one or more of our payment
options as described under "Additional Provisions Of The Policy" - "Payment
Options."
A potential Certificate owner indicates the selected initial Face Amount in the
Enrollment Form. Increases in the Selected Face Amount may be requested by the
Policyowner by sending Us a new Enrollment Form, or if the Policyowner is no
longer associated with the Employer, an Application. Under Death Benefit Option
A, the Death Benefit is the greater of the Selected Face Amount in effect on the
date of death or the Minimum Face Amount in effect on the date of death, with
possible additions or deductions. Under Death Benefit Option B, the Death
Benefit is the greater of the sum of the Selected Face Amount in effect on the
date of death plus the Account value on the date of death, or the Minimum Face
Amount in effect on the date of death, with possible additions or deductions.
The Minimum Face Amount is equal to Account Value times the Minimum Face Amount
Percentage. The percentages depend upon the Insured's age. The percentages are
set forth in the Table Of Minimum Face Amount Percentages in the Policy. Added
to the greater of the Selected Face Amount or Minimum Face Amount is that part
of any Monthly Deduction applicable for the period beyond the date of death. Any
Policy Debt outstanding on the date of death and any Monthly Deduction unpaid as
of the date of death are deducted from the Death Benefit. If the Insured dies
after the first Policy Year, We will also include a pro-rata share of any
dividend allocated to the Policy for the year death occurs. We pay interest on
the Death Benefit from the date of death to the date the Death Benefit is paid
or a payment option becomes effective. The interest rate equals the rate
determined under the Interest Payment Option as described in "Additional
Provisions Of The Policy" - "Payment Options" (or a higher rate if required by
state law.)
The Selected Face Amount may be increased upon request by the Policyowner,
subject to MassMutual's then current guidelines regarding guaranteed issue,
simplified issue, and regular underwriting. Guaranteed issue is only available
to Employees of an Employer group. For those Policyowners subject to simplified
or regular underwriting, We will require adequate evidence of insurability prior
to approving an increase in the Selected Face Amount. A request for a decrease
in the Selected Face Amount will be honored by Us once each Policy Year provided
the Policy maintains a minimum Death Benefit of $50,000. Decreases in the
Selected Face Amount may have tax consequences. (For details see "Federal Income
Tax Considerations" - "Policy Proceeds, Premiums, and Loans.")
Any requested increase in the Selected Face Amount will be effective on the
Monthly Calculation Date which is on, or next follows, the later of: (i) the
date 15 days after a written request for such change has been received and
approved by Us; or (ii) the requested effective date of the change. Any
requested decrease in the Selected Face Amount will be effective on the Monthly
Calculation Date which is on, or next follows, the later of: (i) the date 15
days after a written request for such change has been received and approved by
Us; (ii) the one year period following the effective date of the previously
requested decrease; or (iii) the requested effective date of the change.
<PAGE>
The Policyowner may change Death Benefit Option by written request subject to
Our current guidelines regarding proof of insurability. There is no charge for a
change in Death Benefit Option. The effective date of any such change will be on
the Policyowner's Policy Anniversary following the date the written request is
received by Us in good order, or if We receive the written request within the 15
day period prior to a Policy Anniversary, the change will be effective on the
second Policy Anniversary following the date of the request. MassMutual will
honor a request for a later effective date provided the date coincides with the
Policyowner's Policy Anniversary.
Any increase for Policyowners no longer associated with the Employer must be at
least $5,000. Under Death Benefit Option A, the Death Benefit is unaffected by
investment experience unless the Death Benefit is based on the Minimum Face
Amount. Under Option B, the Death Benefit may be increased or decreased by
investment experience. (No increase will be allowed after the Policy Anniversary
Date succeeding the Insured's 75th birthday.)
Example: The following example shows how the Death Benefit may vary as a result
of investment performance and Death Benefit Option in effect on the date of
death.
<TABLE>
<CAPTION>
Policy A Policy B
-------- --------
<S> <C> <C>
(a) Selected Face Amount: $100,000 $100,000
(b) Account Value on Date of Death $30,000 $50,000
(c) Minimum Face Amount Percentage
on Date of Death: 280% 280%
(d) Minimum Face Amount $84,000 $140,000
(b x c):
Death Benefit if
Option A in effect
(greater of a or d) $100,000 $140,000
Death Benefit if
Option B in effect
(greater of (i) a + b
or (ii) d): $130,000 $150,000
</TABLE>
(Examples assume no additions to or deductions from the Selected Face Amount or
Minimum Face Amount are applicable.)
ACCOUNT VALUE AND CASH SURRENDER VALUE
Account Value. The Account Value of the Policy is equal to the Variable Account
- -------------
Value plus the Fixed Account Value. The Account Value of the Policy is held in
one or more Divisions and the GPA. Initially, this value equals the net amount
of the first premium paid (combined Employer and Policyowner premium) under the
Policy. If Your Policy has an unexpired Free Look Period, this amount will be
allocated to the Guaranteed Principal Account until the expiration of the Free
Look Period. Thereafter, Account Value
<PAGE>
attributable to Net Premiums paid by You will be allocated to the GPA and/or
Divisions according to Your instructions. Billed Modal Term Premiums payable by
the Employer are always allocated to the GPA.
Transactions with respect to the Account Value are effected by the purchase and
sale of accumulation units. Purchases and sales are made at the unit value as of
the Valuation Time on the Valuation Date if the premium or transaction request
for such purchase or sale is received by Us before the Valuation Time.
Otherwise, purchases and sales will be made as of the next following Valuation
Date or a later date requested by the Policyowner. Unit values are determined on
each Valuation Date.
Transfers. All or part of the Account Value may be transferred among Divisions
- ---------
by written request. Transfers between Divisions may be by dollar amount or by
whole-number percentage. There is no limit on the number of transfers a
Policyowner may make. MassMutual does not currently charge a fee for transfers
in excess of six (6) during any one Policy Year (twelve (12) for Policies issued
in New York). However, the Company reserves the right to charge a fee not to
exceed $10 per transfer if there are more than six (6) transfers in a Policy
Year (twelve (12) for Policies issued in New York). Policyowners, however, may
transfer all funds in the Separate Account to the GPA at any time regardless of
the number of transfers previously made.
Transfers from the GPA to the Separate Account may be made only once during each
Policy Year. Each such transfer may not exceed (at the time of the transfer) the
lesser of (i) 25% of Your Policy's Fixed Account Value (excluding Policy Debt),
or (ii) Fixed Account Value (excluding Policy Debt) less an amount equal to one
plus the number of Monthly Calculation Dates remaining in Your Modal Term
multiplied by Your most recent Monthly Deduction. However, restriction (i) does
not apply if in each of the previous three Policy Years, 25% of the Account
Value in the GPA has been transferred and there have been no premium payments or
transfers (except as a result of a policy loan) to the GPA. All transfers made
on one Valuation Date are considered one transfer.
Automated Account Re-Balancing. Automated Account Re-Balancing permits the
- ------------------------------
Policyowner to specify specific whole-number percentages of a Policyowner's
Account Value to be maintained in any combination of Divisions and the GPA. Once
We have received a written request in proper form for Automated Account
Re-Balancing, We will make transfers once a quarter to and from the Divisions
and the GPA to re-adjust a Policyowner's Account Value to the percentages
specified. This enables the Policyowner to maintain a specific portfolio
allocation. Quarterly re-balancing is based upon the Policy Year instead of a
calendar year. The Automated Account Re-Balancing is considered one transfer per
Policy Year.
Automated Account Re-Balancing can be started or canceled at any time.
Allocation percentages may only be changed by the Policyowner once each Policy
Year under the Automated Account Re-Balancing Program. In addition, a
Policyowner may only reduce his or her allocation to the GPA by up to 25% once
each Policy Year under the Program. Re-balancing will only be made on a
quarterly basis on the Monthly Calculation Date. The effective date of the first
automated re-balancing will be the first Monthly Calculation Date after the
request is received by the Home Office. If the request is received before the
end of the Free Look Period, the effective date of the first re-balancing will
be coincident with the end of this Period. Automated Account Re-Balancing is not
subject to the restrictions on transfers from the GPA to the Separate Account.
(For details see "Transfers.") Policyowners who utilize Automated Account Re-
Balancing may not simultaneously utilize Automated Account Value Transfers.
Automated Account Value Transfer. Automated Account Value Transfer permits the
- --------------------------------
Policyowner to specify transfers of a specific dollar amount or a whole-number
percentage of a Division's Account Value to be transferred monthly from that
Division to any combination of Divisions and the GPA. Automated Account Value
Transfers are not available from more than one Division or from the GPA. This
process is considered one transfer per Policy Year.
<PAGE>
The main objective of Automated Account Value Transfer is to shield the
Policyowner's investment from short term price fluctuations. Theoretically, a
lower than average cost per unit may or may not be achieved over the long term.
This plan of investing allows investors to take advantage of market fluctuations
but does not assure a profit or protect against a loss in declining markets.
Automated Account Value Transfer can be started, changed or canceled at any
time. Transfers will only be made on a monthly basis on the Monthly Calculation
Date. The effective date of the first automated transfer will be the first
Monthly Calculation Date after the request is received by the Home Office. If
the request is received before the end of the Free Look Period, the effective
date of the first automated transfer will be coincident with the end of this
Period.
Transfers will occur automatically. The Policyowner will specify the specific
dollar amounts or whole-number percentages to be transferred and the Division
from which the transfers will be made, the Division(s) and/or GPA to which the
automated transfer is to be made and the number of months during which transfers
will continue.
If the value of the Division from which transfers are being made falls below the
total transfer amount, the remaining value in that Division will be transferred
to the designated receiving Division(s) and/or GPA and no more automated
transfers will be processed. Automated Account Value Transfer is subject to the
restrictions on transfers from the GPA to the Separate Account. (For details see
"Transfers.") Policyowners who utilize Automated Account Value Transfers may not
simultaneously utilize Automated Account Re-Balancing.
Investment Return. The investment return of a Policy is based on:
- -----------------
1. The Account Value held in each Division for that Policy; and
2. The investment experience of each Division as measured by its actual
net rate of return; and
3. The interest rate credited on Account Values held in the GPA.
The investment experience of a Division reflects increases or decreases in the
net asset value of the shares of the underlying Fund, any dividend or capital
gains distributions declared by the Fund, and any charges against the assets of
the Division. This investment experience is determined each day on which the net
asset value of the underlying Fund is determined - that is, on each Valuation
Date. The actual net rate of return for a Division measures the investment
experience from the end of one Valuation Date to the end of the next Valuation
Date.
Cash Surrender Value. The Policy may be surrendered for its full Cash Surrender
- --------------------
Value at any time while the Insured is living. Unless a later effective date is
selected, surrender is effective on the date We receive the Policy and a written
request in proper form at our Home Office. The Policy and a written request for
surrender are deemed received on the date on which they are received by mail in
proper form at MassMutual's Home Office. If, however, the date on which they are
received is not a Valuation Date, or if they are received other than through the
mail after a Valuation Time, they are deemed received on the next Valuation
Date. The full Cash Surrender Value is the Account Value less any outstanding
Policy Debt.
Withdrawals. Subject to certain conditions, after the Policy has been in force
- -----------
for six months a Policyowner can make a Withdrawal from the Policy on any
Monthly Calculation Date by sending a
<PAGE>
written request to our Home Office. The minimum amount of a Withdrawal is $500
(before deducting the withdrawal charge); the maximum amount is the Cash
Surrender Value minus an amount equal to one plus the number of Monthly
Calculation Dates remaining in Your Modal Term multiplied by Your most recent
Monthly Deduction. The amount of the Withdrawal is deducted from the Policy's
Account Value at the end of the Valuation Period applicable to the Monthly
Calculation Date on which the Withdrawal is made. The Policyowner must specify
the GPA or the Division(s) from which the Withdrawal is to be made. The
withdrawal amount attributable to a Division or the GPA may not exceed the non-
loaned Account Value of that Division or GPA. A Withdrawal from the GPA may not
exceed an amount equal to one plus the number of Monthly Calculation Dates
remaining in Your Modal Term multiplied by Your most recent Monthly Deduction. A
withdrawal charge equal to the lesser of 2.0% of the Withdrawal or $25.00, is
deducted from each Withdrawal. The Account Value will automatically be reduced
by the amount of the Withdrawal. The Selected Face Amount of the Policy will be
reduced as needed to prevent an increase in the amount of insurance which
requires a charge, unless satisfactory evidence of insurability is provided to
MassMutual. Withdrawals may have tax consequences. (For details see "FEDERAL
INCOME TAX CONSIDERATIONS" - "Policy Proceeds," "Premiums and Loans.")
POLICY LOAN PRIVILEGE
The Policy provides a loan privilege which becomes effective six months after
the Policy Date. After such effective date, loans can be made on the Policy at
any time while the Insured is living. The maximum loan is an amount equal to: 1)
90% of Your Account Value at the time of the loan; less 2) any outstanding
Policy Debt before the new loan; less 3) interest on the loan being made and on
other outstanding loan(s) to Your next Policy Anniversary Date; less 4) an
amount equal to one plus the number of Monthly Calculation Dates remaining in
Your Modal Term multiplied by Your most recent Monthly Deduction. The Policy
must be properly assigned as collateral for the loan. (The maximum loan amount
may be different if required by state law.)
Source of Loan. The loan amount requested is taken from the Divisions and the
- --------------
GPA (excluding Policy Debt plus an amount equal to one plus the number of
Monthly Calculation Dates remaining in Your Modal Term multiplied by Your most
recent Monthly Deduction) in proportion to the non-loaned Account Value of each
on the date of the loan. Shares taken from the Divisions are liquidated and the
resulting dollar amounts are transferred to the GPA. We may delay the granting
of any loan attributable to the GPA for up to six months. We may also delay the
granting of any loan attributable to the Separate Account during any period that
the New York Stock Exchange (or its successor) is closed except for normal
weekend and holiday closings, or trading is restricted, or the Securities and
Exchange Commission (or its successor) determines that an emergency exists, or
the Securities and Exchange Commission (or its successor) permits Us to delay
payment for the protection of our policy owners.
If Loans Exceed the Policy Account Value. Policy Debt (which includes accrued
- ----------------------------------------
interest) must not equal or exceed the Account Value under the Policy. If this
limit is reached, We may terminate the Policy. To terminate for this reason We
will notify the Employer (or Policyowner if no longer associated with the
Employer) in writing. This notice states the amount necessary to bring the
Policy Debt back within the limit. If We do not receive a payment within 30 days
after the date We mailed the notice, the Policy terminates without value at the
end of those 30 days.
Termination of a policy under these circumstances could cause the Policyowner to
recognize gross income in the amount of any excess of the Policy Debt over the
sum of the Policyowner's previously unrecovered premium payments.
<PAGE>
Interest. The Employer elects either a fixed loan interest rate or, where
- --------
permitted, an adjustable loan interest rate to apply to the Policies. All
Certificates issued to the same group will have the same fixed or variable loan
interest rate. The fixed loan interest rate is 6% per year. When an adjustable
rate has been selected, MassMutual sets the rate each year that will apply for
the next Policy Year. The maximum rate is based on the monthly average of the
composite yield on seasoned corporate bonds as published by Moody's Investors
Service or, if it is no longer published, a substantially similar average. The
maximum rate is the published monthly average for the calendar month ending two
months before the Policy Year begins, or 5%, whichever is higher. If the maximum
limit is not at least 1/2% higher than the rate in effect for the previous year,
We will not increase the rate. If the maximum limit is at least 1/2% lower than
the rate in effect for the previous year, We will decrease the rate.
Interest accrues daily and becomes part of the Policy Debt as it accrues. It is
due on each Policy Anniversary. If not paid when due, the interest will be added
to the loan and, as part of the loan, will bear interest at the same rate. Any
interest capitalized on a Policy Anniversary will be treated the same as a new
loan and will be taken from the Divisions and the GPA in proportion to the
non-loaned Account Value in each. The inclusion of unpaid interest to
outstanding Policy Debt may result in tax consequences upon surrender or lapse
of the Policy. (For details see "FEDERAL INCOME TAX CONSIDERATIONS - Policy
Proceeds, Premiums and Loans.")
Repayment. All or part of any Policy Debt may be repaid at any time while the
- ---------
Insured is living and while the Policy is in force. Any repayment results in the
transfer of values equal to the repayment from the loaned portion of the GPA to
the non-loaned portion of the GPA and the applicable Division(s). The transfer
is made in proportion to the non-loaned value in each Division at the time of
repayment. If the loan is not repaid, We deduct the amount due from any amount
payable from a full surrender or upon the death of the Insured.
Interest on Loaned Value. The amount equal to any outstanding Policy loans is
- ------------------------
held in the GPA and is credited with interest at a rate which is the greater of
3% and the Policy loan rate less a MassMutual declared charge (currently 0.75%,
guaranteed not to exceed a maximum of 1.25%) for expenses and taxes.
Effect of Loan. A Policy loan affects the Policy since the Death Benefit and
- --------------
Cash Surrender Value under a Policy are reduced by the amount of the loan.
Repayment of the loan increases the Death Benefit and Cash Surrender Value under
the Policy by the amount of the repayment.
As long as a loan is outstanding, a portion of the Policy's Account Value equal
to the loan is held in the GPA. This amount is not affected by the Separate
Account's investment performance. The Account Value is also affected because the
portion of the Account Value equal to the Policy loan is credited with an
interest rate declared by MassMutual rather than a rate of return reflecting the
investment performance of the Separate Account. If the Policy is surrendered
with outstanding Policy Debt, tax consequences may result. (For details see
"FEDERAL INCOME TAX CONSIDERATIONS - Policy Proceeds, Premiums and Loans.")
FREE LOOK PROVISION
The Certificate owner may cancel the Certificate within 10 days (or longer if
required by state law) after the owner has received the Certificate. The
election of the variable account rider does not increase or decrease the
duration of this Free Look Period. If the Certificate owner chooses to cancel
the Certificate within the Free Look Period, the owner should mail or deliver
the Certificate and Certificate delivery receipt (if applicable) either to
MassMutual or to the agent who sold the Certificate or to one of our agency
<PAGE>
offices. If the Certificate is canceled in this fashion, a refund will be made
to the owner. The refund equals either: 1) the Account Value plus any Premium
Deduction(s) and Monthly Deduction(s) reduced by any amounts borrowed or
withdrawn; or, where required by state law, 2) all premiums paid, reduced by any
amounts borrowed or withdrawn. During the Free Look Period, the initial Net
Premium We receive under Certificates to which a variable rider has been added
will be allocated to the Guaranteed Principal Account. If You elect the variable
account rider after the Free Look Period applicable to Your Policy has expired,
the Net Premiums You pay will be allocated among the Guaranteed Principal
Account and the Divisions of the Separate Account in accordance with Your
instructions.
EXCHANGE PRIVILEGE
The Policyowner may transfer the entire Account Value held in the Separate
Account to the GPA at any time. The transfer will take effect when We receive a
written request, signed by the Policyowner.
YOUR VOTING RIGHTS
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, as amended, the Policyowner is
entitled to give instructions as to how shares of the Funds held in the Separate
Account (or other securities held in lieu of such shares) deemed attributable to
the Policy shall be voted at meetings of shareholders of the Funds or the
Trusts. Those persons entitled to give voting instructions are determined as of
the record date for the meeting.
The number of shares of the Funds held in the Separate Account deemed
attributable to the Policy during the lifetime of the Insured are determined by
dividing the Policy's Account Value held in each Division, if any, by the net
asset value of one share in the underlying Fund in which the assets of the
Division are invested. Fractional votes are counted.
Policyowners receive proxy material and a form with which such instructions may
be given. Shares of the Funds held by the Separate Account, and attributable to
the Policies, to which no effective instructions have been received are voted
for or against any proposition in the same proportion as the shares as to which
instructions have been received. We reserve the right to vote shares of the
Funds not attributable to the Policies in Our discretion to the extent allowed
by applicable law.
OUR RIGHTS
We reserve the right to take certain actions in connection with our operations
and the operations of the Separate Account. These actions will be taken in
accordance with applicable laws (including obtaining any required approval of
the Securities and Exchange Commission). If necessary, We will seek approval by
Policyowners.
Specifically, We reserve the right to:
. Create new segments of the Separate Account;
. Create new Separate Accounts;
. Combine any two or more Separate Accounts;
<PAGE>
. Make available additional Divisions investing in additional investment
companies;
. Substitute or merge two or more Divisions or Separate Accounts;
. Eliminate one or more Divisions;
. Invest the assets of the Separate Account in securities other than
shares of the Funds as a substitute for such shares already purchased
or as the securities to be purchased in the future;
. Operate the Separate Account as a management investment company under the
Investment Company Act of 1940, as amended, or in any other form
permitted by law; and
. De-register the Separate Account under the Investment Company Act of
1940, as amended, in the event such registration is no longer required.
MassMutual also reserves the right to change the name of the Separate Account.
We have reserved all rights to the name MassMutual and Massachusetts Mutual Life
Insurance Company or any part of it. We may allow the Separate Account and other
entities to use our name or part of it, but We may also withdraw this right.
DIRECTORS AND EXECUTIVE VICE PRESIDENTS OF MASSMUTUAL
The directors and executive vice presidents of MassMutual, their positions and
their other business affiliations and business experience for the past five
years are listed below.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation(s) During Past Five Years
- ----------------------------------------------------------------------------------------------------------------
<S> <C>
Roger G. Ackerman, Director Chairman and Chief Executive Officer, Corning, Inc., since 1996,
President and Chief Operating Officer 1990-1996
- ----------------------------------------------------------------------------------------------------------------
James R. Birle, Director President and Founder, Resolute Partners, LLC, since 1994; General
Partner, Blackstone Group, 1988-1994
- ----------------------------------------------------------------------------------------------------------------
Frank C. Carlucci, III, Director Chairman, The Carlyle Group, Inc., since 1989
- ----------------------------------------------------------------------------------------------------------------
Gene Chao, Director Chairman, President and CEO, Computer Projections, Inc. since 1991
- ----------------------------------------------------------------------------------------------------------------
Patricia Diaz Dennis, Director Senior Vice President and Assistant General Counsel, SBC Communications
Inc. since 1995; Special Counsel, Sullivan & Cromwell, 1993-1995;
Assistant Secretary of State for Human Rights and Humanitarian Affairs,
U.S. Department of State, 1992-1993
- ----------------------------------------------------------------------------------------------------------------
Anthony Downs, Director Senior Fellow, The Brookings Institution, since 1977
- ----------------------------------------------------------------------------------------------------------------
James L. Dunlap, Director President and Chief Operating Officer, United Meridian Corporation,
since 1996; Senior Vice President, Texaco, Inc. 1987-1996
- ----------------------------------------------------------------------------------------------------------------
William B. Ellis, Director Senior Fellow, Yale University School of Forestry and Environmental
Studies, since 1995; Chairman and Chief Executive Officer, Northeast
Utilities, 1983-1995
- ----------------------------------------------------------------------------------------------------------------
Robert M. Furek, Director President and Chief Executive Officer, Heublein, Inc., 1987-1996
- ----------------------------------------------------------------------------------------------------------------
Charles K. Gifford, Director Chief Executive Officer, First National Bank of Boston and The Bank of
Boston Corporation, since 1996, Chairman, President and CEO 1995-1996,
President and CEO 1989-1995
- ----------------------------------------------------------------------------------------------------------------
William N. Griggs, Director Managing Director, Griggs & Santow, Inc., since 1983
- ----------------------------------------------------------------------------------------------------------------
George B. Harvey, Director Chairman, President and CEO, Pitney Bowes, 1983-1996
- ----------------------------------------------------------------------------------------------------------------
Barbara B. Hauptfuhrer, Director of various corporations, since 1972
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------
Director
- ----------------------------------------------------------------------------------------------------------------
Sheldon B. Lubar, Director Chairman, Lubar & Co. Incorporated, since 1977
- ----------------------------------------------------------------------------------------------------------------
William B. Marx, Jr., Director Senior Executive Vice President, Lucent Technologies 1996-1996;
Executive Vice President and CEO Multimedia Products Group, AT&T,
1994-1996; Executive Vice President and CEO, Network Systems Group,
1993-1994; Group Executive and President, AT&T Network Systems, 1989-1993
- ----------------------------------------------------------------------------------------------------------------
John F. Maypole, Director Managing Partner, Peach State Real Estate Holding Company, since 1984
- ----------------------------------------------------------------------------------------------------------------
Donald F. McCullough, Director Retired Chairman and Chief Executive Officer, Collins & Aikman Corp.,
since 1988
- ----------------------------------------------------------------------------------------------------------------
John J. Pajak, Director, President President and Chief Operating Officer, MassMutual, since 1996, Vice
and Chief Operating Officer Chairman and Chief Administrative Officer, 1996-1996, Executive Vice
President, 1987-1996
- ----------------------------------------------------------------------------------------------------------------
Thomas B. Wheeler, Director, Chairman and Chief Executive Officer, MassMutual, since 1996, President
Chairman and Chief Executive Officer and Chief Executive Officer, 1988-1996
- ----------------------------------------------------------------------------------------------------------------
Alfred M. Zeien, Director Chairman and Chief Executive Officer, The Gillette Company, since 1991
- ----------------------------------------------------------------------------------------------------------------
Executive Vice Presidents:
- ----------------------------------------------------------------------------------------------------------------
Lawrence V. Burkett, Jr. Executive Vice President and General Counsel, MassMutual, since 1993,
Senior Vice President and Deputy General Counsel 1992-1993
- ----------------------------------------------------------------------------------------------------------------
John B. Davies Executive Vice President, MassMutual, since 1994; Associate Executive
Vice President 1994-1994; General Agent, 1982-1993
- ----------------------------------------------------------------------------------------------------------------
Daniel J. Fitzgerald Executive Vice President, MassMutual, since 1994, Senior Vice President,
1991-1994
- ----------------------------------------------------------------------------------------------------------------
John V. Murphy Executive Vice President, MassMutual, since 1997, Executive Vice
President and Chief Operating Officer, David L. Babson & Co., Inc.,
1995-1997; Chief Operating Officer, Concert Capital Management, Inc.,
1993-1995; Senior Vice President and Chief Financial Officer, Liberty
Financial Companies, 1977-1993
- ----------------------------------------------------------------------------------------------------------------
Gary E. Wendlandt Executive Vice President and Chief Investment Officer, MassMutual, since
1993, Executive Vice President, 1992-1993, Senior Vice President,
1983-1992
- ----------------------------------------------------------------------------------------------------------------
Joseph Zubretsky Executive Vice President and Chief Financial Officer, MassMutual, since
1997, Chief Financial Officer, Healthsource, Inc. 1996-1997, Partner,
Coopers & Lybrand L.L.P., 1990-1996
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
THE GUARANTEED PRINCIPAL ACCOUNT
Because of the exemptive and exclusionary provisions, interests in MassMutual's
general account (which include interests in the Guaranteed Principal Account)
are not registered under the Securities Act of 1933 and the general account is
not registered as an investment company under the Investment Company Act of
1940, as amended. Accordingly, neither the general account nor any interests
therein are subject to the provisions of these Acts, and MassMutual has been
advised that the staff of the Securities and Exchange Commission has not
reviewed the disclosures in the Prospectus relating to the general account.
Disclosures regarding the general account may, however, be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
<PAGE>
A Policyowner may allocate or transfer all or part of the Net Premium to the
GPA, and such amounts shall become part of MassMutual's general account assets.
The allocation or transfer of amounts to the GPA does not entitle a Policyowner
to share in the investment experience of those assets. Instead, MassMutual
guarantees that those amounts allocated to the GPA which are in excess of any
Policy loans will accrue interest daily at a minimum effective annual rate equal
to 3%. For amounts equal to any Policy loans, the guaranteed rate is the greater
of: (a) 3%; and (b) the Policy loan rate less a MassMutual declared charge for
expenses and taxes. This charge is currently 0.75% and will not exceed 1.25%.
Although MassMutual is not obligated to credit interest at a rate higher than
this minimum, it may declare a higher rate applicable for such periods as it
deems appropriate. Upon request, MassMutual will inform Policyowners of the then
applicable rate. Since MassMutual takes into account the need to provide for its
expenses and guarantees, the crediting rate declared by MassMutual shall be net
of charges it imposes against the earnings of the GPA.
FEDERAL INCOME TAX CONSIDERATIONS
The ultimate effect of federal income taxes on values under this Policy and upon
the economic benefit to the Policyowner or Beneficiary depends on MassMutual's
tax status and upon the tax status of the individual concerned. The discussion
contained herein is general in nature and is not an exhaustive discussion of all
tax questions that might arise under the Policies, and is not intended as tax
advice. Moreover, no representation is made as to the likelihood of continuation
of current federal income tax laws and Treasury Regulations or of the current
interpretations of the Internal Revenue Service. MassMutual reserves the right
to make changes in the Policy to assure that it continues to qualify as life
insurance for tax purposes. For complete information on federal and state tax
considerations, a qualified tax adviser should be consulted. No attempt is made
to consider any applicable state or other tax laws.
MassMutual - Tax Status. MassMutual is taxed as a life insurance company under
- -----------------------
Subchapter L of the Internal Revenue Code of 1986 (the "Code"). The Separate
Account is not a separate entity from MassMutual and its operations form a part
of MassMutual.
Investment income and realized capital gains on the assets of the Separate
Account are reinvested and taken into account in determining Account Values. The
investment income and realized capital gains are automatically applied to
increase book reserves associated with the Policies. Under existing federal
income tax law, the Separate Account's investment income, including net capital
gains, is not taxed to MassMutual to the extent applied to increase reserves
associated with the Policies. The reserve items taken into account at the close
of the taxable year for purposes of determining net increases or net decreases
must be adjusted for tax purposes by subtracting any amount attributable to
appreciation in the value of assets or by adding any amount attributable to
depreciation. MassMutual's basis in the assets underlying the Separate Account's
Policies will be adjusted for appreciation or depreciation, to the extent the
reserves are adjusted. Thus, corporate level gains and losses, and the tax
effect thereof, are eliminated.
Due to MassMutual's current tax status, no charge is made to the Separate
Account for MassMutual's federal income taxes that may be attributable to the
Separate Account. Periodically, MassMutual reviews the question of a charge to
the Separate Account for MassMutual's federal income taxes. A charge may be made
for any federal income taxes incurred by MassMutual that are attributable to the
Separate Account. Depending on the method of calculating interest on Policy
values allocated to the Guaranteed Principal Account (see preceding section), a
charge may be imposed for the Policy's share of MassMutual's federal income
taxes attributable to that account.
<PAGE>
Under current state laws, MassMutual may incur state and local taxes (in
addition to premium taxes). At present, these taxes are not significant. If
there is a material change in state or local tax laws, MassMutual reserves the
right to charge the Separate Account for such taxes, if any, attributable to the
Separate Account.
Policy Proceeds, Premiums, and Loans. MassMutual believes that the Policy meets
- ------------------------------------
the statutory definition of life insurance under Code Section 7702 and hence
receives the same tax treatment as that accorded to fixed benefit life
insurance. Thus, the Death Benefit under the Policy is generally excludable from
the gross income of the Beneficiary under Section 101(a)(1) of the Code. As an
exception to this general rule, where a Policy has been transferred for value,
only the portion of the Death Benefit which is equal to the total consideration
paid for the Policy may be excluded from gross income. The Policyowner is not
deemed to be in constructive receipt of the cash values, including increments
thereon, under the Policy until a full surrender or Withdrawal is made.
Upon a full surrender of a Policy for its Cash Surrender Value the Policyowner
may recognize ordinary income for federal tax purposes. Ordinary income is
computed to be the amount by which the Account Value, unreduced by any
outstanding Policy Debt (which may include unpaid interest), exceeds the
premiums paid but not previously recovered and any other consideration paid for
the Policy.
Decreases in Selected Face Amount and Withdrawals may be taxable depending on
the circumstances. Code Section 7702(f)(7) provides that where a reduction of
future benefits occurs during the first 15 years after a Policy is issued and
where there is a cash distribution associated with that reduction, the
Policyowner may be taxed on all or part of the amount distributed. After 15
years, such cash distributions are not subject to federal income tax, except to
the extent they exceed the total amount of premiums paid but not previously
recovered. Where the provisions of Code Section 7702(f) do not cause a taxable
event, a Withdrawal is taxable only to the extent that it exceeds the
Policyowner's as yet unrecovered premium contributions. MassMutual suggests that
a Policyowner consult with his or her tax adviser in advance of a proposed
decrease in Selected Face Amount or Withdrawal as to the portion, if any, which
would be subject to federal income tax.
A change of Policyowner or the Insured or an exchange or assignment of the
Policy may have tax consequences depending on the circumstances.
MassMutual also believes that under current law any loan received under the
Policy will be treated as Policy Debt of a Policyowner, and that no part of any
loan under a Policy will constitute income to the Policyowner. Under the
"personal" interest limitation provisions of the Code, interest on Policy loans
used for personal purposes, which otherwise meet the requirements of Code
Section 264, will no longer be tax deductible. Other rules may apply to allow
all or part of the interest expense as a deduction if the loan proceeds are used
for "trade or business" or "investment" purposes. See a tax advisor for further
guidance.
If the Policy is owned by a business or corporation, the Code may impose
additional restrictions. The Act limits the interest deduction available for
loans against a business-owned Policy. It imposes an indirect tax upon the
inside build-up of gain in corporate-owned life insurance policies by way of the
corporate alternative minimum tax, for those corporations subject to the
alternative minimum tax. The corporate alternative minimum tax could also apply
to a portion of the amount by which Death Benefits received exceed the Policy's
date of death cash value.
Federal estate and state and local estate, inheritance, and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Policyowner or Beneficiary.
<PAGE>
For complete information on the impact of changes with respect to the Policy and
federal and state tax considerations, a qualified tax advisor should be
consulted.
MassMutual makes no guarantee regarding the future tax treatment of any Policy.
Modified Endowment Contracts. Contrary to the rules described above, loans,
- ----------------------------
collateral assignments, withdrawals, and other amounts distributed under a
"modified endowment contract" are taxable to the extent of any accumulated
income in the Policy. In general, the amount which may be subject to tax is the
excess of the Account Value (both loaned and unloaned) over the previously
unrecovered premiums paid. Death benefits paid under a modified endowment
contract, however, are not taxed any differently from death benefits payable
under other life insurance contracts.
A Policy is a modified endowment contract if it satisfies the definition of life
insurance set out in the Internal Revenue Code, but fails the additional "7-pay
test." A Policy fails this test if the accumulated amount paid under the
contract at any time during the first seven contract years exceeds the total
premiums that would have been payable under a policy providing for guaranteed
benefits upon the payment of seven level annual premiums. A Policy which would
otherwise satisfy the 7-pay test will still be taxed as a modified endowment
contract if it is received in exchange for a modified endowment contract.
Certain changes will require a Policy to be re-tested to determine whether it
has become a modified endowment contract. For example, a reduction in death
benefits during the first seven contract years will cause the Policy to be
re-tested as if it had originally been issued with the reduced death benefit. If
the premiums actually paid into the Policy exceed the limits under the 7-pay
test for a policy with the reduced death benefit, the Policy will become a
modified endowment contract. This change is effective retroactively to the
contract year in which the actual premiums paid exceed the new 7-pay limits.
In addition, a "material change" occurring at any time while the Policy is in
force will require the policy to be re-tested to determine whether it continues
to meet the 7-pay test.
A material change starts a new 7-pay test period. The term "material change"
includes many increases in death benefits. A material change does not include an
increase in death benefits which is attributable to the payment of premiums
necessary to fund the lowest level of death benefits payable during the first
seven contract years, or which is attributable to the crediting of interest or
dividends with respect to such premiums.
Since the Policy provides for flexible premium payments, We will carefully
monitor the Policy to determine whether increases in death benefits or
additional premium payments cause either the start of a new seven-year test
period or the taxation of distributions and loans. All additional premium
payments will be considered.
If any amount is taxable as a distribution of income under a modified endowment
contract, it will also be subject to a 10% penalty tax. Limited exceptions from
the additional penalty tax are available for individual Policyowners. The
penalty tax will not apply to distributions: (i) that are made on or after the
date the taxpayer attains age 59 1/2; or (ii) that are attributable to the
taxpayer's becoming disabled; or (iii) that are part of a series of
substantially equal periodic payments (made not less frequently than annually)
made for the life or life expectancy of the taxpayer. For complete information
with respect to modified endowment contract status, particularly where a Policy
is owned by other than an individual Policyowner, a qualified tax advisor should
be consulted.
<PAGE>
Once a Policy fails the 7-pay test, loans, collateral assignments, withdrawals,
and other distributions occurring in the year of failure and thereafter become
subject to the rules for modified endowment contracts. In addition, a recapture
provision applies to loans and all other distributions received in anticipation
of failing the 7-pay test. Any distribution or loan made within two years prior
to failing the 7-pay test is considered to have been made in anticipation of the
failure.
Under certain circumstances, a loan or other distribution under a modified
endowment contract may be taxable even though it exceeds the amount of income
accumulated in the Policy. For purposes of determining the amount of income
received from a modified endowment contract, the law requires the aggregation of
all modified endowment contracts issued to the same Policyowner by an insurer
and its affiliates within the same calendar year. Therefore, loans and
distributions from any one such Policy are taxable to the extent of the income
accumulated in all the contracts required to be aggregated.
Diversification Standards. To comply with final regulations under Code Section
- -------------------------
817(h) ("Final Regulations"), each Fund or Portfolio of the MML Trust,
Oppenheimer Trust, and Panorama Fund is required to diversify its investments.
The Final Regulations generally require that on the last day of each quarter of
a calendar year no more than 55% of the value of a Trust's assets is represented
by any one investment, no more than 70% is represented by any two investments,
no more than 80% is represented by any three investments, and no more than 90%
is represented by any four investments. A "look-through" rule applies to treat a
pro-rata portion of each asset of the Trust as an asset of the Separate Account.
All securities of the same issuer are treated as a single investment. Each
Government agency or instrumentality, however, is treated as a separate issuer.
With respect to variable life insurance contracts, the general diversification
requirements are modified if any of the assets of the Separate Account are
direct obligations of the United States Treasury. In this case, there is no
limit on the investment that may be made in United States Treasury Securities,
and for purposes of determining whether assets other than United States Treasury
Securities are adequately diversified, the generally applicable percentage
limitations are increased based on the value of the Separate Account's
investment in United States Treasury Securities. Notwithstanding this
modification of the general diversification requirements, the Funds of the
Trusts will be structured to comply with the general diversification standards
because they serve as an investment vehicle for certain variable annuity
contracts which must comply with the general standards.
In connection with the issuance of the temporary regulations prior to the Final
Regulations, the Treasury announced that such temporary regulations did not
provide guidance concerning the extent to which Policyowners may direct their
investments to particular divisions of a separate account. Regulations in this
regard were not issued in connection with the Final Regulations, however. It is
not clear, at this time, what future regulations might provide. It is possible
that if future regulations are issued, the Policy may need to be modified to
comply with such regulations. For these reasons, MassMutual reserves the right
to modify the Policy, as necessary, to prevent the Policyowner from being
considered the owner of the assets of the Separate Account.
MassMutual intends to comply with the Final Regulations to assure that the
Policy continues to qualify as life insurance for federal income tax purposes.
ADDITIONAL PROVISIONS OF THE POLICY
<PAGE>
Paid-up Policy Date. The Paid-up Policy Date is the Policy Anniversary Date
- -------------------
after the Insured's 100th birthday. On this Date and at all times thereafter,
the Selected Face Amount will equal the Account Value, and the Death Benefit
Option will be Death Benefit Option A. As of this Date, the charge for cost of
insurance will be equal to $0 and premium payments will no longer be accepted.
The Policy does not lapse after the Paid-up Policy Date. The payment of planned
Policy premiums does not guarantee that the Policy will continue in force to the
Paid-up Policy Date.
Reinstatement Option. For a period of five (5) years after termination, a
- --------------------
Policyowner can request that We reinstate the Policy during the Insured's
lifetime. We will not reinstate the Policy if it has been returned for its Cash
Surrender Value. Note that a termination or reinstatement may cause the Policy
to become a modified endowment contract.
Before We will reinstate the Policy, We must receive the following:
. A premium payment equal to the amount necessary to produce an Account
Value equal to 3 times the Monthly Deduction for the Policy on the
Monthly Calculation Date on or next following the date of
reinstatement;
. Evidence of insurability satisfactory to us; and
. Where necessary, a signed acknowledgment that the Policy has become a
modified endowment contract.
If We do reinstate the Policy, the Selected Face Amounts for the reinstated
Policy will be the same as it would have been if the Policy had not terminated.
Payment Options. All or part of the Death Benefit or Cash Surrender Value may be
- ---------------
taken in cash or as a series of level payments. Proceeds applied will no longer
be affected by the investment experience of the Divisions or the GPA.
To receive payments, the proceeds to be applied must be at least $2,000. If the
payments under any option are less than $20 each, We reserve the right to make
payments at less frequent intervals or to make a lump sum payment in
satisfaction of Our obligation. Payment options are as described below.
Fixed Amount Payment Option. Each monthly payment is for an agreed fixed amount
- ---------------------------
not less than $10 for each $1,000 applied under the option. Interest of at least
3% per year is credited each month on the unpaid balance and added to it.
Payments continue until the amount We hold runs out.
Fixed Time Payment Option. Equal monthly payments are made for any period
- -------------------------
selected, up to 30 years. The amount of each payment depends on the total amount
applied, the period selected and the interest rate We credit to the unpaid
balance. This interest rate will not be less than 3% per year.
Interest Payment Option. We hold amounts applied under this option and pay
- -----------------------
interest on the unpaid balance of at least 3% per year.
Lifetime Payment Option. Equal monthly payments are based on the life of a named
- -----------------------
person. Payments continue for the lifetime of that person. Three variations are
available:
<PAGE>
Payments for life only;
Payments guaranteed for five, ten or twenty years; or
Payments guaranteed for the amount applied.
Joint Lifetime Payment Option. Equal monthly payments are based on the lives of
- -----------------------------
two named persons. While both named persons are living, one payment is made each
month. When one of the named persons dies, the same payment continues for the
lifetime of the other. Two variations are available:
. Payments guaranteed for 10 years; and
. Payment for two lives only. No specific number of payments is
guaranteed. Under this option there may be one payment if the two
named persons die prior to the second payment.
Joint Lifetime Payment Option with Reduced Payments. Monthly payments are based
- ---------------------------------------------------
on the lives of two named persons. While both named persons are living, one
payment will be made each month. When one dies, payments are reduced by
one-third and will continue for the lifetime of the other.
Withdrawal Rights under Payment Options. If provided in the payment option
- ---------------------------------------
election, all or part of the unpaid balance may be withdrawn or applied under
any other option. Payments which are based on a named person's life may not be
withdrawn.
Beneficiary. A Beneficiary is any person named on our records to receive
- -----------
insurance proceeds after the Insured dies. A Policyowner names the Beneficiary
when he or she or it applies for the Policy. There may be different classes of
beneficiaries, such as primary and secondary. These classes set the order of
payment. There may be more than one Beneficiary in a class.
Any Beneficiary may be named an irrevocable beneficiary. An irrevocable
beneficiary is one whose consent is needed to change that Beneficiary. The
consent of any irrevocable beneficiary is needed to exercise any Policy right
except the right to:
. Change the frequency of premium payments.
. Change the premium payment plan.
. Reinstate the Policy after termination.
If no Beneficiary is living when the Insured dies, unless provided otherwise,
the Death Benefit is paid to the Policyowner or, if deceased, the Policyowner's
estate.
Changing the Policyowner or Beneficiary. The Policyowner or any Beneficiary may
- ---------------------------------------
be changed during the Insured's lifetime by writing to our Home Office. The
change takes effect as of the date of the request, even if the Insured dies
before We receive it. Each change is subject to any payment We made or other
action by MassMutual prior to receipt of the request.
Assignment. The Policy may be assigned as collateral for a loan or other
- ----------
obligation, subject to any outstanding Policy Debt. We will not effectuate the
assignment unless We receive a signed copy of it at
<PAGE>
our Home Office and We consent to the assignment. We are not responsible for the
validity of any assignment.
Any amounts due to an assignee of the Policy which is assigned will be paid in
one sum.
Dividends. Each year MassMutual determines the divisible surplus, or the money
- ---------
available to pay dividends. Each Policy may receive a dividend based upon its
contribution to this divisible surplus. MassMutual does not expect that any
dividends will be paid under the Policies.
Any dividend will be payable on the Policy Anniversary Date.
If the Insured dies after the first Policy Year, the Death Benefit includes a
pro-rata share of any dividend allocated to the Policy for the year death
occurs.
Limits on Our Right to Challenge the Policy. We cannot contest the validity of a
- -------------------------------------------
Certificate after it has been in force during the lifetime of the Insured for a
period of two years from its Issue Date. This same two year period applies to
any increase in the Selected Face Amount. After that We cannot contest its
validity, except for failure to pay premiums.
Misstatement of Age. If the Insured's date of birth as given in the Enrollment
- -------------------
Form is not correct, an adjustment will be made. If the adjustment is made when
the Insured dies, the Death Benefit will reflect the amount provided by the most
recent mortality charge according to the correct age. If the adjustment is made
before the Insured dies, then future Monthly Deductions will be based on the
correct age.
Suicide. If the Insured commits suicide within two years (or different period if
- -------
required by state law) from the Issue Date or an increase in the Selected Face
Amount and while the Policy is in force, We pay a limited Death Benefit in one
sum to the Beneficiary. The limited Death Benefit is the amount of premiums paid
for the Policy, less any Policy Debt or amounts withdrawn.
When We Pay Proceeds. If the Policy has not terminated, payment of the Cash
- --------------------
Surrender Value, loan proceeds or the Death Benefit are made normally within 7
days after We receive all required documents at our Home Office. We can delay
payment of the Cash Surrender Value or any Withdrawal from the Separate Account,
loan proceeds attributable to the Separate Account, or the Death Benefit during
any period that:
It is not reasonably practicable to determine the amount because the New York
Stock Exchange (or its successor) is closed, except for normal weekend or
holiday closings, or trading is restricted; or
the Securities and Exchange Commission (or its successor) determines that an
emergency exists; or
the Securities and Exchange Commission (or its successor) permits Us to delay
payment for the protection of our policy owners; or
We are permitted by state law to delay such payment.
We may delay paying any Cash Surrender Value or loan proceeds based on the GPA
for up to 6 months from the date the request was received at our Home Office. We
can delay payment of the entire Death Benefit if payment is contested. We
investigate all death claims arising within the two-year contestable period.
Upon receiving the information from a completed investigation, We generally make
a determination
<PAGE>
within five working days as to whether the claim should be authorized for
payment. Payments are made promptly after authorization. If payment is delayed
for 10 working days or more from the effective date of surrender or Withdrawal,
We add interest at the same rate as is paid under the Interest Payment Option
for the same period of time (but not less than required by state law). The
minimum amount of such interest is $25.
OPTIONAL BENEFITS OBTAINABLE BY RIDER
This Section is intended to provide only a very brief overview of additional
insurance benefits available by rider. For more information, contact Your
Employer or Your agent.
Your Employer may chose the following supplemental benefits to be available by
Rider under Your Policy.
Waiver of Monthly Charges Rider. With this rider We will waive the Monthly
- -------------------------------
Deduction on each Monthly Calculation Date for at least two years in the event
of the Insured's total disability which begins before age 65 and such total
disability continues for at least 6 months. The waiver will continue up to the
Insured's attained age 65, but in any event will never be less than two years.
Your Employer determines whether this Rider becomes available under Your Policy.
Accelerated Benefits Rider. This rider permits part of the proceeds of the
- --------------------------
Policy to be available before death if the Insured becomes terminally ill.
MassMutual will require proof, satisfactory to Us, that the Insured is
terminally ill and is not expected to live longer than 12 months prior to
activation of the rider. In return for the advanced payment, a lien is
established against the Policy, equal to the amount of the accelerated benefit.
No interest is charged against the lien. This Rider is available under all
Policies.
Accidental Death and Dismemberment Rider. With this rider We will pay a benefit
- ----------------------------------------
equal to a percentage of the Accidental Death and Dismemberment Rider Face
Amount specified in the following table if the Insured dies or becomes
dismembered due to accidental causes prior to attaining age 65. The Rider's
Selected Face Amount will be the lesser of the Policy's Selected Face Amount or
$500,000. Your Employer determines whether this Rider becomes available under
Your Policy.
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Loss of Life Percent of Rider Face
------------ ---------------------
Amount Payable
--------------
----------------------------------------------------------------------
<S> <C>
Life 100
----------------------------------------------------------------------
Both Limbs 100
----------------------------------------------------------------------
Both Arms 100
----------------------------------------------------------------------
Sight of Both Eyes 100
----------------------------------------------------------------------
One Limb and Sight of One Eye 100
----------------------------------------------------------------------
One Arm and Sight of One Eye 100
----------------------------------------------------------------------
One Limb or One Arm 50
----------------------------------------------------------------------
Vision of One Eye 50
----------------------------------------------------------------------
</TABLE>
RECORDS AND REPORTS
MassMutual maintains all records and accounts relating to the Separate Account
and the GPA. Each year within 30 days after the Policy Anniversary, We will mail
to the Policyowner a report showing the Account Value at the beginning of the
previous Policy Year, all premiums paid since that time, all additions to and
<PAGE>
deductions from Account Value during the year, and the Account Value, Death
Benefit, Cash Surrender Value and Policy Debt as of the latest Policy
Anniversary. This report contains any additional information required by any
applicable law or regulation.
SALES AND OTHER AGREEMENTS
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield, MA
01144-1013, is the principal underwriter of the Policy pursuant to an
Underwriting and Servicing Agreement to which MML Distributors, MassMutual and
the Separate Account are parties. MML Investors Services, Inc. ("MMLISI"), also
located at 1414 Main Street, Springfield, MA 01144-1013, serves as the
co-underwriter of the Policies. Both MML Distributors and MMLISI are registered
with the Securities and Exchange Commission (the "SEC") as broker-dealers under
the Securities Exchange Act of 1934 and are members of the National Association
of Securities Dealers, Inc. (the "NASD").
MML Distributors may enter into selling agreements with other broker-dealers
which are registered with the SEC and are members of the NASD ("selling
brokers"). We sell the Policies through agents who are licensed by state
insurance officials to sell the Policies. These agents are also registered
representatives of selling brokers or of MMLISI.
When a supplement to the Application requesting one of the Policies is
completed, it is submitted to us. We or the selling broker perform suitability
review and, in some cases, We perform insurance underwriting. We determine
whether to accept or reject the application for the Policy and the Insured's
risk classification. If the application is not accepted, We will refund any
premium that has been paid.
Both MML Distributors and MMLISI receive compensation for their activities as
underwriters of the policies of the Separate Account. MML Distributors does
business under different variations of its name; including the name MML
Distributors, L.L.C. in the states of Illinois, Michigan, Oklahoma, South Dakota
and Washington; and the name MML Distributors, Limited Liability Company in the
states of Maine, Ohio and West Virginia.
Commissions Schedule. Agents or selling brokers receive commissions as a
- --------------------
percentage of the premium paid. General Agents may also receive compensation as
a percentage of premium paid. Commissions paid will not exceed 24% of Modal Term
Premiums, plus 3% of premiums paid in excess of the Modal Term Premium, plus
0.20% of the Policy's average annual Variable Account Value.
Agents and General Agents may receive commissions at lower rates on Policies
sold to replace existing insurance issued by MassMutual or any of its
subsidiaries.
Bonding Arrangement. An insurance company blanket bond is maintained providing
- -------------------
$25,000,000 coverage for officers and employees of MassMutual (subject to a
$350,000 deductible) and $25,000,000 coverage for MassMutual's general agents
and agents (also subject to a $350,000 deductible).
LEGAL PROCEEDINGS
We are currently not involved in any material legal proceedings that adversely
impact the Policy.
EXPERTS
<PAGE>
The audited statutory financial statements of MassMutual as of December 31, 1996
and 1995 and for each of the three years in the period ended December 31, 1996
included in this Prospectus, have been so included in reliance on the reports,
which include explanatory paragraphs relating to the use of statutory accounting
practices rather than generally accepted accounting principles and the change in
their opinion for the prior years presented, of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
FINANCIAL STATEMENTS
SEPARATE ACCOUNT FINANCIAL STATEMENTS
No financial statements of the GVUL Segment of the Separate Account have been
included herein because as of the date of this prospectus, the GVUL Segment had
not commenced operation.
MASSMUTUAL FINANCIAL STATEMENTS
The financial statements of MassMutual included herein should be considered only
as bearing upon the ability of MassMutual to meet its obligations under the
Policy.
[The Financial Statements filed in Pre-Effective Amendment No. 2 on August 4,
1997 are hereby incorporated by reference]
<PAGE>
APPENDIX A
Illustrations of Death Benefits (Option A & Option B), Cash Surrender Values and
Accumulated Premiums
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit and cash surrender value could vary over an extended
period of time, assuming the Funds experience hypothetical gross rates of
investment return (i.e., investment income and capital gains and losses,
realized or unrealized), equivalent to constant gross annual rates of 0%, 6% and
12%. Table 1 shows Death Benefit Option A using the current schedule of charges.
Table 2 shows Death Benefit Option A using the guaranteed schedule of charges.
Table 3 shows Death Benefit Option B using the current schedule of charges.
Table 4 shows Death Benefit Option B using the guaranteed schedule of
charges.
The tables are based on the following assumptions: 1) the Policyowner is issue
age 45; 2) the Policyowner has requested a level Selected Face Amount of
$250,000; 3) no Policy loans have been made, 4) the Employer has selected an
Annual Modal Term; 5) the Modal Term Premium is always allocated to the
Guaranteed Principal Account; 6) the Guaranteed Principal Account credits the
Modal Term Premium interest at an annual rate of 3%; and 7) and the Policyowner
makes annual Premium payments of $4,000 in excess of the Modal Term Premium for
20 years which are allocated to the Separate Account.
These tables will assist in the comparison of death benefits and cash surrender
values for the Policy with those under other variable life policies which may be
issued by MassMutual or other companies.
The death benefits and cash surrender values for a Policy would be different
from the amount shown if the rates of return of the Funds averaged 0%, 6% and
12% over a period of years but varied above and below that average in individual
Policy Years. They would also differ if any Policy loan were made during the
period of time illustrated. They would also be different depending upon the
allocation of investment value to each Division, if the rates of return for all
the Funds averaged 0%, 6% or 12% but varied above or below that average for
particular Funds.
The tables assume that the Modal Term Premium is credited interest at a
guaranteed rate of 3%. The current credited rate is higher than 3%. Therefore,
if current rates were used, the cash surrender values for the policy illustrated
in the tables would be higher.
The death benefits and cash surrender values shown in Table 1 & 3 reflect a
State Premium Tax deduction of 2% and a DAC Tax deduction of 0.25%, MML Trust,
Oppenheimer Trust, and Panorama Fund level expenses of 0.83% on an annual basis,
of the net assets of the MML Trust, Oppenheimer Trust, and Panorama Fund shares
held by the Separate Account (This unweighted average reflects current Fund
level expenses), plus the following current charges:
1. A Sales Load of 0.75% of Premium.
2. Administrative Charge, equal to a monthly $5.25 per Policy.
3. Cost of Insurance Protection, based on the current guaranteed issue rates
being charged by the Company.
<PAGE>
4. Mortality and Expense Risk Charge, which is equal to 0.75% on an annual
basis, of the net asset value of the Fund shares held by the Separate
Account.
The death benefits and cash surrender values shown in Table 2 & 4 reflect a
State Premium Tax deduction of 2% and a DAC Tax deduction of 0.25%, MML Trust,
Oppenheimer Trust, and Panorama Fund level expenses of 0.83% on an annual basis,
of the net assets of the MML Trust, Oppenheimer Trust, and Panorama Fund shares
held by the Separate Account (This unweighted average reflects current Fund
level expenses), plus the following guaranteed charges:
1. A Sales Load of 5% of Premium (MassMutual will establish a Sales Load
between 0.75% to 5% of Premium for a Policy upon its issuance. However,
once the Sales Load is established, it will not change for the life of the
Policy.)
2. Administrative Charge, equal to $9.00 per month.
3. Cost of Insurance Charge, based on 125% of the 1980 CSO Mortality
Table.
4. Mortality and Expense Risk Charge, which is equal to 1.00% on an annual
basis, of the net asset value of the Fund shares held by the Separate
Account.
MassMutual has agreed to bear expenses of the MML Equity Index Fund (other than
the management fee, interest, taxes, brokerage commissions and extraordinary
expenses) in excess of 0.11% of average daily net asset value of the Fund
through April 30, 1998. MassMutual expects that it will be required to reimburse
the expenses of the MML Equity Index Fund pursuant to this undertaking in
1997.
Currently no charge is made against the Separate Account for federal income
taxes but MassMutual reserves the right to charge the Separate Account for
federal income taxes attributable to the Separate Account if such taxes are
imposed in the future.
The fifth column of each table shows the amounts which would accumulate if an
amount equal to the annual premium were invested to earn interest after taxes,
of 5% per year, compounded annually.
<PAGE>
TABLE 1
VARIABLE RIDER TO FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE CERTIFICATE
Age 45, Unismoker, Unisex
$250,000 Selected Face Amount - All Years
Assumes 2 Types of Premium Received on an Annual Basis:
. Modal Term Premium, plus
. $4,000 Premium
Using Current Schedule of Charges
Illustrating Death Benefit Option A
Assumes Mandatory Employee Participation
Modal Term Premiums allocated to Guaranteed Principal Account
credited at 3% annualized
<TABLE>
<CAPTION>
Death Benefit (Option A) Cash Surrender Value
Assuming Hypothetical Assuming Hypothetical
Gross Annual Investment Gross Annual Investment
Return of Return of
End of Modal Term Additional Total Premiums
Policy Premium Premium Premium Accumulated 0% 6% 12% 0% 6% 12%
Year Paid at 5%
Interest
Per Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 467 4000 4467 4690 250000 250000 250000 3826 4055 4285
2 502 4000 4502 9652 250000 250000 250000 7600 8294 9016
3 535 4000 4535 14896 250000 250000 250000 11323 12727 14242
4 605 4000 4605 20476 250000 250000 250000 15000 17365 20018
5 641 4000 4641 26373 250000 250000 250000 18633 22217 26398
6 707 4000 4707 32634 250000 250000 250000 22225 27298 33453
7 742 4000 4742 39245 250000 250000 250000 25776 32616 41248
8 811 4000 4811 46259 250000 250000 250000 29294 38189 49870
9 915 4000 4915 53733 250000 250000 250000 32785 44038 59415
10 989 4000 4989 61658 250000 250000 250000 36250 50174 69977
11 1051 4000 5051 70044 250000 250000 250000 39692 56611 81663
12 1164 4000 5164 78968 250000 250000 250000 43121 63379 94611
13 1259 4000 5259 88439 250000 250000 250000 46540 70493 108953
14 1404 4000 5404 98535 250000 250000 255972 49963 77991 124864
15 1542 4000 5542 109281 250000 250000 284793 53396 85897 142397
16 1744 4000 5744 120776 250000 250000 313701 56861 94263 161701
17 1921 4000 5921 133032 250000 250000 347529 60359 103113 182910
18 2137 4000 6137 146127 250000 250000 381523 63910 112499 206229
19 2372 4000 6372 160124 250000 250000 417355 67531 122474 231864
20(age 65) 2603 4000 6603 175064 250000 250000 457625 71230 133081 260014
21 0 0 0 183817 250000 250000 488390 68373 137465 283948
22 0 0 0 193008 250000 250000 520987 65176 141939 310111
23 0 0 0 202658 250000 250000 555615 61648 146541 338790
24 0 0 0 212791 250000 250000 595994 57737 151279 370183
25 0 0 0 223431 250000 250000 635241 53386 156160 404612
26 0 0 0 234602 250000 250000 681168 48525 161197 442317
27 0 0 0 246332 250000 251266 730269 43079 166402 483622
28 0 0 0 258649 250000 254228 782757 36960 171776 528890
29 0 0 0 271581 250000 257098 838857 30060 177309 578522
30 0 0 0 285160 250000 259849 898808 22246 182993 632963
31 0 0 0 299418 250000 264299 969545 13372 188785 692532
32 0 0 0 314389 250000 268631 1045513 3166 194660 757618
33 0 0 0 330109 0 270886 1119001 0 200656 828890
34 0 0 0 346614 0 274917 1205840 0 206705 906647
35 0 0 0 363945 0 278774 1298854 0 212805 991492
40 0 0 0 464496 0 300585 1905678 0 244378 1549331
45 0 0 0 592828 0 324412 2827119 0 277275 2416341
50 0 0 0 756615 0 348726 4215315 0 314168 3797581
</TABLE>
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH BENEFITS AND CASH
SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THE AMOUNTS SHOWN IF THE
RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT VARIED ABOVE
OR BELOW THAT AVERAGE IN INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT,
DEPENDING ON THE ALLOCATION OF INVESTMENT VALUE TO EACH DIVISION OF THE SEPARATE
ACCOUNT, IF THE RATES OF RETURN OVER ALL DIVISIONS AVERAGED 0%, 6% OR 12% BUT
VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. THEY WOULD ALSO
DIFFER IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATIONS CAN BE
MADE BY MASSMUTUAL OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
TABLE 2
VARIABLE RIDER TO FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE CERTIFICATE
Age 45, Unismoker, Unisex
$250,000 Selected Face Amount - All Years
Assumes 2 Types of Premium Received on an Annual Basis:
. Modal Term Premium, plus
. $4,000 Premium
Using Guaranteed Schedule of Charges
Illustrating Death Benefit Option A
Assumes Mandatory Employee Participation
Modal Term Premiums allocated to Guaranteed Principal Account
credited at 3% annualized
<TABLE>
<CAPTION>
Death Benefit (Option A) Cash Surrender Value
Assuming Hypothetical Assuming Hypothetical
Gross Annual Investment Gross Annual Investment
Return of Return of
End of Modal Term Additional Total Premiums
Policy Premium Premium Premium Accumulated 0% 6% 12% 0% 6% 12%
Year Paid at 5%
Interest
Per Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 467 4000 4467 4690 250000 250000 250000 2615 2771 2927
2 502 4000 4502 9652 250000 250000 250000 5123 5591 6078
3 535 4000 4535 14896 250000 250000 250000 7522 8458 9470
4 605 4000 4605 20476 250000 250000 250000 9841 11403 13158
5 641 4000 4641 26373 250000 250000 250000 12041 14386 17127
6 707 4000 4707 32634 250000 250000 250000 14140 17424 21423
7 742 4000 4742 39245 250000 250000 250000 16094 20476 26030
8 811 4000 4811 46259 250000 250000 250000 17923 23558 31001
9 915 4000 4915 53733 250000 250000 250000 19640 26685 36387
10 989 4000 4989 61658 250000 250000 250000 21202 29814 42186
11 1051 4000 5051 70044 250000 250000 250000 22592 32925 48421
12 1164 4000 5164 78968 250000 250000 250000 23849 36059 55185
13 1259 4000 5259 88439 250000 250000 250000 24952 39194 62513
14 1404 4000 5404 98535 250000 250000 250000 25940 42373 70512
15 1542 4000 5542 109281 250000 250000 250000 26785 45571 79234
16 1744 4000 5744 120776 250000 250000 250000 27516 48825 88804
17 1921 4000 5921 133032 250000 250000 250000 28076 52082 99271
18 2137 4000 6137 146127 250000 250000 250000 28443 55339 110757
19 2372 4000 6372 160124 250000 250000 250000 28566 58575 123402
20(age 65) 2603 4000 6603 175064 250000 250000 250000 28376 61755 137362
21 0 0 0 183817 250000 250000 251294 21074 58126 146101
22 0 0 0 193008 250000 250000 261716 12642 53713 155783
23 0 0 0 202658 250000 250000 272803 2916 48410 166343
24 0 0 0 212791 0 250000 286231 0 42076 177783
25 0 0 0 223431 0 250000 298712 0 34519 190262
26 0 0 0 234602 0 250000 313841 0 25479 203793
27 0 0 0 246332 0 250000 329865 0 14606 218454
28 0 0 0 258649 0 250000 346807 0 1443 234329
29 0 0 0 271581 0 0 364707 0 0 251522
30 0 0 0 285160 0 0 383646 0 0 270173
31 0 0 0 299418 0 0 406349 0 0 290249
32 0 0 0 314389 0 0 430435 0 0 311910
33 0 0 0 330109 0 0 453143 0 0 335662
34 0 0 0 346614 0 0 480753 0 0 361468
35 0 0 0 363945 0 0 510325 0 0 389561
40 0 0 0 464496 0 0 700181 0 0 569253
45 0 0 0 592828 0 0 979596 0 0 837262
50 0 0 0 756615 0 0 1397295 0 0 1258824
</TABLE>
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH BENEFITS AND CASH
SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THE AMOUNTS SHOWN IF THE
RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT VARIED ABOVE
OR BELOW THAT AVERAGE IN INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT,
DEPENDING ON THE ALLOCATION OF INVESTMENT VALUE TO EACH DIVISION OF THE SEPARATE
ACCOUNT, IF THE RATES OF RETURN OVER ALL DIVISIONS AVERAGED 0%, 6% OR 12% BUT
VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. THEY WOULD ALSO
DIFFER IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATIONS CAN BE
MADE BY MASSMUTUAL OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
TABLE 3
VARIABLE RIDER TO FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE CERTIFICATE
Age 45, Unismoker, Unisex
$250,000 Selected Face Amount - All Years
Assumes 2 Types of Premium Received on an Annual Basis:
. Modal Term Premium, plus
. $4,000 Premium
Using Current Schedule of Charges
Illustrating Death Benefit Option B
Assumes Mandatory Employee Participation
Modal Term Premiums allocated to Guaranteed Principal Account
credited at 3% annualized
<TABLE>
<CAPTION>
Death Benefit (Option B) Cash Surrender Value
Assuming Hypothetical Assuming Hypothetical Gross
Gross Annual Investment Annual Investment Return of
Return of
End of Modal Term Additional Total Premiums
Policy Premium Premium Premium Accumulated 0% 6% 12% 0% 6% 12%
Year Paid at 5%
Interest
Per Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 467 4000 4467 4690 253819 254048 254278 3819 4048 4278
2 502 4000 4502 9652 257579 258273 258994 7579 8273 8994
3 535 4000 4535 14896 261280 262680 264193 11280 12680 14193
4 605 4000 4605 20476 264922 267280 269925 14922 17280 19925
5 641 4000 4641 26373 268508 272078 276245 18508 22078 26245
6 707 4000 4707 32634 272038 277086 283212 22038 27086 33212
7 742 4000 4742 39245 275513 282310 290894 25513 32310 40894
8 811 4000 4811 46259 278933 287762 299362 28933 37762 49362
9 915 4000 4915 53733 282300 293450 308699 32300 43450 58699
10 989 4000 4989 61658 285614 299386 318993 35614 49386 68993
11 1051 4000 5051 70044 288876 305579 330341 38876 55579 80341
12 1164 4000 5164 78968 292088 312042 342853 42088 62042 92853
13 1259 4000 5259 88439 295249 318785 356647 45249 68785 106647
14 1404 4000 5404 98535 298361 325821 371855 48361 75821 121855
15 1542 4000 5542 109281 301424 333163 388622 51424 83163 138622
16 1744 4000 5744 120776 304440 340823 407107 54440 90823 157107
17 1921 4000 5921 133032 307409 348817 427487 57409 98817 177487
18 2137 4000 6137 146127 310331 357158 449957 60331 107158 199957
19 2372 4000 6372 160124 313208 365862 474729 63208 115862 224729
20(age 65) 2603 4000 6603 175064 316040 374944 502041 66040 124944 252041
21 0 0 0 183817 312283 377646 525149 62283 127646 275149
22 0 0 0 193008 308091 380134 550454 58091 130134 300454
23 0 0 0 202658 303497 382449 578262 53497 132449 328262
24 0 0 0 212791 298453 384556 608822 48453 134556 358822
25 0 0 0 223431 292906 386413 642414 42906 136413 392414
26 0 0 0 234602 286800 387975 679345 36800 137975 429345
27 0 0 0 246332 280076 389197 719959 30076 139197 469959
28 0 0 0 258649 272672 390030 764637 22672 140030 514637
29 0 0 0 271581 264514 390142 817492 14514 140412 563788
30 0 0 0 285160 255517 390273 877322 5517 140273 617832
31 0 0 0 299418 0 389545 947965 0 139545 677118
32 0 0 0 314389 0 388053 1023872 0 138053 741936
33 0 0 0 330109 0 385561 1097474 0 135561 812943
34 0 0 0 346614 0 381907 1184292 0 131907 890445
35 0 0 0 363945 0 376914 1277307 0 126914 975044
40 0 0 0 464496 0 328075 1884085 0 78075 1531776
45 0 0 0 592828 0 0 2805598 0 0 2397947
50 0 0 0 756615 0 0 4194113 0 0 3778480
</TABLE>
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH BENEFITS AND CASH
SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THE AMOUNTS SHOWN IF THE
RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT VARIED ABOVE
OR BELOW THAT AVERAGE IN INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT,
DEPENDING ON THE ALLOCATION OF INVESTMENT VALUE TO EACH DIVISION OF THE SEPARATE
ACCOUNT, IF THE RATES OF RETURN OVER ALL DIVISIONS AVERAGED 0%, 6% OR 12% BUT
VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. THEY WOULD ALSO
DIFFER IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATIONS CAN BE
MADE BY MASSMUTUAL OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
TABLE 4
VARIABLE RIDER TO FLEXIBLE PREMIUM ADJUSTABLE LIFE INSURANCE CERTIFICATE
Age 45, Unismoker, Unisex
$250,000 Selected Face Amount - All Years
Assumes 2 Types of Premium Received on an Annual Basis:
. Modal Term Premium, plus
. $4,000 Premium
Using Guaranteed Schedule of Charges
Illustrating Death Benefit Option B
Assumes Mandatory Employee Participation
Modal Term Premiums allocated to Guaranteed Principal Account
credited at 3% annualized
<TABLE>
<CAPTION>
Death Benefit (Option B) Cash Surrender Value
Assuming Hypothetical Assuming Hypothetical
Gross Annual Investment Gross Annual Investment
Return of Return of
End of Modal Term Additional Total Premiums
Policy Premium Premium Premium Accumulated 0% 6% 12% 0% 6% 12%
Year Paid at 5%
Interest
Per Year
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 467 4000 4467 4690 252595 252751 252906 2595 2751 2906
2 502 4000 4502 9652 255065 255531 256016 5065 5531 6016
3 535 4000 4535 14896 257406 258335 259339 7406 8335 9339
4 605 4000 4605 20476 259642 261188 262926 9642 11188 12926
5 641 4000 4641 26373 261734 264047 266754 11734 14047 16754
6 707 4000 4707 32634 263694 266923 270857 13694 16923 20857
7 742 4000 4742 39245 265475 269765 275211 15475 19765 25211
8 811 4000 4811 46259 267092 272583 279850 17092 22583 29850
9 915 4000 4915 53733 268552 275380 284809 18552 25380 34809
10 989 4000 4989 61658 269809 278104 290065 19809 28104 40065
11 1051 4000 5051 70044 270839 280724 295617 20839 30724 45617
12 1164 4000 5164 78968 271678 283267 301529 21678 33267 51529
13 1259 4000 5259 88439 272299 285700 307804 22299 35700 57804
14 1404 4000 5404 98535 272738 288050 314514 22738 38050 64514
15 1542 4000 5542 109281 272960 290275 321658 22960 40275 71658
16 1744 4000 5744 120776 272985 292387 329301 22985 42387 79301
17 1921 4000 5921 133032 272749 294308 337414 22749 44308 87414
18 2137 4000 6137 146127 272220 296000 346017 22220 46000 96017
19 2372 4000 6372 160124 271337 297405 355129 21337 47405 105129
20(age 65) 2603 4000 6603 175064 270025 298451 364764 20025 48451 114764
21 0 0 0 183817 261691 292548 368422 11691 42548 118422
22 0 0 0 193008 252387 285752 372262 2387 35752 122262
23 0 0 0 202658 0 277998 376331 0 27998 126331
24 0 0 0 212791 0 269203 380670 0 19203 130670
25 0 0 0 223431 0 259247 385294 0 9247 135294
26 0 0 0 234602 0 0 390198 0 0 140198
27 0 0 0 246332 0 0 395341 0 0 145341
28 0 0 0 258649 0 0 400666 0 0 150666
29 0 0 0 271581 0 0 406119 0 0 156119
30 0 0 0 285160 0 0 411684 0 0 161684
31 0 0 0 299418 0 0 417389 0 0 167389
32 0 0 0 314389 0 0 423311 0 0 173311
33 0 0 0 330109 0 0 429573 0 0 179573
34 0 0 0 346614 0 0 436295 0 0 186295
35 0 0 0 363945 0 0 443545 0 0 193545
40 0 0 0 464496 0 0 485986 0 0 235986
45 0 0 0 592828 0 0 540828 0 0 290828
50 0 0 0 756615 0 0 622869 0 0 372869
</TABLE>
<PAGE>
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
AND ELSEWHERE IN THIS PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED
A REPRESENTATION OF PAST OR FUTURE INVESTMENT RATES OF RETURN. ACTUAL RATES OF
RETURN MAY BE MORE OR LESS THAN THOSE SHOWN. THE DEATH BENEFITS AND CASH
SURRENDER VALUES FOR A POLICY WOULD BE DIFFERENT FROM THE AMOUNTS SHOWN IF THE
RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A PERIOD OF YEARS, BUT VARIED ABOVE
OR BELOW THAT AVERAGE IN INDIVIDUAL POLICY YEARS. THEY WOULD ALSO BE DIFFERENT,
DEPENDING ON THE ALLOCATION OF INVESTMENT VALUE TO EACH DIVISION OF THE SEPARATE
ACCOUNT, IF THE RATES OF RETURN OVER ALL DIVISIONS AVERAGED 0%, 6% OR 12% BUT
VARIED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL DIVISIONS. THEY WOULD ALSO
DIFFER IF ANY POLICY LOAN WERE MADE DURING THE PERIOD. NO REPRESENTATIONS CAN BE
MADE BY MASSMUTUAL OR THE FUNDS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
<PAGE>
APPENDIX B
----------
MODAL TERM PREMIUM CALCULATION
The Modal Term Premium is an estimate of the premium that will be sufficient to
cover the Premium Deduction and the Monthly Deduction for the Modal Term. It
equals the Monthly Deduction(s) during the Modal Term divided by 1 less the
Premium Deduction discounted at a rate no lower than the monthly equivalent of
the minimum annual interest rate for the Guaranteed Principal Account.
Example:
a. Modal Term: 3 Months
b. Premium Deduction: 0.75%
c. Annual Interest Rate
Used For Discounting
Monthly Deduction(s): 5%
d. Monthly Deduction In Month 1: $100
e. Monthly Deduction In Month 2: $110
f. Monthly Deduction In Month 3: $120
g. Sum of Monthly Charges
Discounted At Monthly
Equivalent Of 5%: $328.58
h. Modal Term Premium
(g. divided by 1 less Premium
Deduction): $331.06
-------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission (the "Commission") such supplementary and
periodic information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
Article V of the Bylaws of MassMutual provide for indemnification of directors
and officers as follows:
Article V. Subject to limitations of law, the Company shall indemnify:
(a) each director, officer or employee;
(b) any individual who serves at the request of the Company as a
Secretary, a director, board member, committee member, officer or
employee of any organization or any separate investment account; or
(c) any individual who serves in any capacity with respect to any
employee benefit plan; from and against all loss, liability and expense
imposed upon or incurred by such person in connection with any action,
claim or proceeding of any nature whatsoever, in which such person may
be involved or with which he or she may be threatened, by reason of any
alleged act, omission or otherwise while serving in any such capacity.
Indemnification shall be provided although the person no longer serves in such
capacity and shall include protection for the person's heirs and legal
representatives. Indemnities hereunder shall include, but not be limited to, all
costs and reasonable counsel fees, fines, penalties, judgments or awards of any
kind, and the amount of reasonable settlements, whether or not payable to the
Company or to any of the other entities described in the preceding paragraph, or
to the policyholders or security holders thereof
Notwithstanding the foregoing, no indemnification shall be provided with respect
to:
(1) any matter as to which the person shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable belief that
his or her action was in the best interests of the Company or, to the
extent that such matter relates to service with respect to any employee
benefit plan, in the best interests of the participants or beneficiaries
of such employee benefit plan;
(2) any liability to any entity which is registered as an investment
company under the Federal Investment Company Act of 1940 or to the
security holders thereof, where the
<PAGE>
basis for such liability is willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of office; and
(3) any action, claim or proceeding voluntarily initiated by any person
seeking indemnification, unless such action, claim or proceeding had
been authorized by the Board of Directors or unless such person's
indemnification is awarded by vote of the Board of Directors.
In any matter disposed of by settlement or in the event of an adjudication which
in the opinion of the General Counsel or his delegate does not make a sufficient
determination of conduct which could preclude or permit indemnification in
accordance with the preceding paragraphs (1), (2) and (3), the person shall be
entitled to indemnification unless, as determined by the majority of the
disinterested directors or in the opinion of counsel (who may be an officer of
the Company or outside counsel employed by the Company), such person's conduct
was such as precludes indemnification under any of such paragraphs.
The Company may at its option indemnify for expenses incurred in connection with
any action or proceeding in advance of its final disposition, upon receipt of a
satisfactory undertaking for repayment if it be subsequently determined that the
person thus indemnified is not entitled to indemnification under this Article V.
Insofar as indemnification for liability arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATION UNDER SECTION 26(e)(2)(A)
OF THE INVESTMENT COMPANY ACT OF 1940
Massachusetts Mutual Life Insurance Company hereby represents that fees and
charges deducted under the Variable Account Rider to the Group Universal Life
Insurance Policy Certificate described in this Registration Statement and
deducted under the Rider, in the aggregate, are reasonable in relation to the
services rendered, the expenses expected to be incurred, and the risks assumed
by Massachusetts Mutual Life Insurance Company.
<PAGE>
CONTENTS OF THE REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet.
Cross-reference to items required by Form N-8B-2.
The prospectus consists of 51 pages.
The undertaking to file reports.
The undertaking pursuant to Rule 484 under the Securities Act of 1933.
Representation under Section 26(e)(2)(a) of the Investment Company Act of 1940.
The signatures.
Written consents of the following persons:
1. Coopers & Lybrand, L.L.P.
2. Actuarial consent.
3. Counsel opining as to the legality of securities being registered.
4. Opinion opining as to actuarial matters contained in the Registration
Statement by John Valencia, Assistant Vice President.
The following exhibits:
1. Exhibit 1
(Exhibits required by paragraph A of the instructions to Form N-8B-2)
(1) (a) Resolution of the Board of Directors of Massachusetts Mutual
Life Insurance Company authorizing the establishment of the
Separate Account.*
(b) Resolution of the Board of Directors of Massachusetts Mutual
Life Insurance Company authorizing the establishment of the
GVUL Segment of Massachusetts Mutual Variable Life Separate
Account I.*
(2) Not Applicable.
(3) (a) Form of Distribution Servicing Agreement between MML
Distributors, LLC, and MassMutual.*
(b) Form of Co-Underwriting Agreement between MML Investors
Services, Inc. and MassMutual.*
<PAGE>
(c) Form of Broker Dealer Selling Agreement.*
(4) Not Applicable.
(5) Form of Group Flexible Premium Adjustable Life Insurance
Certificate To Age 95 with Variable Rider.*
(6) Organizational documents of the Company.
(a) Certificate of Incorporation of MassMutual.*
(b) By-Laws of MassMutual.*
(7) Not Applicable.
(8) (a) Form of Participation Agreement with Oppenheimer Variable
Account Funds.*
(b) Form of Participation Agreement with Panorama Series Fund,
Inc.*
(9) Not Applicable.
(10) (a) Form of Enrollment Form.**
(b) Form of Application.**
(c) Form of Variable Account Rider is included in Exhibit 1 above.
2. Opinion and Consent of Counsel as to the legality of the securities
being registered.**
3. No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I.
4. Not Applicable.
5. Opinion and consent of John Valencia opining as to actuarial matters
pertaining to the securities being registered.**
6. Procedures Memorandum pursuant to Rule 6e-3(T)(b)(12)(iii) under the
Investment Company Act of 1940.**
7. Consent of Independent Accountants.**
8. Powers of Attorney.* Power of Attorney for Joseph Zubretsky.**
<PAGE>
27. Financial Data Schedule. [to be filed after GVUL Segment of Separate
Account commences operation].
*Filed with Registrant's Initial Registration Statement on February 28, 1997.
**Filed with Registrant's Pre-Effective Amendment No. 2 on August 4, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Massachusetts Mutual Variable Life Separate Account I has caused this Pre-
Effective Amendment Number 3 to the Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized, all in the city of
Springfield and the Commonwealth of Massachusetts, on the 14th day of August,
1997.
MASSACHUSETTS MUTUAL VARIABLE LIFE SEPARATE ACCOUNT I
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(Depositor)
By: /s/ Thomas B. Wheeler*
---------------------
Thomas B. Wheeler, Chief Executive Officer
Massachusetts Mutual Life Insurance Company
/s/ Richard M. Howe
- -------------------
*Richard M. Howe - On August 14, 1997, as Attorney-in-Fact pursuant to powers of
attorney previously filed.
As required by the Securities Act of 1933, this Pre-Effective Amendment Number 3
to the Registration Statement has been signed by the following person in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Thomas B. Wheeler* Chief Executive Officer and August 14, 1997
--------------------- Chairman of the Board
Thomas B. Wheeler
/s/ John J. Pajak* President and Chief Operating August 14, 1997
----------------- Officer
John J. Pajak
/s/ Joseph Zubretsky* Chief Financial Officer & Chief August 14, 1997
-------------------- Accounting Officer
Joseph Zubretsky
/s/ Roger G. Ackerman* Director August 14, 1997
---------------------
Roger G. Ackerman
/s/ James R. Birle* Director August 14, 1997
------------------
James R. Birle
/s/ Frank C. Carlucci, III* Director August 14, 1997
--------------------------
Frank C. Carlucci, III
/s/ Gene Chao* Director August 14, 1997
-------------
Gene Chao
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Patricia Diaz Dennis* Director August 14, 1997
------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director August 14, 1997
-----------------
Anthony Downs
/s/ James L. Dunlap* Director August 14, 1997
-------------------
James L. Dunlap
/s/ William B. Ellis* Director August 14, 1997
--------------------
William B. Ellis
/s/ Robert M. Furek* Director August 14, 1997
-------------------
Robert M. Furek
/s/ Charles K. Gifford* Director August 14, 1997
----------------------
Charles K. Gifford
/s/ William N. Griggs* Director August 14, 1997
---------------------
William N. Griggs
/s/ George B. Harvey* Director August 14, 1997
--------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director August 14, 1997
--------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director August 14, 1997
--------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director August 14, 1997
------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director August 14, 1997
-------------------
John F. Maypole
/s/ Donald F. McCullough* Director August 14, 1997
------------------------
Donald F. McCullough
/s/ Alfred M. Zeien* Director August 14, 1997
-------------------
Alfred M. Zeien
</TABLE>
/s/ Richard M. Howe
- -------------------
*Richard M. Howe - On August 14, 1997, as Attorney-in-Fact pursuant to powers of
attorney previously filed.
