<PAGE>
Registration No. 33-87904
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 6 TO FORM S-6
FOR REGISTRATION UNDER THE SECURITIES
ACT OF 1933 OF SECURITIES OF
UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
A. Exact name of Trust: Massachusetts Mutual
Variable Life Separate
Account I
B. Name of Depositor: Massachusetts Mutual Life
Insurance Company
C. Complete address of 1295 State Street
Depositor's principal Springfield, MA 01111
executive offices:
It is proposed that this filing will become effective (check appropriate
box)
immediately upon filing pursuant to
----- paragraph (b) of Rule 485.
X on May 1, 1998 pursuant to paragraph (b) of Rule
----- 485.
60 days after filing pursuant to paragraph
----- (a) of Rule 485
on May 1, 1998 pursuant to paragraph (a) of
----- Rule 485.
*STATEMENT PURSUANT TO RULE 24F-2
Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant
registered an indefinite amount of securities being offered. The Rule 24f-2
Notice for the fiscal year ending December 31, 1997 was filed on March 20, 1998.
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
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; Death Benefits Under the Policy; Free Look Provision;
Account Value and Surrender Value; Policy Loan Privilege; The Separate Account;
Charges Under the Policy; 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
15 Basic Questions and Answers About Us and Our
Policy; General Provisions of the Policy
1
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
16 The Separate Account; Investment Return
17 The Separate 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
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
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
31 Not Applicable
32 Not Applicable
33 Not Applicable
2
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
34 Not Applicable
35 Basic Questions and Answers About Us and Our
Policy
36 Not Applicable
37 Not Applicable
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
50 The Account
51 Cover Page; Basic Questions and Answers
About Us and Our Policy
52 The Separate Accounts; Our Rights
53 Federal Income Tax Considerations
3
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements
4
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
Flexible Premium Variable Whole Life Insurance
This Prospectus describes a flexible premium variable whole life insurance
policy being offered by Massachusetts Mutual Life Insurance Company
("MassMutual"). The Policy provides lifetime insurance protection and has
flexibility with respect to premium payments, the amount of which payments is
based upon the table of Selected Face Amounts chosen in the Application.
Policyowners have several investment alternatives. An individual Policyowner may
allocate the premium for his or her Policy among a Guaranteed Principal Account
("GPA") and the seventeen Separate Account divisions of a designated 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 are available to a Policyowner.
The Separate Account divisions consist of five divisions (the "MML Divisions")
which invest in MML Series Investment Fund, nine divisions, (the "Oppenheimer
Divisions"), which invest in nine funds of Oppenheimer Variable Account Funds,
and three divisions, (the "Panorama LifeSpan Divisions"), which invest in the
Panorama LifeSpan Portfolios of the Panorama Series Fund, Inc.
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 (the "Divisions"). 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. This amount 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.)
The Divisions have distinct investment portfolios. The MML Equity Division
invests in shares of MML Equity Fund, which invests primarily in common stocks
and other equity securities. The MML Equity Index Division invests in shares of
MML Equity Index Fund, which seeks 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 (the "S&P 500 Index"). The MML Blend Division invests in shares of MML
Blend Fund, which invests in a portfolio that may include common stocks and
other equity-type securities, bonds and other debt securities with maturities
generally exceeding one year, and money market instruments and other debt
securities with maturities generally not exceeding one year. The MML Managed
Bond Division invests in shares of MML Managed Bond Fund, which invests
primarily in investment grade, publicly traded, fixed-income securities. The MML
Money Market Division invests in shares of MML Money Market Fund, which invests
primarily in short-term debt instruments. 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 other securities which are believed will appreciate in value. The
Oppenheimer Capital Appreciation Division invests in shares of Oppenheimer
Aggressive Growth Fund (Prior to May 1, 1998, this Fund was named Oppenheimer
Capital Appreciation Fund.) which invests primarily in securities of growth-type
companies. The Oppenheimer Growth Division invests in shares of Oppenheimer
Growth Fund which invests primarily in securities of well-known established
companies. 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 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 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 Bond Division invests in shares of Oppenheimer Bond Fund which
invests primarily in debt securities. 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
Panorama LifeSpan Capital Appreciation Division invests in shares of the
Panorama LifeSpan Capital Appreciation Portfolio, which invests primarily in
equity securities. The Panorama LifeSpan Balanced Division invests in shares of
Panorama LifeSpan Balanced Portfolio, which invests in equity securities and
fixed income securities with a slightly stronger focus on equity securities. The
Panorama LifeSpan Diversified Income Division invests in Panorama LifeSpan
Diversified Income Portfolio, which invests primarily in fixed income
securities. (Collectively, these seventeen 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.
May 1, 1998
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.
<PAGE>
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE PROSPECTUSES OF MML SERIES
INVESTMENT FUND, THE OPPENHEIMER VARIABLE ACCOUNT FUNDS, PANORAMA SERIES FUND,
INC. AND MML EQUITY INDEX FUND.
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 flexible premium variable whole
life insurance policies offered by this Prospectus in any jurisdiction to anyone
to whom it is unlawful to make such an offer or solicitation in such
jurisdiction.
2
<PAGE>
<TABLE>
<CAPTION>
Table Of Contents Page
----
<S> <C>
Definitions Of Terms................................................................................................ 5
Basic Questions And Answers About Us And Our Policy................................................................. 7
What is MassMutual?............................................................................................... 7
What variable life insurance policy are We offering?.............................................................. 7
Availability...................................................................................................... 7
Underwriting...................................................................................................... 7
What is the Account Value of the Policy?.......................................................................... 7
What are the Divisions of the Separate Account?................................................................... 7
What is the Guaranteed Principal Account ("GPA")?................................................................. 8
Is the level of the Death Benefit guaranteed?..................................................................... 8
Is the Death Benefit subject to income taxes?..................................................................... 8
Does the Policy have a Cash Surrender Value?...................................................................... 8
What is a modified endowment contract?............................................................................ 9
Can this Policy become a modified endowment contract?............................................................. 9
What about Premiums?.............................................................................................. 9
When are Initial Premiums allocated to the Guaranteed Principal Account or the Separate Account?.................. 9
How can the Net Premium and the Account Value of the Policy be allocated among the
Guaranteed Principal Account and the Separate Account Divisions?................................................ 9
How long will the Policy remain in force?......................................................................... 9
Are there charges against the Policy?............................................................................. 9
What is the loan privilege and how does a loan affect the Policy's Death Benefit and Cash
Surrender Value?................................................................................................ 10
Are dividends paid on the Policy?................................................................................. 10
Do I have a right to cancel?...................................................................................... 10
Charges Under The Policy............................................................................................ 10
Deductions from Premiums.......................................................................................... 10
Sales Load...................................................................................................... 10
State Premium Tax Charge........................................................................................ 11
Deferred Acquisition Cost ("DAC") Tax Charge.................................................................... 11
Account Value Charges............................................................................................. 11
Administrative Charge........................................................................................... 11
Charge for Cost of Insurance Protection......................................................................... 11
Underwriting Charge............................................................................................. 11
Separate Account Charges.......................................................................................... 11
Charges for Mortality and Expense Risks......................................................................... 11
Charges for Federal Income Taxes................................................................................ 12
Charges for Investment Advisory Services........................................................................ 12
The Separate Account................................................................................................ 15
Investment of the Separate Account................................................................................ 15
Rates of Return................................................................................................... 18
General Provisions Of The Policy.................................................................................... 22
Premiums.......................................................................................................... 22
Planned Policy Premiums........................................................................................... 22
Minimum Initial Policy Premium.................................................................................... 22
Minimum Case Premium.............................................................................................. 22
Initial Case Premium Paid......................................................................................... 22
Minimum and Maximum Premium Payments.............................................................................. 22
Termination....................................................................................................... 22
Grace Period...................................................................................................... 23
Death Benefit Under The Policy...................................................................................... 23
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Account Value And Cash Surrender Value.............................................................................. 23
Account Value..................................................................................................... 23
Automated Account Value Transfer.................................................................................. 24
Investment Return................................................................................................. 24
Cash Surrender Value.............................................................................................. 24
Withdrawals....................................................................................................... 24
Policy Loan Privilege............................................................................................... 25
Source of Loan.................................................................................................... 25
If Loans Exceed the Policy Account Value.......................................................................... 25
Interest.......................................................................................................... 25
Repayment......................................................................................................... 25
Interest on Loaned Value.......................................................................................... 25
Effect of Loan.................................................................................................... 25
Free Look Provision................................................................................................. 25
Exchange Privilege.................................................................................................. 26
Your Voting Rights.................................................................................................. 26
Our Rights.......................................................................................................... 26
Directors And Executive Vice Presidents Of MassMutual............................................................... 27
The Guaranteed Principal Account.................................................................................... 28
Federal Income Tax Considerations................................................................................... 29
MassMutual - Tax Status........................................................................................... 29
Policy Proceeds, Premiums, and Loans.............................................................................. 29
Modified Endowment Contracts...................................................................................... 30
Diversification Standards......................................................................................... 30
Additional Provisions Of The Policy................................................................................. 31
Paid-up Policy Date............................................................................................... 31
Reinstatement Option.............................................................................................. 31
Payment Options................................................................................................... 31
Fixed Amount Payment Option....................................................................................... 31
Fixed Time Payment Option......................................................................................... 31
Interest Payment Option........................................................................................... 31
Lifetime Payment Option........................................................................................... 31
Joint Lifetime Payment Option..................................................................................... 31
Joint Lifetime Payment Option with Reduced Payments............................................................... 32
Withdrawal Rights under Payment Options........................................................................... 32
Beneficiary....................................................................................................... 32
Changing the Owner or Beneficiary................................................................................. 32
Right to Substitute Insured....................................................................................... 32
Assignment........................................................................................................ 32
Dividends......................................................................................................... 32
Limits on Our Right to Challenge the Policy....................................................................... 33
Misstatement of Age or Sex........................................................................................ 33
Suicide........................................................................................................... 33
When We Pay Proceeds.............................................................................................. 33
Records And Reports................................................................................................. 33
Sales And Other Agreements.......................................................................................... 33
Commissions Schedule.............................................................................................. 34
Bonding Arrangement............................................................................................... 34
Legal Proceedings................................................................................................... 34
Experts............................................................................................................. 34
Financial Statements................................................................................................ 34
Appendix A.......................................................................................................... 68
</TABLE>
4
<PAGE>
Definition Of Terms
Account Value: The sum of the Variable Account Value and the Fixed Account Value
of the Policy.
Automated Account Value Transfer: The automated transfer process which allows a
Policyowner to specify, subject to applicable transfer rules, a specific dollar
amount or a whole-number percentage of a Division's Account Value to be
transferred monthly from that Division to any other Division(s) and/or the
Guaranteed Principal Account.
Beneficiary: The person or persons that the Policyowner specifies to receive
insurance proceeds after the Insured dies.
Case: A group of Policies sold to individuals with a common employment or other
non-insurance motivated relationship. All Policies in a Case are aggregated for
purposes of determining the Policy Date or Issue Date, underwriting requirements
and sales load percentages.
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.
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 1" and "Option 2"). The Death Benefit equals the greater of the Selected
Face Amount (plus the Account Value, under Option 2), or the Minimum Face Amount
in effect on the date of death, less Policy Debt, plus unearned or minus unpaid
monthly deductions.
Divisions: The subaccounts of the Separate Account, each of which invests in
shares of either the MML Series Investment Fund, the Oppenheimer Variable
Account Funds or the Panorama Series Fund, Inc.
Fixed Account Values: Account Values which are allocated to the GPA.
Free Look Period: The period during which a Policyowner may return the Policy.
It must be within 10 days of receipt of the Policy, or within 10 days after the
Policyowner receives the notice of a right to withdraw, or within 45 days after
the date of Part I of the Application, whichever is latest (unless a different
period is mandated under applicable state law). Until the expiration of the Free
Look Period, amounts will be held in the MML Money Market Division.
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.
Home Office: The Home Office of MassMutual is located at 1295 State Street in
Springfield, Massachusetts.
Initial Case Premium Paid: The total dollar amount paid for all Policies in a
Case before the Case is installed on the administrative system.
Insured: Person whose life this Policy insures.
Issue Date: The date shown on the Schedule Page. It is the start date of the
suicide and contestability periods. It is also the date from which the Policy is
in force if the first premium has been paid.
Minimum Face Amount: An amount equal to Account Value times the Minimum Face
Amount percentage. This percentage depends upon the Insured's age, sex and
smoking classification.
Monthly Calculation Date: The date on which the monthly deductions under the
Policy are 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.
Net Premium: Premium paid less sales expense and premium tax charges.
Paid-up Policy Date: The Policy Anniversary Date nearest the Insured's 100th
birthday.
Policy: The Flexible Premium Variable Life Insurance Policy With Table Of
Selected Face Amounts offered by MassMutual that is described in this
Prospectus.
Policy Anniversary: The anniversary of the Policy Date.
Policy Date: The date shown on the Schedule Page of the Policy used as the
starting point for determining Policy Anniversary Dates, Policy Years and
Monthly Calculation Dates.
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 corporation, partnership, trust, individual, or other entity
who owns the Policy.
Premium: The total dollar amount paid for the Policy.
Premium Tax: The amount of premium tax, if any, charged by a state or other
governmental authority.
Register Date: The date the Company allocates the initial premium less certain
deductions to the Separate Account. It is the Valuation Date which is on, or
next follows the later of the date on which We receive a completed Part I of the
Application for this Policy at our Home Office or the date We receive the first
premium payment for the Policy at our Home Office.
Selected Face Amount: The amount of insurance coverage chosen by the
Policyowner.
Separate Account: The segregated asset account called
5
<PAGE>
"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 receive and invest premiums for this Policy and for other
variable life insurance policies MassMutual issues, and for each such policy
there will be a designated segment of the Separate Account.
Surrender: A surrender by the Policyowner of all rights under the Policy in
exchange for the entire Cash Surrender Value 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.
We or Us: Refers to MassMutual.
Withdrawal: A withdrawal of Account Value by the Policyowner.
You or Yours: Refers to the Policyowner.
6
<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 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. As of December 31, 1997, MassMutual
had total contingency reserves in excess of $2.8 billion and unconsolidated
assets of $57.6 billion.
What variable life insurance policy are We offering? In this Prospectus We are
offering a Flexible Premium Variable Whole Life Insurance Policy With Table Of
Selected Face Amounts (the "Policy"). We issue this Policy to provide for a
Death Benefit and Cash Surrender Value, as well as loan privileges and flexible
premiums. It is called "flexible" because the Policyowner may select the timing
and amount of premium payments. It is called "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 is a legal contract between the Policyowner and MassMutual. The
entire contract consists of the application to the Policy (the "Application"),
the Policy and any amendments or riders added thereto.
Availability. The Policy is available on a "Case" or, state law permitting, on
an individual basis. "Case basis" means that the Insureds share a common
employment or other institutional relationship and that all Policies in the Case
are aggregated for purposes of determining Issue Dates, Policy Dates,
underwriting requirements and sales load percentages. If an individual Insured
owns the Policy, he or she may exercise all rights and privileges under the
Policy through their Employer or other sponsoring entity acting as Case
administrator. After termination of the employment or other relationship, an
individual who owns the Policy may exercise such rights and privileges directly
with MassMutual.
The minimum Selected Face Amount is $25,000 per life for ages 20 through 85 (age
nearest birthday). The minimum Case premium is $250,000 of first year annualized
premium. The Insured may not be younger than age 20 nor older than age 85 as of
the Policy Date for Policies issued on a regular underwriting basis. For
Policies underwritten on a guaranteed issue underwriting basis or on a
simplified issue underwriting basis, the Insured may not be younger than age 20
nor older than age 65 as of the Policy Date. Before issuing any Policy We will
require satisfactory evidence of insurability, except under a guaranteed issue
underwriting approach if the Insured is not older than age 65 as of the Policy
Date.
Underwriting. The Policies within a Case are underwritten on the same basis,
i.e., a regular underwriting, simplified issue underwriting, or guaranteed issue
underwriting approach is used for all Policies in a Case. Availability of a
regular underwriting approach is subject to state approval. Mortality charges
vary depending on the type of underwriting used.
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 depreciation 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
seventeen Divisions - the MML Equity Division, the MML Equity Index Division,
the MML Blend Division, the MML Managed Bond Division, the MML Money Market
Division, the Oppenheimer Global Securities Division, the Oppenheimer Capital
Appreciation Division, the Oppenheimer Growth Division, the Oppenheimer Growth &
Income Division, the Oppenheimer Multiple Strategies Division, the Oppenheimer
High Income Division, the Oppenheimer Strategic Bond Division, the Oppenheimer
Bond Division, the Oppenheimer Money 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.
The MML Equity Division invests in shares of MML Equity Fund. The MML Equity
Index Division invests in shares of MML Equity Index Fund. The MML Blend
Division invests in shares of MML Blend Fund. The MML Managed Bond Division
invests in shares of MML Managed Bond Fund. The MML Money Market Division
invests in shares of MML Money Market Fund. Oppenheimer Global Securities,
Capital Appreciation, Growth, Growth & Income, Multiple Strategies, High Income,
Strategic Bond, Bond and Money Divisions invest in shares of Oppenheimer Global
Securities Fund, Oppenheimer Aggressive Growth Fund (Prior to May 1, 1998, this
Fund was named Oppenheimer Capital Appreciation Fund.), Oppenheimer Growth Fund,
Oppenheimer Growth & Income Fund, Oppenheimer Multiple Strategies Fund,
Oppenheimer High Income Fund, Oppenheimer Strategic Bond Fund, Oppenheimer Bond
Fund
7
<PAGE>
and Oppenheimer Money Fund, respectively. The Panorama LifeSpan Capital
Appreciation, Balanced and Diversified Income Divisions invest in shares of
Panorama LifeSpan Capital Appreciation, Balanced and Diversified Income
Portfolios, respectively.
MML Equity Fund, MML Equity Index Fund, MML Blend Fund, MML Managed Bond Fund
and MML Money Market Fund (collectively, the "MML Funds") are 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. David L. Babson and Company, Inc. ("Babson") serves as the
investment sub-adviser to MML Equity Fund and the Equity Sector of the MML Blend
Fund.
MassMutual has also entered into an investment sub-advisory agreement with
Mellon Equity Associates ("Mellon Equity") to serve as the investment
sub-adviser to the MML Equity Index Fund. MassMutual, Babson and Mellon Equity
are registered as investment advisers under the Investment Advisers Act of
1940.
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.
OppenheimerFunds, Inc. ("OFI") supervises the investment operations of the
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"), and the Panorama
Series Fund, Inc., ("Panorama Fund"), determines the composition of each
respective portfolio, and furnishes advice and recommendations with respect to
the investments, investment policies and purchase and sale of securities,
pursuant to an investment advisory agreement with each Oppenheimer Fund and
Panorama Portfolio. Oppenheimer Global Securities Fund, Oppenheimer Aggressive
Growth Fund (Prior to May 1, 1998, this Fund was named Oppenheimer Capital
Appreciation Fund.), Oppenheimer Growth Fund, Oppenheimer Growth & Income Fund,
Oppenheimer Multiple Strategies Fund, Oppenheimer High Income Fund, Oppenheimer
Strategic Bond Fund, Oppenheimer Bond Fund, and Oppenheimer Money Fund
(collectively, the "Oppenheimer Funds") are part of the Oppenheimer Trust.
Panorama LifeSpan Capital Appreciation Portfolio, Panorama LifeSpan Balanced
Portfolio and Panorama LifeSpan Diversified Income Portfolio (collectively, the
"Panorama LifeSpan Portfolios") are part of the Panorama Fund. Both the
Oppenheimer Trust and the Panorama Fund are open-end, diversified, management
investment companies, which are available to act as the investment vehicle for
separate accounts for variable insurance policies offered by insurance
companies.
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 $75 billion as of
December 31, 1997, and having more than 3.5 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 is
registered as an investment adviser under the Investment Advisers Act of 1940.
OFI has engaged three sub-advisers: Babson-Stewart Ivory International
("Babson-Stewart"), BEA Associates ("BEA") and Pilgrim Baxter & Associates
("Pilgrim Baxter") to provide day-to-day portfolio management for certain
components of the Panorama LifeSpan Portfolios.
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. 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 2 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, plus or minus unearned or unpaid
monthly deductions. 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. Withdrawals are allowed subject to certain restrictions and
are subject to a withdrawal charge of 2.0% of the Account Value not to exceed
$25.00 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
8
<PAGE>
not taxed on increases in the Cash Surrender Value until the Policy is
surrendered. In connection with certain 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; 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 retesting 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? There are five concepts which are important to the
discussion of premiums for this Policy: the minimum initial Policy premium; the
minimum annual planned Policy premium; the planned Policy premium; the minimum
Case premium; and the Initial Case Premium Paid.
A minimum initial Policy premium is payable either at the time You submit Your
Application or at some time prior to the delivery of the Policy. The minimum
annual planned Policy premium is a level amount used in determining the sales
load percentage breakpoint and varies by initial Selected Face Amount, issue
age, and sex. The planned Policy premium is elected on the Application and
becomes the basis for the Policy's premium billing. The amount of planned Policy
premiums originally selected in the Application may be changed at any time upon
written request.
The minimum Case premium is $250,000 of first year annualized premium for all
Policies in a Case. The Initial Case Premium Paid is the amount of premium for
all Policies in a Case on deposit with MassMutual at the time the Policies are
installed on the administration system. The Initial Case Premium Paid determines
sales load percentages for all Policies in that Case.
For details see General Provisions Of The Policy - Premiums.
When are Initial Premiums allocated to the Guaranteed Principal Account or the
Separate Account? The initial Net Premium (i.e., premium paid less the
deductions described in Deductions From Premiums) will be allocated to the MML
Money Market Division, which invests in the MML Money Market Fund (see Free Look
Provision). At the end of the Free Look Period, the Account Value will be
allocated to the GPA and/or Divisions according to the Policyowner's
instructions in the Application and subject to MassMutual's allocation rules.
How can the Net Premium and the Account Value of the Policy be allocated among
the Guaranteed Principal Account and the Divisions? When You apply for a Policy
You choose the percentages of Your premiums to be allocated to the Divisions
(maximum of eight at one time) and the GPA. 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.
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 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. For details, see The Separate Account. Automated
Account Value Transfer is also available. For details, see Automated Account
Value Transfer. For details see Account Value.
How long will the Policy remain in force? The Policy does not automatically
terminate for failure to pay planned Policy premiums. 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 vary
depending on the total Initial Case Premium Paid for all Policies in the Case
before installation on the administration system. There are two additional
deductions from gross premiums: (i) for state premium taxes; and (ii) 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
9
<PAGE>
Premium.
Certain monthly charges are deducted directly from the Policy's Account Value on
each Monthly Calculation Date. These monthly deductions are equal to the sum of
a mortality charge, an administrative charge, and an underwriting charge. The
underwriting charge is only applicable for Policies issued under a regular
underwriting approach.
Some deductions are made on a daily basis against the assets of the Divisions. A
daily charge calculated at a current annual rate of .30% of the value of the
assets of each Division is charged for mortality and expense risks. In no event
will this rate exceed .60%. 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 2.0% 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 the Account Value on the date the loan
is to be made reduced by: (i) any outstanding Policy Debt; (ii) interest on the
loan being made and on any outstanding Policy Debt to the next Policy
Anniversary Date; and (iii) an amount equal to the most recent monthly charge
for the Policy multiplied by the number of Monthly Calculation Dates from the
date the loan is made, up to and including the next Policy Anniversary Date.
(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 Policyowner has
a limited right to return the Policy and receive a refund. This right expires on
the latest of the following:
. Ten days after You receive the Policy; or
. Ten days after You receive a Notice of Withdrawal
Right; or
. 45 days after Part 1 of the Policy Application was signed.
The Policy may be returned to our Home Office, to any of our agency offices, or
to the agent who sold You the Policy. 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 charge. The sales load percentage varies
depending on the total Initial Case Premium Paid for all Policies in the Case.
Sales Load. Effective January 1, 1997 (subject to state availability), the sales
load component of the premium deduction is based on the total Initial Case
Premium Paid for all Policies under a Case before installation on the
administration system. For Policies issued under a Case with an Initial Case
Premium Paid of less than $3,500,000, the sales load percentages will decrease
after the fifth Policy Year. For Policies issued under a Case with an Initial
Case Premium Paid of $3,500,000 or more, the sales load will not change after
the fifth Policy Year. Please note for Policies issued under a Case with an
Initial Case Premium Paid of less than $3,500,000, the premiums are tracked on
an annual cumulative basis for each Policy, and the year 1 through 5 sales load
percentages will be higher on premium payments made below the specified minimum
annual planned Policy premium.
Sales Load
Initial Case Premium Paid Years 1-5 Years 6+
Less than $3,500,000
Less than or equal to the
Minimum Planned Policy
Premium 18.00% 6.00%
Greater than the Minimum
Planned Policy Premium 6.00% 6.00%
Greater than or equal to
$3,500,000 but less than
$7,000,000 5.50% 5.50%
Greater than or equal to
$7,000,000 but less than
$10,000,000 3.25% 3.25%
Greater than or equal to
$10,000,000 .75% .75%
For Policies issued under a Case installed on the administration system prior to
January 1, 1997, the following sales load provision applies. For Policies issued
under a Case with an Initial Case Premium Paid of less than $1,000,000, the
sales load percentages will decrease after the fifth Policy Year. For Policies
issued under a Case with an Initial Case Premium Paid of $1,000,000 or more, the
sales load will not change after the fifth Policy Year. Please note for Policies
issued under a Case with an Initial Case Premium Paid of less than $1,000,000,
the
10
<PAGE>
premiums are tracked on an annual cumulative basis for each policy, and the year
1 through 5 sales load percentages will be higher on premium payments made below
the specified minimum annual planned Policy premium.
Sales Load
Initial Case Premium Paid Years 1-5 Years 6+
Less than $1,000,000
Less than or equal to the
Minimum Planned Policy
Premium 18.00% 6.00%
Greater than the Minimum
Planned Policy Premium 6.00% 6.00%
Greater than or equal to
$1,000,000 but less than
$2,500,000 7.00% 7.00%
Greater than or equal to
$2,500,000 but less than
$5,000,000 5.50% 5.50%
Greater than or equal to
$5,000,000 but less than
$10,000,000 4.00% 4.00%
Greater than or equal to
$10,000,000 3.25% 3.25%
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.
During 1997, the aggregate amount of sales load deductions was $1,480,364.
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 4.0% 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. During 1997, the aggregate state premium tax charge was $284,225.
Deferred Acquisition Cost ("DAC") Tax Charge. We deduct 1.0% of each premium to
cover a federal premium tax assessed against MassMutual. This charge is
reasonable in relation to MassMutual's federal income tax burden, under Internal
Revenue Code Section 848, resulting from the receipt of premiums. During 1997,
the aggregate DAC tax charge was $139,702.
ACCOUNT VALUE CHARGES
On each Monthly Calculation Date, a monthly administrative charge, a cost of
insurance charge (also referred to as the Mortality Charge in the Policy) and an
underwriting charge (if applicable) are deducted from the Variable Account Value
and Fixed Account Value in proportion to the non-loaned Account Value in the
Separate Account and the GPA.
Administrative Charge. A monthly charge is deducted to compensate MassMutual for
costs incurred in providing certain administrative services including premium
collection, recordkeeping, processing claims, and communicating with
Policyowners. Currently, the charge is $5.25 per month, or $63 annually, 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.) Such charges will not exceed the actual cost for such
services. During 1997, the aggregate amount of deductions for administrative
charges was $20,469.
Charge for Cost of Insurance Protection. A charge for the cost of insurance
protection is deducted on each Monthly Calculation Date and is based on the
Insured's sex, attained age, the Policy Year in which the deduction is made, the
smoker and rating class of the Policy, and the type of underwriting used for the
Case. 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 for which
a charge applies 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 class. During 1997, the
aggregate amount of deductions for cost of insurance protection was $399,631.
Underwriting Charge. A monthly underwriting charge is deducted from Policies
that are issued under a regular underwriting basis. The charge is based on the
amount of insurance underwritten before the Case is installed on the
administration system. This charge is fixed for a set number of Policy Years and
is shown in the Other Information section of the Policy's Schedule Page. During
1997, the aggregate amount of deductions for the underwriting charge was
$54,419.
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 0.30% of the value of each Division's assets that come
from the Policy. While this charge may increase or decrease, the maximum charge
is 0.60% annually. The aggregate amount of such charges, which are paid
quarterly, against the Separate Account divisions in 1997 was $36,178.
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<PAGE>
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.
Charges for Investment Advisory Services. MassMutual serves as investment
manager of each of the MML Funds pursuant to investment management agreements,
four of which provide for the MML Equity Fund, MML Blend Fund, MML Managed Bond
Fund and MML Money Market Fund to pay MassMutual a quarterly fee at the annual
rate of .50% of the first $100,000,000 of the MML Fund's average daily net asset
value, .45% of the next $200,000,000, .40% of the next $200,000,000 and .35% of
any excess over $500,000,000. MassMutual has entered into sub-advisory
agreements with David L. Babson & Company, Inc. ("Babson") whereby Babson
manages the investment of the assets of the MML Equity Fund and the Equity
Sector of MML Blend Fund. Pursuant to the sub-advisory agreements, MassMutual
pays Babson (1) a quarterly investment management fee equal to an annual rate of
0.13% of the average daily net asset value of MML Equity Fund as of the close of
each business day and (2) a quarterly investment management fee equal to an
annual rate of 0.13% of the average daily net asset value of the Equity Sector
of MML Blend Fund as of the close of each business day.
MassMutual serves as investment manager of the MML Equity Index Fund pursuant to
an investment manager agreement which provides for the Fund to pay MassMutual a
quarterly fee at the rate of 0.40% of the first $100 million of net assets, of
the MML Equity Index Fund, 0.38% of the next $150 million of net assets and
0.36% of net assets over $250 million. MassMutual has entered into a
sub-advisory agreement with Mellon Equity whereby Mellon Equity manages the
investment and reinvestment of the assets of the MML Equity Index Fund as
sub-adviser of the Fund. For providing its services under the sub-advisory
agreement with MassMutual, Mellon Equity will receive a monthly fee, computed
daily at an annual rate based on the collective daily net asset value 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.
The monthly management fee payable to OFI in its capacity as investment adviser
to the Panorama LifeSpan Portfolios is based on the average daily net asset
value of each Panorama Portfolio. The annual management fees paid to OFI are as
follows: (i) for Panorama LifeSpan Diversified Income Portfolio: 0.750% of the
Portfolios average annual net asset value up to $250 million and 0.65%
thereafter; (ii) for Panorama LifeSpan Balanced Portfolio: 0.850% of the
Portfolio average annual net asset value up to $250 million and 0.75%
thereafter; and (iii) for Panorama LifeSpan Capital Appreciation Portfolio:
0.850% of the Portfolio average annual net asset value up to $250 million and
0.75% thereafter. OFI's management agreement with the Panorama Fund allows OFI
to enter into sub-adviser agreements with other investment advisers under which
the sub-adviser may manage the investments of one or more of the underlying
Portfolios of the Panorama Fund. OFI has entered into investment sub-advisory
agreements with three sub-advisers to assist in the selection of portfolio
investments for the Panorama Fund's 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 stock components of the
LifeSpan Balanced Portfolio and the LifeSpan Capital Appreciation Portfolio.
Babson-Stewart is a partnership formed in 1987 between Babson, an indirect
wholly-owned subsidiary of MassMutual, and Stewart Ivory & Company, Ltd.,
located in Edinburgh, Scotland. For providing its services under the
sub-advisory agreement with OFI, Babson-Stewart will receive a monthly fee from
OFI, computed daily at an annual rate based on the average daily net asset value
of 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 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-advisory fee, the assets of the
LifeSpan Capital Appreciation Portfolio and the LifeSpan Balanced Portfolio are
not aggregated.
BEA Associates ("BEA") located in New York, New York is the sub-adviser to the
high yield/high risk bond component of the LifeSpan Diversified Income
Portfolio, LifeSpan Balanced Portfolio, and 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 asset value 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, 0.35% 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
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<PAGE>
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 Oppenheimer Series Fund, Inc. managed by BEA.
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. 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 asset value of
the portion of the LifeSpan Balanced Portfolios 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 asset values of the
portion of the LifeSpan Portfolios allocated to the small cap component are
aggregated with that portion of the net assets of Oppenheimer Series Fund, Inc.
managed by Pilgrim Baxter.
The monthly management fee payable to OFI in its capacity as investment adviser
to the Oppenheimer Funds is 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 Aggressive Growth Fund (Prior to May 1, 1998, this
Fund was named 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 the
next $200 million, and 0.50% of net assets over $1 billion.
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<PAGE>
MML Series Investment Fund Annual Expenses for 1997
(as a percentage of the average net assets of a Fund)
Total Fund
Management Fees Other Expenses/(1)/ Operating
Expenses
MML Equity Fund 0.347% 0.003% 0.350%
MML Equity Index Fund 0.27% 0.16% 0.43%
MML Blend Fund 0.372% 0.003% 0.375%
MML Managed Bond Fund 0.440% 0.027% 0.467%
MML Money Market Fund 0.484% 0.036% 0.520%
(1) MassMutual has agreed to bear the expenses of the MML Equity Fund, MML Blend
Fund, MML Managed Bond Fund and MML Money Market 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 these Funds
through April 30, 1999. MassMutual does not expect that it will be required
to reimburse any expenses of the MML Equity Fund, MML Blend Fund, MML
Managed Bond Fund and MML Money Market Fund due to this undertaking in 1998.
Oppenheimer Variable Account Funds Annual Expenses for 1997
(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 0.70% 0.06% 0.76%
Oppenheimer Aggressive Growth Fund(1) 0.71% 0.02% 0.73%
Oppenheimer Growth Fund 0.73% 0.02% 0.75%
Oppenheimer Growth & Income Fund 0.75% 0.08% 0.83%
Oppenheimer Multiple Strategies Fund 0.72% 0.03% 0.75%
Oppenheimer High Income Fund 0.75% 0.07% 0.82%
Oppenheimer Strategic Bond Fund 0.75% 0.08% 0.83%
Oppenheimer Bond Fund 0.73% 0.05% 0.78%
Oppenheimer Money Fund 0.44% 0.04% 0.48%
</TABLE>
(1) Prior to May 1, 1998, this Fund was named Oppenheimer Capital Appreciation
Fund.
Panorama Series Fund, Inc. Annual Expenses for 1997 - (LifeSpan Portfolios)
(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 LifeSpan Diversified Income Portfolio 0.75% 0.09% 0.84%
Panorama LifeSpan Balanced Portfolio 0.85% 0.12% 0.97%
Panorama LifeSpan Capital Appreciation Portfolio 0.85% 0.14% 0.99%
</TABLE>
During 1997, MassMutual earned investment management fees of $8,082,863 from MML
Equity Fund, $8,933,947 from MML Blend Fund, $913,026 from MML Managed Bond
Fund, $703,344 from MML Money Market Fund and $61,760 from MML Equity Index
Fund. During this same period, Mellon Equity earned investment management fees
of $13,959 from MML Equity Index Fund. During 1997, Babson earned investment
management fees from MassMutual of $1,905,294 for providing sub-advisory
services to the MML Equity Fund and $2,835,066 for providing sub-advisory
services to the Equity Sector of the MML Blend Fund.
During 1997, OFI earned investment management fees of $5,615,606 from the
Oppenheimer Global Securities Fund, $5,324,309 from the Oppenheimer Aggressive
Growth Fund (Prior to May 1, 1998, this Fund was named Oppenheimer Capital
Appreciation Fund.), $2,859,202 from the Oppenheimer Growth Fund, $709,577 from
the Oppenheimer Growth & Income Fund, $4,068,887 from the Oppenheimer Multiple
Strategies Fund, $1,667,490 from the Oppenheimer High Income Fund, $1,197,613
from the Oppenheimer Strategic Bond Fund, $3,281,556 from the Oppenheimer Bond
Fund and $601,698 from the Oppenheimer Money Fund.
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<PAGE>
During 1997, OFI earned investment management fees of $213,594 from the Panorama
LifeSpan Diversified Income Portfolio, $504,390 from the Panorama LifeSpan
Balanced Portfolio and $437,070 from the Panorama LifeSpan Capital Appreciation
Portfolio. During 1997, BEA earned investment management fees of $160,466,
Pilgrim Baxter earned investment management fees of $251,753 and Babson-Stewart
earned investment management fees of $666,697 for providing day-to-day portfolio
management for certain components of the Panorama LifeSpan Portfolios.
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 has been established for the
Policies.
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, monthly charges assessed against the Policy and investment
results applicable to those assets that are in excess of net assets supporting
the Policies.
MassMutual has the right to establish additional divisions of the Separate
Account from time-to-time. Amounts credited to any additional divisions
established would be invested in shares of other Funds. For any divisions, we
have the right to substitute new Funds.
Investment of the Separate Account. The designated segment of the Separate
Account has seventeen Divisions attributable to the Policy. Each Division
invests in shares of either MML Trust, Oppenheimer Trust or Panorama Fund. The
Divisions of the Separate Account are:
. The MML Equity Division - Amounts credited to this Division are invested in
shares of MML Equity Fund, or its successor.
. The MML Equity Index Division - Amounts credited to this Division are
invested in shares of MML Equity Index Fund, or its successor.
. The MML Blend Division - Amounts credited to this Division are invested in
shares of MML Blend Fund, or its successor.
. The MML Managed Bond Division - Amounts credited to this Division are
invested in shares of MML Managed Bond Fund, or its successor.
. The MML Money Market Division - Amounts credited to this Division are
invested in shares of MML Money Market Fund, or its successor.
. The Oppenheimer Global Securities Division Amounts credited to this Division
are invested in shares of Oppenheimer Global Securities Fund, or its
successor.
. The Oppenheimer Capital Appreciation Division Amounts credited to this
Division are invested in shares of Oppenheimer Aggressive Growth Fund , or
its successor. (Prior to May 1, 1998, this Fund was named Oppenheimer
Capital Appreciation Fund.)
. The Oppenheimer Growth Division - Amounts credited to this Division are
invested in shares of Oppenheimer Growth 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 High Income Division - Amounts credited to this Division are
invested in shares of Oppenheimer High Income 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 Bond Division - Amounts credited to this Division are
invested in shares of Oppenheimer Bond 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 Panorama LifeSpan Capital Appreciation Division - Amounts credited to
this Division are invested in shares of the Panorama LifeSpan Capital
Appreciation Portfolio, or its successor.
15
<PAGE>
. 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.
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.
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 six MML Funds, five of which are available to
Policyowners. Each MML Fund has its own investment objectives and policies.
Similarly, the Oppenheimer Trust consists of ten Oppenheimer Funds, nine of
which are available to Policyowners. Each Oppenheimer Fund has its own
investment objectives and policies. The Panorama Fund consists of seven Panorama
Portfolios, three of which are available to Policyowners. Each Panorama Fund has
its own objectives and policies. MassMutual established 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 the Panorama Fund were established for the purpose of
providing investment vehicles for investment only by variable life insurance
contracts and variable annuities contracts. Shares of the MML Funds and Panorama
Portfolios are not offered to the general public, but solely to separate
investment accounts established by MassMutual and other life insurance company
separate account subsidiaries of MassMutual. Shares of the Oppenheimer Funds are
not offered to the general public, but solely to insurance company separate
accounts affiliated and unaffiliated with MassMutual which fund variable annuity
and variable life insurance contracts.
The primary investment objective of MML Equity Fund is to achieve a superior
total rate of return over an extended period of time from both capital
appreciation and current income. A secondary investment objective is the
preservation of capital when business and economic conditions indicate that
investing for defensive purposes is appropriate. The assets of this Fund are
normally expected to be invested primarily in common stocks and other
equity-type securities.
The investment objective of the MML Equity Index Fund is to provide investment
results that correspond to the price and yield performance of the 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(R)" 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.)
The investment objective of MML Blend Fund is to achieve as high a level of
total rate of return over an extended period of time as is considered consistent
with prudent investment risk and the preservation of capital. This Fund may
invest in a portfolio that may include common stocks and other equity-type
securities, bonds and other debt securities with maturities generally exceeding
one year, and money market instruments and other debt securities with maturities
generally not exceeding one year.
The investment objective of MML Managed Bond Fund is to achieve as high a total
rate of return on an annual basis as is considered consistent with the
preservation of capital. The assets of this Fund will be invested primarily in
investment grade, publicly traded, fixed income securities of such maturities as
MassMutual deems appropriate from time to time in light of market conditions and
prospects.
The investment objectives of MML Money Market Fund are to achieve high current
income, the preservation of capital, and liquidity. These objectives are of
equal importance. The assets of this Fund will be invested in short-term debt
instruments, including but not limited to commercial paper, certificates of
deposit, bankers' acceptances, and obligations of the United States government,
its agencies and instrumentalities.
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,
cyclical 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 but which may be considered to be speculative. 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, convertible bonds and American Depository Receipts.
Current income is not an investment objective of the Oppenheimer Global
Securities Fund.
The investment objective of the Oppenheimer Aggressive Growth Fund is capital
appreciation. (Prior to May 1, 1998, this Fund was named Capital Appreciation
Fund.) 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.
16
<PAGE>
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). Current
income is a secondary consideration in the selection of the Growth Fund's
portfolio 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 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 Strategic Bond Fund is to seek a
high level of current income principally derived from interest income from
investments in U.S. government securities, lower rated 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 Bond Fund is to seek a high level of
current income by investing primarily in debt securities. Secondarily, the Fund
seeks capital growth when consistent with its primary objective.
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 Panorama LifeSpan Capital Appreciation Portfolio
is to seek long-term capital appreciation by investing in a strategically
allocated portfolio consisting primarily of stocks.
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 focus 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 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.
Citibank, N.A., with its home office located at 111 Wall Street, New York, NY
10005, acts as custodian for each of the MML Funds, other than the MML Equity
Index Fund. Boston Safe Deposit and Trust Company, an indirect subsidiary of
Mellon Bank Corporation, is located at One Boston Place, Boston, Massachusetts
02108, and serves as the custodian of 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 & Trust Co.,
225 Franklin Street, Boston, MA 02110, acts as custodian for each of the
Panorama LifeSpan Portfolios.
Additional and more detailed information concerning the MML Funds, the
Oppenheimer Funds and the Panorama Portfolios, including information about the
other expenses of such Funds, may be found in the accompanying Prospectuses for
the MML Trust, the Oppenheimer Trust and the Panorama Fund.
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 owners of the Policies 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 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
17
<PAGE>
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 Panorama Fund were established for use as investment
vehicles 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 and Panorama Fund. The Board of Trustees of the
Oppenheimer Trust (the "Trustees") and the Board of Directors of Panorama Fund
(the "Directors") will monitor the Oppenheimer Funds and Panorama Portfolios for
the existence of any such conflicts. If it is determined that a conflict exists,
the Boards 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 Portfolio and reinvesting such assets in a
different investment medium, including (but not limited to) another Oppenheimer
Fund or Panorama Portfolio; (ii) submitting the question whether such
segregation should be implemented to a vote of all affected contract owners; and
(iii) establishing a new registered management investment company or managed
separate account.
Rates of Return. Tables 1 and 4 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 other
operating expenses). Table 2 shows the Effective Annual Rate of Return of the
Divisions of the Separate Account based on the actual underlying Fund
performance and the deduction of the current mortality and expense risk charges.
Table 1 shows figures for periods ended December 31, 1997, for the Funds; Table
4 shows December 31 annualized figures for the Funds. These rates of return do
not reflect the mortality and expense risk charges assessed against the Separate
Account.
Table 2 shows figures for periods ended December 31, 1997 and assumes that the
Divisions have been in operation for the same periods as the underlying Fund in
which they invest. It reflects the total of the income generated by the Fund net
of investment management fees and other operating expenses, plus capital gains
and losses, realized or unrealized, and net of the current mortality and expense
risk charge.
Tables 1, 2 and 4 do not reflect deductions from premiums or administrative,
cost of insurance, and underwriting charges assessed against the Account Value
of the Policies. See Charges Under The Policy - Deductions From Premiums and
Account Value Charges. Therefore, these rates are not illustrative of how actual
investment performance will affect the benefits under the Policy (see, however,
Account Value And Cash Surrender Value - Investment Return). If these charges
were included, the total 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 the Funds' investment
advisers and sub-advisers.
Table 3 illustrates the performance information pertaining to a hypothetical
Policy. These figures do reflect the deduction of current mortality and expense
risk charges, deductions from premiums, and Account Value charges.
18
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Since 20 15 10 5 3 1
Fund Inception Years Years Years Years Years Year
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MML Equity 14.78% 14.72% 16.19% 16.44% 18.25% 26.57% 28.59%
MML Equity Index*** 21.93% ---- ---- ---- ---- ---- ----
MML Blend 13.67% ---- ---- 13.68% 13.81% 19.29% 20.89%
MML Managed Bond 10.37% ---- 9.73% 9.08% 7.79% 10.58% 9.91%
MML Money Market 6.73% ---- 6.44% 5.63% 4.47% 5.27% 5.18%
Oppenheimer Global Securities 12.26% ---- ---- ---- 18.81% 13.82% 22.42%
Oppenheimer Capital Appreciation**** 15.31% ---- ---- 16.23% 15.92% 21.17% 11.67%
Oppenheimer Growth 15.43% ---- ---- 16.67% 18.61% 29.42% 26.68%
Oppenheimer Growth & Income 37.24% ---- ---- ---- ---- ---- 32.48%
Oppenheimer Multiple Strategies 12.04% ---- ---- 12.74% 13.31% 18.00% 17.22%
Oppenheimer High Income 13.35% ---- ---- 14.32% 13.75% 15.90% 12.21%
Oppenheimer Strategic Bond 7.64% ---- ---- ---- ---- 12.00% 8.71%
Oppenheimer Bond 9.89% ---- ---- 9.50% 8.23% 10.23% 9.25%
Oppenheimer Money 5.94% ---- ---- 5.79% 4.70% 5.35% 5.31%
Panorama LifeSpan Capital Appreciation 16.07% ---- ---- ---- ---- ---- 12.53%
Panorama LifeSpan Balanced 13.71% ---- ---- ---- ---- ---- 12.20%
Panorama LifeSpan Diversified Income 10.84% ---- ---- ---- ---- ---- 12.51%
</TABLE>
TABLE 2
EFFECTIVE ANNUAL RATES OF RETURN* OF EACH DIVISION OF THE SEPARATE ACCOUNT
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
1 5 10 Since
Division Year Years Years Inception
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MML Equity 28.29% 17.95% 16.14% 14.48%
MML Equity Index*** ---- ---- ---- 21.73%
MML Blend 20.59% 13.51% 13.38% 13.37%
MML Managed Bond 9.61% 7.49% 8.78% 10.07%
MML Money Market 4.88% 4.17% 5.33% 6.43%
Oppenheimer Global Securities 22.12% 18.51% ---- 11.96%
Oppenheimer Capital Appreciation**** 11.37% 15.62% 15.93% 15.01%
Oppenheimer Growth 26.38% 18.31% 16.37% 15.13%
Oppenheimer Growth & Income 32.18% ---- ---- 36.94%
Oppenheimer Multiple Strategies 16.92% 13.01% 12.44% 11.74%
Oppenheimer High Income 11.91% 13.45% 14.02% 13.05%
Oppenheimer Strategic Bond 8.41% ---- ---- 7.34%
Oppenheimer Bond 8.85% 7.93% 9.20% 9.59%
Oppenheimer Money** 5.01% 4.40% 5.49% 5.64%
Panorama LifeSpan Capital Appreciation 12.23% ---- ---- 15.77%
Panorama LifeSpan Balanced 11.90% ---- ---- 13.41%
Panorama LifeSpan Diversified Income 12.21% ---- ---- 10.54%
</TABLE>
* Performance information assumes current mortality and expense risk charges.
If guaranteed mortality and risk expense charges were used, the performance
results would be lower.
** 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.
*** This is the return for the period May 1, 1997 to December 31, 1997.
**** Effective May 1, 1998, this Fund is called Oppenheimer Aggressive Growth
Fund.
19
<PAGE>
TABLE 3
POLICY PERFORMANCE
This table illustrates the Account Value and Death Benefit of a hypothetical
Policy assuming the following:
. The Policy was 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*;
. 100% allocation to the respective Fund for each period illustrated;
. The Insured is a male, issue age 50, nonsmoker;
. An annual premium of $30,000 for 15years;
. Initial Case Premium Paid $1,000,000; and
. Full Underwriting and Death Benefit Option 1.
The Cash Surrender Value is not illustrated because there is no surrender charge
and we assume no Policy Debt.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
HISTORICAL RESULTS*- AS OF DECEMBER 31, 1997
MML Equity MML Mgd. MML Money Opp. Global Opp. Capital Opp. Growth
MML Equity Index MML Blend Bond Market Securities Apprec.*** Opp. Growth & Income
(9/15/71) (5/1/97) (2/3/84) (12/16/81) (12/16/81) (11/12/90) (8/15/86) (4/3/85) (7/5/95)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For a Policy In Force One Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $30,000 -- $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $30,041 -- $28,197 $25,555 $24,440 $28,665 $25,980 $29,607 $30,962
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $825,000 -- $825,000 $825,000 $825,000 $825,000 $825,000 $825,000 $825,000
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Five Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $150,000 -- $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $215,079 -- $183,543 $146,337 $133,184 $183,010 $184,481 $221,488 --
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $825,000 -- $825,000 $825,000 $825,000 $825,000 $825,000 $825,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Ten Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $300,000 -- $300,000 $300,000 $300,000 -- $300,000 $300,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $632,572 -- $522,033 $386,293 $314,136 -- $605,311 $643,454 --
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $1,290,447 -- $1,064,948 $825,000 $825,000 -- $1,234,835 $1,312,647 --
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Since Inception of the Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $450,000 $30,000 $420,000 $450,000 $450,000 $240,000 $360,000 $390,000 $90,000
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $4,676,129 $29,137 $951,865 $853,307 $605,476 $325,231 $766,598 $976,159 $114,061
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $6,780,386 $825,000 $1,741,913 $1,450,621 $1,029,310 $825,000 $1,479,535 $1,835,179 $825,000
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
HISTORICAL RESULTS*- AS OF DECEMBER 31, 1997
Opp. Panorama Panorama Panorama
Opp. Multiple Opp. High Opp. Strat. Money LifeSpan LifeSpan LifeSpan
Strategies Income Bond Opp. Bond Market** Cap. Appr. Balanced Div. Inc.
(2/9/87) (4/30/86) (5/3/93) (4/3/85) (4/3/85) (9/1/95) (9/1/95) (9/1/95)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For a Policy In Force One Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $27,324 $26,112 $25,276 $25,398 $24,464 $26,185 $26,111 $26,180
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $825,000 $825,000 $825,000 $825,000 $825,000 $825,000 $825,000 $825,000
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Five Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $150,000 $150,000 -- $150,000 $150,000 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $176,922 $170,836 -- $147,153 $133,825 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $825,000 $825,000 -- $825,000 $825,000 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Ten Year
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $300,000 $300,000 -- $300,000 $300,000 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $484,770 $540,994 -- $392,714 $317,491 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $988,930 $1,103,628 -- $825,000 $825,000 -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
For a Policy In Force Since Inception of the Fund
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Premium $330,000 $360,000 $150,000 $390,000 $330,000 $90,000 $90,000 $90,000
- ------------------------------------------------------------------------------------------------------------------------------------
Account Value $548,381 $703,160 $147,875 $585,155 $361,812 $85,711 $83,513 $82,642
- ------------------------------------------------------------------------------------------------------------------------------------
Death Benefit $1,091,278 $1,357,100 $825,000 $1,100,091 $825,000 $825,000 $825,000 $825,000
- ------------------------------------------------------------------------------------------------------------------------------------
</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 the
charges identified. 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.
*** Effective May 1, 1998, this Fund is called Oppenheimer Aggressive Growth
Fund.
20
<PAGE>
TABLE 4
ONE YEAR TOTAL RETURNS***
<TABLE>
<CAPTION>
For the year ended 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MML Equity** 28.59% 20.25% 31.13% 4.10% 9.52% 10.48% 25.56% (0.51)% 23.04% 16.68%
MML Equity Index**** 21.93% -- -- -- -- -- -- -- -- --
MML Blend 20.89% 13.95% 23.28% 2.48% 9.70% 9.36% 24.00% 2.37% 19.96% 13.40%
MML Mgd. Bond 9.91% 3.25% 19.14% (3.76)% 11.81% 7.31% 16.66% 8.38% 12.83% 7.13%
MML Money Mrkt. 5.18% 5.01% 5.58% 3.84% 2.75% 3.48% 6.01% 8.12% 9.16% 7.39%
Opp. Global Sec 22.42% 17.80% 2.24% (5.72)% 70.32% (7.11)% 3.39% 0.40%* -- --
Opp. Cap. Appr.***** 11.67% 20.16% 32.52% (7.59)% 27.32% 15.42% 54.72% (16.82)% 27.57% 13.41%
Opp. Growth 26.68% 25.20% 36.65% 0.97% 7.25% 14.53% 25.54% (8.21)% 23.59% 22.09%
Opp. Grth. & Inc. 32.48% 32.51% 23.52%* -- -- -- -- -- -- --
Opp. Multi. Strat. 17.22% 15.50% 21.36% (1.95)% 15.95% 8.99% 17.48% (1.91)% 15.76% 22.15%
Opp. High Inc. 12.21% 15.26% 20.37% (3.18)% 26.34% 17.92% 33.91% 4.65% 4.84% 15.58%
Opp. Strat. Bond 8.71% 12.07% 15.33% (3.78)% 4.25%* -- -- -- -- --
Opp. Bond 9.25% 4.80% 17.00% (1.94)% 13.04% 6.50% 17.63% 7.92% 13.32% 8.97%
Opp. Money 5.31% 5.13% 5.62% 4.20% 3.12% 3.76% 5.97% 7.80% 8.82% 7.31%
LifeSpan Cap. Appr. 12.53% 17.97% 6.65%* -- -- -- -- -- -- --
LifeSpan Bal. 12.20% 13.38% 6.08%* -- -- -- -- -- -- --
LifeSpan Div. Inc. 12.51% 6.93% 5.69%* -- -- -- -- -- -- --
<CAPTION>
For the year ended 1987 1986 1985 1984 1983 1982
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MML Equity** 2.10% 20.15% 30.54% 5.40% 22.85% 25.67%
MML Equity Index**** -- -- -- -- -- --
MML Blend 3.12% 18.30% 24.88% 8.24%* -- --
MML Mgd. Bond 2.60% 14.46% 19.94% 11.69% 7.26% 22.79%*
MML Money Mrkt. 6.49% 6.60% 8.03% 10.39% 8.97% 11.12%*
Opp. Global Sec -- -- -- -- -- --
Opp. Cap. Appr.***** 14.34% (1.65)%* -- -- -- --
Opp. Growth 3.32% 17.76% 9.50%* -- -- --
Opp. Grth. & Inc. -- -- -- -- -- --
Opp. Multi. Strat. 3.97%* -- -- -- -- --
Opp. High Inc. 8.07% 4.73%* -- -- -- --
Opp. Strat. Bond -- -- -- -- -- --
Opp. Bond 2.52% 10.12% 18.82%* -- -- --
Opp. Money 6.33% 5.68% 7.25%* -- -- --
LifeSpan Cap. Appr. -- -- -- -- -- --
LifeSpan Bal. -- -- -- -- -- --
LifeSpan Div. Inc. -- -- -- -- -- --
</TABLE>
* The figures shown are one year total returns from inception of the Funds.
The MML Money Market and MML Managed Bond Funds commenced operations on
December 16, 1981. The MML Blend Fund commenced operations on February 3,
1984. The MML Equity Fund commenced operations on September 15, 1971
(performance information prior to 1974 is not available). The Oppenheimer
Money Fund, Oppenheimer Bond Fund and Oppenheimer Growth Fund commenced
operations on April 3, 1985. The Oppenheimer High Income Fund commenced
operations on April 30, 1986. The Oppenheimer Capital Appreciation Fund
(Effective May 1, 1998, this Fund is called Aggressive Growth Fund.)
commenced operations on August 15, 1986. The Oppenheimer Multiple
Strategies Fund commenced operations on February 9, 1987. The Oppenheimer
Global Securities Fund commenced operations on November 12, 1990. The
Oppenheimer Strategic Bond Fund commenced operations on May 3, 1993.
Oppenheimer Growth Income Fund commenced operations on July 5, 1995. The
MML Equity Index Fund commenced operations on May 1, 1997. The Panorama
Portfolios commenced operations on September 1, 1995.
** The figures for the MML Equity Fund from 1974 through 1981 are as
follows: 1974: (17.61)%; 1975: 32.85%; 1976: 24.77%; 1977: (0.52)%; 1978:
3.71%; 1979: 19.54% 1980: 27.62%; 1981: 6.67%.
*** These figures do not reflect the mortality and expense risk charges
assessed against the Separate Account, deductions from premiums or
administrative, cost of insurance and underwriting charges assessed
against the Account Value of the Policies. If these charges were
included, the total 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 the Funds'
investment advisers.
**** This is the return for the period May 1, 1997 to December 31, 1997.
***** Effective May 1, 1998, this Fund is called Oppenheimer Aggressive Growth
Fund.
21
<PAGE>
General Provisions Of The Policy
This section of the Prospectus describes the general provisions of the Policy,
and is subject to the terms of the Policy. A Policyowner may review a copy of
the Policy upon request.
Premiums. The Policyowner selects a premium payment schedule in the Application
and is not bound by an inflexible premium schedule. Five premium concepts are
very important under the Policy: the minimum annual planned Policy premium,
planned Policy premium, minimum initial Policy premium, minimum Case premium,
and Initial Case Premium Paid.
Planned Policy Premiums. The minimum annual planned Policy premium is determined
by the initial Selected Face Amount, issue age and sex classification of the
Policy. For a Policy in a Case with an Initial Case Premium Paid of less than
$3,500,000, the sales load percentage is greater in each of the first ten Policy
Years up to the minimum annual planned Policy premium.
Planned Policy premiums are elected in the Application and may be changed at any
time. Planned Policy premiums are the basis for the Policy's premium billing.
The planned Policy premium may be subject to minimum and maximum amounts
depending on the Selected Face Amount of the Policy, the Insured's age, sex and
smoking class and the amount of the initial premium paid.
There is no penalty if the planned Policy 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 planned Policy
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.
The following table shows the minimum annual planned Policy premium (also
referred to as the "Cut-Off" premium) at certain ages for a Policy with a
Selected Face Amount of $100,000 in all years, under Death Benefit Option 1.
(See Death Benefits Under The Policy.)
MINIMUM ANNUAL PLANNED POLICY PREMIUM
LEVEL $100,000 SELECTED FACE AMOUNT
(DEATH BENEFIT OPTION 1)
Issue Age
----------------------------
Class Age 25 Age 40 Age 55
----- ------ ------ ------
MALE SMOKER $792 $1,150 $3,486
FEMALE SMOKER $640 $1,259 $2,516
UNISEX SMOKER $762 $1,521 $3,294
MALE NONSMOKER $666 $1,269 $2,705
FEMALE NONSMOKER $578 $1,082 $2,185
UNISEX NONSMOKER $648 $1,231 $2,593
MALE UNISMOKER $734 $1,403 $2,945
FEMALE UNISMOKER $603 $1,128 $2,245
UNISEX UNISMOKER $708 $1,345 $2,789
Minimum Initial Policy Premium. A minimum initial Policy premium must be paid
along with an Application or at any time prior to the delivery of the Policy.
The amount of the minimum initial Policy premium is the amount which, after the
deductions for sales load, state premium tax, and DAC tax charge (see Deductions
From Premiums), is sufficient (disregarding investment performance) to pay
twelve times the first monthly deduction (see Account Value Charges).
Thereafter, subject to the minimum and maximum premium limitations described
below, a Policyowner may make unscheduled premium payments at any time and in
any amount.
Minimum Case Premium. The minimum Case premium is $250,000 of first year
annualized premium for all Policies in a Case.
Initial Case Premium Paid. The Initial Case Premium Paid is the amount of
premium for all Policies in a Case on deposit with MassMutual before the Case is
installed on the administrative system. The Initial Case Premium Paid determines
sales load percentages for all Policies in that Case.
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. The minimum premium payment is $100.00. We have the right to
refund a premium paid in any year if it will increase the net amount at risk
under the Policy. Premium payments should be sent to our Home Office or to the
address indicated for payment on the notice.
Termination. This Policy does not terminate for failure to pay premiums since
payments, other than the initial premium, are not specifically required. Rather,
if on a Monthly Calculation Date, the Account Value less any Policy Debt is
insufficient to cover the total monthly deduction, the Policy enters a 61-day
grace period.
22
<PAGE>
Grace Period. We allow 61 days to pay any premium necessary to cover the overdue
monthly deduction. A Policyowner 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 terminates without value.
Death Benefit Under The Policy
The Death Benefit is the amount payable to the named Beneficiary(ies) when the
Insured dies. Upon receiving due proof of death, We pay the Beneficiary the
Death Benefit amount determined as of the date the Insured dies. 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.
In the Application, the applicant may select a Selected Face Amount for each
Policy Year. Under Death Benefit Option 1, 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 2, 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, sex and smoking classification. 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 charges 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.
The Selected Face Amount may be increased six months after issue or a previous
increase upon request by the Policyowner, subject to receipt by MassMutual of
adequate evidence of insurability. Additionally, any 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 increase must be for at least $5,000. Under
Death Benefit Option 1, the Death Benefit is unaffected by investment experience
unless the Death Benefit is based on the Minimum Face Amount. Under Option 2,
the Death Benefit may be increased or decreased by investment experience. (No
increase will be allowed after the Policy Anniversary Date nearest the Insured's
85th 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.
Policy A Policy B
-------- --------
(a) Selected Face Amount: $100,000 $100,000
(b) Account Value on
Date of Death: $40,000 $50,000
(c) Minimum Face Amount
Percentage on
Date of Death: 240% 240%
(d) Minimum Face
Amount (b x c): $96,000 $120,000
Death Benefit if
Option #1 in effect
(greater of a and d): $100,000 $120,000
Death Benefit if
Option #2 in effect
(greater of (i) a + b
and (ii) d): $140,000 $150,000
(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 under the Policy. This amount is allocated to the MML
Money Market Division until the later of: (1) the expiration of the Free Look
Period, or (2) receipt by MassMutual of notice that the Owner has received the
Policy. Subject to the allocation rules described in the Policy, the Account
Value is then allocated among the Divisions and the GPA in accordance with the
Policyowner's instructions in the Application, subject to applicable
restrictions.
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.
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.
23
<PAGE>
MassMutual currently does not intend to charge a fee for transfers, however,
MassMutual reserves the right to charge a fee not to exceed $10 per transfer if
there are more than six transfers in a Policy Year to compensate MassMutual for
the cost of processing transfers. 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 25% of the Account Value in the
GPA (excluding Policy Debt) at the time of the transfer. However, 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, 100% of the account value in the GPA
(excluding policy loans) may be transferred to the Separate Account. The Account
Value in the GPA equal to any Policy Debt cannot be transferred to the Separate
Account. All transfers made on one Valuation Date are considered one transfer.
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. A number of transfer
options are available. Automated Account Value Transfer transfers are not
available from more than one Division or from the GPA. This process is
considered one transfer per Policy Year.
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 length of time 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
on a pro-rata basis to all the designated Divisions and the GPA. No more
automated transfers will be processed.
Investment Return. The investment return of a Policy is based on:
. The Account Value held in each Division for that Policy;
. The investment experience of each Division as measured by its actual net
rate of return; and
. 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 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 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 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 written request to our Home Office. The
minimum amount of a Withdrawal is $100 (before deducting the withdrawal charge);
the maximum amount is the Cash Surrender Value less an amount equal to the
following, whichever is applicable: if the Withdrawal is made before the Policy
Anniversary Date nearest the Insured's 65th birthday, twelve multiplied by the
most recent Account Value Charges for the Policy; if on or after such Date,
sixty multiplied by the most recent Account Value Charges. 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 charge of 2.0% of the Withdrawal, not to exceed $25.00, is deducted
from each Withdrawal. The withdrawal charge is assessed for each Withdrawal and
is intended to compensate MassMutual for the cost of processing the Withdrawals.
MassMutual does not anticipate making a profit from this charge. The Account
Value will automatically be reduced by the amount of the Withdrawal.
24
<PAGE>
The Selected Face Amount of the Policy will be reduced as needed to prevent an
increase in the amount at risk, 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. Loans can be made on the Policy at any
time while the Insured is living. The maximum loan is an amount equal to the
Account Value at the time of the loan less any outstanding Policy Debt before
the new loan, interest on the loan being made and on any outstanding Policy Debt
to the next Policy Anniversary Date and an amount equal to the most recent
monthly charge for the Policy multiplied by the number of Monthly Calculation
Dates remaining up to including the next Policy Anniversary Date. 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 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 Policyowners.
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 Policyowner 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 31 days after the date We mailed the notice, the Policy terminates
without value at the end of those 31 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.
Interest. On the Application, the Policyowner may select a loan interest rate of
6% per year or, where permitted, an adjustable loan rate. When an adjustable
rate is 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 (maximum 0.75%)
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 Policyowner may cancel the Policy within 10 days (or longer if required by
state law) after the Policyowner receives it, or 10 days after the Policyowner
receives a written notice of withdrawal right or within 45 days after
25
<PAGE>
signing Part 1 of the Application, whichever is latest. The Policyowner should
mail or deliver the Policy and Policy delivery receipt either to MassMutual or
to the agent who sold the Policy or to one of our agency offices. If the Policy
is cancelled in this fashion, a refund will be made to the Policyowner. The
refund equals the Account Value (or all premiums paid where required by state
law), reduced by any amounts borrowed or withdrawn. During the Free Look Period,
the initial Net Premium will be allocated to the MML Money Market Division,
which invests in the MML Money Market Fund.
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 $100.
Fractional votes are counted.
Policyowners receive proxy material and a form with which such instructions may
be given. If required by law or regulation, MassMutual will vote shares of the
Funds held by the Separate Account as to which no effective instructions have
been received in the same proportion as the shares as to which instructions have
been received. Otherwise, MassMutual reserves the right to vote such shares in
its own discretion.
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;
. Make available additional Divisions investing in additional investment
companies;
. Eliminate one more more Divisions;
. Substitute or merge two or more Divisions or Separate Accounts;
. 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
. Deregister 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.
26
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------------
Roger G. Ackerman, Director Chairman and Chief Executive Officer, since 1996, President and Chief Operating
One Riverfront Plaza, HQE 2 Officer, 1990-1996, Corning, Inc.
Corning, NY 14831
- ------------------------------------------------------------------------------------------------------------------------------------
James R. Birle, Director Chairman, since 1997, and Founder, since 1994, President, 1994-1997, Resolute
2 Soundview Drive Partners, LLC; General Partner, Blackstone Group, 1988-1994
Greenwich, CT 06836
- ------------------------------------------------------------------------------------------------------------------------------------
Gene Chao, Director Chairman, President and CEO, Computer Projections, Inc., since 1991
733 SW Vista Avenue
Portland, OR 97205
- ------------------------------------------------------------------------------------------------------------------------------------
Patricia Diaz Dennis, Director Senior Vice President and Assistant General Counsel, SBC Communications Inc.,
175 East Houston, Room 4-A-70 since 1995; Special Counsel, Sullivan & Cromwell, 1993-1995; Assistant Secretary of
San Antonio, TX 78205 State for Human Rights and Humanitarian Affairs, U.S. Department of State, 1992-
1993
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony Downs, Director Senior Fellow, The Brookings Institution, since 1977
1775 Massachusetts Ave., N.W.
Washington, DC 20036-2188
- ------------------------------------------------------------------------------------------------------------------------------------
James L. Dunlap, Director President and Chief Operating Officer, United Meridian Corporation, since 1996;
1201 Louisiana, Suite 1400 Senior Vice President, Texaco, Inc. 1987-1996
Houston, TX 77002-5603
- ------------------------------------------------------------------------------------------------------------------------------------
William B. Ellis, Director Senior Fellow, Yale University School of Forestry and Environmental Studies, since
31 Pound Foolish Lane 1995; Chairman and Chief Executive Officer, Northeast Utilities, 1983-1995
Glastonbury, CT 06033
- ------------------------------------------------------------------------------------------------------------------------------------
Robert M. Furek, Director Chairman, State Board of Trustees for the Hartford School System, since 1997;
1 State Street, Suite 2310 President and Chief Executive Officer, Heublein, Inc., 1987-1996
Hartford, CT 06103
- ------------------------------------------------------------------------------------------------------------------------------------
Charles K. Gifford, Director Chairman and Chief Executive Officer, since 1995, and President, 1989-1995,
100 Federal Street BankBoston, N.A. and Chairman, since 1998, and Chief Executive Officer, since
Boston, MA 02110 1985, BankBoston Corporation
- ------------------------------------------------------------------------------------------------------------------------------------
William N. Griggs, Director Managing Director, Griggs & Santow, Inc., since 1983
75 Wall Street, 20th Floor
New York, NY 10005
- ------------------------------------------------------------------------------------------------------------------------------------
George B. Harvey, Director Retired Chairman, President and CEO, Pitney Bowes, since 1996
One Landmark Square
Suite 1905, 19th Floor
Stamford, CT 06901
- ------------------------------------------------------------------------------------------------------------------------------------
Barbara B. Hauptfuhrer, Director Director of various corporations, since 1972
1700 Old Welsh Road
Huntingdon Valley, PA 19006
- ------------------------------------------------------------------------------------------------------------------------------------
Sheldon B. Lubar, Director Chairman, Lubar & Co. Incorporated, since 1977
700 North Water Street, Suite 1200
Milwaukee, WI 53202
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William B. Marx, Jr., Director Retired Senior Executive Vice President, Lucent Technologies, since 1996; Executive
5 Peacock Lane Vice President and CEO Multimedia Products Group, AT&T, 1994-1996; Executive
Village of Golf, FL 33436-5299 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
55 Sandy Hook Road - North
Sarasota, FL 34242
- ------------------------------------------------------------------------------------------------------------------------------------
John J. Pajak, Director, President and President and Chief Operating Officer, since 1996, Vice Chairman and Chief
Chief Operating Officer Administrative Officer, 1996-1996, Executive Vice President, 1987-1996, MassMutual
1295 State Street
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas B. Wheeler, Director, Chairman Chairman and Chief Executive Officer, since 1996, President and Chief Executive
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
and Chief Executive Officer Officer, 1988-1996, MassMutual
1295 State Street
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Alfred M. Zeien, Director Chairman and Chief Executive Officer, The Gillette Company, since 1991
Prudential Tower
Boston, MA 02199
- ------------------------------------------------------------------------------------------------------------------------------------
Executive Vice Presidents:
- ------------------------------------------------------------------------------------------------------------------------------------
Lawrence V. Burkett, Jr. Executive Vice President and General Counsel, since 1993, Senior Vice President and
1295 State Street Deputy General Counsel, 1992-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Peter J. Daboul Executive Vice President and Chief Information Officer, since 1997, Senior Vice
1295 State Street President, 1990-1997, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Davies Executive Vice President, since 1994, Associate Executive Vice President, 1994-1994,
1295 State Street General Agent, 1982-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Daniel J. Fitzgerald Executive Vice President, since 1994, Corporate Financial Operations, 1994-1997,
1295 State Street Senior Vice President, 1991-1994
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
James E. Miller Executive Vice President, since 1997 and 1987-1996, MassMutual; Senior Vice
1295 State Street President, UniCare Life and Health Insurance Company, 1996-1997
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
John V. Murphy Executive Vice President, since 1997, MassMutual; Executive Vice President and
1295 State Street Chief Operating Officer, David L. Babson & Co., Inc., 1995-1997; Chief Operating
Springfield, MA 01111 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, since 1993, Executive Vice
1295 State Street President, 1992-1993, MassMutual
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph M. Zubretsky Executive Vice President and Chief Financial Officer, since 1997, MassMutual; Chief
1295 State Street Financial Officer, 1996, HealthSource; Coopers & Lybrand, 1990-1996
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------------
</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.
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 cannot exceed 0.75%. 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.
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<PAGE>
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.
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 adviser for further
guidance.
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<PAGE>
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.
For complete information on the impact of changes with respect to the Policy and
federal and state tax considerations, a qualified tax adviser 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, 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 retested 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 retested 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 retested 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 Insured, a qualified tax adviser should be
consulted.
Once a Policy fails the 7-pay test, loans, collateral assignments, and
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 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 of the Trusts 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
30
<PAGE>
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
Paid-up Policy Date. The Paid-up Policy Date is the Policy Anniversary Date
nearest 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 1. 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 total 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 acknowledgement 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. 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:
. 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
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<PAGE>
. 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 payments.
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 Owner or, if deceased, the Owner's estate.
Changing the Owner or Beneficiary. The Owner 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.
Right to Substitute Insured. Upon written Application to MassMutual, the Policy
may be transferred to the life of a substitute Insured. The transfer becomes
effective upon the transfer date, which is the Policy Anniversary on or next
following, the latter of the date We approve the Application for transfer; and
the date any required cost associated with the transfer is paid, subject to the
following conditions (the "Transfer Date"):
. This Policy must be in force on the Transfer Date.
. A written Application for the transfer and payment of any required cost to
transfer must be approved by Us at our Home Office.
. Evidence of insurability of the substitute Insured, satisfactory to us, is
required.
. The substitute Insured must not have been under 20 years of age on the
birthday nearest the Policy Date of this Policy.
. The substitute Insured must not be over 65 years of age on the birthday
nearest the Transfer Date.
. The Owner of this Policy after it has been transferred must have an
insurable interest in the life of the substitute Insured.
The Selected Face Amount for the substitute Insured will be determined as for a
new Insured. The Account Value immediately after transfer will be equal to: (i)
the Account Value immediately before the transfer, plus (ii) any Net Premium
necessary to make the cash surrender value, immediately before the monthly
charges are deducted on the Transfer Date, at least 12 times the monthly
charges, minus (iii) any amount which must be refunded (so that the amount at
risk is not greater than the Selected Face Amount), minus (iv) the monthly
charges on the Transfer Date. Future charges against the Policy will be based on
the life of the substitute Insured.
The costs to transfer are an administrative fee of $75, plus any premium
necessary to effect the transfer, plus any excess Policy Debt not repaid prior
to transfer. Excess Policy Debt is the amount by which Policy Debt exceeds the
maximum loan available after transfer. Any such excess must be repaid on or
before the Transfer Date.
The incontestability and suicide periods begin to run anew from the Transfer
Date. Any assignments existing on the Transfer Date will continue to apply.
The Internal Revenue Service has ruled that a substitution of Insureds is an
exchange of contracts which does not qualify for the tax deferral available
under Code Section 1035. Therefore upon a substitution of Insureds, the
Policyowner must include in current gross income all the previously unrecognized
gain in the Policy.
Assignment. The Policy may be assigned as collateral for a loan or other
obligation, subject to any outstanding Policy Debt. For any assignment to be
binding on us, We must receive a signed copy of it at our Home Office. 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.
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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 must bring any legal action to
contest the validity of a Policy within two years from its Issue Date or an
increase in the Selected Face Amount. After that We cannot contest its validity,
except for failure to pay premiums.
Misstatement of Age or Sex. If the Insured's date of birth or sex as given in
the Application 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 and sex. If the
adjustment is made before the Insured dies, then future monthly deductions will
be based on the correct age and sex.
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 any required documents in proper form 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.
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 within five 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.
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
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, a wholly-owned subsidiary of MassMutual, 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. Also
located at 1414 Main Street, Springfield, MA 01144-1013, MML Investors Services,
Inc. ("MMLISI"), a wholly-owned subsidiary of MassMutual, 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 an application for one of the Policies is completed, it is submitted to us.
The selling broker or co-underwriter 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. Compensation paid to
MMLISI in 1997 was $19,800. Compensation paid to MML Distributors in 1997 was
$10,000. Commissions are paid through MMLISI and MML Distributors to agents and
selling brokers for selling the Policies. During 1997 such payments amounted to
$1,316,943.
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.
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<PAGE>
Commissions Schedule. Agents or selling brokers receive commissions as a
percentage of the premium paid under the Policies. The commission percentage on
these Policies is based on the Initial Case Premium Paid for all Policies in a
Case. It is not affected by subsequent changes under the Case. The maximum
commission percentage paid under the Policies is 18% of premiums.
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
$50,000,000 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
The financial statements of the Strategic Variable Life segment of the Separate
Account and the financial statements of MassMutual included in this Prospectus
have been included herein in reliance on the reports of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of that firm as experts
in accounting and auditing.
Coopers & Lybrand's report on the statutory financial statements of MassMutual
includes explanatory paragraphs relating to the use of statutory accounting
practices rather than generally accepted accounting principles.
Actuarial matters in this Prospectus have been examined by John M. Valencia,
FSA, MAAA, Assistant Vice President, for MassMutual. His opinion on actuarial
matters is filed as an exhibit to the registration statements we filed with the
SEC.
Financial Statements
The financial statements of MassMutual and the Strategic Variable Life segment
of the Separate Account included herein should be considered only as bearing
upon the ability of MassMutual to meet its obligations under the Policy.
34
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyowners of
Massachusetts Mutual Life Insurance Company
We have audited the accompanying statements of assets and liabilities of the MML
Equity Division, MML Equity Index Division, MML Money Market Division, MML
Managed Bond Division, MML Blend Division, Oppenheimer Money Division,
Oppenheimer High Income Division, Oppenheimer Bond Division, Oppenheimer Capital
Appreciation Division, Oppenheimer Growth Division, Oppenheimer Multiple
Strategies Division, Oppenheimer Global Securities Division, Oppenheimer
Strategic Bond Division, Oppenheimer Growth & Income Division, Panorama LifeSpan
Diversified Income Division, Panorama LifeSpan Balanced Division and Panorama
LifeSpan Capital Appreciation Division of the Strategic Variable Life Segment of
Massachusetts Mutual Variable Life Separate Account I as of December 31, 1997,
the related statements of operations and statements of changes in net assets for
the periods indicated thereon. These financial statements are the responsibility
of the Separate Account's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
verification of investments owned as of December 31, 1997, by examination of the
records of MML Series Investment Fund and by confirmation with Oppenheimer
Variable Account Funds and Panorama Series Fund, Inc. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the MML Equity Division, MML
Equity Index Division, MML Money Market Division, MML Managed Bond Division, MML
Blend Division, Oppenheimer Money Division, Oppenheimer High Income Division,
Oppenheimer Bond Division, Oppenheimer Capital Appreciation Division,
Oppenheimer Growth Division, Oppenheimer Multiple Strategies Division,
Oppenheimer Global Securities Division, Oppenheimer Strategic Bond Division,
Oppenheimer Growth & Income Division Panorama LifeSpan Diversified Income
Division, Panorama LifeSpan Balanced Division and Panorama LifeSpan Capital
Appreciation Division of the Strategic Variable Life Segment of Massachusetts
Mutual Variable Life Separate Account I as of December 31, 1997, the results of
their operations and the changes in their net assets for the periods indicated
thereon, in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 3, 1998
35
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
MML MML MML
MML Equity Money Managed MML Oppenheimer
Equity Index Market Bond Blend Money
Division Division Division Division Division Division
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 97,934 1,951 1,318,214 103,198 50,243 82,323
============ ============ ============ ============ ============ ============
Identified cost (Note 3B) $ 3,153,305 $ 22,615 $1,318,214 $1,239,388 $1,169,448 $ 82,323
============ ============ ============ ============ ============ ============
Value (Note 3A) $ 3,471,097 $ 23,566 $1,318,214 $1,280,585 $1,209,827 $ 82,323
Dividends receivable 279,879 220 9,325 20,590 90,693 147
------------ ------------ ------------ ------------ ------------ ------------
Total assets 3,750,976 23,786 1,327,539 1,301,175 1,300,520 82,470
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 2,360 7 1,247 977 756 62
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS: $ 3,748,616 $ 23,779 $1,326,292 $1,300,198 $1,299,764 $ 82,408
============ ============ ============ ============ ============ ============
Net Assets:
For variable life insurance policies $ 3,739,982 $ 17,670 $1,320,662 $1,294,203 $1,292,290 $ 76,766
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 8,634 6,109 5,630 5,995 7,474 5,642
------------ ------------ ------------ ------------ ------------ ------------
Net assets $ 3,748,616 $ 23,779 $1,326,292 $1,300,198 $1,299,764 $ 82,408
============ ============ ============ ============ ============ ============
Accumulation units (Note 8)
Policyowners 2,165,179 14,462 1,173,038 1,079,621 864,504 68,028
Massachusetts Mutual Life
Insurance Company 5,000 5,000 5,000 5,000 5,000 5,000
------------ ------------ ------------ ------------ ------------ ------------
Total units 2,170,179 19,462 1,178,038 1,084,621 869,504 73,028
============ ============ ============ ============ ============ ============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.73 $ 1.22 $ 1.13 $ 1.20 $ 1.49 $ 1.13
December 31, 1996 1.35 -- 1.07 1.09 1.24 1.08
December 31, 1995 1.12 -- 1.03 1.06 1.09 1.03
<CAPTION>
Oppenheimer Oppenheimer
High Oppenheimer Capital
Income Bond Appreciation
Division Division Division
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 175,599 11,852 60,728
============ ============ ============
Identified cost (Note 3B) $2,017,710 $ 140,287 $ 2,412,648
============ ============ ============
Value (Note 3A) $2,022,898 $ 141,157 $2,487,423
Dividends receivable -- -- --
------------ ------------ ------------
Total assets 2,022,898 141,157 2,487,423
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 932 89 1,841
------------ ------------ ------------
NET ASSETS: $2,021,966 $ 141,068 $2,485,582
============ ============ ============
Net Assets:
For variable life insurance policies $2,015,024 $ 135,056 $2,477,741
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 6,942 6,012 7,841
------------ ------------ ------------
Net assets $2,021,966 $ 141,068 $2,485,582
============ ============ ============
Accumulation units (Note 8)
Policyowners 1,451,429 112,325 1,580,341
Massachusetts Mutual Life
Insurance Company 5,000 5,000 5,000
------------ ------------ ------------
Total units 1,456,429 117,325 1,585,341
============ ============ ============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.39 $ 1.20 1.55
December 31, 1996 1.24 1.10 1.41
December 31, 1995 1.08 1.06 1.17
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF ASSETS AND LIABILITIES (Continued)
December 31, 1997
<TABLE>
<CAPTION>
Panorama
Oppenheimer Oppenheimer Oppenheimer Oppenheimer LifeSpan
Oppenheimer Multiple Global Strategic Growth & Diversified
Growth Strategies Securities Bond Income Income
Division Division Division Division Division Division
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 115,383 24,504 58,195 14,271 37,530 4,668
============ ============ ============ ============ ============ ============
Identified cost (Note 3B) $3,511,675 $ 400,113 $1,169,837 $ 72,944 $ 716,108 $ 4,994
============ ============ ============ ============ ============ ============
Value (Note 3A) $3,743,026 $ 416,805 $1,243,618 $ 73,069 $ 772,377 $ 5,508
Dividends receivable -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total assets 3,743,026 416,805 1,243,618 73,069 772,377 5,508
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 2,119 205 668 49 348 4
------------ ------------ ------------ ------------ ------------ ------------
NET ASSETS: $3,740,907 $ 416,600 $1,242,950 $ 73,020 $ 772,029 $ 5,504
============ ============ ============ ============ ============ ============
Net Assets:
For variable life insurance policies $3,732,000 $ 409,425 $1,235,753 $ 66,561 $ 761,112 $ 5,504
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 8,907 7,175 7,197 6,459 10,917 --
------------ ------------ ------------ ------------ ------------ ------------
Net assets $3,740,907 $ 416,600 $1,242,950 $ 73,020 $ 772,029 $ 5,504
============ ============ ============ ============ ============ ============
Accumulation units (Note 8)
Policyowners 2,095,021 285,292 858,534 51,528 348,638 --
Massachusetts Mutual Life
Insurance Company 5,000 5,000 5,000 5,000 5,000 5,000
------------ ------------ ------------ ------------ ------------ ------------
Total units 2,100,021 290,292 863,534 56,528 353,638 5,000
============ ============ ============ ============ ============ ============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.78 $ 1.44 $ 1.44 $ 1.29 $ 2.18 $ 1.10
December 31, 1996 1.41 1.23 1.18 1.19 1.65 --
December 31, 1995 1.13 1.07 1.00 1.07 1.25 --
<CAPTION>
Panorama
Panorama LifeSpan
LifeSpan Capital
Balanced Appreciation
Division Division
------------ ------------
<S> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 4,459 4,305
============ ============
Identified cost (Note 3B) $ 4,994 $ 4,994
============ ============
Value (Note 3A) $ 5,707 $ 5,812
Dividends receivable -- --
------------ ------------
Total assets 5,707 5,812
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 4 4
------------ ------------
NET ASSETS: $ 5,703 $ 5,808
============ ============
Net Assets:
For variable life insurance policies $ 5,703 $ 5,808
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company -- --
------------ ------------
Net assets $ 5,703 $ 5,808
============ ============
Accumulation units (Note 8)
Policyowners -- --
Massachusetts Mutual Life
Insurance Company 5,000 5,000
------------ ------------
Total units 5,000 5,000
============ ============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.14 $ 1.16
December 31, 1996 -- --
December 31, 1995 -- --
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
*MML MML MML
MML Equity Money Managed MML Oppenheimer
Equity Index Market Bond Blend Money
Division Division Division Division Division Division
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 279,904 $ 220 $ 57,819 $ 79,019 $ 111,288 $ 1,668
Expenses
Mortality and expense risk fees
(Note 4) 7,260 14 3,433 3,589 2,413 96
------------ ------------ ------------ ------------ ------------ ------------
Net investment Income
(loss) (Note 3C) 272,644 206 54,386 75,430 108,875 1,572
------------ ------------ ------------ ------------ ------------ ------------
Net realized and unrealized
gain (loss) on investments
Net realized gain on
investments (Notes 3B, 3C & 6) 21,883 1 - 868 2,275 -
Change in net unrealized
appreciation/depreciation
of investments 282,387 951 - 38,817 32,048 -
------------ ------------ ------------ ------------ ------------ ------------
Net gain (loss) on investments 304,270 952 - 39,685 34,323 -
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations $ 576,914 $ 1,158 $ 54,386 $ 115,115 $ 143,198 $ 1,572
============ ============ ============ ============ ============ ============
<CAPTION>
Oppenheimer Oppenheimer
High Oppenheimer Capital
Income Bond Appreciation
Division Division Division
------------ ------------ ------------
<S> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 128,097 $ 3,293 $ 66,210
Expenses
Mortality and expense risk fees
(Note 4) 4,039 128 5,297
------------ ------------ ------------
Net investment Income
(loss) (Note 3C) 124,058 3,165 60,913
------------ ------------ ------------
Net realized and unrealized
gain (loss) on investments
Net realized gain on
investments (Notes 3B, 3C & 6) 45,671 49 43,440
Change in net unrealized
appreciation/depreciation
of investments 10,877 826 64,677
------------ ------------ ------------
Net gain (loss) on investments 56,548 875 108,117
------------ ------------ ------------
Net increase in net assets
resulting from operations $ 180,606 $ 4,040 $ 169,030
============ ============ ============
</TABLE>
*For the period May 1, 1997 (Commencement of Operations) through December 31,
1997
See Notes to Financial Statements.
38
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF OPERATIONS (Continued)
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
*Panorama *Panorama
Oppenheimer Oppenheimer Oppenheimer Oppenheimer LifeSpan *Panorama LIfeSpan
Oppenheimer Multiple Global Strategic Growth & Diversified LifeSpan Capital
Growth Strategies Securities Bond Income Income Balanced Appreciation
Division DIvision Division Division Division Division Division Division
----------- ----------- ----------- ----------- ----------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 90,462 $ 16,765 $ 8,496 $ 3,204 $ 9,871 $ -- $ - $ -
Expenses
Mortality and expense risk fees
(Note 4) 6,020 660 2,340 106 750 10 11 12
--------- --------- -------- -------- -------- -------- --------- --------
Net investment income
(loss) (Note 3C) 84,442 16,105 6,156 3,098 9,121 (10) (11) (12)
--------- --------- -------- -------- -------- -------- --------- --------
Net realized and unrealized
gain (loss) on investments
Net realized gain on
investments (Notes 3B, 3C & 6) 113,022 1,030 88,098 106 3,753 1 1 1
Change in net unrealized
appreciation/depreciation
of investments 203,917 16,050 52,377 (231) 53,086 513 713 819
--------- --------- -------- -------- -------- -------- --------- --------
Net gain (loss) on investments 316,939 17,080 140,475 (125) 56,839 514 714 820
--------- --------- -------- -------- -------- -------- --------- --------
Net increase in net assets
resulting from operations $401,381 $ 33,185 $146,631 $ 2,973 $ 65,960 $ 504 $ 703 $ 808
========= ========= ======== ======== ======== ======== ========= ========
</TABLE>
* For the period May 1, 1997 (Commencement of Operations) through December
31, 1997
See Notes to Financial Statements.
39
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
*MML MML MML
MML Equity Money Managed MML Oppenheimer
Equity Index Market Bond Blend Money
Division Division Division Division Division Division
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations;
Net investment income (loss) $ 272,644 $ 206 $ 54,386 $ 75,430 $ 108,875 $ 1,572
Net realizod gain on investments 21,883 1 -- 868 2,275 --
Change in net unrealized appreciation/
depreciation of investments 282,387 951 -- 38,817 32,048 --
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 576,914 1,158 54,386 115,115 143,198 1,572
----------- ----------- ----------- ----------- ----------- -----------
Capital transactions; (Note 8)
Net contract payments 885,334 -- 7,536,342 528,095 281,565 --
Withdrawal of funds (20,829) -- (504,924) (9,303) -- --
Transfer of death benefits -- -- -- -- -- --
Transfer due to reimbursement
(payment) of acoumulation unit
value fluctuation 10,001 (4) 5,648 110 2,377 (1)
Transfer of seed money -- 5,000 -- -- -- --
Withdrawal due to charges for
administrative and insurance costs (93,015) -- (140,059) (34,521) (15,017) (982)
Divisional transfers 1,428,272 17,625 (6,356,690) 173,873 584,458 76,444
----------- ----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 2,209,763 22,621 540,317 658,254 853,383 75,461
----------- ----------- ----------- ----------- ----------- -----------
Total increase 2,786,677 23,779 594,703 773,369 996,581 77,033
NET ASSETS, at beginning
of the period/year 961,939 -- 731,589 526,829 303,183 5,375
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS, at end
of the year $ 3,748,616 $ 23,779 $ 1,326,292 $ 1,300,198 $ 1,299,764 $ 82,408
=========== =========== =========== =========== =========== ===========
<CAPTION>
Oppenheimer Oppenheimer
High Oppenheimer Capital
Income Bond Appreciation
Division Division Division
----------- ----------- -----------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations;
Net investment income (loss) $ 124,058 $ 3,165 $ 60,913
Net realizod gain on investments 45,671 49 43,440
Change in net unrealized appreciation/
depreciation of investments 10,877 826 64,677
----------- ----------- -----------
Net increase in net assets
resulting from operations 180,606 4,040 169,030
----------- ----------- -----------
Capital transactions; (Note 8)
Net contract payments 208,375 389 841,616
Withdrawal of funds (10,527) -- --
Transfer of death benefits -- -- (34,315)
Transfer due to reimbursement
(payment) of acoumulation unit
value fluctuation 1,001 (1) (20,320)
Transfer of seed money -- -- --
Withdrawal due to charges for
administrative and insurance costs (26,651) (2,194) (41,860)
Divisional transfers 403,017 133,314 605,061
----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 575,215 131,508 1,350,182
----------- ----------- -----------
Total increase 755,821 135,548 1,519,212
NET ASSETS, at beginning
of the period/year 1,266,145 5,520 966,370
----------- ----------- -----------
NET ASSETS, at end
of the year $ 2,021,966 $ 141,068 $ 2,485,582
=========== =========== ===========
</TABLE>
*For the period May 1, 1997 (Commencement of Operations) through December 31,
1997
See Notes to Financial Statements.
40
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable
Life
STATEMENT OF CHANGES IN NET ASSETS (Continued)
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Multiple Global Strategic Growth &
Growth Strategies Securities Bond Income
Division Division Division Division Division
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations;
Net investmnent income (loss) $ 84,442 $ 16,105 $ 6,156 $ 3,098 $ 9,121
Net realized gain on investments 113,022 1,030 88,098 106 3,753
Change in net unrealized appreciation/
depreciation of investments 203,917 16,050 52,377 (231) 53,086
----------- ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations 401,381 33,185 146,631 2,973 65,960
----------- ----------- ----------- ----------- -----------
Capital transactions; (Note 8)
Net contract payments 1,154,703 142,740 357,799 13,326 79,290
Wthdrawal of funds -- -- -- -- --
Transfer of death benefits (35,742) -- -- -- --
Transfer due to reimbursement
(payment) of accumulation unit
value fluctuation 257 86 10,173 78 (291)
Transfer of seed money -- -- -- -- --
Wthdrawal due to charges for
administrative and insurance costs (66,528) (10,284) (19,665) (1,444) (9,046)
Divisional transfers 1,521,051 244,734 488,859 52,128 627,852
----------- ----------- ----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 2,573,741 377,276 837,166 64,088 697,805
----------- ----------- ----------- ----------- -----------
Total increase 2,975,122 410,461 983,797 67,061 763,765
NET ASSETS, at beginning
of the period/year 765,785 6,139 259,153 5,959 8,264
----------- ----------- ----------- ----------- -----------
NET ASSETS, at end
of the year $ 3,740,907 $ 416,600 $ 1,242,950 $ 73,020 $ 772,029
=========== =========== =========== =========== ===========
<CAPTION>
*Panorama *Panorama
LifeSpan *Panorama LifeSpan
Diversified LifeSpan Capital
Income Balanced Appreciation
Division Division Division
----------- ----------- -----------
<S> <C> <C> <C>
Increase (decrease) in net assets
Operations;
Net investmnent income (loss) $ (10) $ (11) $ (12)
Net realized gain on investments 1 1 1
Change in net unrealized appreciation/
depreciation of investments 513 713 819
----------- ----------- -----------
Net increase in net assets
resulting from operations 504 703 808
----------- ----------- -----------
Capital transactions; (Note 8)
Net contract payments -- -- --
Wthdrawal of funds -- -- --
Transfer of death benefits -- -- --
Transfer due to reimbursement
(payment) of accumulation unit
value fluctuation -- -- --
Transfer of seed money 5,000 5,000 5,000
Wthdrawal due to charges for
administrative and insurance costs -- -- --
Divisional transfers -- -- --
----------- ----------- -----------
Net increase in net assets resulting
from capital transactions 5,000 5,000 5,000
----------- ----------- -----------
Total increase 5,504 5,703 5,808
NET ASSETS, at beginning
of the period/year -- -- --
----------- ----------- -----------
NET ASSETS, at end
of the year 5,504 $ 5,703 $ 5,808
=========== =========== ===========
</TABLE>
*For the period May 1,1997 (Commencement of Operations) through December 31,1997
See Notes to Financial Statements.
41
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
MML MML Oppenheimer
MML Money Managed MML Oppenheimer High
Equity Market Bond Blend Money Income
Division Division Division Division Division Division
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 41,934 $ 33,534 $ 16,017 $ 12,567 $ 248 $ 30,516
Net realized gain (loss)
on investments (2,827) -- (112) 313 -- 18,837
Change in net unrealized
appreciation/depreciation
of investments 34,986 -- 2,301 8,127 -- (5,803)
----------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations 74,093 33,534 18,206 21,007 248 43,550
----------- ----------- ----------- ----------- ------------ -----------
Capital transactions: (Note 8)
Transfer of net premium 4,154 5,620,114 1,941 -- -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation 362 6,520 (118) 1,199 -- 1,702
Withdrawal due to charges for
administrative and insurance
costs (13,823) (92,404) (9,099) (2,663) -- (4,525)
Divisional transfers 891,536 (4,841,301) 510,586 278,183 -- 1,220,019
----------- ----------- ----------- ----------- ------------ -----------
Net increase in net assets
resulting from capital transactions 882,229 692,929 503,310 276,719 -- 1,217,196
----------- ----------- ----------- ----------- ------------ -----------
Total increase 956,322 726,463 521,516 297,726 248 1,260,746
NET ASSETS, at beginning
of the year 5,617 5,126 5,313 5,457 5,127 5,399
----------- ----------- ----------- ----------- ------------ -----------
NET ASSETS, at end
of the year $ 961,939 $ 731,589 $ 526,829 $ 303,183 $ 5,375 $ 1,266,145
=========== =========== =========== =========== ============ ===========
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Oppenheimer Capital Oppenheimer Multiple Global
Bond Appreciation Growth Strategies Securities
Division Division Division Division Division
----------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 326 $ (347) $ (34) $ 391 $ (255)
Net realized gain (loss)
on investments - (10,070) (3,859) 1 257
Change in net unrealized
appreciation/depreciation
of investments (88) 9,218 26,779 416 21,378
----------- ------------ ----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations 238 (1,199) 22,886 808 21,380
----------- ------------ ----------- ----------- ----------
Capital transactions: (Note 8)
Transfer of net premium -- 552 553 -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation -- (253) (268) -- 519
Withdrawal due to charges for
administrative and insurance
costs -- (5,150) (3,218) -- (2,010)
Divisional transfers -- 966,547 740,185 -- 234,245
----------- ------------ ----------- ----------- ----------
Net increase in net assets
resulting from capital transactions -- 961,696 737,252 -- 232,754
----------- ------------ ----------- ----------- ----------
Total increase 238 960,497 760,138 808 254,134
NET ASSETS, at beginning
of the year 5,282 5,873 5,647 5,331 5,019
----------- ------------ ----------- ----------- ----------
NET ASSETS, at end
of the year $ 5,520 $ 966,370 $ 765,785 $ 6,139 $ 259,153
=========== ============ =========== =========== ==========
<CAPTION>
Oppenheimer Oppenheimer
Strategic Growth &
Bond Income
Division Division
----------- -----------
<S> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 419 $ 72
Net realized gain (loss)
on investments 1 7
Change in net unrealized
appreciation/depreciation
of investments 206 1,930
----------- -----------
Net increase (decrease) in net assets
resulting from operations 626 2,009
----------- -----------
Capital transactions: (Note 8)
Transfer of net premium -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation -- 1
Withdrawal due to charges for
administrative and insurance
costs -- --
Divisional transfers -- --
----------- -----------
Net increase in net assets
resulting from capital transactions -- 1
----------- -----------
Total increase 626 2,010
ASSETS, at beginning
of the year 5,333 6,254
----------- -----------
NET ASSETS, at end
of the year $ 5,959 $ 8,264
=========== ===========
</TABLE>
42
<PAGE>
Massachusetts Mutual Variable Life Separate Account I -- Strategic Variable Life
Notes To Financial Statements
1. HISTORY
Massachusetts Mutual Variable Life Separate Account I ("Separate Account I")
is a separate investment account established on July 13, 1988 by
Massachusetts Mutual Life Insurance Company ("MassMutual") in accordance
with the provisions of Section 132G of Chapter 175 of the Massachusetts
General Laws.
MassMutual maintains six segments within Separate Account I. The initial
segment ("Variable Life Plus Segment") is used exclusively for MassMutual's
flexible premium variable whole life insurance policy, known as Variable
Life Plus.
On March 30, 1990, MassMutual established a second segment ("Large Case
Variable Life Plus Segment") within Separate Account I to be used
exclusively for MassMutual's flexible premium variable whole life insurance
policy with table of selected face amounts, known as Large Case Variable
Life Plus.
On July 5, 1995, MassMutual established a third segment ("Strategic Variable
Life Segment") within Separate Account I to be used exclusively for
MassMutual's flexible premium variable whole life insurance policy with
table of selected face amounts, known as Strategic Variable Life.
On July 24, 1995, MassMutual established a fourth segment ("Variable Life
Select Segment") within Separate Account I to be used exclusively for
MassMutual's flexible premium variable whole life insurance policy, known as
Variable Life Select.
On February 11, 1997, MassMutual established a fifth segment ("GVUL
Segment") within Separate Account I to be used exclusively for MassMutual's
group variable universal life insurance product known as Strategic GVUL.
On November 12, 1997, MassMutual established a sixth segment ("SVUL
Segment") within Separate Account I to be used exclusively for MassMutual's
survivorship variable universal life insurance product known as SVUL.
The Separate Account I operates as a registered unit investment trust
pursuant to the Investment Company Act of 1940 and the rules promulgated
thereunder. MassMutual paid $65,000 to the Strategic Variable Life Segment
on July 5, 1995 to provide initial capital: 14,439 shares were purchased in
two management investment companies (MML Series Investment Fund and
Oppenheimer Variable Account Funds) described in Note 2 supporting the
thirteen divisions of Strategic Variable Life Segment.
On May 1, 1997, MassMutual paid $20,000 to provide initial capital for four
new divisions of the Strategic Variable Life Segment: 13,950 shares were
purchased in the MML Equity Index Division, of the MML Series Investment
Fund and three divisions in the Panorama Series Fund, Inc. described in
Note 2.
2. INVESTMENT OF STRATEGIC VARIABLE LIFE SEGMENT'S ASSETS
Strategic Variable Life Segment maintains seventeen divisions. Each division
invests in corresponding shares of the five series of MML Series Investment
Fund ("MML Trust"), nine funds of the Oppenheimer Variable Account Funds
("Oppenheimer Trust"), and the three Panorama LifeSpan Portfolios of the
Panorama Series Fund, Inc. ("Panorama Fund"). At any one time, only eight
divisions are available to a policyowner.
MML Equity Fund, MML Equity Index Fund, MML Money Market Fund, MML Managed
Bond Fund and MML Blend Fund are the five series of the MML Trust. The MML
Trust is a registered, no-load, open-end, management investment company for
which MassMutual serves as investment manager. Concert Capital Management,
Inc. ("Concert") served as the investment sub-advisor to MML Equity Fund and
the Equity Sector of the MML Blend Fund from 1993-1996. Concert merged with
and into David L. Babson and Company, Inc. ("Babson") effective December 31,
1996. At such time, both Concert and Babson were wholly-owned subsidiaries
of DLB Acquisition Corporation, which is a controlled subsidiary of
MassMutual. Thus, effective January 1, 1997, Babson serves as the investment
sub-advisor to MML Equity Fund and the Equity Sector of the MML Blend Fund.
MassMutual has entered into a sub-advisory agreement with Mellon Equity
Associates ("Mellon Equity") whereby Mellon Equity serves as the sub-advisor
to the MML Equity Index Fund.
43
<PAGE>
Notes To Financial Statements (Continued)
The Oppenheimer Trust is a registered, open-end, diversified management
investment company with nine of its funds currently available to the
Strategic Variable Life policyowners: Oppenheimer Money Fund, Oppenheimer
High Income Fund, Oppenheimer Bond Fund, Oppenheimer Capital Appreciation
Fund, Oppenheimer Growth Fund, Oppenheimer Multiple Strategies Fund,
Oppenheimer Global Securities Fund, Oppenheimer Strategic Bond Fund and
Oppenheimer Growth & Income Fund.
The Panorama Fund is a registered, open-end, diversified management
investment company with three of its portfolios currently available to the
Strategic Variable Life policyowners: Panorama LifeSpan Diversified Income
Portfolio, Panorama LifeSpan Balanced Portfolio and Panorama LifeSpan
Capital Appreciation Portfolio.
OppenheimerFunds, Inc. ("OFI"), a controlled subsidiary of MassMutual,
serves as investment adviser to the Oppenheimer Trust and Panorama Fund,
(prior to January 5, 1996, OFI was known as Oppenheimer Management
Corporation). OFI has entered into investment sub-advisory agreements with
three sub-advisors to assist in the selection of portfolio investments for
the Panorama Fund's three LifeSpan Portfolios. Babson-Stewart Ivory
International ("Babson-Stewart") is the sub-advisor to international stock
components of the LifeSpan Balanced Portfolio and the LifeSpan Capital
Appreciation Portfolio. BEA Associates ("BEA") is the sub-advisor to the
high yield bond component of the LifeSpan Diversified Income Portfolio,
LifeSpan Balanced Portfolio, and LifeSpan Capital Appreciation Portfolio.
Pilgrim, Baxter & Associates ("Pilgrim Baxter") is the sub-advisor to the
small cap component of the LifeSpan Balanced Portfolio and the LifeSpan
Capital Appreciation Portfolio.
In addition to the seventeen divisions of Strategic Variable Life Segment, a
policyowner may also allocate funds to the Guaranteed Principal Account,
which is part of MassMutual's general account. Because of exemptive and
exclusionary provisions, 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.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
consistently by Strategic Variable Life Segment in preparation of the
financial statements in conformity with generally accepted accounting
principles.
A. Investment Valuation
Investments in the MML Trust, the Oppenheimer Trust and the Panorama Fund
are each stated at market value which is the net asset value per share of
each of the respective underlying funds.
B. Accounting for Investments
Investment transactions are accounted for on trade date and identified cost
is the basis followed in determining the cost of investments sold for
financial statement purposes. Dividend income is recorded on the ex-dividend
date.
C. Federal Income Taxes
MassMutual is taxed under federal law as a life insurance company under the
provisions of the 1986 Internal Revenue Code, as amended. Strategic Variable
Life Segment is part of MassMutual's total operation and is not taxed
separately. Strategic Variable Life Segment will not be taxed as a
"regulated investment company" under Subchapter M of the Internal Revenue
Code. Under existing federal law, no taxes are payable on investment income
and realized capital gains of Strategic Variable Life Segment credited to
the policies. Accordingly, MassMutual does not intend to make any charge to
Strategic Variable Life Segment divisions to provide for company income
taxes. MassMutual may, however, make such a charge in the future if an
unanticipated change of current law results in a company tax liability
attributable to Strategic Variable Life Segment.
44
<PAGE>
Notes To Financial Statements (Continued)
D. Policy Loan
When a policy loan is made, Strategic Variable Life Segment transfers the
amount of the loan to MassMutual, thereby decreasing both the investments
and net assets of Strategic Variable Life Segment by an equal amount. The
interest rate charged on any loan is 6% per year or the policyowner may
select an adjustable loan rate at the time of application. All loan
repayments are allocated to the Guaranteed Principal Account.
The policyowner earns interest at a rate which is the greater of 3% or the
policy loan rate less a MassMutual declared charge (maximum .75%) for
expenses and taxes.
E. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
4. CHARGES
MassMutual charges the Strategic Variable Life Segment divisions for the
mortality and expense risks it assumes. The charge is made daily at a
current effective annual rate of 0.30% of the value of each division's net
assets.
MassMutual makes certain deductions from the annual premium before amounts
are allocated to Strategic Variable Life Segment and the Guaranteed
Principal Account. The deductions are for sales charges, state premium taxes
and Deferred Acquisition Cost ("DAC") tax charge of 1.0% of each premium. No
additional deductions are taken when money is transferred from the
Guaranteed Principal Account to the Strategic Variable Life Segment.
MassMutual also makes certain charges for the cost of insurance and
administrative costs.
5. SALES AGREEMENTS
Effective May 1, 1996, MML Distributors, LLC ("MML Distributors"), a
wholly-owned subsidiary of MassMutual, serves as principal underwriter of
the policies pursuant to an underwriting and servicing agreement among MML
Distributors, MassMutual and Separate Account I. MML Distributors is
registered with the Securities and Exchange Commission (the "SEC") as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers, Inc. (the "NASD"). MML
Distributors may enter into selling agreements with other broker-dealers who
are registered with the SEC and are members of the NASD in order to sell the
policies.
Prior to May 1, 1996, MML Investors Services, Inc. ("MMLISI") a wholly-owned
subsidiary of MassMutual, served as principal underwriter of the policies.
Effective May 1, 1996, MMLISI serves as co-underwriter of the policies
pursuant to underwriting and servicing agreements among MMLISI, MassMutual
and Separate Account I, MMLISI is registered with the SEC as a broker-dealer
under the Securities Exchange Act of 1934 and is a member of the NASD.
Registered representatives of MMLISI sell the policies as authorized
variable life insurance agents under applicable state insurance laws.
Pursuant to the underwriting and servicing agreements, commissions or other
fees due to registered representatives for selling and servicing the
policies are paid by MassMutual on behalf of MML Distributors or MMLISI. MML
Distributors and MMLISI also receive compensation for their activities as
underwriters of the policies.
45
<PAGE>
Notes To Financial Statements (Continued)
6. PURCHASES AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
Average
For The Year Ended Cost of Proceeds monthly value
December 31, 1997 Purchases from Sales of securities
----------------- ------------- ------------- -------------
<S> <C> <C> <C>
MML Equity Division $ 2,359,616 $ 111,926 $ 2,368,791
MML Equity Index Division 22,621 7 7,979
MML Money Market Division 12,057,504 11,468,901 1,040,699
MML Managed Bond Division 768,600 46,293 1,163,267
MML Blend Division 898,847 16,514 782,728
Oppenheimer Money Division 77,977 1,023 34,943
Oppenheimer High Income Division 3,166,996 2,466,802 1,383,476
Oppenheimer Bond Division 136,995 2,233 46,465
Oppenheimer Capital Appreciation Division 1,934,641 521,712 1,746,339
Oppenheimer Growth Division 3,392,228 731,932 2,014,442
Oppenheimer Multiple Strategies Division 402,749 9,162 223,899
Oppenheimer Global Securities Division 1,293,071 449,083 810,083
Oppenheimer Strategic Bond Division 68,736 1,501 36,814
Oppenheimer Growth & Income Division 715,209 7,935 267,267
Panorama LifeSpan Diversified Income Division 5,000 6 5,302
Panorama LifeSpan Balanced Division 5,000 7 5,648
Panorama LifeSpan Capital Appreciation Division 5,000 7 5,652
</TABLE>
46
<PAGE>
Notes To Financial Statements (Continued)
7. NET INVESTMENT RETURN
The following table shows the net investment return for each division in
Strategic Variable Life Segment:
<TABLE>
<CAPTION>
MML MML MML Oppenheimer Oppenheimer
MML Equity Money Managed MML Oppenheimer High Oppenheimer Capital
Equity Index Market Bond Blend Money Income Bond Appreciation
Division Division Division Division Division Division Division Division Division
-------- -------- -------- -------- -------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31, 1997 24.12% 5.21% 9.88% 17.93% 4.50% 13.06% 8.89% 9.69%
*For the Period May 1, 1997
(Commencement of Operations)
Through December 31, 1997 14.48%
For the Year Ended
December 31, 1996 23.57% 5.38% 9.13% 17.94% 4.72% 14.08% 4.45% (0.47%)
*For the Period July 5,1995
(Commencement of Operations)
Through December 31, 1995 11.59% 2.48% 6.10% 8.75% 2.50% 7.60% 5.51% 15.67%
</TABLE>
<TABLE>
<CAPTION>
Panorama Panorama
Oppenheimer Oppenheimer Oppenheimer Oppenheimer LifeSpan Panorama LifeSpan
Oppenheimer Multiple Global Strategic Growth & Diversified LifeSpan Capital
Growth Strategies Securities Bond Income Income Balanced Appreciation
Division Division Division Division Division Division Division Division
----------- ----------- ----------- ----------- ----------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31, 1997 19.94% 14.83% 18.14% 8.08% 24.69%
*For the Period May 1, 1997
(Commencement of Operations)
Through December 31, 1997 9.51% 12.46% 14.29%
For the Year Ended
December 31, 1996 13.02% 14.16% 23.29% 11.18% 27.68%
*For the Period July 5, 1995
(Commencement of Operations)
Through December 31, 1995 11.88% 6.35% 0.37% 6.45% 22.36%
</TABLE>
The net investment return for each division of the Strategic Variable Life
Segment is computed using the net increase in net assets resulting from
operations as compared to the average monthly net assets. The net investment
return figures shown above do not reflect expenses related to insurance
products. Inclusion of such expenses would reduce the net investment return
figures for all periods shown.
*Note: The amounts shown for the period July 5, 1995 through December 31, 1995
and May 1, 1997 through December 31, 1997 are not annualized.
47
<PAGE>
Notes To Financial Statements (Continued)
8. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
For the Year Ended December 31, 1997 *MML MML MML Oppenheimer Oppenheimer
and *For the period May 1,1997 MML Equity Money Managed MML Oppenheimer High Oppenheimer Capital
(Commencement of Operations) Equity Index Market Bond Blend Money Income Bond Appreciation
Through December 31, 1997 DivIsion Division Division Division Division Division Division Division Division
- ------------------------- ---------- -------- ----------- ---------- -------- --------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units purchased 622,668 5,000 11,393,760 492,286 233,372 440 165,960 339 567,491
Units withdrawn and transferred
to Guaranteed Principal Account (88,305) -- (4,664,563) (45,589) (16,312) (1,320) (31,447) (1,883) (64,955)
Units transferred between
divisions 921,761 14,462 (6,232,623) 156,298 407,951 68,908 301,516 113,869 396,220
--------- -------- ---------- --------- -------- -------- --------- --------- -----------
Net Increase 1,456,124 19,462 496,574 602,995 625,011 68,028 436,029 112,325 898,756
Units, at beginning of the
period/year 714,055 -- 681,464 481,626 244,493 5,000 1,020,400 5,000 686,585
--------- -------- ---------- --------- -------- -------- --------- --------- -----------
Units at end of the year 2,170,179 19,462 1,178,038 1,084,621 869,504 73,028 1,456,429 117,325 1,585,341
========= ======== ========== ========= ======== ======== ========= ========= ===========
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31,1997 *Panorama *Panorama
and *For the period May 1,1997 Oppenheimer Oppenheimer Oppenheimer Oppenheimer LifeSpan* Panorama LifeSpan
(Commencement of Operations) Oppenheimer Multiple Global Strategic Growth & Diversified LifeSpan Capital
Through December 31, 1997 Growth Strategies Securities Bond Income Income Balanced Appreciation
(continued) Division Division Division Division Division Division Division Division
- ----------- ---------- ----------- ----------- ----------- ---------- ----------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Units purchased 1,033,968 106,878 295,383 11,217 40,265 -- -- --
Units withdrawn and transferred
to Guaranteed Principal Account (442,780) (13,672) (25,115) (1,938) (6,606) -- -- --
Units transferred between divisions 965,813 192,086 372,969 42,249 314,979 5,000 5,000 5,000
---------- ----------- ----------- ----------- ----------- ---------- -------- ------------
Net Increase 1,557,001 285,292 643,237 51,528 348,638 5,000 5,000 5,000
Units, at beginning of the
period/year 543,020 5,000 220,297 5,000 5,000 -- -- --
---------- ----------- ----------- ----------- ----------- ---------- -------- ------------
Units, at end of the year 2,100,021 290,292 863,534 56,528 353,638 5,000 5,000 5,000
========== =========== =========== =========== =========== ========== ======== ============
</TABLE>
<TABLE>
<CAPTION>
MML MML Oppenheimer Oppenheimer
MML Money Managed MML Oppenheimer High Oppenheimer Capital Oppenheimer
For the Year Ended Equity Market Bond Blend Money Income Bond Appreciation Growth
December 31, 1996 Division Division Division Division Division Division Division Division Division
- ----------------- -------- ----------- -------- -------- ----------- ----------- --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Units purchased 4,137 9,528,707 2,292 -- -- 1,229 -- 551,136 432
Units withdrawn and
transferred to Guaranteed
Principal Account (11,556) (4,286,412) (8,896) (2,232) -- (4,950) -- (3,731) (2,334)
Units transferred between
divisions 716,474 (4,565,831) 483,230 241,725 -- 1,019,121 -- 134,180 539,922
-------- ----------- -------- -------- ----------- ----------- --------- ------------ -----------
Net Increase 709,055 676,464 476,626 239,493 -- 1,015,400 -- 681,585 538,020
Units, at beginning of the year 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000
-------- ----------- -------- -------- ----------- ----------- --------- ------------ -----------
Units at end of the year 714,055 681,464 481,626 244,493 5,000 1,020,400 5,000 686,585 543,020
======== =========== ======== ======== =========== =========== ========= ============ ===========
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Oppenheimer
Multiple Global Strategic Growth &
For the Year Ended Strategies Securities Bond Income
December 31, 1996( continued) Division Division Division Division
- ----------------------------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Units purchased - - - -
Units withdrawn and
transferred to Guaranteed
Principal Account - (1,798) - -
Units transferred between
divisions - 217,095 - -
---------- ----------- ----------- -----------
Net Increase - 215,297 - -
Units, at beginning of the year 5,000 5,000 5,000 5,000
---------- ----------- ----------- -----------
Units, at end of the year 5,000 220,297 5,000 5,000
========== =========== =========== ===========
</TABLE>
48
<PAGE>
Notes To Financial Statements (Continued)
9. CONSOLIDATED MASSACHUSETTS MUTUAL VARIABLE LIFE SEPARATE ACCOUNT I
As discussed in Note 1, the financial statements only represent activity of
MassMutual's Strategic Variable Life Segment. The combined net assets as of
December 31, 1996 for Separate Account I, which includes the Variable Life
Plus, the Large Case Variable Life Plus, Strategic Variable Life, Strategic
Group Variable Life and Variable Life Select Segments are as follows:
<TABLE>
<CAPTION>
MML MML MML
MML Equity Money Managed MML Oppenheimer
Equity Index Market Bond Blend Money
Division Division Division Division Division Division
-------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Total assets $ 47,535,472 $ 24,804 $ 4,783,018 $ 19,916,629 $ 13,024,523 $ 83,483
Total liabilities 80,176 9 7,225 17,985 23,892 64
-------------- --------------- -------------- -------------- -------------- --------------
Net assets $ 47,455,296 $ 24,795 $ 4,775,793 $ 19,898,644 $ 13,000,631 $ 83,419
============== =============== ============== ============== ============== ==============
Net assets:
For variable life
insurance policies 47,351,808 17,670 4,724,501 19,838,205 12,915,916 76,766
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 103,488 7,125 51,292 60,439 84,715 6,653
-------------- --------------- -------------- -------------- -------------- --------------
Net assets $ 47,455,296 $ 24,795 $ 4,775,793 $ 19,898,644 $ 13,000,631 $ 83,419
============== =============== ============== ============== ============== ==============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
High Oppenheimer Capital Oppenheimer Multiple
Income Bond Appreciation Growth Strategies
Division Division Division Division Division
-------------- --------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Total assets $ 3,203,079 $ 142,182 $ 9,010,163 $ 5,093,866 $ 417,797
Total liabilities 2,031 91 17,407 24,158 207
-------------- --------------- -------------- -------------- --------------
Net assets $ 3,201,048 $ 142,091 $ 8,992,756 $ 5,069,708 $ 417,590
============== =============== ============== ============== ==============
Net assets:
For variable life
insurance policies 3,185,681 135,056 8,968,173 5,051,141 409,425
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 15,367 7,035 24,583 18,567 8,165
-------------- --------------- -------------- -------------- --------------
Net assets $ 3,201,048 $ 142,091 $ 8,992,756 $ 5,069,708 $ 417,590
============== =============== ============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer Panorama
Global Strategic Growth & Panorama Panorama International
Securities Bond Income Total Return Growth Equity
Division Division Division Division Division Division
-------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Total assets $ 5,356,495 $ 355,712 $ 773,396 $ 1,000 $ 986 $ 958
Total liabilities 10,408 1,323 350 2 2 2
-------------- --------------- -------------- -------------- -------------- --------------
Net assets $ 5,346,087 $ 354,389 $ 773,046 $ 998 $ 984 $ 956
============== =============== ============== ============== ============== ==============
Net assets:
For variable life
insurance policies 5,324,187 340,514 761,112 - - -
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 21,900 13,875 11,934 998 984 956
-------------- --------------- -------------- -------------- -------------- --------------
Net assets $ 5,346,087 $ 354,389 $ 773,046 $ 998 $ 984 $ 956
============== =============== ============== ============== ============== ==============
<CAPTION>
Panorama Panorama
Life Span Panorama Life Span Dreyfus
Diversified Life Span Capital Stock
Income Balanced Appreciation Index
Division Division Division Division
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Total assets $ 6,534 $ 6,684 $ 6,783 $ 34,164,819
Total liabilities 6 6 6 35,667
-------------- --------------- -------------- --------------
Net assets $ 6,528 6,678 6,777 34,129,152
-------------- --------------- -------------- --------------
Net assets:
For variable life insurance
policies - - - 34,121,562
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 6,528 6,678 6,777 7,590
-------------- --------------- -------------- --------------
Net assets $ 6,528 $ 6,678 $ 6,777 $ 34,129,152
============== =============== ============== ==============
</TABLE>
49
<PAGE>
Report Of Independent Accountants
To the Board of Directors and Policyholders of
Massachusetts Mutual Life Insurance Company
We have audited the accompanying statutory statements of financial position of
Massachusetts Mutual Life Insurance Company as of December 31, 1997 and 1996,
and the related statutory statements of income, changes in policyholders'
contingency reserves, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the statutory
financial statements of Connecticut Mutual Life Insurance Company ("Connecticut
Mutual") for the year ended December 31, 1995, which statements reflect total
revenue and net gain from operations constituting 26% and 22% of the related
Company totals after restatement for the merger of the two companies. Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to the amounts included for Connecticut
Mutual, is based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.
As described more fully in Note 1, these financial statements were prepared in
conformity with statutory accounting practices of the National Association of
Insurance Commissioners and the accounting practices prescribed or permitted by
the Division of Insurance of the Commonwealth of Massachusetts and, for the
pre-merger balances of Connecticut Mutual, the Department of Insurance of the
State of Connecticut (collectively "statutory accounting practices"), which
practices differ from generally accepted accounting principles. The effects on
the financial statements of the variances between the statutory basis of
accounting and generally accepted accounting principles, although not reasonably
determinable at this time, are presumed to be material.
In our opinion, because of the effects of the matter discussed in the preceding
paragraph, the financial statements referred to above do not present fairly, in
conformity with generally accepted accounting principles, the financial position
of Massachusetts Mutual Life Insurance Company at December 31, 1997 and 1996, or
the results of its operations or its cash flows for each of the three years in
the period ended December 31, 1997.
In our opinion, based upon our audits and the report of the other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Massachusetts Mutual Life Insurance Company at
December 31, 1997 and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1997, on the
statutory basis of accounting described in Note 1.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 6, 1998
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION
December 31,
1997 1996
---- ----
(In Millions)
Assets:
Bonds............................................. $23,890.3 $24,299.3
Common stocks..................................... 354.7 336.6
Mortgage loans.................................... 4,863.7 4,852.8
Real estate....................................... 1,697.7 1,840.9
Other investments................................. 1,963.8 1,425.6
Policy loans...................................... 4,950.4 4,752.3
Cash and short-term investments................... 1,941.2 1,075.4
--------- ---------
39,661.8 38,582.9
Investment and insurance amounts receivable....... 1,064.9 1,102.4
Other assets...................................... 104.8 97.9
--------- ---------
40,831.5 39,783.2
Separate account assets........................... 16,803.1 13,563.5
--------- ---------
$57,634.6 $53,346.7
========= =========
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF FINANCIAL POSITION, Continued
December 31,
1997 1996
---- ----
(In Millions)
Liabilities:
Policyholders' reserves and funds................. $33,783.2 $33,341.5
Policyholders' dividends.......................... 954.1 885.3
Policyholders' claims and other benefits.......... 353.4 373.8
Federal income taxes.............................. 436.5 440.7
Asset valuation reserve........................... 840.6 689.2
Investment reserves............................... 132.8 208.4
Amounts due on investments puchased and
other liabilities................................ 1,457.9 1,206.1
--------- ---------
37,958.5 37,145.0
Separate account reserves and liabilities......... 16,802.8 13,563.1
--------- ---------
54,761.3 50,708.1
Policyholders' contingency reserves............... 2,873.3 2,638.6
--------- ---------
$57,634.6 $53,346.7
========= =========
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Revenue:
Premium income............................................ $6,764.8 $6,328.6 $5,727.7
Net investment and other income........................... 2,904.4 2,861.1 2,898.4
-------- -------- --------
9,669.2 9,189.7 8,626.1
-------- -------- --------
Benefits and expenses:
Policy benefits and payments.............................. 6,597.3 6,048.2 5,152.2
Addition to policyholder's reserves and funds............. 720.8 854.7 1,205.4
Commissions and operating expenses........................ 766.1 763.5 833.7
State taxes, licenses and fees............................ 81.5 96.4 89.4
Merger restructuring costs................................ - 66.1 44.0
-------- -------- --------
8,165.7 7,828.9 7,324.7
-------- -------- --------
Net gain before federal income taxes and dividends........ 1,503.5 1,360.8 1,301.4
Federal income taxes...................................... 284.4 276.7 206.2
-------- -------- --------
Net gain from operations before dividends................. 1,219.1 1,084.1 1,095.2
Dividends to policyholders................................ 919.5 859.9 819.0
-------- -------- --------
Net gain from operations.................................. 299.6 224.2 276.2
Net realized capital gain (loss).......................... (42.5) 40.3 (85.8)
-------- -------- --------
Net income................................................ $ 257.1 $ 264.5 $ 190.4
======== ======== ========
</TABLE>
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CHANGES
IN POLICYHOLDERS' CONTINGENCY RESERVES
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Policyholder's contingency reserves, beginning of year.... $2,638.6 $2,600.9 $2,569.1
-------- -------- --------
Increases (decreases) due to:
Net income............................................... 257.1 264.5 190.4
Net unrealized capital gain (loss)....................... 119.1 (1.7) 88.7
Merger restructuring costs, net of fax................... - - (45.4)
Change in asset valuation and investment reserves........ (76.0) (142.4) (75.6)
Change in prior year policyholders' reserves............. (55.4) (72.2) (108.2)
Change in non-admitted assets and other.................. (10.1) (10.5) (18.1)
-------- -------- --------
234.7 37.7 31.8
-------- -------- --------
Policyholders' contingency reserves, end of year.......... $2,873.3 $2,638.6 $2,600.9
======== ======== ========
</TABLE>
See notes to statutory financial statements.
<PAGE>
Massachusetts Mutual Life Insurance Company
STATUTORY STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years ended December 31,
1997 1996 1995
---- ---- ----
(In Millions)
<S> <C> <C> <C>
Operating acitivites:
Net income............................................... $ 257.1 $ 264.5 $ 190.4
Addition to policyholders' reserves and funds,
net of transfers to separate accounts................... 421.3 426.7 575.8
Net realized capital (gain) loss......................... 42.5 (40.3) 85.8
Other changes............................................ (58.1) (232.8) (25.2)
--------- --------- ---------
Net cash provided by operating activities................ 662.8 418.1 826.8
--------- --------- ---------
Investing activities:
Purchases of investments and loans....................... (12,292.7) (10,171.5) (10,364.2)
Sales or maturities of investments and receipts
from repayment of loans................................. 12,545.7 8,539.3 9,671.1
--------- --------- ---------
Net cash provided by (used in) investing activities...... 253.0 (1,632.2) (693.1)
--------- --------- ---------
Financing activities:
Repayments of long-term debt............................. (50.0) (53.3) (46.4)
--------- --------- ---------
Net cash used by financing activities.................... (50.0) (53.3) (46.4)
--------- --------- ---------
Increase (decrease) in cash and short-term investments... 865.8 (1,267.4) 87.3
Cash and short-term investments, beginning of year....... 1,075.4 2,342.8 2,255.5
--------- --------- ---------
Cash and short-term investments, end of year............. $ 1,941.2 $ 1,075.4 $ 2,342.8
========= ========= =========
</TABLE>
See Notes to Statutory Financial Statements.
<PAGE>
Notes To Statutory Financial Statements
Massachusetts Mutual Life Insurance Company ("the Company") is a mutual life
insurance company and as such has no shareholders. The Company's primary
business is individual life insurance, annuity and disability income products
distributed primarily through career agents. The Company also provides a wide
range of pension products and services, as well as investment services to
individuals, corporations and institutions in all 50 states and the District of
Columbia.
On March 1, 1996, the operations of the former Connecticut Mutual Life Insurance
Company ("Connecticut Mutual") were merged into the Company. This merger was
accounted for under the pooling of interests method of accounting. For the
purposes of this presentation, these financial statements reflect historical
amounts giving retroactive effect as if the merger had occurred on January 1,
1995 in conformity with the practices of the National Association of Insurance
Commissioners and the accounting practices prescribed or permitted by the
Division of Insurance of the Commonwealth of Massachusetts. In 1996,
merger-related expenses totaling $66.1 million were recorded in the Statutory
Statement of Income. In 1995, merger-related expenses incurred by Massachusetts
Mutual (the Company prior to the merger) of $44.0 million, were recorded in the
Statutory Statement of Income and the expenses incurred by Connecticut Mutual of
$45.4 million, net of tax, were recorded as a component of changes in
policyholders' contingency reserves, as permitted by each company's regulatory
authority. On the merger date, policyholders' reserves attributable to
disability income contracts were strengthened by $75.0 million, investment
reserves for real estate were increased by $49.8 million and net prepaid pension
assets were increased by $10.4 million with all adjustments reflected as a
change to policyholders' contingency reserves. The separate results of each
company prior to the merger for the year ended December 31, 1995, were as
follows: (a) revenue was $6,443.8 million for Massachusetts Mutual and $2,182.3
million for Connecticut Mutual; (b) net income was $160.7 million for
Massachusetts Mutual and $29.6 million for Connecticut Mutual and (c)
policyholders' contingency reserves increased by $143.7 million for
Massachusetts Mutual and decreased by $112.0 million for Connecticut Mutual.
On March 31, 1996, the Company sold MassMutual Holding Company Two, Inc., a
wholly-owned subsidiary, and its subsidiaries, including Mirus Life Insurance
Company (formerly the MML Pension Insurance Company; currently doing business as
"UniCARE"), which comprised the Company's group life and health business, to
WellPoint Health Networks, Inc. The Company received total consideration of
$402.2 million ($340.0 million in cash and $62.2 million in notes receivable)
and recognized a before tax gain of $187.9 million. The Company, pursuant to a
1994 reinsurance agreement, cedes its group life, accident and health business
to UniCARE. The Company's investment in MassMutual Holding Company Two, Inc.
amounted to $187.8 million at December 31, 1995; its gain from operations
included a $41.0 million dividend received from MIRUS in 1995. Additionally,
this investment produced an unrealized gain of $13.9 million in 1995.
1. SUMMARY OF ACCOUNTING PRACTICES
The accompanying statutory financial statements, except as to form, have been
prepared in conformity with the statutory accounting practices of the National
Association of Insurance Commissioners ("NAIC") and the accounting practices
prescribed or permitted by the Division of Insurance of the Commonwealth of
Massachusetts and, for the pre-merger balances of Connecticut Mutual, the
Department of Insurance of the State of Connecticut (collectively "statutory
accounting practices"), which practices were at one time also considered to be
in conformity with generally accepted accounting principles ("GAAP").
The accompanying statutory financial statements are different in some respects
from GAAP financial statements. The more significant differences are as follows:
(a) acquisition costs, such as commissions and other costs directly related to
acquiring new business, are charged to current operations as incurred, whereas
GAAP would require these expenses to be capitalized and recognized over the life
of the policies; (b) policy reserves are based upon statutory mortality and
interest requirements without consideration of withdrawals, whereas GAAP
reserves would be based upon reasonably conservative estimates of mortality,
morbidity, interest and withdrawals; (c) bonds are generally carried at
amortized cost whereas GAAP generally requests they be valued at fair value; (d)
deferred income taxes are not provided for book-tax timing differences as would
be required by GAAP, and (e) payments received for universal and variable life
products, variable annuities and investment related products are reported as
premium revenue, whereas under GAAP, these payments would be recorded as
deposits to policyholders' account balances.
The NAIC is currently engaged in an extensive project ("Codification") to codify
statutory accounting principles with a goal of providing a comprehensive guide
of statutory accounting principles for use by insurers in all states. This
comprehensive guide, which has not been approved by the NAIC or any state
insurance department, includes seventy-two Statements of Statutory Accounting
Principles ("SSAPs") and is expected to be effective no earlier than January 1,
1999. The effect of adopting these SSAPs shall be reported as an adjustment to
surplus on the effective date. Management is currently reviewing the impact of
Codification. However, since the SSAPs have not been finalized, the ultimate
impact cannot be determined at this time.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities, as
well as disclosures of contingent assets and liabilities at the date of the
financial statements. Management must also make estimates and assumptions that
affect the amounts of revenues and expenses during the reporting period. Future
events, including changes in the levels of mortality, morbidity, interest rates
and asset valuations, could cause actual results to differ from the estimates
used in these financial statements.
The following is a description of the Company's principal accounting policies
and practices.
A. Investments
Bonds and stocks are valued in accordance with rules established by the National
Association of Insurance Commissioners. Generally, bonds are valued at amortized
cost, preferred stocks in good standing at cost, and common stocks, except for
unconsolidated subsidiaries, at fair value.
Mortgage loans are valued at unpaid principal less unamortized discount. Real
estate is valued at cost less accumulated depreciation, impairment allowances
and mortgage encumbrances. Encumbrances totaled $14.2 million in 1997 and $27.3
million in 1996. Depreciation on investment real estate is calculated using the
straight-line and constant yield methods.
Policy loans are carried at the outstanding loan balance less amounts unsecured
by the cash surrender value of the policy.
Short-term investments are stated at amortized cost, which approximates fair
value.
Investments in unconsolidated subsidiaries and affiliates, joint ventures and
other forms of partnerships are included in other investments on the Statutory
Statement of Financial Position and are accounted for using the equity method.
In compliance with regulatory requirements, the Company maintains an Asset
Valuation Reserve and an Interest Maintenance Reserve. The Asset Valuation
Reserve and other investment reserves stabilize the policyholders' contingency
reserves against fluctuations in the value of stocks, as well as declines in the
value of bonds, mortgage loans and real estate investments.
The Interest Maintenance Reserve captures after-tax realized capital gains and
losses which result from changes in the overall level of interest rates for all
types of fixed income investments, as well as other financial instruments,
including financial futures, U.S. Treasury purchase commitments, options,
interest rate swaps, interest rate caps and interest rate floors. These interest
rate related gains and losses are amortized into income using the grouped method
over the remaining life of the investment sold or over the remaining life of the
underlying asset. Net realized after tax capital gains of $95.4 million in 1997,
$73.1 million in 1996, and net realized after tax capital losses of $130.7
million in 1995 were charged to the Interest Maintenance Reserve. Amortization
of the Interest Maintenance Reserve into net investment income amounted to $31.0
million in 1997, $26.9 million in 1996, and $5.0 million in 1995.
Realized capital gains and losses, less taxes, not includable in the Interest
Maintenance Reserve, are recognized in net income. Realized capital gains and
losses are determined using the specific identification method. Unrealized
capital gains and losses are included in policyholders' contingency reserves.
B. Separate Accounts
Separate account assets and liabilities represent segregated funds administered
and invested by the Company for the benefit of pension, variable annuity and
variable life insurance contract holders. Assets consist principally of
marketable securities reported at fair value. Premiums, benefits and expenses of
the separate accounts are reported in the Statutory Statement of Income. The
Company receives administrative and investment advisory fees from these
accounts.
C. Non-admitted Assets
Assets designated as "non-admitted" (principally certain fixed assets,
receivables and Interest Maintenance Reserve, when in a net loss deferral
position) are excluded from the Statutory Statement of Financial Position by an
adjustment to policyholders' contingency reserves.
<PAGE>
Notes To Statutory Financial Statements (Continued)
D. Policyholders' Reserves and Funds
Policyholders' reserves for life contracts are developed using accepted
actuarial methods computed principally on the net level premium and the
Commissioners' Reserve Valuation Method bases using the American Experience and
the 1941, 1958 and 1980 Commissioners' Standard Ordinary mortality tables with
assumed interest rates ranging from 2.5 to 6.0 percent.
Reserves for individual annuities, guaranteed investment contracts and deposit
administration and immediate participation guarantee funds are based on accepted
actuarial methods principally at interest rates ranging from 2.25 to 11.25
percent. Reserves for policies and contracts considered investment contracts
have a carrying value of $8,077.9 million and $9,073.8 million at December 31,
1997 and 1996, respectively (fair value of $8,250.0 million and $9,324.6 million
at December 31, 1997 and 1996, respectively as determined by discounted cash
flow projections). Accident and health policy reserves are generally calculated
using the two-year preliminary term, net level premium and fixed net premium
methods and various morbidity tables.
The Company made certain changes in the valuation of policyholders' reserves of
$55.4 million in 1997 and $72.2 million in 1996. The effects of these changes
were recorded as a decrease to policyholders' contingency reserves.
E. Premium and Related Expense Recognition
Life insurance premium revenue is recognized annually on the anniversary date of
the policy. Annuity premium is recognized when received. Accident and health
premiums are recognized as revenue when due. Commissions and other costs related
to issuance of new policies, maintenance and settlement costs are charged to
current operations when incurred.
F. Policyholders' Dividends
The Board of Directors annually approves dividends to be paid in the following
year. These dividends are allocated to reflect the relative contribution of each
group of policies to policyholders' contingency reserves and consider investment
and mortality experience, expenses and federal income tax charges. The liability
for policyholders' dividends is equal to the estimated amount of dividends to be
paid in the following calendar year.
G. Cash and Short-term Investments
For purposes of the Statutory Statement of Cash Flows, the Company considers all
highly liquid investments purchased with a maturity of twelve months or less to
be cash and short-term investments.
2. POLICYHOLDERS' CONTINGENCY RESERVES
Policyholders' contingency reserves represent surplus of the Company as reported
to regulatory authorities and are intended to protect policyholders against
possible adverse experience.
The Company issued surplus notes of $100.0 million at 7 1/2 percent and $250.0
million at 7 5/8 percent in 1994 and 1993, respectively. These notes are
unsecured and subordinate to all present and future indebtedness of the Company,
policy claims and prior claims against the Company as provided by the
Massachusetts General Laws. Issuance was approved by the Commissioner of
Insurance of the Commonwealth of Massachusetts ("the Commissioner").
All payments of interest and principal are subject to the prior approval of the
Commissioner. Sinking fund payments are due as follows: $62.5 million in 2021,
$87.5 million in 2022, $150.0 million in 2023 and $50.0 million in 2024.
Interest on the notes issued in 1994 is scheduled to be paid on March 1 and
September 1 of each year, to holders of record on the preceding February 15 or
August 15, respectively. Interest on the notes issued in 1993 is scheduled to be
paid on May 15 and November 15 of each year, to holders of record on the
preceding May 1 or November 1, respectively. Interest expense is not recorded
until approval for payment is received from the Commissioner. Interest of $26.6
million was approved and paid in 1997, 1996 and 1995.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The proceeds of the notes, less a $28.3 million reserve in 1997, and a $32.2
million reserve in 1996 for contingencies associated with the issuance of the
notes, are recorded as a component of the Company's policyholders' contingency
reserves as approved by the Commissioner. These reserves, as permitted by the
Division of Insurance, are included in investment reserves on the Statutory
Statement of Financial Position.
3. EMPLOYEE BENEFIT PLANS
The Company's employee benefit plans include plans in place for the employees of
Massachusetts Mutual and Connecticut Mutual prior to the merger. Employees
previously covered by the Connecticut Mutual pension plans will continue
coverage under these plans. All other employees, including employees hired after
the merger date, will be covered by the Massachusetts Mutual benefit plans.
A. Pension
The Company has two non-contributory defined benefit plans covering
substantially all of its employees. One plan includes employees previously
employed by Connecticut Mutual; the other includes all other eligible employees.
Benefits are based on the employees' years of service, compensation during the
last five years of employment and estimated social security retirement benefits.
The Company accounts for these plans following Financial Accounting Standards
Board Statement No. 87, "Employers' Accounting for Pensions." Accordingly, as
permitted by the Massachusetts Division of Insurance, the Company has recognized
a pension asset of $157.4 million and $97.2 million at December 31, 1997 and
1996, respectively. On the merger date, the accounting for Connecticut Mutual
pension plans was conformed to the Company's policy of recording pension plan
assets and liabilities, resulting in a $10.4 million increase in policyholders'
contingency reserves. Company policy is to fund pension costs in accordance with
the requirements of the Employee Retirement Income Security Act of 1974 and,
based on such requirements, no funding was required for the years ended December
31, 1997, 1996 and 1995. The assets of the plans are invested in the Company's
general account and separate accounts.
The benefit status of the defined benefit plans as of December 31 is as follows:
1997 1996
---- ----
(In Millions)
Accumulated benefit obligation $ 663.1 $ 611.5
Vested benefit obligation 653.8 606.5
Projected benefit obligation 713.9 665.5
Plan assets at fair value 1,154.2 1,201.7
The following assumptions were used in determining the actuarial present value
of both the accumulated and projected benefit obligations.
MassMutual Connecticut Mutual
Plan Plan
---- ----
Discount rate - 1997 7.25% 7.25%
Discount rate - 1996 7.75 7.75
Increase in future compensation levels 4.00 5.00
Long-term rate of return on assets 10.00 9.00
In 1997, there was a significant reduction in plan participants in the
Connecticut Mutual Plan which resulted in recognition of a pension plan
curtailment gain of $10.7 million.
As a result of the sale of Mirus Life Insurance Company, there was a significant
reduction in plan participants which resulted in recognition of a pension plan
curtailment gain of $15.3 million in 1996.
The Company also has defined contribution plans for employees and agents. The
expense credited to operations for all pension plans is $38.9 million in 1997,
$32.7 million in 1996 and $10.9 million in 1995.
<PAGE>
Notes To Statutory Financial Statements (Continued)
B. Life and Health
Certain life and health insurance benefits are provided to retired employees and
agents through group insurance contracts. Substantially all of the Company's
employees may become eligible for these benefits if they reach retirement age
while working for the Company. The Company adopted the National Association of
Insurance Commissioners' accounting standard for post-retirement life and health
benefit costs, requiring these benefits to be accounted for using the accrual
method for employees and agents eligible to retire and current retirees.
The following assumptions were used in determining the accumulated
postretirement benefit liability.
MassMutual Connecticut Mutual
Plan Plan
---- ----
Discount - 1997 7.25% 7.25%
Discount - 1996 7.75 7.75
Assumed increases in medical cost
rates in the first year 6.25 - 6.75 9.50
declining to 4.75 5.00
within 5 years 5 years
The initial transition obligation of $137.9 million is being amortized over
twenty years through 2012. At December 31, 1997 and 1996, the net unfunded
accumulated benefit obligation was $124.2 million and $124.1 million,
respectively, for employees and agents eligible to retire or currently retired
and $34.7 million and $33.8 million, respectively, for participants not eligible
to retire. A Retired Lives Reserve Trust was funded to pay life insurance
premiums for certain retired employees. Trust assets available for benefits were
$21.7 million and $23.0 million at December 31, 1997 and 1996, respectively.
As a result of the sale of Mirus Life Insurance Company, there was a significant
reduction in plan participants which resulted in recognition of a life and
health plan curtailment loss of $13.9 million in 1996.
The expense for 1997, 1996 and 1995 was $16.5 million, $17.6 million, and $22.9
million, respectively. A one percent increase in the annual assumed increase in
medical cost rates would increase the 1997 accumulated postretirement benefit
liability and benefit expense by $10.9 million and $1.4 million, respectively.
4. RELATED PARTY TRANSACTIONS
Pursuant to two 1994 reinsurance agreements with Mirus Life Insurance Company
(Mirus) whereby the Company assumed all of the single premium immediate annuity
business written by Mirus and ceded all of its group life, accident and health
business to Mirus. A gain from operations of this business was reflected in 1995
as a $41.0 million dividend received from Mirus, which was recorded as net
investment income on the Statutory Statement of Income. As previously discussed,
on March 31, 1996, the Company sold MassMutual Holding Company Two, Inc. a
wholly-owned subsidiary, and its subsidiaries, including Mirus Life Insurance
Company to WellPoint Health Networks, Inc.
The Company has a modified coinsurance quota-share reinsurance agreement with a
wholly-owned subsidiary, C.M. Life Insurance Company, whereby the Company
assumes 75% of the premiums on certain universal life policies issued by C.M.
Life. The Company pays a stipulated expense allowance, death and surrender
benefits, and a modified coinsurance adjustment. Reserves for payment of future
benefits are retained by C.M. Life.
5. FEDERAL INCOME TAXES
Provision for federal income taxes is based upon the Company's best estimate of
its current tax liability. No deferred tax effect is recognized for temporary
differences that may exist between financial reporting and taxable income.
Accordingly, the reporting of equity tax (essentially a reduction in the
deduction for policyholder dividends) and miscellaneous temporary differences,
such as reserves, acquisition costs and restructuring costs, resulted in
effective tax rates which differ from the statutory tax rate.
The Internal Revenue Service has completed examining the Company's income tax
returns through the year 1992 for Massachusetts Mutual and 1991 for Connecticut
Mutual, and is currently examining Massachusetts Mutual for the years 1993 and
1994, and Connecticut Mutual for the years 1992 through 1995. The Company
believes any adjustments resulting from such examinations will not materially
affect its financial statements.
<PAGE>
Notes to Statutory Financial Statements (Continued)
Components of the formula authorized by the Internal Revenue Service for
determining deductible policyholder dividends have not been finalized for 1997
or 1996. The Company records the estimated effects of anticipated revisions in
the Statutory Statement of Income.
The Company plans to file its 1997 federal income tax return on a consolidated
basis with its life and non-life affiliates with the exception of C.M. Life
Insurance Company. The Company and its eligible life and non-life affiliates
are subject to a written tax allocation agreement, which allocates the group's
consolidated tax liability for payment purposes. Generally, the agreement
provides that members with losses shall be compensated for the use of their
losses and credits by other members.
The Company made federal tax payments of $353.4 million in 1997, $330.7 million
in 1996 and $147.3 million in 1995.
6. INVESTMENTS
The Company maintains a diversified investment portfolio. Investment policies
limit concentration in any asset class, geographic region, industry group,
economic characteristic, investment quality or individual investment. In the
normal course of business, the Company enters into commitments to purchase
privately placed bonds and to issue mortgage loans.
A. Bonds
The carrying value and estimated fair value of bonds are as follows:
December 31, 1997
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U.S. Treasury securities $ 6,241.0 $ 470.5 $10.3 $ 6,701.2
and obligations of U.S.
government corporations
and agencies
Debt securities issued by
foreign governments 83.5 4.4 3.0 84.9
Mortgage-backed securities 3,390.8 187.9 9.0 3,569.7
State and local governments 361.9 23.9 .6 385.2
Corporate debt securities 12,148.9 765.2 46.9 12,867.2
Utilities 871.8 100.1 2.2 969.7
Affiliates 792.4 2.8 1.0 794.2
--------- -------- ----- ---------
TOTAL $23,890.3 $1,554.8 $73.0 $25,372.1
========= ======== ===== =========
December 31, 1996
-----------------
Gross Gross Estimated
Carrying Unrealized Unrealized Fair
Value Gains Losses Value
----- ----- ------ -----
(In Millions)
U.S. Treasury securities
and obligations of U.S.
government corporations
and agencies $ 8,042.6 $ 344.0 $ 56.3 $ 8,330.3
Debt securities issued by 95.2 10.2 .5 104.9
foreign governments
Mortgage-backed securities 3,014.0 119.0 43.3 3,089.6
State and local governments 173.2 13.1 2.1 184.2
Corporate debt securities 11,675.2 528.0 133.3 12,069.9
Utilities 975.0 87.0 18.5 1,043.5
Affiliates 324.1 4.3 3.5 324.9
--------- -------- ------ ---------
TOTAL $24,299.3 $1,105.6 $257.5 $25,147.3
========= ======== ====== =========
<PAGE>
Notes To Statutory Financial Statements (Continued)
The carrying value and estimated fair value of bonds at December 31, 1997 by
contractual maturity are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties.
Estimated
Carrying Fair
Value Value
----- -----
(In Millions)
Due in one year or less $ 519.7 $ 523.0
Due after one year through five years 3,972.1 4,104.6
Due after five years through ten years 7,423.3 7,838.1
Due after ten years 5,254.9 5,888.1
--------- ---------
17,170.0 18,353.8
Mortgage-backed securities, including
securities guaranteed by the U.S.
Government 6,720.3 7,018.3
--------- ---------
TOTAL $23,890.3 $25,372.1
========= =========
Proceeds from sales of investments in bonds were $11,427.8 million during 1997,
$6,390.7 million during 1996 and $8,068.8 million during 1995. Gross capital
gains of $200.7 million in 1997, $188.8 million in 1996 and $255.5 million in
1995 and gross capital losses of $68.8 million in 1997, $255.5 million in 1996
and $67.1 million in 1995 were realized on those sales, portions of which were
included in the Interest Maintenance Reserve. The estimated fair value of
non-publicly traded bonds is determined by the Company using a pricing matrix.
B. Stocks
Preferred stocks in good standing had fair values of $145.5 million in 1997 and
$150.8 million in 1996, using a pricing matrix for non-publicly traded stocks
and quoted market prices for publicly traded stocks. Common stocks, except for
unconsolidated subsidiaries, had a cost of $250.3 million in 1997 and $249.2
million in 1996.
C. Mortgages
The fair value of mortgage loans, as determined from a pricing matrix for
performing loans and the estimated underlying real estate value for
non-performing loans, approximated carrying value.
The Company had restructured loans with book values of $202.3 million, and
$383.5 million at December 31, 1997 and 1996, respectively. These loans
typically have been modified to defer a portion of the contracted interest
payments to future periods. Interest deferred to future periods totaled $5.1
million in 1997, $2.2 million in 1996 and $2.5 million in 1995.
D. Other
The carrying value of investments which were non-income producing for the
preceding twelve months was $5.7 million and $23.1 million at December 31, 1997
and 1996, respectively. The Company made voluntary contributions to the Asset
Valuation Reserve of $6.8 million 1996. No additional voluntary contribution to
the Asset Valuation Reserve was made in 1997.
It is not practicable to determine the fair value of policy loans as they do not
have a stated maturity.
7. PORTFOLIO RISK MANAGEMENT
The Company manages its investment risks, primarily to reduce interest rate and
duration imbalances determined in asset/liability analyses. The fair values of
these instruments, described below, which are not recorded in the financial
statements, are based upon market prices or prices obtained from brokers. The
Company does not hold or issue these financial instruments for trading purposes.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The notional amounts described do not represent amounts exchanged by the parties
and, thus, are not a measure of the exposure of the Company. The amounts
exchanged are calculated on the basis of the notional amounts and the other
terms of the instruments, which relate to interest rates, exchange rates,
security prices or financial or other indexes.
The Company enters into financial futures contracts for the purpose of managing
interest rate exposure. Margin requirements are met with the deposit of
securities. Futures contracts are generally settled with offsetting
transactions. Gains and losses on financial futures contracts are recorded when
the contract is closed and amortized through the Interest Maintenance Reserve
over the remaining life of the underlying asset. As of December 31, 1997 and
1996, the Company did not have any open financial futures contracts.
The Company utilizes interest rate swap agreements, options, and purchased caps
and floors to reduce interest rate exposures arising from mismatches between
assets and liabilities and to modify portfolio profiles to manage other risks
identified. Under interest rate swaps, the Company agrees to an exchange, at
specified intervals, between streams of variable rate and fixed rate interest
payments calculated by reference to an agreed-upon notional principal amount.
Net amounts receivable and payable are accrued as adjustments to interest income
and included in investment and insurance amounts receivable on the Statutory
Statement of Financial Position. Gains and losses realized on the termination of
contracts are amortized through the Interest Maintenance Reserve over the
remaining life of the associated contract. At December 31, 1997 and 1996, the
Company had swaps with notional amounts of $3,220.2 million and $2,090.3
million, respectively. The fair values of these instruments were $20.9 million
at December 31, 1997 and $14.8 million at December 31, 1996.
Options grant the purchaser the right to buy or sell a security or enter into a
derivative transaction at a stated price within a stated period. The Company's
option contracts have terms of up to fifteen years. The amounts paid for options
purchased are included in other investments on the Statutory Statement of
Financial Position. Gains and losses on these contracts are recorded at the
expiration or termination date and are amortized through the Interest
Maintenance Reserve over the remaining life of the option contract. At December
31, 1997 and 1996, the Company had option contracts with notional amounts of
$5,388.2 million and $1,928.4 million, respectively. The Company's credit risk
exposure was limited to the unamortized costs of $59.0 million and $18.1
million, which had fair values of $99.6 million and $19.2 million at December
31, 1997 and 1996, respectively.
Interest rate cap agreements grant the purchaser the right to receive the excess
of a referenced interest rate over a given rate calculated by reference to an
agreed upon notional amount. Interest rate floor agreements grant the purchaser
the right to receive the excess of a given rate over a referenced interest rate
calculated by reference to an agreed upon notional amount. Amounts paid for
interest rate caps and floors are amortized into interest income over the life
of the asset on a straight-line basis. Unamortized costs are included in other
investments on the Statutory Statement of Financial Position. Amounts receivable
and payable are accrued as adjustments to interest income and included in the
Statutory Statement of Financial Position as investment and insurance amounts
receivable. Gains and losses on these contracts, including any unamortized cost,
are recognized upon termination and are amortized through the Interest
Maintenance Reserve over the remaining life of the associated cap or floor
agreement. At December 31, 1997 and 1996, the company had agreements with
notional amounts of $3,348.6 million and $3,859.6 million, respectively. The
Company's credit risk exposure on these agreements is limited to the unamortized
costs of $18.2 million and $22.0 million at December 31, 1997 and 1996,
respectively. The fair values of these instruments were $23.4 million and $15.2
million at December 31, 1997 and 1996, respectively.
The Company utilizes asset swap agreements to reduce exposures, such as currency
risk and prepayment risk, built into certain assets acquired. Cross-currency
interest rate swaps allow investment in foreign currencies, increasing access to
additional investment opportunities, while limiting foreign exchange risk. The
net cash flows from asset and currency swaps are recognized as adjustments to
the underlying assets' interest income. Gains and losses realized on the
termination of these contracts adjusts the bases of the underlying asset.
Notional amounts relating to asset and currency swaps totaled $225.6 million and
$364.7 million at December 31, 1997 and 1996, respectively. The fair values of
these instruments were an unrecognized loss of $1.7 million at December 31, 1997
and an unrecognized gain of $7.8 million at December 31, 1996.
<PAGE>
Notes To Statutory Financial Statements (Continued)
Equity swap agreements are utilized to hedge exposure to market risk on public
and private equity positions held in the Company's investment portfolio. Under
equity swaps, the Company agrees to an exchange, at points in time specified in
each contract, between streams of variable or fixed rate interest payments and
the change in an underlying index, equity or basket of equities. The change in
the underlying item is calculated by reference to the level of such item
specified in the agreement. Net amounts receivable and payable are accrued as
adjustments to interest income and included in investment and insurance amounts
receivable on the Statutory Statement of Financial Position. Changes in the
value of these contracts are recorded as realized gains and losses in the
Statutory Statement of Income when contracts are closed. At December 31, 1997
and 1996, the Company had equity swap contracts with notional amounts of $160.0
million and $149.2 million, respectively. The fair values of these instruments
were an unrealized loss of $5.1 million at December 31, 1997 and an unrealized
gain of $11.9 million at December 31, 1996.
The Company enters into forward U.S. Treasury commitments for the purpose of
managing interest rate exposure. The Company generally does not take delivery on
forward commitments. These commitments are instead settled with offsetting
transactions. Gains and losses on forward commitments are recorded when the
commitment is closed and amortized through the Interest Maintenance Reserve over
the remaining life of the asset. At December 31, 1997 and 1996, the Company had
U. S. Treasury purchase commitments which will settle during the following year
with contractual amounts of $1,100.7 million and $1,639.4 million with fair
values of $1,117.6 million and $1,627.4 million, respectively including net
unrealized gains of $16.9 million at December 31, 1997 and net unrealized losses
of $12.0 million at December 31, 1996.
The Company is exposed to credit-related losses in the event of nonperformance
by counterparties to derivative financial instruments. This exposure is limited
to contracts with a positive fair value. The amounts at risk in a net gain
position were $146.7 million and $53.9 million at December 31, 1997 and 1996,
respectively. The Company monitors exposure to ensure counterparties are credit
worthy and concentration of exposure is minimized. Additionally, contingent
collateral positions have been obtained with counterparties when considered
prudent.
8. REINSURANCE
The Company cedes all of its group life and health business to UniCARE and has
other reinsurance agreements with other insurance companies in the normal course
of business. Premiums, benefits to policyholders and provisions for future
benefits are stated net of reinsurance. The Company remains liable to the
insured for the payment of benefits if the reinsurer cannot meet its obligations
under the reinsurance agreements. Premiums ceded were $294.6 million in 1997,
$793.5 million in 1996 and $904.1 million in 1995.
9. LIQUIDITY
The withdrawal characteristics of the policyholders' reserves and funds,
including separate accounts, and the invested assets which support them at
December 31, 1997 are illustrated below:
(In Millions)
Total policyholders' reserves and funds and
separate account liabilities $50,804.2
Not subject to discretionary withdrawal (5,283.7)
Policy loans (4,950.4)
---------
Subject to discretionary withdrawal $40,570.1
=========
Total invested assets, including separate $56,464.7
Policy loans and other invested assets (14,823.3)
---------
Marketable investments $41,641.4
=========
10. BUSINESS RISKS AND CONTINGENCIES
The Company is subject to insurance guaranty fund laws in the states in which it
does business. These laws assess insurance companies amounts to be used to pay
benefits to policyholders and claimants of insolvent insurance companies. Many
states allow these assessments to be credited against future premium taxes. The
Company believes such assessments in excess of amounts accrued will not
materially affect its financial position, results of operations or liquidity. In
1997 and 1996, the Company elected not to admit $21.4 million and $15.3 million,
respectively, of guaranty fund premium tax offset receivables relating to prior
assessments.
<PAGE>
Notes To Statutory Financial Statements (Continued)
The Company is involved in litigation arising in and out of the normal course of
its business. Management intends to defend these actions vigorously. While the
outcome of litigation cannot be foreseen with certainty, it is the opinion of
management, after consultation with legal counsel, that the ultimate resolution
of these matters will not materially affect its financial position, results of
operations or liquidity.
11. RECLASSIFICATIONS
Certain 1996 and 1995 amounts have been reclassified to conform with the current
year presentation.
12. SUBSIDIARIES AND AFFILIATED COMPANIES
A summary of ownership and relationship of the Company and its subsidiaries and
affiliated companies as of December 31, 1997 is illustrated below. The Company
provides management or advisory services to these companies. Subsidiaries are
wholly-owned, except as noted.
Parent
- ------
Massachusetts Mutual Life Insurance Company
Subsidiaries of Massachusetts Mutual Life Insurance Company
- -----------------------------------------------------------
C.M. Assurance Company
C.M. Benefit Insurance Company
C.M. Life Insurance Company
MassMutual Holding Company
MassMutual Holding Company Two, Inc. (Sold in March 1996)
MassMutual of Ireland, Limited
MML Bay State Life Insurance Company
MML Distributors, LLC
Subsidiaries of MassMutual Holding Company
------------------------------------------
GR Phelps, Inc.
MassMutual Holding Trust I
MassMutual Holding Trust II
MassMutual Holding MSC, Inc.
MassMutual International, Inc.
MassMutual Reinsurance Bermuda (Sold in December 1996)
MML Investor Services, Inc.
State House One (Liquidated in December 1996)
Subsidiaries of MassMutual Holding Trust I
------------------------------------------
Antares Leveraged Capital Corporation -- 98.5%
Charter Oak Capital Management, Inc. -- 80.0%
Cornerstone Real Estate Advisors, Inc.
DLB Acquisition Corporation -- 84.8%
Oppenheimer Acquisition Corporation -- 88.55%
Subsidiaries of MassMutual Holding Trust II
-------------------------------------------
CM Advantage, Inc. -- (Liquidated in December 1997)
CM International, Inc.
CM Property Management, Inc. -- (Liquidated in December 1997)
High Yield Management, Inc.
MMHC Investments, Inc.
MML Realty Management
Urban Properties, Inc.
Westheimer 335 Suites, Inc.
<PAGE>
Notes To Statutory Financial Statements (Continued)
Subsidiaries of MassMutual International
----------------------------------------
Compensa de Seguros de Vida S.A. -- 33.5%
MassLife Seguros de Vida (Argentina) S. A.
MassMutual International (Bermuda) Ltd.
Mass Seguros de Vida (Chile) S. A. -- 33.5%
MassMutual International (Luxemburg) S. A.
MassMutual Holding MSC, Incorporated
MassMutual/Carlson CBO N. V. -- 100%
MassMutual Corporate Value Limited -- 46%
9048 -- 5434 Quebec, Inc.
Affiliates of Massachusetts Mutual Life Insurance Company
- ---------------------------------------------------------
MML Series Investment Fund
MassMutual Institutional Funds
Oppenheimer Value Stock Fund
<PAGE>
Appendix A
Illustrations of Death Benefits (Option 1),
Cash Surrender Values and Accumulated
Premiums
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit Option 1 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%. The tables are based on annual premiums of $1,200 for a male, female and
unisex nonsmoker age 35 and an Initial Case Premium Paid of $1,000,000. Separate
tables are shown for the current simplified issue and guaranteed schedule of
charges. 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.
1. The illustration on page 69 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000. The premium payment is $1,200 using a
current simplified issue schedule of charges.
2. The illustration on page 70 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000. The premium payment is $1,200 using a
guaranteed schedule of charges.
3. The illustration on page 71 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200
using a current simplified issue schedule of charges.
4. The illustration on page 72 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200
using a guaranteed schedule of charges.
5. The illustration on page 73 is for a Policy issued to a unisex nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200
using a current simplified issue schedule of charges.
6. The illustration on page 74 is for a Policy issued to a unisex nonsmoker age
35 for a Selected Face Amount of $100,000. The premium payment is $1,200
using a guaranteed schedule of charges.
The death benefits and cash surrender values for a Policy would be different
from the amount shown if the rates of return 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 death benefits and cash surrender values shown in illustrations 1, 3 and 5
reflect the following current charges:
1. Administrative Charge, equal to a monthly $5.25 per Policy charge for
nonqualified policies.
2. Cost of Insurance Charge, based on the current simplified issue rates being
charged by the Company.
3. Mortality and Expense Risk Charge, which is equal to .30% on an annual basis,
of the net asset value of the Fund shares held by the Separate Account.
4. MML Trust, Oppenheimer Trust and Panorama Fund level expenses of .70% on an
annual basis, of the net asset value of the MML Trust, Oppenheimer Trust, and
Panorama Fund shares held by the Separate Account.
The death benefits and cash surrender values shown in illustrations 2, 4 and 6
reflect these guaranteed maximum charges:
1. Administrative Charge, equal to $9.00 per month.
2. Cost of Insurance Charge, based on the 1980 CSO Mortality
Table.
3. Mortality and Expense Risk Charge, which is equal to .60% on an annual basis,
of the net asset value of the Fund shares held by the Separate Account.
4. MML Trust, Oppenheimer Trust and Panorama Fund level expenses of .70% on an
annual basis, of the net asset value of the MML Trust, Oppenheimer Trust, and
Panorama Fund shares held by the Separate Account. (This unweighted average
reflects current Fund level expenses.)
Cash surrender values shown in the tables reflect the deduction of the
applicable sales loads and premium taxes for a Case with an Initial Case Premium
Paid of $1,000,000. Taking into account the Mortality and Expense Risk Charge
and the Fund level expenses, the effect is that for gross annual rates of return
of 0%, 6% and 12%, the actual net annual rate of return on a current basis would
be -0.995%, 4.946%, and 10.886%, respectively, and on a guaranteed basis would
be -1.290%, 4.633%, and 10.556%, respectively.
MassMutual has agreed to bear the expenses of the MML Equity Fund, MML Blend
Fund, MML Managed Bond Fund and MML Money Market 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 these Funds
through April 30, 1999. MassMutual does not expect that it will be required to
reimburse any expenses of the MML Equity Fund, MML Blend Fund, MML Managed Bond
Fund and MML Money Market Fund due to this undertaking in 1998.
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 tables are based on the assumptions that the Policyowner has requested a
level Selected Face Amount, that no Policy loans, or additional premium payments
have been made, and no transaction charges have been incurred, and that the
entire Account Value under the Policy is allocated to the Funds.
The second 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.
68
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Male Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Current Simplified Issue Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ---------------------------------------- -------------------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ----------------------------------------- -------------------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ----------- ------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $100,000 $ 839 $ 893 $ 947
2 2,583 100,000 100,000 100,000 1,668 1,829 1,995
3 3,972 100,000 100,000 100,000 2,486 2,807 3,154
4 5,431 100,000 100,000 100,000 3,293 3,831 4,437
5 6,963 100,000 100,000 100,000 4,088 4,902 5,855
6 8,571 100,000 100,000 100,000 4,991 6,150 7,559
7 10,260 100,000 100,000 100,000 5,876 7,450 9,440
8 12,033 100,000 100,000 100,000 6,741 8,804 11,516
9 13,895 100,000 100,000 100,000 7,587 10,215 13,808
10 15,850 100,000 100,000 100,000 8,414 11,686 16,342
15 27,192 100,000 100,000 100,000 12,207 19,993 33,627
20 41,668 100,000 100,000 146,479 15,308 30,126 62,067
25 60,142 100,000 100,000 220,361 17,492 42,514 108,020
30 (Age 65) 83,720 100,000 103,375 324,900 18,290 57,752 181,508
35 113,812 100,000 120,263 470,729 16,927 76,116 297,930
40 152,219 100,000 139,691 687,324 11,957 97,686 480,646
45 201,237 0 159,835 996,050 0 122,012 760,343
50 263,797 0 181,848 1,443,675 0 147,844 1,173,719
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
69
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Male Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Guaranteed Schedule Of Charges (fund level charges are reflected on a
current basis)
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ------------------------------ ------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ------------------------------ ------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ---------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $100,000 $ 685 733 782
2 2,583 100,000 100,000 100,000 1,354 1,494 1,641
3 3,972 100,000 100,000 100,000 2,005 2,281 2,580
4 5,431 100,000 100,000 100,000 2,637 3,093 3,608
5 6,963 100,000 100,000 100,000 3,249 3,931 4,732
6 8,571 100,000 100,000 100,000 3,960 4,922 6,098
7 10,260 100,000 100,000 100,000 4,647 5,944 7,593
8 12,033 100,000 100,000 100,000 5,309 6,999 9,233
9 13,895 100,000 100,000 100,000 5,945 8,087 11,031
10 15,850 100,000 100,000 100,000 6,556 9,208 13,006
15 27,192 100,000 100,000 100,000 9,144 15,309 26,212
20 41,668 100,000 100,000 112,267 10,729 22,193 47,571
25 60,142 100,000 100,000 164,951 10,665 29,569 80,858
30 (Age 65) 83,720 100,000 100,000 234,756 7,863 36,969 131,149
35 113,812 0 100,000 324,206 0 43,366 205,193
40 152,219 0 100,000 445,048 0 46,797 311,222
45 201,237 0 100,000 599,473 0 41,858 457,613
50 263,797 0 100,000 805,067 0 11,327 654,526
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
70
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Female Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Current Simplified Issue Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ------------------------------ --------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ------------------------------ --------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ---------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 100,000 $ 876 $ 932 $ 987
2 2,583 100,000 100,000 100,000 1,741 1,906 2,079
3 3,972 100,000 100,000 100,000 2,592 2,925 3,285
4 5,431 100,000 100,000 100,000 3,431 3,989 4,617
5 6,963 100,000 100,000 100,000 4,256 5,101 6,090
6 8,571 100,000 100,000 100,000 5,170 6,371 7,832
7 10,260 100,000 100,000 100,000 6,067 7,697 9,757
8 12,033 100,000 100,000 100,000 6,947 9,080 11,884
9 13,895 100,000 100,000 100,000 7,811 10,524 14,237
10 15,850 100,000 100,000 100,000 8,658 12,033 16,839
15 27,192 100,000 100,000 107,764 12,614 20,623 34,651
20 41,668 100,000 100,000 170,855 16,107 31,340 63,990
25 60,142 100,000 102,876 257,123 19,005 44,729 111,793
30 (Age 65) 83,720 100,000 121,939 376,824 21,145 61,276 189,359
35 113,812 100,000 141,820 547,821 22,285 81,506 314,840
40 152,219 100,000 162,221 790,404 21,793 106,026 516,604
45 201,237 100,000 185,558 1,148,909 17,006 134,463 832,543
50 263,797 100,000 208,781 1,652,215 1,091 165,699 1,311,282
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
71
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Female Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Guaranteed Schedule Of Charges (fund level charges are reflected on a
current basis)
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ------------------------------ ------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ------------------------------ -------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ---------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $100,000 $ 723 $ 774 $ 824
2 2,583 100,000 100,000 100,000 1,429 1,575 1,728
3 3,972 100,000 100,000 100,000 2,117 2,405 2,717
4 5,431 100,000 100,000 100,000 2,785 3,262 3,799
5 6,963 100,000 100,000 100,000 3,432 4,146 4,985
6 8,571 100,000 100,000 100,000 4,162 5,169 6,398
7 10,260 100,000 100,000 100,000 4,866 6,223 7,947
8 12,033 100,000 100,000 100,000 5,546 7,312 9,646
9 13,895 100,000 100,000 100,000 6,202 8,437 11,511
10 15,850 100,000 100,000 100,000 6,834 9,600 13,563
15 27,192 100,000 100,000 100,000 9,622 16,042 27,391
20 41,668 100,000 100,000 132,784 11,643 23,602 49,732
25 60,142 100,000 100,000 194,639 12,662 32,443 84,626
30 (Age 65) 83,720 100,000 100,000 275,991 12,300 42,836 138,689
35 113,812 100,000 100,000 383,606 9,153 54,716 220,463
40 152,219 100,000 104,802 523,798 1,039 68,498 342,352
45 201,237 0 114,101 711,630 0 82,682 515,674
50 263,797 0 121,471 951,572 0 96,406 755,216
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
72
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Unisex (85% Male), Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Current Simplified Issue Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ------------------------------- ------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ------------------------------- ------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ---------- -------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $ 100,000 $ 846 $ 900 $ 954
2 2,583 100,000 100,000 100,000 1,681 1,842 2,010
3 3,972 100,000 100,000 100,000 2,505 2,828 3,177
4 5,431 100,000 100,000 100,000 3,317 3,859 4,469
5 6,963 100,000 100,000 100,000 4,118 4,937 5,897
6 8,571 100,000 100,000 100,000 5,022 6,188 7,607
7 10,260 100,000 100,000 100,000 5,909 7,493 9,495
8 12,033 100,000 100,000 100,000 6,777 8,852 11,580
9 13,895 100,000 100,000 100,000 7,625 10,268 13,882
10 15,850 100,000 100,000 100,000 8,455 11,744 16,427
15 27,192 100,000 100,000 100,000 12,272 20,097 33,800
20 41,668 100,000 100,000 150,937 15,432 30,320 62,371
25 60,142 100,000 100,000 226,865 17,724 42,865 108,548
30 (Age 65) 83,720 100,000 106,156 332,121 18,729 58,328 182,484
35 113,812 100,000 123,799 482,675 17,758 76,894 299,798
40 152,219 100,000 143,159 702,005 13,512 98,731 484,141
45 201,237 100,000 164,030 1,019,186 1,643 123,331 766,305
50 263,797 0 185,267 1,467,028 0 149,409 1,183,087
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
73
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
WITH TABLE OF SELECTED FACE AMOUNTS
Unisex (85% Male), Issue Age 35, Nonsmoker
$100,000 Selected Face Amount All Years
$1,200 Annual Premium and $1,000,000 Initial Case Premium Paid
Using Guaranteed Schedule Of Charges (fund level charges are reflected on a
current basis)
<TABLE>
<CAPTION>
Death Benefit (Option 1) Cash Surrender Value
Premiums ------------------------------ -------------------------------
Accumulated Assuming Hypothetical Gross Assuming Hypothetical Gross
End of At 5% Annual Investment Return of Annual Investment Return of
Policy Interest ------------------------------ -------------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
- ------ ---------- -------- -------- -------- -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,000 $100,000 $100,000 $ 693 $ 742 $ 791
2 2,583 100,000 100,000 100,000 1,370 1,511 1,659
3 3,972 100,000 100,000 100,000 2,029 2,307 2,609
4 5,431 100,000 100,000 100,000 2,668 3,128 3,648
5 6,963 100,000 100,000 100,000 3,287 3,975 4,784
6 8,571 100,000 100,000 100,000 4,002 4,973 6,160
7 10,260 100,000 100,000 100,000 4,691 6,001 7,666
8 12,033 100,000 100,000 100,000 5,358 7,064 9,318
9 13,895 100,000 100,000 100,000 5,998 8,159 11,131
10 15,850 100,000 100,000 100,000 6,614 9,289 13,121
15 27,192 100,000 100,000 100,000 9,241 15,459 26,454
20 41,668 100,000 100,000 116,235 10,916 22,483 48,031
25 60,142 100,000 100,000 170,596 11,074 30,161 81,625
30 (Age 65) 83,720 100,000 100,000 241,331 8,788 38,199 132,600
35 113,812 100,000 100,000 334,865 1,912 45,833 207,991
40 152,219 0 100,000 459,146 0 51,875 316,653
45 201,237 0 100,000 621,686 0 53,105 467,433
50 263,797 0 100,000 832,506 0 40,768 671,376
</TABLE>
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 TRUSTS THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE
ACHIEVED FOR ANY ONE YEAR OR SUSTAINED OVER ANY PERIOD OF TIME.
74
<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 By-laws 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
employee benefit plans;
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.
1
<PAGE>
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 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 flexible premium variable whole life insurance
policies described in this Registration Statement, 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.
2
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 6
This Post-Effective Amendment is comprised of the following documents:
The Facing Sheet.
Cross-reference to items required by Form N-8B-2.
The Prospectus consisting of 74 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., independent accountants;
2. Counsel opining as to the legality of securities being registered.
3. Opinion opining as to actuarial matters contained in the
Post-Effective Amendment by John M. Valencia, Assistant Vice
President.
The following Exhibits:
1. The following Exhibits correspond to those required by Paragraph A of
the instructions as to Exhibits in Form N-8B-2:
A. (1) Resolution of Board of Directors of MassMutual establishing the
Separate Account.*
(2) Not applicable.
(3) Form of Distribution Contracts:
(a)(1) Form of Distribution Servicing Agreement between MML
Distributors, LLC, and MassMutual.***
(a)(2) Co-Underwriting Agreement between MML
Investors Services, Inc. and MassMutual.***
(a)(3) Broker-Dealer Selling Agreement.***
(b) Not applicable.
(c) Not applicable.
(4) Not applicable.
(5) Form of Flexible Premium Variable Whole Life Insurance
Policy.****
(6) (a) Certificate of Incorporation of MassMutual.*
(b) By-Laws of MassMutual.*
3
<PAGE>
(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.
(9) Not applicable.
(10) Application for a Flexible Premium Variable Whole
Life Insurance Policy.****
(11) Memorandum describing MassMutual's issuance, transfer, and
redemption procedures for the Policy.****
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 M. Valencia opining as to actuarial
matters pertaining to the securities being registered.****
6. Consent of Coopers & Lybrand L.L.P.****
7. Powers of Attorney.*
*Incorporated by reference to Registration Statement File Number 333-22557,
filed February 28, 1997.
**Incorporated by reference to Post-Effective Amendment Number 1 to
Registration Statement 33-87904 filed with the Commission on April 30, 1996.
***Incorporated by reference to Post-Effective Amendment Number 2 to
Registration Statement 33-87904 filed with the Commission on February 28, 1997.
****Filed herewith
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Massachusetts Mutual Variable Life Separate Account I, certifies that it meets
all of the requirement for effectiveness of this Post-Effective Amendment No. 6
pursuant to Rule 485(b) under the Securities Act of 1933 and has caused this
Post-Effective Amendment No. 6 to Registration Statement No. 33-87904 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 10th day of
April, 1998.
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 On April 10, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment
No. 6 to Registration Statement No. 33-87904 has been signed by the following
persons in the capacities and on the duties indicated.
Signature Title Date
--------- ----- ----
/s/ Thomas B. Wheeler* Chief Executive Officer and March 31, 1998
- ------------------------ Chairman of the Board
Thomas B. Wheeler
/s/ John J. Pajak* President, Chief Operating Officer April 3, 1998
- -------------------- and Director
John J. Pajak
/s/ Joseph M. Zubretsky* Executive Vice President, April 3, 1998
- -------------------------- Chief Financial Officer &
Joseph M. Zubretsky Chief Accounting Officer
/s/ Roger G. Ackerman Director
- ---------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 3, 1998
- ---------------------
James R. Birle
/s/ Gene Chao* Director April 3, 1998
- ----------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 3, 1998
- ---------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director April 3, 1998
- --------------------
Anthony Downs
5
<PAGE>
/s/ James L. Dunlap* Director April 3, 1998
- --------------------
James L. Dunlap
/s/ William B. Ellis* Director April 3, 1998
- ---------------------
William B. Ellis, Ph.D.
/s/ Robert M. Furek* Director April 3, 1998
- --------------------
Robert M. Furek
/s/ Charles K. Gifford* Director April 3, 1998
- -----------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 3, 1998
- ----------------------
William N. Griggs
/s/ George B. Harvey* Director April 3, 1998
- ---------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director April 3, 1998
- ---------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 3, 1998
- ---------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 3, 1998
- -------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 3, 1998
- --------------------
John F. Maypole
/s/ Alfred M. Zeien* Director April 3, 1998
- --------------------
Alfred M. Zeien
/s/ Richard M. Howe On March 31, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney.
*Richard M. Howe
6
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
As counsel to the Registrant, I, James M. Rodolakis, have reviewed this
Post-Effective Amendment No. 6 to Registration Statement No. 33-87904 and I
represent, pursuant to the requirement of paragraph (e) of Rule 485 under the
Securities Act of 1933, that this Amendment does not contain disclosures which
would render it ineligible to become effective pursuant to paragraph (b) of said
Rule 485.
/s/ James M. Rodolakis
-------------------------------------------
James M. Rodolakis
Counsel
Massachusetts Mutual Life Insurance Company
7
<PAGE>
EXHIBIT LIST
99.2 Opinion and Consent of James M. Rodolakis
99.C.1 Consent of Coopers & Lybrand L.L.P.
99.C.6 Opinion and Consent of John M. Valencia
1(A)(11) Memorandum Describing MassMutual's Issuance, Transfer and
Redemption Procedures for the Policy
1(A)(5) Form of a Flexible Premium Variable Whole Life Insurance Policy
1(A)(10) Application for a Flexible Premium Variable Whole Life Insurance
Policy
<PAGE>
EXHIBIT 99.2
Opinion and Consent of James M. Rodolakis
[LETTERHEAD OF MASSMUTUAL]
April 24, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
RE: Post-Effective Amendment No. 6 to Registration Statement No. 33-87904 filed
on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 6 to Registration Statement No. 33-87904 under the Securities Act
of 1933 for Massachusetts Mutual Life Insurance Company's ("MassMutual")
Flexible Premium Variable Whole Life Insurance Policy With Tables of Selected
Face Amounts (the "Policy"). Massachusetts Mutual Variable Life Separate Account
I issues the Policy.
As Counsel for MassMutual, I provide legal advice to MassMutual in connection
with the operation of its variable products. In such role I am familiar with the
Post-Effective Amendment for the Policy. In so acting, I have made such
examination of the law and examined such records and documents as in my judgment
are necessary or appropriate to enable me to render the opinion expressed below.
I am of the following opinion:
1. MassMutual is a valid and subsisting corporation, organized and operated
under the laws of the Commonwealth of Massachusetts and is subject to regulation
by the Massachusetts Commissioner of Insurance.
2. Massachusetts Mutual Variable Life Separate Account I is a separate account
validly established and maintained by MassMutual in accordance with
Massachusetts law.
3. All of the prescribed corporate procedures for the issuance of the Policy
have been followed, and all applicable state laws have been complied with.
I hereby consent to the use of this opinion as an exhibit to this Post-Effective
Amendment.
Very truly yours,
/s/ James M. Rodolakis
- ----------------------
James M. Rodolakis
Counsel
<PAGE>
EXHIBIT 99.C.1
Consent of Coopers & Lybrand L.L.P.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Massachusetts Mutual Life Insurance Company
We consent to the inclusion in this Post-Effective Amendment No. 6 to the
Registration Statement of Massachusetts Mutual Variable Life Separate Account 1
(Strategic Variable Life segment) on Form S-6 (Registration No. 33-87904), of
our report, dated February 3, 1998 on our audits of Massachusetts Mutual
Variable Life Separate Account 1 (Strategic Variable Life segment), and of our
report dated February 6, 1998 on our audits of the statutory financial
statements of Massachusetts Mutual Life Insurance Company, which includes
explanatory paragraphs relating to the use of statutory accounting practices,
which differ from generally accepted accounting principles. We also consent to
the reference to our Firm under the caption "Experts."
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
April 24, 1998
<PAGE>
EXHIBIT 99.C.6
Opinion and Consent of John M. Valencia
[LETTERHEAD OF MASSMUTUAL]
April 24, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Ladies and Gentlemen:
This opinion is furnished in connection with Post-Effective Amendment No. 6 to
Registration Statement No. 33-87904 for Massachusetts Mutual Life Insurance
Company's Flexible Premium Variable Whole Life Insurance Policies with Table of
Selected Face Amounts (the "Policies") under the Securities Act of 1933. The
prospectus included in the post-effective amendment describes the Policies. I am
familiar with the forms of the Policies and the prospectus.
In my opinion, the illustrations of benefits under the Policies included in the
section entitled "Illustrations" in Appendix A of the prospectus, based on the
assumptions stated in the illustrations, are consistent with the provisions of
the respective forms of the Policies. The age selected in the illustrations is
representative of the manner in which the Policies operate.
I hereby consent to the use of this opinion as an exhibit to Post-Effective
Amendment No. 6 to Registration Statement No. 33-87904, and to the reference of
my name under the heading "Experts" in the prospectus.
Sincerely,
/s/ John M. Valencia
- --------------------
John M. Valencia, FSA, MAAA
Assistant Vice President
<PAGE>
Exhibit 1(A)(11)
Massachusetts Mutual Life Insurance Company's
Redemption and Transfer Procedures and Method
of Computing Adjustments on Payments and
Account Value Conversion to Fixed Benefit Policies
--------------------------------------------------
This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Massachusetts Mutual Life
Insurance Company ("MassMutual") in connection with the issuance of the Policy
described in this Registration Statement, the transfer of assets held
thereunder, and the redemption by Policyowners of their interests in the
Policies. This document also describes, as required by Rule 6e-
3(T)(b)(13)(v)(B), the method that MassMutual will use in adjusting the payments
and account values when a Policy is exchanged for a fixed benefit insurance
policy.
1 "Public Offering Price":
Purchase and Related Transactions
- ---------------------------------
Set out below is a summary of the principal Policy provisions and administrative
procedures which might be deemed to constitute, either directly or indirectly, a
"purchase" transaction. The summary shows that, because of the insurance nature
of the Policies, the procedures involved necessarily differ in certain
significant respects from the purchase procedures for mutual funds and
contractual plans.
(a) Premium Schedules and Underwriting Standards
The minimum initial premium for a Policy is an amount sufficient (disregarding
investment performance) to fund 12 times the first monthly deduction under the
policy after deductions for premium loads.
A premium payment schedule may be selected at the time of application and may be
changed at any time. The planned premium may be subject to minimum and maximum
amounts which depend upon the Selected Face Amount of the Policy, the Insured's
age, sex and smoking class and the amount of the initial premium paid.
A Policyowner may make additional premium payments at any time before the death
of the Insured while the Policy is still in force, but such payments cannot be
less than $100.00. The Company has the right to refund premium paid if
application of that premium increases the amount at risk. The amount and
frequency of any additional premium payments will affect the Account Value and
may ultimately affect the amount of the Death Benefit and the period that the
Policy will remain in force.
The Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws. State insurance laws
prohibit unfair discrimination among Insureds but recognize that mortality
charges must be based upon factors such as age, sex, health and smoker status,
and occupation.
(b) Application and Initial Premium Processing
------------------------------------------
Upon receipt of a completed application MassMutual will follow certain insurance
underwriting (i.e., evaluation of risks) procedures designated to determine
whether the applicant is insurable. This process may Involve such verification
procedures as medical examinations and may require that further information be
provided by the proposed Insured before a determination can be made. A Policy
will not be issued until this underwriting procedure has been completed.
1
<PAGE>
The Register Date is the date the Company allocates the first premium less
certain deductions to the Separate Account. This date is the Valuation Date
which is on, or next follows the later of the date on which we receive a
completed Part I of the application for this Policy at our Home Office or the
date we receive the first premium payment for the Policy at our Home Office. On
the Register Date, MassMutual will allocate the initial premium less certain
deductions to the MML Money Market Division until the end of the Free Look
Period. Subject to the allocation rules in the Policy, the Account Value is then
allocated among the Separate Account divisions and the GPA in accordance with
the Policyowner's instructions in the application. Subsequent premium payments
will be similarly allocated upon receipt. Allocation instructions can be changed
for any future premium payments. The allocation must be in whole percentage
points.
Insurance coverage begins when a completed application has been submitted, the
applicant has been judged to be insurable, and the initial premium has been
paid. Otherwise, coverage begins when the Policy has been issued and the Company
has received the first premium. This usually corresponds with the date the
Policy is delivered.
(c) Free Look Provision
-------------------
A Policy may be returned at the election of the Policyowner within 45 days after
the date Part 1 of Application for the Policy was completed, or within 10 days
(or longer if required by state law) after receipt of the issued Policy by the
Policyowner, or within 10 days after MassMutual mails or delivers to the
Policyowner a written notice of right of withdrawal, whichever is latest.
The Company will refund an amount equal to the total of all premiums paid for
the Policy (or the Account Value where approved by state law), reduced by any
amounts borrowed or withdrawn. The Policy will then be deemed void from the
beginning.
(d) Repayment of Indebtedness
-------------------------
A loan made under the Policy will bear interest at the rate of 6% per year or
the Policyowner, where permitted, may select an adjustable loan rate. For
Policies under which an adjustable loan rate is selected, MassMutual will set
the rate 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 Investor 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. 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 Separate Account divisions and the GPA in proportion to
the non-loaned Account Value in each. If the Policy Debt equals or exceeds the
Account Value, we may terminate the Policy. Prior to termination we must notify
the Policyowner in writing of the amount necessary to bring the Policy Debt back
within the limit. If we do not receive payment within 31 days after the date we
mailed the notice, the Policy will terminate without value at the end of those
31 days.
Any Policy Debt may be repaid in full or in part at any time while the Insured
is living and the Policy is in force. Any repayments will result 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 divisions of the Separate Account.
The transfer will be made in proportion to the non-loaned value in each
investment account at the time of repayment. If the loan is not repaid, we will
deduct the amount due from any amount payable from a full surrender or upon the
death of the Insured.
2
<PAGE>
(e) Correction of Misstatement of Age or Sex
----------------------------------------
If MassMutual discovers that the Insured's date of birth or sex as given in the
application 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 and sex. If the
adjustment is made before the Insured dies, then future monthly deductions will
be based on the correct age and sex.
2 "Redemption Procedures":
Surrender and Related Transactions
- ----------------------------------
This section outlines those procedures which might be deemed to constitute
redemptions under the Policy. These procedures differ in certain significant
respects from the redemption procedures for mutual funds and contractual plans.
(a) Account Values
--------------
At any time while the Insured is still living the Policyowner may surrender the
Policy and receive the Cash Surrender Value. This value is equal to the Account
Value less any outstanding Policy Debt. At no time, however, will the Cash
Surrender Value be less than zero.
In addition, subject to certain conditions after the Policy has been in force
for 6 months, Withdrawals may be made on any Monthly Calculation Date by sending
a written request to MassMutual. The minimum amount of any Withdrawal will be
that amount which, before any withdrawal charge is applied, equals $100. The
maximum amount of any Withdrawal is the Cash Surrender Value. The Account Value
remaining after a Withdrawal must be at least equal to the following whichever
is applicable: if the Withdrawal is made before the Policy Anniversary nearest
the Insured's 65th birthday, 12 multiplied by the most recent Account Value
Charges for the Policy; if on or after such date, 60 multiplied by the most
recent Account Value Charges. The amount withdrawn will be 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. Withdrawals may be
made from the GPA or from any division as the Policyowner directs but may not
exceed the non-loaned Account Value of that division or GPA. Withdrawals from
the Separate Account will generally be paid within 7 days of receipt of the
written request./1/
(b) Benefit Claims
--------------
As long as the Policy remains in force, MassMutual will pay a Death Benefit to
the named Beneficiary in accordance with the designated settlement option
generally within 7 days after MassMutual receives due proof of death of the
Insured and verifies the validity of the claim. Payment of Death Benefits may,
however, be postponed under certain circumstances./2/ In particular, during the
first two Policy Years and in other circumstances in which MassMutual may have a
basis for contesting the claim, there can be a delay beyond the 7 day period.
- ---------------------
/1/ Payment from the Separate Account may be postponed whenever: (i) the New
York Stock Exchange is closed other than for customary weekend and holiday
closings, or trading on the New York Stock Exchange is restricted as determined
by the SEC or (ii) an emergency exists, as determined by the SEC, as a result of
which disposal of securities is no reasonably practicable or it is not
reasonably practicable to determine the value of the Separate Account's net
assets. Payment from the portion of the Account Value held in the GPA may be
postponed up to six months. Payments under the Policy of any amount paid to
MassMutual by check may be postponed until such time as the check has cleared
the Policyowner's bank.
/2/ See note 1, supra.
3
<PAGE>
We will investigate all death claims arising within the 2 year contestable
period. Upon receiving the information from a completed investigation, we will
generally make a determination within 5 days as to whether the claim should be
authorized for payment. Payments will be made promptly after authorization. If
payment is delayed 10 working days or more from the effective date of surrender
or Withdrawal, we will add interest at the same rate as is paid under the
Interest Payment Option for the same period of time. The minimum amount of such
interest is $25.
The Death Benefit is 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 1."and "Option 2"). The Death Benefit equals the greater of the
Selected Face Amount (plus the Account Value, under Option 2), or the Minimum
Face Amount in effect on the date of death, less Policy Debt, plus unearned or
minus unpaid monthly deductions. The Minimum Face Amount is equal to Account
Value times the Minimum Face Amount percentage. These percentages depend upon
the Insured's age, sex and smoking classification. The Death Benefit is
increased by that part of any monthly deduction which applies to a period beyond
the date of death. The Death Benefit is reduced by any Policy debt outstanding
on the date of death and, if death occurs during a grace period, any unpaid
monthly charges under the Policy. 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.
(c) Policy Loans
------------
Loans can be made at any time while the Insured is living. The maximum loan is
an amount equal to the Account Value at the time of the loan less any
outstanding Policy Debt before the new loan, interest on the loan being made and
on any outstanding Policy Debt to the next Policy Anniversary Date and an amount
equal to the most recent monthly charge for the Policy multiplied by the number
of Monthly Calculation Dates remaining until the next Policy Anniversary Date.
The Policy must be properly assigned as collateral for the loan.
The Policy Debt is equal to the amount of all loans under the Policy plus
interest which accrues daily. Interest payments are due on each Policy
Anniversary. If not paid when due, interest will be added to the Policy Debt
and, as part of the loan, will bear interest on the same terms. The loan amount
requested will be secured by amounts taken from the Separate Account divisions
and the GPA. in proportion to the non-loaned Account Value in each on the date
of the loan. Shares taken from the divisions will be liquidated and the
resulting dollar amounts will be transferred to the GPA. That portion of the
Account Value held in the GPA to secure a loan will accrue earnings at a rate
which is the greater of 3% and the Policy loan rate less a charge for expenses
and taxes declared by MassMutual. If the Policy Debt exceeds the Account Value,
we may terminate the Policy. Prior to termination we must notify the Policyowner
in writing of the amount necessary to bring the Policy Debt back within the
limit. If we do not receive payment within 31 days after the date we mail the
notice, the Policy will then terminate without value at the end of those 31
days.
The Policy Debt will bear interest at the rate of 6% per year or the
Policyowner, where permitted, may select an adjustable loan rate. For Policies
under which an adjustable loan rate is selected, MassMutual will set the rate
that will apply for the next 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 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.
Any Policy Debt may be repaid in full or in part at any time while the Insured
is living and the Policy is in force. Any repayment will result 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 divisions of the Separate Account. The
transfer will be made in proportion to the non-loaned value in each investment
account at the time of repayment. If the loan is not repaid, we will deduct the
amount due from any amount payable from a full surrender or upon the death of
the Insured.
4
<PAGE>
A Policy loan, whether or not repaid, will have a permanent effect on the
Policyowner's Account Value to the extent that the investment results of the
division(s) or the rate of return on funds in the GPA not securing a loan differ
from the rate credited on funds which secure a loan. The effect could be
favorable or unfavorable. If the division(s) or the GPA earn interest at a rate
greater than the rate credited on funds which secure a loan, a Policyowner's
Account Value will be less than it would have been had no loan been made. If the
division(s) earn interest at a rate less than the rate credited on funds which
secure a loan, the Policyowner's Account Value will be greater than it would
have been had no loan been made.
(d) Policy Termination
------------------
If the Account value less any Policy Debt is not sufficient to pay certain
monthly deductions under the Policy on the Monthly Calculation Date, the
remaining Account Value will be applied and the Policy will terminate after a
grace period of 61 days. The Policy will stay in force during the grace period.
Notice of the amount required to continue the Policy in force will be mailed to
the addressee of record at his last known address and, if required, to any
assignee of record. If a sufficient payment is not received by MassMutual during
the grace period, the Policy will terminate without value on the later of the 61
days or 30 days after the notice is mailed. If a sufficient payment is received
during the grace period, the payment will be allocated among the GPA and the
division(s) in accordance with the Policyowner's then current instructions.
If the Insured dies during a grace period, the Death Benefit proceeds will be
reduced by any due and unpaid monthly deductions to the date of death.
3. Transfers
---------
The Separate Account currently has twelve divisions, each of which invests
exclusively in shares of either MML Trust or Oppenheimer Trust, which are
no-load, open-end, diversified management investment companies registered with
the SEC. There is no limit to the number of transfers in a policy year. There is
no charge for the first 6 transfers in a Policy Year; for each subsequent
transfer in a policy year, we reserve the right to charge an amount which is
guaranteed not to exceed $10.
Policyowners may transfer all funds in the Separate Account to the GPA at any
time. However, transfers from the GPA to the Separate Account may be made only
once each Policy Year. Each such transfer may not exceed 25% of the non-loaned
Account Value in the GPA at the time of the transfer. A transfer of 100% of the
GPA will be allowed if i) in each of the 3 prior policy years a maximum transfer
was made from the GPA, and ii) no premiums have been allocated to the GPA nor
transfers made to the GPA (except as the result of a loan) during the 3 prior
Policy Years. Any transfer will be effective as of the Valuation Date and all
transfers made on one Valuation Date will be considered one transfer.
EXCHANGE PROCEDURE
------------------
The Policyowner may transfer the enter Account Value under the Policy to the GPA
at any time. This transfer converts the Policy into a fixed benefit policy. The
transfer will take effect when we receive a written request.
5
<PAGE>
Exhibit 1(A)(5)
Form of Flexible Premium Variable Whole Life Insurance Policy
Flexible Premium Variable Whole Life
Insurance Policy With Table Of Selected Face Amounts
- --------------------------------------------------------------------------------
Policy Number 0 000 000
Insured JOHN A DOE
Selected Face Amount SEE TABLE OF SELECTED FACE AMOUNTS
- --------------------------------------------------------------------------------
Dear Policy Owner:
READ YOUR POLICY CAREFULLY. It has been written in readable language to help you
understand its terms. We have used examples to explain some of its provisions.
These examples do not reflect the actual amounts or status of this policy. As
you read through the policy, remember the words "we", "us" and "our" refer to
Massachusetts Mutual Life Insurance Company.
We will, subject to the terms of this policy, pay the death benefit to
the Beneficiary when due proof of the Insured's death is received at our Home
Office. The terms of this policy are contained on this and the following pages.
For service or information on this policy, contact the agent who sold the
policy, any of our agency offices or our Home Office.
YOU HAVE A RIGHT TO RETURN THIS POLICY. If you decide not to keep this
policy, return it within 10 days after you receive it, or within 10 days after
you receive the notice of right to withdraw, or within 45 days after the date of
the Part 1 of the application for this policy, whichever is latest. It may be
returned by delivering or mailing it to our Home Office, to any of our agency
offices, or to the agent who sold the policy. Then, the policy will be as though
it had never been issued. We will promptly refund: (a) any premium paid for this
policy; plus (b) interest credited to this policy under the Guaranteed Principal
Account; plus or minus (c) an amount that reflects the investment experience of
the investment divisions of the Separate Account under this policy to the date
the policy is received by us; minus (d) any amounts borrowed or withdrawn.
Signed for Massachusetts Mutual Life Insurance Company.
Sincerely yours,
President Secretary
This Policy provides that: Insurance is payable when the Insured dies.
Within specified limits, flexible premiums may be
paid during the Insured's lifetime. Annual
dividends may be paid.
The amount of death benefit and the duration of insurance coverage may be fixed
or variable as described in Parts 3 and 5.
The variable account value of the policy may increase or decrease in accordance
with the experience of the Separate Account.
There are no minimum guarantees as to the variable account value.
The fixed account value of the policy earns interest at a rate not less than the
minimum described in the Interest On Fixed Account Value provision.
1
<PAGE>
Policy Summary
This Summary briefly describes some of the major policy provisions. Since it
does not go into detail, the actual provisions will control. See those
provisions for full information and any limits that may apply. The "Where To
Find It" on the inside of the back cover shows where these provisions may be
found.
This is a variable whole life insurance policy. We will pay a death benefit if
the Insured dies while the policy is in force. "In force" means that the
insurance has not terminated. "Variable" means that all values which depend on
the investment performance of the Separate Account shown on the Schedule Page
are not guaranteed as to dollar amount.
Premiums for this policy are flexible. After the first premium has been paid,
there is no requirement that any specific amount of premium be paid on any date.
Instead, within the limits stated in this policy, any amount may be paid on any
date before the death of the Insured.
Premiums are applied to increase the value of this policy. Monthly charges are
deducted from the value of this policy each month. If there is not enough value
to pay the monthly charges for a month, the policy will terminate at the end of
61 days. There is, however, a right to reinstate the policy.
There are other rights available while the Insured is living. These include:
. The right to assign this policy.
. The right to change the Owner or any Beneficiary.
. The right to surrender this policy.
. The right to make withdrawals.
. The right to make loans.
. The right to increase the Selected Face Amount.
. The right to allocate net premiums among the Guaranteed Principal
Account and the divisions of the Separate Account.
. The right to transfer values among the Guaranteed Principal Account
and the divisions of the Separate Account.
. The right to change the Death Benefit Option.
The policy also includes a number of Payment Options. These provide alternate
ways to pay the death benefit or the amount payable upon surrender of the
policy.
2
<PAGE>
THE SCHEDULE PAGE
THIS PAGE SHOWS SPECIFIC INFORMATION ABOUT THIS POLICY AND IS REFERRED TO
THROUGHOUT THE POLICY
POLICY NUMBER 0 000 000
INSURED JOHN A DOE
SELECTED FACE AMOUNT SEE TABLE OF SELECTED FACE AMOUNTS
ISSUE DATE DEC 01 1994
POLICY DATE DEC 01 1994
PAID-UP POLICY DATE DEC 01 2059
INSURED'S AGE ON POLICY DATE 35 MALE
- --------------------------------------------------------------------------------
BASIC POLICY INFORMATION
- ------------------------
<TABLE>
<CAPTION>
SELECTED MINIMUM DEATH
PLAN FACE AMOUNT FACE AMOUNT BENEFIT OPTION
---- ----------- ----------- --------------
<S> <C> <C> <C>
FLEXIBLE PREMIUM VARIABLE SEE TABLE OF SEE MINIMUM FACE 1
WHOLE LIFE WITH TABLE OF SELECTED FACE AMOUNT PROVISION
SELECTED FACE AMOUNTS AMOUNTS
</TABLE>
- --------------------------------------------------------------------------------
PREMIUM INFORMATION AS OF DEC 01 1994
- -------------------
FIRST PREMIUM $1,000.00
PLANNED ANNUAL PREMIUM $1,000.00
FOR THE FIRST FIVE POLICY YEARS, NET PREMIUM WILL BE:
! 81.0% MINUS A PERCENTAGE EQUAL TO THE APPLICABLE STATE PREMIUM TAX RATE, OF
THE FIRST $1244.00 OF PREMIUMS PAID IN EACH SUCH POLICY YEAR; AND
! 93.0% MINUS A PERCENTAGE EQUAL TO THE APPLICABLE STATE PREMIUM TAX RATE, OF
PREMIUMS OVER $1244.00 PAID IN EACH SUCH POLICY YEAR.
FOR EACH SUBSEQUENT POLICY YEAR, NET PREMIUM WILL BE 93.0% MINUS A PERCENTAGE
EQUAL TO THE APPLICABLE STATE PREMIUM TAX RATE, OF PREMIUMS PAID IN THAT POLICY
YEAR.
- --------------------------------------------------------------------------------
NET PREMIUM ALLOCATION LIMITATIONS
- ----------------------------------
NET PREMIUM ALLOCATIONS ARE ONLY ALLOWED AMONG EIGHT DIVISIONS AND THE
GUARANTEED PRINCIPAL ACCOUNT AT ONE TIME. TO ALLOCATE NET PREMIUM TO ONE OR MORE
OF THE OTHER DIVISIONS, THERE MUST FIRST BE A TRANSFER OUT OF ONE OR MORE OF THE
DIVISIONS TO WHICH ALLOCATIONS ARE CURRENTLY MADE.
SEPARATE ACCOUNT INFORMATION
- ----------------------------
THE SEPARATE ACCOUNT REFERRED TO IN THIS POLICY IS MASSACHUSETTS MUTUAL VARIABLE
LIFE SEPARATE ACCOUNT I.
THE DIVISIONS OF THE SEPARATE ACCOUNT ARE:
3
<PAGE>
[MML EQUITY DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN SHARES
OF MML EQUITY FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY IN COMMON
STOCKS AND OTHER EQUITY SECURITIES.
MML MONEY MARKET DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN THE
MML MONEY MARKET FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY IN
SHORT-TERM DEBT INSTRUMENTS.
MML MANAGED BOND DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN THE
MML MANAGED BOND FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY IN
FIXED-INCOME SECURITIES.
MML BLEND DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN SHARES OF
MML BLEND FUND, OR ITS SUCCESSOR. THIS FUND INVESTS IN: COMMON STOCKS AND OTHER
EQUITY SECURITIES; MONEY MARKET INSTRUMENTS AND OTHER DEBT SECURITIES WITH
MATURITIES GENERALLY NOT EXCEEDING ONE YEAR; AND BONDS AND OTHER DEBT SECURITIES
WITH MATURITIES GENERALLY EXCEEDING ONE YEAR.
MML EQUITY INDEX DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN
SHARES OF THE MML EQUITY INDEX FUND, OR ITS SUCCESSOR. THIS FUND INVESTS
SUBSTANTIALLY ALL OF ITS ASSETS, TO THE EXTENT PRACTICABLE, IN THE STOCKS THAT
COMPOSE THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX.
OPPENHEIMER MONEY DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN
SHARES OF OPPENHEIMER MONEY FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY
IN "MONEY MARKET" SECURITIES CONSISTENT WITH LOW CAPITAL RISK AND MAINTENANCE OF
LIQUIDITY.
OPPENHEIMER HIGH INCOME DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED
IN SHARES OF OPPENHEIMER HIGH INCOME FUND, OR ITS SUCCESSOR. THIS FUND INVESTS
PRIMARILY IN LOWER-RATED, HIGH YIELD, HIGH RISK INCOME SECURITIES.
OPPENHEIMER BOND DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN
SHARES OF OPPENHEIMER BOND FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY
IN HIGH-YIELD FIXED- INCOME SECURITIES RATED "Baa" OR BETTER BY MOODY'S OR "BBB"
OR BETTER BY STANDARD & POOR'S. SECONDARILY, THIS FUND SEEKS CAPITAL GROWTH
CONSISTENT WITH ITS PRIMARY OBJECTIVE.
OPPENHEIMER CAPITAL APPRECIATION DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF OPPENHEIMER CAPITAL APPRECIATION FUND, OR ITS SUCCESSOR.
THIS FUND INVESTS PRIMARILY IN SECURITIES OF "GROWTH-TYPE" COMPANIES.
OPPENHEIMER GROWTH DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE INVESTED IN
SHARES OF OPPENHEIMER GROWTH FUND, OR ITS SUCCESSOR. THIS FUND INVESTS PRIMARILY
IN SECURITIES OF WELL-KNOWN ESTABLISHED COMPANIES.
OPPENHEIMER MULTIPLE STRATEGIES DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF OPPENHEIMER MULTIPLE STRATEGIES FUND, OR ITS SUCCESSOR.
THIS FUND INVESTS PRIMARILY IN COMMON STOCKS AND OTHER EQUITY SECURITIES, BONDS
AND OTHER DEBT SECURITIES, AND "MONEY MARKET" INSTRUMENTS AND SECURITIES.
OPPENHEIMER GLOBAL SECURITIES DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF OPPENHEIMER GLOBAL SECURITIES FUND, OR ITS SUCCESSOR. THIS
FUND INVESTS PRIMARILY IN SECURITIES OF FOREIGN ISSUERS, "GROWTH-TYPE"
COMPANIES, CYCLICAL INDUSTRIES AND SPECIAL SITUATIONS.
OPPENHEIMER STRATEGIC BOND DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF OPPENHEIMER STRATEGIC BOND FUND, OR ITS SUCCESSOR. THIS
FUND INVESTS PRIMARILY IN (i) FOREIGN GOVERNMENT AND CORPORATE DEBT SECURITIES;
(ii) U.S. GOVERNMENT SECURITIES; AND (iii) LOWER-RATED HIGH-YIELD, HIGH-RISK
DOMESTIC DEBT SECURITIES, COMMONLY KNOWN AS "JUNK BONDS", WHICH ARE SUBJECT TO A
GREATER RISK OF LOSS THAN HIGHER-RATED SECURITIES.
4
<PAGE>
OPPENHEIMER GROWTH AND INCOME DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF OPPENHEIMER GROWTH AND INCOME FUND, OR ITS SUCCESSOR. THIS
FUND INVESTS PRIMARILY IN EQUITY AND DEBT SECURITIES.
PANORAMA LIFESPAN CAPITAL APPRECIATION DIVISION. AMOUNTS CREDITED TO THIS
DIVISION ARE INVESTED IN SHARES OF THE PANORAMA LIFESPAN CAPITAL APPRECIATION
PORTFOLIO, OR ITS SUCCESSOR. THIS PORTFOLIO INVESTS PRIMARILY IN EQUITY
SECURITIES.
PANORAMA LIFESPAN BALANCED DIVISION. AMOUNTS CREDITED TO THIS DIVISION ARE
INVESTED IN SHARES OF THE PANORAMA LIFESPAN BALANCED PORTFOLIO, OR ITS
SUCCESSOR. THIS PORTFOLIO INVESTS IN EQUITY SECURITIES AND FIXED INCOME
SECURITIES WITH A SLIGHTLY STRONGER FOCUS ON EQUITY SECURITIES.
PANORAMA LIFESPAN DIVERSIFIED INCOME DIVISION. AMOUNTS CREDITED TO THIS DIVISION
ARE INVESTED IN SHARES OF THE PANORAMA LIFESPAN DIVERSIFIED INCOME PORTFOLIO, OR
ITS SUCCESSOR. THIS PORTFOLIO INVESTS IN FIXED INCOME SECURITIES.]
- --------------------------------------------------------------------------------
LIMITATIONS ON TRANSFERS
TRANSFERS MAY ONLY BE IN WHOLE-NUMBER PERCENTAGES OR DOLLAR AMOUNTS.
THERE IS NO LIMIT ON THE NUMBER OF TRANSFERS ALLOWED, BUT WE RESERVE THE RIGHT
TO CHARGE A MAXIMUM FEE OF $10 PER TRANSFER IF THERE ARE MORE THAN SIX TRANSFERS
IN A POLICY YEAR. ONLY ONE TRANSFER MAY BE MADE FROM THE GUARANTEED PRINCIPAL
ACCOUNT IN ANY POLICY YEAR AND ANY TRANSFER FROM THE GUARANTEED PRINCIPAL
ACCOUNT CANNOT BE MORE THAN 25% OF THE FIXED ACCOUNT VALUE OF THIS POLICY
(EXCLUDING POLICY LOANS) ON THE DATE THE TRANSFER IS MADE. HOWEVER, IF IN EACH
OF THE PREVIOUS THREE POLICY YEARS 25% OF THE FIXED ACCOUNT VALUE HAS BEEN
TRANSFERRED AND THERE HAVE BEEN NO PREMIUM PAYMENTS OR TRANSFERS TO THE
GUARANTEED PRINCIPAL ACCOUNT (EXCEPT AS THE RESULT OF A LOAN), 100% OF THE FIXED
ACCOUNT VALUE OF THIS POLICY (EXCLUDING POLICY LOANS) MAY BE TRANSFERRED TO THE
SEPARATE ACCOUNT.
ALL VALUES MAY BE TRANSFERRED TO THE GUARANTEED PRINCIPAL ACCOUNT AT ANY TIME,
REGARDLESS OF THE NUMBER OF TRANSFERS PREVIOUSLY MADE.
THESE LIMITATIONS DO NOT APPLY TO TRANSFERS RESULTING FROM A POLICY LOAN.
AT ANY ONE TIME, THE POLICY ACCOUNT VALUE MAY BE ALLOCATED TO NO MORE THAN EIGHT
DIVISIONS OF THE SEPARATE ACCOUNT AND THE GUARANTEED PRINCIPAL ACCOUNT. TO
TRANSFER ACCOUNT VALUE TO A NINTH DIVISION OF THE SEPARATE ACCOUNT, A TRANSFER
OF 100% OF THE ACCOUNT VALUE FROM ONE OR MORE OF THE EIGHT DIVISION(S) TO WHICH
ALLOCATIONS ARE CURRENTLY MADE WILL BE REQUIRED.
- --------------------------------------------------------------------------------
OTHER INFORMATION
MONTHLY UNDERWRITING CHARGE IS $0.00. SEE MONTHLY CHARGES IN PART 3.
AN ADMINISTRATIVE CHARGE IS DEDUCTED FROM THE ACCOUNT VALUE ON EACH MONTHLY
CALCULATION DATE. IT WILL NOT BE MORE THAN $9.00 PER MONTH.
THIS IS A NONSMOKER'S POLICY.
THIS POLICY WAS ISSUED ON A GUARANTEED-ISSUE UNDERWRITING BASIS.
OWNER AND BENEFICIARY - SEE APPLICATION ATTACHED TO THIS POLICY.
- --------------------------------------------------------------------------------
BASIS OF COMPUTATION - FOR MAXIMUM MONTHLY MORTALITY CHARGES, MINIMUM ANNUAL
INTEREST RATE FOR THE GUARANTEED PRINCIPAL ACCOUNT, AND MINIMUM CASH SURRENDER
VALUES.
5
<PAGE>
MORTALITY TABLE -- COMMISSIONER'S 1980 STANDARD ORDINARY NONSMOKER MORTALITY
TABLE - MALE
MINIMUM ANNUAL INTEREST RATE ON THE FIXED ACCOUNT VALUE -- 3% PER YEAR
NET INVESTMENT FACTOR ASSET CHARGE -- NOT MORE THAN .00001639 FOR EACH DAY OF A
VALUATION PERIOD. SEE PART 7.
6
<PAGE>
TABLE OF SELECTED FACE AMOUNTS
POLICY YEAR BEGINNING SELECTED FACE AMOUNT
--------------------- --------------------
DEC 01 1994 $100,000
DEC 01 1995 $100,000
DEC 01 1996 $100,000
DEC 01 1997 $100,000
DEC 01 1998 $100,000
DEC 01 1999 $100,000
DEC 01 2000 $100,000
DEC 01 2001 $100,000
DEC 01 2002 $100,000
DEC 01 2003 $100,000
DEC 01 2004 $110,000
DEC 01 2005 $110,000
DEC 01 2006 $110,000
DEC 01 2007 $110,000
DEC 01 2008 $110,000
DEC 01 2009 $110,000
DEC 01 2010 $110,000
DEC 01 2011 $110,000
DEC 01 2012 $110,000
DEC 01 2013 $110,000
DEC 01 2014 $120,000
AND LATER
7
<PAGE>
TABLE OF MAXIMUM MONTHLY MORTALITY CHARGES
THESE MAXIMUM MONTHLY MORTALITY CHARGES ARE FOR EACH $1,000 OF INSURANCE WHICH
REQUIRES A CHARGE.
POLICY MAXIMUM MONTHLY POLICY MAXIMUM MONTHLY
YEAR BEGINNING MORTALITY CHARGE YEAR BEGINNING MORTALITY CHARGE
- -------------- ---------------- -------------- ----------------
DEC 01 1994 0.14096 DEC 01 2029 2.94130
DEC 01 1995 0.14764 DEC 01 2030 3.31274
DEC 01 1996 0.15683 DEC 01 2031 3.63093
DEC 01 1997 0.16685 DEC 01 2032 4.05839
DEC 01 1998 0.17854 DEC 01 2033 4.54126
DEC 01 1999 0.19107 DEC 01 2034 5.06274
DEC 01 2000 0.20611 DEC 01 2035 5.62182
DEC 01 2001 0.22115 DEC 01 2036 6.21387
DEC 01 2002 0.23870 DEC 01 2037 6.83324
DEC 01 2003 0.25626 DEC 01 2038 7.49616
DEC 01 2004 0.27717 DEC 01 2039 8.22966
DEC 01 2005 0.29975 DEC 01 2040 9.05445
DEC 01 2006 0.32401 DEC 01 2041 9.99708
DEC 01 2007 0.34996 DEC 01 2042 11.07332
DEC 01 2008 0.37927 DEC 01 2043 12.26712
DEC 01 2009 0.41026 DEC 01 2044 13.55591
DEC 01 2010 0.44713 DEC 01 2045 14.91787
DEC 01 2011 0.48989 DEC 01 2046 16.34412
DEC 01 2012 0.53771 DEC 01 2047 17.80841
DEC 01 2013 0.59311 DEC 01 2048 19.33267
DEC 01 2014 0.65444 DEC 01 2049 20.94168
DEC 01 2015 0.72255 DEC 01 2050 22.66794
DEC 01 2016 0.79493 DEC 01 2051 24.57677
DEC 01 2017 0.87327 DEC 01 2052 26.76407
DEC 01 2018 0.96182 DEC 01 2053 29.63735
DEC 01 2019 1.06061 DEC 01 2054 33.93112
DEC 01 2020 1.17052 DEC 01 2055 41.27938
DEC 01 2021 1.29585 DEC 01 2056 56.04155
DEC 01 2022 1.43921 DEC 01 2057 83.33333
DEC 01 2023 1.60155 DEC 01 2058 83.33333
DEC 01 2024 1.78129
DEC 01 2025 1.97513
DEC 01 2026 2.18574
DEC 01 2027 2.41241
DEC 01 2028 2.66044
8
<PAGE>
TABLE OF MINIMUM FACE AMOUNT PERCENTAGES
THE MINIMUM FACE AMOUNT ON ANY DATE IS A PERCENTAGE OF THE ACCOUNT VALUE ON
THAT DATE.
THE PERCENTAGES WHICH APPLY ARE SHOWN BELOW.
POLICY YEAR MINIMUM FACE POLICY YEAR MINIMUM FACE
BEGINNING AMOUNT PERCENTAGE BEGINNING AMOUNT PERCENTAGE
--------- ----------------- --------- -----------------
DEC 01 1994 438% DEC 01 2029 155%
DEC 01 1995 424 DEC 01 2030 152
DEC 01 1996 410 DEC 01 2031 148
DEC 01 1997 396 DEC 01 2032 145
DEC 01 1998 383 DEC 01 2033 143
DEC 01 1999 370 DEC 01 2034 140
DEC 01 2000 358 DEC 01 2035 138
DEC 01 2001 347 DEC 01 2036 135
DEC 01 2002 335 DEC 01 2037 133
DEC 01 2003 324 DEC 01 2038 131
DEC 01 2004 314 DEC 01 2039 129
DEC 01 2005 304 DEC 01 2040 127
DEC 01 2006 294 DEC 01 2041 126
DEC 01 2007 285 DEC 01 2042 124
DEC 01 2008 276 DEC 01 2043 123
DEC 01 2009 268 DEC 01 2044 121
DEC 01 2010 259 DEC 01 2045 120
DEC 01 2011 251 DEC 01 2046 119
DEC 01 2012 244 DEC 01 2047 118
DEC 01 2013 236 DEC 01 2048 117
DEC 01 2014 229 DEC 01 2049 116
DEC 01 2015 223 DEC 01 2050 115
DEC 01 2016 216 DEC 01 2051 114
DEC 01 2017 210 DEC 01 2052 112
DEC 01 2018 204 DEC 01 2053 111
DEC 01 2019 199 DEC 01 2054 110
DEC 01 2020 193 DEC 01 2055 109
DEC 01 2021 188 DEC 01 2056 107
DEC 01 2022 183 DEC 01 2057 106
DEC 01 2023 179 DEC 01 2058 104
DEC 01 2024 174
DEC 01 2025 170
DEC 01 2026 166
DEC 01 2027 162
DEC 01 2028 158
9
<PAGE>
Part l. The Basics Of This Policy
In this Part we discuss some insurance concepts that are necessary to understand
this policy.
The Parties Involved - Owner, Insured, Beneficiary, Irrevocable Beneficiary
The Owner is the person who owns this policy, as shown on our records.
The Insured is the person whose life this policy insures. The Insured may be the
Owner of this policy, or someone else may be the Owner.
Example: Your employer buys a policy that insures your life and names you as
Owner. In this case, you are both the Insured and Owner. If your employer names
itself as Owner, then the Insured and Owner are different people.
A Beneficiary is any person named on our records to receive insurance proceeds
after the Insured dies. 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.
Example: Debbie is named as primary (first) Beneficiary. Anne and Scott are
named as Beneficiaries in the secondary class. If Debbie is alive when the
Insured dies, she receives the death benefit. But if Debbie is dead and Anne and
Scott are alive when the Insured dies, Anne and Scott receive the death benefit.
Any Beneficiary may be named an Irrevocable Beneficiary. An Irrevocable
Beneficiary is one whose consent is needed to change that Beneficiary. Also,
this Beneficiary must consent to the exercise of certain other rights.
Dates - Policy Date, Policy Anniversary Date, Policy Year, Issue Date, Paid-up
Policy Date, Monthly Calculation Date, Valuation Date, Valuation Period,
Valuation Time, Register Date
The Policy Date is shown on the Schedule Page. It is the starting point for
determining Policy Anniversary Dates and Policy Years. The first Policy
Anniversary Date is one year after the Policy Date. The period from the Policy
Date to the first Policy Anniversary Date, or from one Policy Anniversary Date
to the next, is called a Policy Year.
Example: The Policy Date is June 10, 19X1. The first Policy Anniversary Date is
June 10, 19X2. The period from June 10, 19X1 through June 9, 19X2 is a Policy
Year.
The Issue Date is also shown on the Schedule Page. The Issue Date is used to
determine the start of the suicide and contestability periods. We discuss
contestability below. See Part 5 for a discussion of the suicide exclusion. It
is the date from which the policy is in force if the first premium has been
paid.
The Paid-up Policy Date is also shown on the Schedule Page. It is the Policy
Anniversary Date nearest the Insured's 100/th/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 #1. Monthly charges will
continue to be deducted from the account value of this Policy but mortality
charges will equal $0. Premium payments will no longer be accepted. The payment
of planned annual premiums does not guarantee that this policy will continue in
force to the Paid-up Policy Date.
The Monthly Calculation Date is the monthly date on which monthly charges for
this policy are due. The first Monthly Calculation Date is the Policy Date.
Subsequent Monthly Calculation Dates are the same day of each month thereafter.
A Valuation Date is any date on which the New York Stock Exchange (or its
successor) is open for trading. A Valuation Period is the period of time from
the end of one Valuation Date to the end of the next Valuation Date. A Valuation
Time is the time the New York Stock Exchange (or its successor) closes on a
Valuation Date. All actions which are to be performed on a Valuation Date will
be performed as of the Valuation Time.
The Register Date is the date on which the first net premium payment for this
policy is allocated to the Separate Account or the Guaranteed Principal Account.
It is the Valuation Date which is on, or next follows, the later of:
10
<PAGE>
. The date on which we receive a completed
Part 1 of the application for this policy at our
Home Office; and
. The date on which we receive the first
premium for this policy at our Home Office.
Policy A Legal Contract This policy is a legal contract between the Owner
and us. The entire contract consists of the
application and the policy, which includes any
riders the policy has. We have issued this policy
in return for the application and the payment of
the first premium. Any changes or waiver of its
terms must be in writing and signed by our
Secretary or an Assistant Secretary to be
effective.
Representations And We rely on all statements made by or for the
Contestability Insured in the application(s). Legally, those
statements are considered to be representations
and not warranties. We can bring legal action to
contest the validity of this policy, or any
increase in the Selected Face Amount applied for
after the Issue Date, for any material
misrepresentation of a fact. To do so, however,
the misrepresentation must have been made in the
application, or in a supplemental application to
increase the Selected Face Amount, and a copy of
the application must have been attached to this
policy when issued, or made a part of the policy
when the increase in the Selected Face Amount
became effective.
Except for any increase in the Selected Face
Amount applied for after the Issue Date, we can
not contest the validity of this policy after it
has been in force during the lifetime of the
Insured for a period of two years from its Issue
Date. We can not contest the validity of any
increase in the Selected Face Amount applied for
after the Issue Date once it has been in effect
during the lifetime of the Insured for a period of
two years.
Misstatement Of Age Or If the Insured's date of birth or sex as given in
Sex the application 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 and sex. If
the adjustment is made before the Insured dies,
then future monthly deductions will be based on
the correct age and sex.
Meaning Of In Force "In force" means that the insurance provided by
this policy has not terminated. This policy will
be in force from its Issue Date or, if later, the
date the first premium is paid.
This policy will continue in force to the
Insured's death if:
. The account value less any policy debt is
sufficient to cover the monthly charges due on
each Monthly Calculation Date; and
. Policy debt does not exceed the account
value; and
. This policy is not surrendered.
The factors which can affect this policy's account
value include:
. The amount and timing of premium payments.
. Any withdrawals or transfers of values.
. Any changes in any riders.
. Any changes in the Selected Face Amount.
. Any outstanding policy debt.
. Any changes in the Death Benefit Option.
. The monthly charges deducted from the
account value.
. The interest earned on the fixed account
value.
. The net investment experience of the
Separate Account for this policy.
. Any dividends allocated to this policy.
Each of these factors is discussed in detail
elsewhere in this policy.
Home Office Our Home Office is in Springfield, Massachusetts.
The address is Massachusetts Mutual Life Insurance
Company, Springfield, Massachusetts 01111.
11
<PAGE>
Part 2. Premium Payments
Premiums are the payments that may be paid to us
to increase the account value of this policy.
The First Premium The first premium for this policy is shown on the
Schedule Page. This premium is due on the Policy
Date. This policy will not be in force until the
first premium has been paid.
Planned Annual The planned annual premium for this policy is
Premiums shown on the Schedule Page. The payment of planned
annual premiums does not guarantee that this
policy will continue in force.
Premium Flexibility After the first premium has been paid, there is no
And Premium requirement that any amount of premium be paid on
Notices any date. Subject to the Right To Refund Premiums
provision in this Part, while the policy is in
force any amount of premium may be paid at any
time before the death of the Insured. However,
each premium paid must be at least $100 or, if
greater, the amount needed to prevent termination,
as discussed in the Grace Period And Termination
provision in Part 3.
We will send premium notices for the planned
annual premium. We will stop sending these notices
if no premium has been paid for 36 consecutive
months. However, if a premium is paid after that
time, we will send notices for the planned annual
premium again.
We will also send notice of any premium needed to
prevent termination of this policy. Premium
notices will be sent only while this policy is in
force.
Where To Pay Premiums All premiums are payable to us at our Home Office
or at the place shown for payment on the premium
notice. Upon request, a receipt signed by our
Secretary or an Assistant Secretary will be given
for any premium payment.
Right To Refund We have the right to promptly refund any amount of
Premiums premium paid if application of that premium to the
account value would increase the amount of
insurance which requires a charge.
Part 3. Accounts, Values, And Charges
This policy provides that certain values (referred
to as the variable account values) are based on
the investment performance of the Separate Account
and are not guaranteed as to dollar amount. This
policy also provides that other values (referred
to as the fixed account values) are based on the
interest credited to the Guaranteed Principal
Account. The account value of this policy is the
variable account value plus the fixed account
value. This Part gives information about the
Separate Account, the Guaranteed Principal
Account, and the values and charges connected with
them.
Net Premium A net premium is a premium we receive for this
policy less the charges we deduct at that time.
Net premium, expressed as a percentage of a
premium we receive, is shown on the Schedule Page.
Allocation Of Net The allocation of each net premium we receive will
Premiums be in whole percentages and will be subject to any
net premium allocation limitations stated on the
Schedule Page.
Each net premium we receive before the Right To
Return period expires, or, if later, the date we
receive written notice that the Owner received
this policy, will be allocated to the MML Money
Market Division of the Separate Account. The Right
To Return period is explained on the front cover
of this policy.
Upon the later of the date we receive written
notice that the Owner has received this policy and
the expiration of the Right To Return period, we
will allocate this policy's value among the
Guaranteed Principal Account and the divisions of
the Separate Account. This allocation will be in
accordance with the net premium allocation in
effect and subject to the allocation limitations
stated on the Schedule Page.
Each net premium we receive after the Right To
Return period expires, or, if later, the date we
12
<PAGE>
receive written notice that the Owner received
this policy, will be allocated among the
Guaranteed Principal Account and the divisions of
the Separate Account. This allocation will be in
accordance with the net premium allocation in
effect and subject to the allocation limitations
stated on the Schedule Page.
The net premium allocation specified in the
application will remain in effect until changed by
any later written election satisfactory to us and
received at our Home Office. Any change in the
allocation specified in the application will be
subject to the allocation limitations stated on
the Schedule Page.
We will allocate the first net premium payment as
of the Register Date. The amount of each net
premium we receive for this policy for allocation
to each division of the Separate Account will be
applied to purchase accumulation units for this
policy in that division.
The Separate Account The Separate Account shown on the Schedule Page is
a separate investment account which we have
established under Massachusetts law and is subject
to the laws of the jurisdiction in which this
policy was delivered.
The Separate Account has several divisions. Each
division invests in shares of an investment fund.
The divisions and investment funds are shown on
the Schedule Page.
The values of the assets in the divisions are
variable and are not guaranteed. They depend on
the investment results of the Separate Account
shown on the Schedule Page.
We own the assets of the Separate Account. Those
assets will only be used to support variable life
insurance policies. A portion of the assets equal
to the reserves and other liabilities of the
Separate Account will not be charged with
liabilities that arise from any other business we
may conduct. However, we may transfer assets which
exceed the reserves and other liabilities of the
Separate Account to our general account. Income,
gains, and losses, whether or not realized, from
each division of the Separate Account are credited
to or charged against that division without regard
to any of our other income, gains, or losses.
Changes In The Separate We have the right to establish additional
Account divisions of the Separate Account from time to
time. Amounts credited to any additional
divisions established would be invested in shares
of other Funds. For any division, we have the
right to substitute new Funds.
Subject to applicable provisions of federal
securities laws, we have the right to change the
investment policy of any division of the Separate
Account with the approval of the Massachusetts
Insurance Commissioner. If required, the process
for obtaining approval of a material change from
the Massachusetts Insurance Commissioner will be
filed with the insurance supervisory official of
the state where this policy is delivered. Further,
if required, we will notify the Owner if the
Massachusetts Insurance Commissioner approves any
material change.
We have the right to operate the Separate Account
as a unit investment trust under the Investment
Company Act of 1940 or in any other form permitted
by law.
Accumulation Units Accumulation units are used to measure the
variable account value of this policy. The value
of a unit is determined as of the Valuation Time
on each Valuation Date for valuation of the
Separate Account. The value of any unit can vary
from Valuation Date to Valuation Date. That value
reflects the investment performance of the
division of the Separate Account applicable to
that unit.
Purchase And Sale Of Accumulation units will be purchased or sold at
Accumulation Units the unit value as of the Valuation Time on the
Valuation Date of purchase or sale. Accumulation
unit value is discussed in Part 7.
Example: The amount applied is $550. The date of
purchase is June 10, 19X4. The accumulation unit
value on that date is $10. The number of units
purchased would be 55 ($550 divided by $10 = 55).
If, instead, the unit value was $11, then the
amount applied would purchase 50 units ($550
divided by $11 = 50).
If we receive a premium or a written request that
causes us to purchase or sell accumulation units,
13
<PAGE>
and we receive that premium or request before the
Valuation Time on a Valuation Date, accumulation
units will be purchased or sold as of that Valuation
Date. Otherwise, accumulation units will be
purchased or sold as of the next following Valuation
Date.
At the Owner's request, we will purchase or sell
accumulation units as of a later Valuation Date.
In no case will accumulation units be purchased
before the Register Date.
Account Value Of Policy The account value of this policy on any date is the
variable account value of this policy plus the fixed
account value of this policy, both determined as of
that date.
Variable Account Value The variable account value of this policy reflects:
Of Policy
. The net premiums allocated to the Separate
Account for this policy;
. Any amounts transferred to the Separate
Account for this policy from the Guaranteed
Principal Account;
. Any amounts transferred and withdrawn from
the Separate Account for this policy;
. Any monthly charges deducted from the
Separate Account for this policy; and
. The net investment experience of the Separate
Account for this policy.
Net premiums, transfers, withdrawals, and monthly
deductions are all reflected in the variable account
value through the purchase or sale of accumulation
units. The net investment experience is reflected in
the value of the accumulation units. Net premiums
and monthly deductions are discussed in this Part.
Transfers and withdrawals are discussed in Part 4.
The value of this policy's accumulation units in a
division of the Separate Account is equal to the
accumulation unit value in that division on the date
the value is determined, multiplied by the number of
those units in that division. How accumulation unit
values are determined is discussed in Part 7.
The variable account value of this policy on any
date is the total of the values of this policy's
accumulation units in each division of the Separate
Account.
Fixed Account Value Of The fixed account value of this policy is the
Policy accumulation at interest of:
. The net premiums allocated to the Guaranteed
Principal Account for this policy; plus
. Any amounts transferred into the Guaranteed
Principal Account for this policy from the Separate
Account; less
. Any amounts transferred and withdrawn from the
Guaranteed Principal Account for this policy; and
less
. Any monthly charges deducted from the
Guaranteed Principal Account for this policy.
The Guaranteed Principal The Guaranteed Principal Account is part of our
Account general investment account. It has no connection
with, and does not depend on, the investment
performance of the Separate Account.
We have the right to establish additional guaranteed
principal accounts from time to time.
Interest On Fixed The fixed account value of this policy earns
Account Value interest at a rate not less than the minimum annual
interest rate for the Guaranteed Principal Account
shown in the Basis Of Computation section on the
Schedule Page. Interest is credited daily to and
including the date the fixed account value is
determined.
For any fixed account value equal to any policy
loan, the interest rate we use will be the daily
equivalent of the greater of:
. The minimum annual rate; and
. The annual loan interest rate in effect on the
preceding Monthly Calculation Date less not more
than 0.75%.
For any fixed account value in excess of an amount
equal to any policy loan, the interest rate we use
will be the daily equivalent of the greater of:
14
<PAGE>
. The minimum annual rate; and
. An alternate annual rate established by us.
Monthly Charges Charges will be deducted from the account value of
this policy. The charges are due on each Monthly
Calculation Date.
The charges will be taken from the divisions of the
Separate Account and from the Guaranteed Principal
Account in proportion to the values of this policy
in each of those divisions and in the Guaranteed
Principal Account (excluding outstanding policy
loans). For each Monthly Calculation Date,
deductions will be made, and values will be
determined, on the Valuation Date which is on, or
next follows, the latest of:
. The Register Date;
. The Monthly Calculation Date; or
. The date we receive the amount of premium
needed to prevent termination in accordance with the
Grace Period And Termination provision in this Part.
Deductions from the Separate Account are made by
selling accumulation units at their value on the
Valuation Date determined above.
We assess monthly charges of four types:
1. Administrative Charge. The amount of this charge
will be determined by us. In no case, however, will
it be greater than the maximum charge shown in the
Other Information section of the Schedule Page.
2. Underwriting Charge. The amount of this charge is
shown in the Other Information section of the
Schedule Page.
3. Mortality Charge. The maximum monthly mortality
charges for each $1,000 of insurance which requires
a charge are shown in the Table Of Maximum Monthly
Mortality Charges.
We may charge less than the maximum charges shown
in the Table. Any change in these charges will apply
to all policies in the same class as this policy.
The amount of insurance which requires a charge is
determined as follows. This computation is made as
of the date the charge is due. All amounts are
computed as of that date.
a. We compute the account value after all
additions and deductions other than the deduction of
the mortality charge.
b. We determine the amount of benefit under the
Death Benefit Option in effect (as discussed in the
Death Benefit Options provision in Part 5). The
Minimum Face Amount used here is based on the
account value computed in (a) above.
c. We divide the amount of benefit determined in
(b) above by 1 plus the monthly equivalent
(expressed as a decimal fraction) of the minimum
annual interest rate for the Guaranteed Principal
Account shown in the Basis Of Computation section on
the Schedule Page.
d. We subtract the account value computed in (a)
above from the amount determined in (c) above. The
result is the amount of insurance which requires a
charge.
4. Rider Charge. The monthly charges for any rider
are shown in a table of charges for that rider.
Grace Period And If the account value less any policy debt is not
Termination enough to cover the monthly charges due on a Monthly
Calculation Date, we allow a grace period for
payment of the amount of premium (not less than
$100) needed to increase the account value so that
the monthly deduction can be made. This grace period
begins on the date the deduction is due. It ends 61
days after that date or, if later, 30 days after we
have mailed a written notice to the Owner at the
last known address shown on our records. This notice
will state the amount required to increase the
account value to cover
15
<PAGE>
the charges.
During the grace period, this policy will continue
in force. It will terminate without value if we do
not receive payment of the required amount by the
end of the grace period.
Part 4. Life Benefits
A life insurance policy provides a death benefit
if the Insured dies while the policy is in force.
There are also rights and benefits that are
available before the Insured dies. These "Life
Benefits" are discussed in this Part.
Policy Ownership
Rights Of Owner While the Insured is living, the Owner may
exercise all rights given by this policy or
allowed by us. These rights include assigning this
policy, changing Beneficiaries, changing
Ownership, enjoying all policy benefits and
exercising all policy options.
The consent of any Irrevocable Beneficiary is
needed to exercise any policy right except:
. The right to exercise dividend rights; and
. The right to reinstate this policy after
termination.
Assigning This Policy This policy may be assigned. But for any
assignment to be binding on us, we must receive a
signed copy of it at our Home Office. We will not
be responsible for the validity of any assignment.
Once we receive a signed copy, the rights of the
Owner and the interest of any Beneficiary or any
other person will be subject to the assignment. An
assignment is subject to any policy debt. See
"Borrowing On This Policy" in this Part for a
discussion of policy debt.
Changing The Owner Or The Owner or any Beneficiary may be changed during
Beneficiary the Insured's lifetime. We do not limit the number
of changes that may be made. To make a change, a
written request satisfactory to us must be
received at our Home Office. The change will take
effect as of the date the request is signed, even
if the Insured dies before we receive it. Each
change will be subject to any payment we made or
other action we took before receiving the request.
Transfers Of Values Transfers of values are subject to the limitations
stated on the Schedule Page. Subject to those
limitations, transfers may be made upon written
direction satisfactory to us received at our Home
Office. These transfers are:
. Transfers of values between divisions of
the Separate Account. These transfers will be made
by selling all or part of the accumulation units
in a division and applying the value of the units
sold to purchase units in any other division.
. Transfers of values from one or more
divisions of the Separate Account to the
Guaranteed Principal Account. These transfers will
be made by selling all or part of the accumulation
units in a division and applying the value of the
units sold to the Guaranteed Principal Account.
. Transfers of values from the Guaranteed
Principal Account to one or more divisions of the
Separate Account. These transfers will be made by
applying all or part of the value in the
Guaranteed Principal Account to purchase
accumulation units in one or more divisions of the
Separate Account.
Transfers will be as of the Valuation Date
specified in the Purchase And Sale Of Accumulation
Units provision in Part 3. All transfers made on
one Valuation Date will be considered one
transfer.
This Policy's Share In Dividends
Policy Is Participating This policy is participating, which means it may
share in any dividends we pay.
Each year we determine how much money can be paid
as dividends. This is called divisible
16
<PAGE>
surplus. We then determine how much of this divisible
surplus is to be allocated to this policy. This
determination is based on this policy's contribution
to divisible surplus. Since we do not expect this
policy to contribute to divisible surplus, we do not
expect that any of that surplus will be available for
allocation to this policy. If any dividends are
allocated to this policy, they will be payable on
Policy Anniversary Dates.
How Dividends May be Dividends may be used in a number of ways. These are
Used called dividend options. A dividend option may be
elected in the application. It may be changed at a
later time. Although we do not expect that any
dividends will be payable on this policy, there are
four basic dividend options.
Cash - Dividends will be paid in cash.
Dividend Accumulations - Dividends will be added
to the account value. Dividends will be allocated
among the Guaranteed Principal Account and the
divisions of the Separate Account as directed for net
premiums.
Paid-Up Additions - Dividends will be used to buy
additional level paid-up insurance.
Reduce Monthly Deductions - Dividends will be
used to reduce the monthly deductions we make from
the account value to pay the monthly charges.
Dividends will be applied as paid-up additions if no
option is elected.
Dividend After Death If the Insured dies after the first Policy Year, the
death benefit will include a pro rata share of any
dividend allocated to the policy for the Year death
occurs.
Surrendering This Policy And Making Withdrawals
Right To Surrender This policy may be surrendered for its cash surrender
value at any time while the Insured is living.
Surrender will be effective on the date we receive
this policy and a written surrender request
satisfactory to us at our Home Office. A later
effective date may be elected in the surrender
request.
Cash Surrender Value The cash surrender value is equal to the account
value less any policy debt.
Making Withdrawals While the Insured is living, withdrawals may be made
on any Monthly Calculation Date after six months from
the Policy Date. The request for a withdrawal must be
written and satisfactory to us. It must state the
Account (or Accounts) from which the withdrawal will
be made. For any withdrawal from the Separate
Account, the request must also state the division (or
divisions) from which the withdrawal will be made.
The amount of a withdrawal includes the withdrawal
charge that applies. Withdrawals from the Guaranteed
Principal Account will be made by reducing the value
in that Account to provide the amount of the
withdrawal. Withdrawals from a division (or
divisions) of the Separate Account will be made by
selling a sufficient number of accumulation units to
provide the amount of the withdrawal. Each withdrawal
will be subject to the following rules:
. The minimum amount of a withdrawal is $100.
. A withdrawal charge of 2% of the amount of
the withdrawal, but not more than $25, will be
deducted from the amount of the withdrawal.
. The amount of a withdrawal can never exceed
the cash surrender value of this policy, less an
amount equal to:
. For a withdrawal made prior to the Policy
Anniversary Date nearest the Insured's 65th birthday,
12 multiplied by the most recent monthly charge made
for this policy; and
. For a withdrawal made on or after the
Policy Anniversary Date nearest the Insured's 65th
birthday, 60 multiplied by the most recent monthly
charge made for this policy.
Unless we receive evidence of insurability
satisfactory to us, the Selected Face Amount for the
current Policy Year will be reduced upon withdrawal
as needed to prevent an increase in the amount of
insurance that requires a charge. The Selected Face
Amount for subsequent Policy
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Years may also be reduced for the same reason. A new
Table of Selected Face Amounts will be sent to the
Owner to reflect these changes.
Example: You make a withdrawal without furnishing us
satisfactory evidence of insurability. Just before the
withdrawal, your policy has a Selected Face Amount of
$50,000 and an account value of $20,000. The Minimum
Face Amount Percentage for the current Policy Year is
200%. Under Death Benefit Option #1, the amount of
insurance which requires a charge is $50,000 minus
$20,000, or $30,000. If you make a withdrawal of
$5,000, the account value would be reduced to $15,000.
The amount of insurance which requires a charge would
otherwise be increased to $35,000 ($50,000 - $15,000).
However, the Selected Face Amount will be reduced
instead to $45,000 and the amount of insurance which
requires a charge will remain at $30,000. (For
simplicity, in this example the minimum annual
interest rate is assumed to be zero.)
How We Pay Any withdrawal made will be paid in one sum. However,
if the entire policy is surrendered, the cash
surrender value may be paid in one sum, or it may be
applied under any payment option elected. See Part 6.
We may delay paying any surrender or withdrawal value
from the Guaranteed Principal Account for up to six
months from the date the request (and the policy, if
needed) is received at our Home Office.
We may delay paying any surrender or withdrawal value
from the Separate Account during any period that:
. The New York Stock Exchange (or its successor)
is closed, except for normal weekend or holiday
closings, or trading is restricted;
. The Securities and Exchange Commission (or its
successor) determines that a state of emergency
exists; or
. The Securities and Exchange Commission (or its
successor) permits us to delay payment for the
protection of our policy owners.
We will add interest to the surrender or withdrawal
value payment if:
. The payment is delayed for more than ten
working days from the effective date of surrender or
withdrawal; and
. The reason for the delay is other than a
reason stated in the third paragraph of this
provision; and
. The amount of such interest is at least $25.
If interest is added, the amount of interest will be
the same as would
be paid under Option D for the same period of time.
See Part 6 for a description of Option D.
Borrowing On This Policy
Right To Make Loans Loans can be made on this policy at any time while the
Insured is living. However, the policy must be
properly assigned to us before the loan is made. No
other collateral is needed. We refer to all
outstanding loans plus accrued interest as "policy
debt."
Effect Of Loan A loan is attributed to each division of the Separate
Account and to the Guaranteed Principal Account in
proportion to the values of this policy in each of
those divisions and in the Guaranteed Principal
Account (excluding any outstanding policy loans) on
the date at the time of the loan. The amount of the
loan attributed to each division of the Separate
Account will be transferred to the Guaranteed
Principal Account. Any such transfer is made by
selling accumulation units in the division and
applying the value of those units to the Guaranteed
Principal Account on the date the loan is made. Any
interest added to the loan will be treated as a new
loan under this provision.
The amount equal to any outstanding policy loans will
be held in the Guaranteed Principal Account, and will
earn interest as described in the Interest On Fixed
Account Value provision.
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Maximum Loan Available There is a maximum amount that can be borrowed. It is
the account value on the date the loan is to be made
reduced by:
. Any outstanding policy debt; and
. Interest on the loan being made and on any
outstanding policy debt to the next Policy Anniversary
Date; and
. An amount equal to the most recent monthly
charge made for this policy, multiplied by the number
of Monthly Calculation Dates from the date the loan is
made to and including the next Policy Anniversary
Date.
Interest The interest rate on any loan is 6% per year. Interest
is not due in advance. This interest accrues (builds
up) each day and becomes part of the policy debt as it
accrues.
Interest is due on each Policy Anniversary Date. If
interest is not paid when due, it will be added to the
loan and will bear interest at the rate payable on the
loan.
Example: You have a loan of $1,000. The interest due
on the Policy Anniversary Date is $60. If it is not
paid on that date, we will add it to the existing
loan. The loan will then be $1,060 and interest will
be charged on this amount from then on.
Policy Debt Limit Policy debt (which includes accrued interest) may not
equal or exceed the account value. If this limit is
reached, we can terminate this policy. To terminate
for this reason we must mail written notice to the
Owner and any assignee shown on our records at their
last known addresses. This notice will state an amount
that will bring the policy debt back within the limit.
If we do not receive payment within 31 days after the
date we mailed the notice, this policy will terminate
without value at the end of those 31 days.
Repayment Of Policy All or part of any policy debt may be repaid at any
Debt time while the policy is in force and the Insured is
living.
Any repayment of policy debt will result in the
transfer of values equal to the repayment out of the
Guaranteed Principal Account and the application of
those values to each division of the Separate Account
and to the Guaranteed Principal Account in proportion
to the values of this policy in each of those
divisions and in the Guaranteed Principal Account
(excluding any outstanding policy loans) at the time
of the repayment.
Other Borrowing Rules We may delay the granting of any loan attributable to
the Guaranteed Principal Account for up to six months.
We may 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 or
holiday closings, or trading is restricted; or
. The Securities and Exchange Commission (or
its successor) determines that a state of emergency
exists; or
. The Securities and Exchange Commission (or
its successor) permits us to delay payment for the
protection of our policy owners.
Reinstating This Policy
When Reinstatement Can After this policy has terminated, it may be
Be Made reinstated - that is, put back in force. However,
the policy cannot be reinstated if it has been
surrendered for its cash surrender value.
Reinstatement must be made within five years after the
date of termination and during the Insured's lifetime.
Requirements To Evidence of insurability satisfactory to us is
Reinstate required to reinstate. A premium is also required as a
cost to reinstate. That premium must be no less than
the amount necessary to produce an account value equal
to three times the monthly charges due on the Monthly
Calculation Date which is on, or next follows, the
date of reinstatement.
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Right To Increase Selected Face Amount
Increases In The Selected Face Amount
While this policy is in force, the Selected Face Amount may be increased upon
written application. Evidence of insurability, satisfactory to us, is required
for each increase. Any increase must be for at least $5,000, unless we adopt
rules that establish a lower minimum.
Any increase in the Selected Face Amount will be effective on the Monthly
Calculation Date which is on, or next follows, the later of:
. The date 15 days after a written request for such change has been
received and approved by us; or
. The requested effective date of the change.
Mortality charges for each increase are determined and deducted from the account
value in accordance with the Monthly Charges provision. These charges will be
deducted from the account value beginning on the effective date of the increase.
Limitations On Increases
No increase in the Selected Face Amount can become effective:
. Within six months after the Policy Date; or
. Within six months after any previous increase; or
. After the Policy Anniversary Date nearest the Insured's 85th birthday.
Evidence Of Increases
If the Selected Face Amount is increased we will send a copy of the application
for the increase and an amended Schedule Page reflecting that increase. We will
also send any Tables pages that may be required. However, we have the right to
require that the policy be sent to us so that the increase can be made.
Right To Transfer This Policy To A Substitute Insured
Transferring This Policy
This policy may be transferred to the life of a substitute insured. Transfer
will be effective on the Transfer Date discussed in the next provision. Transfer
will be subject to the following conditions.
. This policy must be in force on the Transfer Date;
. A written application for the transfer and payment of any required cost
to transfer must be received by us at our Home Office;
. Evidence of insurability of the substitute insured, satisfactory to us,
will be required;
. The substitute insured must not have been under 20 years of age on the
birthday nearest the Policy Date of this policy;
. The substitute insured must not be over 65 years of age on the birthday
nearest the Transfer Date; and
. The Owner of this policy after it has been transferred must have an
insurable interest in the life of the substitute insured.
After transfer, the Policy Date will be the same as it was before transfer.
Transfer Date
The Transfer Date will be the Policy Anniversary Date which is on, or next
follows, the later of:
. The date we approve the application for transfer; and
. The date any required cost to transfer is paid.
The insurance on the previous insured will continue to, but not including, the
Transfer Date. The insurance on the substitute insured will take effect on the
Transfer Date.
When this policy has been transferred, it will be modified to show that the
contestable and suicide periods, as they apply to the substitute insured, will
be measured from the Transfer Date.
Transfer Method
The Selected Face Amount for the substitute insured will be determined as for a
new Insured under a new policy.
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Upon transfer, if the amount of insurance that
requires a charge is greater than the Selected
Face Amount, we will adjust the amount of
insurance that requires a charge to equal the
Selected Face Amount by refunding a portion of
the account value.
The account value immediately after transfer will
be equal to:
. The account value immediately before
transfer; plus
. Any net premium necessary to make the cash
surrender value, immediately before the monthly
charges are deducted on the Transfer Date, at
least 12 times the monthly charges; minus
. Any amount which must be refunded as
discussed in the second paragraph of this
provision; minus
. The monthly charges deducted on the
Transfer Date.
Any charges we deduct on or after the transfer
will be based on the life of the substitute
insured.
Cost To Transfer The cost to transfer is the sum of:
. An administrative fee of $75; and
. Any premium necessary to effect the
transfer method described above; and
. Any excess policy debt as discussed in the
Policy Debt After Transfer provision.
Policy Debt After Any policy debt on the Transfer Date will, if not
Transfer repaid at that time, remain after transfer.
However, if the amount of that debt is more than
the maximum loan available after transfer, the
excess must be repaid on or before the Transfer
Date.
Assignment Upon Any assignment of this policy which is in effect
Transfer on the Transfer Date will continue to apply after
that Date.
Reports To Owner
Annual Report Each year, within 30 days after the Policy
Anniversary Date, we will mail a report to the
Owner. There will be no charge for this report.
This report will show the account value at the
beginning of the previous Policy Year and all
premiums paid during that Year. It will also show
the additions to, and deductions from, the
account value during that Year, and the account
value, death benefit, cash surrender value, and
policy debt as of the last Policy Anniversary
Date.
This report will also include any additional
information required by applicable law or
regulation.
Illustrative Report In addition to the annual report, we will,upon
request after the first Policy Year, send an
illustrative report of projected values to the
Owner. We will not charge a fee for providing an
illustrative report on an annual basis. However,
if the Owner requests illustrative reports more
frequently, we may charge a reasonable fee, but
only for those additional reports.
Part 5. The Death Benefit
The death benefit is the amount of money we will
pay when we receive due proof at our Home Office
that the Insured died while the policy was in
force. We discuss the death benefit in this Part.
Amount Of Death Benefit If the Insured dies while this policy is in
force, the death benefit will be the amount of
benefit provided by the Death Benefit Option in
effect on the date of death, with these
adjustments:
. We add the part of any monthly charge that
applies to a period beyond the date of death;
and
. We deduct:
. Any policy debt outstanding on the
date of death; and
. Any unpaid monthly charges to the date
of death.
Death Benefit Options Two Death Benefit Options, described below, are
available under this policy. The Death Benefit
Option is shown on the Schedule Page and the
Selected Face Amount is shown in the Table of
Selected Face Amounts. The Minimum Face Amount is
discussed in the next provision.
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Death Benefit Option #1 - Under this Option, the amount of benefit is the
greater of:
. The Selected Face Amount in effect on the date of death; and
. The Minimum Face Amount in effect on the date of death.
Death Benefit Option #2 - Under this Option, the amount of benefit is the
greater of:
. The Selected Face Amount in effect on the date of death plus the
account value on the date of death; and
. The Minimum Face Amount in effect on the date of death.
Minimum Face Amount
In order to qualify as life insurance under the federal tax laws in effect on
the Issue Date, this policy has a Minimum Face Amount. The Minimum Face Amount
on any date is a percentage of the account value on that date. The percentage
for each Policy Year is shown in the Table Of Minimum Face Amount Percentages in
this policy.
Example: The Minimum Face Amount is determined on June 10, 19X1. The account
value on that date is $50,000. The last Policy Anniversary Date was May 2, 19X1.
If the applicable Minimum Face Amount Percentage for the Policy Year beginning
May 2, 19X1 is 260%, then the Minimum Face Amount is 260% of $50,000, or
$130,000.
Changes In The Death Benefit Option
While this policy is in force, the Death Benefit Option may be changed upon
written request. Any change from Death Benefit Option 1 to Death Benefit Option
2 will require evidence of insurability satisfactory to us.
Any change in the Death Benefit Option will take effect on the Policy
Anniversary Date on or next following the later of:
. The date 15 days after a written request for such change has been
received and approved by us; or
. The requested effective date of the change.
When We Pay
The death benefit will be paid within seven days after the date we receive due
proof of the Insured's death, and any other requirements necessary for us to
make payment, at our Home Office. However, we may delay payment of the death
benefit during any period that:
. 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 a state of emergency exists; or
. The Securities and Exchange Commission (or its successor) permits us to
delay payment for the protection of our policy owners.
Interest On Death Benefit
If the death benefit is paid in one sum, we will add interest from the date of
death to the date of payment. The amount of interest will be the same as would
be paid under Option D of the payment options for that period of time but not
less than that required by law. See Part 6 for a description of Option D.
If the death benefit is applied under a payment option, interest will be paid
from the date of death to the effective date of that option. It will be paid in
one sum to the Beneficiary living on that effective date. The amount of interest
will be the same as would be paid under Option D for that period of time but not
less than that required by law.
Suicide Exclusion
Except for any increases in the Selected Face Amount applied for after the Issue
Date of this policy, we will pay a limited death benefit if the Insured commits
suicide, while sane or insane, within two years from the Issue Date and while
this policy is in force. The limited death benefit will be the amount of
premiums paid for this policy, less any policy debt and amounts withdrawn.
For any increases in the Selected Face Amount applied for after the Issue Date
of this policy, we
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will pay a limited death benefit if the Insured
commits suicide, while sane or insane, within two
years from the effective date of the increase and
while it is in force. The limited death benefit
will be the monthly deductions made for that
increase. However, if the limited death benefit
as described in the preceding paragraph is
payable, there will be no death benefit for the
increase.
Any limited death benefit will be paid in one sum
to the Beneficiary.
Part 6. Payment Options
These are Optional Methods Of Settlement. They
provide alternate ways in which payment can be
made.
Availability Of Options All or part of the death benefit or cash
surrender value may be applied under any payment
option. If this policy is assigned, any amount
due to the assignee will be paid in one sum. The
balance, if any, may be applied under any payment
option.
Minimum Amounts If the amount to be applied under any option for
any one person is less than $2,000, we may pay
that amount in one sum instead. If the payments
under any option come to less than $20 each, we
have the right to make payments at less frequent
intervals.
Description Of Options Our payment options are described below. Any
other payment option agreed to by us may be
elected. The payment options are described in
terms of monthly payments. Annual, semiannual, or
quarterly payments may be requested instead. The
amount of these payments will be determined in a
way which is consistent with monthly payments and
will be quoted on request.
If the Schedule Page shows that this policy was
issued on a unisex rate basis, the female rates
shown in the Option C, E and F Tables apply in
all cases. The male rates in those tables do not
apply to unisex rate policies.
Option A Fixed Amount Payment Option. Each monthly payment
will be for an agreed fixed amount. The amount of
each payment may not be less than $10 for each
$1,000 applied. Interest will be credited each
month on the unpaid balance and added to it. This
interest will be at a rate determined by us, but
not less than the equivalent of 3% per year.
Payments continue until the amount we hold runs
out. The last payment will be for the balance
only.
Option B Fixed Time Payment Option. Equal monthly payments
will be 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
monthly payment rates we are using when the first
payment is due. The rate of any payment will not
be less than shown in the Option B Table.
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Option B Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Monthly Monthly
Years Payment Years Payment
1 $84.47 16 $6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51
6 15.14 21 5.32
7 13.16 22 5.15
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71
11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
For quarterly payment, multiply by 2.993. For semiannual payment, multiply
by 5.963. For annual payment, multiply by 11.839.
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Option C Lifetime Payment Option. Equal monthly payments
are based on the life of a named person. Payments
will continue for the lifetime of that person.
The three variations are:
(1) Payments for life only. No specific number
of payments is guaranteed. Payments stop when the
named person dies.
(2) Payments guaranteed for amount applied.
Payments stop when they equal the amount applied
or when the named person dies, whichever is
later.
(3) Payments guaranteed for 5, 10 or 20 years.
Payments stop at the end of the selected
guaranteed period or when the named person dies,
whichever is later.
The Option C Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is due.
They will not be less than shown in the Table.
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Option C Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments Payments Guaranteed For
Age* For Life Amount 5 10 20
Male Female Only Applied Years Years Years
35 40 $3.30 $3.25 $3.29 $3.28 $3.27
40 45 3.47 3.41 3.46 3.45 3.43
45 50 3.69 3.60 3.68 3.67 3.62
50 55 3.96 3.83 3.95 3.93 3.85
55 60 4.31 4.13 4.30 4.27 4.14
60 65 4.77 4.49 4.75 4.70 4.44
65 70 5.41 4.96 5.38 5.26 4.77
70 75 6.30 5.56 6.21 5.96 5.07
75 80 7.50 6.31 7.30 6.77 5.30
80 85 9.16 7.29 8.72 7.64 5.43
85 11.48 8.54 10.46 8.44 5.49
*Age on birthday nearest due date of the first payment. Monthly payment
rates for ages not shown will be furnished on request. Monthly payment rates for
ages over 85 are the same as those for 85.
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Option D Interest Payment Option. We will hold any amount
applied under this option. Interest on the unpaid
balance will be paid each month at a rate
determined by us. This rate will be not less than
the equivalent of 3% per year.
Option E Joint Lifetime Payment Option. Equal monthly
payments are based on the lives of two named
persons. While both are living, one payment will
be made each month. When one dies, the same
payment will continue for the lifetime of the
other. The two variations are:
(1) Payments for two lives only. No specific
number of payments is guaranteed. Payments stop
when both named persons have died.
(2) Payments guaranteed for 10 years. Payments
stop at the end of 10 years, or when both named
persons have died, whichever is later.
The Option E Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is due.
They will not be less than shown in the Table.
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Option E Table
Minimum Monthly Payment Rates For Each $1,000 Applied
Payments For Two Lives Only
M50 M55 M60 M65 M70 M75
Age*F55 F60 F65 F70 F75 F80
M F
50 55 $3.53 $3.64 $3.72 $3.80 $3.85 $3.89
55 60 3.64 3.78 3.91 4.03 4.12 4.18
60 65 3.72 3.91 4.10 4.27 4.42 4.54
65 70 3.80 4.03 4.27 4.52 4.76 4.97
70 75 3.85 4.12 4.42 4.76 5.11 5.44
75 80 3.89 4.18 4.54 4.97 5.44 5.92
80 85 3.91 4.23 4.63 5.12 5.71 6.36
Payments Guaranteed For 10 Years
M50 M55 M60 M65 M70 M75
Age*F55 F60 F65 F70 F75 F80
M F
50 55 $3.52 $3.63 $3.71 $3.79 $3.84 $3.88
55 60 3.63 3.77 3.90 4.02 4.11 4.17
60 65 3.71 3.90 4.09 4.26 4.41 4.53
65 70 3.79 4.02 4.26 4.51 4.75 4.94
70 75 3.84 4.11 4.41 4.75 5.08 5.38
75 80 3.88 4.17 4.53 4.94 5.38 5.82
80 85 3.90 4.22 4.61 5.08 5.62 6.19
*Age on birthday nearest the due date of the first payment. Monthly payment
rates for ages not shown will be furnished on request. Monthly payment rates for
ages over 85 are the same as those for 85.
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Option F Joint Lifetime Payment Option With Reduced
Payments. Monthly payments are based on the lives
of two named persons. Payments will continue
while both are living. When one dies, payments
are reduced by one-third and will continue for
the lifetime of the other. Payments stop when
both persons have died.
The Option F Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates we are using when the first payment is due.
They will not be less than shown in the Table.
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Option F Table
Minimum Monthly Payment Rates For Each $1,000 Applied
M50 M55 M60 M65 M70 M75
Age*F55 F60 F65 F70 F75 F80
M F
50 55 $3.80 $3.94 $4.10 $4.28 $4.47 $4.66
55 60 3.94 4.11 4.30 4.51 4.73 4.96
60 65 4.10 4.30 4.52 4.77 5.05 5.33
65 70 4.28 4.51 4.77 5.08 5.42 5.77
70 75 4.47 4.73 5.05 5.42 5.85 6.30
75 80 4.66 4.96 5.33 5.77 6.30 6.88
80 85 4.86 5.19 5.61 6.13 6.77 7.51
*Age on birthday nearest the due date of the first payment. Monthly payment
rates for ages not shown will be furnished on request. Monthly payment rates for
ages over 85 are the same as those for 85.
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Electing A Payment To elect any option, we require that a written
Option request, satisfactory to us, be received at our
Home Office. The Owner may elect an option during
the Insured's lifetime. If the death benefit is
payable in one sum when the Insured dies, the
Beneficiary may elect an option with our consent.
Options for any amount payable to an association,
corporation, partnership or fiduciary are
available with our consent. However, a
corporation or partnership may apply any amount
payable to it under Option C, E, or F if the
option payments are based on the life or lives of
the Insured, the Insured's spouse, any child of
the Insured, or any other person agreed to by us.
Effective Date And The effective date of an option is the date the
Payment Dates amount is applied under that option. For a death
benefit, this is the date that due proof of the
Insured's death is received at our Home Office.
For the cash surrender value, it is the effective
date of surrender.
The first payment is due on the effective date,
except the first payment under Option D is due
one month later. A later date for the first
payment may be requested in the payment option
election. All payment dates will fall on the same
day of the month as the first one. No payment
will become due until a payment date. No part
payment will be made for any period shorter than
the time between payment dates.
Example: Monthly payments of $100 are being made
to your son on the 1st of each month. He dies on
the 10th. No part payment is due your son or his
estate for the period between the 1st and the
10th.
Withdrawals And If provided in the payment option election, all
Changes or part of the unpaid balance under Options A or
D may be withdrawn or applied under any other
option.
If the cash surrender value is applied under
Option A or D, we may delay payment of any
withdrawal for up to six months. Interest at the
rate in effect for Option D during this period
will be paid on the amount withdrawn.
Income Protection To the extent permitted by law, each option
payment and any withdrawal shall be free from
legal process and the claim of any creditor of
the person entitled to them. No option payment
and no amount held under an option can be taken
or assigned in advance of its payment date,
unless the Owner's written consent is given
before the Insured dies. This consent must be
received at our Home Office.
Part 7. Notes On Our Computations
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This Part covers some technical points about this
policy.
Net Investment Factor For each division of the Separate Account, the
Net Investment Factor for any Valuation Period is
the gross investment rate for that period plus
1.00000000 and minus an asset charge. The maximum
asset charge is shown on the Schedule Page. The
Net Investment Factor may be equal to, greater,
or less than 1.00000000.
For each division of the Separate Account, the
gross investment rate for any Valuation Period is
equal to:
. The net earnings of that division during
the Valuation Period, divided by
. The value of the total assets of that
division at the beginning of the Valuation
Period.
The net earnings of each division are equal to
the accrued investment income and capital gains
and losses (realized and unrealized) of that
division reduced by any amount charged against
that division for taxes paid or reserved for by
us. The gross investment rate will be determined
by us in accordance with generally accepted
accounting principles and applicable laws, rules
and regulations. This determination shall be
conclusive upon the Owner, the Insured, any
Beneficiary and any assignee and any other person
under this policy.
Accumulation Unit Value The value of an accumulation unit in each
division was set at $1.00000000 on the first
Valuation Date selected by us. The value on any
date thereafter is equal to the product of the
Net Investment Factor for that division for the
Valuation Period which includes that date and the
accumulation unit value on the preceding
Valuation Date.
Adjustments Of Units We have the right to split or consolidate the
And Values number of accumulation units credited to the
policy, with a corresponding increase or decrease
in the unit values. We may exercise this right
whenever we consider an adjustment of units to be
desirable. However, strict equity will be
preserved in making any adjustment. No adjustment
will have any material effect on the benefits,
provisions or investment return of this policy,
or on the Owner, Insured, any Beneficiary, any
assignee or other person, or on us.
Basis Of Computation The Basis Of Computation is the mortality table
and interest rate we use to determine:
. The minimum cash surrender values;
. The maximum monthly mortality charges;
. The minimum annual interest earned on the
fixed account value of the policy; and
. The minimum payments under Payment Options
C, E, and F.
The Basis Of Computation for the minimum cash
surrender values, for the maximum monthly
mortality charges, and for the minimum interest
earned on the fixed account value of the policy
is shown on the Schedule Page. The mortality
table specified on the Schedule Page applies to
amounts in a standard underwriting
classification. Appropriate modifications are
made to this table for any amount which is not in
a standard underwriting classification.
In computing the minimum payments under Payment
Options C, E, and F, we use mortality rates from
the 1983 Table "a" with Projection G for 30 years
and with female rates set back five years. The
interest used is at an annual rate of 3%.
Method Of Computing When required by the state where this policy was
Values delivered, we filed a detailed statement of the
method we use to compute the policy benefits and
values. These benefits and values are not less
than those required by the laws of that state.
28
<PAGE>
WHERE TO FIND IT
Page No.
The Schedule Page..................................................... 1
Table of Selected Face Amounts........................................ 2
Table of Maximum Monthly Mortality
Charges............................................................. 3
Table of Minimum Face Amount
Percentages......................................................... 4
Part 1. - The Basics Of This Policy...................................... 5
The Parties Involved - Owner, Insured,
Beneficiary, Irrevocable
Beneficiary......................................................... 5
Dates - Policy Date, Policy Anniversary Date, Policy
Year, Paid-up Policy Date, Issue Date, Monthly Calculation
Date, Valuation Date, Valuation Period,
Valuation Time, Register Date....................................... 5
Policy A Legal Contract............................................... 6
Representations And Contestability.................................... 6
Misstatement Of Age Or Sex............................................ 6
Meaning Of In Force................................................... 6
Home Office........................................................... 7
Part 2. - Premium Payments............................................... 7
The First Premium..................................................... 7
Planned Annual Premiums............................................... 7
Premium Flexibility And Premium Notices............................... 7
Where To Pay Premiums................................................. 7
Right To Refund Premiums.............................................. 7
Part 3. - Accounts, Values, And Charges.................................. 7
Net Premium........................................................... 8
Allocation Of Net Premiums............................................ 8
The Separate Account.................................................. 8
Changes In The Separate Account....................................... 8
Accumulation Units.................................................... 9
Purchase And Sale Of Accumulation Units............................... 9
Account Value Of Policy............................................... 9
Variable Account Value Of Policy...................................... 9
Fixed Account Value Of Policy......................................... 10
The Guaranteed Principal Account...................................... 10
Interest On Fixed Account Value....................................... 10
Monthly Charges....................................................... 10
Grace Period And Termination.......................................... 11
Part 4. - Life Benefits.................................................. 11
Policy Ownership...................................................... 12
Rights Of Owner...................................................... 12
Assigning This Policy................................................ 12
Changing The Owner Or Beneficiary.................................... 12
Transfers Of Values.................................................. 12
This Policy's Share In Dividends...................................... 12
Policy Is Participating.............................................. 12
How Dividends May be Used............................................ 13
Dividend After Death................................................. 13
Surrendering This Policy And Making
Withdrawals.......................................................... 13
Right To Surrender................................................... 13
Cash Surrender Value................................................. 13
Making Withdrawals....................................................... 13
How We Pay............................................................... 14
Borrowing On This Policy................................................. 15
Right To Make Loans...................................................... 15
Effect Of Loan........................................................... 15
Maximum Loan Available................................................... 15
29
<PAGE>
Interest................................................................. 15
Policy Debt Limit........................................................ 15
Repayment Of Policy Debt................................................. 15
Other Borrowing Rules.................................................... 16
Reinstating This Policy.................................................. 16
When Reinstatement Can Be Made........................................... 16
Requirements To Reinstate................................................ 16
Right To Increase Selected Face Amount................................... 16
Increases In The Selected Face Amount.................................... 16
Limitations On Increases................................................. 16
Evidence Of Increases.................................................... 16
Right To Transfer This Policy To A Substitute Insured.................... 17
Transferring This Policy................................................. 17
Transfer Date............................................................ 17
Transfer Method.......................................................... 17
Cost To Transfer......................................................... 18
Policy Debt After Transfer............................................... 18
Assignment Upon Transfer................................................. 18
Reports To Owner......................................................... 18
Annual Report............................................................ 18
Illustrative Report...................................................... 18
Part 5. - The Death Benefit.............................................. 18
Amount Of Death Benefit.................................................. 18
Death Benefit Options.................................................... 18
Minimum Face Amount...................................................... 19
Changes In The Death Benefit Option...................................... 19
When We Pay.............................................................. 19
Interest On Death Benefit................................................ 19
Suicide Exclusion........................................................ 20
Part 6. - Payment Options................................................ 20
Availability Of Options.................................................. 20
Minimum Amounts.......................................................... 20
Description Of Options................................................... 20
Electing A Payment Option................................................ 24
Effective Date And Payment Dates......................................... 24
Withdrawals And Changes.................................................. 25
Income Protection........................................................ 25
Part 7. - Notes On Our Computations...................................... 25
Net Investment Factor.................................................... 25
Accumulation Unit Value.................................................. 25
Adjustments Of Units And Values.......................................... 25
Basis Of Computation..................................................... 25
Method Of Computing Values............................................... 26
Any Riders and Endorsements, and a Copy of The Application for The Policy,
Follow Page 26.
30
<PAGE>
Flexible Premium Variable Whole Life Insurance Policy With Table Of Selected
Face Amounts
This Policy provides that:
Insurance is payable when the Insured dies.
Within specified limits, flexible premiums may be paid during the Insured's
lifetime.
Annual dividends may be paid.
Notice Of Annual Meeting
The Insured is hereby notified that by virtue of this policy he or she is a
member of Massachusetts Mutual Life Insurance Company and is entitled to vote
either in person or by proxy at any and all meetings of said Company. The annual
meetings are held at its Home Office, in Springfield, Massachusetts, on the
second Wednesday of April in each year at 2 o'clock p.m.
31
<PAGE>
Exhibit 1(A)(10)
Application for a Flexible Premium Variable Whole
Life Insurance Policy
1. Name:
2. Business Address:
street & no. city state zip
3. Taxpayer ID No. 4. Plan Account No. (if available):
For each Proposed Insured, the attached Schedule of Insureds lists: Full Name,
Social Security Number, Date of Birth, Sex and, for the first Policy Year,
Selected Face Amount of Insurance and any Supplemental One-Year Term Insurance.
5. Is every Proposed Insured now working a minimum of 1,000 hours annually
for the Employer or its affiliate(s)?
If "No," give detailed explanation in 19. Yes No
6. Is every Proposed Insured a citizen of and resident in the USA? Yes No
If "No," is citizenship and residence of each Proposed Insured indicated
on the Schedule of Insureds? Yes No
7. Permanent Plan (select one):
Whole Life with Supplemental One-Year Term Insurance Option (Strategic
Life 4)
Flexible Premium Whole Life with Table of Selected Face Amounts
(Strategic Life 7)
8. Death Benefit Option (if applicable):
Option 1 - Selected Face Amount
Option 2 - Selected Face Amount plus Account Value
Option 3 - Selected Face Amount with Cost-of-Living Adjustment
9. For each Policy Year after the first, Supplemental One-Year Term Insurance
(or, if applicable, Selected Face Amount):
10. Loan Interest Rate (where elective):
(a) Rate: Adjustable 6% %
(b) Payable in: Arrears Advance
11. Policy Date (for all policies on Proposed Insureds listed in Schedule of
Insureds):
12. Automatic Premium Loan (if applicable): Yes No
13. Premium Amounts (if applicable):
(a) First Premium (total for all policies) $
(b) Planned Annual Premium (total for all policies) $
(c) Method of premium allocation to each policy
14. Dividend Option (if applicable):
Cash Accumulations Reduce Premium Paid-Up Additions
15. The policies applied for will be used in conjunction with an
employer-sponsored plan involving both males and females. All policies
will be issued on a unisex basis unless checked here for sex-distinct
basis. Sex-Distinct Basis
16. Owner:
1
<PAGE>
Employer
Proposed Insured
Other (Give full name, address and Taxpayer ID No.)
17. Beneficiary:
Employer
If the Employer is the beneficiary, the Employer certifies,
represents and warrants that:
(i) The Employer has a lawful and substantial economic
interest in the life, health and bodily safety of each
Proposed Insured; and
(ii) The Services of each such Proposed Insured are such that
the Employer expects to realize either:
A substantial pecuniary gain through the continued
life of the Proposed Insured; or
A substantial pecuniary loss in the event of the
Proposed Insured's death.
As designated by Proposed Insured on Application (Part 1B)
Owner (if other than Proposed Insured)
See memo attached
If two or more persons are the beneficiaries in any class, payment shall be made
to them equally or to the survivor(s), unless otherwise requested. If payment is
made in one sum and there is no beneficiary entitled to payment when the
Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured. But if the Proposed
Insured is not the Owner, payment shall be made to the Owner.
18. Will the insurance now being applied for replace or change, or is it
intended to replace or change, any insurance or annuity, in whole or in
part, issued by this or any other company? Yes No
If "Yes," give company name, policy number, amount and plan in 19.
19. Remarks:
20. Premium paid with this Application $ (allocated to each policy
using method given in 13c)
21. Premium and Other Notices will be sent to the Employer.
22. The Employer applies for temporary life insurance on the life of each
Proposed Insured listed in the attached Schedule of Insureds: Yes No
If a "No," the following provisions of this section do not apply.
23. The effective date of the temporary insurance is the latest of:
(i) The date we receive from the Employer an amount of premium not less
than one-fourth of the sum of the minimum initial premiums for the
policies applied for;
(ii) The date this Application (Part 1A) is signed by one of our
Officers; and
(iii) The date chosen by the Employer (optional).
24. The amount of temporary insurance on the life of each Proposed Insured is:
The Selected Face Amount and any Supplemental One-Year Term Insurance for
the first Policy Year, as shown in the Schedule of Insureds
2
<PAGE>
25. Any temporary insurance on the life of a Proposed Insured will terminate
on the earliest of:
(i) The date the permanent life insurance applied for in this
application takes effect on the life of that Proposed Insured;
(ii) The date that Proposed Insured fails to meet any requirements to
qualify for the permanent life insurance applied for;
(iii) The date 90 days after the effective date of the temporary insurance
(in this case, we will give the Employer notice prior to termination); and
(iv) The date the Employer's written notice of termination of the
insurance is received by us at our Principal Administrative Office.
If the temporary insurance on the life of a Proposed Insured terminates for the
reason specified above in 25(i), the amount of premium paid with this
Application that was allocated to the policy on the life of that Proposed
Insured will be applied as premiums under that permanent life insurance policy.
If the temporary insurance on the life of a Proposed Insured terminates for any
other reason, we will refund the amount of premium paid with this Application
that was allocated to the policy on the life of that Proposed Insured, less a
mortality charge. This mortality charge will be for the period from the
effective date of the temporary insurance to, but not including, the termination
date. The mortality charge for that Proposed Insured will be based on the amount
of temporary insurance on the Proposed Insured's life, and the term rate from
the attached Table of Temporary Insurance Rates for the Proposed Insured's age.
The person(s) signing below acknowledge and agree that:
The Application - This is part of an application for permanent life insurance.
The application includes this Part 1A and its attached Schedule of Insureds and
Table of Temporary Insurance Rates, the Part 1B (which has been or which will be
completed by the Proposed Insured), any Part 2 that may be required, and any
amendments or supplements to either Part. To the best of the knowledge and
belief of the person(s) signing below, all statements in this application are
complete and true and were correctly recorded. Each person signing below adopts
all the statements made in the application and agrees to be bound by them. This
Application (Part 1A) is valid until withdrawn by the Owner by written notice to
us at our Principal Administrative Office. Withdrawal of this Application (Part
1A) shall not necessarily affect its use with applications submitted prior to
the date we receive such notice.
Our Liability - A minimum amount of premium may be paid to the agent in exchange
for temporary life insurance as discussed above in the Temporary Insurance
Agreement section. If this is done, we shall be liable only as set forth in that
Agreement. If that amount of premium is not paid, we shall have no liability
unless and until:
- - The application has been approved by us at our Principal Administrative
Office; and
- - The first premium has been paid during the lifetime of the Proposed
Insured; and
- - The Proposed Insured is actively working a minimum of 1,000 hours annually
for the Employer or its affiliate(s); and
- - The policy, contract or certificate of coverage has been delivered to the
person named as Owner in the policy; and
- - At the time of payment and delivery, all statements in the application
which are material to the risk are complete and true as though they were
made at that time.
If any of these conditions are not met, the policy, contract or certificate of
coverage and rider(s) applied for shall not take effect.
3
<PAGE>
Authority of Agents - No agent can change the terms of this application or any
policy/contract issued by us. No agent can waive any of our rights or
requirements, or extend the time for any payment.
Changes and Corrections - Any change or correction of the application will be
shown on an Amendment of Application attached to the policy/contract. Acceptance
of any policy, contract or certificate of coverage issued shall be acceptance of
any change or correction of the application we made. However, unless otherwise
indicated in this application, any correction or change of amount,
classification, plan of insurance or riders must be agreed to in writing.
Taxpayer Identification (Applies only if the Employer is the Owner) - The
Employer certifies, under penalties of perjury, that: (i) the number referred to
in 3 of this Application (Part 1A) is the correct Taxpayer Identification Number
(or the Employer is waiting for a number to be issued); and (ii) the Employer is
not subject to backup withholding either because the Internal Revenue Service
(IRS) has not notified the Employer that the Employer is subject to backup
withholding as a result of a failure to report all interest or dividends, or
because the IRS has notified the Employer of termination of backup withholding.
If the IRS has notified said Owner that he/she is subject to backup withholding
and he/she has not received notice from the IRS that backup withholding has
terminated, he/she should strike out the language above in (ii) that he/she is
not subject to backup withholding due to notified payee underreporting.
For the Employer:
Print Name and Title of Person Authorized Signature of Authorized Person to
Sign for the Employer
Signed at on
City State Date
For the Life Insurance Company specified
above (if temporary insurance applied for):
Print Name and Title of Officer Authorized Officer's Signature Date
to Sign for Life Insurance Company
General Agent Submitting Application Signature of Soliciting Agent
4
<PAGE>
1. The Application consists of this Part 1B and Part 1A No.
2. Employer
3. Name and Address of Proposed Insured (hereinafter, "you" and "your" refer
to the Proposed Insured):
first name middle name
last name suffix
street & no. city state zip
mo. day yr.
4. Social Security No. 6. Date of Birth
5. Male Female 7. Citizenship, if not USA:
Type of Visa: Permanent Temporary
8. Business Address:
street & no. city state zip
9. Beneficiary (if to be named by Proposed Insured as indicated in Employer -
Sponsor Application Part 1A):
If two or more persons are the beneficiaries in any class, payment shall be made
to them equally or to the survivor(s), unless otherwise requested. If payment is
made in one sum and there is no beneficiary entitled to payment when the
Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured. But if the Proposed
Insured is not the Owner, payment shall be made to the Owner.
10. Are you now actively working a minimum of 1,000 hours annually for the
Employer or its affiliate(s)? Yes No
11. Have you smoked cigarettes in the last 12 months? Yes No
To the best of my knowledge and belief, all answers and statements are full,
complete and true and were correctly recorded before I signed my name below.
Taxpayer Identification (Applies only if Proposed Insured is Owner) - The
Proposed Insured herein certifies, under penalties of perjury, that: (i) the
number referred to in 4 of this Application (Part 1B) is his/her correct
Taxpayer Identification Number (or he/she is waiting for a number to be issued);
and (ii) he/she is not subject to backup withholding either because he/she has
not been notified by the Internal Revenue Service (IRS) that he/she is subject
to backup withholding as a result of a failure to report all interest or
dividends, or because the IRS has notified him/her that he/she is no longer
subject to backup withholding. If the IRS has notified that Proposed Insured
that he/she is subject to backup withholding and he/she has not received notice
from the IRS that backup withholding has terminated, he/she should strike out
the language above in (ii) that he/she is not subject to backup withholding due
to notified payee underreporting.
Proposed Insured Signature of Soliciting Agent
Signed at on
City State Date
5
<PAGE>
1. The Application consists of this Part 1B and Part 1A No.
2. Employer
3. Name and Address of Proposed Insured (hereinafter, "you" and "your" refer
to the Proposed Insured):
first name middle name
last name suffix
street & no. city state zip
mo. day yr.
4. Social Security No. 6. Date of Birth
5. Male Female 7. Citizenship, if not USA:
Type of Visa: Permanent Temporary
8. Business Address:
street & no. city state zip
9. Beneficiary (if to be named by Proposed Insured as indicated in Employer
Sponsor Application Part 1A):
If two or more persons are the beneficiaries in any class, payment shall be made
to them equally or to the survivor(s), unless otherwise requested. If payment is
made in one sum and there is no beneficiary entitled to payment when the
Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured. But if the Proposed
Insured is not the Owner, payment shall be made to the Owner.
10. Amount of insurance currently applied for, or now in force, on the
Proposed Insured in other companies. If none, check here
Company Name
Amount of Life Insurance
Amount of Accidental Death Benefit
Waiver of Premium Benefit
Year of Issue
Currently Applied for (X)
11. What is your Occupation(s) and Exact Duties?
12. Have you smoked cigarettes in the last 12 months? Yes No
13. Are you now actively working a minimum of 1,000 hours annually for the
Employer or its affiliate(s)? Yes No
14. Have you ever been treated for, or been diagnosed by a member of the
medical profession as having, a deficiency of the immune system such as
acquired immune deficiency syndrome (AIDS) or AIDS related complex (ARC)?
Yes No
15. Have you ever consulted or been treated by a physician for cancer or
disease of the heart? Yes No
16. Have you applied for life insurance and been declined or postponed in the
last 5 years? Yes No
(If "Yes" answers given in 14, 15 or 16 give details here.)
17. Remarks:
6
<PAGE>
To the best of my knowledge and belief, all answers and statements are full,
complete and true and were correctly recorded before I signed my name below.
Authorization to Obtain and Disclose Information - I have received the Notice
regarding the Medical Information Bureau, Inc. and the Fair Credit Reporting
Act. I understand that an investigative consumer report may be made regarding my
character, general reputation, personal characteristics and mode of living, and
authorize that report to be made. I hereby authorize any licensed physician,
medical practitioner, hospital, clinic, other medical or medically related
facility, insurance company, the Medical Information Bureau, Inc., or other
organization that has any records or knowledge of me and my health, to make such
information available to the life insurance company or its reinsurers. A copy of
this authorization shall be as valid as the original. (This authorization is
only valid where permitted by law.)
Taxpayer Identification (Applies only if Proposed Insured is Owner) - The
Proposed Insured herein certifies, under penalties of perjury, that: (i) the
number referred to in 4 of this Application (Part 1B) is his/her correct
Taxpayer Identification Number (or he/she is waiting for a number to be issued);
and (ii) he/she is not subject to backup withholding either because he/she has
not been notified by the Internal Revenue Service (IRS) that he/she is subject
to backup withholding as a result of a failure to report all interest or
dividends, or because the IRS has notified him/her that he/she is no longer
subject to backup withholding. If the IRS has notified the Proposed Insured that
he/she is subject to backup withholding and he/she has not received notice from
the IRS that backup withholding has terminated, he/she should strike out the
language above in (ii) that he/she is not subject to backup withholding due to
notified payee underreporting.
Proposed Insured Signature of Soliciting Agent
Signed at on
City State Date
7
<PAGE>
Notice To Insured And/Or Applicant For Insurance
Thank you for applying for insurance with us. We will give your application
prompt consideration and will notify you of our action as soon as possible.
In addition to your answers on the application, we must also consider
information from other sources. These sources may include results of a physical
examination, an investigative consumer report, and reports from doctors who have
attended you or from hospitals where you have been treated.
MEDICAL INFORMATION BUREAU NOTICE - Information regarding your insurability will
be treated as confidential. We or our reinsurers may, however, make a brief
report thereon to the Medical Information Bureau, Inc., a non-profit membership
organization of life insurance companies, which operates an information exchange
on behalf of its members. If you apply to another Bureau member company for life
or health insurance coverage, or a claim for benefits is submitted to such a
company, the Bureau, upon request, will supply that company with the information
it may have in its files.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. Unless the Medical Director feels that it
is in your best interest to disclose this information to your physician, it will
be disclosed directly to you. If you question the accuracy of information in the
Bureau's file, you may contact the Bureau and seek a correction in accordance
with the procedures set forth in the federal Fair Credit Reporting Act. The
address of the Bureau's information office is Post Office Box 105, Essex
Station, Boston, Massachusetts 02112, telephone number (617) 426-3660. We or our
reinsurers may also release information in our file to other life insurance
companies to whom you may apply for life or health insurance, or to whom a claim
for benefits may be submitted.
The purpose of the Bureau is to protect its member companies and their
policyholders from the costs created by people who try to hide facts about their
insurability. Information furnished by the Bureau cannot be used as a basis for
evaluating risks. However it may be used to alert us to the possible need for
further investigation. THE BUREAU DOES NOT HAVE MEDICAL REPORTS FROM HOSPITALS
AND DOCTORS. THE INFORMATION IN ITS FILES DOES NOT SHOW WHETHER AN INSURANCE
APPLICATION WAS ACCEPTED, PLACED IN AN INCREASED PREMIUM CLASS OR DECLINED.
(This Notice is only valid where permitted by law).
FAIR CREDIT REPORTING ACT NOTICE - As previously noted, an investigative
consumer report may be made on you. It will cover information about your
insurability, including information regarding your character, general
reputation, personal characteristics and mode of living. The information may be
obtained through personal interviews with you, an adult family member, friends,
neighbors and associates. You may send us a written request for a complete and
accurate disclosure of the nature and scope of any report that is made.
If requested, we will be happy to let you know whether or not we asked for an
investigative consumer report to be made. If we did, we will also tell you the
name and address of the consumer reporting agency that furnished the report. By
contacting that agency, you may inspect and receive a copy of the report.
OUR PURPOSE - Part of our basic Company purpose is to provide insurance at the
lowest possible cost. The underwriting process is necessary both to assure this
low cost and to make sure that each policyholder contributes his or her fair
share of the cost. The procedures described above benefit you as a policyholder,
because they assist us in providing your insurance at the lowest possible cost.
8
<PAGE>
1. The Application consists of this Part 1B, Part 2, and Part 1A No.
2. Employer
3. Name and Address of Proposed Insured (hereinafter, "you" and "your" refer
to the Proposed Insured):
first name middle name
last name suffix
street & no. city state zip
mo. day yr.
4. Social Security No. 6. Date of Birth
5. Male Female 7. Citizenship, if not USA:
Type of Visa: Permanent Temporary
8. Business Address:
street & no. city state zip
9. Beneficiary (if to be named by Proposed Insured as indicated in Employer-
Sponsor Application Part 1A):
If two or more persons are the beneficiaries in any class, payment shall be made
to them equally or to the survivor(s), unless otherwise requested. If payment is
made in one sum and there is no beneficiary entitled to payment when the
Proposed Insured dies and the Proposed Insured is the Owner at that time,
payment shall be made to the estate of the Proposed Insured. But if the Proposed
Insured is not the Owner, payment shall be made to the Owner.
10. Amount of insurance currently applied for, or now in force, on the
Proposed Insured in other companies. If none, check here
Company Name
Amount of Life Insurance
Amount of Accidental Death Benefit
Waiver of Premium Benefit
Year of Issue
Currently Applied for (X)
11. What is your Occupation(s) and Exact Duties?
12. Have you smoked cigarettes in the last 12 months? Yes No
13. Are you now actively working a minimum of 1,000 hours annually for the
Employer or its affiliate(s)? Yes No
14. Have you ever been treated for, or been diagnosed by a member of the
medical profession as having, a deficiency of the immune system such as
acquired immune deficiency syndrome (AIDS) or AIDS related complex (ARC)?
Yes No
15. Have you ever consulted or been treated by a physician for cancer or
disease of the heart? Yes No
16. Have you applied for life insurance and been declined or postponed in the
last 5 years? Yes No
9
<PAGE>
17. Within the last 3 years, have you been, or do you now expect to become, a
pilot, student pilot or crew member of any type of aircraft? If "Yes,"
complete Aviation Supplement A3310 Yes No
18. Within the last 3 years, have you taken part in, or do you now expect to
take part in, underwater diving, hang gliding, para sailing, para kiting,
parachuting, skydiving, mountain climbing, or organized racing by
automobile, motorcycle, motorboat or snowmobile? Yes No
If "Yes," complete Avocation Supplement A3320
19. Have you ever been advised of, treated for, or had any known indication
of: (If "Yes," explain in 21 below.)
(a) Heart or blood vessel disease (e.g. hardening of the arteries, poor
circulation, stroke)?
(b) High blood pressure?
(c) Diabetes?
(d) Kidney or other urinary disorder?
(e) Lung disorder?
(f) Nervous system or psychiatric disorder?
(g) Cancer or tumor?
(h) Liver, digestive or bowel disorder?
(i) Impairment of speech, hearing or sight?
(j) Blood disorder?
(k) Arthritis, bone, joint or other muscular disorder?
(l) Any physical or health impairment not previously noted?
20. Are you now taking any medicine or under any other treatment not already
noted? Yes No If "Yes," explain in 21 below.)
A. Ques. No.
Diagnosis
Medication/Treatment
Still Under Treatment Yes No
# of Attacks/Occurrences
Dates (mo/yr) Onset Recovery
Physician/Medical Facility Name Address ZIP
B. Ques. No.
Diagnosis
Medication/Treatment
Still Under Treatment Yes No
# of Attacks/Occurrences
Dates (mo/yr) Onset Recovery
Physician/Medical Facility Name Address ZIP
22. Have you received any treatment in relation to the use of alcohol, drugs
or other chemical substance? Yes No (If "Yes," explain in 24 below.)
23. (a) Height in shoes ft. in. (b) Weight (clothed) lbs.
(c) Loss in weight in the past year? Yes No If "Yes," Amount lbs.
Reason
24. Remarks (give question no. & details):
25. Personal Physician Information
(a) Name/Address given in: 21A 21B
Have no personal physician
Other - give Personal Physician Name / Address here:
(b) Reason you last consulted this physician:
As indicated in: 21A 21B
Routine or General Exam - all findings normal
10
<PAGE>
Other - give details here:
Date last seen
Diagnosis or Reason Last Seen
Medication/Treatment
To the best of my knowledge and belief, all answers and statements are full,
complete and true and were correctly recorded before I signed my name below.
Authorization to Obtain and Disclose Information - I have received the Notice
regarding the Medical Information Bureau, Inc. and the Fair Credit Reporting
Act. I understand that an investigative consumer report may be made regarding my
character, general reputation, personal characteristics and mode of living, and
authorize that report to be made. I hereby authorize any licensed physician,
medical practitioner, hospital, clinic, other medical or medically related
facility, insurance company, the Medical Information Bureau, Inc., or other
organization that has any records or knowledge of me and my health, to make such
information available to the life insurance company or its reinsurers. A copy of
this authorization shall be as valid as the original. (This authorization is
only valid where permitted by law.)
Taxpayer Identification (Applies only if Proposed Insured is Owner) - The
Proposed Insured herein certifies, under penalties of perjury, that: (i) the
number referred to in 4 of this Application (Part 1B) is his/her correct
Taxpayer Identification Number (or he/she is waiting for a number to be issued);
and (ii) he/she is not subject to backup withholding either because he/she has
not been notified by the Internal Revenue Service (IRS) that he/she is subject
to backup withholding as a result of a failure to report all interest or
dividends, or because the IRS has notified him/her that he/she is no longer
subject to backup withholding. If the IRS has notified the Proposed Insured that
he/she is subject to backup withholding and he/she has not received notice from
the IRS that backup withholding has terminated, he/she should strike out the
language above in (ii) that he/she is not subject to backup withholding due to
notified payee underreporting.
Proposed Insured Signature of Soliciting Agent
Signed at on
City State Date
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Notice To Insured And/Or Applicant For Insurance
Thank you for applying for insurance with us. We will give your application
prompt consideration and will notify you of our action as soon as possible.
In addition to your answers on the application, we must also consider
information from other sources. These sources may include results of a physical
examination, an investigative consumer report, and reports from doctors who have
attended you or from hospitals where you have been treated.
MEDICAL INFORMATION BUREAU NOTICE - Information regarding your insurability will
be treated as confidential. We or our reinsurers may, however, make a brief
report thereon to the Medical Information Bureau, Inc., a non-profit membership
organization of life insurance companies, which operates an information exchange
on behalf of its members. If you apply to another Bureau member company for life
or health insurance coverage, or a claim for benefits is submitted to such a
company, the Bureau, upon request, will supply that company with the information
it may have in its files.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file. Unless the Medical Director feels that it
is in your best interest to disclose this information to your physician, it will
be disclosed directly to you. If you question the accuracy of information in the
Bureau's file, you may contact the Bureau and seek a correction in accordance
with the procedures set forth in the federal Fair Credit Reporting Act. The
address of the Bureau's information office is Post Office Box 105, Essex
Station, Boston, Massachusetts 02112, telephone number (617) 426-3660. We or our
reinsurers may also release information in our file to other life insurance
companies to whom you may apply for life or health insurance, or to whom a claim
for benefits may be submitted.
The purpose of the Bureau is to protect its member companies and their
policyholders from the costs created by people who try to hide facts about their
insurability. Information furnished by the Bureau cannot be used as a basis for
evaluating risks. However it may be used to alert us to the possible need for
further investigation. THE BUREAU DOES NOT HAVE MEDICAL REPORTS FROM HOSPITALS
AND DOCTORS. THE INFORMATION IN ITS FILES DOES NOT SHOW WHETHER AN INSURANCE
APPLICATION WAS ACCEPTED, PLACED IN AN INCREASED PREMIUM CLASS OR DECLINED.
(This Notice is only valid where permitted by law).
FAIR CREDIT REPORTING ACT NOTICE - As previously noted, an investigative
consumer report may be made on you. It will cover information about your
insurability, including information regarding your character, general
reputation, personal characteristics and mode of living. The information may be
obtained through personal interviews with you, an adult family member, friends,
neighbors and associates. You may send us a written request for a complete and
accurate disclosure of the nature and scope of any report that is made.
If requested, we will be happy to let you know whether or not we asked for an
investigative consumer report to be made. If we did, we will also tell you the
name and address of the consumer reporting agency that furnished the report. By
contacting that agency, you may inspect and receive a copy of the report.
OUR PURPOSE - Part of our basic Company purpose is to provide insurance at the
lowest possible cost. The underwriting process is necessary both to assure this
low cost and to make sure that each policyholder contributes his or her fair
share of the cost. The procedures described above benefit you as a policyholder,
because they assist us in providing your insurance at the lowest possible cost.
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This Supplement is part of Application Part 1 No. Dated: Month Day Year
1. Owner's Name:
The Owner's Taxpayer Identification No. and address are shown on Part 1 of
the Application.
2. Premium Amounts (if applicable):
(a) First Premium $ (b) Planned Annual Premium $
3. Net Premium Allocation (if applicable):
MML Equity % Opp. Bond % GPA %
MML Money Market % Opp. Capital Appreciation % %
MML Managed Bond % Opp. Growth % %
MML Blend % Opp. Multiple Strategies % %
Opp. Money % Opp. Global Securities % %
Opp. High Income % Opp. Strategic Bond % %
100%
4. Selected Face Amount (SFA) (if applicable):
(a) Initial $
(b) Subsequent - A pattern of SFAs may be elected here subject to
current issue limits. The SFA for the last Policy Year shown will apply to
all later Policy Years. If no SFA is elected here, the Initial SFA will
apply to all Policy Years.
Policy to and Policy Alternatives
Year including Year
Increase by % per year
Increase by $ per year
Increase by % per year Remain Level
Increase by $ per year
Increase by % per year Remain Level
Increase by $ per year
Complete the following if applicable:
5. Has the Owner received an Offering Memorandum or a Prospectus for the
policy(ies) being applied for? Yes No
If `Yes,' give date shown on the Offering Memorandum or Prospectus:
6. Does the Owner understand that:
- - The death benefit and the duration of insurance may be variable or
fixed under specified conditions? Yes No
- - The variable account value of the policy may increase or decrease in
accordance with the experience of the Separate Account (there are no
minimum guarantees as to the variable account value)?
Yes No
- - The fixed account value of the policy earns interest at a rate no
less than a minimum specified rate? Yes No
7. In view of the above, does the Owner believe that this policy will meet
his/her insurance needs and financial objectives? Yes No
To the best of my knowledge, the above answers are true and correctly recorded.
I believe the policy(ies) applied for to be suitable for my objectives.
Signature of Owner Date
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1a. If the Owner is not an individual, a copy of the Authorization Document
(i.e., Corporate Resolution, Trust Instrument, or Partnership Agreement) must be
supplied. Have you attached or previously provided us with this? Yes No
1b. Is the Owner:
(i) a bank, savings and loan association, insurance company, or
registered investment company? Yes No
(ii) an investment adviser registered under Section 203 of the
Investment Advisers Act of 1940? Yes No
(iii) any other entity (whether a natural person, corporation,
partnership, trust, or otherwise) with total assets of at least $50
million?
Yes No
If the Owner answered `Yes' to 1b (i), (ii) or (iii), skip 2 through 12.
2. Number of Owner's Dependents: 5. Owner's Estimated Earned Annual Income:$
3. Age of Owner's Dependents: 6. Owner's Estimated Unearned Annual Income:$
4. Owner's Occupation: 7. Owner's Estimated Net Worth: $
8. Investment Objectives (check all that apply):
Tax-Exempt Income Capital Preservation Income
Growth Tax Reduction
8a. Risk Tolerance (check only one): High Medium Low
9. Investment Strategy (check only one):
Growth without Risk Growth with Risk
10. Sources of Payments (check all that apply):
Current Income
Surrender or Loan on Life Insurance or Annuity
Sale of Mutual Funds Presently Held
Sale of Other Securities Presently Held
Plan Sponsor Contribution
Sale of Personal Property or Real Estate
Savings
11. Is Owner or Owner's Employer a member of the National Association of
Securities Dealers (NASD)? Yes No
12. Owner's estimated Federal Income Tax Bracket: 15% 28% 31% %
13. Remarks:
To the best of my knowledge, the above answers are true and correctly recorded.
I believe the policy(ies) applied for to be suitable for my objectives. I
acknowledge that, for purposes of this transaction, I have not received any
services from MML Investors Services, Inc., in its capacity as a registered
investment adviser.
Signature of Owner Date
Attestation of Agent / Registered Representative
The Owner of the policy(ies) applied for has been informed of the risks involved
in this investment, and I certify that I have reasonable grounds for believing
the policy(ies) to be suitable for the Owner's objectives.
Signature of Agent / Registered Representative Date
Authorized Principal Date
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