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Registration No. 33-89798
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 3
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.
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X on May 1, 1998 pursuant to paragraph (b) of Rule 485.
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60 days after filing pursuant to paragraph (a) of Rule 485.
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on (date) pursuant to paragraph (a) of Rule 485.
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STATEMENT PURSUANT TO RULE 24F-2
The Registrant has registered an indefinite number or amount of its variable
life insurance contracts under the Securities Act of 1933 pursuant to Rule 24F-2
under the Investment Company Act of 1940. The Rule 24F-2 notice for Registrant's
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; MassMutual and the Separate Account
3 Investment Advisors and the Portfolio Managers
4 Sales and Other Agreements
5 MassMutual and the Separate Account
6 MassMutual and the Separate Account
7 Not Applicable
8 Not Applicable
9 Legal Proceedings
10 Cover Page; Summary of the Policy; Detailed Information about
the Policy; Flexibility to Adjust the Amount of Death Benefit;
Transfers; Surrender of the Policy; Withdrawal of Cash
Surrender Value; Death Benefit; Voting Rights
11 MassMutual and the Separate Account
12 MassMutual and the Separate Account; Sales and Other
Agreements
13 MassMutual and the Separate Account; Charges and Deductions
14 Summary of the Policy; MassMutual and the Separate Account;
Detailed Information About the Policy; The Investment Advisors
and Portfolio Managers; MassMutual and the Separate Account;
Surrender Charges; Other Charges; Sales and Other Agreements
15 Summary of the Policy; Detailed Information About the Policy
16 Summary of the Policy; MassMutual and the Separate Account;
Detailed Information About the Policy
17 Summary of the Policy; Account Value and Cash Surrender
Value; Withdrawal Fee
18 MassMutual and the Separate Account
19 Service Agreement; Records and Reports
20 Not Applicable
21 Summary of the Policy; Policy Loan Privilege
22 Not Applicable
23 Bonding Arrangement
24 Limits on Our Right to Challenge the Policy; Suicide; Error
of Age or Sex; Assignment; Beneficiary; Limits on Our Right;
MassMutual and the Separate Account
25 Detailed Information About the Policy
26 Not Applicable
27 Detailed Information About the Policy
<PAGE>
CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
28 Directors and Executive Officers of MassMutual
29 MassMutual and the Separate Account
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Detailed Information about the 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 MassMutual and the Separate Account; Charges for Federal
Taxes;
45 Not Applicable
46 MassMutual and the Separate Account
47 MassMutual and the Separate Account
48 MassMutual and the Separate Account
49 Not Applicable
50 MassMutual and the Separate Account
51 Cover Page; Detailed Information About the Policy
52 MassMutual and the Separate Account; Reservation of Rights
53 Federal Income Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Report of Independent Accountants and Financial Statements
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FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICIES(*)
ISSUED BY
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
This Prospectus describes a flexible premium variable whole life insurance
policy (the "Policy") offered by Massachusetts Mutual Life Insurance Company
("MassMutual"). The Policy, for so long as it remains in force, provides
lifetime insurance protection on the Insured named in the Policy. The Policy is
designed to provide maximum flexibility in connection with premium payments and
Death Benefits by permitting the Policyowner, subject to certain restrictions,
to vary the frequency and amount of Planned Premium Payments and to increase or
decrease the Death Benefit payable under the Policy. This flexibility allows a
Policyowner to provide for changing insurance needs under a single insurance
policy. A Policy may also be surrendered for its Cash Surrender Value.
The Policyowner may allocate Net Premiums and Account Value among the divisions
(the "Divisions") of the designated segment of Massachusetts Mutual Variable
Life Separate Account I (the "Separate Account") and a Guaranteed Principal
Account (the "GPA"). The assets of each Division will be used to purchase, at
net asset value, shares of a designated investment fund. Currently, the
available funds include the following funds of either MML Series Investment Fund
(the "MML Trust") or Oppenheimer Variable Account Funds (the "Oppenheimer
Trust"):
MML Trust: Oppenheimer Trust:
--------- -----------------
MML Equity Fund Oppenheimer Aggressive Growth Fund
MML Money Market Fund Oppenheimer Global Securities Fund
MML Managed Bond Fund Oppenheimer Growth Fund
MML Blend Fund Oppenheimer Strategic Bond Fund
The Policyowner bears the investment risk of any Account Value allocated to the
Separate Account. The Death Benefit may, and the Cash Surrender Value will, vary
up and down depending on the investment performance of the Divisions. While
there is no guaranteed minimum Cash Surrender Value for funds invested in the
Separate Account, a Policy's Death Benefit will never be less than the Selected
Face Amount less any Policy Debt and any unpaid Monthly Charges. Furthermore,
the Policy will not lapse provided there are sufficient funds available to pay
certain monthly charges.
All Policies are serviced through MassMutual's Home Office, located at 1295
State Street, Springfield, Massachusetts 01111-0001. The telephone number is
(413) 788-8411.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE PROSPECTUSES FOR MML
SERIES INVESTMENT FUND AND OPPENHEIMER VARIABLE ACCOUNT FUNDS.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FURTHER REFERENCE.
THE PURPOSE OF THE POLICY WE ARE OFFERING IS TO PROVIDE INSURANCE PROTECTION FOR
THE BENEFICIARY OF A POLICY. WE DO NOT CLAIM THAT THE POLICY IS IN ANY WAY
SIMILAR TO OR COMPARABLE WITH 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 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.
The date of this Prospectus is May 1, 1998.
*Title may vary in some jurisdictions.
1
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<TABLE>
<CAPTION>
Table Of Contents Page
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<S> <C>
Definition Of Terms........................................................... 4
I. SUMMARY OF THE POLICY ..................................................... 6
The Policy .............................................................. 6
The Separate Account and the Guaranteed Principal Account ............... 6
Availability of the Policy .............................................. 6
The Death Benefit ....................................................... 6
Flexibility to Adjust the Amount of Death Benefit ....................... 6
Premium Features ........................................................ 7
Transfers ............................................................... 7
Charges and Deductions .................................................. 7
- Deductions from Premiums ............................................ 7
- Monthly Charges ..................................................... 7
- Surrender Charge .................................................... 7
- Administrative Surrender Charge ................................... 8
- Sales Load Surrender Charge ....................................... 8
- Mortality and Expense Risk Charge ................................... 8
- Other Charges ....................................................... 8
Policy Loan Privilege ................................................... 8
Surrender of the Policy ................................................. 8
Withdrawal of Cash Surrender Value ...................................... 8
II. INFORMATION ABOUT MASSMUTUAL AND THE SEPARATE ACCOUNT .................. 8
MassMutual ............................................................. 8
OppenheimerFunds, Inc .................................................. 9
The Separate Account ................................................... 9
MML Trust and Oppenheimer Trust ........................................ 9
- MML Equity Fund .................................................... 10
- MML Money Market Fund .............................................. 10
- MML Managed Bond Fund .............................................. 10
- MML Blend Fund ..................................................... 10
- Oppenheimer Aggressive Growth Fund ................................. 10
- Oppenheimer Global Securities Fund ................................. 10
- Oppenheimer Growth Fund ............................................ 10
- Oppenheimer Strategic Bond Fund .................................... 10
The Investment Advisers and Portfolio Managers ......................... 11
- Rates of Return .................................................... 11
- Tables I through III ............................................... 12
- Table IV ........................................................... 13
Performance Illustration ............................................... 14
- Table V ............................................................ 14
- Tables VI and VII .................................................. 15
- Tables VIII and IX ................................................. 16
- Tables X through XII ............................................... 17
III. DETAILED INFORMATION ABOUT THE POLICY
Availability of Policy ................................................. 18
Unisex Policies ........................................................ 18
Death Benefit .......................................................... 18
- Death Benefit Options .............................................. 18
- Minimum Face Amount ................................................ 18
- Examples ........................................................... 18
- Changes in Death Benefit Option .................................... 19
- Changes in Selected Face Amount .................................... 19
- Increases in Selected Face Amount .................................. 19
- Decreases in Selected Face Amount .................................. 19
Premiums ............................................................... 19
- Premium Flexibility ................................................ 19
- Planned Annual Premium ............................................. 20
- Premium Limitations ................................................ 20
- Allocation of Net Premium Payments ................................. 20
Transfers .............................................................. 20
Dollar Cost Averaging .................................................. 20
Policy Lapse and Reinstatement ......................................... 21
- Policy Lapse ....................................................... 21
- Reinstatement Option ............................................... 21
Charges and Deductions ................................................. 21
Deductions from Premiums ............................................... 21
- Sales Charge ....................................................... 21
- Premium Tax Charge ................................................. 21
Monthly Charges ........................................................ 21
- Administrative Charge .............................................. 21
- Mortality Charge ................................................... 22
- Rider Charge ....................................................... 22
Daily Charges Against the Separate Account ............................. 22
- Mortality and Expense Risk Charge .................................. 22
- Charges for Federal Taxes .......................................... 22
- Investment Management Fee and Other Expenses ....................... 22
Surrender Charges ...................................................... 22
- General ............................................................ 22
- Administrative Surrender Charge .................................... 22
- Sales Load Surrender Charge ........................................ 22
- Surrender Charge Upon Decrease in Selected Face Amount ............. 23
Other Charges .......................................................... 23
- Withdrawal Fee ..................................................... 23
- Charge for Increase in Selected Face Amount ........................ 23
- Charge for Change from Option 1 to Option 2 ........................ 23
Account Value and Cash Surrender Value ................................. 23
- Account Value ...................................................... 23
- Investment Return .................................................. 23
- Cash Surrender Value ............................................... 23
- Withdrawals ........................................................ 23
Policy Loan Privilege .................................................. 23
- General ............................................................ 23
- Source of Loan ..................................................... 24
- Interest Charged ................................................... 24
- Repayment .......................................................... 24
- Interest on Loaned Value ........................................... 24
- Effect of Loan ..................................................... 24
Free Look Provision .................................................... 24
The Guaranteed Principal Account ....................................... 25
Federal Income Tax Considerations ...................................... 25
- MassMutual's Tax Status ............................................ 25
- Policy Proceeds, Premiums and Loans ................................ 25
- Modified Endowment Contracts ....................................... 26
- Qualified Plans .................................................... 27
- Diversification Standards .......................................... 27
Your Voting Rights ..................................................... 27
Reservation of Rights .................................................. 27
Additional Provisions of the Policy .................................... 28
- Additional Benefits You Can Get by Rider ........................... 28
- Disability Benefit Rider ........................................... 28
- Accidental Death Benefit Rider ..................................... 28
</TABLE>
2
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- Insurability Protection Rider ...................................... 28
- Death Benefit Guarantee Rider ...................................... 28
- Accelerated Death Benefit Rider .................................... 28
- Right to Exchange Insured Endorsement .............................. 28
Exchange Privilege ..................................................... 28
Beneficiary ............................................................ 29
Assignment ............................................................. 29
Limits on Our Right to Challenge the Policy ............................ 29
Error of Age or Sex .................................................... 29
Suicide ................................................................ 29
When We Pay Proceeds ................................................... 29
Payment Options ........................................................ 29
- Fixed Account Payment Option ....................................... 30
- Fixed Time Payment Option .......................................... 30
- Interest on Payment Option ......................................... 30
- Lifetime Payment Option ............................................ 30
- Joint Lifetime Payment Option ...................................... 30
- Joint Lifetime Payment Option with Reduced
Payments ............................................................. 30
- Withdrawal Rights Under Payment Option ............................. 30
Records and Reports .................................................... 30
Sales and Other Agreements ............................................. 30
Compensation ........................................................... 31
Bonding Arrangement .................................................... 31
Directors and Executive Vice Presidents of MassMutual .................. 31
Legal Proceedings ...................................................... 34
Experts ................................................................ 34
Financial Statements ................................................... 34
Appendix A
Illustrations of Death Benefits,
Cash Surrender Values, Account Values
and Accumulated Premiums ............................................. A
3
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Definition Of Terms
Account Value: The sum of the Variable Account Value and the Fixed Account Value
of the Policy.
Attained Age: The Issue Age of the Insured plus the number of completed Policy
Years since the Policy Date.
Beneficiary(ies): The person or persons specified by the Policyowner to receive
some or all of the Death Benefit when the Insured dies.
Cash Surrender Value: The amount payable to a Policyowner upon surrender of the
Policy. It is equal to the Account Value less any surrender charges and less any
Policy Debt and any unpaid Monthly Charges.
Death Benefit: The net amount paid to a Beneficiary following receipt of due
proof of the death of the Insured. The Death Benefit is equal to the benefit
provided by the Death Benefit Option less any Policy Debt and any unpaid Monthly
Charges.
Death Benefit Option: The Policy offers two Death Benefit Options for
determination of the amount of the Death Benefit. The amount of benefit provided
under Option 1 is the greater of the Selected Face Amount or Minimum Face Amount
on the date of death. The amount of benefit provided under Option 2 is the
greater of the Selected Face Amount plus the Account Value on the date of death
and the Minimum Face Amount on the date of death. The Death Benefit Option is
elected at time of application and, subject to certain limitations, may be
changed at a later date.
Effective Annual Rate of Return: The interest rate which, if applied to the
value of an investment at the beginning of a stated period and compounded
annually, would result in the value of that investment at the end of the period.
Fixed Account Value: The current Account Value which is allocated to the GPA.
Guaranteed Principal Account ("GPA"): A fixed account to which a Policyowner may
make allocations.
Home Office: The Home Office of MassMutual which is located at 1295 State
Street, Springfield, Massachusetts 01111-0001.
Insured: The person whose life this Policy insures.
Issue Age: The age of the Insured at his or her birthday nearest the Policy
Date. The Issue Age is shown on the schedule page of the Policy.
Minimum Face Amount: An amount equal to the applicable percentage times the
Account Value. The applicable percentage depends on the sex, smoking
classification, and Attained Age of the Insured. The applicable percentages are
shown in the Policy.
Monthly Calculation Date: The monthly date on which the Monthly Charges for the
Policy are deducted from the Account Value. The first Monthly Calculation Date
will be the Policy Date, and subsequent Monthly Calculation Dates will be on the
same day of each succeeding
calendar month.
Monthly Charges: The charges assessed against the Policy's Account Value on each
Monthly Calculation Date. Each Monthly Charge includes an administrative charge,
a mortality charge, and a rider charge (if any).
Net Premium: The remainder of the premium after the deduction of the Premium
Expense Charge.
Policy: The flexible premium variable life insurance policy offered by
MassMutual that is described in this Prospectus.
Policy Anniversary: An anniversary of the Policy Date.
Policyowner: The person or entity that owns the Policy.
Policy Date: The date shown on the Policy that is the starting point for
determining Policy Anniversary Dates, Policy Years, and Monthly Calculation
Dates.
Policy Debt: The amount of the obligation owed by the Policyowner to MassMutual
from outstanding loans made to the Policyowner under the Policy. This amount
includes any loan interest accrued.
Policy Year: The twelve-month period commencing with the Policy Date, and each
twelve-month period thereafter.
Premium Expense Charge: The amount deducted from a premium payment consisting of
the premium tax charge and the sales charge.
Register Date: The date when a completed Part 1 of the Application is received
or when the first Net Premium is allocated to the Divisions and/or GPA. The
Register Date cannot be prior to the Policy Date.
Selected Face Amount: The amount of insurance coverage issued under the
Policy. Subject to certain limitations, the Policyowner may change the Selected
Face Amount after issue.
Separate Account: The segregated asset account called "Massachusetts Mutual
Variable Life Separate Account I" established by MassMutual under the laws of
Massachusetts and registered as a unit investment trust with the Securities and
Exchange Commission pursuant to the Investment Company Act of 1940, as amended
("1940 Act"). The Separate Account is used to receive and invest premiums for
this Policy.
Valuation Date: A date on which the net asset value of the shares of the
Divisions is determined. Generally, this will be any date on which the New York
Stock Exchange (or its successor) is open for trading.
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Valuation Period: The period, consisting of one or more days, from one Valuation
Time to the next succeeding Valuation Time.
Valuation Time: The time of the close of the New York Stock Exchange (currently
4:00 p.m. eastern time) on a Valuation Date. All actions which are to be
performed on a Valuation Date will be performed as of the Valuation Time.
Variable Account Value: The value equal to the number of Accumulation Units
multiplied by the number of units in the Division that the Policyowner owns.
We or Us: Refers to MassMutual.
You or Yours: Refers to the Policyowner.
5
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I. SUMMARY OF THE POLICY
This summary is intended to provide a brief overview of the more significant
aspects of the Policy. Further detail is provided elsewhere in this Prospectus.
Additionally, You should consult Your Policy for a further understanding of its
terms and conditions.
The Policy
The Policy is a life insurance contract providing a death benefit, cash values,
surrender rights, policy loan privileges, and other features traditionally
associated with life insurance. It provides that the Policyowner may, subject to
certain limitations, make premium payments in any amount and at any frequency
while the Insured is living.
The Policy is a "flexible premium" policy because, unlike traditional insurance
policies, there is no fixed schedule of premium payments. Although the
Policyowner may establish a schedule of premium payments ("Planned Premium
Payments"), failure to make a Planned Premium Payment will not necessarily cause
a Policy to lapse nor will making the Planned Premium payments guarantee that a
Policy will remain in force. Thus, a Policyowner may, but is not required to,
pay additional premiums after making an initial premium payment. This
flexibility permits a Policyowner to provide for changing insurance needs within
a single insurance policy.
The Policy is "variable" because, unlike the fixed benefits of traditional
insurance policies, the Death Benefits may, and the Cash Surrender Value most
likely will, vary in relation to the investment experience of the Divisions to
which a Policyowner has allocated Net Premiums. Additionally, the GPA's
crediting rate, although it will not go below 3%, may be adjusted periodically.
The Policy will enter a grace period when the Account Value less any Policy Debt
is insufficient to pay the Monthly Charges on a particular Monthly Calculation
Date. At the beginning of the grace period, We will mail You a notice stating
the amount of premium needed to cover the difference between the Account Value,
less any Policy Debt, and the Monthly Charges. During the grace period, the
Policy remains in force. The grace period ends the later of 61 days after the
Monthly Calculation Date on which the Account Value, less any Policy Debt is
insufficient to pay the Monthly Charges, or 30 days after We mail the notice. If
the required premium is not paid within the grace period, the Policy will lapse
and terminate without value.
The Separate Account And The Guaranteed Principal Account
The Policyowner may allocate Net Premiums to one or more Divisions of the
Separate Account and to the GPA. Each Division invests in shares of a designated
fund. Currently these funds include the following MML Trust and Oppenheimer
Trust Funds:
MML Trust Oppenheimer Trust
- --------- -----------------
MML Equity Fund Oppenheimer Aggressive Growth
MML Money Market Fund Fund*
MML Managed Bond Fund Oppenheimer Growth Fund
MML Blend Fund Oppenheimer Global Securities
Fund
Oppenheimer Strategic Bond Fund
*Note: Prior to May 1, 1998, this Fund was known as the Oppenheimer Capital
Appreciation Fund.
Although a Policy has no guaranteed minimum Cash Surrender Value for amounts
invested in the Separate Account, the Death Benefit will not be less than the
Selected Face Amount so long as the Policy has not lapsed. Furthermore, the
Policy will not lapse while there is sufficient value to cover applicable
Monthly Charges.
Availability Of The Policy
The Policy may be issued on an Insured up to [or through] Issue Age 80. The
minimum Selected Face Amount is $50,000. Before issuing the Policy, MassMutual
will require satisfactory evidence of insurability, which may include a medical
examination.
The Death Benefit
While the Policy remains in force, MassMutual will pay the Death Benefit of the
Policy to the Beneficiary upon receipt of due proof of the death of the Insured.
The Death Benefit will be the amount of the benefit provided under the Death
Benefit Option then in effect, reduced by any Policy Debt and any unpaid Monthly
Charges.
The Policy provides a choice of two Death Benefit Options. The benefit provided
under Option 1 is the Policy's Selected Face Amount or, if greater, the Policy's
Minimum Face Amount. The benefit provided under Option 2 is the sum of the
Policy's Selected Face Amount and the Account Value or, if greater, the Policy's
Minimum Face Amount.
In order for the Policy to qualify as life insurance under current federal tax
laws, the Policy must have a Minimum Face Amount. The Minimum Face Amount is
equal to an applicable percentage of the Account Value. The applicable
percentages depend on the sex, smoking classification, and Attained Age of the
Insured, and are set forth in the Policy.
Flexibility To Adjust The Amount Of Death Benefit
Subject to certain restrictions, the Policyowner may request a change in the
Death Benefit Option or an increase or decrease in the Selected Face Amount of
the Policy.
After the first Policy Year, the Policyowner may change the
6
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Death Benefit Option. Changes from Option 2 to Option 1 may be made without
submitting satisfactory evidence of insurability. Changes from Option 1 to
Option 2, however, will require evidence of insurability satisfactory to
MassMutual. To cover the cost of processing this type of change, a $75 charge is
deducted on a pro rata basis among the Divisions and the GPA. (MassMutual
currently does not charge the $75 fee for this change, but it reserves the right
to do so.) The Policyowner may not change from Option 1 to Option 2 after
reaching Attained Age 80.
Additional evidence of insurability is required for an increase in the Selected
Face Amount. An increase cannot be for less than $15,000 and will not be
permitted after the Insured reaches an Attained Age of 80. To cover the cost of
processing a requested increase, a $75 charge is deducted, on a pro rata basis
among the Divisions of the Separate Account and the GPA, from the Account Value.
Decreases in coverage are allowed after the first Policy Year, although
MassMutual believes such decreases are not in the best interest of a
Policyowner. A decrease will not be allowed if the Death Benefit Option amount
would fall below $50,000. A decrease may result in the imposition of surrender
charges applied on a pro-rata basis among the Divisions of the Separate Account
and the GPA on the effective date of the decrease.
Premium Features
MassMutual requires You to pay a minimum initial premium. Thereafter, subject to
certain limitations, You may pay premiums at any time and in any amount.
When applying for a Policy, You select a planned annual premium and a payment
frequency. According to this schedule, MassMutual will send You a premium
notice. You may change the Planned Premium and payment frequency by sending a
written notice requesting such change to our Home Office.
There is no penalty if the Planned Premium is not paid, nor does payment of the
Planned Premium guarantee coverage for any period of time. Instead, the duration
of the Policy depends upon the Policy's Account Value. Even if Planned Premiums
are paid, the Policy will lapse whenever the Account Value less Policy Debt
becomes insufficient to pay current Monthly Charges and a grace period expires
without sufficient payment.
Transfers
By written request, You may transfer all or part of the value of Your
Accumulation Units in a Division to one or more other Divisions of the Separate
Account or to the GPA. Although under current practice we impose no limitations
on your right to make transfers, we reserve the right to limit transfers to not
more than one every 90 days to comply with Section 404(c) of ERISA. Any
limitation would not apply to a transfer of the entire Variable Account Value to
the GPA and to automated transfers in connection with any program we have put in
place.
Transfers of values from the GPA to the Separate Account are limited to one per
Policy Year. Any transfer from the GPA to a Division of the Separate Account
cannot exceed 25% of the Fixed Account Value (less any Policy Debt) at the time
of the transfer.
Charges And Deductions
Deductions from Premiums. A Sales Charge and a Premium Tax Charge will be
deducted from each premium payment prior to allocation to the Separate Account
and GPA. The Sales Charge is 2.0% of premium payments and the Premium Tax Charge
is 2.0% of premium payments.
The Premium Tax Charge is intended to compensate MassMutual for taxes imposed by
various states and local jurisdictions on MassMutual's receipt of premiums from
Policyowners. Premium taxes vary from state to state, and, in some instances,
among localities; the range of premium taxes is .75% to 4.0%. The 2.0% rate
approximates the average tax rate expected to be paid on premiums from all
states. The Premium Tax Charge may be higher or lower than the actual premium
tax imposed by the jurisdiction in which the Policy is written. MassMutual does
not expect to make a profit from this charge. MassMutual currently intends to
waive both charges after Policy Year 20; however, MassMutual reserves the right
not to waive the charge(s), or to reimpose such charge(s) after initially
waiving such charges. During 1997, the aggregate amount of such deductions from
premiums was $229,806 for sales charges and $229,806 for state premium tax
charges.
Monthly Charges. On each Monthly Calculation Date, the Account Value will be
reduced by a Monthly Charge, consisting of an Administrative Charge, a Mortality
Charge and a charge for any additional benefits added by Rider. The
Administrative Charge is currently $6 and it is guaranteed not to exceed $9.
During 1997, the aggregate amount of such charges was $237,690.
The Mortality Charge will be determined by multiplying the "amount at risk under
the Policy" (that is, the Death Benefit, discounted at the monthly equivalent
rate of 3% per year, less the Account Value) by the monthly mortality rate,
which will depend on the sex, rate class and Issue Age of the Insured, the
duration of the Policy, and MassMutual's expectations as to future mortality and
expense experience. The monthly mortality rates will not exceed the guaranteed
maximum monthly mortality rates set forth in the Policy which are based on the
sex, rate class, and Attained Age of the Insured and the "1980 Commissioners
Standard Ordinary Mortality Table." During 1997, the aggregate mortality charges
were $2,337,802.
Surrender Charges. During the first 15 Policy Years and during the first 15
years following any increase in the Selected Face Amount, MassMutual will impose
a Surrender Charge if the Policyowner surrenders the Policy or decreases the
Selected Face Amount under the Policy. The surrender charge has two parts - an
Administrative Surrender Charge and a Sales Load Surrender Charge.
7
<PAGE>
Administrative Surrender Charges. This charge is $5 for each $1,000 of Selected
Face Amount. It remains level for the first five Policy Years, then grades down
to zero over the next five policy years. This charge reimburses MassMutual for
expenses incurred in issuing the Policy (or increase in the Selected Face
Amount), such as processing the applications (including underwriting) and
setting up computer records. It is not designed to produce a profit.
Sales Load Surrender Charge. This charge is equal to 26% of the premiums paid up
to the Surrender Charge Band, plus 4% of premiums paid in excess of the
Surrender Charge Band but less than three times the Surrender Charge Band. The
Surrender Charge Band is set forth in the Policy and is an amount generally
calculated on the basis of the Selected Face Amount and varies by the age and
sex of the Insured at the time of purchase.
Example of Surrender Charge Bands per $1,000
Age 25 Age 40 Age 55
------ ------ ------
$6.26 $9.91 $28.49
The Sales Load Surrender Charge remains level for the first 10 years, then
grades down to zero over the next five Policy Years in accordance with the
percentages set forth in the Policy.
Mortality and Expense Risk Charge. MassMutual assesses a charge against each of
the Divisions for the mortality and expense risk it assumes. Currently, the
charge is equal, on an annual basis, to 0.55% of the daily net asset value of
the Separate Account. MassMutual reserves the right to increase the charge up to
a maximum effective annual rate of 0.90%. This charge is not deducted from the
GPA. The aggregate amount of such charges, which are paid quarterly, against the
Separate Account divisions in 1997 was $57,804.
Other Charges. If the Policyowner requests and MassMutual accepts an increase in
Selected Face Amount or a change in the Death Benefit Option from Option 1 to
Option 2, a charge of $75 will be deducted from the Account Value on the
effective date of the increase or option change to cover processing costs.
(MassMutual currently does not charge a $75 fee for a change in the Death
Benefit Option, but it reserves the right to do so.)
Policy Loan Privilege
After the first Policy Year (or sooner if required by law), the Policyowner may
at any time borrow from the Policy an amount up to 90% of the Account Value less
any Surrender Charge, reduced by any outstanding Policy Debt.
At time of application, the Policyowner may elect a fixed loan rate of 6% or (in
all jurisdictions except Arkansas) an adjustable loan rate, based on the monthly
average of the corporate yield on seasoned corporate bonds as published by
Moody's Investors Service, Inc.
If interest is not paid when due, it will be added to the outstanding loan
balance. The capitalization of unpaid loan interest may have tax consequences
upon surrender or lapse of the Policy (See Policy Proceeds, Premiums and Loans.)
Policy loans may be repaid at any time while the Insured is living.
Surrender Of The Policy
The Policyowner may at any time fully surrender the Policy and receive its Cash
Surrender Value. The Cash Surrender Value will equal the Account Value less any
applicable Surrender Charge and less any Policy Debt and any unpaid Monthly
Charges. Surrender of the Policy with outstanding Policy Debt may have tax
consequences. (See Policy Proceeds, Premiums and Loans.)
Withdrawal Of Cash Surrender Value
After the first Policy Year, the Policyowner may, subject to certain
restrictions, request a withdrawal of up to 75% of the Policy's Cash Surrender
Value. For each withdrawal, a fee of $25 (or 2% of the amount withdrawn, if
less) is deducted from the amount withdrawn. This fee is guaranteed not to
increase for the duration of the Policy and is intended to compensate MassMutual
for processing associated with the withdrawal. MassMutual does not intend to
make a profit from this fee. The minimum amount of a withdrawal is $100 (before
deducting the withdrawal fee). If Death Benefit Option 1 is in effect,
MassMutual will reduce the Selected Face Amount by the amount of the withdrawal
unless satisfactory evidence of insurability is provided. A surrender charge is
not assessed if a withdrawal is taken. Withdrawal of the Cash Surrender Value
may have tax consequences. (See Policy Proceeds, Premiums and Loans.)
II. INFORMATION ABOUT MASSMUTUAL AND THE SEPARATE ACCOUNT
MassMutual
MassMutual, a mutual life insurance company, was chartered in Massachusetts in
1851. MassMutual's Home Office is located in Springfield, Massachusetts. It is
authorized to transact life, health, and accident business in all fifty states,
District of Columbia, Puerto Rico, and certain provinces of Canada.
As of December 31, 1997, MassMutual had estimated total assets under management
of $152.5 billion and total unconsolidated MassMutual assets in excess of $57.5
billion.
8
<PAGE>
OppenheimerFunds, Inc.
OppenheimerFunds, Inc. ("OFI") is an investment adviser organized under the laws
of Colorado as a corporation; it was initially organized in 1959. It (including
a subsidiary) advises U.S. investment companies with assets aggregating over $75
billion as of December 31, 1997, and with more than 3.5 million shareholder
accounts. OFI is owned by Oppenheimer Acquisition Corporation, a holding company
owned in part by senior management of OFI and ultimately controlled by
MassMutual. OFI serves as investment adviser to the Oppenheimer Trust. OFI is
registered as an investment adviser under the Investment Advisers Act of 1940.
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 Chapter 132G of Chapter 175 of the Massachusetts General Laws. The
Separate Account is registered with the Securities and Exchange Commission as a
unit investment trust pursuant to the provisions of the Investment Company Act
of 1940. Registration does not involve supervision of the management or
investment practices 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.
The Separate Account meets the definition of a "Separate Account" under the
federal securities laws.
MassMutual owns the assets in the Separate Account and is required to maintain
sufficient assets in the Separate Account to meet anticipated obligations of the
Policies funded by the Separate Account. The Separate Account is divided into
subaccounts called Divisions. The income, gains, or losses, realized or
unrealized, of each Division are credited to or charged against the assets held
in the Division without regard to the other income, gains, or losses of
MassMutual. Assets in the Separate Account attributable to the reserves and
other liabilities under the Policies are not chargeable with liabilities arising
from any other business conducted by MassMutual. MassMutual may transfer to its
General Account, however, any assets which exceed anticipated obligations of the
Separate Account. All obligations arising under the Policy are general corporate
obligations of MassMutual. MassMutual may accumulate in the Separate Account
proceeds from various Policy charges and investment results applicable to those
assets.
The Separate Account is currently divided into eight Divisions. Each Division
invests in a corresponding series of shares of a designated Fund of either MML
Trust or Oppenheimer Trust. MassMutual may in the future establish additional
divisions within the Separate Account, which may invest in other investment
funds, including those of MML Trust or Oppenheimer Trust, or in any other
investment fund MassMutual deems to be appropriate.
MML Trust And Oppenheimer Trust
The MML Trust is a no-load, open-end, management investment company that is
registered under the Investment Company Act of 1940. The Oppenheimer Trust is an
open-end, diversified, management investment company registered under the
Investment Company Act of 1940.
MassMutual established the MML Trust for the purpose of providing a vehicle for
the investment of assets of various separate investment accounts, including the
Separate Account, established by MassMutual and other life insurance company
subsidiaries of MassMutual. Similarly, OFI established the Oppenheimer Trust to
provide an investment vehicle for the separate investment accounts of variable
life and variable annuity contracts offered by companies such as MassMutual.
Shares of the MML Trust and the Oppenheimer Trust are not offered to the general
public.
The assets of certain variable annuity separate accounts for which MassMutual or
an affiliate is the depositor are invested in shares of the MML Trust's Funds.
Because these separate accounts are invested in the same underlying MML Funds,
it is possible that material irreconcilable conflicts could arise between
Policyowners and owners of the variable annuity contracts. Possible conflicts
could arise if: (i) state insurance regulators should disapprove or require
changes in investment policies, investment advisers or principal underwriters or
if MassMutual should be permitted to act contrary to actions approved by holders
of the Policies under rules of the Securities and Exchange Commission; (ii)
adverse tax treatment of the Policies or the variable annuity contracts would
result from utilizing the same underlying 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 Funds. The Board of Trustees of the 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 Trust or MassMutual and determinations whether
or not a material conflict exists will be made by a majority of such
disinterested trustees. If a material irreconcilable conflict exists, MassMutual
will take such action at its own expense as may be required to cause the
Separate Account to be invested solely in shares of mutual funds which offer
their shares exclusively to variable life insurance separate accounts unless, in
certain cases, the holders of both the Policies and the variable annuity
contracts vote not to effect such segregation.
The Oppenheimer Trust was established for use as an investment vehicle by
variable contract separate accounts such as the Separate Account. Accordingly,
it is possible that a material irreconcilable conflict may develop between the
interest of contract owners and other separate accounts investing in the
Oppenheimer Trust. The Board of Trustees of the Oppenheimer Trust (the
"Trustees") will monitor the
9
<PAGE>
Oppenheimer Funds for the existence of any such conflicts. If it is determined
that a conflict exists, the Trustees 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 and reinvesting such assets in a
different investment medium, including (but not limited to) another Oppenheimer
Fund; (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.
MassMutual purchases the shares of each Fund for the corresponding Division at
net asset value. All dividends and capital gain distributions received from a
Fund are automatically reinvested in such Fund at net asset value, unless
MassMutual, on behalf of the Separate Account, elects otherwise. Shares of the
MML Trust and the Oppenheimer Trust will be redeemed by MassMutual at their net
asset value to the extent necessary to make payments under the Policies.
The following is a summary of the investment objectives of each Fund. Please
note that there can be no assurance that any Fund will achieve its objectives.
More detailed information concerning these investment objectives is contained in
the accompanying prospectuses of the MML Trust and Oppenheimer Trust, including
information on the risks associated with the investments and investment
techniques of each of the Funds.
THE PROSPECTUSES FOR MML TRUST AND OPPENHEIMER TRUST ACCOMPANYING THIS
PROSPECTUS SHOULD BE READ CAREFULLY BEFORE INVESTING.
MML Equity Fund
MML Equity Fund seeks to achieve a superior total rate of return over an
extended period of time from both capital appreciation and current income. A
secondary 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.
MML Money Market Fund
MML Money Market Fund seeks to achieve high current income, while preserving
capital, and liquidity. This Fund invests 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.
MML Managed Bond Fund
MML Managed Bond Fund seeks to achieve as high a total rate of return on an
annual basis as is considered consistent with the preservation of capital
values. This Fund invests primarily in publicly issued, readily marketable,
fixed income securities of such maturities as MassMutual deems appropriate from
time to time in light of market conditions and prospects.
MML Blend Fund
MML Blend Fund seeks 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 values. This Fund invests in a portfolio of
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.
Oppenheimer Aggressive Growth Fund
Oppenheimer Aggressive Growth Fund seeks to achieve capital appreciation by
investing in "growth type" companies. Prior to May 1, 1998, this Fund was named
Oppenheimer Capital Appreciation Fund.
Oppenheimer Global Securities Fund
Oppenheimer Global Securities Fund seeks long-term capital appreciation by
investing a substantial portion of its assets in securities of foreign issuers,
"growth-type" companies, cyclical industries and special situations, such as
anticipated acquisitions, mergers or other unusual developments, which are
considered to have appreciation possibilities, but which may be considered to be
speculative.
Oppenheimer Growth Fund
Oppenheimer Growth Fund seeks to achieve capital appreciation by investing in
securities of well-known established companies.
Oppenheimer Strategic Bond Fund
Oppenheimer Strategic Bond Fund seeks a high level of current income principally
derived from interest on debt securities and seeks to enhance such income by
writing covered call options on debt securities. The Fund intends to invest
principally in: (i) foreign government and corporate debt securities; (ii) U.S.
Government securities; and (iii) lower-
10
<PAGE>
rated, high-yield domestic debt securities, commonly known as "junk bonds",
which are subject to a greater risk of loss of principal and nonpayment of
interest than higher-rated securities. Current income is not an objective.
For information concerning the risks associated with this Fund's investments,
please refer to the accompanying prospectus for the Oppenheimer Trust.
The Investment Advisers And Portfolio Managers
MassMutual serves as investment manager of each of the MML Funds pursuant to
investment management agreements. Pursuant to such agreements, MassMutual is
paid a quarterly fee at the annual rate of 0.50% of the first $100,000,000 of
the Fund's average daily net asset value, 0.45% of the next $200,000,000, 0.40%
of the next $200,000,000 and 0.35% of any excess over $500,000,000.
Concert Capital Management, Inc. ("Concert") served as the investment
sub-adviser to MML Equity Fund and the Equity Sector of the MML Blend Fund from
1993-1996. Concert merged with and into David L. Babson & Company, Inc.
("Babson") effective December 31, 1996. Both Concert and Babson are wholly-owned
subsidiaries of Babson Acquisition Corporation, which is a controlled subsidiary
of MassMutual. Thus, effective January 1, 1997, Babson serves as the investment
sub-adviser to MML Equity Fund and the Equity Sector of the MML Blend Fund. Both
MassMutual and Babson are registered investment advisers under the Investment
Advisers Act of 1940.
During 1997, MassMutual earned the following investment management fee from each
of the following funds:
MML Equity Fund .................................................. $8,082,863
MML Money Market Fund ............................................ $ 703,344
MML Managed Bond Fund ............................................ $ 913,026
MML Blend Fund ................................................... $8,933,947
OFI serves as Investment Adviser to the Oppenheimer Funds. OFI receives a
monthly management fee in its capacity as investment adviser to the Oppenheimer
Funds. This fee is computed separately on the net assets of each Fund as of the
close of each business day. The management fee rate for the Aggressive Growth
Fund, the Growth Fund, and the Global Securities Fund is .75% of the first $200
million of net assets, .72% of the next $200 million, .69% of the next $200
million, .66% of the next 200 million and .60% of net assets in excess of $800
million. Strategic Bond Fund's management fee rate is .75% on the first $200
million of net assets, .72% on the next $200 million, .69% on the next $200
million, .66% on the next $200 million, .60% on the next $200 million, and .50%
of net assets in excess of $1 billion.
During 1997, OFI earned the following investment management fee from each of the
following funds:
Oppenheimer Aggressive Growth Fund ............................... $5,324,309
Oppenheimer Growth Fund .......................................... $2,859,202
Oppenheimer Global Securities Fund ............................... $5,615,606
Oppenheimer Strategic Bond Fund .................................. $1,197,613
Citibank N.A., with its home office located at 111 Wall Street, New York, NY
10005, acts as custodian for the MML Trust. Bank of New York, with its home
office located at One Wall Street, New York, NY 10015, acts as custodian for the
Oppenheimer Trust.
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 is the investment sub-adviser to Oppenheimer Investment Grade Bond
Fund and Oppenheimer Value Stock Fund, open-end management investment companies.
Rates of Return. The following tables show the Effective Annual Rates of Return
based on the actual investment performance (after deduction of investment
management fees and direct operating expenses) of the Fund underlying each
Division of the Separate Account. Tables I and II show figures for periods ended
December 31, 1997, while Tables III and IV show annualized figures. These rates
do not reflect the mortality and expense risk charges assessed against the
Separate Account. Also, they do not reflect deductions from premiums or Monthly
Charges assessed against the Account Value of the Policies, nor do they reflect
the Policy's Surrender Charges. (For a discussion of these charges, please see
CHARGES AND DEDUCTIONS). Therefore, these rates are not illustrative of how
actual investment performance will affect the benefits under the Policy (see,
however, Performance Illustration). The rates of return shown are not
necessarily indicative of future performance. These rates of return may be
considered, however, in assessing the competence and performance of MassMutual,
Babson and OFI as investment advisers. An individualized hypothetical
illustration may be available. An individualized hypothetical illustration is a
document that shows how Death Benefits and Cash Surrender Values will develop
based on certain assumptions. The assumptions used are the sex, Issue Age, rate
class and contract state of the applicant, and the Death Benefit Option and
premium frequency proposed by the registered representative or the applicant.
The individualized hypothetical illustrations reflect both current and
guaranteed charges and all basic policy charges are reflected (rider charges may
also be reflected if so requested). These illustrations will also assume certain
interest rates within the limits prescribed by federal and state law. An
applicant or Policyowner may obtain an individualized hypothetical illustration
at no charge by requesting one from his registered representative or from
MassMutual at its Home Office.
11
<PAGE>
TABLE I -- MML FUNDS
EFFECTIVE ANNUAL RATES OF RETURN
- --------------------------------------------------------------------------------
Fund 20 Years 15 Years 10 Years 5 Years 1 Year
- --------------------------------------------------------------------------------
Equity 16.20% 16.19% 16.44% 18.25% 28.59%
- --------------------------------------------------------------------------------
Money Market -- 6.44 5.63 4.47 5.18
- --------------------------------------------------------------------------------
Managed Bond -- 9.73 9.08 7.79 9.91
- --------------------------------------------------------------------------------
Blend -- 13.67* 13.68 13.81 20.89
- --------------------------------------------------------------------------------
*The figures shown are from inception of the MML Blend Fund, which commenced
operations on February 3, 1984.
TABLE II -- OPPENHEIMER FUNDS
EFFECTIVE ANNUAL RATES OF RETURN
- --------------------------------------------------------------------------------
Fund Since Inception 5 Years 1 Year
- --------------------------------------------------------------------------------
Oppenheimer Aggressive Growth** 15.31%* 15.92% 11.67%
- --------------------------------------------------------------------------------
Oppenheimer Global Securities 12.26* 18.81 22.42
- --------------------------------------------------------------------------------
Oppenheimer Growth 15.43* 18.61 26.68
- --------------------------------------------------------------------------------
Oppenheimer Strategic Bond 7.64* -- 8.71
- --------------------------------------------------------------------------------
The Oppenheimer Aggressive Growth** Fund, Oppenheimer Global Securities Fund,
Oppenheimer Growth Fund, and the Oppenheimer Strategic Bond Fund commenced
operations on August 15, 1986, November 12, 1990, April 3, 1985 and May 3, 1993,
respectively.
**Prior to May 1, 1998, this Fund was named Oppenheimer Capital Appreciation
Fund.
TABLE III
MML FUNDS
ANNUALIZED ONE YEAR TOTAL RETURNS
- --------------------------------------------------------------------------------
For the MML Equity MML Money MML Managed MML Blend
Year Ended Fund Market Fund Bond Fund Fund
- --------------------------------------------------------------------------------
1997 28.59% 5.18% 9.91% 20.89%
1996 20.25% 5.01% 3.25% 13.95%
1995 31.13% 5.58% 19.14% 23.28%
1994 4.10% 3.84% (3.76)% 2.48%
1993 9.52% 2.75% 11.81% 9.70%
1992 10.48% 3.48% 7.31% 9.36%
1991 25.56% 6.01% 16.66% 24.00%
1990 (0.51)% 8.12% 8.38% 2.37%
1989 23.04% 9.16% 12.83% 19.96%
1988 16.68% 7.39% 7.13% 13.40%
1987 2.10% 6.49% 2.60% 3.12%
1986 20.15% 6.60% 14.46% 18.30%
1985 30.54% 8.03% 19.94% 24.88%
1984 5.40% 10.39% 11.69% 8.24%*
1983 22.85% 8.97% 7.26% --
1982 25.67% 11.12%* 22.79%* --
1981 6.67% -- -- --
1980 27.62% -- -- --
1979 19.54% -- -- --
1978 3.71% -- -- --
1977 (0.52)% -- -- --
1976 24.77% -- -- --
1975 32.85% -- -- --
1974 (17.61)%* -- -- --
- --------------------------------------------------------------------------------
*The figures shown are from inception of the Funds. The MML Equity Fund received
initial funding September 15, 1971 (performance information prior to 1974 is not
available). The MML Money Market and MML Managed Bond Funds received initial
funding on December 16, 1981. The MML Blend Fund received initial funding on
February 3, 1984.
12
<PAGE>
TABLE IV
OPPENHEIMER FUNDS
ANNUALIZED ONE YEAR TOTAL RETURNS
- --------------------------------------------------------------------------------
Oppenheimer
Oppenheimer Aggressive Oppenheimer
For the Oppenheimer Strategic Growth** Global
Year Ended Growth Fund Bond Fund Fund Securities
- --------------------------------------------------------------------------------
1997 26.68% 8.71% 11.67% 22.42%
1996 25.20% 12.07% 20.16% 17.80%
1995 36.65% 15.33% 32.52% 2.24%
1994 .98% (5.85)% (7.50)% (5.72)%
1993 7.25% 4.25%* 27.32% 70.32%
1992 14.53% -- 15.42% (7.11)%
1991 25.54% -- 54.72% 3.39%
1990 (8.21)% -- (16.32)% 0.40%*
1989 23.59% -- 27.39% --
1988 22.09% -- 13.41% --
1987 3.32% -- 14.34% --
1986 17.76% -- (1.65)%* --
1985 9.50%* -- -- --
- --------------------------------------------------------------------------------
*The figures shown are from inception of the Oppenheimer Funds. The Oppenheimer
Aggressive Growth** Fund, Oppenheimer Global Securities Fund, Oppenheimer Growth
Fund, and the Oppenheimer Strategic Bond Fund commenced operations on August 15,
1986, November 12, 1990, April 3, 1985 and May 3, 1993, respectively.
**Prior to May 1, 1998, this Fund was named Oppenheimer Capital Appreciation
Fund.
13
<PAGE>
Performance Illustration
The following tables show how the actual investment performance of the Funds
would have affected the Death Benefits and Cash Surrender Values of hypothetical
Policies. Each table illustrates a Policy as of the earliest date for which
performance figures are available for the illustrated Fund. Each table assumes
that the illustrated Policy was issued for a Selected Face Amount of $100,000
and Issue Age 35 male, using Death Benefit Option 1, with annual premiums of
$1,200 paid at the beginning of each year and the full Account Value
continuously reinvested in the Division corresponding with the particular Fund
illustrated. One set of figures reflects the current schedule of charges; the
other set of figures reflects guaranteed mortality and expense charges and
current fund level charges.
TABLE V
MML EQUITY FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- -------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1974 $ 1,200 0 $100,000 0 $100,000
1975 2,400 $ 1,181 100,000 $ 1,059 100,000
1976 3,600 2,663 100,000 2,452 100,000
1977 4,800 3,388 100,000 3,121 100,000
1978 6,000 4,297 100,000 3,959 100,000
1979 7,200 6,254 100,000 5,777 100,000
1980 8,400 9,184 100,000 8,486 100,000
1981 9,600 10,612 100,000 9,775 100,000
1982 10,800 14,371 100,000 13,206 100,000
1983 12,000 18,584 100,000 17,022 100,000
1984 13,200 20,187 100,000 18,406 100,000
1985 14,400 27,197 100,000 24,704 100,000
1986 15,600 33,378 100,000 30,194 100,000
1987 16,800 34,575 100,000 31,137 100,000
1988 18,000 40,941 100,000 36,712 100,000
1989 19,200 50,844 115,417 45,436 103,140
1990 20,400 50,785 112,235 45,253 100,009
1991 21,600 64,023 137,648 56,870 122,270
1992 22,800 70,700 147,763 62,553 130,737
1993 24,000 77,263 157,616 68,047 138,816
1994 25,200 80,191 159,581 70,218 139,734
1995 26,400 104,736 203,188 91,188 176,904
1996 27,600 124,958 236,171 108,161 204,425
1997 28,800 159,036 294,217 136,858 253,187
- -------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
TABLE VI
MML MONEY MARKET FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ---------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1982 $ 1,200 $ 170 $100,000 $ 115 $100,000
1983 2,400 1,096 100,000 982 100,000
1984 3,600 2,146 100,000 1,965 100,000
1985 4,800 3,209 100,000 2,955 100,000
1986 6,000 4,255 100,000 3,922 100,000
1987 7,200 5,421 100,000 5,000 100,000
1988 8,400 6,695 100,000 6,166 100,000
1989 9,600 8,163 100,000 7,501 100,000
1990 10,800 9,617 100,000 8,807 100,000
1991 12,000 10,910 100,000 9,949 100,000
1992 13,200 11,864 100,000 10,760 100,000
1993 14,400 12,719 100,000 11,468 100,000
1994 15,600 13,714 100,000 12,291 100,000
1995 16,800 14,964 100,000 13,330 100,000
1996 18,000 16,151 100,000 14,295 100,000
1997 19,200 17,271 100,000 15,176 100,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE VII
MML BLEND FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ---------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1984 $ 1,200 $ 142 $100,000 $ 87 $100,000
1985 2,400 1,364 100,000 1,237 100,000
1986 3,600 2,688 100,000 2,480 100,000
1987 4,800 3,575 100,000 3,302 100,000
1988 6,000 5,007 100,000 4,632 100,000
1989 7,200 7,130 100,000 6,604 100,000
1990 8,400 8,008 100,000 7,470 100,000
1991 9,600 11,107 100,000 10,244 100,000
1992 10,800 12,954 100,000 11,905 100,000
1993 12,000 14,971 100,000 13,706 100,000
1994 13,200 15,907 100,000 14,489 100,000
1995 14,400 10,370 100,000 18,474 100,000
1996 15,600 23,834 100,000 21,517 100,000
1997 16,800 29,469 100,000 26,486 100,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
TABLE VIII
MML MANAGED BOND FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ---------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1982 $ 1,200 $ 285 $100,000 $ 226 $100,000
1983 2,400 1,186 100,000 1,069 100,000
1984 3,600 2,283 100,000 2,097 100,000
1985 4,800 3,840 100,000 3,554 100,000
1986 6,000 5,366 100,000 4,972 100,000
1987 7,200 6,327 100,000 5,854 100,000
1988 8,400 7,646 100,000 7,059 100,000
1989 9,600 9,536 100,000 8,784 100,000
1990 10,800 11,129 100,000 10,216 100,000
1991 12,000 13,834 100,000 12,654 100,000
1992 13,200 15,465 100,000 14,076 100,000
1993 14,400 17,923 100,000 16,235 100,000
1994 15,600 17,686 100,000 15,930 100,000
1995 16,800 21,694 100,000 19,444 100,000
1996 18,000 22,841 100,000 20,360 100,000
1997 19,200 25,447 100,000 22,550 100,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE IX
OPPENHEIMER GROWTH FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ---------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1986 $ 1,200 $ 235 $100,000 $ 178 $100,000
1987 2,400 1,055 100,000 944 100,000
1988 3,600 2,432 100,000 2,237 100,000
1989 4,800 4,171 100,000 3,866 100,000
1990 6,000 4,402 100,000 4,064 100,000
1991 7,200 6,749 100,000 6,248 100,000
1992 8,400 8,718 100,000 8,059 100,000
1993 9,600 10,174 100,000 9,377 100,000
1994 10,800 10,964 100,000 10,064 100,000
1995 12,000 16,090 100,000 14,732 100,000
1996 13,200 20,974 100,000 19,128 100,000
1997 14,400 27,373 100,000 24,867 100,000
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
TABLE X
OPPENHEIMER AGGRESSIVE GROWTH* FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ----------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1987 $ 1,200 $ 202 $100,000 $ 145 $100,000
1988 2,400 1,216 100,000 1,097 100,000
1989 3,600 2,785 100,000 2,573 100,000
1990 4,800 2,791 100,000 2,562 100,000
1991 6,000 6,004 100,000 5,572 100,000
1992 7,200 7,972 100,000 7,397 100,000
1993 8,400 11,345 100,000 10,516 100,000
1994 9,600 11,094 100,000 10,239 100,000
1995 10,800 15,833 100,000 14,579 100,000
1996 12,000 19,920 100,000 18,280 100,000
1997 13,200 22,917 100,000 20,941 100,000
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Note: Prior to May 1, 1998, this fund was named the Oppenheimer Capital
Appreciation Fund.
TABLE XI
OPPENHEIMER GLOBAL SECURITIES FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ----------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1990 $ 1,200 $ 65 $100,000 $ 13 $100,000
1991 2,400 881 100,000 776 100,000
1992 3,600 1,448 100,000 1,301 100,000
1993 4,800 4,471 100,000 4,146 100,000
1994 6,000 4,832 100,000 4,464 100,000
1995 7,200 5,756 100,000 5,313 100,000
1996 8,400 7,823 100,000 7,218 100,000
1997 9,600 10,631 100,000 9,795 100,000
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE XII
OPPENHEIMER STRATEGIC BOND FUND
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Using Guaranteed Mortality and
Using Current Schedule of Charges Expense Charges and Current Fund
Level Charges
- ----------------------------------------------------------------------------------------------------------------------------
Cash Cash
Total Annual Surrender Death Surrender Death
Calendar Year Premiums Value Benefit Value Benefit
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1993 $ 1,200 $ 103 $100,000 $ 50 $100,000
1994 2,400 751 100,000 652 100,000
1995 3,600 1,891 100,000 1,721 100,000
1996 4,800 3,082 100,000 2,833 100,000
1997 6,000 4,222 100,000 3,889 100,000
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
These illustrations are not indicative of future performance. They assume the
Policies were issued based on full underwriting and that there have been no
increases or decreases in Selected Face Amounts, no Policy loans and no
transaction charges incurred. Further, they assume that Death Benefit Option 1
was selected. The Cash Surrender Values shown reflect all Deductions from
Premiums, Charges, Surrender Charges, and Mortality and Expense Risk Charges.
Illustrations of Death Benefits, Cash Surrender Values and Accumulated Premiums
based on assumed hypothetical gross annual investment returns of 0%, 6% and 12%
are shown in APPENDIX A. APPENDIX A also describes, in more detail, the
assumptions underlying these illustrations.
III. DETAILED INFORMATION ABOUT THE POLICY
Availability Of Policy
Individuals wishing to purchase a Policy must send a completed application to
MassMutual's Home Office. Under our current rules, the minimum Selected Face
Amount of a Policy is $50,000. The Policy can be issued for Insureds with Issue
Ages 0 through 80. Before issuing a Policy, however, MassMutual will require
satisfactory evidence of insurability, which may include a medical examination.
The Policy is available to Policyowners who are purchasing a Policy in
connection with employee benefit plans which qualify for tax benefits under the
Internal Revenue Code (the "qualified market") and other Policyowners (the
"non-qualified market").
Unisex Policies
Policies issued in states requiring "unisex" policies (currently Montana;
MassMutual has retained "unisex" rates in Massachusetts where they were
previously required) provide for policy values which do not vary by the sex of
the Insured. In addition, Policies issued in conjunction with employee benefit
plans provide for policy values which do not vary by the sex of the insured.
Thus, references in this Prospectus to sex-distinct policy values which vary by
the sex of the Insured are not applicable to Policies issued in Montana or
Massachusetts, or issued in conjunction with employee benefit plans.
Illustrations showing the effect of these unisex rates on premiums, Cash
Surrender Values, and Death Benefits are available from MassMutual on request.
Death Benefit
As long as the Policy remains in force, MassMutual will, upon due proof of the
Insured's death, pay the Death Benefit of the Policy to the named Beneficiary.
Although MassMutual will normally pay the Death Benefit within seven days of
receiving satisfactory proof of the Insured's death, the Company may delay
payments under certain circumstances. All or part of the Death Benefit can be
paid in cash or under one or more of the payment options set forth in the
Policy.
The Death Benefit is the amount of the benefit provided under Death Benefit
Option 1 or Death Benefit Option 2, whichever is in effect on the date of the
Insured's death, less any outstanding Policy Debt and less any unpaid Monthly
Deduction.
Death Benefit Options. The Policyowner may choose one of two Death Benefit
Options: Option 1 (a level amount option) and Option 2 (a variable amount
option). The Policyowner designates the Death Benefit Option in the application
and may subsequently change the option subject to certain restrictions described
in CHANGES IN THE DEATH BENEFIT OPTION.
Options 1 and 2 provide the following benefits:
Option 1 - Under Option 1, the Account Value is included in the Selected Face
Amount. The benefit provided under Option 1 is the greater of: (a) the Selected
Face Amount on the date of death; and (b) the Minimum Face Amount on the date of
death of the Insured.
Option 2 - Under Option 2, the Account Value is not included in the Selected
Face Amount. The benefit provided under Option 2 is the greater of: (a) the
Selected Face Amount plus the Account Value on the date of death; and (b) the
Minimum Face Amount on the date of death of the Insured.
Minimum Face Amount. In order to qualify as life insurance under current federal
tax laws, the Policy has a Minimum Face Amount. The Minimum Face Amount is equal
to an applicable percentage of the Account Value. This applicable percentage
depends on the sex, smoking classification and Attained Age of the Insured. The
applicable percentages are set forth in the Policy.
The following examples illustrate how changes in the Account Value may affect
the Death Benefits under Options 1 and 2.
Example I
Assume that the Policyowner has selected Option 1 with a Selected Face Amount of
$100,000 and that the Account Value equals $5,000. The Death Benefit in this
case is $100,000. If the Account Value increases to $8,000, the Death Benefit
remains at $100,000. If the Account Value decreases to $3,000, the Death Benefit
still remains at $100,000.
Under Option 1, the Death Benefit will remain at the Selected Face Amount, in
this example $100,000, until the applicable percentage of the Account Value
exceeds the Selected Face Amount.
18
<PAGE>
Example II
Assume the Policyowner has selected Option 2 with a Selected Face Amount of
$100,000 and the Account Value is equal to $5,000. The Death Benefit in this
case is $105,000 (Selected Face Amount plus Account Value). If the Account Value
increases to $8,000, the Death Benefit will increase to $108,000. If the Account
Value decreases to $3,000, the Death Benefit will decrease to $103,000.
Under Option 2, the Death Benefit will be the Selected Face Amount plus the
Account Value (only if greater than $0.00), until the Minimum Face Amount
exceeds the sum of the Selected Face Amount plus the Account Value.
If the Policyowner seeks to have premium payments and favorable investment
performance reflected partly in the form of an increasing Death Benefit, the
Policyowner should choose Option 2. If a Policyowner is satisfied with the
amount of the Insured's existing insurance coverage and instead seeks to have
premium payments and investment performance reflected to the maximum extent in
the Policy's Account Value, the Policyowner should choose Option 1.
Changes in Death Benefit Option. After the first Policy Year, the Policyowner
may change the Death Benefit Option. A change from Option 2 to Option 1 may be
made without submitting satisfactory evidence of insurability. A change from
Option 1 to Option 2, however, will require evidence of insurability
satisfactory to MassMutual. In addition, a charge of $75 will be deducted from
the Account Value on the effective date of the change. (MassMutual currently
does not charge the $75 fee for this change, but it reserves the right to do
so.) This charge will be deducted from the Division(s) and the GPA in proportion
to the non-loaned values in each Division(s) and the GPA. The Policyowner may
not change from Option 1 to Option 2 after reaching Attained Age 80. The
effective date of any change will be the Monthly Calculation Date on or which
next follows the date MassMutual approves the change.
A change in the Death Benefit Option will not in and of itself result in an
immediate change in the amount of a Policy's Death Benefit. For a change from
Option 2 to Option 1, the Selected Face Amount is increased by the amount of the
Account Value on the effective date of the change. For a change from Option 1 to
Option 2, the Selected Face Amount will be decreased by the amount of Account
Value on the effective date of the change. This change will not be permitted if
it would reduce the Selected Face Amount below $50,000.
An increase or decrease in Selected Face Amount resulting from a change in the
Death Benefit Option will affect the Monthly Charges, as the monthly mortality
charge depends on the Selected Face Amount. The charge for certain additional
benefits may also be affected. The Surrender Charge, however, will not be
affected by an increase or decrease in Selected Face Amount resulting from a
change in the Death Benefit Option.
Changes in Selected Face Amount. The Policyowner may request an increase or
decrease in the Selected Face Amount subject to the approval of MassMutual. Any
request for an increase or decrease must be submitted in writing to MassMutual's
Home Office. It will become effective on the Monthly Calculation Date on or
which next follows MassMutual's acceptance of the request.
Increases in Selected Face Amount. For an increase in the Selected Face Amount,
MassMutual requires satisfactory evidence of insurability. An increase may not
be less than $15,000, and no increase will be permitted after Attained Age 80.
To cover the cost of processing the request, a charge of $75 will be deducted
from the Account Value on the effective date of the increase in the Selected
Face Amount. The charge will be deducted from the Divisions of the Separate
Account and the GPA in proportion to the non-loaned value in each Division(s)
and the GPA.
Decreases in Selected Face Amount. Decreases in coverage are allowed after the
first Policy Year, although MassMutual believes such decreases generally are not
in the best interests of a Policyowner. A decrease will not generally be
permitted if the Death Benefit Option amount would fall below $50,000. No
processing charge is applied to decreases in coverage.
A decrease may result in the imposition of Surrender Charges. (For a discussion
of the Surrender Charges associated with a decrease, see Surrender Charges).
Any Surrender Charge applicable to a decrease will be deducted from the
Division(s) of the Separate Account and the GPA in proportion to the non-loaned
values in each.
For purpose of determining Surrender Charges and mortality charges, a decrease
will reduce the Selected Face Amount in the following order: (a) the Selected
Face Amount provided by the most recent increase; (b) the Selected Face Amounts
provided by the next most recent increases successively; and finally (c) the
initial Selected Face Amount.
A decrease may result in the Policy becoming a "modified endowment contract"
(See Policy Proceeds, Premiums and Loans.)
Premiums
Subject to certain limitations, the Policyowner has flexibility in determining
the frequency and amount of premium payments.
Premium Flexibility
Unlike traditional insurance policies, this Policy frees the Policyowner from
the requirement that premiums be paid in accordance with a rigid and inflexible
premium schedule. Instead, MassMutual requires a Policyowner to pay a minimum
initial premium at the time of application or at any time before delivery of the
Policy. After the first premium has been paid, subject to certain limitations,
premiums may be paid in any amount and at any interval.
19
<PAGE>
The minimum initial premium depends on the planned frequency of premium
payments, and the Issue Age, sex, and rating class of the Insured, as well as
the initial Death Benefit Option and Selected Face Amount of the Policy.
Planned Annual Premium
When applying for a Policy, the Policyowner will select a planned annual premium
and payment frequency (annual, semiannual, quarterly, or monthly). The planned
annual premium is shown on the schedule page of the Policy. MassMutual will send
premium notices for the planned premium according to the amount and frequency
selected. The Policyowner may change the amount and frequency of planned
premiums at any time by sending written notice to MassMutual's Home Office.
A Policyowner may elect to pay premiums by means of a pre-authorized check
procedure called MassMutual Monthly ("Triple M"). Under Triple M, premium
payments are deducted automatically on a monthly basis from a designated bank
account. A Policyowner does not receive a "bill" for these payments, and
confirmation of payments is provided in the Policy's quarterly statement.
There is no penalty if the planned 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 premiums are
paid, the Policy terminates when the Account Value becomes insufficient to pay
the Monthly Charges and the grace period expires without sufficient payment.
Premium Limitations
The minimum premium payment is $10. The maximum premium which may be paid in any
Policy Year without evidence of insurability is the greater of: (a) the premium
which will not increase the net amount at risk under the Policy; (b) twice the
Policy's basic premium plus $100; (c) the annual premium paid in the preceding
Policy Year; and (d) the minimum annual premium under a Death Benefit Guarantee
Rider, if part of the Policy. Premium payments should be sent either to
MassMutual's Home Office or to the address indicated on the billing notice.
Allocation of Net Premium Payments. The Net Premium equals the premium paid less
the Premium Expense Charge. (See, Deductions from Premiums.) In the Application,
the Policyowner indicates how Net Premiums are to be allocated among the
Divisions and the GPA. The allocation percentages must be in whole numbers and
the sum of the allocation percentages must equal 100%. During the Free Look
Provision, New Premiums are allocated as requested by the Policyowner. (See,
Free Look Provision.)
The allocation percentages may be changed by the Policyowner without charge at
any time by providing written notice to MassMutual's Home Office.
Transfers
By written request, the Policyowner may transfer all or part of the Variable
Value of a Division of the Separate Account to any other Division or to the GPA.
Although MassMutual currently imposes no limitation of the right of the Insured
to make transfers, we reserve the right to limit transfers to not more than one
every 90 days in connection with compliance with Section 404(c) of ERISA. Any
limitation would not apply to a transfer of all funds in the Separate Account to
the GPA and to automated transfers made in connection with any program
MassMutual has in place.
Transfers of values from the GPA to the Separate Account are limited to one each
Policy Year. Any transfer from the GPA cannot exceed 25% of the Fixed Account
Value (less any Policy Debt) at the time of the transfer.
Any transfer is effective on the Valuation Date that we receive a written
request in good order at our Home Office. There are no charges for transfers.
Transfer percentages must be in whole numbers and the amount of the "to" funds
must equal 100% or total dollars.
Dollar Cost Averaging
The Policyowner may specify a specific dollar amount to be periodically
transferred from any Division of the Separate Account to any combination of
Divisions and the GPA. Once elected, these transfers occur automatically. The
Policyowner will specify the specific dollar amounts to be transferred and the
Division to transfer money from, the Division(s) and/or GPA to transfer money
to, the date on which transfers will be made (subject to MassMutual rules), the
frequency of transfers, which may be either monthly, quarterly, semiannually or
annually, and the amount of time that such dollar cost averaging will continue.
The minimum allowable transfer to any Division or the GPA is $50. This process
is called Dollar Cost Averaging. Dollar Cost Averaging transfers are not
available for transfers from the GPA, but these transfers may be made into the
GPA. To elect Dollar Cost Averaging transfers, the Account Value in the Division
from which transfers will be made must be at least $5,000.
The main objective of Dollar Cost Averaging is to shield the Policyowner's
investment from short-term price fluctuations. Since the same dollar amount is
transferred to a Division with each transfer, more units are purchased in a
Division if the value per unit is low and fewer units are purchased if the value
per unit is high. Therefore, a lower than average cost per unit may 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.
MassMutual will make all Dollar Cost Averaging transfers either on the day of
each calendar month specified by the Policyowner, or on the next Business Day.
The Policyowner may specify any day of the month up through the 28th day. In
order to process a Dollar Cost Averaging transfer, MassMutual must have received
a request in writing no
20
<PAGE>
later than one week prior to the date Dollar Cost Averaging transfers are to
commence.
The Dollar Cost Averaging option can be started, changed or canceled at any
time; however, we must be given seven business days notice to change any
transfer arrangement. 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, and no more automated transfers will be processed.
Dollar Cost Averaging transfers are not subject to any transfer charges or any
limitations on the number of transfers in a Policy Year.
Policy Lapse And Reinstatement
Policy Lapse
This Policy does not lapse for failure to pay premiums since payments, other
than the initial premium, are not specifically required. Rather, if the Account
Value less any Policy Debt is not enough to cover the Monthly Charges on a
Monthly Calculation Date, the Policy will enter a 61-day grace period.
At the beginning of the grace period, MassMutual will mail a notice, to the
Policyowner's last known address, stating the amount of premium needed to cover
the shortfall in Account Value. During the grace period, the Policy remains in
force. If the required premium is not paid within 61 days after the Monthly
Calculation Date (or, if later, within 30 days after we mail the written
notice), the Policy terminates without value.
Reinstatement Option
For a period of five years after a Policy terminates, the Policyowner can
request that We reinstate the Policy during the lifetime of the Insured. The
Policy cannot be reinstated if it has been surrendered for its Cash Surrender
Value. Please note that a termination or reinstatement may cause the Policy to
become a modified endowment contract. (See, Modified Endowment Contracts.)
Before We will reinstate the Policy, We must receive the following:
(a) Evidence of insurability satisfactory to MassMutual;
(b) A premium payment at least equal to the amount necessary to produce an
Account Value equal to three times the Monthly Charges on the Monthly
Calculation Date on or next following the date of reinstatement; and
(c) Where applicable, a signed acknowledgement that the Policy has become a
modified endowment contract.
If We do reinstate the Policy, the Selected Face Amount for the reinstated
Policy will be the same as it would have been if the Policy had not terminated.
Charges And Deductions
Charges will be deducted in connection with the Policy to compensate MassMutual
for: (a) providing the insurance benefits under the Policy (including any
riders); (b) administering the Policy; (c) assuming certain risks in connection
with the Policy (including any riders); and (d) expenses incurred in
distributing the Policy.
Deductions from Premiums
MassMutual deducts a Sales Charge and a Premium Tax Charge from each Premium
Payment. The total of these charges is called the Premium Expense Charge. The
amount remaining after MassMutual has deducted the Premium Expense Charge is
referred to as the Net Premium. The Net Premium is allocated to the Division(s)
and the GPA according to the allocation instructions of the Policyowner.
Sales Charge. A Sales Charge of 2.0% of each premium payment made will be
deducted to partially compensate MassMutual for the expenses relating to the
distribution of the Policy, including commissions, advertising, and the printing
of the prospectuses and sales literature. MassMutual currently intends to waive
this charge after Policy Year 20; however, MassMutual reserves the right not to
waive the charge, or to reimpose it once it has been waived.
Premium Tax Charge. A Premium Tax Charge of 2.0% of each premium payment will be
deducted to pay applicable state and local premium taxes. The Premium Tax Charge
is intended to compensate MassMutual for taxes imposed by various states and
local jurisdictions on MassMutual's receipt of premiums from Policyowners.
Premium taxes vary from state to state, and, in some instances, among
localities. The 2.0% rate approximates the average tax rate expected to be paid
on premiums from all states. The Premium Tax Charge may be higher or lower than
the actual premium tax imposed by the jurisdiction in which the contract is
written. MassMutual does not expect to make a profit from this charge.
MassMutual currently intends to waive this charge after Policy Year 20; however,
MassMutual reserves the right not to waive the charge, or to reimpose it once it
has been waived.
Monthly Charges
Charges will be deducted from the Account Value on each Monthly Calculation
Date. The Monthly Charge consists of: (a) an administrative charge; (b) a
mortality charge; and (c) a rider charge for any additional benefits provided by
rider. The Monthly Charges will be deducted from the Division(s) of the Separate
Account and the GPA in proportion to the non-loaned values in the Division(s)
and the GPA.
Administrative Charge. This monthly charge is currently $6. This charge
reimburses MassMutual for expenses incurred in administering the Policy, such as
processing claims, maintaining records and communicating with Policyowners. This
charge is not designed to make a profit.
21
<PAGE>
MassMutual reserves the right to change this charge in the future, but
guarantees it will never exceed $9 per month.
Mortality Charge. The mortality charge for a Policy is equal to the "amount at
risk" under the Policy, multiplied by the monthly mortality charge rate for that
Policy month. The amount at risk is determined on the first day of the Policy
month and is the amount by which the Death Benefit (discounted at the monthly
equivalent of 3% per year) exceeds the Account Value.
Monthly mortality rates will be based on the sex, Issue Age, and rate class of
the Insured, and the length of time the Policy has been in force. The actual
monthly mortality rates will be based on MassMutual's expectations as to future
mortality and expense experience. They will not, however, be greater than the
guaranteed mortality rates set forth in the Policy. These guaranteed rates are
based on the 1980 Standard Commissioners Standard Ordinary (CSO) Mortality
Tables, and the sex, Attained Age, and rate class of the Insured. For standard
rate classes, these will not exceed the rates contained in the 1980 CSO Tables.
The rate class of an Insured will affect the monthly mortality rates. MassMutual
currently places Insureds into the following three standard rate classes:
Preferred Nonsmoker, Nonsmoker, and Smoker; as well as substandard rate classes
involving a higher mortality risk. In an otherwise identical Policy, the monthly
mortality rate is generally higher for smokers than for nonsmokers and higher
for nonsmokers than for preferred nonsmokers.
Rider Charge. The Monthly Charge will include charges for any additional
benefits provided by Rider.
Daily Charges Against The Separate Account
Mortality and Expense Risk Charge. MassMutual assesses a daily charge against
net asset value of the Separate Account for the mortality and expense risks it
assumes. Currently, the charge is at the rate of 0.55% on an annual basis.
MassMutual reserves the right to increase the charge rate, up to a maximum
equivalent annual rate of 0.90%. This charge is not deducted from the assets in
the GPA.
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 MassMutual collects 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 Taxes. MassMutual does not currently make any charge against
the Separate Account for federal income taxes attributable to them. We may make
such a charge eventually in order to provide for the future federal income tax
liability of the Separate Account.
Investment Management Fee and Other Expenses. Because the Divisions of the
Separate Account purchase shares of either MML Trust or Oppenheimer Trust, the
value of Accumulation Units of the Divisions will reflect the investment
management fee and other expenses incurred by MML Trust and Oppenheimer Trust.
The Prospectuses of MML Trust and Oppenheimer Trust contain additional
information concerning such fees and expenses.
Surrender Charges
General. The Surrender Charge has two parts -- an Administrative Surrender
Charge and a Sales Load Surrender Charge. The Administrative Surrender Charge
will be imposed by MassMutual during the first 10 Policy Years, and during the
first 10 Policy Years following any requested increase in the Selected Face
Amount if the Policyowner surrenders the Policy or decreases the Selected Face
Amount. The Sales Load Surrender Charge will be imposed by MassMutual for the
first 15 Policy Years, and during the first 15 years following any requested
increase in the Selected Face Amount if the Policyowner surrenders or decreases
the Selected Face Amount.
Administrative Surrender Charge. This charge is $5 for each $1,000 of Selected
Face Amount. It remains level for five years, then grades down to zero over the
next five years. This charge reimburses MassMutual for expenses incurred in
issuing the Policy, such as processing the applications (including underwriting)
and setting up computer records. It is not designed to generate a profit.
Sales Load Surrender Charge. This charge is equal to 26% of the premiums paid up
to the Surrender Charge Band, plus 4% of premiums paid in excess of the
Surrender Charge Band but less than three times the Surrender Charge Band. The
Surrender Charge Band is set forth in the Policy and is an amount generally
calculated on the basis of the Selected Face Amount and varies by the age and
sex of the Insured at the time of purchase.
Example of Surrender Charge Bands per $1,000
Age 25 Age 40 Age 55
------ ------ ------
$6.26 $9.91 $28.49
The Sales Load Surrender Charge remains level for the first 10 years, then
grades down to zero over the next five years in accordance with the percentages
set forth in the Policy.
Surrender Charges are calculated separately for the initial Selected Face Amount
and for each increase in the Selected Face Amount. Premiums are allocated to the
original Selected Face Amount and any subsequent increases in Selected Face
Amount in proportion to the respective guideline annual premiums.
22
<PAGE>
Surrender Charge Upon Decrease in Selected Face Amount. A Surrender Charge may
be deducted on a decrease in the Selected Face Amount. In the event of a
decrease in Selected Face Amount, the Surrender Charge deducted is a fraction of
the charge that would apply to a full surrender of the Policy. If there have
been no increases in the Selected Face Amount, the fraction will be determined
by dividing the amount of the decrease by the current Selected Face Amount and
multiplying the result by the Surrender Charge. If more than one Surrender
Charge is in effect (pursuant to one or more increases in the Selected Face
Amount), the Surrender Charge will be applied in the following order: (1) the
most recent increase followed by (2) the next most recent increases,
successively, and (3) the initial Selected Face Amount. Where a decrease causes
a partial reduction in an increase or in the initial Selected Face Amount, a
proportionate share of the Surrender Charge for that increase or for the initial
Selected Face Amount will be deducted from the Account Value.
Other Charges
Withdrawal Fee. For each Withdrawal, a charge of $25 (or 2% of the amount
withdrawn, if less) will be deducted from the amount withdrawn. This fee is
guaranteed not to increase for the duration of the Policy. MassMutual does not
anticipate making a profit on this fee.
Charge for Increase in Selected Face Amount. For each increase in Selected Face
Amount, a charge of $75 will be deducted from the Account Value. The charge is
designed to reimburse Us for underwriting and administrative costs associated
with the increase. This fee is guaranteed not to increase for the duration of
the Policy. MassMutual does not expect to make a profit on this charge.
Charge for Change from Option 1 to Option 2. For each change in the Death
Benefit Option from Option 1 to Option 2, a charge of $75 will be deducted from
the Account Value. (MassMutual currently does not charge the $75 fee for this
change, but it reserves the right to do so.) The charge is designed to reimburse
MassMutual for the underwriting and administrative costs associated with the
change. This fee is guaranteed not to increase for the duration of the Policy.
MassMutual does not expect to make a profit on this charge.
Account Value And Cash Surrender Value
Account Value. The Account Value of the Policy is the sum of all Net Premium
payments adjusted by periodic charges and credits and by Withdrawals. 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 among the Divisions and the GPA according to
the allocation requested in the Application.
Investment Return. The investment return of a Policy is based on:
(a) The Account Value held in each Division of the Separate Account for that
Policy;
(b) The investment experience of each Division as measured by its actual net
rate of return; and
(c) The interest rate credited on Account Values held in the GPA.
The investment experience of a Division reflects increases and 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 assessed against
assets of the Division. The 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 fully surrendered for its Cash Surrender
Value at any time during the life of the Insured. The Cash Surrender Value is
equal to the Account Value less any applicable Surrender Charges and less any
Policy Debt.
A Policyowner may surrender a Policy by sending a written request together with
the Policy to MassMutual's Home Office. The proceeds will be determined as of
the end of the Valuation Period during which the request for surrender is
received.
Withdrawals. After the first Policy Year, the Policyowner may, subject to
certain restrictions, withdraw up to 75% of the Cash Surrender Value. For each
Withdrawal, a fee of $25 (or 2% of the amount withdrawn, if less) is deducted
from the amount withdrawn. The minimum amount of a partial Withdrawal is $100
(before deducting the Withdrawal fee). We reserve the right to prohibit
Withdrawals that would cause Selected Face Amount to be reduced to an amount
less than $25,000. The Policyowner specifies the GPA or the Division(s) of the
Separate Account 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 the Division or GPA. If Death Benefit Option 1 is in effect, MassMutual
will reduce the Selected Face Amount by the amount of the Withdrawal unless
satisfactory evidence of insurability is provided. A Surrender Charge is not
assessed for a Withdrawal.
Policy Loan Privilege
General. After the first Policy Year (or sooner if required by law), the
Policyowner may obtain a loan from the Policy by sending a written request in a
form satisfactory to Us. The maximum amount that can be borrowed at any time is
90% (unless a greater amount is required by law) of the Policy's Account Value
less any Surrender Charge, reduced by any outstanding Policy Debt. The Policy
must be assigned to MassMutual as collateral for the loan.
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Source of Loan. The loan amount requested is taken from Divisions of the
Separate Account and the GPA in proportion to the non-loaned Account Value of
each Division and the GPA on the date of the loan. Shares taken from the
Divisions are liquidated and the resulting dollar amounts are transferred to the
GPA. The Policy loan is then taken against the value in 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: (1) the New York Stock Exchange is closed (other than customary
weekend and holiday closings); or (ii) trading is restricted; or (iii) the SEC
determines that a state of emergency exists; or (iv) during any period in which
the Securities and Exchange Commission permits MassMutual to delay payment for
the protection of our Policyowners.
Whenever total Policy Debt (which includes accrued interest) exceeds the Account
Value less Surrender Charges, MassMutual will send a notice to the Policyowner.
This notice will state the amount necessary to bring the Policy Debt back within
the limit. If we do not receive payment of that amount within 31 days after the
date we mailed the notice, and if Policy Debt exceeds the Account Value less any
Surrender Charges at the end of those 31 days, the Policy terminates without
value.
Interest Charged. At time of Application, the Policyowner may select a loan
interest rate of 6% or (in all jurisdictions except Arkansas) an adjustable loan
rate. MassMutual each year will set the adjustable rate that will apply for the
next Policy Year. The maximum loan rate is based on the monthly average of the
composite yield on seasoned corporate bonds as published by Moody's Investors
Service, Inc., 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 4%, 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.
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 loan repayment will
first be allocated to the GPA until the Policyowner has repaid all loan amounts
that originated from the GPA. Any additional loan repayments will be allocated
according to the premium allocation factors in effect.
Any outstanding Policy Debt will be deducted from the proceeds payable upon the
death of the Insured or the surrender of the Policy.
Interest on Loaned Value. Any loaned amount is held in the GPA and earns
interest at a rate determined by MassMutual, equal to the greater of 3% or the
Policy loan rate less the Policy loan expense charge. The current loan expense
charge rate is .90%, it is guaranteed not to exceed 2%.
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. Surrender of a Policy with
outstanding Policy Debt may have tax consequences. (See Policy Proceeds,
Premiums and Loans.)
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.
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 MassMutual mails
or delivers a written notice of withdrawal right to the Policyowner, or within
45 days after signing Part I of the Application, whichever is latest. The
Policyowner may cancel increases in the Selected Face Amount under the same time
limitations.
The Policyowner should mail or deliver the Policy and Policy delivery receipt
either to MassMutual's Home Office or to the agent who sold the Policy or to one
of our agency offices. If the Policy is canceled in this fashion, a refund will
be made to the Policyowner. The refund equals the sum of: (i) the difference
between the premiums paid and the amounts allocated to any Division(s) of the
Separate Account and the GPA under the Policy; (ii) the total amount of monthly
deductions made and any other charges imposed on amounts allocated to the
Division(s) and the GPA; and (iii) the value of amounts allocated to the
Division(s) or the GPA on the date we receive the returned Policy. For canceled
increases in the Selected Face Amount, the refund equals the sum of: (i) the
difference between the premiums paid attributable to the increase and the
amounts allocated to any Division(s) and the GPA under the Policy; (ii) the
total amount of monthly deductions and any other charges imposed on amounts
attributable to the increase allocated to the Division(s) and the GPA; and (iii)
the value on the day we receive the returned Policy of any amounts attributable
to the increase allocated to the Division(s) for the GPA. If state law does not
authorize the calculation above, the refund equals the total of all premiums
paid for the Policy or increase, reduced by any amounts borrowed or withdrawn.
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The Guaranteed Principal Account
A Policyowner may allocate some or all of the Net Premium and transfer some or
all of the Account Value, to the Guaranteed Principal Account ("GPA"). Because
of 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.
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.
Amounts allocated to the Guaranteed Principal Account become part of the General
Account of MassMutual, which consists of all assets owned by MassMutual other
than those in the Separate Account and other separate accounts of MassMutual.
Subject to applicable law, MassMutual has sole discretion over the investment of
the assets of its General Account.
The Policyowner may allocate some or all of the Net Premium to the Guaranteed
Principal Account. MassMutual guarantees that those amounts allocated to the GPA
in excess of any Policy Debt (which includes accrued interest) will accrue
interest daily at an effective annual rate at least equal to 3%. For amounts in
the GPA equal to any Policy Debt, the guaranteed minimum interest rate is an
effective annual rate of 3% or, if greater, the Policy loan rate less a
MassMutual declared charge for expenses and taxes. This charge will not be
greater than 2% per year. Such interest will be paid regardless of the actual
investment experience of the GPA. Although MassMutual is not obligated to credit
interest at a rate higher than the guaranteed minimum, it may declare a higher
rate applicable for such periods as it deems appropriate.
Federal Income Tax Considerations
The ultimate effect of federal income taxes on values under this Policy and on
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 Policy, 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 law considerations, a qualified tax adviser should be consulted. No attempt
is made herein to consider any applicable state or other tax laws.
MassMutual's 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 Value. The
investment income and realized capital gains are automatically applied to
increase book reserves associated with the Policy. 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 Policy. The reserve items taken into account at the close of the
taxable year for purposes of determining net increases and net decreases must be
adjusted for tax purposes by subtracting an amount attributable to appreciation
in the value of assets and by adding any amount attributable to depreciation.
MassMutual's basis in the Policy's share of the assets underlying the Separate
Account will be adjusted for appreciation or depreciation, to the extent the
reserves are adjusted. Thus, corporate-level capital 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 laws, MassMutual may incur state or local taxes (in addition to
premium taxes) in several states. At present, these taxes are not significant.
If there is a material change in applicable 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
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increments thereon, under the Policy until a full surrender or partial
withdrawal is made (unless the Policy is a "modified endowment contract," as
discussed below).
Upon a full surrender of a Policy for its Cash Surrender Value, the Policyowner
may recognize ordinary income for federal income tax purposes. Ordinary income
is computed to be the amount by which the Account Value, unreduced by any
outstanding Policy Debt but less any Surrender Charges assessed, 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 a part of the amount distributed. 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 unrecovered
premiums. 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. MassMutual suggests that you consult with your 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 the 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 unless the Policy
has become a "modified endowment contract." If the Policy is a modified
endowment contract under Code Section 7702A, loans will be fully taxable to the
extent of income in the Policy and could be subject to an additional 10 percent
tax. See the discussion on modified endowment contracts below. Under the
"personal" interest limitation provisions of the Tax Reform Act of 1986,
interest on Policy loans used for personal purposes, which otherwise meet the
requirements of Code Section 264, will no longer be tax-deductible. However,
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 your tax adviser for further guidance.
If the Policy is owned by a business or corporation, the 1986 Act 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 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 surrender
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.
MassMutual cannot make any guarantee regarding the future tax treatment of any
Policy. 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.
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 taxation 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 Policy 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 with respect to such premiums.
Since the Policy provides for flexible premium payments, the Company has
instituted procedures to monitor 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 have to be considered.
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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, a qualified tax adviser
should be consulted.
Once a Policy fails the 7-pay test, loans 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, collateral assignment, 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, collateral assignments, and distributions from any one
such Policy are taxable to the extent of the income accumulated in all the
Policies required to be aggregated.
Qualified Plans. The Policy may be used in conjunction with certain
tax-qualified employee benefit plans. Since the rules governing such use are
complex, a purchaser should not use the Policy in conjunction with any such
qualified plan until he has consulted a competent tax adviser. The Policy may
not be used in conjunction with an Individual Retirement Account (IRA).
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 Fund'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 a Fund as an asset of the
Separate Account. All securities of the same issuer are treated as a single
investment. However, each government agency or instrumentality 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.
Your Voting Rights
As long as the Separate Account continues to operate as a unit investment trust
under the Investment Company Act of 1940, 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 of the Separate
Account, if any, by $100. Fractional votes are counted.
Policyowners receive proxy material and a form with which such instructions may
be given. Shares of the Funds held by the Separate Account as to which no
effective instructions have been received are voted for or against any
proposition in the same proportion as the shares as to which instructions have
been received.
Reservation Of 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
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the Securities and Exchange Commission). If necessary, we will seek approval by
Policyowners.
Specifically, we reserve the right to:
. Create new Divisions of the Separate Account;
. Create new Separate Accounts;
. Combine any two or more Separate Accounts;
. Make available additional Divisions of the Separate Account investing in
additional investment companies;
. 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 or in any other form permitted by law; and
. De-register the Separate Account under the Investment Company Act of 1940
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 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.
Additional Provisions Of The Policy
Additional Benefits You Can Get by Rider. The Policy can include additional
benefits that we approve based on our standards and limits for issuing insurance
and classifying risks. An additional benefit is provided by rider and is subject
to the terms of both the rider and the Policy. The cost of any rider is deducted
as part of the Monthly Charges. Subject to state availability, the following
riders are available.
Disability Benefit Rider. This rider provides that, in the event of the
Insured's total disability that begins before Attained Age 65 and continues for
at least six months, MassMutual will apply a premium payment to the Policy on
each Monthly Calculation Date while the Insured remains totally disabled (but
not after Attained Age 70 if the disability occurred after Attained Age 60).
At the time of application, a Specified Monthly Amount is selected by the
Policyowner. In the event of the Insured's total disability, the amount of the
premium payment applied on each Monthly Calculation Date will be the greater of:
(a) the Specified Monthly Amount; or (b) the Monthly Charge (increased by the
current Premium Expense Charge) on that Monthly Calculation Date.
Accidental Death Benefit Rider. This rider provides for an addition to the Death
Benefit in the event the Insured's death was caused by accidental bodily injury
occurring within six months before the Insured's death. No benefit is provided
under this rider if the Insured dies before his or her first birthday or after
Attained Age 70.
Insurability Protection Rider. This rider allows the Policyowner to increase the
Selected Face Amount of the Policy for a specified amount on specified dates,
without evidence of insurability.
Death Benefit Guarantee Rider. Until Attained Age 70 or 40 years from the Policy
Date, whichever is sooner, the Policy will not terminate when the Account Value
is insufficient to cover the Monthly Charge on a Monthly Calculation Date if (a)
exceeds (b) where:
(a) is the sum of all premiums paid, minus any withdrawals, and minus any Policy
Debt; and
(b) is the sum of Minimum Monthly Premiums, for this rider since the Policy
Date.
Minimum Monthly Premiums may be paid on other than a monthly basis as long as
the sum of premiums paid is at least equal to the total required Minimum Monthly
Premiums on each Monthly Calculation Date. The Minimum Monthly Policy Premium
may change if the Policy's Selected Face Amount is increased or decreased or if
riders are added, changed, or terminated. The new Minimum Monthly Premium will
apply from the effective date of the change.
If, on a Monthly Calculation Date, the Policy premium requirement has not been
met, the Policyowner will be given an additional 61 days to pay a premium
sufficient to maintain the death benefit guarantee. The required payment will be
equal to (a) the smallest amount needed to meet the Policy premium requirement
as of that date; plus (b) two times the Minimum Monthly Premium for that date.
If the required payment is not received within this period, the rider will
terminate and the death benefit guarantee will be lost. Once the rider is
terminated, it cannot be reinstated.
Accelerated Death Benefit Rider. This rider advances the Policyowner a portion
of the Death Benefit when MassMutual receives proof, satisfactory to Us, the
insured is terminally ill and is not expected to live more than 12 months. In
return for the advanced payment, a lien is established against the Policy, equal
to the amount of the Death Benefit accelerated under the Policy. Interest is not
charged on the Lien.
Right to Exchange Insured Endorsement. Upon request, the Policy may include a
Right to Exchange Insured Endorsement. Under this endorsement, the Policy may be
exchanged for a new Policy on the life of a new Insured, subject to certain
conditions and satisfactory evidence of insurability.
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 following receipt
by MassMutual of a written request.
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Beneficiary
A Beneficiary is any person named on our records to receive insurance proceeds
after the Insured dies. The Policyowner names the Beneficiary in the application
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 Planned Premiums;
Change the premium payment plan; and
Reinstate the Policy after termination.
The Beneficiary may be changed during the Insured's lifetime by writing to our
Home Office. Generally, the change will take effect as of the date of the
request. If no Beneficiary is living when the Insured dies, unless provided
otherwise the Death Benefit is paid to the Policyowner or, if deceased, to the
Policyowner's estate.
Assignment
The Policy may be assigned as collateral for a loan or other obligation. For any
assignment to be binding on MassMutual, however, We must receive a signed copy
of it at our Home Office. We are not responsible for the validity of any
assignment.
Limits on Our Right to Challenge the Policy
Except for any increases in Selected Face Amount, we must bring any legal action
to contest the validity of a Policy within two years from its Issue Date. After
that We cannot contest its validity, except for failure to pay premiums. For any
increase in the Selected Face Amount, We must bring legal action to contest that
increase within two years after the effective date of the increase or within two
years after the Issue Date of the Insurability Protection Rider, if the increase
is provided by that rider.
Error of Age or Sex
If the Insured's age or sex is misstated in the Policy application, the Death
Benefit payable under the Policy will be adjusted based on what the Policy would
provide according to the most recent Monthly Charge for the correct date of
birth and correct sex.
Suicide
Suicide within two years of the Policy Date is not covered by the Policy. If the
Insured dies by suicide, while sane or insane, within two years from the Issue
Date (or less where required by law), the amount payable to the Beneficiary will
be limited to premiums paid, less any withdrawals and Policy Debt. If the
Insured, while sane or insane, dies by suicide within two years after the
effective date of any increase in the Selected Face Amount, the death benefit
for that increase will be limited to the amount of the Monthly Charges for that
increase.
When We Pay Proceeds
If the Policy has not terminated, payment of the Cash Surrender Value, loan
proceeds, or the Death Benefit are made within 7 days after we receive all
required documents in a form satisfactory to Us at our Home Office. But 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 is closed (other than customary
week-end and holiday closings), trading is restricted by the SEC, or the SEC
declares that an emergency exists; or the SEC, by order, permits Us to delay
payment in order to protect our policyowners.
In addition, a premium payment is not available to satisfy a surrender request
until the check, or other instrument by which the premium payment was made, has
been honored.
We may delay paying any Cash Surrender Value, any withdrawal, or any loan
proceeds based on the GPA for up to 6 months from the date the request is
received at our Home Office.
We can delay payment of the entire 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 of a Cash Surrender or withdrawal is delayed for 30 days or more, we
add interest to the date of payment at the same rate as is paid under the
interest payment option. Interest is paid on the Death Benefit from the date of
death to the date of payment.
Payment Options
The Policy proceeds can be paid in cash, or if elected, all or part of these
proceeds can be placed under one or more of the following payment options. The
minimum amount that can be applied under a payment option is $2,000. If the
periodic payment under any option is less than $20, we reserve the right to make
payments at less-frequent intervals. None of these benefits depends on the
performance of the Separate Account or the GPA. For additional information
concerning these options, see the Policy. The following payment options are
currently available.
Fixed Amount Payment Option. Each monthly payment is for an agreed fixed amount
not less than $10 for
29
<PAGE>
each $1,000 applied under the option. Interest of at least 2.5% 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 rate We credit interest to the unpaid
balance. This interest rate will not be less than 2.5% per year.
Interest Payment Option. We hold amounts under this option and pay interest on
the unpaid balance of at least 2.5% 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; and
. 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 will be 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
. Payments for two lives only. No specific number of payments is guaranteed.
Under this option there may be one payment if the two named persons die
prior to the second payment.
Joint Lifetime Payment Option with Reduced Payments. Monthly payments are based
on the lives of two named persons. While both named persons are living, one
payment will be made each month. When one dies, payments are reduced by
one-third and will continue for the lifetime of the other.
Withdrawal Rights Under Payment Options. If provided in the payment option
election, all or part of the unpaid balance under the Fixed Amount or Interest
payment option may be withdrawn or applied under any other option. Payments
which are based on a named person's life may not be withdrawn.
Records And Reports
All records and accounts relating to the Separate Account and the GPA are
maintained by MassMutual. Each year within 30 days after the Policy Anniversary,
MassMutual will mail you 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 the Account Value during the year, and the Account Value,
Death Benefit, Cash Surrender Value and Policy Debt as of the latest Policy
Anniversary. This report contains any additional information required by any
applicable law or regulation.
Sales And Other Agreements
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield, MA
01144-1013, is the principal underwriter of the Policy pursuant to an
Underwriting and Servicing Agreement to which MML Distributors, MassMutual and
the Separate Account are parities. MML Investors Services, Inc. ("MMLISI"), also
located at 1414 Main Street, Springfield, MA 01144-1013, serves as the
co-underwriter of the Policy. 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"). MassMutual sells the Policy through agents who are licensed by state
insurance officials to sell the Policy. These agents are also registered
representatives of selling brokers or of MMLISI.
The Company also may contract with independent third party broker-dealers who
may act as wholesalers by assisting the company in finding Broker-dealers to
offer and sell the Policies. These parties also may provide training, marketing
and other sales related functions for the Company and other broker-dealers and
may provide certain administrative services to the Company in connection with
the Policies. The Company may pay such parties compensation based on premium
payments for the Policies purchased through broker-dealers selected by the
wholesaler. In addition, some sales personnel may receive various types of
non-cash compensation as special sales incentives, including trips and
educational and/or business seminars.
When an application for a Policy is completed, it is submitted to MassMutual.
MassMutual performs suitability and insurance underwriting and determines
whether to accept or reject the application for the Policy and the Insured's
risk classification. If the Application is not accepted, MassMutual will refund
any premium that has been paid.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters of the
Policy. Compensation paid to MML Distributors and MMLISI during 1997 totaled
$20,800. Commissions will be paid through MMLISI and MML Distributors to agents
and selling brokers for selling the Policy. During 1997 such payments amounted
to $3,479,095.
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.
30
<PAGE>
Compensation
Writing agents will receive commissions based on a commission schedule and
rules. Some commissions are paid as a percentage of the premium payable in each
Policy Year. The maximum commission percentages are as follows:
For Policy Year 1, 50% for basic premium and 2% for amount paid above basic
premium; for Policy Years 2 through 10, 6.5% of basic premium and 2% for amounts
paid above basic premium, and 2% for basic premium and amounts above basic
premium for Policy Years 11 and after.
Basic premium is an amount established by MassMutual for the purposes of
determining commissions payable on a Policy.
Agents under financing agreements with a general agent of MassMutual may be
compensated differently. Agents who meet certain productivity and persistency
standards in selling MassMutual policies are eligible for additional
compensation General Agents and district managers who are registered
representatives of MMLISI also may receive commission overrides, allowances and
other compensation.
While the compensation payable to broker-dealers for sales of Policies may vary
with the sales agreement and level of production, they generally are expected to
be comparable to the aggregate compensation paid to Company agents and general
agents.
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 for MassMutual's general agents and agents (also subject to a
$350,000 deductible).
Directors and Executive Officers of MassMutual
The directors and executive vice presidents of MassMutual, their positions and
their other business affiliations and business experience for the past five
years are listed on the following two pages.
31
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Name and Position Principal Occupation(s) During Past Five Years
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
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 Part-
2 Soundview Drive ners, 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; Presi-
1 State Street, Suite 2310 dent 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, Bank-
100 Federal Street Boston, N.A. and Chairman, since 1998, and Chief Executive Officer, since 1985,
Boston, MA 02110 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
- ------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
John J. Pajak, Director, President President and Chief Operating Officer, since 1996, Vice Chairman and Chief
and Chief Operating Officer Administrative Officer, 1996-1996, Executive Vice President, 1987-1996, MassMutual
1295 State Street
Springfield, MA 01111
- ------------------------------------------------------------------------------------------------------------------------------
Thomas B. Wheeler, Director, Chairman and Chief Executive Officer, since 1996, President and Chief Executive
Chairman 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;
1295 State Street Senior Vice 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>
33
<PAGE>
Legal Proceedings
We are not currently involved in any legal proceedings which would have a
material impact on the Policy.
Experts
The financial statements of the Variable Life Select segment of the Separate
Account 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.
The audited statements of statutory financial position of MassMutual as of
December 31, 1997 and 1996, and the related statutory statements of income,
changes in Policyholder's contingency reserves and cash flows for each of the
years in the three year period ended December 31, 1997 included in this
Prospectus have been so included 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.
Actuarial matters in the Prospectus have been examined by Craig Waddington, FSA,
MAAA. An 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 Variable Life Select 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 statements of assets and liabilities of the MML Equity
Division, MML Money Market Division, MML Managed Bond Division, MML Blend
Division, Oppenheimer Capital Appreciation Division, Oppenheimer Growth
Division, Oppenheimer Global Securities Division, and Oppenheimer Strategic Bond
Division of the Variable Life Select segment of Massachusetts Mutual Variable
Life Separate Account I as of December 31, 1997, and the related statements of
operations for the year then ended and statements of changes in net assets for
each of the two years in the period then ended. These financial statements are
the responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.
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. 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
Money Market Division, MML Managed Bond Division, MML Blend Division,
Oppenheimer Capital Appreciation Division, Oppenheimer Growth Division,
Oppenheimer Global Securities Division, and Oppenheimer Strategic Bond Division
of the Variable Life Select segment of Massachusetts Mutual Variable Life
Separate Account I as of December 31, 1997, the results of their operations for
the year then ended and the changes in their net assets each of the two years in
the period then ended, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Springfield, Massachusetts
February 3, 1998
F-1
<PAGE>
Massachusetts Mutual Variable Life Separate Account I - Variable Life Select
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 239,861 296,373 15,307 68,069
============== ============== ============== ==============
Identified cost (Note 3B) $ 7,688,068 $ 296,373 $ 186,805 $ 1,587,602
============== ============== ============== ==============
Value (Note 3A) $ 8,501,437 $ 296,373 $ 189,949 $ 1,639,072
Dividends receivable 685,483 1,265 3,054 122,871
-------------- -------------- -------------- --------------
Total assets 9,186,920 297,638 193,003 1,761,943
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 39,841 3,297 1,061 11,798
-------------- -------------- -------------- --------------
NET ASSETS: $ 9,147,079 $ 294,341 $ 191,942 $ 1,750,145
============== ============== ============== ==============
Net Assets:
For variable life insurance policies $ 9,138,576 $ 288,759 $ 185,916 $ 1,742,752
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 8,503 5,582 6,026 7,393
-------------- -------------- -------------- --------------
Net assets $ 9,147,079 $ 294,341 $ 191,942 $ 1,750,145
============== ============== ============== ==============
Accumulation units (Note 8)
Policyowners 5,376,594 258,688 154,254 1,178,674
Massachusetts Mutual Life
Insurance Company 5,000 5,000 5,000 5,000
-------------- -------------- -------------- --------------
Total Units 5,381,594 263,688 159,254 1,183,674
============== ============== ============== ==============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.70 $ 1.12 $ 1.21 $ 1.48
December 31, 1996 1.33 1.07 1.10 1.23
December 31, 1995 1.11 1.02 1.07 1.08
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
Appreciation Growth Securities Bond
Division Division Division Division
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Investments
Number of shares (Note 2) 52,695 41,611 51,992 55,007
============== ============== ============== ==============
Identified cost (Note 3B) $ 2,065,110 $ 1,225,041 $ 995,911 $ 281,659
============== ============== ============== ==============
Value (Note 3A) $ 2,158,384 $ 1,349,865 $ 1,111,063 $ 281,633
Dividends receivable 0 0 0 0
-------------- -------------- -------------- --------------
Total assets 2,158,384 1,349,865 1,111,063 281,633
LIABILITIES
Payable to Massachusetts Mutual
Life Insurance Company 9,862 22,037 6,365 1,272
-------------- -------------- -------------- --------------
NET ASSETS: $ 2,148,522 $ 1,327,828 $ 1,104,698 $ 280,361
============== ============== ============== ==============
Net Assets:
For variable life insurance policies $ 2,140,926 $ 1,319,141 $ 1,097,739 $ 273,953
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 7,596 8,687 6,959 6,408
-------------- -------------- -------------- --------------
Net assets $ 2,148,522 $ 1,327,828 $ 1,104,698 $ 280,361
============== ============== ============== ==============
Accumulation units (Note 8)
Policyowners 1,409,232 759,493 788,749 213,777
Massachusetts Mutual Life
Insurance Company 5,000 5,000 5,000 5,000
-------------- -------------- -------------- --------------
Total Units 1,414,232 764,493 793,749 218,777
============== ============== ============== ==============
NET ASSET VALUE PER
ACCUMULATION UNIT
December 31, 1997 $ 1.52 $ 1.73 $ 1.39 $ 1.28
December 31, 1996 1.37 1.38 1.14 1.19
December 31, 1995 1.14 1.11 0.98 1.06
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
Massachusetts Mutual Variable Life Separate Account I - Variable Life Select
STATEMENT OF OPERATIONS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 685,543 $ 12,883 $ 9,153 $ 152,877
Expenses
Mortality and expense risk fees
(Note 4) 33,437 1,397 675 6,330
------------ ------------ ------------ ------------
Net investment income
(Note 3C) 652,106 11,486 8,478 146,547
------------ ------------ ------------ ------------
Net realized and unrealized gain
(loss) on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 113,254 -- 283 25,996
Change in net unrealized
appreciation/depreciation
of investments 655,786 -- 3,483 36,654
------------ ------------ ------------ ------------
Net gain on investments 769,040 -- 3,766 62,650
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations $1,421,146 $ 11,486 $ 12,244 $ 209,197
============ ============ ============ ============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
Appreciation Growth Securities Bond
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Investment income
Dividends (Note 3B) $ 41,715 $ 26,126 $ 5,378 $ 16,414
Expenses
Mortality and expense risk fees
(Note 4) 7,053 4,105 3,711 1,096
------------ ------------ ------------ ------------
Net investment income
(Note 3C) 34,662 22,021 1,667 15,318
------------ ------------ ------------ ------------
Net realized and unrealized gain
(loss) on investments
Net realized gain on investments
(Notes 3B, 3C and 6) 4,976 21,600 15,438 1,183
Change in net unrealized
appreciation/depreciation
of investments 83,156 97,916 91,300 (641)
------------ ------------ ------------ ------------
Net gain on investments 88,132 119,516 106,738 542
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations $ 122,794 $ 141,537 $ 108,405 $ 15,860
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
Massachusetts Mutual Variable Life Separate Account I - Variable Life Select
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 652,106 $ 11,486 $ 8,478 $ 146,547
Net realized gain
on investments 113,254 -- 283 25,996
Change in net unrealized
appreciation/depreciation
of investments 655,786 -- 3,483 36,654
------------- -------------- ------------- -------------
Net increase in net assets
resulting from operations 1,421,146 11,486 12,244 209,197
------------- -------------- ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 5,697,460 277,257 132,412 1,138,966
Transfer of surrender values (9,141) (65) (886) (38,685)
Transfer due to policy loans (36,245) -- (22) (1,285)
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation 6,641 (1,434) 55 (581)
Withdrawal due to charges for
administrative and insurance
costs (1,467,422) (30,917) (26,309) (255,857)
Divisional transfers (14,670) (110,410) 5,842 5,622
------------- -------------- ------------- -------------
Net increase in net assets resulting
from capital transactions 4,176,623 134,431 111,092 848,180
Total increase 5,597,769 145,917 123,336 1,057,377
NET ASSETS, at beginning
of the year 3,549,310 148,424 68,606 692,768
------------- -------------- ------------- -------------
NET ASSETS, at end of the year $ 9,147,079 $ 294,341 $ 191,942 $ 1,750,145
============= ============= ============= =============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
Appreciation Growth Securities Bond
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income $ 34,662 $ 22,021 $ 1,667 $ 15,318
Net realized gain
on investments 4,976 21,600 15,438 1,183
Change in net unrealized
appreciation/depreciation
of investments 83,156 97,916 91,300 (641)
------------- -------------- ------------- -------------
Net increase in net assets
resulting from operations 122,794 141,537 108,405 15,860
------------- -------------- ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 1,732,223 1,038,765 752,810 171,038
Transfer of surrender values (3,662) (1,562) (3,316) (3,024)
Transfer due to policy loans (7,380) (8,219) (35) (3,259)
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation 10,564 8,961 9,589 61
Withdrawal due to charges for
administrative and insurance
costs (400,292) (213,539) (160,809) (41,809)
Divisional transfers 36,132 47,266 34,291 (4,073)
------------- -------------- ------------- -------------
Net increase in net assets resulting
from capital transactions 1,367,585 871,672 632,530 118,934
------------- -------------- ------------- -------------
Total increase 1,490,379 1,013,209 740,935 134,794
NET ASSETS, at beginning
of the year 658,143 314,619 363,763 145,567
------------- -------------- ------------- -------------
NET ASSETS, at end of the year $ 2,148,522 $ 1,327,828 $ 1,104,698 $ 280,361
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
Massachusetts Mutual Variable Life Separate Account I - Variable Life Select
STATEMENT OF CHANGES IN NET ASSETS
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
Equity Market Bond Blend
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 146,235 $ 3,438 $ 2,250 $ 31,142
Net realized gain (loss)
on investments 40,916 -- (80) 3,410
Change in net unrealized
appreciation/depreciation
of investments 163,071 -- (545) 15,061
------------- -------------- ------------- -------------
Net increase in net assets
resulting from operations 350,222 3,438 1,625 49,613
------------- -------------- ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 3,316,200 246,298 68,621 718,687
Transfer of surrender values (2,305) -- -- --
Transfer due to death benefits -- -- -- --
Transfer due to policy loans (452) -- -- --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation 8,312 (215) 16 854
Withdrawal due to charges for
administrative and insurance
costs (689,853) (17,881) 9,606 104,422
Divisional transfers 13,596 (155,027) 77 (5,207)
------------- -------------- ------------- -------------
Net increase in net assets resulting
from capital transactions 2,645,498 73,175 59,108 609,912
------------- -------------- ------------- -------------
Total increase 2,995,720 76,613 60,733 659,525
NET ASSETS, at beginning
of the year 553,590 71,811 7,873 33,243
------------- -------------- ------------- -------------
NET ASSETS, at end of the year $ 3,549,310 $ 148,424 $ 68,606 $ 692,768
============ ============== ============= =============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
Appreciation Growth Securities Bond
Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets
Operations:
Net investment income (loss) $ 4,744 $ 2,843 $ (928) $ 4,099
Net realized gain (loss)
on investments 9,654 2,730 3,404 1,466
Change in net unrealized
appreciation/depreciation
of investments 8,104 26,225 23,841 481
------------- -------------- ------------- -------------
Net increase in net assets
resulting from operations 22,502 31,798 26,317 6,046
------------- -------------- ------------- -------------
Capital transactions: (Note 8)
Transfer of net premium 658,125 289,119 329,866 142,631
Transfer of surrender values -- -- -- --
Transfer due to death benefits (286) (283) -- --
Transfer due to policy loans (265) (92) (87) --
Transfer due to reimbursement
(payment) of accumulation
unit value fluctuation (1,005) 1,082 931 (10)
Withdrawal due to charges for
administrative and insurance
costs (126,432) (53,582) (51,365) (14,248)
Divisional transfers 73,585 29,896 38,442 4,638
------------- -------------- ------------- -------------
Net increase in net assets resulting
from capital transactions 603,722 266,140 317,787 133,011
------------- -------------- ------------- -------------
Total increase 626,224 297,938 344,104 139,057
NET ASSETS, at beginning
of the year 31,919 16,681 19,659 6,510
------------- -------------- ------------- -------------
NET ASSETS, at end of the year $ 658,143 $ 314,619 $ 363,763 $ 145,567
============= ============== ============= =============
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
Massachusetts Mutual Variable Life Separate Account I - Variable Life Select
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.
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.
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.
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.
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 $40,000 to the Variable Life Select Segment on
July 24, 1995 to provide initial capital: 7,656 shares were purchased in the
two management investment companies described in Note 2 supporting the eight
divisions of the Variable Life Select Segment.
2. INVESTMENT OF THE VARIABLE LIFE SELECT SEGMENT'S ASSETS
The Variable Life Select Segment maintains eight divisions. The MML Equity
Division invests in shares of MML Equity Fund, the MML Money Market Division
invests in shares of MML Money Market Fund, the MML Managed Bond Division
invests in shares of MML Managed Bond Fund and the MML Blend Division invests
in shares of MML Blend Fund. The Oppenheimer Capital Appreciation Division
invests in shares of Oppenheimer Capital Appreciation Fund, the Oppenheimer
Growth Division invests in shares of Oppenheimer Growth Fund, the Oppenheimer
Global Securities Division invests in shares of Oppenheimer Global Securities
Fund and the Oppenheimer Strategic Bond Division invests in shares of
Oppenheimer Strategic Bond Fund.
MML Equity Fund, MML Money Market Fund, MML Managed Bond Fund and MML Blend
Fund are four series of the MML Series Investment Fund (the "MML Trust"). The
MML Trust is a no-load, registered, 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.
F-6
<PAGE>
Notes To Financial Statements (Continued)
Oppenheimer Capital Appreciation Fund, Oppenheimer Growth Fund, Oppenheimer
Global Securities Fund and Oppenheimer Strategic Bond Fund are part of the
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"). The Oppenheimer
Trust is a registered, open-end, diversified management investment company
for which OppenheimerFunds, Inc. ("OFI"), a controlled subsidiary of
MassMutual, serves as investment advisor (prior to January 5, 1996, OFI was
known as Oppenheimer Management Corporation).
In addition to the eight divisions of the Variable Life Select 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 the Variable Life Select Segment in preparation of the
financial statements in conformity with generally accepted accounting
principles.
A. Investment Valuation
Investments in the MML Trust and the Oppenheimer Trust 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. The Variable Life
Select Segment is part of MassMutual's total operation and is not taxed
separately. The Variable Life Select 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 the Variable Life Select Segment credited to
the policies. Accordingly, MassMutual does not intend to make any charge to
the Variable Life Select Segment's 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 the Variable Life Select Segment.
D. Policy Loan
When a policy loan is made, the Variable Life Select Segment transfers the
amount of the loan to MassMutual, thereby decreasing both the investments and
net assets of the Variable Life Select 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, in all jurisdictions except Arkansas, at the
time of application. All loan repayments are allocated to the Guaranteed
Principal Account.
The policyowner earns interest at an annual rate determined by MassMutual,
which will not be less than 3%, on any loaned amount.
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.
F-7
<PAGE>
Notes To Financial Statements (Continued)
4. CHARGES
MassMutual charges the Variable Life Select Segment divisions for the
mortality and expense risks it assumes. The charge is made daily at an
effective annual rate of 0.55% of the value of each division's net assets.
MassMutual makes certain deductions from the annual premium before amounts
are allocated to the Variable Life Select Segment and the Guaranteed
Principal Account. A deduction of 2% of premium payments is made representing
sales charges and a 2% of premium payments is made for premium tax charges.
No additional deductions are taken when money is transferred from the
Guaranteed Principal Account to the Variable Life Select 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.
Under the sales agreement among MMLISI, MassMutual and Separate Account I,
agents receive commissions and service fees from MMLISI for selling and
servicing the policies. MassMutual reimburses MMLISI for such compensation
and for other expenses incurred in marketing and selling the policies.
6. PURCHASE AND SALES OF INVESTMENTS
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For The Year Ended Equity Market Bond Blend
December 31, 1997 Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cost of purchases $ 4,938,132 $ 541,300 $ 140,516 $ 1,110,834
Proceeds from sales 558,911 394,073 21,966 205,409
Average monthly value of securities 6,007,701 249,264 123,207 1,139,651
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
For The Year Ended Appreciation Growth Securities Bond
December 31, 1997 Division Division Division Division
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cost of purchases $ 1,570,427 $ 1,014,490 $ 708,140 $ 201,109
Proceeds from sales 163,983 101,105 69,954 60,741
Average monthly value of securities 1,290,563 747,683 676,010 199,258
</TABLE>
F-8
<PAGE>
Notes To Financial Statements (Continued)
7. NET INVESTMENT RETURN
The following table shows the net investment return for each division in the
Variable Life Select Segment:
<TABLE>
<CAPTION>
For the Years Ended
December 31, 1997 and 1996 and MML MML
*For the Period July 24, 1995 MML Money Managed MML
(Date of Commencement of Operations) Equity Market Bond Blend
Through December 31, 1995 Division Division Division Division
- ------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
December 31, 1997 23.45% 4.52% 9.94% 18.24%
December 31, 1996 19.34% 4.21% 5.38% 14.54%
*December 31, 1995 13.40% 1.39% 7.01% 8.28%
<CAPTION>
For the Years Ended
December 31, 1997 and 1996 and Oppenheimer Oppenheimer Oppenheimer
*For the Period July 24, 1995 Capital Oppenheimer Global Strategic
(Date of Commencement of Operations) Appreciation Growth Securities Bond
Through December 31, 1995 Division Division Division Division
- ------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
December 31, 1997 9.55% 19.06% 16.10% 7.98%
December 31, 1996 7.57% 19.21% 17.61% 12.77%
*December 31, 1995 15.56% 8.92% (0.60%) 6.25%
</TABLE>
The net investment return for each division of the Variable Life Select 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 24, 1995 through December 31, 1995
are not annualized.
8. NET INCREASE (DECREASE) IN ACCUMULATION UNITS
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For The Year Ended Equity Market Bond Blend
December 31, 1997 Division Division Division Division
- ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Units purchased 3,735,580 255,462 115,958 830,720
Units withdrawn (1,018,532) (27,916) (23,824) (216,286)
Units transferred between divisions (6,540) (102,956) 4,891 5,797
Net increase 2,710,508 124,590 97,025 620,231
Units, at beginning of the year 2,671,086 139,098 62,229 563,443
Units, at end of the year 5,381,594 263,688 159,254 1,183,674
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
For The Year Ended Appreciation Growth Securities Bond
December 31, 1997 Division Division Division Division
- ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Units purchased 1,187,386 642,194 572,021 138,472
Units withdrawn (281,160) (137,246) (124,296) (39,006)
Units transferred between divisions 26,640 31,343 27,016 (3,505)
Net increase 932,866 536,291 474,741 95,961
Units, at beginning of the year 481,366 228,202 319,008 122,816
Units, at end of the year 1,414,232 764,493 793,749 218,777
</TABLE>
<TABLE>
<CAPTION>
MML MML
MML Money Managed MML
For The Year Ended Equity Market Bond Blend
December 31, 1996 Division Division Division Division
- ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Units purchased 2,720,236 235,913 63,768 625,447
Units withdrawn (559,027) (17,141) (8,944) (88,472)
Units transferred between divisions 11,584 (149,978) 72 (4,176)
Net increase 2,172,793 68,794 54,896 532,799
Units, at beginning of the year 498,293 70,304 7,333 30,644
Units, at end of the year 2,671,086 139,098 62,229 563,443
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Capital Oppenheimer Global Strategic
For The Year Ended Appreciation Growth Securities Bond
December 31, 1996 Division Division Division Division
- ----------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Units purchased 489,465 228,658 311,299 124,948
Units withdrawn (93,488) (40,328) (48,945) (12,500)
Units transferred between divisions 57,489 24,805 36,500 4,246
Net increase 453,466 213,135 298,854 116,694
Units, at beginning of the year 27,900 15,067 20,154 6,122
Units, at end of the year 481,366 228,202 319,008 122,816
</TABLE>
F-9
<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 Variable Life Select Segment. The combined net assets as of
December 31, 1996 for the Separate Account I, which includes the Variable
Life Plus, Large Case Variable Life Plus, Strategic Variable Life and
Variable Life Select and Strategic Group Variable Universal Life Segments,
are as follows:
<TABLE>
<CAPTION>
MML MML MML
MML Equity Money Managed MML
Equity Index Market Bond Blend
Division Division Division Division Division
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total assets $ 47,535,472 $ 24,804 $ 4,783,018 $ 19,916,629 $ 13,024,523
Total liabilities 80,176 9 7,225 17,985 23,892
------------ ------------ ------------ ------------ ------------
Net assets $ 47,455,296 $ 24,795 $ 4,775,793 $ 19,898,644 $ 13,000,631
============ ============ ============ ============ ============
Net assets:
For variable life insurance
policies 47,351,808 17,670 4,724,501 19,838,205 12,915,916
Retained in Variable Life
Separate Account I by
Massachusetts Mutual Life
Insurance Company 103,488 7,125 51,292 60,439 84,715
------------ ------------ ------------ ------------ ------------
Net assets $ 47,455,296 $ 24,795 $ 4,775,793 $ 19,898,644 $ 13,000,631
============ ============ ============ ============ ============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Oppenheimer High Oppenheimer Capital Oppenheimer Multiple
Money Income Bond Appreciation Growth Strategies
Division Division Division Division Division Division
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Total assets $ 83,483 $ 3,203,079 $ 142,182 $ 9,010,163 $ 5,093,866 $ 417,797
Total liabilities 64 2,031 91 17,407 24,158 207
------------ ------------ ------------ ------------ ------------ ------------
Net assets $ 83,419 $ 3,201,048 $ 142,091 $ 8,992,756 $ 5,069,708 $ 417,590
============ ============ ============ ============ ============ ============
Net assets:
For variable life insurance
policies 76,766 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 6,653 15,367 7,035 24,583 18,567 8,165
------------ ------------ ------------ ------------ ------------ ------------
Net assets $ 83,419 $ 3,201,048 $ 142,091 $ 8,992,756 $ 5,069,708 $ 417,590
============ ============ ============ ============ ============ ============
<CAPTION>
Oppenheimer Oppenheimer Oppenheimer
Global Strategic Growth & Panorama Panorama
Securities Bond Income Total Return Growth
Division Division Division Division Division
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total assets $ 5,356,495 $ 355,712 $ 773,396 $ 1,000 $ 986
Total liabilities 10,408 1,323 350 2 2
------------ ------------ ------------ ------------ ------------
Net assets $ 5,346,087 $ 354,389 $ 773,046 $ 998 $ 984
============ ============ ============ ============ ============
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
------------ ------------ ------------ ------------ ------------
Net assets $ 5,346,087 $ 354,389 $ 773,046 $ 998 $ 984
============ ============ ============ ============ ============
<CAPTION>
Panorama Panorama
Panorama Life Span Panorama Life Span Dreyfus
International Diversified Life Span Capital Stock
Equity Income Balanced Appreciation Index
Division Division Division Division Division
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total assets $ 958 $ 6,534 $ 6,684 $ 6,783 $ 34,164,819
Total liabilities 2 6 6 6 35,667
------------ ------------ ------------ ------------ ------------
Net assets $ 956 $ 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 956 6,528 6,678 6,777 7,590
------------ ------------ ------------ ------------ ------------
Net assets $ 956 $ 6,528 $ 6,678 $ 6,777 $ 34,129,152
============ ============ ============ ============ ============
</TABLE>
F-10
<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
Illustration of Death Benefits, Cash Surrender Values and Accumulated Premiums
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit and Cash Surrender Value could vary over an extended
period of time, assuming the Funds experience hypothetical gross rates of
investment return (i.e., investment income and capital gains and losses,
realized or unrealized), equivalent to constant gross annual rates of 0%, 6%,
and 12%. The tables are based on annual premium of $1,200 for a nonsmoker male
and female age 35 both issued standard based on full underwriting. Separate
tables are shown for the current and guaranteed schedule of charges. These
tables will assist in 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 A1 is for a Policy issued to a male non- smoker
age 35 for a Selected Face Amount of $100,000 using Death Benefit Option 1.
The premium payment is $1,200 using a current schedules of mortality and
expense charges and current fund level expenses.
2. The illustration on page A2 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000 using Death Benefit Option 1. The
premium payment is $1,200 using guaranteed schedules of mortality and expense
charges and current fund level expenses.
3. The illustration on page A3 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000 using Death Benefit Option 2. The
premium payment is $1,200 using a current schedules of mortality and
expense charges and current fund level expenses.
4. The illustration on page A4 is for a Policy issued to a male nonsmoker age 35
for a Selected Face Amount of $100,000 using Death Benefit Option 2. The
premium payment is $1,200 using guaranteed schedules of mortality and expense
charges and current fund level expenses.
5. The illustration on page A5 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000 using Death Benefit Option 1. The
premium payment is $1,200 using a current schedules of mortality and expense
charges and current fund level expenses.
6. The illustration on page A6 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000 using Death Benefit Option 1. The
premium payment is $1,200 using guaranteed schedules of mortality and expense
charges and current fund level expenses.
7. The illustration on page A7 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000 using Death Benefit Option 2. The
premium payment is $1,200 using a current schedules of mortality and expense
charges and current fund level expenses.
8. The illustration on page A8 is for a Policy issued to a female nonsmoker age
35 for a Selected Face Amount of $100,000 using Death Benefit Option 2. The
premium payment is $1,200 using guaranteed schedules of mortality and expense
charges and current fund level expenses.
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. 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%, and 12 % but varied above or below that average
for particular Funds.
The Death Benefits and Cash Surrender Values should, in illustrations 1, 3, 5
and 7, reflect the following current charges:
1. Administrative Charges equal to $6.00 per Policy charge for non-qualified
policies.
2. Cost of Insurance Charge, based on the current rates being charged by the
Company for standard, fully underwritten risks.
3. Mortality and Expense Risk Charge, which is equal to .55% on an annual basis,
of the net asset value of the Fund shares held by the Separate Account.
4. Fund level expenses of .60% on an annual basis, of the net assets value of
the Fund shares held by the Separate Account. These fund level expenses
represent the unweighted average of all fund expenses.
The Death Benefits and Cash Surrender Values show in illustrations 2, 4, 6 and 8
reflect the following guaranteed maximum charges as well as the current fund
level expenses:
1. Administrative Charges equal to $9.00 per Policy.
2. Cost of Insurance Charge based on 1980 CSO Mortality Table.
3. Mortality and Expense Risk Charge, which is equal to .90% on an
annual basis, of the net asset value of the Fund shares held by the
Separate Account.
Cash Surrender Values shown in the tables reflect the deduction of the
applicable Administrative Surrender Charge (during the first 15 Policy Years)
and the applicable Sales Load Surrender Charge (also during the first 15 Policy
Years.) Taking into account the current 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 rate of return would be -1.142%, 4.789% and 10.721%
respectively.
MassMutual has agreed to bear the expenses of the Funds (other than the
management fee, interest taxes, brokerage commissions and extraordinary
expenses) in excess of .11% of average daily net assets value of each MML Fund
through April 30, 1999.
Currently no charge is made against the Separate Account for federal income
taxes but the Company 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 second column of each table shows the amount which would accumulate if an
amount equal to the annual premium were invested to earn interest after taxes of
5% per year, compounded annually.
The tables are based on the assumptions that the Policyowner has not requested
an increase or decrease in the Selected Face Amount, that no Policy loans have
been made, and no transaction charges have been incurred, and that the entire
Account Value under the Policy is allocated to the Funds.
A
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 1
$1,200 Annual Premium
Using Current Schedule of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% 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 $ 149 $ 210 $ 272
2 2,583 100,000 100,000 100,000 997 1,177 1,364
3 3,972 100,000 100,000 100,000 1,852 2,209 2,595
4 5,431 100,000 100,000 100,000 2,711 3,306 2,976
5 6,982 100,000 100,000 100,000 3,550 4,445 5,495
6 8,570 100,000 100,000 100,000 4,462 5,722 7,260
7 10,259 100,000 100,000 100,000 5,360 7,052 9,203
8 12,032 100,000 100,000 100,000 6,237 8,429 11,332
9 13,893 100,000 100,000 100,000 7,090 9,855 13,670
10 15,848 100,000 100,000 100,000 7,921 11,332 16,237
15 27,189 100,000 100,000 100,000 11,561 19,408 33,383
20 41,663 100,000 100,000 144,095 14,348 28,957 61,057
25 60,136 100,000 100,000 215,982 16,646 41,025 105,874
30 83,713 100,000 100,000 316,008 17,359 55,637 176,541
35 113,804 100,000 115,564 453,068 15,590 73,142 286,752
40 152,208 100,000 133,446 653,169 9,632 93,319 456,762
45 201,222 0 152,226 938,232 0 116,202 716,208
50 263,778 0 174,199 1,361,228 0 141,625 1,106,690
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 915 $ 976 $ 1,038
2 1,811 1,991 2,178
3 2,689 3,046 3,432
4 3,548 4,143 4,813
5 4,387 5,282 6,332
6 5,207 6,467 8,005
7 6,006 7,698 9,848
8 6,782 8,975 11,878
9 7,536 10,301 14,115
10 8,266 11,677 16,583
15 11,569 19,416 33,391
For years following Policy Year 15, Account Value equals Cash Surrender Value
assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A1
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 1
$1,200 Annual Premium
Using Guaranteed Schedules of Mortality and Expense Charges as well as Current
Fund Level Expenses
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% 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 $ 96 $ 155 $ 215
2 2,583 100,000 100,000 100,000 891 1,063 1,243
3 3,972 100,000 100,000 100,000 1,689 2,029 2,398
4 5,431 100,000 100,000 100,000 2,488 3,052 3,688
5 6,982 100,000 100,000 100,000 3,264 4,109 5,101
6 8,570 100,000 100,000 100,000 4,107 5,292 6,740
7 10,259 100,000 100,000 100,000 4,932 6,517 8,533
8 12,032 100,000 100,000 100,000 5,732 7,778 10,490
9 13,893 100,000 100,000 100,000 6,503 9,074 12,624
10 15,848 100,000 100,000 100,000 7,248 10,408 14,956
15 27,189 100,000 100,000 100,000 10,326 17,463 30,198
20 41,663 100,000 100,000 127,498 12,058 25,095 54,025
25 60,136 100,000 100,000 184,548 12,144 33,406 90,465
30 83,713 100,000 100,000 259,396 9,550 42,098 144,914
35 113,804 100,000 100,000 354,186 1,962 50,525 224,168
40 152,208 0 100,000 480,902 0 57,716 336,295
45 201,222 0 100,000 640,669 0 61,374 489,060
50 263,778 0 100,000 850,613 0 55,694 691,555
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 862 $ 921 $ 981
2 1,705 1,877 2,057
3 2,526 2,866 3,235
4 3,325 3,889 4,525
5 4,101 4,946 5,938
6 4,852 6,037 7,485
7 5,578 7,163 9,179
8 6,277 8,324 11,035
9 6,949 9,520 13,070
10 7,593 10,753 15,302
15 10,335 17,472 30,207
For policy years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A2
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 2
$1,200 Annual Premium
Using Current Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $ 100,913 $ 100,975 $ 101,036 $ 147 $ 209 $ 270
2 2,583 101,807 101,986 102,172 993 1,172 1,358
3 3,972 102,680 103,035 103,420 1,843 2,198 2,583
4 5,431 103,532 104,123 104,789 2,695 3,286 3,952
5 6,982 104,362 105,251 106,293 3,525 4,414 5,456
6 8,570 105,171 106,421 107,946 4,426 5,675 7,200
7 10,259 105,956 107,631 109,759 5,311 6,986 9,114
8 12,032 106,716 108,883 111,751 6,171 8,338 11,205
9 13,893 107,451 110,177 113,938 7,005 9,732 13,492
10 15,848 108,159 111,515 116,340 7,814 11,170 15,995
15 27,189 111,295 118,911 132,458 11,286 18,903 32,450
20 41,663 113,806 127,730 158,665 13,806 27,730 58,665
25 60,136 115,675 138,326 207,407 15,675 38,326 101,670
30 83,713 115,616 149,623 304,033 15,616 49,623 169,851
35 113,804 112,635 160,537 436,431 12,635 60,537 276,222
40 152,208 105,196 169,018 629,770 5,196 69,018 440,398
45 201,222 0 171,430 905,413 0 71,430 691,155
50 263,778 0 161,451 1,314,952 0 61,451 1,069,067
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 913 $ 975 $ 1,036
2 1,807 1,986 2,172
3 2,680 3,035 3,420
4 3,532 4,123 4,789
5 4,362 5,251 6,293
6 5,171 6,421 7,946
7 5,956 7,631 9,759
8 6,716 8,883 11,751
9 7,451 10,177 13,938
10 8,159 11,515 16,340
15 11,295 18,911 32,458
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A-3
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Male, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 2
$1,200 Annual Premium
Using Guaranteed Schedules Of Mortality and Expense Charges as well as Current
Fund Level Expenses
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,860 $100,920 $100,979 $ 94 $ 154 $ 213
2 2,583 101,700 101,872 102,051 886 1,058 1,237
3 3,972 102,516 102,855 103,222 1,679 2,018 2,385
4 5,431 103,309 103,869 104,502 2,472 3,032 3,665
5 6,982 104,075 104,914 105,899 3,238 4,077 5,062
6 8,570 104,816 105,990 107,424 4,070 5,245 6,679
7 10,259 105,527 107,095 109,088 4,882 6,450 8,443
8 12,032 106,210 108,230 110,906 5,665 7,685 10,360
9 13,893 106,863 109,394 112,889 6,417 8,949 12,444
10 15,848 107,484 110,589 115,055 7,139 10,243 14,710
15 27,189 110,050 116,949 129,241 10,042 16,940 29,233
20 41,663 111,451 123,724 151,157 11,451 23,724 51,157
25 60,136 110,984 130,110 184,677 10,984 30,110 84,677
30 83,713 107,589 134,649 242,661 7,589 34,649 135,565
35 113,804 0 134,385 332,127 0 34,385 210,207
40 152,208 0 124,163 451,788 0 24,163 315,935
45 201,222 0 0 602,953 0 0 460,270
50 263,778 0 0 802,201 0 0 652,196
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 860 $ 920 $ 979
2 1,700 1,872 2,051
3 2,516 2,855 3,222
4 3,309 3,869 4,502
5 4,075 4,914 5,899
6 4,816 5,990 7,424
7 5,527 7,095 9,088
8 6,210 8,230 10,906
9 6,863 9,394 12,889
10 7,484 10,589 15,055
15 10,050 16,949 29,241
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A4
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 1
$1,200 Annual Premium
Using Current Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% 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 $ 196 $ 258 $ 320
2 2,583 100,000 100,000 100,000 1,058 1,239 1,428
3 3,972 100,000 100,000 100,000 1,943 2,304 2,694
4 5,431 100,000 100,000 100,000 2,813 3,414 4,092
5 6,982 100,000 100,000 100,000 3,661 4,567 5,628
6 8,570 100,000 100,000 100,000 4,580 5,855 7,411
7 10,259 100,000 100,000 100,000 5,490 7,201 9,377
8 12,032 100,000 100,000 100,000 6,382 8,600 11,537
9 13,893 100,000 100,000 100,000 7,256 10,053 13,912
10 15,848 100,000 100,000 100,000 8,112 11,564 16,527
15 27,189 100,000 100,000 105,993 11,970 19,931 34,074
20 41,663 100,000 100,000 166,831 15,285 31,175 62,484
25 60,136 100,000 100,000 250,410 18,391 43,337 108,874
30 83,713 100,000 118,367 364,677 20,627 59,481 183,255
35 113,804 100,000 137,402 525,653 21,723 78,967 302,100
40 152,208 100,000 156,440 750,685 20,955 102,249 490,644
45 201,222 100,000 178,365 1,082,511 16,215 129,250 784,428
50 263,778 100,000 201,331 1,555,500 2,767 159,786 1,234,524
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 930 $ 992 $ 1,053
2 1,840 2,021 2,210
3 2,730 3,090 3,481
4 3,600 4,201 4,879
5 4,448 5,353 6,415
6 5,275 6,550 8,105
7 6,085 7,796 9,972
8 6,877 9,095 12,032
9 7,651 10,448 14,307
10 8,407 11,859 16,821
15 11,977 19,938 34,081
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A5
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 1
$1,200 Annual Premium
Using Guaranteed Schedules Of Mortality and Expense Charges as well as Current
Fund Level Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% 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 $ 150 $ 210 $ 271
2 2,583 100,000 100,000 100,000 965 1,140 1,323
3 3,972 100,000 100,000 100,000 1,801 2,147 2,522
4 5,431 100,000 100,000 100,000 2,620 3,194 3,841
5 6,982 100,000 100,000 100,000 3,414 4,275 5,285
6 8,570 100,000 100,000 100,000 4,276 5,484 6,959
7 10,259 100,000 100,000 100,000 5,119 6,735 8,791
8 12,032 100,000 100,000 100,000 5,936 8,024 10,789
9 13,893 100,000 100,000 100,000 6,728 9,352 12,972
10 15,848 100,000 100,000 100,000 7,495 10,720 15,360
15 27,189 100,000 100,000 100,000 10,723 18,022 31,020
20 41,663 100,000 100,000 147,983 12,880 26,253 55,424
25 60,136 100,000 100,000 214,037 14,021 35,887 93,060
30 83,713 100,000 100,000 300,023 13,795 47,261 150,765
35 113,804 100,000 105,078 412,564 10,849 60,389 237,106
40 152,208 100,000 114,528 557,499 3,091 74,855 364,379
45 201,222 0 123,259 749,507 0 89,318 543,121
50 263,778 0 129,781 991,376 0 103,001 786,806
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 884 $ 944 $ 1,004
2 1,747 1,922 2,104
3 2,588 2,934 3,309
4 3,406 3,980 4,628
5 4,201 5,062 6,072
6 4,971 6,179 7,654
7 5,714 7,330 9,386
8 6,431 8,519 11,284
9 7,123 9,747 13,367
10 7,790 11,015 15,655
15 10,730 18,029 31,027
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A6
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 2
$1,200 Annual Premium
Using Current Schedule Of Charges
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $ 100,928 $ 100,990 $ 101,052 $ 195 $ 256 $ 318
2 2,583 101,835 102,016 102,204 1,054 1,235 1,423
3 3,972 102,721 103,080 103,469 1,934 2,293 2,683
4 5,431 103,584 104,183 104,857 2,798 3,396 4,070
5 6,982 104,424 105,324 106,378 3,638 4,537 5,592
6 8,570 105,240 106,505 108,048 4,545 5,810 7,353
7 10,259 106,038 107,733 109,887 5,443 7,138 9,292
8 12,032 106,814 109,008 111,911 6,319 8,513 11,416
9 13,893 107,571 110,332 114,139 7,176 9,937 13,744
10 15,848 108,306 111,707 116,594 8,011 11,412 16,299
15 27,189 111,738 119,499 133,271 11,731 19,492 33,264
20 41,663 114,853 129,196 162,468 14,853 29,196 60,849
25 60,136 117,664 141,324 244,319 17,664 41,324 106,226
30 83,713 119,384 155,573 356,199 19,384 55,573 178,995
35 113,804 119,647 172,013 513,793 19,647 72,013 295,283
40 152,208 117,569 190,130 734,127 17,569 90,130 479,822
45 201,222 110,832 207,580 1,059,162 10,832 107,580 767,508
50 263,778 0 219,424 1,522,927 0 119,424 1,208,672
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 928 $ 990 $ 1,052
2 1,835 2,016 2,204
3 2,721 3,080 3,469
4 3,584 4,183 4,857
5 4,424 5,324 6,378
6 5,240 6,505 8,048
7 6,038 7,733 9,887
8 6,814 9,008 11,911
9 7,571 10,332 14,139
10 8,306 11,707 16,594
15 11,738 19,499 33,271
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A7
<PAGE>
FLEXIBLE PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY
Female, Issue Age 35, Nonsmoker
$100,000 Selected Face Amount,
Death Benefit Option 2
$1,200 Annual Premium
Using Guaranteed Schedules Of Mortality and Expense Charges as well as Current
Fund Level Expenses
<TABLE>
<CAPTION>
Death Benefit Cash Surrender Value
Premiums Assuming Hypothetical Gross Assuming Hypothetical Gross
End Of Accumulated Annual Investment Return of Annual Investment Return of
Policy at 5% Interest --------------------------- ---------------------------
Year Per Year 0% 6% 12% 0% 6% 12%
---- -------- -- -- --- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
1 $ 1,260 $100,882 $100,942 $101,002 $ 149 $ 209 $ 269
2 2,583 101,742 101,917 102,099 961 1,135 1,317
3 3,972 102,579 102,923 103,297 1,792 2,137 2,510
4 5,431 103,391 103,962 104,606 2,605 3,176 3,820
5 6,982 104,177 105,033 106,036 3,391 4,246 5,250
6 8,570 104,937 106,135 107,598 4,242 5,440 6,903
7 10,259 105,668 107,268 109,303 5,073 6,673 8,708
8 12,032 106,369 108,433 111,164 5,874 7,938 10,669
9 13,893 107,043 109,630 113,199 6,648 9,235 12,804
10 15,848 107,689 110,863 115,426 7,394 10,568 15,131
15 27,189 110,471 117,552 130,147 10,464 17,545 30,140
20 41,663 112,342 125,044 153,289 12,342 25,044 53,289
25 60,136 113,039 133,147 206,065 13,039 33,147 89,594
30 83,713 112,160 141,469 289,388 12,160 41,469 145,421
35 113,804 108,285 148,288 398,441 8,285 48,288 228,989
40 152,208 0 151,059 538,945 0 51,059 352,252
45 201,222 0 142,453 725,301 0 42,453 525,581
50 263,778 0 110,731 960,650 0 10,731 762,421
</TABLE>
End Of Account Value Assuming Hypothetical Gross
Policy Year Annual Investment Return of
----------- ---------------------------
0% 6% 12%
-- -- ---
1 $ 882 $ 942 $ 1,002
2 1,742 1,917 2,099
3 2,579 2,923 3,297
4 3,391 3,962 4,606
5 4,177 5,033 6,036
6 4,937 6,135 7,598
7 5,668 7,268 9,303
8 6,369 8,433 11,164
9 7,043 9,630 13,199
10 7,689 10,863 15,426
15 10,471 17,552 30,147
For Policy Years following Policy Year 15, Account Value equals Cash Surrender
Value assuming no increase in Selected Face Amount.
- --------------------------------------------------------------------------------
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 trust that these hypothetical rates of return can be
achieved for any one year or sustained over any period of time.
A8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned registrant hereby undertakes to file with the
Securities and Exchange Commission (the "Commission") such supplementary and
periodic information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
Article V of the Bylaws of MassMutual provide for indemnification of directors
and officers as follows:
Article V. Subject to limitations of law, the Company shall indemnify:
(a) each director, officer or employee;
(b) any individual who serves at the request of the Company as
Secretary, a director, board member, committee member, officer or
employee of any organization or any separate investment account; or
(c) any individual who serves in any capacity with respect to any
employee benefit plan; from and against all loss, liability and
expense imposed upon or incurred by such person in connection with
any action, claim or proceeding of any nature whatsoever, in which
such person may be involved or with which he or she may be
threatened, by reason of any alleged act, omission or otherwise
while serving in any such capacity.
Indemnification shall be provided although the person no longer serves
in such capacity and shall include protection for the person's heirs
and legal representatives. Indemnities hereunder shall include, but
not be limited to, all costs and reasonable counsel fees, fines,
penalties, judgments or awards of any kind, and the amount of
reasonable settlements, whether or not payable to the Company or to
any of the other entities described in the preceding paragraph, or to
the policyholders or security holders thereof.
Notwithstanding the foregoing, no indemnification shall be provided
with respect to:
(1) any matter as to which the person shall have been adjudicated
in any proceeding not to have acted in good faith in the
reasonable belief that his or her action was in the best
interests of the Company or, to the extent that such matter
relates to service with respect to any employee benefit plan,
in the best interests of the participants or beneficiaries of
such employee benefit plan;
(2) any liability to any entity which is registered as an
investment company under the Federal Investment Company Act of
1940 or to the security holders thereof, where the basis for
such liability is willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of office; and
<PAGE>
(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 the 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.
<PAGE>
CONTENTS OF POST-EFFECTIVE Amendment No. 3
This Post-Effective Amendment is comprised of the following documents:
The Facing Sheet.
The Prospectus consisting of 70 pages.
The Undertaking to File Reports.
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. Craig Waddington, FSA, MAAA.
The following Exhibits:
99. 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./1/
2. Not applicable.
3. Form of Distribution Agreements:
a. 1. Form of Distribution Servicing Agreement between MML
Distributors, LLC and MassMutual./2/
a. 2. Form of Co-Underwriting Agreement between MML
Investors Services, Inc. and MassMutual./2/
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./1/
b. By-Laws of MassMutual./1/
/1/Incorporated by reference to Registration Statement No. 333-22557 filed as an
exhibit with the Commission on February 28, 1997.
/2/Incorporated by reference to post-effective Amendment No. 1 to this
Registration Statement filed as an exhibit with the Commission effective May 1,
1996.
<PAGE>
7. Not applicable.
8. Participation Agreement with Oppenheimer Variable Account
Funds and MassMutual./1/
9. Not applicable.
10. Form of Application for a Flexible Premium Variable Whole Life
insurance policy.
11. Memorandum describing MassMutual issuance, transfer, and
redemption procedures for the Policy.
B. Opinion and Consent of Counsel as to the legality of the securities
being registered.
C. No financial statement will be omitted from the Prospectus pursuant
to Instruction 1(b) or (c) of Part I.
D. Not applicable.
E. Consent of Coopers & Lybrand L.L.P.
F. Opinion and consent of Craig Waddington, FSA, MAAA, as to actuarial
matters pertaining to the securities being registered.
G. Powers of Attorney/1/
/1/Incorporated by reference to Registration Statement No. 333-22557 filed as an
exhibit with the Commission on February 28, 1997.
/2/Incorporated by reference to post-effective Amendment No. 1 to this
Registration Statement filed as an exhibit with the Commission effective May 1,
1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this Post-Effective Amendment No. 3 to Registration Statement No.
33-89798 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 21st 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 21, 1998, as Attorney-in-Fact pursuant to
- ------------------- powers of attorney incorporated by reference.
*Richard M. Howe
As required by the Securities Act of 1933, this Post-Effective Amendment No. 3
to Registration Statement No. 33-89798 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 April 10, 1998
- ---------------------- Chairman of the Board
Thomas B. Wheeler
/s/ John J. Pajak* President, Chief Operating Officer April 10, 1998
- ------------------ and Director
John J. Pajak
/s/ Joseph M. Zubretsky* Executive Vice President, April 10, 1998
- ------------------------ Chief Financial Officer &
Joseph M. Zubretsky Chief Accounting Officer
/s/ Roger G. Ackerman Director --
- ---------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 10, 1998
- -------------------
James R. Birle
/s/ Gene Chao* Director April 10, 1998
- --------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 10, 1998
- -------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director April 10, 1998
- ------------------
Anthony Downs
<PAGE>
/s/ James L. Dunlap* Director April 10, 1998
- --------------------
James L. Dunlap
/s/ William B. Ellis* Director April 10, 1998
- ---------------------
William B. Ellis, Ph.D.
/s/ Robert M. Furek* Director April 10, 1998
- --------------------
Robert M. Furek
/s/ Charles K. Gifford* Director April 10, 1998
- -----------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 10, 1998
- ----------------------
William N. Griggs
/s/ George B. Harvey* Director April 10, 1998
- ---------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director April 10, 1998
- ---------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 10, 1998
- ---------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 10, 1998
- -------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 10, 1998
- --------------------
John F. Maypole
/s/ Alfred M. Zeien* Director April 10, 1998
- --------------------
Alfred M. Zeien
/s/ Richard M. Howe On April 10, 1998, as Attorney-in-
- ------------------- Fact pursuant to powers of attorney.
*Richard M. Howe
<PAGE>
REPRESENTATION BY REGISTRANT'S COUNSEL
--------------------------------------
As counsel to the Registrant, I, Richard M. Howe, have reviewed this
Post-Effective Amendment No. 3 to Registration Statement No. 33-89798 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/ Richard M. Howe
-------------------
Richard M. Howe
Second Vice President & Assoc. General Counsel
Massachusetts Mutual Life Insurance Company
<PAGE>
EXHIBIT LIST
99.A.5. Form of Flexible Premium Variable Whole Life Insurance Policy.
99.A.10 Form of Application for a Flexible Premium Variable Whole Life
insurance policy.
99.A.11 Memorandum describing MassMutual issuance, transfer, and
redemption procedures for the Policy.
99.B. Opinion and Consent of Richard M. Howe
99.E. Consent of Coopers & Lybrand L.L.P.
99.F. Opinion and Consent of Craig Waddington
<PAGE>
Exhibit 99.A.5
[LOGO OF MASSMUTUAL(R) APPEARS HERE]
Massachusetts Mutual Life Insurance Company
Springfield MA 01111-0001
- ----------------
Flexible Premium
Variable Life
Insurance Policy
- --------------------------------------------------------------------------------
Policy Number
Insured
Selected Face Amount
- --------------------------------------------------------------------------------
Dear Policy Owner:
READ YOUR POLICY CAREFULLY. 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 any premium paid for it minus
any amounts withdrawn and minus any policy debt.
Signed for Massachusetts Mutual Life Insurance Company.
Sincerely yours,
/s/ [SIGNATURE APPEARS HERE] /s/ Thomas J. Finnegan, Jr.
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.
960-NY-9400
<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 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 that 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 the 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 the monthly charges for a
month exceed the value, the policy will terminate at the end of 61 days. There
is, however, a right to reinstate the policy.
Other rights are available while the Insured is living. These include the rights
to:
. Assign this policy;
. Change the Owner or any Beneficiary;
. Surrender this policy;
. Make withdrawals;
. Make loans;
. Change the Selected Face Amount;
. Change the Death Benefit Option;
. Allocate net premiums among the Guaranteed Principal Account and the
divisions of the Separate Account; and
. Transfer values between the Guaranteed Principal Account and the
divisions of the Separate Account.
This 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.
960-NY-9400
<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 $ 100,000
Issue Date Jan 01 1995
Policy Date Jan 01 1995
Maturity Date Jan 01 2060
Insured's Age on Policy Date 35 Male
- --------------------------------------------------------------------------------
BASIC POLICY INFORMATION
- ------------------------
Selected Minimum Death
Plan Face Amount Face Amount Benefit Option
- ---- ----------- ----------- ---------------
Flexible Premium $100,000 See Minimum Face 1 (See Part 5)
Variable Life Amount provision
- --------------------------------------------------------------------------------
PREMIUM INFORMATION As of Jan 01 1995
- -------------------
First Premium $1,200.00
Planned Annual Premium $1,200.00
Planned Premium on other frequencies is as follows:
Semiannual Quarterly Monthly
---------- --------- -------
$600.00 $300.00 $100.00
The maximum limit for premiums in any Policy Year is the greatest of: $1,310.00;
the amount of premiums paid in the preceding Policy Year; and the highest amount
that would not increase the amount of insurance that requires a charge.
For each Policy Year, Net Premium will not be less than 96.0% of premium paid in
that Policy Year.
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT INFORMATION (See The Separate Account provision in Part 3)
- ----------------------------
The Separate Account referred to in this policy is Massachusetts Mutual Variable
Life Separate Account I.
Policy No. 0 000 000
- -1-
<PAGE>
The divisions of the Separate Account are:
MML Equity Oppenheimer Capital Appreciation
MML Money Market Oppenheimer Growth
MML Managed Bond Oppenheimer Global Securities
MML Blend Oppenheimer Strategic Bond
The types of investments and the objectives for each division are given in the
Prospectus.
- --------------------------------------------------------------------------------
LIMITATIONS ON TRANSFERS
Transfers may only be in whole-number percentages or dollar-and-cent amounts.
Transfers of values from the Guaranteed Principal Account to the Separate
Account are limited to one each Policy Year. Any transfer from the Guaranteed
Principal Account cannot be more than 25% of the fixed account value of this
policy on the date the transfer is made.
As needed to comply with Section 404(c) of ERISA, we reserve the right to limit
transfers such that no transfers may be made for at least 90 days after the
preceding transfer. Any such limitation would not apply to a transfer of all
funds in the Separate Account to the Guaranteed Principal Account, to transfers
resulting from a policy loan, or to automated transfers in connection with any
program the Company has in place.
- --------------------------------------------------------------------------------
OTHER INFORMATION
Owner and Beneficiary - See application attached to this policy.
Loan Interest Rate - See application attached to this policy.
BASIS OF COMPUTATION - The Minimum Annual Interest Rate For The Guaranteed
- --------------------
Principal Account is 3%. The Mortality Table is shown in the Table(s) Of
Maximum Monthly Mortality Charges.
Policy No. 0 000 000
- -1- continued
<PAGE>
TABLE OF MAXIMUM MONTHLY MORTALITY CHARGES
These Maximum Monthly Mortality charges are for each $1,000 of insurance that
requires a charge. These charges apply to the original selected face amount of
$100,000, issued on Jan 01 1995.
POLICY YEAR MAXIMUM MONTHLY POLICY YEAR MAXIMUM MONTHLY
BEGINNING MORTALITY CHARGE BEGINNING MORTALITY CHARGE
- --------- ---------------- --------- ----------------
Jan 01 1995 0.14096 Jan 01 2030 2.94130
Jan 01 1996 0.14764 Jan 01 2031 3.31274
Jan 01 1997 0.15683 Jan 01 2032 3.63093
Jan 01 1998 0.16685 Jan 01 2033 4.05839
Jan 01 1999 0.17854 Jan 01 2034 4.54126
Jan 01 2000 0.19107 Jan 01 2035 5.06274
Jan 01 2001 0.20611 Jan 01 2036 5.62182
Jan 01 2002 0.22115 Jan 01 2037 6.21387
Jan 01 2003 0.23870 Jan 01 2038 6.83324
Jan 01 2004 0.25626 Jan 01 2039 7.49616
Jan 01 2005 0.27717 Jan 01 2040 8.22966
Jan 01 2006 0.29975 Jan 01 2041 9.05445
Jan 01 2007 0.32401 Jan 01 2042 9.99708
Jan 01 2008 0.34996 Jan 01 2043 11.07332
Jan 01 2009 0.37927 Jan 01 2044 12.26712
Jan 01 2010 0.41026 Jan 01 2045 13.55591
Jan 01 2011 0.44713 Jan 01 2046 14.91787
Jan 01 2012 0.48989 Jan 01 2047 16.34412
Jan 01 2013 0.53771 Jan 01 2048 17.80841
Jan 01 2014 0.59311 Jan 01 2049 19.33267
Jan 01 2015 0.65444 Jan 01 2050 20.94168
Jan 01 2016 0.72255 Jan 01 2051 22.66794
Jan 01 2017 0.79493 Jan 01 2052 24.57677
Jan 01 2018 0.87327 Jan 01 2053 26.76407
Jan 01 2019 0.96182 Jan 01 2054 29.63735
Jan 01 2020 1.06061 Jan 01 2055 33.93112
Jan 01 2021 1.17052 Jan 01 2056 41.27938
Jan 01 2022 1.29585 Jan 01 2057 56.04155
Jan 01 2023 1.43921 Jan 01 2058 AND LATER 83.33333
Jan 01 2024 1.60155
Jan 01 2025 1.78129
Jan 01 2026 1.97513
Jan 01 2027 2.18574
Jan 01 2028 2.41241
Jan 01 2029 2.66044
Commissioners 1980 Standard Ordinary Nonsmoker Mortality Table - Male
POLICY NO. 0 000 000
- -2-
<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 that apply are shown below.
POLICY YEAR MINIMUM FACE POLICY YEAR MINIMUM FACE
BEGINNING AMOUNT PERCENTAGE BEGINNING AMOUNT PERCENTAGE
- --------- ----------------- --------- -----------------
Jan 01 1995 438% Jan 01 2030 155%
Jan 01 1996 424% Jan 01 2031 152%
Jan 01 1997 410% Jan 01 2032 148%
Jan 01 1998 396% Jan 01 2033 145%
Jan 01 1999 383% Jan 01 2034 143%
Jan 01 2000 370% Jan 01 2035 140%
Jan 01 2001 358% Jan 01 2036 138%
Jan 01 2002 347% Jan 01 2037 135%
Jan 01 2003 335% Jan 01 2038 133%
Jan 01 2004 324% Jan 01 2039 131%
Jan 01 2005 314% Jan 01 2040 129%
Jan 01 2006 304% Jan 01 2041 127%
Jan 01 2007 294% Jan 01 2042 126%
Jan 01 2008 285% Jan 01 2043 124%
Jan 01 2009 276% Jan 01 2044 123%
Jan 01 2010 268% Jan 01 2045 121%
Jan 01 2011 259% Jan 01 2046 120%
Jan 01 2012 251% Jan 01 2047 119%
Jan 01 2013 244% Jan 01 2048 118%
Jan 01 2014 236% Jan 01 2049 117%
Jan 01 2015 229% Jan 01 2050 116%
Jan 01 2016 223% Jan 01 2051 115%
Jan 01 2017 216% Jan 01 2052 114%
Jan 01 2018 210% Jan 01 2053 112%
Jan 01 2019 204% Jan 01 2054 111%
Jan 01 2020 199% Jan 01 2055 110%
Jan 01 2021 193% Jan 01 2056 109%
Jan 01 2022 188% Jan 01 2057 107%
Jan 01 2023 183% Jan 01 2058 106%
Jan 01 2024 179% Jan 01 2059 104%
Jan 01 2025 174% Jan 01 2060 and later 100%
Jan 01 2026 170%
Jan 01 2027 166%
Jan 01 2028 162%
Jan 01 2029 158%
Nonsmoker Class.
POLICY NO. 0 000 000
- -3-
<PAGE>
TABLE OF SURRENDER CHARGES
The following charges apply to the original Selected Face Amount of $100,000
issued on Jan 1, 1995.
The charges are the sum of A and ( B multiplied by C ).
Date A (B x C)
---- - - -
Jan 01 1995 $500.00 B 1
Jan.01 1996 500.00 B 1
Jan 01 1997 500.00 B 1
Jan 01 1998 500.00 B 1
Jan 01 1999 500.00 B 1
Jan 01 2000 400.00 B 1
Jan 01 2001 300.00 B 1
Jan 01 2002 200.00 B 1
Jan 01 2003 100.00 B 1
Jan 01 2004 0 B 1
Jan 01 2005 0 B 1
Jan 01 2006 0 B .90
Jan 01 2007 0 B .75
Jan 01 2008 0 B .55
Jan 01 2009 0 B .30
Jan 01 2010 0 B 0
Factors A and C grade uniformly each month between the dates shown.
Factor B equals:
26% of total premiums paid from 0 through $1,012.00; plus
4% of total premiums paid from $1,012.01 through $3,036.00.
Policy No. 0 000 000
- -4-
<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: You buy a policy that insures your own life and name yourself as
Owner. In this case, you are both the Insured and Owner. If you buy a
policy that insures your son and name yourself 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, Maturity
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, 19X6. The first Policy Anniversary Date is
June 10, 19X7. The period from June 10, 19X6, through June 9, 19X7, 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.
The Maturity Date is also shown on the Schedule Page. If sufficient premiums are
paid, the policy will continue in force to, but not including, the Maturity
Date. Then it matures and the insurance terminates. Any cash surrender value the
policy has on the Maturity Date will be paid to the Owner. The payment of
planned premiums does not guarantee that this policy will continue in force to
the Maturity Date.
The Monthly Calculation Date is the monthly date on which we deduct monthly
charges for this policy. The first Monthly Calculation Date is the Policy Date.
Subsequent Monthly Calculation Dates are the same day of each month thereafter.
-5-
<PAGE>
-6-
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 that 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 that is on, or next follows, the latest of:
. The Policy Date;
. 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 Contestability
We rely on all statements made by or for the 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, or any change in the Death Benefit
Option 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 or change the Death Benefit Option, 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 or change became effective.
Except for any increases in the Selected Face Amount and any change in Death
Benefit Option 1 to Death Benefit Option 2 applied for after the Issue Date, we
cannot contest the validity of this policy after it has been in force during the
lifetime of the Insured for two years from its Issue Date. For any increase in
the Selected Face Amount, we cannot contest the validity of that increase:
. After it has been in effect for two years during the lifetime of the
Insured, if the increase is not provided by an insurability protection
type rider this policy has; and
. After the policy has been in force during the lifetime of the Insured
for two years after the Issue Date of any insurability protection type
rider this policy has, if the increase is provided by that rider.
For any change in Death Benefit Option 1 to Death Benefit Option 2, we cannot
contest the validity of that change after it has been in effect for two years
during the lifetime of the Insured.
Misstatement Of Age Or Sex
If the Insured's sex or date of birth 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
monthly charge according to the correct age and sex. If the adjustment is made
before the Insured dies, then future monthly charges will be based on the
correct age and sex.
Currency
All payments made to us and by us will be in the lawful currency of the United
States of America. All monetary amounts shown in this policy are in U.S.
dollars.
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:
<PAGE>
. 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 less any surrender
charges that apply; and
. This policy is not surrendered.
The factors that can affect this policy's account value include:
. The amount and timing of premium payments;
. Any elected changes in the Selected Face Amount;
. Any elected changes in the Death Benefit Option;
. Any withdrawals or transfers of values;
. Any changes in any riders;
. Any outstanding policy debt;
. 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;
and
. 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 01111-0001.
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 Premiums
The planned annual premium for this policy is shown on the Schedule Page.
Planned premiums on other frequencies are also shown on that page. The frequency
of planned premiums for this policy is as elected in the application. This
frequency may be changed by giving us advance written notice.
We also provide a pre-authorized payment plan. This plan, and any other
alternate premium plans we provide, are covered by the rules and rates we set.
The payment of planned premiums on the frequency elected does not guarantee that
this policy will continue in force.
Premium Flexibility And Premium Notices
After the first premium has been paid, there is no requirement that any amount
of premium be paid on any date. Subject to the Right To Refund Premiums
provision in this Part, while this 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 $10 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 premium according to the amount and
frequency in effect. We will stop sending notices for the planned premium if no
premium has been paid for l8 consecutive months. However, if a premium is paid
after that time, we will send notices for the planned 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.
-7-
<PAGE>
-8-
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 Premiums
We have the right to promptly refund any amount of premium paid if application
of that premium to the account value would increase the amount of insurance that
requires a charge. This right is limited to premiums paid in a Policy Year that
exceed the maximum limit shown on the Schedule Page.
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 Premiums
Each net premium we receive will be allocated among the Guaranteed Principal
Account and the divisions of the Separate Account, according to the net premium
allocation then in effect. We will allocate the first net premium payment as of
the Register Date.
The net premium allocation is specified in the application for this policy. This
allocation will remain in effect until changed by any later election
satisfactory to us and received at our Home Office. The amount of each net
premium we receive for this policy for allocation to a division of the Separate
Account will be applied to purchase accumulation units for this policy in that
division. See the Purchase And Sale Of Accumulation Units provision in Part 3.
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
monthly charges connected with them.
The Separate Account And The Guaranteed Principal Account
The Separate Account
The Separate Account shown on the Schedule Page is a separate investment account
we have established under Massachusetts law. It is also subject to the laws of
the state in which this policy was delivered.
The Separate Account has a number of divisions. Each division invests in shares
of an investment Fund. The divisions 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. That 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 to our general account any assets exceeding the reserves and other
liabilities of the Separate Account. The income and the realized and unrealized
capital gains and losses from each division of the Separate Account are credited
to or charged against that division without regard to any of our other income,
capital gains, or capital losses. The assets of the Separate Account are
protected from the claims of our creditors.
Changes In The Separate Account
We have 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 division, we have the right to
substitute new Funds.
<PAGE>
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, evidence of
the approval of a material change by the Massachusetts Insurance Commissioner
will be filed with the insurance supervisory official of the state where this
policy was delivered. We will notify the Owner if the Massachusetts Insurance
Commissioner approves any material change. Any change in the plan of operations
for the Separate Account will be approved by the New York Superintendent of
Insurance before it becomes effective.
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. The
value of accumulation units is discussed further in Part 7.
Purchase And Sale Of Accumulation Units
Amounts are credited to and taken from divisions of the Separate Account by
purchasing and selling accumulation units. Accumulation units will be purchased
and sold at the unit value as of the Valuation Time on the Valuation Date of
purchase or sale. The number of units purchased or sold will be the amount of
money for purchase or sale divided by that unit value.
Example: The amount applied is $550. The date of purchase is June 10, 19X6. 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 premium or a written request that causes us to purchase
or sell accumulation units, 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 or sold before the Register
Date.
The Guaranteed Principal Account
The Guaranteed Principal Account is part of our general account. It has no
connection with, and does not depend on, the investment performance of the
Separate Account. We have a right to establish additional guaranteed accounts
from time to time.
Values Of This Policy
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 Of Policy
The variable account value of this policy reflects:
. The net premiums for this policy allocated to the Separate Account;
. Any amounts for this policy transferred into the Separate Account from
the Guaranteed Principal Account;
. Any amounts transferred or withdrawn from the Separate Account for
this policy;
. Any monthly charges for this policy deducted from the Separate
Account; and
. The net investment experience of the Separate Account.
-9-
<PAGE>
- 10 -
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 are discussed in Part 2, and
monthly deductions are discussed in this Part. Transfers and withdrawals
are discussed in Part 4.
The value of the accumulation units credited to this policy 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.
The variable account value of this policy on any date is the total of the
values of the accumulation units credited to this policy in each division of
the Separate Account.
Fixed Account Value Of Policy
The fixed account value of this policy is the accumulation at interest of:
. The net premiums for this policy allocated to the Guaranteed
Principal Account; plus
. Any amounts for this policy transferred into the Guaranteed
Principal Account from the Separate Account; less
. Any amounts for this policy transferred or withdrawn from the
Guaranteed Principal Account; and less
. Any monthly charges for this policy deducted from the Guaranteed
Principal Account.
Interest On Fixed Account Value
The fixed account value of this policy earns interest at an effective
annual rate defined below. Interest is credited daily to and including the
date the fixed account value is determined.
For any fixed account value equal to the amount of any policy loan, the
interest rate we use will be the daily equivalent of the greater of:
. The annual loan interest rate in effect on the previous Monthly
Calculation Date less not more than 2%; and
. The minimum annual interest rate for the Guaranteed Principal Account
shown in the Basis Of Computation section on the Schedule Page.
For any fixed account value in excess of the amount of any policy loan, the
interest rate we use will be the daily equivalent of the greater of:
. The minimum annual interest rate for the Guaranteed Principal Account;
and
. An alternate annual rate established by us.
Monthly Policy Charges
Monthly Charges
Charges will be deducted monthly from the account value of
this policy. The charges are due on each Monthly Calculation Date.
Monthly charges for this policy 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). Deductions will be
made, and values will be determined, on the Valuation Date that is on, or
next follows, the latest of:
. The Register Date;
. The date the deduction is due; and
. The date we receive the amount of premium needed to prevent
termination, as discussed in the Grace Period And Termination
provision in this Part.
We assess three types of monthly charges: an administrative charge, a mortality
charge, and a rider charge; each is discussed below.
<PAGE>
Administrative Charge
The amount of the monthly administrative charge will be determined by us.
However, it will not be greater than the maximum determined as follows.
(1) We determine the ratio of:
. The Consumer Price Index for September of the calendar year preceding
the date the charge is due; to
. The Consumer Price Index for September, 1985.
(2) We multiply the result of step (1) by $5.00.
(3) We compare the result of step (2) to $9.00; the lower amount is
the maximum administrative charge.
The Consumer Price Index we use in this calculation is the Consumer Price Index
for all Urban Consumers (U.S. city average - all items) published by the U.S.
Department of Labor. If this Index is no longer published or is changed, we can,
with the approval of the Superintendent of Insurance for the State of New York,
use another index. The new index will be one that, in our judgement, is most
comparable to the index we were using. Then, the Consumer Price Index will mean
the new index.
Mortality Charge
The maximum monthly mortality charges for each $1,000 of insurance
that requires a charge are shown in the Table(s) Of Maximum Monthly Mortality
Charges. Maximum charges for each amount of the Selected Face Amount issued
in a distinct underwriting classification will be shown in a separate table.
If there is more than one table, the table that applies to the most recent
increase will be used up to the amount to which that table applies. If the
amount of insurance that requires a charge is increased due to the Minimum
Face Amount (see Part 5), the table that applies to the most recent increase
will also be used for such increase. For any insurance in excess of the
amount applicable to the most recent table, the next most recent table(s), up
to the amount of each table, will be used.
We have the right to charge less than the maximum charges shown in the
table(s). Any change in these charges will apply to all individuals who are
in the same class as the Insured. These charges may differ depending on
whether or not this policy is in a tax-qualified pension or profit sharing plan.
The amount of insurance that 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 of this policy after all additions and
deductions other than the deduction of the monthly charges.
(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, as computed in (a) above, from the amount
determined in (c) above. The result is the amount of insurance that requires
a charge.
Rider Charge
The monthly charges for any rider are shown in a table of charges for that
rider.
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Grace Period And Termination
If the account value less any policy debt is not 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 $10) 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 needed to increase the
account value to cover the charges.
During the grace period, the policy will continue in force. The policy will
terminate 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. Rights and benefits are also 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 rights to:
. Change the frequency of planned premiums;
. Change the premium payment plan; and
. 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 the Borrowing On This Policy section in this
Part for a discussion of policy debt.
Changing The Owner Or Beneficiary
The Owner or any Beneficiary may be changed while the Insured is living. 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 of values may be made upon 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 sold units 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 sold units to the Guaranteed Principal
Account.
<PAGE>
. 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 (excluding any outstanding policy loans) to purchase
accumulation units in one or more divisions of the Separate Account.
Transfers will be made 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 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 the
Policy Anniversary Dates.
How Dividends May Be Used
Dividends may be used in a number of ways. These are called dividend options.
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.
A dividend option may be elected in the application. It may be changed by the
Owner at a later time. If no dividend option is elected in the application, we
will apply any dividends payable under the paid-up additions option.
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 surrender
charges that apply and less any policy debt. The surrender charge for this
policy is the sum of the surrender charges for the original Selected Face Amount
and all increases in Selected Face Amount. These charges are shown in the
Table(s) Of Surrender Charges. There are separate tables of surrender charges
for any increase(s) in the Selected Face Amount.
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Making Withdrawals
After the first Policy Year, withdrawals may be made at any time while the
Insured is living. 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, as
described below. A withdrawal from the Guaranteed Principal Account will be made
by reducing the value in that Account to provide the amount of the withdrawal. A
withdrawal from a division of the Separate Account will be made by selling a
sufficient number of accumulation units to provide the amount of the withdrawal.
The Selected Face Amount will be reduced by the amount of withdrawal if:
. Death Benefit Option 1 as described in the Death Benefit Options
provision in Part 5 is in effect; and
. We have not received evidence of insurability satisfactory to us.
If the Selected Face Amount is reduced due to a withdrawal, we will send an
amended Schedule Page reflecting the change. We will also send any amended
Tables pages that may be required. However, the surrender charges for this
policy will not be reduced as a result of this reduction in the Selected Face
Amount. We have the right to require that the policy be sent to us so that the
changes can be made.
Withdrawals will be subject to the limits set forth below.
. The minimum amount of a withdrawal (including the withdrawal charge)
is $l00.
. A withdrawal charge of 2% of the withdrawal, but not more than $25,
will be deducted from the total amount of the withdrawal on any date.
The charges shown in the Table Of Surrender Charges do not apply to
any withdrawal.
. The maximum amount of a withdrawal (including the withdrawal charge)
on any date is 75% of the cash surrender value of this policy on that
date.
Example: Death Benefit Option 1 is in effect and you make a withdrawal without
furnishing us satisfactory evidence of insurability. Prior to your
withdrawal, your policy has a Selected Face Amount of $50,000 and an
account value of $20,000. If you make a withdrawal of $5,000, the
account value will be reduced to $15,000 and the Selected Face Amount
will be reduced to $45,000. Of the $5,000 withdrawn, $25 is the
withdrawal charge and $4,975 is paid to you.
We reserve the right to prohibit withdrawals that would cause the Selected Face
Amount to be reduced to an amount less than $25,000.
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 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; or
. The Securities and Exchange Commission (or its successor) determines
that a state of emergency exists.
<PAGE>
If payment is delayed for more than 10 working days, interest will be added. The
amount of interest will be the same as would be paid for the same period of time
under Option D of the payment options. See Part 6 for a description of Option D.
Borrowing On This Policy
Right To Make Loans
After the first Policy Year, 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) 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 in Part 3.
Maximum Loan Available
The maximum amount that can be borrowed on any date is determined as follows.
(1) We subtract from the account value any surrender charges that would
apply if the policy were surrendered on that date.
(2) We calculate 90% of the amount determined in (1) above.
(3) We subtract any policy debt from the amount determined in (2) above. The
result is the maximum amount that can be borrowed.
Interest On Loans
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.
The type of interest rate on any loan is elected at the time of application for
this policy and cannot be changed. The two types of interest rates available
are:
(1) Fixed loan rate of 6% per year; and
(2) An adjustable loan rate. Such rate is an annual rate set by us. This rate
may change from year to year. Each year we will set the rate that will apply
for the next Policy Year.
Each year there is a maximum limit on the interest rate we can set. That
limit is based on a Published Monthly Average. That Average will be:
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. The Monthly Average Corporates yield shown in Moody's Corporate Bond
Yield Averages, as published by Moody's Investors Service, Inc., or
any successor to that service; or
. If that Monthly Average is no longer published, a substantially
similar average, established by regulation issued by the insurance
supervisory official of the state where this policy was delivered.
The maximum limit is the published Monthly Average for the calendar month ending
two months before the Policy Year begins or, if higher, the minimum annual
interest rate for the Guaranteed Principal Account shown in the Basis Of
Computation section on the Schedule Page plus 1%.
Example: A Policy Year begins on June 10, 19X6. The calendar month ending two
months before that date is March. The loan interest rate for the
Policy Year beginning June 10, 19X6, will not be greater than the
Published Monthly Average for March, 19X6. However, if the minimum
annual interest rate for the Guaranteed Principal Account (plus 1%)
is higher than the Average, then that minimum annual rate (plus 1%)
will be the maximum loan interest rate for that Policy Year.
If the maximum limit for a Policy Year is at least 1/2% higher than the rate in
effect for the previous year, we may increase the rate to no more than that
limit.
If the maximum limit for a Policy Year is at least 1/2% lower than the rate in
effect for the previous year, we must decrease the rate to not more than that
limit.
We will notify the Owner of the initial rate on a loan at the time the loan is
made. While any loan is outstanding, we will send the Owner reasonable advance
notice of any change in the interest rate. Any notice we send will state that
the loan interest rate is adjustable and will set forth the frequency at which
changes in the rate may be made.
Policy Debt Limit
Policy debt (which includes accrued interest) may not equal or exceed the
account value less any surrender charges that apply. 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, the account value will be reduced by any surrender charges
that apply and this policy will terminate at the end of those 31 days.
Repayment Of Policy Debt
All or part of any policy debt may be repaid at any time while the Insured is
living. However, policy debt can only be repaid while this policy is in force.
Any repayment of policy debt will first be allocated to the Guaranteed Principal
Account up to the amount of the policy loan that was attributed to the
Guaranteed Principal Account. Any repayment in excess of that amount will be
allocated among the Guaranteed Principal Account and the divisions of the
Separate Account according to the net premium allocation then in effect.
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.
<PAGE>
Reinstating This Policy
When Reinstatement Can Be Made
After this policy has terminated, it may be 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 5 years after the
date of termination and during the Insured's lifetime.
Requirements To Reinstate
Evidence of insurability satisfactory to us is 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 that is on, or next follows, the
date of reinstatement.
Right To Change The 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. Except for any increase elected under an insurability
protection type of rider, evidence of insurability, satisfactory to us, is
required for each increase. Any increase must be for at least $15,000, unless we
adopt rules that establish a lower minimum. When evidence of insurability is
required for an increase, a charge of $75 is deducted from the account value of
this policy as of the effective date of the increase; this charge is deducted
from each division of the Separate Account and 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 that
date.
Any increase elected under any insurability protection type of rider will be
effective as directed in that rider. Any other increase in the Selected Face
Amount will be effective on the Monthly Calculation Date that is on, or next
follows, the date we approve the application.
Mortality charges for each increase elected are determined and deducted from the
account value of this policy in accordance with the Monthly Charges provision.
These charges will be deducted from the account value beginning on the effective
date of the increase. Additional surrender charges will apply for each increase
elected.
The Owner has a "right to return" any increase in Selected Face Amount as set
forth for a new policy on the cover of this policy. However, this right applies
only to the increase and to any premiums paid on or after the date of the
application for that increase.
No increase in the Selected Face Amount can be elected after the Policy
Anniversary Date nearest the Insured's 80th birthday.
Decreases In The Selected Face Amount
After the first Policy Year, the Selected Face Amount may be decreased by the
Owner's written request. However, the decrease must not reduce the amount of
death benefit provided by the Death Benefit Option in effect on the date of the
decrease to an amount less than $50,000.
Any decrease is effective on the Monthly Calculation Date on or next following
the date we receive the written request. If a decrease follows one or more
increases, the decrease is taken from the most recent increase(s).
Any surrender charge due upon a decrease in the Selected Face Amount is deducted
from the account value on the effective date of the decrease. The charge is
deducted from each division of the Separate Account and 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 that date.
Evidence Of Changes
If the Selected Face Amount is changed, we will send an amended Schedule Page
reflecting that change. We will also send any revised or additional Tables pages
that may be required. If the Selected Face Amount is increased, we will also
send a copy of the application for the increase. However, we have the right to
require that the policy be sent to us so that the change can be made.
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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 since that time. 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 current Policy
Anniversary Date.
This report will also include any additional information required by applicable
law or regulation.
Illustrative Report
In addition to the periodic reports, we will, upon request, 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, reduced by 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 in effect for this policy is shown on the Schedule Page.
The Minimum Face Amount is discussed in the next provision.
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, 19X6. The account
value on that date is $50,000. The last Policy Anniversary Date was
May 2, 19X6. If the applicable Minimum Face Amount Percentage for the
Policy Year beginning May 2, 19X6, is 260%%, then the Minimum Face
Amount is 260% of $50,000, or $130,000.
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Changes In The Death Benefit Option
After the first Policy Year, the Death Benefit Option may be changed upon
written request. A change in the Death Benefit Option will be effective on the
Monthly Calculation Date that is on or next follows the date we approve the
change. For a change from Death Benefit Option 1 to Death Benefit Option 2, the
Selected Face Amount will be decreased by the amount of the account value on the
effective date of the change. For a change from Death Benefit Option 2 to Death
Benefit Option 1, the Selected Face Amount will be increased by the amount of
the account value on the effective date of the change. No change in Death
Benefit Option will be allowed if the Selected Face Amount after the change
would be less than $50,000 or any lower limit published in our manuals or
bulletins.
Any change from Death Benefit Option 1 to Death Benefit Option 2 requires a
written application and evidence of insurability satisfactory to us. In
addition, a charge of $75.00 will be deducted from the account value on the
effective date of the change. This charge will be taken from the divisions of
the Separate Account and from the Guaranteed Principal Account in proportion to
the values in each of those divisions and in the Guaranteed Principal Account
(excluding outstanding policy loans) on that date. No change from Death Benefit
Option 1 to Death Benefit Option 2 will be permitted after the Policy
Anniversary Date nearest the Insured's 80th birthday.
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.
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. 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.
Suicide Exclusion
Except for any increases in the Selected Face Amount, we will pay a limited
death benefit if the Insured commits suicide 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 amounts withdrawn and any
policy debt.
For any increase in the Selected Face Amount, we will pay a limited death
benefit if the Insured commits suicide within two years after 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.
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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 that 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 2.5% 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 $84.28 16 $6.30
2 42.66 17 6.00
3 28.79 18 5.73
4 21.86 19 5.49
5 17.70 20 5.27
6 14.93 21 5.08
7 12.95 22 4.90
8 11.47 23 4.74
9 10.32 24 4.60
10 9.39 25 4.46
11 8.64 26 4.34
12 8.02 27 4.22
13 7.49 28 4.12
14 7.03 29 4.02
15 6.64 30 3.93
For quarterly payment, multiply by 2.994. For semiannual payment,
multiply by 5.969. For annual payment, multiply by 11.865.
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 $3.01 $2.95 $3.00 $2.99 $2.97
40 45 3.18 3.11 3.17 3.16 3.14
45 50 3.40 3.30 3.39 3.38 3.34
50 55 3.67 3.53 3.66 3.65 3.58
55 60 4.03 3.82 4.02 3.99 3.86
60 65 4.49 4.18 4.47 4.42 4.18
65 70 5.13 4.63 5.10 4.99 4.51
70 75 6.01 5.21 5.93 5.69 4.82
75 80 7.21 5.94 7.03 6.51 5.06
80 85 8.87 6.89 8.44 7.39 5.20
85 11.18 8.09 10.19 8.21 5.26
* 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.
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 2.5% 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 3.25 $3.35 $3.45 $3.52 $3.57 $3.61
55 60 3.35 3.50 3.64 3.75 3.84 3.91
60 65 3.45 3.64 3.83 4.00 4.15 4.27
65 70 3.52 3.75 4.00 4.26 4.50 4.70
70 75 3.57 3.84 4.15 4.50 4.85 5.17
75 80 3.61 3.91 4.27 4.70 5.17 5.65
80 85 3.63 3.95 4.36 4.86 5.45 6.10
Payments Guaranteed For 10 Years
M50 M55 M60 M65 M70 M75
Age* F55 F60 F65 F70 F75 F80
M F
50 55 $3.24 $3.34 $3.44 $3.51 $3.56 $3.60
55 60 3.34 3.49 3.63 3.74 3.83 3.90
60 65 3.44 3.63 3.82 3.99 4.14 4.26
65 70 3.51 3.74 3.99 4.25 4.48 4.67
70 75 3.56 3.83 4.14 4.48 4.82 5.12
75 80 3.60 3.90 4.26 4.67 5.12 5.56
80 85 3.62 3.94 4.33 4.82 5.36 5.94
* 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.
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.
- 23 -
<PAGE>
- 24 -
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 $3.51 $3.66 $3.82 $3.99 $4.17 $4.35
55 60 3.66 3.83 4.02 4.22 4.44 4.66
60 65 3.82 4.02 4.24 4.49 4.76 5.04
65 70 3.99 4.22 4.49 4.80 5.14 5.49
70 75 4.17 4.44 4.76 5.14 5.57 6.02
75 80 4.35 4.66 5.04 5.49 6.02 6.60
80 85 4.54 4.88 5.31 5.84 6.48 7.22
* 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.
Electing A Payment Option
To elect any option, we require that a written 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 Payment Dates
The effective date of an option is the date the 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 Changes
If provided in the payment option election, all 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.
<PAGE>
Part 7. Notes On Our Computations
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. This asset charge will be not more than .00002455 for
each day of a Valuation Period. The Net Investment Factor may be 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,
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 that includes that date and the accumulation unit value on the preceding
Valuation Date.
Adjustments Of Units And Values
We have the right to split or consolidate the 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 mortality table for the minimum cash surrender values and for the maximum
monthly mortality charges is shown in each Table Of Maximum Monthly Mortality
Charges. The minimum annual rate used to credit interest on the fixed account
value of the policy is shown on the Schedule Page. The mortality table specified
applies to amounts in a standard underwriting classification. Appropriate
modifications are made to this table for any amount that 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
2.5%.
Method Of Computing Values
When required by the state where this policy was 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.
-25-
<PAGE>
WHERE TO FIND IT
Page No.
The Schedule Page......................................................... 1
Table Of Maximum Monthly Mortality Charges................................ 2
Table Of Minimum Face Amount Percentages.................................. 3
Table Of Surrender Charges................................................ 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, Issue Date, Maturity 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
Currency.................................................................. 6
Meaning Of In Force....................................................... 6
Home Office............................................................... 7
Part 2. - Premium Payments.................................................... 7
The First Premium......................................................... 7
Planned Premiums.......................................................... 7
Premium Flexibility And Premium Notices................................... 7
Where To Pay Premiums..................................................... 8
Right To Refund Premiums.................................................. 8
Net Premium............................................................... 8
Allocation Of Net Premiums................................................ 8
Part 3. - Accounts, Values, and Charges....................................... 8
The Separate Account And The Guaranteed Principal Account................... 8
The Separate Account...................................................... 8
Changes In The Separate Account........................................... 8
Accumulation Units........................................................ 9
Purchase And Sale Of Accumulation Units................................... 9
The Guaranteed Principal Account.......................................... 9
Values Of This Policy....................................................... 9
Account Value Of Policy................................................... 9
Variable Account Value Of Policy.......................................... 9
Fixed Account Value Of Policy............................................ 10
Interest On Fixed Account Value.......................................... 10
Monthly Policy Charges..................................................... 10
Monthly Charges.......................................................... 10
Administrative Charge.................................................... 11
Mortality Charge......................................................... 11
Rider Charge............................................................. 11
Grace Period And Termination............................................. 12
Part 4. - Life Benefits...................................................... 12
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........................................... 13
Policy Is Participating.................................................. 13
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....................................................... 14
How We Pay............................................................... 14
Borrowing On This Policy................................................... 15
Right To Make Loans...................................................... 15
Effect Of Loan........................................................... 15
Maximum Loan Available................................................... 15
Interest On Loans........................................................ 15
Policy Debt Limit........................................................ 16
Repayment Of Policy Debt................................................. 16
Other Borrowing Rules.................................................... 16
Reinstating This Policy.................................................... 17
When Reinstatement Can Be Made........................................... 17
Requirements To Reinstate................................................ 17
Right To Change The Selected Face Amount................................... 17
Increases In The Selected Face Amount.................................... 17
Decreases In The Selected Face Amount.................................... 17
Evidence Of Changes...................................................... 17
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...................................................... 18
Changes In The Death Benefit Option...................................... 19
When We Pay.............................................................. 19
Interest On Death Benefit................................................ 19
Suicide Exclusion........................................................ 19
Part 6. - Payment Options.................................................... 19
Availability Of Options.................................................. 19
Minimum Amounts.......................................................... 20
Description Of Options................................................... 20
Electing A Payment Option................................................ 24
Effective Date And Payment Dates......................................... 24
Withdrawals And Changes.................................................. 24
Income Protection........................................................ 24
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............................................... 25
Any riders and endorsements, and a copy of the application for the policy,
follow page 25.
<PAGE>
- -------------------- ---------------------
[LETTERHEAD OF MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY APPEARS HERE]
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
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.
<PAGE>
Exhibit 99.A.10
[LOGO OF MASSMUTUAL APPEARS HERE] Life
Part 1 (A10NY)
Application Package - New York Version
This application package may be used to apply for the following
individual policies:
. All New Non-Qualified Life Insurance Policies for One Insured
--------------------------------------------------------------------
Contents
This package includes:
. Part 1 of Application
. Investor Account Card for Variable Life
. Agent's Statement
. Temporary Life Insurance Receipt
. MIB and Fair Credit Reporting Act Notice
--------------------------------------------------------------------
See additional information on reverse side
Massachusetts Mutual Life Insurance Company and Subsidiaries
Springfield MA 01111-0001
<PAGE>
Notes On Using This Application Package
- --------------------------------------------------------------------------------
Carefully review the Agent's Guide Booklet for specific instructions and details
---------------------
for completing the application forms.
. Any non-application pages that are not needed may be removed from the
package.
. Do not use this application for changes, additions or reinstatements,
or for increases on universal life (UL) or variable life (VL) policies;
instead, use the appropriate Change Application.
. VL monies must be remitted immediately; do not hold them while
completing requirements for other products being applied for
concurrently.
. Fully complete the Agent's Statement. Do not omit item 9 (Telephone
Numbers).
. If more space is needed in answering questions, use the "Remarks"
sections included throughout the application.
Checklist
================================================================================
For Enterprise Plus (Universal Life):
[_] Do not use item 20(b), "Initial Additional Premium," for Section
------
1035 Exchanges.
For Variable Life Select (VL):
[_] Do not use item 20(b), "Initial Additional Premium," for Section
------
1035 Exchanges.
[_] Complete and forward the Investor Account Card (IAC).
[_] Give owner the current VL Select Prospectus.
Signature Instructions for Part 1 of Application (Agreement and Signatures):
[_] Proposed Insured must always sign (if under age 16, parent or legal
guardian signs in that space).
[_] Applicant, if different from the Proposed Insured, must also sign.
[_] Owner must always sign at the bottom of the page, even if already
------ ---------------
signed as Insured or as Applicant.
---------------------------------
For Conversion, Exchange, or Option Exercise:
[_] In all cases, the Owner and any Assignee of the original policy sign
on the right side of the signature area.
[_] The Proposed Insured, if not the Owner of the original policy, must
sign on the left side.
[_] For Option Exercise, the Proposed Insured and the Owner must always
sign, even if no additional amount of insurance is applied for.
--------------------------------------------------------
For Prepaid Cases:
[_] Complete the health questions on the Temporary Life Insurance
Receipt.
[_] If all health questions are answered "No":
---
[_] Finish completing the Receipt and give Premium Payer Part to the
client.
[_] Obtain a separate check for VL Premium.
[_] Obtain a separate check for Adjustable Life Insurance Purchase
Rider (ALIR) payment.
[_] If any health question is answered "Yes" or is left unanswered:
---------------------
[_] Do not take any monies.
------
[_] Do not give the receipt.
------
Give Client:
[_] MIB and Fair Credit Notice, and
[_] Buyer's Guide (if applicable).
<PAGE>
APPLICATION NO.
LIFE INSURANCE APPLICATION (PART 1)
To Massachusetts Mutual Life Insurance Company
Springfield, Massachusetts 01111-0001
<TABLE>
<CAPTION>
<S> <C> <C>
For: [_] New Life Insurance Policy [_] New Policy as Exchange of Term Insurance [_] Conversion of Term Insurance
[_] New Policy Under Guaranteed Insurability Option [_] ______________________________
- -----------------------------------------------------------------------------------------------------------------------
Client Data
- -----------------------------------------------------------------------------------------------------------------------
1. Name of Proposed Insured first name middle name
(hereinafter referred to [_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_][_][_][_][_][_][_][_]
as Insured) last name suffix (e.g., Jr.)
[_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_] [_][_][_]
2. Current Address [_][_][_][_][_]--[_][_][_][_]
------------------------------------------------------------
street & no. city state zip
3. Prior Address [_][_][_][_][_]--[_][_][_][_]
(if within 5 years) ------------------------------------------------------------
street & no. city state zip
4. Business/Employer
Name & Address -------------------------------------------------------------------------------------------
name
[_][_][_][_][_]-[_][_][_][_]
------------------------------------------------------------
street & no. city state zip
5. Social Security Number [_][_][_]-[_][_]-[_][_][_][_] 6. Date of Birth
---------------------------------
mo. day yr.
7. [_] Male [_] Female 8. Birthplace
-------------------------------
9. Citizen of USA [_] Yes [_] No If "No," what country? Type of Visa [_] Perm. [_] Temp.
10. Applicant [_] Owner [_] Insured [_] Other
-------------------------------------------------------------
(Print full name and relationship to Insured)
11. Plan Account Name (Employer) Plan Account No.
(complete if applicable) ------------------------------------- --------------------------------
- -----------------------------------------------------------------------------------------------------------------------
12. Owner(Select only one of (a) through (k).)((*)Print full name(s) and relationship(s) to the Insured.)
(a) [_] Insured
* (b) [_] Upon attainment of age ____________________________, the Insured shall become the Owner.
Until then, the Owner shall be the Insured's __________________________________________________, if living,
otherwise the Insured's ________________________________________________, if living, otherwise the Insured.
* (c) [_] Lifetime Ownership in the Insured's ___________________________________________________________, if living,
thereafter in the Insured's ________________________________________, if living, thereafter in the Insured.
* (d) [_] Insured's _____________________________________________________________________________, or his/her estate.
* (e) [_] Joint Ownership: _____________________________________________________________, or the survivor(s) of them.
(f) [_] ______________________________________________________________as Trustee(s), or the then-acting Trustee(s),
under the Trust Agreement dated ____________________. (Copy of signed Trust Agreement required.)
(g) [_] Corporation ___________________________________________________________________, its successors or assigns.
(h) [_] Business Associate/Business Partner ___________________________________________________, or his/her estate.
(i) [_] Partnership_______________________________________________________________________________________________.
(j) [_] Incorporated Charitable Organization __________________________________________, its successors or assigns.
* (k) [_] Other (e.g., Non-Incorporated Charity, Custodian, or Tenancy-In-Common)
-----------------------------------------------------------------------------------------------------------
If the last Owner is other than the Insured and all Owners predecease the Insured, then the Owner shall be the
estate of the last Owner to die unless otherwise requested.
13. Owner's (if other than the Insured) Soc. Sec. No. or Taxpayer ID No._______________________________________________
(If more than one Owner, give name and Soc. Sec. No. of all Owners in 15.)
14. Owner's (if other than the Insured) Address
[_][_][_][_][_]-[_][_][_][_]
------------------------------------------------------------------------------------
street & no. city state zip
15. Remarks
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
APPLICATION NO. Page 2
- --------------------------------------------------------------------------------
16. Beneficiary (Select only one of (a) through (i).) (For all Beneficiaries,
print full name(s) and relationship(s) to the Insured.) Payment to all
Beneficiaries shall be made in one sum unless otherwise requested.
(a) [_] Primary
-------------------------------------------------------------
-------------------------------------------------------------
Secondary (optional)
------------------------------------------------
-------------------------------------------------------------
([_] AND any lawful children of the Insured
Select ([_] AND any children born of the marriage of the
Insured and said spouse
only one ([_] AND any children born of the marriage of, or
legally adopted by, the Insured and said
spouse
option ([_] *Trustee(s) under the Will of the Insured
Tertiary (third to receive payment) (optional)
----------------------
-------------------------------------------------------------
[_] issue per stirpes of: [_] Primary Beneficiary(ies)
[_] Secondary Beneficiary(ies)
[_] Tertiary Beneficiary(ies)
(b) [_] Estate of the Insured (Select only if Estate is Primary
Beneficiary.)
(c) [_] (*)Trustee(s) under the Will of the Insured (Select only if
Trustee(s) under the Will is Primary Beneficiary)
(d) [_] ____________________________________________________as Trustee(s),
or the then-acting Trustee(s), under the Trust Agreement
dated _________________________________________
(e) [_] Corporation named in 12(g)
(f) [_] Business Associate/Business Partner named in 12(h)
(g) [_] Partnership named in 12(i)
(h) [_] Incorporated Charitable Organization named in 12(j)
(i) [_] Other_____________________________________________________________
* "Trustee(s) under the Will of the Insured" means the then-acting
Trustee(s) of the Trust under the Insured's Will that is probated. If no
Will of the Insured is probated or no Trust is in effect under the Will
that is probated, payment will be made to the Owner or to the estate of
the Owner.
Optional Provisions (for (a) and (f) only):
UTMA/UGMA Custodian- During minority of the named child(ren),
_______________________________________________ shall be Custodian for said
(name of adult to act as Custodian)
child(ren) under the________________ Uniform Transfers/Gifts to Minors Act.
(state)
(If the Custodian is named for more than one child, the Custodian will act
separately for each.)
Option D, Monthly Interest
Payments,for
[_] Primary Beneficiary
[_] Secondary Beneficiary
[_] Tertiary Beneficiary
(not available for any beneficiary
for whom UTMA/UGMA is selected)
Deferral Clause for [_] Primary [_] Secondary [_] Tertiary Beneficiary(ies).
Payment shall be made on the date [_] 30 days [_] __ days after the Insured's
death.
Any beneficiary whose death occurs before such date will be considered as
having predeceased the Insured.
If two or more persons are the beneficiaries in any class, payment shall be
made equally to them or equally to the surviving beneficiaries in that class
unless otherwise requested. If percentages or fractions are indicated and
any beneficiary dies before the Insured, any share due that beneficiary will
be paid proportionately to the surviving beneficiaries in that class. If
payment is made in one sum and there is no beneficiary entitled to payment
when the Insured dies and the Insured is the Owner at that time, payment
shall be made to the estate of the Insured; but if the Insured is not the
Owner, payment shall be made to the Owner.
- --------------------------------------------------------------------------------
Life Insurance Data
- --------------------------------------------------------------------------------
17. Product
[_] Whole Life [_] 10-Year Level Term
[_] Limited Pay WL_________ [_] APT
[_] Enhanced Whole Life [_] Variable Life
[_] Modified Whole Life [_] Universal Life
[_]_________________________________________________
18. Amount of Insurance (a or b)
(a) Face Amount $___________________________________________
(b) Face Amount purchased by a premium of
$________________________________________ at premium frequency
applied for in 39.
[_] This premium includes all riders.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Life Insurance Data (continued)
- --------------------------------------------------------------------------------
19. Variable Life Net Premium Allocation (must total 100%)
[_] MML Equity ______%
[_] MML Money Market ______%
[_] MML Managed Bond ______%
[_] MML Blend ______%
[_] GPA ______%
[_] Opp. Capital Appreciation ______%
[_] Opp. Growth ______%
[_] Opp. Global Securities ______%
[_] Opp. Strategic Bond ______%
[_] ___________________ ______%
20. Variable Life and Universal Life
(a) Planned Premium (at frequency) $_______________________
(b) Initial Additional Premium $___________________________
(c) Death Benefit Option (if applicable) [_] 1 [_] 2
21. Automatic Premium Loan [_] Yes [_] No
(not available on Term or Variable Life)
22. Loan Interest Rate (where elective)
[_] Adjustable [_] 8% [_] 6% (VL only) [_] _____________%
23. Policy Date (optional)_____________________
24. To Save Issue Age (optional)_______________
- --------------------------------------------------------------------------------
For Variable Life Insurance, the Applicant acknowledges:
. Receipt of a prospectus for the policy applied for;
. That the variable value of the policy may increase or decrease in
accordance with the experience of the Separate Account(s);
. That there are no minimum guarantees as to the variable value;
. That the fixed value of the policy earns interest at a rate not less than
a minimum specified rate; and
. That the death benefit may be variable or fixed under specified
conditions.
Note: Illustrations of benefits including death benefits, account values,
and cash surrender values are available upon request.
- --------------------------------------------------------------------------------
25. If the policy applied for will be used in connection with an
employer-sponsored plan involving both males and females, will the policy be
issued on a Unisex basis? [_] Yes [_] No
26. Waiver Of Premium and Disability Benefit Riders on:
[_] Insured (Disability Waiver) (not available on VL)
[_] Insured (Disability Benefit) (UL and VL only)
Specified Monthly Amount ( VL only) $ _______________
* [_] Applicant-Adult Insured (Disability Only)
* [_] Applicant-Adult Insured (Death or Disability)
* [_] Applicant-Juvenile Insured (Death Only)
* [_] Applicant-Juvenile Insured (Death or Disability)
* Complete Supplement A3300
27. Other Riders
[_] Accid. Dth Ben $__________ [_] Guar. Insurability $____________
[_] Add'l Life Ins. Purch. (ALIR) $__________________
[_] Dth. Ben. Guar.
[_] Ren. Term 1-Yr. $_________ [_]_____________________ $_______________
[_] Life Insurance Supplement Rider (LISR)
(a) Requested Supplemental Ins. Amt. $_________________________________
(b) LISR Annual Premium $_________________________________
(c) LISR Lump-Sum Payment $_________________________________
[_] Cost Of Living Adj.: (a) Incr. Factor (xx.xx)_______ (b) Expiry Age____
[_] Other Insured Term: (a) Name___________________ (b) Amt. $_____________
(c) Qualified (spouse, child, adopted child, stepchild, self)
[_] Y [_] N
28. Dividend Option (not available on Variable Life)
[_] Paid-up Additions (not available on Term)
[_] Reduce Premiums [_] Cash
[_] Accumulate at Interest [_] Suppl. Insurance(EWL & LISR)
[_] Dividend applied as Yearly (not available on Term,
Term Purchase with balance to: EWL, or LISR)
[_] Paid-up Additions [_] Reduce Premiums
[_] ____________________
29. ALIR Dividend Option
[_] Paid-up Additions [_] Same as Basic Policy
- --------------------------------------------------------------------------------
30. Life Insurance currently applied for, contemplated, or now in force on the
Insured in other companies. (Exclude amounts shown in 32(a).) If none, check
here [_]
<TABLE>
<CAPTION>
Currently
Name of Other Company (No MassMutual or affiliates) Amount Year(s) Issued or Applied For
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ [_]
- ------------------------------------------------------------------------------------------------------------------------------------
[_]
- ------------------------------------------------------------------------------------------------------------------------------------
[_]
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
31. Total amount of new insurance to be placed currently in all companies
$______________________________
32. Replacement/Section 1035 Exchange (For each policy listed in (a), include
completed replacement forms with this application.) (Do not complete for
Term Conversions and Term Exchanges)
(a) 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,"
complete the following.
<TABLE>
<CAPTION>
Company Name Policy Number Product Face Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b) If the policy applied for is intended to qualify for a Section 1035
exchange, the approximate value of the policy to be exchanged is $___
and will be applied for on the new policy in the form of:
[_] ALIR [_] LISR [_] Additional Premium (UL, VL) [_] Initial Premium
(Other Life).
(If exchanging another company's policy, the policy, a completed
absolute assignment form, and the other company's blank surrender form
should accompany this application.)
<PAGE>
APPLICATION NO. Page 4
- --------------------------------------------------------------------------------
Juvenile Data (ages 0-15)
- --------------------------------------------------------------------------------
33. Total life insurance currently applied for, contemplated, or now in force
on Insured's father/mother/siblings in all companies. (Name, age,
relationship to Insured, and amount - explain if none)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
34. Total life insurance now in force in all companies on Applicant if other
than parent of Insured $_____________________
35. Does the Insured reside with the Applicant? [_] Yes [_] No If "No," the
Insured resides with
Name____________________________________ Relationship to Insured___________
36. Remarks
- --------------------------------------------------------------------------------
Conversion, Exchange, and Option Data
- --------------------------------------------------------------------------------
Term Insurance Conversion or Exchange
- --------------------------------------------------------------------------------
37. (a) [_] Conversion of term insurance under policy(ies) numbered:___________
_____________ _____________
Date of New Policy(required)_______________Type of Term:___________
_____________ _____________
If not all of the term insurance is to be converted, complete the
following.
<TABLE>
<CAPTION>
<S> <C>
Balance to be
Policy Number Name(s) of Term Rider(s) if applicable Amount to be converted Terminated Continued
---------------------------------------------------------------------------------------------------------------------------
[_] [_]
---------------------------------------------------------------------------------------------------------------------------
[_] [_]
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b) [_] Exchange of term insurance under policy(ies) numbered_____________
[_] Term policy numbered ____________ is amended by adding the
right to exchange the term insurance provided by the policy for
new term insurance. It is to be exchanged for the new term
insurance applied for in this application. The policy will
terminate when this new policy takes effect. Any dividends to
the credit of the exchanged policy will be paid in cash.
[_] The ____________________ term rider under policy numbered
____________ is amended by adding the right to exchange the
term insurance provided by the rider for the new term
insurance. It is to be exchanged for the new term policy
applied for in this application. The rider will terminate when
this new policy takes effect. If the existing policy has more
than one term rider and not all of them are being exchanged,
identify the one(s) being exchanged:_________________________
_____________________________________________________________
The following applies to conversions only:
(c) If the term insurance provides that ADB, GIO/IPR, and/or Waiver Of
Premium are to be included in the new policy, the riders will be
automatically included unless otherwise requested here: Do not
include [_] ADB [_] GIO/IPR [_] Waiver Of Premium
(d) [_] Policy(ies) listed above in (a) or (b) does not have rider(s)
applied for in 27 (requires evidence of insurability).
(e) [_] The Face Amount applied for in 18 is greater than the amount
available for the conversion; this additional amount is $_____
(requires evidence of insurability).
- --------------------------------------------------------------------------------
Guaranteed Insurability Option
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
38. (a) Option under Policy(ies) Numbered Type of Option Date Amount Being Exercised
<S> <C> <C>
_________________________________ [_] Regular [_] Substitute $ ____________________
_________________________________ [_] Regular [_] Substitute $ ____________________
_________________________________ [_] Regular [_] Substitute $ ____________________
</TABLE>
(b) [_] For Substitute Option Date
Reason: [_] marriage [_] birth of child(ren)
[_] adoption of child(ren) Date of applicable event:_____________
(c) [_] Face Amount applied for in 18 exceeds total of amounts being
exercised under option; this additional amount is $ _______________
(requires evidence of insurability).
(d) [_] Original policy(ies) does not have rider(s) applied for in
27(requires evidence of insurability).
<PAGE>
- --------------------------------------------------------------------------------
Payment Data
- --------------------------------------------------------------------------------
39. Premium Payments
(a) Billing Type (b) Frequency
[_] Automatic Bank Account Withdrawal [_] Annual
[_] Regular [_] Semiannual
[_] Invoice/Franchise [_] Quarterly
[_] Monthly (not with
Regular)
[_] ___________________
40. Premium Payer: [_] Insured [_] Owner [_] Other______________
Mailing Address: [_] Insured's Home [_] Other______________
[_] Insured's Business ______________
[_] Owner's Address ______________
41. Has the first premium on the insurance applied for been paid?
[_] Yes [_] No If "Yes," amount paid is $ __________________________________
- --------------------------------------------------------------------------------
Personal Data Regarding the Insured
- --------------------------------------------------------------------------------
42. (a) Has the Insured smoked cigarettes during the past
12 months? [_] Yes [_] No
(b) If "No," has the Insured used tobacco or nicotine
in any other form during the past 12 months? [_] Yes [_] No
(c) Has the Insured used tobacco or nicotine in any
form during the past 3 years?
(If "Yes," give details in 50.) [_] Yes [_] No
- --------------------------------------------------------------------------------
Complete the following only if Evidence of Insurability is
required. Explain "Yes" answers in 50.
- --------------------------------------------------------------------------------
43. (a) Insured's Occupation(s) and Exact Duties
Occupation(s) Exact Duties
------------------------------------------ --------------------------
------------------------------------------ --------------------------
(b) Length of time with current employer________________ (If less than 6
mos., give name(s) of previous employer(s), occupation(s), duties, and
dates of employment for last three years in 50.)
44. Insured's current driver's license no.____________________ State__________
45. Does the Insured now contemplate any foreign travel? [_] Yes [_] No
46. Within the last 3 years has the Insured been, or does
the Insured now expect to become, a pilot, student pilot,
or crew member of any type of aircraft?
If "Yes," complete Aviation Supplement A3310 [_] Yes [_] No
47. Within the last 3 years has the Insured taken part in,
or does the Insured 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, or any other form(s) of hazardous activity?
If "Yes," complete Avocation Supplement A3320 [_] Yes [_] No
48. Within the last 5 years has the Insured been in a motor
vehicle accident, been convicted of operating a motor
vehicle while under the influence of alcohol or other
drugs, been convicted of a moving violation, or received a
driver's license restriction or revocation? [_] Yes [_] No
49. Has the Insured ever been convicted of a felony? [_] Yes [_] No
50. Remarks
<PAGE>
APPLICATION NO. Page 6
- --------------------------------------------------------------------------------
Agreement And Signatures
- --------------------------------------------------------------------------------
The person(s) signing below agree that:
The Application - This is Part 1 of an application for Life Insurance. The
application includes any Part 2 that may be required and any amendments and
supplements to either Part. To the best of the knowledge and belief of the
person(s) signing below, all statements in this Part 1 are complete and true and
were correctly recorded. Each person signing below adopts all of the statements
made in the application and agrees to be bound by them.
Company, as used in this Application, refers to Massachusetts Mutual Life Ins.
Co.
Liability of Company - The insurance applied for will not take effect unless
each of the applicable conditions is met:
1. For all cases:The first premium has been paid during the lifetime of all
-------------
persons to be insured by the policy and the application has been approved
by the Company at its Home Office/Principal Administrative Office.
2. For insurance purchased under a guaranteed insurability rider or
----------------------------------------------------------------
agreement: The first premium must be paid within the time period specified
----------
in the rider or agreement. If all applicable conditions are met, the
insurance purchased under such rider or agreement becomes effective
according to its terms.
3. For conversion or exchange: The policy that provides the insurance being
--------------------------
converted or exchanged must be received by the Company at its Home
Office/Principal Administrative Office. The first premium may be reduced
by any conversion allowances permitted. If all applicable conditions are
met, the insurance purchased under an exchange or conversion becomes
effective, and coverage being converted or exchanged terminates, on the
Issue Date of the policy applied for.
4. For insurance not provided for in 2 or 3 above: The first premium may be
-----------------------------------------------
paid to the agent in exchange for a Temporary Life Insurance Receipt
signed by that agent. If this is done, the Company shall be liable only as
set forth in that Receipt. If not, (i) the policy must be delivered to the
person named as Owner therein; and (ii) at the time of payment and
delivery, all statements that relate to the insurability of all persons to
be insured under the policy are complete and true as though they were made
at that time.
Authority of Agents - No agent can change the terms of this application or any
policy issued by the Company. No agent can waive any of the Company's 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. Acceptance of any
policy issued shall be acceptance of any change or correction of the application
made by the Company. However, any correction or change of amount,
classification, plan of insurance, or riders applied for in this application
must be agreed to in writing.
Authorization To Obtain And Disclose Information (For The Insured And/Or
Applicant) - I have received the Notice about the Medical Information Bureau,
Inc. (MIB). I have also received the Notice about the Fair Credit Reporting Act.
I understand and authorize an investigative report to be made. This report may
include information about my character, general reputation, personal
characteristics, and mode of living. I hereby authorize certain parties that
have any records or knowledge of me and my health (or my children and their
health if juvenile insurance), to make such information available to the Company
and its reinsurers. These parties include: any licensed physician, medical
practitioner, hospital, clinic, other medical or medically related facility,
insurance company, the MIB, or other organization. I agree that a photocopy or
facsimile of this authorization may be used to obtain information.
- --------------------------------------------------------------------------------
ANY POLICY ISSUED AS A RESULT OF A MATERIAL MISSTATEMENT OR OMISSION OF
MATERIAL FACTS MAY BE VOIDED, AND THE COMPANY'S ONLY OBLIGATION SHALL BE
TO RETURN PREMIUMS PAID.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
For All Cases For Conversions, Exchanges, and Option Purchases
Proposed Insured (if age 16 or older) Owner of Original Policy
- ----------------------------------------------------------- ------------------------------------------------------------------
Applicant, as given in 10 (if not Proposed Insured) Assignee of Original Policy
- ----------------------------------------------------------- ------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Signed at on
----------------------------------------------------------------------- ------------------------------------------
city state date
- -----------------------------------------------------------------------------------------------------------------------------------
General Agent submitting application (Agcy. No.) Agent who actually solicited this application (print name here)
- ------------------------------------------------- --------------------------------------------- ---------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
A10NY197 Massachusetts Mutual Life Insurance Company and affiliated insurance companies Springfield MA 01111-0001
</TABLE>
Taxpayer Identification - The Owner of the policy applied for herein certifies,
under penalties of perjury, that: (i) the number referred to in 5 or 13 of this
application 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 the IRS has notified him/her
that he/she is no longer subject to backup withholding. If the IRS has notified
the 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 here in (ii) that he/she is not subject to backup
withholding due to notified payee underreporting.
on
- -------------------------------------------------- ----------------------------
Signature of Owner of New Policy Date
<PAGE>
APPLICATION NO.
Massachusetts Mutual Life Insurance Company
and Affiliated Insurance Companies
Investor Account Card
This suitability form is required for all variable products unless otherwise
directed.
- --------------------------------------------------------------------------------
1. Owner's Name
------------------------------------------------------------
2. Approximate net worth (exclusive of home, furnishings, and automobiles)
-------------------------------------------------------------------------
For non-individually owned contracts, leave 3 through 9 blank.
3. Number of Dependents
---------------------------------------------------
4. Age(s) of Dependents
---------------------------------------------------
5. Owner's Date of Birth
--------------------------------------------------
6. Estimated current annual household income
----------------------------------------------------------------------
Earned Unearned
$ $
-------------- ---------------
----------------------------------------------------------------------
7. Name of Owner's Employer
------------------------------------------------
8. Owner's Occupation
------------------------------------------------------
no. & street city state zip
9. Address of Employer
----------------------------------------------------
10. Is Employer a member of the NASD?
[_] Yes [_] No
11. Owner's estimated Federal Income Tax bracket
[_] 15% [_] 28% [_] 31% %
------
12. Investment Objectives: (check all that apply)
[_] Growth of Assets
[_] Retirement Income
[_] Conservation of Principal
[_] Tax Sheltered Accumulations
[_] Other (specify)
------------------------------------
13. I am comfortable assuming: (check all that apply)
[_] Low Risk
[_] Moderate Risk
[_] High Risk
[_] Other (specify)
------------------------------------
14. Source of Funds:
[_] Current Income
[_] Personal Savings
[_] CD/Money Market Fund
[_] Qualified Plan Distribution
[_] Mutual Fund Redemption
[_] Insurance Proceeds
[_] IRA Rollover
[_] Other (specify)
------------------------------------
If the owner of this contract is other than an individual, i.e. trust, guardian,
conservator, etc., substantiating documents that include authorized signatures
must be submitted.
15. Comments:
16. To the best of my knowledge, the above answers are true and correctly
recorded. I believe the contract or policy applied for is suitable for my
investment objectives.
--------------------------------------- -------------------
Signature of Owner Date
- --------------------------------------------------------------------------------
17. Attestation of Registered Representative
The Owner listed above has been informed of the risks involved in this
investment, and I certify that I have reasonable grounds for believing that
this contract or policy is suitable for the Owner's objectives.
--------------------------------------- --------------------
Signature of Registered Representative Date
- --------------------------------------------------------------------------------
18. Home Office Use Only
--------------------------------------- --------------------
Approval of Authorized Principal Date
Comments:
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO. AGENT'S STATEMENT
- --------------------------------------------------------------------------------
Complete for all cases
- --------------------------------------------------------------------------------
Additional Issue Information
1. Is best underwriting class anticipated? [_] Yes [_] No
2. If Insured's name is to appear on the policy other than as "First Name-
Middle Initial-Last Name," specify below
------------------------------------------------------------------------
3. (a) Is application from a new premium-payer client to the company?
[_] Yes [_] No
(b) If the Insured is a previous client, give the Client Identification No.
------------------------------
4. How long have you known the Insured? ________________________________________
5. How well do you know the Insured?
[_] Very well [_] Casually [_] Met on solicitation (Give details in 22.)
6. (a) Insured's Annual Earned Income Actual Agent Estimate
------ ------ --------------
$ [_] [_]
-------------------------------
(b) Insured's Annual Unearned Income
--------
$ [_] [_]
-------------------------------
(c) Spouse's Total Annual Income
$ [_] [_]
-------------------------------
(d) Insured's Net Financial Worth
$ [_] [_]
-------------------------------
7. Insured's Marital Status
[_] Single [_] Married [_] Widowed [_] Divorced
8. Do you have any knowledge of a present disability of the Insured?
[_] Yes [_] No
(If "Yes," explain in 22.)
9. (a) Soliciting Agent telephone (if different from agency)
- -
---- ---- --------
(b) Insured's telephone (Best time of day to call _________________)
Home - - Business - -
---- ---- ------ ---- ---- ------
10. (a) To the best of your knowledge, during the last six months has any policy
on the life of the Insured been, or if the application is approved is it
contemplated that any policy will subsequently be, surrendered or otherwise
terminated, lapsed, or placed on other than a premium-paying basis,
rewritten to release cash values, reduced in amount or term of coverage,
assigned as collateral for a loan, or subjected to borrowing of loan values?
[_] Yes [_] No
(If "Yes," complete the following.)
Company Name Policy Number Product Face Amount
-----------------------------------------------------------------------
$
-----------------------------------------------------------------------
$
-----------------------------------------------------------------------
$
-----------------------------------------------------------------------
(b) Have you delivered the appropriate replacement form?
[_] Yes [_] No
(c) Is a copy of the sales illustration used being forwarded with this
application? [_] Yes [_] No
11. If ALIR is requested, to the best of your understanding ALIR payments will
be [_] for one year [_] on a continuing basis
12. (a) Will dividends from any existing MassMutual Policy be used to pay
all or part of the initial premium on this policy?
[_] Yes [_] No
(If "Yes," complete Form F5341.)
(b) Will initial premium be paid by a loan from any MassMutual policy?
[_]Yes [_] No
(If "Yes," complete Form F5341.)
- --------------------------------------------------------------------------------
Information About This Sale
13. Was this application taken by mail? [_] Yes [_] No
14.Supporting information for a business-related sale
(a) Business is a:
[_] Sole Proprietorship [_] Partnership [_] Corporation
Year established No. of employees
---------- --------------
(b) If policy is to be owned by a business or business associate, give names
of the other officers or partners and the amount of insurance the
business now carries on their lives. (If any officers or partners are not
insured, explain in 22.)
Name Title Amount
$
- ---------------------------- ----------------- ------------
$
- ---------------------------- ----------------- ------------
$
- ---------------------------- ----------------- ------------
15. (a) Is this part of a multi-life case? [_] Yes [_] No
(b) If yes, total number of applications_________
(c) Was census submitted to Home Office? [_] Yes [_] No
(d) Guaranteed Acceptance Prog. for Exec. (GAPE)? [_] Yes [_] No
(e) Is any policy to be part of a:
[_] Pension/Profit Sharing Plan [_] Split Dollar Plan
16. If Split Dollar, Method:
[_] Endorsement [_] Collateral Assignment
17. Primary purpose of insurance (check one only)
Personal Needs:
[_] Mortgage Cancellation [_] Retirement [_] Estate Taxes
[_] Income for Dependents [_] Education Fund [_] Gifts/Bequests
[_] Other Personal Needs (Explain in 22.)
Business Needs:
[_] Stock Redemption [_] Cross Purchase
[_] Key Employee [_] Deferred Compensation
[_] Sec.162 Bonus Plan [_] Other Business Needs (Explain in 22.)
Agent and Compensation Information
18. (a) Are you the Proposed Insured? [_] Yes [_] No
(b) Is Insured your spouse/child/parent/sibling? [_] Yes [_] No
19. If you are not a full-time MassMutual Agent, what is your primary
company affiliation?
20. List below the agent(s) who will receive commissions. If more than one,
enter percentage applicable to each.
Agent's Name Ident. Code First Yr. % Ren'l %
1.
------------------ ------------- ------------- -------------
2.
------------------ ------------- ------------- -------------
3.
------------------ ------------- ------------- -------------
4.
------------------ ------------- ------------- -------------
5.
------------------ ------------- ------------- -------------
6.
------------------ ------------- ------------- -------------
100% 100%
21. If the sale of this policy will be credited to more than one General Agency,
specify below:
Agency Name Agency No. % of Split
------------------ ------------------------- ----------------
------------------ ------------------------- ----------------
100%
22. Remarks
- --------------------------------------------------------------------------------
Date Signature of Soliciting Agent
------------------ -------------------------
- --------------------------------------------------------------------------------
<PAGE>
APPLICATION NO.
TEMPORARY LIFE INSURANCE RECEIPT
To Massachusetts Mutual Life Insurance Co.
Springfield, Massachusetts 01111-0001
Person(s) Proposed
for Insurance ------------------------------------------------------------
(please print) Last Name First Name Initial Suffix (e.g., Jr., III)
------------------------------------------------------------
Last Name First Name Initial Suffix (e.g., Jr., III)
================================================================================
Health Questions
(If more than one person is proposed for insurance and a "Yes" answer applies to
either one, the question must be answered "Yes." No agent is authorized to
accept premium if any of the questions are answered "Yes" or left unanswered.)
Has the Proposed Insured(s):
1.Ever been treated for, or been diagnosed by a member of the medical profession
as having cancer, stroke, or disease of the heart? [_] Yes [_] No
2.In the last 10 years applied for life insurance
and been declined, postponed, rated, or restricted? [_] Yes [_] No
3.In the last 90 days been admitted, or been
advised by a member of the medical profession to be
admitted, to a hospital or other medical facility? [_] Yes [_] No
4.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)? [_] Yes [_] No
R10NY197 (Company Part) (continued on reverse side)
- --------------------------------------------------------------------------------
1296067011 TEMPORARY LIFE INSURANCE RECEIPT
APPLICATION NO.
Company: Massachusetts Mutual Life Insurance Co., Springfield,
Massachusetts 01111-0001
Payment in the amount of $ for life insurance on
__________ _______________________
- --------------------------------------------------------------------------------
Print Name of Proposed Insured(s)
was received by on .
___________________________ ________________________________
Agent's Signature Date
IMPORTANT: THIS RECEIPT PROVIDES A LIMITED AMOUNT OF LIFE INSURANCE FOR A
LIMITED PERIOD OF TIME. THE LIFE INSURANCE IS SUBJECT TO THE PROVISIONS OF THIS
RECEIPT. NO LIFE INSURANCE GOES INTO EFFECT UNDER THIS RECEIPT UNLESS (i) ALL
HEALTH QUESTIONS WERE ANSWERED "NO" AND (ii) PART 1 OF THE APPLICATION FOR LIFE
INSURANCE HAS BEEN COMPLETED AS OF THE DATE OF THIS RECEIPT. NO LIFE INSURANCE
GOES INTO EFFECT UNDER THIS RECEIPT FOR AMOUNTS APPLIED FOR UNDER CONVERSION OR
GUARANTEED-INSURABILITY OPTIONS.
- --------------------------------------------------------------------------------
Temporary Life Insurance
Subject to the limitations stated in this receipt, the temporary life insurance
provided by this receipt becomes effective as of the date of this receipt.
The temporary life insurance provided by this receipt continues to, but not
including, the earliest of:
1.The date 60 days after the date the temporary life insurance becomes
effective;
2.The date the life insurance applied for is approved;
3.The date a policy, other than as applied for, is presented to the applicant
for acceptance or rejection;
4.If the application is rejected, the date 5 days after the Company mails the
notice of rejection and refund of the payment made or, if earlier, the date
the premium payer actually receives the notice and refund;
5.The date the premium payer requests from the Company a refund of the amount
paid under this receipt.
If benefits are payable under the policy issued pursuant to the application for
insurance, no benefits are payable under this receipt.
(continued on reverse side)
(Premium Payer Part)
<PAGE>
COMPANY'S LIABILITY
Subject to the provisions of this receipt, the amount of temporary life
insurance is equal to the amount of life insurance applied for, including any
riders. However, the amount of temporary life insurance plus the life insurance
under any other receipt(s) the Company has outstanding on each person proposed
for insurance cannot exceed the following limits:
Age(*) Limit Age(*) Limit
under 56 $1,000,000 66-70 $250,000
56-60 750,000 71-75 100,000
61-65 500,000 over 75 0
(*)Age means the age, on the birthday nearest the date of this receipt, of
each person proposed for insurance.
These limits include amounts under any accidental death benefit agreement or
rider applied for. If the amount of insurance applied for exceeds these limits,
the Company's only liability for the excess will be to return the amount of
payment made for it.
If any Proposed Insured commits suicide, the Company's only liability under this
receipt is to refund the payment made.
If the check or draft received in payment for the premium is not honored when
first presented for payment, coverage under this receipt is void.
CONTESTABILITY
We rely on all statements made by or for the Proposed Insured(s) in this receipt
and in the application. The Company can contest the validity of the temporary
life insurance for any material misrepresentation of fact either in the health
questions stated in this receipt or in the application numbered above.
AUTHORITY OF AGENT
No agent can change the terms of this receipt, or the application, or any policy
issued by the Company. No agent can waive any conditions or extend the time
requirements to meet them. No agent is authorized to accept premium before Part
1 of the application for life insurance has been completed. No agent is
authorized to accept premium if any of the health questions stated on the
Company Part of this receipt are answered "Yes" or left unanswered.
R10NY197 (Premium Payer Part)
- --------------------------------------------------------------------------------
Payment in the amount of $ was received on
------------ ---------------------------
Date
AGREEMENT AND SIGNATURES
The person(s) signing below agree that:
They have received and read (or had read to them) the receipt detached from this
form for the amount indicated above. They understand and agree to its terms and
conditions. They also understand that if they have requested a later policy date
they may be waiving certain rights and guarantees under this receipt. To the
best of their knowledge and belief, the answers to all health questions stated
on the reverse side are complete and true and were correctly recorded before
they signed their name(s) below.
- -----------------------------------
Premium Payer
- ----------------------------------- ---------------------------------------
Person(s) Proposed for Insurance
(if different)
Signed at on
---------------------------------------------- -------------------
City State Date
(Company Part)
<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.
<PAGE>
[LOGO OF MASSMUTUAL THE BLUE CHIP COMPANY APPEARS HERE]
Adult
Form
Application
Part 2 (A50NY) - New York Version
This application may be completed for all products when the Proposed Insured's
insurance age is 16 years or older. (Use Juvenile Form Part 2, A55NY, for ages 0
through 15).
- --------------------------------------------------------------------------------
Contents
Part 2 of Application:
. For use by an Authorized Agent with Non-Medical Privilege
. For use by an Authorized Examiner
- --------------------------------------------------------------------------------
See additional information on reverse side
Massachusetts Mutual Life Insurance Company and affiliated insurance companies
Springfield MA 01111-0001
<PAGE>
There is a direct relationship between providing complete and accurate medical
history and facilitating the underwriting and issue cycle so that clients
receive the best possible service.
Avoid The Common Reasons For Delays In Processing
================================================================================
1. If amount limits, underwriting requirements, etc. qualify the Proposed
Insured non-medically, do not have the client examined.
2. Answer all questions completely -
. Ensure that all required questions are answered. Don't skip any "yes / no"
questions.
. Fully describe all medical history and findings.
. A history should be described thoroughly but concisely so that the "who,
what, when and why" are clear to the reader.
. When the Proposed Insured is unclear as to the specifics, try to include
as much information as possible, particularly as to the relevant dates,
names and addresses of physicians, hospitals, etc.
. In "Explanatory Details and Remarks," reference to the precise "Question
-------
Number" is important. For example, if reference is to a question with more
than one part, do not enter the Question Number as "5"; use "5c" even
though it may seem obvious which part of the question is being referred to.
3. Ensure that all necessary signatures have been obtained (Proposed Insured,
Witness, Examiner) and, where forms require dating, the dates have been
included.
General Instructions
================================================================================
Medical
-------
. When scheduling an exam, furnish the client with the name of the
soliciting agent, agency name and number and the total amount of insurance
applied for so this information may be included by the examiner at the
bottom of page 3.
. If an examiner has not previously been authorized by the Home Office,
authorization should be obtained from the Medical Examiner's Section of
New Business before the exam is performed. Form M1300, Explanation of
------
Using Unauthorized Examiner, should also be completed.
Non-medical
-----------
. If the Proposed Insured is a member of the agent's immediate family, the
"Witness" area of the Part 2 is to be signed by the agent and either the
---
General Agent or the authorized Manager.
<PAGE>
APPLICATION NO.
APPLICATION (PART 2)
To:Massachusetts Mutual Life Ins. Co.
Springfield, Massachusetts 01111-0001
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Personal Information
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In all cases, the terms "you" and "your" refer to the Proposed Insured.
1. a. Full name of Proposed Insured
First Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Middle Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Last Name
[_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_][_]
Suffix
[_][_][_] (e.g. Jr., III)
mo. day yr.
b. Date of Birth
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c. Client ID (if known)
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d. Social Security No. [_][_][_]-[_][_]-[_][_][_][_]
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Do not complete 2 if being medically examined.
2. a.Height in shoes ft. in.
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b.Weight (clothed) lbs.
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c.Loss in weight in the past year? [_] Yes [_] No
If "Yes," Amount lbs. Reason
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Age if Age at
3. Family History Living Death Cause of Death
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a.Father
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b.Mother
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General Health
If "Yes" to any question, please explain in 11 below. Yes No
4. Have any of your parents, brothers or sisters:
a. had cardiovascular disease prior to age 60?....... [_] [_]
b. ever had diabetes, kidney disease, or other
familial disorder?................................ [_] [_]
5. a. Have you smoked cigarettes in the past 12 months?. [_] [_]
b. If "No," have you used tobacco or nicotine in any
other form during the past 12 months?............. [_] [_]
c. Have you used tobacco or nicotine in any form
during the past 3 years?.......................... [_] [_]
6. Have you ever received any treatment in relation
to alcoholism or use of alcohol?..................... [_] [_]
7. Have you ever used barbiturates, narcotics, cocaine
or other controlled substances not prescribed by
a physician?......................................... [_] [_]
8. Have you applied for life or health insurance and
been declined, postponed, rated or restricted in the
last ten years?...................................... [_] [_]
9. Have you ever requested or received a pension,
benefits, or payment because of an injury, sickness
or disability?....................................... [_] [_]
10. Have you 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)?....................................... [_] [_]
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11. COMPLETE 11 FOR EACH "YES" ANSWER IN 4 - 10 ABOVE
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Question
Number Explanatory Details and Remarks
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<PAGE>
Page 2
APPLICATION NO.
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Medical History
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Complete 29 Below For Each Medical History Checked in 12 - 27
For Questions 12 - 27, have you ever been advised of, treated for, or had any
known indication of:
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12. ASTHMA OR BRONCHITIS
[_] Not Applicable
Type:
a - [_] Asthma
b - [_] Bronchitis
c - [_] Chronic Bronchitis
d - [_] Other
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(specify)
Yes No
[_] [_] Wheezing between acute attacks?
[_] [_] Are the symptoms continuing?
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13. ARTHRITIS
[_] Not Applicable
Type:
a - [_] Degenerative / Osteoarthritis
b - [_] Rheumatoid
c - [_] Gouty
d - [_] Other
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(specify)
Bones or joints involved
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14. ULCER
[_] Not Applicable
Type:
a - [_] Duodenal
b - [_] Gastric (stomach)
c - [_] Other
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(specify)
Yes No
[_] [_] Have you had a bleeding ulcer?
[_] [_] Do you now have symptoms?
[_] [_] Was surgery required?
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15. COLITIS OR ILEITIS
[_] Not Applicable
Type:
a - [_] Spastic or Mucous Colitis
b - [_] Ulcerative Colitis
c - [_] Crohn's Disease (Ileitis)
d - [_] Other
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(specify)
Yes No
[_] [_] Was there associated bleeding?
[_] [_] Do you now have symptoms?
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16. CYSTS
[_] Not Applicable
a - Type:
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(specify)
[_] Check here if removed
Pathology:
[_] Benign (non cancerous)
[_] Malignant (cancerous)
b - Type:
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(specify)
[_] Check here if removed
Pathology:
[_] Benign (non cancerous)
[_] Malignant (cancerous)
<TABLE>
<CAPTION>
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<S> <C> <C> <C>
17. Disorder of:
a- [_] Eyes b- [_] Ears c- [_] Nose d- [_] Throat
e- [_] None of These
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18. a- [_] Spine c- [_] Back e- [_] Muscles g- [_] Joints
b- [_] Bones d- [_] Neck f- [_] Nerves (incl. Neuritis) h- [_] None of These
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19. a- [_] Fainting c- [_] Convulsions e- [_] Recurrent Headache g- [_] Nervous Disorder
b- [_] Dizziness d- [_] Paralysis f- [_] Stroke h- [_] Mental Disorder
i- [_] None of These
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20. a- [_] Pneumonia d- [_] Pleurisy g- [_] Persistent Hoarseness i- [_] None of These
b- [_] Emphysema e- [_] Shortness of Breath h- [_] Chronic Respiratory
c- [_] Tuberculosis f- [_] Persistent Cough Disorder
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21. a- [_] High Blood Pressure c- [_] Heart Murmur e- [_] Heart Attack g- [_] Blood Vessel Disorder
b- [_] Rheumatic Fever d- [_] Palpitation f- [_] Chest Pain h- [_] Heart Disorder
i- [_] None of These
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22. a- [_] Hemorrhoids d- [_] Anorexia Nervosa g- [_] Recurrent Indigestion j- [_] Intestinal Disorder
b- [_] Hepatitis e- [_] Bulimia h- [_] Stomach Disorder k- [_] Gallbladder Disorder
c- [_] Diverticulitis f- [_] Liver Disorder i- [_] Recurrent Diarrhea l- [_] Intestinal Bleeding
m- [_] None of These
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23. a- [_] Kidney Stone d- [_] Sugar in Urine g- [_] Kidney Disorder i- [_] Pus in Urine
b- [_] Albumin in Urine e- [_] Prostate Disorder h- [_] Reproductive System j- [_] Sexually Transmitted
c- [_] Blood in Urine f- [_] Bladder Disorder Disorder Disease
k- [_] None of These
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24. a- [_] Diabetes b- [_] Thyroid Disorder c- [_] Endocrine (glandular) d- [_] None of These
Disorder
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25. a- [_] Allergies c- [_] Leukemia e- [_] Congenital Disorder g- [_] None of These
b- [_] Anemia d- [_] Blood Disorder f- [_] Recurrent Infections
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26. a- [_] Sciatica c- [_] Lameness e- [_] Amputation g- [_] None of These
b- [_] Gout d- [_] Deformity f- [_] Speech Defect
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27. a- [_] Skin Cancer c- [_] Cancer e- [_] Tumor g- [_] None of These
b- [_] Fibroids d- [_] Skin Disorder f- [_] Lymph Gland Disorder
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</TABLE>
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Other Medical Information and Details
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28. Other than previously stated in this application, within the last five years
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have you: Yes No
a. Had any mental or physical disorder?............................ [_] [_]
b. Had a consultation, surgery, or injury requiring treatment by a
physician, hospital or other medical facility?.................. [_] [_]
c. Had any electrocardiogram, x-ray or other diagnostic test,
excluding an HIV test?.......................................... [_] [_]
d. Been advised to have medical treatment, diagnostic tests
(excluding an HIV test), hospitalization or surgery which
was not completed; or are you now planning to seek such advice
or treatment?................................................... [_] [_]
e. Been, or are you currently, under treatment or taking any
medication?..................................................... [_] [_]
For each item checked "Yes," enter details in 29.
<PAGE>
Page
APPLICATION NO.
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COMPLETE 29 FOR EACH APPROPRIATE ITEM CHECKED IN 12 - 28 ABOVE
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29. Explanatory Details and Remarks for Medical History (Use form A51 for
additional histories).
<TABLE>
<CAPTION>
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A.Ques. Medication/ Still Under #of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
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<S> <C> <C> <C> <C> <C>
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -[_]Yes [_]No
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Physician / Medical Facility Name Address ZIP
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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B.Ques. Medication/ Still Under #of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -[_]Yes [_]No
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Physician / Medical Facility Name Address ZIP
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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C.Ques. Medication/ Still Under #of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -[_]Yes [_]No
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Physician / Medical Facility Name Address ZIP
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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D.Ques. Medication/ Still Under #of Attacks/ Dates (mo/yr)
No. Diagnosis Treatment Treatment Occurrences Onset Recovery
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -[_]Yes [_]No
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Physician / Medical Facility Name Address ZIP
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
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</TABLE>
<TABLE>
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30. Personal Physician Information
<S> <C>
a. [_] Name/Address given in: [_] 29A [_]29B [_]29C [_]29D b. Reason you last consulted this physician
[_] Have no personal physician [_] As indicated in: [_] 29A [_]29B [_]29C [_]29D
[_] Other - give Personal Physician Name/Address here: [_] Routine or General Exam - all findings normal
[_] Other - give details here:
Physician Name
Date Last Seen
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Diagnosis or
Address Reason Last Seen
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Medication/
City State ZIP Treatment
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</TABLE>
Agreement and Signatures
I agree that: (1) this application consists of Parts 1 and 2 and any amendments
and supplements which shall be attached to the policy if issued and (2) no
knowledge on the part of any agent, medical examiner or any other person as to
any facts pertaining to me shall be considered as having been made to or brought
to the knowledge of the Company unless stated in either Part 1 or part 2 of this
application or any amendments or supplements. To the best of my knowledge and
belief, all information is complete and true and was correctly recorded before I
signed my name below.
Signed at on , 19
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city state date
Witness Proposed Insured
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Medical Examiner - or Agent if Non-Medical
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Amount Agency Agency Printed Name
Applied For $ Name No. of Agent
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<PAGE>
APPLICATION NO.
MEDICAL EXAMINER'S REPORT
EXAMINATION TO BE MADE IN PRIVATE AND THIS BLANK TO BE COMPLETED BY THE MEDICAL
EXAMINER IN HIS OR HER HANDWRITING
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1. A. Height in shoes ft. in.
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B. Weight (clothed) lbs.
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C. Loss in weight the past year [_] Yes [_] No
If "Yes", Amount lbs. Reason
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2. BLOOD PRESSURE (sitting):
If first reading over 140/90 or under 110/70, make two additional readings.
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Systolic
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Diastolic (fifth phase)
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3. PULSE:
At Rest After Exercise 3 Minutes Later
Rate
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Irregularities per min.
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4. HEART: Is there any
Enlargement [_] Yes [_] No Dyspnea [_] Yes [_] No
Murmur(s) [_] Yes [_] No Edema [_] Yes [_] No
(Describe below - if more than one, describe separately)
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Location Murmur Murmur
1. 2. Indicate:
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Frequency:
- Constant [_] [_]
- Inconstant [_] [_] Apex by X.
Transmission: [GRAPHIC OF
- Transmitted [_] [_] RIBCAGE APPEARS
- Localized [_] [_] Murmur area by O. HERE]
Timing: Point of greatest
- Systolic [_] [_] intensity by M.
- Diastolic [_] [_]
- Presystolic [_] [_] Transmission by - - ->
Grade:
- Soft (Gr. 1 - 2) [_] [_] Based on the history and examination,
- Mod. (Gr. 3 - 4) [_] [_] what is your impression?
- Loud (Gr. 5 - 6) [_] [_]
After exercise characteristics:
- Increased [_] [_]
- Absent [_] [_]
- Unchanged [_] [_]
- Decreased [_] [_]
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5. Is there on examination any abnormality of the following:
(Circle applicable items and give details)......................... Yes No
A. Head; eyes; ears; nose; mouth; pharynx?........................ [_] [_]
B. Skin (incl. scars); lymph nodes; varicose veins or peripheral
arteries?...................................................... [_] [_]
C. Nervous system (include reflexes, gait, paralysis)?............ [_] [_]
D. Lungs?......................................................... [_] [_]
E. Abdomen (include scars)?....................................... [_] [_]
F. Genitourinary system?.......................................... [_] [_]
G. Endocrine system (include thyroid and breasts)?................ [_] [_]
H. Musculoskeletal system (include spine, joints, amputations,
deformities)?.................................................. [_] [_]
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6. A. Are there any hernias?......................................... [_] [_]
B. Any hemorrhoids (by history or observation)?................... [_] [_]
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7. Are you aware of or do you suspect any other medical, alcoholic or
drug history?...................................................... [_] [_]
(A confidential report may be sent to the Medical Director.)
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A urinalysis must be performed unless a specimen is being sent.
8. URINALYSIS: Albumin Sugar
If albumin or sugar is found, or the blood pressure is over 140/90, or if
there is a history of genitourinary disease, diabetes or hypertension, a
specimen should be mailed to the designated lab facility.
Is a specimen being sent to the designated lab facility?........... [_] [_]
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9. Have you drawn blood or completed an EKG or X-ray on the Proposed Insured?
[_] Drawn Blood [_] EKG [_] X-ray
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10. Details of "yes" answers and supplementary remarks. Identify them by
question number.
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Ques. No. Comments
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Place lab ID slip
bar code label here} [BAR CODE APPEARS HERE]
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Do you know the Proposed Insured? [_] Yes [_] No
Are you related? [_] Yes [_] No
I have reviewed the history and examined the Proposed Insured in private and
witnessed his/her signature at [_] My office
[_] Proposed Insured's place of business
[_] Proposed Insured's residence
[_]
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on this___________day of___________, 19__ at________o'clock_______M.
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(Printed Name or Paramedical Facility (if used))
M.D.
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Signature of Medical Examiner
M.D
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Printed Name of Medical Examiner
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Confidential information should be forwarded on separate copy to:
Medical Director, Massachusetts Mutual Life Insurance Company,
Springfield, Massachusetts 01111
<PAGE>
Purchase, Redemption and Transfer Procedures and Method
of Computing Adjustments on Payments and Account Value
Massachusetts Mutual Life Insurance Company &
MML Bay State Life Insurance Company
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This document sets forth, as required by Rule 6e-3 (T) (b) (12) (ii) adopted
pursuant to the Investment Company Act of 1940, as amended, the administrative
procedures that will be followed by Massachusetts Mutual Life Insurance Company
("MassMutual") and MML Bay State Life Insurance Company ("MML Bay State")
(collectively and individually MassMutual and MML Bay State are referred to as
the "Company") 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 Policy.
1. "Public Offering Price": Purchase and Related Transactions
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Set forth 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 Policy, the procedures involved necessarily differ in
certain significant respects from the purchase procedures for mutual funds and
other contractual plans.
a. Premiums Schedules
The Company requires a Policyowner to pay a minimum initial premium at
the time of the application, or at any time before delivery of the
Policy. The minimum initial premium for a Policy depends on the Selected
Face Amount of the Policy, riders attached to the Policy, the Insured's
sex, rating class, attained age and death benefit option selected, as
well as the planned frequency of premium payments selected by the
Insured. In some cases it may also depend on the total first monthly
deductions under the Policy. 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 $10.00. The maximum
premium which may be paid in any Policy Year without evidence of
insurability is the greater of: (1) the largest premium which will not
increase the net amount at risk under the Policy; (2) twice the Policy's
cutoff minimum initial annual premium plus $100.00; (3) the annual
premium paid in the preceding Policy Year; and (4) if attached, the Death
Benefit Guarantee rider's minimum annual premium. At the time of
application, the Policyowner also selects a payment frequency (annual,
semiannual, quarterly, or monthly). The Policyowner may change the amount
and the frequency of planned premiums at any time by sending written
notice to the Company's Administrative Office.
A Policyowner may elect to pay premiums by means of a pre-authorized
check procedure called MassMutual Monthly ("Triple M"). Under Triple M,
premium payments are deducted automatically on a monthly basis from a
designated bank account. A Policyowner does not receive a "bill" for
these payments, and confirmation of payments is provided in the Policy's
quarterly report.
The amount and frequency of any additional premium payments will affect
the Policy's 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 attained age, sex,
health and smoker status, and occupation.
b. Underwriting Standards
Upon receipt of a completed application, the Company will follow certain
insurance underwriting (i.e., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve
verification procedures, such as medical examinations, and may require
that further information be provided by the proposed Insured before an
underwriting determination can be made. Depending on the results of this
underwriting review, an Insured will be assigned one of four rating
classifications: preferred non-smoker, standard non-smoker, standard
smoker or substandard. The rating classifications assigned will impact
the mortality and risk charges assessed against a Policy. A Policy will
not be issued until this underwriting procedure has been completed.
<PAGE>
c. Application and Initial Premium Processing
The Policy Date is the starting point for determining Policy Anniversary
Dates, Policy Years, and Monthly Calculation Dates. If a premium is paid
with an application, the Policy Date is the date we receive a completed
Part 1 of the Application. If no premium is paid with the application,
the Policy Date is the date on which the underwriter approves the
application and releases the Policy for issue.
The Register Date is the Policy Date, the day we receive the first
premium under the Policy and the day the Company receives a Part 1 of the
Application in good order, provided such funds and application are in
good order and are received on a given business day by the time the New
York Stock Exchange closes, normally 4:00 PM EST. If receipt is after
such time, the Register Date will be the next business day. "Good order"
requires that Part 1 of the Application is completed, a suitability
review and approval has occurred, all licensing issues are resolved, all
owner and insured information is furnished, and all signatures are
obtained. On the Register Date, The Company will allocate Net Premiums
equaling the premium paid less certain deductions to the Guaranteed
Principal Account and/or the Division(s) in accordance with the
Policyowner's instructions in the application. Subsequent premium
payments received in good order on a given business day by the time the
New York Stock Exchange closes, normally 4:00 PM EST, will be processed
on a "same day" basis. If receipt, however, is after such time, the
subsequent premium payment will be credited on the next business day.
Allocation instructions can be changed prospectively, but allocations
must be in whole percentage points.
d. Insurance Coverage
Subject to certain limitations, temporary life insurance becomes
effective as of the date the Temporary Life Insurance Receipt is
completed and signed by the Insured. Temporary life insurance coverage
continues to, but not including, the earliest of: (1) the date 60 days
after the date the temporary life insurance became effective; (2) the
date the life insurance applied for is approved; (3) the date a policy,
other than as applied for, is presented to the applicant for acceptance
or rejection; (4) if the application is rejected, the date the Company
mails the notice of rejection and refunds the payment made; and (5) the
date the premium payer requests from the Company a refund of the amount
under this receipt. Insurance coverage begins under the Policy when a
completed application has been submitted, the applicant has been judged
to be insurable, the policy has been approved and the initial premium has
been paid. This usually corresponds either with the Policy Date or the
date the Policy is delivered.
e. Free Look Provision
A Policyowner may cancel the Policy within 10 days (or longer if required
by applicable state law) after the Policyowner receives it, or 10 days
after the Company mails or delivers a written notice of withdrawal right
to the Policyowner, or within 45 days after signing Part 1 of the
Application, whichever is latest. Increases in the Policy's Selected Face
Amount may be canceled subject to the same time limitations.
The Policyowner should mail or deliver the Policy and the Policy Delivery
Receipt either to the Company's Home Office or to the agent who sold the
Policy, or to one of our agency offices. The Company will refund an
amount equal to the sum of: (1) the difference between the premiums paid
and the amounts allocated to any Division(s) and the Guaranteed Principal
Account ("GPA") under the Policy; (2) the total amount of Monthly
Deductions made and any other charges imposed on amounts allocated to the
Division(s) or the GPA; and (3) the value of amounts allocated to the
Division(s) or the GPA on the date we receive the returned Policy. The
Policy will then be deemed void from the beginning. For canceled
increases in the Selected Face Amount, the refund will equal: (1) the
difference between the premiums paid attributable to the increase and the
amounts allocated to any division(s) and the GPA under the Policy; (2)
the total amount of monthly deductions and any other charges imposed on
amounts attributable to the increase allocated to the Division(s) and the
GPA; and (3) the value on the day we receive the returned Policy of any
amounts attributable to the increase allocated to the Division(s) or the
GPA. If state law does not authorize the calculations above, the refund
will equal the total of all premiums paid for the Policy or increase,
reduced by any amounts borrowed or withdrawn.
f. Repayment of Indebtedness
A loan made under the Policy will bear interest at the rate of 6% per
year, or the Policyowner may select (in all jurisdictions except
Arkansas) an adjustable loan rate. Under the adjustable loan rate, the
Company each year 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 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 4%,
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.
<PAGE>
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 Policy Debt and will itself bear interest at the
same rate. If the Policy Debt exceeds the Account Value less surrender
charges, 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 61 days
after the due date, or if later, 30 days after we send notice, the Policy
will terminate.
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 loan repayment will
first be allocated to the GPA until the Policyowner has repaid all loan
amounts that originated from the GPA. Any additional loan repayments will
be allocated according to the premium allocation factors in effect. Any
outstanding Policy Debt will be deducted from any amount payable from a
full surrender or upon the death of the Insured. Any loan repayments will
first be allocated to repay the first policy loan in its entirety, and
then the second policy loan in its entirety, etc.
A Policy loan affects the Policy since the Death Benefit and Cash 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. Surrender of a Policy with
outstanding Policy Debt may have tax consequences.
g. Correction of Misstatement of Age or Sex
If the Company discovers that the age or sex of the Insured has been
misstated, the Company will adjust future monthly deductions. If the
Company discovers after the death of the Insured that the age or sex of
the Insured has been misstated, the Company will adjust the Death Benefit
to that which would have been purchased by the most recent monthly
mortality charge for the true age or sex.
2. Redemption Procedures: Surrenders and Related Transactions
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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 other contractual
plans.
a. Account Values
At any time before the death of the Insured, the Policyowner may
surrender the Policy and receive the Cash Surrender Value. This value is
equal to the Account Value on the Valuation Date on which the surrender
request was received in good order, less any surrender charges and Policy
Debt. Surrenders generally will be processed within 7 calendar days of
the receipt of a surrender request in good order. At no time, however,
will the Cash Surrender Value be less than zero. In addition, after the
first Policy Year, the Policyowner may, subject to certain restrictions,
withdraw up to 75% of the Cash Surrender Value of the Policy. The minimum
amount of a partial withdrawal is $100 (before deducting the withdrawal
fee). The Company reserves the right to prohibit withdrawals that would
cause the Selected Face Amount of the Policy to be reduced below $25,000.
Withdrawals may be made at any time by sending a written request to the
Company. The withdrawal amount attributable to a Division or the GPA may
not exceed the non-loaned Account Value of the Division or the GPA. If
Death Benefit Option 1 is in effect, the Company will reduce the Selected
Face Amount by the amount of the withdrawal unless otherwise requested
and satisfactory evidence of insurability is provided. A withdrawal fee
is deducted from the amount withdrawn. The fee is equal to 2% of the
amount withdrawn, but not more than $25.00. A Surrender Charge is not
assessed for withdrawals. The amount withdrawn will be deducted from the
Policy's Account Value at the end of the Valuation Date. Withdrawals may
be made from the GPA or from any Division as the Policyowner directs.
Surrenders and Withdrawals from the Separate Account will generally be
processed within seven days of receipt of the written request./1/
During the first 15 Policy Years and during the first 15 years following
any requested increase in Selected Face Amount, a surrender charge may be
assessed if the Policyowner surrenders the Policy or decreases the
Policy's Selected Face Amount. The surrender charge is the sum of the
surrender charges for the original Selected Face Amount and all increases
in Selected Face Amount, and consists of an Administrative and a Sales
Load component. The Administrative
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/1/Payment from the Separate Account may be postponed whenever: (i) the New York
Stock Exchange is closed for other than for customary week-end and holiday
closings, or trading on the New York Stock Exchange is restricted as determined
by the SEC; (ii) the SEC by order permits postponement for the protection of
Policyowners; or (iii) an emergency exists, as determined by the SEC, as a
result of which disposal of securities is not reasonably practicable or it is
not reasonably practicable to determine the value of the Separate Account's net
assets. Payments from the portion of the Account Value held in the GPA may be
postponed for up to six months. Payments under the Policy of any amount paid to
the Company by check may be postponed until such time as the check has cleared
the Policyowner's bank.
<PAGE>
Surrender Charge component is equal to $5 for each $1,000 of Selected
Face Amount. It remains level for the first five Policy Years, then
grades down to zero over the next five Policy Years. This charge
reimburses the Company for expenses incurred in issuing the Policy, such
as processing the applications (including underwriting) and setting up
computer records. It is not designed to produce a profit. The Sales Load
Surrender Charge component is equal to 26% of the premiums paid in excess
of one band but less than three bands. The surrender charge band is an
amount based on the Selected Face Amount, and the Insured's Issue Age and
sex as shown on the schedule page of the Policy. The Sales Load component
remains level for the first 10 years, then grades down to zero over the
next five Policy Years in accordance with the percentages set forth in
the Policy. Surrender charges for an insurance segment are also deducted
when insurance segments are canceled under a decrease in Selected Face
Amount. Insurance segments are canceled on a last-purchased,
first-surrendered basis. If only a portion of an insurance segment is
canceled, a pro rata portion of the full surrender charge for the segment
will be imposed.
b. Benefit Claims
As long as the Policy remains in force, the Company will pay a Death
Benefit to the named Beneficiary(ies) in accordance with the designated
settlement option, generally within seven days after the Company 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,
during the first two years after an increase in Selected Face Amount, and
in any other circumstances in which the Company may have a basis for
contesting the claim, there can be a delay beyond the seven day period.
All or part of the Death Benefit can be paid in cash or under one or more
of the payment options set forth in the Policy.
We will investigate most death claims arising within the two-year
contestable period. Upon receiving the information from a completed
investigation, we will generally make a determination within five days as
to whether the claim should be authorized for payment. Payments will be
made promptly after authorization. The amount of the death benefit is
determined as of the date of the insured's death. The Company pays
interest from the date of the insured's death at the Option D rate or, if
greater, at a state mandated rate.
c. Policy Loans
At any time after the first Policy Year (or sooner if required by state
law) the Policyowner may borrow under the Policy up to an amount equal to
90% (unless a greater amount is required by law) of the total of the
Account Value at the time of the loan, less the then applicable surrender
charge, less any outstanding Policy Debt. Written requests for a loan
must be sent to the Administrative Offices in a form acceptable to the
Company. 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 and
will also be secured by Account Value in the GPA. If a loan is made and
any of the Account Value is in the Separate Account, then moneys will be
transferred from the Division(s) to the GPA on a pro rata basis. That
portion of the Account Value held in the GPA to secure a loan will accrue
interest at the policy loan interest rate less not more than 2%. This
rate will not be less than the guaranteed interest rate, which is 3%. If
the Policy Debt exceeds the Account Value less surrender charges, 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 61 days after the due
date, or if later, 30 days after we send notice the Policy will
terminate.
The Policy Debt will bear interest at the rate of 6% per year or the
Policyowner may select (except in Arkansas) an adjustable loan rate.
Under the adjustable loan rate, The Company each Policy Year 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 4%, 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.
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 loan repayment will
first be allocated to the GPA until the Policyowner has repaid all loan
amounts that originated from the GPA. Any additional loan repayments will
be allocated according to the premium allocation factors in effect.
- ----------
/2/ Id.
<PAGE>
A Policy Loan, whether or nor 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 the funds in the GPA not
securing a loan different from the rate credited on funds which secure a
loan. The longer a loan is outstanding, the greater the effect is likely
to be. 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. A Policy Loan, whether repaid, can also have
an effect on the Policy's Death Benefit during periods that an increase
or decrease in Account Value will result in an increase or decrease in
the Policy's Death Benefit.
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 the Company during the grace
period, the Policy will terminate without value on the later of 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
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The Separate Account currently has eight divisions, each of which invests
exclusively in shares of one of eight Funds of either the MML Series Investment
Fund or the Oppenheimer Variable Account Funds (collectively the "Trusts"). The
Trusts are open-end diversified management investment companies registered with
the SEC. Transfer requests received in good order for transfers between
divisions generally will be done on a "same day" basis.
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 Account Value (less any
Policy Debt) in the GPA at the time of the transfer. If the Policyowner
transfers 25% of funds allocated to the GPA to the Separate Account for three
consecutive years, the Policyowner can transfer the remaining balance of the GPA
to the Separate Account, but in calculating said amounts any new money in
deposited to the GPA during the preceding three years, shall not be included in
the last transfer. The Account Value in the GPA equal to any Policy Debt cannot
be transferred to the Separate Account. Any transfer will take effect on the
date we receive a written request, satisfactory to us, at our Principal
Administrative Office.
<PAGE>
Exhibit 99.B.
[MASSMUTUAL LETTERHEAD APPEARS HERE]
April 20, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
RE: Post-Effective Amendment No. 3 to Registration Statement
No. 33-89798 filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 3 to Registration Statement No. 33-89798 under the Securities Act
of 1933 for Massachusetts Mutual Life Insurance Company's ("MassMutual")
Flexible Premium Variable Whole Life Insurance Policies (the "Policies").
Massachusetts Mutual Variable Life Separate Account I issues the Policies.
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 Policies. 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 Policies
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/ Richard M. Howe
Richard M. Howe
Second Vice President & Assoc. General Counsel
Massachusetts Mutual Life Insurance Company
<PAGE>
Exhibit 99.E.
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
Massachusetts Mutual Life Insurance Company
We consent to the inclusion in Post-Effective Amendment No. 3 to the
Registration Statement of Massachusetts Mutual Variable Life Separate Account I
(Variable Life Select segment) on Form S-6 (Registration No. 33-89798) of our
report dated February 3, 1998 on our audits of Massachusetts Mutual Variable
Life Separate Account I (Variable Life Select 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.F.
[MASSMUTUAL LETTERHEAD APPEARS HERE]
April 20, 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. 3 to
Registration Statement No. 33- 89798 for Massachusetts Mutual Life Insurance
Company's Flexible Premium Variable Whole Life Insurance Policies (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. 3 to Registration Statement No. 33-89798, and to the reference of
my name under the heading "Experts" in the prospectus.
Sincerely,
/s/ Craig Waddington
Craig Waddington, FSA, MAAA
Vice President and Actuary
