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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Registration Statement No.________
Form S-6
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 OF SECURITIES OF
UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
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A. Exact name of Trust: Massachusetts Mutual Variable Life Separate Account I
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B. Name of Depositor: Massachusetts Mutual Life Insurance Company
C. Complete address of 1295 State Street
Depositor's principal Springfield, MA 01111
executive offices:
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as possible after the
effective date of this Registration Statement.
Pursuant to Rule 24-F-2 of the Investment Company Act of 1940, the Registrant
hereby declares that an indefinite amount of its securities is being registered
under the Securities Act of 1933.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or until this Registration Statement shall become effective on such date as
the Commission, acting pursuant to said section, may determine.
- ----------------------------
STATEMENT PURSUANT TO RULE 24F-2
The Registrant registers 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.
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
1 Cover Page; Definition of Terms; The Separate Account
2 Cover Page; MassMutual and the Separate Account
3 Cover Page; MassMutual and the Separate Account
4 Sales and Other Agreements
5 MassMutual and the Separate Account
6 MassMutual and the Separate Account
7 Not Applicable
8 Appendix F. Financial Statement
9 Legal Proceedings
10 Cover Page; Introduction; Detailed Information about the Policy; Transfers;
Surrender Charges; Withdrawals; Death Benefit; Voting Rights; Free Look
Provision
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 Introduction; 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 Introduction; Detailed Information About the Policy; Exhibit 99(11)
16 Introduction; MassMutual and the Separate Account
17 Introduction; Account Value and Net Surrender Value; Withdrawal Fee;
Exhibit 99(11)
18 MassMutual and the Separate Account
19 Records and Reports
20 Not Applicable
21 Introduction; Policy Loan Privilege
22 Assignment
23 Bonding Arrangement
24 Detailed Information About the Policy; MassMutual and the Separate Account
25 MassMutual and the Separate Account
26 MassMutual; The Investment Advisers
27 Detailed Information About the Policy; MassMutual and the Separate Account
28 Appendix C; Directors and Executive Officers of MassMutual
29 MassMutual and the Separate Account
30 Not Applicable
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CROSS REFERENCE TO ITEMS REQUIRED
BY FORM N-8B-2
Item No. of
Form N-8B-2 Caption
- ----------- -------
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Detailed Information about the Policy; Sales and Other Agreements
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 Detailed Information About the Policy; MassMutual and the Separate Account;
Charges for Federal Taxes;
45 Not Applicable
46 Account Values; MassMutual and the Separate Account
47 MassMutual and the Separate Account
48 MassMutual and the Separate Account
49 Detailed Information About the Policy
50 MassMutual and the Separate Account
51 Cover Page; Detailed Information About the Policy; Additional Information
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 Appendix F (to be filed)
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FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICIES*
ISSUED BY MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
This Prospectus describes a flexible premium adjustable variable life insurance
policy (the "Policy") offered by Massachusetts Mutual Life Insurance Company
("MassMutual"). The Policy, for as long as it remains in force, provides
lifetime insurance protection on the two Insureds named in the Policy, and pays
a Death Benefit at the death of the Insured. The minimum Initial Face Amount
which may be purchased is $50,000 currently. The Policy is designed to provide
flexibility of premium payments and Death Benefits by permitting the Owner,
subject to certain restrictions, to vary the frequency and amount of premium
payments and to increase or decrease the Death Benefit payable under the Policy.
This flexibility allows an Owner to provide for changing insurance needs under a
single insurance policy. A Policy also may be surrendered for its Net Surrender
Value.
The Owner may allocate Net Premiums and Account Value among the divisions (the
"Divisions") of the designated segment of MassMutual 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 six funds of MML Series Investment Fund (the "MML Trust"), four funds of
Oppenheimer Variable Account Funds (the "Oppenheimer Trust"), one fund of the
Variable Insurance Products Fund II (VIP II managed by Fidelity Management &
Research Company), one fund of the T. Rowe Price Equity Series, Inc., and one
fund of American Century Variable Portfolios, Inc. The individual funds are as
follow.
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MML TRUST OPPENHEIMER TRUST VARIABLE INSURANCE PRODUCTS FUND II
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MML Equity Fund Oppenheimer Aggressive Growth Fund VIP II Contrafund Portfolio
MML Money Market Fund Oppenheimer Global Securities Fund
MML Managed Bond Fund Oppenheimer Growth Fund T. ROWE PRICE EQUITY SERIES, INC.
--------------------------------------
MML Blend Fund Oppenheimer Strategic Bond Fund T. Rowe Price Mid-Cap Growth Portfolio
MML Equity Index Fund AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
MML Small Cap Value Equity Fund -----------------------------------------
American Century VP Income & Growth
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The Owner bears the investment risk of any Account Value allocated to the
Separate Account. The Death Benefit may, and the Net Surrender Value will, vary
depending on the investment performance of the Divisions. While there is no
guaranteed minimum Net Surrender Value for funds invested in the Separate
Account, as long as a Policy is in force the Policy's Death Benefit will never
be less than the Face Amount less any Policy Debt and any unpaid premiums.
Furthermore, the Policy will not terminate if the Policy Value is sufficient to
pay the Monthly Charges or if the Safety Test has been met during a Guarantee
Period.
All Policies are serviced through MassMutual's Administrative 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 TRUST 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.
WE DO NOT CLAIM 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.
MAY 1, 1998
This Prospectus does not constitute an offer or solicitation to acquire any
interest or participation in the survivorship flexible premium adjustable
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.
*Title may vary in some jurisdictions
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TABLE OF CONTENTS
I. INTRODUCTION 3
II. DETAILED DESCRIPTION OF THE POLICY
Availability of Policy 4
Death Benefit 4
Premiums 5
Transfers 7
Policy Termination and Reinstatement 7
Charges and Deductions 8
Deductions from Premiums 8
Monthly Charges Against the Account Value 9
Daily Charges Against the Separate Account 9
Surrender Charges 9
Other Charges 10
Account Value and Net Surrender Value 10
Policy Loan Privilege 10
Free Look Provision 11
The Guaranteed Principal Account 11
When We Pay Proceeds 12
Federal Income Tax Considerations 12
Your Voting Rights 14
Reservation of Rights 15
Additional Benefits You Can Get by Rider 15
Payment Options 15
Beneficiary 16
Assignment 16
Limits on Our Right to Challenge the Policy 17
Error of Age or Sex 17
Suicide 17
Sales and Other Agreements 17
Compensation 17
Bonding Arrangement 18
Legal Proceedings 18
Experts 18
III. ADDITIONAL INFORMATION
MassMutual 18
Records and Reports 19
The Separate Account 19
MML Trust and Oppenheimer Trust 19
Variable Insurance Products Fund II 20
T. Rowe Price Equity Series, Inc. 20
American Century Variable Portfolios 20
The Investment Advisers 22
APPENDIX A
Definition of Terms 23
APPENDIX B
Examples of Death Benefit Option Changes 25
APPENDIX C
Rates of Return 26
APPENDIX D
Illustration of Death Benefits, Net Surrender Values, and
Accumulated Premiums 30
APPENDIX D
Rates of Return 26
APPENDIX E
Directors of MassMutual 43
Executive Vice Presidents 44
APPENDIX F
Financials (to be filed) 46
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I. INTRODUCTION
Note: Please refer to Appendix A, Glossary for definitions of the terms
contained in this Prospectus.
You should consult Your Policy for further understanding of its term and
conditions and for any state-specific provisions and variances that may apply to
Your Policy.
The Policy is a life insurance contract providing a Death Benefit, an Account
Value, surrender rights, policy loan privileges, and other features
traditionally associated with life insurance. The Policy is a "flexible
premium" policy because there is no fixed schedule of premium payments.
Although the Owner may establish a schedule of premium payments ("Planned
Premium Payments"), failure to make a Planned Premium Payment will not
necessarily cause a Policy to terminate nor will making the Planned Premium
payments guarantee a Policy will remain in force. The flexibility of premium
payment timing and amount allows an Owner to match premium payments to income
flows or other financial decisions.
The Policy is "adjustable" because the Owner may choose to increase or decrease
the Death Benefit and to change the Death Benefit Option under the Policy. The
Policy is "variable" because the Death Benefit may, and the Net Surrender Value
will, vary in relation to the investment experience of the Divisions of the
Separate Account to which an Owner has allocated Net Premiums. Additionally,
the GPA's crediting interest rate may be adjusted periodically, although it will
not drop below 3%.
The following diagram summarizes the elements of this Policy, and how the Policy
works.
HOW THE POLICY WORKS
PREMIUM PAYMENT
A Premium Expense Charge is deducted from
each Premium Payment (graphic arrow to
"Net Premium")
NET PREMIUM
Net Premium and Account Value are
allocated among the Divisions of the
Separate Account and the GPA (graphic
arrow to "Account Value")
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INVESTMENT EARNINGS ACCOUNT VALUE ACCOUNT VALUE CHARGES
Investment earnings of the Divisions of Monthly deductions for administrative,
the Separate Account less fund Insurance, and rider expenses are
investment management fees and separate The Account Value is allocated among the deducted each month
account fees are credited/ debited daily available investment options.
Interest is credited on values in the (graphic arrow to "Account Value
Guaranteed Principal Account Charges", "Owner Access to Account OWNER ACCESS AND ACCOUNT VALUE
(graphic arrow to "Account Value") Value", "Death Benefit" and "Policy You may access Account Values through
Surrender") loans and withdrawals
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DEATH BENEFIT POLICY SURRENDER
A choice of 3 Death Benefit Options is In the first 10 years of coverage, if
available. The Option chosen may be coverage is surrendered, a surrender
changed at a later date charge will be deducted from the
surrender proceeds
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II. DETAILED DESCRIPTION OF THE POLICY
AVAILABILITY OF THE POLICY
Individuals wishing to purchase a Policy must send a completed application to
MassMutual's Administrative Office. Under our current rules, which can be
changed at our sole discretion, the minimum Initial Face Amount of a Policy is
$50,000. The Policy can be issued to Insureds between the ages of 18 and 85
inclusive. Before issuing a Policy, MassMutual will require satisfactory
evidence of insurability, which usually will include a medical examination.
The Policy is available to individuals who are purchasing a Policy in connection
with employee benefit plans that qualify for tax benefits under the Internal
Revenue Code (the "qualified market") and to other individuals (the
"nonqualified market").
UNISEX Policies issued in states requiring "unisex" policies (currently only
Montana) provide policy values that do not vary by the sex of the Insured. In
addition, Policies issued in conjunction with employee benefit plans provide
policy values that do not vary by sex. Thus, references in the Prospectus to
sex-distinct policy values are not applicable to Policies issued in Montana or
issued in conjunction with employee benefit plans. Illustrations showing the
effect of these unisex rates on premiums, Net 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
death of the Insured, pay the Death Benefit of the Policy to the named
Beneficiary. Although MassMutual normally will 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.
MINIMUM DEATH BENEFIT. In order to qualify as life insurance pursuant to I.R.C.
Section 7702, the Policy has a Minimum Death Benefit. The Minimum Death Benefit
is determined using one of two allowable Death Benefit Compliance Tests. The
applicable Test is chosen at the time of application and cannot be changed after
the Policy is issued. Under one of the tests, the Cash Value Test, the Minimum
Death Benefit is equal to an applicable percentage of the Account Value. The
applicable percentage depends on the sex (male, female, unisex), tobacco
classification, and Attained Age of the Insured. Under the other test, the
Guideline Premium Test, the Minimum Death Benefit also is equal to an applicable
percentage of the Account Value, but the percentage varies only by the Attained
Age of the Insured. The applicable percentages are set forth in the Policy.
The choice of the Guideline Premium Test or the Cash Value Test will depend on
how You intend to pay premiums. In general, if You intend to pay premiums in
early policy years only, the Cash Value Test may be more appropriate. If You
intend to pay level premiums over a long period of years, the Guideline Premium
Test may be more appropriate. It is important You see policy illustrations of
both approaches to determine how the policy works under each approach, and which
is best for You
DEATH BENEFIT OPTIONS. The Death Benefit is the amount of the benefit provided
under the Death Benefit Option in effect on the date of death, less any
outstanding Policy Debt and less any unpaid premium needed to avoid termination
under the grace period provision. The Owner may choose one of three Death
Benefit Options: Option 1 (a level amount option) or Options 2 or 3 (variable
amount options). The Death Benefit Option is chosen in the application and
subsequently may be changed subject to certain restrictions described in CHANGES
IN THE DEATH BENEFIT OPTION.
Options 1, 2 and 3 provide the following benefits.
OPTION 1 - Under Option 1, the benefit provided is the greater of: (a) the Face
Amount on the date of death; and (b) the Minimum Death Benefit on the date of
death.
OPTION 2 - Under Option 2, the benefit provided is the greater of: (a) the Face
Amount plus the Account Value on the date of death; and (b) the Minimum Death
Benefit on the date of death.
OPTION 3 - Under Option 3, the benefit provided is the greater of: (a) the Face
Amount plus the premiums paid less any premiums refunded (See PREMIUM
LIMITATIONS) under the Policy to the date of death; and (b) the Minimum Death
Benefit on the date of death.
The following examples illustrate how changes in the Account Value and the
amount of premiums paid may affect the Death Benefits under Options 1, 2, and 3.
EXAMPLE I
Under Option 1, the Death Benefit will remain at the Face Amount, in this
example $1,000,000, unless the Minimum Death Benefit exceeds the Face Amount.
Assume the Owner has selected Option 1 with a Face Amount of $1,000,000. The
Account Value is $50,000. The Death Benefit in this case is $1,000,000. The
Minimum Death Benefit is $219,000. If the Account Value increases to $80,000,
the Minimum Death Benefit increases to $350,400, but the Death Benefit remains
at $1,000,000. If
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the Account Value decreases to $30,000, the Minimum Death Benefit decreases to
$131,400 and the Death Benefit still remains at $1,000,000.
EXAMPLE II
Under Option 2, the Death Benefit will be the Face Amount plus the Account Value
unless the Minimum Death Benefit exceeds the sum of the Face Amount plus the
Account Value.
Assume the Owner has selected Option 2 with a Face Amount of $1,000,000. The
Account Value is $50,000, and the Minimum Death Benefit is $219,000. The Death
Benefit in this case is $1,050,000 (Face Amount plus Account Value). If the
Account Value increases to $80,000, the Minimum Death Benefit will increase to
$350,400, and the Death Benefit will increase to $1,080,000. If the Account
Value decreases to $30,000, the Minimum Death Benefit will decrease to $131,400,
and the Death Benefit will decrease to $1,030,000.
EXAMPLE III
Under Option 3, the Death Benefit will be the Face Amount plus the premiums paid
under the Policy, less any premium refunds, unless the Minimum Death Benefit
exceeds the sum of the Face Amount plus the premiums paid.
Assume the Owner has selected Option 3 with a Face Amount of $1,000,000. The
Account Value is $50,000, the Minimum Death Benefit is $219,000 and premiums
paid under the Policy to-date total $40,000. The Death Benefit in this case is
$1,040,000. If an additional $30,000 of premium is paid into the Policy and the
Account Value increases to $80,000, the Minimum Death Benefit will increase to
$350,400, and the Death Benefit will increase to $1,070,000.
CHANGES IN DEATH BENEFIT OPTION. After the first Policy Year, the Owner may
change the Death Benefit Option. Any changes of Death Benefit Option may require
a written application and satisfactory evidence of insurability. The effective
date of any change will be the Monthly Charge Date that is on or precedes 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. The Policy Face Amount will be increased or decreased to give the
same Death Benefit under the new Death Benefit Option.
A change in Death Benefit Option will not be allowed if it would result in a
Face Amount of less than $50,000 after the change, or if the insured is older
than Attained Age 85.
An increase or decrease in Face Amount resulting from a change in the Death
Benefit Option will affect the Monthly Charges, as they depend in part on the
Face Amount. The charge for certain additional benefits also may be affected.
The Surrender Charge, however, will not be affected by an increase or decrease
in Face Amount resulting from a change in the Death Benefit Option.
For examples of Death Benefit Option changes and their impacts on the contract,
see APPENDIX B.
CHANGES IN FACE AMOUNT. The Owner may request an increase or decrease in the
Face Amount subject to certain requirements. Any request for an increase or
decrease must be submitted in writing to MassMutual's Administrative Office. It
will become effective on the Monthly Charge Date that is on or precedes
MassMutual's acceptance of the request.
INCREASES IN FACE AMOUNT. For an increase in the Face Amount, MassMutual
requires a written application and satisfactory evidence of insurability. An
increase may not be less than $15,000, and no increase will be permitted after
the Insured reaches Attained Age 85.
An increase in Face Amount will affect the Monthly Charges. The Face Amount
Charge and the Insurance Charges will increase
DECREASES IN FACE AMOUNT. Decreases in coverage are allowed after the first
Policy Year or one year after a Face Amount increase by written request. A
decrease will not be permitted if the Face Amount would fall below $50,000.
A decrease may result in the deduction of Surrender Charges from the Account
Value. (For a discussion of the Surrender Charges associated with a decrease,
see SURRENDER CHARGES.) Any Surrender Charges applicable to a decrease will be
deducted from the Division(s) of the Separate Account and from the GPA in
proportion to the nonloaned values in each.
A decrease will reduce the Face Amount in the following order: (a) the Face
Amount provided by the most recent increase; (b) the Face Amounts provided by
the next most recent increases successively; and finally (c) the Initial Face
Amount. As a result, a decrease in Face Amount will affect the Monthly Charges
deducted from the Account Value.
A decrease may result in the Policy becoming a "modified endowment contract".
(See POLICY PROCEEDS, PREMIUMS AND LOANS.)
PREMIUMS
Subject to certain limitations, the Owner has flexibility in determining the
frequency and amount of premium payments.
PREMIUM FLEXIBILITY. Unlike traditional insurance policies, this Policy frees
the Owner from required premium payments and a rigid premium schedule. Instead,
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MassMutual requires an Owner to pay only 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.
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 Initial Face Amount of the Policy.
PLANNED ANNUAL PREMIUM. When applying for a Policy, the Owner will select a
planned annual premium and payment frequency (annual, semiannual, quarterly, or
monthly check service). The planned premium at the payment frequency chosen 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
Owner may change the amount and frequency of planned premiums at any time by
sending written notice to MassMutual's Administrative Office.
An Owner may elect to pay premiums by means of a preauthorized check procedure.
Under this procedure, premium payments are deducted automatically on a monthly
basis from a designated bank account. An Owner does not receive a "bill" for
these payments.
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 on maintaining a sufficient Policy Value, or meeting the Safety
Test ( See POLICY TERMINATION section.). The Policy Value is equal to the
Account Value less any outstanding Policy Debt during the first three Policy
Years. It is equal to the Net Surrender Value in years four and later. Even if
planned premiums are paid, if the Safety Test is not met, the Policy terminates
when the Policy Value becomes insufficient to pay the Monthly Charges and the
grace period expires without sufficient payment.
PREMIUM LIMITATIONS. After the first premium is paid, the minimum premium
payment is $20. If the Cash Value Test has been chosen as the Death Benefit
Compliance Test, the maximum premium that may be paid in any Policy Year without
evidence of insurability is the greatest of (a) the premium that will not
increase the net amount at risk under the Policy; (b) twice the Policy's Target
Premium plus $100; and (c) the annual premium paid in the preceding Policy year.
If the Guideline Premium Test has been chosen, the maximum premium is equal to
the lesser of the maximum premium as determined above and the Guideline Premium
Test premium limitation. We have the right to refund any premium amount that
exceeds these limitations. Premium payments should be sent either to
MassMutual's Administrative 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.) At the time
of Application, the Owner indicates how Net Premiums are to be allocated among
the Divisions of the Separate Account and the GPA. The allocation percentages
must be in whole numbers and the sum of the allocation percentages must equal
100%.
The allocation percentages may be changed without charge at any time by
providing written notice to MassMutual's Administrative Office. The maximum
number of different Divisions that may be used during the life of the Policy is
16.
Any Initial Net Premium received with an application will be deposited to
MassMutual's General Account and earn interest at the rate set by MassMutual
from the Policy Date to the date the Policy is issued. Once the Policy has been
issued, the Net Premium plus interest earnings, less any Monthly Charges will be
allocated either in accordance with the allocation percentages in the
Application, or to the Money Market Division of the Separate Account on the next
business day after the Issue Date. If under the Free Look Provision, the Owner
receives (i) any premium paid for this Policy plus (ii) interest credited to
this Policy under the Guaranteed Principal Account, plus or minus (iii) an
amount reflecting the investment experience of the investment divisions of the
Separate Account under this Policy to the date the Policy is received by us,
minus (iv) any amounts withdrawn and any Policy Debt, this amount will be
allocated to the GPA and the Divisions of the Separate Account based on the
allocation percentages in the Application. If under the Free Look Provision,
the Owner receives the total of all premiums paid for the Policy, reduced by any
amounts borrowed or withdrawn, this amount will be allocated to the Money Market
Division of the Separate Account.
If the Initial Net Premium plus interest earnings, less any Monthly Charges is
allocated to the Money Market Division of the Separate Account, Subsequent Net
Premiums received during the Free Look Period also will be allocated to the
Money Market Division of the Separate Account at the price next determined after
receipt in good order at our Administrative Office, or at the address indicated
on the billing notice. At the end of the Free Look Period, the Money Market
account balance will be transferred to the GPA and the Separate Accounts in
accordance with the allocation percentages in the Application.
If the Initial Net Premium plus interest earnings, less any Monthly Charges is
allocated in accordance with the allocation percentages in the Application,
Subsequent Net Premiums will be deposited on the Valuation Date on or next
following the date We receive the Subsequent Net Premiums in good order at our
Administrative Office, or at the address indicated on the billing notice.
Transfers from
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one Division to another will be credited on the Valuation Date the Transfer
Request is received in good order.
TRANSFERS
By written request, the Owner may transfer all or part of the Account Value of a
Division of the Separate Account to any other Division or to the GPA. Although
MassMutual currently imposes no limitation on the right of the Owner to make
transfers, we reserve the right to limit transfers to no 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 or
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. If 25% of the Fixed
Account Value has been transferred from the GPA each year for three consecutive
Policy Years, and no value has been transferred into the GPA, nor premiums
allocated to the GPA, during this time, the remainder of the Fixed Account Value
(less any Policy Debt) may be transferred, in one transaction, out of the GPA in
the succeeding Policy Year.
Any transfer is effective on the Valuation Date at the price next determined
after receipt of the request in good order at our Administrative Office. There
are no charges for transfers.
POLICY TERMINATION AND REINSTATEMENT
Policy Termination. This Policy will not terminate for failure to pay premiums
since premium payments, other than the Initial Premium Payment, are not
specifically required. Rather, if in the first three Policy Years the Account
Value less any Policy Debt is not enough to cover the Monthly Charges on a
Monthly Charge Date, or if in subsequent Policy Years the Net Surrender Value is
not enough to cover the Monthly Charges on a Monthly Charge Date, the Policy
will enter a 61day grace period unless the Safety Test has been met.
At the beginning of the grace period, MassMutual will mail a notice to the
Owner's last known address stating the amount of premium needed to cover the
shortfall. During the grace period, the Policy remains in force. If the
required premium is not paid within 61 days after the Monthly Charge Date (or,
if later, within 30 days after we mail the written notice), the Policy
terminates without value.
If the Account Value less Policy Debt in the first three Policy Years or the Net
Surrender Value in subsequent years is insufficient to pay the Monthly Charges
on a particular Monthly Charge Date and the Safety Test (as described below) has
been met on that date, the Monthly Charges for that Date will be reduced to an
amount equal to the Account Value less any Policy Debt.
The Safety Test is not available for New York contracts. The Safety Test can be
met only during the Guarantee Period. The Guarantee Period is the lesser of 20
years or to the Insured's age 90. The Guarantee Period has a Guarantee premium
associated with it. This premium varies depending on the issue age, sex, and
issue classification of the Insured and the Death Benefit Option in effect. The
Guarantee premium for Your Policy is shown in the Policy. On any day during the
Guarantee Period, the Safety Test is met if the premiums paid less amounts
withdrawn accumulated with interest to that day, equal or exceed the Guarantee
premium accumulated with interest to that date. The effective annual rate of
interest used to accumulate these amounts is 3%. Consult Your Policy for the
Guarantee Period available to You.
REINSTATEMENT. For a period of five years after a Policy terminates, the Owner
can request that We reinstate the Policy provided the Insured has not died since
the Policy termination. However, the Policy cannot be reinstated if it has been
surrendered for its Net Surrender Value. Please note 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 sufficient to keep the policy in force for three months
following reinstatement:
(c) Where applicable, a signed acknowledgement the Policy has become a modified
endowment contract.
If We reinstate the Policy, the Face Amount for the reinstated Policy will be
the same as it would have been if the Policy had not terminated. The premium
payment will be allocated based on the allocation requested at the time of
reinstatement effective on the Monthly Charge Date on which the Policy is
reinstated. The Account Value at the time of reinstatement will be the net
amount of the premium paid at the time of reinstatement, less any Monthly
Charges taken at that time.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate MassMutual
for: (a) providing the insurance
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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 selling and distributing the Policy. Additionally,
certain expenses are deducted from the underlying funds. For more information
about these expenses, see the individual fund prospectuses. A summary of the
product and separate account charges is as follows.
<TABLE>
<CAPTION>
CURRENT RATE GUARANTEED RATE
<S> <C> <C>
Premium Expense Charge Coverage Years 1-10:13% of premium up to All Coverage Years: 13% of premium up to
Expense Premium; 3% of premium over Expense Expense Premium; 3% of premium over Expense
Premium Premium
Coverage Years 11+: 3% of all premium
Administrative Charge Policy Years 1-10: $12 per month per policy All Coverage Years: $12 per month per policy
Policy Years 11+: $6 per month per policy
Face Amount Charge Coverage Years 1-10: $0.13 per month per Coverage Years 1-10: $0.13 per month per
$1,000 of Face Amount $1,000 of Face Amount
Coverage Years 11+: $0.0 Coverage Years 11+: $0.0
Insurance Charges A per thousand rate multiplied by the For standard risks, the guaranteed cost of
amount at risk each month. The rate varies insurance rates are based on 1980
by the sex, issue age, and risk Commissioners Standard Ordinary (CSO)
classification of the Insured, and the Year Mortality Tables.
of Coverage.
Mortality and Expense Risk Charge All Policy Years: 0.25% on an annual basis All Policy Years: 0.90% on an annual basis
of daily net asset value of the Separate of daily net asset value of the Separate
Account Account
Loan Rate Expense Charge Policy Years 1-10: 0.50% of loaned amount All Policy Years: 2.0% of loaned amount
Policy Years 11+: 0.25% of loaned amount
Withdrawal Fee $25 $25
Surrender Charges First coverage year: the lesser of 100% of First coverage year: the lesser of 100% of
the Target Premium or $60 per thousand of the Target Premium or $60 per thousand of
Face Amount. Face Amount.
Coverage years 2-10: the prior year Coverage years 2-10: the prior year
Surrender Charge reduced by 10% of the Surrender Charge reduced by 10% of the
first year Surrender Charge first year Surrender Charge
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DEDUCTIONS FROM PREMIUMS
A Premium Expense Charge is deducted from each premium payment made prior to the
allocation of the payment to the Divisions of the Separate Account and the GPA.
The Premium Expense Charge distinguishes between premium payments up to the
Expense Premium, and premium payments over the Expense Premium. The Expense
Premium is based on the issue age, sex, and risk classification of the Insured.
Premiums are allocated to the Initial Face Amount and any subsequent increases
based on the ratio of the Expense Premium for each segment to the total of the
Expense Premiums for all segments.
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MONTHLY CHARGES AGAINST THE ACCOUNT VALUE
Charges will be deducted from the Account Value on each Monthly Charge Date. The
Monthly Charges consist of: (a) an Administrative Charge; (b) a Face Amount
Charge; (c) an Insurance Charge; and (d) 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 nonloaned
values of the Policy in the Division(s) and the GPA.
ADMINISTRATIVE CHARGE AND FACE AMOUNT CHARGE. The monthly Administrative Charge
and Face Amount Charge reimburse MassMutual for expenses incurred in issuing and
administering the Policy, and for such activities as processing claims,
maintaining records and communicating with Owners.
INSURANCE CHARGES. The monthly Insurance Charge for a Policy is equal to the
"amount at risk" under the Policy, multiplied by the monthly Insurance Charge
rate for that Policy month. The amount at risk is determined on the first day
of each Policy month and is the amount by which the Death Benefit (discounted at
the monthly equivalent of 3% per year) exceeds the Account Value.
Insurance rates will be based on the sex, Issue Age, and risk class of the
Insured, and the Year of Coverage. MassMutual currently places Insureds into the
following three standard rate classes: Select-Preferred Nontobacco, Preferred
Nontobacco, and Preferred Tobacco; as well as substandard rate classes involving
higher mortality risks. In an otherwise identical Policy, the monthly insurance
rate is higher for tobacco users than for those who do not use tobacco and
higher for Preferred Nontobacco Insureds than for Select-Preferred Nontobacco
Insureds.
RIDER CHARGE. The monthly rider 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
the net asset value of the Separate Account for mortality and expense risks.
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 not all the money MassMutual collects from this charge is 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.
INVESTMENT MANAGEMENT FEE AND OTHER EXPENSES. Because the Divisions of the
Separate Account purchase shares of MML Trust, Oppenheimer Trust, (Fidelity)
Variable Insurance Products Fund II, T. Rowe Price Equity Series, Inc., or
American Century Variable Portfolios, Inc., the value of Accumulation Units of
the Divisions will reflect the investment management fee and other expenses
incurred by these entities. The prospectuses for these funds contain additional
information concerning such fees and expenses.
SURRENDER CHARGES
During the first 10 Years of Coverage for the Initial Face Amount and during the
first 10 Years of Coverage for any increase in Face Amount, MassMutual will
impose a Surrender Charge against the Account Value if the Owner surrenders the
Policy or decreases the Face Amount under the Policy. The Surrender Charge in
the first Year of Coverage is the lesser of 100% of the Target Premium or $50
per thousand of Face Amount. The Target Premium is used to determine the maximum
premium limitation, Surrender Charges and agent commissions. The Target Premium
is based on the issue age, sex, and risk classification of the Insured. The
Surrender Charge is decreased by 10% of the first year Surrender Charge in each
of the next nine years of coverage, and is zero in the eleventh year. Surrender
Charges are calculated separately for the Initial Face Amount and for each
increase in the Face Amount.
SURRENDER CHARGE UPON DECREASE IN SELECTED FACE AMOUNT. Elected decreases in
Face Amount--that is, decreases resulting from other than a Withdrawal or a
change in the Death Benefit Option-- result in canceling all or a part of
previously issued Face Amount segments. A partial Surrender Charge is assessed
and deducted from the Account Value. The partial Surrender Charge is equal to
the Surrender Charge associated with each canceled Face Amount segment. If the
partial Surrender Charge for a decreased or canceled Face Amount segment would
be greater than the Account Value of the Policy, the partial Surrender Charge
for that decrease is set equal to the Account Value on the date of the
surrender.
The Surrender Charge after the decrease equals the Surrender Charge prior to the
decrease less the partial Surrender Charge taken.
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<PAGE>
OTHER CHARGES
WITHDRAWAL FEE. For each Withdrawal, a charge of $25 will be deducted from the
amount withdrawn.
LOAN INTEREST RATE EXPENSE CHARGE. This charge reimburses MassMutual for
expenses incurred in administering loans.
ACCOUNT VALUE AND NET 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. Following
the Free Look Period, this amount is allocated among the Separate Account
Divisions and the GPA according to the net premium allocation requested at the
time of Application (See ALLOCATION OF NET PREMIUM PAYMENTS section for more
details.).
INVESTMENT RETURN. The investment return of a Policy is based on:
(a) The Account Value held for the Policy in each Division of the Separate
Account;
(b) The investment experience of each Division as measured by its actual net
rate of return; and
(c) The interest 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 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 net investment
experience from the end of one Valuation Date to the end of the next Valuation
Date.
NET SURRENDER VALUE. The Policy may be fully surrendered for its Net Surrender
Value at any time while the Insured is living. The Net Surrender Value is equal
to the Account Value less any applicable Surrender Charges and less any Policy
Debt as of the date the Company receives the request to surrender in good order.
The surrender will be processed within 14 days.
An Owner may surrender the Policy by sending a written request together with the
Policy to MassMutual's Administrative Office. The proceeds will be determined
as of the end of the Valuation Date on which the request for surrender is
received in good order.
WITHDRAWALS. After the first Policy Year, the Owner may, subject to certain
restrictions, withdraw up to 75% of the Net Surrender Value. For each
Withdrawal, a fee of $25 is deducted from the amount withdrawn. The minimum
amount of a Withdrawal is $100 (before deducting the Withdrawal fee). We
reserve the right to prohibit Withdrawals that would result in a reduction of
the Face Amount to less than $50,000.
The Withdrawal amount will be made on a pro-rata basis from the Divisions of the
Separate Account and the GPA based on the non-loaned Account Value of the
Divisions of the Separate Account and the GPA at the price next determined after
receipt in good order of the Withdrawal request, and will be processed within
seven days. The Withdrawal amount attributable to a Division of the Separate
Account or to the GPA may not exceed the nonloaned Account Value of the Division
or GPA. If Death Benefit Option 1 or 3 is in effect, MassMutual will reduce the
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, the Owner may obtain a loan from the
Policy as long as the Account Value exceeds the total of any Surrender Charges.
The Policy must be assigned to MassMutual as collateral for the loan. The
maximum amount that can be borrowed at any time is 90% of the Policy's Account
Value less any Surrender Charge. This is reduced by any outstanding Policy
Debt, which includes accrued interest.
SOURCE OF LOAN. The Policy loan amount requested is taken from the Divisions of
the Separate Account and the GPA in proportion to the Account Value of each
Division and the GPA (excluding any outstanding loans) on the date of the loan.
Loaned amounts are taken from the Divisions by liquidating units and the
resulting dollar amounts are transferred to the loaned portion of the GPA. We
may delay the granting of any loan taken from the GPA for up to six months. We
also may delay the granting of any loan from the Divisions of the Separate
Account during any period that: (i) the New York Stock Exchange is closed (other
than customary weekend and holiday closings); (ii) trading is restricted; (iii)
the SEC determines a state of emergency exists; or (iv) the Securities and
Exchange Commission permits MassMutual to delay payment for the protection of
our Owners.
Whenever total Policy Debt (which includes accrued interest) equals or exceeds
the Account Value less Surrender Charges, MassMutual will send a notice to the
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<PAGE>
Owner. 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 plus a
premium payment sufficient to keep the policy in force for three months, 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.
LOAN INTEREST CHARGED. At the time of Application, the Owner may select a loan
interest rate of 5% or (in all jurisdictions except Arkansas) an adjustable loan
rate. Each year MassMutual will set the adjustable rate that will apply for the
next Policy Year. The maximum loan rate is based on the Monthly Average
Corporate 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 on Policy loans 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 nonloaned Account Value in each.
REPAYMENT. All or part of any Policy Debt may be repaid at any time the Insured
is living and while the Policy is in force. Any loan repayment made within 30
days of the policy Anniversary date pays policy loan interest due. Any other
loan repayment first will be allocated to the GPA until the Owner has repaid all
loan amounts that originated from the GPA. Additional loan repayments will be
allocated according to the premium allocation factors in effect. Loan
repayments must be clearly identified as such; otherwise they will be considered
premium payments.
Any outstanding Policy Debt will be deducted from the proceeds payable at death
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% and the
Policy loan rate less the Loan Interest Rate Expense Charge. This Charge is 2%
on a guaranteed basis and 0.50% in Policy Years one through 10 and 0.25% in
Policy Years 11 and later on a current basis.
EFFECT OF LOAN. A Policy loan affects the Policy since the Death Benefit and
Net Surrender Value under a Policy are reduced by the amount of the loan.
Repayment of the loan increases the Death Benefit and Net Surrender Value under
the Policy by the amount of the repayment. Taking a Policy loan could have tax
consequences. (See POLICY PROCEEDS, PREMIUMS AND LOANS.)
As long as a loan is outstanding, a portion of the Policy Account Value equal to
the loan is held in the GPA. This amount is not affected by the Separate
Account investment performance. The Account Value may be impacted since 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 Division(s) of the Separate Account from which the
loan was taken.
FREE LOOK PROVISION
The Owner may cancel the Policy within 10 days after the Owner receives it.
(This period may be longer in some states.)
The Owner should mail or deliver the Policy and Policy delivery receipt either
to MassMutual's Administrative 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 Owner. The refund may be equal to the sum of: (i) any
premium paid for this Policy; plus (ii) interest credited to this Policy under
the Guaranteed Principal Account; plus or minus (iii) an amount reflecting the
investment experience of the investment divisions of the Separate Account under
this Policy to the date the Policy is received by us; minus (iv) any amounts
withdrawn and any Policy Debt. Or, the refund may be equal to the total of all
premiums paid for the Policy, reduced by any amounts borrowed or withdrawn.
Check Your contract to determine which refund is applicable under Your Policy.
THE GUARANTEED PRINCIPAL ACCOUNT
An Owner may allocate some or all of the Net Premiums and transfer some or all
of the Account Value in the Divisions of the Separate Account, 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
11
<PAGE>
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.
MassMutual guarantees 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 the Loan Interest Rate Expense
Charge. 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.
WHEN WE PAY PROCEEDS
If the Policy has not terminated, payment of the Net Surrender Value is made
within 14 days, and payment of loan proceeds, partial Withdrawals or the Death
Benefit are made within seven days after We receive all required documents in a
form satisfactory to us at our Administrative Office. But We can delay payment
of the Net Surrender Value or any Withdrawal from the Separate Account or any
loan proceeds attributable to the Separate Account during any period when: (i)
it is not reasonably practical to determine the amount because the New York
Stock Exchange is closed (other than customary weekend and holiday closings); or
(ii) trading is restricted by the SEC; or (iii) the SEC declares an emergency
exists; or (iv) the SEC, by order, permits us to delay payment in order to
protect our Owners.
We may delay paying any Net Surrender Value, any Withdrawal, or any loan
proceeds based on the GPA for up to six months from the date the request is
received at our Administrative Office.
We can delay payment of the entire Death Benefit if payment is contested. We
investigate all death claims arising within the two year contestable period. We
may investigate death claims arising beyond 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 Net Surrender or Withdrawal is delayed for 30 days or more, We
add interest to the date of payment at the same rate it is paid under the
interest payment option. Interest is paid on the Death Benefit from the date of
death to the date of payment.
FEDERAL INCOME TAX CONSIDERATIONS
Policy Proceeds, Premiums and Loans MassMutual believes 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 excludible
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 that is equal to the total
consideration paid for the Policy may be excluded from gross income. The Owner
is not deemed to be in constructive receipt of the cash values, including
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).
Decreases in 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 Owner 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 it exceeds the Owner'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 You consult with your tax adviser in advance of a proposed
decrease in Face Amount or Withdrawal as to the portion, if any, which would be
subject to federal income tax.
A change of the Owner 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 an Owner, and that no part of any loan
under a Policy will constitute income to the Owner 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 any
income in the Policy and could be subject to an additional 10 percent tax. In
general, income in the policy is defined as the excess of the Account Value
(both loaned and unloaned) over previously unrecovered premiums paid. See the
discussion on modified endowment contracts below. Under the
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"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 dectible. 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 on 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 also could apply to a portion of the amount by
which Death Benefits received exceed the Policy's date-of-death Net Surrender
Value.
Federal estate and gift and state and local estate and other tax consequences of
ownership or receipt of Policy proceeds depend on the circumstances of each
Owner 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.
The ultimate effect of federal income taxes on values under this Policy and on
the economic benefit to the Owner or Beneficiary depends on MassMutual's tax
status and on 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, You should consult a qualified tax adviser.
No attempt is made herein to consider any applicable state or other tax laws.
CHARGES FOR FEDERAL TAXES. MassMutual currently does not make any charge
against the Separate Account for federal income taxes. We may make such a
charge eventually in order to provide for the future federal income tax
liability of the Separate Account.
Upon a full surrender of a Policy for its Net Surrender Value, the Owner 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.
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 that 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 than death benefits payable under other
life insurance contracts.
A Policy is a modified endowment contract if it satisfies the definition of life
insurance 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 guaranteed benefits upon the payment
of seven level annual premiums. Also, a Policy that would otherwise satisfy the
7-pay test will 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 originally had 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 classification 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 re-tested to determine whether it continues
to meet the 7-pay test. A material change starts a new 7-pay test period. The
term "material change" includes many increases in death benefits. A material
change does not include an increase in death benefit attributable to the payment
of premiums necessary to fund the lowest level of death benefit 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.
If any amount is taxable as a distribution of income under a modified endowment
contract, it also will be subject to a 10% penalty tax. Limited exceptions from
the additional penalty tax are available for individual Owners. The
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penalty tax will not apply to distributions: (i) made on or after the date the
taxpayer attains age 59 1/2; or (ii) attributable to the taxpayer becoming
disabled; or (iii) part of a series of substantially equal periodic payments
(made at least annually) made for the life or life expectancy of the taxpayer.
For complete information about 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 Owner 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 a competent tax adviser has been consulted. 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 that 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 Owners 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,
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 Owner from being considered the
owner of the assets of the Separate Account.
MassMutual intends to comply with the Final Regulations to assure 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 Owner is entitled to give
MassMutual 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 of 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 is determined by
dividing the Policy's Account Value held in each Division of the Separate
Account, if any, by $100. Fractional votes are counted.
Owners receive proxy material and a form on which Owner instructions may be
given. Shares of the Funds held by the Separate Account for which no effective
Owner instructions have been received are voted for or against any proposition
in the same proportion as the shares for which instructions have been received.
14
<PAGE>
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
the Securities and Exchange Commission). If necessary, we will seek approval by
Owners.
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
. Deregister the Separate Account under the Investment Company Act of 1940 in
the event such registration is no longer required;
. Substitute one or more Funds for other funds with similar investment
objectives;
. Delete Funds.
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 also may withdraw this right.
ADDITIONAL BENEFITS YOU CAN GET BY RIDER
At the Owner's request, the Policy can include additional benefits 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.
SUBSTITUTE OF INSURED RIDER. This rider allows the Owner to substitute a new
insured in place of the current Insured under the Policy. A substitute of
Insured is allowed if the Policy is in force, the Owner has an insurable
interest in the life of the substitute insured, the substitute insured is age 80
or younger on the date of substitution, and the age of the substitute insured on
the Policy Date is within the issue age range allowed for this Policy on the
Policy Date.
An application and evidence of insurability satisfactory to us is required for
the substitute insured.
All monthly charges after the substitution of insured will be based on the life
and risk class of the substitute insured.
The rider terminates on the current Insured's Attained Age 75, at the time of
the exercise of the rider, if this Policy is changed to a different policy under
which this rider is not available, or this Policy terminates.
This rider is attached automatically at issue. There is no charge for the
rider.
OTHER INSURED RIDER. This rider provides level term insurance on the life of one
or more other insureds. The rider is convertible for a limited amount of time.
While the other insured is living and prior to the other insured's attained age
70, the rider may be fully or partially converted to a flexible premium
adjustable variable life policy offered at the time of conversion. The cost for
the new policy will be based on the other insured's attained age at the time of
conversion. No evidence of insurability is required to convert the rider
coverage.
There is a monthly charge for this rider. It is a rate per $1,000 of face
amount under the rider for each other insured.
GUARANTEED INSURABILITY RIDER. This rider provides the right to increase the
face amount of this Policy without evidence of insurability on certain option
dates as defined in the rider.
The rider terminates after the last option date as defined in the rider, if the
face amount of this Policy is decreased for any reason, if this Policy is
changed to another policy under which this rider is not available, or if the
Policy terminates.
There is a monthly charge for this rider. It is a rate per $1,000 of rider
option amount.
DISABILITY BENEFIT RIDER. This rider provides a disability benefit if the
Insured becomes totally disabled as defined in the rider. The rider provides
the following benefits if the Insured becomes disabled.
. We will credit an amount to the Account Value equal to the specified monthly
amount shown on the policy specification page for this rider. This amount
will be treated as a Net Premium.
. We will waive the monthly charges due for this Policy.
The benefits will be provided after the Insured has been totally disabled for
four months and all conditions of the rider have been met.
15
<PAGE>
The benefits under the rider end once the Insured is no longer totally disabled,
satisfactory proof of continued disability is not provided to us as required, or
the day before the Insured's Attained Age 65, unless total disability began
before the Insured's Attained Age 60 in which case the waiver of monthly charges
will continue while the Insured remains disabled.
There is a monthly charge for this rider based on both the specified amount
waived and the waiver of monthly charges. The charge varies by the Attained Age
of the Insured and the benefit provided.
WAIVER OF MONTHLY CHARGES RIDER. Under this rider, We will waive the monthly
charges due for the Policy if the Insured becomes totally disabled as defined in
the rider.
The benefit will be provided once the Insured has been totally disabled for four
months and all the provisions of the rider have been met. The benefits will end
when the Insured is no longer totally disabled, satisfactory proof of continued
total disability is not given to us as required, or the day before the Insured's
Attained Age 65 if the disability began when the Insured was Attained Age 60 or
older.
There is a monthly charge for this rider. It is a rate based on the Insured's
Attained Age and multiplied by the sum of the Policy monthly charges for the
month, excluding the rider charge for this rider.
PAYMENT OPTIONS
The Policy proceeds (the Death Benefit or the Net Surrender Value) 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.
16
<PAGE>
<TABLE>
<S> <C>
Installments for a Specified Period 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
income rates We are using when the
first payment is due.
- -------------------------------------------------------------------------------
Life Income Equal monthly payments will be based
on the life of a named person.
Payments will continue for the
lifetime of that person. Income with
or without a minimum payment period
may be elected.
- -------------------------------------------------------------------------------
Interest We will hold any amount applied under
this option. Interest on the amount
will be paid at an effective annual
rate determined by us. This rate
will not be less than 3%.
- -------------------------------------------------------------------------------
Installments of Specified Amount Each payment will be made for an
agreed fixed amount. The total
amount paid during the first year
must be at least 6% of the total
amount applied. Interest will be
credited each month on the unpaid
balance and added to it. This
interest will be an effective annual
rate determined by us, but not less
than 3%. Payments continue until the
balance we hold is reduced to an
amount less than the agreed fixed
amount. The last payment will be for
the balance only.
- -------------------------------------------------------------------------------
Life Income with Payments Guaranteed Equal monthly payments will be based
for Amount Applied on the life of a named person.
Payments will be made until the total
amount paid equals the amount
applied, and as long thereafter as
the named person lives.
- -------------------------------------------------------------------------------
Joint Lifetime Income with Reduced Monthly payments will be based on the
Payments to Survivor lives of two named persons. Payments
at the initial level will continue
while both are living, or for 10
years if longer. When one dies (but
not before the 10 years has elapsed),
payments are reduced by one-third and
will continue at that level for the
lifetime of the other. After the 10
years has elapsed, payments stop when
both named persons have died.
- -------------------------------------------------------------------------------
</TABLE>
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. No part of
the payments under the Fixed Time Payment Option or payments that are based on a
named person's life may be withdrawn.
BENEFICIARY
A Beneficiary is any person named on our records to receive insurance proceeds
at the Insured's death. The Beneficiary is named 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 rights to change the frequency of Planned Premiums and Reinstate the
Policy after termination.
The Owner may change the Beneficiary during the Insured's lifetime by writing to
our Administrative Office. Generally, the change will take effect as of the
date of the request. If no Beneficiary is living at the time of the Insured's
death, unless provided otherwise, the Death Benefit is paid to the Owner or, if
deceased, to the Owner'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 Administrative Office. We are not responsible for the
validity of any assignment.
LIMITS ON OUR RIGHT TO CHALLENGE THE POLICY
Except for any policy change or reinstatement requiring evidence of
insurability, we cannot contest the validity of the policy with respect to any
material misrepresentation in the application regarding the insurability of the
Insured once the
17
<PAGE>
policy has been in force for two years after the its Issue Date.
For any policy change or reinstatement requiring evidence of insurability, We
cannot contest the validity of the change or reinstatement with respect to the
Insured after the change has been in effect for two years.
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 based on 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 Reinstatement Date, the Policy will terminate. We will refund the
amount of all 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 Face Amount, the increase will terminate
and We will refund the Monthly Charges for that increase. However, if a refund
was payable as the result of suicide during the first two years following the
Issue Date or the Reinstatement Date of the Policy, there is no additional
refund for any Face Amount increase.
SALES AND OTHER AGREEMENTS
MML Distributors, LLC ("MML Distributors"), 1414 Main Street, Springfield, MA
011441013, is the principal underwriter of the Policy pursuant to an
Underwriting and Servicing Agreement to which MML Distributors, MassMutual and
the Separate Account are parties. MML Investors Services, Inc. ("MMLISI"), also
located at 1414 Main Street, Springfield, MA 011441013, serves as the
counderwriter of the Policy. Both MML Distributors and MMLISI are registered
with the Securities and Exchange Commission (the "SEC") as brokerdealers 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 brokerdealers that
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 also are registered representatives
of selling brokers or of MMLISI. The Policy is offered in all states where
MassMutual is authorized to sell variable life insurance.
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 the 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 paid.
Pursuant to the Underwriting and Servicing Agreement, both MML Distributors and
MMLISI will receive compensation for their activities as underwriters of the
Policy.
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.
COMPENSATION
Writing agents will receive commissions based on a commission schedule and
rules. Some commissions are paid as a percentage of the premium paid in each
Policy Year. These commissions distinguish between premiums up to the Target
Premium and premiums paid in excess of the Target Premium. The Target Premium
is based on the issue age, sex, and risk classification of the Insured.
Commissions also are paid as a percentage of the average monthly Account Value
in each Policy Year. The maximum commission percentages are as follow.
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<PAGE>
Premium-based Commissions
<TABLE>
<S> <C>
COVERAGE YEAR 1 50% of premium paid up to the
Target Premium
3% of premium paid over the Target
COVERAGE YEARS 2-5 5% of premium paid up to the
Target Premium
3% of premium paid over the Target
Premium
COVERAGE YEARS 6-10 3% of all premium paid
COVERAGE YEARS 11 AND 1% of all premium paid
BEYOND
<CAPTION>
Asset-based Commissions
<S> <C>
POLICY YEARS 2 AND
BEYOND 0.15% of the average monthly
Account Value in each Policy
Year
- -------------------------------------------------------------
</TABLE>
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 and C.M. Life (subject to a $350,000
deductible) and $50,000,000 for MassMutual's general agents and agents (also
subject to a $350,000 deductible).
LEGAL PROCEEDINGS
We are not currently involved in any legal proceedings that would have a
material impact on the Policy.
EXPERTS
The audited financial statements of MassMutual included in this Prospectus have
been included herein in reliance on the reports of Coopers & Lybrand L.L.P.,
Springfield, Massachusetts 01101, 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.
III. ADDITIONAL INFORMATION
MASSMUTUAL
MassMutual is a mutual life insurance company chartered in 1851 under the laws
of Massachusetts. Its Home Office is located in Springfield, Massachusetts.
MassMutual is licensed to transact life, accident, and health business in all
fifty states of the United States, the District of Columbia, Puerto Rico, and
certain provinces of Canada. As of December 31, 1997, MassMutual had total
contingency reserves in excess of $2.6 billion and consolidated assets of $55.8
billion.
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 Segment and
the Separate Account are not separate entities from MassMutual and its
operations form a part of MassMutual.
Investment income and realized capital gains on the assets of the Segment are
reinvested and taken into account in determining Account Value. The investment
income and realized capital gains are applied automatically to increase book
reserves associated with the Policy. Under existing federal income tax law, the
Segment's investment income, including net capital gains, is not taxed to
MassMutual to the extent it is 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 any 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 Segment 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.
19
<PAGE>
Due to MassMutual's current tax status, no charge is made to the Segment for
MassMutual's federal income taxes that may be attributable to the Segment.
Periodically, MassMutual reviews the question of a charge to the Segment for
MassMutual's federal income taxes. A charge may be made for any federal income
taxes incurred by MassMutual and attributable to the Segment. 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 taxes, if any,
attributable to the Separate Account.
RECORDS AND REPORTS
All records and accounts relating to the Separate Account and the GPA are
maintained by MassMutual. Each year within the 30 days following 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, Net Surrender Value and Policy Debt as of the last
Policy Anniversary. This report contains any additional information required by
any applicable law or regulation.
THE SEPARATE ACCOUNT
The Separate Account was established on February 2, 1995, as a separate
investment account of MassMutual by MassMutual's Board of Directors in
accordance with the laws of the State of Massachusetts. 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, and
meets the definition of a "separate account" in that statute. Registration does
not involve supervision of the management or investment practices of either the
Separate Account or of MassMutual. A separate segment for the Policies (the
"Segment") was established on xx/xx/xx and has been divided into 13 Divisions.
Each Division invests in a corresponding series of shares of a designated Fund
of either MML Trust, Oppenheimer Trust, Variable Insurance Products Fund II
(managed by Fidelity Management & Research Company), T. Rowe Price Equity
Series, Inc., or American Century Variable Portfolios, Inc. MassMutual may
establish additional divisions within the Separate Account in the future, which
may invest in other investment funds, including those of MML Trust, Oppenheimer
Trust, (Fidelity) Variable Insurance Products Fund II, T. Rowe Price Equity
Series, Inc., or American Century Variable Portfolios, Inc., or in any other
investment fund MassMutual deems to be appropriate.
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 income, gains, or losses, realized
or unrealized, of the Separate Account are credited to or charged against the
assets held in the Separate Account 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 that 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.
MML TRUST AND OPPENHEIMER TRUST
The MML Trust is a noload, openend, management investment company registered
under the Investment Company Act of 1940. The Oppenheimer Trust is an openend,
diversified, management investment company registered under the Investment
Company Act of 1940.
Both the MML Trust and the Oppenheimer Trust 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 and
Oppenheimer Trust's Funds. Because these separate accounts are invested in the
same underlying Funds, it is possible material irreconcilable conflicts could
arise between Policy Owners 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
20
<PAGE>
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 each Trust will follow monitoring procedures that have been
developed to determine whether material conflicts have arisen. If it is
determined a conflict exists, the Trustees will notify MassMutual and
Oppenheimer Funds and appropriate action will be taken to eliminate such
irreconcilable conflicts.
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 that 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 values to the extent necessary to make payments under the Policies.
VARIABLE INSURANCE PRODUCTS FUND II
Variable Insurance Products Fund II ("Fidelity VIP II"), managed by Fidelity
Management & Research Company (FMR), is an open-end, diversified management
investment company organized as a Massachusetts business trust on March 21, 1988
and is registered with the SEC under the 1940 Act. One of its investment
portfolios, the VIP II Contrafund Portfolio, is available under this Policy.
T. ROWE PRICE EQUITY SERIES, INC.
The T. Rowe Price Equity Series, Inc. (the "Corporation") was incorporated in
Maryland in 1994, and is a diversified, open-end investment company, or mutual
fund. Currently, the corporation consists of four series, each representing a
separate class of shares having different objectives and investment policies.
One of the series, the Mid-Cap Growth Portfolio, is available under this Policy.
AMERICAN CENTURY VARIABLE PORTFOLIOS, INC.
American Century Variable Portfolios, Inc. is part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. Variable Portfolios offers its
shares only to insurance companies to fund the benefits of variable annuity or
variable life insurance contracts. One of the funds, VP Income and Growth, is
offered under this Policy.
Following is a chart illustrating the risk profiles of the investment options
available, and a summary of the investment objectives of each fund. Please note
there can be no assurance any fund will achieve its objectives. More detailed
information concerning these investment objectives is contained in the
accompanying prospectuses, including information on the risks associated with
the investments, the investment techniques of each of the funds, and the
deduction of expenses applicable to each of the funds.
INVESTMENT PREFERENCE CHART
Oppenheimer Global Securities Fund
VIP II Contrafund Portfolio
Oppenheimer Aggressive Growth Fund
MML Small Cap Value Equity Fund
T. Rowe Price Mid-Cap Growth Portfolio
Oppenheimer Growth Fund
American Century VP Income & Growth
MML Equity Fund
MML Equity Index Fund
MML Blend Fund
Oppenheimer Strategic Bond Fund
MML Managed Bond Fund
MML Money Market Fund
Guaranteed Principal Account
CONSERVATIVE LESS CONSERVATIVE MODERATE AGGRESSIVE MORE AGGRESSIVE
CONSERVATIVE: Investment goal is preservation of principal, while incurring
little or no risk.
LESS CONSERVATIVE: Investment goal is primarily preservation of principal, with
some desire for growth.
MODERATE: Investment goal is growth, while seeking some preservation of
principal.
AGGRESSIVE: Investment goal is growth, with more tolerance for risk.
MORE AGGRESSIVE: Investment goal is significant growth over the long-term, with
short-term fluctuations in value expected.
21
<PAGE>
MML MONEY MARKET FUND
MML Money Market Fund seeks to achieve high current income, while preserving
capital, and liquidity. This Fund invests in shortterm 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 maturities MassMutual deems appropriate from time to
time in light of market conditions and prospects.
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 invests principally
in: (i) foreign government and corporate debt securities; (ii) U.S. Government
securities; and (iii) lowerrated, high risk high yield debt securities. This
Fund's investments may be considered speculative.
For information concerning the risks associated with this Fund's investments,
please refer to the accompanying prospectus for the Oppenheimer Trust.
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.
MML EQUITY INDEX FUND
MML Equity Index Fund seeks to provide investment results that correspond to the
price and yield performance of the publicly traded common stocks in the
aggregate, as represented by the Standard & Poor's 500 Composite Stock Price
Index. ("Standard & Poor's 500" and "S&P 500" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use. The Fund is not sponsored,
endorsed, sold or promoted by Standard & Poor's or the McGraw-Hill Companies,
Inc.)
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 investing for defensive purposes is appropriate. The assets
of this Fund are expected to be invested primarily in common stocks and other
equity type securities.
AMERICAN CENTURY VP INCOME & GROWTH
The investment objective of VP Income & Growth is dividend growth, current
income and capital appreciation. The Fund will seek to achieve its investment
objective by investing in common stocks.
OPPENHEIMER GROWTH FUND
Oppenheimer Growth Fund seeks to achieve capital appreciation by investing in
securities of wellknown established companies. Such securities generally have a
history of earnings and dividends, and are issued by seasoned companies, namely
those having an operating history of at least five years, including
predecessors. The type of securities in which this Fund invests will be
primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock and
convertible bonds.
T. ROWE PRICE MID-CAP GROWTH PORTFOLIO
The Mid-Cap Growth Portfolio seeks to provide long-term capital appreciation by
investing primarily in common stocks of medium-sized (mid-cap) growth companies.
The Fund focuses on companies with superior earnings growth potential of medium-
sized (mid-cap) growth companies. The Fund focuses on companies with superior
earnings growth potential that are no longer considered new or emerging, but may
still be in the dynamic phase of their life cycles.
MML SMALL CAP VALUE EQUITY FUND
This Fund seeks to earn a high rate of return over an extended period. The Fund
invests primarily in stocks of smaller capitalization companies with some unique
product, market position, or operating characteristic which, in the portfolio
manager's opinion distinguishes them and will result in above-average returns.
OPPENHEIMER AGGRESSIVE GROWTH FUND
Oppenheimer Capital Appreciation Fund seeks capital appreciation. The type of
securities in which this Fund invests will be primarily common stocks, as well
as securities having the investment characteristics of common stocks, such as
convertible preferred stock and convertible bonds. In seeking this objective
the Fund will emphasize investment in securities of "growthtype" companies. Such
companies are believed to have relatively favorable longterm prospects for an
increased demand for the particular company's products or services.
22
<PAGE>
VIP II CONTRAFUND PORTFOLIO
This Fund seeks capital appreciation by investing in the securities of companies
whose value FMR believes is not fully recognized by the public. This Fund may
be appropriate for policyowners who are willing to ride out stock market
fluctuations in pursuit of potentially high long-term returns. The Fund is
designed for those who are looking for an investment approach that follows a
contrarian philosophy.
OPPENHEIMER GLOBAL SECURITIES FUND
Oppenheimer Global Securities Fund seeks longterm capital appreciation through
investing a substantial portion of its invested assets in securities of foreign
issuers, growthtype companies and special investment opportunities, such as
anticipated acquisitions, mergers or other unusual developments, which are
considered by OFI, in its capacity as investment manager of the Funds, to have
appreciation possibilities. The type of securities in which this Fund invests
will be primarily common stocks, as well as securities having the investment
characteristics of common stocks, such as convertible preferred stock,
convertible bonds and American Depository Receipts. Current income is not an
investment objective of the Oppenheimer Global Securities Fund.
THE INVESTMENT ADVISERS
MassMutual serves as investment manager of each of the MML Funds pursuant to
investment management agreements. Concert Capital Management, Inc. ("Concert")
served as the investment subadviser 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. Effective January 1, 1997, Babson became
the investment subadviser 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.
MassMutual entered into a sub-advisory agreement with Mellon Equity whereby
Mellon Equity manages the investment and reinvestment of the assets of the MML
Equity Index Fund.
OppenheimerFunds, Inc. ("OFI") is an investment adviser organized under the laws
of Colorado as a corporation; it was originally organized in 1959. It (including
a subsidiary) currently has assets aggregating over $62 billion as of December
31, 1997, with over three 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. OFI serves as Investment
Adviser to the Oppenheimer Funds.
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 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.
Fidelity Management & Research Company (FMR) is the investment adviser to the
VIP II Contrafund Portfolio. FMR is the management arm of Fidelity
Investments(R) which was established in 1946. Fidelity Investments(R) has its
principal business address at 82 Devonshire Street, Boston, Massachusetts. FMR
handles the VIP II Contrafund business affairs and, with the assistance of
affiliates, chooses the Fund's investments. Fidelity Management & Research
(U.K.) Inc, in London, England, and Fidelity Management & Research (Far East)
Inc, serve as sub-advisers for the VIP II Contrafund Portfolio.
T. Rowe Price Associates, Inc (T. Rowe Price) is the investment adviser to the
T. Rowe Price Mid-Cap Growth Portfolio. T. Rowe Price was founded in 1937. The
T. Rowe Price Equity Series, Inc. (the Corporation) was incorporated in Maryland
in 1994, and is a diversified, open-end investment company. The Corporation is
governed by a Board of Directors that meets regularly to review the Fund's
investments, performance, expenses, and other business affairs. The policy of
the Corporation is that a majority of Board members will be independent of T.
Rowe Price.
American Century Investment Management, Inc. is the investment adviser to the
American Century VP Income & Growth Fund. Under the laws of the state of
Maryland, the Board of Directors is responsible for managing the business and
affairs of the Fund. Acting pursuant to an investment management agreement
entered into with the Fund, American Century Investment Management, Inc. serves
as the manager of the Fund. Its principal place of business is American Century
Tower, 4500 Main Street, Kansas City, Missouri. The manager has been providing
investment advisory services to investment companies and institutional investors
since it was founded in 1958.
23
<PAGE>
APPENDIX A
DEFINITION OF TERMS
Account Value: The sum of the Variable Account Value and the Fixed Account Value
- -------------
of the Policy.
ADMINISTRATIVE OFFICE: MassMutual's Administrative Office is located at 1295
State Street, Springfield, Massachusetts 01111-0001.
ATTAINED AGE: The Issue Age of the Insured plus the number of completed Policy
Years.
BENEFICIARY(IES): The person or persons specified by the Owner to receive some
or all of the Death Benefit at the Insured's death.
DEATH BENEFIT: The amount paid following receipt of due proof of death of the
Insured. The amount is equal to the benefit provided by the Death Benefit
Option in effect on the date of death less any Policy Debt outstanding and any
unpaid premium.
DEATH BENEFIT OPTION: The Policy offers three Death Benefit Options for
determination of the amount of the Death Benefit. The Death Benefit Option is
elected at the time of application and, subject to certain requirements, may be
changed at a later date.
EXPENSE PREMIUM: The level of premium payment used to determine the Premium
Expense Charges. The Expense Premium is based on the Issue Age, sex, and risk
classification of the Insured in effect at the time of any premium payment.
FIXED ACCOUNT VALUE: The current Account Value that is allocated to the
Guaranteed Principal Account.
FREE LOOK PERIOD: The Period during which an Owner may return the Policy for
cancellation and refund.
GUARANTEED PRINCIPAL ACCOUNT ("GPA"): Part of our General Account, the GPA is a
fixed account to and from which the Owner may make allocations and transfers.
INITIAL FACE AMOUNT: The amount of insurance coverage issued under the Policy.
Subject to certain limitations, the Owner may change the Face Amount after
issue.
INITIAL NET PREMIUM: The premium received before or at delivery of the Policy,
reduced by the Premium Expense Charge.
INSURED: The person whose life this Policy insures.
ISSUE AGE: The age of the Insured at his or her birthday nearest the Policy
Date.
ISSUE DATE: The date on which the suicide and contestability periods begin.
MINIMUM DEATH BENEFIT: The Death Benefit determined in accordance with the
applicable Death Benefit Compliance Test. The applicable Test is either the
Cash Value Test or the Guideline Premium Test, as chosen at the time of
application.
MONTHLY CHARGE DATE: The monthly date on which the Monthly Charges for the
Policy are deducted from the Account Value. The first Monthly Charge Date is
the Policy Date, and subsequent Monthly Charge Dates are on the same day of each
succeeding calendar month.
MONTHLY CHARGES: The charges assessed against the Policy Account Value on each
Monthly Charge Date.
NET PREMIUM: The premium payment less the Premium Expense Charge we deduct.
NET SURRENDER VALUE: The amount payable to an Owner upon surrender of the
Policy. It is equal to the Account Value less any surrender charges that apply
and less any Policy Debt.
OWNER: The person or entity that owns the Policy.
POLICY: The flexible premium adjustable variable life insurance policy offered
by MassMutual and described in this Prospectus.
POLICY ANNIVERSARY DATE: An anniversary of the Policy Date.
POLICY DATE: The date shown on the Policy that is the starting point for
determining Policy Anniversary Dates, Policy Years, and Monthly Charge Dates.
POLICY DEBT: All outstanding Policy loans plus accrued loan interest.
POLICY VALUE: The Account Value less any outstanding Policy Debt during the
first three Policy Years. It is equal to the Net Surrender Value in years four
and later.
POLICY YEAR: A twelve-month period commencing with the Policy Date or a Policy
Anniversary Date.
SAFETY TEST: On any day during the Guarantee Period as shown on the Policy
Specifications page of Your Policy, the Safety Test is met if the result of
premiums paid less amounts withdrawn, accumulated with interest to that day,
equals or exceeds the Guarantee Period premium requirement as shown on the
Policy Specification page of Your Policy accumulated with interest to that date.
SEPARATE ACCOUNT: The Policies' designated segment of the "MassMutual Variable
Life Separate Account I" established by MassMutual under the laws of
Massachusetts and registered as a unit investment trust with the Securities
24
<PAGE>
and Exchange Commission pursuant to the Investment Company Act of 1940, as
amended ("1940 Act"). The Separate Account is used to receive and invest Net
Premiums for this Policy.
SUBSEQUENT NET PREMIUM: Any premium received after the Policy is delivered,
reduced by the Premium Expense Charge.
TARGET PREMIUM: The level of premium payments used to determine commission
payments and surrender charges. The Target Premium is based on the Issue Age,
sex, and risk classification of the Insured.
VALUATION DATE: A date on which the net asset value of the shares of each
Division of the Separate Account is determined. Generally, this will be any
date on which the New York Stock Exchange (or its successor) is open for
trading.
VALUATION PERIOD: The period, consisting of one or more days, from one Valuation
Date to the next succeeding Valuation Date.
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 that are to be
performed on a Valuation Date will be performed as of the Valuation Time.
VARIABLE ACCOUNT VALUE: The total of the values of the Accumulation Units
credited to the Policy in each Division of the Separate Account multiplied by
the Owner's number of units in that Division.
WE: Refers to MassMutual.
YEAR OF COVERAGE: For the Initial Face Amount, each Policy Year is a Year of
Coverage. For any increase in the Face Amount, each Year of Coverage is
measured from the effective date of the increase.
YOU: Refers to the Owner.
25
<PAGE>
APPENDIX B
EXAMPLES OF DEATH BENEFIT OPTION CHANGES
Example I - Change from Option 2 to Option 1
For a change from Option 2 to Option 1, the Face Amount is increased by the
amount of the Account Value on the effective date of the change. For example,
if the Policy has a Face Amount of $500,000 and an Account Value of $25,000, the
Death Benefit under Option 2 is equal to the Face Amount plus the Account Value,
or $525,000 If the Owner changes from Option 2 to Option 1, the Death Benefit
under Option 1 is equal to the Policy Face Amount. Since the Death Benefit
under a Policy does not change as the result of a Death Benefit Option change,
the Face Amount will be increased from $500,000 under Option 2 to $525,000 under
Option 1.
EXAMPLE II - CHANGE FROM OPTION 3 TO OPTION 1
For a change from Option 3 to Option 1, the Face Amount is increased by the
amount of the premiums paid to the effective date of the change. For example,
if a Policy has a Face Amount of $500,000, and premium payments of $12,000 have
been made to-date, the Policy Death Benefit under Option 3 is equal to the Face
Amount plus the premiums paid, or $512,000. If the Owner changes from Option 3
to Option 1, the Death Benefit under Option 1 is equal to the Policy Face
Amount. Since the Death Benefit under a Policy does not change as the result of
a Death Benefit Option change, the Face Amount will be increased from $500,000
under Option 3 to $512,000 under Option 1.
EXAMPLE III- CHANGE FROM OPTION 1 TO OPTION 2
For a change from Option 1 to Option 2, the Face Amount will be decreased by the
amount of the Account Value on the effective date of the change. For example,
if the Policy has a Face Amount of $700,000 and an Account Value of $25,000,
under Option 1 the Death Benefit is equal to the Face Amount, or $700,000. If
the Owner changes from Option 1 to Option 2, the Death Benefit under Option 2 is
equal to the Face Amount plus the Account Value. Since the Death Benefit does
not change as the result of a Death Benefit Option change, the Face Amount will
be decreased by $25,000 to $675,000, and the Death Benefit under Option 2 after
the change will remain $700,000.
EXAMPLE IV - CHANGE FROM OPTION 1 TO OPTION 3
For a change from Option 1 to Option 3, the Face Amount will be decreased by the
amount of the premiums paid to the effective date of the change. For example,
if the Policy has a Face Amount of $700,000 and premiums paid to-date are
$30,000, the Death Benefit under Option 1 is equal to the Face Amount, or
$700,000. If the Owner changes from Option 1 to Option 3, the Death Benefit
under Option 3 is equal to the Face Amount plus the premiums paid to-date.
Since the Death Benefit under a Policy does not change as the result of a Death
Benefit Option change, the Face Amount will be decreased from $700,000 under
Option 1 to $670,000 under Option 3.
EXAMPLE V - CHANGE FROM OPTION 2 TO OPTION 3, OR FROM OPTION 3 TO OPTION 2
For a change from Option 2 to Option 3 or from Option 3 to Option 2, the Face
Amount is changed (increased or decreased) by the difference between the Account
Value and the premiums paid less any premium refunds. For example, if the
Policy has a Face Amount of $1,000,000, and an Account Value of $70,000, and
premiums paid of $25,000, the Death Benefit under Option 2 is equal to the
Account Value plus the Face Amount, or $1,070,000. If the Owner changes from
Option 2 to Option 3, the Death Benefit under Option 3 is equal to the Face
Amount plus the premiums paid less any premium refunds. Since the Death Benefit
under a Policy does not immediately change as the result of a Death Benefit
Option change, the Face Amount will be increased by the difference between the
Account Value and the premiums paid, or $45,000, to $1,045,000 under Option 3,
maintaining a Death Benefit of $1,070,000.
A similar type of change would be made for a change from Option 3 to Option 2.
26
<PAGE>
APPENDIX C
Rates of Return
From time to time, the Company may report different types of historical
performance for the Divisions of the Separate Account available under the
Policy. The Company may report the average annual total returns of the funds
over various time periods. Such returns will reflect an annual reduction for
investment management fees and fund expenses, but not deductions at the Separate
Account or Policy level for Mortality and Expense Risk Charges and Policy
expenses, which, if included, would reduce performance.
The Company will accompany the returns of the funds with at least one of the
following: (i) returns, for the same periods as shown for the funds, which
include deductions under the Separate Account for the Mortality and Expense Risk
Charge in addition to deductions of investment management fees and fund
expenses, but not other charges under the Policy; or (ii) an illustration of
Account Values and Net Surrender Values as of the performance reporting date for
hypothetical Insureds of given ages, sexes, risk classifications, premium levels
and Initial Face Amounts. Each illustration will assume 100% of each Net Premium
was allocated to the Division of the Separate Account illustrated. The Net
Surrender Value figures will assume all fund charges, the Mortality and Expense
Risk Charge, and all other Policy charges are deducted. The Account Value
figures will assume all charges except the Surrender Charge are deducted.
We also may distribute sales literature comparing the percentage change in the
net asset values of the funds or in the Accumulation Unit Values for any of the
Divisions of the Separate Account to established market indices, such as the
Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average. We also
may make comparisons to the percentage change in values of other mutual funds
with investment objectives similar to those of the Divisions of the Separate
Account being compared.
Tables 1 and 2 show the Effective Annual Rates of Return and One Year Total
Returns, respectively, of the funds based on the actual investment performance
(after deduction of investment management fees and direct operating expenses)
underlying each Division of the Separate Account. Table 1 shows figures for
periods ended December 31, 1997, while Table 2 shows December 31 annualized
figures. These rates do not reflect the Mortality and Expense Risk Charges
assessed against the Separate Account. Tables 1 and 2 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 the investment advisers.
27
<PAGE>
TABLE 1
EFFECTIVE ANNUAL RATES OF RETURN
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Fund Since 15 Years 10 Years 5 Years 1 Year
Inception
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MML Equity 14.78% 16.19% 16.44% 18.25% 28.59
MML Blend 13.67% --- 13.68% 13.81% 20.89%
MML Managed Bond 10.37% 9.73% 9.08% 7.79% 9.91%
MML Money Market 6.73% 6.44% 5.63% 4.47% 5.18%
MML Small Cap Value Equity --- 17.15% 16.99% 36.36%
MML Equity Index --- --- ---
Oppenheimer Global Securities 12.26% --- --- 18.81% 22.42
Oppenheimer Aggressive Growth 15.31% --- 16.23% 15.92% 11.67%
Oppenheimer Growth 15.43% --- 16.67% 18.61% 26.68%
Oppenheimer Strategic Bond 7.64% --- --- --- 8.71%
VIP II Contrafund Portfolio 28.11% --- --- --- 24.41%
Mid-Cap Growth Portfolio
VP Income & Growth 7.8% --- --- 21.8% 7.8%*
</TABLE>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
*since inception.
<TABLE>
<S> <C>
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity Fund-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund 4/30/97
Oppenheimer Global Securities Fund-11/12/90 Oppenheimer Aggressive Growth Fund 8/15/86
Oppenheimer Growth Fund 4/3/85 Oppenheimer Strategic Bond Fund 5/3/93
VIP II Contrafund Portfolio January 3, 1995 Mid-Cap Growth Portfolio XXX
VP Income & Growth 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced
operations12/17/90.
28
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
Year MML Equity MML MONEY MARKET MML BOND MML BLEND MML SMALL CAP OPPENHEIMER
Ended VALUE EQUITY GROWTH
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997 28.59% 5.18% 9.91% 20.89% 36.36% 26.68%
1996 20.25% 5.01% 3.25% 13.95% 22.82% 25.20%
1995 31.13% 5.58% 19.14% 23.28% 20.01% 36.65%
1994 4.10% 3.84% (3.76%) 2.48% (4.43%) 0.98%
1993 9.52% 2.75% 11.81% 9.70% 14.08% 7.25%
1992 10.48% 3.48% 7.31% 9.36% 17.10% 14.53%
1991 25.56% 6.01% 16.66% 24.00% 29.34% 25.54%
1990 (0.51%) 8.12% 8.38% 2.37% (5.42%) (8.21%)
1989 23.04% 9.16% 12.83% 19.96% 18.33% 23.59%
1988 16.68% 7.39% 7.13% 13.40% 31.06% 22.09%
1987 2.10% 6.49% 2.60% 3.12% 5.78% 3.32%
1986 20.15% 6.60% 14.46% 18.30% 11.69% 17.76%
1985 30.54% 8.03% 19.94% 24.88% 18.33% 9.50%*
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%)* --- --- --- ---
</TABLE>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
*since inception.
<TABLE>
<S> <C>
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity Fund-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund 4/30/97
Oppenheimer Global Securities Fund-11/12/90 Oppenheimer Aggressive Growth Fund 8/15/86
Oppenheimer Growth Fund 4/3/85 Oppenheimer Strategic Bond Fund 5/3/93
VIP II Contrafund Portfolio January 3, 1995 Mid-Cap Growth Portfolio XXX
VP Income & Growth 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced operations
12/17/90.
29
<PAGE>
TABLE 2
ONE YEAR TOTAL RETURNS
<TABLE>
<CAPTION>
Year OPPENHEIMER OPPENHEIMER OPPENHEIMER VIP II MID CAP VP INCOME &
Ended STRATEGIC BOND AGGRESSIVE GLOBAL CONTRA-FUND GROWTH GROWTH
GROWTH SECURITIES PORTFOLIO PORTFOLIO
- -----------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
1997 8.71% 11.67% 22.42% 24.14%
1996 12.07% 20.16% 17.80% 21.22%
1995 15.33% 32.52% 2.24% 39.72%*
1994 (5.85%) (7.50%) (5.72%) ---
1993 4.25%* 27.32% 70.32% ---
1992 --- 15.42% (7.11%) ---
1991 --- 54.72% 3.39% ---
1990 --- (16.32%) 0.40% ---
1989 --- 27.39% --- ---
1988 --- 13.41% --- ---
1987 --- 14.34% --- ---
1986 --- (1.65%)* --- ---
1985 --- --- --- ---
1984 --- --- --- ---
1983 --- --- --- ---
1982 --- --- --- ---
1981 --- --- --- ---
1980 --- --- --- ---
1979 --- --- --- ---
1978 --- --- --- ---
1977 --- --- --- ---
1976 --- --- --- ---
1975 --- --- --- ---
1974 --- --- --- ---
</TABLE>
The figures show in this Table do not reflect any charges at the Separate
Account or the Policy level.
* since inception.
<TABLE>
<S> <C>
Dates of inception:
MML Equity Fund-9/15/71 MML Blend Fund-2/3/84
Managed Bond Fund- 12/16/81 MML Small Cap Value Equity Fund-6/X/98
MML Money Market Fund-11/12/90 MML Equity Index Fund 4/30/97
Oppenheimer Global Securities Fund-11/12/90 Oppenheimer Aggressive Growth Fund 8/15/86
Oppenheimer Growth Fund 4/3/85 Oppenheimer Strategic Bond Fund 5/3/93
VIP II Contrafund Portfolio January 3, 1995 Mid-Cap Growth Portfolio XXX
VP Income & Growth 10/30/97
</TABLE>
Performance for MML Small Cap Value Equity Fund for years prior to 1998 are
returns of a substantially identical fund which commenced operations x/x/xx.
Performance of VP Income & Growth for years prior to 1997 are the returns of AC
Income & Growth fund, a substantially identical fund which commenced
operations 12/17/90
30
<PAGE>
Appendix D
ILLUSTRATION OF DEATH BENEFITS, NET SURRENDER VALUES, AND ACCUMULATED PREMIUMS
The following tables illustrate the way in which a Policy operates. They show
how the Death Benefit and Net 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 payments of $5,000 for a Select-Preferred
Male age 35. Select-Preferred is MassMutual's best risk classification.
Separate tables are shown for the current and guaranteed schedules of charges.
These tables will assist in the comparison of Death Benefits and Net Surrender
Values for the Policy with those of other variable life policies.
The Death Benefits and Net 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 and below that average in individual Policy Years.
They also would differ if any Policy loan were made during the period of time
illustrated. They also would be different depending on the allocation of
investment value to each Division. They would be different depending on the
allocation of investment value to each Division if the rates of return for all
funds averaged 0%, 6%, and 12% but varied above or below that average for
particular funds.
The Death Benefits and Net Surrender Values shown in Tables 1,2,3,7,8, and 9
reflect the following current charges:
. Administrative Charges of $12 per month per Policy in Policy Years 1-10, and
$6 per month in Policy Years 11 and beyond.
. Face Amount Charges of $0.13 per month per $1,000 of Face Amount in Coverage
Years 1-10.
. Insurance Charges based on the current rates being charged by the Company for
Select-Preferred, fully underwritten risks.
. Mortality and Expense Risk Charges of 0.25% on an annual basis of the daily
net asset value of the Separate Account in all Policy Years.
. Fund level expenses of 0.66% on an annual basis of the net asset value of the
Separate Account. These expenses represent the unweighted average of all fund
expenses.
The Death Benefits and Net Surrender Values shown in Tables 4,5,6,10,11, and 12
reflect the following guaranteed maximum charges as well as the current fund
level expenses.
. Administrative Charges equal to $12 per month per policy in all years.
. Face Amount Charge of $0.13 per month per $1,000 of Face Amount in Coverage
Years 1-10.
. Insurance Charges based on the 1980 CSO Mortality Table.
. Mortality and Expense Risk Charges equal to 0.90% on an annual basis of the
daily net asset value of the Separate Account in all years.
Net Surrender Values shown in the Tables reflect the deduction of Surrender
Charges in the first 10 Policy Years. The Surrender Charge in the first year is
the Target Premium or $60 per $1,000 of Face Amount if less. In each of Years
two through 10, the Surrender Charge is equal to the Surrender Charge in the
prior year reduced by 10% of the Surrender Charge in the first year.
Taking the current Mortality and Expense Risk Charge and the fund level expenses
into account, the gross rates of 0%, 6%, and 12% are - 0.91%, 5.09%, and 11.09%
respectively on a net basis.
31
<PAGE>
TABLE 1
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 334 538 743
2 10,763 1,000,000 1,000,000 1,000,000 3,150 3,723 4,323
3 16,551 1,000,000 1,000,000 1,000,000 5,940 7,055 8,270
4 22,628 1,000,000 1,000,000 1,000,000 8,704 10,542 12,622
5 29,010 1,000,000 1,000,000 1,000,000 11,443 14,189 17,425
6 35,710 1,000,000 1,000,000 1,000,000 14,157 18,007 22,728
7 42,746 1,000,000 1,000,000 1,000,000 16,848 22,005 28,588
8 50,133 1,000,000 1,000,000 1,000,000 19,514 26,191 35,063
9 57,889 1,000,000 1,000,000 1,000,000 22,157 30,576 42,226
10 66,034 1,000,000 1,000,000 1,000,000 24,779 35,170 50,150
15 113,287 1,000,000 1,000,000 1,000,000 47,009 72,878 117,711
20 173,596 1,000,000 1,000,000 1,000,000 67,862 120,623 230,920
25 250,567 1,000,000 1,000,000 1,000,000 87,352 181,233 421,210
30 348,804 1,000,000 1,000,000 1,000,000 104,787 257,624 741,206
35 474,182 1,000,000 1,000,000 1,484,488 117,746 352,205 1,279,731
40 634,199 1,000,000 1,000,000 2,337,618 122,088 467,775 2,184,690
45 838,426 1,000,000 1,000,000 3,890,699 106,292 606,183 3,705,428
50 1,099,077 1,000,000 1,000,000 6,558,856 42,156 771,911 6,246,530
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,764 8,879 10,094
4 10,300 12,138 14,218
5 12,811 15,557 18,793
6 15,297 19,147 23,868
7 17,760 22,917 29,500
8 20,198 26,875 35,747
9 22,613 31,032 42,682
10 25,007 35,398 50,378
15 47,009 72,878 117,711
- -------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
TABLE 2
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,025,207 1,026,766 1,028,327 22,927 24,486 26,047
2 10,763 1,050,183 1,054,880 1,059,764 48,131 52,828 57,712
3 16,551 1,074,931 1,084,407 1,094,652 73,107 82,583 92,828
4 22,628 1,099,452 1,115,421 1,133,370 97,856 113,825 131,774
5 29,010 1,123,749 1,147,995 1,176,340 122,381 146,627 174,972
6 35,710 1,147,823 1,182,208 1,224,027 146,683 181,068 222,887
7 42,746 1,171,679 1,218,145 1,276,953 170,767 217,233 276,041
8 50,133 1,195,315 1,255,891 1,335,690 194,631 255,207 335,006
9 57,889 1,218,738 1,295,539 1,400,881 218,282 295,083 400,425
10 66,034 1,241,949 1,337,185 1,473,234 241,721 336,957 473,006
15 113,287 1,366,570 1,592,801 1,989,232 366,570 592,801 989,232
20 173,596 1,485,466 1,919,454 2,916,967 485,466 919,454 1,857,941
25 250,567 1,598,595 2,336,611 4,449,072 598,595 1,336,611 3,320,203
30 348,804 1,705,361 2,868,533 7,052,392 705,361 1,868,533 5,780,649
35 474,182 1,803,169 3,543,951 11,502,713 803,169 2,543,951 9,916,132
40 634,199 1,887,417 4,397,231 18,045,368 887,417 3,397,231 16,864,830
45 838,426 1,945,472 5,463,132 29,967,618 945,472 4,463,132 28,540,589
50 1,099,077 1,949,525 6,768,468 50,453,846 949,525 5,768,468 48,051,282
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 25,207 26,766 28,327
2 50,183 54,880 59,764
3 74,931 84,407 94,652
4 99,452 115,421 133,370
5 123,749 147,995 176,340
6 147,823 182,208 224,027
7 171,679 218,145 276,953
8 195,315 255,891 335,690
9 218,738 295,539 400,881
10 241,949 337,185 473,234
15 366,570 592,801 989,232
- -------------------------------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
TABLE 3
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Guideline Premium Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 334 538 743
2 10,763 1,010,000 1,010,000 1,010,000 3,150 3,723 4,323
3 16,551 1,015,000 1,015,000 1,015,000 5,939 7,055 8,269
4 22,628 1,020,000 1,020,000 1,020,000 8,704 10,541 12,622
5 29,010 1,025,000 1,025,000 1,025,000 11,443 14,189 17,424
6 35,710 1,030,000 1,030,000 1,030,000 14,156 18,006 22,727
7 42,746 1,035,000 1,035,000 1,035,000 16,846 22,004 28,586
8 50,133 1,040,000 1,040,000 1,040,000 19,511 26,188 35,061
9 57,889 1,045,000 1,045,000 1,045,000 22,155 30,572 42,222
10 66,034 1,050,000 1,050,000 1,050,000 24,776 35,166 50,145
15 113,287 1,075,000 1,075,000 1,075,000 46,996 72,862 117,691
20 173,596 1,100,000 1,100,000 1,100,000 67,820 120,568 230,847
25 250,567 1,125,000 1,125,000 1,125,000 87,217 181,057 420,967
30 348,804 1,150,000 1,150,000 1,150,000 104,354 257,054 740,405
35 474,182 1,175,000 1,175,000 1,675,412 116,263 350,261 1,277,941
40 634,199 1,200,000 1,200,000 2,534,397 117,630 461,822 2,181,680
45 838,426 1,225,000 1,225,000 4,110,386 93,436 588,687 3,700,368
50 1,099,077 1,250,000 1,250,000 6,799,947 6,016 721,521 6,238,045
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,897 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,296 19,146 23,867
7 17,758 22,916 29,498
8 20,195 26,872 35,745
9 22,611 31,028 42,678
10 25,004 35,394 50,373
15 46,996 72,862 117,691
- -------------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
TABLE 4
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 10,763 1,000,000 1,000,000 1,000,000 1,093 1,666 2,266
3 16,551 1,000,000 1,000,000 1,000,000 4,103 5,218 6,431
4 22,628 1,000,000 1,000,000 1,000,000 7,082 8,918 10,996
5 29,010 1,000,000 1,000,000 1,000,000 10,030 12,772 16,003
6 35,710 1,000,000 1,000,000 1,000,000 12,944 16,786 21,498
7 42,746 1,000,000 1,000,000 1,000,000 15,822 20,966 27,533
8 50,133 1,000,000 1,000,000 1,000,000 18,663 25,317 34,164
9 57,889 1,000,000 1,000,000 1,000,000 21,463 29,845 41,454
10 66,034 1,000,000 1,000,000 1,000,000 24,220 34,557 49,473
15 113,287 1,000,000 1,000,000 1,000,000 43,028 68,091 111,942
20 173,596 1,000,000 1,000,000 1,000,000 59,112 108,823 214,797
25 250,567 1,000,000 1,000,000 1,000,000 71,149 157,479 385,159
30 348,804 1,000,000 1,000,000 1,000,000 75,246 212,620 668,893
35 474,182 1,000,000 1,000,000 1,330,487 60,952 267,213 1,146,972
40 634,199 1,000,000 1,000,000 2,081,623 4,635 304,180 1,945,442
45 838,426 0 1,000,000 3,441,960 0 273,274 3,278,057
50 1,099,077 0 1,000,000 5,728,265 0 34,778 5,455,490
- --------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,751 8,866 10,079
4 10,274 12,110 14,188
5 12,766 15,508 18,739
6 15,224 19,066 23,778
7 17,646 22,790 29,357
8 20,031 26,685 35,532
9 22,375 30,757 42,366
10 24,676 35,013 49,929
15 43,028 68,091 111,942
- -------------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
TABLE 5
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,613 1,002,817 1,003,022 0 0 0
2 10,763 1,005,197 1,005,770 1,006,370 1,093 1,666 2,266
3 16,551 1,007,750 1,008,865 1,010,079 4,102 5,217 6,431
4 22,628 1,010,274 1,012,109 1,014,187 7,082 8,917 10,995
5 29,010 1,012,765 1,015,507 1,018,737 10,029 12,771 16,001
6 35,710 1,015,223 1,019,064 1,023,776 12,943 16,784 21,496
7 42,746 1,017,644 1,022,787 1,029,352 15,820 20,963 27,528
8 50,133 1,020,026 1,026,679 1,035,524 18,658 25,311 34,156
9 57,889 1,022,369 1,030,749 1,042,353 21,457 29,837 41,441
10 66,034 1,024,667 1,035,000 1,049,909 24,211 34,544 49,453
15 113,287 1,042,980 1,068,008 1,111,797 42,980 68,008 111,797
20 173,596 1,058,923 1,108,445 1,214,001 58,923 108,445 214,001
25 250,567 1,070,542 1,156,025 1,381,409 70,542 156,025 381,409
30 348,804 1,073,567 1,207,675 1,652,888 73,567 207,675 652,888
35 474,182 1,056,923 1,251,441 2,084,731 56,923 251,441 1,084,731
40 634,199 0 1,258,378 2,756,462 0 258,378 1,756,462
45 838,426 0 1,154,806 3,760,494 0 154,806 2,760,494
50 1,099,077 0 0 5,211,472 0 0 4,211,472
- --------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,765 15,507 18,737
6 15,223 19,064 23,776
7 17,644 22,787 29,352
8 20,026 26,679 35,524
9 22,369 30,749 42,353
10 24,667 35,000 49,909
15 42,980 68,008 111,797
- -------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
TABLE 6
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Guideline Premium Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 10,763 1,010,000 1,010,000 1,010,000 1,093 1,666 2,266
3 16,551 1,015,000 1,015,000 1,015,000 4,102 5,217 6,431
4 22,628 1,020,000 1,020,000 1,020,000 7,082 8,917 10,995
5 29,010 1,025,000 1,025,000 1,025,000 10,028 12,770 16,001
6 35,710 1,030,000 1,030,000 1,030,000 12,941 16,783 21,495
7 42,746 1,035,000 1,035,000 1,035,000 15,818 20,961 27,527
8 50,133 1,040,000 1,040,000 1,040,000 18,655 25,308 34,154
9 57,889 1,045,000 1,045,000 1,045,000 21,451 29,832 41,439
10 66,034 1,050,000 1,050,000 1,050,000 24,203 34,537 49,450
15 113,287 1,075,000 1,075,000 1,075,000 42,941 67,986 111,814
20 173,596 1,100,000 1,100,000 1,100,000 58,789 108,417 214,275
25 250,567 1,125,000 1,125,000 1,125,000 70,109 156,130 383,334
30 348,804 1,150,000 1,150,000 1,150,000 72,195 208,550 663,145
35 474,182 1,175,000 1,175,000 1,489,323 52,198 255,299 1,133,037
40 634,199 0 1,200,000 2,256,710 0 270,255 1,922,159
45 838,426 0 1,225,000 3,626,131 0 173,984 3,239,172
50 1,099,077 0 0 5,910,674 0 0 5,391,118
- --------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,764 15,506 18,737
6 15,221 19,063 23,775
7 17,642 22,785 29,351
8 20,023 26,676 35,522
9 22,363 30,744 42,351
10 24,659 34,993 49,906
15 42,941 67,986 111,814
- -------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
TABLE 7
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 10,763 1,000,000 1,000,000 1,000,000 1,098 1,671 2,271
3 16,551 1,000,000 1,000,000 1,000,000 4,116 5,231 6,446
4 22,628 1,000,000 1,000,000 1,000,000 7,108 8,946 11,026
5 29,010 1,000,000 1,000,000 1,000,000 10,075 12,821 16,057
6 35,710 1,000,000 1,000,000 1,000,000 13,017 16,867 21,588
7 42,746 1,000,000 1,000,000 1,000,000 15,936 21,093 27,676
8 50,133 1,000,000 1,000,000 1,000,000 18,830 25,507 34,379
9 57,889 1,000,000 1,000,000 1,000,000 21,701 30,120 41,770
10 66,034 1,000,000 1,000,000 1,000,000 24,551 34,942 49,922
15 113,287 1,000,000 1,000,000 1,000,000 47,009 72,878 117,711
20 173,596 1,000,000 1,000,000 1,000,000 67,862 120,623 230,920
25 250,567 1,000,000 1,000,000 1,099,249 87,352 181,233 421,200
30 348,804 1,000,000 1,000,000 1,613,848 104,787 257,624 740,258
35 474,182 1,000,000 1,000,000 2,343,307 117,746 352,205 1,271,896
40 634,199 1,000,000 1,000,000 3,405,858 122,088 467,775 2,152,330
45 838,426 1,000,000 1,000,000 5,009,398 106,292 606,183 3,594,668
50 1,099,077 1,000,000 1,000,000 7,471,496 42,156 771,911 5,922,666
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
<S> <C> <C> <C>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,764 8,879 10,094
4 10,300 12,138 14,218
5 12,811 15,557 18,793
6 15,297 19,147 23,868
7 17,760 22,917 29,500
8 20,198 26,875 35,747
9 22,613 31,032 42,682
10 25,007 35,398 50,378
15 47,009 72,878 117,711
- -------------------------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
TABLE 8
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,614 1,002,818 1,003,023 0 0 0
2 10,763 1,005,202 1,005,775 1,006,375 1,098 1,671 2,271
3 16,551 1,007,763 1,008,879 1,010,093 4,115 5,231 6,445
4 22,628 1,010,300 1,012,137 1,014,218 7,108 8,945 11,026
5 29,010 1,012,811 1,015,557 1,018,792 10,075 12,821 16,056
6 35,710 1,015,297 1,019,147 1,023,867 13,017 16,867 21,587
7 42,746 1,017,759 1,022,916 1,029,498 15,935 21,092 27,674
8 50,133 1,020,196 1,026,873 1,035,745 18,828 25,505 34,377
9 57,889 1,022,612 1,031,029 1,042,679 21,700 30,117 41,767
10 66,034 1,025,005 1,035,395 1,050,374 24,549 34,939 49,918
15 113,287 1,047,002 1,072,865 1,117,689 47,002 72,865 117,689
20 173,596 1,067,835 1,120,569 1,230,808 67,835 120,569 230,808
25 250,567 1,087,260 1,181,022 1,420,684 87,260 181,022 420,684
30 348,804 1,104,485 1,256,808 1,738,719 104,485 256,808 738,719
35 474,182 1,116,723 1,348,914 2,337,610 116,723 348,914 1,268,804
40 634,199 1,119,178 1,456,178 3,397,704 119,178 456,178 2,147,178
45 838,426 1,099,003 1,567,747 4,997,514 99,003 567,747 3,586,141
50 1,099,077 1,028,123 1,651,595 7,453,869 28,123 651,595 5,908,693
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,879 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,297 19,147 23,867
7 17,759 22,916 29,498
8 20,196 26,873 35,745
9 22,612 31,029 42,679
10 25,005 35,395 50,374
15 47,002 72,865 117,689
- -------------------------------------------------------------------------------------------------------------
</TABLE>
39
<PAGE>
TABLE 9
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Current Schedule of Charges Cash Value Test
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 10,763 1,010,000 1,010,000 1,010,000 1,098 1,671 2,271
3 16,551 1,015,000 1,015,000 1,015,000 4,115 5,231 6,445
4 22,628 1,020,000 1,020,000 1,020,000 7,108 8,945 11,026
5 29,010 1,025,000 1,025,000 1,025,000 10,075 12,821 16,056
6 35,710 1,030,000 1,030,000 1,030,000 13,016 16,866 21,587
7 42,746 1,035,000 1,035,000 1,035,000 15,934 21,092 27,674
8 50,133 1,040,000 1,040,000 1,040,000 18,827 25,504 34,377
9 57,889 1,045,000 1,045,000 1,045,000 21,699 30,116 41,766
10 66,034 1,050,000 1,050,000 1,050,000 24,548 34,938 49,917
15 113,287 1,075,000 1,075,000 1,075,000 46,996 72,862 117,691
20 173,596 1,100,000 1,100,000 1,100,000 67,820 120,568 230,847
25 250,567 1,125,000 1,125,000 1,223,640 87,217 181,057 420,967
30 348,804 1,150,000 1,150,000 1,762,975 104,354 257,054 739,858
35 474,182 1,175,000 1,175,000 2,517,072 116,263 350,261 1,271,226
40 634,199 1,200,000 1,200,000 3,604,091 117,630 461,822 2,151,214
45 838,426 1,225,000 1,225,000 5,231,822 93,436 588,687 3,592,820
50 1,099,077 1,250,000 1,250,000 7,717,676 6,016 721,521 5,919,637
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,614 2,818 3,023
2 5,202 5,775 6,375
3 7,763 8,879 10,093
4 10,300 12,137 14,218
5 12,811 15,557 18,792
6 15,296 19,146 23,867
7 17,758 22,916 29,498
8 20,195 26,872 35,745
9 22,611 31,028 42,678
10 25,004 35,394 50,373
15 46,996 72,862 117,691
- -------------------------------------------------------------------------------------------------------------
</TABLE>
40
<PAGE>
TABLE 10
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 1 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Cash Value Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,000,000 1,000,000 1,000,000 0 0 0
2 10,763 1,000,000 1,000,000 1,000,000 1,093 1,666 2,266
3 16,551 1,000,000 1,000,000 1,000,000 4,103 5,218 6,431
4 22,628 1,000,000 1,000,000 1,000,000 7,082 8,918 10,996
5 29,010 1,000,000 1,000,000 1,000,000 10,030 12,772 16,003
6 35,710 1,000,000 1,000,000 1,000,000 12,944 16,786 21,498
7 42,746 1,000,000 1,000,000 1,000,000 15,822 20,966 27,533
8 50,133 1,000,000 1,000,000 1,000,000 18,663 25,317 34,164
9 57,889 1,000,000 1,000,000 1,000,000 21,463 29,845 41,454
10 66,034 1,000,000 1,000,000 1,000,000 24,220 34,557 49,473
15 113,287 1,000,000 1,000,000 1,000,000 43,028 68,091 111,942
20 173,596 1,000,000 1,000,000 1,000,000 59,112 108,823 214,797
25 250,567 1,000,000 1,000,000 1,005,187 71,149 157,479 385,159
30 348,804 1,000,000 1,000,000 1,449,851 75,246 212,620 665,034
35 474,182 1,000,000 1,000,000 2,049,471 60,952 267,213 1,112,408
40 634,199 1,000,000 1,000,000 2,859,131 4,635 304,180 1,806,827
45 838,426 0 1,000,000 3,951,080 0 273,274 2,835,236
50 1,099,077 0 1,000,000 5,426,570 0 34,778 4,301,650
- --------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,751 8,866 10,079
4 10,274 12,110 14,188
5 12,766 15,508 18,739
6 15,224 19,066 23,778
7 17,646 22,790 29,357
8 20,031 26,685 35,532
9 22,375 30,757 42,366
10 24,676 35,013 49,929
15 43,028 68,091 111,942
- -------------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
TABLE 11
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 2 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Cash Value Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,002,613 1,002,817 1,003,022 0 0 0
2 10,763 1,005,197 1,005,770 1,006,370 1,093 1,666 2,266
3 16,551 1,007,750 1,008,865 1,010,079 4,102 5,217 6,431
4 22,628 1,010,274 1,012,109 1,014,187 7,082 8,917 10,995
5 29,010 1,012,765 1,015,507 1,018,737 10,029 12,771 16,001
6 35,710 1,015,223 1,019,064 1,023,776 12,943 16,784 21,496
7 42,746 1,017,644 1,022,787 1,029,352 15,820 20,963 27,528
8 50,133 1,020,026 1,026,679 1,035,524 18,658 25,311 34,156
9 57,889 1,022,369 1,030,749 1,042,353 21,457 29,837 41,441
10 66,034 1,024,667 1,035,000 1,049,909 24,211 34,544 49,453
15 113,287 1,042,980 1,068,008 1,111,797 42,980 68,008 111,797
20 173,596 1,058,923 1,108,445 1,214,001 58,923 108,445 214,001
25 250,567 1,070,542 1,156,025 1,381,409 70,542 156,025 381,409
30 348,804 1,073,567, 1,207,675 1,652,888 73,567 207,675 652,888
35 474,182 1,056,923 1,251,441 2,084,731 56,923 251,441 1,084,731
40 634,199 0 1,258,378 2,779,369 0 258,378 1,756,421
45 838,426 0 1,154,806 3,840,057 0 154,806 2,755,567
50 1,099,077 0 0 5,275,045 0 0 4,181,536
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,765 15,507 18,737
6 15,223 19,064 23,776
7 17,644 22,787 29,352
8 20,026 26,679 35,524
9 22,369 30,749 42,353
10 24,667 35,000 49,909
15 42,980 68,008 111,797
- -------------------------------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
TABLE 12
<TABLE>
<S> <C>
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE LIFE INSURANCE POLICY
Male Issue Age 35, Select-Preferred $5,000 Annual Premium
Death Benefit Option 3 $1 million Initial Face Amount
Guaranteed Schedules of Mortality and Expense Charges Cash Value Test
and Current Fund Level Charges
</TABLE>
<TABLE>
<CAPTION>
Death Benefit Assuming Net Surrender Value Assuming
Hypothetical Gross Annual Hypothetical Gross Annual
Investment Return Of: Investment Return Of:
- ------------------------------------------------------------------------------------------------------------
End of Premiums
Policy Year Accumulated at
5% Interest Per
Year 0% 6% 12% 0% 6% 12%
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 5,250 1,005,000 1,005,000 1,005,000 0 0 0
2 10,763 1,010,000 1,010,000 1,010,000 1,093 1,666 2,266
3 16,551 1,015,000 1,015,000 1,015,000 4,102 5,217 6,431
4 22,628 1,020,000 1,020,000 1,020,000 7,082 8,917 10,995
5 29,010 1,025,000 1,025,000 1,025,000 10,028 12,770 16,001
6 35,710 1,030,000 1,030,000 1,030,000 12,941 16,783 21,495
7 42,746 1,035,000 1,035,000 1,035,000 15,818 20,961 27,527
8 50,133 1,040,000 1,040,000 1,040,000 18,655 25,308 34,154
9 57,889 1,045,000 1,045,000 1,045,000 21,451 29,832 41,439
10 66,034 1,050,000 1,050,000 1,050,000 24,203 34,537 49,450
15 113,287 1,075,000 1,075,000 1,075,000 42,941 67,986 111,814
20 173,596 1,100,000 1,100,000 1,100,000 58,789 108,417 214,275
25 250,567 1,125,000 1,125,000 1,125,426 70,109 156,130 383,334
30 348,804 1,150,000 1,150,000 1,592,259 72,195 208,550 661,552
35 474,182 1,175,000 1,175,000 2,214,013 52,198 255,299 1,106,732
40 634,199 0 1,200,000 3,044,769 0 270,255 1,797,751
45 838,426 0 1,225,000 4,156,426 0 173,984 2,821,133
50 1,099,077 0 0 5,649,746 0 0 4,280,386
- --------------------------------------------------------------------------------------------------------
</TABLE>
Account Value Assuming Hypothetical Gross
Annual Investment Return Of:
<TABLE>
End of Policy Year
0% 6% 12%
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1 2,613 2,817 3,022
2 5,197 5,770 6,370
3 7,750 8,865 10,079
4 10,274 12,109 14,187
5 12,764 15,506 18,737
6 15,221 19,063 23,775
7 17,642 22,785 29,351
8 20,023 26,676 35,522
9 22,363 30,744 42,351
10 24,659 34,993 49,906
15 42,941 67,986 111,814
- -------------------------------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
APPENDIX E
DIRECTORS OF MASSMUTUAL
ROGER G. ACKERMAN, DIRECTOR
Chairman and Chief Executive Officer, Corning, Inc., since 1996, President and
Chief Operating Officer 1990-1996, One Riverfront Plaza HQE 2, Corning, NY
14831.
JAMES R. BIRLE, DIRECTOR
Chairman since 1997 and Founder since 1994, President, 1994-1997, Resolute
Partners, LLC, General Partner, Blackstone Group 1988-1994, 2 Soundview Drive,
Greenwich CT 06836.
GENE Q. CHAO, DIRECTOR
Chairman, President and CEO, Computer Projections, Inc., since 1991, 733 SW
Vista Avenue, Portland, OR 97205-1203.
PATRICIA DIAZ DENNIS, DIRECTOR
Senior Vice President and Assistant General Counsel, SBC Communications Inc.,
since 1995, Special Counsel, Sullivan & Cromwell, 1993-1995; Assistant Secretary
of State for Human Rights and Humanitarian Affairs, U.S. Department of State,
1992-1993. 175 East Houston, Room 4-A-70, San Antonio, TX 87205
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,
Senior Vice President, Texaco, Inc. 1987-1996. 1201 Louisiana Suite 1400,
Houston, TX 77002-5603
WILLIAM B. ELLIS, DIRECTOR
Senior Fellow, Yale University School of Forestry and Environmental Studies,
since 1995, Chairman and Chief Executive Officer, Northeast Utilities, 1983-
1995. 31 Pound Foolish Lane, Glastonbury, CT 06033
ROBERT M. FUREK, DIRECTOR
Chairman, State Board of Trustees for the Hartford School System, since 1997,
President and Chief Executive Officer, Heublein, Inc., 1987-1996, 1 State Street
Suite 2310, Hartford, CT 06103.
CHARLES K. GIFFORD, DIRECTOR
Chairman and Chief Executive Officer since 1995, President 1989-1995 BankBoston
N.A., Chairman since 1998 and Chief Executive Officer since 1985, BankBoston,
100 Federal Street, Boston, MA 02110.
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 1983, One Landmark
Square Suite 1905, 19th Floor, Stamford, CT 06901.
44
<PAGE>
BARBARA B. HAUPTFUHRER, DIRECTOR
Director of various corporations, since 1972, 1700 Old Welsh Road, Huntington
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 Vice President and CEO Multimedia Products Group, AT&T, 1994-1996;
Executive Vice President and CEO, Network Systems Group, 1993-1994; Group
Executive and President, AT&T Network Systems, 1989-1993. 5 Peacock Lane,
Village of Golf, FL 33436.
JOHN F. MAYPOLE, DIRECTOR
Managing Partner, Peach State Real Estate Holding Company, since 1984, 55 Sandy
Hook Road, North, Sarasota, FL 34343.
JOHN J. PAJAK, DIRECTOR, PRESIDENT AND CHIEF OPERATING OFFICER
President and Chief Operating Officer, MassMutual, since 1996; Vice Chairman and
Chief Administrative Officer, 1996; Executive Vice President, 1987-1996, 1295
State Street, Springfield, MA 01111.
THOMAS B. WHEELER, DIRECTOR, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Chairman and Chief Executive Officer, MassMutual, since 1996; President and
Chief Executive Officer, 1988-1996, 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 Deputy General Counsel, 1992-1993, MassMutual.1295 State Street,
Springfield, Ma 01111.
PETER J. DABOUL
Executive Vice President and Chief Information Officer since 1997, Senior Vice
President 1990 1997, MassMutual, 1295 State Street, Springfield, Ma 01111.
JOHN B. DAVIES
Executive Vice President, since 1994; Associate Executive Vice President, 1994;
General Agent, 1982-1993, MassMutual, 1295 State Street, Springfield, Ma 01111
DANIEL J. FITZGERALD
Executive Vice President, since 1994, Corporate Financial Operations, 1994-
1997; Senior Vice President, 1991-1994, MassMutual, 1295 State Street,
Springfield, Ma 01111
45
<PAGE>
JAMES E. MILLER
Executive Vice President since 1997 and 1987-1996, MassMutual, Senior Vice
President, UniCare Life and Health Insurance Company, 1996-1997, 1295 State
Street, Springfield, Ma 01111
JOHN V. MURPHY
Executive Vice President, MassMutual, since 1997; Executive Vice President and
Chief Operating Officer, David L. Babson & Co., Inc., 1995-1997; Chief
Operating officer, Concert Capital Management, Inc., 1993-1995, Senior Vice
President and Chief Financial Officer, Liberty Financial Companies, 1977-1993,
1295 State Street, Springfield, MA 01111
GARY E. WENDLANDT
Executive Vice President and Chief Investment Officer, since 1993; Executive
Vice President, 1992-1993; MassMutual, 1295 State Street, Springfield, MA 01111.
JOSEPH M. ZUBRETSKY
Executive Vice President and Chief Financial Officer, since 1997, MassMutual,
Chief Financial Officer, 1996, HealthSource, Coopers & Lybrand, 1990-1996, 1295
State Street, Springfield, MA 01111.
46
<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
(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.
<PAGE>
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 FILING
This Registration Statement is comprised of the following documents:
The Facing Sheet.
Cross-Reference to items required by Form N-8B-2.
The Prospectus consisting of 45 pages.
The Undertaking to File Reports.
The Undertaking pursuant to Rule 484 under the Securities Act of
1933.
Representation under Section 26(e)(2)(a) of the Investment Company
Act of 1940.
The Signatures.
Written Consents of the Following Persons:
1. To be filed: Coopers & Lybrand, L.L.P., independent
accountants;
2. Counsel opining as to the legality of securities being
registered;
3. Opinion and consent of Craig Waddington, FSA, MAAA, opining
as to actuarial matters contained in the Registration
Statement.
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. Form of Certificate of the Resolution of the Board of
Directors establishing the VUL segment of the Separate
Account.
2. Not Applicable.
3. Form of Distribution Agreements:
a. Form of Distribution Servicing Agreement between MML
Distributors, LLC and MassMutual./1/
b. Form of Co-Underwriting Agreement between MML Investors
Services, Inc. and MassMutual./1/
4. Not Applicable.
5. Form of Flexible Premium Adjustable Variable Life Policy./3/
<PAGE>
6. a. Certificate of Incorporation of MassMutual./2/
b. By-Laws of MassMutual./2/
7. Not Applicable.
8. Participation Agreement./2/
9. Not Applicable.
10. Form of Application for a Flexible Premium Adjustable
Variable Life insurance policy./3/
11. To be filed: Memorandum describing MassMutual issuance,
transfer, and redemption procedures for the Policy.
99.B. Opinion and Consent of Counsel as to the legality of the
securities being registered.
99.C. No financial statement will be omitted from the Prospectus
pursuant to Instruction 1(b) or (c) of Part I.
99.D. Not Applicable.
99.E. To be filed: Consent of Coopers & Lybrand L.L.P.
99.F. Opinion and consent of Craig Waddington, FSA, MAAA, as to
actuarial matters pertaining to the securities being registered.
99.G. Powers of Attorney/2/
27 Not Applicable
/1/ Incorporated by reference to Post-Effective Amendment No. 1 to Registration
Statement No. 33-89798 as an exhibit filed with the Commission effective
May 1, 1996.
/2/ Incorporated by reference to Initial Registration Statement of the Separate
Account as an exhibit filed with the Commission on February 28, 1997.
(Registration No. 333-22557).
/3/ Incorporated by reference to Initial Registration Statement of VUL
Registration No. 333-49457 as an exhibit filed with the Commission on April
6, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
caused this initial Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized, all in the city of Springfield and the
Commonwealth of Massachusetts, on the 3rd 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 3, 1998, as Attorney-in-Fact pursuant to
- --------------------
*Richard M. Howe powers of attorney incorporated by reference.
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Thomas B. Wheeler* Chief Executive Officer and April 3, 1998
- ------------------------------
Thomas B. Wheeler Chairman of the Board
/s/ John J. Pajak* President, Chief Operating Officer April 3, 1998
- ------------------------------
John J. Pajak and Director
/s/ Joseph M. Zubretsky* Executive Vice President, April 3, 1998
- ------------------------------
Joseph M. Zubretsky Chief Financial Officer &
Chief Accounting Officer
/s/ Roger G. Ackerman* Director April 3, 1998
- ------------------------------
Roger G. Ackerman
/s/ James R. Birle* Director April 3, 1998
- ------------------------------
James R. Birle
/s/ Gene Chao* Director April 3, 1998
- ------------------------------
Gene Chao, Ph.D.
/s/ Patricia Diaz Dennis* Director April 3, 1998
- ------------------------------
Patricia Diaz Dennis
/s/ Anthony Downs* Director April 3, 1998
- ------------------------------
Anthony Downs
/s/ James L. Dunlap* Director April 3, 1998
- ------------------------------
James L. Dunlap
/s/ William B. Ellis* Director April 3, 1998
- ------------------------------
William B. Ellis, Ph.D.
</TABLE>
<PAGE>
/s/ Robert M. Furek* Director April 3, 1998
- ------------------------------
Robert M. Furek
/s/ Charles K. Gifford* Director April 3, 1998
- ------------------------------
Charles K. Gifford
/s/ William N. Griggs* Director April 3, 1998
- ------------------------------
William N. Griggs
/s/ George B. Harvey* Director April 3, 1998
- ------------------------------
George B. Harvey
/s/ Barbara B. Hauptfuhrer* Director April 3, 1998
- ------------------------------
Barbara B. Hauptfuhrer
/s/ Sheldon B. Lubar* Director April 3, 1998
- ------------------------------
Sheldon B. Lubar
/s/ William B. Marx, Jr.* Director April 3, 1998
- ------------------------------
William B. Marx, Jr.
/s/ John F. Maypole* Director April 3, 1998
- ------------------------------
John F. Maypole
/s/ Alfred M. Zeien* Director April 3, 1998
- ------------------------------
Alfred M. Zeien
/s/ Richard M. Howe* On April 3, 1998, as Attorney-in-Fact pursuant to
- -----------------------------
*Richard M. Howe powers of attorney.
<PAGE>
EXHIBIT LIST
99.A.1. Form of Certificate of the Resolution of the Board of Directors
establishing the VUL segment of the Separate Account.
99.B. Opinion and Consent of Counsel as to the legality of the securities
being registered.
99.F. Opinion and consent of Craig Waddington, FSA, MAAA, as to actuarial
matters pertaining to the securities being registered.
<PAGE>
EXHIBIT 99.A.1.
Form of Certificate of the Resolution of the Board of Directors
establishing the VUL segment of the Separate Account.
The undersigned hereby certifies that she is the Secretary of Massachusetts
Mutual Life Insurance Company (the "Company"); that the following vote was
adopted by means of an instrument of unanimous written consent of the Board of
Directors of the Company dated ; and that the said vote has
been neither rescinded nor modified, but remains in full force and effect:
VOTED:
That in connection with the development of a new variable universal
life insurance product (the "VUL Policy"), the Company establish a segment
of Massachusetts Mutual Variable Life Separate Account I (the "Separate
Account") in order to invest contributions received under the VUL Policy;
that the appropriate officers of the Company be, and each acting singly
hereby is, authorized to execute all documents or take any other action
which said officer deems necessary or advisable in order to permit the sale
of the VUL Policy, including the filing of registration statements or
amendments thereto with the United States Securities and Exchange
Commission or other appropriate regulatory authorities; and that the chief
executive officer or the chief operating officer of the Company be, and
each acting singly hereby is, authorized to establish additional segments
of the Separate Account or further divide any segment of the Separate
Account into additional divisions, as such officer in his discretion deems
necessary or appropriate.
IN WITNESS WHEREOF, I have hereunto affixed my hand and the seal of the Company
this day of
Secretary
<PAGE>
EXHIBIT 99.B.
[MASSMUTUAL LETTERHEAD]
April 3, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
RE: Registration Statement
filed on Form S-6
Ladies and Gentlemen:
This opinion is furnished in connection with the filing of Registration
Statement under the Securities Act of 1933 for Massachusetts Mutual Life
Insurance Company's ("MassMutual") Flexible Premium Adjustable Variable Life
Insurance Policies (the "Policies"). Massachusetts Mutual Variable Life
Separate Account I issues the Policies.
As 2nd Vice President & Associate General Counsel of Massachusetts Mutual Life
Insurance Company, I provide legal advice in connection with the operation of
its variable products. In such role I am familiar with the filing 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 state 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
Connecticut 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 filing.
Very truly yours,
/s/ Richard M. Howe
- ------------------------
Richard M. Howe
2nd Vice President & Associate General Counsel
Massachusetts Mutual Life Insurance Company
<PAGE>
EXHIBIT 99.F.
[MASSMUTUAL LETTERHEAD]
April 3, 1998
Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, MA 01111
Ladies and Gentlemen:
This opinion is furnished in connection with Registration Statement for
MassMutual's Flexible Premium Adjustable Variable Life Insurance Policies (the
"Policies") under the Securities Act of 1933. The prospectus included in the
filing 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 Registration
Statement filing and to the reference of my name under the heading "Experts" in
the prospectus.
Sincerely,
/s/ Craig Waddington
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Craig Waddington, FSA, MAAA
Vice President and Actuary
