<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 1996
REGISTRATION NO. 33-47927
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-6
POST-EFFECTIVE
AMENDMENT No. 4
To REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933
----------------
METROPOLITAN LIFE SEPARATE ACCOUNT UL
(EXACT NAME OF TRUST)
METROPOLITAN LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
1 Madison Avenue
New York, New York 10010
(COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
----------------
RICHARD M. BLACKWELL, ESQ.
Senior Vice-President and General Counsel
Metropolitan Life Insurance Company
1 Madison Avenue
New York, New York 10010
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)
----------------
Copies to:
GARY O. COHEN, ESQ. and THOMAS C. LAUERMAN, ESQ.
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036
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It is proposed that the filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1996 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)
[_] on (date), pursuant to paragraph (a) of Rule 485
----------------
This filing is made pursuant to Rule 6c-3 and 6e-3(T) under the Investment
Company Act of 1940 to register interests in Metropolitan Life Separate
Account UL which funds certain flexible premium multifunded life insurance
policies.
Registrant elects to be governed by Rule 6e-3(T)(b)(13)(i)(A) under the
Investment Company Act of 1940 with respect to the policy described in the
Prospectus.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant has registered an indefinite amount of securities. THE REGISTRANT'S
RULE 24f-2 NOTICE WAS FILED WITH THE COMMISSION ON FEBRUARY 29, 1996.
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<PAGE>
METROPOLITAN LIFE SEPARATE ACCOUNT UL
METROPOLITAN LIFE INSURANCE COMPANY
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
ITEMS OF
FORM N-8B-2 CAPTIONS IN PROSPECTUS
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<S> <C>
1...................... Cover Page
2...................... SUMMARY--About Metropolitan Life
3...................... Inapplicable
4...................... SALES AND ADMINISTRATION OF THE POLICIES; SUMMARY--
About Metropolitan Life
5, 6, 7................ SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--The
Separate Account; STATE REGULATION
8...................... FINANCIAL STATEMENTS
9...................... Inapplicable
10(a)................... OTHER POLICY PROVISIONS--Owner; Beneficiary; Collat-
eral Assignment
10(c), 10(d)............ DEFINITIONS--Valuation Date; SUMMARY--Surrender and
Surrender Charges; Partial Withdrawal; Free Look
Period; POLICY BENEFITS--Benefit at Final Date;
POLICY RIGHTS--Surrender and Withdrawal Privileges;
Exchange Privilege; PAYMENT AND ALLOCATION OF PRE-
MIUMS--Allocation of Premiums and Cash Value, Cash
Value Transfers; THE FIXED ACCOUNT--Transfers,
Withdrawals, Surrenders, and Policy Loans; OTHER
POLICY PROVISIONS--Payment and Deferment
10(e)................... PAYMENT AND ALLOCATION OF PREMIUMS--Policy Termina-
tion and Reinstatement
10(f)................... VOTING RIGHTS
10(g)(1)-(3), 10(h)(1)-
(3).................... RIGHTS RESERVED BY METROPOLITAN LIFE
10(g)(4), 10(h)(4)...... Inapplicable
10(i)................... POLICY BENEFITS--Death Benefits; Death Benefit Op-
tions; Cash Value; Optional Income Plans; Optional
Insurance Benefits; PAYMENT AND ALLOCATION OF PRE-
MIUMS--Issuance of a Policy; Premiums; Allocation
of Premiums and Cash Value; Policy Termination and
Reinstatement
11...................... SUMMARY--The Separate Account and the Metropolitan
Series Fund; The Fixed Account; SEPARATE ACCOUNT
AND METROPOLITAN SERIES FUND--Metropolitan Series
Fund
12(a)................... Cover Page
12(b), 12(e)............ Inapplicable
12(c), 12(d)............ SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--Met-
ropolitan Series Fund
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ITEMS OF
FORM N-8B-2 CAPTIONS IN PROSPECTUS
- ----------- ----------------------
<S> <C>
13(a), 13(b), 13(c), SUMMARY--The Separate Account and the Metropolitan
13(d)................... Series Fund; The Fixed Account; Fund Transfers and
Charges; Premium Expense Charges; Monthly Deduction
from Cash Value; Separate Account Charges; Fund In-
vestment Management Fees; Increase in Specified
Face Amount Charge; Surrender and Surrender
Charges; CHARGES AND DEDUCTIONS; SEPARATE ACCOUNT
AND METROPOLITAN SERIES FUND--The Separate Account;
POLICY BENEFITS--Death Benefit Increases
13(e).................... SALES AND ADMINISTRATION OF THE POLICIES
13(f), 13(g)............. Inapplicable
14....................... PAYMENT AND ALLOCATION OF PREMIUMS--Issuance of a
Policy; SALES AND ADMINISTRATION OF THE POLICIES
15....................... PAYMENT AND ALLOCATION OF PREMIUMS
16....................... SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--Met-
ropolitan Series Fund
17(a), 17(b)............. Captions referenced under Items 10(c), 10(d), 10(e)
and 10(i) above
17(c).................... Inapplicable
18(a), 18(c)............. SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND
18(b), 18(d)............. Inapplicable
19....................... SALES AND ADMINISTRATION OF THE POLICIES; VOTING
RIGHTS; REPORTS
20(a), 20(b)............. RIGHTS RESERVED BY METROPOLITAN LIFE; SEPARATE AC-
COUNT AND METROPOLITAN SERIES FUND--The Separate
Account
20(c), 20(d), 20(e),
20(f)................... Inapplicable
21(a), 21(b)............. POLICY RIGHTS--Loan Privileges; OTHER POLICY PROVI-
SIONS--Payment and Deferment
21(c), 22................ Inapplicable
23....................... SALES AND ADMINISTRATION OF THE POLICIES
24....................... OTHER POLICY PROVISIONS
25....................... SUMMARY--About Metropolitan Life
26....................... CHARGES AND DEDUCTIONS--Other Charges
27....................... SUMMARY--About Metropolitan Life
28....................... MANAGEMENT
29....................... Inapplicable
30, 31, 32, 33, 34....... Inapplicable
35....................... STATE REGULATION
36, 37................... Inapplicable
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ITEMS OF
FORM N-8B-2 CAPTIONS IN PROSPECTUS
- ----------- ----------------------
<S> <C>
38....................... SALES AND ADMINISTRATION OF THE POLICIES; DISTRIBU-
TION OF THE POLICIES
39....................... SUMMARY--About Metropolitan Life; SALES AND ADMINIS-
TRATION OF THE POLICIES; DISTRIBUTION OF THE POLI-
CIES
40(a).................... Inapplicable
40(b).................... SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--Met-
ropolitan Series Fund; CHARGES AND DEDUCTIONS--
Other Charges
41(a).................... SUMMARY--About Metropolitan Life; SALES AND ADMINIS-
TRATION OF THE POLICIES
41(b), 41(c), 42, 43..... Inapplicable
44(a).................... SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--Met-
ropolitan Series Fund; POLICY BENEFITS--Cash Value
44(b).................... Inapplicable
44(c).................... CHARGES AND DEDUCTIONS--Monthly Deduction From Cash
Value
45....................... Inapplicable
46....................... Captions referenced under Item 44 above
47....................... Captions referenced under Items 10(c) and 16 above
48, 49................... Inapplicable
50....................... SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND--The
Separate Account
51(a), 51(b)............. SUMMARY--About Metropolitan Life; Cover Page; POLICY
BENEFITS--Optional Insurance Benefits; POLICY
RIGHTS--Exchange Privileges
51(c), 51(d), 51(e)...... Captions referenced under Item 10(i) above
51(f).................... PAYMENT AND ALLOCATION OF PREMIUMS--Policy Termina-
tion and Reinstatement
51(g).................... Captions referenced under Items 10(i) and 13 above
51(h), 51(j)............. Inapplicable
51(i).................... DISTRIBUTION OF THE POLICIES
52(a), 52(c)............. RIGHTS RESERVED BY METROPOLITAN LIFE
52(b), 52(d)............. Inapplicable
53(a).................... FEDERAL TAX MATTERS
53(b), 54 through 58..... Inapplicable
59....................... FINANCIAL STATEMENTS
</TABLE>
iii
<PAGE>
MAY 1, 1996
PROSPECTUS
for
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICIES
(Minimum Initial Specified Face Amount $50,000)
Issued by
METROPOLITAN LIFE INSURANCE COMPANY
The individual flexible premium multifunded life insurance policies
("Policies") offered by this Prospectus are issued by Metropolitan Life
Insurance Company ("Metropolitan Life") and are designed to provide lifetime
insurance coverage on the insureds named in the Policies, as well as maximum
flexibility in connection with premium payments and death benefits. This
flexibility allows an owner of a Policy to provide for changing insurance
needs within the confines of a single insurance policy.
The Policy provides for a death benefit payable at the insured's death as
long as the Policy is still in effect. The Policy owner may choose either
Death Benefit Option A (the death benefit is fixed in amount) or Death Benefit
Option B (the death benefit includes the Policy's cash value in addition to a
fixed insurance amount). For Policies issued on or after May 1, 1994 and
provided Death Benefit Option C is available in the state where the Policy is
issued, a Policy owner, where the insured is age 60 or less, will have a third
possible choice: Death Benefit Option C (the death benefit includes the
Policy's cash value in addition to a fixed insurance amount if the insured
dies prior to the Policy anniversary on which the insured is 65 and is fixed
in amount if death occurs thereafter). If greater than the death benefit
otherwise payable under Option A, B or C, a minimum death benefit equivalent
to a percentage of the cash value will be paid.
The premiums paid, less premium expense charges, will be allocated at the
owner's discretion among one or more investment divisions of Metropolitan Life
Separate Account UL ("Separate Account") and/or a fixed interest account
("Fixed Account") within the General Account of Metropolitan Life. The assets
in each investment division are invested in shares of a corresponding
portfolio of the Metropolitan Series Fund, Inc. ("Fund"). The accompanying
prospectus for the Fund describes the investment objectives and certain
attendant risks of the seven currently available portfolios of the Fund:
Growth Portfolio, Income Portfolio, Money Market Portfolio, Diversified
Portfolio, Aggressive Growth Portfolio, International Stock Portfolio and
Stock Index Portfolio. The International Stock Portfolio is not available in
California.
The Policy's cash value will vary with the investment experience of the
Separate Account investment divisions to which amounts are allocated and the
fixed rates of interest earned by allocations to the General Account. The cash
value will also be adjusted for other factors, including the amount of charges
imposed and the premium payments made.
The Policy owner may withdraw or borrow a portion of the Policy's cash
surrender value, or the Policy may be fully surrendered, at any time, subject
to certain limitations and charges.
The Policy owner has the flexibility to vary the frequency and amount of
premium payments, subject to certain restrictions and conditions.
Metropolitan Life is the investment manager of the Fund and the distributor
of its shares. Metropolitan Life also distributes and administers the
Policies. State Street Research & Management Company ("State Street Research")
is the sub-investment manager with respect to the Growth, Income, Diversified
and Aggressive Growth Portfolios of the Fund. State Street Research is a
wholly-owned subsidiary of Metropolitan Life. GFM International Investors
Limited ("GFM") is the sub-investment manager with respect to the
International Stock Portfolio of the Fund. GFM is a subsidiary of Metropolitan
Life.
As in the case of other life insurance policies, it may not be advantageous
to purchase flexible premium multifunded life insurance as a replacement for
an existing life insurance policy or in addition to an existing flexible
premium multifunded life insurance policy.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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 NOT VALID UNLESS ATTACHED TO THE CURRENT PROSPECTUS FOR THE
METROPOLITAN SERIES FUND, INC., WHICH CONTAINS ADDITIONAL INFORMATION ABOUT
THE FUND.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
1 Madison Avenue, New York, New York 10010 Telephone (800) 638-5000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
DEFINITIONS............................... 3
SUMMARY................................... 5
Purpose of Summary....................... 5
About Metropolitan Life.................. 5
Policy in Brief.......................... 5
Premiums................................. 5
Cash Value............................... 5
Benefits and Riders...................... 5
Death Benefit Options.................... 5
The Fixed Account........................ 6
The Separate Account and the Metropolitan
Series Fund............................. 6
The Funding Options...................... 6
Automated Investment Strategies.......... 6
Fund Transfers and Charges............... 7
Premium Expense Charges.................. 7
Monthly Deduction From Cash Value........ 7
Separate Account Charges................. 7
Fund Investment Management Fees.......... 7
Increase in Specified Face Amount Charge. 7
Surrender and Surrender Charges.......... 7
Partial Withdrawal....................... 8
Loans.................................... 8
Free Look Period......................... 8
Tax Treatment of Cash Value.............. 8
Tax Treatment of the Death Benefit....... 8
Communications........................... 8
SEPARATE ACCOUNT AND METROPOLITAN
SERIES FUND.............................. 9
The Separate Account..................... 9
Metropolitan Series Fund................. 9
POLICY BENEFITS........................... 10
Death Benefits........................... 10
Death Benefit Options.................... 10
Cash Value............................... 13
Benefit at Final Date.................... 21
Optional Income Plans.................... 21
Optional Insurance Benefits.............. 21
PAYMENT AND ALLOCATION OF PREMIUMS........ 21
Issuance of a Policy..................... 21
Premiums................................. 22
Allocation of Premiums and Cash Value.... 22
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Policy Termination and Reinstatement.................................... 24
CHARGES AND DEDUCTIONS................................................... 25
Premium Expense Charges................................................. 25
Transfer Charge......................................................... 25
Monthly Deduction From Cash Value....................................... 25
Charges Against the Separate Account.................................... 27
Surrender Charge........................................................ 27
Guarantee of Certain Charges............................................ 29
Other Charges........................................................... 29
ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, CASH SURRENDER VALUES AND
ACCUMULATED PREMIUMS.................................................... 29
POLICY RIGHTS............................................................ 43
Loan Privileges......................................................... 43
Surrender and Withdrawal Privileges..................................... 44
Exchange Privilege...................................................... 44
THE FIXED ACCOUNT........................................................ 45
General Description..................................................... 45
Fixed Account Benefits.................................................. 45
Fixed Account Cash Value................................................ 45
Transfers, Withdrawals, Surrenders and Policy Loans..................... 46
RIGHTS RESERVED BY METROPOLITAN LIFE..................................... 46
OTHER POLICY PROVISIONS.................................................. 46
SALES AND ADMINISTRATION OF THE POLICIES................................. 47
DISTRIBUTION OF THE POLICIES............................................. 47
FEDERAL TAX MATTERS...................................................... 48
Taxation of the Policy.................................................. 48
Taxation of Metropolitan Life........................................... 49
MANAGEMENT............................................................... 50
VOTING RIGHTS............................................................ 53
Right to Instruct Voting of Fund Shares................................. 53
Disregard of Voting Instructions........................................ 53
REPORTS.................................................................. 53
STATE REGULATION......................................................... 54
REGISTRATION STATEMENT................................................... 54
LEGAL MATTERS............................................................ 54
EXPERTS.................................................................. 54
FINANCIAL STATEMENTS..................................................... 54
APPENDIX TO PROSPECTUS................................................... 83
</TABLE>
THE POLICY IS NOT AVAILABLE IN ALL STATES. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT
LAWFULLY BE MADE. METROPOLITAN LIFE DOES NOT AUTHORIZE ANY INFORMATION OR
REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS PROSPECTUS OTHER THAN
AS CONTAINED IN THIS PROSPECTUS OR ANY ATTACHED PROSPECTUS OR ANY SUPPLEMENT
THERETO OR IN ANY SUPPLEMENTAL SALES MATERIAL AUTHORIZED BY METROPOLITAN LIFE.
2
<PAGE>
DEFINITIONS
Age--The age in full years of the insured at issue of the Policy or in the
case of an increase, at the time of the increase, plus the number of full
Policy years completed since issue or increase. A full Policy year is
completed upon the commencement of the next succeeding Policy year.
Base Administration Charge--The portion of the first year monthly
administration charge which is determined by the Age of the insured under a
Policy and not by the specified face amount.
Beneficiary--The beneficiary is the person or persons designated by the
owner of the Policy to receive the insurance proceeds upon the death of the
insured.
Cash Surrender Value--The cash value less any indebtedness and any
applicable surrender charge (computed from the tables set forth under
"Surrender Charge") and, if the Policy is surrendered in the first Policy
year, less the Base Administration Charge for each full Policy month remaining
to the end of the first Policy year.
Cash Value--The sum of the Policy cash values in the Fixed Account, the
investment divisions of the Separate Account and the Policy Loan Account.
Date of Policy--The date set forth in the Policy that is used to determine
Policy years and Policy months from issue. Policy anniversaries are measured
from the Date of Policy.
Designated Office--The home office of Metropolitan Life at 1 Madison Avenue,
New York, New York 10010, to which all Policy owner communications are to be
sent. Metropolitan Life may, by written notice, name other locations within
the United States to serve as designated offices, in place of or in addition
to the home office.
Final Date--The policy anniversary on which the insured is age 95.
Fixed Account--An account which is part of the General Account and to which
Metropolitan Life will allocate net premiums as directed by the owner of a
Policy and credit certain fixed rates of interest.
General Account--The assets of Metropolitan Life other than those allocated
to the Separate Account or any other legally-segregated separate account.
Guideline Annual Premium--The level annual amount of premium that would be
payable through the Final Date of a Policy for the specified face amount of
the Policy if premiums were fixed by Metropolitan Life as to both timing and
amount and were based on 1980 Commissioners Standard Ordinary Mortality
Tables, net investment earnings at an annual effective rate of 5%, and fees
and charges as set forth in the Policy and any Policy riders.
Indebtedness--The total of any unpaid Policy loan and loan interest.
Insured--The person upon whose life the Policy is issued.
Investment Start Date--The date the first premium is applied to the Fixed
Account and/or the Separate Account. It is the later of (1) the Date of Policy
and (2) the date the first premium for a Policy is received at the Designated
Office.
Investment Division--A subdivision of the Separate Account. The assets in
each investment division are invested exclusively in the shares of a specified
portfolio.
Loan Value--The maximum amount that may be borrowed under the Policy. The
loan value equals the Policy's cash surrender value less two monthly
deductions, or, if greater, 75% (90% in Virginia and Maryland) of the cash
surrender value (or, in Texas, the Policy's cash surrender value less two
monthly deductions or 100% of the cash surrender value in the Fixed Account
and 75% of the cash surrender value in the Separate Account, if greater).
Minimum Initial Specified Face Amount--The minimum specified face amount of
insurance for which a Policy may be issued. Currently, the amount is $100,000
for insureds in the preferred rate class, $50,000 for most other insureds,
$25,000 for certain insureds over age 59 and $250,000 for most Policies
distributed through brokers (see "Distribution of the Policies").
Monthly Anniversary--The same date in each month as the Date of Policy. For
purposes of the Separate Account, whenever the monthly anniversary date falls
on a date other than a valuation date, the next valuation date will be deemed
to be the monthly anniversary.
3
<PAGE>
Monthly Deduction--Charges deducted monthly from the cash value of a Policy
and which include the monthly cost of term insurance, the monthly cost of any
benefits provided by riders, and the monthly policy charges.
Planned Periodic Premium--The Policy owner's self-determined level-amount
premium planned to be paid at fixed intervals over a specified period of time.
The Policy owner is not required to follow this schedule after the first two
Policy years.
Policy--The flexible premium multifunded life insurance policy offered by
Metropolitan Life and described in this Prospectus.
Policy Loan Account--An account within the General Account to which cash
value from the Separate Account and/or the Fixed Account in an amount equal to
a Policy loan requested by a Policy owner is transferred.
Policy Month--The month beginning on the monthly anniversary.
Policy owner ("Owner")--The person so designated in the application or as
subsequently changed.
Portfolio--A portfolio represents a different class (or series) of stock of
Metropolitan Series Fund, Inc., a mutual fund in which the Separate Account
assets are invested.
Separate Account--Metropolitan Life Separate Account UL, a separate
investment account of Metropolitan Life through which premiums paid under the
Policy are invested to the extent allocated to the Separate Account by the
Policy owner.
Specified Face Amount--The amount set forth on the face of the Policy.
Target Premium--The estimated annual amount which would keep a Policy in
force to maturity based on the insured's attained age and sex, the specified
face amount of insurance and reasonable estimates of mortality and interest,
as established as of the Date of Policy.
Valuation Date--Each day on which the New York Stock Exchange is open for
trading or, on days other than when the New York Stock Exchange is open, on
which it is determined that there is a sufficient degree of trading in the
Fund's portfolio securities that the current net asset value of its redeemable
securities might be materially affected. Valuations for any date other than a
Valuation Date will be determined as of the next Valuation Date.
Valuation Period--The period between two successive Valuation Dates,
commencing at 4:00 p.m., New York City time, on each valuation date and ending
at 4:00 p.m., New York City time, on the next succeeding Valuation Date.
This Prospectus describes only those aspects of the Policy that relate to
the Separate Account since only interests in the Separate Account are being
offered by this Prospectus. Aspects of the Fixed Account are briefly
summarized in order to give a better understanding of how the Policy functions
(see "The Fixed Account").
4
<PAGE>
SUMMARY
...........................................................................
PURPOSE OF SUMMARY
This summary was written to give you an overview of the Policy and is quali-
fied by the more detailed information provided in the prospectus and the Poli-
cy, when issued. You may find it helpful to review the definitions of terms de-
scribed preceding this summary before reading the prospectus in full.
ABOUT METROPOLITAN LIFE
Metropolitan Life, the issuer of the Policies, is a mutual life insurance
company incorporated under the laws of the State of New York in 1866. Its home
office is located at 1 Madison Avenue, New York, New York 10010. MetLife is au-
thorized to transact business in all states of the United States, the District
of Columbia, Puerto Rico, and all Provinces of Canada. Metropolitan Life, serv-
ing millions of people, is one of the largest financial services companies in
the world with many of the largest United States corporations for its clients.
On December 31, 1995, Metropolitan Life had total life insurance in force of
approximately $1.3 trillion and total assets under management of over $179 bil-
lion.
POLICY IN BRIEF
The Policy is issued by Metropolitan Life. It is designed to meet the chang-
ing life insurance needs of a Policy owner. The Policy provides for a choice of
death benefit options, flexible premium payments, and cash value accumulation
through the Policy owner's selected options.
The owner of the Policy may, within limits:
. Select from among three death benefit options
. Increase or decrease the specified face amount
. Choose the amount and frequency of premium payments
. Direct net premium payments to any of eight funding options
. Transfer amounts among the funding options.
PREMIUMS
The Policy owner selects a planned periodic premium payment schedule at the
time of application. A minimum premium payment equal to the target premium must
be paid during each of the first two Policy years. This schedule does not need
to be followed after the first two Policy years; a planned periodic payment may
be skipped, or subject to certain limitations, additional premium payments of
at least $250 may be made. Payment of the planned periodic premium does not
guarantee that the Policy will remain in force after the first two Policy
years. For a Policy to remain in force, the cash surrender value on any monthly
anniversary must be enough to cover the monthly deduction. (See "Payment and
Allocation of Premiums.")
CASH VALUE
The Policy's total cash value includes the Policy value in the Separate Ac-
count, the Fixed Account, and the Policy Loan Account. This value reflects the
investment experience of the Separate Account investment divisions selected,
the interest credited to any allocations to the Fixed Account, loan activity,
partial withdrawals, and Policy charges. There is no guaranteed minimum cash
value if amounts are allocated to the Separate Account. (See "Policy Benefits,"
"Policy Rights" and "The Fixed Account.")
BENEFITS AND RIDERS
A Policy owner has the flexibility to add optional insurance benefits by rid-
er. These riders include spouse term insurance, children's term insurance, ac-
cidental death benefit, disability waiver benefit, and accelerated death bene-
fit. (See "Policy Benefits.")
DEATH BENEFIT OPTIONS
The Policy provides for three death benefit options in most states:
.Option A: the death benefit is the specified face amount of the Policy.
. Option B: the death benefit is equal to the specified face amount of the
Policy plus the cash value on the date of death.
5
<PAGE>
. Option C: available for Policies issued on or after May 1, 1994 where the in-
sured is age 60 or less (not available in Minnesota, Montana, or
South Carolina), the death benefit is equal to the specified face
amount of the Policy plus the cash value on the date of death un-
til the Policy anniversary at age 65; at Policy anniversary age
65, the death benefit is recalculated to equal the specified face
amount plus the cash value on the Policy anniversary at age 65;
the death benefit does not vary after this recalculation.
After the second Policy year, the Policy owner may change the death benefit
option or increase or decrease the specified face amount, subject to certain
conditions and limitations. Such changes can have tax consequences and affect
the charges assessed under the Policy. (See "Policy Benefits.")
THE FIXED ACCOUNT
Fixed Account assets are held in the General Account of Metropolitan Life.
Net premiums allocated to the Fixed Account are credited with an effective an-
nual interest rate of at least 4% per year. (See "The Fixed Account.")
THE SEPARATE ACCOUNT AND THE METROPOLITAN SERIES FUND
Separate Account UL is a separate investment account of Metropolitan Life. It
currently has seven investment divisions. The assets of each division are in-
vested in the corresponding portfolio of the Metropolitan Series Fund, Inc.
There are currently seven portfolios of the Fund available to Policy owners.
Each portfolio of the Fund has a different investment objective and is managed
by Metropolitan Life or an affiliate. (See "Separate Account and Metropolitan
Series Fund," and the prospectus for the Fund, which is attached at the end of
this prospectus.)
THE FUNDING OPTIONS
The available investment divisions of the Separate Account are the Growth,
Income, Money Market, Diversified, Aggressive Growth, Stock Index and Interna-
tional Stock Divisions. The International Stock Division is not available in
California. The Policy owner may allocate the net premiums paid to one or more
of the investment divisions of the Separate Account and/or to the Fixed Ac-
count. Net premiums are equal to the premium paid less premium expense charges.
Unlike the Fixed Account, the investment performance of a Separate Account in-
vestment division is not guaranteed by Metropolitan Life. The Policy owner
should consider his or her risk tolerance before selecting the funding options
for premium payments. A Policy owner may change the allocation of future net
premiums at any time. (See "Separate Account and Metropolitan Series Fund,"
"Payment and Allocation of Premiums," and "The Fixed Account.")
AUTOMATED INVESTMENT STRATEGIES
There are currently three automated investment strategies available. A fourth
strategy is expected to be available on or about July 1, 1996. (See "Payment
and Allocation of Premiums.")
. Equity Generator--If monthly interest earned is at least $20, the inter-
est is transferred from the Fixed Account to the Policy owner's selected
option of either the Stock Index Division or the Aggressive Growth Divi-
sion.*
. Equalizer--At the end of a specified period as determined by Metropolitan
Life (e.g. monthly, quarterly) a transfer is made between the Fixed Ac-
count and the Policy owner's selected option of either the Stock Index
Division or the Aggressive Growth Division* to make them equal in value.
. Allocator--The Policy owner designates a monthly transfer from the Money
Market Division to the Fixed Account and/or any investment division.
. Rebalancer **--Cash value is redistributed quarterly so that it is allo-
cated among the Fixed Account and the investment divisions of the Sepa-
rate Account in the same proportion in which net premiums are allocated.
- --------
* Investment division is expected to be available for these strategies on or
about July 1, 1996
** Strategy is expected to be available on or about July 1, 1996
6
<PAGE>
FUND TRANSFERS AND CHARGES
A Policy owner may transfer amounts among the investment divisions of the
Separate Account and to/from the Fixed Account. Currently there are no charges
assessed for transfers. Metropolitan Life reserves the right to charge up to
$25 for each transfer; however, no charges will be assessed under any of the
automated investment strategies. (See "Payment and Allocation of Premiums," and
"Charges and Deductions.")
PREMIUM EXPENSE CHARGES
A 5 1/2% charge is deducted from each premium payment. The charge includes:
. 2% for front-end sales charges
. 2% for state premium tax charges
. 1 1/2% to recover a portion of Metropolitan Life's federal income taxes.
(See "Charges and Deductions.")
MONTHLY DEDUCTION FROM CASH VALUE
The Policy's cash value is reduced each month by the sum of 1) cost of term
insurance charge, 2) cost of additional riders charge, and 3) administration
charge. (See "Charges and Deductions.")
The monthly administration charge for the first Policy year is $0.25 per
$1,000 of specified face amount plus a base administration charge (deducted
monthly) of:
. $5 for Ages under 18
. $15 for Ages 18 to 49
. $20 for Ages 50 and above.
If the Policy is surrendered during the first Policy year, any remaining
amount of the full year's base administration charge will be deducted upon
surrender.
After the first Policy year, the monthly administration charge is determined
by the specified face amount of the Policy. The charge is:
. $9 for specified face amounts of less than $100,000
. $7 for specified face amounts of $100,000 to $249,999
. $5 for specified face amounts of $250,000 and above.
SEPARATE ACCOUNT CHARGES
A daily charge is made against the Separate Account for mortality and expense
risks assumed by Metropolitan Life. This charge is equivalent to an annual rate
of 0.90% of the average daily value of the assets in the Separate Account at-
tributable to the Policies. (See "Charges and Deductions.")
FUND INVESTMENT MANAGEMENT FEES
Fund investment management fees are a percentage of the average daily value
of the net assets of the portfolios:
. 0.25% for Growth, Income, Stock Index, Money Market, and Diversified Port-
folios
. 0.75% for Aggressive Growth and International Stock Portfolios.
Other direct expenses also are deducted from the portfolios' assets. The av-
erage daily rate of such expenses for the entire Fund in 1995 was .118600%.
(See "Charges and Deductions.")
INCREASE IN SPECIFIED FACE AMOUNT CHARGE
Any increase in the specified face amount requested by a Policy owner will
result in a one-time underwriting expense charge of $5 per thousand dollars of
increase. (See "Policy Benefits.")
SURRENDER AND SURRENDER CHARGES
At any time the Policy owner may request in writing the Policy's cash surren-
der value. A surrender charge is imposed during the first 15 Policy years and
during the first 15 Policy years after an increase in the specified face
amount. (See "Charges and Deductions," and "Policy Rights.")
7
<PAGE>
PARTIAL WITHDRAWAL
Partial withdrawals of at least $250 may be made from the Policy's cash value
without charge. The request must be made in writing. Partial withdrawals under
death benefit Option A or Option C (on or after Policy anniversary 65) will re-
duce the specified face amount of the Policy. (See "Policy Rights.")
LOANS
A Policy owner may obtain a Policy loan whenever the Policy has a loan value.
The loan value equals the cash surrender value less two monthly deductions, or
if greater, 75% of the cash surrender value (90% in Virginia & Maryland). For
Policies issued in Texas, the loan value equals the Policy's cash surrender
value less two monthly deductions or 100% of the cash surrender value in the
Fixed Account and 75% of the cash surrender value in the Separate Account, if
greater. The loan amount is placed into the Policy Loan Account as collateral,
and is credited an interest rate of no less than 4% per year. Currently the
rate credited is 6%. The rate charged on the loan is a fixed rate of 8% per
year. Loan interest is payable at the end of each Policy year. Loans and ac-
crued interest may be repaid at any time prior to the Final Date. (See "Policy
Rights.")
FREE LOOK PERIOD
The Policy owner may return the Policy during the free look period. This pe-
riod is the later of 10 days after receipt of the Policy (except where state
law requires a longer period), 45 days after Part A of the application has been
completed, or 10 days after Metropolitan Life mails the owner a Notice of Free
Look. If the Policy is returned, Metropolitan Life will send the Policy owner a
complete refund of any premiums paid within 7 days. The refund of any premium
paid by check, however, may be delayed until the check has cleared the Policy
owner's bank. There is a similar free look period after an increase in the
specified face amount that applies only to the amount of the increase. This
free look period is the later of 10 days after the owner receives revised Pol-
icy pages reflecting the increase, 45 days after the application for the in-
crease has been completed, or 10 days after Metropolitan Life mails the owner a
Notice of Free Look. During this period, the Policy owner may elect to termi-
nate the face amount increase, and all Policy values will be restored to what
they would have been had the increase not occurred. Metropolitan Life will also
refund the amount of any premiums paid, to the extent necessary for the Policy
to continue to be within the definition of life insurance for federal income
tax purposes. (See "Premium Limitations.")
TAX TREATMENT OF CASH VALUE
Cash value in the Policy is not taxed until it is withdrawn. In general, a
Policy owner will be taxed on the amount of cash value withdrawn that is in ex-
cess of the premiums paid at the time of withdrawal, surrender, or Policy Final
Date. This excess is treated as ordinary income. Special rules govern withdraw-
als and loans from contracts referred to as modified endowment contracts. If a
Policy is part of a collateral assignment equity split-dollar arrangement with
an employer, any increase in cash value may be taxable annually. An individual
should consult with and rely on the advice of a tax advisor with respect to any
type of split-dollar arrangement involving a Policy. (See "Federal Tax Mat-
ters.")
TAX TREATMENT OF THE DEATH BENEFIT
The beneficiary generally will not be taxed on the death benefit proceeds of
the Policy. The death benefit under the Policy may be subject to Federal estate
tax. (See "Federal Tax Matters.")
COMMUNICATIONS
Premium payments and other communications should be sent to the Designated
Office for the Policy. Metropolitan Life may establish different Designated Of-
fices for various Policy transactions. The Policy owner should use the forms
that Metropolitan Life has prepared for these purposes. The forms may be ob-
tained from an account representative or the Designated Office.
A premium payment or other communication is considered received on the date
that it is actually received in the Designated Office (the "Date of Receipt")
with two exceptions: 1) if received on a day that is not a Valuation Date or 2)
if received by other than U.S. mail after 4:00 p.m. New York City time. The
Date of Receipt will then be the next Valuation Date.
8
<PAGE>
...............................................................
SEPARATE ACCOUNT AND METROPOLITAN SERIES FUND
...............................................................................
THE SEPARATE ACCOUNT
The Separate Account, which is a separate investment account of Metropolitan
Life, was established by Metropolitan Life pursuant to the New York Insurance
Law on December 13, 1988. The Separate Account also receives premium payments
in connection with an earlier form of the flexible premium multifunded life
insurance policy, a flexible premium variable life insurance policy and group
variable universal life insurance policies issued by Metropolitan Life. The
assets allocated to the Separate Account are the property of Metropolitan
Life, and Metropolitan Life is not a trustee by reason of the Separate Ac-
count. Metropolitan Life may accumulate in the Separate Account mortality and
expense risk charges, mortality gains and investment gains on those assets
(which represent such charges) in the Separate Account and other amounts in
excess of Metropolitan Life's liabilities and reserves with respect to the
Separate Account.
The Separate Account meets the definition of "separate account" under the
federal securities laws. All income, gains and losses, whether or not real-
ized, from assets allocated to the Separate Account are credited to or charged
against the Separate Account without regard to other income, gains or losses
of Metropolitan Life. Each Policy provides that such portion of the assets in
the Separate Account as equals the liabilities (and reserves) of Metropolitan
Life with respect to the Separate Account shall not be chargeable with liabil-
ities arising out of any other business of Metropolitan Life. Metropolitan
Life may from time to time transfer to its General Account any assets in the
Separate Account in excess of such reserves and liabilities. The liabilities
are Metropolitan Life's total commitments under the Policies; the reserves are
the assets allocated to pay these commitments.
Although the Separate Account is an integral part of Metropolitan Life, the
Separate Account is registered with the Securities and Exchange Commission as
a unit investment trust under the Investment Company Act of 1940 ("1940 Act").
Registration does not involve supervision of management or investment prac-
tices or policies of the Separate Account or of Metropolitan Life by the Com-
mission.
There are currently seven investment divisions in the Separate Account. The
assets in each investment division are invested in a separate class (or se-
ries) of stock issued by the Fund. Each class of stock represents a separate
portfolio within the Fund. New investment divisions may be added as new port-
folios are added to the Fund and made available to Policy owners. In addition,
investment divisions may be eliminated from the Separate Account. The owner of
a Policy may designate how the net premiums under the Policy are to be allo-
cated among the then current investment divisions.
METROPOLITAN SERIES FUND
The Fund is a "series" type of mutual fund which is registered with the Se-
curities and Exchange Commission as a diversified open-end management invest-
ment company under the 1940 Act. The Fund has served as the investment medium
for the Separate Account since the Separate Account commenced operations. A
brief summary of the investment objectives of each Fund portfolio presently
available to Policy owners is set forth below.
Growth Portfolio. The investment objective of this portfolio is to achieve
long-term growth of capital and income, and moderate current income, by in-
vesting primarily in common stocks that are believed to be of good quality or
to have good growth potential or which are considered to be undervalued based
on historical investment standards.
Income Portfolio. The investment objective of this portfolio is to achieve
the highest possible total return, by combining current income with capital
gains, consistent with prudent investment risk and the preservation of capi-
tal, by investing primarily in fixed-income, high-quality debt securities.
Money Market Portfolio. The investment objective of this portfolio is to
achieve the highest possible current income consistent with the preservation
of capital and maintenance of liquidity, by investing primarily in short-term
money market instruments.
Diversified Portfolio. The investment objective of this portfolio is to
achieve a high total return while attempting to limit investment risk and pre-
serve capital by investing in equity securities, fixed-income debt securities,
or short-term money market instruments, or any combination thereof, at the
discretion of State Street Research.
Aggressive Growth Portfolio. The investment objective of this portfolio is
to achieve maximum capital appreciation by investing primarily in common
stocks (and equity and debt securities convertible into or carrying the
right to acquire common stocks) of emerging growth companies, undervalued se-
curities or special situations.
International Stock Portfolio. The investment objective of this portfolio is
to achieve long-term growth of capital by investing primarily in common stocks
and eq-
9
<PAGE>
...............................................................
uity-related securities of non-United States companies. This portfolio is not
available in connection with Policies issued in California.
Stock Index Portfolio. The investment objective of this portfolio is to equal
the performance of the Standard & Poor's 500 Composite Stock Price Index (ad-
justed to assume reinvestment of dividends) by investing in the common stock of
companies which are included in the index.
Metropolitan Life acts as the investment manager for the Fund; State Street
Research, a wholly-owned subsidiary of Metropolitan Life, provides sub-invest-
ment management services with respect to the Growth, Income, Diversified and
Aggressive Growth Portfolios; and GFM, a subsidiary of Metropolitan Life, pro-
vides sub-investment management services with respect to the International
Stock Portfolio.
Metropolitan Life purchases and redeems Fund shares for the Separate Account
at their net asset value without the imposition of any sales or redemption
charges. Such shares represent an interest in one of the portfolios of the Fund
which correspond to the investment divisions of the Separate Account. Any divi-
dend or capital gain distributions received from the Fund are likewise rein-
vested in Fund shares at net asset value as of the dates paid. The distribu-
tions have the effect of reducing the value of each share of the Fund and in-
creasing the number of Fund shares outstanding. However, the total cash value
in the Separate Account does not change as a result of such distributions.
On each Valuation Date, shares of each portfolio are purchased or redeemed by
Metropolitan Life for the Separate Account, based on, among other things, the
amounts of net premiums allocated to the Separate Account, dividends and dis-
tributions reinvested, transfers to and among investment divisions, Policy
loans, loan repayments and benefit payments to be effected pursuant to the
terms of the Policies as of that date. Such purchases and redemptions for the
Separate Account are effected at the net asset value per share for each portfo-
lio determined as of 4:00 p.m., New York City time, on that same Valuation
Date.
A full description of the Fund, its investment policies and restrictions, its
charges and other aspects of its operation is contained in the prospectus for
the Fund, which is attached at the end of this Prospectus, and in the Statement
of Additional Information referred to therein. See "The Fund and its Purpose,"
in the prospectus for the Fund for a discussion of the different separate ac-
counts of Metropolitan Life and its affiliates that invest in the Fund and the
risks related thereto.
POLICY BENEFITS
................................................................................
The discussion below assumes that no riders under the Policy are in effect.
See the Appendix to Prospectus, for a discussion of how certain riders can af-
fect benefits under the Policy.
DEATH BENEFITS
As long as the Policy remains in force (see "Policy Termination and Rein-
statement--Termination"), Metropolitan Life will, upon due proof of the
insured's death, pay the insurance proceeds of the Policy to the named benefi-
ciary. The proceeds may be received by the beneficiary in a single sum or under
one or more of the optional income plans set forth in the Policy (see "Optional
Income Plans").
The insurance proceeds are: The death benefit provided under Option A, Option
B or Option C, whichever is elected and in effect on the date of death; plus
(b) any additional insurance on the insured's life that is provided by rider;
minus (c) any outstanding indebtedness and any due and unpaid charges accruing
during the grace period.
DEATH BENEFIT OPTIONS
At least two death benefit options are available as described below: Option A
and Option B. Death Benefit Option C is also available in certain states where
the insured is age 60 or less, for Policies issued on and after May 1, 1994.
The Policy owner designates the desired option in the application and can
change the option by written request after the second Policy year (see "Change
in Death Benefit Option").
Option A--The death benefit is equal to the specified face amount of insur-
ance.
Option B--The death benefit is equal to the specified face amount of insur-
ance plus the cash value.
Option C--The death benefit is equal to the specified face amount of insur-
ance plus the cash value if the insured dies prior to policy anniversary 65. At
policy anniversary 65, the specified face amount of insurance is recalculated
to equal the specified face amount of insurance plus the cash value as of the
end of the prior day. Thereafter, the specified face amount of insurance will
be paid upon death. This option may not be available in all states.
Minimum Death Benefit--Under Option A, Option B or Option C, there is a mini-
mum death benefit equal to the greater of (1) the death benefit option chosen
and (2) a percentage of the cash value as set forth in the following table. The
minimum death benefit is determined in accordance with federal income tax laws,
to ensure that the Policy qualifies as a life insurance contract and that the
insurance proceeds will be excluded from the gross income of the beneficiary.
10
<PAGE>
...............................................................
<TABLE>
<CAPTION>
ATTAINED AGE
OF INSURED AT
BEGINNING OF POLICY PERCENTAGE OF
YEAR CASH VALUE
------------------- -------------
<S> <C>
40 and less: ................................................... 250%
45: ............................................................ 215%
50: ............................................................ 185%
55: ............................................................ 150%
60: ............................................................ 130%
65: ............................................................ 120%
70: ............................................................ 115%
75: ............................................................ 105%
80: ............................................................ 105%
85: ............................................................ 105%
90: ............................................................ 105%
95: ............................................................ 100%
</TABLE>
For the ages not listed, the percentage shall decrease by a ratable portion
for each full year.
In no event will the death benefit be lower than the minimum amount required
to maintain the Policy as life insurance under federal income tax law and ap-
plicable Internal Revenue Service rules.
Option A, Option B, and Option C all provide insurance protection as well as
possible build-up of cash value. Under Option A, and under Option C on or af-
ter policy anniversary 65, the insurance coverage remains level unless the
minimum death benefit applies. Under Option B, and under Option C prior to
policy anniversary 65, the insurance protection varies as the cash value
changes.
For a given specified face amount, the amount of the death benefit will be
greater under Option B, and under Option C prior to policy anniversary 65,
than under Option A, and under Option C on or after policy anniversary 65,
since the cash value is added to the specified face amount and included in the
death benefit under the former situations but not under the latter situations.
By the same token, the cost of term insurance included in the monthly deduc-
tion (see "Charges and Deductions--Cost of Term Insurance") will be greater,
and thus the accumulation of cash value will be lower under Option B, and un-
der Option C prior to policy anniversary 65, than under Option A assuming the
same specified face amount and the same actual premiums paid. After policy an-
niversary 65, the cost of term insurance will be greater for Option B than for
Option C and greater for Option C than for Option A, assuming the same speci-
fied face amount at issue and the same premiums paid.
Under Option C the death benefit is designed to increase during the Policy
owner's earning years because the need for life insurance is presumed to in-
crease with increasing income. On policy anniversary 65, which is the assumed
retirement age, the specified face amount is adjusted to equal the then cur-
rent level of death ben-efit and no further increases in death benefit are
made, since presumably such increases are no longer required. As a result, the
target premiums for Option C are lower than would be required under Option B
which is designed to have an increasing death benefit until the Policy ma-
tures.
Illustration of Option A. For purposes of this illustration, assume that the
insured is under the age of 40, that there is no outstanding indebtedness and
that the insured has not died during a grace period (see "Policy Termination
and Reinstatement--Termination").
Under Option A, a Policy with a $100,000 specified face amount will gener-
ally pay $100,000 in death benefits. However, because the death benefit must
be equal to or be greater than 250% of cash value, any time the cash value of
this Policy exceeds $40,000, the death benefit will exceed the $100,000 speci-
fied face amount. Each additional dollar of cash value above $40,000 will in-
crease the death benefit (assuming the insured is age 40 or less) by $2.50.
Thus a Policy with a cash value of $50,000 will have a death benefit of
$125,000 (250% X $50,000); a cash value of $60,000 will yield a death benefit
of $150,000 (250% X $60,000); and a cash value of $100,000 will yield a death
benefit of $250,000 (250% X $100,000).
Similarly, so long as cash value exceeds $40,000, each dollar reduction in
cash value will reduce the death benefit (assuming the insured is age 40 or
less) by $2.50. If at any time, however, the cash value multiplied by the ap-
plicable percentage is less than the specified face amount, the death benefit
will equal the specified face amount of the Policy.
Illustration of Option B. For purposes of this illustration, assume that the
insured is under the age of 40, that there is no outstanding indebtedness and
that the insured has not died during a grace period.
Under Option B, a Policy with a specified face amount of $100,000 will gen-
erally pay a death benefit of $100,000 plus the cash value. Thus, for example,
a Policy with a cash value of $25,000 will have a death benefit of $125,000
($100,000 + $25,000); a cash value of $50,000 will yield a death benefit of
$150,000 ($100,000 + $50,000); and a cash value of $65,000 will yield a death
benefit of $165,000 ($100,000 + $65,000). The death benefit, however, must be
at least 250% of cash value. As a result, if the cash value of the Policy ex-
ceeds $66,666.67, the death benefit will be greater than the specified face
amount plus cash value. Each additional dollar of cash value above $66,666.67
will increase the death benefit (assuming the insured is age 40 or less) by
$2.50. A Policy with a cash value of $75,000 will therefore have a death bene-
fit of $187,500 (250% X
11
<PAGE>
...............................................................
$75,000); a cash value of $85,000 will yield a death benefit of $212,500 (250%
X $85,000); a cash value of $100,000 will yield a death benefit of $250,000
(250% X $100,000).
Similarly, any time cash value exceeds $66,666.67, each dollar taken out of
cash value will reduce the death benefit (assuming the insured is age 40 or
less) by $2.50. Whenever cash value is less than $66,666.67 each dollar taken
out of cash value will reduce the death benefit by one dollar and the death
benefit will be the specified face amount plus the cash value of the Policy.
Illustration of Option C. Under Option C prior to policy anniversary 65, the
death benefit will work the same way as under Option B. On and after policy
anniversary 65, the specified face amount would have already been adjusted to
include the cash value of the Policy at policy anniversary 65 and the death
benefit will work the same way as under Option A.
If the insured dies on a date that is not a Valuation Date, the amount of
death benefit proceeds payable will be determined as of the next Valuation
Date.
Change in Specified Face Amount. Subject to certain limitations, a Policy
owner, after the second Policy year and before the insured reaches Age 80, may
increase or decrease the specified face amount of a Policy (see "Decreases"
and "Increases," below). Any increase or decrease in the specified face amount
requested by the Policy owner will become effective on the monthly anniversary
on or next following the Date of Receipt of the request, or, if evidence of
insurability is required, the date of approval of the request.
Decreases. The specified face amount remaining in force after any requested
decrease may not be less than the Minimum Initial Specified Face Amount during
the first five Policy years nor less than one-half the Minimum Initial Speci-
fied Face Amount thereafter. However, no decrease in specified face amount
will be permitted that would reduce the specified face amount below $25,000.
No decrease in the specified face amount will be permitted if it would result
in total premiums paid exceeding the then current maximum premium limitations
determined by Internal Revenue Code rules (see "Premiums--Premium Limita-
tions"). For purposes of determining the cost of term insurance charge (see
"Charges and Deductions--Cost of Term Insurance," "Cost of Term Insurance
Rate" and "Rate Class"), a decrease in the specified face amount will reduce
the specified face amount in the following order: (a) the specified face
amount provided by the most recent increase; (b) the next most recent in-
creases successively; and (c) the specified face amount when the Policy was
issued.
Increases. Any change in the specified face amount requested by the Policy
owner which results in an increase in the death benefit may be made only if
the cash surrender value after the change is large enough to cover at least
two monthly deductions based on the most recent cost of term insurance charge
deducted. The minimum amount of an increase is $5,000. Any such change will
require that additional evidence of insurability be submitted to Metropolitan
Life and will be subject to a one-time underwriting charge at a rate of $5.00
for each $1,000 of specified face amount increase. For example, if the speci-
fied face amount increase amounted to $25,500, the charge would be $127.50.
Metropolitan Life will deduct this charge from the existing cash value in the
Fixed Account and the investment divisions of the Separate Account in the same
proportion that the Policy's cash value in the Fixed Account and the Policy's
cash value in each investment division bear to the Policy's total cash value
(except for the cash value in the Policy Loan Account) as of the Date of Re-
ceipt of the request (this method hereinafter referred to as the "Pro Rata Ba-
sis").
Effect of Changes in Specified Face Amount on Charges. A change in the spec-
ified face amount may affect the net amount at risk which may affect a Policy
owner's cost of term insurance charge and the monthly administration charge
(see "Charges and Deductions--Cost of Term Insurance," "Cost of Term Insurance
Rate," "Rate Class," and "Monthly Policy Charges"). This in turn can affect
the level of subsequent cash values and death benefits. A change in the speci-
fied face amount may also affect the Policy's status as a modified endowment
contract for tax purposes (see "Federal Tax Matters"). Finally, an increase in
the specified face amount can result in additional surrender charges (see
"Charges and Deductions--Surrender Charge").
Change in Death Benefit Option. Generally, the death benefit option in ef-
fect may be changed at any time after the second Policy year while the insured
is alive to any other available death benefit option by sending a written re-
quest for change to the Designated Office. A change from Option A or Option B
to Option C will only be permitted for Policy owners who have Policies under
which Option C is available. In addition, a change to Option C will not be
permitted after the policy anniversary on which the insured is age 60. A
change in death benefit option will not be permitted unless the cash surrender
value of a Policy after the change is effected would be sufficient to pay at
least two monthly deductions. Changing death benefit options will not require
evidence of insurability satisfactory to Metropolitan Life and the effective
date of any such change will be the monthly anniversary on or following the
Date of Receipt of the request.
If the death benefit option is changed from Option B, or Option C prior to
policy anniversary 65, to Option A,
12
<PAGE>
...............................................................
the specified face amount will be increased to equal the death benefit which
would have been payable under Option B on the effective date of the change.
The death benefit will not be altered at the time of the change. However, the
change in death benefit option will affect the determination of the death ben-
efit from that point on since the cash value will no longer be added to the
specified face amount in determining the death benefit. From that point on,
the death benefit will equal the new specified face amount (or, if higher, the
minimum death benefit). This will mean that the cost of term insurance may be
higher or lower than it otherwise would have been since any increases or de-
creases in cash values will, respectively, reduce or increase the term insur-
ance amount under Option A (see "Charges and Deductions--Cost of Term Insur-
ance").
If the death benefit option is changed from Option A, or Option C on and af-
ter policy anniversary 65, to Option B, the specified face amount will be de-
creased to equal the death benefit less the cash value on the effective date
of the change. Similarly, if the death benefit is changed from Option A to Op-
tion C (when permitted) the specified face amount will be decreased to equal
the death benefit less the cash value on the effective date of the change.
Neither of these changes may be made if it would result in a specified face
amount which is less than the Minimum Initial Specified Face Amount during the
first five Policy years and one-half the Minimum Initial Specified Face Amount
thereafter. In no case will a change be made if it would result in a specified
face amount of less than $25,000. As with a change from Option B, or Option C
prior to policy anniversary 65, to Option A, a change from Option A, or Option
C on and after policy anniversary 65, to Option B will not alter the death
benefit at the time of the change, but will affect the determination of the
death benefit from that point on. Since, from that point on, the cash value
will be added to the new specified face amount, the death benefit will vary
with the cash value. This is also the case with a change from Option A to Op-
tion C (when permitted). Moreover, under Option B, or Option C prior to policy
anniversary 65, the term insurance amount will not vary unless the minimum
death benefit is in effect. Therefore, the cost of term insurance may be
higher or lower than it otherwise would have been without the change in death
benefit option (see "Charges and Deductions--Cost of Term Insurance"). A
change in death benefit option will not be permitted if it results in total
premiums paid exceeding the then current maximum premium limitations deter-
mined by Internal Revenue Service Rules (see "Premiums--Premium Limitations").
If the death benefit option is changed from Option B to Option C (when per-
mitted), from Option C to Option A on or after policy anniversary 65, or from
Option C to Option B prior to policy anniversary 65, no change in specified
face amount will be made.
Under Option A, Option B and Option C, cost of term insurance rates gener-
ally increase as the insured's age increases. Nevertheless, assuming a posi-
tive cumulative net investment return with respect to any amounts in the Sepa-
rate Account, changing the death benefit option from Option B, or Option C
prior to policy anniversary 65, to Option A will reduce the term insurance
amount and therefore the cost of term insurance charge for all subsequent
monthly deductions compared to what such charge would have been if no such
change were made.
A change in the death benefit option may also affect the monthly administra-
tion charge (see "Charges and Deductions--Monthly Policy Charges").
CASH VALUE
The total cash value of a Policy at any time is the sum of the Policy's cash
values in the Fixed Account (see "The Fixed Account"), the Policy Loan Account
(see "Policy Rights--Loan Privileges"), and the investment divisions of the
Separate Account at such time. The Policy's cash value in the Separate Account
may increase or decrease on each Valuation Date depending on the investment
return of the chosen investment divisions of the Separate Account (see "Sepa-
rate Account Net Investment Return"). There is no guaranteed minimum cash
value in the Separate Account.
Calculation of Separate Account Cash Value. On the Investment Start Date,
the Policy's cash value in an investment division will equal the portion of
any net premium allocated to the investment division, reduced by the portion
of the first monthly deduction allocated to the Policy's cash value in that
investment division (see "Payment and Allocation of Premiums--Allocation of
Premiums and Cash Value"). Thereafter, on each Valuation Date, the Policy's
cash value in an investment division of the Separate Account will equal:
(1) The cumulative net premium payments allocated to the investment division;
plus
(2) All cash values transferred to the investment division from the Fixed Ac-
count, from the Policy Loan Account upon loan repayment (including all in-
terest credited on loaned amounts) or from another investment division;
minus
(3) Any cash value transferred from the investment division to the Fixed Ac-
count, to the Policy Loan Account upon taking out a loan or to another in-
vestment division; minus
(4) Any partial cash withdrawal from the investment division; minus
13
<PAGE>
...............................................................
(5) The portion of the cumulative monthly deductions allocated to the Policy's
cash value in the investment division (see "Charges and Deductions--
Monthly Deduction from Cash Value"); minus
(6) The portion of any transfer charge allocated to the Policy's cash value in
the investment division (see "Charges and Deductions--Transfer Charge");
plus
(7) The cumulative net investment return (discussed below) on the net amount
of cash value in the investment division.
The Policy's total cash value in the Separate Account equals the sum of the
Policy's cash value in each investment division.
Separate Account Net Investment Return. A Separate Account investment divi-
sion's net investment return is determined as of 4:00 p.m., New York City
time, on each Valuation Date. All transactions and calculations with respect
to the Policies as of any Valuation Date are determined as of such time.
Each Separate Account division is credited with a rate of net investment re-
turn equal to its gross rate of investment return during the Valuation Period
less (1) an adjustment for the Separate Account's charge for mortality and ex-
pense risks (equivalent to .90% on an annual basis) and (2) a charge for Met-
ropolitan Life's taxes, if any such tax charge becomes necessary in the future
(see "Charges and Deductions--Charges Against the Separate Account"). The in-
vestment division's gross rate of investment return is equal to the rate of
increase or decrease in the net asset value per share of the underlying Fund
portfolio over the Valuation Period, adjusted upward to take appropriate ac-
count of any dividends paid by the portfolio during the period.
Depending primarily on the investment experience of the underlying Fund
portfolio, a Separate Account investment division's net investment return may
be either positive or negative during a Valuation Period.
Index of Investment Experience. The index of investment experience measures
changes in each investment division's investment experience during a Valuation
Period. Each investment division has its own distinct index. The index for
each investment division was set at $10.00 when it first began operations. On
May 1, 1990, all the divisions except the division which invests in the Inter-
national Stock Portfolio of the Fund, the division which invests in the Stock
Index Portfolio of the Fund and the division which invests in the Aggressive
Growth Portfolio of the Fund were available to receive net premium payments.
The division which invests in the International Stock Portfolio was available
(except in California) to receive net premium payments on July 1, 1991, the
division which invests in the Stock Index Portfolio was available to receive
net premium payments on May 1, 1992 and the division which invests in the Ag-
gressive Growth Portfolio was available to receive net premium payments on
April 30, 1993. In determining an investment division's index for a Valuation
Period, the index for the preceding Valuation Period is multiplied by the net
investment return of the investment division for the current period. As indi-
cated in "Calculation of Separate Account Cash Value," other factors in addi-
tion to investment experience affect the cash value and death benefit of a
particular Policy. Thus, the index of investment experience for each invest-
ment division does not reflect charges against premiums and cost of term in-
surance and monthly Policy charges. See "Charges and Deductions--Premium Ex-
pense Charges," and "Monthly Deduction from Cash Value". Also, the index of
investment experience is based on historical information and does not repre-
sent what may happen in the future.
Rates of Return and Index Values. The following rates of return for the Sep-
arate Account investment divisions reflect all charges against the Separate
Account and the Fund but do not reflect charges against premiums or cost of
term insurance and monthly Policy charges (see "Charges and Deductions--Pre-
mium Expense Charges," and "Monthly Deduction from Cash Value"). The rate of
return is computed in each case by subtracting the value of the index of in-
vestment experience of the investment division (see above) at the beginning of
the period from the value of said index at the end of the period and dividing
the result by the value of said index at the beginning of the period. The Av-
erage Annual Return is determined by dividing the value of the index of in-
vestment experience of each investment division at the end of the period by
the value of said index at the beginning of the period. The resulting ratio is
annualized to obtain the Average Annual Return shown. The annualization makes
the assumption that the rate of return does not vary from any one year period
to another and takes into account the effect of compounding.
14
<PAGE>
The first rates of return column shown for each investment division begins
on the later of the date the portfolio of the Fund in which it invests began
operations and the date the first registration statement relating to such
portfolio was declared effective by the Securities and Exchange Commission and
ends on the date indicated. Other periods shown begin on January 1st of the
following year and end on December 31st of that year, except that the Average
Annual Return column is for the entire period shown for the division in
question. Thus the rates of return are based on the actual historical
experience of the Fund as if the Separate Account investment division had been
in existence on the dates indicated. The computation of index values for an
investment division prior to the time it was first available to receive net
premium payments are based on monthly figures. The annual return and index
values for the International Stock investment division were increased due to
the voluntary assumption by Metropolitan Life of certain expenses for the
International Stock Portfolio of the Fund in 1993 (see "Management of the
Fund," in the prospectus for the Fund). This subsidization affected average
annual returns only by .01%. There was no subsidization in 1994 or 1995.
<TABLE>
<CAPTION>
INDEX VALUES
6/24/83 12/31/83 12/31/84 12/31/85 12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth.......... $4.89 $4.64 $4.63 $6.18 $6.75 $7.07 $7.70 $10.68 $ 9.53 $12.58 $13.91 $15.77 $15.04
Income.......... $5.09 $5.16 $5.82 $7.34 $8.70 $8.45 $9.15 $10.29 $11.21 $13.05 $13.83 $15.25 $14.62
Money Market.... $6.20 $6.48 $7.09 $7.60 $8.04 $8.46 $9.02 $ 9.77 $10.48 $11.02 $11.32 $11.55 $11.89
<CAPTION>
7/25/86 12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Diversified............................... $7.50 $7.73 $7.93 $8.56 $10.46 $10.27 $12.72 $13.80 $15.43 $14.76
<CAPTION>
5/1/90 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Stock Index................................................................... $ 7.70 $ 7.81 $10.04 $10.69 $11.61 $11.64
<CAPTION>
4/29/88 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth........................................... $4.47 $4.65 $ 6.13 $ 5.38 $ 8.88 $ 9.72 $11.81 $11.29
<CAPTION>
5/1/91 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
International Stock.................................................................... $10.86 $10.63 $ 9.46 $13.86 $14.34
</TABLE>
<TABLE>
<CAPTION>
INDEX VALUES
12/31/95
--------
<S> <C>
Growth........................................................................ $20.05
Income........................................................................ $17.34
Money Market.................................................................. $12.44
<CAPTION>
12/31/95
--------
<S> <C>
Diversified................................................................... $18.71
<CAPTION>
12/31/95
--------
<S> <C>
Stock Index................................................................... $15.91
<CAPTION>
12/31/95
--------
<S> <C>
Aggressive Growth............................................................. $14.66
<CAPTION>
12/31/95
--------
<S> <C>
International Stock............................................................ $14.47
</TABLE>
<TABLE>
<CAPTION>
RATES 0F RETURN
6/24/83- 1/1/84- 1/1/85- 1/1/86- 1/1/87- 1/1/88- 1/1/89- 1/1/90- 1/1/91- 1/1/92- 1/1/93- 1/1/94-
12/31/83 12/31/84 12/31/85 12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth........ -5.05% -0.29% 33.60% 9.21% 4.73% 8.89% 38.71% -10.78% 31.99% 10.58% 13.39% -4.61%
Income........ 1.52% 12.81% 26.07% 18.52% -2.86% 8.26% 12.41% 9.00% 16.38% 5.94% 10.33% -4.19%
Money Market.. 4.37% 9.48% 7.17% 5.76% 5.28% 6.67% 8.27% 7.22% 5.15% 2.80% 1.98% 2.96%
</TABLE>
<TABLE>
<CAPTION>
RATES 0F RETURN
AVERAGE
1/1/95- ANNUAL
12/31/95 RETURN
-------- -------
<S> <C> <C>
Growth........................... 33.30% 11.93%
Income........................... 18.63% 10.29%
Money Market..................... 4.61% 5.71%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE
7/25/86- 1/1/87- 1/1/88- 1/1/89- 1/1/90- 1/1/91- 1/1/92- 1/1/93- 1/1/94- 1/1/95- ANNUAL
12/31/86 12/31/87 12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 RETURN
-------- -------- -------- -------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Diversified.... 3.01% 2.62% 7.90% 22.16% -1.78% 23.83% 8.51% 11.78% -4.30% 26.73% 10.16%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE
5/1/90- 1/1/91- 1/1/92- 1/1/93- 1/1/94- 1/1/95- ANNUAL
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 RETURN
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Stock Index................ 1.34% 28.60% 6.48% 8.57% 0.24% 36.72% 13.64%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE
4/29/88- 1/1/89- 1/1/90- 1/1/91- 1/1/92- 1/1/93- 1/1/94- 1/1/95- ANNUAL
12/31/88 12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 RETURN
-------- -------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth...... 3.99% 31.92% -12.14% 64.97% 9.38% 21.57% -4.38% 29.83% 16.75%
<CAPTION>
AVERAGE
5/1/91- 1/1/92- 1/1/93- 1/1/94- 1/1/95- ANNUAL
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 RETURN
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
International Stock............................... -2.14% -11.01% 46.44% 3.52% 0.90% 6.33%
</TABLE>
15
<PAGE>
...............................................................
Illustrations. In order to demonstrate how the investment experience of the
Separate Account investment divisions would have affected the death benefit,
cash value and cash surrender value of a Policy, hypothetical illustrations for
each investment division are set forth below. These hypothetical illustrations
are based on the actual historical experience of the Fund as if the Separate
Account had been in existence and a Policy had been issued on the dates indi-
cated. They do not represent what may happen in the future.
The illustrations are based on the payment of annual planned premiums of
$1,000 for a specified face amount of $100,000 for a male aged 25. The illus-
trations assume that the insured is in Metropolitan Life's standard nonsmoker
underwriting risk classification. The periods illustrated are based on the
rates of return for such periods set forth in "Rates of Return and Index Val-
ues" above.
The amounts shown for the death benefits, cash values and cash surrender val-
ues take into account the charges against premiums and cost of term insurance
and monthly Policy charges, as well as the daily charge against the Separate
Account for mortality and expense risks equivalent to an effective annual rate
of .90% of the average daily value of the assets in the Separate Account at-
tributable to the Policies, the daily charges to the Fund for direct Fund ex-
penses and the daily charge to the Fund for investment management services
equivalent to an annual rate of .25% of the average daily value of the aggre-
gate net assets of the Growth, Income, Money Market, Diversified and Stock In-
dex Portfolios of the Fund and .75% of the average daily value of the aggregate
net assets of the International Stock and Aggressive Growth Portfolios of the
Fund. (See "Charges and Deductions.")
For each investment division, one illustration is based on the guaranteed
cost of term insurance rates, the other illustration is based as if the current
cost of term insurance rates were in effect during the period illustrated (see
"Monthly Deduction From Cash Value--Cost of Term Insurance Rate").
These examples of Policy performance are for a specific age, sex, risk class,
premium payment pattern and policy anniversary as set forth above. The benefits
are calculated for a specific policy anniversary. The amount and timing of pre-
mium payments would affect individual policy benefits as would any withdrawals
or Policy loans.
Performance may be shown for the automated investment strategies made avail-
able under the Policies (see "Allocation of Premiums and Cash Value--Automated
Investment Strategies"). Average annual return for each of the automated in-
vestment strategies may be calculated by presuming a certain dollar value at
the beginning of a period, and comparing this dollar value with the dollar val-
ue, based on historical performance for the applicable investment divisions or
the Fixed Account, at the end of the period, expressed as a percentage. The av-
erage annual return in each case will assume that no withdrawals have occurred
and will not reflect charges against premiums, cost of term insurance or
monthly policy charges.
This Prospectus also contains illustrations based on hypothetical rates of
return. See "Illustrations Of Death Benefits, Cash Values, Cash Surrender Val-
ues And Accumulated Premiums."
16
<PAGE>
The following examples show how the hypothetical net return of each
investment division which invests in the corresponding portfolio of the Fund
would have affected benefits for a Policy issued on the January 1 immediately
following the effective date of such portfolio. These examples assume that net
premiums and related cash values were in the applicable investment division
for the entire period.
GROWTH
BASED ON CURRENT CHARGES
<TABLE>
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,388 $100,388 $ 388 $ 388 $ 388 $ 88* $ 0* $ 0*
1986................... 100,000 101,593 101,593 1,595 1,593 1,593 1,295* 893* 1,093*
1987................... 100,000 102,605 102,605 2,609 2,605 2,605 2,309 2,005 2,105
1988................... 100,000 103,555 103,555 3,562 3,555 3,555 3,262 2,955 3,055
1989................... 100,000 104,733 104,733 4,744 4,733 4,733 4,444 4,133 4,233
1990................... 100,000 107,684 107,684 7,706 7,684 7,684 7,506 7,184 7,284
1991................... 100,000 107,549 107,549 7,574 7,549 7,549 7,374 7,049 7,149
1992................... 100,000 111,026 111,026 11,067 11,026 11,026 10,867 10,626 10,726
1993................... 100,000 113,069 113,069 13,125 13,069 13,069 12,925 12,669 12,769
1994................... 100,000 115,703 115,703 15,781 15,703 15,703 15,581 15,403 15,403
1995................... 100,000 115,710 115,710 15,799 15,710 15,710 15,699 15,410 15,510
1996................... 100,000 121,996 121,996 22,135 21,996 21,996 22,035 21,796 21,796
GROWTH
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,289 $100,289 $ 290 $ 289 $ 289 $ 0* $ 0* $ 0*
1986................... 100,000 101,349 101,349 1,353 1,349 1,349 1,053* 649* 849*
1987................... 100,000 102,238 102,238 2,246 2,238 2,238 1,946 1,638 1,738
1988................... 100,000 103,073 103,073 3,087 3,073 3,073 2,787 2,473 2,573
1989................... 100,000 104,108 104,108 4,131 4,108 4,108 3,831 3,508 3,608
1990................... 100,000 106,699 106,699 6,742 6,699 6,699 6,542 6,199 6,299
1991................... 100,000 106,572 106,572 6,623 6,572 6,572 6,423 6,072 6,172
1992................... 100,000 109,606 109,606 9,692 9,606 9,606 9,492 9,206 9,306
1993................... 100,000 111,373 111,373 11,490 11,373 11,373 11,290 10,973 11,073
1994................... 100,000 113,658 113,658 13,820 13,658 13,658 13,620 13,358 13,358
1995................... 100,000 113,637 113,637 13,822 13,637 13,637 13,722 13,337 13,437
1996................... 100,000 119,068 119,068 19,359 19,068 19,068 19,259 18,868 18,868
INCOME
BASED ON CURRENT CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,473 $100,473 $ 473 $ 473 $ 473 $ 173* $ 0* $ 0*
1986................... 100,000 101,606 101,606 1,608 1,606 1,606 1,308* 906* 1,106*
1987................... 100,000 102,849 102,849 2,854 2,849 2,849 2,554 2,249 2,349
1988................... 100,000 103,529 103,529 3,536 3,529 3,529 3,236 2,929 3,029
1989................... 100,000 104,677 104,677 4,688 4,677 4,677 4,388 4,077 4,177
1990................... 100,000 106,150 106,150 6,167 6,150 6,150 5,967 5,650 5,750
1991................... 100,000 107,566 107,566 7,591 7,566 7,566 7,391 7,066 7,166
1992................... 100,000 109,732 109,732 9,769 9,732 9,732 9,569 9,332 9,432
1993................... 100,000 111,147 111,147 11,194 11,147 11,147 10,994 10,747 10,847
1994................... 100,000 113,156 113,156 13,221 13,156 13,156 13,021 12,856 12,856
1995................... 100,000 113,340 113,340 13,413 13,340 13,340 13,313 13,040 13,140
1996................... 100,000 116,754 116,754 16,857 16,754 16,754 16,757 16,554 16,554
</TABLE>
- -------
*The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate and
the amount a Policy owner may borrow or partially withdraw. If the Policy were
to terminate or be fully surrendered, a refund of excess sales charges may be
paid (see "Surrender Charge--Excess Sales Charge").
17
<PAGE>
INCOME
BASED ON GUARANTEED CHARGES
<TABLE>
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,367 $100,367 $ 368 $ 367 $ 367 $ 68* $ 0* $ 0*
1986................... 100,000 101,364 101,364 1,368 1,364 1,364 1,068* 664* 864*
1987................... 100,000 102,457 102,457 2,466 2,457 2,457 2,166 1,857 1,957
1988................... 100,000 103,055 103,055 3,069 3,055 3,055 2,769 2,455 2,555
1989................... 100,000 104,064 104,064 4,087 4,064 4,064 3,787 3,464 3,564
1990................... 100,000 105,355 105,355 5,390 5,355 5,355 5,190 4,855 4,955
1991................... 100,000 106,591 106,591 6,641 6,591 6,591 6,441 6,091 6,191
1992................... 100,000 108,476 108,476 8,551 8,476 8,476 8,351 8,076 8,176
1993................... 100,000 109,693 109,693 9,792 9,693 9,693 9,592 9,293 9,393
1994................... 100,000 111,432 111,432 11,565 11,432 11,432 11,365 11,132 11,132
1995................... 100,000 111,565 111,565 11,718 11,565 11,565 11,618 11,265 11,365
1996................... 100,000 114,494 114,494 14,710 14,494 14,494 14,610 14,294 14,294
MONEY MARKET
BASED ON CURRENT CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,451 $100,451 $ 452 $ 451 $ 451 $ 152* $ 0* $ 0*
1986................... 100,000 101,331 101,331 1,332 1,331 1,331 1,032* 631* 831*
1987................... 100,000 102,243 102,243 2,246 2,243 2,243 1,946 1,643 1,743
1988................... 100,000 103,192 103,192 3,198 3,192 3,192 2,898 2,592 2,692
1989................... 100,000 104,248 104,248 4,258 4,248 4,248 3,958 3,648 3,748
1990................... 100,000 105,456 105,456 5,471 5,456 5,456 5,271 4,956 5,056
1991................... 100,000 106,697 106,697 6,719 6,697 6,697 6,519 6,197 6,297
1992................... 100,000 107,872 107,872 7,901 7,872 7,872 7,701 7,472 7,572
1993................... 100,000 108,902 108,902 8,938 8,902 8,902 8,738 8,502 8,602
1994................... 100,000 109,866 109,866 9,911 9,866 9,866 9,711 9,566 9,566
1995................... 100,000 110,953 110,953 11,010 10,953 10,953 10,910 10,653 10,753
1996................... 100,000 112,267 112,267 12,338 12,267 12,267 12,238 12,067 12,067
MONEY MARKET
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1985................... $100,000 $100,347 $100,347 $ 348 $ 347 $ 347 $ 48* $ 0* $ 0*
1986................... 100,000 101,120 101,120 1,123 1,120 1,120 823* 420* 620*
1987................... 100,000 101,921 101,921 1,928 1,921 1,921 1,628 1,321 1,421
1988................... 100,000 102,756 102,756 2,768 2,756 2,756 2,468 2,156 2,256
1989................... 100,000 103,684 103,684 3,703 3,684 3,684 3,403 3,084 3,184
1990................... 100,000 104,741 104,741 4,771 4,741 4,741 4,571 4,241 4,341
1991................... 100,000 105,823 105,823 5,866 5,823 5,823 5,666 5,323 5,423
1992................... 100,000 106,839 106,839 6,897 6,839 6,839 6,697 6,439 6,539
1993................... 100,000 107,719 107,719 7,794 7,719 7,719 7,594 7,319 7,419
1994................... 100,000 108,544 108,544 8,639 8,544 8,544 8,439 8,244 8,244
1995................... 100,000 109,464 109,464 9,583 9,464 9,464 9,483 9,164 9,264
1996................... 100,000 110,565 110,565 10,715 10,565 10,565 10,615 10,365 10,365
</TABLE>
- -------
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate and
the amount a Policy owner may borrow or partially withdraw. If the Policy were
to terminate or be fully surrendered, a refund of excess sales charges may be
paid (see "Surrender Charge--Excess Sales Charge").
18
<PAGE>
DIVERSIFIED
BASED ON CURRENT CHARGES
<TABLE>
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1988................... $100,000 $100,407 $100,407 $ 407 $ 407 $ 407 $ 107* $ 0* $ 0*
1989................... 100,000 101,292 101,292 1,294 1,292 1,292 994* 592* 792*
1990................... 100,000 102,555 102,555 2,559 2,555 2,555 2,259 1,955 2,055
1991................... 100,000 103,280 103,280 3,286 3,280 3,280 2,986 2,680 2,780
1992................... 100,000 105,053 105,053 5,064 5,053 5,053 4,764 4,453 4,553
1993................... 100,000 106,341 106,341 6,359 6,341 6,341 6,159 5,841 5,941
1994................... 100,000 107,975 107,975 8,001 7,975 7,975 7,801 7,475 7,575
1995................... 100,000 108,381 108,381 8,412 8,381 8,381 8,212 7,981 8,081
1996................... 100,000 111,637 111,637 11,686 11,637 11,637 11,486 11,237 11,337
DIVERSIFIED
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1988................... $100,000 $100,306 $100,306 $ 307 $ 306 $ 306 $ 7* $ 0* $ 0*
1989................... 100,000 101,084 101,084 1,087 1,084 1,084 787* 384* 584*
1990................... 100,000 102,194 102,194 2,202 2,194 2,194 1,902 1,594 1,694
1991................... 100,000 102,832 102,832 2,844 2,832 2,832 2,544 2,232 2,332
1992................... 100,000 104,390 104,390 4,413 4,390 4,390 4,113 3,790 3,890
1993................... 100,000 105,518 105,518 5,554 5,518 5,518 5,354 5,018 5,118
1994................... 100,000 106,945 106,945 6,997 6,945 6,945 6,797 6,445 6,545
1995................... 100,000 107,286 107,286 7,351 7,286 7,286 7,151 6,886 6,986
1996................... 100,000 110,114 110,114 10,215 10,114 10,114 10,015 9,714 9,814
STOCK INDEX
BASED ON CURRENT CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992................... $100,000 $100,577 $100,577 $ 578 $ 577 $ 577 $ 278* $ 0* $ 77*
1993................... 100,000 101,456 101,456 1,458 1,456 1,456 1,158* 756* 956*
1994................... 100,000 102,440 102,440 2,444 2,440 2,440 2,144 1,840 1,940
1995................... 100,000 103,234 103,234 3,240 3,234 3,234 2,940 2,634 2,734
1996................... 100,000 105,523 105,523 5,536 5,523 5,523 5,236 4,923 5,023
STOCK INDEX
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- ----------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992................... $100,000 $100,463 $100,463 $ 465 $ 463 $ 463 $ 165* $ 0* $ 0*
1993................... 100,000 101,236 101,236 1,239 1,236 1,236 939* 536* 736*
1994................... 100,000 102,101 102,101 2,109 2,101 2,101 1,809 1,501 1,601
1995................... 100,000 102,799 102,799 2,812 2,799 2,799 2,512 2,199 2,299
1996................... 100,000 104,815 104,815 4,842 4,815 4,815 4,542 4,215 4,315
</TABLE>
- -------
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate and
the amount a Policy owner may borrow or partially withdraw. If the Policy were
to terminate or be fully surrendered, a refund of excess sales charges may be
paid (see "Surrender Charge--Excess Sales Charge").
19
<PAGE>
AGGRESSIVE GROWTH
BASED ON CURRENT CHARGES
<TABLE>
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- --------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1990................... $100,000 $100,599 $100,599 $ 600 $ 599 $ 599 $ 300* $ 0* $ 99*
1991................... 100,000 101,208 101,208 1,210 1,208 1,208 910* 508* 708*
1992................... 100,000 103,341 103,341 3,346 3,341 3,341 3,046 2,741 2,841
1993................... 100,000 104,521 104,521 4,530 4,521 4,521 4,230 3,921 4,021
1994................... 100,000 106,467 106,467 6,483 6,467 6,467 6,183 5,867 5,967
1995................... 100,000 106,932 106,932 6,953 6,932 6,932 6,753 6,432 6,532
1996................... 100,000 110,043 110,043 10,077 10,043 10,043 9,877 9,543 9,643
AGGRESSIVE GROWTH
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- --------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1990................... $100,000 $100,484 $100,484 $ 485 $ 484 $ 484 $ 185* $ 0* $ 0*
1991................... 100,000 101,017 101,017 1,020 1,017 1,017 720* 317* 517*
1992................... 100,000 102,899 102,899 2,910 2,899 2,899 2,610 2,299 2,399
1993................... 100,000 103,938 103,938 3,957 3,938 3,938 3,657 3,338 3,438
1994................... 100,000 105,653 105,653 5,685 5,653 5,653 5,385 5,053 5,153
1995................... 100,000 106,057 106,057 6,098 6,057 6,057 5,898 5,557 5,657
1996................... 100,000 108,786 108,786 8,856 8,786 8,786 8,656 8,286 8,386
INTERNATIONAL STOCK
BASED ON CURRENT CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- --------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993................... $100,000 $100,319 $100,319 $ 320 $ 319 $ 319 $ 20 $ 0 $ 0
1994................... 100,000 101,654 101,654 1,656 1,654 1,654 1,356 954 1,154
1995................... 100,000 102,528 102,528 2,532 2,528 2,528 2,232 1,928 2,028
1996................... 100,000 103,345 103,345 3,351 3,345 3,345 3,051 2,745 2,845
INTERNATIONAL STOCK
BASED ON GUARANTEED CHARGES
<CAPTION>
POLICY
ANNIVERSARY DEATH BENEFIT CASH VALUE CASH SURRENDER VALUE
ON JANUARY -------------------------- -------------------------- --------------------------
1ST OF OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C OPTION A OPTION B OPTION C
- ----------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993................... $100,000 $100,226 $100,226 $ 227 $ 226 $ 226 $ 0 $ 0 $ 0
1994................... 100,000 101,400 101,400 1,403 1,400 1,400 1,103 700 900
1995................... 100,000 102,167 102,167 2,175 2,167 2,167 1,875 1,567 1,667
1996................... 100,000 102,885 102,885 2,898 2,885 2,885 2,598 2,285 2,385
</TABLE>
- -------
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate and
the amount a Policy owner may borrow or partially withdraw. If the Policy were
to terminate or be fully surrendered, a refund of excess sales charges may be
paid (see "Surrender Charge--Excess Sales Charge").
20
<PAGE>
...............................................................
From time to time the Separate Account may advertise its performance ranking
and rating information among similar investments as compiled by Lipper Analyt-
ical Services Inc., Morningstar, Inc. and other independent organizations.
From time to time the Separate Account may compare the performance of its
investment divisions with the performance of common stocks, long-term govern-
ment bonds, long-term corporate bonds, intermediate-term government bonds,
Treasury Bills, certificates of deposit and savings accounts. The Separate Ac-
count may use the Consumer Price Index in its advertisements as a measure of
inflation for comparison purposes.
BENEFIT AT FINAL DATE
If the insured is living, Metropolitan Life will pay to the Policy owner the
cash value of the Policy on the Final Date, reduced by any outstanding indebt-
edness (see "Policy Benefits--Cash Value"). The Final Date of a Policy is the
Policy anniversary on which the insured is 95 (see "Federal Tax Matters").
OPTIONAL INCOME PLANS
During the insured's lifetime, the Policy owner may arrange for the insur-
ance proceeds to be paid in a single sum, in an account that earns interest or
under one or more of the available optional income plans. For more specifics
regarding optional income plans, see the Appendix to Prospectus. These choices
are also available at the Final Date and if the Policy is surrendered. If no
election is made, Metropolitan Life will place the amount in an account that
earns interest. The payee will have immediate access to all or any part of the
account.
When the insurance proceeds are payable in a single sum, the beneficiary
may, within one year of the insured's death, select one or more of the op-
tional income plans, if no payments have yet been made. If the insurance pro-
ceeds become payable under an optional income plan and the beneficiary has the
right to withdraw the entire amount, the beneficiary may name and change con-
tingent beneficiaries.
OPTIONAL INSURANCE BENEFITS
Subject to certain requirements, one or more of the optional insurance bene-
fits described in the Appendix to Prospectus, may be included with a Policy by
rider. The cost of any optional insurance benefits will be deducted as part of
the monthly deduction (see "Charges and Deductions--Monthly Deduction From
Cash Value"). There is no charge for the accelerated death benefit rider. See
the Appendix to Prospectus, for a discussion of how certain riders affect the
benefits and the exercise of certain rights under the Policy.
PAYMENT AND ALLOCATION OF PREMIUMS
...............................................................................
ISSUANCE OF A POLICY
Individuals wishing to purchase a Policy must complete an application which
will be sent to the Designated Office. A Policy will not be issued with a
specified face amount less than the Minimum Initial Specified Face Amount. A
Policy will generally be issued only to insureds 80 years of age or under who
supply evidence of insurability satisfactory to Metropolitan Life. Metropoli-
tan Life may, however, at its sole discretion, issue a Policy to an individual
above the age of 80. Acceptance is subject to Metropolitan Life's underwriting
rules, and Metropolitan Life reserves the right to reject an application for
any reason permitted by law.
The Date of Policy is the date used to determine Policy years and Policy
months regardless of when the Policy is delivered. The Date of Policy will or-
dinarily be the date the application is approved. Within limits, Metropolitan
Life may establish an earlier Date of Policy (but no earlier than the date the
application is completed) if desired to preserve a younger age at issue for
the insured. Individuals may also request that the Date of Policy be the date
the application is completed if a payment of at least $2,500.00 is received
with the application. In these instances, the Policy owner will incur a charge
for insurance protection prior to the time that insurance coverage under the
Policy is in force (except under any temporary insurance agreement described
below). However, an earlier Date of Policy has the potential advantage, to the
Policy owner, of an earlier Investment Start Date if a payment is received
with the application. In the case of certain payroll deduction plans, or other
automatic investment plans, the Date of Policy may be earlier or later than
the date the first premium payment is received, pursuant to established admin-
istrative rules.
If a premium payment equivalent to at least one "check-o-matic" payment is
received with the application, and there has been no material misrepresenta-
tion in the application, fixed, temporary insurance equal to the specified
face amount applied for up to a maximum amount of $500,000, provided at no ad-
ditional charge, will start as of the date the application was completed and
will continue for a maximum of 90 days. However, if a medical examination of a
person to be insured is initially required by the underwriting rules of Metro-
politan Life, coverage on that person will not start until completion of the
examination. If it is not completed within 90 days from the date of the appli-
cation, there will be no coverage, except that, if the person to be insured
dies from an accident within 30 days from the date of the application and be-
fore the examination is completed, temporary insurance will be in effect if it
has not already ended under the terms of the temporary insurance agreement. In
no event will a death benefit be provided under the temporary insurance agree-
ment if death is by suicide.
Metropolitan Life will allocate net premiums to the Separate Account and/or
the Fixed Account on the Investment Start Date (see "Allocation of Premiums
and Cash Value"). The Investment Start Date is the later of (i) the Date of
Policy and (ii) the date the first premium for a Policy is received at the
Designated Office.
21
<PAGE>
...............................................................
Except as otherwise provided in any temporary insurance agreement, there
will be no insurance coverage under a Policy unless at the time the Policy is
delivered the insured's health is the same as stated in the application and,
in most states, the insured has not sought medical advice or treatment subse-
quent to the date of the application.
PREMIUMS
Payment of Premiums. Each Policy owner will determine a planned periodic
premium schedule that provides for the payment of a level premium at fixed in-
tervals for a specified period of time. During the first two Policy years,
premium payments must be at least equal to a minimum allowable planned premium
schedule. After the first two Policy years, the Policy owner is not required
to pay premiums in accordance with the planned periodic premium schedule.
MOREOVER THE PAYMENT OF PLANNED PERIODIC PREMIUMS WILL NOT GUARANTEE THAT
THE POLICY REMAINS IN FORCE AFTER THE FIRST TWO POLICY YEARS. Instead, the du-
ration of the Policy after the first two Policy years depends upon the
Policy's cash surrender value (see "Policy Termination and Reinstatement--Ter-
mination").
The Policy owner must designate in the application one of the following ways
to pay the planned periodic premium. The Policy owner may elect to pay the
planned periodic premium annually, semi-annually, or monthly through "check-o-
matic" payments. Monthly "check- o-matic" payments are automatically made by
preauthorized transfers from a bank checking account. A Policy owner may also
elect to pay monthly planned periodic premiums through other systematic pay-
ment plans or through various payroll deduction plans if provided by the em-
ployer of the Policy owner.
Subject to the minimum and maximum premium limitations described below, a
Policy owner may make unscheduled premium payments at any time in any amount.
The Policy, therefore, provides the owner with the flexibility to vary the
frequency and amount of premium payments to reflect changing financial condi-
tions.
All premium payments after the initial premium payment are credited to the
Separate Account or Fixed Account as of the Date of Receipt.
Premium Limitations. During the first two Policy years, premium payments by
a Policy owner must at least equal the minimum allowable planned premium for
the particular Policy or the Policy will terminate after a grace period com-
mencing on a monthly anniversary when the total premiums paid as of that date
are not at least equal to the minimum premiums required as of that date and
the cash surrender value is insufficient to pay the monthly deduction on that
date. The minimum allow able planned premium is equal to the then current an-
nual target premium for the Policy.
Except as described below, the total of all premiums paid, both planned and
unplanned, can never exceed the then current maximum premium limitation deter-
mined by Internal Revenue Code rules relating to the definition of life insur-
ance. If at any time a premium is paid that would result in total premiums ex-
ceeding the then current maximum premium limitations, Metropolitan Life will
accept only that portion of the premium that will make total premiums equal
the limit. Any part of the premium in excess of that amount will be refunded,
and no further premiums will be accepted until allowed by the maximum premium
limitations. These limitations will not apply to any premium that is required
to be paid in order to prevent the Policy from terminating.
There may be cases where the total of all premiums paid could cause the Pol-
icy to be classified as a modified endowment contract (see "Federal Tax Mat-
ters"). The annual statement (see "Reports") sent to each Policy owner will
include information regarding the modified endowment contract status of a Pol-
icy. In cases where a Policy is not an irrevocable modified endowment con-
tract, the annual statement will indicate what action the Policy owner can
take to reverse the modified endowment contract status of the Policy.
Every planned premium payment after the first Policy year must be at least
$200 on an annual basis, $100 on a semi-annual basis and $15 on a "check-o-
matic" or other pre-authorized transfer or payment basis. For some Policies
distributed through brokers (see "Distribution of the Policies"), the planned
periodic premium for the first Policy year may be required to be at least
$2,500. Every unplanned premium payment must be at least $250. Premium pay-
ments less than these minimum amounts will be refunded to the Policy owner.
ALLOCATION OF PREMIUMS AND CASH VALUE
Net Premiums. The net premium equals the premium paid less premium expense
charges (see "Charges and Deductions--Premium Expense Charges").
Allocation of Net Premiums. In the application for a Policy, the Policy
owner indicates the initial allocation of net premiums among the Fixed Account
and the investment divisions of the Separate Account. The minimum percentage
of each premium that may be allocated to the Fixed Account or any investment
division of the Separate Account is 10%. Allocation percentages must be in
whole numbers; for example, 33 1/3% may not be chosen. The Policy owner may
change the allocation of future net premiums without charge at any time by
providing Metropolitan Life with written notification at the Designated
22
<PAGE>
...............................................................
Office. The change will be effective as of the Date of Receipt of the notice
at the Designated Office.
The Policy's cash value in the investment divisions of the Separate Account
will vary with the investment experience of these investment divisions, and
the Policy owner bears this investment risk. Policy owners should periodically
review their allocations of net premiums and cash values in light of market
conditions and their overall financial planning requirements.
Cash Value Transfers. The Policy owner may transfer cash value between the
Fixed Account and the investment divisions of the Separate Account and among
the investment divisions of the Separate Account. At the present time, there
is no charge for transfers. Metropolitan Life reserves the right in the future
to assess a charge of up to $25 against each transfer. A transfer must be made
in either dollar amounts or a percentage in whole numbers. The minimum amount
that may be transferred is the lesser of $50 or the total amount in an invest-
ment division or, if the transfer is from the Fixed Account the total amount
in the Fixed Account. Transferring cash value from one or more investment di-
visions and/or the Fixed Account into one or more other investment divisions
and/or the Fixed Account counts as one transfer. Metropolitan Life reserves
the right to delay the transfer, withdrawal, surrender and payment of policy
loans of amounts from the Fixed Account for up to six months (see "The Fixed
Account--Transfers, Withdrawals, Surrenders, and Policy Loans"). Metropolitan
Life will effectuate transfers and determine all values in connection with
transfers as of the Date of Receipt of written notice at the Designated Of-
fice.
Transfers are not taxable transactions under current law. Transfer requests
must be in writing in a form acceptable to Metropolitan Life, or in another
form of communication acceptable to Metropolitan Life.
Metropolitan Life reserves the right, if permitted by state law, to allow
Policy owners to make transfer requests by telephone and to allow Policy own-
ers to authorize their sales representatives to make requests on behalf of the
Policy owners by telephone on a form Metropolitan Life will supply to Policy
owners. If Metropolitan Life decides to permit either of these transfer proce-
dures, and a Policy owner elects to participate in either of these transfer
procedures, the following will apply: the Policy owner will authorize Metro-
politan Life to act upon the telephone instructions of any person purporting
to be the Policy owner (or, if applicable, the Policy owner's sales represen-
tative), assuming Metropolitan Life's procedures have been followed, to make
transfers both from amounts in the Policy's Fixed Account and in the Separate
Account. Metropolitan Life will institute reasonable procedures to confirm
that any instructions commu-nicated by telephone are genuine. All telephone
calls will be recorded, and the Policy owner (or, if applicable, the Policy
owner's sales representative) will be asked to produce the Policy owner's per-
sonalized data prior to Metropolitan Life initiating any transfer requests by
telephone. Additionally, as with other transactions, the Policy owner will re-
ceive a written confirmation of any such transfer. Neither Metropolitan Life
nor the Separate Account will be liable for any loss, expense or cost arising
out of any requests that Metropolitan Life or the Separate Account reasonably
believe to be genuine. In the event that these transfer procedures are insti-
tuted and in the further event that the Policy owner who has elected to use
such procedures encounters difficulty with them, such Policy owner should make
the request to the Designated Office.
Automated Investment Strategies. Metropolitan Life may permit the Policy
owner to submit a written authorization directing Metropolitan Life to make
transfers on a continuing periodic basis from one investment division to an-
other or to the Fixed Account. Metropolitan Life currently offers three such
investment strategies: the "Equity Generator," the "Equalizer" and the "Allo-
cator." A fourth strategy, the "Rebalancer", is expected to be available on or
about July 1, 1996. Only one automated investment strategy may be in effect at
any one time. The Owner may submit a written request electing a strategy or
directing Metropolitan Life to cancel a strategy at any time.
Under the "Equity Generator," Policy owners may have the interest earned on
amounts in the Fixed Account transferred to the Stock Index Division or the
Aggressive Growth Division, as elected by the Policy owner. The Aggressive
Growth Division is expected to be available for use with this strategy on or
about July 1, 1996. Any such transfer from the Fixed Account to the Stock In-
dex Division or the Aggressive Growth Division, as applicable, will be made at
the beginning of each Policy month following the Policy month in which the in-
terest is earned. The transfer will only be made for a month during which at
least $20.00 in interest is earned. Amounts earned during a month in which
less than $20.00 in interest is earned will remain in the Fixed Account.
Under the "Equalizer," at the end of a specified period (e.g. monthly, quar-
terly) as determined by Metropolitan Life, a transfer is made from the Stock
Index Division or the Aggressive Growth Division, as elected by the Policy
owner, to the Fixed Account or from the Fixed Account to such elected invest-
ment division in order to make the Fixed Account and such elected investment
division equal in value. The Aggressive Growth Division is expected to be
available for use with this strategy on or about July 1, 1996. While the
"Equalizer" is in effect,
23
<PAGE>
...............................................................
any cash value transfer out of such elected investment division that is not
part of this automated investment strategy will automatically terminate the
"Equalizer" election. The Policy owner may then reelect the "Equalizer" strat-
egy to become effective on the next Policy anniversary.
Under the "Allocator," at the beginning of each Policy month, an amount des-
ignated by the Policy owner is transferred from the Money Market Division to
the Fixed Account and/or any investment division(s) specified by the Owner.
The Policy owner may choose to do this in one of the following three ways: (1)
designating an amount to be transferred from the Money Market Division each
month until amounts in that investment division are exhausted; (2) designating
an amount to be transferred from the Money Market Division for a certain num-
ber of months; or (3) designating a total amount to be transferred from the
Money Market Division in equal monthly installments over a certain number of
months. The Policy owner's designations must allow the "Allocator" to remain
in effect for at least three months.
Under the "Rebalancer," Policy owners may elect the periodic redistribution
of cash value so that the cash value is allocated among the Fixed Account and
the investment divisions of the Separate Account in the same proportion as the
net premiums are allocated. Metropolitan Life will redistribute the cash value
at the beginning of each calendar quarter.
POLICY TERMINATION AND REINSTATEMENT
Termination. If, during the first two Policy years, the cash surrender value
on any monthly anniversary is insufficient to cover the monthly deduction and
the total premiums paid as of such monthly anniversary are not equal to the
minimum premiums required as of that date, Metropolitan Life will notify the
Policy owner and any assignee of record of that difference. Also, if, after
the first two Policy years, the cash surrender value on any monthly anniver-
sary is insufficient to cover the monthly deduction, Metropolitan Life will
notify the Policy owner and any assignee of record of that shortfall. In ei-
ther case, the Policy owner will then have a grace period of 61 days, measured
from the monthly anniversary, to make sufficient payment. In the first two
Policy years, the minimum necessary premium payment will be an amount equal to
the difference between the total premiums previously paid and the minimum re-
quired premiums. After the first two Policy years, the minimum necessary pay-
ment must be an amount sufficient to keep the Policy in force for two months
after the premium expense charges have been deducted. Failure to make a suffi-
cient payment within the grace period will result in termination of the Poli-
cy. In the first two Policy years after issue or after an increase in the
specified face amount, any excess sales charges (see "Surrender Charge--Excess
Sales Charge") will be returned to the Policy owner. Otherwise, a Policy ter-
minates without any cash surrender value. If the insured dies during the grace
period, the insurance proceeds will still be payable, but any due and unpaid
monthly deductions will be deducted from the proceeds.
Reinstatement. A terminated Policy may be reinstated anytime within 3 years
(5 years in Missouri) after the end of the grace period and before the Final
Date by submitting the following items to Metropolitan Life: (1) a written ap-
plication for reinstatement; (2) evidence of insurability satisfactory to Met-
ropolitan Life; and (3) a premium that, after the deduction of the premium ex-
pense charges (see "Charges and Deductions--Premium Expense Charges"), is
large enough to cover: (a) the monthly deductions for at least the two Policy
months commencing with the effective date of reinstatement; (b) any due and
unpaid monthly Policy charges incurred during the first Policy year; (c) any
portion of the surrender charge which was not paid at termination because the
cash value at termination was insufficient to pay such portion of the charge;
(d) for terminations occurring in the two Policy years after issue or after an
increase in the specified face amount, an amount equal to the excess, if any,
of (i) the portion of the surrender charge applicable to the issue or the in-
crease which would be payable (without regard to any excess sales charge limi-
tations as described under "Surrender Charge--Excess Sales Charge") if the
Policy were surrendered in the Policy year of reinstatement and as if the Pol-
icy had not been terminated earlier over (ii) the amount of the applicable
surrender charge paid at termination; and (e) interest at the rate of 6% per
year on the amount set forth in (b) from the commencement of the grace period
to the date of reinstatement. Metropolitan Life reserves the right to waive
the interest due set forth in (e) above.
Notwithstanding the above, at the present time, with respect to the rein-
statement of a Policy that is terminated during the first two Policy years,
Metropolitan Life will accept as the premium required for reinstatement the
lesser of the amount as defined in the immediately preceding paragraph and the
following: the excess of the sum of (a) the monthly deductions for at least
the two Policy months commencing with the effective date of reinstatement; (b)
the total of the minimum required premiums that would have been payable under
the Policy from the date of the Policy until the effective date of reinstate-
ment had no termination occurred; and (c) an amount that after the deduction
of the premium expense charges would equal any amount previously refunded to
the Policy owner as an Excess Sales Charge (see "Surrender Charge--Excess
Sales Charge"), over the sum of all premiums paid by the Policy owner to the
effective date of the termination before any charges or deductions
24
<PAGE>
...............................................................
were applied. Metropolitan Life offers this alternative calculation of the pre-
mium required for reinstatement at present but reserves the right to modify or
rescind this offer at its sole discretion.
Indebtedness on the date of termination will be cancelled and need not be re-
paid and will not be reinstated. The amount of cash surrender value on the date
of reinstatement will be equal to two monthly deductions plus any amount of net
premiums paid at reinstatement in excess of the amount of premium required
above to reinstate the Policy.
The date of reinstatement will be the date of approval of the application for
reinstatement. The terms of the original Policy, including the insurance rates
provided therein, will apply to the reinstated Policy. However, a Policy which
was terminated and reinstated during the first two Policy years will be subject
to termination after a grace period when the cash surrender value is insuffi-
cient to pay a monthly deduction even if all minimum premiums required to be
paid during the first two Policy years have been paid. A reinstated Policy is
subject to a new two year period of contestability (see "Other Policy Provi-
sions--Incontestability").
CHARGES AND DEDUCTIONS
................................................................................
PREMIUM EXPENSE CHARGES
Sales Load. A charge (which may be deemed to be a sales load as defined in
the 1940 Act) is deducted from each premium payment received by Metropolitan
Life as described below. A charge of 2% of premiums paid is deducted from all
premium payments. There is also a charge (which may be deemed to be a sales
load) upon the surrender of a Policy during the first fifteen Policy years or
during the first fifteen Policy years after an increase in the specified face
amount of a Policy (see "Surrender Charge").
The amount of the sales load (whether from either the premium expense charge
or upon surrender of the Policy) in any Policy year cannot be specifically re-
lated to actual sales expenses for that year, which include sales commissions
and costs of prospectuses, other sales material and advertising. To the extent
that sales expenses are not recovered from the charges for sales load, such ex-
penses will be recovered from other sources, including any excess accumulated
charges for mortality and expense risks under the Policies, any other gains at-
tributable to operations with respect to the Policies and Metropolitan Life's
general assets and surplus. Metropolitan Life does not anticipate that all its
total sales expenses will be recovered from the sales charges.
Tax Charges. Two charges are currently made for taxes related to premiums.
These taxes include any fed-
eral, state or local taxes measured by or based on the amount of premiums re-
ceived by Metropolitan Life. A charge of 1.5% of each premium payment is made
for the purpose of recovering the federal income taxes of Metropolitan Life
that are determined by the amount of premiums received in connection with the
Policy (the "DAC tax charge"). Metropolitan Life represents that this charge is
reasonable in relation to Metropolitan Life's increased federal income tax bur-
den under the Internal Revenue Code resulting from receipt of premiums. A por-
tion of this charge is deemed to be a sales load for purposes of computing
sales load limits under the federal securities laws. An additional charge is
made for state premium taxes of 2% of each premium payment. Premium taxes vary
from state to state ranging from zero to 3.5% currently. The 2% rate approxi-
mates the average tax rate expected to be paid on premiums from all states.
TRANSFER CHARGE
At the present time, no charge will be assessed against the cash value of a
Policy when amounts are transferred among the investment divisions of the Sepa-
rate Account and between the investment divisions and the Fixed Account. Metro-
politan Life reserves the right in the future to assess a charge of up to $25
against each transfer. If made, the charge would be allocated among the Fixed
Account and each investment division of the Separate Account from which amounts
are transferred in the same proportion that the amounts transferred from the
Fixed Account and the amounts transferred from each investment division bear to
the total amount transferred, when the requested transfer is effected. Thus,
for example, if a request is received for a transfer of $100, cash value in the
amount of $100 would be deducted from the particular investment division(s),
with $100 being transferred to the requested new investment division(s). The
$25 would be deducted based on the cash value in each investment division from
which amounts are transferred at the time of the transfer. Charges will not be
assessed for transfers made under the "Equalizer," "Equity Generator," "Alloca-
tor" or "Rebalancer" (see "Allocation of Premiums and Cash Value--Automated In-
vestment Strategies").
MONTHLY DEDUCTION FROM CASH VALUE
The monthly deduction from cash value includes the cost of term insurance
charge, the charge for optional insurance benefits added by rider (see "Policy
Benefits--Optional Insurance Benefits") and monthly Policy charges. The cost of
term insurance charge and the monthly Policy charges are discussed separately
in the paragraphs that follow. The monthly deduction will also include a charge
for requested increases in the death benefit for the month in which the in-
crease occurs, as discussed more fully under "Policy Benefits--Increases".
25
<PAGE>
...............................................................
The monthly deduction will be deducted as of each monthly anniversary com-
mencing with the Date of Policy. It will be allocated among the Fixed Account
and each investment division on the Separate Account on a Pro Rata Basis. See
"Payment and Allocation of Premiums--Issuance of a Policy", regarding when in-
surance coverage starts under a newly issued Policy.
Cost of Term Insurance. Because the cost of term insurance depends upon a
number of variables, it can vary from month to month. Metropolitan Life will
determine the monthly cost of term insurance charge by multiplying the appli-
cable cost of term insurance rate or rates by the term insurance amount for
each Policy month. The term insurance amount for a Policy month is (a) the
death benefit at the beginning of the Policy month divided by 1.0032737 (a
discount factor to account for return deemed to be earned during the month),
less (b) the cash value at the beginning of the Policy month.
The term insurance amount may be affected by changes in the cash value or in
the specified face amount of the Policy and will be greater for owners who
have selected Death Benefit Option B, or Death Benefit Option C prior to pol-
icy anniversary 65, than for those who have selected Death Benefit Option A,
or Death Benefit Option C on and after policy anniversary 65 (see "Policy Ben-
efits--Death Benefits"), assuming the same specified face amount in each case
and assuming that the minimum death benefit is not in effect. Since the death
benefit under Option A, and under Option C on and after policy anniversary 65,
remains constant while the death benefit under Option B, and under Option C
prior to policy anniversary 65, varies with the cash value, cash value in-
creases will generally reduce the term insurance amount under Option A, and
Option C on and after policy anniversary 65, but not under Option B, and Op-
tion C prior to policy anniversary 65. If the term insurance amount is great-
er, the cost of insurance will be greater. If the minimum death benefit is in
effect (see "Death Benefit Options--Minimum Death Benefit"), then the cost of
term insurance will vary directly with the cash value under all of the death
benefit options.
If more than one rate class is in effect under a Policy (see "Rate Class"),
the cost of term insurance will generally decrease if a Policy owner changes
the Death Benefit Option. In those cases where the specified face amount of
the Policy does not change as a result of the Option change (i.e., converting
from Option B to C (when permitted), from Option C to Option B before Policy
anniversary 65 or from Option C to Option A after Policy anniversary 65), the
cost of term insurance will not change.
Cost of Term Insurance Rate. Cost of term insurance rates are based on the
sex (except in Montana and Massachusetts, in the case of group conversions
which require unisex rates and in the case of Policies sold in connection with
executive bonus and split dollar deferred compensation plans), age and rate
class of the insured. The actual monthly cost of term insurance rates will be
based on Metropolitan Life's expectations as to future experience. They will
not, however, be greater than the guaranteed cost of term insurance rates set
forth in the Policy. These guaranteed rates are based on certain of the 1980
Commissioners Standard Ordinary Mortality Tables and the insured's sex and
age. The Tables used for this purpose set forth different mortality estimates
for males and females. Any change in the cost of term insurance rates will ap-
ply to all persons of the same insuring age, sex, and rate class whose Poli-
cies have been in force for the same length of time. Metropolitan Life reviews
its cost of term insurance rates periodically and may adjust the rates from
time to time.
Rate Class. The rate class of an insured affects the cost of term insurance
rate. Metropolitan Life currently places insureds into a standard rate class
or rate classes involving a higher or lower mortality risk. For Ages 18 and
over, each such rate class is further divided into a smoker division and a
nonsmoker division. In an otherwise identical Policy, insureds in the standard
rate class will have a lower cost of term insurance than those in the rate
class with the higher mortality risk, and a higher cost of term insurance than
those in the rate class with the lower mortality risk. Also, those insureds in
the nonsmoker division of a rate class will have a lower cost of term insur-
ance than those in the smoker division of the same rate class.
If a Policy owner requests a specified face amount increase at a time when
the insured is in a less favorable rate class or division than previously, a
correspondingly higher cost of insurance rate will apply to that portion of
the term insurance amount attributable to the increase. On the other hand, if
the insured's rate class or division improves, the lower cost of insurance
rate will apply to the entire term insurance amount.
Monthly Policy Charges. During the first Policy year, there will be a Base
Administration Charge as described below plus a monthly charge equal to $0.25
per thousand dollars of specified face amount of the Policy. The Base Adminis-
tration Charge is equal to $5 per month at Ages less than eighteen, $15 per
month at Ages eighteen to forty-nine, and $20 per month at Ages fifty and
above. After the first Policy year, the monthly administration charge is $5
per month for Policies with a specified face amount of $250,000 or more, $7
per month for Policies with a specified face amount of $100,000 to $249,999,
and $9 per month for Policies with a specified face amount of less than
$100,000. The monthly administration charge will be determined by the
26
<PAGE>
.........................................
specified face amount of the Policy at the time the monthly deduction is made.
Thus, any change in the specified face amount of a Policy may result in a
change in the monthly administration charge.
These charges will be used to compensate Metropolitan Life for expenses in-
curred in the administration of the Policy as a multifunded policy. The first
year charge will also compensate Metropolitan Life for first year underwriting
and other start-up expenses incurred in connection with the Policy. These ex-
penses include the cost of processing applications, conducting medical exami-
nations, determining insurability and the insured's risk class, and establish-
ing Policy records. Metropolitan Life does not expect to derive a profit from
these charges. If a Policy is surrendered in the first Policy year, the re-
maining Base Administration Charge for each of the full Policy months remain-
ing in the first Policy year will be deducted from the cash value of the Pol-
icy in addition to any applicable surrender charge (see "Surrender Charge").
CHARGES AGAINST THE SEPARATE ACCOUNT
Charge for Mortality and Expense Risks. A daily charge is made against the
Separate Account for mortality and expense risks assumed by Metropolitan Life.
The amount of the charge is equivalent to an effective annual rate of .90% of
the average daily value of the assets in the Separate Account which are
attributable to the Policies.
The mortality risk assumed is that insureds may live for a shorter period of
time than estimated (i.e., the period of time based on the appropriate 1980
Commissioners Standard Ordinary Mortality Table) and, thus, a greater amount
of death benefits than expected will be payable. The expense risk assumed is
that expenses incurred in issuing and administering the Policies will be
greater than estimated. Metropolitan Life will realize a gain if the charges
prove ultimately to be more than sufficient to cover its actual costs of such
mortality and expense commitments. If the charges are not sufficient, the loss
will fall on Metropolitan Life. If its estimates of future mortality and ex-
pense experience are accurate, Metropolitan Life anticipates that it will re-
alize a profit from the mortality and expense risk charge; however if such es-
timates are inaccurate, Metropolitan Life could incur a loss.
Charge for Income Taxes. Currently, no charge is made against the Separate
Account for income taxes. However, Metropolitan Life may decide to make such a
charge in the future (see "Federal Tax Matters--Taxation of Metropolitan
Life").
SURRENDER CHARGE
A sales charge will be deducted in the form of a surrender charge from the
cash value if the Policy is surrendered or terminated after a grace period
during the first fifteen Policy years. A sales charge will also be deducted
upon surrender or termination of a Policy during the first fifteen Policy
years after an increase in the specified face amount of a Policy. In each
case, the amount of the surrender charge is based on a charge per thousand
dollars of specified face amount which varies with the Age of the insured at
the time of the issue of the Policy or of the increase in the specified face
amount and the death benefit option chosen at the time of issue or increase by
the Policy owner. The surrender charges per thousand dollars of specified face
amount are as follows:
Option A:
<TABLE>
<CAPTION>
AGE AT POLICY YEARS SINCE ISSUE OR INCREASE
ISSUE OR -----------------------------------------------------------
INCREASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 5 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1 $ 1
6-10 3 3 3 3 3 2 2 2 2 2 1 1 1 1 1
11-20 3 3 3 3 3 2 2 2 2 2 1 1 1 1 1
21-25 3 3 3 3 3 2 2 2 2 2 1 1 1 1 1
26-30 4 4 3 3 3 3 3 2 2 2 2 1 1 1 1
31-35 7 6 6 6 5 5 5 4 4 3 3 2 2 1 1
36-40 8 7 7 7 6 6 5 5 4 4 3 3 2 1 1
41-44 10 9 8 8 7 7 6 6 5 4 4 3 2 2 1
45-50 12 12 11 10 10 9 8 7 7 6 5 4 3 2 1
51-54 15 15 14 13 12 11 10 9 8 7 6 5 4 3 1
55-59 18 17 16 15 14 13 12 11 10 9 8 6 5 3 2
60-69 22 21 20 18 17 16 15 13 12 11 9 7 6 4 2
70-79 22 21 20 18 17 16 15 13 12 11 9 8 6 4 2
80 22 21 20 18 17 16 15 14 13 12 10 9 8 6 3
</TABLE>
27
<PAGE>
..................................
Option B:
<TABLE>
<CAPTION>
AGE AT POLICY YEARS SINCE ISSUE OR INCREASE
ISSUE OR -----------------------------------------------------------
INCREASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 5 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1
6-10 4 4 4 4 3 3 3 3 2 2 2 1 1 1 1
11-20 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1
21-25 7 7 6 6 6 5 5 4 4 3 3 2 2 1 1
26-30 10 8 7 7 7 6 6 5 4 4 3 3 2 1 1
31-35 12 12 11 10 10 9 8 7 6 5 4 4 3 2 1
36-40 15 14 13 12 12 11 10 9 8 7 6 5 4 3 1
41-44 20 20 19 18 17 16 14 13 12 10 9 7 5 4 2
45-50 24 24 24 22 21 19 17 16 14 12 10 8 6 4 2
51-54 27 27 26 24 23 21 19 18 16 14 12 10 7 5 3
55-59 30 29 27 25 24 22 20 18 16 14 12 10 8 5 3
60-69 32 30 29 27 25 23 22 20 18 15 13 11 8 6 3
70-79 36 34 33 31 29 27 25 23 20 18 16 13 10 7 4
80 40 38 36 34 32 30 28 26 24 22 19 17 14 11 6
</TABLE>
Option C:
<TABLE>
<CAPTION>
AGE AT POLICY YEARS SINCE ISSUE OR INCREASE
ISSUE OR -----------------------------------------------------------
INCREASE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0- 5 $ 4 $ 4 $ 3 $ 3 $ 3 $ 3 $ 3 $ 2 $ 2 $ 2 $ 2 $ 1 $ 1 $ 1 $ 1
6-10 4 4 4 4 3 3 3 3 2 2 2 1 1 1 1
11-20 4 4 4 4 4 3 3 3 3 2 2 2 1 1 1
21-25 5 5 5 5 5 4 4 3 3 3 2 2 2 1 1
26-30 7 6 5 5 5 5 5 4 3 3 3 2 2 1 1
31-35 10 9 9 8 8 7 7 6 5 4 4 3 3 2 1
36-40 12 11 10 10 9 9 8 7 6 6 5 4 3 2 1
41-44 15 15 14 13 12 12 10 10 9 7 7 5 4 3 2
45-50 18 18 18 16 16 14 13 12 11 9 8 6 5 3 2
51-54 21 21 20 19 18 16 15 14 12 11 9 8 6 4 2
55-59 24 23 22 20 19 18 16 15 13 12 10 8 7 4 3
60-64 27 26 25 23 21 20 19 17 15 13 11 9 7 5 3
65-69 22 22 20 18 17 16 15 13 12 11 9 7 6 4 2
70-79 22 21 20 18 17 16 15 13 12 11 9 8 6 4 2
80 22 21 20 18 17 16 15 14 13 12 10 9 8 6 3
</TABLE>
A total surrender charge at surrender or termination of a Policy will equal
the sum of any surrender charge based on the specified face amount at issue
and any surrender charges based on any increases in the specified face amount.
Thus, a surrender charge may apply to a surrender made more than fifteen years
after issue of a Policy where a specified face amount increase has occurred
within fifteen years prior to the surrender. No surrender charge applies to
any increase in the specified face amount resulting from a change in the death
benefit option. Also, surrender charges are not reduced by any decrease in the
specified face amount, regardless of the reason for the decrease. No surrender
charges are assessed against partial withdrawals or loans, but the amount of
the applicable surrender charge indicated above which would be deducted (dis-
regarding the effect of the excess sales charge limits, discussed below) if
the Policy were surrendered reduces the amount of cash value which may be
withdrawn or borrowed.
For example, if a Policy owner who is 25 years old purchases a Policy with a
specified face amount of $100,000 and chooses death benefit Option A, the sur-
render charge in year five, assuming no increases in the specified face
amount, would be $300 ($3 X 100). If the Policy owner increases the specified
face amount by $50,000 in year 10 (when the Policy owner is 35 years old), the
surrender charge in year 15 would be $350, consisting of $100 ($1 X 100) re-
lating to the specified face amount at issue, and $250 ($5 X 50) relating to
the increase in the specified face amount. In year 20, the surrender charge
would be $150, consisting of 0 relating to the specified face amount at issue
(since the surrender takes place more than 15 years after the original issu-
ance of the Policy), and $150 ($3 X 50) relating to the increase in the speci-
fied face amount.
During the first Policy year, in addition to the applicable surrender
charge, the remaining monthly Base Ad-
28
<PAGE>
...............................................................
ministration Charges will also be imposed upon surrender of a Policy (see
"Charges and Deductions--Monthly Policy Charges").
Excess Sales Charge. With respect to the surrender or termination of a Policy
during the first two Policy years after issue, the applicable surrender charge,
together with all premium expense charges (other than the 2% charge for state
premium taxes and that portion of the DAC tax charge that is not considered to
be sales load) previously deducted from premium payments, may not exceed the
sum of (i) 30% of premium payments in aggregate amount less than or equal to
one guideline annual premium, plus (ii) 10% of premium payments in aggregate
amount greater than one guideline annual premium but not more than two guide-
line annual premiums, plus (iii) 9% of each premium payment in excess of two
guideline annual premiums. With respect to the surrender or termination of a
Policy during the first two years after an increase in specified fact amount,
comparable limitations will be imposed on the amount of any then applicable
surrender charge that is attributable to the increase. For purposes of comput-
ing the amount of any such limitation, a portion of each premium payment made
after such increase in face amount will be deemed attributable to the increase.
That portion will bear the same ratio to the total premium payment as the
Guideline Annual Premium for the face amount increase bears to the Guideline
Annual Premium for the entire Policy. The cash surrender value of an in force
Policy is not affected by these limits.
GUARANTEE OF CERTAIN CHARGES
Metropolitan Life guarantees, and may not increase, the charges deducted from
premiums, the monthly administration charge, the surrender charge and the
charge against the Separate Account for mortality and expense risks with re-
spect to the Policies.
OTHER CHARGES
Fund Investment Management Fee. Shares of the Fund are purchased for the Sep-
arate Account at their net asset value. The net asset value of Fund shares is
determined after deduction of the fee paid by the Fund at the annual rate of
.25% (.75% for the International Stock Portfolio and the Aggressive Growth
Portfolio) of the average daily value of the aggregate net assets of the port-
folios for the investment management services provided by Metropolitan Life, as
described more fully under "What are Separate Account UL, the Fixed Account and
the Metropolitan Series Fund?" and in the attached prospectus for the Fund. The
net asset value of Fund shares also reflects the deduction of direct expenses
from the assets of the Fund as more fully described in the attached prospectus
for the Fund.
ILLUSTRATIONS OF DEATH BENEFITS, CASH VALUES, CASH SURRENDER VALUES AND
ACCUMULATED PREMIUMS
................................................................................
The tables in this section illustrate the way in which a Policy's death bene-
fit, cash value and cash surrender value could vary over an extended period of
time assuming that all premiums are allocated to and remain in the Separate Ac-
count for the entire period shown and hypothetical gross investment rates of
return for the Fund (i.e., investment income and capital gains and losses, re-
alized or unrealized) equivalent to constant gross (after tax) annual rates of
0%, 6% and 12%. The tables are based on the payment of annual planned premiums
(see "Premiums--Premium Limitations"), for a specified face amount of $100,000
for males aged 25 and 40. Each illustration assumes that the insured is in Met-
ropolitan Life's standard nonsmoker underwriting risk classification. Illustra-
tions for an insured in Metropolitan Life's standard smoker underwriting risk
classification would show, for the same age and premium payments, lower cash
values and cash surrender values and, therefore, for the minimum death benefit,
death benefits under Option B and Option C prior to policy anniversary 65,
lower death benefits. The differences between the cash values and the cash sur-
render values in the first fifteen years are the surrender charges.
The death benefits, cash values and cash surrender values would be different
from those shown if the actual gross investment rates of return averaged 0%, 6%
or 12% over a period of years, but fluctuated above or below such averages for
individual policy years. The values would also be different depending on the
allocation of a Policy's total cash value among the investment divisions of the
Separate Account, if the actual rates of return averaged 0%, 6% or 12% but the
rates for each portfolio of the Fund varied above and below such averages.
The amounts shown for the death benefits, cash values and cash surrender val-
ues take into account the deductions from premiums and the monthly deduction
from cash value, as well as the daily charge against the Separate Account for
mortality and expense risks equivalent to an effective annual rate of .90% of
the average daily value of the assets in the Separate Account attributable to
the Policies and the daily charge to the Fund for investment management serv-
ices equivalent to an annual rate of .392857% of the average daily value of the
aggregate net assets of the Fund (an average of the five available portfolios
of the Fund that have an investment management fee of .25% and the two portfo-
lios that have an investment management fee of .75%) and .118600% for other di-
rect fund expenses (the average daily rate of such expenses for the entire Fund
in 1995). (See "Charges and Deductions.")
29
<PAGE>
...............................................................
Some of the following illustrations are based on the guaranteed cost of term
insurance rates; the remainder of the illustrations are based on the current
cost of term insurance rates as presently in effect (see "Monthly Deduction
From Cash Value--Cost of Term Insurance Rate").
Taking account of the charges for mortality and expense risks, investment
management services and other Fund expenses, the gross annual investment rates
of return of 0%, 6% and 12% correspond to actual (or net) annual rates of:-
1.39%, 4.52% and 10.44%, respectively.
The hypothetical returns shown in the tables do not reflect any charges for
income taxes against the Separate Account since no such charges are currently
made. However, if in the future such charges are made, in order to produce the
death benefits and cash values illustrated, the gross annual investment rate
of return would have to exceed 0%, 6% or 12% by a sufficient amount to cover
the tax charges. (See "Federal Tax Matters--Taxation of Metropolitan Life.")
The second column of the tables shows the amount which would accumulate if
an amount equal to the annual planned premium were invested to earn interest,
after taxes, at 5% compounded annually.
Upon request, Metropolitan Life will furnish an illustration reflecting the
proposed insured's age, sex, the specified face amount or premium amount re-
quested, frequency of planned periodic premium payments, death benefit option
selected and any available rider requested.
30
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION A GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- ----------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.................... $ 1,050 $ 283 $ 318 $ 354 $ 0*(3) $ 18* $ 54* $100,000 $100,000 $100,000
2.................... 2,153 960 1,061 1,167 660* 761* 867* 100,000 100,000 100,000
3.................... 3,310 1,628 1,839 2,068 1,328 1,539 1,768 100,000 100,000 100,000
4.................... 4,526 2,290 2,655 3,065 1,990 2,355 2,765 100,000 100,000 100,000
5.................... 5,802 2,942 3,508 4,166 2,642 3,208 3,866 100,000 100,000 100,000
6.................... 7,142 3,583 4,397 5,382 3,383 4,197 5,182 100,000 100,000 100,000
7.................... 8,549 4,211 5,324 6,722 4,011 5,124 6,522 100,000 100,000 100,000
8.................... 10,027 4,825 6,287 8,197 4,625 6,087 7,997 100,000 100,000 100,000
9.................... 11,578 5,424 7,288 9,822 5,224 7,088 9,622 100,000 100,000 100,000
10.................... 13,207 6,006 8,328 11,610 5,806 8,128 11,410 100,000 100,000 100,000
15.................... 22,657 8,609 14,091 23,631 8,509 13,991 23,531 100,000 100,000 100,000
20.................... 34,719 10,533 20,814 43,109 10,533 20,814 43,109 100,000 100,000 100,000
25.................... 50,113 11,572 28,590 74,616 11,572 28,590 74,616 100,000 100,000 142,517(4)
40.................... 126,840 3,317 59,038 334,730 3,317 59,038 334,730 100,000 100,000 408,370(4)
45.................... 167,685 0(3) 72,542 540,400 0(3) 72,542 540,400 0(3) 100,000 626,864(4)
50.................... 219,815 0(3) 90,236 870,425 0(3) 90,236 870,425 0(3) 100,000 931,354(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination," for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge," which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
31
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION B GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- -------------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1................ $ 1,050 $ 282 $ 317 $ 353 $ 0*(3) $ 0*(3) $ 0*(3) $100,282 $100,317 $100,353
2................ 2,153 957 1,058 1,164 257* 358* 464* 100,957 101,058 101,164
3................ 3,310 1,623 1,833 2,060 1,023 1,233 1,460 101,623 101,833 102,060
4................ 4,526 2,280 2,643 3,051 1,680 2,043 2,451 102,280 102,643 103,051
5................ 5,802 2,927 3,489 4,144 2,327 2,889 3,544 102,927 103,489 104,144
6................ 7,142 3,561 4,370 5,347 3,061 3,870 4,847 103,561 104,370 105,347
7................ 8,549 4,182 5,286 6,671 3,682 4,786 6,171 104,182 105,286 106,671
8................ 10,027 4,787 6,236 8,126 4,387 5,836 7,726 104,787 106,236 108,126
9................ 11,578 5,376 7,220 9,723 4,976 6,820 9,323 105,376 107,220 109,723
10................ 13,207 5,947 8,239 11,478 5,647 7,939 11,178 105,947 108,239 111,478
15................ 22,657 8,457 13,817 23,133 8,357 13,717 23,033 108,457 113,817 123,133
20................ 34,719 10,207 20,100 41,509 10,207 20,100 41,509 110,207 120,100 141,509
25................ 50,113 10,954 26,921 70,531 10,954 26,921 70,531 110,954 126,921 170,531
40................ 126,840 1,070 43,297 303,117 1,070 43,297 303,117 101,070 143,297 403,117
45................ 167,685 0(3) 40,967 483,503 0(3) 40,967 483,503 0(3) 140,967 583,503
50................ 219,815 0(3) 27,332 768,007 0(3) 27,332 768,007 0(3) 127,332 868,007
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination," for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
* The values indicated are based on the full surrender charges as described
under "Surrender Charge," which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
32
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION C GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- -------------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,050 $ 282 $ 317 $ 353 $ 0*(3) $ 0*(3) $ 0*(3) $100,282 $100,317 $100,353
2.............. 2,153 957 1,058 1,164 457* 558* 664* 100,957 101,058 101,164
3.............. 3,310 1,623 1,833 2,060 1,123 1,333 1,560 101,623 101,833 102,060
4.............. 4,526 2,280 2,643 3,051 1,780 2,143 2,551 102,280 102,643 103,051
5.............. 5,802 2,927 3,489 4,144 2,427 2,989 3,644 102,927 103,489 104,144
6.............. 7,142 3,561 4,370 5,347 3,161 3,970 4,947 103,561 104,370 105,347
7.............. 8,549 4,182 5,286 6,671 3,782 4,886 6,271 104,182 105,286 106,671
8.............. 10,027 4,787 6,236 8,126 4,487 5,936 7,826 104,787 106,236 108,126
9.............. 11,578 5,376 7,220 9,723 5,076 6,920 9,423 105,376 107,220 109,723
10.............. 13,207 5,947 8,239 11,478 5,647 7,939 11,178 105,947 108,239 111,478
15.............. 22,657 8,457 13,817 23,133 8,357 13,717 23,033 108,457 113,817 123,133
20.............. 34,719 10,207 20,100 41,509 10,207 20,100 41,509 110,207 120,100 141,509
25.............. 50,113 10,954 26,921 70,531 10,954 26,921 70,531 110,954 126,921 170,531
40.............. 126,840 1,070 43,297 303,117 1,070 43,297 303,117 101,070 143,297 403,117
45.............. 167,685 0(3) 40,963 488,943 0(3) 40,963 488,943 0(3) 143,297 567,174(4)
50.............. 219,815 0(3) 24,944 788,093 0(3) 24,944 788,093 0(3) 143,297 843,259(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit" for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
33
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION A CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- ----------------------------- -------------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- -------- ---------- ------- -------- ---------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,050 $ 381 $ 419 $ 458 $ 81* $ 119* $ 158* $100,000 $100,000 $ 100,000
2.............. 2,153 1,151 1,264 1,382 851* 964* 1,082* 100,000 100,000 100,000
3.............. 3,310 1,910 2,147 2,404 1,610 1,847 2,104 100,000 100,000 100,000
4.............. 4,526 2,659 3,071 3,533 2,359 2,771 3,233 100,000 100,000 100,000
5.............. 5,802 3,398 4,038 4,781 3,098 3,738 4,481 100,000 100,000 100,000
6.............. 7,142 4,128 5,049 6,161 3,928 4,849 5,961 100,000 100,000 100,000
7.............. 8,549 4,848 6,107 7,685 4,648 5,907 7,485 100,000 100,000 100,000
8.............. 10,027 5,558 7,213 9,370 5,358 7,013 9,170 100,000 100,000 100,000
9.............. 11,578 6,259 8,370 11,233 6,059 8,170 11,033 100,000 100,000 100,000
10.............. 13,207 6,937 9,566 13,277 6,737 9,366 13,077 100,000 100,000 100,000
15.............. 22,657 10,157 16,390 27,182 10,057 16,290 27,082 100,000 100,000 100,000
20.............. 34,719 13,006 24,775 49,985 13,006 24,775 49,985 100,000 100,000 110,967(3)
25.............. 50,113 15,371 35,018 87,082 15,371 35,018 87,082 100,000 100,000 166,327(3)
40.............. 126,840 17,073 81,940 403,674 17,073 81,940 403,674 100,000 100,000 492,483(3)
45.............. 167,685 13,028 105,599 659,227 13,028 105,599 659,227 100,000 122,495(3) 764,704(3)
50.............. 219,815 1,907 134,485 1,071,285 1,907 134,485 1,071,285 100,000 143,899(3) 1,146,275(3)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
34
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION B CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST ----------------------------- ----------------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- ---------- ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,050 $ 381 $ 419 $ 457 $ 0*(3) $ 0*(3) $ 0*(3)
2.............. 2,153 1,149 1,262 1,381 449* 562* 681*
3.............. 3,310 1,907 2,144 2,400 1,307 1,544 1,800
4.............. 4,526 2,654 3,066 3,526 2,054 2,466 2,926
5.............. 5,802 3,391 4,029 4,770 2,791 3,429 4,170
6.............. 7,142 4,117 5,036 6,143 3,617 4,536 5,643
7.............. 8,549 4,834 6,088 7,660 4,334 5,588 7,160
8.............. 10,027 5,540 7,188 9,336 5,140 6,788 8,936
9.............. 11,578 6,237 8,338 11,186 5,837 7,938 10,786
10.............. 13,207 6,908 9,524 13,213 6,608 9,224 12,913
15.............. 22,657 10,086 16,262 26,951 9,986 16,162 26,851
20.............. 34,719 12,858 24,454 49,279 12,858 24,454 49,279
25.............. 50,113 15,080 34,257 85,487 15,080 34,257 85,487
40.............. 126,840 15,327 73,311 393,041 15,327 73,311 393,041
45.............. 167,685 10,090 86,887 640,945 10,090 86,887 640,945
50.............. 219,815 0(3) 95,451 1,038,975 0(3) 95,451 1,038,975
<CAPTION>
TOTAL DEATH BENEFIT(2)
ASSUMING HYPOTHETICAL
GROSS ANNUAL INVESTMENT
END OF RATES OF RETURN OF
POLICY ----------------------------------
YEAR 0% 6% 12%
------ ----------- -------- -------------
<S> <C> <C> <C>
1.............. $100,381 $100,419 $ 100,457
2.............. 101,149 101,262 101,381
3.............. 101,907 102,144 102,400
4.............. 102,654 103,066 103,526
5.............. 103,391 104,029 104,770
6.............. 104,117 105,036 106,143
7.............. 104,834 106,088 107,660
8.............. 105,540 107,188 109,336
9.............. 106,237 108,338 111,186
10.............. 106,908 109,524 113,213
15.............. 110,086 116,262 126,951
20.............. 112,858 124,454 149,279
25.............. 115,080 134,257 185,487
40.............. 115,327 173,311 493,041
45.............. 110,090 186,887 743,496(4)
50.............. 0(3) 195,451 1,138,975
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. Zeros values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," on page 11 for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
35
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 25
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION C CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST ------------------------------ -----------------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12%
------ ----------- ------- -------- ---------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,050 $ 381 $ 419 $ 457 $ 0*(3) $ 0*(3) $ 0*(3)
2.............. 2,153 1,149 1,262 1,381 649* 762* 881*
3.............. 3,310 1,907 2,144 2,400 1,407 1,644 1,900
4.............. 4,526 2,654 3,066 3,526 2,154 2,566 3,026
5.............. 5,802 3,391 4,029 4,770 2,891 3,529 4,270
6.............. 7,142 4,117 5,036 6,143 3,717 4,636 5,743
7.............. 8,549 4,834 6,088 7,660 4,434 5,688 7,260
8.............. 10,027 5,540 7,188 9,336 5,240 6,888 9,036
9.............. 11,578 6,237 8,338 11,186 5,937 8,038 10,886
10.............. 13,207 6,908 9,524 13,213 6,608 9,224 12,913
15.............. 22,657 10,086 16,262 26,951 9,986 16,162 26,851
20.............. 34,719 12,858 24,454 49,279 12,858 24,454 49,279
25.............. 50,113 15,080 34,257 85,487 15,080 34,257 85,487
40.............. 126,840 15,327 73,311 393,041 15,327 73,311 393,041
45.............. 167,685 9,922 87,652 641,903 9,922 87,652 641,903
50.............. 219,815 0(3) 100,293 1,043,285 0(3) 100,293 1,043,285
<CAPTION>
TOTAL DEATH BENEFIT(2)
ASSUMING HYPOTHETICAL
GROSS ANNUAL INVESTMENT
END OF RATES OF RETURN OF
POLICY ----------------------------------
YEAR 0% 6% 12%
------ ----------- -------- -------------
<S> <C> <C> <C>
1.............. $100,381 $100,419 $ 100,457
2.............. 101,149 101,262 101,381
3.............. 101,907 102,144 102,400
4.............. 102,654 103,066 103,526
5.............. 103,391 104,029 104,770
6.............. 104,117 105,036 106,143
7.............. 104,834 106,088 107,660
8.............. 105,540 107,188 109,336
9.............. 106,237 108,338 111,186
10.............. 106,908 109,524 113,213
15.............. 110,086 116,262 126,951
20.............. 112,858 124,454 149,279
25.............. 115,080 134,257 185,487
40.............. 115,327 173,311 493,041
45.............. 115,327 173,311 744,608(4)
50.............. 0(3) 173,311 1,116,315(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,000 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies, see "Death Benefit Options--Minimum Death
Benefit" for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
36
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION A GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- ----------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1................... $ 1,748 $ 767 $ 835 $ 903 $ 0*(3) $ 35* $ 103* $100,000 $100,000 $100,000
2................... 3,584 1,893 2,090 2,295 1,193* 1,390* 1,595* 100,000 100,000 100,000
3................... 5,511 2,979 3,376 3,807 2,279 2,676 3,107 100,000 100,000 100,000
4................... 7,535 4,024 4,696 5,453 3,324 3,996 4,753 100,000 100,000 100,000
5................... 9,660 5,026 6,047 7,243 4,426 5,447 6,643 100,000 100,000 100,000
6................... 11,891 5,985 7,432 9,195 5,385 6,832 8,595 100,000 100,000 100,000
7................... 14,234 6,899 8,850 11,323 6,399 8,350 10,823 100,000 100,000 100,000
8................... 16,694 7,767 10,302 13,648 7,267 9,802 13,148 100,000 100,000 100,000
9................... 19,277 8,588 11,787 16,191 8,188 11,387 15,791 100,000 100,000 100,000
10................... 21,989 9,359 13,306 18,974 8,959 12,906 18,574 100,000 100,000 100,000
15................... 37,725 12,275 21,301 37,469 12,175 21,201 37,369 100,000 100,000 100,000
20................... 57,808 13,100 29,728 67,674 13,100 29,728 67,674 100,000 100,000 100,000
25................... 83,439 10,748 38,235 118,179 10,748 38,235 118,179 100,000 100,000 144,179(4)
30................... 116,152 2,738 46,016 198,724 2,738 46,016 198,724 100,000 100,000 230,520(4)
35................... 157,902 0(3) 51,630 327,951 0(3) 51,630 327,951 0(3) 100,000 350,908(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. The zero value in cash surrender value
in the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
37
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION B GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- -------------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
- ------------------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1................ $ 1,748 $ 763 $ 831 $ 899 $ 0*(3) $ 0*(3) $ 0*(3) $100,763 $100,831 $100,899
2................ 3,584 1,882 2,078 2,282 482* 678* 882* 101,882 102,078 102,282
3................ 5,511 2,956 3,351 3,778 1,656 2,051 2,478 102,956 103,351 103,778
4................ 7,535 3,984 4,649 5,397 2,784 3,449 4,197 103,984 104,649 105,397
5................ 9,660 4,964 5,971 7,149 3,764 4,771 5,949 104,964 105,971 107,149
6................ 11,891 5,894 7,316 9,046 4,794 6,216 7,946 105,894 107,316 109,046
7................ 14,234 6,772 8,681 11,099 5,772 7,681 10,099 106,772 108,681 111,099
8................ 16,694 7,598 10,067 13,324 6,698 9,167 12,424 107,598 110,067 113,324
9................ 19,277 8,368 11,470 15,735 7,568 10,670 14,935 108,368 111,470 115,735
10................ 21,989 9,079 12,886 18,345 8,379 12,186 17,645 109,079 112,886 118,345
15................ 37,725 11,529 19,924 34,923 11,429 19,824 34,823 111,529 119,924 134,923
20................ 57,808 11,530 26,078 59,145 11,530 26,078 59,145 111,530 126,078 159,145
25................ 83,439 7,995 29,704 94,312 7,995 29,704 94,312 107,995 129,704 194,312
30................ 116,152 0(3) 27,595 144,512 0(3) 27,595 144,512 0(3) 127,595 244,512
35................ 157,902 0(3) 14,230 214,817 0(3) 14,230 214,817 0(3) 114,230 314,817
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
38
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION C GUARANTEED COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------------- -------------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% $ 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,748 $ 763 $ 831 $ 899 $ 0*(3) $ 0*(3) $ 0*(3) $100,763 $100,831 $100,899
2.............. 3,584 1,882 2,078 2,282 782* 978* 1,182* 101,882 102,078 102,282
3.............. 5,511 3,956 3,351 3,778 1,956 2,351 2,778 102,956 103,351 103,778
4.............. 7,535 3,984 4,649 5,397 2,984 3,649 4,397 103,984 104,649 105,397
5.............. 9,660 4,964 5,971 7,149 4,064 5,071 6,249 104,964 105,971 107,149
6.............. 11,891 5,894 7,316 9,046 4,994 6,416 8,146 105,894 107,316 109,046
7.............. 14,234 6,772 8,681 11,099 5,972 7,881 10,299 106,772 108,681 111,099
8.............. 16,694 7,598 10,067 13,324 6,898 9,367 12,624 107,598 110,067 113,324
9.............. 19,277 8,368 11,470 15,735 7,768 10,870 15,135 108,368 111,470 115,735
10.............. 21,989 9,079 12,886 18,345 8,479 12,286 17,745 109,079 112,886 118,345
15.............. 37,725 11,529 19,924 34,923 11,429 19,824 34,823 111,529 119,924 134,923
20.............. 57,808 11,530 26,078 59,145 11,530 26,078 59,145 111,530 126,078 159,145
25.............. 83,439 7,995 29,704 94,312 7,995 29,704 94,312 107,995 129,704 194,312
30.............. 116,152 0(3) 27,679 149,726 0(3) 27,679 149,726 0(3) 129,704 194,312
35.............. 157,902 0(3) 12,216 248,624 0(3) 12,216 248,624 0(3) 129,704 266,028(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash value, cash surrender value and death benefit indicate
termination of insurance coverage in the absence of a sufficient
additional premium payment; see "Payment and Allocation of Premiums--
Termination" for further details. Zero values in cash surrender value in
the first Policy year will not cause coverage to terminate since
illustrations assume payment of at least minimum allowable planned premium
(see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit" for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
39
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK
SPECIFIED FACE AMOUNT: $100,000--DEATH BENEFIT OPTION A
CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST ------------------------- --------------------------- -----------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- -------- -------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1................... $ 1,748 $ 957 $ 1,031 $ 1,105 $ 157* $ 231* $ 305* $100,000 $100,000 $100,000
2................... 3,584 2,295 2,515 2,745 1,595* 1,815* 2,045* 100,000 100,000 100,000
3................... 5,511 3,602 4,055 4,545 2,902 3,355 3,845 100,000 100,000 100,000
4................... 7,535 4,878 5,651 6,519 4,178 4,951 5,819 100,000 100,000 100,000
5................... 9,660 6,123 7,308 8,688 5,523 6,708 8,088 100,000 100,000 100,000
6................... 11,891 7,341 9,029 11,074 6,741 8,429 10,474 100,000 100,000 100,000
7................... 14,234 8,529 10,816 13,700 8,029 10,316 13,200 100,000 100,000 100,000
8................... 16,694 9,690 12,676 16,592 9,190 12,176 16,092 100,000 100,000 100,000
9................... 19,277 10,824 14,610 19,780 10,424 14,210 19,380 100,000 100,000 100,000
10................... 21,989 11,919 16,610 23,285 11,519 16,210 22,885 100,000 100,000 100,000
15................... 37,725 16,854 27,798 47,006 16,754 27,698 46,906 100,000 100,000 100,000
20................... 57,808 20,621 41,143 86,042 20,621 41,143 86,042 100,000 100,000 115,296(3)
25................... 83,439 22,958 57,341 149,834 22,958 57,341 149,834 100,000 100,000 182,798(3)
30................... 116,152 22,195 77,053 252,583 22,195 77,053 252,583 100,000 100,000 292,997(3)
35................... 157,902 15,304 102,596 418,286 15,304 102,596 418,286 100,000 109,778(3) 447,566(3)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
40
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION B CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2)
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL TOTAL DEATH BENEFIT(2)
PREMIUMS GROSS ANNUAL GROSS ANNUAL ASSUMING HYPOTHETICAL
ACCUMULATED INVESTMENT INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST --------------------- ------------------------- -----------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------ ------ ------- ------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1...................... 1,748 955 1,029 1,103 0*(3) 0*(3) 0*(3) 100,955 101,029 101,103
2...................... 3,584 2,290 2,511 2,740 890* 1,111* 1,340* 102,290 102,511 102,740
3...................... 5,511 3,592 4,044 4,533 2,292 2,744 3,233 103,592 104,044 104,533
4...................... 7,535 4,861 5,631 6,496 3,661 4,431 5,296 104,861 105,631 106,496
5...................... 9,660 6,096 7,275 8,648 4,896 6,075 7,448 106,096 107,275 108,648
6...................... 11,891 7,300 8,977 11,009 6,200 7,877 9,909 107,300 108,977 111,009
7...................... 14,234 8,472 10,741 13,600 7,472 9,741 12,600 108,472 110,741 113,600
8...................... 16,694 9,614 12,570 16,447 8,714 11,670 15,547 109,614 112,570 116,447
9...................... 19,277 10,724 14,466 19,575 9,924 13,666 18,775 110,724 114,466 119,575
10...................... 21,989 11,789 16,417 22,998 11,089 15,717 22,298 111,789 116,417 122,998
15...................... 37,725 16,476 27,118 45,775 16,376 27,018 45,675 116,476 127,118 145,775
20...................... 57,808 19,718 39,167 81,699 19,718 39,167 81,699 119,718 139,167 181,699
25...................... 83,439 21,103 52,333 138,605 21,103 52,333 138,605 121,103 152,333 238,605
30...................... 116,152 18,490 64,303 227,044 18,490 64,303 227,044 118,490 164,303 327,044
35...................... 157,902 8,721 70,855 362,873 8,721 70,855 362,873 108,721 170,855 462,873
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash surrender value in the first Policy year will not
cause coverage to terminate since illustrations assume payment of at least
minimum allowable planned premium (see "Premiums--Payment of Premiums").
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
41
<PAGE>
FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICY(1)
MALE ISSUE AGE 40
STANDARD NONSMOKER UNDERWRITING RISK SPECIFIED FACE AMOUNT: $100,000--DEATH
BENEFIT OPTION C CURRENT COST OF TERM INSURANCE CHARGES
<TABLE>
<CAPTION>
TOTAL CASH
TOTAL CASH VALUE(2) SURRENDER VALUE(2) TOTAL DEATH BENEFIT(2)
PREMIUMS ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
ACCUMULATED GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF AT 5% RATES OF RETURN OF RATES OF RETURN OF RATES OF RETURN OF
POLICY INTEREST ------------------------ -------------------------------- --------------------------
YEAR PER YEAR 0% 6% 12% 0% 6% 12% 0% 6% 12%
------ ----------- ------- ------- -------- ------- ------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.............. $ 1,748 $ 955 $ 1,029 $ 1,103 $ 0*(3) $ 0*(3) $ 0*(3) $100,955 $101,029 $101,103
2.............. 3,584 2,290 2,511 2,740 1,190* 1,411* 1,640* 102,290 102,511 102,740
3.............. 5,511 3,592 4,044 4,533 2,592 3,044 3,533 103,592 104,044 104,533
4.............. 7,535 4,861 5,631 6,496 3,861 4,631 5,496 104,861 105,631 106,496
5.............. 9,660 6,096 7,275 8,648 5,196 6,375 7,748 106,096 107,275 108,648
6.............. 11,891 7,300 8,977 11,009 6,400 8,077 10,109 107,300 108,977 111,009
7.............. 14,234 8,472 10,741 13,600 7,672 9,941 12,800 108,472 110,741 113,600
8.............. 16,694 9,614 12,570 16,447 8,914 11,870 15,747 109,614 112,570 116,447
9.............. 19,277 10,724 14,466 19,575 10,124 13,866 18,975 110,724 114,466 119,575
10.............. 21,989 11,789 16,417 22,998 11,189 15,817 22,398 111,789 116,417 122,998
15.............. 37,725 16,476 27,118 45,775 16,376 27,018 45,675 116,476 127,118 145,775
20.............. 57,808 19,718 39,167 81,699 19,718 39,167 81,699 119,718 139,167 181,699
25.............. 83,439 21,103 52,333 138,605 21,103 52,333 138,605 121,103 152,333 238,605
30.............. 116,152 18,476 65,023 231,369 18,476 65,023 231,369 121,103 152,333 268,388(4)
35.............. 157,902 7,647 75,193 383,999 7,647 75,193 383,999 121,103 152,333 410,879(4)
</TABLE>
- -------
(1) Assumes annual planned premium payments of $1,665 paid in full at
beginning of each Policy year. The values would vary from those shown if
the amount or frequency of payments varies.
(2) Assumes no policy loan or partial withdrawal has been made. Excessive
loans or withdrawals, adverse investment performance or insufficient
premium payments may cause the Policy to terminate because of insufficient
cash value.
(3) Zero values in cash surrender value in the first Policy year will not
cause coverage to terminate since illustrations assume payment of at least
minimum allowable planned premium (see "Premiums--Payment of Premiums").
(4) Minimum death benefit applies; see "Death Benefit Options--Minimum Death
Benefit," for further details.
* The values indicated are based on the full surrender charges as described
under "Surrender Charge", which determine whether a Policy will terminate
and the amount a Policy owner may borrow or partially withdraw. If the
Policy were to terminate or be fully surrendered, a refund of excess sales
charges may be paid (see "Surrender Charge--Excess Sales Charge").
IT IS EMPHASIZED THAT THE HYPOTHETICAL INVESTMENT RATES OF RETURN SHOWN ABOVE
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RATES OF RETURN. ACTUAL INVESTMENT RATES OF RETURN MAY BE
MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON A NUMBER OF FACTORS,
INCLUDING THE PREMIUM AND CASH VALUE ALLOCATIONS MADE BY AN OWNER AND THE
DIFFERENT RATES OF RETURN OF THE FUND PORTFOLIOS. THE DEATH BENEFIT, CASH
VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL INVESTMENT RATES OF RETURN AVERAGED 0%, 6% AND 12% OVER A
PERIOD OF YEARS, BUT FLUCTUATED ABOVE OR BELOW THOSE AVERAGES FOR INDIVIDUAL
POLICY YEARS OR IF ANY PREMIUMS WERE ALLOCATED OR CASH VALUE TRANSFERRED TO
THE FIXED ACCOUNT. NO REPRESENTATIONS CAN BE MADE BY METROPOLITAN LIFE OR THE
FUND THAT THESE HYPOTHETICAL RATES OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR
OR SUSTAINED OVER ANY PERIOD OF TIME.
42
<PAGE>
...............................................................
POLICY RIGHTS
................................................................................
The description of rights under the Policy set forth below assumes that no
riders are in effect. See the Appendix to Prospectus, for a discussion of how
these rights may be affected by certain riders under the Policy.
LOAN PRIVILEGES
Policy Loan. At any time, the Policy owner may borrow money from Metropolitan
Life using the Policy as the only security for the loan. The smallest amount
the Policy owner can borrow at any one time is $250. The maximum amount that
may be borrowed at any time is the loan value. The loan value equals the cash
surrender value less two monthly deductions or, if greater, 75% (90% for Poli-
cies issued in Virginia or Maryland) of the cash surrender value (or, in Texas,
the Policy's cash surrender value less two monthly deductions or 100% of the
cash surrender value in the Fixed Account and 75% of the cash surrender value
in the Separate Account, if greater). For situations where a Policy loan may be
treated as a taxable distribution, see "Federal Tax Matters."
Allocation of Policy Loan. Metropolitan Life will allocate a Policy loan
among the Fixed Account and the investment divisions of the Separate Account on
a Pro Rata Basis.
Interest. The interest charged on a Policy loan accrues daily. The interest
rate is a fixed rate of 8% per year. Interest payments are due at the end of
each Policy year. If unpaid within 31 days after it is due, interest will be
treated as a new loan subject to the interest rates applicable at that time and
an amount equal to such interest due will be transferred from the Fixed Account
and the investment divisions of the Separate Account on a Pro Rata Basis to the
Policy Loan Account.
The Tax Reform Act of 1986 phased out the consumer interest deduction for
federal income tax purposes. Thus, for individuals, interest paid to Metropoli-
tan Life in connection with policy loans used for consumer purposes is no
longer deductible.
The Tax Reform Act of 1986 also changed the law with respect to the
deductibility of interest on policyholder loans on life insurance policies
owned by businesses. In the case of life insurance policies owned by a taxpayer
covering the life of an individual who is an officer or employee, or is
financially interested in the taxpayer's trade or business, the interest paid
on the policy loan is not deductible to the extent that the aggregate
indebtedness, under all the policies covering such person, exceeds $50,000.
Proposed legislation would phase out such deductions for Policy loan interest
relating to new and inforce Policies. Counsel and other competent advisors
should be consulted with respect to the deductibility of Policy loan interest
for income tax purposes. (See "Federal Tax Matters.")
Effect of a Policy Loan. As of the Date of Receipt of the loan request, cash
value equal to the portion of the Policy loan allocated to the Fixed Account
and to each investment division will be transferred from the Fixed Account
and/or such investment divisions to a Policy Loan Account within the General
Account, reducing the Policy's cash value in the accounts from which the trans-
fer was made.
Cash value in the Policy Loan Account equal to indebtedness will be credited
with interest at a rate equal to the fixed rate charged less a percentage
charge, based on expenses associated with Policy loans, determined by Metropol-
itan Life. Presently, this charge is 2%. Thus, the interest rate presently
credited is 6%. The minimum rate credited to the Policy Loan Account will be 4%
per year. NO ADDITIONAL INTEREST WILL BE CREDITED TO THE CASH VALUE IN THE POL-
ICY LOAN ACCOUNT, NOR WILL THE CASH VALUE IN THE POLICY LOAN ACCOUNT PARTICI-
PATE IN ANY INVESTMENT EXPERIENCE APPLICABLE TO THE SEPARATE ACCOUNT.
The Policy's cash value in the Policy Loan Account will be the outstanding
indebtedness on the valuation date plus any interest credited to the Policy
Loan Account which has not yet been allocated to the Fixed Account or the in-
vestment divisions of the Separate Account as of the Valuation Date. Interest
credited to amounts in the Policy Loan Account will be allocated at least once
a year among the Fixed Account and the investment divisions of the Separate Ac-
count in the same proportion as the net premiums are then being allocated.
Indebtedness. Indebtedness equals the outstanding Policy loan plus accrued
interest thereon. If, on a monthly anniversary, indebtedness exceeds the cash
value minus the monthly deduction, Metropolitan Life will notify the Policy
owner and any assignee of record. If a sufficient payment is not made to Metro-
politan Life within 61 days from the monthly anniversary, the Policy will ter-
minate without value. The Policy may, however, later be reinstated, subject to
certain conditions (see "Policy Termination and Reinstatement").
Repayment of Indebtedness. Indebtedness may be repaid any time before the Fi-
nal Date while the insured is living. The minimum repayment is $50. If not re-
paid, Metropolitan Life will deduct indebtedness from any amount payable under
the Policy. As of the Date of Receipt of the repayment, the Policy's cash value
in the Policy Loan Account securing indebtedness will be allocated among the
Fixed Account and the investment divisions of the Separate Account in the same
proportion that net premiums are being allocated to those accounts at the time
of repayment. The Policy owner should designate whether a payment is intended
as a loan repayment or a premium payment. Any payment for which
43
<PAGE>
...............................................................
no designation is made will be treated as a premium payment.
SURRENDER AND WITHDRAWAL PRIVILEGES
Subject to the limitations set forth below, at any time before the earlier of
the death of the insured and the Final Date, the Policy owner may make a par-
tial withdrawal or totally surrender the Policy by sending a written request to
Metropolitan Life. The maximum amount available for surrenders or withdrawal is
the cash surrender value on the Date of Receipt of the request. No charge will
be imposed on partial withdrawals. See "Charges and Deductions--Surrender
Charge" for a discussion of surrender charges. For any tax consequences in con-
nection with a partial withdrawal or surrender, see "Federal Tax Matters".
Surrenders. The Policy owner may surrender the Policy for its cash surrender
value. If the Policy is being surrendered, Metropolitan Life may require that
the Policy itself be returned along with the request. A Policy owner may elect
to have the proceeds paid in a single sum or applied under an optional income
plan (see "Appendix to Prospectus"). If the insured dies after the surrender of
the Policy and payment to the Policy owner of the cash surrender value but be-
fore the end of the Policy month in which the surrender occurred, a death bene-
fit will be payable to the beneficiary in an amount equal to the difference be-
tween the Policy's death benefit and cash value, both computed as of the sur-
render date.
Partial Withdrawals. The Policy owner may make a partial withdrawal from the
Policy's cash surrender value. The minimum partial withdrawal is $250. There is
no charge for a partial withdrawal. The amount withdrawn will be deducted from
the Policy's cash value as of the Date of Receipt. The amount will be deducted
from the Fixed Account and the investment divisions of the Separate Account on
a Pro Rata Basis.
When death benefit Option A, or Option C on and after policy anniversary 65,
is in effect, any partial withdrawal will reduce the specified face amount, and
thus the death benefit, by the amount withdrawn. When death benefit Option B,
or Option C prior to policy anniversary 65, is in effect, the amount withdrawn
will not reduce the specified face amount. However, the death benefit will be
reduced by the amount withdrawn. If increases in the specified face amount pre-
viously have occurred, a partial withdrawal when Death Benefit Option A, or Op-
tion C on and after policy anniversary 65, is in effect will reduce the speci-
fied face amount in the same manner as would a direct request by the Policy
owner to reduce the specified face amount (see "Policy Benefits--Decreases"). A
decrease in specified face amount may affect the Policy's status as a modified
endowment contract for tax purposes (see "Federal Tax Matters").
A Policy owner will not be permitted to make any partial withdrawal that
would reduce the specified face amount of the Policy below the Minimum Initial
Specified Face Amount in the first five Policy years or one-half the Minimum
Initial Specified Face Amount thereafter (see "Policy Benefits--Decreases"), or
that would result in total premiums paid exceeding the then current maximum
premium limitation determined by Internal Revenue Service Code (see "Premiums--
Premium Limitations"). In no case will a partial withdrawal be permitted that
would reduce the specified face amount below $25,000. A partial withdrawal will
also not be permitted unless the resulting cash surrender value would be suffi-
cient to pay at least two monthly deductions. Any time a request for a partial
withdrawal is received that would reduce the specified face amount below the
minimum face amount, result in total premiums paid exceeding maximum premium
limitations, or reduce the cash surrender value below two monthly deductions,
Metropolitan Life will not implement the partial withdrawal request, but will
contact the Policy owner as to whether the request should be withdrawn or re-
duced to a smaller amount or changed to a request for the full cash surrender
value.
EXCHANGE PRIVILEGE
During the first 24 Policy months following the issuance of the Policy, the
Policy owner may exercise the Policy exchange privilege, which results in the
transfer at any one time of the entire amount in the Separate Account to the
Fixed Account, and the allocation of all future net premiums to the Fixed Ac-
count. This will, in effect, serve as an exchange of the Policy for the equiva-
lent of a flexible premium fixed benefit life insurance policy. No charge will
be imposed on such transfer in exercising this exchange privilege. Moreover,
the Policy owner may subsequently transfer amounts back to one or more of the
investment divisions of the Separate Account at any time, within the limita-
tions described in "Allocation of Premiums and Cash Value--Cash Value Trans-
fers". Similarly, during the first 24 months following an increase in the spec-
ified face amount requested by the Owner, the Owner may request a one time
charge-free transfer of the Separate Account cash value attributable to the in-
crease to the Fixed Account, including a transfer in the amount of any premium
payments that have been deemed attributable to the increase (see "Charges and
Deductions--Excess Sales Charge").
In those states which require it, the Policy owner may also, during the first
24 Policy months following the issuance of the Policy, without charge, on one
occasion exchange any Policy still in force for a flexible premium fixed
benefit life insurance policy issued by Metropolitan Life. Upon such exchange,
the Policy's cash value will be transferred to the general account of
Metropolitan Life.
44
<PAGE>
...............................................................
THE FIXED ACCOUNT
...............................................................................
A Policy owner may allocate net premiums and transfer cash value to the
Fixed Account, which is part of the General Account of Metropolitan Life. Be-
cause of exemptive and exclusionary provisions, interests in the Fixed Account
have not been registered under the Securities Act of 1933 and neither the
Fixed Account nor the General Account has been registered as an investment
company under the 1940 Act. Accordingly, neither the General Account, the
Fixed Account nor any interests therein are generally subject to the provi-
sions of these Acts and Metropolitan Life has been advised that the staff of
the Securities and Exchange Commission has not reviewed the disclosures in
this Prospectus relating to the Fixed Account. Disclosures regarding the Fixed
Account may, however, be subject to certain generally applicable provisions of
the Federal securities laws relating to the accuracy and completeness of
statements made in prospectuses.
GENERAL DESCRIPTION
This Prospectus is generally intended to serve as a disclosure document only
for the aspects of the Policy involving the Separate Account and contains only
selected information regarding the Fixed Account. For complete details regard-
ing the Fixed Account, see the Policy itself.
The General Account consists of all assets owned by Metropolitan Life other
than those in the Separate Account and other legally-segregated separate ac-
counts. Subject to applicable law, Metropolitan Life has sole discretion over
the investment of the assets of the General Account, including those in the
Fixed Account. Unlike the assets of the Separate Account, the assets in the
Fixed Account, as a part of the General Account, are chargeable with liabili-
ties arising out of any other business of Metropolitan Life.
A Policy owner may elect to allocate net premiums to the Fixed Account or to
transfer cash value from the investment divisions of the Separate Account to
the Fixed Account. The allocation or transfer of funds to the Fixed Account
does not entitle a Policy owner to share in the investment experience of the
General Account. Instead, Metropolitan Life guarantees that cash value in the
Fixed Account will accrue interest at an effective annual rate of at least 4%,
independent of the actual investment experience of the General Account. Metro-
politan Life is not obligated to credit interest at any higher rate, although
Metropolitan Life may, in its sole discretion, do so.
FIXED ACCOUNT BENEFITS
The Policy owner may select death benefit Option A or B under the Policy.
For Policies issued on or after May 1, 1994 and provided death benefit Option
C is available in the state where the Policy is issued, the Policy owner may
also select death benefit Option C. The Policy owner may change such option or
the Policy's specified face amount, subject to satisfactory evidence of insur-
ability where required and subject to all the conditions and limitations ap-
plicable to such transactions generally (see "Policy Benefits--Death Bene-
fits").
FIXED ACCOUNT CASH VALUE
Net premiums allocated to the Fixed Account are credited to the Policy. Met-
ropolitan Life guarantees that interest credited to each Policy owner's cash
value in the Fixed Account will not be less than an effective annual rate of
at least 4% per year. This is the rate that will be credited to the first
$1,000 of cash value in the Fixed Account. Metropolitan Life may declare any
rate of interest in excess of 4% at any time to be credited to amounts of cash
value in the Fixed Account in excess of $1,000, subject to the following con-
ditions: Metropolitan Life will not change the rate of excess interest on any
premiums paid during any month of the year before the first day of the same
month of the subsequent year; thereafter, Metropolitan Life will not change
the rate of excess interest for a period of twelve months from the date de-
clared. Metropolitan Life has also established multiple bands of excess inter-
est. This means that different rates of excess interest may apply to premium
payments made in different months of the year and at the end of each twelve-
month period, and different rates of excess interest may apply to cash value
related to premiums received in a given month of each prior year. Transfers
made into the Fixed Account will be treated as new premium payments for these
purposes.
The guaranteed and excess interest are credited each Valuation Date. Once
credited, that interest will be guaranteed and become part of the Policy's
cash value in the Fixed Account. The monthly deduction will be charged against
the most recent premiums paid and interest credited thereto.
ANY INTEREST METROPOLITAN LIFE CREDITS ON THE POLICY'S CASH VALUE IN THE
FIXED ACCOUNT IN EXCESS OF THE GUARANTEED RATE OF 4% PER YEAR WILL BE DETER-
MINED IN THE SOLE DISCRETION OF METROPOLITAN LIFE. THE POLICY OWNER ASSUMES
THE RISK THAT INTEREST CREDITED TO AMOUNTS OF CASH VALUE IN THE FIXED ACCOUNT
IN EXCESS OF $1,000 MAY NOT EXCEED THE GUARANTEED MINIMUM RATE OF 4% PER YEAR.
The cash value in the Fixed Account will be calculated on each Valuation Date.
The Policy's cash value in the Fixed Account will reflect the amount and
frequency of premium payments allocated to the Fixed Account, the amount of
interest credited to amounts in the Fixed Account, any partial withdrawals,
any transfers from or to the investment divisions of the Separate Account, any
Policy
45
<PAGE>
...............................................................
indebtedness and any charges imposed on amounts in the Fixed Account in connec-
tion with the Policy.
The portion of the monthly deduction attributable to the Fixed Account will
be determined as of the actual monthly anniversary, even if the monthly anni-
versary does not fall on a Valuation Date.
TRANSFERS, WITHDRAWALS, SURRENDERS, AND POLICY LOANS
Amounts in the Fixed Account are subject to the same rights and limitations
as are amounts allocated to the investment divisions of the Separate Account
with respect to transfers, withdrawals, surrenders and Policy loans (see "Allo-
cation of Premiums and Cash Value--Cash Value Transfers;" "Loan Privileges,"
and "Surrender and Withdrawal Privileges").
Metropolitan Life reserves the right to delay transfers, withdrawals, surren-
ders and the payment of the Policy loans allocated to the Fixed Account for up
to six months (see "Other Policy Provisions--Payment and Deferment"). Payments
to pay premiums on another policy with Metropolitan Life will not be delayed.
RIGHTS RESERVED BY METROPOLITAN LIFE
................................................................................
Metropolitan Life reserves the right to make certain changes if, in its judg-
ment, they would best serve the interests of the Policy owners or would be ap-
propriate in carrying out the purposes of the Policies. Any changes will be
made only to the extent and in the manner permitted by applicable laws. Also,
when required by law, Metropolitan Life will obtain Policy owner approval of
the changes and approval from any appropriate regulatory authority. Examples of
the changes Metropolitan Life may make include:
. To operate the Separate Account in any form permitted under the 1940 Act or
in any other form permitted by law.
. To take any action necessary to comply with or obtain and continue any ex-
emptions from the 1940 Act.
. To transfer any assets in any investment division to another investment di-
vision, or to one or more separate accounts, or to the Fixed Account; or to
add, combine or remove investment divisions in the Separate Account.
. To substitute, for the Fund shares held in any investment division, the
shares of another portfolio of the Fund or the shares of another investment
company or any other investment permitted by law.
. To change the way Metropolitan Life assesses charges, but without increas-
ing the aggregate amount charged to the Fixed Account and the Separate Ac-
count in connection with the Policies.
. To make any other necessary technical changes in the Policy in order to
conform with any action the above provisions permit Metropolitan Life to
take.
If any of these changes result in a material change in the underlying invest-
ments of an investment division to which the net premiums of a Policy are allo-
cated. Metropolitan Life will notify the Policy owner of such change, and the
owner may then make a new choice of investment divisions or the Fixed Account
without charge.
OTHER POLICY PROVISIONS
................................................................................
Owner. The owner of a Policy is the insured unless another owner has been
named in the application for the Policy. The owner is entitled to exercise all
rights under a Policy while the insured is alive, including the right to name a
new owner or a contingent owner who would become the Policy owner if the owner
should die before the insured dies.
Beneficiary. The beneficiary is the person or persons to whom the insurance
proceeds are payable upon the insured's death. The owner may name a contingent
beneficiary to become the beneficiary if all the beneficiaries die while the
insured is alive. If no beneficiary or contingent beneficiary is alive when the
insured dies, the owner (or the owner's estate) will be the beneficiary. While
the insured is alive, the owner may change any beneficiary or contingent bene-
ficiary.
If more than one beneficiary is alive when the insured dies, they will be
paid in equal shares, unless the owner has chosen otherwise.
Incontestability. Metropolitan Life will not contest the validity of a Policy
after it has been in force during the insured's lifetime for two years from the
Date of Policy (or date of reinstatement if a terminated Policy is reinstated)
except with respect to certain optional insurance benefits that may be added
subsequent to the Date of Policy. Metropolitan Life will not contest the valid-
ity of any increase in the death benefit after such increase has been in force
during the insured's lifetime for two years from its effective date.
Suicide. The insurance proceeds will not be paid if the insured commits sui-
cide, while sane or insane, within two years (one year in Colorado and North
Dakota) from the Date of Policy. Instead, Metropolitan Life will pay the bene-
ficiary an amount equal to all premiums paid for the Policy, without interest,
less any outstanding Policy loan and accrued loan interest and less any partial
cash withdrawal. If the insured commits suicide, while sane or insane, more
than two years after the Date of Policy but within two years (one year in Colo-
rado and North Dakota) from the effective date of any increase in the death
benefit, Metropolitan Life's liability with respect to such increase will be
limited to the cost thereof.
46
<PAGE>
...............................................................
Age and Sex. If the insured's age or sex as stated in the application for a
Policy is not correct, benefits under a Policy will be adjusted to reflect the
correct age and sex.
Collateral Assignment. The owner may assign a Policy as collateral. All
rights under the Policy will be transferred to the extent of the assignee's
interest. Metropolitan Life is not bound by an assignment or release thereof,
unless it is in writing and is recorded at the Designated Office. Metropolitan
Life is not responsible for the validity of any assignment or release thereof.
Payment and Deferment. With respect to amounts in the investment divisions
of the Separate Account, payment of the death benefit, all or a portion of the
cash surrender value, free look proceeds or a loan will ordinarily be made
within seven days after the Date of Receipt of all documents required for such
payment. Metropolitan Life will pay interest on the amount of death benefit at
a rate which is currently 6% per year (or such higher rate as may be required
by state law) from the date of death until the date of payment of the death
benefit.
However, Metropolitan Life may defer the determination, application or pay-
ment of any such amount or any transfer of cash value to the Separate Account
for any period during which the New York Stock Exchange is closed (other than
customary weekend and holiday closings), for any period during which any emer-
gency exists as a result of which it is not reasonably practicable for Metro-
politan Life to determine the investment experience for a Policy or for such
other periods as the Securities and Exchange Commission may by order permit
for the protection of Policy owners provided the delay is permitted under New
York State Insurance Law and regulations. Metropolitan Life will not defer a
loan used to pay premiums on other policies issued by it.
As with traditional life insurance, Metropolitan Life can delay payment of
the entire insurance proceeds or other Policy benefits if entitlement to pay-
ment is being questioned or is uncertain.
Dividends. The Policies are nonparticipating. This means that they are not
eligible for dividends, and they do not participate in any distribution of
Metropolitan Life's surplus.
The description throughout this Prospectus of the features of the Policies
is subject to the specific terms of the Policies.
SALES AND ADMINISTRATION OF THE POLICIES
...............................................................................
Metropolitan Life performs the sales and administrative services relating to
the Policies. The offices of Metropolitan Life which may administer the Poli-
cies are located in: Aurora, Illinois; Johnstown, Pennsylvania; Pearl River,
New York; Princeton, New Jersey; San Ramon, California; Tampa, Florida; Tulsa,
Oklahoma; and Warwick, Rhode Island. Each Policy owner will be notified which
office will be the Designated Office for servicing the Policy. Metropolitan
Life may name different Designated Offices for different transactions.
Metropolitan Life acts as the principal underwriter (distributor) of the
Policies as defined in the 1940 Act (see "Distribution of the Policies," be-
low). In addition to selling insurance and annuities, Metropolitan Life also
serves as investment adviser to certain other advisory clients, and is also
principal underwriter for Metropolitan Tower Separate Accounts One and Two of
Metropolitan Tower Life Insurance Company, a wholly-owned subsidiary of Metro-
politan Life, and Metropolitan Life Separate Account E of Metropolitan Life,
each of which is registered as a unit investment trust under the 1940 Act. Fi-
nally, Metropolitan Life acts as principal underwriter for an earlier form of
the flexible premium multifunded life insurance policy, for a flexible premium
variable life insurance policy and for group variable universal life insurance
policies, premiums for which may also be allocated to the Separate Account.
Bonding. The directors, officers and employees of Metropolitan Life are
bonded in the amount of $50,000,000, subject to a $5,000,000 deductible.
DISTRIBUTION OF THE POLICIES
...............................................................................
The Policies will be sold by individuals who are licensed life insurance
sales representatives and registered representatives of Metropolitan Life, the
principal underwriter of the Policies. Metropolitan Life is registered with
the Securities and Exchange Commission under the Securities Exchange Act of
1934 as a broker-dealer and is a member of the National Association of Securi-
ties Dealers, Inc. The Policies may in the future be sold through other regis-
tered broker-dealers, including MetLife Securities, Inc., a wholly owned bro-
ker-dealer subsidiary of Metropolitan Life. Maximum commissions payable during
the first policy year to writing representatives employed by MetLife will be
45% of the target premium for a Policy where the Policy owner chooses death
benefit Option A at issue, 50% of the Option A target premium for a Policy
where Option C is chosen and 55% of the Option A target premium for a Policy
where Option B is chosen, plus, in any case, 3% of the excess of the premium
paid over the Option A target premium.
Maximum commissions payable under brokerage arrangements are as follows: 50%
of the Option A target premium for a Policy for any option chosen, plus 3% of
the excess of the premium paid over the Option A target premium.
In no event will first year commissions, excluding the 3% excess commission,
exceed the commissions payable on 75% of the federally prescribed guideline
level
47
<PAGE>
...............................................................
premium set forth in Section 7702 of the Internal Revenue Code. Writing repre-
sentatives may be required to return all or part of the first year commission
if the Policy is not continued through the second Policy year.
Renewal commissions in Policy years 2 through 4 will be 5% of premiums paid
to the writing representative. Renewal commissions in Policy years 5 through
10 will be 2% of premiums paid. Renewal commissions in Policy years 11 and af-
ter will be 1% of premiums paid. Maximum renewal commissions payable under
brokerage arrangements are as follows: renewal commissions in Policy years 2
through 4 will be 3% of premiums paid and are payable to the broker-dealer.
Renewal commissions in Policy years 5 through 10 will be 2% of premiums paid.
There will be no renewal commissions after Policy year 10.
When a sale is made by a MetLife employee, the sales manager generally re-
ceives (i) a commission override of 16% of first year commissions credited to
the writing representative, and (ii) a commission override of 16% of renewal
commissions paid to the writing representative in Policy years 2 and later.
There are circumstances under which higher levels of sales manager compensa-
tion could be paid.
The commissions are paid by Metropolitan Life. They do not result in any
charges against the Policy in addition to those set forth under "Charges and
Deductions". During 1995, such commissions aggregated approximately
$1,541,075.
FEDERAL TAX MATTERS
...............................................................................
The following description is a brief summary of some of the tax rules, pri-
marily related to federal income and estate taxes, which in the opinion of
Metropolitan Life are currently in effect.
TAXATION OF THE POLICY
The Policy receives the same federal income and estate tax treatment as
fixed benefit life insurance. The death benefit payable under any death bene-
fit option in the Policy is generally excludable from the gross income of the
beneficiary under Section 101 of the Internal Revenue Code ("Code") and the
Policy owner is not deemed to be in constructive receipt of the cash values
under the Policy until actual withdrawal or surrender.
Under existing tax law, unless a Policy is a modified endowment contract as
discussed below, a Policy owner generally will be taxed on cash value with-
drawn from the Policy and cash value received upon surrender of the Policy.
Under most circumstances, unless the distribution occurs during the first 15
Policy years, only the amount withdrawn, received upon surrender or distrib-
uted at the Final Date of a Policy that exceeds the total premiums paid (less
previous non-taxable withdrawals) will be treated as ordinary income. During
the first 15 Policy years, cash distributions from a Policy, made as a result
of a Policy change that reduces death benefits or other benefits under a Poli-
cy, will be taxable to the Policy owner, under a complex formula, to the ex-
tent that cash value exceeds premiums paid (less previous non-taxable with-
drawals). However, if a Policy is part of a collateral assignment equity
split-dollar arrangement with an employer, any increase in cash value may be
taxable annually. This type of arrangement involves premium advances by an em-
ployer which are secured through a collateral assignment of the Policy. An in-
dividual should consult with and rely on the advice of a tax advisor with re-
spect to any type of split-dollar arrangement involving the Policy.
The United States Treasury Department has adopted regulations which set
diversification rules for the investments underlying the Policies, in order
for the Policies to be treated as life insurance. Metropolitan Life believes
that these diversification standards will be satisfied. There is a provision
in the regulations which allows for the correction of an inadvertent failure
to diversify. Failure to comply with the rules found in the regulations would
result in immediate taxation to Policy owners of all positive investment
experience credited to a Policy.
There is a possibility that regulations may be proposed or that a
controlling ruling may be issued in the future describing the extent to which
Policy owner control over allocation of cash value may cause Policy owners to
be treated as the owners of Separate Account assets for tax purposes.
Metropolitan Life reserves the right to amend the Policies in any way
necessary to avoid any such result.
Metropolitan Life also believes that loans received under the Policy will be
treated as indebtedness of an owner for federal tax purposes, and, unless the
Policy is or becomes a modified endowment contract as described below or
terminates, that no part of any loan received under a Policy will constitute
income to the owner. A partial withdrawal may have tax consequences depending
on the circumstances of such withdrawal. A total surrender, cancellation of
the Policy or distribution at the Final Date of a Policy where there is an
outstanding loan also may have tax consequences depending on the amount of
gain in the Policy.
The Technical and Miscellaneous Revenue Act of 1988 amended the federal
income tax treatment of pre-death withdrawals from a class of life insurance
contracts referred to as modified endowment contracts. Unlike other life
insurance contracts, amounts received before death from a modified endowment
contract, including policy loans, are treated first as income (to the extent
of gain) and then as recovered investment. For purposes of determining the
amount includible in income, all modified endowment contracts issued by the
same company (or affiliate) to the same policyholder during any calendar year
will be treated as one modified endowment contract. Finally, an additional 10%
income tax is generally imposed on the taxable portion of amounts received
before age 59 1/2.
48
<PAGE>
...............................................................
In general, a modified endowment contract is a life insurance contract en-
tered into or materially changed after June 20, 1988 that fails to meet a "7-
pay test". Under the 7-pay test, if the amount of premiums paid under the life
insurance contract at any time during the first 7 policy years exceeds the sum
of the net level premiums which would have been paid if the contract provided
for paid-up future benefits after the payment of 7 level annual payments, the
contract is a modified endowment contract. A policy may have to be reviewed
under the 7-pay test even after the first seven policy years in the case of
certain events such as a material modification of the policy as discussed be-
low. If there is a reduction in benefits under the contract during any 7-pay
testing period, the 7-pay test is applied using the reduced benefits level.
Any distribution made within two years before a policy fails the 7-pay test
may be treated as made in anticipation of such failure. Whether or not a par-
ticular policy meets these definitional requirements is dependent on the date
the contract was entered into, premium payments made and the periodic premium
payments to be made, the level of death benefits, any changes in the level of
death benefits, the extent of any prior cash withdrawals, and other factors.
Generally, a life insurance policy which is received in exchange for a modi-
fied endowment contract will also be considered a modified endowment contract.
A Policy should be reviewed upon issuance, upon making a cash withdrawal,
upon making a change in future benefits and upon making a material modifica-
tion to the Policy to determine to what extent, if any, these tax rules apply.
A material modification to a Policy includes, but is not limited to, any in-
crease in the future benefits provided under the Policy. However, in general,
increases that are attributable to the payment of premiums necessary to fund
the lowest death benefit payable in the first 7 Policy years will not be con-
sidered material modifications. The annual statement sent to each Policy owner
will include information regarding the modified endowment contract status of a
Policy (see "Premiums--Premium Limitations").
Counsel and other competent advisors should be consulted to determine how
these rules apply to an individual situation and before making unplanned pre-
mium payments, increasing or decreasing the specified face amount, or adding
or removing a rider.
Congress may, in the future, consider other legislation that, if enacted,
could adversely affect the tax treatment of life insurance policies. In addi-
tion, the Treasury Department may by regulation or interpretation modify the
above described tax effects. Any legislative or administrative action could be
applied retroactively.
The death benefit payable under the Policy is includable in the insured's
gross estate for federal estate tax purposes if the death benefit is paid to
the insured's estate or if the death benefit is paid to a beneficiary other
than the estate and the insured either possessed inci-
dents of ownership in the Policy at the time of death or transferred incidents
of ownership in the Policy to another person within three years of death.
Whether or not any federal estate tax is payable with respect to the death
benefit of the Policy which is included in the insured's gross estate depends
on a variety of factors including the following. A smaller size estate may be
exempt from federal estate tax because of a current estate tax credit which
generally is equivalent to an exemption of $600,000. In addition, a death ben-
efit paid to a surviving spouse may not be taxable because of a 100% estate
tax marital deduction. Furthermore, a death benefit paid to a tax-exempt char-
ity may not be taxable because of the allowance of an estate tax charitable
deduction.
If the owner of the Policy is not the insured, and the owner dies before the
insured, the value of the Policy, as determined under Internal Revenue Service
regulations, is includable in the federal gross estate of the owner for fed-
eral estate tax purposes. Whether a federal estate tax is payable depends on a
variety of factors, including those listed in the preceding paragraph.
State and local income, estate, inheritance and other tax consequences of
ownership or receipt of Policy proceeds depend on the circumstances of each
insured, owner or beneficiary.
The foregoing summary does not purport to be complete or to cover all situa-
tions. Counsel and other competent advisors should be consulted for more com-
plete information.
TAXATION OF METROPOLITAN LIFE
Metropolitan Life does not initially expect to incur any federal income tax
upon the earnings or the realized capital gains attributable to the Separate
Account. Based upon these expectations, no charge is currently being made
against the Separate Account for federal income taxes, with respect to earn-
ings or capital gains, which may be attributable to the Separate Account. If,
however, Metropolitan Life determines that it may incur such taxes, it may as-
sess a charge against or make provisions in the Separate Account for those
taxes. There is a 1.5% charge imposed on premiums paid for the purpose of re-
covering the federal income taxes imposed on Metropolitan Life based on the
amount of premiums received in connection with the Policies.
Under present laws, Metropolitan Life may incur state and local taxes (in
addition to premium taxes) in several states. At present, these taxes are not
significant. If they increase, however, Metropolitan Life may decide to make
charges for such taxes against or provisions for such taxes in the Separate
Account. However, there is a 2% charge imposed on premiums paid for state pre-
mium taxes.
49
<PAGE>
MANAGEMENT
The present directors and the senior officers and secretary of Metropolitan
Life are listed below, together with certain information concerning them:
DIRECTORS, OFFICERS-DIRECTORS
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION & POSITIONS AND OFFICES
NAME BUSINESS ADDRESS WITH METROPOLITAN LIFE
---- ---------------------- ----------------------
<S> <C> <C>
Theodossios Vice-Chairman of the Board, Vice-Chairman of the Board
Athanassiades.......... Metropolitan Life Insurance Company, and Director
One Madison Avenue,
New York, NY 10010.
Curtis H. Barnette...... Chairman and Chief Executive Officer, Director
Bethlehem Steel Corp.,
1170 Eighth Avenue,
Martin Tower 2118,
Bethlehem, PA 18016-7699.
Joan Ganz Cooney........ Chairman, Executive Committee, Director
Children's Television Workshop,
One Lincoln Plaza,
New York, NY 10023.
James R. Houghton....... Retired Chairman of the Board and Director
Chief Executive Officer,
Corning Incorporated,
HQ EQ-08
Corning, NY 14831.
Harry P. Kamen.......... Chairman, President, and Chairman, President,
Chief Executive Officer, Chief Executive Officer and
Metropolitan Life Insurance Company, Director
One Madison Avenue,
New York, NY 10010.
Helene L. Kaplan........ Of Counsel, Skadden, Arps, Slate, Director
Meagher & Flom,
919 Third Avenue,
New York, NY 10022.
Richard J. Mahoney...... Chairman of the Executive Committee, Director
Monsanto Company-
Mail Code N3L,
800 N. Lindbergh Blvd.,
St. Louis, MO 63167.
Allen E. Murray......... Retired Chairman of the Board Director
and Chief Executive Officer,
Mobil Corporation,
P.O. Box 2072,
New York, NY 10163.
John J. Phelan, Jr. .... Retired Chairman and Chief Executive Director
Officer, New York Stock Exchange,
Inc.,
P.O. Box 312,
Mill Neck, NY 11765.
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION & POSITIONS AND OFFICES
NAME BUSINESS ADDRESS WITH METROPOLITAN LIFE
---- ---------------------- ----------------------
<S> <C> <C>
John B. M. Place........ Former Chairman of the Board, Director
Crocker National Corporation,
111 Sutter Street, 4th Fl.,
San Francisco, CA 94104.
Hugh B. Price........... President and Chief Executor Officer, Director
National Urban League, Inc.,
500 East 62nd Street,
New York, NY 10021.
Robert G. Schwartz...... Retired Chairman of the Board, Director
President and Chief Executive Officer,
Metropolitan Life Insurance Company,
200 Park Avenue, Suite 5700,
New York, NY 10166.
Ruth J. Simmons, Ph.D. . President Director
College Hall 20
Smith College
Northampton, MA 01063
William S. Sneath....... Retired Chairman of the Board, Director
Union Carbide Corporation,
41 Leeward Lane,
Riverside, CT 06878.
John R. Stafford........ Chairman, President Director
and Chief Executive Officer,
American Home Products Corporation,
Five Giralda Farms,
Madison, NJ 07940.
</TABLE>
51
<PAGE>
OFFICERS*
<TABLE>
<CAPTION>
NAME OF OFFICER POSITION WITH METROPOLITAN LIFE
--------------- -------------------------------
<S> <C>
Harry P. Kamen.......... Chairman, President and Chief Executive Officer
Theodossios
Athanassiades.......... Vice-Chairman of the Board
Gerald Clark............ Senior Executive Vice-President and Chief Investment Officer
Stewart G. Nagler....... Senior Executive Vice-President and Chief Financial Officer
Gary A. Beller.......... Executive Vice-President and Chief Legal Officer
Robert H. Benmosche..... Executive Vice-President
Anthony C. Cannatella... Executive Vice-President
C. Robert Henrikson..... Executive Vice-President
John D. Moynahan, Jr. .. Executive Vice-President
Catherine A. Rein....... Executive Vice-President
John H. Tweedie......... Executive Vice-President
Richard M. Blackwell.... Senior Vice-President and General Counsel
James B. Digney......... Senior Vice-President
William T. Friedewald... Senior Vice-President
Frederick P. Hauser..... Senior Vice-President & Controller
Anne E. Hayden.......... Senior Vice-President
Jeffrey J. Hodgman...... Senior Vice-President
Leland C. Launer, Jr. .. Senior Vice-President
Terence I. Lennon....... Senior Vice-President
David A. Levene......... Senior Vice-President and Chief Actuary
James L. Lipscomb....... Senior Vice-President
James M. Logan.......... Senior Vice-President
Francis P. Lynch........ Senior Vice-President
Thomas F. McDermott..... Senior Vice-President
John C. Morrison, Jr. .. Senior Vice-President
Dominick A. Prezzano.... Senior Vice-President
Leo T. Rasmussen........ Senior Vice-President
Vincent P. Reusing...... Senior Vice-President
Robert E. Sollmann, Jr.. Senior Vice-President
Thomas L. Stapleton..... Senior Vice-President & Tax Director
William J. Toppeta...... Senior Vice-President
Arthur G. Typermass..... Senior Vice-President & Treasurer
James A. Valentino...... Senior Vice-President
Richard F. Wiseman...... Senior Vice-President
Judy E. Weiss........... Senior Vice-President
Stephen E. White........ Senior Vice-President
Harvey M. Young......... Senior Vice-President
Christine M. Markussen.. Vice-President and Secretary
</TABLE>
- -------
* The principal occupation of each officer, except for Gary A. Beller, Robert
H. Benmosche and Terence I. Lennon, during the last five years has been as an
officer of Metropolitan Life or an affiliate thereof. Gary A. Beller has been
an officer of Metropolitan Life since November, 1994; prior thereto, he was a
Consultant and Executive Vice-President and General Counsel of the American
Express Company. Robert H. Benmosche has been an officer of Metropolitan Life
since September, 1995; prior thereto, he was an Executive Vice-President of
Paine Webber. Terence I. Lennon has been an officer of Metropolitan Life
since March, 1994; prior thereto, he was Assistant Deputy Superintendent and
Chief Examiner of the New York State Department of Insurance. The business
address of each officer is 1 Madison Avenue, New York, New York 10010.
52
<PAGE>
...............................................................
VOTING RIGHTS
................................................................................
RIGHT TO INSTRUCT VOTING OF FUND SHARES
In accordance with its view of present applicable law, Metropolitan Life will
vote the shares of each of the portfolios of the Fund which are deemed attrib-
utable to Policies at regular and special meetings of the shareholders of the
Fund based on instructions received from persons having the voting interest in
corresponding investment divisions of the Separate Account. However, if the
1940 Act or any rules thereunder should be amended or if the present interpre-
tation thereof should change, and as a result Metropolitan Life determines that
it is permitted to vote such shares of the Fund in its own right, it may elect
to do so.
Accordingly, the Policy owner will have a voting interest under a Policy. The
number of shares held in each Separate Account investment division deemed at-
tributable to each owner is determined by dividing a Policy's cash value in
that division, if any, by the net asset value of one share in the corresponding
Fund portfolio in which the assets in that Separate Account investment division
are invested. Fractional votes will be counted. The number of shares concerning
which a Policy owner has the right to give instructions will be determined as
of the record date for the meeting.
Fund shares held in each registered separate account of Metropolitan Life or
any affiliate that are or are not attributable to life insurance policies (in-
cluding the Policies) or annuity contracts and for which no timely instructions
are received will be voted in the same proportion as the shares for which vot-
ing instructions are received by that separate account. Fund shares held in the
general accounts or unregistered separate accounts of Metropolitan Life or its
affiliates will be voted in the same proportion as the aggregate of (i) the
shares for which voting instructions are received and (ii) the shares that are
voted in proportion to such voting instructions. However, if Metropolitan Life
or an affiliate determines that it is permitted to vote any such shares of the
Fund in its own right, it may elect to do so subject to the then current inter-
pretation of the 1940 Act or any rules thereunder.
The Policy owners may give instructions regarding, among other things, the
election of the Board of Directors of the Fund, ratification of the selection
of the Fund's independent auditors, and the approval of the Fund's investment
manager and sub-investment manager.
Each Policy owner having a voting interest will be sent voting instruction
soliciting material and a form for giving voting instructions to Metropolitan
Life.
DISREGARD OF VOTING INSTRUCTIONS
Notwithstanding contrary Policy owner voting instructions, Metropolitan Life
may vote Fund shares in any manner necessary to enable the Fund to (1) make or
refrain from making any change in the investments or investment policies for
any portfolio of the Fund, if required by any insurance regulatory authority;
(2) refrain from making any change in the investment policies or any investment
adviser or principal underwriter of any portfolio which may be initiated by
Policy owners or the Fund's Board of Directors, provided Metropolitan Life's
disapproval of the change is reasonable and, in the case of a change in invest-
ment policies or investment adviser, based on a good faith determination that
such change would be contrary to state law or otherwise inappropriate in light
of the portfolio's objective and purposes; or (3) enter into or refrain from
entering into any advisory agreement or underwriting contract, if required by
any insurance regulatory authority.
In the event that Metropolitan Life does disregard voting instructions, a
summary of the action and the reasons for such action will be included in the
next semiannual report to Policy owners.
REPORTS
................................................................................
Policy owners will receive promptly statements of significant transactions
such as change in specified face amount, change in death benefit option, trans-
fers among investment divisions, partial withdrawals, increases in loan princi-
pal by the Policy owner, loan repayments, termination for any reason, rein-
statement and premium payments. Transactions pursuant to automated investment
strategies (see "Payment and Allocation of Premiums,") may be confirmed quar-
terly. Policy owners whose premiums are automatically remitted under a check-o-
matic allotment deduction or certain payroll deduction plans do not receive in-
dividual confirmations of premium payments from Metropolitan Life apart from
that provided by their bank or employer. An annual statement will also be sent
to the Policy owner within thirty days after a Policy year summarizing all of
the above transactions and deductions of charges occurring during that Policy
year and setting forth the status of the death benefit, cash and cash surrender
values, amounts in the investment divisions and Fixed Account, any policy loan
and unpaid loan interest added to loan principal. The annual statement will
also discuss the modified endowment contract status of a Policy (see "Premi-
ums--Premium Limitations"). In addition, an owner will be sent semiannual re-
ports containing financial statements for the Fund, as required by the 1940
Act.
53
<PAGE>
...............................................................
STATE REGULATION
................................................................................
Metropolitan Life is subject to regulation and supervision by the Insurance
Department of the State of New York, which periodically examines its affairs.
It is also subject to the insurance laws and regulations of all jurisdictions
where it is authorized to do business. Where required, a copy of the form of
Policy has been filed with, and approved by, insurance officials in each juris-
diction where the Policies are sold. Metropolitan Life intends to satisfy the
necessary requirements to sell the Policies in all fifty states and the Dis-
trict of Columbia as soon as possible.
Metropolitan Life is required to submit annual statements of its operations,
including financial statements, to the insurance departments of the various ju-
risdictions in which it does business, for the purposes of determining solvency
and compliance with local insurance laws and regulations. Such statements are
available for public inspection at state insurance department offices.
REGISTRATION STATEMENT
................................................................................
A registration statement under the Securities Act of 1933 has been filed with
the Securities and Exchange Commission relating to the offering described in
this Prospectus. This Prospectus does not contain all the information set forth
in the registration statement and amendments thereto and the exhibits filed as
a part thereof, to all of which reference is hereby made for additional infor-
mation concerning the Separate Account, Metropolitan Life and the Policies. The
additional information may be obtained at the Commission's main office in Wash-
ington, D.C., upon payment of the prescribed fees.
LEGAL MATTERS
................................................................................
The legality of the Policies described in this Prospectus has been passed
upon by Christopher P. Nicholas, Associate General Counsel of Metropolitan
Life. Messrs. Freedman, Levy, Kroll & Simonds, Washington, D.C., have advised
Metropolitan Life on certain matters relating to the federal securities laws.
EXPERTS
................................................................................
The financial statements included in this Prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports appear-
ing herein, and are included in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
Actuarial matters included in this Prospectus have been examined by Anthony
Amodeo, FSA, MAAA, Vice-President and Senior Actuary of Metropolitan Life, as
stated in his opinion filed as an exhibit to the registration statement.
FINANCIAL STATEMENTS
................................................................................
The financial statements of Metropolitan Life included in this Prospectus
should be considered only as bearing upon the ability of Metropolitan Life to
meet its obligations under the Policies.
54
<PAGE>
INDEPENDENT AUDITORS' REPORT
Metropolitan Life Insurance Company:
We have audited the accompanying balance sheets of Metropolitan Life Insurance
Company (the Company) as of December 31, 1995 and 1994 and the related
statements of operations and surplus and of cash flow for each of the three
years in the period ended December 31, 1995. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 1995 and 1994
and the results of its operations and its cash flow for each of the three
years in the period ended December 31, 1995 in conformity with accounting
practices prescribed or permitted by insurance regulatory authorities and
generally accepted accounting principles.
Deloitte & Touche LLP
New York, New York
February 9, 1996
55
<PAGE>
METROPOLITAN LIFE INSURANCE COMPANY
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994 (IN MILLIONS)
<TABLE>
<CAPTION>
NOTES 1995 1994
----- ---- ----
<S> <C> <C> <C>
ASSETS
Bonds.................................................. 4,11 $ 70,955 $ 65,592
Stocks................................................. 3,4,11 3,646 3,672
Mortgage loans......................................... 3,4,11 14,211 14,524
Real estate............................................ 9,470 10,417
Policy loans........................................... 11 3,956 3,964
Cash and short-term investments........................ 11 1,923 2,334
Other invested assets.................................. 3 2,480 2,262
Premiums deferred and uncollected...................... 1,568 1,250
Investment income due and accrued...................... 1,589 1,440
Separate Account assets................................ 31,707 25,424
Other assets........................................... 627 298
-------- --------
Total Assets........................................... $142,132 $131,177
======== ========
LIABILITIES AND SURPLUS
Liabilities
Reserves for life and health insurance and annuities... 5,11 $ 76,249 $ 73,204
Policy proceeds and dividends left with the Company.... 11 4,482 3,534
Dividends due to policyholders......................... 1,371 1,407
Premium deposit funds.................................. 11 12,891 14,006
Interest maintenance reserve........................... 1,148 881
Other policy liabilities............................... 3,882 3,364
Investment valuation reserves.......................... 1,860 1,981
Separate Account liabilities........................... 31,226 25,159
-------- --------
Other liabilities...................................... 2,459 1,337
-------- --------
Total Liabilities...................................... 135,568 124,873
======== ========
Surplus
Special contingency reserves........................... 754 682
Surplus notes.......................................... 10 1,400 700
Unassigned funds....................................... 4,410 4,922
-------- --------
Total Surplus.......................................... 6,564 6,304
-------- --------
Total Liabilities and Surplus.......................... $142,132 $131,177
======== ========
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
METROPOLITAN LIFE INSURANCE COMPANY
STATEMENTS OF OPERATIONS AND SURPLUS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (IN MILLIONS)
<TABLE>
<CAPTION>
NOTES 1995 1994 1993
----- ---- ---- ----
<S> <C> <C> <C> <C>
INCOME
<CAPTION>
Premiums, annuity considerations and deposit
funds......................................... 5 $19,972 $19,881 $19,442
Considerations for supplementary contracts and
dividend accumulations........................ 2,979 2,879 1,654
<S> <C> <C> <C> <C>
Net investment income......................... 7,825 7,143 7,356
Other income.................................. 5 156 80 231
------- ------- -------
Total income.................................. 30,932 29,983 28,683
------- ------- -------
BENEFITS AND EXPENSES
Benefit payments (other than dividends)....... 25,055 23,533 21,417
Changes to reserves, deposit funds and other
policy liabilities........................... 321 1,619 (439)
Insurance expenses and taxes (excluding tax on
capital gains)............................... 6 3,160 2,492 2,595
Net transfers to Separate Accounts............ 675 503 3,239
Dividends to policyholders.................... 1,520 1,676 1,606
------- ------- -------
Total benefits and expenses................... 30,731 29,823 28,418
------- ------- -------
Net gain from operations...................... 201 160 265
Net realized capital losses................... 3,6 (873) (54) (132)
------- ------- -------
NET (LOSS) INCOME (672) 106 133
SURPLUS ADDITIONS (DEDUCTIONS)
Change in general account net unrealized capi-
tal gains.................................... 3 442 150 131
Change in investment valuation reserves....... 121 (306) (169)
Issuance of surplus notes..................... 10 700 -- 700
Other adjustments--net........................ 1,5 (331) (52) 594
------- ------- -------
NET CHANGE IN SURPLUS......................... 260 (102) 1,389
SURPLUS AT BEGINNING OF YEAR.................. 6,304 6,406 5,017
------- ------- -------
SURPLUS AT END OF YEAR........................ $ 6,564 $ 6,304 $ 6,406
======= ======= =======
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
METROPOLITAN LIFE INSURANCE COMPANY
STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (IN MILLIONS)
<TABLE>
<S> <C> <C> <C>
1995 1994 1993
---- ---- ----
CASH PROVIDED
Premiums, annuity considerations and deposit funds
received............................................ $19,662 $19,983 $19,599
Considerations for supplementary contracts and
dividend
accumulations received.............................. 3,051 2,948 1,748
Net investment income received....................... 7,579 6,828 6,931
Other income received................................ 166 80 134
------- ------- -------
Total receipts....................................... 30,458 29,839 28,412
------- ------- -------
Benefits paid (other than dividends)................. 23,939 22,387 20,092
Insurance expenses and taxes paid (excluding tax on
capital gains)...................................... 2,337 2,366 2,532
Net cash transfers to Separate Accounts.............. 692 524 3,304
Dividends paid to policyholders...................... 1,473 1,684 1,596
Other--net........................................... (1,872) 368 (1,051)
------- ------- -------
Total payments....................................... 26,569 27,329 26,473
------- ------- -------
Net cash from operations............................. 3,889 2,510 1,939
Proceeds from long-term investments sold, matured or
repaid after
deducting taxes on capital gains of $102 for 1995,
$60 for 1994
and $546 for 1993................................... 60,790 46,459 55,420
Issuance of surplus notes............................ 700 -- 700
Other cash provided.................................. 370 -- 369
------- ------- -------
Total cash provided.................................. 65,749 48,969 58,428
------- ------- -------
CASH APPLIED
Cost of long-term investments acquired............... 65,122 47,845 58,033
Other cash applied................................... 1,038 162 247
------- ------- -------
Total cash applied................................... 66,160 48,007 58,280
------- ------- -------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS........ (411) 962 148
CASH AND SHORT-TERM INVESTMENTS:
BEGINNING OF YEAR.................................... 2,334 1,372 1,224
------- ------- -------
END OF YEAR.......................................... $ 1,923 $ 2,334 $ 1,372
======= ======= =======
</TABLE>
See accompanying notes to financial statements.
58
<PAGE>
METROPOLITAN LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. BUSINESS AND ACCOUNTING POLICIES
Metropolitan Life Insurance Company (the Company) principally provides life
insurance and annuity products and pension, pension-related and investment-
related services to individuals, corporations and other institutions. The
Company and its insurance subsidiaries also provide non-medical health,
disability and property and casualty insurance. Through its non-insurance
subsidiaries, the Company also offers investment management and advisory
services and commercial finance.
The Company's financial statements are prepared on the basis of accounting
practices prescribed or permitted by the Insurance Department of the State of
New York, which practices currently are considered to be generally accepted
accounting principles for mutual life insurance companies (see Note 12). The
primary interest of insurance regulatory authorities is the ability of the
Company to fulfill its obligations to policyholders; therefore, the financial
statements are oriented to the insured public. Significant accounting policies
applied in preparing the financial statements follow.
INVESTED ASSETS AND RELATED RESERVES
Bonds qualifying for amortization are stated at amortized cost; all other
bonds at prescribed values. Unaffiliated preferred stocks are stated
principally at cost; unaffiliated common stocks are carried at market value.
Mortgage loans are stated principally at their amortized indebtedness. Short-
term investments generally mature within one year and are carried at amortized
cost. Policy loans are stated at unpaid principal balances.
Investments in subsidiaries are stated at equity in net assets and are
included in stocks. Changes in net assets, excluding additional amounts
invested, are included in unrealized capital gains or losses. Dividends from
subsidiaries are reported by the Company as earnings in the year the dividends
are declared. The excess of the purchase price of non-insurance subsidiaries
over the fair values of the net assets acquired (goodwill) is amortized on a
straight-line basis.
Investment real estate, other than real estate joint ventures and
subsidiaries, is stated at depreciated cost net of non-recourse debt and an
allowance for losses on real estate expected to be disposed of in the near
term. Depreciation is generally calculated by the constant yield method for
real estate purchased prior to December 1990 and the straight-line method if
purchased thereafter. Real estate acquired in satisfaction of debt is valued
at the lower of cost or estimated fair value at date of foreclosure and is
subsequently stated at depreciated cost. Investments in real estate joint
ventures, included in other invested assets, and real estate subsidiaries,
included in stocks, are reported using the equity method and are generally
adjusted to reflect the constant yield method of depreciation for real estate
assets acquired by such entities prior to December 1990.
In 1994, the Company changed to the straight-line method of determining
depreciation on real estate acquired prior to December 1990 if the estimated
fair value of the real estate is less than ninety percent of depreciated cost.
This change had the effect of increasing depreciation expense by approximately
$80 million in 1994.
Investments in non-real estate partnerships are included in other invested
assets and are accounted for using the equity method. The carrying value
generally reflects the Company's share of unrealized gains and losses relating
to the market value of publicly traded common stocks held by the partnerships.
Impairments of individual investments that are considered to be other than
temporary are recognized when incurred.
Mandatory reserves have been established for general account investments in
accordance with guidelines prescribed by insurance regulatory authorities.
Such reserves consist of an Asset Valuation Reserve (AVR) for all invested
assets and an Interest Maintenance Reserve (IMR), which defers the recognition
of realized capital gains and losses (net of income tax) attributable to
interest rate fluctuations on fixed income investments over the estimated
remaining duration of the investments sold. Prior to 1994, the Company also
established voluntary investment valuation
59
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
reserves for certain general account investments. Changes to the AVR and
voluntary investment reserves are reported as direct additions to or
deductions from surplus. Transfers to the IMR are deducted from realized
capital gains; IMR amortization is included in net investment income.
Net realized capital gains or losses are presented net of federal capital
gains tax or benefit, respectively, and transfers to the IMR.
POLICY RESERVES
Reserves for permanent plans of individual life insurance sold after 1959,
universal life plans and certain term plans sold after 1982 are computed
principally on the Commissioners' Reserve Valuation Method. Reserves for other
life insurance policies are computed on the net level premium method. Reserves
for individual annuity contracts are computed on the net level premium method,
the net single premium method or the Commissioners' Annuity Reserve Valuation
Method, as appropriate. Reserves for group annuity contracts are computed on
the net single premium method. The reserves are based on mortality, morbidity
and interest rate assumptions prescribed by New York State Insurance Law. Such
reserves are sufficient to provide for contractual surrender values.
Periodically to reflect changes in circumstances, the Company may change the
assumptions, methodologies or procedures used to calculate reserves. During
1993, the Company and certain of its wholly-owned life insurance subsidiaries
made certain changes which increased the Company's surplus by $667 million
(substantially all of which related to interest rate changes).
INCOME AND EXPENSES
Premiums are recognized over the premium-paying period. Investment income is
reported as earned. Expenses, including policy acquisition costs and federal
income taxes, are charged to operations as incurred.
During 1995, the Company recorded a restructuring charge of $72 million
related primarily to the consolidation of office space leased for
administration and agency sales offices. The Company anticipates additional
restructuring charges over the next few years.
SEPARATE ACCOUNT OPERATIONS
Investments held in the Separate Accounts (stated at market value) and
liabilities of the Separate Accounts (including participant's corresponding
equity in the Separate Accounts) are reported separately as assets and
liabilities. The Separate Accounts' operating results are reflected in the
changes to these assets and liabilities.
ESTIMATES
The preparation of financial statements in conformity with accounting
practices prescribed or permitted by regulatory authorities and generally
accepted accounting principles requires that management make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.
2. MERGER
During 1995, the Company and New England Mutual Life Insurance Company (The
New England) entered into a definitive agreement pursuant to which The New
England will be merged with and into the Company (the Merger) subject to
various conditions, including but not limited to, regulatory approvals and the
necessary approvals of the policyholders of the Company and The New England.
Upon consummation of the proposed Merger, the Company will be the surviving
company. It is currently anticipated that the Merger will occur during the
first half of 1996.
If the proposed Merger is consummated, the financial statements of the
Company and The New England will be combined to present the financial position
and results of operations of the combined entity. Summary unaudited pro forma
combined balance sheet information relating to the combined entity and summary
historical balance sheet information relating to The New England as of
December 31, 1995 and 1994 and summary unaudited pro forma
60
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
combined statement of operations information and summary historical statement
of operations information relating to The New England for the years ended
December 31, 1995, 1994, and 1993, are shown below (in millions):
<TABLE>
<CAPTION>
UNAUDITED THE NEW ENGLAND
------------------- ---------------
PRO FORMA COMBINED HISTORICAL
------------------- ---------------
1995 1994 1995 1994
--------- --------- ------- -------
<S> <C> <C> <C> <C>
AT DECEMBER 31:
Total assets............................... $ 157,773 $ 146,260 $16,261 $15,753
Investment valuation reserves.............. 2,012 1,987 429 362
Total surplus (including combined pro forma
surplus notes of $1,548 for 1995 and $848
for 1994 and The New England historical
surplus notes of $148 for 1995 and 1994).. 6,802 6,564 624 632
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED THE NEW ENGLAND
------------------------ --------------------
PRO FORMA COMBINED HISTORICAL
------------------------ --------------------
1995 1994 1993 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
FOR THE YEARS ENDED DECEMBER 31:
Total income..................... $33,668 $32,811 $31,533 $2,758 $2,844 $2,878
Dividends to policyholders....... 1,731 1,883 1,833 211 207 227
Net gain from operations......... 346 231 303 159 88 57
Net (loss) income................ (566) 124 70 60 42 89
</TABLE>
Certain adjustments will be made to the Company's financial statements if
the Merger is consummated in order to conform the accounting policies and
practices reflected in the financial statements of the combined entities. The
unaudited pro forma combined amounts presented above include management's
estimate of the effects of such adjustments, related principally to
differences in accounting for real estate and mortgage loans, on summary
combined information as if the Merger had occurred on January 1, 1993. The
amount of the adjustments will be finalized upon consummation of the planned
Merger.
3. UNCONSOLIDATED SUBSIDIARIES AND OTHER AFFILIATES
The Company's subsidiary operations primarily include insurance, real estate
investment and brokerage activities, investment management and advisory
services, mortgage originations and servicing, and commercial finance. At
December 31, 1995 and 1994, subsidiary assets were $23,008 million and $21,476
million, respectively. At December 31, 1995 and 1994, subsidiary liabilities
were $20,393 million and $18,905 million, respectively. Subsidiary revenues
were $4,588 million, $4,715 million and $4,525 million in 1995, 1994 and 1993,
respectively. Dividends from subsidiaries amounted to $558 million, $186
million and $175 million in 1995, 1994 and 1993, respectively.
Unamortized goodwill was $129 million at December 31, 1994. There was no
unamortized goodwill at December 31, 1995.
The Company incurs charges on behalf of its subsidiaries which are
reimbursed pursuant to agreements for shared use of property, personnel and
facilities. Charges under such agreements were approximately $194 million,
$307 million and $355 million in 1995, 1994 and 1993, respectively.
The Company's net equity in joint ventures and other partnerships was $2,424
million and $2,250 million at December 31, 1995 and 1994, respectively. The
Company's share of income from such entities was $97 million, $26 million and
$76 million for 1995, 1994 and 1993, respectively.
Many of the Company's real estate joint ventures have loans with the
Company. The carrying values of such mortgages were $1,054 million and $1,372
million at December 31, 1995 and 1994, respectively. The Company had other
loans outstanding to its affiliates with carrying values of $2,599 million and
$2,073 million at December 31, 1995 and 1994, respectively.
61
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
In January 1995, the Company and The Travelers Insurance Company (Travelers)
contributed their respective group medical health care benefits businesses to
a corporate joint venture, The MetraHealth Companies, Inc. (MetraHealth). In
October 1995, the Company and Travelers sold their investments in MetraHealth
to a non-affiliated health care management services company. For its interest
in MetraHealth, a subsidiary of the Company received $485 million face amount
of shares of redeemable preferred stock of the purchaser, $276 million in cash
and rights to additional consideration based on the 1995 earnings of
MetraHealth. The transaction resulted in post-tax income of $443 million to
the Company, including an amount based on the 1995 estimated financial results
of MetraHealth. The Company also has the right to receive up to an additional
$169 million in cash for each of 1996 and 1997, based on the consolidated
financial results of the purchaser for each of such years.
During 1995, the Company sold Century 21 Real Estate Corporation (real
estate brokerage operation), Metmor Financial Inc. (mortgage banking) and
Metropolitan Trust Company of Canada (trust operation and mortgage
administration) for $127 million, $56 million and $41 million, respectively,
resulting in pre-tax realized capital losses of $167 million, $247 million and
$86 million, respectively. The sales also resulted in $452 million of
unrealized capital gains representing the reversal of prior period unrealized
capital losses relating to the subsidiaries.
4. INVESTMENTS
DEBT SECURITIES
The carrying value, gross unrealized gain (loss) and estimated fair value of
bonds and redeemable preferred stocks (debt securities), by category, as of
December 31, 1995 and 1994 are shown below
<TABLE>
<CAPTION>
GROSS
UNREALIZED ESTIMATED
CARRYING -------------- FAIR
VALUE GAIN (LOSS) VALUE
-------- ------ ------- ---------
(IN MILLIONS)
<S> <C> <C> <C> <C>
DECEMBER 31, 1995:
Bonds:
U.S. Treasury securities and obligations of
U.S. government corporations and agencies.. $12,871 $1,556 $ (2) $14,425
States and political subdivisions........... 1,865 582 (2) 2,445
Foreign governments......................... 1,871 221 -- 2,092
Corporate................................... 29,992 1,872 (105) 31,759
Mortgage-backed securities.................. 18,888 749 (27) 19,610
Other....................................... 5,468 336 (16) 5,788
------- ------ ------- -------
Total bonds................................. $70,955 $5,316 $ (152) $76,119
======= ====== ======= =======
Redeemable preferred stocks................. $ 39 $ -- $ (3) $ 36
======= ====== ======= =======
DECEMBER 31, 1994:
Bonds:
U. S. Treasury securities and obligations of
U.S. government corporations and agencies.. $ 9,807 $ 322 $ (546) $ 9,583
States and political subdivisions........... 1,483 69 (21) 1,531
Foreign governments......................... 1,931 26 (60) 1,897
Corporate................................... 31,262 291 (1,682) 29,871
Mortgage-backed securities.................. 17,485 251 (851) 16,885
Other....................................... 3,624 18 (215) 3,427
------- ------ ------- -------
Total bonds................................. $65,592 $ 977 $(3,375) $63,194
======= ====== ======= =======
Redeemable preferred stocks................. $ 44 $ -- $ (14) $ 30
======= ====== ======= =======
</TABLE>
62
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The carrying value and estimated fair value of bonds, by contractual
maturity, at December 31, 1995 are shown below. Bonds not due at a single
maturity date have been included in the table in the year of final maturity.
Expected maturities may differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without prepayment
penalties.
<TABLE>
<CAPTION>
ESTIMATED
CARRYING FAIR
VALUE VALUE
-------- ---------
(IN MILLIONS)
<S> <C> <C>
Due in one year or less...................................... $ 2,171 $ 2,191
Due after one year through five years........................ 17,277 17,717
Due after five years through ten years....................... 17,188 18,381
Due after ten years.......................................... 15,431 18,220
------- -------
Subtotal..................................................... 52,067 56,509
Mortgage-backed securities................................... 18,888 19,610
------- -------
Total........................................................ $70,955 $76,119
======= =======
</TABLE>
Proceeds from the sales of debt securities during 1995, 1994 and 1993 were
$50,831 million, $36,401 million and $50,395 million, respectively. During
1995, 1994 and 1993, respectively, gross gains of $814 million, $577 million
and $1,316 million, and gross losses of $352 million, $561 million and $96
million were realized on those sales. Realized investment gains and losses are
determined by specific identification.
MORTGAGE LOANS
Mortgage loans are collateralized by properties located throughout the
United States and Canada. Approximately 15 percent and 9 percent of the
properties are located in California and Illinois, respectively. Generally,
the Company (as the lender) requires that a minimum of one-fourth of the
purchase price of the underlying real estate be paid by the borrower.
As of December 31, 1995 and 1994, the mortgage loan investments were
categorized as follows:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Office Buildings............................................ 32% 36%
Retail...................................................... 18% 17%
Residential................................................. 20% 21%
Agricultural................................................ 20% 18%
Other....................................................... 10% 8%
--- ---
Total....................................................... 100% 100%
=== ===
</TABLE>
FINANCIAL INSTRUMENTS
The Company has a securities lending program whereby large blocks of
securities are loaned to third parties, primarily major brokerage firms.
Company policy requires a minimum of 102 percent of the fair value of the
loaned securities to be separately maintained as collateral for the loans. The
collateral is recorded in memorandum records and not reflected in the
accompanying balance sheets. To further minimize the credit risks related to
this lending program, the Company regularly monitors the financial condition
of counterparties to these agreements.
During the normal course of business, the Company agrees with independent
parties to purchase or sell bonds over fixed or variable periods of time. The
off-balance sheet risks related to changes in the quality of the underlying
bonds are mitigated by the fact that commitment periods are generally short in
duration and provisions in the agreements release the Company from its
commitments in case of significant changes in the financial condition of the
independent party or the issuer of the bond.
63
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The Company engages in a variety of derivative transactions with respect to
the general account. Those derivatives, such as forwards, futures, options,
foreign exchange agreements and swaps, which do not themselves generate
interest or dividend income, are acquired or sold in order to hedge or reduce
risks applicable to assets held, or expected to be purchased or sold, and
liabilities incurred or expected to be incurred. The Company does not engage
in trading of these derivatives.
In 1995 and 1994, the Company engaged in three primary derivatives
strategies. The Company entered into a number of anticipatory hedges using
forwards to limit the interest rate exposures of investments in debt
securities expected to be acquired within one year. The Company also hedged a
number of investments in debt securities denominated in foreign currencies by
executing swaps and forwards to ensure a United States dollar rate of return.
In addition, the Company purchased a limited number of interest rate caps to
hedge against rising interest rates on a portfolio of assets which the Company
purchased to match the liabilities it incurred.
Income and expenses related to derivatives used to hedge or manage risks are
recorded on the accrual basis as an adjustment to the yield of the related
securities over the periods covered by the derivative contracts. Gains and
losses relating to early terminations of interest rate swaps used to hedge or
manage interest rate risk are deferred and amortized over the remaining period
originally covered by the swap. Gains and losses relating to derivatives used
to hedge the risks associated with anticipated transactions are deferred and
utilized to adjust the basis of the transaction once it has closed. If it is
determined that the transaction will not close, such gains and losses are
included in realized capital gains and losses.
ASSETS ON DEPOSIT
As of December 31, 1995 and 1994, the Company had assets on deposit with
regulatory agencies of $5,281 million and $5,145 million, respectively.
5. REINSURANCE AND OTHER INSURANCE TRANSACTIONS
In the normal course of business, the Company assumes and cedes reinsurance
with other insurance companies.
The Company acquired, in part through reinsurance effective in January 1995,
the group life, dental, disability, accidental death and dismemberment, vision
and long-term care insurance businesses from Travelers and certain of its
subsidiaries for $403 million. Commissions of $142 million and $4 million were
charged to earnings during 1995 and 1994, respectively, and considerations in
excess of commissions of $208 million and $49 million were recorded as a
direct charge to surplus in 1995 and 1994, respectively. In January, 1995, the
Company received assets with a fair market value equal to the $1,565 million
of liabilities assumed under the reinsurance agreements. The reinsured
businesses convert to Company contracts at policy anniversary date.
During 1995, the Company entered into reinsurance agreements with
MetraHealth to facilitate the transfer of certain of its group medical health
care business to MetraHealth.
The Company also has reinsurance agreements with certain of its life
insurance subsidiaries. Reserves for insurance assumed pursuant to these
agreements are included in reserves for life and health insurance and
annuities and amounted to $2,143 million and $1,193 million at December 31,
1995 and 1994, respectively.
In 1993, the Company assumed $1,540 million of life insurance and annuity
reserves of a New York life insurance company under rehabilitation and
received assets having a fair value equal to the reserves assumed.
The financial statements are shown net of ceded reinsurance. The amounts
related to reinsurance agreements, including agreements described above but
excluding certain agreements with non-affiliates for which the Company
provides administrative services, are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Reinsurance premiums assumed.............................. $890 $237 $264
Reinsurance ceded:
Premiums................................................ 457 77 86
Other income............................................ 26 1 3
Reduction in insurance liabilities (at December 31)..... 71 31 28
</TABLE>
64
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
A contingent liability exists with respect to reinsurance ceded should the
reinsurers be unable to meet their obligations.
Activity in the liability for unpaid group accident and health policy and
contract claims is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Balance at January 1............................. $1,708 $1,588 $1,517
Less reinsurance recoverables.................. 1 1 1
------ ------ ------
Net balance at January 1......................... 1,707 1,587 1,516
------ ------ ------
Incurred related to:
Current year................................... 2,424 1,780 1,797
Prior years.................................... (23) (7) (40)
------ ------ ------
Total incurred................................... 2,401 1,773 1,757
------ ------ ------
Paid related to:
Current year................................... 1,464 1,260 1,306
Prior years.................................... 417 393 380
------ ------ ------
Total paid....................................... 1,881 1,653 1,686
------ ------ ------
Net balance at December 31....................... 2,227 1,707 1,587
Plus reinsurance recoverables.................. 93 1 1
------ ------ ------
Balance at December 31........................... $2,320 $1,708 $1,588
====== ====== ======
</TABLE>
6. FEDERAL INCOME TAXES
The Company's federal income tax return is consolidated with certain
affiliates. The consolidating companies have executed a tax allocation
agreement. Under this agreement, the federal income tax provision is computed
on a separate return basis. Members receive reimbursement to the extent that
their losses and other credits result in a reduction of the current year's
consolidated tax liability.
Federal income tax expense has been calculated in accordance with the
provisions of the Internal Revenue Code, as amended (the Code). Under the
Code, the amount of federal income tax expense includes a tax on the Company's
surplus calculated by a prescribed formula that incorporates a differential
earnings rate between stock and mutual life insurance companies. In 1995, the
Company changed its calculation of surplus tax which resulted in an increase
in 1995 federal income tax expense of $95 million. Had such change occurred
prior to 1993, the Company's insurance expenses and taxes (excluding tax on
capital gains) and net loss for the year ended December 31, 1995 would have
been $2,758 million and $270 million, respectively; the Company's surplus,
insurance expenses and taxes (excluding tax on capital gains) and net loss at
and for the year ended December 31, 1994 would have been $5,902 million,
$2,894 million and $296 million, respectively; and the Company's insurance
expenses and taxes (excluding tax on capital gains) and net income for the
year ended December 31, 1993 would have been $2,702 million and $26 million,
respectively. The change would have had no effect on December 31, 1993 surplus
and surplus at December 31, 1992 would have been $5,124 million.
Total federal income taxes on operations and realized capital gains of $479
million, $192 million and $596 million were incurred in 1995, 1994 and 1993,
respectively.
7. EMPLOYEE BENEFIT PLANS
PENSION PLANS
The Company has defined benefit pension plans covering all eligible
employees and sales representatives of the Company and certain of its
subsidiaries. The Company is both the sponsor and administrator of these
plans. Retirement benefits are based on years of credited service and final
average earnings' history. The Company's funding policy is to make the minimum
contribution required by the Employee Retirement Income Security Act of 1974.
65
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Components of the net periodic pension (credit) cost for the years ended
December 31, 1995, 1994 and 1993 for the defined benefit qualified and non-
qualified pension plans are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
----- ----- -----
(IN MILLIONS)
<S> <C> <C> <C>
Service cost....................................... $ 58 $ 88 $ 71
Interest cost on projected benefit obligation...... 215 209 191
Return on assets................................... (262) 15 (380)
Net amortization and deferrals..................... (33) (298) 110
----- ----- -----
Net periodic pension (credit) cost................. $ (22) $ 14 $ (8)
===== ===== =====
</TABLE>
The assumed long-term rate of return on assets used in determining the net
periodic pension (credit) cost was 9.5 percent in 1995 and 8.5 percent in 1994
and 1993. The Company is recognizing the unrecognized net asset at transition,
attributable to the adoption of Statement of Financial Accounting Standards
No. 87, Employers' Accounting for Pensions, in 1993, over the average
remaining service period at the transition date of employees expected to
receive benefits under the pension plans.
The funded status of the qualified and non-qualified defined benefit pension
plans and a comparison of the accumulated benefit obligation, plan assets and
projected benefit obligation at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
------- -------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of obligations:
Vested..................................................... $(2,724) $(2,266)
Non vested................................................. (43) (47)
------- -------
Accumulated benefit obligation............................... $(2,767) $(2,313)
======= =======
Projected benefit obligation................................. $(3,094) $(2,676)
Plan assets at contract value................................ 3,286 2,900
------- -------
Plan assets in excess of projected benefit obligation........ 192 224
Unrecognized prior service cost.............................. 73 92
Unrecognized net loss from past experience different from
that assumed................................................ 79 33
Unrecognized net asset at transition......................... (326) (365)
------- -------
Adjustment required to recognize minimum liability........... (19) --
======= =======
Accrued pension cost at December 31.......................... $ (1) $ (16)
======= =======
</TABLE>
The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.25 percent for 1995, 8.5
percent for 1994 and 7.5 percent for 1993 in the United States and 8.0 percent
for 1995, 7.25 percent for 1994 and 7.0 percent for 1993 in Canada. The
weighted average assumed rate of increase in future compensation levels was
4.5 percent in 1995 and 5.0 percent in 1994 and 1993. In addition, several
other factors, such as expected retirement dates and mortality, enter into the
determination of the actuarial present value of the accumulated benefit
obligation.
The pension plans' assets are principally investment contracts issued by the
Company.
During 1995, the Company recognized a pension plan curtailment gain before
income tax of $8 million. This gain relates to the transfer of Company group
medical health care business personnel to MetraHealth.
SAVINGS AND INVESTMENT PLAN
The Company sponsors a savings and investment plan available for
substantially all employees under which the Company matches a portion of
employee contributions. During 1995, 1994 and 1993, the Company contributed
$34 million, $42 million and $48 million, respectively, to the plan.
66
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
OTHER POSTRETIREMENT BENEFITS
The Company also provides certain postretirement health care and life
insurance benefits for retired employees through insurance contracts.
Substantially all of the Company's employees may, in accordance with the plans
applicable to such benefits, become eligible for these benefits if they attain
retirement age, with sufficient service, while working for the Company.
The costs of non-pension postretirement benefits are recognized on an
accrual basis in accordance with guidelines prescribed by insurance regulatory
authorities. Such guidelines require the recognition of a postretirement
benefit obligation for current retirees and fully eligible or vested
employees. As prescribed by the guidelines, the Company has elected to
recognize over a period of twenty years the unrecognized postretirement
benefit asset and obligation (net asset and obligation at transition) in
existence on January 1, 1993 (effective date of guidelines).
The following table sets forth the postretirement health care and life
insurance plans' combined status reconciled with the amounts included in the
Company's balance sheets at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
---------------------- ----------------------
OVERFUNDED UNDERFUNDED OVERFUNDED UNDERFUNDED
---------- ----------- ---------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Accumulated postretirement
benefit obligations of retirees
and fully eligible
participants................... $(295) $(776) $(262) $(787)
Plan assets (Company insurance 397 411 393 358
contracts) at contract value... ----- ----- ----- -----
Plan assets in excess of (less
than) accumulated
postretirement benefit
obligation..................... 102 (365) 131 (429)
Unrecognized net loss (gain)
from past experience different
from that assumed and from
changes in assumptions......... 53 (83) (6) (44)
Prior service cost not yet
recognized in net periodic
retirement benefit cost........ (5) -- (5) --
Unrecognized (asset) obligation (102) 438 (108) 464
at transition.................. ----- ----- ----- -----
Prepaid (Accrued) non-pension
postretirement benefit cost at $ 48 $ (10) $ 12 $ (9)
December 31.................... ===== ===== ===== =====
</TABLE>
The components of the net periodic non-pension postretirement benefit cost
for the years ended December 31, 1995, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C>
Service cost.......................................... $ 26 $ 31 $ 32
Interest cost on accumulated postretirement benefit
obligation........................................... 74 76 87
Return on plan assets (Company insurance contracts)... (61) (37) (36)
Amortization of transition asset and obligation....... 18 18 20
Net amortization and deferrals........................ (4) (10) (17)
---- ---- ----
Net periodic non-pension postretirement benefit cost.. $ 53 $ 78 $ 86
==== ==== ====
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
non-pension postretirement benefit obligation was 10.0 percent in 1995, 11.0
percent in 1994 and 12.0 percent in 1993, gradually decreasing to 5.25
percent, 6.5 percent and 5.5 percent, respectively, over twelve years. The
weighted average discount rate used in determining the accumulated
postretirement benefit obligation was 7.25 percent, 8.5 percent, and 7.5
percent at December 31, 1995, 1994 and 1993, respectively.
If the health care cost trend rate assumptions were increased 1.0 percent,
the accumulated postretirement benefit obligation as of December 31, 1995,
1994 and 1993 would be increased 9.0 percent, 7.1 percent, and 7.2 percent
respectively. The effect of this change on the sum of the service and interest
cost components of the net periodic postretirement benefit cost for the years
ended December 31, 1995, 1994 and 1993 would be an increase of 11.0 percent,
7.9 percent and 7.8 percent, respectively.
67
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
8. LEASES
LEASE INCOME
During 1995, 1994 and 1993, the Company received $1,742 million, $1,786
million and $1,482 million, respectively, in lease income related to its
investment real estate. In accordance with standard industry practice, certain
of the Company's lease agreements with retail tenants result in income that is
contingent on the level of the tenants' sales revenues.
LEASE EXPENSE
The Company has entered into various lease agreements for office space, data
processing and other equipment. Rental expense under such leases was $171
million, $193 million and $214 million for the years ended December 31, 1995,
1994 and 1993, respectively. Future gross minimum rental payments under non-
cancelable leases, including those leases for which the Company recorded a
restructuring charge in 1995, are as follows (in millions):
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C>
1996............................................. $107
1997............................................. 82
1998............................................. 66
1999............................................. 48
2000............................................. 32
Thereafter....................................... 53
----
Total.......................................... $388
====
</TABLE>
9. OTHER COMMITMENTS AND CONTINGENCIES
GUARANTEES
The Company has entered into certain arrangements in the course of its
business which, under certain circumstances, may impose significant financial
obligations on the Company. The Company has entered into a support agreement
with a subsidiary whereby the Company has agreed to maintain the subsidiary's
net worth at one dollar or more. At December 31, 1995, the subsidiary's
assets, which consist principally of loans to affiliates, amounted to $3,309
million and its net worth amounted to $11 million.
In addition, the Company has entered into arrangements with certain of its
subsidiaries and affiliates to assist such subsidiaries and affiliates in
meeting various jurisdictions' regulatory requirements regarding capital and
surplus. The Company has also entered into a support arrangement with respect
to the reinsurance obligations of a subsidiary.
No material payments have been made under these arrangements and it is the
opinion of management that any payments required pursuant to these
arrangements would not likely have a material adverse effect on the Company's
financial position.
LITIGATION
In 1994, the Company entered into consent agreements (involving the payment
of fines and policyholder restitution payments) with state authorities,
including the insurance departments of all states, arising out of regulatory
proceedings and investigations relating to alleged improper practices in the
sale of individual life insurance. Litigation relating to the Company's
individual life insurance sales practices (including individual actions and
purported class actions) has also been instituted by or on behalf of
policyholders and others, and additional litigation relating to the Company's
sales practices may be commenced in the future. In addition, an investigation
by the Office of the United States Attorney for the Middle District of
Florida, in conjunction with a grand jury, into certain of the sales practices
that were the focus of the state investigations is ongoing. Various
litigation, claims and assessments against the Company, in addition to the
aforementioned, have arisen in the course of the Company's business,
operations and activities.
In certain of the matters referred to above, including actions with multiple
plaintiffs, very large and/or indeterminate amounts, including punitive and
treble damages, are sought. While it is not feasible to predict or determine
the ultimate outcome of all pending investigations and legal proceedings or to
make a meaningful estimate of the amount or range
68
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
of loss that could result from an unfavorable outcome in all such matters, it
is the opinion of the Company's management that their outcome, after
consideration of the provisions made in the Company's financial statements, is
not likely to have a material adverse effect on the Company's financial
position.
10. SURPLUS NOTES
The carrying values of surplus notes at December 31, 1995 and 1994 are shown
below:
<TABLE>
<CAPTION>
1995 1994
------- ------
(IN MILLIONS)
<S> <C> <C>
6.30% surplus notes scheduled to mature on November 1,
2003..................................................... $ 400 $ 400
7.00% surplus notes scheduled to mature on November 1,
2005..................................................... 250 --
7.70% surplus notes scheduled to mature on November 1,
2015..................................................... 200 --
7.45% surplus notes scheduled to mature on November 1,
2023..................................................... 300 300
7.80% surplus notes scheduled to mature on November 1, 250 --
2025..................................................... ------- -----
Total................................................... $ 1,400 $ 700
======= =====
</TABLE>
Interest on the Company's surplus notes is scheduled to be paid semi-
annually; principal payments are scheduled to be paid upon maturity. Such
payments of interest and principal may be made only with the prior approval of
the Superintendent of Insurance of the State of New York (Superintendent).
Subject to the prior approval of the Superintendent, the 7.45 percent
surplus notes may be redeemed, as a whole or in part, at the election of the
Company at any time on or after November 1, 2003. During 1995 and 1994, the
Company obtained Superintendent approval for and made total interest payments
of $48 million on the surplus notes.
11. FAIR VALUE INFORMATION
The estimated fair value amounts of financial instruments presented below
have been determined by the Company using market information available as of
December 31, 1995 and 1994 and appropriate valuation methodologies. However,
considerable judgment is necessarily required to interpret market data to
develop the estimates of fair value for financial instruments for which there
are no available market value quotations.
The estimates presented below are not necessarily indicative of the amounts
the Company could have realized in a market exchange. The use of different
market assumptions and/or estimation methodologies may have a material effect
on the estimated fair value amounts.
<TABLE>
<CAPTION>
NOTIONAL CARRYING ESTIMATED
AMOUNT VALUE FAIR VALUE
-------- -------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
DECEMBER 31, 1995:
ASSETS
Bonds........................................... $70,955 $76,119
Stocks, including subsidiaries.................. 3,646 3,608
Mortgage loans.................................. 14,211 14,818
Policy loans.................................... 3,956 4,023
Cash and short-term investments................. 1,923 1,923
LIABILITIES
Investment contracts included in:
Reserves for life and health insurance and an-
nuities....................................... 18,137 18,211
Policy proceeds and dividends left with the
Company....................................... 4,482 4,488
Premium deposit funds.......................... 12,891 13,322
OTHER FINANCIAL INSTRUMENTS
Bond purchase agreements........................ $ 601 3.3
Bond sales agreements........................... 80 (0.5)
Interest rate swaps............................. 280 1.5
Interest rate caps.............................. 231 --
Foreign currency swaps.......................... 89 4.4
Foreign currency forwards....................... 10 --
Covered call options............................ 25 (1.9) 1.9
Futures contracts............................... 1,402 (19.5) --
Unused lines of credit.......................... 1,600 1.1
</TABLE>
69
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
NOTIONAL CARRYING ESTIMATED
AMOUNT VALUE FAIR VALUE
-------- -------- ----------
(IN MILLIONS)
<S> <C> <C> <C>
DECEMBER 31, 1994:
ASSETS
Bonds........................................... $65,592 $63,194
Stocks, including subsidiaries.................. 3,672 3,660
Mortgage loans.................................. 14,524 14,269
Policy loans.................................... 3,964 3,645
Cash and short-term investments................. 2,334 2,334
LIABILITIES
Investment contracts included in:
Reserves for life and health insurance and an-
nuities....................................... 16,354 16,370
Policy proceeds and dividends left with the
Company....................................... 3,534 3,519
Premium deposit funds.......................... 14,006 13,997
OTHER FINANCIAL INSTRUMENTS
Bond purchase agreements........................ $2,755 4.1
Bond sales agreements........................... 1,450 0.8
Interest rate swaps............................. 272 (7.1)
Interest rate caps.............................. 185 (0.1)
Foreign currency swaps.......................... 36 (0.4)
Foreign currency forwards....................... 4 (0.2) (0.1)
Covered call options............................ 25 (1.9) 1.9
Unused lines of credit.......................... 1,450 1.0
</TABLE>
For bonds that are publicly traded, estimated fair value was obtained from
an independent market pricing service. Publicly traded bonds represented
approximately 78 percent of the carrying value and estimated fair value of the
total bonds as of December 31, 1995 and 77 percent of the carrying value and
estimated fair value of the total bonds as of December 31, 1994. For all other
bonds, estimated fair value was determined by management, based on interest
rates, maturity, credit quality and average life. Included in bonds are loaned
securities with estimated fair values of $8,148 million and $5,154 million at
December 31, 1995 and 1994, respectively. Estimated fair values of stocks were
generally based on quoted market prices, except for investments in common
stock of subsidiaries which are based on equity in net assets of the
subsidiaries. Estimated fair values of mortgage loans were generally based on
discounted projected cash flows using interest rates offered for loans to
borrowers with comparable credit ratings and for the same maturities.
Estimated fair values of policy loans were based on discounted projected cash
flows using U.S. Treasury rates to approximate interest rates and Company
experience to project patterns of loan repayment. For cash and short-term
investments, the carrying amount is a reasonable estimate of fair value.
Included in reserves for life and health insurance and annuities, policy
proceeds and dividends left with the Company and premium deposit funds are
amounts classified as investment contracts representing policies or contracts
that do not incorporate significant insurance risk. The fair values for these
liabilities are estimated using discounted projected cash flows, based on
interest rates being offered for similar contracts with maturities consistent
with those remaining for the contracts being valued. Policy proceeds and
dividends left with the Company also include other liabilities without defined
durations. The estimated fair value of such liabilities, which generally are
of short duration or have periodic adjustments of interest rates, approximates
their carrying value.
Estimated fair values of bond purchase/sale agreements were based on fees
charged to enter into similar arrangements or on the estimated cost to
terminate the outstanding agreements. For interest rate and foreign currency
swaps, interest rate caps, interest rate futures, foreign currency forwards,
futures contracts and covered call options, estimated fair value is the amount
at which the contracts could be settled based on estimates obtained from
dealers. The Company had unused lines of credit under agreements with various
banks. The estimated fair values of unused lines of credit were based on fees
charged to enter into similar agreements.
12. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES FOR MUTUAL LIFE INSURANCE
COMPANIES
The Company, as a mutual life insurance company, prepares its financial
statements in conformity with accounting practices prescribed or permitted by
the Insurance Department of the State of New York (statutory financial
statements)
70
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
which currently are considered to be generally accepted accounting principles
(GAAP) for mutual life insurance companies. However, the Financial Accounting
Standards Board (FASB) has issued certain pronouncements effective for 1996
annual financial statements and thereafter. Such pronouncements will no longer
allow statutory financial statements to be described as being prepared in
conformity with GAAP. Upon the effective date of the pronouncements, in order
for their financial statements to be described as being prepared in conformity
with GAAP, mutual life insurance companies will be required to adopt all
applicable accounting principles promulgated by the FASB in any general
purpose financial statements that they may issue. If permitted by insurance
regulatory authorities, the Company will issue 1996 general purpose financial
statements reflecting the adoption of all applicable GAAP pronouncements.
However, the Company has not finalized the quantification of the effects of
the application of the pronouncements on its financial statements.
71
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Metropolitan Life Insurance Company:
We have audited the accompanying statements of assets and liabilities of the
Growth, Income, Money Market, Diversified, International Stock, Stock Index,
and Aggressive Growth Divisions of Metropolitan Life Separate Account UL (the
"Separate Account") as of December 31, 1995, and the related statements of
operations for the year then ended and of changes in net assets for each of
the two years in the period then ended. These financial statements are the
responsibility of the Separate Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1995,
by correspondence with the custodian and the depositor of the Separate
Account. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets of the Growth, Income, Money Market, Diversified,
International Stock, Stock Index and Aggressive Growth Divisions of
Metropolitan Life Separate Account UL as of December 31, 1995 and the results
of their operations for the year ended and the changes in their net assets for
each of the two years in the period then ended, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
February 19, 1996
72
<PAGE>
METROPOLITAN LIFE SEPARATE ACCOUNT UL
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY INTERNATIONAL STOCK AGGRESSIVE
GROWTH INCOME MARKET DIVERSIFIED STOCK INDEX GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------ ----------- ---------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in Metropol-
itan Series Fund, Inc.
at Value (Note 1A):
Growth Portfolio
(4,099,345 shares; cost
$96,789,176)........... $112,977,954 -- -- -- -- -- --
Income Portfolio
(1,760,947 shares; cost
$22,143,191)........... -- $22,416,853 -- -- -- -- --
Money Market Portfolio
(282,752 shares; cost
$3,047,618)............ -- -- $2,954,758 -- -- -- --
Diversified Portfolio
(5,310,254 shares; cost
$77,330,732)........... -- -- -- $84,698,553 -- -- --
International Stock
Portfolio
(1,414,995 shares; cost
$17,940,365)........... -- -- -- -- $17,390,288 -- --
Stock Index Portfolio
(725,046 shares; cost
$11,289,160)........... -- -- -- -- -- $13,456,861 --
Aggressive Growth Port-
folio
(2,111,288 shares; cost
$50,602,535)........... -- -- -- -- -- -- $54,619,026
------------ ----------- ---------- ----------- ----------- ----------- -----------
Total Investments...... 112,977,954 22,416,853 2,954,758 84,698,553 17,390,288 13,456,861 54,619,026
Cash and Accounts Re-
ceivable............... -- -- 20,391 -- -- -- --
------------ ----------- ---------- ----------- ----------- ----------- -----------
Total Assets........... 112,977,954 22,416,853 2,975,149 84,698,553 17,390,288 13,456,861 54,619,026
LIABILITIES............. 537,332 105,382 409 517,812 94,151 31,091 287,229
------------ ----------- ---------- ----------- ----------- ----------- -----------
NET ASSETS.............. $112,440,622 $22,311,471 $2,974,740 $84,180,741 $17,296,137 $13,425,770 $54,331,797
============ =========== ========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
73
<PAGE>
METROPOLITAN LIFE SEPARATE ACCOUNT UL
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------------
MONEY INTERNATIONAL STOCK AGGRESSIVE
GROWTH INCOME MARKET DIVERSIFIED STOCK INDEX GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
----------- ---------- -------- ----------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends (Note 2)..... $ 5,497,071 $1,312,997 $161,198 $ 5,314,778 $152,268 $ 290,369 $5,091,762
Expenses:
Mortality and expense
charges (Note 3)...... 802,240 165,666 32,690 619,298 124,852 76,564 365,214
----------- ---------- -------- ----------- -------- ---------- ----------
Net investment income... 4,694,831 1,147,331 128,508 4,695,480 27,416 213,805 4,726,548
----------- ---------- -------- ----------- -------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVEST-
MENTS:
Net realized gain (loss)
from security transac-
tions.................. 293,233 (8,290) 35,201 248,523 28,349 29,512 152,387
Change in unrealized ap-
preciation of invest-
ments.................. 19,543,807 1,977,261 4,641 10,898,818 136,578 2,271,366 4,188,117
----------- ---------- -------- ----------- -------- ---------- ----------
Net realized and
unrealized gain on in-
vestments (Note 1B).... 19,837,040 1,968,971 39,842 11,147,341 164,927 2,300,878 4,340,504
----------- ---------- -------- ----------- -------- ---------- ----------
NET INCREASE IN NET AS-
SETS RESULTING FROM OP-
ERATIONS............... $24,531,871 $3,116,302 $168,350 $15,842,821 $192,343 $2,514,683 $9,067,052
=========== ========== ======== =========== ======== ========== ==========
</TABLE>
See Notes to Financial Statements.
74
<PAGE>
METROPOLITAN LIFE SEPARATE ACCOUNT UL
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH INCOME MONEY MARKET
DIVISION DIVISION DIVISION
-------------------------- ------------------------ ------------------------
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994
------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
NET ASSETS:
From operations:
Net investment income
(loss)................ $ 4,694,831 $ 1,529,435 $ 1,147,331 $ 971,668 $ 128,508 $ 130,231
Net realized gain
(loss) from security
transactions.......... 293,233 53,162 (8,290) (9,894) 35,201 (79,321)
Unrealized appreciation
(depreciation) of
investments........... 19,543,807 (4,282,800) 1,977,261 (1,415,108) 4,641 36,172
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from operations........ 24,531,871 (2,700,203) 3,116,302 (453,334) 168,350 87,082
------------ ------------ ----------- ----------- ----------- -----------
From capital
transactions:
Net premiums........... 41,455,659 45,546,952 8,687,776 10,328,856 2,988,786 6,425,154
Net portfolio
transfers............. (4,142,623) (2,746,223) (1,257,339) 48,939 (3,815,269) (6,647,524)
Other net transfers.... (17,287,875) (16,398,757) (3,439,203) (3,317,903) (661,810) (703,798)
Substitutions (Note
4).................... -- -- -- -- -- --
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease)
in net assets resulting
from capital
transactions........... 20,025,161 26,401,972 3,991,234 7,059,892 (1,488,293) (926,168)
------------ ------------ ----------- ----------- ----------- -----------
NET CHANGE IN NET
ASSETS................. 44,557,032 23,701,769 7,107,536 6,606,558 (1,319,943) (839,086)
NET ASSETS--BEGINNING OF
YEAR................... 67,883,590 44,181,821 15,203,935 8,597,377 4,294,683 5,133,769
------------ ------------ ----------- ----------- ----------- -----------
NET ASSETS--END OF
YEAR................... $112,440,622 $ 67,883,590 $22,311,471 $15,203,935 $ 2,974,740 $ 4,294,683
============ ============ =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
75
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INTERNATIONAL STOCK STOCK INDEX AGGRESSIVE GROWTH
DIVISION DIVISION DIVISION DIVISION
- --------------------------- ------------------------ ------------------------ --------------------------
FOR THE YEAR ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------
1995 1994 1995 1994 1995 1994 1995 1994
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 4,695,480 $ 1,734,612 $ 27,416 $ 485,015 $ 213,805 $ 132,182 $ 4,726,548 $ (98,251)
248,523 22,275 28,349 80,235 29,512 5,039 152,387 5,076
10,898,818 (3,636,719) 136,578 (842,359) 2,271,366 (129,802) 4,188,117 (100,707)
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
15,842,821 (1,879,832) 192,343 (277,109) 2,514,683 7,419 9,067,052 (193,882)
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
31,888,789 41,263,327 12,024,423 11,498,165 7,870,004 4,316,325 32,859,273 28,325,697
(5,102,550) (4,980,679) (1,502,438) 1,014,621 876,498 (301,802) (190,487) (15,434)
(13,529,725) (14,095,050) (4,797,949) (3,556,411) (2,682,256) (1,454,580) (12,996,305) (10,302,089)
-- 2,235,074 -- -- -- -- -- --
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
13,256,514 24,422,672 5,724,036 8,956,375 6,064,246 2,559,943 19,672,481 18,008,174
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
29,099,335 22,542,840 5,916,379 8,679,266 8,578,929 2,567,362 28,739,533 17,814,292
55,081,406 32,538,566 11,379,758 2,700,492 4,846,841 2,279,479 25,592,264 7,777,972
- ------------ ------------ ----------- ----------- ----------- ----------- ------------ ------------
$ 84,180,741 $ 55,081,406 $17,296,137 $11,379,758 $13,425,770 $ 4,846,841 $ 54,331,797 $ 25,592,264
============ ============ =========== =========== =========== =========== ============ ============
</TABLE>
76
<PAGE>
METROPOLITAN LIFE SEPARATE ACCOUNT UL
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
Metropolitan Life Separate Account UL (the "Separate Account") is a multi-
division unit investment trust registered under the Investment Company Act of
1940 and presently consists of seven investment divisions used to support
variable universal life insurance policies. The assets in each division are
invested in shares of the corresponding portfolio of the Metropolitan Series
Fund, Inc. (the "Fund"). Each portfolio has varying investment objectives
relative to growth of capital and income.
The Separate Account was formed by Metropolitan Life Insurance Company
("Metropolitan Life") on December 13, 1988, and registered as a unit investment
trust on January 5, 1990. The assets of the Separate Account are the property
of Metropolitan Life.
A summary of significant accounting policies, all of which are in accordance
with generally accepted accounting principles, is set forth below:
1. SIGNIFICANT ACCOUNTING POLICIES
A. VALUATION OF INVESTMENTS
Investments in shares of the Fund are valued at the reported net asset
values of the respective portfolios. A summary of investments of the
seven designated portfolios of the Fund in which the seven investment
divisions of the Separate Account invest as of December 31, 1995 is
included as Note 5. The methods used to value the Fund's investments at
December 31, 1995 are described in Note 1A of the Fund's 1994 Annual
Report.
B.SECURITY TRANSACTIONS
Purchases and sales are recorded on the trade date. Realized gains and
losses on sales of investments are determined on the basis of identified
cost.
C.FEDERAL INCOME TAXES
In the opinion of counsel of Metropolitan Life, the Separate Account will
be treated as a part of Metropolitan Life and its operations, and the
Separate Account will not be taxed separately as a "regulated investment
company" under existing law. Metropolitan Life is taxed as a life
insurance company. The policies permit Metropolitan Life to charge
against the Separate Account any taxes, or reserves for taxes,
attributable to the maintenance or operation of the Separate Account.
Metropolitan Life is not currently charging any federal income taxes
against the Separate Account arising from the earnings or realized
capital gains attributable to the Separate Account. Such charges may be
imposed in future years depending on market fluctuations and transactions
involving the Separate Account.
D. NET PREMIUMS
Metropolitan Life deducts a sales load and a state premium tax charge from
premiums before amounts are allocated to the Separate Account. In the case
of certain of the policies, Metropolitan Life also deducts a Federal
income tax charge before amounts are allocated to the Separate Account.
The Federal income tax charge is imposed in connection with certain of the
policies to recover a portion of the Federal income tax adjustment
attributable to policy acquisition expenses.
2. DIVIDENDS
On April 19, 1995 and December 19, 1995, the Fund declared dividends for all
shareholders of record on April 25, 1995 and December 27, 1995, respectively.
The amount of dividends received by the Separate Account was $17,820,443. The
dividends were paid to Metropolitan Life on April 26, 1995 and December 28,
1995, respectively, and were immediately reinvested in additional shares of the
portfolios in which the investment divisions invest. As a result of this
reinvestment, the number of shares of the Fund held by each of the seven
investment divisions increased by the following: Growth Portfolio 203,974
shares, Income Portfolio 103,768 shares, Money Market Portfolio 15,439 shares,
Diversified Portfolio 334,236 shares, International Stock Portfolio 12,446
shares, Stock Index Portfolio 15,791 shares, and Aggressive Growth Portfolio
199,098 shares.
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
3. EXPENSES
With respect to assets in the Separate Account that support certain
policies, Metropolitan Life applies a daily charge against the Separate
Account for the mortality and expense risks assumed by Metropolitan Life. This
charge is equivalent to the effective annual rate of .90% of the average daily
value of the net assets in the Separate Account which are attributable to such
policies.
4. SUBSTITUTION OF DIVISION
On June 1, 1994, the net assets of the Equity Income Division were
transferred to the Diversified Division under a substitution plan.
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5.SUMMARY OF INVESTMENTS AS OF DECEMBER 31, 1995
METROPOLITAN SERIES FUND, INC.
<TABLE>
<CAPTION>
GROWTH INCOME MONEY MARKET DIVERSIFIED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------- ------------ ------- ------------ ------- --------------
VALUE VALUE VALUE VALUE
(NOTE 1A) (NOTE 1A) (NOTE 1A) (NOTE 1A)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK
Aerospace.............. $ 46,873,200 (4.3%) $ 24,440,850 (2.2%)
Automotive............. 8,400,388 (0.8%) 3,604,913 (0.3%)
Banking................ 46,664,450 (4.3%) 27,106,325 (2.4%)
Building............... 6,695,350 (0.6%) 3,872,713 (0.4%)
Business Services...... 17,307,250 (1.6%) 10,205,126 (0.9%)
Chemical............... 62,351,063 (5.7%) 37,025,888 (3.3%)
Computer Software &
Service............... 64,486,020 (5.9%) 38,000,276 (3.4%)
Drug................... 68,975,425 (6.3%) 42,703,588 (3.8%)
Electrical Equipment... 18,014,400 (1.6%) 10,512,000 (1.0%)
Electronics............ 60,681,096 (5.5%) 37,210,134 (3.3%)
Financial Services..... 50,077,876 (4.6%) 33,011,138 (3.0%)
Food & Beverage........ 56,499,225 (5.1%) 33,167,400 (3.0%)
Hospital Management.... 23,432,125 (2.1%) 16,054,075 (1.4%)
Hospital Supply........ 46,253,650 (4.2%) 25,576,525 (2.3%)
Hotel & Restaurant..... 22,954,525 (2.1%) 13,319,088 (1.2%)
Insurance.............. 31,977,600 (2.9%) 18,682,688 (1.7%)
Machinery.............. 47,891,562 (4.4%) 28,921,275 (2.6%)
Metals & Mining........ 7,637,612 (0.7%) 4,655,687 (0.4%)
Office Equipment....... 68,138,213 (6.2%) 39,834,663 (3.6%)
Oil.................... 69,771,787 (6.4%) 42,551,035 (3.8%)
Oil Services........... 18,143,500 (1.7%) 10,505,225 (0.9%)
Paper.................. 8,429,400 (0.8%) 4,914,800 (0.4%)
Personal Care.......... 24,817,000 (2.3%) 15,836,400 (1.4%)
Retail Trade........... 82,486,135 (7.5%) 48,731,799 (4.4%)
Tobacco................ 26,525,550 (2.4%) 16,507,200 (1.5%)
Toys & Musical Instru-
ments................. 9,913,984 (0.9%) 5,967,406 (0.5%)
Utilities--Telephone... 31,793,450 (2.9%) 18,417,625 (1.7%)
Video.................. 49,360,428 (4.5%) 28,511,540 (2.6%)
-------------- --------------
Total Common Stock..... 1,076,552,264 (98.3%) 639,847,382 (57.4%)
-------------- --------------
CONVERTIBLE PREFERRED
STOCK
Oil Services........... 154,500 (0.0%)
PREFERRED STOCK
Retail Trade........... 209,061 (0.0%)
-------------- --------------
Total Stock Securi-
ties.................. $1,076,552,264 (98.3%) $ 640,210,943 (57.4%)
-------------- --------------
LONG-TERM DEBT SECURI-
TIES
Corporate Bonds:
Banking................ $ 13,202,211 (3.7%) $ 20,432,477 (1.8%)
Financial Services..... 27,942,460 (8.0%) 38,284,443 (3.5%)
Industrial--Miscellane-
ous................... 29,715,375 (8.5%) 39,027,649 (3.5%)
Mortgage Backed........ 12,183,305 (3.5%) 12,889,132 (1.2%)
------------ --------------
Total Corporate Bonds.. 83,043,351 (23.7%) 110,633,701 (10.0%)
------------ --------------
Federal Agency Obliga-
tions................. 19,288,010 (5.5%) 24,303,049 (2.2%)
Federal Treasury Obli-
gations............... 173,723,485 (49.7%) 227,577,120 (20.4%)
Foreign Obligations.... 31,751,086 (9.1%) 43,686,100 (3.9%)
Government Sponsored... 5,854,471 (1.7%) 7,073,233 (0.6%)
Yankee Bonds........... 18,464,936 (5.3%) 26,274,500 (2.4%)
------------ --------------
Total Bonds............ 249,081,988 (95.0%) 328,914,002 (29.5%)
------------ --------------
SHORT-TERM OBLIGATIONS
Bank Note.............. $ 1,999,841 (4.9%)
Bankers' Acceptance.... 1,966,149 (4.8%)
Commercial Paper....... $ 19,775,000 (1.8%) 13,785,000 (3.9%) 17,760,043 (43.9%) 31,189,000 (2.8%)
Corporate Note......... 2,006,689 (5.0%)
Federal Agency Obliga-
tions................. 9,613,137 (23.8%)
Federal Treasury Obli-
gations............... 6,874,040 (17.0%)
-------------- ------------ ----------- --------------
Total Short-Term Obli-
gations............... 19,775,000 (1.8%) 13,785,000 (3.9%) 40,219,899 (99.4%) 31,189,000 (2.8%)
-------------- ------------ ----------- --------------
TOTAL INVESTMENTS....... 1,096,327,264 (100.1%) 345,910,339 (98.9%) 40,219,899 (99.4%) 1,110,947,646 (99.7%)
Other Assets Less Lia-
bilities.............. (1,576,667) (-0.1%) 4,002,689 (1.1%) 236,376 (0.6%) 3,885,951 (0.3%)
-------------- ------------ ----------- --------------
NET ASSETS.............. $1,094,750,597 (100.0%) $349,913,028 (100.0%) $40,456,275 (100.0%) $1,114,833,597 (100.0%)
============== ============ =========== ==============
</TABLE>
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5.SUMMARY OF INVESTMENTS AS OF DECEMBER 31, 1995--(CONTINUED)
METROPOLITAN SERIES FUND, INC.
<TABLE>
<CAPTION>
INTERNATIONAL
STOCK
PORTFOLIO
-------------
VALUE
(NOTE 1A)
<S> <C> <C>
COMMON STOCK
Airlines................................................ $ 778,273 (0.3%)
Automotive.............................................. 5,547,826 (1.9%)
Banking................................................. 9,258,655 (3.1%)
Beverages............................................... 6,315,913 (2.1%)
Broadcasting & Publishing............................... 755,063 (0.3%)
Building................................................ 7,676,572 (2.6%)
Business Services....................................... 5,642,530 (1.9%)
Chemicals............................................... 5,969,074 (2.0%)
Electrical Equipment.................................... 9,578,893 (3.2%)
Financial Services...................................... 9,274,046 (3.1%)
Foods................................................... 6,130,161 (2.1%)
Health & Personal Care.................................. 10,013,145 (3.4%)
Industrial--Miscellaneous............................... 5,939,198 (2.0%)
Insurance............................................... 8,712,224 (2.9%)
Leisure................................................. 5,033,575 (1.7%)
Machinery............................................... 10,540,444 (3.5%)
Metals--Steel & Iron.................................... 3,707,213 (1.2%)
Metals--Gold............................................ 17,292,196 (5.8%)
Metals--Miscellaneous................................... 11,269,782 (3.8%)
Miscellaneous........................................... 1,417,500 (0.5%)
Miscellaneous Materials................................. 10,149,225 (3.4%)
Office Equipment........................................ 205,063 (0.1%)
Offshore Funds & Investment Trusts...................... 5,181,098 (1.7%)
Oil--Domestic........................................... 9,941,445 (3.3%)
Oil--International...................................... 783,833 (0.3%)
Paper................................................... 527,824 (0.2%)
Railroad................................................ 2,987,040 (1.0%)
Real Estate............................................. 5,468,829 (1.8%)
Recreation.............................................. 3,126,583 (1.1%)
Retail Trade............................................ 9,116,882 (3.1%)
Telecommunications...................................... 888,768 (0.3%)
Textiles & Apparel...................................... 1,304,293 (0.4%)
Transportation--Trucking................................ 624,375 (0.2%)
Utilities--Electric..................................... 4,080,974 (1.4%)
Utilities--Water........................................ 998,366 (0.3%)
Wholesale & International Trade......................... 4,857,355 (1.6%)
------------
Total Common Stock....................................... 201,094,236 (67.6%)
Convertible Preferred Stock.............................. 426,075 (0.1%)
Preferred Stock.......................................... 2,488,326 (0.9%)
------------
Total Equity Securities.................................. 204,008,637 (68.6%)
Convertible Bonds........................................ 17,774,377 (6.0%)
------------
TOTAL INVESTMENTS........................................ 221,783,014 (74.6%)
Other Assets Less Liabilities............................ 75,678,027 (25.4%)
------------
NET ASSETS............................................... $297,461,041 (100.0%)
============
</TABLE>
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
5.SUMMARY OF INVESTMENTS AS OF DECEMBER 31, 1995--(CONTINUED)
METROPOLITAN SERIES FUND, INC.
<TABLE>
<CAPTION>
STOCK
INDEX
PORTFOLIO
---------
VALUE
(NOTE 1A)
<S> <C> <C>
COMMON STOCK
Aerospace............................................... $ 13,979,982 (2.2%)
Airlines................................................ 2,644,937 (0.4%)
Automotive.............................................. 16,087,052 (2.5%)
Banking................................................. 41,224,016 (6.5%)
Beverages............................................... 35,762,761 (5.6%)
Building................................................ 6,721,186 (1.1%)
Chemical................................................ 22,748,995 (3.6%)
Container............................................... 769,825 (0.1%)
Cosmetics............................................... 4,724,749 (0.7%)
Drug.................................................... 41,170,632 (6.5%)
Electrical Connectors................................... 1,504,050 (0.2%)
Electrical Equipment.................................... 23,767,938 (3.7%)
Electronics............................................. 26,279,796 (4.1%)
Financial Services...................................... 19,611,919 (3.1%)
Foods................................................... 16,942,138 (2.7%)
Hospital Management..................................... 6,287,681 (1.0%)
Hospital Supply......................................... 19,150,108 (3.0%)
Hotel & Restaurant...................................... 6,409,988 (1.0%)
Industrials--Miscellaneous.............................. 13,838,876 (2.2%)
Insurance............................................... 22,054,204 (3.5%)
Leisure................................................. 1,010,300 (0.2%)
Machinery............................................... 9,363,339 (1.5%)
Metals--Aluminum........................................ 2,557,576 (0.4%)
Metals--Gold............................................ 3,688,584 (0.6%)
Metals--Miscellaneous................................... 2,603,457 (0.4%)
Metals--Steel & Iron.................................... 2,102,738 (0.3%)
Office Equipment........................................ 35,293,640 (5.6%)
Oil--Crude Producers.................................... 577,675 (0.1%)
Oil--Domestic........................................... 12,288,633 (1.9%)
Oil--International...................................... 37,270,188 (5.9%)
Oil Services............................................ 6,695,613 (1.1%)
Paper................................................... 8,585,105 (1.4%)
Photography............................................. 4,004,325 (0.6%)
Printing & Publishing................................... 7,978,951 (1.3%)
Railroad................................................ 7,750,478 (1.2%)
Retail Trade............................................ 29,479,447 (4.6%)
Services................................................ 4,541,599 (0.7%)
Shoes................................................... 1,906,875 (0.3%)
Soaps................................................... 12,378,362 (1.9%)
Textiles & Apparel...................................... 1,231,638 (0.2%)
Tire & Rubber........................................... 1,576,100 (0.2%)
Toys & Musical Instruments.............................. 792,458 (0.1%)
Transportation-Trucking................................. 907,625 (0.1%)
Utilities--Electric..................................... 21,261,693 (3.3%)
Utilities--Gas Distribution............................. 3,778,086 (0.6%)
Utilities--Gas Pipeline................................. 3,294,056 (0.5%)
Utilities--Telephone.................................... 53,586,928 (8.5%)
Video................................................... 14,232,219 (2.2%)
------------
Total Common Stock....................................... 632,418,521 (99.4%)
TOTAL SHORT-TERM OBLIGATIONS--U.S. TREASURY BILLS........ 5,503,636 (0.9%)
------------
TOTAL INVESTMENTS........................................ 637,922,157 (100.3%)
Other Assets Less Liabilities............................ (2,098,918) (-0.3%)
------------
NET ASSETS............................................... $635,823,239 (100.0%)
============
</TABLE>
81
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(CONCLUDED)
5. SUMMARY OF INVESTMENTS AS OF DECEMBER 31, 1995--(CONCLUDED)
METROPOLITAN SERIES FUND, INC.
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH
PORTFOLIO
------------
VALUE
(NOTE 1A)
<S> <C> <C>
COMMON STOCK
Aerospace................................................ $ 37,289,175 (3.9%)
Airlines................................................. 23,823,062 (2.5%)
Automotive............................................... 3,636,625 (0.4%)
Business Services........................................ 43,265,943 (4.5%)
Chemical................................................. 9,393,750 (1.0%)
Computer Software & Service.............................. 83,974,480 (8.8%)
Diversified.............................................. 9,028,800 (0.9%)
Drug..................................................... 23,960,467 (2.5%)
Electrical Equipment..................................... 27,345,600 (2.9%)
Electronics.............................................. 15,239,300 (1.6%)
Financial Services....................................... 14,461,700 (1.5%)
Food & Beverage.......................................... 18,494,325 (1.9%)
Hospital Supply.......................................... 236,600 (0.0%)
Hotel & Restaurant....................................... 57,102,144 (6.0%)
Insurance................................................ 52,168,826 (5.4%)
Machinery................................................ 32,567,513 (3.4%)
Office Equipment......................................... 41,544,576 (4.3%)
Oil...................................................... 37,022,038 (3.9%)
Oil Services............................................. 24,723,888 (2.6%)
Personal Care............................................ 1,040,775 (0.1%)
Printing & Publishing.................................... 7,862,175 (0.8%)
Recreation............................................... 49,853,613 (5.2%)
Retail Trade............................................. 120,841,866 (12.6%)
Textiles & Apparel....................................... 72,565,958 (7.6%)
Tobacco.................................................. 22,317,300 (2.3%)
Utilities--Telephone..................................... 19,429,313 (2.0%)
------------
Total Common Stock....................................... 849,189,812 (88.6%)
CONVERTIBLE PREFERRED STOCK
Machinery................................................ 6,481,163 (0.7%)
PREFERRED STOCK
Airlines................................................. 7,062,000 (0.7%)
------------
Total Equity Securities.................................. 862,732,975 (90.0%)
TOTAL LONG-TERM DEBT SECURITIES--CONVERTIBLE BONDS........ 9,658,850 (1.0%)
TOTAL SHORT-TERM OBLIGATIONS--COMMERCIAL PAPER............ 58,265,000 (6.1%)
------------
TOTAL INVESTMENTS......................................... 930,656,825 (97.1%)
Other Assets Less Liabilities............................. 28,258,408 (2.9%)
------------
NET ASSETS................................................ $958,915,233 (100.0%)
============
</TABLE>
82
<PAGE>
APPENDIX TO PROSPECTUS
OPTIONAL INCOME PLANS
The insurance proceeds when the insured dies, the proceeds payable on the
Final Date, or the cash surrender value payable on full surrender of a Policy,
instead of being paid in one lump sum, may be applied under one or more of the
following income plans. Values under the income plans do not depend upon the
investment experience of a separate account. The selection of an income plan
can significantly affect the federal income tax consequences associated with
the Policy proceeds. Owners and beneficiaries should consult with qualified
tax advisers in this regard.
OPTION 1. Interest income
The amount applied will earn interest which will be paid monthly.
Withdrawals of at least $500 each may be made at any time by written request.
OPTION 2. Installment Income for a Stated Period
Monthly installment payments will be made so that the amount applied, with
interest, will be paid over the period chosen (from 1 to 30 years).
OPTION 2A. Installment Income of a Stated Amount
Monthly installment payments of a chosen amount will be made until the
entire amount applied, with interest, is paid.
OPTION 3. Single Life Income--Guaranteed Payment Period
Monthly payments will be made during the lifetime of the payee with a chosen
guaranteed payment period of 10, 15 or 20 years.
OPTION 3A. Single Life Income--Guaranteed Return
Monthly payments will be made during the lifetime of the payee. If the payee
dies before the total amount applied under this plan has been paid, the
remainder will be paid in one sum as a death benefit.
OPTION 4. Joint and Survivor Life Income
Monthly payments will be made jointly to two persons during their lifetime
and will continue during the remaining lifetime of the survivor. A total
payment period of 10 years is guaranteed.
Other Frequencies and Plans. Instead of monthly payments, the owner may
elect to have payments made quarterly, semiannually or annually. Other income
plans may be arranged with Metropolitan Life's approval.
Choice of Income Plans. See "Policy Benefits--Optional Income Plans" and
"Policy Rights--Surrenders" regarding how optional income plans may be chosen.
When an income plan starts, a separate contract will be issued describing the
terms of the plan. Specimen contracts may be obtained from Metropolitan Life
sales representatives, and reference should be made to these forms for further
details.
Limitations. If the payee is not a natural person, the choice of an income
plan will be subject to Metropolitan Life's approval. A collateral assignment
will modify a prior choice of income plan. The amount due the assignee will be
payable in one sum and the balance will be applied under the income plan. A
choice of an income plan will not become effective unless each payment under
the plan would be at least $50. Income plan payments may not be assigned and,
to the extent permitted by law, will not be subject to the claims of
creditors.
Income Plan Rates. Amounts applied under the interest income and installment
income plans will earn interest at a rate set from time to time by
Metropolitan Life but never less than 3% per year. Life income payments will
be based on a rate set by Metropolitan Life and in effect on the date the
amount to be applied becomes payable, but never less than the minimum payments
guaranteed in the Policy. Such minimum guaranteed payments are based on
certain assumed mortality rates and an interest rate of 3%.
83
<PAGE>
OPTIONAL INSURANCE BENEFITS
Optional insurance benefit riders may be attached to a Policy, subject to
certain insurance underwriting requirements and the payment of additional
premiums. These riders are described in general terms below. Limitations and
conditions are contained in the riders, and the description below is subject
to the specific terms of the riders. A prospective purchaser may obtain a
specimen Policy with riders from a Metropolitan Life sales representative. The
duration, but not the amount, of rider benefits may depend on the investment
experience of a separate account.
Disability Waiver Benefit. This rider waives the entire monthly deduction
during the total disability of the insured if the insured is totally and
continuously disabled for at least six months beginning prior to age 60. If
the total disability continues without interruption to the Policy anniversary
at age 65, it will be deemed permanent and all further monthly deductions will
be waived as they fall due. If there has been an increase in the death benefit
resulting from a request by the Policy owner and the Policy owner at the time
of the increase did not request or did not qualify for this rider with respect
to such increase, monthly deductions for charges related to such increase will
continue to be made against the cash value of the Policy. This could result in
the cash value being insufficient to cover the monthly deductions related to
the increase. In such a case, the grace period and termination provisions of
the Policy would apply only to such increase in death benefit. Since the
monthly deduction with respect to the increase in the death benefit could
reduce the cash value of the Policy to zero, it may be advantageous for the
Policy owner, at the time of the total disability, to reduce the death benefit
to that amount which is subject to this rider. At the present time, this rider
is not available if the long term care benefit rider has been selected.
Accidental Death Benefit. This rider provides additional insurance equal to
an amount stated in the Policy if the insured dies from an accident prior to
age 70. It also provides an additional amount equal to twice the stated amount
if the insured dies from an accident occurring while the insured is a fare-
paying passenger on a common carrier. This rider is available at issue only.
Children's Term Insurance Benefit. This rider provides term insurance on
each insured child payable to the child's beneficiary if an insured child dies
before the end of coverage on that child (generally at the child's twenty-
fifth birthday).
Spouse Term Insurance Benefit. This rider provides term insurance on the
life of the spouse payable to the spouse's beneficiary if the spouse dies
prior to age 65 while the rider is in effect.
Accelerated Death Benefit. This rider provides for a one-time discounted
payment of all or a portion of the death benefit to the Policy owner once the
insured has been determined to be terminally ill with twelve months or less to
live. The size of the benefit payment and the maximum benefit are stated in
the rider. There are no premiums or rider fees for this rider. A payment of
all the discounted death benefit will not be subject to any surrender charges.
Upon payment of a portion of the death benefit, the death benefit under the
Policy is reduced to reflect the amount of the payment. In addition, the
specified face amount, the cash value and the cash surrender value are reduced
by the same proportion as the amount of the reduction of the death benefit
divided by the death benefit prior to the payment. Any outstanding loan is
reduced and paid out of the proceeds of the portion only if such reduction is
necessary to keep the Policy in force. Moreover, in the case of payment of all
of the death benefit, the amount of any outstanding Policy loan will be
deducted from the payment.
The payment under this rider may be taxable or may affect eligibility for
benefits under state or federal law. Counsel and other competent advisors
should be consulted to determine the effect on an individual situation.
84
<PAGE>
[LOGO METLIFE(R)]
Bulk
Rate
U.S.
Postage
Paid
Rutland,
VT
MetLife Customer Service Center--Warwick Permit
P.O. Box 520 220
Warwick, RI 02887-0520
ADDRESS CORRECTION REQUESTED
FORWARDING AND RETURN
POSTAGE GUARANTEED
<PAGE>
[LOGO METLIFE(R)]
Bulk
Rate
U.S.
Postage
Paid
Rutland,
VT
MetLife Customer Service Center--Tulsa Permit
P.O. Box 21889 220
Tulsa, OK 74121-1889
ADDRESS CORRECTION REQUESTED
FORWARDING AND RETURN
POSTAGE GUARANTEED
<PAGE>
METLIFE (R)
UL II
LOGO
FLEXIBLE PREMIUM MULTIFUNDED LIFE
PROSPECTUSES FOR
. FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICIES
ISSUED BY
METROPOLITAN LIFE INSURANCE COMPANY
. METROPOLITAN SERIES FUND, INC.
[ART]
ML-UL2 (5/96 EDITION) PRINTED IN U.S.A.
96041ASX (EXP0597) MLIC-LD
<PAGE>
PART II
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
Cross-Reference Table.
The Prospectus, consisting of 84 pages.
Undertaking to File Reports as filed with the initial filing of this
Registration Statement on May 14, 1992.
Undertaking pursuant to Rule 484(b)(1) under the Securities Act of 1933
as filed with the initial filing of this Registration Statement on May
14, 1992.
Representation, Description and Undertaking pursuant to rule 6e-
3(T)(b)(13)(iii)(F) under the Investment Company Act of 1940 as filed
with the initial filing of this Registration Statement on May 14, 1992.
The signatures.
Written Consents of the following persons:
Anthony Amodeo (filed with Exhibit 6 below).
Freedman, Levy, Kroll & Simonds as filed with the initial filing of
this Registration Statement on May 14, 1992.
Deloitte & Touche LLP.
The following exhibits:
<TABLE>
<C> <S> <C>
1.A (1) --Resolution of Board of Directors of Metropolitan Life
effecting the establishment of Metropolitan Life Separate
Account UL............................................... *
(2) --Not Applicable
(3) --(a) Not Applicable
--(b) Form of Selected Broker Agreement................... *
--(c) Schedule of Sales Commissions....................... ++++
(4) --Not applicable
(5) --(a) Specimen Flexible Premium Multifunded Life Insurance
Policy (including any alternate pages as required by
state law) with form of riders, if any................ ++
--(b) Proposed New York Endorsement to Flexible Premium
Multifunded Life Insurance Policy..................... *
--(c) Additional alternate pages required by state law.... **
--(d) Riders for Long-term Care and Accelerated Death
Benefit................................................... ***
--(e) Additional alternate pages required by state law.... ***
--(f) Additional alternate pages required by state law.... *****
--(g) Endorsement adding death benefit Option C........... +++
(6) --(a) Charter and By-Laws of Metropolitan Life............ +++++
--(b) Amendment to By-laws................................ +++++
(7) --Not Applicable
(8) --Not Applicable
(9) --Not Applicable
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S> <C>
(10) --Application Form for Policy and Form of Receipt and Temporary
Insurance Agreement........................................... *
2. --See Exhibit 1.A(5) above
3. --Opinion and consent of Counsel as to the legality of the
securities being registered................................... ++
4. --Not Applicable
5. --Not Applicable
6. --Opinion and consent of Anthony Amodeo relating to the
Flexible Premium Multifunded Life Insurance Policies,
including representations required under the terms of an SEC
exemptive order (File No. 812-9452) permitting the deduction
of a charge to compensate Metropolitan Life for the tax impact
of deferral of acquisition costs.............................. +
7. --Form of Notice of Cancellation Right and Request for
Cancellation relating to the Flexible Premium Multifunded Life
Insurance Policies pursuant to Rule 6e-3(T)(b)(13)(viii) under
the Investment Company Act of 1940............................ +++
8. --Powers of Attorney........................................... ****
9. --Method of Computing Exchange pursuant to Rule 6e-
3(T)(b)(13)(v)(B) under the Investment Company Act of 1940
(not required because there will be no cash value adjustments)
10. --Statement of Metropolitan Life pursuant to Rule 27d-2 under
the Investment Company Act of 1940............................ +
11. --Memoranda describing certain procedures filed pursuant to
Rule 6e-3(T)(b)(12)(iii)...................................... **
27. --Financial Data Schedule...................................... +
</TABLE>
- --------
+ Filed herewith.
* Incorporated by reference to the initial filing of the Registration
Statement of Separate Account UL (File No. 33-32813) on January 5, 1990.
** Incorporated by reference to the filing of Pre-Effective Amendment No. 1
to the Registration Statement of Separate Account UL (File No. 33-32813)
on April 6, 1990.
*** Incorporated by reference to the filing of Post-Effective Amendment No.
1 to the Registration Statement of Separate Account UL (File No. 33-
32813) on March 1, 1991.
**** Powers of Attorney for signatories other than Theodossios Athanassiades,
Harry P. Kamen, Stewart G. Nagler, Curtis H. Barnette, Hugh B. Price and
Ruth J. Simmons were filed with the filing of Post-Effective Amendment
No. 1 to the Registration Statement of Separate Account UL (File No. 33-
32813) on March 1, 1991. Powers of Attorney for Theodossios
Athanassiades and Harry P. Kamen were filed with the initial filing of
the Registration Statement of Separate Account UL (File No. 33-57320) on
January 22, 1993. A Power of Attorney for Stewart G. Nagler was filed
with Pre-Effective Amendment No. 1 of Registration Statement of Separate
Account UL (File No. 33-57320) on July 29, 1993. A Power of Attorney for
Curtis H. Barnette was filed with the filing of Post-Effective Amendment
No. 3 to this Registration Statement on April 21, 1995. Powers of
Attorney for Hugh B. Price and Ruth J. Simmons were filed with the
filing of Pre-Effective Amendment No. 1 to the Registration Statement of
Separate Account UL (File No. 33-91226) on September 8, 1995. The
foregoing Powers of Attorney are incorporated by reference.
***** Incorporated by reference to the filing of Post-Effective Amendment No.
2 to the Registration Statement of Separate Account UL (File No. 33-
32813) on March 2, 1992.
++ Included in the filing of Post-Effective Amendment No. 1 to this
Registration Statement on March 1, 1993.
+++ Included in the filing of Post-Effective Amendment No. 2 to this
Registration Statement on March 2, 1994.
++++ Incorporated by reference from "Distribution of the Policies" in the
Prospectus included herein.
+++++ Incorporated by reference to the filing of Post-Effective Amendment No.
4 to the Registration Statement of Separate Account UL (File No. 33-
57320) on March 1, 1996.
II-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, METROPOLITAN
LIFE INSURANCE COMPANY CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR
EFFECTIVENESS OF THIS AMENDED REGISTRATION STATEMENT PURSUANT TO RULE 485(b)
UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS AMENDED REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED, AND ITS SEAL TO BE HEREUNTO AFFIXED AND ATTESTED, ALL IN THE CITY
OF NEW YORK, STATE OF NEW YORK, THIS 26TH DAY OF APRIL, 1996.
METROPOLITAN LIFE
INSURANCE COMPANY
(Seal)
/s/ Richard M. Blackwell
By: _____________________________________
RICHARD M. BLACKWELL, ESQ.
SENIOR VICE-PRESIDENT & GENERAL COUNSEL
/s/ Ruth Gluck
Attest: _____________________________
RUTH GLUCK, ESQ.
ASSISTANT SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDED
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
* Chairman, President,
- ------------------------------------- Chief Executive
HARRY P. KAMEN Officer and
Director (Principal
Executive Officer)
* Vice-Chairman of the
- ------------------------------------- Board and Director
THEODOSSIOS ATHANASSIADES
* Senior Executive
- ------------------------------------- Vice-President and
STEWART G. NAGLER Chief Financial
Officer (Principal
Financial Officer)
* Senior Vice-
- ------------------------------------- President and
FREDERICK P. HAUSER Controller
(Principal
Accounting Officer)
* Director
- -------------------------------------
CURTIS H. BARNETTE
* Director
- -------------------------------------
JOAN GANZ COONEY
/s/ Christopher P. Nicholas April 26, 1996
*By _________________________________
CHRISTOPHER P. NICHOLAS, ESQ.
ATTORNEY-IN-FACT
II-3
<PAGE>
SIGNATURE TITLE DATE
* Director
- -------------------------------------
JAMES R. HOUGHTON
* Director
- -------------------------------------
HELENE L. KAPLAN
* Director
- -------------------------------------
RICHARD J. MAHONEY
* Director
- -------------------------------------
ALLEN E. MURRAY
* Director
- -------------------------------------
JOHN J. PHELAN, JR.
* Director
- -------------------------------------
JOHN B. M. PLACE
* Director
- -------------------------------------
HUGH B. PRICE
* Director
- -------------------------------------
ROBERT G. SCHWARTZ
* Director
- -------------------------------------
RUTH J. SIMMONS, PH.D.
* Director
- -------------------------------------
WILLIAM S. SNEATH
* Director
- -------------------------------------
JOHN R. STAFFORD
/s/ Christopher P. Nicholas April 26, 1996
*By _________________________________
CHRISTOPHER P. NICHOLAS, ESQ.
ATTORNEY-IN-FACT
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
METROPOLITAN LIFE SEPARATE ACCOUNT UL, CERTIFIES THAT IT MEETS ALL OF THE
REQUIREMENTS FOR EFFECTIVENESS OF THIS AMENDED REGISTRATION STATEMENT PURSUANT
TO RULE 485(b) UNDER THE SECURITIES ACT OF 1933 AND HAS DULY CAUSED THIS
AMENDED REGISTRATION STATEMENT TO BE SIGNED, ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED, AND ITS SEAL TO BE HEREUNTO AFFIXED AND ATTESTED,
ALL IN THE CITY OF NEW YORK, STATE OF NEW YORK THIS 26TH DAY OF APRIL, 1996.
METROPOLITAN LIFE SEPARATE ACCOUNT UL
(REGISTRANT)
By: METROPOLITAN LIFE
INSURANCE COMPANY
(DEPOSITOR)
(Seal) /s/ Richard M. Blackwell
By: _____________________________
RICHARD M. BLACKWELL, ESQ.
SENIOR VICE-PRESIDENT AND
GENERAL COUNSEL
/s/ Ruth Gluck
Attest: _____________________________
RUTH GLUCK, ESQ.
ASSISTANT SECRETARY
II-5
<PAGE>
INDEPENDENT AUDITORS' CONSENT
Metropolitan Life Insurance Company:
We consent to the use in this Post-Effective Amendment No. 4 to the
Registration Statement No. 33-47927 of Metropolitan Life Separate Account UL on
Form S-6 of our report dated February 19, 1996 relating to Metropolitan Life
Separate Account UL appearing in the Prospectus, which is a part of such
Registration Statement, our report dated February 9, 1996 relating to
Metropolitan Life Insurance Company also appearing in the Prospectus, and to
the reference to us under the heading "Experts" in such Prospectus.
Deloitte & Touche LLP
New York, New York
April 26, 1996
II-6
<PAGE>
April 26, 1996
Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010
Dear Sirs:
This opinion is furnished in connection with the filing of Post-Effective
Amendment No. 4 to Registration Statement No. 33-47927 on Form S-6
("Registration Statement") which covers premiums received under Flexible Premium
Multifunded Life Insurance Policies ("Policies") offered by Metropolitan Life
Insurance Company ("MLIC") in each State where they have been approved by
appropriate State insurance authorities. As a Vice-President and Senior Actuary
of MLIC, I have reviewed the Policy form and I am familiar with the Registration
Statement and Exhibits thereto. In my opinion:
(1) The illustrations of death benefits, cash values, cash surrender
values and, where applicable, accumulated premiums for the Policy on
pages 16 to 20 and on pages 29 to 42 of the prospectus included in the
Registration Statement ("Prospectus"), based on the assumptions stated
in the illustrations, are consistent with the provisions of the
Policies. The rate structure of the Policies has not been designed so
as to make the relationship between premiums and benefits, as shown in
the illustrations on pages 16 to 20 and on pages 29 to 42, appear to be
correspondingly more favorable to a prospective purchaser of the Policy
for males ages 25 or 40, than to prospective purchasers of Policies for
a male at other ages or for a female.
(2) The illustrations of the amount of the death benefit under each of the
death benefit options on pages 11 and 12, based on the assumptions
stated in the illustrations, are consistent with the provisions of the
Policies.
(3) The illustrations of the amount of surrender charge which would be taken
upon the surrender of a particular policy in various Policy years on
page 28, based on the assumptions stated in the illustration, are
consistent with the provisions of the Policies.
<PAGE>
(4) The charge for federal taxes that is imposed under the Policies is
reasonable in relation to MLIC's increased tax burden under Section 848
of the Internal Revenue Code of 1986, resulting from MLIC's receipt of
premiums under such Policies. The cost to MLIC of capital used to
satisfy its increased tax burden under Section 848 is, in essence,
MLIC's targeted after-tax rate of return. The targeted after-tax rate
of return is reasonable and the factors taken into account by MLIC in
determining such targeted after-tax rate of return are appropriate
factors to consider.
I hereby consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to my name under the heading "Experts" in the
Prospectus.
Very truly yours,
/s/ Anthony E. Amodeo
---------------------
Anthony E. Amodeo
Vice-President and
Senior Actuary
<PAGE>
EXHIBIT 10
Statement of Metropolitan Life
Insurance Company Pursuant to
Rule 27d-2 Under the Investment
Company Act of 1940
The undersigned hereby states that on a monthly basis throughout its fiscal
year ended December 31, 1995, it has met the requirements of Rule 27d-2(a)(1)
under the Investment Company Act of 1940 in that it had a combined capital paid-
up, gross paid in and contributed surplus and unassigned surplus at least equal
to $1,000,000. Such capitalization was larger than 200 percent of the amount of
the total refund obligation of Metropolitan Life Insurance Company pursuant to
Sections 27(d) and 27(f) under the Investment Company Act of 1940 less any
liability reserve established by Metropolitan Life Insurance Company to meet
such obligations.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Myron O. Schlanger
----------------------------------
Myron O. Schlanger
Vice-President
April 26, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
METROPOLITAIN LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> GROWTH DIVISION
<NUMBER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 96789176
<INVESTMENTS-AT-VALUE> 112977954
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 112977954
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 537332
<TOTAL-LIABILITIES> 537332
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 10255119
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 353853
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 16188778
<NET-ASSETS> 112440622
<DIVIDEND-INCOME> 5497071
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 802240
<NET-INVESTMENT-INCOME> 4694831
<REALIZED-GAINS-CURRENT> 293233
<APPREC-INCREASE-CURRENT> 19543807
<NET-CHANGE-FROM-OPS> 24531871
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 44557032
<ACCUMULATED-NII-PRIOR> 5560288
<ACCUMULATED-GAINS-PRIOR> 60620
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 802240
<AVERAGE-NET-ASSETS> 90597958
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METROPOLITAN
LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> INCOME DIVISION
<NUMBER> 2
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 22143191
<INVESTMENTS-AT-VALUE> 22416853
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22416853
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 105382
<TOTAL-LIABILITIES> 105382
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2942576
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5381
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 274662
<NET-ASSETS> 22311471
<DIVIDEND-INCOME> 1312997
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 165666
<NET-INVESTMENT-INCOME> 1147331
<REALIZED-GAINS-CURRENT> (8290)
<APPREC-INCREASE-CURRENT> 1977261
<NET-CHANGE-FROM-OPS> 3116302
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 7107536
<ACCUMULATED-NII-PRIOR> 1795245
<ACCUMULATED-GAINS-PRIOR> 13671
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 165666
<AVERAGE-NET-ASSETS> 18838481
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTIANS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METROPOLITAN
LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> MONEY MARKET DIVISION
<NUMBER> 3
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3047618
<INVESTMENTS-AT-VALUE> 2954758
<RECEIVABLES> 20391
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2975149
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 409
<TOTAL-LIABILITIES> 409
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 427323
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (39027)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (92860)
<NET-ASSETS> 2974740
<DIVIDEND-INCOME> 161198
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 32690
<NET-INVESTMENT-INCOME> 128508
<REALIZED-GAINS-CURRENT> 35201
<APPREC-INCREASE-CURRENT> 4641
<NET-CHANGE-FROM-OPS> 168350
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1319943)
<ACCUMULATED-NII-PRIOR> 298815
<ACCUMULATED-GAINS-PRIOR> (74228)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 32690
<AVERAGE-NET-ASSETS> 3575881
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
METROPOLITAIN LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> DIVERSIFIED DIVISION
<NUMBER> 4
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 77330732
<INVESTMENTS-AT-VALUE> 84698553
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 84698553
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 517812
<TOTAL-LIABILITIES> 517812
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 8838565
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 281066
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7367821
<NET-ASSETS> 84180741
<DIVIDEND-INCOME> 5314778
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 619298
<NET-INVESTMENT-INCOME> 4695480
<REALIZED-GAINS-CURRENT> 248523
<APPREC-INCREASE-CURRENT> 10898818
<NET-CHANGE-FROM-OPS> 15842821
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 29099335
<ACCUMULATED-NII-PRIOR> 4143085
<ACCUMULATED-GAINS-PRIOR> 32543
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 619298
<AVERAGE-NET-ASSETS> 69914903
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METROPOLITAN
LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> INTERNATIONAL STOCK DIVISION
<NUMBER> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 17940365
<INVESTMENTS-AT-VALUE> 17390288
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17390288
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 94151
<TOTAL-LIABILITIES> 94151
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 594508
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 111200
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (550077)
<NET-ASSETS> 17296137
<DIVIDEND-INCOME> 152268
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 124852
<NET-INVESTMENT-INCOME> 27416
<REALIZED-GAINS-CURRENT> 28349
<APPREC-INCREASE-CURRENT> 164927
<NET-CHANGE-FROM-OPS> 192343
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 5916379
<ACCUMULATED-NII-PRIOR> 567092
<ACCUMULATED-GAINS-PRIOR> 82851
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 124852
<AVERAGE-NET-ASSETS> 14211638
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFROMATION EXTRACTED FROM METROPOLITAN
LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> STOCK INDEX DIVISION
<NUMBER> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 11289160
<INVESTMENTS-AT-VALUE> 13456861
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 13456861
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 31091
<TOTAL-LIABILITIES> 31091
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 391042
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 43746
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2167701
<NET-ASSETS> 13425770
<DIVIDEND-INCOME> 290369
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 76564
<NET-INVESTMENT-INCOME> 213805
<REALIZED-GAINS-CURRENT> 29512
<APPREC-INCREASE-CURRENT> 2271366
<NET-CHANGE-FROM-OPS> 2514683
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8578929
<ACCUMULATED-NII-PRIOR> 177237
<ACCUMULATED-GAINS-PRIOR> 14234
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 76564
<AVERAGE-NET-ASSETS> 8863279
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.9
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM METROPOLITAN
LIFE SEPARATE ACCOUNT UL AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<SERIES>
<NAME> AGGRESSIVE GROWTH DIVISION
<NUMBER> 7
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 50602535
<INVESTMENTS-AT-VALUE> 54619026
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 54619026
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</TABLE>
