<PAGE> 1
- --------------------------------------------------------------------------------
MONY Custom Equity Master
- --------------------------------------------------------------------------------
Prospectus Portfolio
- --------------------------------------------------------------------------------
Variable Universal Life Insurance Policy
Issued by
MONY Life Insurance Company
<TABLE>
<S> <C>
MONY Series Fund, Inc. Fidelity Variable Insurance Products Fund
Enterprise Accumulation Trust Fidelity Variable Insurance Products Fund II
Dreyfus Stock Index Fund Fidelity Variable Insurance Products Fund III
The Dreyfus Socially Responsible Janus Aspen Series
Growth Fund, Inc.
</TABLE>
March 7, 2000
- --------------------------------------------------------------------------------
<PAGE> 2
PROSPECTUS
Dated March 7, 2000
Variable Universal Life Insurance Policy
MONY Life Insurance Company (the "Company") issues a variable universal life
insurance policy described in this Prospectus. Among the policy's many terms
are:
Allocation of Premiums and Cash Values:
- - You can tell us what to do with your premium payments. You can also tell us
what to do with the cash values your policy may create for you resulting from
those premium payments.
- You can tell us to place them into a separate account. That separate
account is called MONY Variable Account L.
- If you do, you can also tell us to place your premium payments and
cash values into any 20 of the 25 different subaccounts. Each of these
subaccounts seeks to achieve a different investment objective. If you
tell us to place your premium payments and cash values into one or
more subaccounts of the separate account, you bear the risk that the
investment objectives will not be met. That risk includes your not
earning any money on your premium payments and cash values and also
that your premium payments and cash values may lose some or all of
their value.
- You can also tell us to place some or all of your premium payments and
cash values into our account. Our account is called the Guaranteed
Interest Account. If you do, we will guarantee that those premium
payments and cash values will not lose any value. We also guarantee that
we will pay not less than 4.5% interest annually. We may pay more than
4.5% if we choose. Premium payments and cash values you place into the
Guaranteed Interest Account become part of our assets.
Death Benefit:
- - We will pay a death benefit if you die before you reach age 100 while the
policy is in effect. That death benefit will never be less than amount
specified in the policy. It may be greater than the amount specified if the
policy's cash values increase.
Living Benefits:
- - You may ask for some or all of the policy's cash value at any time. If you do,
we may deduct a surrender charge. You may borrow up to 90% of the policy's
cash value from us at any time. You will have to pay interest to us on the
amount borrowed.
Charges and Fees:
- - The policy allows us to deduct certain charges from the cash value. These
charges are detailed in the policy and in this prospectus.
THESE ARE ONLY SOME OF THE TERMS OF THE POLICY.
PLEASE READ THE PROSPECTUS CAREFULLY FOR MORE COMPLETE DETAILS OF THE POLICY.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense. This prospectus comes with prospectuses for the MONY Series
Fund, Inc. and Enterprise Accumulation Trust, Fidelity Variable Insurance
Products Fund, Fidelity Variable Insurance Products Fund II, Fidelity Variable
Insurance Products Fund III, Dreyfus Stock Index Fund, The Dreyfus Socially
Responsible Growth Fund, Inc. and Janus Aspen Series. You should read these
prospectuses carefully and keep them for future reference.
MONY Variable Account L
MONY Life Insurance Company
1740 Broadway, New York, New York 10019
1-800-487-6669
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[THIS PAGE INTENTIONALLY LEFT BLANK]
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Summary of the Policy....................................... 1
Important Policy Terms.................................... 1
Purpose of the Policy..................................... 1
Policy Premium Payments and Values........................ 1
Charges and Deductions.................................... 2
The Death Benefit......................................... 8
Premium Features.......................................... 9
MONY Variable Account L................................... 9
Allocation Options........................................ 9
Transfer of Fund Value.................................... 9
Policy Loans.............................................. 9
Full Surrender............................................ 10
Partial Surrender......................................... 10
Right to Return Policy Period............................. 10
Grace Period and Lapse.................................... 10
Tax Treatment of Increases in Fund Value.................. 10
Tax Treatment of Death Benefit............................ 11
Riders.................................................... 11
Contacting the Company.................................... 11
Understanding the Policy.................................. 12
Detailed Information About the Company and MONY Variable
Account L................................................. 13
MONY Life Insurance Company............................... 13
Year 2000 Issue........................................... 13
MONY Variable Account L................................... 14
The Funds................................................... 19
MONY Series Fund, Inc. ................................... 19
Enterprise Accumulation Trust............................. 20
Dreyfus Stock Index Fund.................................. 22
The Dreyfus Socially Responsible Growth Fund, Inc. ....... 22
Fidelity Variable Insurance Products Fund................. 23
Fidelity Variable Insurance Products Fund II.............. 23
Fidelity Variable Insurance Products Fund III............. 23
Janus Aspen Series........................................ 24
Purchase of Portfolio Shares by MONY Variable Account L... 25
Detailed Information About the Policy....................... 26
Application for a Policy.................................. 26
Right to Examine a Policy -- Right to Return Policy
Period................................................. 27
Premiums.................................................. 28
Allocation of Net Premiums................................ 29
Death Benefits under the Policy........................... 30
Changes in Specified Amount............................... 32
Other Optional Insurance Benefits......................... 33
Benefits at Maturity...................................... 34
Policy Values............................................. 34
Determination of Fund Value............................... 35
Calculating Unit Values for Each Subaccount............... 36
Determining Fund Value.................................... 37
Transfer of Fund Value.................................... 37
Right to Exchange Policy.................................. 38
</TABLE>
i
<PAGE> 5
<TABLE>
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PAGE
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<S> <C>
Option to Obtain Paid-Up Insurance.......................... 38
Policy Loans.............................................. 38
Full Surrender............................................ 40
Partial Surrender......................................... 40
Grace Period and Lapse.................................... 41
Charges and Deductions...................................... 43
Deductions from Premiums.................................. 43
Daily Deduction from MONY Variable Account L.............. 44
Guarantee of Certain Charges.............................. 47
Other Information........................................... 47
Federal Income Tax Considerations......................... 47
Charge for Company Income Taxes........................... 51
Voting of Fund Shares..................................... 51
Disregard of Voting Instructions.......................... 52
Report to Policy Owners................................... 52
Substitution of Investments and Right to Change
Operations............................................. 53
Changes to Comply with Law................................ 53
Performance Information..................................... 53
The Guaranteed Interest Account............................. 54
General Description....................................... 54
Death Benefit............................................. 55
Policy Changes............................................ 55
Transfers................................................. 55
Surrenders and Policy Loans............................... 56
More About the Policy....................................... 56
Ownership................................................. 56
Beneficiary............................................... 56
Notification and Claims Procedures........................ 57
Payments.................................................. 57
Payment Plan/Settlement Provisions........................ 57
Payment in Case of Suicide................................ 57
Assignment................................................ 58
Errors on Application..................................... 58
Incontestability.......................................... 58
Policy Illustrations...................................... 58
Distribution of the Policy................................ 58
More About the Company...................................... 59
Management................................................ 59
State Regulation.......................................... 60
Telephone Transfer Privileges............................. 60
Legal Proceedings......................................... 61
Legal Matters............................................. 61
Registration Statement.................................... 61
Independent Accountants................................... 61
Financial Statements...................................... 61
Index to Financial Statements............................... F-1
Appendix A.................................................. A-1
Appendix B.................................................. B-1
Appendix C.................................................. C-1
</TABLE>
ii
<PAGE> 6
SUMMARY OF THE POLICY
This summary provides you with a brief overview of the more important
aspects of your policy. It is not intended to be complete. More detailed
information is contained in this prospectus on the pages following this Summary
and in your policy. This summary and the entire prospectus will describe the
part of the policy involving MONY Variable Account L. The prospectus also
briefly will describe the Guaranteed Interest Account on page 54. The Guaranteed
Interest Account is also described in your policy. BEFORE PURCHASING A POLICY,
WE URGE YOU TO READ THE ENTIRE PROSPECTUS CAREFULLY.
IMPORTANT POLICY TERMS
We are providing you with definitions for the following terms to make the
description of the policy provisions easier for you to understand.
Outstanding Debt -- The unpaid balance of any loan which you request on the
policy. The unpaid balance includes accrued loan interest which is due and has
not been paid by you.
Loan Account -- An account to which amounts are transferred from the
subaccounts of MONY Variable Account L and the Guaranteed Interest Account as
collateral for any loan you request. We will credit interest to the Loan Account
at a rate not less than 4.5%. The Loan Account is part of the Company's General
Account.
Fund Value -- The sum of the amounts under the policy held in each
subaccount of MONY Variable Account L the Guaranteed Interest Account, and the
Loan Account.
Cash Value -- The Fund Value of the policy less any surrender charge and
any Outstanding Debt.
Minimum Monthly Premium -- The amount the Company determines is necessary
to keep the policy in effect for the first three policy years. In certain cases,
this also applies to the first three policy years following an increase in the
Specified Amount.
Guaranteed Interest Account -- This account is part of the general account
of MONY Life Insurance Company (the "Company"). You may allocate all or a part
of your net premium payments to this account. This account will credit you with
a fixed interest rate (which will not be less than 4.5%) declared by the
Company. (For more detailed information, see "The Guaranteed Interest Account,"
page 54.)
Specified Amount -- The minimum death benefit for as long as the policy
remains in effect.
Business Day -- Each day that the New York Stock Exchange is open for
trading.
PURPOSE OF THE POLICY
The policy offers insurance protection on the life of the insured. If the
insured is alive on the anniversary of the policy date when the insured is age
100, a maturity benefit will be paid instead of a death benefit. The policy
provides a death benefit equal to (a) its Specified Amount, or (b) its Specified
Amount plus accumulated Fund Value. The policy also provides surrender and loan
privileges. The policy offers a choice of investment alternatives and an
opportunity for the policy's Fund Value and its death benefit, to grow based on
investment results. In addition, you, as owner of the policy, choose the amount
and frequency of premium payments, within certain limits.
POLICY PREMIUM PAYMENTS AND VALUES
The premium payments you make for the policy are received by the Company.
From those premium payments, the Company makes deductions to pay premium and
other taxes imposed by state and local governments. The Company makes deductions
to cover the cost to the Company of a deferred acquisition tax imposed by the
United States government. The Company will also deduct a Sales Charge to cover
the costs of making the policies available to the public. After deduction of
these charges, the amount remaining is called the net premium payment.
1
<PAGE> 7
You may allocate net premium payments among the various subaccounts of MONY
Variable Account L and/or the Guaranteed Interest Account. As owner of the
policy, you may give the right to allocate net premium payments to someone else.
The net premium payments you allocate among the various subaccounts of MONY
Variable Account L may increase or decrease in value on any day depending on the
investment experience of the subaccounts you select. Your death benefit may or
may not increase or decrease depending on several factors including the death
benefit option you choose. The death benefit will never decrease below the
Specified Amount of your policy.
Net premium payments you allocate to the Guaranteed Interest Account will
be credited with interest at a rate determined by the Company. That rate will
not be less than 4.5%.
The value of the net premium payments you allocate to MONY Variable Account
L and to the Guaranteed Interest Account are called the Fund Value. There is no
guarantee that the policy's Fund Value and death benefit will increase. You bear
the risk that the net premiums and Fund Value allocated to MONY Variable Account
L may be worth more or less while the policy remains in effect.
If you cancel the policy and return it to the Company during the Right to
Return Period, your premium payments will be returned by the Company. After the
Right to Return Period, you may cancel your policy by surrendering it to the
Company. The Company will pay you the Fund Value minus a charge if you cancel
your policy during the first fifteen years since the policy was issued or the
Specified Amount increased. The Company will also deduct any amount you have
borrowed from it from the amount it will pay you. The Fund Value minus Surrender
Charges and minus the amount of debt outstanding from loans you have received is
called the Cash Value of the policy.
Charges and fees such as the cost of insurance, administrative charges, and
mortality and expense risk charges are imposed by the policy. These charges and
fees are deducted by the Company from the policy's Cash Value and are described
in further detail below.
The policy remains in effect until the earliest of:
- A grace period expires without the payment of sufficient additional
premium to cover policy charges or repayment of the Outstanding Debt.
- Age 100.
- Death of the insured.
- Full surrender of the policy.
Generally, the policy remains in effect only as long as the Cash Value is
sufficient to pay all monthly deductions. However, during the first three years
the policy is in effect, the Company will determine an amount which if paid
during those first three policy years will keep the policy and all rider
coverages in effect for the first three policy years even if the Cash Value of
the policy is zero. This amount is called the Minimum Monthly Premium. If you
increase the Specified Amount during the first three policy years, you must pay
the Minimum Monthly Premium for three more years after the increase.
CHARGES AND DEDUCTIONS
The policy provides for the deduction of the various charges, costs, and
expenses from the Fund Value of the policy. These deductions are summarized in
the table below. Additional details can be found on pages 43-47.
2
<PAGE> 8
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DEDUCTIONS FROM PREMIUMS
<TABLE>
<CAPTION>
<S> <C> <C>
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Sales Charge -- Varies based on Specified Specified Amounts less than $500,000 -- 4%
Amount plus Term Life Term Specified Amounts of $500,000 or more -- 3%
Rider amount in effect. It
is a % of Premium paid.
- -----------------------------------------------------------------------------------------------
Tax Charge State and local -- 0.8%
Federal -- 1.5%
</TABLE>
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DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Mortality & Expense Risk Charge -- Maximum 0.65% of subaccount value (0.001781% daily)
Annual Rate
</TABLE>
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DEDUCTIONS FROM FUND VALUE
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
Cost of Insurance Charge Current cost of insurance rate x net amount
at risk at the beginning of the policy
month
- ----------------------------------------------------------------------------------------------
Administrative Charge -- monthly $5.00
- ----------------------------------------------------------------------------------------------
Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the
Based on issue age, gender and smoking first 15 policy years (or for 15 years from
Status. the date of any increase in Specified
Amount)
- ----------------------------------------------------------------------------------------------
Optional Insurance Benefits Charge As applicable.
Monthly Deduction for any other Optional
Insurance Benefits added by rider.
- ----------------------------------------------------------------------------------------------
Transaction and Other Charges
- Partial Surrender Fee $10
- Transfer of Fund Value $25 maximum per transfer over 12, currently
(at Company's Option) $0
- ----------------------------------------------------------------------------------------------
Surrender Charge See discussion of Surrender Charge for
Grades from 80% to 0 over 15 years based on grading schedule.
a schedule. Factors per $1,000 of Specified
Amount vary based on issue age, gender, and
underwriting class.
- ----------------------------------------------------------------------------------------------
</TABLE>
MONY Variable Account L is divided into subdivisions called subaccounts.
Each subaccount invests exclusively in shares of a designated portfolio. Each
portfolio pays a fee to its investment adviser to manage the portfolio. Each
portfolio also incurs expenses in its operation. These fees and expenses are
also shown in the table below.
FEES AND EXPENSES OF THE FUNDS
The Funds and each of their portfolios incur certain charges including the
investment advisory fee and certain operating expenses. These fees and expenses
vary by portfolio and are set forth below. Their Boards govern the Funds. The
advisory fees are summarized at pages 5-8. Fees and expenses of the Funds are
described in more detail in the Funds' prospectuses.
3
<PAGE> 9
Information contained in the following table was provided by the respective
Funds and has not been independently verified by us.
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<TABLE>
<CAPTION>
PRO FORMA ANNUAL EXPENSES FOR THE YEAR ENDED DECEMBER 31, 1999
- -----------------------------------------------------------------------------------------------------
DISTRIBUTION
AND SERVICE
FUND/PORTFOLIO MANAGEMENT FEES OTHER EXPENSES (12b-1) FEE TOTAL EXPENSES
- -----------------------------------------------------------------------------------------------------
MONY SERIES FUND, INC.
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Intermediate Term Bond
Portfolio 0.50% 0.07% N/A 0.57%
- -----------------------------------------------------------------------------------------------------
Long Term Bond Portfolio 0.50% 0.05% N/A 0.55%
- -----------------------------------------------------------------------------------------------------
Government Securities Portfolio 0.50% 0.08%(1) N/A 0.58%
- -----------------------------------------------------------------------------------------------------
Money Market Portfolio 0.40% 0.04% N/A 0.44%
- -----------------------------------------------------------------------------------------------------
ENTERPRISE ACCUMULATION TRUST
- -----------------------------------------------------------------------------------------------------
Equity Portfolio 0.75% 0.07% N/A 0.82%
- -----------------------------------------------------------------------------------------------------
Small Company Value Portfolio 0.80% 0.04% N/A 0.84%
- -----------------------------------------------------------------------------------------------------
Managed Portfolio 0.72% 0.04% N/A 0.76%
- -----------------------------------------------------------------------------------------------------
International Growth Portfolio 0.85% 0.16% N/A 1.01%
- -----------------------------------------------------------------------------------------------------
High Yield Bond Portfolio 0.60% 0.09% N/A 0.69%
- -----------------------------------------------------------------------------------------------------
Small Company Growth Portfolio 1.00% 0.40%(2) N/A 1.40%
- -----------------------------------------------------------------------------------------------------
Equity Income Portfolio 0.75% 0.30%(2) N/A 1.05%
- -----------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 0.75% 0.41% N/A 1.16%
- -----------------------------------------------------------------------------------------------------
Growth and Income Portfolio 0.75% 0.19% N/A 0.94%
- -----------------------------------------------------------------------------------------------------
Growth Portfolio 0.75% 0.09% N/A 0.84%
- -----------------------------------------------------------------------------------------------------
Balanced Portfolio 0.75% 0.20%(2) N/A 0.95%(3)
- -----------------------------------------------------------------------------------------------------
Multi-Cap Growth Portfolio 1.00% 0.40%(2) N/A 1.40%(3)
- -----------------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX FUND 0.245% 0.015% N/A 0.26%(3)
- -----------------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY
RESPONSIBLE GROWTH FUND, INC. 0.75% 0.04% N/A 0.79%(3)
- -----------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND
- -----------------------------------------------------------------------------------------------------
Growth Portfolio 0.58% 0.09% 0.10% 0.77%(3,4)
- -----------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND II
- -----------------------------------------------------------------------------------------------------
Contrafund(R) Portfolio 0.58% 0.10% 0.10% 0.78%(3,4)
- -----------------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND III
- -----------------------------------------------------------------------------------------------------
Growth Opportunities Portfolio 0.58% 0.11% 0.10% 0.79%(3,4)
- -----------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 10
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
DISTRIBUTION
AND SERVICE
FUND/PORTFOLIO MANAGEMENT FEES OTHER EXPENSES (12b-1) FEE TOTAL EXPENSES
- -----------------------------------------------------------------------------------------------------
JANUS ASPEN SERIES
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Aggressive Growth Portfolio 0.65% 0.02% N/A 0.67%(3,5)
- -----------------------------------------------------------------------------------------------------
Balanced Portfolio 0.65% 0.02% N/A 0.67%(3,5)
- -----------------------------------------------------------------------------------------------------
Capital Appreciation Portfolio 0.65% 0.04% N/A 0.69%(3,5)
- -----------------------------------------------------------------------------------------------------
Worldwide Growth Portfolio 0.65% 0.05% N/A 0.70%(3,5)
- -----------------------------------------------------------------------------------------------------
</TABLE>
1. Expenses do not include custodial credits. With custodial credits expenses
would have been 0.57%.
2. Enterprise Capital Management, Inc. has contractually agreed to limit
expenses on these Portfolios to the amount shown. Without the contractual
limitation, the total expenses would have been as follows: Small Company
Growth -- 1.55%; Equity Income -- 1.20%; Balanced -- 1.89%; and Multi-Cap
Growth -- 1.52%.
3. The sub-account corresponding to this Fund/Portfolio first became available
for allocation in November, 1999.
4. Expenses do not include reimbursements. With reimbursements, expenses would
have been Growth -- 0.75%; Contrafund(R) -- 0.75%; and Growth Opportunities
-- 0.78%.
5. Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in management fee.
Information contained in the following table was provided by the respective
Funds and has not been independently verified by us.
- --------------------------------------------------------------------------------
FUND INVESTMENT ADVISOR FEES
- --------------------------------------------------------------------------------
MONY SERIES FUND, INC.
<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
GOVERNMENT SECURITIES PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 11
<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
LONG TERM BOND PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
INTERMEDIATE TERM BOND PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO Annual rate of 0.40% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
----------------------------------------------------------------------------------------
</TABLE>
ENTERPRISE ACCUMULATION TRUST
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
EQUITY PORTFOLIO Annual rate of 0.80% of the first $400
million, 0.75% of the next $400 million,
and 0.70% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
MANAGED PORTFOLIO Annual rate of 0.80% of the first $400
million, 0.75% of the next $400 million,
and 0.70% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
GROWTH PORTFOLIO Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO Annual rate of 1.00% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO Annual rate of 0.80% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO Annual rate of 0.85% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
HIGH YIELD BOND PORTFOLIO Annual rate of 0.60% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 12
<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
BALANCED PORTFOLIO Annual rate of 1.00% of the aggregate
average daily net assets.
--------------------------------------------------------------------------------------------
MULTI-CAP PORTFOLIO Annual rate of 0.75% of the aggregate
average daily net assets.
--------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
DREYFUS STOCK INDEX FUND Annual rate of 0.25% of the fund's average
daily net assets.
--------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH Annual rate of 0.75% of the fund's average
FUND, INC. daily net assets.
----------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS The fee is calculated by adding a group
FUND -- GROWTH PORTFOLIO fee rate to an individual fee rate,
dividing by twelve, and multiplying the
result by the fund's average net assets
throughout the month. The group fee rate
is based on the average net assets of all
the mutual funds advised by FMR. This
group rate cannot rise above 0.52% for
this fund, and it drops as total assets
under management increase. The individual
fee rate for this fund is 0.30% of the
fund's average net assets.
----------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS The fee is calculated by adding a group
FUND II -- CONTRAFUND PORTFOLIO fee rate to an individual fee rate,
dividing by twelve, and multiplying the
result by the fund's average net assets
throughout the month. The group fee rate
is based on the average net assets of all
the mutual funds advised by FMR. This
group rate cannot rise above 0.52% for
this fund, and it drops as total assets
under management increase. The individual
fee rate for this fund is 0.30% of the
fund's average net assets.
----------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS The fee is calculated by adding a group
FUND III -- GROWTH OPPORTUNITIES fee rate to an individual fee rate,
PORTFOLIO dividing by twelve, and multiplying the
result by the fund's average net assets
throughout the month. The group fee rate
is based on the average net assets of all
the mutual funds advised by FMR. This
group rate cannot rise above 0.52% for
this fund, and it drops as total assets
under management increase. The individual
fee rate for this fund is 0.30% of the
fund's average net assets.
----------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 13
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C>
JANUS ASPEN SERIES AGGRESSIVE GROWTH Annual rate of 0.65% of the portfolio's
PORTFOLIO average daily net assets.
----------------------------------------------------------------------------------------
JANUS ASPEN SERIES BALANCED PORTFOLIO Annual rate of 0.65% of the portfolio's
average daily net assets.
----------------------------------------------------------------------------------------
JANUS ASPEN SERIES CAPITAL APPRECIATION Annual rate of 0.65% of the portfolio's
PORTFOLIO average daily net assets.
----------------------------------------------------------------------------------------
JANUS ASPEN SERIES WORLDWIDE GROWTH Annual rate of 0.65% of the portfolio's
PORTFOLIO average daily net assets.
--------------------------------------------------------------------------------------------
</TABLE>
THE DEATH BENEFIT
The minimum initial Specified Amount is $50,000. You may elect one of two
options to compute the amount of death benefit payable under the policy. Your
selection may increase the death benefit.
Option 1 -- The death benefit equals the greater of:
(a) The Specified Amount, or
(b) Fund Value multiplied by a death benefit percentage required by
the federal tax law definition of life insurance.
If you choose Option 1, favorable investment performance will reduce
the cost you pay for the death benefit. This reduction will decrease the
deduction from Fund Value and
Option 2 -- The death benefit equals the greater of:
(a) The Specified Amount of the policy, plus the Fund Value, or
(b) The Fund Value multiplied by a death benefit percentage required
by the federal tax law definition of life insurance.
If you choose Option 2, favorable investment performance will increase
the Fund Value of the Policy which in turn increases insurance coverage.
The Fund Value used in these calculations is the Fund Value as of the date of
the insured's death.
You may change the death benefit option and increase or decrease the
Specified Amount, subject to certain conditions. See "Death Benefits Under the
Policy," page 30.
8
<PAGE> 14
PREMIUM FEATURES
You must pay premiums equal to at least the amount necessary to keep the
policy in effect for the first three policy years. After that, subject to
certain limitations, you may choose the amount and frequency of premium payments
as your financial situation and needs change.
When you apply for a policy, you determine the level amount you intend to
pay at fixed intervals over a specified period of time. You elect to receive a
premium notice on an annual, semiannual, or quarterly basis. However, you may
choose to skip or stop making premium payments and your policy will continue in
effect until the Cash Value can no longer cover (1) the monthly deductions from
the Fund Value for your policy, and (2) any optional insurance benefits added by
rider. You may pay premiums under the electronic funds transfer program. Under
this program, you authorize the Company to withdraw the amount you determine
from your checking account each month.
The amount, frequency and period of time over which you pay premiums may
affect whether or not the policy will be classified as a modified endowment
contract. You will find more information on the tax treatment of life insurance
contracts, including modified endowment contracts under "Federal Income Tax
Considerations," page 47.
The payment of premiums you specified on the application will not guarantee
that your policy will remain in effect. See "Grace Period and Lapse," page 41.
If any premium payment would result in an immediate increase in the net amount
at risk, the Company may, (1) reject a part of the premium payment, or (2) limit
the premium payment, unless you provide satisfactory evidence of insurability.
MONY VARIABLE ACCOUNT L
MONY Variable Account L is a separate investment account whose assets are
owned by the Company. See "MONY Variable Account L" on page 14.
ALLOCATION OPTIONS
You may allocate premium payments and Fund Values among the various
subaccounts of MONY Variable Account L. Each of the subaccounts uses premium
payments and Fund Values to purchase shares of a designated portfolio of the
MONY Series Fund, Enterprise Accumulation Trust, Dreyfus Stock Index Fund, The
Dreyfus Socially Responsible Growth Fund, Inc., Fidelity Variable Insurance
Products Fund, Fidelity Variable Insurance Products Fund II, Fidelity Variable
Insurance Products Fund III, or Janus Aspen Series (the "Funds"). The
subaccounts available to you and the investment objectives of each available
subaccount are described in detail beginning on page 15.
TRANSFER OF FUND VALUE
You may transfer Fund Value among the subaccounts. Subject to certain
limitations, you may also transfer between the subaccounts and the Guaranteed
Interest Account. Transfers may be made by telephone if the proper form has been
completed, signed and filed at the Company's Syracuse Operations Center. See
Transfer of Fund Value," page 37.
POLICY LOANS
You may borrow up to 90% of your policy's Cash Value from the Company. Your
policy will be the only security required for a loan. See "Policy Loans," page
38.
The amount of Outstanding Debt is subtracted from your death benefit. Your
Outstanding Debt is repaid from the proceeds of a full surrender. See "Full
Surrender," page 40. Outstanding Debt may also affect the continuation of the
policy. See "Grace Period and Lapse," page 40. The Company charges
9
<PAGE> 15
interest on policy loans. If you do not pay the interest when due, the amount
due will be borrowed from the policy's Cash Value and will become part of the
Outstanding Debt.
FULL SURRENDER
You can surrender the policy during the insured's lifetime and receive its
Cash Value, which equals (a) Fund Value, minus (b) any surrender charge, and
minus (c) any Outstanding Debt. See "Full Surrender," page 40.
PARTIAL SURRENDER
You may request a partial surrender if your Cash Value after the deduction
of the requested surrender amount and any fees is greater than $500. If the
requested amount exceeds the amount available, we will reject your request and
return it to you. A partial surrender may decrease the Specified Amount or will
decrease the death benefit. See "Partial Surrender," at page 40.
Partial surrenders must be for at least $500. A partial surrender fee of
$10 will be assessed against the remaining Fund Value. There is no surrender
charge assessed on a partial surrender.
RIGHT TO RETURN POLICY PERIOD
You have the right to examine the policy when you receive it. You may
return the policy for any reason and obtain a full refund of the premium you
paid if you return your policy within 10 days (or longer in some states) after
you receive it. You may also return the policy within 45 days after the date you
sign the application for the policy. During the Right to Return Policy Period,
net premiums will be kept in the general account of the Company and will earn
interest at an annual rate of 4.5%. See "Right to Examine a Policy -- Right to
Return Policy Period," page 27.
GRACE PERIOD AND LAPSE
Your policy will remain in effect as long as:
(1) it has a Cash Value greater than zero; or
(2) during the first three policy years if on each monthly anniversary
the sum of the premiums paid minus the sum of partial surrenders (excluding
related fees) and any Outstanding Debt, is greater than or equal to the
Minimum Monthly Premium times the number of months your policy has been in
effect.
If you increase the Specified Amount during the first three policy years,
you must continue paying the Minimum Monthly Premium for an additional three
policy years from the date of the increase.
If the policy is about to terminate (or Lapse), we will give you notice
that you must pay additional premiums. That notice will tell you what the
minimum amount you must pay is if the policy is to remain in effect and the date
by which we must receive that amount (this period is called the "grace period").
You must understand that after the first three policy years, the policy can
lapse even if the scheduled premium payments are made.
TAX TREATMENT OF INCREASES IN FUND VALUE
The federal income tax laws generally tie the taxation of Fund Values to
your receipt of those Fund Values. This policy is currently subject to the same
federal income tax treatment as fixed life insurance. Certain policy loans may
be taxable. You can find information on the tax treatment of the policy under
"Federal Income Tax Consideration," on page 47.
10
<PAGE> 16
TAX TREATMENT OF DEATH BENEFIT
Generally, the death benefit will be fully excludable from the gross income
of the beneficiary under the Internal Revenue Code. Thus the death benefit
received by the beneficiary at the death of the insured will not be subject to
federal income taxes when received by the beneficiary. Also a death benefit paid
by this policy is currently subject to federal income tax treatment as a death
benefit paid by a fixed life insurance policy. See "Federal Income Tax
Considerations," page 47.
RIDERS
Additional optional insurance benefits may be added to the policy by an
addendum called a rider. There are six riders available with this policy:
- Spouse's Term Rider
- Children's Term Insurance Rider
- Accidental Death and Dismemberment Rider
- Purchase Option Rider
- Term Life Term Insurance Rider
- Waiver of Monthly Deductions
CONTACTING THE COMPANY
All written requests, notices, and forms required by the policies, and any
questions or inquiries should be directed to the Company's Operations Center at
1 MONY Plaza, Syracuse, New York 13202.
11
<PAGE> 17
UNDERSTANDING THE POLICY
The following chart may help you to understand how the policy works.
---------------------------
MONY Life Insurance Company
---------------------------
Issues the
Policy
-------------------
Policy
-------------------
Policy owner
allocates premium to
subaccounts
and/or to Guaranteed
Interest Account.
- ---------------------- -----------------------------
Guaranteed Interest MONY Variable Account L
Account -----------------------------
- ---------------------- Variable Account L
Subdivided into
Subaccounts
-----------------------------
Subaccounts purchase
shares of
corresponding
portfolios.
------------------------------
Portfolios
------------------------------
12
<PAGE> 18
DETAILED INFORMATION ABOUT THE COMPANY
AND MONY VARIABLE ACCOUNT L
MONY LIFE INSURANCE COMPANY
MONY Life Insurance Company issues the policy. In this prospectus MONY Life
Insurance Company is called the "Company." The Company is a stock life insurance
company organized in the State of New York. The Company is currently licensed to
sell life insurance and annuities in all 50 states of the United States, the
District of Columbia, the U.S. Virgin Islands, and Puerto Rico.
The principal office of the Company is located at 1740 Broadway, New York,
New York 10019. The Company was founded in 1842 as The Mutual Life Insurance
Company of New York. In 1998, The Mutual Life Insurance Company of New York
converted to a stock company through demutualization and was renamed MONY Life
Insurance Company. The demutualization does not have any material effect on the
obligations of the Company under the policies or on MONY Variable Account L or
the policies.
At August 16, 1999, the rating assigned to the Company by A.M. Best
Company, Inc., an independent insurance company rating organization, was
upgraded to A (Excellent). This rating is based upon an analysis of financial
condition and operating performance. The A.M. Best rating of the Company should
be considered only as bearing on the ability of the Company to meet its
obligations under the policies.
The Company intends to administer the policies itself.
MONY Securities Corporation, a wholly owned subsidiary of the Company, is
the principal underwriter for the policies.
YEAR 2000 ISSUE
State of Readiness
In 1996, the Company on behalf of itself and its affiliates (hereafter
collectively referred to as "the Company and its subsidiaries") initiated a
formal Year 2000 Project (the "Project") to resolve the Year 2000 issue. The
scope of the Project was identified, and funding was established.
The scope of the Company's Project includes: ensuring the compliance of all
applications, operating systems and hardware on mainframe, PC and local area
network ("LAN") platforms; ensuring the compliance of voice and data network
software and hardware; addressing issues related to non-IT systems in buildings,
facilities and equipment which may contain date logic in embedded chips; and
addressing the compliance of key vendors and other third parties. Each system is
tested using a standard testing methodology which includes unit testing,
baseline testing, and future date testing. Future date testing includes critical
dates near the end of 1999 and into the year 2000.
At December 31, 1999, all of the Company and its subsidiaries' existing
application systems had been remediated, current date tested and future date
tested. Newly acquired applications and new releases of software packages were
tested in 1999 as implemented.
In late 1998 and early 1999, the Company contracted with a consulting firm
to perform an Independent Validation and Verification ("IV&V") of the Year 2000
remediation of selected critical applications. The results of the IV&V indicated
that the Company's remediation and testing processes were highly effective and
had achieved a high level of compliance.
All of the operating systems, systems software, and hardware for mainframe,
PC and LAN platforms are deemed compliant based on information supplied by
vendors verbally, in writing, or on the vendor's Internet site. Essentially all
critical hardware and software were compliant and tested by December 31, 1998.
The few remaining items were resolved and tested prior to December 31, 1999. We
continue to monitor for Year 2000 compliance in 2000 as applications, systems
software and hardware are upgraded or
13
<PAGE> 19
replaced. All critical non-IT systems had been remediated as of December 31,
1999, and ongoing monitoring for year 2000 compliance will continue in 2000.
As part of the Project, we identified and contacted significant service and
information providers, external vendors, suppliers, and other third parties
(including telecommunication, electrical, security, and HVAC systems) that
believe will be critical to business operations after January 1, 2000.
Procedures have been undertaken to ascertain with reasonable certainty their
current and reasonably anticipated states of Year 2000 readiness through
questionnaires, compliance letters, interviews, on-site visits, and other
available means. We will continue to monitor and evaluate the progress of our
suppliers and customers on this matter in 2000.
Costs
The total cost of the Year 2000 Project was $2.4 million. The total amount
expended on the Project during 1999, 1998, and 1997 were $0.6 million, $1.4
million, and $0.4 million, respectively. These amounts also include costs
associated with the development of contingency plans. The Company does not
expect to incur any future material costs on the Year 2000 Project.
Risks
The Company has not experienced any material (or significant) Year 2000
related problems post-December 31, 1999 with its operations or with any external
parties with which business is conducted. However, there is still the
possibility that future Year 2000 related failures in the Company's systems or
equipment and/or failure of external parties to achieve Year 2000 compliance
could affect the distribution and sale of the life insurance, annuity and
investment products and could have a material adverse effect on the Company's
consolidated financial position and results of its operations.
Contingency Plans
The Company retained outside consultants to assist in the development of
Business Continuity Plans ("BCP"), which include identification of third party
service providers, information systems, equipment, facilities and other items
which are mission-critical to the operation of the business. In conjunction with
this effort, the Company developed a Year 2000 Contingency Plan (the
"Contingency Plan") to address Y2K related failures of third parties, among
other factors that are critical to the ongoing operation of the business. The
Contingency Plan provides alternate means of processing critical work and
services, as well as a methodology for selection and retention of alternate
service providers, vendors, and suppliers, if necessary. Additional maintenance
and refinement of BCP will continue in 2000, as other critical Year 2000 dates
approach (such as February 29, 2000). The Company believes that due to the
pervasive and evolving nature of potential Year 2000 issues, the contingency
planning process is an ongoing one that will require further modifications as
the Company obtains additional information regarding the status of third party
Year 2000 readiness.
MONY VARIABLE ACCOUNT L
MONY Variable Account L is a separate investment account of the Company.
Presently, only premium payments and cash values of flexible premium variable
life insurance policies are permitted to be allocated to MONY Variable Account
L. The assets in MONY Variable Account L are kept separate from the general
account assets and other separate accounts of the Company.
The Company owns the assets in MONY Variable Account L. The Company is
required to keep assets in MONY Variable Account L that equal the total market
value of the policy liabilities funded by MONY Variable Account L. Realized or
unrealized income gains or losses of MONY Variable Account L are credited or
charged against MONY Variable Account L assets without regard to the other
income, gains or losses of the Company. Reserves and other liabilities under the
policies are assets of MONY Variable Account L. MONY Variable Account L assets
are not chargeable with liabilities of the Company's other businesses.
14
<PAGE> 20
Fund Values of the policy during the Right to Return Period and Fund Values
allocated to the Guaranteed Interest Account are held in the Company's general
account. The Company's general account assets are subject to the liabilities
from the businesses the Company conducts. In addition, the Company may transfer
to its general account any assets that exceed anticipated obligations of MONY
Variable Account L. All obligations of the Company under the policy are general
corporate obligations of the Company. The Company may accumulate in MONY
Variable Account L proceeds from various policy charges and investment results
applicable to those assets.
MONY Variable Account L was authorized by the Board of Directors of the
Company and established under New York law on November 28, 1990. MONY Variable
Account L is registered with the SEC as a unit investment trust. The SEC does
not supervise the administration or investment practices or policies of MONY
Variable Account L.
MONY Variable Account L is divided into subdivisions called subaccounts.
Each subaccount invests exclusively in shares of a designated portfolio of MONY
Series Fund, Inc. and Enterprise Accumulation Trust (collectively called the
"Funds"). For example, the Long Term Bond Subaccount invests solely in shares of
the MONY Series Fund, Inc. Long Term Bond Portfolio. These portfolios serve only
as the underlying investment for variable annuity and variable life insurance
contracts issued through separate accounts of the Company or other life
insurance companies. The portfolios may also be available to certain pension
accounts. The portfolios are not available directly to individual investors. In
the future, the Company may establish additional subaccounts within MONY
Variable Account L. Future subaccounts may invest in other portfolios of the
Funds or in other securities. Not all subaccounts are available to you.
The following table lists the subaccounts of MONY Variable Account L that
are available to you, their respective investment objectives, and which Fund
portfolio shares are purchased:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C>
MONY MONEY MARKET SUBACCOUNT Maximum current income consistent with
preservation of capital and maintenance of
This subaccount purchases shares of the liquidity. Attempts to achieve objective
MONY Series Fund, Inc. Money Market by investing in money market instruments.
Portfolio.
--------------------------------------------------------------------------------------------
MONY GOVERNMENT SECURITIES SUBACCOUNT Maximum current income over the
intermediate term consistent with the
This subaccount purchases shares of the preservation of capital. Attempts to
MONY Series Fund, Inc. Government achieve objective through investment in
Securities Portfolio. highly-rated debt securities, U.S.
government obligations, and money market
instruments, with a dollar weighted
average life of up to ten years at the
time of purchase.
--------------------------------------------------------------------------------------------
MONY INTERMEDIATE TERM BOND SUBACCOUNT Maximize income over the intermediate term
consistent with the preservation of
This subaccount purchases shares of the capital. Seeks to achieve objective by
MONY Series Fund, Inc. Intermediate Term investing in highly rated debt securities,
Bond Portfolio. U.S. Government obligations, and money
market instruments, together having a
dollar-weighted average life of between 4
and 8 years.
--------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 21
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C>
MONY LONG TERM BOND SUBACCOUNT Maximize income over the longer term
consistent with preservation of capital.
This subaccount purchases shares of the Seeks to achieve objective by investing in
MONY Series Fund, Inc. Long Term Bond highly-rated debt securities, U.S.
Portfolio. Government obligations, and money market
instruments, together having a
dollar-weighted average life of more than
8 years.
--------------------------------------------------------------------------------------------
ENTERPRISE EQUITY INCOME SUBACCOUNT Invests in a combination of growth and
income. Seeks to achieve an above average
This subaccount purchases shares of the and consistent total return, primarily
Enterprise Accumulation Trust Equity from investments in dividend paying common
Income Portfolio. stocks.
--------------------------------------------------------------------------------------------
ENTERPRISE GROWTH AND INCOME SUBACCOUNT Seeks total return in excess of the total
return of the Lipper Growth and Income
This subaccount purchases shares of the Mutual Funds Average measured over a new
Enterprise Accumulation Trust Growth and period of three to five years, by
Income Portfolio. investing in a broadly diversified group
of large capitalization stocks.
--------------------------------------------------------------------------------------------
ENTERPRISE GROWTH SUBACCOUNT Seeks capital appreciation, primarily from
investments in common stocks.
This subaccount purchases shares of the
Enterprise Accumulation Trust Growth
Portfolio.
--------------------------------------------------------------------------------------------
ENTERPRISE EQUITY SUBACCOUNT Long-term capital appreciation. Seeks to
achieve this objective by investing in a
This subaccount purchases shares of the diversified portfolio of primarily equity
Enterprise Accumulation Trust Equity securities selected on the basis of a
Portfolio. value-oriented approach to investing.
--------------------------------------------------------------------------------------------
ENTERPRISE CAPITAL APPRECIATION SUBACCOUNT Seeks maximum capital appreciation,
primarily through investment in common
This subaccount purchases shares of the stocks of companies that demonstrate
Enterprise Accumulation Trust Capital accelerating earnings momentum and
Appreciation Portfolio. consistently strong financial
characteristics.
--------------------------------------------------------------------------------------------
ENTERPRISE MANAGED SUBACCOUNT Provide growth of capital over time. Seeks
to achieve investment objective by
This subaccount purchases shares of the investing in a portfolio consisting of
Enterprise Accumulation Trust Managed common stocks, bonds and cash equivalents,
Portfolio. the percentage of which vary over time
based on the investment manager assessment
of the relative investment values.
--------------------------------------------------------------------------------------------
ENTERPRISE SMALL COMPANY GROWTH SUBACCOUNT Seeks capital appreciation by investing
primarily in common stocks of small
This subaccount purchases shares of the capitalization companies believed by the
Enterprise Accumulation Trust Small portfolio manager to have an outlook for
Company Growth Portfolio. strong earnings growth and potential for
significant capital appreciation.
--------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 22
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C>
ENTERPRISE SMALL COMPANY VALUE SUBACCOUNT Capital appreciation. Pursues its
investment objective by investing in a
This subaccount purchases shares of the diversified portfolio of primarily equity
Enterprise Accumulation Trust Small securities of companies with market
Company Value Portfolio. capitalization of under $1 billion.
--------------------------------------------------------------------------------------------
ENTERPRISE INTERNATIONAL GROWTH SUBACCOUNT Capital appreciation. Pursues its
investment objective primarily through a
This subaccount purchases shares of the diversified portfolio of non-United States
Enterprise Accumulation Trust equity securities.
International Growth Portfolio.
--------------------------------------------------------------------------------------------
ENTERPRISE HIGH YIELD BOND SUBACCOUNT Maximum current income. Seeks to meet its
investment objective primarily by
This subaccount purchases shares of the investing in debt securities that are
Enterprise Accumulation Trust High Yield rated Ba or lower by Moody's Investors
Bond Portfolio. Service, Inc. or BB or lower by Standard &
Poor's Corporation. These lower rated
bonds are commonly referred to as "Junk
Bonds." Bonds of this type are considered
to be speculative with regard to the
payment of interest and return of
principal. Investment in these types of
securities has special risks and
therefore, may not be suitable for all
investors. Investors should carefully
assess the risks associated with
allocating premium payments to this
subaccount.
--------------------------------------------------------------------------------------------
ENTERPRISE BALANCED SUBACCOUNT Seeks long-term total return. Generally,
between 55% and 75% of its total assets
This subaccount purchases shares of the will be invested in equity securities, and
Enterprise Accumulation Trust Balanced between 45% and 25% in fixed income
Portfolio. securities to provide a stable flow of
income. Allocation will vary based on the
manager's assessment of the return
potential of each asset class.
--------------------------------------------------------------------------------------------
ENTERPRISE MULTI-CAP GROWTH SUBACCOUNT Seeks long-term capital appreciation by
primarily investing in growth stocks.
This subaccount purchases shares of the Companies will tend to fall into one of
Enterprise Accumulation Trust Multi-Cap two categories: companies that offer goods
Growth Portfolio. or services to a rapidly expanding
marketplace or companies experiencing a
major change that is expected to produce
advantageous results.
--------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX SUBACCOUNT Seeks to match the total return of the
Standard & Poor's 500 Composite Stock
This subaccount purchases shares of the Price Index. Generally invests in all 500
Dreyfus Stock Index Fund. stocks in the S&P 500 in proportion to
their weighting in the index.
--------------------------------------------------------------------------------------------
</TABLE>
17
<PAGE> 23
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C>
THE DREYFUS SOCIALLY RESPONSIBLE Seeks to provide capital growth, with
SUBACCOUNT current income as a secondary goal. Invest
primarily in common stock of companies
This subaccount purchases shares of The that, in the opinion of its management,
Dreyfus Socially Responsible Growth Fund, meet traditional investment standards and
Inc. conduct their business in a manner that
contributes to the enhancement of the
quality of life in America.
--------------------------------------------------------------------------------------------
FIDELITY VIP GROWTH SUBACCOUNT Seeks to achieve capital appreciation by
investing its assets primarily in common
This subaccount purchases shares of stocks that it believes have above-average
Fidelity Variable Insurance Products Fund growth potential. Tends to be companies
(VIP) Growth fund. with higher than average price/earnings
ratios, and with new products,
technologies, distribution channels or
other opportunities, or with a strong
industry or market position. May invest in
securities of foreign issuers in addition
to those of domestic issuers.
--------------------------------------------------------------------------------------------
FIDELITY VIP II CONTRAFUND SUBACCOUNT Seeks long-term capital appreciation by
investing mainly in equity securities of
This subaccount purchases shares of companies whose value it believes is not
Fidelity Variable Insurance Products Fund fully recognized by the public. Typically,
(VIP II) Contrafund fund. includes companies in turnaround
situations, companies experiencing
transitory difficulties, and undervalued
companies. May invest in securities of
foreign issuers in addition to those of
domestic issuers.
--------------------------------------------------------------------------------------------
FIDELITY VIP III GROWTH OPPORTUNITIES Seeks to provide capital growth by
SUBACCOUNT investing primarily in common stocks. May
also invest in other types of securities,
This subaccount purchases shares of including bonds, which may be
Fidelity Variable Insurance Products Fund lower-quality debt securities. May invest
(VIP III) Growth Opportunities fund. in securities of foreign issuers in
addition to those of domestic issuers.
--------------------------------------------------------------------------------------------
JANUS ASPEN SERIES AGGRESSIVE GROWTH Seeks long-term growth of capital by
SUBACCOUNT investing primarily in common stocks
selected for their growth potential.
This subaccount purchases shares of Janus Normally, it invests at least 50% of its
Aspen Series Aggressive Growth Portfolio. equity assets in medium-sized companies
with market capitalization's falling
within the range of companies in the S&P
MidCap 400 Index. Market capitalization
within the Index will vary but as of
12/31/98, they ranged from approximately
$142 million to $73 billion.
--------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 24
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C>
JANUS ASPEN SERIES BALANCED SUBACCOUNT Seeks long-term capital growth, consistent
with preservation of capital and balanced
This subaccount purchases shares of Janus by current income. Normally invests 40-60%
Aspen Series Balanced Portfolio. of its assets in securities selected
primarily for their growth potential, and
40-60% in securities selected primarily
for their income potential and at least
25% of its assets in fixed-income
securities.
--------------------------------------------------------------------------------------------
JANUS ASPEN SERIES CAPITAL APPRECIATION Seeks long-term growth of capital. It
SUBACCOUNT pursues its objective by investing
primarily in common stocks selected for
This subaccount purchases shares of Janus their growth potential. The portfolio may
Aspen Series Capital Appreciation invest in companies of any size, from
Portfolio. larger, well-established companies to
smaller, emerging growth companies.
--------------------------------------------------------------------------------------------
JANUS ASPEN SERIES WORLDWIDE GROWTH Seeks long-term growth of capital in a
SUBACCOUNT manner consistent with the preservation of
capital. It pursues this objective by
This subaccount purchases shares of Janus investing primarily in common stocks of
Aspen Series Worldwide Growth Portfolio. companies of any size throughout the
world. Normally invests in issuers from at
least five different countries, including
the United States but may at times invest
in fewer than five countries or even in a
single country.
--------------------------------------------------------------------------------------------
</TABLE>
THE FUNDS
Each available subaccount of MONY Variable Account L will invest only in
the shares of the designated portfolio of the Funds. The Funds (except for the
Dreyfus Stock Index Fund) are diversified, open-end management investment
companies. The Dreyfus Stock Index Fund is a non-diversified, open-end
management investment company. The Funds are registered with the SEC under the
Investment Company Act of 1940. The SEC does not supervise the investments or
investment policy of the Funds.
MONY SERIES FUND, INC.
Only shares of four of the seven portfolios of the MONY Series Fund, Inc.
can be purchased by a subaccount available to you. Each of the portfolios has
different investment objectives and policies. MONY Life Insurance Company of
America, a wholly-owned subsidiary of the Company ("MONY America") is a
registered investment adviser under the Investment Advisers Act of 1940. MONY
America, as investment adviser, paid all expenses associated with organizing the
MONY Series Fund, Inc. when it was organized in 1985. Those expenses also
included the costs of the initial registration of its
19
<PAGE> 25
securities. MONY America, as investment adviser, currently pays the compensation
of the Fund's directors, officers and employees who are affiliated in some way
with the Company. The MONY Series Fund, Inc. pays for all other expenses
including, for example, the calculation of the net asset value of the
portfolios. To carry out its duties as investment adviser, MONY America has
entered into a Services Agreement with the Company to provide personnel,
equipment, facilities and other services. As the investment adviser to the MONY
Series Fund, Inc., MONY America receives a daily investment advisory fee for
each portfolio (See chart below). Fees are deducted daily and paid to MONY
America monthly.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PORTFOLIO AND INVESTMENT ADVISER INVESTMENT ADVISER FEE
- --------------------------------------------------------------------------------------------
<S> <C>
GOVERNMENT SECURITIES PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million, and
MONY Life Insurance Company of America is 0.30% in excess of $800 million of the
the Investment Adviser. portfolio's aggregate average daily net
assets
- --------------------------------------------------------------------------------------------
LONG TERM BOND PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million, and
MONY Life Insurance Company of America is 0.30% in excess of $800 million of the
the Investment Adviser. portfolio's aggregate average daily net
assets
- --------------------------------------------------------------------------------------------
INTERMEDIATE TERM BOND PORTFOLIO Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million, and
MONY Life Insurance Company of America is 0.30% in excess of $800 million of the
the Investment Adviser. portfolio's aggregate average daily net
assets
- --------------------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO Annual rate of 0.40% of the first $400
million, 0.35% of the next $400 million, and
MONY Life Insurance Company of America is 0.30% of assets in excess of $800 million of
the Investment Adviser. the portfolio's aggregate average daily net
assets.
- --------------------------------------------------------------------------------------------
</TABLE>
ENTERPRISE ACCUMULATION TRUST
Enterprise Accumulation Trust has a number of portfolios; the shares of
some of which can be purchased by subaccounts available to you. Enterprise
Capital Management, Inc. ("Enterprise Capital"), a wholly owned subsidiary of
the Company, is the investment adviser of Enterprise Accumulation Trust.
Enterprise Capital is responsible for the overall management of the portfolios,
including meeting the investment objectives and policies of the portfolios.
Enterprise Capital contracts with sub-investment advisers to assist in managing
the portfolios. For information on the sub-advisers for each portfolio, see the
Enterprise Accumulation Trust prospectus included in this Prospectus Portfolio.
Enterprise Accumulation Trust pays an investment advisory fee to Enterprise
Capital which in turn pays the sub-investment advisers. Fees are deducted daily
and paid to Enterprise Capital on a monthly basis. The daily investment adviser
fees and sub-investment adviser fees for each portfolio are shown in the chart
below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PORTFOLIO AND INVESTMENT SUB-ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY PORTFOLIO Annual rate of 0.80% of the Annual rate of 0.40% up to $1
first $400 million, 0.75% of billion, and 0.30% in excess
TCW Investment Management Company the next $400 million and of $1 billion of the
is the sub-investment adviser. 0.70% in excess of $800 portfolio's average daily net
million of the portfolio's assets.
average daily net assets.
- --------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE> 26
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PORTFOLIO AND INVESTMENT SUB-ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
MANAGED PORTFOLIO Annual rate of 0.80% of the OpCap Advisors' fee for the
first $400 million, 0.75% of assets of the portfolio it
OpCap Advisors and Sanford C. the next $400 million and manages is an annual rate of
Bernstein & Co., Inc. are the 0.70% in excess of $800 0.40% up to $1 billion, 0.30%
co-sub-investment advisers. million of the portfolio's from $1 billion to $2 billion
average daily net assets. and 0.25% in excess of $2
billion of the portfolio's
average daily net assets.
Sanford C. Bernstein & Co.,
Inc.'s fee for the assets of
the portfolio it manages is
an annual rate of 0.40% up to
$10 million, 0.30% from $10
million to $50 million, 0.20%
from $50 million to $100
million, and 0.10% in excess
of $100 million of the
portfolio's average daily net
assets.
- --------------------------------------------------------------------------------------------------
EQUITY INCOME PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.30% of the
portfolio's average daily net first $100 million, 0.25% of
1740 Advisers, Inc. is the sub- assets. the next $100 million, and
investment adviser. 0.20% in excess of $200
million of the portfolio's
average daily net assets.
- --------------------------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.30% of the
portfolio's average daily net first $100 million, 0.25% of
Retirement Systems Investors, Inc. assets. the next $100 million, and
is the sub-investment adviser. 0.20% in excess of $200
million of the portfolio's
average daily net assets.
- --------------------------------------------------------------------------------------------------
GROWTH PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.30% of the
portfolio's average daily net first $1 billion and 0.20% in
Montag & Caldwell, Inc. is the assets. excess of $1 billion of the
sub-investment adviser. portfolio's average daily net
assets.
- --------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.45% of the
portfolio's average daily net portfolio's average daily net
Marsico Capital Management, LLC is assets. assets.
the sub-investment adviser.
- --------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH PORTFOLIO Annual rate of 1.00% of the Annual rate of 0.65% of the
portfolio's average daily net first $50 million, 0.55% of
William D. Witter, Inc. is the assets. the next $50 million and
sub-investment adviser. 0.45% in excess of $100
million of the portfolio's
average daily net assets.
- --------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 27
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
PORTFOLIO AND INVESTMENT SUB-ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
SMALL COMPANY VALUE PORTFOLIO Annual rate of 0.80% of the Annual rate of 0.40% of the
portfolio's average daily net first $1 billion and 0.30% in
Gabelli Asset Management, Inc. is assets. excess of $1 billion of the
the sub-investment adviser. portfolio's average daily net
assets.
- --------------------------------------------------------------------------------------------------
INTERNATIONAL GROWTH PORTFOLIO Annual rate of 0.85% of the Annual rate of 0.40% of the
portfolio's average daily net first $100 million, 0.35% of
Vontobel USA Inc. is the sub- assets. $100 million to $200 million,
investment adviser. 0.30% of $200 million to $500
million and 0.25% in excess
of $500 million of the
portfolio's average daily net
assets.
- --------------------------------------------------------------------------------------------------
HIGH YIELD BOND PORTFOLIO Annual rate of 0.60% of the Annual rate of 0.30% of the
portfolio's average daily net first $100 million and 0.245%
Caywood-Scholl Capital Corporation assets. in excess of $100 million of
is the sub-investment adviser. the portfolio's average daily
net assets.
- --------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO Annual rate of 1.00% of the Annual rate of 0.30% up to $1
average daily net assets. billion and 0.20% in excess
Montag & Caldwell, Inc. is the of $1 billion of the
sub-investment adviser. portfolio's average daily net
assets.
- --------------------------------------------------------------------------------------------------
MULTI-CAP GROWTH PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.40% of the
average daily net assets. average daily net assets.
Fred Alger Management Inc. is the
sub-investment adviser.
- --------------------------------------------------------------------------------------------------
</TABLE>
DREYFUS STOCK INDEX FUND
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND, INC.
The Dreyfus Corporation is the investment adviser of the Dreyfus Stock
Index Fund and The Dreyfus Socially Responsible Growth Fund, Inc. As described
below, the Fund or The Dreyfus Corporation contracts with sub-investment
advisers to assist in managing the portfolios as noted below. Fees are deducted
on a monthly basis. The daily investment adviser fees and sub-investment adviser
fees for each portfolio are shown in the table below.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
DREYFUS STOCK INDEX FUND Annual rate of 0.245% of the Dreyfus Corporation pays the
fund's average daily net sub-adviser an annual rate of
Mellon Equity Associates is the assets. 0.095% of the value of the
sub-investment adviser. fund's average daily net
assets.
- ----------------------------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 28
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
THE DREYFUS SOCIALLY RESPONSIBLE Annual rate of 0.75% of the Dreyfus Corporation pays the
GROWTH FUND, INC. fund's average daily net sub-adviser an annual rate of
assets. 0.10% of the first $32
NCM Capital Management Group, Inc. million, 0.15% in excess of
is the sub-investment adviser. $32 million up to $150
million, 0.20% in excess of
$150 million up to $300
million, 0.25% in excess of
$300 million of the value of
the fund's average daily net
assets.
- ----------------------------------------------------------------------------------------------------
</TABLE>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND -- SERVICE CLASS -- GROWTH PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II -- SERVICE CLASS -- CONTRAFUND(R)
PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III -- SERVICE CLASS -- GROWTH
OPPORTUNITIES PORTFOLIO
Fidelity Management & Research ("FMR") is each fund's investment manager.
As the manager, FMR is responsible for choosing investments for the funds and
handling the funds' business affairs. Affiliates assist FMR with foreign
investments. The daily investment adviser fee for each portfolio is shown in the
table below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISERS INVESTMENT ADVISER FEE
- ------------------------------------------------------------------------------------------
<S> <C>
FIDELITY VARIABLE INSURANCE PRODUCTS The fee is calculated by adding a group fee
FUND -- GROWTH PORTFOLIO rate to an individual fee rate, dividing by
twelve, and multiplying the result by the
Fund's average net assets throughout the
month. The group fee rate is based on the
average net assets of all the mutual funds
advised by FMR. This group rate cannot rise
above 0.52% for this Fund, and it drops as
total assets under management increase. The
individual fee rate for this Fund is 0.30%
of the Fund's average net assets.
- ------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS FUND The fee is calculated by adding a group fee
II -- CONTRAFUND(R) PORTFOLIO rate to an individual fee rate, dividing by
twelve, and multiplying the result by the
Fidelity Management & Research (U.K.) Fund's average net assets throughout the
Inc. and Fidelity Management & Research month. The group fee rate is based on the
Far East Inc. are the sub-investment average net assets of all the mutual funds
advisers. advised by FMR. This group rate cannot rise
above 0.52% for this Fund, and it drops as
total assets under management increase. The
individual fee rate for this Fund is 0.30%
of the Fund's average net assets.
- ------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE> 29
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISERS INVESTMENT ADVISER FEE
- ------------------------------------------------------------------------------------------
<S> <C>
FIDELITY VARIABLE INSURANCE PRODUCTS FUND The fee is calculated by adding a group fee
III -- GROWTH OPPORTUNITIES PORTFOLIO rate to an individual fee rate, dividing by
twelve, and multiplying the result by the
Fidelity Management & Research (U.K.) Fund's average net assets throughout the
Inc. and Fidelity Management & Research month. The group fee rate is based on the
Far East Inc. are the sub-investment average net assets of all the mutual funds
advisers. advised by FMR. This group rate cannot rise
above 0.52% for this Fund, and it drops as
total assets under management increase. The
individual fee rate for this Fund is 0.30%
of the Fund's average net assets.
- ------------------------------------------------------------------------------------------
</TABLE>
JANUS ASPEN SERIES
Janus Aspen Series has eleven portfolios. The shares of four of the
portfolios can be purchased by the subaccounts available to you. Janus Capital
is the investment adviser to each of the portfolios and is responsible for the
day-to-day management of the investment portfolios and other business affairs of
the portfolios. The daily investment adviser fee for each portfolio is shown in
the table below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
- ------------------------------------------------------------------------------------------
<S> <C>
AGGRESSIVE GROWTH PORTFOLIO Annual rate of 0.65% of the portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------
BALANCED PORTFOLIO Annual rate of 0.65% $200 of the
portfolio's average daily net assets.
- ------------------------------------------------------------------------------------------
CAPITAL APPRECIATION PORTFOLIO Annual rate of 0.65% of the portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------
WORLDWIDE GROWTH PORTFOLIO Annual rate of 0.65% of the portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------
</TABLE>
The investment objectives of each portfolio (except the Janus portfolios)
are fundamental and may not be changed without the approval of the holders of a
majority of the outstanding shares of the affected portfolio. For each of the
Funds this means the lesser of (1) 67% of the portfolio shares represented at a
meeting at which more than 50% of the outstanding portfolio shares are
represented or (2) more than 50% of the outstanding portfolio shares. The
investment objectives of the Janus portfolios purchased by the corresponding
subaccounts are non-fundamental and may be changed by the Fund's Trustees
without a shareholder vote.
24
<PAGE> 30
PURCHASE OF PORTFOLIO SHARES BY MONY VARIABLE ACCOUNT L
The Company purchases shares of each portfolio for the corresponding
sub-account at net asset value, i.e. without a sales load. Generally, all
dividends and capital gains distributions received from a portfolio are
automatically reinvested in the portfolio at net asset value. The Company, on
behalf of MONY Variable Account L, may elect not to reinvest dividends and
capital gains distributions. The Company redeems Fund shares at net asset value
to make payments under the Policies.
Fund shares are offered only to insurance company separate accounts. The
insurance companies may or may not be affiliated with the Company or with each
other. This is called "shared funding." Shares may also be sold to separate
accounts to serve as the underlying investments for variable life insurance
policies and variable annuity policies. This is called "mixed funding."
Currently, the Company does not foresee any disadvantages to policy owners due
to mixed or shared funding. However, differences in tax treatment or other
considerations may at some time create conflict of interests between owners of
various contracts. The Company and the Boards of Directors of the Funds, and any
other insurance companies that participate in the Funds are required to monitor
events to identify material conflicts. If there is a conflict because of mixed
or shared funding, the Company might be required to withdraw the investment of
one or more of its separate accounts from the Funds. This might force the Funds
to sell securities at disadvantageous prices.
The investment objectives of each of the portfolios is substantially
similar to the investment objectives of the subaccount which purchases shares of
that portfolio. A summary of the investment objective of each of the subaccounts
available to you is found in the chart on pages 15-19. No portfolio can assure
you that its objective will be achieved. You will find more detailed information
in the prospectus of each Fund that you received with this prospectus. The
Funds' prospectuses include information on the risks of each portfolio's
investments and investment techniques.
THE FUNDS' PROSPECTUSES ACCOMPANY THIS PROSPECTUS AND SHOULD BE
READ CAREFULLY BEFORE INVESTING
25
<PAGE> 31
DETAILED INFORMATION ABOUT THE POLICY
The Fund Value in MONY Variable Account L and the Guaranteed Interest
Account provide many of the benefits of your policy. The information in this
section describes the benefits, features, charges, and other major provisions of
the policies and the extent to which those benefits depend upon the Fund Value.
APPLICATION FOR A POLICY
The policy design meets the needs of individuals as well as for
corporations who provide coverage and benefits for key employees. A purchaser
must complete an application and personally deliver it to a licensed agent of
the Company, who is also a registered representative of MONY Securities
Corporation ("MSC"). The licensed agent submits the application to the Company.
The policy may also be sold through other broker-dealers authorized under the
law and by MSC. A policy can be issued on the life of an insured for ages up to
and including 85 with evidence of insurability that satisfies the Company. If a
qualified plan will own the policy, the insured cannot be more than 70 years
old. The age of the insured is the age on his or her last birthday prior to the
date of the policy. The Company accepts the application subject to its
underwriting rules, and may request additional information or reject an
application.
The minimum Specified Amount you may apply for is $50,000. However, the
Company reserves the right to revise its rules at any time to require a
different minimum Specified Amount at issue for subsequently issued policies.
Each policy is issued with a policy date. The policy date is used to
determine the policy months and years, and policy monthly, quarterly,
semi-annual and annual anniversaries. The policy date is stated on page 1 of the
policy. The policy date will normally be the later of (1) the date that delivery
of the policy is authorized by the Company ("Policy Release Date"), or (2) the
policy date requested in the application. No premiums may be paid with the
application except under the temporary insurance procedures defined below.
Temporary Insurance Coverage
If you want insurance coverage before the Policy Release Date, and are more
than 15 days old and not more than 70 years old, you may be eligible for a
temporary insurance agreement. You must complete an application for the policy
and give it to the Company's licensed agent. The application contains a number
of questions about your health. Your eligibility for temporary coverage will
depend upon your answers to those questions. In addition, you must complete and
sign the Temporary Insurance Agreement Form. You must also submit payment for at
least one Minimum Monthly Premium for the Policy as applied for. Your coverage
under the Temporary Insurance Agreement starts on the date you sign the form and
pay the premium amount, or if later, the requested policy date. See "Premium
Flexibility," page 28.
Coverage under the Temporary Insurance Agreement ends on the earliest of:
- the Policy Release Date, if the policy is issued as applied for;
- the 15th day after the Policy Release Date or the date the policy takes
effect, if the policy is issued other than as applied for,
- no later than 90 days from the date the Temporary Insurance Agreement is
signed;
- the 45th day after the form is signed if you have not finished the last
required medical exam;
- 5 days after the Company sends notice to you that it declines to issue
any policy; and
- the date you tell the Company that the policy will be refused:
If the insured dies during the period of temporary coverage, the death
benefit will be:
(1) the insurance coverage applied for (including any optional riders)
up to $500,000, less
(2) the deductions from premium and the monthly deduction due prior to
the date of death.
26
<PAGE> 32
Premiums paid for temporary insurance coverage are held in the Company's
general account until the Policy Release Date. Except as provided below,
interest is credited on the premiums (less any deductions from premiums) held in
the Company's general account. The interest rate will be set by the Company, but
will not be less than 4.5 % per year. If the policy is issued and accepted,
these amounts will be applied to the policy. These premiums will be returned to
you (without interest) within 5 days after the earliest of:
(1) the date you tell the Company that the policy will be refused.
Your refusal must be (a) at or before the Policy Release Date, or (b) (if
the policy is authorized for delivery other than as applied for), on or
before the 15th day after the Policy Release Date; or
(2) the date on which coverage under the Temporary Insurance Agreement
ends other than because the applicant has died or the policy applied for is
issued or refused; or
(3) the date the Company sends notice to you declining to issue any
policy.
Initial Premium Payment
Once your application is approved and you are issued a policy, the balance
of the first scheduled premium payment is payable. The scheduled premium
payments specified in your policy must be paid in full when your policy is
delivered. Your policy is effective the later of (1) acceptance and payment of
the scheduled premium payment, or (2) the policy date requested in the
application. Any premium balance remitted by you earns interest until the Right
to Return Policy Period has ended. The policy premium credited with interest
equals amounts in the general account under the Temporary Insurance Agreement,
plus interest credited minus deductions from premiums. The monthly deduction due
prior to or on the Policy Release Date will be made. If you request a policy
date which is later than the Policy Release Date, your premium will be held in
the general account until the policy date. Premium held in the Company's general
account earns an interest rate set by the Company, but will not be less than
4.5% per year. When the Right to Return Policy Period ends, the premium, plus
any interest credited by the Company, is allocated to the subaccounts of MONY
Variable Account L or the Guaranteed Interest Account pursuant to your
instructions. (See "Right to Examine a Policy -- Right to Return Policy Period,"
below.)
Policy Date
The Company may approve the backdating of a policy. The policy may be
backdated for not more than 6 months (a shorter period is required in certain
states) prior to the date of the application. Backdating can be to your
advantage if it lowers the insured's issue age and results in lower cost of
insurance rates. If the policy is backdated, the initial scheduled premium
payment will include sufficient premium to cover the extra charges for the
backdating period. Extra charges equal the monthly deductions for the period
that the policy date is backdated.
Risk Classification
Insureds are assigned to underwriting (risk) classes. Risk classes are used
in calculating the cost of insurance and certain rider charges. In assigning
insureds to underwriting classes, the Company will normally use the medical or
paramedical underwriting method. This method may require a medical examination
of the proposed insured. The Company may use other forms of underwriting when it
is considered appropriate.
RIGHT TO EXAMINE A POLICY -- RIGHT TO RETURN POLICY PERIOD
The Right to Return Policy Period runs for 10 days (or longer in certain
states) after you receive the policy. During this period, you may cancel the
policy and receive a refund of the full amount of the premium paid.
27
<PAGE> 33
PREMIUMS
The policy is a flexible premium policy. The policy provides considerable
flexibility, subject to the limitations described below, to pay premiums at your
discretion.
Premium Flexibility
The Company requires you to pay an amount equal to at least the Minimum
Monthly Premium to put the policy in effect. If you want to pay premiums less
often than monthly, the premium required to put the policy in effect is equal to
the Minimum Monthly Premium multiplied by 12 divided by the frequency of the
scheduled premium payments. This Minimum Monthly Premium will be based upon:
1) the policy's Specified Amount,
2) any riders added to the policy, and
3) the insured's
a) Age,
b) smoking status,
c) gender (unless unisex cost of insurance rates apply, see "Cost of
Insurance," page 45), and
d) underwriting class.
The Minimum Monthly Premium will be shown in the policy. Thereafter,
subject to the limitations described below, you may choose the amount and
frequency of premium payments to reflect your varying financial conditions.
The policy is guaranteed not to lapse during the first three policy years
if on each monthly anniversary the conditions previously described in "Summary
of the Policy" on page 1 are met. See also "Grace Period and Lapse," page 41.
Scheduled Premium Payments
When you apply for a policy, you determine a scheduled premium payment.
This scheduled premium payment provides for the payment of level premiums at
fixed intervals over a specified period of time. You will receive a premium
reminder notice for the scheduled premium payment amount on an annual,
semiannual or quarterly basis, at your option. The minimum scheduled premium
payment equals the Minimum Monthly Premium multiplied by 12 divided by the
scheduled premium payment frequency. Although reminder notices will be sent, you
may not be required to pay scheduled premium payments.
You may elect to make monthly premium payments by electronic funds
transfer. Based on your policy date, up to two Minimum Monthly Premiums may be
required to be paid in cash before premiums may be paid by electronic funds
transfer to the Company. Paying premiums by electronic funds transfer requires
you to authorize the Company to withdraw premiums from your checking account
each month.
Payment of the scheduled premium payments will not guarantee that your
policy will remain in effect. (See "Grace Period and Lapse" in the Summary and
on page 41.)
Modified Endowment Contracts
The amount, frequency and period of time over which you pay premiums may
affect whether your policy will be classified as a modified endowment contract.
A modified endowment contract is a type of life insurance policy subject to
different tax treatment than that given to a conventional life insurance policy.
The difference in tax treatment occurs when you take certain pre-death
distributions from your policy. See "Federal Income Tax Considerations --
Modified Endowment Contracts," page 49.
28
<PAGE> 34
Unscheduled Premium Payments
Generally, you may make premium payments at any time and in any amount.
However, if the premium payment you wish to make exceeds the Scheduled Premium
payments for the policy, the Company may reject or limit any unscheduled premium
payment that would result in an immediate increase in the death benefit payable.
An immediate increase would occur if the policy's death benefit exceeds the
Specified Amount for the policy. The policy's death benefit would exceed the
Specified Amount of the policy if your Fund Value multiplied by the death
benefit percentage determined in accordance with the federal income tax law
definition of life insurance exceeds the Specified Amount. See "Death Benefits
Under the Policy," page 30 and "Federal Income Tax Considerations -- Definition
of Life Insurance," page 48. However, such a premium may be accepted if you
provide us with satisfactory evidence of insurability. If satisfactory evidence
of insurability is not received, the payment or a part of it may be returned. In
addition, all or a part of a premium payment will be rejected and returned to
you if it would exceed the maximum premium limitations prescribed by the federal
income tax law definition of life insurance.
Payments you send to us will be treated as premium payments, and not as
repayment of Outstanding Debt, unless you request otherwise. If you request that
the payment be treated as a repayment of Outstanding Debt, any part of a payment
that exceeds the amount of Outstanding Debt will be applied to the Fund Value.
Applicable taxes and sales charges are only deducted from any payment that
constitutes a premium payment.
Premium Payments Affect the Continuation of the Policy
If you skip or stop paying premiums, the policy will continue in effect
until the Cash Value can no longer cover (1) the monthly deductions from the
Fund Value for the policy, and (2) the charges for any optional insurance
benefits added by rider. See "Grace Period and Lapse." page 41.
Your policy is guaranteed to remain in effect as long as:
(a) the Cash Value is greater than zero; or
(b) during the first three policy years, the Minimum Monthly Premium
requirements are satisfied, and if you increase the Specified Amount during
the first three policy years, the Minimum Monthly Premium requirements are
satisfied during the three policy years following the effective date of the
increase.
Generally, your policy remains in effect so long as your policy has Cash
Value. Charges that maintain your policy are deducted monthly from Fund Value.
The Cash Value of your policy is affected by,
(1) the investment experience of any amounts in the subaccounts of
MONY Variable Account L,
(2) the interest earned in the Guaranteed Interest Account, and
(3) the deduction from Cash Value of the various charges, costs, and
expenses imposed by the policy provisions.
This in turn affects the length of time your policy remains in effect
without the payment of additional premiums. Therefore, coverage will last as
long as the Cash Value of your policy is sufficient to pay these charges. See
"Grace Period and Lapse," page 41.
ALLOCATION OF NET PREMIUMS
Net premiums may be allocated to any twenty of the twenty-five available
subaccounts and to the Guaranteed Interest Account. Allocations must be in whole
percentages, and no allocation may be for less than 10% of a net premium.
Allocation percentages must sum to 100%.
You may change the allocation of net premiums at any time by submitting a
proper written request to the Company's home office at 1740 Broadway, New York,
New York, 10019. In addition, you may make changes in net premium allocation
instructions by telephone if a properly completed and signed telephone
29
<PAGE> 35
transfer authorization form has been received by us at our Syracuse Operations
Center at 1 MONY Plaza, Syracuse, New York, 13202. The Company may stop making
available the ability to give net premium allocation instructions by telephone
at any time, but it will give you notice before doing so if we have received
your telephone transfer authorization form. See "Telephone Transfer Privileges,"
page 60. Whether you give us instructions in writing or by telephone, the
revised allocation percentages will be effective on the day we receive the
notification.
Unscheduled premium payments may be allocated either by percentage or by
dollar amount. If the allocation is expressed in dollar amounts, the 10% limit
on allocation percentages does not apply.
DEATH BENEFITS UNDER THE POLICY
When your policy is issued, the initial amount of insurance ("Specified
Amount") is shown on the specification page of your policy. The minimum
Specified Amount is $50,000.
As long as the policy is in effect, the Company will, upon proof of death
of an insured, pay death benefit proceeds to a named beneficiary. Death benefit
proceeds will consist of:
(1) The policy's death benefit, plus
(2) Any insurance proceeds provided by rider, less
(3) Any Outstanding Debt, (and, if in the Grace Period, less any
overdue charges).
You may select one of two death benefit Options: Option 1 or Option 2.
Generally, you designate the death benefit option in your application. If no
option is designated, the Company assumes Option 2 has been selected. Subject to
certain restrictions, you can change the death benefit option selected. As long
as your policy is in effect, the death benefit under either option will never be
less than the Specified Amount of your policy.
Option 1 -- The death benefit equals the greater of:
(a) The Specified Amount, or
(b) Fund Value multiplied by a death benefit percentage.
The death benefit percentages vary according to the age of the insured
and will be at least equal to the percentage defined in the Internal
Revenue Code. The Internal Revenue Code addresses the definition of a life
insurance policy for tax purposes. See "Federal Income Tax
Considerations -- Definition of Life Insurance," page 48. The death benefit
percentage is 250% for insureds 40 or under, and it declines for older
insureds. A table showing the death benefit percentages is in Appendix A to
this prospectus and in your policy. If you seek to have favorable
investment performance reflected in increasing Fund Value, and not in
increasing insurance coverage, you should choose Option 1.
Option 2 -- The death benefit equals the greater of:
(a) The Specified Amount of the policy, plus the Fund Value, or
(b) The Fund Value multiplied by a death benefit percentage.
The Fund Value used in these calculations is determined as of the date
of the insured's death. The death benefit percentage is the same as that
used for Option 1 and is stated in Appendix A. The death benefit in Option
2 will always vary as Fund Value varies. If you seek to have favorable
investment performance reflected in increased insurance coverage, you
should choose Option 2.
Examples of Options 1 and 2
The following examples demonstrate the determination of death benefits
under Options 1 and 2. The examples show three policies with the same Specified
Amount, but Fund Values that vary as shown. It is
30
<PAGE> 36
assumed that the insured is age 40 at the time of death and that there is no
Outstanding Debt. The date of death is also assumed to be on a monthly
anniversary day.
<TABLE>
<CAPTION>
POLICY 1 POLICY 2 POLICY 3
-------- -------- --------
<S> <C> <C> <C>
Specified Amount........................................... $100,000 $100,000 $100,000
Fund Value on Date of Death................................ $ 35,000 $ 60,000 $ 85,000
Death Benefit Percentage................................... 250% 250% 250%
Death Benefit under Option 1............................... $100,000 $150,000 $212,500
Death Benefit under Option 2............................... $135,000 $160,000 $212,500
</TABLE>
Option 1, Policy 1: The death benefit equals $100,000 since the death benefit
is the greater of the Specified Amount ($100,000) or the
Fund Value multiplied by the death benefit percentage
($35,000 x 250% = $87,500).
Option 1, Policies 2 & 3: The death benefit is equal to the Fund Value
multiplied by the death benefit percentage since
($60,000 x 250% = $150,000 for Policy 2; $85,000 x
250% = $212,500 for Policy 3) is greater than the
Specified Amount ($100,000).
Option 2, Policy 1: The death benefit equals $135,000 since the Specified
Amount plus the Fund Value ($100,000 + $35,000 = $135,000)
is greater than the Fund Value multiplied by the death
benefit percentage ($35,000 x 250% = $87,500).
Option 2, Policy 2: The death benefit equals the Specified Amount plus the Fund
Value ($100,000 + $60,000 = $160,000) since it is greater
than the Fund Value multiplied by the death benefit
percentage ($60,000 X 250% = $150,000).
Option 2, Policy 3: The death benefit is the Fund Value multiplied by the death
benefit percentage ($85,000 X 250% = $212,500) since it is
greater than the Specified Amount plus the Fund Value
($100,000 + $85,000 = $185,000).
The Company pays death benefit proceeds to a beneficiary in a lump sum or under
a payment plan offered under the policy. The policy should be consulted for
details.
Changes in Death Benefit Option
You may request that the death benefit option under your policy be changed
from Option 1 to Option 2, or Option 2 to Option 1. You may make a change by
sending a written request to the Company's administrative office. A change from
Option 2 to Option 1 is made without providing evidence of insurability. A
change from Option 1 to Option 2 will require that you provide satisfactory
evidence of insurability. The effective date of a change requested between
monthly anniversaries will be the next monthly anniversary day after the change
is accepted by the Company.
If you change from Option 1 to Option 2 your policy's Specified Amount is
reduced by the amount of the policy's Fund Value at the date of the change. This
maintains the death benefit payable under Option 2 at the amount that would have
been payable under Option 1 immediately prior to the change. The total death
benefit will not change immediately. The change to Option 2 will affect the
determination of the death benefit from that point on. As of the date of the
change, the Fund Value will be added to the new specified Amount. The death
benefit will then vary with the Fund Value. This change will not be permitted if
it would result in a new Specified Amount of less than $100,000.
If you change from Option 2 to Option 1, the Specified Amount of the policy
will be increased by the amount of the policy's Fund Value at the date of the
change. This maintains the death benefit payable under Option 1 at the amount
that would have been payable under Option 2 immediately prior to the change. The
total death benefit will not change immediately. The change to Option 1 will
affect the determination of the death benefit from that point on. The death
benefit will equal the Specified Amount (or if higher, the Fund Value multiplied
by the death benefit percentage). The change to Option 1 will generally reduce
the death benefit payable in the future.
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A change in the death benefit option may affect the monthly cost of
insurance charge since this charge varies with the net amount at risk.
Generally, the net amount at risk is the amount by which the death benefit
exceeds Fund Value. See "Cost of Insurance," page 45. If the policy's death
benefit is not based on the death benefit percentage under Option 1 or 2,
changing from Option 2 to Option 1 will generally decrease the net amount at
risk. Therefore, this change may decrease the cost of insurance charges.
Changing from Option 1 to Option 2 will generally result in a net amount at risk
that remains level. However, such a change will result in an increase in the
cost of insurance charges over time. This results because the cost of insurance
rates increase with the insured's age.
CHANGES IN SPECIFIED AMOUNT
You may request an increase or decrease in the Specified Amount under your
policy subject to Company approval. A change in the Specified Amount may be made
at any time after the policy is issued. Increases in Specified Amount are not
permitted on or after the insured's age 85. Increasing the Specified Amount will
generally increase the policy's death benefit. Decreasing the Specified Amount
will generally decrease the policy's death benefit. The amount of change in the
death benefit depends on (1) the death benefit option chosen, and (2) whether
the death benefit under the policy is being computed using the death benefit
percentage at the time of the change. Changing the Specified Amount could affect
the subsequent level of policy values. For example, an increase in Specified
Amount may increase the net amount at risk, which will increase your cost of
insurance charges over time. Conversely, a decrease in Specified Amount may
decrease the net amount at risk, which may decrease your cost of insurance over
time.
To increase or decrease the Specified Amount, send a written application to
the Company's administrative office. It will become effective on the monthly
anniversary day on or next following the Company's acceptance of your request.
If you are not the insured, the Company may also require the consent of the
insured before accepting a request.
Increases
An increase of Specified Amount requires that additional, satisfactory
evidence of insurability be provided to the Company.
When you request an increase in Specified Amount, a new "coverage segment"
is created for which cost of insurance and other charges are computed
separately. See "Charges and Deductions," page 43. In addition, the surrender
charge associated with your policy will increase. The surrender charge for the
increase is computed in a similar way as for the original Specified Amount. The
Minimum Monthly Premium will also be adjusted. The adjustment will be done
prospectively to reflect the increase. If the Specified Amount is increased when
a premium payment is received, the increase will be processed before the premium
payment is processed.
If an increase creates a new coverage segment of Specified Amount, Fund
Value after the increase will be allocated, (1) first to the original coverage
segment, and (2) second to each coverage segment in order of the increases.
Decreases
Any decrease in Specified Amount (whether requested by you or resulting
from a partial surrender or a death benefit option change) will be applied:
(1) To reduce the coverage segments of Specified Amount associated
with the most recent increases, then
(2) To the next most recent increases successively, and last
(3) To the original Specified Amount.
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A decrease will not be permitted if the Specified Amount would fall below
$100,000. Any decrease in the Term Life Term Insurance Rider will be applied to
reduce the coverage segments of the Rider in the order of the most recent
increases successively and finally to the original Rider.
The Minimum Monthly Premium will not be adjusted for the decrease in the
Specified Amount. If the Specified Amount is decreased when a premium payment is
received, the decrease will be processed before the premium payment is
processed. Rider coverages may also be affected by a decrease in Specified
Amount.
The Company reserves the right to reject a requested decrease. Decreases
will not be permitted if:
(1) Compliance with the guideline premium limitations under federal
tax law resulting from the decrease would result in immediate termination
of your policy, or
(2) To effect the decrease, payments to you would have to be made from
Fund Value for compliance with the guideline premium limitations, and the
amount of the payments would exceed the Cash Value of your policy.
If a requested change is not approved, we will send you a written notice of our
decision.
OTHER OPTIONAL INSURANCE BENEFITS
Subject to certain requirements, you may elect to add one or more of the
optional insurance benefits described below. Optional insurance benefits are
added when you apply for your policy. These other optional benefits are added to
your policy by an addendum called a rider. A charge is deducted monthly from the
Fund Value for each optional benefit added to your policy. See "Charges and
Deductions," page 43. You can cancel these benefits at any time. Certain
restrictions may apply and are described in the applicable rider. In addition,
adding or canceling these benefits may have an effect on your policy's status as
a modified endowment contract. See "Federal Income Tax Considerations --
Modified Endowment Contracts," page 49. An insurance agent authorized to sell
the policy can describe these extra benefits further. Samples of the provisions
are available from the Company upon written request.
From time to time we may make available riders other than those listed
below. Contact an insurance agent authorized to sell the policy for a complete
list of the riders available.
Spouse's Term Rider
This rider provides for term insurance benefits on the life of the
insured's spouse, to the spouse's age 80. The minimum amount of coverage is
$25,000. The rider coverage may be converted without evidence of insurability to
any level premium, level face amount permanent plan of insurance offered by the
Company at any time prior to the spouse's age 65 or 5 years from the issue of
the rider, if later.
Children's Term Insurance Rider
This rider provides term insurance coverage on the lives of the children of
the insured under age 18. The coverage continues to the policy anniversary after
the child's 22nd birthday. It provides coverage for children upon birth or legal
adoption without presenting evidence of insurability, if the rider is applied
for and issued at the same time as the policy is applied for and issued. If
applied for after the policy is issued, different requirements may be imposed.
Coverage is limited to the lesser of 1/5th of the initial Specified Amount or
$10,000. Upon the expiration of the rider coverage, it may be converted to any
level premium, level face amount permanent plan of insurance then offered by the
Company, for up to five times the rider coverage amount.
Purchase Option Rider
This Rider provides the option to purchase up to $100,000 of additional
coverage without providing additional evidence that the insured remains
insurable. Coverage may be added on each policy anniversary when the insured's
age is 25, 28, 31, 34, 37, 40, 43, 46 and 49. In addition, the future right to
purchase
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<PAGE> 39
new insurance on the next option date may be advanced and exercised immediately
upon the following events:
- Marriage of the insured.
- Birth of a child of the insured.
- Legal adoption of a child by insured.
A period of term insurance is automatically provided starting on the date
of the specified event. The interim term insurance, and the option to accelerate
the purchase of the coverage expires 60 days after the specified event.
Waiver of Monthly Deduction Rider
This rider provides for the waiver of certain charges while the insured has
a covered disability and the policy is in effect. While the insured is disabled,
no deductions are made for (1) monthly administrative charges, (2) per $1,000
Specified Amount charges, (3) cost of insurance charges, and rider charges.
During this period the charges are waived and therefore not deducted from the
Fund Value. The cumulative Minimum Monthly Premium requirement does not change
during the covered disability. It remains fixed at the level at the beginning of
the disability.
Term Life Term Insurance Rider
This rider provides additional death benefits on the life of the insured
until the insured reaches age 80. The minimum amount of coverage is $25,000. You
may convert the rider coverage without evidence of insurability to any level
premium, level face amount permanent policy of insurance offered by the Company.
The conversion must occur prior to the insured's age 65 or 5 years from the
issue of the rider, whichever is later.
BENEFITS AT MATURITY
The maturity date for this policy is the policy anniversary on which the
insured is age 100. If the insured is living on the maturity date, the Company
will pay to you, as an endowment benefit, the Cash Value of the policy.
Ordinarily, the Company pays within seven days of the policy anniversary.
Payments may be postponed in certain circumstances. See "Payments," page 57.
Premiums will not be accepted, nor will monthly deductions be made, after the
maturity date.
POLICY VALUES
Fund Value
The Fund Value is the sum of the amounts under the policy held in each
subaccount of MONY Variable Account L and any Guaranteed Interest Account. It
also includes the amount set aside in the Company's Loan Account, and any
interest, to secure Outstanding Debt.
On each Business Day, the part of the Fund Value allocated to any
particular subaccount is adjusted to reflect the investment experience of that
subaccount. On each monthly anniversary day, the Fund Value also is adjusted to
reflect interest on the Guaranteed Interest Account and the Loan Account and the
assessment of the monthly deduction. See "Determination of Fund Value," page 35.
No minimum amount of Fund Value allocated to a particular subaccount is
guaranteed. You bear the risk for the investment experience of Fund Value
allocated to the subaccounts.
Cash Value
The Cash Value of the policy equals the Fund Value less any surrender
charge less any Outstanding Debt. Thus, the Fund Value exceeds your policy's
Cash Value by the amount of the surrender charge and
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<PAGE> 40
any Outstanding Debt. Once the surrender charge expires, the Cash Value equals
the Fund Value less any Outstanding Debt.
DETERMINATION OF FUND VALUE
Although the death benefit under a policy can never be less than the
policy's Specified Amount, the Fund Value will vary. The Fund Value varies
depending on several factors:
- Payment of premiums.
- Amount held in the Loan Account to secure any Outstanding Debt.
- Partial surrenders.
- The charges assessed in connection with the policy.
- Investment experience of the subaccounts
- Amounts credited to the Guaranteed Interest Account.
There is no guaranteed minimum Fund Value (except to the extent that you have
allocated net premium payments and cash values to the Guaranteed Interest
Account) and you bear the entire risk relating to the investment performance of
Fund Value allocated to the subaccounts.
The Company uses amounts allocated to the subaccounts to purchase shares of
the corresponding portfolios of the Funds. The values of the subaccounts reflect
the investment experience of the corresponding portfolio. The investment
experience reflects:
- The investment income.
- Realized and unrealized capital gains and losses.
- Expenses of a portfolio including the investment adviser fees.
- Any dividends or distributions declared by a portfolio.
Any dividends or distributions from any portfolio of the Funds are reinvested
automatically in shares of the same portfolio. However, the Company, on behalf
of MONY Variable Account L, may elect otherwise. The subaccount value will also
reflect the mortality and expense risk charges the Company makes each day to the
Variable Account.
Amounts allocated to the subaccounts are measured in terms of units. Units
are a measure of value used for bookkeeping purposes. The value of amounts
invested in each subaccount is represented by the value of units credited to the
policy for that subaccount. (See "Calculating Unit Values for Each Subaccount,"
on page 36.) On any day, the amount in a subaccount of MONY Variable Account L
is equal to the unit value times the number of units in that subaccount credited
to the policy. The units of each subaccount will have different unit values.
Units of a subaccount are purchased (credited) whenever premiums or amounts
transferred (including transfers from the Loan Account) are allocated to that
subaccount. Units are redeemed (debited) to:
- Make partial surrenders.
- Make full surrenders.
- Transfer amounts from a subaccount (including transfers to the Loan
Account).
- Pay the death benefit when the insured dies.
- Pay monthly deductions from the policy's Fund Value.
- Pay policy transaction charges.
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- Pay surrender charges.
The number of units purchased or redeemed is determined by dividing the dollar
amount of the transaction by the unit value of the affected subaccount, computed
after the close of business that day. The number of units changes only as a
result of policy transactions or charges. The number of units credited will not
change because of later changes in unit value.
Transactions are processed when a premium or an acceptable written or
telephone request is received at the Company's administrative office. If the
premium or request reaches the administrative office on a day that is not a
Business Day, or after the close of business on a Business Day (after 4:00
Eastern Time), the transaction date will be the next Business Day. All policy
transactions are performed as of a Business Day. If a transaction date or
monthly anniversary day occurs on a day other than a Business Day (e.g.,
Saturday), the calculations will be done on the next day that the New York Stock
Exchange is open for trading.
CALCULATING UNIT VALUES FOR EACH SUBACCOUNT
The Company calculates the unit value of a subaccount on any Business Day
as follows:
(1) Calculate the value of the shares of the portfolio belonging to
the subaccount as of the close of business that Business Day. This
calculation is done before giving effect to any policy transactions for
that day, such as premium payments or surrenders. For this purpose, the net
asset value per share reported to the Company by the managers of the
portfolio is used.
(2) Add the value of any dividends or capital gains distributions
declared and reinvested by the portfolio during the valuation period.
Subtract from this amount a charge for taxes, if any.
(3) Subtract a charge for the mortality and expense risk assumed by
the Company under the policy. See "Daily Deductions From the Variable
Account L -- Mortality and Expense Risk Charge," page 44. If the previous
day was not a Business Day, then the charge is adjusted for the additional
days between valuations.
(4) Divide the resulting amount by the number of units held in the
subaccount on the Business Day before the purchase or redemption of any
units on that date.
The unit value of each subaccount on its first Business Day was set at
$10.00.
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DETERMINING FUND VALUE
--------------- Premium and Cash Values Allocated
Portfolios plus
--------------- Investment Experience
minus
Investment Advisory Fees
minus
Operating Expenses
---------------- Value of Portfolio Shares
Variable plus
Account L Dividends or Capital Gains Distributed
(Subaccounts) minus
---------------- Morality & Expense Risk Charge
----------------
Loan Account ---------------------
----------------
Amount set aside as collateral Fund Value
for Outstanding Debt
---------------------
Minus
Cost of Insurance Charge
Administrative Charge
Monthly per $1,000 Specified Amount Charge
and if applicable, minus
Optional Benefits charge
Transfer of Fund Value Fee
(currently no fee)
- -------------------------
Guaranteed
Interest
Account
- -------------------------
Premium Amount Allocated
plus
Accrued Interest
TRANSFER OF FUND VALUE
You may transfer Fund Value among the subaccounts after the Right to Return
Policy Period by sending a proper written request to the Company's
administrative office. Transfers may be made by telephone if you have proper
authorization. See "Telephone Transfer Privileges," page 60. Currently, there
are no limitations on the number of transfers between subaccounts. There is also
no minimum amount required: (1) to make a transfer, or (2) to remain in the
subaccount after a transfer. You may not make a transfer if your policy is in
the grace period and a payment required to avoid lapse is not paid. See "Grace
Period and Lapse," page 41. No charges are currently imposed upon these
transfers. However, the
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<PAGE> 43
Company reserves the right to assess a $25 transfer charge in the future on
policy transfers over 12 during any policy year, and to discontinue telephone
transfers.
After the Right to Return Policy Period, Fund Value may also be transferred
from the subaccounts to the Guaranteed Interest Account. Transfers from the
Guaranteed Interest Account to the subaccounts will only be permitted in the
policy month following a policy anniversary as described in "The Guaranteed
Interest Account," page 54.
RIGHT TO EXCHANGE POLICY
During the first 24 months following the policy date, you may exchange your
policy for a policy where the investment experience is guaranteed. To accomplish
this, the entire amount in the subaccounts of MONY Variable Account L is
transferred to the Guaranteed Interest Account. All future premiums are
allocated to the Guaranteed Interest Account. This serves as an exchange of your
policy for the equivalent of a flexible premium universal life policy. See "The
Guaranteed Interest Account," page 54. No charge is imposed on the transfer when
you exercise the exchange privilege.
OPTION TO OBTAIN PAID-UP INSURANCE
You may change to guaranteed paid-up insurance on a policy anniversary. At
that time, the Specified Amount will be reduced to an amount that the Cash Value
will maintain in effect until the maturity date when applied as a net single
premium. However, the maximum amount of Cash Value applied will not be greater
than necessary to provide an amount at risk equal to the amount at risk
immediately before this option becomes effective. Any Cash Value in excess of
the amount applied will be refunded to you.
The net single premium rates will be based on: (a) the 1980 CSO mortality
tables at the Insured's gender and attained age and class of risk on the later
of the policy date and the most recent increase in coverage under the policy;
and (b) 4.5% interest. On and after the effective date, the Cash Value of the
paid-up coverage will equal the present value of future guaranteed benefits
based on the net single premium rates described above without regard to any
loans.
In order to obtain paid-up insurance, the Company must receive a written
request 30 days prior to the policy anniversary date on which it becomes
effective. The endorsement issued to reflect the change to paid-up insurance
will show the reduced Specified Amount and the guaranteed Cash Value on the
effective date and each policy anniversary thereafter.
Once the paid-up insurance option is effective the following conditions
apply:
(1) It may not be revoked.
(2) The Company will not accept any further premium.
(3) No further optional policy changes may be made.
(4) The policy is no longer subject to the Administrative charge and the
per $1,000 Specified Amount charge.
(5) Any surrender charge, loan balance and loan interest which existed
immediately before the effective date will be set to zero.
(6) Any partial surrender will result in a recalculation of the Specified
Amount and Cash Value.
(7) Any additional benefits provided by rider will terminate.
(8) The death benefit will equal the reduced Specified Amount.
POLICY LOANS
You may borrow money from the Company at any time using your policy as
security for the loan. You take a loan by submitting a proper written request to
the Company's administrative office. You may
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<PAGE> 44
take a loan any time your policy has a positive Cash Value. The maximum amount
you may borrow at any time is 90% of the Cash Value of your policy. (If you
request a loan on a monthly anniversary day, the maximum loan is reduced by the
monthly deduction due on that day.) The Outstanding Debt is the cumulative
amount of outstanding loans and loan interest payable to the Company at any
time.
Loan interest is payable in arrears on each policy anniversary at an annual
rate which varies by the number of years since your policy was issued. For the
first ten policy years, the loan rate is 5.25%. After the tenth policy
anniversary, the loan rate is 4.75%. Interest on the full amount of any
Outstanding Debt is due on the policy anniversary, until the Outstanding Debt is
repaid. If interest is not paid when due, it will be added to the amount of the
Outstanding Debt.
You may repay all or part of the Outstanding Debt at any time while your
policy is in effect. Only payments shown as loan or interest payments will be
treated as such. If a loan repayment is made which exceeds the Outstanding Debt,
the excess will be applied as a scheduled premium payment. The payment will be
subject to the rules on acceptance of premium payments.
When you take a loan, an amount equal to the loan is transferred out of the
subaccounts and the Guaranteed Interest Account into the Loan Account to secure
the loan. Within certain limits, you may specify the amount or the percentage of
the loan amount to be deducted from the subaccounts and the Guaranteed Interest
Account. The request for a loan will not be accepted if (1) you do not specify
the source of the transfer, or (2) if the transfer instructions are incorrect.
On each policy anniversary, an amount equal to the loan interest due and unpaid
for the policy year will be transferred to the Loan Account. The transfer is
made from the subaccounts and the Guaranteed Interest Account on a proportional
basis.
The Fund Value in the Loan Account in excess of the Outstanding Debt will
be allocated to the subaccounts and/or the Guaranteed Interest Account in a
manner determined by us.
The Loan Account is part of the Company's general account. Amounts held in
the Loan Account are credited monthly with an annual rate of interest not less
than 4.5%
Loan repayments release funds from the Loan Account. Unless you request
otherwise, amounts released from the Loan Account will be transferred into the
subaccounts and Guaranteed Interest Account pursuant to your most recent valid
allocation instructions for scheduled premium payments. In addition, Fund Value
in the Loan Account in excess of the outstanding loan is treated differently.
The treatment depends on (1) whether at the time the loan was made, Fund Values
were transferred from the subaccounts or the Guaranteed Interest Account, and
(2) whether or not loan interest due is paid when due or the amount of the
interest is added to the loan ("capitalized"). If the loan is from the
subaccounts and loan interest is paid in cash, this excess offsets the amount
that must be transferred from the subaccounts to the Loan Account on the policy
anniversary. If the loan is from the Guaranteed Interest Account and loan
interest is paid in cash, this excess is allocated back to the Guaranteed
Interest Account. The allocation back is on a monthly basis proportionately to
all interest crediting generations from which the loan was taken.
Amounts held in the Loan Account to secure Outstanding Debt forego the
investment experience of the subaccounts and the current interest rate of the
Guaranteed Interest Account. Thus Outstanding Debt, whether or not repaid, has a
permanent effect on your policy values and may have an effect on the amount and
duration of the death benefit. If not repaid, the Outstanding Debt will be
deducted from the amount of the death benefit upon the death of the insured, or
the value paid upon surrender or maturity.
Outstanding Debt may affect the length of time the policy remains in
effect. After the third policy anniversary (or, in some instances, the third
anniversary following an increase), your policy will lapse when (1) Cash Value
is insufficient to cover the monthly deduction against the policy's Fund Value
on any monthly anniversary day, and (2) the minimum payment required is not made
during the grace period. Moreover, the policy may enter the grace period more
quickly when Outstanding Debt exists, because the Outstanding Debt is not
available to cover the monthly deduction. Additional payments or repayments of a
part of Outstanding Debt may be required to keep the Policy in effect. See
"Grace Period and Lapse," page 41.
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<PAGE> 45
A loan will not be treated as a distribution from your policy and will not
result in taxable income to you unless your policy is a modified endowment
contract. If your policy is a modified endowment contract, a loan will be
treated as a distribution that may give rise to taxable income. If your policy
lapses with an outstanding loan balance there could be adverse federal income
tax consequences depending on the particular facts and circumstances. For
example, if (1) your policy lapses with an outstanding loan balance, and (2) it
does not lapse under a non-forfeiture option, you can have ordinary income to
the extent the outstanding loan exceeds your investment in the policy (i.e.
generally premiums paid less prior non-taxable distributions). For more
information on the tax treatment of loans, see "Federal Income Tax
Considerations," page 47.
FULL SURRENDER
You may fully surrender your policy at any time during the lifetime of the
insured. The amount received for a full surrender is the policy's Fund Value
less (1) any surrender charge, and (2) any Outstanding Debt.
You may surrender your policy by sending a written request together with
the policy to the Company's administrative office. The proceeds will be
determined as of the end of the valuation period during which the request for
surrender is received. You may elect to (1) have the proceeds paid in cash, or
(2) apply the proceeds under a payment plan offered under your policy. See
"Payment Plan Settlement Provisions," page 57. For information on the tax
effects of surrender of a policy, see "Federal Income Tax Consideration," page
47.
PARTIAL SURRENDER
With a partial surrender, you obtain a part of the Cash Value of your
policy without having to surrender the policy in full. You may request a partial
surrender at any time. The partial surrender will take effect on (1) the
business day that we receive your request at our administrative office, or (2)
on the next business day if that day is not a business day. There is currently
no limit on the number of partial surrenders allowed in a policy year.
A partial surrender must be for at least $500 (plus the applicable fee). In
addition, your policy's Cash Value must be at least $500 after the partial
surrender. If you have taken a loan on your policy, the amount of the partial
surrender is limited so that the loan amount, after the partial surrender, is
not greater than 90% of Cash Value.
You may make a partial surrender by submitting a proper written request to
the Company's administrative office. As of the effective date of any partial
surrender, your Fund Value and Cash Value are reduced by the amount surrendered
(plus the applicable fee). You allocate an amount or percent of your Fund Value
in the subaccounts and the Guaranteed Interest Account for your partial
surrender. Allocations by percentage must be in whole percentages and the
minimum percentage is 10% against any subaccount or the Guaranteed Interest
Account. Percentages must total 100%. We will reject an allocation which does
not comply with the rules or if there is not enough Fund Value in a subaccount
or the Guaranteed Interest Account to provide its share of the allocation. If
the insured dies after the request for a partial surrender is sent to the
Company and prior to it being effected, the amount of the partial surrender will
be deducted from the death benefit proceeds. The death benefit proceeds will be
determined taking into account the amount surrendered.
When you make a partial surrender and you selected death benefit Option 1,
the Specified Amount of your policy is decreased by the amount of the partial
surrender (excluding its fee). If you selected death benefit Option 2, a partial
surrender will not change the Specified Amount of your policy. However, if the
death benefit is not equal to the Fund Value times a death benefit percentage,
the death benefit will be reduced by the amount of the partial surrender. Under
either death benefit Option, if the death benefit is based on the Fund Value
times the applicable death benefit percentage, the death benefit may decrease by
an amount greater than the partial surrender. See "Death Benefits under the
Policy," page 30.
There is a fee for each partial surrender of $10.
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For information on the tax treatment of partial surrenders, see "Federal
Income Tax Considerations," page 47.
GRACE PERIOD AND LAPSE
Your policy will remain in effect as long as:
(1) it has a Cash Value greater than zero, and
(2) you make any required additional premium payments during a 61-day
Grace Period.
Special Rule for First Three Policy Years
During the first three policy years (or the first three policy years
following an increase in Specified Amount during that period), your policy and
any riders are guaranteed not to lapse if on each monthly anniversary day
either:
- Your policy's Cash Value is greater than zero, or
- The sum of the premiums paid minus all partial surrenders (excluding
related fees), minus any Outstanding Debt, is greater than or equal to
- The Minimum Monthly Premium times the number of months your policy has
been in effect (or number of months from the most recent increase in
Specified Amount).
Your policy may be at risk of lapse if:
- The insufficiency occurs at any other time, or
- The Minimum Monthly Premium test has not been met during the first
three policy years (as described above).
To avoid lapse if the Cash Value is insufficient to pay the current Monthly
Deduction, you must pay the necessary amount during the grace period. When an
insufficiency occurs, you may also be required to pay any unpaid loan interest
accrued for the policy year. The interest amount will also have to be paid prior
to the end of the grace period.
We will reject any payment if it means your total premium payments will
exceed the maximum permissible premium for your policy's Specified Amount under
the Internal Revenue Code. This may happen when you have Outstanding Debt. In
this event, you could repay enough of the Outstanding Debt to avoid termination.
You may also wish to repay an additional part of the Outstanding Debt to avoid
recurrence of the potential lapse. If premium payments have not exceeded the
maximum permissible premiums, you may wish to make larger or more frequent
premium payments to avoid recurrence of the potential lapse. However, we will
not reject any premium payments necessary to prevent lapse of your policy.
If the Cash Value of your policy will not cover the entire monthly
deduction on a monthly anniversary day, we will deduct the amount that is
available. We will notify you (and any assignee of record) of the payment
necessary to keep your policy in effect. You will then have a grace period of 61
days, from the date the notice was sent, to make the payment. During the first
three policy years (or within three years of an increase in Specified Amount
during that period), if the Cash Value of the policy is less than zero, you must
pay:
(1) The Minimum Monthly Premium not paid, plus
(2) One succeeding Minimum Monthly Premium.
41
<PAGE> 47
After the third policy anniversary (or after three years from the most recent
increase in Specified Amount during that period), the payment required is:
(1) The monthly deduction not paid, plus
(2) Two succeeding monthly deductions plus the amount of the
deductions from premiums for various taxes and the sales charge.
(See "Charges and Deductions -- Deductions from Premiums," page 43). The policy
will remain in effect through the grace period. If you fail to make the
necessary payment within the grace period, your coverage under the policy will
end and your policy will lapse. Necessary premium payments made during the grace
period will be allocated among the subaccounts and the Guaranteed Interest
Account. The allocation is made according to your current scheduled premium
payment allocation instructions. Any monthly deduction due will be charged
proportionately to the subaccounts and the Guaranteed Interest Account. If the
insured dies during the grace period, the death benefit proceeds will equal:
(1) The amount of the death benefit immediately prior to the start of
the grace period, reduced by
(2) Any unpaid monthly deductions and any Outstanding Debt.
Reinstatement
We will reinstate a lapsed policy at any time:
(1) Before the maturity date, and
(2) Within five years after the monthly anniversary day which precedes
the start of the grace period.
To reinstate a lapsed policy we must also receive:
(1) A written application from you;
(2) Evidence of insurability satisfactory to us;
(3) Payment of all monthly deductions that were due and unpaid during
the grace period;
(4) Payment of an amount at least sufficient to keep your policy in
effect for one month after the reinstatement date;
(5) Payment or reinstatement of any debt on the policy anniversary at
the start of the grace period; and
(6) Payment of interest on debt reinstated from the beginning of the
grace period to the end of the grace period at the rate that applies to
policy loans on the date of reinstatement.
When your policy is reinstated, the Fund Value will be equal to the Fund
Value on the date of the lapse subject to the following:
(1) The surrender charge will be equal to the surrender charge that
would have existed had your policy been in effect since the original policy
date.
(2) Any Outstanding Debt on the date of lapse will be reinstated.
(3) Any net premium paid for reinstatement will also be reinstated.
(4) No interest on amounts held in our Loan Account to secure
Outstanding Debt will be paid or credited between lapse and reinstatement.
Reinstatement will be effective as of the monthly anniversary day on or
preceding the date of approval by us. At that time, the Fund Value minus, if
applicable, Outstanding Debt will be allocated among the subaccounts and the
Guaranteed Interest Account pursuant to your most recent scheduled premium
payment allocation instructions.
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<PAGE> 48
CHARGES AND DEDUCTIONS
The following chart is intended to provide an overview of the current
charges and deductions under the policy. Please see the discussion of each item
in this prospectus and in the policy for further details.
- --------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS
<TABLE>
<CAPTION>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
Sales Charge -- Varies based on Specified Specified Amounts less than $500,000 -- 4%
Amount plus Term Life Term Specified Amounts of $500,000 or more -- 3%
Rider amount in effect. It
is a % of Premium paid.
- -----------------------------------------------------------------------------------------------
Tax Charge State and local -- 0.8%
Federal -- 1.5%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Mortality & Expense Risk Charge -- Maximum .65% of subaccount value (0.001781% daily)
Annual Rate
</TABLE>
- --------------------------------------------------------------------------------
DEDUCTIONS FROM FUND VALUE
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------
Cost of Insurance Charge Current cost of insurance rate x net amount
at risk at the beginning of the policy
month
- ----------------------------------------------------------------------------------------------
Administrative Charge -- monthly $5.00
- ----------------------------------------------------------------------------------------------
Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the
Based on issue age, gender and smoking first 15 policy years (or for 15 years from
Status. the date of any increase in Specified
Amount)
- ----------------------------------------------------------------------------------------------
Optional Insurance Benefits Charge As applicable.
Monthly Deduction for any other Optional
Insurance Benefits added by rider.
- ----------------------------------------------------------------------------------------------
Transaction and Other Charges
- Partial Surrender Fee $10
- Transfer of Fund Value $25 maximum per transfer over 12, currently
(at Company's Option) $0
- ----------------------------------------------------------------------------------------------
Surrender Charge See discussion of Surrender Charge for
Grades from 80% to 0 over 15 years based on grading schedule.
a schedule. Factors per $1,000 of Specified
Amount vary based on issue age, gender, and
underwriting class.
- ----------------------------------------------------------------------------------------------
</TABLE>
The following provides additional details of the deductions from premium
payments under a policy prior to allocating net premium payments to the
subaccounts of MONY Variable Account L or to the Guaranteed Interest Account and
of the deductions from MONY Variable Account L and from the policy's Fund Value.
DEDUCTIONS FROM PREMIUMS
Deductions are made from each premium payment prior to applying the net
premium payment to the Fund Value.
43
<PAGE> 49
Sales Charge --
This charge varies based on the total of the Specified Amount plus the Term
Life Term Insurance Rider amount in effect on the policy date. The charge is a
percent of each premium paid.
- Specified Amount plus any Term Life Term Insurance amount in force less
than $500,000 -- 4%
- Specified Amount plus any Term Life Term Insurance amount in force of
$500,000 or more -- 3%
You should refer to your policy to determine your Specified Amount and the
amount of any Term Life Term Insurance in force.
The sales charge compensates us for the cost of distributing the policies.
This charge is not expected to be enough to cover sales and distribution
expenses for the policies. To the extent that sales and distribution expenses
exceed sales charges, amounts derived from surrender charges will be used.
Expenses in excess of the sales and surrender charges may be recovered from
other charges, including amounts indirectly derived from the charge for
mortality and expense risks and mortality gains.
Tax Charge --
State and local premium tax -- currently 0.8%
Federal tax for deferred acquisition costs of the Company -- currently 1.5%
All states levy taxes on life insurance premium payments. For policyholders
resident in the State of New York, the Company currently deducts an amount equal
to 0.8% of each premium payment to pay applicable premium taxes. These taxes
vary from state to state and may vary from jurisdiction to jurisdiction within a
state. Currently, these taxes range from 0% to 4%. The 0.8% deduction is the
actual premium tax imposed by the State of New York. We do not expect to profit
from this charge.
The 1.5% current charge against each premium covers our estimated cost for
the Federal income tax treatment of deferred acquisition costs. This is
determined solely by the amount of life insurance premiums received. We believe
this charge is reasonable in relation to our increased federal tax burden under
IRC Section 848 resulting from the receipt of premium payments. No charge will
be deducted where premiums received from you are not subject to this tax.
We reserve the right to increase or decrease the charge for taxes due to
any change in tax law or due to any change in the cost to us.
DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
A charge is deducted daily from each subaccount of MONY Variable Account L
for the mortality and expense risks assumed by the Company.
Mortality and Expense Risk Charge --
Maximum of 0.001781% of the amount in the subaccount, which is equivalent
to an annual rate of 0.65% of subaccount value.
This charge compensates us for assuming mortality and expense risks under
the policies. The mortality risk assumed is that insureds, as a group, may live
for a shorter period of time than estimated. Therefore, the cost of insurance
charges specified in the policy will not be enough to meet our actual claims. We
assume an expense risk that other expenses incurred in issuing and administering
the policies and operating MONY Variable Account L will be greater than the
amount estimated when setting the charges for these expenses. We will realize a
profit from this fee to the extent it is not needed to provide benefits and pay
expenses under the policies. We may use this profit for other purposes. These
purposes may include any distribution expenses not covered by the sales charge
or surrender charge.
This charge is not assessed against the amount of the policy Fund Value
that is allocated to the Guaranteed Interest Account, nor to amounts in the Loan
Account.
44
<PAGE> 50
Deductions from Fund Value --
A charge called the Monthly Deduction is deducted from the Fund Value on
each monthly anniversary day. The Monthly Deduction consists of the following
items:
Cost of Insurance --
This charge compensates us for the anticipated cost of paying death
benefits in excess of Fund Value to insureds' beneficiaries. The amount of the
charge is equal to a current cost of insurance rate multiplied by the net amount
at risk under the policy at the beginning of each policy month. Here, net amount
at risk equals the death benefit payable at the beginning of the policy month
less the Fund Value at that time.
The policy contains guaranteed cost of insurance rates that may not be
increased. The guaranteed rates are based on the 1980 Commissioners Standard
Ordinary Smoker and Nonsmoker Mortality Tables. (For issue ages under 18, no
smoker/nonsmoker adjustment is made until attained age 15. Where unisex cost of
insurance rates apply, the 1980 Commissioners Ordinary Smoker and Nonsmoker
Mortality Table B applies.) These rates are based on the age and underwriting
class of the insured. They are also based on the gender of the insured, but
unisex rates are used where appropriate under applicable law. Unisex laws
include the State of Montana and in policies purchased by employers and employee
organizations in connection with employment related insurance or benefit
programs. As of the date of this prospectus, we charge "current rates" that are
lower (i.e., less expensive) than the guaranteed rates. We may change current
rates in the future. Like the guaranteed rates, the current rates also vary with
the age, gender, smoking status, and underwriting class of the insured. In
addition, they also vary with the policy duration. The cost of insurance rate
generally increases with the age of the insured.
If there have been increases in the Specified Amount, then for purposes of
calculating the cost of insurance charge, the Fund Value will first be applied
to the initial Specified Amount. If the Fund Value exceeds the initial Specified
Amount, the excess will then be applied to any increase in Specified Amount in
the order of the increases. If the death benefit equals the Fund Value
multiplied by the applicable death benefit percentage, any increase in Fund
Value will cause an automatic increase in the death benefit. The underwriting
class and duration for such increase will be the same as that used for the most
recent increase in Specified Amount (that has not been eliminated through a
later decrease in Specified Amount).
Administrative Charge -- $5.00 per month
This charge reimburses us for expenses associated with administration and
maintenance of the policies. The charge is guaranteed never to exceed $5.00. We
do not expect to profit from this charge.
Monthly per $1,000
Specified Amount Charge -- This charge applies for the first 15 years
following the issuance of the policy or an increase
in the Specified Amount. The charge is made per
$1,000 of Specified Amount based on issue age,
gender, and smoking status. The monthly per $1,000
factors are shown in Appendix B.
Optional Insurance Benefits
Charge -- A monthly deduction for any other optional
insurance benefits added to the policy by rider.
Surrender Charge -- The Company will assess a surrender charge against
Fund Value upon a full surrender of the policy. The
surrender charge is based on a factor per $1,000 of
initial Specified Amount (or upon an increase in
Specified Amount) and grades from 80% to zero over
15 years based on a schedule. The factors per
$1,000 vary by issue age, gender, and underwriting
class. The grading percentages (as shown below)
vary based on issue age and number of full years
since the Policy was issued (or since the increase
in Specified Amount).
45
<PAGE> 51
<TABLE>
<CAPTION>
PERCENT FOR PERCENT FOR
GRADING PERCENTAGES ISSUE AGES ISSUE AGES
POLICY YEARS 0-75 76-85
- ------------------- ----------- -----------
<S> <C> <C>
1-3 80% 80%
4 80 70
5 80 60
6 80 50
7 80 40
8 70 30
9 60 20
10 50 10
11 40 0
12 30 0
13 20 0
14 10 0
15+ 0 0
</TABLE>
- ---------------
Note: Issue ages for policies issued to Qualified Plans are limited to ages
18-70
The surrender charge is a contingent deferred load. It is a contingent load
because it is assessed only if the policy is surrendered or if the policy
lapses. It is a deferred load because it is not deducted from the premiums paid.
The purpose of the surrender charge is to reimburse us for some of the expenses
of distributing the policies.
Example: If a male insured age 35 purchases a policy with a Specified
Amount of $100,000, the per $1,000 of initial Specified Amount
surrender charge factor would be $7.25 (Preferred, nonsmoker).
The maximum surrender charge during the first seven policy years
would be 80% of (100 x 7.25) or $580.00.
The maximum surrender charge per $1,000 of initial Specified Amount factor
would be $64.00 based upon the assumptions described above and if the policy
were purchased by a male insured age 85, standard smoker.
Effect of Changes in Specified Amount on the Surrender Charge --
The surrender charge will increase when a new coverage segment of Specified
Amount is created due to a requested increase in coverage. The surrender charge
related to the increase will be computed in the same manner as the surrender
charge for the original Specified Amount. It will reduce over the 15-year period
following the increase. The new surrender charge for the policy will equal:
(1) The remaining part of the surrender charge for the original
Specified Amount, plus
(2) The surrender charge related to the increase.
Decreases in Specified Amount have no effect on surrender charges.
Transaction and Other Charges --
Partial Surrender Fee -- $10
Transfer of Fund Value -- $25 (at option of the Company)
The partial surrender fee is guaranteed not to exceed $10. Currently, we do
not charge for transfers of Fund Value between the subaccounts. However, we
reserve the right to assess a $25 charge on transfers over 12 during any policy
year. This would include telephone transfers, if we permit them.
46
<PAGE> 52
We may charge the subaccounts for federal income taxes that are incurred by
us and are attributable to MONY Variable Account L and its subaccounts. No such
charge is currently assessed. See "Charge for Company Income Taxes," page 51.
We will bear the direct operating expenses of MONY Variable Account L. The
subaccounts purchase shares of the corresponding portfolio of the underlying
Fund. The Fund's expenses are not fixed or specified under the terms of the
policy.
GUARANTEE OF CERTAIN CHARGES
We guarantee that the following charges will not increase:
(1) Mortality and expense risk charge.
(2) Administrative charge.
(3) Per $1,000 Specified Amount charge.
(4) Sales charge.
(5) Guaranteed cost of insurance rates.
(6) Surrender charge.
(7) Partial surrender fee.
Any changes in the current cost of insurance charges or charges for
optional insurance benefits will be made based on the class of the insured.
Changes will be based on changes in:
(1) Future expectations with respect to investment earnings,
(2) Mortality,
(3) Length of time policies will remain in effect,
(4) Expenses, and
(5) Taxes.
In no event will they exceed the guaranteed rates defined in the policy.
OTHER INFORMATION
FEDERAL INCOME TAX CONSIDERATIONS
The following provides a general description of the federal income tax
considerations relating to the policy. This discussion is based upon our
understanding of the present federal income tax laws as the Internal Revenue
Service ("IRS") currently interprets them. This discussion is not intended as
tax advice. Tax laws are very complex and tax results will vary according to
your individual circumstances. A person considering the purchase of the policy
may need tax advice. It should be understood that these comments on federal
income tax consequences are not an exhaustive discussion of all tax questions
that might arise under the policy. Special rules that are not discussed here may
apply in certain situations. We make no representation as to the likelihood of
continuation of federal income tax or estate or gift tax laws or of the current
interpretations of the IRS or the courts. Future legislation may adversely
affect the tax treatment of life insurance policies or other tax rules that we
describe here or that relate directly or indirectly to life insurance policies.
Our comments do not take into account any state or local income tax
considerations that may be involved in the purchase of the policy.
47
<PAGE> 53
Definition of Life Insurance
Under section 7702 of the Internal Revenue Code (the "Code"), a policy will
be treated as a life insurance policy for federal tax purposes if one of two
alternate tests are met. These tests are:
(1) "Cash Value Accumulation Test"
(2) "Guideline Premium/Cash Value Corridor Test"
Your policy is tested under the Guideline Premium/Cash Value Corridor Test.
This test provides for, among other things:
(1) A maximum allowable premium per thousand dollars of death benefit,
known as the "guideline annual premium," and
(2) A minimum ongoing "corridor" of death benefit in relation to the
Fund Value of the policy, known as the "death benefit percentage."
See Appendix A, for a table of the Guideline Premium/Cash Value Corridor Test
factors.
We believe that the policy meets this statutory definition of life
insurance and hence will receive federal income tax treatment consistent with
that of fixed life insurance. Thus, the death benefit should be excludable from
the gross income of the beneficiary (whether the beneficiary is a corporation,
individual or other entity) under Section 101(a)(1) of the Code for purposes of
the regular federal income tax. You generally should not be considered to be in
constructive receipt of the cash values under the policy until a full surrender,
maturity of the policy, or a partial surrender. In addition, certain policy
loans may be taxable in the case of policies that are modified endowment
contracts. Prospective policy owners that intend to use policies to fund
deferred compensation arrangements for their employees are urged to consult
their tax advisors with respect to the tax consequences of such arrangements.
Prospective corporate owners should consult their tax advisors about the
treatment of life insurance in their particular circumstances for purposes of
the alternative minimum tax applicable to corporations.
Tax Treatment of Policies
The Technical and Miscellaneous Revenue Act of 1988 established a new class
of life insurance contracts referred to as modified endowment contracts. A life
insurance contract becomes a "modified endowment contract" if, at any time
during the first seven contract years, the sum of actual premiums paid exceeds
the sum of the "seven-pay premium." Generally, the "seven-pay premium" is the
level annual premium, which if paid for each of the first seven years, will
fully pay for all future death and endowment benefits under a contract.
Example: Seven-pay premium = $1,000
Maximum premium to avoid "modified endowment" treatment =
First year -- $1,000
Through first two years -- $2,000
Through first three years -- $3,000 etc.
Under this test, a policy may or may not be a modified endowment contract. The
outcome depends on the amount of premiums paid during each of the policy's first
seven contract years. Changes in benefits may require testing to determine if
the policy is to be classified as a modified endowment contract. A modified
endowment contract is treated differently for tax purposes then a conventional
life insurance contract.
Conventional Life Insurance Policies
If a policy is not a modified endowment contract distributions are treated
as follows. Upon a full surrender or maturity of a policy for its Cash Value,
the excess if any, of the Cash Value plus Outstanding Debt minus the cost basis
under a policy will be treated as ordinary income for federal income tax
purposes. A policy's cost basis will usually equal the premiums paid less any
premiums previously recovered through partial surrenders. Under Section 7702 of
the Code, special rules apply to determine
48
<PAGE> 54
whether part or all the cash received through partial surrenders in the first 15
policy years is paid out of the income of the policy and therefore subject to
income tax. Cash distributed to a policy owner on partial surrenders occurring
more than 15 years after the policy date will be taxable as ordinary income to
the policy owner to the extent that it exceeds the cost basis under a policy.
We believe that loans received under policies that are not modified
endowment contracts will be treated as indebtedness of the owner. Thus, no part
of any loan under the policy will constitute income to the owner until the
policy matures, unless the policy is surrendered before it matures. Interest
paid (or accrued by an accrual basis taxpayer) on a loan under a policy that is
not a modified endowment contract may be deductible. Deductibility will be
subject to several limitations, depending upon (1) the use to which the proceeds
are put and (2) the tax rules applicable to the policy owner. For example, an
individual who uses the proceeds of a loan for business or investment purposes
may be able to deduct all or part of the interest expense. Generally, if an
individual uses the policy loan for personal purposes, the interest expense is
not deductible. The deductibility of loan interest (whether incurred under a
policy loan or other indebtedness) also may be subject to other limitations.
For example, the interest may be deductible to the extent that the interest
is attributable to the first $50,000 of the Outstanding Debt where:
- The interest is paid (or accrued by an accrual basis taxpayer) on a loan
under a policy, and
- The policy covers the life of an officer, employee, or person financially
interested in the trade or business of the policy owners.
Other tax law provisions may limit the deduction of interest payable on
loan proceeds that are used to purchase or carry certain life insurance
policies.
Modified Endowment Contracts
Pre-death distributions from modified endowment contracts may result in
taxable income. Upon full surrender or maturity of the policy, the policy owner
would recognize ordinary income for federal income tax purposes. Ordinary income
will equal the amount by which the Cash Value plus Outstanding Debt exceeds the
investment in the policy. (The investment in the policy is usually the premiums
paid plus certain pre-death distributions that were taxable less any premiums
previously recovered that were excludable from gross income.) Upon partial
surrenders and policy loans the policy owner would recognize ordinary income to
the extent allocable to income (which includes all previously non-taxed gains)
on the policy. The amount allocated to income is the amount by which the Fund
Value of the policy exceeds investment in the policy immediately before
distribution. The tax law provides for aggregation of two or more policies
classified as modified endowment contracts if:
(1) The policies are purchased from any one insurance company
(including the Company), and
(2) The purchases take place during a calendar year.
The policies are aggregated for the purpose of determining the part of the
pre-death distributions allocable to income on the policies and the part
allocable to investment in the policies.
Amounts received under a modified endowment contract that are included in
gross income are subject to an additional tax. This additional tax is equal to
10% of the amount included in gross income, unless an exception applies. The 10%
additional tax does not apply to any amount received:
(1) When the taxpayer is at least 59 1/2 years old;
(2) Which is attributable to the taxpayer becoming disabled; or
(3) Which is part of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy)
of the taxpayer or the joint lives (or joint life expectancies) of the
taxpayer and his or her beneficiary.
49
<PAGE> 55
A contract may not be a modified endowment contract originally but may
become one later. Treasury Department regulations, yet to be prescribed, cover
pre-death distributions received in anticipation of the policy's failure to meet
the seven-pay premium test. These distributions are to be treated as pre-death
distributions from a modified endowment contract (and, therefore, are to be
taxed as described above). This treatment is applied even though the policy was
not yet a modified endowment contract. The Code defines a distribution in
anticipation of failing the test as one made within two years of the policy
being classified as a modified endowment contract.
It is unclear whether interest paid (or accrued by an accrual basis
taxpayer) on Outstanding Debt with respect to a modified endowment contract
constitutes interest for federal income tax purposes. If it does constitute
interest, its deductibility will be subject to the same limitations as
conventional life insurance contracts (see "Conventional Life Insurance
Policies," page 48.)
Reasonableness Requirement for Charges
The tax law also deals with allowable mortality costs and other expenses
used in the calculations to determine whether a contract qualifies as life
insurance for income tax purposes. For policies entered into on or after October
21, 1988, the calculations must be based upon, (1) reasonable mortality charges,
and (2) other charges reasonably expected to be paid. The Treasury Department is
expected to declare regulations governing reasonableness standards for mortality
charges. We believe our mortality costs and other expenses used in these
calculations meet the current requirements. It is possible that future
regulations will contain standards that would require us to modify our mortality
charges for these calculations. We reserve the right to make modifications to
retain the policy's qualification as life insurance for federal income tax
purposes.
Pension and Profit Sharing Plans
Policies purchased by a fund, which is part of a pension or profit sharing
plan (under Sections 401(a) or 403 of the Code), will be treated differently
from that described above. For participants in these plans, the current cost of
insurance for the net amount at risk is treated as a "current fringe benefit."
The current cost of insurance must be included annually in the plan
participant's gross income. This cost (referred to as the "P.S. 58" cost) is
reported to the participant annually. The excess of the death benefit over the
policy Fund Value will not be subject to federal income tax if:
(1) The plan participant dies while covered by the plan, and
(2) The policy proceeds are paid to the participant's beneficiary.
However, the policy Fund Value will generally be taxable to the extent it
exceeds the sum of (1) $5,000 plus (2) the participant's cost basis in the
policy. The participant's cost basis will generally include the costs of
insurance previously reported as income to the participant. Special rules may
apply if the participant has borrowed from his or her policy or was an
owner-employee under the plan.
There are limits on the amounts of life insurance that may be purchased on
behalf of a participant in a pension or profit sharing plan. Complex rules, in
addition to those discussed above, apply whenever life insurance is purchased by
a tax-qualified plan.
Other Employee Benefit Programs
Complex rules may apply when a policy is held by an employer or a trust, or
acquired by an employee, to provide for employee benefits. These policy owners
also must consider whether the policy was applied for by or issued to a person
having an insurable interest under applicable state law. The lack of insurable
interest may, among other things, affect the qualification of the policy as life
insurance for federal income tax purposes. It may also affect the right of the
beneficiary to death benefits. Employers and employer-created trusts may be
subject to reporting, disclosure, and fiduciary obligations under the Employee
Retirement Income Security Act of 1974 (ERISA). The policy owner's legal advisor
should be consulted to address these issues.
50
<PAGE> 56
Diversification Requirements
To comply with regulations under Section 817(h) of the Code, each portfolio
is required to diversify its investments. Generally, on the last day of each
quarter of a calendar year,
(1) No more than 55% of the value of the portfolio's assets can be
represented by any one investment,
(2) No more than 70% can be represented by any two investments,
(3) No more than 80% can be represented by any three investments, and
(4) No more than 90% can be represented by any four investments.
Securities of a single issuer generally are treated for purposes of Section
817(h) as a single investment. However, for this purpose, each U.S. Government
agency or instrumentality is treated as a separate issuer. Any security issued,
guaranteed, or insured (to the extent guaranteed and insured) by the U.S. or by
an agency or instrumentality of the U.S. is treated as a security issued by the
U.S. Government or its agency or instrumentality, as applicable.
Currently, for federal income tax purposes, the portfolio shares underlying
the subaccounts available under the policies are owned by the Company and not by
you or any beneficiary. However, no representation is or can be made regarding
the likelihood of the continuation of current interpretations by the IRS.
Other
Federal estate and gift and state and local estate, inheritance, and other
tax consequences of ownership or receipt of policy proceeds depend on the
jurisdiction and the circumstances of each owner or beneficiary.
For complete information on federal, state, local and other tax
considerations, a qualified tax advisor should be consulted.
THE COMPANY DOES NOT MAKE ANY GUARANTEE REGARDING
THE TAX STATUS OF ANY POLICY
CHARGE FOR COMPANY INCOME TAXES
For federal income tax purposes, variable life insurance generally is
treated in a manner consistent with fixed life insurance. The Company will
review the question of a charge to the Variable Account for the Company's
federal income taxes periodically. A charge may be made for any federal income
taxes incurred by the Company that are attributable to the Variable Account.
This might become necessary if:
(1) The tax treatment of the Company is ultimately determined to be
other than what the Company currently believes it to be,
(2) There are changes made in the federal income tax treatment of
variable life insurance at the insurance company level, or
(3) There is a change in the Company's tax status.
Under current laws, the Company may incur state and local taxes (in
addition to premium taxes imposed by the states) in several states. At present,
these taxes are not significant. If there is a material change in applicable
state or local tax laws or in the cost to the Company, the Company reserves the
right to charge the Account for any such taxes attributable to the Account.
VOTING OF FUND SHARES
Based on its view of present applicable law, the Company will exercise
voting rights attributable to the shares of each portfolio of the Funds held in
the subaccounts. We will exercise such rights at any regular and special
meetings of the shareholders of the Funds on matters requiring shareholder
voting
51
<PAGE> 57
under the Investment Company Act of 1940. Our exercise of these voting rights
will be based on instructions received from persons having the voting interest
in corresponding subaccounts of MONY Variable Account L. We may elect to vote
the shares of the Funds in our own right if:
(1) The Investment Company Act of 1940 or any regulations thereunder
is amended, or
(2) The present interpretation of the Act should change, and
(3) As a result we determine that it is permitted to vote the shares
of the Funds in our right.
The person having the voting interest under a policy is the policy owner.
Unless otherwise required by applicable law, a policy owner will have the right
to instruct for the number of votes of any portfolio determined by dividing his
or her Fund Value in the subaccount that corresponds to the portfolio by $100.
Fractional votes will be counted. The number policy owner votes will be
determined as of the date set by the Company. However, such date will not be
more than 90 days prior to the date established by the corresponding Fund for
determining shareholders eligible to vote at that Fund's meeting. If required by
the Securities and Exchange Commission, the Company reserves the right to
determine the voting rights in a different fashion. Voting instructions may be
cast in person or by proxy.
If the Company does not receive voting instructions from the policy owner
on time, the Company will vote his or her votes. The Company will vote in the
same proportion as voting instructions received on time for all policies
participating in that subaccount. The Company will also exercise the voting
rights from assets in each subaccount, which are not otherwise attributable to
policy owners. These votes will be exercised in the same proportion as the
voting instructions that are received on time for all policies participating in
that subaccount. Generally, the Company will vote any voting rights attributable
to shares of portfolios of the Funds held in its General Account. These votes
will be exercised in the same proportion as the aggregate votes cast with
respect to shares of portfolios of the Funds held by MONY Variable Account L and
other separate accounts of the Company.
DISREGARD OF VOTING INSTRUCTIONS
The Company may disregard voting instructions when required by state
insurance regulatory authorities, if, (1) the instructions require that voting
rights be exercised so as to cause a change in the subclassification or
investment objective of a Portfolio, or (2) to approve or disapprove an
investment advisory contract. In addition, the Company itself may disregard
voting instructions of changes initiated by policy owners in the investment
policy or the investment adviser (or portfolio manager) of a portfolio. The
Company's disapproval of such change must be reasonable and must be based on a
good faith determination that the change would be contrary to state law or
otherwise inappropriate, considering the portfolio's objectives and purpose, and
considering the effect the change would have on the Company. If the Company does
disregard voting instructions; a summary of that action and the reasons for such
action will be included in the next report to policy owners.
REPORT TO POLICY OWNERS
A statement will be sent at least annually to each policy owner setting
forth:
(1) A summary of the transactions which occurred since the last
statement, and
(2) Indicating the death benefit, Specified Amount, Fund Value, Cash
Value, and any Outstanding Debt.
In addition, the statement will indicate the allocation of Fund Value among
the Guaranteed Interest Account, the Loan Account and the subaccounts, and any
other information required by law. Confirmations will be sent out upon premium
payments, transfers, loans, loan repayments, withdrawals, and surrenders.
Each policy owner will also receive an annual and a semiannual report
containing financial statements for MONY Variable Account L and the Funds. The
Funds' statement will include a list of the portfolio
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<PAGE> 58
securities of the Funds, as required by the Investment Company Act of 1940,
and/or such other reports as may be required by federal securities laws.
SUBSTITUTION OF INVESTMENTS AND RIGHT TO CHANGE OPERATIONS
The Company reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for the
securities that are held by or may be purchased by MONY Variable Account L or
any of its other separate accounts. The Company may substitute shares of another
portfolio of the Funds or of a different fund for shares already purchased, or
to be purchased in the future under the policies if:
(1) Shares of any or all of the portfolios of the Funds should no
longer be available for investment or,
(2) In the judgment of the Company's management, further investment in
shares of any or all portfolios of the Funds should become inappropriate in
view of the purposes of the policies.
Where required, the Company will not substitute any shares attributable to
a policy owner's interest in MONY Variable Account L without notice, policy
owner approval, or prior approval of the Securities and Exchange Commission. The
Company will also follow the filing or other procedures established by
applicable state insurance regulators. Applicable state insurance regulators
include the Superintendent of Insurance of the State of New York.
The Company also reserves the right to establish additional subaccounts of
MONY Variable Account L. Each additional subaccount would invest in (1) a new
portfolio of the Funds, or (2) in shares of another investment company, a
portfolio thereof, or (3) another suitable investment vehicle, with a specified
investment objective. New subaccounts may be established when, in the sole
discretion of the Company, marketing needs or investment conditions warrant, and
any new Subaccounts will be made available to existing Policy Owners on a basis
to be determined by the Company. The Company may also eliminate one or more
subaccounts if, in its sole discretion, marketing, tax, or investment conditions
so warrant.
If a substitution or change is made, the Company may make changes in this
and other policies as may be necessary or appropriate to reflect such
substitution or change. If the Company considers it to be in the best interests
of persons having voting rights under the policies, MONY Variable Account L may:
(1) Be operated as a management investment company under the
Investment Company Act of 1940 or any other form permitted by law,
(2) Be deregistered under that Act if such registration is no longer
required, or
(3) Be combined with other separate accounts of the Company or an
affiliate thereof.
Subject to compliance with applicable law, the Company also may combine one or
more Subaccounts and may establish a committee, board, or other group to manage
one or more aspects of the operation of MONY Variable Account L.
CHANGES TO COMPLY WITH LAW
The Company reserves the right to make any change without consent of policy
owners to the provisions of the policy to comply with, or give policy owners the
benefit of, any Federal or State statute, rule, or regulation. Federal and State
laws include but not limited to requirements for life insurance contracts under
the Internal Revenue Code, and regulations of the United States Treasury
Department or any state.
PERFORMANCE INFORMATION
We may advertise the performance of the MONY Variable Account L
subaccounts, We will also report performance to policy owners and may make
performance information available to prospective purchasers. This information
will be presented in compliance with applicable law.
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<PAGE> 59
Performance information may show the change in a policy owner's Fund Value
in one or more subaccounts, or as a change in a policy owner's death benefit.
Performance information may be expressed as a change in a policy owner's Fund
Value over time or in terms of the average annual compounded rate of return on
the policy owner's Fund Value. Such performance is based upon a hypothetical
policy in which premiums have been allocated to a particular subaccount of MONY
Variable Account L over certain periods of time that will include one, five and
ten years, or from the commencement of operation of the subaccount of MONY
Variable Account L if less than one, five, or ten years. Any such quotation may
reflect the deduction of all applicable charges to the policy including premium
load, the cost of insurance, the administrative charge, and the mortality and
expense risk charge. The quotation may also reflect the deduction of the
surrender charge, if applicable, by assuming surrender at the end of the
particular period. However, other quotations may simultaneously be given that do
not assume surrender and do not take into account deduction of the surrender
charge.
Performance information for MONY Variable Account L may be compared in
advertisements, sales literature, and reports to policy owners to:
(1) Other variable life separate accounts or investment products
tracked by research firms, ratings services, companies, publications, or
persons who rank separate accounts or investment products on overall
performance or other criteria, and
(2) The Consumer Price Index (measure for inflation) to assess the
real rate of return from the purchase of a policy.
Reports and promotional literature may also contain the Company's rating or a
rating of the Company's claim paying ability as determined by firms that analyze
and rate insurance companies and by nationally recognized statistical rating
organizations.
Performance information for any subaccount of MONY Variable Account L
reflects only the performance of a hypothetical policy whose Fund Value is
allocated to MONY Variable Account L during a particular time period on which
the calculations are based. Performance information should be considered in
light of the investment objectives and policies, characteristics and quality of
the portfolios of the Funds in which MONY Variable Account L invests. The market
conditions during the given period of time should not be considered as a
representation of what may be achieved in the future.
THE GUARANTEED INTEREST ACCOUNT
You may allocate all or a portion of your net premiums and transfer Fund
Value to the Guaranteed Interest Account of the Company. Amounts allocated to
the Guaranteed Interest Account become part of the "General Account" of the
Company, which supports insurance and annuity obligations. The amounts allocated
to the General Account of the Company are subject to the liabilities arising
from the business the Company conducts. Descriptions of the Guaranteed Interest
Account are included in this Prospectus for the convenience of the purchaser.
The Guaranteed Interest Account and the General Account of the Company have not
been registered under the Securities Act of 1933 and the Investment Company Act
of 1940. Accordingly, neither the Guaranteed Interest Account nor any interest
therein is generally subject to the provisions of these Acts and, as a result,
the staff of the Securities and Exchange Commission has not reviewed the
disclosure in this prospectus relating to the Guaranteed Interest Account.
Disclosures regarding the Guaranteed Interest 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 the prospectus.
For more details regarding the Guaranteed Interest Account, see the policy.
GENERAL DESCRIPTION
Amounts allocated to the Guaranteed Interest Account become part of the
General Account of Company which consists of all assets owned by the Company
other than those in MONY Variable Account L and other separate accounts of the
Company. Subject to applicable law, the Company has sole discretion over the
investment of the assets of its General Account.
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You may elect to allocate net premiums to the Guaranteed Interest Account,
MONY Variable Account L, or both. You may also transfer Fund Value from the
subaccounts of MONY Variable Account L to the Guaranteed Interest Account or
from the Guaranteed Interest Account to the subaccounts. The Company guarantees
that the Fund Value in the Guaranteed Interest Account will be credited with a
minimum interest rate of 0.0121% daily, compounded daily, for a minimum
effective annual rate of 4.5%. Such interest will be paid regardless of the
actual investment experience of the Guaranteed Interest Account. In addition,
Company may in its sole discretion declare current interest in excess of the
4.5% annual rate. (The portion of a Policy Owner's Fund Value that has been used
to secure Outstanding Debt will be credited with a guaranteed interest rate of
0.0121% daily, compounded daily, for a minimum effective annual rate of 4.5%.)
The Company bears the full investment risk for the Fund Value allocated to
the Guaranteed Interest Account.
DEATH BENEFIT
The death benefit under the policy will be determined in the same fashion
if you have Fund Value in the Guaranteed Interest Account or Fund Value in the
subaccounts. The death benefit under Option 1 will be equal to the Specified
Amount of the Policy or, if greater, Fund Value on the date of death multiplied
by a death benefit percentage. Under Option 2, the Death Benefit will be equal
to the Specified Amount of the Policy plus the Fund Value or, if greater, Fund
Value on the date of death multiplied by a death benefit percentage. See "Death
Benefits under the Policy," page 30.
POLICY CHARGES
Deductions from premium, monthly deductions from the Fund Value, and Fund
charges will be the same if you allocate net premiums or transfer Fund Value to
the Guaranteed Interest Account or allocate net premiums to the subaccounts.
These charges include the sales and tax charges; the charges for the cost of
insurance, administrative charge, per $1,000 of Specified Amount charge, the
charge for any optional insurance benefits added by Rider, and the surrender
charge. Fees for partial surrenders and, if applicable, transfer charges, will
also be deducted from the Guaranteed Interest Account.
You will not directly or indirectly pay charges applicable to the
portfolios, including the operating expenses of the portfolios, and the
investment advisory fee charged by the portfolio managers if your Fund Value is
allocated to the Guaranteed Interest Account. Likewise, the mortality and
expense risk charge applicable to the Fund Value allocated to the subaccounts is
not deducted from Fund Value allocated to the Guaranteed Interest Account. Any
amounts that the Company pays for income taxes allocable to the subaccounts will
not be charged against the Guaranteed Interest Account. However, it is important
to remember that you will not participate in the investment experience of the
subaccounts to the extent that Fund Values are allocated to the Guaranteed
Interest Account.
TRANSFERS
Amounts may be transferred after the Right to Return Policy Period from the
subaccounts to the Guaranteed Interest Account and from the Guaranteed Interest
Account to the subaccounts, subject to the following limitations.
- Transfers to the Guaranteed Interest Account may be made at any time and
in any amount.
- Transfers from the Guaranteed Interest Account to the subaccounts are
limited to:
- one in any policy year, and
- the period which begins on the policy anniversary and which ends 30
days after the policy anniversary.
If the transfer request is received on the policy anniversary, it will be
processed as of the policy anniversary. If the transfer request is received
within 30 days after the policy anniversary, the transfer will
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be effective as of the close of business on the day received if it is a Business
Day. If it is not a Business Day, then at the close of business on the next day
which is a Business Day. Any request received within 10 days before the policy
anniversary will be considered received on the policy anniversary. Any transfer
requests received at other times will not be honored, and will be returned to
the policy owner.
Currently there is no charge imposed upon transfers; however, the Company
reserves the right to assess such a charge in the future on transfers over 12
during any policy year.
SURRENDERS AND POLICY LOANS
You may also make full surrenders and partial surrenders from the
Guaranteed Interest Account to the same extent as if you had allocated premiums
and cash values to the subaccounts. See "Full Surrender," page 40 and "Partial
Surrender", page 40. Transfers and surrenders payable from the Guaranteed
Interest Account, and the payment of policy loans allocated to the Guaranteed
Interest Account, may be delayed for up to six months. However, the Company will
not delay payment of surrenders or loans, the proceeds of which will be used to
pay premiums on the policy.
MORE ABOUT THE POLICY
OWNERSHIP
The policy owner is the individual named as such in the application or in
any later change shown in the Company's records. While the insured is living,
the policy owner alone has the right to receive all benefits and exercise all
rights that the policy grants or the Company allows.
Joint Owners
If more than one person is named as policy owner, they are joint owners.
Any policy transaction requires the signature of all persons named jointly.
Unless otherwise provided, if a joint owner dies, ownership passes to the
surviving joint owner(s). When the last joint owner dies, ownership passes
through that person's estate, unless otherwise provided.
BENEFICIARY
The beneficiary is the individual named as such in the application or any
later change shown in the Company's records. The policy owner may change the
beneficiary at any time during the life of the insured by written request on
forms provided by the Company. The Company must receive the request at its
administrative office. The change will be effective as of the date this form is
signed. Contingent and/or concurrent beneficiaries may be designated. The policy
owner may designate a permanent beneficiary, whose rights under the policy
cannot be changed without his or her consent. Unless otherwise provided, if no
designated beneficiary is living upon the death of the insured, the policy owner
or the policy owner's estate is the beneficiary.
The Company will pay the death benefit proceeds to the beneficiary. Unless
otherwise provided, the beneficiary must be living at the time of the insured's
death to receive the proceeds.
The Policy
This Policy is a contract between the policy owner and the Company. The
entire contract consists of the policy, a copy of the initial application, all
subsequent applications to change the policy, any endorsements, all riders, and
all additional policy information sections (specification pages) added to the
policy.
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NOTIFICATION AND CLAIMS PROCEDURES
Any election, designation, change, assignment, or request made by you must
be in writing on a form acceptable to the Company. The Company is not liable for
any action taken before such written notice is received and recorded. The
Company may require that the policy be returned for any policy change or upon
its surrender.
If an insured dies while the policy is in effect, notice should be given to
the Company as soon as possible. Claim procedure instructions will be sent
immediately. As due proof of death, the Company may require proof of age and a
certified copy of a death certificate. The Company may also require the
beneficiary and the insured's next of kin to sign authorizations as part of this
process. These authorization forms allow the Company to obtain information about
the insured, including but not limited to medical records of physicians and
hospitals used by the insured.
PAYMENTS
Within seven days after the Company receives all the information needed for
processing a payment, the Company will:
(1) Pay death benefit proceeds,
(2) Pay the Cash Value on surrender, partial surrenders and loan
proceeds based on allocations made to the subaccounts, and
(3) Effect a transfer between subaccounts or from the Variable Account
to the Guaranteed Interest Account.
However, the Company can postpone the calculation or payment of such a
payment or transfer of amounts based on investment performance of the
subaccounts if:
- The New York Stock Exchange is closed on other than customary weekend and
holiday closing or trading on the New York Stock Exchange is restricted
as determined by the SEC; or
- An emergency exists, as determined by the SEC, as a result of which
disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Account's net
assets.
We will pay interest on death proceeds at the rate specified by the state
in which the policy is delivered. Interest will be paid from the date of death
to date of payment of proceeds.
PAYMENT PLAN/SETTLEMENT PROVISIONS
Maturity or surrender benefits may be used to purchase a payment plan
providing monthly income for the lifetime of the Insured. Death benefit proceeds
may be used to purchase a payment plan providing monthly income for the lifetime
of the beneficiary. The monthly payments consisting of proceeds plus interest
will be paid in equal installments for at least ten years. The purchase rates
for the payment plan are guaranteed not to exceed those shown in the policy, but
current rates that are lower (i.e., providing greater income) may be established
by the Company from time to time. This benefit is not available if the income
would be less than $25 a month or if the proceeds are less than $1,000. Maturity
or surrender benefits or death benefit proceeds may be used to purchase any
other payment plan that the Company makes available at that time.
PAYMENT IN CASE OF SUICIDE
If the insured dies by suicide, (1) while sane or insane, (2) within two
years from the policy date or reinstatement date, the Company will limit the
death benefit proceeds to the premium payments less any partial surrender
amounts (and their fees) and any Outstanding Debt. If an insured dies by
suicide, (1) while sane or insane, (2) within two years of the effective date of
any increase in the Specified Amount, the Company will refund the cost of
insurance charges made with respect to such increase.
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ASSIGNMENT
You may assign your policy as collateral security for a loan or other
obligation. No assignment will bind the Company unless the original, or a copy,
is received at the Company's administrative office. The assignment will be
effective only when received by the Company. An assignment does not change the
ownership of the policy. However, after an assignment, the rights of any policy
owner or beneficiary will be subject to the assignment. The entire policy,
including any attached payment option or rider, will be subject to the
assignment. The Company will rely solely on the assignee's statement as to the
amount of the assignee's interest. The Company will not be responsible for the
validity of any assignment. Unless otherwise provided, the assignee may exercise
all rights this policy grants except (a) the right to change the policy owner or
beneficiary, and (b) the right to elect a payment option. Assignment of a policy
that is a modified endowment contract may generate taxable income. (See "Federal
Income Tax Considerations", page 47.)
ERRORS ON THE APPLICATION
If the age or gender of the insured has been misstated, the death benefit
under this policy will be the greater of:
(1) What would be purchased by the most recent cost of insurance
charge at the correct age and gender, or
(2) The death benefit derived by multiplying the Fund Value by the
death benefit percentage for the correct age and gender.
If unisex cost of insurance rates apply, no adjustment will be made for a
misstatement of gender. See "Cost of Insurance," page 45.
INCONTESTABILITY
The Company may contest the validity of this policy if any material
misstatements are made in the application. However, the policy will be
incontestable as follows:
(1) The initial Specified Amount cannot be contested after the policy
has been in force during the insured's lifetime for two years from the
policy date; and
(2) An increase in the Specified Amount or any reinstatement cannot be
contested after the increase or the reinstated policy has been in force
during an Insured's lifetime for two years from its effective date.
POLICY ILLUSTRATIONS
Upon request, the Company will send you an illustration of future benefits
under the policy based on both guaranteed and current cost assumptions.
DISTRIBUTION OF THE POLICY
MONY Securities Corporation ("MSC"), a wholly owned subsidiary of MONY Life
Insurance Company, is principal underwriter (distributor) of the policies. MSC
is a New York corporation organized on September 26, 1969. MSC is registered as
a broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers. The policies are sold by individuals
who are registered representatives of MSC and who are also licensed as life
insurance agents for the Company. The policies may also be sold through other
broker/dealers authorized by MSC and applicable law to do so.
Except where MSC has authorized other broker/dealers to sell the policies
(as described in the preceding paragraph), compensation payable for the sale of
the policies will be based upon the following schedule. After issue of the
Contract, commissions will equal at most 50 percent of premiums paid up to a
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maximum amount. Thereafter, commissions will equal at most 3.0 percent of any
additional premiums plus, on the sixth and each succeeding quarterly anniversary
for so long as the policy shall remain in effect, an annualized rate of 0.15
percent of the Fund Value of the policy. Upon any subsequent increase in
Specified Amount, commissions will equal at most 50 percent of premiums paid on
or after the increase up to a maximum amount. Thereafter, commissions will
return to no more than the 3.0 percent level. Further, registered
representatives may be eligible to receive certain bonuses and other benefits
based on the amount of earned commissions.
In addition, registered representatives who meet specified production
levels may qualify, under sales incentive programs adopted by Company, to
receive non-cash compensation such as expense-paid trips, expense-paid
educational seminars and merchandise. Company makes no separate deductions,
other than previously described, from premiums to pay sales commissions or sales
expenses.
MORE ABOUT THE COMPANY
MANAGEMENT
The directors and officers of the Company are listed below. The business
address for all directors and officers of MONY Life Insurance Company is 1740
Broadway, New York, New York 10019.
Current Officers and Directors of the Company are:
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES WITH DEPOSITOR
- ---- -----------------------------------
<S> <C>
Tom H. Barrett............................ Director since 1990. Partner in American Industrial
Partners, a private investment partnership since 1992.
David L. Call............................. Director since 1993. Ronald P. Lynch Dean Emeritus,
Cornell University, College of Agriculture and Life
Sciences since 1995 and Dean of said College prior to
that time.
G. Robert Durham.......................... Director since 1990. Retired from Walter Industries,
Inc., a home building and financing, natural resources
and industrial manufacturing company in 1996 after
serving as Chairman of the Board and Chief Executive
Officer since 1991.
James B. Farley........................... Director since 1988. Retired from MONY Life Insurance
Company in 1994 after serving as Chairman of the Board
from 1993 and Chairman of the Board and Chief Executive
Officer since 1991.
Robert Holland, Jr. ...................... Director since 1990. President and Chief Executive
Officer of WorkPlace Integrators, an office furniture
manufacturing company, since 1996. Chief Executive
Officer of Ben & Jerry's Homemade, Inc., an ice cream
company from 1995. Chairman of the Board of Gilreath
Manufacturing Company, a plastic injection molding
manufacturing company from 1990 to 1991.
Robert R. Kiley........................... Director since 1995. President and Chief Executive
Officer of the New York City Partnership and Chamber of
Commerce, Inc. since 1995. Principal of Kohlberg & Co.
since 1994.
James L. Johnson.......................... Director since 1986. Chairman Emeritus of GTE
Corporation, a telecommunications company, having served
as Chairman and Chief Executive Officer from 1988 to
1992.
John R. Meyer............................. Director since 1972. Professor Emeritus, Harvard
University since 1997. Professor at Harvard University
from 1973 to 1997.
Jane C. Pfeiffer.......................... Director since 1988. Ms. Pfeiffer is an independent
management consultant.
Thomas C. Theobald........................ Director since 1990. Managing director, William Blair
Capital Partners, L.L.C., an investment firm since 1994.
Chairman of the Board of Continental Bank from 1987 to
1994.
</TABLE>
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All of the officers have held their respective positions listed below for five
or more years.
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES WITH DEPOSITOR
- ---- -----------------------------------
<S> <C>
Current Officer-Directors of the Company are:
Michael I. Roth....................................... Director, Chairman and Chief Executive
Officer
Samuel J. Foti........................................ Director, President and Chief Operating
Officer
Kenneth M. Levine..................................... Director, Executive Vice President and
Chief Investment Officer
</TABLE>
<TABLE>
<CAPTION>
NAME OFFICE WITH DEPOSITOR
- ---- ---------------------
<S> <C>
Other Officers of the Company are:
Lee M. Smith.......................................... Corporate Secretary and Vice President,
Government Relations
Richard E. Connors.................................... Senior Vice President
Richard Daddario...................................... Executive Vice President and Chief
Financial Officer
Phillip A. Eisenberg.................................. Senior Vice President and Chief Actuary
Stephen J. Hall....................................... Senior Vice President
David V. Weigel....................................... Treasurer
</TABLE>
No officer or director listed above receives any compensation from MONY
Variable Account L. The Company or any of its affiliates has paid no separately
allocable compensation to any person listed for services rendered to the
Account.
STATE REGULATION
The Company is subject to the laws of the state of New York governing
insurance companies and to regulation by the Superintendent of Insurance of New
York. In addition, it is subject to the insurance laws and regulations of the
other states and jurisdictions in which it is licensed or may become licensed to
operate. An annual statement in a prescribed form must be filed with the
Superintendent of Insurance of New York and with regulatory authorities of other
states on or before March 1st in each year. This statement covers the operations
of the Company for the preceding year and its financial condition as of December
31st of that year. The Company's affairs are subject to review and examination
at any time by the Superintendent of Insurance or his agents, and subject to
full examination of Company's operations at periodic intervals.
TELEPHONE TRANSFER PRIVILEGES
You may request a transfer of Fund Value or change allocation instructions
for future premiums by telephone if an authorization for telephone transfer form
has been completed, signed, and received at the Company's Syracuse Operations
Center. The Company may record all or part of any telephone conversation with
respect to transfer and allocation instructions. Telephone instructions received
by the Company by 4:00 p.m. Eastern time on any valuation date will be effected
as of the end of that valuation date in accordance with your instructions,
subject to the limitations stated in this prospectus (presuming that the Right
to Return Policy Period has expired). The Company reserves the right to deny any
telephone transfer or allocation request. If all telephone lines are busy (which
might occur, for example, during periods of substantial market fluctuations),
you might not be able to request transfers by telephone and would have to submit
written requests. Telephone transfer and allocation instructions will only be
accepted if complete and correct.
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The Company has adopted guidelines (which it believes to be reasonable)
relating to telephone transfers and allocation instructions. These guidelines,
among other things, outline procedures to be followed which are designed to
prevent unauthorized instructions. If these procedures are followed, the Company
shall not be liable for, and you will therefore bear the entire risk of, any
loss as a result of the Company's following telephone instructions if such
instructions prove to be fraudulent. A copy of the guidelines and the Company's
form for electing telephone transfer privileges is available from licensed
agents of the Company who are also registered representatives of MSC or by
calling 1-800-487-6669. The Company's form must be signed and received at the
Company's Syracuse Operations Center before telephone transfers will be
accepted.
LEGAL PROCEEDINGS
There are no legal proceedings pending to which MONY Variable Account L is
a party, or which would materially affect MONY Variable Account L.
LEGAL MATTERS
Legal matters have been passed on by the Vice President and Chief Counsel
of the MONY Life Insurance Company in connection with:
(1) The issue and sale of the policies described in this prospectus,
(2) The organization of the Company,
(3) The Company's authority to issue the policies under New York law, and
(4) The validity of the forms of the policies under New York law.
Robert Levy, Vice President -- Chief Tax Counsel of MONY Life Insurance
Company has passed upon legal matters relating to the federal income tax laws.
REGISTRATION STATEMENT
A Registration Statement under the Securities Act of 1933 has been filed
with the SEC relating to the offering described in this Prospectus. This
Prospectus does not include all of the information set forth in the Registration
Statement, as portions have been omitted pursuant to the rules and regulations
of the SEC. The omitted information may be obtained at the SEC's principal
office in Washington, D.C., upon payment of the SEC's prescribed fees.
INDEPENDENT ACCOUNTANTS
The audited financial statements for the Company included in this
Prospectus and in the Registration Statement have been audited by
PricewaterhouseCoopers LLP, independent accountants, as indicated in their
report herein. The audited financial statements are included in reliance upon
the authority of said firm as experts in accounting and auditing.
PricewaterhouseCoopers LLP's office is located at 1177 Avenue of the Americas,
New York, New York, 10036.
FINANCIAL STATEMENTS
The audited financial statements of the Company are set forth herein,
starting on page F-2.
The financial statements of the Company have been audited by
PricewaterhouseCoopers LLP. The financial statements of the Company should be
considered only as bearing upon the ability of the Company to meet its
obligations under the Policies.
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FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
With respect to MONY Variable Account L:
No financial statements for MONY Variable Account L are
included because although the MONY Variable Account L
commenced operations in 1990, the subaccounts available
to policyholders had not commenced operations as of
December 31, 1999.
With respect to MONY Life Insurance Company:
Unaudited interim condensed consolidated balance sheets as
of September 30, 1999 and December 31, 1998............ F-2
Unaudited interim condensed consolidated statements of
income and comprehensive income for the three-month
periods ended September 30, 1999 and 1998.............. F-3
Unaudited interim condensed consolidated statements of
income and comprehensive income for the nine-month
periods ended September 30, 1999 and 1998.............. F-4
Unaudited interim condensed consolidated statement of
changes in shareholder's equity for the nine-month
period ended September 30, 1999........................ F-5
Unaudited interim condensed consolidated statements of
cash flows for the nine-month periods ended September
30, 1999 and 1998...................................... F-6
Notes to unaudited interim condensed consolidated
financial statements................................... F-7
Report of Independent Accountants......................... F-20
Consolidated balance sheets as of December 31, 1998 and
1997................................................... F-21
Consolidated statements of income and comprehensive income
for the years ended December 31, 1998, 1997 and 1996... F-22
Consolidated statements of changes in shareholder's equity
for the years ended December 31, 1998, 1997 and 1996... F-23
Consolidated statements of cash flows for the years ended
December 31, 1998, 1997 and 1996....................... F-24
Notes to consolidated financial statements................ F-26
</TABLE>
F-1
<PAGE> 69
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS
INVESTMENTS:
Fixed maturity securities available-for-sale, at fair
value.................................................. $ 3,133.9 $ 3,132.0
Equity securities available-for-sale, at fair value....... 472.8 457.2
Mortgage loans on real estate............................. 1,229.0 988.3
Policy loans.............................................. 65.9 61.1
Real estate to be disposed of............................. 285.5 312.9
Real estate held for investment........................... 125.0 321.3
Other invested assets..................................... 51.0 40.7
--------- ---------
5,363.1 5,313.5
Cash and cash equivalents................................... 152.8 270.2
Accrued investment income................................... 74.7 68.9
Amounts due from reinsurers................................. 477.3 475.9
Deferred policy acquisition costs........................... 526.1 439.7
Other assets................................................ 379.4 325.6
Assets transferred in Group Pension Transaction (Note 4).... 5,173.0 5,751.8
Separate account assets..................................... 5,964.1 6,090.3
Closed Block assets (Note 6)................................ 6,153.0 6,161.2
--------- ---------
Total assets...................................... $24,263.5 $24,897.1
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits...................................... $ 957.6 $ 960.0
Policyholders' account balances............................. 1,967.6 1,991.7
Other policyholders' liabilities............................ 117.8 104.8
Amounts due to reinsurers................................... 90.1 93.4
Accounts payable and other liabilities...................... 527.9 518.3
Short-term debt............................................. 97.5 --
Long-term debt.............................................. 257.9 375.4
Current federal income taxes payable........................ 131.8 79.1
Liabilities transferred in Group Pension Transaction (Note
4)........................................................ 5,157.0 5,678.5
Separate account liabilities................................ 5,962.0 6,078.1
Closed Block liabilities (Note 6)........................... 7,275.7 7,290.7
--------- ---------
Total liabilities................................. $22,542.9 $23,170.0
Commitments and contingencies (Note 5)
Common stock, $1.00 par value; 2 million shares authorized,
issued and outstanding.................................... 2.0 2.0
Capital in excess of par.................................... 1,564.1 1,564.1
Retained earnings........................................... 142.8 8.6
Accumulated other comprehensive income...................... 11.7 152.4
--------- ---------
Total shareholders' equity........................ $ 1,720.6 $ 1,727.1
--------- ---------
Total liabilities and shareholders' equity........ $24,263.5 $24,897.1
========= =========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-2
<PAGE> 70
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
-------- --------
($ IN MILLIONS, EXCEPT
SHARE DATA AND PER SHARE
AMOUNTS)
<S> <C> <C>
REVENUES:
Premiums.................................................... $ 20.8 $167.5
Universal life and investment-type product policy fees...... 47.8 37.6
Net investment income....................................... 123.9 197.1
Net realized gains on investment............................ 22.5 12.0
Group Pension Profits (Note 4).............................. 21.5 11.4
Other income................................................ 47.2 37.1
Contribution from the Closed Block (Note 6)................. 9.5 --
------ ------
293.2 462.7
------ ------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 34.9 182.7
Interest credited to policyholders' account balances........ 26.4 29.3
Amortization of deferred policy acquisition costs........... 21.9 32.1
Dividends to policyholders.................................. 0.7 55.2
Other operating costs and expenses.......................... 164.8 102.7
------ ------
248.7 402.0
------ ------
Income before income taxes and extraordinary item........... 44.5 60.7
Income tax expense.......................................... 15.3 19.5
------ ------
Income before extraordinary item............................ 29.2 41.2
------ ------
Extraordinary item -- demutualization expenses, net (Note
8)........................................................ 1.9 5.8
------ ------
Net income.................................................. 27.3 35.4
Other comprehensive (loss)/income, net...................... (28.5) 44.2
------ ------
Comprehensive (loss)/income................................. $ (1.2) $ 79.6
====== ======
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-3
<PAGE> 71
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------- ----------
($ IN MILLIONS, EXCEPT
SHARE DATA AND PER SHARE
AMOUNTS)
<S> <C> <C>
REVENUES:
Premiums.................................................... $ 65.0 $ 521.3
Universal life and investment-type product policy fees...... 145.7 111.9
Net investment income....................................... 320.7 554.8
Net realized gains on investment............................ 93.1 169.6
Group Pension Profits (Note 4).............................. 47.8 34.1
Other income................................................ 138.9 115.5
Contribution from the Closed Block (Note 6)................. 31.4 --
------- --------
842.6 1,507.2
------- --------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 108.3 562.4
Interest credited to policyholders' account balances........ 80.7 88.0
Amortization of deferred policy acquisition costs........... 54.1 102.9
Dividends to policyholders.................................. 1.4 163.6
Other operating costs and expenses.......................... 391.3 329.7
------- --------
635.8 1,246.6
------- --------
Income before income taxes and extraordinary item........... 206.8 260.6
Income tax expense.......................................... 70.7 91.3
------- --------
Income before extraordinary item............................ 136.1 169.3
Extraordinary item -- demutualization expenses, net (Note
8)........................................................ 1.9 15.5
------- --------
Net income.................................................. 134.2 153.8
Other comprehensive (loss)/income, net...................... (140.7) 54.1
------- --------
Comprehensive (loss)/income................................. $ (6.5) $ 207.9
======= ========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-4
<PAGE> 72
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
ACCUMULATED
CAPITAL OTHER TOTAL
COMMON IN EXCESS RETAINED COMPREHENSIVE SHAREHOLDERS'
STOCK OF PAR EARNINGS INCOME EQUITY
------ --------- -------- ------------- -------------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998............... $2.0 $1,564.1 $ 8.6 $152.4 $1,727.1
Comprehensive loss
Net income............................. 134.2 134.2
Other comprehensive loss:
Unrealized losses on investments,
net of unrealized gains,
reclassification adjustments, and
taxes............................. (140.7) (140.7)
--------
Comprehensive loss....................... (6.5)
---- -------- ------ ------ --------
Balance, September 30, 1999.............. $2.0 $1,564.1 $142.8 $ 11.7 $1,720.6
==== ======== ====== ====== ========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-5
<PAGE> 73
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------- ---------
($ IN MILLIONS)
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES................... $ 39.3 $ 126.2
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities or repayment of:
Fixed maturities.......................................... 472.5 734.2
Equity securities......................................... 168.2 158.1
Mortgage loans on real estate............................. 101.3 300.4
Real estate............................................... 257.6 516.2
Other invested assets..................................... 4.6 45.8
Acquisitions of investments:
Fixed maturities.......................................... (631.8) (1,174.0)
Equity securities......................................... (105.9) (176.2)
Mortgage loans on real estate............................. (337.8) (243.0)
Real estate............................................... (29.2) (28.2)
Other invested assets..................................... (4.7) (1.5)
Policy loans, net......................................... (28.2) (10.4)
Other, net................................................ 16.0 9.3
Property plant and equipment, net......................... (14.7) (13.0)
--------- ---------
Net cash provided by/(used in) investing activities......... (132.1) 117.7
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt.......................................... (29.2) (50.8)
Receipts from annuity and universal life policies credited
to policyholder account balances.......................... 1,293.0 963.9
Return of policyholder account balances on annuity and
universal life policies................................... (1,288.4) (1,082.3)
--------- ---------
Net cash used in financing activities....................... (24.6) (169.2)
--------- ---------
Net increase in cash and cash equivalents................... (117.4) 74.7
Cash and cash equivalents, beginning of period.............. 270.2 313.4
--------- ---------
Cash and cash equivalents, end of period.................... $ 152.8 $ 388.1
========= =========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-6
<PAGE> 74
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
On November 16, 1998, pursuant to its Plan of Reorganization (the "Plan")
which was approved by the New York Superintendent of Insurance on the same day
(the "Plan Effective Date"), The Mutual Life Insurance Company of New York
("MONY") converted from a mutual life insurance company to a stock life
insurance company (the "Demutualization") and became a wholly owned subsidiary
of The MONY Group Inc., (the "MONY Group"), a Delaware corporation organized on
June 24, 1997 for the purpose of becoming the parent holding company of MONY.
The MONY Group has no other operations or subsidiaries. In connection with the
Plan, MONY established a closed block to fund the guaranteed benefits and
dividends of certain participating insurance policies, and eligible
policyholders received cash, policy credits, or shares of common stock of the
MONY Group in exchange for their membership interests in MONY. Also, on November
16, 1998, the MONY Group consummated an initial public offering (the
"Offerings") of approximately 12.9 million shares of its common stock and MONY
changed its name to MONY Life Insurance Company (MONY Life Insurance Company and
its subsidiaries are hereafter referred to as "MONY Life" or the "Company"). The
shares of common stock issued in the Offerings are in addition to approximately
34.3 million shares of common stock of the MONY Group distributed to the
aforementioned policyholders.
The Company is primarily engaged in the business of providing a wide range
of life insurance, annuity, and investment products to higher income
individuals, particularly family builders, pre-retirees, and small business
owners. The Company distributes its products primarily through its career agency
sales force and various complementary distribution channels (which include sales
of Enterprise Capital Management, Inc. funds through third-party broker dealers,
sales of protection products through brokerage general agencies, sales of COLI
products by the Company's corporate marketing team and sales of a variety of
financial products and services through the Company's Trusted Securities
Advisors Corp. subsidiary). The Company primarily sells its products in all 50
of the United States, the District of Columbia, the U.S. Virgin Islands, Guam
and the Commonwealth of Puerto Rico.
On December 31, 1998, MONY Life acquired Sagamore Financial Corporation
("Sagamore"), the parent company of U.S. Financial Life Insurance Company
("USFL") for a purchase price of $48 million. USFL is a special-risk carrier
based in Ohio, which distributes its products in 41 states through brokerage
general agencies.
2. BASIS OF PRESENTATION:
The accompanying unaudited interim condensed consolidated financial
statements are prepared in conformity with generally accepted accounting
principles ("GAAP") which require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. In
the opinion of management these statements include all normal recurring
adjustments necessary to present fairly the financial position, results of
operations and cash flows of the Company for the periods presented. These
statements should be read in conjunction with the consolidated financial
statements of the Company for the year ended December 31, 1998. The results of
operations for the three-month and nine-month periods ended September 30, 1999
are not necessarily indicative of the results to be expected for the full year.
3. SEGMENT INFORMATION:
The Company's business activities consist of the following: protection
product operations, accumulation product operations, mutual fund operations,
securities broker-dealer operations, insurance brokerage operations, and certain
insurance lines of business no longer written by the Company (the "run-off
F-7
<PAGE> 75
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
businesses"). These business activities represent the Company's operating
segments. Except as discussed below, these segments are managed separately
because they either provide different products or services, are subject to
different regulation, require different strategies, or have different technology
requirements.
Management considers the Company's mutual fund operations to be an integral
part of the products offered by the Company's accumulation products segment,
since substantially all the mutual funds sold by the Company are offered
through, and in conjunction with, the products marketed by the accumulation
products segment. Accordingly, for management purposes (including, performance
assessment and making decisions regarding the allocation of resources), the
Company aggregates its mutual fund operations with its accumulation products
segment.
Of the aforementioned segments, only the protection products segment and
the accumulation products segment qualify as reportable segments in accordance
with FASB Statement No. 131. All of the Company's other segments are combined
and reported in an other products segment.
Products comprising the protection products segment primarily include a
wide range of individual life insurance products, including; permanent and last
survivor whole life, term life, universal life, variable universal life, group
life, and group universal life. In addition, included in the protection products
segment are: (i) the assets and liabilities transferred pursuant to the Group
Pension Transaction, as well as the Group Pension Profits (see Note 4), (ii) the
Closed Block assets and liabilities, as well as the Contribution from the Closed
Block which is reflected in "Other Income" in the table below (see Note 6), and
(iii) the Company's disability income insurance business. Products comprising
the accumulation products segment primarily include fixed annuities,
non-participating interest sensitive products (including single premium deferred
annuities, flexible premium deferred annuities, immediate annuities, and
flexible premium variable annuities), proprietary mutual funds, investment
management services, and certain other financial services products. The
Company's other products segment primarily consists of the securities
broker-dealer operation, the insurance brokerage operation, and the run-off
businesses. The securities broker-dealer operation markets the Company's
proprietary investment products and, in addition, provides customers of the
Company's protection and accumulation products access to other non-proprietary
investment products (including stocks, bonds, limited partnership interests,
tax-exempt unit investment trusts and other investment securities). The
insurance brokerage operation provides the Company's field agency force with
access to life, annuity, and small group health and specialty insurance products
written by other carriers to meet the insurance and investment needs of its
customers. The run-off businesses primarily consist of group life and health
business, as well as group pension business that was not included in the Group
Pension Transaction (see Note 4).
Set forth in the table below is certain financial information with respect
to the Company's operating segments as of September 30, 1999 and December 31,
1998 and for the three-month and nine-month periods ended September 30, 1999 and
1998, as well as amounts not allocated to the segments. The Company evaluates
the performance of each operating segment based on profit or loss from
operations before income taxes. The Company does not allocate certain
nonrecurring items to the segments (e.g. items of an unusual or infrequent
nature). All segment revenues are from external customers.
Assets have been allocated to the segments in amounts sufficient to support
the associated liabilities of each segment. Capital is allocated to each segment
in amounts sufficient to maintain a targeted regulatory risk-based capital
("RBC") level for each segment. Allocations of net investment income and net
realized gains on investments were primarily based on the amount of assets
allocated to each segment. Other costs and operating expenses were allocated to
each of the segments based on: (i) a review of the nature of such costs, (ii)
time studies analyzing the amount of employee compensation costs incurred by
each segment, and (iii) cost estimates included in the Company's product
pricing. Substantially all non-
F-8
<PAGE> 76
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
cash transactions and impaired real estate (including real estate acquired in
satisfaction of debt) have been allocated to the protection products segment.
Amounts reported as "unallocated amounts" in the table below primarily
relate to: (i) contracts issued by MONY Life relating to its employee benefit
plans and (ii) a one-time restructuring charge related to the Company's
voluntary early retirement program.
SEGMENT SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------
1999 1998 1999 1998
------- ------- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
PREMIUMS:
Protection Products(1).................................. $ 19.0 $164.6 $ 58.3 $508.4
Accumulation Products................................... (0.2) 0.5 0.6 2.3
Other Products.......................................... 2.0 2.4 6.1 10.6
------ ------ ------ ------
$ 20.8 $167.5 $ 65.0 $521.3
====== ====== ====== ======
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES:
Protection Products..................................... $ 29.9 $ 21.8 $ 91.5 $ 63.6
Accumulation Products................................... 17.8 15.9 53.8 47.5
Other Products.......................................... 0.1 (0.1) 0.4 0.8
------ ------ ------ ------
$ 47.8 $ 37.6 $145.7 $111.9
====== ====== ====== ======
NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON
INVESTMENTS:
Protection Products(2).................................. $ 98.6 $163.9 $276.6 $560.9
Accumulation Products................................... 30.1 31.3 91.6 109.1
Other Products.......................................... 16.5 12.8 44.4 51.7
Unallocated amounts..................................... 1.2 1.1 1.2 2.7
------ ------ ------ ------
$146.4 $209.1 $413.8 $724.4
====== ====== ====== ======
OTHER INCOME:
Protection Products(3)(9)............................... $ 33.5 $ 18.7 $ 88.8 $ 49.9
Accumulation Products................................... 24.1 17.6 68.1 52.2
Other Products.......................................... 19.4 10.8 57.9 43.2
Unallocated amounts..................................... 1.2 1.4 3.3 4.3
------ ------ ------ ------
$ 78.2 $ 48.5 $218.1 $149.6
====== ====== ====== ======
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS:
Protection Products(13)................................. $ 14.0 $ 25.0 $ 31.3 $ 80.4
Accumulation Products................................... 7.9 7.1 22.8 22.5
------ ------ ------ ------
$ 21.9 $ 32.1 $ 54.1 $102.9
====== ====== ====== ======
BENEFITS TO POLICYHOLDERS:(4)
Protection Products..................................... $ 33.7 $184.3 $107.4 $554.8
Accumulation Products................................... 17.6 19.3 54.9 59.9
</TABLE>
F-9
<PAGE> 77
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------
1999 1998 1999 1998
------- ------- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
Other Products.......................................... $ 7.5 $ 6.1 $ 21.9 $ 28.7
Unallocated amounts..................................... 2.5 2.3 4.8 7.0
------ ------ ------ ------
$ 61.3 $212.0 $189.0 $650.4
====== ====== ====== ======
DIVIDENDS TO POLICYHOLDERS:
Protection Products..................................... $ 0.1 $ 54.5 $ (0.7) $161.3
Accumulation Products................................... 0.4 0.4 1.3 1.3
Other Products.......................................... 0.2 0.3 0.8 1.0
------ ------ ------ ------
$ 0.7 $ 55.2 $ 1.4 $163.6
====== ====== ====== ======
OTHER OPERATING COSTS AND EXPENSES:
Protection Products..................................... $ 59.2 $ 67.2 $190.0 $211.6
Accumulation Products................................... 24.7 20.4 75.9 59.3
Other Products.......................................... 22.0 15.1 66.5 58.8
Unallocated amounts..................................... 58.9 -- 59.5 --
------ ------ ------ ------
$164.8 $102.7 $391.3 $329.7
====== ====== ====== ======
INCOME BEFORE INCOME TAXES:
Protection Products..................................... $ 74.0 $ 38.0 $187.2 $174.7
Accumulation Products................................... 21.2 18.1 59.2 68.1
Other Products.......................................... 8.3 4.4 19.6 17.8
Unallocated amounts..................................... (59.0) 0.2 (59.2)) --
------ ------ ------ ------
$ 44.5 $ 60.7 $206.8 $260.6
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS:(7)
Protection Products(5)(10).................................. $16,090.7 $16,578.7
Accumulation Products....................................... 5,911.3 6,171.3
Other Products.............................................. 1,178.9 1,256.2
Unallocated amounts......................................... 1,082.6 890.9
--------- ---------
$24,263.5 $24,897.1
========= =========
DEFERRED POLICY ACQUISITION COSTS:
Protection Products(11)..................................... $ 1,034.6 $ 857.6
Accumulation Products....................................... 150.8 136.7
--------- ---------
$ 1,185.4 $ 994.3
========= =========
POLICYHOLDERS' LIABILITIES:
Protection Products(6)(12).................................. $10,202.3 $10,267.0
Accumulation Products....................................... 1,268.8 1,318.6
</TABLE>
F-10
<PAGE> 78
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
Other Products.............................................. $ 436.7 $ 455.6
Unallocated amounts......................................... 18.9 17.4
--------- ---------
$11,926.7 $12,058.6
========= =========
SEPARATE ACCOUNT LIABILITIES:(7)
Protection Products(8)...................................... $ 3,768.4 $ 4,056.8
Accumulation Products....................................... 4,256.5 4,452.6
Other Products.............................................. 588.5 621.9
Unallocated amounts......................................... 781.9 776.4
--------- ---------
$ 9,395.3 $ 9,907.7
========= =========
</TABLE>
- ---------------
(1) Excludes $144.2 million and $448.6 million of revenues in individual life
related to the Closed Block for the three-month and nine-month period ended
September 30, 1999, respectively.
(2) Excludes net investment income and net realized capital gains on
investments in individual life related to the Closed Block of $96.7 million
and $288.6 million for the three-month and nine-month period ended
September 30, 1999, respectively.
(3) Includes Group Pension Profits of $21.5 million and $11.4 million for the
three-month period ended September 30, 1999 and 1998, respectively, and
$47.8 million and $34.1 million for the nine-month period ended September
30, 1999 and 1998, respectively.
(4) Includes interest credited to policyholders' account balances. Excludes
$147.6 million and $466.0 million of benefits and interest credited to
policyholders' account balances related to individual life in the Closed
Block for the three-month and nine-month period ended September 30, 1999,
respectively.
(5) Includes assets transferred in the Group Pension Transaction of $5,173.0
million and $5,751.8 million as of September 30, 1999 and December 31,
1998, respectively.
(6) Includes policyholder liabilities transferred in the Group Pension
Transaction of $1,693.5 million and $1,824.9 million as of September 30,
1999 and December 31, 1998, respectively.
(7) Each segment includes separate account assets in an amount equal to the
corresponding liability reported.
(8) Includes separate account liabilities transferred in the Group Pension
Transaction of $3,433.3 million and $3,829.6 million as of September 30,
1999 and December 31, 1998 respectively.
(9) Includes $9.5 million and $31.4 million relating to the Contribution from
the Closed Block for the three-month and nine-month period ended September
30, 1999.
(10) Includes Closed Block assets of $6,153.0 million and $6,161.2 million as of
September 30, 1999 and December 31, 1998, respectively (see Note 6).
(11) Includes deferred policy acquisition costs allocated to the Closed Block of
$659.3 million and $554.6 million as of September 30, 1999 and December 31,
1998, respectively (see Note 6).
(12) Includes Closed Block policyholders' liabilities of $7,190.2 million and
$7,177.1 million as of September 30, 1999 and December 31, 1998,
respectively (see Note 6).
(13) Excludes $19.4 million and $54.5 million of amortization of deferred policy
acquisition costs related to the Closed Block for the three-month and
nine-month period ended September 30, 1999.
F-11
<PAGE> 79
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
The following is a summary of premiums and universal life and
investment-type product policy fees by product for the three-month and
nine-month periods ended September 30, 1999 and 1998, respectively.
<TABLE>
<CAPTION>
THREE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- ------------------
1999 1998 1999 1998
----- ------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
PREMIUMS:
Individual life(1)....................................... $18.9 $165.1 $ 57.9 $508.2
Group insurance.......................................... 2.6 2.7 7.3 8.4
Other.................................................... (0.7) (0.3) (0.2) 4.7
----- ------ ------ ------
Total.......................................... $20.8 $167.5 $ 65.0 $521.3
===== ====== ====== ======
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES:
Universal life........................................... $17.7 $ 17.2 $ 54.4 $ 38.9
Variable universal life(2)............................... 10.1 1.8 28.8 16.7
Group universal life..................................... 2.1 2.8 8.3 8.0
Individual variable annuities............................ 17.7 15.9 53.4 47.1
Individual fixed annuities............................... 0.2 (0.1) 0.8 1.2
----- ------ ------ ------
Total.......................................... $47.8 $ 37.6 $145.7 $111.9
===== ====== ====== ======
</TABLE>
- ---------------
(1) Excludes revenues from individual life in the Closed Block of $144.2 million
and $448.6 million for the three-month and six-month periods ended September
30, 1999.
(2) Includes Corporate Sponsored variable universal life products.
4. THE GROUP PENSION TRANSACTION:
On December 31, 1993 (the "Group Pension Transaction Date"), MONY entered
into an agreement (the "Agreement") with AEGON USA, Inc. ("AEGON") under which
MONY transferred a substantial portion of its group pension business (hereafter
referred to as the "Group Pension Transaction"), including its full service
group pension contracts, consisting primarily of tax-deferred annuities, 401(k)
and managed funds lines of business, to AEGON's wholly-owned subsidiary, AUSA
Life Insurance Company, Inc. ("AUSA"). The Company also transferred to AUSA the
corporate infrastructure supporting the group pension business, including data
processing systems, facilities and regional offices. AUSA was newly formed by
AEGON solely for the purpose of facilitating this transaction. In connection
with the transaction, the Company and AEGON have entered into certain service
agreements. These agreements, among other things, provide that the Company will
continue to manage the transferred assets, and that AUSA will continue to
provide certain administrative services to the Company's remaining group pension
contracts not included in the transfer.
The transferred group pension business consisted of approximately $6.4
billion in group pension assets and liabilities, which were comprised of
approximately $2.8 billion of general account assets and liabilities, and $3.6
billion of separate account assets and liabilities. The transfer was initially
structured in the form of indemnity reinsurance, however, the Agreement
contemplated that the transfer would be restructured in the form of assumption
reinsurance as soon as practicable following the consent of contractholders to
assumption of their contracts. Substantially all of the contractholders
consented to the assumption of their contracts by AUSA.
F-12
<PAGE> 80
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
In addition, pursuant to the Agreement, MONY agreed to make a $200 million
capital investment in AEGON by purchasing $150 million face amount of Series A
Notes and $50 million face amount of Series B Notes (hereinafter referred to as
the "Notes"). The Series A Notes pay interest at 6.44% per annum and the Series
B Notes pay interest at 6.24% per annum. Both the Series A Notes and the Series
B Notes mature on December 31, 2002. MONY's investment in the Series A Notes was
intended to provide AEGON with the funding necessary to capitalize AUSA.
MONY retained all the profits resulting from the $6.4 billion of deposits
on contracts in force and transferred to AEGON on the Group Pension Transaction
Date (the "Existing Deposits"). As consideration for the transaction, MONY
remunerated AEGON by transferring to AUSA (i) the intangible value associated
with MONY's group pension franchise, including established customer
relationships, (ii) rights to substantially all the profits associated with any
new deposits made after the Group Pension Transaction Date on the contracts
which were in force and transferred by MONY to AUSA on the Group Pension
Transaction Date, and (iii) rights to substantially all the profits on any new
business generated subsequent to the Group Pension Transaction Date.
In accordance with GAAP, the transaction did not constitute a sale because
MONY retained substantially all the risks and rewards associated with the
Existing Deposits. Accordingly, the Company continues to reflect the transferred
assets and liabilities on its balance sheet under separate captions entitled
"Assets transferred in Group Pension Transaction" and "Liabilities transferred
in Group Pension Transaction". In addition, MONY reports in its GAAP earnings
the profits from the Existing Deposits as discussed below.
Pursuant to the Agreement, MONY receives from AUSA (i) payments on an
annual basis through December 31, 2002 (the "Group Pension Payments") equal to
all of the earnings from the Existing Deposits, (ii) a final payment (the "Final
Value Payment") at December 31, 2002 based on the remaining fair value of the
Existing Deposits, and (iii) a contingent payment (the "New Business Growth
Payment") at December 31, 2002 based on new business growth subsequent to the
Group Pension Transaction Date. However, the level of new business growth
necessary for MONY to receive the New Business Growth Payment make it unlikely
that MONY will ever receive any such payment.
With respect to the Group Pension Payments, the annual results from the
Existing Deposits are measured on a basis in accordance with the Agreement (such
basis hereafter referred to as the "Earnings Formula") which is substantially
the same as GAAP, except that: (i) asset impairments on fixed maturity
securities are only recognized when such securities are designated with a
National Association of Insurance Commissioners ("NAIC") rating of "6", and (ii)
no impairment losses are recognized on mortgage loans until such loans are
disposed of or at the time, and in the calculation, of the Final Value Payment.
Earnings which emerge from the Existing Deposits pursuant to the
application of the Earnings Formula are recorded in MONY's financial statements
only after adjustments (primarily to recognize asset impairments in accordance
with SFAS Nos. 114 and 115) to reflect such earnings on a basis entirely in
accordance with GAAP (such earnings hereafter referred to as the "Group Pension
Profits"). Losses which arise from the application of the Earnings Formula for
any annual period will be reflected in MONY's results of operations (after
adjustments to reflect such losses in accordance with GAAP) only up to the
amount for which MONY is at risk (as described below), which at any time is
equal to the then outstanding principal amount of the Series A Notes.
Operating losses reported in any annual period pursuant to the Earnings
Formula are carried forward to reduce any earnings in subsequent years reported
pursuant to the Earnings Formula. Any resultant deficit remaining at December
31, 2002 will be deducted from the Final Value Payment and New Business Growth
Payment, if any, due to MONY. If a deficit still remains, it will be applied (as
provided for in the
F-13
<PAGE> 81
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
Agreement) as an offset against the principal payment due to MONY upon maturity
of the Series A Notes.
The following tables set forth certain summarized financial information
relating to the Group Pension Transaction as of and for the periods indicated,
including information regarding: (i) the general account assets transferred to
support the Existing Deposits in the Group Pension Transaction (hereafter
referred to as the "AEGON Portfolio"), (ii) the transferred separate account
assets and liabilities and (iii) the components of revenue and expense
comprising the Group Pension Profits:
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
General Account
Fixed maturities: available for sale, at estimated fair
value (amortized cost; $1,551.8 and $1,564.6,
respectively)......................................... $1,549.9 $1,620.2
Mortgage loans on real estate.......................... 124.2 214.8
Real estate held for investment........................ 16.7 37.9
Cash and cash equivalents.............................. 24.3 21.7
Accrued investment income.............................. 24.6 27.6
-------- --------
Total general account assets........................... 1,739.7 1,922.2
Separate account assets................................... 3,433.3 3,829.6
-------- --------
Total assets...................................... $5,173.0 $5,751.8
======== ========
LIABILITIES:
General Account(1)
Policyholders' account balances........................ $1,693.5 $1,824.9
Other liabilities...................................... 30.2 24.0
-------- --------
Total general account liabilities................. 1,723.7 1,848.9
Separate account liabilities(2)........................... 3,433.3 3,829.6
-------- --------
Total liabilities................................. $5,157.0 $5,678.5
======== ========
</TABLE>
- ---------------
(1) Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $117.6
million and $121.7 million as of September 30, 1999 and December 31, 1998,
respectively.
(2) Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $18.4 million
and $33.3 million as of September 30, 1999 and December 31, 1998,
respectively.
F-14
<PAGE> 82
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- ---------------
1999 1998 1999 1998
----- ----- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
REVENUES:
Product policy fees......................................... $ 5.4 $ 5.5 $ 17.5 $ 16.6
Net investment income....................................... 31.6 38.5 98.2 119.1
Net realized gains (losses) on investments.................. 11.5 (0.9) 15.8 (3.3)
----- ----- ------ ------
Total revenues.................................... 48.5 43.1 131.5 132.4
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances........ 22.4 26.9 67.9 82.6
Other operating costs and expenses.......................... 4.6 4.8 15.8 15.7
----- ----- ------ ------
Total benefits and expenses....................... 27.0 31.7 83.7 98.3
----- ----- ------ ------
Group Pension Profits............................. $21.5 $11.4 $ 47.8 $ 34.1
===== ===== ====== ======
</TABLE>
5. COMMITMENTS AND CONTINGENCIES:
In late 1995 and thereafter, a number of purported class actions were
commenced in various state and federal courts against the Company alleging that
the Company engaged in deceptive sales practices in connection with the sale of
whole and/or universal life insurance policies from the early 1980s to the mid
1990s. Although the claims asserted in each case are not identical, they seek
substantially the same relief under essentially the same theories of recovery
(i.e. breach of contract, fraud, negligent misrepresentation, negligent
supervision and training, breach of fiduciary duty, unjust enrichment and/or
violation of state insurance and/or deceptive business practice laws).
Plaintiffs in these cases (including the Goshen case discussed below) seek
primary equitable relief (e.g. reformation, specific performance, mandatory
injunctive relief prohibiting the Company from canceling policies for failure to
make required premium payments, imposition of a constructive trust and/or
creation of a claims resolution facility to adjudicate any individual issues
remaining after resolution of all class-wide issues) as opposed to compensatory
damages, although they seek compensatory damages in unspecified amounts. The
Company has answered the complaints in each action (except for one action being
voluntarily held in abeyance), has denied any wrongdoing, and has asserted
numerous affirmative defenses.
On June 7, 1996, the New York State Supreme Court certified the Goshen
case, being the first of the aforementioned class actions filed, as a nationwide
class consisting of all persons or entities who have, or at the time of the
policy's termination had, an ownership interest in a whole or universal life
insurance policy issued by the Company and sold on an alleged "vanishing
premium" basis during the period January 1, 1982 to December 31, 1995. On March
27, 1997, the Company filed a motion to dismiss or, alternatively, for summary
judgment on all counts of the complaint. All of the other putative class actions
(with one exception discussed below) have been consolidated and transferred by
the Judicial Panel on Multidistrict Litigation to the United States District
Court for the District of Massachusetts, or are being voluntarily held in
abeyance pending the outcome of the Goshen case. The Massachusetts District
Court in the Multidistrict Litigation has entered an order essentially holding
all of the federal cases in abeyance pending the action of the Goshen case.
On October 21, 1997, the New York State Supreme Court granted the Company's
motion for summary judgment and dismissed all claims filed in the Goshen case
against the Company on the merits. On March 18, 1999 the order by the New York
State Supreme Court was affirmed by the New York State Appellate Division, First
Department. On June 8, 1999, plaintiffs obtained leave from the New York
F-15
<PAGE> 83
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
State Court of Appeals to appeal the Appellate Division decision. Briefs were
filed in October 1999, and oral argument before the Court of Appeals took place
on October 14, 1999. All actions before the United States District Court for the
District of Massachusetts are still pending.
In addition, on or about February 25, 1999, a purported class action was
filed against MONY Life Insurance Company of America ("MLOA"), a subsidiary of
MONY Life in Kentucky state court covering policyholders who purchased
individual universal life insurance policies from MLOA after January 1, 1988
claiming breach of contract and violations of the Kentucky Consumer Protection
Act. On March 26, 1999, MLOA removed that action to the United States District
Court for the Eastern District of Kentucky, and on August 11, 1999 obtained an
order from the Judicial Panel on Multidistrict Litigation transferring the
action to the Multidistrict Litigation in the District of Massachusetts.
In addition to the matters discussed above, the Company is involved in
various other legal actions and proceedings in connection with its businesses.
The claimants in certain of these actions and proceedings seek damages of
unspecified amounts.
With respect to all of the other aforementioned pending litigation, the
Company recorded a provision, which is reflected in Other Operating Costs and
Expenses, of $0.5 million and $11.6 million during the nine-month period ended
September 30, 1999 and 1998, respectively. While the outcome of such matters
cannot be predicted with certainty, in the opinion of management, any additional
liability beyond that recorded in the consolidated financial statements at
September 30, 1999, resulting from the resolution of these matters will not have
a material adverse effect on the Company's consolidated financial position or
results of operations.
Insurance companies are subject to assessments up to statutory limits, by
state guaranty funds for losses of policyholders of insolvent insurance
companies. In the opinion of management, such assessments will not have a
material adverse effect on the consolidated financial position and the results
of operations of the Company.
The Company maintains two lines of credit with domestic banks aggregating
$150.0 million, with scheduled renewal dates in September 2000 and September
2003. In accordance with certain covenants under these lines of credit, the
Company is required to maintain a certain statutory tangible net worth and debt
to capitalization ratio. The purpose of these facilities is to provide
additional liquidity for any unanticipated short term cash needs the Company
might experience and also to serve as support for the Company's $250 million
commercial paper program which was activated in the second quarter of 1999. The
Company has complied with all covenants under these lines of credit, has not
borrowed against these lines of credit since their inception and does not have
any commercial paper outstanding as of September 30, 1999.
At September 30, 1999, the Company had commitments to issue $11.8 million
of fixed rate agricultural loans with periodic interest rate reset dates. The
initial interest rates on such loans range from approximately 7.1% to 8.5%. In
addition, the Company had commitments to issue $77.2 million of fixed rate
commercial mortgage loans with interest rates ranging from 7.0% to 8.2%. The
Company also had commitments outstanding to purchase $11.0 million of private
fixed maturity securities as of September 30, 1999 with interest rates ranging
from 8.3% to 8.5%. At September 30, 1999, the Company had commitments to
contribute capital to its equity partnership investments of $122.7 million.
6. CLOSED BLOCK:
On November 16, 1998, the Company established a closed block (the "Closed
Block") of certain participating insurance policies as defined in the Plan (the
"Closed Block Business"). In conjunction therewith, the Company allocated assets
to the Closed Block expected to produce cash flows which,
F-16
<PAGE> 84
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
together with anticipated revenues from the Closed Block Business, are
reasonably expected to be sufficient to support the Closed Block Business,
including but not limited to, provision for payment of claims and surrender
benefits, certain expenses and taxes, and for continuation of current payable
dividend scales in effect at the date of Demutualization, assuming the
experience underlying such dividend scales continues, and for appropriate
adjustments in such scales if the experience changes. The assets allocated to
the Closed Block and the aforementioned revenues inure solely to the benefit of
the owners of policies included in the Closed Block.
The assets and liabilities allocated to the Closed Block are recorded in
the Company's financial statements at their historical carrying values. The
carrying values of the assets allocated to the Closed Block are less than the
carrying value of the Closed Block liabilities at the Plan Effective Date. The
excess of the Closed Block liabilities over the Closed Block assets at the Plan
Effective Date represents the total estimated future post-tax contribution
expected to emerge from the operation of the Closed Block, which will be
recognized in the Company's income over the period the policies and the
contracts in the Closed Block remain in force.
In determining the amount of assets to be allocated to the Closed Block,
management made certain estimates and assumptions regarding the expected cash
flows from the Closed Block assets and the Closed Block Business, including
estimates and assumptions regarding investment cash flows, mortality,
persistency, and expenses which are to be funded in the Closed Block. The
estimated net cash flows assumed in determining the Closed Block funding
consisted of premiums from policies included in the Closed Block, investment
income from Closed Block assets, proceeds from maturities and dispositions of
Closed Block assets, less benefits paid on Closed Block policies, certain
expenses (including taxes) funded in the Closed Block, and dividends on Closed
Block policies based on current payable dividend scales. To the extent that the
actual cash flows, subsequent to the Plan Effective Date, from the assets
allocated to the Closed Block and the Closed Block Business are, in the
aggregate, more favorable than assumed in establishing the Closed Block, total
dividends paid to the Closed Block policyholders in future years will be greater
than the total dividends that would have been paid to such policyholders if the
current payable dividend scales had been continued. Conversely, to the extent
that the actual cash flows, subsequent to the Plan Effective Date, from the
assets allocated to the Closed Block and the Closed Block Business are, in the
aggregate, less favorable than assumed in establishing the Closed Block, total
dividends paid to the Closed Block policyholders in future years will be less
than the total dividends that would have been paid to such policyholders if the
current payable dividend scales had been continued. Accordingly, the recognition
of the aforementioned estimated future post-tax contribution expected to emerge
from the operation of the Closed Block is not affected by the aggregate actual
experience of the Closed Block assets and the Closed Block Business subsequent
to the Plan Effective Date, except in the unlikely event that the Closed Block
assets and the actual experience of the Closed Block Business subsequent to the
Plan Effective Date are not sufficient to pay the guaranteed benefits on the
Closed Block Policies, in which case the Company will be required to fund any
such deficiency from its general account assets outside of the Closed Block.
The results of the Closed Block are presented as a single line item in the
Company's statements of income entitled, "Contribution from the Closed Block".
Prior to the establishment of the Closed Block the results of the assets and
policies comprising the Closed Block were reported in various line items in the
Company's income statements, including: premiums, investment income, net
realized gains and losses on investments, benefits, amortization of deferred
policy acquisition costs, etc. In addition, all assets and liabilities allocated
to the Closed Block will be reported in the Company's balance sheet separately
under the captions "Closed Block assets" and "Closed Block liabilities",
respectively. Accordingly, certain line items in the Company's financial
statements subsequent to the establishment of the Closed Block reflect
F-17
<PAGE> 85
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
material reductions in reported amounts, as compared to years prior to the
establishment of the Closed Block, while having no effect on net income.
The pre-tax Contribution from the Closed Block includes only those
revenues, benefit payments, dividends, premium taxes, state guaranty fund
assessments, and investment expenses considered in funding the Closed Block.
However, many expenses associated with operating the Closed Block and
administering the policies included therein were excluded from and, accordingly,
are not funded in the Closed Block. These expenses are reported in the Company's
statement of operations, outside of the Contribution from the Closed Block,
consistent with how they are funded. Such expenses are reported in the separate
line items to which they apply based on the nature of such expenses. Federal
income taxes applicable to the Closed Block, which are funded in the Closed
Block, are reflected as a component of federal income tax expense in the
Company's statement of operations. Since many expenses related to the Closed
Block are funded outside the Closed Block, operating costs and expenses outside
the Closed Block are disproportionate to the level of business outside the
Closed Block.
The following tables set forth certain summarized financial information
relating to the Closed Block, as of and for the periods indicated, and reflect
certain adjustments made to revise estimates made in connection with the
establishment of the Closed Block which resulted in a net increase to the Closed
Block deficit:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
Fixed Maturities:
Available for sale, at estimated fair value (amortized
cost; $3,554.7 and $3,423.0, respectively)............. $3,508.5 $3,574.0
Mortgage loans on real estate............................... 447.9 431.7
Policy loans................................................ 1,199.7 1,208.4
Real estate held for investment............................. 21.1 --
Cash and cash equivalents................................... 78.7 134.4
Premiums receivable......................................... 7.7 16.8
Deferred policy acquisition costs........................... 659.3 554.6
Other assets................................................ 230.1 241.3
-------- --------
Total Closed Block assets......................... $6,153.0 $6,161.2
======== ========
LIABILITIES:
Future policy benefits...................................... $6,734.9 $6,715.6
Policyholders' account balances............................. 294.5 298.0
Other Policyholders' liabilities............................ 160.8 163.5
Other liabilities........................................... 85.5 113.6
-------- --------
Total Closed Block liabilities.................... $7,275.7 $7,290.7
======== ========
</TABLE>
F-18
<PAGE> 86
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE-MONTH NINE-MONTH
PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1999
------------- -------------
($ IN MILLIONS)
<S> <C> <C>
REVENUES:
Premiums.................................................... $144.2 $448.6
Net investment income and net realized gains on
investments............................................... 96.7 288.6
Other income................................................ 0.4 1.1
------ ------
Total revenues.................................... 241.3 738.3
------ ------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 145.5 459.5
Interest credited to policyholders' account balances........ 2.1 6.5
Amortization of deferred policy acquisition costs........... 19.4 54.5
Dividends to policyholders.................................. 63.4 179.8
Other operating costs and expenses.......................... 1.4 6.6
------ ------
Total benefits and expenses....................... 231.8 706.9
------ ------
Contribution from Closed Block.............................. $ 9.5 $ 31.4
====== ======
</TABLE>
At September 30, 1999 and December 31, 1998, there were no adjustments in
the value of fixed maturity securities in the Closed Block deemed to be other
than temporary or fixed maturity securities which have been non-income producing
for the twelve months preceding such dates. At September 30, 1999 and December
31, 1998, the carrying value of mortgage loans in the Closed Block that were
non-income producing for the twelve months preceding such date, were $0.6
million and $0.5 million, respectively.
7. EARLY RETIREMENT PROGRAM
On June 30, 1999, the Company announced a voluntary early retirement
program for approximately 500 eligible employees of which 300 employees elected
to participate. The program is part of an overall company-wide realignment of
staff and resources, which may also include the elimination and/or shifting of
certain job functions and the addition of employees with new skill sets. The
Company has recorded a one-time restructuring charge of $58.9 million pretax in
the third quarter of 1999.
8. EXTRAORDINARY ITEM
The condensed consolidated statements of income and comprehensive income
reflect extraordinary charges of $1.9 million and $5.8 million for the three
month periods ended September 30, 1999 and 1998, respectively, and $1.9 million
and $15.5 million for the nine-month periods ended September 30, 1999 and 1998,
respectively. Costs incurred in 1998 primarily include the fees of financial,
legal, actuarial and accounting advisors to the Company and to the New York
Insurance Department as well as printing and postage for communication with
policy holders. Costs incurred in 1999 primarily relate to expenses incurred in
connection with a commission-free sale and purchase program (the "Program")
offered to shareholders pursuant to the Plan. The Program commenced August 17,
1999 and ends on November 17, 1999. Pursuant to the Program shareholders who own
fewer than 100 shares can sell all of their shares or purchase additional shares
to round up to 100 shares without incurring commission.
F-19
<PAGE> 87
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
MONY Life Insurance Company
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income and comprehensive income, changes in
shareholder's equity and cash flows present fairly, in all material respects,
the financial position of MONY Life Insurance Company and Subsidiaries (the
"Company"), formerly known as The Mutual Life Insurance Company of New York and
subsidiaries at December 31, 1998 and 1997, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1998, in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
As discussed in Note 4 to the consolidated financial statements, the
Company adopted in 1996, Statements of Financial Accounting Standards No. 120
(SFAS 120) and Financial Accounting Standards Board Interpretation No. 40 (FIN
40) which required implementation of several accounting pronouncements not
previously adopted. The effects of adopting SFAS 120 and FIN 40 were
retroactively applied to the Company's previously issued financial statements,
consistent with the implementation guidance of those standards.
PricewaterhouseCoopers LLP
New York, New York
February 15, 1999, except for Note 17(b)
as to which the date is March 22, 1999.
F-20
<PAGE> 88
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
--------- ---------
($ IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair
value.................................................. $ 3,132.0 $ 5,950.1
Equity securities available-for-sale at fair value........ 457.2 337.8
Mortgage loans on real estate (Note 12)................... 988.3 1,430.1
Policy loans.............................................. 61.1 1,247.2
Real estate to be disposed of (Note 12)................... 312.9 621.2
Real estate held for investment (Note 12)................. 321.3 495.9
Other invested assets..................................... 40.7 68.6
--------- ---------
5,313.5 10,150.9
--------- ---------
Cash and cash equivalents................................... 270.2 313.4
Accrued investment income................................... 68.9 182.8
Amounts due from reinsurers................................. 475.9 574.5
Premiums receivable......................................... 9.1 21.6
Deferred policy acquisition costs........................... 439.7 1,007.1
Other assets................................................ 316.5 243.0
Assets transferred in Group Pension Transaction (Note 9).... 5,751.8 5,714.9
Separate account assets..................................... 6,090.3 5,403.1
Closed Block assets (Note 19)............................... 6,161.2 --
--------- ---------
Total assets...................................... $24,897.1 $23,611.3
========= =========
LIABILITIES AND SHAREHOLDER'S EQUITY
Future policy benefits...................................... $ 960.0 $ 7,469.4
Policyholders' account balances............................. 1,991.7 2,352.8
Other policyholders' liabilities............................ 104.8 238.5
Amounts due to reinsurers................................... 93.4 104.3
Accounts payable and other liabilities...................... 518.3 539.0
Debt (Note 15).............................................. 375.4 423.6
Current federal income taxes payable........................ 79.1 120.5
Deferred federal income taxes (Note 7)...................... -- 11.5
Liabilities transferred in Group Pension Transaction (Note
9)........................................................ 5,678.5 5,638.7
Separate account liabilities................................ 6,078.1 5,392.4
Closed Block liabilities (Note 19).......................... 7,290.7 --
--------- ---------
Total liabilities................................. 23,170.0 22,290.7
Commitments and contingencies (Notes 8, 17)
Common stock, $1.00 par value; 2 million shares authorized,
issued and outstanding.................................... 2.0 --
Capital in excess of par.................................... 1,564.1 --
Retained earnings........................................... 8.6 1,202.5
Accumulated other comprehensive income...................... 152.4 118.1
--------- ---------
Total shareholder's equity........................ 1,727.1 1,320.6
--------- ---------
Total liabilities and shareholder's equity........ $24,897.1 $23,611.3
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-21
<PAGE> 89
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
1998
PRO FORMA*
1998 1997 1996 (UNAUDITED)
-------- -------- -------- -----------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
REVENUES:
Premiums........................................ $ 621.7 $ 838.6 $ 859.8 $ 77.9
Universal life and investment-type product
policy fees................................... 151.6 127.3 100.9 151.6
Net investment income (Note 10)................. 688.3 733.0 751.6 361.1
Net realized gains on investments (Note 10)..... 168.7 72.1 75.9 160.9
Group Pension Profits........................... 56.8 60.0 59.5 56.8
Other income.................................... 162.6 145.4 117.3 161.3
Contribution from the Closed Block.............. 5.7 52.2
-------- -------- -------- --------
1,855.4 1,976.4 1,965.0 1,021.8
-------- -------- -------- --------
BENEFITS AND EXPENSES:
Benefits to policyholders....................... 679.8 840.1 872.2 124.4
Interest credited to policyholders' account
balances...................................... 112.7 125.9 146.9 105.0
Amortization of deferred policy acquisition
costs......................................... 122.0 181.2 158.2 52.2
Dividends to policyholders...................... 195.8 224.3 231.4 3.3
Other operating costs and expenses.............. 451.7 417.2 455.8 443.5
-------- -------- -------- --------
1,562.0 1,788.7 1,864.5 728.4
-------- -------- -------- --------
Income before income taxes and extraordinary
item.......................................... 293.4 187.7 100.5 293.4
Income tax expense.............................. 102.7 57.3 44.0 102.7
-------- -------- -------- --------
Income before extraordinary item................ 190.7 130.4 56.5 190.7
-------- -------- -------- --------
Extraordinary item -- demutualization expenses,
net (Note 4).................................. 27.2 13.3 -- --
-------- -------- -------- --------
Net income...................................... 163.5 117.1 56.5 $ 190.7
-------- -------- -------- ========
Other comprehensive income, net (Note 10)....... 34.3 33.0 (59.9)
-------- -------- --------
Comprehensive income............................ $ 197.8 $ 150.1 $ (3.4)
======== ======== ========
</TABLE>
- ---------------
* The pro forma information gives effect to the transactions referred to in
Notes 1 and 21.
See accompanying notes to consolidated financial statements.
F-22
<PAGE> 90
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
ACCUMULATED
CAPITAL OTHER TOTAL
COMMON IN EXCESS RETAINED COMPREHENSIVE SHAREHOLDER'S
STOCK OF PAR EARNINGS INCOME EQUITY
------ --------- --------- ------------- -------------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995....... $ $ $ 1,028.9 $145.0 $1,173.9
Comprehensive income:
Net income..................... 56.5 56.5
Other comprehensive income:
Unrealized losses on
investments, net of
unrealized gains,
reclassification
adjustments, and taxes
(Note 10)................. (59.9) (59.9)
---- -------- --------- ------ --------
Comprehensive income............. (3.4)
--------
Balance, December 31, 1996....... 1,085.4 85.1 1,170.5
Comprehensive income:
Net income..................... 117.1 117.1
Other comprehensive income:
Unrealized gains on
investments, net of
unrealized losses,
reclassification
adjustments, and taxes
(Note 10)................. 35.9 35.9
Minimum pension liability
adjustment................ (2.9) (2.9)
------ --------
Other comprehensive income:.... 33.0 33.0
---- -------- --------- ------ --------
Comprehensive income............. 150.1
--------
Balance, December 31, 1997....... 1,202.5 118.1 1,320.6
Demutualization Transaction...... 1,344.2 (1,357.4) (13.2)
Contribution from MONY Group..... 2.0 219.9 221.9
Comprehensive income:
Net income before
demutualization............. 154.9 154.9
Net income after
demutualization............. 8.6 8.6
---- -------- --------- ------ --------
Net income for the year..... 163.5 163.5
Other comprehensive income:
Unrealized losses on
investments, net of
unrealized gains,
reclassification
adjustments, and taxes
(Note 10)................. 31.4 31.4
Minimum pension liability
adjustment................ 2.9 2.9
------ --------
Other comprehensive income:.... 34.3 34.3
---- -------- --------- ------ --------
Comprehensive income............. 197.8
--------
Balance, December 31, 1998....... $2.0 $1,564.1 $ 8.6 $152.4 $1,727.1
==== ======== ========= ====== ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-23
<PAGE> 91
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES (SEE NOTE 4):
Net income................................................ $ 163.5 $ 117.1 $ 56.5
Adjustments to reconcile net income to net cash provided
by operating activities:
Interest credited to policyholders' account balances.... 110.6 122.3 141.2
Universal life and investment-type product policy fee
income............................................... (123.6) (112.9) (98.4)
Capitalization of deferred policy acquisition costs..... (124.5) (141.0) (145.3)
Amortization of deferred policy acquisition costs....... 122.0 181.2 158.2
Provision for depreciation and amortization............. 41.4 55.0 53.8
Provision for deferred federal income taxes............. 11.4 (50.2) (32.6)
Net realized gains on investments....................... (168.7) (72.1) (75.9)
Non-cash distributions from investments................. (35.1) (31.1) (56.1)
Change in other assets and accounts payable and other
liabilities.......................................... (32.7) (177.5) 57.0
Change in future policy benefits........................ 136.2 206.9 191.7
Change in other policyholders' liabilities.............. 32.9 (17.4) 21.4
Change in current federal income taxes payable.......... (14.9) (11.2) 63.3
Initial cash transferred to the Closed Block............ (46.9) -- --
Contribution from the Closed block...................... (5.7) -- --
--------- --------- ---------
Net cash provided by operating activities................. 65.9 69.1 334.8
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities or repayments of:
Fixed maturities........................................ 887.3 952.0 690.1
Equity securities....................................... 177.4 246.7 170.7
Mortgage loans on real estate........................... 424.4 334.4 353.6
Real estate............................................. 578.3 430.8 442.4
Other invested assets................................... 46.0 5.0 13.3
Acquisitions of investments:
Fixed maturities........................................ (1,479.7) (1,336.2) (1,200.8)
Equity securities....................................... (230.5) (211.5) (119.7)
Mortgage loans on real estate........................... (422.4) (183.1) (166.8)
Real estate............................................. (39.5) (52.7) (63.6)
Other invested assets................................... (2.1) (1.7) (1.6)
Policy loans, net....................................... (17.8) (15.9) (12.7)
Other, net.............................................. 8.8 10.1 0.1
Property & equipment, net............................... (30.9) (35.8) (3.9)
Acquisition of subsidiaries, net of cash acquired....... (46.0) -- --
--------- --------- ---------
Net cash provided by investing activities................. $ (146.7) $ 142.1 $ 101.1
--------- --------- ---------
</TABLE>
See accompanying notes to consolidated financial statements.
F-24
<PAGE> 92
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt.......................................... -- 115.0 --
Repayments of debt........................................ (61.3) (126.0) (174.1)
Receipts from annuity and universal life policies credited
to policyholders' account balances...................... 1,254.0 1,226.4 1,204.9
Return of policyholders' account balances on annuity
policies and universal life policies.................... (1,377.0) (1,435.2) (1,584.1)
Other..................................................... -- 6.6 6.7
Contribution from MONY Group (Note 4)..................... 221.9 -- --
--------- --------- ---------
Net cash provided by/(used in) financing activities....... 37.6 (213.2) (546.6)
--------- --------- ---------
Net decrease in cash and cash equivalents................. (43.2) (2.0) (110.7)
Cash and cash equivalents, beginning of year.............. 313.4 315.4 426.1
--------- --------- ---------
Cash and cash equivalents, end of year.................... $ 270.2 $ 313.4 $ 315.4
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
Income taxes.............................................. $ 97.4 $ 114.6 $ 13.6
Interest.................................................. $ 20.3 $ 20.8 $ 36.8
</TABLE>
See accompanying notes to consolidated financial statements.
F-25
<PAGE> 93
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
On November 16, 1998, pursuant to its Plan of Reorganization (the "Plan")
which was approved by the New York Superintendent of Insurance on the same day
(the "Plan Effective Date"), The Mutual Life Insurance Company of New York
("MONY") converted from a mutual life insurance company to a stock life
insurance company (the "Demutualization") and became a wholly owned subsidiary
of The MONY Group Inc., (the "MONY Group" or the "Holding Company"), a Delaware
corporation organized on June 24, 1997 for the purpose of becoming the parent
holding company of MONY. The MONY Group has no other operations or subsidiaries.
In connection with the Plan, MONY established a closed block, as more fully
discussed in Note 3, to fund the guaranteed benefits and dividends of certain
participating insurance policies, and eligible policyholders received cash,
policy credits, or shares of common stock of the MONY Group in exchange for
their membership interests in MONY (see Note 4). Also on November 16, 1998, the
MONY Group consummated an initial public offering (the "Offerings") of
approximately 12.9 million shares of its common stock (see Note 4) and MONY
changed its name to MONY Life Insurance Company (MONY Life Insurance Company and
its subsidiaries are hereafter collectively referred to as "MONY Life" or "the
Company"). The shares of common stock issued in the Offerings are in addition to
approximately 34.3 million shares of common stock of the MONY Group distributed
to the aforementioned eligible policyholders. The Plan and the Offerings are
hereafter collectively referred to as the "Transaction".
The Company is primarily engaged in the business of providing a wide range
of life insurance, annuity, and investment products to higher income
individuals, particularly family builders, pre-retirees, and small business
owners. The Company distributes its products primarily through its career agency
sales force. The Company primarily sells its products in all 50 of the United
States, the District of Columbia, the U.S. Virgin Islands, Guam and the
Commonwealth of Puerto Rico.
On December 31, 1998, MONY Life acquired Sagamore Financial Corporation,
the parent company of U.S. Financial Life Insurance Company ("USFL") for a
purchase price of $48 million. USFL is a special-risk carrier based in Ohio,
which distributes its products in 41 states through brokerage general agencies.
The acquisition was accounted for as a purchase. In conjunction therewith, MONY
Life recorded $18.8 million of goodwill which will be amortized over 20 years.
2. INVESTMENT AGREEMENT:
On December 30, 1997, affiliates of Goldman, Sachs & Co. (the "Investors"),
one of the underwriters for the Offerings, entered into an investment agreement
with MONY (the "Investment Agreement"), pursuant to which: (i) The Investors
purchased, for $115.0 million (the "Consideration"), Surplus Notes issued by
MONY (the "MONY Notes") with an aggregate principal amount equal to the
Consideration (see Note 15), and (ii) the Investor purchased, for $10.0 million,
warrants (the "Warrants") to purchase from the Holding Company (after giving
effect to the initial public offering) in the aggregate 7.0% of the fully
diluted Common Stock as of the first date following such effectiveness on which
shares of Common Stock were first issued to eligible policyholders (December 24,
1998).
3. THE CLOSED BLOCK:
On November 16, 1998, the Company established a closed block (the "Closed
Block") of certain participating insurance policies as defined in the Plan (the
"Closed Block Business"). In conjunction therewith, the Company allocated assets
to the Closed Block expected to produce cash flows which, together with
anticipated revenues from the Closed Block Business, are reasonably expected to
be sufficient to support the Closed Block Business, including but not limited
to, provision for payment of claims and surrender benefits, certain expenses and
taxes, and for continuation of current payable dividend scales in effect at the
date of Demutualization, assuming the experience underlying such dividend scales
F-26
<PAGE> 94
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
continues, and for appropriate adjustments in such scales if the experience
changes. The assets allocated to the Closed Block and the aforementioned
revenues inure solely to the benefit of the owners of policies included in the
Closed Block.
The assets and liabilities allocated to the Closed Block are recorded in
the Company's financial statements at their historical carrying values. The
carrying value of the assets allocated to the Closed Block are less than the
carrying value of the Closed Block liabilities at the Plan Effective Date. The
excess of the Closed Block liabilities over the Closed Block assets at the Plan
Effective Date represents the total estimated future post-tax contribution
expected to emerge from the operation of the Closed Block, which will be
recognized in the Company's income over the period the policies and the
contracts in the Closed Block remain in force.
In determining the amount of assets to be allocated to the Closed Block,
management made certain estimates and assumptions regarding the expected cash
flows from the Closed Block assets and the Closed Block Business, including
estimates and assumptions regarding investment cash flows, mortality,
persistency, and expenses which are to be funded in the Closed Block. The
estimated net cash flows assumed in determining the Closed Block funding
consisted of premiums from policies included in the Closed Block, investment
income from Closed Block assets, proceeds from maturities and dispositions of
Closed Block assets, less benefits paid on Closed Block policies, certain
expenses (including taxes) funded in the Closed Block, and dividends on Closed
Block policies based on current payable dividend scales. To the extent that the
actual cash flows, subsequent to the Plan Effective Date, from the assets
allocated to the Closed Block and the Closed Block Business are, in the
aggregate, more favorable than assumed in establishing the Closed Block, total
dividends paid to the Closed Block policyholders in future years will be greater
than the total dividends that would have been paid to such policyholders if the
current payable dividend scales had been continued. Conversely, to the extent
that the actual cash flows, subsequent to the Plan Effective Date, from the
assets allocated to the Closed Block and the Closed Block Business are, in the
aggregate, less favorable than assumed in establishing the Closed Block, total
dividends paid to the Closed Block policyholders in future years will be less
than the total dividends that would have been paid to such policyholders if the
current payable dividend scales had been continued. Accordingly, the recognition
of the aforementioned estimated future post-tax contribution expected to emerge
from the operation of the Closed Block is not affected by the aggregate actual
experience of the Closed Block assets and the Closed Block Business subsequent
to the Plan Effective Date, except in the unlikely event that the Closed Block
assets and the actual experience of the Closed Block Business subsequent to the
Plan Effective Date are not sufficient to pay the guaranteed benefits on the
Closed Block policies, in which case the Company will be required to fund any
such deficiency from its general account assets outside of the Closed Block.
In addition, MONY Life has undertaken to reimburse the Closed Block from
its general account assets outside the Closed Block for any reduction in
principal payments due on the Series A Notes (which have been allocated to the
Closed Block) pursuant to the terms thereof, as described in Note 9. Since the
Closed Block will be funded to provide for payment of guaranteed benefits and
the continuation of current payable dividends on the policies included therein,
it will not be necessary to use general funds to pay guaranteed benefits unless
the Closed Block Business experiences very substantial ongoing adverse
experience in investment, mortality, persistency or other experience factors.
The Company regularly (at least quarterly) monitors the experience from the
Closed Block and may make changes to the dividend scale, when appropriate, to
ensure that the profits are distributed to the Closed Block policyholders in a
fair and equitable manner. In addition, periodically the New York Insurance
Department requires the filing of an independent auditor's report on the
operations of the Closed Block.
The results of the Closed Block are presented as a single line item in the
Company's statements of income entitled, "Contribution from the Closed Block".
Prior to the establishment of the Closed Block the
F-27
<PAGE> 95
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
results of the assets and policies comprising the Closed Block were reported in
various line items in the Company's income statements, including: premiums,
investment income, net realized gains and losses on investments, benefits,
amortization of deferred acquisition costs, etc. In addition, all assets and
liabilities allocated to the Closed Block will be reported in the Company's
balance sheet separately under the captions "Closed Block assets" and "Closed
Block liabilities", respectively. Accordingly, certain line items in the
Company's financial statements subsequent to the establishment of the Closed
Block reflect material reductions in reported amounts, as compared to years
prior to the establishment of the Closed Block, while having no effect on net
income.
The pre-tax Contribution from the Closed Block includes only those
revenues, benefit payments, dividends, premium taxes, state guaranty fund
assessments, and investment expenses considered in funding the Closed Block.
However, many expenses associated with operating the Closed Block and
administering the policies included therein were excluded from and, accordingly,
are not funded in the Closed Block. These expenses are reported in the Company's
statement of operations, outside of the Contribution from the Closed Block,
consistent with how they are funded. Such expenses are reported in the separate
line items to which they apply based on the nature of such expenses. Federal
income taxes applicable to the Closed Block, which are funded in the Closed
Block, are reflected as a component of federal income tax expense in the
Company's statement of operations. Since many expenses related to the Closed
Block are funded outside the Closed Block, operating costs and expenses outside
the Closed Block are disproportionate to the level of business outside the
Closed Block.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The accompanying consolidated financial statements have been prepared in
conformity with GAAP. Prior to 1996, MONY, as a mutual life insurance company,
prepared its financial statements in conformity with accounting practices
prescribed or permitted by the New York State Insurance Department ("SAP"),
which accounting practices were considered to be GAAP for mutual life insurance
companies. As of January 1, 1996, MONY adopted Financial Accounting Standards
Board ("FASB") Interpretation No. 40, Applicability of Generally Accepted
Accounting Principles to Mutual Life Insurance and Other Enterprises (the
"Interpretation"), and Statement of Financial Accounting Standards ("SFAS") No.
120, Accounting and Reporting by Mutual Life Insurance Enterprises and by
Insurance Enterprises for Certain Long Duration Participating Policies (the
"Standard"). The Interpretation and the Standard require mutual life insurance
companies to adopt all applicable authoritative GAAP pronouncements in their
general purpose financial statements. Accordingly, the initial effect of
applying the Interpretation and the Standard has been reported retroactively
through the restatement of previously issued financial statements presented
herein for comparative purposes (see Note 18). Certain reclassifications have
been made in the amounts presented for prior periods to conform those periods to
the current presentation.
During 1997, the Company adopted SFAS No. 130, Reporting Comprehensive
Income and SFAS 131, Disclosures about Segments of an Enterprise and Related
Information, which were issued by the FASB in June of 1997. SFAS No. 130
established standards for reporting and display of comprehensive income and its
components in general purpose financial statements. SFAS No. 131 established
standards for the way that public business enterprises report information about
operating segments in their annual and interim financial statements. SFAS No.
131 also established standards for disclosures about an enterprise's products
and services, geographic areas, and major customers. All periods presented
herein reflect the provisions of both SFAS No. 130 and SFAS 131.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosure
about Pension and Other Postretirements Benefits", which is effective for fiscal
years beginning after December 15, 1997. SFAS 132 revises and standardizes
disclosure required by SFAS 87, SFAS 88 and SFAS 106. The Company had adopted
this standard for its 1998 fiscal year (see Note 6).
F-28
<PAGE> 96
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ significantly
from those estimates. The most significant estimates made in conjunction with
the preparation of the Company's financial statements include those used in
determining (i) deferred policy acquisition costs, (ii) the liability for future
policy benefits, and (iii) valuation allowances for mortgage loans and real
estate to be disposed of, and impairment writedowns for real estate held for
investment.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company and those partnerships in which the Company has a majority voting
interest. All significant intercompany accounts and transactions have been
eliminated.
Minority interest related to partnerships that are consolidated, which is
included in Accounts Payable and Other Liabilities, amounted to $33.5 million
and $48.7 million at December 31, 1998 and 1997, respectively.
Transaction
In connection with the Demutualization on the Plan Effective Date, eligible
policyholders received, in the aggregate, approximately $20.6 million of cash,
$13.2 million of policy credits and 34.3 million shares of common stock of the
MONY Group in exchange for their membership interest in MONY. The
demutualization was accounted for as a reorganization. Accordingly, the
Company's retained earnings at the Plan Effective Date (net of aforementioned
cash payments and policy credits which were charged directly to retained
earnings) were reclassified to "Common stock" and "Capital in excess of par".
Also, on the Plan Effective Date, the MONY Group consummated the Offerings.
In conjunction therewith, approximately 12.9 million shares of its common stock
were issued at an initial public offering price of $23.50 per share. Net
proceeds from the Offerings totaled $282.5 million. Of the net proceeds,
approximately $221.9 million was contributed to the Company.
In addition, the capital of the Company includes $10.0 million relating to
the Warrants issued by MONY Group(see Note 2), which as a subsidiary of the
Company prior to the Plan Effective Date, was recorded in the Company's
consolidated financial statements as minority interest.
Valuation of Investments and Realized Gains and Losses
All of the Company's fixed maturity securities are classified as
available-for-sale and are reported at estimated fair value. The Company's
equity securities are comprised of investments in common stocks and limited
partnership interests. The Company's investments in common stocks are classified
as available-for-sale and are reported at estimated fair value. The Company
accounts for its investments in limited partnership interests in accordance with
the equity method of accounting or the cost method of accounting depending upon
the Company's percentage of ownership of the partnership and the date it was
acquired. In general, partnership interests acquired after May 18, 1995 are
accounted for in accordance with the equity method of accounting if the
Company's ownership interest exceeds 3 percent, whereas, if the partnership was
acquired prior to May 18, 1995, the equity method would be applied only if the
Company's ownership interest exceeded 20 percent. In all other circumstances the
Company accounts for its investment in limited partnership interests in
accordance with the cost method. Unrealized gains and losses on fixed maturity
securities and common stocks are reported as a separate component of other
comprehensive income, net of deferred income taxes and an adjustment for the
effect on deferred policy
F-29
<PAGE> 97
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
acquisition costs that would have occurred if such gains and losses had been
realized. The cost of fixed maturity securities and common stock is adjusted for
impairments in value deemed to be other than temporary. These adjustments are
reflected as realized losses on investments. Realized gains and losses on sales
of investments are determined on the basis of specific identification.
Mortgage loans on real estate are stated at their unpaid principal
balances, net of valuation allowances. Valuation allowances are established for
the excess of the carrying value of a mortgage loan over its estimated fair
value when the loan is considered to be impaired. Mortgage loans are considered
to be impaired when, based on current information and events, it is probable
that the Company will be unable to collect all amounts due according to the
contractual terms of the loan agreement. Estimated fair value is based on either
the present value of expected future cash flows discounted at the loan's
original effective interest rate, or the loan's observable market price (if
considered to be a practical expedient), or the fair value of the collateral if
the loan is collateral dependent and if foreclosure of the loan is considered
probable. The provision for loss is reported as a realized loss on investment.
Loans in foreclosure and loans considered to be impaired, other than
restructured loans, are placed on non-accrual status. Interest received on
non-accrual status mortgage loans is included in investment income in the period
received. Interest income on restructured mortgage loans is accrued at the
restructured loans' interest rate.
Real estate held for investment, as well as related improvements, is
generally stated at cost less depreciation. Depreciation is determined using the
straight-line method over the estimated useful life of the asset (which may
range from 5 to 40 years). Cost is adjusted for impairment whenever events or
changes in circumstances indicate that the carrying amount of the asset may not
be recoverable. In performing the review for recoverability, management
estimates the future cash flows expected from real estate investments, including
the proceeds on disposition. If the sum of the expected undiscounted future cash
flows is less than the carrying amount of the real estate, an impairment loss is
recognized. Impairment losses are based on the estimated fair value of the real
estate, which is generally computed using the present value of expected future
cash flows from the real estate discounted at a rate commensurate with the
underlying risks. Real estate acquired in satisfaction of debt is recorded at
estimated fair value at the date of foreclosure. Real estate that management
intends to sell is classified as "to be disposed of ". Real estate to be
disposed of is reported at the lower of its current carrying value or estimated
fair value less estimated sales costs. Changes in reported values relating to
real estate to be disposed of and impairments of real estate held for investment
are reported as realized gains or losses on investments.
Policy loans are carried at their unpaid principal balances.
Cash and cash equivalents include cash on hand, amounts due from banks and
highly liquid debt instruments with an original maturity of three months or
less.
Recognition of Insurance Revenue and Related Benefits
Premiums from participating and non-participating traditional life, health
and annuity policies with life contingencies are recognized as premium income
when due. Benefits and expenses are matched with such income so as to result in
the recognition of profits over the life of the contracts. This match is
accomplished by means of the provision for liabilities for future policy
benefits and the deferral and subsequent amortization of policy acquisition
costs.
Premiums from universal life and investment-type contracts are reported as
deposits to policyholders' account balances. Revenue from these types of
products consists of amounts assessed during the period against policyholders'
account balances for policy administration charges, cost of insurance and
surrender charges. Policy benefits charged to expense include benefit claims
incurred in the period in excess of the related policyholders' account balance.
F-30
<PAGE> 98
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deferred Policy Acquisition Costs ("DAC")
The costs of acquiring new business, principally commissions, underwriting,
agency, and policy issue expenses, all of which vary with and are primarily
related to the production of new business, are deferred.
For participating traditional life policies, DAC is amortized over the
expected life of the contracts (30 years) as a constant percentage based on the
present value of estimated gross margins expected to be realized over the life
of the contracts using the expected investment yield. At December 31, 1998, the
expected investment yield was 7.32%, for the year 1999 with subsequent years
grading down to an ultimate aggregate yield of 7.12% in year 2013. Estimated
gross margins include anticipated premiums and investment results less claims
and administrative expenses, changes in the net level premium reserve and
expected annual policyholder dividends.
For universal life products and investment-type products, DAC is amortized
over the expected life of the contracts (ranging from 15 to 30 years) as a
constant percentage based on the present value of estimated gross profits
expected to be realized over the life of the contracts using the initial locked
in contract rate. The contract rate is 8% for all products. Estimated gross
profits arise principally from investment results, mortality and expense margins
and surrender charges.
DAC is subject to recoverability testing at the time of policy issuance and
loss recognition testing at the end of each accounting period. The effect on the
amortization of DAC of revisions in estimated experience is reflected in
earnings in the period such estimates are revised. In addition, the effect on
the DAC asset that would result from the realization of unrealized gains
(losses) is recognized through an offset to Other Comprehensive Income as of the
balance sheet date.
Future Policy Benefits and Policyholders' Account Balances
Future policy benefit liabilities for participating traditional life
policies are calculated using a net level premium method on the basis of
actuarial assumptions equal to guaranteed mortality and dividend fund interest
rates. The liability for annual dividends represents the accrual of annual
dividends earned. Dividend fund interest assumptions range from 2.0 percent to
5.5 percent.
Policyholders' account balances for universal life and investment-type
contracts represent an accumulation of gross premium payments plus credited
interest less expense and mortality charges and withdrawals. The weighted
average interest crediting rate for universal life products was approximately
5.7 percent, 5.8 percent, and 5.8 percent for the years ended December 31, 1998,
1997, and 1996, respectively. The weighted average interest crediting rate for
investment-type products was approximately 5.6 percent for each of the years
ended December 31, 1998, 1997, and 1996, respectively.
Dividends to Policyholders
Dividends to policyholders, which are substantially all on the Closed Block
Business (see Note 3) are determined annually by the Board of Directors of MONY
Life. The aggregate amount of policyholders' dividends is related to actual
interest, mortality, morbidity and expense experience for the year.
Participating Business
At December 31, 1998 and 1997, participating business, substantially all of
which is in the Closed Block, represented approximately 72.6% and 81.0% of the
Company's life insurance in force, and 84.2% and 88.4% of the number of life
insurance policies in force, respectively. For each of the years ended December
31, 1998 and 1997, participating business, represented approximately 99.9% of
life insurance premiums.
F-31
<PAGE> 99
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Property, Equipment, and Leasehold Improvements
Property, equipment and leasehold improvements, which are reported in Other
Assets, are stated at cost less accumulated depreciation and amortization.
Depreciation is determined using the straight-line method over the estimated
useful lives of the related assets which generally range from 3 to 40 years.
Amortization of leasehold improvements is determined using the straight-line
method over the lesser of the unexpired lease term or the estimated useful life
of the improvement.
Accumulated depreciation of property and equipment and amortization of
leasehold improvements was $71.0 million and $58.5 million at December 31, 1998
and 1997, respectively. Related depreciation and amortization expense was $11.4
million, $8.8 million, and $5.9 million for the years ended December 31, 1998,
1997, and 1996, respectively.
Federal Income Taxes
The Company files a consolidated federal income tax return with its life
and non-life affiliates, except Sagamore Financial Corporation and its
subsidiaries. Deferred income tax assets and liabilities are recognized based on
the difference between financial statement carrying amounts and income tax bases
of assets and liabilities using enacted income tax rates and laws.
Reinsurance
The Company has reinsured certain of its life insurance and investment
contracts with other insurance companies under various agreements. Amounts due
from reinsurers are estimated based on assumptions consistent with those used in
establishing the liabilities related to the underlying reinsured contracts.
Policy and contract liabilities are reported gross of reserve credits. Gains on
reinsurance are deferred and amortized into income over the remaining life of
the underlying reinsured contracts.
In determining whether a reinsurance contract qualifies for reinsurance
accounting, SFAS No. 113 requires that there be a "reasonable possibility" that
the reinsurer may realize a "significant loss" from assuming insurance risk
under the contract. In making this assessment, the Company projects the results
of the policies reinsured under the contract under various scenarios and
assesses the probability of such results actually occurring. The projected
results represent the present value of all the cash flows under the reinsurance
contract. The Company generally defines a "reasonable possibility" as having a
probability of at least 10%. In assessing whether the projected results of the
reinsured business constitute a "significant loss", the Company considers: (i)
the ratio of the aggregate projected loss, discounted at an appropriate rate of
interest (the "aggregate projected loss"), to an estimate of the reinsurer's
investment in the contract, as hereafter defined, and (ii) the ratio of the
aggregate projected loss to an estimate of the total premiums to be received by
the reinsurer under the contract discounted at an appropriate rate of interest.
The reinsurer's investment in a reinsurance contract consists of amounts
paid to the ceding company at the inception of the contract (e.g. expense
allowances and the excess of liabilities assumed by the reinsurer over the
assets transferred to the reinsurer under the contract) plus the amount of
capital required to support such business consistent with prudent business
practices, regulatory requirements, and the reinsurer's credit rating. The
Company estimates the capital required to support such business based on what it
considers to be an appropriate level of risk-based capital in light of
regulatory requirements and prudent business practices.
Separate Accounts
Separate accounts are established in conformity with insurance laws and are
generally not chargeable with liabilities that arise from any other business of
the Company. Separate account assets are subject to general account claims only
to the extent that the value of such assets exceeds the separate account
F-32
<PAGE> 100
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
liabilities. Investments held in separate accounts and liabilities of the
separate accounts are reported separately as assets and liabilities.
Substantially all separate account assets are reported at estimated fair value.
Investment income and gains or losses on the investments of separate accounts
accrue directly to contractholders and, accordingly, are not reflected in the
Company's consolidated statements of income and cash flows. Fees charged to the
separate accounts by the Company (including mortality charges, policy
administration fees and surrender charges) are reflected in the Company's
revenues.
Consolidated Statements of Cash Flows -- Non-cash Transactions
For the years ended December 31, 1998, 1997, and 1996, respectively, real
estate of $5.0 million, $14.4 million, and $29.1 million was acquired in
satisfaction of debt. At December 31, 1998 and 1997, the Company owned real
estate acquired in satisfaction of debt of $143.2 million and $326.1 million,
respectively. Other non-cash transactions, which are reflected in the statement
of cash flows as a reconciling item from net income to net cash provided by
operating activities, consisted primarily of stock distributions from the
Company's partnership investments and payment-in-kind for interest due on
certain fixed maturity securities.
Extraordinary Item -- Demutualization Expenses
The accompanying consolidated statements of income and comprehensive income
reflect extraordinary charges (net of taxes) of $27.2 million and $13.3 million
for the years ended December 31, 1998 and 1997, respectively, relating to costs
associated with the Demutualization.
New Accounting Pronouncements
In January 1998, the American Institute of Certified Public Accountants
issued Statement of Position (SOP) 97-3, "Accounting by Insurance and Other
Enterprises for Insurance-Related Assessments". SOP 97-3 provides guidance for
determining when an entity should recognize a liability for guaranty fund and
other insurance-related assessments and when it may recognize an asset for a
portion or all of the assessment liability or paid assessment that can be
recovered through premium tax offsets or policy surcharges. SOP 97-3 is
effective for fiscal years beginning after December 15, 1998. Adoption of SOP
97-3 is not expected to have a material effect on the Company's financial
condition or results of operations.
In March 1998, the American Institute of Certified Public Accountants
issued (SOP) 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use". SOP 98-1 provides guidance for determining when an
entity should capitalize or expense external and internal costs of computer
software developed or obtained for internal use. SOP 98-1 is effective for
fiscal years beginning after December 15, 1998. Adoption of SOP 98-1 is not
expected to have a material effect on the Company's financial condition or
results of operations.
In June 1998, The FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 requires all derivatives to be
recognized in the statement of financial position as either assets or
liabilities and measured at fair value. The corresponding derivative gains and
losses should be reported based on the hedge relationship that exists, if there
is one. Changes in the fair value of derivatives that are not designated as
hedges or that do not meet the hedge accounting criteria in SFAS 133, are
required to be reported in earnings. SFAS 133 is effective for fiscal years
beginning after June 15, 1999. Adoption of SFAS 133 is not expected to have a
material effect on the Company's financial condition or results of operations.
F-33
<PAGE> 101
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. DEFERRED POLICY ACQUISITION COSTS:
Policy acquisition costs deferred and amortized in 1998, 1997 and 1996 are
as follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year.................................. $1,007.1 $1,095.2 $1,047.1
Balance transferred to the Closed Block at November 16,
1998...................................................... (562.3) -- --
-------- -------- --------
444.8 1,095.2 1,047.1
-------- -------- --------
Cost deferred during the year............................... 124.7 141.0 145.3
Amortized to expense during the year........................ (122.0) (181.2) (158.2)
Effect on DAC from unrealized gains (losses) (see Note 4)... (7.8) (47.9) 61.0
-------- -------- --------
Balance, end of year........................................ $ 439.7 $1,007.1 $1,095.2
======== ======== ========
</TABLE>
6. PENSION PLANS AND OTHER POST-RETIREMENT BENEFITS:
Pension Plans --
The Company has a qualified pension plan covering substantially all of its
salaried employees. The provisions of the plan provide both (a) defined benefit
accruals based on (i) years of service, (ii) the employee's final average annual
compensation and (iii) wage bases or benefits under Social Security and (b)
defined contribution accruals based on a Company matching contribution equal to
100% of the employee's elective deferrals under the incentive savings plan for
employees up to 3% of the employee's eligible compensation and an additional 2%
of eligible compensation for each active participant. The Company did not make
any contribution in the current year or prior years under Section 404 of the
Internal Revenue Code ("IRC") because the plan was fully funded under Section
412 of IRC.
In April 1996, the Company offered special benefits to its employees who
elected by May 31, 1996, voluntary termination of employment (special
termination benefits). The special termination benefits represented benefits in
excess of that which would normally be due to employees electing to retire
early. These excess benefits were calculated based on grants of additional years
of service and age used in the benefit calculation. All of the special
termination benefits relating to the Company's qualified plan, which aggregated
$10.6 million, were paid from the plan's assets. All the benefits paid relating
to the Company's non-qualified plan, which aggregated $3.4 million, were paid
directly from the Company's assets. As a result of the aforementioned early
retirement offer, the Company recorded a charge of $14.0 million in 1996 and
reflected this amount in Other Operating Costs and Expenses.
The assets of the qualified pension plan are primarily invested in MONY
Pooled Accounts which include common stock, real estate, private placement debt
securities and bonds. At December 31, 1998 and 1997, $457.3 million and $430.3
million were invested in the MONY Pooled Accounts. Benefits of $26.3 million,
$24.2 million and $30.7 million were paid by this plan for the years ended
December 31, 1998, 1997, and 1996, respectively.
The Company also sponsors a non-qualified employee excess pension plan,
which provides both defined benefits and defined contribution accruals in excess
of Internal Revenue Service limits to certain employees. The benefits are based
on years of service and the employees final average annual compensation. Pension
benefits are paid from the Company's general account.
Postretirement Benefits --
The Company provides certain health care and life insurance for retired
employees and field underwriters. The Company amortizes its unamortized
postretirement transaction obligation over a period of twenty years.
F-34
<PAGE> 102
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plan. A one-percentage point change in
assumed health care cost trend rates would have the following effects:
<TABLE>
<CAPTION>
1-PERCENTAGE- 1-PERCENTAGE-
POINT POINT
INCREASE DECREASE
------------- -------------
<S> <C> <C>
Effect on total of service and interest cost components..... $ 27,328 $ (29,218)
Effect on postretirement benefit obligation................. 294,001 (328,624)
</TABLE>
The following presents the change in the benefit obligation, change in plan
assets and other information with respect to the Company's qualified and
non-qualified defined benefit pension plans and other benefits which represents
the Company's postretirement benefit obligation:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------- ------------------
1998 1997 1998 1997
------ ------ ------- -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of year............... $390.1 $348.5 $ 101.1 $ 93.4
Service cost.......................................... 14.4 12.9 1.3 1.0
Interest cost......................................... 26.3 27.5 6.4 6.7
Actuarial (gain)/loss................................. 2.0 33.0 (3.0) 7.4
Benefit paid.......................................... (34.5) (31.8) (5.8) (7.4)
------ ------ ------- -------
Benefit obligation at end of year..................... 398.3 390.1 100.0 101.1
------ ------ ------- -------
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year........ $432.5 $393.4 $ $
Actual return on plan assets.......................... 56.7 66.5
Employer contribution................................. 5.1 4.4 5.8 7.4
Benefits and expenses paid............................ (34.5) (31.8) (5.8) (7.4)
------ ------ ------- -------
Fair value of plan assets at end of year.............. 459.8 432.5 -- --
------ ------ ------- -------
Funded status......................................... 61.5 42.4 (100.0) (101.1)
Unrecognized actuarial loss/(gain).................... 16.4 19.7 11.1 14.3
Unamortized transition obligation..................... (19.8) (27.3) 42.7 45.8
Unrecognized prior service cost....................... 9.7 10.7 0.0 0.0
------ ------ ------- -------
Net amount recognized................................. $ 67.8 $ 45.5 $ (46.2) $ (41.0)
====== ====== ======= =======
Amounts recognized in the statement of financial
position consist of:
Prepaid benefit cost.................................. $103.0 $ 89.4 $ 0.0 $ 0.0
Accrued benefit liability............................. (39.5) (45.3) (46.2) (41.0)
Intangible asset...................................... 1.4 4.3 0.0 0.0
Accumulated other comprehensive income................ 2.9 (2.9) 0.0 0.0
------ ------ ------- -------
Net amount recognized................................. $ 67.8 $ 45.5 $ (46.2) $ (41.0)
====== ====== ======= =======
</TABLE>
The Company's qualified plan had assets of $459.8 million and $432.5
million as of December 31, 1998 and December 31, 1997, respectively. The
projected benefit obligation and accumulated benefit obligation for the
qualified plan were $350.8 million and $311.5 million as of December 31, 1998
and $333.2 million and $306.3 million as of December 31, 1997, respectively.
F-35
<PAGE> 103
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The projected benefit obligation and accumulated benefit obligation for the
unfunded non-qualified defined benefit pension plan, which is unfunded, were
$47.5 million and $39.5 million as of December 31, 1998, and $56.9 million and
$45.3 million as of December 31, 1997, respectively.
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------- --------------
1998 1997 1998 1997
------ ------ ----- -----
<S> <C> <C> <C> <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:
Discount rate............................................... 6.75% 6.75% 6.75% 6.75%
Expected return on plan assets.............................. 10.0% 10.0% -- --
Rate of compensation increase............................... 5.0% 5.0% 5.0% 5.0%
</TABLE>
For measurement purposes, an 11% percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1998. The rate was
assumed to decrease gradually to 6% percent for 2010 and remain at that level
thereafter.
Components of net periodic benefit cost for the pension and other
post-retirement plans are as follows:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
-------------------------- -----------------------
1998 1997 1996 1998 1997 1996
------ ------ ------ ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost............................ $ 14.4 $ 12.9 $ 13.9 $ 1.3 $ 1.0 $ 1.8
Interest cost........................... 26.3 27.5 25.1 6.4 6.7 6.4
Expected return on plan assets.......... (41.8) (38.0) (36.7) 0.0 0.0 0.0
Amortization of prior service cost...... 1.0 1.0 1.0 0.0 0.0 0.0
Special termination benefits............ 0.0 0.0 14.0 0.0 0.0 0.0
Recognized net actuarial loss........... 0.0 0.1 0.1 0.1 0.0 0.4
Amortization of transition items........ (7.5) (7.5) (7.5) 3.1 3.1 3.1
------ ------ ------ ----- ----- -----
Net periodic benefit cost............... $ (7.6) $ (4.0) $ 9.9 $10.9 $10.8 $11.7
====== ====== ====== ===== ===== =====
</TABLE>
The Company also has a qualified money purchase pension plan covering
substantially all career field underwriters. Company contributions of 5% of
earnings plus an additional 2% of such earnings in excess of the social security
wage base are made each year. In addition, after-tax voluntary field underwriter
contributions of up to 10% of earnings are allowed. At December 31, 1998 and
1997, the fair value of plan assets was $222.2 million and $211.0 million,
respectively. For the years ended December 31, 1998, 1997, and 1996, the Company
contributed $3.2 million, $3.3 million and $3.7 million to the plan,
respectively, which amounts are reflected in Other Operating Costs and Expenses.
The Company has a non-qualified defined contribution plan, which is
unfunded. The non-qualified defined contribution plan projected benefit
obligation which equaled the accumulation benefit was $48.4 million and $42.9
million as of December 31, 1998 and 1997, respectively. The non-qualified
defined contribution plan's net periodic expense was $6.6 million, $9.4 million
and $7.2 million for the years ending December 31, 1998, 1997 and 1996,
respectively.
The Company also has incentive savings plans in which substantially all
employees and career field underwriters are eligible to participate. The Company
matches field underwriter contributions up to 2% of eligible compensation and
may also make an additional profit sharing contribution for non-officer
employees. As with the Employee Excess Plan, the Company also sponsors
non-qualified excess defined contribution plans for both the field underwriter
retirement plan and the incentive savings plan for field underwriters.
F-36
<PAGE> 104
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
7. FEDERAL INCOME TAXES:
The Company files a consolidated federal income tax return with its life
and non-life affiliates, except Sagamore Financial Corporation and its
subsidiaries.
Federal income taxes have been calculated in accordance with the provisions
of the Internal Revenue Code of 1986, as amended. A summary of the Federal
income tax expense (benefit) is presented below:
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Federal income tax (benefit) expense:
Current................................................... $ 84.6 $104.1 $ 76.6
Deferred.................................................. 18.1 (46.8) (32.6)
------ ------ ------
Total............................................. $102.7 $ 57.3 $ 44.0
====== ====== ======
</TABLE>
Federal income taxes reported in the consolidated statements of income are
different from the amounts determined by multiplying the earnings before federal
income taxes by the statutory federal income tax rate of 35%. The sources of the
difference and the tax effects of each are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- ------
($ IN MILLIONS)
<S> <C> <C> <C>
Tax at statutory rate....................................... $102.7 $65.7 $ 35.2
Differential earnings amount................................ -- (5.8) 12.8
Dividends received deduction................................ (1.4) (0.5) (0.5)
Other....................................................... 1.4 (2.1) (3.5)
------ ----- ------
Provision for income taxes.................................. $102.7 $57.3 $ 44.0
====== ===== ======
</TABLE>
The Company's federal income tax returns for years through 1991 have been
examined by the Internal Revenue Service ("IRS"). No material adjustments were
proposed by the IRS as a result of these examinations. In the opinion of
management, adequate provision has been made for any additional taxes which may
become due with respect to open years.
F-37
<PAGE> 105
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of deferred tax liabilities and assets at December 31, 1998
and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
($ IN MILLIONS)
<S> <C> <C>
Deferred policy acquisition costs........................... $127.9 $251.4
Fixed maturities and equity securities...................... 68.2 65.8
Other (net)(1).............................................. 71.3 27.3
Nonlife subsidiaries........................................ 8.3 0.0
------ ------
Total deferred tax liabilities.............................. 275.7 344.5
------ ------
Policyholder and separate account liabilities............... 113.8 176.0
Accrued expenses............................................ 70.4 55.2
Deferred compensation and benefits.......................... 24.0 8.6
Policyholder dividends...................................... 39.8 39.1
Real estate and mortgages................................... 29.4 54.1
------ ------
Total deferred tax assets................................... 277.4 333.0
------ ------
Net deferred tax asset/(liability).......................... $ 1.7 $(11.5)
====== ======
</TABLE>
- ---------------
(1) Includes $25.7 million and $20.9 million at December 31, 1998 and 1997 of
deferred taxes relating to net unrealized gains on fixed maturity securities
in the AEGON Portfolio (see Note 9).
The Company is required to establish a valuation allowance for any portion
of the deferred tax asset that management believes will not be realized. In the
opinion of management, it is more likely than not that it will realize the
benefit of the deferred tax assets and, therefore, no such valuation allowance
has been established.
8. LEASES:
The Company has entered into various operating lease agreements for office
space, furniture and equipment. These leases have remaining non-cancelable lease
terms in excess of one year. Total rental expense for these operating leases
amounted to $8.6 million in 1998, $14.5 million in 1997 and $15.1 million in
1996. The future minimum rental obligations under these leases at December 31,
1998 are as follows ($ in millions):
<TABLE>
<S> <C>
1999........................................................ $ 8.6
2000........................................................ 7.3
2001........................................................ 6.1
2002........................................................ 7.7
2003........................................................ 7.5
Later years................................................. 106.7
------
$143.9
======
</TABLE>
9. THE GROUP PENSION TRANSACTION:
On December 31, 1993 (the "Group Pension Transaction Date"), the Company
entered into an agreement (the "Agreement") with AEGON USA, Inc. ("AEGON") under
which the Company transferred a substantial portion of its group pension
business (hereafter referred to as the "Group Pension Transaction"), including
its full service group pension contracts, consisting primarily of tax-deferred
annuity, 401(k) and managed funds lines of business, to AEGON's wholly owned
subsidiary, AUSA Life
F-38
<PAGE> 106
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Insurance Company, Inc. ("AUSA"). The Company also transferred to AUSA the
corporate infrastructure supporting the group pension business, including data
processing systems, facilities and regional offices. AUSA was newly formed by
AEGON solely for the purpose of facilitating this transaction. In connection
with the transaction, the Company and AEGON have entered into certain service
agreements. These agreements, among other things, provide that the Company will
continue to manage the transferred assets, and that AUSA will continue to
provide certain administrative services to the Company's remaining group pension
contracts not included in the transfer.
The transferred group pension business consisted of approximately $6.4
billion in group pension assets and liabilities, which was comprised of
approximately $2.8 billion of general account assets and liabilities, and $3.6
billion of separate account assets and liabilities. The transfer was initially
structured in the form of indemnity reinsurance, however, the Agreement
contemplated that the transfer would be restructured in the form of assumption
reinsurance as soon as practicable following the consent of contractholders to
assumption of their contracts. Substantially all of the contractholders
consented to the assumption of their contracts by AUSA.
In addition, pursuant to the Agreement, MONY agreed to make a $200 million
capital investment in AEGON by purchasing $150 million face amount of Series A
Notes and $50 million face amount of Series B Notes (hereinafter referred to as
the "Notes"). The Series A Notes pay interest at 6.44 percent per annum and the
Series B Notes pay interest at 6.24 percent per annum. Both the Series A Notes
and the Series B Notes mature on December 31, 2002. MONY's investment in the
Series A Notes was intended to provide AEGON with the funding necessary to
capitalize AUSA.
The Company entered into the Group Pension Transaction due to downgrades of
its financial strength ratings resulting from the deterioration of its financial
position during the period from 1989 through the early 1990s. The Company's
group pension business was considered to be particularly sensitive to heightened
withdrawal and surrender activity due to requirements of many pension fund
advisors that insurance carriers have a minimum financial strength rating
consistent with a "AA" claims-paying ability rating from Standard & Poor's. In
light of the downgrades and certain highly publicized failures of life insurance
companies in the 1990s resulting from abnormally high withdrawal and surrender
activity, management became concerned with respect to the Company's ability to
sustain inordinate amounts of such activity and entered into the Group Pension
Transaction to preserve the value of such business. The transaction allowed the
Company to: (i) place the transferred Group Pension Business in a higher rated
entity which significantly diminished the risk of adverse persistency with
respect to such business, and (ii) retain all the profits resulting from the
$6.4 billion of deposits on contracts in force and transferred to AEGON on the
Group Pension Transaction Date (the "Existing Deposits"). As consideration for
the transaction, MONY remunerated AEGON by transferring to AUSA (i) the
intangible value associated with MONY's group pension franchise, including
established customer relationships, (ii) rights to substantially all the profits
associated with any new deposits made after the Group Pension Transaction Date
on the contracts which were in force and transferred by MONY to AUSA on the
Group Pension Transaction Date, and (iii) rights to substantially all the
profits on any new business generated subsequent to the Group Pension
Transaction Date.
In accordance with GAAP, the transaction did not constitute a sale because
the Company retained substantially all the risks and rewards associated with the
Existing Deposits. Accordingly, the Company continues to reflect the transferred
assets and liabilities on its balance sheet under separate captions entitled
"Assets transferred in Group Pension Transaction" and "Liabilities transferred
in Group Pension Transaction". In addition, the Company reports in its GAAP
earnings the profits from the Existing Deposits as discussed below.
Pursuant to the Agreement, MONY receives from AUSA (i) payments on an
annual basis through December 31, 2002 (the "Group Pension Payments") equal to
all of the earnings from the Existing
F-39
<PAGE> 107
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Deposits, (ii) a final payment (the "Final Value Payment") at December 31, 2002
based on the remaining fair value of the Existing Deposits, and (iii) a
contingent payment (the "New Business Growth Payment") at December 31, 2002
based on new business growth subsequent to the Transaction Date. However, the
level of new business growth necessary for MONY to receive the New Business
Growth Payment make it unlikely that MONY will ever receive any such payment.
With respect to the Group Pension Payments, the annual results from the
Existing Deposits are measured on a basis in accordance with the Agreement (such
basis hereafter referred to as the "Earnings Formula") which is substantially
the same as GAAP, except that; (i) asset impairments on fixed maturity
securities are only recognized when such securities are designated with an NAIC
rating of "6", and (ii) no impairment losses are recognized on mortgage loans
until such loans are disposed of or at the time, and in the calculation, of the
Final Value Payment.
Earnings which emerge from the Existing Deposits pursuant to the
application of the Earnings Formula are recorded in the Company's financial
statements only after adjustments (primarily to recognize asset impairments in
accordance with SFAS Nos. 114 and 115) to reflect such earnings on a basis
entirely in accordance with GAAP (such earnings hereafter referred to as the
"Group Pension Profits"). Losses which arise from the application of the
Earnings Formula for any annual period will be reflected in the Company's
results of operations (after adjustments to reflect such losses in accordance
with GAAP) only up to the amount for which the Company is at risk (as described
below), which at any time is equal to the then outstanding principal amount of
the Series A Notes.
Operating losses reported in any annual period pursuant to the Earnings
Formula are carried forward to reduce any earnings in subsequent years reported
pursuant to the Earnings Formula. Any resultant deficit remaining at December
31, 2002 will be deducted from the Final Value Payment and New Business Growth
Payment, if any, due to the Company. If a deficit still remains, it will be
applied (as provided for in the Agreement) as an offset against the principal
payment due to the Company upon maturity of the Series A Notes.
For the years ended December 31, 1998, 1997 and 1996, AUSA reported
earnings to the Company pursuant to the application of the Earnings Formula of
$49.8 million, $55.7 million, and $66.7 million, respectively, and the Company
recorded Group Pension Profits of $56.8 million, $60.0 million and $59.5
million, respectively. In addition, the Company earned $12.8 million, $17.7
million, and $23.0 million of interest income on the Notes during the
aforementioned years. From 1994 through 1996, the Company reinvested an
aggregate of $169 million of the aforementioned profits and interest in
additional Series A notes (the "Additional Notes") with a face amount equal to
the amount reinvested. The Additional Notes paid interest at 1% above the
two-year U.S. Treasury rate in effect at the time of their issuance. All of the
Additional Notes were redeemed at face value by AEGON during 1997. At December
31, 1998, the remaining Series A notes held by the Company consisted of the
$150.0 million face amount of Series A Notes it acquired on December 31, 1993.
The following sets forth certain summarized financial information relating
to the Group Pension Transaction as of and for the periods indicated, including
information regarding: (i) the general account assets transferred to support the
Existing Deposits in the Group Pension Transaction (such assets hereafter
F-40
<PAGE> 108
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
referred to as the "AEGON Portfolio"), (ii) the transferred separate account
assets and liabilities, and (iii) the components of revenue and expense
comprising the Group Pension Profits:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------
1998 1997
-------- --------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
General Account
Fixed maturities: available for sale, at estimated fair
value (amortized cost; $1,564.6 and $1,585.4,
respectively)......................................... $1,620.2 $1,645.0
Mortgage loans on real estate.......................... 214.8 347.9
Real estate held for investment........................ 37.9 50.4
Cash and cash equivalents.............................. 21.7 24.5
Accrued investment income.............................. 27.6 33.1
-------- --------
Total general account assets........................... 1,922.2 2,100.9
Separate account assets................................... 3,829.6 3,614.0
-------- --------
Total assets...................................... $5,751.8 $5,714.9
======== ========
LIABILITIES:
General Account(1)
Policyholders' account balances........................ $1,824.9 $1,991.0
Other liabilities...................................... 24.0 33.7
-------- --------
Total general account liabilities................. 1,848.9 2,024.7
Separate account liabilities(2)........................... 3,829.6 3,614.0
-------- --------
Total liabilities................................. $5,678.5 $5,638.7
======== ========
</TABLE>
- ---------------
(1) Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $121.7
million and $142.8 million as of December 31, 1998 and 1997, respectively.
(2) Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $33.3 million
and $31.1 million as of December 31, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1998 1997 1996
-------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C>
REVENUES:
Product policy fees......................................... $ 23.3 $ 23.7 $ 24.7
Net investment income....................................... 154.7 169.3 192.4
Net realized gains (losses) on investments.................. 7.2 7.1 (7.4)
------ ------ ------
Total revenues.................................... 185.2 200.1 209.7
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances........ 108.7 117.3 125.9
Other operating costs and expenses.......................... 19.7 22.8 24.3
------ ------ ------
Total benefits and expenses....................... 128.4 140.1 150.2
Group Pension Profits............................. $ 56.8 $ 60.0 $ 59.5
====== ====== ======
</TABLE>
F-41
<PAGE> 109
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Fixed Maturity Securities
At December 31, 1998 and 1997, there were no fixed maturity securities in
the AEGON Portfolio deemed to have other than temporary impairments in value. In
addition, there were no fixed maturity securities at such dates which have been
non-income producing for the preceding twelve months.
At December 31, 1998 and 1997, the carrying value of problem fixed
maturities (as hereafter defined -- see Note 11) held in the AEGON Portfolio was
$0.0 million and $24.4 million, respectively. In addition, at such dates the
carrying value of potential problem fixed maturities held in the AEGON Portfolio
was $3.7 million and $7.4 million, respectively. Also, none of the fixed
maturity securities held in the AEGON Portfolio at December 31, 1998 and 1997 or
prior thereto had been restructured.
The amortized cost and estimated fair value of fixed maturity securities
held in the AEGON Portfolio, by contractual maturity dates, (excluding scheduled
sinking funds), as of December 31, 1998 are as follows ($ in millions):
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
<S> <C> <C>
Due in one year or less..................................... $ 162.6 $ 164.1
Due after one year through five years....................... 752.2 778.2
Due after five years through ten years...................... 304.6 322.2
Due after ten years......................................... 37.7 38.3
-------- --------
Subtotal.................................................... 1,257.1 1,302.8
Mortgage and asset backed securities........................ 307.5 317.4
-------- --------
Total............................................. $1,564.6 $1,620.2
======== ========
</TABLE>
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
The net change in unrealized investment gains (losses) represents the only
component of other comprehensive income generated by the AEGON Portfolio for the
years ended December 31, 1998, 1997, 1996 and prior thereto. Following is a
summary for the AEGON Portfolio of the change in unrealized investment gains
(losses) (see Note 10):
<TABLE>
<CAPTION>
1998 1997 1996
----- ----- ------
($ IN MILLIONS)
<S> <C> <C> <C>
CHANGE IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS
Fixed maturities............................................ $(4.0) $(1.5) $(41.6)
----- ----- ------
</TABLE>
Mortgage Loans on Real Estate
Mortgage loans on real estate in the AEGON Portfolio at December 31, 1998
and 1997 consist of the following ($ in millions):
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1998 1997
------- -------
<S> <C> <C>
Mortgage loans.............................................. $230.8 $361.5
Less: valuation allowances.................................. (16.0) (13.6)
------ ------
Mortgage loans, net of valuation allowance.................. $214.8 $347.9
====== ======
</TABLE>
F-42
<PAGE> 110
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
An analysis of the valuation allowances with respect to the AEGON Portfolio
for 1998, 1997 and 1996 is as follows ($ in millions):
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Balance, beginning of year.................................. $13.6 $22.2 $31.8
Increase (decrease) in allowance............................ 2.9 (5.1) (8.7)
Reduction due to pay downs and pay offs..................... ( 0.5) (1.6) 0.0
Transfers to real estate.................................... 0.0 (1.9) (0.9)
----- ----- -----
Balance, end of year........................................ $16.0 $13.6 $22.2
===== ===== =====
</TABLE>
Impaired mortgage loans along with related valuation allowances with
respect to the AEGON Portfolio at December 31, 1998 and 1997 are as follows ($
in millions):
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Investment in impaired mortgage loans (before valuation
allowances):
Loans that have valuation allowances...................... $ 71.1 $ 56.6 $ 92.2
Loans that do not have valuation allowances............... 4.4 45.8 53.5
------ ------ ------
Subtotal.......................................... 75.5 102.4 145.7
Valuation allowances........................................ (11.4) (5.8) (9.8)
------ ------ ------
Impaired mortgage loans, net of valuation allowances........ $ 64.1 $ 96.6 $135.9
====== ====== ======
</TABLE>
Impaired mortgage loans that do not have valuation allowances are loans
where the net present value of the expected future cash flows related to the
loan or the fair value of the collateral equals or exceeds the recorded
investment in the loan. Such loans primarily consist of restructured loans.
During the years ended December 31, 1998, 1997, and 1996, the average
recorded investment in impaired mortgage loans with respect to the AEGON
Portfolio was approximately $80.4 million, $116.3 million, and $127.4 million,
respectively. For the years ended December 31, 1998, 1997, and 1996
approximately $4.5 million, $6.5 million, and $13.1 million, respectively, of
interest income on impaired loans with respect to the AEGON Portfolio was
earned.
At December 31, 1998 and 1997, the carrying values of mortgage loans which
were non-income producing for the twelve months preceding such dates with
respect to the AEGON Portfolio were $0.0 million and $21.6 million,
respectively.
At December 31, 1998 and 1997 the AEGON Portfolio held restructured
mortgage loans of $59.7 million and $88.5 million, respectively. Interest income
of $4.0 million, $6.6 million, and $10.4 million was recognized on restructured
mortgage loans for the years ended December 31, 1998, 1997, and 1996,
respectively. Gross interest income on these loans that would have been recorded
in accordance with the original terms of such loans amounted to approximately
$6.9 million, $9.2 million, and $11.1 million for the years ended December 31,
1998, 1997, and 1996, respectively.
F-43
<PAGE> 111
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table presents the maturity distribution of mortgage loans
held in the AEGON Portfolio as of December 31, 1998 ($ in millions).
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------
CARRYING % OF
VALUE TOTAL
-------- -----
<S> <C> <C>
Due in one year or less..................................... $ 64.3 29.9%
Due after one year through five years....................... 101.2 47.1
Due after five years through ten years...................... 42.1 19.6
Due after ten years......................................... 7.2 3.4
------ -----
Total............................................. $214.8 100.0%
====== =====
</TABLE>
Real Estate
As of December 31, 1998 and 1997, the AEGON Portfolio had real estate held
for investment of $37.9 million and $50.4 million, respectively, which includes
$18.2 million and $25.6 million, respectively, of impairments taken upon
foreclosure of mortgage loans. Losses recorded during the years ended December
31, 1998, 1997 and 1996 related to impairments taken upon foreclosure were $0.0
million, $4.3 million, and $16.8 million, respectively.
Real estate is net of accumulated depreciation of $2.5 million, and $1.8
million at December 31, 1998 and 1997, respectively. Depreciation expense of
$1.1 million, $1.4 million, and $0.7 million, was recorded for the years ended
December 31, 1998, 1997, and 1996, respectively.
There was no real estate included in the AEGON Portfolio which was
non-income producing for the twelve months preceding December 31, 1998, 1997,
and 1996, respectively.
10. INVESTMENT INCOME, REALIZED AND UNREALIZED INVESTMENT GAINS (LOSSES), AND
OTHER COMPREHENSIVE INCOME:
Net investment income for the years ended December 31, 1998, 1997 and 1996
was derived from the following sources ($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Fixed maturities............................................ $418.1 $422.5 $392.4
Equity securities........................................... 53.6 53.5 54.5
Mortgage loans.............................................. 118.7 137.1 159.2
Real estate................................................. 44.4 56.2 84.1
Policy loans................................................ 72.5 82.2 80.2
Other investments (including cash & short-terms)............ 23.1 22.4 29.3
------ ------ ------
Total investment income..................................... 730.4 773.9 799.7
Investment expenses......................................... 42.1 40.9 48.1
------ ------ ------
Net investment income....................................... $688.3 $733.0 $751.6
====== ====== ======
</TABLE>
F-44
<PAGE> 112
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Net realized gains (losses) on investments for the years ended December 31,
1998, 1997 and 1996 are summarized as follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ----- -----
<S> <C> <C> <C>
NET REALIZED GAINS (LOSSES) ON INVESTMENTS
Fixed maturities............................................ $ 8.3 $ 7.3 $ 6.2
Equity securities........................................... 6.9 35.8 30.0
Mortgage loans.............................................. 5.4 10.4 8.4
Real estate................................................. 127.6 20.1 20.8
Other invested assets....................................... 20.5 (1.5) 10.5
------ ----- -----
Net realized gains on investments........................... $168.7 $72.1 $75.9
====== ===== =====
</TABLE>
Following is a summary of the change in unrealized investment gains
(losses), net of related deferred income taxes and adjustment for deferred
policy acquisition costs (see Note 5), which are reflected in Accumulated Other
Comprehensive Income for the periods presented. The net change in unrealized
investment gains (losses) and the change in the Company's minimum pension
liability represent the only components of other comprehensive income for the
years ended December 31, 1998, 1997 and 1996 as presented below:
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -------
($ IN MILLIONS)
<S> <C> <C> <C>
OTHER COMPREHENSIVE INCOME
Change in Unrealized Gains (Losses):
Fixed maturities............................................ $ 66.8 $ 98.7 $(126.7)
Equity securities........................................... 24.2 0.6 13.8
Other....................................................... (1.8) 3.7 1.0
------ ------ -------
Subtotal.................................................... 89.2 103.0 (111.9)
AEGON Portfolio (See Note 9)................................ (4.0) (1.5) (41.6)
------ ------ -------
Subtotal.................................................... 85.2 101.5 (153.5)
Effect on unrealized gains (losses) on investments
attributable to:
DAC....................................................... (6.7) (47.9) 61.0
Deferred federal income taxes............................. (28.4) (17.7) 32.6
Net unrealized gains and DAC transferred to the Closed
Block..................................................... (18.7) -- --
------ ------ -------
Change in unrealized gains (losses) on investments, net..... 31.4 35.9 (59.9)
Minimum pension liability adjustment (See Note 6)........... 2.9 (2.9) --
------ ------ -------
Other comprehensive income............................. $ 34.3 $ 33.0 $ (59.9)
====== ====== =======
</TABLE>
F-45
<PAGE> 113
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following table sets forth the reclassification adjustments required
for the years ended December 31, 1998, 1997, and 1996 to avoid double-counting
in comprehensive income items that are included as part of net income for a
period that also had been part of other comprehensive income in earlier periods
($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
------ ------ -------
($ IN MILLIONS)
<S> <C> <C> <C>
RECLASSIFICATION ADJUSTMENTS
Unrealized gains (losses) on investments arising during
period.................................................... $ 39.3 $ 53.5 $ (44.8)
Reclassification adjustment for gains included in net
income.................................................... (7.9) (17.6) (15.1)
------ ------ -------
Unrealized gains (losses) on investments, net of
reclassification adjustments.............................. $ 31.4 $ 35.9 $ (59.9)
====== ====== =======
</TABLE>
Unrealized gains (losses) on investments, (excluding net unrealized gains
(losses) and DAC on assets allocated to the Closed Block), reported in the above
table for the years ended December 31, 1998, 1997 and 1996 are net of income tax
expense (benefit) of $24.1 million, $8.2 million, and $(40.8) million,
respectively, and $0.8 million, $(30.2) million, and $(75.5) million,
respectively, relating to the effect of such unrealized gains (losses) on DAC.
Reclassification adjustments, (excluding net unrealized gains (losses) and
DAC on assets allocated to the Closed Block), reported in the above table for
the years ended December 31, 1998, 1997 and 1996 are net of income tax expense
of $4.3 million, $9.5 million and $8.2 million, respectively, and $(7.5)
million, $(17.7) million and $(14.5) million, respectively, relating to the
effect of such amounts on DAC.
11. INVESTMENTS:
Fixed Maturity Securities Available-For-Sale:
The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity securities available for sale as of December 31, 1998
and 1997 are as follows ($ in millions):
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
------------------- --------------- ------------- -------------------
1998 1997 1998 1997 1998 1997 1998 1997
-------- -------- ------ ------ ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
US Treasury securities and obligations
of U.S government agencies.......... $ 63.8 $ 131.4 $ 3.2 $ 2.3 $ 0.0 $ 0.1 $ 67.0 $ 133.6
Collateralized mortgage Obligations:
Government agency-backed............ 180.2 398.9 3.3 6.6 0.0 0.3 183.5 405.2
Non-agency backed................... 85.7 112.4 3.4 4.4 0.0 0.0 89.1 116.8
Other asset-backed securities:
Government agency-backed............ 20.0 68.1 1.0 1.3 0.0 0.3 21.0 69.1
Non-agency backed................... 347.5 474.4 12.2 17.5 0.9 0.3 358.8 491.6
Foreign governments................... 16.6 0.0 1.2 0.0 0.6 0.0 17.2 0.0
Utilities............................. 385.2 719.1 17.2 30.6 5.1 2.2 397.3 747.5
Corporate bonds....................... 1,908.0 3,852.2 75.3 141.4 9.0 14.7 1,974.3 3,978.9
-------- -------- ------ ------ ----- ----- -------- --------
Total bonds.................. 3,007.0 5,756.5 116.8 204.1 15.6 17.9 3,108.2 5,942.7
Redeemable preferred stocks........... 23.5 7.9 0.6 0.1 0.3 0.6 23.8 7.4
-------- -------- ------ ------ ----- ----- -------- --------
Total........................ $3,030.5 $5,764.4 $117.4 $204.2 $15.9 $18.5 $3,132.0 $5,950.1
======== ======== ====== ====== ===== ===== ======== ========
</TABLE>
F-46
<PAGE> 114
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The carrying value of the Company's fixed maturity securities at December
31, 1998 and 1997 is net of adjustments for impairments in value deemed to be
other than temporary of $15.1 million and $7.3 million, respectively.
There were no fixed maturity securities at December 31, 1998 and 1997,
which have been non-income producing for the twelve months preceding such dates.
The Company classifies fixed maturity securities which, (i) are in default
as to principal or interest payments, or (ii) are to be restructured pursuant to
commenced negotiations, (iii) went into bankruptcy subsequent to acquisition, or
(iv) are deemed to have other than temporary impairments to value as "problem
fixed maturity securities". At December 31, 1998 and 1997, the carrying value of
problem fixed maturities held by the Company was $33.9 million and $30.2
million, respectively. In addition, at December 31, 1998 and 1997, the Company
held $8.6 million and $0.0 million of fixed maturity securities which had been
restructured. Gross interest income that would have been recorded in accordance
with the original terms of restructured fixed maturity securities amounted to
$0.9 million and $0.0 million for the years ended December 31, 1998 and 1997,
respectively. Gross interest income on these fixed maturity securities included
in net investment income aggregated $1.3 million and $0.0 million for the years
ended December 31, 1998 and 1997, respectively.
The amortized cost and estimated fair value of fixed maturity securities,
by contractual maturity dates (excluding scheduled sinking funds) as of December
31, 1998, are as follows ($ in millions):
<TABLE>
<CAPTION>
1998
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
<S> <C> <C>
Due in one year or less..................................... $ 108.2 $ 108.4
Due after one year through five years....................... 667.9 685.9
Due after five years through ten years...................... 998.5 1,040.8
Due after ten years......................................... 622.5 644.5
-------- --------
Subtotal.......................................... 2,397.1 2,479.6
Mortgage- and asset-backed securities....................... 633.4 652.4
-------- --------
Total............................................. $3,030.5 $3,132.0
======== ========
</TABLE>
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
Proceeds from sales of fixed maturity securities including those in the
Closed Block during 1998, 1997 and 1996 were $396.9 million, $225.0 million and
$197.3 million, respectively. Gross gains of $10.6 million, $5.2 million, and
$4.1 million and gross losses of $2.9 million, $2.6 million, and $4.3 million
were realized on these sales, respectively.
F-47
<PAGE> 115
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Equity Securities
The cost, gross unrealized gains and losses, and estimated fair value of
marketable and nonmarketable equity securities at December 31, 1998 and 1997 are
as follows ($ in millions):
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------------- -------------- ------------- ---------------
1998 1997 1998 1997 1998 1997 1998 1997
------ ------ ------ ----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marketable equity securities....... $233.6 $165.3 $ 48.7 $30.2 $ 6.7 $ 4.9 $275.6 $190.6
Nonmarketable equity securities.... 128.2 101.4 65.7 53.0 12.3 7.2 181.6 147.2
------ ------ ------ ----- ----- ----- ------ ------
$361.8 $266.7 $114.4 $83.2 $19.0 $12.1 $457.2 $337.8
====== ====== ====== ===== ===== ===== ====== ======
</TABLE>
Proceeds from sales of equity securities during 1998, 1997 and 1996 were
$165.0 million, $234.1 million and $164.7 million, respectively. Gross gains of
$24.4 million, $44.4 million, and $35.9 million and gross losses of $17.2
million, $4.7 million, and $4.5 million were realized on these sales,
respectively.
12. MORTGAGE LOANS ON REAL ESTATE AND REAL ESTATE:
Mortgage loans on real estate at December 31, 1998 and 1997 consist of the
following ($ in millions):
<TABLE>
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Commercial mortgage loans................................... $ 546.1 $ 963.5
Agricultural and other loans................................ 465.4 521.5
-------- --------
Total loans................................................. 1,011.5 1,485.0
Less: valuation allowances.................................. ( 23.2) (54.9)
-------- --------
Mortgage loans, net of valuation allowances................. $ 988.3 $1,430.1
======== ========
</TABLE>
An analysis of the valuation allowances for 1998, 1997 and 1996 is as
follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Balance, beginning of year.................................. $54.9 $67.0 $79.6
Increase (decrease) in allowance............................ 11.9 1.4 (4.2)
Reduction due to pay downs and pay offs..................... (16.0) (12.7) (0.6)
Transfers to real estate.................................... (4.0) (0.8) (7.8)
Transfers to the Closed Block............................... (23.6) -- --
----- ----- -----
Balance, end of year........................................ $23.2 $54.9 $67.0
===== ===== =====
</TABLE>
Impaired mortgage loans along with related valuation allowances were as
follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Investment in impaired mortgage loans (before valuation
allowances):
Loans that have valuation allowances........................ $116.7 $199.1
Loans that do not have valuation allowances................. 29.5 167.1
------ ------
Subtotal............................................... 146.2 366.2
Valuation allowances........................................ 10.9 32.8
------ ------
Impaired mortgage loans, net of valuations
allowances............................................ $135.3 $333.4
====== ======
</TABLE>
Impaired mortgage loans that do not have valuation allowances are loans
where the net present value of the expected future cash flows related to the
loan or the fair value of the collateral equals or exceeds the recorded
investment in the loan. Such loans primarily consist of restructured loans or
loans on which
F-48
<PAGE> 116
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
impairment writedowns were taken prior to the adoption of SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan".
During 1998 and 1997, the average recorded investment in impaired mortgage
loans was approximately $300.1 million and $349.9 million, respectively
including Closed Block mortgages. During 1998, 1997, and 1996, the Company
recognized $24.2 million, $28.5 million, and $33.3 million, respectively, of
interest income on impaired loans. See Note 19.
At December 31, 1998 and 1997, the carrying values of mortgage loans which
were non-income producing for the twelve months preceding such dates were $12.9
million and $21.1 million, respectively.
At December 31, 1998 and 1997, the Company had restructured mortgage loans
of $110.6 million (excluding the Closed Block) and $242.7 million, respectively.
Interest income of $13.0 million, $20.3 million and $19.8 million was recognized
on restructured mortgage loans in 1998, 1997, and 1996, respectively. Gross
interest income on these loans that would have been recorded in accordance with
the original terms of such loans amounted to approximately $18.1 million, $26.7
million, and $26.3 million in 1998, 1997 and 1996, respectively.
The following table summarizes the Company's real estate at December 31,
1998 and 1997:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1998 1997
------- -------
($ IN MILLIONS)
<S> <C> <C>
Real estate to be disposed of(1)............................ $393.7 $800.2
Impairment writedowns....................................... (50.2) (96.3)
Valuation allowance......................................... (30.6) (82.7)
------ ------
Carrying value of real estate to be disposed of............. $312.9 $621.2
====== ======
Real estate held for investment(2).......................... $381.9 $533.6
Impairment writedowns....................................... (60.6) (37.7)
------ ------
Carrying value of real estate held for investment........... $321.3 $495.9
====== ======
</TABLE>
- ---------------
(1) Amounts presented as of December 31, 1998 and 1997 are net of $29.0 million
and $75.0 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
(2) Amounts presented as of December 31, 1998 and 1997 are net of $26.8 million
and $35.0 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
An analysis of the valuation allowances relating to real estate classified
as to be disposed of for the years ended December 31, 1998, 1997 and 1996 is as
follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997 1996
----- ----- -----
<S> <C> <C> <C>
Balance, beginning of year.................................. $82.7 $46.0 $49.1
Increase due to transfers of properties to real estate to be
disposed of during the year............................... 1.7 66.1 11.6
Increases (decreases) in valuation allowances from the end
of the prior period on properties to be disposed of....... 5.0 (2.3) 5.2
Decrease as a result of transfers of valuation allowances to
held for investment....................................... (13.5) 0.0 0.0
Decrease as a result of sale................................ (45.3) (27.1) (19.9)
----- ----- -----
Balance, end of year........................................ $30.6 $82.7 $46.0
===== ===== =====
</TABLE>
F-49
<PAGE> 117
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Real estate is net of accumulated depreciation of $290.1 million and $494.4
million for 1998 and 1997, respectively, and depreciation expense recorded was
$26.6 million, $45.1 million and $48.3 million for the years ended December 31,
1998, 1997 and 1996, respectively.
At December 31, 1998 and 1997, the carrying value of real estate which was
non-income producing for the twelve months preceding such dates was $12.5
million and $34.5 million, respectively. Approximately 77.8% of such real estate
at December 31, 1998 consisted of land and the balance consisted of vacant
buildings.
The carrying value of impaired real estate as of December 31, 1998 and 1997
was $78.4 million and $62.3 million, respectively. The depreciated cost of such
real estate as of December 31, 1998 and 1997 was $189.1 million and $196.4
million before impairment writedowns of $110.7 million and $134.0 million,
respectively. The aforementioned impairments occurred primarily as a result of
low occupancy levels and other market related factors. Losses recorded during
1998, 1997, and 1996 related to impaired real estate aggregated $5.9 million,
$0.0 million, and $3.8 million, respectively, and are included as a component of
net realized gains on investments.
13. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair values of the Company's financial instruments
approximate their carrying amounts except for long-term debt as described below.
The methods and assumptions utilized in estimating the fair values of the
Company's financial instruments are summarized as follows:
Fixed Maturities and Equity Securities
The estimated fair values of fixed maturity securities are based upon
quoted market prices, where available. The fair values of fixed maturity
securities not actively traded and other non-publicly traded securities are
estimated using values obtained from independent pricing services or, in the
case of private placements, by discounting expected future cash flows using a
current market interest rate commensurate with the credit quality and term of
the investments. Equity securities primarily consist of investments in common
stocks and limited partnership interests. The fair values of the Company's
investment in common stocks are determined based on quoted market prices, where
available. The fair value of the Company's investments in limited partnership
interests are based on amounts reported by such partnerships to the Company.
Mortgage Loans
The fair values of mortgage loans are estimated by discounting expected
future cash flows, using current interest rates for similar loans to borrowers
with similar credit risk. Loans with similar characteristics are aggregated for
purposes of the calculations. The fair value of mortgages in process of
foreclosure is the estimated fair value of the underlying collateral.
Policy Loans
Policy loans are an integral component of insurance contracts and have no
maturity dates. Management has determined that it is not practicable to estimate
the fair value of policy loans.
Long-term Debt
The fair value of long-term debt at December 31, 1998 was $419.9 million
and is determined based on contractual cash flows discounted at market rates.
The estimated fair values for non-recourse mortgage debt are determined by
discounting contractual cash flows at a rate which takes into account the level
of current market interest rates and collateral risk.
F-50
<PAGE> 118
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Separate Account Assets and Liabilities
The estimated fair value of assets held in Separate Accounts is based on
quoted market prices. The fair value of liabilities related to Separate Accounts
is the amount payable on demand, which includes surrender charges.
Investment-Type Contracts
The fair values of annuities are based on estimates of the value of
payments available upon full surrender. The fair values of the Company's
liabilities under guaranteed investment contracts are estimated by discounting
expected cash outflows using interest rates currently offered for similar
contracts with maturities consistent with those remaining for the contracts
being valued.
14. REINSURANCE:
Life insurance business is ceded on a yearly renewable term basis under
various reinsurance contracts. The Company's general practice is to retain no
more than $4.0 million of risk on any one person for individual products and
$6.0 million for last survivor products.
The Company has entered into coinsurance agreements with other insurers
related to a portion of its extended term insurance, guaranteed interest
contract and long-term disability claim liabilities and reinsures approximately
50% of its block of paid-up life insurance policies.
The following table summarizes the effect of reinsurance for the years
indicated:
<TABLE>
<CAPTION>
1998 1997 1996
------- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Direct premiums (includes $78.4, $78.1 and $78.2 of accident
and health premiums for 1998, 1997, and 1996,
respectively)............................................. $ 728.7 $871.0 $889.4
Reinsurance Assumed......................................... 5.3 6.2 8.3
Reinsurance ceded (includes $(78.2), $(3.5), and $(3.4) of
accident and health premiums for 1998, 1997, and 1996,
respectively)............................................. (112.3) (38.6) (37.9)
------- ------ ------
Net premiums................................................ $ 621.7 $838.6 $859.8
======= ====== ======
Universal life and investment type product policy fee income
ceded..................................................... $ 8.9 $ 8.8 $ 8.5
======= ====== ======
Policyholders' benefits ceded............................... $ 107.3 $ 69.0 $ 44.6
======= ====== ======
Interest credited to policyholders' account balances
ceded..................................................... $ 6.5 $ 9.9 $ 14.5
======= ====== ======
</TABLE>
The Company is contingently liable with respect to ceded insurance should
any reinsurer be unable to meet its obligations under these agreements. To limit
the possibility of such losses, the Company evaluates the financial condition of
its reinsurers and monitors concentration of credit risk.
Effective December 31, 1997, the Company transferred all of its existing in
force disability income insurance business to a third party reinsurer under an
indemnity reinsurance contract and ceased writing new disability income
insurance business. As a result of this transaction, the Company recorded a loss
before tax of approximately $9.1 million for the year ended December 31, 1997.
F-51
<PAGE> 119
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
15. DEBT:
The Company's debt at December 31, 1998 and 1997 consists of the following
($ in millions):
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
DEBT:
Surplus Notes............................................... $231.7 $219.6
Real Estate Mortgage Encumbrances........................... 94.6 155.8
Other....................................................... 49.1 48.2
------ ------
$375.4 $423.6
====== ======
</TABLE>
Surplus Notes
On December 31, 1997, the Company issued the MONY Notes in connection with
the Investment Agreement (see Note 2). The MONY Notes have a face amount of
$115.0 million, a coupon rate of interest of 9.5% per annum, and mature on
December 30, 2012. Interest on the MONY Notes is payable semi-annually and
principal is payable at maturity. Payment of interest on the MONY Notes may only
be made upon the prior approval of the New York State Superintendent of
Insurance.
On August 15, 1994, the Company issued Surplus Notes due August 15, 2024
with a face amount of $125.0 million. The notes were issued at a discount of
42.1% from the principal amount payable at maturity, resulting in net proceeds
after issuance expenses of approximately $70.0 million. The amount of such
original issue discount represents a yield of 11.25% per annum for the period
from August 15, 1994 until August 15, 1999. Interest on the notes will not
accrue until August 15, 1999; thereafter, interest on the notes is scheduled to
be paid on February 15 and August 15 of each year, commencing February 15, 2000,
at a rate of 11.25% per annum.
Payment of interest on the notes may only be made upon the prior approval
of the New York State Superintendent of Insurance. The Company amortizes the
discount using the interest method. For the years ended December 31, 1998, 1997,
and 1996, the Company recorded interest expense of $12.1 million, $10.8 million,
and $9.7 million, respectively, related to these notes.
Real Estate Mortgage Encumbrances
The Company has mortgage loans on certain of its real estate properties.
The interest rates on these loans range from 7.9% to 8.7%. Maturities range from
June 2000 to July 2009. For the years ended December 31, 1998, 1997 and 1996,
interest expense on such mortgage loans aggregated $9.0 million, $12.3 million,
and $12.9 million, respectively.
Other
During 1989, the Company entered into a transaction which is accounted for
as a financing arrangement involving certain real estate properties held for
investment. Pursuant to the terms of the agreement, the Company effectively
pledged the real estate properties as collateral for a loan of approximately
$35.0 million bearing simple interest at a rate of 8% per annum. Interest is
cumulative. Periodic interest payments are not required. All principal and
interest are effectively due at the maturity of the obligation (March 30, 2000)
which is subject to extension at the option of the creditor. However, interest
may be paid periodically subject to available cash flow from the real estate
properties. At December 31, 1998 and 1997, the outstanding balance of the
obligation including accrued interest was $42.4 million and $41.3 million,
respectively. Interest expense on the obligation of $3.1 million,
F-52
<PAGE> 120
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
$3.0 million, and $2.9 million is reflected in Other Operating Costs and
Expenses on the statements of income for the years ended December 31, 1998, 1997
and 1996, respectively.
In 1988, the Company financed one of its real estate properties under a
sales/leaseback arrangement. The facility was sold for $66.0 million, $56.0
million of which was in the form of an interest bearing note receivable and
$10.0 million in cash. The note is due January 1, 2009. The transaction is
accounted for as a financing. Accordingly, the facility remains on the Company's
books and continues to be depreciated. An obligation representing the total
proceeds on the sale was recorded by the Company at the effective date of the
transaction, and is reduced based on payments under the lease. The lease has a
term of 20 years beginning December 21, 1988 and requires minimum annual rental
payments of $7.1 million in 1999, $7.3 million in 2000, $7.4 million in 2001,
$7.6 million in 2002, $7.7 million in 2003 and $41.0 million thereafter. The
Company has the option to renew the lease at the end of the lease term.
Prior to December 31, 1997, the Company had outstanding debt which
represented floating rate notes that were issued by a trust that qualified as a
Real Estate Mortgage Investment Conduit (REMIC) under Section 860 of the
Internal Revenue Code. For the years ended December 31, 1997 and 1996, the
Company recorded interest expense of $0.8 million and $3.3 million,
respectively, related to the REMIC. The weighted average interest rate on the
notes for the years ended December 31, 1997 and 1996 was 5.9%, and 5.8%,
respectively.
Prior to December 31, 1997, the Company had outstanding Eurobond debt. For
the years ended December 31, 1997 and 1996 interest expense on the Eurobonds
outstanding aggregated $2.1 million and $18.3 million, respectively. The
weighted average interest rate on such debt for the years ended December 31,
1997 and 1996 was 8.13%, and 8.2%, respectively.
At December 31, 1998, aggregate maturities of long-term debt based on
required principal payments for 1999 and the succeeding four years are $12.2
million, $87.0 million, $35.9 million, $0.5 million, and $0.5 million,
respectively, and $247.6 million thereafter.
16. OFF-BALANCE SHEET RISK AND CONCENTRATION OF CREDIT RISK:
Financial Instruments with Off-Balance Sheet Risk:
Pursuant to a securities lending agreement with a major financial
institution, the Company from time to time lends securities to approved
borrowers. At December 31, 1998 and 1997, securities loaned by the Company under
this agreement had a fair value of approximately $98.9 million and $36.4
million, respectively. The minimum collateral on securities loaned is 102
percent of the market value of the loaned securities. Such securities are marked
to market on a daily basis and the collateral is correspondingly increased or
decreased.
Concentration of Credit Risk:
At December 31, 1998 and 1997, the Company had no single investment or
series of investments with a single issuer (excluding U.S. Treasury securities
and obligations of U.S. government agencies) exceeding 3.5% and 1.9%,
respectively, of total cash and invested assets.
The Company's fixed maturity securities are diversified by industry type.
The industries that comprise 10% or more of the carrying value of the fixed
maturity securities at December 31, 1998 are Non-Government
Asset/Mortgage-Backed of $448.0 million (14.3%), Public Utilities of $412.9
million (13.2%), Consumer Goods and Services of $408.5 million (13.1%) and Other
Manufacturing of $391.3 million (12.5%).
At December 31, 1997 the industries that comprise 10% or more of the
carrying value of the fixed maturity securities were Other Manufacturing of
$804.9 million (13.5%), Public Utilities of $747.9 million
F-53
<PAGE> 121
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(12.6%), Consumer Goods and Services of $614.6 million (10.3%), Non-Government
Asset/Mortgage-Backed of $608.4 million (10.2%), and Government and Agencies of
$607.9 million (10.2%).
The Company holds below investment grade fixed maturity securities with a
carrying value of $252.0 million at December 31, 1998. These investments consist
mostly of privately issued bonds which are monitored by the Company through
extensive internal analysis of the financial condition of the issuers and which
generally include protective debt covenants. At December 31, 1997, the carrying
value of the Company's investments in below investment grade fixed maturity
securities amounted to $304.3 million.
The Company has significant investments in commercial and agricultural
mortgage loans and real estate (including joint ventures and partnerships). The
locations of property collateralizing mortgage loans and real estate investment
carrying values (in millions) at December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------------ -----------------
<S> <C> <C> <C> <C>
GEOGRAPHIC REGION:
Mountain.............................................. $ 392.5 24.2% $ 591.5 23.2%
West.................................................. 315.8 19.5 399.2 15.7
Southeast............................................. 292.2 18.0 616.3 24.2
Northeast............................................. 261.5 16.1 494.2 19.4
Midwest............................................... 220.7 13.6 253.7 10.0
Southwest............................................. 139.8 8.6 192.3 7.5
-------- ------ -------- -----
$1,622.5 100.0% $2,547.2 100.0%
======== ====== ======== =====
</TABLE>
The states with the largest concentrations of mortgage loans and real
estate investments at December 31, 1998 are: Arizona, $235.3 million (14.5%);
California $179.6 million (11.1%); New York, $140.7 million (8.7%); Georgia,
$96.9 million (6.0%); Illinois, $93.0 million (5.7%); New Jersey, $93.0 million
(5.7%); Texas, $91.1 million (5.6%).
As of December 31, 1998 and 1997, the real estate and mortgage loan
portfolio was also diversified as follows ($ in millions):
<TABLE>
<CAPTION>
1998 1997
------------------ -----------------
<S> <C> <C> <C> <C>
PROPERTY TYPE:
Office buildings...................................... $ 585.4 36.1% $1,092.4 42.9%
Agricultural.......................................... 459.7 28.4 515.0 20.2
Hotel................................................. 264.9 16.3 344.8 13.5
Retail................................................ 164.1 10.1 332.1 13.0
Industrial............................................ 51.0 3.1 111.4 4.4
Other................................................. 72.7 4.5 84.6 3.4
Apartment Buildings................................... 24.7 1.5 66.9 2.6
-------- ------ -------- -----
$1,622.5 100.0% $2,547.2 100.0%
======== ====== ======== =====
</TABLE>
17. COMMITMENTS AND CONTINGENCIES:
(a) In late 1995 and thereafter, a number of purported class actions were
commenced in various state and federal courts against the Company alleging that
the Company engaged in deceptive sales practices in connection with the sale of
whole and/or universal life insurance policies in the 1980s and 1990s. Although
the claims asserted in each case are not identical, they seek substantially the
same relief under essentially the same theories of recovery (i.e. breach of
contract, fraud, negligent misrepresentation, negligent supervision and
training, breach of fiduciary duty, unjust enrichment and/or violation of state
insurance
F-54
<PAGE> 122
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
and/or deceptive business practice laws). Plaintiffs in these cases (including
the Goshen case discussed below) seek primarily equitable relief (e.g.,
reformation, specific performance, mandatory injunctive relief prohibiting the
Company from canceling policies for failure to make required premium payments,
imposition of a constructive trust and/or creation of a claims resolution
facility to adjudicate any individual issues remaining after resolution of all
class-wide issues) as opposed to compensatory damages, although they also seek
compensatory damages in unspecified amounts. The Company has answered the
complaints in each action (except for one recently filed action and another
being voluntarily held in abeyance), has denied any wrongdoing, and has asserted
numerous affirmative defenses.
On June 7, 1996, the New York State Supreme Court certified the Goshen
case, being the first of the aforementioned class actions filed, as a nationwide
class consisting of all persons or entities who have, or at the time of the
policy's termination had, an ownership interest in a whole or universal life
insurance policy issued by the Company and sold on an alleged "vanishing
premium" basis during the period January 1, 1982 to December 31, 1995. On March
27, 1997, the Company filed a motion to dismiss or, alternatively, for summary
judgment on all counts of the complaint. All of the other putative class actions
(with one exception discussed below) have been consolidated and transferred by
the Judicial Panel on Multidistrict Litigation to the United States District
Court for the District of Massachusetts, or are being voluntarily held in
abeyance pending the outcome of the Goshen case. The Massachusetts District
Court in the multidistrict litigation has entered an order essentially holding
all of the federal cases in abeyance pending the action of the Goshen case. On
October 21, 1997, the New York State Supreme Court granted the Company's motion
for summary judgment and dismissed all claims filed in the Goshen case against
the Company on the merits.
In addition to the matters discussed above, the Company is involved in
various other legal actions and proceedings in connection with its businesses.
The claimants in certain of these actions and proceedings seek damages of
unspecified amounts. During 1996, the Company paid $12.6 million to settle a
number of these claims in the state of Alabama and, accordingly, recorded such
amount in Other Operating Costs and Expenses for the year then ended.
With respect to all of the other aforementioned pending litigation, the
Company recorded a provision, which is reflected in Other Operating Costs and
Expenses, of $10.3 million, $0.0 million, and $27.6 million during the years
ended December 31, 1998, 1997 and 1996, respectively. While the outcome of such
matters cannot be predicted with certainty, in the opinion of management, any
additional liability beyond that recorded in the consolidated financial
statements at December 31, 1998, resulting from the resolution of these matters
will not have a material adverse effect on the Company's consolidated financial
position or results of operations.
Insurance companies are subject to assessments, up to statutory limits, by
state guaranty funds for losses of policyholders of insolvent insurance
companies. In the opinion of management, such assessments will not have a
material adverse effect on the consolidated financial position and the results
of operations of the Company.
The Company maintains two lines of credit with domestic banks totaling
$150.0 million with scheduled renewal dates in September 1999 and September
2003. Under these lines of credit, the Company is required to maintain a certain
statutory tangible net worth and debt to capitalization ratio. The Company has
not borrowed against the lines of credit since their inception.
At December 31, 1998, the Company had commitments to issue $39.2 million of
fixed rate agricultural loans with periodic interest rate reset dates. The
initial interest rates on such loans range from approximately 6.7% to 7.7%. In
addition, the Company had commitments to issue $76.4 million of fixed rate
commercial mortgage loans with interest rates ranging from 7.0% to 8.1%. The
Company had no commitments outstanding to purchase private fixed maturity
securities as of December 31, 1998. At
F-55
<PAGE> 123
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
December 31, 1998, the Company had commitments to contribute capital to its
equity partnership investment of $100.8 million.
(b) The order, referred to above, by the New York State Supreme Court on
October 21, 1997 was affirmed by the New York State Appellate Division, First
Department on March 18, 1999. All actions before the United States District
Court for the District of Massachusetts are still pending. In addition, on or
about February 25, 1999, a purported class action was filed against MONY Life
Insurance Company of America ("MLOA") in Kentucky State Court covering
policyholders who purchased individual universal life insurance policies from
MLOA after January 1, 1998 claiming breach of contract and violations of the
Kentucky Consumer Protection Act. On March 26, 1999, MLOA removed that action to
the United States District Court for the Eastern District of Kentucky, requested
the Judicial Panel on multidistrict litigation to transfer the action to the
Judicial Panel of multidistrict litigation for the District of Massachusetts and
sought a stay of further proceedings in the Kentucky District Court pending a
determination on multidistrict transfer. The Company intends vigorously to
defend that litigation. Due to the early stage of this litigation no
determination can be made as to whether the Company will incur any loss with
respect to this matter.
18. STATUTORY FINANCIAL INFORMATION AND REGULATORY RISK-BASED CAPITAL:
Financial statements of the Company prepared in accordance with SAP for
filing with the New York State Insurance Department (the "Department") differ
from financial statements of the Company prepared in accordance with GAAP. The
principal differences result from the following: (i) subsidiaries are generally
accounted for under the equity method of accounting under SAP, whereas
subsidiaries in which the Company has a majority voting interest are
consolidated under GAAP; (ii) acquisition costs are charged to operations as
incurred under SAP rather than being amortized over the expected life of the
contracts under GAAP; (iii) certain assets designated as "non-admitted assets"
are charged directly to statutory surplus under SAP but are reflected as assets
under GAAP; (iv) federal income taxes are provided only on taxable income for
which income taxes are currently payable under SAP, whereas under GAAP deferred
income taxes are recognized; (v) an interest maintenance reserve ("IMR") and
asset valuation reserve ("AVR") are computed based on specific statutory
requirements and recorded under SAP, whereas under GAAP, such reserves are not
recognized; (vi) surplus notes are reported in statutory surplus under SAP,
whereas under GAAP, such notes are recorded as a liability; (vii) premiums for
universal life and investment-type products are recognized as revenue when due
under SAP, whereas under GAAP, such amounts are recorded as deposits and not
included in the Company's revenues; (viii) future policy benefit reserves are
based on specific statutory requirements regarding mortality and interest,
without consideration of withdrawals, and are reported net of reinsurance under
SAP, whereas, under GAAP, such reserves are calculated using a net level premium
method based on actuarial assumptions equal to guaranteed mortality and dividend
fund interest rates and are reported gross of reinsurance; (ix) investments in
bonds and redeemable preferred stocks are generally carried at amortized cost
under SAP, whereas under GAAP, such investments are classified as "available for
sale" and reported at estimated fair value; (x) pension expense for the
Company's qualified defined benefit pension plan is recognized when pension
contributions are deductible for federal income tax purposes, whereas under
GAAP, such expense is recognized over the service period for all eligible
employees; (xi) postretirement benefits are recognized for vested employees and
current retirees under SAP, whereas under GAAP, such expenses are recognized
over the service period for all eligible employees; (xii) methods used for
calculating real estate and mortgage loan impairments, valuation allowances, and
real estate depreciation under GAAP are different from those permitted under
SAP; and (xiii) certain contracts with reinsurers
F-56
<PAGE> 124
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
are accounted for as reinsurance under SAP, whereas under GAAP, such contracts
are accounted for as deposits ("financial reinsurance").
MONY Life is restricted as to the amounts it may pay as dividends to the
MONY Group. Under the New York Insurance Law, the New York Superintendent has
broad discretion to determine whether the financial condition of a stock life
insurance company would support the payment of dividends to its shareholders.
The New York Insurance Department has established informal guidelines for the
Superintendent's determinations which focus upon, among other things, the
overall financial condition and profitability of the insurer under statutory
accounting practices.
Set forth below are reconciliations of the Company's combined capital and
surplus and the net change in capital and surplus, determined in accordance with
SAP, with its equity and net income reported in accordance with GAAP as of and
for each year ended December 31, 1998, 1997, and 1996, respectively.
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C>
Capital and surplus......................................... $1,015.8 $ 835.4 $ 703.5
AVR......................................................... 341.8 348.6 317.7
-------- -------- --------
Capital and surplus, and AVR................................ 1,357.6 1,184.0 1,021.2
Adjustments:
Future policy benefits and policyholders' account
balances............................................... (254.8) (386.5) (356.8)
Deferred policy acquisition costs......................... 439.7 1,007.1 1,095.2
Valuation of investments:
Real estate............................................ (182.1) (343.9) (372.7)
Mortgage loans......................................... (30.9) (77.1) (91.2)
Fixed maturity securities.............................. 55.8 154.4 39.9
Other.................................................. 25.8 12.0 12.7
Deferred federal income taxes............................. 12.4 (6.6) (42.6)
Reinsurance............................................... (106.7) (108.7) (141.0)
Surplus notes............................................. (231.7) (219.6) (93.8)
Pension and postretirement benefits....................... 89.4 71.3 66.2
Non-admitted assets....................................... 95.3 51.5 40.8
Other, net................................................ (10.0) (17.3) (7.4)
Closed Block:
Investments............................................... 123.1 -- --
Future Policy Benefits and Policyholders' account
balance................................................ (130.5) -- --
Deferred Policy Acquisition costs......................... 554.6 -- --
Deferred Federal income taxes............................. (61.2) -- --
Other..................................................... (18.7) -- --
-------- -------- --------
GAAP Equity................................................. $1,727.1 $1,320.6 $1,170.5
======== ======== ========
Net change in capital and surplus........................... $ 180.4 $ 131.9 $ 14.5
Change in AVR............................................... (6.8) 30.9 32.4
-------- -------- --------
Net change in capital and surplus, and AVR.................. 173.6 162.8 46.9
Adjustments:
Future policy benefits and policyholders' account
balances............................................... 1.2 (29.7) (9.9)
Reinsurance............................................... 2.0 32.3 5.3
Deferred policy acquisition costs......................... (6.5) (40.2) (12.9)
</TABLE>
F-57
<PAGE> 125
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C>
Valuation of investments
Real estate............................................ 161.8 28.8 12.0
Mortgage loans......................................... 8.0 14.1 15.0
Fixed maturity securities.............................. (13.8) 8.6 (13.6)
Other.................................................. 2.8 6.3 (2.0)
Deferred federal income taxes............................. (13.7) 53.4 35.3
Issuance of surplus notes................................. -- (115.0) --
Amortization of discount on surplus notes................. (12.1) (10.8) (9.7)
Pension and postretirement benefits....................... 18.1 5.1 (4.1)
Capital contribution...................................... (221.9) -- --
Policy credits............................................ 13.2 -- --
Change in non-admitted assets............................. 43.8 10.7 0.9
Other, net................................................ 7.0 (9.3) (6.7)
-------- -------- --------
Net income.................................................. $ 163.5 $ 117.1 $ 56.5
======== ======== ========
</TABLE>
The difference between statutory basis "net income" and the "net change in
capital and surplus, and AVR" reflected in the reconciliation above primarily
relates to the AVR, unrealized gains (losses) on equity securities, reinsurance
gains, and certain contingency provisions which for statutory reporting purposes
are charged directly to surplus and are not reflected in statutory basis net
income. The combined statutory net income reported by the Company for the years
ended December 31, 1998, 1997, and 1996 was $9.7 million, $88.5 million, and
$62.7 million, respectively.
In March 1998, the National Association of Insurance Commissioners ("NAIC")
voted to adopt its Codification of Statutory Accounting Principles project
(referred to hereafter as "codification"). Codification is a modified form of
statutory accounting principles that will result in changes to the current NAIC
Accounting Practices and Procedures Manual applicable to insurance enterprises.
Although adoption of codification by all states is not a certainty, the NAIC has
recommended that all states enact codification as soon as practicable with an
effective date of January 1, 2001. It is currently anticipated that codification
will become an NAIC state accreditation requirement starting in 2002. In
addition, the American Institute of Certified Public Accountants and the NAIC
have agreed to continue to allow the use of certain permitted accounting
practices when codification becomes effective in 2001. Any accounting
differences from codification principles, however, must be disclosed and
quantified in the footnotes to the audited financial statements. Therefore,
codification will likely result in changes to what are currently considered
prescribed statutory insurance accounting practices.
Each insurance company's state of domicile imposes minimum risk-based
capital requirements. The formulas for determining the amount of risk-based
capital specify various weighting factors that are applied to financial balances
or various levels of activity based on the perceived degree of risk. Regulatory
compliance is determined by a ratio of the Company's regulatory total adjusted
capital, as defined by the NAIC, to its authorized control level risk-based
capital, as defined by the NAIC. Companies below specific trigger points or
ratios are classified within certain levels, each of which requires specified
corrective action. Each of the Company's insurance subsidiaries exceed the
minimum risk based capital requirements.
As part of their routine regulatory oversight, the Department recently
completed an examination of MONY for each of the five years in the period ended
December 31, 1996, and the Arizona State Insurance Department recently completed
an examination of MONY's wholly owned life insurance subsidiary, MONY Life
Insurance Company of America, for each of the three years in the period ended
December 31, 1996. The reports did not cite any matter which would result in a
material effect on the Company's financial condition or results of operations.
F-58
<PAGE> 126
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
19. CLOSED BLOCK -- SUMMARY FINANCIAL INFORMATION
Summarized financial information of the Closed Block as of December 31,
1998 and November 16, 1998 (date of establishment) and for the period from
November 16, 1998 through December 31, 1998 is presented below:
<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 16,
1998 1998
------------ ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
Fixed Maturities:
Available for sale, at estimated fair value (amortized
cost, $3,423.0 and $3,433.9)........................... $3,574.0 $3,586.5
Mortgage loans on real estate............................... 431.7 464.9
Policy loans................................................ 1,208.4 1,205.7
Cash and cash equivalents................................... 134.4 46.9
Premiums receivable......................................... 16.8 17.9
Deferred policy acquisition costs........................... 554.6 562.3
Other assets................................................ 241.3 249.2
-------- --------
Total Closed Block assets......................... $6,161.2 $6,133.4
======== ========
LIABILITIES:
Future policy benefits...................................... $6,715.6 $6,681.8
Policyholders' account balances............................. 298.0 296.4
Other policyholders' liabilities............................ 163.5 171.3
Other liabilities........................................... 113.6 109.7
-------- --------
Total Closed Block liabilities.................... $7,290.7 $7,259.2
======== ========
</TABLE>
<TABLE>
<CAPTION>
NOVEMBER 16,
1998 THROUGH
DECEMBER 31,
1998
---------------
($ IN MILLIONS)
<S> <C>
REVENUES:
Premiums.................................................... $100.1
Net investment income....................................... 46.6
Net realized gains (losses) on investments.................. 2.4
Other Income................................................ 0.6
------
Total revenues.................................... 149.7
------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 110.0
Interest credited to policyholders' account balances........ 1.0
Amortization of deferred policy acquisition costs........... 9.0
Dividends to policyholders.................................. 22.4
Other operating costs and expenses.......................... 1.6
------
Total benefits and expenses....................... $144.0
------
Contribution from the Closed Block.......................... $ 5.7
======
</TABLE>
F-59
<PAGE> 127
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1998 and November 16, 1998, there were no adjustments in
the value of fixed maturity securities in the Closed Block deemed to be other
that temporary or fixed maturities which have been non-income producing for the
twelve months preceding such date.
At December 31, 1998 and November 16, 1998, there were no problem fixed
maturities which were restructured.
The amortized cost and estimated fair value of fixed maturity securities in
the Closed Block, by contractual maturity dates, (excluding scheduled sinking
funds) as of December 31, 1998 are as follows ($ in millions):
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
<S> <C> <C>
Due in one year or less..................................... $ 47.0 $ 47.4
Due after one year through five years....................... 868.3 887.6
Due after five years through ten years...................... 1,443.4 1,524.8
Due after ten years......................................... 565.0 605.2
-------- --------
Subtotal.......................................... 2,923.7 3,065.0
Mortgage and asset backed securities........................ 499.3 509.0
-------- --------
$3,423.0 $3,574.0
======== ========
</TABLE>
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
Mortgage loans on real estate in the Closed Block at December 31, 1998 and
November 16, 1998 consist of the following ($ in millions):
<TABLE>
<CAPTION>
DECEMBER 31, NOVEMBER 16,
1998 1998
------------ ------------
<S> <C> <C>
Commercial mortgage loans................................... $382.0 $395.7
Agricultural and other loans................................ 73.3 93.9
------ ------
Subtotal.......................................... 455.3 489.6
Less: valuation allowances.................................. 23.6 24.7
------ ------
Mortgage loans, net of valuation allowances................. $431.7 $464.9
====== ======
</TABLE>
An analysis of the valuation allowances for the period from November 16,
1998 through December 31, 1998 is as follows ($ in millions):
<TABLE>
<S> <C>
Beginning balance, November 16, 1998........................ $24.7
Increase (decrease) in allowance............................ (0.8)
Reduction due to pay downs and pay offs..................... (0.3)
-----
Balance, December 31, 1998.................................. $23.6
=====
</TABLE>
F-60
<PAGE> 128
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Impaired mortgage loans along with related valuation allowances were as
follows as of December 31, 1998 ($ in millions):
Investment in impaired mortgage loans (before valuation allowances):
<TABLE>
<S> <C>
Loans that have valuation allowances........................ $117.9
Loans that do not have valuation allowances................. 31.1
------
Subtotal.......................................... 149.0
Valuation allowances........................................ (17.5)
------
Impaired mortgage loans, net of valuation allowances........ $131.5
======
</TABLE>
Impaired mortgage loans that do not have valuation allowances are loans
where the net present value of the expected future cash flows related to the
loan or the fair value of the collateral equals or exceeds the recorded
investment in the loan. Such loans primarily consist of restructured loans or
loans on which impairment writedowns were taken prior to the adoption of SFAS
No. 114, "Accounting by Creditors for Impairment of a Loan".
During the period from November 16, 1998 through December 31, 1998, the
Closed Block's average recorded investment in impaired mortgage loans was
approximately $138.3 million and the Closed Block recognized $1.8 million of
interest income on impaired loans.
At December 31, 1998 the carrying values of mortgage loans in the Closed
Block which were non-income producing for the twelve months preceding such date
was $0.5 million, respectively.
At December 31, 1998, the Closed Block had restructured mortgage loans of
$54.8 million. Interest income of $0.7 million was recognized on such loans
during the period from November 16, 1998 through December 31, 1998. Gross
interest income on these loans that would have been recorded in accordance with
the original terms of such loans amounted to approximately $0.8 million.
20. SEGMENT INFORMATION:
The Company's business activities consist of the following: protection
product operations, accumulation product operations, mutual fund operations,
securities broker-dealer operations, insurance brokerage operations, and certain
insurance lines of business no longer written by the Company (the "run-off
businesses"). These business activities represent the Company's operating
segments. Except as discussed below, these segments are managed separately
because they either provide different products or services, are subject to
different regulation, require different strategies, or have different technology
requirements.
Management considers the Company's mutual fund operations to be an integral
part of the products offered by the Company's accumulation products segment,
since substantially all the mutual funds sold by the Company are offered
through, and in conjunction with, the products marketed by the accumulation
products segment. Accordingly, for management purposes (including, performance
assessment and making decisions regarding the allocation of resources), the
Company aggregates its mutual fund operations with its accumulation products
segment.
Of the aforementioned segments, only the protection products segment and
the accumulation products segment qualify as reportable segments in accordance
with FASB Statement No. 131. All of the Company's other segments are combined
and reported in an other products segment.
Products comprising the protection products segment primarily include a
wide range of individual life insurance products, including: permanent and last
survivor whole life, term life, universal life, variable universal life, group
life, and group universal life. In addition, included in the protection products
segment
F-61
<PAGE> 129
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
are: (i) the assets and liabilities transferred pursuant to the Group Pension
Transaction, as well as the Group Pension Profits (see Note 9), (ii) the Closed
Block assets and liabilities, as well as the Contribution from the Closed Block,
and (iii) the Company's disability income insurance business. Products
comprising the accumulation products segment primarily include fixed annuities,
non-participating interest sensitive products (including; single premium
deferred annuities, flexible premium deferred annuities, immediate annuities,
and flexible premium variable annuities), proprietary mutual funds, investment
management services, and certain other financial services products. The
Company's other products segment primarily consists of the securities
broker-dealer operation, the insurance brokerage operation, and the run-off
businesses. The securities broker-dealer operation markets the Company's
proprietary investment products and, in addition, provides customers of the
Company's protection and accumulation products access to other non-proprietary
investment products (including stocks, bonds, limited partnership interests,
tax-exempt unit investment trusts and other investment securities). The
insurance brokerage operation provides the Company's field agency force with
access to life, annuity, small group health and specialty insurance products
written by other carriers to meet the insurance and investment needs of its
customers. The run-off businesses primarily consist of group life and health
business, as well as group pension business that was not included in the Group
Pension Transaction (see Note 9).
Set forth in the table below is certain financial information with respect
to the Company's operating segments as of and for each of the years ended
December 31, 1998, 1997 and 1996, as well as amounts not allocated to the
segments. Except for various allocations discussed below, the accounting
policies of the segments are the same as those described in the summary of
significant accounting policies. The Company evaluates the performance of each
operating segment based on profit or loss from operations before income taxes
and nonrecurring items (e.g. items of an unusual or infrequent nature). The
Company does not allocate certain nonrecurring items to the segments. In
addition, all segment revenues are from external customers.
Assets have been allocated to the segments in amounts sufficient to support
the associated liabilities of each segment. In addition, capital is allocated to
each segment in amounts sufficient to maintain a targeted regulatory risk-based
capital ("RBC") level for each segment (see Note 18). Allocations of net
investment income and net realized gains on investments were based on the amount
of assets allocated to each segment. Other costs and operating expenses were
allocated to each of the segments based on: (i) a review of the nature of such
costs, (ii) time studies analyzing the amount of employee compensation costs
incurred by each segment, and (iii) cost estimates included in the Company's
product pricing. Substantially all non-cash transactions and impaired real
estate (including real estate acquired in satisfaction of debt) have been
allocated to the Protection Products segment (see Note 4).
Amounts reported as "unallocated amounts" in the table below primarily
relate to: (i) contracts issued by MONY Life relating to its employee benefit
plans, (ii) expenses incurred in 1996 and 1995 relating to settlements and
reserves for various lawsuits and legal disputes, including lawsuits against the
Company alleging market conduct improprieties (see Note 17), and (iii) expenses
incurred in 1996 in connection with special termination benefits paid to certain
employees under an early retirement program (see Note 6).
F-62
<PAGE> 130
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEGMENT SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
PREMIUMS:
Protection Products....................................... $ 602.2 $ 817.0 $ 837.4
Accumulation Products..................................... 2.6 5.0 4.2
Other Products............................................ 16.9 16.6 18.2
--------- --------- ---------
$ 621.7 $ 838.6 $ 859.8
========= ========= =========
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES:
Protection Products....................................... $ 86.2 $ 74.9 $ 63.4
Accumulation Products..................................... 64.1 50.9 36.6
Other Products............................................ 1.3 1.5 0.9
--------- --------- ---------
$ 151.6 $ 127.3 $ 100.9
========= ========= =========
NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON
INVESTMENTS:
Protection Products....................................... $ 655.5 $ 611.9 $ 605.3
Accumulation Products..................................... 136.3 131.4 144.0
Other Products............................................ 63.0 59.9 74.6
Unallocated amounts....................................... 2.2 1.9 3.6
--------- --------- ---------
$ 857.0 $ 805.1 $ 827.5
========= ========= =========
OTHER INCOME:
Protection Products(1)(7)................................. $ 85.5 $ 94.9 $ 87.7
Accumulation Products..................................... 72.8 52.1 32.2
Other Products............................................ 61.1 53.1 52.2
Unallocated amounts....................................... 5.7 5.3 4.7
--------- --------- ---------
$ 225.1 $ 205.4 $ 176.8
========= ========= =========
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS:
Protection Products....................................... $ 92.4 $ 146.8 $ 135.0
Accumulation Products..................................... 29.6 34.4 23.2
--------- --------- ---------
$ 122.0 $ 181.2 $ 158.2
========= ========= =========
BENEFITS TO POLICYHOLDERS:(2)
Protection Products....................................... $ 663.4 $ 821.1 $ 854.0
Accumulation Products..................................... 79.6 92.5 102.8
Other Products............................................ 41.6 45.2 54.1
Unallocated amounts....................................... 7.9 7.2 8.2
--------- --------- ---------
$ 792.5 $ 966.0 $ 1,019.1
========= ========= =========
</TABLE>
F-63
<PAGE> 131
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
OTHER OPERATING COSTS AND EXPENSES:
Protection Products....................................... $ 287.1 $ 281.0 $ 276.3
Accumulation Products..................................... 84.4 66.3 52.8
Other Products............................................ 80.2 66.2 81.9
Unallocated amounts....................................... 0.0 3.7 44.8
--------- --------- ---------
$ 451.7 $ 417.2 $ 455.8
========= ========= =========
INCOME BEFORE INCOME TAXES:
Protection Products....................................... $ 193.7 $ 129.0 $ 101.2
Accumulation Products..................................... 80.5 44.1 35.9
Other Products............................................ 19.2 18.3 8.1
Unallocated amounts....................................... 0.0 (3.7) (44.7)
--------- --------- ---------
$ 293.4 $ 187.7 $ 100.5
========= ========= =========
ASSETS:
Protection Products(3)(8)................................. $16,578.7 $15,776.5 $15,158.5
Accumulation Products..................................... 6,171.3 5,757.9 4,747.2
Other Products............................................ 1,256.2 1,234.2 1,417.1
Unallocated amounts....................................... 890.9 842.7 820.7
--------- --------- ---------
$24,897.1 $23,611.3 $22,143.5
========= ========= =========
DEFERRED POLICY ACQUISITION COSTS:
Protection Products(9).................................... $ 857.6 $ 874.1 $ 961.8
Accumulation Products..................................... 136.7 133.0 133.4
--------- --------- ---------
$ 994.3 $ 1,007.1 $ 1,095.2
========= ========= =========
POLICYHOLDERS' LIABILITIES:
Protection Products(4)(10)................................ $10,267.0 $10,105.7 $ 9,996.2
Accumulation Products..................................... 1,318.6 1,416.1 1,601.7
Other Products............................................ 455.6 513.4 542.4
Unallocated amounts....................................... 17.4 16.5 88.3
--------- --------- ---------
$12,058.6 $12,051.7 $12,228.6
========= ========= =========
SEPARATE ACCOUNT LIABILITIES:(5)
Protection Products(6).................................... $ 4,056.8 $ 3,720.1 $ 3,393.0
Accumulation Products..................................... 4,452.6 4,002.6 2,851.4
Other Products............................................ 621.9 547.7 625.6
Unallocated amounts....................................... 776.4 736.0 650.4
--------- --------- ---------
$ 9,907.7 $ 9,006.4 $ 7,520.4
========= ========= =========
</TABLE>
- ---------------
(1) Includes Group Pension Profits of $56.8 million, $60.0 million and $59.5
million for the years ended December 31, 1998, 1997 and 1996, respectively.
(See Note 9).
(2) Includes interest credited to policyholders' account balances.
(3) Includes assets transferred in the Group Pension Transaction of $5,751.8
million, $5,714.9 million and $5,627.6 million as of December 31, 1998,
1997 and 1996, respectively.
F-64
<PAGE> 132
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(4) Includes policyholders' liabilities transferred in the Group Pension
Transaction of $1,824.9 million, $1,991.0 million and $2,158.1 million as
of December 31, 1998, 1997 and 1996 respectively.
(5) Each segment includes separate account assets in an amount not less than
the corresponding liability reported.
(6) Includes separate account liabilities transferred in the Group Pension
Transaction of $3,829.6 million, $3,614.0 million and $3,358.3 million as
of December 31, 1998, 1997 and 1996, respectively.
(7) Includes $5.7 million relating to the Contribution from the Closed Block
for the period from November 16, 1998 through December 31, 1998 (see Note 3
and Note 19).
(8) Includes Closed Block assets of $6,161.2 million as of December 31, 1998
(see Note 3 and Note 19).
(9) Includes deferred policy acquisition costs allocated to the Closed Block of
$554.6 million as of December 31, 1998 (see Note 3 and Note 19).
(10) Includes Closed Block policyholders' liabilities of $7,177.1 million as of
December 31, 1998 (see Note 3 and Note 19).
Substantially all of the Company's revenues are derived in the United
States. Revenue derived from outside the United States is not material and
revenue derived from any single customer does not exceed 10 percent of total
consolidated revenues.
21. PRO FORMA INFORMATION (UNAUDITED)
The unaudited pro forma earnings information give effect to the Transaction
as if it occurred January 1, 1998. Accordingly, pro forma earnings reflects the
elimination of demutualization expenses, which were assumed to have been fully
incurred prior to January 1, 1998, and the elimination of the differential
earnings (surplus) tax applied to mutual life insurance companies. MONY Life is
no longer subject to the differential earnings (surplus) tax as a stock life
insurance company.
The unaudited pro forma information is provided for information purposes
only and should not be construed to be indicative of the Company's consolidated
results of operation had the Transaction been consummated on the date assumed,
and does not in any way represents a projection or forecast of the Company's
consolidated results of operations as of any date for any future period.
The pro forma revenue and expenses of the Closed Block for the year ended
December 31, 1998, based on certain estimates and assumption that management
believes are reasonable, as if The Closed Block had been established on January
1, 1998, are summarized below:
<TABLE>
<S> <C>
Premiums.................................................... $ 643.9
Net Investment income....................................... 373.8
Net realized gain on investment............................. 10.2
Other income................................................ 1.9
--------
Total Revenue............................................. 1,029.8
--------
Benefits to policyholders................................... 665.4
Interest credited to policyholders' account balances........ 8.7
Amortization of deferred policy acquisition costs........... 78.8
Dividends to policyholders.................................. 214.9
Other operating cost and expenses........................... 9.8
--------
Total Benefits and Expenses............................... 977.6
--------
Contribution from the Closed Block..................... $ 52.2
========
</TABLE>
F-65
<PAGE> 133
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<PAGE> 134
APPENDIX A
DEATH BENEFIT PERCENTAGE FOR
GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST
<TABLE>
<CAPTION>
ATTAINED AGE APPLICABLE PERCENTAGE
------------ ---------------------
<S> <C>
40 and Under................................................ 250%
41.......................................................... 243
42.......................................................... 236
43.......................................................... 229
44.......................................................... 222
45.......................................................... 215
46.......................................................... 209
47.......................................................... 203
48.......................................................... 197
49.......................................................... 191
50.......................................................... 185
51.......................................................... 178
52.......................................................... 171
53.......................................................... 164
54.......................................................... 157
55.......................................................... 150
56.......................................................... 146
57.......................................................... 142
58.......................................................... 138
59.......................................................... 134
60.......................................................... 130
61.......................................................... 128
62.......................................................... 126
63.......................................................... 124
64.......................................................... 122
65.......................................................... 120
66.......................................................... 119
67.......................................................... 118
68.......................................................... 117
69.......................................................... 116
70.......................................................... 115
71.......................................................... 113
72.......................................................... 111
73.......................................................... 109
74.......................................................... 107
75-90....................................................... 105
91.......................................................... 104
92.......................................................... 103
93.......................................................... 102
94-100...................................................... 101
</TABLE>
A-1
<PAGE> 135
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 136
APPENDIX B
MONTHLY PER $1,000 SPECIFIED AMOUNT FACTORS
<TABLE>
<CAPTION>
ISSUE FACTOR
AGE PER $1,000
- ----- ----------
<S> <C>
0-36........................................................ $0.06
37-50....................................................... 0.07
51.......................................................... 0.08
52.......................................................... 0.08
53.......................................................... 0.09
54.......................................................... 0.09
55.......................................................... 0.10
56.......................................................... 0.10
57.......................................................... 0.10
58.......................................................... 0.11
59.......................................................... 0.11
60.......................................................... 0.11
61.......................................................... 0.11
62.......................................................... 0.11
63.......................................................... 0.11
64.......................................................... 0.11
65.......................................................... 0.11
66.......................................................... 0.11
67.......................................................... 0.12
68.......................................................... 0.13
69.......................................................... 0.13
70.......................................................... 0.13
71.......................................................... 0.13
72.......................................................... 0.13
73.......................................................... 0.14
74.......................................................... 0.14
75.......................................................... 0.14
76.......................................................... 0.14
77.......................................................... 0.15
78.......................................................... 0.16
79.......................................................... 0.16
80.......................................................... 0.17
81.......................................................... 0.19
82.......................................................... 0.21
83.......................................................... 0.22
84.......................................................... 0.24
85.......................................................... 0.26
</TABLE>
B-1
<PAGE> 137
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 138
APPENDIX C
ILLUSTRATIONS OF DEATH PROCEEDS, FUND VALUES AND
CASH VALUES, AND PREMIUM OUTLAYS
The following tables illustrate how the key financial elements of the
Policy work, specifically, how the death benefits, Fund Values and Cash Values
could vary over an extended period of time. In addition, each table compares
these values with premiums paid accumulated with interest.
The Policies illustrated include the following:
<TABLE>
<CAPTION>
BENEFIT SPECIFIED SEE
SEX AGE SMOKER OPTION AMOUNT PAGE
--- --- ------ ------- --------- ----
<S> <C> <C> <C> <C> <C>
Male 45 Preferred Non-smoker 1 $200,000 D- 5
Female 45 Preferred Non-smoker 1 $200,000 D-15
Male 45 Standard Smoker 1 $200,000 D-25
Male 45 Preferred Non-smoker 2 $200,000 D-34
Male 35 Preferred Non-smoker 1 $200,000 D-44
Male 55 Preferred Non-smoker 1 $200,000 D-54
</TABLE>
The tables show how Death Proceeds, Fund Values and Cash Values of a
hypothetical Policy could vary over an extended period of time if the
Subaccounts of the Variable Account had constant hypothetical gross annual
investment returns of 0%, 6% or 12% over the periods indicated in each table.
The values will differ from those shown in the tables if the annual investment
returns are not absolutely constant. That is, the death benefits, Fund Values
and Cash Values will be different if the returns averaged 0%, 6% or 12% over a
period of years but went above or below those figures in individual Policy
years. These illustrations assume that no Policy Loan has been taken. The
amounts shown would differ if unisex rates were used.
The amounts shown for Death Proceeds, Fund Values and Cash Values reflect
the fact the net investment return on the Policy is lower than the gross
investment return on the Subaccounts of the Variable Account. This results from
the charges levied against the Subaccounts of the Variable Account (i.e., the
mortality and expense risk charge) as well as the premium loads, administrative
charges and Surrender Charges. The difference between the Fund Value and the
Cash Value in the first 14 years is the Surrender Charge.
The tables illustrate cost of insurance and expense charges at both current
rates (which are described under Cost of Insurance, page 45) and at the maximum
rates guaranteed in the Policies. The amounts shown at the end of each Policy
year reflect a daily charge against the Funds as well as those assessed against
the Subaccounts. These charges include the charge against the Subaccounts for
mortality and expense risks and the effect on each Subaccount's investment
experience of the charge to Portfolio assets for investment management and
direct expenses. The mortality and expense risk fee is .35% annually on a
guaranteed basis.
The tables also reflect a deduction for a daily investment advisory fee and
for other expenses of the Portfolio at a rate equivalent to an annual rate of
0.75% of the aggregate average daily net assets of the Portfolio. This
hypothetical rate is representative of the average maximum investment advisory
fee and other expenses of the Portfolios applicable to the Subaccounts of the
Variable Account. Actual fees and other expenses vary by Portfolio and may be
subject to agreements by the sponsor to waive or otherwise reimburse each
Portfolio for operating expenses which exceed certain limits. For a detailed
description of actual expenses and expense reimbursements, see pages 4-5 of the
prospectus. There can be no assurance that the expense reimbursement
arrangements will continue in the future, and any unreimbursed expenses would be
reflected in the values included on the tables.
The effect of these investment management, direct expenses and mortality
and expense risk charges on a 0% gross rate of return would result in a net rate
of return of -.75%, on 6% it would be 5.25%, and on 12% it would be 11.25%.
C-1
<PAGE> 139
The tables assume the deduction of charges including administrative and
sales charges. For each age, there are tables for death benefit Options 1 and 2
and each option is illustrated using current and guaranteed policy cost factors.
The tables reflect the fact that the Company does not currently make any charge
against the Variable Account for state or federal taxes. If such a charge is
made in the future, it will take a higher rate of return to produce after-tax
returns of 0%, 6% or 12%.
The following are descriptions of Table columns and key terms:
Age: Insured's attained age at the end of the policy year
Premium Outlay: The annualized out-of-pocket premium payments for each
policy year including scheduled and any anticipated unscheduled premium
payments. Premium payments are assumed to be paid at the beginning of each
premium paying period. Amounts of surrenders and loans plus loan interest if
any, are shown on the pages captioned "Premiums, Surrenders and Loans".
Premium Accumulated at 5%: is equal to the premiums compounded at an
annual effective rate of 5% and is shown at the end of the year.
GUARANTEED CHARGES AT 0.00%, 6.00% OR 12.00%
Cash Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less
all charges, fees and deductions at their guaranteed maximum. The cash value
also takes into account any loans illustrated, as well as, the applicable
surrender charges that would apply if the policy were surrendered prior to the
end of the first fourteen years.
Fund Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less
all charges, fees and deductions at their guaranteed maximum. The Fund Value
DOES NOT take into account the applicable surrender charges that would apply if
the policy were surrendered prior to the end of the first fourteen years.
Death Proceeds: The benefit payable if the insured's death occurs at the
end of the policy year, assuming a 0.00%, 6.00% or 12,00% hypothetical rate of
return on the Funds, less all charges, fees and deductions at their guaranteed
maximums.
CURRENT CHARGES AT 0.00%, 6.00% OR 12.00%
Cash Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less
all charges, fees and deductions at the current, non-guaranteed rates. The cash
value also takes into account any loans illustrated, as well as, the applicable
surrender charges that would apply if the policy were surrendered prior to the
end of the first fourteen years.
Fund Value: The value of the subaccounts at the end of each policy year
assuming a 0.00%, 6.00% or 12.00% hypothetical rate of return on the Funds, less
all charges, fees and deductions at the current, non-guaranteed rates. The Fund
Value DOES NOT take into account the applicable surrender charges that would
apply if the policy were surrendered prior to the end of the first fourteen
years.
Death Proceeds: The benefit payable if the insured's death occurs at the
end of the policy year assuming a 0.00%, 6.00% or 12.00% hypothetical rate of
return on the Funds, less all charges, fees and deductions at the current,
non-guaranteed rates.
The Company will furnish, upon request, a comparable illustration based on
the age and sex of the proposed Insured, standard Premium Class assumptions and
an initial Specified Amount and Scheduled Premium Payments of the applicant's
choice. If a Policy is purchased, an individualized illustration will be
delivered reflecting the Scheduled Premium Payment chosen and the Insured's
actual risk class. After issuance, the Company will provide upon request an
illustration of future Policy benefits based on both guaranteed and current cost
factor assumptions and actual Account Value.
The following is the page of supplemental footnotes to each of the flexible
premium variable life to age 100 numeric summary and standard ledger statements
which follow and which begin on page C-4.
C-2
<PAGE> 140
STANDARD LEDGER STATEMENT -- SUPPLEMENTAL FOOTNOTE PAGE
MONY CUSTOM EQUITY MASTER
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
MONY LIFE INSURANCE COMPANY
ADDITIONAL INFORMATION
This policy has been tested for the possibility of classification as a
modified endowment. This test is not a guarantee that a policy will not be
classified as a modified endowment.
This illustration has been checked against federal tax laws relating to
their definition of life insurance and is in compliance based on proposed
premium payments and coverages. Any decrease in specified amount and/or a change
in death benefit option 2 to death benefit option 1 and/or surrenders occurring
in the first 15 years may cause a taxable event. In addition, if the policy is
defined as a modified endowment policy, a loan, surrender, or assignment or
pledge (unless such assignment or pledge is for burial expenses and the maximum
death benefit is not in excess of $25,000) may be considered a taxable
distribution and a ten percent penalty may be added to any tax on the
distribution. Please consult your tax advisor for advice.
GUIDELINE PREMIUMS
<TABLE>
<CAPTION>
AGE, GENDER, UNDERWRITING CLASSIFICATION SPECIFIED INITIAL GUIDELINE INITIAL GUIDELINE
AND DEATH BENEFIT OPTION AMOUNT SINGLE PREMIUM ANNUAL PREMIUM
---------------------------------------- ---------------- ----------------- -----------------
<S> <C> <C> <C>
Age 45, Male, Non-Smoker Preferred, Option 1 $200,000 $47,860.22 $ 3,998.48
Age 45, Female, Non-Smoker Preferred, Option 1 $200,000 $41,213.22 $ 3,374.75
Age 45, Male, Smoker Standard, Option 1 $200,000 $60,737.64 $ 5,271.13
Age 45, Male, Non-Smoker, Preferred, Option 2 $200,000 $47,860.22 $12,671.23
Age 35, Male, Non-Smoker, Preferred, Option 1 $200,000 $30,647.57 $ 2,489.50
Age 55, Male, Non-Smoker, Preferred, Option 1 $200,000 $72,717.30 $ 6,673.55
</TABLE>
Values shown on this illustration are based on a policyowner tax bracket of
0%.
Premiums are assumed to be paid at the beginning of the payment period.
Policy values and ages are shown as of the end of the policy year and reflect
the effect of all loans and surrenders. The death proceeds, fund value and value
upon surrender will differ if premiums are paid in different amounts,
frequencies, or not on the due date.
The policy's cash value is net of any applicable surrender charge.
Premiums less the following deductions are added to the fund value:
1. A premium tax charge of .80% of gross premiums in all policy years.
2. A sales charge on the gross premiums. The sales charges equal 4% of
each premium dollar paid for amounts less than $500,000, and 3% for
total amounts of $500,000 or more.
3. A DAC tax charge of 1.50% of gross premiums in all policy years. No
charge will be deducted where premiums received are not subject to this
tax.
For the first year, those columns assuming guaranteed charges use the
current monthly mortality charges, current monthly administrative charges,
current charges for mortality and expense risks, current charges for rider
benefits, if any, and current premium sales charge as well as the assumed
hypothetical gross annual investment return indicated. Thereafter these columns
use guaranteed monthly mortality charges, guaranteed monthly administrative
charges, guaranteed charges for mortality and expense risks, guaranteed charges
for rider benefits if any, guaranteed maximum premium sales charge, and the
assumed hypothetical gross annual investment return indicated. Those columns
assuming current charges are based upon "current charges" and the assumed
hypothetical gross annual investment return indicated.
The current charges declared by MONY Life Insurance Company are guaranteed
for the first policy year and apply to policies issued as of the illustration
preparation date and could change between the preparation date and the date the
policy is issued. After the first policy year, current charges are not
guaranteed, and may be changed at the discretion of MONY Life Insurance Company.
C-3
<PAGE> 141
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 LAPSED 1,851 200,000 LAPSED 1,851 200,000 LAPSED 1,851 200,000
5 2,650 4,773 6,893 200,000 4,773 6,893 200,000 6,438 8,558 200,000
10 2,650 9,786 11,111 200,000 9,786 11,111 200,000 14,994 16,319 200,000
20 2,650 7,542 7,542 200,000 7,542 7,542 200,000 23,957 23,957 200,000
@ Age 70 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 19,706 19,706 200,000
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 32 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-4
<PAGE> 142
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,851 200,000 0 1,851 200,000 0 1,851 200,000
2 47 2,650 1,098 3,218 200,000 1,098 3,218 200,000 1,495 3,615 200,000
3 48 2,650 2,385 4,505 200,000 2,385 4,505 200,000 3,173 5,293 200,000
4 49 2,650 3,618 5,738 200,000 3,618 5,738 200,000 4,812 6,932 200,000
5 50 2,650 4,773 6,893 200,000 4,773 6,893 200,000 6,438 8,558 200,000
6 51 2,650 5,830 7,950 200,000 5,830 7,950 200,000 8,049 10,169 200,000
7 52 2,650 6,790 8,910 200,000 6,790 8,910 200,000 9,646 11,766 200,000
8 53 2,650 7,920 9,775 200,000 7,920 9,775 200,000 11,471 13,326 200,000
9 54 2,650 8,910 10,500 200,000 8,910 10,500 200,000 13,261 14,851 200,000
10 55 2,650 9,786 11,111 200,000 9,786 11,111 200,000 14,994 16,319 200,000
11 56 2,650 10,503 11,563 200,000 10,503 11,563 200,000 16,651 17,711 200,000
12 57 2,650 11,063 11,858 200,000 11,063 11,858 200,000 18,210 19,005 200,000
13 58 2,650 11,466 11,996 200,000 11,466 11,996 200,000 19,653 20,183 200,000
14 59 2,650 11,669 11,934 200,000 11,669 11,934 200,000 20,939 21,204 200,000
15 60 2,650 11,671 11,671 200,000 11,671 11,671 200,000 22,030 22,030 200,000
16 61 2,650 11,449 11,449 200,000 11,449 11,449 200,000 22,908 22,908 200,000
17 62 2,650 10,980 10,980 200,000 10,980 10,980 200,000 23,531 23,531 200,000
18 63 2,650 10,195 10,195 200,000 10,195 10,195 200,000 23,882 23,882 200,000
19 64 2,650 9,066 9,066 200,000 9,066 9,066 200,000 24,024 24,024 200,000
20 65 2,650 7,542 7,542 200,000 7,542 7,542 200,000 23,957 23,957 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-5
<PAGE> 143
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 5,566 5,566 200,000 5,566 5,566 200,000 23,661 23,661 200,000
22 67 2,650 3,100 3,100 200,000 3,100 3,100 200,000 23,091 23,091 200,000
23 68 2,650 79 79 200,000 79 79 200,000 22,245 22,245 200,000
24 69 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 21,118 21,118 200,000
25 70 2,650 19,706 19,706 200,000
26 71 2,650 17,956 17,956 200,000
27 72 2,650 15,905 15,905 200,000
28 73 2,650 13,451 13,451 200,000
29 74 2,650 10,491 10,491 200,000
30 75 2,650 6,931 6,931 200,000
31 76 2,650 2,692 2,692 200,000
32 77 2,650 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-6
<PAGE> 144
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 0 1,851 200,000 0 1,980 200,000 0 1,980 200,000
5 2,650 4,773 6,893 200,000 6,387 8,507 200,000 8,250 10,370 200,000
10 2,650 9,786 11,111 200,000 15,378 16,703 200,000 21,846 23,171 200,000
20 2,650 7,542 7,542 200,000 27,886 27,886 200,000 53,408 53,408 200,000
@ Age 70 2,650 LAPSED LAPSED LAPSED 22,663 22,663 200,000 68,641 68,641 200,000
@ Age 85 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 94,195 94,195 200,000
@ Age 90 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 51,983 51,983 200,000
</TABLE>
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 47 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-7
<PAGE> 145
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,851 200,000 0 1,980 200,000 0 1,980 200,000
2 47 2,650 1,098 3,218 200,000 1,459 3,579 200,000 1,868 3,988 200,000
3 48 2,650 2,385 4,505 200,000 3,070 5,190 200,000 3,906 6,026 200,000
4 49 2,650 3,618 5,738 200,000 4,720 6,840 200,000 6,024 8,144 200,000
5 50 2,650 4,773 6,893 200,000 6,387 8,507 200,000 8,250 10,370 200,000
6 51 2,650 5,830 7,950 200,000 8,050 10,170 200,000 10,590 12,710 200,000
7 52 2,650 6,790 8,910 200,000 9,712 11,832 200,000 13,050 15,170 200,000
8 53 2,650 7,920 9,775 200,000 11,637 13,492 200,000 15,878 17,733 200,000
9 54 2,650 8,910 10,500 200,000 13,519 15,109 200,000 18,815 20,405 200,000
10 55 2,650 9,786 11,111 200,000 15,378 16,703 200,000 21,846 23,171 200,000
11 56 2,650 10,503 11,563 200,000 17,172 18,232 200,000 24,955 26,015 200,000
12 57 2,650 11,063 11,858 200,000 18,899 19,694 200,000 28,128 28,923 200,000
13 58 2,650 11,466 11,996 200,000 20,558 21,088 200,000 31,350 31,880 200,000
14 59 2,650 11,669 11,934 200,000 22,103 22,368 200,000 34,588 34,853 200,000
15 60 2,650 11,671 11,671 200,000 23,530 23,530 200,000 37,806 37,806 200,000
16 61 2,650 11,449 11,449 200,000 24,824 24,824 200,000 41,002 41,002 200,000
17 62 2,650 10,980 10,980 200,000 25,965 25,965 200,000 44,149 44,149 200,000
18 63 2,650 10,195 10,195 200,000 26,882 26,882 200,000 47,233 47,233 200,000
19 64 2,650 9,066 9,066 200,000 27,541 27,541 200,000 50,317 50,317 200,000
20 65 2,650 7,542 7,542 200,000 27,886 27,886 200,000 53,408 53,408 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-8
<PAGE> 146
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 5,566 5,566 200,000 27,854 27,854 200,000 56,497 56,947 200,000
22 67 2,650 3,100 3,100 200,000 27,396 27,396 200,000 59,556 59,556 200,000
23 68 2,650 79 79 200,000 26,434 26,434 200,000 62,594 62,594 200,000
24 69 2,650 LAPSED LAPSED LAPSED 24,904 24,904 200,000 65,619 65,619 200,000
25 70 2,650 22,663 22,663 200,000 68,641 68,641 200,000
26 71 2,650 19,569 19,569 200,000 71,637 71,637 200,000
27 72 2,650 15,435 15,435 200,000 74,646 74,646 200,000
28 73 2,650 9,988 9,988 200,000 77,621 77,621 200,000
29 74 2,650 2,924 2,924 200,000 80,510 80,510 200,000
30 75 2,650 LAPSED LAPSED LAPSED 83,278 83,278 200,000
31 76 2,650 85,905 85,905 200,000
32 77 2,650 88,354 88,354 200,000
33 78 2,650 90,572 90,572 200,000
34 79 2,650 92,529 92,529 200,000
35 80 2,650 94,164 94,164 200,000
36 81 2,650 95,422 95,422 200,000
37 82 2,650 96,223 96,223 200,000
38 83 2,650 96,498 96,498 200,000
39 84 2,650 95,903 95,903 200,000
40 85 2,650 94,195 94,195 200,000
41 86 2,650 91,062 91,062 200,000
42 87 2,650 86,046 86,046 200,000
43 88 2,650 78,420 78,420 200,000
44 89 2,650 67,468 67,468 200,000
45 90 2,650 51,983 51,983 200,000
46 91 2,650 29,864 29,864 200,000
47 92 2,650 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-9
<PAGE> 147
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- --------------------------------- ---------------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 0 1,851 200,000 0 2,110 200,000 0 2,110 200,000
5 2,650 4,773 6,893 200,000 8,303 10,423 200,000 10,384 12,504 200,000
10 2,650 9,786 11,111 200,000 23,664 24,989 200,000 31,751 33,076 200,000
20 2,650 7,542 7,542 200,000 79,140 79,140 200,000 120,562 120,562 200,000
@ Age 70 2,650 LAPSED LAPSED LAPSED 132,182 132,182 200,000 213,577 213,577 247,749
@ Age 85 2,650 LAPSED LAPSED LAPSED 654,190 654,190 686,900 1,053,764 1,053,764 1,106,452
@ Age 90 2,650 LAPSED LAPSED LAPSED 1,061,102 1,061,102 1,114,157 1,731,867 1,731,867 1,818,460
</TABLE>
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
----------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
----------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-10
<PAGE> 148
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,851 200,000 0 2,110 200,000 0 2,110 200,000
2 47 2,650 1,098 3,218 200,000 1,836 3,956 200,000 2,257 4,377 200,000
3 48 2,650 2,385 4,505 200,000 3,817 5,937 200,000 4,702 6,822 200,000
4 49 2,650 3,618 5,738 200,000 5,974 8,094 200,000 7,394 9,514 200,000
5 50 2,650 4,773 6,893 200,000 8,303 10,423 200,000 10,384 12,504 200,000
6 51 2,650 5,830 7,950 200,000 10,802 12,922 200,000 13,706 15,826 200,000
7 52 2,650 6,790 8,910 200,000 13,494 15,614 200,000 17,398 19,518 200,000
8 53 2,650 7,920 9,775 200,000 16,668 18,523 200,000 21,741 23,596 200,000
9 54 2,650 8,910 10,500 200,000 20,041 21,631 200,000 26,516 28,106 200,000
10 55 2,650 9,786 11,111 200,000 23,664 24,989 200,000 31,751 33,076 200,000
11 56 2,650 10,503 11,563 200,000 27,528 28,588 200,000 37,477 38,537 200,000
12 57 2,650 11,063 11,858 200,000 31,666 32,461 200,000 43,736 44,531 200,000
13 58 2,650 11,466 11,996 200,000 36,117 36,647 200,000 50,573 51,103 200,000
14 59 2,650 11,669 11,934 200,000 40,887 41,152 200,000 58,025 58,290 200,000
15 60 2,650 11,671 11,671 200,000 46,025 46,025 200,000 66,142 66,142 200,000
16 61 2,650 11,449 11,449 200,000 51,589 51,589 200,000 75,025 75,025 200,000
17 62 2,650 10,980 10,980 200,000 57,638 57,638 200,000 84,765 84,765 200,000
18 63 2,650 10,195 10,195 200,000 64,199 64,199 200,000 95,477 95,477 200,000
19 64 2,650 9,066 9,066 200,000 71,343 71,343 200,000 107,353 107,353 200,000
20 65 2,650 7,542 7,542 200,000 79,140 79,140 200,000 120,562 120,562 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-11
<PAGE> 149
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- -----------------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 5,566 5,566 200,000 87,680 87,680 200,000 135,294 135,294 200,000
22 67 2,650 3,100 3,100 200,000 97,092 97,092 200,000 151,765 151,765 200,000
23 68 2,650 79 79 200,000 107,518 107,518 200,000 170,248 170,248 200,893
24 69 2,650 LAPSED LAPSED LAPSED 119,147 119,147 200,000 190,836 190,836 223,278
25 70 2,650 132,182 132,182 200,000 213,577 213,577 247,749
26 71 2,650 146,897 146,897 200,000 238,694 238,694 274,498
27 72 2,650 163,636 163,636 200,000 266,514 266,514 301,161
28 73 2,650 182,834 182,834 202,945 297,340 297,340 330,048
29 74 2,650 204,474 204,474 222,876 331,520 331,520 361,356
30 75 2,650 228,502 228,502 244,497 369,457 369,457 395,319
31 76 2,650 255,255 255,255 268,017 411,624 411,624 432,205
32 77 2,650 284,734 284,734 298,971 458,224 458,224 481,135
33 78 2,650 317,204 317,204 333,064 509,702 509,702 535,187
34 79 2,650 352,945 352,945 370,592 566,552 566,552 594,880
35 80 2,650 392,260 392,260 411,873 629,308 629,308 660,773
36 81 2,650 435,469 435,469 457,243 698,555 698,555 733,482
37 82 2,650 482,908 482,908 507,054 774,929 774,929 813,675
38 83 2,650 534,927 534,927 561,674 859,131 859,131 902,088
39 84 2,650 591,891 591,891 621,485 951,823 951,823 999,414
40 85 2,650 654,190 654,190 686,900 1,053,764 1,053,764 1,106,452
41 86 2,650 722,237 722,237 758,349 1,165,768 1,165,768 1,224,056
42 87 2,650 796,470 796,470 836,294 1,288,678 1,288,678 1,353,111
43 88 2,650 877,364 877,364 921,232 1,423,325 1,423,325 1,494,491
44 89 2,650 965,405 965,405 1,013,675 1,570,726 1,570,726 1,649,262
45 90 2,650 1,061,102 1,061,102 1,114,157 1,731,867 1,731,867 1,818,460
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-12
<PAGE> 150
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 91 2,650 1,164,955 1,164,955 1,223,203 1,907,594 1,907,594 2,002,973
47 92 2,650 1,281,033 1,281,033 1,332,274 2,103,045 2,103,045 2,187,167
48 93 2,650 1,411,482 1,411,482 1,453,827 2,321,403 2,321,403 2,391,045
49 94 2,650 1,558,946 1,558,946 1,590,124 2,566,712 2,566,712 2,618,046
50 95 2,650 1,726,855 1,726,855 1,744,124 2,843,744 2,843,744 2,872,182
51 96 2,650 1,911,777 1,911,777 1,930,894 3,150,106 3,150,106 3,181,607
52 97 2,650 2,114,647 2,114,647 2,135,793 3,488,891 3,488,891 3,523,780
53 98 2,650 2,335,145 2,335,145 2,358,497 3,863,344 3,863,344 3,901,977
54 99 2,650 2,575,180 2,575,180 2,600,932 4,277,098 4,277,098 4,319,869
55 100 2,650 2,839,615 2,839,615 2,868,011 4,733,893 4,733,893 4,781,232
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-13
<PAGE> 151
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,050 0 1,365 200,000 0 1,365 200,000 0 1,365 200,000
5 2,050 2,985 4,625 200,000 2,985 4,625 200,000 4,777 6,417 200,000
10 2,050 6,192 7,217 200,000 6,192 7,217 200,000 11,037 12,062 200,000
20 2,050 6,246 6,246 200,000 6,246 6,246 200,000 16,950 16,950 200,000
@ Age 70 2,050 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 15,177 15,177 200,000
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 34 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-14
<PAGE> 152
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,050 0 1,365 200,000 0 1,365 200,000 0 1,365 200,000
2 47 2,050 608 2,248 200,000 608 2,248 200,000 1,030 2,670 200,000
3 48 2,050 1,461 3,101 200,000 1,461 3,101 200,000 2,299 3,939 200,000
4 49 2,050 2,260 3,900 200,000 2,260 3,900 200,000 3,555 5,195 200,000
5 50 2,050 2,985 4,625 200,000 2,985 4,625 200,000 4,777 6,417 200,000
6 51 2,050 3,658 5,298 200,000 3,658 5,298 200,000 5,986 7,626 200,000
7 52 2,050 4,257 5,897 200,000 4,257 5,987 200,000 7,162 8,802 200,000
8 53 2,050 4,989 6,424 200,000 4,989 6,424 200,000 8,509 9,944 200,000
9 54 2,050 5,626 6,856 200,000 5,626 6,856 200,000 9,800 11,030 200,000
10 55 2,050 6,192 7,217 200,000 6,192 7,217 200,000 11,037 12,062 200,000
11 56 2,050 6,665 7,485 200,000 6,665 7,485 200,000 12,243 13,063 200,000
12 57 2,050 7,045 7,660 200,000 7,045 7,660 200,000 13,395 14,010 200,000
13 58 2,050 7,334 7,744 200,000 7,334 7,744 200,000 14,474 14,884 200,000
14 59 2,050 7,531 7,736 200,000 7,531 7,736 200,000 15,371 15,576 200,000
15 60 2,050 7,636 7,636 200,000 7,636 7,636 200,000 16,089 16,089 200,000
16 61 2,050 7,711 7,711 200,000 7,711 7,711 200,000 16,668 16,668 200,000
17 62 2,050 7,648 7,648 200,000 7,648 7,648 200,000 17,005 17,005 200,000
18 63 2,050 7,402 7,402 200,000 7,402 7,402 200,000 17,059 17,059 200,000
19 64 2,050 6,951 6,951 200,000 6,951 6,951 200,000 17,048 17,048 200,000
20 65 2,050 6,246 6,246 200,000 6,246 6,246 200,000 16,950 16,950 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-15
<PAGE> 153
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,050 5,263 5,263 200,000 5,263 5,263 200,000 16,766 16,766 200,000
22 67 2,050 3,998 3,998 200,000 3,998 3,998 200,000 16,516 16,516 200,000
23 68 2,050 2,446 2,446 200,000 2,446 2,446 200,000 16,179 16,179 200,000
24 69 2,050 577 577 200,000 577 577 200,000 15,733 15,733 200,000
25 70 2,050 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 15,177 15,177 200,000
26 71 2,050 14,444 14,444 200,000
27 72 2,050 13,555 13,555 200,000
28 73 2,050 12,508 12,508 200,000
29 74 2,050 11,144 11,144 200,000
30 75 2,050 9,410 9,410 200,000
31 76 2,050 7,230 7,230 200,000
32 77 2,050 4,357 4,357 200,000
33 78 2,050 762 762 200,000
34 79 2,050 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-16
<PAGE> 154
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,050 0 1,365 200,000 0 1,463 200,000 0 1,463 200,000
5 2,050 2,985 4,625 200,000 4,128 5,768 200,000 6,136 7,776 200,000
10 2,050 6,192 7,217 200,000 10,011 11,036 200,000 16,158 17,183 200,000
20 2,050 6,246 6,246 200,000 19,640 19,640 200,000 38,416 38,416 200,000
@ Age 70 2,050 LAPSED LAPSED LAPSED 18,274 18,274 200,000 49,843 49,843 200,000
@ Age 85 2,050 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 61,713 61,713 200,000
@ Age 90 2,050 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 4,177 4,177 200,000
</TABLE>
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 31 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 46 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-17
<PAGE> 155
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,050 0 1,365 200,000 0 1,463 200,000 0 1,463 200,000
2 47 2,050 608 2,248 200,000 875 2,515 200,000 1,310 2,950 200,000
3 48 2,050 1,461 3,101 200,000 1,958 3,598 200,000 2,848 4,488 200,000
4 49 2,050 2,260 3,900 200,000 3,050 4,690 200,000 4,463 6,103 200,000
5 50 2,050 2,985 4,625 200,000 4,128 5,768 200,000 6,136 7,776 200,000
6 51 2,050 3,658 5,298 200,000 5,217 6,857 200,000 7,893 9,533 200,000
7 52 2,050 4,257 5,897 200,000 6,292 7,932 200,000 9,715 11,355 200,000
8 53 2,050 4,989 6,424 200,000 7,560 8,995 200,000 11,811 13,246 200,000
9 54 2,050 5,626 6,856 200,000 8,792 10,022 200,000 13,958 15,188 200,000
10 55 2,050 6,192 7,217 200,000 10,011 11,036 200,000 16,158 17,183 200,000
11 56 2,050 6,665 7,485 200,000 11,194 12,014 200,000 18,438 19,258 200,000
12 57 2,050 7,045 7,660 200,000 12,339 12,954 200,000 20,781 21,396 200,000
13 58 2,050 7,334 7,744 200,000 13,445 13,855 200,000 23,168 23,578 200,000
14 59 2,050 7,531 7,736 200,000 14,512 14,717 200,000 25,497 25,702 200,000
15 60 2,050 7,636 7,636 200,000 15,537 15,537 200,000 27,770 27,770 200,000
16 61 2,050 7,711 7,711 200,000 16,588 16,588 200,000 30,035 30,035 200,000
17 62 2,050 7,648 7,648 200,000 17,566 17,566 200,000 32,199 32,199 200,000
18 63 2,050 7,402 7,402 200,000 18,423 18,423 200,000 34,219 34,219 200,000
19 64 2,050 6,951 6,951 200,000 19,131 19,131 200,000 36,297 36,297 200,000
20 65 2,050 6,246 6,246 200,000 19,640 19,640 200,000 38,416 38,416 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-18
<PAGE> 156
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,050 5,263 5,263 200,000 19,915 19,915 200,000 40,582 40,582 200,000
22 67 2,050 3,998 3,998 200,000 19,942 19,942 200,000 42,819 42,819 200,000
23 68 2,050 2,446 2,446 200,000 19,705 19,705 200,000 45,114 45,114 200,000
24 69 2,050 577 577 200,000 19,164 19,164 200,000 47,454 47,454 200,000
25 70 2,050 LAPSED LAPSED LAPSED 18,274 18,274 200,000 49,843 49,843 200,000
26 71 2,050 16,940 16,940 200,000 52,234 52,234 200,000
27 72 2,050 15,055 15,055 200,000 54,650 54,650 200,000
28 73 2,050 12,454 12,454 200,000 57,096 57,096 200,000
29 74 2,050 8,925 8,925 200,000 59,456 59,456 200,000
30 75 2,050 4,291 4,291 200,000 61,700 61,700 200,000
31 76 2,050 LAPSED LAPSED LAPSED 63,777 63,777 200,000
32 77 2,050 65,519 65,519 200,000
33 78 2,050 66,914 66,914 200,000
34 79 2,050 67,945 67,945 200,000
35 80 2,050 68,589 68,589 200,000
36 81 2,050 68,819 68,819 200,000
37 82 2,050 68,436 68,436 200,000
38 83 2,050 67,297 67,297 200,000
39 84 2,050 65,164 65,164 200,000
40 85 2,050 61,713 61,713 200,000
41 86 2,050 56,703 56,703 200,000
42 87 2,050 49,115 49,115 200,000
43 88 2,050 38,386 38,386 200,000
44 89 2,050 23,765 23,765 200,000
45 90 2,050 4,177 4,177 200,000
46 91 2,050 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-19
<PAGE> 157
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- --------------------------- ---------------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,050 0 1,365 200,000 0 1,561 200,000 0 1,561 200,000
5 2,050 2,985 4,625 200,000 5,493 7,133 200,000 7,737 9,377 200,000
10 2,050 6,192 7,217 200,000 15,715 16,740 200,000 23,565 24,590 200,000
20 2,050 6,246 6,246 200,000 53,293 53,293 200,000 87,570 87,570 200,000
@ Age 70 2,050 LAPSED LAPSED LAPSED 87,539 87,539 200,000 153,468 153,468 200,000
@ Age 85 2,050 LAPSED LAPSED LAPSED 416,315 416,315 437,130 770,677 770,677 809,211
@ Age 90 2,050 LAPSED LAPSED LAPSED 683,671 683,671 717,855 1,275,057 1,275,057 1,338,810
</TABLE>
* Policy lapses in policy year 25 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-20
<PAGE> 158
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,050 0 1,365 200,000 0 1,561 200,000 0 1,561 200,000
2 47 2,050 608 2,248 200,000 1,155 2,795 200,000 1,603 3,243 200,000
3 48 2,050 1,461 3,101 200,000 2,502 4,142 200,000 3,445 5,085 200,000
4 49 2,050 2,260 3,900 200,000 3,952 5,592 200,000 5,491 7,131 200,000
5 50 2,050 2,985 4,625 200,000 5,493 7,133 200,000 7,737 9,377 200,000
6 51 2,050 3,658 5,298 200,000 7,159 8,799 200,000 10,231 11,871 200,000
7 52 2,050 4,257 5,897 200,000 8,942 10,582 200,000 12,976 14,616 200,000
8 53 2,050 4,989 6,424 200,000 11,062 12,497 200,000 16,206 17,641 200,000
9 54 2,050 5,626 6,856 200,000 13,307 14,537 200,000 19,724 20,954 200,000
10 55 2,050 6,192 7,217 200,000 15,715 16,740 200,000 23,565 24,590 200,000
11 56 2,050 6,665 7,485 200,000 18,286 19,106 200,000 27,788 28,608 200,000
12 57 2,050 7,045 7,660 200,000 21,040 21,655 200,000 32,415 33,030 200,000
13 58 2,050 7,334 7,744 200,000 24,001 24,411 200,000 37,472 37,882 200,000
14 59 2,050 7,531 7,736 200,000 27,195 27,400 200,000 42,911 43,116 200,000
15 60 2,050 7,636 7,636 200,000 30,654 30,654 200,000 48,785 48,785 200,000
16 61 2,050 7,711 7,711 200,000 34,491 34,491 200,000 55,220 55,220 200,000
17 62 2,050 7,648 7,648 200,000 38,660 38,660 200,000 62,200 62,200 200,000
18 63 2,050 7,402 7,402 200,000 43,165 43,165 200,000 69,776 69,776 200,000
19 64 2,050 6,951 6,951 200,000 48,036 48,036 200,000 78,201 78,201 200,000
20 65 2,050 6,246 6,246 200,000 53,293 53,293 200,000 87,570 87,570 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-21
<PAGE> 159
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,050 5,263 5,263 200,000 58,978 58,978 200,000 98,003 98,003 200,000
22 67 2,050 3,998 3,998 200,000 65,163 65,163 200,000 109,652 109,652 200,000
23 68 2,050 2,446 2,446 200,000 71,929 71,929 200,000 122,660 122,660 200,000
24 69 2,050 577 577 200,000 79,356 79,356 200,000 137,197 137,197 200,000
25 70 2,050 LAPSED LAPSED LAPSED 87,539 87,539 200,000 153,468 153,468 200,000
26 71 2,050 96,567 96,567 200,000 171,690 171,690 200,000
27 72 2,050 106,554 106,554 200,000 192,056 192,056 217,024
28 73 2,050 117,627 117,627 200,000 214,644 214,644 238,254
29 74 2,050 129,950 129,950 200,000 239,681 239,681 261,253
30 75 2,050 143,778 143,778 200,000 267,453 267,453 286,175
31 76 2,050 159,420 159,420 200,000 298,282 298,282 313,196
32 77 2,050 177,308 177,308 200,000 332,374 332,374 348,993
33 78 2,050 197,931 197,931 207,828 370,067 370,067 388,570
34 79 2,050 220,912 220,912 231,957 411,734 411,734 432,320
35 80 2,050 246,245 246,245 258,557 457,786 457,786 480,676
36 81 2,050 274,150 274,150 287,858 508,678 508,678 534,111
37 82 2,050 304,859 304,859 320,102 564,875 564,875 593,119
38 83 2,050 338,616 338,616 355,547 626,900 626,900 658,245
39 84 2,050 375,677 375,677 394,460 695,306 695,306 730,071
40 85 2,050 416,315 416,315 437,130 770,677 770,677 809,211
41 86 2,050 460,817 460,817 483,858 853,683 853,683 896,367
42 87 2,050 509,487 509,487 534,962 944,853 944,853 992,096
43 88 2,050 562,638 562,638 590,770 1,044,925 1,044,925 1,097,172
44 89 2,050 620,590 620,590 651,620 1,154,707 1,154,707 1,212,442
45 90 2,050 683,671 683,671 717,855 1,275,057 1,275,057 1,338,810
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-22
<PAGE> 160
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ---------------------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 91 2,050 752,196 752,196 789,806 1,406,910 1,406,910 1,477,256
47 92 2,050 828,498 828,498 861,638 1,553,207 1,553,207 1,615,336
48 93 2,050 913,918 913,918 941,335 1,716,176 1,716,176 1,767,661
49 94 2,050 1,010,147 1,010,147 1,030,350 1,898,778 1,898,778 1,936,753
50 95 2,050 1,119,421 1,119,421 1,130,615 2,104,323 2,104,323 2,125,366
51 96 2,050 1,239,751 1,239,751 1,252,149 2,332,128 2,332,128 2,355,449
52 97 2,050 1,371,740 1,371,740 1,385,457 2,583,942 2,583,942 2,609,782
53 98 2,050 1,515,176 1,515,176 1,530,328 2,862,279 2,862,279 2,890,901
54 99 2,050 1,671,244 1,671,244 1,687,956 3,169,974 3,169,974 3,201,674
55 100 2,050 1,843,175 1,843,175 1,861,607 3,510,076 3,510,076 3,545,177
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Female Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $2,050.00-Premium Mode: Annual-Riders: None Form # C2-98
C-23
<PAGE> 161
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 3,800 0 2,661 200,000 0 2,661 200,000 0 2,661 200,000
5 3,800 5,867 8,907 200,000 5,867 8,907 200,000 8,409 11,449 200,000
10 3,800 10,999 12,899 200,000 10,999 12,899 200,000 18,566 20,466 200,000
20 3,800 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 21,897 21,897 200,000
@ Age 70 3,800 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 6,133 6,133 200,000
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 20 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 20 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 27 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-24
<PAGE> 162
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ --------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 3,800 0 2,661 200,000 0 2,661 200,000 0 2,661 200,000
2 47 3,800 1,380 4,420 200,000 1,380 4,420 200,000 2,052 5,092 200,000
3 48 3,800 3,017 6,057 200,000 3,017 6,057 200,000 4,282 7,322 200,000
4 49 3,800 4,512 7,552 200,000 4,512 7,552 200,000 6,385 9,425 200,000
5 50 3,800 5,867 8,907 200,000 5,867 8,907 200,000 8,409 11,449 200,000
6 51 3,800 7,062 10,102 200,000 7,062 10,102 200,000 10,355 13,395 200,000
7 52 3,800 8,078 11,118 200,000 8,078 11,118 200,000 12,248 15,288 200,000
8 53 3,800 9,294 11,954 200,000 9,294 11,954 200,000 14,447 17,107 200,000
9 54 3,800 10,268 12,548 200,000 10,268 12,548 200,000 16,553 18,833 200,000
10 55 3,800 10,999 12,899 200,000 10,999 12,899 200,000 18,566 20,466 200,000
11 56 3,800 11,488 13,008 200,000 11,488 13,008 200,000 20,426 21,946 200,000
12 57 3,800 11,689 12,829 200,000 11,689 12,829 200,000 22,072 23,212 200,000
13 58 3,800 11,600 12,360 200,000 11,600 12,360 200,000 23,447 24,207 200,000
14 59 3,800 11,196 11,576 200,000 11,196 11,576 200,000 24,490 24,870 200,000
15 60 3,800 10,447 10,447 200,000 10,447 10,447 200,000 25,182 25,182 200,000
16 61 3,800 9,233 9,233 200,000 9,233 9,233 200,000 25,371 25,371 200,000
17 62 3,800 7,569 7,569 200,000 7,569 7,569 200,000 25,148 25,148 200,000
18 63 3,800 5,373 5,373 200,000 5,373 5,373 200,000 24,486 24,486 200,000
19 64 3,800 2,598 2,598 200,000 2,598 2,598 200,000 23,420 23,420 200,000
20 65 3,800 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 21,897 21,897 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-25
<PAGE> 163
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 3,800 19,902 19,902 200,000
22 67 3,800 17,372 17,372 200,000
23 68 3,800 14,216 14,216 200,000
24 69 3,800 10,467 10,467 200,000
25 70 3,800 6,133 6,133 200,000
26 71 3,800 1,032 1,032 200,000
27 72 3,800 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-26
<PAGE> 164
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 3,800 0 2,661 200,000 0 2,846 200,000 0 2,846 200,000
5 3,800 5,867 8,907 200,000 8,087 11,127 200,000 10,941 13,981 200,000
10 3,800 10,999 12,899 200,000 18,420 20,320 200,000 27,842 29,742 200,000
20 3,800 LAPSED LAPSED LAPSED 24,395 24,395 200,000 60,958 60,958 200,000
@ Age 70 3,800 LAPSED LAPSED LAPSED 4,466 4,466 200,000 71,620 71,620 200,000
@ Age 85 3,800 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 20 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 26 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 40 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-27
<PAGE> 165
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 3,800 0 2,661 200,000 0 2,846 200,000 0 2,846 200,000
2 47 3,800 1,380 4,420 200,000 1,893 4,933 200,000 2,585 5,625 200,000
3 48 3,800 3,017 6,057 200,000 3,978 7,018 200,000 5,322 8,362 200,000
4 49 3,800 4,512 7,552 200,000 6,042 9,082 200,000 8,091 11,131 200,000
5 50 3,800 5,867 8,907 200,000 8,087 11,127 200,000 10,941 13,981 200,000
6 51 3,800 7,062 10,102 200,000 10,091 13,131 200,000 13,880 16,920 200,000
7 52 3,800 8,078 11,118 200,000 12,033 15,073 200,000 16,937 19,977 200,000
8 53 3,800 9,294 11,954 200,000 14,292 16,952 200,000 20,478 23,138 200,000
9 54 3,800 10,268 12,548 200,000 16,422 18,702 200,000 24,111 26,391 200,000
10 55 3,800 10,999 12,899 200,000 18,420 20,320 200,000 27,842 29,742 200,000
11 56 3,800 11,488 13,008 200,000 20,282 21,802 200,000 31,620 33,140 200,000
12 57 3,800 11,689 12,829 200,000 21,958 23,098 200,000 35,393 36,533 200,000
13 58 3,800 11,600 12,360 200,000 23,442 24,202 200,000 39,110 39,870 200,000
14 59 3,800 11,196 11,576 200,000 24,701 25,081 200,000 42,720 43,100 200,000
15 60 3,800 10,447 10,447 200,000 25,702 25,702 200,000 46,210 46,210 200,000
16 61 3,800 9,233 9,233 200,000 26,326 26,326 200,000 49,449 49,449 200,000
17 62 3,800 7,569 7,569 200,000 26,592 26,592 200,000 52,542 52,542 200,000
18 63 3,800 5,373 5,373 200,000 26,410 26,410 200,000 55,476 55,476 200,000
19 64 3,800 2,598 2,598 200,000 25,722 25,722 200,000 58,292 58,292 200,000
20 65 3,800 LAPSED LAPSED LAPSED 24,395 24,395 200,000 60,958 60,958 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-28
<PAGE> 166
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 3,800 22,367 22,367 200,000 63,477 63,477 200,000
22 67 3,800 19,493 19,493 200,000 65,818 65,818 200,000
23 68 3,800 15,673 15,673 200,000 67,930 67,930 200,000
24 69 3,800 10,739 10,739 200,000 69,855 69,855 200,000
25 70 3,800 4,466 4,466 200,000 71,620 71,620 200,000
26 71 3,800 LAPSED LAPSED LAPSED 73,124 73,124 200,000
27 72 3,800 74,431 74,431 200,000
28 73 3,800 75,421 75,421 200,000
29 74 3,800 75,960 75,960 200,000
30 75 3,800 75,945 75,945 200,000
31 76 3,800 75,251 75,251 200,000
32 77 3,800 73,726 73,726 200,000
33 78 3,800 71,186 71,186 200,000
34 79 3,800 67,382 67,382 200,000
35 80 3,800 61,996 61,996 200,000
36 81 3,800 54,654 54,654 200,000
37 82 3,800 44,834 44,834 200,000
38 83 3,800 31,901 31,901 200,000
39 84 3,800 14,254 14,254 200,000
40 85 3,800 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-29
<PAGE> 167
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- ---------------------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 3,800 0 2,661 200,000 0 3,032 200,000 0 3,032 200,000
5 3,800 5,867 8,907 200,000 10,736 13,776 200,000 13,933 16,973 200,000
10 3,800 10,999 12,899 200,000 29,593 31,493 200,000 41,408 43,308 200,000
20 3,800 LAPSED LAPSED LAPSED 93,805 93,805 200,000 154,670 154,670 200,000
@ Age 70 3,800 LAPSED LAPSED LAPSED 158,708 158,708 200,000 274,623 274,623 318,562
@ Age 85 3,800 LAPSED LAPSED LAPSED 798,491 798,491 838,415 1,326,706 1,326,706 1,393,041
@ Age 90 3,800 LAPSED LAPSED LAPSED 1,291,507 1,291,507 1,356,083 2,148,100 2,148,100 2,255,505
</TABLE>
* Policy lapses in policy year 20 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-30
<PAGE> 168
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
--------------------------------------------------------------- ---------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 3,800 0 2,661 200,000 0 3,032 200,000 0 3,032 200,000
2 47 3,800 1,380 4,420 200,000 2,429 5,469 200,000 3,141 6,181 200,000
3 48 3,800 3,017 6,057 200,000 5,029 8,069 200,000 6,453 9,493 200,000
4 49 3,800 4,512 7,552 200,000 7,790 10,830 200,000 10,023 13,063 200,000
5 50 3,800 5,867 8,907 200,000 10,736 13,776 200,000 13,933 16,973 200,000
6 51 3,800 7,062 10,102 200,000 13,869 16,909 200,000 18,223 21,263 200,000
7 52 3,800 8,078 11,118 200,000 17,196 20,236 200,000 22,963 26,003 200,000
8 53 3,800 9,294 11,954 200,000 21,125 23,785 200,000 28,567 31,227 200,000
9 54 3,800 10,268 12,548 200,000 25,246 27,526 200,000 34,693 36,973 200,000
10 55 3,800 10,999 12,899 200,000 29,593 31,493 200,000 41,408 43,308 200,000
11 56 3,800 11,488 13,008 200,000 34,205 35,725 200,000 48,730 50,250 200,000
12 57 3,800 11,689 12,829 200,000 39,087 40,227 200,000 56,688 57,828 200,000
13 58 3,800 11,600 12,360 200,000 44,288 45,048 200,000 65,325 66,085 200,000
14 59 3,800 11,196 11,576 200,000 49,847 50,227 200,000 74,701 75,081 200,000
15 60 3,800 10,447 10,447 200,000 55,811 55,811 200,000 84,930 84,930 200,000
16 61 3,800 9,233 9,233 200,000 62,165 62,165 200,000 96,047 96,047 200,000
17 62 3,800 7,569 7,569 200,000 69,062 69,062 200,000 108,343 108,343 200,000
18 63 3,800 5,373 5,373 200,000 76,562 76,562 200,000 122,027 122,027 200,000
19 64 3,800 2,598 2,598 200,000 84,777 84,777 200,000 137,373 137,373 200,000
20 65 3,800 LAPSED LAPSED LAPSED 93,805 93,805 200,000 154,670 154,670 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-31
<PAGE> 169
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
--------------------------------------------------------------- ---------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 3,800 103,827 103,827 200,000 174,232 174,232 209,078
22 67 3,800 115,032 115,032 200,000 195,853 195,853 233,065
23 68 3,800 127,691 127,691 200,000 219,629 219,629 259,162
24 69 3,800 142,118 142,118 200,000 245,798 245,798 287,584
25 70 3,800 158,708 158,708 200,000 274,623 274,623 318,562
26 71 3,800 177,940 177,940 204,631 306,355 306,355 352,308
27 72 3,800 199,543 199,543 225,484 341,495 341,495 385,889
28 73 3,800 223,443 223,443 248,022 380,438 380,438 422,286
29 74 3,800 249,947 249,947 272,442 423,648 423,648 461,776
30 75 3,800 279,427 279,427 298,987 471,690 471,690 504,709
31 76 3,800 312,336 312,336 327,953 525,236 525,236 551,497
32 77 3,800 348,534 348,534 365,960 584,265 584,265 613,478
33 78 3,800 388,330 388,330 407,746 649,305 649,305 681,770
34 79 3,800 432,061 432,061 453,664 720,928 720,928 756,974
35 80 3,800 480,085 480,085 504,090 799,749 799,749 839,737
36 81 3,800 532,779 532,779 559,418 886,446 886,446 930,769
37 82 3,800 590,542 590,542 620,069 981,742 981,742 1,030,829
38 83 3,800 653,782 653,782 686,471 1,086,433 1,086,433 1,140,755
39 84 3,800 722,941 722,941 759,088 1,201,157 1,201,157 1,261,215
40 85 3,800 798,491 798,491 838,415 1,326,706 1,326,706 1,393,041
41 86 3,800 880,952 880,952 924,999 1,463,894 1,463,894 1,537,089
42 87 3,800 970,896 970,896 1,019,441 1,613,546 1,613,546 1,694,223
43 88 3,800 1,068,896 1,068,896 1,122,340 1,776,684 1,776,684 1,865,518
44 89 3,800 1,175,545 1,175,545 1,234,323 1,954,497 1,954,497 2,052,221
45 90 3,800 1,291,507 1,291,507 1,356,083 2,148,100 2,148,100 2,255,505
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-32
<PAGE> 170
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
--------------------------------------------------------------- ---------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 91 3,800 1,417,461 1,417,461 1,488,334 2,358,341 2,358,341 2,476,258
47 92 3,800 1,558,640 1,558,640 1,620,986 2,593,533 2,593,533 2,697,274
48 93 3,800 1,717,603 1,717,603 1,769,131 2,857,978 2,857,978 2,943,717
49 94 3,800 1,897,489 1,897,489 1,935,439 3,157,099 3,157,099 3,220,241
50 95 3,800 2,102,443 2,102,443 2,123,468 3,497,079 3,497,079 3,532,050
51 96 3,800 2,328,193 2,328,193 2,351,475 3,873,892 3,873,892 3,912,631
52 97 3,800 2,575,858 2,575,858 2,601,617 4,290,269 4,290,269 4,333,172
53 98 3,800 2,845,053 2,845,053 2,873,504 4,750,100 4,750,100 4,797,601
54 99 3,800 3,138,107 3,138,107 3,169,488 5,258,064 5,258,064 5,310,644
55 100 3,800 3,460,948 3,460,948 3,495,558 5,819,168 5,819,168 5,877,359
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Smoker Standard Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $3,800.00-Premium Mode: Annual-Riders: None Form # C2-98
C-33
<PAGE> 171
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 0 1,848 201,848 0 1,848 201,848 0 1,848 201,848
5 2,650 4,674 6,794 206,794 4,674 6,794 206,794 6,382 8,502 208,502
10 2,650 9,368 10,693 210,693 9,368 10,693 210,693 14,784 16,109 216,109
20 2,650 5,633 5,633 205,633 5,633 5,633 205,633 22,124 22,124 222,124
@ Age 70 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 16,004 16,004 216,004
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 31 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-34
<PAGE> 172
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,848 201,848 0 1,848 201,848 0 1,848 201,848
2 47 2,650 1,081 3,201 203,201 1,081 3,201 203,201 1,485 3,605 203,605
3 48 2,650 2,348 4,468 204,468 2,348 4,468 204,468 3,152 5,272 205,272
4 49 2,650 3,553 5,673 205,673 3,553 5,673 205,673 4,776 6,896 206,896
5 50 2,650 4,674 6,794 206,794 4,674 6,794 206,794 6,382 8,502 208,502
6 51 2,650 5,687 7,807 207,807 5,687 7,807 207,807 7,971 10,091 210,091
7 52 2,650 6,595 8,715 208,715 6,595 8,715 208,715 9,543 11,663 211,663
8 53 2,650 7,662 9,517 209,517 7,662 9,517 209,517 11,338 13,193 213,193
9 54 2,650 8,578 10,168 210,168 8,578 10,168 210,168 13,093 14,683 214,683
10 55 2,650 9,368 10,693 210,693 9,368 10,693 210,693 14,784 16,109 216,109
11 56 2,650 9,986 11,046 211,046 9,986 11,046 211,046 16,388 17,448 217,448
12 57 2,650 10,433 11,228 211,228 10,433 11,228 211,228 17,883 18,678 218,678
13 58 2,650 10,713 11,243 211,243 10,713 11,243 211,243 19,245 19,775 219,775
14 59 2,650 10,778 11,043 211,043 10,778 11,043 211,043 20,429 20,694 220,694
15 60 2,650 10,631 10,631 210,631 10,631 10,631 210,631 21,389 21,389 221,389
16 61 2,650 10,249 10,249 210,249 10,249 10,249 210,249 22,101 22,101 222,101
17 62 2,650 9,610 9,610 209,610 9,610 9,610 209,610 22,520 22,520 222,520
18 63 2,650 8,645 8,645 208,645 8,645 8,645 208,645 22,626 22,626 222,626
19 64 2,650 7,334 7,334 207,334 7,334 7,334 207,334 22,493 22,493 222,493
20 65 2,650 5,633 5,633 205,633 5,633 5,633 205,633 22,124 22,124 222,124
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-35
<PAGE> 173
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 3,499 3,499 203,499 3,499 3,499 203,499 21,498 21,498 221,498
22 67 2,650 913 913 200,913 913 913 200,913 20,569 20,569 220,569
23 68 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 19,342 19,342 219,342
24 69 2,650 17,819 17,819 217,819
25 70 2,650 16,004 16,004 216,004
26 71 2,650 13,853 13,853 213,853
27 72 2,650 11,416 11,416 211,416
28 73 2,650 8,601 8,601 208,601
29 74 2,650 5,318 5,318 205,318
30 75 2,650 1,500 1,500 201,500
31 76 2,650 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-36
<PAGE> 174
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 0 1,848 201,848 0 1,977 201,977 0 1,977 201,977
5 2,650 4,674 6,794 206,794 6,262 8,382 208,382 8,181 10,301 210,301
10 2,650 9,368 10,693 210,693 14,730 16,055 216,055 21,525 22,850 222,850
20 2,650 5,633 5,633 205,633 22,721 22,721 222,721 49,240 49,240 249,240
@ Age 70 2,650 LAPSED LAPSED LAPSED 11,802 11,802 211,802 57,352 57,352 257,352
@ Age 85 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 40 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-37
<PAGE> 175
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,848 201,848 0 1,977 201,977 0 1,977 201,977
2 47 2,650 1,081 3,201 203,201 1,440 3,560 203,560 1,857 3,977 203,977
3 48 2,650 2,348 4,468 204,468 3,027 5,147 205,147 3,882 6,002 206,002
4 49 2,650 3,553 5,673 205,673 4,642 6,762 206,762 5,980 8,100 208,100
5 50 2,650 4,674 6,794 206,794 6,262 8,382 208,382 8,181 10,301 210,301
6 51 2,650 5,687 7,807 207,807 7,864 9,984 209,984 10,490 12,610 212,610
7 52 2,650 6,595 8,715 208,715 9,445 11,565 211,565 12,911 15,031 215,031
8 53 2,650 7,662 9,517 209,517 11,271 13,126 213,126 15,691 17,546 217,546
9 54 2,650 8,578 10,168 210,168 13,025 14,615 214,615 18,569 20,159 220,159
10 55 2,650 9,368 10,693 210,693 14,730 16,055 216,055 21,525 22,850 222,850
11 56 2,650 9,986 11,046 211,046 16,333 17,393 217,393 24,540 25,600 225,600
12 57 2,650 10,433 11,228 211,228 17,830 18,625 218,625 27,591 28,386 228,386
13 58 2,650 10,713 11,243 211,243 19,216 19,746 219,746 30,655 31,185 231,185
14 59 2,650 10,778 11,043 211,043 20,435 20,700 220,700 33,684 33,949 233,949
15 60 2,650 10,631 10,631 210,631 21,481 21,481 221,481 36,628 36,628 236,628
16 61 2,650 10,249 10,249 210,249 22,325 22,325 222,325 39,463 39,463 239,463
17 62 2,650 9,610 9,610 209,610 22,940 22,940 222,940 42,142 42,142 242,142
18 63 2,650 8,645 8,645 208,645 23,243 23,243 223,243 44,634 44,634 244,634
19 64 2,650 7,334 7,334 207,334 23,192 23,192 223,192 47,002 47,002 247,002
20 65 2,650 5,633 5,633 205,633 22,721 22,721 222,721 49,240 49,240 249,240
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-38
<PAGE> 176
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 3,499 3,499 203,499 21,762 21,762 221,762 51,319 51,319 251,319
22 67 2,650 913 913 200,913 20,265 20,265 220,265 53,180 53,180 253,180
23 68 2,650 LAPSED LAPSED LAPSED 18,155 18,155 218,155 54,813 54,813 254,813
24 69 2,650 15,378 15,378 215,378 56,208 56,208 256,208
25 70 2,650 11,802 11,802 211,802 57,352 57,352 257,352
26 71 2,650 7,315 7,315 207,315 58,184 58,184 258,184
27 72 2,650 1,774 1,774 201,774 58,739 58,739 258,739
28 73 2,650 LAPSED LAPSED LAPSED 58,904 58,904 258,904
29 74 2,650 58,562 58,562 258,562
30 75 2,650 57,615 57,615 257,615
31 76 2,650 55,984 55,984 255,984
32 77 2,650 53,562 53,562 253,562
33 78 2,650 50,213 50,213 250,213
34 79 2,650 45,842 45,842 245,842
35 80 2,650 40,300 40,300 240,300
36 81 2,650 33,456 33,456 233,456
37 82 2,650 25,148 25,148 225,148
38 83 2,650 15,256 15,256 215,256
39 84 2,650 3,160 3,160 203,160
40 85 2,650 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-39
<PAGE> 177
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- ----------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,650 0 1,848 201,848 0 2,106 202,106 0 2,106 202,106
5 2,650 4,674 6,794 206,794 8,148 10,268 210,268 10,299 12,419 212,419
10 2,650 9,368 10,693 210,693 22,667 23,992 223,992 31,266 32,591 232,591
20 2,650 5,633 5,633 205,633 65,777 65,777 265,777 110,939 110,939 310,939
@ Age 70 2,650 LAPSED LAPSED LAPSED 91,220 91,220 291,220 180,488 180,488 380,488
@ Age 85 2,650 LAPSED LAPSED LAPSED 20,653 20,653 220,653 668,450 668,450 868,450
@ Age 90 2,650 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 982,094 982,094 1,182,094
</TABLE>
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 41 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-40
<PAGE> 178
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 46 2,650 0 1,848 201,848 0 2,106 202,106 0 2,106 202,106
2 47 2,650 1,081 3,201 203,201 1,816 3,936 203,936 2,246 4,366 204,366
3 48 2,650 2,348 4,468 204,468 3,768 5,888 205,888 4,674 6,794 206,794
4 49 2,650 3,553 5,673 205,673 5,881 8,001 208,001 7,342 9,462 209,462
5 50 2,650 4,674 6,794 206,794 8,148 10,268 210,268 10,299 12,419 212,419
6 51 2,650 5,687 7,807 207,807 10,561 12,681 212,681 13,577 15,697 215,697
7 52 2,650 6,595 8,715 208,715 13,134 15,254 215,254 17,211 19,331 219,331
8 53 2,650 7,662 9,517 209,517 16,151 18,006 218,006 21,480 23,335 223,335
9 54 2,650 8,578 10,168 210,168 19,315 20,905 220,905 26,158 27,748 227,748
10 55 2,650 9,368 10,693 210,693 22,667 23,992 223,992 31,266 32,591 232,591
11 56 2,650 9,986 11,046 211,046 26,178 27,238 227,238 36,823 37,883 237,883
12 57 2,650 10,433 11,228 211,228 29,864 30,659 230,659 42,854 43,649 243,649
13 58 2,650 10,713 11,243 211,243 33,746 34,276 234,276 49,385 49,915 249,915
14 59 2,650 10,778 11,043 211,043 37,793 38,058 238,058 56,420 56,685 256,685
15 60 2,650 10,631 10,631 210,631 42,023 42,023 242,023 63,963 63,963 263,963
16 61 2,650 10,249 10,249 210,249 46,445 46,445 246,445 72,059 72,059 272,059
17 62 2,650 9,610 9,610 209,610 51,071 51,071 251,071 80,731 80,731 280,731
18 63 2,650 8,645 8,645 208,645 55,845 55,845 255,845 90,016 90,016 290,016
19 64 2,650 7,334 7,334 207,334 60,758 60,758 260,758 100,059 100,059 300,059
20 65 2,650 5,633 5,633 205,633 65,777 65,777 265,777 110,939 110,939 310,939
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-41
<PAGE> 179
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ----------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 66 2,650 3,499 3,499 203,499 70,861 70,861 270,861 122,725 122,725 322,725
22 67 2,650 913 913 200,913 75,992 75,992 275,992 135,463 135,463 335,463
23 68 2,650 LAPSED LAPSED LAPSED 81,125 81,125 281,125 149,258 149,258 349,258
24 69 2,650 86,236 86,236 286,236 164,224 164,224 364,224
25 70 2,650 91,220 91,220 291,220 180,488 180,488 380,488
26 71 2,650 95,989 95,989 295,989 198,143 198,143 398,143
27 72 2,650 100,418 100,418 300,418 217,389 217,389 417,389
28 73 2,650 104,318 104,318 304,318 238,299 238,299 438,299
29 74 2,650 107,507 107,507 307,507 260,953 260,953 460,953
30 75 2,650 109,780 109,780 309,780 285,466 285,466 485,466
31 76 2,650 110,938 110,938 310,938 311,991 311,991 511,991
32 77 2,650 110,757 110,757 310,757 340,672 340,672 540,672
33 78 2,650 109,041 109,041 309,041 371,642 371,642 571,642
34 79 2,650 105,523 105,523 305,523 405,102 405,102 605,102
35 80 2,650 99,853 99,853 299,853 441,224 441,224 641,224
36 81 2,650 91,622 91,622 291,622 480,223 480,223 680,223
37 82 2,650 80,269 80,269 280,269 522,314 522,314 722,314
38 83 2,650 65,152 65,152 265,152 567,784 567,784 767,784
39 84 2,650 45,529 45,529 245,529 616,454 616,454 816,454
40 85 2,650 20,653 20,653 220,653 668,450 668,450 868,450
41 86 2,650 LAPSED LAPSED LAPSED 723,913 723,913 923,913
42 87 2,650 782,926 782,926 982,926
43 88 2,650 845,409 845,409 1,045,409
44 89 2,650 911,747 911,747 1,111,747
45 90 2,650 982,094 982,094 1,182,094
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-42
<PAGE> 180
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- --------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 91 2,650 1,056,202 1,056,202 1,256,202
47 92 2,650 1,134,591 1,134,591 1,334,591
48 93 2,650 1,217,445 1,217,445 1,417,445
49 94 2,650 1,305,512 1,305,512 1,505,512
50 95 2,650 1,399,128 1,399,128 1,599,128
51 96 2,650 1,500,100 1,500,100 1,700,100
52 97 2,650 1,609,417 1,609,417 1,809,417
53 98 2,650 1,726,705 1,726,705 1,926,705
54 99 2,650 1,852,344 1,852,344 2,052,344
55 100 2,650 1,985,075 1,985,075 2,185,075
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 45 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
2 Version 98.09.01
Initial Modal Premium: $2,650.00-Premium Mode: Annual-Riders: None Form # C2-98
C-43
<PAGE> 181
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,450 0 928 200,000 0 928 200,000 0 928 200,000
5 1,450 2,590 3,669 200,000 2,509 3,669 200,000 3,132 4,292 200,000
10 1,450 5,472 6,197 200,000 5,472 6,197 200,000 7,225 7,950 200,000
20 1,450 7,508 7,508 200,000 7,508 7,508 200,000 13,328 13,328 200,000
@ Age 70 1,450 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 35 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-44
<PAGE> 182
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 36 1,450 0 928 200,000 0 928 200,000 0 928 200,000
2 37 1,450 498 1,658 200,000 498 1,658 200,000 686 1,846 200,000
3 38 1,450 1,198 2,358 200,000 1,198 2,358 200,000 1,549 2,709 200,000
4 39 1,450 1,868 3,028 200,000 1,868 3,028 200,000 2,356 3,516 200,000
5 40 1,450 2,509 3,669 200,000 2,509 3,669 200,000 3,132 4,292 200,000
6 41 1,450 3,098 4,258 200,000 3,098 4,258 200,000 3,877 5,037 200,000
7 42 1,450 3,658 4,818 200,000 3,658 4,818 200,000 4,616 5,776 200,000
8 43 1,450 4,313 5,328 200,000 4,313 5,328 200,000 5,492 6,507 200,000
9 44 1,450 4,917 5,787 200,000 4,917 5,787 200,000 6,362 7,232 200,000
10 45 1,450 5,472 6,197 200,000 5,472 6,197 200,000 7,225 7,950 200,000
11 46 1,450 5,977 6,557 200,000 5,977 6,557 200,000 8,081 8,661 200,000
12 47 1,450 6,434 6,869 200,000 6,434 6,869 200,000 8,930 9,365 200,000
13 48 1,450 6,820 7,110 200,000 6,820 7,110 200,000 9,727 10,017 200,000
14 49 1,450 7,159 7,304 200,000 7,159 7,304 200,000 10,452 10,597 200,000
15 50 1,450 7,428 7,428 200,000 7,428 7,428 200,000 11,103 11,103 200,000
16 51 1,450 7,650 7,650 200,000 7,650 7,650 200,000 11,708 11,708 200,000
17 52 1,450 7,781 7,781 200,000 7,781 7,781 200,000 12,240 12,240 200,000
18 53 1,450 7,819 7,819 200,000 7,819 7,819 200,000 12,680 12,680 200,000
19 54 1,450 7,721 7,721 200,000 7,721 7,721 200,000 13,050 13,050 200,000
20 55 1,450 7,508 7,508 200,000 7,508 7,508 200,000 13,328 13,328 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-45
<PAGE> 183
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 56 1,450 7,136 7,136 200,000 7,136 7,136 200,000 13,539 13,539 200,000
22 57 1,450 6,605 6,605 200,000 6,605 6,605 200,000 13,637 13,637 200,000
23 58 1,450 5,913 5,913 200,000 5,913 5,913 200,000 13,625 13,625 200,000
24 59 1,450 5,014 5,014 200,000 5,014 5,014 200,000 13,502 13,502 200,000
25 60 1,450 3,905 3,905 200,000 3,905 3,905 200,000 13,225 13,225 200,000
26 61 1,450 2,538 2,538 200,000 2,538 2,538 200,000 12,792 12,792 200,000
27 62 1,450 908 908 200,000 908 908 200,000 12,206 12,206 200,000
28 63 1,450 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 11,418 11,418 200,000
29 64 1,450 10,429 10,429 200,000
30 65 1,450 9,214 9,214 200,00
31 66 1,450 7,745 7,745 200,000
32 67 1,450 5,973 5,973 200,000
33 68 1,450 3,891 3,891 200,000
34 69 1,450 1,490 1,490 200,000
35 70 1,450 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-46
<PAGE> 184
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,450 0 928 200,000 0 996 200,000 0 996 200,000
5 1,450 2,509 3,669 200,000 3,357 4,517 200,000 4,065 5,225 200,000
10 1,450 5,472 6,197 200,000 8,441 9,166 200,000 10,654 11,379 200,000
20 1,450 7,508 7,508 200,000 18,659 18,659 200,000 27,770 27,770 200,000
@ Age 70 1,450 LAPSED LAPSED LAPSED 621 621 200,000 50,271 50,271 200,000
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 36 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 49 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-47
<PAGE> 185
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 36 1,450 0 928 200,000 0 996 200,000 0 996 200,000
2 37 1,450 498 1,658 200,000 686 1,846 200,000 881 2,041 200,000
3 38 1,450 1,198 2,358 200,000 1,556 2,716 200,000 1,929 3,089 200,000
4 39 1,450 1,868 3,028 200,000 2,446 3,606 200,000 2,983 4,143 200,000
5 40 1,450 2,509 3,669 200,000 3,357 4,517 200,000 4,065 5,225 200,000
6 41 1,450 3,098 4,258 200,000 4,267 5,427 200,000 5,177 6,337 200,000
7 42 1,450 3,658 4,818 200,000 5,201 6,361 200,000 6,346 7,506 200,000
8 43 1,450 4,313 5,328 200,000 6,279 7,294 200,000 7,719 8,734 200,000
9 44 1,450 4,917 5,787 200,000 7,359 8,229 200,000 9,154 10,024 200,000
10 45 1,450 5,472 6,197 200,000 8,441 9,166 200,000 10,654 11,379 200,000
11 46 1,450 5,977 6,557 200,000 9,525 10,105 200,000 12,223 12,803 200,000
12 47 1,450 6,434 6,869 200,000 10,612 11,047 200,000 13,863 14,298 200,000
13 48 1,450 6,820 7,110 200,000 11,680 11,970 200,000 15,533 15,823 200,000
14 49 1,450 7,159 7,304 200,000 12,750 12,895 200,000 17,214 17,359 200,000
15 50 1,450 7,428 7,428 200,000 13,802 13,802 200,000 18,906 18,906 200,000
16 51 1,450 7,650 7,650 200,000 14,863 14,863 200,000 20,642 20,642 200,000
17 52 1,450 7,781 7,781 200,000 15,892 15,892 200,000 22,402 22,402 200,000
18 53 1,450 7,819 7,819 200,000 16,887 16,887 200,000 24,168 24,168 200,000
19 54 1,450 7,721 7,721 200,000 17,803 17,803 200,000 25,964 25,964 200,000
20 55 1,450 7,508 7,508 200,000 18,659 18,659 200,000 27,770 27,770 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-48
<PAGE> 186
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 56 1,450 7,136 7,136 200,000 19,408 19,408 200,000 29,610 29,610 200,000
22 57 1,450 6,605 6,605 200,000 20,045 20,045 200,000 31,447 31,447 200,000
23 58 1,450 5,913 5,913 200,000 20,565 20,565 200,000 33,281 33,281 200,000
24 59 1,450 5,014 5,014 200,000 20,918 20,918 200,000 35,115 35,115 200,000
25 60 1,450 3,905 3,905 200,000 21,095 21,095 200,000 36,911 36,911 200,000
26 61 1,450 2,538 2,538 200,000 21,041 21,041 200,000 38,670 38,670 200,000
27 62 1,450 908 908 200,000 20,741 20,741 200,000 40,394 40,394 200,000
28 63 1,450 LAPSED LAPSED LAPSED 20,113 20,113 200,000 42,043 42,043 200,000
29 64 1,450 19,110 19,110 200,000 43,618 43,618 200,000
30 65 1,450 17,659 17,659 200,000 45,097 45,097 200,000
31 66 1,450 15,677 15,677 200,000 46,461 46,461 200,000
32 67 1,450 13,093 13,093 200,000 47,667 47,667 200,000
33 68 1,450 9,801 9,801 200,000 48,709 48,709 200,000
34 69 1,450 5,706 5,706 200,000 49,580 49,580 200,000
35 70 1,450 621 621 200,000 50,271 50,271 200,000
36 71 1,450 LAPSED LAPSED LAPSED 50,734 50,734 200,000
37 72 1,450 50,992 50,992 200,000
38 73 1,450 50,957 50,957 200,000
39 74 1,450 50,532 50,532 200,000
40 75 1,450 49,629 49,629 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-49
<PAGE> 187
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
41 76 1,450 48,167 48,167 200,000
42 77 1,450 46,031 46,031 200,000
43 78 1,450 43,070 43,070 200,000
44 79 1,450 39,140 39,140 200,000
45 80 1,450 34,034 34,034 200,000
46 81 1,450 27,514 27,514 200,000
47 82 1,450 19,272 19,272 200,000
48 83 1,450 8,967 8,967 200,000
49 84 1,450 LAPSED LAPSED 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-50
<PAGE> 188
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- --------------------------------- ---------------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,450 0 928 200,000 0 1,064 200,000 0 1,064 200,000
5 1,450 2,509 3,669 200,000 4,364 5,524 200,000 5,165 6,325 200,000
10 1,450 5,472 6,197 200,000 12,814 13,539 200,000 15,637 16,362 200,000
20 1,450 7,508 7,508 200,000 45,328 45,328 200,000 60,395 60,395 200,000
@ Age 70 1,450 LAPSED LAPSED LAPSED 210,580 210,580 244,273 307,784 307,784 357,029
@ Age 85 1,450 LAPSED LAPSED LAPSED 967,575 967,575 1,015,953 1,437,917 1,437,917 1,509,813
@ Age 90 1,450 LAPSED LAPSED LAPSED 1,554,164 1,554,164 1,631,872 2,349,659 2,349,659 2,467,142
</TABLE>
* Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-51
<PAGE> 189
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
----------------------------------------------------- --------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 36 1,450 0 928 200,000 0 1,064 200,000 0 1,064 200,000
2 37 1,450 498 1,658 200,000 884 2,044 200,000 1,084 2,244 200,000
3 38 1,450 1,198 2,358 200,000 1,947 3,107 200,000 2,344 3,504 200,000
4 39 1,450 1,868 3,028 200,000 3,104 4,264 200,000 3,692 4,852 200,000
5 40 1,450 2,509 3,669 200,000 4,364 5,524 200,000 5,165 6,325 200,000
6 41 1,450 3,098 4,258 200,000 5,715 6,875 200,000 6,775 7,935 200,000
7 42 1,450 3,658 4,818 200,000 7,192 8,352 200,000 8,564 9,724 200,000
8 43 1,450 4,313 5,328 200,000 8,931 9,946 200,000 10,694 11,709 200,000
9 44 1,450 4,917 5,787 200,000 10,800 11,670 200,000 13,044 13,914 200,000
10 45 1,450 5,472 6,197 200,000 12,814 13,539 200,000 15,637 16,362 200,000
11 46 1,450 5,977 6,557 200,000 14,992 15,572 200,000 18,500 19,080 200,000
12 47 1,450 6,434 6,869 200,000 17,351 17,786 200,000 21,663 22,098 200,000
13 48 1,450 6,820 7,110 200,000 19,892 20,182 200,000 25,115 25,405 200,000
14 49 1,450 7,159 7,304 200,000 22,659 22,804 200,000 28,867 29,012 200,000
15 50 1,450 7,428 7,428 200,000 25,657 25,657 200,000 32,956 32,956 200,000
16 51 1,450 7,650 7,650 200,000 28,951 28,951 200,000 37,459 37,459 200,000
17 52 1,450 7,781 7,781 200,000 32,536 32,536 200,000 42,405 42,405 200,000
18 53 1,450 7,819 7,819 200,000 36,449 36,449 200,000 47,830 47,830 200,000
19 54 1,450 7,721 7,721 200,000 40,692 40,692 200,000 53,810 53,810 200,000
20 55 1,450 7,508 7,508 200,000 45,328 45,328 200,000 60,395 60,395 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-52
<PAGE> 190
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ----------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 56 1,450 7,136 7,136 200,000 50,372 50,372 200,000 67,678 67,678 200,000
22 57 1,450 6,605 6,605 200,000 55,880 55,880 200,000 75,712 75,712 200,000
23 58 1,450 5,913 5,913 200,000 61,917 61,917 200,000 84,593 84,593 200,000
24 59 1,450 5,014 5,014 200,000 68,524 68,524 200,000 94,431 94,431 200,000
25 60 1,450 3,905 3,905 200,000 75,783 75,783 200,000 105,324 105,324 200,000
26 61 1,450 2,538 2,538 200,000 83,762 83,762 200,000 117,414 117,414 200,000
27 62 1,450 908 908 200,000 92,572 92,572 200,000 130,866 130,866 200,000
28 63 1,450 LAPSED LAPSED LAPSED 102,301 102,301 200,000 145,848 145,848 200,000
29 64 1,450 113,090 113,090 200,000 162,580 162,580 201,599
30 65 1,450 125,097 125,097 200,000 181,184 181,184 221,044
31 66 1,450 138,516 138,516 200,000 201,751 201,751 242,101
32 67 1,450 153,594 153,594 200,000 224,455 224,455 267,102
33 68 1,450 170,626 170,626 201,339 249,524 249,524 294,438
34 69 1,450 189,645 189,645 221,884 277,207 277,207 324,332
35 70 1,450 210,580 210,580 244,273 307,784 307,784 357,029
36 71 1,450 233,624 233,624 268,667 341,555 341,555 392,788
37 72 1,450 259,091 259,091 292,773 378,966 378,966 428,231
38 73 1,450 287,269 287,269 318,868 420,424 420,424 466,671
39 74 1,450 318,499 318,499 347,164 466,398 466,398 508,374
40 75 1,450 353,191 353,191 377,914 517,434 517,434 553,655
41 76 1,450 391,837 391,837 411,428 574,170 574,170 602,879
42 77 1,450 434,414 434,414 456,134 636,868 636,868 668,711
43 78 1,450 481,301 481,301 505,366 706,125 706,125 741,431
44 79 1,450 532,905 532,905 559,550 782,605 782,605 821,735
45 80 1,450 589,659 589,659 619,142 867,025 867,025 910,376
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-53
<PAGE> 191
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
----------------------------------------------------------- ---------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 81 1,450 652,026 652,026 684,627 960,173 960,173 1,008,182
47 82 1,450 720,485 720,485 756,510 1,062,903 1,062,903 1,116,048
48 83 1,450 795,542 795,542 835,319 1,176,157 1,176,157 1,234,965
49 84 1,450 877,718 877,718 921,604 1,300,822 1,300,822 1,365,863
50 85 1,450 967,575 967,575 1,015,953 1,437,917 1,437,917 1,509,813
51 86 1,450 1,065,704 1,065,704 1,118,989 1,588,535 1,588,535 1,667,962
52 87 1,450 1,172,736 1,172,736 1,231,373 1,753,808 1,753,808 1,841,498
53 88 1,450 1,289,352 1,289,352 1,353,819 1,934,850 1,934,850 2,031,593
54 89 1,450 1,416,252 1,416,252 1,487,064 2,133,026 2,133,026 2,239,677
55 90 1,450 1,554,164 1,554,164 1,631,872 2,349,659 2,349,659 2,467,142
56 91 1,450 1,703,809 1,703,809 1,788,999 2,585,883 2,585,883 2,715,177
57 92 1,450 1,871,114 1,871,114 1,945,959 2,848,644 2,848,644 2,962,589
58 93 1,450 2,059,187 2,059,187 2,120,962 3,142,229 3,142,229 3,236,496
59 94 2,271,851 2,271,851 2,317,288 3,472,088 3,472,088 3,541,529
60 95 1,450 2,514,075 2,514,075 2,539,216 3,844,648 3,844,648 3,883,094
61 96 1,450 2,780,831 2,780,831 2,808,640 4,256,650 4,256,650 4,299,216
62 97 1,450 3,073,462 3,073,462 3,104,197 4,712,253 4,712,253 4,759,376
63 98 1,450 3,391,485 3,391,485 3,425,399 5,215,820 5,215,820 5,267,978
64 99 1,450 3,737,656 3,737,656 3,775,033 5,772,238 5,772,238 5,829,961
65 100 1,450 4,119,015 4,119,015 4,160,205 6,386,532 6,386,532 6,450,397
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 35 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $1,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-54
<PAGE> 192
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- --------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,450 0 3,146 200,000 0 3,146 200,000 0 3,146 200,000
5 4,450 6,072 9,632 200,000 6,072 9,632 200,000 11,182 14,742 200,000
10 4,450 9,875 12,100 200,000 9,875 12,100 200,000 25,502 27,727 200,000
20 4,450 0 0 0 0 0 0 34,058 34,058 200,000
@ Age 70 4,450 3,957 3,957 200,000 3,957 3,957 200,000 35,593 35,593 200,000
@ Age 85 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 17 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 17 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 28 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-55
<PAGE> 193
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 4,450 0 3,146 200,000 0 3,146 200,000 0 3,146 200,000
2 57 4,450 1,484 5,044 200,000 1,484 5,044 200,000 2,591 6,151 200,000
3 58 4,450 3,219 6,779 200,000 3,219 6,779 200,000 5,505 9,065 200,000
4 59 4,450 4,747 8,307 200,000 4,747 8,307 200,000 8,354 11,914 200,000
5 60 4,450 6,072 9,632 200,000 6,072 9,632 200,000 11,182 14,742 200,000
6 61 4,450 7,153 10,713 200,000 7,153 10,713 200,000 13,991 17,551 200,000
7 62 4,450 7,990 11,550 200,000 7,990 11,550 200,000 16,737 20,297 200,000
8 63 4,450 8,964 12,079 200,000 8,964 12,079 200,000 19,804 22,919 200,000
9 64 4,450 9,608 12,278 200,000 9,608 12,278 200,000 22,731 25,401 200,000
10 65 4,450 9,875 12,100 200,000 9,875 12,100 200,000 25,502 27,727 200,000
11 66 4,450 9,717 11,497 200,000 9,717 11,497 200,000 28,041 29,821 200,000
12 67 4,450 9,103 10,438 200,000 9,103 10,438 200,000 30,333 31,668 200,000
13 68 4,450 7,978 8,868 200,000 7,978 8,868 200,000 32,405 33,295 200,000
14 69 4,450 6,301 6,746 200,000 6,301 6,746 200,000 34,183 34,628 200,000
15 70 4,450 3,957 3,957 200,000 3,957 3,957 200,000 35,593 35,593 200,000
16 71 4,450 786 786 200,000 786 786 200,000 36,386 36,386 200,000
17 72 4,450 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 36,604 36,604 200,000
18 73 4,450 36,225 36,225 200,000
19 74 4,450 35,394 35,394 200,000
20 75 4,450 34,058 34,058 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-56
<PAGE> 194
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 76 4,450 32,180 32,180 200,000
22 77 4,450 29,675 29,675 200,000
23 78 4,450 26,426 26,426 200,000
24 79 4,450 22,343 22,343 200,000
25 80 4,450 17,275 17,275 200,000
26 81 4,450 11,068 11,068 200,000
27 82 4,450 3,513 3,513 200,000
28 83 4,450 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-57
<PAGE> 195
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- -------------------------- ---------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,450 0 3,146 200,000 0 3,364 200,000 0 3,364 200,000
5 4,450 6,072 9,632 200,000 8,598 12,158 200,000 14,285 17,845 200,000
10 4,450 9,875 12,100 200,000 18,007 20,232 200,000 37,350 39,575 200,000
20 4,450 0 0 0 753 753 200,000 87,047 87,047 200,000
@ Age 70 4,450 3,957 3,957 200,000 19,844 19,844 200,000 63,100 63,100 200,000
@ Age 85 4,450 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 137,045 137,045 200,000
@ Age 90 4,450 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 166,683 166,683 200,000
</TABLE>
* Policy lapses in policy year 17 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 21 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 6.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-58
<PAGE> 196
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 4,450 0 3,146 200,000 0 3,364 200,000 0 3,364 200,000
2 57 4,450 1,484 5,044 200,000 2,083 5,643 200,000 3,223 6,783 200,000
3 58 4,450 3,219 6,779 200,000 4,331 7,891 200,000 6,752 10,312 200,000
4 59 4,450 4,747 8,307 200,000 6,503 10,063 200,000 10,421 13,981 200,000
5 60 4,450 6,072 9,632 200,000 8,598 12,158 200,000 14,285 17,845 200,000
6 61 4,450 7,153 10,713 200,000 10,573 14,133 200,000 18,353 21,913 200,000
7 62 4,450 7,990 11,550 200,000 12,423 15,983 200,000 22,594 26,154 200,000
8 63 4,450 8,964 12,079 200,000 14,525 17,940 200,000 27,402 30,517 200,000
9 64 4,450 9,608 12,278 200,000 16,404 19,074 200,000 32,323 34,993 200,000
10 65 4,450 9,875 12,100 200,000 18,007 20,232 200,000 37,350 39,575 200,000
11 66 4,450 9,717 11,497 200,000 19,274 21,054 200,000 42,421 44,201 200,000
12 67 4,450 9,103 10,438 200,000 20,163 21,498 200,000 47,531 48,866 200,000
13 68 4,450 7,978 8,868 200,000 20,605 21,495 200,000 52,716 53,606 200,000
14 69 4,450 6,301 6,746 200,000 20,543 20,988 200,000 57,921 58,366 200,000
15 70 4,450 3,957 3,957 200,000 19,844 19,844 200,000 63,100 63,100 200,000
16 71 4,450 786 786 200,000 18,337 18,337 200,000 68,060 68,060 200,000
17 72 4,450 LAPSED LAPSED LAPSED 15,932 15,932 200,000 72,885 72,885 200,000
18 73 4,450 12,385 12,385 200,000 77,586 77,586 200,000
19 74 4,450 7,434 7,434 200,000 82,307 82,307 200,000
20 75 4,450 753 753 200,000 87,047 87,047 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-59
<PAGE> 197
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
-------------------------------------------------- ------------------------
END 0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 76 4,450 LAPSED LAPSED LAPSED 91,826 91,826 200,000
22 77 4,450 96,639 96,639 200,000
23 78 4,450 101,474 101,474 200,000
24 79 4,450 106,350 106,350 200,000
25 80 4,450 111,270 111,270 200,000
26 81 4,450 116,255 116,255 200,000
27 82 4,450 121,326 121,326 200,000
28 83 4,450 126,532 126,532 200,000
29 84 4,450 131,764 131,764 200,000
30 85 4,450 137,045 137,045 200,000
31 86 4,450 142,423 142,423 200,000
32 87 4,450 147,955 147,955 200,000
33 88 4,450 153,696 153,696 200,000
34 89 4,450 159,862 159,862 200,000
35 90 4,450 166,683 166,683 200,000
36 91 4,450 174,437 174,437 200,000
37 92 4,450 183,689 183,689 200,000
38 93 4,450 195,200 195,200 201,056
39 94 4,450 208,270 208,270 212,435
40 95 4,450 222,403 222,403 224,627
41 96 4,450 237,181 237,181 239,553
42 97 4,450 252,635 252,635 255,161
43 98 4,450 268,781 268,781 271,469
44 99 4,450 285,645 285,645 288,501
45 100 4,450 303,233 303,233 306,265
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-60
<PAGE> 198
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
<TABLE>
<S> <C>
NUMERIC SUMMARY The following table shows how differences in investment
returns and policy charges would affect policy cash value
and death benefit.
</TABLE>
<TABLE>
<CAPTION>
GUARANTEED CHARGES* GUARANTEED CHARGES** CURRENT CHARGES***
-------------------------- ---------------------------- ---------------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 4,450 0 3,146 200,000 22 3,582 200,000 22 3,582 200,000
5 4,450 6,072 9,632 200,000 11,623 15,183 200,000 17,936 21,496 200,000
10 4,450 9,875 12,100 200,000 30,437 32,662 200,000 54,495 56,720 200,000
20 4,450 0 0 0 76,989 76,989 200,000 210,742 210,742 225,494
@ Age 70 4,450 3,957 3,957 200,000 52,787 52,787 200,000 112,958 112,958 200,000
@ Age 85 4,450 LAPSED LAPSED 200,000 135,166 135,166 200,000 650,426 650,426 682,948
@ Age 90 4,450 LAPSED LAPSED 200,000 208,321 208,321 218,738 1,086,640 1,086,640 1,140,972
</TABLE>
* Policy lapses in policy year 17 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy continues to age 100 based on guaranteed charges and a gross
investment return of 12.00%.
*** Policy continues to age 100 based on current charges and a gross investment
return of 12.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------------------
-------------------------
Signature of Applicant or Policyowner
Date
REPRESENTATIVE'S I certify that this illustration has been presented to the
ACKNOWLEDGEMENT applicant and that I have explained that any not-guaranteed
elements illustrated are subject to change. I have made no
statements that are inconsistent with the illustration.
------------------------------------------------------
-------------------------
Signature of Representative
Date
</TABLE>
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-61
<PAGE> 199
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 56 4,450 0 3,146 200,000 22 3,582 200,000 22 3,582 200,000
2 57 4,450 1,484 5,044 200,000 2,710 6,270 200,000 3,883 7,443 200,000
3 58 4,450 3,219 6,779 200,000 5,548 9,108 200,000 8,106 11,666 200,000
4 59 4,450 4,747 8,307 200,000 8,512 12,072 200,000 12,758 16,318 200,000
5 60 4,450 6,072 9,632 200,000 11,623 15,183 200,000 17,936 21,496 200,000
6 61 4,450 7,153 10,713 200,000 14,861 18,421 200,000 23,700 27,260 200,000
7 62 4,450 7,990 11,550 200,000 18,251 21,811 200,000 30,072 33,632 200,000
8 63 4,450 8,964 12,079 200,000 22,199 25,314 200,000 37,509 40,624 200,000
9 64 4,450 9,608 12,278 200,000 26,265 28,935 200,000 45,626 48,296 200,000
10 65 4,450 9,875 12,100 200,000 30,437 32,662 200,000 54,495 56,720 200,000
11 66 4,450 9,717 11,497 200,000 34,702 36,482 200,000 64,147 65,927 200,000
12 67 4,450 9,103 10,438 200,000 39,071 40,406 200,000 74,684 76,019 200,000
13 68 4,450 7,978 8,868 200,000 43,539 44,429 200,000 86,257 87,147 200,000
14 69 4,450 6,301 6,746 200,000 48,122 48,567 200,000 98,969 99,414 200,000
15 70 4,450 3,957 3,957 200,000 52,787 52,787 200,000 112,958 112,958 200,000
16 71 4,450 786 786 200,000 57,489 57,489 200,000 128,315 128,315 200,000
17 72 4,450 LAPSED LAPSED LAPSED 62,294 62,294 200,000 145,415 145,415 200,000
18 73 4,450 67,161 67,161 200,000 164,614 164,614 200,000
19 74 4,450 72,064 72,064 200,000 186,373 186,373 203,147
20 75 4,450 76,989 76,989 200,000 210,742 210,742 225,494
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-62
<PAGE> 200
LIFE INSURANCE ILLUSTRATION
MONY Custom Equity Master
FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
STANDARD LEDGER STATEMENT continued
<TABLE>
<CAPTION>
GUARANTEED CHARGES CURRENT CHARGES
------------------------------------------------------ ---------------------------------
END 0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
OF PREMIUM CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR AGE OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 76 4,450 81,941 81,941 200,000 237,815 237,815 249,705
22 77 4,450 86,938 86,938 200,000 267,737 267,737 281,124
23 78 4,450 92,034 92,034 200,000 300,798 300,798 315,838
24 79 4,450 97,276 97,276 200,000 337,313 337,313 354,179
25 80 4,450 102,707 102,707 200,000 377,628 377,628 396,509
26 81 4,450 108,383 108,383 200,000 422,118 422,118 443,224
27 82 4,450 114,349 114,349 200,000 471,195 471,195 494,755
28 83 4,450 120,689 120,689 200,000 525,309 525,309 551,574
29 84 4,450 127,541 127,541 200,000 584,889 584,889 614,133
30 85 4,450 135,166 135,166 200,000 650,426 650,426 682,948
31 86 4,450 143,974 143,974 200,000 722,446 722,446 758,568
32 87 4,450 154,611 154,611 200,000 801,493 801,493 841,568
33 88 4,450 168,077 168,077 200,000 888,108 888,108 932,513
34 89 4,450 185,906 185,906 200,000 982,944 982,944 1,032,091
35 90 4,450 208,321 208,321 218,738 1,086,640 1,086,640 1,140,972
36 91 4,450 232,693 232,693 244,328 1,199,747 1,199,747 1,259,734
37 92 4,450 259,860 259,860 270,254 1,325,521 1,325,521 1,378,541
38 93 4,450 290,303 290,303 299,012 1,465,997 1,465,997 1,509,977
39 94 4,450 324,616 324,616 331,108 1,623,763 1,623,763 1,656,238
40 95 4,450 363,569 363,569 367,205 1,801,874 1,801,874 1,819,892
41 96 4,450 406,484 406,484 410,549 1,998,843 1,998,843 2,018,832
42 97 4,450 453,591 453,591 458,127 2,216,661 2,216,661 2,238,828
43 98 4,450 504,850 504,850 509,899 2,457,414 2,457,414 2,481,988
44 99 4,450 560,697 560,697 566,304 2,723,440 2,723,440 2,750,674
45 100 4,450 622,221 622,221 628,444 3,017,144 3,017,144 3,047,315
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc. or Enterprise Accumulation Trust that these hypothetical rates of return
can be achieved for any one year, or sustained over any period of time.
Age 55 Male Non-Smoker Preferred Prepared on: 09/10/1998
Specified Amount: $200,000-Death Benefit Option: Specified Amount for Option
1 Version 98.09.01
Initial Modal Premium: $4,450.00-Premium Mode: Annual-Riders: None Form # C2-98
C-63
<PAGE> 201
The complete registration statement and other filed documents for MONY
Variable Account L can be reviewed and copied at the Securities and Exchange
Commission's Public Reference Room in Washington, D.C. You may get information
on the operation of the public reference room by calling the Securities Exchange
Commission at 1-800-SEC-0330. The registration statement and other filed
documents for MONY Variable Account L are available on the Securities and
Exchange Commission's Internet site at http://www.sec.gov. You may get copies of
this information by paying a duplicating fee, and writing the Public Reference
Section of the Securities and Exchange Commission, Washington, D.C. 20549-6009.
<PAGE> 202
BULK RATE
U.S. POSTAGE
P A I D
PERMIT NO. 8048
NEW YORK,
NEW YORK
MONY LIFE INSURANCE COMPANY
ADMINISTRATIVE OFFICES
1740 BROADWAY, NEW YORK, NY 10019
[THE MONY GROUP LOGO]
MONY LIFE INSURANCE COMPANY AND MONY
SECURITIES
CORPORATION ARE MEMBERS OF THE MONY GROUP
- --------------------------------------------------------------------------------
FORM NO. 14429 SL 3/00
