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MONY Custom Estate Master
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Prospectus Portfolio
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Last Survivor Flexible Premium
Variable Universal Life Insurance Policy
Issued by
MONY Life Insurance Company
<TABLE>
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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>
May 1, 2000
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<PAGE> 2
PROSPECTUS
Dated May 1, 2000
Last Survivor Flexible Premium Variable
Universal Life Insurance Policy
Issued By
MONY Life Insurance Company
MONY Variable Account L
MONY Life Insurance Company (the "Company") issues the last survivor variable
universal life insurance policy described in this prospectus. Among the policy's
many terms are:
Allocation of Premium and Fund Values:
- - You can tell us what to do with your premium payments. You can also tell us
what to do with the fund values your policy may create for you resulting from
those premium payments.
- You can tell us to place some or all of them into a separate account.
That separate account is called the MONY Variable Account L.
- If you do, you can also tell us to place your premium payments and
fund values into any 20 of the 25 different subaccounts of MONY
Variable Account L. Each of these subaccounts seeks to achieve a
different investment objective. If you tell us to place your premium
payments and fund 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 not earning any money on your premium payments
and fund values and also that premium payments and fund values may
lose some or all of their value.
- You can also tell us to place some or all of your premium payments and
fund values into our account. Our account is called the Guaranteed
Interest Account. If you do, we will guarantee that those premium
payments 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 fund values you place into the Guaranteed Interest
Account become part of our assets.
Death Benefit:
- - We will pay a death benefit if the last surviving insured dies before reaching
age 100 while the Policy is in effect. That death benefit will never be less
than the 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., 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
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PAGE
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Summary of the Policy....................................... 1
Important Policy Terms.................................... 1
Purpose of the Policy..................................... 1
Policy Premium Payments and Values........................ 1
Charges and Deductions.................................... 3
Fees and Expenses of the Funds............................ 3
The Death Benefit......................................... 7
Premium Features.......................................... 8
MONY Variable Account L................................... 8
Allocation Options........................................ 8
Transfer of Fund Value.................................... 8
Policy Loans.............................................. 9
Full Surrender............................................ 9
Partial Surrender......................................... 9
Right to Return Policy Period............................. 9
Grace Period and Lapse.................................... 9
Tax Treatment of Increases in Fund Value.................. 10
Tax Treatment of Death Benefit............................ 10
Riders.................................................... 10
Contacting the Company.................................... 10
Understanding the Policy.................................. 11
Information About the Company and MONY Variable Account L... 12
MONY Life Insurance Company............................... 12
Year 2000 Issue........................................... 12
MONY Variable Account L................................... 12
The Funds................................................... 18
MONY Series Fund, Inc..................................... 18
Enterprise Accumulation Trust............................. 18
Dreyfus Stock Index Fund.................................. 21
The Dreyfus Socially Responsible Growth Fund, Inc......... 21
Fidelity Variable Insurance Products Fund................. 21
Fidelity Variable Insurance Products Fund II.............. 21
Fidelity Variable Insurance Products Fund III............. 21
Janus Aspen Series........................................ 22
Purchase of Portfolio Shares by MONY Variable Account L... 22
Detailed Information About the Policy....................... 25
Application for a Policy.................................. 25
Right to Examine a Policy -- Right to Return Policy
Period................................................. 27
Premiums.................................................. 27
Allocation of Net Premiums................................ 29
Death Benefits under the Policy........................... 29
Death Benefit Options..................................... 29
Changes in the Specified Amount........................... 32
Other Optional Insurance Benefits......................... 33
Option to Split Policy.................................... 33
Benefits at Maturity...................................... 34
Policy Values............................................. 34
Determination of Fund Value............................... 34
Calculating Unit Values for Each Subaccount............... 35
Determining Fund Value.................................... 36
Transfer of Fund Value.................................... 37
Right to Exchange Policy.................................. 37
Option to Obtain Paid-Up Insurance........................ 37
</TABLE>
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Policy Loans.............................................. 38
Full Surrender............................................ 39
Partial Surrender......................................... 39
Grace Period and Lapse.................................... 40
Charges and Deductions...................................... 42
Deductions from Premiums.................................. 43
Daily Deduction from MONY Variable Account L.............. 43
Monthly Deductions from Fund Value........................ 44
Surrender Charge.......................................... 45
Corporate Purchasers...................................... 45
Transaction and Other Charges............................. 46
Guarantee of Certain Charges.............................. 46
Other Information........................................... 46
Federal Income Tax Considerations......................... 46
Charge for Company Income Taxes........................... 50
Voting of Fund Shares..................................... 50
Disregard of Voting Instructions.......................... 50
Report to Policy Owners................................... 52
Substitution of Investments and Right to Change
Operations............................................. 52
Changes to Comply with Law................................ 53
Performance Information..................................... 53
The Guaranteed Interest Account............................. 54
General Description....................................... 54
Death Benefit............................................. 54
Policy Charges............................................ 55
Transfers................................................. 55
Surrenders and Policy Loans............................... 55
More About the Policy....................................... 56
Ownership................................................. 56
Beneficiary............................................... 56
Notification and Claims Procedures........................ 56
Payments.................................................. 57
Payment Plan/Settlement Provisions........................ 57
Payment in Case of Suicide................................ 57
Assignment................................................ 57
Errors on the Application................................. 58
Incontestability.......................................... 58
Policy Illustrations...................................... 58
Distribution of the Policy................................ 58
More About the Company...................................... 59
Management................................................ 60
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
Appendix D.................................................. D-1
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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. 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 and 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, regardless of
Cash Values.
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 50.)
Specified Amount -- The death benefit requested by the policy owner.
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 lives of the insureds. If
either or both insureds are alive on the anniversary of the policy date when the
younger insured is (or would have been) age 100, a maturity benefit will be paid
instead of a death benefit. The policy provides a benefit equal to your choice
of (a) its Specified Amount (under Option 1) or (b) its Specified Amount plus
the Fund Value (under Option 2). 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 the 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 the 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 chose. Except in certain circumstances described later (see
"Death Benefits under the Policy" at page 31), 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 ten years since the policy was issued or the
Specified Amount increased. The Company will also deduct any amount you have
borrowed 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 Fund 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;
- One or both insureds are alive on the date on which the younger insured
would have been age 100;
- Death of the last surviving insured; and
- 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
monthly 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 increased Minimum Monthly Premium for the remainder of the first three
policy years.
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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 45-49.
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DEDUCTIONS FROM PREMIUMS
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Sales Charge -- Varies based on the policy First 10 policy years -- 6% of premiums
year in effect. It is a % of premium paid paid up to target premium and 3% of premium
paid in excess of target premium.
Years 11 and later -- 3% of all premiums.
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Tax Charge State and local -- 0.8%
Federal -- 1.5%
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DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
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Mortality & Expense Risk Charge -- Maximum .35% of subaccount value (0.000959% daily)
Annual Rate
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MONTHLY DEDUCTIONS FROM FUND VALUE
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Cost of Insurance Charge Current cost of insurance rate x net amount
at risk at the beginning of the policy
month
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Administrative Charge -- Monthly $7.50
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Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the
Based on issue age of the younger insured, first 10 policy years (or for 10 years from
Specified Amount, and smoking Status the date of any increase in Specified
Amount)
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Optional Insurance Benefits Charge As applicable.
Monthly Deduction for any other optional
insurance Benefits added by rider
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Transaction and Other Charges
- Partial Surrender Fee $10
- Transfer of Fund Value $25 maximum per transfer over 12(1)
(at Company's Option)
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Surrender Charge See discussion of Surrender Charge on page
Grades from 100% to 0 over 11 years based for grading schedule.
on a schedule. Factors per $1,000 of
Specified Amount vary based on issue age,
gender, and underwriting class
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</TABLE>
(1) Currently no charge on any transfers.
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 20-25. Fees and expenses of the Funds are
described in more detail in the Funds' prospectuses.
3
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Information contained in the following table was provided by the respective
Funds and has not been independently verified by us.
ANNUAL EXPENSES FOR THE YEAR
ENDED DECEMBER 31, 1999
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DISTRIBUTION AND
FUND/PORTFOLIO MANAGEMENT FEES OTHER EXPENSES SERVICE (12-b-1) FEE TOTAL EXPENSES
-------------- --------------- -------------- -------------------- --------------
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MONY SERIES FUND, INC.
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% N/A 0.58%(1)
Money Market Portfolio......... 0.40% 0.04% N/A 0.44%
ENTERPRISE ACCUMULATION TRUST
Equity Portfolio............... 0.78% 0.04% 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% N/A 1.40%(2)
Equity Income Portfolio........ 0.75% 0.30% N/A 1.05%(2)
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%
Multi-Cap Growth Portfolio..... 1.00% 0.40% N/A 1.40%(2)
Balanced Portfolio............. 0.75% 0.20% N/A 0.95%(2)
DREYFUS STOCK INDEX FUND....... 0.245% 0.015% N/A 0.26%
THE DREYFUS SOCIALLY
RESPONSIBLE GROWTH FUND,
INC.......................... 0.75% 0.04% N/A 0.79%
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND (VIP)
Growth Portfolio............... 0.58% 0.09% 0.10% 0.77%(3)
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND II (VIP II)
Contrafund(R)Portfolio......... 0.58% 0.10% 0.10% 0.78%(3)
FIDELITY VARIABLE INSURANCE
PRODUCTS FUND III (VIP III)
Growth Opportunities
Portfolio.................... 0.58% 0.11% 0.10% 0.79%(3)
JANUS ASPEN SERIES
Aggressive Growth Portfolio.... 0.65% 0.02% N/A 0.67%(4)
Balanced Portfolio............. 0.65% 0.02% N/A 0.67%(4)
Capital Appreciation
Portfolio.................... 0.65% 0.04% N/A 0.69%(4)
Worldwide Growth Portfolio..... 0.65% 0.05% N/A 0.70%(4)
</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. This contractual
limitation is in effect until April 30, 2001. 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) Expenses do not include reimbursements. With reimbursements, expenses
would have been Growth -- 0.75%; Contrafund -- 0.75%; and Growth
Opportunities -- 0.78%.
(4) Expenses are based upon expenses for the fiscal year ended December 31,
1999, restated to reflect a reduction in management fee.
4
<PAGE> 10
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. The
investment adviser fees for each portfolio are listed in the table below.
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FUND INVESTMENT ADVISER FEES
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MONY SERIES FUND, INC.
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PORTFOLIO INVESTMENT ADVISER FEE
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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.
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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.
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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.
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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.
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</TABLE>
ENTERPRISE ACCUMULATION TRUST
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PORTFOLIO INVESTMENT ADVISER FEE
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<S> <C> <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.
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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.
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Equity Income Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
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Growth and Income Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
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Growth Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
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</TABLE>
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<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
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Capital Appreciation Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
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Small Company Growth Portfolio Annual rate of 1.00% of the portfolio's
aggregate average daily net assets.
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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.
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High Yield Bond Portfolio Annual rate of 0.60% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
Balanced Portfolio Annual rate of 0.75% of the aggregate
average daily net assets.
--------------------------------------------------------------------------------------------
Multi-Cap Growth Portfolio Annual rate of 1.00% of the aggregate
average daily net assets.
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DREYFUS STOCK INDEX FUND Annual rate of 0.25% of the fund's average
daily net assets.
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THE DREYFUS SOCIALLY RESPONSIBLE GROWTH Annual rate of 0.75% of the fund's average
FUND, INC. daily net assets.
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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.
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</TABLE>
6
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<TABLE>
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PORTFOLIO INVESTMENT ADVISER FEE
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND The fee is calculated by adding a group
II -- Contrafund(R) 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.
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FIDELITY VARIABLE INSURANCE PRODUCTS FUND The fee is calculated by adding a group
III -- Growth Opportunities 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.
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</TABLE>
JANUS ASPEN SERIES
<TABLE>
<CAPTION>
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PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
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Aggressive Growth Portfolio Annual rate of 0.65% of the portfolio's
average daily net assets.
--------------------------------------------------------------------------------------------
Balanced Portfolio Annual rate of 0.65% 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.
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</TABLE>
THE DEATH BENEFIT
The minimum initial Specified Amount is $100,000. 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.
7
<PAGE> 13
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 value as of the date of the
last surviving 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 31.
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 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. Your policy continues 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 50.
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 43.
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 15.
ALLOCATION OPTIONS
You may allocate premium payments and Fund Values among 20 of the 25
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, Inc., 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 16.
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
8
<PAGE> 14
telephone if the proper form has been completed, signed and filed at the
Company's Syracuse Operations Center. See Transfer of Fund Value," page 39.
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
40.
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 42. Outstanding Debt may also affect the continuation of the
policy. See "Grace Period and Lapse," page 43. The Company charges interest on
policy loans. If you do not pay the interest 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 lifetime of either or both insureds
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 42.
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 the request and
return it to you. A partial surrender will decrease the Specified Amount. See
"Partial Surrender," at page 42.
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. 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 29.
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 for the period of time the policy has been in
effect.
If you increase the Specified Amount during the first three policy
years, the Minimum Monthly Premium will be increased and you must continue
paying the Minimum Monthly Premium for the remainder of the first three
policy years.
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. It will
also tell you the date by which we must receive that amount (this period is
called the "grace period").
9
<PAGE> 15
You must understand that after the first three policy years, the policy can
lapse even if the scheduled premiums 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 50.
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 last surviving 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 50.
RIDERS
Additional optional insurance benefits may be added to the policy by an
addendum called a rider. Currently a Four Year Term Insurance Rider is
available.
CONTACTING THE COMPANY
All written requests, notices, and forms required by the policies, and any
questions or inquiries should be directed to the Company Operations Center at 1
MONY Plaza, Syracuse, New York 13202.
10
<PAGE> 16
UNDERSTANDING THE POLICY
The following chart may help you to understand how the policy works.
[HOW THE POLICY WORKS FLOW CHART]
11
<PAGE> 17
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
Company, 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.
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 to resolve the Year 2000 issue. The scope of the
Project was identified, and funding was established.
The Company successfully completed its Year 2000 Project (the "Project") to
ensure Year 2000 readiness. The Company developed and implemented an
enterprise-wide plan to prepare for the Year 2000 issue by ensuring 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.
The total cost of the Project was $2.4 million. The Company does not expect
to incur any material future costs on the Project.
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. Based on this experience and the
amount of work and testing the Company has previously performed, the Company
believes the likelihood of a Year 2000 issue that would have a material effect
on the Company's financial position and results of its operations continues to
be remote as the Company performs month-end, leap year, quarter-end, and
year-end processing. 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 have a material adverse
effect on the Company's financial position and results of its operations.
MONY VARIABLE ACCOUNT L
MONY Variable Account L is a separate investment account of the Company.
Presently, only premium payments and fund values of flexible premium variable
life insurance policies are permitted to be
12
<PAGE> 18
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.
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 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> <C>
MONY MONEY MARKET SUBACCOUNT Seeks to maximize current income
consistent with preservation of capital
This subaccount purchases shares of the and maintenance of liquidity by investing
MONY Series Fund, Inc. Money Market primarily in high quality, short-term
Portfolio. money market instruments.
--------------------------------------------------------------------------------------------
MONY GOVERNMENT SECURITIES SUBACCOUNT Seeks to maximize income and capital
appreciation by investing in bonds, notes
This subaccount purchases shares of the and other obligations either issued or
MONY Series Fund, Inc. Government guaranteed by the U.S. Government, its
Securities Portfolio. agencies or instrumentalities, together
having a weighted average maturity of
between 4 to 8 years.
--------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE> 19
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C> <C>
MONY INTERMEDIATE TERM BOND SUBACCOUNT Seeks to maximize income and capital
appreciation over the intermediate term by
This subaccount purchases shares of the investing in highly rated fixed income
MONY Series Fund, Inc. Intermediate Term securities, issued by a diverse mix of
Bond Portfolio. corporations, the U.S. Government and its
agencies or instrumentalities, as well as
mortgage-backed and asset-backed
securities, together having a
dollar-weighted average maturity of
between 4 and 8 years.
--------------------------------------------------------------------------------------------
MONY LONG TERM BOND SUBACCOUNT Seeks to maximize income and capital
appreciation over the longer term by
This subaccount purchases shares of the investing in highly-rated fixed income
MONY Series Fund, Inc. Long Term Bond securities, issued by a diverse mix of
Portfolio. corporations, the U.S. Government and its
agencies or instrumentalities, as well as
mortgage-backed and asset-backed
securities, together having a
dollar-weighted average maturity of more
than 8 years.
--------------------------------------------------------------------------------------------
ENTERPRISE EQUITY INCOME SUBACCOUNT Seeks a combination of growth and income.
Seeks to achieve an above average and
This subaccount purchases shares of the consistent total return, primarily from
Enterprise Accumulation Trust Equity investments in dividend paying U.S. common
Income Portfolio. stocks.
--------------------------------------------------------------------------------------------
ENTERPRISE GROWTH AND INCOME SUBACCOUNT Seeks total return through capital
appreciation with income as a secondary
This subaccount purchases shares of the consideration by investing in a broadly
Enterprise Accumulation Trust Growth and diversified group of U.S. common stocks of
Income Portfolio. large capitalization companies.
--------------------------------------------------------------------------------------------
ENTERPRISE GROWTH SUBACCOUNT Seeks capital appreciation, primarily from
investments in U.S. common stocks of large
This subaccount purchases shares of the capitalization companies. Pursues goal by
Enterprise Accumulation Trust Growth investing in companies with long-term
Portfolio. earnings potential but which are currently
selling at a discount to their estimated
long-term value.
--------------------------------------------------------------------------------------------
ENTERPRISE EQUITY SUBACCOUNT Seeks long-term capital appreciation by
investing primarily in U.S. common stock
This subaccount purchases shares of the of companies that meet the portfolio
Enterprise Accumulation Trust Equity manager's criteria of high return on
Portfolio. investment capital, strong positions
within their industries, sound financial
fundamentals and management committed to
shareholder interests.
--------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 20
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C> <C>
ENTERPRISE CAPITAL APPRECIATION SUBACCOUNT Seeks maximum capital appreciation,
primarily through investment in common
This subaccount purchases shares of the stocks of U.S. companies that demonstrate
Enterprise Accumulation Trust Capital accelerating earnings momentum and
Appreciation Portfolio. consistently strong financial
characteristics.
--------------------------------------------------------------------------------------------
ENTERPRISE MANAGED SUBACCOUNT Seeks growth of capital over time by
investing in a portfolio consisting of
This subaccount purchases shares of the common stocks, bonds and cash equivalents,
Enterprise Accumulation Trust Managed the percentage of which vary over time
Portfolio. based on the investment manager's
assessment of economic and market trends
and its perception of the relative
investment values available from such
types of securities at any given time.
--------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------
ENTERPRISE SMALL COMPANY VALUE SUBACCOUNT Seeks maximum capital appreciation by
investing primarily in common stocks of
This subaccount purchases shares of the small capitalization companies that the
Enterprise Accumulation Trust Small portfolio manager believes are
Company Value Portfolio. undervalued -- that is the stock's market
price does not fully reflect the company's
value.
--------------------------------------------------------------------------------------------
ENTERPRISE INTERNATIONAL GROWTH SUBACCOUNT Seeks capital appreciation by investing
primarily in a diversified portfolio of
This subaccount purchases shares of the non-United States equity securities that
Enterprise Accumulation Trust the portfolio manager believes are
International Growth Portfolio. undervalued.
--------------------------------------------------------------------------------------------
ENTERPRISE HIGH YIELD BOND SUBACCOUNT Seeks maximum current income by primarily
investing in high yield income-producing
This subaccount purchases shares of the U.S. corporate bonds rated B3 or better by
Enterprise Accumulation Trust High Yield Moody's Investors Service, Inc., or B- or
Bond Portfolio. better 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.
----------------------------------------------------------------------------------------
</TABLE>
15
<PAGE> 21
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C> <C>
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.
--------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH 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 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 CONTRAFUND(R) SUBACCOUNT Seeks long-term capital appreciation by
investing mainly in equity securities of
This subaccount purchases shares of companies whose value is not fully
Fidelity Variable Insurance Products Fund recognized by the public. Typically,
(VIP II) Contrafund(R) 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.
--------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE> 22
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
SUBACCOUNT AND DESIGNATED PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
<S> <C> <C>
FIDELITY 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 capitalizations falling within
the range of companies in the S&P MidCap
400 Index.
--------------------------------------------------------------------------------------------
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 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.
17
<PAGE> 23
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, Janus Aspen Series Aggressive Growth and Capital
Appreciation Portfolios) are diversified, open-end management investment
companies. The Dreyfus Stock Index Fund and Janus Aspen Series Aggressive Growth
and Capital Appreciation Portfolios are non-diversified, open-end management
investment companies. 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, 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 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 who in turn pays the sub-investment advisers.
18
<PAGE> 24
Fees are deducted daily and paid to Enterprise Capital on a monthly basis. The
daily investment advisory fees and sub-advisory fees for each portfolio are
shown in the chart below.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EQUITY PORTFOLIO Annual rate of 0.80% of the Annual rate of 0.40% up to
first $400 million, 0.75% of $1 billion, and 0.30% in
TCW Investment Management, Company the next $400 million and excess of $1 billion of the
is the sub-investment adviser. 0.70% in excess of $800 portfolio's average daily
million of the portfolio's net assets.
average daily net assets.
- ------------------------------------------------------------------------------------------------------
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,
co-sub-investment advisers. million of the portfolio's 0.30% from $1 billion to $2
average daily net assets. billion, 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 first $100 million, 0.25% of
1740 Advisors, Inc. is the net assets. the next $100 million, and
sub-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 first $100 million, 0.25% of
Retirement Systems Investors, Inc. net assets. the next $100 million, and
is the sub-investment adviser. 0.20% in excess of $200
million of 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 first $1 billion and 0.20%
Montag & Caldwell, Inc. is the net assets. in excess of $1 billion of
sub-investment adviser. the portfolio's average
daily net assets.
- ------------------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE> 25
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
PORTFOLIO AND SUB-INVESTMENT ADVISER INVESTMENT ADVISER FEE SUB-INVESTMENT ADVISER FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CAPITAL APPRECIATION PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.45% of the
portfolio's average daily portfolio's average daily
Marsico Capital Management, LLC is net assets. net 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 first $50 million, 0.55% of
William D. Witter, Inc. Is the net assets. the next $50 million and
sub-investment adviser. 0.45% in excess of $100
million of the portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------------------
SMALL COMPANY VALUE PORTFOLIO Annual rate of 0.80% of the Annual rate of 0.40% of the
first $400 million, 0.75% of first $1 billion and 0.30%
Gabelli Asset Management Company the next $400 million and in excess of $1 billion of
is the sub-investment adviser. 0.70% in excess of $800 the portfolio's average
million of the portfolio's daily net assets.
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 first $100 million, 0.35% of
Vontobel USA Inc. is the net assets. $100 million to $200
sub-investment adviser. million, 0.30% of $200 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 first $100 million and
Caywood-Scholl Capital Management net assets. 0.245% in excess of $100
is the sub-investment adviser. million of portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------------------
BALANCED PORTFOLIO Annual rate of 0.75% of the Annual rate of 0.30% up to
average daily net assets. $100 million, 0.25% of $100
Montag & Caldwell, Inc. is the million to $200 million and
sub-investment adviser. 0.20% in excess of $200
million of the portfolio's
average daily net assets.
- ------------------------------------------------------------------------------------------------------
MULTI-CAP GROWTH PORTFOLIO Annual rate of 1.00% 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>
20
<PAGE> 26
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 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 advisory fees and sub-investment advisory 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> <C>
DREYFUS STOCK INDEX FUND Annual rate of 0.245% of the Annual rate of 0.095% of the
fund's average daily net value of the fund's average
Mellon Equity Associates is the assets. daily net assets.
sub-investment adviser.
- ------------------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE Annual rate of 0.75% of the Annual rate of 0.10% of the
GROWTH FUND, INC. fund's average daily net first $32 million, 0.15% in
assets. excess of $32 million up to
NCM Capital Management Group, Inc. $150 million, 0.20% in
is the sub-investment adviser. 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 -- GROWTH PORTFOLIO -- Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II -- CONTRAFUND(R)
PORTFOLIO -- Service Class
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III -- GROWTH OPPORTUNITIES
PORTFOLIO -- Service Class
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 advisory 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.
- ------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 27
<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
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.
- ------------------------------------------------------------------------------------------
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 several 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 advisory 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% 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>
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
22
<PAGE> 28
may also be sold to separate accounts to serve as the underlying investments for
variable life insurance policies, variable annuity policies and qualified plans.
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 beginning on page 16. 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
23
<PAGE> 29
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 by providing life
insurance coverage on two Insureds. A death benefit is payable when the last
surviving insured dies while the policy is in effect. 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 lives of two insureds, each of whom is no older than age 85
with evidence of insurability that satisfies the Company. Each insured's age is
calculated as of 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 $100,000. Subsequent to
issue, the minimum Specified Amount is also $100,000. 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 on 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
"Premiums -- Premium Flexibility," page 29.
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 the insureds 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.
24
<PAGE> 30
If 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; both insureds die 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 of the last surviving insured.
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 premium (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;
(3) The date the Company sends notice to you declining to issue any
policy on the insureds.
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 payment
is specified in your policy and 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,"
on page 29.)
Policy Date
The Company may approve the backdating of a policy. The policy may
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
Each insured is assigned to an underwriting (risk) class. 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
25
<PAGE> 31
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.
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) Each insured's
(a) Age,
(b) Smoking status,
(c) Gender (unless unisex cost of insurance rates apply, see "Monthly
Deductions from Fund Value -- Cost of Insurance," page 47), 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 43.
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
program. 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.
26
<PAGE> 32
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 43.)
Choice of Tests for Compliance with IRS Definition of Life Insurance
When you apply for a policy, you will irrevocably choose which of two tests
will be applied to your policy for compliance with the Federal income tax law
definition of life insurance. These tests are the Cash Value Accumulation Test
and the Guideline Premium/Cash Value Corridor Test. See "Federal Income Tax
Considerations -- Definition of Life Insurance," page 50. If the Guideline
Premium/Cash Value Corridor Test is chosen, the premium payments that may be
made relative to the policy may be limited.
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 52.
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 31 and "Federal Income Tax Considerations -- Definition
of Life Insurance," page 50. 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 treated as a premium
payment. 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 43.
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 increased minimum Monthly Premium
requirements are satisfied for the remainder of the first three policy
years.
27
<PAGE> 33
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 Fund 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 force
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 43.
ALLOCATION OF NET PREMIUMS
Net premiums may currently 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 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
64. Whether you give us instructions in writing or by telephone, the revised
allocation percentages will be effective within seven days from receipt of
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 $100,000.
As long as the policy is in effect, the Company will, upon proof of death
of the surviving 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).
If the death benefit proceeds are not paid by the end of 30 days from the
date we receive proof of death of the last surviving insured, the Company will
pay interest on the proceeds. The interest will be at the rate specified by the
state in which the policy is delivered. Interest is payable from the date of
death to the date of payment.
DEATH BENEFIT OPTIONS
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.
28
<PAGE> 34
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 younger
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 50. The death benefit
percentage under the Cash Value Accumulation Test is shown in the policy.
The death benefit percentage under the Guideline Premium/Cash Value
Corridor Test is 250% for insureds 40 or under, and it declines for older
insureds. A table showing these 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.
The Fund Value used in these calculations is the value as of the date
of the surviving insured's death.
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 assumed that both insureds are
age 35, standard class, non-smoker at issue. It is also assumed that the last
surviving insured (also the youngest insured) is age 70 when he or she dies and
that there is no Outstanding Debt. The date of death is also assumed to be on a
monthly anniversary day.
CASH VALUE ACCUMULATION TEST
<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 Last Surviving Insured's Death....... $ 35,000 $ 60,000 $ 90,000
Death Benefit Percentage................................... 183.6% 183.6% 183.6%
Death Benefit under Option 1............................... $100,000 $110,160 $165,240
Death Benefit under Option 2............................... $135,000 $160,000 $190,000
</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 183.6% = $64,260).
Option 1, Policy 2 & 3: The death benefit is equal to the Fund Value
multiplied by the death benefit percentage since ($60,000 X 183.6% = $110,160
for Policy 2; $90,000 X 183.6% = $165,240 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 183.6% =
$64,260).
29
<PAGE> 35
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 183.6% = $110,160).
Option 2, Policy 3: The death benefit equals the Specified Amount plus the
Fund Value ($100,000 + $90,000 = $190,000) since it is greater than the Fund
Value multiplied by the death benefit percentage ($90,000 X 183.6% = $165,240).
GUIDELINE PREMIUM/CASH VALUE CORRIDOR TEST
<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 Last Surviving Insured's Death....... $ 35,000 $ 60,000 $ 90,000
Death Benefit Percentage................................... 115% 115% 115%
Death Benefit under Option 1............................... $100,000 $100,000 $103,500
Death Benefit under Option 2............................... $135,000 $160,000 $190,000
</TABLE>
Option 1, Policy 1 & 2: 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 115% = $40,250 for Policy
1; $60,000 X 115% = $69,000 for Policy 2).
Option 1, Policy 3: The death benefit is equal to the Fund Value multiplied
by the death benefit percentage since ($90,000 X 115% = $103,500 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 115% =
$40,250).
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 115% = $69,000).
Option 2, Policy 3: The death benefit equals the Specified Amount plus the
Fund Value ($100,000 + $90,000 = $190,000) since it is greater than the Fund
Value multiplied by the death benefit percentage ($90,000 X 115% = $103,500).
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.
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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.
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 "Monthly Deductions from Fund Value -- Cost of
Insurance," page 47. 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 older 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 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. A request for an increase
cannot be made after the policy anniversary on which the older insured attains
age 85.
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 45. 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.
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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.
A decrease will not be permitted if the Specified Amount would fall below
$100,000.
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. See "Federal Income Tax Considerations -- Definition of Life
Insurance," page 50.
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 45. 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 52. 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.
Four Year Term Insurance Rider
This benefit provides non-renewable, non-convertible term insurance. The
insurance is payable if the second death occurs within the first four policy
years. If the policy owner makes any changes to the Specified Amount, the amount
of this rider will be adjusted.
OPTION TO SPLIT POLICY
This benefit provides that the policy may be split into two other
individual life insurance policies within the 6 month period following business
dissolution (if the insureds are employees of one organization at the time the
policy is issued). Evidence of insurability at the time the option is exercised
will not be required if as a result of a tax law change, but will be required in
all other instances. Certain conditions, as described in the policy, must be met
before this option can be exercised. This benefit is guaranteed by the
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Guaranteed Death Benefit Rider. There is no charge for this benefit. This
benefit is not available in all states.
BENEFITS AT MATURITY
If one or both of the insureds is living on the maturity date, the Company
will pay to the policy owner, 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 60. 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 36.
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 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.
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- Expenses of a portfolio including 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 37.) 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 last surviving insured dies.
- Pay monthly deductions from the policy's Fund Value.
- Pay policy transaction charges.
- 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 MONY Variable
Account L -- Mortality and Expense Risk
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Charge," page 47. 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.
DETERMINING FUND VALUE
[DETERMINING FUND VALUE FLOW CHART]
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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 64. 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 43. No charges are currently imposed upon these
transfers. However, the 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 57.
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 last survivor flexible premium universal life
policy. See "The Guaranteed Interest Account," page 57. 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 Frasierized at the Insureds' gender and attained ages and classes 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 may not be split.
(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.
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(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 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 when 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 capitalized, 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
capitalized, 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
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of the death benefit upon the death of the last surviving 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, 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 43.
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 50.
FULL SURRENDER
You may fully surrender your policy at any time during the lifetime of
either or both insureds. 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 60. For information on the tax
effects of surrender of a policy, see "Federal Income Tax Considerations," page
50.
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 after the partial surrender.
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
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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 last surviving 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 31.
There is a fee for each partial surrender of $10.
For information on the tax treatment of partial surrenders, see "Federal
Income Tax Considerations," page 50.
GRACE PERIOD AND LAPSE
Your policy will remain in effect as long as:
(1) It has a Cash Value, 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, 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.
If the insufficiency occurs at any other time, your policy may be at risk
of lapse.
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
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date the notice was sent, to make the payment. During the first three policy
years, 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.
After the third policy anniversary, 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 sales charges.
(See "Charges and Deductions -- Deductions from Premiums," page 46). 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 in 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
last surviving 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 of both insureds that is 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
(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) The Fund Value will be reduced by the decrease, if any, in the
surrender charge during the period that the policy was not in effect.
(3) Any Outstanding Debt on the date of lapse will be reinstated.
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(4) Any net premium paid for reinstatement will also be reinstated.
(5) 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.
CHARGES AND DEDUCTIONS
The following chart summarizes the current charges and deductions under the
policy:
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS
- -----------------------------------------------------------------------------------------------
Sales Charge -- Varies based on policy First 10 policy years -- 6% of premiums
year. It is a % of premium paid paid up to target premium and 3% if premium
paid in excess of target premium.
Years 11 and later -- 3% of all premiums.
- -----------------------------------------------------------------------------------------------
Tax Charge State and local -- 0.8%
Federal -- 1.5%
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
- -----------------------------------------------------------------------------------------------
Mortality & Expense Risk Charge -- Maximum .35% of subaccount value (0.000959% daily)
Annual Rate
- -----------------------------------------------------------------------------------------------
</TABLE>
MONTHLY 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 $7.50
- ----------------------------------------------------------------------------------------------
Monthly per $1,000 Specified Amount Charge See Appendix B. This charge applies for the
Based on issue age of the younger insured, first 10 policy years (or for 10 years from
Specified Amount and smoking 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(1)
(at Company's Option)
- ----------------------------------------------------------------------------------------------
Surrender Charge See discussion of Surrender Charge on page
Grades from 100% to 0 over 11 years based for grading schedule.
on a schedule. Factors per $1,000 of
Specified Amount vary based on issue age,
gender, and underwriting class
- ----------------------------------------------------------------------------------------------
</TABLE>
(1) Currently no charge on any transfers.
41
<PAGE> 47
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.
Sales Charge -- This charge varies based on a target premium. The
target premium is actuarially determined based upon
the Specified Amount of the policy and the age,
gender, underwriting class and smoking status of
each of the insureds. The target premium is
established at issue, and will be adjusted if the
Specified Amount is increased or decreased. The
charge is a percent of each premium paid.
First 10 policy years -- 6% of premiums paid up to
target premium and 3% of premium paid in excess of
target premium in that year.
Years 11 and later -- 3% of all premiums.
You should refer to your policy to determine the amount of the target
premium.
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 amount 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. These taxes vary
from state to state and may vary from jurisdiction to jurisdiction within a
state. For policyholders resident in New York, the Company currently deducts an
amount equal to 0.8% of each premium to pay applicable premium taxes. Currently,
these taxes range from 0% to 4%. The 0.8% current 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.
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 .000959% of the amount in the
subaccount, which is equivalent to an annual rate
of .35% 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
42
<PAGE> 48
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.
MONTHLY 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. Where unisex cost of insurance
rates apply, the 1980 Commissioners Ordinary Smoker and Nonsmoker Mortality
Table D applies.) These rates are based on the age and underwriting class of
each insured. They are also based on the gender of the insured, but unisex rates
are used where appropriate under applicable law. 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 each insured. In addition, they also vary with
the policy duration. The cost of insurance rate generally increases with the age
of each 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 -- $7.50 per month
This charge reimburses us for expenses associated with administration and
maintenance of the policies. The charge is guaranteed never to exceed $7.50. We
do not expect to profit from this charge.
Monthly per $1,000
Specified Amount Charge -- This charge applies for the first 10 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 of
the younger insured, smoking status and Specified
Amount. 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.
43
<PAGE> 49
Surrender Charge -- The Company will assess a surrender charge against
Fund Value upon a 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 100% to zero over
11 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 number of full years since the Policy
was issued (or since the increase in Specified
Amount). The maximum level of surrender charge is
$53.31 per $1,000 of Specified Amount.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
POLICY YEAR PERCENT
- ----------------------------------------------------------------------------------------------
1 100%
- ----------------------------------------------------------------------------------------------
2 90
- ----------------------------------------------------------------------------------------------
3 80
- ----------------------------------------------------------------------------------------------
4 70
- ----------------------------------------------------------------------------------------------
5 60
- ----------------------------------------------------------------------------------------------
6 50
- ----------------------------------------------------------------------------------------------
7 40
- ----------------------------------------------------------------------------------------------
8 30
- ----------------------------------------------------------------------------------------------
9 20
- ----------------------------------------------------------------------------------------------
10 10
- ----------------------------------------------------------------------------------------------
11 and later 0
- ----------------------------------------------------------------------------------------------
</TABLE>
SURRENDER CHARGE
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.
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
11-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.
CORPORATE PURCHASERS
The policy is available for purchase by individuals, trusts, corporations
and other organizations. Corporate or other group or sponsored arrangements
purchasing one or more policies may receive a reduction in charges. The Company
may reduce the amount of the sales charge, surrender charge, or other charges
where the expenses associated with the policy or policies are reduced. Sales,
underwriting or other administrative expenses may be reduced for reasons such as
expected economies resulting from a corporate
44
<PAGE> 50
purchase or a group or sponsored arrangement, from the amount of the initial
premium payment or payments, or the amount of projected premium payments.
TRANSACTION AND OTHER CHARGES
- Partial Surrender Fee -- $10
- Transfer of Fund Value -- $25 (at option of the Company) currently $0
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.
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 54.
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 certain charges will not increase. This includes:
(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
45
<PAGE> 51
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.
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 (a) a policy
is considered to be life insurance under applicable law and (b) one of two
alternate tests are met. The two alternative tests are:
(1) "Cash Value Accumulation Test"
(2) "Guideline Premium/Cash Value Corridor Test"
When you apply for a policy you will irrevocably choose which of these two
tests will be applied to your policy.
If 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. If your policy is tested under the Cash Value Accumulation Test, a
table of factors will be shown in your policy.
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
46
<PAGE> 52
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 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. If, 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.
47
<PAGE> 53
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.
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 "Federal Income Tax
Considerations -- Conventional Life Insurance Policies," page 51.)
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.
Riders, Policy Changes, and Transfers
Certain benefits permit the splitting of the policy into two other
individual policies upon business dissolution. The splitting of a policy could
have adverse tax consequences. Consequences include, but are not limited to, the
recognition of taxable income in an amount up to any gain in the policy at the
time of the split.
In order for the Beneficiary to receive certain tax treatment discussed in
the previous sections above, the policy must initially qualify and continue to
qualify as life insurance under Sections 7702 and 817(h) of the Code. To qualify
the policy as life insurance for tax purposes the Company may:
- Make changes in the policy or Riders, or
- Make distributions from the policy to the extent considered necessary.
Any such change will uniformly apply to all policies that are affected. The
policy owner will be given advance notice of such changes.
48
<PAGE> 54
Special tax rules may apply to the transfer of ownership of a policy.
Consult a qualified tax adviser before any transfer of the policy.
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.
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 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
49
<PAGE> 55
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 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 own 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
50
<PAGE> 56
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 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 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.
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<PAGE> 57
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 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.
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 the
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 the
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
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<PAGE> 58
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.
We may also use non-standard performance in cases where we add new
subaccounts which purchase shares of underlying funds in existence prior to the
formation of such subaccounts. In such cases we will use the historical
performance of the underlying fund with the current expenses of the applicable
subaccount under the policy.
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.
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 of the last
surviving insured 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
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<PAGE> 59
death of the last surviving insured multiplied by a death benefit percentage.
See "Death Benefits under the Policy," page 28.
POLICY CHARGES
Deductions from premium, monthly deductions from the Fund Value, and
surrender 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.
- Transfers from the Guaranteed Interest Account may only be made during
the time 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 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 invested in the
subaccounts. See "Full Surrender," page 42 and "Partial Surrender", page 42.
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.
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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 either or both of the
insureds 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 last surviving 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 when the last surviving
insured dies 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.
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 the last surviving 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 last surviving 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.
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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.
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 per payment 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 either 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.
This provision may not be applicable in all states.
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 recorded 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 45.)
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ERRORS ON THE APPLICATION
If the age or gender of an 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 "Monthly Deductions from Fund Value -- Cost of
Insurance," page 43.
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 an 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.
This provision may not be applicable in all states.
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
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 (excluding the Loan Account). 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.
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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 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.
Frederick W. Kanner....................... Director since March 2000. Partner at Dewey Ballantine
LLP since 1979, and an Associate of said firm prior to
that time.
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. Current Officer-Directors of the Company are:
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES WITH DEPOSITOR
- ---- -----------------------------------
<S> <C>
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
<CAPTION>
NAME POSITION AND OFFICES WITH DEPOSITOR
- ---- -----------------------------------
<S> <C>
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.
Mr. Roth is Chairman of the Board and Chief Executive Officer (since August
1998) and Director (since September 1997) of The MONY Group, Inc. Chairman of
the Board and Chief Executive Officer (since July 1991) and Director (since June
1991) of MONY Life Insurance Company of America. Director of MONY subsidiaries:
1740 Advisers, Inc. (since December 1992), MONY Benefits Management Corp. (since
March 1999). Serves on the board of directors of the American Council of Life
Insurance, The Life Insurance Council of New York, Enterprise Foundation (a
charitable foundation which develops housing not affiliated with the Enterprise
Group of Funds), Metropolitan Development Association of Syracuse and Central
New York, Enterprise Group of Funds, Inc., Enterprise Accumulation Trust, Pitney
Bowes, Inc., Lincoln Center for the Performing Arts Leadership Committee, Life
Office Management Association, New York City Partnership and Chamber of
Commerce, and Committee for Economic Development. Also serves as Chairman of the
Board of Insurance Marketplace Standards Association.
Mr. Foti is President and Chief Operating Officer (since August 1998) and
Director (since September 1997) of The MONY Group, Inc. President and Chief
Operating Officer of MONY Life Insurance Company of America (since February
1994) and Director (since September 1989). Director of MONY subsidiaries: MONY
Brokerage, Inc. (since January 1990), MONY International Holdings, Inc. (since
October 1994), MONY Life Insurance Company of the Americas, Ltd. (since December
1994). Serves on the board of directors of Enterprise Group of Funds, Inc.,
Enterprise Accumulation Trust and The American College of which he is Chairman.
Mr. Levine is Executive Vice President and Chief Investment Officer (since
August 1998) and Director (since September 1997) of The MONY Group Inc. Chairman
of the Board (since December 1991) and President (since June 1992) of MONY
Series Fund, Inc. Director of MONY subsidiaries: MONY Life Insurance Company of
America (since July 1991), 1740 Advisers, Inc. (since December 1989), MONY
Benefits Management Corp. (since October 1991), MONY Realty Partners, Inc.
(since October 1991) and 1740 Ventures, Inc. (since October 1991).
Mr. Daddario is Executive Vice President and Chief Financial Officer (since
August 1998) of The MONY Group, Inc. Vice President and Controller of MONY Life
Insurance Company of America (since
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<PAGE> 65
September 1989). Director of MONY subsidiaries: MONY International Holdings,
Inc. (since 1998), MONY Brokerage, Inc. (since June 1997) and MONY Life
Insurance Company of the Americas, Ltd. (since December 1997).
Mr. Eisenberg is Vice President and Actuary (since November 1992) and
Director of MONY Life Insurance Company of America. Director of MONY subsidiary:
MONY Benefits Management Corp. (since March 1999).
Mr. Smith is Vice President and Secretary (since September 1999) of The
MONY Group Inc. Vice President -- Government Relations and Industry Affairs.
Mr. Connors is Director of MONY Life Insurance Company of America (since
June 1994). Director of MONY subsidiary: MONY Brokerage, Inc. (since May 1994).
Mr. Hall is Director of MONY Life Insurance Company of America (since June
1991). Director of MONY subsidiary: MONY Brokerage, Inc. (since October 1991).
Mr. Weigel is Vice President-Treasurer of The MONY Group Inc. (since August
1998). Treasurer of MONY Life Insurance Company of America (since July 1991).
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.
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.
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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 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 Arizona law, and
(4) The validity of the forms of the policies under Arizona 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 MONY Variable Account L and the
Company for the periods ended December 31, 1999 included in this Prospectus and
in the Registration Statement have been audited by PricewaterhouseCoopers LLP,
independent accountants, as indicated in their reports 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 MONY Variable Account L and the Company
are set forth herein.
The financial statements of MONY Variable Account L and 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.
61
<PAGE> 67
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 68
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:
Consolidated balance sheets as of December 31, 1999 and
1998................................................... F-3
Consolidated statements of income and comprehensive income
for the years ended December 31, 1999, 1998 and 1997... F-4
Consolidated statements of changes in shareholder's equity
for the years ended December 31, 1999, 1998 and 1997... F-5
Consolidated statements of cash flows for the years ended
December 31, 1999, 1998 and 1997....................... F-6
Notes to consolidated financial statements................ F-8
</TABLE>
F-1
<PAGE> 69
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
The MONY Life Insurance Company
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income and comprehensive income, changes in
shareholders' equity and cash flows present fairly, in all material respects,
the financial position of The MONY Life Insurance Company and Subsidiaries (the
"Company"), formerly known as The Mutual Life Insurance Company of New York and
subsidiaries, at December 31, 1999 and 1998, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1999, in conformity with accounting principles generally accepted in the
United States. 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 auditing standards generally accepted in the
United States, 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.
PricewaterhouseCoopers LLP
New York, New York
February 10, 2000, except for Note 18(b)
as to which the date is March 27, 2000
and Note 23(c), as to which the date
is March 8, 2000.
F-2
<PAGE> 70
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------- ---------
($ IN MILLIONS)
<S> <C> <C>
ASSETS
INVESTMENTS:
Fixed maturity securities available-for-sale, at fair
value..................................................... $ 3,066.7 $ 3,132.0
Equity securities available-for-sale, at fair value......... 519.8 457.2
Mortgage loans on real estate (Note 13)..................... 1,270.4 988.3
Policy loans................................................ 69.1 61.1
Real estate to be disposed of (Note 13)..................... 300.9 312.9
Real estate held for investment (Note 13)................... 46.2 321.3
Other invested assets....................................... 37.9 40.7
--------- ---------
5,311.0 5,313.5
========= =========
Cash and cash equivalents................................... 232.6 270.2
Accrued investment income................................... 74.6 68.9
Amounts due from reinsurers................................. 488.0 478.1
Deferred policy acquisition costs........................... 558.3 439.7
Other assets................................................ 365.4 325.6
Assets transferred in Group Pension Transaction (Note 10)... 5,109.8 5,751.8
Separate account assets..................................... 6,398.3 6,090.3
Closed Block assets (Note 20)............................... 6,182.1 6,161.2
--------- ---------
Total assets.............................................. $24,720.1 $24,899.3
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits...................................... $ 954.3 $ 960.0
Policyholders' account balances............................. 1,942.9 1,991.7
Other policyholders' liabilities............................ 120.4 104.8
Amounts due to reinsurers................................... 83.8 95.6
Accounts payable and other liabilities...................... 581.1 518.3
Short term debt (Note 16)................................... 53.4 --
Long term debt (Note 16).................................... 245.4 375.4
Current federal income taxes payable........................ 147.4 79.1
Liabilities transferred in Group Pension Transaction (Note
10)....................................................... 5,099.1 5,678.5
Separate account liabilities................................ 6,396.2 6,078.1
Closed Block liabilities (Note 20).......................... 7,303.3 7,290.7
--------- ---------
Total liabilities......................................... $22,927.3 $23,172.2
========= =========
Commitments and contingencies (Notes 9 and 18)
Common stock, $1.00 par value; 2.5 million shares
authorized and outstanding................................ $ 2.5 $ 2.0
Capital in excess of par.................................... 1,563.6 1,564.1
Retained earnings........................................... 256.1 8.6
Accumulated other comprehensive income...................... (29.4) 152.4
--------- ---------
Total shareholders' equity................................ 1,792.8 1,727.1
--------- ---------
Total liabilities and shareholders' equity................ $24,720.1 $24,899.3
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 71
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1998
PRO FORMA*
1999 1998 1997 (UNAUDITED)
-------- -------- -------- -----------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
REVENUES:
Premiums......................................... $ 96.3 $ 621.7 $ 838.6 $ 77.9
Universal life and investment-type product policy
fees........................................... 196.3 151.6 127.3 151.6
Net Investment income (Note 11).................. 524.9 688.3 733.0 361.1
Net realized gains on investments (Note 11)...... 122.2 168.7 72.1 160.9
Group Pension Profits (Note 10).................. 63.0 56.8 60.0 56.8
Other income..................................... 195.8 162.6 145.4 161.3
Contribution from the Closed Block............... 44.8 5.7 -- 52.2
-------- -------- -------- --------
1,243.3 1,855.4 1,976.4 1,021.8
-------- -------- -------- --------
BENEFITS AND EXPENSES:
Benefits to policyholders........................ 147.0 679.8 840.1 124.4
Interest credited to policyholders' account
balances....................................... 106.6 112.7 125.9 105.0
Amortization of deferred policy acquisition
costs.......................................... 70.3 122.0 181.2 52.2
Dividends to policyholders....................... 1.9 195.8 224.3 3.3
Other operating costs and expenses............... 536.6 451.7 417.2 443.5
-------- -------- -------- --------
862.4 1,562.0 1,788.7 728.4
-------- -------- -------- --------
Income before income taxes & extraordinary
item........................................... 380.9 293.4 187.7 293.4
Income tax expense............................... 131.4 102.7 57.3 102.7
-------- -------- -------- --------
Income before extraordinary items................ 249.5 190.7 130.4 190.7
-------- -------- -------- --------
Extraordinary items (Note 4)..................... 2.0 27.2 13.3 --
-------- -------- -------- --------
Net income....................................... 247.5 163.5 117.1 190.7
-------- -------- -------- --------
Other comprehensive income, net (Note 11)........ (181.8) 34.3 33.0
-------- -------- --------
Comprehensive income............................. $ 65.7 $ 197.8 $ 150.1
======== ======== ========
</TABLE>
- ---------------
* The pro forma information gives effect to the transactions referred to in
Notes 1 and 22.
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 72
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<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, 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 11)................... 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)
Capital Contribution..................... 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 11)................... 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
Comprehensive income/(loss)
Net income............................. 247.5 247.5
Other comprehensive income: unrealized
gains on investments, net of
unrealized losses, reclassification
adjustments, and taxes (Note 11).... (181.8) (181.8)
Change in number of authorized and
outstanding shares..................... 0.5 (0.5)
--------
Comprehensive income/(loss).............. 65.7
---- -------- --------- ------- --------
Balance, December 31, 1999............... $2.5 $1,563.6 $ 256.1 $ (29.4) $1,792.8
==== ======== ========= ======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE> 73
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES (SEE NOTE 4):
Net income................................................ $ 247.5 $ 163.5 $ 117.1
Adjustments to reconcile net income to net cash provided
by operating activities:
Interest credited to policyholders' account balances.... 105.0 110.6 122.3
Universal life and investment-type product policy fee
income............................................... (143.5) (123.6) (112.9)
Capitalization of deferred policy acquisition costs..... (148.8) (124.5) (141.0)
Amortization of deferred policy acquisition costs....... 70.3 122.0 181.2
Provision for depreciation and amortization............. 31.5 41.4 55.0
Provision for deferred federal income taxes............. 57.4 11.4 (50.2)
Net realized gains on investments....................... (122.2) (168.7) (72.1)
Non-cash distributions from investments................. (172.8) (35.1) (31.1)
Change in other assets and accounts payable and other
Liabilities.......................................... (26.4) (32.7) (177.5)
Change in future policy benefits........................ (3.7) 136.2 206.9
Change in other policyholders' liabilities.............. 15.6 32.9 (17.4)
Change in current federal income taxes payable.......... 103.5 (14.9) (11.2)
Initial cash transferred to the Closed Block............ -- (46.9) --
Contribution from the Closed Block...................... (44.8) (5.7) --
--------- --------- ---------
Net cash (used in)/provided by operating activities....... (31.4) 65.9 69.1
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities or repayments of:
Fixed maturities........................................ 689.4 887.3 952.0
Equity securities....................................... 328.1 177.4 246.7
Mortgage loans on real estate........................... 132.9 424.4 334.4
Real estate............................................. 350.7 578.3 430.8
Other invested assets................................... 18.7 46.0 5.0
Acquisitions of investments:
Fixed maturities........................................ (830.0) (1,479.7) (1,336.2)
Equity securities....................................... (152.0) (230.5) (211.5)
Mortgage loans on real estate........................... (412.0) (422.4) (183.1)
Real estate............................................. (44.5) (39.5) (52.7)
Other invested assets................................... (20.6) (2.1) (1.7)
Policy loans, net....................................... (7.8) (17.8) (15.9)
Other, net.............................................. 60.3 8.8 10.1
Property & equipment, net............................... (22.5) (30.9) (35.8)
Acquisition of subsidiaries, net of cash acquired....... -- (46.0) --
--------- --------- ---------
Net cash provided by/(used in) investing activities....... $ 90.7 $ (146.7) $ 142.1
========= ========= =========
</TABLE>
F-6
<PAGE> 74
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt........................................ $ -- $ -- $ 115.0
Repayments of debt...................................... (84.8) (61.3) (126.0)
Receipts from annuity and universal life policies
credited to policyholders' account balances.......... 1,851.5 1,254.0 1,226.4
Return of policyholders' account balances on annuity
policies and universal life policies................. (1,863.6) (1,377.0) (1,435.2)
Other................................................... 6.6
Capital Contribution (Note 4)............................. 0.0 221.9 0.0
--------- --------- ---------
Net cash (used in)/provided by financing activities....... (96.9) 37.6 (213.2)
--------- --------- ---------
Net (decrease)/increase in cash and cash equivalents...... (37.6) (43.2) (2.0)
Cash and cash equivalents, beginning of year.............. 270.2 313.4 315.4
--------- --------- ---------
Cash and cash equivalents, end of year.................... $ 232.6 $ 270.2 $ 313.4
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
Income taxes.............................................. $ 20.1 $ 97.4 $ 114.6
Interest.................................................. $ 20.3 $ 20.3 $ 20.8
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE> 75
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"). 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". During 1999, the Company increased the number
of its common shares authorized and outstanding from 2.0 million to 2.5 million
in order to comply with regulatory requirements.
MONY Life and its subsidiaries (hereafter collectively referred to as 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 (see Note
5). The Company distributes its products primarily through its career agency
sales force and various complementary distribution channels. These include sales
of mutual funds sold by Enterprise Capital Management through third-party broker
dealers, sales of protection products through brokerage general agencies, sales
of corporate-owned life insurance ("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,
the holding Company parent 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 16), and (ii) the Investors 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).
F-8
<PAGE> 76
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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
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.
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 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 10. Since the Closed
Block has been 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-9
<PAGE> 77
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 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 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 generally accepted accounting principles ("GAAP"). 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. 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. 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. Certain reclassifications have been made in the amounts presented
for prior periods to conform those periods to the current presentation.
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 $17.4 million
and $33.5 million at December 31, 1999 and 1998, respectively.
F-10
<PAGE> 78
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Transaction
Net proceeds from the Offerings totalled $282.5 million. Approximately
$60.6 million of the net proceeds were retained by the MONY Group and the
balance of approximately $221.9 million was contributed to MONY Life.
Of the net proceeds contributed by the MONY Group to MONY Life,
approximately $168.2 million is for use by MONY Life in its general operations,
approximately $13.2 million was used to fund policy credits required to be
credited to Eligible Policyholders pursuant to the Plan, and $40.5 million
represents a reimbursement for the estimated after-tax cost of expenses incurred
by MONY Life to effect the Demutualization, as required by the New York
Insurance Law.
Of the net proceeds retained by the MONY Group, approximately $2.5 million
was used to pay cash to Eligible Policyholders who received cash as described in
the Plan (other than pursuant to an expression of a preference to receive cash),
$10.0 million is for working capital for the MONY Group, $30.0 million is to be
used to pay dividends on the MONY Group's common stock and $18.1 million was
used by the MONY Group to pay cash to eligible policyholders pursuant to an
expression of a preference to receive cash in accordance with the Plan.
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 interests in MONY. In conjunction
with the Offerings, approximately 12.9 million shares of the common stock of
MONY Group were issued at an initial public offering of $23.50 per share. The
Demutualization was accounted for as a reorganization. Accordingly, the
Company's retained earnings at the Plan Effective Date (net of the
aforementioned cash payments and policy credits which were charged directly to
retained earnings) were reclassified to "Common stock" and "Capital in excess of
par".
In addition, the capital of the MONY Group includes $10.0 million relating
to the Warrants (see Note 2), which as a subsidiary of MONY prior to the Plan
Effective Date, was recorded in MONY'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 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.
F-11
<PAGE> 79
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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, are
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 consist 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.
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.
F-12
<PAGE> 80
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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, 1999, the
expected investment yield was 7.31%, for the year 2000 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 discount rate. The discount rate for all products is 8%. 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
5.8%, 5.7% and 5.8% for the years ended December 31, 1999, 1998, and 1997,
respectively. The weighted average interest crediting rate for investment-type
products was approximately 5.1%, 5.2% and 5.4% for the years ended December 31,
1999, 1998, and 1997, 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 and morbidity for the year.
Participating Business
At December 31, 1999 and 1998, participating business, substantially all of
which is in the Closed Block, represented approximately 63.5% and 72.6% of the
Company's life insurance in force, and 81.2% and 84.2% of the number of life
insurance policies in force, respectively. For each of the years ended December
31, 1999 and 1998, participating business, represented approximately 95.9% and
99.7%, respectively, of life insurance premiums.
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.
F-13
<PAGE> 81
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 $38.3 million and $71.0 million at December 31, 1999
and 1998, respectively. Related depreciation and amortization expense was $16.6
million, $11.4 million, and $8.8 million for the years ended December 31, 1999,
1998, and 1997, 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, Statement of Financial Accounting Standards ("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
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
F-14
<PAGE> 82
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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, 1999, 1998, and 1997, respectively, real
estate of $27.0 million, $5.0 million, and $14.4 million was acquired in
satisfaction of debt (including the Closed Block of $22.0 million). At December
31, 1999 and 1998, the Company owned real estate acquired in satisfaction of
debt of $121.0 million and $143.2 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 $2.0 million and $27.2 million
for the year ended December 31, 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 policyholders. 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. Under the Program, shareholders who own fewer than 100 shares were
able to sell their shares or purchase additional shares to round up to 100
shares without incurring commissions.
New Accounting Pronouncements
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, as amended by SFAS 137, is
effective for all fiscal quarters of the fiscal years beginning after June 15,
2000. SFAS 137 delayed the effective date of SFAS 133 by one year. Adoption of
SFAS 133 is not expected to have a material effect on the Company's financial
condition or results of operations.
5. 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.
F-15
<PAGE> 83
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 insurance products, including: whole life, term life, universal
life, variable universal life, corporate-owned life insurance, last survivor
variable universal life, last survivor universal life, group universal life and
special-risk products. 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 10), (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 flexible premium
variable annuities, single premium deferred annuities, immediate 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 10).
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, 1999, 1998 and 1997, 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 non-recurring 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 19). 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, and (ii) a one-time restructuring charge in 1999 of $59.7 million pre-tax
relating to the Company's early retirement program (see Note 22).
F-16
<PAGE> 84
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEGMENT SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
PREMIUMS:
Protection Products....................................... $ 82.0 $ 602.2 $ 817.0
Accumulation Products..................................... 0.9 2.6 5.0
Other Products............................................ 13.4 16.9 16.6
--------- --------- ---------
$ 96.3 $ 621.7 $ 838.6
--------- --------- ---------
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES:
Protection Products....................................... $ 122.3 $ 86.2 $ 74.9
Accumulation Products..................................... 73.3 64.1 50.9
Other Products............................................ 0.7 1.3 1.5
--------- --------- ---------
$ 196.3 $ 151.6 $ 127.3
--------- --------- ---------
NET INVESTMENT INCOME AND NET REALIZED GAINS (LOSSES) ON
INVESTMENTS:
Protection Products....................................... $ 445.1 $ 655.5 $ 611.9
Accumulation Products..................................... 132.4 136.3 131.4
Other Products............................................ 67.3 63.0 59.9
Unallocated amounts....................................... 2.3 2.2 1.9
--------- --------- ---------
$ 647.1 $ 857.0 $ 805.1
--------- --------- ---------
OTHER INCOME:
Protection Products(1)(7)................................. $ 123.0 $ 85.5 $ 94.9
Accumulation Products..................................... 95.1 72.8 52.1
Other Products............................................ 80.7 61.1 53.1
Unallocated amounts....................................... 4.8 5.7 5.3
--------- --------- ---------
$ 303.6 $ 225.1 $ 205.4
--------- --------- ---------
AMORTIZATION OF DEFERRED POLICY ACQUISITION COSTS:
Protection Products....................................... $ 39.6 $ 92.4 $ 146.8
Accumulation Products..................................... 30.7 29.6 34.4
--------- --------- ---------
$ 70.3 $ 122.0 $ 181.2
--------- --------- ---------
BENEFITS TO POLICYHOLDERS:(2)
Protection Products....................................... $ 141.7 $ 663.4 $ 821.1
Accumulation Products..................................... 73.7 79.6 92.5
Other Products............................................ 33.7 41.6 45.2
Unallocated amounts....................................... 4.5 7.9 7.2
--------- --------- ---------
$ 253.6 $ 792.5 $ 966.0
--------- --------- ---------
OTHER OPERATING COSTS AND EXPENSES:
Protection Products....................................... $ 277.4 $ 287.1 $ 281.0
Accumulation Products..................................... 105.7 84.4 66.3
Other Products............................................ 93.1 80.2 66.2
Unallocated amounts....................................... 60.4 -- 3.7
--------- --------- ---------
$ 536.6 $ 451.7 $ 417.2
--------- --------- ---------
</TABLE>
F-17
<PAGE> 85
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ IN MILLIONS)
<S> <C> <C> <C>
INCOME BEFORE INCOME TAXES:
Protection Products....................................... $ 315.0 $ 193.7 $ 129.0
Accumulation Products..................................... 89.6 80.5 44.1
Other Products............................................ 34.1 19.2 18.3
Unallocated amounts....................................... (57.8) -- (3.7)
--------- --------- ---------
$ 380.9 $ 293.4 $ 187.7
--------- --------- ---------
ASSETS:
Protection Products(3)(8)................................. $16,181.4 $16,580.9 $15,776.5
Accumulation Products..................................... 6,175.0 6,171.3 5,757.9
Other Products............................................ 1,187.6 1,256.2 1,234.2
Unallocated amounts....................................... 1,176.1 890.9 842.7
--------- --------- ---------
$24,720.1 $24,899.3 $23,611.3
--------- --------- ---------
DEFERRED POLICY ACQUISITION COSTS:
Protection Products(9).................................... $ 1,094.9 $ 857.6 $ 874.1
Accumulation Products..................................... 153.3 136.7 133.0
--------- --------- ---------
$ 1,248.2 $ 994.3 $ 1,007.1
--------- --------- ---------
POLICYHOLDERS' LIABILITIES:
Protection Products(4)(10)................................ $10,231.7 $10,267.0 $10,105.7
Accumulation Products..................................... 1,236.3 1,318.6 1,416.1
Other Products............................................ 418.9 455.6 513.4
Unallocated amounts....................................... 17.4 17.4 16.5
--------- --------- ---------
$11,904.3 $12,058.6 $12,051.7
--------- --------- ---------
SEPARATE ACCOUNT LIABILITIES:(5)
Protection Products(6).................................... $ 3,843.5 $ 4,056.8 $ 3,720.1
Accumulation Products..................................... 4,548.9 4,452.6 4,002.6
Other Products............................................ 604.2 621.9 547.7
Unallocated amounts....................................... 832.3 776.4 736.0
--------- --------- ---------
$ 9,828.9 $ 9,907.7 $ 9,006.4
========= ========= =========
</TABLE>
- ---------------
(1) Includes Group Pension Profits of $63.0 million, $56.8 million and $60.0
million for the years ended December 31, 1999, 1998 and 1997, respectively.
(See Note 10).
(2) Includes interest credited to policyholders' account balances.
(3) Includes assets transferred in the Group Pension Transaction of $5,109.8
million, $5,751.8 million and $5,714.9 million as of December 31, 1999,
1998 and 1997, respectively.
(4) Includes policyholder liabilities transferred in the Group Pension
Transaction of $1,645.7 million, $1,824.9 million and $1,991.0 million as
of December 31, 1999, 1998 and 1997 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 $3,432.7 million, $3,829.6 million and $3,614.0 million as
of December 31, 1999, 1998 and 1997, respectively.
F-18
<PAGE> 86
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(7) Includes $44.8 million and $5.7 million relating to the Contribution from
the Closed Block for the year ended December 31, 1999 and for period from
November 16, 1998 through December 31, 1998 and the year ended December 31,
1999, respectively (see Note 3 and Note 20).
(8) Includes Closed Block assets of $6,182.1 million and $6,161.2 million as of
December 31, 1999 and 1998, respectively (see Note 3 and Note 20).
(9) Includes deferred policy acquisition costs allocated to the Closed Block of
$689.9 million and $554.6 million as of December 31, 1999 and 1998,
respectively (see Note 3 and Note 20).
(10) Includes Closed Block policyholders' liabilities of $7,241.0 million and
$7,177.1 million as of December 31, 1999 and 1998, respectively (see Note 3
and Note 20).
Substantially all of the Company's revenues are derived in the United
States. Revenue derived from outside the United States is not material and
revenue derived from any single customer does not exceed 10 percent of total
consolidated revenues.
Following is a summary of revenues by product for the years ended December
31, 1999, 1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
PREMIUMS:
Individual life(1)....................................... $ 81.9 $602.5 $742.4
Disability income insurance.............................. 0.6 0.2 74.6
Group insurance.......................................... 13.4 16.9 16.6
Other.................................................... 0.4 2.1 5.0
------ ------ ------
Total.................................................. $ 96.3 $621.7 $838.6
====== ====== ======
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY FEES:
Universal life........................................... $ 73.2 $ 55.4 $ 48.3
Variable universal life.................................. 37.6 20.4 17.8
Group universal life..................................... 11.5 10.4 8.7
Individual variable annuities............................ 72.8 63.4 50.0
Individual fixed annuities............................... 1.2 2.0 2.5
------ ------ ------
Total.................................................. $196.3 $151.6 $127.3
====== ====== ======
</TABLE>
- ---------------
(1) Excludes revenues from individual life in the Closed Block of $620.8 million
and $100.1 million, for the year ended December 31, 1999 and for the period
from November 16, 1998 through December 31, 1998.
F-19
<PAGE> 87
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. DEFERRED POLICY ACQUISITION COSTS:
Policy acquisition costs deferred and amortized in 1999, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ -------- --------
($ IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year............................ $439.7 $1,007.1 $1,095.2
Balance transferred to the Closed Block at November
16, 1998............................................ -- (562.3) --
------ -------- --------
439.7 444.8 1,095.2
------ -------- --------
Cost deferred during the year......................... 148.7 124.7 141.0
Amortized to expense during the year.................. (70.3) (122.0) (181.2)
Effect on DAC from unrealized gains (losses) (see Note
4).................................................. 40.2 (7.8) (47.9)
------ -------- --------
Balance, end of the year.............................. $558.3 $ 439.7 $1,007.1
====== ======== ========
</TABLE>
7. PENSION PLANS AND OTHER POSTRETIREMENT 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. Effective June 15, 1999,
prospective defined contribution accruals in the defined benefit plan ceased and
were redirected to the Investment Plan Supplement for Employees. The Company did
not make any contribution in the current year or prior year under Section 404 of
the Internal Revenue Code ("IRC") because the plan was fully funded under
Section 412 of the IRC.
During 1999, the Company amended its Qualified Pension plan which reduced
certain benefit liabilities payable thereunder. The amendment resulted in a
decrease of $27.0 million in the plan's projected benefit obligation.
In July 1999, the Company offered special benefits to its employees who
elected by August 15, 1999, 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
$30.6 million, will be paid from the Plan's assets. All the benefits paid
relating to the Company's non-qualified plan, which aggregated $19.4 million,
will be paid directly from the Company's assets. As a result of the
aforementioned early retirement offer, the Company recorded a charge of $59.7
million in 1999 which included the aforementioned expenses in addition to
severence and other related expenses 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, 1999 and 1998, $495.7 million and $457.3
million were invested in the MONY Pooled Accounts. Benefits of $40.4 million,
$26.3 million and $24.2 million were paid by this plan for the years ended
December 31, 1999, 1998, and 1997, respectively.
F-20
<PAGE> 88
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company also sponsors a non-qualified employee excess pension plan,
which provides both defined benefits and defined contribution accruals in excess
of Internal Revenue Service limits to certain employees. The benefits are based
on years of service and the employees final average annual compensation. Pension
benefits are paid from Company's general accounts.
Postretirement Benefits --
The Company provides certain health care and life insurance benefits for
retired employees and field underwriters. The Company amortizes its unamortized
postretirement transition obligation over a period of twenty years.
Assumed health care cost trend rates typically have a significant effect on
the amounts reported for health care plans. However, under the Company's
postretirement healthcare plan, there is a per capita limit on the Company's
healthcare costs, as a result, a one-percentage point change in the assumed
healthcare cost trend rates would have an immaterial affect on amounts reported.
The following presents the change in the benefit obligation, change in plan
assets and other information with respect to the Company's qualified and
non-qualified defined benefit pension plans and other benefits which represents
the Company's postretirement benefit obligation:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------- -----------------
1999 1998 1999 1998
------ ------ ------ -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
CHANGE IN BENEFIT OBLIGATION:
Benefit obligation at beginning of year........ $398.3 $390.1 $100.0 $ 101.1
Service cost................................... 11.7 14.4 2.0 1.3
Interest cost.................................. 27.3 26.3 7.2 6.4
Curtailment gain............................... (3.8) -- -- --
Terminated benefits............................ 50.0 -- -- --
Plan amendment................................. (27.0) -- -- --
Actuarial (gain)/loss.......................... (38.8) 2.0 (4.0) (3.0)
Benefits paid.................................. (44.4) (34.5) (7.5) (5.8)
------ ------ ------ -------
Benefit obligation at end of year.............. 373.3 398.3 97.7 100.0
------ ------ ------ -------
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of
year......................................... $459.8 $432.5 $ -- $ --
Actual return on plan assets................... 77.4 56.7 -- --
Employer contribution.......................... 6.7 5.1 7.5 5.8
Benefits and expenses paid..................... (45.9) (34.5) (7.5) (5.8)
------ ------ ------ -------
Fair value of plan assets at end of year....... 498.0 459.8 -- --
------ ------ ------ -------
Funded status.................................. 124.7 61.5 (97.7) (100.0)
Unrecognized actuarial loss/(gain)............. (57.2) 16.4 7.4 11.1
Unamortized transition obligation.............. (13.0) (19.8) 39.4 42.7
Unrecognized prior service cost................ (15.6) 9.7 (1.0) --
------ ------ ------ -------
Net amount recognized.......................... $ 38.9 $ 67.8 $(51.9) $ (46.2)
====== ====== ====== =======
AMOUNTS RECOGNIZED IN THE STATEMENT OF
FINANCIAL POSITION CONSIST OF:
Prepaid benefit cost........................... $ 93.8 $103.0 $ -- $ --
Accrued benefit liability...................... (55.0) (39.5) (51.9) (46.2)
</TABLE>
F-21
<PAGE> 89
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------- -----------------
1999 1998 1999 1998
------ ------ ------ -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
Intangible asset............................... 0.1 1.4 -- --
Accumulated other comprehensive income......... -- 2.9 -- --
------ ------ ------ -------
Net amount recognized.......................... $ 38.9 $ 67.8 $(51.9) $ (46.2)
====== ====== ====== =======
</TABLE>
The Company's qualified plan had assets of $498.0 million and $459.8
million at December 31, 1999 and 1998, respectively. The projected benefit
obligation and accumulated benefit obligation for the qualified plan were $311.0
million and $285.4 million at December 31, 1999 and $350.8 million and $311.5
million at December 31, 1998, respectively.
The projected benefit obligation and accumulated benefit obligation for the
non-qualified defined benefit pension plan, which is unfunded, were $62.3
million and $55.0 million at December 31, 1999 and $47.5 million and $39.5
million at December 31, 1998, respectively.
<TABLE>
<CAPTION>
PENSION
BENEFITS OTHER BENEFITS
------------ --------------
1999 1998 1999 1998
---- ---- ----- -----
<S> <C> <C> <C> <C>
WEIGHTED-AVERAGE ASSUMPTIONS AS OF DECEMBER 31:
Discount rate........................................... 8.0% 6.75% 8.0% 6.75%
Expected return on plan assets.......................... 10.0% 10.0% -- --
Rate of compensation increase........................... 5.0% 5.0% 5.0% 5.0%
</TABLE>
For measurements purposes, a 11% percent annual rate of increase in the per
capita cost of covered health care benefits was assumed for 1999. The rate was
assumed to decrease gradually to 6% percent for 2010 and remain at that level
thereafter.
Components of net periodic benefit cost for the pension and other
post-retirement plans are as follows:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
------------------------ ---------------------
1999 1998 1997 1999 1998 1997
------ ------ ------ ----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
COMPONENTS OF NET PERIODIC BENEFIT
COST
Service cost......................... $ 11.7 $ 14.4 $ 12.9 $ 2.0 $ 1.3 $ 1.0
Interest cost........................ 27.3 26.3 27.5 7.2 6.4 6.7
Expected return on plan assets....... (44.2) (41.8) (38.0) -- -- --
Amortization of prior service cost... (0.8) 1.0 1.0 (0.1) -- --
Curtailment gain..................... (3.8) -- -- -- -- --
Special Termination Benefits......... 50.0 -- -- -- -- --
Recognized net actuarial loss........ -- -- 0.1 1.1 0.1 --
Amortization of Transition Items..... (7.5) (7.5) (7.5) 3.1 3.1 3.1
------ ------ ------ ----- ----- -----
Net periodic benefit cost............ $ 32.7 $ (7.6) $ (4.0) $13.3 $10.9 $10.8
====== ====== ====== ===== ===== =====
</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
contribution of up to 10% of earnings are allowed. At December 31, 1999 and
1998, the fair value of plan assets was $250.3 million and $222.2 million,
respectively. For the years ended December 31, 1999, 1998, and 1997, the Company
contributed $3.1 million, $3.2 million and $3.3 million to the plan,
respectively, which amounts are reflected in Other Operating Costs and Expenses.
F-22
<PAGE> 90
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company has a non-qualified defined contribution plan, which is
unfunded. The non-qualified defined contribution plan projected benefit
obligation which equaled the accumulated benefit obligation was $62.2 million
and $48.4 million as of December 31, 1999 and 1998, respectively. The
non-qualified defined contribution plan's net periodic expense was $9.3 million,
$6.6 million and $9.4 million for the years ended December 31, 1999, 1998 and
1997, respectively.
The Company also has incentive savings plans in which substantially all
employees and career field underwriters are eligible to participate. The Company
matches field underwriter contributions up to 2% of eligible compensation and
may also make an additional profit sharing contribution for non-officer
employees. As with the Employee Excess Plan, the Company also sponsors
non-qualified excess defined contribution plans for both the field underwriter
retirement plan and the incentive savings plan for field underwriters.
8. FEDERAL INCOME TAXES:
The Holding Company files a consolidated federal income tax return with its
life and non-life affiliates, except Sagamore Financial Corporation and its
subsidiaries.
Federal income taxes have been calculated in accordance with the provisions
of the Internal Revenue Code of 1986, as amended. A summary of the Federal
income tax expense (benefit) is presented below:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Federal income tax (benefit) expense:
Current................................................ $ 73.9 $ 84.6 $104.1
Deferred............................................... 57.5 18.1 (46.8)
------ ------ ------
Total............................................... $131.4 $102.7 $ 57.3
====== ====== ======
</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>
1999 1998 1997
------ ------ -----
($ IN MILLIONS)
<S> <C> <C> <C>
Tax at statutory rate..................................... $133.3 $102.7 $65.7
Differential earnings amount.............................. -- -- (5.8)
Dividends received deduction.............................. (1.7) (1.4) (0.5)
Other..................................................... (0.2) 1.4 (2.1)
------ ------ -----
Provision for income taxes................................ $131.4 $102.7 $57.3
====== ====== =====
</TABLE>
The Company's federal income tax returns for years through 1993 have been
examined by the Internal Revenue Service ("IRS"). No material adjustments were
proposed by the IRS as a result of these examinations. In the opinion of
management, adequate provision has been made for any additional taxes which may
become due with respect to open years.
F-23
<PAGE> 91
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of deferred tax liabilities and assets at December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ IN MILLIONS)
<S> <C> <C>
Deferred policy acquisition costs........................... $145.0 $127.9
Fixed maturities and equity securities...................... 34.5 68.2
Other, net(1)............................................... 56.4 71.3
Nonlife subsidiaries........................................ 17.2 8.3
------ ------
Total deferred tax liabilities.............................. 253.1 275.7
------ ------
Policyholder and separate account liabilities............... 155.6 113.8
Accrued expenses............................................ 50.8 70.4
Deferred compensation and benefits.......................... 38.3 24.0
Policyholder dividends...................................... -- 39.8
Real estate and mortgages................................... 25.3 29.4
------ ------
Total deferred tax assets................................... 270.0 277.4
------ ------
Net deferred tax asset...................................... $ 16.9 $ 1.7
====== ======
</TABLE>
- ---------------
(1) Includes $3.8 million and $25.7 million at December 31, 1999 and 1998 of
deferred taxes relating to net unrealized gains on fixed maturity securities
in the AEGON Portfolio (see Note 10).
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.
9. 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 $29.6 million in 1999, $24.5 million in 1998 and $25.6 million in
1997. The future minimum rental obligations for the next five years and
thereafter under these leases are: $30.6 million for 2000, $28.2 million for
2001, $27.0 million for 2002, $25.4 million for 2003, $22.6 million for 2004,
and $154.4 for the years thereafter.
10. 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 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.
F-24
<PAGE> 92
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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.
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 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 makes 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, 1999, 1998 and 1997, AUSA reported
earnings to the Company pursuant to the application of the Earnings Formula of
$35.7 million, $49.8 million, and $55.7 million, respectively, and the Company
recorded Group Pension Profits of $63.0 million, $56.8 million and $60.0
million, respectively. In addition, the Company earned $12.8 million, $12.8
million, and $17.7 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
F-25
<PAGE> 93
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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, 1999, the remaining Series A notes held by
the Company consisted of the $150.0 million face amount of Series A Notes it
acquired on December 31, 1993.
The following sets forth certain summarized financial information relating
to the Group Pension Transaction as of and for the periods indicated, including
information regarding: (i) the general account assets transferred to support the
Existing Deposits in the Group Pension Transaction (such assets hereafter
referred to as the "AEGON Portfolio"), (ii) the transferred separate account
assets and liabilities, and (iii) the components of revenue and expense
comprising the Group Pension Profits:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
--------------------
1999 1998
-------- --------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
General Account
Fixed maturities: available for sale, at estimated fair
value (amortized cost; $1,532.4 and $1,564.6,
respectively)........................................ $1,510.0 $1,620.2
Mortgage loans on real estate.......................... 98.5 214.8
Real estate held for investment........................ -- 37.9
Real estate to be disposed of.......................... 16.8 --
Cash and cash equivalents.............................. 25.3 21.7
Accrued investment income.............................. 26.5 27.6
-------- --------
Total general account assets........................... 1,677.1 1,922.2
Separate account assets................................... 3,432.7 3,829.6
-------- --------
Total assets......................................... $5,109.8 $5,751.8
======== ========
LIABILITIES:
General Account(1)
Policyholders' account balances........................ $1,645.7 $1,824.9
Other liabilities...................................... 20.7 24.0
-------- --------
Total general account liabilities.................... 1,666.4 1,848.9
Separate account liabilities(2)........................... 3,432.7 3,829.6
-------- --------
Total liabilities.................................... $5,099.1 $5,678.5
======== ========
</TABLE>
- ---------------
(1) Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $88.9 million
and $121.7 million as of December 31, 1999 and 1998, respectively.
(2) Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $20.3 million
and $33.3 million as of December 31, 1999 and 1998, respectively.
F-26
<PAGE> 94
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C>
REVENUES:
Product policy fees......................................... $ 24.0 $ 23.3 $ 23.7
Net investment income....................................... 128.4 154.7 169.3
Net realized gains on investments........................... 18.9 7.2 7.1
------ ------ ------
Total revenues............................................ 171.3 185.2 200.1
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances........ 88.4 108.7 117.3
Other operating costs and expenses.......................... 19.9 19.7 22.8
------ ------ ------
Total benefits and expenses............................... 108.3 128.4 140.1
------ ------ ------
Group Pension Profits..................................... $ 63.0 $ 56.8 $ 60.0
====== ====== ======
</TABLE>
Fixed Maturity Securities
At December 31, 1999 and 1998, 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, 1999 and 1998, there were no problem fixed maturities (as
hereafter defined -- see Note 12) held in the AEGON Portfolio. In addition, at
such dates the carrying value of potential problem fixed maturities held in the
AEGON Portfolio was $3.7 million. Also, none of the fixed maturity securities
held in the AEGON Portfolio at December 31, 1999 and 1998 or prior thereto had
been restructured.
The amortized cost and estimated fair value of fixed maturity securities
held in the AEGON Portfolio, by contractual maturity dates, (excluding scheduled
sinking funds), as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
($ IN MILLIONS)
<S> <C> <C>
Due in one year or less..................................... $ 91.5 $ 92.5
Due after one year through five years....................... 872.0 856.1
Due after five years through ten years...................... 269.7 262.8
Due after ten years......................................... 30.9 29.7
-------- --------
Subtotal.................................................... 1,264.1 1,241.1
Mortgage and asset backed securities........................ 268.3 268.9
-------- --------
Total..................................................... $1,532.4 $1,510.0
======== ========
</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.
The percentage of fixed maturities with a credit quality of Aaa, Aa or A
was 73.0% and 66.8% at December 31, 1999 and 1998, respectively. The percentage
of fixed maturities rated Baa was 24.6% and 29.3% at December 31, 1999 and 1998,
respectively. There were no fixed maturities in or near default.
F-27
<PAGE> 95
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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, 1999, 1998, 1997 and prior thereto. The net change in
unrealized investment gains (losses) was $(77.9) million, $(4.0) million and
$(1.5) million for the years ended December 31, 1999, 1998 and 1997,
respectively (see Note 11):
Mortgage Loans on Real Estate
Mortgage loans on real estate in the AEGON Portfolio at December 31, 1999
and 1998 consist of the following:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1999 1998
------- -------
($ IN MILLIONS)
<S> <C> <C>
Mortgage loans.............................................. $102.8 $230.8
Valuation allowances........................................ (4.3) (16.0)
------ ------
Mortgage loans, net of valuation allowance.................. $ 98.5 $214.8
====== ======
</TABLE>
An analysis of the valuation allowances with respect to the AEGON Portfolio
for 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
-----------------------
1999 1998 1997
----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year.................................. $16.0 $13.6 $22.2
Increase (decrease) in allowance............................ (6.7) 2.9 (5.1)
Reduction due to pay downs and pay offs..................... (1.0) (0.5) (1.6)
Transfers to real estate.................................... (4.0) -- (1.9)
----- ----- -----
Balance, end of year........................................ $ 4.3 $16.0 $13.6
===== ===== =====
</TABLE>
Impaired mortgage loans along with related valuation allowances with
respect to the AEGON Portfolio at December 31, 1999, 1998 and 1997 are as
follows:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
-------------------------
1999 1998 1997
----- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Investment in impaired mortgage loans (before valuation
allowances):
Loans that have valuation allowances.................... $34.3 $ 71.1 $ 56.6
Loans that do not have valuation allowances............. 4.4 4.4 45.8
----- ------ ------
Subtotal............................................. 38.7 75.5 102.4
Valuation allowances...................................... (2.7) (11.4) (5.8)
----- ------ ------
Impaired mortgage loans, net of valuation allowances...... $36.0 $ 64.1 $ 96.6
===== ====== ======
</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, 1999, 1998, and 1997, the average
recorded investment in impaired mortgage loans with respect to the AEGON
Portfolio was approximately $50.0 million,
F-28
<PAGE> 96
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
$80.4 million, and $116.3 million, respectively. For the years ended December
31, 1999, 1998, and 1997 approximately $2.9 million, $4.5 million, and $6.5
million, respectively, of interest income on impaired loans with respect to the
AEGON Portfolio was earned.
At December 31, 1999 and 1998, there were no mortgage loans which were
non-income producing for the twelve months preceding such dates with respect to
the AEGON Portfolio.
At December 31, 1999 and 1998 the AEGON Portfolio held restructured
mortgage loans of $36.0 million and $59.7 million, respectively. Interest income
of $2.9 million, $4.0 million, and $6.6 million was recognized on restructured
mortgage loans for the years ended December 31, 1999, 1998, and 1997,
respectively. Gross interest income on these loans that would have been recorded
in accordance with the original terms of such loans amounted to approximately
$3.9 million, $6.9 million, and $9.2 million for the years ended December 31,
1999, 1998, and 1997, respectively.
The following table presents the maturity distribution of mortgage loans
held in the AEGON Portfolio as of December 31, 1999 ($ in millions):
<TABLE>
<CAPTION>
DECEMBER 31, 1999
-----------------
CARRYING % OF
VALUE TOTAL
-------- -----
<S> <C> <C>
Due in one year or less..................................... $27.9 28.3%
Due after one year through five years....................... 37.0 37.6
Due after five years through ten years...................... 33.6 34.1
----- -----
Total..................................................... $98.5 100.0%
===== =====
</TABLE>
Total problem, potential problem and restructured commercial mortgages as a
percentage of commercial mortgages were 36.6%, 29.9% and 27.8% at December 31,
1999, 1998 and 1997, respectively. Total valuation allowances as a percentage of
problem, potential problem and restructured commercial mortgages at carrying
value before valuation allowances were 7.0%, 15.1% and 5.7% as of December 31,
1999, 1998 and 1997, respectively.
Real Estate
As of December 31, 1999 and 1998, the AEGON Portfolio had real estate of
$16.8 million and $37.9 million, respectively, which are net of $2.4 million and
$18.2 million, respectively, of impairments taken upon foreclosure of mortgage
loans. Losses recorded during the years ended December 31, 1999, 1998 and 1997
related to impairments taken upon foreclosure were $0.0 million, $0.0 million,
and $4.3 million, respectively. For the year ended December 31, 1999, the real
estate balance of $16.8 million was classified as real estate to be disposed of.
For the year ended December 31, 1998, the balance of $37.9 million was
classified as real estate held for investment. During 1999, there was $0.4
million of losses recorded for valuation allowances on real estate to be
disposed of.
Real estate is net of accumulated depreciation of $1.0 million, and $2.5
million and valuation allowances of $0.4 million and $0.0 million at December
31, 1999 and 1998, respectively. Depreciation expense of $0.7 million, $1.1
million, and $1.4 million, was recorded for the years ended December 31, 1999,
1998, and 1997, respectively.
There was no real estate included in the AEGON Portfolio which was
non-income producing for the twelve months preceding December 31, 1999, 1998,
and 1997, respectively.
F-29
<PAGE> 97
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. INVESTMENT INCOME, REALIZED AND UNREALIZED INVESTMENT GAINS (LOSSES), AND
COMPREHENSIVE INCOME:
Net investment income for the years ended December 31, 1999, 1998 and 1997
was derived from the following sources:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
NET INVESTMENT INCOME
Fixed maturities......................................... $226.1 $418.1 $422.5
Equity securities........................................ 194.2 53.6 53.5
Mortgage loans........................................... 87.1 118.7 137.1
Real estate.............................................. 34.1 44.4 56.2
Policy loans............................................. 4.4 72.5 82.2
Other investments (including cash and short-term)........ 14.4 23.1 22.4
------ ------ ------
Total investment income.................................. 560.3 730.4 773.9
Investment expenses...................................... 35.4 42.1 40.9
------ ------ ------
Net investment income.................................... $524.9 $688.3 $733.0
====== ====== ======
</TABLE>
Net realized gains (losses) on investments for the years ended December 31,
1999, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
NET REALIZED GAINS (LOSSES) ON INVESTMENTS
Fixed maturities......................................... $ (8.5) $ 8.3 $ 7.3
Equity securities........................................ 76.0 6.9 35.8
Mortgage loans........................................... (2.2) 5.4 10.4
Real estate.............................................. 52.1 127.6 20.1
Other investments assets................................. 4.8 20.5 (1.5)
------ ------ ------
Net realized gains on investments........................ $122.2 $168.7 $ 72.1
====== ====== ======
</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 4), 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
F-30
<PAGE> 98
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
components of other comprehensive income for the years ended December 31, 1999,
1998 and 1997 as presented below:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
OTHER COMPREHENSIVE INCOME
Change in unrealized gains (losses):
Fixed maturities........................................ $(458.9) $ 66.8 $ 98.7
Equity securities....................................... (25.3) 24.2 0.6
Other................................................... (3.6) (1.8) 3.7
------- ------ ------
Subtotal................................................ (487.8) 89.2 103.0
AEGON Portfolio (See Note 10)........................... (77.9) (4.0) (1.5)
------- ------ ------
Subtotal................................................ (565.7) 85.2 101.5
Effect on unrealized gains (losses) on investments
attributable to:
DAC................................................... 241.6 (6.7) (47.9)
Deferred federal income taxes......................... 114.1 (28.4) (17.7)
Net unrealized gains and DAC transferred to the Closed
Block................................................. 28.2 (18.7) --
------- ------ ------
Change in unrealized gains (losses) on investments,
net................................................... (181.8) 31.4 35.9
Minimum pension liability adjustment (See Note 7)....... -- 2.9 (2.9)
------- ------ ------
Other comprehensive income.............................. $(181.8) $ 34.3 $ 33.0
======= ====== ======
</TABLE>
The following table sets forth the reclassification adjustments required
for the years ended December 31, 1999, 1998, and 1997 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:
<TABLE>
<CAPTION>
1999 1998 1997
------- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
RECLASSIFICATION ADJUSTMENTS
Unrealized gains (losses) on Investments arising during
period................................................ $(135.3) $ 39.3 $ 53.5
Reclassification adjustment for gains included in net
income................................................ (46.5) (7.9) (17.6)
------- ------ ------
Unrealized gains (losses) on Investments, net of
reclassification adjustments.......................... $(181.8) $ 31.4 $ 35.9
======= ====== ======
</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, 1999, 1998 and 1997 are net of income tax
expense (benefit) of ($139.2) million, $24.1 million, and $8.2 million,
respectively, and $242.0 million, $0.8 million, and $(30.2) 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, 1999, 1998 and 1997 are net of income tax expense
of $25.1 million, $4.3 million and $9.5 million, respectively, and $(0.4)
million, $(7.5) million and $(17.7) million, respectively, relating to the
effect of such amounts on DAC.
F-31
<PAGE> 99
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
12. INVESTMENTS:
Fixed Maturity Securities Available-for-Sale:
The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity securities available-for-sale as of December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
------------------- -------------- -------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
-------- -------- ----- ------ ------ ----- -------- --------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
US Treasury securities and
Obligations of US Government
agencies..................... $ 110.1 $ 63.8 $ -- $ 3.2 $ 3.2 $ -- $ 106.9 $ 67.0
Collateralized mortgage
obligations:
Government agency-backed..... 147.2 180.2 0.5 3.3 2.1 -- 145.6 183.5
Non-agency backed............ 101.0 85.7 0.9 3.4 2.0 -- 99.9 89.1
Other asset-backed securities:
Government agency-backed..... 16.4 20.0 0.3 1.0 0.2 -- 16.5 21.0
Non-agency backed............ 402.2 347.5 1.5 12.2 13.0 0.9 390.7 358.8
Foreign governments............ 20.9 16.6 3.7 1.2 0.2 0.6 24.4 17.2
Utilities...................... 347.3 339.4 2.6 13.2 14.4 5.1 335.5 347.5
Corporate bonds................ 1,995.5 1,953.8 9.4 79.3 78.4 9.0 1,926.5 2,024.1
-------- -------- ----- ------ ------ ----- -------- --------
Total bonds................ 3,140.6 3,007.0 18.9 116.8 113.5 15.6 3,046.0 3,108.2
Redeemable preferred stocks.... 22.4 23.5 -- 0.6 1.7 0.3 20.7 23.8
-------- -------- ----- ------ ------ ----- -------- --------
Total...................... $3,163.0 $3,030.5 $18.9 $117.4 $115.2 $15.9 $3,066.7 $3,132.0
======== ======== ===== ====== ====== ===== ======== ========
</TABLE>
The carrying value of the Company's fixed maturity securities at December
31, 1999 and 1998 is net of adjustments for impairments in value deemed to be
other than temporary of $16.2 million and $15.1 million, respectively.
At December 31, 1999 and 1998, there was $1.6 million and $0.0 million,
respectively of fixed maturity securities which had 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, 1999 and 1998, the carrying value of
problem fixed maturities held by the Company was $33.9 million. In addition, at
December 31, 1999 and 1998, the Company held $0.0 million and $8.6 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 $0.0 million and $0.9 million
for the years ended December 31, 1999 and 1998, respectively. Gross interest
income on these fixed maturity securities included in net investment income
aggregated $0.0 million and $1.3 million for the years ended December 31, 1999
and 1998, respectively.
F-32
<PAGE> 100
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The amortized cost and estimated fair value of fixed maturity securities,
by contractual maturity dates (excluding scheduled sinking funds) as of December
31, 1999, are as follows:
<TABLE>
<CAPTION>
1999
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
($ IN MILLIONS)
<S> <C> <C>
Due in one year or less..................................... $ 138.6 $ 139.7
Due after one year through five years....................... 553.2 547.0
Due after five years through ten years...................... 1,243.3 1,193.4
Due after ten years......................................... 561.1 533.9
-------- --------
Subtotal.................................................. 2,496.2 2,414.0
Mortgage- and asset-backed securities....................... 666.8 652.7
-------- --------
Total..................................................... $3,163.0 $3,066.7
======== ========
</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 1999, 1998 and 1997 were $632.8 million, $396.9 million and
$225.0 million, respectively. Gross gains of $6.9 million, $10.6 million, and
$5.2 million and gross losses of $19.4 million, $2.9 million, and $2.6 million
were realized on these sales, respectively.
Equity Securities
The cost, gross unrealized gains and losses, and estimated fair value of
marketable and nonmarketable equity securities at December 31, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>
GROSS GROSS
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
--------------- --------------- ------------- ---------------
1999 1998 1999 1998 1999 1998 1999 1998
------ ------ ------ ------ ----- ----- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marketable equity
Securities................. $217.5 $233.6 $ 63.3 $ 48.7 $ 9.3 $ 6.7 $271.5 $275.6
Nonmarketable equity
Securities................. 178.5 128.2 84.4 65.7 14.6 12.3 248.3 181.6
------ ------ ------ ------ ----- ----- ------ ------
$396.0 $361.8 $147.7 $114.4 $23.9 $19.0 $519.8 $457.2
====== ====== ====== ====== ===== ===== ====== ======
</TABLE>
Proceeds from sales of equity securities during 1999, 1998 and 1997 were
$302.7 million, $165.0 million and $234.1 million, respectively. Gross gains of
$90.0 million, $24.4 million, and $44.4 million and gross losses of $12.4
million, $17.2 million, and $4.7 million were realized on these sales,
respectively.
F-33
<PAGE> 101
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
13. MORTGAGE LOANS ON REAL ESTATE AND REAL ESTATE:
Mortgage loans on real estate at December 31, 1999 and 1998 consist of the
following:
<TABLE>
<CAPTION>
1999 1998
-------- --------
($ IN MILLIONS)
<S> <C> <C>
Commercial mortgage loans................................... $ 777.8 $ 546.1
Agricultural and other loans................................ 515.6 465.4
-------- --------
Total loans................................................. 1,293.4 1,011.5
Less: valuation allowances.................................. (23.0) (23.2)
-------- --------
Mortgage loans, net of valuation allowances................. $1,270.4 $ 988.3
======== ========
</TABLE>
An analysis of the valuation allowances for 1999, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
----- ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year................................ $23.2 $ 54.9 $ 67.0
Increase in allowance..................................... 3.2 11.9 1.4
Reduction due to pay downs and pay offs................... (1.2) (16.0) (12.7)
Transfers to real estate.................................. (2.2) (4.0) (0.8)
Transfers to the Closed Block............................. -- (23.6) --
----- ------ ------
Balance, end of year...................................... $23.0 $ 23.2 $ 54.9
===== ====== ======
</TABLE>
Impaired mortgage loans along with related valuation allowances as of
December 31, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ IN MILLIONS)
<S> <C> <C>
Investment in impaired mortgage loans (before valuation
allowances):
Loans that have valuation allowances........................ $109.1 $116.7
Loans that do not have valuation allowances................. 30.1 29.5
------ ------
Subtotal.................................................. 139.2 146.2
Valuation allowances........................................ (17.5) (10.9)
------ ------
Impaired mortgage loans, net of valuation allowances...... $121.7 $135.3
====== ======
</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 1999 and 1998, the average recorded investment in impaired mortgage
loans was approximately $262.6 million and $300.1 million, respectively
including Closed Block mortgages. During 1999, 1998, and 1997, the Company
recognized $19.8 million, $24.2 million, and $28.5 million, respectively, of
interest income on impaired loans (see Note 20.)
At December 31, 1999 and 1998, the carrying values of mortgage loans which
were non-income producing for the twelve months preceding such dates were $21.0
million and $12.9 million, respectively.
At December 31, 1999 and 1998, the Company had restructured mortgage loans
of $100.1 million (excluding the Closed Block) and $110.6 million, respectively.
Interest income of $6.3 million, $13.0
F-34
<PAGE> 102
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
million and $20.3 million was recognized on restructured mortgage loans in 1999,
1998, and 1997, respectively. Gross interest income on these loans that would
have been recorded in accordance with the original terms of such loans amounted
to approximately $11.6 million, $18.1 million, and $26.7 million in 1999, 1998
and 1997, respectively.
The following table summarizes the Company's real estate at December 31,
1999 and 1998:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
------------------
1999 1998
------- -------
($ IN MILLIONS)
<S> <C> <C>
Real estate to be disposed of(1)............................ $375.6 $393.7
Impairment writedowns....................................... (52.7) (50.2)
Valuation allowance......................................... (22.0) (30.6)
------ ------
Carrying value of real estate to be disposed of............. $300.9 $312.9
------ ------
Real estate held for investment(2).......................... $ 57.0 $381.9
Impairment writedowns....................................... (10.8) (60.6)
------ ------
Carrying value of real estate held for investment........... $ 46.2 $321.3
====== ======
</TABLE>
- ---------------
(1) Amounts presented as of December 31, 1999 and 1998 are net of $42.1 million
and $29.0 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
(2) Amounts presented as of December 31, 1999 and 1998 are net of $5.9 million
and $26.8 million, respectively, relating to impairments taken upon
foreclosure of mortgage loans.
An analysis of the valuation allowances relating to real estate classified
as to be disposed of for the years ended December 31, 1999, 1998 and 1997 is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C>
Balance, beginning of year............................... $ 30.6 $ 82.7 $ 46.0
Increase due to transfers of properties to real estate to
be disposed of during the year......................... 11.0 1.7 66.1
Increases (decreases) in valuation allowances from the
end of the prior period on properties to be disposed
of..................................................... 1.1 5.0 (2.3)
Decrease as a result of transfers of valuation allowances
to held for investment................................. -- (13.5) --
Decrease as a result of sale............................. (20.7) (45.3) (27.1)
------ ------ ------
Balance, end of year..................................... $ 22.0 $ 30.6 $ 82.7
====== ====== ======
</TABLE>
Real estate is net of accumulated depreciation of $138.6 million and $290.1
million for 1999 and 1998, respectively, and depreciation expense recorded was
$8.5 million, $26.6 million and $45.1 million for the years ended December 31,
1999, 1998 and 1997, respectively.
At December 31, 1999 and 1998, the carrying value of real estate which was
non-income producing for the twelve months preceding such dates was $16.9
million and $12.5 million, respectively. Approximately 69.4% of such real estate
at December 31, 1999 consisted of land and the balance consisted of vacant
buildings.
The carrying value of impaired real estate as of December 31, 1999 and 1998
was $84.2 million and $78.4 million, respectively. The depreciated cost of such
real estate as of December 31, 1999 and 1998 was $147.7 million and $189.1
million before impairment writedowns of $63.5 million and $110.7 million,
F-35
<PAGE> 103
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
respectively. The aforementioned impairments occurred primarily as a result of
low occupancy levels and other market related factors. Losses recorded during
1999, 1998, and 1997 related to impaired real estate aggregated $0.0 million,
$5.9 million, and $0.0 million, respectively, and are included as a component of
net realized gains on investments. Substantially all impaired real estate is
allocated to the Protection Products segment.
14. 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, 1999 was $251.7 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.
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
F-36
<PAGE> 104
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
by discounting expected cash outflows using interest rates currently offered for
similar contracts with maturities consistent with those remaining for the
contracts being valued.
15. 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
$6.0 million for last survivor products.
The Company has entered into coinsurance agreements with other insurers
related to a portion of its extended term insurance, guaranteed interest
contract and long-term disability claim liabilities and reinsures approximately
50% of its block of paid-up life insurance policies.
The following table summarizes the effect of reinsurance for the years
indicated:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------- ------
($ IN MILLIONS)
<S> <C> <C> <C>
Direct premiums (includes $74.4, $78.4 and $78.1 of
accident and health premiums for 1999, 1998, and 1997,
respectively)......................................... $181.6 $ 728.7 $871.0
Reinsurance assumed..................................... 5.0 5.3 6.2
Reinsurance ceded (includes $(73.8), $(78.2), and $(3.5)
of accident and health premiums for 1999, 1998, and
1997, respectively)................................... (90.3) (112.3) (38.6)
------ ------- ------
Net premiums(1)....................................... $ 96.3 $ 621.7 $838.6
====== ======= ======
Universal life and investment type product policy fee
income ceded.......................................... $ 14.4 $ 8.9 $ 8.8
====== ======= ======
Policyholders' benefits ceded(2)........................ $ 38.2 $ 107.3 $ 69.0
====== ======= ======
Interest credited to policyholders' account balances
ceded................................................. $ 4.5 $ 6.5 $ 9.9
====== ======= ======
</TABLE>
- ---------------
(1) Excludes Closed Block direct premiums of $639.9 and $103.3 and reinsurance
ceded of $19.0 and $3.2 at December 31, 1999 and 1998, respectively.
(2) Excludes $21.8 million of Closed Block benefits ceded at December 31, 1999.
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 $9.1 million for the year ended December 31, 1997.
F-37
<PAGE> 105
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
16. DEBT:
The Company's debt at December 31, 1999 and 1998 consists of the following:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ IN MILLIONS)
<S> <C> <C>
Surplus notes............................................... $240.0 $231.7
Real estate mortgage encumbrances........................... 58.8 94.6
Other....................................................... -- 49.1
------ ------
$298.8 $375.4
====== ======
</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. For each of the years in the period ended December 31, 1999 and 1998,
the Company recorded interest expense of $10.9 million related the MONY Notes.
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
approximately 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 did 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 Surplus 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, 1999, 1998, and 1997, the Company recorded interest expense of $13.5
million, $12.1 million, and $10.8 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 6.7% to 7.7%. Maturities range from
June 2000 to February 2002. For the years ended December 31, 1999, 1998 and
1997, interest expense on such mortgage loans aggregated $5.0 million, $9.0
million, and $12.3 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. The remaining
obligation of $44.1 was paid in full on December 1, 1999. At December 31, 1998,
the outstanding balance of the obligation including accrued interest was $42.4
million. Interest expense on the obligation of $3.4 million, $3.1 million, and
$3.0 million is reflected in Other Operating Costs and Expenses on the
statements of income for the years ended December 31, 1999, 1998 and 1997,
respectively.
F-38
<PAGE> 106
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 was originally due January 1, 2009, however, on
December 1, 1999, the remaining balance of the interest bearing note of $44.2
was paid in full as part of the sale of the property to a third party. The
transaction continues to be accounted for as a sale/leaseback arrangement, with
the proceeds received from the sale, amortized into income over the life of the
lease. The lease has a term of 20 years beginning December 21, 1988 and requires
minimum annual rental payments of $7.3 million in 2000, $7.4 million in 2001,
$7.6 million in 2002, $7.7 million in 2003, $7.9 million in 2004 and $33.1
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 year ended December 31, 1997, the Company
recorded interest expense of $0.8 million, related to the REMIC. The weighted
average interest rate on the notes for the year ended December 31, 1997 was
5.9%.
Prior to December 31, 1997, the Company had outstanding Eurobond debt. For
the year ended December 31, 1997 interest expense on the Eurobonds outstanding
aggregated $2.1 million. The weighted average interest rate on such debt for the
year ended December 31, 1997 was 8.13%.
At December 31, 1999, aggregate maturities of long-term debt based on
required principal payments for 2000 and the succeeding four years are $0.0
million, $0.0 million, $5.4 million, $0.0 million, and $0.0 million,
respectively, and $240.0 million thereafter.
17. 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, 1999 and 1998, securities loaned by the Company under
this agreement had a fair value of approximately $42.6 million and $98.9
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, 1999 and 1998, 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 0.5% and 3.5%,
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, 1999 are Non-Government
Asset/Mortgage-Backed of $490.6 million (16.0%), Consumer Goods and Services of
$462.0 million (15.1%), Public Utilities of $335.5 million (10.9%), Other
Manufacturing of $305.4 million (10.0%).
At December 31, 1998 the industries that comprise 10% or more of the
carrying value of the fixed maturity securities were Non-Government
Asset/Mortgage-Backed of $448.0 million (14.3%), Other Manufacturing of $391.3
million (12.5%), Consumer Goods and Services of $408.5 million (13.1%), and
Public Utilities of $347.5 million (11.1%).
F-39
<PAGE> 107
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company holds below investment grade fixed maturity securities with a
carrying value of $308.3 million at December 31, 1999. 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, 1998, the carrying
value of the Company's investments in below investment grade fixed maturity
securities amounted to $252.0 million.
The Company has significant investments in commercial and agricultural
mortgage loans and real estate (including joint ventures and partnerships). The
locations of property collateralizing mortgage loans and real estate investment
carrying values at December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
GEOGRAPHIC REGION
West........................................... $ 323.3 20.0% $ 315.8 19.5%
Mountain....................................... 319.7 19.8 392.5 24.2
Southeast...................................... 307.3 19.0 292.2 18.0
Midwest........................................ 290.4 17.9 220.7 13.6
Northeast...................................... 234.7 14.5 261.5 16.1
Southwest...................................... 142.1 8.8 139.8 8.6
-------- ----- -------- -----
Total........................................ $1,617.5 100.0% $1,622.5 100.0%
======== ===== ======== =====
</TABLE>
The states with the largest concentrations of mortgage loans and real
estate investments at December 31, 1999 are: California, $179.2 million (11.1%);
New York $158.7 million (9.8%); Arizona, $157.8 million (9.8%); Illinois, $97.1
million (6.0%); Texas, $92.0 million (5.7%); Georgia, $83.0 million (5.1%); and
Washington, $75.9 million (4.7%).
As of December 31, 1999 and 1998, the real estate and mortgage loan
portfolio was also diversified as follows:
<TABLE>
<CAPTION>
1999 1998
----------------- -----------------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
PROPERTY TYPE:
Office buildings............................... $ 610.2 37.7% $ 585.4 36.1%
Agricultural................................... 510.1 31.5 459.7 28.4
Hotel.......................................... 182.4 11.3 264.9 16.3
Retail......................................... 112.6 7.0 164.1 10.1
Other.......................................... 95.6 5.9 72.7 4.5
Industrial..................................... 77.0 4.8 51.0 3.1
Apartment buildings............................ 29.6 1.8 24.7 1.5
-------- ----- -------- -----
Total........................................ $1,617.5 100.0% $1,622.5 100.0%
======== ===== ======== =====
</TABLE>
18. COMMITMENTS AND CONTINGENCIES:
a) Since late 1995 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
universal life insurance policies from the early 1980s through 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
violation of state insurance and/or deceptive business practice laws).
Plaintiffs in these cases (including the Goshen case
F-40
<PAGE> 108
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 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 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 one of those
cases the Goshen v. The Mutual Life Insurance Company of New York and MONY Life
Insurance Company of America, 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 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.
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 December 20, 1999, the New York State
Court of Appeals affirmed the dismissal of all but one of the claims in the
Goshen case (a claim under New York's General Business Law), which has been
remanded back to the New York State Supreme Court for further proceedings
consistent with the opinion. The Company intends to defend itself vigorously
against the sole remaining claim. There can be no assurance that the present
litigation relating to sales practices will not have a material adverse effect
on the Company.
On November 16, 1999, the MONY Group, Inc. and MONY Life Insurance Company
were served with a complaint in an action entitled Calvin Chatlos, M.D., and
Alvin H. Clement, On Behalf of Themselves And All Others Similarly Situated v.
The MONY Life Insurance Company, The MONY Group Inc., and Neil D. Levin,
Superintendent, New York Department of Insurance, the Chatlos case, filed in the
United States District Court for the Southern District of New York. The action
purports to be brought as a class action on behalf of all individuals who had an
ownership interest in one or more in-force life insurance policies issued by
MONY Life Insurance Company as of November 16, 1998. The complaint alleges that
(i) the New York Superintendent of Insurance Neil D. Levin, violated Section
7312 of the New York Insurance Law by approving the plan of demutualization,
which plaintiffs claim was not fair and adequate, primarily because it allegedly
failed to provide for sufficient assets for the mechanism established under the
plan to preserve reasonable policyholder dividend expectations of the closed
block, and (ii) the Company violated Section 7312 by failing to develop and
submit to the Superintendent a plan of demutualization that was fair and
adequate. The plaintiffs seek equitable relief in the form of an order vacating
and/or modifying the Superintendent's order approving the plan of
demutualization and/or directing the Superintendent to order the Company to
increase the assets in the closed block, as well as unspecified monetary
damages, attorneys' fees and other relief.
In order to challenge successfully the New York Superintendent's approval
of the plan, plaintiffs would have to sustain the burden of showing that such
approval was arbitrary and capricious or an abuse of discretion, made in
violation of lawful procedures, affected by an error of law or not supported by
substantial evidence. In addition, Section 7312 provides that the Company may
ask the court to require the challenging party to give security for the
reasonable expenses, including attorneys' fees, which may be incurred by the
Company or the Superintendent or for which the Company may become liable, to
which
F-41
<PAGE> 109
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
security the Company shall have recourse in such amount as the court shall
determine upon the termination of the action.
On February 2, 2000, the District Court entered an order approving the
voluntary dismissal of the complaint. Under the terms of the order, plaintiffs
have six months from the date thereof to refile in state court, and defendants
have retained the right in any subsequent action to assert that plaintiffs'
claims were time-barred when initially asserted and/or barred by virtue of
plaintiffs' delay (laches) in bringing suit in the first place.
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 $1.7 million, $13.1 million, and $0.0 million during the years
ended December 31, 1999, 1998 and 1997, 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, 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 totaling
$150.0 million with scheduled renewal dates in September 2000 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 these lines of credit since their inception.
At December 31, 1999, the Company had commitments to issue $8.7 million of
fixed rate agricultural loans with periodic interest rate reset dates. The
initial interest rates on such loans range from approximately 7.25% to 8.75%. In
addition, the Company had commitments to issue $70.2 million of fixed rate
commercial mortgage loans with interest rates ranging from 7.00% to 8.92%. The
Company had commitments outstanding to purchase private fixed maturity
securities as of December 31, 1999 of $15.0 million with an interest rate of
9.0%. At December 31, 1999, the Company had commitments to contribute capital to
its equity partnership investments of $118.1 million.
b) Plaintiffs in the Chatlos case filed a new complaint in the Supreme
Court of the State of New York, New York County, on March 27,2000. Although the
Superintendent of Insurance remains a defendant in the new action, plaintiff
seeks only declaratory relief, rather than damages, from him. In addition,
plaintiffs have reformulated their claims against the Company. In the new
complaint, plaintiffs first seek a declaratory judgment that the Superintendent
of Insurance and the Company violated Section 7312 by withholding certain
information from the policyholders, thereby denying them their right to an
informed vote in connection with the demutualization. Second, plaintiffs seek an
award of unspecified damages against the Company for wrongfully denying
policyholders a fair and equitable amount for their membership interests. Third,
plaintiffs assert a breach of contract claim, claiming the Company breached its
contractual obligations to the policyholders by proposing a demutualization plan
that did not comply with New York law. Finally, plaintiffs claim that the
Company breached fiduciary duties allegedly owed to them by authorizing the
demutualization plan without regard to their interest. The Company believes the
claims are without merit and intends to defend itself vigorously.
F-42
<PAGE> 110
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
19. STATUTORY FINANCIAL INFORMATION AND REGULATORY RISK-BASED CAPITAL
The combined statutory net income reported by the Company for the years
ended December 31, 1999, 1998, and 1997 was $131.0 million, $9.7 million, and
$88.5 million, respectively. The combined statutory surplus of the Company as of
December 31, 1999 and 1998 was $1,067.1 million and $1,015.8 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-43
<PAGE> 111
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
20. CLOSED BLOCK -- SUMMARY FINANCIAL INFORMATION
Summarized financial information of the Closed Block as of December 31,
1999 and December 31, 1998 and for the year ended December 31, 1999 and for the
period from November 16, 1998 (date of establishment of the Closed Block)
through December 31, 1998 is presented below:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 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).......................... $3,479.5 $3,574.0
Mortgage loans on real estate.............................. 443.0 431.7
Policy loans............................................... 1,199.1 1,208.4
Real estate to be disposed of.............................. 22.1
Cash and cash equivalents.................................. 111.3 134.4
Premiums receivable........................................ 14.2 16.8
Deferred policy acquisition costs.......................... 689.9 554.6
Other assets............................................... 223.0 241.3
-------- --------
Total Closed Block assets............................. $6,182.1 $6,161.2
======== ========
LIABILITIES:
Future policy benefits..................................... $6,781.5 $6,715.6
Policyholders' account balances............................ 294.6 298.0
Other policyholders' liabilities........................... 164.9 163.5
Other liabilities.......................................... 62.3 113.6
-------- --------
Total Closed Block liabilities........................ $7,303.3 $7,290.7
======== ========
</TABLE>
<TABLE>
<CAPTION>
FOR THE NOVEMBER 16,
YEAR ENDED 1998 THROUGH
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
($ IN MILLIONS)
<S> <C> <C>
REVENUES:
Premiums................................................... $ 620.8 $100.1
Net investment income...................................... 375.1 46.6
Net realized gains (losses) on investments................. 2.9 2.4
Other Income............................................... 1.4 0.6
-------- ------
Total revenues........................................ 1,000.2 149.7
-------- ------
BENEFITS AND EXPENSES:
Benefits to policyholders.................................. 640.1 110.0
Interest credited to policyholders' account balances....... 8.9 1.0
Amortization of deferred policy acquisition costs.......... 67.5 9.0
Dividends to policyholders................................. 228.8 22.4
Other operating costs and expenses......................... 10.1 1.6
-------- ------
Total benefits and expenses........................... 955.4 144.0
-------- ------
Contribution from the Closed Block......................... $ 44.8 $ 5.7
======== ======
</TABLE>
The carrying value of the Closed Block fixed maturity securities at
December 31, 1999 and 1998 is net of adjustments for impairment of $3.0 million
and $0.0 million, respectively.
F-44
<PAGE> 112
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
At December 31, 1999 and December 31, 1998, there were no fixed maturities
which have been non-income producing for the twelve months preceding such dates.
At December 31, 1999 and December 31, 1998, there were problem fixed
maturities of $12.0 million and $0.0 million, respectively. There were no fixed
maturities which were restructured at December 31, 1999 and 1998.
The amortized cost and estimated fair value of fixed maturity securities in
the Closed Block, by contractual maturity dates, (excluding scheduled sinking
funds) as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
($ IN MILLIONS)
<S> <C> <C>
Due in one year or less..................................... $ 67.9 $ 68.7
Due after one year through five years....................... 953.5 941.0
Due after five years through ten years...................... 1,468.7 1,419.5
Due after ten years......................................... 592.7 564.5
-------- --------
Subtotal.................................................. 3,082.8 2,993.7
Mortgage and asset-backed-securities........................ 506.8 485.8
-------- --------
$3,589.6 $3,479.5
======== ========
</TABLE>
Fixed maturity securities that are not due at a single maturity date have
been included in the preceding table in the year of final maturity. Actual
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
Mortgage loans on real estate in the Closed Block at December 31, 1999 and
December 31, 1998 consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
($ IN MILLIONS)
<S> <C> <C>
Commercial mortgage loans.................................. $394.9 $382.0
Agricultural and other loans............................... 62.4 73.3
------ ------
Subtotal................................................. 457.3 455.3
Less: valuation allowances................................. 14.3 23.6
------ ------
Mortgage loans, net of valuation allowances................ $443.0 $431.7
====== ======
</TABLE>
An analysis of the valuation allowances for the year ended December 31,
1999 and for the period from November 16, 1998 through December 31, 1998 is as
follows:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ IN MILLIONS)
<S> <C> <C>
Beginning balance........................................... $23.6 $24.7
Increase (decrease) in allowance............................ 0.4 (0.8)
Reduction due to pay downs and pay offs..................... -- (0.3)
Transfer to real estate..................................... (9.7) --
----- -----
Balance, December 31........................................ $14.3 $23.6
===== =====
</TABLE>
F-45
<PAGE> 113
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Impaired mortgage loans along with related valuation allowances were as
follows as of December 31, 1999 and December 31, 1998:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ IN MILLIONS)
<S> <C> <C>
Investment in impaired mortgage loans (before valuation
allowances):
Loans that have valuation allowances........................ $108.7 $117.9
------ ------
Loans that do not have valuation allowances................. 20.1 31.1
Subtotal.................................................. 128.8 149.0
------ ------
Valuation allowances........................................ (25.6) (17.5)
Impaired mortgage loans, net of valuation allowances........ $103.2 $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".
For the year ended December 31, 1999, the Closed Block's average recorded
investment in impaired mortgage loans was $117.4 million and the Closed Block
recognized $11.6 million on impaired loans. 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, 1999 and 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 $0.0 million and $0.5 million.
At December 31, 1999 and December 31, 1998, the Closed Block had
restructured mortgage loans of $43.5 million and $54.8 million. Interest income
of $5.0 million and $0.7 million was recognized on such loans for the year ended
December 31, 1999 and during the period from November 16, 1998 through December
31, 1998, respectively. Gross interest income on these loans that would have
been recorded in accordance with the original terms of such loans amounted to
approximately $5.4 million and $0.8 million for the respective periods.
21. PRO FORMA INFORMATION (UNAUDITED)
The unaudited pro forma earnings information reported in the statements of
income and comprehensive income give effect to the Transaction as if it occurred
January 1, 1998. Accordingly, pro forma earnings reflect the elimination of
demutualization expenses, which were assumed to have been fully incurred prior
to January 1, 1998, and the elimination of the differential earnings (surplus)
tax applicable to mutual life insurance companies. MONY Life is no longer
subject to the differential earnings (surplus) tax as a stock life insurance
company.
The unaudited pro forma information is provided for informational purposes
only and should not be construed to be indicative of the Company's consolidated
results of operations had the Transaction been consummated on the date assumed,
and does not in any way represent a projection or forecast of the Company's
consolidated results of operations as of any future date or for any future
period.
F-46
<PAGE> 114
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The pro forma revenues and expenses of the Closed Block for the year ended
December 31, 1998, based on certain estimates and assumptions that management
believes are reasonable, as if the Closed Block had been established on January
1, 1998, are summarized below ($ in millions):
<TABLE>
<S> <C>
Premiums.................................................... $ 643.9
Net investment income....................................... 373.8
Net realized gains on investments........................... 10.2
Other income................................................ 1.9
--------
Total revenues............................................ 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 costs and expenses.......................... 9.8
--------
Total benefits and expenses............................... 977.6
--------
Contribution from the Closed Block..................... $ 52.2
========
</TABLE>
22. 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 companywide 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 $59.7 million pre-tax in
the third quarter of 1999.
23. SUBSEQUENT EVENTS
a) In January 2000, the New York Insurance Department approved, and MONY
Life paid, a dividend to MONY Group in the amount of $75 million.
b) On January 12, 2000, the Holding Company filed a registration statement
on Form S-3 with the Securities and Exchange Commission (the "SEC") to register
certain securities. This registration, known as a "Shelf Registration", provides
MONY Group with the ability to offer various securities to the public, when it
deems appropriate, to raise proceeds up to an amount not to exceed $1.0 billion
in the aggregate for all issuances of securities thereunder. It is the intention
of the MONY Group to use this facility to raise proceeds for mergers and
acquisitions and for other general corporate matters of MONY Group and its
subsidiaries, as it considers necessary.
c) On March 8, 2000, the Holding Company issued $300.0 million principal
amount of senior notes (the "Senior Notes") pursuant to the aforementioned Shelf
Registration. The Senior Notes mature on March 15, 2010 and bear interest at
8.35% per annum. The principal amount of the Senior Notes is payable at maturity
and interest is payable semi-annually. The net proceeds to the Company from the
issuance of the Senior Notes, after deducting underwriting commissions and other
expenses (primarily legal and accounting fees), were approximately $297.0
million. Approximately $267.6 million of the net proceeds from the issuance of
the Senior Notes was used by the Holding Company to finance the repurchase, on
March 8, 2000, by MONY Life of all of its outstanding $115.0 million face amount
9.5% coupon surplus notes, and a $116.5 million face amount of its $125.0
million face amount 11.25% coupon surplus notes (hereafter referred to as the
"9.5% Notes" and "11.25% Notes", respectively), which were outstanding at
December 31, 1999. See Note 16 to the Consolidated Financial Statements. The
balance of
F-47
<PAGE> 115
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
the net proceeds from the issuance of the Senior Notes will be used by the
Holding Company for general corporate purposes.
To finance MONY Life's repurchase of the 9.5% Notes and the 11.25% Notes,
the Holding Company, on March 8, 2000: (i) purchased two surplus notes from MONY
Life (hereafter referred to as the "Inter-Company Surplus Notes") to replace the
9.5% Notes and the 11.25% Notes. The term of the Inter-company Surplus Notes are
identical to the 9.5% Notes and 11.25% Notes, except that the Inter-company
Surplus Notes were priced to yield a current market rate of interest and the
inter-company surplus note issued to replace the $116.5 million face amount of
the 11.25% Notes was issued at a face amount of $100.0 million, and
(ii) contributed capital to MONY Life in the amount of $65.0 million.
As a result of the repurchase of the 9.5% Notes and the 11.25% Notes, MONY
Life will record an after-tax loss of approximately $36.1 million during the 1st
quarter of 2000. The loss resulted from the premium paid by MONY Life to the
holders of the 9.5% Notes and the 11.25% Notes reflecting the excess of their
fair value over their carrying value on MONY Life's books at the date of the
transaction of approximately $7.0 million and $48.5 million, respectively. This
loss will be reported, net of tax, as an extraordinary item on the MONY Life's
income statement in 2000.
F-48
<PAGE> 116
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> 117
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 118
APPENDIX B
MONTHLY PER $1,000 SPECIFIED AMOUNT FACTORS
<TABLE>
<CAPTION>
PREFERRED NONSMOKER PREFERRED SMOKER
--------------------------------------------- ---------------------------------------------
SPECIFIED AMOUNT SPECIFIED AMOUNT
ISSUE AGE --------------------------------------------- ---------------------------------------------
OF YOUNGER 100,000- 500,000- 1 MILLION 100,000- 500,000- 1 MILLION
INSURED 499,999 999,999 AND OVER 499,999 999,999 AND OVER
- ------------ ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
18 0.050 0.050 0.040 0.060 0.050 0.040
- ----------------------------------------------------------------------------------------------------------------
20 0.050 0.050 0.040 0.060 0.050 0.040
25 0.060 0.050 0.040 0.060 0.050 0.050
- ----------------------------------------------------------------------------------------------------------------
30 0.060 0.050 0.050 0.070 0.060 0.050
35 0.070 0.060 0.050 0.070 0.060 0.060
- ----------------------------------------------------------------------------------------------------------------
40 0.060 0.070 0.060 0.060 0.070 0.060
45 0.090 0.080 0.070 0.090 0.090 0.080
- ----------------------------------------------------------------------------------------------------------------
50 0.110 0.100 0.090 0.120 0.110 0.100
55 0.140 0.130 0.110 0.140 0.130 0.120
- ----------------------------------------------------------------------------------------------------------------
60 0.170 0.160 0.140 0.180 0.170 0.150
65 0.220 0.210 0.180 0.230 0.220 0.190
- ----------------------------------------------------------------------------------------------------------------
70 0.270 0.270 0.240 0.270 0.270 0.250
75 0.310 0.300 0.280 0.310 0.300 0.280
- ----------------------------------------------------------------------------------------------------------------
80 0.360 0.350 0.340 0.360 0.350 0.340
85 0.360 0.350 0.340 0.360 0.350 0.340
</TABLE>
<TABLE>
<CAPTION>
STANDARD NONSMOKER STANDARD SMOKER
--------------------------------------------- ---------------------------------------------
SPECIFIED AMOUNT SPECIFIED AMOUNT
ISSUE AGE --------------------------------------------- ---------------------------------------------
OF YOUNGER 100,000- 500,000- 1 MILLION 100,000- 500,000- 1 MILLION
INSURED 499,999 999,999 AND OVER 499,999 999,999 AND OVER
- ------------ ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
18 0.060 0.050 0.040 0.060 0.050 0.040
- ----------------------------------------------------------------------------------------------------------------
20 0.060 0.050 0.040 0.060 0.050 0.040
25 0.060 0.060 0.050 0.060 0.050 0.050
- ----------------------------------------------------------------------------------------------------------------
30 0.070 0.060 0.050 0.070 0.060 0.050
35 0.070 0.060 0.060 0.070 0.060 0.060
- ----------------------------------------------------------------------------------------------------------------
40 0.080 0.070 0.060 0.080 0.070 0.060
45 0.090 0.090 0.080 0.090 0.080 0.080
- ----------------------------------------------------------------------------------------------------------------
50 0.120 0.110 0.100 0.120 0.110 0.100
55 0.140 0.140 0.120 0.150 0.140 0.130
- ----------------------------------------------------------------------------------------------------------------
60 0.180 0.170 0.150 0.190 0.180 0.160
65 0.230 0.220 0.190 0.250 0.240 0.210
- ----------------------------------------------------------------------------------------------------------------
70 0.270 0.270 0.250 0.300 0.290 0.260
75 0.310 0.300 0.280 0.310 0.310 0.300
- ----------------------------------------------------------------------------------------------------------------
80 0.360 0.350 0.340 0.370 0.360 0.350
85 0.360 0.350 0.340 0.370 0.360 0.350
</TABLE>
Factors for interim ages are available upon request.
B-1
<PAGE> 119
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 120
APPENDIX C
GUARANTEED DEATH BENEFIT RIDER
MONTHLY GUARANTEE PREMIUM FOR GUARANTEED DEATH
BENEFIT RIDER WITH TEN YEAR/AGE 70 GUARANTEE PERIOD
<TABLE>
<CAPTION>
MONTHLY GUARANTEE
PREMIUM
-----------------
<S> <C>
Specified Amount = $200,000
Male age 45 Preferred Nonsmoker, Female age 45 Preferred
Nonsmoker,
Death Benefit Option 1.................................... $112.00
Male age 45 Standard Smoker, Female age 45 Standard Smoker,
Death Benefit Option 1.................................... $162.83
Male age 45 Preferred Nonsmoker, Female age 45 Preferred
Nonsmoker,
Death Benefit Option 2.................................... $112.00
Male age 35 Preferred Nonsmoker, Female age 35 Preferred
Nonsmoker,
Death Benefit Option 1.................................... $ 64.60
Male age 55 Preferred Nonsmoker, Female age 55 Preferred
Nonsmoker,
Death Benefit Option 1.................................... $193.51
</TABLE>
C-1
<PAGE> 121
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 122
APPENDIX D
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>
DEATH
BENEFIT SPECIFIED
SEX AGE UNDERWRITING CLASS SEX AGE UNDERWRITING CLASS OPTION AMOUNT
- --- --- ------------------ --- --- ------------------ ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Male 45 Preferred Non-smoker Female 45 Preferred Non-smoker 1 $200,000
Male 45 Standard Smoker Female 45 Standard Smoker 1 $200,000
Male 45 Preferred Non-smoker Female 45 Preferred Non-smoker 2 $200,000
Male 35 Preferred Non-smoker Female 35 Preferred Non-smoker 1 $200,000
Male 55 Preferred Non-smoker Female 55 Preferred Non-smoker 1 $200,000
</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) 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 45-49 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 and direct expenses 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%.
The tables assume the deduction of charges including administrative and
sales charges. There are tables for the Policies listed in the chart above for
death benefit Options 1 or 2 and each option is
D-1
<PAGE> 123
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: Younger 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, Full Surrender and Policy
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 ten 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 ten 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 ten 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 ten 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 pages D-4.
D-2
<PAGE> 124
STANDARD LEDGER STATEMENT -- SUPPLEMENTAL FOOTNOTE PAGE
MONY CUSTOM ESTATE MASTER
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY POLICY
MONY LIFE INSURANCE COMPANY
ADDITIONAL INFORMATION
These policies have 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>
DEATH
BENEFIT INITIAL GUIDELINE INITIAL GUIDELINE
SEX AGE UNDERWRITING CLASS SEX AGE UNDERWRITING CLASS OPTION SINGLE PREMIUM ANNUAL PREMIUM
- --- --- ------------------ --- --- ------------------ ------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Male 45 Preferred Non-smoker Female 45 Preferred Non-smoker 1 $27,997.37 $2,382.67
Male 45 Standard Smoker Female 45 Standard Smoker 1 $33,505.43 $2,836.92
Male 45 Preferred Non-smoker Female 45 Preferred Non-smoker 2 $27,997.37 $9,313.21
Male 35 Preferred Non-smoker Female 35 Preferred Non-smoker 1 $46,221.11 $1,495.17
Male 55 Preferred Non-smoker Female 55 Preferred Non-smoker 1 $17,175.54 $3,994.83
</TABLE>
Values shown on these illustrations are based on a specified amount of
$200,000 and 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 0.8% of gross premiums in all policy years.
2. A sales charge on the gross premiums. The sales charges equal 6% of
each premium dollar paid up to the Target Premium in years 1-10, 3% of
premium paid in excess of Target Premium in years 1-10, and 3% of all
premiums after the tenth Policy year.
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.
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 ("current charges" for the first year) 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.
D-3
<PAGE> 125
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,000 0 877 200,000 0 877 200,000
5 1,302 3,441 4,223 200,000 3,441 4,223 200,000 3,493 4,274 200,000
10 1,302 7,822 7,952 200,000 7,822 7,952 200,000 8,106 8,236 200,000
20 1,302 14,448 14,448 200,000 14,448 14,448 200,000 16,065 16,065 200,000
@ Age 70 1,302 12,909 12,909 200,000 12,909 12,909 200,000 17,457 17,457 200,000
@ Age 85 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 31 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 0.00%.
*** Policy lapses in policy year 37 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-4
<PAGE> 126
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,000 0 877 200,000 0 877 200,000
2 1,302 565 1,737 200,000 565 1,737 200,000 571 1,743 200,000
3 1,302 1,540 2,582 200,000 1,540 2,582 200,000 1,556 2,598 200,000
4 1,302 2,500 3,411 200,000 2,500 3,411 200,000 2,530 3,442 200,000
5 1,302 3,441 4,223 200,000 3,441 4,223 200,000 3,493 4,274 200,000
6 1,302 4,364 5,016 200,000 4,364 5,016 200,000 4,443 5,094 200,000
7 1,302 5,267 5,788 200,000 5,267 5,788 200,000 5,381 5,901 200,000
8 1,302 6,146 6,536 200,000 6,146 6,536 200,000 6,304 6,695 200,000
9 1,302 6,999 7,259 200,000 6,999 7,259 200,000 7,213 7,474 200,000
10 1,302 7,822 7,952 200,000 7,822 7,952 200,000 8,106 8,236 200,000
11 1,302 8,866 8,866 200,000 8,866 8,866 200,000 9,232 9,232 200,000
12 1,302 9,739 9,739 200,000 9,739 9,739 200,000 10,202 10,202 200,000
13 1,302 10,568 10,568 200,000 10,568 10,568 200,000 11,144 11,144 200,000
14 1,302 11,349 11,349 200,000 11,349 11,349 200,000 12,037 12,037 200,000
15 1,302 12,073 12,073 200,000 12,073 12,073 200,000 12,869 12,869 200,000
16 1,302 12,733 12,733 200,000 12,733 12,733 200,000 13,644 13,644 200,000
17 1,302 13,318 13,318 200,000 13,318 13,318 200,000 14,354 14,354 200,000
18 1,302 13,812 13,812 200,000 13,812 13,812 200,000 14,992 14,992 200,000
19 1,302 14,195 14,195 200,000 14,195 14,195 200,000 15,555 15,555 200,000
20 1,302 14,448 14,448 200,000 14,448 14,448 200,000 16,065 16,065 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-5
<PAGE> 127
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,549 14,549 200,000 14,549 14,549 200,000 16,527 16,527 200,000
22 1,302 14,473 14,473 200,000 14,473 14,473 200,000 16,906 16,906 200,000
23 1,302 14,196 14,196 200,000 14,196 14,196 200,000 17,185 17,185 200,000
24 1,302 13,688 13,688 200,000 13,688 13,688 200,000 17,370 17,370 200,000
25 1,302 12,909 12,909 200,000 12,909 12,909 200,000 17,457 17,457 200,000
26 1,302 11,805 11,805 200,000 11,805 11,805 200,000 17,424 17,424 200,000
27 1,302 10,301 10,301 200,000 10,301 10,301 200,000 17,255 17,255 200,000
28 1,302 8,297 8,297 200,000 8,297 8,297 200,000 16,927 16,927 200,000
29 1,302 5,672 5,672 200,000 5,672 5,672 200,000 16,379 16,379 200,000
30 1,302 2,285 2,285 200,000 2,285 2,285 200,000 15,566 15,566 200,000
31 1,302 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 14,433 14,433 200,000
32 1,302 12,916 12,916 200,000
33 1,302 10,935 10,935 200,000
34 1,302 8,393 8,393 200,000
35 1,302 5,178 5,178 200,000
36 1,302 1,149 1,149 200,000
37 1,302 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-6
<PAGE> 128
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,000 0 938 200,000 0 938 200,000
5 1,302 3,441 4,223 200,000 4,319 5,101 200,000 4,375 5,157 200,000
10 1,302 7,822 7,952 200,000 11,144 11,274 200,000 11,478 11,609 200,000
20 1,302 14,448 14,448 200,000 29,132 29,132 200,000 31,348 31,348 200,000
@ Age 70 1,302 12,909 12,909 200,000 37,184 37,184 200,000 43,079 43,079 200,000
@ Age 85 1,302 0 0 0 0 0 0 59,916 59,916 200,000
@ Age 90 1,302 0 0 0 0 0 0 7,377 7,377 200,000
</TABLE>
* Policy lapses in policy year 31 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 37 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-7
<PAGE> 129
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,000 0 938 200,000 0 938 200,000
2 1,302 565 1,737 200,000 743 1,915 200,000 749 1,921 200,000
3 1,302 1,540 2,582 200,000 1,892 2,934 200,000 1,909 2,951 200,000
4 1,302 2,500 3,411 200,000 3,084 3,996 200,000 3,117 4,028 200,000
5 1,302 3,441 4,223 200,000 4,319 5,101 200,000 4,375 5,157 200,000
6 1,302 4,364 5,016 200,000 5,598 6,249 200,000 5,686 6,337 200,000
7 1,302 5,267 5,788 200,000 6,921 7,442 200,000 7,050 7,570 200,000
8 1,302 6,146 6,536 200,000 8,287 8,677 200,000 8,469 8,859 200,000
9 1,302 6,999 7,259 200,000 9,695 9,955 200,000 9,945 10,205 200,000
10 1,302 7,822 7,952 200,000 11,144 11,274 200,000 11,478 11,609 200,000
11 1,302 8,866 8,866 200,000 12,894 12,894 200,000 13,332 13,332 200,000
12 1,302 9,739 9,739 200,000 14,564 14,564 200,000 15,125 15,125 200,000
13 1,302 10,568 10,568 200,000 16,281 16,281 200,000 16,987 16,987 200,000
14 1,302 11,349 11,349 200,000 18,044 18,044 200,000 18,903 18,903 200,000
15 1,302 12,073 12,073 200,000 19,846 19,846 200,000 20,862 20,862 200,000
16 1,302 12,733 12,733 200,000 21,683 21,683 200,000 22,871 22,871 200,000
17 1,302 13,318 13,318 200,000 23,545 23,545 200,000 24,925 24,925 200,000
18 1,302 13,812 13,812 200,000 25,419 25,419 200,000 27,017 27,017 200,000
19 1,302 14,195 14,195 200,000 27,288 27,288 200,000 29,151 29,151 200,000
20 1,302 14,448 14,448 200,000 29,132 29,132 200,000 31,348 31,348 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-8
<PAGE> 130
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,549 14,549 200,000 30,932 30,932 200,000 33,616 33,616 200,000
22 1,302 14,473 14,473 200,000 32,663 32,663 200,000 35,928 35,928 200,000
23 1,302 14,196 14,196 200,000 34,303 34,303 200,000 38,272 38,272 200,000
24 1,302 13,688 13,688 200,000 35,823 35,823 200,000 40,655 40,655 200,000
25 1,302 12,909 12,909 200,000 37,184 37,184 200,000 43,079 43,079 200,000
26 1,302 11,805 11,805 200,000 38,334 38,334 200,000 45,528 45,528 200,000
27 1,302 10,301 10,301 200,000 39,202 39,202 200,000 47,993 47,993 200,000
28 1,302 8,297 8,297 200,000 39,693 39,693 200,000 50,458 50,458 200,000
29 1,302 5,672 5,672 200,000 39,693 39,693 200,000 52,877 52,877 200,000
30 1,302 2,285 2,285 200,000 39,068 39,068 200,000 55,217 55,217 200,000
31 1,302 LAPSED LAPSED LAPSED 37,663 37,663 200,000 57,439 57,439 200,000
32 1,302 35,302 35,302 200,000 59,495 59,495 200,000
33 1,302 31,774 31,774 200,000 61,329 61,329 200,000
34 1,302 26,811 26,811 200,000 62,872 62,872 200,000
35 1,302 20,054 20,054 200,000 64,046 64,046 200,000
36 1,302 11,004 11,004 200,000 64,753 64,753 200,000
37 1,302 LAPSED LAPSED LAPSED 64,888 64,888 200,000
38 1,302 64,319 64,319 200,000
39 1,302 62,768 62,768 200,000
40 1,302 59,916 59,916 200,000
41 1,302 55,445 55,445 200,000
42 1,302 48,828 48,828 200,000
43 1,302 39,385 39,385 200,000
44 1,302 26,038 26,038 200,000
45 1,302 7,377 7,377 200,000
46 1,302 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-9
<PAGE> 131
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,000 0 1,000 200,000 0 1,000 200,000
5 1,302 3,441 4,223 200,000 5,351 6,132 200,000 5,412 6,193 200,000
10 1,302 7,822 7,952 200,000 15,935 16,066 200,000 16,332 16,462 200,000
20 1,302 14,448 14,448 200,000 61,564 61,564 200,000 64,690 64,690 200,000
@ Age 70 1,302 12,909 12,909 200,000 105,863 105,863 200,000 113,600 113,600 200,000
@ Age 85 1,302 0 0 0 508,733 508,733 534,170 563,587 563,587 591,767
@ Age 90 1,302 0 0 0 828,475 828,475 869,899 933,289 933,289 979,954
</TABLE>
* Policy lapses in policy year 31 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-10
<PAGE> 132
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,000 0 1,000 200,000 0 1,000 200,000
2 1,302 565 1,737 200,000 929 2,101 200,000 935 2,107 200,000
3 1,302 1,540 2,582 200,000 2,274 3,316 200,000 2,292 3,334 200,000
4 1,302 2,500 3,411 200,000 3,744 4,656 200,000 3,779 4,691 200,000
5 1,302 3,441 4,223 200,000 5,351 6,132 200,000 5,412 6,193 200,000
6 1,302 4,364 5,016 200,000 7,108 7,759 200,000 7,205 7,856 200,000
7 1,302 5,267 5,788 200,000 9,028 9,549 200,000 9,174 9,695 200,000
8 1,302 6,146 6,536 200,000 11,129 11,519 200,000 11,338 11,729 200,000
9 1,302 6,999 7,259 200,000 13,425 13,685 200,000 13,717 13,977 200,000
10 1,302 7,822 7,952 200,000 15,935 16,066 200,000 16,332 16,462 200,000
11 1,302 8,866 8,866 200,000 18,951 18,951 200,000 19,477 19,477 200,000
12 1,302 9,739 9,739 200,000 22,121 22,121 200,000 22,807 22,807 200,000
13 1,302 10,568 10,568 200,000 25,604 25,604 200,000 26,479 26,479 200,000
14 1,302 11,349 11,349 200,000 29,430 29,430 200,000 30,516 30,516 200,000
15 1,302 12,073 12,073 200,000 33,631 33,631 200,000 34,945 34,945 200,000
16 1,302 12,733 12,733 200,000 38,241 38,241 200,000 39,814 39,814 200,000
17 1,302 13,318 13,318 200,000 43,298 43,298 200,000 45,166 45,166 200,000
18 1,302 13,812 13,812 200,000 48,842 48,842 200,000 51,051 51,051 200,000
19 1,302 14,195 14,195 200,000 54,914 54,914 200,000 57,530 57,530 200,000
20 1,302 14,448 14,448 200,000 61,564 61,564 200,000 64,690 64,690 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-11
<PAGE> 133
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,549 14,549 200,000 68,849 68,849 200,000 72,614 72,614 200,000
22 1,302 14,473 14,473 200,000 76,835 76,835 200,000 81,365 81,365 200,000
23 1,302 14,196 14,196 200,000 85,603 85,603 200,000 91,034 91,034 200,000
24 1,302 13,688 13,688 200,000 95,243 95,243 200,000 101,737 101,737 200,000
25 1,302 12,909 12,909 200,000 105,863 105,863 200,000 113,600 113,600 200,000
26 1,302 11,805 11,805 200,000 117,586 117,586 200,000 126,758 126,758 200,000
27 1,302 10,301 10,301 200,000 130,560 130,560 200,000 141,373 141,373 200,000
28 1,302 8,297 8,297 200,000 144,964 144,964 200,000 157,628 157,628 200,000
29 1,302 5,672 5,672 200,000 161,033 161,033 200,000 175,732 175,732 200,000
30 1,302 2,285 2,285 200,000 179,074 179,074 200,000 195,930 195,930 209,645
31 1,302 LAPSED LAPSED LAPSED 199,441 199,441 209,413 218,367 218,367 229,285
32 1,302 222,041 222,041 233,143 243,205 243,205 255,365
33 1,302 246,995 246,995 259,345 270,692 270,692 284,226
34 1,302 274,530 274,530 288,256 301,102 301,102 316,157
35 1,302 304,891 304,891 320,136 334,732 334,732 351,469
36 1,302 338,341 338,341 355,258 371,909 371,909 390,505
37 1,302 375,155 375,155 393,913 412,988 412,988 433,638
38 1,302 415,621 415,621 436,402 458,356 458,356 481,274
39 1,302 460,041 460,041 483,043 508,412 508,412 533,833
40 1,302 508,733 508,733 534,170 563,587 563,587 591,767
41 1,302 562,031 562,031 590,133 624,354 624,354 655,572
42 1,302 620,284 620,284 651,298 691,196 691,196 725,756
43 1,302 683,857 683,857 718,050 764,625 764,625 802,856
44 1,302 753,127 753,127 790,784 845,144 845,144 887,402
45 1,302 828,475 828,475 869,899 933,289 933,289 979,954
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-12
<PAGE> 134
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 1,302 910,274 910,274 955,788 1,029,604 1,029,604 1,081,085
47 1,302 1,001,353 1,001,353 1,041,407 1,136,366 1,136,366 1,181,821
48 1,302 1,103,337 1,103,337 1,136,437 1,255,219 1,255,219 1,292,876
49 1,302 1,218,269 1,218,269 1,242,634 1,388,349 1,388,349 1,416,116
50 1,302 1,348,831 1,348,831 1,362,320 1,538,280 1,538,280 1,553,663
51 1,302 1,492,603 1,492,603 1,507,529 1,704,010 1,704,010 1,721,051
52 1,302 1,650,307 1,650,307 1,666,810 1,887,090 1,887,090 1,905,961
53 1,302 1,821,706 1,821,706 1,839,923 2,089,381 2,089,381 2,110,275
54 1,302 2,008,142 2,008,142 2,028,224 2,312,850 2,312,850 2,335,978
55 1,302 2,213,529 2,213,529 2,235,665 2,559,666 2,559,666 2,585,263
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-13
<PAGE> 135
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,902 0 1,419 200,000 0 1,419 200,000 0 1,419 200,000
5 1,902 5,613 6,755 200,000 5,613 6,755 200,000 5,694 6,835 200,000
10 1,902 12,203 12,393 200,000 12,203 12,393 200,000 12,544 12,734 200,000
20 1,902 18,907 18,907 200,000 18,907 18,907 200,000 20,182 20,182 200,000
@ Age 70 1,902 13,301 13,301 200,000 13,301 13,301 200,000 17,641 17,641 200,000
@ Age 85 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 29 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 29 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
------------------------------------------------------
-------------------------
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-14
<PAGE> 136
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,902 0 1,419 200,000 0 1,419 200,000 0 1,419 200,000
2 1,902 1,092 2,804 200,000 1,092 2,804 200,000 1,104 2,816 200,000
3 1,902 2,636 4,157 200,000 2,636 4,157 200,000 2,666 4,187 200,000
4 1,902 4,144 5,475 200,000 4,144 5,475 200,000 4,197 5,528 200,000
5 1,902 5,613 6,755 200,000 5,613 6,755 200,000 5,694 6,835 200,000
6 1,902 7,040 7,991 200,000 7,040 7,991 200,000 7,153 8,104 200,000
7 1,902 8,419 9,180 200,000 8,149 9,180 200,000 8,573 9,334 200,000
8 1,902 9,745 10,315 200,000 9,745 10,315 200,000 9,948 10,519 200,000
9 1,902 11,008 11,389 200,000 11,088 11,389 200,000 11,274 11,654 200,000
10 1,902 12,203 12,393 200,000 12,203 12,393 200,000 12,544 12,734 200,000
11 1,902 13,591 13,591 200,000 13,591 13,591 200,000 14,013 14,013 200,000
12 1,902 14,701 14,701 200,000 14,701 14,701 200,000 15,210 15,210 200,000
13 1,902 15,715 15,715 200,000 15,715 15,715 200,000 16,312 16,312 200,000
14 1,902 16,625 16,625 200,000 16,625 16,625 200,000 17,288 17,288 200,000
15 1,932 17,420 17,420 200,000 17,420 17,420 200,000 18,150 18,150 200,000
16 1,902 18,085 18,085 200,000 18,085 18,085 200,000 18,882 18,882 200,000
17 1,902 18,597 18,597 200,000 18,597 18,597 200,000 19,465 19,465 200,000
18 1,902 18,927 18,927 200,000 18,927 18,927 200,000 19,878 19,878 200,000
19 1,902 19,043 19,043 200,000 19,043 19,043 200,000 20,122 20,122 200,000
20 1,902 18,907 18,907 200,000 18,907 18,907 200,000 20,182 20,182 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-15
<PAGE> 137
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,902 18,488 18,488 200,000 18,488 18,488 200,000 20,134 20,134 200,000
22 1,902 17,751 17,751 200,000 17,751 17,751 200,000 19,850 19,850 200,000
23 1,902 16,669 16,669 200,000 16,669 16,669 200,000 19,348 19,348 200,000
24 1,902 15,203 15,203 200,000 15,203 15,203 200,000 18,620 18,620 200,000
25 1,902 13,301 13,301 200,000 13,301 13,301 200,000 17,641 17,641 200,000
26 1,902 10,885 10,885 200,000 10,885 10,885 200,000 16,358 16,358 200,000
27 1,902 7,840 7,840 200,000 7,840 7,840 200,000 14,766 14,766 200,000
28 1,902 4,018 4,018 200,000 4,018 4,018 200,000 12,809 12,809 200,000
29 1,902 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 10,332 10,332 200,000
30 1,902 7,232 7,232 200,000
31 1,902 3,401 3,401 200,000
32 1,902 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-16
<PAGE> 138
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,902 0 1,419 200,000 0 1,513 200,000 0 1,513 200,000
5 1,902 5,613 6,755 200,000 6,998 8,140 200,000 7,087 8,228 200,000
10 1,902 12,203 12,393 200,000 17,438 17,629 200,000 17,846 18,037 200,000
20 1,902 18,907 18,907 200,000 41,269 41,269 200,000 43,118 43,118 200,000
@ Age 70 1,902 13,301 13,301 200,000 49,960 49,960 200,000 55,345 55,345 200,000
@ Age 85 1,902 0 0 0 0 0 0 30,891 30,891 200,000
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 29 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 37 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 42 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
------------------------------------------------------
-------------------------
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-17
<PAGE> 139
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,902 0 1,419 200,000 0 1,513 200,000 0 1,513 200,000
2 1,902 1,092 2,804 200,000 1,370 3,082 200,000 1,383 3,094 200,000
3 1,902 2,636 4,157 200,000 3,188 4,709 200,000 3,219 4,741 200,000
4 1,902 4,144 5,475 200,000 5,064 6,396 200,000 5,121 6,453 200,000
5 1,902 5,613 6,755 200,000 6,998 8,140 200,000 7,087 8,228 200,000
6 1,902 7,040 7,991 200,000 8,989 9,940 200,000 9,116 10,067 200,000
7 1,902 8,419 9,180 200,000 11,032 11,793 200,000 11,209 11,970 200,000
8 1,902 9,745 10,315 200,000 13,126 13,696 200,000 13,363 13,933 200,000
9 1,902 11,008 11,389 200,000 15,263 15,643 200,000 15,577 15,957 200,000
10 1,902 12,203 12,393 200,000 17,438 17,629 200,000 17,846 18,037 200,000
11 1,902 13,591 13,591 200,000 19,928 19,928 200,000 20,441 20,441 200,000
12 1,902 14,701 14,701 200,000 22,267 22,267 200,000 22,897 22,897 200,000
13 1,902 15,715 15,715 200,000 24,642 24,642 200,000 25,394 25,394 200,000
14 1,902 16,625 16,625 200,000 27,046 27,046 200,000 27,907 27,907 200,000
15 1,902 17,420 17,420 200,000 29,471 29,471 200,000 30,446 30,446 200,000
16 1,902 18,085 18,085 200,000 31,904 31,904 200,000 33,001 33,001 200,000
17 1,902 18,597 18,597 200,000 34,328 34,328 200,000 35,556 35,556 200,000
18 1,902 18,927 18,927 200,000 36,717 36,717 200,000 38,094 38,094 200,000
19 1,902 19,043 19,043 200,000 39,041 39,041 200,000 40,618 40,618 200,000
20 1,902 18,907 18,907 200,000 41,269 41,269 200,000 43,118 43,118 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-18
<PAGE> 140
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,902 18,488 18,488 200,000 43,373 43,373 200,000 45,664 45,664 200,000
22 1,902 17,751 17,751 200,000 45,322 45,322 200,000 48,151 48,151 200,000
23 1,902 16,669 16,669 200,000 47,093 47,093 200,000 50,596 50,596 200,000
24 1,902 15,203 15,203 200,000 48,654 48,654 200,000 52,999 52,999 200,000
25 1,902 13,301 13,301 200,000 49,960 49,960 200,000 55,345 55,345 200,000
26 1,902 10,885 10,885 200,000 50,946 50,946 200,000 57,595 57,595 200,000
27 1,902 7,840 7,840 200,000 51,516 51,516 200,000 59,752 59,752 200,000
28 1,902 4,018 4,018 200,000 51,550 51,550 200,000 61,781 61,781 200,000
29 1,902 LAPSED LAPSED LAPSED 50,901 50,901 200,000 63,569 63,569 200,000
30 1,902 49,398 49,398 200,000 65,051 65,051 200,000
31 1,902 46,849 46,849 200,000 66,156 66,156 200,000
32 1,902 43,036 43,036 200,000 66,774 66,774 200,000
33 1,902 37,706 37,706 200,000 66,783 66,783 200,000
34 1,902 30,529 30,529 200,000 66,034 66,034 200,000
35 1,902 21,055 21,055 200,000 64,346 64,346 200,000
36 1,902 8,651 8,651 200,000 61,527 61,527 200,000
37 1,902 LAPSED LAPSED LAPSED 57,282 57,282 200,000
38 1,902 51,262 51,262 200,000
39 1,902 42,762 42,762 200,000
40 1,902 30,891 30,891 200,000
41 1,902 14,785 14,785 200,000
42 1,902 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-19
<PAGE> 141
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,902 0 1,419 200,000 0 1,608 200,000 0 1,608 200,000
5 1,902 5,613 6,755 200,000 8,624 9,765 200,000 8,722 9,863 200,000
10 1,902 12,203 12,393 200,000 24,996 25,186 200,000 25,487 25,677 200,000
20 1,902 18,907 18,907 200,000 91,862 91,862 200,000 94,647 94,647 200,000
@ Age 70 1,902 13,301 13,301 200,000 158,627 158,627 200,000 165,163 165,163 200,000
@ Age 85 1,902 0 0 0 768,894 768,894 807,339 811,237 811,237 851,799
@ Age 90 1,902 0 0 0 1,246,906 1,246,906 1,309,251 1,326,772 1,326,772 1,393,111
</TABLE>
* Policy lapses in policy year 29 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
------------------------------------------------------
-------------------------
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-20
<PAGE> 142
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,902 0 1,419 200,000 0 1,608 200,000 0 1,608 200,000
2 1,902 1,092 2,804 200,000 1,659 3,371 200,000 1,672 3,384 200,000
3 1,902 2,636 4,157 200,000 3,786 5,308 200,000 3,820 5,341 200,000
4 1,902 4,144 5,475 200,000 6,102 7,434 200,000 6,164 7,495 200,000
5 1,902 5,613 6,755 200,000 8,624 9,765 200,000 8,722 9,863 200,000
6 1,902 7,040 7,991 200,000 11,370 12,321 200,000 11,514 12,465 200,000
7 1,902 8,419 9,180 200,000 14,359 15,120 200,000 14,561 15,322 200,000
8 1,902 9,745 10,315 200,000 17,612 18,182 200,000 17,889 18,459 200,000
9 1,902 11,008 11,389 200,000 21,149 21,529 200,000 21,521 21,902 200,000
10 1,902 12,203 12,393 200,000 24,996 25,186 200,000 25,487 25,677 200,000
11 1,902 13,591 13,591 200,000 29,471 29,471 200,000 30,100 30,100 200,000
12 1,902 14,701 14,701 200,000 34,157 34,157 200,000 34,942 34,942 200,000
13 1,902 15,715 15,715 200,000 39,283 39,283 200,000 40,242 40,242 200,000
14 1,902 16,625 16,625 200,000 44,894 44,894 200,000 46,025 46,025 200,000
15 1,902 17,420 17,420 200,000 51,039 51,039 200,000 52,362 52,362 200,000
16 1,902 18,085 18,085 200,000 57,773 57,773 200,000 59,308 59,308 200,000
17 1,902 18,597 18,597 200,000 65,153 65,153 200,000 66,924 66,924 200,000
18 1,902 18,927 18,927 200,000 73,243 73,243 200,000 75,285 75,285 200,000
19 1,902 19,043 19,043 200,000 82,116 82,116 200,000 84,490 84,490 200,000
20 1,902 18,907 18,907 200,000 91,862 91,862 200,000 94,647 94,647 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-21
<PAGE> 143
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,902 18,488 18,488 200,000 102,594 102,594 200,000 105,934 105,934 200,000
22 1,902 17,751 17,751 200,000 114,449 114,449 200,000 118,432 118,432 200,000
23 1,902 16,669 16,669 200,000 127,598 127,598 200,000 132,329 132,329 200,000
24 1,902 15,203 15,203 200,000 142,244 142,244 200,000 147,829 147,829 200,000
25 1,902 13,301 13,301 200,000 158,627 158,627 200,000 165,163 165,163 200,000
26 1,902 10,885 10,885 200,000 177,040 177,040 203,596 184,554 184,554 212,238
27 1,902 7,840 7,840 200,000 197,558 197,558 223,240 206,057 206,057 232,845
28 1,902 4,018 4,018 200,000 220,253 220,253 244,480 229,876 229,876 255,162
29 1,902 LAPSED LAPSED LAPSED 245,381 245,381 267,466 256,266 256,266 279,330
30 1,902 273,246 273,246 292,374 285,532 285,532 305,519
31 1,902 304,209 304,209 319,420 318,030 318,030 333,931
32 1,902 338,367 338,367 355,285 353,941 353,941 371,638
33 1,902 376,028 376,028 394,289 393,605 393,605 413,286
34 1,902 417,529 417,529 438,406 437,390 437,390 459,260
35 1,902 463,231 463,231 486,393 485,696 485,696 509,980
36 1,902 513,517 513,517 539,193 538,958 538,958 565,905
37 1,902 568,792 568,792 597,232 597,641 597,641 627,523
38 1,902 629,481 629,481 660,955 662,250 662,250 695,363
39 1,902 696,024 696,024 730,825 733,276 733,276 769,940
40 1,902 768,894 768,894 807,339 811,237 811,237 851,799
41 1,902 848,599 848,599 891,029 896,751 896,751 941,589
42 1,902 935,677 935,677 982,460 990,366 990,366 1,039,885
43 1,902 1,030,692 1,030,692 1,082,227 1,092,827 1,092,827 1,147,469
44 1,902 1,134,230 1,134,230 1,190,942 1,204,734 1,204,734 1,264,971
45 1,902 1,246,906 1,246,906 1,309,251 1,326,772 1,326,772 1,393,111
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-22
<PAGE> 144
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 1,902 1,369,286 1,369,286 1,437,751 1,459,781 1,459,781 1,532,770
47 1,902 1,505,803 1,505,803 1,566,035 1,607,809 1,607,809 1,672,122
48 1,902 1,658,891 1,658,891 1,708,658 1,773,391 1,773,391 1,826,592
49 1,902 1,831,589 1,831,589 1,868,220 1,959,900 1,959,900 1,999,098
50 1,902 2,027,858 2,027,858 2,048,136 2,171,022 2,171,022 2,192,733
51 1,902 2,243,989 2,243,989 2,266,429 2,404,465 2,404,465 2,428,510
52 1,902 2,481,065 2,481,065 2,505,876 2,662,562 2,662,562 2,689,188
53 1,902 2,738,728 2,738,728 2,766,115 2,947,878 2,947,878 2,977,357
54 1,902 3,019,003 3,019,003 3,049,193 3,263,224 3,263,224 3,295,856
55 1,902 3,327,767 3,327,767 3,361,045 3,611,685 3,611,685 3,647,802
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Smoker Standard Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form #B1-98
Specified Amount for Option 1
Initial Modal Premium: $1,902.03-Premium Mode:
Annual-Riders: None
D-23
<PAGE> 145
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,877 0 877 200,877 0 877 200,877
5 1,302 3,440 4,222 204,222 3,440 4,222 204,222 3,492 4,274 204,274
10 1,302 7,809 7,939 207,939 7,809 7,939 207,939 8,102 8,232 208,232
20 1,302 14,189 14,189 214,189 14,189 14,189 214,189 15,897 15,897 215,897
@ Age 70 1,302 12,165 12,165 212,165 12,165 12,165 212,165 16,979 16,979 216,979
@ Age 85 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 31 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 0.00%.
*** Policy lapses in policy year 36 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-24
<PAGE> 146
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,877 0 877 200,877 0 877 200,877
2 1,302 565 1,737 201,737 565 1,737 201,737 571 1,743 201,743
3 1,302 1,540 2,582 202,582 1,540 2,582 202,582 1,556 2,598 202,598
4 1,302 2,499 3,411 203,411 2,499 3,411 203,411 2,530 3,442 203,442
5 1,302 3,440 4,222 204,222 3,440 4,222 204,222 3,492 4,274 204,274
6 1,302 4,362 5,013 205,013 4,362 5,013 205,013 4,442 5,094 205,094
7 1,302 5,263 5,784 205,784 5,263 5,784 205,784 5,380 5,901 205,901
8 1,302 6,140 6,530 206,530 6,140 6,530 206,530 6,303 6,693 206,693
9 1,302 6,989 7,250 207,250 6,989 7,250 207,250 7,211 7,471 207,471
10 1,302 7,809 7,939 207,939 7,809 7,939 207,939 8,102 8,232 208,232
11 1,302 8,846 8,846 208,846 8,846 8,846 208,846 9,226 9,226 209,226
12 1,302 9,711 9,711 209,711 9,711 9,711 209,711 10,193 10,193 210,193
13 1,302 10,530 10,530 210,530 10,530 10,530 210,530 11,130 11,130 211,130
14 1,302 11,296 11,296 211,296 11,296 11,296 211,296 12,015 12,015 212,015
15 1,302 12,003 12,003 212,003 12,003 12,003 212,003 12,836 12,836 212,836
16 1,302 12,640 12,640 212,640 12,640 12,640 212,640 13,595 13,595 213,595
17 1,302 13,196 13,196 213,196 13,196 13,196 213,196 14,285 14,285 214,285
18 1,302 13,654 13,654 213,654 13,654 13,654 213,654 14,896 14,896 214,896
19 1,302 13,992 13,992 213,992 13,992 13,992 213,992 15,425 15,425 215,425
20 1,302 14,189 14,189 214,189 14,189 14,189 214,189 15,897 15,897 215,897
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-25
<PAGE> 147
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,220 14,220 214,220 14,220 14,220 214,220 16,314 16,314 216,314
22 1,302 14,062 14,062 214,062 14,062 14,062 214,062 16,642 16,642 216,642
23 1,302 13,688 13,688 213,688 13,688 13,688 213,688 16,859 16,859 216,859
24 1,302 13,069 13,069 213,069 13,069 13,069 213,069 16,973 16,973 216,973
25 1,302 12,165 12,165 212,165 12,165 12,165 212,165 16,979 16,979 216,979
26 1,302 10,923 10,923 210,923 10,923 10,923 210,923 16,855 16,855 216,855
27 1,302 9,271 9,271 209,271 9,271 9,271 209,271 16,583 16,583 216,583
28 1,302 7,119 7,119 207,119 7,119 7,119 207,119 16,138 16,138 216,138
29 1,302 4,358 4,358 204,358 4,358 4,358 204,358 15,457 15,457 215,457
30 1,302 876 876 200,876 876 876 200,876 14,494 14,494 214,494
31 1,302 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 13,194 13,194 213,194
32 1,302 11,497 11,497 211,497
33 1,302 9,330 9,330 209,330
34 1,302 6,610 6,610 206,610
35 1,302 3,247 3,247 203,247
36 1,302 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-26
<PAGE> 148
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,877 0 938 200,938 0 938 200,938
5 1,302 3,440 4,222 204,222 4,318 5,099 205,099 4,375 5,156 205,156
10 1,302 7,809 7,939 207,939 11,124 11,254 211,254 11,472 11,603 211,603
20 1,302 14,189 14,189 214,189 28,583 28,583 228,583 31,003 31,003 231,003
@ Age 70 1,302 12,165 12,165 212,165 35,155 35,155 235,155 41,856 41,856 241,856
@ Age 85 1,302 0 0 0 0 0 0 33,739 33,739 233,739
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 31 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 43 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-27
<PAGE> 149
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,877 0 938 200,938 0 938 200,938
2 1,302 565 1,737 201,737 743 1,915 201,915 749 1,921 201,921
3 1,302 1,540 2,582 202,582 1,892 2,934 202,934 1,909 2,951 201,951
4 1,302 2,499 3,411 203,411 3,083 3,995 203,995 3,117 4,028 204,028
5 1,302 3,440 4,222 204,222 4,318 5,099 205,099 4,375 5,156 205,156
6 1,302 4,362 5,013 205,013 5,595 6,246 206,246 5,685 6,336 206,336
7 1,302 5,263 5,784 205,784 6,916 7,437 207,437 7,048 7,569 207,569
8 1,302 6,140 6,530 206,530 8,279 8,669 208,669 8,467 8,857 208,857
9 1,302 6,989 7,250 207,250 9,682 9,942 209,942 9,941 10,202 210,202
10 1,302 7,809 7,939 207,939 11,124 11,254 211,254 11,472 11,603 211,603
11 1,302 8,846 8,846 208,846 12,864 12,864 212,864 13,323 13,323 213,323
12 1,302 9,711 9,711 209,711 14,520 14,520 214,520 15,111 15,111 215,111
13 1,302 10,530 10,530 210,530 16,219 16,219 216,219 16,965 16,965 216,965
14 1,302 11,296 11,296 211,296 17,955 17,955 217,955 18,868 18,868 218,868
15 1,302 12,003 12,003 212,003 19,723 19,723 219,723 20,807 20,807 220,807
16 1,302 12,640 12,640 212,640 21,515 21,515 221,515 22,786 22,786 222,786
17 1,302 13,196 13,196 213,196 23,316 23,316 223,316 24,799 24,799 224,799
18 1,302 13,654 13,654 213,654 25,110 25,110 225,110 26,836 26,836 226,836
19 1,302 13,992 13,992 213,992 26,875 26,875 226,875 28,896 28,896 228,896
20 1,302 14,189 14,189 214,189 28,583 28,583 228,583 31,003 31,003 231,003
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-28
<PAGE> 150
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,220 14,220 214,220 30,206 30,206 230,206 33,162 33,162 233,162
22 1,302 14,062 14,062 214,062 31,173 31,173 231,713 35,338 35,338 235,338
23 1,302 13,688 13,688 213,688 33,069 33,069 233,069 37,511 37,511 237,511
24 1,302 13,069 13,069 213,069 34,234 34,234 234,234 39,684 39,684 239,684
25 1,302 12,165 12,165 212,165 35,155 35,155 235,155 41,856 41,856 241,856
26 1,302 10,923 10,923 210,923 35,762 35,762 235,762 43,997 43,997 243,997
27 1,302 9,271 9,271 209,271 35,963 35,963 235,963 46,091 46,091 246,091
28 1,302 7,119 7,119 207,119 35,637 35,637 235,637 48,105 48,105 248,105
29 1,302 4,358 4,358 204,358 34,644 34,644 234,644 49,968 49,968 249,968
30 1,302 876 876 200,876 32,827 32,827 232,827 51,624 51,624 251,624
31 1,302 LAPSED LAPSED LAPSED 30,018 30,018 230,018 53,002 53,002 253,002
32 1,302 26,044 26,044 226,044 54,024 54,024 254,024
33 1,302 20,721 20,721 220,721 54,591 54,591 254,591
34 1,302 13,842 13,842 213,842 54,592 54,592 254,592
35 1,302 5,156 5,156 205,156 53,898 53,898 253,898
36 1,302 LAPSED LAPSED LAPSED 52,361 52,361 252,361
37 1,302 49,827 49,827 249,827
38 1,302 46,122 46,122 246,122
39 1,302 40,881 40,881 240,881
40 1,302 33,739 33,739 233,739
41 1,302 24,415 24,415 224,415
42 1,302 12,457 12,457 212,457
43 1,302 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-29
<PAGE> 151
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 1,302 0 877 200,877 0 1,000 201,000 0 1,000 201,000
5 1,302 3,440 4,222 204,222 5,349 6,130 206,130 5,412 6,193 206,193
10 1,302 7,809 7,939 207,939 15,906 16,036 216,036 16,323 16,453 216,453
20 1,302 14,189 14,189 214,189 60,361 60,361 260,361 63,952 63,952 263,952
@ Age 70 1,302 12,165 12,165 212,165 100,165 100,165 300,165 110,294 110,294 310,294
@ Age 85 1,302 0 0 0 268,553 268,553 468,553 453,712 453,712 653,712
@ Age 90 1,302 0 0 0 252,651 252,651 452,651 661,542 661,542 861,542
</TABLE>
* Policy lapses in policy year 31 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 51 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
------------------------------------------------------
-------------------------
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-30
<PAGE> 152
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,302 0 877 200,877 0 1,000 201,000 0 1,000 201,000
2 1,302 565 1,737 201,737 929 2,101 202,101 935 2,107 202,107
3 1,302 1,540 2,582 202,582 2,274 3,316 203,316 2,292 3,334 203,334
4 1,302 2,499 3,411 203,411 3,743 4,655 204,655 3,779 4,691 204,691
5 1,302 3,440 4,222 204,222 5,349 6,130 206,130 5,412 6,193 206,193
6 1,302 4,362 5,013 205,013 7,104 7,755 207,755 7,204 7,855 207,855
7 1,302 5,263 5,784 205,784 9,022 9,543 209,543 9,172 9,693 209,693
8 1,302 6,140 6,530 206,530 11,118 11,508 211,508 11,335 11,726 211,726
9 1,302 6,989 7,250 207,250 13,407 13,667 213,667 13,712 13,972 213,972
10 1,302 7,809 7,939 207,939 15,906 16,036 216,036 16,323 16,453 216,453
11 1,302 8,846 8,846 208,846 18,906 18,906 218,906 19,463 19,463 219,463
12 1,302 9,711 9,711 209,711 22,052 22,052 222,052 22,784 22,784 222,784
13 1,302 10,530 10,530 210,530 25,501 25,501 225,501 26,443 26,443 226,443
14 1,302 11,296 11,296 211,296 29,279 29,279 229,279 30,457 30,457 230,457
15 1,302 12,003 12,003 212,003 33,412 33,412 233,412 34,848 34,848 234,848
16 1,302 12,640 12,640 212,640 37,928 37,928 237,928 39,660 39,660 239,660
17 1,302 13,196 13,196 213,196 42,856 42,856 242,856 44,930 44,930 244,930
18 1,302 13,654 13,654 213,654 48,221 48,221 248,221 50,695 50,695 250,695
19 1,302 13,992 13,992 213,992 54,048 54,048 254,048 57,009 57,009 257,009
20 1,302 14,189 14,189 214,189 60,361 60,361 260,361 63,952 63,952 263,952
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-31
<PAGE> 153
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 1,302 14,220 14,220 214,220 67,186 67,186 267,186 71,598 71,598 271,598
22 1,302 14,062 14,062 214,062 74,552 74,552 274,552 79,983 79,983 279,983
23 1,302 13,688 13,688 213,688 82,486 82,486 282,486 89,167 89,167 289,167
24 1,302 13,069 13,069 213,069 91,017 91,017 291,017 99,239 99,239 299,239
25 1,302 12,165 12,165 212,165 100,165 100,165 300,165 110,294 110,294 310,294
26 1,302 10,923 10,923 210,923 109,938 109,938 309,938 122,410 122,410 322,410
27 1,302 9,271 9,271 209,271 120,323 120,323 320,323 135,684 135,684 335,684
28 1,302 7,119 7,119 207,119 131,286 131,286 331,286 150,215 150,215 350,215
29 1,302 4,358 4,358 204,358 142,770 142,770 342,770 166,067 166,067 366,067
30 1,302 876 876 200,876 154,704 154,704 354,704 183,334 183,334 383,334
31 1,302 LAPSED LAPSED LAPSED 167,007 167,007 367,007 202,110 202,110 402,110
32 1,302 179,591 179,591 379,591 222,490 222,490 422,490
33 1,302 192,356 192,356 392,356 244,566 244,566 444,566
34 1,302 205,180 205,180 405,180 268,431 268,431 468,431
35 1,302 217,888 217,888 417,888 294,178 294,178 494,178
36 1,302 230,242 230,242 430,242 321,892 321,892 521,892
37 1,302 241,921 241,921 441,921 351,673 351,673 551,673
38 1,302 252,516 252,516 452,516 383,622 383,622 583,622
39 1,302 261,562 261,562 461,562 417,657 417,657 617,657
40 1,302 268,553 268,553 468,553 453,712 453,712 653,712
41 1,302 272,960 272,960 472,960 491,817 491,817 691,817
42 1,302 274,216 274,216 474,216 531,848 531,848 731,848
43 1,302 271,715 271,715 471,715 573,677 573,677 773,677
44 1,302 264,786 264,786 464,786 616,990 616,990 816,990
45 1,302 252,651 252,651 452,651 661,542 661,542 861,542
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-32
<PAGE> 154
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 1,302 234,397 234,397 434,397 707,052 707,052 907,052
47 1,302 208,891 208,891 408,891 753,158 753,158 953,158
48 1,302 174,659 174,659 374,659 799,436 799,436 999,436
49 1,302 129,549 129,549 329,549 846,448 846,448 1,046,448
50 1,302 69,970 69,970 269,970 894,013 894,013 1,094,013
51 1,302 LAPSED LAPSED LAPSED 941,851 941,851 1,141,851
52 1,302 988,498 988,498 1,188,498
53 1,302 1,035,207 1,035,207 1,235,207
54 1,302 1,081,773 1,081,773 1,281,773
55 1,302 1,128,113 1,128,113 1,328,113
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 2
Initial Modal Premium: $1,302.22-Premium Mode:
Annual-Riders: None
D-33
<PAGE> 155
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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>
1 740 0 415 200,000 0 415 200,000 0 415 200,000
5 740 1,569 2,013 200,000 1,569 2,013 200,000 1,581 2,025 200,000
10 740 3,782 3,856 200,000 3,782 3,856 200,000 3,838 3,912 200,000
20 740 8,456 8,456 200,000 8,456 8,456 200,000 8,793 8,793 200,000
@ Age 70 740 4,567 4,567 200,000 4,567 4,567 200,000 9,756 9,756 200,000
@ Age 85 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 38 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 38 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 43 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
------------------------------------------------------
-------------------------
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-34
<PAGE> 156
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 740 0 415 200,000 0 415 200,000 0 415 200,000
2 740 157 823 200,000 157 823 200,000 159 825 200,000
3 740 634 1,226 200,000 634 1,226 200,000 638 1,230 200,000
4 740 1,105 1,623 200,000 1,105 1,623 200,000 1,112 1,630 200,000
5 740 1,569 2,013 200,000 1,569 2,013 200,000 1,581 2,025 200,000
6 740 2,027 2,397 200,000 2,027 2,397 200,000 2,044 2,414 200,000
7 740 2,478 2,774 200,000 2,478 2,774 200,000 2,502 2,798 200,000
8 740 2,921 3,143 200,000 2,921 3,143 200,000 2,954 3,176 200,000
9 740 3,356 3,504 200,000 3,356 3,504 200,000 3,399 3,547 200,000
10 740 3,782 3,856 200,000 3,782 3,856 200,000 3,838 3,912 200,000
11 740 4,388 4,388 200,000 4,388 4,388 200,000 4,459 4,459 200,000
12 740 4,908 4,908 200,000 4,908 4,908 200,000 4,997 4,997 200,000
13 740 5,415 5,415 200,000 5,415 5,415 200,000 5,526 5,526 200,000
14 740 5,907 5,907 200,000 5,907 5,907 200,000 6,042 6,042 200,000
15 740 6,384 6,384 200,000 6,384 6,384 200,000 6,544 6,544 200,000
16 740 6,844 6,844 200,000 6,844 6,844 200,000 7,029 7,029 200,000
17 740 7,284 7,284 200,000 7,284 7,284 200,000 7,495 7,495 200,000
18 740 7,701 7,701 200,000 7,701 7,701 200,000 7,942 7,942 200,000
19 740 8,093 8,093 200,000 8,093 8,093 200,000 8,374 8,374 200,000
20 740 8,456 8,456 200,000 8,456 8,456 200,000 8,793 8,793 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-35
<PAGE> 157
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 740 8,786 8,786 200,000 8,786 8,786 200,000 9,199 9,199 200,000
22 740 9,078 9,078 200,000 9,078 9,078 200,000 9,580 9,580 200,000
23 740 9,329 9,329 200,000 9,329 9,329 200,000 9,934 9,934 200,000
24 740 9,532 9,532 200,000 9,532 9,532 200,000 10,255 10,255 200,000
25 740 9,682 9,682 200,000 9,682 9,682 200,000 10,540 10,540 200,000
26 740 9,768 9,768 200,000 9,768 9,768 200,000 10,781 10,781 200,000
27 740 9,777 9,777 200,000 9,777 9,777 200,000 10,972 10,972 200,000
28 740 9,694 9,694 200,000 9,694 9,694 200,000 11,104 11,104 200,000
29 740 9,497 9,497 200,000 9,497 9,497 200,000 11,170 11,170 200,000
30 740 9,165 9,165 200,000 9,165 9,165 200,000 11,166 11,166 200,000
31 740 8,674 8,674 200,000 8,674 8,674 200,000 11,073 11,073 200,000
32 740 7,998 7,998 200,000 7,998 7,998 200,000 10,896 10,896 200,000
33 740 7,111 7,111 200,000 7,111 7,111 200,000 10,616 10,616 200,000
34 740 5,982 5,982 200,000 5,982 5,982 200,000 10,236 10,236 200,000
35 740 4,567 4,567 200,000 4,567 4,567 200,000 9,756 9,756 200,000
36 740 2,806 2,806 200,000 2,806 2,806 200,000 9,150 9,150 200,000
37 740 619 619 200,000 619 619 200,000 8,402 8,402 200,000
38 740 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 7,484 7,484 200,000
39 740 6,331 6,331 200,000
40 740 4,894 4,894 200,000
41 740 3,112 3,112 200,000
42 740 915 915 200,000
43 740 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-36
<PAGE> 158
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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>
1 740 0 415 200,000 0 447 200,000 0 447 200,000
5 740 1,569 2,013 200,000 2,003 2,448 200,000 2,016 2,460 200,000
10 740 3,782 3,856 200,000 5,409 5,483 200,000 5,476 5,550 200,000
20 740 8,456 8,456 200,000 15,965 15,965 200,000 16,431 16,431 200,000
@ Age 70 740 4,567 4,567 200,000 33,240 33,240 200,000 40,011 40,011 200,000
@ Age 85 740 0 0 0 0 0 0 33,870 33,870 200,000
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
* Policy lapses in policy year 38 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 46 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 53 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
------------------------------------------------------
-------------------------
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-37
<PAGE> 159
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 740 0 415 200,000 0 447 200,000 0 447 200,000
2 740 157 823 200,000 248 914 200,000 250 916 200,000
3 740 634 1,226 200,000 811 1,403 200,000 815 1,407 200,000
4 740 1,105 1,623 200,000 1,396 1,914 200,000 1,403 1,921 200,000
5 740 1,569 2,013 200,000 2,003 2,448 200,000 2,016 2,460 200,000
6 740 2,027 2,397 200,000 2,635 3,005 200,000 2,654 3,024 200,000
7 740 2,478 2,774 200,000 3,290 3,586 200,000 3,318 3,614 200,000
8 740 2,921 3,143 200,000 3,971 4,193 200,000 4,009 4,231 200,000
9 740 3,356 3,504 200,000 4,677 4,825 200,000 4,728 4,876 200,000
10 740 3,782 3,856 200,000 5,409 5,483 200,000 5,476 5,550 200,000
11 740 4,388 4,388 200,000 6,363 6,363 200,000 6,449 6,449 200,000
12 740 4,908 4,908 200,000 7,280 7,280 200,000 7,390 7,390 200,000
13 740 5,415 5,415 200,000 8,235 8,235 200,000 8,373 8,373 200,000
14 740 5,907 5,907 200,000 9,227 9,227 200,000 9,397 9,397 200,000
15 740 6,384 6,384 200,000 10,257 10,257 200,000 10,462 10,462 200,000
16 740 6,844 6,844 200,000 11,325 11,325 200,000 11,569 11,569 200,000
17 740 7,284 7,284 200,000 12,432 12,432 200,000 12,716 12,716 200,000
18 740 7,701 7,701 200,000 13,575 13,575 200,000 13,904 13,904 200,000
19 740 8,093 8,093 200,000 14,753 14,753 200,000 15,142 15,142 200,000
20 740 8,456 8,456 200,000 15,965 15,965 200,000 16,431 16,431 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-38
<PAGE> 160
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 740 8,786 8,786 200,000 17,208 17,208 200,000 17,775 17,775 200,000
22 740 9,078 9,078 200,000 18,479 18,479 200,000 19,166 19,166 200,000
23 752 9,329 9,329 200,000 19,776 19,776 200,000 20,603 20,603 200,000
24 740 9,532 9,532 200,000 21,095 21,095 200,000 22,083 22,083 200,000
25 740 9,682 9,682 200,000 22,429 22,429 200,000 23,605 23,605 200,000
26 740 9,768 9,768 200,000 23,772 23,772 200,000 25,164 25,164 200,000
27 740 9,777 9,777 200,000 25,111 25,111 200,000 26,756 26,756 200,000
28 740 9,694 9,694 200,000 26,432 26,432 200,000 28,374 28,374 200,000
29 740 9,497 9,497 200,000 27,715 27,715 200,000 30,014 30,014 200,000
30 740 9,165 9,165 200,000 28,938 28,938 200,000 31,673 31,673 200,000
31 740 8,674 8,674 200,000 30,077 30,077 200,000 33,337 33,337 200,000
32 740 7,998 7,998 200,000 31,108 31,108 200,000 35,010 35,010 200,000
33 740 7,111 7,111 200,000 32,003 32,003 200,000 36,678 36,678 200,000
34 740 5,982 5,982 200,000 32,728 32,728 200,000 38,344 38,344 200,000
35 740 4,567 4,567 200,000 33,240 33,240 200,000 40,011 40,011 200,000
36 740 2,806 2,806 200,000 33,479 33,479 200,000 41,656 41,656 200,000
37 740 619 619 200,000 33,364 33,364 200,000 43,269 43,269 200,000
38 740 LAPSED LAPSED LAPSED 32,789 32,789 200,000 44,827 44,827 200,000
39 740 31,621 31,621 200,000 46,276 46,276 200,000
40 740 29,707 29,707 200,000 47,577 47,577 200,000
41 740 26,869 26,869 200,000 48,679 48,679 200,000
42 740 22,897 22,897 200,000 49,524 49,524 200,000
43 740 17,542 17,542 200,000 50,040 50,040 200,000
44 740 10,484 10,484 200,000 50,139 50,139 200,000
45 740 1,293 1,293 200,000 49,719 49,719 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode: Annual-Riders: None
D-39
<PAGE> 161
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 740 LAPSED LAPSED LAPSED 48,651 48,651 200,000
47 740 46,791 46,791 200,000
48 740 43,962 43,962 200,000
49 740 39,796 39,796 200,000
50 740 33,870 33,870 200,000
51 740 25,739 25,739 200,000
52 740 14,683 14,683 200,000
53 740 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-40
<PAGE> 162
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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>
1 740 0 415 200,000 0 479 200,000 0 479 200,000
5 740 1,569 2,013 200,000 2,515 2,959 200,000 2,529 2,973 200,000
10 740 3,782 3,856 200,000 7,761 7,835 200,000 7,841 7,915 200,000
20 740 8,456 8,456 200,000 32,202 32,202 200,000 32,873 32,873 200,000
@ Age 70 740 4,567 4,567 200,000 163,053 163,053 200,000 171,206 171,206 200,000
@ Age 85 740 0 0 0 760,298 760,298 798,312 813,615 813,615 854,295
@ Age 90 740 0 0 0 1,230,654 1,230,654 1,292,186 1,340,047 1,340,047 1,407,049
</TABLE>
* Policy lapses in policy year 38 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
------------------------------------------------------
-------------------------
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-41
<PAGE> 163
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 740 0 415 200,000 0 479 200,000 0 479 200,000
2 740 157 823 200,000 343 1,009 200,000 345 1,011 200,000
3 740 634 1,226 200,000 1,003 1,595 200,000 1,007 1,599 200,000
4 740 1,105 1,623 200,000 1,725 2,243 200,000 1,733 2,251 200,000
5 740 1,569 2,013 200,000 2,515 2,959 200,000 2,529 2,973 200,000
6 740 2,027 2,397 200,000 3,381 3,751 200,000 3,402 3,772 200,000
7 740 2,478 2,774 200,000 4,329 4,625 200,000 4,360 4,656 200,000
8 740 2,921 3,143 200,000 5,369 5,591 200,000 5,413 5,635 200,000
9 740 3,356 3,504 200,000 6,509 6,657 200,000 6,569 6,718 200,000
10 740 3,782 3,856 200,000 7,761 7,835 200,000 7,841 7,915 200,000
11 740 4,388 4,388 200,000 9,337 9,337 200,000 9,442 9,442 200,000
12 740 4,908 4,908 200,000 10,996 10,996 200,000 11,132 11,132 200,000
13 740 5,415 5,415 200,000 12,828 12,828 200,000 13,003 13,003 200,000
14 740 5,907 5,907 200,000 14,850 14,850 200,000 15,070 15,070 200,000
15 740 6,384 6,384 200,000 17,082 17,082 200,000 17,352 17,352 200,000
16 740 6,844 6,844 200,000 19,545 19,545 200,000 19,871 19,871 200,000
17 740 7,284 7,284 200,000 22,262 22,262 200,000 22,652 22,652 200,000
18 740 7,701 7,701 200,000 25,258 25,258 200,000 25,722 25,722 200,000
19 740 8,093 8,093 200,000 28,561 28,561 200,000 29,116 29,116 200,000
20 740 8,456 8,456 200,000 32,202 32,202 200,000 32,873 32,873 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 35 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Model Premium: $740.23-Premium Mode:
Annual-Riders: None
D-42
<PAGE> 164
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 740 8,786 8,786 200,000 36,214 36,214 200,000 37,032 37,032 200,000
22 740 9,078 9,078 200,000 40,636 40,636 200,000 41,626 41,626 200,000
23 740 9,329 9,329 200,000 45,509 45,509 200,000 46,703 46,703 200,000
24 740 9,532 9,532 200,000 50,882 50,882 200,000 52,311 52,311 200,000
25 740 9,682 9,682 200,000 56,804 56,804 200,000 58,507 58,507 200,000
26 740 9,768 9,768 200,000 63,333 63,333 200,000 65,352 65,352 200,000
27 740 9,777 9,777 200,000 70,531 70,531 200,000 72,915 72,915 200,000
28 740 9,694 9,694 200,000 78,466 78,466 200,000 81,273 81,273 200,000
29 740 9,497 9,497 200,000 87,216 87,216 200,000 90,515 90,515 200,000
30 740 9,165 9,165 200,000 96,869 96,869 200,000 100,742 100,742 200,000
31 740 8,674 8,674 200,000 107,530 107,530 200,000 112,063 112,063 200,000
32 740 7,998 7,998 200,000 119,321 119,321 200,000 124,613 124,613 200,000
33 740 7,111 7,111 200,000 132,387 132,387 200,000 138,535 138,535 200,000
34 740 5,982 5,982 200,000 146,898 146,898 200,000 154,002 154,002 200,000
35 740 4,567 4,567 200,000 163,053 163,053 200,000 171,206 171,206 200,000
36 740 2,806 2,806 200,000 181,077 181,077 208,239 190,319 190,319 218,867
37 740 619 619 200,000 201,070 201,070 227,209 211,496 211,496 238,991
38 740 LAPSED LAPSED LAPSED 223,194 223,194 247,746 234,962 234,962 260,808
39 740 247,693 247,693 269,985 260,967 260,967 284,454
40 740 274,846 274,846 294,085 289,797 289,797 310,083
41 740 304,983 304,983 320,232 321,776 321,776 337,865
42 740 338,271 338,271 355,184 357,174 357,174 375,033
43 740 375,020 375,020 393,771 396,346 396,346 416,163
44 740 415,566 415,566 436,345 439,679 439,679 461,663
45 740 460,271 460,271 483,284 487,599 487,599 511,979
</TABLE>
This is an illustration, not a policy.
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
Age 45 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $740.23-Premium Mode:
Annual-Riders: None
D-43
<PAGE> 165
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
46 740 509,517 509,517 534,992 540,569 540,569 567,597
47 740 563,709 563,709 591,894 599,093 599,093 629,048
48 740 623,270 623,270 654,434 663,723 663,723 696,910
49 740 688,645 688,645 723,077 735,027 735,027 771,778
50 740 760,298 760,298 798,312 813,615 813,615 854,295
51 740 838,719 838,719 880,655 900,159 900,159 945,167
52 740 924,422 924,422 970,643 995,348 995,348 1,045,116
53 740 1,017,942 1,017,942 1,068,839 1,099,908 1,099,908 1,154,903
54 740 1,119,834 1,119,834 1,175,825 1,214,554 1,214,554 1,275,282
55 740 1,230,654 1,230,654 1,292,186 1,340,047 1,340,047 1,407,049
56 740 1,350,951 1,350,951 1,418,499 1,477,159 1,477,159 1,551,017
57 740 1,484,917 1,484,917 1,544,313 1,629,158 1,629,158 1,694,324
58 740 1,634,947 1,634,947 1,683,995 1,798,390 1,798,390 1,852,342
59 740 1,804,055 1,804,055 1,840,136 1,987,976 1,987,976 2,027,736
60 740 1,996,196 1,996,196 2,016,158 2,201,519 2,201,519 2,223,534
61 740 2,207,772 2,207,772 2,229,850 2,437,562 2,437,562 2,461,938
62 740 2,439,842 2,439,842 2,464,241 2,698,312 2,698,312 2,725,295
63 740 2,692,049 2,692,049 2,718,969 2,986,422 2,986,422 3,016,286
64 740 2,966,367 2,966,367 2,996,031 3,304,691 3,304,691 3,337,738
65 740 3,268,569 3,268,569 3,301,254 3,656,210 3,656,210 3,692,772
</TABLE>
This is an illustration, not a policy.
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.
D-44
<PAGE> 166
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 2,270 0 1,634 200,000 0 1,634 200,000 0 1,634 200,000
5 2,270 6,310 7,671 200,000 6,310 7,671 200,000 6,609 7,971 200,000
10 2,270 13,372 13,599 200,000 13,372 13,599 200,000 15,108 15,335 200,000
20 2,270 13,342 13,342 200,000 13,342 13,342 200,000 28,268 28,268 200,000
@ Age 70 2,270 17,752 17,752 200,000 17,752 17,752 200,000 23,532 23,532 200,000
@ Age 85 2,270 0 0 0 0 0 0 4,218 4,218 200,000
@ Age 90 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</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 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
------------------------------------------------------
-------------------------
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-45
<PAGE> 167
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,270 0 1,634 200,000 0 1,634 200,000 0 1,634 200,000
2 2,270 1,175 3,218 200,000 1,175 3,218 200,000 1,207 3,250 200,000
3 2,270 2,939 4,755 200,000 2,939 4,755 200,000 3,029 4,845 200,000
4 2,270 4,653 6,242 200,000 4,653 6,242 200,000 4,830 6,419 200,000
5 2,270 6,310 7,671 200,000 6,310 7,671 200,000 6,609 7,971 200,000
6 2,270 7,902 9,037 200,000 7,902 9,037 200,000 8,365 9,500 200,000
7 2,270 9,420 10,328 200,000 9,420 10,328 200,000 10,096 11,004 200,000
8 2,270 10,849 11,530 200,000 10,849 11,530 200,000 11,798 12,479 200,000
9 2,270 12,173 12,627 200,000 12,173 12,627 200,000 13,471 13,925 200,000
10 2,270 13,372 13,599 200,000 13,372 13,599 200,000 15,108 15,335 200,000
11 2,270 14,827 14,827 200,000 14,827 14,827 200,000 17,105 17,105 200,000
12 2,270 15,882 15,882 200,000 15,882 15,882 200,000 18,821 18,821 200,000
13 2,270 16,741 16,741 200,000 16,741 16,741 200,000 20,480 20,480 200,000
14 2,270 17,376 17,376 200,000 17,376 17,376 200,000 22,055 22,055 200,000
15 2,270 17,752 17,752 200,000 17,752 17,752 200,000 23,532 23,532 200,000
16 2,270 17,819 17,819 200,000 17,819 17,819 200,000 24,862 24,862 200,000
17 2,270 17,511 17,511 200,000 17,511 17,511 200,000 26,020 26,020 200,000
18 2,270 16,737 16,737 200,000 16,737 16,737 200,000 26,973 26,973 200,000
19 2,270 15,389 15,389 200,000 15,389 15,389 200,000 27,731 27,731 200,000
20 2,270 13,342 13,342 200,000 13,342 13,342 200,000 28,268 28,268 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-46
<PAGE> 168
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 2,270 10,454 10,454 200,000 10,454 10,454 200,000 28,561 28,561 200,000
22 2,270 6,566 6,566 200,000 6,566 6,566 200,000 28,522 28,522 200,000
23 2,270 1,493 1,493 200,000 1,493 1,493 200,000 28,084 28,084 200,000
24 2,270 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 27,165 27,165 200,000
25 2,270 25,671 25,671 200,000
26 2,270 23,486 23,486 200,000
27 2,270 20,481 20,481 200,000
28 2,270 16,499 16,499 200,000
29 2,270 11,207 11,207 200,000
30 2,270 4,218 4,218 200,000
31 2,270 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-47
<PAGE> 169
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 2,270 0 1,634 200,000 0 1,745 200,000 0 1,745 200,000
5 2,270 6,310 7,671 200,000 7,906 9,268 200,000 8,233 9,595 200,000
10 2,270 13,372 13,599 200,000 19,325 19,552 200,000 21,348 21,575 200,000
20 2,270 13,342 13,342 200,000 37,973 37,973 200,000 56,625 56,625 200,000
@ Age 70 2,270 17,752 17,752 200,000 31,271 31,271 200,000 38,306 38,306 200,000
@ Age 85 2,270 0 0 0 0 0 0 83,868 83,868 200,000
@ Age 90 2,270 0 0 0 0 0 0 63,616 63,616 200,000
</TABLE>
* Policy lapses in policy year 24 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 39 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
------------------------------------------------------
-------------------------
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-48
<PAGE> 170
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,270 0 1,634 200,000 0 1,745 200,000 0 1,745 200,000
2 2,270 1,175 3,218 200,000 1,498 3,541 200,000 1,531 3,574 200,000
3 2,270 2,939 4,755 200,000 3,580 5,395 200,000 3,674 5,490 200,000
4 2,270 4,653 6,242 200,000 5,717 7,306 200,000 5,907 7,496 200,000
5 2,270 6,310 7,671 200,000 7,906 9,268 200,000 8,233 9,595 200,000
6 2,270 7,902 9,037 200,000 10,142 11,277 200,000 10,655 11,790 200,000
7 2,270 9,420 10,328 200,000 12,415 13,323 200,000 13,176 14,084 200,000
8 2,270 10,849 11,530 200,000 14,715 15,396 200,000 15,797 16,478 200,000
9 2,270 12,173 12,627 200,000 17,025 17,479 200,000 18,521 18,975 200,000
10 2,270 13,372 13,599 200,000 19,325 19,552 200,000 21,348 21,575 200,000
11 2,270 14,827 14,827 200,000 22,011 22,011 200,000 24,692 24,692 200,000
12 2,270 15,882 15,882 200,000 24,439 24,439 200,000 27,930 27,930 200,000
13 2,270 16,741 16,741 200,000 26,811 26,811 200,000 31,288 31,288 200,000
14 2,270 17,376 17,376 200,000 29,100 29,100 200,000 34,750 34,750 200,000
15 2,270 17,752 17,752 200,000 31,271 31,271 200,000 38,306 38,306 200,000
16 2,270 17,819 17,819 200,000 33,274 33,274 200,000 41,917 41,917 200,000
17 2,270 17,511 17,511 200,000 35,043 35,043 200,000 45,566 45,566 200,000
18 2,270 16,737 16,737 200,000 36,491 36,491 200,000 49,229 49,229 200,000
19 2,270 15,389 15,389 200,000 37,509 37,509 200,000 52,920 52,920 200,000
20 2,270 13,342 13,342 200,000 37,973 37,973 200,000 56,625 56,625 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form #B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-49
<PAGE> 171
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 2,270 10,454 10,454 200,000 37,741 37,741 200,000 60,332 60,332 200,000
22 2,270 6,566 6,566 200,000 36,653 36,653 200,000 63,980 63,980 200,000
23 2,270 1,493 1,493 200,000 34,519 34,519 200,000 67,523 67,523 200,000
24 2,270 LAPSED LAPSED LAPSED 31,101 31,101 200,000 70,913 70,913 200,000
25 2,270 26,078 26,078 200,000 74,092 74,092 200,000
26 2,270 19,007 19,007 200,000 76,994 76,994 200,000
27 2,270 9,274 9,274 200,000 79,549 79,549 200,000
28 2,270 LAPSED LAPSED LAPSED 81,676 81,676 200,000
29 2,270 83,185 83,185 200,000
30 2,270 83,868 83,868 200,000
31 2,270 83,537 83,537 200,000
32 2,270 81,870 81,870 200,000
33 2,270 78,457 78,457 200,000
34 2,270 72,650 72,650 200,000
35 2,270 63,616 63,616 200,000
36 2,270 50,161 50,161 200,000
37 2,270 30,477 30,477 200,000
38 2,270 1,797 1,797 200,000
39 2,270 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-50
<PAGE> 172
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 2,270 0 1,634 200,000 0 1,856 200,000 0 1,856 200,000
5 2,270 6,310 7,671 200,000 9,782 11,144 200,000 10,138 11,500 200,000
10 2,270 13,372 13,599 200,000 27,952 28,179 200,000 30,316 30,543 200,000
20 2,270 13,342 13,342 200,000 95,894 95,894 200,000 118,829 118,829 200,000
@ Age 70 2,270 17,752 17,752 200,000 55,761 55,761 200,000 64,352 64,352 200,000
@ Age 85 2,270 0 0 0 269,912 269,912 283,407 363,184 363,184 381,343
@ Age 90 2,270 0 0 0 449,404 449,404 471,874 610,866 610,866 641,409
</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
------------------------------------------------------
-------------------------
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form #B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-51
<PAGE> 173
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,270 0 1,634 200,000 0 1,856 200,000 0 1,856 200,000
2 2,270 1,175 3,218 200,000 1,836 3,878 200,000 1,870 3,912 200,000
3 2,270 2,939 4,755 200,000 4,275 6,090 200,000 4,374 6,189 200,000
4 2,270 4,653 6,242 200,000 6,918 8,507 200,000 7,121 8,710 200,000
5 2,270 6,310 7,671 200,000 9,782 11,144 200,000 10,138 11,500 200,000
6 2,270 7,902 9,037 200,000 12,883 14,018 200,000 13,452 14,586 200,000
7 2,270 9,420 10,328 200,000 16,237 17,145 200,000 17,091 17,999 200,000
8 2,270 10,849 11,530 200,000 19,857 20,538 200,000 21,091 21,771 200,000
9 2,270 12,173 12,627 200,000 23,758 24,211 200,000 25,486 25,940 200,000
10 2,270 13,372 13,599 200,000 27,952 28,179 200,000 30,316 30,543 200,000
11 2,270 14,827 14,827 200,000 32,886 32,886 200,000 36,053 36,053 200,000
12 2,270 15,882 15,882 200,000 37,969 37,969 200,000 42,132 42,132 200,000
13 2,270 16,741 16,741 200,000 43,455 43,455 200,000 48,839 48,839 200,000
14 2,270 17,376 17,376 200,000 49,375 49,375 200,000 56,224 56,224 200,000
15 2,270 17,752 17,752 200,000 55,761 55,761 200,000 64,352 64,352 200,000
16 2,270 17,819 17,819 200,000 62,647 62,647 200,000 73,273 73,273 200,000
17 2,270 17,511 17,511 200,000 70,063 70,063 200,000 83,070 83,070 200,000
18 2,270 16,737 16,737 200,000 78,044 78,044 200,000 93,834 93,834 200,000
19 2,270 15,389 15,389 200,000 86,632 86,632 200,000 105,708 105,708 200,000
20 2,270 13,342 13,342 200,000 95,894 95,894 200,000 118,829 118,829 200,000
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form # B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-52
<PAGE> 174
LIFE INSURANCE ILLUSTRATION
MONY Custom Estate Master
LAST SURVIVOR 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 OUTLAY VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
21 2,270 10,454 10,454 200,000 105,925 105,925 200,000 133,368 133,368 200,000
22 2,270 6,566 6,566 200,000 116,867 116,867 200,000 149,505 149,505 200,000
23 2,270 1,493 1,493 200,000 128,915 128,915 200,000 167,480 167,480 200,000
24 2,270 LAPSED LAPSED LAPSED 142,334 142,334 200,000 187,599 187,599 200,000
25 2,270 157,478 157,478 200,000 210,077 210,077 220,581
26 2,270 174,829 174,829 200,000 234,934 234,934 246,680
27 2,270 195,041 195,041 204,793 262,407 262,407 275,527
28 2,270 217,713 217,713 228,598 292,756 292,756 307,394
29 2,270 242,610 242,610 254,740 326,252 326,252 342,564
30 2,270 269,912 269,912 283,407 363,184 363,184 381,343
31 2,270 299,808 299,808 314,798 403,871 403,871 424,064
32 2,270 332,495 332,495 349,120 448,637 448,637 471,069
33 2,270 368,181 368,181 386,590 497,829 497,829 522,721
34 2,270 407,079 407,079 427,433 551,785 551,785 579,374
35 2,270 449,404 449,404 471,874 610,866 610,866 641,409
36 2,270 495,369 495,369 520,138 675,436 675,436 709,208
37 2,270 546,523 546,523 568,384 746,984 746,984 776,863
38 2,270 603,772 603,772 621,885 826,602 826,602 851,400
39 2,270 668,252 668,252 681,617 915,745 915,745 934,060
40 2,270 741,456 741,456 748,870 1,016,095 1,016,095 1,026,255
41 2,270 822,072 822,072 830,293 1,127,020 1,127,020 1,138,290
42 2,270 910,512 910,512 919,617 1,249,558 1,249,558 1,262,054
43 2,270 1,006,655 1,006,655 1,016,722 1,384,957 1,384,957 1,398,806
44 2,270 1,111,253 1,111,253 1,122,365 1,534,530 1,534,530 1,549,876
45 2,270 1,226,482 1,226,482 1,238,746 1,699,732 1,699,732 1,716,730
</TABLE>
This is an illustration, not a policy.
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
Age 55 Female Non-Smoker Preferred Version 98.09.01
Specified Amount: $200,000-Death Benefit Option: Form #B1-98
Specified Amount for Option 1
Initial Modal Premium: $2,269.50-Premium Mode:
Annual-Riders: None
D-53
<PAGE> 175
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> 176
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. 14431 SL 5/00
