<PAGE> 1
REGISTRATION NOS. 333-71677
811- 6217
FISCAL YEAR END DECEMBER 31
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
OF SECURITIES OF UNIT
INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 6
------------------------
MONY VARIABLE ACCOUNT L
(EXACT NAME OF TRUST)
MONY LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
------------------------
1740 BROADWAY
NEW YORK, NEW YORK 10019
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
FREDERICK C. TEDESCHI
VICE PRESIDENT AND CHIEF COUNSEL -- OPERATIONS
MONY LIFE INSURANCE COMPANY
1740 BROADWAY
NEW YORK, NEW YORK 10019
(NAME AND ADDRESS OF AGENT FOR SERVICE)
It is proposed that this filing will become effective on March 1, 2001
pursuant to Rule 485(a).
------------------------
STATEMENT PURSUANT TO RULE 24f-2
The Registrant registers an indefinite number or amount of its variable life
insurance contracts under the Securities Act of 1933 pursuant to Rule 24f-2
under the Investment Company Act of 1940. The Rule 24f-2 notice for Registrant's
fiscal year ending December 31, 1999 was filed March 29, 2000.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-8B-2
<TABLE>
<CAPTION>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
<C> <S>
1 Cover Page
2 Cover Page
3 Not Applicable
4 DISTRIBUTION OF THE POLICY
5 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
6 Variable Account L
7 Not required
8 Not required
9 Legal Proceedings
10 THE POLICY; INFORMATION ABOUT THE COMPANY AND THE VARIABLE
ACCOUNT; CHARGES AND DEDUCTIONS; OTHER INFORMATION; VOTING
OF FUND SHARES; MORE ABOUT THE POLICY
11 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE
FUNDS; PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT
12 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE
FUNDS; PURCHASE OF PORTFOLIO SHARES BY THE VARIABLE ACCOUNT
13 THE POLICY; CHARGES AND DEDUCTIONS; THE FUNDS
14 THE POLICY
15 THE POLICY
16 THE FUNDS; THE POLICY; INFORMATION ABOUT THE COMPANY AND THE
VARIABLE ACCOUNT
17 THE POLICY
18 THE FUNDS; THE POLICY; INFORMATION ABOUT THE COMPANY AND THE
VARIABLE ACCOUNT
19 VOTING OF FUND SHARES; MORE ABOUT THE POLICY
20 Not applicable
21 THE POLICY
22 Not applicable
23 Not applicable
24 IMPORTANT POLICY TERMS; MORE ABOUT THE POLICY
25 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
26 Not applicable
27 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
28 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
29 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
30 Not applicable
31 Not applicable
32 Not applicable
33 Not applicable
34 Not applicable
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
----------- ---------------------
<C> <S>
35 MORE ABOUT THE POLICY
36 Not applicable
37 Not applicable
38 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; MORE
ABOUT THE POLICY
39 MORE ABOUT THE POLICY
40 Not applicable
41 MORE ABOUT THE POLICY
42 Not applicable
43 Not applicable
44 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE
POLICY; MORE ABOUT THE POLICY
45 Not applicable
46 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE
POLICY; MORE ABOUT THE POLICY
47 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT; THE
POLICY; MORE ABOUT THE POLICY
48 Not applicable
49 Not applicable
50 INFORMATION ABOUT THE COMPANY AND THE VARIABLE ACCOUNT
51 Cover Page; INFORMATION ABOUT THE COMPANY AND THE VARIABLE
ACCOUNT; THE POLICY; MORE ABOUT THE POLICY
52 OTHER INFORMATION
53 OTHER INFORMATION
54 Not applicable
55 Not applicable
56 Not required
57 Not required
58 Not required
59 FINANCIAL STATEMENTS
</TABLE>
ii
<PAGE> 4
PART I
(INFORMATION REQUIRED IN A PROSPECTUS)
<PAGE> 5
SUPPLEMENT DATED MARCH 1, 2000
TO
PROSPECTUS DATED MAY 1, 2000
FOR
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MONY LIFE INSURANCE COMPANY
MONY VARIABLE ACCOUNT L
Effective March 1, 2000 this Supplement updates certain information contained in
your Prospectus. Please read it and keep it with your prospectus for future
reference.
1. THE ADDITION OF AN ADDITIONAL TERM LIFE INSURANCE RIDER REVISES THE
DESCRIPTION OF THE TWO DEATH BENEFIT OPTIONS ON PAGES 7-8 TO READ AS FOLLOWS:
Option 1 -- The death benefit equals the greater of
(a) the Specified Amount plus Additional Term Life Insurance, if any, or
(b) Fund Value multiplied by a death benefit percentage.
The death benefit percentage varies according to the definition of life
insurance chosen. If the Guideline Premium/Cash Value Corridor Test is
chosen, the death benefit percentages vary according to age. If the Cash
Value Accumulation Test is chosen, the death benefit percentages vary
according to age, gender and smoking status.
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.
Option 2 -- The death benefit equals the greater of
(a) the Specified Amount plus the Additional Term Life Insurance, if
any, plus the Fund Value, or
(b) Fund Value multiplied by a death benefit percentage.
The death benefit percentage varies according to the definition of life
insurance chosen. If the Guideline Premium/Cash Value Corridor Test is
chosen, the death benefit percentages vary according to age. If the Cash
Value Accumulation Test is chosen, the death benefit percentages vary
according to age, gender and smoking status.
If you choose Option 2, favorable investment performance will increase
the Fund Value of the Policy which in turn increases insurance coverage.
2. A NEW LAST PARAGRAPH IS ADDED ON PAGE 9 UNDER THE SECTION ENTITLED "GRACE
PERIOD AND LAPSE" TO READ AS FOLLOWS:
In addition, we calculate each month whether you have paid the premiums
required to be paid by your Guaranteed Death Benefit to Age 100 Rider. See
"Guaranteed Death Benefit to Age 100 Rider," page 32. If your Policy does not
meet the test on that date, a notice will be sent to you giving you 61 days
from its date to make additional payments to the Rider. See "Grace Period and
Lapse," page 39.
3. THE FIRST PARAGRAPH ON PAGE 10 IS AMENDED TO READ AS FOLLOWS:
You must understand that after the first three Policy years, the policy
can lapse even if the scheduled premium payments are made unless you have
made all the premium payments required by the Guaranteed Death Benefit to Age
100 Rider.
1
<PAGE> 6
4. THE SECTION ENTITLED "RIDERS" ON PAGE 10 IS AMENDED TO READ AS FOLLOWS:
Additional optional insurance benefits may be added to the Policy by an
addendum called a rider. There are three riders available with this policy:
- Four Year Term Life Insurance Rider
- Guaranteed Death Benefit to Age 100 Rider
- Additional Term Life Insurance Rider
5. A NEW SECOND PARAGRAPH IS ADDED TO THE SECTION ENTITLED "SCHEDULED PREMIUM
PAYMENTS" ON PAGE 26 TO READ AS FOLLOWS:
You must specify the subaccounts and/or Guaranteed Interest Account and
the percentage of scheduled premium payments to be allocated to those
subaccounts and/or Guaranteed Interest Account. If we do not receive a valid
set of allocation instructions from you, scheduled premiums will be allocated
to the Money Market Subaccount.
6. THE SECOND PARAGRAPH UNDER THE HEADING "PREMIUM PAYMENTS AFFECT THE
CONTINUATION OF THE POLICY" ON PAGE 27 IS AMENDED TO READ AS FOLLOWS:
Your Policy is guaranteed to remain in effect as long as:
(a) the Cash Value is greater than zero; or
(b) you have purchased the Guaranteed Death Benefit to Age 100 Rider
and you have met all the requirements of the rider; or
(c) 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. If you elected the Guaranteed Death Benefit to Age 100
Rider, this provision does not apply.
7. A NEW SECTION IS ADDED ABOVE THE SECTION ENTITLED "ALLOCATION OF NET
PREMIUMS" ON PAGE 28 TO READ AS FOLLOWS:
CHOICE OF DEFINITION OF LIFE INSURANCE
When applying for the policy, you will choose one of two tests to apply
to the Policy for compliance with the Federal tax law definition of life
insurance. These tests are the Cash Value Accumulation Test and the Guideline
Premium/Cash Value Corridor Test. The death benefit percentage applied to the
Policy varies according to the definition of life insurance chosen. See
"Federal Income Tax Considerations -- Definition of Life Insurance," on page
46. If you elect the Guaranteed Death Benefit to Age 100 Rider, you do not
get to choose your definition of life insurance. Electing this rider will
automatically give you the Cash Value Accumulation Test definition of life
insurance.
8. THE DESCRIPTION OF OPTION 1 AND OPTION 2 ON PAGE 29 IS REVISED TO READ AS
FOLLOWS:
Option 1 -- The death benefit equals the greater of
(a) the Specified Amount plus Additional Term Life Insurance, if any, or
(b) the Fund Value on the date of death multiplied by the death benefit
percentage.
The death benefit percentages varies according to the definition of life
insurance chosen. If the Guideline Premium/Cash Value Corridor Test is
chosen, the death benefit percentages vary according to the attained age of
the younger insured. If the Cash Value Accumulation Test is chosen, the death
benefit percentages vary according to attained age of the younger insured,
gender and smoking status. See "Federal Income Tax Considerations --
Definition of Life Insurance," page 46. A table showing the death benefit
percentages is in Appendix A to this prospectus and in your policy. If you
seek to have favorable
2
<PAGE> 7
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 plus Additional Term Life Insurance, if any,
plus the Fund Value, or
(b) the Fund Value on the date of death multiplied by the death benefit
percentage.
The death benefit percentages varies according to the definition of life
insurance chosen. If the Guideline Premium/Cash Value Corridor Test is
chosen, the death benefit percentages vary according to the attained age of
the younger insured. If the Cash Value Accumulation Test is chosen, the death
benefit percentages vary according to attained age of the younger insured,
gender and smoking status. 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.
9. "EXAMPLES OF OPTIONS 1 AND 2" ON PAGES 29-30 ARE AMENDED TO READ AS FOLLOWS:
Examples of Options 1 and 2
The following examples demonstrate the determination of death benefits
under Options 1 and 2. The examples show four policies with the same
Specified Amount, but Fund Values and the Additional Term Life Insurance 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 is
age 70 at the time of death and that there is no Outstanding Debt. The date
of death is also assumed to be on a monthly anniversary day.
Cash Value Accumulation Test
<TABLE>
<CAPTION>
Policy 1 Policy 2 Policy 3 Policy 4
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Specified Amount................................ $100,000 $100,000 $100,000 $100,000
Additional Term Life Insurance Rider............ $ 0 $ 0 $ 0 $ 75,000
Fund Value on Date of Death..................... $ 35,000 $ 60,000 $ 90,000 $ 60,000
Death Benefit Percentage........................ 183.6% 183.6% 183.6%% 183.6%
Death Benefit under Option 1.................... $100,000 $110,160 $165,240 $175,000
Death Benefit under Option 2.................... $135,000 $160,000 $190,000 $235,000
</TABLE>
<TABLE>
<S> <C>
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 and 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 1, Policy 4: The Death Benefit is equals $175,000 (the sum of the
Specified Amount plus the Additional Term Life Insurance),
since the death benefit is the greater of the Specified
Amount plus the Additional Term Life Insurance
($100,000 + $75,000 = $175,000) or the Fund Value multiplied
by the death benefit percentage
($60,000 X 183.6% = $110,160).
</TABLE>
3
<PAGE> 8
<TABLE>
<S> <C>
Option 2, Policy 1, 2 and 3: The death benefit equals the Specified Amount plus the Fund
Value ($100,000 + $35,000 = $135,000 for Policy 1;
$100,000 + $60,000 = $160,000 for Policy 2; and
$100,000 + $90,000 = $190,000 for Policy 3) since it is
greater than the Fund Value multiplied by the death benefit
percentage ($35,000 X 183.6% = $64,260 for Policy 1;
$60,000 X 183.6% = $110,160 for Policy 2; and
$90,000 X 183.6% = $165,240 for Policy 3).
Option 2, Policy 4: The death benefit equals the Specified Amount plus the
Additional Term Life Insurance plus the Fund Value
($100,000 + $75,000 + $60,000 = $235,000) since it is
greater than the Fund Value multiplied by the death benefit
percentage ($60,000 X 183.6% = $110,160).
</TABLE>
Guideline Premium/Cash Value Corridor Test
Cash Value Accumulation Test
<TABLE>
<CAPTION>
Policy 1 Policy 2 Policy 3 Policy 4
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Specified Amount................................ $100,000 $100,000 $100,000 $100,000
Additional Term Life Insurance Rider............ $ 0 $ 0 $ 0 $ 75,000
Fund Value on Date of Death..................... $ 35,000 $ 60,000 $ 90,000 $ 60,000
Death Benefit Percentage........................ 115% 115% 115% 115%
Death Benefit under Option 1.................... $100,000 $100,000 $103,500 $175,000
Death Benefit under Option 2.................... $135,000 $160,000 $185,000 $235,000
</TABLE>
<TABLE>
<S> <C>
Option 1, Policy 1 and 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 and
$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) is greater than the Specified
Amount ($100,000).
Option 1, Policy 4: The Death Benefit equals $175,000 (the sum of the Specified
Amount plus the Additional Term Life Insurance), since the
death benefit is the greater of the Specified Amount plus
the Additional Term Life Insurance
($100,000 + $75,000 = $175,000) or the Fund Value multiplied
by the death benefit percentage ($60,000 X 115% = $69,000).
Option 2, Policy 1, 2 and 3: The death benefit equals the Specified Amount plus the Fund
Value ($100,000 + $35,000 = $135,000 for Policy 1;
$100,000 + $60,000 = $160,000 for Policy 2; and
$100,000 + $90,000 = $190,000 for Policy 3) since it is
greater than 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; and
$90,000 X 115% = $103,500 for Policy 3).
Option 2, Policy 4: The death benefit equals the Specified Amount plus the
Additional Term Life Insurance plus the Fund Value
($100,000 + $75,000 + $60,000 = $235,000) since it is
greater than the Fund Value multiplied by the death benefit
percentage ($60,000 X 115% = $69,000).
</TABLE>
10. THE FIFTH SENTENCE IN THE SECOND PARAGRAPH UNDER THE HEADING "INCREASES" ON
PAGE 31 IS AMENDED TO READ AS FOLLOWS:
The Minimum Monthly Premium and the required premiums under the Guaranteed
Death Benefit to Age 100 Rider, if applicable, will also be adjusted.
4
<PAGE> 9
11. A NEW SECOND SENTENCE IS ADDED TO THE SECOND PARAGRAPH UNDER THE HEADING
"DECREASES" ON PAGE 32 TO READ AS FOLLOWS:
If you have a Guaranteed Death Benefit to Age 100 Rider, it will be adjusted
for the decrease in Specified Amount.
12. A NEW SECTION IS ADDED ON PAGE 32 IMMEDIATELY ABOVE THE HEADING "OTHER
OPTIONAL INSURANCE BENEFITS" TO READ AS FOLLOWS:
CHANGES IN ADDITIONAL TERM LIFE INSURANCE AMOUNT
A change in the Additional Term Life Insurance amount may be made at any
time after your Policy is issued. Changes will become effective on the
monthly anniversary day following the approval of the request to change the
Additional Term Life Insurance amount. Increases in the Additional Term Life
Insurance amount will be subject to evidence of insurability and will not be
permitted after the insured's age 85 (70 for qualified plans). Decreases on
a Policy with the Additional Term Life Insurance Rider will be applied in
the following order:
- Against the most recent increase, regardless if it is Specified Amount
increase or Additional Term Life Insurance increase;
- Against the next most recent increases successively, regardless if it
is Specified Amount increase or Additional Term Life Insurance
increase
- Against Additional Term Life Insurance provided under the original
application; and
- Against insurance provided by the Specified Amount under the original
application.
13. TWO NEW SUBSECTIONS ARE ADDED UNDER THE SECTION ENTITLED "OTHER OPTIONAL
INSURANCE BENEFITS" ON PAGE 32 TO READ AS FOLLOWS:
Guaranteed Death Benefit to Age 100 Rider
The Guaranteed Death Benefit to Age 100 Rider guarantees that during the
insured's lifetime, the Policy will not lapse regardless of the cash value.
Provided that certain conditions are met, a minimum death benefit equal to
the Specified Amount will be paid. To maintain the benefit, total premiums
paid less partial surrenders (excluding any partial surrender fees) less
outstanding debt must equal or exceed the cumulative required minimum
monthly premium to date. This rider is not available if you elect coverage
under the Guaranteed Death Benefit Rider, Term Life Term Rider and/or
Additional Term Life Insurance Rider.
Additional Term Life Insurance Rider
The Additional Term Life Insurance Rider provides you with a level death
benefit to age 100. The Additional Term Life Insurance Rider, unlike the
Term Life Term Rider, is combined with the Specified Amount of the Policy
for purposes of determining if the minimum "corridor" is required to
maintain the definition of life insurance under the Internal Revenue Code
section 7702 (See "Definition of Life Insurance" on page 46).
14. THE FIRST PARAGRAPH UNDER THE HEADING "GRACE PERIOD AND LAPSE" ON PAGE 39 IS
AMENDED TO READ AS FOLLOWS:
Your Policy will remain in effect as long as
(1) it has a Cash Value greater than zero,
(2) you have purchased the Guaranteed Death Benefit to Age 100 Rider,
and you have met all the requirements of the rider, and
(3) you make any required additional premium payments during the
61-day Grace Period.
Form No. 14431 SL (Supp 3/1/00) Registration No. 333-71677
5
<PAGE> 10
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
<PAGE> 11
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 12
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of the Policy....................................... 1
Important Policy Terms.................................... 1
Purpose of the Policy..................................... 1
Policy Premium Payments and Values........................ 1
Charges and Deductions.................................... 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....................... 24
Application for a Policy.................................. 24
Right to Examine a Policy -- Right to Return Policy
Period................................................. 26
Premiums.................................................. 26
Allocation of Net Premiums................................ 28
Death Benefits under the Policy........................... 28
Death Benefit Options..................................... 28
Changes in the Specified Amount........................... 31
Other Optional Insurance Benefits......................... 32
Option to Split Policy.................................... 32
Benefits at Maturity...................................... 33
Policy Values............................................. 33
Determination of Fund Value............................... 33
Calculating Unit Values for Each Subaccount............... 34
Determining Fund Value.................................... 35
Transfer of Fund Value.................................... 36
Right to Exchange Policy.................................. 36
Option to Obtain Paid-Up Insurance........................ 36
Policy Loans.............................................. 37
</TABLE>
i
<PAGE> 13
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Full Surrender............................................ 38
Partial Surrender......................................... 38
Grace Period and Lapse.................................... 39
Charges and Deductions...................................... 41
Deductions from Premiums.................................. 42
Daily Deduction from MONY Variable Account L.............. 42
Monthly Deductions from Fund Value........................ 43
Surrender Charge.......................................... 44
Corporate Purchasers...................................... 44
Transaction and Other Charges............................. 45
Guarantee of Certain Charges.............................. 45
Other Information........................................... 45
Federal Income Tax Considerations......................... 45
Charge for Company Income Taxes........................... 49
Voting of Fund Shares..................................... 50
Disregard of Voting Instructions.......................... 50
Report to Policy Owners................................... 51
Substitution of Investments and Right to Change
Operations............................................. 51
Changes to Comply with Law................................ 52
Performance Information..................................... 52
The Guaranteed Interest Account............................. 53
General Description....................................... 53
Death Benefit............................................. 53
Policy Charges............................................ 54
Transfers................................................. 54
Surrenders and Policy Loans............................... 54
More About the Policy....................................... 55
Ownership................................................. 55
Beneficiary............................................... 55
Notification and Claims Procedures........................ 55
Payments.................................................. 56
Payment Plan/Settlement Provisions........................ 56
Payment in Case of Suicide................................ 56
Assignment................................................ 56
Errors on the Application................................. 57
Incontestability.......................................... 57
Policy Illustrations...................................... 57
Distribution of the Policy................................ 57
More About the Company...................................... 58
Management................................................ 58
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
</TABLE>
ii
<PAGE> 14
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> 15
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.
2
<PAGE> 16
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.
<TABLE>
<S> <C> <C>
-----------------------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS
-----------------------------------------------------------------------------------------------
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.
-----------------------------------------------------------------------------------------------
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.
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
<PAGE> 17
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
<TABLE>
<CAPTION>
FUND/PORTFOLIO MANAGEMENT OTHER DISTRIBUTION TOTAL
-------------- FEES EXPENSES AND EXPENSES
---------- -------- SERVICE (12-b-1) --------
FEE
----------------
<S> <C> <C> <C> <C>
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> 18
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.
--------------------------------------------------------------------------------
FUND INVESTMENT ADVISER FEES
--------------------------------------------------------------------------------
MONY SERIES FUND, INC.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C> <C>
Government Securities Portfolio Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
Long Term Bond Portfolio Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
Intermediate Term Bond Portfolio Annual rate of 0.50% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
Money Market Portfolio Annual rate of 0.40% of the first $400
million, 0.35% of the next $400 million,
and 0.30% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
----------------------------------------------------------------------------------------
</TABLE>
ENTERPRISE ACCUMULATION TRUST
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C> <C>
Equity Portfolio Annual rate of 0.80% of the first $400
million, 0.75% of the next $400 million,
and 0.70% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
Managed Portfolio Annual rate of 0.80% of the first $400
million, 0.75% of the next $400 million,
and 0.70% in excess of $800 million of the
portfolio's aggregate average daily net
assets.
--------------------------------------------------------------------------------------------
Equity Income Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
Growth and Income Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
Growth Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 19
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Appreciation Portfolio Annual rate of 0.75% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
Small Company Growth Portfolio Annual rate of 1.00% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
Small Company Value Portfolio Annual rate of 0.80% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
International Growth Portfolio Annual rate of 0.85% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
High Yield Bond Portfolio Annual rate of 0.60% of the portfolio's
aggregate average daily net assets.
--------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------
DREYFUS STOCK INDEX FUND Annual rate of 0.25% of the fund's average
daily net assets.
--------------------------------------------------------------------------------------------
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH Annual rate of 0.75% of the fund's average
FUND, INC. daily net assets.
--------------------------------------------------------------------------------------------
FIDELITY VARIABLE INSURANCE PRODUCTS The fee is calculated by adding a group
FUND -- Growth Portfolio fee rate to an individual fee rate,
dividing by twelve, and multiplying the
result by the fund's average net assets
throughout the month. The group fee rate
is based on the average net assets of all
the mutual funds advised by FMR. This
group rate cannot rise above 0.52% for
this fund, and it drops as total assets
under management increase. The individual
fee rate for this fund is 0.30% of the
fund's average net assets.
--------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE> 20
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C> <C>
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.
--------------------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------------------
</TABLE>
JANUS ASPEN SERIES
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT ADVISER FEE
--------------------------------------------------------------------------------------------
<S> <C> <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>
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> 21
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> 22
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> 23
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> 24
UNDERSTANDING THE POLICY
The following chart may help you to understand how the policy works.
[HOW THE POLICY WORKS FLOW CHART]
11
<PAGE> 25
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> 26
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> 27
<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> 28
<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> 29
<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> 30
<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> 31
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> 32
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> 33
<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> 34
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> 35
<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> 36
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> 37
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> 38
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> 39
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> 40
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> 41
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> 42
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> 43
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.
30
<PAGE> 44
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.
31
<PAGE> 45
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
32
<PAGE> 46
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.
33
<PAGE> 47
- 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
34
<PAGE> 48
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]
35
<PAGE> 49
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.
36
<PAGE> 50
(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
37
<PAGE> 51
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
38
<PAGE> 52
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
39
<PAGE> 53
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.
40
<PAGE> 54
(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>
-----------------------------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS
-----------------------------------------------------------------------------------------------
<S> <C> <C>
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>
-----------------------------------------------------------------------------------------------
DAILY DEDUCTION FROM MONY VARIABLE ACCOUNT L
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Mortality & Expense Risk Charge -- Maximum .35% of subaccount value (0.000959% daily)
Annual Rate
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
-----------------------------------------------------------------------------------------------
MONTHLY DEDUCTIONS FROM FUND VALUE
-----------------------------------------------------------------------------------------------
<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> 55
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> 56
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> 57
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> 58
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> 59
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
46
<PAGE> 60
Through first two years -- $2,000
Through first three years -- $3,000 etc.
Under this test, a policy may or may not be a modified endowment contract. The
outcome depends on the amount of premiums paid during each of the policy's first
seven contract years. Changes in benefits may require testing to determine if
the policy is to be classified as a modified endowment contract. A modified
endowment contract is treated differently for tax purposes then a conventional
life insurance contract.
Conventional Life Insurance Policies
If a policy is not a modified endowment contract distributions are treated
as follows. Upon a full surrender or maturity of a policy for its Cash Value,
the excess if any, of the Cash Value plus Outstanding Debt minus the cost basis
under a policy will be treated as ordinary income for federal income tax
purposes. A policy's cost basis will usually equal the premiums paid less any
premiums previously recovered through partial surrenders. Under Section 7702 of
the Code, special rules apply to determine 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> 61
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> 62
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> 63
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> 64
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.
51
<PAGE> 65
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
52
<PAGE> 66
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
53
<PAGE> 67
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.
54
<PAGE> 68
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.
55
<PAGE> 69
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.)
56
<PAGE> 70
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.
57
<PAGE> 71
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>
58
<PAGE> 72
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
59
<PAGE> 73
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.
60
<PAGE> 74
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> 75
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 76
FINANCIAL STATEMENTS AND NOTES TO FINANCIAL STATEMENTS
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
With respect to MONY Variable Account L:
Statement of Assets and Liabilities as of September 30,
2000 (unaudited)....................................... F-2
Statement of Changes in Net Assets for the periods ended
September 30, 2000 (unaudited)......................... F-4
Statement of Operations for the periods ended September
30, 2000 (unaudited)................................... F-6
Notes to Financial Statements (unaudited)................. F-8
With respect to MONY Life Insurance Company:
Unaudited interim condensed consolidated balance sheets as
of September 30, 2000 and December 31, 1999............ F-11
Unaudited interim condensed consolidated statements of
income and comprehensive income for the three-month
periods ended September 30, 2000 and 1999.............. F-12
Unaudited interim condensed consolidated statements of
income and comprehensive income for the nine-month
periods ended September 30, 2000 and 1999.............. F-13
Unaudited interim condensed consolidated statement of
changes in shareholders' equity for the nine-month
period ended September 30, 2000........................ F-14
Unaudited interim condensed consolidated statements of
cash flows for the nine-month period ended September
30, 2000 and 1999...................................... F-15
Notes to unaudited interim condensed consolidated
financial statements................................... F-16
Consolidated balance sheets as of December 31, 1999 and
1998................................................... F-33
Consolidated statements of income and comprehensive income
for the years ended December 31, 1999, 1998 and 1997... F-34
Consolidated statements of changes in shareholder's equity
for the years ended December 31, 1999, 1998 and 1997... F-35
Consolidated statements of cash flows for the years ended
December 31, 1999, 1998 and 1997....................... F-36
Notes to consolidated financial statements................ F-38
</TABLE>
F-1
<PAGE> 77
MONY
VARIABLE ACCOUNT L
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------------------
MONY SERIES FUND, INC. ENTERPRISE ACCUMULATION TRUST
----------------------- --------------------------------------------------------------------
MONEY LONG TERM SMALL COMPANY INTERNATIONAL
MARKET BOND EQUITY VALUE MANAGED GROWTH GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
---------- ---------- ---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Shares held in respective
Funds......................... 60,801 337 269 417 83 775 4,412
======= ====== ======= ======= ====== ====== =======
Investments at cost............. $60,801 $4,205 $11,270 $13,354 $2,658 $6,255 $27,778
======= ====== ======= ======= ====== ====== =======
Investments in respective Funds,
at net asset value............ $60,801 $4,212 $ 9,214 $10,904 $1,972 $5,509 $25,416
Amount due from MONY............ 0 0 0 0 0 0 0
Amount due from respective
Funds......................... 0 0 74 74 0 0 0
------- ------ ------- ------- ------ ------ -------
Total assets............ 60,801 4,212 9,288 10,978 1,972 5,509 25,416
------- ------ ------- ------- ------ ------ -------
LIABILITIES
Amount due to MONY.............. 51 2 77 77 1 4 25
Amount due to respective
Funds......................... 0 0 0 0 0 0 0
------- ------ ------- ------- ------ ------ -------
Total liabilities....... 51 2 77 77 1 4 25
------- ------ ------- ------- ------ ------ -------
Net assets...................... $60,750 $4,210 $ 9,211 $10,901 $1,971 $5,505 $25,391
======= ====== ======= ======= ====== ====== =======
Net assets consist of:
Contractholders' net
payments.................... $59,040 $4,204 $ 9,007 $11,316 $1,993 $5,770 $27,553
Undistributed net investment
income (loss)............... 1,710 (2) 2,224 2,045 679 526 219
Accumulated net realized gain
(loss) on investments....... 0 1 36 (10) (15) (45) (19)
Net unrealized appreciation
(depreciation) of
investments................. 0 7 (2,056) (2,450) (686) (746) (2,362)
------- ------ ------- ------- ------ ------ -------
Net assets...................... $60,750 $4,210 $ 9,211 $10,901 $1,971 $5,505 $25,391
======= ====== ======= ======= ====== ====== =======
Number of units outstanding*.... 5,864 421 748 1,085 200 637 2,736
------- ------ ------- ------- ------ ------ -------
Net asset value per unit
outstanding*.................. $ 10.36 $10.00 $ 12.31 $ 10.05 $ 9.86 $ 8.64 $ 9.28
======= ====== ======= ======= ====== ====== =======
<CAPTION>
MONY CUSTOM ESTATE MASTER
---------------------------------------------------------
ENTERPRISE ACCUMULATION TRUST
---------------------------------------------------------
SMALL COMPANY EQUITY EQUITY HIGH
GROWTH INCOME GROWTH & INCOME YIELD
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------- ---------- --------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Shares held in respective
Funds......................... 793 1,437 1,371 879
====== ====== ====== ======
Investments at cost............. $6,735 $7,722 $8,693 $4,262
====== ====== ====== ======
Investments in respective Funds,
at net asset value............ $7,457 $7,805 $8,695 $4,201
Amount due from MONY............ 0 0 0 0
Amount due from respective
Funds......................... 0 0 0 0
------ ------ ------ ------
Total assets............ 7,457 7,805 8,695 4,201
------ ------ ------ ------
LIABILITIES
Amount due to MONY.............. 7 4 7 2
Amount due to respective
Funds......................... 0 0 0 0
------ ------ ------ ------
Total liabilities....... 7 4 7 2
------ ------ ------ ------
Net assets...................... $7,450 $7,801 $8,688 $4,199
====== ====== ====== ======
Net assets consist of:
Contractholders' net
payments.................... $6,666 $7,676 $8,661 $4,204
Undistributed net investment
income (loss)............... 43 30 15 56
Accumulated net realized gain
(loss) on investments....... 19 12 10 0
Net unrealized appreciation
(depreciation) of
investments................. 722 83 2 (61)
------ ------ ------ ------
Net assets...................... $7,450 $7,801 $8,688 $4,199
====== ====== ====== ======
Number of units outstanding*.... 670 748 858 420
------ ------ ------ ------
Net asset value per unit
outstanding*.................. $11.12 $10.43 $10.13 $10.00
====== ====== ====== ======
</TABLE>
---------------
* Units outstanding have been rounded for presentation purposes.
See notes to financial statements.
F-2
<PAGE> 78
MONY
VARIABLE ACCOUNT L
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
------------------------------------------------------------------------------------------------
ENTERPRISE ACCUMULATION
TRUST FIDELITY VARIABLE INSURANCE DREYFUS FUND JANUS ASPEN SERIES
------------------------- ------------------------------------------ -----------------------
VIP III
CAPITAL MULTI-CAP VIP VIP II GROWTH AGGRESSIVE
APPRECIATION GROWTH GROWTH CONTRAFUND OPPORTUNITIES GROWTH BALANCED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ---------- ----------- ----------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Shares held in respective
Funds.......................... 1,280 1,242 135 437 78 281 78
======= ======= ====== ======= ====== ======= ======
Investments at cost.............. $10,260 $16,455 $6,907 $11,051 $1,669 $15,557 $2,087
======= ======= ====== ======= ====== ======= ======
Investments in respective Funds,
at net asset value............. $10,100 $16,171 $6,674 $11,066 $1,545 $14,845 $1,962
Amount due from MONY............. 0 0 0 0 0 0 0
Amount due from respective
Funds.......................... 0 0 0 74 0 0 0
------- ------- ------ ------- ------ ------- ------
Total assets............. 10,100 16,171 6,674 11,140 1,545 14,845 1,962
------- ------- ------ ------- ------ ------- ------
LIABILITIES
Amount due to MONY............... 9 13 6 78 1 13 2
Amount due to respective Funds... 0 0 0 0 0 0 0
------- ------- ------ ------- ------ ------- ------
Total liabilities........ 9 13 6 78 1 13 2
------- ------- ------ ------- ------ ------- ------
Net assets....................... $10,091 $16,158 $6,668 $11,062 $1,544 $14,832 $1,960
======= ======= ====== ======= ====== ======= ======
Net assets consist of:
Contractholders' net
payments..................... $ 9,775 $16,520 $6,754 $11,050 $1,576 $14,760 $1,921
Undistributed net investment
income (loss)................ 484 (9) 152 (4) 104 920 166
Accumulated net realized gain
(loss) on investments........ (8) (69) (5) 1 (12) (136) (2)
Net unrealized appreciation
(depreciation) of
investments.................. (160) (284) (233) 15 (124) (712) (125)
------- ------- ------ ------- ------ ------- ------
Net assets....................... $10,091 $16,158 $6,668 $11,062 $1,544 $14,832 $1,960
======= ======= ====== ======= ====== ======= ======
Number of units outstanding*..... 999 1,804 630 1,100 158 1,667 190
------- ------- ------ ------- ------ ------- ------
Net asset value per unit
outstanding*................... $ 10.10 $ 8.96 $10.58 $ 10.06 $ 9.77 $ 8.90 $10.32
======= ======= ====== ======= ====== ======= ======
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------
JANUS ASPEN SERIES
------------------------- DREYFUS
DREYFUS SOCIALLY
CAPITAL WORLDWIDE STOCK RESPONSIBLE
APPRECIATION GROWTH INDEX GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
ASSETS
Shares held in respective
Funds.......................... 403 436 521 169
======= ======= ======= ======
Investments at cost.............. $12,890 $20,200 $19,961 $6,946
======= ======= ======= ======
Investments in respective Funds,
at net asset value............. $13,144 $18,529 $19,580 $6,734
Amount due from MONY............. 0 0 0 0
Amount due from respective
Funds.......................... 0 74 0 74
------- ------- ------- ------
Total assets............. 13,144 18,603 19,580 6,808
------- ------- ------- ------
LIABILITIES
Amount due to MONY............... 11 86 18 75
Amount due to respective Funds... 0 0 0 0
------- ------- ------- ------
Total liabilities........ 11 86 18 75
------- ------- ------- ------
Net assets....................... $13,133 $18,517 $19,562 $6,733
======= ======= ======= ======
Net assets consist of:
Contractholders' net
payments..................... $12,896 $19,372 $19,862 $6,948
Undistributed net investment
income (loss)................ 50 818 50 (1)
Accumulated net realized gain
(loss) on investments........ (67) (2) 31 (2)
Net unrealized appreciation
(depreciation) of
investments.................. 254 (1,671) (381) (212)
------- ------- ------- ------
Net assets....................... $13,133 $18,517 $19,562 $6,733
======= ======= ======= ======
Number of units outstanding*..... 1,463 1,863 1,923 695
------- ------- ------- ------
Net asset value per unit
outstanding*................... $ 8.98 $ 9.94 $ 10.17 $ 9.69
======= ======= ======= ======
</TABLE>
---------------
* Units outstanding have been rounded for presentation purposes.
See notes to financial statements.
F-3
<PAGE> 79
MONY
VARIABLE ACCOUNT L
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------
MONY SERIES FUND, INC. ENTERPRISE ACCUMULATION TRUST
------------------------------- ------------------------------------------------
SMALL
MONEY LONG TERM COMPANY
MARKET BOND EQUITY VALUE MANAGED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT* SUBACCOUNT
-------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FEBRUARY 11, AUGUST 8, JANUARY 4, APRIL 10, APRIL 10,
2000** 2000** 2000** 2000*** 2000**
THROUGH THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss)........ $ 1,710 $ (2) $ 2,224 $ 2,045 $ 679
Net realized gain (loss) on
investments....................... 0 1 36 (10) (15)
Net change in unrealized
appreciation (depreciation) of
investments....................... 0 7 (2,056) (2,450) (686)
------- ------ ------- ------- ------
Net increase (decrease) in net assets
resulting from operations........... 1,710 6 204 (415) (22)
------- ------ ------- ------- ------
From unit transactions:
Net proceeds from the issuance of
units............................. 62,533 4,416 9,330 11,621 2,139
Net asset value of units redeemed or
used to meet contract
obligations....................... (3,493) (212) (323) (305) (146)
------- ------ ------- ------- ------
Net increase from unit transactions... 59,040 4,204 9,007 11,316 1,993
------- ------ ------- ------- ------
Net increase in net assets............ 60,750 4,210 9,211 10,901 1,971
Net assets beginning of period........ 0 0 0 0 0
------- ------ ------- ------- ------
Net assets end of period*............. $60,750 $4,210 $ 9,211 $10,901 $1,971
======= ====== ======= ======= ======
Unit transactions:
Units outstanding beginning of
period............................ 0 0 0 0 0
Units issued during the period...... 6,207 442 775 1,115 215
Units redeemed during the period.... (343) (21) (27) (30) (15)
------- ------ ------- ------- ------
Units outstanding end of period....... 5,864 421 748 1,085 200
======= ====== ======= ======= ======
---------------
* Includes undistributed net
investment income (loss) of: $ 1,710 $ (2) $ 2,224 $ 2,045 $ 679
======= ====== ======= ======= ======
** Commencement of operations
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------
ENTERPRISE ACCUMULATION TRUST
----------------------------------------------------------------------------------
SMALL EQUITY
INTERNATIONAL COMPANY EQUITY GROWTH &
GROWTH GROWTH GROWTH INCOME INCOME
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
JANUARY 4, JANUARY 4, JANUARY 4, APRIL 10, MAY 30,
2000** 2000** 2000** 2000** 2000**
THROUGH THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss)........ $ 526 $ 219 $ 43 $ 30 $ 15
Net realized gain (loss) on
investments....................... (45) (19) 19 12 10
Net change in unrealized
appreciation (depreciation) of
investments....................... (746) (2,362) 722 83 2
------ ------- ------ ------ ------
Net increase (decrease) in net assets
resulting from operations........... (265) (2,162) 784 125 27
------ ------- ------ ------ ------
From unit transactions:
Net proceeds from the issuance of
units............................. 6,204 29,108 7,085 8,147 9,117
Net asset value of units redeemed or
used to meet contract
obligations....................... (434) (1,555) (419) (471) (456)
------ ------- ------ ------ ------
Net increase from unit transactions... 5,770 27,553 6,666 7,676 8,661
------ ------- ------ ------ ------
Net increase in net assets............ 5,505 25,391 7,450 7,801 8,688
Net assets beginning of period........ 0 0 0 0 0
------ ------- ------ ------ ------
Net assets end of period*............. $5,505 $25,391 $7,450 $7,801 $8,688
====== ======= ====== ====== ======
Unit transactions:
Units outstanding beginning of
period............................ 0 0 0 0 0
Units issued during the period...... 685 2,893 710 794 903
Units redeemed during the period.... (48) (157) (40) (46) (45)
------ ------- ------ ------ ------
Units outstanding end of period....... 637 2,736 670 748 858
====== ======= ====== ====== ======
---------------
* Includes undistributed net
investment income (loss) of: $ 526 $ 219 $ 43 $ 30 $ 15
====== ======= ====== ====== ======
** Commencement of operations
<CAPTION>
MONY CUSTOM ESTATE MASTER
--------------
ENTERPRISE ACCUMULATION TRUST
--------------
HIGH
YIELD
SUBACCOUNT
--------------
FOR THE PERIOD
AUGUST 8,
2000**
THROUGH
SEPTEMBER 30,
2000
(UNAUDITED)
--------------
<S> <C>
From operations:
Net investment income (loss)........ $ 56
Net realized gain (loss) on
investments....................... 0
Net change in unrealized
appreciation (depreciation) of
investments....................... (61)
------
Net increase (decrease) in net assets
resulting from operations........... (5)
------
From unit transactions:
Net proceeds from the issuance of
units............................. 4,416
Net asset value of units redeemed or
used to meet contract
obligations....................... (212)
------
Net increase from unit transactions... 4,204
------
Net increase in net assets............ 4,199
Net assets beginning of period........ 0
------
Net assets end of period*............. $4,199
======
Unit transactions:
Units outstanding beginning of
period............................ 0
Units issued during the period...... 441
Units redeemed during the period.... (21)
------
Units outstanding end of period....... 420
======
---------------
* Includes undistributed net
investment income (loss) of: $ 56
======
** Commencement of operations
</TABLE>
See notes to financial statements.
F-4
<PAGE> 80
MONY
VARIABLE ACCOUNT L
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------
ENTERPRISE ACCUMULATION
TRUST FIDELITY VARIABLE INSURANCE PRODUCTS FUND
------------------------------- ------------------------------------------------
VIP III
CAPITAL MULTI-CAP VIP VIP II GROWTH
APPRECIATION GROWTH GROWTH CONTRAFUND OPPORTUNITIES
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- -------------- -------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
JANUARY 14, JANUARY 14, JANUARY 4, JULY 6, JANUARY 4,
2000** 2000** 2000** 2000*** 2000**
THROUGH THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income (loss)........ $ 484 $ (9) $ 152 $ (4) $ 104
Net realized gain (loss) on
investments....................... (8) (69) (5) 1 (12)
Net change in unrealized
appreciation (depreciation) of
investments....................... (160) (284) (233) 15 (124)
------- ------- ------ ------- ------
Net increase (decrease) in net assets
resulting from operations........... 316 (362) (86) 12 (32)
------- ------- ------ ------- ------
From unit transactions:
Net proceeds from the issuance of
units............................. 10,418 17,345 7,149 11,261 1,790
Net asset value of units redeemed or
used to meet contract
obligations....................... (643) (825) (395) (211) (214)
------- ------- ------ ------- ------
Net increase from unit transactions... 9,775 16,520 6,754 11,050 1,576
------- ------- ------ ------- ------
Net increase in net assets............ 10,091 16,158 6,668 11,062 1,544
Net assets beginning of period........ 0 0 0 0 0
------- ------- ------ ------- ------
Net assets end of period*............. $10,091 $16,158 $6,668 $11,062 $1,544
======= ======= ====== ======= ======
Unit transactions:
Units outstanding beginning of
period............................ 0 0 0 0 0
Units issued during the period...... 1,064 1,893 666 1,121 179
Units redeemed during the period.... (65) (89) (36) (21) (21)
------- ------- ------ ------- ------
Units outstanding end of period....... 999 1,804 630 1,100 158
======= ======= ====== ======= ======
---------------
* Includes undistributed net
investment income (loss) of: $ 484 $ (9) $ 152 $ (4) $ 104
======= ======= ====== ======= ======
** Commencement of operations
<CAPTION>
MONY CUSTOM ESTATE MASTER
-----------------------------------------------------------------
JANUS ASPEN SERIES
-----------------------------------------------------------------
AGGRESSIVE CAPITAL WORLDWIDE
GROWTH BALANCED APPRECIATION GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
APRIL 7, JANUARY 4, APRIL 7, JANUARY 4,
2000** 2000** 2000** 2000**
THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
From operations:
Net investment income (loss)........ $ 920 $ 166 $ 50 $ 818
Net realized gain (loss) on
investments....................... (136) (2) (67) (2)
Net change in unrealized
appreciation (depreciation) of
investments....................... (712) (125) 254 (1,671)
------- ------ ------- -------
Net increase (decrease) in net assets
resulting from operations........... 72 39 237 (855)
------- ------ ------- -------
From unit transactions:
Net proceeds from the issuance of
units............................. 15,471 2,174 13,472 20,100
Net asset value of units redeemed or
used to meet contract
obligations....................... (711) (253) (576) (728)
------- ------ ------- -------
Net increase from unit transactions... 14,760 1,921 12,896 19,372
------- ------ ------- -------
Net increase in net assets............ 14,832 1,960 13,133 18,517
Net assets beginning of period........ 0 0 0 0
------- ------ ------- -------
Net assets end of period*............. $14,832 $1,960 $13,133 $18,517
======= ====== ======= =======
Unit transactions:
Units outstanding beginning of
period............................ 0 0 0 0
Units issued during the period...... 1,745 214 1,527 1,932
Units redeemed during the period.... (78) (24) (64) (69)
------- ------ ------- -------
Units outstanding end of period....... 1,667 190 1,463 1,863
======= ====== ======= =======
---------------
* Includes undistributed net
investment income (loss) of: $ 920 $ 166 $ 50 $ 818
======= ====== ======= =======
** Commencement of operations
<CAPTION>
MONY CUSTOM ESTATE MASTER
-------------------------------
DREYFUS
-------------------------------
SOCIALLY
RESPONSIBLE
STOCK INDEX GROWTH FUND,
FUND INC.
SUBACCOUNT SUBACCOUNT
-------------- --------------
FOR THE PERIOD FOR THE PERIOD
MAY 3, SEPTEMBER 13,
2000** 2000**
THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30,
2000 2000
(UNAUDITED) (UNAUDITED)
-------------- --------------
<S> <C> <C>
From operations:
Net investment income (loss)........ $ 50 $ (1)
Net realized gain (loss) on
investments....................... 31 (2)
Net change in unrealized
appreciation (depreciation) of
investments....................... (381) (212)
------- ------
Net increase (decrease) in net assets
resulting from operations........... (300) (215)
------- ------
From unit transactions:
Net proceeds from the issuance of
units............................. 20,742 7,022
Net asset value of units redeemed or
used to meet contract
obligations....................... (880) (74)
------- ------
Net increase from unit transactions... 19,862 6,948
------- ------
Net increase in net assets............ 19,562 6,733
Net assets beginning of period........ 0 0
------- ------
Net assets end of period*............. $19,562 $6,733
======= ======
Unit transactions:
Units outstanding beginning of
period............................ 0 0
Units issued during the period...... 2,007 702
Units redeemed during the period.... (84) (7)
------- ------
Units outstanding end of period....... 1,923 695
======= ======
---------------
* Includes undistributed net
investment income (loss) of: $ 50 $ (1)
======= ======
** Commencement of operations
</TABLE>
See notes to financial statements.
F-5
<PAGE> 81
MONY
VARIABLE ACCOUNT L
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------
MONY SERIES FUND, INC. ENTERPRISE ACCUMULATION TRUST
------------------------------- ------------------------------------------------
SMALL
MONEY LONG TERM COMPANY
MARKET BOND EQUITY VALUE MANAGED
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
FEBRUARY 11, AUGUST 8, JANUARY 4, APRIL 10, APRIL 10,
2000** 2000** 2000** 2000** 2000**
THROUGH THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Dividend Income.................. $1,817 $0 $ 60 $ 16 $ 41
Distribution from capital gain... 0 0 2,170 2,034 639
Mortality and expense risk
charges........................ (107) (2) (6) (5) (1)
------ -- ------- ------- -----
Net investment income (loss)..... 1,710 (2) 2,224 2,045 679
------ -- ------- ------- -----
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. 0 1 36 (10) (15)
Net change in unrealized
appreciation (depreciation)
of investments............... 0 7 (2,056) (2,450) (686)
------ -- ------- ------- -----
Net realized and unrealized gain
(loss) on investments.......... 0 8 (2,020) (2,460) (701)
------ -- ------- ------- -----
Net increase (decrease) in net
assets resulting from
operations..................... $1,710 $6 $ 204 $ (415) $ (22)
====== == ======= ======= =====
<CAPTION>
MONY CUSTOM ESTATE MASTER
------------------------------------------------
ENTERPRISE ACCUMULATION TRUST
------------------------------------------------
SMALL
INTERNATIONAL COMPANY
GROWTH GROWTH GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
JANUARY 4, JANUARY 4, JANUARY 14,
2000** 2000** 2000**
THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- --------------
<S> <C> <C> <C>
Dividend Income.................. $ 11 $ 26 $ 0
Distribution from capital gain... 522 224 52
Mortality and expense risk
charges........................ (7) (31) (9)
----- ------- ----
Net investment income (loss)..... 526 219 43
----- ------- ----
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. (45) (19) 19
Net change in unrealized
appreciation (depreciation)
of investments............... (746) (2,362) 722
----- ------- ----
Net realized and unrealized gain
(loss) on investments.......... (791) (2,381) 741
----- ------- ----
Net increase (decrease) in net
assets resulting from
operations..................... $(265) $(2,162) $784
===== ======= ====
<CAPTION>
MONY CUSTOM ESTATE MASTER
------------------------------------------------
ENTERPRISE ACCUMULATION TRUST
------------------------------------------------
EQUITY
EQUITY GROWTH & HIGH
INCOME INCOME YIELD
SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
APRIL 10, MAY 30, AUGUST 8,
2000** 2000** 2000**
THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- --------------
<S> <C> <C> <C>
Dividend Income.................. $ 35 $23 $58
Distribution from capital gain... 0 0 0
Mortality and expense risk
charges........................ (5) (8) (2)
---- --- ---
Net investment income (loss)..... 30 15 56
---- --- ---
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. 12 10 0
Net change in unrealized
appreciation (depreciation)
of investments............... 83 2 (61)
---- --- ---
Net realized and unrealized gain
(loss) on investments.......... 95 12 (61)
---- --- ---
Net increase (decrease) in net
assets resulting from
operations..................... $125 $27 $(5)
==== === ===
</TABLE>
---------------
** Commencement of operations
See notes to financial statements.
F-6
<PAGE> 82
MONY
VARIABLE ACCOUNT L
STATEMENTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
MONY CUSTOM ESTATE MASTER
----------------------------------------------------------------------------------
ENTERPRISE ACCUMULATION
TRUST FIDELITY VARIABLE INSURANCE PRODUCTS FUND
------------------------------- ------------------------------------------------
VIP III
CAPITAL MULTI-CAP VIP VIP II GROWTH
APPRECIATION GROWTH GROWTH CONTRAFUND OPPORTUNITIES
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
JANUARY 14, JANUARY 14, JANUARY 4, JULY 6, JANUARY 4,
2000** 2000** 2000** 2000** 2000**
THROUGH THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Dividend income.................. $ 0 $ 0 $ 160 $ 0 $ 107
Distribution from capital gain... 496 8 0 0 0
Mortality and expense risk
charges........................ (12) (17) (8) (4) (3)
----- ----- ----- --- -----
Net investment income (loss)..... 484 (9) 152 (4) 104
----- ----- ----- --- -----
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. (8) (69) (5) 1 (12)
Net change in unrealized
appreciation (depreciation)
of investments............... (160) (284) (233) 15 (124)
----- ----- ----- --- -----
Net realized and unrealized gain
(loss) on investments.......... (168) (353) (238) 16 (136)
----- ----- ----- --- -----
Net increase (decrease) in net
assets resulting from
operations..................... $ 316 $(362) $ (86) $12 $ (32)
===== ===== ===== === =====
<CAPTION>
MONY CUSTOM ESTATE MASTER
-----------------------------------------------------------------
JANUS ASPEN SERIES
-----------------------------------------------------------------
AGGRESSIVE CAPITAL WORLDWIDE
GROWTH BALANCED APPRECIATION GROWTH
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------- -------------- -------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
APRIL 7, JANUARY 4, APRIL 7, JANUARY 4,
2000** 2000** 2000** 2000**
THROUGH THROUGH THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
2000 2000 2000 2000
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Dividend income.................. $ 935 $ 169 $ 62 $ 833
Distribution from capital gain... 0 0 0 0
Mortality and expense risk
charges........................ (15) (3) (12) (15)
----- ----- ---- -------
Net investment income (loss)..... 920 166 50 818
----- ----- ---- -------
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. (136) (2) (67) (2)
Net change in unrealized
appreciation (depreciation)
of investments............... (712) (125) 254 (1,671)
----- ----- ---- -------
Net realized and unrealized gain
(loss) on investments.......... (848) (127) 187 (1,673)
----- ----- ---- -------
Net increase (decrease) in net
assets resulting from
operations..................... $ 72 $ 39 $237 $ (855)
===== ===== ==== =======
<CAPTION>
MONY CUSTOM ESTATE MASTER
-------------------------------
DREYFUS
-------------------------------
SOCIALLY
RESPONSIBLE
STOCK INDEX GROWTH FUND,
FUND INC.
SUBACCOUNT SUBACCOUNT
-------------- --------------
FOR THE PERIOD FOR THE PERIOD
MAY 3, SEPTEMBER 13,
2000 ** 2000**
THROUGH THROUGH
SEPTEMBER 30, SEPTEMBER 30,
2000 2000
(UNAUDITED) (UNAUDITED)
-------------- --------------
<S> <C> <C>
Dividend income.................. $ 69 $ 0
Distribution from capital gain... 0 0
Mortality and expense risk
charges........................ (19) (1)
----- -----
Net investment income (loss)..... 50 (1)
----- -----
Realized and unrealized gain
(loss) on investments:
Net realized gain (loss) on
investments.................. 31 (2)
Net change in unrealized
appreciation (depreciation)
of investments............... (381) (212)
----- -----
Net realized and unrealized gain
(loss) on investments.......... (350) (214)
----- -----
Net increase (decrease) in net
assets resulting from
operations..................... $(300) $(215)
===== =====
</TABLE>
---------------
** Commencement of operations
See notes to financial statements.
F-7
<PAGE> 83
MONY
VARIABLE ACCOUNT L
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND BUSINESS
MONY Variable Account L (the "Variable Account") is a separate investment
account established on November 28, 1990 by MONY Life Insurance Company
("MONY"), under the laws of the State of New York.
The Variable Account operates as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act"). The Variable Account holds
assets that are segregated from all of MONY's other assets and, at present, is
used to support Flexible Premium Variable Life Insurance policies, which include
Variable Life (Strategist) Variable Universal Life (MONYEquity Master, MONY
Custom Equity Master and MONY Custom Estate Master). These policies are issued
by MONY. For presentation purposes, the information related only to the Variable
Universal Life Insurance policies (MONY Custom Estate Master) is presented here.
There are twenty-five MONY Custom Estate Master Subaccounts within the
Variable Account, each of which invests only in a corresponding portfolio of the
MONY Series Fund, Inc. (the "Fund"), the Enterprise Accumulation Trust
("Enterprise"), Dreyfus Stock Index Fund, The Dreyfus Socially Responsible
Growth Fund, Inc., Fidelity Variable Insurance Products Funds, or Janus Aspen
Series (collectively, the "Funds"). Twenty-two subaccounts of the MONY Custom
Estate Master commenced operations as of September 30,2000 The Funds are
registered under the 1940 Act as an open end, diversified, management investment
companies The Fund and Enterprise are affiliated with MONY.
A full presentation of the related financial statements and footnotes of
the Funds are contained on pages hereinafter and should be read in conjunction
with these financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
Investment:
The investment in shares of each of the respective Funds' portfolio is
stated at value which is the net asset value of the respective portfolio as
reported by such portfolio. Net asset values are based upon market or fair
valuations of the securities held in each of the corresponding portfolios of the
Funds. For the money market portfolios, the net asset value is based on
amortized cost of the securities held, which approximates market value.
Investment Transactions and Investment Income:
Investments in the portfolios of the Funds are recorded on the trade date.
Realized gains and losses on redemption of investments in the portfolios of the
Funds are determined on the identified cost basis. Dividend income is recorded
on ex-dividend date. Dividend income includes distributions of investment income
and capital gains received from the respective portfolios of the Funds. Dividend
income received is reinvested in additional shares of the respective portfolios
of the Funds.
Taxes:
MONY is currently taxed as a life insurance company and will include the
Variable Account's operations in its tax return. MONY does not expect, based on
current tax law, to incur any income tax burden upon the earnings or realized
capital gains attributable to the Variable Account. Based on this expectation,
no charges are currently being deducted from the Variable Account for Federal
income tax purposes.
F-8
<PAGE> 84
MONY
VARIABLE ACCOUNT L
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. RELATED PARTY TRANSACTIONS
MONY is the legal owner of the assets held by the Variable Account.
Policy premiums received from MONY by the Variable Account represent gross
policy premiums recorded by MONY less deductions retained as compensation for
certain sales distribution expenses and premium taxes.
The cost of insurance, administration charges, and, if applicable, the cost
of any optional benefits added by riders to the insurance policies are deducted
monthly from the cash value of the contract to compensate MONY . A surrender
charge may be imposed by MONY when a full or partial surrender is requested by
the policyholders. These deductions are treated as contractholder redemptions by
the Variable Account. The amount deducted for the MONY Custom Estate Master
Subaccounts for the nine months ended September 30, 2000 aggregated $13,535.
MONY receives from the Variable Account the amounts deducted for mortality
and expense risks at an annual rate of 0.35% of the average daily net assets of
each of the MONY Custom Estate Master subaccounts. As investment adviser to the
Fund, it receives amounts paid by the Fund for those services.
Enterprise Capital Management, Inc., a wholly-owned subsidiary of MONY,
acts as investment adviser to the portfolios of Enterprise, and it receives
amounts paid by Enterprise for those services.
4. INVESTMENT TRANSACTIONS:
Cost of shares acquired and proceeds from shares redeemed by each
subaccount during the nine months ended September 30, 2000 were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM
MONY CUSTOM ESTATE MASTER SUBACCOUNTS SHARES ACQUIRED SHARES REDEEMED
------------------------------------- --------------- ---------------
<S> <C> <C>
MONY Series Fund, Inc.
Money Market Portfolio.................................. $63,381 $4,397
Long Term Portfolio..................................... 4,416 212
Enterprise Accumulation Trust
Equity Portfolio........................................ 9,330 326
Small Company Value Portfolio........................... 11,620 306
Managed Portfolio....................................... 2,139 146
International Growth Portfolio.......................... 6,204 438
Growth Portfolio........................................ 29,108 1,562
Small Company Growth Portfolio.......................... 7,085 421
Equity Income Portfolio................................. 8,147 471
Capital Appreciation Portfolio.......................... 10,417 646
Multi-Cap Growth Portfolio.............................. 17,344 828
Growth & Income Portfolio............................... 9,117 457
High Yield Portfolio.................................... 4,416 212
Balanced Portfolio...................................... 2,358 2,334
Fidelity Variable Insurance Products Funds
VIP Growth Portfolio.................................... 7,149 397
VIP II Contrafund Portfolio............................. 11,261 211
VIP III Growth Opportunities Portfolio.................. 1,790 215
</TABLE>
F-9
<PAGE> 85
MONY
VARIABLE ACCOUNT L
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. INVESTMENT TRANSACTIONS (CONTINUED)
<TABLE>
<CAPTION>
COST OF PROCEEDS FROM
MONY CUSTOM ESTATE MASTER SUBACCOUNTS SHARES ACQUIRED SHARES REDEEMED
------------------------------------- --------------- ---------------
<S> <C> <C>
Janus Aspen Series
Aggressive Growth Portfolio............................. $15,471 $ 713
Balanced Portfolio...................................... 2,174 254
Capital Appreciation Portfolio.......................... 13,472 577
Worldwide Growth Portfolio.............................. 20,099 731
Dreyfus
Stock Index Portfolio................................... 20,742 881
Socially Responsible Portfolio.......................... 7,022 74
</TABLE>
F-10
<PAGE> 86
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS
Investments:
Fixed maturity securities available for sale, at fair
value.................................................. $ 3,083.5 $ 3,066.7
Equity securities available for sale, at fair value....... 537.5 519.8
Mortgage loans on real estate............................. 1,119.3 1,270.4
Policy loans.............................................. 78.7 69.1
Real estate to be disposed of............................. 235.7 300.9
Real estate held for investment........................... 46.6 46.2
Other invested assets..................................... 90.0 37.9
--------- ---------
5,191.3 5,311.0
========= =========
Cash and cash equivalents................................... 278.5 232.6
Accrued investment income................................... 76.8 74.6
Amounts due from reinsurers................................. 485.2 488.0
Deferred policy acquisition costs........................... 636.4 558.3
Other assets................................................ 529.9 348.3
Assets transferred in Group Pension Transaction (Note 4).... 4,980.8 5,109.8
Separate account assets..................................... 6,103.0 6,398.3
Closed Block assets (Note 6)................................ 6,218.2 6,182.1
--------- ---------
Total assets........................................... $24,500.1 $24,703.0
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Future policy benefits...................................... $ 972.7 $ 954.3
Policyholders' account balances............................. 1,908.7 1,942.9
Other policyholders' liabilities............................ 117.0 120.4
Amounts due to reinsurers................................... 87.4 83.8
Accounts payable and other liabilities...................... 574.0 580.9
Short-term debt............................................. 52.8 53.4
Long-term debt.............................................. 217.0 245.4
Current federal income taxes payable........................ 130.7 147.4
Deferred federal income taxes............................... 52.1 (16.9)
Liabilities transferred in Group Pension Transaction (Note
4)........................................................ 4,968.7 5,099.1
Separate account liabilities................................ 6,100.6 6,396.2
Closed Block liabilities (Note 6)........................... 7,310.3 7,303.3
--------- ---------
Total liabilities...................................... 22$,492.0... $22,910.2
========= =========
Commitments and contingencies (Note 5)
Common stock, $1.0 par value; 2.5 million shares authorized
and outstanding........................................... $ 2.5 $ 2.5
Capital in excess of par.................................... 1,628.6 1,563.6
Retained earnings........................................... 397.5 256.1
Accumulated other comprehensive (loss)...................... (20.5) (29.4)
--------- ---------
Total shareholders' equity............................. 2,008.1 1,792.8
--------- ---------
Total liabilities and shareholders' equity............. $24,500.1 $24,703.0
========= =========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-11
<PAGE> 87
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
--------- ---------
($ IN MILLIONS, EXCEPT
SHARE DATA AND PER
SHARE AMOUNTS)
<S> <C> <C>
REVENUES:
Premiums.................................................... $ 26.5 $ 20.8
Universal life and investment-type product policy fees...... 51.2 47.8
Net investment income....................................... 130.8 123.9
Net realized (losses)/gains on investments.................. 20.3 22.5
Group Pension Profits (Note 4).............................. 10.8 21.5
Other income................................................ 51.7 47.2
Contribution from the Closed Block (Note 6)................. 10.7 9.5
------ ------
302.0 293.2
------ ------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 46.0 34.9
Interest credited to policyholders' account balances........ 26.7 26.4
Amortization of deferred policy acquisition costs........... 16.0 21.9
Dividends to policyholders.................................. 0.6 0.7
Other operating costs and expenses.......................... 111.5 164.8
------ ------
200.8 248.7
------ ------
Income before income taxes and extraordinary item........... 101.2 44.5
Income tax expense.......................................... 33.6 15.3
------ ------
Income before extraordinary item............................ 67.6 29.2
Extraordinary loss, net of tax.............................. 1.0 1.9
------ ------
Net income.................................................. 66.6 27.3
Other comprehensive loss, net............................... 34.7 (28.5)
------ ------
Comprehensive income/(loss)................................. $101.3 $ (1.2)
====== ======
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements
F-12
<PAGE> 88
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
----------- ----------
($ IN MILLIONS, EXCEPT
SHARE DATA AND PER SHARE
AMOUNTS)
<S> <C> <C>
REVENUES:
Premiums.................................................... $ 84.4 $ 65.0
Universal life and investment-type product policy fees...... 157.0 145.7
Net investment income....................................... 514.1 320.7
Net realized gains on investments........................... 36.9 93.1
Group Pension Profits (Note 4).............................. 29.0 47.8
Other income................................................ 172.3 138.9
Contribution from the Closed Block (Note 6)................. 32.1 31.4
-------- -------
1,025.8 842.6
-------- -------
BENEFITS AND EXPENSES:
Benefits to policyholders................................... 126.9 108.3
Interest credited to policyholders' account balances........ 76.6 80.7
Amortization of deferred policy acquisition costs........... 58.8 54.1
Dividends to policyholders.................................. 1.8 1.4
Other operating costs and expenses.......................... 376.3 391.3
-------- -------
640.4 635.8
-------- -------
Income before income taxes and extraordinary item........... 385.4 206.8
Income tax expense.......................................... 131.3 70.7
-------- -------
Income before extraordinary item............................ 254.1 136.1
-------- -------
Extraordinary loss, net of tax.............................. 37.7 1.9
-------- -------
Net income.................................................. 216.4 134.2
-------- -------
Other comprehensive loss, net............................... 8.9 (140.7)
-------- -------
Comprehensive income/(loss)................................. $ 225.3 $ (6.5)
======== =======
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements
F-13
<PAGE> 89
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF CHANGES IN SHAREHOLDERS' EQUITY
NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2000
<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, 1999............... $2.5 $1,563.6 $256.1 $(29.4) $ 1,792.8
Capital Contribution..................... 65.0 65.0
Dividends Payable........................ (75.0) (75.0)
Comprehensive income.....................
Net income.......................... 216.4 216.4
Other comprehensive income(1)....... 8.9 8.9
---------
Comprehensive income..................... 225.3
---- -------- ------ ------ ---------
BALANCE, SEPTEMBER 30, 2000.............. $2.5 $1,628.6 $397.5 $(20.5) $2,0080.1
==== ======== ====== ====== =========
</TABLE>
---------------
(1) Represents unrealized losses on investments, net of unrealized gains,
reclassification adjustments, and taxes.
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-14
<PAGE> 90
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
--------- ---------
($ IN MILLIONS)
<S> <C> <C>
NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES......... $ (100.1) $ 39.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities or repayment of:
Fixed maturities securities............................... 449.6 472.5
Equity securities......................................... 318.2 168.2
Mortgage loans on real estate............................. 353.3 101.3
Real estate............................................... 102.8 257.6
Other invested assets..................................... 1.6 4.6
Acquisitions of investments:
Fixed maturities securities............................... (458.3) (631.8)
Equity securities......................................... (98.2) (105.9)
Mortgage loans on real estate............................. (175.2) (337.8)
Real estate............................................... (36.3) (29.2)
Other invested assets..................................... (37.9) (4.7)
Policy loans, net......................................... (9.6) (28.2)
Other, net................................................ (150.0) 16.0
Property, plant and equipment, net.......................... (28.9) (14.7)
--------- ---------
Net cash provided by/(used in) investing activities......... $ 231.1 $ (132.1)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of debt............................................ 215.0 --
Repayments of debt.......................................... (284.3) (29.2)
Receipts from annuity and universal life policies credited
to policyholder account balances.......................... 1,854.7 1,293.0
Return of policyholder's account balances on annuity and
universal life policies................................... (1,860.5) (1,288.4)
Capital Contribution........................................ 65.0 --
Dividends paid to shareholders.............................. (75.0)
--------- ---------
Net cash (used in) financing activities..................... (85.1) (24.6)
--------- ---------
Net (decrease)/increase in cash and cash equivalents........ 45.9 (117.4)
Cash and cash equivalents, beginning of period.............. 232.6 270.2
--------- ---------
Cash and cash equivalents, end of period.................... $ 278.5 $ 152.8
========= =========
</TABLE>
See accompanying notes to unaudited interim condensed consolidated financial
statements.
F-15
<PAGE> 91
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND DESCRIPTION OF BUSINESS:
On November 16, 1998, pursuant to its Plan of Reorganization (the "Plan")
which was approved by the New York Superintendent of Insurance on the same day
(the "Plan Effective Date"), The Mutual Life Insurance Company of New York
("MONY") converted from a mutual life insurance company to a stock life
insurance company (the "Demutualization") and became a wholly owned subsidiary
of The MONY Group Inc., (the "MONY Group" 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 to fund the
guaranteed benefits and dividends of certain participating insurance policies,
and eligible policyholders received cash, policy credits, or shares of common
stock of the MONY Group in exchange for their membership interests in MONY.
Also, on November 16, 1998, the MONY Group consummated an initial public
offering (the "Offerings") of approximately 12.9 million shares of its common
stock and MONY changed its name to MONY Life Insurance Company (MONY Life
Insurance Company and its subsidiaries are hereafter referred to as "MONY Life"
or the "Company"). The shares of common stock issued in the Offerings are in
addition to approximately 34.3 million shares of common stock of the MONY Group
distributed to the aforementioned policyholders. The 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 is primarily engaged in the business of providing a wide range of
life insurance, annuity, and investment products and services to higher income
individuals, particularly family builders, pre-retirees, and small business
owners (see Note 3). 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 sold by the Company's
U.S. Financial Life Insurance Company ("USFL") subsidiary 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.
2. BASIS OF PRESENTATION:
The accompanying unaudited interim condensed consolidated financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States ("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.
These statements should be read in conjunction with the consolidated financial
statements of the Company for the year ended December 31, 1999. The results of
operations for the three-month and nine-month periods ended September 30, 2000
are not necessarily indicative of the results to be expected for the full year.
Certain reclassifications have been made in the amounts presented for the
comparative prior periods to conform those periods to the current presentation.
F-16
<PAGE> 92
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. SEGMENT INFORMATION:
The Company's business activities consist of the following: protection
product operations, accumulation product operations, mutual fund operations,
securities broker-dealer operations, insurance brokerage operations, and certain
insurance lines of business no longer written by the Company (the "run-off
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. The
Company's mutual fund operation, which is conducted through its Enterprise
Capital Management subsidiary, offers proprietary mutual funds directly to
retail customers as well as proprietary and non-proprietary mutual funds through
products marketed by the accumulation products segment. Accordingly, for
management purposes (including performance assessment and making decisions
regarding the allocation of resources) the Company aggregates its mutual fund
operations with its accumulation products segment.
Of the aforementioned segments, only the protection products segment and
the accumulation products segment qualify as reportable segments in accordance
with FASB Statement No. 131. All of the Company's other segments are combined
and reported in an other products segment.
Products comprising the protection products segment primarily include a
wide range of insurance products, including; whole life, term life, universal
life, variable universal life, corporate-owned life insurance, last survivor
variable 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 4) and (ii) the Closed Block assets and
liabilities, as well as the Contribution from the Closed Block (see Note 6). The
Protection Products segment also includes the in-force business from last
survivor universal life and last survivor whole life products. In its
Accumulation Products segment, the Company primarily offers flexible premium
variable annuities and proprietary retail mutual funds. The Accumulation
Products segment also includes the in-force business from single premium
deferred annuities and immediate annuities. 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 4).
Set forth in the table below is certain financial information with respect
to the Company's operating segments as of September 30, 2000 and December 31,
1999 and for the three-month and nine-month periods ended September 30, 2000 and
1999, as well as amounts not allocated to the segments. The Company evaluates
the performance of each operating segment based on profit or loss from
operations before income taxes and certain nonrecurring items (e.g. items of an
unusual or infrequent nature). 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
F-17
<PAGE> 93
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
targeted regulatory risk-based capital ("RBC") level for each segment.
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)
are included in the protection products segment.
Amounts reported as "reconciling amounts" in the table below represent
amounts not allocated to segments and primarily relate to certain expenses
relating to the Company's employee benefit plans.
Except for various allocations discussed below, the accounting policies of
the segments are the same as those described in the preparation of the Unaudited
Interim Condensed Consolidated Financial Statements. The Company evaluates the
performance of each operating segment based on profit or loss from operations
before income taxes and nonrecurring items (e.g. items of an unusual or
infrequent nature). The Company does not allocate certain nonrecurring items to
the segments. In addition, all segment revenues are from external customers.
SEGMENT SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------
2000 1999 2000 1999
-------- -------- ------- -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
PREMIUMS:
Protection Products(1)........................... $ 24.3 $ 19.0 $ 77.6 $ 58.3
Accumulation Products............................ 0.0 (0.2) 0.4 0.6
Other Products................................... 2.2 2.0 6.4 6.1
------ ------ ------ ------
$ 26.5 $ 20.8 $ 84.4 $ 65.0
====== ====== ====== ======
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY
FEES:
Protection Products.............................. $ 33.8 $ 29.9 $102.3 $ 91.5
Accumulation Products............................ 17.3 17.8 53.8 53.8
Other Products................................... 0.1 0.1 0.9 0.4
------ ------ ------ ------
$ 51.2 $ 47.8 $157.0 $145.7
====== ====== ====== ======
NET INVESTMENT INCOME AND NET REALIZED GAINS
(LOSSES) ON INVESTMENTS:
Protection Products(2)........................... $ 96.1 $ 98.6 $367.7 $276.6
Accumulation Products............................ 30.4 30.1 106.6 91.6
Other Products................................... 17.7 16.5 63.9 44.4
Reconciling amounts.............................. 6.9 1.2 12.8 1.2
------ ------ ------ ------
$151.1 $146.4 $551.0 $413.8
====== ====== ====== ======
OTHER INCOME:
Protection Products(3)(9)........................ $ 25.7 $ 33.5 $ 77.1 $ 88.8
Accumulation Products............................ 29.8 24.1 92.5 68.1
Other Products................................... 16.2 19.4 60.3 57.9
Reconciling amounts.............................. 1.5 1.2 3.5 3.3
------ ------ ------ ------
$ 73.2 $ 78.2 $233.4 $218.1
====== ====== ====== ======
</TABLE>
F-18
<PAGE> 94
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE THREE-MONTH FOR THE NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ------------------
2000 1999 2000 1999
-------- -------- ------- -------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
AMORTIZATION OF DEFERRED POLICY ACQUISITION
COSTS:
Protection Products(13).......................... $ 9.2 $ 14.0 $ 37.4 $ 31.3
Accumulation Products............................ 6.8 7.9 21.4 22.8
------ ------ ------ ------
$ 16.0 $ 21.9 $ 58.8 $ 54.1
====== ====== ====== ======
BENEFITS TO POLICYHOLDERS:(4)
Protection Products.............................. $ 46.6 $ 33.7 $124.9 $107.4
Accumulation Products............................ 16.4 17.6 53.4 54.9
Other Products................................... 7.8 7.5 19.5 21.9
Reconciling amounts.............................. 1.9 2.5 5.7 4.8
------ ------ ------ ------
$ 72.7 $ 61.3 $203.5 $189.0
====== ====== ====== ======
DIVIDENDS TO POLICYHOLDERS:
Protection Products.............................. $ 0.0 $ 0.1 $ (0.2) $ (0.7)
Accumulation Products............................ 0.4 0.4 1.2 1.3
Other Products................................... 0.2 0.2 0.8 0.8
------ ------ ------ ------
$ 0.6 $ 0.7 $ 1.8 $ 1.4
====== ====== ====== ======
OTHER OPERATING COSTS AND EXPENSES:
Protection Products.............................. $ 56.0 $ 59.2 $200.4 $190.0
Accumulation Products............................ 26.2 24.7 87.1 75.9
Other Products................................... 24.7 22.0 78.3 66.5
Reconciling amounts.............................. 4.6 58.9 10.5 58.9
------ ------ ------ ------
$111.5 $164.8 $376.3 $391.3
====== ====== ====== ======
INCOME BEFORE INCOME TAXES:
Protection Products.............................. $ 68.1 $ 74.0 $262.2 $187.2
Accumulation Products............................ 27.7 21.2 90.2 59.2
Other Products................................... 3.5 8.3 32.9 19.6
Reconciling amounts.............................. 1.9 (59.0) 0.1 (59.2)
------ ------ ------ ------
$101.2 $ 44.5 $385.4 $206.8
====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
ASSETS:(7)
Protection Products(5)(10).................................. $16,505.2 $16,164.5
Accumulation Products....................................... 5,859.6 6,175.0
Other Products.............................................. 1,090.8 1,187.6
Reconciling amounts......................................... 1,044.5 1,175.9
--------- ---------
$24,500.1 $24,703.0
========= =========
DEFERRED POLICY ACQUISITION COSTS:
Protection Products(11)..................................... $ 1,105.0 $ 1,094.9
Accumulation Products....................................... 151.1 153.3
--------- ---------
$ 1,256.1 $ 1,248.2
========= =========
</TABLE>
F-19
<PAGE> 95
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
POLICYHOLDERS LIABILITIES:
Protection Products(6)(12).................................. $10,261.8 $10,231.7
Accumulation Products....................................... 1,097.1 1,236.3
Other Products.............................................. 392.2 418.9
Reconciling amounts......................................... 17.5 17.4
--------- ---------
$11,768.6 $11,904.3
========= =========
SEPARATE ACCOUNT LIABILITIES:(7)
Protection Products(8)...................................... $ 3,946.8 $ 3,843.5
Accumulation Products....................................... 4,313.3 4,548.9
Other Products.............................................. 511.1 604.2
Reconciling amounts......................................... 786.2 832.3
--------- ---------
$ 9,557.4 $ 9,828.9
========= =========
</TABLE>
---------------
(1) Excludes $136.0 million and $144.2 million of individual life premiums in
the Closed Block for the three-month periods ended September 30, 2000 and
1999, respectively, and $419.6 million and $448.6 million for the
nine-month periods ended September 30, 2000 and 1999, respectively (see
Note 6).
(2) Excludes net investment income and net realized gains on investments in the
Closed Block of $101.8 million and $96.7 million for the three-month
periods ended September 30, 2000 and 1999, respectively, and $289.9 million
and $288.6 million for the nine-month periods ended September 30, 2000 and
1999, respectively (see Note 6).
(3) Includes Group Pension Profits of $10.8 million and $21.5 million for the
three-month periods ended September 30, 2000 and 1999, respectively, and
$29.0 million and $47.8 million for the nine-month period ended September
30, 2000 and 1999, respectively (see Note 4).
(4) Includes interest credited to policyholders' account balances. Excludes
$150.2 million and $147.6 million of benefits and interest credited to
policyholders' account balances related to the Closed Block for the
three-month periods ended September 30, 2000 and 1999, respectively, and
$456.7 million and $466.0 million for the nine-month periods ended
September 30, 2000 and 1999, respectively (see Note 6).
(5) Includes assets transferred in the Group Pension Transaction of $4,980.8
million and $5,109.8 million as of September 30, 2000 and December 31,
1999, respectively (see Note 4).
(6) Includes policyholder liabilities transferred in the Group Pension
Transaction of $1,500.7 million and $1,645.7 million as of September 30,
2000 and December 31, 1999, respectively (see Note 4).
(7) Each segment includes separate account assets in an amount equal to the
corresponding liability reported.
(8) Includes separate account liabilities transferred in the Group Pension
Transaction of $3,456.9 million and $3,432.7 million as of September 30,
2000 and December 31, 1999 respectively (see Note 4).
(9) Includes $10.7 million and $9.5 million relating to the Contribution from
the Closed Block for the three-month periods ended September 30, 2000 and
1999, respectively and $32.1 million and $31.4 million for the nine-month
periods ended September 30, 2000 and 1999, respectively (see Note 6).
(10) Includes Closed Block assets of $6,218.2 million and $6,182.1 million as of
September 30, 2000 and December 31, 1999, respectively (see Note 6).
F-20
<PAGE> 96
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(11) Includes deferred policy acquisition costs allocated to the Closed Block of
$619.7 million and $689.9 million as of September 30, 2000 and December 31,
1999, respectively (see Note 6).
(12) Includes Closed Block policyholders' liabilities of $7,269.5 million and
$7,241.0 million as of September 30, 2000 and December 31, 1999,
respectively (see Note 6).
(13) Excludes $14.7 million and $19.4 million of amortization of deferred policy
acquisition costs related to the Closed Block for the three-month periods
ended September 30, 2000 and 1999, respectively, and $46.6 million and
$54.5 million for the nine-month periods ended September 30, 2000 and 1999,
respectively (see Note 6).
The following is a summary of premiums and universal life and
investment-type product policy fees by product for the three-month and
nine-month periods ended September 30, 2000 and 1999, respectively.
<TABLE>
<CAPTION>
THREE-MONTH NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- ---------------
2000 1999 2000 1999
------ ------ ------ ------
($ IN MILLIONS) ($ IN MILLIONS)
<S> <C> <C> <C> <C>
PREMIUMS:
Individual life(1).................................... $24.1 $18.9 $ 77.2 $ 57.9
Group insurance....................................... 2.2 2.0 6.4 6.1
Disability income insurance........................... 0.2 0.1 0.4 0.4
Other................................................. -- (0.2) 0.4 0.6
----- ----- ------ ------
Total....................................... $26.5 $20.8 $ 84.4 $ 65.0
===== ===== ====== ======
UNIVERSAL LIFE AND INVESTMENT-TYPE PRODUCT POLICY
FEES:
Universal life........................................ $17.6 $17.7 $ 52.1 $ 54.4
Variable universal life............................... 12.4 9.2 38.5 25.8
Corporate sponsored variable universal life........... 1.2 0.9 3.4 3.0
Group universal life.................................. 2.6 2.1 8.3 8.3
Individual variable annuities......................... 17.3 17.7 53.6 53.4
Individual fixed annuities............................ 0.1 0.2 1.1 0.8
----- ----- ------ ------
Total....................................... $51.2 $47.8 $157.0 $145.7
===== ===== ====== ======
</TABLE>
---------------
(1) Excludes revenues from individual life in the Closed Block of $136.0 million
and $144.2 million for the three-month periods ended September 30, 2000 and
1999, respectively, and $419.6 million and $448.6 million for the nine-month
periods ended September 30, 2000 and 1999, respectively.
4. THE GROUP PENSION TRANSACTION:
On December 31, 1993 (the "Group Pension Transaction Date"), MONY entered
into an agreement (the "Agreement") with AEGON USA, Inc. ("AEGON") under which
the Company transferred a substantial portion of its group pension business
(hereafter referred to as the "Group Pension Transaction"), 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
F-21
<PAGE> 97
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
continue to provide certain administrative services to the Company's remaining
group pension contracts not included in the transfer.
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
MONY retained substantially all the risks and rewards associated with the
deposits on contracts in force and transferred to AEGON on the Group Pension
Transaction Date (the "Existing Deposits"). Accordingly, the Company continues
to reflect the transferred assets and liabilities on its balance sheet under
separate captions entitled "Assets transferred in Group Pension Transaction" and
"Liabilities transferred in Group Pension Transaction". In addition, MONY
reports in its GAAP earnings the profits from the Existing Deposits as discussed
below.
Pursuant to the Agreement, MONY receives from AUSA (i) payments on an
annual basis through December 31, 2002 (the "Group Pension Payments") equal to
all of the earnings from the Existing Deposits, (ii) a final payment (the "Final
Value Payment") at December 31, 2002 based on the remaining fair value of the
Existing Deposits, and (iii) a contingent payment (the "New Business Growth
Payment") at December 31, 2002 based on new business growth subsequent to the
Group Pension Transaction Date. However, the level of new business growth
necessary for MONY to receive the New Business Growth Payment make it unlikely
that MONY will ever receive any such payment.
With respect to the Group Pension Payments, the annual results from the
Existing Deposits are measured on a basis in accordance with the Agreement (such
basis hereafter referred to as the "Earnings Formula") which is substantially
the same as GAAP, except that: (i) asset impairments on fixed maturity
securities are only recognized when such securities are designated with a
National Association of Insurance Commissioners ("NAIC") rating of "6", and (ii)
no impairment losses are recognized on mortgage loans until such loans are
disposed of or at the time, and in the calculation, of the Final Value Payment.
Earnings which emerge from the Existing Deposits pursuant to the
application of the Earnings Formula are recorded in MONY's financial statements
only after adjustments (primarily to recognize asset impairments in accordance
with SFAS Nos. 114 and 115) to reflect such earnings on a basis entirely in
accordance with GAAP (such earnings hereafter referred to as the "Group Pension
Profits"). Losses which arise from the application of the Earnings Formula for
any annual period will be reflected in MONY's results of operations (after
adjustments to reflect such losses in accordance with GAAP) only up to the
amount for which MONY is at risk (as described below), which at any time is
equal to the then outstanding principal amount of the Series A Notes.
Operating losses reported in any annual period pursuant to the Earnings
Formula are carried forward to reduce any earnings in subsequent years reported
pursuant to the Earnings Formula. Any resultant deficit remaining at December
31, 2002 will be deducted from the Final Value Payment and New Business Growth
Payment, if any, due to MONY. If a deficit still remains, it will be applied (as
provided for in the Agreement) as an offset against the principal payment due to
MONY upon maturity of the Series A Notes.
Management expects that Group Pension Profits will continue to decrease in
the future consistent with the runoff of the Existing Deposits.
F-22
<PAGE> 98
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The following tables set forth certain summarized financial information
relating to the Group Pension Transaction as of the dates and for the periods
indicated, including information regarding: (i) the general account assets
transferred to support the Existing Deposits in the Group Pension Transaction
(hereafter referred to as the "AEGON Portfolio"), (ii) the transferred separate
account assets and liabilities and (iii) the components of revenue and expense
comprising the Group Pension Profits:
<TABLE>
<CAPTION>
AS OF AS OF
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
General Account Fixed Maturities: available for sale, at
estimated fair value (amortized cost; $1,423.7 million and
$1,532.4 million, respectively)........................... $1,411.4 $1,510.0
Mortgage loans on real estate............................. 54.7 98.5
Real estate to be disposed of............................. -- 16.8
Cash and cash equivalents................................. 35.2 25.3
Accrued investment income................................. 22.6 26.5
-------- --------
Total general account assets........................... 1,523.9 1,677.1
Separate account assets..................................... 3,456.9 3,432.7
-------- --------
Total assets........................................... $4,980.8 $5,109.8
======== ========
LIABILITIES:
General Account(1)
Policyholders' account balances........................... $1,500.7 $1,645.7
Other liabilities......................................... 11.1 20.7
-------- --------
Total general account liabilities...................... $1,511.8 $1,666.4
-------- --------
Separate account liabilities(2)............................. $3,456.9 $3,432.7
-------- --------
Total Liabilities...................................... $4,968.7 $5,099.1
======== ========
</TABLE>
---------------
(1) Includes general account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $76.0 million
and $88.9 million as of September 30, 2000 and December 31, 1999,
respectively.
(2) Includes separate account liabilities transferred in connection with the
Group Pension Transaction pursuant to indemnity reinsurance of $16.8 million
and $20.3 million as of September 30, 2000 and December 31, 1999,
respectively.
F-23
<PAGE> 99
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE-MONTH NINE-MONTH
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2000 1999 2000 1999
----- ----- ----- -----
($ IN MILLIONS)
<S> <C> <C> <C> <C>
REVENUES:
Product policy fees..................................... $ 7.4 $ 5.4 $19.4 $17.5
Net investment income................................... 27.8 31.6 86.2 98.2
Net realized gains on investments....................... 1.0 11.5 1.6 15.8
----- ----- ----- -----
Total revenues..................................... 36.2 48.5 107.2 131.5
----- ----- ----- -----
BENEFITS AND EXPENSES:
Interest Credited to policyholders' account balances.... 21.7 22.4 64.9 67.9
Other operating costs and expenses...................... 3.7 4.6 13.3 15.8
----- ----- ----- -----
Total benefits and expenses........................ 25.4 27.0 78.2 83.7
----- ----- ----- -----
Group Pension Profits................................. $10.8 $21.5 $29.0 $47.8
===== ===== ===== =====
</TABLE>
5. 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 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, (now known as Defilippo, et al v. The Mutual Life
Insurance Company of New York and MONY Life Insurance Company) 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, and/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
F-24
<PAGE> 100
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 New York State Supreme
Court has subsequently reaffirmed that, for purposes of the remaining New York
General Business law claims, the class is now limited to New York purchases
only, (and plaintiffs have appealed this aspect of the ruling), and has further
held that the New York General Business Law claims of all class members whose
claims accrued prior to November 29, 1992 are barred by the applicable statute
of limitations. The Company intends to defend itself vigorously against the sole
remaining claim.
b.) 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, 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 dividend expectations of the closed block, and (ii)
MONY Life 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 MONY Life to increase the assets in
the closed block, as well as unspecified monetary damages, attorneys' fees and
other relief.
In early January 2000, MONY Life and the Superintendent wrote to the
District Court seeking a pre-motion conference preliminary to the filing of a
motion to dismiss the federal complaint on jurisdictional, federal abstention
and timeliness grounds and for failure to state a claim. Following receipt of
those letters, plaintiffs' counsel offered voluntarily to dismiss their
complaint, and a stipulation and order to that effect was thereafter filed and
approved by the court.
On March 27, 2000, plaintiffs filed a new action in New York State Supreme
Court bearing the same caption and naming the same defendants as the previously
filed federal action. The state court complaint differs from the complaint
previously filed in federal court in two primary respects. First, it no longer
asserts a claim for damages against the Superintendent, nor does its prayer for
relief seek entry of an order vacating or modifying the Superintendent's
decision or requiring the Superintendent to direct MONY Life to place additional
assets into the closed block. Rather, it seeks an accounting and an order from
the Court directing MONY Life to transfer additional assets to the closed block.
Second, the new complaint contains claims for breach of contract and
fiduciary duty, as well as new allegations regarding the adequacy of the
disclosures contained in the Policyholder Information Booklet distributed to
policyholders soliciting their approval of the plan of demutualization (which
plaintiffs claim violated both the Insurance Law and MONY Life's fiduciary
duties).
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 MONY Life may ask
the court to require the challenging party to give security for the reasonable
expenses, including attorneys' fees, which may be incurred by MONY Life or the
Superintendent or for which MONY Life may become liable, to which
F-25
<PAGE> 101
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
security MONY Life shall have recourse in such amount as the court shall
determine upon the termination of the action.
MONY Life and the Superintendent have moved to dismiss the state court
complaint in its entirety on a variety of grounds. That motion is fully briefed
and awaiting decision by the court. MONY Life believes that there are
substantial defenses to plaintiffs' claims and intends to defend itself
vigorously.
c.) 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.
While the outcome of matters discussed in 5(a), 5(b) and 5(c) cannot be
predicted with certainty, in the opinion of management, any additional liability
beyond that recorded in the consolidated financial statements at September 30,
2000, 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. There can be no assurance, however, that the present litigation will
not have a material adverse effect on MONY Life.
d.) 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.
e.) The Company maintains a line of credit with domestic banks totaling
$150.0 million with a scheduled renewal date in June 2001. Under this line of
credit, the Company is required to maintain a certain statutory tangible net
worth and debt to capitalization ratio. The Company has complied with all
covenants relating thereto. The Company has not borrowed against these lines of
credit since their inception.
f.) At September 30, 2000, the Company had commitments to issue $10.5
million of fixed rate agricultural loans with periodic interest rate reset
dates. The initial interest rates on such loans range from approximately 7.85%
to 9.15%. In addition, the Company had commitments to issue $115.3 million of
fixed rate and floating rate commercial mortgage loans with interest rates
ranging from 7.75% to 9.30%. The Company had commitments outstanding to purchase
private fixed and floating rate maturity securities as of September 30, 2000 of
$145.8 million with interest rates from 7.61% to 10.75%. At September 30, 2000,
the Company had commitments to contribute capital to its equity partnership
investments of $119.5 million.
6. CLOSED BLOCK:
In accordance with New York State Insurance Law, 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 were recorded in
the Company's financial statements at their historical carrying values. The
carrying values of the assets allocated to the Closed
F-26
<PAGE> 102
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 Life has undertaken to reimburse the Closed Block from
its general account assets outside the Closed Block for any reduction in
principal payments due on the Series A Notes (which have been allocated to the
Closed Block) pursuant to the terms thereof, as described in Note 4. Since the
Closed Block has been funded to provide for the 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 the profits are distributed to 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 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 are 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 periods 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,
not funded in the Closed Block. These
F-27
<PAGE> 103
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
expenses are reported in the Company's statement of operations, outside of the
Contribution from the Closed Block, consistent with how they are funded. Such
expenses are reported in the separate line items to which they apply based on
the nature of such expenses. Federal income taxes applicable to the Closed
Block, which are funded in the Closed Block, are reflected as a component of
federal income tax expense in the Company's statement of operations. Since many
expenses related to the Closed Block are funded outside the Closed Block,
operating costs and expenses outside the Closed Block are disproportionate to
the level of business outside the Closed Block.
The following tables set forth certain summarized financial information
relating to the Closed Block, as of and for the periods indicated:
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
($ IN MILLIONS)
<S> <C> <C>
ASSETS:
Fixed Maturities:
Available for sale, at estimated fair value (amortized
cost; $3,524.2 and $3,589.6, respectively)............. $3,449.8 $3,479.5
Mortgage loans on real restate............................ 539.9 443.0
Policy loans.............................................. 1,181.3 1,199.1
Real estate............................................... 24.0 22.1
Cash and cash equivalents................................. 145.0 111.3
Premiums receivable....................................... 8.8 14.2
Deferred policy acquisition costs......................... 619.7 689.9
Other assets.............................................. 249.7 223.0
-------- --------
Total Closed Block assets.............................. $6,218.2 $6,182.1
======== ========
LIABILITIES:
Future policy benefits.................................... $6,790.1 $6,781.5
Policyholders' account balances........................... 292.4 294.6
Other Policyholders' liabilities.......................... 187.0 164.9
Other liabilities......................................... 40.8 62.3
-------- --------
Total Closed Block liabilities......................... $7,310.3 $7,303.3
======== ========
</TABLE>
F-28
<PAGE> 104
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE-MONTH NINE-MONTHS
PERIODS ENDED PERIODS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------- ---------------
2000 1999 2000 1999
------ ------ ------ ------
($ IN MILLIONS)
<S> <C> <C> <C> <C>
REVENUES:
Premiums............................................ $136.0 $144.2 $419.6 $448.6
Net investment income............................... 101.8 96.7 289.9 288.6
Net realized gains (losses) on investments.......... -- -- --
Other income........................................ 0.6 0.4 1.7 1.1
------ ------ ------ ------
Total revenues................................. 238.4 241.3 711.2 738.3
------ ------ ------ ------
BENEFITS AND EXPENSES:
Benefits to policyholders........................... 148.0 145.5 450.2 459.5
Interest credited to policyholders' account
balances.......................................... 2.2 2.1 6.5 6.5
Amortization of deferred policy acquisition costs... 14.7 19.4 46.6 54.5
Dividends to policyholders.......................... 60.4 63.4 169.1 179.8
Other operating costs and expenses.................. 2.4 1.4 6.7 6.6
------ ------ ------ ------
Total benefits and expenses.................... 227.7 231.8 679.1 706.9
------ ------ ------ ------
Contribution from the Closed Block.................. $ 10.7 $ 9.5 $ 32.1 $ 31.4
====== ====== ====== ======
</TABLE>
For the three-month periods ended September 30, 2000 and 1999, there were
$5.6 million and $0.0 million, respectively, in charges for other than temporary
impairments on fixed maturity securities in the Closed Block. For the nine-month
periods ended September 30, 2000 and 1999, there were $10.1 million and $0.0
million, respectively, in charges for other than temporary impairments on fixed
maturity securities in the Closed Block. At September 30, 2000 and December 31,
1999, there were $5.5 million and $0.0 million, respectively, of fixed income
securities that were non-income producing for the twelve months preceding such
dates. At September 30, 2000 and December 31, 1999, there were no non-income
producing mortgage loans for the twelve months preceding such dates in the
Closed Block.
7. EXTRAORDINARY AND OTHER ITEMS:
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 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 $296.6
million. Approximately $280.0 million of the net
F-29
<PAGE> 105
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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 $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. The balance of the
net proceeds from the issuance of the Senior Notes was retained by the Holding
Company for general corporate purposes. In the third quarter of 2000, the
Company repurchased another $6.5 million face amount of the 11.25% Notes.
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 as
the "Inter-Company Surplus Notes") to replace 9.5% Notes and the 11.25%
Notes. The term of the Inter-Company Surplus Notes are identical to the
9.2% Notes and 11.25% Notes, except that the Inter-Company Surplus Notes
were provided 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 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 substantially all of
the 11.25% Notes, MONY Life recorded a pre-tax tax loss of $56.5 million ($36.7
million after tax) during the first quarter of 2000 and $1.6 million ($1.0
million after tax) during the third 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
$51.1 million, respectively. This loss is reported, net of tax, as an
extraordinary item on MONY Life's income statement for the nine-month period
ended September 30, 2000.
8. ACQUISITION OF THE ADVEST GROUP, INC.:
On August 23, 2000, The MONY Group Inc, and The Advest Group, Inc.
("Advest"), entered into a definitive Agreement and Plan of Merger, dated as of
August 23, 2000 (the "merger agreement"), providing, for the acquisition of
Advest by MONY Group Inc.. Advest is a diversified financial services company
providing securities brokerage, trading, investment banking, trust and asset
management services. The merger agreement provides that the value of the
consideration to be received by Advest shareholders will be fixed five days
prior to the transaction closing date using the 10-day average closing price of
MONY Group's shares at that time. Advest stockholders may elect to receive the
consideration in shares of MONY Group common stock, an equivalent value in cash
based upon the average closing price of MONY Group's shares, or a combination of
cash and shares of MONY Group common stock. These elections will then be
adjusted, as necessary, on a pro rata basis, to produce an aggregate
consideration consisting of 49.9% cash and 50.1% MONY Group common stock.
The business combination will be accounted for under the purchase method of
accounting. Accordingly, a portion of the purchase price will be allocated to
net tangible and intangible assets acquired based on their estimated fair
values. The consummation of the merger, which is pending certain regulatory
approvals, is expected to occur on or about December 31, 2000. Details of the
proposed merger, including a copy of the merger agreement has been filed with
the Securities and Exchange Commission on Form S-4 and mailed to all
shareholders.
F-30
<PAGE> 106
THE MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
9. 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.
F-31
<PAGE> 107
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-32
<PAGE> 108
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 $24,899.3
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
F-33
<PAGE> 109
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1998
PRO FORMA*
1999 1998 1997 (UNAUDITED)
-------- -------- -------- -----------
($ 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-34
<PAGE> 110
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) $1,792.8
==== ======== ========= ======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
F-35
<PAGE> 111
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ 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-36
<PAGE> 112
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-37
<PAGE> 113
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-38
<PAGE> 114
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-39
<PAGE> 115
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-40
<PAGE> 116
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-41
<PAGE> 117
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-42
<PAGE> 118
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-43
<PAGE> 119
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-44
<PAGE> 120
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-45
<PAGE> 121
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 $59.7 million pre-tax
relating to the Company's early retirement program (see Note 22).
F-46
<PAGE> 122
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEGMENT SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
1999 1998 1997
--------- --------- ---------
($ 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-47
<PAGE> 123
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-48
<PAGE> 124
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 $100.1 million, for the year ended December 31, 1999 and for the period
from November 16, 1998 through December 31, 1998.
F-49
<PAGE> 125
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
6. DEFERRED POLICY ACQUISITION COSTS:
Policy acquisition costs deferred and amortized in 1999, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------ -------- --------
($ 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 $24.2 million were paid by this plan for the years ended
December 31, 1999, 1998, and 1997, respectively.
F-50
<PAGE> 126
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company also sponsors a non-qualified employee excess pension plan,
which provides both defined benefits and defined contribution accruals in excess
of Internal Revenue Service limits to certain employees. The benefits are based
on years of service and the employees final average annual compensation. Pension
benefits are paid from Company's general accounts.
Postretirement Benefits --
The Company provides certain health care and life insurance benefits for
retired employees and field underwriters. The Company amortizes its unamortized
postretirement transition obligation over a period of twenty years.
Assumed health care cost trend rates typically have a significant effect on
the amounts reported for health care plans. However, under the Company's
postretirement healthcare plan, there is a per capita limit on the Company's
healthcare costs, as a result, a one-percentage point change in the assumed
healthcare cost trend rates would have an immaterial affect on amounts reported.
The following presents the change in the benefit obligation, change in plan
assets and other information with respect to the Company's qualified and
non-qualified defined benefit pension plans and other benefits which represents
the Company's postretirement benefit obligation:
<TABLE>
<CAPTION>
PENSION BENEFITS OTHER BENEFITS
---------------- -----------------
1999 1998 1999 1998
------ ------ ------ -------
($ 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-51
<PAGE> 127
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-52
<PAGE> 128
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 $57.3
====== ====== =====
</TABLE>
The Company's federal income tax returns for years through 1993 have been
examined by the Internal Revenue Service ("IRS"). No material adjustments were
proposed by the IRS as a result of these examinations. In the opinion of
management, adequate provision has been made for any additional taxes which may
become due with respect to open years.
F-53
<PAGE> 129
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The components of deferred tax liabilities and assets at December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ 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-54
<PAGE> 130
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-55
<PAGE> 131
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 $33.3 million as of December 31, 1999 and 1998, respectively.
F-56
<PAGE> 132
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------
1999 1998 1997
-------- -------- --------
($ 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-57
<PAGE> 133
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-58
<PAGE> 134
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 $1.4 million, was recorded for the years ended December 31, 1999,
1998, and 1997, respectively.
There was no real estate included in the AEGON Portfolio which was
non-income producing for the twelve months preceding December 31, 1999, 1998,
and 1997, respectively.
F-59
<PAGE> 135
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
11. INVESTMENT INCOME, REALIZED AND UNREALIZED INVESTMENT GAINS (LOSSES), AND
COMPREHENSIVE INCOME:
Net investment income for the years ended December 31, 1999, 1998 and 1997
was derived from the following sources:
<TABLE>
<CAPTION>
1999 1998 1997
------ ------ ------
($ 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-60
<PAGE> 136
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 $(17.7) million, respectively, relating to the
effect of such amounts on DAC.
F-61
<PAGE> 137
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
12. INVESTMENTS:
Fixed Maturity Securities Available-for-Sale:
The amortized cost, gross unrealized gains and losses, and estimated fair
value of fixed maturity securities available-for-sale as of December 31, 1999
and 1998 are as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
------------------- -------------- -------------- -------------------
1999 1998 1999 1998 1999 1998 1999 1998
-------- -------- ----- ------ ------ ----- -------- --------
($ 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 $1.3 million for the years ended December 31, 1999
and 1998, respectively.
F-62
<PAGE> 138
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The amortized cost and estimated fair value of fixed maturity securities,
by contractual maturity dates (excluding scheduled sinking funds) as of December
31, 1999, are as follows:
<TABLE>
<CAPTION>
1999
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ----------
($ 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 $4.7 million were realized on these sales,
respectively.
F-63
<PAGE> 139
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
13. MORTGAGE LOANS ON REAL ESTATE AND REAL ESTATE:
Mortgage loans on real estate at December 31, 1999 and 1998 consist of the
following:
<TABLE>
<CAPTION>
1999 1998
-------- --------
($ 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-64
<PAGE> 140
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-65
<PAGE> 141
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-66
<PAGE> 142
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 $9.1 million for the year ended December 31, 1997.
F-67
<PAGE> 143
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
16. DEBT:
The Company's debt at December 31, 1999 and 1998 consists of the following:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ 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-68
<PAGE> 144
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-69
<PAGE> 145
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-70
<PAGE> 146
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-71
<PAGE> 147
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-72
<PAGE> 148
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-73
<PAGE> 149
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-74
<PAGE> 150
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 $23.6
===== =====
</TABLE>
F-75
<PAGE> 151
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Impaired mortgage loans along with related valuation allowances were as
follows as of December 31, 1999 and December 31, 1998:
<TABLE>
<CAPTION>
1999 1998
------ ------
($ 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 $0.8 million for the respective periods.
21. PRO FORMA INFORMATION (UNAUDITED)
The unaudited pro forma earnings information reported in the statements of
income and comprehensive income give effect to the Transaction as if it occurred
January 1, 1998. Accordingly, pro forma earnings reflect the elimination of
demutualization expenses, which were assumed to have been fully incurred prior
to January 1, 1998, and the elimination of the differential earnings (surplus)
tax applicable to mutual life insurance companies. MONY Life is no longer
subject to the differential earnings (surplus) tax as a stock life insurance
company.
The unaudited pro forma information is provided for informational purposes
only and should not be construed to be indicative of the Company's consolidated
results of operations had the Transaction been consummated on the date assumed,
and does not in any way represent a projection or forecast of the Company's
consolidated results of operations as of any future date or for any future
period.
F-76
<PAGE> 152
MONY LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The pro forma revenues and expenses of the Closed Block for the year ended
December 31, 1998, based on certain estimates and assumptions that management
believes are reasonable, as if the Closed Block had been established on January
1, 1998, are summarized below ($ 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-77
<PAGE> 153
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-78
<PAGE> 154
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> 155
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 156
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> 157
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 158
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> 159
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 160
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> 161
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> 162
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 $27,994.17 $2,381.26
Male 45 Standard Smoker Female 45 Standard Smoker 1 $33,501.26 $2.835.02
Male 45 Preferred Non-smoker Female 45 Preferred Non-smoker 2 $27,994.17 $9,311.96
Male 35 Preferred Non-smoker Female 35 Preferred Non-smoker 1 $17,173.70 $1,494.41
Male 55 Preferred Non-smoker Female 55 Preferred Non-smoker 1 $46,215.90 $3,992.74
</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> 163
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 NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,220 0 802 200,000 0 802 200,000 0 802 200,000
5 1,220 3,139 3,859 200,000 3,139 3,859 200,000 3,190 3,911 200,000
10 1,220 7,124 7,244 200,000 7,124 7,244 200,000 7,409 7,529 200,000
20 1,220 13,057 13,057 200,000 13,057 13,057 200,000 15,271 15,271 200,000
@ Age 70 1,220 11,159 11,159 200,000 11,159 11,159 200,000 17,116 17,116 200,000
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-4
<PAGE> 164
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
--------------------------------------------------- ------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
END
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 1,220 0 802 200,000 0 802 200,000 0 802 200,000
2 1,220 509 1,589 200,000 509 1,589 200,000 514 1,595 200,000
3 1,220 1,401 2,362 200,000 1,401 2,362 200,000 1,417 2,378 200,000
4 1,220 2,278 3,119 200,000 2,278 3,119 200,000 2,309 3,150 200,000
5 1,220 3,139 3,859 200,000 3,139 3,859 200,000 3,190 3,911 200,000
6 1,220 3,982 4,582 200,000 3,982 4,582 200,000 4,060 4,661 200,000
7 1,220 4,804 5,284 200,000 4,804 5,284 200,000 4,918 5,398 200,000
8 1,220 5,604 5,964 200,000 5,604 5,964 200,000 5,763 6,123 200,000
9 1,220 6,378 6,619 200,000 6,378 6,619 200,000 6,594 6,834 200,000
10 1,220 7,124 7,244 200,000 7,124 7,244 200,000 7,409 7,529 200,000
11 1,220 8,088 8,088 200,000 8,088 8,088 200,000 8,455 8,455 200,000
12 1,220 8,891 8,891 200,000 8,891 8,891 200,000 9,357 9,357 200,000
13 1,220 9,652 9,652 200,000 9,652 9,652 200,000 10,229 10,229 200,000
14 1,220 10,364 10,364 200,000 10,364 10,364 200,000 11,071 11,071 200,000
15 1,220 11,020 11,020 200,000 11,020 11,020 200,000 11,878 11,878 200,000
16 1,220 11,613 11,613 200,000 11,613 11,613 200,000 12,647 12,647 200,000
17 1,220 12,130 12,130 200,000 12,130 12,130 200,000 13,375 13,375 200,000
18 1,220 12,556 12,556 200,000 12,556 12,556 200,000 14,058 14,058 200,000
19 1,220 12,872 12,872 200,000 12,872 12,872 200,000 14,691 14,691 200,000
20 1,220 13,057 13,057 200,000 13,057 13,057 200,000 15,271 15,271 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-5
<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
----------------------------------------------------- -------------------------
0.00% (-.75% NET) 0.00% (-.75% NET) 0.00% (-.75% NET)
END
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 1,220 13,088 13,088 200,000 13,088 13,088 200,000 15,794 15,794 200,000
22 1,220 12,942 12,942 200,000 12,942 12,942 200,000 16,248 16,248 200,000
23 1,220 12,593 12,593 200,000 12,593 12,593 200,000 16,620 16,620 200,000
24 1,220 12,013 12,013 200,000 12,013 12,013 200,000 16,911 16,911 200,000
25 1,220 11,159 11,159 200,000 11,159 11,159 200,000 17,116 17,116 200,000
26 1,220 9,976 9,976 200,000 9,976 9,976 200,000 17,216 17,216 200,000
27 1,220 8,389 8,389 200,000 8,389 8,389 200,000 17,196 17,196 200,000
28 1,220 6,297 6,297 200,000 6,297 6,297 200,000 17,033 17,033 200,000
29 1,220 3,576 3,576 200,000 3,576 3,576 200,000 16,671 16,671 200,000
30 1,220 85 85 200,000 85 85 200,000 16,068 16,068 200,000
31 1,220 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 15,197 15,197 200,000
32 1,220 14,007 14,007 200,000
33 1,220 12,434 12,434 200,000
34 1,220 10,402 10,402 200,000
35 1,220 7,826 7,826 200,000
36 1,220 4,598 4,598 200,000
37 1,220 605 605 200,000
38 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-6
<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) 6.00% (5.25% NET) 6.00% (5.25% NET)
POLICY NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,220 0 802 200,000 0 859 200,000 0 859 200,000
5 1,220 3,139 3,859 200,000 3,946 4,666 200,000 4,002 4,723 200,000
10 1,220 7,124 7,244 200,000 10,167 10,287 200,000 10,503 10,623 200,000
20 1,220 13,057 13,057 200,000 26,473 26,473 200,000 29,354 29,354 200,000
@ Age 70 1,220 11,159 11,159 200,000 33,227 33,227 200,000 40,877 40,877 200,000
@ Age 85 1,220 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 62,611 62,611 200,000
@ Age 90 1,220 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 28,933 28,933 200,000
</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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-7
<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
--------------------------------------------------- ------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
END
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 1,220 0 802 200,000 0 859 200,000 0 859 200,000
2 1,220 509 1,589 200,000 673 1,754 200,000 679 1,760 200,000
3 1,220 1,401 2,362 200,000 1,726 2,686 200,000 1,742 2,703 200,000
4 1,220 2,278 3,119 200,000 2,816 3,657 200,000 2,849 3,690 200,000
5 1,220 3,139 3,859 200,000 3,946 4,666 200,000 4,002 4,723 200,000
6 1,220 3,982 4,582 200,000 5,115 5,715 200,000 5,202 5,803 200,000
7 1,220 4,804 5,284 200,000 6,322 6,802 200,000 6,451 6,932 200,000
8 1,220 5,604 5,964 200,000 7,568 7,928 200,000 7,750 8,111 200,000
9 1,220 6,378 6,619 200,000 8,850 9,090 200,000 9,101 9,341 200,000
10 1,220 7,124 7,244 200,000 10,167 10,287 200,000 10,503 10,623 200,000
11 1,220 8,088 8,088 200,000 11,777 11,777 200,000 12,216 12,216 200,000
12 1,220 8,891 8,891 200,000 13,309 13,309 200,000 13,873 13,873 200,000
13 1,220 9,652 9,652 200,000 14,882 14,882 200,000 15,591 15,591 200,000
14 1,220 10,364 10,364 200,000 16,492 16,492 200,000 17,372 17,372 200,000
15 1,220 11,020 11,020 200,000 18,134 18,134 200,000 19,216 19,216 200,000
16 1,220 11,613 11,613 200,000 19,802 19,802 200,000 21,121 21,121 200,000
17 1,220 12,130 12,130 200,000 21,486 21,486 200,000 23,088 23,088 200,000
18 1,220 12,556 12,556 200,000 23,171 23,171 200,000 25,117 25,117 200,000
19 1,220 12,872 12,872 200,000 24,840 24,840 200,000 27,205 27,205 200,000
20 1,220 13,057 13,057 200,000 26,473 26,473 200,000 29,354 29,354 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-8
<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
--------------------------------------------------- ------------------------
0.00% (-.75% NET) 6.00% (5.25% NET) 6.00% (5.25% NET)
END
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 1,220 13,088 13,088 200,000 28,047 28,047 200,000 31,562 31,562 200,000
22 1,220 12,942 12,942 200,000 29,538 29,538 200,000 33,823 33,823 200,000
23 1,220 12,593 12,593 200,000 30,920 30,920 200,000 36,127 36,127 200,000
24 1,220 12,013 12,013 200,000 32,164 32,164 200,000 38,478 38,478 200,000
25 1,220 11,159 11,159 200,000 33,227 33,227 200,000 40,877 40,877 200,000
26 1,220 9,976 9,976 200,000 34,053 34,053 200,000 43,311 43,311 200,000
27 1,220 8,389 8,389 200,000 34,568 34,568 200,000 45,768 45,768 200,000
28 1,220 6,297 6,297 200,000 34,671 34,671 200,000 48,235 48,235 200,000
29 1,220 3,576 3,576 200,000 34,240 34,240 200,000 50,668 50,668 200,000
30 1,220 85 85 200,000 33,131 33,131 200,000 53,035 53,035 200,000
31 1,220 LAPSED LAPSED LAPSED 31,179 31,179 200,000 55,318 55,318 200,000
32 1,220 28,193 28,193 200,000 57,479 57,479 200,000
33 1,220 23,943 23,943 200,000 59,473 59,473 200,000
34 1,220 18,140 18,140 200,000 61,246 61,246 200,000
35 1,220 10,392 10,392 200,000 62,736 62,736 200,000
36 1,220 159 159 200,000 63,869 63,869 200,000
37 1,220 LAPSED LAPSED LAPSED 64,566 64,566 200,000
38 1,220 64,733 64,733 200,000
39 1,220 64,158 64,158 200,000
40 1,220 62,611 62,611 200,000
41 1,220 59,909 59,909 200,000
42 1,220 55,714 55,714 200,000
43 1,220 49,607 49,607 200,000
44 1,220 40,942 40,942 200,000
45 1,220 28,933 28,933 200,000
46 1,220 12,496 12,496 200,000
47 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-9
<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) 12.00% (11.25% NET) 12.00% (11.25% NET)
POLICY NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1,323 0 899 200,000 0 1,025 200,000 0 1,025 200,000
5 1,323 3,611 4,332 200,000 5,567 6,287 200,000 5,628 6,348 200,000
10 1,323 8,045 8,165 200,000 16,361 16,481 200,000 16,757 16,877 200,000
20 1,323 14,828 14,828 200,000 63,116 63,116 200,000 66,875 66,875 200,000
@ Age 70 1,323 13,378 13,378 200,000 108,691 108,691 200,000 118,101 118,101 200,000
@ Age 85 1,323 LAPSED LAPSED LAPSED 523,685 523,685 549,869 588,138 588,138 617,545
@ Age 90 1,323 LAPSED LAPSED LAPSED 852,728 852,728 895,365 977,451 977,451 1,026,323
</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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-10
<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
------------------------------------------------------- --------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
END
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 1,323 0 899 200,000 0 1,025 200,000 0 1,025 200,000
2 1,323 701 1,781 200,000 1,073 2,154 200,000 1,079 2,160 200,000
3 1,323 1,688 2,648 200,000 2,439 3,399 200,000 2,456 3,417 200,000
4 1,323 2,658 3,499 200,000 3,933 4,773 200,000 3,968 4,808 200,000
5 1,323 3,611 4,332 200,000 5,567 6,287 200,000 5,628 6,348 200,000
6 1,323 4,545 5,146 200,000 7,355 7,956 200,000 7,452 8,053 200,000
7 1,323 5,458 5,939 200,000 9,312 9,793 200,000 9,458 9,938 200,000
8 1,323 6,348 6,708 200,000 11,454 11,814 200,000 11,663 12,023 200,000
9 1,323 7,211 7,451 200,000 13,797 14,037 200,000 14,089 14,329 200,000
10 1,323 8,045 8,165 200,000 16,361 16,481 200,000 16,757 16,877 200,000
11 1,323 9,095 9,095 200,000 19,433 19,433 200,000 19,959 19,959 200,000
12 1,323 9,985 9,985 200,000 22,678 22,678 200,000 23,362 23,362 200,000
13 1,323 10,832 10,832 200,000 26,244 26,244 200,000 27,117 27,117 200,000
14 1,323 11,629 11,629 200,000 30,162 30,162 200,000 31,261 31,261 200,000
15 1,323 12,370 12,370 200,000 34,464 34,464 200,000 35,833 35,833 200,000
16 1,323 13,047 13,047 200,000 39,189 39,189 200,000 40,878 40,878 200,000
17 1,323 13,648 13,648 200,000 44,373 44,373 200,000 40,445 46,445 200,000
18 1,323 14,158 14,158 200,000 50,058 50,058 200,000 52,591 52,591 200,000
19 1,323 14,558 14,558 200,000 56,289 56,289 200,000 59,378 59,378 200,000
20 1,323 14,828 14,828 200,000 63,116 63,116 200,000 66,875 66,875 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-11
<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
------------------------------------------------------- -----------------------------
0.00% (-.75% NET) 12.00% (11.25% NET) 12.00% (11.25% NET)
END
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 1,323 14,945 14,945 200,000 70,599 70,599 200,000 75,162 75,162 200,000
22 1,323 14,887 14,887 200,000 78,808 78,808 200,000 84,324 84,324 200,000
23 1,323 14,627 14,627 200,000 87,826 87,826 200,000 94,454 94,454 200,000
24 1,323 14,137 14,137 200,000 97,750 97,750 200,000 105,669 105,669 200,000
25 1,323 13,378 13,378 200,000 108,691 108,691 200,000 118,101 118,101 200,000
26 1,323 12,293 12,293 200,000 120,778 120,778 200,000 131,888 131,888 200,000
27 1,323 10,810 10,810 200,000 134,168 134,168 200,000 147,196 147,196 200,000
28 1,323 8,828 8,828 200,000 149,051 149,051 200,000 164,213 164,213 200,000
29 1,323 6,227 6,227 200,000 165,674 165,674 200,000 183,155 183,155 200,000
30 1,323 2,866 2,866 200,000 184,360 184,360 200,000 204,229 204,229 218,525
31 1,323 LAPSED LAPSED LAPSED 205,391 205,391 215,660 227,604 227,604 238,984
32 1,323 228,649 228,649 240,082 253,486 253,486 266,160
33 1,323 254,329 254,329 267,046 282,136 282,136 296,243
34 1,323 282,666 282,666 296,799 313,844 313,844 329,536
35 1,323 313,911 313,911 329,607 348,925 348,925 366,371
36 1,323 348,334 348,334 365,751 387,723 387,723 407,110
37 1,323 386,220 386,220 405,531 430,619 430,619 452,150
38 1,323 427,863 427,863 449,256 478,025 478,025 501,926
39 1,323 473,576 473,576 497,255 530,374 530,374 556,893
40 1,323 523,685 523,685 549,869 588,138 588,138 617,545
41 1,323 578,533 578,533 607,460 651,840 651,840 684,432
42 1,323 638,481 638,481 670,405 722,027 722,027 758,128
43 1,323 703,904 703,904 739,099 799,284 799,284 839,248
44 1,323 775,189 775,189 813,949 884,209 884,209 928,419
45 1,323 852,728 852,728 895,365 977,451 977,451 1,026,323
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-12
<PAGE> 172
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 1,323 936,907 936,907 983,752 1,079,690 1,079,690 1,133,675
47 1,323 1,030,635 1,030,635 1,071,860 1,193,060 1,193,060 1,240,782
48 1,323 1,135,586 1,135,586 1,169,653 1,319,183 1,319,183 1,358,759
49 1,323 1,253,861 1,253,861 1,278,939 1,460,144 1,460,144 1,489,347
50 1,323 1,388,223 1,388,223 1,402,105 1,618,319 1,618,319 1,634,502
51 1,323 1,536,178 1,536,178 1,551,539 1,793,276 1,793,276 1,811,209
52 1,323 1,698,470 1,698,470 1,715,455 1,986,697 1,986,697 2,006,564
53 1,323 1,874,856 1,874,856 1,893,605 2,200,564 2,200,564 2,222,570
54 1,323 2,066,716 2,066,716 2,087,383 2,436,994 2,436,994 2,461,364
55 1,323 2,278,078 2,278,078 2,300,859 2,698,325 2,698,325 2,725,309
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-13
<PAGE> 173
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***
------------------------ ------------------------ ------------------------
NET 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 1,798 0 1,326 200,000 0 1,326 200,000 0 1,326 200,000
5 1,798 5,234 6,296 200,000 5,234 6,296 200,000 5,315 6,377 200,000
10 1,798 11,321 11,498 200,000 11,321 11,498 200,000 11,663 11,840 200,000
20 1,798 17,107 17,107 200,000 17,107 17,107 200,000 19,502 19,502 200,000
@ Age 70 1,798 10,969 10,969 200,000 10,969 10,969 200,000 18,377 18,377 200,000
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</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> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand that any
ACKNOWLEDGEMENT 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 applicant
ACKNOWLEDGEMENT 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: 09/08/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-14
<PAGE> 174
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 1,798 0 1,326 200,000 0 1,326 200,000 0 1,326 200,000
2 1,798 1,025 2,618 200,000 1,025 2,618 200,000 1,037 2,630 200,000
3 1,798 2,463 3,879 200,000 2,463 3,879 200,000 2,494 3,910 200,000
4 1,798 3,868 5,107 200,000 3,868 5,107 200,000 3,921 5,160 200,000
5 1,798 5,234 6,296 200,000 5,234 6,296 200,000 5,315 6,377 200,000
6 1,798 6,559 7,444 200,000 6,559 7,444 200,000 6,673 7,558 200,000
7 1,798 7,837 8,545 200,000 7,837 8,545 200,000 7,991 8,699 200,000
8 1,798 9,062 9,593 200,000 9,062 9,593 200,000 9,266 9,797 200,000
9 1,798 10,226 10,580 200,000 10,226 10,580 200,000 10,492 10,846 200,000
10 1,798 11,321 11,498 200,000 11,321 11,498 200,000 11,663 11,840 200,000
11 1,798 12,606 12,606 200,000 12,606 12,606 200,000 13,030 13,030 200,000
12 1,798 13,627 13,627 200,000 13,627 13,627 200,000 14,138 14,138 200,000
13 1,798 14,552 14,552 200,000 14,552 14,552 200,000 15,151 15,151 200,000
14 1,798 15,373 15,373 200,000 15,373 15,373 200,000 16,077 16,077 200,000
15 1,798 16,079 16,079 200,000 16,079 16,079 200,000 16,909 16,909 200,000
16 1,798 16,654 16,654 200,000 16,654 16,654 200,000 17,643 17,643 200,000
17 1,798 17,076 17,076 200,000 17,076 17,076 200,000 18,275 18,275 200,000
18 1,798 17,315 17,315 200,000 17,315 17,315 200,000 18,798 18,798 200,000
19 1,798 17,338 17,338 200,000 17,338 17,338 200,000 19,209 19,209 200,000
20 1,798 17,107 17,107 200,000 17,107 17,107 200,000 19,502 19,502 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-15
<PAGE> 175
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 1,798 16,590 16,590 200,000 16,590 16,590 200,000 19,675 19,675 200,000
22 1,798 15,752 15,752 200,000 15,752 15,752 200,000 19,649 19,649 200,000
23 1,798 14,564 14,564 200,000 14,564 14,564 200,000 19,433 19,433 200,000
24 1,798 12,988 12,988 200,000 12,988 12,988 200,000 19,017 19,017 200,000
25 1,798 10,969 10,969 200,000 10,969 10,969 200,000 18,377 18,377 200,000
26 1,798 8,430 8,430 200,000 8,430 8,430 200,000 17,464 17,464 200,000
27 1,798 5,251 5,251 200,000 5,251 5,251 200,000 16,266 16,266 200,000
28 1,798 1,284 1,284 200,000 1,284 1,284 200,000 14,731 14,731 200,000
29 1,798 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 12,715 12,715 200,000
30 1,798 10,116 10,116 200,000
31 1,798 6,903 6,903 200,000
32 1,798 2,943 2,943 200,000
33 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-16
<PAGE> 176
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***
-------------------------- -------------------------- --------------------------
NET 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 1,798 0 1,326 200,000 0 1,414 200,000 0 1,414 200,000
5 1,798 5,234 6,296 200,000 6,530 7,592 200,000 6,619 7,681 200,000
10 1,798 11,321 11,498 200,000 16,204 16,381 200,000 16,614 16,791 200,000
20 1,798 17,107 17,107 200,000 37,822 37,822 200,000 40,852 40,852 200,000
@ Age 70 1,798 10,969 10,969 200,000 44,657 44,657 200,000 53,575 53,575 200,000
@ Age 85 1,798 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 43,729 43,729 200,000
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 29 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 42 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand that any
ACKNOWLEDGEMENT 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 applicant
ACKNOWLEDGEMENT 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-17
<PAGE> 177
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 1,798 0 1,326 200,000 0 1,414 200,000 0 1,414 200,000
2 1,798 1,025 2,618 200,000 1,286 2,878 200,000 1,298 2,891 200,000
3 1,798 2,463 3,879 200,000 2,981 4,397 200,000 3,013 4,429 200,000
4 1,798 3,868 5,107 200,000 4,729 5,968 200,000 4,787 6,026 200,000
5 1,798 5,234 6,296 200,000 6,530 7,592 200,000 6,619 7,681 200,000
6 1,798 6,559 7,444 200,000 8,381 9,266 200,000 8,509 9,394 200,000
7 1,798 7,837 8,545 200,000 10,278 10,986 200,000 10,455 11,163 200,000
8 1,798 9,062 9,593 200,000 12,219 12,750 200,000 12,457 12,988 200,000
9 1,798 10,226 10,580 200,000 14,196 14,550 200,000 14,511 14,865 200,000
10 1,798 11,321 11,498 200,000 16,204 16,381 200,000 16,614 16,791 200,000
11 1,798 12,606 12,606 200,000 18,513 18,513 200,000 19,029 19,029 200,000
12 1,798 13,627 13,627 200,000 20,676 20,676 200,000 21,309 21,309 200,000
13 1,798 14,552 14,552 200,000 22,865 22,865 200,000 23,622 23,622 200,000
14 1,798 15,373 15,373 200,000 25,072 25,072 200,000 25,975 25,975 200,000
15 1,798 16,079 16,079 200,000 27,288 27,288 200,000 28,367 28,367 200,000
16 1,798 16,654 16,654 200,000 29,501 29,501 200,000 30,796 30,796 200,000
17 1,798 17,076 17,076 200,000 31,689 31,689 200,000 33,260 33,260 200,000
18 1,798 17,315 17,315 200,000 33,827 33,827 200,000 35,757 35,757 200,000
19 1,798 17,338 17,338 200,000 35,883 35,883 200,000 38,288 38,288 200,000
20 1,798 17,107 17,107 200,000 37,822 37,822 200,000 40,852 40,852 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-18
<PAGE> 178
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 1,798 16,590 16,590 200,000 39,614 39,614 200,000 43,449 43,449 200,000
22 1,798 15,752 15,752 200,000 41,226 41,226 200,000 46,016 46,016 200,000
23 1,798 14,564 14,564 200,000 42,630 42,630 200,000 48,564 48,564 200,000
24 1,798 12,988 12,988 200,000 43,791 43,791 200,000 51,088 51,088 200,000
25 1,798 10,969 10,969 200,000 44,657 44,657 200,000 53,575 53,575 200,000
26 1,798 8,430 8,430 200,000 45,158 45,158 200,000 55,988 55,988 200,000
27 1,798 5,251 5,251 200,000 45,189 45,189 200,000 58,324 58,324 200,000
28 1,798 1,284 1,284 200,000 44,617 44,617 200,000 60,548 60,548 200,000
29 1,798 LAPSED LAPSED LAPSED 43,279 43,279 200,000 62,556 62,556 200,000
30 1,798 40,988 40,988 200,000 64,280 64,280 200,000
31 1,798 37,525 37,525 200,000 65,702 65,702 200,000
32 1,798 32,645 32,645 200,000 66,734 66,734 200,000
33 1,798 26,059 26,059 200,000 67,282 67,282 200,000
34 1,798 17,394 17,394 200,000 67,230 67,230 200,000
35 1,798 6,137 6,137 200,000 66,444 66,444 200,000
36 1,798 LAPSED LAPSED LAPSED 64,786 64,786 200,000
37 1,798 62,044 62,044 200,000
38 1,798 57,979 57,979 200,000
39 1,798 52,078 52,078 200,000
40 1,798 43,729 43,729 200,000
41 1,798 32,468 32,468 200,000
42 1,798 17,219 17,219 200,000
43 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,797.92-Premium Mode:
Annual-Riders: None
D-19
<PAGE> 179
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***
------------------------ --------------------------------- ---------------------------------
NET 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 1,932 0 1,451 200,000 0 1,644 200,000 0 1,644 200,000
5 1,932 5,850 6,912 200,000 8,927 9,989 200,000 9,024 10,086 200,000
10 1,932 12,523 12,700 200,000 25,609 25,786 200,000 26,100 26,277 200,000
20 1,932 19,472 19,472 200,000 94,171 94,171 200,000 97,963 97,963 200,000
@ Age 70 1,932 14,020 14,020 200,000 162,990 162,990 200,000 172,209 172,209 200,000
@ Age 85 1,932 LAPSED LAPSED LAPSED 789,729 789,729 829,216 848,440 848,440 890,862
@ Age 90 1,932 LAPSED LAPSED LAPSED 1,280,573 1,280,573 1,344,602 1,394,668 1,394,668 1,464,402
</TABLE>
* Policy lapses in policy year 30 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> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand that any
ACKNOWLEDGEMENT 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 applicant
ACKNOWLEDGEMENT 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,932.08-Premium Mode:
Annual-Riders: None
D-20
<PAGE> 180
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 1,932 0 1,451 200,000 0 1,644 200,000 0 1,644 200,000
2 1,932 1,275 2,868 200,000 1,854 3,447 200,000 1,867 3,460 200,000
3 1,932 2,836 4,252 200,000 4,012 5,428 200,000 4,045 5,461 200,000
4 1,932 4,362 5,601 200,000 6,364 7,603 200,000 6,425 7,664 200,000
5 1,932 5,850 6,912 200,000 8,927 9,989 200,000 9,024 10,086 200,000
6 1,932 7,294 8,179 200,000 11,720 12,605 200,000 11,863 12,748 200,000
7 1,932 8,690 9,398 200,000 14,763 15,471 200,000 14,965 15,673 200,000
8 1,932 10,032 10,563 200,000 18,076 18,607 200,000 18,353 18,884 200,000
9 1,932 11,312 11,666 200,000 21,683 22,037 200,000 22,055 22,409 200,000
10 1,932 12,523 12,700 200,000 25,609 25,786 200,000 26,100 26,277 200,000
11 1,932 13,923 13,923 200,000 30,170 30,170 200,000 30,797 30,797 200,000
12 1,932 15,059 15,059 200,000 34,965 34,965 200,000 35,748 35,748 200,000
13 1,932 16,098 16,098 200,000 40,212 40,212 200,000 41,169 41,169 200,000
14 1,932 17,033 17,033 200,000 45,959 45,959 200,000 47,121 47,121 200,000
15 1,932 17,854 17,854 200,000 52,257 52,257 200,000 53,665 53,665 200,000
16 1,932 18,544 18,544 200,000 59,161 59,161 200,000 60,866 60,866 200,000
17 1,932 19,082 19,082 200,000 66,732 66,732 200,000 68,802 68,802 200,000
18 1,932 19,438 19,438 200,000 75,036 75,036 200,000 77,561 77,561 200,000
19 1,932 19,580 19,580 200,000 84,151 84,151 200,000 87,243 87,243 200,000
20 1,932 19,472 19,472 200,000 94,171 94,171 200,000 97,963 97,963 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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, 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,932.08-Premium Mode:
Annual-Riders: None
D-21
<PAGE> 181
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 1,932 19,081 19,081 200,000 105,212 105,212 200,000 109,853 109,853 200,000
22 1,932 18,374 18,374 200,000 117,421 117,421 200,000 123,027 123,027 200,000
23 1,932 17,322 17,322 200,000 130,972 130,972 200,000 137,669 137,669 200,000
24 1,932 15,888 15,888 200,000 146,078 146,078 200,000 153,985 153,985 200,000
25 1,932 14,020 14,020 200,000 162,990 162,990 200,000 172,209 172,209 200,000
26 1,932 11,641 11,641 200,000 181,980 181,980 209,277 192,485 192,485 221,357
27 1,932 8,635 8,635 200,000 203,048 203,048 229,445 214,934 214,934 242,875
28 1,932 4,856 4,856 200,000 226,353 226,353 251,252 239,799 239,799 266,177
29 1,932 128 128 200,000 252,157 252,157 274,851 267,345 267,345 291,406
30 1,932 LAPSED LAPSED LAPSED 280,770 280,770 300,424 297,885 297,885 318,737
31 1,932 312,565 312,565 328,193 331,791 331,791 348,381
32 1,932 347,640 347,640 365,022 369,275 369,275 387,739
33 1,932 386,313 386,313 405,628 410,697 410,697 431,232
34 1,932 428,929 428,929 450,375 456,449 456,449 479,272
35 1,932 475,858 475,858 499,651 506,959 506,959 532,307
36 1,932 527,495 527,495 553,870 562,695 562,695 590,829
37 1,932 584,255 584,255 613,467 624,159 624,159 655,367
38 1,932 646,573 646,573 678,902 691,901 691,901 726,496
39 1,932 714,902 714,902 750,648 766,467 766,467 804,790
40 1,932 789,729 789,729 829,216 848,440 848,440 890,862
41 1,932 871,574 871,574 915,153 938,525 938,525 985,451
42 1,932 960,990 960,990 1,009,039 1,037,373 1,037,373 1,089,242
43 1,932 1,058,556 1,058,556 1,111,484 1,145,830 1,145,830 1,203,122
44 1,932 1,164,874 1,164,874 1,223,117 1,264,645 1,264,645 1,327,877
45 1,932 1,280,573 1,280,573 1,344,602 1,394,668 1,394,668 1,464,402
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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, 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,932.08-Premium Mode:
Annual-Riders: None
D-22
<PAGE> 182
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 1,932 1,406,239 1,406,239 1,476,551 1,536,909 1,536,909 1,613,755
47 1,932 1,546,420 1,546,420 1,608,277 1,695,170 1,695,170 1,762,977
48 1,932 1,703,618 1,703,618 1,754,727 1,871,956 1,871,956 1,928,115
49 1,932 1,880,952 1,880,952 1,918,571 2,070,489 2,070,489 2,111,898
50 1,932 2,082,491 2,082,491 2,103,316 2,294,268 2,294,268 2,317,210
51 1,932 2,304,426 2,304,426 2,327,470 2,541,833 2,541,833 2,567,252
52 1,932 2,547,867 2,547,867 2,573,346 2,815,694 2,815,694 2,843,851
53 1,932 2,812,448 2,812,448 2,840,573 3,118,611 3,118,611 3,149,797
54 1,932 3,100,248 3,100,248 3,131,251 3,453,613 3,453,613 3,488,149
55 1,932 3,417,302 3,417,302 3,451,475 3,824,027 3,824,027 3,862,268
</TABLE>
This is an illustration, not a policy.
This maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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, 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: 09/07/00
Age 45 Female Smoker Standard Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form #C1-98
Specified Amount for Option 1
Initial Modal Premium: $1,932.08-Premium Mode:
Annual-Riders: None
D-23
<PAGE> 183
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***
-------------------------- -------------------------- --------------------------
NET 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 1,220 0 802 200,802 0 802 200,802 0 802 200,802
5 1,220 3,138 3,858 203,858 3,138 3,858 203,858 3,190 3,911 203,911
10 1,220 7,112 7,232 207,232 7,112 7,232 207,232 7,405 7,525 207,525
20 1,220 12,820 12,820 212,820 12,820 12,820 212,820 15,158 15,158 215,158
@ Age 70 1,220 10,491 10,491 210,491 10,491 10,491 210,491 16,777 16,777 216,777
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 36 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand that any
ACKNOWLEDGEMENT 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 applicant
ACKNOWLEDGEMENT 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-24
<PAGE> 184
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 1,220 0 802 200,802 0 802 200,802 0 802 200,802
2 1,220 509 1,589 201,589 509 1,589 201,589 514 1,595 201,595
3 1,220 1,401 2,362 202,362 1,401 2,362 202,362 1,417 2,377 202,377
4 1,220 2,278 3,118 203,118 2,278 3,118 203,118 2,309 3,149 203,149
5 1,220 3,138 3,858 203,858 3,138 3,858 203,858 3,190 3,911 203,911
6 1,220 3,979 4,580 204,580 3,979 4,580 204,580 4,060 4,660 204,660
7 1,220 4,801 5,281 205,281 4,801 5,281 205,281 4,917 5,398 205,398
8 1,220 5,598 5,959 205,959 5,598 5,959 205,959 5,762 6,122 206,122
9 1,220 6,370 6,610 206,610 6,370 6,610 206,610 6,591 6,831 206,831
10 1,220 7,112 7,232 207,232 7,112 7,232 207,232 7,405 7,525 207,525
11 1,220 8,070 8,070 208,070 8,070 8,070 208,070 8,449 8,449 208,449
12 1,220 8,866 8,866 208,866 8,866 8,866 208,866 9,348 9,348 209,348
13 1,220 9,617 9,617 209,617 9,617 9,617 209,617 10,217 10,217 210,217
14 1,220 10,316 10,316 210,316 10,316 10,316 210,316 11,052 11,052 211,052
15 1,220 10,956 10,956 210,956 10,956 10,956 210,956 11,852 11,852 211,852
16 1,220 11,528 11,528 211,528 11,528 11,528 211,528 12,611 12,611 212,611
17 1,220 12,018 12,018 212,018 12,018 12,018 212,018 13,326 13,326 213,326
18 1,220 12,411 12,411 212,411 12,411 12,411 212,411 13,991 13,991 213,991
19 1,220 12,686 12,686 212,686 12,686 12,686 212,686 14,604 14,604 214,604
20 1,220 12,820 12,820 212,820 12,820 12,820 212,820 15,158 15,158 215,158
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-25
<PAGE> 185
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 1,220 12,789 12,789 212,789 12,789 12,789 212,789 15,650 15,650 215,650
22 1,220 12,569 12,569 212,569 12,569 12,569 212,569 16,068 16,068 216,068
23 1,220 12,135 12,135 212,135 12,135 12,135 212,135 16,395 16,395 216,395
24 1,220 11,455 11,455 211,455 11,455 11,455 211,455 16,633 16,633 216,633
25 1,220 10,491 10,491 210,491 10,491 10,491 210,491 16,777 16,777 216,777
26 1,220 9,190 9,190 209,190 9,190 9,190 209,190 16,806 16,806 216,806
27 1,220 7,480 7,480 207,480 7,480 7,480 207,480 16,704 16,704 216,704
28 1,220 5,270 5,270 205,270 5,270 5,270 205,270 16,446 16,446 216,446
29 1,220 2,453 2,453 202,453 2,453 2,453 202,453 15,973 15,973 215,973
30 1,220 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 15,241 15,241 215,241
31 1,220 14,224 14,224 214,224
32 1,220 12,873 12,873 212,873
33 1,220 11,127 11,127 211,127
34 1,220 8,920 8,920 208,920
35 1,220 6,177 6,177 206,177
36 1,220 2,816 2,816 202,816
37 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-26
<PAGE> 186
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***
-------------------------- -------------------------- --------------------------
NET 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 1,220 0 802 200,802 0 859 200,859 0 859 200,859
5 1,220 3,138 3,858 203,858 3,945 4,665 204,665 4,002 4,722 204,722
10 1,220 7,112 7,232 207,232 10,149 10,269 210,269 10,498 10,618 210,618
20 1,220 12,820 12,820 212,820 25,971 25,971 225,971 29,123 29,123 229,123
@ Age 70 1,220 10,491 10,491 210,491 31,389 31,389 231,389 40,025 40,025 240,025
@ Age 85 1,220 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 41,456 41,456 241,456
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 30 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 35 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 44 based on current charges and a gross
investment return of 6.00%.
<TABLE>
<S> <C> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand that any
ACKNOWLEDGEMENT 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 applicant
ACKNOWLEDGEMENT 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-27
<PAGE> 187
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 1,220 0 802 200,802 0 859 200,859 0 859 200,859
2 1,220 509 1,589 201,589 673 1,754 201,754 679 1,760 201,760
3 1,220 1,401 2,362 202,362 1,725 2,686 202,686 1,742 2,703 202,703
4 1,220 2,278 3,118 203,118 2,816 3,656 203,656 2,849 3,690 203,690
5 1,220 3,138 3,858 203,858 3,945 4,665 204,665 4,002 4,722 204,722
6 1,220 3,979 4,580 204,580 5,112 5,712 205,712 5,202 5,802 205,802
7 1,220 4,801 5,281 205,281 6,318 6,798 206,798 6,450 6,930 206,930
8 1,220 5,598 5,959 205,959 7,560 7,920 207,920 7,748 8,109 208,109
9 1,220 6,370 6,610 206,610 8,838 9,078 209,078 9,097 9,338 209,338
10 1,220 7,112 7,232 207,232 10,149 10,269 210,269 10,498 10,618 210,618
11 1,220 8,070 8,070 208,070 11,750 11,750 211,750 12,208 12,208 212,208
12 1,220 8,866 8,866 208,866 13,269 13,269 213,269 13,859 13,859 213,859
13 1,220 9,617 9,617 209,617 14,824 14,824 214,824 15,571 15,571 215,571
14 1,220 10,316 10,316 210,316 16,411 16,411 216,411 17,342 17,342 217,342
15 1,220 10,956 10,956 210,956 18,022 18,022 218,022 19,171 19,171 219,171
16 1,220 11,528 11,528 211,528 19,648 19,648 219,648 21,057 21,057 221,057
17 1,220 12,018 12,018 212,018 21,276 21,276 221,276 22,997 22,997 222,997
18 1,220 12,411 12,411 212,411 22,889 22,889 222,889 24,990 24,990 224,990
19 1,220 12,686 12,686 212,686 24,463 24,463 224,463 27,033 27,033 227,033
20 1,220 12,820 12,820 212,820 25,971 25,971 225,971 29,123 29,123 229,123
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 2 Form # C1-98
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-28
<PAGE> 188
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 1,220 12,789 12,789 212,789 27,385 27,385 227,385 31,257 31,257 231,257
22 1,220 12,569 12,569 212,569 28,672 28,672 228,672 33,424 33,424 233,424
23 1,220 12,135 12,135 212,135 29,798 29,798 229,798 35,607 35,607 235,607
24 1,220 11,455 11,455 211,455 30,721 30,721 230,721 37,809 37,809 237,809
25 1,220 10,491 10,491 210,491 31,389 31,389 231,389 40,025 40,025 240,025
26 1,220 9,190 9,190 209,190 31,730 31,730 231,730 42,231 42,231 242,231
27 1,220 7,480 7,480 207,480 31,651 31,651 231,651 44,411 44,411 244,411
28 1,220 5,270 5,270 205,270 31,033 31,033 231,033 46,534 46,534 246,534
29 1,220 2,453 2,453 202,453 29,733 29,733 229,733 48,537 48,537 248,537
30 1,220 LAPSED LAPSED LAPSED 27,593 27,593 227,593 50,365 50,365 250,365
31 1,220 24,447 24,447 224,447 51,980 51,980 251,980
32 1,220 20,118 20,118 220,118 53,317 53,317 253,317
33 1,220 14,423 14,423 214,423 54,298 54,298 254,298
34 1,220 7,153 7,153 207,153 54,831 54,831 254,831
35 1,220 LAPSED LAPSED LAPSED 54,813 54,813 254,813
36 1,220 54,125 54,125 254,125
37 1,220 52,645 52,645 252,645
38 1,220 50,236 50,236 250,236
39 1,220 46,603 46,603 246,603
40 1,220 41,456 41,456 241,456
41 1,220 34,619 34,619 234,619
42 1,220 25,757 25,757 225,757
43 1,220 14,529 14,529 214,529
44 1,220 449 449 200,449
45 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,219.73-Premium Mode:
Annual-Riders: None
D-29
<PAGE> 189
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***
-------------------------- ---------------------------- ----------------------------
NET 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 1,323 0 899 200,899 0 1,025 201,025 0 1,025 201,025
5 1,323 3,610 4,330 204,330 5,565 6,285 206,285 5,628 6,348 206,348
10 1,323 8,031 8,151 208,151 16,331 16,451 216,451 16,748 16,868 216,868
20 1,323 14,562 14,562 214,562 61,882 61,882 261,882 66,325 66,325 266,325
@ Age 70 1,323 12,612 12,612 212,612 102,847 102,847 302,847 115,556 115,556 315,556
@ Age 85 1,323 LAPSED LAPSED LAPSED 281,914 281,914 481,914 497,648 497,648 697,648
@ Age 90 1,323 LAPSED LAPSED LAPSED 275,226 275,226 475,226 755,925 755,925 955,925
</TABLE>
* Policy lapses in policy year 31 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 52 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-30
<PAGE> 190
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 1,323 0 899 200,899 0 1,025 201,025 0 1,025 201,025
2 1,323 700 1,781 201,781 1,073 2,154 202,154 1,079 2,160 202,160
3 1,323 1,687 2,648 202,648 2,439 3,399 203,399 2,456 3,417 203,417
4 1,323 2,658 3,498 203,498 3,932 4,772 204,772 3,968 4,808 204,808
5 1,323 3,610 4,330 204,330 5,565 6,285 206,285 5,628 6,348 206,348
6 1,323 4,543 5,143 205,143 7,352 7,952 207,952 7,451 8,052 208,052
7 1,323 5,454 5,935 205,935 9,306 9,786 209,786 9,456 9,936 209,936
8 1,323 6,342 6,702 206,702 11,443 11,803 211,803 11,660 12,020 212,020
9 1,323 7,202 7,442 207,442 13,778 14,019 214,019 14,083 14,324 214,324
10 1,323 8,031 8,151 208,151 16,331 16,451 216,451 16,748 16,868 216,868
11 1,323 9,075 9,075 209,075 19,387 19,387 219,387 19,945 19,945 219,945
12 1,323 9,957 9,957 209,957 22,607 22,607 222,607 23,339 23,339 223,339
13 1,323 10,792 10,792 210,792 26,138 26,138 226,138 27,080 27,080 227,080
14 1,323 11,575 11,575 211,575 30,006 30,006 230,006 31,203 31,203 231,203
15 1,323 12,298 12,298 212,298 34,240 34,240 234,240 35,745 35,745 235,745
16 1,323 12,951 12,951 212,951 38,868 38,868 238,868 40,747 40,747 240,747
17 1,323 13,523 13,523 213,523 43,920 43,920 243,920 46,253 46,253 246,253
18 1,323 13,996 13,996 213,996 49,422 49,422 249,422 52,314 52,314 252,314
19 1,323 14,350 14,350 214,350 55,401 55,401 255,401 58,984 58,984 258,984
20 1,323 14,562 14,562 214,562 61,882 61,882 261,882 66,325 66,325 266,325
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Form # C1-98 Option: Specified Amount
for Option 2
Initial Modal Premium: $1,322.78-Premium Mode: Annual-Riders: None
D-31
<PAGE> 191
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 1,323 14,609 14,609 214,609 68,894 68,894 268,894 74,403 74,403 274,403
22 1,323 14,465 14,465 214,465 76,467 76,467 276,467 83,285 83,285 283,285
23 1,323 14,106 14,106 214,106 84,631 84,631 284,631 93,040 93,040 293,040
24 1,323 13,502 13,502 213,502 93,417 93,417 293,417 103,764 103,764 303,764
25 1,323 12,612 12,612 212,612 102,847 102,847 302,847 115,556 115,556 315,556
26 1,323 11,384 11,384 211,384 112,933 112,933 312,933 128,508 128,508 328,508
27 1,323 9,747 9,747 209,747 123,665 123,665 323,665 142,729 142,729 342,729
28 1,323 7,609 7,609 207,609 135,013 135,013 335,013 158,327 158,327 358,327
29 1,323 4,862 4,862 204,862 146,923 146,923 346,923 175,390 175,390 375,390
30 1,323 1,394 1,394 201,394 159,330 159,330 359,330 194,025 194,025 394,025
31 1,323 LAPSED LAPSED LAPSED 172,158 172,158 372,158 214,374 214,374 414,374
32 1,323 185,324 185,324 385,324 236,568 236,568 436,568
33 1,323 198,734 198,734 398,734 260,740 260,740 460,740
34 1,323 212,273 212,273 412,273 287,030 287,030 487,030
35 1,323 225,775 225,775 425,775 315,585 315,585 515,585
36 1,323 239,009 239,009 439,009 346,557 346,557 546,557
37 1,323 251,664 251,664 451,664 380,119 380,119 580,119
38 1,323 263,343 263,343 463,343 416,452 416,452 616,452
39 1,323 273,590 273,590 473,590 455,605 455,605 655,605
40 1,323 281,914 281,914 481,914 497,648 497,648 697,648
41 1,323 287,800 287,800 487,800 542,796 542,796 742,796
42 1,323 290,699 290,699 490,699 591,132 591,132 791,132
43 1,323 290,020 290,020 490,020 642,759 642,759 842,759
44 1,323 285,115 285,115 485,115 697,665 697,665 897,665
45 1,323 275,226 275,226 475,226 755,925 755,925 955,925
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 2 Form # C1-98
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-32
<PAGE> 192
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 1,323 259,465 259,465 459,465 817,620 817,620 1,017,620
47 1,323 236,730 236,730 436,730 882,817 882,817 1,082,817
48 1,323 205,574 205,574 405,574 951,581 951,581 1,151,581
49 1,323 163,883 163,883 363,883 1,024,768 1,024,768 1,224,768
50 1,323 108,104 108,104 308,104 1,102,720 1,102,720 1,302,720
51 1,323 31,694 31,694 231,694 1,185,289 1,185,289 1,385,289
52 1,323 LAPSED LAPSED LAPSED 1,271,777 1,271,777 1,471,777
53 1,323 1,363,635 1,363,635 1,563,635
54 1,323 1,461,256 1,461,256 1,661,256
55 1,323 1,565,213 1,565,213 1,765,213
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option: Form # C1-98
Specified Amount for Option 2
Initial Modal Premium: $1,322.78-Premium Mode:
Annual-Riders: None
D-33
<PAGE> 193
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 NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 692 0 372 200,000 0 372 200,000 0 372 200,000
5 692 1,394 1,803 200,000 1,394 1,803 200,000 1,405 1,814 200,000
10 692 3,378 3,446 200,000 3,378 3,446 200,000 3,434 3,502 200,000
20 692 7,659 7,659 200,000 7,659 7,659 200,000 8,137 8,137 200,000
@ Age 70 692 3,199 3,199 200,000 3,199 3,199 200,000 10,321 10,321 200,000
@ Age 85 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 37 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 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: 09/08/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode: Annual-Riders: None
D-34
<PAGE> 194
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>
1 692 0 372 200,000 0 372 200,000 0 372 200,000
2 692 124 738 200,000 124 738 200,000 126 739 200,000
3 692 553 1,098 200,000 553 1,098 200,000 557 1,102 200,000
4 692 976 1,453 200,000 976 1,453 200,000 983 1,460 200,000
5 692 1,394 1,803 200,000 1,394 1,803 200,000 1,405 1,814 200,000
6 692 1,805 2,146 200,000 1,805 2,146 200,000 1,822 2,163 200,000
7 692 2,209 2,482 200,000 2,209 2,482 200,000 2,233 2,506 200,000
8 692 2,607 2,811 200,000 2,607 2,811 200,000 2,639 2,844 200,000
9 692 2,996 3,133 200,000 2,996 3,133 200,000 3,039 3,176 200,000
10 692 3,378 3,446 200,000 3,378 3,446 200,000 3,434 3,502 200,000
11 692 3,938 3,938 200,000 3,938 3,938 200,000 4,008 4,008 200,000
12 692 4,418 4,418 200,000 4,418 4,418 200,000 4,507 4,507 200,000
13 692 4,885 4,885 200,000 4,885 4,885 200,000 4,996 4,996 200,000
14 692 5,338 5,338 200,000 5,338 5,338 200,000 5,476 5,476 200,000
15 692 5,776 5,776 200,000 5,776 5,776 200,000 5,947 5,947 200,000
16 692 6,197 6,197 200,000 6,197 6,197 200,000 6,407 6,407 200,000
17 692 6,599 6,599 200,000 6,599 6,599 200,000 6,856 6,856 200,000
18 692 6,979 6,979 200,000 6,979 6,979 200,000 7,295 7,295 200,000
19 692 7,333 7,333 200,000 7,333 7,333 200,000 7,722 7,722 200,000
20 692 7,659 7,659 200,000 7,659 7,659 200,000 8,137 8,137 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund
Inc., 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 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: 09/08/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-35
<PAGE> 195
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>
21 692 7,952 7,952 200,000 7,952 7,952 200,000 8,540 8,540 200,000
22 692 8,207 8,207 200,000 8,207 8,207 200,000 8,926 8,926 200,000
23 692 8,422 8,422 200,000 8,422 8,422 200,000 9,291 9,291 200,000
24 692 8,589 8,589 200,000 8,589 8,589 200,000 9,633 9,633 200,000
25 692 8,702 8,702 200,000 8,702 8,702 200,000 9,949 9,949 200,000
26 692 8,751 8,751 200,000 8,751 8,751 200,000 10,234 10,234 200,000
27 692 8,725 8,725 200,000 8,725 8,725 200,000 10,483 10,483 200,000
28 692 8,605 8,605 200,000 8,605 8,605 200,000 10,691 10,691 200,000
29 692 8,371 8,371 200,000 8,371 8,371 200,000 10,847 10,847 200,000
30 692 8,001 8,001 200,000 8,001 8,001 200,000 10,946 10,946 200,000
31 692 7,472 7,472 200,000 7,472 7,472 200,000 10,976 10,976 200,000
32 692 6,756 6,756 200,000 6,756 6,756 200,000 10,938 10,938 200,000
33 692 5,829 5,829 200,000 5,829 5,829 200,000 10,816 10,816 200,000
34 692 4,658 4,658 200,000 4,658 4,658 200,000 10,612 10,612 200,000
35 692 3,199 3,199 200,000 3,199 3,199 200,000 10,321 10,321 200,000
36 692 1,391 1,391 200,000 1,391 1,391 200,000 9,923 9,923 200,000
37 692 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 9,401 9,401 200,000
38 692 8,729 8,729 200,000
39 692 7,850 7,850 200,000
40 692 6,715 6,715 200,000
41 692 5,297 5,297 200,000
42 692 3,539 3,539 200,000
43 692 1,372 1,372 200,000
44 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-36
<PAGE> 196
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 NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 692 0 372 200,000 0 401 200,000 0 401 200,000
5 692 1,394 1,803 200,000 1,787 2,196 200,000 1,799 2,208 200,000
10 692 3,378 3,446 200,000 4,843 4,911 200,000 4,910 4,978 200,000
20 692 7,659 7,659 200,000 14,444 14,444 200,000 15,069 15,069 200,000
@ Age 70 692 3,199 3,199 200,000 28,871 28,871 200,000 38,320 38,320 200,000
@ Age 85 692 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 40,951 40,951 200,000
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 37 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 45 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 54 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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-37
<PAGE> 197
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>
1 692 0 372 200,000 0 401 200,000 0 401 200,000
2 692 124 738 200,000 207 821 200,000 209 822 200,000
3 692 553 1,098 200,000 714 1,259 200,000 718 1,263 200,000
4 692 976 1,453 200,000 1,240 1,717 200,000 1,248 1,725 200,000
5 692 1,394 1,803 200,000 1,787 2,196 200,000 1,799 2,208 200,000
6 692 1,805 2,146 200,000 2,354 2,695 200,000 2,373 2,714 200,000
7 692 2,209 2,482 200,000 2,943 3,216 200,000 2,970 3,243 200,000
8 692 2,607 2,811 200,000 3,554 3,758 200,000 3,592 3,796 200,000
9 692 2,996 3,133 200,000 4,187 4,323 200,000 4,238 4,374 200,000
10 692 3,378 3,446 200,000 4,843 4,911 200,000 4,910 4,978 200,000
11 692 3,938 3,938 200,000 5,716 5,716 200,000 5,802 5,802 200,000
12 692 4,418 4,418 200,000 6,554 6,554 200,000 6,663 6,663 200,000
13 692 4,885 4,885 200,000 7,425 7,425 200,000 7,564 7,564 200,000
14 692 5,338 5,338 200,000 8,329 8,329 200,000 8,504 8,504 200,000
15 692 5,776 5,776 200,000 9,268 9,268 200,000 9,485 9,485 200,000
16 692 6,197 6,197 200,000 10,240 10,240 200,000 10,509 10,509 200,000
17 692 6,599 6,599 200,000 11,246 11,246 200,000 11,578 11,578 200,000
18 692 6,979 6,979 200,000 12,282 12,282 200,000 12,693 12,693 200,000
19 692 7,333 7,333 200,000 13,349 13,349 200,000 13,856 13,856 200,000
20 692 7,659 7,659 200,000 14,444 14,444 200,000 15,069 15,069 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-38
<PAGE> 198
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>
21 692 7,952 7,952 200,000 15,563 15,563 200,000 16,334 16,334 200,000
22 692 8,207 8,207 200,000 16,704 16,704 200,000 17,648 17,648 200,000
23 692 8,422 8,422 200,000 17,865 17,865 200,000 19,011 19,011 200,000
24 692 8,589 8,589 200,000 19,039 19,039 200,000 20,422 20,422 200,000
25 692 8,702 8,702 200,000 20,222 20,222 200,000 21,881 21,881 200,000
26 692 8,751 8,751 200,000 21,404 21,404 200,000 23,386 23,386 200,000
27 692 8,725 8,725 200,000 22,574 22,574 200,000 24,934 24,934 200,000
28 692 8,605 8,605 200,000 23,715 23,715 200,000 26,522 26,522 200,000
29 692 8,371 8,371 200,000 24,807 24,807 200,000 28,143 28,143 200,000
30 692 8,001 8,001 200,000 25,826 25,826 200,000 29,795 29,795 200,000
31 692 7,472 7,472 200,000 26,749 26,749 200,000 31,466 31,466 200,000
32 692 6,756 6,756 200,000 27,548 27,548 200,000 33,161 33,161 200,000
33 692 5,829 5,829 200,000 28,193 28,193 200,000 34,867 34,867 200,000
34 692 4,658 4,658 200,000 28,650 28,650 200,000 36,588 36,588 200,000
35 692 3,199 3,199 200,000 28,871 28,871 200,000 38,320 38,320 200,000
36 692 1,391 1,391 200,000 28,793 28,793 200,000 40,049 40,049 200,000
37 692 LAPSED LAPSED LAPSED 28,331 28,331 200,000 41,761 41,761 200,000
38 692 27,373 27,373 200,000 43,436 43,436 200,000
39 692 25,778 25,778 200,000 45,026 45,026 200,000
40 692 23,383 23,383 200,000 46,493 46,493 200,000
41 692 19,998 19,998 200,000 47,811 47,811 200,000
42 692 15,398 15,398 200,000 48,934 48,934 200,000
43 692 9,316 9,316 200,000 49,806 49,806 200,000
44 692 1,409 1,409 200,000 50,358 50,358 200,000
45 692 LAPSED LAPSED LAPSED 50,512 50,512 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-39
<PAGE> 199
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>
46 692 50,172 50,172 200,000
47 692 49,233 49,233 200,000
48 692 47,567 47,567 200,000
49 692 44,907 44,907 200,000
50 692 40,951 40,951 200,000
51 692 35,444 35,444 200,000
52 692 27,929 27,929 200,000
53 692 17,835 17,835 200,000
54 692 4,293 4,293 200,000
55 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $692.37-Premium Mode:
Annual-Riders: None
D-40
<PAGE> 200
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 NET CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR PREMIUM VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 752 0 427 200,000 0 494 200,000 0 494 200,000
5 752 1,666 2,075 200,000 2,639 3,048 200,000 2,652 3,061 200,000
10 752 3,909 3,977 200,000 8,003 8,071 200,000 8,083 8,151 200,000
20 752 8,669 8,669 200,000 33,071 33,071 200,000 33,910 33,910 200,000
@ Age 70 752 4,917 4,977 200,000 167,827 167,827 200,000 178,658 178,658 207,243
@ Age 85 752 LAPSED LAPSED LAPSED 782,457 782,457 821,850 850,995 850,995 893,545
@ Age 90 752 LAPSED LAPSED LAPSED 1,266,476 1,266,476 1,329,799 1,406,952 1,406,952 1,477,299
</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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $751.91-Premium Mode:
Annual-Riders: None
D-41
<PAGE> 201
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>
1 752 0 427 200,000 0 494 200,000 0 494 200,000
2 752 235 849 200,000 426 1,039 200,000 427 1,041 200,000
3 752 719 1,264 200,000 1,097 1,643 200,000 1,102 1,647 200,000
4 752 1,196 1,673 200,000 1,833 2,310 200,000 1,841 2,318 200,000
5 752 1,666 2,075 200,000 2,639 3,048 200,000 2,652 3,061 200,000
6 752 2,130 2,471 200,000 3,522 3,863 200,000 3,543 3,884 200,000
7 752 2,587 2,860 200,000 4,491 4,764 200,000 4,522 4,795 200,000
8 752 3,036 3,240 200,000 5,554 5,769 200,000 5,598 5,803 200,000
9 752 3,477 3,613 200,000 6,721 6,858 200,000 6,781 6,918 200,000
10 752 3,909 3,977 200,000 8,003 8,071 200,000 8,083 8,151 200,000
11 752 4,519 4,519 200,000 9,611 9,611 200,000 9,716 9,716 200,000
12 752 5,048 5,048 200,000 11,312 11,312 200,000 11,449 11,449 200,000
13 752 5,564 5,564 200,000 13,191 13,191 200,000 13,366 13,366 200,000
14 752 6,066 6,066 200,000 15,265 15,265 200,000 15,487 15,487 200,000
15 752 6,552 6,552 200,000 17,554 17,554 200,000 17,835 17,835 200,000
16 752 7,021 7,021 200,000 20,081 20,081 200,000 20,432 20,432 200,000
17 752 7,470 7,470 200,000 22,869 22,869 200,000 23,307 23,307 200,000
18 752 7,896 7,896 200,000 25,943 25,943 200,000 26,489 26,489 200,000
19 752 8,297 8,297 200,000 29,333 29,333 200,000 30,011 30,011 200,000
20 752 8,669 8,669 200,000 33,071 33,071 200,000 33,910 33,910 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 35 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None
D-42
<PAGE> 202
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>
21 752 9,007 9,007 200,000 37,191 37,191 200,000 38,227 38,227 200,000
22 752 9,308 9,308 200,000 41,732 41,732 200,000 43,002 43,002 200,000
23 752 9,568 9,568 200,000 46,738 46,738 200,000 48,285 48,285 200,000
24 752 9,780 9,780 200,000 52,259 52,259 200,000 54,128 54,128 200,000
25 752 9,939 9,939 200,000 58,346 58,346 200,000 60,591 60,591 200,000
26 752 10,033 10,033 200,000 65,058 65,058 200,000 67,740 67,740 200,000
27 752 10,051 10,051 200,000 72,461 72,461 200,000 75,650 75,650 200,000
28 752 9,977 9,977 200,000 80,625 80,625 200,000 84,401 84,401 200,000
29 752 9,789 9,789 200,000 89,630 89,630 200,000 94,085 94,085 200,000
30 752 9,466 9,466 200,000 99,570 99,570 200,000 104,805 104,805 200,000
31 752 8,984 8,984 200,000 110,552 110,552 200,000 116,677 116,677 200,000
32 752 8,318 8,318 200,000 122,705 122,705 200,000 129,837 129,837 200,000
33 752 7,441 7,441 200,000 136,178 136,178 200,000 144,435 144,435 200,000
34 752 6,322 6,322 200,000 151,150 151,150 200,000 160,644 160,644 200,000
35 752 4,917 4,917 200,000 167,827 167,827 200,000 178,658 178,658 207,243
36 752 3,168 3,168 200,000 186,409 186,409 214,370 198,626 198,626 228,420
37 752 993 993 200,000 206,982 206,982 233,890 220,750 220,750 249,448
38 752 LAPSED LAPSED LAPSED 229,750 229,750 255,022 245,266 245,266 272,245
39 752 254,960 254,960 277,906 272,433 272,433 296,952
40 752 282,902 282,902 302,705 302,549 302,549 323,727
41 752 313,914 313,914 329,610 335,950 335,950 352,747
42 752 348,169 348,169 365,578 372,932 372,932 391,578
43 752 385,986 385,986 405,286 413,868 413,868 434,562
44 752 427,711 427,711 449,096 459,171 459,171 482,130
45 752 473,714 473,714 497,400 509,290 509,290 534,755
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None
D-43
<PAGE> 203
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>
46 752 524,390 524,390 550,610 564,718 564,718 592,954
47 752 580,157 580,157 609,165 625,997 625,997 657,296
48 752 641,449 641,449 673,522 693,715 693,715 728,400
49 752 708,723 708,723 744,159 768,491 768,491 806,915
50 752 782,457 782,457 821,580 850,995 850,995 893,545
51 752 863,156 863,156 906,314 941,977 941,977 989,076
52 752 951,349 951,349 998,916 1,042,214 1,042,214 1,094,325
53 752 1,047,586 1,047,586 1,099,965 1,152,541 1,152,541 1,210,168
54 752 1,152,437 1,152,437 1,210,059 1,273,812 1,273,812 1,337,502
55 752 1,266,476 1,266,476 1,329,799 1,406,952 1,406,952 1,477,299
56 752 1,390,268 1,390,268 1,459,781 1,552,930 1,552,930 1,630,576
57 752 1,528,124 1,528,124 1,589,249 1,714,810 1,714,810 1,783,402
58 752 1,682,512 1,682,512 1,732,988 1,894,915 1,894,915 1,951,763
59 752 1,856,533 1,856,533 1,893,663 2,096,226 2,096,226 2,138,151
60 752 2,054,256 2,054,256 2,074,798 2,322,142 2,322,142 2,345,364
61 752 2,271,977 2,271,977 2,294,697 2,572,026 2,572,026 2,597,746
62 752 2,510,789 2,510,789 2,535,897 2,848,279 2,848,279 2,876,762
63 752 2,770,322 2,770,322 2,798,025 3,153,733 3,153,733 3,185,271
64 752 3,052,609 3,052,609 3,083,135 3,491,411 3,491,411 3,526,325
65 752 3,363,589 3,363,589 3,397,225 3,864,651 3,864,651 3,903,298
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 45 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $751.91-Premium Mode: Annual-Riders: None
D-44
<PAGE> 204
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 CASH FUND DEATH CASH FUND DEATH CASH FUND DEATH
YEAR NET VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS VALUE VALUE PROCEEDS
PREMIUM
OUTLAY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 2,170 0 1,545 200,000 0 1,545 200,000 0 1,545 200,000
5 2,170 5,953 7,234 200,000 5,953 7,234 200,000 6,253 7,535 200,000
10 2,170 12,529 12,743 200,000 12,529 12,743 200,000 14,272 14,485 200,000
20 2,170 11,537 11,537 200,000 11,537 11,537 200,000 26,998 26,998 200,000
@ Age 70 2,170 16,454 16,454 200,000 16,454 16,454 200,000 22,267 22,267 200,000
@ Age 85 2,170 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 8,456 8,456 200,000
@ Age 90 0 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED
</TABLE>
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
*** Policy lapses in policy year 31 based on current charges and a gross
investment return of 0.00%.
<TABLE>
<S> <C>
APPLICANT'S OR POLICYOWNER'S I have received a copy of this illustration and understand
ACKNOWLEDGEMENT that any not-guaranteed elements are subject to change and
could be either higher or lower. The agent has told me that
they are not guaranteed.
------------------------------------------- ------------
Signature of Applicant or Policyowner Date
------------------------------------------- ------------
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: 09/08/2000
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-45
<PAGE> 205
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 2,170 0 1,545 200,000 0 1,545 200,000 0 1,545 200,000
2 2,170 1,117 3,040 200,000 1,117 3,040 200,000 1,149 3,072 200,000
3 2,170 2,781 4,490 200,000 2,781 4,490 200,000 2,871 4,580 200,000
4 2,170 4,395 5,890 200,000 4,395 5,890 200,000 4,572 6,068 200,000
5 2,170 5,953 7,234 200,000 5,953 7,234 200,000 6,253 7,535 200,000
6 2,170 7,447 8,515 200,000 7,447 8,515 200,000 7,911 8,979 200,000
7 2,170 8,867 9,721 200,000 8,867 9,721 200,000 9,545 10,399 200,000
8 2,170 10,199 10,840 200,000 10,199 10,840 200,000 11,151 11,792 200,000
9 2,170 11,427 11,854 200,000 11,427 11,854 200,000 12,728 13,155 200,000
10 2,170 12,529 12,743 200,000 12,529 12,743 200,000 14,272 14,485 200,000
11 2,170 13,883 13,883 200,000 13,883 13,883 200,000 16,170 16,170 200,000
12 2,170 14,851 14,851 200,000 14,851 14,851 200,000 17,803 17,803 200,000
13 2,170 15,622 15,622 200,000 15,622 15,622 200,000 19,378 19,378 200,000
14 2,170 16,168 16,168 200,000 16,168 16,168 200,000 20,871 20,871 200,000
15 2,170 16,454 16,454 200,000 16,454 16,454 200,000 22,267 22,267 200,000
16 2,170 16,428 16,428 200,000 16,428 16,428 200,000 23,533 23,533 200,000
17 2,170 16,024 16,024 200,000 16,024 16,024 200,000 24,659 24,659 200,000
18 2,170 15,151 15,151 200,000 15,151 15,151 200,000 25,625 25,625 200,000
19 2,170 13,698 13,698 200,000 13,698 13,698 200,000 26,412 26,412 200,000
20 2,170 11,537 11,537 200,000 11,537 11,537 200,000 26,998 26,998 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-46
<PAGE> 206
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 2,170 8,527 8,527 200,000 8,527 8,527 200,000 27,363 27,363 200,000
22 2,170 4,504 4,504 200,000 4,504 4,504 200,000 27,443 27,443 200,000
23 2,170 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 27,185 27,185 200,000
24 2,170 26,523 26,523 200,000
25 2,170 25,383 25,383 200,000
26 2,170 23,676 23,676 200,000
27 2,170 21,304 21,304 200,000
28 2,170 18,153 18,153 200,000
29 2,170 13,965 13,965 200,000
30 2,170 8,456 8,456 200,000
31 2,170 1,411 1,411 200,000
32 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 0.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/08/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-47
<PAGE> 207
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***
-------------------------- -------------------------- --------------------------
NET 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 2,170 0 1,545 200,000 0 1,651 200,000 0 1,651 200,000
5 2,170 5,953 7,234 200,000 7,464 8,746 200,000 7,791 9,073 200,000
10 2,170 12,529 12,743 200,000 18,144 18,358 200,000 20,177 20,391 200,000
20 2,170 11,537 11,537 200,000 34,505 34,505 200,000 53,807 53,807 200,000
@ Age 70 2,170 16,454 16,454 200,000 29,157 29,157 200,000 36,248 36,248 200,000
@ Age 85 2,170 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 82,468 82,468 200,000
@ Age 90 2,170 LAPSED LAPSED LAPSED LAPSED LAPSED LAPSED 72,797 72,797 200,000
</TABLE>
* Policy lapses in policy year 23 based on guaranteed charges and a gross
investment return of 0.00%.
** Policy lapses in policy year 28 based on guaranteed charges and a gross
investment return of 6.00%.
*** Policy lapses in policy year 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: 09/07/2000
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-48
<PAGE> 208
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 2,170 0 1,545 200,000 0 1,651 200,000 0 1,651 200,000
2 2,170 1,117 3,040 200,000 1,424 3,347 200,000 1,458 3,380 200,000
3 2,170 2,781 4,490 200,000 3,388 5,097 200,000 3,483 5,192 200,000
4 2,170 4,395 5,890 200,000 5,403 6,898 200,000 5,593 7,089 200,000
5 2,170 5,953 7,234 200,000 7,464 8,746 200,000 7,791 9,073 200,000
6 2,170 7,447 8,515 200,000 9,565 10,634 200,000 10,080 11,148 200,000
7 2,170 8,867 9,721 200,000 11,699 12,553 200,000 12,461 13,316 200,000
8 2,170 10,199 10,840 200,000 13,851 14,492 200,000 14,937 15,578 200,000
9 2,170 11,427 11,854 200,000 16,007 16,434 200,000 17,508 17,936 200,000
10 2,170 12,529 12,743 200,000 18,144 18,358 200,000 20,177 20,391 200,000
11 2,170 13,883 13,883 200,000 20,656 20,656 200,000 23,351 23,351 200,000
12 2,170 14,851 14,851 200,000 22,911 22,911 200,000 26,423 26,423 200,000
13 2,170 15,622 15,622 200,000 25,101 25,101 200,000 29,607 29,607 200,000
14 2,170 16,168 16,168 200,000 27,195 27,195 200,000 32,885 32,885 200,000
15 2,170 16,454 16,454 200,000 29,157 29,157 200,000 36,248 36,248 200,000
16 2,170 16,428 16,428 200,000 30,935 30,935 200,000 39,673 39,673 200,000
17 2,170 16,024 16,024 200,000 32,460 32,460 200,000 43,153 43,153 200,000
18 2,170 15,151 15,151 200,000 33,641 33,641 200,000 46,676 46,676 200,000
19 2,170 13,698 13,698 200,000 34,366 34,366 200,000 50,231 50,231 200,000
20 2,170 11,537 11,537 200,000 34,505 34,505 200,000 53,807 53,807 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the cash value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form #C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-49
<PAGE> 209
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 2,170 8,527 8,527 200,000 33,907 33,907 200,000 57,392 57,392 200,000
22 2,170 4,504 4,504 200,000 32,405 32,405 200,000 60,943 60,943 200,000
23 2,170 LAPSED LAPSED LAPSED 29,795 29,795 200,000 64,424 64,424 200,000
24 2,170 25,826 25,826 200,000 67,794 67,794 200,000
25 2,170 20,158 20,158 200,000 71,009 71,009 200,000
26 2,170 12,321 12,321 200,000 74,015 74,015 200,000
27 2,170 1,663 1,663 200,000 76,762 76,762 200,000
28 2,170 LAPSED LAPSED LAPSED 79,187 79,187 200,000
29 2,170 81,142 81,142 200,000
30 2,170 82,468 82,468 200,000
31 2,170 83,065 83,065 200,000
32 2,170 82,715 82,715 200,000
33 2,170 81,165 81,165 200,000
34 2,170 78,015 78,015 200,000
35 2,170 72,797 72,797 200,000
36 2,170 64,871 64,871 200,000
37 2,170 53,333 53,333 200,000
38 2,170 36,880 36,880 200,000
39 2,170 14,316 14,316 200,000
40 0 LAPSED LAPSED LAPSED
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 6.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,170.04-Premium Mode: Annual-Riders: None
D-50
<PAGE> 210
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***
------------------------ ---------------------------- ----------------------------
NET 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 2,305 0 1,672 200,000 0 1,898 200,000 0 1,898 200,000
5 2,305 6,574 7,855 200,000 10,124 11,406 200,000 10,480 11,761 200,000
10 2,305 13,746 13,960 200,000 28,670 28,884 200,000 31,029 31,243 200,000
20 2,305 14,044 14,044 200,000 98,767 93,767 200,000 121,796 121,796 200,000
@ Age 70 2,305 18,271 18,271 200,000 57,216 57,216 200,000 65,766 65,766 200,000
@ Age 85 2,305 LAPSED LAPSED LAPSED 281,195 281,195 295,254 373,510 373,510 392,185
@ Age 90 2,305 LAPSED LAPSED LAPSED 467,839 467,839 491,231 630,322 630,322 661,839
</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: 09/07/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form #C1-98
Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None
D-51
<PAGE> 211
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 2,305 0 1,672 200,000 0 1,898 200,000 0 1,898 200,000
2 2,305 1,370 3,292 200,000 2,044 3,967 200,000 2,078 4,001 200,000
3 2,305 3,157 4,866 200,000 4,522 6,231 200,000 4,621 6,330 200,000
4 2,305 4,894 6,389 200,000 7,209 8,705 200,000 7,412 8,908 200,000
5 2,305 6,574 7,855 200,000 10,124 11,406 200,000 10,480 11,761 200,000
6 2,305 8,188 9,256 200,000 13,283 14,351 200,000 13,850 14,918 200,000
7 2,305 9,728 10,583 200,000 16,701 17,556 200,000 17,555 18,409 200,000
8 2,305 11,180 11,821 200,000 20,396 21,037 200,000 21,627 22,268 200,000
9 2,305 12,526 12,953 200,000 24,381 24,808 200,000 26,105 26,533 200,000
10 2,305 13,746 13,960 200,000 28,670 28,884 200,000 31,029 31,243 200,000
11 2,305 15,218 15,218 200,000 33,709 33,709 200,000 36,867 36,867 200,000
12 2,305 16,304 16,304 200,000 38,923 38,923 200,000 43,073 43,073 200,000
13 2,305 17,195 17,195 200,000 44,556 44,556 200,000 49,921 49,921 200,000
14 2,305 17,862 17,862 200,000 50,642 50,642 200,000 57,462 57,462 200,000
15 2,305 18,271 18,271 200,000 57,216 57,216 200,000 65,766 65,766 200,000
16 2,305 18,371 18,371 200,000 64,313 64,313 200,000 74,897 74,897 200,000
17 2,305 18,097 18,097 200,000 71,971 71,971 200,000 84,952 84,952 200,000
18 2,305 17,360 17,360 200,000 80,228 80,228 200,000 96,034 96,034 200,000
19 2,305 16,050 16,050 200,000 89,135 89,135 200,000 108,267 108,267 200,000
20 2,305 14,044 14,044 200,000 98,767 98,767 200,000 121,796 121,796 200,000
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None
D-52
<PAGE> 212
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 2,305 11,201 11,201 200,000 109,232 109,232 200,000 136,794 136,794 200,000
22 2,305 7,362 7,362 200,000 120,687 120,687 200,000 153,452 153,452 200,000
23 2,305 2,345 2,345 200,000 133,346 133,346 200,000 172,013 172,013 200,000
24 2,305 LAPSED LAPSED LAPSED 147,501 147,501 200,000 192,778 192,778 202,417
25 2,305 163,539 163,539 200,000 215,879 215,879 226,673
26 2,305 181,992 181,992 200,000 241,434 241,434 253,506
27 2,305 203,336 203,336 213,503 269,693 269,693 283,177
28 2,305 226,913 226,913 238,259 300,929 300,929 315,975
29 2,305 252,804 252,804 265,444 335,431 335,431 352,202
30 2,305 281,195 281,195 295,254 373,510 373,510 392,185
31 2,305 312,283 312,283 327,897 415,513 415,513 436,288
32 2,305 346,273 346,273 363,587 461,801 461,801 484,891
33 2,305 383,381 383,381 402,550 512,761 512,761 538,399
34 2,305 423,829 423,829 445,020 568,792 568,792 597,232
35 2,305 467,839 467,839 491,231 630,322 630,322 661,839
36 2,305 515,634 515,634 541,416 697,802 697,802 732,692
37 2,305 568,826 568,826 591,579 772,607 772,607 803,512
38 2,305 628,355 628,355 647,206 855,804 855,804 881,478
39 2,305 695,405 695,405 709,313 948,756 948,756 967,731
40 2,305 771,529 771,529 779,244 1,053,025 1,053,025 1,063,555
41 2,305 855,360 855,360 863,914 1,168,357 1,168,357 1,180,041
42 2,305 947,326 947,326 956,800 1,295,863 1,295,863 1,308,822
43 2,305 1,047,302 1,047,302 1,057,775 1,436,849 1,436,849 1,451,217
44 2,305 1,156,068 1,156,068 1,167,629 1,592,709 1,592,709 1,608,636
45 2,305 1,275,890 1,275,890 1,288,649 1,764,985 1,764,985 1,782,635
</TABLE>
This is an illustration, not a policy.
The maximum loan value is equal to 90% of the Cash Value.
Borrowed funds are credited at 4.50% interest. Premiums are assumed to be paid
at the beginning of the year or month. All other values and ages are at the end
of the year and reflect any loans and surrenders. The current cost of insurance
rates are not guaranteed and subject to change.
The hypothetical investment results are illustrative only, and should not be
deemed a representation of past or future investment results. Actual investment
results may be more or less than those shown, and will depend on a number of
factors, including the investment allocations by policyowners, and the different
investment rates of return for MONY Series Fund, Inc. or Enterprise Accumulation
Trust portfolios. The Cash Value, Fund Value and Death Proceeds for a policy
would be different from those shown if the actual rates of investment return
applicable to the policy averaged 0.00% or 12.00% over a period of years, but
also fluctuated above or below those averages for individual policy years. No
representations can be made by MONY Life Insurance Company, MONY Series Fund,
Inc., 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 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: 09/07/00
Age 55 Female Non-Smoker Preferred Version 2.01
Specified Amount: $200,000-Death Benefit Option:
Specified Amount for Option 1 Form # C1-98
Initial Modal Premium: $2,305.37-Premium Mode: Annual-Riders: None
D-53
<PAGE> 213
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 214
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 215
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> 216
PART II
(INFORMATION NOT REQUIRED IN A PROSPECTUS)
<PAGE> 217
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents, and Reports as may be prescribed by any rule or regulation of the
Commission heretofore, or hereafter duly adopted pursuant to authority conferred
in that Section.
RULE 484 UNDERTAKING
The Amended and Restated By-Laws of MONY Life Insurance Company ("MONY")
provide, in Article XV as follows:
Each person (and the heirs, executors and administrators of such
person) made or threatened to be made a party to any action, civil or
criminal, by reason of being or having been a trustee, officer, or employee
of the corporation (or by reason of serving any other organization at the
request of the corporation) shall be indemnified to the extent permitted by
the law of the State of New York and in the manner prescribed therein. To
this end, and as authorized by Section 722 of the Business Corporation Law
of the State of New York, the Board may adopt all resolutions, authorize
all agreements and take all actions with respect to the indemnification of
directors and officers, and the advance payment of their expenses in
connection therewith.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification for such
liabilities (other than the payment by the Registrant of expense incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant, will (unless in the opinion of its counsel the
matter has been settled by controlling precedent) submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
REPRESENTATIONS RELATING TO SECTION 26 OF
THE INVESTMENT COMPANY ACT OF 1940
The Registrant and MONY Life Insurance Company represent that the fees and
charges deducted under the Contract, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by MONY Life Insurance Company.
II-1
<PAGE> 218
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The Facing Sheet.
Cross-Reference to items required by Form N-8B-2.
Prospectus consisting of __ pages.
The Undertaking to file reports.
The signatures.
Written consents of the following persons:
a. Frederick C. Tedeschi, Vice President and Chief
Counsel -- Operations, MONY Life Insurance Company
b. PricewaterhouseCoopers LLP, Independent Accountants
The following exhibits:
1. The following exhibits correspond to those required by paragraph A of
the instructions as exhibits to Form N-8B2:
(1) Resolution of the Board of Trustees of The Mutual Life Insurance
Company of New York authorizing establishment of MONY Variable
Account L, filed as Exhibit 1 (1) to Pre-Effective Amendment No. 1
to Registration Statement on Form S-6, dated December 17, 1990
(Registration Nos. 33-37719 and 811-6217), is incorporated herein
by reference.
(2) Not applicable.
(3) (a) Underwriting Agreement between The Mutual Life Insurance Company
of New York, MONY Series Fund, Inc., and MONY Securities Corp.,
filed as Exhibit 1 (3) (a) to Registration Statement on Form
S-6, dated November 9, 1990 (Registration Nos. 33-37719 and
811-6217), is incorporated by referenced herein.
(b) Proposed specimen agreement between MONY Securities Corp. and
registered representatives, filed as Exhibit 3(b) of
Pre-Effective Amendment No. 1, dated December 17, 1990, to
Registration Statement on Form N-4 (Registration Nos. 33-37722
and 811-6126) is incorporated herein by reference.
(c) Commission schedule (included in Exhibit 1.(5)).
(4) Not applicable.
(5) Form of policy filed as Exhibit 1.(5) to Pre-Effective Amendment No.
2 to Registration Statement on Form S-6, dated April 22, 1999
(Registration Nos. 333-71677 and 811-6217) is incorporated herein by
reference.
(6) Amended and Restated Charter and Amended and Restated By-Laws of
MONY Life Insurance Company filed as Exhibit 1.(6) to Registration
Statement on Form S-6, dated January 29, 1999 (Registration Nos.
333-71417 and 811-6217), is incorporated herein by reference.
(7) Not applicable.
(8) (a) Form of agreement to purchase shares (included in Exhibit
1.(5)).
(b) Amended Investment Advisory Agreement between MONY Life
Insurance Company of America and MONY Series Fund, Inc. filed as
Exhibit 5(i) to Post-Effective amendment No. 14 to Registration
Statement (Registration Nos. 2-95501 and 811-4209) dated
February 27, 1998, is incorporated herein by reference.
Investment Advisory Agreement between Enterprise Capital
Management, Inc. ("Enterprise Capital") and the Enterprise
Accumulation Trust ("Trust"), and Enterprise Capital, the Trust,
and Quest for Value Advisors, as sub-advisor, filed as Exhibit 5
to Post-Effective Amendment No. 8, dated September 30, 1994, to
II-2
<PAGE> 219
Registration Statement on Form N-1A (Registration No. 33-21534),
is incorporated herein by reference.
(c) Services Agreement between The Mutual Life Insurance Company of
New York and MONY Life Insurance Company of America filed as
Exhibit 5(ii) to Pre-Effective Amendment to Registration
Statement (Registration Nos. 2-95501 and 811-4209) dated July
19, 1985, is incorporated herein by reference.
(9) Not applicable.
(10) Application Form for Flexible Premium Variable Universal Life
Insurance Policy (included in Exhibit 1.(5)).
2. Opinion and consent of Frederick C. Tedeschi, Vice President and Chief
Counsel -- Operations, MONY Life Insurance Company, as to legality of
the securities being registered filed as Exhibit 2 to Pre-Effective
Amendment No. 1 to Registration Statement (Registration Nos. 333-71677
and 811-6217) dated April 2, 1999, is incorporated herein by reference.
3. Not applicable.
4. Not applicable.
5. Not applicable.
6. Consent of PricewaterhouseCoopers LLP as to financial statements of MONY
Life Insurance Company is filed herewith as Exhibit 6.
II-3
<PAGE> 220
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
MONY Variable Account L of MONY Life Insurance Company, has duly caused this
Post-Effective Amendment No. 6 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on this 15th day of December, 2000.
MONY VARIABLE ACCOUNT L OF
MONY LIFE INSURANCE COMPANY
By: /s/ MICHAEL I. ROTH
------------------------------------
Michael I. Roth, Director, Chairman
of the Board and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 6 to the Registration Statement has been duly
signed below by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<S> <C>
/s/ MICHAEL I. ROTH December 15, 2000
-----------------------------------------------------
Michael I. Roth
Director, Chairman and Chief Executive Officer
/s/ SAMUEL J. FOTI December 15, 2000
-----------------------------------------------------
Samuel J. Foti
Director, President and Chief Operating Officer
/s/ KENNETH M. LEVINE December 15, 2000
-----------------------------------------------------
Kenneth M. Levine
Director, Executive Vice President and Chief
Investment Officer
/s/ RICHARD DADDARIO December 15, 2000
-----------------------------------------------------
Richard Daddario
Executive Vice President and Chief Financial Officer
/s/ PHILLIP A. EISENBERG December 15, 2000
-----------------------------------------------------
Phillip A. Eisenberg
Senior Vice President and Chief Actuary
/s/ LEE M. SMITH December 15, 2000
-----------------------------------------------------
Lee M. Smith
Corporate Secretary and Vice President, Government
Relations
December 15, 2000
-----------------------------------------------------
Tom H. Barrett*
Director
December 15, 2000
-----------------------------------------------------
David L. Call*
Director
</TABLE>
II-4
<PAGE> 221
<TABLE>
<CAPTION>
SIGNATURE DATE
--------- ----
<S> <C>
December 15, 2000
-----------------------------------------------------
G. Robert Durham*
Director
December 15, 2000
-----------------------------------------------------
James B. Farley*
Director
December 15, 2000
-----------------------------------------------------
Robert Holland, Jr.*
Director
December 15, 2000
-----------------------------------------------------
James L. Johnson*
Director
December 15, 2000
-----------------------------------------------------
Frederick W. Kanner
Director
December 15, 2000
-----------------------------------------------------
Robert R. Kiley*
Director
December 15, 2000
-----------------------------------------------------
John R. Meyer*
Director
December 15, 2000
-----------------------------------------------------
Jane C. Pfeiffer*
Director
December 15, 2000
-----------------------------------------------------
Thomas C. Theobald*
Director
*By: /s/ LEE M. SMITH December 15, 2000
-----------------------------------------------------
Lee M. Smith
Attorney In Fact
</TABLE>
II-5
<PAGE> 222
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
6. Consent of PricewaterhouseCoopers LLP.
</TABLE>
