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PRIME PLAN I
PRIME PLAN II
PRIME PLAN III
PRIME PLAN IV
DIRECTED LIFE
DIRECTED LIFE 2
Issued by
ML LIFE INSURANCE COMPANY OF NEW YORK
ML of New York Variable Life Separate Account
SUPPLEMENT DATED JULY 22, 1999
TO THE
PROSPECTUSES DATED APRIL 30, 1991
NEW INVESTMENT DIVISION. Effective July 22, 1999, you can allocate premium
payments and investment base to the investment division corresponding to a
series of The Merrill Lynch Fund of Stripped ("Zero") U.S. Treasury Securities
(the "Zero Trust") maturing on February 15, 2019. For more complete information
about the Zero Trust, please refer to a copy of the current prospectus for the
Zero Trust previously distributed to you in May.
The Zero Trust is intended to provide safety of capital and a competitive yield
to maturity. The Zero Trust purchases at a deep discount U.S. Government-backed
investments which make no periodic interest payments. When held to maturity the
investments should receive approximately a fixed yield. The value of Zero Trust
units before maturity varies more than it would if the Zero Trust contained
interest-bearing U.S. Treasury securities of comparable maturities.
The Zero Trust portfolio consists mainly of:
- bearer debt obligations issued by the U.S. Government stripped of
their unmatured interest coupons;
- coupons stripped from U.S. debt obligations; and
- receipts and certificates for such stripped debt obligations and
coupons.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of
Merrill Lynch & Co., Inc., is the sponsor for the Zero Trust. The sponsor will
sell units of the Zero Trust to the ML of New York Variable Life Separate
Account (the "Separate Account") and has agreed to repurchase units when we need
to sell them to pay benefits and make reallocations. We pay the sponsor a fee
for these transactions and are reimbursed through the trust charge assessed to
the divisions investing in the Zero Trust. (See "Charges to Divisions Investing
in the Zero Trust" below.)
Because the underlying securities in the Zero Trust will grow to their face
value on the maturity date, we can estimate a compound rate of return to
maturity for the Zero Trust units. But because the Separate Account holds the
units, we need to take into account the asset charge and the trust charge
described in your variable life contract prospectus in estimating the net rate
of return. It depends on the compound rate of return adjusted for these charges.
It does not,
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however, represent the actual return on a payment that we might receive under
the contract on that date, since it does not reflect the charges for deferred
contract load, mortality costs and any net loan cost deducted from a contract's
investment base, which are also described in your variable life contract
prospectus.
The Zero Trust maturing on February 15, 2019 has a targeted rate of return to
maturity as of July 21, 1999 of 5.46% for Prime Plan I, Prime Plan II, Prime
Plan III, Prime Plan IV, and Directed Life, and 5.20% for Directed Life 2.
Since the value of the Zero Trust units will vary daily to reflect the market
value of the underlying securities, the compound rate of return to maturity for
the Zero Trust units and the net rate of return to maturity for the investment
division will vary correspondingly.
CHARGES TO DIVISIONS INVESTING IN THE ZERO TRUST. We assess a daily trust charge
against the assets of each division investing in the Zero Trust. This charge
reimburses us for the transaction charge paid to MLPF&S when units are sold to
the Separate Account. The trust charge is currently equivalent to .34% annually
at the beginning of the year. We may increase it, but it won't exceed .50%
annually at the beginning of the year. The charge is based on cost with no
expected profit.
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Please contact the Variable Life Service Center at (800) 354-5333, if you would
like to receive illustrations of contract values that reflect average fund
expenses for all investment divisions available under the contracts on July 22,
1999.
Please retain this supplement with your variable life contract prospectus for
your reference. If you have any questions about these changes, please contact
your Financial Consultant or call the Variable Life Service Center.
SUPPNY-2 (7/99)
