<PAGE>
C.M. Life Insurance Company
Panorama Plus Separate Account
Panorama Plus Variable Annuity
This prospectus describes the Panorama Plus variable annuity contract offered by
C.M. Life Insurance Company. We will issue this contract as an individual or a
group flexible premium deferred variable annuity depending on the state where we
issue the contract. It provides for accumulation of contract value and annuity
payments on a fixed and variable basis.
You, the contract owner, have a number of investment choices in this contract.
These investment choices include the general account that is subject to an
interest rate factor adjustment, as well as the following ten funds which are
offered through our separate account, Panorama Plus Separate Account. You may
maintain contract value in a maximum of ten investment choices at any one time.
Panorama Series Fund, Inc.
. Panorama Total Return Portfolio
. Panorama Growth Portfolio
. Panorama Government Securities Portfolio
. Oppenheimer International Growth Fund/VA**
Oppenheimer Variable Account Funds
. Oppenheimer Money Fund/VA
. Oppenheimer Bond Fund/VA
. Oppenheimer Main Street Growth & Income Fund/VA*
Fidelity Variable Insurance Products Fund II
. VIP II Contrafund(R) Portfolio
American Century Variable Portfolios, Inc.
. American Century VP Income & Growth Fund
T. Rowe Price Equity Series, Inc.
. T. Rowe Price Mid-Cap Growth Portfolio
*Subject to state availability
**Prior to October 1, 1999, this Fund was called Panorama International Equity
Portfolio.
Please read this prospectus before investing. You should keep it for future
reference. It contains important information about the Panorama Plus contract.
To learn more about the Panorama Plus contract, you can obtain a copy of the
Statement of Additional Information (SAI), dated May 1, 1999. We filed the SAI
with the Securities and Exchange Commission (SEC) and it is legally a part of
this prospectus. The SEC maintains a Web site (http://www.sec.gov) that contains
the SAI, material incorporated by reference and other information regarding
companies that file electronically with the SEC. The Table of Contents of the
SAI is on page 32 of this prospectus. For a free copy of the SAI, or for general
inquiries, call our Annuity Service Center at (800) 366-8226 or write to:
Panorama Plus, Annuity Products, W562, P.O. Box 9067, Springfield, Massachusetts
01102-9067.
The contracts:
. are not bank deposits.
. are not federally insured.
. are not endorsed by any bank or governmental agency.
. are not guaranteed and may be subject to loss of principal.
The SEC has not approved these contracts or determined that this prospectus is
accurate or complete. Any representation that it has is a criminal offense.
May 1, 1999, Supplemented October 1, 1999.
1
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Table Of Contents
Page
Highlights 4
Panorama Plus Separate Account -
Table of Fees and Expenses 5
The Company 9
The Panorama Plus Deferred Variable
Annuity Contract - General Overview 9
Ownership of the Contract 10
Owner 10
Annuitant 10
Contingent Annuitant 10
Beneficiary 10
Purchasing a Contract 11
Purchase Payments 11
Allocation of Purchase Payments 11
Investment Choices 12
The Separate Account 12
The Funds 12
The General Account 14
Contract Value 15
Accumulation Units 15
Minimum Contract Value 15
Transfers 15
Transfers During the Accumulation Phase 15
Transfers During the Income Phase 16
Dollar Cost Averaging Program 16
Withdrawals 17
Systematic Withdrawal Program 18
Expenses 19
Insurance Charges 19
Mortality and Expense Risk Charge 19
Administrative Expense Charge 19
Contract Maintenance Fee 19
Surrender Charge 19
Free Withdrawals 20
Window Period 20
Interest Rate Factor Adjustment 20
Premium Taxes 21
Transfer Fee 21
Income Taxes 21
Fund Expenses 21
The Income Phase 22
Fixed Annuity Payments 22
Variable Annuity Payments 22
Annuity Unit Value 23
Annuity Options 23
Death Benefit 24
Death Benefit During the Accumulation Phase 24
Death of Contract Owner 24
Death of Annuitant 25
Death Benefit Options 25
Death of Annuitant on or after the
Annuity Income Date 25
Taxes 26
Annuity Contracts in General 26
Qualified and Non-Qualified Contracts 26
Withdrawals - Non-Qualified Contracts 26
Withdrawals - Qualified Contracts 27
Withdrawals - Tax Sheltered Annuities 27
Withdrawals - Texas Optional Retirement Program 28
Other Information 29
Terminal Illness Benefit 29
Performance 29
Standardized Total Returns 29
Nonstandard Total Returns 29
Yield and Effective Yield 29
Related Performance 30
Year 2000 30
Distributors 30
Electronic Transmission of Application
Information 30
Assignment 30
Misstatement of Age or Sex 31
Voting Rights 31
Reservation of Rights 31
Suspension of Payments or Transfers 31
Legal Proceedings 31
Financial Statements 31
Additional Information 32
Appendix A -
Condensed Financial Information A-1
2 Table Of Contents
<PAGE>
Index Of Special Terms
We have tried to make this prospectus as readable and understandable for you as
possible. By the very nature of the contract, however, certain technical words
or terms are unavoidable. We have identified the following as some of these
words or terms. The page that is indicated here is where we believe you will
find the best explanation for the word or term.
Page
Accumulation Phase 9
Accumulation Unit 15
Annuitant 10
Annuity Income Date 22
Annuity Options 23
Annuity Payments 22
Annuity Service Center 1
Annuity Unit Value 23
Contract Issue Date 11
Free Withdrawals 20
Income Phase 22
Interest Rate Factor Adjustment 20
Non-Qualified 26
Purchase Payment 11
Qualified 26
Separate Account 12
Tax Deferral 9
Window Period 20
Index Of Special Terms 3
<PAGE>
Highlights
This prospectus describes the general provisions of the Panorama Plus contract.
You may review a copy of the contract upon request.
Free Look
You have a right to examine your contract. If you change your mind about owning
your contract, you can cancel it within 15 calendar days after we issue it.
However, this time period may vary by state. When you cancel the contract within
this time period, we will not assess a surrender charge, interest rate factor
adjustment, contract maintenance fee or premium tax. You will receive back your
contract value as of the business day we receive your contract and written
request at our Annuity Service Center. If your state requires it or if you
purchase this contract as an IRA, we will return the greater of your purchase
payments less any withdrawals you took, or the contract value.
Surrender Charge
We do not deduct a sales charge when we receive a purchase payment from you.
However, we may assess a surrender charge if you withdraw all of or any part of
the contract value. We will deduct this charge on the business day we receive
your written request for a withdrawal. The surrender charge is 5% of the amount
withdrawn for the first five contract years and 0% thereafter.
Federal Income Tax Penalty
If you withdraw any of the contract value from your non-qualified contract, a
10% federal income tax penalty may be applied to the amount of the withdrawal
that is includible in your gross income for tax purposes. Some withdrawals may
be exempt from the penalty tax. They include any amounts:
. paid on or after you reach age 59 1/2;
. paid to your beneficiary after you die;
. paid if you become totally disabled as that
term is defined in the Internal Revenue Code;
. paid in a series of substantially equal payments made annually or more
frequently, for life or your life expectancy or for the joint life
expectancies of you and your designated beneficiary;
. paid under an immediate annuity; or
. that come from purchase payments made before August 14, 1982.
The Internal Revenue Code (the Code) treats any withdrawals (1) allocable to
purchase payments made after August 13, 1982 in an annuity contract entered into
prior to August 14, 1982 and (2) from any annuity contract entered into after
August 14, 1982, as first coming from earnings and then from your purchase
payments. Separate tax penalties and restrictions apply to withdrawals under
qualified contracts. Please refer to the Taxes section of this prospectus for
more information.
4 Highlights
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Panorama Plus Separate Account
Table Of Fees And Expenses
Contract Owner Transaction Expenses
Transfer Fee: Currently, no fee
Sales Load on Purchases: 0%
Surrender Charge
(as a percentage of contract value withdrawn): 5% for contract years 1-5
and 0% thereafter
Contract Maintenance Fee: $30 per Contract Year.
Separate Account Annual Expenses
(as a percentage of the average account value)
Mortality and Expense Risk Charge: 1.07%
Administrative Charge: 0.07%
----
Total Separate Account Annual Expenses: 1.14%
Table Of Fees And Expenses 5
<PAGE>
Annual Fund Expenses
(as a percentage of average net assets as of December 31, 1998)
<TABLE>
<CAPTION>
Other Total Operating
Management Expenses Expenses After
Fees After Expense Expense
Reimburse- Reimburse-
ments ments
<S> <C> <C> <C>
Oppenheimer Money Fund/VA 0.45% 0.05% 0.50%
Oppenheimer Bond Fund/VA 0.72% 0.02% 0.74%
Oppenheimer Main Street Growth & Income
Fund/VA* 0.74% 0.05% 0.79%
Panorama Total Return Portfolio 0.53% 0.02% 0.55%
Panorama Growth Portfolio 0.52% 0.01% 0.53%
Oppenheimer International Growth Fund/VA*** 1.00% 0.09% 1.09%
Panorama Government Securities Portfolio 0.52% 0.16% 0.68%
Fidelity's VIP II Contrafund(R)Portfolio 0.59% 0.11% 0.70%**
American Century VP Income & Growth Portfolio 0.70% 0.00% 0.70%
T. Rowe Price Mid-Cap Growth Portfolio 0.85% 0.00% 0.85%
</TABLE>
* Subject to state availability
** A portion of the brokerage commissions that the VIP II Contrafund(R)
Portfolio pays was used to reduce the other expenses for the Portfolio. In
addition, this Portfolio has entered into arrangements with its custodian
whereby credits realized as a result of uninvested cash balances were used to
reduce custodian expenses. Including these reductions, the other expenses for
this Portfolio would have been 0.07%, decreasing the total fund operating
expenses to 0.66%.
*** Prior to October 1, 1999, this Fund was called Panorama International Equity
Portfolio.
(See the funds' prospectuses for more information.)
In addition to the expenses indicated in the Table of Fees and Expenses, we
apply an interest rate factor adjustment to the amount of your contract value in
the general account that is subject to surrender charge if you make a full or
partial withdrawal during the accumulation phase. We also apply an interest rate
factor adjustment on the annuity income date if you apply the general account
balance to a variable annuity option. We do not apply an interest rate factor
adjustment if the amount withdrawn is a free withdrawal amount, or the
withdrawal is made during a window period. The adjustment does not apply to
contracts issued to Pennsylvania residents. The interest rate factor adjustment
may increase or decrease the general account balance withdrawal proceeds.
6 Table Of Fees And Expenses
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Examples
The following examples are designed to help you understand the expenses in the
contract. The examples show the cumulative expenses you would pay assuming you
invested $1,000 in a contract and allocated all of it to a fund which earned 5%
each year. All the expenses shown in the table of fees and expenses, including
the annual fund expenses, are assumed to apply.
In the first example, we assume that you withdrew all of your money at the end
of years 1, 3, 5 or 10.
<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C> <C>
Money Market Sub-Account/1/ $69 $105 $94 $205
Income Sub-Account/2/ 72 112 107 231
Main Street Growth & Income Sub-Account/3/ 72 113 110 236
Total Return Sub-Account 70 106 97 210
Growth Sub-Account 70 105 96 208
International Growth Sub-Account/4/ 75 122 125 267
Government Securities Sub-Account 71 110 104 224
Contrafund(R)Sub-Account 71 110 105 227
Income & Growth Sub-Account 71 110 105 227
Mid-Cap Growth Sub-Account 73 115 113 243
</TABLE>
/1/The Money Market Sub-Account invests in the Oppenheimer Money Fund/VA.
/2/The Income Sub-Account invests in the Oppenheimer Bond Fund/VA.
/3/Subject to state availability.
/4/Prior to October 1, 1999, this Sub-Account was called International Equity
Sub-Account.
Table Of Fees And Expenses 7
<PAGE>
In this second example, we assume 1) that you did not make a withdrawal or 2)
that you decided to begin the income phase at the end of each year shown. (The
income phase is not available until the end of the 5th contract year.)
<TABLE>
<CAPTION>
Year 1 3 5 10
<S> <C> <C> <C> <C> <C>
Money Market Sub-Account/1/ $18 $55 $94 $205
Income Sub-Account/2/ 20 62 107 231
Main Street Growth & Income Sub-Account/3/ 21 64 110 236
Total Return Sub-Account 18 56 97 210
Growth Sub-Account 18 56 96 208
International Growth Sub-Account/4/ 24 73 125 267
Government Securities Sub-Account 20 60 104 224
Contrafund(R) Sub-Account 20 61 105 227
Income & Growth Sub-Account 20 61 105 227
Mid-Cap Growth Sub-Account 21 66 113 243
</TABLE>
/1/The Money Market Sub-Account invests in the Oppenheimer Money Fund/VA.
/2/The Income Sub-Account invests in the Oppenheimer Bond Fund/VA..
/3/Subject to state availability.
/4/Prior to October 1, 1999, this Sub-Account was called International Equity
Sub-Account.
The purpose of the Table of Fees and Expenses is to assist you in understanding
the various costs and expenses that you will incur. The table reflects expenses
of the separate account and the funds.
The examples reflect the $30 annual contract maintenance fee as an annual charge
of 0.086% of the assets. This charge is based on an anticipated average contract
value of $35,000.
The examples do not reflect any premium taxes. However, premium taxes may apply.
The examples should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
There is an accumulation unit value history contained in Appendix A - Condensed
Financial Information.
8 Table Of Fees And Expenses
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The Company
C.M. Life Insurance Company, 140 Garden Street, Hartford, Connecticut 06154, is
a stock life insurance company. It was chartered by a special Act of the
Connecticut General Assembly on April 25, 1980. It is principally engaged in the
sale of life insurance and annuities, and is licensed in all states except New
York. The Company is a wholly-owned subsidiary of Massachusetts Mutual Life
Insurance Company (MassMutual).
MassMutual is a mutual life insurance company specially chartered by the
Commonwealth of Massachusetts on May 14, 1851. It is currently licensed to
transact life, accident, and health insurance business in all states, the
District of Columbia, Puerto Rico and certain provinces of Canada. MassMutual
had estimated consolidated statutory assets in excess of $67 billion and
estimated total assets under management of $176.8 billion as of December 31,
1998.
The Panorama Plus Deferred Variable Annuity Contract
General Overview
This annuity is a contract between you, the owner and us, C.M. Life. The
contract is intended for retirement savings or other long-term investment
purposes. In exchange for your purchase payments, we agree to pay you an income
when you choose to receive it. You elect the income period beginning on a date
you designate that is at least 5 years in the future from the date we issued
your contract. The contract, like all deferred annuity contracts, has two phases
- - the accumulation phase and the income phase. Your contract is in the
accumulation phase until you decide to begin receiving annuity payments. During
the accumulation phase we provide a death benefit. Once you begin receiving
annuity payments, your contract enters the income phase.
You are not taxed on contract earnings until you take money from your contract.
This is known as tax deferral.
The contract is called a variable annuity because you can choose to allocate
your purchase payments among various investment choices. Your choices include
ten funds (subject to state availability) and the general account. The amount of
money you are able to accumulate in your contract during the accumulation phase
depends upon the investment performance of the funds you elect as well as the
interest we credit on the general account.
At the beginning of the income phase, you can choose to receive annuity payments
on a variable basis, fixed basis or a combination of both. If you choose
variable payments, the amount of the annuity payments will fluctuate depending
on the investment performance of the funds you elect for the income phase. If
you elect to receive payments on a fixed basis, the payments you receive will
remain level.
We may issue the contract as an individual or group flexible premium deferred
variable annuity. In those states where we issue a group contract, we issue a
certificate to individuals. The certificate is subject to the terms of the group
contract under which we issue the certificate. You may become a participant
under the group contract by completing an application and forwarding an initial
purchase payment to us. The certificate we issue to a participant indicates the
participant's rights and benefits under the group contract.
Terms of the group contract are controlling.
The participant as owner may exercise all rights and benefits of the certificate
without the consent of the group contract owner. Unless we state otherwise, the
owner of a certificate under a group Panorama Plus deferred variable annuity and
the owner of an individual Panorama Plus deferred variable annuity have the same
rights and benefits. As a result, the term "contract" means either an individual
Panorama Plus deferred variable annuity or a certificate issued under the group
Panorama Plus deferred variable annuity.
The Company / General Overview 9
<PAGE>
Ownership of the Contract
Owner
The owner is named at time of application. The owner can be an individual or a
non-natural person. We will not issue a contract to you if you have reached your
85th birthday as of the date we proposed to issue the contract.
As the owner of the contract, you exercise all rights under the contract. The
owner names the beneficiary. You may change the owner of the contract at any
time prior to the annuity date by written request. If you change the owner, the
change is subject to our underwriting rules. Changing the owner may result in
tax consequences. On and after the annuity income date, you continue as the
owner.
Annuitant
The annuitant is the person on whose life we base annuity payments. You
designate the annuitant at the time of application. We will not issue a contract
to you if the proposed annuitant has reached his/her 85th birthday as of the
date we proposed to issue the contract. You may change the annuitant before the
annuity income date, subject to our underwriting rules. However, the annuitant
may not be changed on a contract owned by a non-natural person.
Contingent Annuitant
You may name a contingent annuitant. If the annuitant dies before the annuity
income date, the contingent annuitant will receive all benefits otherwise due
the annuitant, providing he/she is less than 85 years of age on the date the
annuitant died.
Beneficiary
The beneficiary is the person(s) or entity you name to receive any death
benefit. You name the beneficiary at the time of application. Unless an
irrevocable beneficiary has been named, you can change the beneficiary at any
time before you die.
After we receive proof of death, the beneficiary has the exclusive right to:
. appoint a contingent beneficiary who would succeed to the beneficiary's
interest if the beneficiary dies; and
. make transfers under the contract.
10 Ownership of the Contract
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Purchasing a Contract
Purchase Payments
The minimum amount we accept for your initial purchase payment is $500, or $40
per month when purchased under an automatic investment plan. You can make
additional purchase payments of as little as $50.
The maximum amount of cumulative purchase payments we accept without our prior
approval is based on the annuitant's age when we issued the contract. The
maximum amount is:
. $1 million up to the annuitant's 76th birthday;
or
. $500,000 if the annuitant is age 76 or older.
You may make your initial purchase payment, along with your completed
application, by giving them to your agent/broker. You may make additional
purchase payment by mailing them to our Annuity Service Center. You may also
instruct your bank to wire transfer funds to:
Fleet Bank, Hartford, CT
ABA #01190045
CM Life Insurance/Panorama Plus Account
#5033-9395
Ref: (VA Contract Number)
Name: (Your Name)
We have the rights to reject any application or purchase payment.
Allocation of Purchase Payments
When you purchase your contract, you choose how we will apply your purchase
payments among the investment choices. If you make additional purchase payments,
we will apply them in the same way as your first purchase payment, unless you
tell us otherwise.
Once we receive your purchase payment and the necessary information at our
Annuity Service Center, we will issue your contract and apply your first
purchase payment within 2 business days. If you do not give us all of the
information we need, we will contact you to get it. If for some reason we are
unable to complete this process within 5 business days, we will either send back
your money or get your permission to keep it until we get all of the necessary
information.
We consider the date we credit your initial purchase payment to your contract as
the contract issue date. We use this contract issue date to determine contract
years and contract anniversaries.
If you add more money to your contract by making additional purchase payments,
we will credit these amounts to your contract on the business day we receive
them at our Annuity Service Center. Our business day closes when the New York
Stock Exchange closes, usually 4:00 p.m. Eastern time. If we receive your
purchase payment at our Annuity Service Center on a non-business day or after
the business day closes, we will credit the amount to your contract effective
the next business day.
After the first contract year, we limit the amount of money that you may
allocate to the general account in any one contract year to the greater of:
. $25,000; or
. 125% of the average annual purchase payments you have allocated to the
general account during the last 5 contract years, or all years, if your
contract is less than 5 years old.
This restriction does not apply during the window period.
Purchasing a Contract 11
<PAGE>
Investment Choices
The Separate Account
We established a separate account, Panorama Plus Separate Account, to hold the
assets that underlie the contracts. Our Board of Directors adopted a resolution
to establish the separate account under Connecticut insurance law on September
25, 1991. We have registered the separate account with the Securities and
Exchange Commission as a unit investment trust under the Investment Company Act
of 1940.
C.M. Life owns the assets of the separate account. However, those separate
account assets equal to the reserves and other contract liabilities are not
chargeable with liabilities arising out of any other business we may conduct.
All the income, gains and losses (realized or unrealized) resulting from these
assets are credited to, or charged against, the contracts and not against any
other contracts we may issue.
The separate account is currently divided into 10 sub-accounts. Each of these
sub-accounts invests in a fund. You bear the complete investment risk for
purchase payments that you allocate to a fund.
You may maintain contract value in a maximum of 10 investment choices at any one
time. Therefore, you may maintain contract value in a maximum of 10 funds at any
one time or 9 funds and the general account at any one time.
The Funds
Subject to state availability, the contract offers 10 funds which are listed
below. We may add additional funds in the future.
Panorama Series Fund, Inc.
Panorama Series Fund, Inc. ("Panorama Fund") is an open-end investment company.
Oppenheimer Funds, Inc. ("OFI"), is the investment adviser to the Panorama Fund.
OFI has operated as an investment adviser since 1959 and, together with a
subsidiary, manages investment companies with over $95 billion in assets and
over 4 million shareholder accounts as of December 31, 1998. OFI is owned by
Oppenheimer Acquisition Corporation, a holding company that is owned in part by
senior officers for OFI and controlled by MassMutual. The address of OFI is Two
World Trade Center, New York, NY 10048-0203.
Panorama Total Return Portfolio. The Panorama Total Return Portfolio seeks to
maximize the total investment return (including both capital appreciation and
income) by allocating its assets among stocks, corporate bonds, U.S. Government
securities and its instrumentalities, and money market instruments according to
changing market conditions.
Panorama Growth Portfolio. The Panorama Growth Portfolio seeks long-term growth
of capital by investing primarily in common stocks with low price-earnings
ratios and better than anticipated earnings. Realization of current income is a
secondary consideration.
Oppenheimer International Growth Fund/VA.* The Oppenheimer International Growth
Fund/VA seeks long-term growth of capital by investing primarily in equity
securities of companies wherever located, the primary stock market of which is
outside the United States.
*Prior to October 1, 1999, this Fund was called Panorama International Equity
Portfolio and Babson-Stewart Ivory International was the subadviser to the Fund.
Panorama Government Securities Portfolio. The Panorama Government Securities
Portfolio seeks a high level of current income with a high degree of safety of
principal, by investing primarily in U.S. Government securities and U.S.
Government related securities.
12 Investment Choices
<PAGE>
Oppenheimer Variable Account Funds
Oppenheimer Variable Account Funds ("Oppenheimer Funds") is an investment
company consisting of ten separate series of shares known as funds. The
Oppenheimer Funds are also advised by OFI.
Oppenheimer Bond Fund/VA. The Oppenheimer Bond Fund/VA seeks a high level of
current income. The Fund seeks capital growth when consistent with its primary
objective. This Fund will, under normal market conditions, invest at least 65%
of its total assets in investment grade debt securities
Oppenheimer Money Fund/VA. The Oppenheimer Money Fund/VA seeks maximum current
income from investments in money market securities that is consistent with low
capital risk and maintenance of liquidity. The fund invests in short-term, high
quality money market securities.
Oppenheimer Main Street Growth & Income Fund/VA.* The Oppenheimer Main Street
Growth & Income Fund/VA seeks total return (which includes growth in the value
of its shares as well as current income) from equity and debt securities.
* Subject to state availability.
T. Rowe Price Equity Series, Inc.
T. Rowe Price Equity Series, Inc. is a diversified, open-end investment company
incorporated in Maryland in 1994. The T. Rowe Price Mid-Cap Growth Portfolio is
a separate series of shares of T. Rowe Price Equity Series, Inc. T. Rowe Price
Associates, Inc. was founded in 1937 and is the investment adviser to the
Portfolio. Its business address is 100 East Pratt Street, Baltimore, MD 21202.
T. Rowe Price Mid-Cap Growth Portfolio. The T. Rowe Price Mid-Cap Growth
Portfolio seeks long-term capital appreciation by investing in mid-cap stocks
with potential for above-average earnings growth. T. Rowe Price defines mid-cap
companies as those with market capitalizations within the range of companies in
the S&P 400 Mid-Cap Index
American Century Variable Portfolios, Inc.
American Century Variable Portfolios, Inc. ("American Century VP") was organized
as a Maryland Corporation in 1987 and is a diversified, open-end management
investment company. American Century Management, Inc. ("American Century") is
the investment manager of American Century VP. American Century has been
providing investment advisory services to investment companies and institutional
investors since founded in 1958. American Century's address is American Century
Tower, 4500 Main Street, Kansas City, Missouri 64111.
American Century VP Income & Growth Fund. The American Century VP Income &
Growth Fund seeks dividend growth, current income and capital appreciation by
investing in common stocks.
Fidelity Variable Insurance Products Fund II
Fidelity Variable Insurance Products Fund II ("VIP II") is an open-end
management investment company, organized as a Massachusetts business trust in
1988. Fidelity's VIP II Contrafund(R) Portfolio is a diversified fund of VIP II.
Fidelity Management & Research Company ("FMR") is the investment adviser to
Fidelity's VIP II Contrafund(R) Portfolio. FMR is the management arm of Fidelity
Investments(R). Fidelity Investments has its principal business address at 82
Devonshire Street, Boston, MA 02109.
Fidelity Management & Research(U.K.) Inc. in London, England, and Fidelity
Management & Research (Far East) Inc. in Tokyo, Japan, assist FMR with foreign
investments. They each serve as subadvisors for Fidelity's VIP II Contrafund
Portfolio.
Investment Choices 13
<PAGE>
Fidelity's VIP II Contrafund(R) Portfolio. Fidelity's VIP II Contrafund(R)
Portfolio seeks long-term capital appreciation by investing in the securities of
companies whose value is not fully recognized by the public.
There is no assurance that the funds will achieve their stated objective. The
fund prospectuses contain more detailed information about the funds. Current
copies of the fund prospectuses are attached to this prospectus. You should read
the information contained in the funds' prospectuses carefully before investing.
The General Account
Amounts that you allocate to the general account become part of our general
account assets and are subject to the claims of all our creditors. All of our
general account assets will be available to fund benefits under a contract.
You can also make transfers of your contract value into the general account. You
do not participate in the investment performance of the assets in the general
account. Instead, we credit your contract with interest at a specified rate that
we declare in advance. We guarantee this rate will be at least 3% per year. We
may credit a higher rate of interest at our discretion.
Any part of your contract value that is held in the general account is subject
to an interest rate factor adjustment. We explain the interest rate factor
adjustment later in this prospectus and in the attached prospectus for the fixed
account with interest rate factor adjustment.
14 Investment Choices
<PAGE>
Contract Value
Your contract value is the sum of your value in the separate account and the
general account.
Your value in the separate account will vary depending on the investment
performance of the funds you choose. In order to keep track of your contract
value, we use a unit of measure called an accumulation unit. During the income
phase of your contract we call the unit an annuity unit.
Accumulation Units
Every business day we determine the value of an accumulation unit for each of
the funds. Changes in the accumulation unit value reflect the investment
performance of the fund as well as deductions for insurance and other charges.
The value of an accumulation unit may go up or down from business day to
business day.
The Statement of Additional Information contains more information on the
calculation of the accumulation unit value.
When you make a purchase payment to the funds, we credit your contract with
accumulation units. We determine the number of accumulation units to credit by
dividing the amount of the purchase payment allocated to a fund by the value of
one accumulation unit for that fund. When you make a withdrawal, we deduct from
your contract accumulation units representing the withdrawal amount.
We calculate the value of an accumulation unit for each fund after the New York
Stock Exchange closes each business day. Any change in the accumulation unit
value will be reflected in your contract value.
Example:
On Monday we receive an additional purchase payment of $5,000 from you. You have
told us you want this to go to the Oppenheimer Bond Fund/VA. When the New York
Stock Exchange closes on that Monday, we determine that the value of an
accumulation unit for the Oppenheimer Bond Fund/VA is $13.90. We then divide
$5,000 by $13.90 and credit your contract on Monday night with 359.71
accumulation units for the Oppenheimer Bond Fund/VA.
Minimum Contract Value
You must maintain a minimum contract value of $250 during the accumulation phase
of your contract. If you fail to do so, we may, upon 60 days notice, return your
contract value less any applicable fees or charges. Your contract will continue
in force if you make purchase payments that restore your contract value to the
minimum contract value within 60 days of the notice date.
Transfers
You can transfer all or part of your contract value. You can make transfers by
telephone, internet or by other means we authorize. To make transfers other than
by telephone or internet you must submit a written request. We will use
reasonable procedures to confirm that instructions given to us are genuine. We
may be liable for any losses due to unauthorized or fraudulent instructions, if
we fail to use such procedures. We may tape record all telephone instructions.
Transfers During the Accumulation Phase
You, or the beneficiary if a death benefit has become payable, may transfer all
or part of the assets in a fund or the general account. You can make a transfer
to or from the general account and to or from any fund. We currently do not
limit the number of times a year you may make transfers. We currently do not
impose a fee on transfers. However, we reserve the right to charge a fee in the
future.
The following rules apply to any transfer during the accumulation phase:
1. The minimum amount that you may transfer is $100.
Contract Value 15
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2. The total amount that you may transfer to or from the general account is
limited to the greater of:
. $25,000, or
. 30% of the general account balance at the end of the previous contract
year.
3. We only allow transfers between competing accounts during the window
period. For this purpose, we consider the general account and the
Oppenheimer Money Fund/VA "competing accounts".
The window period is the last 30 days of each 5-year period.
4. We restrict other transfers involving any competing account for certain
periods:
. for a period of 90 days following a transfer out of a competing
account, you may not transfer into the other competing account.
. for a period of 90 days following a transfer into a competing account,
you may not transfer out of the other competing account.
5. You may maintain contract value in a maximum of 10 investment choices at
any one time. Therefore, you may maintain contract value in a maximum of 10
funds at any one time or 9 funds and the general account at any one time.
If you want to transfer contract value to an eleventh investment choice,
you must transfer 100% of your contract value from one or more of your
current investment choices.
Your transfer is effective on the business day at the accumulation unit value
next determined after we receive your fully completed request at our Annuity
Service Center. Our business day closes when the New York Stock Exchange closes,
usually 4:00 p.m. Eastern time. If we receive your fully completed request at
our Annuity Service Center on a non-business day or after our business day
closes, your transfer request will be effective on the next business day.
Transfers During the Income Phase
During the income phase you may make only 1 transfer of your value in the
separate account each contract year. We do not permit transfers to or from the
general account.
We have the right to terminate or modify these transfer provisions.
Dollar Cost Averaging Program
The Dollar Cost Averaging Program allows you to systematically transfer a set
amount from the general account or a elected fund to any of the other funds. By
allocating amounts on a regular schedule as opposed to allocating the total
amount at one particular time, you may be less susceptible to the impact of
market fluctuations. The Dollar Cost Averaging Program is available only during
the accumulation phase.
Dollar Cost Averaging does not assure a profit and does not protect you against
loss in declining markets. Since Dollar Cost Averaging involves continuous
investment in securities regardless of fluctuating price levels of such
securities, you should consider your financial ability to continue the Dollar
Cost Averaging Program through periods of fluctuating price levels.
We offer 3 Dollar Cost Averaging options.
1. Fixed dollar amount transfers from one fund to one or more other fund(s).
The minimum transfer amount is $100.
2. Fixed dollar amount transfers from the general account to one or more
fund(s) except the Oppenheimer Money Fund/VA. The minimum transfer is $100.
You may elect this option only during the accumulation phase at the time of your
initial purchase payment into the general account or on your contract
anniversary date. We must receive your written request to elect this option at
least 5 business days before your contract anniversary.
We limit the amount you may transfer from the general account as follows:
. In the initial contract year, you may transfer the greater of:
a) 30% of your initial purchase payment, or
b) $25,000.
. In subsequent contract years, you may transfer the greater of:
16 Contract Value
<PAGE>
a) 30% of your contract value in the general account at the end of
the previous contract year, or
b) $25,000.
3. Transfers of interest from the general account to any fund(s) except the
Oppenheimer Money Fund. You must have at least $5,000 in the general
account on each transfer date to participate in this option. We waive the
$100 minimum transfer amount for this option.
You may elect this option only:
. at the time you make the initial purchase payment to the general
account, or
. in subsequent years, on your contract's anniversary date.
We do not allow you to make additional transfers from the general account while
Dollar Cost Averaging options 2 or 3 are in effect, unless your contract is in
the window period.
You can choose the frequency at which we make the Dollar Cost Averaging
transfers, i.e., monthly, quarterly, semi-annually or annually. You will also
choose the specific date on which you would like the first Dollar Cost Averaging
transfer to occur. However, if you elect a date that is less than 5 business
days from the date the election form is received at our Annuity Service Center,
we may defer the first transfer for one month. If you do not elect a start date,
we will automatically start the Dollar Cost Averaging Program within 5 business
days from the date we receive your election form. You may make changes to your
election, including termination of the program, by written request.
The Dollar Cost Averaging option will terminate:
. if you withdraw your total contract value;
. if we have made the last transfer you elected;
. if there is insufficient contract value to make the transfer;
. upon your death or the annuitant's death;
. if we receive from you a written request to terminate the program at
our Annuity Service Center at least 5 business days prior to the next
transfer date;
. if for option 3, your contract value in the general account falls
below $5,000; or
. if you begin receiving annuity payments.
We currently do not charge you for participation in the Dollar Cost Averaging
Program. However, we reserve the right to charge for this feature in the future.
We have the right to modify, terminate or suspend the Dollar Cost Averaging
Program.
Withdrawals
During the accumulation phase you may make either partial or total withdrawals
of your contract value. Your withdrawal request is effective on the business day
we receive your written request at our Annuity Service Center. If we receive
your request at our Annuity Service Center on a non-business day or after our
business day closes, your withdrawal request will be effective on the next
business day. We will pay any withdrawal amount within 7 days of our receipt of
your fully completed written request at our Annuity Service Center unless we are
required to suspend or postpone withdrawal payments.
Unless you instruct us otherwise, we will take any partial withdrawal
proportionally from your contract value in the funds and the general account.
The minimum amount that you may withdraw from the separate account or general
account is $100. We require that after you make a partial withdrawal you keep at
least $250 in the contract. Partial withdrawals are subject to a surrender
charge.
When you make a total withdrawal you will receive your contract value:
. less any applicable surrender charge;
. less any applicable premium tax;
. less any contract maintenance fee, and
. less any purchase payments we credited to your contract that have not
cleared the bank, until they clear the bank.
We also apply the interest rate factor adjustment to amounts withdrawn from the
general account, unless you withdraw amounts during the window period.
Contract Value 17
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Systematic Withdrawal Program
This program provides for an automatic monthly, quarterly, semi-annual or annual
payment to you from your contract of at least $100. Currently, we do not charge
for this program, but we reserve the right to charge in the future.
You may elect to begin the Systematic Withdrawal Program on or after your first
contract anniversary. We will begin systematic withdrawals on the date you elect
as long as we receive a fully completed written request at least 5 business days
prior to the date you elected. If the start date you elect is less than 5 days
after we receive your written request, we may postpone the start of your
systematic withdrawals for one month. If you do not elect a start date, we will
automatically begin systematic withdrawals within 5 business days after we
receive your request.
Your systematic withdrawal program ends:
. if you withdraw your total contract value;
. upon your death or the annuitant's death;
. if we process the last withdrawal you elected;
. if your value in a elected fund or the general account is insufficient
to complete the withdrawal;
. if you begin receiving annuity payments;
. if you give us a written request to terminate your program. We must
receive your request at least 5 business days before the next
scheduled withdrawal date.
The Systematic Withdrawal Program is available only during the accumulation
phase. Withdrawals in excess of your free withdrawal amount may be subject to a
surrender charge and interest rate factor adjustment.
- --------------------------------------------------------------------------------
Income taxes, tax penalties and certain restrictions may apply to any withdrawal
you make.
- --------------------------------------------------------------------------------
18 Contract Value
<PAGE>
Expenses
There are charges and other expenses associated with the contracts
that reduce the return on your investment in the contract. These
charges and expenses are:
Insurance Charges
Each business day we deduct our insurance charges from the assets of the
separate account. We do this as part of our calculation of the value of the
accumulation units and the annuity units. The insurance charge has two parts:
(1) the mortality and expense risk charge and (2) the administrative expense
charge.
Mortality and Expense Risk Charge
This charge is equal, on an annual basis, to 1.07% of the daily value of the
assets invested in each fund, after fund expenses are deducted. This charge is
for:
. the mortality risk associated with the insurance benefits provided,
including our obligation to make annuity payments after the annuity
date regardless of how long all annuitants live, the death benefits,
and the guarantee of rates used to determine your annuity payments
during the income phase;
. the expense risk that the current charges will be insufficient to
cover the actual cost of administering the contract.
We reserve the right to increase the mortality and expense risk charge. We will
not increase it above 1.25%. If the mortality and expense risk charge is not
sufficient, then we will bear the loss. However, we do expect to profit from
this charge.
Administrative Expense Charge
This charge is equal, on an annual basis, to 0.07% of the daily value of the
contracts invested in each fund, after fund expenses are deducted. We assess
this charge, together with the annual contract maintenance fee, to reimburse us
for all the expenses associated with the administration of the contract and the
separate account. Some of these expenses are: preparation of the contract,
confirmations, annual reports and statements, maintenance of contract records,
personnel costs, legal and accounting fees, filing fees, and computer and
systems costs. We can increase this charge, but the combined total of the
administrative expense charge and the mortality and expense risk charge will
never exceed 1.50%.
Contract Maintenance Fee
We deduct $30 from your contract as a contract maintenance fee on the last day
of each contract year during the accumulation phase and, if you fully withdraw
your contract value, on that withdrawal date. We may increase this charge, but
it will not exceed $60 per year. Subject to state regulations, we will deduct
the annual contract maintenance fee proportionately from the investment choices
you have elected. For contracts issued to Pennsylvania residents, we will
calculate this fee as a pro rata portion of the balance in each fund.
We will not deduct the contract maintenance fee after your contract begins the
income phase. We do not expect to profit from this fee.
Surrender Charge
We do not deduct a sales charge when we receive a purchase payment. However, if
you withdraw all of or any part of the contract value during the first 5
contract years, we may assess a surrender charge on the amount you withdraw that
exceeds the free withdrawal amount. The surrender charge is 5% of the amount
withdrawn. We use this charge to cover certain expenses relating to the sale of
the contract. We will deduct any surrender charge as of the business day we
receive your written request.
If you withdraw:
. from more than one investment choice, we will deduct the surrender charge
proportionately from the amounts remaining in the investment choice(s) you
elected.
Expenses 19
<PAGE>
. the total value from an investment choice, we will deduct the surrender
charge proportionately from amounts remaining in the investment choices
that still have value.
. your entire contract value, we will deduct the surrender from the contract
value. You will receive a check for the net amount.
In addition to the free withdrawals described later in this section, we will not
impose a surrender charge under the following circumstances:
. If you cancel the contract during the 15 day free look period.
. If you withdraw the entire contract value on the annuity income date.
. If you take a partial or full withdrawal during the window period or after
the first 5 contract years.
. If we pay a death benefit.
. If you redeem "excess contributions" to a plan qualifying for special
income tax treatment. These types of plans are referred to as Qualified
Plans, including Individual Retirement Annuities (IRAs) and Tax Sheltered
Annuities (TSAs). We look to the Internal Revenue Code for the definition
and description of excess contributions.
. If you surrender your contract before April 30, 2000, and the proceeds of
the surrender are used to purchase a new group annuity issued by
MassMutual. The group annuity may be subject to charges upon surrender.
. If you fully surrender a Panorama variable annuity contract that is past
its surrender charge period and exchange it for a Panorama Plus contract.
Owners of certain Panorama Plus IRAs or non-qualified Panorama Plus variable
annuity contracts that are beyond the surrender charge period may exchange these
contracts for a Panorama Premier contract. If you exchange an eligible Panorama
Plus contract for a Panorama Premier contract, we will not assess a surrender
charge on your Panorama Plus contract value and we will not apply an interest
rate factor adjustment to your Panorama Plus contract value in the general
account. However, any additional payments that you make to the Panorama Premier
contract will be subject to a contingent deferred sales charge under the
Panorama Premier contract.
Exchange programs may not be available in all states. Check with your agent. We
have the right to terminate these exchange programs at any time. If you want
more information about the exchange programs, contact your agent or us at our
Annuity Service Center.
C.M. Life guarantees that the aggregate surrender charge will never exceed 8.5%
of the total purchase payments made. Further information about how the surrender
charge is calculated can be found in the Statement of Additional Information.
Free Withdrawals
Beginning in the second contract year, you may withdraw an amount without
incurring a surrender charge or an interest rate factor adjustment. The maximum
you may withdraw without penalty is 10% of your contract value as of the end of
the previous contract year. You may take this 10% in multiple withdrawals each
contract year.
Window Period
The window period is the last 30 days of each 5-year period during which you
have contract value in the general account. During this window period, you may
surrender or transfer to any fund, part or all of your contract value in the
general account without incurring a surrender charge or an interest rate factor
adjustment. During the window period you may also surrender all or part of your
contract value in the separate account without incurring a surrender charge.
Interest Rate Factor Adjustment
Except during the window period, we will apply an interest rate factor
adjustment:
. to any amount that you partially or fully withdraw from the general account
during the accumulation phase, or
. to any amount from the general account that you apply to a variable annuity
option at the beginning of the income phase.
20 Expenses
<PAGE>
We base the interest rate factor adjustment on the interest rates payable on
U.S. Treasury securities. This means that generally, if rates on U.S. Treasury
securities are higher when you withdraw than when you made the payment, a
negative adjustment will be applied to the amount you withdraw. This could
result in your receiving an amount lower than the amount of your purchase
payment(s). If rates on U.S. Treasury securities are lower when you withdraw
than when you made the payment, a positive adjustment will be applied to the
amount you withdraw. This could result in your receiving an amount higher than
the amount of your purchase payment(s).
We do not apply the interest rate factor adjustment during the window period or
to free withdrawal amounts. Also, we do not apply the interest rate factor
adjustment to contracts we issue to Pennsylvania residents.
Further information about the interest rate factor adjustment can be found in
the Statement of Additional Information and the attached prospectus for the
fixed account with interest rate factor adjustment.
Premium Taxes
Some states and other governmental entities charge premium taxes or similar
taxes. We are responsible for the payment of these taxes and will make a
deduction from your contract value for them. Some of these taxes are due when
your contract is issued, others are due when annuity payments begin. Currently
we do not charge you for these taxes until you begin receiving annuity payments
or when you fully withdraw your contract value. Premium taxes generally range
from 0% to 3.5%, depending on the state.
Transfer Fee
We currently do not impose a fee on transfers during the accumulation phase or
the income phase.
Income Taxes
We will deduct from the contract any income taxes that we incur because of the
operation of the separate account. At the present time, we are not making any
such deductions. We will deduct any withholding taxes required by law.
Fund Expenses
There are deductions from and expenses paid out of the assets of the various
funds, which are described in the attached fund prospectuses. We may enter into
certain arrangements under which we are reimbursed by the funds' advisors,
distributors and/or affiliates for the administrative service that we provide.
Expenses 21
<PAGE>
The Income Phase
If you want to receive regular income from your annuity, you can choose to
receive fixed and/or variable annuity payments under one of several options. You
can choose the month and year in which those payments begin. We call that date
the annuity income date. Your annuity income date cannot be earlier than 5 years
after you buy the contract.
You choose your annuity income date and annuity option when you purchase your
contract. You can change either at any time before the annuity income date
provided you give us 30 days written notice. If you do not choose an annuity
option, we will assume that you elected Annuity Option B with 10 years of
payments guaranteed.
The latest annuity income date that you may elect is the annuitant's 90th
birthday. Unless you indicate otherwise, we will make annuity payments to the
annuitant. After the annuitant dies, we will make any remaining guaranteed
annuity payments to the beneficiary.
We make annuity payments based on the age and sex of the annuitant under all
options except Option E. We may require proof of age and sex before annuity
payments begin.
At the annuity income date, you have the same fund choices that you had in the
accumulation phase. You can choose whether payments will be fixed, variable, or
a combination of both. If you elect a combination of both, you must indicate
which part of your contract value we should apply to the fixed and variable
payment options. If you do not tell us otherwise, we will base your annuity
payments on the investment allocations that are in place on the annuity date.
Therefore, any amounts in the funds will be applied to a variable payout and any
amounts in the general account will be applied to a fixed payout.
If your contract value is less than $2,000 on the annuity date, we reserve the
right to pay you a lump sum rather than a series of annuity payments. If any
annuity payment is less than $100, we reserve the right to change the payment
basis to equivalent less frequent payments.
In order to avoid adverse tax consequences, you should begin to take
distributions at least equal to the minimum amount required by the IRS, no later
than the required beginning date. If your contract is an IRA, that date should
be the date you reach 70 1/2. For qualified plans and TSAs, that date is the
later of your retirement or when you reach age 70 1/2.
Fixed Annuity Payments
If you choose fixed payments, the payment amount will not vary. The payment
amount will depend upon the following 4 things:
. The value of your contract on the annuity date;
. The deduction of premium taxes, if applicable;
. The annuity option you select; and
. The age and sex of the annuitant (and joint annuitant if a joint payment
option is elected).
Variable Annuity Payments
If you choose variable payments, the payment amount will vary with the
investment performance of the funds. The first payment amount will depend on the
following 6 things:
. The value of your contract on the annuity date;
. The deduction of premium taxes, if applicable;
. The application of an interest rate factor adjustment, if applicable;
. The annuity option you select;
. The age and sex of the annuitant (and joint annuitant if a joint payment
option is elected); and
. An assumed investment rate (AIR) of 4% per year.
22 The Income Phase
<PAGE>
If you elect to have your contract value in the general account applied to a
variable annuity, your first variable annuity payment amount will also reflect
the interest rate factor adjustment.
Future variable payments will depend on the performance of the funds you
elected. If the actual performance exceeds the 4% assumed investment rate plus
the deductions for expenses, your annuity payments will increase. Similarly, if
the actual rate is less than 4% plus the amount of the deductions, your annuity
payments will decrease.
Annuity Unit Value
In order to keep track of the value of your variable annuity payment, we use a
unit of measure called an annuity unit. We calculate the number of your annuity
units at the beginning of the income phase. During the income phase, the number
of annuity units will not change. However, the value of your annuity units will
change to reflect the investment performance of the funds you elected. The
Statement of Additional Information contains more information on how annuity
payments and annuity unit values are calculated.
Annuity Options
The following annuity options are available. After annuity payments begin, you
cannot change the annuity option or the frequency of annuity payments. In
addition, during the income phase we do not allow withdrawals.
Annuity Option A - Life Income. Under this option we make fixed and/or variable
periodic payments as long as the annuitant is alive. After the annuitant dies we
stop making payments.
Annuity Option B - Life Income with Period Certain. We will make fixed and/or
variable periodic payments for a guaranteed period, or as long as the annuitant
lives, whichever is longer. The guaranteed period may be 5, 10 or 20 years. At
the time the annuitant elects the annuity payment option, he/she may give the
beneficiary the right to elect a lump sum payment equal to the present value of
the remaining guaranteed annuity payments.
Annuity Option C - Joint and Last Survivor Payments. We will make fixed and/or
variable periodic payments during the joint lifetime of 2 annuitants. When one
dies, we will continue making these payments as if both annuitants were alive.
We will not make payments after both annuitants have died.
Annuity Option D - Joint and 2/3 Survivor Annuity. We will make fixed and/or
variable periodic payments during the joint lifetime of 2 annuitants. We will
continue making payments during the lifetime of the surviving annuitant. We will
compute these payments for the surviving annuitant on the basis of two-thirds of
the annuity payment (or units) in effect during the joint lifetime. We will not
make payments after both annuitants have died.
Annuity Option E - Period Certain. (not available as a variable income option)
We will make periodic payments of a fixed amount for a specified period. The
specified period must be at least 5 years and cannot be more than 30 years. In
most states, if you do not want payments to continue for the remainder of the
specified period, you may elect to have an amount equal to the present value of
the remaining guaranteed annuity payments paid as a lump sum or applied to
another annuity option.
Annuity Option F - Special Income Settlement Agreement. We will pay you in
accordance with terms agreed upon in writing by both you and us.
The Income Phase 23
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Death Benefit
Death Benefit During The Accumulation Phase
If you or the annuitant die before the annuity income date, we will pay a death
benefit to your beneficiary once we receive due proof of death and the contract
at our Annuity Service Center. However, if the annuitant dies before you and
there is a contingent annuitant who is less than 85 years old on the annuitant's
date of death, we will not pay any death benefit. The contract will continue in
force with the contingent annuitant as the annuitant.
We determine the amount of death benefit payable at the time of payment. If the
deceased was less than age 75 at the time of death, we will pay the greater of:
. the contract value, or
. the total purchase payments, less any withdrawals and charges.
Otherwise, we will base payments on the contract value at the time of payment.
We will not apply a surrender charge, interest rate factor adjustment or
contract maintenance fee to any death benefit payment.
The death benefit options that are available depend on whether you and the
annuitant are the same person.
Death Of Contract Owner
If you and the annuitant are not the same person and you die before the
annuitant and before the annuity income date, one of the following scenarios
applies:
1. If your spouse is the beneficiary and survives you, he/she may elect only
death benefit option A, B or C within 1 year after your death. If your
spouse does not make a election within 1 year of your death, your spouse
will become the contract owner.
2. If the beneficiary is a natural person and not your spouse, the beneficiary
may elect only death benefit option B or C within 1 year after your death.
If the beneficiary does not make a election within 1 year of your death, we
will pay the beneficiary in a single sum at that time.
3. If the beneficiary is not a natural person, it may elect only death benefit
option B or D within 1 year after your death.
4. If no beneficiary survives you, we will declare the annuitant the
beneficiary and scenario 1 or 2 above will apply. If no election is made
within 1 year after your death, we will pay the death benefit in a single
sum at that time.
If you, the contract owner, and the annuitant are the same person, and you die
before the annuity income date, one of the following scenarios applies:
1. If your spouse is the beneficiary, he/she may elect only death benefit
option B, C or G within 1 year after your death. If your spouse does not
make a election within 1 year after your death, he/she will become the
contract owner and annuitant under the contract.
2. If the beneficiary is a natural person but not your spouse, the beneficiary
may elect only death benefit option B or C within 1 year after your death.
If the beneficiary does not make a election within 1 year after your death,
we will pay the death benefit to the beneficiary in a single sum at that
time.
3. If the beneficiary is not a natural person, it may elect only death benefit
option B or D within 1 year after your death. If the beneficiary does not
make a election within 1 year after your death, we will pay the death
benefit in a single lump sum at that time.
4. If no beneficiary survives you, we will pay the death benefit in a single
sum to your estate within 5 years after the date of your death. If your
estate does not make an election within 1 year after your death, we will
pay the death benefit in a single sum at that time.
24 Death Benefit
<PAGE>
Death Of Annuitant
If you and the annuitant are not the same person and:
. the annuitant dies before you, and
. the annuitant dies prior to the annuity income date, and
. there is no contingent annuitant younger than age 85, or
. if the contract owner is not a natural person,
one of the following scenarios applies:
1. The beneficiary, if a natural person, may only elect death benefit option E
or F within 1 year after the annuitant's death. If the beneficiary does not
make a election within 1 year after the annuitant's death we will pay the
death benefit to the beneficiary in a single sum at that time.
2. If the beneficiary is not a natural person, it may only elect death benefit
option D or E within 1 year after the annuitant's death. If the beneficiary
does not make a election within 1 year after the annuitant's death, we will
pay the death benefit in a single sum at that time.
3. If no beneficiary survives the annuitant, we will consider you the
beneficiary and preceding scenario 1 or 2 will apply.
Death Benefit Options
For purposes of these death benefit options, we determine life expectancy based
on the tables in the Regulations, under Section 72 of the Code. The following
death benefit options are available:
Option A - Become the contract owner;
Option B - Receive the death benefit as a single sum within 1 year after the
contract owner's death;
Option C - Receive the death benefit under any annuity option offered in the
contract, provided the entire death benefit is distributed:
1. within 5 years of the date of death; or
2. over a period not extending beyond the life expectancy of the beneficiary; or
3. over the life of the beneficiary.
If we are asked to pay the death benefit under Option C, scenario 2 or 3, we
will pay the first installment within 1 year after the contract owner's death.
Option D - Receive the death benefit under any annuity option offered in the
contract, provided the entire death benefit is distributed within 5 years of the
date of death;
Option E - Receive the death benefit as a single sum within 1 year after the
annuitant's death;
Option F - Receive the death benefit under any annuity option offered in the
contract, provided the death benefit is distributed:
1. over a period not extending beyond the life expectancy of the beneficiary;
or
2. over the life of the beneficiary.
We will pay the first installment within 1 year after the annuitant's death.
Option G - Become the contract owner and annuitant of the contract, just as if
the beneficiary had always been the contract owner and annuitant.
Death Of Annuitant On Or After The Annuity Income Date
If the annuitant dies on or after the annuity income date, any death benefit
depends on the annuity option in effect on the annuitant's date of death. We
will distribute any remaining payments at least as rapidly as under the method
of distribution being used as of the date of death.
If a beneficiary dies while receiving the benefits, we will pay any balance to
the beneficiary's estate in a lump sum. If no beneficiary survives the
annuitant, we will pay any benefits to the estate of the last annuitant to die
in a single sum.
Death Benefit 25
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Taxes
NOTE: We have prepared the following information on taxes as a general
discussion of the subject. It is not intended as tax advice to any individual.
You should consult your own tax adviser about your own circumstances. We have
included in the Statement of Additional Information an additional discussion
regarding taxes.
Annuity Contracts In General
Annuity contracts are a means of setting aside money for future needs - usually
retirement. Congress recognized how important saving for retirement was and
provided special rules in the Internal Revenue Code (Code) for annuities.
Simply stated, these rules provide that you will not be taxed on the earnings on
the money held in your annuity contract until you take the money out. This is
referred to as tax deferral. There are different rules as to how you are taxed
depending on how you take the money out and the type of contract - qualified or
non-qualified (see following sections).
You, as the owner of a non-qualified annuity, will generally not be taxed on
increases in the value of your contract until a distribution occurs -either as a
withdrawal or as annuity payments. When you make a withdrawal, you are taxed on
the amount of the withdrawal that is earnings. For annuity payments, different
rules apply. A portion of each annuity payment is treated as a partial return of
your purchase payments and is not taxed. The remaining portion of the annuity
payment is treated as ordinary income. How the annuity payment is divided
between taxable and non-taxable portions depends upon the period over which the
annuity payments are expected to be made. Annuity payments received after you
have recovered all of your purchase payments are fully includible in income.
When a non-qualified contract is owned by a non-natural person (e.g.,
corporation or certain other entities other than a trust holding the contract as
an agent for a natural person), the contract will generally not be treated as an
annuity for tax purposes.
Qualified And Non-Qualified Contracts
If you purchase the contract as an individual and not under any pension plan,
specially sponsored program or an individual retirement annuity, your contract
is referred to as a non-qualified contract.
If you purchase the contract under a pension plan, specially sponsored program,
or an individual retirement annuity, your contract is referred to as a qualified
contract. Examples of qualified plans are: deductible and non-deductible
Individual Retirement Annuities (IRAs), and pension and profit-sharing plans,
which include 401(k) plans and H.R. 10 plans, TSAs, etc.
This contract is not designed to be used in ERISA-covered plans. C.M. Life will
not sell this contract to qualified pension and profit sharing plans, SEPS,
Section 457 deferred compensation plans or ERISA-covered TSA programs. The term
"Qualified Plans" as used in this prospectus refers only to plans that have
certain tax advantages under the Internal Revenue Code and does not denote
ERISA-covered plans.
Withdrawals - Non-Qualified Contracts
The Code treats any withdrawals (1) allocable to purchase payments made after
August 13, 1982 in an annuity contract entered into prior to August 14, 1982 and
(2) from an annuity contract entered into after August 14, 1982, as first coming
from earnings and then from your purchase payments. The withdrawn earnings are
includible in income.
The Code also provides that any amount received under an annuity contract which
is included in income may be subject to a penalty. The amount of the penalty is
equal to 10% of the amount that is includible in income. Some withdrawals will
be exempt from the penalty. They include any amounts:
(1) paid on or after you reach age 59 1/2;
26 Taxes
<PAGE>
(2) paid to your beneficiary after you die;
(3) paid if you become totally disabled (as that term is defined in the Code);
(4) paid in a series of substantially equal payments made annually (or more
frequently) for life or your life expectancy or the joint life expectancies
of you and your designated beneficiary;
(5) paid under an immediate annuity; or
(6) which come from purchase payments made before August 14, 1982.
Withdrawals - Qualified Contracts
If you have no cost basis for your interest in a qualified contract, the full
amount of any distribution is taxable to you as ordinary income. If you do have
a cost basis for your interest, a portion of the distribution is taxable,
generally based on the ratio of your cost basis to your total contract value.
Special tax rules may be available for certain distributions from a qualified
contract.
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of
any distribution from qualified retirement plans, including contracts issued and
qualified under Code Sections 401 (Pension and Profit-Sharing Plans), 408
(Individual Retirement Annuities - IRAs), and 408A (Roth IRAs). Exceptions from
the penalty tax are as follows:
. distributions made on or after you reach age 59 1/2 ;
. distributions made after your death or disability (as defined in Code
Section 72(m)(7);
. after separation from service, distributions that are part of substantially
equal periodic payments made not less frequently than annually for your
life (or life expectancy) or the joint lives (or joint life expectancies)
of you and your designated beneficiary (in applying this exception to
distributions from IRAs, a separation from service is not required);
. distributions made after separation of service if you have reached age 55
(not applicable to distributions from IRAs);
. distributions made to you up to the amount allowable as a deduction to you
under Code Section 213 for amounts you paid during the taxable year for
medical care;
. distributions made to an alternate payee pursuant to a qualified domestic
relations order (not applicable to distributions from IRAs);
. distributions from an IRA for the purchase of medical insurance (as
described in Code Section 213(d)(1)(D)) for you and your spouse and
dependents if you received unemployment compensation for at least 12 weeks
and have not been re-employed for at least 60 days);
. distributions from an IRA to the extent they do not exceed your qualified
higher education expenses (as defined in Code Section 72(t)(7) for the
taxable year; and
. distributions from an IRA which are qualified first-time home buyer
distributions (as defined in Code Section 72(t)(8)).
Generally, distributions from a qualified plan must begin no later than April
1st of the calendar year following the later of (a) the year in which you attain
age 70 1/2 or (b) the calendar year in which you retire. The date set forth in
(b) does not apply to an IRA. Required distributions do not apply to a Roth IRA
during your lifetime. Required distributions must be over a period not exceeding
your life expectancy or the joint lives or joint life expectancies of you and
your designated beneficiary. If required minimum distributions are not made, a
50% penalty tax is imposed on the amount that should have been distributed.
Withdrawals - Tax-Sheltered Annuities
The Code limits the withdrawal of purchase payments made by owners through
salary reductions from certain Tax-Sheltered Annuities. Withdrawals of salary
reduction amounts and their earnings can only be made when an owner:
(1) reaches age 59 1/2 ;
Taxes 27
<PAGE>
(2) leaves his/her job;
(3) dies;
(4) becomes disabled, as that term is defined in the Code; or
(5) in the case of hardship.
In the case of hardship, the owner can only withdraw the purchase payments and
not any earnings.
Any contract value as of December 31, 1988 is not subject to these restrictions.
Additionally, return of "excess contributions" or amounts paid to a spouse as a
result of a qualified domestic relations order are not subject to these
restrictions.
Withdrawals - Texas Optional Retirement Program
No withdrawals may be made in connection with a contract issued pursuant to the
Texas Optional Retirement Program for faculty members of Texas public
institutions of high learning before you:
. terminated employment in all such institutions and repay employer
contributions if termination occurs during the first twelve months of
employment;
. retire;
. die; or
. attain age 70 1/2
28 Taxes
<PAGE>
Other Information
Terminal Illness Benefit
Before your 75th birthday, you may elect a Terminal Illness Benefit. This
benefit is not available in all states. We will require proof that you are
terminally ill and not expected to live more than 12 months. This proof will
include certification by a licensed medical practitioner performing within the
scope of his/her license. You, the annuitant or contingent annuitant may not be
the licensed medical practitioner, nor can the medical practitioner be the
parent, spouse or child of the contract owner, annuitant or contingent
annuitant. We may also impose additional requirements.
We will determine the amount of payment when we receive your written request.
The Terminal Illness Benefit is the greater of:
(1) your purchase payments, less any withdrawals and any applicable charges; or
(2) your contract value.
We will not apply a surrender charge, interest rate factor adjustment or
contract maintenance fee with respect to any Terminal Illness Benefit. Payment
of the Terminal Illness Benefit will terminate the contract.
Performance
We may advertise certain performance-related information. This information
reflects historical performance and is not intended to indicate or predict the
future performance.
Standardized Total Returns
We will show standardized average annual total returns for sub-accounts that
have been in existence for more than one year. These returns assume you made a
single $1,000 payment at the beginning of the period and withdrew the entire
amount at the end of the period. The return reflects a deduction for the
surrender charge, the contact maintenance fee and all other separate account and
contract level charges, except premium taxes, if any.
If a sub-account has been in existence for less than one year, we will show the
aggregate total return. This assumes you made a single $1,000 payment at the
beginning of the period and withdrew the entire amount at the end of the period.
The return reflects the change in unit value and a deduction of the surrender
charge.
Nonstandard Total Returns
We will also show total returns based on historical performance of the
sub-accounts and underlying funds. We may assume the contracts were in existence
prior to their inception date, May 13, 1992, which they were not. Total return
percentages include all fund level and separate account level charges. They do
not include a surrender charge, contract maintenance fee, or premium taxes, if
any. If these charges were included, returns would be less than those shown.
Total Returns compare the value of an accumulation unit at the beginning of a
period with the value of an accumulation unit at the end of the period.
Average Annual Total Returns measure this performance over a period of time
greater than one year. Average annual total returns compare values over a given
period of time and express the percentage as an average annual rate.
Yield and Effective Yield
We may also show yield and effective yield for the Oppenheimer Money Fund/VA
over a seven-day period, which we then "annualize". This means that when we
calculate yield, we assume that the amount of money the investment earns for the
week is earned each week over a 52-week period. We show this as a percentage of
the investment. We calculate the "effective yield" similarly, but when we
annualize the amount, we assume the income earned is reinvested. Therefore, the
effective yield is slightly higher than the yield because of the compounding
effect.
Other Information 29
<PAGE>
Related Performance
Some of the funds available to you may be similar to mutual funds offered in the
retail marketplace. These funds generally have the same investment objectives,
policies and portfolio managers as the retail mutual funds and usually were
formed after the retail mutual funds. While these funds generally have identical
investment objectives, policies and portfolio managers, they are separate and
distinct from retail mutual funds. In fact, performance of these funds may be
dramatically different from the performance of the retail mutual funds. This is
due to differences in the funds' sizes, dates shares of stocks are purchased and
sold, cash flows and expenses. You should remember that retail mutual fund
performance is not the performance of the funds available in this contract and
is not an indication of future performance of these funds.
Year 2000
Like other businesses and governments around the world, we could be adversely
affected if the computer systems used by us and those with which we do business
do not properly recognize the year 2000. This is commonly known as the "Year
2000 issue".
In 1996, our parent company, MassMutual, began an enterprise-wide process of
identifying, evaluating and implementing changes to computer systems and
applications software to address the Year 2000 issue on its own behalf and on
behalf of certain subsidiaries, including us. MassMutual is addressing the Year
2000 issue internally with modifications to existing programs and conversions to
new programs. MassMutual is also seeking assurances from vendors, customers,
service providers, governments and others with which we and MassMutual conduct
business, to determine their year 2000 readiness.
MassMutual has allocated a portion of the costs related to the year 2000 issue
to us. The costs are currently being expensed, and when measured against net
gain from operations before dividends, are not material to us.
Distributors
MML Distributors, LLC (MML Distributors) serves as principal underwriter for the
contracts.
MML Investors Services, Inc. (MMLISI) serves as co-underwriter for the
contracts. Their purpose as underwriters is to distribute the contracts. MML
Distributors and MMLISI are wholly-owned subsidiaries of MassMutual. Both are
located at 1414 Main Street, Springfield, Massachusetts 01144-1013.
We will pay commissions to broker-dealers who sell the contracts. Commissions
are a combination percentage of purchase payments and contract value. Currently,
we pay an amount up to 4.5% of purchase payments. In addition, we pay a maximum
commission of .50% of contract values each contract year.
From time-to-time, MML Distributors may enter into special arrangements with
certain broker-dealers. These special arrangements may provide for the payment
of higher compensation to such broker-dealers for selling the contracts.
Electronic Transmission Of Application Information
Upon agreement with a limited number of broker-dealers, we will accept
electronic data transmissions of application information. Our Annuity Service
Center will accept this information at the time that the initial purchase
payment is transmitted by wire. Please contact your representative for more
information.
Assignment
You can assign the contract at any time during your lifetime. We will not be
bound by the assignment until we receive written notice of the assignment. We
will not be liable for any payment or other action we take in accordance with
the contract before we receive notice of the assignment. You may be subject to
tax consequences if you assign your contract.
If you assign your contract, your rights may only be exercised with the consent
of the assignee of record. We require consent of any irrevocable beneficiary
before we assign proceeds.
30 Other Information
<PAGE>
Misstatement Of Age Or Sex
If the annuitant's age or sex has been stated incorrectly, the annuity payment
we will make is what is appropriate for the correct age and sex. After we
correct the mistake, the annuitant will receive the sum of any underpayments
within 30 calendar days. If we have made any overpayments, we will subtract the
amount of the overpayments from the annuity payments(s) we make following the
correction.
Voting Rights
We are the legal owner of the fund shares. However, when a fund solicits proxies
in conjunction with a vote of shareholders, it is required to obtain from you
and other owners, instructions as to how to vote those shares. When we receive
those instructions, we will vote all of the shares, for which we have not
received voting instructions, in proportion to those instructions. This will
also include any shares that we own on our own behalf. If we determine that we
are no longer required to comply with the above, we will vote the shares in our
own right.
During the accumulation phase of your contract and while the annuitant is
living, we determine the number of shares you may vote by dividing your contract
value in each fund, if any, by $100. Fractional shares are counted. During the
income phase or after the annuitant dies, we determine the number of shares you
may vote based on our liability for future variable monthly annuity payments.
Reservation Of Rights
We reserve the right to:
. substitute another fund for one of the funds you have elected, and
. add or eliminate sub-accounts.
If we do so, we will receive prior approval from the Securities and Exchange
Commission, if necessary. We will give you notice of our intent to exercise one
of these rights.
Suspension Of Payments Or Transfers
We may be required to suspend or postpone payments for withdrawals or transfers
from the funds for any period when:
. the New York Stock Exchange is closed (other than customary weekend and
holiday closings); or trading on the New York Stock Exchange is restricted;
. an emergency exists as a result of which disposal of shares of the funds is
not reasonably practicable or we cannot reasonably value the shares of the
funds;
. during any other period when the Securities and Exchange Commission, by
order, so permits for your protection.
We reserve the right to defer payment for a withdrawal from the general account
for the period permitted by law but not for more than six months.
Legal Proceedings
We are currently not involved in any legal proceedings that might adversely
impact the contracts.
Financial Statements
We have included our financial statements and those of the separate account in
the Statement of Additional Information.
Other Information 31
<PAGE>
Additional Information
For further information about the contract, you may obtain a Statement of
Additional Information. You can call the telephone number indicated on the cover
page or you can write to us. For your convenience we have included a form for
that purpose.
The Table of Contents of this statement is as follows:
1. C. M. Life Insurance Company
2. The Separate Account
3. Accumulation Unit Values
4. Annuity Units and Unit Values
5. Income Phase Transfer Formulas
6. Surrender Charge Calculation
7. Interest Rate Factor Adjustment
Calculation
8. Records, Reports and Services
9. Performance Measures
10. Distribution
11. Purchase of Securities Being Offered
12. Federal Tax Matters
13. Experts
14. Financial Statements
32 Other Information
<PAGE>
To: C.M. Life Insurance Company
Annuity Products, W562
P.O. Box 9067
Springfield, Massachusetts 01102-9067
Please send me a Statement of Additional Information for C.M. Life's Panorama
Plus.
Name ______________________________________
Address ______________________________________
______________________________________
City _________________ State_______Zip _______
Telephone ______________________________________
33
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34
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Appendix A
Panorama Plus Separate Account Condensed Financial Information
The following schedules include accumulation unit values for the periods
indicated. We have extracted this data from the separate account's audited
financial statements. You should read this information in conjunction with the
separate account's audited financial statements and related notes that are
included in the Statement of Additional Information.
<TABLE>
<CAPTION>
Accumulation Unit Values
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
Sub-Account 1992(a) 1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market $1.000000 $1.012022 $1.027456 $1.054570 $1.100599 $1.147312 $1.194713 $1.243348
Government Securities 1.000000 1.061901 1.158653 1.095471 1.281804 1.293638 1.391852 1.488104
Income 1.000000 1.060916 1.174260 1.114759 1.306525 1.318102 1.423761 1.503383
Total Return 1.000000 1.058946 1.217379 1.186187 1.460595 1.586635 1.863659 2.043296
Growth 1.000000 1.064372 1.276534 1.258146 1.711382 2.014864 2.517282 2.698453
International
Growth(b) 1.000000 0.950887 1.146031 1.145014 1.251930 1.400836 1.497222 1.767452
</TABLE>
<TABLE>
<CAPTION>
Accumulation Units Outstanding
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1992 1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Money Market 681,553 3,136,932 13,603,045 16,949,501 13,507,122 12,091,336 14,186,953
Government Securities 8,444,505 11,994,574 13,726,057 12,647,811 12,647,811 11,672,397 11,323,817
Income 2,564,029 12,281,025 16,488,930 20,617,764 22,192,539 21,424,948 22,174,564
Total Return 12,316,597 71,182,538 147,324,713 194,679,349 224,734,224 224,379,585 209,536,235
Growth 2,798,378 19,370,204 49,636,052 83,371,008 111,846,534 128,553,850 128,161,817
International 742,623 5,578,969 22,419,639 31,322,974 40,507,658 44,128,995 41,761,023
Growth(b)
</TABLE>
(a) Commencement of operations for the Sub-Accounts was May 13, 1992.
(b) Prior to October 1, 1999, this Sub-Account was called the International
Equity Sub-Account.
Prior to December 1, 1996, the Combined Financial Information reflected the
Money Market and Income Sub-Accounts investment in the Money Market and Income
Portfolios of Panorama Fund, respectively. On December 1, 1996, we substituted
shares of the Oppenheimer Money Fund/VA and the Oppenheimer Bond Fund/VA for
shares of Panorama Fund's Money Market and Income Portfolios, respectively.
Therefore, effective December 1, 1996, the Condensed Financial Information
reflects the Money Market and Income Sub-Accounts' investment in the Oppenheimer
Money Fund/VA and the Oppenheimer Bond Fund/VA, respectively.
Appendix A A-1
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