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PEOPLES BENEFIT LIFE INSURANCE COMPANY
SEPARATE ACCOUNT V
STATEMENT OF ADDITIONAL INFORMATION
for the
ADVISOR'S EDGE VARIABLE ANNUITY
Offered by
Peoples Benefit Life Insurance Company
(A Missouri Stock Company)
Administrative Offices
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
This Statement of Additional Information expands upon subjects discussed in the
current Prospectus for the Advisor's Edge variable annuity contract (the
"Contract") offered by Peoples Benefit Life Insurance Company ("the Company" or
"Peoples Benefit"). You may obtain a copy of the Prospectus dated May 1, 1999,
by calling 800-866-6007 or by writing to our Administrative Offices at 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499. Terms used in the current
Prospectus for the Contract are incorporated in this Statement of Additional
Information.
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.
May 1, 1999: Revised August 3, 1999
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TABLE OF CONTENTS
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PAGE
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THE CONTRACT................................................................. 1
Computation of Variable Annuity Income Payments............................ 1
Exchanges.................................................................. 1
Exceptions to Charges and to Transactions or Balance Requirements.......... 2
403(b) Contracts........................................................... 2
GENERAL MATTERS.............................................................. 4
Non-Participating.......................................................... 4
Misstatement of Age or Sex................................................. 4
Assignment................................................................. 4
Annuity Data............................................................... 4
Annual Statement........................................................... 4
Incontestability........................................................... 4
Ownership.................................................................. 5
PERFORMANCE INFORMATION...................................................... 5
Money Market Subaccount Yields............................................. 6
30-Day Yield for Non-Money Market Subaccounts.............................. 6
Standardized Average Annual Total Return for Subaccounts................... 6
ADDITIONAL PERFORMANCE MEASURES.............................................. 8
Non-Standardized Cumulative Total Return and Non-Standardized Average
Annual Total Return...................................................... 8
Non-Standardized Total Return Year-to-Date................................. 9
Non-Standardized One Year Return........................................... 10
Non-Standardized Adjusted Historical Cumulative Return and Non-Standardized
Adjusted Historical Average Annual Total Return.......................... 11
Individualized Computer Generated Illustrations............................ 22
PERFORMANCE COMPARISONS...................................................... 22
SAFEKEEPING OF ACCOUNT ASSETS................................................ 24
CONFLICTS OF INTEREST WITH OTHER SEPARATE ACCOUNTS........................... 24
PEOPLES BENEFIT.............................................................. 25
TAXES........................................................................ 25
STATE REGULATION OF PEOPLES BENEFIT.......................................... 25
RECORDS AND REPORTS.......................................................... 26
DISTRIBUTION OF THE CONTRACTS................................................ 26
LEGAL PROCEEDINGS............................................................ 26
OTHER INFORMATION............................................................ 26
FINANCIAL STATEMENTS......................................................... 26
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THE CONTRACT
In order to supplement the description in the Prospectus and Appendixes A and B
thereto, the following provides additional information about the Contract which
may be of interest to Contract Owners.
COMPUTATION OF VARIABLE ANNUITY INCOME PAYMENTS
The amounts shown in the Annuity Tables contained in your Contract represent the
guaranteed minimum for each Annuity Payment under a Fixed Payment Option.
Variable annuity income payments are computed as follows. First, the Accumulated
Value (or the portion of the Accumulated Value used to provide variable
payments) is applied under the Annuity Tables contained in your Contract
corresponding to the Annuity Payment Option elected by the Contract Owner and
based on an assumed interest rate of 4%. This will produce a dollar amount which
is the first monthly payment.
The amount of each Annuity Payment after the first is determined by means of
Annuity Units. The number of Annuity Units is determined by dividing the first
Annuity Payment by the Annuity Unit Value for the selected Subaccount ten
Business Days prior to the Annuity Date. The number of Annuity Units for the
Subaccount then remains fixed, unless an Exchange of Annuity Units (as set forth
below) is made. After the first Annuity Payment, the dollar amount of each
subsequent Annuity Payment is equal to the number of Annuity Units multiplied by
the Annuity Unit Value for the Subaccount ten Business Days before the due date
of the Annuity Payment.
The Annuity Unit Value for each Subaccount was initially established at $10.00
on the date money was first deposited in that Subaccount. The Annuity Unit Value
for any subsequent Business Day is equal to (a) times (b) times (c), where
(a) = the Annuity Unit Value for the immediately preceding Business Day;
(b) = the Net Investment Factor for the day;
(c) = the investment result adjustment factor (.99989255 per day), which
recognizes an assumed interest rate of 4% per year used in
determining the Annuity Payment amounts.
The Net Investment Factor is a factor applied to a Subaccount that reflects
daily changes in the value of the Subaccount due to:
(a) = any increase or decrease in the value of the Subaccount due to
investment results;
(b) = a daily charge assessed at an annual rate of 1.25% for the
mortality and expense risks assumed by Peoples Benefit;
(c) = a daily charge for the cost of administering the Contract
corresponding to an annual charge of .15% of the value of the
Subaccount plus the Annual Contract Fee.
The Annuity Tables contained in the Contract are based on the 1983 Table "A"
Mortality Table projected for mortality improvement to the year 2000 using
Projection Scale G and an interest rate of 4% a year; except that in
Massachusetts and Montana, the Annuity Tables contained in the Contract are
based on a 60% female/40% male blending of the above for all annuitants of
either gender.
EXCHANGES
After the Annuity Date you may, by making a written request, exchange the
current value of an existing Subaccount to Annuity Units of any other
Subaccount(s) then available. The written request for an Exchange must be
received by us, however, at least 10 Business Days prior to the first payment
date on which the Exchange is to take effect. An Exchange shall result in the
same dollar amount as that of the Annuity Payment on the date of Exchange (the
"Exchange Date"). Each year you may make an unlimited number of free Exchanges
between Subaccounts. We reserve the right to charge a $15 fee in the future for
Exchanges in excess of twelve per Contract Year.
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Exchanges will be made using the Annuity Unit Value for the Subaccounts on the
date the written request for Exchange is received. On the Exchange Date, Peoples
Benefit will establish a value for the current Subaccounts by multiplying the
Annuity Unit Value by the number of Annuity Units in the existing Subaccounts
and compute the number of Annuity Units for the new Subaccounts by dividing the
Annuity Unit Value of the new Subaccounts into the value previously calculated
for the existing Subaccounts.
EXCEPTIONS TO CHARGES AND TO TRANSACTION OR BALANCE REQUIREMENTS
In addition to the Purchase Payment breakpoints discussed in the applicable
prospectus, Peoples Benefit may impose reduced sales loads, administrative
charges or other deductions from Purchase Payments in certain situations where
Peoples Benefit expects to realize significant economies of scale or other
economic benefits with respect to the sales of Contracts. This is possible
because sales costs do not increase in proportion to the dollar amount of the
Contracts sold. For example, the per-dollar transaction cost for a sale of a
Contract equal to $5,000 is generally much higher than the per-dollar cost for a
sale of a Contract equal to $1,000,000. As a result, any applicable sales charge
declines as a percentage of the dollar amount of Contracts sold as the dollar
amount increases.
Peoples Benefit may also impose reduced sales loads and reduced administrative
charges and fees on sales to directors, officers and bona fide full-time
employees (and their spouses and minor children) of Peoples Benefit, its
ultimate parent company, and certain of their affiliates and certain sales
representatives for the Contract. Peoples Benefit may also grant waivers or
modifications of certain minimum or maximum purchase and transaction amounts or
balance requirements in these circumstances.
Notwithstanding the above, any variations in the sales loads, administrative
charges or other deductions from Purchase Payments or in the minimum or maximum
transaction or balance requirements shall reflect differences in costs or
services and shall not be unfairly discriminatory against any person.
403(b) CONTRACTS
Contracts will be offered in connection with retirement plans adopted by public
school systems and certain tax-exempt organizations (Code Section 501(c)(3)
organizations) for their employees under Section 403(b) of the Code; except, as
discussed below and subject to any conditions in an employer's plan, a Contract
used in connection with a Section 403(b) Plan offers the same benefits and is
subject to the same charges described in the Prospectus.
The Code imposes a maximum limit on annual Purchase Payments which may be
excluded from your gross income. Such limit must be calculated in accordance
with Sections 403(b), 415 and 402(g) of the Code. In addition, Purchase
Payments will be excluded from your gross income only if the 403(b) Plan meets
certain Code non-discrimination requirements.
Under your 403(b) Contract, you may borrow against your Contract's Surrender
Value after the first Contract Year. No additional loans will be extended until
prior loan balances are paid in full. The loan amount must be at least $1,000
and your Contract must have a minimum vested Accumulated Value of $2,000. The
loan amount may not exceed the lesser of (a) or (b), where (a) is 50% of the
Contract's vested Accumulated Value on the date on which the loan is made, and
(b) is $50,000 reduced by the excess, if any, of the highest outstanding balance
of loans during the one-year period ending on the day before the current loan is
made over the outstanding balance of loans on the date of the current loan. If
you are married, your spouse must consent in writing to a loan request. This
consent must be given within the 90-day period before the loan is to be made.
On the first Business Day of each calendar month, Peoples Benefit will determine
a loan interest rate. The loan interest rate for the calendar month in which
the loan is effective will apply for one year from the loan effective date.
Annually on the anniversary of the loan effective date, the rate will be
adjusted to equal the loan interest rate determined for the month in which the
loan anniversary occurs.
Principal and interest on loans must be repaid in substantially level payments,
not less frequently than quarterly, over a five year term except for certain
loans for the purchase of a principal residence. If the loan interest rate is
adjusted, future payments will be adjusted so that the outstanding loan balance
is amortized in equal quarterly installments over
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the remaining term. A $40 processing fees is charged for each loan. The
remainder of each repayment will be credited to the individual account.
If a loan payment is not made when due, interest will continue to accrue. The
defaulted payment plus accrued interest will be deducted from any future
distributions under the Contract and paid to us. Any loan payment which is not
made when due, plus interest, will be treated as a distribution, as permitted by
law. The loan payment may be taxable to the borrower, and may be subject to the
early withdrawal tax penalty. When a loan is made, unless instructed to the
contrary by the Annuitant, the number of Accumulation Units equal to the loan
amount will be withdrawn from the individual account and placed in the
Collateral Fixed Account. Accumulation Units taken from the individual account
to provide a loan do not participate in the investment experience of the related
Portfolios or the guarantees of the General Account Guaranteed Options. The
loan amount will be withdrawn on a pro rata basis first from the Portfolios to
which Accumulated Value has been allocated, and if that amount is insufficient,
collateral will then be transferred from the General Account Guaranteed Options
- - except the Guaranteed Equity Option. As with any withdrawal, Market Value
Adjustments or other deductions applicable to amounts allocated to General
Account Guaranteed Options may be applied and no amounts may be withdrawn from
the Guaranteed Equity Option. Until the loan is repaid in full, that portion of
the Collateral Fixed Account shall be credited with interest at a rate of 2%
less than the loan interest rate applicable to the loan - however, the interest
rate credited will never been less than the General Account Guaranteed Option's
guaranteed rate of 3%.
A bill in the amount of the quarterly principal and interest will be mailed
directly to you in advance of the payment due date. The initial quarterly
repayment will be due three months from the loan date. The loan date will be
the date that Peoples Benefit receives the loan request form in good order.
Payment is due within 30 calendar days after the due date. Subsequent quarterly
installments are based on the first due date.
When repayment of principal is made, Accumulation Units will be reallocated on a
current value basis among the same investment Portfolios and/or General Account
Guaranteed Options and in the same proportion as when the loan was initially
made, unless the Annuitant specifies otherwise. If a repayment in excess of a
billed amount is received, the excess will be applied towards the principal
portion of the outstanding loan. Payments received which are less than the
billed amount will not be accepted and will be returned to you.
If a partial surrender is taken from your individual account due to nonpayment
of a billed quarterly installment, the date of the surrender will be the first
business day following the 30 calendar day period in which the repayment was
due.
Prepayment of the entire loan is allowed. At the time of prepayment, Peoples
Benefit will bill you for any accrued interest. Peoples Benefit will consider
the loan paid when the loan balance and accrued interest are paid.
If the individual account is surrendered or if the Annuitant dies with an
outstanding loan balance, the outstanding loan balance and accrued interest will
be deducted from the Surrender Value or the Death Benefit, respectively. If the
individual account is surrendered, with an outstanding loan balance, due to the
Contract Owner's death or the election of an Annuity Payment Option, the
outstanding loan balance and accrued interest will be deducted.
Peoples Benefit may require that any outstanding loan be paid if the individual
account value falls below an amount equal to 25% of total loans outstanding.
The Code requires the aggregation of all loans made to an individual employee
under a single employer-sponsored 403(b) Plan. However, since Peoples Benefit
has no information concerning the outstanding loans that you may have with other
companies, it will only use the information available under the Contracts issued
by Peoples Benefit.
The Code imposes restrictions on full or partial surrenders from 403(b)
individual accounts attributable to Purchase Payments under a salary reduction
agreement and to any earnings on the entire 403(b) individual account credited
on and after January 1, 1989. Surrenders of these amounts are allowed only if
the Contract Owner (a) has died, (b) has become disabled, as defined in the
Code, (c) has attained age 59 1/2, or (d) has separated from service.
Surrenders are allowed if the Contract Owner can show "hardship" as defined by
the Internal Revenue Service, but the surrender is limited to the lesser of
Purchase Payments made on or after January 1, 1989 or the amount necessary to
relieve the hardship. Even if a surrender is permitted under these provisions,
a 10% federal tax penalty may be assessed on the withdrawn amount if it does not
otherwise meet the exceptions to the penalty tax provisions.
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Under the Code, you may request a full or partial surrender of an amount equal
to the individual account cash value as of December 31, 1988 (the
"grandfathered" amount), subject to the terms of the 403(b) Plan. Although the
Code surrender restrictions does not apply to this amount, a 10% federal penalty
tax may be assessed on the withdrawn amount if it does not otherwise meet the
exceptions to the penalty tax provisions.
Peoples Benefit believes that the Code surrender restrictions do not apply to
tax-free transfers pursuant to Revenue Ruling 90-24. Peoples Benefit further
believes that the surrender restrictions will not apply to any "grandfathered"
amount transferred pursuant to Revenue Ruling 90-24 into another 403(b)
Contract.
GENERAL MATTERS
NON-PARTICIPATING
The Contracts are non-participating. No dividends are payable and the Contracts
will not share in the profits or surplus earnings of Peoples Benefit.
MISSTATEMENT OF AGE OR SEX
Peoples Benefit may require proof of age and sex before making Annuity Payments.
If the Annuitant's stated age, sex or both in the Contract are incorrect,
Peoples Benefit will change the annuity benefits payable to those benefits which
the Purchase Payments would have purchased for the correct age and sex. In the
case of correction of the stated age and/or sex after payments have commenced,
Peoples Benefit will: (1) in the case of underpayment, pay the full amount due
with the next payment; and (2) in the case of overpayment, deduct the amount due
from one or more future payments.
ASSIGNMENT
Any Non-Qualified Contract may be assigned by you prior to the Annuity Date and
during the Annuitant's lifetime. Peoples Benefit is not responsible for the
validity of any assignment. No assignment will be recognized until Peoples
Benefit receives the appropriate Peoples Benefit form notifying Peoples Benefit
of such assignment. The interest of any beneficiary which the assignor has the
right to change shall be subordinate to the interest of an assignee. Any amount
paid to the assignee shall be paid in one sum notwithstanding any settlement
agreement in effect at the time assignment was executed. Peoples Benefit shall
not be liable as to any payment or other settlement made by Peoples Benefit
before receipt of the appropriate Peoples Benefit form.
ANNUITY DATA
Peoples Benefit will not be liable for obligations which depend on receiving
information from a Payee until such information is received in a form
satisfactory to Peoples Benefit.
ANNUAL STATEMENT
Once each Contract Year, Peoples Benefit will send you an annual statement of
the current Accumulated Value allocated to each Subaccount and any Purchase
Payments, charges, Exchanges or withdrawals during the year. This report will
also give you any other information required by law or regulation. You may ask
for an annual statement like this at any time. We will also send you quarterly
statements. However, we reserve the right to discontinue quarterly statements at
any time.
INCONTESTABILITY
This Contract is incontestable from the Contract Date, subject to the
"Misstatement of Age or Sex" provision.
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OWNERSHIP
The Contract Owner on the Contract Date is the Annuitant, unless otherwise
specified in the application. The Contract Owner may specify a new Contract
Owner by sending us the appropriate Peoples Benefit form at any time thereafter.
The term Contract Owner also includes any person named as a Joint Owner. A Joint
Owner shares ownership in all respects with the Contract Owner. During the
Annuitant's lifetime, all rights and privileges under this Contract may be
exercised solely by the Contract Owner. Upon the death of the Contract Owner,
ownership is retained by the surviving Joint Owner or passes to the Owner's
Designated Beneficiary, if one has been designated by the Contract Owner. If no
Owner's Designated Beneficiary has been selected or if no Owner's Designated
Beneficiary is living, then the Owner's Designated Beneficiary is the Contract
Owner's estate. From time to time Peoples Benefit may require proof that the
Contract Owner is still living.
PERFORMANCE INFORMATION
Performance information for the Subaccounts including the yield and effective
yield of the Federated Prime Money Subaccount, the yield of the remaining
Subaccounts, and the total return of all Subaccounts, may appear in reports or
promotional literature to current or prospective Contract Owners.
Where applicable in calculating performance information, the Annual Contract Fee
is reflected as a percentage equal to the estimated total amount of fees
collected during a calendar year divided by the estimated total average net
assets of the Portfolios during the same calendar year. The fee is assumed to
remain the same in each year of the applicable period. (With respect to partial
year periods, if any, the Annual Contract Fee is pro-rated to reflect only the
applicable portion of the partial year period.)
Until October 1995, the DFA Large Value Portfolio (formerly DFA Global Value
Portfolio) invested its assets in both U.S. and international securities.
Depending on the period presented, total return and performance information
presented for the DFA Large Value Portfolio may reflect the performance of the
Portfolio when it invested in the stocks of both U.S. and international
companies. Total return and performance information for the DFA Large Value
Portfolio which includes the period prior to October 1995 should not be
considered indicative of the Portfolio's future performance.
Where applicable, the following Subaccount inception dates are used in the
calculation of performance figures. 10/6/95 for the DFA Small Value and
International Small Value Portfolios; 1/18/95 for the DFA Large Value and DFA
Global Bond Portfolios; 10/3/95 for the DFA International; 10/9/95 for DFA
Short-Term Fixed Portfolios; 3/10/95 for the Federated American Leaders
Portfolio; 7/20/95 for the Federated Utility Portfolio; 12/7/94 for the
Federated Prime Money Portfolio; 6/28/95 for the Federated U.S. Government
Securities Portfolio; 9/18/95 for the Federated High Income Bond Portfolio;
2/12/96 for the Montgomery Growth Portfolio; 2/5/96 for the Montgomery Emerging
Markets Portfolio; 9/20/95 for the Wanger U.S. Small Cap Portfolio; 9/18/95 for
the Wanger International Small Cap Portfolio; 3/31/97 for Stein Roe Special
Venture Portfolio; 3/31/97 for Strong International Stock Portfolio; 3/31/97 for
Warburg Pincus International Equity Portfolio; 3/31/97 for Warburg Pincus Small
Company Growth Portfolio; 10/13/97 for Strong Schafer Value Portfolio; 10/31/97
for T. Rowe Price International Stock Portfolio; 10/31/97 for Dreyfus Small Cap
Value Portfolio; and 10/13/97 for Endeavor Enhanced Index Portfolio. The WRL
Alger Aggressive Growth, WRL J.P. Morgan Real Estate Securities, WRL Janus
Global, WRL Janus Growth, and WRL LKCM Strategic Total Return Subaccounts had
not commenced operations as of 12/31/98.
Where applicable, the following Fund inception dates are used in the calculation
of performance figures: 9/29/95 for the DFA Small Value and International Small
Value Portfolios; 1/12/95 for the DFA Large Value and DFA Global Bond
Portfolios; 9/29/95 for the DFA International; 9/29/95 for DFA Short-Term Fixed
Portfolios; 11/21/94 for Federated Prime Money Portfolio; 2/13/94 for Federated
American Leaders Portfolio; 2/10/94 for Federated Utility Portfolio; 3/29/94 for
Federated U.S. Government Securities Portfolio; 2/2//94 for Federated High
Income Bond Portfolio; 2/12/96 for Montgomery Growth Portfolio; 2/5/96 for
Montgomery Emerging Markets Portfolio; 5/3/95 for Wanger U.S. Small Cap Advisor
Portfolio; 5/3/95 for Wanger International Small Cap Advisor Portfolio; 10/31/95
for Strong International Stock Portfolio; 6/30/95 for Warburg Pincus
International Equity Portfolio; 6/30/95 for Warburg Pincus Small Company Growth
Portfolio; 10/31/97 for Strong Schafer Value Portfolio; 4/8/91 for T. Rowe Price
International Stock Portfolio; 5/4/93 for Dreyfus Small Cap Value Portfolio;
5/1/97 for Endeavor Enhanced Index Portfolio; 3/1/94 for WRL Alger Aggressive
Growth Portfolio; 5/1/98 for WRL J.P. Morgan Real Estate Securities
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Portfolio; 12/31/92 for WRL Janus Global Portfolio; 10/2/86 for WRL Janus Growth
Portfolio; and 3/1/93 for WRL LKCM Strategic Total Return Portfolio.
FEDERATED PRIME MONEY PORTFOLIO SUBACCOUNT YIELDS
Current yield for the Federated Prime Money Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of capital changes)
over a particular 7-day period, less a pro-rata share of Subaccount expenses
accrued over that period (the "base period"), and stated as a percentage of the
investment at the start of the base period (the "base period return"). The base
period return is then annualized by multiplying by /365/7/, with the resulting
yield figure carried to at least the nearest hundredth of one percent.
Calculation of "effective yield" begins with the same "base period return" used
in the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
Effective Yield = [((Base Period Return)+1)/365/7/]-1
30-DAY YIELD FOR NON-MONEY MARKET SUBACCOUNTS
Quotations of yield for the remaining Subaccounts will be based on all
investment income per Unit earned during a particular 30-day period, less
expenses accrued during the period ("net investment income"), and will be
computed by dividing net investment income by the value of a Unit on the last
day of the period, according to the following formula:
YIELD = 2[(a-b + 1)/6/-1]
---
cd
Where:
[a] equals the net investment income earned during the period by the Portfolio
attributable to shares owned by a Subaccount;
[b] equals the expenses accrued for the period (net of reimbursement);
[c] equals the average daily number of Units outstanding during the period;
and
[d] equals the maximum offering price per Accumulation Unit on the last day of
the period.
Yield on a Subaccount is earned from the increase in net asset value of shares
of the Portfolio in which the Subaccount invests and from dividends declared and
paid by the Portfolio, which are automatically reinvested in shares of the
Portfolio.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FOR SUBACCOUNTS
When advertising performance of the Subaccounts, Peoples Benefit will show the
"Standardized Average Annual Total Return," calculated as prescribed by the
rules of the SEC, for each Subaccount. The Standardized Average Annual Total
Return is the effective annual compounded rate of return that would have
produced the cash redemption value over the stated period had the performance
remained constant throughout. The calculation assumes a single $1,000 payment
made at the beginning of the period and full redemption at the end of the
period. It reflects the deduction of all applicable sales loads (including the
contingent deferred sales load), the Annual Contract Fee and all other
Portfolio, Separate Account and Contract level charges except Premium Taxes, if
any.
Quotations of average annual total return for any Subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in a Contract over a period of one, five and ten years (or, if less,
up to the life of the Subaccount), calculated pursuant to the formula:
P(1+T)/n/=ERV
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Where:
(1) [P] equals a hypothetical initial Purchase Payment of $1,000;
(2) [T] equals an average annual total return;
(3) [n] equals the number of years; and
(4) [ERV] equals the ending redeemable value of a hypothetical $1,000 Purchase
Payment made at the beginning of the period (or fractional portion
thereof).
The following table show the Standardized Average Annual Total Return for the
Subaccounts for the period beginning at the inception of each Subaccount and
ending on December 31, 1998.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
Since
Subaccount
Subaccount 1 Year Inception
- ---------- ------ ---------
<S> <C> <C>
DFA Small Value..................... -7.24% 12.15%
DFA Large Value..................... 10.01% 19.17%
DFA International Value............. 10.99% 6.00%
DFA International Small............. 7.04% -6.49%
DFA Short-Term Fixed................ 4.77% 4.74%
DFA Global Bond..................... 7.52% 9.04%
Federated Prime Money............... 4.11% 4.21%
Federated American Leaders.......... 16.84% 25.13%
Federated US Gov't Securities....... 6.94% 6.84%
Federated Utility................... 13.19% 18.40%
Federated High Income Bond.......... 2.01% 9.39%
Wanger Int'l Small Cap.............. 15.55% 15.77%
Wanger US Small Cap................. 7.96% 22.63%
Montgomery Emerg Mkt................ -37.96% -13.78%
Montgomery Growth................... 2.24% 18.99%
Stein Roe Special Venture........... -17.86% -2.87%
Strong Int'l Stock.................. -5.42% -12.41%
Warburg Pincus Int'l Equity......... 4.64% 0.26%
Warburg Pincus Small Co Growth...... -3.51% 14.71%
Dreyfus Small Cap Value............. -2.83% -8.13%
Endeavor Enhanced Index............. 30.51% 24.49%
Strong Schafer Value................ N/A 1.78%
T. Rowe Price Int'l................. 14.67% 4.41%
WRL Alger Agg Growth................ N/A N/A
WRL JP Morgan Real Est.............. N/A N/A
WRL Janus Global.................... N/A N/A
WRL Janus Growth.................... N/A N/A
WRL LKCM Strategic Tot Rtn.......... N/A N/A
</TABLE>
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ADDITIONAL PERFORMANCE MEASURES
NON-STANDARDIZED CUMULATIVE TOTAL RETURN AND NON-STANDARDIZED AVERAGE ANNUAL
TOTAL RETURN
Peoples Benefit may show Non-Standardized Cumulative Total Return (i.e., the
percentage change in the value of an Accumulation Unit) for one or more
Subaccounts with respect to one or more periods. Peoples Benefit may also show
Non-Standardized Average Annual Total Return (i.e., the average annual change in
Accumulation Unit Value) with respect to one or more periods. For one year, the
Non-Standardized Cumulative Total Return and the Non-Standardized Average Annual
Total Return are effective annual rates of return and are equal. For periods
greater than one year, the Non-Standardized Average Annual Total Return is the
effective annual compounded rate of return for the periods stated. Because the
value of an Accumulation Unit reflects the Separate Account and Portfolio
expenses (see Fee Table in the Prospectus), the Non-Standardized Cumulative
Total Return and Non-Standardized Average Annual Total Return also reflect these
expenses. However, these percentages do not reflect the Annual Contract Fee, any
sales loads or Premium Taxes (if any), which, if included, would reduce the
percentages reported by Peoples Benefit.
NON-STANDARDIZED CUMULATIVE TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
Since
Subaccount
Subaccount One Year Inception
- ---------- -------- ---------
<S> <C> <C>
DFA Small Value..................... -7.21% 45.06%
DFA Large Value..................... 10.04% 100.13%
DFA International Value............. 11.01% 20.92%
DFA International Small............. 7.07% -19.46%
DFA Short-Term Fixed................ 4.80% 16.20%
DFA Global Bond..................... 7.54% 40.91%
Federated Prime Money............... 4.13% 18.35%
Federated American Leaders.......... 16.86% 135.24%
Federated US Gov't Securities....... 6.96% 26.23%
Federated Utility................... 13.21% 79.24%
Federated High Income Bond.......... 2.03% 34.42%
Wanger Int'l Small Cap.............. 15.58% 61.94%
Wanger US Small Cap................. 7.98% 95.42%
Montgomery Emerg Mkt................ -37.93% -34.92%
Montgomery Growth................... 2.26% 65.23%
Stein Roe Special Venture........... -17.84% -4.93%
Strong Int'l Stock.................. -5.39% 20.69%
Warburg Pincus Int'l Equity......... 4.67% 0.49%
Warburg Pincus Small Co Growth...... -3.48% 27.24%
Dreyfus Small Cap Value............. -2.81% -9.76%
Endeavor Enhanced Index............. 30.54% 30.57%
Strong Schafer Value................ 1.50% 2.20%
T. Rowe Price Int'l................. 14.69% 5.41%
WRL Alger Agg Growth................ N/A N/A
WRL JP Morgan Real Est.............. N/A N/A
WRL Janus Global.................... N/A N/A
WRL Janus Growth.................... N/A N/A
WRL LKCM Strategic Tot Rtn.......... N/A N/A
</TABLE>
8
<PAGE>
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN
FOR PERIOD ENDING DECEMBER 31, 1998
<TABLE>
<CAPTION>
Since
Subaccount
Subaccount One Year Inception
- ---------- -------- ---------
<S> <C> <C>
DFA Small Value............................ -7.21% 12.17%
DFA Large Value............................ 10.04% 19.18%
DFA International Value.................... 11.01% 6.03%
DFA International Small.................... 7.07% -6.46%
DFA Short-Term Fixed....................... 4.80% 4.76%
DFA Global Bond............................ 7.54% 9.06%
Federated Prime Money...................... 4.13% 4.23%
Federated American Leaders................. 16.86% 25.15%
Federated US Gov't Securities.............. 6.96% 6.86%
Federated Utility.......................... 13.21% 18.42%
Federated High Income Bond................. 2.03% 9.41%
Wanger Int'l Small Cap..................... 15.58% 15.79%
Wanger US Small Cap........................ 7.98% 22.65%
Montgomery Emerg Mkt....................... -37.93% -13.75%
Montgomery Growth.......................... 2.26% 19.01%
Stein Roe Special Venture.................. -17.84% -2.84%
Strong Int'l Stock......................... -5.39% -12.38%
Warburg Pincus Int'l Equity................ 4.67% 0.28%
Warburg Pincus Small Co Growth............. -3.48% 14.73%
Dreyfus Small Cap Value.................... -2.81% -8.10%
Endeavor Enhanced Index.................... 30.54% 24.52%
Strong Schafer Value....................... 1.50% 1.81%
T. Rowe Price Int'l........................ 14.69% 4.43%
WRL Alger Agg Growth....................... N/A N/A
WRL JP Morgan Real Est..................... N/A N/A
WRL Janus Global........................... N/A N/A
WRL Janus Growth........................... N/A N/A
WRL LKCM Strategic Tot Rtn................. N/A N/A
</TABLE>
NON-STANDARDIZED TOTAL RETURN YEAR-TO-DATE
Peoples Benefit may show Non-Standardized Total Return Year-to-Date as of a
particular date, or simply Total Return YTD, for one or more Subaccounts with
respect to one or more non-standardized base periods commencing at the beginning
of a calendar year. Total Return YTD figures reflect the percentage change in
actual Accumulation Unit Values during the relevant period. These percentages
reflect a deduction for the Separate Account and Portfolio expenses, but do not
include the Annual Contract Fee, any sales loads or Premium Taxes (if any),
which, if included, would reduce the percentages reported by Peoples Benefit.
NON-STANDARDIZED TOTAL RETURN YEAR-TO-DATE
<TABLE>
<CAPTION>
Total Return
YTD as of
Subaccount 12/31/98
- ---------- --------
<S> <C>
DFA Small Value........................................ -7.21%
DFA Large Value N/A.................................... 10.04%
DFA International Value................................ 11.01%
DFA International Small................................ 7.07%
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
DFA Short-Term Fixed................................... 4.80%
DFA Global Bond........................................ 7.54%
Federated Prime Money.................................. 4.13%
Federated American Leaders............................. 16.86%
Federated US Gov't Securities.......................... 6.96%
Federated Utility...................................... 13.21%
Federated High Income Bond............................. 2.03%
Wanger Int'l Small Cap................................. 15.58%
Wanger US Small Cap.................................... 7.98%
Montgomery Emerg Mkt................................... -37.93%
Montgomery Growth...................................... 2.26%
Stein Roe Special Venture.............................. -17.84%
Strong Int'l Stock..................................... -5.39%
Warburg Pincus Int'l Equity............................ 4.67%
Warburg Pincus Small Co Growth......................... -3.48%
Dreyfus Small Cap Value................................ -2.81%
Endeavor Enhanced Index................................ 30.54%
Strong Schafer Value................................... 1.50%
T. Rowe Price Int'l.................................... 14.69%
WRL Alger Agg Growth................................... N/A
WRL JP Morgan Real Est................................. N/A
WRL Janus Global....................................... N/A
WRL Janus Growth....................................... N/A
WRL LKCM Strategic Tot Rtn............................. N/A
</TABLE>
NON-STANDARDIZED ONE YEAR RETURN
Peoples Benefit may show Non-Standardized One Year Return, for one or more
Subaccounts with respect to one or more non-standardized base periods commencing
at the beginning of a calendar year (or date of Portfolio inception, if during
the relevant year) and ending at the end of such calendar year. One Year Return
figures reflect the historical performance of the Portfolios as if the Contract
were in existence before its inception date (which it was not). After the
Contract's inception date, the figures reflect the percentage change in actual
Accumulation Unit Values during the relevant period. These percentages reflect a
deduction for the Separate Account and Portfolio expenses, but do not include
the Annual Contract Fee, any sales loads or Premium Taxes (if any), which, if
included, would reduce the percentages reported by Peoples Benefit.
NON-STANDARDIZED ONE YEAR RETURN
<TABLE>
<CAPTION>
1998 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
DFA Small Value................. -7.21% 29.60% 21.26% N/A
DFA Large Value................. 10.04% 28.39% 17.72% N/A
DFA International Value......... 11.01% -2.86% 6.41% N/A
DFA International Small......... 7.07% -25.56% -0.39% N/A
DFA Short-Term Fixed............ 4.80% 5.00% 4.51% N/A
DFA Global Bond................. 7.54% 7.09% 8.27% N/A
Federated Prime Money........... 4.13% 4.26% 4.08% 4.46%
Federated American Leaders...... 16.86% 31.48% 20.78% 34.02%
Federated US Gov't Securities... 6.96% 7.88% 3.52% 7.53%
Federated Utility............... 13.21% 25.81% 20.84% 23.88%
Federated High Income Bond...... 2.03% 13.09% 13.57% 17.95%
Wanger Int'l Small Cap.......... 15.58% -2.10% 31.15% N/A
Wanger US Small Cap............. 7.98% 28.57% 45.63% N/A
Montgomery Emerg Mkt............ -37.93% -1.22% N/A N/A
Montgomery Growth............... 2.26% 27.74% N/A N/A
</TABLE>
10
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Stein Roe Special Venture....... -17.84% N/A N/A N/A
Strong Int'l Stock.............. -5.39% -14.08% 9.67% N/A
Warburg Pincus Int'l Equity..... 4.67% -2.89% 9.32% N/A
Warburg Pincus Small Co Growth.. -3.48% 14.89% 13.18% N/A
Dreyfus Small Cap Value......... -2.81% 24.76% 24.83% 13.32%
Endeavor Enhanced Index......... 30.54% N/A N/A N/A
Strong Schafer Value............ 1.50% N/A N/A N/A
T. Rowe Price Int'l............. 14.69% 1.95% 14.49% 9.66%
WRL Alger Agg Growth............ 47.75% 23.12% 9.73% 37.15%
WRL JP Morgan Real Est.......... N/A N/A N/A N/A
WRL Janus Global................ 29.19% 17.99% 26.92% 22.28%
WRL Janus Growth................ 63.45% 16.79% 17.21% 46.20%
WRL LKCM Strategic Tot Rtn...... 8.91% 20.99% 14.26% 23.86%
</TABLE>
NON-STANDARDIZED ADJUSTED HISTORICAL CUMULATIVE RETURN AND NON-STANDARDIZED
ADJUSTED HISTORICAL AVERAGE ANNUAL TOTAL RETURN
Peoples Benefit may show Non-Standardized Adjusted Historical Cumulative Return
and Non-Standardized Adjusted Historical Average Annual Total Return, calculated
on the basis of the historical performance of the Portfolios (calculated
beginning from the end of the year of inception for each Portfolio) and may
assume the Contract was in existence prior to its inception date (which it was
not). After the Contract's inception date, the calculations will reflect actual
Accumulation Unit Values. These returns are based on specified premium patterns
which produce the resulting Accumulated Values. They reflect a deduction for the
Separate Account expenses and Portfolio expenses. However, they do not include
the Annual Contract Fee, any sales loads or Premium Taxes (if any), which, if
included, would reduce the percentages reported.
The Non-Standardized Adjusted Historical Cumulative Return for a Subaccount is
the effective annual rate of return that would have produced the ending
Accumulated Value of the stated one-year period.
The Non-Standardized Adjusted Historical Average Annual Total Return for a
Subaccount is the effective annual compounded rate of return that would have
produced the ending Accumulated Value over the stated period had the performance
remained constant throughout.
ADJUSTED HISTORICAL CUMULATIVE RETURNS FOR PERIODS ENDING 12/31/98
(BASED ON SINGLE INITIAL PURCHASE)
<TABLE>
<CAPTION>
Total
Since Fund
1 Year 3 Year Inception Year-End
------ ------ ------------------
<S> <C> <C> <C>
DFA Small Value................. -7.21% 45.82% 43.30%
DFA Large Value................. 10.04% 66.31% 99.91%
DFA International Value......... 11.01% 14.74% 20.91%
DFA International Small......... 7.07% -20.61% -20.03%
DFA Short-Term Fixed............ 4.80% 15.01% 16.32%
DFA Global Bond................. 7.54% 24.69% 40.71%
Federated Prime Money........... 4.13% 13.00% 18.48%
Federated American Leaders...... 16.86% 85.58% 145.56%
Federated US Gov't Securities... 6.96% 19.45% 31.06%
Federated Utility............... 13.21% 57.87% 87.94%
Federated High Income Bond...... 2.03% 31.05% 48.18%
Wanger Int'l Small Cap.......... 15.58% 48.39% 102.27%
Wanger US Small Cap............. 7.98% 102.19% 134.14%
Montgomery Emerg Mkt............ -37.93% N/A -35.57%
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C> <C>
Montgomery Growth............... 2.26% N/A 65.38%
Strong Int'l Stock.............. -5.39% -10.85% -8.64%
Warburg Pincus Int'l Equity..... 4.67% 11.12% 18.87%
Warburg Pincus Small Co Growth.. -3.48% 25.50% 56.51%
Dreyfus Small Cap Value......... -2.81% 51.36% 86.32%
Endeavor Enhanced Index......... 30.54% N/A 59.75%
Strong Schafer Value............ 1.50% N/A 2.20%
T. Rowe Price Int'l............. 14.69% 33.88% 62.39%
WRL Alger Agg Growth............ 47.75% 99.62% 168.85%
WRL JP Morgan Real Est.......... N/A N/A -15.26%
WRL Janus Global................ 29.19% 93.47% 221.18%
WRL Janus Growth................ 63.45% 123.74% 846.88%
WRL LKCM Strategic Tot Rtn...... 8.93% 50.70% 108.22%
</TABLE>
ADJUSTED HISTORICAL AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDING 12/31/98
(BASED ON SINGLE INITIAL PURCHASE)
<TABLE>
<CAPTION>
Total
Since Fund
1 Year 3 Year Inception Year-End
------ ------ ------------------
<S> <C> <C> <C>
DFA Small Value................. -7.21% 13.40% 11.68%
DFA Large Value................. 10.04% 18.48% 19.06%
DFA International Value......... 11.01% 4.69% 6.00%
DFA International Small......... 7.07% -7.41% -6.63%
DFA Short-Term Fixed............ 4.80% 4.77% 4.75%
DFA Global Bond................. 7.54% 7.63% 8.98%
Federated Prime Money........... 4.13% 4.16% 4.20%
Federated American Leaders...... 16.86% 22.89% 20.17%
Federated US Gov't Securities... 6.96% 6.10% 5.84%
Federated Utility............... 13.21% 16.44% 13.77%
Federated High Income Bond...... 2.03% 9.43% 8.47%
Wanger Int'l Small Cap.......... 15.58% 14.06% 21.19%
Wanger US Small Cap............. 7.98% 26.45% 26.12%
Montgomery Emerg Mkt............ -37.93% N/A -14.01%
Montgomery Growth............... 2.26% N/A 18.99%
Strong Int'l Stock.............. -5.39% -3.76% -2.78%
Warburg Pincus Int'l Equity..... 4.67% 3.58% 5.05%
Warburg Pincus Small Co Growth.. -3.48% 7.87% 13.63%
Dreyfus Small Cap Value......... -2.81% 14.82% 11.61%
Endeavor Enhanced Index......... 30.54% N/A 32.41%
Strong Schafer Value............ 1.50% N/A 1.79%
T. Rowe Price Int'l............. 14.69% 10.21% 6.47%
WRL Alger Agg Growth............ 47.75% 25.91% 22.68%
WRL JP Morgan Real Est.......... N/A N/A -21.95%
WRL Janus Global................ 29.19% 24.61% 21.16%
WRL Janus Growth................ 63.45% 30.79% 20.13%
WRL LKCM Strategic Tot Rtn...... 8.93% 14.65% 13.39%
</TABLE>
Note: Advertisements and other sales literature for the Portfolios may quote
total returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in the
Portfolios based on monthly reinvestment of dividends over a specific period of
time.
12
<PAGE>
HYPOTHETICAL ILLUSTRATIONS
DFA Small Value
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- -------- ----------- ------ ------ ---------- ---- ---------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 60,630 21.26% 21.26% 21.26% 12/31/1996 $ 4,000 $ 4,425 21.26% 21.26%
12/31/1997 $ 50,000 $ 78,578 29.60% 25.36% 57.16% 12/31/1997 $ 6,000 $ 7,735 29.60% 26.57%
12/31/1998 $ 50,000 $ 72,910 -7.21% 13.40% 45.82% 12/31/1998 $ 8,000 $ 9,177 -7.21% 9.23%
</TABLE>
DFA Large Value
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- -------- ----------- ------ ------ ---------- ---- ---------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 58,858 17.72% 17.72% 17.72% 12/31/1996 $ 4,000 $ 4,354 17.72% 17.72%
12/31/1997 $ 50,000 $ 75,568 28.39% 22.94% 51.14% 12/31/1997 $ 6,000 $ 7,591 28.39% 24.51%
12/31/1998 $ 50,000 $ 83,153 10.04% 18.48% 66.31% 12/31/1998 $ 8,000 $ 10,352 10.04% 17.48%
</TABLE>
DFA International Value
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- ------ --------- ----------- ---- ---------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 53,206 6.41% 6.41% 6.41% 12/31/1996 $ 4,000 $ 4,354 6.41% 6.41%
12/31/1997 $ 50,000 $ 51,681 -2.86% 1.67% 3.36% 12/31/1997 $ 6,000 $ 7,591 -2.86% 0.17%
12/31/1998 $ 50,000 $ 57,372 11.01% 4.69% 14.74% 12/31/1998 $ 8,000 $ 10,352 11.01% 5.40%
</TABLE>
13
<PAGE>
DFA International Small
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
-------------------------------------- ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ---------- ----------- ------ ------ ---------- ---------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $ 50,000 $ 49,804 -0.39% -0.39% -0.39% 12/31/1996 $ 4,000 $ 3,992 -0.39% -0.39%
12/31/1997 $ 50,000 $ 37,073 -25.56% -13.89% -25.85% 12/31/1997 $ 6,000 $ 4,972 -25.56% -18.25%
12/31/1998 $ 50,000 $ 39,693 7.07% -7.41% -20.61% 12/31/1998 $ 8,000 $ 7,323 7.07% -5.87%
</TABLE>
DFA Short-Term Fixed
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ----------------------- -----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ---------- ----------- ------ ------ ----------- ---- ---------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 12/31/1995 $ 2,000 $ 2,000
12/31/1996 $50,000 $52,256 4.51% 4.51% 4.51% 12/31/1996 $ 4,000 $ 4,090 4.51% 4.51%
12/31/1997 $50,000 $54,871 5.00% 4.76% 9.74% 12/31/1997 $ 6,000 $ 6,295 5.00% 4.84%
12/31/1998 $50,000 $57,503 4.80% 4.77% 15.01% 12/31/1998 $ 8,000 $ 8,597 4.80% 4.82%
</TABLE>
DFA Global Bond
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ------------------------ ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- --------- ---------- ----------- -------- ------- ----------- ---- -------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 N/A N/A N/A 12/31/1995 $ 2,000 $ 2,000 N/A N/A
12/31/1996 $50,000 $54,135 8.27% 8.27% 8.27% 12/31/1996 $ 4,000 $ 4,165 8.27% 8.27%
12/31/1997 $50,000 $57,974 7.09% 7.68% 15.95% 12/31/1997 $ 6,000 $ 6,461 7.09% 7.49%
12/31/1998 $50,000 $62,346 7.54% 7.63% 24.69% 12/31/1998 $ 8,000 $ 8,948 7.54% 7.52%
</TABLE>
14
<PAGE>
Dreyfus Small Cap Value
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1993
December 31, 1993 and Yearly December 31st Thereafter
------------------------------------ ------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ----------------------- -----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ---------- ----------- ------ ------- ---------- ---- ---------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1993 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1993 $ 2,000 $ 2,000 N/A N/A
12/31/1994 $ 50,000 $ 48,787 -2.43% -2.43% -2.43% 12/31/1994 $ 4,000 $ 3,951 -2.43% -2.43%
12/31/1995 $ 50,000 $ 55,284 13.32% 5.15% 10.57% 12/31/1995 $ 6,000 $ 6,478 13.32% 7.76%
12/31/1996 $ 50,000 $ 69,010 24.83% 11.34% 38.02% 12/31/1996 $ 8,000 $ 10,086 24.83% 15.68%
12/31/1997 $ 50,000 $ 86,098 24.76% 14.55% 72.20% 12/31/1997 $ 10,000 $ 14,583 24.76% 18.97%
12/31/1998 $ 50,000 $ 83,679 -2.81% 10.85% 67.36% 12/31/1998 $ 12,000 $ 16,174 -2.81% 11.86%
</TABLE>
Endeavor Enhanced Index
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1997
December 31, 1997 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- --------------- ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---- ---------- ----------- ------ ------ ---------- ---- ---------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1997 $50,000 $50,000 N/A N/A N/A 12/31/1997 $ 2,000 $ 2,000 N/A N/A
12/31/1998 $50,000 $65,269 30.54% 30.54% 30.54% 12/31/1998 $ 4,000 $ 4,611 30.54% 30.54%
</TABLE>
T. Rowe Price International
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1991
December 31, 1991 and Yearly December 31st Thereafter
------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ----------------------- ----------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ---------- ----------- ------ ------ ---------- ---- ---------- ----------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1991 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1991 $ 2,000 $ 2,000 N/A N/A
12/31/1992 $ 50,000 $ 47,882 -4.24% -4.24% -4.24% 12/31/1992 $ 4,000 $ 3,915 -4.24% -4.24%
12/31/1993 $ 50,000 $ 56,367 17.72% 6.18% 12.73% 12/31/1993 $ 6,000 $ 6,609 17.72% 9.83%
12/31/1994 $ 50,000 $ 52,825 -6.29% 1.85% 5.65% 12/31/1994 $ 8,000 $ 8,194 -6.29% 1.60%
12/31/1995 $ 50,000 $ 57,925 9.66% 3.75% 15.85% 12/31/1995 $ 10,000 $ 10,985 9.66% 4.70%
12/31/1996 $ 50,000 $ 66,320 14.49% 5.81% 32.64% 12/31/1996 $ 12,000 $ 14,577 14.49% 7.74%
12/31/1997 $ 50,000 $ 67,614 1.95% 5.16% 35.23% 12/31/1997 $ 14,000 $ 16,861 1.95% 6.14%
12/31/1998 $ 50,000 $ 77,550 14.69% 6.47% 55.10% 12/31/1998 $ 16,000 $ 21,339 14.69% 8.09%
</TABLE>
15
<PAGE>
Federated American Leaders Portfolio
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------ -------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ----------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ------------ ---------- ----------- -------- -------- ----------- --------- ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $ 67,009 34.02% 34.02% 34.02% 12/31/1995 $ 4,000 $ 4,680 34.02% 34.02%
12/31/1996 $50,000 $ 80,936 20.78% 27.23% 61.87% 12/31/1996 $ 6,000 $ 7,653 20.78% 25.40%
12/31/1997 $50,000 $106,414 31.48% 28.63% 112.83% 12/31/1997 $ 8,000 $12,062 31.48% 28.18%
12/31/1998 $50,000 $124,356 16.86% 25.58% 148.71% 12/31/1998 $10,000 $16,096 16.86% 24.00%
</TABLE>
Federated High Income Bond Portfolio
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------------ --------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ----------------------- ------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ----------- ---------- ----------- -------- -------- ----------- --------- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $58,975 17.95% 17.95% 17.95% 12/31/1995 $ 4,000 $ 4,359 17.95% 17.95%
12/31/1996 $50,000 $66,977 13.57% 15.74% 33.95% 12/31/1996 $ 6,000 $ 6,950 13.57% 15.08%
12/31/1997 $50,000 $75,747 13.09% 14.85% 51.49% 12/31/1997 $ 8,000 $ 9,861 13.09% 14.13%
12/31/1998 $50,000 $77,288 2.03% 11.50% 54.58% 12/31/1998 $10,000 $12,061 2.03% 9.38%
</TABLE>
Federated Prime Money Portfolio
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ----------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $52,232 4.46% 4.46% 4.46% 12/31/1995 $ 4,000 $ 4,089 4.46% 4.46%
12/31/1996 $50,000 $54,361 4.08% 4.27% 8.72% 12/31/1996 $ 6,000 $ 6,256 4.08% 4.21%
12/31/1997 $50,000 $56,679 4.26% 4.27% 13.36% 12/31/1997 $ 8,000 $ 8,523 4.26% 4.24%
12/31/1998 $50,000 $59,022 4.13% 4.23% 18.04% 12/31/1998 $10,000 $10,875 4.13% 4.20%
</TABLE>
16
<PAGE>
Federated U.S. Government Securities
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------------- ------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $53,766 7.53% 7.53% 7.53% 12/31/1995 $ 4,000 $ 4,151 7.53% 7.53%
12/31/1996 $50,000 $55,660 3.52% 5.51% 11.32% 12/31/1996 $ 6,000 $ 6,297 3.52% 4.87%
12/31/1997 $50,000 $60,044 7.88% 6.29% 20.09% 12/31/1997 $ 8,000 $ 8,793 7.88% 6.33%
12/31/1998 $50,000 $64,224 6.96% 6.46% 28.45% 12/31/1998 $10,000 $11,405 6.96% 6.58%
</TABLE>
Federated Utility Portfolio
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- -------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $61,942 23.88% 23.88% 23.88% 12/31/1995 $ 4,000 $ 4,478 23.88% 23.88%
12/31/1996 $50,000 $68,654 10.84% 17.18% 37.31% 12/31/1996 $ 6,000 $ 6,963 10.84% 15.27%
12/31/1997 $50,000 $86,377 25.81% 19.99% 72.75% 12/31/1997 $ 8,000 $10,760 25.81% 20.16%
12/31/1998 $50,000 $97,789 13.21% 18.26% 95.58% 12/31/1998 $10,000 $14,182 13.21% 17.55%
</TABLE>
Montgomery Growth
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1996
December 31, 1996 and Yearly December 31st Thereafter
------------------------------------------ -----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- --------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ----------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1996 $50,000 $50,000 N/A N/A N/A 12/31/1996 $2,000 $2,000 N/A N/A
12/31/1997 $50,000 $63,869 27.74% 27.74% 27.74% 12/31/1997 $4,000 $4,555 27.74% 27.74%
12/31/1998 $50,000 $65,314 2.26% 14.29% 30.63% 12/31/1998 $6,000 $6,658 2.26% 10.59%
</TABLE>
17
<PAGE>
Montgomery Emerging Markets
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1996
December 31, 1996 and Yearly December 31st Thereafter
------------------------------------------- -----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1996 $50,000 $50,000 N/A N/A N/A 12/31/1996 $2,000 $2,000 N/A N/A
12/31/1997 $50,000 $49,388 -1.22% -1.22% -1.22% 12/31/1997 $4,000 $3,976 -1.22% -1.22%
12/31/1998 $50,000 $30,653 -37.93% -21.70% -38.69% 12/31/1998 $6,000 $4,467 -37.93% -28.19%
</TABLE>
Strong International Stock
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------------ -----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 N/A N/A N/A 12/31/1995 $2,000 $2,000 N/A N/A
12/31/1996 $50,000 $54,835 9.67% 9.67% 9.67% 12/31/1996 $4,000 $4,193 9.67% 9.67%
12/31/1997 $50,000 $47,115 -14.08% -2.93% -5.77% 12/31/1997 $6,000 $5,603 -14.08% -6.77%
12/31/1998 $50,000 $44,574 -5.39% -3.76% -10.85% 12/31/1998 $8,000 $7,301 -5.39% -6.07%
</TABLE>
Strong Schafer Value
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1997
December 31, 1997 and Yearly December 31st Thereafter
----------------------------------------- -----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ---------------------- ----------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- ------- ------- ---------- ---------- ---------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1997 $50,000 $50,000 N/A N/A N/A 12/31/1997 $2,000 $2,000 N/A N/A
12/31/1998 $50,000 $50,751 1.50% 1.50% 1.50% 12/31/1998 $4,000 $4,030 1.50% 1.50%
</TABLE>
18
<PAGE>
Wanger U.S. Small Cap Advisor
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------------- -----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- -------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $ 50,000 N/A N/A N/A 12/31/1995 $2,000 $ 2,000 N/A N/A
12/31/1996 $50,000 $ 72,815 45.63% 45.63% 45.63% 12/31/1996 $4,000 $ 4,913 45.63% 45.63%
12/31/1997 $50,000 $ 93,621 28.57% 36.84% 87.24% 12/31/1997 $6,000 $ 8,316 28.57% 34.61%
12/31/1998 $50,000 $101,093 7.98% 26.45% 102.19% 12/31/1998 $8,000 $10,980 7.98% 21.57%
</TABLE>
Wanger International Small Cap Advisor
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------------- ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- --------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 N/A N/A N/A 12/31/1995 $2,000 $2,000 N/A N/A
12/31/1996 $50,000 $65,573 31.15% 31.15% 31.15% 12/31/1996 $4,000 $4,623 31.15% 31.15%
12/31/1997 $50,000 $64,197 -2.10% 13.31% 28.39% 12/31/1997 $6,000 $6,526 -2.10% 8.52%
12/31/1998 $50,000 $74,195 15.58% 14.06% 48.39% 12/31/1998 $8,000 $9,542 15.58% 11.88%
</TABLE>
Warburg Pincus International Equity
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- -------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 N/A N/A N/A 12/31/1995 $2,000 $2,000 N/A N/A
12/31/1996 $50,000 $54,661 9.32% 9.32% 9.32% 12/31/1996 $4,000 $4,186 9.32% 9.32%
12/31/1997 $50,000 $53,081 -2.89% 3.04% 6.16% 12/31/1997 $6,000 $6,065 -2.89% 1.09%
12/31/1998 $50,000 $55,558 4.67% 3.58% 11.12% 12/31/1998 $8,000 $8,348 4.67% 2.85%
</TABLE>
19
<PAGE>
Warburg Pincus Small Company Growth
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1995
December 31, 1995 and Yearly December 31st Thereafter
------------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- -----------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1995 $50,000 $50,000 N/A N/A N/A 12/31/1995 $2,000 $2,000 N/A N/A
12/31/1996 $50,000 $56,588 13.18% 13.18% 13.18% 12/31/1996 $4,000 $4,264 13.18% 13.18%
12/31/1997 $50,000 $65,015 14.89% 14.03% 30.03% 12/31/1997 $6,000 $6,898 14.89% 14.29%
12/31/1998 $50,000 $62,752 -3.48% 7.87% 25.50% 12/31/1998 $8,000 $8,658 -3.48% 5.30%
</TABLE>
WRL Alger Aggressive Growth
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1994
December 31, 1994 and Yearly December 31st Thereafter
------------------------------------------- ------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1994 $50,000 $ 50,000 N/A N/A N/A 12/31/1994 $ 2,000 $ 2,000 N/A N/A
12/31/1995 $50,000 $ 68,574 37.15% 37.15% 37.15% 12/31/1995 $ 4,000 $ 4,743 37.15% 37.15%
12/31/1996 $50,000 $ 75,249 9.73% 22.68% 50.50% 12/31/1996 $ 6,000 $ 7,205 9.73% 18.89%
12/31/1997 $50,000 $ 92,647 23.12% 22.83% 85.29% 12/31/1997 $ 8,000 $10,870 23.12% 20.87%
12/31/1998 $50,000 $136,885 47.75% 28.63% 173.77% 12/31/1998 $10,000 $18,061 47.75% 29.93%
</TABLE>
WRL J.P. Morgan Real Estate Securities
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1998
December 31, 1998 and Yearly December 31st Thereafter
----------------------------------------- ------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ----------------- ----------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- ------- ------- ---------- ---------- ---------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1998 $50,000 $50,000 N/A N/A N/A 12/31/1998 $2,000 $2,000 N/A N/A
</TABLE>
20
<PAGE>
WRL Janus Global
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1992
December 31, 1992 and Yearly December 31st Thereafter
------------------------------------------- ------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- ---------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1992 $50,000 $ 50,000 N/A N/A N/A 12/31/1992 $ 2,000 $ 2,000 N/A N/A
12/31/1993 $50,000 $ 67,100 34.20% 34.20% 34.20% 12/31/1993 $ 4,000 $ 4,684 34.20% 34.20%
12/31/1994 $50,000 $ 66,835 -0.40% 15.62% 33.67% 12/31/1994 $ 6,000 $ 6,665 -0.40% 10.71%
12/31/1995 $50,000 $ 81,724 22.28% 17.79% 63.45% 12/31/1995 $ 8,000 $10,150 22.28% 16.12%
12/31/1996 $50,000 $103,726 26.92% 20.01% 107.45% 12/31/1996 $10,000 $14,883 26.92% 20.00%
12/31/1997 $50,000 $122,389 17.99% 19.61% 144.78% 12/31/1997 $12,000 $19,561 17.99% 19.40%
12/31/1998 $50,000 $158,110 29.19% 21.15% 216.22% 12/31/1998 $14,000 $27,270 29.19% 21.75%
</TABLE>
WRL Janus Growth
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1986
December 31, 1986 and Yearly December 31st Thereafter
------------------------------------------ ---------------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ------------------ ------------------------- -------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
- ---------- ---------- ----------- -------- -------- ----------- ---------- ---------- ------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1986 $50,000 $ 50,000 N/A N/A N/A 12/31/1986 $ 2,000 $ 2,000 N/A N/A
12/31/1987 $50,000 $ 55,090 10.18% 10.18% 10.18% 12/31/1987 $ 4,000 $ 4,204 10.18% 10.18%
12/31/1988 $50,000 $ 64,931 17.86% 13.96% 29.86% 12/31/1988 $ 6,000 $ 6,954 17.86% 15.14%
12/31/1989 $50,000 $ 94,873 46.11% 23.80% 89.75% 12/31/1989 $ 8,000 $ 12,161 46.11% 28.77%
12/31/1990 $50,000 $ 94,050 -0.87% 17.11% 88.10% 12/31/1990 $10,000 $ 14,056 -0.87% 17.10%
12/31/1991 $50,000 $149,350 58.80% 24.46% 198.70% 12/31/1991 $12,000 $ 24,321 58.80% 28.08%
12/31/1992 $50,000 $151,857 1.68% 20.34% 203.71% 12/31/1992 $14,000 $ 26,729 1.68% 21.10%
12/31/1993 $50,000 $156,890 3.31% 17.75% 213.78% 12/31/1993 $16,000 $ 29,615 3.31% 17.06%
12/31/1994 $50,000 $142,916 -8.91% 14.03% 185.83% 12/31/1994 $18,000 $ 28,977 -8.91% 11.54%
12/31/1995 $50,000 $208,939 46.20% 17.22% 317.88% 12/31/1995 $20,000 $ 44,364 46.20% 16.81%
12/31/1996 $50,000 $244,887 17.21% 17.22% 389.77% 12/31/1996 $22,000 $ 53,996 17.21% 16.87%
12/31/1997 $50,000 $286,009 16.79% 17.18% 472.02% 12/31/1997 $24,000 $ 65,063 16.79% 16.86%
12/31/1998 $50,000 $467,470 63.45% 20.48% 834.94% 12/31/1998 $26,000 $108,344 63.45% 21.59%
</TABLE>
21
<PAGE>
WRL LKCM Strategic Total Return
<TABLE>
<CAPTION>
$50,000 Single Purchase Payment Made $2,000 Purchase Payment Made December 31, 1993
December 31, 1993 and Yearly December 31st Thereafter
------------------------------------------ ----------------------------------------------
Values prior to current Values prior to current
year's purchase payment Non-Standardized year's purchase payment Non-Standardized
----------------------- ---------------- ------------------------ ------------------
One Average One Average
Year Annual Cumulative Year Annual
Cumulative Accumulated Total Total Fund Total Cumulative Accumulated Total Total
Date Payment Value Return Return Return Date Payment Value Return Return
---- ---------- ----------- ------ ------ -------- ---- ------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/31/1993 $ 50,000 $ 50,000 N/A N/A N/A 12/31/1993 $ 2,000 $ 2,000 N/A N/A
12/31/1994 $ 50,000 $ 49,411 -1.18% -1.18% -1.18% 12/31/1994 $ 4,000 $ 3,976 -1.18% -1.18%
12/31/1995 $ 50,000 $ 61,203 23.86% 10.64% 22.41% 12/31/1995 $ 6,000 $ 6,925 23.86% 14.70%
12/31/1996 $ 50,000 $ 69,930 14.26% 11.83% 39.86% 12/31/1996 $ 8,000 $ 9,913 14.26% 14.49%
12/31/1997 $ 50,000 $ 84,668 21.08% 14.07% 69.34% 12/31/1997 $ 10,000 $ 14,002 21.08% 16.90%
12/31/1998 $ 50,000 $ 92,231 8.93% 13.03% 84.46% 12/31/1998 $ 12,000 $ 17,253 8.93% 14.42%
</TABLE>
Individualized Computer Generated Illustrations
Peoples Benefit may from time to time use computer-based software available
through Morningstar, CDA/Wiesnberger and/or other firms to provide registered
representatives and existing and/or potential owners of Contracts with
individualized hypothetical performance illustrations for some or all of the
Portfolios. Such illustrations may include, without limitation, graphs, bar
charts and other types of formats presenting the following information: (i) the
historical results of a hypothetical investment in a single Portfolio; (ii) the
historical fluctuation of the value of a single Portfolio (actual and
hypothetical); (iii) the historical results of a hypothetical investment in more
than one Portfolio; (iv) the historical performance of two or more market
indices in relation to one another and/or one or more Portfolios; (v) the
historical performance of two or more market indices in comparison to a single
Portfolio or a group of Portfolios; (vi) a market risk/reward scatter chart
showing the historical risk/reward relationship of one or more mutual funds or
Portfolios to one or more indices and a broad category of similar anonymous
variable annuity subaccounts; and (vii) Portfolio data sheets showing various
information about one or more Portfolios (such as information concerning total
return for various periods, fees and expenses, standard deviation, alpha and
beta, investment objective, inception date and net assets).
PERFORMANCE COMPARISONS
Performance information for any Subaccount reflects only the performance of a
hypothetical Contract under which Accumulation Value is allocated to a
Subaccount during a particular time period on which the calculations are based.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the Portfolio in which
the Subaccount invests, and the market conditions during the given period, and
should not be considered as a representation of what may be achieved in the
future.
Reports and marketing materials may, from time to time, include information
concerning the rating of Peoples Benefit Life Insurance Company, Inc. as
determined by one or more of the ratings services listed below, or other
recognized rating services. Reports and promotional literature may also contain
other information including (i) the ranking of any Subaccount derived from
rankings of variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services or by other rating services, companies,
publications, or other person who rank separate accounts or other investment
products on overall performance or other criteria, and (ii) the effect of tax-
deferred compounding on a Subaccount's investment returns, or returns in
general, which may be illustrated by graphs, charts, or otherwise, and which may
include a comparison, at various points in time, of the return from an
investment in a Contract (or returns in general) on a tax-deferred basis
(assuming one or more tax rates) with the return on a taxable basis.
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Each Subaccount's performance depends on, among other things, the performance of
the underlying Portfolio which, in turn, depends upon such variables as:
. quality of underlying investments;
. average maturity of underlying investments;
. type of instruments in which the Portfolio is invested;
. changes in interest rates and market value of underlying investments;
. changes in Portfolio expenses; and
. the relative amount of the Portfolio's cash flow.
From time to time, we may advertise the performance of the Subaccounts and the
underlying Portfolios as compared to similar funds or portfolios using certain
indexes, reporting services and financial publications, and we may advertise
rankings or ratings issued by certain services and/or other institutions. These
may include, but are not limited to, the following:
. Dow Jones Industrial Average ("DJIA"), an unmanaged index representing
share prices of major industrial corporations, public utilities, and
transportation companies. Produced by the Dow Jones & Company, it is
cited as a principal indicator of market conditions.
. Standard & Poor's Daily Stock Price Index of 500 Common Stocks, a
composite index of common stocks in industrial, transportation, and
financial and public utility companies, which can be used to compare to
the total returns of funds whose portfolios are invested primarily in
common stocks. In addition, the Standard & Poor's index assumes
reinvestments of all dividends paid by stocks listed on its index. Taxes
due on any of these distributions are not included, nor are brokerage or
other fees calculated into the Standard & Poor's figures.
. Lipper Analytical Services, Inc., a reporting service that ranks funds
in various fund categories by making comparative calculations using
total return. Total return assumes the reinvestment of all income
dividends and capital gains distributions, if any. From time to time, we
may quote the Portfolios' Lipper rankings in various fund categories in
advertising and sales literature.
. Bank Rate Monitor National Index, Miami Beach, Florida, a financial
reporting service which publishes weekly average rates of 50 leading
bank and thrift institution money market deposit accounts. The rates
published in the index are an average of the personal account rates
offered on the Wednesday prior to the date of publication by ten of the
largest banks and thrifts in each of the five largest Standard
Metropolitan Statistical Areas. Account minimums range upward from
$2,500 in each institution, and compounding methods vary. If more than
one rate is offered, the lowest rate is used. Rates are subject to
change at any time specified by the institution.
. Shearson Lehman Government/Corporate (Total) Index, an index comprised
of aproximately 5,000 issues which include: non-convertible bonds
publicly issued by the U.S. government or its agencies; corporate bonds
guaranteed by the U.S. government and quasi-federal corporations; and
publicly issued, fixed-rate, non-convertible domestic bonds of companies
in industry, public utilities and finance. The average maturity of these
bonds approximates nine years. Tracked by Shearson Lehman, Inc., the
index calculates total returns for one month, three month, twelve month,
and ten year periods and year-to-date.
. Shearson Lehman Government/Corporate (Long-Term) Index, an index
composed of the same types of issues as defined above. However, the
average maturity of the bonds included in this index approximates 22
years.
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. Shearson Lehman Government Index, an unmanaged index comprised of all
publicly issued, non-convertible domestic debt of the U.S. government,
or any agency thereof, or any quasi-federal corporation and of corporate
debt guaranteed by the U.S. government. Only notes and bonds with a
minimum outstanding principal of $1 million and a minimum maturity of
one year are included.
. Morningstar, Inc., an independent rating service that publishes the bi-
weekly Mutual Fund Values. Mutual Fund Values rates more than 1,000
NASDAQ-listed mutual funds of all types, according to their risk-
adjusted returns. The maximum rating is five stars, and ratings are
effective for two weeks.
. Money, a monthly magazine that regularly ranks money market funds in
various categories based on the latest available seven-day compound
(effective) yield. From time to time, the Fund will quote its Money
ranking in advertising and sales literature.
. Standard & Poor's Utility Index, an unmanaged index of common stocks
from forty different utilities. This index indicates daily changes in
the price of the stocks. The index also provides figures for changes in
price from the beginning of the year to date, and for a twelve month
period.
. Dow Jones Utility Index, an unmanaged index comprised of fifteen utility
stocks that tracks changes in price daily and over a six month period.
The index also provides the highs and lows for each of the past five
years.
. The Consumer Price Index, a measure for determining inflation.
Investors may use such indexes (or reporting services) in addition to the Funds'
Prospectuses to obtain a more complete view of each Portfolio's performance
before investing. Of course, when comparing each Portfolio's performance to any
index, conditions such as composition of the index and prevailing market
conditions should be considered in assessing the significance of such companies.
Unmanaged indexes may assume the reinvestment of dividends but generally do not
reflect deductions for administrative and management costs and expenses.
When comparing funds using reporting services, or total return and yield, or
effective yield, investors should take into consideration any relevant
differences in funds such as permitted portfolio compositions and methods used
to value portfolio securities and compute offering price.
SAFEKEEPING OF ACCOUNT ASSETS
Title to assets of the Separate Account is held by Peoples Benefit. The assets
are kept physically segregated and held separate and apart from Peoples
Benefit's General Account assets. The General Account contains all of the assets
of Peoples Benefit. Records are maintained of all purchases and redemptions of
eligible Portfolio shares held by each of the Subaccounts and the General
Account.
CONFLICTS OF INTEREST WITH OTHER SEPARATE ACCOUNTS
The Portfolios may be made available to registered separate accounts offering
variable annuity and variable life products of Peoples Benefit or other
insurance companies. Although Peoples Benefit believes it is unlikely, a
material conflict could arise between the interests of the Separate Account and
one or more of the other participating separate accounts. In the event a
material conflict does exist, the affected insurance companies agree to take any
necessary steps, including removing their separate accounts from the Fund if
required by law, to resolve the matter. See the Fund's prospectus for more
information.
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PEOPLES BENEFIT
The Company is a direct subsidiary of Monumental Life Insurance Company, Capital
Liberty, L.P., and Commonwealth General Corporation, which, respectively, have
76.3%, 20%, and 3.7% interests in the Company. Monumental Life Insurance Company
is a direct subsidiary of Capital General Development Corporation and First AUSA
Life Insurance Company, which, respectively, have 73.23% and 26.77% interests in
Monumental Life Insurance Company. Monumental Life Insurance Company and
Commonwealth General Corporation have, respectively, 99% and 1% interests in
Capital Liberty, L.P. Commonwealth General Corporation is a wholly owned
subsidiary of AEGON USA, Inc. Capital General Development Corporation is a
wholly owned subsidiary of Commonwealth General Corporation. First AUSA Life
Insurance Company is a wholly owned subsidiary of AEGON USA, Inc.
The Company is a wholly owned indirect subsidiary of AEGON USA, Inc., which in
turn is wholly owned by AEGON U.S. Holding Corporation, a wholly owned
subsidiary of AEGON International N.V. AEGON International N.V. is a wholly
owned subsidiary of AEGON N.V. Vereniging AEGON (a Netherlands membership
association) has a 53.63% interest in AEGON N.V.
The Company was formerly known as National Home Life Assurance Company, until
July 1, 1995, when it changed its name to Providian Life and Health Insurance
Company. On October 1, 1998, it changed its name to Peoples Benefit Life
Insurance Company.
TAXES
Peoples Benefit is taxed as a life insurance company under Part I of Subchapter
L of the Internal Revenue Code. Since the Separate Account is not a separate
entity from Peoples Benefit and its operations form a part of Peoples Benefit,
the Separate Account will not be taxed separately as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. Investment income and
realized capital gains on the assets of the Separate Account are reinvested and
taken into account in determining the Accumulated Value. Under existing federal
income tax law, the Separate Account's investment income, including realized net
capital gains, is not taxed to Peoples Benefit. Peoples Benefit reserves the
right to make a deduction for taxes should they be imposed with respect to such
items in the future.
Under present laws, Peoples Benefit will incur state or local taxes in several
states. At the present, Peoples Benefit does not charge the Contract Owner for
these taxes. If there is a change in state or local tax laws, Peoples Benefit
may make charges for such taxes. Peoples Benefit does not expect to incur any
federal income tax liability attributable to investment income or capital gains
retained as part of the reserves under the Contracts. Based upon these
expectations, no charge is currently being made to the Separate Account for
corporate federal income taxes that may be attributable to the Separate Account.
Peoples Benefit will periodically review the question of a charge to the
Separate Account for corporate federal income taxes related to the Separate
Account. Such a charge may be made in future years for any federal income taxes
Peoples Benefit incurs. This might become necessary if Peoples Benefit
ultimately determines that its tax treatment is not what it currently believes
it to be, if there are changes in the federal income tax treatment of annuities
at the corporate level, or if there is a change in Peoples Benefit's tax status.
If Peoples Benefit should incur federal income taxes attributable to investment
income or capital gains retained as part of the reserves under the Contracts,
the Accumulated Value of the Contract would be correspondingly adjusted by any
provision or charge for such taxes.
STATE REGULATION OF PEOPLES BENEFIT
Peoples Benefit is a stock life insurance company organized under the laws of
Missouri, and is subject to regulation by the Missouri State Department of
Insurance. An annual statement is filed with the Missouri Commissioner of
Insurance on or before March 1st of each year covering the operations and
reporting on the financial condition of Peoples Benefit as of December 31st of
the preceding calendar year. Periodically, the Missouri Commissioner of
Insurance examines the financial condition of Peoples Benefit, including the
liabilities and reserves of the Separate Account.
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RECORDS AND REPORTS
All records and accounts relating to the Separate Account will be maintained by
Peoples Benefit. As presently required by the Investment Company Act of 1940 and
regulations promulgated thereunder, Peoples Benefit will mail to all Contract
Owners at their last known address of record, at least semi-annually, reports
containing such information as may be required under that Act or by any other
applicable law or regulation. Contract Owners will also receive confirmation of
each financial transaction and any other reports required by law or regulation.
DISTRIBUTION OF THE CONTRACTS
AFSG Securities Corporation ("AFSG"), formerly Providian Securities Corporation,
the principal underwriter of the Contract, is ultimately a wholly-owned
subsidiary of AEGON N.V. AFSG is registered with the SEC under the Securities
Exchange Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. Commissions and expense allowance
payments not to exceed, in the aggregate, 6.75% of Purchase Payments may be paid
to entities which sell the Contract. Additional payments may be made for other
services not directly related to the sale of the Contract.
The Contract is offered to the public through brokers licensed under the federal
securities laws and state insurance laws that have entered into agreements with
AFSG. The offering of the Contract is continuous and AFSG does not anticipate
discontinuing the offering of the Contract. However, AFSG does reserve the right
to discontinue the offering of the Contract.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Separate Account is a party or to
which the assets of the Separate Account are subject. Peoples Benefit is not
involved in any litigation that is of material importance in relation to its
total assets or that relates to the Separate Account.
OTHER INFORMATION
A Registration Statement has been filed with the Securities and Exchange
Commission, under the Securities Act of 1933 as amended, with respect to the
Contract discussed in this Statement of Additional Information. Not all of the
information set forth in the Registration Statement, amendments and exhibits
thereto has been included in this Statement of Additional Information.
Statements contained in this Statement of Additional Information concerning the
content of the Contract and other legal instruments are intended to be
summaries. For a complete statement of the terms of these documents, reference
should be made to the instruments filed with the Securities and Exchange
Commission.
FINANCIAL STATEMENTS
The audited financial statements of certain subaccounts of the Separate Account
which are available for investment by Advisor's Edge Contract Owners for the
year ended December 31, 1998, and for each of the two years in the period then
ended, including the Report of Independent Auditors thereon, are included in
this Statement of Additional Information.
The audited statutory-basis financial statements of Peoples Benefit as of
December 31, 1998, and 1997, and for each of the three years in the period ended
December 31, 1998, including the Reports of Independent Auditors thereon, are
included in this Statement of Additional Information. They should be
distinguished from the financial statements of the subaccounts of the Separate
Account which are available for investment by Advisor's Edge Contract Owners and
should be considered only as bearing on the ability of Peoples Benefit to meet
its obligations under the Contracts. They should not be considered as bearing on
the investment performance of the assets held in the Separate Account.
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