<PAGE> 1
Filed Pursuant to Rule 497(a)
Registration No. 333-53673
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR
VARIABLE LIFE INSURANCE POLICY
ISSUED BY
GENERAL AMERICAN LIFE INSURANCE COMPANY
700 MARKET STREET ST. LOUIS, MO 63101 (314) 231-1700
This Prospectus describes a flexible premium joint and last survivor variable
life insurance Policy ("the Policy") offered by General American Life
Insurance Company ("General American" or "the Company"). The Policy is
designed to provide lifetime insurance protection and at the same time
provide maximum flexibility to vary premium payments and change the level of
death benefits payable under the Policy. This flexibility allows an Owner to
provide for changing insurance needs under a single insurance policy. An
Owner also has the opportunity to allocate Net Premiums among several
investment portfolios with different investment objectives.
The Policy provides for: (1) a Cash Surrender Value that can be obtained by
surrendering the Policy; (2) Policy Loans; and (3) a death benefit payable at
the death of the Last Insured. As long as a Policy remains in force before
the younger Insured's Attained Age 100, the death benefit will not be less
than the current Face Amount of the Policy. A Policy will remain in force so
long as its Cash Surrender Value is sufficient to pay certain monthly charges
imposed in connection with the Policy.
After the end of the "Right to Examine Policy" period, Net Premiums may be
allocated to one or more of the Divisions of General American Separate
Account Eleven ("the Separate Account") or in certain contracts to General
American's General Account. If Net Premiums are allocated to the Separate
Account, the amount of the Cash Value will vary to reflect the investment
performance of the investment Divisions selected by the Owner, the Policy may
lapse, and, depending on the death benefit option elected, the amount of the
death benefit above the minimum may also vary with that investment
performance. The Owner bears the entire investment risk for all amounts
allocated to the Separate Account; there is no minimum guaranteed Cash Value.
Divisions of the Separate Account invest in corresponding Funds from the
following open-end, diversified management investment companies: General
American Capital Company, Russell Insurance Funds, American Century Variable
Portfolios, J.P. Morgan Series Trust II, Variable Insurance Products Fund,
Variable Insurance Products Fund II, and Van Eck Worldwide Insurance Trust.
Funds offered from General American Capital Company include the S & P 500
Index Fund, the Money Market Fund, the Bond Index Fund, the Managed Equity
Fund, the Asset Allocation Fund, the International Index Fund, the Mid-Cap
Equity Fund, and the Small-Cap Equity Fund. Funds offered from Russell
Insurance Funds include the Multi-Style Equity Fund, the Aggressive Equity
Fund, the Non-U.S. Fund, and the Core Bond Fund. Funds offered from
American Century Variable Portfolios include the Income & Growth Fund, the
International Fund, and the Value Fund. Funds offered from J.P. Morgan
Series Trust II include the Bond Portfolio and the Small Company Portfolio.
Funds offered from Variable Insurance Products Fund include the Equity-Income
Portfolio, the Growth Portfolio, the High Income Portfolio, and the Overseas
Portfolio. The Fund offered from Variable Insurance Products Fund II is the
Asset Manager Portfolio. The Funds offered from Van Eck Worldwide Insurance
Trust are the Worldwide Hard Assets Fund and the Worldwide Emerging Markets
Fund. A full description of the Funds, including the investment policies,
restrictions, risks, and charges is contained in the Prospectus of each Fund.
It may not be advantageous to purchase a Policy as a replacement for another
type of life insurance or as a means to obtain additional insurance
protection if the purchaser already owns another flexible premium joint and
last survivor variable life insurance policy.
This Prospectus must be accompanied by current Prospectuses for each Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Please read this Prospectus carefully and retain it for future reference.
The date of this Prospectus is July 1, 1998. The Policies are not available
in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER, SALESMAN, OR OTHER PERSON
IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON.
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<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<S> <C>
Definitions 1
Summary 2
The Company and the Separate Account 8
The Company
The Separate Account
General American Capital Company
Russell Insurance Funds
American Century Variable Portfolios
J.P. Morgan Series Trust II
Variable Insurance Products Fund
Variable Insurance Products Fund II
Van Eck Worldwide Insurance Trust
Addition, Deletion, or Substitution of Investments 12
Policy Benefits 12
Death Benefit
Cash Value
Policy Rights 16
Loans
Surrender, Partial Withdrawals and Pro Rate Surrender
Transfers
Portfolio Rebalancing
Dollar Cost Averaging
Right to Examine Policy
Death Benefit at Attained Age 100
Payment and Allocation of Premiums 21
Issuance of a Policy
Premiums
Allocation of Net Premiums and Cash Value
Policy Lapse and Reinstatement
Charges and Deductions 23
Premium Expense Charges
Monthly Deduction
Contingent Deferred Sales Charge
Separate Account Charges
Dividends 27
The General Account 27
General Matters 28
Distribution of the Policies 31
Federal Tax Matters 32
Unisex Requirements Under Montana Law 35
Safekeeping of the Separate Account's Assets 35
Voting Rights 35
State Regulation of the Company 36
Management of the Company 37
Legal Matters 39
Legal Proceedings 40
Experts 40
Additional Information 40
Financial Statements 40
Appendix A - Illustration of Death Benefits and Cash Values 42
</TABLE>
<PAGE> 3
DEFINITIONS
ATTAINED AGE - The Issue Age of an Insured plus the number of completed
Policy Years.
BENEFICIARY - The person(s) named in the application or by later
designation to receive Policy proceeds in the event of the Last Insured's
death. A Beneficiary may be changed as set forth in the Policy and this
Prospectus.
CASH VALUE - The total amount that a Policy provides for investment at any
time. It is equal to the total of the amounts credited to the Owner in the
Separate Account and the General Account, including the Loan Account.
CASH SURRENDER VALUE - The Cash Value of a Policy on the date of
surrender, less any Indebtedness, and less any surrender charges.
DIVISION - A subaccount of the Separate Account. Each Division invests
exclusively in the shares of a corresponding Fund of either General American
Capital Company, Russell Insurance Funds, American Century Variable
Portfolios, J.P. Morgan Series Trust II, Variable Insurance Products Fund,
Variable Insurance Products Fund II, or Van Eck Worldwide Insurance Trust.
EFFECTIVE DATE - The date as of which insurance coverage begins under a
policy.
FACE AMOUNT - The minimum death benefit under the Policy so long as the
Policy remains in force.
FUND - A separate investment Portfolio of either General American Capital
Company, Russell Insurance Funds, American Century Variable Portfolios, J.P.
Morgan Series Trust II, Variable Insurance Products Fund, Variable Insurance
Products Fund II, or Van Eck Worldwide Insurance Trust. Although sometimes
referred to elsewhere as "Portfolios," they are referred to herein as
"Funds," except where "Portfolio" is part of their name.
GENERAL ACCOUNT -The assets of the Company other than those allocated to
the Separate Account or any other separate account. The Loan Account is part
of the General Account.
HOME OFFICE - The service office of General American Life Insurance
Company, the mailing address of which is P.O. Box 14490, St. Louis, Missouri
63178.
INDEBTEDNESS - The sum of all unpaid Policy Loans and accrued interest on
loans.
INSURED - The persons whose lives are insured under the Policy.
INVESTMENT START DATE - The date the initial premium is applied to the
General Account and/or the Divisions of the Separate Account. This date is
the later of the Issue Date or the date the initial premium is received at
General American's Home Office.
ISSUE AGE - The age of each Insured at his or her nearest birthday as of
the date the Policy is issued.
ISSUE DATE - The date from which Policy Anniversaries, Policy Years, and
Policy Months are measured.
LAST INSURED - The Insured whose death succeeds the death of all other
Insureds under the Policy.
LOAN ACCOUNT - The account of the Company to which amounts securing Policy
Loans are allocated. The Loan Account is part of General American's General
Account.
LOAN SUBACCOUNT - A Loan Subaccount exists for the General Account and for
each Division of the Separate Account. Any Cash Value transferred to the
Loan Account will be allocated to the appropriate Loan Subaccount to reflect
the origin of the Cash Value. At any point in time, the Loan Account will
equal the sum of all the Loan Subaccounts.
MONTHLY ANNIVERSARY - The same date in each succeeding month as the Issue
Date except that whenever the Monthly Anniversary falls on a date other than
a Valuation Date, the Monthly Anniversary will be deemed the next Valuation
Date. If any Monthly Anniversary would be the 29th, 30th, or 31st day of a
month that does not have that number of days, then the Monthly Anniversary
will be the last day of that month.
NET PREMIUM - The premium less the premium expense charges (consisting of
the sales charge and the premium tax charge).
OWNER - The Owner of a Policy, as designated in the application or as
subsequently changed.
POLICY - The flexible premium joint and last survivor variable life insurance
Policy offered by the Company and described in this Prospectus.
POLICY ANNIVERSARY - The same date each year as the Issue Date.
POLICY MONTH - A month beginning on the Monthly Anniversary.
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POLICY YEAR - A period beginning on a Policy Anniversary and ending on the
day immediately preceding the next Policy Anniversary.
PORTFOLIO - see Fund.
PRO-RATA SURRENDER - A requested reduction of both the Face Amount and the
Cash Value by a given percentage.
SEC - The United States Securities and Exchange Commission.
SEPARATE ACCOUNT - General American Separate Account Eleven, a separate
investment account established by the Company to receive and invest the Net
Premiums paid under the Policy, and certain other variable life policies, and
allocated by the Owner to provide variable benefits.
TARGET PREMIUM - A premium calculated when a Policy is issued, based on
the Insureds' joint age, sex (except in unisex policies) and risk class. The
target premium is used to calculate the first year's premium expense charge,
the contingent deferred sales charge, and agent compensation under the
Policy. (See Charges and Deductions.)
VALUATION DATE - Each day that the New York Stock Exchange is open for
trading and the Company is open for business. The Company is not open for
business the day after Thanksgiving.
VALUATION PERIOD - The period between two successive Valuation Dates,
commencing at 4:00 p.m. (Eastern Standard Time) on a Valuation Date and
ending 4:00 p.m. on the next succeeding Valuation Date.
SUMMARY
THE FOLLOWING SUMMARY OF PROSPECTUS INFORMATION SHOULD BE READ IN
CONJUNCTION WITH THE DETAILED INFORMATION APPEARING ELSEWHERE IN
THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, THE DESCRIPTION OF
THE POLICIES CONTAINED IN THIS PROSPECTUS ASSUMES THAT A POLICY IS
IN FORCE AND THAT THERE IS NO OUTSTANDING INDEBTEDNESS.
THE POLICY. Under the flexible premium joint and last survivor variable
life insurance Policy described in this Prospectus, the Owner may, subject to
certain limitations, make premium payments in any amount and at any
frequency. The Policy is a life insurance contract with death benefits, Cash
Value, surrender rights, Policy Loan privileges, and other features
traditionally associated with life insurance. It is a "flexible premium"
Policy because, unlike traditional insurance policies, there is no fixed
schedule for premium payments. Although the Owner may establish a schedule
of premium payments ("planned premium payments"), failure to make the planned
premium payments will not necessarily cause a Policy to lapse nor will making
the planned premium payments guarantee that a Policy will remain in force.
Thus, an Owner may, but is not required to, pay additional premiums. This
flexibility permits an Owner to provide for changing insurance needs within a
single insurance policy.
The Policy is a "joint and last survivor" Policy because, unlike a single
life policy, it insures the lives of two Insureds, and provides a death
benefit that is payable upon the death of the second of the two Insureds. No
death benefit is payable upon the death of the first Insured to die.
The Policy is a "variable" Policy because, unlike the fixed benefits under an
ordinary life insurance contract, to the extent that Net Premiums are
allocated to the Separate Account, the Cash Value and, under certain
circumstances, the death benefit under a Policy may increase or decrease
depending upon the investment performance of the Divisions of the Separate
Account to which the Owner has allocated Net Premium payments. However, so
long as a Policy's Cash Surrender Value continues to be sufficient to pay the
monthly deductions, an Owner is guaranteed a minimum death benefit equal to
the Face Amount of his or her Policy, less any outstanding Indebtedness.
A Policy will lapse (and terminate without value) when the Cash Surrender
Value is insufficient to pay the next monthly deduction and a grace period of
62 days expires without an adequate payment being made by the Owner. (See
Payment and Allocation of Premiums - Policy Lapse and Reinstatement.)
THE SEPARATE ACCOUNT. After the end of the "Right to Examine Policy"
period, the Owner may allocate the Net Premiums to the Separate Account and,
if it is available, to the General Account. Amounts allocated to the
Separate Account are further allocated to one or more Divisions. Assets of
each Division are invested at net asset value in shares of a corresponding
Fund. (See The Company and the Separate Account,) An Owner may change future
allocations of Net Premiums at any time.
The option offered in connection with the Policies to allocate Net Premiums
or to transfer Cash Value to the General Account may not be made available,
at the Company's discretion, under all Policies. Further, the option may be
limited with respect to some Policies. The Company may, from time to time,
adjust the extent to which future premiums may be allocated to the General
Account in regard to any or
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all outstanding Policies. Such adjustments may not be uniform as to all
Policies.
Until the end of the "Right to Examine Policy" period (See Policy Rights -
Right to Examine Policy), all Net Premiums automatically will be allocated to
the Division that invests in the Money Market Fund. (See Payment and
Allocation of Premiums - Allocation of Net Premiums and Cash Value.)
To the extent Net Premiums are allocated to the Divisions of the Separate
Account, the Cash Value will, and the death benefit may, vary with the
investment performance of the chosen Division. To the extent Net Premiums
are allocated to the General Account, the Cash Value will accrue interest at
a guaranteed minimum rate. (See The General Account.) Thus, depending upon
the allocation of Net Premiums, investment risk over the life of a Policy may
be borne by the Owner, by the Company, or by both.
Subject to certain restrictions, an Owner may transfer Cash Values among the
Divisions of the Separate Account or, it available, between the Separate
Account and the General Account. Currently, no transaction charge is assessed
for the first twelve requested transfers or partial withdrawals in a Policy
Year. A charge of $25 applies to requested transfers or partial withdrawals
in excess of twelve. The Company reserves the right to revoke or modify the
transfer privilege. (See Policy Rights - Transfers.)
CHARGES AND DEDUCTIONS. A premium expense charge will be deducted from
each premium payment prior to allocation. The premium expense charge
consists of a sales charge and a charge to cover premium taxes and federal
taxes. The sales charge will never exceed the following levels:
<TABLE>
<S> <C>
Policy Year 1 15% of premium up to Target
5% of premium above Target
Policy Years 2-10 5% of all premium paid
Policy Years 11+ 2% of all premium paid
</TABLE>
For policies issued in the state of Oregon, the amounts shown above are
increased by 2%.
In addition to the sales charges shown above, there is a premium tax charge
in all policy years. This charge varies by state or other jurisdiction and
provides a pass-through of the actual premium tax (if any) incurred as a
result of taxes imposed by the state or other jurisdiction. State premium
taxes currently range from 0% to 3.5% (4% in Puerto Rico), with an average of
approximately 2.1%. We reserve the right to change the premium tax charge as
a result of rate changes by the governing jurisdiction. There is a federal
tax charge designed to pass through the equivalent of the federal tax
consequences applicable to the policy. The federal tax charge is currently
1.3% of premium paid, and is guaranteed not to increase except to the extent
of any increases in the federal tax. (See Charges and Deductions - Premium
Expense Charges.)
A Contingent Deferred Sales Charge (CDSC or Surrender Charge) to compensate
for sales expenses will also be assessed against the Cash Value under a
Policy upon a surrender, a lapse, a partial withdrawal, or Pro-Rata
Surrender. The CDSC will never exceed 45% of the annual Target Premium
attributable to the base policy. (See Policy Rights - Surrender, Partial
Withdrawals, and Pro-Rata Surrender; Policy Benefits - Death Benefit; and
Charges and Deductions - Contingent Deferred Sales Charge.) Reductions in
the Contingent Deferred Sales Charge are available in some situations. (See
Adjustment of Charges.)
On each Monthly Anniversary, the Cash Value will be reduced by a monthly
deduction. The monthly deduction includes an administrative charge which is
generally $25 per month for each Policy Month during the first Policy Year,
and $6 per month for each Policy Month beginning in the second Policy Year.
During the first ten Policy Years we generally make a deduction for a
selection and issue expense charge. This amount ranges from about 6 cents to
one dollar per $1,000 of face amount, and varies by the Insureds' joint age,
sex, and risk class. (See Charges and Deductions - Monthly Deduction.) A
monthly charge is also made for the cost of insurance, and the cost of any
additional benefits provided by rider. (See Charges and Deductions - Monthly
Deduction.)
A daily charge based on a percentage of the net assets of each Division of
the Separate Account will be imposed for the Company's assumption of certain
mortality and expense risks incurred in connection with the Policies. The
charge will not exceed an amount equal to the following effective annual
charges:
<TABLE>
<S> <C>
Policy Years 1-10 .55% of net Separate Account assets
Policy Years 11-20 .45% of net Separate Account assets
Policy Years 21+ .35% of net Separate Account Assets
</TABLE>
This charge is not deducted from the Cash Value, but rather is applied to the
calculation of the net investment factor. (See CHARGES AND DEDUCTIONS -
SEPARATE ACCOUNT CHARGES.)
The Company may make a charge for any taxes or economic burden resulting
from the application of the tax laws that it determines to be properly
attributable to the Separate Account or to the Policy. (See Federal Tax
Matters.)
The operating expenses of the Separate Account are paid by General American.
Investment Advisory fees and other operating expenses of the Funds are paid
by the Funds and are reflected in the value of the
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assets of the corresponding Division of the Separate Account. For a
description of these charges, see Charges and Deductions--Separate Account
Charges.
The following chart shows the operating expenses of the Funds as reported for
the fiscal year ending December 31, 1997:
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
Annual Fund Operating Expenses<F1>
As a Percentage of Average Net Assets
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
INVESTMENT
FUND ADVISORY / OTHER EXPENSES TOTAL
MANAGEMENT
FEE
- --------------------------------------------------------------------------------------------------------------------
GENERAL AMERICAN CAPITAL COMPANY
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
S&P 500 Index Fund .25% .05% .30%
- --------------------------------------------------------------------------------------------------------------------
Money Market Fund .125% .08% .205%
- --------------------------------------------------------------------------------------------------------------------
Bond Index Fund .25% .05% .30%
- --------------------------------------------------------------------------------------------------------------------
Managed Equity Fund .40%<F2> .10% .50%
- --------------------------------------------------------------------------------------------------------------------
Asset Allocation Fund .50% .10% .60%
- --------------------------------------------------------------------------------------------------------------------
International Index Fund .50%<F3> .30% .80%
- --------------------------------------------------------------------------------------------------------------------
Mid-Cap Equity Fund .55%<F4> .10% .65%
- --------------------------------------------------------------------------------------------------------------------
Small-Cap Equity Fund .25% .05% .30%
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
RUSSELL INSURANCE FUNDS
(AMOUNTS SHOWN ARE AFTER FEE WAIVERS AND EXPENSE REIMBURSEMENTS DESCRIBED BELOW.)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Multi-Style Equity Fund .09%<F5> .83% .92%<F5>
- --------------------------------------------------------------------------------------------------------------------
Aggressive Equity Fund .00%<F6> 1.25% 1.25%<F6>
- --------------------------------------------------------------------------------------------------------------------
Non-U.S. Fund .00%<F7> 1.30% 1.30%<F7>
- --------------------------------------------------------------------------------------------------------------------
Core Bond Fund .00%<F8> .80% .80%<F8>
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
AMERICAN CENTURY VARIABLE PORTFOLIOS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income & Growth Fund .70% .00% .70%
- --------------------------------------------------------------------------------------------------------------------
International Fund 1.50% .00% 1.50%
- --------------------------------------------------------------------------------------------------------------------
Value Fund 1.00% .00% 1.00%
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
J.P. MORGAN SERIES TRUST II
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bond Portfolio .30% .45% .75%
- --------------------------------------------------------------------------------------------------------------------
Small Company Portfolio .60% .55% 1.15%
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity-Income Portfolio .50% .08% .58%
- --------------------------------------------------------------------------------------------------------------------
Growth Portfolio .60% .09% .69%
- --------------------------------------------------------------------------------------------------------------------
Overseas Portfolio .75% .17% .92%
- --------------------------------------------------------------------------------------------------------------------
High Income Portfolio .59% .12% .71%
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Manager .55% .10% .65%
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
VAN ECK WORLDWIDE INSURANCE TRUST
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Worldwide Hard Assets Fund 1.00% .00% 1.00%
- --------------------------------------------------------------------------------------------------------------------
Worldwide Emerging Markets Fund 1.50% .00% 1.50%
- --------------------------------------------------------------------------------------------------------------------
<FN>
<F1> The Fund expenses shown above are assessed at the underlying Fund
level and are not direct charges against the Separate Account assets
or reductions from the Policy's Cash Value. These underlying Fund
Expenses are taken into consideration in computing each Fund's net
asset value, which is used to calculate the unit values in the Separate
Account. The management fees and other expenses are more fully
described in the prospectus of each individual Fund. The information
relating to the Fund expenses was provided by the Fund and was not
independently verified by General American. Except as otherwise
specifically noted, the management fees and other expenses are not
currently subject to fee waivers or expense reimbursements.
<F2> The fees charged by the Managed Equity Fund are stated as a series
of annual percentages of the average daily value of the net assets of
the Fund. The percentages decrease with respect to assets of the Fund
above certain amounts, as follows: First $10 million, 0.40%; Next $20
million, 0.30%; Balance over $30 million, 0.25%.
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<PAGE> 7
<F3> The fees charged by the International Index Fund are stated as a
series of annual percentages of the average daily value of the net assets
of the Funds. The percentages decrease with respect to assets of the
Fund above certain amounts, as follows: First $10 million, 0.50%; Next
$20 million, 0.40%; Balance over $20 million, 0.30%.
<F4> The fees charged by the Mid-Cap Equity Fund are stated as a series
of annual percentages of the average daily value of the net assets of
the Funds. The percentages decrease with respect to assets of the Fund
above certain amounts, as follows: First $10 million, 0.55%; Next $10
million, 0.45%; Balance over $20 million, 0.40%.
<F5> The Manager has voluntarily agreed to waive a portion of its 0.78%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 0.92% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 0.92% of
average daily net assets on an annual basis. The management fee
waivers and reimbursements are intended to be in effect for 1998, but
may be revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been
0.78%, and total Fund expenses would have been 1.61% of average daily net
assets.
<F6> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 1.25% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 1.25% of
average daily net assets on an annual basis. The management fee
waivers and reimbursements are intended to be in effect for 1998, but
may be revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been 0.95%,
other expenses would have been 1.27%, and total Fund expenses would have been
2.22% of average daily net assets.
<F7> The Manager has voluntarily agreed to waive a portion of its 0.95%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 1.30% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 1.30% of
average daily net assets on an annual basis. The management fee
waivers and reimbursements are intended to be in effect for 1998, but
may be revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been 0.95%,
other expenses would have been 2.70%, and total Fund expenses would have been
3.65% of average daily net assets.
<F8> The Manager has voluntarily agreed to waive a portion of its 0.60%
management fee, up to the full amount of that fee, equal to the amount
by which the Fund's total operating expenses exceed 0.80% of the Fund's
average daily net assets on an annual basis, and to reimburse the Fund
for all remaining expenses after fee waivers which exceed 0.80% of
average daily net assets on an annual basis. The management fee
waivers and reimbursements are intended to be in effect for 1998, but
may be revised or eliminated at any time thereafter without notice to
shareholders. Absent the waiver, the management fee would have been 0.60%,
other expenses would have been 1.70%, and total Fund expenses would have been
2.30% of average daily net assets.
</TABLE>
There are no transaction charges to cover the administrative costs of
processing the first twelve partial withdrawals or requested transfers of
Cash Value between Divisions of the Separate Account or the General Account
in any Policy Year. There is a charge of $25 for each partial withdrawal or
requested transfer in excess of twelve. (See Payment and Allocation of
Premiums - Allocation of Net Premiums and Cash Value; Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender; and The General
Account.)
PREMIUMS. An Owner has considerable flexibility concerning the amount and
frequency of premium payments. A Policy will not become effective until the
Owner has paid an initial premium equal to one-twelfth (1/12) of the "Minimum
Premium" for the Policy. This amount will be different for each Policy.
Thereafter, an Owner may, subject to certain restrictions, make premium
payments in any amount and at any frequency. The Owner may also determine a
planned premium payment schedule. The schedule will provide for a premium
payment of a level amount at a fixed interval over a specified period of
time. An Owner need not, however, adhere to the planned premium payment
schedule. For policies issued as a result of a term conversion from certain
General American term policies, the Company requires the Owner to pay an
initial premium, which combined with conversion credits given, if any, will
equal one full "Minimum Premium" for the Policy. (See Payment and Allocation
of Premiums.)
If, during the first five Policy Years, the sum of all premiums paid on the
Policy, reduced by any partial withdrawals and any outstanding loan balance,
is greater than or equal to the sum of the no lapse monthly premiums for the
elapsed months since the Issue Date, the Policy will not lapse as a result of
a Cash Value less any loans, loans interest due, and any surrender charge
being insufficient to pay the monthly deduction. A Policy will lapse only
when the Cash Surrender Value is insufficient to pay the next monthly
deduction (See Charges and
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<PAGE> 8
Deductions - Monthly Deduction.) and a grace period expires without a
sufficient payment by the Owner. (See Payment and Allocation of Premiums -
Policy Lapse and Reinstatement.)
DEATH BENEFIT. A death benefit is payable to the named Beneficiary when
the Last Insured under a Policy dies. Three death benefit options are
available. Under Death Benefit Option A, the death benefit is the Face
Amount of the Policy or, if greater, the applicable percentage of Cash Value.
Under Death Benefit Option B, the death benefit is the Face Amount of the
Policy plus the Cash Value or, if greater, the applicable percentage of Cash
Value. Under Death Benefit Option C, the death benefit is the Face Amount of
the Policy or, if greater, the Cash Value multiplied by the Attained Age
factor for the younger Insured. So long as the Policy remains in force,
prior to the younger Insured's Attained Age 100 the minimum death benefit
under any death benefit option will be at least the current Face Amount. The
death benefit will be increased by any unpaid dividends determined prior to
the Last Insured's death, and by the amount of the cost of insurance for the
portion of the month from the date of death of the Last Insured to the end of
the month, and reduced by any outstanding Indebtedness. The death benefit
will be paid according to the settlement options available at the time of
death. (See Policy Benefits - Death Benefit.)
The minimum Face Amount at issue is generally $100,000 under the Company's
current rules. Subject to certain restrictions, the Owner may change the
Face Amount and the death benefit option. In certain cases evidence of
insurability may be required. (See Change in Death Benefit Option, and
Change In Face Amount.)
Additional insurance benefits are offered under the Policy. (See General
Matters - Additional Insurance Benefits.) The cost of these additional
insurance benefits will be deducted from the Cash Value as part of the
monthly deduction. (See Charges and Deductions - Monthly Deduction.)
CASH VALUE. The Policies provide for a Cash Value equal to the total of
the amounts credited to the Owner in the Separate Account, the Loan Account
(securing Policy Loans) and in certain contracts, the General Account. A
Policy's Cash Value will reflect the amount and frequency of Net Premium
payments, the investment performance of any selected Divisions of the
Separate Account, any Policy Loans and related interest, any partial
withdrawals, and the charges imposed in connection with the Policy. (See
Policy Benefits - Cash Value.) There is no minimum guaranteed Cash Value.
POLICY LOANS. An Owner may borrow against the Cash Value of a Policy. The
maximum amount that may be borrowed under a Policy ("the Loan Value") is the
Cash Value of the Policy on the date the loan request is received, plus
interest expected to be earned on the loan balance to the next Policy
Anniversary at the General Account's guaranteed interest rate, less loan
interest to the next Policy Anniversary, less any outstanding Indebtedness,
less any surrender charges, less monthly deductions to the next loan interest
due date. Loan interest is payable on each Policy Anniversary and all
outstanding Indebtedness will be deducted from proceeds payable at the Last
Insured's death, upon the exercise of a settlement option, or upon surrender.
A Policy loan will be allocated among the General Account (if available) and
the various Divisions of the Separate Account. When a loan is allocated to
the Divisions of the Separate Account, a portion of the Policy's Cash Value
in the Divisions of the Separate Account sufficient to secure the loan will
be transferred to the Loan Account as security for the loan. Therefore, a
loan may have impact on the Policy's Cash Value even if it is repaid. A
Policy Loan may be repaid in whole or in part at any time while the Policy is
in force. (See Policy Rights - Loans.) Loans taken from, or secured by, a
Policy may have Federal income tax consequences. (See Federal Tax Matters.)
SURRENDER, PARTIAL WITHDRAWALS, AND PRO-RATA SURRENDER. At any time
that a Policy is in force, an Owner may elect to surrender the Policy and
receive its Cash Surrender Value plus the value of dividends (if any)
determined prior to the surrender. After the first year, an Owner may also
request a partial withdrawal of the Cash Surrender Value of the Policy. When
the death benefit is not based on an applicable percentage of the Cash Value,
a partial withdrawal reduces the death benefit payable under the Policy by an
amount equal to the reduction in the Policy's Cash Value unless the
withdrawal is made under the terms of the anniversary partial withdrawal
rider. (See General Matters - Additional Insurance Benefits.) An Owner may
also request a Pro-Rata Surrender of the Policy. (See Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender.) A surrender, partial
withdrawal, or Pro-Rata Surrender may have Federal income tax consequences.
(See Federal Tax Matters.)
RIGHT TO EXAMINE POLICY. The Owner has a limited right to return a
Policy for cancellation within 20 days after receiving it (30 days if the
Owner is a resident of California and is age 60 or older), or within 45 days
after the application is signed, whichever is later (or such longer period,
if any, as required by law). If a Policy is canceled within this time
period, a refund will be paid which will equal all
6
<PAGE> 9
premiums paid under the Policy except in Kansas. (See Policy Rights - Right to
Examine Policy.)
ILLUSTRATIONS OF DEATH BENEFITS AND CASH SURRENDER VALUES.
Illustrations in Appendix A show how death benefits and Cash Surrender Values
may vary based on certain rate of return assumptions and how these benefits
compare with amounts which would accumulate if premiums were invested to earn
interest at 5% compounded annually. If a Policy is surrendered in the early
Policy Years the Cash Surrender Value payable will be low as compared to
premiums accumulated at interest, and consequently the insurance protection
provided prior to surrender will be costly. You may make a written request
for a projection of illustrated future Cash Values and death benefits for a
nominal fee not to exceed $25.00.
TAX CONSEQUENCES OF THE POLICY. If a Policy is issued on the basis of a
standard premium class, while limited guidance exists, the Company believes
that the Policy should qualify as a life insurance contract for Federal
income tax purposes. However, if a Policy is issued on a substandard basis,
it is unclear whether or not such a Policy would qualify as a life insurance
contract for Federal income tax purposes. Assuming that the Policy qualifies
as a life insurance contract for Federal income tax purposes, the Company
believes the Cash Value of the Policy should be subject to the same Federal
income tax treatment as the Cash Value of a conventional fixed-benefit
contract. If so, the Owner is not considered to be in constructive receipt
of the Cash Value under the Policy until there is a distribution. A change
of Owners, a surrender, a partial withdrawal, a Pro-Rata Surrender, a lapse
with outstanding Indebtedness, or an exchange may have tax consequences,
depending on the particular circumstances. (See Federal Tax Matters.)
A Policy may be treated as a "modified endowment contract" depending upon the
amount of premiums paid in relation to the death benefit. If the Policy is a
modified endowment contract, then all pre-death distributions, including
Policy Loans and due but unpaid loan interest, will be treated first as a
distribution of taxable income and then as a return of basis or investment in
the contract. In addition, prior to the Owner's age 59 1/2, taxable income
from such distributions generally will be subject to a 10% additional tax.
If the Policy is not a modified endowment contract, distributions generally
will be treated first as a return of basis or investment in the contract and
then as disbursing taxable income. Moreover, loans will not be treated as
distributions. Finally, neither distributions nor loans from a Policy that
is not a modified endowment contract are subject to the 10% additional tax.
(See Federal Tax Matters.)
DIVIDENDS. We do not anticipate that the Policy will share in the
divisible surplus of the Company in the form of a dividend. (See Dividends.)
* * *
This Prospectus describes only those aspects of the Policy that relate to the
Separate Account, except where General Account matters are specifically
mentioned. For a brief summary of the aspects of the Policy relating to the
General Account, see The General Account.
THE COMPANY AND THE SEPARATE ACCOUNT
The Company
General American Life Insurance Company ("General American" or "the Company")
was originally incorporated as a stock company in 1933. In 1936, General
American initiated a program to convert to a mutual life insurance company.
In 1997, General American's policyholders approved a reorganization of the
Company into a mutual holding company structure under which General American
became a stock company wholly owned by GenAmerica Corporation, an
intermediate stock holding company. GenAmerica is wholly owned by General
American Mutual Life Insurance Company, a mutual holding company organized
under Missouri law. The mutual holding company structure retains mutuality
as General American's ultimate parent company is wholly owned by General
American's policyholders.
General American is principally engaged in writing individual and group life
insurance policies and annuity contracts. As of December 31, 1997, it had
consolidated assets of approximately $24 billion. It is admitted to do
business in 49 states, the District of Columbia, Puerto Rico, and in ten
Canadian provinces. The principal offices of General American are located at
700 Market Street, St. Louis, Missouri 63101. The mailing address of General
American's service center ("the Home Office") is P.O. Box 14490, St. Louis,
Missouri 63178.
The Separate Account
General American Life Insurance Company Separate Account Eleven ("the
Separate Account") was established by General American as a separate
investment account on January 24, 1985 under Missouri law. The Separate
Account will receive and invest the Net Premiums paid under this Policy and
allocated to it. In addition, the Separate Account currently receives and
invests Net Premiums for other classes of flexible premium variable life
7
<PAGE> 10
insurance policies and might do so for additional classes in the future.
The Separate Account has been registered with the SEC as a unit investment
trust under the Investment Company Act of 1940 ("the 1940 Act") and meets the
definition of a "separate account" under Federal securities laws.
Registration with the SEC does not involve supervision of the management or
investment practices or policies of the Separate Account or General American
by the SEC.
The Separate Account currently is divided into twenty-four Divisions.
Divisions invest in corresponding Funds from one of seven open-end,
diversified management investment companies: (1) General American Capital
Company, (2) Russell Insurance Funds, (3) American Century Variable
Portfolios, (4) J.P. Morgan Series Trust II, (5) Variable Insurance Products
Fund, (6) Variable Insurance Products Fund II, and (7) Van Eck Worldwide
Insurance Trust. Income and both realized and unrealized gains or losses
from the assets of each Division of the Separate Account are credited to or
charged against that Division without regard to income, gains, or losses from
any other Division of the Separate Account or arising out of any other
business General American may conduct.
Although the assets of the Separate Account are the property of General
American, the assets in the Separate Account equal to the reserves and other
liabilities of the Separate Account are not chargeable with liabilities
arising out of any other business which General American may conduct. The
assets of the Separate Account are available to cover the general liabilities
of General American only to the extent that the Separate Account's assets
exceed its liabilities arising under the Policies. From time to time, the
Company may transfer to its General Account any assets of the Separate
Account that exceed the reserves and the Policy liabilities of the Separate
Account (which will always be at least equal to the aggregate Policy value
allocated to the Separate Account under the Policies). Before making any
such transfers, General American will consider any possible adverse impact
the transfer may have on the Separate Account.
General American Capital Company
General American Capital Company ("the Capital Company") is an open-end,
diversified management investment company which was incorporated in Maryland
on November 15, 1985, and commenced operations on October 1, 1987. Only the
Funds described in this section of the Prospectus are currently available as
investment choices for this Policy even though additional Funds may be
described in the prospectus for the Capital Company. Shares of Capital
Company are currently offered to separate accounts established by General
American Life Insurance Company and affiliates. The Capital Company's
investment adviser is Conning Asset Management Company ("the Adviser"), an
indirect, majority-owned subsidiary of General American. The adviser selects
investments for the Funds.
The investment objectives and policies of each Fund are summarized below:
S&P 500 INDEX FUND: The investment objective of this Fund is to
provide investment results that parallel the price and yield
performance of publicly-traded common stocks in the aggregate. The
Fund uses the Standard & Poor's Composite Index of 500 Stocks ("the
S&P Index") as its standard for performance comparison. The Fund
attempts to duplicate the performance of the S&P Index and includes
dividend income as a component of the Fund's total return. The Fund is
not managed by Standard & Poor's.
THE MONEY MARKET FUND: The investment objective of the Money Market
Fund is to obtain the highest level of current income which is
consistent with the preservation of capital and maintenance of
liquidity. The Fund invests primarily in high-quality, short-term
money market instruments. An investment in the Money Market Fund is
neither insured nor guaranteed by the U. S. Government.
BOND INDEX FUND: The investment objective of this Fund is to provide
a rate of return that reflects the performance of the publicly-traded
bond market as a whole. The Fund uses the Lehman Brothers
Government/Corporate Bond Index as its standard for performance
comparison.
MANAGED EQUITY FUND: The investment objective of this Fund is long-
term growth of capital, obtained by investing primarily in common
stocks. Securing moderate current income is a secondary objective.
ASSET ALLOCATION FUND: The investment objective of this Fund is a
high rate of long-term total return composed of capital growth and
income payments. Preservation of capital is the secondary objective
and chief limit on investment risk. The Fund will invest only in those
types of securities that the other Capital Company Funds may invest in.
The Asset Allocation Fund invests in a combination of common stocks,
bonds, or money market instruments in accordance with guidelines
established from time to time by Capital Company's Board of Directors.
8
<PAGE> 11
INTERNATIONAL INDEX FUND: The investment objective of this Fund is
to obtain investment results that parallel the price and yield
performance of publicly-traded common stocks in the Morgan Stanley
Capital International ("MSCI") Europe, Australia and Far East Index
("EAFE").
MID-CAP EQUITY FUND: The investment objective of this Fund is capital
appreciation. It pursues this objective by investing primarily
in common stocks of United States-based, publicly traded companies with
medium market capitalizations falling within the capitalization range
of the S&P Mid-Cap 400 at the time of the Fund's investment.
SMALL-CAP EQUITY FUND: The investment objective of this Fund is to
provide a rate of return that corresponds to the performance of the
common stock of small companies, while incurring a level of risk that
is generally equal to the risks associated with small company common
stock. The Fund attempts to duplicate the performance of the smallest
20% of companies, based on capitalization size, that are based in the
United States and listed on the New York Stock Exchange ("NYSE").
Russell Insurance Funds
Russell Insurance Funds ("RIF") is organized as a Massachusetts business
trust under a Master Trust Agreement dated July 11, 1996. RIF is authorized
to issue an unlimited number of shares evidencing beneficial interests in
different investment Funds, which interests may be offered in one or more
classes. RIF is a diversified open end management investment company,
commonly known as a "mutual fund." Frank Russell Company, which is a
consultant to RIF, has been primarily engaged since 1969 in providing asset
management consulting services to large corporate employee benefit funds.
Major components of its consulting services are: (i) quantitative and
qualitative research and evaluation aimed at identifying the most appropriate
investment management firms to invest large pools of assets in accord with
specific investment objectives and styles; and (ii) the development of
strategies for investing assets using "multi-style, multi-manager
diversification." This is a method for investing large pools of assets by
dividing the assets into segments to be invested using different investment
styles, and selecting money managers for each segment based upon their
expertise in that style of investment. General management of RIF is provided
by Frank Russell Investment Management Company, a wholly-owned subsidiary of
Frank Russell Company, which furnishes officers and staff required to manage
and administer RIF on a day-to-day basis.
The investment objectives and policies of each Fund are summarized below:
MULTI-STYLE EQUITY FUND: The investment objective of this Fund is
to provide income and capital growth by investing principally in equity
securities.
AGGRESSIVE EQUITY FUND: This Fund seeks to provide capital
appreciation by assuming a higher level of volatility than is
ordinarily expected from the Multi-Style Equity Fund while still
investing in equity securities.
NON-U.S. FUND: This Fund's objective is to provide favorable total
return and additional diversification for U.S. investors by investing
primarily in equity and fixed-income securities of non-U.S. companies,
and securities issued by non-U.S. governments.
CORE BOND FUND: This Fund's objective is to maximize total return,
through capital appreciation and income, by assuming a level of
volatility consistent with the broad fixed-income market. The Fund
invests in fixed-income securities.
American Century Variable Portfolios
American Century Variable Portfolios, Inc., a part of American Century
Investments, was organized as a Maryland corporation on June 4, 1987. It is
a diversified, open-end management investment company. Its business and
affairs are managed by its officers under the Direction of its Board of
Directors. American Century Investment Management, Inc. serves as the
investment manager of the fund.
The investment objective and policies of the Funds are summarized below:
INCOME & GROWTH FUND: The investment objective of this Fund is to
attain long-term growth of capital as well as current income. The Fund
pursues a total return and dividend yield that exceed those of the S&P
500 by investing in stocks of companies with strong dividend growth
potential. Dividends are paid monthly.
INTERNATIONAL FUND: This Fund seeks capital growth over time by
investing in common stocks of foreign companies considered to have
better-than-average prospects for appreciation. Because the Fund
invests in foreign securities, a higher degree of short-term price
volatility, or
9
<PAGE> 12
risk, is expected due to factors such as currency fluctuation and
political instability.
VALUE FUND: This Fund is a core equity fund that seeks long-term
capital growth. Income is a secondary objective. To pursue its
objectives, the fund invests primarily in equity securities of well-
established companies that are believed by management to be undervalued
at the time of purchase. Please note that this is an equity investment
and, by nature, may fluctuate in value.
J.P. Morgan Series Trust II
J.P. Morgan Series Trust II is an open-end diversified management investment
company organized as a Delaware Business Trust. The Trust's investment
adviser is J.P. Morgan Investment Management, Inc., a registered investment
adviser and a wholly owned subsidiary of J.P. Morgan & Co., Incorporated, a
bank holding company organized under the laws of Delaware.
The investment objective and policies of the Funds are summarized below:
BOND PORTFOLIO: This Fund seeks to provide a high total return
consistent with moderate risk of capital and maintenance of liquidity.
The Fund is designed for investors who seek a total return over time
that is higher than that generally available from a portfolio of short-
term obligations while acknowledging the greater price fluctuation of
longer-term instruments.
SMALL COMPANY PORTFOLIO: The investment objective of this Fund is
to provide high total return from a portfolio of equity securities of
small companies. The Fund invests at least 65% of the value of its
total assets in the common stock of small U.S. Companies primarily with
market capitalizations less than $1 billion. The Fund is designed for
investors who are willing to assume the somewhat higher risk of
investing in small companies in order to seek a higher return over time
than might be expected from a portfolio of stocks of large companies.
Variable Insurance Products Fund
Variable Insurance Products Fund ("VIP") is an open-end, diversified
management investment company organized as a Massachusetts business trust on
November 13, 1981. Only the Funds described in this section of the
Prospectus are currently available as investment choices for this Policy even
though additional Funds may be described in the prospectus for VIP. VIP
shares are purchased by insurance companies to fund benefits under variable
insurance and annuity policies. Fidelity Management & Research Company
("FMR") of Boston, Massachusetts is the Funds' Manager.
The investment objectives and policies of each Fund are summarized below:
EQUITY-INCOME PORTFOLIO: The investment objective of this Fund is
income, obtained by investing primarily in income-producing equity
securities. In choosing these securities, FMR will also consider the
potential for capital appreciation. The Fund's goal is to achieve a
yield which exceeds the composite yield on the securities comprising
the Standard & Poor's Composite Index of 500 Stocks.
GROWTH PORTFOLIO: The investment objective of this Fund is capital
appreciation. The Fund normally purchases common stocks, although its
investments are not restricted to any one type of security. Capital
appreciation may also be obtained from other types of securities,
including bonds and preferred stocks.
OVERSEAS PORTFOLIO: The investment objective of this Fund is long- term
growth of capital. The Fund invests primarily in foreign
securities. The Overseas Portfolio provides a means for investors to
diversify their own portfolios by participation in companies and
economies outside of the United States.
HIGH INCOME PORTFOLIO: The investment objective of this Fund is a
high level of current income. The Fund seeks to fulfill the objective
by investing primarily in high-yielding, lower-rated, fixed-income
securities, while also considering growth of capital. Lower-rated
securities, commonly referred to as "junk bonds," involve greater risk
of default or price change than securities assigned a higher quality
rating.
Variable Insurance Products Fund II
Variable Insurance Products Fund II ("VIP II") is an open-end, diversified
management investment company organized as a Massachusetts business trust on
March 21, 1988. Only the Fund described in this section of the Prospectus is
currently available as an investment choice for this Policy even though
additional Funds may be described in the prospectus for VIP II. VIP II
shares are purchased by insurance companies to fund benefits under variable
insurance and annuity policies. FMR is the Fund's manager.
The investment objective and policies of the Funds are summarized below:
10
<PAGE> 13
Asset Manager: The investment objective of this Fund is to seek a high total
return with reduced risk over the long-term by allocating its assets among
domestic and foreign stocks, bonds, and short-term fixed income instruments.
Van Eck Worldwide Insurance Trust
Van Eck Worldwide Insurance Trust ("Van Eck") is an open-end management
investment company organized as a Massachusetts business trust on January 7,
1987. Only the Funds described in this section of the Prospectus is
currently available as an investment choice for this Policy even though
additional Funds may be described in the prospectus for Van Eck. Shares of
Van Eck are offered only to separate accounts of various insurance companies
to support benefits of variable insurance and annuity policies. The assets
of Van Eck are managed by Van Eck Associates Corporation of New York, New
York.
The investment objectives and policies of the Fund are summarized below:
WORLDWIDE HARD ASSETS FUND: The investment objective of the Fund
is to seek long-term capital appreciation by investing in equity and
debt securities of companies engaged in the exploration, development,
production, and distribution of one or more of the following: (i)
precious metals, (ii) ferrous and non-ferrous metals, (iii) oil and
gas, (iv) forest products, (v) real estate, and (vi) other basic non-
agricultural commodities (together, "Hard Assets"). Current income is
not an objective.
WORLDWIDE EMERGING MARKETS FUND: The investment objective of
this Fund is to obtain long-term capital appreciation by investing in
equity securities in emerging markets around the world. The Fund
emphasizes primarily investment in countries that, compared to the
world's major economies, exhibit relatively low gross national product
per capita, as well as the potential for rapid economic growth.
THERE IS NO ASSURANCE THAT ANY OF THE FUNDS WILL ACHIEVE ITS
STATED OBJECTIVE. It is conceivable that in the future it may be
disadvantageous for Funds to offer shares to separate accounts of various
insurance companies to serve as the investment medium for their variable
products or for both variable life and annuity separate accounts to invest
simultaneously in a Fund. The Boards of Trustees of RIF, VIP, VIP II, and
Van Eck, the Boards of Directors of Capital Company, American Century, and
J.P. Morgan, the respective Advisers of each Fund, and the Company and any
other insurance companies participating in the Funds are required to monitor
events to identify any material irreconcilable conflicts that may possibly
arise, and to determine what action, if any, should be taken in response to
those events or conflicts. A more detailed description of the Funds, their
investment policies, restrictions, risks, and charges is in the prospectuses
for each Fund, which must accompany or precede this Prospectus and which
should be read carefully.
Addition, Deletion, or Substitution of Investments
The Company reserves the right, subject to compliance with applicable law, to
make additions to, deletions from, or substitutions for the shares that are
held by the Separate Account or that the Separate Account may purchase. The
Company reserves the right to eliminate the shares of any of the Funds and to
substitute shares of another Fund of Capital Company, RIF, VIP, VIP II, Van
Eck, American Century, J.P. Morgan or of another registered open-end
investment company if the shares of a Fund are no longer available for
investment or if in its judgment further investment in any Fund becomes
inappropriate in view of the purposes of the Separate Account. The Company
will not substitute any shares attributable to an Owner's interest in a
Division of the Separate Account without notice to the Owner and prior
approval of the SEC, to the extent required by the 1940 Act or other
applicable law. Nothing contained in this Prospectus shall prevent the
Separate Account from purchasing other securities for other series or classes
of policies, or from permitting a conversion between series or classes of
policies on the basis of requests made by Owners.
The Company also reserves the right to establish additional Divisions of the
Separate Account, each of which would invest in a new Fund with a specified
investment objective. New Divisions may be established when, in the sole
discretion of the Company, marketing needs or investment conditions warrant.
Any new Division will be made available to existing Owners on a basis to be
determined by the Company. To the extent approved by the SEC, the Company
may also eliminate or combine one or more Divisions, substitute one Division
for another Division, or transfer assets between Divisions if, in its sole
discretion, marketing, tax, or investment conditions warrant.
In the event of a substitution or change, the Company may, if it considers it
necessary, make such changes in the Policy by appropriate endorsement and
offer conversion options required by law, if any. The Company will notify
all Owners of any such changes.
If deemed by the Company to be in the best interests of persons having voting
rights under the Policy, and to the extent any necessary SEC approvals or
Owner
11
<PAGE> 14
votes are obtained, the Separate Account may be: (a) operated as a management
company under the 1940 Act; (b) de-registered under that Act in the event such
registration is no longer required; or (c) combined with other separate
accounts of the Company. To the extent permitted by applicable law, the
Company may also transfer the assets of the Separate Account associated with
the Policy to another separate account.
POLICY BENEFITS
Death Benefit
As long as the Policy remains in force (See Payment and Allocation of
Premiums - Policy Lapse and Reinstatement), the Company will, upon receipt at
its Home Office of proof of the Last Insured's death, pay the death benefit
in a lump sum. The amount of the death benefit payable will be determined at
the end of the Valuation Period during which the Last Insured's death
occurred. The death benefit will be paid to the surviving Beneficiary or
Beneficiaries specified in the application or as subsequently changed.
The Policy provides three death benefit options: "Death Benefit Option A,"
"Death Benefit Option B," and "Death Benefit Option C." The death benefit
under all options will never be less than the current Face Amount of the
Policy (less Indebtedness) as long as the Policy remains in force. (See
Payment and Allocation of Premiums - Policy Lapse and Reinstatement.) The
current minimum Face Amount is generally $100,000.
DEATH BENEFIT OPTION A. Under Death Benefit Option A, the death benefit
until the younger Insured reaches Attained Age 100 is the current Face Amount
of the Policy or, if greater, the applicable percentage of Cash Value on the
date of death. At the younger Insured's Attained Age 100 and above, the
death benefit is 101% of the Cash Value. The applicable percentage is 250%
for a younger Insured reaching Attained Age 40 or below on the Policy
Anniversary prior to the date of death. For younger Insureds with an a
Attained Age over 40 on that Policy Anniversary, the percentage is lower and
declines with age as shown in the Applicable Percentage of Cash Value Table
shown below. Accordingly, under Death Benefit Option A the death benefit
will remain level at the Face Amount unless the applicable percentage of Cash
Value exceeds the current Face Amount, in which case the amount of the death
benefit will vary as the Cash Value varies. (See Illustrations of Death
Benefits and Cash Values, Appendix A.)
DEATH BENEFIT OPTION B. Under Death Benefit Option B, the death benefit
until the younger Insured reaches Attained Age 100 is equal to the current
Face Amount plus the Cash Value of the Policy on the date of death or, if
greater, the applicable percentage of the Cash Value on the date of death.
At the younger Insured's Attained Age 100 and above, the death benefit is
101% of the Cash Value. The applicable percentage is the same as under Death
Benefit Option A: 250% for a younger Insured Attained Age 40 or below on the
Policy Anniversary prior to the date of death, and for younger Insureds with
an Attained Age over 40 on that Policy Anniversary the percentage declines as
shown in the Applicable Percentage of Cash Value Table shown below.
Accordingly, under Death Benefit Option B the amount of the death benefit
will always vary as the Cash Value varies (but will never be less than the
Face Amount). (See Illustrations of Death Benefits and Cash Values, Appendix
A.)
<TABLE>
- --------------------------------------------------------------------------
Applicable Percentage of Cash Value Table
For Younger Insureds Less Than Age 100<F*>
- --------------------------------------------------------------------------
<CAPTION>
Younger Insured Policy Account Multiple
Person's Age Percentage
- --------------------------------------------------------------------------
<S> <C>
40 or under 250%
- --------------------------------------------------------------------------
45 215%
- --------------------------------------------------------------------------
50 185%
- --------------------------------------------------------------------------
55 150%
- --------------------------------------------------------------------------
60 130%
- --------------------------------------------------------------------------
65 120%
- --------------------------------------------------------------------------
70 115%
- --------------------------------------------------------------------------
78 to 90 105%
- --------------------------------------------------------------------------
95 to 99 101%
- --------------------------------------------------------------------------
<FN>
<F*> For ages that are not shown on this table, the applicable percentage
multiples will decrease by a ratable portion for each full year.
</TABLE>
DEATH BENEFIT OPTION C. Under Death Benefit Option C, the death benefit
is equal to the current Face Amount of the Policy or, if greater, the Cash
Value on the date of death multiplied by the "Attained Age factor" for the
younger Insured (a list of sample Attained Age factors is shown in the Sample
Attained Age Factor Table below). At the younger Insured's Attained Age 100
and above, the death benefit is 101% of the Cash Value. Accordingly, under
Death Benefit Option C the death benefit will remain level at the Face Amount
unless the Cash Value multiplied by the younger Insured's Attained Age factor
exceeds the current Face Amount, in which case the amount of the death
benefit will vary as the Cash Value varies. (See Illustrations of Death
Benefits and Cash Values, Appendix A.)
12
<PAGE> 15
<TABLE>
- -------------------------------------------------------------------
Death Benefit Option C
Sample Attained Age Factor Table
Based on Male and Female Insureds
Both Age 35 at Issue, Standard Smoker Rates
- -------------------------------------------------------------------
<CAPTION>
Attained Age Lives Factor
- -------------------------------------------------------------------
<S> <C>
35 5.641840
- -------------------------------------------------------------------
40 4.640444
- -------------------------------------------------------------------
45 3.825569
- -------------------------------------------------------------------
50 3.166936
- -------------------------------------------------------------------
55 2.638797
- -------------------------------------------------------------------
60 2.220327
- -------------------------------------------------------------------
65 1.891312
- -------------------------------------------------------------------
70 1.640024
- -------------------------------------------------------------------
75 1.449651
- -------------------------------------------------------------------
80 1.314918
- -------------------------------------------------------------------
85 1.219345
- -------------------------------------------------------------------
90 1.152999
- -------------------------------------------------------------------
95 1.090450
- -------------------------------------------------------------------
100+ 1.010000
- -------------------------------------------------------------------
</TABLE>
CHANGES IN DEATH BENEFIT OPTION. If the Policy was issued with either
Death Benefit Option A or Death Benefit Option B, the death benefit option
may be changed. A request for change must be made to the Company in writing.
The effective date of such a change will be the Monthly Anniversary on or
following the date the Company receives the change request. A change in
death benefit option may have Federal income tax consequences. (See Federal
Tax Matters.)
A Death Benefit Option A Policy may be changed to have Death Benefit Option
B. The Face Amount will be decreased to equal the death benefit less the
Cash Value on the effective date of change. A Death Benefit Option B Policy
may be changed to have Death Benefit Option A. The Face Amount will be
increased to equal the death benefit on the effective date of change. A
Policy issued under Death Benefit Option C may not change to either Death
Benefit Option A or Death Benefit Option B for the entire lifetime of the
Contract. Similarly, a Policy issued under either Death Benefit Option A or
B may not change to Death Benefit Option C for the lifetime of the Policy.
Satisfactory evidence of insurability must be submitted to the Company in
connection with a request for a change from Death Benefit Option A to Death
Benefit Option B. A change may not be made if it would result in a Face
Amount of less than the minimum Face Amount.
A change in death benefit option will not in itself result in an immediate
change in the amount of a Policy's death benefit or Cash Value. (See Monthly
Deduction - Cost of Insurance.)
REDUCTION IN FACE AMOUNT. Subject to certain limitations set forth
below, an Owner may decrease (but not increase) the Face Amount of a Policy
once each Policy Year, but not before the first Policy Anniversary. A
written request is required for a reduction in the Face Amount. A reduction
in Face Amount may affect the cost of insurance rate and the net amount at
risk, both of which affect an Owner's cost of insurance charge. (See Monthly
Deduction - Cost of Insurance.) A reduction in the Face Amount of a Policy
may have Federal income tax consequences. (See Federal Tax Matters.)
Any decrease in the Face Amount will become effective on the Monthly
Anniversary on or following receipt of the written request by the Company.
The amount of the requested decrease must be at least $5,000 ($2,000 for
policies issued in qualified pension plans) and the Face Amount remaining in
force after any requested decrease may not be less than minimum Face Amount.
If following a decrease in Face Amount, the Policy would not comply with the
maximum premium limitations required by Federal tax law (see Payment and
Allocation of Premiums), the decrease may be limited or Cash Value may be
returned to the Owner (at the Owner's election), to the extent necessary to
meet these requirements. (See Monthly Deduction - Cost of Insurance; and
Charges and Deductions - Contingent Deferred Sales Charge.)
PAYMENT OF THE DEATH BENEFIT. The death benefit under the Policy will
ordinarily be paid in a lump sum within seven days after the Company receives
all documentation required for such a payment. Payment may, however, be
postponed in certain circumstances. (See General Matters - Postponement of
Payment from the Separate Account.) The death benefit will be increased by
any unpaid dividends determined prior to the Last Insured's death, and by the
amount of the monthly cost of insurance for the portion of the month from the
date of death to the end of the month, and reduced by any outstanding
Indebtedness. (See General Matters - Additional Insurance Benefits,
Dividends, and Charges and Deductions.) The Company will pay interest on the
death benefit from the date of the Last Insured's death to the date of
payment. Interest will be at an annual rate determined by the Company, but
will never be less than the guaranteed rate of 4%. Provisions for settlement
of proceeds other than a lump sum payment may only be made upon written
agreement with the Company.
Cash Value
The Cash Value of the Policy is equal to the total of the amounts credited to
the Owner in the Separate Account, the Loan Account (securing Policy Loans),
13
<PAGE> 16
and, in certain contracts, the General Account. The Policy's Cash Value in
the Separate Account will reflect the investment performance of the chosen
Divisions of the Separate Account as measured by each Division's Net
Investment Factor (defined below), the frequency and amount of Net Premiums
paid, transfers, partial withdrawals, loans and the charges assessed in
connection with the Policy. An Owner may at any time surrender the Policy
and receive the Policy's Cash Surrender Value. (See Policy Rights -
Surrender, Partial Withdrawals, and Pro-Rata Surrender.) The Policy's Cash
Value in the Separate Account equals the sum of the Policy's Cash Values in
each Division. There is no guaranteed minimum Cash Value.
DETERMINATION OF CASH VALUE. For each Division of the Separate Account,
the Cash Value is determined on each Valuation Date. On the Investment Start
Date, the Cash Value in a Division will equal the portion of any Net Premium
allocated to the Division, reduced by the portion allocated to that Division
of the monthly deduction(s) due from the Issue Date through the Investment
Start Date. (See Payment and Allocation of Premiums.) Thereafter, on each
Valuation Date, the Cash Value in a Division of the Separate Account will
equal:
(1) The Cash Value in the Division on the preceding Valuation Date,
multiplied by the Division's Net Investment Factor (defined below) for
the current Valuation Period; plus
(2) Any Net Premium payments received during the current Valuation
Period which are allocated to the Division; plus
(3) Any loan repayments allocated to the Division during the current
Valuation Period; plus
(4) Any amounts transferred to the Division from the General Account
or from another Division during the current Valuation Period; plus
(5) That portion of the interest credited on outstanding loans which
is allocated to the Division during the current Valuation Period; minus
(6) Any amounts transferred from the Division to the General Account,
Loan Account, or to another Division during the current Valuation
Period (including any transfer charges); minus
(7) Any partial withdrawals from the Division during the current
Valuation Period; minus
(8) Any withdrawal due to a Pro-Rata Surrender from the Division
during the current Valuation Period; minus
(9) Any withdrawal or surrender charges incurred during the current
Valuation Period attributed to the Division in connection with a
partial withdrawal or Pro-Rata Surrender; minus
(10) If a Monthly Anniversary occurs during the current Valuation
Period, the portion of the monthly deduction allocated to the Division
during the current Valuation Period to cover the Policy Month which
starts during that Valuation Period (See Charges and Deductions.); plus
(11) If a Policy Anniversary occurs during the current Valuation
Period, the portion of the dividend paid, if any, allocated to the
Division.
NET INVESTMENT FACTOR: The Net Investment Factor measures the investment
performance of a Division during a Valuation Period. The Net Investment
Factor for each Division for a Valuation period is calculated as follows:
(1) The value of the assets at the end of the preceding Valuation
Period; plus
(2) The investment income and capital gains, realized or unrealized,
credited to the assets in the Valuation Period for which the Net
Investment Factor is being determined; minus
(3) The capital losses, realized or unrealized, charged against those
assets during the Valuation Period; minus
(4) Any amount charged against each Division for taxes, including any
tax or other economic burden resulting from the application of the tax
laws determined by the Company to be properly attributable to the
Divisions of the Separate Account, or any amount set aside during the
Valuation Period as a reserve for taxes attributable to the operation
or maintenance of each Division; minus
(5) A charge equal to a percentage of the average net assets for each
day in the Valuation Period. This charge, for mortality and expense
risks, is determined by the length of time the policy has been in
force. It will not exceed the amounts shown in the following table:
<TABLE>
<CAPTION>
Policy Percentage of Effective
Years Avg. Net Assets Annual Rate
<S> <C> <C>
1-10 0.0015027 0.55%
11-20 0.0012301 0.45%
21+ 0.0009572 0.35%;
divided by
</TABLE>
14
<PAGE> 17
(6) The value of the assets at the end of the preceding Valuation
Period.
POLICY RIGHTS
Loans
LOAN PRIVILEGES. The Owner may, by written request to General American,
borrow an amount up to the Loan Value of the Policy, with the Policy serving
as sole security for such loan. A loan taken from, or secured by, a Policy
may have Federal income tax consequences. (See Federal Tax Matters.)
The Loan Value is the Cash Value of the Policy on the date the loan request
is received, less interest to the next loan interest due date, less
anticipated monthly deductions to the next loan interest due date, less any
existing loan, less any surrender charge, plus interest expected to be earned
on the loan balance to the next loan interest due date. Policy Loan interest
is payable on each Policy Anniversary.
The minimum amount that may be borrowed is $500. The loan may be completely
or partially repaid at any time while the Insured is living. Any amount due
to an Owner under a Policy Loan ordinarily will be paid within seven days
after General American receives the loan request at its Home Office, although
payments may be postponed under certain circumstances. (See General
Matters-Postponement of Payments from the Separate Account.)
When a Policy Loan is made, Cash Value equal to the amount of the loan plus
interest due will be transferred to the Loan Account as security for the
loan. A Loan Subaccount exists within the Loan Account for the General
Account and each Division of the Separate Account. Amounts transferred to
the Loan Account to secure Indebtedness are allocated to the appropriate Loan
Subaccount to reflect its origin. Unless the Owner requests a different
allocation, amounts will be transferred from the Divisions of the Separate
Account and the General Account in the same proportion that the Policy's Cash
Value in each Division and the General Account, if any, bears to the Policy's
total Cash Value, less the Cash Value in the Loan Account, at the end of the
Valuation Period during which the request for a Policy Loan is received.
This will reduce the Policy's Cash Value in the General Account and Separate
Account. These transactions will not be considered transfers for purposes of
the limitations on transfers between Divisions or to or from the General
Account.
Cash Value in the Loan Account is expected to earn interest at a rate ("the
earnings rate") which is lower than the rate charged on the Policy Loan ("the
borrowing rate"). Cash Value in the Loan Account will accrue interest daily
at an annual earnings rate of 4%.
Interest credited on the Cash Value held in the Loan Account will be
allocated on Policy Anniversaries to the General Account and the Divisions of
the Separate Account in the same proportion that the Cash Value in each Loan
Subaccount bears to the Cash Value in the Loan Account. The interest
credited will also be transferred: (1) when a new loan is made; (2) when a
loan is partially or fully repaid; and (3) when an amount is needed to meet a
monthly deduction.
INTEREST CHARGED. The borrowing rate we charge for Policy Loan interest
will be based on the following schedule:
<TABLE>
<CAPTION>
For Loans Annual
Outstanding During Interest Rate
<S> <C>
Policy Years 1-10 4.50%
Policy Years 11-20 4.25%
Policy Years 21+ 4.15%
</TABLE>
General American will inform the Owner of the current borrowing rate when a
Policy Loan is requested.
Policy Loan interest is due and payable annually on each Policy Anniversary.
If the Owner does not pay the interest when it is due, the unpaid loan
interest will be added to the outstanding Indebtedness as of the due date and
will be charged interest at the same rate as the rest of the Indebtedness.
(See Effect of Policy Loans below.) The amount of Policy Loan interest which
is transferred to the Loan Account will be deducted from the Divisions of the
Separate Account and from the General Account in the same proportion that the
portion of the Cash Value in each Division and in the General Account,
respectively, bears to the total Cash Value of the Policy minus the Cash
Value in the Loan Account.
EFFECT OF POLICY LOANS. Whether or not a Policy Loan is repaid, it will
permanently affect the Cash Value of a Policy, and may permanently affect the
amount of the death benefit. The collateral for the loan (the amount held in
the Loan Account) does not participate in the performance of the Separate
Account while the loan is outstanding. If the Loan Account earnings rate is
less than the investment performance of the selected Division(s), the Cash
Value of the Policy will be lower as a result of the Policy Loan.
Conversely, if the Loan Account earnings rate is higher than the investment
performance of the Division(s), the Cash Value may be higher.
In addition, if the Indebtedness (See Definitions) exceeds the Cash Value
minus the surrender charge
15
<PAGE> 18
on any Monthly Anniversary, the Policy will lapse, subject to a grace period.
(See Payment and Allocation of Premiums - Policy Lapse and Reinstatement.) A
sufficient payment must be made within the later of the grace period of 62 days
from the Monthly Anniversary immediately before the date Indebtedness exceeds
the Cash Value less any surrender charges, or 31 days after notice that a
Policy will terminate unless a sufficient payment has been mailed, or the
Policy will lapse and terminate without value. A lapsed Policy, however, may
later be reinstated subject to certain limitations. (See Payment and
Allocation of Premiums - Policy Lapse and Reinstatement.)
Any outstanding Indebtedness will be deducted from the proceeds payable upon
the death of the Last Insured or the surrender of the Policy. Upon a
complete surrender or lapse of any Policy, if the amount received plus the
amount of outstanding Indebtedness exceeds the total investment in the
Policy, the excess will generally be treated as ordinary income subject to
tax. (See Federal Tax Matters.)
REPAYMENT OF INDEBTEDNESS. A Policy Loan may be repaid in whole or in
part at any time prior to the death of the Last Insured and as long as a
Policy is in force. When a loan repayment is made, an amount securing the
Indebtedness in the Loan Account equal to the loan repayment will be
transferred to the Divisions of the Separate Account and the General Account
in the same proportion that the Cash Value in each Loan Subaccount bears to
Cash Value in the Loan Account. Amounts paid while a Policy Loan is
outstanding will be treated as premiums unless the Owner requests in writing
that they be treated as repayment of Indebtedness.
Surrender, Partial Withdrawals and Pro-Rata Surrender
At any time during the lifetime of the Last Insured and while a Policy is in
force, the Owner may surrender the Policy by sending a written request to the
Company. After the first Policy Year, an Owner may make a partial withdrawal
by sending a written request to the Company. The amount available for
surrender is the Cash Surrender Value at the end of the Valuation Period
during which the surrender request is received at the Company's Home Office.
Amounts payable from the Separate Account upon surrender, partial withdrawal,
or a Pro-Rata Surrender will ordinarily be paid within seven days of receipt
of the written request. (See General Matters - Postponement of Payments from
the Separate Account.)
SURRENDERS. To effect a surrender, either the Policy itself must be
returned to the Company along with the request, or the request must be
accompanied by a completed affidavit of loss, which is available from the
Company. Upon surrender, the Company will pay the Cash Surrender Value plus
any unpaid dividends determined prior to surrender (See Dividends) to the
Owner in a single sum. The Cash Surrender Value equals the Cash Value on the
date of surrender, less any Indebtedness, and less any surrender charge.
(See Charges and Deductions - Contingent Deferred Sales Charge.) The Company
will determine the Cash Surrender Value as of the date that an Owner's
written request is received at the Company's Home Office. If the request is
received on a Monthly Anniversary, the monthly deduction otherwise deductible
will be included in the amount paid. Coverage under a Policy will terminate
as of the date of surrender. The Last Insured must be living at the time of
a surrender. A surrender may have Federal income tax consequences. (See
Federal Tax Matters.)
PARTIAL WITHDRAWALS. After the first Policy Year, an Owner may make
partial withdrawals from the Policy's Cash Surrender Value. There is no
transaction charge for the first twelve partial withdrawals or requested
transfers in a Policy Year. General American will impose a charge of $25 for
each partial withdrawal or requested transfer in excess of twelve in a Policy
Year. A partial withdrawal may have Federal income tax consequences. (See
Federal Tax Matters.)
The minimum amount of a partial withdrawal request, net of any applicable
surrender charges, is the lesser of a) $500 from a Division of the Separate
Account, or b) the Policy's Cash Value in a Division. (See Charges and
Deductions - Contingent Deferred Sales Charge.) Partial withdrawals made
during a Policy Year may not exceed the following limits. The maximum amount
that may be withdrawn from a Division of the Separate Account is the Policy's
Cash Value net of any applicable surrender charges in that Division. The
total partial withdrawals and transfers from the General Account over the
Policy Year may not exceed a maximum amount equal to the greatest of the
following: (1) 25% of the Cash Surrender Value in the General Account at the
beginning of the Policy Year, multiplied by the withdrawal percentage limit
shown in the policy, or (2) the previous Policy Year's maximum amount.
The Owner may allocate the amount withdrawn plus any applicable surrender
charge, subject to the above conditions, among the Divisions of the Separate
Account and the General Account. If no allocation is specified, then the
partial withdrawal will be allocated among the Divisions of the Separate
Account and the General Account in the same proportion that the Policy's Cash
Value in each Division and the General Account bears to the total Cash Value
of the Policy, less the Cash Value in the
16
<PAGE> 19
Loan Account, on the date the request for the partial withdrawal is received.
If the limitations on withdrawals from the General Account will not permit this
proportionate allocation, the Owner will be requested to provide an alternate
allocation. (See The General Account.)
No amount may be withdrawn that would result in there being insufficient Cash
Value to meet any surrender charge that would be payable immediately
following the withdrawal upon the surrender of the remaining Cash Value.
The death benefit will be affected by a partial withdrawal, unless Death
Benefit Option A or Option C is in effect and the withdrawal is made under
the terms of an anniversary partial withdrawal rider. (See General Matters -
Additional Insurance Benefits.) If Death Benefit Option A or Death Benefit
Option C is in effect and the death benefit equals the Face Amount, then a
partial withdrawal will decrease the Face Amount by an amount equal to the
partial withdrawal plus the applicable surrender charge resulting from that
partial withdrawal. If the death benefit is based on a percentage of the
Cash Value, then a partial withdrawal will decrease the Face Amount by an
amount by which the partial withdrawal plus the applicable surrender charge
exceeds the difference between the death benefit and the Face Amount. If
Death Option B is in effect, the Face Amount will not change.
The Face Amount remaining in force after a partial withdrawal may not be less
than the minimum Face Amount. Any request for a partial withdrawal that
would reduce the Face Amount below this amount will not be implemented.
Partial withdrawals may affect the way in which the cost of insurance charge
is calculated and the amount of pure insurance protection afforded under a
Policy. (See Monthly Deduction - Cost of Insurance.) The Company may change
the minimum amount required for a partial withdrawal or the number of times
partial withdrawals may be made.
PRO-RATA SURRENDER. After the first Policy Year, an Owner can make a
Pro-Rata Surrender of the Policy. The Pro-Rata Surrender will reduce the
Face Amount and the Cash Value by a percentage chosen by the Owner. This
percentage must be any whole number. A Pro-Rata Surrender may have Federal
income tax consequences. (See Federal Tax Matters.) The percentage will be
applied to the Face Amount and the Cash Value on the Monthly Anniversary on
or following our receipt of the request.
The Owner may allocate the amount of decrease in Cash Value plus any
applicable surrender charge among the Divisions of the Separate Account and
the General Account. (See Charges and Deductions - Contingent Deferred Sales
Charge.) If no allocation is specified, then the decrease in Cash Value and
any applicable surrender charge will be allocated among the Divisions of the
Separate Account and the General Account in the same proportion that the
Policy's Cash Value in each Division and the General Account bears to the
total Cash Value of the Policy, less the Cash Value in the Loan Account, on
the date the request for Pro-Rata Surrender is received.
A Pro-Rata Surrender can not be processed if it will reduce the Face Amount
below the minimum Face Amount of the Policy. No Pro-Rata Surrender will be
processed for more Cash Surrender Value than is available on the date of the
Pro-Rata Surrender. A cash payment will be made to the Owner for the amount
of Cash Value reduction less any applicable surrender charges.
Pro-Rata Surrenders may affect the way in which the cost of insurance charge
is calculated and the amount of the pure insurance protection afforded under
the Policy. (See Monthly Deduction - Cost of Insurance.) Pro-Rata Surrender
CHARGES ON SURRENDER, PARTIAL WITHDRAWALS AND PRO-RATA SURRENDER.
If a Policy is surrendered within the first ten Policy Years, the Contingent
Deferred Sales Charge will apply. (See Contingent Deferred Sales Charge.)
A partial withdrawal or Pro-Rata Surrender may also result in a Contingent
Deferred Sales Charge. The amount of the charge assessed is a portion of the
Contingent Deferred Sales Charge that would be deducted upon surrender or
lapse. Charges are described in more detail under Charges and Deductions -
Contingent Deferred Sales Charge.
While partial withdrawals and Pro-Rata Surrenders are each methods of
reducing a Policy's Cash Value, a Pro-Rata Surrender differs from a partial
withdrawal in that a partial withdrawal does not typically have a
proportionate effect on a Policy's death benefit by reducing the Policy's
Face Amount, while a Pro-Rata Surrender does. Assuming that a Policy's death
benefit is not a percentage of the Policy's Cash Value, a Pro-Rata Surrender
will reduce the Policy's death benefit in the same proportion that the
Policy's Cash Value is reduced, while a partial withdrawal will reduce the
death benefit by one dollar for each dollar of Cash Value withdrawn. Partial
Withdrawals and Pro-Rata Surrenders will also result in there being different
cost of insurance charges subsequently deducted. (See Monthly Deduction -
Cost of Insurance; Surrender, Partial Withdrawals and Pro-Rata Surrender -
Partial Withdrawals; and Surrenders, Partial Withdrawals, and Pro-Rata
Surrenders-Pro-Rata Surrender.)
17
<PAGE> 20
Transfers
Under General American's current practices, a Policy's Cash Value, except
amounts credited to the Loan Account, may be transferred among the Divisions
of the Separate Account and for certain contracts, between the General
Account and the Divisions. Transfers to and from the General Account are
subject to restrictions (See The General Account). Requests for transfers
from or among Divisions of the Separate Account may be made in writing or by
telephone. Transfers from or among the Divisions of the Separate Account
must be in amounts of at least $500 or, if smaller, the Policy's Cash Value
in a Division. The first twelve requested transfers or partial withdrawals
per policy year will be allowed free of charge. Thereafter, the Company will
impose a charge of $25 for each requested transfer or partial withdrawal.
General American ordinarily will make transfers and determine all values in
connection with transfers as of the end of the Valuation Period during which
the transfer request is received.
All requests received on the same Valuation Date will be considered a single
transfer request. Each transfer must meet the minimum requirement of $500 or
the entire Cash Value in a Division, whichever is smaller. Where a single
transfer request calls for more than one transfer, and not all of the
transfers would meet the minimum requirements, General American will make
those transfers that do meet the requirements. Transfers resulting from
Policy Loans will not be counted for purposes of the limitations on the
amount or frequency of transfers allowed in each Policy Month or Policy Year.
Although General American currently intends to continue to permit transfers
for the foreseeable future, the Policy provides that General American may at
any time revoke, modify, or limit the transfer privilege, including the
minimum amount transferable, the maximum General Account allocation percent,
and the frequency of such transfers.
Portfolio Rebalancing
Over time, the funds in the General Account and the Divisions of the Separate
Account will accumulate at different rates as a result of different
investment returns. The Owner may direct that from time to time we
automatically restore the balance of the Cash Value in the General Account
and in the Divisions of the Separate Account to the percentages determined in
advance. There are two methods of rebalancing available - periodic and
variance.
PERIODIC REBALANCING. Under this option the Owner elects a frequency
(monthly, quarterly, semiannually or annually), measured from the Policy
Anniversary. On each date elected, we will rebalance the funds by generating
transfers to reallocate the funds according to the investment percentages
elected.
VARIANCE REBALANCING. Under this option the Owner elects a specific
allocation percentage for the General Account and each Division of the
Separate Account. For each such account, the allocation percentage (if not
zero) must be a whole percentage and must not be less than five percent (5%).
The Owner also elects a maximum variance percentage (5%, 10%, 15%, or 20%
only), and can exclude specific funds from being rebalanced. On each Monthly
Anniversary we will review the current fund balances to determine whether any
fund balance is outside of the variance range (either above or below) as a
percentage of the specified allocation percentage for that fund. If any fund
is outside of the variance range, we will generate transfers to rebalance all
of the specified funds back to the predetermined percentages.
Owners should consider that portfolio rebalancing entails the transfer of
Cash Value from better performing portfolios to lesser performing portfolios.
Transfers resulting from portfolio rebalancing will not be counted against
the total number of transfers allowed in a Policy Year before a charge is
applied.
The Owner may elect either form of portfolio rebalancing by specifying it on
the policy application, or may elect it later for an in-force Policy, or may
cancel it, by submitting a change form acceptable to General American under
its administrative rules.
Only one form of portfolio rebalancing may be elected at any one time, and
portfolio rebalancing may not be used in conjunction with dollar cost
averaging (see below).
General American reserves the right to suspend portfolio rebalancing at any
time on any class of Policies on a nondiscriminatory basis, or to charge an
administrative fee for election changes in excess of a specified number in a
Policy Year in accordance with its administrative rules.
Dollar Cost Averaging
The Owner may direct the Company to transfer amounts on a monthly basis from
the Money Market Fund to any other Division of the Separate Account. This
service is intended to allow the Owner to utilize "dollar cost averaging"
("DCA"), a long-term investment technique which provides for regular,
18
<PAGE> 21
level investments over time. The Company makes no guarantee that DCA will
result in a profit or protect against loss.
The following rules and restrictions apply to DCA transfers:
(1) The minimum DCA transfer amount is $100.
(2) A written election of the DCA service, on a form provided by the
Company, must be completed by the Owner and on file with the Company in
order to begin DCA transfers.
(3) In the written election of the DCA service, the Owner indicates how
DCA transfers are to be allocated among the Divisions of the Separate
Account. For any Division chosen to receive DCA transfers, the minimum
percentage that may be allocated to a Division is 5% of the DCA
transfer amount, and fractional percentages may not be used.
(4) DCA transfers can only be made from the Money Market Fund, and
DCA transfers will not be allowed to the General Account.
(5) The DCA transfers will not count against the Policy's normal
transfer restrictions. (See Policy Rights -- Transfers.)
(6) The DCA transfer percentages may differ from the allocation
percentages the Owner specifies for the allocation of Net Premiums.
(See Payment and Allocation of Premiums -- Allocation of Net Premiums
and Cash Values.)
(7) Once elected, DCA transfers from the Money Market Fund will be
processed monthly until either the value in the Money Market Fund is
completely depleted or the Owner instructs the Company in writing to
cancel the DCA service.
(8) Transfers as a result of a Policy Loan or repayment, or in
exercise of the conversion privilege, are not subject to the DCA rules
and restrictions. The DCA service terminates at the time the
conversion privilege is exercised, when any outstanding amount in any
Division of the Separate Account is immediately transferred to the
General Account. (See Policy Rights - Loans, and Policy Rights -
Conversion Privilege.)
(9) DCA transfers will not be made until the Right to Examine Policy
period has expired (See Policy Rights - Right to Examine Policy).
The Company reserves the right to assess a processing fee for the DCA
service. The Company reserves the right to discontinue offering DCA upon 30
days' written notice to Owners. However, any such discontinuation will not
affect DCA services already commenced. The Company reserves the right to
impose a minimum total Cash Value, less outstanding Indebtedness, in order to
qualify for DCA service. Also, the Company reserves the right to change the
minimum necessary Cash Value and the minimum required DCA transfer amount.
Transfers made under Dollar Cost Averaging do not count against the total of
twelve requested transfers or partial withdrawals allowed without charge in a
Policy Year.
Right to Examine Policy
The Owner may cancel a Policy within 20 days after receiving it (30 days if
the Owner is a resident of California and is age 60 or older) or within 45
days after the application was signed, whichever is later. If a Policy is
canceled within this time period, a refund will be paid. Where required by
state law, the refund will equal all premiums paid under the Policy. Where
required by state law, General American will refund an amount equal to the
greater of premiums paid or (1) plus (2) where (1) is the difference between
the premiums paid, including any policy fees or other charges, and the
amounts allocated to the Separate Account under the Policy and (2) is the
value of the amounts allocated to the Separate Account under the Policy on
the date the returned Policy is received by General American or its agent.
To cancel the Policy, the Owner should mail or deliver the Policy to either
General American or the agent who sold it. A refund of premiums paid by
check may be delayed until the Owner's check has cleared the bank upon which
it was drawn. (See General Matters - Postponement of Payments from the
Separate Account.)
Death Benefit at Attained Age 100
If the Last Insured is living and the Policy is in force when the younger
Insured reaches Attained Age 100, the death benefit will be equal to 101% of
the Cash Value of the Policy unless the Lifetime Coverage Rider is in effect.
(See Additional Insurance Benefits.) At that point, no further premium
payments will be required or accepted, and no further monthly deductions will
be taken to cover the cost of insurance.
19
<PAGE> 22
PAYMENT AND ALLOCATION OF PREMIUMS
Issuance of a Policy
Individuals wishing to purchase a Policy must complete an application and
submit it to an authorized registered agent of General American or to General
American's Home Office. A Policy will generally be issued to Insureds of
Issue Ages 0 through 90 for regularly underwritten contracts, and to Insureds
of Issue Ages 20 through 70 for Policies issued in qualified pension plans.
(Issue age requirements vary for policies issued in Texas.) General American
may, in its sole discretion, issue Policies to individuals falling outside of
those Issue Ages. Acceptance of an application is subject to General
American's underwriting rules and General American reserves the right to
reject an application for any reason.
The Issue Date is determined by General American in accordance with its
standard underwriting procedures for variable life insurance policies. The
Issue Date is used to determine Policy Anniversaries, Policy Years, and
Policy Months. Insurance coverages under a Policy will not take effect until
the Policy has been delivered and the initial premium has been paid during
the lifetimes of both Insureds and prior to any change in health as shown in
the application.
Premiums
The initial premium is due on the Issue Date, and may be paid to an
authorized registered agent of General American or to General American at its
Home Office. General American currently requires that the initial premium
for a Policy be at least equal to one-twelfth (1/12) of the Minimum Premium
for the Policy. The Minimum Premium is the amount specified for each Policy
based on the requested initial Face Amount and the charges under the Policy
which vary according to the Issue Age, sex, underwriting risk class, and
smoker status of the Insured. (See Charges and Deductions.) For policies
issued as a result of a term conversion from certain General American term
policies, the Company requires the Owner to pay an initial premium, which
combined with conversion credits given, if any, will equal one full "Minimum
Premium" for the Policy.
Following the initial premium, subject to the limitations described below,
premiums may be paid in any amount and at any interval. Premiums after the
first premium payment must be paid to General American at its Home Office.
An Owner may establish a schedule of planned premiums which will be billed by
the Company at regular intervals. Failure to pay planned premiums, however,
will not itself cause the Policy to lapse. (See Policy Lapse and
Reinstatement.) Premium receipts will be furnished upon request.
An Owner may make unscheduled premium payments at any time in any amount, or
skip planned premium payments, subject to the minimum and maximum premium
limitations described below.
If a Policy is in the intended Owner's possession but the initial premium has
not been paid, the Policy is not in force. The intended Owner is deemed to
have the Policy for inspection only.
PREMIUM LIMITATIONS. Every premium payment must be at least $10. In no
event may the total of all premiums paid in any Policy Year exceed the
current maximum premium limitations for that Policy Year. Maximum premium
limits for the Policy Year will be shown in an Owner's annual report.
In general, for policies issued with Death Benefit Option A or Death Benefit
Option B, the maximum premium limit for a Policy Year is the largest amount
of premium that can be paid in that Policy Year such that the sum of the
premiums paid under the Policy will not at any time exceed the guideline
premium limitations needed to comply with the tax definition of life
insurance. For policies issued with Death Benefit Option C, the company
reserves the right to impose other restrictions upon the amount of premium
that may be paid into the Policy. If at any time a premium is paid which
would result in total premiums exceeding the current maximum premium
limitations, the Company will only accept that portion of the premium which
will make total premiums equal the maximum. Any part of the premium in
excess of that amount will be returned or applied as otherwise agreed, and no
further premiums will be accepted until allowed under the current maximum
premium limitations.
In addition to the foregoing tax definitional limits on premiums, for
purposes of determining whether distributions (including loans) are a return
of income first, the Company monitors the Policy to detect whether the "seven
pay limit" has been exceeded. If the seven pay limit is exceeded, the Policy
becomes a "Modified Endowment". The Company has adopted administrative steps
designed to notify an Owner when it is believed that a premium payment will
cause a Policy to become a modified endowment contract. The Owner will be
given a limited amount of time to request that the premium be reversed in
order to avoid the Policy's being classified as a modified endowment
contract. (See Federal Tax Matters.)
20
<PAGE> 23
If the Company receives a premium payment which would cause the death benefit
to increase by an amount that exceeds the Net Premium portion of the payment,
then the Company reserves the right to (1) refuse that premium payment, or
(2) require additional evidence of insurability before it accepts the
premium.
Allocation of Net Premiums and Cash Value
ALLOCATION OF NET PREMIUMS. In the application for a Policy, the Owner
indicates how Net Premiums are to be allocated among the Divisions of the
Separate Account, to the General Account (if available), or both. For each
Division chosen, the minimum percentage that may be allocated to a Division
is 5% of the Net Premium, and fractional percentages may not be used.
Certain other restrictions apply to allocations made to the General Account
(see General Account). For policies issued with an allowable percentage to
the General Account of more than 5%, the minimum percentage is 5%, and
fractional percentages may not be used.
The allocation for future Net Premiums may be changed without charge at any
time by providing notice to the Company. Any change in allocation will take
effect immediately upon receipt by the Company of written notice. No charge
is imposed for changing the allocations of future premiums. The initial
allocation will be shown on the application which is attached to the Policy.
The Company may at any time modify the maximum percentage of future Net
Premiums that may be allocated to the General Account.
During the period from the Issue Date to the end of the Right to Examine
Policy Period (See Policy Rights - Right to Examine Policy), Net Premiums
will automatically be allocated to the Division that invests in the Money
Market Fund of Capital Company. When this period expires, the Policy's Cash
Value in that Division will be transferred to the Divisions of the Separate
Account and to the General Account (if available) in accordance with the
allocation requested in the application for the Policy, or any allocation
instructions received subsequent to receipt of the application. Net Premiums
received after the Right to Examine Policy Period will be allocated according
to the allocation instructions most recently received by the Company unless
otherwise instructed for that particular premium receipt.
The Policy's Cash Value may also be transferred between Divisions of the
Separate Account, and, if the General Account is available under the Policy,
between those Divisions and the General Account. (See Policy Rights -
Transfers.)
The value of amounts allocated to Divisions of the Separate Account will vary
with the investment performance of the chosen Divisions and the Owner bears
the entire investment risk. This will affect the Policy's Cash Value, and
may affect the death benefit as well. Owners should periodically review
their allocations of Net Premiums and the Policy's Cash Value in light of
market conditions and their overall financial planning requirements.
Policy Lapse and Reinstatement
LAPSE. Unlike conventional whole life insurance policies, the failure to
make a premium payment following the initial premium will not itself cause a
Policy to lapse. If, during the first five Policy Years, the sum of all
premiums paid on the Policy, reduced by any partial withdrawals and any
outstanding loan balance, is greater than or equal to the sum of the No Lapse
Monthly Premiums for the elapsed months since the Issue Date, the Policy will
not lapse as a result of the Cash Value less any loans, loan interest due,
and any surrender charge being insufficient to pay the monthly deduction.
Lapse will occur (except as described above) when the Cash Surrender Value is
insufficient to cover the monthly deduction, and a grace period expires
without a sufficient payment being made.
The grace period, which is 62 days, begins on the Monthly Anniversary on
which the Cash Surrender Value becomes insufficient to meet the next monthly
deduction. The Company will notify the Owner at the beginning of the grace
period by mail addressed to the last known address on file with the Company.
The notice to the Owner will indicate the amount of additional premium that
must be paid. The amount of the premium required to keep the Policy in force
will be the amount to cover the outstanding monthly deductions and premium
expense charges. (See Charges and Deductions - Monthly Deduction.) If the
Company does not receive the required amount within the grace period, the
Policy will lapse and terminate without Cash Value.
If the Last Insured dies during the grace period, any overdue monthly
deductions will be deducted from the death benefit otherwise payable.
REINSTATEMENT. The Owner may reinstate a lapsed Policy by written
application any time within five years after the date of lapse and before the
younger Insured's Attained Age 100. Reinstatement is subject to the
following conditions:
1. Evidence of the insurability of the Insureds (or if one of the
Insureds was deceased when the Policy lapsed, evidence of the
insurability of the surviving Insured) satisfactory to the Company
21
<PAGE> 24
(including evidence of insurability of any person covered by a rider to
reinstate the rider).
2. Payment of a premium that, after the deduction of premium expense
charges, is large enough to cover: (a) the monthly deductions due at
the time of lapse, and (b) two times the monthly deduction due at the
time of reinstatement.
3. Payment or reinstatement of any Indebtedness. Any Indebtedness
reinstated will cause Cash Value of an equal amount also to be
reinstated. Any loan interest due and unpaid on the Policy Anniversary
prior to reinstatement must be repaid at the time of reinstatement.
Any loan paid at the time of reinstatement will cause an increase in
Cash Value equal to the amount to be reinstated.
The Policy cannot be reinstated if it has been surrendered.
The amount of Cash Value on the date of reinstatement will be equal to the
amount of any Policy Loan reinstated, increased by the Net Premiums paid at
reinstatement, any Policy Loan paid at the time of reinstatement, and the
amount of any surrender charge paid at the time of lapse.
If both Insureds were alive on the date the Policy lapsed, then both Insureds
must be alive on the date the Company approves the application for
reinstatement. If only one Insured was alive on the date the Policy
lapsed, then that Insured must be alive on the date the Company approves the
request for reinstatement. If any Insured who was alive on the date the
Policy lapsed is not then alive when the Company approves the request for
reinstatement, such approval is void and of no effect.
The effective date of reinstatement will be the date the Company approves the
application for reinstatement. There will be a full monthly deduction for
the Policy Month which includes that date. (See Charges and
Deductions-Monthly Deduction.)
The surrender charge in effect at the time of reinstatement will equal the
surrender charge in effect at the time of lapse.
CHARGES AND DEDUCTIONS
Charges will be deducted in connection with the Policy to compensate the
Company for providing the insurance benefits set forth in the Policy and any
additional benefits added by rider, administering the Policies, incurring
expenses in distributing the Policies, and assuming certain risks in
connection with the Policy.
Premium Expense Charges
Prior to allocation of Net Premiums, premium payments will be reduced by
premium expense charges consisting of a sales charge and a charge for premium
taxes. The premium payment less the premium expense charge equals the Net
Premium.
SALES CHARGE. A sales charge will be deducted from each premium payment to
partially compensate the Company for expenses incurred in distributing the
Policy and any additional benefits provided by riders. The Company currently
intends to deduct a sales charge determined according to the following
schedule:
<TABLE>
<S> <C>
Policy Year 1 15% of premium up to Target
5% of premium above Target
Policy Years 2-10 5% of all premium paid
Policy Years 11+ 2% of all premium paid
</TABLE>
For policies issued in the state of Oregon, the amounts shown above are
increased by 2%. Consistent with the requirements of the Texas non-forfeiture
laws, the guaranteed sales charge varies for policies issued in Texas. As of
the date of this prospectus, the current sales charge for Texas policies is
the same as shown above.
The expenses covered by the sales charge include agent sales commissions, the
cost of printing Prospectuses and sales literature, and any advertising
costs. Where Policies are issued to Insureds with higher mortality risks or
to Insureds who have selected additional insurance benefits, a portion of the
amount deducted for sales charge is used to pay distribution expenses and
other costs associated with these additional coverages. No increase in this
sales charge will occur that would result in an increase in the sales charge
percentage deducted in any previous Policy year.
A Contingent Deferred Sales Charge is also imposed under certain
circumstances for expenses incurred in distributing the Policies. That
charge is discussed below.
To the extent that sales expenses are not recovered from the sales charge and
the surrender charge, those expenses may be recovered from other sources,
including the mortality and expense risk charge described below.
PREMIUM TAXES. Various states or other governing jurisdictions and their
subdivisions impose a tax on premiums received by insurance companies.
Premium taxes vary by jurisdiction. A deduction equal to the amount of the
actual premium tax (if any) is taken from each premium payment for these
taxes. The deduction allows the Company to pass
22
<PAGE> 25
through the amount of the taxes imposed on the policy by the state or other
governing jurisdiction and any subdivisions thereof. State premium taxes
currently range from 0% to 3.5% (4% in Puerto Rico), with an average of
approximately 2.1%.
FEDERAL TAX CHARGE. This charge is designed to pass through the
equivalent of the federal tax consequences applicable to the policy. The
charge is currently 1.3% of premium paid, and is guaranteed not to increase
except to the extent of any increases in the federal tax.
Monthly Deduction
Charges will be deducted monthly from the Cash Value of each Policy ("the
monthly deduction") to compensate the Company for (a) certain administrative
costs; (b) the cost of insurance; and (c) the cost of optional benefits added
by rider. The monthly deduction will be taken on the Investment Start Date
and on each Monthly Anniversary. It will be allocated among the General
Account and each Division of the Separate Account in the same proportion that
a Policy's Cash Value in the General Account and the Policy's Cash Value in
each Division bear to the total Cash Value of the Policy, less the Cash Value
in the Loan Account, on the date the deduction is taken. Because portions of
the monthly deduction, such as the cost of insurance, can vary from month to
month, the monthly deduction itself can vary in amount from month to month.
SELECTION AND ISSUE EXPENSE CHARGE. During the first ten Policy Years,
the Company generally assesses a monthly charge to cover the costs associated
with the underwriting and issue of the policy. The monthly charge per $1,000
of face amount ranges from approximately 4 cents to one dollar, and varies by
Issue Age, risk class, and (except on unisex Policies) sex of the Insureds.
For policies issued in Texas, compliance with the non-forfeiture laws requires
that the guaranteed selection and issue expenses are level for the life of the
policy. On a current basis, as of the date of this prospectus, the charges
stop after ten Policy Years.
MONTHLY ADMINISTRATIVE CHARGE. The Company has responsibility for the
administration of the Policies and the Separate Account. Administrative
expenses include premium billing and collection, record keeping, processing
death benefit claims, cash surrenders, partial withdrawals, Policy changes,
and reporting and overhead costs, processing applications, and establishing
Policy records. As reimbursement for administrative expenses related to the
maintenance of each Policy and the Separate Account, the Company assesses a
monthly administration charge from each Policy. This charge is generally $25
per month in the first Policy Year, and $6 per month for all Policy Years
thereafter, and is guaranteed not to increase while the Policy is in force.
The Company may administer the Policy itself, or may purchase administrative
services from such sources (including affiliates) as may be available. Such
services will be acquired on a basis which, in the Company's sole discretion,
affords the best services at the lowest cost. The Company reserves the right
to select a company to provide services which the Company deems, in its sole
discretion, is the best able to perform such services in a satisfactory
manner even though the costs for such services may be higher than would
prevail elsewhere.
COST OF INSURANCE. The cost of insurance is deducted on each Monthly
Anniversary for the following Policy Month. The cost of insurance is
determined in a manner that reflects the anticipated mortality of both
Insureds and the fact that the death benefit is not payable until the death
of the Last Insured. Because the cost of insurance depends upon a number of
variables, the cost will vary for each Policy Month. The Company will
determine the cost of insurance charge by multiplying the applicable cost of
insurance rate or rates by the net amount at risk (defined below) for each
Policy Month.
The cost of insurance rates are determined at the beginning of each Policy
Year. The rates will be based on the Attained Age, duration, rate class, and
(except for unisex Policies) sex of the Insureds at issue. (See Unisex
Requirements Under Montana Law.) The cost of insurance rates generally
increase as the Insureds' Attained Age increases.
The rate class of an Insured also will affect the cost of insurance rate.
For the initial Face Amount, the Company will use the rate class on the Issue
Date. If the death benefit equals a percentage of Cash Value, an increase in
Cash Value will cause an automatic increase in the death benefit. The rate
class for such increase will be the same as that used for the initial Face
Amount.
The Company currently places Insureds into a preferred rate class, a standard
rate class, or into rate classes involving a higher mortality risk.
Actual cost of insurance rates may change, and the actual monthly cost of
insurance rates will be determined by the Company based on its expectations
as to future mortality experience. However, the actual cost of insurance
rates will not be greater than the guaranteed cost of insurance rates set
forth in the Policy. For Policies which are not in a substandard risk class,
the guaranteed cost of insurance rates are equal to 100% of the rates set
forth in the male/female smoker/non-smoker 1980 CSO Mortality Tables (1980
CSO Tables NA and SA
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<PAGE> 26
and 1980 CSO Tables NG and SG for sex distinct Policies and Policies issued in
qualified pension plans; and 1980 CSO Tables NA and SA for unisex policies
issued in compliance with Montana law. All Policies are based on the age
nearest birthday. Higher rates apply if either Insured is determined to be in
a substandard risk class.
In two otherwise identical Policies, an Insured in the preferred rate class
will have a lower cost of insurance than an Insured in a rate class involving
higher mortality risk. Each rate class is also divided into two categories:
smokers and nonsmokers. Nonsmoker Insureds will generally incur a lower cost
of insurance than similarly situated Insureds who smoke. (Insureds under
Attained Age 20 are automatically assigned to the non-smoker rate class.)
The net amount at risk for a Policy Month is (a) the death benefit at the
beginning of the Policy Month divided by 1.0032737 (which reduces the net
amount at risk, solely for purposes of computing the cost of insurance, by
taking into account assumed monthly earnings at an annual rate of 4%), less
(b) the Cash Value at the beginning of the Policy Month. In calculating the
cost of insurance charges, the cost of insurance rate for a Face Amount is
applied to the net amount at risk for that Face Amount.
ADDITIONAL INSURANCE BENEFITS. The monthly deduction will include
charges for any additional benefits provided by rider. (See General Matters
- - Additional Insurance Benefits.)
Contingent Deferred Sales Charge ("CDSC")
For a period of up to ten years after the Issue Date, the Company will impose
a CDSC upon surrender or lapse of the Policy, upon a partial withdrawal, or
upon a Pro-Rata Surrender. The amount of the charge assessed will depend
upon a number of factors, including the type of event (a full surrender,
lapse, or partial withdrawal), the amount of any premium payments made under
the Policy prior to the event, and the number of Policy Years having elapsed
since the Policy was issued.
The Contingent Deferred Sales Charge compensates the Company for expenses
relating to the distribution of the Policy, including agents' commissions,
advertising, and the printing of the Prospectus and sales literature.
CALCULATION OF CHARGE. If a Policy is surrendered, the charge will not
exceed the Contingent Deferred Sales Charge Percentage multiplied by the
annual Target Premium attributable to the base policy.
The Contingent Deferred Sales Charge Percentage is shown in the following
table.
<TABLE>
Contingent Deferred Sales Charge
Percentage Table
<CAPTION>
If surrender or lapse The percentage of the
occurs in the last month annual Target
of Policy Year: Premium payable is:
<S> <C>
1 through 5 45%
6 40%
7 30%
8 20%
9 10%
10 and later 0%
</TABLE>
In addition, the percentages are reduced equally for each Policy Month during
the years shown. For example, during the seventh year, the percentage is
reduced equally each month from 40% at the end of the sixth Year to 30% at
the end of the seventh Year. This table may be modified if required by law
or regulation of the governing jurisdiction.
CHARGE ASSESSED UPON PARTIAL WITHDRAWALS OR PRO-RATA SURRENDER.
The amount of the Contingent Deferred Sales Charge deducted upon a partial
withdrawal or Pro-Rata Surrender will equal a fraction of the charge that
would be deducted if the Policy were surrendered at that time. The fraction
will be determined by dividing the amount of the withdrawal of cash by the
Cash Value before the withdrawal and multiplying the result by the charge.
Immediately after a withdrawal, the Policy's remaining surrender charge will
equal the amount of the surrender charge immediately before the withdrawal
less the amount deducted in connection with the withdrawal.
Transaction Charges. There are no transaction charges for processing the
first twelve transfers or partial withdrawals in a policy year. There is a
charge of $25 for each transfer or partial withdrawal in excess of twelve.
ADJUSTMENT OF CHARGES. The Policy is available for purchase by
individuals, corporations, and other institutions. For certain individuals
and certain corporate or other group or sponsored arrangements purchasing one
or more Policies, General American may waive or adjust the amount of the
Sales Charge, Contingent Deferred Sales Charge, monthly administrative
charge, or other charges where the expenses associated with the sale of the
Policy or Policies or the underwriting or other administrative costs
associated with the Policy or Policies warrant an adjustment.
Sales, underwriting, or other administrative expenses may be reduced for
reasons such as expected economies resulting from a corporate purchase or a
group or sponsored arrangement; from the amount of the initial premium
payment or payments; or from
24
<PAGE> 27
the amount of projected premium payments. General American will determine in
its discretion if, and in what amount, an adjustment is appropriate. The
Company may modify its criteria for qualification for adjustment of charges as
experience is gained, subject to the limitation that such adjustments will not
be unfairly discriminatory against the interests of any Owner.
Separate Account Charges
MORTALITY AND EXPENSE RISK CHARGE. General American will deduct a daily
charge from the Separate Account. The amount of the deduction is determined
as a percentage of the average net assets of each Division of the Separate
Account. The daily deduction percentages, and the equivalent effective
annual rate, are:
<TABLE>
<CAPTION>
Policy Years Daily Charge Factor Annual Equivalent
<S> <C> <C>
1-10 .0015027% 0.55%
11-20 .0012301% 0.45%
21+ .0009572% 0.35%
</TABLE>
This deduction is guaranteed not to increase while the Policy is in force.
General American may realize a profit from this charge.
The mortality risk assumed by General American is that Insureds may die
sooner than anticipated and that therefore General American will pay an
aggregate amount of death benefits greater than anticipated. The expense
risk assumed is that expenses incurred in issuing and administering the
Policy will exceed the amounts realized from the administrative charges
assessed against the Policy.
FUND EXPENSES. The value of the net assets of the Separate Account will
reflect the investment advisory fee and other expenses incurred by the
underlying investment companies. A summary of the annual Fund operating
expenses in provided on page 4 of this prospectus. See the prospectuses for
the respective Funds for a description of investment advisory fees and other
expenses.
TAXES. No charges are currently made to the Separate Account for Federal,
state, or local taxes that the Company incurs which may be attributable to
such Separate Account or to the Policy. The Company may make such a charge
for any such taxes or economic burden resulting from the application of the
tax laws that it determines to be properly attributable to the Separate
Account or to the Policy. (See Federal Tax Matters.)
DIVIDENDS
The Policy is issued both as a participating Policy, which provides the Owner
an ownership interest in General American Mutual Holding Company, the parent
company of General American Life Insurance Company and as a non-participating
Policy, which provides no ownership interest in General American Mutual
Holding Company or General American Life Insurance Company. However, we do
not anticipate that the Policy will share in the divisible surplus of the
Company in the form of a dividend.
THE GENERAL ACCOUNT
Because of exemptive and exclusionary provisions, interests in the General
Account have not been registered under the Securities Act of 1933 and the
General Account has not been registered as an investment company under the
1940 Act. Accordingly, neither the General Account nor any interests therein
are subject to the provisions of these Acts and, as a result, the staff of
the SEC has not reviewed the disclosure in this Prospectus relating to the
General Account. The disclosure regarding the General Account may, however,
be subject to certain generally applicable provisions of the Federal
securities laws relating to the accuracy and completeness of statements made
in prospectuses.
NOTE: THE GENERAL ACCOUNT IS NOT AVAILABLE IN THE STATE OF TEXAS.
General Description
The General Account consists of all assets owned by General American other
than those in the Separate Account and other separate accounts. Subject to
applicable law, General American has sole discretion over the investment of
the assets of the General Account.
At issue, General American will determine the maximum percentage of the
non-borrowed Cash Value that may be allocated, either initially or by transfer,
to the General Account. The ability to allocate Net Premiums or to transfer
Cash Value to the General Account may not be made available, in the Company's
discretion, under certain Policies. Further, the option may be limited with
respect to some Policies. The Company may, from time to time, adjust the
extent to which premiums or Cash Value may be allocated to the General
Account (the "maximum allocation percentage"). Such adjustments may not be
uniform as to all Policies. General American may at any time modify the
General Account maximum allocation percent. Subject to this maximum, an
Owner may elect to allocate Net Premiums to the General Account, the
25
<PAGE> 28
Separate Account, or both. Subject to this maximum, the Owner may also
transfer Cash Value from the Divisions of the Separate Account to the General
Account, or from the General Account to the Divisions of the Separate Account.
The allocation of Net Premiums or the transfer of Cash Value to the General
Account does not entitle an Owner to share in the investment experience of
the General Account. Instead, General American guarantees that Cash Value
allocated to the General Account will accrue interest at a rate of at least
4%, compounded annually, independent of the actual investment experience of
the General Account.
The Loan Account is part of the General Account.
The Policy
This Prospectus describes a flexible premium joint and last survivor variable
life insurance policy. This Prospectus is generally intended to serve as a
disclosure document only for the aspects of the Policy relating to the
Separate Account. For complete details regarding the General Account, see
the Policy itself.
General Account Benefits
If the Owner allocates all Net Premiums only to the General Account and makes
no transfers, partial withdrawals, Pro-Rata Surrenders, or Policy Loans, the
entire investment risk will be borne by General American, and General
American guarantees that it will pay at least a minimum specified death
benefit. The Owner may select Death Benefit Option A, B or C under the
Policy and may change the Policy's Face Amount subject to satisfactory
evidence of insurability.
General Account Cash Value
Net Premiums allocated to the General Account are credited to the Cash Value.
General American bears the full investment risk for these amounts and
guarantees that interest will be credited to each Owner's Cash Value in the
General Account at a rate of no less than 4% per year, compounded annually.
General American may, AT ITS SOLE DISCRETION, credit a higher rate of
interest, although it is not obligated to credit interest in excess of 4% per
year, and might not do so. ANY INTEREST CREDITED ON THE POLICY'S CASH VALUE
IN THE GENERAL ACCOUNT IN EXCESS OF THE GUARANTEED MINIMUM RATE OF 4% PER
YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF GENERAL AMERICAN. THE
POLICY OWNER ASSUMES THE RISK THAT INTEREST CREDITED MAY NOT EXCEED THE
GUARANTEED MINIMUM RATE OF 4% PER YEAR. If excess interest is credited, a
different rate of interest may be applied to the Cash Value in the Loan
Account. The Cash Value in the General Account will be calculated on each
Monthly Anniversary of the Policy.
General American guarantees that, on each Valuation Date, the Cash Value in
the General Account will be the amount of the Net Premiums allocated or Cash
Value transferred to the General Account, plus interest at the rate of 4% per
year, plus any excess interest which General American credits and any amounts
transferred into the General Account, less the sum of all Policy charges
allocable to the General Account and any amounts deducted from the General
Account in connection with partial withdrawals, Pro-Rata Surrenders,
surrender charges or transfers to the Separate Account.
Transfers, Surrenders, Partial Withdrawals and Policy Loans
After the first Policy Year, a portion of Cash Value may be withdrawn from
the General Account or transferred from the General Account to the Separate
Account. A partial withdrawal, net of any applicable surrender charges, and
any transfer must be at least $500 or, the Policy's entire Cash Value in the
General Account if less than $500. No amount may be withdrawn from the
General Account that would result in there being insufficient Cash Value to
meet any surrender charges that would be payable immediately following the
withdrawal upon the surrender of the remaining Cash Value of the Policy. The
total amount of transfers and withdrawals in a Policy Year may not exceed a
Maximum Amount equal to the greater of (a) 25% of a Policy's Cash Surrender
Value in the General Account at the beginning of the Policy Year, or (b) the
previous Policy Year's Maximum Amount (not to exceed the total Cash Surrender
Value of the Policy).
Transfers to the General Account are limited by the maximum allocation
percentage (described below) in effect for a Policy at the time a transfer
request is made.
Policy Loans may also be made from the Policy's Cash Value in the General
Account.
Loans and withdrawals from the General Account may have Federal income tax
consequences. (See Federal Tax Matters.)
There is no transaction charge for the first twelve partial withdrawals or
requested transfers in a Policy Year. General American will impose a charge
of $25 for each partial withdrawal or requested transfer in excess of twelve
in a Policy Year. General American
26
<PAGE> 29
may revoke or modify the privilege of transferring amounts to or from the
General Account at any time. Partial withdrawals and Pro-Rata Surrenders will
result in the imposition of the applicable surrender charge.
Transfers, surrenders, partial withdrawals and Pro-Rata Surrenders payable
from the General Account and the payment of Policy Loans allocated to the
General Account may, subject to certain limitations, be delayed for up to six
months. However, if payment is deferred for 30 days or more, General
American will pay interest at the rate of 2.5% per year for the period of the
deferment. Amounts from the General Account used to pay premiums on policies
with General American will not be delayed.
GENERAL MATTERS
Postponement of Payments from the Separate Account
The Company usually pays amounts payable on partial withdrawal, Pro-Rata
Surrender, surrender, or Policy Loan allocated to the Separate Account
Divisions within seven days after written notice is received. Payment of any
amount payable from the Divisions of the Separate Account upon surrender,
partial withdrawals, Pro-Rata Surrender, death of the Last Insured, or
payments of a Policy Loan and transfers, may be postponed whenever: (1) the
New York Stock Exchange is closed other than customary weekend and holiday
closings, or trading on the New York Stock Exchange is restricted as
determined by the SEC; (2) the SEC by order permits postponement for the
protection of Owners; or (3) an emergency exists, as determined by the SEC,
as a result of which disposal of securities is not reasonably practicable or
it is not reasonably practicable to determine the value of the Separate
Account's net assets. The Company may defer payment of the portion of any
Policy Loan from the General Account for not more than six months.
Payments under the Policy of any amounts derived from premiums paid by check
may be delayed until the Owner's check has cleared the bank upon which it
was drawn.
The Contract
The Policy, the attached application, any riders, endorsements, and any
application for reinstatement constitute the entire contract. All statements
made by the Insureds in the application and any supplemental applications can
be used to contest a claim or the validity of the Policy. Any change to the
Policy must be in writing and approved by the President, a Vice President, or
the Secretary of the Company. No agent has the authority to alter or modify
any of the terms, conditions, or agreements of the Policy or to waive any of
its provisions.
Control of Policy
The Insureds jointly are the Owner of the Policy unless another person or
entity is shown as the Owner in the application. Ownership may be changed,
however, as described below. The Owner is entitled to all rights provided by
the Policy. Any person whose rights of ownership depend upon some future
event does not possess any present rights of ownership. If there is more
than one Owner at a given time, all Owners must exercise the rights of
ownership by joint action. If the Owner dies, and the Owner is not one or
both of the Insureds, the Owner's interest in the Policy becomes the property
of his or her estate unless otherwise provided. Unless otherwise provided,
the Policy is jointly owned by all Owners named in the Policy or by the
survivors of those joint Owners. Unless otherwise stated in the Policy, the
final Owner is the estate of the last joint Owner to die. The Company may
rely on the written request of any trustee of a trust which is the Owner of
the Policy, and the Company is not responsible for the proper administration
of any such trust.
Beneficiary
The Beneficiary(ies) is (are) the person(s) specified in the application or
by later designation. Unless otherwise stated in the Policy, the Beneficiary
has no rights in a Policy before the death of the Last Insured. If there is
more than one Beneficiary at the death of the Last Insured, each Beneficiary
will receive equal payments unless otherwise provided by the Owner. If no
Beneficiary is living at the death of the Last Insured, the proceeds will be
payable to the Owner or, if the Owner is not living, to the Owner's estate.
The Company permits the designation of various types of trusts as
Beneficiary(ies), including trusts for minor beneficiaries, trusts under a
will, and trusts under a separate written agreement. An Owner is also
permitted to designate several types of beneficiaries, including business
beneficiaries.
Change of Owner or Beneficiary
The Owner may change the ownership and/or Beneficiary designation by written
request in a form acceptable to the Company at any time during the Last
Insured's lifetime subject to any restrictions stated in the Policy and this
Prospectus. The Company may require that the Policy be returned for
endorsement of any change. If acceptable to us, the change will take effect
as of the date the request is signed, whether or not the Last Insured is
living when the request is received at the Company's Home
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Office. The Company is not liable for any payment made or action taken before
the Company received the written request for change. If the Owner is also a
Beneficiary of the Policy at the time of the Last Insured's death, the Owner
may, within sixty days of the Last Insured's death, designate another person
to receive the Policy proceeds. Any change will be subject to any assignment
of the Policy or any other legal restrictions.
Policy Changes
The Company reserves the right to limit the number of changes to a Policy to
one per Policy Year and to restrict changes in the first Policy Year.
Currently, only one change is permitted during any Policy Year and no change
may be made during the first Policy Year. For this purpose, changes include
decreases in Face Amount and changes in the death benefit option. No change
will be permitted, if as a result, the Policy would fail to satisfy the
definition of life insurance in Section 7702 of the Internal Revenue Code or
any applicable successor provision.
Conformity with Statutes
If any provision in a Policy is in conflict with the laws of the state
governing the Policy, the provision will be deemed to be amended to conform
to such laws. In addition, the Company reserves the right to change the
Policy if it determines that a change is necessary to cause this Policy to
comply with, or give the Owner the benefit of any Federal or state statute,
rule, or regulation, including, but not limited to, requirements of the
Internal Revenue Code, or its regulations or published rulings.
Claims of Creditors
To the extent permitted by law, neither the Policy nor any payment under it
will be subject to the claims of creditors or to any legal process.
Incontestability
The Policy is incontestable after it has been in force for two years from the
Issue Date during the lifetime of either Insured. An addition of a rider
after the Issue Date is incontestable after such addition has been in force
for two years from its effective date during the lifetime of either Insured.
Any reinstatement of a Policy is incontestable only after it has been in
force during the lifetime of either Insured for two years after the effective
date of the reinstatement.
Assignment
The Company will be bound by an assignment of a Policy only if: (a) the
assignment is in writing; (b) the original assignment instrument or a
certified copy thereof is filed with the Company at its Home Office; and (c)
the Company returns an acknowledged copy of the assignment instrument to the
Owner. The Company is not responsible for determining the validity of any
assignment. Payment of Policy proceeds is subject to the rights of any
assignee of record. If a claim is based on an assignment, the Company may
require proof of the interest of the claimant. A valid assignment will take
precedence over the claim of any Beneficiary.
Suicide
Suicide within two years of the Issue Date is not covered by the Policy. If
either Insured dies by suicide, while sane or insane, within two years from
the Issue Date (or within the maximum period permitted by the laws of the
state in which the Policy was delivered, if less than two years), the amount
payable will be limited to premiums paid, less any partial withdrawals and
outstanding Indebtedness subject to certain limitations.
If the either Insured is a Missouri citizen when the Policy is issued, this
provision does not apply on the Issue Date of the Policy, unless that Insured
intended suicide when the Policy was applied for.
Misstatement of Age or Sex and Corrections
If the age or sex (except in unisex Policies, see Unisex Requirements Under
Montana Law) of the Insureds has been misstated in the application, the
amount of the death benefit will be that which the most recent cost of
insurance charge would have purchased for the correct age and sex.
Any payment or Policy changes made by the Company in good faith, relying on
its records or evidence supplied with respect to such payment, will fully
discharge the Company's duty. The Company reserves the right to correct any
errors in the Policy.
Additional Insurance Benefits
Subject to certain requirements, one or more of the following additional
insurance benefits may be added to a Policy by rider. The descriptions below
are intended to be general; the terms of the Policy riders providing the
additional benefits may vary from state to state, and the Policy should be
consulted. The cost of any additional insurance benefits which require
additional charges will be deducted as part of the monthly deduction from the
Policy's Cash Value. (See Charges and Deductions - Monthly Deduction.)
Certain restrictions may apply and are described in the applicable rider. An
insurance agent authorized to sell the Policy can describe these extra
benefits
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further. Samples of the provisions are available from General American upon
written request.
WAIVER OF SPECIFIED PREMIUM RIDER. Provides for crediting the Policy's
Cash Value with a specified monthly premium while the covered Insured is
totally disabled. The monthly premium selected at issue is not guaranteed to
keep the Policy in force. The covered Insured must have become disabled
after age 5 and before age 65.
ADJUSTABLE BENEFIT TERM RIDER. This rider allows an employer who is the
Owner to provide adjustable term insurance to comply with the terms of an
associated employee benefit plan. The increase in coverage occurs on each
Policy Anniversary.
ANNIVERSARY PARTIAL WITHDRAWAL RIDER. This rider allows the owner to
withdraw up to 15% of the Policy's Cash Surrender Value on any Policy
Anniversary without reducing the Face Amount. A Contingent Deferred Sales
Charge will still apply.
JOINT SUPPLEMENTAL COVERAGE TERM RIDER. This rider provides level
term insurance on the lives of the Insureds under the base policy. It can be
added only at issue. It cannot be increased or added to an existing Policy.
SECONDARY GUARANTEE RIDER. This rider guarantees that if, during the
secondary guarantee period, the sum of all premiums paid on the Policy,
reduced by any partial withdrawals and any outstanding loan balance, is
greater than or equal to the sum of the secondary guarantee premiums required
since the Issue Date, the Policy will not lapse as a result of a Cash Value
less any loans, loans interest due, and any surrender charge being
insufficient to pay the monthly deduction.
The secondary guarantee period is the number of Policy Years until the
younger Insured reaches Attained Age 100.
LIFETIME COVERAGE RIDER. This rider provides the continuation of the
Policy's face amount beyond the younger Insured's Attained Age 100, provided
the policy remains in force to that date with a positive cash surrender
value. If the Policy is in force after the younger Insured's Attained Age
100, the death benefit will be the greater of the face amount or 101% of the
Cash Value.
DIVORCE SPLIT RIDER. This rider allows the Policy to be split into two
separate policies in the event of the divorce of a married couple who are the
Insureds under the Policy.
Estate Preservation Term Rider. This rider provides joint level term
insurance, payable at the death of the Last Insured, for a period of four
years from the date of the rider.
Records and Reports
The Company will maintain all records relating to the Separate Account and
will mail to the Owner once each Policy Year, at the last known address of
record, a report which shows the current Policy values, premiums paid,
deductions made since the last report, and any outstanding Policy Loans. The
Owner will also be sent a periodic report for each Fund. Receipt of premium
payments, transfers, partial withdrawals, Pro-Rata Surrenders, Policy Loans,
loan repayments, changes in death benefit options, decreases in Face Amount,
surrenders and reinstatements will be confirmed promptly following each
transaction.
An Owner may request in writing a projection of illustrated future Cash
Surrender Values and death benefits. This projection will be furnished by
the Company for a nominal fee which will not exceed $25.
DISTRIBUTION OF THE POLICIES
The Policy will be sold by individuals who, in addition to being licensed as
life insurance agents for the Company, are also registered representatives of
Walnut Street Securities, Inc. ("Walnut Street"), the principal underwriter
of the Policy, or of broker-dealers who have entered into written sales
agreements with Walnut Street. Walnut Street was incorporated under the laws
of Missouri in 1984 and is a wholly-owned subsidiary of General American
Holding Company, which is, in turn, a wholly-owned subsidiary of the
Company. Walnut Street 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. No director or officer of Walnut
Street owns any units in the Separate Account.
Writing agents will receive commissions based on a commission schedule and
rules. Currently, agent first-year commissions equal 50% of target premiums
and 2.25% of excess premium paid in Policy Year 1. In renewal years, the
agent commissions vary from 1.0% to 2.0% of premiums paid in Policy Years 2
and later, depending on the agent's contract type. An additional service
fee, determined as a percentage of the Policy's unloaned Cash Value, is also
paid. The percentage varies by Policy Year from 0% to 0.20% of average
monthly unloaned assets. Reductions may be possible under the circumstances
outlined in the section entitled Adjustment of Charges. General Agents
receive compensation which may be in part
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based on the level of agent commissions in their agencies.
As principal underwriter for the Policies, Walnut Street receives commission
income. Walnut Street receives an administrative fee of 2% of premium from
sales of the Policies.
The general agent commission schedules and rules differ for different types
of agency contracts.
General American may use other distribution channels to sell the
non-participating version of the Policy.
FEDERAL TAX MATTERS
Introduction
The following summary provides a general description of the Federal income
tax considerations associated with the Policy and does not purport to be
complete or to cover all situations. This discussion is not intended as tax
advice. Counsel or other competent tax Advisers should be consulted for more
complete information. This discussion is based upon General American's
understanding of the present Federal income tax laws as they are currently
interpreted by the Internal Revenue Service. No representation is made as to
the likelihood of continuation of the present Federal income tax laws or of
the current interpretations by the Internal Revenue Service.
Tax Status of the Policy
Section 7702 of the Internal Revenue Code of 1986, as amended (the "Code")
includes a definition of a life insurance contract for Federal tax purposes.
The Secretary of the Treasury (the "Treasury") issued proposed regulations
which specify what will be considered reasonable mortality charges under
Section 7702. Guidance as to how Section 7702 is to be applied is, however,
limited. If a Policy were determined not to be a life insurance contract for
purposes of Section 7702, such Policy would not provide most of the tax
advantages normally provided by a life insurance policy.
With respect to a Policy issued on a basis of a standard premium class or on
a guaranteed or simplified issue basis, while there is some uncertainty due
to the limited guidance under Section 7702, the Company believes that such a
Policy should meet the Section 7702 definition of a life insurance contract.
However, with respect to a Policy issued on a substandard basis (i.e., a
premium class involving higher than standard mortality risk), it is not clear
whether such a Policy would satisfy Section 7702, particularly if the Owner
pays the full amount of premiums permitted under the Policy.
If it is subsequently determined that a Policy does not satisfy Section 7702,
the Company will take whatever steps are appropriate and necessary to attempt
to cause such a Policy to comply with Section 7702, including possibly
refunding any premiums paid that exceed the limitations allowable under
Section 7702 (together with interest or other earnings on any such premiums
refunded as required by law). For these reasons, the Company reserves the
right to modify the Policy as necessary to attempt to qualify it as a life
insurance contract under Section 7702.
Section 817(h) of the Code authorizes the Treasury to set standards by
regulation or otherwise for the investments of the Separate Account to be
"adequately diversified" in order for the Policy to be treated as a life
insurance contract for Federal tax purposes. The Separate Account, intends
to comply with the diversification requirements prescribed by the Treasury in
Regulation Section 1.817-5, which affect how assets may be invested.
Although General American does not control the Funds, it has entered into
agreements, which require these investment companies to be operated in
compliance with the requirements prescribed by the Treasury.
The IRS has stated in published rulings that a variable contract owner will
be considered the owner of separate account assets, for federal income tax
purposes, if the contract owner possesses incidents of ownership in those
assets, such as the ability to exercise investment control over the assets.
If that were to be determined to be the case, income and gains from the
separate account assets would be includible in the variable contract owner's
gross income. The Treasury Department has also announced, in connection with
the issuance of regulations concerning diversification, that those
regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause
the investor (i.e., the Owner), rather than the insurance company, to be
treated as the owner of the assets in the account." This announcement also
stated that guidance would be issued by way of regulations or rulings on the
"extent to which policyholders may direct their investments to particular
subaccounts without being treated as owners of the underlying assets."
The ownership rights under the Policy are different in certain respects from
those described by the IRS in rulings in which it was determined that policy
owners were not owners of separate account assets. For example, the Owner
has additional flexibility in allocating Premium payments and Policy Values.
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These differences could result in an Owner being treated as the owner of a
pro rata portion of the assets of the Separate Account. In addition, the
Company does not know what standards will be set forth, if any, in the
regulations or rulings which the Treasury Department has stated it expects to
issue. The Company therefore reserves the right to modify the Policy as
necessary to attempt to prevent an Owner from being considered the owner of a
pro rata share of the assets of the Separate Account.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
1. TAX TREATMENT OF POLICY BENEFITS. In general, the Company
believes that the proceeds and Cash Value increases of a Policy should be
treated in a manner consistent with a fixed-benefit life insurance policy for
Federal income tax purposes. Thus, the death benefit under the Policy should
be excludable from the gross income of the Beneficiary under Section
101(a)(1) of the Code, unless a transfer for value (generally a sale of the
policy) has occurred.
Many changes or transactions involving a Policy may have tax consequences,
depending on the circumstances. Such changes include, but are not limited
to, the exchange of the Policy, a change of the Policy's Face Amount, a
Policy Loan, an additional premium payment, a Policy lapse with an
outstanding Policy Loan, a partial withdrawal, or a surrender of the Policy.
In addition, Federal estate and state and local estate, inheritance, and
other tax consequences of ownership or receipt of Policy proceeds depend upon
the circumstances of each Owner or Beneficiary. A competent tax adviser
should be consulted for further information.
A Policy may also be used in various arrangements, including non-qualified
deferred compensation or salary continuation plans, split dollar insurance
plans, executive bonus plans, retiree medical benefit plans and others. The
tax consequences of such plans may vary depending on the particular facts and
circumstances of each individual arrangement. Therefore, if you are
contemplating the use of a Policy in any arrangement the value of which
depends in part on its tax consequences, you should be sure to consult a
qualified tax adviser regarding the tax attributes of the particular
arrangement.
Generally, the Owner will not be deemed to be in constructive receipt of the
Policy's Cash Value, including increments thereof, under the Policy until
there is a distribution. The tax consequences of distributions from, and
Policy Loans taken from or secured by, a Policy depend upon whether the
Policy is classified as a "modified endowment contract". However, upon a
complete surrender or lapse of any Policy, if the amount received plus the
amount of outstanding Indebtedness exceeds the total investment in the
Policy, the excess will generally be treated as ordinary income subject to
tax.
2. MODIFIED ENDOWMENT CONTRACTS. A policy may be treated as a
modified endowment contract depending upon the amount of premiums paid in
relation to the death benefit provided under such Policy. The premium
limitation rules for determining whether a Policy is a modified endowment
contract are extremely complex. In general, however, a Policy will be a
modified endowment contract if the accumulated premiums paid at any time
during the first seven Policy Years exceed the sum of the net level premiums
which would have been paid on or before such time if the Policy provided for
paid-up future benefits (based on the lowest level of benefits in effect for
the Policy) after the payment of seven level annual premiums.
In addition, if a Policy is "materially changed" it may cause such Policy to
be treated as a modified endowment contract. The material change rules for
determining whether a Policy is a modified endowment contract are also
extremely complex. In general, however, the determination of whether a
Policy will be a modified endowment contract after a material change
generally depends upon the relationship among the death benefit at the time
of such change, the Cash Value at the time of the change and the additional
premiums paid in the seven Policy Years starting with the date on which the
material change occurs.
Moreover, a life insurance contract received in exchange for a life insurance
contract classified as a modified endowment contract will also be treated as
a modified endowment contract. A reduction in a Policy's benefits may also
cause such Policy to become a modified endowment contract.
Due to the Policy's flexibility, classification of a Policy as a modified
endowment contract will depend upon the circumstances of each Policy. The
Company has, however, adopted administrative steps designed to protect an
Owner against the possibility that the Policy might become a modified
endowment contract. The Company believes the safeguards are adequate for
most situations, but it cannot provide complete assurance that a Policy will
not be classified as a modified endowment contract. At the time a premium is
credited which would cause the Policy to become a modified endowment
contract, the Company will notify the Owner that unless a refund of the
excess premium is requested by the Owner, the Policy will become a modified
endowment contract. The Owner will have 30 days after receiving such
notification to request the refund. The excess premium paid will be returned
to the
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Owner upon receipt by the Company of the refund request. The amount to be
refunded will be deducted from the Policy Cash Value in the Divisions of the
Separate Account and in the General Account in the same proportion as the
premium payment was allocated to such Divisions.
Accordingly, a prospective Owner should contact a competent tax adviser
before purchasing a Policy to determine the circumstances under which the
Policy would be a modified endowment contract. In addition, an Owner should
contact a competent tax adviser before paying any additional premiums or
making any other change to, including an exchange of, a Policy to determine
whether such premium or change would cause the Policy (or the new Policy in
the case of an exchange) to be treated as a modified endowment contract.
3. DISTRIBUTIONS FROM POLICIES CLASSIFIED AS MODIFIED ENDOWMENT
CONTRACT. Policies classified as modified endowment contracts will be
subject to the following tax rules: First, all distributions, including
distributions upon surrender and benefits paid at maturity, from such a
Policy are treated as ordinary income subject to tax up to the amount equal
to the excess (if any) of the Cash Value immediately before the distribution
over the investment in the Policy (described below) at such time. Second,
Policy Loans taken from, or secured by, such a Policy, as well as due but
unpaid interest thereon, are treated as distributions from such a Policy and
taxed accordingly. Third, a 10 percent additional income tax is imposed on
the portion of any distribution from, or Policy Loan taken from or secured
by, such a Policy that (a) is included in income, except where the
distribution or Policy Loan is made on or after the Owner attains age 59 1/2,
(b) is attributable to the Owner's becoming disabled, or (c) is part of a
series of substantially equal periodic payments for the life (or life
expectancy) of the Owner or the joint lives (or joint life expectancies) of
the Owner and the Owner's Beneficiary.
4. DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED
ENDOWMENT CONTRACT. Distributions from Policies not classified as a
modified endowment contracts are generally treated as first recovering the
investment in the Policy (described below) and then, only after the return of
all such investment in the Policy, as distributing taxable income. An
exception to this general rule occurs in the case of a decrease in the
Policy's death benefit (possibly including a partial withdrawal) or any other
change that reduces benefits under the Policy in the first 15 years after the
Policy is issued and that results in cash distribution to the Owner in order
for the Policy to continue complying with the Section 7702 definitional
limits. Such a cash distribution will be taxed in whole or in part as
ordinary income (to the extent of any gain in the Policy) under rules
prescribed in Section 7702.
Policy Loans from, or secured by, a Policy that is not a modified endowment
contract are not treated as distributions. Instead, such loans are treated
as indebtedness of the Owner.
Upon a complete surrender or lapse of a Policy that is not a modified
endowment contract, if the amount received plus the amount of indebtedness
exceeds the total investment in the Policy, the excess will generally be
treated as ordinary income subject to tax.
Neither distributions (including distributions upon surrender or lapse) nor
Policy Loans from, or secured by, a Policy that is not a modified endowment
contract are subject to the 10 percent additional income tax.
If a Policy which is not a modified endowment contract subsequently becomes a
modified endowment contract, then any distribution made from the Policy
within two years prior to the date of such change in status may become
taxable.
5. POLICY LOAN INTEREST. Generally, interest paid on any loan under a
life insurance Policy owned by an individual is not deductible. In addition,
interest on any loan under a life insurance Policy owned by a business
taxpayer on the life of any individual who is an officer of or is financially
interested in the business carried on by that taxpayer is deductible only
under certain very limited circumstances. An Owner should consult a
competent tax adviser before deducting any loan interest.
6. INTEREST EXPENSE ON UNRELATED INDEBTEDNESS. Under provisions
added to the Code in 1997 for policies issued after June 8, 1997, if a
business taxpayer owns or is the beneficiary of a Policy on the life of any
individual who is not an officer, director, employee, or 20 percent owner of
the business, and the taxpayer also has debt unrelated to the Policy, a
portion of the taxpayer's unrelated interest expense deductions may be lost.
No business taxpayer should purchase or exchange a Policy on the life of any
individual who is not an officer, director, employee, or 20 percent owner of
the business without first consulting a competent tax Adviser.
7. INVESTMENT IN THE POLICY. Investment in the Policy means (i) the
aggregate amount of any premiums or other consideration paid for a Policy,
minus (ii) the aggregate amount received under the Policy which is excluded
from gross income of the Owner (except that the amount of any Policy Loan
from, or secured by, a Policy that is a modified endowment contract, to the
extent such amount is
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excluded from gross income, will be disregarded), plus (iii) the amount of any
Policy Loan from, or secured by, a Policy that is a modified endowment
contract to the extent that such amount is included in the gross income of the
Owner.
8. MULTIPLE POLICIES. All modified endowment contracts that are issued
by the Company (or its affiliates) to the same Owner during any calendar year
are treated as one modified endowment contract for purposes of determining
the amount includible in gross income under Section 72(e) of the Code.
9. POSSIBLE CHARGE FOR TAXES. At the present time, the Company makes
no charge to the Separate Account for any Federal, state, or local taxes (as
opposed to Premium Tax Charges which are deducted from premium payments) that
it incurs which may be attributable to such Separate Account or to the
Policies. The Company, however, reserves the right in the future to make a
charge for any such tax or other economic burden resulting from the
application of the tax laws that it determines to be properly attributable to
the Separate Account or to the Policies.
10. POSSIBLE CHANGES IN TAXATION. As of the date of this Prospectus,
the President's budget for fiscal year 1999 contains a number of proposals
that would adversely affect the Federal income tax treatment of life
insurance contracts. Of particular importance to owners of variable life
insurance contracts such as the Policy are two proposals under which, if
adopted: (1) the inside buildup of variable life insurance contracts like the
Policy would be taxed whenever cash values were reallocated among the
available investment options, for example, if the Periodic and Variance
Rebalancing options available under the Policy were used, and (2) it would no
longer be possible to exchange a variable life insurance contract tax free
under Code section 1035. Moreover, it is always possible that any changes in
the tax treatment of life insurance contracts could be effective prior to the
date of any new legislation.
UNISEX REQUIREMENTS UNDER MONTANA LAW
The State of Montana generally prohibits the use of actuarial tables that
distinguish between men and women in determining premiums and Policy benefits
for policies issued on the lives of their residents. Therefore, all Policies
offered by this Prospectus to insure residents of Montana will have premiums
and benefits which are based on actuarial tables that do not differentiate on
the basis of sex.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
General American holds the assets of the Separate Account in a custodial
account in its name at the Bank of New York. The Company maintains records
of all purchases and redemptions of applicable Fund shares by each of the
Divisions. Additional protection for the assets of the Separate Account is
afforded by a blanket fidelity bond issued by Lloyd's Underwriters in the
amount of five million dollars, covering all officers and employees of the
Company who have access to the assets of the Separate Account.
VOTING RIGHTS
Based on its understanding of current applicable legal requirements, the
Company will vote the shares of the Funds held in the Separate Account at
regular and special shareholder meetings of the mutual funds in accordance
with the instructions received from persons having voting interests in the
corresponding Divisions of the Separate Account. If, however, the 1940 Act
or any regulation thereunder should be amended or if the present
interpretation thereof should change, and as a result the Company determines
that it is permitted to vote shares of the Fund in its own right, it may
elect to do so. No voting privileges apply to the Policies with respect to
Cash Value removed from the Separate Account as a result of a Policy Loan.
The number of votes which an Owner has the right to instruct will be
calculated separately for each Division. Voting rights reflect the dollar
value of the total number of units of each Division of the Separate Account
credited to the Owner at the record date, rather than the number of units
alone. Fractional shares will be counted. The number of votes of the Fund
which the Owner has the right to instruct will be determined as of the date
coincident with the date established by that Fund for determining
shareholders eligible. Voting instructions will be solicited by written
communications prior to such meeting in accordance with procedures
established by the mutual funds.
The company will vote shares of a Fund for which no timely instructions are
received in proportion to the voting instructions which are received with
respect to that Fund. The Company will also vote any shares of the Funds
which are not attributable to Policies in the same proportion.
Each person having a voting interest in a Division will receive any proxy
material, reports, and other materials relating to the appropriate Fund.
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DISREGARD OF VOTING INSTRUCTIONS. The Company may, when required by
state insurance regulatory authorities, disregard voting instructions if the
instructions require that the shares be voted so as to cause a change in the
subclassification or investment objective of the Fund or to approve or
disapprove an investment Advisory contract for a Fund. In addition, the
Company itself may disregard voting instructions in favor of changes
initiated by an Owner in the investment policy or the investment adviser or
sub-adviser of a Fund if the Company reasonably disapproves of such changes.
A proposed change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities, or the
Company determined that the change would have an adverse effect on its
General Account in that the proposed investment policy for a Fund may result
in overly speculative or unsound investments. If the Company disregards
voting instructions, a summary of that action and the reasons for such action
will be included in the next annual report to Owners.
STATE REGULATION OF THE COMPANY
The Company, a stock life insurance company organized under the laws of
Missouri, and the Separate Account are subject to regulation by the Missouri
Department of Insurance. An annual statement is filed with the Director of
Insurance on or before March 1st of each year covering the operations and
reporting on the financial condition of the Company as of December 31 of the
preceding year. Periodically, the Director of Insurance examines the
liabilities and reserves of the Company and the Separate Account and
certifies their adequacy, and a full examination of the Company's operations
is conducted by the National Association of Insurance Commissioners at least
once every three years.
In addition, the Company is subject to the insurance laws and regulations of
other states within which it is licensed or may become licensed to operate.
Generally, the insurance departments of other states apply the laws of the
state of domicile in determining permissible investments.
34
<PAGE> 37
<TABLE>
MANAGEMENT OF THE COMPANY
<CAPTION>
PRINCIPAL OCCUPATION(S)
NAME DURING PAST FIVE YEARS<F*>
---- --------------------------
PRINCIPAL OFFICERS<F**>
- -----------------------
<S> <C>
Richard A. Liddy Chairman, President and CEO, 1/95-present; Chairman of the Executive Committee,
5/92-present. Formerly President and CEO, 5/92-1/95.
Robert J. Banstetter, Sr. Vice President, General Counsel and Secretary, 2/91-present.
John W. Barber Vice President and Controller, 12/84-present.
O'Neil P. Boudreaux Vice President-Sales and Marketing, 10/96-present. Formerly Vice President-Group Field
Accounts, 4/87-10/96.
Kevin C. Eichner Executive Vice President of General American, Chairman of GenMark, Chairman of Walnut
Street Securities, 10/97-Present. President and CEO, Collaborative Strategies,
1983-Present.
E. Thomas Hughes Corporate Actuary and Treasurer, 10/94-present. Formerly Executive Vice
President-Group Pensions, 3/90-10/94
Michael P. Ingrassia Vice President-Group Executive Accounts, 3/92-present.
Warren J. Winer Executive Vice President-Group Life and Health, 8/95-present. Formerly Managing
Director, William M. Mercer, Inc., 7/93-8/95; President and Chief Operating Officer,
W. F. Corroon, 1986-7/93.
Bernard H. Wolzenski Executive Vice President-Individual Insurance, 10/91-present.
A. Greig Woodring President and Chief Executive Officer, Reinsurance Group of America, 12/92-present.
<FN>
<F*> All positions listed are with General American unless otherwise indicated.
<F**> The principal business address of Messrs. Banstetter, Hughes, and Liddy is
General American Life Insurance Company, 700 Market Street, St. Louis,
Missouri 63101. The principal business address for Messrs. Barber,
Boudreaux, Ingrassia, Winer and Wolzenski is 13045 Tesson Ferry Road, St.
Louis, Missouri 63128. The principal business address for Mr. Woodring is
660 Mason Ridge Center Drive, Suite 300, St. Louis, Missouri 63141. The
principal business address for Mr. Eichner is 670 Mason Ridge Center
Drive, Suite 100, St. Louis, Missouri 63141.
35
<PAGE> 38
<CAPTION>
NAME PRINCIPAL OCCUPATIONS(S)
---- DURING PAST FIVE YEARS<F*>
--------------------------
DIRECTORS
- ---------
<S> <C>
August A. Busch III Chairman of the Board and President, Anheuser-Busch
Anheuser-Busch Companies, Inc. Companies, Inc. (beer business).
One Busch Place
St. Louis, Missouri 63118
William E. Cornelius Retired Chairman and Chief Executive Officer, Union Electric
Union Electric Company Company (electric utility business).
P.O. Box 149
St. Louis, Missouri 63166
John C. Danforth Partner, Bryan Cave (law firm). Formerly, U. S. Senator, State of
Bryan Cave Missouri.
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Bernard A. Edison Past President, Edison Brothers Stores, Inc. (retail specialty stores).
Edison Brothers Stores, Inc.
P.O. Box 14020
St. Louis, Missouri 63178
Richard A. Liddy Chairman, President and CEO, General American
General American Life Insurance Co.
700 Market Street
St. Louis, MO 63101
William E. Maritz Chairman and Chief Executive Officer, Maritz, Inc.
Maritz, Inc. (motivation, travel, communications, training and marketing
1375 North Highway Drive research business).
Fenton, Missouri 63099
Craig D. Schnuck Chairman and Chief Executive Officer, Schnuck Markets, Inc.
Schnuck Markets, Inc. (retail supermarket chain).
11420 Lackland Road
P.O. Box 46928
St. Louis, Missouri 63146
William P. Stiritz Chairman, Chief Executive Officer and President, Agribrands International,
Agribrands International, Inc. Inc. Formerly Chairman, Chief Executive Officer and President, Ralston
9811 So. Forty Drive Purina Company (pet food, batteries, and bread business); Chairman Ralcorp
St. Louis, Missouri 63124 Ralcorp Holdings, Inc. (ready-to-eat cereal, baby food, ski resorts).
Andrew C. Taylor Chief Executive Officer and President, Enterprise Rent-A-Car (car
Enterprise Rent-A-Car rental).
600 Corporate Park Drive
St. Louis, Missouri 63105
36
<PAGE> 39
<CAPTION>
NAME PRINCIPAL OCCUPATIONS(S)
---- DURING PAST FIVE YEARS<F*>
--------------------------
DIRECTORS (CONTINUED)
- ---------------------
<S> <C>
H. Edwin Trusheim Retired Chairman and Chief Executive Officer, General American
General American Life Insurance Co. Life Insurance Company
P.O. Box 396
St. Louis, MO 63166
Robert L. Virgil Principal, Edward Jones (investments).
Edward Jones
12555 Manchester
St. Louis, Missouri 63131-3729
Virginia V. Weldon, M.D. Director, Center for the Study of American Business, Washington
Monsanto Company University. Retired Senior Vice President, Public Policy, Monsanto
800 North Lindbergh Company (chemicals diversified industry, pharmaceuticals, life
St. Louis, Missouri 63167 science products, and food ingredients business).
Ted C. Wetterau
Wetterau Associates, L.L.C. President, Wetterau Associates, L.L.C. Retired Chairman and Chief
7700 Bonhomme, Suite 750 Executive Officer, Wetterau Incorporated (retail and wholesale
St. Louis, Missouri 63105 grocery, manufacturing business).
<FN>
<F*>All positions listed are with General American unless otherwise indicated.
</TABLE>
37
<PAGE> 40
LEGAL MATTERS
All matters of Missouri law pertaining to the Policy, including the validity
of the Policy and General American's right to issue the Policy under Missouri
insurance law, have been passed upon by Matthew P. McCauley, Vice President
and Associate General Counsel of General American.
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. General American is
not involved in any litigation that is of material importance in relation to
its total assets or that relates to the Separate Account.
EXPERTS
The audited financial statements of General American and the Separate Account
have been included in this Prospectus in reliance on the reports of KPMG Peat
Marwick LLP independent certified public accountants, and on the authority of
said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the December 31, 1997 financial
statements of General American refers to the adoption of Statement of
Financial Accounting Standards No. 120, Accounting and Reporting by Mutual
Life Insurance Enterprises and by Insurance Enterprises for Certain
Long-Duration Participating Contracts.
Actuarial matters included in this Prospectus have been examined by Susan
Benjamin, FSA, MAAA, Senior Product Actuary of General American, as stated
in the opinion filed as an exhibit to the registration statement.
ADDITIONAL 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
Policy offered hereby. This Prospectus does not contain all the information
set forth in the registration statement and the amendments and exhibits to
the registration statement, to all of which reference is made for further
information concerning the Separate Account, General American and the Policy
offered hereby. Statements contained in this Prospectus as to the contents
of the Policy and other legal instruments are summaries. For a complete
statement of the terms thereof reference is made to such instruments as
filed.
Like all financial services providers, General American utilizes systems that
may be affected by the Year 2000 transition issues, and it relies on services
providers, including the Funds, that may also be affected. The Company has
developed, and is in the process of implementing, a Year 2000 transition
plan, and is confirming that its services providers are also so engaged. The
resources that are being devoted to this effort are substantial. It is
difficult to predict with precision whether the amount of resources
ultimately devoted, or the outcome of these efforts, will have any negative
impact on the Company. However, as of the date of this prospectus, we do not
anticipate that Policy Owners will experience negative effects on their
investment, or on the services provided in connection therewith, as a result
of Year 2000 transition implementation. General American currently
anticipates that its systems will be Year 2000 compliant, but there can be no
assurance that the Company will be successful, or that interaction with other
service providers will not impair the Company's services at that time.
FINANCIAL STATEMENTS
The financial statements of General American which are included in this
Prospectus should be distinguished from the financial statements of the
Separate Account, and should be considered only as bearing on the ability of
General American to meet its obligations under the Policy. They should not
be considered as bearing on the investment performance of the assets held in
the Separate Account. Financial information is not provided for four of the
seventeen Divisions of the Separate Account because those Divisions have only
recently been established, and therefore no operating history exists for
those Divisions.
Interim financial statements for General American or the Separate Account are
not part of this prospectus because General American does not prepare audited
financial statements more often than annually, and believes that any
incremental benefit to prospective Policy Owners that may result from
preparing and delivering more current financial statements, though unaudited,
does not justify the additional cost that would be incurred. General American
represents that there have been no adverse changes in the financial condition
or operations of General American or the Separate Account between the end of
the most recent fiscal year and the date of this prospectus.
38
<PAGE> 41
APPENDIX A
Illustrations of Death Benefits and Cash Values
The following tables illustrate how the Cash Value, Cash Surrender Value, and
death benefit of a Policy change with the investment experience of a Division
of the Separate Account. The tables show how the Cash Value, Cash Surrender
Value, and death benefit of a Policy issued to Insureds of a given age and at
a given premium would vary over time if the investment return on the assets
held in each Division of the Separate Account were a uniform, gross,
after-tax annual rate of 0%, 6%, or 12%. The tables illustrate a Policy
issued in Missouri (using a 2% premium tax rate and a 1.3% federal tax charge)
to a male and a female Insured, for both ages 35 and 50, in a preferred
nonsmoker rate class. If either Insured falls into a smoker rate class, the
Cash Values, Cash Surrender Values, and death benefits would be lower than
those shown in the tables. In addition, the Cash Values, Cash Surrender
Values, and death benefits would be different from those shown if the gross
annual investment rates of return averaged 0%, 6%, and 12% over a period of
years, but fluctuated above and below those averages for individual Policy
Years.
The Cash Value column under the "Guaranteed" heading shows the accumulated
value of the Net Premiums paid at the stated interest rate, reflecting
deduction of all policy charges described in this prospectus at the
guaranteed maximum rate. The Cash Surrender Value column under the
"Guaranteed" heading shows the projected Cash Surrender Value of the Policy,
which is calculated by taking the Cash Value under the "Guaranteed" heading
and deducting any appropriate Contingent Deferred Sales Charge. The Cash
value column under the "Current" heading shows the accumulated value of the
Net Premiums paid at the stated interest rate, reflecting deduction of all
policy charges as described in this prospectus at the current rate. The Cash
Surrender Value column under the "Current" heading shows the projected Cash
Surrender Value of the Policy, which is calculated by taking the Cash Value
under the "Current" heading and deducting any appropriate Contingent Deferred
Sales Charge. The illustrations of death benefits reflect the above
assumptions. The death benefits also vary between tables depending upon
whether Death Benefit Options A or C (Level Type) or Death Benefit Option B
(Increasing Type) are illustrated.
The amounts deducted from the Cash Value in the illustrations include the
sales charge, premium tax, federal tax charge, selection and issue expense
charge, monthly administrative charge, and cost of insurance. These charges
are described in the prospectus under Charges and Deductions.
The amounts shown for Cash Value, Cash Surrender Value, and death benefit
reflect charges that produce an investment rate of return that is lower than
the gross after-tax return on the assets held in a Division of the Separate
Account. The charges include a charge for mortality and expense risk
(equivalent to .55% for Policy Years 1-10, .45% for Policy Years 11-20, and
.35% thereafter), and an assumed .78% charge for the investment Advisory fee
and Fund administrative expenses combined, based on the average Fund expense
for all available investment Funds. The actual investment advisory fee
applicable to each Division is shown in the respective Prospectuses of each
Fund. After deduction for these amounts, the illustrated gross annual
investment rates of return of 0%, 6%, and 12% correspond to approximate
initial net annual rates of -1.33%, 4.67%, and 10.67%, respectively. The
Prospectuses for each Fund should be consulted for details about the nature
and extent of their expenses.
The hypothetical values shown in the tables do not reflect any charges for
Federal income taxes against the Separate Account (as opposed to Premium
Charges which are deducted from premium payments), since General American is
not currently making any such charges. However, such charges may be made in
the future and, in that event, the gross annual investment rate of return of
the Divisions of the Separate Account would have to exceed 0%, 6%, and 12% by
an amount sufficient to cover the tax charges in order to produce the death
benefit and Cash Value illustration. (See Federal Tax Matters.)
The tables illustrate the Policy values that would result based upon the
investment rates of return if premiums are paid as indicated, if all Net
Premiums are allocated to the Separate Account, if no Policy Loans have been
made. The tables are also based on the assumptions that the Owner has not
requested a decrease in the Face Amount, that no partial withdrawals have
been made, that no transfer charges were incurred, and that no optional
riders have been requested.
Upon request, General American will provide a comparable illustration based
upon the proposed Insureds' age, sex, and rate class, the Face Amount or
premium requested, the proposed frequency of premium payments, and any
available riders requested.
39
<PAGE> 42
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 952 1,245 250,000 952 1,245 250,000
2 36 36 2,000 4,305 2,468 2,761 250,000 2,468 2,761 250,000
3 37 37 2,000 6,620 3,964 4,257 250,000 3,964 4,257 250,000
4 38 38 2,000 9,051 5,438 5,731 250,000 5,438 5,731 250,000
5 39 39 2,000 11,604 6,890 7,182 250,000 6,890 7,182 250,000
6 40 40 2,000 14,284 8,353 8,613 250,000 8,353 8,613 250,000
7 41 41 2,000 17,098 9,824 10,019 250,000 9,824 10,019 250,000
8 42 42 2,000 20,053 11,274 11,404 250,000 11,274 11,404 250,000
9 43 43 2,000 23,156 12,705 12,770 250,000 12,702 12,767 250,000
10 44 44 2,000 26,414 14,115 14,115 250,000 14,104 14,104 250,000
11 45 45 2,000 29,834 15,718 15,718 250,000 15,695 15,695 250,000
12 46 46 2,000 33,426 17,301 17,301 250,000 17,261 17,261 250,000
13 47 47 2,000 37,197 18,866 18,866 250,000 18,798 18,798 250,000
14 48 48 2,000 41,157 20,407 20,407 250,000 20,307 20,307 250,000
15 49 49 2,000 45,315 21,929 21,929 250,000 21,787 21,787 250,000
16 50 50 2,000 49,681 23,430 23,430 250,000 23,235 23,235 250,000
17 51 51 2,000 54,265 24,909 24,909 250,000 24,651 24,651 250,000
18 52 52 2,000 59,078 26,366 26,366 250,000 26,030 26,030 250,000
19 53 53 2,000 64,132 27,802 27,802 250,000 27,371 27,371 250,000
20 54 54 2,000 69,439 29,218 29,218 250,000 28,669 28,669 250,000
21 55 55 2,000 75,010 30,641 30,641 250,000 29,951 29,951 250,000
22 56 56 2,000 80,861 32,041 32,041 250,000 31,185 31,185 250,000
23 57 57 2,000 87,004 33,420 33,420 250,000 32,363 32,363 250,000
24 58 58 2,000 93,454 34,774 34,774 250,000 33,481 33,481 250,000
25 59 59 2,000 100,227 36,099 36,099 250,000 34,536 34,536 250,000
26 60 60 2,000 107,338 37,397 37,397 250,000 35,515 35,515 250,000
27 61 61 2,000 114,805 38,662 38,662 250,000 36,409 36,409 250,000
28 62 62 2,000 122,645 39,895 39,895 250,000 37,202 37,202 250,000
29 63 63 2,000 130,878 41,088 41,088 250,000 37,875 37,875 250,000
30 64 64 2,000 139,522 42,241 42,241 250,000 38,403 38,403 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
40
<PAGE> 43
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,042 1,334 250,000 1,042 1,334 250,000
2 36 36 2,000 4,305 2,738 3,030 250,000 2,738 3,030 250,000
3 37 37 2,000 6,620 4,513 4,806 250,000 4,513 4,806 250,000
4 38 38 2,000 9,051 6,369 6,661 250,000 6,369 6,661 250,000
5 39 39 2,000 11,604 8,309 8,601 250,000 8,309 8,601 250,000
6 40 40 2,000 14,284 10,369 10,629 250,000 10,369 10,629 250,000
7 41 41 2,000 17,098 12,552 12,747 250,000 12,552 12,747 250,000
8 42 42 2,000 20,053 14,832 14,962 250,000 14,832 14,962 250,000
9 43 43 2,000 23,156 17,214 17,279 250,000 17,211 17,276 250,000
10 44 44 2,000 26,414 19,702 19,702 250,000 19,690 19,690 250,000
11 45 45 2,000 29,834 22,529 22,529 250,000 22,506 22,506 250,000
12 46 46 2,000 33,426 25,492 25,492 250,000 25,449 25,449 250,000
13 47 47 2,000 37,197 28,596 28,596 250,000 28,523 28,523 250,000
14 48 48 2,000 41,157 31,845 31,845 250,000 31,736 31,736 250,000
15 49 49 2,000 45,315 35,249 35,249 250,000 35,092 35,092 250,000
16 50 50 2,000 49,681 38,813 38,813 250,000 38,597 38,597 250,000
17 51 51 2,000 54,265 42,544 42,544 250,000 42,255 42,255 250,000
18 52 52 2,000 59,078 46,450 46,450 250,000 46,070 46,070 250,000
19 53 53 2,000 64,132 50,540 50,540 250,000 50,048 50,048 250,000
20 54 54 2,000 69,439 54,823 54,823 250,000 54,195 54,195 250,000
21 55 55 2,000 75,010 59,361 59,361 250,000 58,570 58,570 250,000
22 56 56 2,000 80,861 64,116 64,116 250,000 63,130 63,130 250,000
23 57 57 2,000 87,004 69,098 69,098 250,000 67,881 67,881 250,000
24 58 58 2,000 93,454 74,315 74,315 250,000 72,828 72,828 250,000
25 59 59 2,000 100,227 79,778 79,778 250,000 77,980 77,980 250,000
26 60 60 2,000 107,338 85,498 85,498 250,000 83,338 83,338 250,000
27 61 61 2,000 114,805 91,484 91,484 250,000 88,909 88,909 250,000
28 62 62 2,000 122,645 97,751 97,751 250,000 94,695 94,695 250,000
29 63 63 2,000 130,878 104,309 104,309 250,000 100,695 100,695 250,000
30 64 64 2,000 139,522 111,171 111,171 250,000 106,910 106,910 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
41
<PAGE> 44
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,132 1,424 250,000 1,132 1,424 250,000
2 36 36 2,000 4,305 3,019 3,311 250,000 3,019 3,311 250,000
3 37 37 2,000 6,620 5,107 5,399 250,000 5,107 5,399 250,000
4 38 38 2,000 9,051 7,415 7,708 250,000 7,415 7,708 250,000
5 39 39 2,000 11,604 9,968 10,260 250,000 9,968 10,260 250,000
6 40 40 2,000 14,284 12,822 13,082 250,000 12,822 13,082 250,000
7 41 41 2,000 17,098 16,006 16,201 250,000 16,006 16,201 250,000
8 42 42 2,000 20,053 19,520 19,650 250,000 19,520 19,650 250,000
9 43 43 2,000 23,156 23,401 23,466 250,000 23,397 23,462 250,000
10 44 44 2,000 26,414 27,686 27,686 250,000 27,675 27,675 250,000
11 45 45 2,000 29,834 32,667 32,667 250,000 32,643 32,643 250,000
12 46 46 2,000 33,426 38,185 38,185 250,000 38,140 38,140 250,000
13 47 47 2,000 37,197 44,297 44,297 250,000 44,221 44,221 250,000
14 48 48 2,000 41,157 51,065 51,065 250,000 50,950 50,950 250,000
15 49 49 2,000 45,315 58,563 58,563 250,000 58,395 58,395 250,000
16 50 50 2,000 49,681 66,866 66,866 250,000 66,633 66,633 250,000
17 51 51 2,000 54,265 76,062 76,062 250,000 75,749 75,749 250,000
18 52 52 2,000 59,078 86,247 86,247 250,000 85,834 85,834 250,000
19 53 53 2,000 64,132 97,528 97,528 250,000 96,995 96,995 250,000
20 54 54 2,000 69,439 110,023 110,023 250,000 109,347 109,347 250,000
21 55 55 2,000 75,010 123,975 123,975 250,000 123,130 123,130 250,000
22 56 56 2,000 80,861 139,442 139,442 250,000 138,404 138,404 250,000
23 57 57 2,000 87,004 156,591 156,591 250,000 155,335 155,335 250,000
24 58 58 2,000 93,454 175,607 175,607 250,000 174,110 174,110 250,000
25 59 59 2,000 100,227 196,690 196,690 250,000 194,935 194,935 261,213
26 60 60 2,000 107,338 220,062 220,062 250,000 218,014 218,014 283,418
27 61 61 2,000 114,805 245,968 245,968 250,000 243,570 243,570 311,770
28 62 62 2,000 122,645 274,681 274,681 250,000 271,868 271,868 342,553
29 63 63 2,000 130,878 306,505 306,505 250,000 303,196 303,196 375,963
30 64 64 2,000 139,522 341,777 341,777 250,000 337,874 337,874 412,207
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
42
<PAGE> 45
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 952 1,245 251,245 952 1,245 251,245
2 36 36 2,000 4,305 2,468 2,761 252,761 2,468 2,761 252,761
3 37 37 2,000 6,620 3,964 4,257 254,257 3,964 4,257 254,257
4 38 38 2,000 9,051 5,438 5,731 255,731 5,438 5,731 255,731
5 39 39 2,000 11,604 6,890 7,182 257,182 6,890 7,182 257,182
6 40 40 2,000 14,284 8,352 8,612 258,612 8,352 8,612 258,612
7 41 41 2,000 17,098 9,823 10,018 260,018 9,823 10,018 260,018
8 42 42 2,000 20,053 11,272 11,402 261,402 11,272 11,402 261,402
9 43 43 2,000 23,156 12,702 12,767 262,767 12,698 12,763 262,763
10 44 44 2,000 26,414 14,111 14,111 264,111 14,099 14,099 264,099
11 45 45 2,000 29,834 15,712 15,712 265,712 15,688 15,688 265,688
12 46 46 2,000 33,426 17,294 17,294 267,294 17,251 17,251 267,251
13 47 47 2,000 37,197 18,757 18,757 268,857 18,784 18,784 268,784
14 48 48 2,000 41,157 20,396 20,396 270,396 20,288 20,288 270,288
15 49 49 2,000 45,315 21,916 21,916 271,916 21,762 21,762 271,762
16 50 50 2,000 49,681 23,414 23,414 273,414 23,202 23,202 273,202
17 51 51 2,000 54,265 24,890 24,890 274,890 24,608 24,608 274,608
18 52 52 2,000 59,078 26,344 26,344 276,344 25,974 25,974 275,974
19 53 53 2,000 64,132 27,776 27,776 277,776 27,298 27,298 277,298
20 54 54 2,000 69,439 29,187 29,187 279,187 28,577 28,577 278,577
21 55 55 2,000 75,010 30,603 30,603 280,603 29,833 29,833 279,833
22 56 56 2,000 80,861 31,996 31,996 281,996 31,035 31,035 281,035
23 57 57 2,000 87,004 33,366 33,366 283,366 32,174 32,174 282,174
24 58 58 2,000 93,454 34,710 34,710 284,710 33,246 33,246 283,246
25 59 59 2,000 100,227 36,022 36,022 286,022 34,243 34,243 284,243
26 60 60 2,000 107,338 37,305 37,305 287,305 35,153 35,153 285,153
27 61 61 2,000 114,805 38,550 38,550 288,550 35,963 35,963 285,963
28 62 62 2,000 122,645 39,759 39,759 289,759 36,656 36,656 286,656
29 63 63 2,000 130,878 40,923 40,923 290,923 37,206 37,206 287,206
30 64 64 2,000 139,522 42,040 42,040 292,040 37,585 37,585 287,585
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
43
<PAGE> 46
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,042 1,334 251,334 1,042 1,334 251,334
2 36 36 2,000 4,305 2,738 3,030 253,030 2,738 3,030 253,030
3 37 37 2,000 6,620 4,513 4,806 254,806 4,513 4,806 254,806
4 38 38 2,000 9,051 6,369 6,661 256,661 6,369 6,661 256,661
5 39 39 2,000 11,604 8,308 8,601 258,601 8,308 8,601 258,601
6 40 40 2,000 14,284 10,369 10,629 260,629 10,369 10,629 260,629
7 41 41 2,000 17,098 12,551 12,746 262,746 12,551 12,746 262,746
8 42 42 2,000 20,053 14,829 14,959 264,959 14,829 14,959 264,959
9 43 43 2,000 23,156 17,210 17,275 267,275 17,206 17,271 267,271
10 44 44 2,000 26,414 19,696 19,696 269,696 19,683 19,683 269,683
11 45 45 2,000 29,834 22,521 22,521 272,521 22,495 22,495 272,495
12 46 46 2,000 33,426 25,481 25,481 275,481 25,433 25,433 275,433
13 47 47 2,000 37,197 28,582 28,582 278,582 28,501 28,501 278,501
14 48 48 2,000 41,157 31,827 31,827 281,827 31,705 31,705 281,705
15 49 49 2,000 45,315 35,226 35,226 285,226 35,050 35,050 285,050
16 50 50 2,000 49,681 38,785 38,785 288,785 38,538 38,538 288,538
17 51 51 2,000 54,265 42,509 42,509 292,509 42,175 42,175 292,175
18 52 52 2,000 59,078 46,406 46,406 296,406 45,962 45,962 295,962
19 53 53 2,000 64,132 50,486 50,486 300,486 49,905 49,905 299,905
20 54 54 2,000 69,439 54,756 54,756 304,756 54,005 54,005 304,005
21 55 55 2,000 75,010 59,278 59,278 309,278 58,318 58,318 308,318
22 56 56 2,000 80,861 64,013 64,013 314,013 62,800 62,800 312,800
23 57 57 2,000 87,004 68,972 68,972 318,972 67,450 67,450 317,450
24 58 58 2,000 93,454 74,159 74,159 324,159 72,269 72,269 322,269
25 59 59 2,000 100,227 79,584 79,584 329,584 77,260 77,260 327,260
26 60 60 2,000 107,338 85,257 85,257 335,257 82,414 82,414 332,414
27 61 61 2,000 114,805 91,183 91,183 341,183 87,728 87,728 337,728
28 62 62 2,000 122,645 97,374 97,374 347,374 93,188 93,188 343,188
29 63 63 2,000 130,878 103,835 103,835 353,835 98,776 98,776 348,776
30 64 64 2,000 139,522 110,576 110,576 360,576 104,465 104,465 354,465
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
44
<PAGE> 47
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,132 1,424 251,424 1,132 1,424 251,424
2 36 36 2,000 4,305 3,019 3,311 253,311 3,019 3,311 253,311
3 37 37 2,000 6,620 5,107 5,399 255,399 5,107 5,399 255,399
4 38 38 2,000 9,051 7,415 7,708 257,708 7,415 7,708 257,708
5 39 39 2,000 11,604 9,967 10,260 260,260 9,967 10,260 260,260
6 40 40 2,000 14,284 12,821 13,081 263,081 12,821 13,081 263,081
7 41 41 2,000 17,098 16,004 16,199 266,199 16,004 16,199 266,199
8 42 42 2,000 20,053 19,516 19,646 269,646 19,516 19,646 269,646
9 43 43 2,000 23,156 23,395 23,460 273,460 23,391 23,456 273,456
10 44 44 2,000 26,414 27,677 27,677 277,677 27,664 27,664 277,664
11 45 45 2,000 29,834 32,654 32,654 282,654 32,627 32,627 282,627
12 46 46 2,000 33,426 38,168 38,168 288,168 38,116 38,116 288,116
13 47 47 2,000 37,197 44,275 44,275 294,275 44,185 44,185 294,185
14 48 48 2,000 41,157 51,035 51,035 301,035 50,898 50,898 300,898
15 49 49 2,000 45,315 58,523 58,523 308,523 58,320 58,320 308,320
16 50 50 2,000 49,681 66,814 66,814 316,814 66,526 66,526 316,526
17 51 51 2,000 54,265 75,994 75,994 325,994 75,597 75,597 325,597
18 52 52 2,000 59,078 86,158 86,158 336,158 85,622 85,622 335,622
19 53 53 2,000 64,132 97,413 97,413 347,413 96,700 96,700 346,700
20 54 54 2,000 69,439 109,876 109,876 359,876 108,940 108,940 358,940
21 55 55 2,000 75,010 123,786 123,786 373,786 122,569 122,569 372,569
22 56 56 2,000 80,861 139,198 139,198 389,198 137,637 137,637 387,637
23 57 57 2,000 87,004 156,279 156,279 406,279 154,291 154,291 404,291
24 58 58 2,000 93,454 175,204 175,204 425,204 172,698 172,698 422,698
25 59 59 2,000 100,227 196,170 196,170 446,170 193,039 193,039 443,039
26 60 60 2,000 107,338 219,399 219,399 469,399 215,511 215,511 465,511
27 61 61 2,000 114,805 245,129 245,129 495,129 240,330 240,330 490,330
28 62 62 2,000 122,645 273,632 273,632 523,632 267,732 267,732 517,732
29 63 63 2,000 130,878 305,201 305,201 555,201 297,971 297,971 547,971
30 64 64 2,000 139,522 340,165 340,165 590,165 331,321 331,321 581,321
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
45
<PAGE> 48
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 952 1,245 250,000 952 1,245 250,000
2 36 36 2,000 4,305 2,468 2,761 250,000 2,468 2,761 250,000
3 37 37 2,000 6,620 3,964 4,257 250,000 3,964 4,257 250,000
4 38 38 2,000 9,051 5,438 5,731 250,000 5,438 5,731 250,000
5 39 39 2,000 11,604 6,890 7,182 250,000 6,890 7,182 250,000
6 40 40 2,000 14,284 8,353 8,613 250,000 8,353 8,613 250,000
7 41 41 2,000 17,098 9,824 10,019 250,000 9,824 10,019 250,000
8 42 42 2,000 20,053 11,274 11,404 250,000 11,274 11,404 250,000
9 43 43 2,000 23,156 12,705 12,770 250,000 12,702 12,767 250,000
10 44 44 2,000 26,414 14,115 14,115 250,000 14,104 14,104 250,000
11 45 45 2,000 29,834 15,718 15,718 250,000 15,695 15,695 250,000
12 46 46 2,000 33,426 17,301 17,301 250,000 17,261 17,261 250,000
13 47 47 2,000 37,197 18,866 18,866 250,000 18,798 18,798 250,000
14 48 48 2,000 41,157 20,407 20,407 250,000 20,307 20,307 250,000
15 49 49 2,000 45,315 21,929 21,929 250,000 21,787 21,787 250,000
16 50 50 2,000 49,681 23,430 23,430 250,000 23,235 23,235 250,000
17 51 51 2,000 54,265 24,909 24,909 250,000 24,651 24,651 250,000
18 52 52 2,000 59,078 26,366 26,366 250,000 26,030 26,030 250,000
19 53 53 2,000 64,132 27,802 27,802 250,000 27,371 27,371 250,000
20 54 54 2,000 69,439 29,218 29,218 250,000 28,669 28,669 250,000
21 55 55 2,000 75,010 30,641 30,641 250,000 29,951 29,951 250,000
22 56 56 2,000 80,861 32,041 32,041 250,000 31,185 31,185 250,000
23 57 57 2,000 87,004 33,420 33,420 250,000 32,363 32,363 250,000
24 58 58 2,000 93,454 34,774 34,774 250,000 33,481 33,481 250,000
25 59 59 2,000 100,227 36,099 36,099 250,000 34,536 34,536 250,000
26 60 60 2,000 107,338 37,397 37,397 250,000 35,515 35,515 250,000
27 61 61 2,000 114,805 38,662 38,662 250,000 36,409 36,409 250,000
28 62 62 2,000 122,645 39,895 39,895 250,000 37,202 37,202 250,000
29 63 63 2,000 130,878 41,088 41,088 250,000 37,875 37,875 250,000
30 64 64 2,000 139,522 42,241 42,241 250,000 38,403 38,403 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
46
<PAGE> 49
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,042 1,334 250,000 1,042 1,334 250,000
2 36 36 2,000 4,305 2,738 3,030 250,000 2,738 3,030 250,000
3 37 37 2,000 6,620 4,513 4,806 250,000 4,513 4,806 250,000
4 38 38 2,000 9,051 6,369 6,661 250,000 6,369 6,661 250,000
5 39 39 2,000 11,604 8,309 8,601 250,000 8,309 8,601 250,000
6 40 40 2,000 14,284 10,369 10,629 250,000 10,369 10,629 250,000
7 41 41 2,000 17,098 12,552 12,747 250,000 12,552 12,747 250,000
8 42 42 2,000 20,053 14,832 14,962 250,000 14,832 14,962 250,000
9 43 43 2,000 23,156 17,279 17,279 250,000 17,211 17,276 250,000
10 44 44 2,000 26,414 19,702 19,702 250,000 19,690 19,690 250,000
11 45 45 2,000 29,834 22,529 22,529 250,000 22,506 22,506 250,000
12 46 46 2,000 33,426 25,492 25,492 250,000 25,449 25,449 250,000
13 47 47 2,000 37,197 28,596 28,596 250,000 28,523 28,523 250,000
14 48 48 2,000 41,157 31,845 31,845 250,000 31,736 31,736 250,000
15 49 49 2,000 45,315 35,249 35,249 250,000 35,092 35,092 250,000
16 50 50 2,000 49,681 38,813 38,813 250,000 38,597 38,597 250,000
17 51 51 2,000 54,265 42,544 42,544 250,000 42,255 42,255 250,000
18 52 52 2,000 59,078 46,450 46,450 250,000 46,070 46,070 250,000
19 53 53 2,000 64,132 50,540 50,540 250,000 50,048 50,048 250,000
20 54 54 2,000 69,439 54,823 54,823 250,000 54,195 54,195 250,000
21 55 55 2,000 75,010 59,361 59,361 250,000 58,570 58,570 250,000
22 56 56 2,000 80,861 64,116 64,116 250,000 63,130 63,130 250,000
23 57 57 2,000 87,004 69,098 69,098 250,000 67,881 67,881 250,000
24 58 58 2,000 93,454 74,315 74,315 250,000 72,828 72,828 250,000
25 59 59 2,000 100,227 79,778 79,778 250,000 77,980 77,980 250,000
26 60 60 2,000 107,338 85,498 85,498 250,000 83,338 83,338 250,000
27 61 61 2,000 114,805 91,484 91,484 250,000 88,909 88,909 250,000
28 62 62 2,000 122,645 97,751 97,751 250,000 94,695 94,695 250,000
29 63 63 2,000 130,878 104,309 104,309 250,000 100,695 100,695 250,000
30 64 64 2,000 139,522 111,171 111,171 250,000 106,910 106,910 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
47
<PAGE> 50
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 35
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 35
ANNUAL PREMIUM = $2,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 35 35 2,000 2,100 1,132 1,424 250,000 1,132 1,424 250,000
2 36 36 2,000 4,305 3,019 3,311 250,000 3,019 3,311 250,000
3 37 37 2,000 6,620 5,107 5,399 250,000 5,107 5,399 250,000
4 38 38 2,000 9,051 7,415 7,708 250,000 7,415 7,708 250,000
5 39 39 2,000 11,604 9,968 10,260 250,000 9,968 10,260 250,000
6 40 40 2,000 14,284 12,822 13,082 250,000 12,822 13,082 250,000
7 41 41 2,000 17,098 16,006 16,201 250,000 16,006 16,201 250,000
8 42 42 2,000 20,053 19,520 19,650 250,000 19,520 19,650 250,000
9 43 43 2,000 23,156 23,401 23,466 250,000 23,397 23,462 250,000
10 44 44 2,000 26,414 27,686 27,686 250,000 27,675 27,675 250,000
11 45 45 2,000 29,834 32,667 32,667 250,000 32,643 32,643 250,000
12 46 46 2,000 33,426 38,185 38,185 250,000 38,140 38,140 250,000
13 47 47 2,000 37,197 44,297 44,297 250,000 44,221 44,221 250,000
14 48 48 2,000 41,157 51,065 51,065 250,000 50,950 50,950 250,000
15 49 49 2,000 45,315 58,563 58,563 250,000 58,395 58,395 250,000
16 50 50 2,000 49,681 66,866 66,866 250,000 66,633 66,633 250,000
17 51 51 2,000 54,265 76,062 76,062 265,455 75,747 75,747 264,357
18 52 52 2,000 59,078 86,242 86,242 289,714 85,819 85,819 288,293
19 53 53 2,000 64,132 97,514 97,514 315,350 96,947 96,947 313,518
20 54 54 2,000 69,439 109,993 109,993 342,486 109,237 109,237 340,132
21 55 55 2,000 75,010 123,919 123,919 371,570 122,914 122,914 368,558
22 56 56 2,000 80,861 139,346 139,346 402,445 138,023 138,023 398,623
23 57 57 2,000 87,004 156,438 156,438 435,274 154,702 154,702 430,443
24 58 58 2,000 93,454 175,371 175,371 470,204 173,111 173,111 464,146
25 59 59 2,000 100,227 196,336 196,336 507,372 193,422 193,422 499,841
26 60 60 2,000 107,338 219,555 219,555 546,999 215,814 215,814 537,680
27 61 61 2,000 114,805 245,258 245,258 589,258 240,487 240,487 577,795
28 62 62 2,000 122,645 273,714 273,714 634,386 267,650 267,650 620,332
29 63 63 2,000 130,878 305,205 305,205 682,622 297,522 297,522 665,438
30 64 64 2,000 139,522 340,053 340,053 734,243 330,334 330,334 713,256
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
48
<PAGE> 51
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,147 2,822 250,000 2,147 2,822 250,000
2 51 51 4,000 8,610 5,294 5,969 250,000 5,294 5,969 250,000
3 52 52 4,000 13,241 8,398 9,073 250,000 8,385 9,060 250,000
4 53 53 4,000 18,103 11,458 12,133 250,000 11,419 12,094 250,000
5 54 54 4,000 23,208 14,477 15,152 250,000 14,393 15,068 250,000
6 55 55 4,000 28,568 17,528 18,128 250,000 17,377 17,977 250,000
7 56 56 4,000 34,196 20,614 21,064 250,000 20,367 20,817 250,000
8 57 57 4,000 40,106 23,656 23,956 250,000 23,285 23,585 250,000
9 58 58 4,000 46,312 26,655 26,805 250,000 26,126 26,276 250,000
10 59 59 4,000 52,827 29,610 29,610 250,000 28,886 28,886 250,000
11 60 60 4,000 59,669 32,866 32,866 250,000 31,899 31,899 250,000
12 61 61 4,000 66,852 36,071 36,071 250,000 34,812 34,812 250,000
13 62 62 4,000 74,395 39,227 39,227 250,000 37,609 37,609 250,000
14 63 63 4,000 82,314 42,326 42,326 250,000 40,277 40,277 250,000
15 64 64 4,000 90,630 45,370 45,370 250,000 42,794 42,794 250,000
16 65 65 4,000 99,361 48,335 48,335 250,000 45,138 45,138 250,000
17 66 66 4,000 108,530 51,233 51,233 250,000 47,290 47,290 250,000
18 67 67 4,000 118,156 54,056 54,056 250,000 49,228 49,228 250,000
19 68 68 4,000 128,264 56,798 56,798 250,000 50,928 50,928 250,000
20 69 69 4,000 138,877 59,449 59,449 250,000 52,361 52,361 250,000
21 70 70 4,000 150,021 62,065 62,065 250,000 53,539 53,539 250,000
22 71 71 4,000 161,722 64,572 64,572 250,000 54,334 54,334 250,000
23 72 72 4,000 174,008 66,955 66,955 250,000 54,701 54,701 250,000
24 73 73 4,000 186,908 69,196 69,196 250,000 54,525 54,525 250,000
25 74 74 4,000 200,454 71,273 71,273 250,000 53,687 53,687 250,000
26 75 75 4,000 214,677 73,159 73,159 250,000 52,062 52,062 250,000
27 76 76 4,000 229,610 74,819 74,819 250,000 49,511 49,511 250,000
28 77 77 4,000 245,291 76,213 76,213 250,000 45,877 45,877 250,000
29 78 78 4,000 261,755 77,289 77,289 250,000 40,978 40,978 250,000
30 79 79 4,000 279,043 77,990 77,990 250,000 34,581 34,581 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
49
<PAGE> 52
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,337 3,012 250,000 2,337 3,012 250,000
2 51 51 4,000 8,610 5,868 6,543 250,000 5,868 6,543 250,000
3 52 52 4,000 13,241 9,563 10,238 250,000 9,550 10,225 250,000
4 53 53 4,000 18,103 13,427 14,102 250,000 13,387 14,062 250,000
5 54 54 4,000 23,208 17,473 18,148 250,000 17,382 18,057 250,000
6 55 55 4,000 28,568 21,778 22,378 250,000 21,615 22,215 250,000
7 56 56 4,000 34,196 26,357 26,807 250,000 26,087 26,537 250,000
8 57 57 4,000 40,106 31,136 31,436 250,000 30,727 31,027 250,000
9 58 58 4,000 46,312 36,129 36,279 250,000 35,538 35,688 250,000
10 59 59 4,000 52,827 41,342 41,342 250,000 40,524 40,524 250,000
11 60 60 4,000 59,669 47,160 47,160 250,000 46,059 46,059 250,000
12 61 61 4,000 66,852 53,245 53,245 250,000 51,801 51,801 250,000
13 62 62 4,000 74,395 59,614 59,614 250,000 57,748 57,748 250,000
14 63 63 4,000 82,314 66,270 66,270 250,000 63,897 63,897 250,000
15 64 64 4,000 90,630 73,231 73,231 250,000 70,244 70,244 250,000
16 65 65 4,000 99,361 80,489 80,489 250,000 76,783 76,783 250,000
17 66 66 4,000 108,530 88,071 88,071 250,000 83,512 83,512 250,000
18 67 67 4,000 118,156 95,987 95,987 250,000 90,432 90,432 250,000
19 68 68 4,000 128,264 104,251 104,251 250,000 97,542 97,542 250,000
20 69 69 4,000 138,877 112,875 112,875 250,000 104,845 104,845 250,000
21 70 70 4,000 150,021 121,991 121,991 250,000 112,444 112,444 250,000
22 71 71 4,000 161,722 131,513 131,513 250,000 120,223 120,223 250,000
23 72 72 4,000 174,008 141,460 141,460 250,000 128,196 128,196 250,000
24 73 73 4,000 186,908 151,852 151,852 250,000 136,338 136,338 250,000
25 74 74 4,000 200,454 162,715 162,715 250,000 144,644 144,644 250,000
26 75 75 4,000 214,677 174,076 174,076 250,000 153,123 153,123 250,000
27 76 76 4,000 229,610 185,971 185,971 250,000 161,805 161,805 250,000
28 77 77 4,000 245,291 198,445 198,445 250,000 170,739 170,739 250,000
29 78 78 4,000 261,755 211,554 211,554 250,000 179,999 179,999 250,000
30 79 79 4,000 279,043 225,377 225,377 250,000 189,682 189,682 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
50
<PAGE> 53
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION A) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,527 3,202 250,000 2,527 3,202 250,000
2 51 51 4,000 8,610 6,465 7,140 250,000 6,465 7,140 250,000
3 52 52 4,000 13,241 10,823 11,498 250,000 10,809 11,484 250,000
4 53 53 4,000 18,103 15,642 16,317 250,000 15,599 16,274 250,000
5 54 54 4,000 23,208 20,976 21,651 250,000 20,880 21,555 250,000
6 55 55 4,000 28,568 26,950 27,550 250,000 26,775 27,375 250,000
7 56 56 4,000 34,196 33,630 34,080 250,000 33,336 33,786 250,000
8 57 57 4,000 40,106 41,000 41,300 250,000 40,550 40,850 250,000
9 58 58 4,000 46,312 49,139 49,289 250,000 48,482 48,632 250,000
10 59 59 4,000 52,827 58,125 58,125 250,000 57,207 57,207 250,000
11 60 60 4,000 59,669 68,459 68,459 250,000 67,213 67,213 250,000
12 61 61 4,000 66,852 79,897 79,897 250,000 78,253 78,253 250,000
13 62 62 4,000 74,395 92,563 92,563 250,000 90,433 90,433 250,000
14 63 63 4,000 82,314 106,583 106,583 250,000 103,875 103,875 250,000
15 64 64 4,000 90,630 122,107 122,107 250,000 118,715 118,715 250,000
16 65 65 4,000 99,361 139,284 139,284 250,000 135,112 135,112 250,000
17 66 66 4,000 108,530 158,307 158,307 250,000 153,251 153,251 250,000
18 67 67 4,000 118,156 179,380 179,380 250,000 173,350 173,350 250,000
19 68 68 4,000 128,264 202,732 202,732 250,000 195,666 195,666 250,000
20 69 69 4,000 138,877 228,616 228,616 265,194 220,496 220,496 255,775
21 70 70 4,000 150,021 257,506 257,506 296,131 248,216 248,216 285,449
22 71 71 4,000 161,722 289,521 289,521 327,158 278,888 278,888 315,143
23 72 72 4,000 174,008 325,000 325,000 360,750 312,838 312,838 347,250
24 73 73 4,000 186,908 364,323 364,323 397,112 350,430 350,430 381,969
25 74 74 4,000 200,454 407,913 407,913 436,467 392,084 392,084 419,530
26 75 75 4,000 214,677 456,244 456,244 479,056 438,290 438,290 460,205
27 76 76 4,000 229,610 509,781 509,781 535,270 489,344 489,344 513,811
28 77 77 4,000 245,291 569,075 569,075 597,529 545,725 545,725 573,011
29 78 78 4,000 261,755 634,728 634,728 666,464 607,953 607,953 638,351
30 79 79 4,000 279,043 707,402 707,402 742,772 676,592 676,592 710,421
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
51
<PAGE> 54
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,147 2,822 252,822 2,147 2,822 252,822
2 51 51 4,000 8,610 5,294 5,969 255,969 5,294 5,969 255,969
3 52 52 4,000 13,241 8,397 9,072 259,072 8,383 9,058 259,058
4 53 53 4,000 18,103 11,456 12,131 262,131 11,415 12,090 262,090
5 54 54 4,000 23,208 14,474 15,149 265,149 14,384 15,059 265,059
6 55 55 4,000 28,568 17,523 18,123 268,123 17,361 17,961 267,961
7 56 56 4,000 34,196 20,607 21,057 271,057 20,340 20,790 270,790
8 57 57 4,000 40,106 23,645 23,945 273,945 23,242 23,542 273,542
9 58 58 4,000 46,312 26,640 26,790 276,790 26,060 26,210 276,210
10 59 59 4,000 52,827 29,590 29,590 279,590 28,788 28,788 278,788
11 60 60 4,000 59,669 32,840 32,840 282,840 31,759 31,759 281,759
12 61 61 4,000 66,852 36,035 36,035 286,035 34,614 34,614 284,614
13 62 62 4,000 74,395 39,179 39,179 289,179 37,334 37,334 287,334
14 63 63 4,000 82,314 42,261 42,261 292,261 39,900 39,900 289,900
15 64 64 4,000 90,630 45,283 45,283 295,283 42,284 42,284 292,284
16 65 65 4,000 99,361 48,215 48,215 298,215 44,455 44,455 294,455
17 66 66 4,000 108,530 51,068 51,068 301,068 46,387 46,387 296,387
18 67 67 4,000 118,156 53,834 53,834 303,834 48,048 48,048 298,048
19 68 68 4,000 128,264 56,502 56,502 306,502 49,404 49,404 299,404
20 69 69 4,000 138,877 59,057 59,057 309,057 50,417 50,417 300,417
21 70 70 4,000 150,021 61,549 61,549 311,549 51,082 51,082 301,082
22 71 71 4,000 161,722 63,899 63,899 313,899 51,249 51,249 301,249
23 72 72 4,000 174,008 66,083 66,083 316,083 50,865 50,865 300,865
24 73 73 4,000 186,908 68,071 68,071 318,071 49,785 49,785 299,785
25 74 74 4,000 200,454 69,832 69,832 319,832 47,870 47,870 297,870
26 75 75 4,000 214,677 71,320 71,320 321,320 44,987 44,987 294,987
27 76 76 4,000 229,610 72,485 72,485 322,485 41,001 41,001 291,001
28 77 77 4,000 245,291 73,262 73,262 323,262 35,779 35,779 285,779
29 78 78 4,000 261,755 73,572 73,572 323,572 29,192 29,192 279,192
30 79 79 4,000 279,043 73,333 73,333 323,333 21,090 21,090 271,090
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
52
<PAGE> 55
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,337 3,012 253,012 2,337 3,012 253,012
2 51 51 4,000 8,610 5,867 6,542 256,542 5,867 6,542 256,542
3 52 52 4,000 13,241 9,562 10,237 260,237 9,548 10,223 260,223
4 53 53 4,000 18,103 13,425 14,100 264,100 13,382 14,057 264,057
5 54 54 4,000 23,208 17,468 18,143 268,143 17,372 18,047 268,047
6 55 55 4,000 28,568 21,771 22,371 272,371 21,595 22,195 272,195
7 56 56 4,000 34,196 26,347 26,797 276,797 26,051 26,501 276,501
8 57 57 4,000 40,106 31,121 31,421 281,421 30,668 30,968 280,968
9 58 58 4,000 46,312 36,108 36,258 286,258 35,445 35,595 285,595
10 59 59 4,000 52,827 41,312 41,312 291,312 40,381 40,381 290,381
11 60 60 4,000 59,669 47,119 47,119 297,119 45,846 45,846 295,846
12 61 61 4,000 66,852 53,188 53,188 303,188 51,489 51,489 301,489
13 62 62 4,000 74,395 59,535 59,535 309,535 57,300 57,300 307,300
14 63 63 4,000 82,314 66,160 66,160 316,160 63,262 63,262 313,262
15 64 64 4,000 90,630 73,079 73,079 323,079 69,354 69,354 319,354
16 65 65 4,000 99,361 80,272 80,272 330,272 75,547 75,547 325,547
17 66 66 4,000 108,530 87,766 87,766 337,766 81,815 81,815 331,815
18 67 67 4,000 118,156 95,562 95,562 345,562 88,128 88,128 338,128
19 68 68 4,000 128,264 103,664 103,664 353,664 94,449 94,449 344,449
20 69 69 4,000 138,877 112,071 112,071 362,071 100,734 100,734 350,734
21 70 70 4,000 150,021 120,896 120,896 370,896 107,021 107,021 357,021
22 71 71 4,000 161,722 130,035 130,035 380,035 113,110 113,110 363,110
23 72 72 4,000 174,008 139,473 139,473 389,473 118,928 118,928 368,928
24 73 73 4,000 186,908 149,196 149,196 399,196 124,308 124,308 374,308
25 74 74 4,000 200,454 159,181 159,181 409,181 129,076 129,076 379,076
26 75 75 4,000 214,677 169,392 169,392 419,392 133,057 133,057 383,057
27 76 76 4,000 229,610 179,784 179,784 429,784 136,059 136,059 386,059
28 77 77 4,000 245,291 190,295 190,295 440,295 137,889 137,889 387,889
29 78 78 4,000 261,755 200,848 200,848 450,848 138,340 138,340 388,340
30 79 79 4,000 279,043 211,352 211,352 461,352 137,175 137,175 387,175
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
53
<PAGE> 56
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION B) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,527 3,202 253,202 2,527 3,202 253,202
2 51 51 4,000 8,610 6,465 7,140 257,140 6,465 7,140 257,140
3 52 52 4,000 13,241 10,821 11,496 261,496 10,807 11,482 261,482
4 53 53 4,000 18,103 15,639 16,314 266,314 15,593 16,268 266,268
5 54 54 4,000 23,208 20,970 21,645 271,645 20,867 21,542 271,542
6 55 55 4,000 28,568 26,941 27,541 277,541 26,750 27,350 277,350
7 56 56 4,000 34,196 33,616 34,066 284,066 33,290 33,740 283,740
8 57 57 4,000 40,106 40,980 41,280 291,280 40,470 40,770 290,770
9 58 58 4,000 46,312 49,109 49,259 299,259 48,351 48,501 298,501
10 59 59 4,000 52,827 58,081 58,081 308,081 56,998 56,998 306,998
11 60 60 4,000 59,669 68,396 68,396 318,396 66,889 66,889 316,889
12 61 61 4,000 66,852 79,806 79,806 329,806 77,760 77,760 327,760
13 62 62 4,000 74,395 92,433 92,433 342,433 89,698 89,698 339,698
14 63 63 4,000 82,314 106,395 106,395 356,395 102,792 102,792 352,792
15 64 64 4,000 90,630 121,837 121,837 371,837 117,137 117,137 367,137
16 65 65 4,000 99,361 138,886 138,886 388,886 132,831 132,831 382,831
17 66 66 4,000 108,530 157,726 157,726 407,726 149,990 149,990 399,990
18 67 67 4,000 118,156 178,540 178,540 428,540 168,734 168,734 418,734
19 68 68 4,000 128,264 201,526 201,526 451,526 189,195 189,195 439,195
20 69 69 4,000 138,877 226,904 226,904 476,904 211,514 211,514 461,514
21 70 70 4,000 150,021 255,146 255,146 505,146 236,038 236,038 486,038
22 71 71 4,000 161,722 286,337 286,337 536,337 262,709 262,709 512,709
23 72 72 4,000 174,008 320,770 320,770 570,770 291,697 291,697 541,697
24 73 73 4,000 186,908 358,766 358,766 608,766 323,094 323,094 573,094
25 74 74 4,000 200,454 400,675 400,675 650,675 357,008 357,008 607,008
26 75 75 4,000 214,677 446,872 446,872 696,872 393,563 393,563 643,563
27 76 76 4,000 229,610 497,767 497,767 747,767 432,890 432,890 682,890
28 77 77 4,000 245,291 553,799 553,799 803,799 475,141 475,141 725,141
29 78 78 4,000 261,755 615,439 615,439 865,439 520,485 520,485 770,485
30 79 79 4,000 279,043 683,206 683,206 933,206 569,083 569,083 819,083
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
54
<PAGE> 57
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 0.00% (NET RATE OF -1.33%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,147 2,822 250,000 2,147 2,822 250,000
2 51 51 4,000 8,610 5,294 5,969 250,000 5,294 5,969 250,000
3 52 52 4,000 13,241 8,398 9,073 250,000 8,385 9,060 250,000
4 53 53 4,000 18,103 11,458 12,133 250,000 11,419 12,094 250,000
5 54 54 4,000 23,208 14,477 15,152 250,000 14,393 15,068 250,000
6 55 55 4,000 28,568 17,528 18,128 250,000 17,377 17,977 250,000
7 56 56 4,000 34,196 20,614 21,064 250,000 20,367 20,817 250,000
8 57 57 4,000 40,106 23,656 23,956 250,000 23,285 23,585 250,000
9 58 58 4,000 46,312 26,655 26,805 250,000 26,126 26,276 250,000
10 59 59 4,000 52,827 29,610 29,610 250,000 28,886 28,886 250,000
11 60 60 4,000 59,669 32,866 32,866 250,000 31,899 31,899 250,000
12 61 61 4,000 66,852 36,071 36,071 250,000 34,812 34,812 250,000
13 62 62 4,000 74,395 39,227 39,227 250,000 37,609 37,609 250,000
14 63 63 4,000 82,314 42,326 42,326 250,000 40,277 40,277 250,000
15 64 64 4,000 90,630 45,370 45,370 250,000 42,794 42,794 250,000
16 65 65 4,000 99,361 48,335 48,335 250,000 45,138 45,138 250,000
17 66 66 4,000 108,530 51,233 51,233 250,000 47,290 47,290 250,000
18 67 67 4,000 118,156 54,056 54,056 250,000 49,228 49,228 250,000
19 68 68 4,000 128,264 56,798 56,798 250,000 50,928 50,928 250,000
20 69 69 4,000 138,877 59,449 59,449 250,000 52,361 52,361 250,000
21 70 70 4,000 150,021 62,065 62,065 250,000 53,539 53,539 250,000
22 71 71 4,000 161,722 64,572 64,572 250,000 54,334 54,334 250,000
23 72 72 4,000 174,008 66,955 66,955 250,000 54,701 54,701 250,000
24 73 73 4,000 186,908 69,196 69,196 250,000 54,525 54,525 250,000
25 74 74 4,000 200,454 71,273 71,273 250,000 53,687 53,687 250,000
26 75 75 4,000 214,677 73,159 73,159 250,000 52,062 52,062 250,000
27 76 76 4,000 229,610 74,819 74,819 250,000 49,511 49,511 250,000
28 77 77 4,000 245,291 76,213 76,213 250,000 45,877 45,877 250,000
29 78 78 4,000 261,755 77,289 77,289 250,000 40,987 40,987 250,000
30 79 79 4,000 279,043 77,990 77,990 250,000 34,581 34,581 250,000
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
55
<PAGE> 58
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>m
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 6.00% (NET RATE OF 4.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,337 3,012 250,000 2,337 3,012 250,000
2 51 51 4,000 8,610 5,868 6,543 250,000 5,868 6,543 250,000
3 52 52 4,000 13,241 9,563 10,238 250,000 9,550 10,225 250,000
4 53 53 4,000 18,103 13,427 14,102 250,000 13,387 14,062 250,000
5 54 54 4,000 23,208 17,473 18,148 250,000 17,382 18,057 250,000
6 55 55 4,000 28,568 21,778 22,378 250,000 21,615 22,215 250,000
7 56 56 4,000 34,196 26,357 26,807 250,000 26,087 26,537 250,000
8 57 57 4,000 40,106 31,136 31,436 250,000 30,727 31,027 250,000
9 58 58 4,000 46,312 36,129 36,279 250,000 35,538 35,688 250,000
10 59 59 4,000 52,827 41,342 41,342 250,000 40,524 40,524 250,000
11 60 60 4,000 59,669 47,160 47,160 250,000 46,059 46,059 250,000
12 61 61 4,000 66,852 53,245 53,245 250,000 51,801 51,801 250,000
13 62 62 4,000 74,395 59,614 59,614 250,000 57,748 57,748 250,000
14 63 63 4,000 82,314 66,270 66,270 250,000 63,897 63,897 250,000
15 64 64 4,000 90,630 73,231 73,231 250,000 70,244 70,244 250,000
16 65 65 4,000 99,361 80,489 80,489 250,000 76,783 76,783 250,000
17 66 66 4,000 108,530 88,071 88,071 250,000 83,512 83,512 250,000
18 67 67 4,000 118,156 95,987 95,987 250,000 90,432 90,432 250,000
19 68 68 4,000 128,264 104,251 104,251 250,000 97,542 97,542 250,000
20 69 69 4,000 138,877 112,875 112,875 250,000 104,845 104,845 250,000
21 70 70 4,000 150,021 121,991 121,991 250,000 112,444 112,444 250,000
22 71 71 4,000 161,722 131,513 131,513 250,000 120,223 120,223 250,000
23 72 72 4,000 174,008 141,460 141,460 250,000 128,196 128,196 250,000
24 73 73 4,000 186,908 151,852 151,852 250,000 136,338 136,338 250,000
25 74 74 4,000 200,454 162,706 162,706 256,376 144,644 144,644 250,000
26 75 75 4,000 214,677 174,002 174,002 266,606 153,123 153,123 250,000
27 76 76 4,000 229,610 185,742 185,742 277,034 161,805 161,805 250,000
28 77 77 4,000 245,291 197,928 197,928 287,747 170,739 170,739 250,000
29 78 78 4,000 261,755 210,557 210,557 298,696 179,913 179,913 255,224
30 79 79 4,000 279,043 223,630 223,630 309,928 189,162 189,162 262,159
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
56
<PAGE> 59
<TABLE>
GENERAL AMERICAN LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM JOINT AND LAST SURVIVOR VARIABLE LIFE INSURANCE
<CAPTION>
POLICY FACE AMOUNT: $250,000 MALE PREFERRED NONSMOKER AGE 50
DEATH BENEFIT LEVEL (OPTION C) FEMALE PREFERRED NONSMOKER AGE 50
ANNUAL PREMIUM = $4,000
FOR SEPARATE ACCOUNT ELEVEN A HYPOTHETICAL GROSS ANNUAL RATE OF RETURN OF 12.00% (NET RATE OF 10.67%)
ASSUMING CURRENT CHARGES ASSUMING GUARANTEED CHARGES
------------------------ ---------------------------
END PREMIUM CASH CASH
OF ANNUAL ACCUM SURRENDER CASH DEATH SURRENDER CASH DEATH
YEAR AGE AGE PAYMENT @ 5% VALUE VALUE BENEFIT VALUE VALUE BENEFIT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 50 50 4,000 4,200 2,527 3,202 250,000 2,527 3,202 250,000
2 51 51 4,000 8,610 6,465 7,140 250,000 6,465 7,140 250,000
3 52 52 4,000 13,241 10,823 11,498 250,000 10,809 11,484 250,000
4 53 53 4,000 18,103 15,642 16,317 250,000 15,599 16,274 250,000
5 54 54 4,000 23,208 20,976 21,651 250,000 20,880 21,555 250,000
6 55 55 4,000 28,568 26,950 27,550 250,000 26,775 27,375 250,000
7 56 56 4,000 34,196 33,630 34,080 250,000 33,336 33,786 250,000
8 57 57 4,000 40,106 41,000 41,300 250,000 40,550 40,850 250,000
9 58 58 4,000 46,312 49,139 49,289 250,000 48,482 48,632 250,000
10 59 59 4,000 52,827 58,125 58,125 250,000 57,207 57,207 250,000
11 60 60 4,000 59,669 68,459 68,459 250,000 67,213 67,213 250,000
12 61 61 4,000 66,852 79,897 79,897 250,000 78,253 78,253 250,000
13 62 62 4,000 74,395 92,563 92,563 250,000 90,433 90,433 250,000
14 63 63 4,000 82,314 106,583 106,583 250,000 103,875 103,875 250,000
15 64 64 4,000 90,630 122,104 122,104 266,761 118,710 118,710 259,346
16 65 65 4,000 99,361 139,259 139,259 293,614 135,019 135,019 284,675
17 66 66 4,000 108,530 158,228 158,228 322,120 152,914 152,914 311,302
18 67 67 4,000 118,156 179,194 179,194 352,456 172,527 172,527 339,344
19 68 68 4,000 128,264 202,360 202,360 384,787 194,004 194,004 368,899
20 69 69 4,000 138,877 227,947 227,947 419,286 217,498 217,498 400,066
21 70 70 4,000 150,021 256,431 256,431 456,575 243,382 243,382 433,341
22 71 71 4,000 161,722 287,898 287,898 496,537 271,619 271,619 468,461
23 72 72 4,000 174,008 322,641 322,641 539,487 302,394 302,394 505,634
24 73 73 4,000 186,908 360,981 360,981 585,655 335,837 335,837 544,862
25 74 74 4,000 200,454 403,268 403,268 635,430 372,088 372,088 586,298
26 75 75 4,000 214,677 449,873 449,873 689,295 411,298 411,298 630,191
27 76 76 4,000 229,610 501,198 501,198 747,537 453,636 453,636 676,598
28 77 77 4,000 245,291 557,672 557,672 810,743 499,285 499,285 725,861
29 78 78 4,000 261,755 619,749 619,749 879,176 548,456 548,456 778,040
30 79 79 4,000 279,043 687,925 687,925 953,395 601,362 601,362 833,427
</TABLE>
CURRENT VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES FOR THE EXACT COMBINATION OF PREMIUMS AND BENEFITS SHOWN.
GUARANTEED VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF
INSURANCE RATES.
THE HYPOTHETICAL INVESTMENT RATE OF RETURN SHOWN ABOVE IS ILLUSTRATIVE ONLY
AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR FUTURE RESULTS. ACTUAL
INVESTMENT RESULTS MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND UPON
A NUMBER OF FACTORS, INCLUDING THE INVESTMENT ALLOCATION MADE BY THE POLICY
OWNER AND THE INVESTMENT RESULTS OF THE FUNDS SELECTED. THE CASH VALUE, CASH
SURRENDER VALUE AND DEATH BENEFIT FOR A POLICY WOULD BE DIFFERENT FROM THOSE
SHOWN IF THE ACTUAL RATES OF RETURN AVERAGED THE RATE SHOWN ABOVE OVER A
PERIOD OF YEARS, BUT ALSO FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR
INDIVIDUAL POLICY YEARS. NO REPRESENTATION CAN BE MADE BY THE COMPANY,
WALNUT STREET SECURITIES, THE FUNDS, OR ANY REPRESENTATIVE THEREOF, THAT THIS
HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR, OR SUSTAINED
OVER ANY PERIOD OF TIME.
ILLUSTRATED VALUES SHOWN ABOVE ARE AS OF THE END OF THE POLICY YEARS
INDICATED AND ASSUME ANY ADDITIONAL PREMIUMS SHOWN ARE RECEIVED ON THE POLICY
ANNIVERSARIES. ILLUSTRATED VALUES ASSUME ALL PREMIUM TAXES ARE PAID BY THE
COMPANY.
