<PAGE> 1
As filed with the Securities and Exchange Commission on 31 July 1998
Registration No. 333-53673
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Pre-Effective Amendment No. 1
to FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
(Exact Name of Registrant)
GENERAL AMERICAN LIFE INSURANCE COMPANY
700 Market Street
St. Louis, MO 63101
(Name and Address of principal executive office of depositor)
Matthew P. McCauley, Esquire
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
(Name and Address of Agent for Service of Process)
Approximate date of proposed public offering: as soon as practical after the
effective date of this Registration Statement.
Securities Being Offered: The variable portion of joint and survivor variable
universal life contracts funded through investment in the separate account.
No filing fee is due because an indefinite number of the securities being
offered will be registered under the Securities Act of 1933 in reliance upon
Section 24(f) of the Investment Company Act of 1940.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall become effective in accordance with Section 8(a) of the Securities Act of
1933 or on such date as the Commission, acting pursuant to said Section 8(a),
may determine that the Registration Statement shall become effective.
<PAGE> 2
<TABLE>
RECONCILIATION AND TIE BETWEEN ITEMS
IN FORM N-8B-2 AND THE PROSPECTUS
<CAPTION>
Item No. of
Form N-8B-2 Caption in Prospectus
----------- ---------------------
<S> <C>
1. Cover Page
2. Cover Page
3. Not Applicable
4. Distribution of the Policies
5. The Company and the Separate Account
6. The Separate Account
7. Not Required
8. Not Required
9. Legal Proceedings
10. Summary; Policy Benefits; Policy Rights;
Charges and Deductions; General Matters;
Voting Rights
11. Summary; General American Capital
Company
American Century Variable
Portfolios/J.P. Morgan Series Trust
II/Variable Insurance Products
Fund/Variable Insurance Products Fund
II/VanEck Worldwide Insurance Trust
12. Summary; The Company and the Separate
Account
13. Summary; Charges and Deductions
14. Summary; Payment and Allocation of
Premiums
15. Payment and Allocation of Premiums
16. Payment and Allocation of Premiums
17. Summary; Policy Rights; Payment and
Allocation of Premiums; Charges and
Deductions
18. Payment and Allocation of Premiums
19. General Matters; Voting Rights
20. Not Applicable
21. Policy Rights; General Matters
22. Not Applicable
23. Safekeeping of the Separate Account's
Assets
24. General Matters
25. The Company and the Separate Account
26. Not Applicable
- i -
<PAGE> 3
<CAPTION>
Item No. of
Form N-8B-2 Caption in Prospectus
----------- ---------------------
<S> <C>
27. The Company and the Separate Account
28. Management of the Company
29. The Company and the Separate Account
30. Not Applicable
31. Not Applicable
32. Not Applicable
33. Not Applicable
34. Not Applicable
35. The Company and the Separate Account
36. Not Required
37. Not Applicable
38. Summary; Distribution of the Policies
39. Summary; Distribution of the Policies
40. Distribution of the Policies
41.(a) The Company and the Separate Account;
Distribution of the Policies
(b) Not required
(c) Not required
42. Not Applicable
43. Not Applicable
44. Payment and Allocation of Premiums
45. Not Applicable
46. Policy Rights
47. Payment and Allocation of Premiums
48. Not Applicable
49. Not Applicable
50. The Separate Account
51. Cover Page; Summary; Policy Benefits;
Policy Rights; Payment and Allocation
of Premiums
52. The Company and the Separate Account
53. Federal Tax Matters
54. Not Applicable
55. Not Applicable
56. Not Required
57. Not Required
58. Not Required
59. Not Required
</TABLE>
- ii -
<PAGE> 4
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.
<PAGE> 5
<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> 6
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.
1
<PAGE> 7
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
2
<PAGE> 8
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
3
<PAGE> 9
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%.
4
<PAGE> 10
<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
5
<PAGE> 11
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> 12
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> 13
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.
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<PAGE> 14
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> 15
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> 16
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> 17
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> 18
<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> 19
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> 20
(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> 21
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> 22
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> 23
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> 24
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> 25
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> 26
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> 27
(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%. 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> 28
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, 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
23
<PAGE> 29
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> 30
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> 31
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 in states other than Texas.
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
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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.
33
<PAGE> 39
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> 40
<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> 41
<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> 42
<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> 43
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> 44
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> 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 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> 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 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> 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 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> 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 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> 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 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> 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 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> 51
<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> 52
<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> 53
<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> 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 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> 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 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> 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 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> 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 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> 58
<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> 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 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> 60
<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> 61
<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> 62
<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.
57
<PAGE> 63
INDEPENDENT AUDITORS' REPORT
The Board of Directors
General American Life Insurance Company
and Policyholders of General American
Separate Account Eleven:
We have audited the statements of assets and liabilities, including the
schedule of investments, of the S & P 500 Index, Money Market, Bond Index,
Managed Equity, Asset Allocation, International Index, Mid-Cap Equity,
Small-Cap Equity, Equity-Income, Growth, Overseas, Asset Manager, High
Income, Worldwide Hard Assets, Multi-style Equity, Core Bond, Aggressive
Equity, and Non-US Fund Divisions of General American Separate Account
Eleven as of December 31, 1997, and the related statements of operations and
changes in net assets for each of the years in the three-year period then
ended. These financial statements are the responsibility of the management
of General American Separate Account Eleven. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Investments owned as of December 31, 1997 were verified by audit of the
statements of assets and liabilities of the underlying portfolios of General
American Capital Company and confirmation by correspondence with respect to
the Variable Insurance Products Fund and the Variable Insurance Products
Fund II sponsored by Fidelity Investments, the Van Eck World Wide Insurance
Trust sponsored by Van Eck Associates Corporation, and the Russell Insurance
Funds sponsored by Frank Russell Investment Company. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of the S & P 500 Index,
Money Market, Bond Index, Managed Equity, Asset Allocation, International
Index, Mid-Cap Equity, Small-Cap Equity, Equity-Income, Growth, Overseas,
Asset Manager, High Income, Worldwide Hard Assets, Multi-Style Equity, Core
Bond, Aggressive Equity, and Non-US Fund Divisions of General American
Separate Account Eleven as of December 31, 1997, the results of their
operations and changes in their net assets for each of the years in the
three-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
St. Louis, Missouri
February 9, 1998
<PAGE> 64
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<CAPTION>
S & P 500 MONEY BOND MANAGED ASSET
INDEX MARKET INDEX EQUITY ALLOCATION
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in General American
Capital Company at market value
(see Schedule of Investments): $20,581,893 $8,600,564 $3,450,248 $4,241,762 $10,482,605
Receivable from General American Life
Insurance Company 0 715,691 0 0 0
----------- ---------- ---------- ---------- -----------
Total assets 20,581,893 9,316,255 3,450,248 4,241,762 10,482,605
----------- ---------- ---------- ---------- -----------
Liabilities:
Payable to General American Life
Insurance Company 3,570 0 1,704 6,447 6,300
----------- ---------- ---------- ---------- -----------
Total net assets $20,578,323 $9,316,255 $3,448,544 $4,235,315 $10,476,305
=========== ========== ========== ========== ===========
Total net assets represented by:
Individual Variable Universal Life cash
value invested in Separate Account $ 8,460,347 $ 782,727 $2,066,526 $2,634,705 $ 8,267,995
Individual Variable General Select Plus
cash value invested in Separate Account 5,747,133 6,532,380 655,815 740,703 1,259,015
Individual Variable Universal Life-100
cash value invested in Separate Account 6,370,843 1,911,272 726,203 859,907 949,295
Russell Variable Universal Life
cash value invested in Separate Account 0 89,876 0 0 0
----------- ---------- ---------- ---------- -----------
Total net assets $20,578,323 $9,316,255 $3,448,544 $4,235,315 $10,476,305
=========== ========== ========== ========== ===========
Total units held - VUL-95 236,305 46,703 97,454 92,710 282,838
Total units held - VGSP 248,494 535,853 50,400 37,481 72,507
Total units held - VUL-100 292,865 166,128 55,636 44,402 55,074
Total units held - Russell VUL 0 8,547 0 0 0
VUL-95 Net unit value $ 35.80 $ 16.76 $ 21.21 $ 28.42 $ 29.23
VGSP Net unit value $ 23.13 $ 12.19 $ 13.01 $ 19.76 $ 17.36
VUL-100 Net unit value $ 21.75 $ 11.50 $ 13.05 $ 19.37 $ 17.24
Russell VUL Net unit value $ 10.52
Cost of investments $17,072,779 $8,673,549 $3,434,435 $3,756,762 $ 8,720,069
See accompanying notes to the financial statements.
(continued)
</TABLE>
<PAGE> 65
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<CAPTION>
INTERNATIONAL MID-CAP SMALL-CAP EQUITY-
INDEX EQUITY EQUITY INCOME GROWTH
FUND DIVISION<F*> FUND DIVISION<F**> FUND DIVISION FUND DIVISION FUND DIVISION
----------------- ------------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in General American
Capital Company at market value
(see Schedule of Investments): $7,866,879 $6,232,329 $1,143,813 $ 0 $ 0
Investments in Variable Insurance
Products Fund at market value
(see Schedule of Investments): 0 0 0 17,001,106 22,237,647
Receivable from General American
Life Insurance Company 0 2,387 41 0 0
---------- ---------- ---------- ----------- -----------
Total assets 7,866,879 6,234,716 1,143,854 17,001,106 22,237,647
---------- ---------- ---------- ----------- -----------
Liabilities:
Payable to General American Life
Insurance Company 2,586 0 0 5,289 9,056
---------- ---------- ---------- ----------- -----------
Total net assets $7,864,293 $6,234,716 $1,143,854 $16,995,817 $22,228,591
========== ========== ========== =========== ===========
Total net assets represented by:
Individual Variable Universal Life cash
value invested in Separate Account $2,758,129 $3,609,898 $ 458,303 $ 6,510,189 $ 8,787,216
Individual Variable General Select Plus
cash value invested in Separate Account 953,767 1,616,472 391,596 5,047,948 6,674,197
Individual Variable Universal Life-100
cash value invested in Separate Account 966,544 1,008,346 293,955 5,437,680 6,767,178
General American Life Insurance
Company seed money 3,185,853 0 0 0 0
---------- ---------- ---------- ----------- -----------
Total net assets $7,864,293 $6,234,716 $1,143,854 $16,995,817 $22,228,591
========== ========== ========== =========== ===========
Total units held - VUL-95 175,226 174,121 35,177 292,344 407,913
Total units held - VGSP 70,058 77,919 30,027 226,141 328,018
Total units held - VUL-100 83,423 53,229 22,570 282,274 362,381
Total units held - Seed Money 200,000 0 0 0 0
VUL-95 Net unit value $ 15.74 $ 20.73 $ 13.03 $ 22.27 $ 21.54
VGSP Net unit value $ 13.61 $ 20.75 $ 13.04 $ 22.32 $ 20.35
VUL-100 Net unit value $ 11.59 $ 18.94 $ 13.02 $ 19.26 $ 18.67
Cost of investments $7,797,863 $5,262,750 $1,277,188 $13,670,582 $17,509,262
<FN>
<F*> This fund was formerly known as the International Equity Fund.
<F**>This fund was formerly known as the Special Equity Fund.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 66
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<CAPTION>
ASSET HIGH WORLDWIDE
OVERSEAS MANAGER INCOME HARD ASSETS
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION<F*>
------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Assets:
Investments in Variable Insurance
Products Fund at market value
(see Schedule of Investments): $8,174,972 $ 0 $2,175,014 $ 0
Investments in Variable Insurance
Products Fund II at market value
(see Schedule of Investments): 0 577,825 0 0
Investments in Van Eck Worldwide
Insurance Trust at market value
(see Schedule of Investments): 0 0 0 269,764
Receivable from General American
Life Insurance Company 0 0 0 41
---------- -------- ---------- --------
Total assets 8,174,972 577,825 2,175,014 269,805
---------- -------- ---------- --------
Liabilities:
Payable to General American Life
Insurance Company 3,488 368 2,095 0
---------- -------- ---------- --------
Total net assets $8,171,484 $577,457 $2,172,919 $269,805
========== ======== ========== ========
Total net assets represented by:
Individual Variable Universal Life
cash value invested in Separate Account $4,197,173 $ 30,870 $ 264,448 $117,116
Individual Variable General Select Plus
cash value invested in Separate Account 2,612,802 111,623 923,865 32,914
Individual Variable Universal Life-100
cash value invested in Separate Account 1,361,509 434,964 984,606 119,775
---------- -------- ---------- --------
Total net assets $8,171,484 $577,457 $2,172,919 $269,805
========== ======== ========== ========
Total units held - VUL-95 242,563 2,132 18,572 10,326
Total units held - VGSP 168,708 7,680 64,632 2,892
Total units held - VUL-100 100,943 30,075 69,238 10,573
VUL-95 Net unit value $ 17.30 $ 14.48 $ 14.24 $ 11.34
VGSP Net unit value $ 15.49 $ 14.53 $ 14.29 $ 11.38
VUL-100 Net unit value $ 13.49 $ 14.46 $ 14.22 $ 11.33
Cost of investments $7,472,992 $523,566 $1,954,241 $280,524
<FN>
<F*>This fund was formerly known as the Gold & Natural Resources Fund.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 67
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Assets:
Investments in Russell Insurance Fund
at market value
(see Schedule of Investments): $2,538,339 $1,153,638 $1,344,291 $782,951
Receivable from General American
Life Insurance Company 941 769 1,134 892
---------- ---------- ---------- --------
Total assets 2,539,280 1,154,407 1,345,425 783,843
---------- ---------- ---------- --------
Liabilities:
Payable to General American Life
Insurance Company 0 0 0 0
---------- ---------- ---------- --------
Total net assets $2,539,280 $1,154,407 $1,345,425 $783,843
========== ========== ========== ========
Total net assets represented by:
Individual Variable General Select Plus
cash value invested in Separate Account $ 601,650 $ 235,820 $ 335,282 $293,990
Russell Variable Universal Life
cash value invested in Separate Account 1,937,630 918,587 1,010,143 489,853
---------- ---------- ---------- --------
Total net assets $2,539,280 $1,154,407 $1,345,425 $783,843
========== ========== ========== ========
Total units held - VGSP 46,930 21,414 25,100 28,578
Total units held - Russell VUL 151,491 84,125 75,156 49,083
VGSP Net unit value $ 12.82 $ 11.01 $ 13.36 $ 10.29
Russell VUL Net unit value $ 12.79 $ 10.92 $ 13.44 $ 9.98
Cost of investments $2,536,786 $1,126,156 $1,320,664 $840,268
See accompanying notes to the financial statements.
</TABLE>
<PAGE> 68
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
---------------------------------- ---------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F*> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (59,320) (38,288) (31,973) (7,951) (8,690) (13,058)
Mortality and expense charges - VGSP (29,674) (16,887) (3,459) (12,872) (21,323) (8,747)
Mortality and expense charges - VUL-100 (36,234) (9,712) (233) (13,566) (10,113) (1,350)
Mortality and expense charges - Russell VUL 0 0 0 (1,626) 0 0
---------- ---------- ---------- --------- --------- ---------
Total expenses (125,228) (64,887) (35,665) (36,015) (40,126) (23,155)
---------- ---------- ---------- --------- --------- ---------
Net investment expense (125,228) (64,887) (35,665) (36,015) (40,126) (23,155)
---------- ---------- ---------- --------- --------- ---------
Net realized gain on investments:
Realized gain from distributions 913,559 435,253 128,459 121,801 363,544 231,929
Realized gain (loss) on sales 1,570,537 244,401 339,252 (48,325) 14,173 65,400
---------- ---------- ---------- --------- --------- ---------
Net realized gain on investments 2,484,096 679,654 467,711 73,476 377,717 297,329
---------- ---------- ---------- --------- --------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period 1,982,215 851,246 (10,068) (256,852) (158,740) (31,189)
Unrealized gain (loss) on investments,
end of period 3,509,114 1,982,215 851,246 (72,985) (256,852) (158,740)
---------- ---------- ---------- --------- --------- ---------
Net unrealized gain (loss) on investments 1,526,899 1,130,969 861,314 183,867 (98,112) (127,551)
---------- ---------- ---------- --------- --------- ---------
Net gain on investments 4,010,995 1,810,623 1,329,025 257,343 279,605 169,778
---------- ---------- ---------- --------- --------- ---------
Net increase in net assets
resulting from operations $3,885,767 $1,745,736 $1,293,360 $ 221,328 $ 239,479 $ 146,623
========== ========== ========== ========= ========= =========
<FN>
<F*>See Note 2C.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 69
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
--------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- --------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F*> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (14,601) (11,376) (18,478) (20,327) (16,463) (16,717)
Mortality and expense charges - VGSP (3,943) (10,234) (153) (4,370) (1,751) (208)
Mortality and expense charges - VUL-100 (4,363) (1,802) (24) (4,815) (1,080) (40)
--------- --------- --------- -------- -------- ---------
Total expenses (22,907) (23,412) (18,655) (29,512) (19,294) (16,965)
--------- --------- --------- -------- -------- ---------
Net investment expense (22,907) (23,412) (18,655) (29,512) (19,294) (16,965)
--------- --------- --------- -------- -------- ---------
Net realized gain (loss) on investments:
Realized gain from distributions 165,804 496,106 70,070 251,405 292,621 193,544
Realized gain (loss) on sales (176,276) (15,797) (31,850) 95,532 11,431 (1,087)
--------- --------- --------- -------- -------- ---------
Net realized gain (loss) on investments (10,472) 480,309 38,220 346,937 304,052 192,457
--------- --------- --------- -------- -------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period (234,659) 19,005 (313,506) 116,769 (26,912) (408,116)
Unrealized gain (loss) on investments,
end of period 15,812 (234,659) 19,005 485,000 116,769 (26,912)
--------- --------- --------- -------- -------- ---------
Net unrealized gain (loss) on investments 250,471 (253,664) 332,511 368,231 143,681 381,204
--------- --------- --------- -------- -------- ---------
Net gain on investments 239,999 226,645 370,731 715,168 447,733 573,661
--------- --------- --------- -------- -------- ---------
Net increase in net assets
resulting from operations $ 217,092 $ 203,233 $ 352,076 $685,656 $428,439 $ 556,696
========= ========= ========= ======== ======== =========
<FN>
<F*>See Note 2C.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 70
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
---------------------------------- ---------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Investment income<F**> $ -- $ -- $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (67,466) (52,462) (46,892) (23,446) (19,773) (13,991)
Mortality and expense charges - VGSP (7,499) (5,214) (5,214) (5,564) (3,014) (2,260)
Mortality and expense charges - VUL-100 (5,279) (1,078) (10) (6,468) (2,475) (66)
Mortality and expense charges - Seed Money 0 0 0 (27,476) (25,684) (23,784)
---------- ---------- ---------- --------- -------- ---------
Total expenses (80,244) (58,754) (52,116) (62,954) (50,946) (40,101)
---------- ---------- ---------- --------- -------- ---------
Net investment expense (80,244) (58,754) (52,116) (62,954) (50,946) (40,101)
---------- ---------- ---------- --------- -------- ---------
Net realized gain on investments:
Realized gain from distributions 311,438 554,498 474,238 220,590 164,186 514,927
Realized gain on sales 195,821 36,291 131,272 136,741 43,830 41,508
---------- ---------- ---------- --------- -------- ---------
Net realized gain on investments: 507,259 590,789 605,510 357,331 208,016 556,435
---------- ---------- ---------- --------- -------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain (loss) on investments,
beginning of period 657,734 197,823 (765,423) 268,331 40,286 198,307
Unrealized gain on investments,
end of period 1,762,536 657,734 197,823 69,016 268,331 40,286
---------- ---------- ---------- --------- -------- ---------
Net unrealized gain (loss) on investments 1,104,802 459,911 963,246 (199,315) 228,045 (158,021)
---------- ---------- ---------- --------- -------- ---------
Net gain on investments 1,612,061 1,050,700 1,568,756 158,016 436,061 398,414
---------- ---------- ---------- --------- -------- ---------
Net increase in net assets
resulting from operations $1,531,817 $ 991,946 $1,516,640 $ 95,062 $385,115 $ 358,313
========== ========== ========== ========= ======== =========
<FN>
<F*> This fund was formerly known as the International Equity Fund.
<F**>See Note 2C.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 71
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
---------------------------------- ----------------
1997 1996 1995 1997<F***>
---------- ---------- -------- ---------
<S> <C> <C> <C> <C>
Investment income<F**> $ -- $ -- $ -- $ --
Expenses:
Mortality and expense charges - VUL-95 (26,828) (21,527) (16,741) (787)
Mortality and expense charges - VGSP (7,567) (4,349) (3,645) (869)
Mortality and expense charges - VUL-100 (6,142) (2,084) (72) (627)
Mortality and expense charges - Seed Money 0 (5,213) (11,191) 0
---------- ---------- -------- ---------
Total expenses (40,537) (33,173) (31,649) (2,283)
---------- ---------- -------- ---------
Net investment expense (40,537) (33,173) (31,649) (2,283)
---------- ---------- -------- ---------
Net realized gain on investments:
Realized gain from distributions 262,603 805,221 210,225 149,353
Realized gain on sales 188,905 417,832 121,217 1,064
---------- ---------- -------- ---------
Net realized gain on investments: 451,508 1,223,053 331,442 150,417
---------- ---------- -------- ---------
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 24,121 464,281 75,550 0
Unrealized gain (loss) on investments,
end of period 969,578 24,121 464,281 (133,375)
---------- ---------- -------- ---------
Net unrealized gain (loss) on investments 945,457 (440,160) 388,731 (133,375)
---------- ---------- -------- ---------
Net gain on investments 1,396,965 782,893 720,173 17,042
---------- ---------- -------- ---------
Net increase in net assets
resulting from operations $1,356,428 $ 749,720 $688,524 $ 14,759
========== ========== ======== =========
<FN>
<F*> This fund was formerly known as the Special Equity Fund.
<F**> See Note 2C.
<F***>The Small-Cap Equity Fund began operations on May 1, 1997.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 72
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 186,680 $ 9,260 $ 94,314 $ 94,061 $ 21,639 $ 21,771
Expenses:
Mortality and expense charges - VUL-95 (49,108) (38,120) (24,157) (65,287) (51,026) (34,577)
Mortality and expense charges - VGSP (27,082) (13,918) (6,731) (37,459) (19,582) (11,893)
Mortality and expense charges - VUL-100 (34,605) (10,210) (378) (42,613) (14,179) (439)
---------- ---------- ---------- ---------- ---------- ----------
Total expenses (110,795) (62,248) (31,266) (145,359) (84,787) (46,909)
---------- ---------- ---------- ---------- ---------- ----------
Net investment income (loss) 75,885 (52,988) 63,048 (51,298) (63,148) (25,138)
---------- ---------- ---------- ---------- ---------- ----------
Net realized gain on investments:
Realized gain from distributions 938,582 265,454 125,686 421,033 546,396 0
Realized gain on sales 310,747 130,118 67,467 381,175 254,460 176,048
---------- ---------- ---------- ---------- ---------- ----------
Net realized gain on investments: 1,249,329 395,572 193,153 802,208 800,856 176,048
---------- ---------- ---------- ---------- ---------- ----------
Net unrealized gain on investments:
Unrealized gain on investments,
beginning of period 1,528,943 868,207 17,485 2,039,425 1,501,642 51,539
Unrealized gain on investments,
end of period 3,330,524 1,528,943 868,207 4,728,383 2,039,425 1,501,642
---------- ---------- ---------- ---------- ---------- ----------
Net unrealized gain on investments 1,801,581 660,736 850,722 2,688,958 537,783 1,450,103
---------- ---------- ---------- ---------- ---------- ----------
Net gain on investments 3,050,910 1,056,308 918,189 3,491,166 1,338,639 1,626,151
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations $3,126,795 $1,003,320 $1,106,923 $3,439,868 $1,275,491 $1,601,013
========== ========== ========== ========== ========== ==========
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 73
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
-------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995<F*>
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 98,942 $ 41,332 $ 8,707 $ 9,219 $ 2,632 $ 0
Expenses:
Mortality and expense charges - VUL-95 (32,823) (24,616) (17,340) (219) (126) (3)
Mortality and expense charges - VGSP (15,095) (8,371) (5,232) (597) (193) (20)
Mortality and expense charges - VUL-100 (9,246) (3,542) (152) (2,776) (1,031) (29)
-------- -------- -------- ------- ------- ------
Total expenses (57,164) (36,529) (22,724) (3,592) (1,350) (52)
-------- -------- -------- ------- ------- ------
Net investment income (loss) 41,778 4,803 (14,017) 5,627 1,282 (52)
-------- -------- -------- ------- ------- ------
Net realized gain on investments:
Realized gain from distributions 392,769 45,464 8,707 23,126 2,171 0
Realized gain on sales 73,551 42,658 19,162 10,620 1,016 13
-------- -------- -------- ------- ------- ------
Net realized gain on investments: 466,320 88,122 27,869 33,746 3,187 13
-------- -------- -------- ------- ------- ------
Net unrealized gain on investments:
Unrealized gain (loss) on investments,
beginning of period 639,437 210,998 (36,045) 19,793 1,779 0
Unrealized gain on investments,
end of period 710,980 639,437 210,998 54,259 19,793 1,779
-------- -------- -------- ------- ------- ------
Net unrealized gain on investments 62,543 428,439 247,043 34,466 18,014 1,779
-------- -------- -------- ------- ------- ------
Net gain on investments 528,863 516,561 266,205 68,212 21,201 1,792
-------- -------- -------- ------- ------- ------
Net increase in net assets
resulting from operations $570,641 $521,364 $260,895 $73,839 $22,483 $1,740
======== ======== ======== ======= ======= ======
<FN>
<F*>The Asset Manager Fund began operations on July 19, 1995.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 74
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F**>
---------------------------------- -----------------------------------
1997 1996 1995<F*> 1997 1996 1995<F*>
-------- ------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividend income $ 91,441 $28,732 $ 0 $ 3,388 $ 1,298 $ 32
Expenses:
Mortality and expense charges - VUL-95 (2,255) (1,639) (122) (754) (389) (3)
Mortality and expense charges - VGSP (4,993) (1,456) (55) (186) (214) 0
Mortality and expense charges - VUL-100 (6,583) (2,645) (76) (917) (410) (11)
-------- ------- ------ -------- ------- ----
Total expenses (13,831) (5,740) (253) (1,857) (1,013) (14)
-------- ------- ------ -------- ------- ----
Net investment income (loss) 77,610 22,992 (253) 1,531 285 18
-------- ------- ------ -------- ------- ----
Net realized gain (loss) on investments:
Realized gain from distributions 11,302 5,621 0 4,590 1,273 0
Realized gain (loss) on sales 17,736 (202) 1,132 (1,380) 1,682 (5)
-------- ------- ------ -------- ------- ----
Net realized gain (loss) on investments: 29,038 5,419 1,132 3,210 2,955 (5)
-------- ------- ------ -------- ------- ----
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 57,062 2,337 0 3,346 370 0
Unrealized gain (loss) on investments,
end of period 220,773 57,062 2,337 (10,760) 3,346 370
-------- ------- ------ -------- ------- ----
Net unrealized gain (loss) on investments 163,711 54,725 2,337 (14,106) 2,976 370
-------- ------- ------ -------- ------- ----
Net gain (loss) on investments 192,749 60,144 3,469 (10,896) 5,931 365
-------- ------- ------ -------- ------- ----
Net increase (decrease) in net assets
resulting from operations $270,359 $83,136 $3,216 $ (9,365) $ 6,216 $383
======== ======= ====== ======== ======= ====
<FN>
<F*> The High Income Fund and Worldwide Hard Assets Fund began operations on May
24, and August 9, 1995, respectively.
<F**>This fund was formerly known as the Gold & Natural Resources Fund.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 75
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*>
----------------- ----------------- ----------------- -----------------
1997 1997 1997 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Investment income:
Dividend income $ 599 $ 2,483 $ 23 $ 0
Expenses:
Mortality and expense charges - VGSP (996) (408) (505) (496)
Mortality and expense charges - Russell VUL (1,582) (1,146) (682) (649)
------- ------- ------- --------
Total expenses (2,578) (1,554) (1,187) (1,145)
------- ------- ------- --------
Net investment income (loss) (1,979) 929 (1,164) (1,145)
------- ------- ------- --------
Net realized gain on investments:
Realized gain from distributions 0 0 0 0
Realized gain on sales 5,224 705 2,158 78
------- ------- ------- --------
Net realized gain on investments: 5,224 705 2,158 78
------- ------- ------- --------
Net unrealized gain (loss) on investments:
Unrealized gain on investments,
beginning of period 0 0 0 0
Unrealized gain (loss) on investments,
end of period 1,553 27,482 23,627 (57,317)
------- ------- ------- --------
Net unrealized gain (loss) on investments 1,553 27,482 23,627 (57,317)
------- ------- ------- --------
Net gain (loss) on investments 6,777 28,187 25,785 (57,239)
------- ------- ------- --------
Net increase (decrease) in net assets
resulting from operations $ 4,798 $29,116 $24,621 $(58,384)
======= ======= ======= ========
<FN>
<F*>The Multi-Style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and
Non-US Fund began operations on January 2, 1997.
See accompanying notes to the financial statements.
</TABLE>
<PAGE> 76
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
------------------------------------ ----------------------------------
1997 1996 1995 1997 1996 1995
----------- ----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (125,228) $ (64,887) $ (35,665) $ (36,015) $ (40,126) $ (23,155)
Net realized gain on investments 2,484,096 679,654 467,711 73,476 377,717 297,329
Net unrealized gain (loss) on investments 1,526,899 1,130,969 861,314 183,867 (98,112) (127,551)
----------- ----------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 3,885,767 1,745,736 1,293,360 221,328 239,479 146,623
Net deposits into (deductions from)
Separate Account 2,209,424 8,067,322 (145,477) 932,501 3,557,381 2,340,021
----------- ----------- ---------- ---------- ---------- ----------
Increase in net assets 6,095,191 9,813,058 1,147,883 1,153,829 3,796,860 2,486,644
Net assets, beginning of period 14,483,132 4,670,074 3,522,191 8,162,426 4,365,566 1,878,922
----------- ----------- ---------- ---------- ---------- ----------
Net assets, end of period $20,578,323 $14,483,132 $4,670,074 $9,316,255 $8,162,426 $4,365,566
=========== =========== ========== ========== ========== ==========
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 77
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
------------------------------------ ----------------------------------
1997 1996 1995 1997 1996 1995
----------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (22,907) $ (23,412) $ (18,655) $ (29,512) $ (19,294) $ (16,965)
Net realized gain (loss) on investments (10,472) 480,309 38,220 346,937 304,052 192,457
Net unrealized gain (loss) on investments 250,471 (253,664) 332,511 368,231 143,681 381,204
----------- ---------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 217,092 203,233 352,076 685,656 428,439 556,696
Net deposits into (deductions from)
Separate Account (3,532,130) 5,128,242 (1,271,114) 779,803 436,005 (487,360)
----------- ---------- ----------- ---------- ---------- ----------
Increase (decrease) in net assets (3,315,038) 5,331,475 (919,038) 1,465,459 864,444 69,336
Net assets, beginning of period 6,763,582 1,432,107 2,351,145 2,769,856 1,905,412 1,836,076
----------- ---------- ----------- ---------- ---------- ----------
Net assets, end of period $ 3,448,544 $6,763,582 $ 1,432,107 $4,235,315 $2,769,856 $1,905,412
=========== ========== =========== ========== ========== ==========
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 78
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
----------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment expense $ (80,244) $ (58,754) $ (52,116) $ (62,954) $ (50,946) $ (40,101)
Net realized gain on investments 507,259 590,789 605,510 357,331 208,016 556,435
Net unrealized gain (loss) on investments 1,104,802 459,911 963,246 (199,315) 228,045 (158,021)
----------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 1,531,817 991,946 1,516,640 95,062 385,115 358,313
Net deposits into (deductions from)
Separate Account 909,812 1,086,684 (709,124) 979,833 1,016,960 789,597
----------- ---------- ---------- ---------- ---------- ----------
Increase in net assets 2,441,629 2,078,630 807,516 1,074,895 1,402,075 1,147,910
Net assets, beginning of period 8,034,676 5,956,046 5,148,530 6,789,398 5,387,323 4,239,413
----------- ---------- ---------- ---------- ---------- ----------
Net assets, end of period $10,476,305 $8,034,676 $5,956,046 $7,864,293 $6,789,398 $5,387,323
=========== ========== ========== ========== ========== ==========
<FN>
<F*>This fund was formerly known as the International Equity Fund.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 79
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
---------------------------------- ----------------
1997 1996 1995 1997<F**>
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Operations:
Net investment expense $ (40,537) $ (33,173) $ (31,649) $ (2,283)
Net realized gain on investments 451,508 1,223,053 331,442 150,417
Net unrealized gain (loss) on investments 945,457 (440,160) 388,731 (133,375)
---------- ---------- ---------- ----------
Net increase in net assets
resulting from operations 1,356,428 749,720 688,524 14,759
Net deposits into (deductions from)
Separate Account 793,111 (860,933) 229,832 1,129,095
---------- ---------- ---------- ----------
Increase (decrease) in net assets 2,149,539 (111,213) 918,356 1,143,854
Net assets, beginning of period 4,085,177 4,196,390 3,278,034 0
---------- ---------- ---------- ----------
Net assets, end of period $6,234,716 $4,085,177 $4,196,390 $1,143,854
========== ========== ========== ==========
<FN>
<F*> This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 80
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
------------------------------------- ------------------------------------
1997 1996 1995 1997 1996 1995
----------- ----------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 75,885 $ (52,988) $ 63,048 $ (51,298) $ (63,148) $ (25,138)
Net realized gain on investments 1,249,329 395,572 193,153 802,208 800,856 176,048
Net unrealized gain on investments 1,801,581 660,736 850,722 2,688,958 537,783 1,450,103
----------- ----------- ---------- ----------- ----------- ----------
Net increase in net assets
resulting from operations 3,126,795 1,003,320 1,106,923 3,439,868 1,275,491 1,601,013
Net deposits into Separate Account 3,516,214 3,869,404 2,068,778 5,418,111 4,760,220 1,991,002
----------- ----------- ---------- ----------- ----------- ----------
Increase in net assets 6,643,009 4,872,724 3,175,701 8,857,979 6,035,711 3,592,015
Net assets, beginning of period 10,352,808 5,480,084 2,304,383 13,370,612 7,334,901 3,742,886
----------- ----------- ---------- ----------- ----------- ----------
Net assets, end of period $16,995,817 $10,352,808 $5,480,084 $22,228,591 $13,370,612 $7,334,901
=========== =========== ========== =========== =========== ==========
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 81
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION<F*>
----------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 41,778 $ 4,803 $ (14,017) $ 5,627 $ 1,282 $ (52)
Net realized gain on investments 466,320 88,122 27,869 33,746 3,187 13
Net unrealized gain on investments 62,543 428,439 247,043 34,466 18,014 1,779
---------- ---------- ---------- -------- -------- -------
Net increase in net assets
resulting from operations 570,641 521,364 260,895 73,839 22,483 1,740
Net deposits into Separate Account 2,154,913 1,491,289 1,053,659 227,154 202,863 49,378
---------- ---------- ---------- -------- -------- -------
Increase in net assets 2,725,554 2,012,653 1,314,554 300,993 225,346 51,118
Net assets, beginning of period 5,445,930 3,433,277 2,118,723 276,464 51,118 0
---------- ---------- ---------- -------- -------- -------
Net assets, end of period $8,171,484 $5,445,930 $3,433,277 $577,457 $276,464 $51,118
========== ========== ========== ======== ======== =======
<FN>
<F*>The Asset Manager Fund began operations on July 19, 1995.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 82
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F*>
---------------------------------- ---------------------------------
1997 1996 1995<F**> 1997 1996 1995<F**>
---------- ---------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ 77,610 $ 22,992 $ (253) $ 1,531 $ 285 $ 18
Net realized gain (loss) on investments 29,038 5,419 1,132 3,210 2,955 (5)
Net unrealized gain (loss) on investments 163,711 54,725 2,337 (14,106) 2,976 370
---------- ---------- -------- -------- -------- ------
Net increase (decrease) in net assets
resulting from operations 270,359 83,136 3,216 (9,365) 6,216 383
Net deposits into Separate Account 711,529 904,946 199,733 92,851 170,306 9,414
---------- ---------- -------- -------- -------- ------
Increase in net assets 981,888 988,082 202,949 83,486 176,522 9,797
Net assets, beginning of period 1,191,031 202,949 0 186,319 9,797 0
---------- ---------- -------- -------- -------- ------
Net assets, end of period $2,172,919 $1,191,031 $202,949 $269,805 $186,319 $9,797
========== ========== ======== ======== ======== ======
<FN>
<F*> This fund was formerly known as the Gold & Natural Resources Fund.
<F**>The High Income Fund and the Worldwide Hard Assets Fund began operations on May 24, and August 9, 1995, respectively.
See accompanying notes to the financial statements. (continued)
</TABLE>
<PAGE> 83
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1997
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*> FUND DIVISION<F*>
----------------- ----------------- ----------------- -----------------
1997 1997 1997 1997
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Operations:
Net investment income (expense) $ (1,979) $ 929 $ (1,164) $ (1,145)
Net realized gain on investments 5,224 705 2,158 78
Net unrealized gain (loss) on investments 1,553 27,482 23,627 (57,317)
---------- ---------- ---------- --------
Net increase (decrease) in net assets
resulting from operations 4,798 29,116 24,621 (58,384)
Net deposits into Separate Account 2,534,482 1,125,291 1,320,804 842,227
---------- ---------- ---------- --------
Increase in net assets 2,539,280 1,154,407 1,345,425 783,843
Net assets, beginning of period 0 0 0 0
---------- ---------- ---------- --------
Net assets, end of period $2,539,280 $1,154,407 $1,345,425 $783,843
========== ========== ========== ========
<FN>
<F*>The Multi-Style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and Non-US Fund began operations on January 2,
1997.
See accompanying notes to the financial statements.
</TABLE>
<PAGE> 84
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Note 1 - Organization
General American Separate Account Eleven (the Separate Account) commenced
operations on September 15, 1987 and is registered under the Investment
Company Act of 1940 (1940 Act) as a unit investment trust. The Separate
Account offers four products: Variable Universal Life (VUL-95), Variable
General Select Plus (VGSP), Variable Universal Life (VUL-100), and Russell
Variable Universal Life (Russell VUL) that receive and invest net premiums
for flexible premium variable life insurance policies that are issued by
General American Life Insurance Company (General American). The Separate
Account is divided into eighteen Divisions. Each Division invests exclusively
in shares of a single Fund of either General American Capital Company,
Variable Insurance Products Fund, Variable Insurance Products Fund II, Van
Eck Worldwide Insurance Trust or Russell Insurance Funds which are open-end,
diversified management companies. The Funds of the General American Capital
Company, sponsored by General American, are the S & P 500 Index (formerly
Equity Index), Money Market, Bond Index, Managed Equity, Asset Allocation,
International Index (formerly International Equity), Mid-Cap Equity (formerly
Special Equity), and the Small-Cap Equity Fund Divisions. The Funds of the
Variable Insurance Products Fund, managed by Fidelity Management & Research
Company, are the Equity-Income, Growth, Overseas, and the High Income Fund
Divisions. The Funds of the Variable Insurance Products Fund II, managed by
Fidelity Management and Research Company is the Asset Manager Fund. The Fund
of the Van Eck Worldwide Insurance Trust, managed by Van Eck Associates
Corporation, is the Worldwide Hard Assets Fund, formerly known as the Gold
and Natural Resources Fund. The Funds of the Russell Variable Insurance
Product, managed by Frank Russell Investment Management Company are the
Multi-style Equity, Core Bond, Aggressive Equity, and Non-US Fund Divisions.
Policyholders have the option of directing their premium payments into one or
all of the Funds as well as into the general account of General American,
which is not generally subject to regulation under the Securities Act of 1933
or the 1940 Act.
Note 2 - Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Separate Account in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles.
A. Investments
The Separate Accounts' investments in the eighteen Funds are valued
daily based on the net asset values of the respective Fund shares held
as reported to General American by General American Capital Company,
Variable Insurance Products Fund, Variable Insurance Products Fund II,
Van Eck Worldwide Insurance Trust, and Russell Insurance Funds. The
specific identification method is used in determining the cost of
shares sold on withdrawals by the Separate Account. Share transactions
are recorded on the trade date, which is the same as the settlement
date.
B. Federal Income Taxes
Under current federal income tax law, capital gains from sales of
investments of the Separate Account are not taxable. Therefore, no
federal income tax expense has been provided.
C. Distribution of Income and Realized Capital Gains
General American Capital Company follows the federal income tax
practice known as consent dividending, whereby substantially all of its
net investment income and realized gains are deemed to be passed
through to the Separate Account. As a result, General American Capital
Company does not pay any dividends or capital gain distributions.
During December of each year, accumulated investment income and capital
gains of the underlying Capital Company Fund are allocated to the
Separate Account by increasing the cost basis and recognizing a capital
gain in the Separate Account. The Variable Insurance Products Fund,
Variable Insurance Products Fund II, Van Eck Worldwide Insurance Trust
and Russell Insurance Funds intend to pay out all of their net
investment income and net realized capital gains each year. Dividends
from the funds are distributed at least annually on a per share basis
and are recorded on the ex dividend date. Normally, net realized
capital gains, if any, are distributed each year for each fund. Such
income and capital gain distributions are automatically reinvested in
additional shares of the funds.
<PAGE> 85
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
D. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increase
and decrease in net assets from operations during the period. Actual
results could differ from those estimates.
Note 3 - Policy Charges
Charges are deducted from premiums and paid to General American for providing
the insurance benefits set forth in the contracts and any additional benefits
added by rider, administering the policies, reimbursement of expenses
incurred in distributing the policies, and assuming certain risks in
connection with the policies.
Prior to the allocation of net premiums among General American's general
account and the Fund Divisions of the Separate Account, premium payments are
reduced by premium expense charges, which consist 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 equal to 6% is deducted from each VUL-95
-------------
premium paid. A sales charge of 5% in years one through ten and 2.25%
thereafter is deducted from each VGSP premium paid. A maximum sales
charge of 5% in years one through ten and a maximum 2.25% thereafter
based on initial deposit is deducted from each Russell VUL premium
paid. This charge is deducted to partially reimburse General American
for expenses incurred in distributing the policy and any additional
benefits provided by rider. No sales charge is deducted from VUL-100
premiums.
Premium Taxes: Various state and political subdivisions impose a tax
--------------
on premiums received by insurance companies. Premium taxes vary from
state to state. A deduction of 2% of each VUL-95 premium, 2.5% of each
VGSP premium, 2.10% of each VUL-100 premium, and 2.5% of each Russell
VUL premium is made from each premium payment for these taxes. In
addition, a 1.25% deduction is taken from VUL-100 premiums to cover the
company's Federal income tax costs attributable to the amount of
premium received.
Charges are deducted monthly from the cash value of each policy to compensate
General American for (a) certain administrative costs; (b) insurance
underwriting and acquisition expenses in connection with issuing a policy;
(c) the cost of insurance, and (d) the cost of optional benefits added by
rider.
Administrative Charge: General American has responsibility for the
----------------------
administration of the policies and the Separate Account. As
reimbursement for administrative expenses related to the maintenance of
each policy and the Separate Account, General American assesses a
monthly administrative charge against each policy. This charge is $10
per month for a standard policy and $12 per month for a pension policy
during the first 12 policy months and $4 (standard) and $6 (pension)
per month for all policy months beyond the 12th for VUL-95 contracts.
The charge is $4 per month for VGSP and Russell VUL contracts. The
charge is $13 per month during the first 12 policy months and $6 per
month thereafter for VUL-100 contracts.
Insurance Underwriting and Acquisition Expense Charge: An additional
------------------------------------------------------
administrative charge is deducted from the policy cash value for VUL-95
as part of the monthly deduction during the first 12 policy months and
for the first 12 policy months following an increase in the face
amount. The charge is $0.08 per month multiplied by the face amount
divided by 1,000. For VUL-100, the charge during the first 12 policy
months is $0.16 per month multiplied by the face amount divided by
1,000, and in all policy years thereafter, the charge is $0.01 per
month multiplied by the face amount divided by 1,000.
<PAGE> 86
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
Cost of Insurance: The cost of insurance is deducted on each monthly
------------------
anniversary date for the following policy month. Because the cost of
insurance depends upon a number of variables, the cost varies for each
policy month. The cost of insurance is determined separately for the
initial face amount and for any subsequent increases in face amount.
General American determines the monthly cost of insurance charge by
multiplying the applicable cost of insurance rate or rates by the net
amount at risk for each policy month.
Optional Rider Benefits Charge: This monthly deduction includes
-------------------------------
charges for any additional benefits provided by rider.
Contingent Deferred Sales Charge: During the first ten policy years
---------------------------------
for VUL-95, VGSP, and Russell VUL, and the first fifteen years for VUL-
100, General American also assesses a charge upon surrender or lapse of
a Policy, a requested decrease in face amount, or a partial withdrawal
that causes the face amount to decrease. The amount of the charge
assessed depends on a number of factors, including whether the event is
a full surrender or lapse or only a decrease in face amount, the amount
of premiums received to date by General American, and the policy year
in which the surrender or other event takes place.
Mortality and Expense Charge: In addition to the above charges, a daily
- -----------------------------
charge is made at the separate account level for the mortality and expense
risks assumed by General American. General American deducts a daily charge
from the Separate Account at the rate of .002319% for VUL-95, .0019111% for
VGSP, .002455% for VUL-100, and .001366% for Russell VUL of the net assets of
each division of the Separate Account, which equals an annual rate of .85%,
.70%, .90%, and .50% for VUL-95, VGSP, VUL-100, and Russell VUL,
respectively. VUL-95, VGSP, VUL-100, and Russell VUL mortality and expense
charges for 1997 were $398,648, $160,175, $174,234, and $5,685,
respectively. The mortality risk assumed by General American is the risk that
those insured may die sooner than anticipated and therefore, that 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.
NOTE 4 - INVESTMENT OBJECTIVES, MANAGER CHANGES AND NEW DIVISIONS
Effective January 1, 1997, the International Equity Fund became the
International Index Fund. The investment objective of the International Index
Fund is to obtain investment results that parallel the price and yield
performance of publicly-traded common stocks in the Morgan Stanley Capital
International Europe, Australia, and Far East Index ("EAFE Index"). The
portfolio manager of the International Index Fund is Conning Asset Management
Company and the management fee for the fund is .50% on the first $10 million
in assets, .40% on the balance over $10 million and less than $20 million and
.30% on any balance in excess of $20 million.
Effective January 1, 1997, the Special Equity Fund became the Mid-Cap Equity
Fund. The investment objective of the Mid-Cap Equity Fund is to seek
sustained growth of capital by investing primarily in common stocks of United
States-bases publicly traded companies with "medium market capitalization".
"Medium market capitalization companies" are those whose market
capitalization falls within the range of the S&P MidCap 400 at the time of
the Fund's investment. The portfolio manager of the Mid-Cap Equity Fund is
Conning Asset Management Company and the total management fee rate remained
unchanged from that of the Special Equity Fund.
On March 1, 1997, Conning Asset Management Company became the manager of the
Managed Equity Fund. The management fee is .40% on the first $10 million in
assets, .30% on the balance over $10 million and less than $30 million, and
.25% on the balance in excess of $30 million.
<PAGE> 87
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
On January 2, 1997, four new divisions and a new product -Russell VUL- were
added to Separate Account Eleven. The four divisions were the Multi-Style
Equity, Core Bond, Aggressive Equity and Non-US. The underlying funds in
these divisions are offered by Russell Insurance Funds and managed by Frank
Russell Company. The investment objectives of each of these new divisions are
as follows:
Multi-Style Equity Fund - To provide income and capital growth by investing
- -----------------------
principally in equity securities.
Core Bond Fund - To provide effective diversification against equities and a
- --------------
stable level of cash flow by investing in fixed income securities.
Aggressive Equity Fund - To maximize total return through capital
- ----------------------
appreciation and by assuming a higher level of volatility than is ordinarily
expected from the Multi-Style Equity Fund, while still investing in equity
securities.
Non-US Fund - To provide favorable total return and additional
- -----------
diversification for United States investors by investing primarily in equity
and fixed income securities of non-US companies and securities issued by
non-United States governments.
The underlying products currently offered by these divisions are Russell VUL
and VGSP.
On May 1, 1997, the Small Cap Equity division was added to Separate Account
Eleven. The underlying fund in this division is offered by General American
Capital Company and is managed by Conning Asset Management Company. The
investment objective of the 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.
The underlying products currently offered by this division are VUL-95, VGSP,
and VUL-100.
<PAGE> 88
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 5 - PURCHASES AND SALES
During the year ended December 31, 1997, purchases including net realized
gain and income from distribution and proceeds from sales of General American
Capital Company shares were as follows:
<TABLE>
<CAPTION>
S & P 500 Money Bond Managed Asset International Mid-Cap Small-Cap
Index Market Index Equity Allocation Index Equity Equity
Fund Fund Fund Fund Fund Fund Fund Fund
---------- ----------- ---------- ---------- ---------- ------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases $8,442,192 $18,247,884 $1,749,901 $1,578,051 $2,343,633 $1,765,214 $2,156,245 $1,293,907
========== =========== ========== ========== ========== ========== ========== ==========
Sales $5,448,171 $17,983,425 $5,140,723 $ 590,072 $1,218,119 $ 628,010 $1,147,830 $ 17,782
========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
During the year ended December 31, 1997, purchases (including dividend
reinvestment) and proceeds from sales of Variable Insurance Products Fund
Shares were as follows:
<TABLE>
<CAPTION>
Equity-Income Growth Overseas High Income
Fund Fund Fund Fund
------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Purchases $5,671,668 $6,780,325 $3,016,982 $1,043,519
========== ========== ========== ==========
Sales $1,100,161 $ 960,461 $ 418,954 $ 240,128
========== ========== ========== ==========
</TABLE>
During the year ended December 31, 1997, purchases (including dividend
reinvestment) and proceeds from sales of Variable Insurance Products Fund II
shares were as follows:
<TABLE>
<CAPTION>
Asset Manager
Fund
-------------
<S> <C>
Purchases $367,321
========
Sales $111,483
========
</TABLE>
During the year ended December 31, 1997, purchases (including dividend
reinvestment) and proceeds from sales of Van Eck Worldwide Insurance Trust
shares were as follows:
<TABLE>
<CAPTION>
Worldwide Hard
Assets Fund
--------------
<S> <C>
Purchases $152,061
========
Sales $ 53,087
========
</TABLE>
During the year ended December 31, 1997, purchases (including dividend
reinvestment) and proceeds from sales of Russell Insurance Funds shares were as
follows:
<TABLE>
<CAPTION>
Multi-Style Core Bond Aggressive Non-US
Equity Fund Fund Equity Fund Fund
----------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Purchases $2,574,829 $1,160,983 $1,338,577 $863,517
========== ========== ========== ========
Sales $ 43,266 $ 35,533 $ 20,072 $ 23,327
========== ========== ========== ========
</TABLE>
<PAGE> 89
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
--------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- ---------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 70,404 56,960 78,391 98,719 52,946 206,798
Withdrawals (29,686) (32,408) (101,054) (110,821) (79,319) (215,226)
Outstanding units, beginning of year 195,587 171,035 193,698 58,805 85,178 93,606
-------- ------- -------- -------- ---------- --------
Outstanding units, end of year 236,305 195,587 171,035 46,703 58,805 85,178
======== ======= ======== ======== ========== ========
Variable General Select Plus:
Deposits 146,632 376,931 30,100 942,448 1,489,642 344,162
Withdrawals (305,772) (16,019) (15,451) (900,950) (1,173,354) (215,211)
Outstanding units, beginning of year 407,634 46,722 32,073 494,355 178,067 49,116
-------- ------- -------- -------- ---------- --------
Outstanding units, end of year 248,494 407,634 46,722 535,853 494,355 178,067
======== ======= ======== ======== ========== ========
Variable Universal Life-100:<F*>
Deposits 212,106 151,173 14,240 738,912 729,350 214,797
Withdrawals (41,462) (42,505) (687) (707,676) (698,266) (110,989)
Outstanding units, beginning of period 122,221 13,553 0 134,892 103,808 0
-------- ------- -------- -------- ---------- --------
Outstanding units, end of period 292,865 122,221 13,553 166,128 134,892 103,808
======== ======= ======== ======== ========== ========
Russell Variable Universal Life:<F**> 435,785
Deposits (427,238)
Withdrawals 0
--------
Outstanding units, beginning of period
Outstanding units, end of period 8,547
========
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F**>The Russell Variable Universal Life product was introduced in 1997, and
the first deposit was received on May 6, 1997.
(continued)
</TABLE>
<PAGE> 90
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years ended
December 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
--------------------------------- -------------------------------
1997 1996 1995 1997 1996 1995
-------- ------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 45,996 20,690 28,341 20,213 22,639 37,042
Withdrawals (19,985) (19,502) (102,229) (19,170) (23,620) (68,803)
Outstanding units, beginning of year 71,443 70,255 144,143 91,667 92,648 124,409
-------- ------- -------- ------- ------- -------
Outstanding units, end of year 97,454 71,443 70,255 92,710 91,667 92,648
======== ======= ======== ======= ======= =======
Variable General Select Plus:
Deposits 26,599 422,790 5,765 22,411 20,875 5,835
Withdrawals (398,540) (6,268) (1,249) (10,526) (1,816) (595)
Outstanding units, beginning of year 422,341 5,819 1,303 25,596 6,537 1,297
-------- ------- -------- ------- ------- -------
Outstanding units, end of year 50,400 422,341 5,819 37,481 25,596 6,537
======== ======= ======== ======= ======= =======
Variable Universal Life-100:<F*>
Deposits 38,781 31,945 1,670 38,918 15,297 1,823
Withdrawals (8,471) (8,214) (75) (8,793) (2,675) (168)
Outstanding units, beginning of period 25,326 1,595 0 14,277 1,655 0
-------- ------- -------- ------- ------- -------
Outstanding units, end of period 55,636 25,326 1,595 44,402 14,277 1,655
======== ======= ======== ======= ======= =======
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 91
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
------------------------------- -------------------------------
1997 1996 1995 1997 1996 1995
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 58,255 67,461 80,183 56,157 60,637 74,018
Withdrawals (49,785) (33,247) (98,461) (45,488) (32,650) (28,390)
Outstanding units, beginning of year 274,368 240,154 258,432 164,557 136,570 90,942
------- ------- ------- ------- ------- -------
Outstanding units, end of year 282,838 274,368 240,154 175,226 164,557 136,570
======= ======= ======= ======= ======= =======
Variable General Select Plus:
Deposits 21,682 21,668 12,925 35,709 24,970 16,837
Withdrawals (10,372) (18,560) (31,947) (10,776) (12,229) (6,722)
Outstanding units, beginning of year 61,197 58,089 77,111 45,125 32,384 22,269
------- ------- ------- ------- ------- -------
Outstanding units, end of year 72,507 61,197 58,089 70,058 45,125 32,384
======= ======= ======= ======= ======= =======
Variable Universal Life-100:<F**>
Deposits 44,721 23,767 1,072 56,601 46,973 4,468
Withdrawals (11,617) (2,830) (39) (15,926) (7,916) (777)
Outstanding units, beginning of year 21,970 1,033 0 42,748 3,691 0
------- ------- ------- ------- ------- -------
Outstanding units, end of year 55,074 21,970 1,033 83,423 42,748 3,691
======= ======= ======= ======= ======= =======
General American Life Insurance Company
seed money:
Deposits 0 0 0 0 0 0
Withdrawals 0 0 0 0 0 0
Outstanding units, beginning of year 0 0 0 200,000 200,000 200,000
------- ------- ------- ------- ------- -------
Outstanding units, end of year 0 0 0 200,000 200,000 200,000
======= ======= ======= ======= ======= =======
<FN>
<F*> This fund was formerly known as the International Equity Fund.
<F**> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 92
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, 1996, and 1995, for the Mid-Cap Equity Fund
Division and the period ended December 31, 1997, for the Small-Cap Equity Fund
Division:
<TABLE>
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
------------------------------- -------------------------------
1997 1996 1995 1997<F***>
------- -------- ------- ----------
<S> <C> <C> <C> <C>
Variable Universal Life - 95:
Deposits 50,013 67,217 94,909 35,503
Withdrawals (61,032) (50,100) (88,190) (326)
Outstanding units, beginning of period 185,140 168,023 161,304 0
------- ------- ------- ------
Outstanding units, end of period 174,121 185,140 168,023 35,177
======= ======= ======= ======
Variable General Select Plus:
Deposits 43,764 17,983 22,352 30,298
Withdrawals (14,054) (16,026) (12,685) (271)
Outstanding units, beginning of period 48,209 46,252 36,585 0
------- ------- ------- ------
Outstanding units, end of period 77,919 48,209 46,252 30,027
======= ======= ======= ======
Variable Universal Life - 100:<F**>
Deposits 36,664 35,395 4,498 23,110
Withdrawals (15,674) (6,929) (725) (540)
Outstanding units, beginning of period 32,239 3,773 0 0
------- ------- ------- ------
Outstanding units, end of period 53,229 32,239 3,773 22,570
======= ======= ======= ======
General American Life Insurance Company
seed money:
Deposits 0 0 0
Withdrawals 0 (100,000) 0
Outstanding units, beginning of year 0 100,000 100,000
------- ------- -------
Outstanding units, end of year 0 0 100,000
======= ======= =======
<FN>
<F*> This fund was formerly known as the Special Equity Fund.
<F**> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F***> The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
</TABLE>
<PAGE> 93
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, 1996, and 1995:
<TABLE>
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
------------------------------- -------------------------------
1997 1996 1995 1997 1996 1995
------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 73,369 100,383 143,543 110,237 141,831 181,296
Withdrawals (68,932) (61,252) (48,670) (69,361) (101,041) (80,832)
Outstanding units, beginning of year 287,907 248,776 153,903 367,037 326,247 225,783
------- ------- ------- ------- -------- -------
Outstanding units, end of year 292,344 287,907 248,776 407,913 367,037 326,247
======= ======= ======= ======= ======== =======
Variable General Select Plus:
Deposits 107,293 95,653 78,040 151,169 136,928 90,761
Withdrawals (41,943) (24,220) (34,513) (56,898) (38,737) (60,661)
Outstanding units, beginning of year 160,791 89,358 45,831 233,747 135,556 105,456
------- ------- ------- ------- -------- -------
Outstanding units, end of year 226,141 160,791 89,358 328,018 233,747 135,556
======= ======= ======= ======= ======== =======
Variable Universal Life-100:<F*>
Deposits 161,018 167,806 20,481 227,448 213,702 25,375
Withdrawals (42,604) (22,709) (1,718) (64,065) (38,214) (1,865)
Outstanding units, beginning of period 163,860 18,763 0 198,998 23,510 0
------- ------- ------- ------- -------- -------
Outstanding units, end of period 282,274 163,860 18,763 362,381 198,998 23,510
======= ======= ======= ======= ======== =======
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 94
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, 1996, and 1995, for the Overseas Fund Division
and for the years ended December 31, 1997, and 1996, and the period ended
December 31, 1995, for the Asset Manager Division:.
<TABLE>
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
------------------------------- ---------------------------------
1997 1996 1995 1997 1996 1995<F*>
------- ------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 73,211 86,129 97,609 1,053 1,196 331
Withdrawals (33,419) (57,328) (42,775) (363) (80) (4)
Outstanding units, beginning of period 202,771 173,970 119,136 1,443 327 0
------- ------- ------- ------ ------ -----
Outstanding units, end of period 242,563 202,771 173,970 2,132 1,443 327
======= ======= ======= ====== ====== =====
Variable General Select Plus:
Deposits 78,015 59,185 46,058 4,792 4,133 1,534
Withdrawals (24,003) (18,099) (24,367) (1,323) (1,450) (6)
Outstanding units, beginning of period 114,696 73,610 51,919 4,211 1,528 0
------- ------- ------- ------ ------ -----
Outstanding units, end of period 168,708 114,696 73,610 7,680 4,211 1,528
======= ======= ======= ====== ====== =====
Variable Universal Life-100:<F**>
Deposits 61,939 59,253 9,829 19,775 17,799 3,044
Withdrawals (16,003) (12,929) (1,146) (6,893) (3,550) (100)
Outstanding units, beginning of period 55,007 8,683 0 17,193 2,944 0
------- ------- ------- ------ ------ -----
Outstanding units, end of period 100,943 55,007 8,683 30,075 17,193 2,944
======= ======= ======= ====== ====== =====
<FN>
<F*> The Asset Manager fund began operations on July 19, 1995.
<F**>The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 95
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the years
ended December 31, 1997, and 1996, and the period ended December 31, 1995:
<TABLE>
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F**>
---------------------------------- ---------------------------------
1997 1996 1995<F*> 1997 1996 1995<F*>
------- ------ -------- ------ ----- --------
<S> <C> <C> <C> <C> <C> <C>
Variable Universal Life-95:
Deposits 8,197 18,576 6,217 5,256 6,777 135
Withdrawals (10,956) (3,225) (237) (857) (976) (9)
Outstanding units, beginning of period 21,331 5,980 0 5,927 126 0
------- ------ ----- ------ ------ ---
Outstanding units, end of period 18,572 21,331 5,980 10,326 5,927 126
======= ====== ===== ====== ====== ===
Variable General Select Plus:
Deposits 36,763 32,705 6,436 1,994 4,222 0
Withdrawals (8,788) (2,369) (115) (3,232) (92) 0
Outstanding units, beginning of period 36,657 6,321 0 4,130 0 0
------- ------ ----- ------ ------ ---
Outstanding units, end of period 64,632 36,657 6,321 2,892 4,130 0
======= ====== ===== ====== ====== ===
Variable Universal Life-100:<F***>
Deposits 39,145 41,415 6,662 7,159 6,746 890
Withdrawals (9,470) (8,355) (159) (2,531) (1,660) (31)
Outstanding units, beginning of period 39,563 6,503 0 5,945 859 0
------- ------ ----- ------ ------ ---
Outstanding units, end of period 69,238 39,563 6,503 10,573 5,945 859
======= ====== ===== ====== ====== ===
<FN>
<F*> The High Income Fund and Worldwide Hard Assets Fund began operations on May
24, and August 9, 1995, respectively.
<F**> This fund was formerly known as the Gold & Natural Resources Fund.
<F***>The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 96
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 6 - ACCUMULATION UNIT ACTIVITY (CONTINUED)
The following is a summary of the accumulation unit activity for the period
ended December 31, 1997:
<TABLE>
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- -------------- -------------
1997<F*> 1997<F*> 1997<F*> 1997<F*>
------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Variable General Select Plus:<F**>
Deposits 47,597 21,805 25,379 28,863
Withdrawals (667) (391) (279) (285)
Outstanding units, beginning of period 0 0 0 0
------- ------ ------ ------
Outstanding units, end of period 46,930 21,414 25,100 28,578
======= ====== ====== ======
Russell Variable Universal Life:<F***>
Deposits 153,054 86,149 75,650 50,101
Withdrawals (1,563) (2,024) (494) (1,018)
Outstanding units, beginning of period 0 0 0 0
------- ------ ------ ------
Outstanding units, end of period 151,491 84,125 75,156 49,083
======= ====== ====== ======
<FN>
<F*> The Multi-Style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and
Non-US Fund began operations on January 2, 1997.
<F**> The Variable General Select Plus product was introduced in 1997, and the
first deposit was received on June 26, 1997.
<F***>The Russell Variable Universal Life product was introduced in 1997, and
the first deposit was received on June 6, 1997.
</TABLE>
<PAGE> 97
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT
Deposits into the Separate Account are used to purchase shares in the
Capital Company, Variable Insurance Products Funds, Variable Insurance
Products Fund II, Van Eck Worldwide Insurance Trust, or Russell Insurance
Funds. Net deposits represent the amounts available for investment in such
shares after deduction of sales charges, premium taxes, administrative
costs, insurance, underwriting and acquisition expense, cost of insurance,
and cost of optional benefits by rider. Realized and unrealized capital
gains (losses) have been excluded from net deposits into the Separate
Account because they have been included in increase (decrease) in net assets
resulting from operations in the Statements or Changes in Net Assets.
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
----------------------------------- ------------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ----------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,099,723 $1,063,999 $ 919,322 $ 1,794,475 $ 575,302 $ 2,001,421
Transfers between fund divisions and
General American 931,860 139,650 472,868 (1,471,521) (728,445) (1,597,558)
Surrenders and withdrawals (144,131) (82,719) (1,380,995) (20,934) (107,442) (346,828)
---------- ---------- ----------- ----------- --------- -----------
Total gross deposits, transfers between
fund divisions and surrenders 1,887,452 1,120,930 11,195 302,020 (260,585) 57,035
---------- ---------- ----------- ----------- --------- -----------
Deductions:
Premium load charges 84,994 84,266 82,459 371,169 46,330 194,508
Cost of insurance and administrative expenses 481,051 430,221 435,147 135,973 105,165 329,711
---------- ---------- ----------- ----------- --------- -----------
Total deductions 566,045 514,487 517,606 507,142 151,495 524,219
---------- ---------- ----------- ----------- --------- -----------
Net deposits into (withdrawals from)
Separate Account $1,321,407 $ 606,443 $ (506,411) $ (205,122) $(412,080) $ (467,184)
========== ========== =========== =========== ========= ===========
(continued)
</TABLE>
<PAGE> 98
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
---------------------------------- ---------------------------------
1997 1996 1995 1997 1996 1995
--------- --------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 312,433 $ 321,458 $ 421,967 $ 359,432 $ 395,649 $ 465,063
Transfers between fund divisions and
General American 504,481 20,627 62,346 53,604 (120,443) (121,086)
Surrenders and withdrawals (161,856) (171,083) (1,586,477) (162,045) (83,215) (647,675)
--------- --------- ----------- --------- --------- ---------
Total gross deposits, transfers between
fund divisions and surrenders 655,058 171,002 (1,102,164) 250,991 191,991 (303,698)
--------- --------- ----------- --------- --------- ---------
Deductions:
Premium load charges 24,355 25,685 32,747 27,564 31,741 38,137
Cost of insurance and administrative expenses 111,704 119,034 206,477 191,337 187,326 234,100
--------- --------- ----------- --------- --------- ---------
Total deductions 136,059 144,719 239,224 218,901 219,067 272,237
--------- --------- ----------- --------- --------- ---------
Net deposits into (withdrawals from)
Separate Account $ 518,999 $ 26,283 $(1,341,388) $ 32,090 $ (27,076) $(575,935)
========= ========= =========== ========= ========= =========
(continued)
</TABLE>
<PAGE> 99
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
------------------------------------ ---------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,571,785 $1,478,021 $ 1,361,239 $ 674,809 $ 657,882 $635,309
Transfers between fund divisions and
General American (542,327) (26,293) (10,959) (244,489) 132,812 302,360
Surrenders and withdrawals (261,445) (117,682) (1,175,619) (27,295) (102,036) (45,598)
---------- ---------- ----------- --------- --------- --------
Total gross deposits, transfers between
fund divisions and surrenders 768,013 1,334,046 174,661 403,025 688,658 892,071
---------- ---------- ----------- --------- --------- --------
Deductions:
Premium load charges 115,555 113,909 115,321 53,326 52,174 54,639
Cost of insurance and administrative
expenses 472,278 467,810 559,425 206,172 215,112 211,351
---------- ---------- ----------- --------- --------- --------
Total deductions 587,833 581,719 674,746 259,498 267,286 265,990
---------- ---------- ----------- --------- --------- --------
Net deposits into (withdrawals from)
Separate Account $ 180,180 $ 752,327 $ (500,085) $ 143,527 $ 421,372 $626,081
========== ========== =========== ========= ========= ========
<FN>
<F*> This fund was formerly known as the International Equity Fund.
(continued)
</TABLE>
<PAGE> 100
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- --------------------------
<TABLE>
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
----------------------------------- ---------------------
1997 1996 1995 1997<F***>
--------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Total gross deposits $ 731,205 $ 927,388 $ 713,819 $ 81,175
Transfers between fund divisions and
General American (545,250) (325,567) (319,339) 386,732
Surrenders and withdrawals (30,828) (74,752) (35,191) 0
Seed withdrawals <F**> 0 (1,494,837) 0 0
--------- ----------- --------- --------
Total gross deposits, transfers between
fund divisions and surrenders 155,127 (967,768) 359,289 467,907
--------- ----------- --------- --------
Deductions:
Premium load charges 55,258 73,857 57,765 6,341
Cost of insurance and administrative expenses 226,846 224,222 228,560 4,229
--------- ----------- --------- --------
Total deductions 282,104 298,079 286,325 10,570
--------- ----------- --------- --------
Net deposits into (withdrawals from)
Separate Account $(126,977) $(1,265,847) $ 72,964 $457,337
========= =========== ========= ========
<FN>
<F*> This fund was formerly known as the Special Equity Fund.
<F**> Represents funds distributed to General American Life Insurance Company
in repayment of seed money used to start the Special Equity Fund in 1993.
<F***>The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
</TABLE>
<PAGE> 101
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,258,958 $1,399,658 $1,217,315 $1,700,056 $2,077,054 $1,771,614
Transfers between fund divisions and
General American (346,404) 10,733 565,593 124,428 (252,029) 348,401
Surrenders and withdrawals (243,196) (186,491) (37,075) (260,054) (286,745) (61,341)
---------- ---------- ---------- ---------- ---------- ----------
Total gross deposits, transfers between
fund divisions and surrenders 669,358 1,223,900 1,745,833 1,564,430 1,438,280 2,058,674
---------- ---------- ---------- ---------- ---------- ----------
Deductions:
Premium load charges 98,808 111,476 101,562 134,071 165,735 145,300
Cost of insurance and administrative expenses 470,011 473,165 406,596 606,328 610,838 588,684
---------- ---------- ---------- ---------- ---------- ----------
Total deductions 568,819 584,641 508,158 740,399 776,573 733,984
---------- ---------- ---------- ---------- ---------- ----------
Net deposits into Separate Account $ 100,539 $ 639,259 $1,237,675 $ 824,031 $ 661,707 $1,324,690
========== ========== ========== ========== ========== ==========
(continued)
</TABLE>
<PAGE> 102
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
---------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995<F*>
---------- ---------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 927,173 $1,128,054 $ 978,388 $ 9,236 $ 3,210 $ 24
Transfers between fund divisions and
General American 262,454 (173,088) 156,839 3,098 10,046 3,317
Surrenders and withdrawals (121,639) (163,405) (33,911) 0 0 0
---------- ---------- ---------- ------- ------- ------
Total gross deposits, transfers between
fund divisions and surrenders 1,067,988 791,561 1,101,316 12,334 13,256 3,341
---------- ---------- ---------- ------- ------- ------
Deductions:
Premium load charges 71,458 89,820 79,076 706 248 3
Cost of insurance and administrative expenses 302,840 289,700 317,551 1,874 896 39
---------- ---------- ---------- ------- ------- ------
Total deductions 374,298 379,520 396,627 2,580 1,144 42
---------- ---------- ---------- ------- ------- ------
Net deposits into Separate Account $ 693,690 $ 412,041 $ 704,689 $ 9,754 $12,112 $3,299
========== ========== ========== ======= ======= ======
<FN>
<F*>The Asset Manager Fund began operations on July 19, 1995.
(continued)
</TABLE>
<PAGE> 103
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-95:
- ---------------------------
<TABLE>
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F**>
--------------------------------- --------------------------------
1997 1996 1995<F*> 1997 1996 1995<F*>
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 61,425 $ 47,325 $ 6,373 $29,642 $ 7,990 $1,007
Transfers between fund divisions and
General American (76,243) 146,648 59,489 31,281 63,119 387
-------- -------- ------- ------- ------- ------
Total gross deposits, transfers between
fund divisions and surrenders (14,818) 193,973 65,862 60,923 71,109 1,394
-------- -------- ------- ------- ------- ------
Deductions:
Premium load charges 4,910 3,747 499 2,223 595 81
Cost of insurance and administrative expenses 19,821 16,948 2,512 5,330 3,272 87
-------- -------- ------- ------- ------- ------
Total deductions 24,731 20,695 3,011 7,553 3,867 168
-------- -------- ------- ------- ------- ------
Net deposits into (withdrawals from)
Separate Account $(39,549) $173,278 $62,851 $53,370 $67,242 $1,226
======== ======== ======= ======= ======= ======
<FN>
<F*> The High Income Fund and Worldwide Hard Assets fund began operations on May
24, and August 9, 1995, respectively.
<F**>This fund was formerly known as the Gold & Natural Resources Fund.
(continued)
</TABLE>
<PAGE> 104
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
------------------------------------ --------------------------------------
1997 1996 1995 1997 1996 1995
----------- ---------- -------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 1,229,167 $ 475,955 $ 47,504 $11,949,827 $ 18,203,638 $ 3,333,097
Transfers between fund divisions
and General American 1,639,191 5,512,487 182,278 (6,333,824) (13,115,248) (1,350,435)
Surrenders and withdrawals (5,100,149) (28,210) (15,259) (4,042,319) (15,934) (10,440)
----------- ---------- -------- ----------- ------------ -----------
Total gross deposits, transfers between
fund divisions and surrenders (2,231,791) 5,960,232 214,523 1,573,684 5,072,456 1,972,222
----------- ---------- -------- ----------- ------------ -----------
Deductions:
Premium load charges 88,924 35,750 11,884 870,893 1,315,430 232,745
Cost of insurance and administrative expenses 158,092 63,207 21,050 158,166 126,052 88,973
----------- ---------- -------- ----------- ------------ -----------
Total deductions 247,016 98,957 32,934 1,029,059 1,441,482 321,718
----------- ---------- -------- ----------- ------------ -----------
Net deposits into (withdrawals from)
Separate Account $(2,478,807) $5,861,275 $181,589 $ 544,625 $ 3,630,974 $ 1,650,504
=========== ========== ======== =========== ============ ===========
(continued)
</TABLE>
<PAGE> 105
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
------------------------------------ --------------------------------
1997 1996 1995 1997 1996 1995
----------- ---------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $ 170,971 $ 68,383 $ 9,129 $225,421 $131,764 $ 9,302
Transfers between fund divisions
and General American 109,381 4,780,139 57,441 49,038 170,404 60,563
Surrenders and withdrawals (4,675,478) (5,060) (12,416) (28,866) 0 0
----------- ---------- -------- -------- -------- -------
Total gross deposits, transfers between
fund divisions and surrenders (4,395,126) 4,843,462 54,154 245,593 302,168 69,865
----------- ---------- -------- -------- -------- -------
Deductions:
Premium load charges 12,639 5,137 614 16,872 9,560 645
Cost of insurance and administrative expenses 24,838 16,027 1,862 24,211 11,739 1,602
----------- ---------- -------- -------- -------- -------
Total deductions 37,477 21,164 2,476 41,083 21,299 2,247
----------- ---------- -------- -------- -------- -------
Net deposits into (withdrawals from)
Separate Account $(4,432,603) $4,822,298 $ 51,678 $204,510 $280,869 $67,618
=========== ========== ======== ======== ======== =======
(continued)
</TABLE>
<PAGE> 106
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F*>
-------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $225,188 $170,662 (34,323) $273,454 $181,044 $ 76,251
Transfers between fund divisions
and General American 92,485 (27,308) (131,408) 190,371 32,353 76,707
Surrenders and withdrawals (48,400) (26,276) (10,179) (47,175) (10,048) (4,465)
-------- -------- --------- -------- -------- --------
Total gross deposits, transfers between
fund divisions and surrenders 269,273 117,078 (175,910) 416,650 203,349 148,493
-------- -------- --------- -------- -------- --------
Deductions:
Premium load charges 17,168 12,611 6,512 19,728 13,690 7,697
Cost of insurance and administrative expenses 67,268 52,342 39,594 37,091 23,940 16,684
-------- -------- --------- -------- -------- --------
Total deductions 84,436 64,953 46,106 56,819 37,630 24,381
-------- -------- --------- -------- -------- --------
Net deposits into (withdrawals from)
Separate Account $184,837 $ 52,125 $(222,016) $359,831 $165,719 $124,112
======== ======== ========= ======== ======== ========
<FN>
<F*>This fund was formerly known as the International Equity Fund.
(continued)
</TABLE>
<PAGE> 107
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F*> FUND DIVISION
-------------------------------- ----------------
1997 1996 1995 1997<F**>
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Total gross deposits $376,253 $191,049 $ 81,787 $ 59,270
Transfers between fund divisions
and General American 301,956 (58,467) 76,580 326,392
Surrenders and withdrawals (53,267) (52,717) (11,584) 0
-------- -------- -------- --------
Total gross deposits, transfers between
fund divisions and surrenders 624,942 79,865 146,783 385,662
-------- -------- -------- --------
Deductions:
Premium load charges 29,256 13,676 12,214 4,711
Cost of insurance and administrative expenses 40,346 26,565 21,651 3,518
-------- -------- -------- --------
Total deductions 69,602 40,241 33,865 8,229
-------- -------- -------- --------
Net deposits into Separate Account $555,340 $ 39,624 $112,918 $377,433
======== ======== ======== ========
<FN>
<F*> This fund was formerly known as the Special Equity Fund.
<F**>The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
</TABLE>
<PAGE> 108
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- -------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,043,306 $ 673,157 $285,714 $1,354,928 $ 899,999 $ 392,035
Transfers between fund divisions and
General American 658,129 638,476 446,973 957,813 888,367 225,243
Surrenders and withdrawals (148,279) (10,403) (62,763) (268,257) (48,837) (161,933)
---------- ---------- -------- ---------- ---------- ---------
Total gross deposits, transfers between
fund divisions and surrenders 1,553,156 1,301,230 669,924 2,044,484 1,739,529 455,345
---------- ---------- -------- ---------- ---------- ---------
Deductions:
Premium load charges 78,543 53,024 20,534 101,854 69,694 34,454
Cost of insurance and administrative expenses 163,469 112,967 58,881 206,497 136,072 82,849
---------- ---------- -------- ---------- ---------- ---------
Total deductions 242,012 165,991 79,415 308,351 205,766 117,303
---------- ---------- -------- ---------- ---------- ---------
Net deposits into Separate Account $1,311,144 $1,135,239 $590,509 $1,736,133 $1,533,763 $ 338,042
========== ========== ======== ========== ========== =========
(continued)
</TABLE>
<PAGE> 109
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
-------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995<F*>
-------- -------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $763,625 $385,284 $154,142 $53,004 $ 8,754 $ 255
Transfers between fund divisions
and General American 265,722 271,694 200,230 3,027 26,425 15,583
Surrenders and withdrawals (56,432) (45,712) (55,346) (2,184) (2,067) 0
-------- -------- -------- ------- ------- -------
Total gross deposits, transfers between
fund divisions and surrenders 972,915 611,266 299,026 53,847 33,112 15,838
-------- -------- -------- ------- ------- -------
Deductions:
Premium load charges 57,640 29,621 13,147 3,927 670 10
Cost of insurance and administrative expenses 71,616 46,151 31,516 3,625 1,631 56
-------- -------- -------- ------- ------- -------
Total deductions 129,256 75,772 44,663 7,552 2,301 66
-------- -------- -------- ------- ------- -------
Net deposits into Separate Account $843,659 $535,494 $254,363 $46,295 $30,811 $15,772
======== ======== ======== ======= ======= =======
<FN>
<F*> The Asset Manager Fund began operations on July 19, 1995.
(continued)
</TABLE>
<PAGE> 110
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F**>
--------------------------------- ------------------------------------
1997 1996 1995<F*> 1997 1996 1995<F*>
-------- -------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $201,994 $ 91,307 $ 603 $ 22,621 $ 1,869 $0
Transfers between fund divisions and
General American 207,353 278,491 68,178 1,823 45,785 0
Surrenders and withdrawals (6,433) 0 0 (36,871) 0 0
-------- -------- ------- -------- ------- --
Total gross deposits, transfers between
fund divisions and surrenders 402,914 369,798 68,781 (12,427) 47,654 0
-------- -------- ------- -------- ------- --
Deductions:
Premium load charges 15,004 7,156 37 1,715 175 0
Cost of insurance and administrative expenses 25,526 12,823 1,198 890 1,041 0
-------- -------- ------- -------- ------- --
Total deductions 40,530 19,979 1,235 2,605 1,216 0
-------- -------- ------- -------- ------- --
Net deposits into (withdrawals from)
Separate Account $362,384 $349,819 $67,546 $(15,032) $46,438 $0
======== ======== ======= ======== ======= ==
<FN>
<F*> The High Income Fund and Worldwide Hard Assets Fund began operations on May
24, and August 9, 1995, respectively.
<F**>This fund was formerly known as the Gold & Natural Resources Fund.
(continued)
</TABLE>
<PAGE> 111
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable General Select Plus:
- -----------------------------
<TABLE>
<CAPTION>
MULTI-STYLE AGGRESSIVE
EQUITY CORE BOND EQUITY NON-US
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------- ------------- -------------
1997<F*> 1997<F*> 1997<F*> 1997<F*>
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Total gross deposits $ 80,451 $ 17,978 $ 54,099 $ 42,059
Transfers between fund divisions and
General American 532,364 215,118 281,507 276,242
-------- -------- -------- --------
Total gross deposits and transfers
between fund divisions 612,815 233,096 335,606 318,301
-------- -------- -------- --------
Deductions:
Premium load charges 5,866 1,346 3,761 3,283
Cost of insurance and administrative expenses 8,425 2,474 3,632 3,028
-------- -------- -------- --------
Total deductions 14,291 3,820 7,393 6,311
-------- -------- -------- --------
Net deposits into Separate Account $598,524 $229,276 $328,213 $311,990
======== ======== ======== ========
<FN>
<F*>The Multi-Style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and
Non-US Fund began operations on January 2, 1997.
(continued)
</TABLE>
<PAGE> 112
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
S & P 500 INDEX MONEY MARKET
FUND DIVISION FUND DIVISION
------------------------------------ ---------------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- -------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,995,433 $ 606,419 $ 16,519 $ 8,679,144 $ 7,989,872 $ 2,385,983
Transfers between fund divisions and
General American 2,177,143 1,285,071 172,340 (7,303,949) (6,898,282) (1,031,031)
Surrenders and withdrawals (68,513) (12,850) 0 (3,421) (242) 0
---------- ---------- -------- ----------- ----------- -----------
Total gross deposits, transfers between
fund divisions and surrenders 4,104,063 1,878,640 188,859 1,371,774 1,091,348 1,354,952
---------- ---------- -------- ----------- ----------- -----------
Deductions:
Premium load charges 66,092 20,294 458 286,729 250,193 73,630
Cost of insurance and administrative expenses 671,147 258,742 9,056 599,119 502,668 124,621
---------- ---------- -------- ----------- ----------- -----------
Total deductions 737,239 279,036 9,514 885,848 752,861 198,251
---------- ---------- -------- ----------- ----------- -----------
Net deposits into Separate Account $3,366,824 $1,599,604 $179,345 $ 485,926 $ 338,487 $ 1,156,701
========== ========== ======== =========== =========== ===========
<FN>
<F*>The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 113
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
BOND INDEX MANAGED EQUITY
FUND DIVISION FUND DIVISION
-------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $184,259 $ 58,468 $ 2,634 $228,756 $102,809 $ 1,658
Transfers between fund divisions and
General American 265,500 257,285 16,903 432,012 120,203 21,497
Surrenders and withdrawals (4,282) (2,419) 0 (13,613) (413) 0
-------- -------- ------- -------- -------- -------
Total gross deposits, transfers between
fund divisions and surrenders 445,477 313,334 19,537 647,155 222,599 23,155
-------- -------- ------- -------- -------- -------
Deductions:
Premium load charges 6,186 1,906 79 7,603 3,442 48
Cost of insurance and administrative expenses 57,817 31,767 862 96,349 36,945 2,150
-------- -------- ------- -------- -------- -------
Total deductions 64,003 33,673 941 103,952 40,387 2,198
-------- -------- ------- -------- -------- -------
Net deposits into Separate Account $381,474 $279,661 $18,596 $543,203 $182,212 $20,957
======== ======== ======= ======== ======== =======
<FN>
<F*>The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 114
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION INTERNATIONAL INDEX
FUND DIVISION FUND DIVISION<F**>
-------------------------------- --------------------------------
1997 1996 1995 1997 1996 1995
-------- -------- ------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $297,431 $ 91,429 $ 926 $380,598 $202,195 $20,494
Transfers between fund divisions and
General American 423,970 233,391 12,569 259,917 315,663 27,674
Surrenders and withdrawals (7,250) (906) 0 (12,338) (2,005) 0
-------- -------- ------- -------- -------- -------
Total gross deposits, transfers between
fund divisions and surrenders 714,151 323,914 13,495 628,177 515,853 48,168
-------- -------- ------- -------- -------- -------
Deductions:
Premium load charges 10,273 3,162 30 12,990 6,724 656
Cost of insurance and administrative expenses 159,083 38,520 488 138,712 79,260 8,108
-------- -------- ------- -------- -------- -------
Total deductions 169,356 41,682 518 151,702 85,984 8,764
-------- -------- ------- -------- -------- -------
Net deposits into Separate Account $544,795 $282,232 $12,977 $476,475 $429,869 $39,404
======== ======== ======= ======== ======== =======
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F**>This fund was formerly known as the International Equity Fund.
(continued)
</TABLE>
<PAGE> 115
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life-100:<F*>
- --------------------------------
<TABLE>
<CAPTION>
MID-CAP EQUITY SMALL-CAP EQUITY
FUND DIVISION<F**> FUND DIVISION
-------------------------------- ----------------
1997 1996 1995 1997<F***>
-------- -------- ------- ----------
<S> <C> <C> <C> <C>
Total gross deposits $405,467 $232,270 $18,525 $ 48,912
Transfers between fund divisions and
General American 129,102 228,709 34,407 254,044
Surrenders and withdrawals (15,375) (5,591) 0 0
-------- -------- ------- --------
Total gross deposits, transfers between
fund divisions and surrenders 519,194 455,388 52,932 302,956
-------- -------- ------- --------
Deductions:
Premium load charges 13,537 7,772 598 1,579
Cost of insurance and administrative expenses 140,909 82,326 8,384 7,052
-------- -------- ------- --------
Total deductions 154,446 90,098 8,982 8,631
-------- -------- ------- --------
Net deposits into Separate Account $364,748 $365,290 $43,950 $294,325
======== ======== ======= ========
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F**> This fund was formerly known as the Special Equity Fund.
<F***>The Small-Cap Equity Fund began operations on May 1, 1997.
(continued)
</TABLE>
<PAGE> 116
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
EQUITY-INCOME GROWTH
FUND DIVISION FUND DIVISION
---------------------------------- ----------------------------------
1997 1996 1995 1997 1996 1995
---------- ---------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $1,996,233 $ 914,095 $ 44,385 $2,402,233 $1,361,304 $ 50,500
Transfers between fund divisions and
General American 792,184 1,521,792 219,488 1,492,743 1,759,062 304,735
Surrenders and withdrawals (44,826) (7,812) 0 (114,282) (38,619) 0
---------- ---------- -------- ---------- ---------- --------
Total gross deposits, transfers between
fund divisions and surrenders 2,743,591 2,428,075 263,873 3,780,694 3,081,747 355,235
---------- ---------- -------- ---------- ---------- --------
Deductions:
Premium load charges 66,340 29,267 1,400 80,190 44,819 1,424
Cost of insurance and administrative
expenses 572,720 303,902 21,879 842,557 472,178 25,541
---------- ---------- -------- ---------- ---------- --------
Total deductions 639,060 333,169 23,279 922,747 516,997 26,965
---------- ---------- -------- ---------- ---------- --------
Net deposits into Separate Account $2,104,531 $2,094,906 $240,594 $2,857,947 $2,564,750 $328,270
========== ========== ======== ========== ========== ========
<FN>
<F*>The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
(continued)
</TABLE>
<PAGE> 117
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
OVERSEAS ASSET MANAGER
FUND DIVISION FUND DIVISION
-------------------------------- ---------------------------------
1997 1996 1995 1997 1996 1995<F**>
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $508,810 $373,593 $ 25,338 $147,295 $ 50,502 $ 964
Transfers between fund divisions and
General American 313,710 307,488 82,196 109,004 137,452 30,404
Surrenders and withdrawals (22,505) (13,206) 0 (5,778) (2,165) 0
-------- -------- -------- -------- -------- -------
Total gross deposits, transfers between
fund divisions and surrenders 800,015 667,875 107,534 250,521 185,789 31,368
-------- -------- -------- -------- -------- -------
Deductions:
Premium load charges 17,197 11,611 762 4,955 1,674 28
Cost of insurance and administrative expenses 165,254 112,510 12,165 74,461 24,175 1,033
-------- -------- -------- -------- -------- -------
Total deductions 182,451 124,121 12,927 79,416 25,849 1,061
-------- -------- -------- -------- -------- -------
Net deposits into Separate Account $617,564 $543,754 $ 94,607 $171,105 $159,940 $30,307
======== ======== ======== ======== ======== =======
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F**>The Asset Manager Fund began operations on July 19, 1995.
(continued)
</TABLE>
<PAGE> 118
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Variable Universal Life - 100:<F*>
- ----------------------------------
<TABLE>
<CAPTION>
HIGH INCOME WORLDWIDE HARD ASSETS
FUND DIVISION FUND DIVISION<F***>
--------------------------------- --------------------------------
1997 1996 1995<F**> 1997 1996 1995<F**>
-------- -------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Total gross deposits $300,761 $158,842 $ 5,221 $63,004 $22,003 $ 193
Transfers between fund divisions and
General American 224,109 297,097 65,982 18,216 53,910 8,300
Surrenders and withdrawals (20,348) (11,551) 0 (4,909) (5,154) 0
-------- -------- ------- ------- ------- ------
Total gross deposits, transfers between
fund divisions and surrenders 504,522 444,388 71,203 76,311 70,759 8,493
-------- -------- ------- ------- ------- ------
Deductions:
Premium load charges 10,110 4,982 174 2,147 712 8
Cost of insurance and administrative expenses 105,718 57,557 1,693 19,651 13,421 297
-------- -------- ------- ------- ------- ------
Total deductions 115,828 62,539 1,867 21,798 14,133 305
-------- -------- ------- ------- ------- ------
Net deposits into Separate Account $388,694 $381,849 $69,336 $54,513 $56,626 $8,188
======== ======== ======= ======= ======= ======
<FN>
<F*> The Variable Universal Life 100 product was introduced in 1995, and the
first deposit was received on June 7, 1995.
<F**> The High Income Fund and Gold & Natural Resources Fund began operations on
May 24, and August 9, 1995, respectively.
<F***>This fund was formerly known as the Gold & Natural Resources Fund.
(continued)
</TABLE>
<PAGE> 119
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 7 - SUMMARY OF GROSS AND NET DEPOSITS INTO SEPARATE ACCOUNT (CONTINUED)
Russell Variable Universal Life:<F*>
- ------------------------------------
<TABLE>
<CAPTION>
MONEY MULTI-STYLE CORE AGGRESSIVE
MARKET EQUITY BOND EQUITY NON-US
FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION FUND DIVISION
------------- ------------ ------------- ------------- -------------
1997<F**> 1997<F**> 1997<F**> 1997<F**> 1997<F**>
------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Total gross deposits $ 4,627,386 $ 19,255 $ 3,472 $ 12,641 $ 8,990
Transfers between fund divisions and
General American (4,374,607) 1,937,967 914,278 987,308 532,277
Surrenders and withdrawals 0 (328) 0 (94) (137)
----------- ---------- -------- -------- --------
Total gross deposits, transfers between
fund divisions and surrenders 252,779 1,956,894 917,750 999,855 541,130
----------- ---------- -------- -------- --------
Deductions:
Premium load charges 72,762 1,369 0 822 548
Cost of insurance and administrative expenses 72,945 19,567 21,735 6,442 10,345
----------- ---------- -------- -------- --------
Total deductions 145,707 20,936 21,735 7,264 10,893
----------- ---------- -------- -------- --------
Net deposits into Separate Account $ 107,072 $1,935,958 $896,015 $992,591 $530,237
=========== ========== ======== ======== ========
<FN>
<F*> Russell Variable Universal Life product was introduced in 1997, and the
first deposit was received on June 6, 1997.
<F**>The Multi-Style Equity Fund, Core Bond Fund, Aggressive Equity Fund, and
Non-US Fund began operations on January 2, 1997.
</TABLE>
<PAGE> 120
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholder of General American Life Insurance Company:
We have audited the accompanying consolidated balance sheets of General American
Life Insurance Company and subsidiaries as of December 31, 1997 and 1996, and
the related consolidated statements of operations, stockholder equity, and cash
flows for each of the years in the three-year period ended December 31, 1997.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of General American
Life Insurance Company and subsidiaries as of December 31, 1997 and 1996, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements, in 1996 the
Company adopted 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.
St. Louis, Missouri
March 5, 1998
<PAGE> 121
GENERAL AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
AS OF DECEMBER 31
ASSETS 1997 1996
<S> <C> <C>
Fixed maturities:
Available-for-sale, at fair value $ 9,115,519 6,758,309
Mortgage loans, net 2,140,262 2,273,627
Real estate, net 140,145 203,767
Equity securities, at fair value 24,211 20,905
Policy loans 2,073,152 1,917,861
Short-term investments 190,374 55,594
Other invested assets 243,921 183,612
----------- ----------
Total investments 13,927,584 11,413,675
Cash and cash equivalents 358,879 142,724
Accrued investment income 168,592 148,419
Reinsurance recoverables and other contract deposits 4,117,958 3,264,644
Deferred policy acquisition costs 695,253 652,251
Other assets 488,582 442,139
Separate account assets 4,118,860 2,833,258
----------- ----------
Total assets $23,875,708 18,897,110
=========== ==========
LIABILITIES AND STOCKHOLDER EQUITY
Policy and contract liabilities:
Future policy benefits $ 4,933,787 4,238,033
Policyholder account balances:
Universal life 2,534,744 1,960,726
Annuities 4,161,946 4,321,241
Pension funds 4,732,400 2,778,834
Policy and contract claims 458,606 352,433
Dividends payable to policyholders 113,525 103,019
----------- ----------
Total policy and contract liabilities 16,935,008 13,754,286
Amounts payable to reinsurers 310,592 142,661
Long-term debt and notes payable 214,477 295,614
Other liabilities and accrued expenses 826,868 670,109
Deferred tax liability 89,046 43,277
Separate account liabilities 4,112,666 2,810,907
----------- ----------
Total liabilities 22,488,657 17,716,854
Minority interests 216,555 182,469
Stockholder equity:
Common stock, $1 par value, 5,000,000 shares
authorized, 3,000,000 shares issued and
outstanding in 1997 and 0 in 1996 3,000 -
Additional paid in capital 3,000 -
Retained earnings 1,055,233 963,230
Foreign currency translation adjustments,
net of taxes (19,481) (15,810)
Unrealized gain on investments, net of taxes 128,744 50,367
----------- ----------
Total stockholder equity 1,170,496 997,787
----------- ----------
Total liabilities and stockholder equity $23,875,708 18,897,110
=========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 122
GENERAL AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
REVENUES 1997 1996 1995
<S> <C> <C> <C>
Insurance premiums and other considerations $1,768,169 1,623,228 1,498,013
Net investment income 945,542 806,883 676,404
Ceded commissions 44,902 27,538 18,523
Other income 362,160 280,803 182,193
Net realized investment gains 28,538 24,531 280,756
--------- --------- ---------
Total revenues 3,149,311 2,762,983 2,655,889
BENEFITS AND EXPENSES
Policy benefits 1,528,333 1,379,803 1,150,188
Interest credited to policyholder account balances 345,937 262,532 192,522
--------- --------- ---------
Total policyholder benefits 1,874,270 1,642,335 1,342,710
Dividends to policyholders 182,146 171,904 264,658
Policy acquisition costs 168,045 143,094 138,811
Other insurance and operating expenses 739,814 642,636 522,986
--------- --------- ---------
Total benefits and expenses 2,964,275 2,599,969 2,269,165
--------- --------- ---------
Income before provision for income taxes
and minority interest 185,036 163,014 386,724
--------- --------- ---------
Income tax provision (benefit):
Current 65,778 45,902 115,769
Deferred (113) 13,992 29,411
--------- --------- ---------
Total provision for income taxes 65,665 59,894 145,180
--------- --------- ---------
Income before minority interest 119,371 103,120 241,544
Minority interest in earnings of consolidated subsidiaries (22,134) (19,888) (17,512)
--------- --------- ---------
Net income $ 97,237 83,232 224,032
========= ========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 123
GENERAL AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Foreign
currency Unrealized
translation gain (loss) on Total
Common Additional Retained adjustments, investments, stockholder
stock paid in capital earnings net of taxes net of taxes equity
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ - - 646,727 (20,175) (65,409) 561,143
Net income 224,032 224,032
Foreign currency translation adjustments 5,908 5,908
Change in unrealized gain (loss) on
investments, net of tax 162,864 162,864
Other, net 3,136 3,136
--------------------------------------------------------------------------------
Balance at December 31, 1995 - - 873,895 (14,267) 97,455 957,083
Net income 83,232 83,232
Foreign currency translation adjustments (1,543) (1,543)
Change in unrealized gain (loss) on
investments, net on tax (47,088) (47,088)
Other, net 6,103 6,103
--------------------------------------------------------------------------------
Balance at December 31, 1996 - - 963,230 (15,810) 50,367 997,787
Net income 97,237 97,237
Foreign currency translation adjustments (3,671) (3,671)
Change in unrealized gain (loss) on
investments, net of tax 78,377 78,377
Issuance of common stock 3,000 3,000 (6,000) -
Dividend to parent (4,480) (4,480)
Other, net 5,246 5,246
--------------------------------------------------------------------------------
Balance at December 31, 1997 $3,000 3,000 1,055,233 (19,481) 128,744 1,170,496
================================================================================
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 124
<TABLE>
<CAPTION>
GENERAL AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
YEARS ENDED DECEMBER 31
CASH FLOWS FROM OPERATING ACTIVITIES 1997 1996 1995
<S> <C> <C> <C>
Net income $ 97,237 83,232 224,032
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Change in:
Accrued investment income (20,568) (16,275) (22,202)
Reinsurance recoverables and other contract deposits (838,390) (159,713) 262,054
Deferred policy acquisition costs (113,040) (87,249) (23,141)
Other assets (61,796) (51,444) (67,650)
Future policy benefits 693,052 330,511 399,261
Policy and contract claims 105,503 14,652 74,173
Other liabilities and accrued expenses 319,787 65,184 184,756
Deferred income taxes (113) 13,992 29,411
Policyholder considerations (137,163) (144,748) (140,475)
Interest credited to policyholder account balances 345,937 262,532 192,522
Amortization and depreciation 32,744 28,375 19,196
Net realized investment (gains) (28,538) (24,531) (280,756)
Other, net 372 (14,554) 2,488
----------- ---------- ----------
Net cash provided by operating activities 395,024 299,964 853,669
----------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from investments sold or redeemed:
Fixed maturities available-for-sale 2,070,743 1,822,169 1,482,122
Mortgage loans 594,151 182,650 206,520
Equity securities 31,602 13,427 468,143
Short-term and other invested assets 163,393 84,748 414,102
Cost of investments purchased:
Fixed maturities available-for-sale (4,463,100) (3,428,943) (3,010,016)
Fixed maturities held-to-maturity - - (3,068)
Equity securities (47,283) (39,553) (89,062)
Short-term and other invested assets (293,857) (97,426) (16,471)
Mortgage loan originations (438,959) (593,438) (431,043)
Maturity of fixed maturities held-to-maturity - - 6,365
Maturity of fixed maturities available-for-sale 281,736 225,087 75,518
Increase in policy loans, net (153,399) (210,624) (211,526)
Investments in subsidiaries (6,032) (4,807) (126,363)
----------- ---------- ----------
Net cash used in investing activities (2,261,005) (2,046,710) (1,234,779)
----------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net policyholder account and contract deposits 2,121,488 1,632,495 294,685
Issuance of debt 1,857 106,903 100,219
Repayment of debt (80,606) (19,497) (4,800)
Dividends (2,112) (1,832) (4,376)
Other, net 46,829 26,770 17,498
----------- ---------- ----------
Net cash provided by financing activities 2,087,456 1,744,839 403,226
----------- ---------- ----------
Effect of exchange rate changes (5,320) (266) 5,908
----------- ---------- ----------
Net increase (decrease) in cash and cash equivalents 216,155 (2,173) 28,024
----------- ---------- ----------
Cash and cash equivalents at beginning of year 142,724 144,897 116,873
----------- ---------- ----------
Cash and cash equivalents at end of year $ 358,879 142,724 144,897
=========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE> 125
GENERAL AMERICAN LIFE INSURANCE COMPANY AND SUBSIDIARIES
(1) BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REORGANIZATION
In September 1996, the Board of Directors of General American Life Insurance
Company (General American) adopted the Reorganization Plan (Plan) which
authorized the reorganization (Reorganization) of General American into a mutual
insurance holding company structure. The Missouri Department of Insurance held
a public hearing on the Reorganization on December 19, 1996 and approved the
Plan on January 24, 1997. The policyholders of General American approved the
Plan on January 28, 1997 and the Reorganization became effective on April 24,
1997 (effective date). General American was the first company to obtain
approval and to form a mutual insurance holding company under the Missouri
Mutual Holding Company Statute.
Pursuant to the Reorganization, General American (the Company) (i) formed
General American Mutual Holding Company (GAMHC) as a mutual insurance holding
company under the insurance laws of the State of Missouri, (ii) formed
GenAmerica Corporation (GenAmerica) as an intermediate stock holding company
under the general laws of the State of Missouri, and (iii) amended and restated
its Charter and Articles of Incorporation to authorize the issuance of capital
stock and the continuance of its existence as a stock life insurance company
under the same name. GAMHC may, among other things, elect all of the directors
of GenAmerica and approve matters submitted for shareholder approval. As of the
effective date of the Reorganization, the membership interests and the
contractual rights of the policyholders of the Company were separated - the
membership interests automatically became, by operation of law, membership
interests in GAMHC and the contractual rights remained with the Company. Each
person who becomes the owner of a designated policy or contract of insurance or
annuity issued by the Company after the effective date of the Reorganization
(subject to certain exceptions and conditions set forth in the Articles of
Incorporation of GAMHC) will become a member of GAMHC and have a membership
interest in GAMHC by operation of law so long as such policy or contract remains
in force. The membership interests in GAMHC follow, and are not severable, from
the insurance policy or annuity contract from which the membership interest in
GAMHC is derived.
The Company issued 3 million shares of its authorized shares of capital stock to
GAMHC in 1997. GAMHC then contributed all of these to GenAmerica in exchange
for 1 thousand shares of its common stock. As a result, GenAmerica directly
owns the Company, and GAMHC indirectly owns the Company, through GenAmerica. In
addition, the Company capitalized $3 million of its unassigned surplus to paid
in capital.
The consolidated financial statements include the assets, liabilities, and
results of operations of the Company and its wholly owned subsidiaries, General
American Holding Company, a non-insurance holding company; Cova Corporation, an
insurance holding company; Paragon Life Insurance Company; Security Equity Life
Insurance Company; General Life Insurance Company of America; General Life
Insurance Company, its 63.8 percent owned subsidiary, Reinsurance Group of
America, Incorporated (RGA), an insurance holding company, and its 62.7 percent
owned subsidiary, Conning Corporation.
The Company's principal lines of business, conducted through General American or
one of its subsidiaries, are: Individual Life Insurance, Annuities, Group Life
and Health Insurance, Asset Management, and Reinsurance. The Company
distributes its products and services primarily through a nationwide network of
general agencies, independent brokers, and group sales and claims offices. The
Company (including its subsidiaries) is licensed to do business in all fifty
states, twelve Canadian provinces, Puerto Rico, and the District of Columbia.
Through its subsidiaries, the Company has operations in Europe, Pacific Rim
countries, and Latin America.
INITIAL PUBLIC OFFERING
In December 1997, the Company's subsidiary, Conning Corporation (Conning)
successfully completed an Initial Public Offering (IPO) of 2.875 million shares
of its common stock. Conning received net proceeds of approximately $34.5
million from the offering. After the IPO, the Company owns 62.7 percent of the
total shares outstanding of Conning's common stock. The publicly held stock of
Conning is listed on the NASDAQ National Market System
SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements are prepared on the basis of
generally accepted accounting principles (GAAP) and include the accounts of the
Company and its majority owned subsidiaries. Less than majority-owned entities
in which the Company has at least a 20 percent interest are reported on the
equity basis. All significant intercompany accounts and transactions have been
eliminated in consolidation. The preparation of financial statements requires
the use of estimates by management which affect the amounts reflected in the
financial statements. Actual results could differ from those estimates.
Accounts that the Company deems to be sensitive to changes in estimates include
future policy benefits and policy and contract claims, deferred acquisition
costs, and investment and deferred tax valuation allowances.
In April 1993, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 40, APPLICABILITY OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
TO MUTUAL LIFE INSURANCE AND OTHER ENTERPRISES. This Interpretation requires
mutual life insurance enterprises which had traditionally issued statutory based
financial statements that had been reported to be in conformity with GAAP, to
apply all authoritative accounting pronouncements in preparing those statements,
effective for periods beginning after December 31, 1994. In January 1995, the
FASB issued Statement of Financial Accounting Standards No. 120 (SFAS 120),
ACCOUNTING AND REPORTING BY MUTUAL LIFE INSURANCE ENTERPRISES AND BY INSURANCE
ENTERPRISES FOR CERTAIN LONG DURATION PARTICIPATING CONTRACTS, and the American
Institute of Certified Public Accountants (AICPA) issued Statement of Position
95-1 (SOP 95-1), ACCOUNTING FOR CERTAIN INSURANCE ACTIVITIES OF MUTUAL LIFE
ENTERPRISES, which together define the GAAP model for mutual life insurance
enterprises. These pronouncements define the enterprises and method of
accounting for certain participating life insurance contracts of mutual and
stock life insurance companies that meet the criteria defined in SOP 95-1. SFAS
120 also deferred implementation of Interpretation No. 40 to be concurrent with
implementation of SFAS 120. SFAS 120 and SOP 95-1 are effective for financial
statements issued for fiscal years beginning after December 15, 1995. The
effect of initially applying this new accounting model has been reported
retroactively through restatement of all periods presented.
<PAGE> 126
The significant accounting policies of the Company are as follows:
RECOGNITION OF REVENUE
For traditional life policies, including participating businesses, premiums are
recognized when due, less allowances for estimated uncollectible balances. For
limited payment contracts, net premiums are recorded as revenue, and the
difference between the gross premium and the net premium is deferred and
recognized in income in a constant relationship to insurance in force over the
estimated policy life. For universal life and annuity products, contract charges
for mortality, surrender, and expense, other than front-end expense charges, are
reported as income when charged to policyholders' accounts.
Other income represents the fees generated from the Company's non-insurance
operations, primarily service and contract fees relating to asset management,
system development, and third-party administration. Amounts are recognized when
earned.
INVESTED ASSETS
FIXED MATURITY AND EQUITY SECURITIES: Investment securities are accounted for
in accordance with SFAS 115, ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES. SFAS 115 requires debt and equity securities to be
classified into categories of available-for-sale, trading securities, or held-
to-maturity depending on an entity's ability and positive intent to hold a
security to maturity. All of the Company's securities are classified as
available-for-sale. Fixed maturities available-for-sale are reported at fair
value and are so classified based on the possibility that such securities could
be sold prior to maturity if that action enables the Company to execute its
investment philosophy and appropriately match investment results to operating
and liquidity needs. Equity securities are carried at fair value.
Realized gains or losses on the sale of securities are determined on the basis
of specific identification. Unrealized gains and losses are recorded, net of
related income tax effects, in a separate component of stockholder equity.
MORTGAGE LOANS: Mortgage loans on real estate are stated at an unpaid principal
balance, net of unamortized discounts and valuation allowances for possible
impairment in value. The Company discontinues the accrual of interest on
mortgage loans which are more than 90 days delinquent. Interest received on
nonaccrual mortgage loans is generally reported as interest income.
POLICY LOANS, REAL ESTATE AND OTHER INVESTED ASSETS: Policy loans are carried at
an unpaid principal balance and are generally secured by the cash surrender
value. Investment real estate which the Company has the intent to hold for the
production of income is carried at depreciated cost, net of writedowns for other
than temporary declines in fair value and encumbrances. Properties held for
sale (primarily acquired through foreclosure) are carried at the lower of
depreciated cost (fair value at foreclosure plus capital additions less
accumulated depreciation and encumbrances) or fair value. Adjustments to
carrying value of properties held for sale are recorded in a valuation reserve
when the fair value is below depreciated cost. The accumulated depreciation and
encumbrances on real estate amounted to $47.0 million and $53.0 million at
December 31, 1997 and 1996, respectively. Direct valuation allowances amounted
to $6.7 million and $15.7 million at December 31, 1997 and 1996, respectively.
Other invested assets are principally recorded at fair value.
SHORT-TERM INVESTMENTS: Short-term investments, consisting primarily of money
market instruments and other debt issues purchased with an original maturity of
less than a year, are carried at amortized cost, which approximates fair value.
INVESTED ASSET IMPAIRMENT AND VALUATION ALLOWANCES: Invested assets are
considered impaired when the Company determines that collection of all amounts
due under the contractual terms is doubtful. The Company adjusts invested
assets to their estimated net realizable value at the point at which it
determines an impairment is other than temporary. In addition, the Company has
established valuation allowances for mortgage loans and other invested assets.
Valuation allowances for other than temporary impairments in value are netted
against the asset categories to which they apply. Additions to valuation
allowances are included in realized gains and losses.
The Company recognizes its proportionate share of the resultant gains or losses
on the issuance or repurchase of its subsidiaries' stock as a direct credit or
charge to retained earnings.
CASH AND CASH EQUIVALENTS: For purposes of reporting, cash and cash equivalents
represent cash, demand deposits and highly liquid short-term investments, which
include U.S. Treasury bills, commercial paper, and repurchase agreements with
original or remaining maturities of 90 days or less when purchased.
INVESTMENT INCOME
Bond premium and discounts are amortized into income using the scientific yield
method over the term of the security. Amortization of the premium or discount
on mortgage-backed securities is recognized using a scientific yield method
which considers the estimated timing and amount of prepayments of underlying
mortgage loans. Actual prepayment experience is periodically reviewed and
effective yields are adjusted when differences arise between the prepayments
originally anticipated and the actual prepayments received and currently
anticipated. When such differences occur, the net investment in the
mortgage-backed security is adjusted to the amount that would have existed had
the new effective yield been applied since the acquisition of the security with
a corresponding charge or credit to interest income (the "retrospective
method").
POLICY AND CONTRACT LIABILITIES
For traditional life insurance policies, future policy benefits are computed
using a net level premium method with actuarial assumptions as to mortality,
persistency, and interest established at policy issue. Assumptions established
at policy issue as to mortality and persistency are based on industry standards
and the Company's historical experience which, together with interest and
expense assumptions, provide a margin for adverse deviation. Interest rate
assumptions generally range from 2.5 percent to 11.0 percent.
For participating policies, future policy benefits are computed using a net
level premium method based on the guaranteed cash value basis for mortality and
interest. Mortality rates are similar to those used for statutory valuation
purposes. Interest rates generally range from 2.5 percent to 6.0 percent.
Dividend liabilities are established when earned.
<PAGE> 127
When the liabilities for future policy benefits plus the present value of
expected future gross premiums are insufficient to provide for expected policy
benefits and expenses, unrecoverable deferred policy acquisition costs are
written off and thereafter a premium deficiency reserve is established through a
charge to earnings.
Policyholder account balances for universal life and annuity policies are equal
to the policyholder account value before deduction of any surrender charges.
The policyholder account value represents an accumulation of gross premium
payments plus credited interest less expense and mortality charges and
withdrawals. These expense charges are recognized in income as earned.
The range of weighted average interest crediting rates used by the Company and
its life insurance subsidiaries were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Universal life 6.00-7.10% 6.00-7.56% 6.00-7.87%
Annuities 5.70-6.20% 5.70-6.20% 5.69-6.29%
</TABLE>
Accident and health benefits for active lives are calculated using the net level
premium method and assumptions as to future morbidity, withdrawals, and interest
which provide a margin for adverse deviation. Benefit liabilities for disabled
lives are calculated using the present value of future benefits and experience
assumptions for claim termination, expense, and interest which also provide a
margin for adverse deviation.
POLICY AND CONTRACT CLAIMS
The Company establishes a liability for unpaid claims based on estimates of the
ultimate cost of claims incurred, which is comprised of aggregate case basis
estimates, average claim costs for reported claims, and estimates of unreported
losses based on past experience. Policy and contract claims include a provision
for both life and accident and health claims. Management believes the
liabilities for unpaid claims are adequate to cover the ultimate liability;
however, due to the underlying risks and the high degree of uncertainty
associated with the determination of the liability for unpaid claims, the
amounts which will ultimately be paid to settle these liabilities cannot be
determined precisely and may vary from the estimated amount included in the
consolidated balance sheets.
DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business, which vary with and are primarily related
to the production of new business, have been deferred to the extent that such
costs are deemed recoverable from future profitability of the underlying
business. Such costs include commissions, premium taxes, as well as certain
other costs of policy issuance and underwriting.
For limited payment and other nonparticipating traditional life insurance
policies, the deferred policy acquisition costs are amortized with interest in
proportion to the ratio of the expected annual premium revenue to the expected
total premium revenue. Expected future premium revenue is estimated with the
same assumptions used for computing liabilities for future policy benefits for
these policies.
For participating life insurance, universal life, and annuity type contracts,
the deferred policy acquisition costs are amortized over a period of not more
than thirty years in relation to the present value of estimated gross profits
arising from interest margin, cost of insurance, policy administration, and
surrender charges.
The range of average rates of assumed interest used by the Company and its
insurance subsidiaries in estimated gross margins were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Participating life 8.17% 8.70% 7.81%
Universal life 6.25-7.79% 6.00-8.20% 6.00-7.56%
Annuities 7.00-7.84% 7.83% 8.04%
</TABLE>
The estimates of expected gross margins are evaluated regularly and are revised
if actual experience or other evidence indicates that revision is appropriate.
Upon revision, total amortization recorded to date is adjusted by a charge or
credit to current earnings. Under SFAS 115, deferred policy acquisition costs
are adjusted for the impact on estimated gross margins as if the net unrealized
gains and losses on securities had actually been realized.
REINSURANCE
In the normal course of business, the Company seeks to limit its exposure to
loss on any single insured by ceding risks to other insurance enterprises or
reinsurers under various types of contracts including coinsurance and excess
coverage. The Company's retention level per individual life ranges between $50
thousand and $2.5 million depending on the entity writing the policy.
The Company assumes and retrocedes financial reinsurance contracts which
represent low mortality risk reinsurance treaties. These contracts are reported
as deposits and are included in reinsurance recoverable/payable in the
accompanying consolidated balance sheet. The amount of revenue reported on these
contracts represents fees and the cost of insurance under the terms of the
reinsurance agreement.
Reinsurance activities are accounted for consistent with terms of the risk
transfer reinsurance contracts. Premiums ceded to other companies have been
reported as a reduction of premiums. Amounts applicable to reinsurance ceded
for future policy benefits and claim liabilities have been reported as assets
for these items and commissions and expense allowances received in connection
with reinsurance ceded have been accounted for in income as earned. Reinsurance
does not relieve the Company from its primary responsibility to meet claim
obligations. The Company evaluates the financial conditions of its reinsurers
annually.
FEDERAL INCOME TAXES
The Company and certain of its U.S. subsidiaries file a consolidated federal
income tax return. In order to consolidate, the Company must possess both 80
percent of the total voting power and 80 percent of the value of the stock of
the subsidiary. Further, even if it meets the 80 percent test, any acquired
life insurance company is not included in the consolidated return until the
acquired company has been a member of the group for five years. Prior to
satisfying the five-year requirement, the subsidiary files a separate federal
<PAGE> 128
return. RGA Barbados, a subsidiary of RGA, also files a U.S. tax return. The
Company's Canadian, Argentine, Australian, Chilean, Mexican, Spanish, and United
Kingdom subsidiaries are taxed under applicable local statutes. The Company
uses the asset and liability method to record deferred income taxes.
Accordingly, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases, using enacted tax rates, expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled.
SEPARATE ACCOUNT BUSINESS
The assets and liabilities of the separate accounts represent segregated funds
administered and invested by the Company for purposes of funding variable life
insurance and annuity contracts for the exclusive benefit of the contract
holders. The Company charges the separate accounts for cost of insurance and
administrative expense associated with a contract and charges related to early
withdrawals by contract holders. The assets and liabilities of the separate
account are carried at fair value. The Company's participation in the separate
accounts (seed money) is carried at its fair value in the separate account, and
amounted to $6.2 million and $22.3 million at December 31, 1997 and 1996,
respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates do not reflect any premium or discount that could result from offering
for sale at one time the Company's entire holdings of a particular financial
instrument. Although fair value estimates are calculated using assumptions that
management believes are appropriate, changes in assumptions could significantly
affect the estimates and such estimates should be used with care. The following
assumptions were used to estimate the fair value of each class of financial
instrument for which it was practicable to estimate fair value:
INVESTMENT SECURITIES: Fixed maturities are valued using quoted market prices,
if available. For securities not actively traded, fair values are estimated
using values obtained from independent pricing services or, in the case of
private placements, are estimated by discounting expected future cash flows
using a current market rate applicable to the yield, credit quality, and
maturity of investments. The fair values of equity securities are based on
quoted market prices.
MORTGAGE LOANS: The fair values of mortgage loans are estimated using discounted
cash flow analyses and interest rates currently being offered for similar loans
to borrowers with similar credit ratings. Loans with similar characteristics
are aggregated for purposes of the calculations.
POLICY LOANS: The fair value of policy loans approximates the carrying value.
The majority of these loans are indexed, with yield tied to a stated return.
POLICYHOLDER ACCOUNT BALANCES ON INVESTMENT TYPE CONTRACTS: Fair values for the
Company's liabilities under investment-type contracts are estimated using
discounted cash flow calculations based on interest rates currently being
offered for similar contracts with maturities consistent with those remaining
for the contracts being valued. For contracts with no defined maturity date, the
carrying value approximates fair value.
SEPARATE ACCOUNT ASSETS AND LIABILITIES: The separate account assets and
liabilities are carried at fair value as determined by the market value of the
underlying segregated investments.
SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: The carrying amount is
considered a reasonable estimate of fair value.
LONG-TERM DEBT AND NOTES PAYABLE: The fair value of long-term debt and notes
payable is estimated using discounted cash flow calculations based on interest
rates currently being offered for similar instruments.
Refer to Note 4 for additional information on fair value of financial
instruments.
RECLASSIFICATION
The Company has reclassified the presentation of certain prior period
information to conform with the 1997 presentation.
(2) SIGNIFICANT ACQUISITIONS AND DIVESTITURES
On June 1, 1995, the Company acquired Xerox Life Insurance Companies, now known
as Cova Corporation (Cova). At acquisition, Cova had total assets of
approximately $635.6 million. The purchase price of approximately $107.7
million was funded from the Company's operations.
Effective July 31, 1995, the Company entered into a merger arrangement with
Conning Corporation and Subsidiaries (Conning), an investment management firm,
whereby the Company acquired Conning and subsequently contributed Conning and
General American Investment Management Company, a wholly owned subsidiary, to
form Conning Asset Management Company (CAM). At acquisition, Conning had total
assets of approximately $16.0 million. The purchase price consisted of
approximately $12.0 million in cash (from the Company's operations) and 3.2
million shares of CAM convertible redeemable preferred stock, with fair value of
approximately $17.0 million.
These transactions were accounted for using the purchase method of accounting.
The results of operations of the acquired entities are included in the
consolidated financial statements subsequent to the respective acquisition
dates. The excess of cost over fair value of net assets acquired amounted to
approximately $56.6 million and $23.1 million for Cova and Conning,
respectively, and is being amortized over approximately 20 years.
On January 3, 1995, the Company sold its 72 percent ownership in GenCare Health
Systems, Inc. to United HealthCare Corporation. Proceeds received net of
expenses were $365.0 million and the net realized gain on sale was $170.2
million.
The Company distributed its ownership of its wholly owned subsidiary, Walnut
Street Securities, Inc. (WSS), at December 31, 1997 to GenAmerica. The net book
value of WSS, was $4.48 million at the time of distribution. The revenue and
expenses of WSS are included in the Company's consolidated statement of
operations for 1997.
<PAGE> 129
(3) INVESTMENTS
Fixed maturities and equity securities
The amortized cost and estimated fair value of fixed maturity and equity
securities at December 31, 1997 and 1996 are as follows (in thousands):
<TABLE>
<CAPTION>
1997
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
<S> <C> <C> <C> <C>
Available-for-sale:
U. S. Treasury securities $ 48,074 1,125 (27) 49,172
Government agency
obligations 378,002 84,425 (1,281) 461,146
Corporate securities 5,491,210 319,682 (45,790) 5,765,102
Mortgage-backed securities 2,544,241 45,211 (17,832) 2,571,620
Asset-backed securities 265,725 3,380 (626) 268,479
---------- ---------- ---------- ---------
Total fixed maturities
available-for-sale $8,727,252 453,823 (65,556) 9,115,519
========== ========== ========== =========
Equity securities $ 23,558 653 - 24,211
========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
1996
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
<S> <C> <C> <C> <C>
Available-for-sale:
U. S. Treasury securities $ 28,980 368 (151) 29,197
Government agency
obligations 343,945 41,324 (970) 384,299
Corporate securities 4,071,775 158,361 (39,623) 4,190,513
Mortgage-backed securities 1,949,717 18,927 (14,386) 1,954,258
Asset-backed securities 198,934 1,599 (491) 200,042
---------- ---------- ---------- ---------
Total fixed maturities
available-for-sale $6,593,351 220,579 (55,621) 6,758,309
========== ========== ========== =========
Equity securities $ 21,460 1,137 (1,692) 20,905
========== ========== ========== =========
</TABLE>
The Company manages its credit risk associated with fixed maturities by
diversifying its portfolio. At December 31, 1997 and 1996, the Company held no
corporate debt securities or foreign government debt securities of a single
issuer which had a carrying value in excess of 10 percent of stockholder equity.
The amortized cost and estimated fair value of fixed maturities at December 31,
1997, by contractual maturity, are shown below (in thousands). Expected
maturities may differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
<S> <C> <C>
Due in one year or less $ 67,409 67,921
Due after one year through five years 1,279,675 1,303,178
Due after five years through ten years 1,816,231 1,855,188
Due after ten years through twenty years 3,019,696 3,317,612
Mortgage-backed securities 2,544,241 2,571,620
------------- ---------
Total $ 8,727,252 9,115,519
============= =========
</TABLE>
<PAGE> 130
The sources of net investment income follow (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Fixed maturities $ 561,709 464,512 368,033
Mortgage loans 194,504 171,781 143,047
Real estate 34,164 39,062 37,108
Equity securities 1,317 755 622
Policy loans 148,316 133,511 127,920
Short-term investments 16,600 13,979 26,920
Other 13,943 9,705 (368)
-------- ------- -------
Investment revenue 970,553 833,305 703,282
Investment expenses (25,011) (26,422) (26,878)
-------- ------- -------
Net investment income $ 945,542 806,883 676,404
======== ======= =======
</TABLE>
Net realized gains (losses) from sales of investments consist of the following
(in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Fixed maturities:
Realized gains $ 23,969 27,928 30,139
Realized losses (16,796) (10,398) (9,000)
Equity securities:
Realized gains 1,835 6,146 306,142
Realized losses (1,457) (288) (5,259)
Other investments, net 20,987 1,143 (41,266)
------- ------- -------
Net realized investment gains $ 28,538 24,531 280,756
======= ======= =======
</TABLE>
Included in the net realized losses are permanent write-downs of approximately
$4.8 million during 1997.
A summary of the components of the net unrealized appreciation (depreciation) on
invested assets carried at fair value is as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Unrealized appreciation (depreciation):
Fixed maturities available-for-sale $ 388,267 164,957
Equity securities and short-term investments 658 605
Derivatives 888 -
Effect of unrealized appreciation (depreciation) on:
Deferred policy acquisition costs (142,187) (70,038)
Present value of future profits (2,901) 1,986
Deferred income taxes (91,779) (36,705)
Other 139 -
Minority interest, net of taxes (24,341) (10,438)
---------- ---------
Net unrealized appreciation $ 128,744 50,367
========== =========
</TABLE>
The Company and its insurance subsidiaries have securities on deposit with
various state insurance departments and regulatory authorities with an amortized
cost of approximately $ 293.5 million and $278.6 million at December 31, 1997
and 1996, respectively.
MORTGAGE LOANS
The Company originates mortgage loans on income-producing properties, such as
apartments, retail and office buildings, light warehouses, and light industrial
facilities. Loan to value ratios at the time of loan approval are 75 percent or
less. The Company minimizes risk through a thorough credit approval process and
through geographic and property type diversification.
The Company's mortgage loans were distributed as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
Carrying Percent of Carrying Percent of
Value Total Value Total
<S> <C> <C> <C> <C>
Arizona $ 156,453 7.2% $ 185,575 8.0%
California 358,443 16.5 378,376 16.4
Colorado 228,797 10.5 226,531 9.8
Florida 153,174 7.0 193,570 8.4
Georgia 131,861 6.1 141,442 6.1
Illinois 155,184 7.1 183,883 8.0
Maryland 104,567 4.8 99,944 4.3
Missouri 100,815 4.6 102,111 4.4
Texas 191,619 8.8 225,697 9.8
Virginia 84,140 3.9 92,663 4.0
Other 513,213 23.5 481,546 20.8
----------- --------- ----------- --------
Subtotal 2,178,266 100.0% 2,311,338 100.0%
Valuation reserve (38,004) (37,711)
----------- --------- ----------- --------
Total $ 2,140,262 $ 2,273,627
=========== ========= =========== ========
</TABLE>
<PAGE> 131
<TABLE>
<CAPTION>
1997 1996
Carrying Percent of Carrying Percent of
Value Total Value Total
<S> <C> <C> <C> <C>
Property Type
Apartment $ 101,038 4.6% $ 131,352 5.7%
Retail 903,438 41.5 966,298 41.8
Office building 622,185 28.6 641,204 27.7
Industrial 445,253 20.4 479,755 20.8
Other commercial 106,352 4.9 92,729 4.0
----------- --------- ----------- --------
Subtotal 2,178,266 100.0% 2,311,338 100.0%
Valuation reserve (38,004) (37,711)
----------- --------- ----------- --------
Total $ 2,140,262 $ 2,273,627
=========== ========= =========== ========
</TABLE>
An impaired loan is measured at the present value of expected future cash
flows or, alternatively, the observable market price or the fair value of the
collateral.
Mortgage loans which have been non-income producing for the preceding twelve
months were $8.7 million and $5.1 million at December 31, 1997 and 1996,
respectively. At December 31, 1997 and 1996, the recorded investment in
mortgage loans that were considered impaired under SFAS 114, ACCOUNTING BY
CREDITORS FOR IMPAIRMENT OF A LOAN, was $119.7 million and $86.5 million,
respectively, with related allowances for credit losses of $12.7 million and
$8.0 million, respectively. The average recorded investment in impaired
loans during 1997 and 1996 was $103.1 million and $107.9 million,
respectively. For the years ended December 31, 1997, 1996, and 1995, the
Company recognized $9.7 million, $6.6 million, and $11.9 million,
respectively, of interest income on those impaired loans, which included $9.9
million, $6.7 million, and $12.0 million, respectively, of interest income
recognized using the cash basis method of income recognition.
The Company has outstanding mortgage loan commitments as of December 31, 1997
totaling $284.6 million. During 1995, the Company entered into an agreement
whereby approximately $109.8 million of mortgage loans were sold by the
Company for securitization and resale by a financial institution as mortgage
pass-through certificates. In conjunction with this transaction, the Company
entered into futures positions to hedge against interest rate risk. The sale
of these mortgage loans resulted in a net loss of approximately $.4 million.
In addition, the close-out of the futures positions related to this
transaction resulted in a net loss of approximately $6.4 million.
DERIVATIVES The Company has a variety of reasons to use derivative
instruments, such as to attempt to protect the Company against possible
changes in the market value of its portfolio as a result of interest rate
changes and to manage the portfolio's effective yield, maturity, and
duration. The Company does not invest in derivatives for speculative
purposes. Upon disposition, a realized gain or loss is recognized
accordingly, except when exercising an option contract or taking delivery of
a security underlying a futures contract. In these instances, the
recognition of gain or loss is postponed until the disposal of the security
underlying the option or futures contract.
Summarized below are the specific types of derivative instruments used by the
Company.
INTEREST RATE SWAPS: The Company manages interest rate risk on certain
contracts, primarily through the utilization of interest rate swaps. Under
interest rate swaps, the Company agrees with counterparties to exchange, at
specified intervals, the payments between floating and fixed-rate interest
amounts calculated by reference to notional amounts. Net interest payments are
recognized within net investment income in the consolidated statements of
operations.
At December 31, 1997, the Company had thirty outstanding interest rate swap
agreements which expire at various dates through 2025. Under thirteen of the
agreements, the Company receives a fixed rate ranging from 5.975 percent to
7.51 percent on a notional amount of $68.6 million and pays a floating rate
based on London Interbank Offered Rate (LIBOR). Under the remaining
seventeen outstanding interest rate swap agreements, the Company receives a
floating rate based on LIBOR on a notional amount of $93 million and pays a
fixed rate ranging from 6.495 percent to 8.562 percent. The estimated fair
value of the agreements was a net loss of approximately $2.5 million which is
not recognized in the accompanying consolidated balance sheet.
At December 31, 1996, the Company had eight outstanding interest rate swap
agreements which expire at various dates through 2025. Under six of the
agreements, the Company receives a fixed rate ranging from 5.825 percent to
8.31 percent on a notional amount of $25.4 million and pays a floating rate
based on LIBOR. Under the remaining two outstanding interest rate swap
agreements, the Company receives a floating rate based on LIBOR on a notional
amount of $15 million and pays a fixed rate ranging from 6.52 percent to 6.90
percent. The estimated fair value of the agreements was a net gain of
approximately $0.3 million which is not recognized in the accompanying
consolidated balance sheet.
CURRENCY SWAPS: Under foreign currency swaps, the Company agrees with
other parties to exchange at specified intervals, the difference between two
currencies on an exchange rate basis the interest amounts calculated by
reference to an agreed notional principal amount. The Company uses this
technique for foreign denominated assets to match dollar denominated
liabilities of various fixed income products. Net interest payments are
recognized within net investment income in the consolidated statements of
operations.
At December 31, 1997 and 1996, the Company had six and two outstanding
currency swap agreements, respectively, which expire at various dates through
2026. The notional amount was $34.3 million and $13.9 million, respectively.
The estimated fair value of the agreements was a net loss of $1.3 million
and $2.3 million, respectively, which is not recognized in the accompanying
consolidated balance sheet.
FUTURES: A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The
Company generally invests in futures on U.S. Treasury Bonds, U.S. Treasury
Notes, and the S&P 500 Index and typically closes the contract prior to the
delivery date. These contracts are generally used to manage the portfolio's
effective maturity and duration.
<PAGE> 132
Futures contracts outstanding as of years ending 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
($ in thousands)
NET (SOLD)
PURCHASE NOTIONAL FAIR UNREALIZED
POSITION AMOUNT VALUE GAIN(LOSS)
<S> <C> <C> <C> <C>
December 31, 1997 (510) $51,000 60,940 ($907)
December 31, 1996 50 12,500 14,653 404
</TABLE>
OPTIONS: Currently, the Company buys both exchange-traded and
over-the-counter options based on the S&P 500 Index to support equity indexed
annuity policies. An equity indexed annuity is a product under which
contractholders receive a minimum guaranteed value and also participate in
stock market appreciation. Options are marked to market value quarterly. The
change in value is reflected in investment income to assure proper matching
of the hedge to changes in the liability. The amounts involved are not
material.
The Company is exposed to credit related risk in the event of nonperformance
by counterparties to financial instruments but does not expect any
counterparties to fail to meet their obligations. Where appropriate, master
netting agreements are arranged and collateral is obtained in the form of
rights to securities to lower the Company's exposure to credit risk. It is
the Company's policy to deal only with highly rated companies. There are not
any significant concentrations with counterparties.
(4) FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying amounts and estimated fair values
of the Company's financial instruments at December 31, 1997 and 1996. SFAS
107, DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS, defines fair
value of a financial instrument as the amount at which the instrument could
be exchanged in a current transaction between willing parties (in thousands):
<TABLE>
<CAPTION>
1997 1996
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
<S> <C> <C> <C> <C>
Assets:
Fixed maturities $ 9,115,519 9,115,519 6,758,309 6,758,309
Mortgage loans 2,140,262 2,333,895 2,273,627 2,354,072
Policy loans 2,073,152 2,073,152 1,917,861 1,917,861
Short-term investments 190,374 190,374 55,594 55,594
Other invested assets 243,921 243,921 183,612 183,628
Separate account assets 4,118,860 4,118,860 2,833,258 2,833,258
Liabilities:
Policyholder account
balances relating to
investment contracts $ 6,696,690 6,608,068 6,281,967 6,190,919
Long term debt and
notes payable 214,477 222,419 295,614 293,913
Separate account
liabilities 4,112,666 4,112,666 2,810,907 2,810,907
</TABLE>
(5) REINSURANCE
The Company is a major reinsurer to the life and health industry. The effect
of reinsurance on premiums and other considerations is as follows (in
thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Direct $ 1,120,169 1,097,340 1,069,248
Assumed 996,861 827,171 700,152
Ceded (348,861) (301,283) (271,387)
----------- --------- ---------
Net insurance premiums and other
considerations $ 1,768,169 1,623,228 1,498,013
=========== ========= =========
</TABLE>
Reinsurance assumed represents approximately $212.5 billion, $160.0 billion,
and $157.9 billion, of insurance in force at December 31, 1997, 1996, and
1995, respectively. The amount of ceded insurance in force, including
retrocession, was $50.4 billion, $53.2 billion, and $48.7 billion, for 1997,
1996, and 1995, respectively.
(6) FEDERAL INCOME TAXES
Income tax expense (benefit) attributable to income from operations consists
of the following (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Current income tax expense $ 65,778 45,902 115,769
Deferred income tax expense
(benefit) (113) 13,992 29,411
---------- ------- -------
Provision for income taxes $ 65,665 59,894 145,180
========== ======= =======
</TABLE>
<PAGE> 133
Income tax expense attributable to income from operations differed from the
amounts computed by applying the U.S. federal income tax rate of 35 percent
to pre-tax income as a result of the following (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Computed "expected" tax expense $ 64,763 57,055 135,353
Increase (decrease) in income tax
resulting from:
Surplus tax on mutual life
insurance companies 5,325 4,777 -
Foreign tax rate in excess
of U.S. tax rate 556 941 763
Tax preferred investment
income (6,583) (7,318) (5,784)
State tax net of federal benefit 830 971 292
GAAP/tax basis difference
on GenCare sale - - 15,710
Foreign tax credit (594) - -
Goodwill amortization 956 895 567
Difference in book vs. tax
basis in domestic
subsidiaries 2,166 2,230 1,547
Other, net (1,754) 343 (3,268)
---------- ------- -------
Provision for income taxes $ 65,665 59,894 145,180
========== ======= =======
</TABLE>
Total income taxes were allocated as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Provision for income taxes $ 65,665 59,894 145,180
Income tax from stockholder equity:
Unrealized holding gain
or loss on debt and
equity securities
recognized for financial
reporting purposes 55,923 (24,612) 99,871
Foreign currency translation (12,122) - -
Other (437) (1,023) -
---------- ------- -------
Total income tax $ 109,029 34,259 245,051
========== ======= =======
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities at December 31, 1997 and 1996
are presented below (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Deferred tax assets:
Reserve for future policy benefits $ 149,496 138,848
Deferred acquisition costs capitalized
for tax 110,418 95,332
Difference in basis of post retirement
benefits 6,846 13,993
Net operating loss 40,915 22,789
Other, net 132,354 106,263
---------- -------
Gross deferred tax assets 442,029 377,225
Less valuation allowance 1,150 1,299
---------- -------
Total deferred tax asset after valuation
allowance $ 438,879 375,926
========== =======
</TABLE>
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Deferred tax liabilities:
Unrealized gain on investments $ 78,420 63,204
Deferred acquisition costs capitalized
for financial reporting 282,714 246,858
Difference in the tax basis of
cash and invested assets 45,551 19,222
Other, net 121,240 89,919
---------- -------
Total deferred tax liabilities 527,925 419,203
---------- -------
Net deferred tax liability $ 89,046 43,277
========== =======
</TABLE>
<PAGE> 134
The Company has not recognized a deferred tax liability for the
undistributed earnings of its wholly owned foreign subsidiaries because the
Company currently does not expect those unremitted earnings to become taxable
to the Company in the foreseeable future. This is because the unremitted
earnings will not be repatriated in the foreseeable future, or because those
unremitted earnings that may be repatriated will not be taxable through the
application of tax planning strategies that management would utilize.
As of December 31, 1997, the Company has provided for a 100 percent valuation
allowance against the deferred tax asset related to the net operating losses
of RGA's Australian, Argentine, and UK subsidiaries and Genelco's Spanish and
Mexican subsidiaries. The Company has provided for a 50 percent valuation
allowance against the deferred tax asset related to International
Underwriting Services' net operating losses which were incurred in separate
return limitation years. Based on income projections for future years, a 50
percent valuation allowance is appropriate.
At December 31, 1997, the Company had capital loss carryforwards of $.8
million. During 1997, 1996, and 1995 the Company paid income taxes totaling
approximately $70.8 million, $20.7 million, and $121.7 million, respectively.
At December 31, 1997, the Company's subsidiaries had recognized deferred tax
assets associated with net operating loss carryforwards of approximately
$115.7 million. The net operating loss and capital losses are expected to be
utilized during the period allowed for carryforwards.
(7) DEFERRED POLICY ACQUISITION COSTS
A summary of the policy acquisition costs deferred and amortized is as
follows (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Balance at beginning of year $ 652,251 526,939 664,452
Transfer of present value of future
profits 19,279 - -
Policy acquisition costs deferred 267,008 206,790 163,218
Policy acquisition costs amortized (211,979) (182,038) (176,216)
Interest credited 40,843 38,944 37,405
Deferred policy acquisition costs relating
to change in unrealized (gain) loss on
investments available for sale (72,149) 61,616 (161,920)
---------- ------- --------
Balance at end of year $ 695,253 652,251 526,939
========== ======= ========
</TABLE>
(8) ASSOCIATE BENEFIT PLANS AND POSTRETIREMENT BENEFITS
The Company has a defined benefit plan covering substantially all associates.
The benefits are based on years of service and each associate's compensation
level. The Company's funding policy is to contribute annually the maximum
amount deductible for federal income tax purposes. Contributions provide for
benefits attributed to service to date and for those expected to be earned in
the future.
The Company also has several non-qualified, defined benefit, and defined
contribution plans for directors and management associates. The plans are
unfunded and are deductible for federal income tax purposes when the benefits
are paid.
Net periodic defined benefit plan costs consist of the following (in
thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Service cost $ 5,915 5,421 4,074
Interest 8,597 8,047 7,160
Return on plan assets (29,043) (14,207) (27,984)
Amortization and deferral 18,637 4,646 19,841
Other - 192 -
---------- --------- ---------
Pension costs $ 4,106 4,099 3,091
========== ========= =========
</TABLE>
<PAGE> 135
The following table presents the plans' funded status and amount
recognized in the Company's consolidated balance sheets at December 31, 1997
and 1996 based on the actuarial valuations as of December 31, 1997 and 1996
(in thousands):
<TABLE>
<CAPTION>
1997 1996
Qualified Other Qualified Other
Plans Plans Plans Plans
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Accumulated benefit
obligation, including vested
benefits of $79,995 and
$19,057 for 1997 and
$74,223 and $18,560
for 1996 82,758 27,965 76,928 26,897
--------- ------ --------- ------
Projected benefit obligation for
service rendered to date 97,662 32,168 92,825 29,726
Plan assets at fair value primarily
listed stocks and bonds 133,477 128,545
Plan assets in excess (less than)
projected benefit obligations 35,815 (32,168) 35,720 (29,726)
Unrecognized net transition obligation
at December 31 4,021 2,701
Pension cost funded in advance $ 35,815 35,720
========= =======
Accrued pension liability (28,147) (27,025)
======== ========
</TABLE>
Assumptions used for the December 31, 1997 and 1996 projected benefit obligation
included a 7.25 percent current discount rate, a same age-based salary scale and
4.50 percent increase rate, respectively, for future compensation levels, and a
9.25 percent projected return on plan assets.
The Board of Directors has adopted an associate incentive plan applicable to
full-time salaried associates with at least one year of service. Contributions
to the plan are determined annually by the Board of Directors and are based upon
salaries of eligible associates. Full vesting occurs after five years of
continuous service. The Company's contribution to the plan was $10.4 million,
$8.8 million, and $9.2 million for 1997, 1996, and 1995, respectively
In addition to pension benefits, the Company provides certain health care and
life insurance benefits for retired employees. Substantially all employees may
become eligible for these benefits if they reach retirement age while working
for the Company. Alternatively, retirees may elect certain prepaid health care
benefit plans.
The Company uses the accrual method to account for the costs of its retiree
benefit plans and amortizes its transition obligation for retirees and fully
eligible or vested employees over 20 years. The unamortized transition
obligation was $16.8 million and $17.8 million at December 31, 1997 and 1996,
respectively. Net postretirement benefit costs for the years ended December 31,
1997, 1996, and 1995 were $5.1 million, $5.8 million, and $5.4 million,
respectively, and include the expected cost of such benefits for newly eligible
or vested employees, interest cost, gains and losses arising from difference
between actuarial assumptions and actual experience, and amortization of the
transition obligation. The liability for the Company as of December 31, 1997 and
$27.8 million and $25.6 million, respectively.
Assumptions used were as follows:
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Discount rate in determining benefit obligations 7.25% 7.25%
Healthcare cost trend
First year:
Indemnity plan 8.0% 9.0%
HMO plan 8.0% 8.0%
Dental plan 8.0% 9.0%
Ultimate 5.00% 5.25%
</TABLE>
The health care cost trend rate assumption has a significant effect on the
amount reported. To illustrate, increasing the assumed health care cost trend
rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation as of December 31, 1997 by $4.7 million or
12.5 percent. The aggregate of the service cost and interest cost components of
net periodic postretirement benefit cost for 1997 would increase by $.6 million
or 15.5 percent.
<PAGE> 136
(9) DEBT
The Company's long-term debt and notes payable consists of the following
($ in millions):
<TABLE>
<CAPTION>
Face value
at December 31,
Description Rate Maturity 1997 1996
<S> <C> <C> <C> <C>
Long-term debt:
General American surplus note 7.625% January 2024 $107.0 $107.0
RGA senior note 7.250% April 2006 100.0 100.0
Notes payable
General American 5.555% March 1997 - 80.5
RGA Australia Hldgs. 5.460% April 1998 7.8 7.6
------ ------
Total long-term debt and notes payable $214.8 $295.1
====== ======
</TABLE>
The difference between the face value of debt and the carrying value per the
consolidated balance sheets is unamortized discount.
General American's surplus note pays interest on January 15 and July 15 of
each year. The note is not subject to redemption prior to maturity. Payment
of principal and interest on the note may be made only with the approval of
the Missouri Director of Insurance.
The RGA senior note pays interest semiannually on April 1 and October 1. The
ability of RGA to make debt principal and interest payments as well as make
dividend payments to shareholders is ultimately dependent on the earnings and
surplus of its subsidiaries and the investment earnings on the undeployed
debt proceeds. The transfer of funds from the insurance subsidiaries to
Reinsurance Group of America, Incorporated is subject to applicable insurance
laws and regulations.
The General American note payable was retired during December of 1997.
The RGA Australian note had drawdowns for the respective years of $2.0
million in January 1997, $5.6 million in January 1996, and $2.0 million in
July 1996. Principal repayments are due in April 1998 and are expected to be
renewed under the terms of the line of credit. This agreement contains
various restrictive covenants which primarily pertain to limitations on the
quality and types of investments, minimum requirements of net worth, and
minimum rating requirements.
Interest paid on debt during 1997, 1996, and 1995 amounted to $20.0 million,
$19.9 million, and $9.0 million, respectively.
As of December 31, 1997, the Company was in compliance with all covenants
under its debt agreements.
(10) REGULATORY MATTERS
The Company and its insurance subsidiaries are subject to financial statement
filing requirements in their respective state of domicile, as well as the
states in which they transact business. Such financial statements, generally
referred to as statutory financial statements, are prepared on a basis of
accounting which varies in some respects from GAAP. Statutory accounting
practices include: (1) charging of policy acquisition costs to income as
incurred; (2) establishment of a liability for future policy benefits
computed using required valuation standards; (3) nonprovision of deferred
federal income taxes resulting from temporary differences between financial
reporting and tax bases of assets and liabilities; (4) recognition of
statutory liabilities for asset impairments and yield stabilization on fixed
maturity dispositions prior to maturity with asset valuation reserves based
on a statutorily determined formulas; and (5) valuation of investments in
bonds at amortized cost.
Net income and policyholders' surplus of the Company for the years ended
December 31, 1997, 1996, and 1995, as determined in accordance with statutory
accounting practices, are as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
Net income $ 39,737 18,464 236,962
Policyholders' surplus 844,110 636,260 589,783
</TABLE>
Under Risk-Based Capital (RBC) requirements, General American and its
insurance subsidiaries are required to measure its solvency against certain
parameters. As of December 31, 1997, the Company and its insurance
subsidiaries exceeded the established RBC minimums. In addition, the Company
and its insurance subsidiaries exceeded the minimum statutory capital and
surplus requirements of their respective states of domicile.
The Company and its insurance subsidiaries are subject to limitations on the
payment of dividends. Generally, dividends during any year may not be paid
without prior regulatory approval, in excess of the lessor of (and with
respect to life and health subsidiaries in Missouri, in excess of the greater
of): (a) 10 percent of the statutory surplus as of the preceding December 31
or (b) the statutory gain from operations for the preceding year.
<PAGE> 137
(11) LEASE COMMITMENTS
The Company has entered into operating leases for office space and other
assets, principally office furniture and equipment. Future minimum lease
obligations under noncancelable leases are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
Year ended December 31:
<S> <C>
1998 $ 17,583
1999 15,510
2000 12,621
2001 8,680
2002 6,276
Thereafter 3,107
</TABLE>
Operating lease expense totaled $16.4 million, $17.0 million, and $11.6 million
in 1997, 1996, and 1995, respectively
(12) PARTICIPATING POLICIES AND DIVIDENDS TO POLICYHOLDERS
Over 27.5 percent and 31.2 percent of the Company's business in force relates
to participating policies as of December 31, 1997 and 1996, respectively.
These participating policies allow the policyholders to receive dividends
based on actual interest, mortality, and expense experience for the related
policies. These dividends are distributed to the policyholders through an
annual dividend, using current dividend scales which are approved by the
Board of Directors.
(13) CONTINGENT LIABILITIES
From time to time, the Company is subject to litigation related to its
insurance business and to employment related matters in the normal course of
business. Management does not believe that the Company is party to any such
pending litigation which would have a material adverse effect on its
financial position or future operations.
<PAGE> 138
<TABLE>
GENERAL AMERICAN SEPARATE ACCOUNT ELEVEN
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1997
<CAPTION>
No. of Shares Market Value
------------- ------------
<S> <C> <C>
S & P 500 Index Fund
General American Capital Company<F*> 522,436 $20,581,893
Money Market Fund
General American Capital Company<F*> 471,869 8,600,564
Bond Index Fund
General American Capital Company<F*> 148,761 3,450,248
Managed Equity Fund
General American Capital Company<F*> 135,951 4,241,762
Asset Allocation Fund
General American Capital Company<F*> 329,020 10,482,605
International Index Fund<F**>
General American Capital Company<F*> 474,049 7,866,879
Mid-Cap Equity Fund<F***>
General American Capital Company<F*> 282,331 6,232,329
Small-Cap Equity Fund
General American Capital Company<F*> 23,695 1,143,813
Equity-Income Fund
Variable Insurance Products Fund 700,210 17,001,106
Growth Fund
Variable Insurance Products Fund 599,398 22,237,647
Overseas Fund
Variable Insurance Products Fund 425,780 8,174,972
Asset Manager Fund
Variable Insurance Products Fund II 32,084 577,825
High Income Fund
Variable Insurance Products Fund 160,163 2,175,014
Worldwide Hard Assets Fund<F****>
Van Eck Worldwide Insurance Trust 17,172 269,764
Multi-Style Equity Fund
Russell Insurance Funds 198,618 2,538,339
Core Bond Fund
Russell Insurance Funds 110,396 1,153,638
Aggressive Equity Fund
Russell Insurance Funds 99,947 1,344,291
Non-US Fund
Russell Insurance Funds 78,061 782,951
<FN>
<F*> These funds use consent dividending. See Note 2C.
<F**> This fund was formerly known as the International Equity Fund.
<F***> This fund was formerly known as the Special Equity Fund.
<F****>This fund was formerly known as the Gold & Natural Resources Fund.
See accompanying notes to the financial statements.
</TABLE>
<PAGE> 139
LEGAL COUNSEL
Stephen E. Roth
Sutherland, Asbill & Brennan, Washington, D.C.
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
If distributed to prospective investors, this report must be preceded or
accompanied by a current prospectus.
The prospectus is incomplete without reference to the financial data
contained in the annual report.
<PAGE> 140
PART II
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities and
Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore, or hereafter duly adopted pursuant
to authority conferred in that section.
RULE 484 UNDERTAKING
Section 351.355 of the Missouri General and Business Corporation Law, in
brief, allows a corporation to indemnify any person who is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation, against expenses, including attorneys'
fees, judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation. When any person was or is a party or is
threatened to be made a party in an action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the Fact that he
is or was a director, officer, employee, or agent of the corporation,
indemnification may be paid unless such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation. In the event of such a determination indemnification is allowed
if a court determines that the person is fairly and reasonably entitled to
indemnity. A corporation has the power to give any further indemnity to any
person who is or was a director, officer, employee, or agent, provided for in
the articles of incorporation or as authorized by any by-law which has been
adopted by vote of the shareholders, provided that no such indemnity shall
indemnify any person's conduct which was finally adjudged to have been
knowingly fraudulent, deliberately dishonest, or willful misconduct.
In accordance with Missouri law, General American's Board of Directors, at
its meeting on 19 November 1987, and the policyholders of General American at
the annual meeting held on 26 January 1988, adopted the following
resolutions:
"BE IT RESOLVED THAT
II-1
<PAGE> 141
1. The company shall indemnify any person who is, or was a director,
officer, or employee of the company, or is or was serving at the
request of the company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, against any and all expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement, actually and
reasonably incurred by him or her in connection with any civil,
criminal, administrative, or investigative action, proceeding, or claim
(including an action by or in the right of the company), by reason of
the fact that he or she was serving in such capacity if he or she acted
in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the company; provided that such
person's conduct is not finally adjudged to have been knowingly
fraudulent, deliberately dishonest, or willful misconduct.
2. The indemnification provided herein shall not be deemed exclusive
of any other rights to which a director, officer, or employee may be
entitled under any agreement, vote of policyholders or disinterested
directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity which holding such
office, and shall continue as to a person who has ceased to be a
director, officer, or employee and shall inure to the benefit of the
heirs, executors and administrators of such a person."
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-2
<PAGE> 142
REPRESENTATION PURSUANT TO RULE 6e-3(T)
This filing is made pursuant to Rule 6e-3(T) under the Investment
Company Act of 1940.
REPRESENTATIONS PURSUANT TO SECTION 26(E), 1940 ACT
The fees and charges deducted under the Policies described in the Prospectus
are, in the aggregate, reasonable in relation to the services rendered, the
expenses expected, and the risks assumed by General American.
II-3
<PAGE> 143
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following Papers and Documents:
The facing sheet.
Joint and Survivor Variable Universal Life 98 Prospectus, consisting
of 59 pages.
The undertaking to file reports required by Section 15 (d), 1934 Act.
The undertaking pursuant to Rule 484, 1933 Act.
Representation pursuant to Rule 6e-3(T).
Representations pursuant to Section 26(e), 1940 Act.
The signatures.
1. The following exhibits (which correspond in number to the numbers under
paragraph A of the instructions for exhibits to Form N-8B-2):
(1) Resolution of the Board of Directors of General
American authorizing establishment of the
Separate Account<F1>
(2) Not applicable
(3) (a) Principal Underwriting Agreement<F1>
(b) Proposed form of Selling Agreement<F1>
(c) Commission Schedule<F1>
(4) Not applicable
(5) Form of Joint and Survivor Variable Universal Life 98
Policy
(a) Joint and Last Survivor, Participating
(b) Joint and Last Survivor, Non-Participating
(c) Pension Joint and Last Survivor, Participating
(d) Pension Joint and Last Survivor, Non-Participating
II-4
<PAGE> 144
(6) (a) Amended Charter and Articles of Incorporation of
General American<F2>
(b) Amended and Restated By-Laws of General American<F2>
(7) Not applicable
(8) (a) Form of Participation Agreement to Purchase Shares of
General American Capital Company
(b) Amended & Restated Participation Agreement Among Variable
Insurance Products Fund II with Fidelity Distributors
Corporation
(c) Form of Fund Participation Agreement with J.P. Morgan
Series Trust II
(d) Form of Fund Participation Agreement with VanEck
Worldwide Insurance Trust
(e) Form of Shareholder Services Agreement with American
Century Variable Portfolios
(f) Form of Participation Agreement with Russell
Insurance Funds
(9) Not applicable
(10) (a) Form of Application
(i) Application for Life Insurance Supplements, Receipts,
and Certificate
(ii) Application for Pension Insurance
2. Memorandum describing General American's issuance,
transfer, and redemption procedures for the Policies and
General American's procedure for conversion to a fixed
benefit policy.<F2>
3. The following exhibits are numbered to correspond to the numbers in the
instructions as to exhibits for Form S-6.
(1) See above
(2) Opinion of Matthew P. McCauley, Associate General
Counsel of General American<F2>
II-5
<PAGE> 145
(3) No financial statements will be omitted from the
Prospectuses pursuant to prospectus instructions 1(b)
or (c)
(4) Not applicable
4. Opinion and Consent of Susan M. Benjamin, FSA, MAAA.<F2>
5. The consent of KPMG Peat Marwick LLP, Independent
Certified Public Accountants
[FN]
- ---------------------
<F1> Incorporated by reference to the Registration Statement,
File No. 33-48550.
<F2> Incorporated by reference to the Initial Registration Statement,
File No. 333-53673 (filed 22 May 1998).
II-6
<PAGE> 146
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, General American
Life Insurance Company and General American Separate Account Eleven certify
that this Registration Statement meets all of the requirements for effectiveness
pursuant to Rule 481 under the Securities Act of 1933, and they have they duly
caused this amended Registration Statement to be signed on their behalf by the
undersigned thereunto duly authorized, and the seal of General American Life
Insurance Company to be hereunto affixed and attested, all in the City of St.
Louis, State of Missouri, on the 31st day of July 1998.
GENERAL AMERICAN SEPARATE ACCOUNT
ELEVEN (Registrant)
(Seal) BY: GENERAL AMERICAN LIFE
INSURANCE COMPANY (for Registrant
and as Depositor)
Attest: ------------------------- By: ----------------------------
Robert J. Banstetter, Sr. Richard A. Liddy
Secretary President
General American Life
Insurance Company
II-7
<PAGE> 147
Pursuant to the requirements of the Securities Act of 1933, this amended
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
- ------------------------- Chairman, President 7/31/98
Richard A. Liddy (Principal Executive
Officer)
- ------------------------- Vice President 7/31/98
John W. Barber Controller
(Principal Accounting
Officer)
- -------------------------
August A. Busch, III<F*> Director
- -------------------------
William E. Cornelius<F*> Director
- -------------------------
John C. Danforth<F*> Director
- -------------------------
Bernard A. Edison<F*> Director
- -------------------------
Richard A. Liddy Director 7/31/98
- -------------------------
William E. Maritz<F*> Director
- -------------------------
Craig D. Schnuck<F*> Director
II-8
<PAGE> 148
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
- -------------------------
William P. Stiritz<F*> Director
- -------------------------
Andrew C. Taylor<F*> Director
- -------------------------
H. Edwin Trusheim<F*> Director
- -------------------------
Robert L. Virgil, Jr.<F*> Director
- -------------------------
Virginia V. Weldon<F*> Director
- -------------------------
Ted C. Wetterau<F*> Director
By -----------------------------
Matthew P. McCauley
<FN>
<F*> An original power of attorney authorizing Matthew P. McCauley to sign
this Registration Statement and Amendments thereto on behalf of the Board
of Directors of General American Life Insurance Company is on file with the
Securities and Exchange Commission in File 33-48550.
</TABLE>
II-9
<PAGE> 149
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Source
Exhibit or Page
Number Description Number
- ------ ----------- ------
<C> <S>
1. (5) Form of Joint and Survivor Variable Universal
Life 98 Policy
(a) Joint and Last Survivor, Participating
(b) Joint and Last Survivor, Non-Participating
(c) Pension Joint and Last Survivor, Participating
(d) Pension Joint and Last Survivor, Non-
Participating
(8) (a) Form of Participation Agreement to Purchase
Shares of General American Capital Company
(b) Amended & Restated Participation Agreement Among
Variable Insurance Products Fund II with Fidelity
Distributors Corporation
(c) Form of Fund Participation Agreement with J.P.
Morgan Series Trust II
(d) Form of Fund Participation Agreement with VanEck
Worldwide Insurance Trust
(e) Form of Shareholder Services Agreement with
American Century Variable Portfolios
(f) Form of Participation Agreement with Russell
Insurance Funds
(10) (a) Form of Application
(i) Application for Life Insurance including
Supplements, Receipts, and Certificate
(ii) Application for Pension Insurance
5. The consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants
</TABLE>
<PAGE> 1
General POLICY NUMBER:
American
LIFE INSURANCE COMPANY 16,000,001
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128 INSUREDS:
John Doe
Jane Doe
JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
PARTICIPATING
Flexible Premiums are payable while this policy is in force and continue
until the younger Insured reaches Attained Age 100. If both Insureds die
while this policy is in force, we will pay the policy proceeds to the
beneficiary upon the Last Insured's death. We must receive proof of both
Insureds' deaths. The policy must also be surrendered to us after the Last
Insured's death occurs. Any payment will be subject to all of the provisions
and conditions on this and the following pages of this policy.
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE UNDER THE CONDITIONS DESCRIBED ON PAGES 4.01 AND 4.02.
THE POLICY'S CASH VALUE IN EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT
IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY
INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE THE
SEPARATE ACCOUNT PROVISION.
THE POLICY'S CASH VALUE IN THE GENERAL ACCOUNT WILL BE CREDITED WITH INTEREST
AT A MINIMUM GUARANTEED RATE AS SHOWN ON THE POLICY SPECIFICATIONS PAGE. WE
MAY CREDIT ADDITIONAL INTEREST IN EXCESS OF THE GUARANTEED RATE. SEE THE
GENERAL ACCOUNT CASH VALUE PROVISION.
RIGHT TO EXAMINE POLICY
Please read this policy. You may return this policy to us or to the agent
through whom it was purchased within 20 days from the date you receive it or
within 45 days after the application is signed, whichever period ends later.
If you return it within this period, the policy will be void from the
beginning. We will refund any premium paid.
This policy is a legal contract between the policyowner and General American.
PLEASE READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief
outline of some of the important features of your policy. This cover sheet is
not the complete insurance contract and only the actual policy provisions
will control. The policy itself sets forth, in detail, the rights and
obligations of both you and your insurance company. IT IS, THEREFORE,
IMPORTANT THAT YOU READ YOUR POLICY.
Signed for the company at its Home Office, St. Louis, Missouri 63128.
(1-800-638-9294)
/s/ Robert J. Banstetter /s/ Richard A. Liddy
V.P., GENERAL COUNSEL CHAIRMAN, PRESIDENT
AND SECRETARY AND CEO
100018 0.01
(6/98)
<PAGE> 2
<TABLE>
ALPHABETIC GUIDE TO YOUR CONTRACT
<CAPTION>
Page
<C> <S>
3.07 Addition, Deletion or Substitution
of Investments
4.04 Allocation of Net Premiums
3.04 Assignments
6.08 Basis of Computation
3.02 Beneficiary
6.06 Cash Surrender Value
6.02 Cash Values
4.02 Change in Contract Type
3.05 Change of Insured
3.04 Change of Owner or Beneficiary
3.05 Claims of Creditors
3.04 Conformity with Statutes
4.01 Death Benefit
3.01 Definitions
6.01 Dividends
6.01 Dividend Options
4.02 Face Amount Decreases
6.02 General Account Cash Value
6.03 General Account Interest Rate
4.04 Grace Period
3.05 Incontestability
7.01 Interest on Proceeds
3.01 Issue Date
6.04 Loan Account Cash Value
Page
6.01 Loans
3.05 Misstatement of Age or Sex and
Corrections
6.05 Monthly Cost of Insurance
6.06 Monthly Deduction
6.06 Monthly Policy Charge
6.04 Net Investment Factor
4.03 Net Premium
3.02 Owner
6.06 Partial Withdrawals
7.01 Payment of Policy Benefits
4.03 Payment of Premiums
4.02 Policy Changes
4.01 Policy Proceeds
6.08 Postponement of Payments
or Transfers
4.05 Reinstatement
3.04 Requests for Changes and/or
Information
6.03 Separate Account Cash Value
3.06 Separate Account Provisions
3.04 Statements in Application
3.05 Suicide Exclusion
6.06 Surrender
3.06 Transfers
</TABLE>
Additional Benefit Riders, Modifications and Amendments, if any, and a Copy
of the Application are found following the final section.
NOTICE OF ANNUAL MEETING
The annual meeting for the election of directors and the transaction of other
business for General American Mutual Holding Company is held each year at its
Home Office in St. Louis, Missouri. This meeting is at 11:00 a.m. on the
fourth Thursday in April. General American Mutual Holding Company is a mutual
company owned by its members. Each member is entitled to vote at such
elections and to participate in such meetings.
100018 0.02
(6/98)
<PAGE> 3
1. POLICY SPECIFICATIONS
GENERAL POLICY SPECIFICATIONS
POLICY NUMBER [16,000,001]
ISSUE DATE [JANUARY 1, 1998]
FACE AMOUNT [$100,000]
CONTRACT TYPE [OPTION A]
INITIAL PREMIUM PAID [$640.00]
PLANNED ANNUAL PREMIUM [$640.00]
MINIMUM INITIAL ANNUAL PREMIUM AMOUNT [$640.00]
QUALIFIED ROLLOVER PREMIUM [$ 0.00]
TARGET PREMIUM [$315.00]
TARGET PREMIUM (BASE ONLY) [$315.00]
NO LAPSE ANNUAL PREMIUM [$640.00]
NO LAPSE PREMIUM DATE [JANUARY 1, 2003]
PREMIUM TAX CHARGE [2%]
FEDERAL TAX CHARGE [1.3%]
MAXIMUM PERCENT OF PREMIUM CHARGE -
1st YEAR: UP TO TARGET PREMIUM [15%]
ABOVE TARGET PREMIUM [5%]
QUALIFIED ROLLOVER PREMIUM [0%]
YEARS 2-10 [5%]
YEARS 11+ [2%]
INSURED AGE SEX RISK CLASSIFICATION
[JOHN DOE] [35] [MALE] [STANDARD SMOKER]
[JANE DOE] [35] [FEMALE] [STANDARD SMOKER]
FORM BENEFITS - AS SPECIFIED IN POLICY
NUMBERS AND IN ANY RIDER
POLICY PLAN: JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE
100018
11210
11211
11212
11213
103016
104010
106008
00782
11210 1.01
<PAGE> 4
2. POLICY SPECIFICATIONS
GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE [4%]
GENERAL ACCOUNT MAXIMUM
ALLOCATION PERCENT [100%]
GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT [25%]
MAXIMUM MONTHLY COST OF
INSURANCE FACTOR [1.0032737]
MAXIMUM DAILY MORTALITY AND
EXPENSE RISK PERCENTAGE:
YEARS 1-10 [0.0015027%]
YEARS 11-20 [0.0012301%]
YEARS 21+ [0.0009572%]
MAXIMUM ANNUAL MORTALITY AND EXPENSE
RISK PERCENTAGE:
YEARS 1-10 [0.55%]
YEARS 11-20 [0.45%]
YEARS 21+ [0.35%]
MAXIMUM MONTHLY POLICY CHARGE:
1st YEAR [$25.00]
YEARS 2+ [$6.00]
MAXIMUM SELECTION AND ISSUE
EXPENSE CHARGE RATE:
YEARS 1-10 [$0.90]
YEARS 11+ [$0]
MINIMUM FACE AMOUNT [$50,000]
MINIMUM FACE AMOUNT DECREASE [$5,000]
MAXIMUM FEE FOR PROJECTION OF [$25.00]
BENEFITS AND VALUES
MAXIMUM TRANSFER CHARGE [$25.00]
GUARANTEED INTEREST RATE ON [4.0%]
PROCEEDS
7702 TABLE [1980 CSO MORTALITY TABLE
FOR A MALE SMOKER, AND
1980 CSO MORTALITY TABLE
FOR A FEMALE SMOKER,
AGE NEAREST BIRTHDAY]
BASIS OF COMPUTATION OF MINIMUM [1980 CSO MORTALITY TABLE
CASH VALUES FOR A MALE SMOKER, AND
1980 CSO MORTALITY TABLE
FOR A FEMALE SMOKER,
AGE NEAREST BIRTHDAY]
IF THE INITIAL PREMIUM PAID AND SUBSEQUENT PREMIUMS PROVE TO BE TOO LOW,
COVERAGE PROVIDED BY THIS POLICY MAY CEASE.
11210 1.02
<PAGE> 5
SURRENDER CHARGE SCHEDULE
INSUREDS: JOHN DOE POLICY NUMBER: 16,000,001
JANE DOE COVERAGE: JSFPVL
FACE AMOUNT: $100,000 EFFECTIVE DATE: JANUARY 1, 1998
TARGET PREMIUM (Base Only): $315.00
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM
POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE
<S> <C> <C> <C>
1-60 45.00% 91 24.17%
61 44.58% 92 23.33%
62 44.17% 93 22.50%
63 43.75% 94 21.67%
64 43.33% 95 20.83%
65 42.92% 96 20.00%
66 42.50% 97 19.17%
67 42.08% 98 18.33%
68 41.67% 99 17.50%
69 41.25% 100 16.67%
70 40.83% 101 15.83%
71 40.42% 102 15.00%
72 40.00% 103 14.17%
73 39.17% 104 13.33%
74 38.33% 105 12.50%
75 37.50% 106 11.67%
76 36.67% 107 10.83%
77 35.83% 108 10.00%
78 35.00% 109 9.17%
79 34.17% 110 8.33%
80 33.33% 111 7.50%
81 32.50% 112 6.67%
82 31.67% 113 5.83%
83 30.83% 114 5.00%
84 30.00% 115 4.17%
85 29.17% 116 3.33%
86 28.33% 117 2.50%
87 27.50% 118 1.67%
88 26.67% 119 0.83%
89 25.83% 120 0.00%
90 25.00%
</TABLE>
11211
<PAGE> 6
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
RATES ARE PER $1,000
COVERAGE: JSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 16,000,001 JANE DOE
ISSUE DATE: JANUARY 1, 1998
<TABLE>
<CAPTION>
ATTAINED AGE RATE ATTAINED AGE RATE ATTAINED AGE RATE
<S> <C> <C> <C> <C> <C>
35 0.00 57 0.28 79 5.55
36 0.00 58 0.32 80 6.19
37 0.00 59 0.37 81 6.91
38 0.00 60 0.42 82 7.72
39 0.01 61 0.49 83 8.62
40 0.01 62 0.56 84 9.66
41 0.01 63 0.66 85 10.70
42 0.02 64 0.77 86 11.85
43 0.02 65 0.90 87 12.96
44 0.03 66 1.04 88 14.20
45 0.03 67 1.19 89 15.39
46 0.04 68 1.35 90 16.71
47 0.05 69 1.53 91 18.10
48 0.06 70 1.73 92 19.60
49 0.07 71 1.97 93 21.33
50 0.08 72 2.25 94 23.45
51 0.10 73 2.58 95 26.54
52 0.12 74 2.97 96 31.38
53 0.14 75 3.42 97 39.61
54 0.17 76 3.90 98 54.66
55 0.20 77 4.42 99 83.33
56 0.24 78 4.96 100+ 0
</TABLE>
THESE RATES ARE FOR THE BASE POLICY AT ISSUE. THEY ARE BASED ON A COMBINATION OF
THE ULTIMATE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE FOR A MALE
SMOKER AND A FEMALE SMOKER.
11212
<PAGE> 7
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS
COVERAGE: JSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 16,000,001 JANE DOE
ISSUE DATE: JAN 1, 1998
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE<F*> RATE AGE<F*> RATE AGE<F*> RATE
<S> <C> <C> <C> <C> <C>
35 5.64184 57 2.45952 79 1.33835
36 5.42508 58 2.37604 80 1.31492
37 5.21686 59 2.29637 81 1.29295
38 5.01683 60 2.22033 82 1.27239
39 4.82481 61 2.14774 83 1.25326
40 4.64044 62 2.07858 84 1.23556
41 4.46354 63 2.01279 85 1.21935
42 4.29389 64 1.95040 86 1.20433
43 4.13112 65 1.89131 87 1.19047
44 3.97514 66 1.83546 88 1.17738
45 3.82557 67 1.78261 89 1.16503
46 3.68227 68 1.73259 90 1.15300
47 3.54498 69 1.68510 91 1.14119
48 3.41344 70 1.64002 92 1.12932
49 3.28747 71 1.59723 93 1.11709
50 3.16694 72 1.55674 94 1.10423
51 3.05154 73 1.51862 95 1.09045
52 2.94120 74 1.48292 96 1.07580
53 2.83570 75 1.44965 97 1.06037
54 2.73495 76 1.41875 98 1.04422
55 2.63880 77 1.39005 99 1.02648
56 2.54704 78 1.36333 100+ 1.01000
<FN>
<F*> Attained Age is the younger Insured's Attained Age even if no longer
living.
</TABLE>
11213
<PAGE> 8
<TABLE>
<CAPTION>
1. DEFINITIONS IN THIS POLICY
<C> <S>
WE, US AND OUR GENERAL AMERICAN LIFE INSURANCE COMPANY.
YOU AND YOUR THE OWNER OF THIS POLICY. THE OWNER MAY BE SOMEONE OTHER THAN THE INSUREDS.
IN THE APPLICATION THE WORDS "YOU" AND "YOUR" REFER TO THE PROPOSED INSURED
PERSON(S).
INSUREDS THE PERSONS WHOSE LIVES ARE INSURED UNDER THIS POLICY. SEE THE POLICY
SPECIFICATIONS PAGE.
LAST INSURED THE INSURED WHOSE DEATH SUCCEEDS THE DEATH OF ALL OTHER INSUREDS UNDER THIS POLICY.
ISSUE AGE THE AGE OF EACH INSURED AS OF HIS OR HER NEAREST BIRTHDAY TO THE ISSUE DATE.
ATTAINED AGE THE ISSUE AGE FOR AN INSURED PLUS THE NUMBER OF COMPLETED POLICY YEARS, WHETHER OR
NOT THE INSURED IS LIVING. THIS INCLUDES ANY PERIOD DURING WHICH THIS POLICY WAS
LAPSED.
ISSUE DATE THE EFFECTIVE DATE OF THE COVERAGE UNDER THIS POLICY WHICH IS THE ISSUE DATE SHOWN
ON THE POLICY SPECIFICATIONS PAGE. IT IS ALSO THE DATE FROM WHICH POLICY
ANNIVERSARIES, POLICY YEARS, AND POLICY MONTHS ARE MEASURED.
INVESTMENT THE DATE THE FIRST PREMIUM IS APPLIED TO THE GENERAL ACCOUNT AND/OR THE DIVISIONS
START DATE OF SEPARATE ACCOUNT ELEVEN. THIS DATE WILL BE THE LATER OF:
- THE ISSUE DATE OF THE POLICY; OR
- THE DATE WE RECEIVE THE FIRST PREMIUM AT OUR HOME OFFICE.
MONTHLY THE SAME DATE IN EACH SUCCEEDING MONTH AS THE ISSUE DATE EXCEPT THAT WHENEVER THE
ANNIVERSARY 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.
GENERAL ACCOUNT THE ASSETS HELD BY US, EXCLUDING ANY LOANS, OTHER THAN THOSE ALLOCATED TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN OR ANY OTHER SEPARATE ACCOUNT.
SEPARATE ACCOUNT SEPARATE ACCOUNT ELEVEN, A SEPARATE INVESTMENT ACCOUNT CREATED BY US TO RECEIVE AND
INVEST NET PREMIUMS RECEIVED FOR THIS POLICY OR OTHER POLICIES.
LOAN ACCOUNT THE ACCOUNT TO WHICH WE WILL TRANSFER FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN THE AMOUNT OF ANY POLICY LOAN.
LOAN SUBACCOUNT A LOAN SUBACCOUNT EXISTS FOR THE GENERAL ACCOUNT AND EACH DIVISION OF SEPARATE
ACCOUNT ELEVEN. 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.
VALUATION DATE EACH DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, WE ARE OPEN FOR
BUSINESS AND THE SEC HAS NOT RESTRICTED TRADING OR DECLARED AN EMERGENCY.
SEC THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
103016 3.01
(6/98)
<PAGE> 9
<CAPTION>
2. PERSONS WITH AN INTEREST IN THE POLICY
<C> <S>
OWNER THE OWNER OF THIS POLICY IS AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL
AGREEMENT ATTACHED TO THIS POLICY, UNLESS LATER CHANGED AS PROVIDED IN THIS POLICY.
IF THERE IS MORE THAN ONE OWNER AT A GIVEN TIME, ALL MUST EXERCISE THE RIGHTS OF
OWNERSHIP BY JOINT ACTION. OWNERSHIP MAY BE CHANGED IN ACCORDANCE WITH THE CHANGE
OF OWNER OR BENEFICIARY PROVISION.
YOU, AS OWNER, ARE ENTITLED TO EXERCISE ALL OWNERSHIP RIGHTS PROVIDED BY THIS
POLICY, WHILE IT IS IN FORCE. ANY PERSON WHOSE RIGHTS OF OWNERSHIP DEPEND UPON SOME
FUTURE EVENT WILL NOT POSSESS ANY PRESENT RIGHTS OF OWNERSHIP. IF THE OWNER IS A
TRUSTEE(S), WE MAY ACT IN RELIANCE UPON THE WRITTEN REQUEST OF ANY TRUSTEE AND WE
ARE NOT RESPONSIBLE FOR PROPER ADMINISTRATION OF THE TRUST. UNLESS OTHERWISE
PROVIDED, THE FINAL OWNER WILL BE THE ESTATE OF THE LAST OWNER TO DIE.
BENEFICIARY THE BENEFICIARY TO RECEIVE THE PROCEEDS IN THE EVENT OF THE LAST INSURED'S DEATH IS
AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL AGREEMENT ATTACHED TO THIS
POLICY, UNLESS LATER CHANGED AS PROVIDED IN THE POLICY. YOU MAY CHANGE THE
BENEFICIARY IN ACCORDANCE WITH THE CHANGE OF OWNER OR BENEFICIARY PROVISION. UNLESS
OTHERWISE STATED, THE BENEFICIARY HAS NO RIGHTS IN THIS POLICY BEFORE THE DEATH OF
THE LAST INSURED. IF THERE IS MORE THAN ONE BENEFICIARY AT THE DEATH OF THE LAST
INSURED, EACH WILL RECEIVE EQUAL PAYMENTS UNLESS OTHERWISE PROVIDED. UNLESS YOU
PROVIDE OTHERWISE, IF A BENEFICIARY DIES PRIOR TO THE LAST INSURED'S DEATH, THAT
BENEFICIARY'S SHARE WILL BE PAID TO THE LIVING BENEFICIARIES OF THAT CLASS. THE
DECEASED BENEFICIARY'S SHARE WILL BE PAID IN THE SAME PROPORTION AS THE LIVING
BENEFICIARIES' SHARES. IF THERE ARE NO BENEFICIARIES LIVING WHEN THE LAST INSURED
DIES, OR AT THE END OF ANY COMMON DISASTER PERIOD, THE PROCEEDS (COMMUTED IF
REQUIRED) WILL BE PAYABLE TO YOU, IF YOU ARE LIVING, OR TO YOUR ESTATE.
ANY PAYMENT WE MAKE WILL TERMINATE OUR LIABILITY WITH RESPECT TO SUCH PAYMENT. IF
THE INSUREDS DESIGNATE SPECIFIC AMOUNTS TO BE PAID TO SPECIFIC BENEFICIARIES AND
THE TOTAL OF THOSE AMOUNTS IS OTHER THAN THE AMOUNT OF PROCEEDS PAYABLE, THE
PROCEEDS PAYABLE WILL BE ADJUSTED AND PAID IN THE SAME PROPORTION AS THE SPECIFIC
AMOUNTS WERE TO BE PAID.
ANY TERM USED IN THE MASCULINE, FEMININE, SINGULAR OR PLURAL, WILL INCLUDE OR BE
THE OPPOSITE GENDER OR NUMBER WHERE NECESSARY.
IF ANY BENEFICIARY DESIGNATION IN THE APPLICATION INCLUDES ANY OF THE FOLLOWING
PROVISIONS, THE TERMS OF THAT PROVISION SHOWN BELOW WILL APPLY:
1. PER STIRPES. THE SHARE OF A DECEASED BENEFICIARY WILL BE PAID TO THAT
BENEFICIARY'S SURVIVING CHILDREN, EQUALLY.
2. COMMON DISASTER. WE WILL NOT MAKE PAYMENT UNTIL THE STATED NUMBER OF DAYS
AFTER THE LAST INSURED'S DEATH. IF ANY BENEFICIARY DIES DURING THIS
PERIOD, OR IF THE ORDER OF DEATH OF ANY BENEFICIARY AND THE LAST INSURED
CANNOT BE DETERMINED, WE WILL PAY AS THOUGH SUCH BENEFICIARY DIED FIRST.
3. TRUST FOR MINOR BENEFICIARY. THE ORIGINAL OR SUCCESSOR TRUSTEE FOR A MINOR
BENEFICIARY WILL SERVE WITHOUT BOND AND EXERCISE ALL RIGHTS AND RECEIVE
ALL PROCEEDS FOR THE MINOR BENEFICIARY. SUCH PROCEEDS WILL BE HELD IN A
SEPARATE TRUST AND USED AT THE TRUSTEE'S DISCRETION FOR SUCH MINOR'S
EDUCATION, SUPPORT, CARE AND GENERAL WELFARE. THE TRUST WILL TERMINATE
AT THE LEGAL AGE OF MAJORITY OR PRIOR DEATH OF THE MINOR BENEFICIARY.
ANY FUNDS THEN HELD BY THE TRUSTEE WILL BE PAID IN ONE SUM TO SUCH
BENEFICIARY OR THE BENEFICIARY'S ESTATE. THE TRUST CAN BE REVOKED BY A
CHANGE OF BENEFICIARY UNDER THE POLICY. PAYMENT TO ANY TRUSTEE WILL
DISCHARGE US TO THE EXTENT OF SUCH PAYMENT.
103016 3.02
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<PAGE> 10
4. TRUST UNDER WILL. WHEN WE RECEIVE AT OUR HOME OFFICE:
A) CERTIFIED COPIES OF THE LAST WILL AND TESTAMENT OF THE NAMED TESTATOR;
AND
B) THE ORDER ADMITTING THE WILL TO PROBATE; AND IF SUCH WILL CREATED A
TRUST CAPABLE OF RECEIVING PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THESE DOCUMENTS, SATISFACTORY PROOF IS FURNISHED
THAT:
A) THE TESTATOR DIED INTESTATE; OR
B) THE WILL CREATED NO TRUST CAPABLE OF RECEIVING PROCEEDS; OR
C) THE TESTATOR WAS NOT EITHER INSURED, BUT SURVIVED THE LAST INSURED;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE NOT REQUIRED TO CHECK INTO THE VALIDITY,
GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST. SUCH TRUSTEE
DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER THE POLICY, INCLUDING THE
RIGHT TO CHANGE THE BENEFICIARY.
5. TRUST UNDER SEPARATE WRITTEN AGREEMENT. WHEN WE RECEIVE AT OUR HOME OFFICE
A WRITTEN STATEMENT FROM THE TRUSTEE NAMED IN THE BENEFICIARY DESIGNATION
THAT:
A) THE TRUST AGREEMENT IS IN FORCE; AND
B) THE AGREEMENT PERMITS THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THE TRUSTEE'S STATEMENT, SATISFACTORY PROOF IS
FURNISHED THAT:
A) THE TRUST AGREEMENT IS NOT IN EFFECT; OR
B) THE AGREEMENT DOES NOT PERMIT THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE ENTITLED TO RELY ON ANY STATEMENTS OR
DOCUMENTS FURNISHED TO US BY THE TRUSTEE AND ARE NOT REQUIRED TO CHECK
INTO THE VALIDITY, GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST
AGREEMENT. SUCH TRUSTEE DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER
THE POLICY, INCLUDING THE RIGHT TO CHANGE THE BENEFICIARY.
6. IRREVOCABLE BENEFICIARY. YOU CANNOT CHANGE AN IRREVOCABLE BENEFICIARY
WITHOUT THE WRITTEN CONSENT OF SUCH BENEFICIARY. ALSO, YOU CANNOT
EXERCISE ANY OTHER OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH
BENEFICIARY, IF THE EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF
DIMINISHING THE RIGHTS AND INTEREST OF THE IRREVOCABLE BENEFICIARY.
7. CREDITOR BENEFICIARY. PROCEEDS PAYABLE TO ANY CREDITOR BENEFICIARY ARE
LIMITED TO ITS PROVABLE INTEREST. THE BALANCE OF ANY PROCEEDS WILL BE
PAID TO ANY OTHER NAMED BENEFICIARY. IF THERE IS NO OTHER BENEFICIARY
LIVING, WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED. YOU
CANNOT CHANGE A CREDITOR BENEFICIARY WITHOUT THE WRITTEN CONSENT OF THE
CREDITOR OR RELEASE OF ITS INTEREST. ALSO, YOU CANNOT EXERCISE ANY OTHER
OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH BENEFICIARY, IF THE
EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF DIMINISHING THE RIGHTS
AND INTEREST OF THE CREDITOR BENEFICIARY.
103016 3.03
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<PAGE> 11
CHANGE OF DURING THE LIFETIME OF EITHER INSURED YOU MAY CHANGE THE OWNERSHIP AND BENEFICIARY
OWNER OR DESIGNATIONS, SUBJECT TO ANY RESTRICTIONS AS STATED IN THE OWNER OR BENEFICIARY
BENEFICIARY PROVISIONS. YOU MUST MAKE THE CHANGE IN WRITTEN FORM SATISFACTORY TO US. IF
ACCEPTABLE TO US THE CHANGE WILL TAKE EFFECT AS OF THE TIME YOU SIGNED THE REQUEST,
WHETHER OR NOT EITHER INSURED IS LIVING WHEN WE RECEIVE YOUR REQUEST AT OUR HOME
OFFICE. THE CHANGE WILL BE SUBJECT TO ANY ASSIGNMENT OF THIS POLICY OR OTHER LEGAL
RESTRICTIONS. IT WILL ALSO BE SUBJECT TO ANY PAYMENT WE MADE OR ACTION WE TOOK
BEFORE WE RECEIVED YOUR WRITTEN NOTICE OF THE CHANGE. WE HAVE THE RIGHT TO REQUIRE
THE POLICY FOR ENDORSEMENT BEFORE WE ACCEPT THE CHANGE.
IF YOU ARE ALSO THE BENEFICIARY OF THE POLICY AT THE TIME OF THE LAST INSURED'S
DEATH, YOU MAY DESIGNATE SOME OTHER PERSON TO RECEIVE THE PROCEEDS OF THE POLICY
WITHIN 60 DAYS AFTER THE LAST INSURED'S DEATH.
ASSIGNMENTS WE WILL NOT BE BOUND BY AN ASSIGNMENT OF THE POLICY OR OF ANY INTEREST IN IT
UNLESS:
1. THE ASSIGNMENT IS MADE AS A WRITTEN INSTRUMENT,
2. YOU FILE THE ORIGINAL INSTRUMENT OR A CERTIFIED COPY WITH US AT OUR HOME
OFFICE, AND
3. WE SEND YOU AN ACKNOWLEDGED COPY.
WE ARE NOT RESPONSIBLE FOR DETERMINING THE VALIDITY OF ANY ASSIGNMENT.
IF A CLAIM IS BASED ON AN ASSIGNMENT, WE MAY REQUIRE PROOF OF INTEREST OF THE
CLAIMANT. A VALID ASSIGNMENT WILL TAKE PRECEDENCE OVER ANY CLAIM OF A BENEFICIARY.
REQUESTS FOR SUBMIT ALL REQUESTS FOR CHANGE AND/OR INFORMATION IN WRITING TO OUR HOME OFFICE -
CHANGES AND/OR GENERAL AMERICAN LIFE INSURANCE COMPANY, P.O. BOX 14490, ST. LOUIS, MO 63178.
INFORMATION
<CAPTION>
3. GENERAL PROVISIONS
<C> <S>
THE CONTRACT WE HAVE ISSUED THIS POLICY IN CONSIDERATION OF THE APPLICATION AND PAYMENT OF
PREMIUMS. THE POLICY, THE APPLICATION FOR IT, AND ANY RIDERS CONSTITUTE THE ENTIRE
CONTRACT AND ARE ATTACHED TO AND MADE A PART OF THE POLICY WHEN THE INSURANCE
APPLIED FOR IS ACCEPTED. A COPY OF ANY APPLICATION FOR REINSTATEMENT WILL BE SENT
TO YOU FOR ATTACHMENT TO THIS POLICY AND WILL BECOME PART OF THE CONTRACT OF
REINSTATEMENT AND OF THIS POLICY. THE POLICY MAY BE CHANGED BY MUTUAL AGREEMENT.
ANY CHANGE MUST BE IN WRITING AND APPROVED BY OUR PRESIDENT, VICE-PRESIDENT OR
SECRETARY. OUR AGENTS HAVE NO AUTHORITY TO ALTER OR MODIFY ANY TERMS, CONDITIONS,
OR AGREEMENTS OF THIS POLICY, OR TO WAIVE ANY OF ITS PROVISIONS.
CONFORMITY WITH IF ANY PROVISION IN THIS POLICY IS IN CONFLICT WITH THE LAWS OF THE STATE WHICH
STATUTES GOVERN THIS POLICY, THE PROVISION WILL BE DEEMED TO BE AMENDED TO CONFORM WITH SUCH
LAWS. IN ADDITION, WE RESERVE THE RIGHT TO CHANGE THIS POLICY IF WE DETERMINE THAT
A CHANGE IS NECESSARY TO CAUSE THIS POLICY TO COMPLY WITH, OR GIVE YOU THE BENEFIT
OF, ANY FEDERAL OR STATE STATUTE, RULE, OR REGULATION, INCLUDING, BUT NOT LIMITED
TO, REQUIREMENTS FOR LIFE INSURANCE CONTRACTS UNDER THE INTERNAL REVENUE CODE, OR
ITS REGULATIONS OR PUBLISHED RULINGS.
STATEMENTS IN ALL STATEMENTS MADE BY THE INSUREDS OR ON THEIR BEHALF, OR BY THE APPLICANT, WILL
APPLICATION BE DEEMED REPRESENTATIONS AND NOT WARRANTIES, EXCEPT IN THE CASE OF FRAUD. MATERIAL
MISSTATEMENTS WILL NOT BE USED TO VOID THE POLICY OR ANY RIDER, OR DENY A CLAIM
UNLESS MADE IN THE APPLICATION FOR A POLICY OR A RIDER.
103016 3.04
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<PAGE> 12
CLAIMS OF TO THE EXTENT PERMITTED BY LAW, NEITHER THE POLICY NOR ANY PAYMENT UNDER IT WILL BE
CREDITORS SUBJECT TO THE CLAIMS OF CREDITORS OR TO ANY LEGAL PROCESS.
CONVERSION RIGHTS WHILE YOUR POLICY IS IN FORCE, YOU HAVE A ONE TIME RIGHT DURING THE FIRST TWO
POLICY YEARS TO TRANSFER ALL OF YOUR CASH VALUE FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN TO THE GENERAL ACCOUNT.
IF, AT ANY TIME DURING THE FIRST TWO POLICY YEARS, YOU REQUEST IN WRITING THE
TRANSFER OF THE CASH VALUE HELD IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN TO THE
GENERAL ACCOUNT AND YOU INDICATE THAT YOU ARE MAKING THIS TRANSFER IN EXERCISE OF
YOUR CONVERSION RIGHTS, THE TRANSFER WILL NOT BE SUBJECT TO A TRANSFER CHARGE OR
TRANSFER LIMITS, IF ANY. AT THE TIME OF SUCH TRANSFER, THERE WILL NOT BE ANY EFFECT
ON THE POLICY'S DEATH BENEFIT, FACE AMOUNT, NET AMOUNT AT RISK, RATE CLASS OR ISSUE
AGE.
IF YOU EXERCISE YOUR ONE TIME CONVERSION RIGHT, WE WILL AUTOMATICALLY ALLOCATE ALL
FUTURE NET PREMIUMS TO THE GENERAL ACCOUNT.
MISSTATEMENT OF IF THERE IS A MISSTATEMENT OF AGE OR SEX FOR EITHER INSURED IN THE APPLICATIONS,
AGE OR SEX AND THE AMOUNT OF THE DEATH BENEFIT WILL BE THAT WHICH WOULD BE PURCHASED BY THE MOST
CORRECTIONS RECENT MONTHLY COST OF INSURANCE CHARGE AT THE CORRECT AGE OR SEX.
IF WE MAKE ANY PAYMENT OR POLICY CHANGES IN GOOD FAITH, RELYING ON OUR RECORDS, OR
EVIDENCE SUPPLIED TO US, OUR DUTY WILL BE FULLY DISCHARGED. WE RESERVE THE RIGHT TO
CORRECT ANY ERRORS IN THE POLICY.
INCONTESTABILITY WE CANNOT CONTEST THIS POLICY AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF
EITHER INSURED FOR TWO YEARS FROM ITS ISSUE DATE. WE CANNOT CONTEST ANY
REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL MISSTATEMENTS MADE CONCERNING
SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF EITHER
INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVE THE REINSTATEMENT. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE WE APPROVED THE REQUEST FOR REINSTATEMENT,
WE CAN NOT CONTEST ANY REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL
MISSTATEMENTS MADE CONCERNING SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING
THE LIFETIME OF THAT INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVED
THE REINSTATEMENT. THIS PROVISION WILL NOT APPLY TO ANY RIDER WHICH CONTAINS ITS
OWN INCONTESTABILITY CLAUSE.
SUICIDE EXCLUSION IF EITHER INSURED DIES BY SUICIDE, WHILE SANE OR INSANE, WITHIN TWO YEARS FROM THE
ISSUE DATE (OR WITHIN THE MAXIMUM PERIOD PERMITTED BY LAW OF THE STATE IN WHICH
THIS POLICY WAS DELIVERED, IF LESS THAN TWO YEARS), THE AMOUNT PAYABLE WILL BE
LIMITED TO THE AMOUNT OF PREMIUMS PAID, LESS ANY OUTSTANDING POLICY LOANS WITH
INTEREST TO THE DATE OF DEATH, AND LESS ANY PARTIAL WITHDRAWALS.
CHANGE OF WHILE THIS POLICY IS IN FORCE, YOU MAY CHANGE ONE OR BOTH OF THE INSUREDS. TO DO
INSURED THIS, YOU MUST MEET THE REQUIREMENTS ESTABLISHED BY US. ANY RIDER ATTACHED TO THIS
POLICY MAY BE CONTINUED ONLY WITH OUR CONSENT. WE RESERVE THE RIGHT TO CHARGE A
NOMINAL FEE FOR PROCESSING A CHANGE OF INSURED.
ANNUAL REPORT EACH YEAR A REPORT WILL BE SENT TO YOU WHICH SHOWS THE CURRENT POLICY VALUES,
PREMIUMS PAID AND DEDUCTIONS MADE SINCE THE LAST REPORT, AND ANY OUTSTANDING POLICY
LOANS.
PROJECTION OF YOU MAY MAKE A WRITTEN REQUEST TO US FOR A PROJECTION OF ILLUSTRATIVE FUTURE CASH
BENEFITS AND VALUES AND DEATH BENEFITS. IF REQUESTED MORE THAN ONCE PER POLICY YEAR, THIS
VALUES PROJECTION WILL BE FURNISHED TO YOU FOR A NOMINAL FEE. THIS FEE WILL NOT EXCEED THE
MAXIMUM FEE FOR PROJECTION OF BENEFITS AND VALUES SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
103016 3.05
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<PAGE> 13
<CAPTION>
4. SEPARATE ACCOUNT PROVISIONS
<C> <S>
SEPARATE ACCOUNT THE VARIABLE BENEFITS UNDER THIS POLICY ARE PROVIDED THROUGH INVESTMENTS IN
SEPARATE ACCOUNT ELEVEN. THIS ACCOUNT IS USED FOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES AND, IF PERMITTED BY LAW, MAY BE USED FOR OTHER POLICIES OR
CONTRACTS AS WELL.
WE HOLD THE ASSETS OF SEPARATE ACCOUNT ELEVEN. THESE ASSETS ARE HELD SEPARATELY
FROM THE ASSETS HELD IN THE GENERAL ACCOUNT. INCOME, GAINS AND LOSSES---WHETHER OR
NOT REALIZED---FROM ASSETS ALLOCATED TO SEPARATE ACCOUNT ELEVEN WILL BE CREDITED TO
OR CHARGED AGAINST THE ACCOUNT WITHOUT REGARD TO OUR OTHER INCOME, GAINS OR LOSSES.
THE PORTION OF THE ASSETS HELD BY SEPARATE ACCOUNT ELEVEN EQUAL TO THE RESERVES AND
OTHER POLICY LIABILITIES WITH RESPECT TO SEPARATE ACCOUNT ELEVEN WILL NOT BE
CHARGED WITH LIABILITIES THAT ARISE FROM ANY OTHER BUSINESS WE MAY CONDUCT. WE HAVE
THE RIGHT TO TRANSFER TO OUR GENERAL ACCOUNT ANY ASSETS OF SEPARATE ACCOUNT ELEVEN
WHICH ARE IN EXCESS OF THE RESERVES AND OTHER POLICY LIABILITIES OF SEPARATE
ACCOUNT ELEVEN.
SEPARATE ACCOUNT ELEVEN IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. SEPARATE
ACCOUNT ELEVEN IS ALSO SUBJECT TO THE LAWS OF THE STATE OF MISSOURI, WHICH REGULATE
THE OPERATIONS OF INSURANCE COMPANIES INCORPORATED IN MISSOURI. THE INVESTMENT
POLICY OF SEPARATE ACCOUNT ELEVEN WILL NOT BE CHANGED WITHOUT THE APPROVAL OF THE
INSURANCE COMMISSIONER OF THE STATE OF MISSOURI. THE APPROVAL PROCESS IS ON FILE
WITH THE INSURANCE COMMISSIONER OF THE STATE IN WHICH THIS POLICY WAS DELIVERED.
DIVISIONS SEPARATE ACCOUNT ELEVEN HAS SEVERAL DIVISIONS. EACH DIVISION INVESTS IN A
CORRESPONDING INVESTMENT PORTFOLIO FROM ONE OR MORE REGISTERED INVESTMENT
COMPANIES.
INCOME, GAINS AND LOSSES---WHETHER OR NOT REALIZED---FROM THE ASSETS OF EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN ARE CREDITED TO OR CHARGED AGAINST THAT
DIVISION WITHOUT REGARD TO INCOME, GAINS OR LOSSES IN OTHER DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR IN THE GENERAL ACCOUNT.
WE WILL VALUE THE ASSETS OF EACH DIVISION OF SEPARATE ACCOUNT ELEVEN AT THE END OF
EACH VALUATION PERIOD. A VALUATION PERIOD IS THE PERIOD BETWEEN TWO SUCCESSIVE
VALUATION DATES. A VALUATION DATE IS ANY DAY THAT BENEFITS VARY AND ON WHICH THE
NEW YORK STOCK EXCHANGE AND OUR HOME OFFICE ARE OPEN FOR BUSINESS OR ANY OTHER DAY
THAT MAY BE REQUIRED BY ANY APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND
REGULATIONS.
TRANSFERS YOU MAY TRANSFER AMOUNTS AS FOLLOWS:
- BETWEEN THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN;
OR
- AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
- THE FIRST 12 REQUESTED TRANSFERS AND/OR PARTIAL WITHDRAWALS PER POLICY
YEAR WILL BE ALLOWED FREE OF CHARGE; THEREAFTER WE MAY IMPOSE A TRANSFER
CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER CHARGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THESE TRANSFERS WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
- WE MUST RECEIVE A REQUEST FOR TRANSFER IN A FORM ACCEPTABLE TO US.
- TRANSFERS FROM OR AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE
AT LEAST $500.00 OR THE ENTIRE AMOUNT YOU HAVE IN A DIVISION, IF SMALLER.
103016 3.06
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<PAGE> 14
- TRANSFERS AND/OR PARTIAL WITHDRAWALS FROM THE GENERAL ACCOUNT TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE AT LEAST $500.00. THE
MAXIMUM AMOUNT OF ALL TRANSFERS AND PARTIAL WITHDRAWALS FROM THE GENERAL
ACCOUNT IN ANY POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT, AS SHOWN ON THE POLICY SPECIFICATIONS
PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
- THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER ANY TRANSFER IN TO THE
GENERAL ACCOUNT CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE MAY REVOKE OR MODIFY THE TRANSFER PRIVILEGE AT ANY TIME, INCLUDING THE MINIMUM
AMOUNT TRANSFERABLE, THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT, AND THE
TRANSFER CHARGE, IF ANY.
ADDITION, DELETION WE RESERVE THE RIGHT, SUBJECT TO COMPLIANCE WITH APPLICABLE LAW, TO MAKE ADDITIONS
OR SUBSTITUTION TO, DELETIONS FROM, OR SUBSTITUTIONS FOR THE SHARES OF A FUND THAT ARE HELD BY
OF INVESTMENTS SEPARATE ACCOUNT ELEVEN OR THAT SEPARATE ACCOUNT ELEVEN MAY PURCHASE. WE RESERVE
THE RIGHT TO ELIMINATE THE SHARES OF ANY OF THE FUNDS OF THIS POLICY AND TO
SUBSTITUTE SHARES OF ANOTHER FUND OF A REGISTERED INVESTMENT COMPANY, IF THE SHARES
OR FUNDS ARE NO LONGER AVAILABLE FOR INVESTMENT OR IF IN OUR JUDGEMENT, FURTHER
INVESTMENT IN ANY FUND SHOULD BECOME INAPPROPRIATE IN VIEW OF THE PURPOSE OF THE
POLICY. WE WILL NOT SUBSTITUTE ANY SHARES ATTRIBUTABLE TO THE OWNER'S INTEREST IN A
DIVISION OF SEPARATE ACCOUNT ELEVEN WITHOUT NOTICE TO THE OWNER AND COMPLIANCE WITH
THE INVESTMENT COMPANY ACT OF 1940. THIS WILL NOT PREVENT SEPARATE ACCOUNT ELEVEN
FROM PURCHASING OTHER SECURITIES FOR OTHER SERIES OR CLASSES OF POLICIES, OR FROM
PERMITTING CONVERSION BETWEEN SERIES OR CLASSES OF POLICIES OR CONTRACTS ON THE
BASIS OF REQUESTS MADE BY OWNERS.
WE RESERVE THE RIGHT TO ESTABLISH ADDITIONAL DIVISIONS OF SEPARATE ACCOUNT ELEVEN
WHICH WOULD INVEST IN SHARES OF REGISTERED INVESTMENT COMPANIES AND TO MAKE SUCH
DIVISIONS AVAILABLE TO SUCH CLASS OR SERIES OF POLICIES AS WE DEEM APPROPRIATE. WE
ALSO RESERVE THE RIGHT TO ELIMINATE OR COMBINE EXISTING DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR TO TRANSFER ASSETS BETWEEN DIVISIONS.
IF WE CONSIDER IT TO BE IN THE BEST INTEREST OF PERSONS HAVING VOTING RIGHTS UNDER
THE POLICIES, SEPARATE ACCOUNT ELEVEN MAY BE OPERATED AS A MANAGEMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940; IT MAY BE DEREGISTERED UNDER THAT ACT IN THE
EVENT REGISTRATION IS NO LONGER REQUIRED; IT MAY BE COMBINED WITH OTHER SEPARATE
ACCOUNTS; OR ITS ASSETS MAY BE TRANSFERRED TO OTHER SEPARATE ACCOUNTS.
103016 3.07
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<PAGE> 15
<CAPTION>
5. POLICY BENEFITS
<C> <S>
POLICY PROCEEDS THE POLICY PROCEEDS ARE:
1. THE DEATH BENEFIT UNDER THE CONTRACT TYPE THEN IN EFFECT; PLUS
2. ANY DIVIDEND DUE; PLUS
3. THE MONTHLY COST OF INSURANCE FOR THE PORTION OF THE POLICY MONTH FROM THE
DATE OF THE LAST INSURED'S DEATH TO THE END OF THE POLICY MONTH OF THAT
DEATH; MINUS
4. ANY PAYMENT DUE UNDER THE GRACE PERIOD PROVISION AS OF THE DATE OF THE
LAST INSURED'S DEATH; MINUS
5. ANY LOAN AND LOAN INTEREST DUE.
DEATH BENEFIT PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH BENEFIT DEPENDS UPON THE
CONTRACT TYPE IN EFFECT ON THE DATE OF THE LAST INSURED'S DEATH. THE CONTRACT TYPE
IN EFFECT IS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
OPTION A CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT PLUS THE CASH VALUE ON THE DATE OF THE LAST INSURED'S
DEATH; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE CASH VALUE ON THE DATE OF THE LAST INSURED'S DEATH MULTIPLIED BY THE
YOUNGER INSURED'S APPLICABLE ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
NOTWITHSTANDING ANYTHING IN THIS POLICY, THE DEATH BENEFIT WILL IN NO CASE BE LESS
THAN THE AMOUNT NECESSARY TO CAUSE THE POLICY TO MEET THE REQUIREMENTS FOR THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
APPLICABLE THE PERCENTAGES AS CURRENTLY DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
PERCENTAGE: CODE OF 1986 AND MODIFIED FOR AGES 95 AND ABOVE ARE AS FOLLOWS:
<CAPTION>
IN THE CASE IN WHICH THE YOUNGER THE APPLICABLE PERCENTAGE WILL
INSURED'S ATTAINED AGE AS OF THE DECREASE BY A RATABLE PORTION
BEGINNING OF THE CONTRACT YEAR IS: FOR EACH FULL YEAR:
MORE THAN: BUT NOT MORE THAN: FROM: TO:
<S> <C> <C> <C>
0 40 250 250
40 45 250 215
45 50 215 185
50 55 185 150
55 60 150 130
60 65 130 120
65 70 120 115
70 75 115 105
75 90 105 105
90 95 105 101
95 OR 101
HIGHER
104010 4.01
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<PAGE> 16
<C> <S>
CONTINUATION IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH
OF THE POLICY BENEFIT WILL BE 101% OF THE POLICY'S CASH VALUE.
BEYOND ATTAINED
AGE 100 PLEASE NOTE: THIS POLICY MAY NOT QUALIFY AS LIFE INSURANCE AFTER THE YOUNGER
INSURED'S ATTAINED AGE 100 AND MAY BE SUBJECT TO TAX CONSEQUENCES. PLEASE CONSULT A
TAX ADVISER PRIOR TO CONTINUING THE POLICY BEYOND THE YOUNGER INSURED'S ATTAINED
AGE 100. IT IS POSSIBLE THAT INSURANCE COVERAGE MAY NOT CONTINUE EVEN IF PLANNED
PREMIUMS ARE PAID IN A TIMELY MANNER.
POLICY CHANGES YOU MAY REQUEST POLICY CHANGES AT ANY TIME UNLESS WE SPECIFICALLY INDICATE
OTHERWISE. WE LIMIT THE NUMBER OF CHANGES TO ONE PER POLICY YEAR, AND WE DO NOT
PERMIT CHANGES IN THE FIRST POLICY YEAR. THE TYPES OF CHANGES ALLOWED ARE EXPLAINED
BELOW.
NO CHANGE WILL BE PERMITTED THAT WOULD RESULT IN THIS POLICY NOT SATISFYING THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
FACE AMOUNT THE FACE AMOUNT MAY BE DECREASED BY SENDING US A WRITTEN REQUEST.
DECREASES
ANY DECREASE IN FACE AMOUNT WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. THE FACE AMOUNT REMAINING IN FORCE AFTER ANY REQUESTED DECREASE MAY NOT BE
LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE.
3. ANY DECREASE MUST BE AT LEAST THE MINIMUM FACE AMOUNT DECREASE AS SHOWN ON
THE POLICY SPECIFICATIONS PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT AS EXPLAINED IN THE
SURRENDER CHARGE PROVISION.
WE WILL AMEND YOUR POLICY TO SHOW THE EFFECTIVE DATE OF THE DECREASE.
YOU MAY NOT INCREASE THE FACE AMOUNT OF THIS POLICY.
CHANGE IN IF THE CONTRACT TYPE IN EFFECT IS OPTION A OR OPTION B, YOU MAY CHANGE THE CONTRACT
CONTRACT TYPE TYPE BY SENDING US A WRITTEN REQUEST. THE EFFECTIVE DATE OF THE CHANGE WILL BE THE
MONTHLY ANNIVERSARY ON OR FOLLOWING THE DATE WE RECEIVE YOUR REQUEST. ON THE
EFFECTIVE DATE OF THIS CHANGE THE DEATH BENEFIT PAYABLE DOES NOT CHANGE, BUT THE
FACE AMOUNT MAY CHANGE.
IF THE CONTRACT TYPE IN EFFECT IS OPTION B, YOU MAY CHANGE IT TO OPTION A. THE FACE
AMOUNT WILL BE INCREASED TO EQUAL THE DEATH BENEFIT ON THE EFFECTIVE DATE OF
CHANGE. THE CONTRACT TYPE CANNOT BE CHANGED FROM OPTION B TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION A, YOU MAY CHANGE IT TO OPTION B. PROOF
THAT THE INSUREDS ARE INSURABLE BY OUR STANDARDS ON THE DATE OF THE CHANGE MUST BE
SUBMITTED. THE FACE AMOUNT WILL BE DECREASED TO EQUAL THE DEATH BENEFIT LESS THE
CASH VALUE ON THE EFFECTIVE DATE OF CHANGE. THIS CHANGE MAY NOT BE MADE IF IT WOULD
RESULT IN A FACE AMOUNT WHICH IS LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE
POLICY SPECIFICATIONS PAGE. A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE
AMOUNT AS EXPLAINED IN THE SURRENDER CHARGE PROVISION. THE CONTRACT TYPE CANNOT BE
CHANGED FROM OPTION A TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION C, THE CONTRACT TYPE CANNOT BE CHANGED.
104010 4.02
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<PAGE> 17
<CAPTION>
6. PREMIUMS AND GRACE PERIOD
<C> <S>
PAYMENT OF YOUR FIRST PREMIUM IS DUE AS OF THE ISSUE DATE. WHILE EITHER INSURED IS LIVING,
PREMIUMS PREMIUMS AFTER THE FIRST MUST BE PAID AT OUR HOME OFFICE. A PREMIUM RECEIPT WILL BE
FURNISHED UPON REQUEST. IF THIS POLICY IS IN YOUR POSSESSION AND YOU HAVE NOT PAID
THE FIRST PREMIUM, IT IS NOT IN FORCE. IT WILL BE CONSIDERED THAT YOU HAVE THE
POLICY FOR INSPECTION ONLY.
PREMIUMS MAY BE PAID IN ANY AMOUNT AND AT ANY INTERVAL SUBJECT TO THE FOLLOWING
CONDITIONS:
1. AT THE END OF THE FIRST POLICY YEAR, YOUR TOTAL PREMIUM PAYMENTS FOR THIS
POLICY MUST BE GREATER THAN OR EQUAL TO THE MINIMUM INITIAL ANNUAL PREMIUM
AMOUNT AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. ANY SUBSEQUENT PREMIUM PAYMENT MUST BE AT LEAST $10.00.
3. TOTAL PREMIUMS PAID IN ANY POLICY YEAR FOR POLICIES ISSUED WITH THE OPTION
A OR B CONTRACT TYPE MAY NOT EXCEED AN AMOUNT THAT WOULD CAUSE THE
POLICY TO FAIL THE DEFINITION OF LIFE INSURANCE AS DEFINED BY SECTION
7702 OF THE INTERNAL REVENUE CODE OF 1986, OR ANY APPLICABLE SUCCESSOR
PROVISION THERETO. THE MAXIMUM PREMIUM LIMIT FOR THE FOLLOWING POLICY
YEAR WILL BE SHOWN ON YOUR ANNUAL REPORT.
ON ANY DATE THAT WE RECEIVE A PREMIUM WHICH CAUSES THE DEATH BENEFIT UNDER ANY OF
THE CONTRACT TYPES TO INCREASE BY AN AMOUNT THAT EXCEEDS THAT PREMIUM RECEIVED, WE
RESERVE THE RIGHT TO REFUSE THAT PREMIUM PAYMENT. WE MAY REQUIRE ADDITIONAL
EVIDENCE OF INSURABILITY BEFORE WE ACCEPT THE PREMIUM.
NET PREMIUM THE NET PREMIUM IS:
1. THE PREMIUM PAID; MINUS
2. THE PREMIUM PAID MULTIPLIED BY THE PREMIUM TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
3. THE PREMIUM PAID MULTIPLIED BY THE FEDERAL TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
4. THE PREMIUM PAID MULTIPLIED BY THE APPLICABLE PERCENT OF PREMIUM CHARGE.
PREMIUM TAX A CHARGE WILL BE DEDUCTED FOR PREMIUM TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE PREMIUM TAX CHARGE DUE TO RATE CHANGES OF
THE GOVERNING JURISDICTION. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT PREMIUM
TAX RATE, IF CHANGED.
FEDERAL TAX A CHARGE WILL BE DEDUCTED FOR FEDERAL TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE FEDERAL TAX CHARGE TO REFLECT A CHANGE IN
THE FEDERAL TAX LAW. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT FEDERAL TAX
CHARGE, IF CHANGED.
PERCENT OF A CHARGE WILL BE DEDUCTED FROM EACH PREMIUM SUBMITTED. THE MAXIMUM PERCENT OF
PREMIUM CHARGE PREMIUM CHARGES ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
THE PERCENT OF PREMIUM CHARGE WILL VARY, ON A NON-DISCRIMINATORY BASIS, BASED ON
THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM PERCENT OF PREMIUM
CHARGES SHOWN ON THE POLICY SPECIFICATIONS PAGE.
104010 4.03
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<PAGE> 18
ALLOCATION OF YOU DETERMINE THE ALLOCATION OF NET PREMIUMS AMONG THE GENERAL ACCOUNT AND THE
NET PREMIUMS DIVISIONS OF SEPARATE ACCOUNT ELEVEN. FOR ANY CHOSEN ALLOCATION THE MINIMUM
PERCENTAGE THAT MAY BE ALLOCATED IS 5% OF THE NET PREMIUM. PERCENTAGES MUST BE IN
WHOLE NUMBERS. THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER PAYMENT OF THE
PREMIUM CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THE INITIAL ALLOCATION IS SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. WE
MAY MODIFY THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AT ANY TIME.
FOR ANY PREMIUM RECEIVED DURING THE "RIGHT TO EXAMINE POLICY" PERIOD, WE WILL
INITIALLY ALLOCATE THE NET PREMIUM TO THE DIVISION THAT INVESTS EXCLUSIVELY IN
SHARES OF OUR MONEY MARKET FUND UNLESS PROHIBITED BY STATE LAW. WHEN THIS PERIOD
EXPIRES, CASH VALUE IN THAT DIVISION WILL BE TRANSFERRED TO THE GENERAL ACCOUNT AND
THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE ALLOCATION PERCENTAGES
SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. FOR ANY PREMIUM RECEIVED
AFTER THE "RIGHT TO EXAMINE POLICY" PERIOD, THE NET PREMIUM WILL BE ALLOCATED
ACCORDING TO THE ALLOCATION PERCENTAGES SHOWN ON THE POLICY SPECIFICATIONS PAGE OR
YOUR MOST RECENT ALLOCATION INSTRUCTIONS RECEIVED BY US.
YOUR RIGHT YOU MAY CHANGE THE ALLOCATION OF FUTURE NET PREMIUMS AMONG THE GENERAL ACCOUNT
TO CHANGE AND/OR THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN SUBJECT TO THE CONDITIONS OUTLINED
ALLOCATION IN THE ALLOCATION OF THE NET PREMIUMS PROVISION. THE CHANGE IN ALLOCATION
PERCENTAGES WILL TAKE EFFECT IMMEDIATELY UPON OUR RECEIPT OF YOUR WRITTEN REQUEST.
NO-LAPSE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE, THE SUM OF ALL
PREMIUMS PAID ON THIS 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, THIS POLICY WILL NOT
LAPSE AS A RESULT OF A CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY
SURRENDER CHARGE BEING INSUFFICIENT TO PAY THE MONTHLY DEDUCTION. THE NO LAPSE
PREMIUM DATE AND THE NO LAPSE ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THE NO LAPSE MONTHLY PREMIUM IS ONE TWELFTH OF THE NO LAPSE ANNUAL PREMIUM.
GRACE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE:
1. THE CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE
IS INSUFFICIENT TO COVER THE MONTHLY DEDUCTION; AND
2. THE SUM OF ALL PREMIUMS PAID ON THIS POLICY, REDUCED BY ANY PARTIAL
WITHDRAWALS AND ANY OUTSTANDING LOAN BALANCE, IS LESS THAN THE SUM OF
THE NO LAPSE MONTHLY PREMIUMS FOR THE ELAPSED MONTHS SINCE THE ISSUE
DATE;
THEN THE GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR THE PAYMENT OF A PREMIUM
SUFFICIENT TO KEEP YOUR POLICY IN FORCE. THE NO LAPSE PREMIUM DATE AND THE NO LAPSE
ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
A CHANGE IN YOUR POLICY'S FACE AMOUNT, THE ADDITION OR DELETION OF A SUPPLEMENTAL
RIDER TO THIS POLICY, OR A CHANGE IN THE PREMIUM CLASS OF THE INSUREDS BEFORE THE
NO LAPSE PREMIUM DATE SHOWN ON THE POLICY SPECIFICATIONS PAGE MAY RESULT IN A
CHANGE IN THE NO LAPSE MONTHLY PREMIUM. THE NO LAPSE PREMIUM DATE WILL NOT BE
CHANGED.
IF, ON A MONTHLY ANNIVERSARY DAY ON OR AFTER THE NO LAPSE PREMIUM DATE, THE CASH
VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE IS INSUFFICIENT
TO COVER THE NEXT MONTHLY DEDUCTION, A GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR
THE PAYMENT OF A PREMIUM SUFFICIENT TO PAY THE MONTHLY DEDUCTION. (MONTHLY
DEDUCTION IS DEFINED IN THE CASH VALUES SECTION.)
104010 4.04
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<PAGE> 19
NOTICE OF THE AMOUNT OF PREMIUM REQUIRED TO BE PAID TO KEEP THIS POLICY IN FORCE
WILL BE SENT AT THE BEGINNING OF THE GRACE PERIOD TO YOUR LAST KNOWN ADDRESS AND TO
ANY ASSIGNEE ON RECORD. IF WE DO NOT RECEIVE A PREMIUM LARGE ENOUGH SO THAT THE NET
PREMIUM COVERS THE MONTHLY DEDUCTION BY THE END OF THE GRACE PERIOD, YOUR POLICY
WILL LAPSE AT THE END OF THAT 62 DAY PERIOD AND IT WILL THEN TERMINATE WITHOUT CASH
SURRENDER VALUE. IF THE LAST INSURED DIES DURING THE GRACE PERIOD, ANY PAST DUE
MONTHLY DEDUCTIONS WILL BE DEDUCTED FROM THE DEATH BENEFIT.
REINSTATEMENT YOU MAY REINSTATE YOUR LAPSED POLICY WITHIN 5 YEARS AFTER THE DATE OF LAPSE. THIS
MUST BE DONE PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100. THE POLICY CAN NOT BE
REINSTATED IF IT HAS BEEN SURRENDERED. TO REINSTATE, YOU MUST SUBMIT THE FOLLOWING
ITEMS:
1. A WRITTEN REQUEST FOR REINSTATEMENT.
2. PROOF SATISFACTORY TO US THAT BOTH INSUREDS ARE INSURABLE BY OUR
STANDARDS, IF BOTH INSUREDS WERE ALIVE ON THE DATE THE POLICY LAPSED. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, YOU MUST
SUBMIT PROOF SATISFACTORY TO US THAT THAT INSURED IS INSURABLE BY OUR
STANDARDS.
3. A NET PREMIUM PAYMENT 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.
4. A PAYMENT TO COVER ANY LOAN INTEREST DUE AND UNPAID AT THE TIME OF LAPSE.
UPON RECEIPT OF THE ABOVE PAYMENTS, WE WILL DEDUCT ANY MONTHLY DEDUCTIONS AND LOAN
INTEREST DUE AND UNPAID AT THE TIME OF LAPSE. IF BOTH INSUREDS WERE ALIVE ON THE
DATE THE POLICY LAPSED, BOTH MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR
REINSTATEMENT. IF EITHER INSURED IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO
EFFECT. IF ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, THAT INSURED
MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR REINSTATEMENT. IF THAT INSURED
IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO EFFECT.
THE REINSTATED POLICY WILL BE IN FORCE FROM THE DATE WE APPROVE THE REINSTATEMENT
APPLICATION. THERE WILL BE A FULL MONTHLY DEDUCTION FOR THE POLICY MONTH WHICH
INCLUDES THIS DATE. ANY APPLICATION FOR REINSTATEMENT BECOMES PART OF THE CONTRACT
OF REINSTATEMENT AND OF THIS POLICY.
ANY LOAN MAY BE PAID OR REINSTATED. ANY LOAN REINSTATED WILL CAUSE A CASH VALUE OF
AN EQUAL AMOUNT TO BE REINSTATED.
ANY LOAN REPAID AT THE TIME OF REINSTATEMENT WILL CAUSE AN INCREASE IN CASH VALUE
EQUAL TO THE AMOUNT OF THE REPAID LOAN.
THE SURRENDER CHARGE AT THE TIME OF REINSTATEMENT WILL BE THE SURRENDER CHARGE IN
EFFECT AT THE TIME OF LAPSE. IF ONLY A PORTION OF THE COVERAGE IS REINSTATED THEN
ONLY THE APPLICABLE PORTION OF THE SURRENDER CHARGE WILL BE REINSTATED. IF ONLY A
PORTION OF THE COVERAGE IS REINSTATED, THE CASH VALUE FOLLOWING REINSTATEMENT WILL
BE INCREASED BY THE APPLICABLE PORTION OF THE SURRENDER CHARGE IMPOSED AT THE TIME
OF LAPSE.
FOLLOWING REINSTATEMENT, THE NO-LAPSE PERIOD PROVISION WILL AGAIN BE APPLICABLE
UNTIL THE NO-LAPSE PREMIUM DATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, IF
SUFFICIENT PREMIUM IS PAID SO THAT, AS OF THE EFFECTIVE DATE OF REINSTATEMENT, THE
SUM OF ALL PREMIUMS PAID, REDUCED BY ANY PARTIAL WITHDRAWALS AND ANY LOANS, IS
GREATER THAN THE NO-LAPSE MONTHLY PREMIUMS MULTIPLIED BY THE NUMBER OF ELAPSED
MONTHS SINCE THE ISSUE DATE.
104010 4.05
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<PAGE> 20
<CAPTION>
7. DIVIDENDS
<C> <S>
ANNUAL DIVIDENDS WHILE YOUR POLICY IS IN FORCE IT MAY SHARE IN OUR DIVISIBLE SURPLUS. EACH YEAR WE
WILL DETERMINE THE SHARE OF DIVISIBLE SURPLUS, IF ANY, ACCRUING TO YOUR POLICY. WE
WILL DISTRIBUTE THIS SURPLUS AS A DIVIDEND. WE DO NOT EXPECT TO PAY ANY DIVIDENDS
ON THIS POLICY AT THIS TIME.
DIVIDEND OPTIONS YOU MAY CHOOSE ONE OF THE FOLLOWING OPTIONS. IF YOU DO NOT, WE WILL CREDIT ANY
DIVIDEND UNDER OPTION 2 UNTIL SUCH TIME AS YOU REQUEST IN WRITING A DIFFERENT
OPTION. THE OPTION YOU CHOOSE WILL REMAIN IN EFFECT UNTIL YOU CHANGE IT.
OPTION 1. CASH. PAID IN CASH.
OPTION 2. INCREASE CASH VALUE. PAID TO THE POLICY'S CASH VALUE ON THE DATE OF
ANY DIVIDEND PAYMENT. THE CASH VALUE WILL INCREASE BY EXACTLY THE
AMOUNT OF THE DIVIDEND.
THE DIVIDEND WILL BE ALLOCATED TO THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE CURRENT ALLOCATION OF THE
NET PREMIUM.
<CAPTION>
8. LOANS
<S> <C>
UPON WRITTEN REQUEST TO US, YOU MAY BORROW AN AMOUNT NOT IN EXCESS OF THE LOAN
VALUE OF YOUR POLICY WHILE IT IS IN FORCE. THE MINIMUM AMOUNT OF YOUR NET LOAN
REQUEST AT ANY ONE TIME MUST BE AT LEAST $500. YOUR POLICY WILL BE THE SOLE
SECURITY FOR SUCH LOAN. WE HAVE THE RIGHT TO REQUIRE YOUR POLICY FOR ENDORSEMENT.
THE LOAN VALUE IS THE CASH VALUE OF YOUR POLICY AT THE DATE OF THE LOAN REQUEST
PLUS INTEREST TO THE NEXT POLICY ANNIVERSARY AT THE GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, REDUCED BY:
1. ANY EXISTING LOANS; AND
2. LOAN INTEREST TO THE NEXT LOAN INTEREST DUE DATE; AND
3. EVERY MONTHLY DEDUCTION DUE TO THE NEXT LOAN INTEREST DUE DATE; AND
4. ANY SURRENDER CHARGES.
YOU MAY ALLOCATE THE POLICY LOAN AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE POLICY LOAN
WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT, AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT, ON THE DATE OF THE POLICY LOAN.
CASH VALUE EQUAL TO THE POLICY LOAN ALLOCATED TO THE GENERAL ACCOUNT AND EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN WILL BE TRANSFERRED TO THE LOAN ACCOUNT,
REDUCING THE CASH VALUE ACCORDINGLY. ANY CASH VALUE TRANSFERRED TO THE LOAN ACCOUNT
WILL BE ALLOCATED TO THE APPROPRIATE LOAN SUBACCOUNT.
LOAN INTEREST THE ACCRUED LOAN INTEREST WILL BE DUE THE EARLIEST OF:
DUE DATE
1. THE NEXT POLICY ANNIVERSARY DATE.
2. THE DATE OF TERMINATION OF THE POLICY.
3. THE DATE THE LOAN IS REPAID IN FULL.
4. THE DATE THE LOAN PLUS LOAN INTEREST ACCRUED EXCEEDS THE CASH VALUE LESS
ANY SURRENDER CHARGES.
106008 6.01
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<PAGE> 21
INTEREST WILL BE PAYABLE ANNUALLY ON EACH POLICY ANNIVERSARY. IF YOU DO NOT PAY THE
INTEREST WHEN IT IS DUE ON A POLICY ANNIVERSARY, AN AMOUNT OF CASH VALUE EQUAL TO
THE LOAN INTEREST WILL ALSO BE TRANSFERRED TO THE LOAN ACCOUNT. WE WILL CHARGE THE
SAME RATE OF INTEREST ON THIS AMOUNT AS ON THE POLICY LOAN. THE AMOUNT TRANSFERRED
WILL BE DEDUCTED FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT.
FIXED LOAN THE FIXED LOAN INTEREST RATE IS 4.5% FOR POLICY YEARS 1 THROUGH 10, 4.25% FOR
INTEREST RATES POLICY YEARS 11 THROUGH 20 AND 4.15% FOR POLICY YEARS 21 AND LATER. LOAN INTEREST
IS PAYABLE IN ARREARS.
LOAN ALL FUNDS RECEIVED WILL BE CREDITED TO YOUR POLICY AS A PREMIUM UNLESS CLEARLY
REPAYMENTS MARKED FOR LOAN REPAYMENT.
YOU MAY REPAY YOUR LOAN IN WHOLE OR IN PART AT ANY TIME BEFORE THE DEATH OF THE
LAST INSURED WHILE THE POLICY IS IN FORCE. WHEN A LOAN REPAYMENT IS MADE, CASH
VALUE SECURING THE DEBT IN THE LOAN ACCOUNT EQUAL TO THE LOAN REPAYMENT WILL BE
REPAID TO THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE
SAME PROPORTION THAT THE CASH VALUE IN THE LOAN ACCOUNT BEARS TO THE CASH VALUE IN
EACH LOAN SUBACCOUNT. UNPAID LOANS AND LOAN INTEREST WILL BE DEDUCTED FROM ANY
SETTLEMENT OF YOUR POLICY.
IF YOU FAIL TO MAKE REPAYMENTS WHEN THE TOTAL LOAN AND LOAN INTEREST DUE WOULD
EXCEED THE CASH VALUE, LESS ANY SURRENDER CHARGES, YOUR POLICY WILL TERMINATE. WE
WILL ALLOW YOU A GRACE PERIOD FOR SUCH PAYMENT OF LOANS AND LOAN INTEREST DUE. IN
SUCH EVENT THE POLICY BECOMES VOID AT THE END OF THE GRACE PERIOD. WE WILL MAIL
NOTICE TO YOUR LAST KNOWN ADDRESS, AND THAT OF ANY ASSIGNEE OF RECORD. THIS GRACE
PERIOD WILL EXPIRE 62 DAYS FROM THE MONTHLY ANNIVERSARY IMMEDIATELY BEFORE THE DATE
THE TOTAL LOAN AND LOAN INTEREST EXCEEDS THE CASH VALUE LESS ANY SURRENDER CHARGES;
OR 31 DAYS AFTER SUCH NOTICE HAS BEEN MAILED, IF LATER.
<CAPTION>
9. CASH VALUES
<C> <S>
CASH VALUE THE CASH VALUE OF YOUR POLICY IS EQUAL TO THE TOTAL OF:
- THE CASH VALUE IN THE GENERAL ACCOUNT; PLUS
- THE CASH VALUE IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN; PLUS
- THE CASH VALUE IN THE LOAN ACCOUNT.
CASH VALUE IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE CASH
AFTER ATTAINED VALUE OF YOUR POLICY WILL BE DETERMINED IN THE SAME MANNER AS DESCRIBED BELOW;
AGE 100 EXCEPT NO DEDUCTIONS WILL BE MADE FOR MONTHLY COST OF INSURANCE CHARGES. PREMIUMS
CAN NOT BE PAID AFTER THE YOUNGER INSURED ATTAINS AGE 100.
GENERAL ACCOUNT THE CASH VALUE IN THE GENERAL ACCOUNT AS OF THE INVESTMENT START DATE IS EQUAL TO:
CASH VALUE
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
GENERAL ACCOUNT; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE GENERAL ACCOUNT.
106008 6.02
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<PAGE> 22
THE CASH VALUE IN THE GENERAL ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE ON THE PRECEDING VALUATION DATE, WITH INTEREST ON SUCH
VALUE AT THE CURRENT RATE; PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE GENERAL ACCOUNT
ON THAT DAY; PLUS
- ANY AMOUNTS TRANSFERRED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY AMOUNT TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE GENERAL ACCOUNT
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM
THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED ON THAT DAY ATTRIBUTED TO THE
GENERAL ACCOUNT; MINUS
- ANY AMOUNT TRANSFERRED FROM THE GENERAL ACCOUNT TO THE LOAN ACCOUNT ON
THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, ANY WITHDRAWAL DUE TO A PRO RATA
SURRENDER PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM THE GENERAL
ACCOUNT ON THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, THE PORTION OF THE MONTHLY DEDUCTION
CHARGED TO THE GENERAL ACCOUNT, TO COVER THE POLICY MONTH WHICH STARTS ON
THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, THE PORTION OF THE DIVIDEND PAID ON
THAT DAY, IF ANY, ALLOCATED TO THE GENERAL ACCOUNT.
GENERAL ACCOUNT THE INTEREST CREDITED TO THE GENERAL ACCOUNT CASH VALUE FOR A SPECIFIC DAY WILL BE
INTEREST RATE AT AN EFFECTIVE ANNUAL RATE NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED
INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
SEPARATE ACCOUNT THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON THE INVESTMENT START
CASH VALUE DATE IS EQUAL TO:
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
DIVISION; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE DIVISION.
THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON SUBSEQUENT VALUATION
DATES IS EQUAL TO:
- THE CASH VALUE IN THE DIVISION ON THE PRECEDING VALUATION DATE MULTIPLIED
BY THAT DIVISION'S NET INVESTMENT FACTOR FOR THE CURRENT VALUATION PERIOD;
PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE DIVISION DURING
THE CURRENT VALUATION PERIOD; PLUS
- ANY AMOUNTS TRANSFERRED TO THE DIVISION FROM THE GENERAL ACCOUNT OR FROM
ANOTHER DIVISION DURING THE CURRENT VALUATION PERIOD; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION
PERIOD; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY AMOUNTS TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE DIVISION DURING
THE CURRENT VALUATION PERIOD; MINUS
106008 6.03
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<PAGE> 23
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE FROM THE
DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED DURING THE CURRENT VALUATION
PERIOD ATTRIBUTED TO THE DIVISION; MINUS
- ANY AMOUNT TRANSFERRED FROM THE DIVISION TO THE LOAN ACCOUNT DURING THAT
VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, ANY
WITHDRAWAL DUE TO A PRO RATA SURRENDER PLUS ANY WITHDRAWAL TRANSACTION
CHARGE FROM THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE MONTHLY DEDUCTION CHARGED TO THE DIVISION DURING THE
CURRENT VALUATION PERIOD TO COVER THE POLICY MONTH WHICH STARTS DURING
THAT VALUATION PERIOD; PLUS
- IF A POLICY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE DIVIDEND PAID, IF ANY, ALLOCATED TO THE DIVISION.
NET INVESTMENT THE NET INVESTMENT FACTOR MEASURES THE INVESTMENT PERFORMANCE OF A DIVISION DURING
FACTOR A VALUATION PERIOD. THE NET INVESTMENT FACTOR FOR EACH DIVISION FOR A VALUATION
PERIOD IS CALCULATED AS FOLLOWS:
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD; PLUS
- 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
- THE CAPITAL LOSSES---REALIZED OR UNREALIZED--- CHARGED AGAINST THOSE
ASSETS DURING THE VALUATION PERIOD; MINUS
- ANY AMOUNT CHARGED AGAINST EACH DIVISION FOR TAXES, INCLUDING ANY TAX OR
OTHER ECONOMIC BURDEN RESULTING FROM THE APPLICATION OF TAX LAWS THAT WE
DETERMINE TO BE PROPERLY ATTRIBUTABLE TO THE DIVISIONS OF THE SEPARATE
ACCOUNT, OR ANY AMOUNT WE SET ASIDE DURING THE VALUATION PERIOD AS A
RESERVE FOR TAXES ATTRIBUTABLE TO THE OPERATION OR MAINTENANCE OF EACH
DIVISION; MINUS
- A CHARGE NOT TO EXCEED THE DAILY INVESTMENT PERCENTAGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE FOR EACH DAY IN THE VALUATION PERIOD. THIS
CORRESPONDS TO AN ANNUAL INVESTMENT PERCENTAGE OF THE MORTALITY AND
EXPENSE RISK PERCENTAGE SHOWN ON THE POLICY SPECIFICATIONS PAGE;
DIVIDED BY
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD.
LOAN ACCOUNT THE CASH VALUE IN THE LOAN ACCOUNT AS OF THE INVESTMENT START DATE IS ZERO.
CASH VALUE
THE CASH VALUE IN THE LOAN ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE IN THE LOAN ACCOUNT ON THE PRECEDING VALUATION DATE, WITH
INTEREST; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE GENERAL ACCOUNT ON
THAT DAY; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY LOAN REPAYMENTS ON THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, AN AMOUNT DUE TO COVER THE LOAN
INTEREST, IF NOT PAID BY YOU.
106008 6.04
(6/98)
<PAGE> 24
CASH VALUE HELD IN THE LOAN ACCOUNT FOR LOAN COLLATERAL WILL EARN INTEREST DAILY AT
AN ANNUAL RATE OF NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST
RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE. INTEREST CREDITED ON THE CASH VALUE
HELD IN THE LOAN ACCOUNT WILL BE ALLOCATED AT LEAST ONCE A YEAR TO THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN EACH LOAN SUBACCOUNT BEARS TO THE CASH VALUE IN THE LOAN ACCOUNT.
MONTHLY COST THE MONTHLY COST OF INSURANCE FOR THE FOLLOWING MONTH IS DEDUCTED ON THE MONTHLY
OF INSURANCE ANNIVERSARY DATE. THE MONTHLY COST OF INSURANCE IS 1, BELOW, MULTIPLIED BY THE
DIFFERENCE BETWEEN 2 AND 3 BELOW:
1. THE MONTHLY COST OF INSURANCE RATE DIVIDED BY 1,000.
2. AN AMOUNT AS FOLLOWS:
OPTION A CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE PLUS THE CASH VALUE AT THE BEGINNING
OF THE POLICY MONTH; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
YOUNGER INSURED'S ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S DEATH
BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
3. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH, BEFORE THE DEDUCTION
OF THE MONTHLY COST OF INSURANCE.
MONTHLY COST AT THE BEGINNING OF EACH POLICY YEAR, THE MONTHLY COST OF INSURANCE RATE IS
OF INSURANCE DETERMINED. THE MONTHLY COST OF INSURANCE RATE IS BASED ON THE ATTAINED AGES, RISK
RATES CLASSIFICATIONS, SEXES AND COMPLETED POLICY YEARS FROM THE ISSUE DATE.
THE MONTHLY COST OF INSURANCE RATES WILL NEVER EXCEED THE RATES SHOWN ON THE TABLE
OF GUARANTEED MONTHLY COST OF INSURANCE RATES PAGE. ANY CHANGE IN THE COST OF
INSURANCE RATES WILL APPLY TO ALL PERSONS OF THE SAME AGE, SEX, AND CLASSIFICATION
WHOSE FACE AMOUNTS HAVE BEEN IN FORCE FOR THE SAME LENGTH OF TIME.
SELECTION AND THE SELECTION AND ISSUE EXPENSE CHARGE IS A MONTHLY CHARGE FOR THE FIRST 10 POLICY
ISSUE EXPENSE YEARS. THIS CHARGE EQUALS THE FACE AMOUNT TIMES A SELECTION AND ISSUE EXPENSE
CHARGE CHARGE RATE, DIVIDED BY 1,000. THE SELECTION AND ISSUE EXPENSE CHARGE IS BASED ON
THE INSUREDS' ISSUE AGES, SEXES AND RISK CLASSIFICATIONS ON THE ISSUE DATE. THE
SELECTION AND ISSUE EXPENSE CHARGE RATE WILL NEVER EXCEED THE MAXIMUM SELECTION AND
ISSUE EXPENSE CHARGE RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
106008 6.05
(6/98)
<PAGE> 25
MONTHLY POLICY A POLICY CHARGE WILL BE DEDUCTED EACH POLICY MONTH FROM THE CASH VALUE. THE AMOUNT
CHARGE OF THE MONTHLY POLICY CHARGE WILL NEVER EXCEED THE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
MONTHLY THE MONTHLY DEDUCTION IS:
DEDUCTION
1. THE MONTHLY COST OF INSURANCE; PLUS
2. THE SELECTION AND ISSUE EXPENSE CHARGE MULTIPLIED BY THE FACE AMOUNT
DIVIDED BY 1,000; PLUS
3. THE MONTHLY POLICY CHARGE; PLUS
4. THE MONTHLY COST, IF ANY, FOR ANY RIDER INCLUDED WITH THIS POLICY.
THE MONTHLY DEDUCTION FOR A POLICY MONTH WILL BE ALLOCATED AMONG THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO
THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN LOAN ACCOUNT ON THE
MONTHLY ANNIVERSARY.
CASH SURRENDER THE CASH SURRENDER VALUE OF THIS POLICY IS:
VALUE
1. THE CASH VALUE AT THE TIME OF SURRENDER; MINUS
2. ANY LOAN AND LOAN INTEREST ACCRUED; MINUS
3. ANY UNPAID SELECTION AND ISSUE EXPENSE CHARGE DUE FOR THE REMAINDER OF THE
FIRST POLICY YEAR; MINUS
4. ANY UNPAID MONTHLY POLICY CHARGE DUE FOR THE REMAINDER OF THE FIRST POLICY
YEAR; MINUS
5. ANY SURRENDER CHARGE.
SURRENDER YOU MAY SURRENDER YOUR POLICY FOR ITS CASH SURRENDER VALUE AT ANY TIME DURING THE
LIFETIME OF EITHER INSURED. WE WILL DETERMINE THE CASH SURRENDER VALUE AS OF THE
DATE WE RECEIVE YOUR WRITTEN REQUEST AT OUR HOME OFFICE. THE CASH SURRENDER VALUE
WILL NOT BE REDUCED BY ANY MONTHLY DEDUCTION DUE ON THAT DATE FOR A SUBSEQUENT
POLICY MONTH.
PARTIAL AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PARTIAL
WITHDRAWALS WITHDRAWAL OF CASH SUBJECT TO THE CONDITIONS LISTED BELOW. THE FIRST 12 REQUESTED
PARTIAL WITHDRAWALS OR TRANSFERS PER POLICY YEAR WILL BE ALLOWED FREE OF CHARGE;
THEREAFTER WE MAY IMPOSE A TRANSFER CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER
CHARGE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
NO PARTIAL WITHDRAWAL WILL BE PROCESSED WHICH WILL RESULT IN THE FACE AMOUNT,
EXCLUDING RIDERS, BEING DECREASED BELOW THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE RESERVE THE RIGHT TO CHANGE THE MINIMUM AMOUNT OR THE NUMBER OF TIMES YOU MAY
MAKE A PARTIAL WITHDRAWAL. WE ALSO MAY ASSESS A TRANSACTION CHARGE FOR A
WITHDRAWAL.
IF THE CONTRACT TYPE IS OPTION A OR OPTION C 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. THIS SURRENDER
CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE PARTIAL WITHDRAWAL WAS ALLOCATED
AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF THE
DEATH BENEFIT EQUALS A PERCENTAGE OF THE CASH VALUE THEN A PARTIAL WITHDRAWAL WILL
DECREASE THE FACE AMOUNT BY ANY AMOUNT BY WHICH THE PARTIAL WITHDRAWAL PLUS THE
APPLICABLE SURRENDER CHARGE EXCEEDS THE DIFFERENCE BETWEEN THE DEATH BENEFIT AND
THE FACE AMOUNT.
106008 6.06
(6/98)
<PAGE> 26
GENERAL ACCOUNT THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST BE AT
PARTIAL LEAST $500 OF YOUR ACCOUNT.
WITHDRAWALS
- THE MAXIMUM AMOUNT OF ALL PARTIAL WITHDRAWALS AND TRANSFERS FROM THE
GENERAL ACCOUNT IN A POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE WITHDRAWAL PERCENTAGE LIMIT, AS
SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
SEPARATE ACCOUNT - THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST
PARTIAL BE THE LESSER OF $500 OF A DIVISION OR YOUR ENTIRE BALANCE IN THAT
WITHDRAWALS DIVISION.
- THE MAXIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL FROM ANY ONE OF THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN A POLICY YEAR WILL BE THE CASH
SURRENDER VALUE OF THAT DIVISION.
ALLOCATION YOU MAY ALLOCATE THE PARTIAL WITHDRAWAL PLUS ANY APPLICABLE SURRENDER CHARGE,
OF PARTIAL SUBJECT TO THE ABOVE CONDITIONS, AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
WITHDRAWALS SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE PARTIAL
WITHDRAWAL WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL
ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE
POLICY, MINUS THE CASH VALUE IN THE LOAN ACCOUNT ON THE DATE OF THE PARTIAL
WITHDRAWAL. IF THE GENERAL ACCOUNT CONDITIONS WILL NOT ALLOW THIS PROPORTIONATE
ALLOCATION, WE WILL REQUEST THAT YOU SPECIFY AN ACCEPTABLE ALLOCATION.
PRO RATA AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PRO RATA
SURRENDER SURRENDER OF YOUR POLICY. THE PRO RATA SURRENDER CAN BE ANY WHOLE NUMBER PERCENTAGE
OF YOUR POLICY. THE PRO RATA SURRENDER WILL REDUCE THE FACE AMOUNT AND THE CASH
VALUE BY THE PERCENTAGE CHOSEN. THE FACE AMOUNT DECREASE WILL BE SUBJECT TO THE
FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. YOU MAY ALLOCATE THE DECREASE IN CASH VALUE DUE TO THE PRO RATA SURRENDER
PLUS ANY APPLICABLE SURRENDER CHARGE AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE
ALLOCATION, THEN THE DECREASE IN CASH VALUE PLUS ANY APPLICABLE
SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE
CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION
BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN THE
LOAN ACCOUNT ON THE DATE OF THE PRO RATA SURRENDER.
A PRO RATA SURRENDER CAN NOT BE PROCESSED IF IT WILL REDUCE THE FACE AMOUNT BELOW
THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE. 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 YOU FOR THE AMOUNT
OF CASH VALUE REDUCTION LESS ANY APPLICABLE SURRENDER CHARGES.
SURRENDER CHARGE A SURRENDER CHARGE WILL APPLY UPON SURRENDER, UPON LAPSE, UPON A PARTIAL WITHDRAWAL
THAT REDUCES THE FACE AMOUNT, OR UPON A DECREASE IN FACE AMOUNT FOR UP TO 10 YEARS
FROM THE POLICY'S ISSUE DATE.
THE SURRENDER CHARGE IS THE TARGET ANNUAL PREMIUM (BASE ONLY), SHOWN ON THE POLICY
SPECIFICATIONS PAGE, MULTIPLIED BY THE APPLICABLE SURRENDER CHARGE PERCENTAGE. THE
SURRENDER CHARGE PERCENTAGE WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
106008 6.07
(6/98)
<PAGE> 27
THE SURRENDER CHARGES FOR THIS POLICY WILL VARY ON A NON-DISCRIMINATORY BASIS, BASED
ON THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT. A DECREASE IN FACE
AMOUNT MAY DECREASE SOME OR ALL OF THE INITIAL FACE AMOUNT AS PROVIDED IN SECTION
5. A PARTIAL WITHDRAWAL MAY CAUSE A DECREASE IN FACE AMOUNT AS PROVIDED ABOVE AND,
THEREFORE, A SURRENDER CHARGE MAY BE TAKEN. IF THE FACE AMOUNT IS DECREASED BY SOME
FRACTION OF THE TOTAL FACE AMOUNT, THE SURRENDER CHARGE DEDUCTED WILL BE THE
PREVIOUSLY DEFINED SURRENDER CHARGE MULTIPLIED BY THE FRACTION.
THE SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE
GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE
OF THE POLICY MINUS THE CASH VALUE IN THE LOAN ACCOUNT.
POSTPONEMENT WE WILL USUALLY PAY ANY AMOUNTS PAYABLE ON SURRENDER, PARTIAL WITHDRAWAL, OR POLICY
OF PAYMENTS LOAN ALLOCATED TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN WITHIN SEVEN DAYS AFTER
OR TRANSFERS WRITTEN NOTICE IS RECEIVED. WE WILL USUALLY PAY ANY DEATH BENEFIT PROCEEDS UPON THE
LAST INSURED'S DEATH WITHIN SEVEN DAYS AFTER WE RECEIVE DUE PROOF OF CLAIM. PAYMENT
OF ANY AMOUNT PAYABLE, FROM THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN, ON SURRENDER,
PARTIAL WITHDRAWAL, POLICY LOAN OR DEATH MAY BE POSTPONED WHENEVER:
1. THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN CUSTOMARY WEEKEND AND
HOLIDAY CLOSING) 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 POLICY
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 NET ASSETS OF
SEPARATE ACCOUNT ELEVEN.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY AMOUNT PAYABLE FROM THE GENERAL ACCOUNT
ON SURRENDER, OR PARTIAL WITHDRAWAL FOR NOT MORE THAN SIX MONTHS. IF WE DEFER
PAYMENT FOR 30 DAYS OR MORE, WE WILL PAY INTEREST AT THE RATE OF 2 1/2% PER YEAR
FOR THE PERIOD OF DEFERMENT.
TRANSFERS MAY ALSO BE POSTPONED UNDER THE CIRCUMSTANCES LISTED ABOVE.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY POLICY LOAN FROM THE GENERAL ACCOUNT FOR
NOT MORE THAN SIX MONTHS. NO PAYMENT FROM THE GENERAL ACCOUNT TO PAY PREMIUMS ON
THIS POLICY WILL BE DEFERRED.
CONTINUATION IF ALL PREMIUM PAYMENTS CEASE, THE INSURANCE PROVIDED UNDER THIS POLICY, INCLUDING
OF INSURANCE BENEFITS PROVIDED BY ANY RIDER ATTACHED TO THIS POLICY, WILL CONTINUE IN ACCORDANCE
WITH THE PROVISIONS OF THIS POLICY FOR AS LONG AS THE CASH VALUE LESS ANY LOANS,
LOAN INTEREST ACCURED AND ANY SURRENDER CHARGE IS SUFFICIENT TO COVER THE MONTHLY
DEDUCTIONS.
BASIS OF THE MINIMUM CASH VALUES ARE BASED ON 1) THE MINIMUM CASH VALUE MORTALITY TABLE
COMPUTATION SHOWN ON THE POLICY SPECIFICATIONS PAGE; AND 2) FOR AMOUNTS ALLOCATED TO THE
GENERAL ACCOUNT, COMPOUND INTEREST AT AN ANNUAL RATE OF NOT LESS THAN THE GENERAL
ACCOUNT CASH VALUE GUARANTEED INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THERE IS NO MINIMUM CASH VALUE GUARANTEED INTEREST RATE FOR AMOUNTS ALLOCATED
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
NET SINGLE PREMIUMS ARE BASED ON 1) THE 7702 TABLE AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE; AND 2) THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST RATE
AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
ALL VALUES ARE AT LEAST EQUAL TO THOSE REQUIRED BY ANY APPLICABLE LAW OF THE STATE
THAT GOVERNS YOUR POLICY. WE HAVE FILED A DETAILED STATEMENT OF THE METHOD OF
CALCULATING CASH VALUES AND RESERVES WITH THE INSURANCE SUPERVISORY OFFICIAL OF
THAT STATE.
106008 6.08
(6/98)
<PAGE> 28
<CAPTION>
10. PAYMENT OF POLICY BENEFITS
<C> <S>
PAYMENT A LUMP SUM PAYMENT WILL BE MADE AS PROVIDED ON THE FACE PAGE.
INTEREST ON WE WILL PAY INTEREST ON PROCEEDS FROM THE DATE OF THE LAST INSURED'S DEATH TO THE
PROCEEDS DATE OF PAYMENT. INTEREST WILL BE AT AN ANNUAL RATE DETERMINED BY US, BUT NEVER
LESS THAN THE GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE.
EXTENDED PROVISIONS FOR SETTLEMENT OF PROCEEDS DIFFERENT FROM A LUMP SUM PAYMENT MAY ONLY BE
PROVISIONS MADE UPON WRITTEN AGREEMENT WITH US.
</TABLE>
00782 7.01
(6/98)
<PAGE> 29
JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
PARTICIPATING
General
American
LIFE INSURANCE COMPANY
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128
100018
(6/98)
<PAGE> 1
General POLICY NUMBER:
American
LIFE INSURANCE COMPANY 16,000,001
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128 INSUREDS:
John Doe
Jane Doe
JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
NON-PARTICIPATING
Flexible Premiums are payable while this policy is in force and continue
until the younger Insured reaches Attained Age 100. If both Insureds die
while this policy is in force, we will pay the policy proceeds to the
beneficiary upon the Last Insured's death. We must receive proof of both
Insureds' deaths. The policy must also be surrendered to us after the Last
Insured's death occurs. Any payment will be subject to all of the provisions
and conditions on this and the following pages of this policy.
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE UNDER THE CONDITIONS DESCRIBED ON PAGES 4.01 AND 4.02.
THE POLICY'S CASH VALUE IN EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT
IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY
INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE THE
SEPARATE ACCOUNT PROVISION.
THE POLICY'S CASH VALUE IN THE GENERAL ACCOUNT WILL BE CREDITED WITH INTEREST
AT A MINIMUM GUARANTEED RATE AS SHOWN ON THE POLICY SPECIFICATIONS PAGE. WE
MAY CREDIT ADDITIONAL INTEREST IN EXCESS OF THE GUARANTEED RATE. SEE THE
GENERAL ACCOUNT CASH VALUE PROVISION.
RIGHT TO EXAMINE POLICY
Please read this policy. You may return this policy to us or to the agent
through whom it was purchased within 20 days from the date you receive it or
within 45 days after the application is signed, whichever period ends later.
If you return it within this period, the policy will be void from the
beginning. We will refund any premium paid.
This policy is a legal contract between the policyowner and General American.
PLEASE READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief
outline of some of the important features of your policy. This cover sheet is
not the complete insurance contract and only the actual policy provisions
will control. The policy itself sets forth, in detail, the rights and
obligations of both you and your insurance company. IT IS, THEREFORE,
IMPORTANT THAT YOU READ YOUR POLICY.
Signed for the company at its Home Office, St. Louis, Missouri 63128.
(1-800-638-9294)
/s/ Robert J. Banstetter /s/ Richard A. Liddy
V.P., GENERAL COUNSEL CHAIRMAN, PRESIDENT
AND SECRETARY AND CEO
100018NP 0.01
(6/98)
<PAGE> 2
<TABLE>
ALPHABETIC GUIDE TO YOUR CONTRACT
<CAPTION>
Page
<C> <S>
3.07 Addition, Deletion or Substitution
of Investments
4.04 Allocation of Net Premiums
3.04 Assignments
6.08 Basis of Computation
3.02 Beneficiary
6.05 Cash Surrender Value
6.02 Cash Values
4.02 Change in Contract Type
3.05 Change of Insured
3.04 Change of Owner or Beneficiary
3.05 Claims of Creditors
3.04 Conformity with Statutes
4.01 Death Benefit
3.01 Definitions
4.02 Face Amount Decreases
6.02 General Account Cash Value
6.03 General Account Interest Rate
4.04 Grace Period
3.05 Incontestability
7.01 Interest on Proceeds
3.01 Issue Date
6.04 Loan Account Cash Value
6.01 Loans
Page
3.05 Misstatement of Age or Sex and
Corrections
6.04 Monthly Cost of Insurance
6.05 Monthly Deduction
6.05 Monthly Policy Charge
6.03 Net Investment Factor
4.03 Net Premium
3.02 Owner
6.05 Partial Withdrawals
7.01 Payment of Policy Benefits
4.03 Payment of Premiums
4.02 Policy Changes
4.01 Policy Proceeds
6.07 Postponement of Payments
or Transfers
4.05 Reinstatement
3.04 Requests for Changes and/or
Information
6.03 Separate Account Cash Value
3.06 Separate Account Provisions
3.04 Statements in Application
3.05 Suicide Exclusion
6.06 Surrender
3.06 Transfers
</TABLE>
Additional Benefit Riders, Modifications and Amendments, if any, and a Copy
of the Application are found following the final section.
NOTICE OF ANNUAL MEETING
The annual meeting for the election of directors and the transaction of other
business for General American Mutual Holding Company is held each year at its
Home Office in St. Louis, Missouri. This meeting is at 11:00 a.m. on the
fourth Thursday in April. General American Mutual Holding Company is a mutual
company owned by its members. Each member is entitled to vote at such
elections and to participate in such meetings.
100018NP 0.02
(6/98)
<PAGE> 3
1. POLICY SPECIFICATIONS
GENERAL POLICY SPECIFICATIONS
POLICY NUMBER [16,000,001]
ISSUE DATE [JANUARY 1, 1998]
FACE AMOUNT [$100,000]
CONTRACT TYPE [OPTION A]
INITIAL PREMIUM PAID [$640.00]
PLANNED ANNUAL PREMIUM [$640.00]
MINIMUM INITIAL ANNUAL PREMIUM AMOUNT [$640.00]
QUALIFIED ROLLOVER PREMIUM [$ 0.00]
TARGET PREMIUM [$315.00]
TARGET PREMIUM (BASE ONLY) [$315.00]
NO LAPSE ANNUAL PREMIUM [$640.00]
NO LAPSE PREMIUM DATE [JANUARY 1, 2003]
PREMIUM TAX CHARGE [2%]
FEDERAL TAX CHARGE [1.3%]
MAXIMUM PERCENT OF PREMIUM CHARGE -
1st YEAR: UP TO TARGET PREMIUM [15%]
ABOVE TARGET PREMIUM [5%]
QUALIFIED ROLLOVER PREMIUM [0%]
YEARS 2-10 [5%]
YEARS 11+ [2%]
INSURED AGE SEX RISK CLASSIFICATION
[JOHN DOE] [35] [MALE] [STANDARD SMOKER]
[JANE DOE] [35] [FEMALE] [STANDARD SMOKER]
FORM BENEFITS - AS SPECIFIED IN POLICY
NUMBERS AND IN ANY RIDER
POLICY PLAN: JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE
100018NP
11210NP
11211NP
11212NP
11213NP
103016NP
104010NP
106008NP
00782NP
11210NP 1.01
<PAGE> 4
2. POLICY SPECIFICATIONS
GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE [4%]
GENERAL ACCOUNT MAXIMUM
ALLOCATION PERCENT [100%]
GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT [25%]
MAXIMUM MONTHLY COST OF
INSURANCE FACTOR [1.0032737]
MAXIMUM DAILY MORTALITY AND
EXPENSE RISK PERCENTAGE:
YEARS 1-10 [0.0015027%]
YEARS 11-20 [0.0012301%]
YEARS 21+ [0.0009572%]
MAXIMUM ANNUAL MORTALITY AND EXPENSE
RISK PERCENTAGE:
YEARS 1-10 [0.55%]
YEARS 11-20 [0.45%]
YEARS 21+ [0.35%]
MAXIMUM MONTHLY POLICY CHARGE:
1st YEAR [$25.00]
YEARS 2+ [$6.00]
MAXIMUM SELECTION AND ISSUE
EXPENSE CHARGE RATE:
YEARS 1-10 [$0.90]
YEARS 11+ [$0]
MINIMUM FACE AMOUNT [$50,000]
MINIMUM FACE AMOUNT DECREASE [$5,000]
MAXIMUM FEE FOR PROJECTION OF [$25.00]
BENEFITS AND VALUES
MAXIMUM TRANSFER CHARGE [$25.00]
GUARANTEED INTEREST RATE ON [4.0%]
PROCEEDS
7702 TABLE [1980 CSO MORTALITY TABLE
FOR A MALE SMOKER, AND
1980 CSO MORTALITY TABLE
FOR A FEMALE SMOKER,
AGE NEAREST BIRTHDAY]
BASIS OF COMPUTATION OF MINIMUM [1980 CSO MORTALITY TABLE
CASH VALUES FOR A MALE SMOKER, AND
1980 CSO MORTALITY TABLE
FOR A FEMALE SMOKER,
AGE NEAREST BIRTHDAY]
IF THE INITIAL PREMIUM PAID AND SUBSEQUENT PREMIUMS PROVE TO BE TOO LOW,
COVERAGE PROVIDED BY THIS POLICY MAY CEASE.
11210NP 1.02
<PAGE> 5
SURRENDER CHARGE SCHEDULE
INSUREDS: JOHN DOE POLICY NUMBER: 16,000,001
JANE DOE COVERAGE: JSFPVL
FACE AMOUNT: $100,000 EFFECTIVE DATE: JANUARY 1, 1998
TARGET PREMIUM (Base Only): $315.00
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM
POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE
<S> <C> <C> <C>
1-60 45.00% 91 24.17%
61 44.58% 92 23.33%
62 44.17% 93 22.50%
63 43.75% 94 21.67%
64 43.33% 95 20.83%
65 42.92% 96 20.00%
66 42.50% 97 19.17%
67 42.08% 98 18.33%
68 41.67% 99 17.50%
69 41.25% 100 16.67%
70 40.83% 101 15.83%
71 40.42% 102 15.00%
72 40.00% 103 14.17%
73 39.17% 104 13.33%
74 38.33% 105 12.50%
75 37.50% 106 11.67%
76 36.67% 107 10.83%
77 35.83% 108 10.00%
78 35.00% 109 9.17%
79 34.17% 110 8.33%
80 33.33% 111 7.50%
81 32.50% 112 6.67%
82 31.67% 113 5.83%
83 30.83% 114 5.00%
84 30.00% 115 4.17%
85 29.17% 116 3.33%
86 28.33% 117 2.50%
87 27.50% 118 1.67%
88 26.67% 119 0.83%
89 25.83% 120 0.00%
90 25.00%
</TABLE>
11211NP
<PAGE> 6
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
RATES ARE PER $1,000
COVERAGE: JSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 16,000,001 JANE DOE
ISSUE DATE: JANUARY 1, 1998
<TABLE>
<CAPTION>
ATTAINED AGE RATE ATTAINED AGE RATE ATTAINED AGE RATE
<S> <C> <C> <C> <C> <C>
35 0.00 57 0.28 79 5.55
36 0.00 58 0.32 80 6.19
37 0.00 59 0.37 81 6.91
38 0.00 60 0.42 82 7.72
39 0.01 61 0.49 83 8.62
40 0.01 62 0.56 84 9.66
41 0.01 63 0.66 85 10.70
42 0.02 64 0.77 86 11.85
43 0.02 65 0.90 87 12.96
44 0.03 66 1.04 88 14.20
45 0.03 67 1.19 89 15.39
46 0.04 68 1.35 90 16.71
47 0.05 69 1.53 91 18.10
48 0.06 70 1.73 92 19.60
49 0.07 71 1.97 93 21.33
50 0.08 72 2.25 94 23.45
51 0.10 73 2.58 95 26.54
52 0.12 74 2.97 96 31.38
53 0.14 75 3.42 97 39.61
54 0.17 76 3.90 98 54.66
55 0.20 77 4.42 99 83.33
56 0.24 78 4.96 100+ 0
</TABLE>
THESE RATES ARE FOR THE BASE POLICY AT ISSUE. THEY ARE BASED ON A COMBINATION OF
THE ULTIMATE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE FOR A MALE
SMOKER AND A FEMALE SMOKER.
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<PAGE> 7
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS
COVERAGE: JSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 16,000,001 JANE DOE
ISSUE DATE: JAN 1, 1998
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE<F*> RATE AGE<F*> RATE AGE<F*> RATE
<S> <C> <C> <C> <C> <C>
35 5.64184 57 2.45952 79 1.33835
36 5.42508 58 2.37604 80 1.31492
37 5.21686 59 2.29637 81 1.29295
38 5.01683 60 2.22033 82 1.27239
39 4.82481 61 2.14774 83 1.25326
40 4.64044 62 2.07858 84 1.23556
41 4.46354 63 2.01279 85 1.21935
42 4.29389 64 1.95040 86 1.20433
43 4.13112 65 1.89131 87 1.19047
44 3.97514 66 1.83546 88 1.17738
45 3.82557 67 1.78261 89 1.16503
46 3.68227 68 1.73259 90 1.15300
47 3.54498 69 1.68510 91 1.14119
48 3.41344 70 1.64002 92 1.12932
49 3.28747 71 1.59723 93 1.11709
50 3.16694 72 1.55674 94 1.10423
51 3.05154 73 1.51862 95 1.09045
52 2.94120 74 1.48292 96 1.07580
53 2.83570 75 1.44965 97 1.06037
54 2.73495 76 1.41875 98 1.04422
55 2.63880 77 1.39005 99 1.02648
56 2.54704 78 1.36333 100+ 1.01000
<FN>
<F*> Attained Age is the younger Insured's Attained Age even if no longer
living.
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
1. DEFINITIONS IN THIS POLICY
<C> <S>
WE, US AND OUR GENERAL AMERICAN LIFE INSURANCE COMPANY.
YOU AND YOUR THE OWNER OF THIS POLICY. THE OWNER MAY BE SOMEONE OTHER THAN THE INSUREDS.
IN THE APPLICATION THE WORDS "YOU" AND "YOUR" REFER TO THE PROPOSED INSURED
PERSON(S).
INSUREDS THE PERSONS WHOSE LIVES ARE INSURED UNDER THIS POLICY. SEE THE POLICY
SPECIFICATIONS PAGE.
LAST INSURED THE INSURED WHOSE DEATH SUCCEEDS THE DEATH OF ALL OTHER INSUREDS UNDER THIS POLICY.
ISSUE AGE THE AGE OF EACH INSURED AS OF HIS OR HER NEAREST BIRTHDAY TO THE ISSUE DATE.
ATTAINED AGE THE ISSUE AGE FOR AN INSURED PLUS THE NUMBER OF COMPLETED POLICY YEARS, WHETHER OR
NOT THE INSURED IS LIVING. THIS INCLUDES ANY PERIOD DURING WHICH THIS POLICY WAS
LAPSED.
ISSUE DATE THE EFFECTIVE DATE OF THE COVERAGE UNDER THIS POLICY WHICH IS THE ISSUE DATE SHOWN
ON THE POLICY SPECIFICATIONS PAGE. IT IS ALSO THE DATE FROM WHICH POLICY
ANNIVERSARIES, POLICY YEARS, AND POLICY MONTHS ARE MEASURED.
INVESTMENT THE DATE THE FIRST PREMIUM IS APPLIED TO THE GENERAL ACCOUNT AND/OR THE DIVISIONS
START DATE OF SEPARATE ACCOUNT ELEVEN. THIS DATE WILL BE THE LATER OF:
- THE ISSUE DATE OF THE POLICY; OR
- THE DATE WE RECEIVE THE FIRST PREMIUM AT OUR HOME OFFICE.
MONTHLY THE SAME DATE IN EACH SUCCEEDING MONTH AS THE ISSUE DATE EXCEPT THAT WHENEVER THE
ANNIVERSARY 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.
GENERAL ACCOUNT THE ASSETS HELD BY US, EXCLUDING ANY LOANS, OTHER THAN THOSE ALLOCATED TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN OR ANY OTHER SEPARATE ACCOUNT.
SEPARATE ACCOUNT SEPARATE ACCOUNT ELEVEN, A SEPARATE INVESTMENT ACCOUNT CREATED BY US TO RECEIVE AND
INVEST NET PREMIUMS RECEIVED FOR THIS POLICY OR OTHER POLICIES.
LOAN ACCOUNT THE ACCOUNT TO WHICH WE WILL TRANSFER FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN THE AMOUNT OF ANY POLICY LOAN.
LOAN SUBACCOUNT A LOAN SUBACCOUNT EXISTS FOR THE GENERAL ACCOUNT AND EACH DIVISION OF SEPARATE
ACCOUNT ELEVEN. 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.
VALUATION DATE EACH DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, WE ARE OPEN FOR
BUSINESS AND THE SEC HAS NOT RESTRICTED TRADING OR DECLARED AN EMERGENCY.
SEC THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
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<PAGE> 9
<CAPTION>
2. PERSONS WITH AN INTEREST IN THE POLICY
<C> <S>
OWNER THE OWNER OF THIS POLICY IS AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL
AGREEMENT ATTACHED TO THIS POLICY, UNLESS LATER CHANGED AS PROVIDED IN THIS POLICY.
IF THERE IS MORE THAN ONE OWNER AT A GIVEN TIME, ALL MUST EXERCISE THE RIGHTS OF
OWNERSHIP BY JOINT ACTION. OWNERSHIP MAY BE CHANGED IN ACCORDANCE WITH THE CHANGE
OF OWNER OR BENEFICIARY PROVISION.
YOU, AS OWNER, ARE ENTITLED TO EXERCISE ALL OWNERSHIP RIGHTS PROVIDED BY THIS
POLICY, WHILE IT IS IN FORCE. ANY PERSON WHOSE RIGHTS OF OWNERSHIP DEPEND UPON SOME
FUTURE EVENT WILL NOT POSSESS ANY PRESENT RIGHTS OF OWNERSHIP. IF THE OWNER IS A
TRUSTEE(S), WE MAY ACT IN RELIANCE UPON THE WRITTEN REQUEST OF ANY TRUSTEE AND WE
ARE NOT RESPONSIBLE FOR PROPER ADMINISTRATION OF THE TRUST. UNLESS OTHERWISE
PROVIDED, THE FINAL OWNER WILL BE THE ESTATE OF THE LAST OWNER TO DIE.
BENEFICIARY THE BENEFICIARY TO RECEIVE THE PROCEEDS IN THE EVENT OF THE LAST INSURED'S DEATH IS
AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL AGREEMENT ATTACHED TO THIS
POLICY, UNLESS LATER CHANGED AS PROVIDED IN THE POLICY. YOU MAY CHANGE THE
BENEFICIARY IN ACCORDANCE WITH THE CHANGE OF OWNER OR BENEFICIARY PROVISION. UNLESS
OTHERWISE STATED, THE BENEFICIARY HAS NO RIGHTS IN THIS POLICY BEFORE THE DEATH OF
THE LAST INSURED. IF THERE IS MORE THAN ONE BENEFICIARY AT THE DEATH OF THE LAST
INSURED, EACH WILL RECEIVE EQUAL PAYMENTS UNLESS OTHERWISE PROVIDED. UNLESS YOU
PROVIDE OTHERWISE, IF A BENEFICIARY DIES PRIOR TO THE LAST INSURED'S DEATH, THAT
BENEFICIARY'S SHARE WILL BE PAID TO THE LIVING BENEFICIARIES OF THAT CLASS. THE
DECEASED BENEFICIARY'S SHARE WILL BE PAID IN THE SAME PROPORTION AS THE LIVING
BENEFICIARIES' SHARES. IF THERE ARE NO BENEFICIARIES LIVING WHEN THE LAST INSURED
DIES, OR AT THE END OF ANY COMMON DISASTER PERIOD, THE PROCEEDS (COMMUTED IF
REQUIRED) WILL BE PAYABLE TO YOU, IF YOU ARE LIVING, OR TO YOUR ESTATE.
ANY PAYMENT WE MAKE WILL TERMINATE OUR LIABILITY WITH RESPECT TO SUCH PAYMENT. IF
THE INSUREDS DESIGNATE SPECIFIC AMOUNTS TO BE PAID TO SPECIFIC BENEFICIARIES AND
THE TOTAL OF THOSE AMOUNTS IS OTHER THAN THE AMOUNT OF PROCEEDS PAYABLE, THE
PROCEEDS PAYABLE WILL BE ADJUSTED AND PAID IN THE SAME PROPORTION AS THE SPECIFIC
AMOUNTS WERE TO BE PAID.
ANY TERM USED IN THE MASCULINE, FEMININE, SINGULAR OR PLURAL, WILL INCLUDE OR BE
THE OPPOSITE GENDER OR NUMBER WHERE NECESSARY.
IF ANY BENEFICIARY DESIGNATION IN THE APPLICATION INCLUDES ANY OF THE FOLLOWING
PROVISIONS, THE TERMS OF THAT PROVISION SHOWN BELOW WILL APPLY:
1. PER STIRPES. THE SHARE OF A DECEASED BENEFICIARY WILL BE PAID TO THAT
BENEFICIARY'S SURVIVING CHILDREN, EQUALLY.
2. COMMON DISASTER. WE WILL NOT MAKE PAYMENT UNTIL THE STATED NUMBER OF DAYS
AFTER THE LAST INSURED'S DEATH. IF ANY BENEFICIARY DIES DURING THIS
PERIOD, OR IF THE ORDER OF DEATH OF ANY BENEFICIARY AND THE LAST INSURED
CANNOT BE DETERMINED, WE WILL PAY AS THOUGH SUCH BENEFICIARY DIED FIRST.
3. TRUST FOR MINOR BENEFICIARY. THE ORIGINAL OR SUCCESSOR TRUSTEE FOR A MINOR
BENEFICIARY WILL SERVE WITHOUT BOND AND EXERCISE ALL RIGHTS AND RECEIVE
ALL PROCEEDS FOR THE MINOR BENEFICIARY. SUCH PROCEEDS WILL BE HELD IN A
SEPARATE TRUST AND USED AT THE TRUSTEE'S DISCRETION FOR SUCH MINOR'S
EDUCATION, SUPPORT, CARE AND GENERAL WELFARE. THE TRUST WILL TERMINATE
AT THE LEGAL AGE OF MAJORITY OR PRIOR DEATH OF THE MINOR BENEFICIARY.
ANY FUNDS THEN HELD BY THE TRUSTEE WILL BE PAID IN ONE SUM TO SUCH
BENEFICIARY OR THE BENEFICIARY'S ESTATE. THE TRUST CAN BE REVOKED BY A
CHANGE OF BENEFICIARY UNDER THE POLICY. PAYMENT TO ANY TRUSTEE WILL
DISCHARGE US TO THE EXTENT OF SUCH PAYMENT.
103016NP 3.02
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<PAGE> 10
4. TRUST UNDER WILL. WHEN WE RECEIVE AT OUR HOME OFFICE:
A) CERTIFIED COPIES OF THE LAST WILL AND TESTAMENT OF THE NAMED TESTATOR;
AND
B) THE ORDER ADMITTING THE WILL TO PROBATE; AND IF SUCH WILL CREATED A
TRUST CAPABLE OF RECEIVING PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THESE DOCUMENTS, SATISFACTORY PROOF IS FURNISHED
THAT:
A) THE TESTATOR DIED INTESTATE; OR
B) THE WILL CREATED NO TRUST CAPABLE OF RECEIVING PROCEEDS; OR
C) THE TESTATOR WAS NOT EITHER INSURED, BUT SURVIVED THE LAST INSURED;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE NOT REQUIRED TO CHECK INTO THE VALIDITY,
GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST. SUCH TRUSTEE
DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER THE POLICY, INCLUDING THE
RIGHT TO CHANGE THE BENEFICIARY.
5. TRUST UNDER SEPARATE WRITTEN AGREEMENT. WHEN WE RECEIVE AT OUR HOME OFFICE
A WRITTEN STATEMENT FROM THE TRUSTEE NAMED IN THE BENEFICIARY DESIGNATION
THAT:
A) THE TRUST AGREEMENT IS IN FORCE; AND
B) THE AGREEMENT PERMITS THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THE TRUSTEE'S STATEMENT, SATISFACTORY PROOF IS
FURNISHED THAT:
A) THE TRUST AGREEMENT IS NOT IN EFFECT; OR
B) THE AGREEMENT DOES NOT PERMIT THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE ENTITLED TO RELY ON ANY STATEMENTS OR
DOCUMENTS FURNISHED TO US BY THE TRUSTEE AND ARE NOT REQUIRED TO CHECK
INTO THE VALIDITY, GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST
AGREEMENT. SUCH TRUSTEE DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER
THE POLICY, INCLUDING THE RIGHT TO CHANGE THE BENEFICIARY.
6. IRREVOCABLE BENEFICIARY. YOU CANNOT CHANGE AN IRREVOCABLE BENEFICIARY
WITHOUT THE WRITTEN CONSENT OF SUCH BENEFICIARY. ALSO, YOU CANNOT
EXERCISE ANY OTHER OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH
BENEFICIARY, IF THE EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF
DIMINISHING THE RIGHTS AND INTEREST OF THE IRREVOCABLE BENEFICIARY.
7. CREDITOR BENEFICIARY. PROCEEDS PAYABLE TO ANY CREDITOR BENEFICIARY ARE
LIMITED TO ITS PROVABLE INTEREST. THE BALANCE OF ANY PROCEEDS WILL BE
PAID TO ANY OTHER NAMED BENEFICIARY. IF THERE IS NO OTHER BENEFICIARY
LIVING, WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED. YOU
CANNOT CHANGE A CREDITOR BENEFICIARY WITHOUT THE WRITTEN CONSENT OF THE
CREDITOR OR RELEASE OF ITS INTEREST. ALSO, YOU CANNOT EXERCISE ANY OTHER
OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH BENEFICIARY, IF THE
EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF DIMINISHING THE RIGHTS
AND INTEREST OF THE CREDITOR BENEFICIARY.
103016NP 3.03
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<PAGE> 11
CHANGE OF DURING THE LIFETIME OF EITHER INSURED YOU MAY CHANGE THE OWNERSHIP AND BENEFICIARY
OWNER OR DESIGNATIONS, SUBJECT TO ANY RESTRICTIONS AS STATED IN THE OWNER OR BENEFICIARY
BENEFICIARY PROVISIONS. YOU MUST MAKE THE CHANGE IN WRITTEN FORM SATISFACTORY TO US. IF
ACCEPTABLE TO US THE CHANGE WILL TAKE EFFECT AS OF THE TIME YOU SIGNED THE REQUEST,
WHETHER OR NOT EITHER INSURED IS LIVING WHEN WE RECEIVE YOUR REQUEST AT OUR HOME
OFFICE. THE CHANGE WILL BE SUBJECT TO ANY ASSIGNMENT OF THIS POLICY OR OTHER LEGAL
RESTRICTIONS. IT WILL ALSO BE SUBJECT TO ANY PAYMENT WE MADE OR ACTION WE TOOK
BEFORE WE RECEIVED YOUR WRITTEN NOTICE OF THE CHANGE. WE HAVE THE RIGHT TO REQUIRE
THE POLICY FOR ENDORSEMENT BEFORE WE ACCEPT THE CHANGE.
IF YOU ARE ALSO THE BENEFICIARY OF THE POLICY AT THE TIME OF THE LAST INSURED'S DEATH,
YOU MAY DESIGNATE SOME OTHER PERSON TO RECEIVE THE PROCEEDS OF THE POLICY WITHIN 60
DAYS AFTER THE LAST INSURED'S DEATH.
ASSIGNMENTS WE WILL NOT BE BOUND BY AN ASSIGNMENT OF THE POLICY OR OF ANY INTEREST IN IT
UNLESS:
1. THE ASSIGNMENT IS MADE AS A WRITTEN INSTRUMENT,
2. YOU FILE THE ORIGINAL INSTRUMENT OR A CERTIFIED COPY WITH US AT OUR HOME
OFFICE, AND
3. WE SEND YOU AN ACKNOWLEDGED COPY.
WE ARE NOT RESPONSIBLE FOR DETERMINING THE VALIDITY OF ANY ASSIGNMENT.
IF A CLAIM IS BASED ON AN ASSIGNMENT, WE MAY REQUIRE PROOF OF INTEREST OF THE
CLAIMANT. A VALID ASSIGNMENT WILL TAKE PRECEDENCE OVER ANY CLAIM OF A BENEFICIARY.
REQUESTS FOR SUBMIT ALL REQUESTS FOR CHANGE AND/OR INFORMATION IN WRITING TO OUR HOME OFFICE -
CHANGES AND/OR GENERAL AMERICAN LIFE INSURANCE COMPANY, P.O. BOX 14490, ST. LOUIS, MO 63178.
INFORMATION
<CAPTION>
3. GENERAL PROVISIONS
<C> <S>
THE CONTRACT WE HAVE ISSUED THIS POLICY IN CONSIDERATION OF THE APPLICATION AND PAYMENT OF
PREMIUMS. THE POLICY, THE APPLICATION FOR IT, AND ANY RIDERS CONSTITUTE THE ENTIRE
CONTRACT AND ARE ATTACHED TO AND MADE A PART OF THE POLICY WHEN THE INSURANCE
APPLIED FOR IS ACCEPTED. A COPY OF ANY APPLICATION FOR REINSTATEMENT WILL BE SENT
TO YOU FOR ATTACHMENT TO THIS POLICY AND WILL BECOME PART OF THE CONTRACT OF
REINSTATEMENT AND OF THIS POLICY. THE POLICY MAY BE CHANGED BY MUTUAL AGREEMENT.
ANY CHANGE MUST BE IN WRITING AND APPROVED BY OUR PRESIDENT, VICE-PRESIDENT OR
SECRETARY. OUR AGENTS HAVE NO AUTHORITY TO ALTER OR MODIFY ANY TERMS, CONDITIONS,
OR AGREEMENTS OF THIS POLICY, OR TO WAIVE ANY OF ITS PROVISIONS.
CONFORMITY WITH IF ANY PROVISION IN THIS POLICY IS IN CONFLICT WITH THE LAWS OF THE STATE WHICH
STATUTES GOVERN THIS POLICY, THE PROVISION WILL BE DEEMED TO BE AMENDED TO CONFORM WITH SUCH
LAWS. IN ADDITION, WE RESERVE THE RIGHT TO CHANGE THIS POLICY IF WE DETERMINE THAT
A CHANGE IS NECESSARY TO CAUSE THIS POLICY TO COMPLY WITH, OR GIVE YOU THE BENEFIT
OF, ANY FEDERAL OR STATE STATUTE, RULE, OR REGULATION, INCLUDING, BUT NOT LIMITED
TO, REQUIREMENTS FOR LIFE INSURANCE CONTRACTS UNDER THE INTERNAL REVENUE CODE, OR
ITS REGULATIONS OR PUBLISHED RULINGS.
STATEMENTS IN ALL STATEMENTS MADE BY THE INSUREDS OR ON THEIR BEHALF, OR BY THE APPLICANT, WILL
APPLICATION BE DEEMED REPRESENTATIONS AND NOT WARRANTIES, EXCEPT IN THE CASE OF FRAUD. MATERIAL
MISSTATEMENTS WILL NOT BE USED TO VOID THE POLICY OR ANY RIDER, OR DENY A CLAIM
UNLESS MADE IN THE APPLICATION FOR A POLICY OR A RIDER.
103016NP 3.04
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<PAGE> 12
CLAIMS OF TO THE EXTENT PERMITTED BY LAW, NEITHER THE POLICY NOR ANY PAYMENT UNDER IT WILL BE
CREDITORS SUBJECT TO THE CLAIMS OF CREDITORS OR TO ANY LEGAL PROCESS.
CONVERSION RIGHTS WHILE YOUR POLICY IS IN FORCE, YOU HAVE A ONE TIME RIGHT DURING THE FIRST TWO
POLICY YEARS TO TRANSFER ALL OF YOUR CASH VALUE FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN TO THE GENERAL ACCOUNT.
IF, AT ANY TIME DURING THE FIRST TWO POLICY YEARS, YOU REQUEST IN WRITING THE
TRANSFER OF THE CASH VALUE HELD IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN TO THE
GENERAL ACCOUNT AND YOU INDICATE THAT YOU ARE MAKING THIS TRANSFER IN EXERCISE OF
YOUR CONVERSION RIGHTS, THE TRANSFER WILL NOT BE SUBJECT TO A TRANSFER CHARGE OR
TRANSFER LIMITS, IF ANY. AT THE TIME OF SUCH TRANSFER, THERE WILL NOT BE ANY EFFECT
ON THE POLICY'S DEATH BENEFIT, FACE AMOUNT, NET AMOUNT AT RISK, RATE CLASS OR ISSUE
AGE.
IF YOU EXERCISE YOUR ONE TIME CONVERSION RIGHT, WE WILL AUTOMATICALLY ALLOCATE ALL
FUTURE NET PREMIUMS TO THE GENERAL ACCOUNT.
MISSTATEMENT OF IF THERE IS A MISSTATEMENT OF AGE OR SEX FOR EITHER INSURED IN THE APPLICATIONS,
AGE OR SEX AND THE AMOUNT OF THE DEATH BENEFIT WILL BE THAT WHICH WOULD BE PURCHASED BY THE MOST
CORRECTIONS RECENT MONTHLY COST OF INSURANCE CHARGE AT THE CORRECT AGE OR SEX.
IF WE MAKE ANY PAYMENT OR POLICY CHANGES IN GOOD FAITH, RELYING ON OUR RECORDS, OR
EVIDENCE SUPPLIED TO US, OUR DUTY WILL BE FULLY DISCHARGED. WE RESERVE THE RIGHT TO
CORRECT ANY ERRORS IN THE POLICY.
INCONTESTABILITY WE CANNOT CONTEST THIS POLICY AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF
EITHER INSURED FOR TWO YEARS FROM ITS ISSUE DATE. WE CANNOT CONTEST ANY
REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL MISSTATEMENTS MADE CONCERNING
SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF EITHER
INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVE THE REINSTATEMENT. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE WE APPROVED THE REQUEST FOR REINSTATEMENT,
WE CAN NOT CONTEST ANY REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL
MISSTATEMENTS MADE CONCERNING SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING
THE LIFETIME OF THAT INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVED
THE REINSTATEMENT. THIS PROVISION WILL NOT APPLY TO ANY RIDER WHICH CONTAINS ITS
OWN INCONTESTABILITY CLAUSE.
SUICIDE EXCLUSION IF EITHER INSURED DIES BY SUICIDE, WHILE SANE OR INSANE, WITHIN TWO YEARS FROM THE
ISSUE DATE (OR WITHIN THE MAXIMUM PERIOD PERMITTED BY LAW OF THE STATE IN WHICH
THIS POLICY WAS DELIVERED, IF LESS THAN TWO YEARS), THE AMOUNT PAYABLE WILL BE
LIMITED TO THE AMOUNT OF PREMIUMS PAID, LESS ANY OUTSTANDING POLICY LOANS WITH
INTEREST TO THE DATE OF DEATH, AND LESS ANY PARTIAL WITHDRAWALS.
CHANGE OF WHILE THIS POLICY IS IN FORCE, YOU MAY CHANGE ONE OR BOTH OF THE INSUREDS. TO DO
INSURED THIS, YOU MUST MEET THE REQUIREMENTS ESTABLISHED BY US. ANY RIDER ATTACHED TO THIS
POLICY MAY BE CONTINUED ONLY WITH OUR CONSENT. WE RESERVE THE RIGHT TO CHARGE A
NOMINAL FEE FOR PROCESSING A CHANGE OF INSURED.
ANNUAL REPORT EACH YEAR A REPORT WILL BE SENT TO YOU WHICH SHOWS THE CURRENT POLICY VALUES,
PREMIUMS PAID AND DEDUCTIONS MADE SINCE THE LAST REPORT, AND ANY OUTSTANDING POLICY
LOANS.
PROJECTION OF YOU MAY MAKE A WRITTEN REQUEST TO US FOR A PROJECTION OF ILLUSTRATIVE FUTURE CASH
BENEFITS AND VALUES AND DEATH BENEFITS. IF REQUESTED MORE THAN ONCE PER POLICY YEAR, THIS
VALUES PROJECTION WILL BE FURNISHED TO YOU FOR A NOMINAL FEE. THIS FEE WILL NOT EXCEED THE
MAXIMUM FEE FOR PROJECTION OF BENEFITS AND VALUES SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
103016NP 3.05
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<PAGE> 13
<CAPTION>
4. SEPARATE ACCOUNT PROVISIONS
<C> <S>
SEPARATE ACCOUNT THE VARIABLE BENEFITS UNDER THIS POLICY ARE PROVIDED THROUGH INVESTMENTS IN
SEPARATE ACCOUNT ELEVEN. THIS ACCOUNT IS USED FOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES AND, IF PERMITTED BY LAW, MAY BE USED FOR OTHER POLICIES OR
CONTRACTS AS WELL.
WE HOLD THE ASSETS OF SEPARATE ACCOUNT ELEVEN. THESE ASSETS ARE HELD SEPARATELY
FROM THE ASSETS HELD IN THE GENERAL ACCOUNT. INCOME, GAINS AND LOSSES---WHETHER OR
NOT REALIZED---FROM ASSETS ALLOCATED TO SEPARATE ACCOUNT ELEVEN WILL BE CREDITED TO
OR CHARGED AGAINST THE ACCOUNT WITHOUT REGARD TO OUR OTHER INCOME, GAINS OR LOSSES.
THE PORTION OF THE ASSETS HELD BY SEPARATE ACCOUNT ELEVEN EQUAL TO THE RESERVES AND
OTHER POLICY LIABILITIES WITH RESPECT TO SEPARATE ACCOUNT ELEVEN WILL NOT BE
CHARGED WITH LIABILITIES THAT ARISE FROM ANY OTHER BUSINESS WE MAY CONDUCT. WE HAVE
THE RIGHT TO TRANSFER TO OUR GENERAL ACCOUNT ANY ASSETS OF SEPARATE ACCOUNT ELEVEN
WHICH ARE IN EXCESS OF THE RESERVES AND OTHER POLICY LIABILITIES OF SEPARATE
ACCOUNT ELEVEN.
SEPARATE ACCOUNT ELEVEN IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. SEPARATE
ACCOUNT ELEVEN IS ALSO SUBJECT TO THE LAWS OF THE STATE OF MISSOURI, WHICH REGULATE
THE OPERATIONS OF INSURANCE COMPANIES INCORPORATED IN MISSOURI. THE INVESTMENT
POLICY OF SEPARATE ACCOUNT ELEVEN WILL NOT BE CHANGED WITHOUT THE APPROVAL OF THE
INSURANCE COMMISSIONER OF THE STATE OF MISSOURI. THE APPROVAL PROCESS IS ON FILE
WITH THE INSURANCE COMMISSIONER OF THE STATE IN WHICH THIS POLICY WAS DELIVERED.
DIVISIONS SEPARATE ACCOUNT ELEVEN HAS SEVERAL DIVISIONS. EACH DIVISION INVESTS IN A
CORRESPONDING INVESTMENT PORTFOLIO FROM ONE OR MORE REGISTERED INVESTMENT
COMPANIES.
INCOME, GAINS AND LOSSES---WHETHER OR NOT REALIZED---FROM THE ASSETS OF EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN ARE CREDITED TO OR CHARGED AGAINST THAT
DIVISION WITHOUT REGARD TO INCOME, GAINS OR LOSSES IN OTHER DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR IN THE GENERAL ACCOUNT.
WE WILL VALUE THE ASSETS OF EACH DIVISION OF SEPARATE ACCOUNT ELEVEN AT THE END OF
EACH VALUATION PERIOD. A VALUATION PERIOD IS THE PERIOD BETWEEN TWO SUCCESSIVE
VALUATION DATES. A VALUATION DATE IS ANY DAY THAT BENEFITS VARY AND ON WHICH THE
NEW YORK STOCK EXCHANGE AND OUR HOME OFFICE ARE OPEN FOR BUSINESS OR ANY OTHER DAY
THAT MAY BE REQUIRED BY ANY APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND
REGULATIONS.
TRANSFERS YOU MAY TRANSFER AMOUNTS AS FOLLOWS:
- BETWEEN THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN;
OR
- AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
- THE FIRST 12 REQUESTED TRANSFERS AND/OR PARTIAL WITHDRAWALS PER POLICY
YEAR WILL BE ALLOWED FREE OF CHARGE; THEREAFTER WE MAY IMPOSE A TRANSFER
CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER CHARGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THESE TRANSFERS WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
- WE MUST RECEIVE A REQUEST FOR TRANSFER IN A FORM ACCEPTABLE TO US.
- TRANSFERS FROM OR AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE
AT LEAST $500.00 OR THE ENTIRE AMOUNT YOU HAVE IN A DIVISION, IF SMALLER.
103016NP 3.06
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<PAGE> 14
- TRANSFERS AND/OR PARTIAL WITHDRAWALS FROM THE GENERAL ACCOUNT TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE AT LEAST $500.00. THE
MAXIMUM AMOUNT OF ALL TRANSFERS AND PARTIAL WITHDRAWALS FROM THE GENERAL
ACCOUNT IN ANY POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT, AS SHOWN ON THE POLICY SPECIFICATIONS
PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
- THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER ANY TRANSFER IN TO THE
GENERAL ACCOUNT CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE MAY REVOKE OR MODIFY THE TRANSFER PRIVILEGE AT ANY TIME, INCLUDING THE MINIMUM
AMOUNT TRANSFERABLE, THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT, AND THE
TRANSFER CHARGE, IF ANY.
ADDITION, DELETION WE RESERVE THE RIGHT, SUBJECT TO COMPLIANCE WITH APPLICABLE LAW, TO MAKE ADDITIONS
OR SUBSTITUTION TO, DELETIONS FROM, OR SUBSTITUTIONS FOR THE SHARES OF A FUND THAT ARE HELD BY
OF INVESTMENTS SEPARATE ACCOUNT ELEVEN OR THAT SEPARATE ACCOUNT ELEVEN MAY PURCHASE. WE RESERVE
THE RIGHT TO ELIMINATE THE SHARES OF ANY OF THE FUNDS OF THIS POLICY AND TO
SUBSTITUTE SHARES OF ANOTHER FUND OF A REGISTERED INVESTMENT COMPANY, IF THE SHARES
OR FUNDS ARE NO LONGER AVAILABLE FOR INVESTMENT OR IF IN OUR JUDGEMENT, FURTHER
INVESTMENT IN ANY FUND SHOULD BECOME INAPPROPRIATE IN VIEW OF THE PURPOSE OF THE
POLICY. WE WILL NOT SUBSTITUTE ANY SHARES ATTRIBUTABLE TO THE OWNER'S INTEREST IN A
DIVISION OF SEPARATE ACCOUNT ELEVEN WITHOUT NOTICE TO THE OWNER AND COMPLIANCE WITH
THE INVESTMENT COMPANY ACT OF 1940. THIS WILL NOT PREVENT SEPARATE ACCOUNT ELEVEN
FROM PURCHASING OTHER SECURITIES FOR OTHER SERIES OR CLASSES OF POLICIES, OR FROM
PERMITTING CONVERSION BETWEEN SERIES OR CLASSES OF POLICIES OR CONTRACTS ON THE
BASIS OF REQUESTS MADE BY OWNERS.
WE RESERVE THE RIGHT TO ESTABLISH ADDITIONAL DIVISIONS OF SEPARATE ACCOUNT ELEVEN
WHICH WOULD INVEST IN SHARES OF REGISTERED INVESTMENT COMPANIES AND TO MAKE SUCH
DIVISIONS AVAILABLE TO SUCH CLASS OR SERIES OF POLICIES AS WE DEEM APPROPRIATE. WE
ALSO RESERVE THE RIGHT TO ELIMINATE OR COMBINE EXISTING DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR TO TRANSFER ASSETS BETWEEN DIVISIONS.
IF WE CONSIDER IT TO BE IN THE BEST INTEREST OF PERSONS HAVING VOTING RIGHTS UNDER
THE POLICIES, SEPARATE ACCOUNT ELEVEN MAY BE OPERATED AS A MANAGEMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940; IT MAY BE DEREGISTERED UNDER THAT ACT IN THE
EVENT REGISTRATION IS NO LONGER REQUIRED; IT MAY BE COMBINED WITH OTHER SEPARATE
ACCOUNTS; OR ITS ASSETS MAY BE TRANSFERRED TO OTHER SEPARATE ACCOUNTS.
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<CAPTION>
5. POLICY BENEFITS
<C> <S>
POLICY PROCEEDS THE POLICY PROCEEDS ARE:
1. THE DEATH BENEFIT UNDER THE CONTRACT TYPE THEN IN EFFECT; PLUS
2. THE MONTHLY COST OF INSURANCE FOR THE PORTION OF THE POLICY MONTH FROM
THE DATE OF THE LAST INSURED'S DEATH TO THE END OF THE POLICY MONTH OF
THAT DEATH; MINUS
3. ANY PAYMENT DUE UNDER THE GRACE PERIOD PROVISION AS OF THE DATE OF THE
LAST INSURED'S DEATH; MINUS
4. ANY LOAN AND LOAN INTEREST DUE.
DEATH BENEFIT PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH BENEFIT DEPENDS UPON THE
CONTRACT TYPE IN EFFECT ON THE DATE OF THE LAST INSURED'S DEATH. THE CONTRACT TYPE
IN EFFECT IS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
OPTION A CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT PLUS THE CASH VALUE ON THE DATE OF THE LAST INSURED'S
DEATH; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE CASH VALUE ON THE DATE OF THE LAST INSURED'S DEATH MULTIPLIED BY THE
YOUNGER INSURED'S APPLICABLE ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
NOTWITHSTANDING ANYTHING IN THIS POLICY, THE DEATH BENEFIT WILL IN NO CASE BE LESS
THAN THE AMOUNT NECESSARY TO CAUSE THE POLICY TO MEET THE REQUIREMENTS FOR THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
APPLICABLE THE PERCENTAGES AS CURRENTLY DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
PERCENTAGE: CODE OF 1986 AND MODIFIED FOR AGES 95 AND ABOVE ARE AS FOLLOWS:
<CAPTION>
IN THE CASE IN WHICH THE YOUNGER THE APPLICABLE PERCENTAGE WILL
INSURED'S ATTAINED AGE AS OF THE DECREASE BY A RATABLE PORTION
BEGINNING OF THE CONTRACT YEAR IS: FOR EACH FULL YEAR:
MORE THAN: BUT NOT MORE THAN: FROM: TO:
<S> <C> <C> <C>
0 40 250 250
40 45 250 215
45 50 215 185
50 55 185 150
55 60 150 130
60 65 130 120
65 70 120 115
70 75 115 105
75 90 105 105
90 95 105 101
95 OR 101
HIGHER
104010NP 4.01
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<PAGE> 16
<C> <S>
CONTINUATION IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH
OF THE POLICY BENEFIT WILL BE 101% OF THE POLICY'S CASH VALUE.
BEYOND ATTAINED
AGE 100 PLEASE NOTE: THIS POLICY MAY NOT QUALIFY AS LIFE INSURANCE AFTER THE YOUNGER
INSURED'S ATTAINED AGE 100 AND MAY BE SUBJECT TO TAX CONSEQUENCES. PLEASE CONSULT A
TAX ADVISER PRIOR TO CONTINUING THE POLICY BEYOND THE YOUNGER INSURED'S ATTAINED
AGE 100. IT IS POSSIBLE THAT INSURANCE COVERAGE MAY NOT CONTINUE EVEN IF PLANNED
PREMIUMS ARE PAID IN A TIMELY MANNER.
POLICY CHANGES YOU MAY REQUEST POLICY CHANGES AT ANY TIME UNLESS WE SPECIFICALLY INDICATE
OTHERWISE. WE LIMIT THE NUMBER OF CHANGES TO ONE PER POLICY YEAR, AND WE DO NOT
PERMIT CHANGES IN THE FIRST POLICY YEAR. THE TYPES OF CHANGES ALLOWED ARE EXPLAINED
BELOW.
NO CHANGE WILL BE PERMITTED THAT WOULD RESULT IN THIS POLICY NOT SATISFYING THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
FACE AMOUNT THE FACE AMOUNT MAY BE DECREASED BY SENDING US A WRITTEN REQUEST.
DECREASES
ANY DECREASE IN FACE AMOUNT WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. THE FACE AMOUNT REMAINING IN FORCE AFTER ANY REQUESTED DECREASE MAY NOT BE
LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE.
3. ANY DECREASE MUST BE AT LEAST THE MINIMUM FACE AMOUNT DECREASE AS SHOWN ON
THE POLICY SPECIFICATIONS PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT AS EXPLAINED IN THE
SURRENDER CHARGE PROVISION.
WE WILL AMEND YOUR POLICY TO SHOW THE EFFECTIVE DATE OF THE DECREASE.
YOU MAY NOT INCREASE THE FACE AMOUNT OF THIS POLICY.
CHANGE IN IF THE CONTRACT TYPE IN EFFECT IS OPTION A OR OPTION B, YOU MAY CHANGE THE CONTRACT
CONTRACT TYPE TYPE BY SENDING US A WRITTEN REQUEST. THE EFFECTIVE DATE OF THE CHANGE WILL BE THE
MONTHLY ANNIVERSARY ON OR FOLLOWING THE DATE WE RECEIVE YOUR REQUEST. ON THE
EFFECTIVE DATE OF THIS CHANGE THE DEATH BENEFIT PAYABLE DOES NOT CHANGE, BUT THE
FACE AMOUNT MAY CHANGE.
IF THE CONTRACT TYPE IN EFFECT IS OPTION B, YOU MAY CHANGE IT TO OPTION A. THE FACE
AMOUNT WILL BE INCREASED TO EQUAL THE DEATH BENEFIT ON THE EFFECTIVE DATE OF
CHANGE. THE CONTRACT TYPE CANNOT BE CHANGED FROM OPTION B TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION A, YOU MAY CHANGE IT TO OPTION B. PROOF
THAT THE INSUREDS ARE INSURABLE BY OUR STANDARDS ON THE DATE OF THE CHANGE MUST BE
SUBMITTED. THE FACE AMOUNT WILL BE DECREASED TO EQUAL THE DEATH BENEFIT LESS THE
CASH VALUE ON THE EFFECTIVE DATE OF CHANGE. THIS CHANGE MAY NOT BE MADE IF IT WOULD
RESULT IN A FACE AMOUNT WHICH IS LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE
POLICY SPECIFICATIONS PAGE. A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE
AMOUNT AS EXPLAINED IN THE SURRENDER CHARGE PROVISION. THE CONTRACT TYPE CANNOT BE
CHANGED FROM OPTION A TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION C, THE CONTRACT TYPE CANNOT BE CHANGED.
104010NP 4.02
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<PAGE> 17
<CAPTION>
6. PREMIUMS AND GRACE PERIOD
<C> <S>
PAYMENT OF YOUR FIRST PREMIUM IS DUE AS OF THE ISSUE DATE. WHILE EITHER INSURED IS LIVING,
PREMIUMS PREMIUMS AFTER THE FIRST MUST BE PAID AT OUR HOME OFFICE. A PREMIUM RECEIPT WILL BE
FURNISHED UPON REQUEST. IF THIS POLICY IS IN YOUR POSSESSION AND YOU HAVE NOT PAID
THE FIRST PREMIUM, IT IS NOT IN FORCE. IT WILL BE CONSIDERED THAT YOU HAVE THE
POLICY FOR INSPECTION ONLY.
PREMIUMS MAY BE PAID IN ANY AMOUNT AND AT ANY INTERVAL SUBJECT TO THE FOLLOWING
CONDITIONS:
1. AT THE END OF THE FIRST POLICY YEAR, YOUR TOTAL PREMIUM PAYMENTS FOR THIS
POLICY MUST BE GREATER THAN OR EQUAL TO THE MINIMUM INITIAL ANNUAL PREMIUM
AMOUNT AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. ANY SUBSEQUENT PREMIUM PAYMENT MUST BE AT LEAST $10.00.
3. TOTAL PREMIUMS PAID IN ANY POLICY YEAR FOR POLICIES ISSUED WITH THE OPTION
A OR B CONTRACT TYPE MAY NOT EXCEED AN AMOUNT THAT WOULD CAUSE THE
POLICY TO FAIL THE DEFINITION OF LIFE INSURANCE AS DEFINED BY SECTION
7702 OF THE INTERNAL REVENUE CODE OF 1986, OR ANY APPLICABLE SUCCESSOR
PROVISION THERETO. THE MAXIMUM PREMIUM LIMIT FOR THE FOLLOWING POLICY
YEAR WILL BE SHOWN ON YOUR ANNUAL REPORT.
ON ANY DATE THAT WE RECEIVE A PREMIUM WHICH CAUSES THE DEATH BENEFIT UNDER ANY OF
THE CONTRACT TYPES TO INCREASE BY AN AMOUNT THAT EXCEEDS THAT PREMIUM RECEIVED, WE
RESERVE THE RIGHT TO REFUSE THAT PREMIUM PAYMENT. WE MAY REQUIRE ADDITIONAL
EVIDENCE OF INSURABILITY BEFORE WE ACCEPT THE PREMIUM.
NET PREMIUM THE NET PREMIUM IS:
1. THE PREMIUM PAID; MINUS
2. THE PREMIUM PAID MULTIPLIED BY THE PREMIUM TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
3. THE PREMIUM PAID MULTIPLIED BY THE FEDERAL TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
4. THE PREMIUM PAID MULTIPLIED BY THE APPLICABLE PERCENT OF PREMIUM CHARGE.
PREMIUM TAX A CHARGE WILL BE DEDUCTED FOR PREMIUM TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE PREMIUM TAX CHARGE DUE TO RATE CHANGES OF
THE GOVERNING JURISDICTION. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT PREMIUM
TAX RATE, IF CHANGED.
FEDERAL TAX A CHARGE WILL BE DEDUCTED FOR FEDERAL TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE FEDERAL TAX CHARGE TO REFLECT A CHANGE IN
THE FEDERAL TAX LAW. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT FEDERAL TAX
CHARGE, IF CHANGED.
PERCENT OF A CHARGE WILL BE DEDUCTED FROM EACH PREMIUM SUBMITTED. THE MAXIMUM PERCENT OF
PREMIUM CHARGE PREMIUM CHARGES ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
THE PERCENT OF PREMIUM CHARGE WILL VARY, ON A NON-DISCRIMINATORY BASIS, BASED ON
THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM PERCENT OF PREMIUM
CHARGES SHOWN ON THE POLICY SPECIFICATIONS PAGE.
104010NP 4.03
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<PAGE> 18
ALLOCATION OF YOU DETERMINE THE ALLOCATION OF NET PREMIUMS AMONG THE GENERAL ACCOUNT AND THE
NET PREMIUMS DIVISIONS OF SEPARATE ACCOUNT ELEVEN. FOR ANY CHOSEN ALLOCATION THE MINIMUM
PERCENTAGE THAT MAY BE ALLOCATED IS 5% OF THE NET PREMIUM. PERCENTAGES MUST BE IN
WHOLE NUMBERS. THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER PAYMENT OF THE
PREMIUM CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THE INITIAL ALLOCATION IS SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. WE
MAY MODIFY THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AT ANY TIME.
FOR ANY PREMIUM RECEIVED DURING THE "RIGHT TO EXAMINE POLICY" PERIOD, WE WILL
INITIALLY ALLOCATE THE NET PREMIUM TO THE DIVISION THAT INVESTS EXCLUSIVELY IN
SHARES OF OUR MONEY MARKET FUND UNLESS PROHIBITED BY STATE LAW. WHEN THIS PERIOD
EXPIRES, CASH VALUE IN THAT DIVISION WILL BE TRANSFERRED TO THE GENERAL ACCOUNT AND
THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE ALLOCATION PERCENTAGES
SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. FOR ANY PREMIUM RECEIVED
AFTER THE "RIGHT TO EXAMINE POLICY" PERIOD, THE NET PREMIUM WILL BE ALLOCATED
ACCORDING TO THE ALLOCATION PERCENTAGES SHOWN ON THE POLICY SPECIFICATIONS PAGE OR
YOUR MOST RECENT ALLOCATION INSTRUCTIONS RECEIVED BY US.
YOUR RIGHT YOU MAY CHANGE THE ALLOCATION OF FUTURE NET PREMIUMS AMONG THE GENERAL ACCOUNT
TO CHANGE AND/OR THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN SUBJECT TO THE CONDITIONS OUTLINED
ALLOCATION IN THE ALLOCATION OF THE NET PREMIUMS PROVISION. THE CHANGE IN ALLOCATION
PERCENTAGES WILL TAKE EFFECT IMMEDIATELY UPON OUR RECEIPT OF YOUR WRITTEN REQUEST.
NO-LAPSE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE, THE SUM OF ALL
PREMIUMS PAID ON THIS 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, THIS POLICY WILL NOT
LAPSE AS A RESULT OF A CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY
SURRENDER CHARGE BEING INSUFFICIENT TO PAY THE MONTHLY DEDUCTION. THE NO LAPSE
PREMIUM DATE AND THE NO LAPSE ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THE NO LAPSE MONTHLY PREMIUM IS ONE TWELFTH OF THE NO LAPSE ANNUAL PREMIUM.
GRACE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE:
1. THE CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE
IS INSUFFICIENT TO COVER THE MONTHLY DEDUCTION; AND
2. THE SUM OF ALL PREMIUMS PAID ON THIS POLICY, REDUCED BY ANY PARTIAL
WITHDRAWALS AND ANY OUTSTANDING LOAN BALANCE, IS LESS THAN THE SUM OF
THE NO LAPSE MONTHLY PREMIUMS FOR THE ELAPSED MONTHS SINCE THE ISSUE
DATE;
THEN THE GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR THE PAYMENT OF A PREMIUM
SUFFICIENT TO KEEP YOUR POLICY IN FORCE. THE NO LAPSE PREMIUM DATE AND THE NO LAPSE
ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
A CHANGE IN YOUR POLICY'S FACE AMOUNT, THE ADDITION OR DELETION OF A SUPPLEMENTAL
RIDER TO THIS POLICY, OR A CHANGE IN THE PREMIUM CLASS OF THE INSUREDS BEFORE THE
NO LAPSE PREMIUM DATE SHOWN ON THE POLICY SPECIFICATIONS PAGE MAY RESULT IN A
CHANGE IN THE NO LAPSE MONTHLY PREMIUM. THE NO LAPSE PREMIUM DATE WILL NOT BE
---
CHANGED.
IF, ON A MONTHLY ANNIVERSARY DAY ON OR AFTER THE NO LAPSE PREMIUM DATE, THE CASH
VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE IS INSUFFICIENT
TO COVER THE NEXT MONTHLY DEDUCTION, A GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR
THE PAYMENT OF A PREMIUM SUFFICIENT TO PAY THE MONTHLY DEDUCTION. (MONTHLY
DEDUCTION IS DEFINED IN THE CASH VALUES SECTION.)
104010NP 4.04
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<PAGE> 19
NOTICE OF THE AMOUNT OF PREMIUM REQUIRED TO BE PAID TO KEEP THIS POLICY IN FORCE
WILL BE SENT AT THE BEGINNING OF THE GRACE PERIOD TO YOUR LAST KNOWN ADDRESS AND TO
ANY ASSIGNEE ON RECORD. IF WE DO NOT RECEIVE A PREMIUM LARGE ENOUGH SO THAT THE NET
PREMIUM COVERS THE MONTHLY DEDUCTION BY THE END OF THE GRACE PERIOD, YOUR POLICY
WILL LAPSE AT THE END OF THAT 62 DAY PERIOD AND IT WILL THEN TERMINATE WITHOUT CASH
SURRENDER VALUE. IF THE LAST INSURED DIES DURING THE GRACE PERIOD, ANY PAST DUE
MONTHLY DEDUCTIONS WILL BE DEDUCTED FROM THE DEATH BENEFIT.
REINSTATEMENT YOU MAY REINSTATE YOUR LAPSED POLICY WITHIN 5 YEARS AFTER THE DATE OF LAPSE. THIS
MUST BE DONE PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100. THE POLICY CAN NOT BE
REINSTATED IF IT HAS BEEN SURRENDERED. TO REINSTATE, YOU MUST SUBMIT THE FOLLOWING
ITEMS:
1. A WRITTEN REQUEST FOR REINSTATEMENT.
2. PROOF SATISFACTORY TO US THAT BOTH INSUREDS ARE INSURABLE BY OUR
STANDARDS, IF BOTH INSUREDS WERE ALIVE ON THE DATE THE POLICY LAPSED. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, YOU MUST
SUBMIT PROOF SATISFACTORY TO US THAT THAT INSURED IS INSURABLE BY OUR
STANDARDS.
3. A NET PREMIUM PAYMENT 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.
4. A PAYMENT TO COVER ANY LOAN INTEREST DUE AND UNPAID AT THE TIME OF LAPSE.
UPON RECEIPT OF THE ABOVE PAYMENTS, WE WILL DEDUCT ANY MONTHLY DEDUCTIONS AND LOAN
INTEREST DUE AND UNPAID AT THE TIME OF LAPSE. IF BOTH INSUREDS WERE ALIVE ON THE
DATE THE POLICY LAPSED, BOTH MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR
REINSTATEMENT. IF EITHER INSURED IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO
EFFECT. IF ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, THAT INSURED
MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR REINSTATEMENT. IF THAT INSURED
IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO EFFECT.
THE REINSTATED POLICY WILL BE IN FORCE FROM THE DATE WE APPROVE THE REINSTATEMENT
APPLICATION. THERE WILL BE A FULL MONTHLY DEDUCTION FOR THE POLICY MONTH WHICH
INCLUDES THIS DATE. ANY APPLICATION FOR REINSTATEMENT BECOMES PART OF THE CONTRACT
OF REINSTATEMENT AND OF THIS POLICY.
ANY LOAN MAY BE PAID OR REINSTATED. ANY LOAN REINSTATED WILL CAUSE A CASH VALUE OF
AN EQUAL AMOUNT TO BE REINSTATED.
ANY LOAN REPAID AT THE TIME OF REINSTATEMENT WILL CAUSE AN INCREASE IN CASH VALUE
EQUAL TO THE AMOUNT OF THE REPAID LOAN.
THE SURRENDER CHARGE AT THE TIME OF REINSTATEMENT WILL BE THE SURRENDER CHARGE IN
EFFECT AT THE TIME OF LAPSE. IF ONLY A PORTION OF THE COVERAGE IS REINSTATED THEN
ONLY THE APPLICABLE PORTION OF THE SURRENDER CHARGE WILL BE REINSTATED. IF ONLY A
PORTION OF THE COVERAGE IS REINSTATED, THE CASH VALUE FOLLOWING REINSTATEMENT WILL
BE INCREASED BY THE APPLICABLE PORTION OF THE SURRENDER CHARGE IMPOSED AT THE TIME
OF LAPSE.
FOLLOWING REINSTATEMENT, THE NO-LAPSE PERIOD PROVISION WILL AGAIN BE APPLICABLE
UNTIL THE NO-LAPSE PREMIUM DATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, IF
SUFFICIENT PREMIUM IS PAID SO THAT, AS OF THE EFFECTIVE DATE OF REINSTATEMENT, THE
SUM OF ALL PREMIUMS PAID, REDUCED BY ANY PARTIAL WITHDRAWALS AND ANY LOANS, IS
GREATER THAN THE NO-LAPSE MONTHLY PREMIUMS MULTIPLIED BY THE NUMBER OF ELAPSED
MONTHS SINCE THE ISSUE DATE.
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<CAPTION>
7. LOANS
<S> <C>
UPON WRITTEN REQUEST TO US, YOU MAY BORROW AN AMOUNT NOT IN EXCESS OF THE LOAN
VALUE OF YOUR POLICY WHILE IT IS IN FORCE. THE MINIMUM AMOUNT OF YOUR NET LOAN
REQUEST AT ANY ONE TIME MUST BE AT LEAST $500. YOUR POLICY WILL BE THE SOLE
SECURITY FOR SUCH LOAN. WE HAVE THE RIGHT TO REQUIRE YOUR POLICY FOR ENDORSEMENT.
THE LOAN VALUE IS THE CASH VALUE OF YOUR POLICY AT THE DATE OF THE LOAN REQUEST
PLUS INTEREST TO THE NEXT POLICY ANNIVERSARY AT THE GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, REDUCED BY:
1. ANY EXISTING LOANS; AND
2. LOAN INTEREST TO THE NEXT LOAN INTEREST DUE DATE; AND
3. EVERY MONTHLY DEDUCTION DUE TO THE NEXT LOAN INTEREST DUE DATE; AND
4. ANY SURRENDER CHARGES.
YOU MAY ALLOCATE THE POLICY LOAN AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE POLICY LOAN
WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT, AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT, ON THE DATE OF THE POLICY LOAN.
CASH VALUE EQUAL TO THE POLICY LOAN ALLOCATED TO THE GENERAL ACCOUNT AND EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN WILL BE TRANSFERRED TO THE LOAN ACCOUNT,
REDUCING THE CASH VALUE ACCORDINGLY. ANY CASH VALUE TRANSFERRED TO THE LOAN ACCOUNT
WILL BE ALLOCATED TO THE APPROPRIATE LOAN SUBACCOUNT.
LOAN INTEREST THE ACCRUED LOAN INTEREST WILL BE DUE THE EARLIEST OF:
DUE DATE
1. THE NEXT POLICY ANNIVERSARY DATE.
2. THE DATE OF TERMINATION OF THE POLICY.
3. THE DATE THE LOAN IS REPAID IN FULL.
4. THE DATE THE LOAN PLUS LOAN INTEREST ACCRUED EXCEEDS THE CASH VALUE LESS
ANY SURRENDER CHARGES.
INTEREST WILL BE PAYABLE ANNUALLY ON EACH POLICY ANNIVERSARY. IF YOU DO NOT PAY THE
INTEREST WHEN IT IS DUE ON A POLICY ANNIVERSARY, AN AMOUNT OF CASH VALUE EQUAL TO
THE LOAN INTEREST WILL ALSO BE TRANSFERRED TO THE LOAN ACCOUNT. WE WILL CHARGE THE
SAME RATE OF INTEREST ON THIS AMOUNT AS ON THE POLICY LOAN. THE AMOUNT TRANSFERRED
WILL BE DEDUCTED FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT.
FIXED LOAN THE FIXED LOAN INTEREST RATE IS 4.5% FOR POLICY YEARS 1 THROUGH 10, 4.25% FOR
INTEREST RATES POLICY YEARS 11 THROUGH 20 AND 4.15% FOR POLICY YEARS 21 AND LATER. LOAN INTEREST
IS PAYABLE IN ARREARS.
LOAN ALL FUNDS RECEIVED WILL BE CREDITED TO YOUR POLICY AS A PREMIUM UNLESS CLEARLY
REPAYMENTS MARKED FOR LOAN REPAYMENT.
YOU MAY REPAY YOUR LOAN IN WHOLE OR IN PART AT ANY TIME BEFORE THE DEATH OF THE
LAST INSURED WHILE THE POLICY IS IN FORCE. WHEN A LOAN REPAYMENT IS MADE, CASH
VALUE SECURING THE DEBT IN THE LOAN ACCOUNT EQUAL TO THE LOAN REPAYMENT WILL BE
REPAID TO THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE
SAME PROPORTION THAT THE CASH VALUE IN THE LOAN ACCOUNT BEARS TO THE CASH VALUE IN
EACH LOAN SUBACCOUNT. UNPAID LOANS AND LOAN INTEREST WILL BE DEDUCTED FROM ANY
SETTLEMENT OF YOUR POLICY.
106008NP 6.01
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<PAGE> 21
IF YOU FAIL TO MAKE REPAYMENTS WHEN THE TOTAL LOAN AND LOAN INTEREST DUE WOULD
EXCEED THE CASH VALUE, LESS ANY SURRENDER CHARGES, YOUR POLICY WILL TERMINATE. WE
WILL ALLOW YOU A GRACE PERIOD FOR SUCH PAYMENT OF LOANS AND LOAN INTEREST DUE. IN
SUCH EVENT THE POLICY BECOMES VOID AT THE END OF THE GRACE PERIOD. WE WILL MAIL
NOTICE TO YOUR LAST KNOWN ADDRESS, AND THAT OF ANY ASSIGNEE OF RECORD. THIS GRACE
PERIOD WILL EXPIRE 62 DAYS FROM THE MONTHLY ANNIVERSARY IMMEDIATELY BEFORE THE DATE
THE TOTAL LOAN AND LOAN INTEREST EXCEEDS THE CASH VALUE LESS ANY SURRENDER CHARGES;
OR 31 DAYS AFTER SUCH NOTICE HAS BEEN MAILED, IF LATER.
<CAPTION>
8. CASH VALUES
<C> <S>
CASH VALUE THE CASH VALUE OF YOUR POLICY IS EQUAL TO THE TOTAL OF:
- THE CASH VALUE IN THE GENERAL ACCOUNT; PLUS
- THE CASH VALUE IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN; PLUS
- THE CASH VALUE IN THE LOAN ACCOUNT.
CASH VALUE IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE CASH
AFTER ATTAINED VALUE OF YOUR POLICY WILL BE DETERMINED IN THE SAME MANNER AS DESCRIBED BELOW;
AGE 100 EXCEPT NO DEDUCTIONS WILL BE MADE FOR MONTHLY COST OF INSURANCE CHARGES. PREMIUMS
CAN NOT BE PAID AFTER THE YOUNGER INSURED ATTAINS AGE 100.
GENERAL ACCOUNT THE CASH VALUE IN THE GENERAL ACCOUNT AS OF THE INVESTMENT START DATE IS EQUAL TO:
CASH VALUE
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
GENERAL ACCOUNT; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE GENERAL ACCOUNT.
THE CASH VALUE IN THE GENERAL ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE ON THE PRECEDING VALUATION DATE, WITH INTEREST ON SUCH
VALUE AT THE CURRENT RATE; PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE GENERAL ACCOUNT
ON THAT DAY; PLUS
- ANY AMOUNTS TRANSFERRED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY AMOUNT TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE GENERAL ACCOUNT
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM
THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED ON THAT DAY ATTRIBUTED TO THE
GENERAL ACCOUNT; MINUS
- ANY AMOUNT TRANSFERRED FROM THE GENERAL ACCOUNT TO THE LOAN ACCOUNT ON
THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, ANY WITHDRAWAL DUE TO A PRO RATA
SURRENDER PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM THE GENERAL
ACCOUNT ON THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, THE PORTION OF THE MONTHLY DEDUCTION
CHARGED TO THE GENERAL ACCOUNT, TO COVER THE POLICY MONTH WHICH STARTS ON
THAT DAY.
106008NP 6.02
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<PAGE> 22
GENERAL ACCOUNT THE INTEREST CREDITED TO THE GENERAL ACCOUNT CASH VALUE FOR A SPECIFIC DAY WILL BE
INTEREST RATE AT AN EFFECTIVE ANNUAL RATE NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED
INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
SEPARATE ACCOUNT THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON THE INVESTMENT START
CASH VALUE DATE IS EQUAL TO:
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
DIVISION; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE DIVISION.
THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON SUBSEQUENT VALUATION
DATES IS EQUAL TO:
- THE CASH VALUE IN THE DIVISION ON THE PRECEDING VALUATION DATE MULTIPLIED
BY THAT DIVISION'S NET INVESTMENT FACTOR FOR THE CURRENT VALUATION PERIOD;
PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE DIVISION DURING
THE CURRENT VALUATION PERIOD; PLUS
- ANY AMOUNTS TRANSFERRED TO THE DIVISION FROM THE GENERAL ACCOUNT OR FROM
ANOTHER DIVISION DURING THE CURRENT VALUATION PERIOD; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION
PERIOD; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY AMOUNTS TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE DIVISION DURING
THE CURRENT VALUATION PERIOD; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE FROM THE
DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED DURING THE CURRENT VALUATION
PERIOD ATTRIBUTED TO THE DIVISION; MINUS
- ANY AMOUNT TRANSFERRED FROM THE DIVISION TO THE LOAN ACCOUNT DURING THAT
VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, ANY
WITHDRAWAL DUE TO A PRO RATA SURRENDER PLUS ANY WITHDRAWAL TRANSACTION
CHARGE FROM THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE MONTHLY DEDUCTION CHARGED TO THE DIVISION DURING THE
CURRENT VALUATION PERIOD TO COVER THE POLICY MONTH WHICH STARTS DURING
THAT VALUATION PERIOD.
NET INVESTMENT THE NET INVESTMENT FACTOR MEASURES THE INVESTMENT PERFORMANCE OF A DIVISION DURING
FACTOR A VALUATION PERIOD. THE NET INVESTMENT FACTOR FOR EACH DIVISION FOR A VALUATION
PERIOD IS CALCULATED AS FOLLOWS:
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD; PLUS
- 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
- THE CAPITAL LOSSES---REALIZED OR UNREALIZED---CHARGED AGAINST THOSE
ASSETS DURING THE VALUATION PERIOD; MINUS
- ANY AMOUNT CHARGED AGAINST EACH DIVISION FOR TAXES, INCLUDING ANY TAX OR
OTHER ECONOMIC BURDEN RESULTING FROM THE APPLICATION OF TAX LAWS THAT WE
DETERMINE TO BE PROPERLY ATTRIBUTABLE TO THE DIVISIONS OF THE SEPARATE
ACCOUNT, OR ANY AMOUNT WE SET ASIDE DURING THE VALUATION PERIOD AS A
RESERVE FOR TAXES ATTRIBUTABLE TO THE OPERATION OR MAINTENANCE OF EACH
DIVISION; MINUS
106008NP 6.03
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<PAGE> 23
- A CHARGE NOT TO EXCEED THE DAILY INVESTMENT PERCENTAGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE FOR EACH DAY IN THE VALUATION PERIOD. THIS
CORRESPONDS TO AN ANNUAL INVESTMENT PERCENTAGE OF THE MORTALITY AND
EXPENSE RISK PERCENTAGE SHOWN ON THE POLICY SPECIFICATIONS PAGE;
DIVIDED BY
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD.
LOAN ACCOUNT THE CASH VALUE IN THE LOAN ACCOUNT AS OF THE INVESTMENT START DATE IS ZERO.
CASH VALUE
THE CASH VALUE IN THE LOAN ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE IN THE LOAN ACCOUNT ON THE PRECEDING VALUATION DATE, WITH
INTEREST; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE GENERAL ACCOUNT ON
THAT DAY; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY LOAN REPAYMENTS ON THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, AN AMOUNT DUE TO COVER THE LOAN
INTEREST, IF NOT PAID BY YOU.
CASH VALUE HELD IN THE LOAN ACCOUNT FOR LOAN COLLATERAL WILL EARN INTEREST DAILY AT
AN ANNUAL RATE OF NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST
RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE. INTEREST CREDITED ON THE CASH VALUE
HELD IN THE LOAN ACCOUNT WILL BE ALLOCATED AT LEAST ONCE A YEAR TO THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN EACH LOAN SUBACCOUNT BEARS TO THE CASH VALUE IN THE LOAN ACCOUNT.
MONTHLY COST THE MONTHLY COST OF INSURANCE FOR THE FOLLOWING MONTH IS DEDUCTED ON THE MONTHLY
OF INSURANCE ANNIVERSARY DATE. THE MONTHLY COST OF INSURANCE IS 1, BELOW, MULTIPLIED BY THE
DIFFERENCE BETWEEN 2 AND 3 BELOW:
1. THE MONTHLY COST OF INSURANCE RATE DIVIDED BY 1,000.
2. AN AMOUNT AS FOLLOWS:
OPTION A CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE PLUS THE CASH VALUE AT THE BEGINNING
OF THE POLICY MONTH; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
YOUNGER INSURED'S ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S DEATH
BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
3. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH, BEFORE THE DEDUCTION
OF THE MONTHLY COST OF INSURANCE.
106008NP 6.04
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<PAGE> 24
MONTHLY COST AT THE BEGINNING OF EACH POLICY YEAR, THE MONTHLY COST OF INSURANCE RATE IS
OF INSURANCE DETERMINED. THE MONTHLY COST OF INSURANCE RATE IS BASED ON THE ATTAINED AGES, RISK
RATES CLASSIFICATIONS, SEXES AND COMPLETED POLICY YEARS FROM THE ISSUE DATE.
THE MONTHLY COST OF INSURANCE RATES WILL NEVER EXCEED THE RATES SHOWN ON THE TABLE
OF GUARANTEED MONTHLY COST OF INSURANCE RATES PAGE. ANY CHANGE IN THE COST OF
INSURANCE RATES WILL APPLY TO ALL PERSONS OF THE SAME AGE, SEX, AND CLASSIFICATION
WHOSE FACE AMOUNTS HAVE BEEN IN FORCE FOR THE SAME LENGTH OF TIME.
SELECTION AND THE SELECTION AND ISSUE EXPENSE CHARGE IS A MONTHLY CHARGE FOR THE FIRST 10 POLICY
ISSUE EXPENSE YEARS. THIS CHARGE EQUALS THE FACE AMOUNT TIMES A SELECTION AND ISSUE EXPENSE
CHARGE CHARGE RATE, DIVIDED BY 1,000. THE SELECTION AND ISSUE EXPENSE CHARGE IS BASED ON
THE INSUREDS' ISSUE AGES, SEXES AND RISK CLASSIFICATIONS ON THE ISSUE DATE. THE
SELECTION AND ISSUE EXPENSE CHARGE RATE WILL NEVER EXCEED THE MAXIMUM SELECTION AND
ISSUE EXPENSE CHARGE RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
MONTHLY POLICY A POLICY CHARGE WILL BE DEDUCTED EACH POLICY MONTH FROM THE CASH VALUE. THE AMOUNT
CHARGE OF THE MONTHLY POLICY CHARGE WILL NEVER EXCEED THE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
MONTHLY THE MONTHLY DEDUCTION IS:
DEDUCTION
1. THE MONTHLY COST OF INSURANCE; PLUS
2. THE SELECTION AND ISSUE EXPENSE CHARGE MULTIPLIED BY THE FACE AMOUNT
DIVIDED BY 1,000; PLUS
3. THE MONTHLY POLICY CHARGE; PLUS
4. THE MONTHLY COST, IF ANY, FOR ANY RIDER INCLUDED WITH THIS POLICY.
THE MONTHLY DEDUCTION FOR A POLICY MONTH WILL BE ALLOCATED AMONG THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO
THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN LOAN ACCOUNT ON THE
MONTHLY ANNIVERSARY.
CASH SURRENDER THE CASH SURRENDER VALUE OF THIS POLICY IS:
VALUE
1. THE CASH VALUE AT THE TIME OF SURRENDER; MINUS
2. ANY LOAN AND LOAN INTEREST ACCRUED; MINUS
3. ANY UNPAID SELECTION AND ISSUE EXPENSE CHARGE DUE FOR THE REMAINDER OF THE
FIRST POLICY YEAR; MINUS
4. ANY UNPAID MONTHLY POLICY CHARGE DUE FOR THE REMAINDER OF THE FIRST POLICY
YEAR; MINUS
5. ANY SURRENDER CHARGE.
SURRENDER YOU MAY SURRENDER YOUR POLICY FOR ITS CASH SURRENDER VALUE AT ANY TIME DURING THE
LIFETIME OF EITHER INSURED. WE WILL DETERMINE THE CASH SURRENDER VALUE AS OF THE
DATE WE RECEIVE YOUR WRITTEN REQUEST AT OUR HOME OFFICE. THE CASH SURRENDER VALUE
WILL NOT BE REDUCED BY ANY MONTHLY DEDUCTION DUE ON THAT DATE FOR A SUBSEQUENT
POLICY MONTH.
PARTIAL AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PARTIAL
WITHDRAWALS WITHDRAWAL OF CASH SUBJECT TO THE CONDITIONS LISTED BELOW. THE FIRST 12 REQUESTED
PARTIAL WITHDRAWALS OR TRANSFERS PER POLICY YEAR WILL BE ALLOWED FREE OF CHARGE;
THEREAFTER WE MAY IMPOSE A TRANSFER CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER
CHARGE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
NO PARTIAL WITHDRAWAL WILL BE PROCESSED WHICH WILL RESULT IN THE FACE AMOUNT,
EXCLUDING RIDERS, BEING DECREASED BELOW THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
106008NP 6.05
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<PAGE> 25
WE RESERVE THE RIGHT TO CHANGE THE MINIMUM AMOUNT OR THE NUMBER OF TIMES YOU MAY
MAKE A PARTIAL WITHDRAWAL. WE ALSO MAY ASSESS A TRANSACTION CHARGE FOR A
WITHDRAWAL.
IF THE CONTRACT TYPE IS OPTION A OR OPTION C 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. THIS SURRENDER
CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE PARTIAL WITHDRAWAL WAS ALLOCATED
AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF THE
DEATH BENEFIT EQUALS A PERCENTAGE OF THE CASH VALUE THEN A PARTIAL WITHDRAWAL WILL
DECREASE THE FACE AMOUNT BY ANY AMOUNT BY WHICH THE PARTIAL WITHDRAWAL PLUS THE
APPLICABLE SURRENDER CHARGE EXCEEDS THE DIFFERENCE BETWEEN THE DEATH BENEFIT AND
THE FACE AMOUNT.
GENERAL ACCOUNT THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST BE AT
PARTIAL LEAST $500 OF YOUR ACCOUNT.
WITHDRAWALS
- THE MAXIMUM AMOUNT OF ALL PARTIAL WITHDRAWALS AND TRANSFERS FROM THE
GENERAL ACCOUNT IN A POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE WITHDRAWAL PERCENTAGE LIMIT, AS
SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
SEPARATE ACCOUNT - THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST
PARTIAL BE THE LESSER OF $500 OF A DIVISION OR YOUR ENTIRE BALANCE IN THAT
WITHDRAWALS DIVISION.
- THE MAXIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL FROM ANY ONE OF THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN A POLICY YEAR WILL BE THE CASH
SURRENDER VALUE OF THAT DIVISION.
ALLOCATION YOU MAY ALLOCATE THE PARTIAL WITHDRAWAL PLUS ANY APPLICABLE SURRENDER CHARGE,
OF PARTIAL SUBJECT TO THE ABOVE CONDITIONS, AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
WITHDRAWALS SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE PARTIAL
WITHDRAWAL WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL
ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE
POLICY, MINUS THE CASH VALUE IN THE LOAN ACCOUNT ON THE DATE OF THE PARTIAL
WITHDRAWAL. IF THE GENERAL ACCOUNT CONDITIONS WILL NOT ALLOW THIS PROPORTIONATE
ALLOCATION, WE WILL REQUEST THAT YOU SPECIFY AN ACCEPTABLE ALLOCATION.
PRO RATA AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PRO RATA
SURRENDER SURRENDER OF YOUR POLICY. THE PRO RATA SURRENDER CAN BE ANY WHOLE NUMBER PERCENTAGE
OF YOUR POLICY. THE PRO RATA SURRENDER WILL REDUCE THE FACE AMOUNT AND THE CASH
VALUE BY THE PERCENTAGE CHOSEN. THE FACE AMOUNT DECREASE WILL BE SUBJECT TO THE
FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. YOU MAY ALLOCATE THE DECREASE IN CASH VALUE DUE TO THE PRO RATA SURRENDER
PLUS ANY APPLICABLE SURRENDER CHARGE AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE
ALLOCATION, THEN THE DECREASE IN CASH VALUE PLUS ANY APPLICABLE
SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE
CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION
BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN THE
LOAN ACCOUNT ON THE DATE OF THE PRO RATA SURRENDER.
A PRO RATA SURRENDER CAN NOT BE PROCESSED IF IT WILL REDUCE THE FACE AMOUNT BELOW
THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE. 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 YOU FOR THE AMOUNT
OF CASH VALUE REDUCTION LESS ANY APPLICABLE SURRENDER CHARGES.
106008NP 6.06
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<PAGE> 26
SURRENDER CHARGE A SURRENDER CHARGE WILL APPLY UPON SURRENDER, UPON LAPSE, UPON A PARTIAL WITHDRAWAL
THAT REDUCES THE FACE AMOUNT, OR UPON A DECREASE IN FACE AMOUNT FOR UP TO 10 YEARS
FROM THE POLICY'S ISSUE DATE.
THE SURRENDER CHARGE IS THE TARGET ANNUAL PREMIUM (BASE ONLY), SHOWN ON THE POLICY
SPECIFICATIONS PAGE, MULTIPLIED BY THE APPLICABLE SURRENDER CHARGE PERCENTAGE. THE
SURRENDER CHARGE PERCENTAGE WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
THE SURRENDER CHARGES FOR THIS POLICY WILL VARY ON A NON-DISCRIMINATORY BASIS, BASED
ON THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT. A DECREASE IN FACE
AMOUNT MAY DECREASE SOME OR ALL OF THE INITIAL FACE AMOUNT AS PROVIDED IN SECTION
5. A PARTIAL WITHDRAWAL MAY CAUSE A DECREASE IN FACE AMOUNT AS PROVIDED ABOVE AND,
THEREFORE, A SURRENDER CHARGE MAY BE TAKEN. IF THE FACE AMOUNT IS DECREASED BY SOME
FRACTION OF THE TOTAL FACE AMOUNT, THE SURRENDER CHARGE DEDUCTED WILL BE THE
PREVIOUSLY DEFINED SURRENDER CHARGE MULTIPLIED BY THE FRACTION.
THE SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE
GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE
OF THE POLICY MINUS THE CASH VALUE IN THE LOAN ACCOUNT.
POSTPONEMENT WE WILL USUALLY PAY ANY AMOUNTS PAYABLE ON SURRENDER, PARTIAL WITHDRAWAL, OR POLICY
OF PAYMENTS LOAN ALLOCATED TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN WITHIN SEVEN DAYS AFTER
OR TRANSFERS WRITTEN NOTICE IS RECEIVED. WE WILL USUALLY PAY ANY DEATH BENEFIT PROCEEDS UPON THE
LAST INSURED'S DEATH WITHIN SEVEN DAYS AFTER WE RECEIVE DUE PROOF OF CLAIM. PAYMENT
OF ANY AMOUNT PAYABLE, FROM THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN, ON SURRENDER,
PARTIAL WITHDRAWAL, POLICY LOAN OR DEATH MAY BE POSTPONED WHENEVER:
1. THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN CUSTOMARY WEEKEND AND
HOLIDAY CLOSING) 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 POLICY
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 NET ASSETS OF
SEPARATE ACCOUNT ELEVEN.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY AMOUNT PAYABLE FROM THE GENERAL ACCOUNT
ON SURRENDER, OR PARTIAL WITHDRAWAL FOR NOT MORE THAN SIX MONTHS. IF WE DEFER
PAYMENT FOR 30 DAYS OR MORE, WE WILL PAY INTEREST AT THE RATE OF 2 1/2% PER YEAR
FOR THE PERIOD OF DEFERMENT.
TRANSFERS MAY ALSO BE POSTPONED UNDER THE CIRCUMSTANCES LISTED ABOVE.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY POLICY LOAN FROM THE GENERAL ACCOUNT FOR
NOT MORE THAN SIX MONTHS. NO PAYMENT FROM THE GENERAL ACCOUNT TO PAY PREMIUMS ON
THIS POLICY WILL BE DEFERRED.
CONTINUATION IF ALL PREMIUM PAYMENTS CEASE, THE INSURANCE PROVIDED UNDER THIS POLICY, INCLUDING
OF INSURANCE BENEFITS PROVIDED BY ANY RIDER ATTACHED TO THIS POLICY, WILL CONTINUE IN ACCORDANCE
WITH THE PROVISIONS OF THIS POLICY FOR AS LONG AS THE CASH VALUE LESS ANY LOANS,
LOAN INTEREST ACCURED AND ANY SURRENDER CHARGE IS SUFFICIENT TO COVER THE MONTHLY
DEDUCTIONS.
106008NP 6.07
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<PAGE> 27
BASIS OF THE MINIMUM CASH VALUES ARE BASED ON 1) THE MINIMUM CASH VALUE MORTALITY TABLE
COMPUTATION SHOWN ON THE POLICY SPECIFICATIONS PAGE; AND 2) FOR AMOUNTS ALLOCATED TO THE
GENERAL ACCOUNT, COMPOUND INTEREST AT AN ANNUAL RATE OF NOT LESS THAN THE GENERAL
ACCOUNT CASH VALUE GUARANTEED INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THERE IS NO MINIMUM CASH VALUE GUARANTEED INTEREST RATE FOR AMOUNTS ALLOCATED
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
NET SINGLE PREMIUMS ARE BASED ON 1) THE 7702 TABLE AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE; AND 2) THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST RATE
AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
ALL VALUES ARE AT LEAST EQUAL TO THOSE REQUIRED BY ANY APPLICABLE LAW OF THE STATE
THAT GOVERNS YOUR POLICY. WE HAVE FILED A DETAILED STATEMENT OF THE METHOD OF
CALCULATING CASH VALUES AND RESERVES WITH THE INSURANCE SUPERVISORY OFFICIAL OF
THAT STATE.
106008NP 6.08
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<PAGE> 28
<CAPTION>
9. PAYMENT OF POLICY BENEFITS
<C> <S>
PAYMENT A LUMP SUM PAYMENT WILL BE MADE AS PROVIDED ON THE FACE PAGE.
INTEREST ON WE WILL PAY INTEREST ON PROCEEDS FROM THE DATE OF THE LAST INSURED'S DEATH TO THE
PROCEEDS DATE OF PAYMENT. INTEREST WILL BE AT AN ANNUAL RATE DETERMINED BY US, BUT NEVER
LESS THAN THE GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE.
EXTENDED PROVISIONS FOR SETTLEMENT OF PROCEEDS DIFFERENT FROM A LUMP SUM PAYMENT MAY ONLY BE
PROVISIONS MADE UPON WRITTEN AGREEMENT WITH US.
</TABLE>
00782NP 7.01
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<PAGE> 29
JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
NON-PARTICIPATING
[General American logo]
LIFE INSURANCE COMPANY
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128
100018NP
(6/98)
<PAGE> 1
General POLICY NUMBER:
American
LIFE INSURANCE COMPANY 17,000,001
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128 INSUREDS:
John Doe
Jane Doe
PENSION JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
PARTICIPATING
Flexible Premiums are payable while this policy is in force and continue
until the younger Insured reaches Attained Age 100. If both Insureds die
while this policy is in force, we will pay the policy proceeds to the
beneficiary upon the Last Insured's death. We must receive proof of both
Insureds' deaths. The policy must also be surrendered to us after the Last
Insured's death occurs. Any payment will be subject to all of the provisions
and conditions on this and the following pages of this policy.
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE UNDER THE CONDITIONS DESCRIBED ON PAGES 4.01 AND 4.02.
THE POLICY'S CASH VALUE IN EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT
IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY
INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE THE
SEPARATE ACCOUNT PROVISION.
THE POLICY'S CASH VALUE IN THE GENERAL ACCOUNT WILL BE CREDITED WITH INTEREST
AT A MINIMUM GUARANTEED RATE AS SHOWN ON THE POLICY SPECIFICATIONS PAGE. WE
MAY CREDIT ADDITIONAL INTEREST IN EXCESS OF THE GUARANTEED RATE. SEE THE
GENERAL ACCOUNT CASH VALUE PROVISION.
RIGHT TO EXAMINE POLICY
Please read this policy. You may return this policy to us or to the agent
through whom it was purchased within 20 days from the date you receive it or
within 45 days after the application is signed, whichever period ends later.
If you return it within this period, the policy will be void from the
beginning. We will refund any premium paid.
This policy is a legal contract between the policyowner and General American.
PLEASE READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief
outline of some of the important features of your policy. This cover sheet is
not the complete insurance contract and only the actual policy provisions
will control. The policy itself sets forth, in detail, the rights and
obligations of both you and your insurance company. IT IS, THEREFORE,
IMPORTANT THAT YOU READ YOUR POLICY.
Signed for the company at its Home Office, St. Louis, Missouri 63128.
(1-800-638-9294)
/s/ Robert J. Banstetter /s/ Richard A. Liddy
V.P., GENERAL COUNSEL CHAIRMAN, PRESIDENT
AND SECRETARY AND CEO
100020 0.01
(6/98)
<PAGE> 2
<TABLE>
ALPHABETIC GUIDE TO YOUR CONTRACT
<CAPTION>
Page
<C> <S>
3.07 Addition, Deletion or Substitution
of Investments
4.04 Allocation of Net Premiums
3.04 Assignments
6.08 Basis of Computation
3.02 Beneficiary
6.06 Cash Surrender Value
6.02 Cash Values
4.02 Change in Contract Type
3.05 Change of Insured
3.04 Change of Owner or Beneficiary
3.05 Claims of Creditors
3.04 Conformity with Statutes
4.01 Death Benefit
3.01 Definitions
6.01 Dividends
6.01 Dividend Options
4.02 Face Amount Decreases
6.02 General Account Cash Value
6.03 General Account Interest Rate
4.04 Grace Period
3.05 Incontestability
7.01 Interest on Proceeds
3.01 Issue Date
6.04 Loan Account Cash Value
Page
6.01 Loans
3.05 Misstatement of Age and
Corrections
6.05 Monthly Cost of Insurance
6.06 Monthly Deduction
6.06 Monthly Policy Charge
6.04 Net Investment Factor
4.03 Net Premium
3.02 Owner
6.06 Partial Withdrawals
7.01 Payment of Policy Benefits
4.03 Payment of Premiums
4.02 Policy Changes
4.01 Policy Proceeds
6.08 Postponement of Payments
or Transfers
4.05 Reinstatement
3.04 Requests for Changes and/or
Information
6.03 Separate Account Cash Value
3.06 Separate Account Provisions
3.04 Statements in Application
3.05 Suicide Exclusion
6.06 Surrender
3.06 Transfers
</TABLE>
Additional Benefit Riders, Modifications and Amendments, if any, and a Copy
of the Application are found following the final section.
NOTICE OF ANNUAL MEETING
The annual meeting for the election of directors and the transaction of other
business for General American Mutual Holding Company is held each year at its
Home Office in St. Louis, Missouri. This meeting is at 11:00 a.m. on the
fourth Thursday in April. General American Mutual Holding Company is a mutual
company owned by its members. Each member is entitled to vote at such
elections and to participate in such meetings.
100020 0.02
(6/98)
<PAGE> 3
1. POLICY SPECIFICATIONS
GENERAL POLICY SPECIFICATIONS
POLICY NUMBER [17,000,001]
ISSUE DATE [JANUARY 1, 1998]
FACE AMOUNT [$100,000]
CONTRACT TYPE [OPTION A]
INITIAL PREMIUM PAID [$640.00]
PLANNED ANNUAL PREMIUM [$640.00]
MINIMUM INITIAL ANNUAL PREMIUM AMOUNT [$640.00]
QUALIFIED ROLLOVER PREMIUM [$ 0.00]
TARGET PREMIUM [$315.00]
TARGET PREMIUM (BASE ONLY) [$315.00]
NO LAPSE ANNUAL PREMIUM [$640.00]
NO LAPSE PREMIUM DATE [JANUARY 1, 2003]
PREMIUM TAX CHARGE [2%]
FEDERAL TAX CHARGE [1.3%]
MAXIMUM PERCENT OF PREMIUM CHARGE -
1st YEAR: UP TO TARGET PREMIUM [15%]
ABOVE TARGET PREMIUM [5%]
QUALIFIED ROLLOVER PREMIUM [0%]
YEARS 2-10 [5%]
YEARS 11+ [2%]
INSURED AGE SEX RISK CLASSIFICATION
[JOHN DOE] [35] [MALE] [STANDARD SMOKER]
[JANE DOE] [35] [FEMALE] [STANDARD SMOKER]
FORM BENEFITS - AS SPECIFIED IN POLICY
NUMBERS AND IN ANY RIDER
POLICY PLAN: JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE
100020
11218
11219
11220
11221
103018
104012
106010
00784
11218 1.01
<PAGE> 4
2. POLICY SPECIFICATIONS
GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE [4%]
GENERAL ACCOUNT MAXIMUM
ALLOCATION PERCENT [100%]
GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT [25%]
MAXIMUM MONTHLY COST OF
INSURANCE FACTOR [1.0032737]
MAXIMUM DAILY MORTALITY AND
EXPENSE RISK PERCENTAGE:
YEARS 1-10 [0.0015027%]
YEARS 11-20 [0.0012301%]
YEARS 21+ [0.0009572%]
MAXIMUM ANNUAL MORTALITY AND EXPENSE
RISK PERCENTAGE:
YEARS 1-10 [0.55%]
YEARS 11-20 [0.45%]
YEARS 21+ [0.35%]
MAXIMUM MONTHLY POLICY CHARGE:
1st YEAR [$25.00]
YEARS 2+ [$6.00]
MAXIMUM SELECTION AND ISSUE
EXPENSE CHARGE RATE:
YEARS 1-10 [$0.90]
YEARS 11+ [$0]
MINIMUM FACE AMOUNT [$50,000]
MINIMUM FACE AMOUNT DECREASE [$5,000]
MAXIMUM FEE FOR PROJECTION OF [$25.00]
BENEFITS AND VALUES
MAXIMUM TRANSFER CHARGE [$25.00]
GUARANTEED INTEREST RATE ON [4.0%]
PROCEEDS
7702 TABLE [1980 CSO MORTALITY TABLE
A, SMOKER AND
1980 CSO MORTALITY TABLE
G, SMOKER,
AGE NEAREST BIRTHDAY]
BASIS OF COMPUTATION OF MINIMUM [1980 CSO MORTALITY TABLE
CASH VALUES A, SMOKER AND
1980 CSO MORTALITY TABLE
G, SMOKER,
AGE NEAREST BIRTHDAY]
IF THE INITIAL PREMIUM PAID AND SUBSEQUENT PREMIUMS PROVE TO BE TOO LOW,
COVERAGE PROVIDED BY THIS POLICY MAY CEASE.
11218 1.02
<PAGE> 5
SURRENDER CHARGE SCHEDULE
INSUREDS: JOHN DOE POLICY NUMBER: 17,000,001
JANE DOE COVERAGE: PJSFPVL
FACE AMOUNT: $100,000 EFFECTIVE DATE: JANUARY 1, 1998
TARGET PREMIUM (Base Only): $315.00
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM
POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE
<S> <C> <C> <C>
1-60 45.00% 91 24.17%
61 44.58% 92 23.33%
62 44.17% 93 22.50%
63 43.75% 94 21.67%
64 43.33% 95 20.83%
65 42.92% 96 20.00%
66 42.50% 97 19.17%
67 42.08% 98 18.33%
68 41.67% 99 17.50%
69 41.25% 100 16.67%
70 40.83% 101 15.83%
71 40.42% 102 15.00%
72 40.00% 103 14.17%
73 39.17% 104 13.33%
74 38.33% 105 12.50%
75 37.50% 106 11.67%
76 36.67% 107 10.83%
77 35.83% 108 10.00%
78 35.00% 109 9.17%
79 34.17% 110 8.33%
80 33.33% 111 7.50%
81 32.50% 112 6.67%
82 31.67% 113 5.83%
83 30.83% 114 5.00%
84 30.00% 115 4.17%
85 29.17% 116 3.33%
86 28.33% 117 2.50%
87 27.50% 118 1.67%
88 26.67% 119 0.83%
89 25.83% 120 0.00%
90 25.00%
</TABLE>
11219
<PAGE> 6
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
RATES ARE PER $1,000
COVERAGE: PJSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 17,000,001 JANE DOE
ISSUE DATE: JANUARY 1, 1998
<TABLE>
<CAPTION>
ATTAINED AGE RATE ATTAINED AGE RATE ATTAINED AGE RATE
<S> <C> <C> <C> <C> <C>
35 0.00 57 0.28 79 5.55
36 0.00 58 0.32 80 6.19
37 0.00 59 0.37 81 6.91
38 0.00 60 0.42 82 7.72
39 0.01 61 0.49 83 8.62
40 0.01 62 0.56 84 9.66
41 0.01 63 0.66 85 10.70
42 0.02 64 0.77 86 11.85
43 0.02 65 0.90 87 12.96
44 0.03 66 1.04 88 14.20
45 0.03 67 1.19 89 15.39
46 0.04 68 1.35 90 16.71
47 0.05 69 1.53 91 18.10
48 0.06 70 1.73 92 19.60
49 0.07 71 1.97 93 21.33
50 0.08 72 2.25 94 23.45
51 0.10 73 2.58 95 26.54
52 0.12 74 2.97 96 31.38
53 0.14 75 3.42 97 39.61
54 0.17 76 3.90 98 54.66
55 0.20 77 4.42 99 83.33
56 0.24 78 4.96 100+ 0
</TABLE>
THESE RATES ARE FOR THE BASE POLICY AT ISSUE. THEY ARE BASED ON A COMBINATION
OF THE ULTIMATE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE A FOR A
SMOKER AND TABLE G FOR A SMOKER.
11220
<PAGE> 7
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS
COVERAGE: PJSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 17,000,001 JANE DOE
ISSUE DATE: JAN 1, 1998
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE<F*> RATE AGE<F*> RATE AGE<F*> RATE
<S> <C> <C> <C> <C> <C>
35 5.64184 57 2.45952 79 1.33835
36 5.42508 58 2.37604 80 1.31492
37 5.21686 59 2.29637 81 1.29295
38 5.01683 60 2.22033 82 1.27239
39 4.82481 61 2.14774 83 1.25326
40 4.64044 62 2.07858 84 1.23556
41 4.46354 63 2.01279 85 1.21935
42 4.29389 64 1.95040 86 1.20433
43 4.13112 65 1.89131 87 1.19047
44 3.97514 66 1.83546 88 1.17738
45 3.82557 67 1.78261 89 1.16503
46 3.68227 68 1.73259 90 1.15300
47 3.54498 69 1.68510 91 1.14119
48 3.41344 70 1.64002 92 1.12932
49 3.28747 71 1.59723 93 1.11709
50 3.16694 72 1.55674 94 1.10423
51 3.05154 73 1.51862 95 1.09045
52 2.94120 74 1.48292 96 1.07580
53 2.83570 75 1.44965 97 1.06037
54 2.73495 76 1.41875 98 1.04422
55 2.63880 77 1.39005 99 1.02648
56 2.54704 78 1.36333 100+ 1.01000
<FN>
<F*> Attained Age is the younger Insured's Attained Age even if no longer
living.
</TABLE>
11221
<PAGE> 8
<TABLE>
<CAPTION>
1. DEFINITIONS IN THIS POLICY
<C> <S>
WE, US AND OUR GENERAL AMERICAN LIFE INSURANCE COMPANY.
YOU AND YOUR THE OWNER OF THIS POLICY. THE OWNER MAY BE SOMEONE OTHER THAN THE INSUREDS.
IN THE APPLICATION THE WORDS "YOU" AND "YOUR" REFER TO THE PROPOSED INSURED
PERSON(S).
INSUREDS THE PERSONS WHOSE LIVES ARE INSURED UNDER THIS POLICY. SEE THE POLICY
SPECIFICATIONS PAGE.
LAST INSURED THE INSURED WHOSE DEATH SUCCEEDS THE DEATH OF ALL OTHER INSUREDS UNDER THIS POLICY.
ISSUE AGE THE AGE OF EACH INSURED AS OF HIS OR HER NEAREST BIRTHDAY TO THE ISSUE DATE.
ATTAINED AGE THE ISSUE AGE FOR AN INSURED PLUS THE NUMBER OF COMPLETED POLICY YEARS, WHETHER OR
NOT THE INSURED IS LIVING. THIS INCLUDES ANY PERIOD DURING WHICH THIS POLICY WAS
LAPSED.
ISSUE DATE THE EFFECTIVE DATE OF THE COVERAGE UNDER THIS POLICY WHICH IS THE ISSUE DATE SHOWN
ON THE POLICY SPECIFICATIONS PAGE. IT IS ALSO THE DATE FROM WHICH POLICY
ANNIVERSARIES, POLICY YEARS, AND POLICY MONTHS ARE MEASURED.
INVESTMENT THE DATE THE FIRST PREMIUM IS APPLIED TO THE GENERAL ACCOUNT AND/OR THE DIVISIONS
START DATE OF SEPARATE ACCOUNT ELEVEN. THIS DATE WILL BE THE LATER OF:
- THE ISSUE DATE OF THE POLICY; OR
- THE DATE WE RECEIVE THE FIRST PREMIUM AT OUR HOME OFFICE.
MONTHLY THE SAME DATE IN EACH SUCCEEDING MONTH AS THE ISSUE DATE EXCEPT THAT WHENEVER THE
ANNIVERSARY 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.
GENERAL ACCOUNT THE ASSETS HELD BY US, EXCLUDING ANY LOANS, OTHER THAN THOSE ALLOCATED TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN OR ANY OTHER SEPARATE ACCOUNT.
SEPARATE ACCOUNT SEPARATE ACCOUNT ELEVEN, A SEPARATE INVESTMENT ACCOUNT CREATED BY US TO RECEIVE AND
INVEST NET PREMIUMS RECEIVED FOR THIS POLICY OR OTHER POLICIES.
LOAN ACCOUNT THE ACCOUNT TO WHICH WE WILL TRANSFER FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN THE AMOUNT OF ANY POLICY LOAN.
LOAN SUBACCOUNT A LOAN SUBACCOUNT EXISTS FOR THE GENERAL ACCOUNT AND EACH DIVISION OF SEPARATE
ACCOUNT ELEVEN. 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.
VALUATION DATE EACH DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, WE ARE OPEN FOR
BUSINESS AND THE SEC HAS NOT RESTRICTED TRADING OR DECLARED AN EMERGENCY.
SEC THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
103018 3.01
(6/98)
<PAGE> 9
<CAPTION>
2. PERSONS WITH AN INTEREST IN THE POLICY
<C> <S>
OWNER THE OWNER OF THIS POLICY IS AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL
AGREEMENT ATTACHED TO THIS POLICY, UNLESS LATER CHANGED AS PROVIDED IN THIS POLICY.
IF THERE IS MORE THAN ONE OWNER AT A GIVEN TIME, ALL MUST EXERCISE THE RIGHTS OF
OWNERSHIP BY JOINT ACTION. OWNERSHIP MAY BE CHANGED IN ACCORDANCE WITH THE CHANGE
OF OWNER OR BENEFICIARY PROVISION.
YOU, AS OWNER, ARE ENTITLED TO EXERCISE ALL OWNERSHIP RIGHTS PROVIDED BY THIS
POLICY, WHILE IT IS IN FORCE. ANY PERSON WHOSE RIGHTS OF OWNERSHIP DEPEND UPON SOME
FUTURE EVENT WILL NOT POSSESS ANY PRESENT RIGHTS OF OWNERSHIP. IF THE OWNER IS A
TRUSTEE(S), WE MAY ACT IN RELIANCE UPON THE WRITTEN REQUEST OF ANY TRUSTEE AND WE
ARE NOT RESPONSIBLE FOR PROPER ADMINISTRATION OF THE TRUST. UNLESS OTHERWISE
PROVIDED, THE FINAL OWNER WILL BE THE ESTATE OF THE LAST OWNER TO DIE.
BENEFICIARY THE BENEFICIARY TO RECEIVE THE PROCEEDS IN THE EVENT OF THE LAST INSURED'S DEATH IS
AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL AGREEMENT ATTACHED TO THIS
POLICY, UNLESS LATER CHANGED AS PROVIDED IN THE POLICY. YOU MAY CHANGE THE
BENEFICIARY IN ACCORDANCE WITH THE CHANGE OF OWNER OR BENEFICIARY PROVISION. UNLESS
OTHERWISE STATED, THE BENEFICIARY HAS NO RIGHTS IN THIS POLICY BEFORE THE DEATH OF
THE LAST INSURED. IF THERE IS MORE THAN ONE BENEFICIARY AT THE DEATH OF THE LAST
INSURED, EACH WILL RECEIVE EQUAL PAYMENTS UNLESS OTHERWISE PROVIDED. UNLESS YOU
PROVIDE OTHERWISE, IF A BENEFICIARY DIES PRIOR TO THE LAST INSURED'S DEATH, THAT
BENEFICIARY'S SHARE WILL BE PAID TO THE LIVING BENEFICIARIES OF THAT CLASS. THE
DECEASED BENEFICIARY'S SHARE WILL BE PAID IN THE SAME PROPORTION AS THE LIVING
BENEFICIARIES' SHARES. IF THERE ARE NO BENEFICIARIES LIVING WHEN THE LAST INSURED
DIES, OR AT THE END OF ANY COMMON DISASTER PERIOD, THE PROCEEDS (COMMUTED IF
REQUIRED) WILL BE PAYABLE TO YOU, IF YOU ARE LIVING, OR TO YOUR ESTATE.
ANY PAYMENT WE MAKE WILL TERMINATE OUR LIABILITY WITH RESPECT TO SUCH PAYMENT. IF
THE INSUREDS DESIGNATE SPECIFIC AMOUNTS TO BE PAID TO SPECIFIC BENEFICIARIES AND
THE TOTAL OF THOSE AMOUNTS IS OTHER THAN THE AMOUNT OF PROCEEDS PAYABLE, THE
PROCEEDS PAYABLE WILL BE ADJUSTED AND PAID IN THE SAME PROPORTION AS THE SPECIFIC
AMOUNTS WERE TO BE PAID.
ANY TERM USED IN THE MASCULINE, FEMININE, SINGULAR OR PLURAL, WILL INCLUDE OR BE
THE OPPOSITE GENDER OR NUMBER WHERE NECESSARY.
IF ANY BENEFICIARY DESIGNATION IN THE APPLICATION INCLUDES ANY OF THE FOLLOWING
PROVISIONS, THE TERMS OF THAT PROVISION SHOWN BELOW WILL APPLY:
1. PER STIRPES. THE SHARE OF A DECEASED BENEFICIARY WILL BE PAID TO THAT
BENEFICIARY'S SURVIVING CHILDREN, EQUALLY.
2. COMMON DISASTER. WE WILL NOT MAKE PAYMENT UNTIL THE STATED NUMBER OF DAYS
AFTER THE LAST INSURED'S DEATH. IF ANY BENEFICIARY DIES DURING THIS
PERIOD, OR IF THE ORDER OF DEATH OF ANY BENEFICIARY AND THE LAST INSURED
CANNOT BE DETERMINED, WE WILL PAY AS THOUGH SUCH BENEFICIARY DIED FIRST.
3. TRUST FOR MINOR BENEFICIARY. THE ORIGINAL OR SUCCESSOR TRUSTEE FOR A MINOR
BENEFICIARY WILL SERVE WITHOUT BOND AND EXERCISE ALL RIGHTS AND RECEIVE
ALL PROCEEDS FOR THE MINOR BENEFICIARY. SUCH PROCEEDS WILL BE HELD IN A
SEPARATE TRUST AND USED AT THE TRUSTEE'S DISCRETION FOR SUCH MINOR'S
EDUCATION, SUPPORT, CARE AND GENERAL WELFARE. THE TRUST WILL TERMINATE
AT THE LEGAL AGE OF MAJORITY OR PRIOR DEATH OF THE MINOR BENEFICIARY.
ANY FUNDS THEN HELD BY THE TRUSTEE WILL BE PAID IN ONE SUM TO SUCH
BENEFICIARY OR THE BENEFICIARY'S ESTATE. THE TRUST CAN BE REVOKED BY A
CHANGE OF BENEFICIARY UNDER THE POLICY. PAYMENT TO ANY TRUSTEE WILL
DISCHARGE US TO THE EXTENT OF SUCH PAYMENT.
103018 3.02
(6/98)
<PAGE> 10
4. TRUST UNDER WILL. WHEN WE RECEIVE AT OUR HOME OFFICE:
A) CERTIFIED COPIES OF THE LAST WILL AND TESTAMENT OF THE NAMED TESTATOR;
AND
B) THE ORDER ADMITTING THE WILL TO PROBATE; AND IF SUCH WILL CREATED A
TRUST CAPABLE OF RECEIVING PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THESE DOCUMENTS, SATISFACTORY PROOF IS FURNISHED
THAT:
A) THE TESTATOR DIED INTESTATE; OR
B) THE WILL CREATED NO TRUST CAPABLE OF RECEIVING PROCEEDS; OR
C) THE TESTATOR WAS NOT EITHER INSURED, BUT SURVIVED THE LAST INSURED;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE NOT REQUIRED TO CHECK INTO THE VALIDITY,
GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST. SUCH TRUSTEE
DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER THE POLICY, INCLUDING THE
RIGHT TO CHANGE THE BENEFICIARY.
5. TRUST UNDER SEPARATE WRITTEN AGREEMENT. WHEN WE RECEIVE AT OUR HOME OFFICE
A WRITTEN STATEMENT FROM THE TRUSTEE NAMED IN THE BENEFICIARY DESIGNATION
THAT:
A) THE TRUST AGREEMENT IS IN FORCE; AND
B) THE AGREEMENT PERMITS THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THE TRUSTEE'S STATEMENT, SATISFACTORY PROOF IS
FURNISHED THAT:
A) THE TRUST AGREEMENT IS NOT IN EFFECT; OR
B) THE AGREEMENT DOES NOT PERMIT THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE ENTITLED TO RELY ON ANY STATEMENTS OR
DOCUMENTS FURNISHED TO US BY THE TRUSTEE AND ARE NOT REQUIRED TO CHECK
INTO THE VALIDITY, GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST
AGREEMENT. SUCH TRUSTEE DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER
THE POLICY, INCLUDING THE RIGHT TO CHANGE THE BENEFICIARY.
6. IRREVOCABLE BENEFICIARY. YOU CANNOT CHANGE AN IRREVOCABLE BENEFICIARY
WITHOUT THE WRITTEN CONSENT OF SUCH BENEFICIARY. ALSO, YOU CANNOT
EXERCISE ANY OTHER OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH
BENEFICIARY, IF THE EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF
DIMINISHING THE RIGHTS AND INTEREST OF THE IRREVOCABLE BENEFICIARY.
7. CREDITOR BENEFICIARY. PROCEEDS PAYABLE TO ANY CREDITOR BENEFICIARY ARE
LIMITED TO ITS PROVABLE INTEREST. THE BALANCE OF ANY PROCEEDS WILL BE
PAID TO ANY OTHER NAMED BENEFICIARY. IF THERE IS NO OTHER BENEFICIARY
LIVING, WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED. YOU
CANNOT CHANGE A CREDITOR BENEFICIARY WITHOUT THE WRITTEN CONSENT OF THE
CREDITOR OR RELEASE OF ITS INTEREST. ALSO, YOU CANNOT EXERCISE ANY OTHER
OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH BENEFICIARY, IF THE
EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF DIMINISHING THE RIGHTS
AND INTEREST OF THE CREDITOR BENEFICIARY.
103018 3.03
(6/98)
<PAGE> 11
CHANGE OF DURING THE LIFETIME OF EITHER INSURED YOU MAY CHANGE THE OWNERSHIP AND BENEFICIARY
OWNER OR DESIGNATIONS, SUBJECT TO ANY RESTRICTIONS AS STATED IN THE OWNER OR BENEFICIARY
BENEFICIARY PROVISIONS. YOU MUST MAKE THE CHANGE IN WRITTEN FORM SATISFACTORY TO US. IF
ACCEPTABLE TO US THE CHANGE WILL TAKE EFFECT AS OF THE TIME YOU SIGNED THE REQUEST,
WHETHER OR NOT EITHER INSURED IS LIVING WHEN WE RECEIVE YOUR REQUEST AT OUR HOME
OFFICE. THE CHANGE WILL BE SUBJECT TO ANY ASSIGNMENT OF THIS POLICY OR OTHER LEGAL
RESTRICTIONS. IT WILL ALSO BE SUBJECT TO ANY PAYMENT WE MADE OR ACTION WE TOOK
BEFORE WE RECEIVED YOUR WRITTEN NOTICE OF THE CHANGE. WE HAVE THE RIGHT TO REQUIRE
THE POLICY FOR ENDORSEMENT BEFORE WE ACCEPT THE CHANGE.
IF YOU ARE ALSO THE BENEFICIARY OF THE POLICY AT THE TIME OF THE LAST INSURED'S
DEATH, YOU MAY DESIGNATE SOME OTHER PERSON TO RECEIVE THE PROCEEDS OF THE POLICY
WITHIN 60 DAYS AFTER THE LAST INSURED'S DEATH.
ASSIGNMENTS WE WILL NOT BE BOUND BY AN ASSIGNMENT OF THE POLICY OR OF ANY INTEREST IN IT
UNLESS:
1. THE ASSIGNMENT IS MADE AS A WRITTEN INSTRUMENT,
2. YOU FILE THE ORIGINAL INSTRUMENT OR A CERTIFIED COPY WITH US AT OUR HOME
OFFICE, AND
3. WE SEND YOU AN ACKNOWLEDGED COPY.
WE ARE NOT RESPONSIBLE FOR DETERMINING THE VALIDITY OF ANY ASSIGNMENT.
IF A CLAIM IS BASED ON AN ASSIGNMENT, WE MAY REQUIRE PROOF OF INTEREST OF THE
CLAIMANT. A VALID ASSIGNMENT WILL TAKE PRECEDENCE OVER ANY CLAIM OF A BENEFICIARY.
THIS ASSIGNMENT PROVISION WILL NOT APPLY WHEN THIS CONTRACT IS SOLD IN A TAX
QUALIFIED PLAN. NO ASSIGNMENT WILL BE PERMITTED IN SUCH CASES.
REQUESTS FOR SUBMIT ALL REQUESTS FOR CHANGE AND/OR INFORMATION IN WRITING TO OUR HOME OFFICE -
CHANGES AND/OR GENERAL AMERICAN LIFE INSURANCE COMPANY, P.O. BOX 14490, ST. LOUIS, MO 63178.
INFORMATION
<CAPTION>
3. GENERAL PROVISIONS
<C> <S>
THE CONTRACT WE HAVE ISSUED THIS POLICY IN CONSIDERATION OF THE APPLICATION AND PAYMENT OF
PREMIUMS. THE POLICY, THE APPLICATION FOR IT, AND ANY RIDERS CONSTITUTE THE ENTIRE
CONTRACT AND ARE ATTACHED TO AND MADE A PART OF THE POLICY WHEN THE INSURANCE
APPLIED FOR IS ACCEPTED. A COPY OF ANY APPLICATION FOR REINSTATEMENT WILL BE SENT
TO YOU FOR ATTACHMENT TO THIS POLICY AND WILL BECOME PART OF THE CONTRACT OF
REINSTATEMENT AND OF THIS POLICY. THE POLICY MAY BE CHANGED BY MUTUAL AGREEMENT.
ANY CHANGE MUST BE IN WRITING AND APPROVED BY OUR PRESIDENT, VICE-PRESIDENT OR
SECRETARY. OUR AGENTS HAVE NO AUTHORITY TO ALTER OR MODIFY ANY TERMS, CONDITIONS,
OR AGREEMENTS OF THIS POLICY, OR TO WAIVE ANY OF ITS PROVISIONS.
CONFORMITY WITH IF ANY PROVISION IN THIS POLICY IS IN CONFLICT WITH THE LAWS OF THE STATE WHICH
STATUTES GOVERN THIS POLICY, THE PROVISION WILL BE DEEMED TO BE AMENDED TO CONFORM WITH SUCH
LAWS. IN ADDITION, WE RESERVE THE RIGHT TO CHANGE THIS POLICY IF WE DETERMINE THAT
A CHANGE IS NECESSARY TO CAUSE THIS POLICY TO COMPLY WITH, OR GIVE YOU THE BENEFIT
OF, ANY FEDERAL OR STATE STATUTE, RULE, OR REGULATION, INCLUDING, BUT NOT LIMITED
TO, REQUIREMENTS FOR LIFE INSURANCE CONTRACTS UNDER THE INTERNAL REVENUE CODE, OR
ITS REGULATIONS OR PUBLISHED RULINGS.
STATEMENTS IN ALL STATEMENTS MADE BY THE INSUREDS OR ON THEIR BEHALF, OR BY THE APPLICANT, WILL
APPLICATION BE DEEMED REPRESENTATIONS AND NOT WARRANTIES, EXCEPT IN THE CASE OF FRAUD. MATERIAL
MISSTATEMENTS WILL NOT BE USED TO VOID THE POLICY OR ANY RIDER, OR DENY A CLAIM
UNLESS MADE IN THE APPLICATION FOR A POLICY OR A RIDER.
103018 3.04
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CLAIMS OF TO THE EXTENT PERMITTED BY LAW, NEITHER THE POLICY NOR ANY PAYMENT UNDER IT WILL BE
CREDITORS SUBJECT TO THE CLAIMS OF CREDITORS OR TO ANY LEGAL PROCESS.
CONVERSION RIGHTS WHILE YOUR POLICY IS IN FORCE, YOU HAVE A ONE TIME RIGHT DURING THE FIRST TWO
POLICY YEARS TO TRANSFER ALL OF YOUR CASH VALUE FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN TO THE GENERAL ACCOUNT.
IF, AT ANY TIME DURING THE FIRST TWO POLICY YEARS, YOU REQUEST IN WRITING THE
TRANSFER OF THE CASH VALUE HELD IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN TO THE
GENERAL ACCOUNT AND YOU INDICATE THAT YOU ARE MAKING THIS TRANSFER IN EXERCISE OF
YOUR CONVERSION RIGHTS, THE TRANSFER WILL NOT BE SUBJECT TO A TRANSFER CHARGE OR
TRANSFER LIMITS, IF ANY. AT THE TIME OF SUCH TRANSFER, THERE WILL NOT BE ANY EFFECT
ON THE POLICY'S DEATH BENEFIT, FACE AMOUNT, NET AMOUNT AT RISK, RATE CLASS OR ISSUE
AGE.
IF YOU EXERCISE YOUR ONE TIME CONVERSION RIGHT, WE WILL AUTOMATICALLY ALLOCATE ALL
FUTURE NET PREMIUMS TO THE GENERAL ACCOUNT.
MISSTATEMENT IF THERE IS A MISSTATEMENT OF AGE FOR EITHER INSURED IN THE APPLICATIONS, THE
OF AGE AND AMOUNT OF THE DEATH BENEFIT WILL BE THAT WHICH WOULD BE PURCHASED BY THE MOST
CORRECTIONS RECENT MONTHLY COST OF INSURANCE CHARGE AT THE CORRECT AGE.
IF WE MAKE ANY PAYMENT OR POLICY CHANGES IN GOOD FAITH, RELYING ON OUR RECORDS, OR
EVIDENCE SUPPLIED TO US, OUR DUTY WILL BE FULLY DISCHARGED. WE RESERVE THE RIGHT TO
CORRECT ANY ERRORS IN THE POLICY.
INCONTESTABILITY WE CANNOT CONTEST THIS POLICY AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF
EITHER INSURED FOR TWO YEARS FROM ITS ISSUE DATE. WE CANNOT CONTEST ANY
REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL MISSTATEMENTS MADE CONCERNING
SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF EITHER
INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVE THE REINSTATEMENT. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE WE APPROVED THE REQUEST FOR REINSTATEMENT,
WE CAN NOT CONTEST ANY REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL
MISSTATEMENTS MADE CONCERNING SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING
THE LIFETIME OF THAT INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVED
THE REINSTATEMENT. THIS PROVISION WILL NOT APPLY TO ANY RIDER WHICH CONTAINS ITS
OWN INCONTESTABILITY CLAUSE.
SUICIDE EXCLUSION IF EITHER INSURED DIES BY SUICIDE, WHILE SANE OR INSANE, WITHIN TWO YEARS FROM THE
ISSUE DATE (OR WITHIN THE MAXIMUM PERIOD PERMITTED BY LAW OF THE STATE IN WHICH
THIS POLICY WAS DELIVERED, IF LESS THAN TWO YEARS), THE AMOUNT PAYABLE WILL BE
LIMITED TO THE AMOUNT OF PREMIUMS PAID, LESS ANY OUTSTANDING POLICY LOANS WITH
INTEREST TO THE DATE OF DEATH, AND LESS ANY PARTIAL WITHDRAWALS.
CHANGE OF WHILE THIS POLICY IS IN FORCE, YOU MAY CHANGE ONE OR BOTH OF THE INSUREDS. TO DO
INSURED THIS, YOU MUST MEET THE REQUIREMENTS ESTABLISHED BY US. ANY RIDER ATTACHED TO THIS
POLICY MAY BE CONTINUED ONLY WITH OUR CONSENT. WE RESERVE THE RIGHT TO CHARGE A
NOMINAL FEE FOR PROCESSING A CHANGE OF INSURED.
ANNUAL REPORT EACH YEAR A REPORT WILL BE SENT TO YOU WHICH SHOWS THE CURRENT POLICY VALUES,
PREMIUMS PAID AND DEDUCTIONS MADE SINCE THE LAST REPORT, AND ANY OUTSTANDING POLICY
LOANS.
PROJECTION OF YOU MAY MAKE A WRITTEN REQUEST TO US FOR A PROJECTION OF ILLUSTRATIVE FUTURE CASH
BENEFITS AND VALUES AND DEATH BENEFITS. IF REQUESTED MORE THAN ONCE PER POLICY YEAR, THIS
VALUES PROJECTION WILL BE FURNISHED TO YOU FOR A NOMINAL FEE. THIS FEE WILL NOT EXCEED THE
MAXIMUM FEE FOR PROJECTION OF BENEFITS AND VALUES SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
103018 3.05
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<CAPTION>
4. SEPARATE ACCOUNT PROVISIONS
<C> <S>
SEPARATE ACCOUNT THE VARIABLE BENEFITS UNDER THIS POLICY ARE PROVIDED THROUGH INVESTMENTS IN
SEPARATE ACCOUNT ELEVEN. THIS ACCOUNT IS USED FOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES AND, IF PERMITTED BY LAW, MAY BE USED FOR OTHER POLICIES OR
CONTRACTS AS WELL.
WE HOLD THE ASSETS OF SEPARATE ACCOUNT ELEVEN. THESE ASSETS ARE HELD SEPARATELY
FROM THE ASSETS HELD IN THE GENERAL ACCOUNT. INCOME, GAINS AND LOSSES---WHETHER OR
NOT REALIZED---FROM ASSETS ALLOCATED TO SEPARATE ACCOUNT ELEVEN WILL BE CREDITED TO
OR CHARGED AGAINST THE ACCOUNT WITHOUT REGARD TO OUR OTHER INCOME, GAINS OR LOSSES.
THE PORTION OF THE ASSETS HELD BY SEPARATE ACCOUNT ELEVEN EQUAL TO THE RESERVES AND
OTHER POLICY LIABILITIES WITH RESPECT TO SEPARATE ACCOUNT ELEVEN WILL NOT BE
CHARGED WITH LIABILITIES THAT ARISE FROM ANY OTHER BUSINESS WE MAY CONDUCT. WE HAVE
THE RIGHT TO TRANSFER TO OUR GENERAL ACCOUNT ANY ASSETS OF SEPARATE ACCOUNT ELEVEN
WHICH ARE IN EXCESS OF THE RESERVES AND OTHER POLICY LIABILITIES OF SEPARATE
ACCOUNT ELEVEN.
SEPARATE ACCOUNT ELEVEN IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. SEPARATE
ACCOUNT ELEVEN IS ALSO SUBJECT TO THE LAWS OF THE STATE OF MISSOURI, WHICH REGULATE
THE OPERATIONS OF INSURANCE COMPANIES INCORPORATED IN MISSOURI. THE INVESTMENT
POLICY OF SEPARATE ACCOUNT ELEVEN WILL NOT BE CHANGED WITHOUT THE APPROVAL OF THE
INSURANCE COMMISSIONER OF THE STATE OF MISSOURI. THE APPROVAL PROCESS IS ON FILE
WITH THE INSURANCE COMMISSIONER OF THE STATE IN WHICH THIS POLICY WAS DELIVERED.
DIVISIONS SEPARATE ACCOUNT ELEVEN HAS SEVERAL DIVISIONS. EACH DIVISION INVESTS IN A
CORRESPONDING INVESTMENT PORTFOLIO FROM ONE OR MORE REGISTERED INVESTMENT
COMPANIES.
INCOME, GAINS AND LOSSES---WHETHER OR NOT REALIZED---FROM THE ASSETS OF EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN ARE CREDITED TO OR CHARGED AGAINST THAT
DIVISION WITHOUT REGARD TO INCOME, GAINS OR LOSSES IN OTHER DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR IN THE GENERAL ACCOUNT.
WE WILL VALUE THE ASSETS OF EACH DIVISION OF SEPARATE ACCOUNT ELEVEN AT THE END OF
EACH VALUATION PERIOD. A VALUATION PERIOD IS THE PERIOD BETWEEN TWO SUCCESSIVE
VALUATION DATES. A VALUATION DATE IS ANY DAY THAT BENEFITS VARY AND ON WHICH THE
NEW YORK STOCK EXCHANGE AND OUR HOME OFFICE ARE OPEN FOR BUSINESS OR ANY OTHER DAY
THAT MAY BE REQUIRED BY ANY APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND
REGULATIONS.
TRANSFERS YOU MAY TRANSFER AMOUNTS AS FOLLOWS:
- BETWEEN THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN;
OR
- AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
- THE FIRST 12 REQUESTED TRANSFERS AND/OR PARTIAL WITHDRAWALS PER POLICY
YEAR WILL BE ALLOWED FREE OF CHARGE; THEREAFTER WE MAY IMPOSE A TRANSFER
CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER CHARGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THESE TRANSFERS WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
- WE MUST RECEIVE A REQUEST FOR TRANSFER IN A FORM ACCEPTABLE TO US.
- TRANSFERS FROM OR AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE
AT LEAST $500.00 OR THE ENTIRE AMOUNT YOU HAVE IN A DIVISION, IF SMALLER.
103018 3.06
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<PAGE> 14
- TRANSFERS AND/OR PARTIAL WITHDRAWALS FROM THE GENERAL ACCOUNT TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE AT LEAST $500.00. THE
MAXIMUM AMOUNT OF ALL TRANSFERS AND PARTIAL WITHDRAWALS FROM THE GENERAL
ACCOUNT IN ANY POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT, AS SHOWN ON THE POLICY SPECIFICATIONS
PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
- THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER ANY TRANSFER IN TO THE
GENERAL ACCOUNT CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE MAY REVOKE OR MODIFY THE TRANSFER PRIVILEGE AT ANY TIME, INCLUDING THE MINIMUM
AMOUNT TRANSFERABLE, THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT, AND THE
TRANSFER CHARGE, IF ANY.
ADDITION, DELETION WE RESERVE THE RIGHT, SUBJECT TO COMPLIANCE WITH APPLICABLE LAW, TO MAKE ADDITIONS
OR SUBSTITUTION TO, DELETIONS FROM, OR SUBSTITUTIONS FOR THE SHARES OF A FUND THAT ARE HELD BY
OF INVESTMENTS SEPARATE ACCOUNT ELEVEN OR THAT SEPARATE ACCOUNT ELEVEN MAY PURCHASE. WE RESERVE
THE RIGHT TO ELIMINATE THE SHARES OF ANY OF THE FUNDS OF THIS POLICY AND TO
SUBSTITUTE SHARES OF ANOTHER FUND OF A REGISTERED INVESTMENT COMPANY, IF THE SHARES
OR FUNDS ARE NO LONGER AVAILABLE FOR INVESTMENT OR IF IN OUR JUDGEMENT, FURTHER
INVESTMENT IN ANY FUND SHOULD BECOME INAPPROPRIATE IN VIEW OF THE PURPOSE OF THE
POLICY. WE WILL NOT SUBSTITUTE ANY SHARES ATTRIBUTABLE TO THE OWNER'S INTEREST IN A
DIVISION OF SEPARATE ACCOUNT ELEVEN WITHOUT NOTICE TO THE OWNER AND COMPLIANCE WITH
THE INVESTMENT COMPANY ACT OF 1940. THIS WILL NOT PREVENT SEPARATE ACCOUNT ELEVEN
FROM PURCHASING OTHER SECURITIES FOR OTHER SERIES OR CLASSES OF POLICIES, OR FROM
PERMITTING CONVERSION BETWEEN SERIES OR CLASSES OF POLICIES OR CONTRACTS ON THE
BASIS OF REQUESTS MADE BY OWNERS.
WE RESERVE THE RIGHT TO ESTABLISH ADDITIONAL DIVISIONS OF SEPARATE ACCOUNT ELEVEN
WHICH WOULD INVEST IN SHARES OF REGISTERED INVESTMENT COMPANIES AND TO MAKE SUCH
DIVISIONS AVAILABLE TO SUCH CLASS OR SERIES OF POLICIES AS WE DEEM APPROPRIATE. WE
ALSO RESERVE THE RIGHT TO ELIMINATE OR COMBINE EXISTING DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR TO TRANSFER ASSETS BETWEEN DIVISIONS.
IF WE CONSIDER IT TO BE IN THE BEST INTEREST OF PERSONS HAVING VOTING RIGHTS UNDER
THE POLICIES, SEPARATE ACCOUNT ELEVEN MAY BE OPERATED AS A MANAGEMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940; IT MAY BE DEREGISTERED UNDER THAT ACT IN THE
EVENT REGISTRATION IS NO LONGER REQUIRED; IT MAY BE COMBINED WITH OTHER SEPARATE
ACCOUNTS; OR ITS ASSETS MAY BE TRANSFERRED TO OTHER SEPARATE ACCOUNTS.
103018 3.07
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<CAPTION>
5. POLICY BENEFITS
<C> <S>
POLICY PROCEEDS THE POLICY PROCEEDS ARE:
1. THE DEATH BENEFIT UNDER THE CONTRACT TYPE THEN IN EFFECT; PLUS
2. ANY DIVIDEND DUE; PLUS
3. THE MONTHLY COST OF INSURANCE FOR THE PORTION OF THE POLICY MONTH FROM THE
DATE OF THE LAST INSURED'S DEATH TO THE END OF THE POLICY MONTH OF THAT
DEATH; MINUS
4. ANY PAYMENT DUE UNDER THE GRACE PERIOD PROVISION AS OF THE DATE OF THE
LAST INSURED'S DEATH; MINUS
5. ANY LOAN AND LOAN INTEREST DUE.
DEATH BENEFIT PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH BENEFIT DEPENDS UPON THE
CONTRACT TYPE IN EFFECT ON THE DATE OF THE LAST INSURED'S DEATH. THE CONTRACT TYPE
IN EFFECT IS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
OPTION A CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT PLUS THE CASH VALUE ON THE DATE OF THE LAST INSURED'S
DEATH; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE CASH VALUE ON THE DATE OF THE LAST INSURED'S DEATH MULTIPLIED BY THE
YOUNGER INSURED'S APPLICABLE ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
NOTWITHSTANDING ANYTHING IN THIS POLICY, THE DEATH BENEFIT WILL IN NO CASE BE LESS
THAN THE AMOUNT NECESSARY TO CAUSE THE POLICY TO MEET THE REQUIREMENTS FOR THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
APPLICABLE THE PERCENTAGES AS CURRENTLY DESCRIBED IN SECTION 7702(D) OF THE INTERNAL REVENUE
PERCENTAGE: CODE OF 1986 AND MODIFIED FOR AGES 95 AND ABOVE ARE AS FOLLOWS:
<CAPTION>
IN THE CASE IN WHICH THE YOUNGER THE APPLICABLE PERCENTAGE WILL
INSURED'S ATTAINED AGE AS OF THE DECREASE BY A RATABLE PORTION
BEGINNING OF THE CONTRACT YEAR IS: FOR EACH FULL YEAR:
MORE THAN: BUT NOT MORE THAN: FROM: TO:
<S> <C> <C> <C>
0 40 250 250
40 45 250 215
45 50 215 185
50 55 185 150
55 60 150 130
60 65 130 120
65 70 120 115
70 75 115 105
75 90 105 105
90 95 105 101
95 OR 101
HIGHER
104012 4.01
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<PAGE> 16
<C> <S>
CONTINUATION IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH
OF THE POLICY BENEFIT WILL BE 101% OF THE POLICY'S CASH VALUE.
BEYOND ATTAINED
AGE 100 PLEASE NOTE: THIS POLICY MAY NOT QUALIFY AS LIFE INSURANCE AFTER THE YOUNGER
INSURED'S ATTAINED AGE 100 AND MAY BE SUBJECT TO TAX CONSEQUENCES. PLEASE CONSULT A
TAX ADVISER PRIOR TO CONTINUING THE POLICY BEYOND THE YOUNGER INSURED'S ATTAINED
AGE 100. IT IS POSSIBLE THAT INSURANCE COVERAGE MAY NOT CONTINUE EVEN IF PLANNED
PREMIUMS ARE PAID IN A TIMELY MANNER.
POLICY CHANGES YOU MAY REQUEST POLICY CHANGES AT ANY TIME UNLESS WE SPECIFICALLY INDICATE
OTHERWISE. WE LIMIT THE NUMBER OF CHANGES TO ONE PER POLICY YEAR, AND WE DO NOT
PERMIT CHANGES IN THE FIRST POLICY YEAR. THE TYPES OF CHANGES ALLOWED ARE EXPLAINED
BELOW.
NO CHANGE WILL BE PERMITTED THAT WOULD RESULT IN THIS POLICY NOT SATISFYING THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
FACE AMOUNT THE FACE AMOUNT MAY BE DECREASED BY SENDING US A WRITTEN REQUEST.
DECREASES
ANY DECREASE IN FACE AMOUNT WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. THE FACE AMOUNT REMAINING IN FORCE AFTER ANY REQUESTED DECREASE MAY NOT BE
LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE.
3. ANY DECREASE MUST BE AT LEAST THE MINIMUM FACE AMOUNT DECREASE AS SHOWN ON
THE POLICY SPECIFICATIONS PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT AS EXPLAINED IN THE
SURRENDER CHARGE PROVISION.
WE WILL AMEND YOUR POLICY TO SHOW THE EFFECTIVE DATE OF THE DECREASE.
YOU MAY NOT INCREASE THE FACE AMOUNT OF THIS POLICY.
CHANGE IN IF THE CONTRACT TYPE IN EFFECT IS OPTION A OR OPTION B, YOU MAY CHANGE THE CONTRACT
CONTRACT TYPE TYPE BY SENDING US A WRITTEN REQUEST. THE EFFECTIVE DATE OF THE CHANGE WILL BE THE
MONTHLY ANNIVERSARY ON OR FOLLOWING THE DATE WE RECEIVE YOUR REQUEST. ON THE
EFFECTIVE DATE OF THIS CHANGE THE DEATH BENEFIT PAYABLE DOES NOT CHANGE, BUT THE
FACE AMOUNT MAY CHANGE.
IF THE CONTRACT TYPE IN EFFECT IS OPTION B, YOU MAY CHANGE IT TO OPTION A. THE FACE
AMOUNT WILL BE INCREASED TO EQUAL THE DEATH BENEFIT ON THE EFFECTIVE DATE OF
CHANGE. THE CONTRACT TYPE CANNOT BE CHANGED FROM OPTION B TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION A, YOU MAY CHANGE IT TO OPTION B. PROOF
THAT THE INSUREDS ARE INSURABLE BY OUR STANDARDS ON THE DATE OF THE CHANGE MUST BE
SUBMITTED. THE FACE AMOUNT WILL BE DECREASED TO EQUAL THE DEATH BENEFIT LESS THE
CASH VALUE ON THE EFFECTIVE DATE OF CHANGE. THIS CHANGE MAY NOT BE MADE IF IT WOULD
RESULT IN A FACE AMOUNT WHICH IS LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE
POLICY SPECIFICATIONS PAGE. A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE
AMOUNT AS EXPLAINED IN THE SURRENDER CHARGE PROVISION. THE CONTRACT TYPE CANNOT BE
CHANGED FROM OPTION A TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION C, THE CONTRACT TYPE CANNOT BE CHANGED.
104012 4.02
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<PAGE> 17
<CAPTION>
6. PREMIUMS AND GRACE PERIOD
<C> <S>
PAYMENT OF YOUR FIRST PREMIUM IS DUE AS OF THE ISSUE DATE. WHILE EITHER INSURED IS LIVING,
PREMIUMS PREMIUMS AFTER THE FIRST MUST BE PAID AT OUR HOME OFFICE. A PREMIUM RECEIPT WILL BE
FURNISHED UPON REQUEST. IF THIS POLICY IS IN YOUR POSSESSION AND YOU HAVE NOT PAID
THE FIRST PREMIUM, IT IS NOT IN FORCE. IT WILL BE CONSIDERED THAT YOU HAVE THE
POLICY FOR INSPECTION ONLY.
PREMIUMS MAY BE PAID IN ANY AMOUNT AND AT ANY INTERVAL SUBJECT TO THE FOLLOWING
CONDITIONS:
1. AT THE END OF THE FIRST POLICY YEAR, YOUR TOTAL PREMIUM PAYMENTS FOR THIS
POLICY MUST BE GREATER THAN OR EQUAL TO THE MINIMUM INITIAL ANNUAL PREMIUM
AMOUNT AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. ANY SUBSEQUENT PREMIUM PAYMENT MUST BE AT LEAST $10.00.
3. TOTAL PREMIUMS PAID IN ANY POLICY YEAR FOR POLICIES ISSUED WITH THE OPTION
A OR B CONTRACT TYPE MAY NOT EXCEED AN AMOUNT THAT WOULD CAUSE THE
POLICY TO FAIL THE DEFINITION OF LIFE INSURANCE AS DEFINED BY SECTION
7702 OF THE INTERNAL REVENUE CODE OF 1986, OR ANY APPLICABLE SUCCESSOR
PROVISION THERETO. THE MAXIMUM PREMIUM LIMIT FOR THE FOLLOWING POLICY
YEAR WILL BE SHOWN ON YOUR ANNUAL REPORT.
ON ANY DATE THAT WE RECEIVE A PREMIUM WHICH CAUSES THE DEATH BENEFIT UNDER ANY OF
THE CONTRACT TYPES TO INCREASE BY AN AMOUNT THAT EXCEEDS THAT PREMIUM RECEIVED, WE
RESERVE THE RIGHT TO REFUSE THAT PREMIUM PAYMENT. WE MAY REQUIRE ADDITIONAL
EVIDENCE OF INSURABILITY BEFORE WE ACCEPT THE PREMIUM.
NET PREMIUM THE NET PREMIUM IS:
1. THE PREMIUM PAID; MINUS
2. THE PREMIUM PAID MULTIPLIED BY THE PREMIUM TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
3. THE PREMIUM PAID MULTIPLIED BY THE FEDERAL TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
4. THE PREMIUM PAID MULTIPLIED BY THE APPLICABLE PERCENT OF PREMIUM CHARGE.
PREMIUM TAX A CHARGE WILL BE DEDUCTED FOR PREMIUM TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE PREMIUM TAX CHARGE DUE TO RATE CHANGES OF
THE GOVERNING JURISDICTION. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT PREMIUM
TAX RATE, IF CHANGED.
FEDERAL TAX A CHARGE WILL BE DEDUCTED FOR FEDERAL TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE FEDERAL TAX CHARGE TO REFLECT A CHANGE IN
THE FEDERAL TAX LAW. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT FEDERAL TAX
CHARGE, IF CHANGED.
PERCENT OF A CHARGE WILL BE DEDUCTED FROM EACH PREMIUM SUBMITTED. THE MAXIMUM PERCENT OF
PREMIUM CHARGE PREMIUM CHARGES ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
THE PERCENT OF PREMIUM CHARGE WILL VARY, ON A NON-DISCRIMINATORY BASIS, BASED ON
THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM PERCENT OF PREMIUM
CHARGES SHOWN ON THE POLICY SPECIFICATIONS PAGE.
104012 4.03
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<PAGE> 18
ALLOCATION OF YOU DETERMINE THE ALLOCATION OF NET PREMIUMS AMONG THE GENERAL ACCOUNT AND THE
NET PREMIUMS DIVISIONS OF SEPARATE ACCOUNT ELEVEN. FOR ANY CHOSEN ALLOCATION THE MINIMUM
PERCENTAGE THAT MAY BE ALLOCATED IS 5% OF THE NET PREMIUM. PERCENTAGES MUST BE IN
WHOLE NUMBERS. THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER PAYMENT OF THE
PREMIUM CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THE INITIAL ALLOCATION IS SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. WE
MAY MODIFY THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AT ANY TIME.
FOR ANY PREMIUM RECEIVED DURING THE "RIGHT TO EXAMINE POLICY" PERIOD, WE WILL
INITIALLY ALLOCATE THE NET PREMIUM TO THE DIVISION THAT INVESTS EXCLUSIVELY IN
SHARES OF OUR MONEY MARKET FUND UNLESS PROHIBITED BY STATE LAW. WHEN THIS PERIOD
EXPIRES, CASH VALUE IN THAT DIVISION WILL BE TRANSFERRED TO THE GENERAL ACCOUNT AND
THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE ALLOCATION PERCENTAGES
SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. FOR ANY PREMIUM RECEIVED
AFTER THE "RIGHT TO EXAMINE POLICY" PERIOD, THE NET PREMIUM WILL BE ALLOCATED
ACCORDING TO THE ALLOCATION PERCENTAGES SHOWN ON THE POLICY SPECIFICATIONS PAGE OR
YOUR MOST RECENT ALLOCATION INSTRUCTIONS RECEIVED BY US.
YOUR RIGHT YOU MAY CHANGE THE ALLOCATION OF FUTURE NET PREMIUMS AMONG THE GENERAL ACCOUNT
TO CHANGE AND/OR THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN SUBJECT TO THE CONDITIONS OUTLINED
ALLOCATION IN THE ALLOCATION OF THE NET PREMIUMS PROVISION. THE CHANGE IN ALLOCATION
PERCENTAGES WILL TAKE EFFECT IMMEDIATELY UPON OUR RECEIPT OF YOUR WRITTEN REQUEST.
NO-LAPSE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE, THE SUM OF ALL
PREMIUMS PAID ON THIS 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, THIS POLICY WILL NOT
LAPSE AS A RESULT OF A CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY
SURRENDER CHARGE BEING INSUFFICIENT TO PAY THE MONTHLY DEDUCTION. THE NO LAPSE
PREMIUM DATE AND THE NO LAPSE ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THE NO LAPSE MONTHLY PREMIUM IS ONE TWELFTH OF THE NO LAPSE ANNUAL PREMIUM.
GRACE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE:
1. THE CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE
IS INSUFFICIENT TO COVER THE MONTHLY DEDUCTION; AND
2. THE SUM OF ALL PREMIUMS PAID ON THIS POLICY, REDUCED BY ANY PARTIAL
WITHDRAWALS AND ANY OUTSTANDING LOAN BALANCE, IS LESS THAN THE SUM OF
THE NO LAPSE MONTHLY PREMIUMS FOR THE ELAPSED MONTHS SINCE THE ISSUE
DATE;
THEN THE GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR THE PAYMENT OF A PREMIUM
SUFFICIENT TO KEEP YOUR POLICY IN FORCE. THE NO LAPSE PREMIUM DATE AND THE NO LAPSE
ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
A CHANGE IN YOUR POLICY'S FACE AMOUNT, THE ADDITION OR DELETION OF A SUPPLEMENTAL
RIDER TO THIS POLICY, OR A CHANGE IN THE PREMIUM CLASS OF THE INSUREDS BEFORE THE
NO LAPSE PREMIUM DATE SHOWN ON THE POLICY SPECIFICATIONS PAGE MAY RESULT IN A
CHANGE IN THE NO LAPSE MONTHLY PREMIUM. THE NO LAPSE PREMIUM DATE WILL NOT BE
CHANGED. ---
IF, ON A MONTHLY ANNIVERSARY DAY ON OR AFTER THE NO LAPSE PREMIUM DATE, THE CASH
VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE IS INSUFFICIENT
TO COVER THE NEXT MONTHLY DEDUCTION, A GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR
THE PAYMENT OF A PREMIUM SUFFICIENT TO PAY THE MONTHLY DEDUCTION. (MONTHLY
DEDUCTION IS DEFINED IN THE CASH VALUES SECTION.)
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NOTICE OF THE AMOUNT OF PREMIUM REQUIRED TO BE PAID TO KEEP THIS POLICY IN FORCE
WILL BE SENT AT THE BEGINNING OF THE GRACE PERIOD TO YOUR LAST KNOWN ADDRESS AND TO
ANY ASSIGNEE ON RECORD. IF WE DO NOT RECEIVE A PREMIUM LARGE ENOUGH SO THAT THE NET
PREMIUM COVERS THE MONTHLY DEDUCTION BY THE END OF THE GRACE PERIOD, YOUR POLICY
WILL LAPSE AT THE END OF THAT 62 DAY PERIOD AND IT WILL THEN TERMINATE WITHOUT CASH
SURRENDER VALUE. IF THE LAST INSURED DIES DURING THE GRACE PERIOD, ANY PAST DUE
MONTHLY DEDUCTIONS WILL BE DEDUCTED FROM THE DEATH BENEFIT.
REINSTATEMENT YOU MAY REINSTATE YOUR LAPSED POLICY WITHIN 5 YEARS AFTER THE DATE OF LAPSE. THIS
MUST BE DONE PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100. THE POLICY CAN NOT BE
REINSTATED IF IT HAS BEEN SURRENDERED. TO REINSTATE, YOU MUST SUBMIT THE FOLLOWING
ITEMS:
1. A WRITTEN REQUEST FOR REINSTATEMENT.
2. PROOF SATISFACTORY TO US THAT BOTH INSUREDS ARE INSURABLE BY OUR
STANDARDS, IF BOTH INSUREDS WERE ALIVE ON THE DATE THE POLICY LAPSED. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, YOU MUST
SUBMIT PROOF SATISFACTORY TO US THAT THAT INSURED IS INSURABLE BY OUR
STANDARDS.
3. A NET PREMIUM PAYMENT 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.
4. A PAYMENT TO COVER ANY LOAN INTEREST DUE AND UNPAID AT THE TIME OF LAPSE.
UPON RECEIPT OF THE ABOVE PAYMENTS, WE WILL DEDUCT ANY MONTHLY DEDUCTIONS AND LOAN
INTEREST DUE AND UNPAID AT THE TIME OF LAPSE. IF BOTH INSUREDS WERE ALIVE ON THE
DATE THE POLICY LAPSED, BOTH MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR
REINSTATEMENT. IF EITHER INSURED IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO
EFFECT. IF ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, THAT INSURED
MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR REINSTATEMENT. IF THAT INSURED
IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO EFFECT.
THE REINSTATED POLICY WILL BE IN FORCE FROM THE DATE WE APPROVE THE REINSTATEMENT
APPLICATION. THERE WILL BE A FULL MONTHLY DEDUCTION FOR THE POLICY MONTH WHICH
INCLUDES THIS DATE. ANY APPLICATION FOR REINSTATEMENT BECOMES PART OF THE CONTRACT
OF REINSTATEMENT AND OF THIS POLICY.
ANY LOAN MAY BE PAID OR REINSTATED. ANY LOAN REINSTATED WILL CAUSE A CASH VALUE OF
AN EQUAL AMOUNT TO BE REINSTATED.
ANY LOAN REPAID AT THE TIME OF REINSTATEMENT WILL CAUSE AN INCREASE IN CASH VALUE
EQUAL TO THE AMOUNT OF THE REPAID LOAN.
THE SURRENDER CHARGE AT THE TIME OF REINSTATEMENT WILL BE THE SURRENDER CHARGE IN
EFFECT AT THE TIME OF LAPSE. IF ONLY A PORTION OF THE COVERAGE IS REINSTATED THEN
ONLY THE APPLICABLE PORTION OF THE SURRENDER CHARGE WILL BE REINSTATED. IF ONLY A
PORTION OF THE COVERAGE IS REINSTATED, THE CASH VALUE FOLLOWING REINSTATEMENT WILL
BE INCREASED BY THE APPLICABLE PORTION OF THE SURRENDER CHARGE IMPOSED AT THE TIME
OF LAPSE.
FOLLOWING REINSTATEMENT, THE NO-LAPSE PERIOD PROVISION WILL AGAIN BE APPLICABLE
UNTIL THE NO-LAPSE PREMIUM DATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, IF
SUFFICIENT PREMIUM IS PAID SO THAT, AS OF THE EFFECTIVE DATE OF REINSTATEMENT, THE
SUM OF ALL PREMIUMS PAID, REDUCED BY ANY PARTIAL WITHDRAWALS AND ANY LOANS, IS
GREATER THAN THE NO-LAPSE MONTHLY PREMIUMS MULTIPLIED BY THE NUMBER OF ELAPSED
MONTHS SINCE THE ISSUE DATE.
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<CAPTION>
7. DIVIDENDS
<C> <S>
ANNUAL DIVIDENDS WHILE YOUR POLICY IS IN FORCE IT MAY SHARE IN OUR DIVISIBLE SURPLUS. EACH YEAR WE
WILL DETERMINE THE SHARE OF DIVISIBLE SURPLUS, IF ANY, ACCRUING TO YOUR POLICY. WE
WILL DISTRIBUTE THIS SURPLUS AS A DIVIDEND. WE DO NOT EXPECT TO PAY ANY DIVIDENDS
ON THIS POLICY AT THIS TIME.
DIVIDEND OPTIONS YOU MAY CHOOSE ONE OF THE FOLLOWING OPTIONS. IF YOU DO NOT, WE WILL CREDIT ANY
DIVIDEND UNDER OPTION 2 UNTIL SUCH TIME AS YOU REQUEST IN WRITING A DIFFERENT
OPTION. THE OPTION YOU CHOOSE WILL REMAIN IN EFFECT UNTIL YOU CHANGE IT.
OPTION 1. CASH. PAID IN CASH.
OPTION 2. INCREASE CASH VALUE. PAID TO THE POLICY'S CASH VALUE ON THE DATE OF
ANY DIVIDEND PAYMENT. THE CASH VALUE WILL INCREASE BY EXACTLY THE
AMOUNT OF THE DIVIDEND.
THE DIVIDEND WILL BE ALLOCATED TO THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE CURRENT ALLOCATION OF THE
NET PREMIUM.
<CAPTION>
8. LOANS
<S> <C>
UPON WRITTEN REQUEST TO US, YOU MAY BORROW AN AMOUNT NOT IN EXCESS OF THE LOAN
VALUE OF YOUR POLICY WHILE IT IS IN FORCE. THE MINIMUM AMOUNT OF YOUR NET LOAN
REQUEST AT ANY ONE TIME MUST BE AT LEAST $500. YOUR POLICY WILL BE THE SOLE
SECURITY FOR SUCH LOAN. WE HAVE THE RIGHT TO REQUIRE YOUR POLICY FOR ENDORSEMENT.
THE LOAN VALUE IS THE CASH VALUE OF YOUR POLICY AT THE DATE OF THE LOAN REQUEST
PLUS INTEREST TO THE NEXT POLICY ANNIVERSARY AT THE GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, REDUCED BY:
1. ANY EXISTING LOANS; AND
2. LOAN INTEREST TO THE NEXT LOAN INTEREST DUE DATE; AND
3. EVERY MONTHLY DEDUCTION DUE TO THE NEXT LOAN INTEREST DUE DATE; AND
4. ANY SURRENDER CHARGES.
YOU MAY ALLOCATE THE POLICY LOAN AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE POLICY LOAN
WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT, AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT, ON THE DATE OF THE POLICY LOAN.
CASH VALUE EQUAL TO THE POLICY LOAN ALLOCATED TO THE GENERAL ACCOUNT AND EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN WILL BE TRANSFERRED TO THE LOAN ACCOUNT,
REDUCING THE CASH VALUE ACCORDINGLY. ANY CASH VALUE TRANSFERRED TO THE LOAN ACCOUNT
WILL BE ALLOCATED TO THE APPROPRIATE LOAN SUBACCOUNT.
LOAN INTEREST THE ACCRUED LOAN INTEREST WILL BE DUE THE EARLIEST OF:
DUE DATE
1. THE NEXT POLICY ANNIVERSARY DATE.
2. THE DATE OF TERMINATION OF THE POLICY.
3. THE DATE THE LOAN IS REPAID IN FULL.
4. THE DATE THE LOAN PLUS LOAN INTEREST ACCRUED EXCEEDS THE CASH VALUE LESS
ANY SURRENDER CHARGES.
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INTEREST WILL BE PAYABLE ANNUALLY ON EACH POLICY ANNIVERSARY. IF YOU DO NOT PAY THE
INTEREST WHEN IT IS DUE ON A POLICY ANNIVERSARY, AN AMOUNT OF CASH VALUE EQUAL TO
THE LOAN INTEREST WILL ALSO BE TRANSFERRED TO THE LOAN ACCOUNT. WE WILL CHARGE THE
SAME RATE OF INTEREST ON THIS AMOUNT AS ON THE POLICY LOAN. THE AMOUNT TRANSFERRED
WILL BE DEDUCTED FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT.
FIXED LOAN THE FIXED LOAN INTEREST RATE IS 4.5% FOR POLICY YEARS 1 THROUGH 10, 4.25% FOR
INTEREST RATES POLICY YEARS 11 THROUGH 20 AND 4.15% FOR POLICY YEARS 21 AND LATER. LOAN INTEREST
IS PAYABLE IN ARREARS.
LOAN ALL FUNDS RECEIVED WILL BE CREDITED TO YOUR POLICY AS A PREMIUM UNLESS CLEARLY
REPAYMENTS MARKED FOR LOAN REPAYMENT.
YOU MAY REPAY YOUR LOAN IN WHOLE OR IN PART AT ANY TIME BEFORE THE DEATH OF THE
LAST INSURED WHILE THE POLICY IS IN FORCE. WHEN A LOAN REPAYMENT IS MADE, CASH
VALUE SECURING THE DEBT IN THE LOAN ACCOUNT EQUAL TO THE LOAN REPAYMENT WILL BE
REPAID TO THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE
SAME PROPORTION THAT THE CASH VALUE IN THE LOAN ACCOUNT BEARS TO THE CASH VALUE IN
EACH LOAN SUBACCOUNT. UNPAID LOANS AND LOAN INTEREST WILL BE DEDUCTED FROM ANY
SETTLEMENT OF YOUR POLICY.
IF YOU FAIL TO MAKE REPAYMENTS WHEN THE TOTAL LOAN AND LOAN INTEREST DUE WOULD
EXCEED THE CASH VALUE, LESS ANY SURRENDER CHARGES, YOUR POLICY WILL TERMINATE. WE
WILL ALLOW YOU A GRACE PERIOD FOR SUCH PAYMENT OF LOANS AND LOAN INTEREST DUE. IN
SUCH EVENT THE POLICY BECOMES VOID AT THE END OF THE GRACE PERIOD. WE WILL MAIL
NOTICE TO YOUR LAST KNOWN ADDRESS, AND THAT OF ANY ASSIGNEE OF RECORD. THIS GRACE
PERIOD WILL EXPIRE 62 DAYS FROM THE MONTHLY ANNIVERSARY IMMEDIATELY BEFORE THE DATE
THE TOTAL LOAN AND LOAN INTEREST EXCEEDS THE CASH VALUE LESS ANY SURRENDER CHARGES;
OR 31 DAYS AFTER SUCH NOTICE HAS BEEN MAILED, IF LATER.
<CAPTION>
9. CASH VALUES
<C> <S>
CASH VALUE THE CASH VALUE OF YOUR POLICY IS EQUAL TO THE TOTAL OF:
- THE CASH VALUE IN THE GENERAL ACCOUNT; PLUS
- THE CASH VALUE IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN; PLUS
- THE CASH VALUE IN THE LOAN ACCOUNT.
CASH VALUE IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE CASH
AFTER ATTAINED VALUE OF YOUR POLICY WILL BE DETERMINED IN THE SAME MANNER AS DESCRIBED BELOW;
AGE 100 EXCEPT NO DEDUCTIONS WILL BE MADE FOR MONTHLY COST OF INSURANCE CHARGES. PREMIUMS
CAN NOT BE PAID AFTER THE YOUNGER INSURED ATTAINS AGE 100.
GENERAL ACCOUNT THE CASH VALUE IN THE GENERAL ACCOUNT AS OF THE INVESTMENT START DATE IS EQUAL TO:
CASH VALUE
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
GENERAL ACCOUNT; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE GENERAL ACCOUNT.
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THE CASH VALUE IN THE GENERAL ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE ON THE PRECEDING VALUATION DATE, WITH INTEREST ON SUCH
VALUE AT THE CURRENT RATE; PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE GENERAL ACCOUNT
ON THAT DAY; PLUS
- ANY AMOUNTS TRANSFERRED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY AMOUNT TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE GENERAL ACCOUNT
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM
THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED ON THAT DAY ATTRIBUTED TO THE
GENERAL ACCOUNT; MINUS
- ANY AMOUNT TRANSFERRED FROM THE GENERAL ACCOUNT TO THE LOAN ACCOUNT ON
THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, ANY WITHDRAWAL DUE TO A PRO RATA
SURRENDER PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM THE GENERAL
ACCOUNT ON THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, THE PORTION OF THE MONTHLY DEDUCTION
CHARGED TO THE GENERAL ACCOUNT, TO COVER THE POLICY MONTH WHICH STARTS ON
THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, THE PORTION OF THE DIVIDEND PAID ON
THAT DAY, IF ANY, ALLOCATED TO THE GENERAL ACCOUNT.
GENERAL ACCOUNT THE INTEREST CREDITED TO THE GENERAL ACCOUNT CASH VALUE FOR A SPECIFIC DAY WILL BE
INTEREST RATE AT AN EFFECTIVE ANNUAL RATE NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED
INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
SEPARATE ACCOUNT THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON THE INVESTMENT START
CASH VALUE DATE IS EQUAL TO:
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
DIVISION; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE DIVISION.
THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON SUBSEQUENT VALUATION
DATES IS EQUAL TO:
- THE CASH VALUE IN THE DIVISION ON THE PRECEDING VALUATION DATE MULTIPLIED
BY THAT DIVISION'S NET INVESTMENT FACTOR FOR THE CURRENT VALUATION PERIOD;
PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE DIVISION DURING
THE CURRENT VALUATION PERIOD; PLUS
- ANY AMOUNTS TRANSFERRED TO THE DIVISION FROM THE GENERAL ACCOUNT OR FROM
ANOTHER DIVISION DURING THE CURRENT VALUATION PERIOD; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION
PERIOD; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY AMOUNTS TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE DIVISION DURING
THE CURRENT VALUATION PERIOD; MINUS
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- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE FROM THE
DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED DURING THE CURRENT VALUATION
PERIOD ATTRIBUTED TO THE DIVISION; MINUS
- ANY AMOUNT TRANSFERRED FROM THE DIVISION TO THE LOAN ACCOUNT DURING THAT
VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, ANY
WITHDRAWAL DUE TO A PRO RATA SURRENDER PLUS ANY WITHDRAWAL TRANSACTION
CHARGE FROM THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE MONTHLY DEDUCTION CHARGED TO THE DIVISION DURING THE
CURRENT VALUATION PERIOD TO COVER THE POLICY MONTH WHICH STARTS DURING
THAT VALUATION PERIOD; PLUS
- IF A POLICY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE DIVIDEND PAID, IF ANY, ALLOCATED TO THE DIVISION.
NET INVESTMENT THE NET INVESTMENT FACTOR MEASURES THE INVESTMENT PERFORMANCE OF A DIVISION DURING
FACTOR A VALUATION PERIOD. THE NET INVESTMENT FACTOR FOR EACH DIVISION FOR A VALUATION
PERIOD IS CALCULATED AS FOLLOWS:
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD; PLUS
- 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
- THE CAPITAL LOSSES---REALIZED OR UNREALIZED--- CHARGED AGAINST THOSE
ASSETS DURING THE VALUATION PERIOD; MINUS
- ANY AMOUNT CHARGED AGAINST EACH DIVISION FOR TAXES, INCLUDING ANY TAX OR
OTHER ECONOMIC BURDEN RESULTING FROM THE APPLICATION OF TAX LAWS THAT WE
DETERMINE TO BE PROPERLY ATTRIBUTABLE TO THE DIVISIONS OF THE SEPARATE
ACCOUNT, OR ANY AMOUNT WE SET ASIDE DURING THE VALUATION PERIOD AS A
RESERVE FOR TAXES ATTRIBUTABLE TO THE OPERATION OR MAINTENANCE OF EACH
DIVISION; MINUS
- A CHARGE NOT TO EXCEED THE DAILY INVESTMENT PERCENTAGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE FOR EACH DAY IN THE VALUATION PERIOD. THIS
CORRESPONDS TO AN ANNUAL INVESTMENT PERCENTAGE OF THE MORTALITY AND
EXPENSE RISK PERCENTAGE SHOWN ON THE POLICY SPECIFICATIONS PAGE;
DIVIDED BY
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD.
LOAN ACCOUNT THE CASH VALUE IN THE LOAN ACCOUNT AS OF THE INVESTMENT START DATE IS ZERO.
CASH VALUE
THE CASH VALUE IN THE LOAN ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE IN THE LOAN ACCOUNT ON THE PRECEDING VALUATION DATE, WITH
INTEREST; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE GENERAL ACCOUNT ON
THAT DAY; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY LOAN REPAYMENTS ON THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, AN AMOUNT DUE TO COVER THE LOAN
INTEREST, IF NOT PAID BY YOU.
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CASH VALUE HELD IN THE LOAN ACCOUNT FOR LOAN COLLATERAL WILL EARN INTEREST DAILY AT
AN ANNUAL RATE OF NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST
RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE. INTEREST CREDITED ON THE CASH VALUE
HELD IN THE LOAN ACCOUNT WILL BE ALLOCATED AT LEAST ONCE A YEAR TO THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN EACH LOAN SUBACCOUNT BEARS TO THE CASH VALUE IN THE LOAN ACCOUNT.
MONTHLY COST THE MONTHLY COST OF INSURANCE FOR THE FOLLOWING MONTH IS DEDUCTED ON THE MONTHLY
OF INSURANCE ANNIVERSARY DATE. THE MONTHLY COST OF INSURANCE IS 1, BELOW, MULTIPLIED BY THE
DIFFERENCE BETWEEN 2 AND 3 BELOW:
1. THE MONTHLY COST OF INSURANCE RATE DIVIDED BY 1,000.
2. AN AMOUNT AS FOLLOWS:
OPTION A CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE PLUS THE CASH VALUE AT THE BEGINNING
OF THE POLICY MONTH; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
YOUNGER INSURED'S ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S DEATH
BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
3. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH, BEFORE THE DEDUCTION
OF THE MONTHLY COST OF INSURANCE.
MONTHLY COST AT THE BEGINNING OF EACH POLICY YEAR, THE MONTHLY COST OF INSURANCE RATE IS
OF INSURANCE DETERMINED. THE MONTHLY COST OF INSURANCE RATE IS BASED ON THE ATTAINED AGES, RISK
RATES CLASSIFICATIONS, AND COMPLETED POLICY YEARS FROM THE ISSUE DATE.
THE MONTHLY COST OF INSURANCE RATES WILL NEVER EXCEED THE RATES SHOWN ON THE TABLE
OF GUARANTEED MONTHLY COST OF INSURANCE RATES PAGE. ANY CHANGE IN THE COST OF
INSURANCE RATES WILL APPLY TO ALL PERSONS OF THE SAME AGE, AND CLASSIFICATION
WHOSE FACE AMOUNTS HAVE BEEN IN FORCE FOR THE SAME LENGTH OF TIME.
SELECTION AND THE SELECTION AND ISSUE EXPENSE CHARGE IS A MONTHLY CHARGE FOR THE FIRST 10 POLICY
ISSUE EXPENSE YEARS. THIS CHARGE EQUALS THE FACE AMOUNT TIMES A SELECTION AND ISSUE EXPENSE
CHARGE CHARGE RATE, DIVIDED BY 1,000. THE SELECTION AND ISSUE EXPENSE CHARGE IS BASED ON
THE INSUREDS' ISSUE AGES, AND RISK CLASSIFICATIONS ON THE ISSUE DATE. THE
SELECTION AND ISSUE EXPENSE CHARGE RATE WILL NEVER EXCEED THE MAXIMUM SELECTION AND
ISSUE EXPENSE CHARGE RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
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<PAGE> 25
MONTHLY POLICY A POLICY CHARGE WILL BE DEDUCTED EACH POLICY MONTH FROM THE CASH VALUE. THE AMOUNT
CHARGE OF THE MONTHLY POLICY CHARGE WILL NEVER EXCEED THE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
MONTHLY THE MONTHLY DEDUCTION IS:
DEDUCTION
1. THE MONTHLY COST OF INSURANCE; PLUS
2. THE SELECTION AND ISSUE EXPENSE CHARGE MULTIPLIED BY THE FACE AMOUNT
DIVIDED BY 1,000; PLUS
3. THE MONTHLY POLICY CHARGE; PLUS
4. THE MONTHLY COST, IF ANY, FOR ANY RIDER INCLUDED WITH THIS POLICY.
THE MONTHLY DEDUCTION FOR A POLICY MONTH WILL BE ALLOCATED AMONG THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO
THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN LOAN ACCOUNT ON THE
MONTHLY ANNIVERSARY.
CASH SURRENDER THE CASH SURRENDER VALUE OF THIS POLICY IS:
VALUE
1. THE CASH VALUE AT THE TIME OF SURRENDER; MINUS
2. ANY LOAN AND LOAN INTEREST ACCRUED; MINUS
3. ANY UNPAID SELECTION AND ISSUE EXPENSE CHARGE DUE FOR THE REMAINDER OF THE
FIRST POLICY YEAR; MINUS
4. ANY UNPAID MONTHLY POLICY CHARGE DUE FOR THE REMAINDER OF THE FIRST POLICY
YEAR; MINUS
5. ANY SURRENDER CHARGE.
SURRENDER YOU MAY SURRENDER YOUR POLICY FOR ITS CASH SURRENDER VALUE AT ANY TIME DURING THE
LIFETIME OF EITHER INSURED. WE WILL DETERMINE THE CASH SURRENDER VALUE AS OF THE
DATE WE RECEIVE YOUR WRITTEN REQUEST AT OUR HOME OFFICE. THE CASH SURRENDER VALUE
WILL NOT BE REDUCED BY ANY MONTHLY DEDUCTION DUE ON THAT DATE FOR A SUBSEQUENT
POLICY MONTH.
PARTIAL AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PARTIAL
WITHDRAWALS WITHDRAWAL OF CASH SUBJECT TO THE CONDITIONS LISTED BELOW. THE FIRST 12 REQUESTED
PARTIAL WITHDRAWALS OR TRANSFERS PER POLICY YEAR WILL BE ALLOWED FREE OF CHARGE;
THEREAFTER WE MAY IMPOSE A TRANSFER CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER
CHARGE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
NO PARTIAL WITHDRAWAL WILL BE PROCESSED WHICH WILL RESULT IN THE FACE AMOUNT,
EXCLUDING RIDERS, BEING DECREASED BELOW THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE RESERVE THE RIGHT TO CHANGE THE MINIMUM AMOUNT OR THE NUMBER OF TIMES YOU MAY
MAKE A PARTIAL WITHDRAWAL. WE ALSO MAY ASSESS A TRANSACTION CHARGE FOR A
WITHDRAWAL.
IF THE CONTRACT TYPE IS OPTION A OR OPTION C 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. THIS SURRENDER
CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE PARTIAL WITHDRAWAL WAS ALLOCATED
AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF THE
DEATH BENEFIT EQUALS A PERCENTAGE OF THE CASH VALUE THEN A PARTIAL WITHDRAWAL WILL
DECREASE THE FACE AMOUNT BY ANY AMOUNT BY WHICH THE PARTIAL WITHDRAWAL PLUS THE
APPLICABLE SURRENDER CHARGE EXCEEDS THE DIFFERENCE BETWEEN THE DEATH BENEFIT AND
THE FACE AMOUNT.
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GENERAL ACCOUNT THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST BE AT
PARTIAL LEAST $500 OF YOUR ACCOUNT.
WITHDRAWALS
- THE MAXIMUM AMOUNT OF ALL PARTIAL WITHDRAWALS AND TRANSFERS FROM THE
GENERAL ACCOUNT IN A POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE WITHDRAWAL PERCENTAGE LIMIT, AS
SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
SEPARATE ACCOUNT - THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST
PARTIAL BE THE LESSER OF $500 OF A DIVISION OR YOUR ENTIRE BALANCE IN THAT
WITHDRAWALS DIVISION.
- THE MAXIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL FROM ANY ONE OF THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN A POLICY YEAR WILL BE THE CASH
SURRENDER VALUE OF THAT DIVISION.
ALLOCATION YOU MAY ALLOCATE THE PARTIAL WITHDRAWAL PLUS ANY APPLICABLE SURRENDER CHARGE,
OF PARTIAL SUBJECT TO THE ABOVE CONDITIONS, AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
WITHDRAWALS SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE PARTIAL
WITHDRAWAL WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL
ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE
POLICY, MINUS THE CASH VALUE IN THE LOAN ACCOUNT ON THE DATE OF THE PARTIAL
WITHDRAWAL. IF THE GENERAL ACCOUNT CONDITIONS WILL NOT ALLOW THIS PROPORTIONATE
ALLOCATION, WE WILL REQUEST THAT YOU SPECIFY AN ACCEPTABLE ALLOCATION.
PRO RATA AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PRO RATA
SURRENDER SURRENDER OF YOUR POLICY. THE PRO RATA SURRENDER CAN BE ANY WHOLE NUMBER PERCENTAGE
OF YOUR POLICY. THE PRO RATA SURRENDER WILL REDUCE THE FACE AMOUNT AND THE CASH
VALUE BY THE PERCENTAGE CHOSEN. THE FACE AMOUNT DECREASE WILL BE SUBJECT TO THE
FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. YOU MAY ALLOCATE THE DECREASE IN CASH VALUE DUE TO THE PRO RATA SURRENDER
PLUS ANY APPLICABLE SURRENDER CHARGE AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE
ALLOCATION, THEN THE DECREASE IN CASH VALUE PLUS ANY APPLICABLE
SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE
CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION
BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN THE
LOAN ACCOUNT ON THE DATE OF THE PRO RATA SURRENDER.
A PRO RATA SURRENDER CAN NOT BE PROCESSED IF IT WILL REDUCE THE FACE AMOUNT BELOW
THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE. 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 YOU FOR THE AMOUNT
OF CASH VALUE REDUCTION LESS ANY APPLICABLE SURRENDER CHARGES.
SURRENDER A SURRENDER CHARGE WILL APPLY UPON SURRENDER, UPON LAPSE, UPON A PARTIAL WITHDRAWAL
CHARGE THAT REDUCES THE FACE AMOUNT, OR UPON A DECREASE IN FACE AMOUNT FOR UP TO 10 YEARS
FROM THE POLICY'S ISSUE DATE.
THE SURRENDER CHARGE IS THE TARGET ANNUAL PREMIUM (BASE ONLY), SHOWN ON THE POLICY
SPECIFICATIONS PAGE, MULTIPLIED BY THE APPLICABLE SURRENDER CHARGE PERCENTAGE. THE
SURRENDER CHARGE PERCENTAGE WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
106010 6.07
(6/98)
<PAGE> 27
THE SURRENDER CHARGES FOR THIS POLICY WILL VARY ON A NON-DISCRIMINATORY BASIS, BASED
ON THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT. A DECREASE IN FACE
AMOUNT MAY DECREASE SOME OR ALL OF THE INITIAL FACE AMOUNT AS PROVIDED IN SECTION
5. A PARTIAL WITHDRAWAL MAY CAUSE A DECREASE IN FACE AMOUNT AS PROVIDED ABOVE AND,
THEREFORE, A SURRENDER CHARGE MAY BE TAKEN. IF THE FACE AMOUNT IS DECREASED BY SOME
FRACTION OF THE TOTAL FACE AMOUNT, THE SURRENDER CHARGE DEDUCTED WILL BE THE
PREVIOUSLY DEFINED SURRENDER CHARGE MULTIPLIED BY THE FRACTION.
THE SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE
GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE
OF THE POLICY MINUS THE CASH VALUE IN THE LOAN ACCOUNT.
POSTPONEMENT WE WILL USUALLY PAY ANY AMOUNTS PAYABLE ON SURRENDER, PARTIAL WITHDRAWAL, OR POLICY
OF PAYMENTS LOAN ALLOCATED TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN WITHIN SEVEN DAYS AFTER
OR TRANSFERS WRITTEN NOTICE IS RECEIVED. WE WILL USUALLY PAY ANY DEATH BENEFIT PROCEEDS UPON THE
LAST INSURED'S DEATH WITHIN SEVEN DAYS AFTER WE RECEIVE DUE PROOF OF CLAIM. PAYMENT
OF ANY AMOUNT PAYABLE, FROM THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN, ON SURRENDER,
PARTIAL WITHDRAWAL, POLICY LOAN OR DEATH MAY BE POSTPONED WHENEVER:
1. THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN CUSTOMARY WEEKEND AND
HOLIDAY CLOSING) 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 POLICY
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 NET ASSETS OF
SEPARATE ACCOUNT ELEVEN.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY AMOUNT PAYABLE FROM THE GENERAL ACCOUNT
ON SURRENDER, OR PARTIAL WITHDRAWAL FOR NOT MORE THAN SIX MONTHS. IF WE DEFER
PAYMENT FOR 30 DAYS OR MORE, WE WILL PAY INTEREST AT THE RATE OF 2 1/2% PER YEAR
FOR THE PERIOD OF DEFERMENT.
TRANSFERS MAY ALSO BE POSTPONED UNDER THE CIRCUMSTANCES LISTED ABOVE.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY POLICY LOAN FROM THE GENERAL ACCOUNT FOR
NOT MORE THAN SIX MONTHS. NO PAYMENT FROM THE GENERAL ACCOUNT TO PAY PREMIUMS ON
THIS POLICY WILL BE DEFERRED.
CONTINUATION IF ALL PREMIUM PAYMENTS CEASE, THE INSURANCE PROVIDED UNDER THIS POLICY, INCLUDING
OF INSURANCE BENEFITS PROVIDED BY ANY RIDER ATTACHED TO THIS POLICY, WILL CONTINUE IN ACCORDANCE
WITH THE PROVISIONS OF THIS POLICY FOR AS LONG AS THE CASH VALUE LESS ANY LOANS,
LOAN INTEREST ACCURED AND ANY SURRENDER CHARGE IS SUFFICIENT TO COVER THE MONTHLY
DEDUCTIONS.
BASIS OF THE MINIMUM CASH VALUES ARE BASED ON 1) THE MINIMUM CASH VALUE MORTALITY TABLE
COMPUTATION SHOWN ON THE POLICY SPECIFICATIONS PAGE; AND 2) FOR AMOUNTS ALLOCATED TO THE
GENERAL ACCOUNT, COMPOUND INTEREST AT AN ANNUAL RATE OF NOT LESS THAN THE GENERAL
ACCOUNT CASH VALUE GUARANTEED INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THERE IS NO MINIMUM CASH VALUE GUARANTEED INTEREST RATE FOR AMOUNTS ALLOCATED
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
NET SINGLE PREMIUMS ARE BASED ON 1) THE 7702 TABLE AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE; AND 2) THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST RATE
AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
ALL VALUES ARE AT LEAST EQUAL TO THOSE REQUIRED BY ANY APPLICABLE LAW OF THE STATE
THAT GOVERNS YOUR POLICY. WE HAVE FILED A DETAILED STATEMENT OF THE METHOD OF
CALCULATING CASH VALUES AND RESERVES WITH THE INSURANCE SUPERVISORY OFFICIAL OF
THAT STATE.
106010 6.08
(6/98)
<PAGE> 28
<CAPTION>
10. PAYMENT OF POLICY BENEFITS
<C> <S>
PAYMENT A LUMP SUM PAYMENT WILL BE MADE AS PROVIDED ON THE FACE PAGE.
INTEREST ON WE WILL PAY INTEREST ON PROCEEDS FROM THE DATE OF THE LAST INSURED'S DEATH TO THE
PROCEEDS DATE OF PAYMENT. INTEREST WILL BE AT AN ANNUAL RATE DETERMINED BY US, BUT NEVER
LESS THAN THE GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE.
EXTENDED PROVISIONS FOR SETTLEMENT OF PROCEEDS DIFFERENT FROM A LUMP SUM PAYMENT MAY ONLY BE
PROVISIONS MADE UPON WRITTEN AGREEMENT WITH US.
</TABLE>
00784 7.01
(6/98)
<PAGE> 29
PENSION JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
PARTICIPATING
General
American
LIFE INSURANCE COMPANY
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128
100020
(6/98)
<PAGE> 1
General POLICY NUMBER:
American
LIFE INSURANCE COMPANY 17,000,001
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128 INSUREDS:
John Doe
Jane Doe
PENSION JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
NON-PARTICIPATING
Flexible Premiums are payable while this policy is in force and continue
until the younger Insured reaches Attained Age 100. If both Insureds die
while this policy is in force, we will pay the policy proceeds to the
beneficiary upon the Last Insured's death. We must receive proof of both
Insureds' deaths. The policy must also be surrendered to us after the Last
Insured's death occurs. Any payment will be subject to all of the provisions
and conditions on this and the following pages of this policy.
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE UNDER THE CONDITIONS DESCRIBED ON PAGES 4.01 AND 4.02.
THE POLICY'S CASH VALUE IN EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT
IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY
INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE THE
SEPARATE ACCOUNT PROVISION.
THE POLICY'S CASH VALUE IN THE GENERAL ACCOUNT WILL BE CREDITED WITH INTEREST
AT A MINIMUM GUARANTEED RATE AS SHOWN ON THE POLICY SPECIFICATIONS PAGE. WE
MAY CREDIT ADDITIONAL INTEREST IN EXCESS OF THE GUARANTEED RATE. SEE THE
GENERAL ACCOUNT CASH VALUE PROVISION.
RIGHT TO EXAMINE POLICY
Please read this policy. You may return this policy to us or to the agent
through whom it was purchased within 20 days from the date you receive it or
within 45 days after the application is signed, whichever period ends later.
If you return it within this period, the policy will be void from the
beginning. We will refund any premium paid.
This policy is a legal contract between the policyowner and General American.
PLEASE READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief
outline of some of the important features of your policy. This cover sheet is
not the complete insurance contract and only the actual policy provisions
will control. The policy itself sets forth, in detail, the rights and
obligations of both you and your insurance company. IT IS, THEREFORE,
IMPORTANT THAT YOU READ YOUR POLICY.
Signed for the company at its Home Office, St. Louis, Missouri 63128.
(1-800-638-9294)
/s/ Robert J. Banstetter /s/ Richard A. Liddy
V.P., GENERAL COUNSEL CHAIRMAN, PRESIDENT
AND SECRETARY AND CEO
100020NP 0.01
(6/98)
<PAGE> 2
<TABLE>
ALPHABETIC GUIDE TO YOUR CONTRACT
<CAPTION>
Page
<C> <S>
3.07 Addition, Deletion or Substitution
of Investments
4.04 Allocation of Net Premiums
3.04 Assignments
6.08 Basis of Computation
3.02 Beneficiary
6.05 Cash Surrender Value
6.02 Cash Values
4.02 Change in Contract Type
3.05 Change of Insured
3.04 Change of Owner or Beneficiary
3.05 Claims of Creditors
3.04 Conformity with Statutes
4.01 Death Benefit
3.01 Definitions
4.02 Face Amount Decreases
6.02 General Account Cash Value
6.03 General Account Interest Rate
4.04 Grace Period
3.05 Incontestability
7.01 Interest on Proceeds
3.01 Issue Date
6.04 Loan Account Cash Value
6.01 Loans
Page
3.05 Misstatement of Age and
Corrections
6.04 Monthly Cost of Insurance
6.05 Monthly Deduction
6.05 Monthly Policy Charge
6.03 Net Investment Factor
4.03 Net Premium
3.02 Owner
6.05 Partial Withdrawals
7.01 Payment of Policy Benefits
4.03 Payment of Premiums
4.02 Policy Changes
4.01 Policy Proceeds
6.07 Postponement of Payments
or Transfers
4.05 Reinstatement
3.04 Requests for Changes and/or
Information
6.03 Separate Account Cash Value
3.06 Separate Account Provisions
3.04 Statements in Application
3.05 Suicide Exclusion
6.05 Surrender
3.06 Transfers
</TABLE>
Additional Benefit Riders, Modifications and Amendments, if any, and a Copy
of the Application are found following the final section.
NOTICE OF ANNUAL MEETING
The annual meeting for the election of directors and the transaction of other
business for General American Mutual Holding Company is held each year at its
Home Office in St. Louis, Missouri. This meeting is at 11:00 a.m. on the
fourth Thursday in April. General American Mutual Holding Company is a mutual
company owned by its members. Each member is entitled to vote at such
elections and to participate in such meetings.
100020NP 0.02
(6/98)
<PAGE> 3
1. POLICY SPECIFICATIONS
GENERAL POLICY SPECIFICATIONS
POLICY NUMBER [17,000,001]
ISSUE DATE [JANUARY 1, 1998]
FACE AMOUNT [$100,000]
CONTRACT TYPE [OPTION A]
INITIAL PREMIUM PAID [$640.00]
PLANNED ANNUAL PREMIUM [$640.00]
MINIMUM INITIAL ANNUAL PREMIUM AMOUNT [$640.00]
QUALIFIED ROLLOVER PREMIUM [$ 0.00]
TARGET PREMIUM [$315.00]
TARGET PREMIUM (BASE ONLY) [$315.00]
NO LAPSE ANNUAL PREMIUM [$640.00]
NO LAPSE PREMIUM DATE [JANUARY 1, 2003]
PREMIUM TAX CHARGE [2%]
FEDERAL TAX CHARGE [1.3%]
MAXIMUM PERCENT OF PREMIUM CHARGE -
1st YEAR: UP TO TARGET PREMIUM [15%]
ABOVE TARGE PREMIUM [5%]
QUALIFIED ROLLOVER PREMIUM [0%]
YEARS 2-10 [5%]
YEARS 11+ [2%]
INSURED AGE SEX RISK CLASSIFICATION
[JOHN DOE] [35] [MALE] [STANDARD SMOKER]
[JANE DOE] [35] [FEMALE] [STANDARD SMOKER]
FORM BENEFITS - AS SPECIFIED IN POLICY
NUMBERS AND IN ANY RIDER
POLICY PLAN: PENSION JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE
100020NP
11218NP
11219NP
11220NP
11221NP
103018NP
104012NP
106010NP
00784NP
11218NP 1.01
<PAGE> 4
2. POLICY SPECIFICATIONS
GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE [4%]
GENERAL ACCOUNT MAXIMUM
ALLOCATION PERCENT [100%]
GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT [25%]
MAXIMUM MONTHLY COST OF
INSURANCE FACTOR [1.0032737]
MAXIMUM DAILY MORTALITY AND
EXPENSE RISK PERCENTAGE:
YEARS 1-10 [0.0015027%]
YEARS 11-20 [0.0012301%]
YEARS 21+ [0.0009572%]
MAXIMUM ANNUAL MORTALITY AND EXPENSE
RATE PERCENTAGE:
YEARS 1-10 [0.55%]
YEARS 11-20 [0.45%]
YEARS 21+ [0.35%]
MAXIMUM MONTHLY POLICY CHARGE:
1st YEAR [$25.00]
YEARS 2+ [$6.00]
MAXIMUM SELECTION AND ISSUE
EXPENSE CHARGE RATE:
YEARS 1-10 [$0.90]
YEARS 11+ [$0]
MINIMUM FACE AMOUNT [$50,000]
MINIMUM FACE AMOUNT DECREASE [$2,000]
MAXIMUM FEE FOR PROJECTION OF [$25.00]
BENEFITS AND VALUES
MAXIMUM TRANSFER CHARGE [$25.00]
GUARANTEED INTEREST RATE ON [4.0%]
PROCEEDS
7702 TABLE [1980 CSO MORTALITY TABLE
A, SMOKER AND
1980 CSO MORTALITY TABLE G,
SMOKER,
AGE NEAREST BIRTHDAY]
BASIS OF COMPUTATION OF MINIMUM [1980 CSO MORTALITY TABLE
CASH VALUES A, SMOKER AND
1980 CSO MORTALITY TABLE G,
SMOKER,
AGE NEAREST BIRTHDAY]
IF THE INITIAL PREMIUM PAID AND SUBSEQUENT PREMIUMS PROVE TO BE TOO LOW,
COVERAGE PROVIDED BY THIS POLICY MAY CEASE.
11218NP 1.02
<PAGE> 5
SURRENDER CHARGE SCHEDULE
INSUREDS: JOHN DOE POLICY NUMBER: 17,000,001
JANE DOE COVERAGE: PJSFPVL
FACE AMOUNT: $100,000 EFFECTIVE DATE: JANUARY 1, 1998
TARGET PREMIUM (Base Only): $315.00
<TABLE>
<CAPTION>
MAXIMUM MAXIMUM
POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE
<S> <C> <C> <C>
1-60 45.00% 91 24.17%
61 44.58% 92 23.33%
62 44.17% 93 22.50%
63 43.75% 94 21.67%
64 43.33% 95 20.83%
65 42.92% 96 20.00%
66 42.50% 97 19.17%
67 42.08% 98 18.33%
68 41.67% 99 17.50%
69 41.25% 100 16.67%
70 40.83% 101 15.83%
71 40.42% 102 15.00%
72 40.00% 103 14.17%
73 39.17% 104 13.33%
74 38.33% 105 12.50%
75 37.50% 106 11.67%
76 36.67% 107 10.83%
77 35.83% 108 10.00%
78 35.00% 109 9.17%
79 34.17% 110 8.33%
80 33.33% 111 7.50%
81 32.50% 112 6.67%
82 31.67% 113 5.83%
83 30.83% 114 5.00%
84 30.00% 115 4.17%
85 29.17% 116 3.33%
86 28.33% 117 2.50%
87 27.50% 118 1.67%
88 26.67% 119 0.83%
89 25.83% 120 0.00%
90 25.00%
</TABLE>
11219NP
<PAGE> 6
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
RATES ARE PER $1,000
COVERAGE: PJSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 17,000,001 JANE DOE
ISSUE DATE: JANUARY 1, 1998
<TABLE>
<CAPTION>
ATTAINED AGE RATE ATTAINED AGE RATE ATTAINED AGE RATE
<S> <C> <C> <C> <C> <C>
35 0.00 57 0.28 79 5.55
36 0.00 58 0.32 80 6.19
37 0.00 59 0.37 81 6.91
38 0.00 60 0.42 82 7.72
39 0.01 61 0.49 83 8.62
40 0.01 62 0.56 84 9.66
41 0.01 63 0.66 85 10.70
42 0.02 64 0.77 86 11.85
43 0.02 65 0.90 87 12.96
44 0.03 66 1.04 88 14.20
45 0.03 67 1.19 89 15.39
46 0.04 68 1.35 90 16.71
47 0.05 69 1.53 91 18.10
48 0.06 70 1.73 92 19.60
49 0.07 71 1.97 93 21.33
50 0.08 72 2.25 94 23.45
51 0.10 73 2.58 95 26.54
52 0.12 74 2.97 96 31.38
53 0.14 75 3.42 97 39.61
54 0.17 76 3.90 98 54.66
55 0.20 77 4.42 99 83.33
56 0.24 78 4.96 100+ 0
</TABLE>
THESE RATES ARE FOR THE BASE POLICY AT ISSUE. THEY ARE BASED ON A COMBINATION OF
THE ULTIMATE 1980 COMMISSIONERS STANDARD ORDINARY MORTALITY TABLE A FOR A
SMOKER AND TABLE G FOR A SMOKER.
11220NP
<PAGE> 7
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS
COVERAGE: PJSFPVL INSUREDS: JOHN DOE
POLICY NUMBER: 17,000,001 JANE DOE
ISSUE DATE: JAN 1, 1998
<TABLE>
<CAPTION>
ATTAINED ATTAINED ATTAINED
AGE<F*> RATE AGE<F*> RATE AGE<F*> RATE
<S> <C> <C> <C> <C> <C>
35 5.64184 57 2.45952 79 1.33835
36 5.42508 58 2.37604 80 1.31492
37 5.21686 59 2.29637 81 1.29295
38 5.01683 60 2.22033 82 1.27239
39 4.82481 61 2.14774 83 1.25326
40 4.64044 62 2.07858 84 1.23556
41 4.46354 63 2.01279 85 1.21935
42 4.29389 64 1.95040 86 1.20433
43 4.13112 65 1.89131 87 1.19047
44 3.97514 66 1.83546 88 1.17738
45 3.82557 67 1.78261 89 1.16503
46 3.68227 68 1.73259 90 1.15300
47 3.54498 69 1.68510 91 1.14119
48 3.41344 70 1.64002 92 1.12932
49 3.28747 71 1.59723 93 1.11709
50 3.16694 72 1.55674 94 1.10423
51 3.05154 73 1.51862 95 1.09045
52 2.94120 74 1.48292 96 1.07580
53 2.83570 75 1.44965 97 1.06037
54 2.73495 76 1.41875 98 1.04422
55 2.63880 77 1.39005 99 1.02648
56 2.54704 78 1.36333 100+ 1.01000
<FN>
<F*> Attained Age is the younger Insured's Attained Age even if no longer
living.
</TABLE>
11221NP
<PAGE> 8
<TABLE>
<CAPTION>
1. DEFINITIONS IN THIS POLICY
<C> <S>
WE, US AND OUR GENERAL AMERICAN LIFE INSURANCE COMPANY.
YOU AND YOUR THE OWNER OF THIS POLICY. THE OWNER MAY BE SOMEONE OTHER THAN THE INSUREDS.
IN THE APPLICATION THE WORDS "YOU" AND "YOUR" REFER TO THE PROPOSED INSURED
PERSON(S).
INSUREDS THE PERSONS WHOSE LIVES ARE INSURED UNDER THIS POLICY. SEE THE POLICY
SPECIFICATIONS PAGE.
LAST INSURED THE INSURED WHOSE DEATH SUCCEEDS THE DEATH OF ALL OTHER INSUREDS UNDER THIS POLICY.
ISSUE AGE THE AGE OF EACH INSURED AS OF HIS OR HER NEAREST BIRTHDAY TO THE ISSUE DATE.
ATTAINED AGE THE ISSUE AGE FOR AN INSURED PLUS THE NUMBER OF COMPLETED POLICY YEARS, WHETHER OR
NOT THE INSURED IS LIVING. THIS INCLUDES ANY PERIOD DURING WHICH THIS POLICY WAS
LAPSED.
ISSUE DATE THE EFFECTIVE DATE OF THE COVERAGE UNDER THIS POLICY WHICH IS THE ISSUE DATE SHOWN
ON THE POLICY SPECIFICATIONS PAGE. IT IS ALSO THE DATE FROM WHICH POLICY
ANNIVERSARIES, POLICY YEARS, AND POLICY MONTHS ARE MEASURED.
INVESTMENT THE DATE THE FIRST PREMIUM IS APPLIED TO THE GENERAL ACCOUNT AND/OR THE DIVISIONS
START DATE OF SEPARATE ACCOUNT ELEVEN. THIS DATE WILL BE THE LATER OF:
- THE ISSUE DATE OF THE POLICY; OR
- THE DATE WE RECEIVE THE FIRST PREMIUM AT OUR HOME OFFICE.
MONTHLY THE SAME DATE IN EACH SUCCEEDING MONTH AS THE ISSUE DATE EXCEPT THAT WHENEVER THE
ANNIVERSARY 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.
GENERAL ACCOUNT THE ASSETS HELD BY US, EXCLUDING ANY LOANS, OTHER THAN THOSE ALLOCATED TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN OR ANY OTHER SEPARATE ACCOUNT.
SEPARATE ACCOUNT SEPARATE ACCOUNT ELEVEN, A SEPARATE INVESTMENT ACCOUNT CREATED BY US TO RECEIVE AND
INVEST NET PREMIUMS RECEIVED FOR THIS POLICY OR OTHER POLICIES.
LOAN ACCOUNT THE ACCOUNT TO WHICH WE WILL TRANSFER FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN THE AMOUNT OF ANY POLICY LOAN.
LOAN SUBACCOUNT A LOAN SUBACCOUNT EXISTS FOR THE GENERAL ACCOUNT AND EACH DIVISION OF SEPARATE
ACCOUNT ELEVEN. 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.
VALUATION DATE EACH DAY THAT THE NEW YORK STOCK EXCHANGE IS OPEN FOR TRADING, WE ARE OPEN FOR
BUSINESS AND THE SEC HAS NOT RESTRICTED TRADING OR DECLARED AN EMERGENCY.
SEC THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION.
103018NP 3.01
(6/98)
<PAGE> 9
<CAPTION>
2. PERSONS WITH AN INTEREST IN THE POLICY
<C> <S>
OWNER THE OWNER OF THIS POLICY IS AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL
AGREEMENT ATTACHED TO THIS POLICY, UNLESS LATER CHANGED AS PROVIDED IN THIS POLICY.
IF THERE IS MORE THAN ONE OWNER AT A GIVEN TIME, ALL MUST EXERCISE THE RIGHTS OF
OWNERSHIP BY JOINT ACTION. OWNERSHIP MAY BE CHANGED IN ACCORDANCE WITH THE CHANGE
OF OWNER OR BENEFICIARY PROVISION.
YOU, AS OWNER, ARE ENTITLED TO EXERCISE ALL OWNERSHIP RIGHTS PROVIDED BY THIS
POLICY, WHILE IT IS IN FORCE. ANY PERSON WHOSE RIGHTS OF OWNERSHIP DEPEND UPON SOME
FUTURE EVENT WILL NOT POSSESS ANY PRESENT RIGHTS OF OWNERSHIP. IF THE OWNER IS A
TRUSTEE(S), WE MAY ACT IN RELIANCE UPON THE WRITTEN REQUEST OF ANY TRUSTEE AND WE
ARE NOT RESPONSIBLE FOR PROPER ADMINISTRATION OF THE TRUST. UNLESS OTHERWISE
PROVIDED, THE FINAL OWNER WILL BE THE ESTATE OF THE LAST OWNER TO DIE.
BENEFICIARY THE BENEFICIARY TO RECEIVE THE PROCEEDS IN THE EVENT OF THE LAST INSURED'S DEATH IS
AS SHOWN IN THE APPLICATION OR IN ANY SUPPLEMENTAL AGREEMENT ATTACHED TO THIS
POLICY, UNLESS LATER CHANGED AS PROVIDED IN THE POLICY. YOU MAY CHANGE THE
BENEFICIARY IN ACCORDANCE WITH THE CHANGE OF OWNER OR BENEFICIARY PROVISION. UNLESS
OTHERWISE STATED, THE BENEFICIARY HAS NO RIGHTS IN THIS POLICY BEFORE THE DEATH OF
THE LAST INSURED. IF THERE IS MORE THAN ONE BENEFICIARY AT THE DEATH OF THE LAST
INSURED, EACH WILL RECEIVE EQUAL PAYMENTS UNLESS OTHERWISE PROVIDED. UNLESS YOU
PROVIDE OTHERWISE, IF A BENEFICIARY DIES PRIOR TO THE LAST INSURED'S DEATH, THAT
BENEFICIARY'S SHARE WILL BE PAID TO THE LIVING BENEFICIARIES OF THAT CLASS. THE
DECEASED BENEFICIARY'S SHARE WILL BE PAID IN THE SAME PROPORTION AS THE LIVING
BENEFICIARIES' SHARES. IF THERE ARE NO BENEFICIARIES LIVING WHEN THE LAST INSURED
DIES, OR AT THE END OF ANY COMMON DISASTER PERIOD, THE PROCEEDS (COMMUTED IF
REQUIRED) WILL BE PAYABLE TO YOU, IF YOU ARE LIVING, OR TO YOUR ESTATE.
ANY PAYMENT WE MAKE WILL TERMINATE OUR LIABILITY WITH RESPECT TO SUCH PAYMENT. IF
THE INSUREDS DESIGNATE SPECIFIC AMOUNTS TO BE PAID TO SPECIFIC BENEFICIARIES AND
THE TOTAL OF THOSE AMOUNTS IS OTHER THAN THE AMOUNT OF PROCEEDS PAYABLE, THE
PROCEEDS PAYABLE WILL BE ADJUSTED AND PAID IN THE SAME PROPORTION AS THE SPECIFIC
AMOUNTS WERE TO BE PAID.
ANY TERM USED IN THE MASCULINE, FEMININE, SINGULAR OR PLURAL, WILL INCLUDE OR BE
THE OPPOSITE GENDER OR NUMBER WHERE NECESSARY.
IF ANY BENEFICIARY DESIGNATION IN THE APPLICATION INCLUDES ANY OF THE FOLLOWING
PROVISIONS, THE TERMS OF THAT PROVISION SHOWN BELOW WILL APPLY:
1. PER STIRPES. THE SHARE OF A DECEASED BENEFICIARY WILL BE PAID TO THAT
BENEFICIARY'S SURVIVING CHILDREN, EQUALLY.
2. COMMON DISASTER. WE WILL NOT MAKE PAYMENT UNTIL THE STATED NUMBER OF DAYS
AFTER THE LAST INSURED'S DEATH. IF ANY BENEFICIARY DIES DURING THIS
PERIOD, OR IF THE ORDER OF DEATH OF ANY BENEFICIARY AND THE LAST INSURED
CANNOT BE DETERMINED, WE WILL PAY AS THOUGH SUCH BENEFICIARY DIED FIRST.
3. TRUST FOR MINOR BENEFICIARY. THE ORIGINAL OR SUCCESSOR TRUSTEE FOR A MINOR
BENEFICIARY WILL SERVE WITHOUT BOND AND EXERCISE ALL RIGHTS AND RECEIVE
ALL PROCEEDS FOR THE MINOR BENEFICIARY. SUCH PROCEEDS WILL BE HELD IN A
SEPARATE TRUST AND USED AT THE TRUSTEE'S DISCRETION FOR SUCH MINOR'S
EDUCATION, SUPPORT, CARE AND GENERAL WELFARE. THE TRUST WILL TERMINATE
AT THE LEGAL AGE OF MAJORITY OR PRIOR DEATH OF THE MINOR BENEFICIARY.
ANY FUNDS THEN HELD BY THE TRUSTEE WILL BE PAID IN ONE SUM TO SUCH
BENEFICIARY OR THE BENEFICIARY'S ESTATE. THE TRUST CAN BE REVOKED BY A
CHANGE OF BENEFICIARY UNDER THE POLICY. PAYMENT TO ANY TRUSTEE WILL
DISCHARGE US TO THE EXTENT OF SUCH PAYMENT.
103018NP 3.02
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<PAGE> 10
4. TRUST UNDER WILL. WHEN WE RECEIVE AT OUR HOME OFFICE:
A) CERTIFIED COPIES OF THE LAST WILL AND TESTAMENT OF THE NAMED TESTATOR;
AND
B) THE ORDER ADMITTING THE WILL TO PROBATE; AND IF SUCH WILL CREATED A
TRUST CAPABLE OF RECEIVING PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THESE DOCUMENTS, SATISFACTORY PROOF IS FURNISHED
THAT:
A) THE TESTATOR DIED INTESTATE; OR
B) THE WILL CREATED NO TRUST CAPABLE OF RECEIVING PROCEEDS; OR
C) THE TESTATOR WAS NOT EITHER INSURED, BUT SURVIVED THE LAST INSURED;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE NOT REQUIRED TO CHECK INTO THE VALIDITY,
GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST. SUCH TRUSTEE
DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER THE POLICY, INCLUDING THE
RIGHT TO CHANGE THE BENEFICIARY.
5. TRUST UNDER SEPARATE WRITTEN AGREEMENT. WHEN WE RECEIVE AT OUR HOME OFFICE
A WRITTEN STATEMENT FROM THE TRUSTEE NAMED IN THE BENEFICIARY DESIGNATION
THAT:
A) THE TRUST AGREEMENT IS IN FORCE; AND
B) THE AGREEMENT PERMITS THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO THE TRUSTEE.
IF, BEFORE WE RECEIVE THE TRUSTEE'S STATEMENT, SATISFACTORY PROOF IS
FURNISHED THAT:
A) THE TRUST AGREEMENT IS NOT IN EFFECT; OR
B) THE AGREEMENT DOES NOT PERMIT THE TRUSTEE TO RECEIVE THE PROCEEDS;
THEN WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED.
IF WE PAY UNDER ANY OF THESE CONDITIONS, WE WILL BE DISCHARGED TO THE
EXTENT OF SUCH PAYMENT. WE ARE ENTITLED TO RELY ON ANY STATEMENTS OR
DOCUMENTS FURNISHED TO US BY THE TRUSTEE AND ARE NOT REQUIRED TO CHECK
INTO THE VALIDITY, GENERAL TERMS OR PROPER ADMINISTRATION OF THE TRUST
AGREEMENT. SUCH TRUSTEE DESIGNATION WILL NOT AFFECT YOUR RIGHTS UNDER
THE POLICY, INCLUDING THE RIGHT TO CHANGE THE BENEFICIARY.
6. IRREVOCABLE BENEFICIARY. YOU CANNOT CHANGE AN IRREVOCABLE BENEFICIARY
WITHOUT THE WRITTEN CONSENT OF SUCH BENEFICIARY. ALSO, YOU CANNOT
EXERCISE ANY OTHER OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH
BENEFICIARY, IF THE EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF
DIMINISHING THE RIGHTS AND INTEREST OF THE IRREVOCABLE BENEFICIARY.
7. CREDITOR BENEFICIARY. PROCEEDS PAYABLE TO ANY CREDITOR BENEFICIARY ARE
LIMITED TO ITS PROVABLE INTEREST. THE BALANCE OF ANY PROCEEDS WILL BE
PAID TO ANY OTHER NAMED BENEFICIARY. IF THERE IS NO OTHER BENEFICIARY
LIVING, WE WILL PAY THE PROCEEDS TO YOU, UNLESS OTHERWISE PROVIDED. YOU
CANNOT CHANGE A CREDITOR BENEFICIARY WITHOUT THE WRITTEN CONSENT OF THE
CREDITOR OR RELEASE OF ITS INTEREST. ALSO, YOU CANNOT EXERCISE ANY OTHER
OWNERSHIP RIGHTS WITHOUT THE CONSENT OF SUCH BENEFICIARY, IF THE
EXERCISE OF SUCH RIGHTS WILL HAVE THE EFFECT OF DIMINISHING THE RIGHTS
AND INTEREST OF THE CREDITOR BENEFICIARY.
103018NP 3.03
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<PAGE> 11
CHANGE OF DURING THE LIFETIME OF EITHER INSURED YOU MAY CHANGE THE OWNERSHIP AND BENEFICIARY
OWNER OR DESIGNATIONS, SUBJECT TO ANY RESTRICTIONS AS STATED IN THE OWNER OR BENEFICIARY
BENEFICIARY PROVISIONS. YOU MUST MAKE THE CHANGE IN WRITTEN FORM SATISFACTORY TO US. IF
ACCEPTABLE TO US THE CHANGE WILL TAKE EFFECT AS OF THE TIME YOU SIGNED THE REQUEST,
WHETHER OR NOT EITHER INSURED IS LIVING WHEN WE RECEIVE YOUR REQUEST AT OUR HOME
OFFICE. THE CHANGE WILL BE SUBJECT TO ANY ASSIGNMENT OF THIS POLICY OR OTHER LEGAL
RESTRICTIONS. IT WILL ALSO BE SUBJECT TO ANY PAYMENT WE MADE OR ACTION WE TOOK
BEFORE WE RECEIVED YOUR WRITTEN NOTICE OF THE CHANGE. WE HAVE THE RIGHT TO REQUIRE
THE POLICY FOR ENDORSEMENT BEFORE WE ACCEPT THE CHANGE.
IF YOU ARE ALSO THE BENEFICIARY OF THE POLICY AT THE TIME OF THE LAST INSURED'S DEATH,
YOU MAY DESIGNATE SOME OTHER PERSON TO RECEIVE THE PROCEEDS OF THE POLICY WITHIN 60 DAYS
AFTER THE LAST INSURED'S DEATH.
ASSIGNMENTS WE WILL NOT BE BOUND BY AN ASSIGNMENT OF THE POLICY OR OF ANY INTEREST IN IT
UNLESS:
1. THE ASSIGNMENT IS MADE AS A WRITTEN INSTRUMENT,
2. YOU FILE THE ORIGINAL INSTRUMENT OR A CERTIFIED COPY WITH US AT OUR HOME
OFFICE, AND
3. WE SEND YOU AN ACKNOWLEDGED COPY.
WE ARE NOT RESPONSIBLE FOR DETERMINING THE VALIDITY OF ANY ASSIGNMENT.
IF A CLAIM IS BASED ON AN ASSIGNMENT, WE MAY REQUIRE PROOF OF INTEREST OF THE
CLAIMANT. A VALID ASSIGNMENT WILL TAKE PRECEDENCE OVER ANY CLAIM OF A BENEFICIARY.
THIS ASSIGNMENT PROVISION WILL NOT APPLY WHEN THIS CONTRACT IS SOLD IN A TAX
QUALIFIED PLAN. NO ASSIGNMENT WILL BE PERMITTED IN SUCH CASES.
REQUESTS FOR SUBMIT ALL REQUESTS FOR CHANGE AND/OR INFORMATION IN WRITING TO OUR HOME OFFICE -
CHANGES AND/OR GENERAL AMERICAN LIFE INSURANCE COMPANY, P.O. BOX 14490, ST. LOUIS, MO 63178.
INFORMATION
<CAPTION>
3. GENERAL PROVISIONS
<C> <S>
THE CONTRACT WE HAVE ISSUED THIS POLICY IN CONSIDERATION OF THE APPLICATION AND PAYMENT OF
PREMIUMS. THE POLICY, THE APPLICATION FOR IT, AND ANY RIDERS CONSTITUTE THE ENTIRE
CONTRACT AND ARE ATTACHED TO AND MADE A PART OF THE POLICY WHEN THE INSURANCE
APPLIED FOR IS ACCEPTED. A COPY OF ANY APPLICATION FOR REINSTATEMENT WILL BE SENT
TO YOU FOR ATTACHMENT TO THIS POLICY AND WILL BECOME PART OF THE CONTRACT OF
REINSTATEMENT AND OF THIS POLICY. THE POLICY MAY BE CHANGED BY MUTUAL AGREEMENT.
ANY CHANGE MUST BE IN WRITING AND APPROVED BY OUR PRESIDENT, VICE-PRESIDENT OR
SECRETARY. OUR AGENTS HAVE NO AUTHORITY TO ALTER OR MODIFY ANY TERMS, CONDITIONS,
OR AGREEMENTS OF THIS POLICY, OR TO WAIVE ANY OF ITS PROVISIONS.
CONFORMITY WITH IF ANY PROVISION IN THIS POLICY IS IN CONFLICT WITH THE LAWS OF THE STATE WHICH
STATUTES GOVERN THIS POLICY, THE PROVISION WILL BE DEEMED TO BE AMENDED TO CONFORM WITH SUCH
LAWS. IN ADDITION, WE RESERVE THE RIGHT TO CHANGE THIS POLICY IF WE DETERMINE THAT
A CHANGE IS NECESSARY TO CAUSE THIS POLICY TO COMPLY WITH, OR GIVE YOU THE BENEFIT
OF, ANY FEDERAL OR STATE STATUTE, RULE, OR REGULATION, INCLUDING, BUT NOT LIMITED
TO, REQUIREMENTS FOR LIFE INSURANCE CONTRACTS UNDER THE INTERNAL REVENUE CODE, OR
ITS REGULATIONS OR PUBLISHED RULINGS.
STATEMENTS IN ALL STATEMENTS MADE BY THE INSUREDS OR ON THEIR BEHALF, OR BY THE APPLICANT, WILL
APPLICATION BE DEEMED REPRESENTATIONS AND NOT WARRANTIES, EXCEPT IN THE CASE OF FRAUD. MATERIAL
MISSTATEMENTS WILL NOT BE USED TO VOID THE POLICY OR ANY RIDER, OR DENY A CLAIM
UNLESS MADE IN THE APPLICATION FOR A POLICY OR A RIDER.
103018NP 3.04
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<PAGE> 12
CLAIMS OF TO THE EXTENT PERMITTED BY LAW, NEITHER THE POLICY NOR ANY PAYMENT UNDER IT WILL BE
CREDITORS SUBJECT TO THE CLAIMS OF CREDITORS OR TO ANY LEGAL PROCESS.
CONVERSION RIGHTS WHILE YOUR POLICY IS IN FORCE, YOU HAVE A ONE TIME RIGHT DURING THE FIRST TWO
POLICY YEARS TO TRANSFER ALL OF YOUR CASH VALUE FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN TO THE GENERAL ACCOUNT.
IF, AT ANY TIME DURING THE FIRST TWO POLICY YEARS, YOU REQUEST IN WRITING THE
TRANSFER OF THE CASH VALUE HELD IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN TO THE
GENERAL ACCOUNT AND YOU INDICATE THAT YOU ARE MAKING THIS TRANSFER IN EXERCISE OF
YOUR CONVERSION RIGHTS, THE TRANSFER WILL NOT BE SUBJECT TO A TRANSFER CHARGE OR
TRANSFER LIMITS, IF ANY. AT THE TIME OF SUCH TRANSFER, THERE WILL NOT BE ANY EFFECT
ON THE POLICY'S DEATH BENEFIT, FACE AMOUNT, NET AMOUNT AT RISK, RATE CLASS OR ISSUE
AGE.
IF YOU EXERCISE YOUR ONE TIME CONVERSION RIGHT, WE WILL AUTOMATICALLY ALLOCATE ALL
FUTURE NET PREMIUMS TO THE GENERAL ACCOUNT.
MISSTATEMENT OF IF THERE IS A MISSTATEMENT OF AGE OR SEX FOR EITHER INSURED IN THE APPLICATIONS,
AGE AND THE AMOUNT OF THE DEATH BENEFIT WILL BE THAT WHICH WOULD BE PURCHASED BY THE MOST
CORRECTIONS RECENT MONTHLY COST OF INSURANCE CHARGE AT THE CORRECT AGE OR SEX.
IF WE MAKE ANY PAYMENT OR POLICY CHANGES IN GOOD FAITH, RELYING ON OUR RECORDS, OR
EVIDENCE SUPPLIED TO US, OUR DUTY WILL BE FULLY DISCHARGED. WE RESERVE THE RIGHT TO
CORRECT ANY ERRORS IN THE POLICY.
INCONTESTABILITY WE CANNOT CONTEST THIS POLICY AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF
EITHER INSURED FOR TWO YEARS FROM ITS ISSUE DATE. WE CANNOT CONTEST ANY
REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL MISSTATEMENTS MADE CONCERNING
SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING THE LIFETIME OF EITHER
INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVE THE REINSTATEMENT. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE WE APPROVED THE REQUEST FOR REINSTATEMENT,
WE CAN NOT CONTEST ANY REINSTATEMENT OF THIS POLICY, WITH REGARD TO MATERIAL
MISSTATEMENTS MADE CONCERNING SUCH REINSTATEMENT, AFTER IT HAS BEEN IN FORCE DURING
THE LIFETIME OF THAT INSURED FOR A PERIOD OF TWO YEARS FROM THE DATE WE APPROVED
THE REINSTATEMENT. THIS PROVISION WILL NOT APPLY TO ANY RIDER WHICH CONTAINS ITS
OWN INCONTESTABILITY CLAUSE.
SUICIDE EXCLUSION IF EITHER INSURED DIES BY SUICIDE, WHILE SANE OR INSANE, WITHIN TWO YEARS FROM THE
ISSUE DATE (OR WITHIN THE MAXIMUM PERIOD PERMITTED BY LAW OF THE STATE IN WHICH
THIS POLICY WAS DELIVERED, IF LESS THAN TWO YEARS), THE AMOUNT PAYABLE WILL BE
LIMITED TO THE AMOUNT OF PREMIUMS PAID, LESS ANY OUTSTANDING POLICY LOANS WITH
INTEREST TO THE DATE OF DEATH, AND LESS ANY PARTIAL WITHDRAWALS.
CHANGE OF WHILE THIS POLICY IS IN FORCE, YOU MAY CHANGE ONE OR BOTH OF THE INSUREDS. TO DO
INSURED THIS, YOU MUST MEET THE REQUIREMENTS ESTABLISHED BY US. ANY RIDER ATTACHED TO THIS
POLICY MAY BE CONTINUED ONLY WITH OUR CONSENT. WE RESERVE THE RIGHT TO CHARGE A
NOMINAL FEE FOR PROCESSING A CHANGE OF INSURED.
ANNUAL REPORT EACH YEAR A REPORT WILL BE SENT TO YOU WHICH SHOWS THE CURRENT POLICY VALUES,
PREMIUMS PAID AND DEDUCTIONS MADE SINCE THE LAST REPORT, AND ANY OUTSTANDING POLICY
LOANS.
PROJECTION OF YOU MAY MAKE A WRITTEN REQUEST TO US FOR A PROJECTION OF ILLUSTRATIVE FUTURE CASH
BENEFITS AND VALUES AND DEATH BENEFITS. IF REQUESTED MORE THAN ONCE PER POLICY YEAR, THIS
VALUES PROJECTION WILL BE FURNISHED TO YOU FOR A NOMINAL FEE. THIS FEE WILL NOT EXCEED THE
MAXIMUM FEE FOR PROJECTION OF BENEFITS AND VALUES SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
103018NP 3.05
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<PAGE> 13
<CAPTION>
4. SEPARATE ACCOUNT PROVISIONS
<C> <S>
SEPARATE ACCOUNT THE VARIABLE BENEFITS UNDER THIS POLICY ARE PROVIDED THROUGH INVESTMENTS IN
SEPARATE ACCOUNT ELEVEN. THIS ACCOUNT IS USED FOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES AND, IF PERMITTED BY LAW, MAY BE USED FOR OTHER POLICIES OR
CONTRACTS AS WELL.
WE HOLD THE ASSETS OF SEPARATE ACCOUNT ELEVEN. THESE ASSETS ARE HELD SEPARATELY
FROM THE ASSETS HELD IN THE GENERAL ACCOUNT. INCOME, GAINS AND LOSSES---WHETHER OR
NOT REALIZED---FROM ASSETS ALLOCATED TO SEPARATE ACCOUNT ELEVEN WILL BE CREDITED TO
OR CHARGED AGAINST THE ACCOUNT WITHOUT REGARD TO OUR OTHER INCOME, GAINS OR LOSSES.
THE PORTION OF THE ASSETS HELD BY SEPARATE ACCOUNT ELEVEN EQUAL TO THE RESERVES AND
OTHER POLICY LIABILITIES WITH RESPECT TO SEPARATE ACCOUNT ELEVEN WILL NOT BE
CHARGED WITH LIABILITIES THAT ARISE FROM ANY OTHER BUSINESS WE MAY CONDUCT. WE HAVE
THE RIGHT TO TRANSFER TO OUR GENERAL ACCOUNT ANY ASSETS OF SEPARATE ACCOUNT ELEVEN
WHICH ARE IN EXCESS OF THE RESERVES AND OTHER POLICY LIABILITIES OF SEPARATE
ACCOUNT ELEVEN.
SEPARATE ACCOUNT ELEVEN IS REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. SEPARATE
ACCOUNT ELEVEN IS ALSO SUBJECT TO THE LAWS OF THE STATE OF MISSOURI, WHICH REGULATE
THE OPERATIONS OF INSURANCE COMPANIES INCORPORATED IN MISSOURI. THE INVESTMENT
POLICY OF SEPARATE ACCOUNT ELEVEN WILL NOT BE CHANGED WITHOUT THE APPROVAL OF THE
INSURANCE COMMISSIONER OF THE STATE OF MISSOURI. THE APPROVAL PROCESS IS ON FILE
WITH THE INSURANCE COMMISSIONER OF THE STATE IN WHICH THIS POLICY WAS DELIVERED.
DIVISIONS SEPARATE ACCOUNT ELEVEN HAS SEVERAL DIVISIONS. EACH DIVISION INVESTS IN A
CORRESPONDING INVESTMENT PORTFOLIO FROM ONE OR MORE REGISTERED INVESTMENT
COMPANIES.
INCOME, GAINS AND LOSSES---WHETHER OR NOT REALIZED---FROM THE ASSETS OF EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN ARE CREDITED TO OR CHARGED AGAINST THAT
DIVISION WITHOUT REGARD TO INCOME, GAINS OR LOSSES IN OTHER DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR IN THE GENERAL ACCOUNT.
WE WILL VALUE THE ASSETS OF EACH DIVISION OF SEPARATE ACCOUNT ELEVEN AT THE END OF
EACH VALUATION PERIOD. A VALUATION PERIOD IS THE PERIOD BETWEEN TWO SUCCESSIVE
VALUATION DATES. A VALUATION DATE IS ANY DAY THAT BENEFITS VARY AND ON WHICH THE
NEW YORK STOCK EXCHANGE AND OUR HOME OFFICE ARE OPEN FOR BUSINESS OR ANY OTHER DAY
THAT MAY BE REQUIRED BY ANY APPLICABLE SECURITIES AND EXCHANGE COMMISSION RULES AND
REGULATIONS.
TRANSFERS YOU MAY TRANSFER AMOUNTS AS FOLLOWS:
- BETWEEN THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN;
OR
- AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
- THE FIRST 12 REQUESTED TRANSFERS AND/OR PARTIAL WITHDRAWALS PER POLICY
YEAR WILL BE ALLOWED FREE OF CHARGE; THEREAFTER WE MAY IMPOSE A TRANSFER
CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER CHARGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THESE TRANSFERS WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
- WE MUST RECEIVE A REQUEST FOR TRANSFER IN A FORM ACCEPTABLE TO US.
- TRANSFERS FROM OR AMONG THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE
AT LEAST $500.00 OR THE ENTIRE AMOUNT YOU HAVE IN A DIVISION, IF SMALLER.
103018NP 3.06
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<PAGE> 14
- TRANSFERS AND/OR PARTIAL WITHDRAWALS FROM THE GENERAL ACCOUNT TO THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN MUST BE AT LEAST $500.00. THE
MAXIMUM AMOUNT OF ALL TRANSFERS AND PARTIAL WITHDRAWALS FROM THE GENERAL
ACCOUNT IN ANY POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE GENERAL ACCOUNT MAXIMUM
WITHDRAWAL PERCENT LIMIT, AS SHOWN ON THE POLICY SPECIFICATIONS
PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
- THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER ANY TRANSFER IN TO THE
GENERAL ACCOUNT CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
WE MAY REVOKE OR MODIFY THE TRANSFER PRIVILEGE AT ANY TIME, INCLUDING THE MINIMUM
AMOUNT TRANSFERABLE, THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT, AND THE
TRANSFER CHARGE, IF ANY.
ADDITION, DELETION WE RESERVE THE RIGHT, SUBJECT TO COMPLIANCE WITH APPLICABLE LAW, TO MAKE ADDITIONS
OR SUBSTITUTION TO, DELETIONS FROM, OR SUBSTITUTIONS FOR THE SHARES OF A FUND THAT ARE HELD BY
OF INVESTMENTS SEPARATE ACCOUNT ELEVEN OR THAT SEPARATE ACCOUNT ELEVEN MAY PURCHASE. WE RESERVE
THE RIGHT TO ELIMINATE THE SHARES OF ANY OF THE FUNDS OF THIS POLICY AND TO
SUBSTITUTE SHARES OF ANOTHER FUND OF A REGISTERED INVESTMENT COMPANY, IF THE SHARES
OR FUNDS ARE NO LONGER AVAILABLE FOR INVESTMENT OR IF IN OUR JUDGEMENT, FURTHER
INVESTMENT IN ANY FUND SHOULD BECOME INAPPROPRIATE IN VIEW OF THE PURPOSE OF THE
POLICY. WE WILL NOT SUBSTITUTE ANY SHARES ATTRIBUTABLE TO THE OWNER'S INTEREST IN A
DIVISION OF SEPARATE ACCOUNT ELEVEN WITHOUT NOTICE TO THE OWNER AND COMPLIANCE WITH
THE INVESTMENT COMPANY ACT OF 1940. THIS WILL NOT PREVENT SEPARATE ACCOUNT ELEVEN
FROM PURCHASING OTHER SECURITIES FOR OTHER SERIES OR CLASSES OF POLICIES, OR FROM
PERMITTING CONVERSION BETWEEN SERIES OR CLASSES OF POLICIES OR CONTRACTS ON THE
BASIS OF REQUESTS MADE BY OWNERS.
WE RESERVE THE RIGHT TO ESTABLISH ADDITIONAL DIVISIONS OF SEPARATE ACCOUNT ELEVEN
WHICH WOULD INVEST IN SHARES OF REGISTERED INVESTMENT COMPANIES AND TO MAKE SUCH
DIVISIONS AVAILABLE TO SUCH CLASS OR SERIES OF POLICIES AS WE DEEM APPROPRIATE. WE
ALSO RESERVE THE RIGHT TO ELIMINATE OR COMBINE EXISTING DIVISIONS OF SEPARATE
ACCOUNT ELEVEN OR TO TRANSFER ASSETS BETWEEN DIVISIONS.
IF WE CONSIDER IT TO BE IN THE BEST INTEREST OF PERSONS HAVING VOTING RIGHTS UNDER
THE POLICIES, SEPARATE ACCOUNT ELEVEN MAY BE OPERATED AS A MANAGEMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940; IT MAY BE DEREGISTERED UNDER THAT ACT IN THE
EVENT REGISTRATION IS NO LONGER REQUIRED; IT MAY BE COMBINED WITH OTHER SEPARATE
ACCOUNTS; OR ITS ASSETS MAY BE TRANSFERRED TO OTHER SEPARATE ACCOUNTS.
103018NP 3.07
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<PAGE> 15
<CAPTION>
5. POLICY BENEFITS
<C> <S>
POLICY PROCEEDS THE POLICY PROCEEDS ARE:
1. THE DEATH BENEFIT UNDER THE CONTRACT TYPE THEN IN EFFECT; PLUS
2. THE MONTHLY COST OF INSURANCE FOR THE PORTION OF THE POLICY MONTH FROM THE
DATE OF THE LAST INSURED'S DEATH TO THE END OF THE POLICY MONTH OF THAT
DEATH; MINUS
3. ANY PAYMENT DUE UNDER THE GRACE PERIOD PROVISION AS OF THE DATE OF THE
LAST INSURED'S DEATH; MINUS
4. ANY LOAN AND LOAN INTEREST DUE.
DEATH BENEFIT PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH BENEFIT DEPENDS UPON THE
CONTRACT TYPE IN EFFECT ON THE DATE OF THE LAST INSURED'S DEATH. THE CONTRACT TYPE
IN EFFECT IS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
OPTION A CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(d) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT PLUS THE CASH VALUE ON THE DATE OF THE LAST INSURED'S
DEATH; OR
2. THE APPLICABLE PERCENTAGE OF THE CASH VALUE ON THE DATE OF THE LAST
INSURED'S DEATH AS DESCRIBED IN SECTION 7702(d) OF THE INTERNAL REVENUE
CODE OF 1986 OR ANY APPLICABLE SUCCESSOR PROVISION AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE DEATH BENEFIT IS THE GREATER OF:
1. THE FACE AMOUNT; OR
2. THE CASH VALUE ON THE DATE OF THE LAST INSURED'S DEATH MULTIPLIED BY THE
YOUNGER INSURED'S APPLICABLE ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S
DEATH BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
NOTWITHSTANDING ANYTHING IN THIS POLICY, THE DEATH BENEFIT WILL IN NO CASE BE LESS
THAN THE AMOUNT NECESSARY TO CAUSE THE POLICY TO MEET THE REQUIREMENTS FOR THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
APPLICABLE THE PERCENTAGES AS CURRENTLY DESCRIBED IN SECTION 7702(d) OF THE INTERNAL REVENUE
PERCENTAGE: CODE OF 1986 AND MODIFIED FOR AGES 95 AND ABOVE ARE AS FOLLOWS:
<CAPTION>
IN THE CASE IN WHICH THE YOUNGER THE APPLICABLE PERCENTAGE WILL
INSURED'S ATTAINED AGE AS OF THE DECREASE BY A RATABLE PORTION
BEGINNING OF THE CONTRACT YEAR IS: FOR EACH FULL YEAR:
MORE THAN: BUT NOT MORE THAN: FROM: TO:
<S> <C> <C> <C>
0 40 250 250
40 45 250 215
45 50 215 185
50 55 185 150
55 60 150 130
60 65 130 120
65 70 120 115
70 75 115 105
75 90 105 105
90 95 105 101
95 OR 101
HIGHER
104012NP 4.01
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<PAGE> 16
<C> <S>
CONTINUATION IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE DEATH
OF THE POLICY BENEFIT WILL BE 101% OF THE POLICY'S CASH VALUE.
BEYOND ATTAINED
AGE 100 PLEASE NOTE: THIS POLICY MAY NOT QUALIFY AS LIFE INSURANCE AFTER THE YOUNGER
INSURED'S ATTAINED AGE 100 AND MAY BE SUBJECT TO TAX CONSEQUENCES. PLEASE CONSULT A
TAX ADVISER PRIOR TO CONTINUING THE POLICY BEYOND THE YOUNGER INSURED'S ATTAINED
AGE 100. IT IS POSSIBLE THAT INSURANCE COVERAGE MAY NOT CONTINUE EVEN IF PLANNED
PREMIUMS ARE PAID IN A TIMELY MANNER.
POLICY CHANGES YOU MAY REQUEST POLICY CHANGES AT ANY TIME UNLESS WE SPECIFICALLY INDICATE
OTHERWISE. WE LIMIT THE NUMBER OF CHANGES TO ONE PER POLICY YEAR, AND WE DO NOT
PERMIT CHANGES IN THE FIRST POLICY YEAR. THE TYPES OF CHANGES ALLOWED ARE EXPLAINED
BELOW.
NO CHANGE WILL BE PERMITTED THAT WOULD RESULT IN THIS POLICY NOT SATISFYING THE
DEFINITION OF LIFE INSURANCE UNDER THE INTERNAL REVENUE CODE OF 1986 OR ANY
APPLICABLE SUCCESSOR PROVISION.
FACE AMOUNT THE FACE AMOUNT MAY BE DECREASED BY SENDING US A WRITTEN REQUEST.
DECREASES
ANY DECREASE IN FACE AMOUNT WILL BE SUBJECT TO THE FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. THE FACE AMOUNT REMAINING IN FORCE AFTER ANY REQUESTED DECREASE MAY NOT BE
LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE.
3. ANY DECREASE MUST BE AT LEAST THE MINIMUM FACE AMOUNT DECREASE AS SHOWN ON
THE POLICY SPECIFICATIONS PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT AS EXPLAINED IN THE
SURRENDER CHARGE PROVISION.
WE WILL AMEND YOUR POLICY TO SHOW THE EFFECTIVE DATE OF THE DECREASE.
YOU MAY NOT INCREASE THE FACE AMOUNT OF THIS POLICY.
CHANGE IN IF THE CONTRACT TYPE IN EFFECT IS OPTION A OR OPTION B, YOU MAY CHANGE THE CONTRACT
CONTRACT TYPE TYPE BY SENDING US A WRITTEN REQUEST. THE EFFECTIVE DATE OF THE CHANGE WILL BE THE
MONTHLY ANNIVERSARY ON OR FOLLOWING THE DATE WE RECEIVE YOUR REQUEST. ON THE
EFFECTIVE DATE OF THIS CHANGE THE DEATH BENEFIT PAYABLE DOES NOT CHANGE, BUT THE
FACE AMOUNT MAY CHANGE.
IF THE CONTRACT TYPE IN EFFECT IS OPTION B, YOU MAY CHANGE IT TO OPTION A. THE FACE
AMOUNT WILL BE INCREASED TO EQUAL THE DEATH BENEFIT ON THE EFFECTIVE DATE OF
CHANGE. THE CONTRACT TYPE CANNOT BE CHANGED FROM OPTION B TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION A, YOU MAY CHANGE IT TO OPTION B. PROOF
THAT THE INSUREDS ARE INSURABLE BY OUR STANDARDS ON THE DATE OF THE CHANGE MUST BE
SUBMITTED. THE FACE AMOUNT WILL BE DECREASED TO EQUAL THE DEATH BENEFIT LESS THE
CASH VALUE ON THE EFFECTIVE DATE OF CHANGE. THIS CHANGE MAY NOT BE MADE IF IT WOULD
RESULT IN A FACE AMOUNT WHICH IS LESS THAN THE MINIMUM FACE AMOUNT SHOWN ON THE
POLICY SPECIFICATIONS PAGE. A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE
AMOUNT AS EXPLAINED IN THE SURRENDER CHARGE PROVISION. THE CONTRACT TYPE CANNOT BE
CHANGED FROM OPTION A TO OPTION C.
IF THE CONTRACT TYPE IN EFFECT IS OPTION C, THE CONTRACT TYPE CANNOT BE CHANGED.
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<CAPTION>
6. PREMIUMS AND GRACE PERIOD
<C> <S>
PAYMENT OF YOUR FIRST PREMIUM IS DUE AS OF THE ISSUE DATE. WHILE EITHER INSURED IS LIVING,
PREMIUMS PREMIUMS AFTER THE FIRST MUST BE PAID AT OUR HOME OFFICE. A PREMIUM RECEIPT WILL BE
FURNISHED UPON REQUEST. IF THIS POLICY IS IN YOUR POSSESSION AND YOU HAVE NOT PAID
THE FIRST PREMIUM, IT IS NOT IN FORCE. IT WILL BE CONSIDERED THAT YOU HAVE THE
POLICY FOR INSPECTION ONLY.
PREMIUMS MAY BE PAID IN ANY AMOUNT AND AT ANY INTERVAL SUBJECT TO THE FOLLOWING
CONDITIONS:
1. AT THE END OF THE FIRST POLICY YEAR, YOUR TOTAL PREMIUM PAYMENTS FOR THIS
POLICY MUST BE GREATER THAN OR EQUAL TO THE MINIMUM INITIAL ANNUAL PREMIUM
AMOUNT AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. ANY SUBSEQUENT PREMIUM PAYMENT MUST BE AT LEAST $10.00.
3. TOTAL PREMIUMS PAID IN ANY POLICY YEAR FOR POLICIES ISSUED WITH THE OPTION
A OR B CONTRACT TYPE MAY NOT EXCEED AN AMOUNT THAT WOULD CAUSE THE
POLICY TO FAIL THE DEFINITION OF LIFE INSURANCE AS DEFINED BY SECTION
7702 OF THE INTERNAL REVENUE CODE OF 1986, OR ANY APPLICABLE SUCCESSOR
PROVISION THERETO. THE MAXIMUM PREMIUM LIMIT FOR THE FOLLOWING POLICY
YEAR WILL BE SHOWN ON YOUR ANNUAL REPORT.
ON ANY DATE THAT WE RECEIVE A PREMIUM WHICH CAUSES THE DEATH BENEFIT UNDER ANY OF
THE CONTRACT TYPES TO INCREASE BY AN AMOUNT THAT EXCEEDS THAT PREMIUM RECEIVED, WE
RESERVE THE RIGHT TO REFUSE THAT PREMIUM PAYMENT. WE MAY REQUIRE ADDITIONAL
EVIDENCE OF INSURABILITY BEFORE WE ACCEPT THE PREMIUM.
NET PREMIUM THE NET PREMIUM IS:
1. THE PREMIUM PAID; MINUS
2. THE PREMIUM PAID MULTIPLIED BY THE PREMIUM TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
3. THE PREMIUM PAID MULTIPLIED BY THE FEDERAL TAX CHARGE AS SHOWN ON THE
POLICY SPECIFICATIONS PAGE; MINUS
4. THE PREMIUM PAID MULTIPLIED BY THE APPLICABLE PERCENT OF PREMIUM CHARGE.
PREMIUM TAX A CHARGE WILL BE DEDUCTED FOR PREMIUM TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE PREMIUM TAX CHARGE DUE TO RATE CHANGES OF
THE GOVERNING JURISDICTION. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT PREMIUM
TAX RATE, IF CHANGED.
FEDERAL TAX A CHARGE WILL BE DEDUCTED FOR FEDERAL TAXES FROM EACH PREMIUM SUBMITTED. THE
CHARGE CURRENT CHARGE, AS A PERCENT OF THE PREMIUM, IS SHOWN ON THE POLICY SPECIFICATIONS
PAGE. WE RESERVE THE RIGHT TO CHANGE THE FEDERAL TAX CHARGE TO REFLECT A CHANGE IN
THE FEDERAL TAX LAW. WE WILL AMEND YOUR POLICY TO SHOW THE CURRENT FEDERAL TAX
CHARGE, IF CHANGED.
PERCENT OF A CHARGE WILL BE DEDUCTED FROM EACH PREMIUM SUBMITTED. THE MAXIMUM PERCENT OF
PREMIUM CHARGE PREMIUM CHARGES ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
THE PERCENT OF PREMIUM CHARGE WILL VARY, ON A NON-DISCRIMINATORY BASIS, BASED ON
THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM PERCENT OF PREMIUM
CHARGES SHOWN ON THE POLICY SPECIFICATIONS PAGE.
104012NP 4.03
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<PAGE> 18
ALLOCATION OF YOU DETERMINE THE ALLOCATION OF NET PREMIUMS AMONG THE GENERAL ACCOUNT AND THE
NET PREMIUMS DIVISIONS OF SEPARATE ACCOUNT ELEVEN. FOR ANY CHOSEN ALLOCATION THE MINIMUM
PERCENTAGE THAT MAY BE ALLOCATED IS 5% OF THE NET PREMIUM. PERCENTAGES MUST BE IN
WHOLE NUMBERS. THE GENERAL ACCOUNT CASH VALUE IMMEDIATELY AFTER PAYMENT OF THE
PREMIUM CANNOT EXCEED 1., BELOW, MULTIPLIED BY 2., BELOW:
1. THE GENERAL ACCOUNT CASH VALUE PLUS THE SEPARATE ACCOUNT CASH VALUE.
2. THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
THE INITIAL ALLOCATION IS SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. WE
MAY MODIFY THE GENERAL ACCOUNT MAXIMUM ALLOCATION PERCENT AT ANY TIME.
FOR ANY PREMIUM RECEIVED DURING THE "RIGHT TO EXAMINE POLICY" PERIOD, WE WILL
INITIALLY ALLOCATE THE NET PREMIUM TO THE DIVISION THAT INVESTS EXCLUSIVELY IN
SHARES OF OUR MONEY MARKET FUND UNLESS PROHIBITED BY STATE LAW. WHEN THIS PERIOD
EXPIRES, CASH VALUE IN THAT DIVISION WILL BE TRANSFERRED TO THE GENERAL ACCOUNT AND
THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ACCORDING TO THE ALLOCATION PERCENTAGES
SHOWN ON THE APPLICATION, A COPY OF WHICH IS ATTACHED. FOR ANY PREMIUM RECEIVED
AFTER THE "RIGHT TO EXAMINE POLICY" PERIOD, THE NET PREMIUM WILL BE ALLOCATED
ACCORDING TO THE ALLOCATION PERCENTAGES SHOWN ON THE POLICY SPECIFICATIONS PAGE OR
YOUR MOST RECENT ALLOCATION INSTRUCTIONS RECEIVED BY US.
YOUR RIGHT YOU MAY CHANGE THE ALLOCATION OF FUTURE NET PREMIUMS AMONG THE GENERAL ACCOUNT
TO CHANGE AND/OR THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN SUBJECT TO THE CONDITIONS OUTLINED
ALLOCATION IN THE ALLOCATION OF THE NET PREMIUMS PROVISION. THE CHANGE IN ALLOCATION
PERCENTAGES WILL TAKE EFFECT IMMEDIATELY UPON OUR RECEIPT OF YOUR WRITTEN REQUEST.
NO-LAPSE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE, THE SUM OF ALL
PREMIUMS PAID ON THIS 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, THIS POLICY WILL NOT
LAPSE AS A RESULT OF A CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY
SURRENDER CHARGE BEING INSUFFICIENT TO PAY THE MONTHLY DEDUCTION. THE NO LAPSE
PREMIUM DATE AND THE NO LAPSE ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THE NO LAPSE MONTHLY PREMIUM IS ONE TWELFTH OF THE NO LAPSE ANNUAL PREMIUM.
GRACE PERIOD IF, ON A MONTHLY ANNIVERSARY DAY PRIOR TO THE NO LAPSE PREMIUM DATE:
1. THE CASH VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE
IS INSUFFICIENT TO COVER THE MONTHLY DEDUCTION; AND
2. THE SUM OF ALL PREMIUMS PAID ON THIS POLICY, REDUCED BY ANY PARTIAL
WITHDRAWALS AND ANY OUTSTANDING LOAN BALANCE, IS LESS THAN THE SUM OF
THE NO LAPSE MONTHLY PREMIUMS FOR THE ELAPSED MONTHS SINCE THE ISSUE
DATE;
THEN THE GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR THE PAYMENT OF A PREMIUM
SUFFICIENT TO KEEP YOUR POLICY IN FORCE. THE NO LAPSE PREMIUM DATE AND THE NO LAPSE
ANNUAL PREMIUM ARE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
A CHANGE IN YOUR POLICY'S FACE AMOUNT, THE ADDITION OR DELETION OF A SUPPLEMENTAL
RIDER TO THIS POLICY, OR A CHANGE IN THE PREMIUM CLASS OF THE INSUREDS BEFORE THE
NO LAPSE PREMIUM DATE SHOWN ON THE POLICY SPECIFICATIONS PAGE MAY RESULT IN A
CHANGE IN THE NO LAPSE MONTHLY PREMIUM. THE NO LAPSE PREMIUM DATE WILL NOT BE
---
CHANGED.
IF, ON A MONTHLY ANNIVERSARY DAY ON OR AFTER THE NO LAPSE PREMIUM DATE, THE CASH
VALUE LESS ANY LOANS, LOAN INTEREST DUE, AND ANY SURRENDER CHARGE IS INSUFFICIENT
TO COVER THE NEXT MONTHLY DEDUCTION, A GRACE PERIOD OF 62 DAYS WILL BE ALLOWED FOR
THE PAYMENT OF A PREMIUM SUFFICIENT TO PAY THE MONTHLY DEDUCTION. (MONTHLY
DEDUCTION IS DEFINED IN THE CASH VALUES SECTION.)
104012NP 4.04
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<PAGE> 19
NOTICE OF THE AMOUNT OF PREMIUM REQUIRED TO BE PAID TO KEEP THIS POLICY IN FORCE
WILL BE SENT AT THE BEGINNING OF THE GRACE PERIOD TO YOUR LAST KNOWN ADDRESS AND TO
ANY ASSIGNEE ON RECORD. IF WE DO NOT RECEIVE A PREMIUM LARGE ENOUGH SO THAT THE NET
PREMIUM COVERS THE MONTHLY DEDUCTION BY THE END OF THE GRACE PERIOD, YOUR POLICY
WILL LAPSE AT THE END OF THAT 62 DAY PERIOD AND IT WILL THEN TERMINATE WITHOUT CASH
SURRENDER VALUE. IF THE LAST INSURED DIES DURING THE GRACE PERIOD, ANY PAST DUE
MONTHLY DEDUCTIONS WILL BE DEDUCTED FROM THE DEATH BENEFIT.
REINSTATEMENT YOU MAY REINSTATE YOUR LAPSED POLICY WITHIN 5 YEARS AFTER THE DATE OF LAPSE. THIS
MUST BE DONE PRIOR TO THE YOUNGER INSURED'S ATTAINED AGE 100. THE POLICY CAN NOT BE
REINSTATED IF IT HAS BEEN SURRENDERED. TO REINSTATE, YOU MUST SUBMIT THE FOLLOWING
ITEMS:
1. A WRITTEN REQUEST FOR REINSTATEMENT.
2. PROOF SATISFACTORY TO US THAT BOTH INSUREDS ARE INSURABLE BY OUR
STANDARDS, IF BOTH INSUREDS WERE ALIVE ON THE DATE THE POLICY LAPSED. IF
ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, YOU MUST
SUBMIT PROOF SATISFACTORY TO US THAT THAT INSURED IS INSURABLE BY OUR
STANDARDS.
3. A NET PREMIUM PAYMENT 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.
4. A PAYMENT TO COVER ANY LOAN INTEREST DUE AND UNPAID AT THE TIME OF LAPSE.
UPON RECEIPT OF THE ABOVE PAYMENTS, WE WILL DEDUCT ANY MONTHLY DEDUCTIONS AND LOAN
INTEREST DUE AND UNPAID AT THE TIME OF LAPSE. IF BOTH INSUREDS WERE ALIVE ON THE
DATE THE POLICY LAPSED, BOTH MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR
REINSTATEMENT. IF EITHER INSURED IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO
EFFECT. IF ONLY ONE INSURED WAS ALIVE ON THE DATE THE POLICY LAPSED, THAT INSURED
MUST BE ALIVE ON THE DATE WE APPROVE THE REQUEST FOR REINSTATEMENT. IF THAT INSURED
IS NOT ALIVE, SUCH APPROVAL IS VOID AND OF NO EFFECT.
THE REINSTATED POLICY WILL BE IN FORCE FROM THE DATE WE APPROVE THE REINSTATEMENT
APPLICATION. THERE WILL BE A FULL MONTHLY DEDUCTION FOR THE POLICY MONTH WHICH
INCLUDES THIS DATE. ANY APPLICATION FOR REINSTATEMENT BECOMES PART OF THE CONTRACT
OF REINSTATEMENT AND OF THIS POLICY.
ANY LOAN MAY BE PAID OR REINSTATED. ANY LOAN REINSTATED WILL CAUSE A CASH VALUE OF
AN EQUAL AMOUNT TO BE REINSTATED.
ANY LOAN REPAID AT THE TIME OF REINSTATEMENT WILL CAUSE AN INCREASE IN CASH VALUE
EQUAL TO THE AMOUNT OF THE REPAID LOAN.
THE SURRENDER CHARGE AT THE TIME OF REINSTATEMENT WILL BE THE SURRENDER CHARGE IN
EFFECT AT THE TIME OF LAPSE. IF ONLY A PORTION OF THE COVERAGE IS REINSTATED THEN
ONLY THE APPLICABLE PORTION OF THE SURRENDER CHARGE WILL BE REINSTATED. IF ONLY A
PORTION OF THE COVERAGE IS REINSTATED, THE CASH VALUE FOLLOWING REINSTATEMENT WILL
BE INCREASED BY THE APPLICABLE PORTION OF THE SURRENDER CHARGE IMPOSED AT THE TIME
OF LAPSE.
FOLLOWING REINSTATEMENT, THE NO-LAPSE PERIOD PROVISION WILL AGAIN BE APPLICABLE
UNTIL THE NO-LAPSE PREMIUM DATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, IF
SUFFICIENT PREMIUM IS PAID SO THAT, AS OF THE EFFECTIVE DATE OF REINSTATEMENT, THE
SUM OF ALL PREMIUMS PAID, REDUCED BY ANY PARTIAL WITHDRAWALS AND ANY LOANS, IS
GREATER THAN THE NO-LAPSE MONTHLY PREMIUMS MULTIPLIED BY THE NUMBER OF ELAPSED
MONTHS SINCE THE ISSUE DATE.
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<PAGE> 20
<CAPTION>
7. LOANS
<S> <C>
UPON WRITTEN REQUEST TO US, YOU MAY BORROW AN AMOUNT NOT IN EXCESS OF THE LOAN
VALUE OF YOUR POLICY WHILE IT IS IN FORCE. THE MINIMUM AMOUNT OF YOUR NET LOAN
REQUEST AT ANY ONE TIME MUST BE AT LEAST $500. YOUR POLICY WILL BE THE SOLE
SECURITY FOR SUCH LOAN. WE HAVE THE RIGHT TO REQUIRE YOUR POLICY FOR ENDORSEMENT.
THE LOAN VALUE IS THE CASH VALUE OF YOUR POLICY AT THE DATE OF THE LOAN REQUEST
PLUS INTEREST TO THE NEXT POLICY ANNIVERSARY AT THE GENERAL ACCOUNT CASH VALUE
GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE, REDUCED BY:
1. ANY EXISTING LOANS; AND
2. LOAN INTEREST TO THE NEXT LOAN INTEREST DUE DATE; AND
3. EVERY MONTHLY DEDUCTION DUE TO THE NEXT LOAN INTEREST DUE DATE; AND
4. ANY SURRENDER CHARGES.
YOU MAY ALLOCATE THE POLICY LOAN AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE POLICY LOAN
WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT, AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT, ON THE DATE OF THE POLICY LOAN.
CASH VALUE EQUAL TO THE POLICY LOAN ALLOCATED TO THE GENERAL ACCOUNT AND EACH
DIVISION OF SEPARATE ACCOUNT ELEVEN WILL BE TRANSFERRED TO THE LOAN ACCOUNT,
REDUCING THE CASH VALUE ACCORDINGLY. ANY CASH VALUE TRANSFERRED TO THE LOAN ACCOUNT
WILL BE ALLOCATED TO THE APPROPRIATE LOAN SUBACCOUNT.
LOAN INTEREST THE ACCRUED LOAN INTEREST WILL BE DUE THE EARLIEST OF:
DUE DATE
1. THE NEXT POLICY ANNIVERSARY DATE.
2. THE DATE OF TERMINATION OF THE POLICY.
3. THE DATE THE LOAN IS REPAID IN FULL.
4. THE DATE THE LOAN PLUS LOAN INTEREST ACCRUED EXCEEDS THE CASH VALUE LESS
ANY SURRENDER CHARGES.
INTEREST WILL BE PAYABLE ANNUALLY ON EACH POLICY ANNIVERSARY. IF YOU DO NOT PAY THE
INTEREST WHEN IT IS DUE ON A POLICY ANNIVERSARY, AN AMOUNT OF CASH VALUE EQUAL TO
THE LOAN INTEREST WILL ALSO BE TRANSFERRED TO THE LOAN ACCOUNT. WE WILL CHARGE THE
SAME RATE OF INTEREST ON THIS AMOUNT AS ON THE POLICY LOAN. THE AMOUNT TRANSFERRED
WILL BE DEDUCTED FROM THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT
ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL ACCOUNT AND THE
CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE
CASH VALUE IN THE LOAN ACCOUNT.
FIXED LOAN THE FIXED LOAN INTEREST RATE IS 4.5% FOR POLICY YEARS 1 THROUGH 10, 4.25% FOR
INTEREST RATES POLICY YEARS 11 THROUGH 20 AND 4.15% FOR POLICY YEARS 21 AND LATER. LOAN INTEREST
IS PAYABLE IN ARREARS.
LOAN ALL FUNDS RECEIVED WILL BE CREDITED TO YOUR POLICY AS A PREMIUM UNLESS CLEARLY
REPAYMENTS MARKED FOR LOAN REPAYMENT.
YOU MAY REPAY YOUR LOAN IN WHOLE OR IN PART AT ANY TIME BEFORE THE DEATH OF THE
LAST INSURED WHILE THE POLICY IS IN FORCE. WHEN A LOAN REPAYMENT IS MADE, CASH
VALUE SECURING THE DEBT IN THE LOAN ACCOUNT EQUAL TO THE LOAN REPAYMENT WILL BE
REPAID TO THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE
SAME PROPORTION THAT THE CASH VALUE IN THE LOAN ACCOUNT BEARS TO THE CASH VALUE IN
EACH LOAN SUBACCOUNT. UNPAID LOANS AND LOAN INTEREST WILL BE DEDUCTED FROM ANY
SETTLEMENT OF YOUR POLICY.
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<PAGE> 21
IF YOU FAIL TO MAKE REPAYMENTS WHEN THE TOTAL LOAN AND LOAN INTEREST DUE WOULD
EXCEED THE CASH VALUE, LESS ANY SURRENDER CHARGES, YOUR POLICY WILL TERMINATE. WE
WILL ALLOW YOU A GRACE PERIOD FOR SUCH PAYMENT OF LOANS AND LOAN INTEREST DUE. IN
SUCH EVENT THE POLICY BECOMES VOID AT THE END OF THE GRACE PERIOD. WE WILL MAIL
NOTICE TO YOUR LAST KNOWN ADDRESS, AND THAT OF ANY ASSIGNEE OF RECORD. THIS GRACE
PERIOD WILL EXPIRE 62 DAYS FROM THE MONTHLY ANNIVERSARY IMMEDIATELY BEFORE THE DATE
THE TOTAL LOAN AND LOAN INTEREST EXCEEDS THE CASH VALUE LESS ANY SURRENDER CHARGES;
OR 31 DAYS AFTER SUCH NOTICE HAS BEEN MAILED, IF LATER.
<CAPTION>
8. CASH VALUES
<C> <S>
CASH VALUE THE CASH VALUE OF YOUR POLICY IS EQUAL TO THE TOTAL OF:
- THE CASH VALUE IN THE GENERAL ACCOUNT; PLUS
- THE CASH VALUE IN THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN; PLUS
- THE CASH VALUE IN THE LOAN ACCOUNT.
CASH VALUE IF THIS POLICY IS IN FORCE BEYOND THE YOUNGER INSURED'S ATTAINED AGE 100, THE CASH
AFTER ATTAINED VALUE OF YOUR POLICY WILL BE DETERMINED IN THE SAME MANNER AS DESCRIBED BELOW;
AGE 100 EXCEPT NO DEDUCTIONS WILL BE MADE FOR MONTHLY COST OF INSURANCE CHARGES. PREMIUMS
CAN NOT BE PAID AFTER THE YOUNGER INSURED ATTAINS AGE 100.
GENERAL ACCOUNT THE CASH VALUE IN THE GENERAL ACCOUNT AS OF THE INVESTMENT START DATE IS EQUAL TO:
CASH VALUE
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
GENERAL ACCOUNT; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE GENERAL ACCOUNT.
THE CASH VALUE IN THE GENERAL ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE ON THE PRECEDING VALUATION DATE, WITH INTEREST ON SUCH
VALUE AT THE CURRENT RATE; PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE GENERAL ACCOUNT
ON THAT DAY; PLUS
- ANY AMOUNTS TRANSFERRED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY AMOUNT TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE GENERAL ACCOUNT
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM
THE GENERAL ACCOUNT ON THAT DAY; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED ON THAT DAY ATTRIBUTED TO THE
GENERAL ACCOUNT; MINUS
- ANY AMOUNT TRANSFERRED FROM THE GENERAL ACCOUNT TO THE LOAN ACCOUNT ON
THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, ANY WITHDRAWAL DUE TO A PRO RATA
SURRENDER PLUS ANY WITHDRAWAL TRANSACTION CHARGE MADE FROM THE GENERAL
ACCOUNT ON THAT DAY; MINUS
- IF THAT DAY IS A MONTHLY ANNIVERSARY, THE PORTION OF THE MONTHLY DEDUCTION
CHARGED TO THE GENERAL ACCOUNT, TO COVER THE POLICY MONTH WHICH STARTS ON
THAT DAY.
106010NP 6.02
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<PAGE> 22
GENERAL ACCOUNT THE INTEREST CREDITED TO THE GENERAL ACCOUNT CASH VALUE FOR A SPECIFIC DAY WILL BE
INTEREST RATE AT AN EFFECTIVE ANNUAL RATE NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED
INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
SEPARATE ACCOUNT THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON THE INVESTMENT START
CASH VALUE DATE IS EQUAL TO:
- THE PORTION OF THE INITIAL NET PREMIUM RECEIVED AND ALLOCATED TO THE
DIVISION; MINUS
- THE PORTION OF THE MONTHLY DEDUCTIONS DUE FROM THE ISSUE DATE THROUGH THE
INVESTMENT START DATE CHARGED TO THE DIVISION.
THE CASH VALUE IN EACH DIVISION OF SEPARATE ACCOUNT ELEVEN ON SUBSEQUENT VALUATION
DATES IS EQUAL TO:
- THE CASH VALUE IN THE DIVISION ON THE PRECEDING VALUATION DATE MULTIPLIED
BY THAT DIVISION'S NET INVESTMENT FACTOR FOR THE CURRENT VALUATION PERIOD;
PLUS
- ANY PORTION OF NET PREMIUM RECEIVED AND ALLOCATED TO THE DIVISION DURING
THE CURRENT VALUATION PERIOD; PLUS
- ANY AMOUNTS TRANSFERRED TO THE DIVISION FROM THE GENERAL ACCOUNT OR FROM
ANOTHER DIVISION DURING THE CURRENT VALUATION PERIOD; PLUS
- ANY LOAN REPAYMENTS ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION
PERIOD; PLUS
- THAT PORTION OF ANY INTEREST CREDITED ON OUTSTANDING LOANS WHICH IS
ALLOCATED TO THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY AMOUNTS TRANSFERRED PLUS ANY TRANSFER CHARGE FROM THE DIVISION DURING
THE CURRENT VALUATION PERIOD; MINUS
- ANY PARTIAL WITHDRAWAL PLUS ANY WITHDRAWAL TRANSACTION CHARGE FROM THE
DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- ANY PORTION OF THE SURRENDER CHARGE INCURRED DURING THE CURRENT VALUATION
PERIOD ATTRIBUTED TO THE DIVISION; MINUS
- ANY AMOUNT TRANSFERRED FROM THE DIVISION TO THE LOAN ACCOUNT DURING THAT
VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, ANY
WITHDRAWAL DUE TO A PRO RATA SURRENDER PLUS ANY WITHDRAWAL TRANSACTION
CHARGE FROM THE DIVISION DURING THE CURRENT VALUATION PERIOD; MINUS
- IF A MONTHLY ANNIVERSARY OCCURS DURING THE CURRENT VALUATION PERIOD, THE
PORTION OF THE MONTHLY DEDUCTION CHARGED TO THE DIVISION DURING THE
CURRENT VALUATION PERIOD TO COVER THE POLICY MONTH WHICH STARTS DURING
THAT VALUATION PERIOD.
NET INVESTMENT THE NET INVESTMENT FACTOR MEASURES THE INVESTMENT PERFORMANCE OF A DIVISION DURING
FACTOR A VALUATION PERIOD. THE NET INVESTMENT FACTOR FOR EACH DIVISION FOR A VALUATION
PERIOD IS CALCULATED AS FOLLOWS:
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD; PLUS
- 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
- THE CAPITAL LOSSES---REALIZED OR UNREALIZED--- CHARGED AGAINST THOSE
ASSETS DURING THE VALUATION PERIOD; MINUS
- ANY AMOUNT CHARGED AGAINST EACH DIVISION FOR TAXES, INCLUDING ANY TAX OR
OTHER ECONOMIC BURDEN RESULTING FROM THE APPLICATION OF TAX LAWS THAT WE
DETERMINE TO BE PROPERLY ATTRIBUTABLE TO THE DIVISIONS OF THE SEPARATE
ACCOUNT, OR ANY AMOUNT WE SET ASIDE DURING THE VALUATION PERIOD AS A
RESERVE FOR TAXES ATTRIBUTABLE TO THE OPERATION OR MAINTENANCE OF EACH
DIVISION; MINUS
106010NP 6.03
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<PAGE> 23
- A CHARGE NOT TO EXCEED THE DAILY INVESTMENT PERCENTAGE SHOWN ON THE POLICY
SPECIFICATIONS PAGE FOR EACH DAY IN THE VALUATION PERIOD. THIS
CORRESPONDS TO AN ANNUAL INVESTMENT PERCENTAGE OF THE MORTALITY AND
EXPENSE RISK PERCENTAGE SHOWN ON THE POLICY SPECIFICATIONS PAGE;
DIVIDED BY
- THE VALUE OF THE ASSETS AT THE END OF THE PRECEDING VALUATION PERIOD.
LOAN ACCOUNT THE CASH VALUE IN THE LOAN ACCOUNT AS OF THE INVESTMENT START DATE IS ZERO.
CASH VALUE
THE CASH VALUE IN THE LOAN ACCOUNT ON ANY DAY AFTER THE INVESTMENT START DATE IS
EQUAL TO:
- THE CASH VALUE IN THE LOAN ACCOUNT ON THE PRECEDING VALUATION DATE, WITH
INTEREST; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE GENERAL ACCOUNT ON
THAT DAY; PLUS
- ANY AMOUNT TRANSFERRED TO THE LOAN ACCOUNT FROM THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN ON THAT DAY; MINUS
- ANY LOAN REPAYMENTS ON THAT DAY; PLUS
- IF THAT DAY IS A POLICY ANNIVERSARY, AN AMOUNT DUE TO COVER THE LOAN
INTEREST, IF NOT PAID BY YOU.
CASH VALUE HELD IN THE LOAN ACCOUNT FOR LOAN COLLATERAL WILL EARN INTEREST DAILY AT
AN ANNUAL RATE OF NOT LESS THAN THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST
RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE. INTEREST CREDITED ON THE CASH VALUE
HELD IN THE LOAN ACCOUNT WILL BE ALLOCATED AT LEAST ONCE A YEAR TO THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN EACH LOAN SUBACCOUNT BEARS TO THE CASH VALUE IN THE LOAN ACCOUNT.
MONTHLY COST THE MONTHLY COST OF INSURANCE FOR THE FOLLOWING MONTH IS DEDUCTED ON THE MONTHLY
OF INSURANCE ANNIVERSARY DATE. THE MONTHLY COST OF INSURANCE IS 1, BELOW, MULTIPLIED BY THE
DIFFERENCE BETWEEN 2 AND 3 BELOW:
1. THE MONTHLY COST OF INSURANCE RATE DIVIDED BY 1,000.
2. AN AMOUNT AS FOLLOWS:
OPTION A CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION B CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE PLUS THE CASH VALUE AT THE BEGINNING
OF THE POLICY MONTH; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
APPLICABLE PERCENTAGE OF THE CASH VALUE AS DESCRIBED IN SECTION
7702(D) OF THE INTERNAL REVENUE CODE OF 1986 AND MODIFIED FOR AGES
95 AND ABOVE.
OPTION C CONTRACT TYPE: THE GREATER OF:
A. THE FACE AMOUNT DIVIDED BY THE MONTHLY COST OF INSURANCE FACTOR SHOWN
ON THE POLICY SPECIFICATIONS PAGE; OR
B. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH MULTIPLIED BY THE
YOUNGER INSURED'S ATTAINED AGE FACTOR AS SHOWN ON THE POLICY'S DEATH
BENEFIT OPTION C ATTAINED AGE FACTORS PAGE.
3. THE CASH VALUE AT THE BEGINNING OF THE POLICY MONTH, BEFORE THE DEDUCTION
OF THE MONTHLY COST OF INSURANCE.
106010NP 6.04
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<PAGE> 24
MONTHLY COST AT THE BEGINNING OF EACH POLICY YEAR, THE MONTHLY COST OF INSURANCE RATE IS
OF INSURANCE DETERMINED. THE MONTHLY COST OF INSURANCE RATE IS BASED ON THE ATTAINED AGES, RISK
RATES CLASSIFICATIONS, AND COMPLETED POLICY YEARS FROM THE ISSUE DATE.
THE MONTHLY COST OF INSURANCE RATES WILL NEVER EXCEED THE RATES SHOWN ON THE TABLE
OF GUARANTEED MONTHLY COST OF INSURANCE RATES PAGE. ANY CHANGE IN THE COST OF
INSURANCE RATES WILL APPLY TO ALL PERSONS OF THE SAME AGE, AND CLASSIFICATION
WHOSE FACE AMOUNTS HAVE BEEN IN FORCE FOR THE SAME LENGTH OF TIME.
SELECTION AND ISSUE EXPENSE THE SELECTION AND ISSUE EXPENSE CHARGE IS A MONTHLY CHARGE FOR THE FIRST 10 POLICY
CHARGE YEARS. THIS CHARGE EQUALS THE FACE AMOUNT TIMES A SELECTION AND ISSUE EXPENSE
CHARGE RATE, DIVIDED BY 1,000. THE SELECTION AND ISSUE EXPENSE CHARGE IS BASED ON
THE INSUREDS' ISSUE AGES, AND RISK CLASSIFICATIONS ON THE ISSUE DATE. THE
SELECTION AND ISSUE EXPENSE CHARGE RATE WILL NEVER EXCEED THE MAXIMUM SELECTION AND
ISSUE EXPENSE CHARGE RATE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
MONTHLY POLICY A POLICY CHARGE WILL BE DEDUCTED EACH POLICY MONTH FROM THE CASH VALUE. THE AMOUNT
CHARGE OF THE MONTHLY POLICY CHARGE WILL NEVER EXCEED THE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
MONTHLY THE MONTHLY DEDUCTION IS:
DEDUCTION
1. THE MONTHLY COST OF INSURANCE; PLUS
2. THE SELECTION AND ISSUE EXPENSE CHARGE MULTIPLIED BY THE FACE AMOUNT
DIVIDED BY 1,000; PLUS
3. THE MONTHLY POLICY CHARGE; PLUS
4. THE MONTHLY COST, IF ANY, FOR ANY RIDER INCLUDED WITH THIS POLICY.
THE MONTHLY DEDUCTION FOR A POLICY MONTH WILL BE ALLOCATED AMONG THE GENERAL
ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT
THE CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO
THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN LOAN ACCOUNT ON THE
MONTHLY ANNIVERSARY.
CASH SURRENDER THE CASH SURRENDER VALUE OF THIS POLICY IS:
VALUE
1. THE CASH VALUE AT THE TIME OF SURRENDER; MINUS
2. ANY LOAN AND LOAN INTEREST ACCRUED; MINUS
3. ANY UNPAID SELECTION AND ISSUE EXPENSE CHARGE DUE FOR THE REMAINDER OF THE
FIRST POLICY YEAR; MINUS
4. ANY UNPAID MONTHLY POLICY CHARGE DUE FOR THE REMAINDER OF THE FIRST POLICY
YEAR; MINUS
5. ANY SURRENDER CHARGE.
SURRENDER YOU MAY SURRENDER YOUR POLICY FOR ITS CASH SURRENDER VALUE AT ANY TIME DURING THE
LIFETIME OF EITHER INSURED. WE WILL DETERMINE THE CASH SURRENDER VALUE AS OF THE
DATE WE RECEIVE YOUR WRITTEN REQUEST AT OUR HOME OFFICE. THE CASH SURRENDER VALUE
WILL NOT BE REDUCED BY ANY MONTHLY DEDUCTION DUE ON THAT DATE FOR A SUBSEQUENT
POLICY MONTH.
PARTIAL AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PARTIAL
WITHDRAWALS WITHDRAWAL OF CASH SUBJECT TO THE CONDITIONS LISTED BELOW. THE FIRST 12 REQUESTED
PARTIAL WITHDRAWALS OR TRANSFERS PER POLICY YEAR WILL BE ALLOWED FREE OF CHARGE;
THEREAFTER WE MAY IMPOSE A TRANSFER CHARGE NOT TO EXCEED THE MAXIMUM TRANSFER
CHARGE SHOWN ON THE POLICY SPECIFICATIONS PAGE.
NO PARTIAL WITHDRAWAL WILL BE PROCESSED WHICH WILL RESULT IN THE FACE AMOUNT,
EXCLUDING RIDERS, BEING DECREASED BELOW THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY
SPECIFICATIONS PAGE.
106010NP 6.05
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<PAGE> 25
WE RESERVE THE RIGHT TO CHANGE THE MINIMUM AMOUNT OR THE NUMBER OF TIMES YOU MAY
MAKE A PARTIAL WITHDRAWAL. WE ALSO MAY ASSESS A TRANSACTION CHARGE FOR A
WITHDRAWAL.
IF THE CONTRACT TYPE IS OPTION A OR OPTION C 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. THIS SURRENDER
CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE
ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE PARTIAL WITHDRAWAL WAS ALLOCATED
AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF THE
DEATH BENEFIT EQUALS A PERCENTAGE OF THE CASH VALUE THEN A PARTIAL WITHDRAWAL WILL
DECREASE THE FACE AMOUNT BY ANY AMOUNT BY WHICH THE PARTIAL WITHDRAWAL PLUS THE
APPLICABLE SURRENDER CHARGE EXCEEDS THE DIFFERENCE BETWEEN THE DEATH BENEFIT AND
THE FACE AMOUNT.
GENERAL ACCOUNT THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST BE AT
PARTIAL LEAST $500 OF YOUR ACCOUNT.
WITHDRAWALS
- THE MAXIMUM AMOUNT OF ALL PARTIAL WITHDRAWALS AND TRANSFERS FROM THE
GENERAL ACCOUNT IN A POLICY YEAR WILL BE THE GREATER OF (1) OR (2):
1. THE CASH SURRENDER VALUE OF THE GENERAL ACCOUNT AT THE BEGINNING OF
THAT POLICY YEAR MULTIPLIED BY THE WITHDRAWAL PERCENTAGE LIMIT, AS
SHOWN ON THE POLICY SPECIFICATIONS PAGE.
2. THE PREVIOUS YEAR'S GENERAL ACCOUNT MAXIMUM WITHDRAWAL AMOUNT.
SEPARATE ACCOUNT - THE MINIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL REQUEST AT ANY ONE TIME MUST
PARTIAL BE THE LESSER OF $500 OF A DIVISION OR YOUR ENTIRE BALANCE IN THAT
WITHDRAWALS DIVISION.
- THE MAXIMUM AMOUNT OF YOUR PARTIAL WITHDRAWAL FROM ANY ONE OF THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN A POLICY YEAR WILL BE THE CASH
SURRENDER VALUE OF THAT DIVISION.
ALLOCATION YOU MAY ALLOCATE THE PARTIAL WITHDRAWAL PLUS ANY APPLICABLE SURRENDER CHARGE,
OF PARTIAL SUBJECT TO THE ABOVE CONDITIONS, AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
WITHDRAWALS SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE ALLOCATION, THEN THE PARTIAL
WITHDRAWAL WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS OF
SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE GENERAL
ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE OF THE
POLICY, MINUS THE CASH VALUE IN THE LOAN ACCOUNT ON THE DATE OF THE PARTIAL
WITHDRAWAL. IF THE GENERAL ACCOUNT CONDITIONS WILL NOT ALLOW THIS PROPORTIONATE
ALLOCATION, WE WILL REQUEST THAT YOU SPECIFY AN ACCEPTABLE ALLOCATION.
PRO RATA AFTER THE FIRST POLICY YEAR, UPON WRITTEN REQUEST TO US, YOU CAN MAKE A PRO RATA
SURRENDER SURRENDER OF YOUR POLICY. THE PRO RATA SURRENDER CAN BE ANY WHOLE NUMBER PERCENTAGE
OF YOUR POLICY. THE PRO RATA SURRENDER WILL REDUCE THE FACE AMOUNT AND THE CASH
VALUE BY THE PERCENTAGE CHOSEN. THE FACE AMOUNT DECREASE WILL BE SUBJECT TO THE
FOLLOWING CONDITIONS:
1. THE DECREASE WILL BECOME EFFECTIVE ON THE MONTHLY ANNIVERSARY ON OR
FOLLOWING OUR RECEIPT OF THE REQUEST.
2. YOU MAY ALLOCATE THE DECREASE IN CASH VALUE DUE TO THE PRO RATA SURRENDER
PLUS ANY APPLICABLE SURRENDER CHARGE AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN. IF YOU DO NOT SPECIFY THE
ALLOCATION, THEN THE DECREASE IN CASH VALUE PLUS ANY APPLICABLE
SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE
DIVISIONS OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE
CASH VALUE IN THE GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION
BEARS TO THE TOTAL CASH VALUE OF THE POLICY, MINUS THE CASH VALUE IN THE
LOAN ACCOUNT ON THE DATE OF THE PRO RATA SURRENDER.
A PRO RATA SURRENDER CAN NOT BE PROCESSED IF IT WILL REDUCE THE FACE AMOUNT BELOW
THE MINIMUM FACE AMOUNT SHOWN ON THE POLICY SPECIFICATIONS PAGE. 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 YOU FOR THE AMOUNT
OF CASH VALUE REDUCTION LESS ANY APPLICABLE SURRENDER CHARGES.
106010NP 6.06
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<PAGE> 26
SURRENDER A SURRENDER CHARGE WILL APPLY UPON SURRENDER, UPON LAPSE, UPON A PARTIAL WITHDRAWAL
CHARGE THAT REDUCES THE FACE AMOUNT, OR UPON A DECREASE IN FACE AMOUNT FOR UP TO 10 YEARS
FROM THE POLICY'S ISSUE DATE.
THE SURRENDER CHARGE IS THE TARGET ANNUAL PREMIUM (BASE ONLY), SHOWN ON THE POLICY
SPECIFICATIONS PAGE, MULTIPLIED BY THE APPLICABLE SURRENDER CHARGE PERCENTAGE. THE
SURRENDER CHARGE PERCENTAGE WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
THE SURRENDER CHARGES FOR THIS POLICY WILL VARY ON A NON-DISCRIMINATORY BASIS, BASED
ON THE AMOUNT OF PREMIUM PAID, BUT WILL NEVER EXCEED THE MAXIMUM SURRENDER CHARGE
PERCENTAGE SHOWN ON THE SURRENDER CHARGE SCHEDULE PAGE.
A SURRENDER CHARGE WILL APPLY TO ANY DECREASE IN FACE AMOUNT. A DECREASE IN FACE
AMOUNT MAY DECREASE SOME OR ALL OF THE INITIAL FACE AMOUNT AS PROVIDED IN SECTION
5. A PARTIAL WITHDRAWAL MAY CAUSE A DECREASE IN FACE AMOUNT AS PROVIDED ABOVE AND,
THEREFORE, A SURRENDER CHARGE MAY BE TAKEN. IF THE FACE AMOUNT IS DECREASED BY SOME
FRACTION OF THE TOTAL FACE AMOUNT, THE SURRENDER CHARGE DEDUCTED WILL BE THE
PREVIOUSLY DEFINED SURRENDER CHARGE MULTIPLIED BY THE FRACTION.
THE SURRENDER CHARGE WILL BE ALLOCATED AMONG THE GENERAL ACCOUNT AND THE DIVISIONS
OF SEPARATE ACCOUNT ELEVEN IN THE SAME PROPORTION THAT THE CASH VALUE IN THE
GENERAL ACCOUNT AND THE CASH VALUE IN EACH DIVISION BEARS TO THE TOTAL CASH VALUE
OF THE POLICY MINUS THE CASH VALUE IN THE LOAN ACCOUNT.
POSTPONEMENT WE WILL USUALLY PAY ANY AMOUNTS PAYABLE ON SURRENDER, PARTIAL WITHDRAWAL, OR POLICY
OF PAYMENTS LOAN ALLOCATED TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN WITHIN SEVEN DAYS AFTER
OR TRANSFERS WRITTEN NOTICE IS RECEIVED. WE WILL USUALLY PAY ANY DEATH BENEFIT PROCEEDS UPON THE
LAST INSURED'S DEATH WITHIN SEVEN DAYS AFTER WE RECEIVE DUE PROOF OF CLAIM. PAYMENT
OF ANY AMOUNT PAYABLE, FROM THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN, ON SURRENDER,
PARTIAL WITHDRAWAL, POLICY LOAN OR DEATH MAY BE POSTPONED WHENEVER:
1. THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN CUSTOMARY WEEKEND AND
HOLIDAY CLOSING) 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 POLICY
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 NET ASSETS OF
SEPARATE ACCOUNT ELEVEN.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY AMOUNT PAYABLE FROM THE GENERAL ACCOUNT
ON SURRENDER, OR PARTIAL WITHDRAWAL FOR NOT MORE THAN SIX MONTHS. IF WE DEFER
PAYMENT FOR 30 DAYS OR MORE, WE WILL PAY INTEREST AT THE RATE OF 2 1/2% PER YEAR
FOR THE PERIOD OF DEFERMENT.
TRANSFERS MAY ALSO BE POSTPONED UNDER THE CIRCUMSTANCES LISTED ABOVE.
WE MAY DEFER PAYMENT OF THE PORTION OF ANY POLICY LOAN FROM THE GENERAL ACCOUNT FOR
NOT MORE THAN SIX MONTHS. NO PAYMENT FROM THE GENERAL ACCOUNT TO PAY PREMIUMS ON
THIS POLICY WILL BE DEFERRED.
CONTINUATION IF ALL PREMIUM PAYMENTS CEASE, THE INSURANCE PROVIDED UNDER THIS POLICY, INCLUDING
OF INSURANCE BENEFITS PROVIDED BY ANY RIDER ATTACHED TO THIS POLICY, WILL CONTINUE IN ACCORDANCE
WITH THE PROVISIONS OF THIS POLICY FOR AS LONG AS THE CASH VALUE LESS ANY LOANS,
LOAN INTEREST ACCURED AND ANY SURRENDER CHARGE IS SUFFICIENT TO COVER THE MONTHLY
DEDUCTIONS.
106010NP 6.07
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<PAGE> 27
BASIS OF THE MINIMUM CASH VALUES ARE BASED ON 1) THE MINIMUM CASH VALUE MORTALITY TABLE
COMPUTATION SHOWN ON THE POLICY SPECIFICATIONS PAGE; AND 2) FOR AMOUNTS ALLOCATED TO THE
GENERAL ACCOUNT, COMPOUND INTEREST AT AN ANNUAL RATE OF NOT LESS THAN THE GENERAL
ACCOUNT CASH VALUE GUARANTEED INTEREST RATE SHOWN ON THE POLICY SPECIFICATIONS
PAGE. THERE IS NO MINIMUM CASH VALUE GUARANTEED INTEREST RATE FOR AMOUNTS ALLOCATED
TO THE DIVISIONS OF SEPARATE ACCOUNT ELEVEN.
NET SINGLE PREMIUMS ARE BASED ON 1) THE 7702 TABLE AS SHOWN ON THE POLICY
SPECIFICATIONS PAGE; AND 2) THE GENERAL ACCOUNT CASH VALUE GUARANTEED INTEREST RATE
AS SHOWN ON THE POLICY SPECIFICATIONS PAGE.
ALL VALUES ARE AT LEAST EQUAL TO THOSE REQUIRED BY ANY APPLICABLE LAW OF THE STATE
THAT GOVERNS YOUR POLICY. WE HAVE FILED A DETAILED STATEMENT OF THE METHOD OF
CALCULATING CASH VALUES AND RESERVES WITH THE INSURANCE SUPERVISORY OFFICIAL OF
THAT STATE.
106010NP 6.08
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<PAGE> 28
<CAPTION>
9. PAYMENT OF POLICY BENEFITS
<C> <S>
PAYMENT A LUMP SUM PAYMENT WILL BE MADE AS PROVIDED ON THE FACE PAGE.
INTEREST ON WE WILL PAY INTEREST ON PROCEEDS FROM THE DATE OF THE LAST INSURED'S DEATH TO THE
PROCEEDS DATE OF PAYMENT. INTEREST WILL BE AT AN ANNUAL RATE DETERMINED BY US, BUT NEVER
LESS THAN THE GUARANTEED INTEREST RATE, SHOWN ON THE POLICY SPECIFICATIONS PAGE.
EXTENDED PROVISIONS FOR SETTLEMENT OF PROCEEDS DIFFERENT FROM A LUMP SUM PAYMENT MAY ONLY BE
PROVISIONS MADE UPON WRITTEN AGREEMENT WITH US.
</TABLE>
00784NP 7.01
(6/98)
<PAGE> 29
PENSION JOINT AND LAST SURVIVOR
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
NON-PARTICIPATING
General
American
LIFE INSURANCE COMPANY
13045 TESSON FERRY RD.
ST. LOUIS, MISSOURI 63128
100020NP
(6/98)
<PAGE> 1
Exhibit 1.(8)(a)
PARTICIPATION AGREEMENT
This Participation Agreement, dated [---------], by and among General
American Life Insurance Company, a stock insurance company organized under
the laws of Missouri ("General American"); General American Capital Company,
an investment company organized under the laws of Maryland ("Capital
Company"); and Walnut Street Securities, Inc., a broker/dealer corporation
organized under the laws of Missouri ("Walnut Street"), restates and replaces
the previous participation agreement by and among the parties.
WHEREAS, Capital Company is a registered investment management company
under the Investment Company Act of 1940 ("1940 Act") and offers a series of
different investment funds to insurance companies as funding vehicles for
variable life insurance and variable annuities; and
WHEREAS, General American desires to offer its customers the
opportunity to direct premium payments from variable contracts (a "Contract"
or the "Contracts") through one or more separate accounts to Capital
Company's funds (the "Funds"); and
WHEREAS, Capital Company desires to sell its shares to the separate
accounts of General American (an "Account" or the "Accounts") on the same
basis that it sells shares to other insurance companies and their separate
accounts; and
WHEREAS Capital Company has obtained from the Securities and Exchange
Commission (the "SEC") an order, dated July 24, 1987, authorizing Capital
Company to accept funds from and sell shares to registered and unregistered
separate accounts related to variable annuities and variable life insurance;
and
WHEREAS Capital Company's investment adviser, Conning Asset Management
Company ("Conning"), is duly registered as an investment adviser under the
Investment Advisers Act of 1940 and applicable state law; and
WHEREAS Shares of Capital Company will be distributed by Walnut Street
which is registered as a broker/dealer with the SEC and a member in good
standing of the National Association of Securities Dealers, Inc. (the
"NASD").
NOW THEREFORE, in consideration of the premises and of the mutual
covenants here contained and other good and valuable consideration the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. SALE OF CAPITAL COMPANY SHARES.
------------------------------
1.1. Walnut Street agrees to sell to General American those shares of
Capital Company which it orders, executing such orders on a daily basis at
the net asset value next computed after receipt by the Capital Company or its
designee of the order for the shares of the
<PAGE> 2
Capital Company. For purposes of this Section 1.1., General American shall be
the designee of the Capital Company for receipt of such orders from each
Account and receipt by such designee shall constitute receipt by the Capital
Company; provided that Capital Company receives notice of such order by 8:30
a.m. St. Louis time on the next following Business Day. "Business Day" shall
mean any day on which the New York Stock Exchange is open for trading and on
which Capital Company calculates its net asset value pursuant to the rules of
the SEC.
1.2. Capital Company agrees to make shares of its Funds available
indefinitely for purchase at the applicable net asset value per share by
General American and its Accounts on those days on which the Capital Company
calculates its net asset value pursuant to rules of the SEC, and Capital
Company shall use reasonable efforts to calculate such net asset value on
each day on which the New York Stock Exchange is open for trading.
Notwithstanding the foregoing, the Board of Directors of the Capital Company
(the "Board") may refuse to sell shares of any Fund to any person, or suspend
or terminate the offering of shares of any Fund if such action is required by
law or by regulatory authorities having jurisdiction or is, in the sole
discretion of the Board acting in good faith and in light of their fiduciary
duties under federal and any applicable state laws, necessary in the best
interests of the shareholders of such Fund.
1.3. Capital Company and Walnut Street agree that shares of the Funds
will be sold only to participating insurance companies and their separate
accounts. No shares of the Fund will be sold to the general public.
1.4. Capital Company agrees to redeem for cash, on General American's
request, any full or fractional shares of the Funds held by General American,
executing such requests on a daily basis at the net asset value next computed
after receipt by Capital Company or its designee of the request for
redemption. For purposes of this Section 1.4., General American shall be the
designee of the Capital Company for receipt of requests for redemption from
each account and receipt by such designee shall constitute receipt by Capital
Company; provided that Capital Company receives notice of such request for
redemption on the next following Business Day.
1.5. General American agrees to purchase and redeem shares of the
Funds offered by the then-current prospectus of Capital Company and in
accordance with the provisions of such prospectus.
1.6. General American shall pay for Capital Company shares on the next
Business Day after an order to purchase Capital Company shares is made in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire.
1.7. Issuance and transfer of Fund shares shall be by book entry only.
Stock certificates shall not be issued to General American or any Account.
Shares ordered from the Capital Company shall be recorded in an appropriate
title for each Account or the appropriate subaccount of each Account.
1.8. Capital Company shall furnish same day notice (by wire or
telephone, followed by written confirmation) to General American of any
income dividends or capital gain distributions payable on the Funds' shares.
General American hereby elects to receive all such
2
<PAGE> 3
income, dividends, and capital gain distributions as are payable on the Funds'
shares in additional shares of that Fund. Capital Company shall notify General
American of the number of shares so issued as payment of such dividends and
distributions.
1.9. Capital Company shall make the net asset value per share for each
Fund available to General American on a daily basis as soon as reasonably
practical after the net asset value per share is calculated.
2. PROSPECTUSES AND PROXY STATEMENTS; VOTING.
-----------------------------------------
2.1. Walnut Street shall provide General American, at General
American's expense, with as many copies of Capital Company's current
prospectus as General American may reasonably request. If requested by
General American in lieu thereof, Capital Company shall provide such
documentation (including a final copy of the new prospectus as set in type at
Capital Company's expense) and other assistance as is reasonably necessary in
order for General American once each year (or more frequently if the
prospectus for Capital Company is amended) to have the prospectus or private
offering memorandum for the Contracts and Capital Company's prospectus
printed together in one document, such printing to be at General American's
expense.
2.2. Capital Company's prospectus shall state that a statement of
additional information for Capital Company is available from Capital Company,
at its expense. Capital Company shall provide such statement of additional
information free of charge to General American and to any owner of a Contract
or prospective owner who requests such statement.
2.3. Capital Company, at its expense, shall provide General American
with copies of any proxy material, reports to shareholders, and other
communications to shareholders in such quantity as General American shall
reasonably require for distributing to Contract Owners.
2.4. If and to the extent required by law, General American shall:
(i) solicit voting instructions from Contract Owners;
(ii) vote Fund shares in accordance with instructions received from
Contract Owners; and
(iii) vote Capital Company shares for which no instructions have been
received in the same proportion as shares of such Fund for
which instructions have been received,
so long as and to the extent that the SEC continues to interpret the 1940 Act
to require pass through voting privileges for variable Contract Owners.
General American reserves the right to vote as it sees fit Capital Company
shares held in any segregated asset Account in its own right, to the extent
permitted by law.
2.5. Capital Company will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular Capital Company will
either provide for annual meetings or comply with the requirements of
Sec.16(a) of the 1940 Act with respect to periodic elections of directors and
with whatever rules the SEC may promulgate with respect thereto.
3
<PAGE> 4
3. SALES MATERIAL AND INFORMATION.
------------------------------
3.1. General American shall furnish, or shall cause to be furnished,
to Walnut Street, Capital Company, or their designees each piece of sales
literature or other promotional material in which Capital Company, Conning,
or Walnut Street is named, at least 15 Business Days prior to its use. No
such material shall be used if Walnut Street, Capital Company, or their
respective designees object to such use within 15 business days after receipt
of such material.
3.2. General American shall not give any information or make any
representations or statements on behalf of Capital Company or concerning
Capital Company in connection with the sale of the Contracts other than the
information or representations contained in the registration statement or
prospectus for Capital Company shares, as such registration statement and
prospectus may be amended or supplemented from time to time, or in reports or
proxy statements for the Capital Company, or in sales literature or other
promotional material approved by the Capital Company or its designee or by
Walnut Street, except with the permission of the Capital Company or Walnut
Street or the designee of either.
3.3. Capital Company, Walnut Street, or their respective designees
shall furnish, or shall cause to be furnished, to General American or its
designee, each piece of sales literature or other promotional material in
which General American or its separate accounts is named at least 15 Business
Days prior to its use. No such material shall be used if General American or
its designee objects to such use within 15 Business Days after receipt of
such material.
3.4. Capital Company and Walnut Street shall not give any information
or make any representations on behalf of General American or concerning
General American, each Account, or the Contracts other than the information
or representations contained in a registration statement, private offering
memorandum, or prospectus for the Contracts, as such registration statement,
private offering memorandum, and prospectus may be amended or supplemented
from time to time, or in published reports for each Account which are in the
public domain or approved by General American for distribution to Contract
Owners, or in sales literature or other promotional material approved by
General American or its designee, except with the permission of General
American.
3.5. Capital Company will provide to General American at least one
complete copy of all registration statements, prospectuses, statements of
additional information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to Capital
Company or its shares, contemporaneously with the filing of such document
with the SEC or other regulatory authorities.
3.6. General American will provide to Capital Company at least one
complete copy of all private offering memoranda, registration statements,
prospectuses, statements of additional information, reports, solicitations
for voting instructions, sales literature and other promotional materials,
applications for exemptions, requests for no-action letters, and all
amendments to any
4
<PAGE> 5
of the above, that relate to the Contracts or each Account, contemporaneously
with the filing of such document with the SEC or other regulatory authorities
or first use if there is no such filing.
3.7. For purposes of this Article 3, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine,
or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public
media), sales literature (i.e., any written communication distributed or made
generally available to customers or the public, including brochures,
circulars, research reports, illustrative software, market letters, form
letters, seminar texts, reprints or excerpts of any other advertisement,
sales literature, or published article), educational or training materials or
other communications distributed or made generally available to some or all
agents or employees, and registration statements, prospectuses, private
offering memoranda, statements of additional information, shareholder
reports, and proxy materials.
4. FEES AND EXPENSES.
-----------------
4.1. Capital Company and Walnut Street shall pay no fee or other
compensation to General American or each other under this agreement, unless
and until a Fund adopts and implements a plan pursuant to Rule 12b-1 of the
1940 Act to finance distribution expenses.
4.2. All expenses incident to performance by Capital Company under
this Agreement shall be paid by Capital Company. Capital Company shall see
to it that all its shares are registered and authorized for issuance in
accordance with applicable federal law and, if and to the extent deemed
advisable by Capital Company, in accordance with applicable state laws prior
to their sale. Capital Company shall bear the expenses for the cost of
registration and qualification of Capital Company's shares, preparation and
filing of Capital Company's prospectus and registration statement, proxy
materials and reports, setting the prospectus in type, setting in type and
printing the proxy materials and reports to shareholders (including the costs
of printing a prospectus that constitutes an annual report), the preparation
of all statements and notices required by any federal or state law, and all
taxes on the issuance or transfer of Capital Company's shares.
4.3. General American shall bear the expenses of printing and
distributing Capital Company's prospectus to owners of Contracts issued by
General American and of distributing Capital Company's proxy materials and
reports to such Contract Owners.
5. DIVERSIFICATION.
---------------
Capital Company shall at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Internal Revenue Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, Capital Company
shall at all times comply with Sec.817(h) of the Code and Treasury Regulation
1.817-5, relating to the diversification requirements for variable annuity,
endowment, or life insurance contracts and any amendments or other
modifications to such section or regulations.
5
<PAGE> 6
6. POTENTIAL CONFLICTS.
-------------------
6.1. The Board will monitor Capital Company for the existence of any
material irreconcilable conflict between the interests of the Contract Owners
of all separate accounts investing in Capital Company. An irreconcilable
material conflict may arise for a variety of reasons, including: (a) an
action by any state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar action by insurance, tax, or securities
regulatory authorities; (c) an administrative or judicial decision in any
relevant proceeding; (d) the manner in which the investments of any Fund are
being managed; (e) a difference in voting instructions given by variable
annuity contract and variable life insurance Contract Owners; or (f) a
decision by an insurer to disregard the voting instructions of Contract
Owners. The Board shall promptly inform General American if it determines
that an irreconcilable material conflict exists and the implications thereof.
6.2. General American shall report any potential or existing conflicts
of which it is aware to the Board. General American shall assist the Board
in carrying out its responsibilities under the rules governing shared
funding, by providing the Board with all information reasonably necessary for
the Board to consider any issues raised. This includes, but is not limited
to, an obligation by General American to inform the Board whenever Contract
Owner voting instructions are disregarded.
6.3. If it is determined by a majority of the Board, or a majority of
its disinterested members, that a material irreconcilable conflict exists,
General American and other participating insurance companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority
of the disinterested members), take whatever steps are necessary to remedy or
eliminate the irreconcilable material conflict, up to and including: (a)
withdrawing the assets allocable to some or all of the separate accounts from
Capital Company or any Fund and reinvesting such assets in a different
investment medium, including, but not limited to, another Fund, or submitting
the question whether such segregation should be implemented to a vote of all
affected Contract Owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more participating insurance
companies) that votes in favor of such segregation, or offering to the
affected Contract Owners the option of making such a change; and (b)
establishing a new registered management investment company or managed
separate account.
6.4. If a material irreconcilable conflict arises because of a
decision by General American to disregard Contract Owner voting instructions
and that decision represents a minority position or would preclude a majority
vote, General American may be required, at Capital Company's election, to
withdraw the affected Account's investment in the Capital Company and
terminate this Agreement with respect to such Account; provided, however that
such withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a majority of
the disinterested members of the Board. Any such withdrawal and termination
must take place within six (6) months after the Capital Company gives written
notice that this provision is being implemented, and until the end of that
6
<PAGE> 7
six (6) month period Walnut Street and Capital Company shall continue to
accept and implement orders by General American for the purchase and
redemption of Fund shares.
6.5. For purposes of Sec.Sec. 6.3 through 6.5 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event will Capital Company be required to establish a new funding
medium for the Contracts. General American shall not be required by Sec.6.3
to establish a new funding medium for the Contracts if an offer to do so has
been declined by vote of a majority of Contract Owners materially adversely
affected by the irreconcilable material conflict. In the event that the
Board determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then General American will withdraw the
Account's investment in the Capital Company and terminate this Agreement
within six (6) months after the Board informs the Company in writing of the
foregoing determination, provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board.
7. TERMINATION OF AGREEMENT.
------------------------
7.1. This Agreement may be terminated at any time by General American
on 180 days' written notice to Capital Company and Walnut Street or by
Capital Company or Walnut Street on 180 days' written notice to General
American.
7.2. Notwithstanding any termination of this Agreement, Capital
Company and Walnut Street shall, at the option of General American, continue
to make available additional shares of the Capital Company pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement ("Existing Contracts").
Specifically, without limitation, the owners of the Existing Contracts shall
be permitted to reallocate investments in Capital Company, redeem investments
in Capital Company, or invest in Capital Company upon the making of
additional purchase payments under the Existing Contracts. A termination
under Sec.6 of this Agreement shall end rights of the owners of Existing
Contracts.
7.3. General American shall not redeem Capital Company shares
attributable to the Contracts (as opposed to Capital Company shares
attributable to General American's assets held in the Account) except: (i)
as necessary to implement Contract Owner initiated transactions; or (ii) as
required by state or federal laws or regulations or judicial or other legal
precedent of general application (a "Legally Required Redemption"). Upon
request, General American will promptly furnish to Capital Company and Walnut
Street the opinion of counsel for General American (which counsel shall be
reasonably satisfactory to Capital Company and Walnut Street) to the effect
that any redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under the terms of
the Contracts, the Company shall not prevent Contract Owners from allocating
payments to a Fund that was otherwise available under the Contracts without
first giving Capital Company or Walnut Street 90 days' notice of its
intention to do so.
7
<PAGE> 8
8. NOTICES. Any notice under this Agreement shall be in writing
-------
and: (a) if to Capital Company, delivered or mailed postage prepaid to it at
700 Market Street, St. Louis, MO 63101; (b) if to Walnut Street, delivered or
mailed postage prepaid to it at 400 South Fourth Street, Suite 1000, St.
Louis, MO 63102; and (c) if to General American, delivered, or mailed postage
prepaid to it at 700 Market Street, St. Louis, MO 63101. The parties shall
the have right to designate any other address hereafter by written notice to
the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their corporate names, all as of the date first above written.
GENERAL AMERICAN LIFE
INSURANCE COMPANY
ATTEST: -------------------------- BY --------------------------------
Robert J. Banstetter Richard A. Liddy
Secretary President
GENERAL AMERICAN
CAPITAL COMPANY
ATTEST: -------------------------- BY --------------------------------
Christopher A. Martin Richard A. Liddy
Secretary President
WALNUT STREET SECURITIES
ATTEST: -------------------------- BY --------------------------------
Joyce W. Hillebrand Milton F. Svetanics
Assistant Secretary Vice President
8
<PAGE> 1
Exhibit 1.(8)(b)
AMENDED AND RESTATED
--------------------
PARTICIPATION AGREEMENT
-----------------------
Among
VARIABLE INSURANCE PRODUCTS FUND II,
-----------------------------------
FIDELITY DISTRIBUTORS CORPORATION
---------------------------------
and
GENERAL AMERICAN LIFE INSURANCE COMPANY
---------------------------------------
THIS AGREEMENT is made and entered into as of this 15th day of
February, 1995 by and among GENERAL AMERICAN LIFE INSURANCE COMPANY,
(hereinafter the "Company"), a Missouri corporation, on its own behalf and on
behalf of each segregated asset account of the Company set forth on Schedule
A hereto as such schedule may be amended from time to time (each such account
hereinafter referred to as the "Account" and collectively as the "Accounts"),
and the VARIABLE INSURANCE PRODUCTS FUND II, an unincorporated business trust
organized under the laws of the Commonwealth of Massachusetts (hereinafter
the "Fund") and FIDELITY DISTRIBUTORS CORPORATION (hereinafter the
"Underwriter"), a Massachusetts corporation. This Agreement replaces and
supersedes that certain Participation Agreement among the parties dated as of
October 28, 1994, as heretofore amended, which agreement is hereby amended in
its entirety.
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance policies and
variable annuity contracts (collectively, the "Variable Insurance Products")
to be offered by insurance companies which have entered into participation
agreements with the Fund and the Underwriter (hereinafter "Participating
Insurance Companies"); and
WHEREAS, the beneficial interest in the Fund is divided into several
series of shares, each designated a "Portfolio" and representing the interest
in a particular managed portfolio of securities and other assets; and
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission, dated September 17, 1986 (File No. 812-6422), granting
Participating Insurance Companies and variable annuity and variable life
insurance separate accounts exemptions from the provisions of sections 9(a),
13(a), 15(a), and 15(b) of the Investment Company Act of 1940,
1
<PAGE> 2
as amended, (hereinafter the "1940 Act") and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Fund
to be sold to and held by variable annuity and variable life insurance separate
accounts of both affiliated and unaffiliated life insurance companies
(hereinafter the "Shared Funding Exemptive Order"); and
WHEREAS, the Fund is registered as an open-end management investment
company under the 1940 Act and its shares are registered under the Securities
Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Fidelity Management & Research Company (the "Adviser") is duly
registered as an investment adviser under the federal Investment Advisers Act
of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable
life and variable annuity contracts under the 1933 Act, and offers or will
offer for sale certain other group variable annuity contracts which are or
will be exempt from registration; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to one or more variable life and annuity
contracts; and
WHEREAS, the Company has registered or will register certain of the
Accounts as a unit investment trust under the 1940 Act and certain of the
Accounts are exempt from registration; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934, as amended, (hereinafter the "1934 Act"), and is a member in good
standing of the National Association of Securities Dealers, Inc. (hereinafter
"NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios on
behalf of each Account to fund certain of the aforesaid variable life and
variable annuity contracts and the Underwriter is authorized to sell such
shares to unit investment trusts such as each Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the Company,
the Fund and the Underwriter agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Underwriter agrees to sell to the Company those shares of the
Fund which each Account orders, executing such orders on a daily basis at the
net asset value next computed after receipt by the Fund or its designee of
the order for the shares of the Fund. For purposes of this Section 1.1, the
Company shall be the designee of the Fund for receipt of such orders from
each Account and receipt by such designee shall constitute receipt by the
Fund; provided that the
2
<PAGE> 3
Fund receives notice of such order by 9:30 a.m. Boston time on the next
following Business Day. "Business Day" shall mean any day on which the New
York Stock Exchange is open for trading and on which the Fund calculates its
net asset value pursuant to the rules of the Securities and Exchange
Commission.
1.2. The Fund agrees to make its shares available indefinitely for
purchase at the applicable net asset value per share by the Company and its
Accounts on those days on which the Fund calculates its net asset value
pursuant to rules of the Securities and Exchange Commission and the Fund
shall use reasonable efforts to calculate such net asset value on each day
which the New York Stock Exchange is open for trading. Notwithstanding the
foregoing, the Board of Trustees of the Fund (hereinafter the "Board") may
refuse to sell shares of any Portfolio to any person, or suspend or terminate
the offering of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole discretion
of the Board acting in good faith and in light of their fiduciary duties
under federal and any applicable state laws, necessary in the best interests
of the shareholders of such Portfolio.
1.3. The Fund and the Underwriter agree that shares of the Fund will
be sold only to Participating Insurance Companies and their separate
accounts. No shares of any Portfolio will be sold to the general public.
1.4. The Fund and the Underwriter will not sell Fund shares to any
insurance company or separate account unless an agreement containing
provisions substantially the same as Articles I, III, V, VII and Section 2.5
of Article II of this Agreement is in effect to govern such sales.
1.5. The Fund agrees to redeem for cash, on the Company's request, any
full or fractional shares of the Fund held by the Company, executing such
requests on a daily basis at the net asset value next computed after receipt
by the Fund or its designee of the request for redemption. For purposes of
this Section 1.5, the Company shall be the designee of the Fund for receipt
of requests for redemption from each Account and receipt by such designee
shall constitute receipt by the Fund; provided that the Fund receives notice
of such request for redemption on the next following Business Day.
1.6. The Company agrees to purchase and redeem the shares of selected
Portfolios offered by the then-current prospectus of the Fund and in
accordance with the provisions of such prospectus. The Company agrees that
all net amounts available under the variable life and variable annuity
contracts with the form number(s) which are listed on Schedule B attached
hereto and incorporated herein by this reference, as such Schedule B may be
amended from time to time hereafter by mutual written agreement of all the
parties hereto, (the "Contracts") shall be invested in the Fund, in such
other Funds advised by the Adviser as may be mutually agreed to in writing by
the parties hereto, or in the Company's general account or in other separate
accounts of the Company managed by the Company or an affiliate, provided that
such amounts may also be invested in an investment company other than the
Fund if (a) such other investment company, or series thereof, has investment
objectives or policies that are substantially different from the investment
objectives and policies of all the Portfolios of the Fund; or (b) the Company
gives the Fund and the Underwriter 45 days written notice of its intention to
make such other investment
3
<PAGE> 4
company available as a funding vehicle for the Contracts; or (c) such other
investment company was available as a funding vehicle for the Contracts prior
to the date of this Agreement and the Company so informs the Fund and
Underwriter prior to their signing this Agreement; or (d) the Fund or
Underwriter consents to the use of such other investment company.
1.7. The Company shall pay for Fund shares on the next Business Day
after an order to purchase Fund shares is made in accordance with the
provisions of Section 1.1 hereof. Payment shall be in federal funds
transmitted by wire. For purpose of Section 2.10 and 2.11, upon receipt by
the Fund of the federal funds so wired, such funds shall cease to be the
responsibility of the Company and shall become the responsibility of the
Fund.
1.8. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued to the Company or any Account.
Shares ordered from the Fund will be recorded in an appropriate title for
each Account or the appropriate subaccount of each Account.
1.9. The Fund shall furnish same day notice (by wire or telephone,
followed by written confirmation) to the Company of any income dividends or
capital gain distributions payable on the Fund's shares. The Company hereby
elects to receive all such income dividends and capital gain distributions as
are payable on the Portfolio shares in additional shares of that Portfolio.
The Company reserves the right to revoke this election and to receive all
such income dividends and capital gain distributions in cash. The Fund shall
notify the Company of the number of shares so issued as payment of such
dividends and distributions.
1.10. The Fund shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 7 p.m.
Boston time.
ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are
registered under the 1933 Act or are exempt from registration thereunder;
that the Contracts will be issued and sold in compliance in all material
respects with all applicable Federal and State laws and that the sale of the
Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that
it is an insurance company duly organized and in good standing under
applicable law and that it has legally and validly established each Account
prior to any issuance or sale thereof as a segregated asset account under
Section 376.309 of the Insurance Code of the State of Missouri and that each
Account is or will be registered as a unit investment trust in accordance
with the provisions of the 1940 Act to serve as a segregated investment
account for the Contracts or is exempt from registration thereunder.
2.2. The Fund represents and warrants that Fund shares sold pursuant
to this Agreement shall be registered under the 1933 Act, duly authorized for
issuance and sold in compliance with the laws of the State of Missouri and
all applicable federal and state securities laws and that the Fund is and
shall remain registered under the 1940 Act. The Fund shall amend
4
<PAGE> 5
the Registration Statement for its shares under the 1933 Act and the 1940 Act
from time to time as required in order to effect the continuous offering of
its shares. The Fund shall register and qualify the shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund or the Underwriter.
2.3. The Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of 1986,
as amended, (the "Code") and that it will make every effort to maintain such
qualification (under Subchapter M or any successor or similar provision) and
that it will notify the Company immediately upon having a reasonable basis
for believing that it has ceased to so qualify or that it might not so
qualify in the future.
2.4. The Company represents that the Contracts are currently treated
as endowment, annuity or life insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Fund and the Underwriter immediately
upon having a reasonable basis for believing that the Contracts have ceased
to be so treated or that they might not be so treated in the future.
2.5. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act or
otherwise, although it may make such payments in the future. The Fund has
adopted a "no fee" or "defensive" Rule 12b-1 Plan under which it makes no
payments for distribution expenses. To the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1, the Fund undertakes to have a
board of trustees, a majority of whom are not interested persons of the Fund,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6. The Fund makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various
states except that the Fund represents that the Fund's investment policies,
fees and expenses are and shall at all times remain in compliance with the
laws of the State of Missouri and the Fund and the Underwriter represent that
their respective operations are and shall at all times remain in material
compliance with the laws of the State of Missouri to the extent required to
perform this Agreement.
2.7. The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the Fund
shares in accordance with the laws of the State of Missouri and all
applicable state and federal securities laws, including without limitation
the 1933 Act, the 1934 Act, and the 1940 Act.
2.8. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it does
and will comply in all material respects with the 1940 Act.
2.9. The Underwriter represents and warrants that the Adviser is and
shall remain duly registered in all material respects under all applicable
federal and state securities laws and
5
<PAGE> 6
that the Adviser shall perform its obligations for the Fund in compliance in
all material respects with the laws of the State of Missouri and any applicable
state and federal securities laws.
2.10. The Fund and Underwriter represent and warrant that all of their
directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money or securities of the Fund are and
shall continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less than the
minimal coverage as required currently by Rule 17g-(1) of the 1940 Act or
related provisions as may be promulgated from time to time. The aforesaid
Bond shall include coverage for larceny and embezzlement and shall be issued
by a reputable bonding company.
2.11. The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage for the benefit of the
Fund, in an amount not less than five million dollars ($5 million). The
aforesaid Bond shall include coverage for larceny and embezzlement and shall
be issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Underwriter shall provide the Company with as many printed
copies of the Fund's current prospectus and Statement of Additional
Information as the Company may reasonably request. If requested by the
Company in lieu thereof, the Fund shall provide camera-ready film or computer
diskettes containing the Fund's prospectus and Statement of Additional
Information, and such other assistance as is reasonably necessary in order
for the Company once each year (or more frequently if the prospectus and/or
Statement of Additional Information for the Fund is amended during the year)
to have the prospectus for the Contracts and the Fund's prospectus printed
together in one document, and to have the Statement of Additional Information
for the Fund and the Statement of Additional Information for the Contracts
printed together in one document. Alternatively, the Company may print the
Fund's prospectus and/or its Statement of Additional Information in
combination with other fund companies' prospectuses and statements of
additional information. Except as provided in the following three sentences,
all expenses of printing and distributing Fund prospectuses and Statements of
Additional Information shall be the expense of the Company. For prospectuses
and Statements of Additional Information provided by the Company to its
existing owners of Contracts in order to update disclosure as required by the
1933 Act and/or the 1940 Act, the cost of printing shall be borne by the
Fund. If the Company chooses to receive camera-ready film or computer
diskettes in lieu of receiving printed copies of the Fund's prospectus, the
Fund will reimburse the Company in an amount equal to the product of A and B
where A is the number of such prospectuses distributed to owners of the
Contracts, and B is the Fund's per unit cost of typesetting and printing the
Fund's prospectus. The same procedures shall be followed with respect to the
Fund's Statement of Additional Information.
The Company agrees to provide the Fund or its designee with such
information as may be reasonably requested by the Fund to assure that the
Fund's expenses do not include the
6
<PAGE> 7
cost of printing any prospectuses or Statements of Additional Information other
than those actually distributed to existing owners of the Contracts.
3.2. The Fund's prospectus shall state that the Statement of
Additional Information for the Fund is available from the Underwriter or the
Company (or in the Fund's discretion, the Prospectus shall state that such
Statement is available from the Fund).
3.3. The Fund, at its expense, shall provide the Company with copies
of its proxy statements, reports to shareholders, and other communications
(except for prospectuses and Statements of Additional Information, which are
covered in Section 3.1) to shareholders in such quantity as the Company shall
reasonably require for distributing to Contract owners.
3.4. If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
(ii) vote the Fund shares in accordance with instructions received
from Contract owners; and
(iii) vote Fund shares for which no instructions have been received
in the same proportion as Fund shares of such portfolio for
which instructions have been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote Fund
shares held in any segregated asset account in its own right, to the extent
permitted by law. Participating Insurance Companies shall be responsible for
assuring that each of their separate accounts participating in the Fund
calculates voting privileges in a manner consistent with the standards set
forth on Schedule C attached hereto and incorporated herein by this
reference, which standards will also be provided to the other Participating
Insurance Companies.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular the Fund will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Fund is not one of the trusts described in Section 16(c) of
that Act) as well as with Sections 16(a) and, if and when applicable, 16(b).
Further, the Fund will act in accordance with the Securities and Exchange
Commission's interpretation of the requirements of Section 16(a) with respect
to periodic elections of trustees and with whatever rules the Commission may
promulgate with respect thereto.
7
<PAGE> 8
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Company shall furnish, or shall cause to be furnished, to the
Fund or its designee, each piece of sales literature or other promotional
material in which the Fund or its investment adviser or the Underwriter is
named, at least fifteen Business Days prior to its use. No such material
shall be used if the Fund or its designee object to such use within fifteen
Business Days after receipt of such material.
4.2. The Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the Fund in
connection with the sale of the Contracts other than the information or
representations contained in the registration statement or prospectus for the
Fund shares, as such registration statement and prospectus may be amended or
supplemented from time to time, or in reports or proxy statements for the
Fund, or in sales literature or other promotional material approved by the
Fund or its designee or by the Underwriter, except with the permission of the
Fund or the Underwriter or the designee of either.
4.3. The Fund, Underwriter, or its designee shall furnish, or shall
cause to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or its separate
account(s), is named at least fifteen Business Days prior to its use. No
such material shall be used if the Company or its designee object to such use
within fifteen Business Days after receipt of such material.
4.4. The Fund and the Underwriter shall not give any information or
make any representations on behalf of the Company or concerning the Company,
each Account, or the Contracts other than the information or representations
contained in any registration statement, prospectus or offering materials for
the Contracts, as such may be amended or supplemented from time to time, or
in published reports for each Account which are in the public domain or
approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the permission of the Company.
4.5. The Fund will provide to the Company at least one complete copy
of all registration statements, prospectuses, Statements of Additional
Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the Fund or
its shares, contemporaneously with the filing of such document with the
Securities and Exchange Commission or other regulatory authorities.
4.6. The Company will provide to the Fund at least one complete copy
of any registration statements, prospectuses, Statements of Additional
Information, reports, solicitations for voting instructions, sales literature
and other promotional materials, applications for exemptions, requests for no
action letters, and all amendments to any of the above, that relate to the
Contracts or each Account, contemporaneously with the filing of such document
with the SEC or other regulatory authorities. In the case of unregistered
Contracts, in lieu of providing prospectuses and Statements of Additional
Information, the Company shall provide the fund with one complete copy of the
offering materials for the Contracts.
8
<PAGE> 9
4.7. For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine,
or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, or other public
media), sales literature (i.e., any written communication distributed or
----
made generally available to customers or the public, including brochures,
circulars, research reports, market letters, form letters, seminar texts,
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees,
and registration statements, prospectuses, Statements of Additional
Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund and Underwriter shall pay no fee or other compensation
to the Company under this agreement, except that if the Fund or any Portfolio
adopts and implements a plan pursuant to Rule 12b-1 to finance distribution
expenses, then the Underwriter may make payments to the Company or to the
underwriter for the Contracts if and in amounts agreed to by the Underwriter
in writing and such payments will be made out of existing fees otherwise
payable to the Underwriter, past profits of the Underwriter or other
resources available to the Underwriter. No such payments shall be made
directly by the Fund. Currently, no such payments are contemplated.
5.2. All expenses incident to performance by the Fund under this
Agreement shall be paid by the Fund. The Fund shall see to it that all its
shares are registered and authorized for issuance in accordance with
applicable federal law and, if and to the extent deemed advisable by the
Fund, in accordance with applicable state laws prior to their sale. The Fund
shall bear the expenses for the cost of registration and qualification of the
Fund's shares, preparation and filing of the Fund's prospectus and
registration statement, proxy materials and reports, setting the prospectus
in type, setting in type and printing the proxy materials and reports to
shareholders (including the costs of printing a prospectus that constitutes
an annual report), the preparation of all statements and notices required by
any federal or state law, and all taxes on the issuance or transfer of the
Fund's shares.
5.3. The Company shall bear the expenses of distributing the Fund's
prospectus, proxy materials and reports to owners of Contracts issued by the
Company.
ARTICLE VI. Diversification
---------------
6.1. The Fund will at all times invest money from the Contracts in
such a manner as to ensure that the Contracts will be treated as variable
contracts under the Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will at all times comply with
Section 817(h) of the Code and Treasury Regulation 1.817-5, relating to the
diversification requirements for variable annuity, endowment, or life
insurance contracts and any amendments or other modifications to such Section
or Regulations.
9
<PAGE> 10
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Board will monitor the Fund for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Fund. An irreconcilable material conflict
may arise for a variety of reasons, including: (a) an action by any state
insurance regulatory authority; (b) a change in applicable federal or state
insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar
action by insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e) a
difference in voting instructions given by variable annuity contract and
variable life insurance contract owners; or (f) a decision by an insurer to
disregard the voting instructions of contract owners. The Board shall
promptly inform the Company if it determines that an irreconcilable material
conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in
carrying out its responsibilities under the Shared Funding Exemptive Order,
by providing the Board with all information reasonably necessary for the
Board to consider any issues raised. This includes, but is not limited to,
an obligation by the Company to inform the Board whenever contract owner
voting instructions are disregarded.
7.3. If it is determined by a majority of the Board, or a majority of
its disinterested trustees, that a material irreconcilable conflict exists,
the Company and other Participating Insurance Companies shall, at their
expense and to the extent reasonably practicable (as determined by a majority
of the disinterested trustees), take whatever steps are necessary to remedy
or eliminate the irreconcilable material conflict, up to and including: (1),
withdrawing the assets allocable to some or all of the separate accounts from
the Fund or any Portfolio and reinvesting such assets in a different
investment medium, including (but not limited to) another Portfolio of the
Fund, or submitting the question whether such segregation should be
implemented to a vote of all affected Contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
----
owners, life insurance contract owners, or variable contract owners of one or
more Participating Insurance Companies) that votes in favor of such
segregation, or offering to the affected contract owners the option of making
such a change; and (2), establishing a new registered management investment
company or managed separate account.
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard contract owner voting instructions and
that decision represents a minority position or would preclude a majority
vote, the Company may be required, at the Fund's election, to withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account; provided, however that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Any such withdrawal and termination must take place
within six (6) months after the Fund gives written notice that this provision
is being
10
<PAGE> 11
implemented, and until the end of that six month period the Underwriter and
Fund shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affected Account's investment in the Fund and terminate this Agreement with
respect to such Account within six months after the Board informs the Company
in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six month period, the
Underwriter and Fund shall continue to accept and implement orders by the
Company for the purchase (and redemption) of shares of the Fund.
7.6. For purposes of Sections 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Board shall determine whether
any proposed action adequately remedies any irreconcilable material conflict,
but in no event will the Fund be required to establish a new funding medium
for the Contracts. The Company shall not be required by Section 7.3 to
establish a new funding medium for the Contracts if an offer to do so has
been declined by vote of a majority of Contract owners materially adversely
affected by the irreconcilable material conflict. In the event that the Board
determines that any proposed action does not adequately remedy any
irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Fund and terminate this Agreement within six (6)
months after the Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal and termination shall
be limited to the extent required by any such material irreconcilable
conflict as determined by a majority of the disinterested members of the
Board.
7.7. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of
the Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Shared Funding
Exemptive Order, then (a) the Fund or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with
Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the extent
such rules are applicable; and (b) Sections 3.4, 3.5, 7.1, 7.2, 7.3, 7.4, and
7.5 of this Agreement shall continue in effect only to the extent that terms
and conditions substantially identical to such Sections are contained in such
Rule(s) as so amended or adopted.
11
<PAGE> 12
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
8.1(a). The Company agrees to indemnify and hold harmless the Fund and
each trustee of the Board and officers and each person, if any, who controls
the Fund within the meaning of Section 15 of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of this Section 8.1) against any and all
losses, claims, damages, liabilities (including amounts paid in settlement
with the written consent of the Company) or litigation (including legal and
other expenses), to which the Indemnified Parties may become subject under
any statute, regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Fund's shares or
the Contracts and:
(i) arise out of or are based upon any untrue statements or
alleged untrue statements of any material fact contained in any
Registration Statement, prospectus or other offering materials for the
Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Fund for use in any Registration
Statement or prospectus for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement, prospectus or sales literature of the Fund
not supplied by the Company, or persons under its control) or wrongful
conduct of the Company or persons under its control, with respect to
the sale or distribution of the Contracts or Fund Shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Fund or any amendment thereof or
supplement thereto or the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading if such a statement or omission was
made in reliance upon information furnished to the Fund by or on behalf
of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
12
<PAGE> 13
(v) arise out of or result from any material breach of any
representation or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company, as limited by and in accordance with the provisions of
Sections 8.1(b) and 8.1(c) hereof.
8.1(b). The Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified
Party as such may arise from such Indemnified Party's willful
misfeasance, bad faith, or gross negligence in the performance of such
Indemnified Party's duties or by reason of such Indemnified Party's
reckless disregard of obligations or duties under this Agreement or to
the Fund, whichever is applicable.
8.1(c). The Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Company in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified
Party shall have received notice of such service on any designated
agent), but failure to notify the Company of any such claim shall not
relieve the Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is
brought against the Indemnified Parties, the Company shall be entitled
to participate, at its own expense, in the defense of such action. The
Company also shall be entitled to assume the defense thereof, with
counsel satisfactory to the party named in the action. After notice
from the Company to such party of the Company's election to assume the
defense thereof, the Indemnified Party shall bear the fees and expenses
of any additional counsel retained by it, and the Company will not be
liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.1(d). The Indemnified Parties will promptly notify the
Company of the commencement of any litigation or proceedings against
them in connection with the issuance or sale of the Fund Shares or the
Contracts or the operation of the Fund.
8.2. Indemnification by the Underwriter
----------------------------------
8.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 8.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter) or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common
13
<PAGE> 14
law or otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements are related to the sale
or acquisition of the Fund's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in
the Registration Statement or prospectus or sales
literature of the Fund (or any amendment or supplement to
any of the foregoing), or arise out of or are based upon
the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon
and in conformity with information furnished to the
Underwriter or Fund by or on behalf of the Company for use
in the Registration Statement or prospectus for the Fund
or in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the
Contracts or Fund shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations
contained in any Registration Statement, prospectus, other
offering materials or sales literature for the Contracts
not supplied by the Underwriter or persons under its
control) or wrongful conduct of the Fund, Adviser or
Underwriter or persons under their control, with respect
to the sale or distribution of the Contracts or Fund
shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration
Statement, prospectus, other offering materials or sales
literature covering the Contracts, or any amendment
thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statement or
statements therein not misleading, if such statement or
omission was made in reliance upon information furnished
to the Company by or on behalf of the Fund; or
(iv) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms of
this Agreement (including a failure, whether unintentional
or in good faith or otherwise, to comply with the
diversification requirements specified in Article VI of
this Agreement); or
(v) arise out of or result from any material breach of any
representation or warranty made by the Underwriter in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Underwriter; as
limited by and in accordance with the provisions of
Sections 8.2(b) and 8.2(c) hereof.
14
<PAGE> 15
8.2(b). The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation to which an Indemnified Party would otherwise be subject by reason
of such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to each Company or the Account, whichever is
applicable.
8.2(c). The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within
a reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the
Underwriter of any such claim shall not relieve the Underwriter from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the
Underwriter will be entitled to participate, at its own expense, in the
defense thereof. The Underwriter also shall be entitled to assume the
defense thereof, with counsel satisfactory to the party named in the action.
After notice from the Underwriter to such party of the Underwriter's election
to assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Underwriter will
not be liable to such party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
8.2(d). The Company agrees promptly to notify the Underwriter of the
commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Contracts or the operation of each Account.
8.3. Indemnification By the Fund
---------------------------
8.3(a). The Fund agrees to indemnify and hold harmless the Company,
and each of its directors and officers and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act (collectively,
the "Indemnified Parties" for purposes of this Section 8.3) against any and
all losses, claims, damages, liabilities (including amounts paid in
settlement with the written consent of the Fund) or litigation (including
legal and other expenses) to which the Indemnified Parties may become subject
under any statute, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements result from the gross negligence, bad faith or willful misconduct
of the Board or any member thereof, are related to the operations of the Fund
and:
(i) arise as a result of any failure by the Fund to provide
the services and furnish the materials under the terms of
this Agreement (including a failure to comply with the
diversification requirements specified in Article VI of
this Agreement);or
15
<PAGE> 16
(ii) arise out of or result from any material breach of any
representation or warranty made by the Fund in this
Agreement or arise out of or result from any other
material breach of this Agreement by the Fund;
as limited by and in accordance with the provisions of Sections 8.3(b) and
8.3(c) hereof.
8.3(b). The Fund shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations and duties
under this Agreement or to the Company, the Fund, the Underwriter or each
Account, whichever is applicable.
8.3(c). The Fund shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice
of such service on any designated agent), but failure to notify the Fund of
any such claim shall not relieve the Fund from any liability which it may
have to the Indemnified Party against whom such action is brought otherwise
than on account of this indemnification provision. In case any such action
is brought against the Indemnified Parties, the Fund will be entitled to
participate, at its own expense, in the defense thereof. The Fund also shall
be entitled to assume the defense thereof, with counsel satisfactory to the
party named in the action. After notice from the Fund to such party of the
Fund's election to assume the defense thereof, the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Fund will not be liable to such party under this Agreement for any legal or
other expenses subsequently incurred by such party independently in
connection with the defense thereof other than reasonable costs of
investigation.
8.3(d). The Company and the Underwriter agree promptly to notify the
Fund of the commencement of any litigation or proceedings against it or any
of its respective officers or directors in connection with this Agreement,
the issuance or sale of the Contracts, with respect to the operation of any
Account, or the sale or acquisition of shares of the Fund.
ARTICLE IX. Applicable Law
--------------
9.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
9.2. To the extent they are applicable, this Agreement shall be
subject to the provisions of the 1933, 1934 and 1940 acts, and the rules and
regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the Securities and Exchange Commission may
grant (including, but not limited to, the Shared Funding Exemptive Order) and
the terms hereof shall be interpreted and construed in accordance therewith.
16
<PAGE> 17
ARTICLE X. Termination
-----------
10.1. This Agreement shall continue in full force and effect until
the first to occur of:
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Portfolio based upon the
Company's determination that shares of such Portfolio are not
reasonably available to meet the requirements of the Contracts;
or
(c) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Portfolio in the event any
of the Portfolio's shares are not registered, issued or sold in
accordance with applicable state or federal law or such law
precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company;
or
(d) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Portfolio in the event that
such Portfolio ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any successor
or similar provision, or if the Company reasonably believes
that the Fund may fail to so qualify; or
(e) termination by the Company by written notice to the Fund and
the Underwriter with respect to any Portfolio in the event that
such Portfolio fails to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Fund or the Underwriter by written
notice to the Company, if either one or both of the Fund or the
Underwriter respectively, shall determine, in their sole
judgment exercised in good faith, that the Company or its
affiliated companies has suffered a material adverse change in
its business, operations, financial condition or prospects
since the date of this Agreement or is the subject of material
adverse publicity; or
(g) termination by the Company by written notice to the Fund and
the Underwriter, if the Company shall determine, in its sole
judgment exercised in good faith, that either the Fund or the
Underwriter has suffered a material adverse change in its
business, operations, financial condition or prospects since
the date of this Agreement or is the subject of material
adverse publicity; or
(h) termination by the Fund or the Underwriter by written notice to
the Company, if the Company gives the Fund and the Underwriter
the written notice specified in Section 1.6(b) hereof and at
the time such notice was given there was no
17
<PAGE> 18
notice of termination outstanding under any other provision of
this Agreement; provided, however any termination under this
Section 10.1(h) shall be effective forty five (45) days after the
notice specified in Section 1.6(b) was given.
10.2. Effect of Termination. Notwithstanding any termination of
---------------------
this Agreement, the Fund and the Underwriter shall at the option of the
Company, continue to make available additional shares of the Fund pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on
the effective date of termination of this Agreement (hereinafter referred to
as "Existing Contracts"). Specifically, without limitation, the owners of
the Existing Contracts shall be permitted to reallocate investments in the
Fund, redeem investments in the Fund or invest in the Fund upon the making of
additional purchase payments under the Existing Contracts. The parties agree
that this Section 10.2 shall not apply to any terminations under Article VII
and the effect of such Article VII terminations shall be governed by Article
VII of this Agreement.
10.3. The Company shall not redeem Fund shares attributable to the
Contracts (as opposed to Fund shares attributable to the Company's assets
held in ant of the Accounts) except (i) as necessary to implement Contract
Owner initiated transactions, or (ii) as required by state or federal laws or
regulations or judicial or other legal precedent of general application
(hereinafter referred to as a "Legally Required Redemption"). Upon request,
the Company will promptly furnish to the Fund and the Underwriter the opinion
of counsel for the Company (which counsel shall be reasonably satisfactory to
the Fund and the Underwriter) to the effect that any redemption pursuant to
clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Contracts, the Company shall not
prevent Contract Owners from allocating payments to a Portfolio that was
otherwise available under the Contracts without first giving the Fund or the
Underwriter 90 days notice of its intention to do so.
ARTICLE XI. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Fund:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
If to the Company:
13045 Tesson Ferry Road
St. Louis, MO 63128
Attn: VUL Administrator
If to the Underwriter:
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Treasurer
18
<PAGE> 19
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund as
neither the Board, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Fund.
12.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize
such names and addresses and other confidential information until such time
as it may come into the public domain without the express written consent of
the affected party.
12.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
12.5. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
12.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the California Insurance Commissioner
with any information or reports in connection with services provided under
this Agreement which such Commissioner may request in order to ascertain
whether the variable life insurance operations of the Company are being
conducted in a manner consistent with the California Variable Life Insurance
Regulations and any other applicable law or regulations.
12.7. The Fund and Underwriter agree that to the extent any advisory or
other fees received by the Fund, the Underwriter or the Adviser are
determined to be unlawful in legal or administrative proceedings under the
1973 NAIC model variable life insurance regulation in the states of
California, Colorado, Maryland or Michigan, the Underwriter shall indemnify
and reimburse the Company for any out of pocket expenses and actual damages
the Company has incurred as a result of any such proceeding; provided however
that the provisions of Section 8.2(b) and 8.2(c) shall apply to such
indemnification and reimbursement obligation. Such indemnification and
reimbursement obligation shall be in addition to any other indemnification
and reimbursement obligations of the Fund or the Underwriter under this
Agreement.
19
<PAGE> 20
12.8. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
12.9. This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or
company under common control with the Underwriter, if such assignee is duly
licensed and registered to perform the obligations of the Underwriter under
this Agreement.
12.10. The Company shall furnish, or shall cause to be furnished, to
the Fund or its designee copies of the following reports:
(a) the Company's annual statement prepared under statutory
accounting principles), as soon as practical and in any
event within 90 days after the end of each fiscal year;
(b) the Company's quarterly statements (statutory), as soon
as practical and in any event within 45 days after the
end of each quarterly period:
(c) any financial statement, proxy statement, notice or
report of the Company sent to stockholders or
policyholders, as soon as practical after the delivery
thereof;
(d) any registration statement (without exhibits) and
financial reports of the Company filed with the
Securities and Exchange Commission or any state
insurance regulator, as soon as practical after the
filing thereof;
(e) any other report submitted to the Company by independent
accountants in connection with any annual, interim or
special audit made by them of the books of the Company,
as soon as practical after the receipt thereof.
20
<PAGE> 21
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
GENERAL AMERICAN VARIABLE INSURANCE
LIFE INSURANCE COMPANY PRODUCTS FUND II
By: ------------------------ By: ------------------------
Title: ------------------------ Title: ------------------------
Date: ------------------------ Date: ------------------------
FIDELITY DISTRIBUTORS CORPORATION
By: -----------------------
Title: -----------------------
Date: -----------------------
21
<PAGE> 22
Schedule A
----------
Accounts
--------
Name of Account Date of Resolution of Company's Board which
Established the Account
General American
Separate Account Eleven January 24, 1985
General American
Separate Account Thirty-Six January 26, 1995
General American
Separate Account Two October 22, 1970
22
<PAGE> 23
Schedule B
----------
Contracts
---------
1. Contract Form Numbers:
VUL-95 10004 (9/86)
PVUL-95 10005 (9/86)
VGSP 10077 (4/92)
VUL-100 10098 (1/95)
IVA (TQ) 10014 (7/87)
IVA (NTQ) 10013 (7/87)
TSA Contract 10015 (7/87)
TSA Certificate 10016 (7/87)
Master Plan 10096 (3/94)
2. Funds currently available to act as investment vehicles for certain of
the above-listed contracts:
Variable Insurance Products Fund
General American Capital Company
Van Eck Investment Trust
23
<PAGE> 24
SCHEDULE C
PROXY VOTING PROCEDURE
The following is a list of procedures and corresponding responsibilities for
the handling of proxies relating to the Fund by the Underwriter, the Fund and
the Company. The defined terms herein shall have the meanings assigned in
the Participation Agreement except that the term "Company" shall also include
the department or third party assigned by the Insurance Company to perform
the steps delineated below.
1. The number of proxy proposals is given to the Company by the
Underwriter as early as possible before the date set by the Fund for
the shareholder meeting to facilitate the establishment of tabulation
procedures. At this time the Underwriter will inform the Company of
the Record, Mailing and Meeting dates. This will be done verbally
approximately two months before meeting.
2. Promptly after the Record Date, the Company will perform a "tape run",
or other activity, which will generate the names, addresses and number
of units which are attributed to each contractowner/policyholder (the
"Customer") as of the Record Date. Allowance should be made for
account adjustments made after this date that could affect the status
of the Customers' accounts as of the Record Date.
Note: The number of proxy statements is determined by the activities
described in Step #2. The Company will use its best efforts to call in
the number of Customers to Fidelity, as soon as possible, but no later
than two weeks after the Record Date.
3. The Fund's Annual Report must be sent to each Customer by the Company
either before or together with the Customers' receipt of a proxy
statement. Underwriter will provide at least one copy of the last
Annual Report to the Company.
4. The text and format for the Voting Instruction Cards ("Cards" or
"Card") is provided to the Company by the Fund. The Company, at its
expense, shall produce and personalize the Voting Instruction Cards.
The Legal Department of the Underwriter or its affiliate ("Fidelity
Legal") must approve the Card before it is printed. Allow
approximately 2-4 business days for printing information on the Cards.
Information commonly found on the Cards includes:
a. name (legal name as found on account registration)
b. address
c. Fund or account number
d. coding to state number of units
e. individual Card number for use in tracking and
verification of votes (already on Cards as printed by
the Fund)
(This and related steps may occur later in the chronological process due to
possible uncertainties relating to the proposals.)
24
<PAGE> 25
5. During this time, Fidelity Legal will develop, produce, and the Fund
will pay for the Notice of Proxy and the Proxy Statement (one
document). Printed and folded notices and statements will be sent to
Company for insertion into envelopes (envelopes and return envelopes
are provided and paid for by the Insurance Company). Contents of
envelope sent to Customers by Company will include:
a. Voting Instruction Card(s)
b. One proxy notice and statement (one document)
c. return envelope (postage pre-paid by Company) addressed
to the Company or its tabulation agent
d. "urge buckslip" - optional, but recommended. (This is a
small, single sheet of paper that requests Customers to
vote as quickly as possible and that their vote is
important. One copy will be supplied by the Fund.)
e. cover letter - optional, supplied by Company and
reviewed and approved in advance by Fidelity Legal.
6. The above contents should be received by the Company approximately 3-5
business days before mail date. Individual in charge at Company
reviews and approves the contents of the mailing package to ensure
correctness and completeness. Copy of this approval sent to Fidelity
Legal.
7. Package mailed by the Company.
* The Fund must allow at least a 15-day solicitation time to the
----
Company as the shareowner. (A 5-week period is recommended.)
Solicitation time is calculated as calendar days from (but not
---
including) the meeting, counting backwards.
8. Collection and tabulation of Cards begins. Tabulation usually takes
place in another department or another vendor depending on process
used. An often used procedure is to sort Cards on arrival by proposal
into vote categories of all yes, no, or mixed replies, and to begin
data entry.
Note: Postmarks are not generally needed. A need for postmark
information would be due to an insurance company's internal procedure
and has not been required by Fidelity in the past.
9. Signatures on Card checked against legal name on account registration
which was printed on the Card.
Note: For Example, If the account registration is under "Bertram C.
Jones, Trustee," then that is the exact legal name to be printed on the
Card and is the signature needed on the Card.
10. If Cards are mutilated, or for any reason are illegible or are not
signed properly, they are sent back to Customer with an explanatory
letter, a new Card and return
25
<PAGE> 26
envelope. The mutilated or illegible Card is disregarded and considered
to be not received for purposes of vote tabulation. Any Cards that have
------------
"kicked out" (e.g. mutilated, illegible) of the procedure are "hand
verified," i.e., examined as to why they did not complete the system.
Any questions on those Cards are usually remedied individually.
11. There are various control procedures used to ensure proper
tabulation of votes and accuracy of that tabulation. The most
prevalent is to sort the Cards as they first arrive into categories
depending upon their vote; an estimate of how the vote is progressing
may then be calculated. If the initial estimates and the actual vote
do not coincide, then an internal audit of that vote should occur.
This may entail a recount.
12. The actual tabulation of votes is done in units which is then converted
to shares. (It is very important that the Fund receives the
tabulations stated in terms of a percentage and the number of shares.)
------
Fidelity Legal must review and approve tabulation format.
13. Final tabulation in shares is verbally given by the Company to Fidelity
Legal on the morning of the meeting not later than 10:00 a.m. Boston
time. Fidelity Legal may request an earlier deadline if required to
calculate the vote in time for the meeting.
14. A Certification of Mailing and Authorization to Vote Shares will be
required from the Company as well as an original copy of the final
vote. Fidelity Legal will provide a standard form for each
Certification.
15. The Company will be required to box and archive the Cards received from
the Customers. In the event that any vote is challenged or if
otherwise necessary for legal, regulatory, or accounting purposes,
Fidelity Legal will be permitted reasonable access to such Cards.
16. All approvals and "signing-off" may be done orally, but must always be
followed up in writing.
26
<PAGE> 1
Exhibit 1.(8)(c) 2/23/98
FUND PARTICIPATION AGREEMENT
---- ------------- ---------
This Agreement is entered into as of the --- day of ------- , 199-, between
- --------------------("Insurance Company"), a life insurance company organized
under the laws of the State of -------, and J.P. Morgan Series Trust II
("Fund"), a business trust organized under the laws of Delaware, with respect
to the Fund's portfolio or portfolios set forth on Schedule 1 hereto, as such
Schedule may be revised from time to time (the "Series"; if there are more
than one Series to which this Agreement applies, the provisions herein shall
apply severally to each such Series).
ARTICLE I 1.
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as amended.
1.2 "Board" shall mean the Board of Trustees of the Fund having the
responsibility for management and control of the Fund.
1.3 "Business Day" shall mean any day for which the Fund calculates net
asset value per share as described in the Fund's Prospectus.
1.4 "Commission" shall mean the Securities and Exchange Commission.
1.5 "Contract" shall mean a variable annuity or variable life insurance
contract that uses the Fund as an underlying investment medium.
Individuals who participate under a group Contract are "Participants".
1.6 "Contractholder" shall mean any entity that is a party to a Contract
with a Participating Company.
1.7 "Disinterested Board Members" shall mean those members of the Board
that are not deemed to be "interested persons" of the Fund, as defined
by the Act.
1.8 "Participating Companies" shall mean any insurance company (including
Insurance Company), which offers variable annuity and/or variable life
insurance contracts to the public and which has entered into an
agreement with the Fund for the purpose of making Fund shares available
to serve as the underlying investment medium for the aforesaid
Contracts.
<PAGE> 2
1.9 "Plans" shall mean qualified pension and retirement benefit plans.
1.10 "Prospectus" shall mean the Fund's current prospectus and statement of
additional information, as most recently filed with the Commission,
with respect to the Series.
1.11 "Separate Account" shall mean --------------------- Company Variable
Annuity Separate Account, a separate account established by Insurance
Company in accordance with the laws of the State of
1.12 "Software Program" shall mean the software program used by the Fund for
providing Fund and account balance information including net asset
value per share.
1.13 "Insurance Company's General Account(s)" shall mean the general
account(s) of Insurance Company and its affiliates which invest in the
Fund.
-2-
<PAGE> 3
ARTICLE II 2.
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an insurance
company duly organized and in good standing under applicable law; (b)
it has legally and validly established the Separate Account pursuant
to the ----------- Insurance Code for the purpose of offering to the
public certain individual variable annuity contracts; (c) it has
registered the Separate Account as a unit investment trust under the
Act to serve as the segregated investment account for the Contracts;
(d) each Separate Account is eligible to invest in shares of the Fund
without such investment disqualifying the Fund as an investment
medium for insurance company separate accounts supporting variable
annuity contracts or variable life insurance contracts; and (e) each
Separate Account shall comply with all applicable legal requirements.
2.2 Insurance Company represents and warrants that (a) the Contracts will
be described in a registration statement filed under the Securities
Act of 1933, as amended ("1933 Act"); (b) the Contracts will be
issued and sold in compliance in all material respects with all
applicable federal and state laws; and (c) the sale of the Contracts
shall comply in all material respects with state insurance law
requirements. Insurance Company agrees to inform the Fund promptly
of any investment restrictions imposed by state insurance law and
applicable to the Fund.
2.3 Insurance Company represents and warrants that the income, gains and
losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the applicable Contracts, to
be credited to or charged against such Separate Account without
regard to other income, gains or losses from assets allocated to any
other accounts of Insurance Company. Insurance Company represents and
warrants that the assets of the Separate Account are and will be kept
separate from Insurance Company's General Account and any other
separate accounts Insurance Company may have, and will not be charged
with liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance
Company.
2.4 Fund represents that the Fund is registered with the Commission under
the Act as an open-end management investment company and possesses,
and shall maintain, all legal and regulatory licenses, approvals,
consents and/or exemptions required for the Fund to operate and offer
its shares as an underlying investment medium for Participating
Companies. The Fund has established five portfolios and may in the
future establish other portfolios.
-3-
<PAGE> 4
2.5 Fund represents that it is currently qualified as a Regulated
Investment Company under Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or
similar provision) and that it will notify Insurance Company
immediately upon having a reasonable basis for believing that it has
ceased to so qualify or that it might not so qualify in the future.
2.6 Insurance Company represents and agrees that the Contracts are
currently, and at the time of issuance will be, treated as life
insurance policies or annuity contracts, whichever is appropriate,
under applicable provisions of the Code, and that it will make every
effort to maintain such treatment and that it will notify the Fund
and its investment adviser immediately upon having a reasonable basis
for believing that the Contracts have ceased to be so treated or that
they might not be so treated in the future. Insurance Company agrees
that any prospectus offering a Contract that is a "modified endowment
contract," as that term is defined in Section 7702A of the Code, will
identify such Contract as a modified endowment contract (or policy).
2.7 Fund agrees that the Fund's assets shall be managed and invested in a
manner that complies with the requirements of Section 817(h) of the
Code.
2.8 Insurance Company agrees that the Fund shall be permitted (subject to
the other terms of this Agreement) to make Series' shares available
to other Participating Companies and contractholders and to Plans.
2.9 Fund represents and warrants that any of its trustees, officers,
employees, investment advisers, and other individuals/entities who
deal with the money and/or securities of the Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Fund in an amount not less
than that required by Rule 17g-under the Act. The aforesaid Bond
shall include coverage for larceny and embezzlement and shall be
issued by a reputable bonding company.
2.10 Insurance Company represents and warrants that all of its employees
and agents who deal with the money and/or securities of the Fund are
and shall continue to be at all times covered by a blanket fidelity
bond or similar coverage in an amount not less than the coverage
required to be maintained by the Fund. The aforesaid Bond shall
include coverage for larceny and embezzlement and shall be issued by
a reputable bonding company.
2.11 Insurance Company agrees that the Fund's investment adviser shall be
deemed a third party beneficiary under this Agreement and may enforce
any and all rights conferred by virtue of this Agreement.
-4-
<PAGE> 5
ARTICLE III 3.
FUND SHARES
3.1 The Contracts funded through the Separate Account will provide for
the investment of certain amounts in the Series' shares.
3.2 Fund agrees to make the shares of its Series available for purchase
at the then applicable net asset value per share by Insurance Company
and the Separate Account on each Business Day pursuant to rules of
the Commission. Notwithstanding the foregoing, the Fund may refuse to
sell the shares of any Series to any person, or suspend or terminate
the offering of the shares of any Series if such action is required
by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Board, acting in good faith and in light of
its fiduciary duties under federal and any applicable state laws,
necessary and in the best interests of the shareholders of such
Series.
3.3 Fund agrees that shares of the Fund will be sold only to
Participating Companies and their separate accounts and to the
general accounts of those Participating Companies and their
affiliates and to Plans. No shares of any Series will be sold to the
general public.
3.4 Fund shall use its best efforts to provide closing net asset value,
dividend and capital gain information for each Series available on a
per-share and Series basis to Insurance Company by 7:00 p.m. Eastern
Time on each Business Day. Any material errors in the calculation of
net asset value, dividend and capital gain information shall be
reported immediately upon discovery to Insurance Company.
Non-material errors will be corrected in the next Business Day's net
asset value per share for the Series in question.
3.5 At the end of each Business Day, Insurance Company will use the
information described in Sections 3.2 and 3.4 to calculate the
Separate Account unit values for the day. Using this unit value,
Insurance Company will process the day's Separate Account
transactions received by it by the close of trading on the floor of
the New York Stock Exchange (currently 4:00 p.m. Eastern time) to
determine the net dollar amount of Series shares which will be
purchased or redeemed at that day's closing net asset value per share
for such Series. The net purchase or redemption orders will be
transmitted to the Fund by Insurance Company by 9:00 a.m. Eastern
Time on the Business Day next following Insurance Company's receipt
of that information. Subject to Sections 3.6 and 3.8, all purchase
and redemption orders for Insurance Company's General Accounts shall
be effected at the net asset value per share of the relevant Series
next calculated after receipt of the order by the Fund or its
Transfer Agent.
-5-
<PAGE> 6
3.6 Fund appoints Insurance Company as its agent for the limited purpose
of accepting orders for the purchase and redemption of shares of each
Series for the Separate Account. Fund will execute orders for any
Series at the applicable net asset value per share determined as of
the close of trading on the day of receipt of such orders by
Insurance Company acting as agent ("effective trade date"), provided
that the Fund receives notice of such orders by 9:00 a.m. Eastern
Time on the next following Business Day and, if such orders request
the purchase of Series shares, the conditions specified in Section
3.8, as applicable, are satisfied. A redemption or purchase request
for any Series that does not satisfy the conditions specified above
and in Section 3.8, as applicable, will be effected at the net asset
value computed for such Series on the Business Day immediately
preceding the next following Business Day upon which such conditions
have been satisfied.
3.7 Insurance Company will make its best efforts to notify Fund in
advance of any unusually large purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of Series shares,
Insurance Company will pay for such purchases by wiring Federal Funds
to Fund or its designated custodial account on the day the order is
transmitted. Insurance Company shall make all reasonable efforts to
transmit to the Fund payment in Federal Funds by 12:00 noon Eastern
Time on the Business Day the Fund receives the notice of the order
pursuant to Section 3.5. Fund will execute such orders at the
applicable net asset value pet share determined as of the close of
trading on the effective trade date if Fund receives payment in
Federal Funds by 12:00 noon Eastern Time on the Business Day the Fund
receives the notice of the order pursuant to Section 3.5. If payment
in Federal Funds for any purchase is not received or is received by
the Fund after 12:00 noon Eastern Time on such Business Day,
Insurance Company shall promptly upon the Fund's request, reimburse
the Fund for any charges, costs, fees, interest or other expenses
incurred by the Fund in connection with any advances to, or
borrowings or overdrafts by, the Fund, or any similar expenses
incurred by the Fund, as a result of portfolio transactions effected
by the Fund based upon such purchase request. If Insurance Company's
order requests the redemption of Series shares valued at or greater
than $1 million dollars, the Fund may wire such amount to Insurance
Company within seven days of the order.
3.9 Fund has the obligation to ensure that Series shares are registered
with applicable federal agencies at all times.
3.10 Fund will confirm each purchase or redemption order made by Insurance
Company. Transfer of Series shares will be by book entry only. No
share certificates will be issued to Insurance Company. Insurance
Company will record shares ordered from Fund in an appropriate title
for the corresponding account.
3.11 Fund shall credit Insurance Company with the appropriate number of
shares.
-6-
<PAGE> 7
3.12 On each ex-dividend date of the Fund or, if not a Business Day, on
the first Business Day thereafter, Fund shall communicate to
Insurance Company the amount of dividend and capital gain, if any,
per share of each Series. All dividends and capital gains of any
Series shall be automatically reinvested in additional shares of the
relevant Series at the applicable net asset value per share of such
Series on the payable date. Fund shall, on the day after the payable
date or, if not a Business Day, on the first Business Day thereafter,
notify Insurance Company of the number of shares so issued.
-7-
<PAGE> 8
ARTICLE IV 4.
STATEMENTS AND REPORTS
4.1 Fund shall provide monthly statements of account as of the end of
each month for all of Insurance Company's accounts by the fifteenth
(15th) Business Day of the following month.
4.2 Fund shall distribute to Insurance Company copies of the Fund's
Prospectuses, proxy materials, notices, periodic reports and other
printed materials (which the Fund customarily provides to its
shareholders) in quantities as Insurance Company may reasonably
request for distribution to each Contractholder and Participant.
4.3 Fund will provide to Insurance Company at least one complete copy of
all registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Fund or its shares,
contemporaneously with the filing of such document with the
Commission or other regulatory authorities.
4.4 Insurance Company will provide to the Fund at least one copy of all
registration statements, Prospectuses, reports, proxy statements,
sales literature and other promotional materials, applications for
exemptions, requests for no-action letters, and all amendments to any
of the above, that relate to the Contracts or the Separate Account,
contemporaneously with the filing of such document with the
Commission.
-8-
<PAGE> 9
ARTICLE V 5.
EXPENSES
5.1 The charge to the Fund for all expenses and costs of the Series,
including but not limited to management fees, administrative expenses
and legal and regulatory costs, will be made in the determination of
the relevant Series' daily net asset value per share so as to
accumulate to an annual charge at the rate set forth in the Fund's
Prospectus. Excluded from the expense limitation described herein
shall be brokerage commissions and transaction fees and extraordinary
expenses.
5.2 Except as provided in this Article V and, in particular in the next
sentence, Insurance Company shall not be required to pay directly any
expenses of the Fund or expenses relating to the distribution of its
shares. Insurance Company shall pay the following expenses or costs:
a. Such amount of the production expenses of any Fund materials,
including the cost of printing the Fund's Prospectus, or
marketing materials for prospective Insurance Company
Contractholders and Participants as the Fund's investment
adviser and Insurance Company shall agree from time to time.
b Distribution expenses of any Fund materials or marketing
materials for prospective Insurance Company Contractholders
and Participants.
c. Distribution expenses of Fund materials or marketing materials
for Insurance Company Contractholders and Participants.
Except as provided herein, all other Fund expenses shall not be borne
by Insurance Company.
-9-
<PAGE> 10
ARTICLE VI 6.
EXEMPTIVE RELIEF
-10-
<PAGE> 11
6. EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated December
1996 of the Securities and Exchange Commission under Section 6(c) of
the Act and, in particular, has reviewed the conditions to the relief
set forth in the related Notice. As set forth therein, Insurance
Company agrees to report any potential or existing conflicts promptly
to the Board, and in particular whenever contract voting instructions
are disregarded, and recognizes that it will be responsible for
assisting the Board in carrying out its responsibilities under such
application. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested Board
Members, determines that a material irreconcilable conflict exists
with regard to Contractholder investments in the Fund, the Board
shall give prompt notice to all Participating Companies. If the Board
determines that Insurance Company is responsible for causing or
creating said conflict, Insurance Company shall at its sole cost and
expense, and to the extent reasonably practicable (as determined by a
majority of the Disinterested Board Members), take such action as is
necessary to remedy or eliminate the irreconcilable material
conflict. Such necessary action may include, but shall not be limited
to:
a. Withdrawing the assets allocable to the Separate Account from
the Series and reinvesting such assets in a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote or all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of a
decision by Insurance Company to disregard Contractholder voting
instructions and said decision represents a minority position or
would preclude a majority vote by all Contractholders having an
interest in the Fund, Insurance Company may be required, at the
Board's election, to withdraw the Separate Account's investment in
the Fund.
6.4 For the purpose of this Article, a majority of the Disinterested
Board Members shall determine whether or not any proposed action
adequately remedies any irreconcilable material conflict, but in no
event will the Fund be required to bear the expense of establishing a
new funding medium for any Contract. Insurance Company shall not be
required by this Article to establish a new finding medium for any
Contract if an offer to do so has been declined by vote of a majority
of the Contractholders materially adversely affected by the
irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no action by the
Separate Account or the Fund taken or omitted as a result of any act
or failure to act by Insurance Company pursuant to this Article VI
shall relieve Insurance Company of its obligations under, or
otherwise affect the operation of, Article V.
-11-
<PAGE> 12
ARTICLE VII 7.
VOTING OF FUND SHARES
7.1 Fund shall provide Insurance Company with copies at no cost to
Insurance Company, of the Fund's proxy material, reports to
shareholders and other communications to shareholders in such
quantity as Insurance Company shall reasonably require for
distributing to Contractholders or Participants.
Insurance Company shall:
(a) solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with
applicable law;
(b) vote the Series shares in accordance with instructions
received from Contractholders or Participants; and
(c) vote Series shares for which no instructions have been
received in the same proportion as Series shares for which
instructions have been received.
Insurance Company agrees at all times to votes its General
Account shares in the same proportion as Series shares for which
instructions have been received from Contractholders or Participants.
Insurance Company further agrees to be responsible for assuring that
voting Series shares for the Separate Account is conducted in a
manner consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the prior written
consent of the Fund and its investment adviser, solicit, induce or
encourage Contractholders to (a) change or supplement the Fund's
current investment adviser or (b) change, modify, substitute, add to
or delete the Fund from the current investment media for the
Contracts.
-12-
<PAGE> 13
ARTICLE VIII 8.
MARKETING AND REPRESENTATIONS
8.1 The Fund or its underwriter shall periodically furnish
Insurance Company with the following documents, in quantities as
Insurance Company may reasonably request:
a. Current Prospectus and any supplements thereto;
b. other marketing materials.
Expenses for the production of such documents shall be borne
by Insurance Company in accordance with Section 5.2 of this
Agreement.
8.2 Insurance Company shall designate certain persons or entities which
shall have the requisite licenses to solicit applications for the
sale of Contracts. No representation is made as to the number or
amount of Contracts that are to be sold by Insurance Company.
Insurance Company shall make reasonable efforts to market the
Contracts and shall comply with all applicable federal and state laws
in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be furnished, to
the Fund, each piece of sales literature or other promotional
material in which the Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to its
use. No such material shall be used unless the Fund approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received within ten Business Days after
receipt of such material. The Fund shall use all reasonable efforts
to respond within ten days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund or any Series in connection with the sale of the Contracts other
than the information or representations contained in the registration
statement or Prospectus, as may be amended or supplemented from time
to time, or in reports or proxy statements for the Fund, or in sales
literature or other promotional material approved by the Fund.
8.5 Fund shall furnish, or shall cause to be furnished, to Insurance
Company, each piece of the Fund's sales literature or other
promotional material in which Insurance Company or the Separate
Account is named, at least fifteen Business Days prior to its use. No
such material shall be issued unless Insurance Company approves such
material. Such approval (if given) must be in writing and shall be
presumed not given if not received within ten Business Days after
receipt of such material. Insurance Company shall use all reasonable
efforts to respond within ten days of receipt.
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<PAGE> 14
8.6 Fund shall not, in connection with the sale of Series shares, give
any information or make any representations on behalf of Insurance
Company or concerning Insurance Company, the Separate Account, or the
Contracts other than the information or representations contained in
a registration statement or prospectus for the Contracts, as may be
amended or supplemented from time to time, or in published reports
for the Separate Account which are in the public domain or approved
by Insurance Company for distribution to Contractholders or
Participants, or in sales literature or other promotional material
approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature or other
promotional material" or words of similar import include, without
limitation, advertisements (such as material published, or designed
for use, in a newspaper, magazine or other periodical, radio,
television, telephone or tape recording, videotape display, signs or
billboards, motion pictures or other public media), sales literature
(such as any written communication distributed or made generally
available to customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar texts, or
reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or all
agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports and proxy
materials, and any other material constituting sales literature or
advertising under National Association of Securities Dealers, Inc.
rules, the Act or the 1933 Act.
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<PAGE> 15
ARTICLE IX 9.
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless the Fund, its
investment adviser, any sub-investment adviser of a Series, and their
affiliates, and each of their directors, trustees, officers,
employees, agents and each person, if any, who controls or is
associated with any of the foregoing entities or persons within the
meaning of the 1933 Act (collectively, the "lndemnified Parties" for
purposes of Section 9.1), against any and all losses, claims, damages
or liabilities joint or several (including any investigative, legal
and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or proceeding or any
claim asserted) for which the Indemnified Parties may become subject,
under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect to thereof) (i) arise
out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in information furnished by
Insurance Company for use in the registration statement or Prospectus
or sales literature or advertisements of the Fund or with respect to
the Separate Account or Contracts, or arise out of or are based upon
the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) arise out of or as a result of conduct,
statements or representations (other than statements or
representations contained in the Prospectus and sales literature or
advertisements of the Fund) of Insurance Company or its agents, with
respect to the sale and distribution of Contracts for which Series
shares are an underlying investment; (iii) arise out of the wrongful
conduct of Insurance Company or persons under its control with
respect to the sale or distribution of the Contracts or Series
shares; (iv) arise out of Insurance Company's incorrect calculation
and/or untimely reporting of net purchase or redemption orders; or
(v) arise out of any breach by Insurance Company of a material term
of this Agreement or as a result of any failure by Insurance Company
to provide the services and furnish the materials or to make any
payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with: investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii) above
Insurance Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission or alleged omission made
in such registration statement, prospectus, sales literature, or
advertisement in conformity with written information furnished to
Insurance Company by the Fund specifically for use therein; and
provided, further, that Insurance Company shall not be liable for
special, consequential or incidental damages. This indemnity
agreement will be in addition to any liability which Insurance
Company may otherwise have.
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<PAGE> 16
9.2 The Fund agrees to indemnify and hold harmless Insurance Company and
each of its directors, officers, employees, agents and each person,
if any, who controls Insurance Company within the meaning of the 1933
Act against any losses, claims, damages or liabilities to which
Insurance Company or any such director, officer, employee, agent or
controlling person may become subject, under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) (1) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact
contained in the registration statement or Prospectus or sales
literature or advertisements of the Fund; (2) arise out of or are
based upon the omission to state in the registration statement or
Prospectus or sales literature or advertisements of the Fund any
material fact required to be stated therein or necessary to make the
statements therein not misleading; or (3) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the registration statement or Prospectus or sales
literature or advertisements with respect to the Separate Account or
the Contracts and such statements were based on information provided
to Insurance Company by the Fund; and the Fund will reimburse any
legal or other expenses reasonably incurred by Insurance Company or
any such director, officer, employee, agent or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Fund will
not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or omission or alleged omission made in such Registration
Statement, Prospectus, sales literature or advertisements in
conformity with written information furnished to the Fund by
Insurance Company specifically for use therein; and provided,
further, that the Fund shall not be liable for special, consequential
or incidental damages. This indemnity agreement will be in addition
to any liability which the Fund may otherwise have.
9.3 The Fund shall indemnify and hold Insurance Company harmless against
any and all liability, loss, damages, costs or expenses which
Insurance Company may incur, suffer or be required to pay due to the
Fund's (1) incorrect calculation of the daily net asset value
dividend rate or capital gain distribution rate of a Series; (2)
incorrect reporting of the daily net asset value, dividend rate or
capital gain distribution rate; and (3) untimely reporting of the net
asset value, dividend rate or capital gain distribution rate;
provided that the Fund shall have no obligation to indemnify and hold
harmless Insurance Company if the incorrect calculation or incorrect
or untimely reporting was the result of incorrect information
furnished by Insurance Company or information furnished untimely by
Insurance Company or otherwise as a result of or relating to a breach
of this Agreement by Insurance Company; and provided, further, that
the Fund shall not be liable for special, consequential or incidental
damages.
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<PAGE> 17
9.4 Promptly after receipt by an indemnified party under this Article of
notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the
indemnifying party under this Article, notify the indemnifying party
of the commencement thereof. The omission to so notify the
indemnifying party will not relieve the indemnifying party from any
liability under this Article IX, except to the extent that the
omission results in a failure of actual notice to the indemnifying
party and such indemnifying party is damaged solely as a result of
the failure to give such notice. In case any such action is brought
against any indemnified party, and it notified the indemnifying party
of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, assume
the defense thereof with counsel reasonably satisfactory to such
indemnified party, and to the extent that the indemnifying party has
given notice to such effect to the indemnified party and is
performing its obligations under this Article, the indemnifying party
shall not be liable for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation.
Notwithstanding the foregoing, in any such proceeding, any
indemnified party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written
consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in this
Article IX.
9.5 Insurance Company shall indemnify and hold the Fund, its investment
adviser and any sub-investment adviser of a Series harmless against
any tax liability incurred by the Fund under Section 851 of the Code
arising from purchases or redemptions by Insurance Company's General
Accounts or the account of its affiliates.
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<PAGE> 18
ARTICLE X 10.
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and shall
continue in force until terminated in accordance with the provisions
herein.
10.2 This Agreement shall terminate without penalty as to one or more
Series at the option of the terminating party:
a. At the option of Insurance Company or the Fund at any time
from the date hereof upon 180 days' notice, unless a shorter
time is agreed to by the parties;
b. At the option of Insurance Company, if shares of any Series
are not reasonably available to meet the requirements of the
Contracts as determined by Insurance Company. Prompt notice of
election to terminate shall be furnished by Insurance Company,
said termination to be effective ten days after receipt of
notice unless the Fund makes available a sufficient number of
shares to meet the requirements of the Contracts within said
ten-day period;
c. At the option of Insurance Company, upon the institution of
formal proceedings against the Fund by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in Insurance Company's reasonable
judgment, materially impair the Fund's ability to meet and
perform the Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by
Insurance Company with said termination to be effective upon
receipt of notice;
d. At the option of the Fund, upon the institution of formal
proceedings against Insurance Company by the Commission,
National Association of Securities Dealers or any other
regulatory body, the expected or anticipated ruling, judgment
or outcome of which would, in the Fund's reasonable judgment,
materially impair Insurance Company's ability to meet and
perform Insurance Company's obligations and duties hereunder.
Prompt notice of election to terminate shall be furnished by
the Fund with said termination to be effective upon receipt of
notice;
e. At the option of the Fund, if the Fund shall determine, in its
sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in
its business or financial condition or is the subject of
material adverse publicity and such material adverse change or
material adverse publicity is likely to have a material
adverse impact upon the business and operation of the Fund or
its investment adviser, the Fund shall notify Insurance
Company in writing of such determination and its intent to
terminate this Agreement, and after considering the actions
taken by Insurance Company and any other changes in
circumstances since the giving of such notice, such
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<PAGE> 19
determination of the Fund shall continue to apply on the
sixtieth (60th) day following the giving of such notice, which
sixtieth day shall be the effective date of termination;
f. Upon termination of the Investment Advisory Agreement between
the Fund and its investment adviser or its successors unless
Insurance Company specifically approves the selection of a new
Fund investment adviser. The Fund shall promptly furnish
notice of such termination to Insurance Company;
g. In the event the Fund's shares are not registered, issued or
sold in accordance with applicable federal law, or such law
precludes the use of such shares as the underlying investment
medium of Contracts issued or to be issued by Insurance
Company. Termination shall be effective immediately upon such
occurrence without notice;
h. At the option of the Fund upon a determination by the Board in
good faith that it is no longer advisable and in the best
interests of shareholders for the Fund to continue to operate
pursuant to this Agreement. Termination pursuant to this
Subsection (h) shall be effective upon notice by the Fund to
Insurance Company of such termination;
i. At the option of the Fund if the Contracts cease to qualify as
annuity contracts or life insurance policies, as applicable,
under the Code, or if the Fund reasonably believes that the
Contracts may fail to so qualify;
j. At the option of either party to this Agreement, upon another
party's breach of any material provision of this Agreement;
k. At the option of the Fund, if the Contracts are not
registered, issued or sold in accordance with applicable
federal and/or state law; or
I. Upon assignment of this Agreement, unless made with the
written consent of the non-assigning party.
Any such termination pursuant to Section 10.2a, l0.2d,
l0.2e, 10.2f or 10.2k herein shall not affect the operation
of Article V of this Agreement. Any termination of this
Agreement shall not affect the operation of Article IX of this
Agreement.
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<PAGE> 20
10.3 Notwithstanding any termination of this Agreement pursuant to
Section 10.2 hereof, the Fund and its investment adviser may, at the
option of the Fund, continue to make available additional Series
shares for so long as the Fund desires pursuant to the terms and
conditions of this Agreement as provided below, for all Contracts in
effect on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Specifically,
without limitation, if the Fund so elects to make additional Series
shares available, the owners of the Existing Contracts or Insurance
Company, whichever shall have legal authority to do so, shall be
permitted to reallocate investments in the Series, redeem investments
in the Fund and/or invest in the Fund upon the making of additional
purchase payments under the Existing Contracts. In the event of a
termination of this Agreement pursuant to Section 10.2 hereof; the
Fund, as promptly as is practicable under the circumstances, shall
notify Insurance Company whether the Fund will continue to make
Series shares available after such termination. If Series shares
continue to be made available after such termination, the provisions
of this Agreement shall remain in effect and thereafter either the
Fund or Insurance Company may terminate the Agreement, as so
continued pursuant to this Section 10.3, upon prior written notice to
the other party, such notice to be for a period that is reasonable
under the circumstances but, if given by the Fund, need not be for
more than six months.
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<PAGE> 21
ARTICLE XI 11.
AMENDMENTS
11.1 Any other changes in the terms of this Agreement shall be made by
agreement in writing between Insurance Company and Fund.
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<PAGE> 22
ARTICLE XII 12.
NOTICE
12.1 Each notice required by this Agreement shall be given by certified
mail, return receipt requested, to the appropriate parties at the
following addresses:
Insurance Company:
Fund:
J.P. Morgan Series Trust II
c/o Morgan Guaranty Trust Company
522 Fifth Avenue
New York, New York 10036
Attention: Sharon J. Weinberg
Notice shall be deemed to be given on the date of receipt by
the addresses as evidenced by the return receipt.
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<PAGE> 23
ARTICLE XIII 13.
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the
Fund. The obligations of this Agreement shall only be binding upon
the assets and property of the Fund and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
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<PAGE> 24
ARTICLE XIV 14.
LAW
14.1 This Agreement shall be construed in accordance with the internal
laws of the State of New York, without giving effect to principles of
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
duly executed and attested as of the date first above written.
INSURANCE COMPANY
By: ----------------------------
Its: ----------------------------
J.P.MORGAN SERIES TRUST II
By: ----------------------------
Its: ----------------------------
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<PAGE> 25
SCHEDULE I
Name of Series
<PAGE> 1
Exhibit 1.(8)(d)
FUND PARTICIPATION AGREEMENT
----------------------------
General American Life Insurance Company ("Insurance Company"), Van Eck
Investment Trust ("Trust") and the Trust's investment adviser, Van Eck
Associates Corporation ("Adviser") hereby agree that shares of the series of
the Trust as listed on Exhibit A, as it may, from time to time, be amended
("Portfolios"), shall be made available to serve as an underlying investment
medium for certain variable life insurance contracts ("Contracts") to be
offered by Insurance Company subject to the following provisions:
1. The Trust represents that it engages in business as an open-end
management investment company organized as a "business trust" under the
laws of the Commonwealth of Massachusetts and is available to act as
the investment vehicle for separate accounts established for variable
life insurance policies and variable annuity contracts to be offered by
insurance companies which have entered into participation agreements
with the Trust.
2. The Trust represents that it has obtained an order from the Securities
and Exchange Commission ("SEC"), dated September 19, 1990 (File No
811-5083), granting Participating Insurance Companies and variable
annuity and variable life insurance separate accounts exemptions from
the provisions of Sections 9(a), 13(a), 15(a) and 15(b) of the
Investment Company Act of 1940, as amended (the "1940 Act") and Rules
6e-2(b)(15) of the Investment Company Act of 1940, as amended (the
"1940 Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder to be
sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and unaffiliated life insurance
companies.
3. The Trust agrees that shares of the Trust will be sold only to
Participating Insurance Companies and their separate accounts. No
shares of any Portfolio will be sold to the general public.
4. Insurance Company represents that it has established Separate Account
Eleven (the "Variable Account"), a separate account under Missouri law,
and has registered it as a unit investment trust under the 1940 Act to
set aside and invest assets attributed to one or more of the Contracts.
The Contracts provide for the allocation of net amounts received by
Insurance Company to separate series of the Variable Account for
investment in the shares of specified investment companies selected
among those companies available through the Variable Account to fund
certain of the Contracts. Selection of a particular investment company
is made by the Contract owner who may change such selection from time
to time in accordance with the terms of the applicable Contract.
5. The Trust or the Adviser will provide closing net asset value, dividend
and capital gain information at the close of trading each business day
to Insurance
1
<PAGE> 2
Company. Insurance Company will use this data to calculate unit values
on a daily basis as soon as reasonably practical after the net asset
value per share is calculated. Orders will be executed on a daily basis
at the net asset value next computed after receipt by the Trust or its
designee of the order for the shares of the Trust. For purposes of this
paragraph, Insurance Company shall be the designee of the Trust receipt
of such orders. Payment for purchases will be wired to a custodial
account designated by the Trust or the Adviser on the next business day
after an order to purchase is made in accordance with this paragraph.
Income, dividends and capital gains distributions shall be reinvested in
additional shares at the ex-date net asset value. Insurance Company
reserves the right to require that all such income, dividends and capital
gains distributions be received in cash.
6. All expenses incident to the performance by the Trust under this
Agreement shall be paid by the Trust. The Trust shall pay the cost of
registration of Trust shares with the SEC. The Trust shall distribute,
to the Variable Account, proxy material, periodic Trust reports to
shareholders and other material the Trust may require to be sent to
Contract owners. The Trust shall pay the cost of qualifying Trust
shares in states where required. The Trust will provide Insurance
Company with a reasonable quantity of the Trust's Prospectus and the
reports to be used in contemplation of this Agreement. The Trust will
provide Insurance Company with a copy of the Statement of Additional
Information suitable for duplication.
7. Insurance Company and its agents shall make no representations
concerning the Trust or Trust shares except those contained in the
registration statement and the then current prospectus of the Trust and
in reports or proxy statements for the Trust and in current printed
sales literature and promotional material approved by the Trust or its
designee, except with the permission of the Trust or its designee.
8. Insurance Company shall bear the expenses of printing and distributing
the Trust's prospectus to owners of Contracts issued by Insurance
Company and of distributing the Trust's proxy materials and reports to
such Contract owners.
9. The Trust will at all times invest money from the Contracts in such a
manner as to ensure that the Contracts will be treated as variable
contracts under the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations issued thereunder. Without limiting the
scope of the foregoing, the Trust shall comply with Sections 817(h) and
851 of the Code and the regulations thereunder, and the applicable
provisions of the 1940 Act relating to the diversification requirements
for variable annuity, endowment, and life insurance contracts. Upon
request, the Trust shall provide Insurance Company with a letter from
the appropriate Trust officer certifying the Trust's compliance with
the diversification requirements and qualification as a regulated
investment company.
2
<PAGE> 3
10. Insurance Company agrees to inform the Board of Trustees of the Trust
of the existence of, or any potential for, any material irreconcilable
conflict of interest between the interests of the Contract owners of
the Variable Account investing in the Trust and/or any other separate
account of any other insurance company investing in the Trust.
A material irreconcilable conflict may arise for a variety of reasons,
including:
(a) an action by any state insurance or other regulatory authority;
(b) a change in applicable federal or state insurance, tax or
securities laws or regulations, or a public ruling, private
letter ruling, or any similar action by insurance, tax or
securities regulatory authorities;
(c ) an administrative or judicial decision in any relevant
proceeding;
(d) the manner in which the investments of any Portfolio are being
managed;
(e) a difference in voting instructions given by variable annuity
contract and variable life insurance contract owners; or
(f) a decision by an insurer to disregard the voting instructions
of contract owners.
Insurance Company will be responsible for assisting the Board of Trustees of
the Trust in carrying out its responsibilities by providing the Board with
all information reasonably necessary for the Board to consider any issue
raised, including information as to a decision by Insurance Company to
disregard voting instructions of Contract owners.
It is agreed that if it is determined by a majority of the members of the
Board of Trustees of the Trust or a majority of its disinterested Trustees
that a material irreconcilable conflict exists affecting Insurance Company,
Insurance Company shall, at its own expense, take whatever steps are
necessary to remedy or eliminate the irreconcilable material conflict, which
steps may include, but are not limited to,
(a) withdrawing the assets allocable to some or all of the separate
accounts from the Trust or any Portfolio and reinvesting such assets in
a different investment medium, including another Portfolio of the Trust
or submitting the question of whether such segregation should be
implemented to a vote of all affected Contract owners and, as
appropriate, segregating the assets of any particular group (i.e.,
annuity contract owners, life insurance contract owners or variable
contract owners of one or more Participating Insurance Companies) that
votes in favor of such segregation, or offering to the affected
contract owners the option of making such a change; and
3
<PAGE> 4
(b) establishing a new registered management investment company or managed
separate account.
If a material irreconcilable conflict arises because of Insurance Company's
decision to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, Insurance
Company may be required, at the Trust's election, to withdraw the Variable
Account's investment in the Trust. No charge or penalty will be imposed
against the Variable Account as a result of such withdrawal. Insurance
Company agrees that any remedial action taken by it in resolving any material
conflicts of interest will be carried out with a view only to the interests
of Contract owners.
For purposes hereof, a majority of the disinterested members of the Board of
Trustees of the Trust shall determine whether any proposed action adequately
remedies any material irreconcilable conflict. In no event will the Trust be
required by the terms hereof to establish a new funding medium for any
Contracts if an offer to do so has been declined by vote of a majority of
affected Contract owners.
The Trust will undertake to promptly make known to Insurance Company the
Board of Trustees' determination of the existence of a material
irreconcilable conflict and its implications.
11. This Agreement shall terminate as to the sale and issuance of new
Contracts:
(a) at the option of Insurance Company, the Adviser or the Trust
upon six months' advance written notice to the other parties;
(b) at the option of Insurance Company, by written notice to the
Trust, if Trust shares are not available for any reason to meet the
requirements of Contracts as determined by Insurance Company;
(c) at the option of Insurance Company, the Adviser or the Trust,
upon institution of formal proceedings against the broker-dealer or
broker-dealers marketing the Contracts, the Variable Account, Insurance
Company or the Trust by the National Association of Securities Dealers
("NASD"), the SEC or any other regulatory body;
(d) upon a decision by Insurance Company, in accordance with
regulations of the SEC, to substitute such Trust shares with the shares
of another investment company for Contracts for which the Trust shares
have been selected to serve as the underlying investment medium.
Insurance Company will give 60 days' written notice to the Trust and
the Adviser of any proposed vote to replace Trust shares;
(e) upon assignment of this Agreement unless made with the written
consent of each other party;
4
<PAGE> 5
(f) at the option of Insurance Company, in the event Trust shares
are not registered, issued or sold in conformance with Federal law or
such law precludes the use of Trust shares as an underlying medium of
Contracts issued or to be issued by Insurance Company. Prompt notice
shall be given by either party to the other in the event the conditions
of this provision occur.
12. Termination as the result of any cause listed in the preceding
paragraph shall not affect the Trust's obligation to furnish Trust
shares for Contracts then in force for which the shares of the Trust
serve or may serve as an underlying medium, unless such further sale of
Trust shares is proscribed by law or the SEC or other regulatory body.
13. Each notice required by this Agreement shall be given by wire and
confirmed in writing by registered or certified mail to:
If to Insurance Company:
General American Life Insurance Company
If to the Trust:
Van Eck Investment Trust
122 East 42nd Street
New York, NY 10168
Attn: President
If to the Adviser:
Van Eck Associates Corporation
122 East 42nd Street
New York, NY 10168
Attn: President
14. Advertising and sales literature in which the Trust or the Adviser is
named will be submitted to the Trust for review before such material is
submitted to the SEC or NASD for review.
15. Insurance Company will distribute all proxy material furnished by the
Trust. If and to the extent required by law, Insurance Company shall
(a) solicit voting instructions from Contract owners; (b) vote Trust
shares in accordance with instructions received from the Contract
owners of such Trust shares; and (c) vote the Trust shares for which no
instructions have been received from Contract owners so long as and to
the extent that the SEC continues to interpret the 1940 Act to require
pass-through voting privileges for variable contract owners. Insurance
Company reserves the right to vote Trust shares held in any segregated
asset account in its own right to the extent permitted by law.
5
<PAGE> 6
16. (a) Insurance Company agrees to indemnify and hold harmless the
Trust, the Adviser, and each of its trustees, directors,
officers, employees, agents and each person, if any, who
controls the Trust within the meaning of the Securities Act of
1933 (the "Act") (the Trust and such persons collectively,
"Trust Indemnified Person") against any losses, claims, damages
or liabilities to which a Trust Indemnified Person may become
subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
are related to the sale or acquisition of the Trust's shares or
the Contracts and arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in information furnished by Insurance Company for use
in the Registration Statement or prospectus of the Trust or in
the Registration Statement or prospectus for the Variable
Account, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein
not misleading, or arise out of or as a result of conduct,
statements or representations (other than statement or
representations contained in the prospectus and Trust-prepared
sales literature of the Trust) of Insurance Company or its
agents with respect to the sale and distribution of contracts
for which Trust shares are an underlying investment or arise
out of a breach of this Agreement; and Insurance Company will
reimburse any legal or other expenses reasonably incurred by a
Trust Indemnified Person in connection with investigating or
defending any such loss, claim, damage, liability or action.
This indemnity agreement will be in addition to any liability
which Insurance Company may otherwise have.
(b) The Trust agrees to indemnify and hold harmless Insurance
Company and each of its directors, officers, employees, agents
and each person, if any, who controls Insurance Company within
the meaning of the Act (Insurance Company and such persons
collectively, "Insurance Company Indemnified Person") against
any losses, claims, damages or liabilities to which an
Insurance Company Indemnified Person may become subject, under
the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) are related to
the operations, sale or acquisition of the Trust's shares or
the contracts and arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus or
Trust-prepared sales literature of the Trust, or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
arise out of or are based upon the Trust's failure to keep each
of the Trust options fully diversified and qualified as a
regulated investment company as required by the applicable
provisions of the code, the 1940 Act, and any other law or
regulation, or arise out of a breach of this Agreement and the
Trust will reimburse any legal or other expenses
6
<PAGE> 7
reasonably incurred by an Insurance Company Indemnified Person in
connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
Trust will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or omission or alleged omission
made in such Registration Statement or prospectus in conformity
with written information furnished to the Trust by Insurance
Company specifically for use therein or in Insurance
Company-prepared sales literature. This indemnity agreement
will be in addition to any liability which the Trust may
otherwise have.
(c) The Adviser agrees to indemnify and hold harmless each
Insurance Company Indemnified Person against any losses,
claims, damages or liabilities to which an Insurance Company
Indemnified Person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) are related to the
operations, sale or acquisition of the Trust's shares or the
Contracts and arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact
contained in the Registration Statement or prospectus or
Adviser-prepared sales literature of the Trust, or arise out of
or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or
arise out of or are based upon the Adviser's failure to keep
each of the Trust and its Portfolios fully diversified and
qualified as a regulated investment company as required by the
applicable provisions of the Code, the 1940 Act, and any other
law or regulation, or arise out of a breach of this Agreement
and the Adviser will reimburse any legal or other expenses
reasonably incurred by teach Insurance Company Indemnified
Person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however,
that the Adviser will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or omission or
alleged omission made in such Registration Statement or
prospectus in conformity with written information furnished to
the Adviser by Insurance Company specifically for use therein
or Insurance Company-prepared sales literature. This indemnity
agreement will be in addition to any liability which the
Adviser may otherwise have.
(d) The Trust and the Adviser shall indemnify and hold each
Insurance Company Indemnified Person harmless against any and
all liability, loss, damages, costs or expenses which an
Insurance Company Indemnified Person may incur, suffer or be
required to pay directly due to the Trust's or Adviser's (or
their designated agent's) (1) incorrect calculation of the
daily net asset value, dividend rate or capital gain
distribution rate; (2) incorrect reporting of the daily net
asset value, dividend rate or capital gain
7
<PAGE> 8
distribution rate; or (3) untimely reporting of the net asset
value, dividend rate or capital gain distribution rate. Any gain
to Insurance Company attributable to the Trust's, or Adviser's
(or their designated agent's) incorrect calculation or reporting
of the daily net asset value shall be immediately returned to the
Trust.
(e) Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this paragraph,
notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not
relive it from any liability which it may have to any
indemnified party otherwise than under this paragraph. In case
any such action is brought against any indemnified party, and
it notified the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate, at its
own expense, therein and, to the extent that it may wish,
assume the defense thereof, with counsel satisfactory to such
indemnified party. After notice from the indemnifying party to
such indemnified party of its election to assume the defense of
such action, the indemnified party shall bear the fees and
expenses of any additional counsel retained by it, and the
indemnifying party will not be liable to such party under this
paragraph for any legal or other expenses subsequently incurred
by such indemnified party independently in connection with the
defense thereof other than reasonable costs of investigation.
(f) Nothing herein shall entitle an indemnified party to special,
consequential or exemplary damages or damages of like kind or
nature and with respect to section 14(d) hereof all liability,
loss and damages shall be limited to the amount required to
correct the value of the account as if there had been no
incorrect calculation or reporting or untimely reporting of net
asset value, dividend rate or capital gain distribution rate.
17. If, in the course of future marketing of the Contracts, Insurance
Company or its agents shall request, in writing assistance from the
Trust's sales personnel which is beyond the scope of the services and
materials to be provided under the terms of this Agreement,
compensation (which will be negotiated by the Trust and Insurance
Company) shall be paid by Insurance Company to the Trust.
8
<PAGE> 9
GENERAL AMERICAN LIFE INSURANCE CO.
- ------------------------ By -------------------------------
Date
VAN ECK INVESTMENT TRUST
- ------------------------ By -------------------------------
Date
VAN ECK ASSOCIATES CORPORATION
- ------------------------ By -------------------------------
Date
9
<PAGE> 10
EXHIBIT A
TO FUND PARTICIPATION AGREEMENT
AMONG
GENERAL AMERICAN LIFE INSURANCE COMPANY,
VAN ECK INVESTMENT TRUST<F*> AND
VAN ECK ASSOCIATES CORPORATION
DATED JULY 27, 1994
-------------------
Fund
----
Worldwide Hard Assets Fund (Formerly Gold and Natural Resources Fund)
Worldwide Emerging Markets Fund
1998
[FN]
- ------------------
<F*> Now named Van Eck Worldwide Insurance Trust
10
<PAGE> 1
Exhibit 1.(8)(e)
SHAREHOLDER SERVICES AGREEMENT
THIS SHAREHOLDER SERVICES AGREEMENT is made and entered into as of
- ------------, 1997 by and between ------------------------------ (the
"Company"), and AMERICAN CENTURY INVESTMENT MANAGEMENT, INC. ("ACIM").
WHEREAS, the Company offers to the public certain group and individual
variable annuity and variable life insurance contracts (the "Contracts"); and
WHEREAS, the Company wishes to make available as investment options
under the Contracts, VP Advantage, VP Balanced, VP Capital Appreciation, VP
Income & Growth, VP International and VP Value (the "Funds"), each of which
is a series of mutual fund shares registered under the Investment Company Act
of 1940, as amended, and issued by American Century Variable Portfolios, Inc.
(the "Issuer"); and
WHEREAS, on the terms and conditions hereinafter set forth, ACIM
desires to make shares of the Funds available as investment options under the
Contracts and to retain the Company to perform certain administrative
services on behalf of the Funds, and the Company is willing and able to
furnish such services;
NOW, THEREFORE, The Company and ACIM agree as follows:
1. TRANSACTIONS IN THE FUNDS. Subject to the terms and conditions
of this Agreement, ACIM will cause the Issuer to make shares of the Funds
available to be purchased, exchanged, or redeemed, by or on behalf of the
Accounts (defined in SECTION 7(A) below) through a single account per Fund at
the net asset value applicable to each order. The Funds' shares shall be
purchased and redeemed on a net basis in such quantity and at such time as
determined by the Company to satisfy the requirements of the Contracts for
which the Funds serve as underlying investment media. Dividends and capital
gains distributions will be automatically reinvested in full and fractional
shares of the Funds.
2. ADMINISTRATIVE SERVICES. The Company agrees to provide all
administrative services for the Contract owners, including but not limited to
those services specified in EXHIBIT A (the "Administrative Services").
Neither ACIM nor the Issuer shall be required to provide Administrative
Services for the benefit of Contract owners. The Company agrees that it will
maintain and preserve all records as required by law to be maintained and
preserved in connection with providing the Administrative Services, and will
otherwise comply with all laws, rules and regulations applicable to the
marketing of the Contracts and the provision of the Administrative Services.
Upon request, the Company will provide ACIM or its representatives reasonable
information regarding the quality of the Administrative Services being
provided and its compliance with the terms of this Agreement.
1
<PAGE> 2
3. TIMING OF TRANSACTIONS. ACIM hereby appoints the Company as
agent for the Funds for the limited purpose of accepting purchase and
redemption orders for Fund shares from the Contract owners. On each day the
New York Stock Exchange (the "Exchange") is open for business (each, a
"Business Day"), the Company may receive instructions from the Contract
owners for the purchase or redemption of shares of the Funds ("Orders").
Orders received and accepted by the Company prior to the close of regular
trading on the Exchange (the "Close of Trading") on any given Business Day
(currently, 4:00 p.m. Eastern time) and transmitted to the Funds' transfer
agent by 10:00 p.m. Eastern time on such Business Day will be executed at the
net asset value determined as of the Close of Trading on such Business Day.
Any Orders received by the Company on such day but after the Close of
Trading, and all Orders that are transmitted to the Funds' transfer agent
after 10:00 p.m. Eastern time on such Business Day, will be executed at the
net asset value determined as of the Close of Trading on the next Business
Day following the day of receipt of such Order. The day as of which an Order
is executed by the Funds' transfer agent pursuant to the provisions set forth
above is referred to herein as the "Trade Date".
4. PROCESSING OF TRANSACTIONS.
(a) If transactions in Fund shares are to be settled through the
National Securities Clearing Corporation's Mutual Fund Settlement, Entry, and
Registration Verification (Fund/SERV) system, the terms of the FUND/SERV
AGREEMENT, between Company and American Century Services Corporation, shall
apply.
(b) If transactions in Fund shares are to be settled directly with
the Funds' transfer agent, the following provisions shall apply:
(1) By 6:30 p.m. Eastern time on each Business Day, ACIM (or
one of its affiliates) will provide to the Company via facsimile or other
electronic transmission acceptable to the Company the Funds' net asset value,
dividend and capital gain information and, in the case of incoming funds, the
daily accrual for interest rate factor (mil rate), determined at the Close of
Trading.
(2) By 10:00 p.m. Eastern time on each Business Day, the
Company will provide to ACIM via facsimile or other electronic transmission
acceptable to ACIM a report stating whether the instructions received by the
Company from Contract owners by the Close of Trading on such Business Day
resulted in the Accounts being a net purchaser or net seller of shares of the
Funds. As used in this Agreement, the phrase "other electronic transmission
acceptable to ACIM" includes the use of remote computer terminals located at
the premises of the Company, its gents or affiliates, which terminals may be
linked electronically to the computer system of ACIM, its agents or
affiliates (hereinafter, "Remote Computer Terminals").
(3) Upon the timely receipt from the Company of the report
described in (2) above, the Funds' transfer agent will execute the purchase
or redemption
2
<PAGE> 3
transactions (as the case may be) at the net asset value computed as of the
Close of Trading on the Trade Date. Payment for net purchase transactions
shall be made by wire transfer to the applicable Fund custodial account
designated by the Funds on the Business Day next following the Trade Date.
Such wire transfers shall be initiated by the Company's bank prior to 4:00 p.m.
Eastern time and received by the Funds prior to 6:00 p.m. Eastern time on the
Business Day next following the Trade Date ("T+1"). If payment for a purchase
Order is not timely received, such Order will be executed at the net asset
value next computed following receipt of payment. Payments for net redemption
transactions shall be made by wire transfer by the Issuer to the account(s)
designated by the Company on T+1; provided, however, the Issuer reserves the
-------- -------
right to settle redemption transactions within the time period set forth in the
applicable Fund's then-current prospectus. On any Business Day when the
Federal Reserve Wire Transfer System is closed, all communication and
processing rules will be suspended for the settlement of Orders. Orders will
be settled on the next Business Day on which the Federal Reserve Wire Transfer
System is open and the original Trade Date will apply.
5. PROSPECTUS AND PROXY MATERIALS.
(a) ACIM shall provide the Company with copies of the Issuer's
proxy materials, periodic fund reports to shareholders and other materials
that are required by law to be sent to the Issuer's shareholders. In
addition, ACIM shall provide the Company with a sufficient quantity of
prospectuses of the Funds to be used in conjunction with the transactions
contemplated by this Agreement, together with such additional copies of the
Issuer's prospectuses as may be reasonably requested by Company. If the
Company provides for pass-through voting by the Contract owners, of if the
Company determines that pass-through voting is required by law, ACIM will
provide the Company with a sufficient quantity of proxy materials for each,
as directed by the Company.
(b) The cost of preparing, printing and shipping of the
prospectuses, proxy materials, periodic fund reports and other materials of
the Issuer to the Company shall be paid by ACIM or its agents or affiliates;
provided, however, that if at any time ACIM or its agent reasonably deems
- -------- -------
the usage by the Company of such items to be excessive, it may, prior to the
delivery of any quantity of materials in excess of what is deemed reasonable,
request that the Company demonstrate the reasonableness of such usage. If
ACIM believes the reasonableness of such usage has not been adequately
demonstrated, it may request that the party responsible for such excess usage
pay the cost of printing (including press time) and delivery of any excess
copies of such materials. Unless the Company agrees to make such payments,
ACIM may refuse to supply such additional materials and ACIM shall be deemed
in compliance with this SECTION 5 if it delivers to the Company at least the
number of prospectuses and other materials as may be required by the Issuer
under applicable law.
3
<PAGE> 4
(c) The cost of any distribution of prospectuses, proxy materials,
periodic fund reports and other materials of the Issuer to the Contract
owners shall be paid by the Company and shall not be the responsibility of
ACIM or the Issuer.
6. COMPENSATION AND EXPENSES.
(a) The Accounts shall be the sole shareholder of Fund shares
purchased for the Contract owners pursuant to this Agreement (the "Record
Owner"). The Record Owner shall properly complete any applications or other
forms required by ACIM or the Issuer from time to time.
(b) ACIM acknowledges that it will derive a substantial savings in
administrative expenses, such as a reduction in expenses related to postage,
shareholder communications and recordkeeping, by virtue of having a single
shareholder account per Fund for the Accounts rather than having each
Contract owner as a shareholder. In consideration of the Administrative
Services and performance of all other obligations under this Agreement by the
Company, ACIM will pay the Company a fee (the "Administrative Services Fee")
equal to --- basis points ( ) per annum of the average aggregate amount
invested by the Company under this Agreement.
(c) The payments received by the Company under this Agreement are
for administrative and shareholder services only and do not constitute
payment in any manner for investment advisory services or for costs of
distribution.
(d) For the purposes of computing the payment to the Company
contemplated by this SECTION 6, the average aggregate amount invested by the
Company on behalf of the Accounts in the Funds over a one month period shall
be computed by totaling the Company's aggregate investment (share net asset
value multiplied by total number of shares of the Funds held by the Company)
on each Business Day during the month and dividing by the total number of
Business Days during such month.
(e) ACIM will calculate the amount of the payment to be made
pursuant to this SECTION 6 at the end of each calendar quarter and will make
such payment to the Company within 30 days thereafter. The check for such
payment will be accompanied by a statement showing the calculation of the
amounts being paid by ACIM for the relevant months and such other supporting
data as may be reasonably requested by the Company and shall be mailed to:
------------------------------
------------------------------
------------------------------
Attention: ----------------------
Phone No.: --------------------
Fax No.: -----------------------
4
<PAGE> 5
7. REPRESENTATIONS.
(a) The Company represents and warrants that (i) this Agreement has
been duly authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms; (ii) it has established
the ---------- and the --------------- (the "Accounts"), each of which is a
duly authorized and established separate account under ---------- Insurance
law, and has registered each Account as a unit investment trust under the
Investment Company Act of 1940 (the "1940 Act") to serve as an investment
vehicle for the Contracts; (iii) each Contract provides for the allocation of
net amounts received by the Company to an Account for investment in the
shares of one or more specified investment companies selected among those
companies available through the Account to act as underlying investment
media; (iv) selection of a particular investment company is made by the
Contract owner under a particular Contract, who may change such selection
from time to time in accordance with the terms of the applicable Contract;
and (v) the activities of the Company contemplated by this Agreement comply
in all material respects with all provisions of federal and state securities
laws applicable to such activities.
(b) ACIM represents that (i) this Agreement has been duly
authorized by all necessary corporate action and, when executed and
delivered, shall constitute the legal, valid and binding obligation of ACIM,
enforceable in accordance with its terms; (ii) the prospectus of each Fund
complies in all material respects with federal and state securities laws, and
(iii) shares of the Issuer are registered and authorized for sale in
accordance with all federal and state securities laws.
8. ADDITIONAL COVENANTS AND AGREEMENTS.
(a) Each party shall comply with all provisions of federal and
state laws applicable to its respective activities under this Agreement. All
obligations of each party under this Agreement are subject to compliance with
applicable federal and state laws.
(b) Each party shall promptly notify the other parties in the event
that it is, for any reason, unable to perform any of its obligations under
this Agreement.
(c) The Company covenants and agrees that all Orders accepted and
transmitted by it hereunder with respect to each Account on any Business Day
will be based upon instructions that it received from the Contract owners, in
proper form prior to the Close of Trading of the Exchange on that Business
Day. The Company shall time stamp all Orders or otherwise maintain records
that will enable the Company to demonstrate compliance with SECTION 8(C)
hereof.
(d) The Company covenants and agrees that all Orders transmitted to
the Issuer, whether by telephone, telecopy, or other electronic transmission
acceptable to ACIM, shall be sent by or under the authority and direction of
a person designated by the Company as being duly authorized to act on behalf
of the owner of the Accounts. ACIM shall be entitled to rely on the
existence of such authority and to assume that any
5
<PAGE> 6
person transmitting Orders for the purchase, redemption or transfer of Fund
shares on behalf of the Company is "an appropriate person" as used in Sections
8-107 and 8-401 of the Uniform Commercial Code with respect to the transmission
of instructions regarding Fund shares on behalf of the owner of such Fund
shares. The Company shall maintain the confidentiality of all passwords and
security procedures issued, installed or otherwise put in place with respect to
the use of Remote Computer Terminals and assumes full responsibility for the
security therefor. The Company further agrees to be responsible for the
accuracy, propriety and consequences of all data transmitted to ACIM by the
Company by telephone, telecopy or other electronic transmission acceptable to
ACIM.
(e) The Company agrees that, to the extent it is able to do so, it
will use its best efforts to give equal emphasis and promotion to shares of
the Funds as is given to other underlying investments of the Accounts,
subject to applicable Securities and Exchange Commission rules. In addition,
the Company shall not impose any fee, condition, or requirement for the use
of the Funds as investment options for the Contracts that operates to the
specific prejudice of the Funds vis-a-vis the other investment media made
---------
available for the Contracts by the Company.
(f) The Company shall not, without the written consent of ACIM,
make representations concerning the Issuer or the shares of the Funds except
those contained in the then-current prospectus and in current printed sales
literature approved by ACIM or the Issuer.
(g) Advertising and sales literature with respect to the Issuer or
the Funds prepared by the Company or its agents, if any, for use in marketing
shares of the Funds as underlying investment media to Contract owners shall
be submitted to ACIM for review and approval before such material is used.
9. USE OF NAMES. Except as otherwise expressly provided for in
this Agreement, neither ACIM nor any of its affiliates or the Funds shall use
any trademark, trade name, service mark or logo of the Company, or any
variation of any such trademark, trade name, service mark or logo, without
the Company's prior written consent, the granting of which shall be at the
Company's sole option. Except as otherwise expressly provided for in this
Agreement, the Company shall not use any trademark, trade name, service mark
or logo of the Issuer, ACIM or any of its affiliates or any variation of any
such trademarks, trade names, service marks, or logos, without the prior
written consent of either the Issuer or ACIM, as appropriate, the granting of
which shall be at the sole option of ACIM and/or the Issuer.
10. PROXY VOTING.
(a) The Company shall provide pass-through voting privileges to all
Contract owners so long as the SEC continues to interpret the 1940 Act as
requiring such privileges. It shall be the responsibility of the Company to
assure that it and the
6
<PAGE> 7
separate accounts of the other Participating Companies (as defined in SECTION
12(A) below) participating in any Fund calculate voting privileges in a
consistent manner.
(b) The Company will distribute to Contract owners all proxy
material furnished by ACIM and will vote shares in accordance with
instructions received from such Contract owners. The Company shall vote Fund
shares for which no voting instructions are received in the same proportion
as shares for which such instructions have been received. The Company and
its agents shall not oppose or interfere with the solicitation of proxies for
Fund shares held for such Contract owners.
11. INDEMNITY.
(a) ACIM agrees to indemnify and hold harmless the Company and its
officers, directors, employees, agents, affiliates and each person, if any,
who controls the Company within the meaning of the Securities Act of 1933
(collectively, the "Indemnified Parties" for purposes of this SECTION 11(A))
against any losses, claims, expenses, damages or liabilities (including
amounts paid in settlement thereof) or litigation expenses (including legal
and other expenses) (collectively, "Losses"), to which the Indemnified
Parties may become subject, insofar as such Losses result from a breach by
ACIM of a material provision of this Agreement. ACIM will reimburse any
legal or other expenses reasonably incurred by the Indemnified Parties in
connection with investigating or defending any such Losses. ACIM shall not
be liable for indemnification hereunder if such Losses are attributable to
the negligence or misconduct of the Company in performing its obligations
under this Agreement.
(b) The Company agrees to indemnify and hold harmless ACIM and the
Issuer, and their respective officers, directors, employees, agents,
affiliates and each person, if any, who controls Issuer or ACIM within the
meaning of the Securities Act of 1933 (collectively, the "Indemnified
Parties" for purposes of this SECTION 11(B)) against any Losses to which the
Indemnified Parties may become subject, insofar as such Losses result from a
breach by the Company of a material provision of this Agreement or the use by
any person of the Remote Computer Terminals. The Company will reimburse any
legal or other expenses reasonably incurred by the Indemnified Parties in
connection with investigating or defending any such Losses. The Company
shall not be liable for indemnification hereunder if such Losses are
attributable to the negligence or misconduct of ACIM or the Issuer in
performing their obligations under this Agreement.
(c) Promptly after receipt by an indemnified party hereunder of
notice of the commencement of action, such indemnified party will, if a claim
in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party of the commencement thereof; but the omission
so to notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under this SECTION
11. In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent it may wish
to, assume the defense thereof, with counsel satisfactory to such indemnified
party, and
7
<PAGE> 8
after notice from the indemnifying party to such indemnified party of its
election to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this SECTION 11 for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnifying party assumes the defense of any such
action, the indemnifying party shall not, without the prior written consent
of the indemnified parties in such action, settle or compromise the liability
of the indemnified parties in such action, or permit a default or consent to
the entry of any judgment in respect thereof, unless in connection with such
settlement, compromise or consent, each indemnified party receives from such
claimant an unconditional release from all liability in respect of such
claim.
12. POTENTIAL CONFLICTS.
(a) The Company has received a copy of an application for exemptive
relief, as amended, filed by the Issuer on December 21, 1987, with the SEC
and the order issued by the SEC in response thereto (the "Shared Funding
Exemptive Order"). The Company has reviewed the conditions to the requested
relief set forth in such application for exemptive relief. As set forth in
such application, the Board of Directors of the Issuer (the "Board") will
monitor the Issuer for the existence of any material irreconcilable conflict
between the interests of the contract owners of all separate accounts
("Participating Companies") investing in funds of the Issuer. An
irreconcilable material conflict may arise for a variety of reasons,
including: (i) an action by any state insurance regulatory authority; (ii) a
change in applicable federal or state insurance, tax, or securities laws or
regulations, or a public ruling, private letter ruling, no-action or
interpretative letter, or any similar actions by insurance, tax or securities
regulatory authorities; (iii) an administrative or judicial decision in any
relevant proceeding; (iv) the manner in which the investments of any
portfolio are being managed; (v) a difference in voting instructions given by
variable annuity contract owners and variable life insurance contract owners;
or (vi) a decision by an insurer to disregard the voting instructions of
contract owners. The Board shall promptly inform the Company if it
determines that an irreconcilable material conflict exists and the
implications thereof.
(b) The Company will report any potential or existing conflicts of
which it is aware to the Board. The Company will assist the Board in
carrying out its responsibilities under the Shared Funding Exemptive Order by
providing the Board with all information reasonably necessary for the Board
to consider any issues raised. This includes, but is not limited to, an
obligation by the Company to inform the Board whenever contract owner voting
instructions are disregarded.
(c) If a majority of the Board, or a majority of its disinterested
Board members, determines that a material irreconcilable conflict exists with
regard to contract owner investments in a Fund, the Board shall give prompt
notice to all Participating Companies. If the Board determines that the
Company is responsible for causing or
8
<PAGE> 9
creating said conflict, the Company shall at its sole cost and expense, and to
the extent reasonably practicable (as determined by a majority of the
disinterested Board members), take such action as is necessary to remedy or
eliminate the irreconcilable material conflict. Such necessary action may
include but shall not be limited to:
(i) withdrawing the assets allocable to the Accounts from
the Fund and reinvesting such assets in a different
investment medium or submitting the question of whether
such segregation should be implemented to a vote of all
affected contract owners and is appropriate, segregating
the assets of any appropriate group (i.e., annuity
contract owners, life insurance contract owners, or
variable contract owners of one or more Participating
Companies) that votes in favor of such segregation, or
offering to the affected contract owners the option of
making such a change; and/or
(ii) establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises as a result of a
decision by the Company to disregard its contract owner voting instructions
and said decision represents a minority position or would preclude a majority
vote by all of its contract owners having an interest in the Issuer, the
Company at its sole cost, may be required, at the Board's election, to
withdraw an Account's investment in the Issuer and terminate this Agreement;
provided, however, that such withdrawal and termination shall be limited to
the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of the Board.
(e) For the purpose of this SECTION 12, a majority of the
disinterested Board members shall determine whether or not any proposed
action adequately remedies any irreconcilable material conflict, but in no
event will the Issuer be required to establish a new funding medium for any
Contract. The Company shall not be required by this SECTION 12 to establish
a new funding medium for any Contract if an offer to do so has been declined
by vote of a majority of the Contract owners materially adversely affected by
the irreconcilable material conflict.
13. TERMINATION; WITHDRAWAL OF OFFERING. This Agreement may be
terminated by either party upon 180 days' prior written notice to the other
parties. Notwithstanding the above, the Issuer reserves the right, without
prior notice, to suspend sales of shares of any Fund, in whole or in part, or
to make a limited offering of shares of any of the Funds in the event that
(A) any regulatory body commences formal proceedings against the Company,
ACIM, affiliates of ACIM, or the Issuer, which proceedings ACIM reasonably
believes may have a material adverse impact on the ability of ACIM, the
Issuer or the Company to perform its obligations under this Agreement or (B)
in the judgment of ACIM, declining to accept any additional instructions for
the purchase or sale of shares of any such Fund is warranted by market,
economic or political conditions. Notwithstanding the foregoing, this
Agreement may be
9
<PAGE> 10
terminated immediately (i) by any party as a result of any other breach of this
Agreement by another party, which breach is not cured within 30 days after
receipt of notice from the other party, or (ii) by any party upon a
determination that continuing to perform under this Agreement would, in the
reasonable opinion of the terminating party's counsel, violate any applicable
federal or state law, rule, regulation or judicial order. Termination of this
Agreement shall not affect the obligations of the parties to make payments
under SECTION 4 for Orders received by the Company prior to such termination
and shall not affect the Issuer's obligation to maintain the Accounts as set
forth by this Agreement. Following termination, ACIM shall not have any
Administrative Services payment obligation to the Company (except for payment
obligations accrued but not yet paid as of the termination date).
14. NON-EXCLUSIVITY. Each of the parties acknowledges and agrees
that this Agreement and the arrangement described herein are intended to be
non-exclusive and that each of the parties is free to enter into similar
agreements and arrangements with other entities.
15. SURVIVAL. The provisions of SECTION 9 (use of names) and
SECTION 11 (indemnity) of this Agreement shall survive termination of this
Agreement.
16. AMENDMENT. Neither this Agreement, nor any provision hereof,
may be amended, waived, discharged or terminated orally, but only by an
instrument in writing signed by all of the parties hereto.
17. NOTICES. All notices and other communications hereunder shall
be given or made in writing and shall be delivered personally, or sent by
telex, telecopier, express delivery or registered or certified mail, postage
prepaid, return receipt requested, to the party or parties to whom they are
directed at the following addresses, or at such other addresses as may be
designated by notice from such party to all other parties.
To the Company:
--------------------------------------
--------------------------------------
--------------------------------------
( ) ----------- (office number)
( ) ----------- (telecopy number)
To the Issuer or ACIM:
American Century Investment Management, Inc.
4500 Main Street
Kansas City, Missouri 64111
Attention: Charles A. Etherington, Esq.
(816) 340-4051 (office number)
(816) 340-4964 (telecopy number)
10
<PAGE> 11
Any notice, demand or other communication given in a manner prescribed in
this SECTION 17 shall be deemed to have been delivered on receipt.
18. SUCCESSORS AND ASSIGNS. This Agreement may not be assigned
without the written consent of all parties to the Agreement at the time of
such assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any party hereto may execute this Agreement by signing any such counterpart.
20. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby.
21. ENTIRE AGREEMENT. This Agreement, including the attachments
hereto, constitutes the entire agreement between the parties with respect to
the matters dealt with herein, and supersedes all previous agreements,
written or oral, with respect to such matters.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
- ------------------------------ AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.
By:---------------------------- By:----------------------------
Name:------------------------- William M. Lyons
Title: -------------------------- Executive Vice President
11
<PAGE> 12
EXHIBIT A
ADMINISTRATIVE SERVICES
Pursuant to the Agreement to which this is attached, the Company shall
perform all administrative and shareholder services required or requested
under the Contracts with respect to the Contract owners, including, but not
limited to, the following:
1. Maintain separate records for each Contract owner, which
records shall reflect the shares purchased and redeemed and share balances of
such Contract owners. The Company will maintain a single master account with
each Fund on behalf of the Contract owners and such account shall be in the
name of the Company (or its nominee) as the record owner of shares owned by
the Contract owners.
2. Disburse or credit to the Contract owners all proceeds of
redemption of shares of the Funds and all dividends and other distributions
not reinvested in shares of the Funds.
3. Prepare and transmit to the Contract owners, as required by law
or the Contracts, periodic statements showing the total number of shares
owned by the Contract owners as of the statement closing date, purchases and
redemptions of Fund shares by the Contract owners during the period covered
by the statement and the dividends and other distributions paid during the
statement period (whether paid in cash or reinvested in Fund shares), and
such other information as may be required, from time to time, by the
Contracts.
4. Transmit purchase and redemption orders to the Funds on behalf
of the Contract owners in accordance with the procedures set forth in SECTION
4 to the Agreement.
5. Distribute to the Contract owners copies of the Funds'
prospectus, proxy materials, periodic fund reports to shareholders and other
materials that the Funds are required by law or otherwise to provide to their
shareholders or prospective shareholders.
6. Maintain and preserve all records as required by law to be
maintained and preserved in connection with providing the Administrative
Services for the Contracts.
A-1
12
<PAGE> 1
Exhibit 1.(8)(f)
PARTICIPATION AGREEMENT
Among
RUSSELL INSURANCE FUNDS,
RUSSELL FUND DISTRIBUTORS, INC.
and
GENERAL AMERICAN LIFE INSURANCE COMPANY
THIS AGREEMENT is made and entered into as on this 1st day of October
--- -------
1996, by and among GENERAL AMERICAN LIFE INSURANCE COMPANY, a Missouri
corporation (hereinafter the "Company"), on its own behalf and on behalf of
each segregated asset account of the Company set forth on Schedule A hereto
as such schedule may be amended from time to time (each such account
hereinafter referred to as the "Account" and collectively as the "Accounts"),
and RUSSELL INSURANCE FUNDS, a Massachusetts Business Trust (hereinafter the
"Investment Company"), and RUSSELL FUND DISTRIBUTORS, INC. a Washington
corporation (hereinafter the "Underwriter").
WHEREAS, Investment Company engages in business as a diversified open-end
management investment company and is available to act as the investment vehicle
for separate accounts established for variable life insurance policies and
variable annuity contracts (collectively, the "Variable Insurance Products");
and
WHEREAS, the beneficial interest in the Investment Company is divided
into several series of shares, referred to individually as "Funds" and
representing the interest in a particular managed portfolio of securities and
other assets; and
WHEREAS, Investment Company is registered as an open-end management
investment company under the 1940 Act, and its shares are registered under
the Securities Act of 1933, as amended (hereinafter the "1933 Act"); and
WHEREAS, Frank Russell Investment Management Company (the "Adviser") is
registered as an investment adviser under the federal Investment Advisers Act
of 1940 and any applicable state securities law; and
WHEREAS, the Company has registered or will register certain variable
life contracts under the 1933 Act, and offers or will offer for sale certain
variable life contracts which are or will be exempt from registration; and
<PAGE> 2
WHEREAS, each Account is a duly organized, validly existing, segregated
asset account, established by resolution of the Board of Directors of the
Company, on the date shown for such Account on Schedule A hereto, to set
aside and invest assets attributable to one or more variable life contracts;
and
WHEREAS, the Company has registered or will register one of the
Accounts as a unit investment trust under the 1940 Act and other Accounts are
exempt from registration; and
WHEREAS, the Underwriter is registered as a broker/dealer with the SEC
under the Securities Exchange Act of 1934, as amended (hereinafter the "1934
Act") and is a member in good standing of the National Association of
Securities Dealers, Inc. (hereinafter the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Funds on behalf of
each Account to fund certain of the aforesaid variable life contracts, and
the Underwriter is authorized to sell such shares to unit investment trusts
such as each Account at net asset value
NOW THEREFORE, in consideration of the premises and of the mutual
convenants herein contained and other good and valuable consideration the
receipt of which is hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I. Sale of Investment Company Shares
---------------------------------
1.1 The Underwriter agrees to sell to the Company those shares of the
Investment Company which each Account orders, executing such orders on a
daily basis at the net asset value next computed after receipt by the
Investment Company or its designee of the order for the shares of the
Investment Company. For purposes of this Section 1.1, the Company shall be
the designee of the Investment Company for receipt of such orders from each
Account and receipt by such designee shall constitute receipt by the
Investment Company; provided that the Investment Company receives notice of
such order by 8:00 a.m. Pacific time on the next following Business Day.
"Business Day" shall mean any day on which the New York Stock Exchange is
open for trading and on which Investment Company calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.
1.2 The Investment Company agrees to make its shares available
indefinitely for purchase at the applicable net asset value per share by the
Company and its Accounts on those days on which the Investment Company
calculates its net asset value pursuant to rules of the Securities and
Exchange Commission, and the Investment Company shall use reasonable efforts
to calculate such net asset value on each day which the New York Stock
Exchange is open for trading. Notwithstanding the foregoing, the Board of
Directors of the Investment Company (hereinafter the "Board") may refuse to
sell shares of any Fund, or suspend or terminate the offering of shares of
any Fund if such action is required by law or by regulatory authorities
having jurisdiction or is, in the sole discretion of the Board acting in good
faith and in light of their fiduciary duties under federal and any applicable
state laws, necessary in the best interests of the shareholders of such Fund.
<PAGE> 3
1.3 The Investment Company and the Underwriter agree that no shares
of any Fund will be sold to the general public.
1.4 The Investment Company agrees to redeem for cash, on the
Company's request, any full or fractional shares of the Investment Company
held by the Company, executing such requests on a daily basis at the net
asset value next computed after receipt by the Investment Company or its
designee of the request for redemption. For purposes of this Section 1.4, the
Company shall be the designee of the Investment Company for receipt of
requests for redemption from each Account, and receipt by such designee shall
constitute receipt by the Investment Company; provided that the Investment
Company receives notice of such request for redemption by 8:00 a.m. Pacific
time on the next following Business Day.
1.5 The Company agrees to purchase and redeem the shares of selected
Funds offered by the then-current prospectus of the Investment Company and in
accordance with the provisions of such prospectus. The Company agrees that
all net amounts available under the variable life contracts with the form
numbers(s) which are listed on Schedule B attached hereto and incorporated
herein by this reference, as such Schedule B may be amended from time to time
hereafter by mutual written agreement of all the parties hereto (the
"Contracts"), may be invested in the Investment Company, in such other
investment companies advised by the Adviser as may be mutually agreed to in
writing by the parties hereto, in the Company's general account or in other
separate accounts of the Company managed by the Company or an affiliate,
provided that such amounts may also be invested in an investment company
other than the Investment Company if (a) such other investment company, or
series thereof, has investment objectives or policies that are substantially
different from the investment objectives and policies of all the Funds of the
Investment Company and (b) the Company gives the Investment Company and the
Underwriter 45 days written notice of its intention to make such other
investment company available as a funding vehicle for the Contracts and (c)
the Investment Company or Underwriter consents to the use of such other
investment company.
1.6 The Company shall pay for Investment Company shares on the next
Business Day after an order to purchase Investment Company shares is made in
accordance with the provisions of Section 1.1 hereof. Payment shall be in
federal funds transmitted by wire.
1.7 Issuance and transfer of the Investment Company's shares will be
by book entry only. Stock certificates will not be issued to the Company or
any Account. Shares ordered from the Investment Company will be recorded in
an appropriate title for each Account.
1.8 The Investment Company shall furnish same day notice (by wire,
facsimile transmission, or telephone, followed by written confirmation) to
the Company of any income dividends or capital gain distributions payable on
the Investment Company's shares. The Company hereby elects to receive all
such income dividends and capital gain distributions as are payable on the
Fund shares in additional shares of that Fund. The Company reserves the right
to
<PAGE> 4
revoke this election and to receive all such income dividends and capital
gain distributions in cash. Investment Company shall notify the Company of
the number of shares so issued as payment of such dividends and
distributions.
1.9 The Investment Company shall make the net asset value per share
for each Fund available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated.
ARTICLE II. Representations and Warranties
------------------------------
2.1 The Company represents and warrants that the Contracts are
registered under the 1933 Act or are exempt from registration thereunder;
that the Contracts will be issued and sold in compliance in all material
respects with all applicable Federal and State laws and that the sale of the
Contracts shall comply in all material respects with state insurance
suitability requirements. The Company further represents and warrants that it
is an insurance company duly organized and in good standing under applicable
law and that it has legally and validly established each Account prior to any
issuance or sale thereof as a segregated asset account under Section 376.309
of the Insurance Code of the State of Missouri and that each Account is or
will be registered as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for
the Contracts or is exempt from registration thereunder.
2.2 The Investment Company represents and warrants that Investment
Company shares sold pursuant to this Agreement shall be registered under the
1933 Act, duly authorized for issuance and sold in compliance with the laws
of the States of Missouri and Washington and all applicable federal and state
securities laws and that the Investment Company is and shall remain
registered under the 1940 Act. The Investment Company shall amend the
Registration Statement for its shares under the 1933 and the 1940 Act from
time to time as required in order to effect the continuous offering of its
shares. The Investment Company shall register and qualify the shares for sale
in accordance with the laws of the various states only if and to the extent
deemed advisable by the Investment Company or the Underwriter.
2.3 The Investment Company represents that it is currently qualified
as a Regulated Investment Company under Subchapter M of the Internal Revenue
Code of 1986, as amended, (the "Code") and that it will make every effort to
maintain such qualification (under Subchapter M or any successor or similar
provision) and that it will notify the Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify or that it
might not so qualify in the future.
2.4 The Company represents that the Contracts are currently treated
as endowment, annuity or life insurance contracts, under applicable
provisions of the Code and that it will make every effort to maintain such
treatment and that it will notify the Investment Company and the Underwriter
immediately upon having a reasonable basis for believing that the Contracts
have ceased to be so treated or that they might not be so treated in the
future.
<PAGE> 5
2.5 The Investment Company currently does not intend to make any
payments to finance distribution expenses pursuant to Rule 12b-l under the
1940 Act or otherwise, although it may make such payments in the future. To
the extent that it decides to finance distribution expenses pursuant to Rule
12b-l, the Investment Company undertakes to have a board of trustees, a
majority of whom are not interested persons of the Investment Company,
formulate and approve any plan under Rule 12b-1 to finance distribution
expenses.
2.6 The Investment Company makes no representation as to whether any
aspect of its operations (including, but not limited to, fees and expenses
and investment policies) complies with the insurance laws or regulations of
the various states.
2.7 The Underwriter represents and warrants that it is a member in
good standing of the NASD and is registered as a broker-dealer with the SEC.
The Underwriter further represents that it will sell and distribute the
Investment Company shares in accordance with any applicable state laws and
federal securities laws, including without limitation the 1933 Act, the 1934
Act, and the 1940 Act.
2.8 The Investment Company represents that it is lawfully organized
and validly existing under the laws of the Commonwealth of Massachusetts and
that it does and will comply in all material respects with the 1940 Act.
2.9 The Underwriter represents and warrants that it and the Adviser
each is lawfully formed and validly existing under the laws of the State of
Washington and that they each are registered under and do and will comply in
all material respects with all applicable federal and state securities laws
and that the Adviser shall perform its obligations for the Investment Company
in compliance in all material respects with any applicable state laws and
federal securities laws.
2.10 The Investment Company and Underwriter represent and warrant that
all of their directors, officers, employees, investment advisers, and other
individuals/entities dealing with the money or securities of the Investment
Company are and shall continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Investment Company
in an amount not less than the minimal coverage as required currently by Rule
17g-(1) of the 1940 Act or related provisions as may be promulgated from time
to time. The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
2.11 The Company represents and warrants that all of its directors,
officers, employees, investment advisers, and other entities dealing with the
money or securities of the Investment Company are and shall continue to be at
all times covered by a blanket fidelity bond or similar coverage for the
benefit of the Investment Company in an amount not less than five million
dollars ($5 million). The aforesaid Bond shall include coverage for larceny
and embezzlement and shall be issued by a reputable bonding company.
<PAGE> 6
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1 The Underwriter shall provide the Company with as many printed
copies of the Investment Company's current prospectus and Statement of
Additional Information as the Company may reasonably request. If requested by
the Company in lieu thereof; the Investment Company shall provide
camera-ready film or computer diskettes containing the Investment Company's
prospectus and Statement of Additional Information and such other assistance
as is reasonably necessary in order for the Company once each year (or more
frequently if the prospectus and/or Statement of Additional Information for
the Investment Company is amended during the year) to have the prospectus for
the Contracts and the Investment Company's prospectus printed together in one
document, and to have the Statement of Additional Information for the
Investment Company and the Statement of Additional Information for the
Contracts printed together in one document. Alternatively, the Company may
print the Investment Company's prospectus and/or its Statement of Additional
Information in combination with other fund companies' prospectuses approved
pursuant to Section 1.5 and statements of additional information. Except as
provided in the following three sentences, all expenses of printing and
distributing Investment Company prospectuses and Statements of Additional
Information shall be the expense of the Company. For Prospectuses and
Statements of Additional Information provided by the Company to its existing
owners of Contracts in order to update disclosure as required by the 1933 Act
and/or the 1940 Act, the cost of printing shall be borne by the Investment
Company. If the Company chooses to receive camera-ready film or computer
diskettes in lieu of receiving printed copies of the Investment Company's
prospectus, the Investment Company will reimburse the Company in an amount
equal to the product of A and B where A is the number of such prospectuses
distributed to owners of the Contracts, and B is the Investment Company's per
unit cost of typesetting and printing the Investment Company's prospectus.
The same procedures shall be followed with respect to the Investment
Company's Statement of Additional Information.
The Company agrees to provide the Investment Company or its designee
with such information as may be reasonably requested by the Investment
Company to assure that the Investment Company's expenses do not include the
cost of printing any prospectuses or Statements of Additional Information
other than those actually distributed to existing owners of the Contracts.
3.2 The Investment Company's prospectus shall state that the
Statement of Additional Information for the Investment Company is available
from the Underwriter or the Company (or in the Fund's discretion, the
Prospectus shall state that such Statement is available from the Investment
Company).
3.3 The Investment Company, at its expense, shall provide the Company
with copies of its proxy statements, reports to shareholders, and other
required communications (except for prospectuses and Statements of Additional
Information, which are covered in Section 3.1) to shareholders in such
quantity as the Company shall reasonably require for distributing to Contract
owners.
3.4 If and to the extent required by law the Company shall:
(i) solicit voting instructions from Contract owners;
<PAGE> 7
(ii) vote Investment Company shares in accordance with
instructions received from Contract owners: and
(iii) vote Investment Company shares for which no instructions
have been received in the same proportion as Investment
Company shares of such Fund for which instructions have
been received,
so long as and to the extent that the Securities and Exchange Commission
continues to interpret the 1940 Act to require pass-through voting privileges
for variable contract owners. The Company reserves the right to vote
Investment Company shares held in any segregated asset account in its own
right, to the extent permitted by law.
3.5 The Investment Company will comply with all provisions of the
1940 Act requiring voting by shareholders, and in particular the Investment
Company will either provide for annual or special meetings or comply with the
requirements of Section 16(c) of the 1940 Act (although the Investment
Company is not one of the trusts described in Section 16(c) of that Act) as
well as with Sections 16(a) and, if and when applicable, 16(b). Further, the
Investment Company will act in accordance with the SEC's interpretation of
the requirements of Section 16(a) with respect to periodic elections of
directors and with whatever rules the SEC may promulgate with respect
thereto.
ARTICLE IV. Sales Material and Information
------------------------------
4.1 The Company shall furnish, or shall cause to be furnished, to the
Investment Company or its designee, each piece of sales literature or other
promotional material, or component thereof, in which the Investment Company,
the Adviser, or the Underwriter is named, at least fifteen Business Days
prior to its use. No such material shall be used if the Investment Company or
its designee object to such use within fifteen Business Days after receipt of
such material.
4.2 The Company shall not give any information or make any
representations or statements on behalf of the Investment Company or
concerning the Investment Company in connection with the sale of the
Contracts other than the information or representations contained in the
registration statement or prospectus for the Investment Company shares, as
such registration statement and prospectus may be amended or supplemented
from time to time, or in reports or proxy statements for the Investment
Company, or in sales literature or other promotional material approved by the
Investment Company or its designee or by the Underwriter, except with the
permission of the Investment Company or the Underwriter or the designee of
either.
4.3 The Investment Company, the Underwriter, or their designees shall
furnish, or shall cause to be furnished, to the Company or its designee, each
piece of sales literature or other promotional material, or component
thereof, in which the Company or its separate Accounts are named at least
fifteen Business Days prior to its use. No such material shall be used if
the Company or its designee objects to such use within fifteen Business Days
after receipt of such material.
<PAGE> 8
4.4 The Investment Company and the Underwriter shall not give any
information or make any representations on behalf of the Company or
concerning the Company, each Account, or the Contracts other than the
information or representations contained in a registration statement,
prospectus or offering materials for the Contracts, as such may be amended or
supplemented from time to time, or in published reports for each Account
which are in the public domain or approved by the Company for distribution to
Contract owners, or in sales literature or other promotional material
approved by the Company or its designee, except with the permission of the
Company.
4.5 The Investment Company will provide to the Company at least one
complete copy of all registration statements, prospectuses, Statements of
Additional Information, reports, proxy statements, sales literature and other
promotional materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to the
Investment Company or its shares, contemporaneously with the filing of such
document with the Securities and Exchange Commission or other regulatory
authorities.
4.6 The Company will provide to the Investment Company at least one
complete copy of all registration statements, prospectuses, Statements of
Additional Information, reports, solicitations for voting instructions, sales
literature and other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the above, that
relate to the Contracts or each Account, contemporaneously with the filing of
such document with the SEC or other regulatory authorities. In the case of
unregistered Contracts, in lieu of providing prospectuses and Statements of
Additional Information, the Company shall provide the Investment Company with
one complete copy of the offering materials for the Contracts.
4.7 For purposes of this Article IV, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements
(such as material published, or designed for use in, a newspaper, magazine,
or other periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures, electronic media, or
other public media), sales literature (i.e., any written communication
distributed or made generally available to customers or the public, including
brochures, circulars, research reports, market letters, form letters, seminar
texts, reprints or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other communications
distributed or made generally available to some or all agents or employees,
and registration statements, prospectuses, Statements of Additional
Information, shareholder reports, and proxy materials.
ARTICLE V. Fees and Expenses
-----------------
5.1 The Investment Company and the Underwriter shall pay no fee or
other compensation to the Company under this Agreement, except that if the
Investment Company or any Fund adopts and implements a plan pursuant to Rule
12b-l to finance distribution expenses, then the Underwriter may make
payments to the Company or to the underwriter for the Contracts
<PAGE> 9
if and in amounts agreed to by the Underwriter in writing and such payments
will be made out of existing fees otherwise payable to the Underwriter, past
profits of the Underwriter or other resources available to the Underwriter.
No such payments shall be made directly by the Investment Company.
Currently, no such payments are contemplated.
5.2 All expenses incident to performance by the Investment Company
under this Agreement shall be paid by the Investment Company. The Investment
Company shall see to it that all its shares are registered and authorized for
issuance in accordance with applicable federal law and, if and to the extent
deemed advisable by the Investment Company, in accordance with applicable
state laws prior to their sale. The Investment Company shall bear the
expenses for the cost of registration and qualification of the Investment
Company's shares, preparation and filing of the Investment Company's
prospectus and registration statement, proxy materials and reports, setting
the prospectus in type, setting in type and printing the proxy materials and
reports to shareholders (including the costs of printing a prospectus that
constitutes an annual report), the preparation of all statements and notices
required by any federal or state law, all taxes on the issuance or transfer
of the Investment Company's shares.
5.3 The Company shall bear the expenses of distributing the
Investment Company's prospectus, proxy materials, and reports to owners of
Contracts issued by the Company.
ARTICLE VI. Diversification
---------------
6.1 The Investment Company will at all times invest money from the
Contracts in such a manner as to ensure that the Contracts will be treated as
variable contracts under the Internal Revenue Code and the regulations issued
thereunder. Without limiting the scope of the foregoing, the Investment
Company will at all times comply with Section 817(h) of the Code and Treasury
Regulation 1.817-5, relating to the diversification requirements for variable
annuity, endowment, or life insurance contracts and any amendments or other
modifications to such Section or Regulations.
ARTICLE VII. Indemnification
---------------
7.1. Indemnification By The Company
------------------------------
7.1(a). The Company agrees to indemnify and hold harmless the
Investment Company and each member of the Board and officers and each person,
if any, who controls the Investment Company within the meaning of Section 15
of the 1933 Act (collectively, the "Indemnified Parties" for purposes of this
Section 7.1) against any and all losses, claims, damages, liabilities
(including amounts paid in settlement with the written consent of the
Company) or litigation (including legal and other expenses), to which the
Indemnified Parties may become subject under any statute, regulation, at
common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
sale or acquisition of the Investment Company's shares or the Contracts and:
<PAGE> 10
(i) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in any
Registration Statement, prospectus or other offering materials for the
Contracts or contained in the Contracts or sales literature for the
Contracts (or any amendment or supplement to any of the foregoing), or
arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, provided that
this agreement to indemnify shall not apply as to any Indemnified Party
if such statement or omission or such alleged statement or omission was
made in reliance upon and in conformity with information furnished to
the Company by or on behalf of the Investment Company for use in any
Registration Statement or prospectus for the Contracts or in the
Contracts or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or
Investment Company's shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
the Registration Statement, prospectus or sales literature of the
Investment Company not supplied by the Company, or persons under its
control) or wrongful conduct of the Company or persons under its
control, with respect to the sale or distribution of the Contracts or
Investment Company shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement,
prospectus, or sales literature of the Investment Company or any
amendment thereof or supplement thereto or the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading if such a
statement or omission was made in reliance upon information furnished
to the Investment Company by or on behalf of the Company; or
(iv) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms of this
Agreement; or
(v) arise out of a result from any material breach of any
representation or warranty made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement
by the Company, as limited by and in accordance with the provisions of
Sections 7.1(b) and 7.1(c) hereof.
7.1(b). The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or
litigation incurred or assessed against an Indemnified Party as such may
arise from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason
of such Indemnified Party's reckless disregard of obligations or duties under
this Agreement or to the Investment Company, whichever is applicable.
7.1(c). The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal
<PAGE> 11
process giving information of the nature of the claim shall have been served
upon such Indemnified Party (or after such Indemnified Party shall have
received notice of such service on any designated agent), but failure to
notify the Company of any such claim shall not relieve the Company from any
liability which it may have to the Indemnified Party against whom such action
is brought otherwise than on account of this indemnification provision. In
case any such action is brought against the Indemnified Parties, the Company
shall be entitled to participate, at its own expense, in the defense of such
action. The Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice from
the Company to such party of the Company's election to assume the defense
thereof, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, and the Company will not be liable to such
party under this Agreement for any legal or other expenses subsequently
incurred by such party independently in connection with the defense thereof
other than reasonable costs of investigation.
7.1(d). The Indemnified Parties will promptly notify the Company of
the commencement of any litigation or proceedings against them in connection
with the issuance or sale of the Investment Company shares or the Contracts
or the operation of the Investment Company.
7.2 Indemnification by the Underwriter
----------------------------------
7.2(a). The Underwriter agrees to indemnify and hold harmless the
Company and each of its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act
(collectively, the "Indemnified Parties" for purposes of this Section 7.2)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Underwriter or litigation
(including legal and other expenses) to which the Indemnified Parties may
become subject under any statute, at common law or otherwise, insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements are related to the sale or acquisition of the
Investment Company's shares or the Contracts and:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement or prospectus or sales literature of the
Investment Company (or any amendment or supplement to any of the
foregoing), or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
provided that this agreement to indemnify shall not apply as to any
Indemnified Party if such statement or omission or such alleged
statement or omission was made in reliance upon and in conformity with
information furnished to the Underwriter or Investment Company by or on
behalf of the Company for use in the Registration Statement or
prospectus for the Investment Company or in the sales literature (or
any amendment or supplement) or otherwise for use in connection with
the sale of the Contracts or Investment Company shares; or
(ii) arise out of or as a result of statements or
representations (other than statements or representations contained in
any Registration Statement, prospectus, other offering materials or
sales literature for the Contracts not supplied by the Underwriter or
<PAGE> 12
persons under its control) or wrongful conduct of the Investment
Company, Adviser, or Underwriter or persons under their control, with
respect to the sale or distribution of the Contracts or Investment
Company shares; or
(iii) arise out of any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement,
prospectus, other offering materials or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement or statements
therein not misleading, if such statement or omission was made in
reliance upon information furnished to the Company by or on behalf of
the Investment Company; or
(iv) arise as a result of any failure by the Investment
Company to provide the services and furnish the materials under the
terms of this Agreement (including a failure, whether unintentional or
in good faith or otherwise, to comply with the diversification
requirements specified in Article VI of this Agreement); or
(v) arise out of or result from any material breach of
any representation or warranty made by the Underwriter in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Underwriter; as limited by and in accordance with
the provisions of Sections 7.2(b) and 7.2(c) hereof.
7.2(b). The Underwriter shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation to which an Indemnified Party would otherwise be
subject by reason of such Indemnified Party's willful misfeasance, bad faith,
or gross negligence in the performance of such indemnified Party's duties or
by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to the Company or each Account, whichever is
applicable.
7.2(c). The Underwriter shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Underwriter in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the claim shall have
been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but
failure to notify the Underwriter of any such claim shall not relieve the
Underwriter from any liability which it may have to the Indemnified Party
against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Underwriter will be entitled to participate, at its
own expense, in the defense thereof. The Underwriter also shall be entitled
to assume the defense thereof, with counsel satisfactory to the party named
in the action. After notice from the Underwriter to such party of the
Underwriter's election to assume the defense thereof, the Indemnified Party
shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs of
investigation.
<PAGE> 13
7.2(d). The Company agrees promptly to notify the Underwriter of
the commencement of any litigation or proceedings against it or any of its
officers or directors in connection with the issuance or sale of the
Contracts or the operation of any Account.
7.3 Indemnification By the Investment Company
-----------------------------------------
7.3(a). The Investment Company agrees to indemnify and hold
harmless the Company, and each of its directors and officers and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act (collectively, the "Indemnified Parties" for purposes of this Section
7.3) against any and all losses, claims, damages, liabilities (including
amounts paid in settlement with the written consent of the Investment Company
or litigation (including legal and other expenses) to which the Indemnified
Parties may become subject under any statute, at common law or otherwise,
insofar as such losses, claims, damages, liabilities or expenses (or actions
in respect thereof) or settlements result from the gross negligence, bad
faith or willful misconduct of the Board or any member thereof, are related
to the operations of the Investment Company and:
(i) arise as a result of any failure by the Investment
Company to provide the services and furnish the materials under the
terms of this Agreement (including a failure to comply with the
diversification requirements specified in Article VI of this
Agreement); or
(ii) arise out of or result from any material breach of
any representation or warranty made by the Investment Company in this
Agreement or arise out of or result from any other material breach of
this Agreement by the Investment Company, as limited by and in
accordance with the provisions of Sections 7.3(b) and 7.3(c) hereof.
7.3(b). The Investment Company shall not be liable under this
indemnification provision with respect to any losses, claims, damages,
liabilities or litigation incurred or assessed against an Indemnified Party
as such may arise from such Indemnified Party's willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party's
duties or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company, the Investment
Company, the Underwriter or any Account, whichever is applicable.
7.3(c). The Investment Company shall not be liable under this
indemnification provision with respect to any claim made against an
Indemnified Party unless such Indemnified Party shall have notified the
Investment Company in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon such Indemnified Party (or after such Indemnified Party
shall have received notice of such service on any designated agent), but
failure to notify the Investment Company of any such claim shall not relieve
the Investment Company from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on
account of this indemnification provision. In case any such action is brought
against the Indemnified Parties, the Investment Company will be entitled to
participate, at its own expense, in the defense thereof.
<PAGE> 14
The Investment Company also shall be entitled to assume the defense thereof,
with counsel satisfactory to the party named in the action. After notice
from the Investment Company to such party of the Investment Company's
election to assume the defense thereof, the Indemnified Party shall bear the
fees and expenses of any additional counsel retained by it, and the
Investment Company will not be liable to such party under this Agreement for
any legal or other expenses subsequently incurred by such party independently
in connection with the defense thereof other than reasonable costs of
investigation.
7.3(d). The Company and the Underwriter agree promptly to notify
the Investment Company of the commencement of any litigation or proceedings
against it or any of its respective officers or directors in connection with
this Agreement, the issuance or sale of the Contracts, with respect to the
operation of any Account, or the sale or acquisition of shares of the
Investment Company.
ARTICLE VIII. Applicable Law
--------------
8.1. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Missouri.
8.2. To the extent they are applicable, this Agreement shall be subject
to the provisions of the 1933, 1934 and 1940 acts, and the rules and
regulations and rulings thereunder, including such exemptions from those
statutes, rules and regulations as the Securities and Exchange Commission may
grant and the terms hereof shall be interpreted and construed in accordance
therewith.
ARTICLE IX. Termination of Agreement
------------------------
9.1 This Agreement shall continue in full force and effect until the
first to occur of
(a) termination by any party for any reason by sixty (60) days
advance written notice delivered to the other parties; or
(b) termination by the Company by written notice to the
Investment Company and the Underwriter with respect to any Fund based
upon the Company's determination that shares of such Fund are not
reasonably available to meet the requirements of the Contracts; or
(c) termination by the Company by written notice to the
Investment Company and the Underwriter with respect to any Fund in the
event any of the Fund's shares are not registered, issued, or sold
materially in accordance with applicable state or federal law or such
law precludes the use of such shares as the underlying investment media
of the Contracts issued or to be issued by the Company; or
<PAGE> 15
(d) termination by the Company by written notice to the
Investment Company and the Underwriter with respect to any Fund in the
event that such Fund ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code or under any successor or
similar provision, or if the Company reasonably believes that the
Investment Company may fail to so qualify; or
(e) termination by the Company by written notice to the
Investment Company and the Underwriter with respect to any Fund in the
event that such Fund fails to meet the diversification requirements
specified in Article VI hereof; or
(f) termination by either the Investment Company or the
Underwriter by written notice to the Company, if either one or both of
the Investment Company or the Underwriter respectively, shall
determine, in their sole judgment exercised in good faith, that the
Company or its affiliated companies has suffered a material adverse
change in its business, operations, financial condition, or prospects
since the date of this Agreement or is the subject of material adverse
publicity; or
(g) termination by the Company by written notice to the
Investment Company and the Underwriter, if the Company shall determine,
in its sole judgment exercised in good faith, that either the
Investment Company or the Underwriter has suffered a material adverse
change in its business, operations, financial condition, or prospects
since the date of this Agreement or is the subject of material adverse
publicity; or
(h) termination by the Investment Company or the Underwriter by
written notice to the Company if the Company gives the Investment
Company and the Underwriter the written notice specified in Section 1.5
hereof and at the time such notice was given there was no notice of
termination outstanding under any other provision of this Agreement;
provided, however, any termination under this Section 9.1(b) shall be
effective forty-five (45) days after the notice specified in Section
1.5 was given.
9.2 Notwithstanding any termination of this Agreement, the Investment
Company and the Underwriter shall at the option of the Company, continue to
make available additional shares of the Investment Company pursuant to the
terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, the owners of the
Existing Contracts shall be permitted to reallocate investment in the
Investment Company, redeem investments in the Investment Company, or invest
in the Investment Company upon the making of additional purchase payments
under the Existing Contracts.
9.3 The Company shall not redeem Investment Company shares
attributable to the Contracts (as opposed to Investment Company shares
attributable to the Company's assets held in any of the Accounts) except (i)
as necessary to implement Contract Owner initiated transactions, or (ii) as
required by state or federal laws or regulations or judicial or other legal
precedent of general application (hereinafter referred to as a "Legally
Required Redemption"). Upon request, the Company will promptly furnish to the
Investment Company and the Underwriter the opinion of counsel for the Company
(which counsel shall be reasonably
<PAGE> 16
satisfactory to the Investment Company and the Underwriter) to the effect
that any redemption pursuant to clause (ii) above is a Legally Required
Redemption. Furthermore, except in cases where permitted under the terms of
the Contracts, the Company shall not prevent Contract Owners from allocating
payments to a Fund that was otherwise available under the Contracts without
first giving the Investment Company or the Underwriter ninety (90) days
notice of its intention to do so.
ARTICLE X. Notices
-------
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth
below or at such other address as such party may from time to time specify in
writing to the other party.
If to the Investment Company:
909 A Street
Tacoma, Washington 98402
Attention: Karl J. Ege, Esq.
If to the Company:
13045 Tesson Ferry Road
St. Louis, Missouri 63128
Attention: Barbara Synder
If to the Underwriter:
909 A Street
Tacoma, Washington 98402
Attention: Karl J. Ege, Esq.
ARTICLE XI. Miscellaneous
-------------
11.1. All persons dealing with the Investment Company must look solely
to the property of the Investment Company for the enforcement of any claims
against the Investment Company as neither the Board, officers, agents or
shareholders assume any personal liability for obligations entered into on
behalf of the Investment Company.
11.2. Subject to the requirements of legal process and regulatory
authority, each party hereto shall treat as confidential the names and
addresses of the owners of the Contracts and all information reasonably
identified as confidential in writing by any other party hereto and, except
as permitted by this Agreement, shall not disclose, disseminate or utilize
such names and addresses and other confidential information until such time
as it may come into the public domain without the express written consent of
the affected party.
11.3. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
<PAGE> 17
11.4 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
11.5. If any provisions of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
11.6. Each party hereto shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC,
the NASD and state insurance regulators) and shall permit such authorities
reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby. Notwithstanding the generality of the foregoing, each
party hereto further agrees to furnish the California Insurance Commissioner
with any information or reports in connection with services provided under
this Agreement which such Commissioner may request in order to ascertain
whether the variable life insurance operations of the Company are being
conducted in a manner consistent with the California Variable Life Insurance
Regulations and any other applicable law or regulations.
11.7 The Investment Company and Underwriter agree that to the extent
any advisory or other fees received by the Investment Company, the
Underwriter, or the Adviser are determined to be unlawful in legal or
administrative proceedings under the 1973 NAIC model variable life insurance
regulation in the states of California, Colorado, Maryland, or Michigan, the
Underwriter shall indemnify and reimburse the Company for any out of pocket
expenses and actual damages the Company has incurred as a result of any such
proceeding; provided however that the provisions of Section 7.2(b) and 7.2(c)
shall apply to such indemnification and reimbursement obligation. Such
indemnification and reimbursement obligation shall be in addition to any
other indemnification and reimbursement obligations of the Investment Company
or the Underwriter under this Agreement.
11.8 The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
11.9 This Agreement or any of the rights and obligations hereunder
may not be assigned by any party without the prior written consent of all
parties hereto; provided, however, that the Underwriter may assign this
Agreement or any rights or obligations hereunder to any affiliate of or
company under common control with the Underwriter, if such assignee is duly
licensed and registered to perform the obligations of the Underwriter under
this Agreement.
11.10 The Company shall furnish, or shall cause to be furnished, to the
Investment Company or its designee copies of the following reports:
(a) the Company's annual statement prepared under statutory
accounting principles, as soon as practical and in any event within 90 days
after the end of each fiscal year;
<PAGE> 18
(b) the Company's quarterly statement (statutory), as soon as
practical and in any event within 45 days after the end of each quarterly
period; and
(c) any financial statement, proxy statement, notice or report of the
Company sent to stockholders or policyholders, as soon as practical after the
delivery thereof; and
11.11 The Master Trust Agreement dated 11 July 1996, as amended from
time to time, establishing the Investment Company, which is hereby referred
to and a copy of which is on file with the Secretary of The Commonwealth of
Massachusetts provides that the name Russell Insurance Funds, means the
Trustees from time to time serving (as Trustees but not personally) under
said Master Trust Agreement. It is expressly acknowledged and agreed that
the obligations of the Investment Company hereunder shall not be binding upon
any of the shareholders, Trustees, officers, employees or agents of the
Investment Company, personally, but shall bind only the trust property of the
Investment Company, as provided in its Master Trust Agreement. The execution
and delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by the President of the Investment Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of the personally,
but shall bind only the trust property of the Investment Company as provided
in its Master Trust Agreement.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed in its name and on behalf by its duly authorized
representative and its seal to be hereunder affixed hereto as of the date
specified below.
GENERAL AMERICAN LIFE
INSURANCE COMPANY
ATTEST: --------------------- BY -----------------------------
Assistant Secretary Exec. Vice President - Individual
DATE:
RUSSELL INSURANCE FUNDS
ATTEST: --------------------- BY -----------------------------
Asst. Secretary President
DATE: 10/1/96
RUSSELL FUND
DISTRIBUTORS, INC.
ATTEST: --------------------- BY -----------------------------
Asst. Secretary President
DATE: 10/1/96
<PAGE> 19
Schedule A
----------
Accounts
--------
Name of Account Date of Resolution of Company's
Board which Established the
Account
General American January 24, 1985
Separate Account Eleven
<PAGE> 20
Schedule B
----------
Contracts
---------
1. Contract Form Numbers:
FRC-VUL 100003 (10/95)
2. Funds currently available to act as investment vehicles for certain of
the above-listed contracts:
General Account of General American Life Insurance Company
Money Market Fund of General American Capital Company
Russell Insurance Funds: Multi-Style Equity Fund
Aggressive Equity Fund
Non-U.S. Fund
Core Bond Fund
<PAGE> 1
GENERAL
AMERICAN
APPLICATION
FOR
LIFE
INSURANCE
GENERAL AMERICAN LIFE INSURANCE COMPANY
ST. LOUIS, MISSOURI
1067724 This Form Can Only Be Used In Missouri.
(6/97)
<PAGE> 2
- -------------------------------------------------------------------------------
NOTICE OF INFORMATION PRACTICES
- -------------------------------------------------------------------------------
TO THE APPLICANT AND PROPOSED INSURED
Thank you for applying for insurance with General American Life Insurance
Company. Some personal information was furnished by you in the application and
we may obtain information from other sources. We may call you from our Home
Office in St. Louis to confirm or add to this information. The questions asked
during the phone interview will be detailed, so you may wish to have records
about your income and health history at hand.
We need such information to see if you qualify for the insurance. This
application contains an Authorization which will allow us to obtain this
information and share it with others in some instances. All information will
be treated as confidential by us and our reinsurers. However, in some cases,
information may have to be disclosed to others, such as your doctor or an
insurance regulator, without your prior consent. We, or our reinsurers may
also release information to other life insurance companies to whom you apply
for life or health insurance or to whom a claim is submitted.
We may request an investigative consumer report from a consumer reporting
agency. This report will contain information about your character, general
reputation, personal characteristics, mode of living and health. The
information may be obtained through interviews with you, your neighbors,
friends and others who know you. On request we will disclose to you whether
or not such a report was done, and the nature and scope of the investigation.
You have the right to review and to correct this information. You or your
authorized representative have the right to obtain copies of any investigative
consumer report which is done. We will provide you the name and address of
the consumer reporting agency so that you may request a copy of the report.
MEDICAL INFORMATION BUREAU (MIB, INC.) NOTICE
We or our reinsurers may make a brief report to the MIB, Inc. when you apply
or submit a claim for life insurance. MIB, Inc. is a nonprofit organization of
life insurance companies. It operates an information exchange on behalf of
its members. MIB, Inc. will provide a member company information from its
file when: (1) you apply or submit a claim to that company for life insurance;
and (2) that company has your signed authorization.
MIB, Inc. will give you information from your file on receipt of a request
from you. Under the provisions of the Fair Credit Reporting Act, you may
question the accuracy of information in the file and seek a correction by
contacting the MIB, Inc. The address of MIB, Inc. is: MIB, Inc., PO Box 105,
Essex Station, Boston, Massachusetts 02112, Telephone: (617) 426-3660.
If you want to know more about our practices and your rights, further
information can be obtained from General American Life Insurance Company,
Individual Operations, New Business Administration, 13045 Tesson Ferry Road,
St. Louis, Missouri 63128.
THIS PAGE MUST BE LEFT WITH THE PROPOSED INSURED.
1067724
(6/97)
<PAGE> 3
APPLICATION FOR LIFE INSURANCE
General
American
Life Insurance Company
St. Louis, Missouri
- --------------------------------------------------------------------------------
1. PROPOSED INSURED
- --------------------------------------------------------------------------------
Name (Last, First, Middle) Gender
- --------------------------------------------------------------------------------
/ / Male
/ / Female
- --------------------------------------------------------------------------------
Social Security # Date of Birth (MM/DD/YY) Age (Nearest Birthday) Birthplace
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Home Address (Street, City, State, Zip) Home Phone
- --------------------------------------------------------------------------------
( )
- --------------------------------------------------------------------------------
Name and Address of Employer Years Employed Work Phone
- --------------------------------------------------------------------------------
( )
- --------------------------------------------------------------------------------
Occupation Annual Earned Income From Occupation Net Worth
- --------------------------------------------------------------------------------
$ $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2. BENEFICIARY PROVIDE FULL NAME & RELATIONSHIP OF EACH TO PROPOSED INSURED.
- --------------------------------------------------------------------------------
Primary Contingent
- -------------------------------------- ---------------------------------------
- -------------------------------------- ---------------------------------------
- --------------------------------------------------------------------------------
3. OWNER
- --------------------------------------------------------------------------------
/ / Proposed Insured (Do not designate a Contingent Owner.)
/ / Other (Provide Full Name, Address, Date of Birth & Relationship of each
to Proposed Insured.)
Original Contingent
- -------------------------------------- ---------------------------------------
The policy provides that if the
Original Owner predeceases the Insured,
ownership will vest in the estate of
the deceased Owner unless a Contingent
Owner is designated.
- -------------------------------------- ---------------------------------------
-------------------
Social Security or Tax # of Original Owner (REQUIRED BY LAW)
-------------------
- --------------------------------------------------------------------------------
4. PREMIUM PAYOR
- --------------------------------------------------------------------------------
/ / Proposed Insured / / Owner / / Employer
/ / Other: (Provide Full Name and Billing Address.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1067724
(6/97) 010488
<PAGE> 4
- --------------------------------------------------------------------------------
5. COVERAGE APPLIED FOR INCLUDE SIGNED AND DATED ILLUSTRATION.
- --------------------------------------------------------------------------------
-------------------- --------------------
PLAN BASE FACE AMOUNT $
-------------------- --------------------
Contract Type (UL and VUL): Option: / / A / / B / / C
BENEFITS AND RIDERS
- --------------------------------------------------------------------------------
TRADITIONAL
-----------
/ / Waiver of Premium
/ / Non Convertible Waiver of
Premium
/ / Accidental Death $_______________
/ / Accelerated Benefits
(Complete Disclosure.)
/ / Dec. Spec Term II $_______________
/ / Lev. Spec Term II $_______________
/ / PAR (Face Amt.) $_______________
/ / Values +1 Units #_______________
/ / APO $_______________ Yr_______
/ / GPO $_______________
/ / EGPR
/ / Children's Ins. Units # ____________
(Complete Children's Ins. App.)
/ / Survivor Insurability
$___________________________________
(Complete App. on Designated Life.)
/ / GSPO
$_______________ on ________________
$_______________ on ________________
(Complete App. for each life.)
/ / Other _____________ $ ______________
/ / Other _____________ $ ______________
/ / Other _____________ $ ______________
- --------------------------------------------------------------------------------
UL
--
/ / Waiver of Monthly Deduction
/ / Waiver of Specified Premium
$__________ (Monthly Premium)
/ / Accidental Death $_________________________
/ / Accelerated Benefits
(Complete Disclosure.)
/ / Add'l Insured Family Term
$__________________________________________
Relationship to Proposed
Insured____________________________________
(Complete App. on Additional Insured.)
/ / APW
/ / GIO $_____________________________________
/ / Children's Ins. Units # ________________
(Complete Children's Ins. App.)
/ / IBO ___________ % or / / CPI
/ / SC $___________ / / Var / / Lev
/ / GSPO
$___________________ on ___________________
$___________________ on ___________________
(Complete App. for each life.)
/ / ABO $_________________ or %________________
Option #_____________________
/ / JSC $_________________ / / Var / / Lev
/ / Flex 1 $_________________ Initial Face Amt.
/ / Inc. / / Dec. / / Lev. $_____________
(If Beneficiary different, provide in #14.)
/ / EGIR (Confidence Plus)
/ / Other _________________ $ _________________
- --------------------------------------------------------------------------------
VUL
---
/ / Waiver of Monthly Deduction
/ / Waiver of Specified Premium
$__________ (Monthly Premium)
/ / Accidental Death $_________________________
/ / Add'l Insured Family Term
$__________________________________________
Relationship to Proposed
Insured____________________________________
(Complete App. on Additional Insured.)
/ / GIO $_____________________________________
/ / Children's Ins. Units # ________________
(Complete Children's Ins. App.)
/ / GSPO
$___________________ on ___________________
$___________________ on ___________________
(Complete App. for each life.)
/ / SCTR $_____________________________________
/ / IBR ___________ % or / / CPI
(VUL 100)
/ / IBO ___________ % or / / CPI
(Select Plus)
/ / Other _________________ $ _________________
COMPLETE #7 AND #8 FOR FUND ALLOCATION AND
SUITABILITY INFORMATION.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. PREMIUMS AND DIVIDENDS
- --------------------------------------------------------------------------------
Billing
- ------------------------------------------------------------------
/ / Pre-Authorized Check Monthly
/ / Direct / / Combined Direct (Traditional)
/ / List / / Payroll Deduction
/ / Single Premium (UL and VUL)
- ------------------------------------------------------------------
Mode
- ------------------------------------------------------------------
/ / Annual
/ / Semi-Annual
/ / Quarterly
/ / Monthly (Direct Monthly Available on Trad. Only.)
- ------------------------------------------------------------------
------------ -----------
Add to existing Bill # Premium Amt. (UL and VUL) $
------------ -----------
Dividend Option (if eligible)
- ------------------------------------------------------------------
/ / Pd. Up Addns. (Trad.) / / Cash
/ / Reduce Prem. (Trad.) / / Accum. (Trad.)
/ / Inc. Cash Value (UL and VUL)
- ------------------------------------------------------------------
Automatic Premium Payment
- ------------------------------------------------------------------
(Traditional)
/ / Div. Accum. / / Loan
/ / Both / / Neither
- ------------------------------------------------------------------
Loan Interest Rate
- ------------------------------------------------------------------
(Traditional)
/ / Indexed (Automatic)
/ / 8% Variable (WL-98)
- ------------------------------------------------------------------
1067724
(6/97) 010488
<PAGE> 5
- --------------------------------------------------------------------------------
7. VUL FUND ALLOCATION
- --------------------------------------------------------------------------------
Net Premium Allocation: (0 OR MINIMUM OF 5%. PERCENTAGES MUST BE IN WHOLE
NUMBERS AND TOTAL 100%.)
- --------------------------------------------------------------------------------
GENERAL AMERICAN CAPITAL COMPANY:
Money Market Fund %
--------------------
S & P 500 Index Fund %
--------------------
Bond Index Fund %
--------------------
Managed Equity Fund %
--------------------
Asset Allocation Fund %
--------------------
International Index Fund %
--------------------
Mid-Cap Equity Fund %
--------------------
Small-Cap Equity Fund %
--------------------
VAN ECK WORLDWIDE INSURANCE TRUST:
Worldwide Hard Assets Fund %
--------------------
OTHER FUNDS:
%
------------------------ --------------------
%
------------------------ --------------------
General Account %
--------------------
FIDELITY'S VIP & VIP II FUNDS:
Equity-Income Portfolio %
--------------------
Growth Portfolio %
--------------------
Overseas Portfolio %
--------------------
High Income Portfolio %
--------------------
Asset Manager Portfolio %
--------------------
The following funds are only available for
Select Plus and Russell VUL:
RUSSELL INSURANCE FUNDS, INC.:
Multi-Style Equity Fund %
--------------------
Aggressive Equity Fund %
--------------------
Non-U.S. Fund %
--------------------
Core Bond Fund %
--------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
8. VUL SUITABILITY
- --------------------------------------------------------------------------------
YES NO
Have you received a prospectus for the policy applied for? / / / /
---------- ----------
Date of prospectus Date of any supplement
---------- ----------
Is a current Customer Information Statement for this owner on
file with Walnut Street Securities? (If "No", one must be
submitted with this application.) / / / /
Do you understand that:
1. THE DEATH BENEFIT AND CASH SURRENDER VALUE WILL INCREASE
OR DECREASE DEPENDING ON INVESTMENT EXPERIENCE? / / / /
2. THERE IS NO GUARANTEED MINIMUM DEATH BENEFIT OR CASH
SURRENDER VALUE? / / / /
Do you believe that the policy applied for meets your
insurance needs and your anticipated financial objectives? / / / /
I REQUEST A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION FOR THE FOLLOWING
INVESTMENT COMPANY(IES):
------------------------------------------------------------------------------
------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9. / / ADDITIONAL / / ALTERNATE INCLUDE SIGNED AND DATED ILLUSTRATION FOR EACH.
- --------------------------------------------------------------------------------
Provide details including plan, amount and riders. If Beneficiary and Owner
other than original, indicate below.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
10. HOME OFFICE ENDORSEMENTS ONLY NOT APPLICABLE IN MISSOURI.
- --------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
1067724
(6/97) 010488
<PAGE> 6
- --------------------------------------------------------------------------------
11. OTHER INSURANCE
- --------------------------------------------------------------------------------
a. Total Life Insurance now in force on Proposed Insured.
If "NONE", check / /
<TABLE>
<CAPTION>
Year of Personal Business Accidental Waiver of Prem.
Company and Policy # Issue Ins. Amt. Ins. Amt. Death Amt. Yes No
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
If additional space is needed, provide information in "Details" below.
YES NO
b. Are you currently applying for life insurance with any
other company? / / / /
(If "Yes", provide information in "Details" below.)
c. Will the insurance being applied for replace any of the
above or any in force annuities? / / / /
d. Will the insurance being applied for receive any values
(to pay premiums or additional payments) from another
policy/contract? / / / /
If either "c" or "d" is answered "Yes", circle affected coverage above or
indicate in "Details" below.
Policy/contract number MUST be provided. (Complete and submit required
replacement forms.)
- --------------------------------------------------------------------------------
12. GENERAL INFORMATION
- --------------------------------------------------------------------------------
Have you: (Provide explanation of "Yes" answers in
"Details" below.) YES NO
a. Ever been postponed, rated or offered a policy different
than that applied for? / / / /
b. Any intention to travel or reside outside the United
States? / / / /
c. Been a pilot or student pilot during the past 3 years
or have any intention of becoming a pilot or student
pilot in any type of aircraft? (If "Yes", complete
Aviation Supplement.) / / / /
d. Participated in, or do you contemplate participating in:
aeronautics, competitive racing, underwater or sky
diving, mountain climbing, or any other similar avocation?
(If "Yes", complete Avocation Supplement.) / / / /
e. Ever had a traffic citation for driving while intoxicated
or driving under the influence of intoxicants or drugs? / / / /
f. Within the past three years, had any moving vehicle
violation? / / / /
-------------------------------- ------
Provide Driver's License # State
-------------------------------- ------
- -------------------------------------------------------------------------------
13. DETAILS TO "YES" ANSWERS ABOVE
- -------------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
14. ADDITIONAL INSTRUCTIONS
- -------------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
1067724
(6/97) 010488
<PAGE> 7
- -------------------------------------------------------------------------------
DECLARATIONS AND AUTHORIZATION
- -------------------------------------------------------------------------------
I agree that:
- - The statements and answers in this application and any amendments to it, in
any supplements, are true and complete to the best of my knowledge and belief
and will be part of any policy issued.
- - No printed provision of this application will be modified or waived except
by an endorsement signed by an officer at the Home Office. No agent has the
authority to waive or change the answer to any question in this application
or has the authority to make a promise which would have the effect of
changing any portion of this application or the policy applied for, or
waiving any of its provisions.
- - My acceptance of any insurance policy means I agree to any changes shown in
#10, where state law permits Home Office endorsements.
- - If a premium payment is given in exchange for a Temporary Insurance
Agreement (TIA), the Company will be liable only as set forth in that
Agreement.
- - If a premium payment is not given, then insurance will take effect when a
policy is approved by the Company for issue as applied for, the first full
premium is paid, and the health and insurability of any person proposed for
insurance have not changed since the date of this application.
- - If a policy is issued other than as applied for, insurance will take effect
under the policy only when a policy issued by the Company is delivered to
and accepted by me, the first full premium is paid, and the health and
insurability of any person proposed for insurance have not changed since
the date of this application.
The Applicant and agent certify that the Applicant has read, or had read to
him or her the completed application and that he or she realizes that any false
statement or misrepresentation therein may result in loss of coverage under
the policy.
CERTIFICATION: UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION
NUMBER (OR, IF NO NUMBER IS SHOWN, I AM WAITING FOR A NUMBER TO BE ISSUED
TO ME); AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT BEEN
NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR
THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING.
**PLEASE NOTE: YOU MUST CROSS OUT AND INITIAL #(2) ABOVE IF YOU HAVE BEEN
NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE OF UNDER-REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.**
1067724
(6/97) 010488
<PAGE> 8
- -------------------------------------------------------------------------------
DECLARATIONS AND AUTHORIZATION (CONT.)
- -------------------------------------------------------------------------------
I authorize any physician, medical practitioner, hospital, clinic, other
medical or medically related facility, insurance company, the Medical
Information Bureau, consumer reporting agency or employer to release to
General American Life Insurance Company, its subsidiaries, its reinsurers or
its legal representatives any information they may have relative to diagnosis,
treatment and prognosis of any physical or mental condition including drug
and/or alcohol abuse and/or any other information about me. I understand that
any information obtained will be used to determine eligibility for insurance
and will not be released to any person or organization except reinsurers, the
Medical Information Bureau, other persons or organizations performing business
or legal services in connection with my application, and other insurance
companies to whom I have applied or to whom a claim has been made, or as may
be otherwise lawfully required, or as I may further authorize. I know that I
may request a copy of this Authorization. I also acknowledge receipt of the
Notice of Information Practices. I understand that if an investigative
consumer report is ordered in connection with this application, I may be
interviewed in connection with the preparation of the report and, upon request,
I will be provided with a copy of the report. A photographic copy of this
Authorization will be as valid as the original. This Authorization will be
valid for 30 months from the date shown below.
/ / By checking this box, I authorize the Company to make changes (i.e.,
Beneficiary, Owner, address, transfer of funds, re-allocation of net
premiums) to my policy based upon instructions received from any person
who can furnish proper identification. Neither the Company nor any
person acting on its behalf will be subject to any claim, loss or
liability for acting in good faith upon instructions received.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
---------------------------------------- ----------------
Signed at Date
---------------------------------------- ----------------
(City, State) (MM/DD/YY)
- -------------------------------------------------------------------------------
I certify that I have truly and accurately recorded on all parts of this
application the information supplied by the Applicant.
In light of the financial need of the Proposed Insured and Owner, the purpose
of this sale has been discussed with the Owner, and I believe this application
to be a suitable recommendation.
1. __ To the best of my knowledge, this is a replacement.
(Complete and submit required replacement forms.)
__ To the best of my knowledge, this is not a replacement.
2. For VUL: Did you deliver the current prospectus and were all of the
written sales materials used printed by General American Life Insurance
Company?
___ Yes ___ No
---------------------------------------------------------------------
(Signature of Licensed Agent)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
---------------------------------------------------------------------
(Signature of Proposed Insured - Parent or
Guardian if Proposed Insured under age 18)
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
(Signature and address of Applicant/Owner if
other than Proposed Insured. If Owner is a
Corporation, Partnership or Trust, an authorized
officer, partner or trustee must sign and state title.)
- -------------------------------------------------------------------------------
1067724
(6/97) 010488
<PAGE> 9
AVIATION SUPPLEMENT
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
PROPOSED INSURED
- -------------------------------------------------------------------------------
Name (Last, First, Middle) Date of Birth (MM/DD/YY)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FOR PILOTS AND STUDENT PILOTS
- -------------------------------------------------------------------------------
Total of all ------ Total hours flown ------- Estimated hours flying -------
hours flown ------ in past 12 months ------- in next 12 months -------
Pilot certificate currently held: / / Private / / Commercial
/ / Student / / Flight Instructor
/ / Airline Transport Rating
/ / Instrument Flight Rating
Type of flying: / / Pleasure
/ / Commercial Specific type of flying Type of aircraft
------------------------ -----------------
------------------------ -----------------
/ / Flight Total hours in past 12 months
Instructor ----------------------------------
----------------------------------
Estimated hours in next 12 months
----------------------------------
----------------------------------
/ / Military Specific type of flying Type of aircraft
------------------------- -----------------
------------------------- -----------------
Date of last flight Branch or organization
-------------------- ----------------------
-------------------- ----------------------
If not a pilot, specify capacity in which
you fly.
--------------------------------------------
--------------------------------------------
YES NO
Have you ever flown or do you intend to fly: Ultralight, Biplane,
Prototype, experimental or personally built or assembled aircraft?
(If "Yes", complete Avocation Supplement.) / / / /
Should you not qualify for coverage at standard rates, do you
desire:
a. Full coverage with extra premium, if available? / / / /
b. Restricted aviation coverage without extra premium, if
available? / / / /
- -------------------------------------------------------------------------------
DETAILS
- -------------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
I agree that the statements and answers in this Aviation Supplement are true
and complete to the best of my knowledge and belief. They, together with the
statements and answers in the application and any amendments, will become the
basis of any insurance issued and will be part of any policy issued.
Signed at (City, State) Date (MM/DD/YY)
-------------------------------------------- -------------------------------
-------------------------------------------- -------------------------------
Signature of Proposed Insured -
Parent or Guardian if Proposed
Witnessed by Licensed Agent Insured under age 18.
-------------------------------------------- -------------------------------
-------------------------------------------- -------------------------------
939924AVI
(6/97) This Form Can Only Be Used in Missouri.
<PAGE> 10
AVOCATION SUPPLEMENT
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
PROPOSED INSURED
- -------------------------------------------------------------------------------
Name (Last, First, Middle) Date of Birth (MM/DD/YY)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNDERWATER SPORTS
- -------------------------------------------------------------------------------
Type: / / Scuba / / Skin Purpose: / / Recreation / / Rescue / / Salvage
Location: / / Oceans / / Lakes / / Caves / / Other (Provide location in
"Details" below.)
Have you received formal dive training? / / Yes (Provide certification / / No
level in "Details"
below.)
Do you use the "buddy system"? / / Yes / / No
<TABLE>
<CAPTION>
----------NUMBER OF DIVES----------
Depth Average Time Last 12 Months 1 to 2 Years Ago Next 12 Months
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0 - 100 ft.
- -------------------------------------------------------------------------------------------------------------
101 - 150 ft.
- -------------------------------------------------------------------------------------------------------------
Over 150 ft.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Have you ever had a diving accident? / / Yes (Provide explanation / / No
in "Details" below.)
- -------------------------------------------------------------------------------
RACING SPORTS: AUTO, MOTORCYCLE, SNOWMOBILE, MOTORBOAT
- -------------------------------------------------------------------------------
Type: / / Drag / / Stock / / Midget / / Sportscar / / Hotrod
/ / Go-Kart / / Snowmobile
/ / Cycle / / Boat / / Other (Provide type in "Details" below.)
Vehicle or Boat: Make & Model Class & Category Displacement Horsepower
-----------------------------------------------------------
-----------------------------------------------------------
Timing: / / Vehicle vs. Vehicle Maximum speed: Average speed:
-------------- --------------
/ / Vehicle vs. Clock mph mph
-------------- --------------
Location: / / Oval Track / / Closed Circuit / / Drag Strip
/ / Hill Climb / / Other (Provide location in "Details" below.)
--------------NUMBER OF RACES--------------
Last 12 Months 1 to 2 Years Ago Next 12 Months
-----------------------------------------------------------
-----------------------------------------------------------
Racing organization affiliated with. Races supervised by.
------------------------------------------ ------------------------------
------------------------------------------ ------------------------------
Have you ever had a racing accident? / / Yes (Provide explanation in / / No
"Details" below.)
- -------------------------------------------------------------------------------
DETAILS
- -------------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
PROVIDE SIGNATURES AND DATE ON OPPOSITE SIDE.
939924AVO
(6/97) This Form Can Only Be Used in Missouri. 003015
<PAGE> 11
- -------------------------------------------------------------------------------
SKY SPORTS
- -------------------------------------------------------------------------------
Type: / / Skydiving / / Parachuting / / Ultralights / / Biplaning
/ / Hanggliding / / Ballooning / / Other: (Provide type in
"Details" below.)
Are you a member of a club? / / Yes (Provide explanation in / / No
"Details" below.)
If Skydiving: / / Delayed Jumping / / Relative freefall work
/ / Relative canopy work
If Ballooning: / / Gas ballooning / / Hot air ballooning
Usual location and type of terrain.
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
----------------NUMBER OF FLIGHTS OR JUMPS--------------
Last 12 Months 1 to 2 Years Ago Next 12 Months
-------------------------------------------------------------
-------------------------------------------------------------
Have you been in an accident connected with this avocation?
/ / Yes (Provide explanation in "Details" below.) / / No
- -------------------------------------------------------------------------------
CLIMBING SPORTS
- -------------------------------------------------------------------------------
Type: / / Mountain / / Rock / / Ice / / Other: (Provide type in
"Details" below.)
Location: / / Ranges / / Caves / / Rock Formations / / Trails
/ / Other: (Provide location in "Details" below.)
Usual heights Maximum height and how often climbed.
---------------------------- ---------------------------------------------
---------------------------- ---------------------------------------------
Geographical area (including specific ranges.)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Do you use direct-aid climbing? / / Yes (Provide explanation in / / No
"Details" below.)
Do you participate as a guide or engage in rescue duties?
/ / Yes (Provide explanation in "Details" below.) / / No
-----------------NUMBER OF CLIMBS----------------
Last 12 Months 1 to 2 Years Ago Next 12 Months
----------------------------------------------------------------------
----------------------------------------------------------------------
Have you had a climbing accident? / / Yes (Provide explanation in / / No
"Details" below.)
- -------------------------------------------------------------------------------
DETAILS OR OTHER AVOCATIONS (INCLUDE DETAILS REGARDING NATURE, LOCATION,
FREQUENCY AND DEGREE OF PARTICIPATION.)
- -------------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
I agree that the statements and answers in this Avocation Supplement are true
and complete to the best of my knowledge and belief. They, together with the
statements and answers in the application and any amendments, will become the
basis of any insurance issued and will be part of any policy issued.
Signed at (City, State) Date (MM/DD/YY)
------------------------------------------ -------------------------------
------------------------------------------ -------------------------------
Signature of Proposed Insured -
Parent or Guardian if Proposed
Witnessed by Licensed Agent Insured under age 18.
------------------------------------------ -------------------------------
------------------------------------------ -------------------------------
939924AVO
(6/97) This Form Can Only Be Used In Missouri. 003015
<PAGE> 12
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
MEDICAL DECLARATIONS
- -------------------------------------------------------------------------------
1. Proposed Insured's Name (Last, First, Middle) Date of Birth (MM/DD/YY)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2. a. Who is the doctor who can give us the most complete and up to date
information concerning your present health? If "None", check / /
Name and Address (Street, City, State, Zip) Phone
--------------------------------------------------------------------------
( )
--------------------------------------------------------------------------
b. When was this doctor last consulted? --------------- Why? ------------
--------------- ------------
c. What treatment was given or medication prescribed? If "None", check / /
--------------------------------------------------------------------------
--------------------------------------------------------------------------
3. Height Weight Any weight loss in the past year? / / Yes / / No
------------------
------------------ If "Yes", reason -------------------------------------
-------------------------------------
4. a. Do you use tobacco or nicotine products? / / Current
/ / Past-date last used -------------- / / Never
--------------
b. Type / / Cigarettes / / Pipe/Cigar / / Chew / / Patch/Gum
Amount/Frequency ---------- ---------- ---- ---------
---------- ---------- ---- ---------
5. Within the last ten years have you had, been treated for, or
diagnosed as having: YES NO
a. High blood pressure, chest pain, heart attack, or any
other disease or disorder of the heart or circulatory
system? / / / /
b. Asthma, bronchitis, emphysema, or any other disease or
disorder of the lungs or respiratory system? / / / /
c. Seizures, stroke, headaches, or any other disease or
disorder of the brain or nervous system? / / / /
d. Ulcer, colitis, cirrhosis, hepatitis, or any other
disease or disorder of the liver, gallbladder,
intestines or stomach? / / / /
e. Any disease or disorder of the kidney, bladder,
prostate, reproductive organs, or breasts; sexually
transmitted disease; sugar, albumin, blood or pus in
the urine? / / / /
f. Diabetes; disorder of the thyroid or lymph glands,
or other endocrine disorders? / / / /
g. Arthritis, gout or disorder of the muscles or bones? / / / /
h. Cancer, tumor, cyst or disorder of the skin? / / / /
i. Anemia, or any other disorder of the blood? / / / /
j. Depression, stress, anxiety, or any other psychological
or emotional disorder or symptoms? / / / /
---------------------------------------------------------------------------
DETAILS: LIST QUESTION NUMBER. GIVE DATES, DURATION, TREATMENT AND DOCTORS'
NAMES AND ADDRESSES.
---------------------------------------------------------------------------
1067724NM
(6/97) This Form Can Only Be Used In Missouri. 011051
<PAGE> 13
- -------------------------------------------------------------------------------
MEDICAL DECLARATIONS (CONT.)
- -------------------------------------------------------------------------------
YES NO
6. Are you now under observation or taking medication or
treatment? / / / /
7. Do you have any doctor's visit or medical care scheduled? / / / /
8. Have you:
a. Ever been diagnosed by a member of the medical profession
as having AIDS or AIDS Related Complex? / / / /
b. Tested positive for antibodies to the AIDS (HIV) virus? / / / /
9. Other than the above, during the past five years have you
had any checkup, illness, injury or health condition; had
or been recommended to have any treatment, hospitalization,
surgery, medical test or medication? / / / /
10. Have you:
a. Used (once or more) or do you now use barbiturates,
amphetamines, hallucinogenic drugs (including marijuana),
cocaine, heroin, narcotics, or any similar substances or
any prescription drug except in accordance with a
physician's instructions? / / / /
b. Been advised to limit or discontinue the use of
alcohol or drugs; sought or received treatment,
counseling or participated in a group for alcohol
or drug use? / / / /
-----------------------------------------------------------------------------
DETAILS (CONT.):
-----------------------------------------------------------------------------
11. Do you exercise? / / Yes / / No Type ----------- How often? -------
----------- -------
12. Are you now pregnant? / / Yes / / No If "Yes", estimated date of
delivery? -----------------------
-----------------------
13. Family history: Age if Living Age at Death Cause of Death
----------------------------------------------------
Father
----------------------------------------------------
Mother
----------------------------------------------------
Brothers and Sisters
----------------------------------------------------
# Living # Dead
- ------------------------ ----------------------------------------------------
- ------------------------ ----------------------------------------------------
I AGREE THAT THE STATEMENTS AND ANSWERS IN THIS MEDICAL DECLARATIONS ARE TRUE
AND COMPLETE TO THE BEST OF MY KNOWLEDGE AND BELIEF. THEY, TOGETHER WITH THE
STATEMENTS AND ANSWERS IN THE APPLICATION AND ANY AMENDMENTS, WILL BECOME THE
BASIS OF ANY INSURANCE ISSUED AND WILL BE PART OF ANY POLICY ISSUED.
Signed at (City, State) Date (MM/DD/YY)
- -------------------------------------------- -------------------------------
- -------------------------------------------- -------------------------------
Signature of Proposed Insured -
Parent or Guardian if Proposed
Witnessed by Licensed Agent Insured under age 18.
- -------------------------------------------- -------------------------------
- -------------------------------------------- -------------------------------
1067724NM
(6/97) This Form Can Only Be Used In Missouri. 011051
<PAGE> 14
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
TEMPORARY INSURANCE AGREEMENT AND ADVANCE PREMIUM RECEIPT
- -------------------------------------------------------------------------------
PLEASE READ CAREFULLY: This Agreement may provide a LIMITED AMOUNT of Life
- --------------------- --------------
Insurance for a LIMITED PERIOD OF TIME, subject to the terms below. NO AGENT OR
----------------------
BROKER IS AUTHORIZED TO WAIVE OR CHANGE ANY OF THE TERMS OF THIS AGREEMENT. ALL
PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY. DO NOT MAKE CHECK PAYABLE
TO THE AGENT OR BROKER OR LEAVE THE PAYEE BLANK.
This Agreement must be completed when (and only when) money is paid in
conjunction with this agreement. Money cannot be accepted and no Temporary
Insurance will be in effect if the answer to any of the Health Questions listed
below is "Yes" or left blank.
-------------------------- -----------
We acknowledge receipt from a premium of $
-------------------------- -----------
--------------------------
and an application on which is shown as the Proposed
--------------------------
Insured. If the application number shown below and the name of the Proposed
Insured shown on this Agreement are not the same as shown in the application,
NO TEMPORARY INSURANCE will be in effect, even if money is paid.
If applying for VUL, the date of the check, the date the application was signed
and the date this Agreement was signed MUST be the same.
NOTE: To obtain the maximum period of coverage (60 days), at least 1/6th of the
annual premium must be submitted with this Agreement. If the amount paid
is less than 1/6th of the annual premium, the maximum period of coverage
will be proportionately less.
HEALTH QUESTIONS
NO MONEY SHOULD BE ACCEPTED IF ANY QUESTION BELOW IS ANSWERED "YES."
NO COVERAGE IS IN EFFECT UNTIL ALL REQUIREMENTS HAVE BEEN MET.
Has the Proposed Insured or any person proposed for coverage in connection
with the application bearing the same number as shown below:
1. Within the past 90 days: YES NO
(a) been admitted to a hospital or other medical facility? / / / /
(b) been advised to be admitted to a hospital or other
medical facility? / / / /
(c) had surgery performed or recommended? / / / /
2. Within the past 2 years, had or been treated for or been
advised to be treated for:
(a) heart disease, stroke, or cancer? / / / /
(b) alcohol or drug dependence or abuse? / / / /
By signing below, the Proposed Insured states that he/she has received a copy of
and has read this Agreement including the terms and conditions on the reverse
side and declares that the answers to the Health Questions are true to the
best of his/her knowledge and belief. Also, the Proposed Insured and Applicant/
Owner understand and agree to all of the terms of this Agreement.
Signature of Proposed Insured -
Parent or Guardian if Proposed
Signed at (City, State) Date (MM/DD/YY) Insured under age 18
- --------------------------------------------- -------------------------------
- --------------------------------------------- -------------------------------
Signature of Applicant/Owner
Witnessed by Licensed Agent if other than Proposed Insured
- --------------------------------------------- -------------------------------
- --------------------------------------------- -------------------------------
Submit this original with the application.
1067724TIA
(6/97) This Form Can Only Be Used In Missouri. 010453
<PAGE> 15
- -------------------------------------------------------------------------------
TEMPORARY INSURANCE AGREEMENT AND ADVANCE PREMIUM RECEIPT (CONT.)
- -------------------------------------------------------------------------------
TERMS, CONDITIONS AND LIMITATIONS
AMOUNT OF COVERAGE: $500,000 Maximum for all Life Insurance Applications or
- -------------------
Agreements
Subject to the limitations contained in this Agreement, if money has been
accepted by the Company as advance payment for the Application for Life
Insurance identified by number in this Agreement, and if the Proposed Insured
or any other person proposed for coverage dies while this Agreement is in
effect, the Company will pay to the Beneficiary named in that application the
LESSER of: (a) the amount of all death benefits applied for on each such
person, including any accidental or supplemental death benefits, if applicable;
or (b) $500,000. Even if more than one Temporary Insurance Agreement and
Advance Premium Receipt is in effect, the total amount paid under all such
agreements cannot be more than a maximum amount of $500,000. This maximum
amount also will be reduced by any other life and accidental death insurance
in force with us. The MINIMUM amount of temporary life insurance will be
-------
either the amount applied for or $50,000, whichever is less.
DATE COVERAGE BEGINS: If an advance premium has been paid, Temporary Insurance
- ---------------------
under this Agreement will begin when the following requirements are met:
1) This Agreement has been completed; and
2) The Application for Life Insurance and the Medical Declarations have
been fully completed; and
3) All required medical examination requirements have been completed.
DATE COVERAGE TERMINATES: Temporary Insurance under this Agreement will
- -------------------------
terminate automatically on the earliest of the following dates:
1) 60 days from the date of this Agreement; or
2) The date insurance begins under the policy(ies) applied for; or
3) The date a policy, other than applied for, is offered to the person
named as Owner in the application; or
4) The date the Company mails notice to the Proposed Insured at the address
shown in the application that the application or this Agreement has been
declined by the Company.
SPECIAL LIMITATIONS:
- --------------------
1) This Agreement provides benefits only for the type of insurance applied
for in the application identified on this Agreement.
2) Fraud or misrepresentations in the application or in the answers to the
Health Questions in this Agreement invalidate this Agreement and the
Company's only liability is to refund any premium paid, plus interest.
3) There is no coverage under this Agreement if the check submitted with the
application is not honored by the bank the first time it is presented.
4) No agent or broker is authorized to accept a payment for a Proposed
Insured who is less than 15 days old or over age 70 on the date of this
Agreement.
Any payment made under this Agreement applies only to the purchase of Temporary
Insurance. If we issue the policy as applied for, or if you accept a policy
issued other than as applied for, then the amount paid will be credited to the
first year's premium due under the policy issued. Except as otherwise provided
under the terms of the policy, no refund will be made if we issue a policy as
applied for. The effective date of the policy issued will be determined in
accordance with our current policy dating procedures.
The full amount paid with this Agreement will be refunded to you, with
interest, if:
1) The application or this Agreement is declined or cancelled by us, or
2) We receive your signed request to cancel the application or this
Agreement.
1067724TIA
(6/97) This Form Can Only Be Used In Missouri. 010453
<PAGE> 16
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
TEMPORARY INSURANCE AGREEMENT AND ADVANCE PREMIUM RECEIPT
- -------------------------------------------------------------------------------
PLEASE READ CAREFULLY: This Agreement may provide a LIMITED AMOUNT of Life
- ---------------------- --------------
Insurance for a LIMITED PERIOD OF TIME, subject to the terms below. NO AGENT
----------------------
OR BROKER IS AUTHORIZED TO WAIVE OR CHANGE ANY OF THE TERMS OF THIS AGREEMENT.
ALL PREMIUM CHECKS MUST BE MADE PAYABLE TO THE COMPANY. DO NOT MAKE CHECK
PAYABLE TO THE AGENT OR BROKER OR LEAVE THE PAYEE BLANK.
This Agreement must be completed when (and only when) money is paid in
conjunction with this agreement. Money cannot be accepted and no Temporary
Insurance will be in effect if the answer to any of the Health Questions
listed below is "Yes" or left blank.
------------------------- -----------
We acknowledge receipt from a premium of $
------------------------- -----------
-------------------------
and an application on which is shown as the Proposed
-------------------------
Insured. If the application number shown below and the name of the Proposed
Insured shown on this Agreement are not the same as shown in the application,
NO TEMPORARY INSURANCE will be in effect, even if money is paid.
If applying for VUL, the date of the check, the date the application was signed
and the date this Agreement was signed MUST be the same.
NOTE: To obtain the maximum period of coverage (60 days), at least 1/6th of
the annual premium must be submitted with this Agreement. If the amount
paid is less than 1/6th of the annual premium, the maximum period of
coverage will be proportionately less.
HEALTH QUESTIONS
NO MONEY SHOULD BE ACCEPTED IF ANY QUESTION BELOW IS ANSWERED "YES."
NO COVERAGE IS IN EFFECT UNTIL ALL REQUIREMENTS HAVE BEEN MET.
Has the Proposed Insured or any person proposed for coverage in connection
with the application bearing the same number as shown below:
1. Within the past 90 days: YES NO
(a) been admitted to a hospital or other medical facility? / / / /
(b) been advised to be admitted to a hospital or other
medical facility? / / / /
(c) had surgery performed or recommended? / / / /
2. Within the past 2 years, had or been treated for or been
advised to be treated for:
(a) heart disease, stroke, or cancer? / / / /
(b) alcohol or drug dependence or abuse? / / / /
By signing below, the Proposed Insured states that he/she has received a copy
of and has read this Agreement including the terms and conditions on the
reverse side and declares that the answers to the Health Questions are true
to the best of his/her knowledge and belief. Also, the Proposed Insured and
Applicant/Owner understand and agree to all of the terms of this Agreement.
Signature of Proposed Insured -
Parent or Guardian if Proposed
Signed at (City, State) Date (MM/DD/YY) Insured under age 18
- ---------------------------------------------- -------------------------------
- ---------------------------------------------- -------------------------------
Signature of Applicant/Owner if
Witnessed by Licensed Agent other than Proposed Insured
- ---------------------------------------------- -------------------------------
- ---------------------------------------------- -------------------------------
Proposed Insured's Copy
1067724TIA
(6/97) This Form Can Only Be Used In Missouri. 010453
<PAGE> 17
- -------------------------------------------------------------------------------
TEMPORARY INSURANCE AGREEMENT AND ADVANCE PREMIUM RECEIPT (CONT.)
- -------------------------------------------------------------------------------
TERMS, CONDITIONS AND LIMITATIONS
AMOUNT OF COVERAGE: $500,000 Maximum for all Life Insurance Applications or
- -------------------
Agreements
Subject to the limitations contained in this Agreement, if money has been
accepted by the Company as advance payment for the Application for Life
Insurance identified by number in this Agreement, and if the Proposed Insured
or any other person proposed for coverage dies while this Agreement is in
effect, the Company will pay to the Beneficiary named in that application the
LESSER of: (a) the amount of all death benefits applied for on each such
person, including any accidental or supplemental death benefits, if
applicable; or (b) $500,000. Even if more than one Temporary Insurance
Agreement and Advance Premium Receipt is in effect, the total amount paid
under all such agreements cannot be more than a maximum amount of $500,000.
This maximum amount also will be reduced by any other life and accidental
death insurance in force with us. The MINIMUM amount of temporary life
-------
insurance will be either the amount applied for or $50,000, whichever is less.
DATE COVERAGE BEGINS: If an advance premium has been paid, Temporary Insurance
- ---------------------
under this Agreement will begin when the following requirements are met:
1) This Agreement has been completed; and
2) The Application for Life Insurance and the Medical Declarations have
been fully completed; and
3) All required medical examination requirements have been completed.
DATE COVERAGE TERMINATES: Temporary Insurance under this Agreement will
- -------------------------
terminate automatically on the earliest of the following dates:
1) 60 days from the date of this Agreement; or
2) The date insurance begins under the policy(ies) applied for; or
3) The date a policy, other than applied for, is offered to the person
named as Owner in the application; or
4) The date the Company mails notice to the Proposed Insured at the
address shown in the application that the application or this Agreement
has been declined by the Company.
SPECIAL LIMITATIONS:
- --------------------
1) This Agreement provides benefits only for the type of insurance applied
for in the application identified on this Agreement.
2) Fraud or misrepresentations in the application or in the answers to the
Health Questions in this Agreement invalidate this Agreement and the
Company's only liability is to refund any premium paid, plus interest.
3) There is no coverage under this Agreement if the check submitted with the
application is not honored by the bank the first time it is presented.
4) No agent or broker is authorized to accept a payment for a Proposed
Insured who is less than 15 days old or over age 70 on the date of this
Agreement.
Any payment made under this Agreement applies only to the purchase of Temporary
Insurance. If we issue the policy as applied for, or if you accept a policy
issued other than as applied for, then the amount paid will be credited to the
first year's premium due under the policy issued. Except as otherwise provided
under the terms of the policy, no refund will be made if we issue a policy as
applied for. The effective date of the policy issued will be determined in
accordance with our current policy dating procedures.
The full amount paid with this Agreement will be refunded to you, with
interest, if:
1) The application or this Agreement is declined or cancelled by us, or
2) We receive your signed request to cancel the application or this
Agreement.
1067724TIA
(6/97) This Form Can Only Be Used In Missouri. 010453
<PAGE> 18
General
American
Life Insurance Company
St. Louis, Missouri
- -------------------------------------------------------------------------------
SOLICITING AGENT'S CERTIFICATE
- -------------------------------------------------------------------------------
PERSONAL
- --------
Purpose for Coverage:
/ / Juvenile / / Estate Planning / / Income Replacement / / Other:______
If Proposed Insured is a juvenile, provide amount of coverage in force on each
parent and all siblings.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
If Proposed Insured is a non-working spouse, provide -------------------------
amount of coverage in force on working spouse.
-------------------------
IF THE AMOUNT OF COVERAGE IS GREATER THAN $1,000,000, COMPLETE AND SIGN THE
FOLLOWING PERSONAL FINANCIAL STATEMENT WITH THE PROPOSED INSURED:
------------ANNUAL EARNED INCOME------------
----------------------------------------
Salary or Draw $
----------------------------------------
Bonus/Commissions $
----------------------------------------
Other Earnings $
----------------------------------------
TOTAL EARNED INCOME $
----------------------------------------
------------ANNUAL UNEARNED INCOME------------
----------------------------------------
Dividends/Interest $
----------------------------------------
Net Rentals $
----------------------------------------
Other $
----------------------------------------
TOTAL UNEARNED INCOME $
----------------------------------------
----------------------------------------
Spouse's Income $
----------------------------------------
------------ASSETS------------
----------------------------------------
Cash $
----------------------------------------
Real Estate $
----------------------------------------
Business Equity $
----------------------------------------
Stocks/Bonds $
----------------------------------------
TOTAL ASSETS $
----------------------------------------
------------LIABILITIES------------
----------------------------------------
Mortgages $
----------------------------------------
Personal Loans $
----------------------------------------
Other $
----------------------------------------
TOTAL LIABILITIES $
----------------------------------------
----------------------------------------
Net Worth $
----------------------------------------
------------
I declare that the above information is true and complete. Date
------------
(MM/DD/YY)
Signature of Agent Signature of Proposed Insured
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
BUSINESS
- --------
Type of Business: / / Corporation / / Partnership / / Sole Proprietorship
Purpose: / / Deferred Comp. / / Exec. Bonus / / Split Dollar / / Buy/Sell
/ / Cross Purchase
/ / Loan Coverage / / Keyperson (Provide how amount was determined
in "Details" on next page.)
Financial Data for the last three years:
<TABLE>
<CAPTION>
Year Ending Year Ending Year Ending
---------------------------------------------------------------------------------
<S> <C> <C> <C>
---------------------------------------------------------------------------------
Owner's Equity $ $ $
---------------------------------------------------------------------------------
Total Assets $ $ $
---------------------------------------------------------------------------------
Liabilities: Current $ $ $
---------------------------------------------------------------------------------
Long Term $ $ $
---------------------------------------------------------------------------------
Net Sales $ $ $
---------------------------------------------------------------------------------
Net Income $ $ $
---------------------------------------------------------------------------------
</TABLE>
1067724SAC
(6/97) 010488
<PAGE> 19
- -------------------------------------------------------------------------------
SOLICITING AGENT'S CERTIFICATE (CONT.)
- -------------------------------------------------------------------------------
Enter below the names, ownership interest and the amount of business
insurance (all companies) carried by all owners, officers, partners and
key-persons.
<TABLE>
<CAPTION>
% of Insurance Amount (all companies including General American)
Name Title Ownership Inforce Pending Contemplated
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ $ $
- -----------------------------------------------------------------------------------------------------------------------
$ $ $
- -----------------------------------------------------------------------------------------------------------------------
$ $ $
- -----------------------------------------------------------------------------------------------------------------------
$ $ $
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Details:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
COMMISSIONS
- -----------
------------
Are you related to the Proposed Insured? / / Yes: Relationship:
/ / No ------------
Type of Commission for WL-100? / / Normal / / Spread
Annualized commission requested? / / Yes / / No
If "Yes", provide Signature of General Agent.
-------------------------------------------------------
-------------------------------------------------------
Attach agent label or write name and code for agent(s) to be credited with
production. Include percentage of split in whole numbers.
- ---------- -----------
% %
- ---------------------------------------- -----------------------------------
- ---------------------------------------- -----------------------------------
- ---------- -----------
% %
- ---------------------------------------- -----------------------------------
- ---------------------------------------- -----------------------------------
- -------------------------------------------------------------------------------
FOR HOME OFFICE USE ONLY
Reviewed by: Date:
------------------------- ------------------------
(Principal) (MM/DD/YY)
- -------------------------------------------------------------------------------
1067724SAC
(6/97) 010488
<PAGE> 1
APPLICATION [LOGO]
FOR
PENSION INSURANCE
GENERAL AMERICAN LIFE
INSURANCE COMPANY
ST. LOUIS, MISSOURI
*******************************************************************************
GENERAL INSTRUCTIONS
- - Please complete all applications and supplements in BLACK INK.
- - Complete all applicable sections. Choose Section B, C, D or E to select
product type and transaction desired. Section H does not have to be
completed on an increase of $25,000 or less, or on a Term Conversion with
No Increase.
- - The plan trustee is the stated beneficiary. This application cannot be
amended otherwise. A change of beneficiary form must be completed to change
the beneficiary from the plan trustee. The change of beneficiary form must
not be dated prior to the policy's issue date.
---
- - To reduce processing time, submit all requirements along with this
application.
- - It will be necessary to photocopy the authorization if an APS is ordered by
the General Agent. The original authorization must be forwarded to the Home
Office with the application.
- - Any contemplated change in amount of insurance must conform to maximum/
minimum amount limits as established for the plan involved as of the date
of issue used for the new policy.
- - Any change that is made to this application in states that are not Home
Office endorseable will be represented by an amendment to be signed and
returned to the Home Office.
General
American
products to value,
people to trust(R)
939424
(9/96) This form must be used in Missouri.
<PAGE> 2
CUSTOMER INTERVIEW PROGRAM
In connection with your Application for Insurance or Policy Change you may be
receiving a telephone call from a person at our Home Office or another agency
authorized to obtain some personal and financial information. You can be assured
that your answers are strictly confidential and will be used only to assess
your eligibility for insurance. The interview normally takes from five to ten
minutes and will be conducted at a time convenient to you. In the event you
are not in when the interviewer calls, the interviewer will probably leave
his/her name and a telephone number so that you can return the call at no
charge to you and supply the necessray information.
- -------------------------------------------------------------------------------
NOTICE OF INFORMATION PRACTICES
This Notice Must be Given to the Insured. It includes the Medical Information
Bureau Notice and Fair Credit Reporting Act Notice.
In considering your application, General American Life Insurance Company will
review information from various sources. These include your statements, the
results of your physical examination (if required), and reports we get from
doctors or medical facilities which have attended you.
Information about your insurability and/or any past or future claims will be
treated as confidential. We, or our reinsurers, may however, make a brief
report of this to the Medical Information Bureau, a nonprofit membership
organization of life insurance companies, which operates an information
exchange on behalf of its members. If you apply to another Bureau member
company for life or health insurance coverage, or a claim for benefits is
submitted to such a company, the Bureau, upon request, will supply such
company with the information in its file.
Upon receipt of a request from you, the Bureau will arrange disclosure of any
information it may have in your file (medical information will be disclosed
only to your attending physician). If you question the accuracy of information
in the Bureau's file, you may contact the Bureau and seek a correction in
accordance with the procedures set forth in the federal Fair Credit Reporting
Act. The address of the Bureau's information office is Post Office Box 105,
Essex Station, Boston, Massachusetts 02112, telephone number (617) 426-3660.
We, or our reinsurers, may also release information to other life insurance
companies to which you apply for life or health insurance, or to which a claim
is submitted.
In addition, we may get an investigative report from a consumer reporting
agency. This report requires personal interviews with your neighbors, friends,
or other acquaintances for information as to your general reputation, personal
characteristics and mode of living. As part of your application, you have
authorized us to do this. You have the right to be personally interviewed
and to make a written request within a reasonable period about the nature
and scope of this investigation. Upon written request you will be told if
such a report has actually been ordered, and if it has, we will give you the
name and address of the consumer reporting agency. You may contact this
consumer reporting agency and ask for a copy of such report.
Unless a legitimate business need exists or we are required to do so by law,
the information we get in this report, as well as any other information which
we later acquire, will not be disclosed to anyone else without your consent.
You may request a copy of all information acquired by us and have a right to
correct any personal information which you feel is inaccurate. We will, if
required by law, give you a more detailed notice of the types of personal
information which we get in considering your application, as well as any
additional rights which you may have.
If you need any assistance, please feel free to contact your agent or us at
General American Life Insurance Company, Attention: Individual Operations, New
Business Administration, 13045 Tesson Ferry Rd., St. Louis, MO 63128.
939424
(9/96)
<PAGE> 3
- -------------------------------------------------------------------------------
GENERAL AMERICAN LIFE INSURANCE COMPANY
ST. LOUIS, MISSOURI
- -------------------------------------------------------------------------------
ALWAYS COMPLETE GENERAL INFORMATION SECTION A
- -------------------------------------------------------------------------------
1. (a) Name of Proposed Insured:
(b) / / Female
/ / Male
(c) Social Security #:
- -------------------------------------------------------------------------------
(d) Date of Birth: Mo. Day Yr.
(e) Insuring Age:
(f) Birthplace:
(g) Home Phone #:
( )
- -------------------------------------------------------------------------------
(h) Residence Address: Number and Street, or RFD City State Zip
- -------------------------------------------------------------------------------
2. (a) Occupation (described duties):
(b) Business Phone #:
( )
- -------------------------------------------------------------------------------
3. Legal Name of Plan (as specified in plan document):
4. Date of Issue:
- -------------------------------------------------------------------------------
5. Convenient time, place and phone # to reach Proposed Insured:
- -------------------------------------------------------------------------------
6. BENEFICIARY AND OWNER: THE PLAN TRUSTEE WILL BE THE BENEFICIARY AND
ORIGINAL OWNER.
- -------------------------------------------------------------------------------
7. Are you now and have you been actively at work for the employer sponsoring
the above named plan on a full-time basis (at least 20 hours a week during
the 60 days prior to the date of this application)? (If "No", give
details in #11.) / / Yes / / No
- -------------------------------------------------------------------------------
8. Have you used any form of tobacco in the last 12 months?.. / / Yes / / No
If answered "Yes", complete the following:
(a) type used: / / cigar / / pipe / / cigarettes / / smokeless tobacco
(b) how often?____________ (c) If you no longer smoke, when did you
stop? _________(Mo) __________(Yr)
- -------------------------------------------------------------------------------
DO NOT COMPLETE QUESTIONS 9 AND 10 IF APPLYING FOR AN INCREASE IN FACE AMOUNT
- -------------------------------------------------------------------------------
9. (a) Total Life Insurance now in force on Proposed Insured/Insured (If
none, write "None".)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Company Year of Personal Business Accidental Waiver of Prem.
Issue Ins. Amt. Ins. Amt. Death Amt. Yes No
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
/ / / /
-------------------------------------------------------------------------------------------------------------
/ / / /
-------------------------------------------------------------------------------------------------------------
/ / / /
-------------------------------------------------------------------------------------------------------------
TOTALS
--------------------------------------------------------------------
</TABE>
(b) Are you currently applying for life insurance with any other company?
Yes / / No / /
("If "Yes", give details in #11.)
(c) Will the insurance being applied for replace or change any of the
above or any in force annuities? If "Yes"; Circle coverage being
terminated. (Complete and submit required papers.) Yes / / No / /
(d) If policy will replace term insurance which has a disbility benefit,
answer the following question: Is the insured now, or has he/she
totally and permanently disabled as defined in the present policy?
Yes / / No / /
- -------------------------------------------------------------------------------
10. Have you: (Provided details in #11 to any "Yes" answers.)
(a) Ever been postponed, rated or offered a policy different than that
applied for? . . . . . . . . . . . . . . . . . . . . . . Yes / / No / /
(b) Within the past three years, been in a motor vehicle accident or
charged with a moving violation of any motor vehicle law or had your
license restricted or revoked? . . . . . . . . . . . . .Yes / / No / /
If 10(b) is answered "Yes", provide your Driver's
License #___________________________________ State______________
- -------------------------------------------------------------------------------
11. Details of Answers (If additional space is needed, continue in Section G.)
- -------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 4
- -------------------------------------------------------------------------------
SECTION B TRANSACTION REQUESTED
- -------------------------------------------------------------------------------
/ / NEW BUSINESS
- -------------------------------------------------------------------------------
/ / TERM CONVERSION / Policy Number(s) /
/ /
Convert above policy(ies) as indicated herein. Convert $ _____________
of term policy or rider as indicated herein. Balance, if any, of term
policy or rider coverage / / to remain on existing policy original
date / / to be discontinued
- -------------------------------------------------------------------------------
/ / CURRENT DATE EXCHANGE / Policy Number(s) /
/ /
(i.e. Replacement of existing General American policy) /
/
Exchange above policy(ies) as indicated within this application.
Do you want federal income tax withheld on any taxable part of the exchange?
/ / Yes / / No (MUST BE ANSWERED)
This new contract will be subject to taxation as described in Internal
Revenue Code Section 7702 or 7702(a).
- -------------------------------------------------------------------------------
SECTION C TRADITIONAL LIFE INSURANCE APPLIED FOR
- -------------------------------------------------------------------------------
12. (A) Base Policy:
-----------
/ / WL-98 $___________
/ / WL-100 $___________
/ / LT-3
/ / LT-4
/ / Other (List) _________ $ __________
_________ $___________
Benefits:
---------
/ / WP / / ADB $ _________
Riders:
-------
/ / Decreasing
/ / Spec/Term II $ ___________________ / / Level
/ / PAR $ __________________
/ / Values Plus One ________ No. of Units
/ / APO $ ______________ Option at End of ____ Yrs.
/ / Other (List) ___________ $/# ______________
/ / Other (List) ___________ $/# ______________
- -------------------------------------------------------------------------------
(b) Dividend Option (if eligible): (If no choice indicated, "Pd. Up Addns."
is automatic for Whole Life and "Cash" is automatic for Term.)
/ / Pd. Up Addns. / / Cash / / Redn. of Prem. / / Accumulations
- -------------------------------------------------------------------------------
SECTION D UNIVERSAL LIFE INSURANCE APPLIED FOR
- -------------------------------------------------------------------------------
13. (a) Base Policy:
------------
Contract Type / / Opt. A (Level) / / Opt. B (Incr.)
/ / UL-100 (91) Base $ ________________
/ / Variable + $ ________________
/ / SC (91) / / Level
Total = $ ________________
/ / JSL $ ______________ (Excluding JSC)
(Complete application on joint insured.)
/ / JSC $ ____________ / / Var / / Lev
/ / Flex One $ __________ Initial face amt.
/ / Inc / / Dec / / Lev $ ________ ann
/ / Inc / / Dec / / Lev $ ________ ann
/ / Inc / / Dec / / Lev $ ________ ann
(If beneficiary other than policy's beneficiary is desired,
specify such in Section G.)
/ / EGIR (Confidence Plus)
/ / Other (List) _________________ $/# ________________
_________________ $/# ________________
Benefits:
---------
/ / WMD / / WSP $ ___________________ (Monthly Benefit)
/ / ADB $ _____________________
Riders:
-------
/ / APW
/ / Other (List) ___________ $/# _____________
___________ $/# _____________
/ / Increasing Benefit Option (UL-100)
/ / ______ % / / CPI
/ / Increasing Benefit Option and
Supplemental Term Face Amounts (UL-100)
/ / ______ % / / CPI
- -------------------------------------------------------------------------------
(b) Dividend Option (if no choice indicated, "Inc. Cash Value" is
automatic.) / / Inc. Cash Value / / Cash
- -------------------------------------------------------------------------------
/ / (c) UNIVERSAL LIFE INCREASE IN COVERAGE / Policy Number /
/ /
Increase face amount form $ ____________ to $ _______________
New Premium Amount $ ____________ Billing Mode: _____________
- -------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 5
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE APPLIED FOR SECTION E
- -------------------------------------------------------------------------------
14. (a) Base Policy:
------------
Contract Type
/ / Option A (Level) / / Option B (Incr.)
/ / FPVL $ _____________
/ / VLSI-85 $ _____________
(Complete Customer Information Statement)
/ / Other (List) _____________ $/# ____________
_____________ $/# ____________
Benefits:
---------
/ / WMD / / ADB $ ________________
Riders:
-------
/ / Other (List) _____________ $/# ______________
_____________ $/# ______________
- -------------------------------------------------------------------------------
(b) Net Premium Allocation (0 or minimum of 5%. Percentages must be in
whole numbers and total 100%.)
General American Capital Company:
/ / Money Market Fund _________________ %
/ / S & P 500 Index Fund ________________ %
/ / Bond Index Fund ________________ %
/ / Managed Equity Fund ________________ %
/ / Asset Allocation Fund ________________ %
/ / Internation Index Fund ________________ %
/ / Mid-Cap Equity Fund ________________ %
/ / Small-Cap Equity Fund ________________ %
------------------------------------
Van Eck Worldwide Insurance Trust:
/ / Worldwide Hard ________________ %
Assets Fund
Fidelity's VIP & VIP II Funds:
/ / Equity-Income Portfolio _______________ %
/ / Growth Portfolio _______________ %
/ / Overseas Portfolio _______________ %
/ / High Income Portfolio _______________ %
/ / Asset Manager Portfolio _______________ %
---------------------------------
/ / Other: ______________ ________________ %
/ / Other: ______________ _______________ %
/ / General Account _______________ %
==================================================
TOTAL ALLOCATION ________________ %
- --------------------------------------------------------------------------------
(c) Dividend Option (If no Choice indicated, "Inc. Cash Value" is
automatic.) / / Inc. Cash Value / / Cash
- -------------------------------------------------------------------------------
(d) Suitability Information:
(a) Have you received a prospectus for the policy applied for?
/ / Yes / / No
Date of Prospectus ___________ Date of any supplement ___________
(b) Do you understand that:
1. The death benefit and cash surrender value will increase or
decrease depending on investment experience, and
2. There is no guaranteed minimum death benefit or cash
surrender value? / / Yes / / No
(c) Do you believe that the policy applied for meets your insurance
objectives and your anticipated financial needs? / / Yes / / No
/ / I REQUEST A COPY OF THE STATEMENT OF ADDITIONAL INFORMATION
REFERRED TO IN THE PROSPECTUS.
939424
(9/96)
<PAGE> 6
- --------------------------------------------------------------------------------
SECTION F APPLIES TO SECTIONS B, C, D AND E
- --------------------------------------------------------------------------------
(For Home Office Use Only:
Participant No. _________________ )
15. Premiums: / / ANN / / SA / / QR / / MO / / Single Premium
Premium Amount $ ___________ / / Target / / Minimum / / Other ________
- --------------------------------------------------------------------------------
SECTION G APPLIES TO SECTIONS A, B, C, D AND E
- --------------------------------------------------------------------------------
16. (a) Explanations or Additional Instructions:
- --------------------------------------------------------------------------------
(b) Home Office Endorsement (Not applicable in Kentucky, Maryland,
Minnesota, New Hampshire, Pennsylvania, West Virginia, Wisconsin.)
- --------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 7
GENERAL AMERICAN LIFE INSURANCE COMPANY
ST. LOUIS, MISSOURI
- --------------------------------------------------------------------------------
MEDICAL DECLARATIONS SECTION H
- --------------------------------------------------------------------------------
THIS SECTION NOT REQUIRED ON AN INCREASE OF
$25,000 OR LESS OR ON A TERM CONVERSION WITH NO INCREASE
-- --------
IF ANY QUESTIONS ARE ANSWERED "YES", PLEASE GIVE DETAILS.
- --------------------------------------------------------------------------------
17. (a) Name of Proposed Insured _____________________________
(b) Height _____ ft. _____ in; Weight _____ lbs.
(c) Any change in wieght in past year? / / Yes / / No
(If yes, give details including number of pounds.)
- --------------------------------------------------------------------------------
18. Within the last ten years, from the date of this application, have you
been treated for or had any known indication of:
(a) chest pains, high blood pressure, heart attack, or heart murmur?
/ / Yes / / No
- --------------------------------------------------------------------------------
(b) diabetes, cancer, chronic respiratory disorder, mental or nervous
disorder? / / Yes / / No
- --------------------------------------------------------------------------------
(c) a disorder of the kidneys, liver, stomach, intestines, or
gallbladder? / / Yes / / No
- --------------------------------------------------------------------------------
19. In the past 5 years have you used any of the following once or more:
Narcotics, LSD, marijuana, amphetamines, barbituates, cocaine, heroin, or any
any drugs except as legally prescribed by a physician? / / Yes / / No
- --------------------------------------------------------------------------------
20. Have you ever received treatment for or advise for or joined an
organization because of alcohol or drug addiction? / / Yes / / No
- --------------------------------------------------------------------------------
21. Are you now under observation or taking medication or treatment?
/ / Yes / / No
- --------------------------------------------------------------------------------
22. Do you have any doctor's vist or medical care scheduled? / / Yes / / No
- --------------------------------------------------------------------------------
23. Have you ever been diagnosed by a member of the medical profession as
having AIDS or AIDS Related Complex? / / Yes / / No
- --------------------------------------------------------------------------------
24. Have you ever received treatment from a member of the medical profession
for AIDS or AIDS Related Complex? / / Yes / / No
- --------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 8
- --------------------------------------------------------------------------------
SECTION I DECLARATIONS
- --------------------------------------------------------------------------------
I hereby agree that:
(a) The statements and answers in all parts of this application, and any
amendments to this application, will be a part of any policy issued.
(b) No printed provision of this application will be modified or waived
except by an endorsement signed by an officer at the Office . No
agent has the authority to waive or change the answer to any
question in this application or has the authority to make any
promise which would have the effect of changing any portion of this
application or the policy applied for, or waiving any of its
provisions.
(c) The "date of issue" as shown in my policy(ies) will be the
"anniversary date". The due date of future premiums will be
determined from that date. The number of policy years and months
for deciding policy values will be determined from that date.
(d) My acceptance of any insurance policy(ies) means I agree to any
changes as stated in the Home Office Endorsement, where state law
permits corrections and additions.
(e) Policy Delivery Requirements: No insurance contract will take effect:
(a) until a policy is delivered to the Proposed Owner(s); (b) until
the full premium is paid to the Company in cash; (c) unless the
health and insurability of any person proposed for insurance have
not changed since the date of this application.
(f) I have read, or have had read to me the completed application. I
realize that any false statement or misrepresentation therein may
result in loss of coverage under the policy(ies).
If you are making a change to your existing policy, the previous agreements
in addition to the following agreements apply:
(a) If the insurance applied for herein is intended to replace other
insurance with the Company, the policy(ies) being replaced will
terminate on the first moment of the date coverage becomes effective
under the policy(ies) applied for;
(b) Retention of any policy(ies) or instrument(s) by the owner(s) indicates
owner's (s') approval and ratification;
(c) Until a change is completed in the Home Office, I will continue to
receive any premium or other notices for the original policy(ies) that
would ordinarily be sent under the Company's routine billing procedures.
Payment must be made to avoid the possibility of lapse.
THIS CONTRACT MAY BE SUBJECT TO TAXATION AS DESCRIBED IN THE INTERNAL
REVENUE CODE.
CERTIFICATION:
UNDER PENALTIES OF PERJURY, I CERTIFY THAT (1) THE NUMBER SHOWN ON
THIS FORM IS MY CORRECT TAXPAYER IDENTIFICATION NUMBER (OR, IF NO
NUMBER IS SHOWN, I AM WAITING FOR A NUMBER TO BE ISSUED TO ME);
AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE I HAVE NOT
BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM
SUBJECT TO BACKUP WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR THE IRS HAS NOTIFIED ME THAT I AM NO
LONGER SUBJECT TO BACKUP WITHHOLDING.
PLEASE NOTE: YOU MUST CROSS OUT AND INITIAL #2 ABOVE IF YOU HAVE
BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY
SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER
REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY
PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED
TO AVOID BACKUP WITHHOLDING.
- --------------------------------------------------------------------------------
NEXT PAGE MUST BE COMPLETED
- --------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 9
DECLARATIONS SECTION I - CONTINUED
- --------------------------------------------------------------------------------
I agree that the statements and answers in this application are true and
complete to the best of my knowledge and belief.
- --------------------------------------------------------------------------------
PROPOSED INSURED'S SIGNATURE Date Signed Location of Applicant-
Purchaser (Trustee)
X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Legal Name of Plan (as specified in plan document) SIGNATURE OF PLAN TRUSTEE
X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INDIVIDUAL OWNER(S) (OTHER THAN INSURED) OR OFFICER IF CORPORATE OWNER
- --------------------------------------------------------------------------------
SIGNATURE SIGNATURE
X X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CORPRATION OWNER
- --------------------------------------------------------------------------------
Full name of Corporation Owner AUTHORIZED SIGNATURE Title
X
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
I certify that I have truly and accurately recorded on all parts of this
application the information supplied by the applicant.
X
-------------------------------------------
SIGNATURE OF LICENSED AGENT
(If not yet appointed, do not sign.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR HOME OFFICE USE ONLY
- --------------------------------------------------------------------------------
Date change was completed President's signature
X
General American Life Insurance Company
P.O. Box 396, St. Louis, Missouri 63166
- --------------------------------------------------------------------------------
939424
(9/96)
<PAGE> 10
---------
MIB
---------
GENERAL AMERICAN LIFE INSURANCE COMPANY
ST. LOUIS, MISSOURI
AUTHORIZATION TO OBTAIN AND DISCLOSE INFORMATION
I authorize General American Life Insurance Company, its agents, employees,
reinsurers, insurance support organizations and other representatives to
obtain information about me in order to evaluate this application. This
information may be about: (a) age; (b) medical history, condition and care;
(c) physical and mental health; (d) occupation; (e) income; (f) avocations;
(g) driving record; (h) other personal characteristics; and (i) other
insurance. It includes information about the use of alcohol, drugs and
tobacco.
I authorize any physician, health care professional, hospital, clinic, medical
facility, the Veterans Administration, the MIB, Inc., employer, consumer
reporting agency or other insurance company, to release information about me
to General American Life Insurance Company on receipt of this Authorization.
I also authorize all said sources, except MIB, Inc., to give such records or
knowledge to any agency or representative employed by General American Life
Insurance company to collect and transmit such information. General American
Life Insurance Company or its representative(s) may also release this
information about me to its reinsurer, to the MIB, Inc., or to another
insurance company to whom I have applied or to whom a claim has been made.
No other release may be made except as allowed by law or as I further
authorize.
This form is valud for 30 months from the date it is signed. I have received
the Notice of Information Practices, which includes the Medical Information
Bureau and Fair Credit Reporting Act notices. I authorize General American
Life Insurance Company to obtain an investigative consumer report on me.
A photographic copy of this is as valid as the original. I have the right to
receive a copy of this if I ask for it.
- ------------------------------------- ------------------------------------
Date Print Name of Insured
X
- ------------------------------------- ------------------------------------
Witness SIGNATURE OF INSURED
Send Authorization to Home Office
939424
(9/96)
<PAGE> 11
- -------------------------------------------------------------------------------
SOLICITING AGENT'S CERTIFICATE SAC
- -------------------------------------------------------------------------------
1. / / To the best of my knowledge, this is a replacement.
(Complete and submit required papers.)
/ / To the best of my knowledge, this is not a replacement.
- -------------------------------------------------------------------------------
2. (a) Did you deliver "Notice of Information Practices" and the explanation
of the Medical Information Bureau to the Insured? / / Yes / / No
(b) Did you deliver the current Prospectus and were all of the written
sales materials used printed by General American Life Insurance
Company? / / Yes / / No
(For FPVL only)
(c) Do you believe that the policy applied for is a suitable purchase
for the applicant under the policy? / / Yes / / No
(For FPVL only)
X
---------------------------------------
SIGNATURE OF SOLICITING AGENT
- -------------------------------------------------------------------------------
3. (a) Names and Codes of Agents to be credited with production. Include
percentage split. If not yet appointed or licensed in the jurisdiction
where this application was signed - do not sign.
_________ % Agent ____________________ Code ____________________
_________ % Agent ____________________ Code ____________________
_________ % Agent ____________________ Code ____________________
_________ % Agent ____________________ Code ____________________
- -------------------------------------------------------------------------------
(b) Annualized commission / / Yes / / No
X
---------------------------------------
SIGNATURE OF GENERAL AGENT
(MUST BE SIGNED IF "YES")
- -------------------------------------------------------------------------------
4. Purpose of Sale: / / Estate Planning
/ / Tax Purposes
/ / Family Protection
/ / Retirement
/ / Key Man
- -------------------------------------------------------------------------------
ATTACH AGENT LABEL ONLY FOR AGENT TO BE CREDITED WITH PRODUCTION
- - DO NOT ATTACH ADDITIONAL AGENT OR GENERAL AGENT LABELS UNLESS IT IS YOUR
INTENTION TO SPLIT COMMISIONS.
- ---------------------------------------- -----------------------------------
- ---------------------------------------- -----------------------------------
- ---------------------------------------- -----------------------------------
- ---------------------------------------- -----------------------------------
- -------------------------------------------------------------------------------
939424
(9/96)
</TABLE>
<PAGE> 1
Exhibit #5
The Board of Directors
General American Life Insurance Company:
Re: "Joint and Survivor Variable
Universal Life 98"
We consent to the use of our reports included herein and to the reference to
our firm under the heading "Experts" in the Registration Statement and
Prospectus for General American Separate Account Eleven. Our report on
the consolidated financial statements of General American Life Insurance
Company and subsidiaries 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 in 1996.
KPMG Peat Marwick LLP
St. Louis, Missouri
July 14, 1998
