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File No. 333-07465
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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
A. Exact name of trust: Separate Account VL I
B. Name of depositor: Hartford Life Insurance Company
C. Complete address of depositor's principal executive offices:
P.O. Box 2999
Hartford, CT 06104-2999
D. Name and complete address of agent for service:
Margaret E. Hankard, Esq.
ITT Hartford Life Insurance Companies
P.O. Box 2999
Hartford, CT 06104-2999
E. Title and amount of securities being registered:
Flexible premium variable life insurance policies. Pursuant to Rule 24f-2
under the Investment Company Act of 1940, the Registrant has registered an
indefinite amount of securities.
F. Proposed maximum aggregate offering price to the public of the securities
being registered:
Not yet determined.
G. Amount of filing fee: Paid
H. Approximate date of proposed public offering:
As soon as practicable after the effective date of this registration
statement.
The registrant hereby represents that it is relying on Section (13)(i)(B) of
Rule 6e-3(T).
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The Registrant hereby amends this Registration Statement on such date 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 until the Registration Statement shall become effective on such
date as the Commission, acting pursuant to said Section 8(a), may determine.
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RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND PROSPECTUS
ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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1. Cover page
2. Cover page
3. Not applicable
4. The Company; Distribution of the Policies
5. Summary - Separate Account VL I; Separate
Account VL I - General
6. Separate Account VL I - General
7. Not required by Form S-6
8. Not required by Form S-6
9. Legal Proceedings
10. Summary; Separate Account VL I - Funds;
The Policy - Application for a Policy;
Detailed Description of Policy Benefits and
Provisions; Other Matters - Voting Rights,
Dividends
11. Summary; Separate Account VL I - Funds
12. Summary; Separate Account VL I - Funds
13. Deductions and Charges from the Account
Value; Distribution of the Policies; Federal
Tax Considerations
14. Detailed Description of Policy Benefits and
Provisions - Application for a Policy
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ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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15. Detailed Description of Policy Benefits and
Provisions - Allocation of Premium Payments
16. Separate Account VL I - Funds; Detailed
Description of Policy Benefits and
Provisions - Allocation of Premium Payments
17. Summary; Detailed Description of Policy
Benefits and Provisions - Cash Value and
Amount Payable on Surrender of the Policy,
The Right to Examine or Exchange the Policy
and Surrender/Continuation Options.
18. Separate Account VL I - Funds; Deduction and
Charges from the Account Value; Federal Tax
Considerations
19. Other Matters - Statements to Policy Owners
20. Not applicable
21. Detailed Description of Policy Benefits and
Provisions - Policy Loans
22. Not applicable
23. Safekeeping of the Separate Account Assets
24. Other Matters - Assignment
25. The Company
26. Not applicable
27. The Company
28. The Company; Management
29. The Company
30. Not applicable
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ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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31. Not applicable
32. Not applicable
33. Not applicable
34. Not applicable
35. Distribution of the Policies
36. Not required by Form S-6
37. Not applicable
38. Distribution of the Policies
39. The Company; Distribution of the Policies
40. Not applicable
41. The Company; Distribution of the Policies
42. Not applicable
43. Not applicable
44. Detailed Description of Policy Benefits and
Provisions - Allocation of Premium Payments
45. Not applicable
46. Detailed Description of Policy Benefits and
Provision - Cash Value
47. Separate Account VL I - Funds
48. Cover page; The Company
49. Not applicable
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ITEM NO. OF
FORM N-8B-2 CAPTION IN PROSPECTUS
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50 Separate Account VL I - General
51. Summary; The Company; Detailed Description
of Policy Benefits and Provisions; Other
Matters - Beneficiary
52. Separate Account VL I - Funds, Investment
Advisers
53. Federal Tax Considerations
54. Not applicable
55. Not applicable
56. Not required by Form S-6
57. Not required by Form S-6
58. Not required by Form S-6
59. Not required by Form S-6
<PAGE>
STAG VARIABLE LIFE ARTISAN
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY
HARTFORD LIFE INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CONNECTICUT 06104-2999
[LOGO] TELEPHONE: 800-231-5453
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This Prospectus describes a flexible premium variable life insurance policy (the
"Policy") offered by Hartford Life Insurance Company ("Hartford Life") to
applicants generally between ages 0 and 80. The Policy allows considerable
flexibility in selecting the timing and amount of premium payments for the
chosen amount of Death Benefit.
The Policy provides for a Death Benefit payable at the death of the Insured. The
Policy Owner may select one of three Death Benefit Options; a level amount equal
to the Face Amount ("Option A"), a variable amount equal to the Face Amount plus
the Account Value ("Option B"), or an increasing amount equal to the Face Amount
plus a return of premium ("Option C"). The required minimum initial Face Amount
is generally $25,000.
Under all three options, the Policy has Account Values which increase with the
payment of each premium and which decrease to reflect fees and charges made by
Hartford Life. These fees and charges vary depending on such factors as the Face
Amount, the age of the Insured and the level of the premium paid. The Account
Value of a Policy will fluctuate to reflect the investment experience of the
Funds to which the premium payment(s) has been allocated. The Policy Owner bears
the investment risk for all amounts so allocated.
If a Policy is surrendered during the first two Policy Years, the Cash Surrender
Value may be adjusted upward to reflect a reduced Surrender Charge.
There is no guaranteed minimum Account Value for a Policy. However, if the Death
Benefit guarantee is in effect (see "Death Benefit" on page 12), the Policy will
not lapse due to poor investment performance.
The initial premium will be allocated to Hartford Money Market Sub-Account and
after the Right to Examine Period has expired, to one or more of the
Sub-Accounts or to the Fixed Account as specified in the Policy Owner's
application. The Funds underlying the Sub-Accounts presently are: Hartford
Advisers Fund, Inc., Hartford Bond Fund, Inc., Hartford Capital Appreciation
Fund, Inc., Hartford Dividend and Growth Fund, Inc., Hartford Index Fund, Inc.,
Hartford International Opportunities Fund, Inc., Hartford Mortgage Securities
Fund, Inc., Hartford Stock Fund, Inc., and HVA Money Market Fund, Inc. managed
by Hartford Investment Management Company (the "Hartford Funds"); PCM
Diversified Income Fund, PCM Global Growth Fund, PCM Growth and Income Fund, PCM
High Yield Fund, PCM Money Market Fund, PCM New Opportunities Fund, PCM Global
Asset Allocation Fund, PCM U.S. Government and High Quality Bond Fund, PCM
Utilities Growth and Income Fund, and PCM Voyager Fund managed by Putnam
Investment Management, Inc. (the "Putnam Funds"); and the Equity-Income
Portfolio, Overseas Portfolio and Asset Manager Portfolio (the "Fidelity Funds")
managed by Fidelity Management & Research Company.
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IT MAY NOT BE ADVANTAGEOUS TO PURCHASE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
AS A REPLACEMENT FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
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THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE
APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS. ALL
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1996
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2 Hartford Life Insurance Company
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TABLE OF CONTENTS
<TABLE>
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SPECIAL TERMS......................................................... 2
SUMMARY............................................................... 6
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS................ 9
General............................................................. 9
Premium............................................................. 9
Premium Payment Flexibility....................................... 9
Allocation of Premium Payments.................................... 9
Accumulation Units................................................ 9
Accumulation Unit Values.......................................... 10
Premium Limitation................................................ 10
Account Values...................................................... 10
Amount Payable on Surrender of the Policy......................... 10
Sales Load Refund................................................. 10
Withdrawals....................................................... 10
Transfers of Account Value.......................................... 11
Amount and Frequency of Transfers................................. 11
Transfers to or from Sub-Accounts................................. 11
Transfers from the Fixed Account.................................. 11
Policy Loans........................................................ 11
Preferred Loan.................................................... 11
Loan Interest..................................................... 12
Credited Interest................................................. 12
Loan Repayments................................................... 12
Termination Due to Excessive Indebtedness......................... 12
Effect of Loans on Account Value.................................. 12
Death Benefit....................................................... 12
Death Benefit Options............................................. 12
Option Change..................................................... 12
Death Benefit Guarantee........................................... 12
Minimum Death Benefit............................................. 13
Increases and Decreases in Face Amount............................ 13
Benefits at Maturity................................................ 13
Lapse and Reinstatement............................................. 13
Policy Lapse and Grace Period..................................... 13
Death Benefit Guarantee Default and Grace Period.................. 14
Reinstatement..................................................... 14
The Right to Examine or Exchange the Policy......................... 14
Withdrawal.......................................................... 14
Administrative Expense Surrender Charge........................... 14
Sales Surrender Charge............................................ 15
Valuation of Payments and Transfers................................. 15
Application for a Policy............................................ 15
Reduced Charges for Eligible Groups................................. 15
Deductions from the Premium......................................... 16
Premium Tax Charge and Federal Tax Charge......................... 16
Front End Sales Load.............................................. 16
Examples of Front End Sales Loads/Impact of Refund of Sales
Load............................................................. 16
Deductions and Charges from the Account Value....................... 17
Monthly Deduction Amounts......................................... 17
Charges Against the Funds......................................... 18
Taxes............................................................. 20
THE COMPANY........................................................... 20
</TABLE>
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HARTFORD LIFE INSURANCE COMPANY 3
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<TABLE>
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PAGE
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SEPARATE ACCOUNT VL I................................................. 20
General............................................................. 20
Funds............................................................... 20
Hartford Funds.................................................... 20
Putnam Funds...................................................... 21
Fidelity Funds.................................................... 22
Investment Adviser................................................ 22
Hartford Funds.................................................... 22
Putnam Funds...................................................... 23
Fidelity Funds.................................................... 23
THE FIXED ACCOUNT..................................................... 23
OTHER MATTERS......................................................... 24
Voting Rights....................................................... 24
Statements to Policy Owners......................................... 24
Limit on Right to Contest........................................... 24
Misstatement as to Age.............................................. 24
Payment Options..................................................... 24
Beneficiary......................................................... 25
Assignment.......................................................... 25
Dividends........................................................... 25
SUPPLEMENTAL BENEFITS................................................. 25
Maturity Date Extension Rider....................................... 25
Term Insurance Rider................................................ 25
Deduction Amount Waiver Rider....................................... 25
Waiver of Specified Amount Disability Benefit Rider................. 25
Accidental Death Benefit Rider...................................... 26
EXECUTIVE OFFICERS AND DIRECTORS...................................... 26
DISTRIBUTION OF THE POLICY............................................ 28
SAFEKEEPING OF SEPARATE ACCOUNT VL I'S ASSETS......................... 28
FEDERAL TAX CONSIDERATIONS............................................ 28
General............................................................. 28
Taxation of Hartford Life and the Separate Account.................. 28
Income Taxation of Contract Benefits................................ 28
Modified Endowment Contracts........................................ 29
Estate and Generation Skipping Taxes................................ 29
Diversification Requirements........................................ 29
Ownership of Assets in the Separate Account......................... 30
Life Insurance Purchased for Use in Split Dollar Arrangements....... 30
Federal Income Tax Withholding...................................... 30
Non-Individual Ownership of Contracts............................... 30
Other Tax Considerations............................................ 30
Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations....................................................... 30
LEGAL PROCEEDINGS..................................................... 31
LEGAL MATTERS......................................................... 31
EXPERTS............................................................... 31
REGISTRATION STATEMENT................................................ 31
APPENDIX A -- ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES AND CASH
SURRENDER VALUES.................................................... 32
FINANCIAL STATEMENTS.................................................. 42
</TABLE>
THE POLICY MAY NOT BE 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 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 ON.
<PAGE>
4 Hartford Life Insurance Company
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: An amount used to determine certain Policy benefits and charges
equal to the total of all amounts in the Fixed Account, the Loan Account and the
Sub-Accounts.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
CASH SURRENDER VALUE: The Cash Value less all Indebtedness.
CASH VALUE: The Account Value less any applicable Surrender Charges.
CODE: The Internal Revenue Code of 1986, as amended.
COST OF INSURANCE: An amount deducted as part of the Monthly Deduction Amount to
help cover Hartford Life's anticipated mortality costs and other expenses.
CUMULATIVE DEATH BENEFIT GUARANTEE PREMIUM: The premium required to maintain the
Death Benefit guarantee.
DATE OF ISSUE: The date from which the Suicide and Incontestability provisions
are measured.
DEATH BENEFIT: On the Policy Date, the Death Benefit equals the Face Amount.
Thereafter, it may change in accordance with the terms of the Death Benefit
Option provision, the Minimum Death Benefit provision, the Death Benefit
Guarantee provision and the Withdrawals provision.
DEATH BENEFIT GUARANTEE PREMIUM: The amount of monthly premium shown in the
Policy's specifications page required to keep the Death Benefit guarantee
available and used to calculate the Cumulative Death Benefit Guarantee Premium.
DEATH BENEFIT OPTION: The Death Benefit Option in effect determines how the
Death Benefit is calculated. The three Death Benefit Options provided are
described in the Death Benefit section of this Prospectus.
DEATH PROCEEDS: The amount which We will pay on the death of the Insured. This
amount equals the Death Benefit less any Indebtedness and less any due and
unpaid Monthly Deduction Amount occurring during a Grace Period.
FACE AMOUNT: On the Policy Date, the Face Amount equals the initial Face Amount.
The Face Amount may be increased or decreased, in accordance with the terms of
the Policy.
FIXED ACCOUNT: Portion of Account Value invested in the General Account of
Hartford Life.
FIXED ACCOUNT MINIMUM CREDITED RATE: The minimum rate credited to amounts
allocated to the Fixed Account.
FUNDS: The registered open-end management investment companies in which assets
of the Separate Account may be invested.
GENERAL ACCOUNT: All assets of Hartford Life other than those allocated to its
separate accounts.
GRACE PERIOD: The 61 day period between the day Your policy goes into default
and the day on which Your policy terminates.
IN WRITING: In a written form satisfactory to Us.
INDEBTEDNESS: All loans taken on the Policy, plus any interest due or accrued
minus any loan repayments.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the age of the Insured's on his/her last
birthday.
HARTFORD LIFE: Hartford Life Insurance Company.
LOAN ACCOUNT: An account established for any amounts transferred from the Fixed
Account and Sub-Accounts as a result of loans. Amounts are held as collateral
and are credited with interest at the Fixed Account Minimum Credited Rate.
Amounts are not subject to the investment experience of the Separate Account.
MONTHLY ACTIVITY DATE: The Policy Date and the same date in each succeeding
month as the Policy Date except that, whenever the Monthly Activity Date falls
on a date other than a Valuation Day, the Monthly Activity Date will be deemed
the next Valuation Day.
MONTHLY DEDUCTION AMOUNT: The charges deducted from the Account Value on the
Monthly Activity Date.
NATIONAL SERVICE CENTER: Located in Minneapolis, Minnesota.
NET PREMIUM: The amount of premium credited to the Account Value. It is the
premium paid minus any deductions from premium.
OPTION C LIMIT: The maximum amount that will be returned in addition to the Face
Amount under the Option C (Return of Premium) Death Benefit. See the Policy's
specifications page .
PLANNED PREMIUM: The amount of premium that You intend to pay as indicated on
the application and shown on the Policy's specifications page .
POLICY: A flexible premium variable life insurance policy issued by Hartford
Life, as described in this Prospectus.
POLICY ANNIVERSARY: An anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
determined.
POLICY OWNER: The person having rights to benefits under the Policy during the
lifetime of the Insured; the Policy Owner may or may not be the Insured.
POLICY YEARS: Annual periods computed from the Policy Date.
PREFERRED LOAN: A portion of the Indebtedness on which a lower interest rate is
charged.
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HARTFORD LIFE INSURANCE COMPANY 5
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PRO RATA BASIS: An allocation method based on the proportion of the Account
Value in the Fixed Account and each Sub-Account.
SCHEDULED MATURITY DATE: The date on which the Policy will mature, unless
extended by rider.
SEPARATE ACCOUNT: An account established by Hartford Life to separate the assets
funding the Policy from other assets of Hartford Life; in this case, "Separate
Account VL I."
SUB-ACCOUNT: The subdivisions of the Separate Account.
SURRENDER CHARGE: A charge that may be assessed if the Face Amount is decreased
or You surrender the Policy.
VALUATION DAY: Every day the New York Stock Exchange is open for trading. The
value of the Separate Account is determined at the close of the New York Stock
Exchange (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
YOU, YOUR: The Owner of the Policy.
WE, US, OUR: Hartford Life Insurance Company.
<PAGE>
6 Hartford Life Insurance Company
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SUMMARY
THE POLICY
The flexible premium variable life insurance Policy offered by this
Prospectus is funded by a Fixed Account and Separate Account VL I, a separate
account established by Hartford Life pursuant to Connecticut insurance law and
organized as a unit investment trust registered under the Investment Company Act
of 1940. Separate Account VL I is presently comprised of twenty-two sub-accounts
(the "Sub-Accounts" and each individually a "Sub-Account"), each of which
invests exclusively in one of the underlying Funds. If an initial premium is
submitted with an application for a Policy, it will be allocated to the Hartford
Money Market Sub-Account. At a later date, the values in the Hartford Money
Market Sub-Account will be allocated to one or more of the Sub-Accounts or the
Fixed Account as specified in the Policy Owner's application. This later date is
the latest of: (1) 45 days after the application is signed; (2) 10 days after We
mail or personally deliver a Notice of Withdrawal Right; (3) 10 days after We
receive the premium; and (4) the date We receive the final requirement to put
the Policy in force. The Policy is credited with units ("Accumulation Units") in
each selected Sub-Account, the assets of which are invested in the applicable
Fund. A Policy Owner may transfer the funds among the Sub-Accounts and the Fixed
Account subject to a transfer charge. See "Transfers of Account Value" of
Detailed Description of Policy Benefits and Provisions, page .
The Policy is first and foremost a life insurance policy with death
benefits, cash values, and other features traditionally associated with life
insurance. The Policy is called "flexible premium" because, once the desired
level and pattern of death benefits have been determined, you have considerable
flexibility in choosing the timing and amount of premium to be paid. The Policy
is called "variable" because, unlike the fixed benefits of an ordinary whole
life insurance policy, the Account Value will, and the Death Benefit may,
increase or decrease depending on the investment experience of the Funds to
which the premium payment(s) has been allocated.
POLICY DESIGN OPTIONS
The Policy is designed to be flexible to give You the ability to select
options that are tailor-made for Your specific life insurance needs.
The Policy design options fall into three major categories:
1. Death Benefit Options -- These allow You to select various levels and
patterns of Death Benefits.
2. Investment Options -- Currently, the Policy offers twenty-two investment
options from which to choose. You can allocate Your Account Value among up
to nine of these options. (Hartford Life reserves the right to increase the
number of allocable investment options to more than nine.) These include the
twenty-two variable Sub-Accounts and the Fixed Account.
3. Premium Options -- You have the flexibility to choose, within limits, the
amount of and frequency of premium payments.
DEATH BENEFIT
The Policy features three Death Benefit Options. The Death Benefit can be
level and equal to the Face Amount ("Option A"), fluctuate and equal the Face
Amount plus Return of Account Value ("Option B") or increase and equal the Face
Amount plus the sum of premium paid, subject to the Option C Limit ("Option C").
At the death of the Insured, We will pay the Death Proceeds to the Beneficiary.
The Death Proceeds equal the Death Benefit less any Indebtedness under the
Policy and less any due and unpaid Monthly Deduction Amount occurring during a
Grace Period. See "Detailed Description of Policy Benefits and Provision --
Death Benefit," page .
PREMIUM
You have considerable flexibility as to when and in what amounts You pay
premium. Prior to issue, You choose a Planned Premium, within a range determined
by Hartford Life based on the Face Amount and sex of the Insured (except where
unisex rates apply), Issue Age and risk classification.
The Policy will not lapse as long as the Cash Surrender Value is sufficient
to cover the Monthly Deduction Amounts or the Death Benefit guarantee is
available. See "Lapse and Reinstatement", page .
The minimum premium is $50. We reserve the right to refund the excess
premium that would cause the Policy to fail to meet the definition of life
insurance under the Internal Revenue Code of 1986, as amended. We reserve the
right to require evidence of insurability for any premium that results in an
increase in the Death Benefit greater than the amount of the premium. Any
premium in excess of $1,000,000 is subject to Hartford Life's approval.
There are circumstances, usually if a Policy Owner wants to prefund future
benefits in seven years or less, when the Policy may become a Modified Endowment
Contract under federal tax law. If it does, loans and other pre-death
distributions are includable in gross income on an income-first basis. A 10%
penalty tax may be imposed on income distributed before the Policy Owner attains
age 59 1/2. You
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HARTFORD LIFE INSURANCE COMPANY 7
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are advised to consult a qualified tax adviser before taking steps that may
affect whether the Policy becomes a Modified Endowment Contracts. See "Federal
Tax Considerations, Modified Endowment Contracts" for a discussion of the "seven
pay test", page .
SEPARATE ACCOUNT VL I
Separate Account VL I is a separate account established by Hartford Life
pursuant to the insurance laws of the State of Connecticut and organized as a
registered unit investment trust under the Investment Company Act of 1940.
Separate Account VL I meets the definition of "separate account" under federal
securities law. Separate Account VL I is comprised of Sub-Accounts, each of
which invests exclusively in one of the Funds. Each Hartford Fund is organized
as a corporation under the laws of the State of Maryland and is a diversified
open-end management investment company registered under the Investment Company
Act of 1940. The Putnam Funds are organized as Putnam Capital Manager Trust, a
Massachusetts business trust organized on September 24, 1987, and is an
open-end, series investment company with multiple portfolios or funds registered
under the Investment Company Act of 1940. The Fidelity Funds involve two
diversified open-end management investment companies, each with multiple
portfolios and organized as a Massachusetts business trust. The Equity-Income
Portfolio and Overseas Portfolio are portfolios of the Variable Insurance
Products Fund, organized on November 13, 1981. The Asset Manager Portfolio is a
portfolio of the Variable Insurance Products Fund II, organized on March 21,
1988. Registration under the Investment Company Act of 1940 does not involve
supervision of the management or investment practices or policies by the
Commission. The shares of the Funds are sold to Separate Account VL I and to
other separate accounts of Hartford Life or its affiliates which fund similar
annuity or life insurance products.
Currently, the Funds are Hartford Advisers Fund, Inc., Hartford Bond Fund,
Inc., Hartford Capital Appreciation Fund, Inc., Hartford Dividend and Growth
Fund, Inc., Hartford Index Fund, Inc., Hartford International Opportunities
Fund, Inc., Hartford Mortgage Securities Fund, Inc., Hartford Stock Fund, Inc.,
and HVA Money Market Fund, Inc.; PCM Diversified Income Fund, PCM Global Growth
Fund, PCM Growth and Income Fund, PCM High Yield Fund, PCM Money Market Fund,
PCM New Opportunities Fund, PCM Global Asset Allocation Fund, PCM U.S.
Government and High Quality Bond Fund, PCM Utilities Growth and Income Fund, and
PCM Voyager Fund; and the Equity-Income Portfolio, Overseas Portfolio and Asset
Manager Portfolio. Applicants should read the prospectuses for each of the Funds
accompanying this Prospectus in connection with the purchase of a Policy. The
investment objectives of each of the Funds are as set forth in "Separate Account
VL I," page .
The investment adviser for the Hartford Funds is The Hartford Investment
Management Company, a wholly-owned subsidiary of Hartford Life Insurance
Company. The Hartford Investment Management Company retains a sub-investment
adviser with respect to some of the Funds. The Putnam Funds are advised by
Putnam Investment Management, Inc., a subsidiary of The Putnam Investments, Inc.
The Fidelity Funds are managed by Fidelity Management & Research Company. See
"Separate Account VL I," page .
FIXED ACCOUNT
Premium payments and Account Values allocated to the Fixed Account become
part of the general assets of Hartford Life. Hartford Life invests the assets of
the General Account in accordance with applicable law governing the investments
of insurance company general accounts.
DEDUCTIONS FROM THE PREMIUM
Before allocating the premium to the Account Value, a deduction as a
percentage of premium is made for the premium tax and federal tax charge and
front-end sales load. The amount of each premium allocated to the Account Value
is Your Net Premium.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE
We deduct, as a premium tax charge, a percentage of each premium to cover
premium-based taxes assessed against Hartford Life by a state or other
governmental entity. This percentage will vary depending on the tax rates in
effect there and is based on the actual tax imposed. The range is generally
between 0% and 3.5%.
We also deduct a current charge of 1.25% of each premium for federal taxes
imposed under Section 848 of the Code.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium payment. The
current and maximum front-end sales load for premium is 5.0% in the first Policy
Year and 2.0% in Policy Years 2 through 10. After Policy Year 10, the front-end
sales load is currently 0%. We reserve the right to charge a maximum of 2.0%.
DEDUCTIONS AND CHARGES FROM THE ACCOUNT VALUE
On each Monthly Activity Date, We will subtract the Monthly Deduction Amount
from Your Account Value. This will be taken on a Pro Rata Basis from the Fixed
Account and Sub-Accounts. The Monthly Deduction Amount equals:
1. the Cost of Insurance; plus
<PAGE>
8 HARTFORD LIFE INSURANCE COMPANY
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2. the Monthly Administrative Charge; plus
3. the Mortality and Expense Risk Charge; plus
4. the charges for additional benefits provided by rider, if any.
Hartford Life may also set up a provision for income taxes against the
assets of Separate Account VL I. See "Deductions and Charges from the Account
Value," page and "Federal Tax Considerations," page .
Applicants should review the prospectuses for the Funds which accompany this
Prospectus for a description of the charges assessed against the assets of each
of the Funds.
ACCOUNT VALUE
As with many other types of insurance policies, each Policy will have an
Account Value. The Account Value of a Policy will increase to reflect interest
credited to the Fixed Account and Loan Account (when applicable) and any premium
payments. The Account Value of a Policy will decrease to reflect deductions for
the Monthly Deduction Amount and any withdrawals. The Account Value of a Policy
will vary to reflect the investment experience of the underlying Funds. There is
no minimum guaranteed Account Value and the Policy Owner bears the risk of the
investment in the Funds. However, if the Death Benefit guarantee is available,
the Policy will not lapse due to poor investment performance. See "Detailed
Description of the Policy Benefits and Provisions -- Account Values," page .
POLICY LOAN
A Policy Owner may obtain a cash loan from Hartford Life. The loan is
secured by the Policy. At the time a loan is requested, the Indebtedness
(including the currently applied for loan) may not exceed the Cash Surrender
Value. See "Detailed Description of Policy Benefits and Provisions -- Policy
Loans," page .
CHARGES AGAINST THE FUNDS
Separate Account VL I purchases shares of the Funds at net asset value. The
net asset value of the Fund shares reflects investment advisory fees and
administrative and other expenses already deducted from the assets of the Funds.
These charges are described herein. See Charges Against the Funds, page .
The following table shows total fund operating expenses in 1995 for the
Funds:
<TABLE>
<CAPTION>
TOTAL FUND
MANAGEMENT OTHER OPERATING
FUND NAME FEES EXPENSES EXPENSES
------------------------------ ----------- --------- ----------
<S> <C> <C> <C>
Hartford Advisers Fund........ 0.625 % 0.021 % 0.646 %
Hartford Capital Appreciation
Fund......................... 0.655 % 0.021 % 0.676 %
Hartford Bond Fund............ 0.497 % 0.028 % 0.525 %
Hartford Dividend and Growth
Fund......................... 0.750 % 0.023 % 0.773 %
Hartford Index Fund........... 0.375 % 0.014 % 0.389 %
Hartford International
Opportunities Fund........... 0.713 % 0.147 % 0.860 %
Hartford Mortgage Securities
Fund......................... 0.425 % 0.041 % 0.466 %
Hartford Stock Fund........... 0.455 % 0.020 % 0.475 %
HVA Money Market Fund......... 0.421 % 0.025 % 0.446 %
PCM Diversified Income Fund... 0.70 % 0.15 % 0.85 %
PCM Global Asset Allocation
Fund......................... 0.70 % 0.14 % 0.84 %
PCM Global Growth Fund........ 0.60 % 0.15 % 0.75 %
PCM Growth and Income Fund.... 0.52 % 0.05 % 0.57 %
PCM High Yield Fund........... 0.70 % 0.09 % 0.79 %
PCM Money Market Fund......... 0.45 % 0.12 % 0.57 %
PCM New Opportunities Fund.... 0.70 % 0.14 % 0.84 %
PCM US Gov't and High Quality
Bond Fund.................... 0.61 % 0.09 % 0.70 %
PCM Utilities Growth and
Income Fund(1)............... 0.70 % 0.08 % 0.78 %
PCM Voyager Fund.............. 0.62 % 0.06 % 0.68 %
Fidelity Equity-Income
Portfolio.................... 0.51 % 0.10 % 0.61 %
Fidelity Overseas
Portfolio(2)................. 0.76 % 0.15 % 0.91 %
Fidelity Asset Manager
Portfolio(3)................. 0.71 % 0.08 % 0.79 %
</TABLE>
- ------------------------------
(1) On January 7, 1996, the trustees of Putnam Capital Manager Trust approved a
proposal to change the fees payable to Putnam Management under the Management
contract for PCM Utilities Growth and Income Fund. The proposed change is
subject to shareholder approval and will be submitted to shareholders at a
meeting scheduled for July 11, 1996. If the proposed change is approved by
shareholders, management fees for PCM Utilities Growth and Income Fund would
thereafter be paid at the following annual rates: 0.70% of the first $500
million of average net assets, 0.60% of the next $500 million, 0.55% of the next
$500 million, 0.50% of the next $5 billion, 0.475% of the next $5 billion,
0.455% of the next $5 billion, 0.44% of the next $5 billion, and 0.43% of any
excess thereafter. The proposed change would result in an increase in the fees
payable by the Fund based on its net assets as of December 31, 1995.
(2) FMR has voluntarily agreed to temporarily limit the Fidelity Overseas
Portfolio's operating expenses (as a percentage of the fund's average net
assets) to 1.50%.
(3) The expenses for the Fidelity Asset Manager Portfolio were reduced by use of
a portion of the brokerage commissions paid by the Fund. Without this reduction,
the Total Fund Operating Expenses would have been 0.81%. There is no guarantee
that any fee waivers and/or expense reimbursements will continue in the future.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An applicant has a limited right to return his or her Policy for
cancellation. If the applicant returns the Policy within: (1) ten days after
delivery of the Policy; (2) ten days after We mail or personally deliver a
Notice of Withdrawal Right; or (3) 45 days after completion of the application,
whichever is latest (subject to applicable state regulation), Hartford Life will
return to the applicant, within seven days thereafter, the greater of the
premium paid, less any Indebtedness, or the sum of (1) the Account Value, less
any
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 9
- --------------------------------------------------------------------------------
Indebtedness, on the date the returned Policy is received by Hartford Life or
its agent and (2) any deductions under Policy or by the Funds for taxes, charges
or fees.
In addition, once the Policy is in effect it may be exchanged during the
first 24 months after its Date of Issue for a non-variable life insurance policy
offered by Us on the life of the Insured without submitting proof of
insurability.
SURRENDER
At any time prior to the Scheduled Maturity Date, provided the Policy has a
Cash Surrender Value, you may surrender the Policy. During the first fifteen
(15) Policy Years, a Surrender Charge will apply. The Surrender Charge consists
of two component charges: administrative expenses surrender charge and a sales
surrender charge. See "Detailed Description of Policy Benefits and Provisions,"
and "Withdrawals", page .
TAX CONSEQUENCES
The current federal tax law generally excludes all death benefit payments
from the gross income of the Policy Beneficiary. See "Federal Tax
Considerations," page .
DETAILED DESCRIPTION OF POLICY BENEFITS AND PROVISIONS
GENERAL
This Prospectus describes a flexible premium variable life insurance policy
that has considerable flexibility in selecting the timing and amount of premium
payments.
PREMIUM
PREMIUM PAYMENT FLEXIBILITY
You have considerable flexibility as to when and in what amounts You pay
premium.
Prior to issue, You can choose a Planned Premium, within a range determined
by Hartford Life based on the Face Amount and the Insured's sex (except where
unisex rates apply), Issue Age and risk classification. We will send You premium
notices for Planned Premium. The notices may be sent on an annual, semi-annual
or quarterly basis. You may also have premium automatically deducted from Your
checking account on a monthly basis. The Planned Premium and payment mode You
selected are shown on the Policy's specifications page . You may change the
Planned Premium at any time, subject to Our minimum amount rules then in effect.
The Policy will not lapse as long as the Cash Surrender Value is sufficient
to cover the Monthly Deduction Amounts or the Death Benefit guarantee is
available. See also "Lapse and Reinstatement" on page for more details.
ALLOCATION OF PREMIUM PAYMENTS
The initial Net Premium will be allocated to the Hartford Money Market
Sub-Account on the later of the Policy Date or the date We receive the premium.
The value in this Hartford Money Market Sub-Account will then be allocated
to the Fixed Account and Sub-Accounts according to the premium allocation
specified in the application on the latest of: (1) 45 days after the application
is signed; (2) ten days after We receive the premium; (3) ten days after We mail
or personally deliver a Notice of Withdrawal Right; and (4) the date We receive
the final requirement to put the Policy in force ("free-look end date").
Any additional Net Premium received prior to the free-look end date will be
allocated to the Hartford Money Market Sub-Account.
You may change Your premium allocation In Writing. Portions allocated to the
Fixed Account and Sub-Accounts must be whole percentages. Subsequent Net Premium
will be allocated to the Fixed Account and Sub-Accounts according to Your most
recent instructions, subject to the following. Currently, the Account Value may
be allocated to no more than nine Sub-Accounts. Hartford Life reserves the right
to increase the number of allocable investment options beyond nine. If We
receive a premium and Your most recent allocation instructions would violate
this requirement, We will allocate the Net Premium to the Fixed Account and
Sub-Accounts on a Pro-Rata basis.
You will receive several different types of notification as to what Your
current premium allocation is. The initial allocation chosen by the Policy Owner
is shown in the Policy. Each transactional confirmation received after a premium
payment will show how that premium has been allocated. In addition, each
quarterly statement summarizes the current premium allocation in effect for that
Policy.
ACCUMULATION UNITS
Net Premium allocated to the Sub-Accounts are used to credit Accumulation
Units to those Sub-Accounts.
The number of Accumulation Units in each Sub-Account to be credited to a
Policy, including the initial allocation to Hartford Money Market Sub-Account
and the amount credited to the Fixed Account, will be determined first by
multiplying the Net Premium by the appropriate allocation percentage to
determine the portion to be invested in the Fixed Account or Sub-Account. Each
portion to be invested in a Sub-Account is then divided by the
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Accumulation Unit Value of that particular Sub-Account next computed following
receipt of the payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund. It will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a Net Investment Factor for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each of the Sub-Accounts is equal to the net asset value per share of the
corresponding Fund at the end of the Valuation Period (plus the per share amount
of any dividend or capital gain distributions paid by that Fund in the Valuation
Period then ended) divided by the net asset value per share of the corresponding
Fund at the beginning of the Valuation Period.
All valuations in connection with a Policy, e.g., with respect to
determining Account Value, in connection with Policy loans, or in calculation of
Death Benefits, or with respect to determining the number of Accumulation Units
to be credited to a Policy with each premium payment, other than the initial
premium payment, will be made on the date the request or payment is received by
Hartford Life at the National Service Center if such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which is a
Valuation Day.
PREMIUM LIMITATION
If a premium is received which would cause the Policy to fail to meet the
definition of a life insurance contract in accordance with the Internal Revenue
Code, We reserve the right to refund the excess premium. We will refund such
premium and interest thereon within 60 days after the end of a Policy Year.
We reserve the right to require evidence of insurability for any premium
that results in an increase in the Death Benefit greater than the amount of the
premium.
The minimum subsequent premium is $50.00. Any premium in excess of
$1,000,000 is subject to Hartford Life's approval.
ACCOUNT VALUES
The Policy will have an Account Value. There is no minimum guaranteed
Account Value. The Account Value of a Policy changes on a daily basis and will
be computed on each Valuation Day. The Account Value of a Policy will increase
to reflect interest credited to the Fixed Account and Loan Account (when
applicable) and any premium payments. The Account Value will decrease to reflect
deductions for the Monthly Deduction Amount and any withdrawals. The Account
Value will vary to reflect the investment experience of the underlying Funds.
The Account Value of a particular Policy is related to the net asset value
of the Funds associated with the Sub-Accounts, if any, to which premium payments
on the Policy have been allocated. The Account Value in the Sub-Accounts on any
Valuation Day is calculated by multiplying the number of Accumulation Units in
each Sub-Account as of the Valuation Day by the current Accumulation Unit Value
of that Sub-Account and then summing the result for all the Sub-Accounts. The
Account Value equals the Account Value in the Sub-Accounts plus the value of the
Fixed and Loan Accounts. The Cash Value equals the Account Value less any
applicable Surrender Charges. The Cash Surrender Value, which is the net amount
available upon surrender of the Policy, is the Cash Value less any Indebtedness.
See "Accumulation Unit Values," page .
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
As long as the Policy is in effect, a Policy Owner may elect, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), to fully surrender the Policy. Upon surrender, the Policy Owner
will receive the Cash Surrender Value determined as of the day Hartford Life
receives the Policy Owner's written request or the date requested by the Policy
Owner, whichever is later. The Cash Surrender Value equals the Cash Value less
any Indebtedness. The Policy will terminate on the date of receipt of the
written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later.
SALES LOAD REFUND
If a Policy is surrendered during the first two Policy Years, the Cash
Surrender Value may be adjusted upward to reflect a reduced Surrender Charge.
For purposes of this Policy, the reduction in Surrender Charge will be equal to
the excess, if any, of the sum of the actual front-end sales load and Sales
Surrender Charge to date over the sum of 30% of payments in aggregate amount
less than or equal to one Guideline Annual Premium plus 10% of payments in
aggregate amount greater than one Guideline Annual Premium but not more than two
Guideline Annual Premiums.
For purposes of this Policy, "Guideline Annual Premium" means the level
annual premium payment necessary to provide the future benefits under the Policy
through maturity, based on certain assumptions specified under the Federal
Securities laws. These assumptions include mortality charges based on the 1980
CSO Table, an assumed annual net rate of return of 5% per year, and deduction of
the fees and charges specified in the Policy. The Guideline Annual Premium is
only used in limiting front-end sales loads and Sales Surrender Charges.
WITHDRAWALS
One withdrawal is allowed each calendar month. The minimum withdrawal
allowed is $500. The maximum withdrawal is the Cash Surrender Value, less
$1,000. If the Death Benefit Option then in effect is Option A or Option C, the
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
Face Amount is decreased by an amount equal to the reduction in the Account
Value resulting from the withdrawal. The minimum Face Amount required after a
withdrawal is subject to Our rules then in effect. Unless specified otherwise,
the withdrawal will be deducted on a Pro Rata Basis from the Fixed Account and
the Sub-Accounts. Currently, Hartford Life does not impose a withdrawal charge.
However, Hartford Life reserves the right to impose a withdrawal charge of up to
$10.00.
In addition, a Surrender Charge will be deducted from the Account Value
equal to the proportion of the current Surrender Charge represented by the
amount of the withdrawal to the Account Value immediately prior to the
withdrawal.
Any decrease in the Face Amount resulting from a withdrawal may result in a
partial Surrender Charge. See "Increases and Decreases in Face Amount", page .
TRANSFERS OF ACCOUNT VALUE
AMOUNT AND FREQUENCY OF TRANSFERS
Upon request and as long as the Policy is in effect, You may transfer
amounts among the Fixed Account and Sub-Accounts. Transfers may be made by
written request or by calling toll free 1-800-231-5453. Transfers by telephone
may be made by the agent of record or by the attorney-in-fact pursuant to a
power of attorney. Telephone transfers may not be permitted in some states. The
policy of Hartford Life and its agents and affiliates is that they will not be
responsible for losses resulting from acting upon telephone requests reasonably
believed to be genuine. We will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine; otherwise, We may be liable
for any losses due to unauthorized or fraudulent instructions. The procedures We
follow for transactions initiated by telephone include requirements that callers
provide certain identifying information for themselves (if not the Policy Owner)
and the Policy Owner. All transfer instructions by telephone are tape recorded.
The amounts which may be transferred and the number of transfers will be
limited by Our rules then in effect.
Currently there are no restrictions on transfers other than those described
below. There is no charge currently for the first transfer in any calendar
month. Each transfer in excess of one per calendar month is subject to a
Transfer Charge of up to $25.
We reserve the right at a future date to limit the size of transfers and
remaining balances, and to limit the number and frequency of transfers.
TRANSFERS TO OR FROM SUB-ACCOUNTS
You may request to transfer some or all of your Account Value between the
Sub-Accounts. When You request a transfer, the number of Accumulation Units
credited to the Sub-Account from which the transfer was made will be reduced and
the number of Accumulation Units credited to the Sub-Account you requested will
be increased.
The amount of the increase or decrease will be determined by dividing:
1. the amount transferred by,
2. the Accumulation Unit Value for the respective Sub-Account determined as of
the next Valuation Day after We receive your transfer request.
TRANSFERS FROM THE FIXED ACCOUNT
In addition to the conditions above, transfers from the Fixed Account are
subject to the following:
1. the transfer must occur during the 30-day period following each Policy
Anniversary; and
2. if the Accumulated Value in Your Fixed Account exceeds $1,000, the amount
transferred in any Policy Year may be no larger than 25% of the Accumulated
Value in the Fixed Account on the date of transfer. We reserve the right to
modify the restrictions on transfers from the Fixed Account.
POLICY LOANS
As long as the Policy is in effect, a Policy Owner may obtain, without the
consent of the Beneficiary (provided the designation of Beneficiary is not
irrevocable), a cash loan from Hartford Life. The total Indebtedness at the time
of the new loan (including the accrued interest on prior loans plus the
currently applied for loan) may not exceed the Cash Surrender Value. The minimum
loan amount is $500.00.
The amount of each loan will be transferred on a Pro Rata Basis from the
Fixed Account and each of the Sub-Accounts (unless the Policy Owner specifies
otherwise) to the Loan Account. The Loan Account is a mechanism used to ensure
that any outstanding Indebtedness remains fully secured by the Account Value.
PREFERRED LOAN
If, at any time after the tenth Policy Anniversary, the Account Value
exceeds the total of all premium paid since issue, a Preferred Loan is
available. The amount available for a Preferred Loan is the amount by which the
Account Value exceeds total premium paid. The amount of the Loan Account which
equals a Preferred Loan will be credited with interest at a rate equal to the
Fixed Account Minimum Credited Rate. The amount of Indebtedness that qualifies
as a Preferred Loan is determined on each Monthly Activity
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Date. A lower interest is charged to Preferred Loans than to the rest of your
Indebtedness, if any.
LOAN INTEREST
Interest will accrue on Indebtedness on a daily basis. The table below shows
the interest rate We will charge on Your Indebtedness.
<TABLE>
<CAPTION>
FIXED ACCOUNT
MINIMUM
PORTION OF CREDITED RATE
POLICY YEAR INDEBTEDNESS PLUS
------------ -------------------------- -------------
<S> <C> <C>
1-10 All Indebtedness 2%
11 and later Preferred loans (if any) 0%
All Indebtedness in excess 1%
of Preferred Loans
</TABLE>
CREDITED INTEREST
Any amounts in the Loan Account will be credited with interest at a rate
equal to the Fixed Account Minimum Credited Rate.
LOAN REPAYMENTS
You can repay all or any part of the entire Indebtedness at any time while
Your Policy is in force. Each loan repayment must be at least $50. An amount
equal to the loan repayment will be deducted from the Loan Account and will be
allocated among the Fixed Account and Sub-Accounts in the same percentage as
premium are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Cash Value on any Monthly
Activity Date, the Policy will terminate. See "Lapse and Reinstatements," page .
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Accounts. In addition, the rate of interest
credited to the Fixed Account may be greater than the Fixed Account Minimum
Credited Rate. The longer a loan is outstanding, the greater the effect, whether
favorable or unfavorable, is likely to be. If the Fixed Account and the
Sub-Accounts earn more than the annual interest rate for funds held in the Loan
Account, a Policy Owner's Account Value will not increase as rapidly as it would
have had no loan been made. If the Sub-Accounts earn less than the Loan Account,
the Policy Owner's Account Value will be greater than it would have been had no
loan been made. Also, if not repaid, the aggregate amount of the outstanding
loan (i.e., the Indebtedness) will reduce the Death Proceeds and Cash Surrender
Value otherwise payable.
DEATH BENEFIT
The Policy provides for the payment of the Death Proceeds to the named
Beneficiary when the Insured dies. The Death Proceeds payable to the Beneficiary
equal the Death Benefit less any Indebtedness and less any due and unpaid
Monthly Deduction Amount occurring during a Grace Period. The Death Benefit
depends on the Death Benefit Option selected by You, the minimum Death Benefit
provision, and whether or not the Death Benefit guarantee is available. All or
part of the Death Proceeds may be paid in cash or applied under a "Payment
Option." See "Other Matters -- Payment Options," page .
DEATH BENEFIT OPTIONS
There are three Death Benefit Options: the Level Death Benefit Option
("Option A"), the Return of Account Value Death Benefit Option ("Option B") and
the Return of Premium Death Benefit Option ("Option C"). Subject to the minimum
Death Benefit described below, the Death Benefits under each option are:
1. Under Option A, the Death Benefit is equal to the Face Amount.
2. Under Option B, the Death Benefit is equal to the Face Amount plus the
Account Value.
3. Under Option C, the Death Benefit is equal to the Face Amount plus the
lesser of: (a) the sum of the premium paid; and (b) the Option C Limit.
OPTION CHANGE
You may change Your Death Benefit Option by notifying Us In Writing of the
change. Such change will become effective on the Monthly Activity Date following
the date we receive Your request. If a change to Option A is elected, the Face
Amount will become that amount available as a Death Benefit immediately prior to
the option change. If a change to Option B is elected, the Face Amount will
become that amount available as a Death Benefit immediately prior to the option
change, reduced by the then current Account Value. Changing your Death Benefit
Option may result in a Surrender Charge. (See "Decreases in Face Amount", page
.) You should consult a competent tax adviser regarding the possible adverse tax
consequences resulting from a change in your Death Benefit Option.
DEATH BENEFIT GUARANTEE
The Death Benefit guarantee will keep the Policy in force, regardless of the
Policy's investment performance as long as the following conditions are met:
1. the Policy is in the first ten Policy Years (except in certain states where
a period less than 10 years may apply); and
2. on each Monthly Activity Date during that period, the cumulative premium
paid into this Policy, less Indebtedness, less any withdrawals, equal or
exceed the Cumulative Death Benefit Guarantee premium on that date.
If the Face Amount has not been increased or decreased, the Cumulative Death
Benefit Guarantee Premium is:
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
1. the Cumulative Death Benefit Guarantee Premium on the previous Monthly
Activity Date; plus
2. the current Monthly Death Benefit Guarantee Premium shown on the Policy
specification page .
The Monthly Death Benefit Guarantee Premium will be adjusted to reflect any
increases or decreases in the Face Amount during the Death Benefit guarantee
period. We will send You a schedule showing the new Monthly Death Benefit
Guarantee Premium required for this period and the Death Benefit Guarantee
Premium received to date.
While the Death Benefit guarantee is available, the Death Benefit will be
the Face Amount, regardless of the Death Benefit Option.
MINIMUM DEATH BENEFIT
The Policy has a minimum Death Benefit feature which automatically increases
the Death Benefit so that it will never be less than the Account Value
multiplied by the Minimum Death Benefit Percentage specified in the Policy. This
percentage varies according to the Insured's Issue Age, the Policy Year, sex
(where unisex rates are not used) and insurance class.
EXAMPLES OF THE MINIMUM DEATH BENEFIT:
<TABLE>
<CAPTION>
A B
---------- ----------
<S> <C> <C>
Face Amount............................ $ 100,000 $ 100,000
Account Value on Date of Death......... 46,500 34,000
Specified Percentage................... 250% 250%
Death Benefit Option................... Level Level
</TABLE>
In Example A, the minimum Death Benefit equals $116,250, i.e., the greater
of $100,000 (the Face Amount) or $116,250 (the Account Value at the Date of
Death of $46,500, multiplied by the specified percentage of 250%). This amount
less any outstanding Indebtedness constitutes the Death Proceeds which We would
pay to the Beneficiary.
In Example B, the minimum Death Benefit is $100,000, i.e., the greater of
$100,000 (the Face Amount) or $85,000 (the Account Value of $34,000 multiplied
by the specified percentage of 250%).
INCREASES AND DECREASES IN FACE AMOUNT
At any time after the first Policy Year, You may make a request In Writing
to change the Face Amount. The minimum amount by which the Face Amount can be
increased or decreased is based on Our rules then in effect. We reserve the
right to limit the number of increases or decreases made under the Policy to not
more than one in any 12 month period.
A decrease in the Face Amount will be effective on the Monthly Activity Date
following the date We receive Your request. The remaining Face Amount must not
be less than that allowed by Our minimum rules then in effect. If You ask to
decrease Your Face Amount below the Initial Face Amount a Surrender Charge may
be assessed, equal to:
1. the Surrender Charge applicable to the current Policy Year; multiplied by
2. the percentage described below.
The percentage used to determine the Surrender Charge will be calculated by:
1. subtracting the requested Face Amount from the lowest Face Amount prior to
the request; and
2. dividing that difference by the lowest Face Amount prior to the request.
The Surrender Charge assessed will be deducted from Your Account Value on
the Monthly Activity Date effective for the decrease.
All requests to increase the Face Amount must be applied for on a new
application and accompanied by the Policy. All requests will be subject to
evidence of insurability satisfactory to Us. Any increase approved by Us will be
effective on the date shown on the new policy specifications page , provided
that the Monthly Deduction Amount for the first month after the effective date
of increase is made.
BENEFITS AT MATURITY
If the Insured is living on the Scheduled Maturity Date, on surrender of the
Policy to Hartford Life, Hartford Life will pay to the Policy Owner the Cash
Surrender Value. On the Scheduled Maturity Date, unless extended by rider, the
Policy will terminate and Hartford Life will have no further obligations under
the Policy.
LAPSE AND REINSTATEMENT
POLICY LAPSE AND GRACE PERIOD
During the first Policy Year, the Policy will be in default on any Monthly
Activity Date on which the Account Value less Indebtedness is not sufficient to
cover the Monthly Deduction Amount.
During the second Policy Year, the Policy will be in default on any Monthly
Activity Date on which the Account Value less Indebtedness less 1/2 of the
Surrender Charge for the second Policy Year is not sufficient to cover the
Monthly Deduction Amount.
During the third Policy Year and thereafter, the Policy will be in default
on any Monthly Activity Date if the Cash Surrender Value is not sufficient to
cover the Monthly Deduction Amount.
A 61-day period called the "Grace Period" will begin from the date of
default. Hartford Life will mail the Owner
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
and any assignee written notice of the amount of premium that will be required
to continue the Policy in force. The premium required will be no greater than
the amount required to pay Monthly Deduction Amounts during the Grace period
plus three additional Monthly Deduction Amounts. Unless the Death Benefit
guarantee is available, the Policy will terminate without value if the required
premium is not paid by the end of the Grace Period. If the Death Benefit
guarantee is available and sufficient premium has not been paid by the end of
the Grace Period, the Death Benefit will be reduced to the Face Amount and any
riders will no longer be in force. If the Insured dies during the Grace Period,
We will pay the Death Proceeds.
DEATH BENEFIT GUARANTEE DEFAULT AND GRACE PERIOD
On every Monthly Activity Date during the Death Benefit guarantee period, We
will compare the cumulative premium received, less Indebtedness, less
withdrawals, to the Cumulative Death Benefit Guarantee Premium for the Death
Benefit guarantee period in effect.
If the cumulative premium received, less Indebtedness, less withdrawals, are
less than the Cumulative Death Benefit Guarantee Premium, the Death Benefit
guarantee will be deemed to be in default as of that Monthly Activity Date. A
Grace Period of 61 days from the date of default will begin. We will mail the
Policy Owner and any assignee written notice of the amount of premium required
to continue the Death Benefit guarantee.
At the end of the Grace Period, the Death Benefit guarantee will be removed
from the Policy if We have not received the amount of the required premium.
REINSTATEMENT
Unless the Policy has been surrendered for its Cash Surrender Value, the
Policy may be reinstated prior to the Scheduled Maturity Date, provided:
1. You make Your request In Writing within five years from the termination
date;
2. satisfactory evidence of insurability is submitted;
3. any Indebtedness existing at the time of termination is repaid or carried
over to the reinstated Policy; and
4. You pay a premium sufficient to cover (1) all Monthly Deduction Amounts that
are due and unpaid during the Grace Period; and (2) the sum of Monthly
Deduction Amounts for the next three months after the date of reinstatement.
The Account Value on the reinstatement date will equal:
1. The Cash Value at the time of termination; plus
2. Net Premium derived from premium paid at the time of reinstatement; minus
3. the Monthly Deduction Amounts that were due and unpaid during the Policy
Grace Period; plus
4. the Surrender Charge at the time of reinstatement. The Surrender Charge is
based on the duration from the original Policy Date.
THE RIGHT TO EXAMINE OR EXCHANGE THE POLICY
An applicant has a limited right to return a Policy for cancellation. If the
Policy is returned, by mail or personal delivery to Hartford Life or to the
agent who sold the Policy, to be canceled within ten days after delivery of the
Policy to the Policy Owner, within 10 days of Hartford Life's mailing or
personal delivery of a Notice of Right to Withdraw, or within 45 days of
completion of the Policy application (whichever is later, and subject to
applicable state regulation), Hartford Life will return to the applicant, within
seven days thereafter, the greater of the premium paid, less any Indebtedness,
or the sum of (1) the Account Value, less any Indebtedness, on the date the
returned Policy is received by Hartford Life or its agent and (2) any deductions
under the Policy or by the Funds for taxes, charges or fees.
Once the Policy is in effect, it may be exchanged during the first 24 months
after its issuance, for a non-variable life insurance policy offered by Us or an
affiliate. No evidence of insurability will be required. The new policy will
have an amount at risk which equals or is less than the amount at risk in effect
on the date of exchange. Premium under the new policy will be based on the same
risk classification as this Policy. An exchange of the Policy under these
circumstances should be a tax-free transaction under Section 1035 of the Code.
WITHDRAWAL
At any time prior to the Scheduled Maturity Date, provided the Policy has a
Cash Surrender Value, You may surrender the Policy or withdraw money from it.
During the first fifteen (15) Policy Years, a Surrender Charge will apply. The
Surrender Charge consists of two component charges: an administrative expense
surrender charge and a sales surrender charge.
ADMINISTRATIVE EXPENSE SURRENDER CHARGE
The Administrative Expense Surrender Charge varies by the Insured's age on
the Date of Issue. Your sales representative can provide you with the actual
Administrative Expense Surrender Charge that applies to your Issue Age.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
The following table represents the Administrative Expense Surrender Charge for a
person age 45 on the Date of Issue:
<TABLE>
<CAPTION>
AMOUNT PER AMOUNT PER
$1,000 OF $1,000 OF
INITIAL FACE INITIAL FACE
POLICY YEAR AMOUNT POLICY YEAR AMOUNT
- ----------------- ------------- --------------- -------------
<S> <C> <C> <C>
1 $ 5.00 9 $ 3.18
2 $ 5.00 10 $ 2.73
3 $ 5.00 11 $ 2.27
4 $ 5.00 12 $ 1.82
5 $ 5.00 13 $ 1.36
6 $ 4.55 14 $ 0.91
7 $ 4.09 15 $ 0.45
8 $ 3.64 16 $ 0.00
</TABLE>
The amount of the charge remains level for five Policy Years. After the
fifth Policy Anniversary, the charge decreases uniformly each month until the
end of the fifteenth Policy Year when it is zero.
The Administrative Expense Surrender Charge is designed to cover the
administrative expenses associated with underwriting and issuing a Policy,
including the costs of processing applications, conducting medical examinations,
determining insurability and the Insured's underwriting class, and establishing
policy records.
The sum of the Administrative Expense Surrender Charge and the Monthly
Administrative Charge will not exceed the cost Hartford Life incurs in providing
administrative services under the Policy. Hartford Life does not expect to
profit from the Administrative Expense Surrender Charge.
SALES SURRENDER CHARGE
The Sales Surrender Charge varies by the Insured's age on the Date of Issue.
Your sales representative can provide you with the actual Sales Surrender Charge
that applies to your Issue Age. The following table represents the Sales
Surrender Charge for a person age 45 on the Date of Issue:
<TABLE>
<CAPTION>
AMOUNT PER AMOUNT PER
$1,000 OF $1,000 OF
INITIAL FACE INITIAL FACE
POLICY YEAR AMOUNT POLICY YEAR AMOUNT
- ----------------- ------------- --------------- -------------
<S> <C> <C> <C>
1 $ 7.00 9 $ 4.45
2 $ 7.00 10 $ 3.82
3 $ 7.00 11 $ 3.18
4 $ 7.00 12 $ 2.55
5 $ 7.00 13 $ 1.91
6 $ 6.36 14 $ 1.27
7 $ 5.73 15 $ 0.64
8 $ 5.09 16 $ 0.00
</TABLE>
The amount of the charge remains level for five Policy Years. After the
fifth Policy Anniversary, the charge decreases uniformly each month until the
end of the fifteenth Policy Year when it is zero.
The Sales Surrender Charges is designed to cover expenses relating to the
sale and distribution of the Policy, including commissions paid to any sales
personnel, the cost of preparing sales literature and other promotional
activities.
VALUATION OF PAYMENTS AND TRANSFERS
We value the Policy on every Valuation Day.
We will pay Death Proceeds, Cash Surrender Values, Withdrawals, and loan
amounts allocable to the Sub-Accounts within seven (7) days after We receive all
the information needed to process the payment unless the New York Stock Exchange
is closed for other than a regular holiday or weekend, trading is restricted by
the Securities and Exchange Commission ("SEC") or that the SEC declares that an
emergency exists.
Hartford Life may defer payment of any amounts allocated to the Fixed
Account for up to six months from the date on which We receive the request.
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford Life. Within limits, an applicant may choose the initial Face Amount. A
Policy generally will be issued only on the lives of Insureds between the ages
of 0 and 80 who supply evidence of insurability satisfactory to Hartford Life.
Acceptance is subject to Hartford Life's underwriting rules. Hartford Life
reserves the right to reject an application for any reason.
The Policy will be effective on the Policy Date only after Hartford Life has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years.
REDUCED CHARGES FOR ELIGIBLE GROUPS
Certain charges and deductions described below may be reduced for a Policy
issued in connection with a specific plan in accordance with Our rules in effect
as of the date an application for a Policy is approved. To qualify for such a
reduction, a plan must satisfy certain criteria as to, for example, size of the
plan, expected number of participants and anticipated premium payment from the
plan. Generally, the sales contacts and effort, administrative costs and
mortality cost per Policy vary based on such factors as the size of the plan,
the purposes for which the Policy is purchased and certain characteristics for
the plan's members. The amount of reduction and the criteria for qualification
are a reflection of the reduced sales effort and administrative costs resulting
from, and the different
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
mortality experience expected as a result of, sales to qualifying plans. We may
modify from time to time on a uniform basis both the amounts of reductions and
the criteria for qualification. Reductions in these charges will not be unfairly
discriminatory against any person, including the affected Policy Owners funded
by Separate Account VL I.
DEDUCTIONS FROM THE PREMIUM
Before allocating the premium to the Account Value, a deduction is made for
the premium tax and federal tax charge and front-end sales load. The amount of
each premium allocated to the Account Value is Your Net Premium.
PREMIUM TAX CHARGE AND FEDERAL TAX CHARGE
We deduct, as a premium tax charge, a percentage of each premium to cover
premium-based taxes assessed against Hartford Life by a state or other
governmental entity. This percentage will vary depending on the tax rates in
effect there and is based on the actual tax imposed. The range is generally
between 0% and 3.5%.
We also deduct a 1.25% charge from each premium payment to cover the
estimated costs to Us of the federal income tax treatment of the Policy's
deferred acquisition costs under Section 848 of the Code. We have determined
that this charge is reasonable in relation to our increased federal income tax
burden under the Code resulting from the receipt of premium.
The Federal Tax Charge is a factor Hartford Life must use when computing the
maximum sales load chargeable under Securities and Exchange Commission rules.
FRONT-END SALES LOAD
The front-end sales load is a charge deducted from each premium. The current
and maximum front-end sales load for all premium is 5.0% in the first Policy
Year and 2.0% for Policy Years 2 through 10. After Policy Year 10, the front-end
sales load is currently 0%. We reserve the right to charge a maximum of 2.0%.
EXAMPLES OF FRONT-END SALES LOADS/IMPACT OF REFUND OF SALES LOAD
An example of the actual Front-End Sales Loads and the impact of the refund
of the load, if any, (see "Sales Load Refund" on page ), for a Policy is shown
below. This example uses the same specific information (i.e., Issue Age, Face
Amount, premium level, etc.) as the illustration on page of the prospectus.
<TABLE>
<S> <C>
Death Benefit Option: Level
Face Amount: $250,000
Charges Assumed: Current
Issue Age/Sex/Class: 45/Male/Preferred
Guideline Annual Premium: $4,483.41
Annual Planned Premium: $3,250.00
Assumed Gross Annual Investment Return 0%
</TABLE>
The Total Cumulative Sales Load column on the far right of the table below
represents the sum of all loads which would have been assessed since the issue
of the policy assuming a surrender of the Policy at the end of the corresponding
policy year.
This is:
(1) The sum of the Cumulative Front-End Sales Load, plus
(2) The actual Surrender Charge for that Policy Year, minus
(3) The Sales Load Refund, if any, applicable to that Policy year.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
Additional Charges/Credits if Surrendered
<TABLE>
<CAPTION>
CUMULATIVE TOTAL
FRONT-END MAXIMUM YEAR END ACTUAL SALES SALES CUMULATIVE
POLICY SALES SURRENDER ACCOUNT SURRENDER SURRENDER LOAD SALES LOAD IF
YEAR LOAD CHARGE VALUE CHARGE CHARGES REFUND SURRENDERED**
- ---------- ----------- ----------- --------- ----------- ----------- --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 65 3,000 1,880 1,880 630 0 695
2 130 3,000 3,849 3,000 1,750 333 1,547
3 195 3,000 5,724 3,000 1,750 0 1,945
4 260 3,000 7,498 3,000 1,750 0 2,010
5 325 3,000 9,247 3,000 1,750 0 2,075
6 390 2,727 10,887 2,727 1,590 0 1,980
7 455 2,455 12,433 2,455 1,433 0 1,888
8 520 2,183 13,878 2,183 1,273 0 1,793
9 585 1,910 15,212 1,910 1,113 0 1,698
10 650 1,638 16,429 1,638 955 0 1,605
11 715 1,363 17,807 1,363 795 0 1,510
12 780 1,090 19,172 1,090 638 0 1,418
13 845 818 20,385 818 478 0 1,323
14 910 545 21,431 545 318 0 1,228
15 975 273 22,292 273 160 0 1,135
16 1040 0 22,949 0 0 0 1,040
</TABLE>
*The Actual Surrender Charge assessed is the smaller of:
(a) The contractual maximum surrender charge, or
(b) Year-End Account Value
**The Total Cumulative Sales Load If Surrendered assumes a surrender of the
Policy at the end of that Policy Year and is:
(a) The Cumulative Front-End Sales Load, plus
(b) Sales Surrender Charge, minus
(c) Sales Load Refund.
DEDUCTIONS AND CHARGES FROM THE
ACCOUNT VALUE
MONTHLY DEDUCTION AMOUNTS
On the Policy Date and on each subsequent Monthly Activity Date, Hartford
Life will deduct an amount (the "Monthly Deduction Amount") from the Account
Value to cover certain charges and expenses incurred in connection with a
Policy. Each Monthly Deduction Amount will be deducted on a Pro Rata Basis from
the Fixed Account and each of the Sub-Accounts. The Monthly Deduction Amount
will vary from month to month.
The Monthly Deduction Amount equals:
1. the charge for the Cost of Insurance; plus
2. the Monthly Administrative charge; plus
3. the Mortality and Expense Risk Charge; plus
4. the charges for additional benefits provided by rider.
1. COST OF INSURANCE CHARGE
The charge for the Cost of Insurance is equal to:
(a) the Cost of Insurance rate per $1,000;
multiplied by
(b) the amount at risk; divided by
(c) $1,000
The amount at risk equals the Death Benefit less the Account Value on that
date, prior to assessing the Monthly Deduction Amount.
A charge for a special insurance class rating of an Insured may be made
against the Account Value, if applicable. This charge is to compensate
Hartford Life for the additional mortality risk associated with individuals
in these classes.
<PAGE>
18 Hartford Life Insurance Company
- --------------------------------------------------------------------------------
The Cost of Insurance charge is to cover Hartford Life's anticipated
mortality costs and other expenses. For standard risks, the Cost of
Insurance rates will not exceed those based on the 1980 Commissioners'
Standard Ordinary Mortality Smoker or Nonsmoker Table, age last birthday. A
table of guaranteed Cost of Insurance rates per $1,000 will be included in
each Policy; however, Hartford Life reserves the right to use rates less
than those shown in the table. Substandard risks will be charged a higher
Cost of Insurance rate that will not exceed rates based on a multiple of
the 1980 Commissioners' Standard Ordinary Mortality Smoker or Nonsmoker
Table, age last birthday. The multiple will be based on the Insured's risk
class. Hartford Life will determine the Cost of Insurance rate at the start
of each Policy Year. Any changes in the Cost of Insurance rate will be made
uniformly for all Insureds of the same issue age, sex and risk class and
whose coverage has been inforce for the same length of time. No change in
insurance class or cost will occur on account of deterioration of the
Insured's health.
Because the Account Value and the Death Benefit under a Policy may vary
from month to month, the Cost of Insurance charge may also vary on each
Monthly Activity Date.
2. MONTHLY ADMINISTRATIVE CHARGE
Hartford Life will assess a Monthly Administrative Charge to reimburse
Hartford Life for administrative costs in connection with the Policy. The
current Monthly Administrative Fee is $25.00 per month for the first Policy
Year, $10.00 per month in Policy Year 2-10 and $5.00 per month in Policy
Years 11 and later, not to exceed $7.50 per month in Policy Years 11 and
later.
The sum of the Monthly Administrative Charge and the Administrative
Services Sales Charge will not exceed the cost Hartford Life incurs in
providing administrative services under the Policy.
3. MORTALITY AND EXPENSE RISK CHARGE
A charge is made for mortality and expense risks assumed by Hartford Life.
Hartford Life may profit from this charge. See also, "Policy Benefits and
Rights -- Account Values," page .
The current Mortality and Expense Risk Charge for any Monthly Activity
Date is equal to: (a) the current Mortality and Expense Risk Rate;
multiplied by (b) the portion of the Account Value allocated to the Sub-
Accounts on the Monthly Activity Date prior to assessing the Monthly
Deduction Amount.
The current and guaranteed Mortality and Expense Risk Rate for the first
ten Policy Years is 0.80% (.067% per month). After the tenth Policy Year,
the current rate is 0.25% (.021% per month), with a maximum Rate of 0.50%
(.042% per month).
The mortality risk assumed is that the Cost of Insurance charges specified
in the Policy will be insufficient to meet actual claims. The expense risk
assumed is that expenses incurred in issuing and administering the Policy
will exceed the administrative charges set in the Policy. Hartford Life may
profit from the mortality and expense risk charge and may use any profits
for any proper purpose, including any difference between the cost it incurs
in distributing the Policy and the proceeds of the front-end sales load.
4. RIDER CHARGE
If the Policy includes riders, a charge is made applicable to the riders
from the Account Value on each Monthly Activity Date. The charge applicable
to these riders is to compensate Hartford Life for anticipated cost of
providing these benefits and are specified on the applicable rider. The
riders available are described on page under "Supplemental Benefits"
section.
CHARGES AGAINST THE FUNDS
The investment advisers charge the Funds an investment management fee on a
daily basis as compensation for services. The following Table shows the fee
charged for each Fund available for investment by Policy Owners.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 19
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ANNUAL INVESTMENT MANAGEMENT FEES
AS A PERCENTAGE OF AVERAGE
HARTFORD FUNDS DAILY NET ASSETS
- -------------------------------------------------------------------------- --------------------------------------------------------
<S> <C>
Hartford Capital Appreciation Fund, Inc.,
Hartford Advisers Fund, Inc.,
Hartford International Opportunities Fund, Inc.,
Hartford Dividend and Growth Fund, Inc.................................. 575% of the first $250 million of average net assets
.525% of the next $250 million of average net assets
.475% of the next $250 million of average net assets
.425% of any amount over $1.0 billion
Hartford Bond Fund, Inc.,
Hartford Stock Fund, Inc................................................ .325% of the first $250 million of average net assets
.300% of the next $250 million of average net assets
.275% of the next $250 million of average net assets
.250% of any amount over $1.0 billion
Hartford Index Fund, Inc.................................................. .20%
Hartford Mortgage Securities Fund, Inc.,
HVA Money Market Fund, Inc.............................................. .25%
<CAPTION>
PUTNAM FUNDS
- --------------------------------------------------------------------------
<S> <C>
PCM Diversified Income Fund,
PCM Global Asset Allocation Fund,
PCM High Yield Fund,
PCM New Opportunities Fund,
PCM Voyager Fund........................................................ .70% of the first $500 million of average net assets
.60% of the next $500 million of average net assets
.55% of the next $500 million of average net assets
.50% of any amount over $1.5 billion
PCM Growth and Income Fund................................................ .65% of the first $500 million of average net assets
.55% of the next $500 million of average net assets
.50% of the next $500 million of average net assets
.45% of any amount over $1.5 billion
PCM Money Market Fund..................................................... .45% of the first $500 million of average net assets
.35% of the next $500 million of average net assets
.30% of the next $500 million of average net assets
.25% of any amount over $1.5 billion
PCM U.S. Government and
High Quality Bond Fund.................................................. .65% of the first $500 million of average net assets
.55% of the next $500 million of average net assets
.50% of the next $500 million of average net assets
.45% of the next $5 billion of average net assets
.425% of the next $5 billion of average net assets
.405% of the next $5 billion of average net assets
.39% of the next $5 billion of average net assets
.38% of any excess thereafter
PCM Global Growth Fund, PCM Utilities Growth and Income Fund.............. .60%
<CAPTION>
FIDELITY FUNDS
- --------------------------------------------------------------------------
<S> <C>
Equity-Income Portfolio................................................... .52%
Overseas Portfolio........................................................ .77%
Asset Manager Portfolio................................................... .72%
</TABLE>
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
TAXES
Currently, no charge is made to Separate Account VL I for federal, state,
and local taxes that may be allocable to Separate Account VL I. A change in the
applicable federal, state or local tax laws which impose tax on Hartford Life
and/or Separate Account VL I may result in a charge against the Policy in the
future. Charges for other taxes, if any, allocable to Separate Account VL I may
also be made.
THE COMPANY
Hartford Life Insurance Company ("Hartford Life") was originally
incorporated under the laws of Massachusetts on June 5, 1902. It was
subsequently redomiciled to Connecticut. It is a stock life insurance company
engaged in the business of writing health and life insurance, both individual
and group, in all states of the United States and the District of Columbia. The
offices of Hartford Life are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999.
Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company,
one of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire Insurance Company became an independent,
publicly traded corporation.
Hartford Life is rated A+ (superior) by A.M. Best and Company, Inc., on the
basis of its financial soundness and operating performance. Hartford Life is
rated AA by Standard & Poor's and AA+ by Duff and Phelps on the basis of its
claims paying ability. These ratings do not apply to the investment performance
of the Sub-Accounts of the Separate Account. These ratings do apply to Hartford
Life's ability to meet its insurance obligations, including those under the
Policy.
Hartford Life is subject to Connecticut law governing insurance companies
and is regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1 in each year covering the operations of Hartford Life for the
preceding year and its financial condition on December 31 of such year. Its
books and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted by
the Commissioner pursuant to standards established by the National Association
of Insurance Commissioners ("NAIC") at least once in every four years. In
addition, Hartford Life is subject to the insurance laws and regulations of any
jurisdiction in which it sells its insurance contracts. Hartford Life is also
subject to various Federal and state securities laws and regulations.
SEPARATE ACCOUNT VL I
GENERAL
Separate Account VL I is a separate account of Hartford Life established on
September 18, 1992 pursuant to the insurance laws of the State of Connecticut
and organized as a unit investment trust registered with the Securities and
Exchange Commission under the Investment Company Act of 1940. Separate Account
VL I meets the definition of "separate account" under federal securities law.
Under Connecticut law, the assets of Separate Account VL I are held exclusively
for the benefit of Policy Owners and persons entitled to payments under the
Policy. The assets for Separate Account VL I are not chargeable with liabilities
arising out of any other business which Hartford Life may conduct.
FUNDS
The assets of each Sub-Account of Separate Account VL I are invested
exclusively in one of the Funds. A Policy Owner may allocate premium payments
among the Sub-Accounts. Policy Owners should review the following brief
descriptions of the investment objectives of each of the Funds in connection
with that allocation. There is no guarantee that any of the Funds will achieve
its stated objectives. Policy Owners are also advised to read the prospectuses
for each of the Funds accompanying this prospectus for more detailed
information.
HARTFORD FUNDS
HARTFORD ADVISERS FUND, INC.
To achieve maximum long term total rate of return consistent with prudent
investment risk by investing in common stock and other equity securities, bonds
and other debt securities, and money market instruments. The investment adviser
will vary the investments of the Fund among equity and debt securities and money
market instruments depending upon its analysis of market trends. Total rate of
return consists of current income, including dividends, interest and discount
accruals and capital appreciation.
HARTFORD BOND FUND, INC.
To achieve maximum current income consistent with preservation of capital by
investing primarily in bonds.
HARTFORD CAPITAL APPRECIATION FUND, INC.
To achieve growth of capital by investing in equity securities and
securities convertible into equity securities selected solely on the basis of
potential for capital appreciation; income, if any, is an incidental
consideration.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
HARTFORD DIVIDEND AND GROWTH FUND, INC.
To achieve a high level of current income consistent with growth of capital
and reasonable investment risk by investing primarily in equity securities and
securities convertible into equity securities.
HARTFORD INDEX FUND, INC.
To provide investment results which approximate the price and yield
performance of publicly-traded common stocks in the aggregate, as represented by
the Standard & Poor's 500 Composite Stock Price Index.*
HARTFORD INTERNATIONAL OPPORTUNITIES FUND, INC.
To achieve long-term total return consistent with prudent investment risk
through investment primarily in equity securities issued by foreign companies.
HARTFORD MORTGAGE SECURITIES FUND, INC.
To achieve maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association
("GNMA").
HARTFORD STOCK FUND, INC.
To achieve long-term capital growth primarily through capital appreciation,
with income a secondary consideration, by investing in equity-type securities.
HVA MONEY MARKET FUND, INC.
To achieve maximum current income consistent with liquidity and preservation
of capital by investing in money market securities.
PUTNAM FUNDS
PCM DIVERSIFIED INCOME FUND
Seeks high current income consistent with capital preservation by investing
in the following three sectors of the fixed income securities markets: U.S.
Government Sector, High Yield Sector (which invests primarily in what are
commonly referred to as "junk bonds"), and International Sector. See the special
considerations for investments in high yield securities described in the Putnam
Fund prospectus.
PCM GLOBAL ASSET ALLOCATION FUND
Seeks a high level of long-term total return consistent with preservation of
capital by investing in U.S. equities, international equities, U.S. fixed income
securities, and international fixed income securities.
PCM GLOBAL GROWTH FUND
Seeks capital appreciation through a globally diversified common stock
portfolio.
PCM GROWTH AND INCOME FUND
Seeks capital growth and current income by investing primarily in common
stocks that offer potential for capital growth, current income, or both.
PCM HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding,
lower-rated fixed income securities (commonly referred to as "junk bonds"),
constituting a diversified portfolio which Putnam Investment Management, Inc.
("Putnam Management") believes does not involve undue risk to income or
principal. Capital growth is a secondary objective when consistent with seeking
high current income. See the special considerations for investments for high
yield securities described in the Putnam Fund prospectus.
PCM MONEY MARKET FUND
Seeks to achieve as high a level of current income as Putnam Management
believes is consistent with preservation of capital and maintenance of liquidity
by investing in high-quality money market instruments.
PCM NEW OPPORTUNITIES FUND
Seeks long-term capital appreciation by investing principally in common
stocks of companies in sectors of the economy which Putnam Management believes
possess above average long-term growth potential.
PCM U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in through investment in securities issued or guaranteed as to
principal and interest by the U.S. Government or by its agencies or
instrumentalities and in other debt obligations rated at least A by Standard &
Poor's or Moody's or, if not rated, determined by Putnam Management to be of
comparable quality.
PCM UTILITIES GROWTH AND INCOME FUND
Seeks capital growth and current income by concentrating its investments in
securities issued by companies in the public utilities industries.
PCM VOYAGER FUND
Aggressively seeks capital appreciation primarily from a portfolio of common
stocks of companies that Putnam Management believes have potential for capital
appreciation which is significantly greater than that of market averages.
* "STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P-REGISTERED TRADEMARK-", "S&P
500-REGISTERED TRADEMARK-", "STANDARD & POOR'S 500", AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD
LIFE INSURANCE COMPANY AND AFFILIATES. THE HARTFORD INDEX FUND, INC. ("INDEX
FUND") IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S
("S&P") AND S&P MAKES NO REPRESENTATION REGARDING THE ADVISABILITY OF
INVESTING IN THE INDEX FUND.
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FIDELITY FUNDS
EQUITY-INCOME PORTFOLIO
To seek reasonable income by investing primarily in income-producing equity
securities. In choosing these securities, the Portfolio will also consider the
potential for capital appreciation. The Portfolio's goal is to achieve a yield
which exceeds the composite yield on the securities comprising the Standard &
Poor's Daily Stock Price Index of 500 Common Stocks. The Portfolio may invest in
high yielding, lower-rated securities (commonly referred to as "junk bonds")
which are subject to greater risk than investments in higher-rated securities.
For a further discussion of lower-rated securities, please see "Risks of
Lower-Rated Debt Securities" in the Fidelity prospectus for this Portfolio.
OVERSEAS PORTFOLIO
To seek long-term growth of capital primarily through investments in foreign
securities and provide a means for aggressive investors to diversify their own
portfolios by participating in companies and economies outside of the United
States.
ASSET MANAGER PORTFOLIO
To seek high total return with reduced risk over the long-term by allocating
its assets among stocks, bonds and short-term fixed-income instruments.
The Hartford Funds are organized as corporations under the laws of the State
of Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. The Putnam Funds are portfolios of the
Putnam Capital Manager Trust, which is organized as a business trust under the
laws of Massachusetts as an open-end series investment company under the
Investment Company Act of 1940. The Fidelity Funds involve two diversified
open-end management investment companies, each with multiple portfolios and
organized as a Massachusetts business trust. The Equity-Income Portfolio and
Overseas Portfolio are portfolios of the Variable Insurance Products Fund. The
Asset Manager Portfolio is a portfolio of the Variable Insurance Products Fund
II.
Each Fund continually issues an unlimited number of full and fractional
shares of beneficial interest in the Fund. Such shares are offered to separate
accounts, including Separate Account VL I, established by Hartford Life or one
of its affiliated companies specifically to fund the Policy and other policies
issued by Hartford Life or its affiliates as permitted by the Investment Company
Act of 1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford Life nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or to variable annuity Policy Owners, the Board of Directors
intend for the Hartford Funds and the Board of Trustees for the Putnam Funds and
the Fidelity Funds (collectively the "Board") to monitor events in order to
identify any material conflicts between such Policy Owners and to determine what
action, if any, should be taken in response thereto. If the Boards were to
conclude that separate funds should be established for variable life and
variable life insurance separate accounts, Hartford Life will bear the attendant
expenses.
All investment income of and other distributions to each Sub-Account of
Separate Account VL I arising from the applicable Fund are reinvested in shares
of that Fund at net asset value. The income and both realized gains or losses on
the assets of each Sub-Account of Separate Account VL I are therefore separate
and are credited to or charged against the Sub-Account without regard to income,
gains or losses from any other Sub-Account or from any other business of
Hartford Life. Hartford Life will purchase shares in the Funds in connection
with premium payments allocated to the applicable Sub-Account in accordance with
Policy Owners' directions and will redeem shares in the Funds to meet Policy
obligations or make adjustments in reserves, if any. The Funds are required to
redeem Fund shares at net asset value and generally to make payment within seven
days.
Hartford Life reserves the right, subject to compliance with the law as then
in effect, to make additions to, deletions from, or substitutions for Separate
Account VL I and its Sub-Accounts which fund the Policy. If shares of any of the
Funds should no longer be available for investment, or if, in the judgment of
Hartford Life's management, further investment in shares of any Fund should
become inappropriate in view of the purposes of the Policy, Hartford Life may
substitute shares of another Fund for shares already purchased, or to be
purchased in the future, under the Policy. No substitution of securities will
take place without notice to and consent of Policy Owners and without prior
approval of the Securities and Exchange Commission to the extent required by the
Investment Company Act of 1940. Subject to Policy Owner approval, if required,
Hartford Life also reserves the right to end the registration under the
Investment Company Act of 1940 of Separate Account VL I or any other separate
accounts of which it is the depositor which may fund the Policy.
Each Fund is subject to certain investment restrictions which may not be
changed without the approval of a majority of the shareholders of the Fund. See
the accompanying prospectuses for each of the Funds.
INVESTMENT ADVISER
HARTFORD FUNDS
The investment adviser for each of the Hartford Funds is The Hartford
Investment Management Company
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
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("HIMCO"), a wholly-owned subsidiary of Hartford Life Insurance Company. HIMCO
was organized under the laws of the State of Connecticut in October of 1981.
HIMCO also serves as investment adviser to several other Hartford Life
sponsored funds which are also registered with the Securities and Exchange
Commission. HIMCO is registered as an investment adviser under the Investment
Advisers Act of 1940. HIMCO provides investment advice and, in general,
supervises the management and investment program of Hartford Bond Fund, Inc.,
Hartford Index Fund, Inc., Hartford Mortgage Securities Fund, Inc., and HVA
Money Market Fund, Inc., pursuant to an Investment Advisory Agreement entered
into with each of these Funds for which HIMCO receives a fee. HIMCO also
supervises the investment programs of Hartford Advisers Fund, Inc., Hartford
Capital Appreciation Fund, Inc., Hartford Dividend and Growth Fund, Inc.,
Hartford International Opportunities Fund, Inc., and Hartford Stock Fund, Inc.
pursuant to an Investment Management Agreement for which HIMCO receives a fee.
In addition, with respect to these five Funds, HIMCO has a Sub-Investment
Advisory Agreement with Wellington Management Company ("Wellington Management")
to provide an investment program to HIMCO for utilization by HIMCO in rendering
services to these funds. Wellington Management is a professional investment
counseling firm which provides investment services to investment companies,
other institutions and individuals. Wellington Management is organized as a
private Massachusetts partnership and its predecessor organizations have
provided investment advisory services to investment companies since 1933 and to
investment counseling clients since 1960. See the accompanying prospectuses for
each of the Funds for a more complete description of HIMCO and Wellington
Management and their respective fees.
PUTNAM FUNDS
Putnam Management, One Post Office Square, Boston, Massachusetts, 02109,
serves as the investment manager for the Putnam Funds. An affiliate, the Putnam
Advisory Company, Inc. manages domestic and foreign institutional accounts and
mutual funds. Another affiliate, Putnam Fiduciary Trust Company, provides
investment advice to institutional clients under its banking and fiduciary
policies. Putnam Management and its affiliates are wholly-owned subsidiaries of
Marsh & McLennan Companies, Inc., a publicly owned holding company whose
principal businesses are international insurance brokerage and employee benefit
consulting.
FIDELITY FUNDS
The Fidelity Funds are managed by Fidelity Management & Research Company
("Fidelity Management"), whose principal business address is 82 Devonshire
Street, Boston, Massachusetts. Fidelity Management is one of America's largest
investment management organizations. It is composed of a number of different
companies, which provide a variety of financial services and products. Fidelity
Management is the original Fidelity company, founded in 1946. It provides a
number of mutual funds and other clients with investment research and portfolio
management services. Various Fidelity companies perform certain activities
required to operate Variable Insurance Products Fund and Variable Insurance
Products Fund II.
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE ABOUT
THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.
Premium Payments and Account Values allocated to the Fixed Account become a
part of the general assets of Hartford Life. Hartford Life invests the assets of
the General Account in accordance with applicable law governing the investments
of insurance company general accounts.
The Fixed Account Minimum Credited Rate is shown in the Contract. Currently,
Hartford Life guarantees that it will credit interest at a rate of not less than
4% per year, compounded annually, to amounts allocated to the Fixed Account
under the Policy. Hartford Life may credit interest at a rate in excess of the
Fixed Account Minimum Credited Rate, however, Hartford Life is not obligated to
credit any interest in excess of the Fixed Account Minimum Credited Rate. There
is no specific formula for the determination of excess interest credits. Some of
the factors that Hartford Life may consider in determining whether to credit
excess interest to amounts allocated to the Fixed Account and the amount
thereof, are general economic trends, rates of return currently available and
anticipated on Hartford Life's investments, regulatory and tax requirements and
competitive factors. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED
ACCOUNT IN EXCESS OF THE FIXED ACCOUNT MINIMUM CREDITED RATE WILL BE DETERMINED
IN THE SOLE DISCRETION OF HARTFORD LIFE. THE POLICY OWNER ASSUMES THE RISK THAT
INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
NOT EXCEED THE FIXED ACCOUNT MINIMUM CREDITED RATE.
OTHER MATTERS
VOTING RIGHTS
In accordance with its view of presently applicable law, Hartford Life will
vote the shares of the Funds at regular and special meetings of the shareholders
of the Funds in accordance with instructions from Policy Owners (or the assignee
of the Policy, as the case may be) having a voting interest in Separate Account
VL I. The number of shares held in the Separate Account which are allocable to
each Policy Owner is determined by dividing the Policy Owner's interest in each
Sub-Account by the net asset value of the applicable shares of the Funds.
Hartford Life will vote shares for which no instructions have been given and
shares which are not allocable to Policy Owners (i.e., shares owned by Hartford
Life) in the same proportion as it votes shares for which it has received
instructions. If the Investment Company Act of 1940 or any rule promulgated
thereunder should be amended, however, or if Hartford Life's present
interpretation should change and, as a result, Hartford Life determines it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The voting interests of the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the Sub-
Account(s) to the Loan Account(s) in connection with the loan (see "Policy
Benefits and Rights -- Policy Loans," pages and ) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the prospectuses for the Funds which accompany this Prospectus to
determine matters on which shareholders may vote.
Hartford Life 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 sub-classification or investment objective
of one or more of the Funds or to approve or disapprove an investment advisory
policy for the Funds. In addition, Hartford Life itself may disregard voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment adviser of the Funds if Hartford Life reasonably
disapproves of such changes. A change would be disapproved only if the proposed
change is contrary to state law or prohibited by state regulatory authorities.
In the event Hartford Life does disregard voting instructions, a summary of that
action and the reasons for such action will be included in the next periodic
report to Policy Owners.
STATEMENTS TO POLICY OWNERS
We will send You a statement at least once each Policy Year, showing:
1. the current Account Value, Cash Surrender Value and Face Amount;
2. the premium paid, Monthly Deduction Amounts and loans since the last report;
3. the amount of any Indebtedness;
4. notifications required by the provisions of the Policy; and
5. any other information required by the Insurance Department of the State
where the Policy was delivered.
LIMIT ON RIGHT TO CONTEST
Hartford Life may not contest the validity of the Policy after it has been
in effect during the lifetime of the Insured for two years from the Issue Date.
If the Policy is reinstated, the two-year period is measured from the date of
reinstatement. In addition, if the Insured commits suicide in the two-year
period, or such period as specified in state law, the benefit payable will be
limited to the premium paid less any Indebtedness and withdrawals.
MISSTATEMENT AS TO AGE
If the age of an Insured is incorrectly stated, the amount of Death Benefit
will be appropriately adjusted as specified in the Policy.
PAYMENT OPTIONS
Proceeds under the Policy may be paid in a lump sum or may be applied to one
of Hartford Life's payment options. The minimum amount that may be placed under
a payment option is subject to the then current rules of Hartford Life. Once
payments under Options 2, 3 or 4 commence, no surrender of the Policy may be
made for the purpose of receiving a lump sum settlement in lieu of the life
insurance payments. The following options are available under the Policy.
FIRST OPTION -- Interest Income
Payments of interest at the rate We declare, but not less than 3 1/2% per
year, on the amount applied under this option.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
SECOND OPTION -- Income of Fixed Amount
Equal payments of the amount chosen until the amount applied under this
option, with interest of not less than 3 1/2% per year, is exhausted. The final
payment will be for the balance remaining.
THIRD OPTION -- Payments for a Fixed Period
An amount payable monthly for the number of years selected which may be from
1 to 30 years.
FOURTH OPTION -- Life Income
LIFE ANNUITY -- an annuity payable monthly during the lifetime of the
annuitant and terminating with the last monthly payment due preceding the
death of the annuitant.
LIFE ANNUITY WITH 120 MONTHLY PAYMENTS CERTAIN -- an annuity providing
monthly income to the annuitant for a fixed period of 120 months and for
as long thereafter as the annuitant shall live.
The Tables in the Policy provide for guaranteed dollar amounts of monthly
payments for each $1,000 applied under the four Payment Options. Under the
Fourth Option, the amount of each payment will depend upon the age of the
Annuitant at the time the first payment is due. If any periodic payment due any
payee is less than $200, Hartford Life may make payments less often.
The Table for the Fourth Option is based on the 1983a Individual Annuity
Mortality Table set back one year and a net investment rate of 3.5% per annum.
The Tables for the First, Second and Third Options are based on a net investment
rate of 3.5% per annum. Hartford Life may, however, from time to time, at Our
discretion if mortality appears more favorable and interest rates justify, apply
other tables which will result in higher monthly payments for each $1,000
applied under one or more of the four Payment Options.
Hartford Life will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the Beneficiary in the application for the Policy. The
Policy Owner may change the Beneficiary (unless irrevocably named) during the
lifetime of the Insured by written request to Hartford Life. If no Beneficiary
is living when the Insured dies, the Death Proceeds will be paid to the Policy
Owner if living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford Life is not responsible for any payment made or action taken before
receipt of written notice of such assignment. Proof of interest must be filed
with any claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policy.
SUPPLEMENTAL BENEFITS
The following supplemental benefits, which are subject to the restrictions
and limitations set forth therein, are among the options that may be included in
a Policy by rider. The Monthly Deduction Amount will be increased to include the
charges for any rider.
MATURITY DATE EXTENSION RIDER
We will extend the Scheduled Maturity Date (the date on which the Policy
will mature) to the date of the death of the Insured regardless of the age of
the Insured. Certain Death Benefit and premium restrictions apply. See "Income
Taxation of Policy Benefits."
TERM INSURANCE RIDER
We will pay an amount upon the death of a designated insured person other
than the Insured Person while this Policy remains in force.
DEDUCTION AMOUNT WAIVER RIDER
Subject to certain age and underwriting restrictions, the Policy may include
a Deduction Amount Waiver Rider. This rider provides for the waiver of the
Policy's Monthly Deduction Amounts in the event of total disability prior to the
Insured reaching Attained Age 65 and continuing for at least six months. The
number of Monthly Deduction Amounts waived depends on the Insured's Attained Age
when the disability began. If this rider is added, the Monthly Deduction Amounts
will be increased to include the charges for this rider.
WAIVER OF SPECIFIED AMOUNT DISABILITY BENEFIT RIDER
If the Insured becomes totally disabled, We will credit the Policy with a
premium equal to the Specified Amount Disability Benefit for as long as the
Insured remains totally disabled, subject to certain qualifications and
restrictions.
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
ACCIDENTAL DEATH BENEFIT RIDER
Subject to certain age and underwriting requirements, the Policy may include
an Accidental Death Benefit Rider. This rider provides for an increase in the
amount paid upon the death of the Insured if the death results from an accident.
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH ITT HARTFORD, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- -------------------------------- ---------------------------------- -------------------------------------------------------------
<S> <C> <C>
Louis J. Abdou, 53 Vice President, 1987 Vice President (1987-Present), Hartford Life.
Wendell J. Bossen, 62 Vice President, 1992** President (1992-Present), International Corporate Marketing
Group, Inc.; Executive Vice President (1984-1992), Mutual
Benefit.
Gregory A. Boyko, 44 Vice President, 1995 Vice President and Controller (1995-Present), Hartford Life;
Chief Financial Officer (1994-1995), IMG American Life;
Senior Vice President (1992-1994), Connecticut Mutual Life
Insurance Company.
Peter W. Cummins, 59 Vice President, 1989 Vice President, Individual Annuity Operations (1989-Present),
Hartford Life.
Ann M. deRaismes, 45 Vice President, 1994 Vice President (1994-Present); Assistant Vice President
(1992); Director of Human Resources (1991-Present),
Hartford Life.
Timothy M. Fitch, 43 Vice President, 1995 Vice President (1995-Present); Assistant Vice President
(1993); Director (1991), Hartford Life.
Donald R. Frahm, 64 Chairman and Chief Executive Chairman and Chief Executive Officer of the Hartford
Officer, 1988 Director, 1988* Insurance Group (1988-Present).
Bruce D. Gardner, 45 Vice President, 1996 Director, Vice President (1996-Present); General Counsel and Corporate
1994* Secretary (1991-1996), Hartford Life.
Joseph H. Gareau, 49 Executive Vice President and Chief Executive Vice President and Chief Investment Officer,
Investment Officer, 1993 (1993-Present), Hartford Life; Senior Vice President and
Director, 1993* Chief Investment Officer (1992), ITT Hartford's
Property-Casualty Companies.
J. Richard Garrett, 51 Treasurer, 1994 Vice President, Treasurer (1994-Present); Vice President (1993-Present)
1993 Hartford Life; Treasurer (1977), Hartford Insurance Group.
John P. Ginnetti, 50 Executive Vice President, 1994 Executive Vice President and Director Asset Management
Services (1994-Present); Senior Vice President, (1988),
Hartford Life.
Lynda Godkin, 42 General Counsel, 1996 Corporate Associate General Counsel and Corporate Secretary
Secretary, 1995 (1995-Present); Assistant General Counsel and Secretary
(1994); Counsel (1990), Hartford Life.
Lois W. Grady, 51 Vice President, 1993 Vice President (1993-Present); Assistant Vice President
(1988), Hartford Life.
David A. Hall, 42 Senior Vice President and Actuary, Senior Vice President and Actuary (1992-Present), Hartford
1992 Life.
Joseph Kanarek, 48 Vice President, 1991 Vice President (1991-Present), Hartford Life.
Robert A. Kerzner, 44 Vice President, 1994 Vice President (1994-Present); Regional Vice President
(1991); Life Sales Manager (1990), Hartford Life.
Kevin J. Kirk, 44 Vice President, 1992 Vice President (1992-Present); Assistant Vice President;
Assistant Director, Asset Management Services (1985);
Hartford Life.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
VOCATION OR EMPLOYMENT
POSITION WITH ITT HARTFORD, FOR PAST 5 YEARS;
NAME, AGE YEAR OF ELECTION OTHER DIRECTORSHIPS
- -------------------------------- ---------------------------------- -------------------------------------------------------------
<S> <C> <C>
Andrew W. Kohnke, 47 Vice President, 1992 Vice President (1992-Present); Assistant Vice President
(1989), Hartford Life.
Steven M. Maher, 41 Vice President and Actuary, 1993 Vice President and Actuary (1993-Present); Assistant Vice
President (1987), Hartford Life.
William B. Malchodi, Jr., 45 Vice President, 1994 Director or Vice President (1994-Present); Director of Taxes
Taxes, 1992 (1992-Present); Assistant General Counsel and Assistant
Director of Taxes (1986), Hartford Insurance Group.
Thomas M. Marra, 37 Executive Vice President, 1966 Executive Vice President and Director Individual Life and
Director, 1994* Annuity Division (1996-Present); Senior Vice President and
Director, Individual Life and Annuity Division (1993-1996);
Director of Individual Annuities (1991), Hartford Life.
Robert F. Nolan, 41 Vice President, 1995 Vice President (1995-Present), Assistant Vice President
Hartford Life; Manager Public Relations (1986), Aetna Life
and Casualty Insurance Co.
Joseph J. Noto, 44 Vice President, 1989 Vice President (1989-Present), Hartford Life.
Leonard E. Odell, Jr., 51 Senior Vice President, 1994 Senior Vice President (1994-Present); Vice President and
Director, 1994* Chief Actuary (1982), Hartford Life.
Michael C. O'Halloran, 59 Vice President, 1994 Associate Vice President (1994-Present); Senior Associate General
General Counsel, 1988 Counsel and Director (1988-Present), Law Department,
Hartford Insurance Group.
Craig D. Raymond, 35 Vice President, 1993 Chief Vice President and Chief Actuary (1994-Present); Vice
Actuary, 1994 President (1993); Assistant Vice President (1992); Actuary
(1989-1994), Hartford Life.
Lowndes A. Smith, 56 President and Chief Operating President and Chief Operating Officer (1989-Present),
Officer, 1989 Director, 1981* Hartford Life; Senior Vice President and Group Controller
(1987), Hartford Insurance Group.
Edward J. Sweeney, 39 Vice President, 1993 Vice President (1993-Present); Chicago Regional Manager
(1985-1993), Hartford Life.
James E. Trimble, 39 Vice President and Actuary, 1990 Vice President (1990-Present); Assistant Vice President
(1987-1990), Hartford Life.
Raymond P. Welnicki, 47 Senior Vice President, 1993 Senior Vice President (1994-Present); Vice President (1993),
Director, 1994* Hartford Life; Board of Directors, Ethix Corp., formerly
employed by Aetna Life & Casualty.
Walter C. Welsh, 49 Vice President, 1995 Vice President (1995-Present); Assistant Vice President
(1993), Hartford Life.
James J. Westervelt, 49 Senior Vice President, Group Senior Vice President and Group Controller (1994-Present);
Controller, 1994 Vice President and (1989), Hartford Insurance Group.
Lizabeth H. Zlatkus, 37 Vice President, 1994 Director, Vice President (1994-Present); Assistant Vice President
1994* (1992); Hartford Life; formerly Director, Hartford
Insurance Group.
<FN>
- ------------------------
* Denotes date of election to Board of Directors.
** ITT Hartford Affiliated Company.
</TABLE>
<PAGE>
28 Hartford Life Insurance Company
- --------------------------------------------------------------------------------
DISTRIBUTION OF THE POLICY
Hartford Life intends to sell the Policy in all jurisdictions where it is
licensed to do business. The Policy will be sold by life insurance sales
representatives who represent Hartford Life and who are registered
representatives of Hartford Equity Sales Company, Inc. ("HESCO"), or certain
other independent registered Broker-Dealers. Any sales representative or
employee will be qualified to sell variable life insurance policies under
applicable federal and state laws. Each Broker-Dealer is registered with the
Securities and Exchange Commission under the Securities Exchange Act of 1934 and
all are members of the National Association of Securities Dealers, Inc. HESCO is
the principal underwriter for the Policy. During the first Policy Year, the
maximum sales commission payable to Hartford Life agents, independent registered
insurance brokers, and other registered Broker-Dealers, is 45% of the premium
paid up to a Target Premium, 2.0% of premium paid between the Target Premium and
a 2nd Tier Target Premium and 1.0% of premium paid in excess of the 2nd Tier
Target Premium. In Policy Years 2 and later, sales representative commissions
will not exceed 2.0% of the premiums paid. In addition, expense allowances may
be paid. The sales representative may be required to return all or a portion of
the commissions paid if the Policy terminates prior to the second Policy
Anniversary.
SAFEKEEPING OF SEPARATE
ACCOUNT VL I'S ASSETS
The assets of the Separate Account are held by Hartford Life. The assets of
the Separate Account are kept physically segregated and held separate and apart
from the General Account of Hartford Life. Hartford Life maintains records of
all purchases and redemptions of shares of the Fund. Additional protection for
the assets of the Separate Account is afforded by Hartford Life's blanket
fidelity bond issued by Aetna Casualty and Surety Company, in the aggregate
amount of $50 million, covering all of the officers and employees of Hartford
Life.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A
CONTRACT DESCRIBED HEREIN.
It should be understood that any detailed description of the Federal income
tax consequences regarding the purchase of these Contracts cannot be made in
this Prospectus and that special tax rules may be applicable with respect to
certain purchase situations not discussed herein. In addition, no attempt is
made here to consider any applicable state or other tax laws. For detailed
information, a qualified tax adviser should always be consulted. This discussion
of Federal tax considerations is based upon Hartford Life's understanding of
current Federal income tax laws as they are currently interpreted.
TAXATION OF HARTFORD LIFE AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford Life which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("Code").
Accordingly, the Separate Account will not be taxed as a "regulated investment
company" under Subchapter M of the Code. Investment income and realized capital
gains on the assets of the Separate Account (the underlying Funds) are
reinvested and are taken into account in determining the value of the
Accumulation Units (see "Contract Benefits and Right -- Account Values," on page
). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.
Hartford Life does not expect to incur any Federal income tax on the
earnings or realized capital gains attributable to the Separate Account. Based
upon this expectation, no charge is currently being made to the Separate Account
for Federal income taxes. If Hartford Life incurs income taxes attributable to
the Separate Account or determines that such taxes will be incurred, it may
assess a charge for such taxes against the Separate Account.
INCOME TAXATION OF CONTRACT BENEFITS
For Federal income tax purposes, the Contracts should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Contract Owner is generally not taxed on
increments in the contract value until the Contract is partially or completely
surrendered. Section 7702 limits the amount of premium that may be invested in a
Contract that is treated as life insurance. Hartford Life intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
During the first fifteen Contract Years, an "income first" rule generally
applies to distributions of cash required
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
- --------------------------------------------------------------------------------
to be made under Code Section 7702 because of a reduction in benefits under the
Contract.
The Maturity Date Extension Rider allows a Contract Owner to extend the
Maturity Date to the date of the Insured's death. If the Maturity Date of the
Contract is extended by rider, Hartford Life believes that the Contract will
continue to be treated as a life insurance contract for federal income tax
purposes after the scheduled Maturity Date. However, due to the lack of specific
guidance on this issue, the result is not certain. If the Contract is not
treated as a life insurance contract for federal income tax purposes after the
scheduled Maturity Date, among other things, the Death Proceeds may be taxable
to the recipient. The Contract Owner should consult a qualified tax adviser
regarding the possible adverse tax consequences resulting from an extension of
the scheduled Maturity Date.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract"
under Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premium cannot be paid at a rate more rapidly than that allowed by
the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
Contract does not meet the specified computational rules for the "seven-pay
test" under Section 7702A(c). Therefore, the Contract will generally be treated
as a modified endowment contract for federal income tax purposes. However, an
exchange under Section 1035 of the Code of a life insurance contract issued
before June 21, 1988 will not cause the new Contract to be treated as a modified
endowment contract if no additional premiums are paid and there is no change in
the death benefit as the result of the exchange.
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is excluded from income and increments in value are not
subject to current taxation. However, a loan, distributions or other amounts
received from a modified endowment contract during the life of the Insured will
be taxed to the extent of any accumulated income in the contract (generally, the
excess of account value over premiums paid). Amounts that are taxable
withdrawals will be subject to a 10% additional tax, with certain exceptions.
All modified endowment contracts that are issued within any calendar year to
the same Contract Owner by one company or its affiliates shall be treated as one
modified endowment contract in determining the taxable portion of any loan or
distributions.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in
the Contract Owner's estate for purposes of federal estate tax if the last
surviving Insured owned the Contract. If the Contract Owner was not the last
surviving Insured, the fair market value of the Contract would be included in
the Contract Owner's estate upon the Contract Owner's death. Nothing would be
includible in the last surviving Insured's estate if he or she neither retained
incidents of ownership at death nor had given up ownership within three years
before death.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal estate
tax liability. In addition, an unlimited marital deduction may be available for
federal estate and gift tax purposes. The unlimited marital deduction permits
the deferral of taxes until the death of the surviving spouse (when the Death
Proceeds would be available to pay taxes due and other expenses incurred).
If the Contract Owner (whether or not he or she is an Insured) transfers
ownership of the Contract to someone two or more generations younger, the
transfer may be subject to the generation-skipping transfer tax, the taxable
amount being the value of the Contract. The generation-skipping transfer tax
provisions generally apply to transfers which would be subject to the gift and
estate tax rules. Individuals are generally allowed an aggregate generation
skipping transfer exemption of $1 million. Because these rules are complex, the
Contract Owner should consult with a qualified tax adviser for specific
information if ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Contract is not treated
as a life insurance contract, the Contract Owner will be subject to income tax
on the annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property
<PAGE>
30 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
project, and all interests in the same commodity are each treated as a single
investment. In addition, in the case of government securities, each government
agency or instrumentality shall be treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Contract Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford Life monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford Life
intends to administer all contracts subject to the diversification requirements
in a manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN
THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that incidents of ownership by the
contract owner, such as the ability to select and control investments in a
separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or revenue rulings under section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as of the date of this
Prospectus, no other such guidance has been issued. Further, Hartford Life does
not know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Contract Owner could be considered the owner of
the assets for tax purposes. Hartford Life reserves the right to modify the
contracts, as necessary, to prevent Contract Owners from being considered the
owners of the assets in the separate accounts.
LIFE INSURANCE PURCHASED FOR USE
IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Contract
Owner, such amounts will be subject to federal income tax withholding and
reporting, pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF CONTRACTS
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Contract Owners which are not individuals should consult a tax
adviser to determine the status of this proposed legislation and its potential
impact on the purchaser.
OTHER TAX CONSIDERATIONS
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Contract proceeds depend on the
circumstances of each Contract Owner or beneficiary. A tax adviser should be
consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT
ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
- --------------------------------------------------------------------------------
insurance purchasers that are U.S. citizens or residents. Purchasers that are
not U.S. citizens or residents will generally be subject to U.S. federal income
tax and withholding on taxable distributions from life insurance policies at a
30% rate, unless a lower treaty rate applies. In addition, purchasers may be
subject to state and/or municipal taxes and taxes that may be imposed by the
purchaser's country of citizenship or residence. Prospective purchasers are
advised to consult with a qualified tax advisor regarding U.S. state, and
foreign taxation with respect to a life insurance policy purchase.
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Policy,
Separate Account VL I or any of the Funds.
LEGAL MATTERS
Legal matters in connection with the issue and sale of the flexible premium
variable life insurance policies described in this Prospectus and the
organization of Hartford Life, its authority to issue the Policy under
Connecticut law and the validity of the forms of the Policy under Connecticut
law and legal matters relating to the Federal securities and income tax laws
have been passed on by Lynda Godkin, General Counsel and Secretary of Hartford
Life.
EXPERTS
The financial statements and schedules for Hartford Life Insurance Company
and Hartford Life Insurance Company Separate Account VL I included in this
Prospectus and Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said reports. Reference is made to
said report on the financial statements of Hartford Life Insurance Company (the
depositor), which includes an explanatory paragraph with respect to the adoption
of new accounting standards changing the method of accounting for debt and
equity securities, effective January 1, 1994, effective January 1, 1994. The
principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
The hypothetical Policy illustrations included in this Prospectus and
Registration Statement have been approved by Ken A. McCullum, FSA, and MAAA,
Director of Individual Life Product Development, and are included in reliance
upon his opinion as to their reasonableness.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning Separate Account VL I, Hartford Life, and the Policy.
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
APPENDIX A
ILLUSTRATION OF DEATH BENEFITS, ACCOUNT VALUES
AND CASH SURRENDER VALUES
The tables in Appendix A illustrate the way in which a Policy operates. They
show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The illustrations assume the
following: a male, preferred, age 55, and a female, preferred, age 50, with
$1,000,000 of Face Amount and a premium of $15,500.00 paid in all years; a male,
preferred, age 55, and a female, preferred, age 50, with $750,000 of Face Amount
and $250,000 of Face Amount and a premium of $7,500.00 paid in all years; a
male, preferred, age 65, and a female, preferred, age 65, with $1,000,000 of
Face Amount and a premium of $27,000.00 paid for in all years; and a male,
preferred, age 65, and a female, preferred, age 65 with $750,000 of Face Amount
and $250,000 of Supplemental Face Amount and a premium of $21,500.00 paid in all
years.
The death benefit and surrender value for a Policy would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual Policy
Years. They would also differ if any contract loan were made during the period
of time illustrated.
The tables reflect the deductions of current Policy charges and guaranteed
Policy charges for a single gross interest rate. The death benefits and
surrender values would change if the current Cost of Insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.70% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.70% average daily charge) of -.70%, 5.30% and 11.30%,
respectively.
In addition, the death benefit and surrender value as of the end of each
Policy Year take into account the front-end sales load, federal tax charge,
premium tax charge, Cost of Insurance Charge, Monthly Administrative Fee, Issue
Charge, and Mortality and Expense Risk Charge. For purpose of the illustrations
in this Prospectus, the premium tax charge and federal tax charge is assumed to
be an average of 3.5%.
The hypothetical returns shown in the tables are without any tax charges
that may be allocable to the Separate Account in the future. In order to produce
after tax returns of 0%, 6%, and 12%, the Separate Account would have to earn a
sufficient amount in excess of 0% or 6% or 12% to cover any tax charges (see
"Deductions and Charges -- Charges Against the Separate Account -- Taxes," page
).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Hartford Life will furnish upon request, a comparable illustration
reflecting the proposed insureds age, risk classification, Face Amount or
initial premium requested, and reflecting guaranteed Cost of Insurance rates.
Hartford Life will also furnish an additional similar illustration reflecting
current Cost of Insurance rates which may be less than, but never greater than,
the guaranteed Cost of Insurance rates.
<PAGE>
Hartford Life Insurance Company 33
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- ------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- ---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 1,880 0*** 250,000 1,880 0*** 250,000
2 6,996 3,849 849*** 250,000 3,849 849*** 250,000
3 10,758 5,724 2,724 250,000 5,724 2,724 250,000
4 14,708 7,498 4,498 250,000 7,498 4,498 250,000
5 18,856 9,247 6,247 250,000 9,168 6,168 250,000
6 23,212 10,887 8,159 250,000 10,724 7,996 250,000
7 27,785 12,433 9,978 250,000 12,153 9,698 250,000
8 32,586 13,878 11,695 250,000 13,442 11,259 250,000
9 37,628 15,212 13,302 250,000 14,575 12,665 250,000
10 42,922 16,429 14,792 250,000 15,539 13,901 250,000
11 48,481 17,807 16,445 250,000 16,399 15,037 250,000
12 54,317 19,172 18,082 250,000 17,062 15,972 250,000
13 60,446 20,385 19,568 250,000 17,518 16,701 250,000
14 66,880 21,431 20,886 250,000 17,745 17,200 250,000
15 73,637 22,292 22,020 250,000 17,716 17,443 250,000
16 80,731 22,949 22,949 250,000 17,401 17,401 250,000
17 88,180 23,379 23,379 250,000 16,766 16,766 250,000
18 96,002 23,548 23,548 250,000 15,761 15,761 250,000
19 104,214 23,422 23,422 250,000 14,331 14,331 250,000
20 112,838 22,967 22,967 250,000 12,421 12,421 250,000
25 162,869 15,832 15,832 250,000 0 0 0
35 308,218 0 0 250,000 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,182 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
34 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ---------- ---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,026 0*** 250,000 2,026 0*** 250,000
2 6,996 4,264 1,264*** 250,000 4,264 1,264*** 250,000
3 10,758 6,536 3,536 250,000 6,536 3,536 250,000
4 14,708 8,838 5,838 250,000 8,838 5,838 250,000
5 18,856 11,245 8,245 250,000 11,164 8,164 250,000
6 23,212 13,678 10,951 250,000 13,506 10,779 250,000
7 27,785 16,154 13,699 250,000 15,853 13,398 250,000
8 32,586 18,666 16,484 250,000 18,189 16,006 250,000
9 37,628 21,207 19,297 250,000 20,499 18,589 250,000
10 42,922 23,772 22,134 250,000 22,767 21,130 250,000
11 48,481 26,694 25,331 250,000 25,086 23,724 250,000
12 54,317 29,775 28,685 250,000 27,344 26,254 250,000
13 60,446 32,887 32,070 250,000 29,529 28,711 250,000
14 66,880 36,021 35,476 250,000 31,619 31,074 250,000
15 73,637 39,162 38,890 250,000 33,585 33,313 250,000
16 80,731 42,297 42,297 250,000 35,397 35,397 250,000
17 88,180 45,410 45,410 250,000 37,019 37,019 250,000
18 96,002 48,472 48,472 250,000 38,397 38,397 250,000
19 104,214 51,459 51,459 250,000 39,475 39,475 250,000
20 112,838 54,342 54,342 250,000 40,193 40,193 250,000
25 162,869 67,602 67,602 250,000 35,923 35,923 250,000
35 308,218 56,159 56,159 250,000 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,597 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 35
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,173 0*** 250,000 2,173 0*** 250,000
2 6,996 4,698 1,698*** 250,000 4,698 1,698*** 250,000
3 10,758 7,420 4,420 250,000 7,420 4,420 250,000
4 14,708 10,354 7,354 250,000 10,354 7,354 250,000
5 18,856 13,600 10,600 250,000 13,517 10,517 250,000
6 23,212 17,105 14,377 250,000 16,925 14,197 250,000
7 27,785 20,915 18,460 250,000 20,952 18,137 250,000
8 32,586 25,055 22,873 250,000 24,535 22,353 250,000
9 37,628 29,554 27,644 250,000 28,770 26,860 250,000
10 42,922 34,447 32,809 250,000 33,319 31,681 250,000
11 48,481 40,191 38,828 250,000 38,355 36,992 250,000
12 54,317 46,601 45,511 250,000 43,793 42,703 250,000
13 60,446 53,629 52,811 250,000 49,680 48,862 250,000
14 66,880 61,341 60,796 250,000 56,058 55,513 250,000
15 73,637 69,814 69,541 250,000 62,976 62,704 250,000
16 80,731 79,136 79,136 250,000 70,490 70,490 250,000
17 88,180 89,410 89,410 250,000 78,668 78,668 250,000
18 96,002 100,750 100,750 250,000 87,577 87,577 250,000
19 104,214 113,291 113,291 250,000 97,304 97,304 250,000
20 112,838 127,198 127,198 250,000 107,961 107,961 250,000
25 162,869 226,444 226,444 250,000 181,353 181,353 250,000
35 308,218 681,239 681,239 250,000 531,802 531,802 250,000
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $2,031 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
36 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ---------- ---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 1,872 0*** 251,872 1,872 0*** 251,872
2 6,996 3,824 824*** 253,824 3,824 824*** 253,824
3 10,758 5,674 2,674 255,674 5,674 2,674 255,674
4 14,708 7,414 4,414 257,414 7,414 4,414 257,414
5 18,856 9,120 6,120 259,120 9,038 6,038 259,038
6 23,212 10,707 7,979 260,707 10,537 7,809 260,537
7 27,785 12,189 9,734 262,189 11,896 9,441 261,896
8 32,586 13,557 11,375 263,557 13,101 10,919 263,101
9 37,628 14,802 12,892 264,802 14,135 12,225 264,135
10 42,922 15,916 14,278 265,916 14,982 13,344 264,982
11 48,481 17,176 15,813 267,176 15,705 14,343 265,705
12 54,317 18,414 17,324 268,414 16,211 15,121 266,211
13 60,446 19,480 18,662 269,480 16,490 15,673 266,490
14 66,880 20,355 19,810 270,355 16,520 15,975 266,520
15 73,637 21,020 20,748 271,020 16,273 16,000 266,273
16 80,731 21,454 21,454 271,454 15,721 15,721 265,721
17 88,180 21,634 21,634 271,634 14,833 14,833 264,833
18 96,002 21,523 21,523 271,523 13,561 13,561 263,561
19 104,214 21,085 21,085 271,085 11,856 11,856 261,856
20 112,838 20,290 20,290 270,290 9,675 9,675 259,675
25 162,869 11,274 11,274 261,274 0 0 0
35 308,218 0 0 0 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,157 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 37
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ ------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ---------- ---------- ---------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,017 0*** 252,017 2,017 0*** 252,017
2 6,996 4,237 1,237*** 254,237 4,237 1,237*** 254,237
3 10,758 6,479 3,479 256,479 6,479 3,479 256,479
4 14,708 8,736 5,736 258,736 8,736 5,736 258,736
5 18,856 11,087 8,087 261,087 11,002 8,002 261,002
6 23,212 13,444 10,717 263,444 13,264 10,537 263,264
7 27,785 15,824 13,369 265,824 15,506 13,051 265,506
8 32,586 18,215 16,032 268,215 17,710 15,528 267,710
9 37,628 20,606 18,696 270,606 19,854 17,944 269,854
10 42,922 22,988 21,351 272,988 21,916 20,279 271,916
11 48,481 25,690 24,327 275,690 23,980 22,617 273,980
12 54,317 28,518 27,428 278,518 25,926 24,836 275,926
13 60,446 31,321 30,504 281,321 27,737 26,919 277,737
14 66,880 34,080 33,535 284,080 29,380 28,835 279,380
15 73,637 36,770 36,498 286,770 30,817 30,545 280,817
16 80,731 39,363 39,363 289,363 32,005 32,005 282,005
17 88,180 41,828 41,828 291,828 32,895 32,895 282,895
18 96,002 44,119 44,119 294,119 33,420 33,420 283,420
19 104,214 46,188 46,188 296,188 33,509 33,509 283,509
20 112,838 47,986 47,986 297,986 33,088 33,088 283,088
25 162,869 52,781 52,781 302,781 20,679 20,679 270,679
35 308,218 0 0 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,570 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
38 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------------- --------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- ----------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,163 0*** 252,163 2,163 0*** 252,163
2 6,996 4,668 1,668*** 254,668 4,668 1,668*** 254,668
3 10,758 7,354 4,354 257,354 7,354 4,354 257,354
4 14,708 10,233 7,233 260,233 10,233 7,233 260,233
5 18,856 13,404 10,404 263,404 13,316 10,316 263,316
6 23,212 16,804 14,076 266,804 16,613 13,885 266,613
7 27,785 20,472 18,017 270,472 20,128 17,673 270,128
8 32,586 24,425 22,242 274,425 23,866 21,684 273,866
9 37,628 28,679 26,769 278,679 27,831 25,921 277,831
10 42,922 33,258 31,620 283,258 32,026 30,389 282,026
11 48,481 38,601 37,238 288,601 36,600 35,237 286,600
12 54,317 44,523 43,433 294,523 41,442 40,352 291,442
13 60,446 50,925 50,108 300,925 46,570 45,753 296,570
14 66,880 57,842 57,297 307,842 51,987 51,442 301,987
15 73,637 65,307 65,035 315,307 57,692 57,420 307,692
16 80,731 73,355 73,355 323,355 63,683 63,683 313,683
17 88,180 82,024 82,024 332,024 69,952 69,952 319,952
18 96,002 91,340 91,340 341,340 76,475 76,475 326,475
19 104,214 101,336 101,336 351,336 83,222 83,222 333,222
20 112,838 112,046 112,046 362,046 90,166 90,166 340,166
25 162,869 179,944 179,944 429,944 126,697 126,697 376,697
35 308,218 396,129 396,129 646,129 163,485 163,485 413,485
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $2,001 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 39
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.70% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 1,869 0*** 253,250 1,869 0*** 253,250
2 6,996 3,814 814*** 256,500 3,814 814*** 256,500
3 10,758 5,650 2,650 259,750 5,650 2,650 259,750
4 14,708 7,369 4,369 263,000 7,369 4,369 263,000
5 18,856 9,048 6,048 266,250 8,964 5,964 266,250
6 23,212 10,597 7,870 269,500 10,422 7,694 269,500
7 27,785 12,031 9,576 272,750 11,727 9,272 272,750
8 32,586 13,338 11,156 276,000 12,861 10,678 276,000
9 37,628 14,506 12,596 279,250 13,802 11,892 279,250
10 42,922 15,525 13,887 282,500 14,530 12,893 282,500
11 48,481 16,671 15,308 285,750 15,102 13,739 285,750
12 54,317 17,781 16,691 289,000 15,416 14,326 289,000
13 60,446 18,691 17,874 292,250 15,455 14,638 292,250
14 66,880 19,377 18,832 295,500 15,187 14,642 295,500
15 73,637 19,811 19,539 298,750 14,571 14,298 298,750
16 80,731 19,963 19,963 302,000 13,561 13,561 302,000
17 88,180 19,798 19,798 305,250 12,105 12,105 305,250
18 96,002 19,264 19,264 308,500 10,127 10,127 308,500
19 104,214 18,308 18,307 311,750 7,546 7,546 311,750
20 112,838 16,872 16,872 315,000 4,274 4,274 315,000
25 162,869 2,177 2,177 331,250 0 0 0
35 308,218 0 0 0 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,147 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
40 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------ -----------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,015 0*** 253,250 2,015 0*** 253,250
2 6,996 4,227 1,227*** 256,500 4,227 1,227*** 256,500
3 10,758 6,457 3,457 259,750 6,457 3,457 259,750
4 14,708 8,697 5,697 263,000 8,697 5,697 263,000
5 18,856 11,024 8,024 266,250 10,937 7,937 266,250
6 23,212 13,350 10,623 269,500 13,165 10,438 269,500
7 27,785 15,691 13,236 272,750 15,363 12,908 272,750
8 32,586 18,033 15,851 276,000 17,511 15,328 276,000
9 37,628 20,365 18,455 279,250 19,582 17,672 279,250
10 42,922 22,676 21,038 282,500 21,554 19,916 282,500
11 48,481 25,293 23,930 285,750 23,502 22,139 285,750
12 54,317 28,027 26,937 289,000 25,304 24,214 289,000
13 60,446 30,722 29,905 292,250 26,937 26,120 292,250
14 66,880 33,354 32,809 295,500 28,360 27,815 295,500
15 73,637 35,894 35,621 298,750 29,524 29,251 298,750
16 80,731 38,310 38,310 302,000 30,371 30,371 302,000
17 88,180 40,566 40,566 305,250 30,838 30,838 305,250
18 96,002 42,607 42,607 308,500 30,831 30,831 308,500
19 104,214 44,374 44,374 311,750 30,249 30,249 311,750
20 112,838 45,806 45,806 315,000 28,981 28,981 315,000
25 162,869 47,282 47,282 331,250 7,376 7,376 331,250
35 308,218 0 0 0 0 0 0
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,560 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 41
- --------------------------------------------------------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
DEATH BENEFIT OPTION: LEVEL
$250,000 FACE AMOUNT
ISSUE AGE 45 MALE PREFERRED
$3,250 SCHEDULED PREMIUM
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.30% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS -------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
------- ---------------- ----------- ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 3,413 2,161 0*** 253,250 2,161 0*** 253,250
2 6,996 4,659 1,659*** 256,500 4,659 1,659*** 256,500
3 10,758 7,335 4,335 259,750 7,335 4,335 259,750
4 14,708 10,200 7,200 263,000 10,200 7,200 263,000
5 18,856 13,353 10,353 266,250 13,265 10,265 266,250
6 23,212 16,733 14,006 269,500 16,539 13,812 269,500
7 27,785 20,380 17,925 272,750 20,029 17,574 272,750
8 32,586 24,311 22,128 276,000 23,741 21,558 276,000
9 37,628 28,545 26,635 279,250 27,678 25,768 279,250
10 42,922 33,108 31,470 282,500 31,847 30,209 282,500
11 48,481 38,444 37,082 285,750 36,399 35,037 285,750
12 54,317 44,376 43,286 289,000 41,233 40,143 289,000
13 60,446 50,814 49,996 292,250 46,369 45,551 292,250
14 66,880 57,804 57,259 295,500 51,822 51,277 295,500
15 73,637 65,397 65,124 298,750 57,603 57,331 298,750
16 80,731 73,647 73,647 302,000 63,725 63,725 302,000
17 88,180 82,622 82,622 305,250 70,201 70,201 305,250
18 96,002 92,383 92,383 308,500 77,033 77,033 308,500
19 104,214 103,011 103,011 311,750 84,226 84,226 311,750
20 112,838 114,602 114,602 315,000 91,792 91,792 315,000
25 162,869 193,630 193,630 331,250 136,348 136,348 331,250
35 308,218 570,647 570,647 573,656 290,653 290,653 363,750
* THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
** THESE VALUES REFLECT INVESTMENT RESULTS USING GUARANTEED COST OF INSURANCE
RATES, ADMINISTRATIVE FEES, AND MORTALITY AND EXPENSE RISK RATES.
*** IF YOU SURRENDER YOUR POLICY DURING THE FIRST TWO POLICY YEARS, YOU WILL
RECEIVE A REFUND IN ADDITION TO THE CASH VALUES SHOWN. THE REFUND PLUS THE
CASH VALUE WOULD BE $0 IN YEAR ONE AND $1,992 IN YEAR TWO.
THESE VALUES REFLECT CURRENT FRONT-END SALES LOADS OF 2% IN YEARS 1 THROUGH
10 AND 0% THEREAFTER, AND GUARANTEED FRONT-END SALES LOADS OF 2% IN ALL
YEARS. THE SURRENDER CHARGE EFFECTIVE IN ANY YEAR CAN BE DETERMINED BY
SUBTRACTING THE CASH SURRENDER VALUE FROM THE ACCOUNT VALUE.
THE DEATH BENEFIT MAY, AND THE ACCOUNT VALUES AND CASH VALUES WILL DIFFER IF
PREMIUMS ARE PAID IN DIFFERENT AMOUNTS OR FREQUENCIES.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 42
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
Item 1.
FINANCIAL STATEMENTS
The following unaudited financial statements, reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, the results of operations
and the cash flows for the periods presented. Certain reclassifications of prior
year results were made to conform to current presentation. Interim results are
not indicative of the results which may be expected for any other interim period
or the full year. For a description of accounting policies, see Notes to
Consolidated Financial Statements in the 1995 Form 10-K.
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
QUARTER SIX MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
---------- --------------
1996 1995 1996 1995
---- ---- ------ ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Premiums and other considerations $299 $270 $ 943 $ 720
Net investment income 318 336 651 675
Net realized losses on investments (1) (7) (1) (6)
---- ---- ------ ------
616 599 1,593 1,389
---- ---- ------ ------
Benefits, Claims and Expenses:
Benefits, claims and claim adjustment expenses 392 350 788 716
Amortization of deferred policy acquisition costs 63 50 129 92
Dividends to policyholders 61 69 347 297
Other insurance expenses 34 85 198 193
---- ---- ------ ------
550 554 1,462 1,298
---- ---- ------ ------
Income Before Income Tax 66 45 131 91
Income tax expense 23 15 45 30
---- ---- ------ ------
Net Income $ 43 $ 30 $ 86 $ 61
---- ---- ------ ------
---- ---- ------ ------
</TABLE>
<PAGE>
43 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-------- ------------
(UNAUDITED)
<S> <C> <C>
Assets:
Investments:
Fixed maturities, available for sale, at fair value $ 13,683 $14,400
Equity securities, at fair value 65 63
Mortgage loans, at outstanding principal balance 57 265
Policy loans, at outstanding balance 3,756 3,381
Other investments 99 156
-------- ------------
17,660 18,265
Cash 46 46
Premiums and amounts receivable 121 165
Reinsurance recoverable 6,696 6,221
Accrued investment income 399 394
Deferred policy acquisition costs 2,488 2,188
Deferred income tax 601 420
Other assets 205 234
Separate account assets 42,569 36,264
-------- ------------
$ 70,785 $64,197
-------- ------------
-------- ------------
Liabilities and Stockholder's Equity
Future policy benefits $ 2,677 $ 2,373
Other policyholder funds 22,570 22,598
Other liabilities 1,294 1,233
Separate account liabilities 42,569 36,264
-------- ------------
69,110 62,468
-------- ------------
Common stock -- authorized 1,000 shares, $5,690 par
value,
Issued and outstanding 1,000 shares 6 6
Capital surplus 1,045 1,007
Unrealized loss on investments, net of tax (235) (57)
Retained earnings 859 773
-------- ------------
1,675 1,729
-------- ------------
$ 70,785 $64,197
-------- ------------
-------- ------------
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 44
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
----------------
1996 1995
------- -------
(UNAUDITED)
<S> <C> <C>
Operating Activities:
Net Income $ 86 $ 61
Adjustments to net income:
Net realized investment losses before tax 1 4
Net policyholder investment (gains) losses before tax (4) 2
Net deferred policy acquisition costs (300) (181)
Net amortization of premium on fixed maturities 7 7
Deferred income tax benefits (88) (120)
Decrease in premiums and amounts receivable 20 3
Decrease (increase) in other assets 26 (33)
Increase in reinsurance recoverable (264) (60)
Increase in liability for future policy benefits 304 354
Increase in other liabilities 150 57
(Increase) decrease in accrued investment income (5) 7
------- -------
Cash (Used For) Provided By Operating Activities (67) 101
------- -------
Investing Activities:
Purchases of fixed maturity investments (2,717) (2,150)
Proceeds from sales of fixed maturity investments 1,348 2,835
Maturities and principal paydowns of long-term investments 1,469 574
Net purchases of other investments (116) (1,240)
Net sales (purchases) of short-term investments 232 (894)
------- -------
Cash Provided By (Used For) Investing Activities 216 (875)
------- -------
Financing Activities:
Net (disbursements) receipts for investment and UL-type
contracts (debited) credited to policyholder account balances (187) 837
Capital contributions 38 --
------- -------
Cash (Used For) Provided By Financing Activities (149) 837
------- -------
Net Increase In Cash -- 63
Cash at beginning of period 46 20
------- -------
Cash At End Of Period $ 46 $ 83
------- -------
------- -------
</TABLE>
<PAGE>
45 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(IN MILLIONS)
QUARTER ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
ILAD AMS SPECIALTY RUNOFF TOTAL
---------- ---------- ---------- ---------- ----------
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $252 $218 $100 $ 90 $210 $199 $ 54 $ 92 $616 $599
Benefits, Claims, Expenses and
Taxes 204 186 96 85 204 193 69 105 573 569
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Net Income (Loss) $ 48 $ 32 $ 4 $ 5 $ 6 $ 6 $(15) $(13) $ 43 $ 30
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>
INDIVIDUAL LIFE AND ANNUITY DIVISION (ILAD)
The premiums, investment income, management and maintenance fees and cost of
insurance associated with this growing asset base continue to be the source of
ILAD's increased revenues, up 16% from prior year. New deposits of fixed and
variable annuities in the three months ended June 30, 1996 were approximately
$2.7 billion, an increase of over 90% from prior year sales or $1.4 billion, but
are not reported as revenues. Net income, up 50% from the same period last year,
continues to grow as earnings are generated from an existing asset base.
Revenue, new deposit, and net income increases are all indicative of
exceptionally strong, stable growth.
ASSET MANAGEMENT SERVICES (AMS)
Continuing to be an industry leader in deferred compensation products, revenues
in this segment grew by approximately 14% over the same period last year.
Included in 1995 results is a one time benefit of approximately $2 million.
Excluding this benefit, net income rose 33% over prior year. Asset Management
Services is currently engaged in a restructuring process that is anticipated to
result in new product development as well as expense reductions.
SPECIALTY
Net Income in the Specialty segment held steady in the second quarter as
compared to the same period last year. In August of 1996, Congress passed COLI
legislation which provides for a three year phase-out of the interest deduction
on loans. It is expected that the President will sign this bill. In anticipation
of unfavorable tax legislation there were no new deposits of leveraged COLI, but
new products, such as variable COLI and other non-qualified deferred
compensation vehicles, and new international ventures are being developed to
mitigate lost earnings due to leveraged COLI.
RUNOFF
The Runoff segment consists of a closed block of guaranteed rate contracts (GRC)
formerly part of the AMS segment of business. GRC results have been negatively
affected by lower investment earnings on mortgaged-backed securities due to
prepayments experienced in excess of assumed levels. Hartford Life Insurance
Company (HLIC) is considering portfolio management strategies which may
accelerate the recognition of the closed book GRC loss as disclosed in HLIC's
1995 Form 10K Annual Report.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 46
- --------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S NARRATIVE ANALYSIS OF
RESULTS OF OPERATIONS
(IN MILLIONS)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
ILAD AMS SPECIALTY RUNOFF TOTAL
---------- ---------- ---------- ---------- --------------
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $524 $407 $200 $196 $753 $593 $116 $193 $1,593 $1,389
Benefits, claims, expenses
and taxes 430 340 192 187 739 582 146 219 1,507 1,328
---- ---- ---- ---- ---- ---- ---- ---- ------ ------
Net income (loss) $ 94 $ 67 $ 8 $ 9 $ 14 $ 11 $(30) $(26) $ 86 $ 61
---- ---- ---- ---- ---- ---- ---- ---- ------ ------
---- ---- ---- ---- ---- ---- ---- ---- ------ ------
</TABLE>
INDIVIDUAL LIFE AND ANNUITY DIVISION (ILAD)
Growth in fixed and variable annuity sales, as well as several assumption
reinsurance transactions in the last several years have increased the assets
under management in this segment to approximately $39 billion through June 1996.
The premiums, investment income, management and maintenance fees and cost of
insurance associated with this growing asset base continue to be the source of
ILAD's increased revenues. New deposits of fixed and variable annuities in the
first six months of 1996 were approximately $5 billion, but are not reported as
revenues, an increase over prior year sales of $1.5 billion or 42%.
ASSET MANAGEMENT SERVICES (AMS)
This segment is one of the top providers of deferred compensation products in
the country. Net income increased by 14% over prior year, excluding a one time
benefit of approximately $2 million in 1995. Asset Management services is
currently engaged in a restructuring process that is anticipated to result in
new product development as well as expense reductions.
SPECIALTY
Increased net income in the Specialty segment is attributable to net investment
income and other revenues on the existing block of corporate owned life
insurance (COLI) business. In August of 1996 Congress passed COLI legislation
which provides for a three year phase-out of the interest deduction on loans. It
is anticipated that the President will sign this bill. Although there were no
new deposits of leveraged COLI in the first half of 1996, new products,
including variable COLI and other non-qualified deferred compensation vehicles,
are being developed. Also, expansion into new international ventures should
further mitigate the earnings lost due to leveraged COLI.
RUNOFF
The Runoff segment consists of a closed block of guaranteed rate contracts (GRC)
formerly part of the AMS segment of business. GRC results have been negatively
affected by lower investment earnings on mortgaged-backed securities due to
prepayments experienced in excess of assumed levels. Hartford Life Insurance
Company (HLIC) is considering portfolio management strategies which may
accelerate the recognition of the closed book GRC loss as disclosed in HLIC's
1995 Form 10K Annual Report.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules 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 consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
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
audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Hartford Life Insurance Company and subsidiaries as of December 31, 1995 and
1994, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995 in conformity with generally
accepted accounting principles.
As discussed in Note 1 in Notes to Consolidated Financial Statements, Hartford
Life Insurance Company adopted new accounting standards promulgated by the
Financial Accounting Standards Board, changing its methods of accounting, as of
January 1, 1994, for debt and equity securities.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in
the Index to Consolidated Financial Statements and Schedules are presented for
purposes of complying with the Securities and Exchange Commission's rules and
are not a required part of the basic consolidated financial statements. These
schedules have been subjected to the auditing procedures applied in the audits
of the basic consolidated financial statements and, in our opinion, fairly
state in all material respects the financial data required to be set forth
therein in relation to the basic consolidated financial statements taken as a
whole.
/s/ ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 24, 1996 (except with respect to the matter discussed
in Note 10 as to which the date is October 18, 1996)
F-1
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
Report of Management F-1
Report of Independent Public Accountants F-2
Consolidated Statements of Income for the three years ended
December 31, 1995 F-3
Consolidated Balance Sheets as of December 31, 1995 and 1994 F-4
Consolidated Statements of Stockholder's Equity for the three
years ended December 31, 1995 F-5
Consolidated Statements of Cash Flows for the three years
ended December 31, 1995 F-6
Notes to Consolidated Financial Statements F-7 thru F-19
Summary of Investments (Other than Investments in Affiliates) S-1
Supplemental Insurance Information S-2
Reinsurance S-3
All schedules not listed above have been omitted because they are not
applicable or the amounts are insignificant, immaterial or the information
has been otherwise supplied in the financial statements or notes thereto.
REPORT OF MANAGEMENT
The management of Hartford Life Insurance Company and subsidiaries is
responsible for the preparation and integrity of the information contained in
the accompanying consolidated financial statements and other sections of the
Annual Report. The consolidated financial statements are prepared in
accordance with generally accepted accounting principles, and, where
necessary, include amounts that are based on management's informed judgments
and estimates. Management believes these statements present fairly Hartford
Life's financial position and results of operations, and, that any other
information contained in the Annual Report is consistent with the financial
statements.
Management has made available Hartford Life's financial records to
Arthur Andersen, LLP, independent public accountants, in order for them to
perform an audit of Hartford Life's consolidated financial statements. Their
report appears on Page F-2.
An essential element in meeting management's responsibilities is Hartford
Life's system of internal controls. These controls, which include accounting
controls and the internal auditing program, are designed to provide
reasonable assurance that assets are safeguarded, and transactions are
properly authorized, executed and recorded. The controls, which are
documented and communicated to employees in the form of written codes of
conduct and policies and procedures, provide for the careful selection of
personnel and for appropriate division of responsibility. Management
continually monitors for compliance, while Hartford Life's internal auditors
independently assess the effectiveness of the controls and make
recommendations for improvement. Also, Arthur Andersen LLP took into
consideration Hartford Life's system of internal controls in determining the
nature, timing, and extent of its audit tests.
Another important element is management's recognition of its responsibility
for fostering a strong, ethical climate, thereby ensuring that Hartford
Life's affairs are transacted according to the highest standards of personal
and professional conduct. Hartford Life has a long-standing reputation of
integrity in business conduct and utilizes communication and education to
create and fortify a strong compliance culture.
The Audit Committee of the Board of Directors of ITT Hartford, composed of
non-employee directors, meets periodically with the external and internal
auditors to evaluate the effectiveness of the work performed by them in
discharging their respective responsibilities and to ensure their
independence and free access to the Committee.
F-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------- ------- ------
<S> <C> <C> <C>
REVENUES
Premiums and other considerations $1,487 $1,100 $747
Net investment income 1,328 1,292 1,051
Net realized (losses) gains (11) 7 16
------ ------ -----
TOTAL REVENUES 2,804 2,399 1,814
------ ------ -----
BENEFITS, CLAIMS AND EXPENSES
Benefits, claims and claim
adjustment expenses 1,422 1,405 1,046
Dividends to policyholders 675 419 227
Amortization of deferred policy
acquisition costs 199 145 113
Other insurance expense 317 227 210
------ ------ -----
TOTAL BENEFITS, CLAIMS AND EXPENSES 2,613 2,196 1,596
------ ------ -----
INCOME BEFORE INCOME TAX EXPENSE 191 203 218
Income tax expense 62 65 75
------ ------ -----
NET INCOME $129 $138 $143
------ ------ -----
------ ------ -----
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-3
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
AS OF DECEMBER 31,
------------------
1995 1994
------- --------
ASSETS
<S> <C> <C>
Investments
Fixed maturities
available for sale, at market value
(amortized cost of $14,440 and $14,464) $14,400 $13,429
Equity securities, at market value
(cost of $61 and $76) 63 68
Mortgage loans, at outstanding balance 265 316
Policy loans, at outstanding balance 3,381 2,614
Other investments, at cost 156 107
------- -------
TOTAL INVESTMENTS 18,265 16,534
Cash 46 20
Premiums and amounts receivable 165 160
Reinsurance recoverable 6,221 5,466
Accrued investment income 394 378
Deferred policy acquisition costs 2,188 1,809
Deferred income tax 420 590
Other assets 234 83
Separate account assets 36,264 22,809
------- -------
TOTAL ASSETS $64,197 $47,849
------- -------
------- -------
LIABILITIES
Future policy benefits $2,373 $1,890
Other policyholder funds 22,598 21,328
Other liabilities 1,233 1,000
Separate account liabilities 36,264 22,809
------- -------
TOTAL LIABILITIES 62,468 47,027
------- -------
Commitments and contingencies (Note 9)
STOCKHOLDER'S EQUITY
Common stock
Authorized 1,000 shares, $5,690 par value
Issued and outstanding 1,000 shares 6 6
Additional paid-in capital 1,007 826
Retained earnings 773 644
Unrealized loss on investments, net of tax (57) (654)
------- -------
TOTAL STOCKHOLDER'S EQUITY 1,729 822
------- -------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $64,197 $47,849
------- -------
------- -------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-4
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
(IN MILLIONS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
UNREALIZED LOSS TOTAL
COMMON ADDITIONAL RETAINED ON INVESTMENTS, STOCKHOLDER'S
STOCK PAID-IN-CAPITAL EARNINGS NET OF TAX EQUITY
------ --------------- -------- --------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992 $6 $498 $373 $0 $877
Net income - - 143 - 143
Capital contribution - 180 - - 180
Excess of assets over liabilities
on reinsurance assumed from affiliate - (2) - - (2)
Change in unrealized loss on investments, net of tax - - - (5) (5)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1993 6 676 516 (5) 1,193
------ --------------- -------- --------------- -------------
Net income - - 138 - 138
Capital contribution - 150 - - 150
Dividend paid - - (10) - (10)
Change in unrealized loss on investments, net of tax* - - - (649) (649)
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1994 6 826 644 (654) 822
------ --------------- -------- --------------- -------------
Net income - - 129 - 129
Capital contribution - 181 - - 181
Change in unrealized loss on investments, net of tax - - - 597 597
------ --------------- -------- --------------- -------------
BALANCE, DECEMBER 31, 1995 $6 $1,007 $773 ($57) $1,729
------ --------------- -------- --------------- -------------
------ --------------- -------- --------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(*) The 1994 change in unrealized loss on investments, net of tax, included an
unrealized gain of $91 due to adoption of SFAS No. 115 as discussed in Note 1(b)
of Notes to Consolidated Financial Statements.
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-5
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------
1995 1994 1993
------------- -------------- -------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $129 $138 $143
Adjustments to net income:
Net realized (losses) gains 11 (7) (16)
(Decrease) increase in liability to policyholders for realized gains (3) 5 (15)
Net amortization of premium on fixed maturities 21 41 2
Provision for deferred income taxes (172) (128) (121)
Increase in deferred policy acquisition costs (379) (441) (292)
(Increase) decrease in premiums and amounts receivable (81) 10 (28)
Increase in accrued investment income (16) (106) (4)
(Increase) decrease in other assets (177) 101 (36)
(Increase) decrease in reinsurance recoverable (35) 75 (121)
Increase in liability for future policy benefits 483 224 360
Increase in other liabilities 281 191 176
------------- -------------- -------------
CASH PROVIDED BY OPERATING ACTIVITIES 62 103 48
------------- -------------- -------------
INVESTING ACTIVITIES
Purchases of fixed maturities investments (6,228) (9,127) (12,406)
Proceeds from sales of fixed maturities investments 4,848 5,708 8,813
Maturities and principal paydowns of fixed maturities investments 1,741 1,931 2,596
Net purchases of other investments (871) (1,338) (206)
Net (purchases)/sales of short-term investments (24) 135 (564)
------------- -------------- -------------
CASH USED FOR INVESTING ACTIVITIES (534) (2,691) (1,767)
------------- -------------- -------------
FINANCING ACTIVITIES
Net receipts from investment and UL-type contracts credited to
policyholder account balances 498 2,467 1,513
Capital contribution 0 150 180
Dividends paid 0 (10) 0
------------- -------------- -------------
CASH PROVIDED BY FINANCING ACTIVITIES 498 2,607 1,693
------------- -------------- -------------
NET INCREASE (DECREASE) IN CASH 26 19 (26)
Cash at beginning of year 20 1 27
------------- -------------- -------------
CASH AT END OF YEAR $46 $20 $1
------------- -------------- -------------
------------- -------------- -------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
F-6
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
1. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
These consolidated financial statements include Hartford Life Insurance Company
and its wholly-owned subsidiaries ("Hartford Life" or the "Company"), ITT
Hartford Life and Annuity Insurance Company ("ILA") and ITT Hartford
International Life Reassurance Corporation ("HLRe"), formerly American Skandia
Life Reinsurance Corporation. Hartford Life is a wholly-owned subsidiary of
Hartford Life and Accident Insurance Company ("HLA"). Hartford Life is
ultimately owned by Hartford Fire Insurance Company ("Hartford Fire"), which is
ultimately owned by ITT Hartford Group, Inc. ("ITT Hartford"), formerly a
subsidiary of ITT Corporation ("ITT"). On December 19, 1995, ITT Corporation
distributed all of the outstanding shares of ITT Hartford Group to ITT
Corporation Shareholders of record in an action known herein as the
"Distribution". As a result of the Distribution, ITT Hartford became an
independent publicly traded company.
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 revenues and expenses during the
reporting period. Actual results could differ from those estimates. The
Company offers life, annuity, pension, and disability insurance products.
These products are distributed and marketed by multiple distribution channels
which include broker-dealers, agents and banks, as well as a captive sales
force. Hartford Life conducts business primarily in the United States and is
licensed to write business in all 50 states. The Company is headquartered in
Simsbury, Connecticut and has 3,045 direct employees.
The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which differ in certain material respects from
the accounting practices prescribed or permitted by various insurance
regulatory authorities.
(B) CHANGES IN ACCOUNTING PRINCIPLES
Effective January 1, 1994, Hartford Life adopted Statement of Financial
Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The new standard requires, among other things,
that securities be classified as "held-to-maturity", "available-for-sale" or
"trading" based on Hartford Life's intentions with respect to the ultimate
disposition of the security and its ability to effect those intentions. The
classification determines the appropriate accounting carrying value (cost basis
or fair value) and, in the case of fair value, whether the adjustment impacts
Stockholder's Equity directly or is reflected in the Consolidated Statements of
Income. Investments in equity securities had previously been and continue to
be recorded at fair value with the corresponding impact included in
Stockholder's Equity. Under SFAS No. 115, Hartford Life's fixed maturities
are classified as "available-for-sale" and accordingly, these investments are
reflected at fair value with the corresponding impact included as a component
of Stockholder's Equity designated as "Unrealized loss on investments, net of
tax." As with the underlying investment security, unrealized gains and losses
on derivative financial instruments are considered in determining the fair
value of the portfolios. The impact of adoption was an increase to
Stockholder's Equity of $91. Hartford Life's cash flows were not impacted by
this change in accounting principle.
(C) REVENUE RECOGNITION
Revenues for universal life policies and investment products consist of policy
charges for the cost of insurance, policy administration and surrender charges
assessed to policy account balances. Premiums for traditional life insurance
policies are recognized as revenues when they are due from policyholders.
Deferred acquisition costs are amortized using the retrospective deposit method
for universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit and the
prospective deposit method is used where investment margins are the primary
source of profit.
F-7
<PAGE>
(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER FUNDS
Liabilities for future policy benefits are computed by the net level premium
method using interest rate assumptions varying from 3% to 11% and withdrawal,
mortality and morbidity assumptions which vary by plan, year of issue and
policy durations and include a provision for adverse deviation. Other
policyholder funds which represent liabilities for universal life insurance and
investment products reflect policy account balances before applicable surrender
charges.
(E) POLICYHOLDER REALIZED GAINS AND LOSSES
Realized gains and losses on security transactions associated with Hartford
Life's immediate participation guaranteed contracts are excluded from
revenues, since under the terms of the contracts the realized gains and losses
will be credited to policyholders in future years as they are entitled to
receive them.
(F) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, including commissions and certain underwriting
expenses associated with acquiring traditional life insurance products, are
deferred and amortized over the lesser of the estimated or actual contract
life. For universal life insurance and investment products, acquisition costs
are being amortized generally in proportion to the present value of expected
gross profits from surrender charges, investment, mortality and expense
margins.
(G) INVESTMENTS
Hartford Life's investments in fixed maturities include bonds, redeemable
preferred stock and commercial paper which are classified as "available-for-
sale" and accordingly are carried at market value with the after-tax difference
from cost reflected as a component of Stockholder's Equity designated
"Unrealized loss on investments, net of tax". Equity securities, which include
common and non-redeemable preferred stocks, are carried at market value with
the after-tax difference from cost reflected in Stockholder's Equity. Realized
investment gains and losses, after deducting life and pension policyholders'
share, are reported as a component of revenue and are determined on a specific
identification basis.
(H) DERIVATIVE FINANCIAL INSTRUMENTS
Hartford Life uses a variety of derivative financial instruments including,
swaps, caps, floors, options, forwards and exchange traded financial futures as
part of an overall risk management strategy. These instruments, are used as a
means of hedging exposure to price, foreign currency and/or interest rate risk
on planned investment purchases or existing assets and liabilities. Hartford
Life does not hold or issue derivative financial instruments for trading
purposes. Hartford Life's accounting for derivative financial instruments used
to manage risk is in accordance with the concepts established in SFAS No. 80,
"Accounting for Futures Contracts," SFAS No. 52 , "Foreign Currency
Translation", American Institute of Certified Public Accountants Statement of
Position 86-2, "Accounting for Options" and various Emerging Issues Task Force
pronouncements. Written options are in all cases used in conjunction with other
assets and derivatives as part of an overall risk management strategy.
Derivative instruments are carried at values consistent with the asset or
liability being hedged. Derivatives used to hedge fixed maturities or equities
are carried at fair value with the after-tax difference from cost reflected in
Stockholder's Equity. Derivatives used to hedge other invested assets or
liabilities are carried at cost.
Derivatives, used as part of a risk management strategy, must be designated at
inception as a hedge and measured for effectiveness both at inception and on an
ongoing basis. Hartford Life's minimum correlation threshold for hedge
designation is 80%. If correlation, which is assessed monthly and measured
based on a rolling three month average, falls below 80%, hedge accounting will
be terminated. Derivatives used to create a synthetic asset must meet synthetic
accounting criteria including designation at inception and consistency of terms
between the synthetic and the instrument being replicated. Synthetic
instrument accounting, consistent with industry practice, provides that the
synthetic asset is accounted for like the financial instrument it is intended
to replicate. Derivatives which fail to meet risk management criteria are
marked to market with the impact reflected in the Consolidated Statements
of Income.
Gains or losses on financial futures contracts entered into in anticipation
of the future receipt of product cash flows are deferred and, at the time of
the ultimate purchase, reflected as a basis adjustment to the purchased
asset. Gains or losses on futures used in invested asset risk management are
deferred and adjusted into the basis of the hedged asset when the contract
futures are closed, except for futures used in duration hedging which are
deferred and basis adjusted on a quarterly basis. The basis adjustments are
amortized into investment income over the remaining asset life.
F-8
<PAGE>
Open forward commitment contracts are marked to market through Stockholder's
Equity. Such contracts are recorded at settlement by recording the purchase of
the specified securities at the previously committed price. Gains or losses
resulting from the termination of the forward commitment contracts before the
delivery of the securities are recognized immediately in the Consolidated
Statements of Income as a component of net investment income.
The cost of options entered into as part of a risk management strategy are
basis adjusted to the underlying asset or liability and amortized over the
remaining life of the hedge. Gains or losses on expiration or termination are
adjusted into the basis of the underlying asset or liability and amortized over
the remaining asset life.
Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an
adjustment to income. Should the swap be terminated, the gain or loss is
adjusted into the basis of the asset or liability and amortized over the
remaining life. Should the hedged asset be sold or liability terminated without
terminating the swap position, any swap gains or losses are immediately
recognized in earnings. Interest rate swaps purchased in anticipation of an
asset purchase ("anticipatory transaction") are recognized consistent with the
underlying asset components such that the settlement component is recognized in
the Consolidated Statements of Income while the change in market value is
recognized as an unrealized gain or loss.
Premiums paid on purchased floor or cap agreements and the premium received on
issued floor or cap agreements (used for risk management), are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the
asset or liability and amortized over the remaining asset life. Net payments
are recognized as an adjustment to income or basis adjusted and amortized
depending on the specific hedge strategy.
Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52.
(I) RELATED PARTY TRANSACTIONS
Transactions of Hartford Life with its parent and affiliates relate principally
to tax settlements, insurance coverage, rental and service fees and payment of
dividends and capital contributions. In addition, certain affiliated insurance
companies purchased group annuity contracts from Hartford Life to fund pension
costs and claim annuities to settle casualty claims.
On June 30, 1995, the assets of Lyndon Insurance Company ("Lyndon") were
contributed to ILA. As a result, ILA received approximately $365 in fixed
maturities, equity securities and cash, $26 in receivables, $187 of current
tax liability, $20 in deferred tax liability, and $3 of other liabilities.
The excess of assets over liabilities of $181 were recorded as an increase to
paid-in capital.
Substantially all general insurance expenses related to Hartford Life,
including rent expenses, are initially paid by Hartford Fire. Direct expenses
are allocated to Hartford Life using specific identification and indirect
expenses are allocated using other applicable methods.
The rent paid to Hartford Fire for the space occupied by Hartford Life was $3
in 1995, 1994, and 1993 respectively. Hartford Life expects to pay rent of $3
in 1996, 1997, 1998, 1999, and 2000, respectively and $57 thereafter, over the
contract life of the lease.
(J) DIVIDEND TO POLICYHOLDERS
Dividends to policyholders primarily represent those amounts paid to corporate
owned life insurance ("COLI") policyholders. These dividend liabilities, which
appear as other policyholder funds on the Consolidated Balance Sheets, are
recorded when approved by the board of directors.
See Note (4) for the related party coinsurance agreements.
F-9
<PAGE>
2. INVESTMENTS
(a) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
<S> <C> <C> <C>
1995 1994 1993
------ ------ ------
Interest income $1,338 $1,247 $1,007
Income from other investments 1 54 53
------ ------ ------
GROSS INVESTMENT INCOME 1,339 1,301 1,060
Less: Investment expenses 11 9 9
------ ------ ------
NET INVESTMENT INCOME $1,328 $1,292 $1,051
------ ------ ------
------ ------ ------
(b) UNREALIZED GAINS/(LOSSES) ON EQUITY SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $4 $2 $3
Gross unrealized losses (2) (11) (11)
Deferred income tax expenses/(benefit) 1 (3) (3)
------ ------ ------
NET UNREALIZED GAINS (LOSSES) AFTER TAX 1 (6) (5)
Balance at the beginning of the year (6) (5) (0)
------ ------ ------
CHANGE IN NET UNREALIZED GAINS (LOSSES) ON EQUITY SECURITIES $7 ($1) ($5)
------ ------ ------
------ ------ ------
(c) UNREALIZED GAINS/(LOSSES) IN FIXED SECURITIES
As of December 31,
--------------------------
1995 1994 1993
------ ------ ------
Gross unrealized gains $529 $150 $538
Gross unrealized losses (569) (1,185) (290)
Unrealized (losses)/gains credited to policyholder (52) 37 0
Deferred income tax (benefit)/expense (34) (350) 87
------ ------ ------
NET UNREALIZED (LOSSES) GAINS AFTER TAX (58) (648) 161
Balance at the beginning of the year (648) 161 144
------ ------ ------
CHANGE IN NET UNREALIZED GAINS(LOSES)
ON FIXED MATURITIES $590 ($809) $17
------ ------ ------
------ ------ ------
(d) COMPONENTS OF NET REALIZED GAINS/(LOSSES)
Year ended December 31,
--------------------------
1995 1994 1993
------ ------ ------
Fixed maturities $23 ($34) ($12)
Equity securities (6) (11) 0
Real estate and other (25) 47 43
Less: (decrease)/increase in liability to policyholders
for realized gains (3) 5 (15)
------ ------ ------
NET REALIZED (LOSSES) GAINS ($11) $7 $16
------ ------ ------
------ ------ ------
</TABLE>
F-10
<PAGE>
(e) DERIVATIVE INVESTMENTS
A summary of investments, segregated by major category along with the types of
derivatives and their respective notional amounts, are as follows as of
December 31, 1995:
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(CARRYING AMOUNT)
Caps, Floors & Options Foreign
Carrying ----------------------- Currency
Value Non-Derivative Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- ----------- -------- ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-backed securities $5,764 $5,752 ($1) $30 $0 ($17) $0
Inverse floaters(a) 711 794 (30) 16 0 (69) 0
Anticipatory(e) 0 0 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL ASSET-BACKED SECURITIES 6,475 6,546 (31) 46 0 (86) 0
Other bonds and notes 7,118 7,165 (1) 0 0 (22) (24)
Short-term investments 807 807 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL FIXED MATURITIES 14,400 14,518 (32) 46 0 (108) (24)
Other investments 3,865 3,865 0 0 0 0 0
-------- ----------- -------- ----------- --------- -------- -------
TOTAL INVESTMENTS $18,265 $18,383 ($32) $46 $0 ($108) ($24)
-------- ----------- -------- ----------- --------- -------- -------
-------- ----------- -------- ----------- --------- -------- -------
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(NOTIONAL AMOUNT)
(EXCLUDING LIABILITY HEDGES)
Caps, Floors & Options Foreign
Notional ---------------------- Currency
Amount Issued(b) Purchased(c) Futures(d) Swaps(f) Swaps
-------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Asset-backed securities $3,863 $118 $3,133 $322 $290 $0
Inverse floaters(a) 1,601 560 354 6 681 0
Anticipatory(e) 238 0 0 213 25 0
-------- --------- --------- ---------- --------- ---------
TOTAL ASSET-BACKED SECURITIES 5,702 678 3,487 541 996 0
Other bonds and notes 1,365 33 66 322 757 187
Short-term investments 0 0 0 0 0 0
-------- --------- --------- ---------- --------- ---------
TOTAL FIXED MATURITIES 7,067 711 3,553 863 1,753 187
Other investments 18 0 0 0 18 0
-------- --------- --------- ---------- --------- ---------
TOTAL INVESTMENTS $7,085 $711 $3,553 $863 $1,771 $187
-------- --------- --------- ---------- --------- ---------
-------- --------- --------- ---------- --------- ---------
</TABLE>
(a) Inverse floaters are variations of CMO's for which the coupon rates
move inversely with an index rate (e.g. LIBOR). The risk to principal is
considered negligible as the underlying collateral for the securities is
guaranteed or sponsored by government agencies. To address the volatility
risk created by the coupon variability, Hartford Life uses a variety of
derivative instruments, primarily interest rate swaps and issued floors.
(b) Includes issued caps $475 with a weighted average strike rate of 8.5%
(ranging from 7.0% to 10.4%) and over 85% mature in 2000 through 2004. Issued
floors totaled $236, have a weighted average strike rate of 8.1% (ranging
from 5.3% to 10.9%) and mature through 2007 with 76% maturing by 2004.
(c) Comprised of purchased floors of $1.8 billion and purchased caps of $1.7
billion. The floors have a weighted average strike price of 5.8% (ranging from
3.7% to 6.8%) and over 85% mature in 1997 through 1999. The caps have a
weighted average strike price of 7.5% (ranging from 4.5% and 10.1%) and over
82% mature in 1997 through 1999.
(d) Over 95% of futures contracts expire before December 31, 1996.
(e) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the consolidated balance sheets. At the
time of the ultimate purchase, they are reflected as a basis adjustment to the
purchased asset. At December 31, 1995, there were $5.3 in net deferred losses
for futures, interest rate swaps and purchased options.
(f) The following table summarizes the maturities by notional value of interest
rate swaps outstanding at December 31, 1995 and the related weighted average
interest pay rate or receive rate assuming current market conditions:
F-11
<PAGE>
<TABLE>
<CAPTION>
MATURITY OF SWAPS ON INVESTMENTS
AS OF DECEMBER 31, 1995
LAST
1996 1997 1998 1999 2000 THEREAFTER TOTAL MATURITY
---- ---- ---- ---- ---- ---------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INTEREST RATE SWAPS
PAY FIXED/RECEIVE VARIABLE
Notional Value $15 $50 $0 $453 $31 $229 $778 2004
Weighted Average Pay Rate 5.0% 7.2% 0.0% 8.1% 7.1% 7.8% 7.8%
Weighted Average Receive Rate 5.8% 5.9% 0.0% 5.8% 5.7% 5.9% 5.9%
PAY VARIABLE/RECEIVE FIXED
Notional Value $100 $68 $25 $25 $35 $190 $443 2007
Weighted Average Pay Rate 5.9% 8.6% 5.9% 0.0% 5.9% 5.4% 5.4%
Weighted Average Receive Rate 2.4% 7.9% 4.0% 0.0% 6.5% 6.9% 6.9%
PAY VARIABLE/RECEIVE DIFFERENT VARIABLE
Notional Value $50 $18 $36 $12 $200 $234 $550 2004
Weighted Average Pay Rate 5.8% 0.0% 3.7% 3.5% 4.5% 16.3% 5.7%
Weighted Average Receive Rate 5.4% 0.0% 5.6% 5.2% 6.8% 5.9% 6.4%
TOTAL INTEREST RATE SWAPS $165 $136 $61 $490 $266 $653 $1,771 2007
WEIGHTED AVERAGE PAY RATE 5.8% 7.8% 4.6% 7.6% 5.0% 7.3% 6.9%
WEIGHTED AVERAGE RECEIVE RATE 3.6% 7.2% 4.9% 5.4% 6.6% 6.3% 5.8%
</TABLE>
(g) The following table reconciles the derivative notional amounts by derivative
type and by strategy:
<TABLE>
<CAPTION>
BY DERIVATIVE TYPE
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- --------- ------------ ---------------
<S> <C> <C> <C> <C>
Caps $1,861 $2,666 $2,343 $2,184
Floors 2,131 237 188 2,180
Swaps/Collars/Forwards/Options 4,374 1,355 2,163 3,566
Futures 253 6,125 5,515 863
--------------- --------- ------------ ---------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- --------- ------------ ---------------
--------------- --------- ------------ ---------------
BY STRATEGY
----------------------------------------------------------------------
12/31/94 MATURITIES/ 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
--------------- ---------- ------------ ---------------
Liability $1,725 $729 $746 $1,708
Anticipatory 626 1,564 1,952 238
Asset 3,048 3,153 3,217 2,984
Portfolio 3,220 4,937 4,294 3,863
--------------- ---------- ------------ --------------
TOTAL $8,619 $10,383 $10,209 $8,793
--------------- ---------- ------------ --------------
--------------- ---------- ------------ --------------
</TABLE>
In addition to risk management through derivative financial instruments
pertaining to the investment portfolio, interest rate sensitivity related to
certain Company liabilities was altered primarily through interest rate swap
agreements. The notional
F-12
<PAGE>
amount of the liability agreements in which Hartford Life generally pays one
variable rate in exchange for another, was $1.7 billion at December 31, 1995 and
1994 respectively. The weighted average pay rate is 5.9%; the weighted average
receive rate is 6.0% , and these agreements mature at various times through
2001.
(F) CONCENTRATION OF CREDIT RISK
Hartford Life has a reinsurance recoverable of $5.6 billion from Mutual Benefit
Life Assurance Corporation (Mutual Benefit). The risk of Mutual Benefit
becoming insolvent is mitigated by the reinsurance agreement's requirement that
the assets be kept in a security trust with Hartford Life as sole beneficiary.
Excluding investments in U.S. government and agencies, Hartford Life has no
other significant concentrations of credit risk.
Included in fixed maturity investments at December 31, 1995 were $39 of
Orange County, California Pension Obligation Bonds, $17 of which were carried
in the general account and $22 which were included in Hartford Life's
guaranteed separate accounts. During 1995 all interest payments due were
received. While Orange County is currently operating under Protection of
Chapter 9 of the Federal Bankruptcy Laws, Hartford Life believes the bonds
are not impaired other than on a temporary basis.
(G) FIXED MATURITIES
The schedule below details the amortized cost and fair values of Hartford Life's
fixed maturities by component, along with the gross unrealized gains and losses:
<TABLE>
<CAPTION>
AS OF DECEMBER 31,1995
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
<S> <C> <C> <C> <C>
U.S. Government and government agencies and
authorities;
Guaranteed and sponsored $502 $4 ($9) $497
Guaranteed and sponsored-asset backed 3,568 210 (387) 3,391
State, municipalities and political subdivisions 201 4 (3) 202
International governments 291 19 (4) 306
Public utilities 949 29 (2) 976
All other corporate-asset backed 3,065 76 (55) 3,086
All other corporate 5,056 187 (109) 5,134
Short-term investments 808 0 0 808
---------- ------- ----- -----
TOTAL INVESTMENTS $14,440 $529 ($569) $14,440
---------- ------- ----- -----
---------- ------- ----- -----
AS OF DECEMBER 31,1994
--------------------------------------------------
GROSS UNREALIZED
AMORTIZED --------------------- MARKET
COST GAINS LOSSES VALUE
---------- ------- ------ -----
U.S. Government and government agencies
and authorities;
Guaranteed and sponsored $1,516 $1 ($87) $1,430
Guaranteed and sponsored-asset backed 4,256 78 (571) 3,763
State, municipalities and political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate-asset backed 2,442 30 (121) 2,351
All other corporate 3,717 38 (297) 3,458
Short-term investments 1,665 0 (51) 1,614
--------- ------- -------- -------
TOTAL INVESTMENTS $14,464 $150 ($1,185) $13,429
--------- ------- -------- -------
--------- ------- -------- -------
</TABLE>
F-13
<PAGE>
The amortized cost and estimated fair value of fixed maturities at December 31,
1995, by maturity, are shown below. Asset backed securities are distributed to
maturity year based on estimates of the rate of future prepayments of principal
over the remaining life of the securities. Expected maturities differ from
contractual maturities reflecting the borrowers' rights to call or prepay their
obligations.
<TABLE>
<CAPTION>
AMORTIZED MARKET
COST VALUE
---------- ---------
<S> <C> <C>
Due in one year or less $3,146 $3,133
Due after one year through five years 6,373 6,316
Due after five years through ten years 3,609 3,644
Due after ten years 1,312 1,307
---------- ---------
TOTAL $14,440 $14,400
---------- ---------
---------- ---------
</TABLE>
Sales of fixed maturities excluding short-term fixed maturities for the years
ended December 31, 1995, 1994, and 1993 resulted in proceeds of $4,848, $5,708,
and $8,813, respectively, resulting in gross realized gains of $91, $71, and
$192, respectively, and gross realized losses of $72, $100, and $219,
respectively, not including policyholder gains and losses. Sales of equity
securities and other investments for the years ended December 31, 1995, 1994,
and 1993 resulted in proceeds of $64, $159, and $127, respectively, resulting in
gross realized gains of $28, $3, and $0, respectively, and gross realized losses
of $59, $14, $0, respectively, not including policyholder gains and losses.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995 AS OF DECEMBER 31, 1994
----------------------- -----------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities $14,400 $14,400 $13,429 $13,429
Equity securities 63 63 68 68
Policy loans 3,381 3,381 2,614 2,614
Mortgage loans 265 265 316 316
Investments in partnerships and trusts 94 97 36 42
Miscellaneous 62 62 67 67
LIABILITIES
Other policy claims and benefits $12,727 $12,767 $13,001 $12,374
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument: fair value for fixed maturities and equity
securities approximate those quotations published by applicable stock exchanges
or are received from other reliable sources; policy and mortgage loan carrying
amounts approximate fair value; investments in partnerships and trusts are based
on external market valuations from partnership and trust management; and other
policy claims and benefits payable are determined by estimating future cash
flows discounted at the current market rate.
3. INCOME TAX
Hartford Life is included in ITT Hartford Group's consolidated U.S. Federal
income tax return and remits to (receives from) ITT Hartford Group, Inc. a
current income tax provision (benefit) computed in accordance with the tax
sharing arrangements between its insurance subsidiaries. The effective tax
rate was 32% in 1995 and 1994, and approximates the U.S. statutory tax rate
of 35% in 1993.
F-14
<PAGE>
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
---------------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
INCOME TAX EXPENSES
Current $211 $185 $190
Deferred (149) (120) (115)
------- ------- -------
TOTAL $62 $65 $75
------- ------- -------
------- ------- -------
INCOME TAX PROVISION
Tax provision at U.S. statutory rate $67 $71 $76
Tax-exempt income (3) (3) 0
Foreign tax credit (4) (1) 0
Other 2 (2) (1)
------- ------- -------
PROVISION FOR INCOME TAX $62 $65 $75
------- ------- -------
------- ------- -------
</TABLE>
Income taxes paid were $162, $244, and $301 in 1995, 1994, and 1993
respectively. The current taxes due from Hartford Fire were $8 and $46 in 1995
and 1994, respectively.
Deferred tax assets(liabilities) include the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Tax deferred acquisition costs $410 $284
Book deferred acquisition costs and reserves 138 (134)
Employee benefits 8 7
Unrealized net loss on investments 32 353
Investments and other (168) 80
--------- ---------
TOTAL DEFERRED TAX ASSET $420 $590
--------- ---------
--------- ---------
</TABLE>
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax Act
of 1959 permitted the deferral from taxation of a portion of statutory income
under certain circumstances. In these situations, the deferred income was
accumulated in a "Policyholders' Surplus Account" and will be taxable in the
future only under conditions which management considers to be remote; therefore,
no Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December 31,
1995 was $37.
4. REINSURANCE
Hartford Life cedes insurance to non-affiliated insurers in order to limit its
maximum loss. Such transfer does not relieve Hartford Life of its primary
liability. Hartford Life also assumes insurance from other insurers. Group
life and accident and health insurance business is substantially reinsured to
affiliated companies.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------- -------
<S> <C> <C> <C>
Gross premiums $1,545 $1,316 $1,135
Insurance assumed 591 299 93
Insurance ceded 649 515 481
------- ------- -------
NET RETAINED PREMIUMS $1,487 $1,100 $747
------- ------- -------
------- ------- -------
</TABLE>
F-15
<PAGE>
Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1995, 1994 and 1993 approximated $220, $164, and $149,
respectively.
In December 1994, Hartford Life assumed from a third party approximately $500
of corporate owned life insurance reserves on a coinsurance basis. In
December 1995, this block of business was reinsured to HLRe utilizing
modified coinsurance, with the assets and policy liabilities placed in a
separate account. In October 1994, HLRe recaptured approximately $500 of
corporate owned life insurance from a third party reinsurer. Subsequent to
this transaction, Hartford Life and HLRe restructured their coinsurance
agreement from coinsurance to modified coinsurance, with the assets and
policy liabilities placed in the separate account. These transactions did not
have a material impact on consolidated net income.
Also in December 1994, ILA ceded to a third party $1.0 billion in individual
fixed and variable annuities on a modified coinsurance basis. In December 1995,
Hartford Life ceded approximately $1.2 billion in individual variable annuities
on a modified coinsurance basis to a third party. These transactions did not
have a material impact on consolidated net income.
In May 1994, Hartford Life assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $400. Hartford Life received cash and investment grade assets
to support the life insurance and individual annuity contract obligations
assumed.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and liabilities
of Hartford Life increased approximately $1 billion. The excess of
liabilities assumed over assets received, of $2, was recorded as a decrease
to capital surplus. The remaining $41 in assets and liabilities were
transferred in October 1995. The impact on consolidated net income was not
significant.
In August 1993, Hartford Life received assets of $300 for assuming the group
COLI contract obligations of Mutual Benefit Life Insurance Company, through
an assumption reinsurance transaction. Under the terms of the agreement,
Hartford Life coinsured back 75% of the liabilities to Mutual Benefit Life
Insurance Company. All assets supporting Mutual Benefit's reinsurance
liability to Hartford Life are placed in a "security trust", with Hartford
Life as the sole beneficiary. The impact on 1993 consolidated net income was
not significant.
5. PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
Hartford Life's employees are included in Hartford Fire's noncontributory
defined benefit pension plans. These plans provide pension benefits that are
based on years of service and the employee's compensation during the last ten
years of employment. Hartford Life's funding policy is to contribute annually
an amount between the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974 and the maximum amount that can be
deducted for Federal income tax purposes. Generally, pension costs are funded
through the purchase of Hartford Life's group pension contracts. The cost to
Hartford Life was approximately $2, $2, and $3 in 1995, 1994 and 1993,
respectively.
Hartford Life provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of Hartford Life's employees
may become eligible for these benefits upon retirement. Hartford Life's
contribution for health care benefits will depend on the retiree's date of
retirement and years of service. In addition, the plan has a defined dollar cap
which limits average company contributions. Hartford Life has prefunded a
portion of the health care and life insurance obligations through trust funds
where such prefunding can be accomplished on a tax effective basis.
Postretirement health care and life insurance benefits expense, allocated by
Hartford Fire were immaterial for 1995, 1994, and 1993 respectively.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 10.1% for 1995, decreasing ratably to 6.0% in the
year 2001. Increasing the health care trend rates by one percent per year would
have an immaterial impact on the accumulated postretirement benefit obligation
and the annual expense. To the extent that the actual experience differs from
the inherent assumptions, the effect will be amortized over the average future
service of the covered employees.
F-16
<PAGE>
6. BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
REVENUES
Individual Life and Annuity $797 $691 $595
Asset Management Services 734 789 794
Specialty Insurance Operations 1,273 919 425
------ ------ ------
TOTAL REVENUES $2,804 $2,399 $1,814
------ ------- ------
------ ------- ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993
------ ------- -----
INCOME BEFORE INCOME TAX EXPENSE
Individual Life and Annuity $236 $139 $129
Asset Management Services (79) 38 71
Specialty Insurance Operations 34 26 18
------ ------ ------
TOTAL INCOME BEFORE INCOME
TAX EXPENSE $191 $203 $218
------ ------ ------
------ ------ ------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
YEAR ENDED DECEMBER 31
---------------------------
1995 1994 1993
------- ------- -------
IDENTIFIABLE ASSETS
Individual Life and Annuity $36,741 $26,668 $19,147
Asset Management Services 13,962 13,334 12,416
Specialty Insurance Operations 13,494 7,847 6,723
------- ------- -------
TOTAL IDENTIFIABLE ASSETS $64,197 $47,849 $38,286
------- ------- -------
------- ------- -------
</TABLE>
7. STATUTORY NET INCOME AND SURPLUS
Substantially all of the statutory surplus is permanently reinvested or is
subject to dividend restrictions relating to various state regulations which
limit the payment of dividends without prior approval. Statutory net income
and surplus as of December 31 were:
<TABLE>
<CAPTION>
1995 1994 1993
--------- -------- --------
<S> <C> <C> <C>
Statutory net income $112 $58 $63
Statutory surplus $1,125 $941 $812
</TABLE>
8. SEPARATE ACCOUNTS
Hartford Life maintains separate account assets and liabilities totaling $36.3
billion and $22.8 billion at December 31, 1995 and 1994, respectively which
are reported at fair value. Separate account assets are segregated from other
investments and investment income and gains and losses accrue directly to the
policyholder. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts totaling $25.9 billion and $14.8 billion at
December 31, 1995 and 1994, respectively, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets totaling $10.4 billion
and $8.0 billion at December 31, 1995 and 1994, respectively, wherein Hartford
Life contractually guarantees either a minimum return or account value to the
policyholder. Included in the non-guaranteed category are policy loans
totaling $1.7 billion and $0.5 billion at December 31, 1995 and 1994,
respectively. Investment income (including investment gains and losses) and
interest credited to policyholders on separate account assets are not
reflected in the Consolidated Statements of Income. Separate account
management fees, net of minimum guarantees, were $387, $256, and $189, in
1995, 1994, and 1993, respectively.
F-17
<PAGE>
The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insurance. The average credit interest
rate on these contracts is 6.62%. The assets that support these liabilities
were comprised of $10.4 billion in bonds at December 31, 1995. The portfolios
are segregated from other investments and are managed so as to minimize
liquidity and interest rate risk. In order to minimize the risk of
disintermediation associated with early withdrawals, individual annuity and
modified guaranteed life insurance contracts carry a graded surrender charge
as well as a market value adjustment. Additional investment risk is hedged
using a variety of derivatives which totaled $133 million in carrying value
and $2.7 billion in notional amounts at December 31, 1995.
9. COMMITMENTS AND CONTINGENCIES
In August 1994, Hartford Life renewed a two year note purchase facility
agreement which in certain instances obligates Hartford Life to purchase up to
$100 million in collateralized notes from a third party. Hartford Life is
receiving fees for this commitment. At December 31, 1995, Hartford Life had
not purchased any notes under this agreement.
Under insurance guaranty fund laws in most states, insurers doing business
therein can be assessed up to prescribed limits for policyholder losses
incurred by insolvent companies. The amount of any future assessments on
Hartford Life under these laws cannot be reasonably estimated. Most of these
laws do provide, however, that an assessment may be excused or deferred if it
would threaten an insurer's own financial strength. Additionally, guaranty
fund assessments are used to reduce state premium taxes paid by the Company in
certain states. Hartford Life paid guaranty fund assessments of approximately
$10, $8 and $6 in 1995, 1994, and 1993, respectively.
Hartford Life is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position of
Hartford Life.
F-18
<PAGE>
10. SUBSEQUENT EVENTS
Prior to 1996, Closed Book GRC was reported as a component of the Asset
Management Services Division of the Life segment. The majority of products
included in Closed Book GRC are guaranteed investment contracts with
guaranteed fixed or indexed rates for a specific period. In 1996, Closed Book
GRC is reported as a component of Runoff Operations and had no new or
renewal business as of the end of 1995. Closed Book GRC results have been
negatively affected by lower investment rates and earnings on mortgage backed
securities due to prepayments experienced in excess of assumed levels in
years prior to 1995. Closed Book GRC was also affected by the interest rate
rise in 1994 when the duration of its assets lengthened relative to that of
the liabilities. Due to the reduced investment earnings and duration
mismatch, the portfolio had insufficient assets to fund fully its liability
commitments. During the third quarter of 1996, the Life segment transferred
assets in the amount of $200 million (unaudited) to the Runoff segment to
adequately fund Closed Book GRC so that future cash infusions would be
minimal.
Although the Closed Book GRC asset portfolio as a whole is duration matched
with its liabilities, certain investments continue to have a longer maturity
than their corresponding liabilities and will need to be liquidated prior to
maturity in order to meet the specific liability commitments. To protect the
existing value of these investments, Hartford Life entered into various hedge
transactions in late September 1996 which substantially eliminated further
fluctuation in fair value of the investments due to interest rate changes.
ITT Hartford's accounting policy is to record an other than temporary
impairment charge on a security if it is determined that the Company is
unable to recover all amounts due under the contractual obligations of the
security. In addition, ITT Hartford has established specific criteria to be
used in the impairment evaluation of an individual portfolio of assets.
Specifically, if the asset portfolio is supporting a runoff operation, is
forced to be liquidated prior to maturity to meet liability commitments, and
has a fair value below amortized cost, which will not materially fluctuate
as a result of future interest rate changes, then an other temporary
impairment has been determined to have occurred. Once an impairment charge
has been recorded, ITT Hartford continues to review the impaired securities
for appropriate valuation.
With the initiation of the hedge transactions, which eliminated the
possibility that the fair value of the Closed Book GRC investments would
recover to their current amortized cost, an other than temporary impairment
loss of $82 million after tax was determined to have occurred and was
recorded in September 1996. Also, during the third quarter of 1996, Closed
Book GRC had asset sales resulting in proceeds of $515 million and a realized
loss of $55 million after tax. The asset sales were the result of current
liquidity needs in addition to taking advantage of favorable market
conditions for certain securities. Other charges of $32 million (unaudited)
after tax were also incurred in the third quarter.
During 1995, Closed Book GRC incurred a $68 million after tax loss from
operations. In addition, prior to the above actions the level of the 1995
loss was expected by management to decline by 10% to 25% in 1996 and 1997
with the losses having run off in their entirety by the year 2000. As a
result of the above actions, management expects that the comparable 1996
after tax loss will be in the range of $51 to $55 million, while after tax
losses in 1997 and 1998 will be reduced to the range of $10 to $20 million
per year. Losses from Closed Book GRC in years subsequent to 1998 are
expected to be minimal.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS (OTHER THAN INVESTMENTS IN AFFILIATES)
AS OF DECEMBER 31, 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
FAIR REPORTED ON
COST VALUE BALANCE SHEET
-------------- ------------- -----------------
<S> <C> <C> <C>
FIXED MATURITIES
Bonds
U.S. Government and government agencies and authorities
Guaranteed and sponsored $502 $497 $497
Guaranteed and sponsored - asset backed 3,568 3,391 $3,391
States, municipalities and political subdivisions 201 202 $202
International governments 291 306 $306
Public utilities 949 976 $976
All other corporate 5,056 5,134 $5,134
All other corporate - asset backed 3,065 3,086 $3,086
Short-term investments 808 808 $808
---------- --------- ---------
TOTAL FIXED MATURITIES $14,440 $14,400 $14,400
EQUITY SECURITIES
Common stocks - industrial, miscellaneous and all other 61 63 63
TOTAL FIXED MATURITIES AND EQUITY SECURITIES $14,501 $14,463 $14,463
POLICY LOANS 3,381 3,381 3,381
MORTGAGE LOANS 265 265 265
OTHER INVESTMENTS 156 159 156
--------- -------- -------
TOTAL INVESTMENTS $18,303 $18,268 $18,265
--------- -------- -------
--------- -------- -------
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Fair value for stocks and bonds approximate those quotations published by
applicable stock exchanges or are received from other reliable sources. The
fair value for short-term investments approximates cost.
Policy and mortgage loans carrying amounts approximate fair value.
S-1
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTAL INSURANCE INFORMATION
(in millions)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Amort. of
Deferred Future Other Premiums and Net Benefits, Claims Deferred Other
Policy Policy Policyholder Other Investment and Claim Adj. Policy Insurance
Acq. Costs Benefits Funds Considerations Income Expenses Acq. Costs Expenses
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1995 Year ended December 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Individual Life and Annuity $2,088 $706 $4,371 $514 $283 $277 $176 $108
Asset Management Services 87 1,169 8,942 51 683 722 23 68
Specialty Insurance
Operations 13 498 9,285 922 351 423 0 816
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $2,188 $2,373 $22,598 $1,487 $1,317 $1,422 $199 $992
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1994 Year ended December 31, 1994
Individual Life and
Annuity $1,708 $582 $4,257 $492 $199 $334 $137 $80
Asset Management Services 101 845 10,160 39 750 695 8 48
Specialty Insurance
Operations 0 463 6,911 569 350 376 0 518
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,809 $1,890 $21,328 $1,100 $1,299 $1,405 $145 $646
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
As of December 31, 1993 Year ended December 31, 1993
Individual life and Annuity $1,237 $428 $3,535 $423 $172 $249 $97 $120
Asset Management Services 97 703 9,026 35 759 662 16 45
Specialty Insurance
Operations 0 528 5,673 289 136 135 0 272
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
TOTAL $1,334 $1,659 $18,234 $747 $1,067 $1,046 $113 $437
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
---------- -------- ------------ -------------- ---------- ---------------- ---------- ---------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Investment income is allocated to the reportable division based on each
division's share of investable funds or on a direct basis, where applicable,
including realized capital gains and losses.
Benefits, claims and claims adjustment expenses include the increase in
liability for future policy benefits and death, disability and other contract
benefits payments.
Other insurance expenses are allocated to the division based upon specific
identification, where possible.
S-2
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
(in Millions)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Percentage of
Gross Ceded to Assumed from Net Amount Assumed
Amount Other Companies Other Companies Amount to Net Amount
-------- ----------------- ----------------- -------- ----------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1995
LIFE INSURANCE IN FORCE $182,716 $112,774 $26,996 $96,938 27.8%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $549 $163 $122 $508 24.0%
Asset Management Services 51 0 0 51 0.0%
Specialty Insurance Operations 632 162 452 922 49.0%
313 324 17 6 283.3%
-------- ----------------- ----------------- --------
TOTAL $1,545 $649 $591 $1,487 39.7%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1994
LIFE INSURANCE IN FORCE $136,929 $87,553 $35,016 $84,392 41.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $448 $71 $106 $483 21.9%
Asset Management Services 39 0 0 39 0.0%
Specialty Insurance Operations 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
-------- ----------------- ----------------- --------
TOTAL $1,316 $515 $299 $1,100 27.2%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
YEAR ENDED DECEMBER 31, 1993
LIFE INSURANCE IN FORCE $93,099 $71,415 $27,067 $48,751 55.5%
PREMIUMS AND OTHER CONSIDERATIONS
Individual Life and Annuity $417 $85 $91 $423 21.5%
Asset Management Services 25 0 0 25 0.0%
Specialty Insurance Operations 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
-------- ----------------- ----------------- --------
TOTAL $1,135 $481 $93 $747 12.4%
-------- ----------------- ----------------- --------
-------- ----------------- ----------------- --------
</TABLE>
S-3
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT VARIABLE LIFE ONE
Hartford Life Insurance Company
Statement of Assets & Liabilities
June 30, 1996
<TABLE>
<CAPTION>
U.S.
Government Utilities
Growth Global and High New Growth
Global and Asset High Quality Opportu- Money and Diversified
Voyager Growth Income Allocation Yield Bond nities Market Income Income
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub-
Account Account Account Account Account Account Account Account Account Account
----------- ---------- --------- ----------- -------- ---------- -------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
PCM Voyager Fund
Shares 556,539
Cost $14,760,000
Market Value: $17,942,819 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
PCM Global Growth
Fund
Shares 462,673
Cost $6,594,305
Market Value: 0 $7,310,231 0 0 0 0 0 0 0 0
PCM Growth and
Income Fund
Shares 483,664
Cost $9,312,928
Market Value: 0 0 $10,635,775 0 0 0 0 0 0 0
PCM Global Asset
Allocation
Fund
Shares 291,446
Cost $4,170,392
Market Value: 0 0 0 $4,622,342 0 0 0 0 0 0
Shares 119,254
Cost $1,426,199
Market Value: 0 0 0 0 $1,440,587 0 0 0 0 0
PCM U.S. Government
and High Quality Fund
Bond Fund
Shares 179,084
Cost $2,346,823
Market Value: 0 0 0 0 0 $2,240,338 0 0 0 0
PCM New
Opportunities Fund
Shares 222,501
Cost $3,774,198
Market Value: 0 0 0 0 0 0 $4,033,937 0 0 0
PCM Money Market Fund
Shares 1,506,895
Cost $1,506,895
Market Value: 0 0 0 0 0 0 0 $1,506,894 0 0
PCM Utilities
Growth & Income
Fund
Shares 110,357
Cost $1,305,072
Market Value: 0 0 0 0 0 0 0 0 $1,489,815 0
PCM Diversified
Income Fund
Shares 8,741
Cost $93,206
Market Value: 0 0 0 0 0 0 0 0 0 $91,788
Due From Hartford
Life Insurance Company 40,777 18,595 27,551 0 1,368 11,965 16,629 0 0 0
----------- ---------- ----------- ---------- ---------- ---------- ---------- --------- --------- ------
Receivable from
fund shares sold 0 0 0 2,759 0 0 0 6,463 11,214 159
----------- ---------- ----------- ---------- ---------- ---------- ---------- --------- --------- ------
Total Assets $17,983,596 $7,328,826 $10,663,326 $4,625,101 $1,441,955 $2,252,303 $4,050,566 $1,513,357 $1,501,029 $91,947
----------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Liabilities
Due to Hartford
Life Insurance
Company $ 0 $ 0 $ 0 $ 2,921 $ 0 $ 0 $ 0 $ 6,463 $ 11,214 $ 159
Payable for fund
shares purchased 41,139 18,585 27,784 0 1,368 11,965 17,181 0 0 0
----------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Total Liabilities $ 41,139 $ 18,585 $ 27,784 $ 2,921 $ 1,368 $ 11,965 $ 17,181 $ 6,463 $ 11,214 $ 159
----------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Net Assets (variable
annuity contract
liabilities) $17,942,457 $7,310,241 $10,635,542 $4,622,180 $1,440,587 $2,240,338 $4,033,385 $1,506,894 $1,489,815 $91,788
----------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Variable Life
Policies:
Units Owned by 987,799 491,274 666,870 328,539 106,809 189,185 258,281 1,320,630 110,260 8,166
Participants
Unit Price $18.1640800 $14.880174 $15.948450 $14.068888 $13.487533 $11.842044 $15.616270 $1.141042 $13.511892 $11.240165
</TABLE>
The accompanying notes are an integral part of these financial statements
47
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT VARIABLE LIFE ONE
Hartford Life Insurance Company
Statement of Operations
For the Six Months Ended
June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
U.S.
Government
Growth Global and High Utilities
Global and Asset High Quality New Money Growth Diversified
Voyager Growth Income Allocation Yield Bond Opportunities Market and Income Income
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub-
Account Account Account Account Account Account Account Account Account Account
-------- -------- -------- ----------- -------- ---------- ------------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $275,323 $127,576 $373,127 $188,398 $100,269 $118,810 $ 0 $23,237 $54,039 $3,462
Capital gains income 535,426 185,843 169,182 123,629 0 0 0 0 0 0
Net Realized and
unrealized gain(loss)
on investments:
Net realized
gain(loss) on
security transactions (14,530) 344 2,670 (30) 552 1,498 (12,339) 0 5,524 46
Net unrealized
appreciation
(depreciation) of
investments during
the period 751,296 229,853 178,672 (60,103) (36,503) (165,906) 201,571 0 21,749 (2,603)
-------- -------- -------- ----------- -------- ---------- ------------- -------- ----------- -----------
Net gain(losses)
on investments 736,766 230,197 181,342 (60,133) (35,951) (164,408) 189,232 0 27,273 (2,557)
-------- -------- -------- ----------- -------- ---------- ------------- -------- ----------- -----------
Net increase
(decrease) in net
assets resulting
from operations: $1,547,515 $543,616 $723,651 $251,894 $64,318 ($45,598) $189,232 $23,237 $81,312 $ 905
-------- -------- -------- ----------- -------- ---------- ------------- -------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these financial statements
48
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT VARIABLE LIFE ONE
Hartford Life Insurance Company
Statement of Changes in Net Assets
June 30, 1996
<TABLE>
<CAPTION>
U.S.
Government
Growth Global and High Utilities
Global and Asset High Quality New Money Growth Diversified
Voyager Growth Income Allocation Yield Bond Opportunities Market and Income Income
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub-
Account Account Account Account Account Account Account Account Account Account
----------- ---------- ----------- ----------- ---------- ---------- ------------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $275,323 $127,576 $373,127 $188,398 $100,269 $118,810 $ 0 $23,237 $54,039 $3,462
Capital gains
income 535,426 185,843 169,182 123,629 0 0 0 0 0 0
Net realized
gain(loss) on
security
transactions (14,530) 344 2,670 (30) 552 1,498 (12,339) 0 5,524 46
Net unrealized
appreciation
(depreciation) of
investments during
the period 751,296 229,853 178,672 (60,103) (36,503) (165,906) 201,571 0 21,749 (2,603)
----------- ---------- ----------- ----------- ---------- ---------- ------------- --------- ------------ --------
Net increase
(decrease) in
net assets
resulting from
operations 1,547,515 543,616 723,651 251,894 64,318 (45,598) 189,232 23,237 81,312 905
----------- ---------- ----------- ----------- ---------- ---------- ------------- --------- ------------ --------
Unit transactions:
Purchases 1,795,145 726,321 866,909 201,171 196,814 268,044 418,255 114,607 83,921 5,863
Net transfers 3,870,250 1,664,533 2,512,900 527,827 133,103 710,049 2,646,225 1,040,567 144,294 72,745
Surrenders (306,420) (138,147) (79,653) (24,202) (19,009) (7,594) (49,751) (6,763) (10,912) (586)
Loan withdrawals (122,556) (26,644) (26,769) (11,112) (8,139) (62,863) (5,740) (31,570) (3,861) 0
Cost of Insurance (334,880) (135,221) (148,176) (56,497) (49,854) (42,575) (49,680) (31,798) (20,183) (1,347)
----------- ---------- ----------- ----------- ---------- ---------- ------------- --------- ------------ --------
Total increase
(decrease) in net
assets resulting
from unit 4,901,539 2,090,842 3,125,211 637,187 252,915 865,061 2,959,309 1,085,043 193,259 76,675
----------- ---------- ----------- ----------- ---------- ---------- ------------ ---------- ------------ --------
Total increase
(decrease) in
net assets 6,449,054 2,634,458 3,848,862 889,081 317,233 819,463 3,148,541 1,108,280 274,571 77,580
Net Assets:
Beginning of
period 11,493,403 4,675,783 6,786,680 3,733,099 1,123,354 1,420,875 884,844 398,614 1,215,244 14,208
----------- ---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------ --------
End of Period $17,942,457 $7,310,241 $10,635,542 $4,622,180 $1,440,587 $2,240,338 $4,033,385 $1,506,894 $1,489,815 $91,788
----------- ---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------ --------
</TABLE>
The accompanying notes are an integral part of these financial statements
49
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT VARIABLE LIFE ONE
Hartford Life Insurance Company
Statement of Changes in Net Assets
December 31, 1996
<TABLE>
<CAPTION>
U.S.
Government
Growth Global and High Utilities
Global and Asset High Quality New Money Growth Diversified
Voyager Growth Income Allocation Yield Bond Opportunities Market and Income Income
Fund Fund Fund Fund Fund Fund Fund Fund Fund Fund
Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub- Sub-
Account Account Account Account Account Account Account Account Account Account
----------- ---------- ----------- ----------- ---------- ---------- ------------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $14,475 $24,814 $121,893 $39,388 $45,484 $22,761 $ 0 $14,226 $47,950 0
Capital gains
income 106,726 46,171 31,376 0 0 0 0 0 0 0
Net realized
gain(loss) on
security transactions 1,707 932 1,768 14,435 35 2,030 56 0 3,151 10
Net unrealized
appreciation
(depreciation) of
investments during
the period 2,361,906 471,341 1,198,951 535,036 64,042 74,145 58,166 0 229,924 1,182
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
Net increase
(decrease) in net
assets resulting
from operations 2,484,814 543,258 1,353,988 588,859 109,561 98,936 58,222 14,226 281,025 1,192
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
Unit transactions:
Purchases 2,208,784 1,154,464 899,746 339,758 232,533 165,903 140,605 77,580 168,645 765
Net transfers 4,010,510 1,287,158 2,362,146 2,127,164 488,483 964,335 712,707 106,176 71,815 12,424
Surrenders (313,366) (133,739) (160,057) (72,050) (36,113) (33,996) (14,763) (5,881) (74,646) (57)
Loan withdrawals (64,074) (58,904) (75,016) (55,002) (3,445) (11,534) (5,438) (31,209) (2,201) 0
Cost of Insurance (368,558) (172,021) (152,234) (78,172) (47,259) (27,019) (6,489) (14,549) (26,397) (116)
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
Total increase
(decrease) in net
assets resulting
from unit 5,473,296 2,076,958 2,874,585 2,261,698 634,199 1,057,689 826,622 132,117 137,216 13,016
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
Total increase
(decrease) in
net assets 7,958,110 2,620,216 4,228,573 2,850,557 743,760 1,156,625 884,844 146,343 418,241 14,208
Net Assets:
Beginning of
period 3,535,293 2,055,567 2,558,107 882,542 379,594 264,250 0 252,271 797,003 0
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
End of Period $11,493,403 $4,675,783 $6,786,680 $3,733,099 $1,123,354 $1,420,875 $884,844 $398,614 $1,215,244 $14,208
----------- ---------- ----------- ----------- ---------- ---------- ----------- --------- ------------ ----------
</TABLE>
The accompanying notes are an integral part of these financial statements
50
<PAGE>
HARTFORD LIFE INSURANCE COMPANY
PUTNAM CAPITAL MANAGER TRUST
SEPARATE ACCOUNT VARIABLE LIFE ONE
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
1. ORGANIZATION:
Separate Account Variable Life One (the Account) is a separate
investment account within Hartford Life Insurance Company (the Company)
and is registered with the Securities and Exchange Commission (SEC) as a
unit investment trust under the Investment Company Act of 1940, as
amended. The Account consists of twenty two subaccounts which invest
solely in the Putnam Capital Manager Trust funds (the Funds). The other
twelve subaccounts, which invest in the Hartford and Fidelity Mutual
Funds, are presented in separate financial statements. Both the Company
and the Account are subject to supervision and regulation by the
Department of Insurance of the State of Connecticut and the SEC. The
Account invests deposits by variable life contractholders of the Company
in various mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS - Security transactions are recorded on the
trade date (date the order to buy or sell is executed). Cost of
investments sold is determined on the basis of identified cost.
Dividend and capital gains income are accrued as of the ex-dividend
date. Capital gains income represents dividends from the Funds which are
characterized as capital gains under tax regulations.
b) SECURITY VALUATION - The investment in shares of the Funds are valued
at the closing net asset value per share as determined by the
appropriate Fund as of June 30, 1996.
c) FEDERAL INCOME TAXES - The operations of the Account form a part
of, and are taxed with, the total operations of the Company, which is
taxed as an insurance company under the Internal Revenue Code. Under
current law, no federal income taxes are payable with respect to the
operations of the Account.
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 as of the date of the financial
statements and the reported amounts of income and expenses during the
period. Operating results in the future could vary from the amounts
derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes
deductions from mortality and expense undertakings, cost of
insurance, administrative fees, and state premium taxes. These charges
are deducted through termination of units of interest from applicable
contract owners' accounts.
51
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VARIABLE LIFE ONE AND TO THE
OWNERS OF UNITS OF INTEREST THEREIN:
We have audited the accompanying statement of assets & liabilities of the Bond
Fund Sub-Account, Stock Fund Sub-Account, Money Market Fund Sub-Account,
Advisers Fund Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage
Securities Fund Sub-Account, Index Fund Sub-Account, International
Opportunities Fund Sub-Account, Dividend and Growth Fund Sub-Account, Fidelity
VIP Equity Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account (the Account) (constituting
Hartford Life Insurance Company Separate Account Variable Life One) as of
December 31, 1995, and the related statement of operations for the year then
ended (except for Fidelity VIP Equity Income Fund Sub-Account, Fidelity VIP
Overseas Fund Sub-Account and Fidelity VIP II Asset Manager Fund Sub-Account
which reflect the period from inception, May 1, 1995, to December 31, 1995),
and statements of changes in net assets for each of the two years in the period
then ended (except for Fidelity VIP Equity Income Fund Sub-Account, Fidelity
VIP Overseas Fund Sub-Account and Fidelity VIP II Asset Manager Fund
Sub-Account which reflect the period from inception, May 1, 1995, to December
31, 1995 and Dividend and Growth Fund Sub-Account which reflects the year ended
December 31, 1995). These financial statements are the responsibility of the
Account's management. 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. 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 Bond Fund Sub-Account,
Stock Fund Sub-Account, Money Market Fund Sub-Account, Advisers Fund
Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage Securities Fund
Sub-Account, Index Fund Sub-Account, International Opportunities Fund
Sub-Account, Dividend and Growth Fund Sub-Account, Fidelity VIP Equity Fund
Sub-Account, Fidelity VIP Overseas Fund Sub-Account and Fidelity VIP II Asset
Manager Fund Sub-Account (the Account) (constituting Hartford Life Insurance
Company Separate Account Variable Life One) as of December 31, 1995, the
results of their operations for the year then ended (except for Fidelity VIP
Equity Income Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account which reflect the period from
inception, May 1, 1995, to December 31, 1995) and the changes in their net
assets for each of the two years in the period then ended (except for Fidelity
VIP Equity Income Fund Sub-Account, Fidelity VIP Overseas Fund Sub-Account and
Fidelity VIP II Asset Manager Fund Sub-Account which reflect the period from
inception, May 1, 1995, to December 31, 1995 and Dividend and Growth Fund
Sub-Account which reflects the year ended December 31, 1995) in conformity with
generally accepted accounting principles.
Hartford, Connecticut
February 19, 1996 Arthur Andersen LLP
52
<PAGE>
Separate Account Variable Life One
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 1,606,221
Cost $1,561,680
Market Value......... $1,651,616 -- -- --
Hartford Stock Fund,
Inc.
Shares 1,967,237
Cost $5,980,432
Market Value......... -- $6,938,484 -- --
HVA Money Market Fund,
Inc.
Shares 9,602,997
Cost $9,602,997
Market Value......... -- -- $9,602,997 --
Hartford Advisers Fund,
Inc.
Shares 2,369,257
Cost $4,065,702
Market Value......... -- -- -- $4,640,048
Hartford Capital
Appreciation Fund,
Inc.
Shares 2,302,713
Cost $7,054,945
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 641,321
Cost $ 656,691
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 738,584
Cost $1,326,863
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 3,016,436
Cost $3,619,160
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 46,225
Cost $ 55,570
Market Value......... -- -- -- --
Fidelity VIP Equity
Income Fund
Shares 37,136
Cost $ 877,721
Market Value......... -- -- -- --
Fidelity VIP Overseas
Fund
Shares 4,484
Cost $ 74,109
Market Value......... -- -- -- --
Fidelity Asset Manager
Fund
Shares 2,344
Cost $ 34,516
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company..... 584 46,514 1,235,574 25,477
Receivable from fund
shares sold........... -- -- -- --
------------- ----------- ----------- -------------
Total Assets........... 1,652,200 6,984,998 10,838,571 4,665,525
------------- ----------- ----------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- --
Payable for fund shares
purchased............. 584 46,515 1,229,222 25,478
------------- ----------- ----------- -------------
Total Liabilities...... 584 46,515 1,229,222 25,478
------------- ----------- ----------- -------------
Net Assets (variable
life contract
liabilities).......... $1,651,616 $6,938,483 $9,609,349 $4,640,047
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
Units Outstanding........ 1,386,137 4,822,055 8,593,579 3,459,254
Accumulation Unit Value
at end of period....... $ 1.191524 $ 1.438906 $ 1.118201 $ 1.341343
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
53
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND EQUITY
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 1,606,221
Cost $1,561,680
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 1,967,237
Cost $5,980,432
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 9,602,997
Cost $9,602,997
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 2,369,257
Cost $4,065,702
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 2,302,713
Cost $7,054,945
Market Value......... $8,035,685 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 641,321
Cost $ 656,691
Market Value......... -- $ 687,022 -- -- -- --
Hartford Index Fund,
Inc.
Shares 738,584
Cost $1,326,863
Market Value......... -- -- $1,497,790 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 3,016,436
Cost $3,619,160
Market Value......... -- -- -- $3,938,532 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 46,225
Cost $ 55,570
Market Value......... -- -- -- -- $ 60,878 --
Fidelity VIP Equity
Income Fund
Shares 37,136
Cost $ 877,721
Market Value......... -- -- -- -- -- $ 715,612
Fidelity VIP Overseas
Fund
Shares 4,484
Cost $ 74,109
Market Value......... -- -- -- -- -- --
Fidelity Asset Manager
Fund
Shares 2,344
Cost $ 34,516
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company..... 152,277 1,239 45,827 151,542 -- 10
Receivable from fund
shares sold........... -- -- -- -- 7,874 --
----------------- --------------- ----------- ------------------ ------------ ------------
Total Assets........... 8,187,962 688,261 1,543,617 4,090,074 68,752 715,622
----------------- --------------- ----------- ------------------ ------------ ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- -- -- -- 7,874 --
Payable for fund shares
purchased............. 152,276 1,239 45,827 151,543 -- --
----------------- --------------- ----------- ------------------ ------------ ------------
Total Liabilities...... 152,276 1,239 45,827 151,543 7,874 --
----------------- --------------- ----------- ------------------ ------------ ------------
Net Assets (variable
life contract
liabilities).......... $8,035,686 $ 687,022 $1,497,790 $3,938,531 $ 60,878 $ 715,622
----------------- --------------- ----------- ------------------ ------------ ------------
----------------- --------------- ----------- ------------------ ------------ ------------
Units Outstanding........ 5,555,220 583,159 1,043,582 2,972,166 49,377 595,397
Accumulation Unit Value
at end of period....... $ 1.446511 $ 1.178104 $ 1.435240 $ 1.325138 $ 1.232922 $ 1.201923
<CAPTION>
FIDELITY VIP
FIDELITY VIP II
OVERSEAS ASSET
FUND MANAGER FUND
SUB-ACCOUNT SUB-ACCOUNT
------------ ------------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Stock Fund,
Inc.
Shares
Cost
Market Value......... -- --
HVA Money Market Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Advisers Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Mortgage
Securities Fund, Inc.
Shares
Cost
Market Value......... -- --
Hartford Index Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford International
Opportunities Fund,
Inc.
Shares
Cost
Market Value......... -- --
Hartford Dividend and
Growth Fund, Inc.
Shares
Cost
Market Value......... -- --
Fidelity VIP Equity
Income Fund
Shares
Cost
Market Value......... -- --
Fidelity VIP Overseas
Fund
Shares
Cost
Market Value......... $ 76,459 --
Fidelity Asset Manager
Fund
Shares
Cost
Market Value......... -- $ 37,015
Due from Hartford Life
Insurance Company..... -- --
Receivable from fund
shares sold........... 10,528 11,491
------------ ------------
Total Assets........... 86,987 48,506
------------ ------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 10,630 11,536
Payable for fund shares
purchased............. -- --
------------ ------------
Total Liabilities...... 10,630 11,536
------------ ------------
Net Assets (variable
life contract
liabilities).......... $ 76,357 $ 36,970
------------ ------------
------------ ------------
Units Outstanding........ 71,025 32,873
Accumulation Unit Value
at end of period....... $ 1.075072 $ 1.124638
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
54
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $72,383 $ 97,045 $305,022 $121,941
------------- ----------- ----------- -------------
Net investment income
(loss).............. 72,383 97,045 305,022 121,941
------------- ----------- ----------- -------------
Capital gains income... -- 85,946 -- 30,081
------------- ----------- ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 7,394 5,809 -- 2,907
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 97,007 1,009,567 -- 667,925
------------- ----------- ----------- -------------
Net gains (losses) on
investments......... 104,401 1,015,376 -- 670,832
------------- ----------- ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $176,784 $1,198,367 $305,022 $822,854
------------- ----------- ----------- -------------
------------- ----------- ----------- -------------
</TABLE>
* From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
55
<PAGE>
<TABLE>
<CAPTION>
FIDELITY VIP
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND EQUITY
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND INCOME FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
----------------- --------------- ----------- ------------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 48,724 $39,041 $16,866 $ 46,972 $ 536 $ 5,067
----------------- ------- ----------- -------- ------ ------------
Net investment income
(loss).............. 48,724 39,041 16,866 46,972 536 5,067
----------------- ------- ----------- -------- ------ ------------
Capital gains income... 159,934 -- 117 19,345 -- --
----------------- ------- ----------- -------- ------ ------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (91) 66 232 1,947 67 (7)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 998,680 47,911 170,588 351,104 5,309 37,890
----------------- ------- ----------- -------- ------ ------------
Net gains (losses) on
investments......... 998,589 47,977 170,820 353,051 5,376 37,883
----------------- ------- ----------- -------- ------ ------------
Net increase
(decrease) in net
assets resulting
from operations..... $1,207,247 $87,018 $187,803 $419,368 $5,912 $ 42,950
----------------- ------- ----------- -------- ------ ------------
----------------- ------- ----------- -------- ------ ------------
<CAPTION>
FIDELITY VIP
FIDELITY VIP II
OVERSEAS ASSET
FUND MANAGER FUND
SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ -- $ --
------ ------
Net investment income
(loss).............. -- --
------ ------
Capital gains income... -- --
------ ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 140 229
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 2,351 2,499
------ ------
Net gains (losses) on
investments......... 2,491 2,728
------ ------
Net increase
(decrease) in net
assets resulting
from operations..... $ 2,491 $ 2,728
------ ------
------ ------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
56
<PAGE>
Separate Account Variable Life One
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 72,383 $ 97,045 $ 305,022 $ 121,941
Capital gains income... -- 85,946 -- 30,081
Net realized gain
(loss) on security
transactions.......... 7,394 5,809 -- 2,907
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 97,007 1,009,567 -- 667,925
----------- ----------- -------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 176,784 1,198,367 305,022 822,854
----------- ----------- -------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 80,111 891,394 30,911,497 599,791
Net transfers.......... 1,202,083 3,494,521 (22,537,618) 1,102,448
Surrenders............. (16,941) (130,094) (212,380) (101,194)
Net loan withdrawals... (73,159) (82,429) (5,589,429) (26,807)
Cost of insurance and
other fees............ (33,808) (192,045) (484,560) (126,639)
----------- ----------- -------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,158,286 3,981,347 2,087,510 1,447,599
----------- ----------- -------------- -------------
Total increase
(decrease) in net
assets................ 1,335,070 5,179,714 2,392,532 2,270,453
NET ASSETS:
Beginning of period.... 316,546 1,758,769 7,216,817 2,369,594
----------- ----------- -------------- -------------
End of period.......... $1,651,616 $6,938,483 $ 9,609,349 $4,640,047
----------- ----------- -------------- -------------
----------- ----------- -------------- -------------
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1994
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- -------------- -------------
OPERATIONS:
Net investment income
(loss)................ $ 6,922 $ 20,615 $ 99,860 $ 51,536
Capital gains income... 311 27,224 -- 17,202
Net realized gain
(loss) on security
transactions.......... (195) (175) -- 1,897
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (7,019) (60,514) -- (96,460)
----------- ----------- -------------- -------------
Net increase (decrease)
in net assets
resulting from
operations............ 19 (12,850) 99,860 (25,825)
----------- ----------- -------------- -------------
UNIT TRANSACTIONS:
Purchases.............. 37,028 290,304 20,258,603 434,023
Net transfers.......... 272,187 1,294,999 (13,565,371) 1,557,649
Surrenders............. (4,429) (35,895) (142,419) (40,579)
Loan withdrawals....... (14) (4,367) (435,997) (26,091)
Cost of insurance...... (5,283) (61,111) (265,027) (51,186)
----------- ----------- -------------- -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 299,489 1,483,930 5,849,789 1,873,816
----------- ----------- -------------- -------------
Total increase
(decrease) in net
assets................ 299,508 1,471,080 5,949,649 1,847,991
NET ASSETS:
Beginning of period.... 17,038 287,689 1,267,168 521,603
----------- ----------- -------------- -------------
End of period.......... $ 316,546 $1,758,769 $ 7,216,817 $2,369,594
----------- ----------- -------------- -------------
----------- ----------- -------------- -------------
</TABLE>
* From inception, May 1, 1995, to December 31, 1995.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
57
<PAGE>
<TABLE>
<CAPTION>
CAPTIAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 48,724 $ 39,041 $ 16,866 $ 46,972 $ 536
Capital gains income... 159,934 -- 117 19,345 --
Net realized gain
(loss) on security
transactions.......... (91) 66 232 1,947 67
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 998,680 47,911 170,588 351,014 5,309
----------------- --------------- ----------- ------------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ 1,207,247 87,018 187,803 419,278 5,912
----------------- --------------- ----------- ------------------ ------------
UNIT TRANSACTIONS:
Purchases.............. 1,865,000 9,664 258,782 968,432 30,236
Net transfers.......... 2,860,807 112,099 942,414 909,391 37,813
Surrenders............. (209,729) (6,610) (20,596) (161,497) (12,610)
Net loan withdrawals... (53,870) -- (30,128) (39,629) --
Cost of insurance and
other fees............ (276,771) (9,804) (42,284) (150,874) (473)
----------------- --------------- ----------- ------------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 4,185,437 105,349 1,108,188 1,525,823 54,966
----------------- --------------- ----------- ------------------ ------------
Total increase
(decrease) in net
assets................ 5,392,684 192,367 1,295,991 1,945,101 60,878
NET ASSETS:
Beginning of period.... 2,643,002 494,655 201,799 1,993,340 --
----------------- --------------- ----------- ------------------ ------------
End of period.......... $8,035,686 $ 687,022 $1,497,790 $3,938,441 $ 60,878
----------------- --------------- ----------- ------------------ ------------
----------------- --------------- ----------- ------------------ ------------
CAPITAL MORTGAGE INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------
OPERATIONS:
Net investment income
(loss)................ $ 6,904 $ 20,821 $ 2,556 $ 17,054
Capital gains income... 73,831 23 -- --
Net realized gain
(loss) on security
transactions.......... 240 (255) 2 (309)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (37,253) (17,533) (324) (49,550)
----------------- --------------- ----------- ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 43,722 3,056 2,234 (32,805)
----------------- --------------- ----------- ------------------
UNIT TRANSACTIONS:
Purchases.............. 701,847 6,854 68,645 487,568
Net transfers.......... 1,548,441 487,586 116,406 1,394,539
Surrenders............. (85,763) (3,931) (6,167) (56,052)
Loan withdrawals....... (2,817) -- -- (5,771)
Cost of insurance...... (109,663) (3,376) (8,623) (65,611)
----------------- --------------- ----------- ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,052,045 487,133 170,261 1,754,673
----------------- --------------- ----------- ------------------
Total increase
(decrease) in net
assets................ 2,095,767 490,189 172,495 1,721,868
NET ASSETS:
Beginning of period.... 547,235 4,466 29,304 271,472
----------------- --------------- ----------- ------------------
End of period.......... $2,643,002 $ 494,655 $ 201,799 $1,993,340
----------------- --------------- ----------- ------------------
----------------- --------------- ----------- ------------------
<CAPTION>
FIDELITY VIP FIDELITY VIP II
EQUITY FIDELITY VIP ASSET MANAGER
INCOME FUND OVERSEAS FUND FUND
SUB-ACCOUNT* SUB-ACCOUNT* SUB-ACCOUNT*
------------ ------------- -----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 5,067 $18,683 $ --
Capital gains income... -- -- --
Net realized gain
(loss) on security
transactions.......... (7) 140 229
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 37,890 2,351 2,499
------------ ------------- --------
Net increase (decrease)
in net assets
resulting from
operations............ 42,950 2,491 2,728
------------ ------------- --------
UNIT TRANSACTIONS:
Purchases.............. 206,082 18,683 12,310
Net transfers.......... 474,024 67,416 34,943
Surrenders............. (7,434) (12,233) (13,011)
Net loan withdrawals... -- -- --
Cost of insurance and
other fees............ -- -- --
------------ ------------- --------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 672,672 73,866 34,242
------------ ------------- --------
Total increase
(decrease) in net
assets................ 715,622 76,357 36,970
NET ASSETS:
Beginning of period.... -- -- --
------------ ------------- --------
End of period.......... $ 715,622 $76,357 $ 36,970
------------ ------------- --------
------------ ------------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
58
<PAGE>
SEPARATE ACCOUNT VARIABLE LIFE ONE
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. ORGANIZATION:
Separate Account Variable Life One (the Account) is a separate investment
account within Hartford Life Insurance Company (the Company) and is
registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940, as amended. The
Account consists of twenty two sub-accounts. These financial statements
include twelve sub-accounts which invest solely in Hartford and Fidelity
Mutual Funds (the Funds). The other ten sub-accounts, which invest in Putnam
Capital Manager Trust Funds, are presented in separate financial statements.
Both the Company and the Account are subject to supervision and regulation
by the Department of Insurance of the State of Connecticut and the SEC. The
Account invests deposits by variable life contractholders of the Company in
various mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS--Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments
sold is determined on the basis of identified cost. Dividend and capital
gains income are accrued as of the ex-dividend date. Capital gains income
represents dividends from the Funds which are characterized as capital
gains under tax regulations.
b) SECURITY VALUATION--The investment in shares of the Hartford and Fidelity
mutual funds are valued at the closing net asset value per share as
determined by the appropriate Fund as of December 31, 1995.
c) FEDERAL INCOME TAXES--The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the operations of the
Account.
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 as of the date of the financial statements and the reported
amounts of income and expenses during the period. Operating results in
the future could vary from the amounts derived from management's
estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative
fees, and state premium taxes. These charges are deducted through
termination of units of interest from applicable contract owners' accounts.
59
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of ___ pages.
The undertaking to file reports.
The Rule 484 undertaking.
The signature page.
(1) The following exhibits included herewith correspond to those required by
paragraph A of the instructions for exhibits to Form N-8B-2.
(A1) Resolution of Board of Directors of the Company authorizing the
Separate Account is incorporated by reference to Post-Effective
Amendment No. 3 to the Registration Statement File No. 33-53692,
filed on April 20, 1995.
(A2) Not applicable.
(A3a) Principal Underwriting Agreement is incorporated by reference
to the Registration Statement File No. 333-07465, filed on
July 2, 1996.
(A3b) Form of Selling Agreements is incorporated by reference to the
Registration Statement File No. 333-07465, filed on July 2, 1996.
(A3c) Not applicable.
(A4) Not applicable.
(A5) Form of Flexible Premium Variable Life Insurance Policy is
incorporated by reference to the Registration Statement File No.
333-07465, filed on July 2, 1996.
(A6a) Charter of Hartford Life Insurance Company is incorporated by
reference to Post-Effective Amendment No. 3 to the Registration
Statement File No. 33-53692, filed on April 20, 1995.
(A6b) Bylaws of Hartford Life Insurance Company is incorporated by
reference to Post-Effective Amendment No. 3 to the Registration
Statement File No. 33-53692, filed on April 20, 1995.
(A7) Not applicable.
(A8) Not applicable.
(A9) Not applicable.
<PAGE>
(A10) Form of Application for Flexible Premium Variable Life Insurance
Policies is incorporated by reference to Post-Effective Amendment
No. 3 to the Registration Statement File No. 33-53692, filed on
April 20, 1995.
(A11) Memorandum describing transfer and redemption procedures - filed
herewith.
(2) Opinion and consent of Lynda Godkin, General Counsel is incorporated by
reference to the Registration Statement File No. 333-07465, filed on
July 2, 1996.
(3) No financial statement will be omitted from the Prospectus pursuant to
Instruction 1(b) or (c) of Part I.
(4) Not applicable.
(5) Opinion and consent of Ken A. McCullum, FSA, MAAA is incorporated by
reference to the Registration Statement File No. 333-07465, filed on
July 2, 1996.
(6) Consent of Arthur Andersen LLP Independent Public Accountants - filed
herewith.
(7) Power of Attorney is incorporated by reference to the Registration
Statement File No. 333-07465, filed on July 2, 1996.
<PAGE>
REPRESENTATION OF REASONABLENESS OF FEES
The undersigned Registrant hereby represents that the aggregate fees and
charges under the Policy are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by Hartford Life.
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
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.
UNDERTAKINGS AND REPRESENTATIONS AS REQUIRED BY RULE 6E-3(T)
1. Separate Account VL I meets the definition of "Separate Account" under
Rule 6e-3(T).
2. The Registrant represents that:
(a) it relies on Rule 6e-3(T)(b)(13)(ii)(F) to offer the Policies;
(b) the level of mortality and expense risk charge is within the range of
industry practice for comparable flexible contracts.
(c) the Company has conducted a survey of similar policies and insurers
and determined that the charge is within the range of industry
practice;
(d) the Company undertakes to keep and make available to the Commission
upon request the documents we used to support the representation in
(b); and
(e) the Company further represents that the account will invest only in
management investment companies which have undertaken to have a Board
of Directors, a majority of whom are not interested persons of the
Company, formulate and approve a plan under Rule 12b-1 to finance
distribution expenses.
(f) The life insurer has concluded that there is a reasonable likelihood
that the distribution financing arrangement of the separate account
benefits the separate account and contractholders and will keep and
make available to the Commission on request a memorandum setting for
the basis for this representation.
UNDERTAKING ON INDEMNIFICATION
Article VIII of the Bylaws of Hartford Life Insurance Company, a Connecticut
corporation, provides for indemnification of its officers, directors and
employees to the extent consistent with statutory requirements.
Connecticut General Laws Section 33-320a provides for indemnification of
officers, directors and employees of a corporation as follows:
<PAGE>
(b) Except as otherwise provided in this section, a corporation shall
indemnify any person made a party to any proceeding, other than an action by
or in the right of the corporation, by reason of the fact that he, or the
person whose legal representative he is, is or was a shareholder, director,
officer, employee or agent of the corporation, or an eligible outside party,
against judgments, fines, penalties, amounts paid in settlement and
reasonable expenses actually incurred by him, and the person whose legal
representative he is, in connection with such proceeding. The corporation
shall not so indemnify any such person unless (1) such person, and the person
whose legal representative he is, was successful on the merits in the defense
of any proceeding referred to in this subsection, or (2) it shall be
concluded as provided in subsection (d) of this section that such person, and
the person whose legal representative he is, acted in good faith and in a
manner he reasonably believed to be in the best interests of the corporation
or, in the case of a person serving as a fiduciary of an employee benefit
plan or trust, either in the best interests of the corporation or in the best
interests of the participants and beneficiaries of such employee benefit plan
or trust and consistent with the provisions of such employee benefit plan or
trust and, with respect to any criminal action or proceeding, that he had no
reasonable cause to believe his conduct was unlawful, or (3) the court, on
application as provided in subsection (e) of this section, shall have
determined that in view of all the circumstances such person is fairly and
reasonably entitled to be indemnified, and then for such amount as the court
shall determine; except that, in connection with an alleged claim based upon
his purchase or sale of securities of the corporation or of another
enterprise, which he serves or served at the request of the corporation, the
corporation shall only indemnify such person after the court shall have
determined, on application as provided in subsection (e) of this section,
that in view of all the circumstances such person is fairly and reasonably
entitled to be indemnified, and then for such amount as the court shall
determine. The termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith or in
a manner which he did not reasonably believe to be in the best interests of
the corporation or of the participants and beneficiaries of such employee
benefit plan or trust and consistent with the provisions of such employee
benefit plan or trust, or, with respect to any criminal action or proceeding,
that he had reasonable cause to believe that his conduct was unlawful.
(c) Except as otherwise provided in this section, a corporation shall
indemnify any person made a party to any proceeding, by or in the right of
the corporation, to procure a judgment in its favor by reason of the fact
that he, or the person whose legal representative he is, is or was a
shareholder, director, officer, employee or agent of the corporation, or an
eligible outside party, against reasonable expenses actually incurred by him
in connection with such proceeding in relation to matters as to which such
person, or the person whose legal representative he is, is finally adjudged
not to have breached his duty to the corporation, or where the court, on
application as provided in subsection (e) of this section, shall have
determined that in view of all the circumstances such person is fairly and
reasonably entitled to be indemnified, and then for such amount as the court
shall determine. The corporation shall not so indemnify any such person for
amounts paid to the corporation, to a plaintiff or to counsel for a plaintiff
in settling or otherwise disposing of a proceeding, with or without court
approval; or for expenses incurred in defending a proceeding which is settled
or otherwise disposed of without court approval.
(d) The conclusion provided for in subsection (b) of this section may be
reached by any one of the following: (1) The Board of Directors of the
corporation by a consent in writing signed by a majority of those directors
who were not parties to such proceeding; (2) independent legal counsel
selected by a consent in writing signed by a majority of those directors who
were not parties to such proceeding; (3) in the case of any employee or agent
who is not an officer or director of the corporation, the corporation's
general counsel; or (4) the shareholders of the corporation by the
affirmative vote of at least a majority of the voting power of shares not
owned by parties to such proceeding, represented at an annual or special
meeting of shareholders, duly called with notice of such purpose stated.
Such person shall also be entitled to apply to a court for such conclusion,
upon application as provided in subsection (e), even though the conclusion
reached by any of the foregoing shall have been adverse to him or to the
person whose legal representative he is.
<PAGE>
(e) Where an application for indemnification or for a conclusion as provided
in this section is made to a court, it shall be made to the court in which
the proceeding is pending or to the superior court for the judicial district
where the principal office of the corporation is located. The application
shall be made in such manner and form as may be required by the applicable
rules of the court or, in the absence thereof, by direction of the court.
The court may also direct the notice be given in such manner as it may
require at the expense of the corporation to the shareholders of the
corporation and to such other persons as the court may designate. In the
case of an application to a court in which a proceeding is pending in which
the person seeking indemnification is a party by reason of the fact that he,
or the person whose legal representative he is, is or was serving at the
request of the corporation as a director, partner, trustee, officer, employee
or agent of another enterprise, or as a fiduciary of an employee benefit plan
or trust maintained for the benefit of employees of any other enterprise,
timely notice of such application shall be given by such person to the
corporation.
(f) Expenses which may be indemnifiable under this section incurred in
defending a proceeding may be paid by the corporation in advance of the final
disposition of such proceeding as authorized by the Board of Directors upon
agreement by or on behalf of the shareholder, director, officer, employee,
agent or eligible outside party, or his legal representative, to repay such
amount if he is later found not entitled to be indemnified by the corporation
as authorized in this section.
(g) A corporation shall not indemnify any shareholder, director, officer,
employee, agent or eligible outside party, other than a shareholder,
director, officer, employee, agent or eligible outside party who is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee or agent of another enterprise, against judgments, fines,
penalties, amounts paid in settlement and expenses to an extent either
greater or less than that authorized in this section. No provision made a
part of the incorporation, the bylaws, a resolution or shareholders or
directors, an agreement, or otherwise on or after October 1, 1982, shall be
valid unless consistent with this section. Notwithstanding the foregoing, the
corporation may procure insurance providing greater indemnification and may
share the premium cost with any shareholder, director, officer, employee,
agent or eligible outside party on such basis as may be agreed upon. The
rights and remedies provided in this section shall be exclusive." The
registrant hereby undertakes that insofar as indemnification for liability
arising under the Securities Act of 1933 (the "Act") 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, and its seal to be herewith affixed and attested, all in the city
of Simsbury, and the State of Connecticut on the ____ day of ________, 1996.
HARTFORD LIFE INSURANCE COMPANY
SEPARATE ACCOUNT VL I
(Registrant)
By:______________________________________________
Gregory A. Boyko, Vice President & Controller
HARTFORD LIFE INSURANCE COMPANY
(Depositor)
By:______________________________________________
Gregory A. Boyko, Vice President & Controller
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons and in the capacities and
on the dates indicated.
Donald R. Frahm, Chairman and
Chief Executive Officer, Director *
Bruce D. Gardner, Vice President
Director *
Joseph H. Gareau, Executive Vice
President and Chief Investment
Officer, Director *
John P. Ginnetti, Executive Vice
President, Director *
Thomas M. Marra, Executive Vice *By:___________________________
President, Director * Lynda Godkin
Leonard E. Odell, Jr., Senior Attorney-In-Fact
Vice President, Director *
Lowndes A. Smith, President,
Chief Operating Officer, Dated:__________________________
Director *
Raymond P. Welnicki, Senior Vice
President, Director *
Lizabeth H. Zlatkus, Vice President
Director *
<PAGE>
EXHIBIT 1A11
HARTFORD LIFE INSURANCE COMPANY
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
DESCRIPTION OF TRANSFER AND REDEMPTION PROCEDURES AND
METHOD OF COMPUTING ADJUSTMENTS IN PAYMENTS AND
ACCOUNT VALUES UPON CONVERSION TO
FIXED BENEFIT POLICIES
This document sets forth, as required by Rule 6e-3(T)(b)(12)(ii), the
administrative procedures that will be followed by Hartford Life Insurance
Company and ITT Hartford Life and Annuity Insurance Company (collectively
"Hartford") in connection with the issuance of its last survivor flexible
premium variable life insurance policy (the "Policy"), the transfer of assets
held thereunder, and the redemption by Policy Owners of their interests in
said Policies. The document also describes the method that Hartford will use
in adjusting the payments and cash values when a Policy is exchanged for a
fixed benefit insurance policy pursuant to Rule 6e-3(T)(b)(13)(v)(B).
TRANSFER AND REDEMPTION PROCEDURES
I. PURCHASE AND RELATED TRANSACTIONS
A. PREMIUMS AND UNDERWRITING STANDARDS
This Policy is a last survivor flexible premium variable life policy.
The Policies will be offered and sold pursuant to established underwriting
standards and in accordance with state insurance laws, which prohibit unfair
discrimination among Policy Owners, but recognize that premiums must be
based upon factors such as age, health or occupation.
B. APPLICATION AND INITIAL PREMIUM PROCESSING
Upon receipt of a completed application, Hartford will follow certain
insurance underwriting (i.e., evaluation of risks) procedures designed to
determine whether the applicant is insurable. This process may involve such
verification procedures as medical examinations and may require that further
information be provided by the proposed Insured before a determination can
be made. A Policy will not be issued and consequently a Policy Issue Date
established, until this underwriting procedure has been completed.
If a premium is submitted with the Policy application, insurance coverage
will begin immediately if the proposed Insured is insurable at a standard
rate under a conditional receipt agreement. Otherwise, insurance coverage
will not begin until the Policy's Issue Date. In either case, the Policy
when issued will be effective from the date Hartford receives the initial
premium at its National Service Center.
If a premium is not paid with the application, insurance coverage will
begin and the Policy will be effective on the later of the date the
underwriting determination is made or on the date the premium is received.
C. PREMIUM ALLOCATION
In the application for a Policy, the Policy Owner can allocate the
initial premium among the Fixed Account and various Sub-Accounts. Hartford
will allocate the entire premium to the Hartford Money Market Sub-Account.
At a later date, the value of the Policy Owner's interest in the Hartford
Money Market Sub-Account will be allocated among the Fixed Account and the
Sub-Accounts of Separate Account VL I in accordance with the Policy Owner's
instructions in the application for insurance. The Policy Owner may select
up to five (5) Funds to allocate your premium. An allocation to any one
Fund must be for 10% or more, in whole percentages.
<PAGE>
D. POLICY LOANS
A Policy Owner may obtain a cash loan from Hartford, which is secured by
the Policy. The total Indebtedness at the time of the new loan (including
the accrued interest on prior loans plus the currently applied for loan) may
not exceed 90% of the Account Value.
The amount of each loan will be transferred on a Pro Rata Basis from each
of the Sub-Accounts (unless the Policy Owner specifies otherwise) to the
Loan Account. The Loan Account is a mechanism used to ensure that any
outstanding Indebtedness remains fully secured by the policy values.
LOAN INTEREST
Interest will accrue daily on the Indebtedness at the Policy Loan
Interest Rate indicated in the Policy. The difference between the value of
the Loan Account and the Indebtedness will be transferred on a pro rata
basis from the Sub-Accounts to the Loan Account on each Monthly Activity
Date.
CREDITED INTEREST
During the first ten Policy Years, any amounts in the Loan Account will
be credited with interest at a rate equal to the Policy Loan Rate, minus 2%.
For Policy Years 11 and beyond, except for Preferred Loans described below,
the Loan Account will be credited with interest at a rate equal to the
policy Loan Rate applicable to that Indebtedness, minus 1%.
PREFERRED LOAN
If, any time after the tenth Policy Anniversary, the Account Value
exceeds the total of all premiums paid since issue, a Preferred Loan is
available. The amount available for a Preferred Loan is the amount by which
the Account Value exceeds total premiums paid. The amount of the Loan
Account which equals a Preferred Loan will be credited with interest at a
rate equal to the Policy Loan Rate. The amount of Indebtedness that
qualified as a Preferred Loan is determined on each Monthly Activity Date.
LOAN REPAYMENTS
You can repay the any part of or the entire loan at any time.
The amount of loan repayment will be deducted from the Loan Account and
will be allocated among the Fixed Account and Sub-Accounts in the same
percentage as premiums are allocated.
TERMINATION DUE TO EXCESSIVE INDEBTEDNESS
If total Indebtedness equals or exceeds the Account Value, the Policy
will terminate 61 days after we have mailed notice to your last known
address and that of any assignees of record. If sufficient loan repayment
if not made by the end of the Grace Period, the policy will end without
value.
EFFECT OF LOANS ON ACCOUNT VALUE
A loan, whether or not repaid, will have a permanent effect on the
Account Value because the investment results of each Sub-Account will apply
only to the amount remaining in such Sub-Accounts. In addition, the rate of
interest credited to the Fixed Account will usually be different than the
rate credited to the Loan Account. The longer a loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Fixed Account and Sub-Accounts earn more than the
annual interest rate for funds held in the Loan Account, a Policy Owner's
Account Value will not increase as rapidly as it would have had no loan been
made. If the Fixed Account and Sub-Accounts earn less than the Loan
Account, the Policy Owners Account Value will be greater than it would have
been had no loan been made. Also, if not repaid, the aggregate amount of
the outstanding loan (i.e., the Indebtedness) will reduce the Death Proceeds
and Cash Surrender Value otherwise payable.
<PAGE>
II. TRANSFER AMONG INVESTMENT DIVISIONS
The Separate Account currently has twenty-two Sub-Accounts, each of which
invests in shares of an open-end diversified management investment company
registered with the Commission and a Fixed Account. At any time, the Policy
Owner may transfer value among the Funds or the Fixed Account. We reserve
the right at a future date to limit the size of transfers and remaining
balances and to limit the number and frequency of transfers.
A transfer will take effect on the date the written request (or telephone
request) is received at Hartford unless a later date is designated in the
request for transfer. A transfer between the Loan Accounts and the Separate
Account incident to the repayment or making of a loan under the Policy will
not be considered a transfer. A transfer from the Money Market Fund at the
end of the Right to Cancel Period or a transfer arising because of a
substitution of securities by Hartford will also not be considered a transfer.
III. "REDEMPTION" PROCEDURES: SURRENDER AND RELATED TRANSACTIONS
A. SURRENDER FOR ACCOUNT VALUE
At any time before the death of the Insured and while the Policy is in
force, the Policy Owner may completely surrender the Policy by written
request. The surrender payment from the Sub-Accounts will be made within
seven days after Hartford receives the written request, unless payment is
postponed pursuant to the relevant provision of the Investment Company Act
of 1940. The surrender payment from the Fixed Account may be postponed up
to six months under state law. The surrender payment will equal the Policy
Owner's Cash Surrender Value.
B. BENEFIT CLAIMS
As long as the Policy remains in force, Hartford will usually pay the
Death Proceeds to the named Beneficiary within seven days after receipt of
due proof of death of the Insured unless the Policy is contested. Payment
of the Death Proceeds may be postponed as permitted pursuant to the relevant
provisions of the Investment Company Act of 1940 and up to six months if the
Account Values were in the Fixed Account.
The Death Proceeds equal the Death Benefit under the Policy less all
outstanding loans. The Death Benefit will be determined on the date
Hartford receives written notice of death and is a function of the Death
Benefit Option chosen by the Policy Owner.
In lieu of payment of the death proceeds in a single sum, an election may
be made to apply all or a portion of the proceeds under one of the fixed
benefit settlement options described in the Policy or a combination of
options. The election may be made by the Policy Owner during the Insured's
lifetime. The Beneficiary may make or change an election within 90 days of
the death of the Insured, unless the Policy Owner has made an irrevocable
election. The fixed benefit settlement options are subject to the
restrictions and limitations set forth in the Policy.
C. POLICY LAPSE
The Policy will terminate 61 days after a Monthly Activity Date on which
the Cash Surrender Value is not sufficient to cover the Monthly Deduction
Amount. The 61-day period is the Grace Period. If sufficient premium is
not paid by the end of the Grace Period, the Policy will terminate without
value. The Company will mail the Owner and any assignee written notice of
the amount of premium that will be required to continue the policy in force
at least 61 days before the end of the Grace Period. The premiums required
will be no greater than the amount required to pay three (3) Monthly
Deduction Amounts as of the day the Grace Period began. If that premium is
not paid by the end of the Grace Period, the policy will terminate.
<PAGE>
If the cumulative premiums, less withdrawals, are not sufficient to
maintain the Death Benefit guarantee in effect, the lapse and Grace Period
provisions for the Death Benefit guarantee will apply as follows:
On every Monthly Activity Date during the Death Benefit guarantee period, We
will compare the cumulative premiums received, less withdrawals, to the
Cumulative Death Benefit Guarantee Premium for the Death Benefit guarantee
period in effect.
If the cumulative premiums received, less withdrawals, are less than the
Cumulative Death Benefit Guarantee Premium, the Death Benefit guarantee
will be deemed to be in default as of that Monthly Activity Date. A Grace
Period of 61 days from the date of default will begin. We will mail the
Policy Owner and any assignee written notice of the amount of premium
required to continue the Death Benefit guarantee.
At the end of the Grace Period under a ten-year guarantee period, the Death
Benefit guarantee will be removed from the Policy if We have not received
the amount of the required premium. The Policy Owner will receive a written
notification of the change.
At the end of the Grace Period under the last survivor life expectancy
guarantee period, the Death Benefit guarantee will be removed from the
Policy if We have not received the amount of the required premium, subject
to the following exception: If the Policy is in the first ten Policy Years
and the cumulative premiums received, less withdrawals, equal or exceed the
cumulative Death Benefit guarantee premium for the ten-year period, We will
change the Death Benefit guarantee period to ten years. In this case, We
will send the Policy Owner notification of:
(a) the ten-year period measured from the Policy Date; and
(b) the Annual Death Benefit Guarantee Premium for that ten-year period.
Unless the Policy has been surrendered, the Policy may be reinstated prior
to the Maturity Date, provided:
(a) the Insureds alive at the end of the Grace Period are also alive on
the date of reinstatement;
(b) the Policy Owner makes the request within five years;
(c) satisfactory evidence of insurability is submitted;
(d) any Policy loan is repaid or reinstated; and
(e) The Policy Owner pays sufficient premium to (1) cover all Monthly
Deduction Amounts that are due and unpaid during the Grace Period and
(2) keep the Policy in force for three months after the date of
reinstatement.
<PAGE>
The Account Value on the reinstatement date will reflect:
(a) The Account Value at the time of termination; plus
(b) Net Premiums derived from premiums paid at the time of
reinstatement.
Upon reinstatement, any Indebtedness at the time of termination must be
repaid or carried over to the reinstated Policy.
D. POLICY LOANS
See "Purchase and Related Transactions," Section I. D. on page 2 of this
Exhibit.
CASH ADJUSTMENT UPON EXCHANGE OF POLICY
Once the Policy is in effect, it may be exchanged during the first 24 months
after its issuance, for a non-variable last survivor life insurance policy
offered by Us or an affiliate on the life of the Insureds. No evidence of
insurability will be required. The new policy will have an amount at risk which
equals or is less than the amount at risk in effect on the date of exchange.
Premiums under the new policy will be based on the same risk classifications as
this Policy.
<PAGE>
ARTHUR ANDERSEN LLP
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of
this Registration Statement File No. 333-07465 on Form S-6 for Hartford Life
Insurance Company Separate Account VL I.
/s/ Arthur Andersen LLP
Hartford, Connecticut
November 4, 1996
