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Registration No. 33-57244
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE
AMENDMENT NO. 4
TO
FORM S-6
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
SELECT*LIFE VARIABLE ACCOUNT
(Exact Name of Unit Investment Trust)
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
(Name of Depositor)
James E. Nelson, Esquire
Northwestern National Life Insurance Company
20 Washington Avenue South
Minneapolis, Minnesota 55401
(Complete Address of Depositor's Principal Executive Offices)
___________________________
It is proposed that this filing will become effective
___ immediately upon filing pursuant to paragraph (b) of Rule 485
___ on April 30, 1996 pursuant to paragraph (b) of Rule 485
_X_ 60 days after filing pursuant to paragraph (a) of Rule 485
___ on (date) pursuant to paragraph (a) of Rule 485
Registrant has chosen to register an indefinite amount of securities in
accordance with Rule 24f-2. The Rule 24f-2 Notice of Registrant's most recent
fiscal year was filed on or about February 22, 1996.
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SELECT*LIFE VARIABLE ACCOUNT
CROSS REFERENCE SHEET
(Reconciliation and Tie Sheet)
Item Number of
Form N-8B-2 Heading in the Prospectus
- -------------- -------------------------
1 Cover Page
2 Cover Page
3 Not Applicable
4 Distribution of the Policies
5 Northwestern National Life Insurance
Company and The Variable Account
6 The Variable Account
7 Not Applicable
8 Not Applicable
9 Not Applicable
10 Summary; Death Benefit; Payment and
Allocation of Premiums; Death Benefit
Guarantee; Accumulation Value; Sales
Charge Refund; Policy Lapse and
Reinstatement; Surrender Benefits;
Investments of the Variable Account;
Transfers; Policy Loans; Free Look and
Conversion Rights; Voting Rights; General
Provisions; Appendix A; Appendix B
11 Deductions and Charges; Investments of
the Variable Account
12 Investments of the Variable Account
13 Deductions and Charges
14 The Policies; General Provisions;
Distributions of the Policies
15 Payment and Allocation of Premiums;
Investments of the Variable Account
-i-
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Item Number of
Form N-8B-2 Heading in the Prospectus
- -------------- -------------------------
16 Payment and Allocation of Premiums;
Surrender Benefits; Investments of the
Variable Account
17 Surrender Benefits; Policy Loans; Free
Look and Conversion Rights; General
Provisions
18 The Variable Account; Investments of the
Variable Account; Payment and Allocation
of Premiums
19 Voting Rights; General Provisions
20 Not Applicable
21 Policy Loans
22 Not Applicable
23 Bonding Arrangements
24 Definitions; General Provisions
25 Northwestern National Life Insurance
Company
26 Not Applicable
27 Northwestern National Life Insurance
Company; Other Contracts Issued by Us
28 Management
29 Northwestern National Life Insurance
Company
30 Not Applicable
31 Not Applicable
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Not Applicable
36 Not Applicable
-ii-
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Item Number of
Form N-8B-2 Heading in the Prospectus
- -------------- -------------------------
37 Not Applicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Distribution of the Policies
41 Distribution of the Policies
42 Not Applicable
43 Not Applicable
44 Investments of the Variable Account;
Payment and Allocation of Premiums;
Deductions and Charges
45 Not Applicable
46 Investments of the Variable Account;
Deductions and Charges
47 Investments of the Variable Account
48 Northwestern National Life Insurance
Company; State Regulation
49 Not Applicable
50 The Variable Account
51 Cover Page; The Policies; Death Benefit;
Payment and Allocation of Premiums;
Deductions and Charges; Policy Lapse and
Reinstatement; General Provisions; Free
Look and Conversion Rights
52 Investments of the Variable Account
53 Federal Tax Matters
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
-iii-
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Item Number of
Form N-8B-2 Heading in the Prospectus
- -------------- -------------------------
58 Not Applicable
59 Not Applicable
-iv-
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20 Washington Avenue South
Minneapolis, Minnesota 55401
-------------------------------
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES
ISSUED BY
SELECT*LIFE VARIABLE ACCOUNT
OF
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
This Prospectus describes a flexible premium variable life insurance policy
(the "Policy") offered by Northwestern National Life Insurance Company ("we",
"us", "our"). This Policy is designed to provide lifetime insurance protection
up to Age 95, provided the Policy's Cash Surrender Value (that is, the amount
that would be paid to you upon surrender of the Policy) is sufficient to pay
certain monthly charges imposed under the Policy (including the cost of
insurance and certain administrative charges). It also is designed to provide
maximum flexibility in connection with premium payments and death benefits by
giving the Policy owner ("you", "your") the opportunity to allocate net
premiums among investment alternatives with different investment objectives. A
Policy owner may, subject to certain restrictions, including limitations on
premium payments, vary the frequency and amount of premium payments and
increase or decrease the level of death benefits payable under the Policy. This
flexibility allows a Policy owner to provide for changing insurance needs under
a single insurance contract.
The Policy provides for a death benefit payable at the Insured's death. As
long as the Policy remains in force, the death benefit will never be less than
the current Face Amount less any Policy loans and unpaid charges. The minimum
Face Amount of the Policy is currently $25,000. The Face Amount may be
increased, subject to certain limitations, provided that the increase is not
less than $5,000. Generally, the Policy will remain in force as along as the
Policy's Cash Surrender Value (that is, the amount that would be paid to you
upon surrender of the Policy) is sufficient to pay certain monthly charges
imposed in connection with the Policy (including the cost of insurance and
certain administrative charges). In addition, the Policy will remain in force
until the Insured reaches Age 65 (or five Policy Years, if longer), without
regard to the Cash Surrender Value, if on each Monthly Anniversary the total
premiums paid on the Policy, less any partial withdrawals and Policy loans,
equals or exceeds the total required Minimum Monthly Premium payments specified
in your Policy (which is a feature of the Policy called the "Death Benefit
Guarantee").
Net premiums paid under the Policy are allocated, according to your
instructions, either to the Select*Life Variable Account (the "Variable
Account"), which is one of our separate accounts or, with the exception of
policies issued in New Jersey, to our General Account (the "Fixed Account").
Any amounts allocated to the Variable Account will be allocated to one or more
Sub-Accounts of the Variable Account. The assets of each Sub-Account will be
invested solely in the shares of one of the five portfolios of the Variable
Insurance Products Fund, in one of the four portfolios of the Variable
Insurance Products Fund II, in one of the six funds available through Putnam
Capital Manager Trust or in one of the two funds available through the
Northstar/NWNL Trust (the "Funds"). The accompanying prospectus for each of the
Funds describes the investment objectives and attendant risks of each of the
Funds and portfolios.
(Continued on next page)
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.
THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE. IT IS VALID ONLY WHEN
ACCOMPANIED OR PRECEDED BY THE CURRENT PROSPECTUSES OF THE FUNDS
THE DATE OF THIS PROSPECTUS IS APRIL 30, 1996.
N700.176c
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If net premiums are allocated to the Variable Account, the amount of the
Policy's death benefit may, and the Policy's Accumulation Value (that is, the
total amount that a Policy provides for investment at any time) will, reflect
the investment performance of the Sub-Accounts of the Variable Account that you
select. You bear the entire investment risk for any amounts allocated to the
Variable Account; no minimum Accumulation Value in the Variable Account is
guaranteed. Regardless of how net premiums are allocated, the Policy's death
benefit may, and the Policy's Accumulation Value will, also depend upon the
frequency and amount of premiums paid, any partial withdrawals, and the charges
and deductions assessed in connection with the Policy.
The Policy provides for two types of "free look" periods, one after the
issuance of the Policy and the other after any requested increase in the Face
Amount. See "Free Look and Conversion Rights -- Free Look Rights".
THE CHARGES IMPOSED UPON EARLY SURRENDER OR LAPSE WILL BE SIGNIFICANT. FOR
EXAMPLE, IF YOU MAKE PREMIUM PAYMENTS NO GREATER THAN THE MINIMUM MONTHLY
PREMIUM PAYMENTS SPECIFIED IN YOUR POLICY, YOU CAN EXPECT THAT DURING AT LEAST
THE EARLY POLICY YEARS, ALL OR SUBSTANTIALLY ALL OF YOUR PREMIUM PAYMENTS WILL
BE REQUIRED TO PAY THE SURRENDER CHARGE AND OTHER CHARGES ASSOCIATED WITH THE
POLICY. AS A RESULT, YOU SHOULD PURCHASE A POLICY ONLY IF YOU HAVE THE
FINANCIAL CAPABILITY TO KEEP IT IN FORCE FOR A SUBSTANTIAL PERIOD. ALSO,
CHARGES IMPOSED UPON SURRENDER OR THE LAPSE OF THE POLICY WILL USUALLY EXCEED
THE ACCUMULATION VALUE OF THE POLICY DURING THE EARLY POLICY YEARS, WHICH MEANS
THAT PAYMENTS SUFFICIENT TO MAINTAIN THE DEATH BENEFIT GUARANTEE WILL BE
REQUIRED TO AVOID LAPSE DURING THIS PERIOD OF TIME. THESE SAME CONSIDERATIONS
APPLY AFTER A REQUESTED INCREASE IN FACE AMOUNT, WHICH CREATES THE POSSIBILITY
OF ADDITIONAL CHARGES UPON SURRENDER OR LAPSE OF THE POLICY. SEE "PAYMENT AND
ALLOCATION OF PREMIUMS -- AMOUNT AND TIMING OF PREMIUMS", "DEATH BENEFIT
GUARANTEE", AND "DEDUCTIONS AND CHARGES -- SURRENDER CHARGE".
REPLACING EXISTING INSURANCE WITH A POLICY DESCRIBED IN THIS PROSPECTUS MAY
NOT BE TO YOUR ADVANTAGE. IN ADDITION, IT MAY NOT BE TO YOUR ADVANTAGE TO
PURCHASE THIS POLICY TO OBTAIN ADDITIONAL INSURANCE PROTECTION IF YOU ALREADY
OWN ANOTHER FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING OR SOLICITATION IN ANY
JURISDICTION IN WHICH SUCH OFFERING OR SOLICITATION MAY NOT LAWFULLY BE MADE.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
OR THE ACCOMPANYING FUND PROSPECTUSES AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS ENTIRE PROSPECTUS SHOULD BE READ TO COMPLETELY UNDERSTAND THE POLICY
BEING OFFERED.
THE PRIMARY PURPOSE OF THE POLICY IS TO PROVIDE INSURANCE PROTECTION FOR
THE BENEFICIARY NAMED IN THE POLICY. NO CLAIM IS MADE THAT THE POLICY IS IN ANY
WAY SIMILAR OR COMPARABLE TO A SYSTEMATIC INVESTMENT PLAN OF A MUTUAL FUND.
2
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DEFINITIONS ............................................................................ 6
PART 1. SUMMARY
How does the Policy compare to traditional life insurance? ............................ 10
What is the Death Benefit? ............................................................ 10
What flexibility do you have to adjust the amount of the Death Benefit? ............... 10
What is the Death Benefit Guarantee? .................................................. 10
If the Death Benefit Guarantee is not in effect, what will cause the Policy to
lapse? ............................................................................... 11
What is the Fixed Account? ............................................................ 11
What is the Variable Account? ......................................................... 11
Who are the investment advisers of the Funds? ......................................... 11
What are the minimum and maximum premium payments allowed? ............................ 11
How are premiums allocated to the investment options? ................................. 11
What charges do we make against each premium payment? ................................. 11
What charges do we make against the Accumulation Value? ............................... 12
What charges do we make upon lapse or total surrender of the Policy? .................. 12
What is the value of the Policy if you surrender it? .................................. 12
Can you make partial withdrawals? ..................................................... 13
What are the free look and conversion rights? ......................................... 13
Can you transfer between the Sub-Accounts and/or the Fixed Account? ................... 13
Can you borrow against the value of the Policy? ....................................... 13
Are Death Benefit proceeds taxable income to the beneficiary? ......................... 13
Are Accumulation Value increases included in your taxable income? ..................... 14
Will exercising certain Policy rights have tax consequences? .......................... 14
Who sells the Policies? ............................................................... 14
PART 2. DETAILED INFORMATION
Northwestern National Life Insurance Company .......................................... 14
The Variable Account .................................................................. 14
Performance Information ............................................................... 14
The Policies .......................................................................... 15
Death Benefit ......................................................................... 15
Death Benefit Options ............................................................... 16
Which Death Benefit Option to Choose ................................................ 18
Requested Changes in Face Amount .................................................... 18
Insurance Protection ................................................................ 19
Change in Death Benefit Option ...................................................... 20
Accelerated Benefit Rider ........................................................... 20
Payment and Allocation of Premiums .................................................... 21
Issuing the Policy .................................................................. 21
Allocation of Premiums .............................................................. 22
Amount and Timing of Premiums ....................................................... 22
Planned Periodic Premiums ........................................................... 23
Unscheduled Additional Premiums ..................................................... 23
Paying Premiums by Mail ............................................................. 23
Death Benefit Guarantee ............................................................... 23
Accumulation Value .................................................................... 24
Deductions and Charges ................................................................ 25
Premium Expense Charge .............................................................. 25
Monthly Deduction ................................................................... 25
Surrender Charge .................................................................... 26
Charges Against the Variable Account ................................................ 29
Partial Withdrawal and Transfer Charges ............................................. 29
Reduction of Charges ................................................................ 29
Sales Charge Refund ................................................................... 29
Policy Lapse and Reinstatement ........................................................ 30
Surrender Benefits .................................................................... 31
Total Surrender ..................................................................... 31
Partial Withdrawal .................................................................. 31
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3
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Transfers ............................................................................. 32
Policy Loans .......................................................................... 34
Free Look and Conversion Rights ....................................................... 36
Free Look Rights .................................................................... 36
Conversion Rights ................................................................... 36
Investments of the Variable Account ................................................... 37
Fidelity's Variable Insurance Products Fund (VIPF):
Money Market Portfolio ............................................................ 38
High Income Portfolio ............................................................. 38
Equity-Income Portfolio ........................................................... 38
Growth Portfolio .................................................................. 38
Overseas Portfolio ................................................................ 38
Fidelity's Variable Insurance Products Fund II (VIPF II):
Asset Manager Portfolio ........................................................... 38
Investment Grade Bond Portfolio ................................................... 38
Index 500 Portfolio ............................................................... 38
Contrafund Portfolio .............................................................. 39
Northstar/NWNL Trust (Northstar):
Northstar Income and Growth Fund .................................................. 39
Northstar Multi-Sector Bond Fund .................................................. 39
Putnam Capital Manager Trust (PCM):
PCM Diversified Income Fund ....................................................... 39
PCM Growth and Income Fund ........................................................ 39
PCM Utilities Growth and Income Fund .............................................. 39
PCM Voyager Fund .................................................................. 39
PCM Asia Pacific Growth Fund ...................................................... 39
PCM New Opportunities Fund ........................................................ 39
Addition, Deletion, or Substitution of Investments .................................. 39
Voting Rights ......................................................................... 40
General Provisions .................................................................... 41
Benefits at Age 95 .................................................................. 41
Ownership ........................................................................... 41
Proceeds ............................................................................ 41
Beneficiary ......................................................................... 41
Postponement of Payments ............................................................ 41
Settlement Options .................................................................. 42
Incontestability .................................................................... 42
Misstatement of Age and Sex ......................................................... 42
Suicide ............................................................................. 42
Termination ......................................................................... 43
Amendment ........................................................................... 43
Reports ............................................................................. 43
Dividends ........................................................................... 43
Collateral Assignment ............................................................... 43
Optional Insurance Benefits ......................................................... 44
Federal Tax Matters ................................................................... 44
Policy Proceeds ..................................................................... 44
Taxation of Distributions ........................................................... 45
Taxation of Policies Held by Pension and Certain Deferred Compensation Plans ........ 45
Taxation of Northwestern National Life Insurance Company ............................ 46
Other Considerations ................................................................ 46
Legal Developments Regarding Employment -- Related Benefit Plans ...................... 46
Distribution of the Policies .......................................................... 46
Management ............................................................................ 48
Directors ........................................................................... 48
Executive Officers .................................................................. 49
State Regulation ...................................................................... 49
Massachusetts and Montana Residents ................................................... 50
Legal Proceedings ..................................................................... 50
</TABLE>
4
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Bonding Arrangements .................................................................. 50
Legal Matters ......................................................................... 50
Experts ............................................................................... 50
Registration Statement Contains Further Information ................................... 50
Financial Statements .................................................................. 51
Appendix A - The Fixed Account ....................................................... A-1
Appendix B - Calculation of Accumulation Value ....................................... B-1
Appendix C - Illustration of Accumulation Values, Surrender Charges,
Cash Surrender Values and Death Benefits ................................. C-1
Appendix D - Maximum Contingent Deferred Sales Charges
Per $1,000 of Face Amount ............................................... D-1
Appendix E - Surrender Charge Guideline Per
$1,000 of Face Amount .................................................... E-1
Fund Prospectuses
Fidelity's Variable Insurance Products Fund (VIPF):
Money Market Portfolio ......................................................... VIP-1
High Income Portfolio .......................................................... VIP-1
Equity-Income Portfolio ........................................................ VIP-1
Growth Portfolio ............................................................... VIP-1
Overseas Portfolio ............................................................. VIP-1
Fidelity's Variable Insurance Products Fund II (VIPF II):
Investment Grade Bond Portfolio .............................................. VIPII-1
Asset Manager Portfolio ...................................................... VIPII-1
Index 500 Portfolio .......................................................... VIPII-1
Contrafund Portfolio ......................................................... VIPII-1
Northstar/NWNL Trust (Northstar):
Northstar Income and Growth Fund ......................................... Northstar-1
Northstar Multi-Sector Bond Fund ......................................... Northstar-1
Putnam Capital Manager Trust (PCM):
PCM Diversified Income Fund .................................................... PCM-1
PCM Growth and Income Fund ..................................................... PCM-1
PCM Utilities Growth and Income Fund ........................................... PCM-1
PCM Voyager Fund ............................................................... PCM-1
PCM Asia Pacific Growth Fund ................................................... PCM-1
PCM New Opportunities Fund ..................................................... PCM-1
</TABLE>
5
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DEFINITIONS
ACCUMULATION VALUE. The total value attributable to a specific Policy, which
equals the sum of the Variable Accumulation Value (the total of the values in
each Sub-Account of the Variable Account) and the Fixed Accumulation Value
(the value in the Fixed Account). See "Accumulation Value" at page 24 and
Appendix B.
AGE. The Insured's age at the last birthday determined as of the beginning of
each Policy Year.
CASH SURRENDER VALUE. The Accumulation Value less any Surrender Charge, Loan
Amount and unpaid Monthly Deductions.
CASH VALUE. The Accumulation Value less any Surrender Charge.
CODE. Internal Revenue Code of 1986, as amended.
CONTINGENT DEFERRED ADMINISTRATIVE CHARGE. A contingent deferred charge to
reimburse us for expenses incurred in issuing the Policy. The Contingent
Deferred Administrative Charge will only be imposed upon total surrender or
lapse of the Policy during the first 15 Policy Years and during the first 15
years following any requested increase in Face Amount. The sum of this charge
and the Contingent Deferred Sales Charge is the Surrender Charge. See
"Deductions and Charges -- Surrender Charge" at page 26.
CONTINGENT DEFERRED SALES CHARGE. A contingent deferred charge to reimburse us
for expenses relating to the distribution of the Policy. The Contingent Deferred
Sales Charge will only be imposed upon total surrender or lapse of the Policy
during the first 15 Policy Years and during the first 15 years following any
requested increase in Face Amount. The sum of this charge and the Contingent
Deferred Administrative Charge is the Surrender Charge. See "Deductions and
Charges -- Surrender Charge" at page 26.
DEATH BENEFIT. The amount determined under the applicable Death Benefit Option
(the Level Amount Option or the Variable Amount Option). The proceeds payable to
the beneficiary of the Policy upon the death of the Insured under either
Death Benefit Option will be reduced by any Loan Amount and any unpaid
Monthly Deductions. See "Death Benefit" at page 15.
DEATH BENEFIT GUARANTEE. A feature of the Policy guaranteeing that the Policy
will not lapse before the Insured reaches Age 65 (or five Policy Years, if
longer) if, on each Monthly Anniversary, the total premiums paid on the
Policy, less any partial withdrawals and any Loan Amount, equals or exceeds
the total required Minimum Monthly Premium payments specified in your Policy.
See "Death Benefit Guarantee" at page 23.
DEATH BENEFIT OPTION. Either of two death benefit options available under the
Policy (the Level Amount Option and the Variable Amount Option). See "Death
Benefit -- Death Benefit Options" at page 16.
FACE AMOUNT. The minimum Death Benefit under the Policy as long as the Policy
remains in force. See "Death Benefit" at page 15.
FIXED ACCOUNT. The assets of Northwestern National Life Insurance Company other
than those allocated to the Variable Account or any other separate account. See
Appendix A.
FIXED ACCUMULATION VALUE. The value attributable to a specific Policy to the
extent such amount is attributable to the Fixed Account (our General Account).
Unlike the Variable Accumulation Value, the Fixed Accumulation Value will not
reflect the investment performance of the Funds. See "Accumulation Value" at
page 24 and Appendix B.
FUNDS. Any open-end management investment company (or portfolio thereof) or unit
investment trust (or series thereof) in which a Sub-Account invests as described
herein. See "Investments of the Variable Account" at page 37.
INSURED. The person upon whose life the Policy is issued.
ISSUE DATE. The date insurance coverage under a Policy begins.
6
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LEVEL AMOUNT OPTION. One of two Death Benefit Options available under the
Policy. Under this option, the Death Benefit is the greater of the current Face
Amount or the corridor percentage of Accumulation Value on the Valuation Date
on or next following the date of the Insured's death. See "Death Benefit --
Death Benefit Options" at page 16.
LOAN AMOUNT. The sum of all unpaid Policy loans including unpaid interest due
thereon. See "Policy Loans" at page 34.
MINIMUM FACE AMOUNT. The minimum Face Amount shown in the Policy (currently
$25,000).
MINIMUM MONTHLY PREMIUM. A monthly premium amount specified in the Policy and
determined by us at issuance of the Policy. The initial Minimum Monthly Premium
will depend upon the Insured's sex, Age at issue, Rate Class, optional
insurance benefits added by rider, and the initial Face Amount. A requested
increase or decrease in the Face Amount, a change in the Death Benefit
Option, or the addition or termination of a Policy rider may change the
Minimum Monthly Premium. The Minimum Monthly Premium determines the payments
required to maintain the Death Benefit Guarantee. See "Death Benefit
Guarantee" at page 23.
MONTHLY ANNIVERSARY. The same date in each succeeding month as the Policy Date.
Whenever the Monthly Anniversary falls on a date other than a Valuation Date,
the Monthly Anniversary will be considered to be the next Valuation Date.
MONTHLY DEDUCTION. A monthly charge deducted from the Accumulation Value of the
Policy. This charge includes the cost of insurance, the Monthly Administrative
Charge, the Monthly Mortality and Expense Risk Charge, and any charges for
optional insurance benefits. See "Deductions and Charges -- Monthly
Deduction" at page 25.
MONTHLY ADMINISTRATIVE CHARGE. A monthly charge to reimburse us for expenses
incurred in administering the Policy. This charge is part of the Monthly
Deduction. The amount of this charge is currently $8.25 per month and is
guaranteed not to exceed $12.00 per month. See "Deductions and Charges --
Monthly Deduction" at page 25.
MONTHLY MORTALITY AND EXPENSE RISK CHARGE. A monthly charge to compensate us for
certain mortality and expense risks we assume under the Policy. The Mortality
and Expense Risk Charge will be an annual rate of .9 of 1% (.90%) of the
Variable Accumulation Value of the Policy during the first 10 Policy Years.
During each Policy Year thereafter the charge will be an annual rate of .45
of 1% (.45%) guaranteed not to exceed .9 of 1% (.90%) for the duration of the
Policy. See "Deductions and Charges -- Monthly Mortality and Expense Risk
Charge" at page 26.
NET PREMIUM. The gross premium less a Premium Expense Charge deducted from each
premium.
NORTHSTAR. Northstar/NWNL Trust
Northstar Income and Growth Fund
Northstar Multi-Sector Bond Fund
PCM. Putnam Capital Manager Trust
PCM Diversified Income Fund
PCM Growth and Income Fund
PCM Utilities Growth and Income Fund
PCM Voyager Fund
PCM Asia Pacific Growth Fund
PCM New Opportunities Fund
PLANNED PERIODIC PREMIUM. The scheduled premium selected by you of a level
amount at a fixed interval. The initial Planned Periodic Premium you select will
be shown in the Policy. See "Payment and Allocation of Premiums -- Planned
Periodic Premiums" at page 23.
POLICY, POLICIES. The flexible premium variable life insurance Policy offered by
us and described in this Prospectus.
POLICY ANNIVERSARY. The same date in each succeeding year as the Policy Date.
Whenever the Policy Anniversary falls on a date other than a Valuation Date, the
Policy Anniversary will be considered to be the next Valuation Date.
POLICY DATE. The Policy Date is used in determining Policy Years, Policy Months,
Monthly Anniversaries, and Policy Anniversaries. The Policy Date will be shown
in the Policy.
7
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POLICY MONTH. A month beginning on the Monthly Anniversary.
POLICY YEAR. A year beginning on the Policy Anniversary.
PREMIUM EXPENSE CHARGE. An amount deducted from each premium payment. The
Premium Expense Charge is currently 5.00% of each premium payment, which
consists of a sales charge of 2.50% and a premium tax charge of 2.50%. We may
in the future also make a charge of up to $2.00 per premium payment to
reimburse us for the cost of collecting and processing premiums. See
"Deductions and Charges -- Premium Expense Charge" at page 25.
RATE CLASS. A group of Insureds we determine based on our expectation that they
will have similar mortality experience.
SALES CHARGE REFUND. An amount designated as Sales Charge Refund may exist
during the first two Policy Years or during any 24-month period following a
requested increase in Face Amount. Any such Sales Charge Refund will be
applied to supplement the Cash Surrender Value so as to continue the Policy
in force for some months during either of these 24-month periods if there is
insufficient Cash Surrender Value to cover Monthly Deductions. The Sales
Charge Refund, if any, to the extent not so applied, will be refunded upon
total surrender of the Policy during either of these 24-month periods. See
"Sales Charge Refund" at page 29.
SEC. Securities and Exchange Commission.
SIGNATURE GUARANTEE. A guarantee of your signature by a member firm of the New
York, American, Boston, Midwest, Philadelphia, or Pacific Stock Exchange, or by
a commercial bank (not a savings bank) which is a member of the Federal
Deposit Insurance Corporation, or, in certain cases, by a member firm of the
National Association of Securities Dealers, Inc. that has entered into an
appropriate agreement with us.
SUB-ACCOUNT. A sub-division of the Variable Account. Each Sub-Account invests
exclusively in the shares of a specified Fund.
SURRENDER CHARGE. A charge imposed upon total surrender or lapse of the Policy
during the first 15 Policy Years and the first 15 years following any requested
increase in Face Amount. The Surrender Charge consists of the Contingent
Deferred Administrative Charge and the Contingent Deferred Sales Charge. See
"Deductions and Charges -- Surrender Charge" at page 26.
SURRENDER CHARGE GUIDELINE. An amount used in calculating Sales Charge Refunds
(see "Sales Charge Refund" at page 29) and in calculating the sales charge on
requested increases in Face Amount (see "Deductions and Charges -- Surrender
Charge -- Contingent Deferred Sales Charge Calculation" at page 28). The
Surrender Charge Guideline will equal the amount obtained by dividing the
Face Amount or the amount of a requested increase, as the case may be, by
$1,000, and multiplying the result by the applicable factor from Appendix E.
The Surrender Charge Guideline factors included in Appendix E are based on
certain provisions of Rule 6e-3(T), adopted by the SEC.
UNIT VALUE. The unit measure by which the value of the Policy's interest in each
Sub-Account is determined. See Appendix B.
VALUATION DATE. Each day the New York Stock Exchange is open for trading or any
other day on which there is sufficient trading in a Fund's portfolio securities
to materially affect the Unit Value in the corresponding Sub-Account. See
Appendix B.
VALUATION PERIOD. The period between two successive Valuation Dates, commencing
at the close of business of a Valuation Date and ending at the close of business
of the next Valuation Date. See Appendix B.
VARIABLE ACCOUNT. Select*Life Variable Account, a separate investment account
established by us to receive and invest Net Premiums paid under the Policy. See
"The Variable Account" at page 14.
VARIABLE ACCUMULATION VALUE. The value attributable to a specific Policy to the
extent such amount is attributable to the Variable Account. See "Accumulation
Value" and Appendix B.
VARIABLE AMOUNT OPTION. One of two Death Benefit Options available under the
Policy. Under this option, the Death Benefit is the greater of the Face Amount
plus the Accumulation Value of the
8
<PAGE>
Policy, or the corridor percentage of Accumulation Value on the Valuation
Date on or next following the date of the Insured's death. See "Death Benefit
-- Death Benefit Options" at page 16.
VIPF. Variable Insurance Products Fund
Money Market Portfolio
High Income Portfolio
Equity-Income Portfolio
Growth Portfolio
Overseas Portfolio
VIPF II. Variable Insurance Products Fund II
Investment Grade Bond Portfolio
Asset Manager Portfolio
Index 500 Portfolio
Contrafund Portfolio
WE, US, OUR. Northwestern National Life Insurance Company.
YOU, YOUR. The Policy owner as designated in the application for the Policy or
as subsequently changed. If a Policy has been absolutely assigned, the assignee
is the Policy owner. A collateral assignee is not the Policy owner.
9
<PAGE>
PART 1. SUMMARY
This is a brief summary of the Policy's features. More detailed information
follows later in this Prospectus.
HOW DOES THE POLICY COMPARE TO TRADITIONAL LIFE INSURANCE?
Like traditional life insurance:
- The Policy provides a guaranteed minimum amount of life insurance
coverage.
- As long as you meet the requirements for the Death Benefit Guarantee, your
Policy will remain in force until the Insured reaches Age 65 (or five
Policy Years, if longer).
- You can surrender the Policy while the Insured is living and receive its
Cash Surrender Value.
- The Policy has a loan value.
- The Fixed Accumulation Value is guaranteed.
Unlike traditional life insurance:
- You choose where the Net Premiums for the Policy are invested.
- You may transfer existing values among the investment options.
- The Variable Accumulation Value may increase or decrease based on the
investment performance of the Funds you select.
- You choose between two Death Benefit Options.
- You choose the amount and frequency of your premium payments.
- After the second Policy Year, you can increase or decrease the Face
Amount.
WHAT IS THE DEATH BENEFIT?
You choose one of two Death Benefit Options -- the Level Amount Option or
the Variable Amount Option. The Death Benefit under the Level Amount Option is
the greater of the Face Amount or the corridor percentage of Accumulation Value
on the Valuation Date on or next following the date of the Insured's death. The
Death Benefit under the Variable Amount Option is equal to the greater of the
Face Amount plus the Accumulation Value, or the corridor percentage of
Accumulation Value on the Valuation Date on or next following the date of the
Insured's death. See "Death Benefit".
The proceeds payable upon the death of the Insured under either Death
Benefit Option will be reduced by any Loan Amount and any unpaid Monthly
Deductions.
The Death Benefit will never be less than the Face Amount as long as the
Policy is in force and there is no Loan Amount or unpaid Monthly Deductions.
Under certain circumstances a part of the Death Benefit may be paid to you
when the Insured has been diagnosed as having a terminal illness. See
"Accelerated Benefit Rider".
WHAT FLEXIBILITY DO YOU HAVE TO ADJUST THE AMOUNT OF THE DEATH BENEFIT?
After the second Policy Year, you have flexibility to adjust the Death
Benefit by increasing or decreasing the Face Amount. You cannot decrease the
Face Amount below the Minimum Face Amount shown in the Policy. Any increase in
the Face Amount may require additional evidence of insurability satisfactory to
us and will result in additional charges. See "Death Benefit -- Change in Face
Amount".
Generally, you may also change the Death Benefit Option at any time after
the second Policy Year. See "Death Benefit Option -- Change in Death Benefit
Option".
For a discussion of available techniques to adjust the amount of insurance
protection to satisfy changing insurance needs, see "Death Benefit -- Insurance
Protection".
WHAT IS THE DEATH BENEFIT GUARANTEE?
Until the Insured reaches Age 65 (or five Policy Years, if longer), if you
meet the requirements for the Death Benefit Guarantee we will not lapse your
Policy, even if the Cash Surrender Value is not sufficient to cover the Monthly
Deduction that is due. See "Death Benefit Guarantee".
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<PAGE>
IF THE DEATH BENEFIT GUARANTEE IS NOT IN EFFECT, WHAT WILL CAUSE THE POLICY TO
LAPSE?
The Policy will only lapse if the Cash Surrender Value plus any Sales Charge
Refund is less than the Monthly Deduction due and if a grace period of 61 days
expires without a sufficient payment. The Policy thus differs in two important
respects from traditional life insurance. First, the failure to pay a Planned
Periodic Premium will not automatically cause the Policy to lapse. Second, even
if Planned Periodic Premiums have been paid, the Policy may lapse. See "Policy
Lapse and Reinstatement -- Lapse".
WHAT IS THE FIXED ACCOUNT?
The Fixed Account consists of all of our assets other than those in our
separate accounts (including the Variable Account). We credit interest of at
least 4% per year on any amounts you have in the Fixed Account. From time to
time we may guarantee interest in excess of 4%. Interests in the Fixed Account
have not been registered under the Securities Act of 1933 nor is the Fixed
Account subject to the restrictions of the Investment Company Act of 1940. See
Appendix A, "The Fixed Account".
WHAT IS THE VARIABLE ACCOUNT?
The Select*Life Variable Account is one of our separate accounts. Only
premiums from our variable life insurance policies are invested in the Variable
Account. See "The Variable Account".
The Variable Account is divided into Sub-Accounts. Premiums allocated to
each Sub-Account are invested in shares, at net asset value, of the Fund related
to that Sub-Account. The Variable Accumulation Value of the Policy will vary
with, among other things, the investment performance of the Funds to which
Policy premiums are allocated and the charges deducted from the Variable
Accumulation Value. See "Accumulation Value".
WHO ARE THE INVESTMENT ADVISERS OF THE FUNDS?
Fidelity Management & Research Company is the investment adviser of VIPF's
five portfolios and of VIPF II's four portfolios.
Northstar Investment Management Corporation, an affiliate of ours, is the
investment adviser of Northstar's two funds.
Putnam Investment Management, Inc. ("Putnam Management") is the investment
adviser of PCM's six funds.
WHAT ARE THE MINIMUM AND MAXIMUM PREMIUM PAYMENTS ALLOWED?
With certain restrictions, you can choose when you pay premiums and how much
each payment will be. In most cases, however, payment of cumulative premiums
sufficient to maintain the Death Benefit Guarantee will be required to keep the
Policy in force during at least the first several Policy Years (see "Death
Benefit Guarantee"). We may choose not to accept a payment of less than $25.00.
We do, however, reserve the right to limit the amount of any payment and certain
maximum limits apply. We will return to you any premium paid to the extent that
total premiums paid, both scheduled and unscheduled, would exceed the current
maximum premium payments allowed for life insurance under Federal tax law. See
"Payment and Allocation of Premiums -- Amount and Timing of Premiums".
HOW ARE PREMIUMS ALLOCATED TO THE INVESTMENT OPTIONS?
You choose the premium allocation on the application. You can allocate
premiums to the Fixed Account and/or one or more Sub-Accounts of the Variable
Account. The Fixed Account is not available to allocate premiums under policies
issued in New Jersey. The initial allocation remains in effect for any future
premium payments until you change it. See "Payment and Allocation of Premiums --
Allocation of Premiums".
WHAT CHARGES DO WE MAKE AGAINST EACH PREMIUM PAYMENT?
We deduct an amount (the Premium Expense Charge) from each premium and
credit the remaining premium (the Net Premium) to the Fixed Account or to the
Variable Account in accordance with your instructions. The Premium Expense
Charge is 5.00% of each premium payment, which consists of a sales charge of
2.50% and a premium tax charge of 2.50%. Although we do not currently do so, we
may choose to make an additional charge of up to $2.00 per premium payment as
part of the Premium Expense Charge to reimburse us for premium processing
expenses. See "Deductions and Charges -- Premium Expense Charge".
11
<PAGE>
WHAT CHARGES DO WE MAKE AGAINST THE ACCUMULATION VALUE?
The Accumulation Value of the Policy is subject to several charges -- the
Monthly Deduction and transfer and partial withdrawal charges.
The Monthly Deduction will be deducted monthly from both the Fixed
Accumulation Value and the Variable Accumulation Value and includes the cost of
insurance, the Monthly Administrative Charge, the Monthly Mortality and Expense
Risk Charge, and charges for optional insurance benefits. The cost of insurance
will be determined by multiplying the applicable cost of insurance rate(s) by
the net amount at risk. The Monthly Administrative Charge is currently $8.25 per
month and is guaranteed not to exceed $12.00 per month. The Monthly Mortality
and Expense Risk Charge will be equal to one-twelfth of .9 of 1% (.90%) of the
Variable Accumulation Value (that is, the total value attributable to a specific
Policy in the Sub-Accounts of the Variable Account) of the Policy during the
first 10 Policy Years. Beginning on Policy Year 11 and each year thereafter this
monthly charge will be one-twelfth of .45 of 1% (.45%) guaranteed not to exceed
.9 of 1% (.90%) for the duration of the Policy. The charges for optional
insurance benefits will vary depending upon the benefit(s) selected. See
"Deductions and Charges -- Monthly Deduction".
There is currently no charge imposed for each transfer but we presently
charge $10.00 for each partial withdrawal. The charge for transfers and partial
withdrawals is guaranteed not to exceed $25.00 per transfer or partial
withdrawal. See "Deductions and Charges -- Transfer and Partial Withdrawal
Charges".
WHAT CHARGES DO WE MAKE UPON LAPSE OR TOTAL SURRENDER OF THE POLICY?
During the first 15 years the Policy is in force and the first 15 years
following a requested increase in the Face Amount, there is a charge if the
Policy lapses or you surrender the Policy (the Surrender Charge). The Surrender
Charge consists of the Contingent Deferred Sales Charge to recover our sales
expenses, and the Contingent Deferred Administrative Charge to recover our
policy issue expenses. See "Deductions and Charges -- Surrender Charge".
The maximum Contingent Deferred Sales Charge and the maximum Contingent
Deferred Administrative Charge on the initial Face Amount and on any requested
increases in Face Amount will be determined on the Policy Date and on the
effective date of any such requested increase, as the case may be. These maximum
charges then remain level during the first five years in the relevant 15-year
period, and then reduce in equal monthly increments until they become zero at
the end of 15 years. Thus, if the Policy remains in force during the entire
relevant 15-year period, you do not pay this charge.
The Contingent Deferred Administrative Charge on the initial Face Amount
will depend upon the initial Face Amount. The Contingent Deferred Administrative
Charge on any requested increase in Face Amount will depend upon the Face Amount
of the increase. During the first five years in the relevant 15-year period,
this charge is $5.00 per $1,000 of Face Amount.
The Contingent Deferred Sales Charge on the initial Face Amount will depend
upon the initial Face Amount, the Insured's Age on the Policy Date, and the
Insured's sex. The Contingent Deferred Sales Charge on any requested increase in
Face Amount will depend upon the Face Amount of the increase, the Insured's Age
on the effective date of the increase, and the Insured's sex (see Appendix D).
The Contingent Deferred Sales Charge applicable to Policies issued in
Massachusetts and Montana will not be affected by the Insured's sex. Therefore,
the Contingent Deferred Sales Charge applied to Policies issued in these two
states will differ from the charge made on Policies issued in other states.
Also, the Contingent Deferred Sales Charge applied to Policies issued in
Pennsylvania may be higher or lower than in other states depending on the
Insured's Age and sex.
The Surrender Charge imposed upon early surrender or lapse will be
significant. As a result, you should purchase a Policy only if you have the
financial capability to keep it in force for a substantial period of time.
WHAT IS THE VALUE OF THE POLICY IF YOU SURRENDER IT?
In general, the Cash Surrender Value is the amount you would receive if you
surrender the Policy. To determine the Cash Surrender Value, your Accumulation
Value is reduced by the Surrender Charge, if any, and any Loan Amount and unpaid
Monthly Deductions. During the first two Policy
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<PAGE>
Years and the first two Policy Years following an increase in the Face Amount,
you may also be entitled to a refund of a portion of any charges made for sales
expenses. See "Surrender Benefits -- Total Surrender" and "Sales Charge Refund".
CAN YOU MAKE PARTIAL WITHDRAWALS?
Yes, you can withdraw part of your Cash Surrender Value. You will not incur
a Surrender Charge, but partial withdrawals are subject to a processing charge.
We currently make a $10.00 charge for each partial withdrawal. The charge is
guaranteed not to exceed $25.00 per partial withdrawal. Only one partial
withdrawal is allowed in any Policy Year. See "Surrender Benefits -- Partial
Withdrawal".
WHAT ARE THE FREE LOOK AND CONVERSION RIGHTS?
You have a limited free look period during which you have a right to return
the Policy and receive a refund of all premiums paid. See "Free Look and
Conversion Rights -- Free Look Rights". The Policy must be returned to us by the
latest of:
- Midnight of the 20th day after you receive it;
- Midnight of the 20th day after a written Notice of Right of Withdrawal is
mailed or delivered to you; or
- Midnight of the 45th day after the date your application for the Policy is
signed.
Also, the Policy may in effect be converted in whole or in part to a "fixed
benefit" policy (providing benefits that do not vary with the investment
performance of the Variable Account) at any time by transferring all or part of
the Accumulation Value of the Policy from the Variable Account to the Fixed
Account. For policies issued in Connecticut and New Jersey, the conversion right
may be exercised by transferring to a different permanent fixed benefit life
insurance policy offered by us in those states. See "Free Look and Conversion
Rights -- Conversion Rights".
Similar free look and conversion rights will be available for requested
increases in the Face Amount. See "Free Look and Conversion Rights".
CAN YOU TRANSFER BETWEEN THE SUB-ACCOUNTS AND/OR THE FIXED ACCOUNT?
Subject to certain restrictions, you can transfer all or part of your
Accumulation Value between the investment options of the Policy. We currently
allow up to twelve transfers per year. Transfers from the Fixed Account are
subject to certain additional restrictions. We reserve the right to limit you to
four transfers per year and to make a charge for each transfer. (Transfers to or
from the Fixed Account are not available for policies issued in New Jersey.) We
currently make no charge for each transfer. This charge is guaranteed not to
exceed $25.00 per transfer. To the extent, however, that you request a transfer
from the Variable Account to the Fixed Account in connection with exercising
your conversion rights under the Policy (see "Free Look and Conversion Rights --
Conversion Rights"), the limit on the number of transfers and the charge will
not apply. See "Transfers".
CAN YOU BORROW AGAINST THE VALUE OF THE POLICY?
At any time after the first Policy Year, you can borrow up to 75% of the
Cash Value of the Policy less any existing Loan Amount. (In Texas, the
percentage is 100% and in Alabama, Maryland and Virginia, the percentage is 90%.
In Indiana you can borrow up to 75% of the Cash Value of the Policy during the
first Policy Year.) Each loan must be at least $500, except in Connecticut it
must be at least $200. Interest is payable in advance for each Policy Year and
accrues daily at an effective annual rate that will not exceed 8.00% (which is
7.40% when payable in advance). After the tenth Policy Year, we will charge
interest at an annual rate of 5.50% (which is 5.21% when payable in advance) on
the portion of your Loan Amount that is not in excess of (a) the Accumulation
Value, less (b) the total of all premiums paid net of all partial withdrawals.
See "Policy Loans".
ARE DEATH BENEFIT PROCEEDS TAXABLE INCOME TO THE BENEFICIARY?
Under current Federal tax law, as long as the Policy qualifies as life
insurance the Death Benefit under the Policy will be subject to the same Federal
income tax treatment as proceeds of traditional life insurance. Therefore, the
Death Benefit should not be taxable income to the beneficiary. See "Federal Tax
Matters -- Policy Proceeds".
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<PAGE>
ARE ACCUMULATION VALUE INCREASES INCLUDED IN YOUR TAXABLE INCOME?
Under current Federal tax law, as long as the Policy qualifies as life
insurance Accumulation Value increases will also be subject to the same Federal
income tax treatment as traditional life insurance cash values. Therefore, any
increases should accumulate on a tax deferred basis. See "Federal Tax Matters --
Policy Proceeds".
WILL EXERCISING CERTAIN POLICY RIGHTS HAVE TAX CONSEQUENCES?
A change of owners, a partial withdrawal, a total surrender, or a Policy
loan may have tax consequences depending on the particular circumstances. See
"Federal Tax Matters -- Policy Proceeds".
WHO SELLS THE POLICIES?
The Policies are sold by licensed insurance agents who are also registered
representatives of broker-dealers registered under the Securities Exchange Act
of 1934 and who are members of the National Association of Securities Dealers,
Inc. Washington Square Securities, Inc., an affiliate of ours, is the Principal
Underwriter of the Policies. See "Distribution of the Policies".
PART 2. DETAILED INFORMATION
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
We are a stock life insurance company organized in 1885 and incorporated
under the laws of the State of Minnesota. Effective January 3, 1989, we
converted from a stock and mutual life insurance company to a stock life
insurance company, and through a merger, we became a direct, wholly-owned
subsidiary of ReliaStar Financial Corp. (formerly known as The NWNL Companies,
Inc.). We offer individual life insurance and annuities, employee benefits and
retirement contracts. The Policies described in this Prospectus are
nonparticipating. On a consolidated basis, we have $178 billion of life
insurance in force and our assets are $15.5 billion. Our Home Office is at 20
Washington Avenue South, Minneapolis, Minnesota 55401 (telephone 612-372-5507).
THE VARIABLE ACCOUNT
The Variable Account is a Separate Account of ours, established by the Board
of Directors on October 11, 1984 pursuant to the laws of the State of Minnesota.
The Variable Account will receive and invest the Net Premiums paid and allocated
to it under this Policy. In addition, the Variable Account currently receives
and invests net premiums for another class of flexible premium variable life
insurance policy and may do so for additional classes in the future. The
Variable Account meets the definition of a "separate account" under the federal
securities laws and has been registered with the SEC as a unit investment trust
under the Investment Company Act of 1940. The registration does not involve
supervision by the SEC of the management or investment policies or practices of
the Variable Account, us, or the Funds.
We own the assets of the Variable Account. However, the Minnesota laws under
which the Variable Account was established provide that the Variable Account
cannot be charged with liabilities arising out of any other business we may
conduct. We are required to maintain assets which are at least equal to the
reserves and other liabilities of the Variable Account. We may transfer assets
which exceed these reserves and liabilities to our general account (the Fixed
Account).
For a description of the Fixed Account, see Appendix A to this Prospectus.
PERFORMANCE INFORMATION
Performance information for the Sub-Accounts of the Variable Account and the
Funds available for investment by the Variable Account may appear in
advertisements, sales literature, or reports to Policy owners or prospective
purchasers. Performance information for the Sub-Accounts will reflect deductions
of Fund expenses and be adjusted to reflect the Mortality and Expense Risk
Charge, but will not reflect deductions for the cost of insurance or the
Surrender Charge. Quotations of performance information for the Funds will be
accompanied by performance information for the Sub-Accounts. Performance
information for the Funds will take into account all fees and charges at the
Fund level, but will not reflect any deductions from the Variable Account.
Performance information reflects only the performance of a hypothetical
investment during a particular time period in which the calculations are based.
Performance information showing total returns and average annual total returns
may be provided for periods prior to the date a Sub-Account commenced operation.
Such performance information will be calculated based on the assumption that the
Sub-Accounts were in existence for the same periods as those indicated for the
Funds, with the level of charges at the Variable
14
<PAGE>
Account level that were in effect at the inception of the Sub-Accounts.
Performance information should be considered in light of the investment
objectives and policies, characteristics and quality of the portfolio of the
Fund in which the Sub-Account invests, and the market conditions during the
given period of time, and should not be considered as a representation of what
may be achieved in the future.
We may also provide individualized hypothetical illustrations of Policy
Accumulation Value, Cash Surrender Value and Death Benefit based on historical
investment returns of the Funds. These illustrations will reflect deductions for
Fund expenses and Policy and Variable Account charges, including the Monthly
Deduction, Premium Expense Charge and the Surrender Charge. These hypothetical
illustrations will be based on the actual historical experience of the Funds as
if the Sub-Accounts had been in existence and a Policy issued for the same
periods as those indicated for the Funds.
Performance of the Sub-Accounts and/or the Funds as reported from time to
time in advertisements and sales literature may be compared to other variable
life insurance issuers in general or to the performance of particular types of
variable life insurance policies investing in mutual funds, or investment series
of mutual funds with investment objectives similar to each of the Sub-Accounts,
whose performance is reported by Lipper Analytical Services, Inc. ("Lipper") and
Morningstar, Inc. ("Morningstar") or reported by other series, companies,
individuals or other industry or financial publications of general interest,
such as FORBES, MONEY, THE WALL STREET JOURNAL, BUSINESS WEEK, BARRON'S,
CHANGING TIMES, and FORTUNE. Lipper and Morningstar are independent services
which monitor and rank the performances of variable life insurance issuers in
each of the major categories of investment objectives on an industry-wide basis.
Lipper's and Morningstar's rankings include variable annuity issuers as well
as variable life insurance issuers. The performance analysis prepared by Lipper
and Morningstar ranks such issuers on the basis of total return, assuming
reinvestment of distributions, but does not take sales charges, redemption fees
or certain expense deductions at the separate account level into consideration.
We may also compare the performance of each Sub-Account in advertising and
sales literature to the Standard & Poor's Index of 500 common stocks and the Dow
Jones Industrials, which are widely used measures of stock market performance.
We may also compare the performance of each Sub-Account to other widely
recognized indices. Unmanaged indices may assume the reinvestment of dividends,
but typically do not reflect any "deduction" for the expense of operating or
managing an investment portfolio.
THE POLICIES
The Policies are flexible premium variable life insurance contracts with
death benefits, cash values, and other features of traditional life insurance
contracts. They are "flexible premium" because premiums do not have to be paid
according to a fixed schedule. They are "variable" because, to the extent
Accumulation Value is attributable to the Variable Account, Accumulation Values
and, under certain circumstances, the Death Benefit will increase and decrease
based on the investment performance of the Funds to which you allocate your
premium payments.
DEATH BENEFIT
Like traditional life insurance, we pay a death benefit if the Insured dies
while the Policy is in force. The proceeds payable upon the death of the Insured
will be the Death Benefit (see "Death Benefit Options" below) reduced by any
Loan Amount and unpaid Monthly Deductions. All or part of the proceeds may be
paid in cash to your beneficiaries or under one or more of the settlement
options we offer (see "General Provisions -- Settlement Options").
The Policy provides two Death Benefit Options: the Level Amount Option and
the Variable Amount Option. You choose the Death Benefit Option on the
application for the Policy. Subject to certain limitations, you can change the
Death Benefit Option after issuance of the Policy. See "Death Benefit -- Change
in Death Benefit Option".
The Death Benefit may vary with the Policy's Accumulation Value. Under the
Level Amount Option, the Death Benefit will only vary with the Accumulation
Value whenever the Accumulation Value multiplied by the corridor percentage (see
"Death Benefit Options -- Level Amount Option") exceeds the Face Amount of the
Policy. The Death Benefit under the Variable Amount Option will always vary with
the Accumulation Value because the Death Benefit equals the Face Amount plus the
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<PAGE>
Accumulation Value, or the corridor percentage of the Accumulation Value. Under
either Death Benefit Option, however, the Death Benefit will never be less than
the current Face Amount of the Policy and will be payable only as long as the
Policy remains in force.
In addition to affecting the amount of the Death Benefit as described above,
the Accumulation Value generally determines how long the Policy remains in
force. See "Policy Lapse and Reinstatement". This means that, to the extent
Accumulation Value is attributable to the Variable Account, the investment
performance of the Variable Account (and the underlying Funds) may affect the
duration of the Policy by affecting the amount of Accumulation Value. You bear
the investment risk with respect to any amounts allocated to the Variable
Account. If, however, the Death Benefit Guarantee is in effect (see "Death
Benefit Guarantee"), the Policy will stay in force until the Insured reaches Age
65 (or five Policy Years, if longer) without regard to the investment
performance under the Policy.
Appendix C illustrates Accumulation Values, Surrender Charges, Cash
Surrender Values, and Death Benefits assuming different levels of premium
payments and investment returns for selected Ages and Face Amounts.
DEATH BENEFIT OPTIONS
The Level Amount Option and the Variable Amount Option are described below.
LEVEL AMOUNT OPTION. The Death Benefit is the greater of the current Face
Amount of the Policy or the corridor percentage of Accumulation Value on the
Valuation Date on or next following the date of the Insured's death. The
corridor percentage is 250% for an Insured Age 40 or below, and the percentage
declines with increasing Ages as shown in the Corridor Percentage Table on page
17. Accordingly, under the Level Amount Option the Death Benefit will remain
level unless the corridor percentage of Accumulation Value exceeds the current
Face Amount, in which case the amount of the Death Benefit will vary as the
Accumulation Value varies.
ILLUSTRATION OF LEVEL AMOUNT OPTION. For purposes of this illustration,
assume that the Insured is under Age 40, and that there is no Loan Amount. Under
the Level Amount Option, a Policy with a $100,000 Face Amount will generally
have a $100,000 Death Benefit. However, because the Death Benefit must be equal
to or be greater than 250% of the Accumulation Value, any time the Accumulation
Value of the Policy exceeds $40,000, the Death Benefit will exceed the $100,000
Face Amount. Each additional dollar added to the Accumulation Value above
$40,000 will increase the Death Benefit by $2.50. Thus, if the Accumulation
Value exceeds $40,000 and increases by $100 because of investment performance or
premium payments, the Death Benefit will increase by $250. A Policy owner with
an Accumulation Value of $50,000 will be entitled to a Death Benefit of $125,000
($50,000 X 250%); an Accumulation Value of $75,000 will yield a Death Benefit of
$187,500 ($75,000 X 250%); and an Accumulation Value of $100,000 will yield a
Death Benefit of $250,000 ($100,000 X 250%).
Similarly, as long as the Accumulation Value exceeds $40,000, each dollar
taken out of the Accumulation Value will reduce the Death Benefit by $2.50. If,
for example, the Accumulation Value is reduced from $75,000 to $70,000 because
of partial withdrawals, charges, or negative investment performance, the Death
Benefit will be reduced from $187,500 to $175,000. If at any time, however, the
Accumulation Value multiplied by the corridor percentage is less than the Face
Amount, the Death Benefit will equal the current Face Amount of the Policy.
The corridor percentage becomes lower as the Insured's Age increases. If the
current Age of the Insured in the illustration above were, for example, 50
(rather than under Age 40), the corridor percentage would be 185%. The Death
Benefit would not exceed the $100,000 Face Amount unless the Accumulation Value
exceeded approximately $54,055 (rather than $40,000), and each $1 then added to
or taken from the Accumulation Value would change the Death Benefit by $1.85
(rather than $2.50).
16
<PAGE>
CORRIDOR PERCENTAGE TABLE
<TABLE>
<CAPTION>
Insured's Age on
Previous Policy Corridor Percentage
Anniversary of Accumulation Value
- ------------------------- -----------------------
<S> <C>
40 or younger 250%
41 243
42 236
43 229
44 222
45 215
46 209
47 203
48 197
49 191
50 185
51 178
52 171
53 164
54 157
55 150
56 146
57 142
58 138
59 134
60 130
61 128
62 126
63 124
64 122
65 120
66 119
67 118
68 117
69 116
70 115
71 113
72 111
73 109
74 107
75-90 105
91 104
92 103
93 102
94 101
95 100
</TABLE>
VARIABLE AMOUNT OPTION. The Death Benefit is equal to the greater of the
current Face Amount plus the Accumulation Value of the Policy, or the corridor
percentage of the Accumulation Value on the Valuation Date on or next following
the date of the Insured's death. The corridor percentage is 250% for an Insured
Age 40 or below, and the percentage declines with increasing Age as shown in the
Corridor Percentage Table above. Accordingly, under the Variable Amount Option
the amount of the Death Benefit will always vary as the Accumulation Value
varies.
ILLUSTRATION OF VARIABLE AMOUNT OPTION. For purposes of this illustration,
assume that the Insured is under Age 40 and that there is no Loan Amount. Under
the Variable Amount Option, a Policy with a Face Amount of $100,000 will
generally pay a Death Benefit of $100,000 plus the Accumulation Value. Thus, for
example, a Policy with an Accumulation Value of $20,000 will have a Death
Benefit of $120,000 ($100,000 + $20,000); an Accumulation Value of $40,000 will
yield a Death Benefit of
17
<PAGE>
$140,000 ($100,000 + $40,000). The Death Benefit, however, must be at least 250%
of the Accumulation Value. As a result, if the Accumulation Value of the Policy
exceeds approximately $66,667, the Death Benefit will be greater than the Face
Amount plus the Accumulation Value. Each additional dollar of the Accumulation
Value above $66,667 will increase the Death Benefit by $2.50. Thus, if the
Accumulation Value exceeds $66,667 and increases by $100 because of investment
performance or premium payments, the Death Benefit will increase by $250. A
Policy owner with an Accumulation Value of $75,000 will be entitled to a Death
Benefit of $187,500 ($75,000 X 250%); an Accumulation Value of $100,000 will
yield a Death Benefit of $250,000 ($100,000 X 250%); and an Accumulation Value
of $125,000 will yield a Death Benefit of $312,500 ($125,000 X 250%).
Similarly, any time the Accumulation Value exceeds $66,667, each dollar
taken out of the Accumulation Value will reduce the Death Benefit by $2.50. If,
for example, the Accumulation Value is reduced from $75,000 to $70,000 because
of partial withdrawals, charges, or negative investment performance, the Death
Benefit will be reduced from $187,500 to $175,000. If at any time, however, the
Accumulation Value multiplied by the corridor percentage is less than the Face
Amount plus the Accumulation Value, then the Death Benefit will be the current
Face Amount plus the Accumulation Value of the Policy.
The corridor percentage becomes lower as the Insured's Age increases. If the
current Age of the Insured in the illustration above were, for example, 50
(rather than under 40), the corridor percentage would be 185%. The amount of the
Death Benefit would be the sum of the Accumulation Value plus $100,000 unless
the Accumulation Value exceeded approximately $117,647 (rather than $66,667),
and each $1 then added to or taken from the Accumulation Value would change the
Death Benefit by $1.85 (rather than $2.50).
WHICH DEATH BENEFIT OPTION TO CHOOSE
If you prefer to have premium payments and favorable investment performance
reflected partly in the form of an increasing Death Benefit, you should choose
the Variable Amount Option. If you are satisfied with the amount of your
existing insurance coverage and prefer to have premium payments and favorable
investment performance reflected to the maximum extent in the Accumulation
Value, you should choose the Level Amount Option.
REQUESTED CHANGES IN FACE AMOUNT
Subject to certain limitations, you may request an increase or decrease in
the Face Amount. No increase or decrease in the Face Amount will be permitted
during the first two Policy Years.
INCREASES. For an increase in the Face Amount, a written request must be
submitted to us. We may also require additional evidence of insurability
satisfactory to us. The effective date of the increase will be the Monthly
Anniversary on or next following our approval of the increase. The increase may
not be less than $5,000 and no increase will be permitted after the Insured
reaches Age 75. We will deduct any charges associated with the increase (the
increases in the cost of insurance and the Surrender Charge upon lapse or total
surrender -- see "Effect of Requested Changes in Face Amount" below) from the
Accumulation Value, whether or not you pay an additional premium in connection
with the increase. You will be entitled to limited free look, conversion, and
refund rights with respect to requested increases in Face Amount. See "Sales
Charge Refund" and "Free Look and Conversion Rights".
DECREASES. For a decrease in the Face Amount, a written request must also be
submitted to us. Any decrease in the Face Amount will be effective on the
Monthly Anniversary on or next following our receipt of a written request. You
cannot request a decrease in the Face Amount more frequently than once every six
months. The Face Amount remaining in force after any requested decrease may not
be less than the Minimum Face Amount shown in the Policy. Under our current
policies, the Minimum Face Amount is $25,000, but we reserve the right to
establish a different Minimum Face Amount in the future. If, following a
decrease in Face Amount, the Policy would no longer qualify as life insurance
under Federal tax law (see "Federal Tax Matters -- Policy Proceeds"), the
decrease will be limited to the extent necessary to meet these requirements.
For purposes of determining the cost of insurance, decreases in the Face
Amount will be applied to reduce the current Face Amount in the following order:
(a) The Face Amount provided by the most recent increase;
(b) The next most recent increases successively; and
(c) The Face Amount when the Policy was issued.
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By reducing the current Face Amount in this manner, the Rate Class
applicable to the most recent increase in Face Amount will be eliminated first,
then the Rate Class applicable to the next most recent increase, and so on, for
the purposes of calculating the cost of insurance. This assumption will affect
the cost of insurance under the Policy only if different Rate Classes have been
applied to the current Face Amount. A Rate Class is a group of Insureds we
determine based upon our expectation that they will have similar mortality
experience. We currently place Insureds into standard Rate Classes or into
substandard Rate Classes that involve a higher mortality risk (for example, a
200% Rate Class or a 300% Rate Class). In an otherwise identical Policy, an
Insured in the standard Rate Class will have a lower cost of insurance than an
Insured in a substandard Rate Class with higher mortality risks. See "Deductions
and Charges -- Monthly Deduction".
For example, assume that the initial Face Amount was $50,000 with a standard
Rate Class, and that successive increases of $25,000 (at a Rate Class of 200%)
and $50,000 (at a Rate Class of 300%) were added. If a decrease of $50,000 or
less is requested, the amount of insurance at a 300% Rate Class will be reduced
first. If a decrease of more than $50,000 is requested, the amount at a 300%
Rate Class will be eliminated, and the excess over $50,000 will next reduce the
amount of insurance at a 200% Rate Class.
EFFECT OF REQUESTED CHANGES IN FACE AMOUNT. An increase or decrease in Face
Amount will affect the Monthly Deduction because the cost of insurance depends
upon the Face Amount. The charge for certain optional insurance benefits may
also be affected. See "Deductions and Charges -- Monthly Deduction". An increase
in the Face Amount will increase the Surrender Charge, but a decrease in the
Face Amount will not reduce the Surrender Charge. The Surrender Charge is,
however, imposed only upon lapse or total surrender of the Policy and not upon a
requested decrease in Face Amount. See "Deductions and Charges -- Surrender
Charge".
An increase in the Face Amount will increase the Minimum Monthly Premium as
of the effective date of the increase. Therefore, additional premium payments
may be required to maintain the Death Benefit Guarantee. A decrease in the Face
Amount will reduce the Minimum Monthly Premium as of the effective date of the
decrease. See "Death Benefit Guarantee".
The additional Surrender Charge on a requested increase in the Face Amount
will reduce the Cash Surrender Value (which is the Accumulation Value less any
Surrender Charge, Loan Amount and unpaid Monthly Deductions). If the resulting
Cash Surrender Value is not sufficient to cover the Monthly Deduction, the
Policy may lapse unless the Death Benefit Guarantee is in effect. See "Policy
Lapse and Reinstatement -- Lapse" and "Death Benefit Guarantee".
INSURANCE PROTECTION
You may increase or decrease the pure insurance protection provided by the
Policy (that is, the difference between the Death Benefit and the Accumulation
Value) in one of several ways as insurance needs change. These ways include
increasing or decreasing the Face Amount of insurance, changing the level of
premium payments, and, to a lesser extent, making a partial withdrawal under the
Policy. Although the consequences of each of these methods will depend upon the
individual circumstances, they may be generally summarized as follows:
(a) A decrease in the Face Amount will, subject to the corridor percentage
limitations (see "Death Benefit -- Death Benefit Options"), decrease the
pure insurance protection without reducing the Accumulation Value. If the
Face Amount is decreased, the Policy charges generally will decrease as
well. (Note that the Surrender Charge will NOT be reduced. See "Deductions
and Charges -- Surrender Charge".)
(b) An increase in the Face Amount (which is generally subject to underwriting
approval -- see "Death Benefit -- Requested Changes in Face Amount") will
likely increase the amount of pure insurance protection, depending on the
amount of Accumulation Value and the resultant corridor percentage
limitation. If the insurance protection is increased, the Policy charges
generally will increase as well.
(c) A partial withdrawal will reduce the Death Benefit. See "Surrender Benefits
-- Partial Withdrawal". However, it has a limited effect on the amount of
pure insurance protection and charges under the Policy, because the decrease
in the Death Benefit is usually equal to the amount of Accumulation Value
withdrawn. The primary use of a partial withdrawal is to withdraw
Accumulation Value. Furthermore, it results in a reduced amount of
Accumulation Value and increases the possibility that the Policy will lapse.
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(d) Under the Level Amount Option, until the corridor percentage of Accumulation
Value exceeds the Face Amount, (i) an increased level of premium payments
will reduce the amount of pure insurance protection, and (ii) a reduced
level of premium payments will increase the amount of pure insurance
protection.
(e) Under the Variable Amount Option, until the corridor percentage of
Accumulation Value exceeds the Face Amount plus the Accumulation Value, the
level of premium payments will not affect the amount of pure insurance
protection. (However, both the Accumulation Value and the Death Benefit will
be increased if premium payments are increased, and reduced if premium
payments are reduced.)
(f) Under either Death Benefit Option, if the Death Benefit is the corridor
percentage of Accumulation Value, then (i) an increased level of premium
payments will increase the amount of pure insurance protection (subject to
underwriting approval -- see "Payment and Allocation of Premiums -- Amount
and Timing of Premiums"), and (ii) a reduced level of premium payments will
reduce the pure insurance protection.
THE TECHNIQUES DESCRIBED IN THIS SECTION FOR CHANGING THE AMOUNT OF PURE
INSURANCE PROTECTION UNDER THE POLICY (FOR EXAMPLE, CHANGING THE FACE
AMOUNT, MAKING A PARTIAL WITHDRAWAL, AND CHANGING THE AMOUNT OF PREMIUM
PAYMENTS) MUST BE CONSIDERED TOGETHER WITH THE OTHER RESTRICTIONS AND
CONSIDERATIONS DESCRIBED ELSEWHERE IN THIS PROSPECTUS.
CHANGE IN DEATH BENEFIT OPTION
After the first two Policy Years, you may change the Death Benefit Option.
You must submit a written request to change the Death Benefit Option. A change
in the Death Benefit Option will also change the Face Amount. If the Death
Benefit Option is changed from the Level Amount Option to the Variable Amount
Option, the Face Amount will be decreased by an amount equal to the Accumulation
Value on the effective date of the change. You cannot change from the Level
Amount Option to the Variable Amount Option if the resulting Face Amount would
fall below the Minimum Face Amount (currently $25,000).
If the Death Benefit Option is changed from the Variable Amount Option to
the Level Amount Option, the Face Amount will be increased by an amount equal to
the Policy's Accumulation Value on the effective date of the change.
An increase or decrease in Face Amount resulting from a change in the Death
Benefit Option will affect the future Monthly Deductions because the cost of
insurance depends upon the Face Amount. The charge for certain optional
insurance benefits may also be affected. See "Deductions and Charges -- Monthly
Deduction". The Surrender Charge, however, will not be affected by an increase
or decrease in Face Amount resulting from a change in Death Benefit Option.
Changes in the Death Benefit Option do not require additional evidence of
insurability.
ACCELERATED BENEFIT RIDER
Under certain circumstances, the Accelerated Benefit Rider allows a Policy
owner to accelerate benefits from the Policy that would be otherwise payable
upon the death of the Insured. The benefit may vary state-by-state and your
registered representative should be consulted as to whether and to what extent
the rider is available in a particular state and on any particular Policy.
Generally, we will provide an Accelerated Benefit if the Insured has a
terminal illness that will result in the death of the Insured within 12 months,
as certified by a physician.
The Accelerated Benefit will not be more than 50% of the amount that would
be payable at the death of the Insured. The Accelerated Benefit will first be
used to pay off any outstanding Policy loans and interest due. The remainder of
the Accelerated Benefit will be in a lump sum to the Policy owner. Limitations,
as described in the Accelerated Benefit Rider, may apply.
A lien will be established against the Policy for the amount of the
Accelerated Benefit plus the administrative charge, plus interest on the lien.
Any proceeds from the Policy will be first used to repay this lien. The Policy
owner's access to the Cash Value will be reduced by the amount of the lien. The
proceeds payable to the beneficiary will be reduced by the amount of the lien.
The administrative charge will not exceed $300 and will be assessed at the
time the benefit is accelerated.
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The premium payable on the Policy will not be affected by the Accelerated
Benefit.
Receipt of a benefit under the Accelerated Benefit Rider may give rise to
Federal or State income tax. A competent tax adviser should be consulted for
further information.
The above information is not intended to be a complete summary of the Rider.
All of the terms and provisions of the Accelerated Benefit Rider are set forth
in the Rider and should be referred to in order to fully ascertain its benefits
and limitations.
PAYMENT AND ALLOCATION OF PREMIUMS
ISSUING THE POLICY
To apply for a Policy, an individual must complete an application and
personally deliver it to our licensed agent. The minimum Face Amount is
currently $25,000, but we reserve the right to specify a different minimum Face
Amount in the future for issuing a new Policy. We will generally only issue a
Policy to an applicant Age 75 or less who supplies evidence of insurability
satisfactory to us. Acceptance is subject to our underwriting rules and we
reserve the right to reject an application for any reason permitted by law.
SPONSORED MARKET PLANS. Policies may be purchased under sponsored
arrangements where permitted by state law. A "sponsored arrangement" includes an
arrangement where an employer permits group solicitation of its employees or an
association permits group solicitations of its members for the purchase of
Policies on an individual basis.
All participants in sponsored arrangements are individually underwritten.
Persons purchasing under a sponsored arrangement may apply for simplified
underwriting. If simplified underwriting is granted, the cost of insurance may
increase as a result of higher than anticipated mortality experience. However,
any such increase will not cause the cost of insurance charge to exceed the
guaranteed rates set forth in the Policy.
COVERAGE. Coverage under a Policy begins on the later of the Issue Date or
the date we receive at least the minimum initial premium (see immediately
following section). In general, if the applicant pays at least the minimum
initial premium with the application, the Issue Date will be the later of the
date of the application or the date of any medical examination required by our
underwriting procedures. However, if underwriting approval has not occurred
within 45 days after we receive the application or if you authorize premiums to
be paid by bank account monthly deduction, the Issue Date will be the date of
underwriting approval.
If you authorize premiums to be paid by government allotment, the Issue Date
generally will be, subject to our underwriting approval, the first day of the
month in which we receive the first Minimum Monthly Premium through government
allotment, whether or not a Minimum Monthly Premium is collected with the
application. If a Minimum Monthly Premium is collected with the application, it
will be allocated to the Sub-Accounts of the Variable Account and the Fixed
Account on the Valuation Date next following the Issue Date.
MINIMUM INITIAL PREMIUM. The minimum initial premium is three Minimum
Monthly Premiums (see "Death Benefit Guarantee"). If, however, you authorize
premiums to be paid by bank account monthly deduction or government allotment,
we will accept one Minimum Monthly Premium together with the required
authorization forms. The Minimum Monthly Premium is specified in the Policy and
determines the payments required to maintain the Death Benefit Guarantee.
TEMPORARY INSURANCE. At the time the application is taken, the applicant can
receive temporary insurance coverage by paying a premium equal to 10% of
annualized Minimum Monthly Premium. The temporary insurance will be for the face
amount specified in the premium receipt and will be effective until the earliest
of the following:
- The date the coverage under the Policy is effective.
- The date the applicant receives an offer for an alternative policy, a
notice of termination of temporary insurance coverage, or notice that we
have rejected the application.
- The date of death of the proposed Insured, any proposed additional
Insured, or any proposed Insured child.
- The 75th day after the date of the receipt for the temporary insurance.
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CREDITING NET PREMIUMS. We will credit Net Premiums to the Sub-Accounts of
the Variable Account and to the Fixed Account (except for policies issued in New
Jersey) on the basis of the applicant's allocation on the latest of the
following dates:
- The Valuation Date following the date of underwriting approval.
- The Valuation Date on or next following the Policy Date.
- The Valuation Date on or next following the date we have received at least
the required minimum initial premium payment.
- In the case of Policies issued under government allotment programs, the
Valuation Date next following the Issue Date.
Until the date on which Net Premiums are credited as described above,
premium payments will be held in our General Account. No interest will be earned
on these premium payments during this period of time.
REFUNDING PREMIUM. We will return all premiums paid without interest if any
of the following occur:
- We send notice to the applicant that the insurance is declined.
- The applicant refuses an offer for an alternative policy.
- The applicant does not supply required medical exams or tests within 30
days of the date of the application.
- The applicant returns the Policy under the limited free look right. See
"Free Look and Conversion Rights -- Free Look Rights".
ALLOCATION OF PREMIUMS
You choose the initial allocation of your Net Premiums (your gross premiums
less the Premium Expense Charge) to the Fixed Account and the Sub-Accounts of
the Variable Account on the application for the Policy. (The Fixed Account is
not available for Net Premium allocation under policies issued in New Jersey.)
You may change the allocation at any time by notifying us in writing. Changes
will not be effective until the date we receive your request and will only
affect premiums we receive on or after that date. The new premium allocation may
be 100% to any Account or divided in whole percentage points totaling 100%. We
reserve the right to adjust any allocation to eliminate fractional percentages.
Changing the current premium allocation will not affect the allocation of
existing Accumulation Value.
AMOUNT AND TIMING OF PREMIUMS
The amount and frequency of premium payments will affect the Accumulation
Value, the Cash Surrender Value, and how long the Policy will remain in force
(including affecting whether the Death Benefit Guarantee is in effect -- see
"Death Benefit Guarantee"). After the initial premium, you may determine the
amount and timing of subsequent premium payments within the following
restrictions:
- IN MOST CASES, PAYMENT OF CUMULATIVE PREMIUMS SUFFICIENT TO MAINTAIN THE
DEATH BENEFIT GUARANTEE WILL BE REQUIRED TO KEEP THE POLICY IN FORCE
DURING AT LEAST THE FIRST SEVERAL POLICY YEARS. SEE "DEATH BENEFIT
GUARANTEE".
- We may choose not to accept any premium less than $25.00.
- We reserve the right to limit the amount of any premium payment. In
general, during the first Policy Year we will not accept total premium
payments in excess of $250,000 on the life of any Insured, whether such
payments are received on a Policy or on any other insurance policy issued
by us or our affiliates. Also, we will not accept any premium payment in
excess of $50,000 on any Policy after the first Policy Year. At our
discretion, however, we may waive any of these premium limitations.
- We may require additional evidence of insurability satisfactory to us if
any premium would increase the difference between the Death Benefit and
the Accumulation Value (that is, the net amount at risk). A premium
payment would increase the net amount at risk if at the time of payment
the Death Benefit would be based upon the applicable percentage of
Accumulation Value. See "Death Benefit -- Death Benefit Options".
- In no event may the total of all premiums paid, both scheduled and
unscheduled, exceed the current maximum premium payments allowed for life
insurance under Section 7702 of the Federal Internal Revenue Code. If at
any time a premium is paid which would result in total
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premiums exceeding the current maximum premiums allowed, we will only
accept that portion of the premium which would make total premiums equal
the maximum. Any part of the premium in excess of that amount will be
returned, and no further premiums will be accepted until allowed by the
current maximum premium limitations.
- If you contemplate a large premium payment under this Policy, and you wish
to avoid Modified Endowment Contract classification, you may contact us in
writing before making the payment and we will tell you the maximum amount
which can be paid into the Policy. See "Federal Tax Matters -- Policy
Proceeds".
PLANNED PERIODIC PREMIUMS
You may choose a Planned Periodic Premium schedule which indicates a
preference as to future amounts and frequency of payment. The Planned Periodic
Premiums may be paid annually, semi-annually, quarterly or, if you choose, you
can pay the Planned Periodic Premiums by bank account monthly deduction or
government allotment.
The amount and frequency of your initial Planned Periodic Premium will be
shown in the Policy. You may change the Planned Periodic Premium at any time by
written request. We may limit the amount of any increase.
As mentioned above, the amount and frequency of premium payments will affect
Accumulation Value, Cash Surrender Value, and how long the Policy will remain in
force. Failure to make any Planned Periodic Premium payment will not, however,
necessarily result in lapse of the Policy. On the other hand, making Planned
Periodic Premium payments will not guarantee that the Policy remains in force.
See "Death Benefit Guarantee" and "Policy Lapse and Reinstatement".
UNSCHEDULED ADDITIONAL PREMIUMS
Premiums, other than Planned Periodic Premiums, may be paid at any time
while the Policy is in force. We may limit the number and amount of these
additional payments.
PAYING PREMIUMS BY MAIL
Planned Periodic Premiums and Unscheduled Additional Premiums may be paid to
the Company by mailing them to:
Northwestern National Life Insurance Company
P.O. Box 802511
Chicago, Illinois 60680-2511
DEATH BENEFIT GUARANTEE
If you meet the requirements described below, we guarantee that we will not
lapse the Policy even if the Cash Surrender Value is not sufficient to cover the
Monthly Deduction that is due. This feature of the Policy is called the "Death
Benefit Guarantee". The Death Benefit Guarantee expires at the Insured's Age 65
(or five Policy Years, if longer).
In general, the two most significant benefits from the Death Benefit
Guarantee are as follows. First, during the early Policy Years, the Cash
Surrender Value (even when supplemented by the Sales Charge Refund) will
generally not be sufficient to cover the Monthly Deduction, so that the Death
Benefit Guarantee will be necessary to avoid lapse of the Policy. See "Policy
Lapse and Reinstatement". This occurs because the Surrender Charge usually
exceeds the Accumulation Value in these years. In this regard, you should
consider that if you request an increase in Face Amount, an additional Surrender
Charge would apply for the fifteen years following the increase, which could
create a similar possibility of lapse as exists during the early Policy Years.
Second, to the extent the Cash Surrender Value declines due to poor investment
performance, or due to an additional Surrender Charge after a requested
increase, the Cash Surrender Value may not be sufficient even in later Policy
Years to cover the Monthly Deduction, so that the Death Benefit Guarantee may
also be necessary in later Policy Years to avoid lapse of the Policy. THUS, EVEN
THOUGH THE POLICY PERMITS PREMIUM PAYMENTS THAT ARE LESS THAN THE MINIMUM
MONTHLY PREMIUMS, YOU MAY LOSE THE SIGNIFICANT PROTECTION PROVIDED BY THE DEATH
BENEFIT GUARANTEE BY PAYING LESS THAN THE MINIMUM MONTHLY PREMIUMS.
REQUIREMENTS
The Death Benefit Guarantee will be in effect if the sum of all premiums
paid minus any partial withdrawals and any loans are equal to or greater than
the sum of the Minimum Monthly Premiums since the Policy Date.
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The requirements for the Death Benefit Guarantee must be satisfied as of
each Monthly Anniversary, even though you do not have to pay premiums monthly.
EXAMPLE: The Policy Date is January 1, 1996. The Minimum Monthly Premium is
$100 per month. No Policy loans or partial withdrawals are taken and no Face
Amount changes have occurred.
Case 1. You pay $100 each month. The Death Benefit Guarantee is maintained.
Case 2. You pay $1,000 on January 1, 1996. The $1,000 maintains the Death
Benefit Guarantee without your paying any additional premiums for
the next 10 months (through October 31, 1996). However, you must
pay at least $100 by November 1, 1996 to maintain the Death Benefit
Guarantee through November 30, 1996.
The amount of the initial Minimum Monthly Premium will be determined by us
at issuance of the Policy and will be shown in the Policy. The initial Minimum
Monthly Premium will depend upon the Insured's sex, Age at issue, Rate Class,
optional insurance benefits added by rider, and the initial Face Amount.
The following Policy changes may change the Minimum Monthly Premium:
- A requested increase or decrease in the Face Amount (see "Death Benefit --
Requested Changes in Face Amount").
- A change in the Death Benefit Option (see "Death Benefit -- Change in
Death Benefit Option").
- The addition or termination of a Policy rider (see "General Provisions --
Optional Insurance Benefits").
We will notify you in writing of any changes in the Minimum Monthly Premium.
If, as of any Monthly Anniversary, you have not made sufficient premium
payments to maintain the Death Benefit Guarantee, we will send you notice of the
premium payment required to maintain it. If we do not receive the required
premium payment within 61 days from the date of our notice, the Death Benefit
Guarantee will terminate. THE DEATH BENEFIT GUARANTEE CANNOT BE REINSTATED.
Even if the Death Benefit Guarantee terminates, the Policy will not
necessarily lapse. For a discussion of the circumstances under which the Policy
may lapse, see "Policy Lapse and Reinstatement".
ACCUMULATION VALUE
The Accumulation Value of the Policy (that is, the total value attributable
to a specific Policy in the Variable Account and the Fixed Account) is equal to
the sum of the Variable Accumulation Value (the amount attributable to the
Variable Account) plus the Fixed Accumulation Value (the amount attributable to
the Fixed Account). The Accumulation Value should be distinguished from the Cash
Surrender Value that would actually be paid to you upon total surrender of the
Policy, which is the Accumulation Value less any Surrender Charge, Loan Amount
and unpaid Monthly Deductions. See "Surrender Benefits -- Total Surrender". The
Accumulation Value should also be distinguished from the Cash Value, which
determines the amount available for Policy loans, and is the Accumulation Value
less any Surrender Charge. See "Policy Loans." (During the first two Policy
Years and the first two years following a requested increase in Face Amount, you
may also be entitled to a Sales Charge Refund. See "Sales Charge Refund".)
The Variable Accumulation Value will increase or decrease to reflect the
investment performance of the Funds in which Sub-Accounts of the Variable
Account have been invested. The Variable Accumulation Value will also be
increased by (a) any Net Premiums credited to the Variable Account and (b) any
transfers from the Fixed Account. The Variable Accumulation Value will also be
reduced by (a) the Monthly Deduction attributable to the Variable Account, (b)
partial withdrawals from the Variable Account, (c) any transfer and partial
withdrawal charges attributable to the Variable Account, and (d) any amounts
transferred from the Variable Account to the Fixed Account (including amounts
transferred from the Variable Account to the Fixed Account as security for
Policy loans -- see "Policy Loans"). The Variable Accumulation Value will
generally vary daily.
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The Fixed Accumulation Value will be increased by (a) any Net Premiums
credited to the Fixed Account, (b) any interest credited to the Fixed Account
(determined at our discretion, but guaranteed not to be less than 4%), and (c)
any amounts transferred from the Variable Account to the Fixed Account
(including amounts transferred to the Fixed Account as security for Policy loans
- -- see "Policy Loans"). The Fixed Accumulation Value will be reduced by (a) the
Monthly Deduction attributable to the Fixed Account, (b) partial withdrawals
from the Fixed Account, (c) any transfer and partial withdrawal charges
attributable to the Fixed Account, and (d) any amounts transferred from the
Fixed Account to the Variable Account.
For a detailed discussion of the calculation of Accumulation Value, see
Appendix B. An illustration of various Accumulation Values, Surrender Charges,
Cash Surrender Values, and Death Benefits, assuming different levels of premium
payments and various investment returns for selected Ages and Face Amounts, is
shown in Appendix C.
DEDUCTIONS AND CHARGES
Charges will be deducted in connection with the Policy to compensate us for
(a) providing the insurance benefits of the Policy (including any riders), (b)
administering the Policy, (c) assuming certain risks in connection with the
Policy, and (d) incurring expenses in distributing the Policy.
Some of these charges are deducted from each premium payment. Certain other
charges are deducted monthly from both the Fixed Account and the Variable
Account, or from the Variable Account only. A charge is also made for each
partial withdrawal and a charge may be made for each transfer.
We currently expect that the total sales charge (which consists of the 2.50%
sales charge deducted from each premium payment and the Contingent Deferred
Sales Charge) may not be sufficient to cover the expenses incurred in selling
and distributing the Policies. To the extent that these charges are not
sufficient these expenses will be paid from our general assets. These assets may
include proceeds from the Mortality and Expense Risk Charge described below.
PREMIUM EXPENSE CHARGE
We deduct a sales charge and a charge for premium taxes from each premium
payment. We may in the future deduct a premium processing charge from each
premium payment although we currently do not make this charge. The total of
these charges is called the Premium Expense Charge. The amount remaining after
we have deducted the Premium Expense Charge is called the Net Premium. The Net
Premium is then credited to the Fixed Account and the Sub-Accounts of the
Variable Account according to your allocation.
SALES CHARGE. A sales charge of 2.50% of each premium payment will be
deducted to compensate us for expenses relating to the distribution of the
Policy, including agents' commissions, advertising, and the printing of the
prospectuses and sales literature for new and prospective buyers of this policy.
In addition, we may charge a contingent deferred sales charge if you surrender
the Policy or the Policy lapses. See "Deductions and Charges -- Surrender
Charge".
PREMIUM TAX CHARGE. Various states and subdivisions impose a tax on premiums
received by insurance companies. Premium taxes vary from state to state. A
charge of 2.50% of each premium payment will be deducted by us. The deduction
represents an amount we consider necessary to pay all taxes imposed by the
states and any subdivisions.
PREMIUM PROCESSING CHARGE. We may make a charge of up to $2.00 per premium
payment to reimburse us for the cost of collecting and processing premiums,
although we currently make no such charge. We do not anticipate that we will
make any profit on this charge. If a premium processing charge is made, it will
be deducted from premium payments before the percentage deductions for sales
charge and premium taxes.
MONTHLY DEDUCTION
We deduct the charges described below from the Accumulation Value of the
Policy on a monthly basis. The total of these charges is called the Monthly
Deduction.
The Monthly Deduction will be deducted on each Monthly Anniversary from the
Fixed Account and the Sub-Accounts of the Variable Account on a proportionate
basis depending on their relative
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<PAGE>
Accumulation Values at that time. For purposes of determining these proportions,
the Fixed Accumulation Value is reduced by the Loan Amount. Because the cost of
insurance portion of the Monthly Deduction can vary from month to month, the
Monthly Deduction itself will vary in amount from month to month.
If the Cash Surrender Value plus any Sales Charge Refund is not sufficient
to cover the Monthly Deduction on a Monthly Anniversary, the Policy may lapse.
See "Death Benefit Guarantee" and "Policy Lapse and Reinstatement".
COST OF INSURANCE. We will determine the monthly cost of insurance by
multiplying the applicable cost of insurance rate or rates by the net amount at
risk under the Policy. The net amount at risk under the Policy for a Policy
Month is (a) the Death Benefit at the beginning of the Policy Month divided by
1.004074 (which reduces the net amount at risk, solely for purposes of computing
the cost of insurance, by taking into account assumed monthly earnings at an
annual rate of 5%), less (b) the Accumulation Value at the beginning of the
Policy Month (reduced by any charges for rider benefits). As a result, the net
amount at risk may be affected by changes in the Accumulation Value or in the
Death Benefit.
The Rate Class of an Insured may affect the cost of insurance. A Rate Class
is a group of Insureds we determine based upon our expectation that they will
have similar mortality experience. We currently place Insureds into standard
Rate Classes or into substandard Rate Classes that involve a higher mortality
risk. In an otherwise identical Policy, an Insured in the standard Rate Class
will have a lower cost of insurance than an Insured in a Rate Class with higher
mortality risks.
If there is an increase in the Face Amount and the Rate Class applicable to
the increase is different from that for the initial Face Amount or any prior
requested increases in Face Amount, the net amount at risk will be calculated
separately for each Rate Class. For purposes of determining the net amount at
risk for each Rate Class, the Accumulation Value will first be assumed to be
part of the initial Face Amount. If the Accumulation Value is greater than the
initial Face Amount, it will then be assumed to be part of each increase in
order, starting with the first increase.
Cost of insurance rates will be based on the sex, Issue Age, Policy Year and
Rate Class(es) of the Insured. The actual monthly cost of insurance rates will
reflect our expectations as to future experience. They will not, however, be
greater than the guaranteed cost of insurance rates shown in the Policy, which
are based on the Commissioner's 1980 Standard Ordinary Mortality Tables for
smokers or nonsmokers, respectively.
MONTHLY ADMINISTRATIVE CHARGE. Each month we deduct an administrative charge
of $8.25 which is guaranteed not to exceed $12.00 each month. This charge
reimburses us for expenses incurred in administering the Policy, such as
processing claims, maintaining records, making Policy changes, printing and
mailing prospectuses and annual and semi-annual reports to Policy owners and
communicating with you and other owners of Policies. We do not anticipate that
we will make any profit on this charge. Because this charge is intended to cover
the average anticipated administrative expenses for all Policies, however, there
is not necessarily a relationship between the amount of this charge for a given
Policy and the amount of expenses that may be attributable to that Policy.
MONTHLY MORTALITY AND EXPENSE RISK CHARGE. Each month during the first 10
Policy Years we will deduct a charge at an annual rate of .9 of 1% (.90%) of the
Variable Accumulation Value of the Policy. Each month thereafter we will deduct
a charge at an annual rate of .45 of 1% (.45%) of the Variable Accumulation
Value guaranteed not to exceed .9 of 1% (.90%) for the duration of the Policy.
We may realize a profit from this charge.
The mortality risk assumed is that Insureds may live for a shorter period of
time than we estimated and that, as a result, we would have to pay a greater
amount in Death Benefits than we collect in premium payments. The expense risk
assumed is that expenses incurred in issuing and administering the Policy will
be greater than we estimated.
OPTIONAL INSURANCE BENEFIT CHARGES. Each month we deduct charges for any
optional insurance benefits added to the Policy by rider. See "General
Provisions -- Optional Insurance Benefits".
SURRENDER CHARGE
GENERAL. During the first 15 Policy Years and during the first 15 years
following any requested increase in Face Amount, we make a Surrender Charge if
you surrender the Policy or the Policy lapses. The Surrender Charge has two
parts -- The Contingent Deferred Administrative Charge and the
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<PAGE>
Contingent Deferred Sales Charge which are determined separately. The Surrender
Charge will not be affected by any decrease in Face Amount or by any change in
Face Amount resulting from a change in the Death Benefit Option.
The Surrender Charge imposed upon early surrender or lapse will be
significant. As a result, you should purchase a Policy only if you have the
financial capability to keep it in force for a substantial period of time.
The Contingent Deferred Administrative Charge reimburses us for expenses
incurred in issuing the Policy, such as processing the application (primarily
underwriting) and setting up computer records. We do not anticipate making a
profit on this charge. Because this charge is intended to cover the average
anticipated issue expenses for all Policies, however, there is not necessarily a
relationship between the amount of this charge for a given Policy and the amount
of expenses that may be attributable to that Policy.
The Contingent Deferred Sales Charge compensates us for expenses relating to
the distribution of the Policy, including agents' commissions, advertising, and
the printing of the prospectus and sales literature for new sales of the Policy.
CONTINGENT DEFERRED ADMINISTRATIVE CHARGE. The maximum Contingent Deferred
Administrative Charge for the initial Face Amount and any requested increase in
Face Amount is determined on the Policy Date and on the effective date of any
requested increase in Face Amount respectively. The maximum charge is $5.00 per
$1,000 of Face Amount during the first five years of the relevant 15 year
period, and decreases thereafter in equal monthly increments until it becomes
zero at the end of the 15 year period.
The Contingent Deferred Administrative Charge for the initial Face Amount or
a requested increase in Face Amount can be determined by multiplying (a) $5.00
by (b) the initial Face Amount or the Face Amount of the increase, as the case
may be, and by (c) the applicable percentage from the Surrender Charge
Percentage Table shown on page 28, and then dividing this amount by 1000. For
example assume that an Insured buys a Policy with an initial Face Amount of
$100,000. If the Policy is surrendered at any time in the first five Policy
Years, the Contingent Deferred Administrative Charge is calculated by
multiplying (a) $5.00 by (b) $100,000 (the initial Face Amount), and by (c) 100%
(the applicable percentage from the Surrender Charge Percentage Table), and then
dividing by 1000. This results in a total of $500 ($5.00 x 100,000 x 100% /
1000).
The calculation of an additional Contingent Deferred Administrative Charge
for a requested increase in Face Amount is the same as for the initial Face
Amount, except that the charges are based on the amount of the increase and the
years and months are measured from the effective date of the increase.
CONTINGENT DEFERRED SALES CHARGE. The maximum Contingent Deferred Sales
Charge for the initial Face Amount or any requested increase in Face Amount will
be determined on the Policy Date or on the effective date of any requested
increase respectively. The Contingent Deferred Sales Charge will remain level
for the first five years in the relevant 15 year period, and then reduces in
equal monthly increments until it becomes zero at the end of 15 years. The
Contingent Deferred Sales Charge will vary depending upon the Insured's Age (on
the Policy Date or on the effective date of an increase in Face Amount) and the
Insured's sex.
If you surrender the Policy during the first two Policy Years or during the
first 24 months following a requested increase in Face Amount, you may be
entitled to a refund of a portion of the Contingent Deferred Sales Charge. See
"Sales Charge Refund."
The Contingent Deferred Sales Charge will be equal to the lesser of:
(a) 47.50% of the premiums attributable to the initial Face Amount of
the Policy and any premiums attributable to an increase in Face
Amount; or
(b) The result of the Contingent Deferred Sales Charge calculation
described below.
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<PAGE>
CONTINGENT DEFERRED SALES CHARGE CALCULATION. For purposes of (b) above,
the Contingent Deferred Sales Charge for the initial Face Amount or any
requested increase in Face Amount is determined by multiplying (i) the
applicable Charge per $1,000 of Face Amount from Appendix D by (ii) the Initial
Face Amount or the Face Amount of the increase, as applicable, and by (iii) the
applicable percentage from the Surrender Charge Percentage Table below, and then
dividing this amount by 1000.
EXAMPLE. The following example illustrates how the Contingent Deferred
Sales Charge is determined. Assume that a male, Age 35 buys a policy with an
initial Face Amount of $100,000 and he surrenders the Policy during the third
Policy Year at which time he has paid cumulative premiums of $2,000. Based on
these assumptions the Contingent Deferred Sales Charge will be the lesser of:
(a) 47.50% times the cumulative premiums paid on the Policy, which is
$950 (47.50 X $2,000); or
(b) The result of the Contingent Deferred Sales Charge Calculation,
which is determined by multiplying (i) $14.00 (from Appendix D for a
male age 35) by (ii) $100,000 (the Initial Face Amount) and by (iii)
100% (the applicable percentage from the Surrender Charge Percentage
Table), and then dividing by 1000, which results in a total of
$1,400 ($14.00 X 100,000 X 100%/1000).
The additional Contingent Deferred Sales Charge for requested increases in
Face Amount will be calculated in the same manner as illustrated in the example
above. However, for purposes of determining the amount in (a) in the above
example, the cumulative premium paid is replaced by the premiums attributable to
the increase in Face Amount. The premiums attributable to the increase in Face
Amount will consist of a portion of the existing Accumulation Value and a
portion of the premium payments made after the effective date of the increase.
The proportion of existing Accumulation Value and subsequent premium payments
attributable to the increase will equal (a) the Surrender Charge Guideline for
the increase found in Appendix E, divided by (b) the sum of the Surrender Charge
Guideline(s) for the initial Face Amount and each increase in Face Amount.
MASSACHUSETTS, MONTANA AND PENNSYLVANIA RESIDENTS. Appendix C, Appendix D,
Appendix E and the preceding illustrations of the Contingent Deferred Sales
Charge do not apply to Policies issued in Massachusetts, Montana and
Pennsylvania. The Contingent Deferred Sales Charge applied to Policies issued in
Massachusetts and Montana is not affected by the Insured's sex. Therefore, the
Contingent Deferred Sales Charge made on Policies issued in these two states
will differ from the charge made in other states. In Pennsylvania, the Insured's
sex will be a factor in determining the amount of Contingent Deferred Sales
Charge applied to a Policy, but the charge will differ from the charge described
in the above example.
SURRENDER CHARGE PERCENTAGE TABLE
<TABLE>
<CAPTION>
If surrender or lapse occurs in The following percentage of the
the last month of Policy Year:* Surrender Charge will be payable:**
- ------------------------------- -----------------------------------
<S> <C>
1 through 5 100%
6 90%
7 80%
8 70%
9 60%
10 50%
11 40%
12 30%
13 20%
14 10%
15 and later 0%
</TABLE>
*For requested increases, years are measured from the date of the increase.
**The percentages reduce equally for each Policy Month during the years shown.
For example, during the seventh Policy Year, the percentage reduces equally
each month from 90% at the end of the sixth Policy Year to 80% at the end of
the seventh Policy Year.
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<PAGE>
CHARGES AGAINST THE VARIABLE ACCOUNT
Certain charges will be deducted as a percentage of the value of the net
assets of the Variable Account to compensate us for certain risks assumed in
connection with the Policy. These charges will not be deducted from assets in
the Fixed Account.
TAXES. Currently no charge is made to the Variable Account for Federal
income taxes that may be attributable to the Variable Account. We may, however,
make such a charge in the future. Charges for other taxes, if any, attributable
to the Variable Account may also be made.
INVESTMENT ADVISORY FEE AND OTHER FUND EXPENSES. Because the Variable
Account purchases shares of the Funds, the net asset value of the investments of
the Variable Account will reflect the investment advisory fees and other
expenses incurred by the Funds. For more information concerning these expenses,
see the prospectuses for the Funds that accompany this Prospectus.
PARTIAL WITHDRAWAL AND TRANSFER CHARGES
We currently make no charge for transfers and a $10.00 charge for each
partial withdrawal. These charges are guaranteed not to exceed $25.00 per
transfer or partial withdrawal for the duration of the Policy. We do not
anticipate that we will make a profit on these charges. The transfer charge will
not be imposed on transfers that occur as a result of Policy loans or the
exercise of conversion rights.
REDUCTION OF CHARGES
Any of the charges under the Policy, as well as the minimum Face Amount set
forth in this Prospectus, may be reduced because of special circumstances that
result in lower sales, administrative, or mortality expenses. For example,
special circumstances may exist in connection with group or sponsored
arrangements, sales to our policyholders or those of affiliated insurance
companies, or sales to employees or clients of members of our affiliated group
of insurance companies. The amount of any reductions will reflect the reduced
sales effort and administrative costs resulting from, or the different mortality
experience expected as a result of, the special circumstances. Reductions will
not be unfairly discriminatory against any person, including the affected Policy
owners and owners of all other policies funded by the Variable Account.
SALES CHARGE REFUND
During the first two Policy Years and during the first 24 Policy Months
following the effective date of any requested increase in Face Amount, we may be
required to refund a portion of the Contingent Deferred Sales Charge if you
surrender the Policy. This refund is called the Sales Charge Refund.
Any amount used in the calculation described below will be determined on the
effective date of surrender.
INITIAL FACE AMOUNT. If the Policy is surrendered during the first two
Policy Years, a Sales Charge Refund will be made to the extent that the total
sales charge deducted (which consists of the 2.50% sales charge deducted from
each premium payment and the Contingent Deferred Sales Charge) exceeds (i) 30%
of actual premium payments made during the first Policy Year up to the amount of
the Surrender Charge Guideline (see below) for the initial face amount, plus
(ii) 9% of any actual premium payments made that exceed (i). In addition, the
amount of the refund will never decrease as the result of the payment of a
premium. After the second Policy Year, there is no Sales Charge Refund with
respect to the initial Face Amount.
As described above, the Sales Charge Refund is calculated based on
percentages of premium payments. While the total sales charge deducted under the
Policy is not based solely on premium payments, it is possible to translate the
total sales charge into a percentage of premium payments. In general, the total
sales charge deducted (before calculating the Sales Charge Refund) will be 50%
of each premium payment until premium payments reach a certain level. The level
ranges from approximately 35% of a Surrender Charge Guideline for a male age 0,
up to approximately 115% of a Surrender Charge Guideline for a male age 40, and
down to approximately 45% of a Surrender Charge Guideline for a male age 75.
After premium payments reach this level, the total sales charge will equal 2.50%
of each additional premium payment. During the two Policy Years when the Sales
Charge Refund applies, however, the total sales charge will be limited to 30% of
actual first year premium payments up to the amount of a Surrender Charge
Guideline, 9% of actual premium payments until payments reach the level where
the total sales charge drops to 2.50%, and 2.50% of any additional premium
payments beyond that level. If you have any questions regarding the amount of
your Sales Charge Refund, please call us.
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<PAGE>
Due to the Sales Charge Refund, the total sales charge for the initial Face
Amount will be significantly less if a Policy is surrendered during the first
two Policy Years rather than shortly thereafter.
The Surrender Charge Guideline will equal the amount obtained by dividing
the Face Amount or the amount of the increase, as the case may be, by $1,000,
and multiplying the result by the applicable factor from Appendix E.
REQUESTED INCREASES IN FACE AMOUNT. If you cancel a requested increase in
Face Amount during the first 24 Policy Months following the increase (but after
the free look period -- see "Free Look and Conversion Rights -- Free Look
Rights"), and the Policy is surrendered at any time thereafter, a Sales Charge
Refund will be made to the extent that the total sales charge for the increase
(which consists of 2.50% of the premiums attributable to the increase and the
Contingent Deferred Sales Charge for the increase) exceeds (i) 30% of the
premiums attributable to the increase in the 12 Policy Months following the
increase up to the amount of the Surrender Charge Guideline for the increase
(see immediately preceding paragraph), plus (ii) 9% of any premiums attributable
to the increase that exceed (i). In addition, the amount of the refund will
never decrease as the result of the payment of a premium. This refund is only
available if the increase is cancelled within the 24 Policy Months following its
effective date, and the Policy is subsequently surrendered. No refund is
available if the increase is cancelled after the 24-month period.
Calculating total sales charge deducted for an increase as a percentage of
premiums attributable to the increase is, in general, the same as described
above for the initial Face Amount. Thus, due to the Sales Charge Refund, the
total sales charge for a requested increase in Face Amount may be significantly
less if the increase is cancelled during the 24-month period following the
increase rather than shortly thereafter. If you have any questions regarding the
amount of your Sales Charge Refund, please call us.
For the purposes of the preceding paragraph, the premiums attributable to
the increase will be determined as described in the section entitled "Deductions
and Charges -- Surrender Charge -- Calculation of Contingent Deferred Sales
Charge", which means that, in effect, a proportionate amount of the existing
Accumulation Value on the effective date of the increase will be deemed to be a
premium payment for the increase, and subsequent premium payments will be
prorated.
EFFECT OF SALES CHARGE REFUND. The Sales Charge Refund will be applied to
maintain the Policy in force when the Cash Surrender Value is insufficient to
cover the Monthly Deduction. If the remaining Sales Charge Refund (not already
applied to keep the Policy in force) is insufficient to cover the Monthly
Deduction, this remaining Sales Charge Refund may be applied for the grace
period under the Policy. See "Policy Lapse and Reinstatement". Any Sales Charge
Refund not so applied will be refunded to you upon the total surrender of the
Policy.
POLICY LAPSE AND REINSTATEMENT
LAPSE. Unlike traditional life insurance policies, the failure to make a
Planned Periodic Payment will not by itself cause the Policy to lapse. If the
Death Benefit Guarantee is not in effect, the Policy will lapse only if, as of
any Monthly Anniversary, the Cash Surrender Value plus any Sales Charge Refund
is less than the Monthly Deduction due, and a grace period of 61 days expires
without a sufficient payment. If (during the first two Policy Years or the first
24 Policy Months after a requested increase in Face Amount) there exists any
Sales Charge Refund (see "Sales Charge Refund") sufficient to supplement the
Cash Surrender Value so as to cover the Monthly Deduction, then the Sales Charge
Refund will be applied by us to keep the Policy in force. The amount of Sales
Charge Refund available for such application is reduced on each Monthly
Anniversary as so applied. Any payment made by you after we have kept the Policy
in force in this manner will first be used to reimburse us for the amount of
Sales Charge Refund so applied.
During the early Policy Years, the Cash Surrender Value (even when
supplemented by the Sales Charge Refund) will generally not be sufficient to
cover the Monthly Deduction, so that premium payments sufficient to maintain the
Death Benefit Guarantee will be required to avoid lapse. See "Death Benefit
Guarantee".
The Policy does not lapse, and the insurance coverage continues, until the
expiration of a 61-day grace period which begins on the date we send you written
notice indicating that the Cash Surrender
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<PAGE>
Value plus any Sales Charge Refund is less than the Monthly Deduction due. Our
written notice to you will indicate the amount of the payment required to avoid
lapse. Failure to make a sufficient payment within the grace period will result
in lapse of the Policy without value.
As discussed above, any Sales Charge Refund will be applied to keep the
Policy in force when the Cash Surrender Value is less than the Monthly
Deduction. When a total surrender of the Policy is requested after the start of
a grace period, any remaining Sales Charge Refund (not already applied to keep
the Policy in force) will be so applied for the grace period, and consequently
not refunded, unless the surrender request is received by us within 30 days
after we mail the grace period notice to you. If such a request is timely
received, you will be refunded an amount equal to any unapplied Sales Charge
Refund that existed as of the Monthly Anniversary on which the Cash Surrender
Value deficiency causing the grace period notice occurred, plus any unearned
prepaid loan interest as of such Monthly Anniversary.
If the Insured dies during the grace period, the proceeds payable will equal
the amount of the Death Benefit on the Valuation Date on or next following the
date of the Insured's death, reduced by any Loan Amount and any unpaid Monthly
Deductions.
If the Death Benefit Guarantee is in effect, we will not lapse the Policy.
See "Death Benefit Guarantee".
REINSTATEMENT. Reinstatement means putting a lapsed Policy back in force.
You may reinstate a lapsed Policy by written request any time within five years
after it has lapsed if it has not been surrendered for its Cash Surrender Value.
To reinstate the Policy and any riders you must submit evidence of
insurability satisfactory to us and you must pay a premium large enough to keep
the Policy in force for at least two months.
The Death Benefit Guarantee cannot be reinstated. See "Death Benefit
Guarantee".
SURRENDER BENEFITS
Subject to certain limitations, you may make a total surrender of the Policy
or a partial withdrawal of the Policy's Cash Surrender Value by sending us a
written request. The amount available for a total surrender or partial
withdrawal will be determined at the end of the Valuation Period during which
your written request is received. Any amounts payable from the Variable Account
upon total surrender or partial withdrawal will generally be paid within seven
days of receipt of your written request. Postponement of payments may, however,
occur in certain circumstances. See "General Provisions -- Postponement of
Payments".
TOTAL SURRENDER
By making a written request, you may surrender the Policy at any time for
its Cash Surrender Value plus any Sales Charge Refund. The Cash Surrender Value
is the Accumulation Value of the Policy reduced by any Surrender Charge, Loan
Amount and unpaid Monthly Deductions. If the Cash Surrender Value at the time of
a surrender exceeds $25,000, the written request must include a Signature
Guarantee. An illustration of Accumulation Values, Surrender Charges, Cash
Surrender Values, and Death Benefits assuming different levels of premium
payments and investment returns for selected Ages and Face Amounts, is shown in
Appendix C.
PARTIAL WITHDRAWAL
After the first Policy Year, you may also withdraw part of the Policy's Cash
Surrender Value by sending us a written request. If the amount being withdrawn
exceeds $25,000, the written request must include a Signature Guarantee. Only
one partial withdrawal is allowed in any Policy Year. We currently make a $10.00
charge for each partial withdrawal. This charge is guaranteed not to exceed
$25.00 for each partial withdrawal. See "Deductions and Charges -- Partial
Withdrawal and Transfer Charges". The amount of any partial withdrawal must be
at least $500 and, during the first 15 Policy Years, may not be more than 20% of
the Cash Surrender Value on the date we receive your written request.
Unless you specify a different allocation, we make partial withdrawals from
the Fixed Account and the Sub-Accounts of the Variable Account on a
proportionate basis based upon the Accumulation Value. These proportions will be
determined at the end of the Valuation Period during which your written request
is received. For purposes of determining these proportions, any outstanding Loan
Amount is first subtracted from the Fixed Accumulation Value.
EFFECT OF PARTIAL WITHDRAWALS. The Accumulation Value will be reduced by the
amount of any partial withdrawal. The Death Benefit will also be reduced by the
amount of the withdrawal, or, if the
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<PAGE>
Death Benefit is based on the corridor percentage of Accumulation Value (see
"Death Benefit -- Death Benefit Options"), by an amount equal to the corridor
percentage times the amount of the partial withdrawal.
If the Level Amount Option is in effect, the Face Amount will be reduced by
the amount of the partial withdrawal. When increases in the Face Amount have
occurred previously, we reduce the current Face Amount by the amount of the
partial withdrawal in the following order:
(a) The Face Amount provided by the most recent increase;
(b) The next most recent increases successively; and
(c) The Face Amount when the policy was issued.
(This assumption also applies to requested decreases in Face Amount -- see
"Death Benefit -- Requested Changes in Face Amount".) Thus, partial withdrawals
may affect the way in which the cost of insurance is calculated and the amount
of pure insurance protection under the Policy. See "Death Benefit -- Requested
Changes in Face Amount", "Deductions and Charges -- Monthly Deduction" and
"Death Benefit -- Insurance Protection".
We do not allow a partial withdrawal if the Face Amount after a partial
withdrawal would be less than the Minimum Face Amount (currently $25,000).
If the Variable Amount Option is in effect, a partial withdrawal does not
affect the Face Amount.
A partial withdrawal may also cause the termination of the Death Benefit
Guarantee because the amount of the partial withdrawal is deducted from the
total premiums paid in calculating whether sufficient premiums have been paid in
order to maintain the Death Benefit Guarantee.
Like partial withdrawals, Policy loans are a means of withdrawing funds from
the Policy. See "Policy Loans". A partial withdrawal or a Policy loan may have
tax consequences depending on the circumstances of such withdrawal or loan. See
"Federal Tax Matters -- Policy Proceeds".
TRANSFERS
You may transfer all or part of the Variable Accumulation Value between the
Sub-Accounts or to the Fixed Account subject to any conditions the Funds whose
shares are involved may impose. (Transfers to or from the Fixed Account are not
available for Policies issued in New Jersey.) Transfer requests must be in
writing unless you have completed a telephone transfer authorization form. You
may also direct us to automatically make periodic transfers under the Dollar
Cost Averaging or Portfolio Rebalancing services as described below.
To transfer all or part of the Variable Accumulation Value from a
Sub-Account, Accumulation Units are redeemed and their values are reinvested in
other Sub-Accounts, or the Fixed Account, as directed in your request. We will
effect transfers, and determine all values in connection with transfers, at the
end of the Valuation Period during which we receive your request, except as
otherwise specified for the Dollar Cost Averaging or Portfolio Rebalancing
services. With respect to future Net Premium payments, however, your current
premium allocation will remain in effect unless (i) you have requested the
Portfolio Rebalancing service, or (ii) you are transferring all of the Variable
Accumulation Value from the Variable Account to the Fixed Account in exercise of
conversion rights. See "Free Look and Conversion Rights -- Conversion Rights".
Transfers from the Fixed Account to the Variable Account are subject to the
following additional restrictions: (i) your transfer request must be postmarked
no more than 30 days before or after the Policy Anniversary in any year, and
only one transfer is permitted during this period, (ii) no more than 50% of the
Fixed Accumulation Value, less any Loan Amount, may be transferred unless the
balance, after the transfer, would be less than $1,000, in which event the full
Fixed Accumulation Value, less any Loan Amount, may be transferred, and (iii)
you must transfer at least the lesser of $500 or the total Fixed Accumulation
Value, less any Loan Amount. See Appendix A. Some of these restrictions may be
waived for transfers due to the Portfolio Rebalancing service.
TELEPHONE TRANSFER REQUESTS. You may request a transfer by telephone on any
Valuation Date after you complete a telephone transfer authorization form. If
you elect to complete the authorization form, you agree that we will not be
liable for any loss, liability, cost or expense when we act in accordance with
the telephone transfer instructions that are received and recorded on voice
recording equipment. If a telephone transfer request is later determined not to
have been made by you or was made without your authorization, and loss results
from such unauthorized transfer, you bear the risk of
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<PAGE>
this loss. We will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. In the event we do not employ such
procedures, we may be liable for any losses due to unauthorized or fraudulent
instructions. Such procedures may include, among others, requiring forms of
personal identification prior to acting upon telephone instructions, providing
written confirmation of such instructions, and/or tape recording telephone
instructions.
DOLLAR COST AVERAGING SERVICE. You may request this service if your Face
Amount is at least $100,000 and your Accumulation Value, less any Loan Amount,
is at least $5,000. If you request this service, you direct us to automatically
make specific periodic transfers of a fixed dollar amount from any of the
Sub-Accounts to one or more of the Sub-Accounts or to the Fixed Account. No
transfers from the Fixed Account are permitted under this service. Transfers of
this type may be made on a monthly, quarterly, semi-annual, or annual basis.
This service is intended to allow you to use "Dollar Cost Averaging", a long
term investment method which provides for regular investments over time. We make
no guarantees that Dollar Cost Averaging will result in a profit or protect
against loss. You may discontinue this service at any time by notifying us in
writing.
If you are interested in the Dollar Cost Averaging service you may obtain a
separate application form and full information concerning this service and its
restrictions from us or our registered representative.
If you are using the Dollar Cost Averaging service, this service will be
discontinued immediately (i) on receipt of any request to begin a Portfolio
Rebalancing service, (ii) if the Policy is in the grace period on any date when
Portfolio Rebalancing transfers are scheduled, or (iii) if the specified
transfer amount from any Sub-Account is more than the Accumulation Value in that
Sub-Account.
We reserve the right to discontinue, modify, or suspend this service. Any
such modification or discontinuation would not affect any Dollar Cost Averaging
service requests already commenced.
PORTFOLIO REBALANCING SERVICE. You may request this service if your Face
Amount is at least $200,000 and your Accumulation Value, less any Loan Amount,
is at least $10,000. If you request this service, you direct us to automatically
make periodic transfers to maintain your specified percentage allocation of
Accumulation Value, less any Loan Amount, among the Sub-Accounts of the Variable
Account and the Fixed Account; your allocation of future Net Premium payments
will also be changed to be equal to this specified percentage allocation.
Transfers made under this service may be made on a quarterly, semi-annual, or
annual basis. This service is intended to maintain the allocation you have
selected consistent with your personal objectives.
The Accumulation Value in each Sub-Account of the Variable Account and the
Fixed Account will grow or decline at different rates over time. Portfolio
Rebalancing will periodically transfer Accumulation Values from those accounts
that have increased in value to those accounts that have increased at a slower
rate or declined in value. If all accounts decline in value, it will transfer
Accumulation Values from those that have decreased less in value to those that
have decreased more in value. We make no guarantees that Portfolio Rebalancing
will result in a profit or protect against loss. You may discontinue this
service at any time by notifying us in writing.
If you are interested in the Portfolio Rebalancing service you may obtain a
separate application form and full information concerning this service and its
restrictions from us or our registered representative.
If you are using the Portfolio Rebalancing service, this service will be
discontinued immediately (i) on receipt of any request to change the allocation
of premiums to the Fixed Account and Sub-Account of the Variable Account, (ii)
on receipt of any request to begin a Dollar Cost Averaging service, (iii) upon
receipt of any request to transfer Accumulation Value among the accounts, or
(iv) if the policy is in the grace period or the Accumulation Value, less any
Loan Amount, is less than $7,500 on any Valuation Date when Portfolio
Rebalancing transfers are scheduled.
We reserve the right to discontinue, modify, or suspend this service. Any
such modification or discontinuation could affect Portfolio Rebalancing services
currently in effect, but only after 30 days notice to affected Policy owners.
TRANSFER LIMITS. We currently allow twelve transfers in a Policy Year,
although we reserve the right to limit you to no more than four transfers per
year. All transfers that are effective on the same Valuation Date will be
treated as one transfer transaction. Transfers made due to the Dollar Cost
Averaging or Portfolio Rebalancing services do not currently count toward the
limit on number of transfers.
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TRANSFER CHARGES. While there is currently no charge imposed on a transfer
we reserve the right to make a charge not to exceed $25.00 per transfer for the
duration of the Policy. We do not anticipate that we will make a profit on this
charge. See "Deductions and Charges -- Partial Withdrawal and Transfer Charges".
In no event, however, will any charge be imposed in connection with the exercise
of a conversion right or transfers occurring as the result of Policy loans. All
transfers are also subject to any charges and conditions imposed by the Fund
whose shares are involved. All transfers that are effective on the same
Valuation Date will be treated as one transfer transaction.
POLICY LOANS
GENERAL. As long as the Policy remains in effect, you may borrow money from
us at any time after the first Policy Year using the Policy as security for the
loan (except that in Indiana loans may be made during the first Policy Year).
You may not borrow at any time more than the Loan Value of the Policy, which is
equal to 75% of the Cash Value less the existing Loan Amount, except that in
Texas the percentage is 100% and in Alabama, Maryland and Virginia, the
percentage is 90%. If the Policy is in force as paid-up life insurance, the Loan
Value is equal to the Cash Value on the next Policy Anniversary less any
existing Loan Amount and loan interest to that date. Each Policy loan must be at
least $500, except in Connecticut it must be at least $200. After Age 65, we
currently allow 100% of the Cash Surrender Value to be borrowed.
Loan requests may be made in writing or by telephoning us on any Valuation
Date. Any loan request in excess of $25,000 will require a signature guarantee
and telephone loan requests cannot exceed $10,000. No election form is currently
required to make telephone loan requests. We will employ reasonable procedures
to confirm that loan requests made by telephone are genuine. In the event we do
not employ such procedures, we may be liable for any losses due to unauthorized
or fraudulent instructions. Such procedures may include, among others, requiring
forms of personal identification prior to acting upon telephone instructions,
providing written confirmations of such instructions and/or tape recording
telephone instructions.
Policy loans have priority over the claims of any assignee or other person.
A Policy loan may be repaid in whole or in part at any time on or before the
Insured reaches Age 95, while the Insured is living.
The loan proceeds will normally be paid to you within seven days after we
receive your request. Payment of loan proceeds to you may be postponed under
certain circumstances. See "General Provisions -- Postponement of Payments".
Payments made by you generally will be treated as premium payments, rather
than Policy loan repayments, unless you indicate that the payment should be
treated otherwise or unless we decide, at our discretion, to apply the payment
as a Policy loan repayment. As a result, unless you indicate that a payment is a
loan repayment, all payments you make to the Policy will generally be subject to
the Premium Expense Charge. See "Deductions and Charges -- Premium Expense
Charge".
The total of your outstanding Policy loans is called the "Loan Amount".
IMMEDIATE EFFECT OF POLICY LOANS. When we make a Policy loan, an amount
equal to the Policy loan (which includes interest payable in advance) will be
segregated within the Accumulation Value of your Policy and held in the Fixed
Account as security for the loan (this includes loans taken on policies issued
in New Jersey). As described below, you will pay interest to us on the Policy
loan, but we will also credit interest to you on the amount held in the Fixed
Account as security for the loan. The amount segregated in the Fixed Account as
security for the Policy loan will be included as part of the Fixed Accumulation
Value under the Policy, but will (as described below) be credited with interest
on a basis different from other amounts in the Fixed Account.
Unless you specify differently, amounts held as security for the Policy loan
will come proportionately from the Fixed Accumulation Value and the Variable
Accumulation Value (with the proportions being determined as described below).
Assets equal to the portion of the Policy loan coming from the Variable
Accumulation Value will be transferred from the Sub-Accounts of the Variable
Account to the Fixed Account, THEREBY REDUCING THE POLICY VALUE HELD IN THE
SUB-ACCOUNTS. These transfers are not treated as transfers for the purposes of
the transfer charge or the limit on the number of transfers.
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ILLUSTRATION OF DETERMINATION OF PROPORTIONS. The segregated amount that
will be security for a Policy loan will come from the Fixed Accumulation Value
and the Variable Accumulation Value in the same proportion that the sum of (a)
the Policy's Fixed Accumulation Value, less any existing Loan Amount, and (b)
the Policy's Variable Accumulation Value, bear to the Policy's total
Accumulation Value less any existing Loan Amount (determined, in each case, at
the end of the Valuation Period during which your request is received).
This can be illustrated as follows. Assume that the Fixed Accumulation Value
is $5,000 and the Variable Accumulation Value is $6,000, with Sub-Account XXX =
$2,000, and Sub-Account YYY = $4,000. Assume that the existing Loan Amount is
$1,000, and the new Policy loan request is $5,000. For purposes of determining
the proportions, we first subtract the existing Loan Amount from the Fixed
Accumulation Value, and then we add the Variable Accumulation Value, which in
our example would be ($5,000 - $1,000) + $6,000 = $10,000. The proportionate
percentages of the Policy loan coming from the Fixed Accumulation Value and the
Variable Accumulation Value are then determined as a percentage of this total,
which would be $4,000/$10,000 = 40% from the Fixed Accumulation Value, and
$6,000/$10,000 = 60% from the Variable Accumulation Value. The percentage
deducted from the Variable Accumulation Value would be distributed as follows:
$2,000/$10,000 = 20% from Sub-Account XXX; and $4,000/$10,000 = 40% from
Sub-Account YYY. The actual amounts coming from the various Accounts in
connection with the new $5,000 Policy loan would be 40% X $5,000 = $2,000 from
the Fixed Account; 20% X $5,000 = $1,000 from Sub-Account XXX; and 40% X $5,000
= $2,000 from Sub-Account YYY.
EFFECT ON INVESTMENT PERFORMANCE. Amounts coming from the Variable Account
as security for Policy loans will no longer participate in the investment
performance of the Variable Account. All amounts held in the Fixed Account as
security for Policy loans (that is, the Loan Amount) will only be credited with
interest at an effective annual rate currently equal to 5.50% (guaranteed to be
no less than 4.00%). NO ADDITIONAL INTEREST WILL BE CREDITED TO THESE AMOUNTS.
On the Policy Anniversary, any interest credited on these amounts will be
credited to the Fixed Account and the Variable Account according to the premium
allocation then in effect (see "Payment and Allocation of Premiums -- Allocation
of Premiums").
Although Policy loans may be repaid in whole or in part at any time before
the Insured's Age 95, Policy loans will permanently affect the Policy's
potential Accumulation Value. As a result, to the extent that the Death Benefit
depends upon the Accumulation Value (see "Death Benefit -- Death Benefit
Options"), Policy loans will also affect the Death Benefit under the Policy.
This effect could be favorable or unfavorable depending on whether the
investment performance of the assets allocated to the Sub-Account(s) is less
than or greater than the interest being credited on the assets transferred to
the Fixed Account while the loan is outstanding. Compared to a Policy under
which no loan is made, values under the Policy will be lower when such interest
credited is less than the investment performance of assets held in the
Sub-Account(s).
EFFECT ON POLICY COVERAGE. If, on any Monthly Anniversary, the Loan Amount
is greater than the Accumulation Value, plus any Sales Charge Refund, less the
then applicable Surrender Charge, we will notify you. If we do not receive
sufficient payment within 61 days from the date we send notice to you, the
Policy will lapse and terminate without value. Our written notice to you will
indicate the amount of the payment required to avoid lapse. The Policy may,
however, later be reinstated. See "Policy Lapse and Reinstatement".
A Policy loan may also cause termination of the Death Benefit Guarantee,
because the Loan Amount is deducted from the total premiums paid in calculating
whether sufficient premiums have been paid in order to maintain the Death
Benefit Guarantee. See "Death Benefit Guarantee".
Proceeds payable upon the death of the Insured will be reduced by any Loan
Amount.
INTEREST. The interest rate charged on Policy loans will be an annual rate
of 7.40%, payable in advance. After the tenth Policy Year, we will charge
interest at an annual rate of 5.21%, payable in advance, on that portion of your
Loan Amount that is not in excess of (a) the Accumulation Value, less (b) the
total of all premiums paid and all partial withdrawals. Any excess of this
amount will be charged interest at the annual rate of 7.40%.
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Interest is payable in advance (for the rest of the Policy Year) at the time
any Policy loan is made and at the beginning of each Policy Year thereafter (for
that entire Policy Year). If interest is not paid when due, it will be deducted
from the Cash Surrender Value as an additional Policy loan (see "Immediate
Effect of Policy Loans" above) and will be added to the existing Loan Amount.
Because we charge interest in advance, any interest that we have not earned
will be refunded to you upon lapse or surrender of the Policy or repayment of
the Policy Loan.
REPAYMENT OF LOAN AMOUNT. The Loan Amount may be repaid any time while the
Insured is living before the Insured reaches Age 95 (see "General Provisions --
Benefits at Age 95"). If not repaid, the Loan Amount will be deducted by us from
any amount payable under the Policy. As described above, unless you provide us
with notice to the contrary, any payments on the Policy will generally be
treated as premium payments, which are subject to the Premium Expense Charge,
rather than repayments on the Loan Amount. Any repayments on the Loan Amount
will result in amounts being reallocated from the Fixed Account and to the
Sub-Accounts of the Variable Account according to your current premium
allocation.
TAX CONSIDERATIONS. A Policy loan may have tax consequences depending on the
circumstances of the loan. See "Federal Tax Matters -- Policy Proceeds".
FREE LOOK AND CONVERSION RIGHTS
FREE LOOK RIGHTS
The Policy provides for two types of return or "free look" periods, one
after application for and issuance of the Policy and the other after any
requested increase in Face Amount.
AT INITIAL ISSUE. The Policy provides for an initial free look period during
which you have a right to return the Policy for cancellation and receive a
refund of all premiums paid. You must return the Policy to us or your agent and
ask us to cancel the Policy by the latest of:
- Midnight of the 20th day after receiving it;
- Midnight of the 20th day after a written Notice of Right of Withdrawal is
mailed or delivered to you; or
- Midnight of the 45th day after the date your application for the Policy is
signed.
FOLLOWING A REQUESTED INCREASE IN FACE AMOUNT. Any requested increase in
Face Amount is also subject to a free look period during which you have a right
to cancel the increase and receive a refund. You must notify us or your agent
and ask us to cancel the increase by the latest of:
- Midnight of the 20th day after receiving a new Policy Data Page;
- Midnight of the 20th day after a written Notice of Right of Withdrawal is
mailed or delivered to you; or
- Midnight of the 45th day after the date your request for the increase is
signed.
Upon requesting cancellation of the increase, you will receive a refund, if
you so request, or otherwise a restoration to the Policy's Accumulation Value
(allocated among the Fixed Account and the Sub-Accounts of the Variable Account
as if it were a Net Premium payment), in an amount equal to all Monthly
Deductions attributable to the increase in Face Amount, including rider costs
arising from the increase. This refund or credit will be made within seven days
after we receive the request for cancellation on the appropriate form. In
addition, the Surrender Charge will be adjusted so that it will be as though no
such increase in Face Amount had occurred. Premiums paid after an increase in
Face Amount will not be refunded following cancellation of the increase. If you
request an increase in Face Amount you should take this into account in deciding
whether to make any premium payments during the free look period for the
increase.
CONVERSION RIGHTS
CONVERSION RIGHTS. During the first two Policy Years and the first two years
following a requested increase in Face Amount, we are required to provide you
with an option to convert the Policy or any requested increase in Face Amount to
a life insurance policy under which the benefits do not vary with the investment
experience of the Variable Account. For policies issued in all states, except
Connecticut and New Jersey, this option is made available by permitting you to
transfer all or a part of your Variable
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Accumulation Value to the Fixed Account. For policies issued in Connecticut and
New Jersey, you may exchange this Policy for a different permanent fixed benefit
life insurance policy that is offered by us in those states. The two conversion
right options are discussed below.
GENERAL OPTION. In all states except Connecticut and New Jersey, you may
exercise your conversion right by transferring all or any part of your Variable
Accumulation Value to the Fixed Account. If, at any time during the first two
Policy Years or the first two years following a requested increase in Face
Amount, you request transfer from the Variable Account to the Fixed Account and
indicate that you are making the transfer in exercise of your conversion right,
the transfer will not be subject to the transfer charge and will not count
against the limit on the number of transfers. At the time of such transfer,
there is no effect on the Policy's Death Benefit. Face Amount, net amount at
risk, Rate Class(es) or Issue Age -- only the method of funding the Accumulation
Value under the Policy will be affected. See "Death Benefit", "Accumulation
Value" and Appendix A, "The Fixed Account".
If you transfer all of the Variable Accumulation Value from the Variable
Account to the Fixed Account and indicate that you are making this transfer in
exercise of your Conversion Right, we will automatically credit all future
premium payments on the policy to the Fixed Account unless you request a
different allocation.
CONNECTICUT AND NEW JERSEY. During the first two policy years and during the
first 24 months following a requested increase in Face Amount, you may convert
the Policy or the Face Amount increase to any fixed benefit whole life insurance
policy offered by us. No evidence of insurability will be required for the
conversion. In order to convert to a new policy, we must receive a written
conversion request; if the entire Policy is being converted, the Policy must be
surrendered to us; the conversion must be made while the Policy is in force; and
any outstanding Loan Amount must be repaid.
The new policy will have the same Issue Age and premium class as the Policy.
If the entire Policy is being converted, the effective date of the conversion
will be the date on which we receive both your written conversion request and
the Policy. If you are converting a Face Amount increase, the effective date of
the conversion will be the date on which we receive your written conversion
request.
On the effective date of the conversion, the new policy will have, at your
option, either:
(a) A death benefit which is equal to the Death Benefit of the Policy on
the effective date of the conversion, or in the case of a Face Amount
increase, a death benefit equal to the increase in Face Amount; or
(b) A net amount at risk which equals the Death Benefit of the Policy on
the effective date of the conversion, less the Accumulation Value on that
date, or in the case of a Face Amount increase, a net amount at risk which
equals the Face Amount increase on the effective date of conversion less the
Accumulation Value on that date which is considered to be part of the Face
Amount increase.
The conversion will be subject to an equitable adjustment in payments and
Policy values to reflect variances, if any, in the payments and Policy values
under the Policy and the new policy. An additional premium payment may be
required. The new Policy's provisions and charges will be the same as those that
would have been in effect had the new Policy been issued on the Policy Date.
INVESTMENTS OF THE VARIABLE ACCOUNT
There are currently seventeen investment alternatives available under the
Variable Account. Fidelity Management & Research Company is the investment
adviser for the five portfolios of VIPF and the four portfolios of VIPF II.
Northstar Investment Management Corporation is the investment adviser of the two
Northstar Funds. Putnam Management is the investment adviser for the six funds
of PCM. We reserve the right to establish additional Sub-Accounts of the
Variable Account, each of which could invest in a new Fund with a specified
investment objective.
The Funds currently offered are described below. A brief summary of
investment objectives is contained in the description of each Fund. In addition,
you should read the prospectuses of the Funds, which are combined with this
prospectus, for more detailed information and particularly, a more thorough
explanation of investment objectives, because several of the Funds and
portfolios may have objectives that are quite similar. There is a possibility
that one Fund might become liable for any misstatement, inaccuracy or incomplete
disclosure in another Fund's prospectus.
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The Fund shares may be available to fund benefits under both variable
annuity and variable life contracts and policies. This could, in the future,
result in an irreconcilable conflict between the interests of the holders of the
different types of variable contracts. The Funds have advised us that they will
monitor for such conflicts and will promptly provide us with information
regarding any such conflicts should they arise or become imminent and we will
promptly advise the Funds if we become aware of any such conflicts. If any such
material irreconcilable conflict arises we will arrange to eliminate and remedy
such conflict up to and including establishing a new management investment
company and segregating the assets underlying the variable policies and
contracts at no cost to the holders of the policies and contracts. For a brief
explanation of the conflicts that may be involved in such situations, refer to
the section entitled "FMR and Its Affiliates" in the VIPF and VIPF II
Prospectuses and the section entitled "Sales and Redemptions" in the PCM
Prospectus.
The Funds described below distribute dividends and capital gains. However,
distributions are automatically reinvested in additional Fund shares, at net
asset value. The Sub-Account receives the distributions which are then reflected
in the Unit Value of that Sub-Account. See "Accumulation Value".
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (VIPF)
VIPF is a mutual fund currently offering five investment portfolios, each
with a different investment objective.
MONEY MARKET PORTFOLIO seeks to obtain as high a level of current income as
is consistent with preserving capital and providing liquidity. The portfolio
will invest only in high-quality U.S. dollar denominated money market
instruments of domestic and foreign issuers. An investment in the portfolio is
not insured or guaranteed by the U.S. Government, and there can be no assurance
that the Portfolio will maintain a stable net asset value per share of $1.00.
HIGH INCOME PORTFOLIO seeks to obtain a high level of current income by
investing primarily in high-yielding, lower-rated fixed-income securities
(sometimes referred to as "junk bonds"), while also considering growth of
capital. Lower-rated fixed-income securities are considered speculative and
involve greater risk of default than higher-rated fixed-income securities and
are more sensitive to the issuer's capacity to pay. Consult the VIPF Prospectus
for further information on the risks associated with the portfolio's investment
in lower-rated fixed-income securities.
EQUITY-INCOME PORTFOLIO seeks 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 Composite Index of 500 Stocks.
GROWTH PORTFOLIO seeks to achieve capital appreciation. The portfolio
normally purchases common stocks, although its investments are not restricted to
any one type of security. Capital appreciation may also be found in other types
of securities, including bonds and preferred stocks.
OVERSEAS PORTFOLIO seeks long term growth of capital primarily through
investments in foreign securities. The Overseas Portfolio provides a means for
investors to diversify their own portfolios by participating in companies and
economies outside of the United States.
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (VIPF II)
VIPF II is a mutual fund currently offering five investment portfolios, each
with a different investment objective. Presently, the following four portfolios
are available under this Policy.
ASSET MANAGER PORTFOLIO seeks high total return with reduced risk over the
long-term by allocating its assets among domestic and foreign stocks, bonds and
short-term fixed-income instruments.
INVESTMENT GRADE BOND PORTFOLIO seeks as high a level of current income as
is consistent with the preservation of capital by investing in a broad range of
investment-grade fixed-income securities.
INDEX 500 PORTFOLIO seeks to provide investment results that correspond to
the total return (i.e., the combination of capital changes and income) of common
stocks publicly traded in the United States. In seeking this objective, the
portfolio attempts to duplicate the composition and total return of the Standard
& Poor's Composite Index of 500 Stocks while keeping transaction costs and other
expenses low. The portfolio is designed as a long-term investment option.
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CONTRAFUND PORTFOLIO seeks capital appreciation by investing in companies
believed to be undervalued due to an overly pessimistic appraisal by the public.
The portfolio invests primarily in common stock and securities convertible into
common stock, but it has the flexibility to invest in any type of security that
may produce capital appreciation.
NORTHSTAR/NWNL TRUST (NORTHSTAR)
Northstar is a diversified management investment company currently offering
four investment funds, each with a different investment objective. The following
two Northstar Funds are available under this Policy.
NORTHSTAR INCOME AND GROWTH FUND is a diversified portfolio with an
investment objective of seeking current income balanced with the objective of
achieving capital appreciation. This Fund will seek to achieve its objective
through investments in common and preferred stocks, convertible securities,
investment grade corporate debt securities and government securities, selected
for their prospects of producing income and capital appreciation.
NORTHSTAR MULTI-SECTOR BOND FUND is a diversified portfolio with an
investment objective of maximizing current income. This Fund will seek to
achieve its objective by investment in the following sectors of the fixed income
securities markets: (a) securities issued or guaranteed as to principal and
interest by the U.S. Government, its agencies, authorities or instrumentalities;
(b) investment grade corporate debt securities; (c) investment grade or
comparable quality debt securities issued by foreign corporate issuers, and
securities issued by foreign governments and their political subdivisions,
limited to 35% of assets determined at the time of investment; and (d) high
yield -- high risk fixed income securities of U.S. and foreign issuers, limited
to 50% of assets determined at the time of investment.
PUTNAM CAPITAL MANAGER TRUST (PCM)
PCM is a mutual fund currently offering eleven investment funds, each with a
different investment objective. Presently, only the following six funds are
available under this Policy.
PCM DIVERSIFIED INCOME FUND seeks high current income consistent with
capital preservation through U.S. government securities, high-yield higher risk
fixed income securities (commonly known as "junk bonds") and international fixed
income securities. Consult the PCM Prospectus for further information on the
risks associated with this Fund's investments in high-yield higher-risk fixed
income securities.
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 UTILITIES GROWTH AND INCOME FUND seeks capital growth and current income
by concentrating its investments in debt and equity securities issued by
companies in the public utilities industries.
PCM VOYAGER FUND seeks capital appreciation primarily from a portfolio of
common stocks which are believed to have potential for capital appreciation
which is significantly greater than that of market averages.
PCM ASIA PACIFIC GROWTH FUND seeks capital appreciation by investing
primarily in securities of companies located in Asia and in the Pacific Basin.
The Fund's investments will normally include common stocks, preferred stocks,
securities convertible into common stocks or preferred stocks, and warrants to
purchase common stocks or preferred stocks.
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.
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS
We reserve the right, subject to compliance with applicable law, to make
additions to, deletions from, or substitutions for the shares that are held by
the Variable Account or that the Variable Account may purchase. We reserve the
right to eliminate the shares of any of the Funds and to substitute shares of
another Fund or of another open-end, registered investment company, if the
shares of a Fund are no longer available for investment, or if in our judgment
further investment in any Fund should become inappropriate in view of the
purposes of the Variable Account. We will not substitute any shares attributable
to your interest in a Sub-Account of the Variable Account without notice and
prior approval of the SEC, to the extent required by the Investment Company Act
of 1940 or other
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applicable law. Nothing contained herein shall prevent the Variable Account from
purchasing other securities of other Funds or classes of policies, or from
permitting a conversion between Funds or classes of policies on the basis of
requests made by Policy owners.
We also reserve the right to establish additional Sub-Accounts of the
Variable Account, each of which would invest in a new Fund, or in shares of
another investment company, with a specified investment objective. New
Sub-Accounts may be established when, in our sole discretion, marketing needs or
investment conditions warrant, and any new Sub-Accounts will be made available
to existing Policy owners on a basis to be determined by us. We may also
eliminate one or more Sub-Accounts if, in our sole discretion, marketing, tax,
or investment conditions warrant.
In the event of any such substitution or change, we may make such changes in
this and other policies as may be necessary or appropriate to reflect such
substitution or change. If all or a portion of your investments are allocated to
any of the current funds that are being substituted for on the date such
substitution is announced, you may surrender the portion of the Accumulation
Value funded by such Fund(s) without payment of the associated Surrender Charge.
You may transfer the portion of the Accumulation Value affected without payment
of a Transfer Charge. If deemed by us to be in the best interests of persons
having voting rights under the Policies, the Variable Account may be operated as
a management company under the Investment Company Act of 1940, it may be
deregistered under that Act in the event such registration is no longer
required, or it may be combined with our other separate accounts.
VOTING RIGHTS
You have the right to instruct us how to vote the Fund shares attributable
to the Policy at regular meetings and special meetings of the Funds. We will
vote the Fund shares held in Sub-Accounts according to the instructions
received, as long as:
- The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940; and
- The assets of the Variable Account are invested in Fund shares.
If we determine that, because of applicable law or regulation, we do not
have to vote according to the voting instructions received, we will vote the
Fund shares at our discretion.
All persons entitled to voting rights and the number of votes they may cast
are determined as of a record date, selected by us, not more than 90 days before
the meeting of the Fund. All Fund proxy materials and appropriate forms used to
give voting instructions will be sent to persons having voting interests.
Any Fund shares held in the Variable Account for which we do not receive
timely voting instructions, or which are not attributable to Policy owners, will
be voted by us in proportion to the instructions received from all Policy owners
having a voting interest in the Fund. Any Fund shares held by us or any of our
affiliates in general accounts will, for voting purposes, be allocated to all
separate accounts having voting interests in the Fund in proportion to each
account's voting interest in the respective Fund, and will be voted in the same
manner as are the respective account's votes.
Owning the Policy does not give you the right to vote at meetings of our
stockholders.
DISREGARD OF VOTING INSTRUCTIONS. We may, when required by state insurance
regulatory authorities, disregard voting instructions if the instructions
require that the shares be voted so as to cause a change in the
subclassification or investment objective of any Fund or to approve or
disapprove an investment advisory contract for any Fund. In addition, we may
disregard voting instructions in favor of changes initiated by a Policy owner in
the investment policy or the investment adviser of any Fund if we reasonably
disapprove of such changes. A change would be disapproved only if the proposed
change is contrary to state law or prohibited by state regulatory authorities or
we determine that the change would have an adverse effect on the Variable
Account in that the proposed investment policy for a Fund may result in
speculative or unsound investments. In the event we do disregard voting
instructions, a summary of that action and the reasons for such action will be
included in the next annual report to owners.
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<PAGE>
GENERAL PROVISIONS
BENEFITS AT AGE 95
If the Insured is living at Age 95 and the Policy is in force, the Cash
Surrender Value of the Policy will automatically be applied to purchase single
premium paid-up life insurance, unless the Insured notifies us in writing on or
before attaining Age 95 that the Cash Surrender Value should be paid in cash.
OWNERSHIP
While the Insured is alive, subject to the Policy's provisions you may:
- Change the amount and frequency of premium payments.
- Change the allocation of premiums.
- Change the Death Benefit Option.
- Change the Face Amount.
- Make transfers between accounts.
- Surrender the Policy for cash.
- Make a partial withdrawal for cash.
- Receive a cash loan.
- Assign the Policy as collateral.
- Change the beneficiary.
- Transfer ownership of the Policy.
- Enjoy any other rights the Policy allows.
PROCEEDS
At the Insured's death, the proceeds payable include the Death Benefit then
in force:
- Plus any additional amounts provided by rider on the life of the Insured;
- Plus any Policy loan interest that we have collected but not earned;
- Minus any Loan Amount; and
- Minus any unpaid Monthly Deductions.
BENEFICIARY
You may name one or more beneficiaries on the application when you apply for
the Policy. You may later change beneficiaries by written request. If no
beneficiary is surviving when the Insured dies, the Death Benefit will be paid
to you, if surviving, or otherwise to your estate.
POSTPONEMENT OF PAYMENTS
Payments from the Variable Account for Death Benefits, cash surrender,
partial withdrawal, or loans will generally be made within seven days after we
receive all the documents required for the payments.
We may, however, delay making a payment when we are not able to determine
the Variable Accumulation Value because (i) the New York Stock Exchange is
closed, other than customary weekend or holiday closings, or trading on the New
York Stock Exchange is restricted by the SEC, (ii) the SEC by order permits
postponement for the protection of Policyholders, or (iii) an emergency exists,
as determined by the SEC, as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to determine the
value of the Variable Account's net assets. Transfers and allocation to and
against any Sub-Account of the Variable Account may also be postponed under
these circumstances.
Any of the payments described above which are made from the Fixed Account
may be delayed up to six months from the date we receive the documents required.
We will pay interest at an effective annual rate of 3.50% if we delay payment
more than 30 days. No additional interest will be credited to any delayed
payments. The time a payment from the Fixed Account may be delayed and the rate
of interest paid on such amounts may vary among states.
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SETTLEMENT OPTIONS
Settlement Options are ways you can choose to have the Policy's proceeds
paid. These options apply to proceeds paid:
- At the Insured's death.
- On total surrender of the Policy.
The proceeds are paid to one or more payees. The proceeds may be paid in a
lump sum or may be applied to one of the following Settlement Options. A
combination of options may be used. At least $2,500 must be applied to any
option for each payee under that option. Under an installment Option, each
payment must be at least $25.00. We may adjust the interval to make each payment
at least $25.00.
Proceeds applied to any Option no longer earn interest at the rate applied
to the Fixed Account or participate in the investment performance of the Funds.
Option 1 -- Proceeds are left with us to earn interest. Withdrawals and any
changes are subject to our approval.
Option 2 -- Proceeds and interest are paid in equal installments of a
specified amount until the proceeds and interest are all paid.
Option 3 -- Proceeds and interest are paid in equal installments for a
specified period until the proceeds and interest are all paid.
Option 4 -- The proceeds provide an annuity payment with a specified number
of months "certain". The payments are continued for the life of the primary
payee. If the primary payee dies before the certain period is over, the
remaining payments are paid to a contingent payee.
Option 5 -- The proceeds provide a life income for two payees. When one
payee dies, the surviving payee receives two-thirds of the amount of the
joint monthly payment for life.
Option 6 -- The proceeds are used to provide an annuity based on the rates
in effect when the proceeds are applied. We do not apply this Option if a
similar option would be more favorable to the payee at that time.
INTEREST ON SETTLEMENT OPTIONS. We base the interest rate for proceeds
applied under Options 1 and 2 on the interest rate we declare on funds that we
consider to be in the same classification based on the Option, restrictions on
withdrawal, and other factors. The interest rate will never be less than an
effective annual rate of 3.50%.
In determining amounts to be paid under Options 3 and 4, we assume interest
at an effective annual rate of 3.50%. Also, for Option 3 and "certain" periods
under Option 4, we credit any excess interest we may declare on funds that we
consider to be in the same classification based on the Option, restrictions on
withdrawal, and other factors.
INCONTESTABILITY
After the Policy has been in force during the Insured's lifetime for two
years from the Policy's Issue Date, we cannot claim the Policy is void or refuse
to pay any proceeds unless the Policy has lapsed.
If you make a Face Amount increase or a premium payment which requires proof
of insurability, the corresponding Death Benefit increase has its own two-year
contestable period measured from the date of the increase.
If the Policy is reinstated, the contestable period is measured from the
date of reinstatement with respect to statements made on the application for
reinstatement.
MISSTATEMENT OF AGE AND SEX
If the Insured's Age or sex or both are misstated (except where unisex rates
apply), the Death Benefit will be the amount that the most recent cost of
insurance would purchase using the current cost of insurance rate for the
correct Age and sex.
SUICIDE
If the Insured commits suicide, whether sane or insane, within two years of
the Policy's Issue Date, we do not pay the Death Benefit. Instead, we refund all
premiums paid for the Policy and any attached riders, minus any Loan Amounts and
partial withdrawals.
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<PAGE>
If you make a Face Amount increase or a premium payment which requires proof
of insurability, the corresponding Death Benefit increase has its own two-year
suicide limitation for the proceeds associated with that increase. If the
Insured commits suicide, whether sane or insane, within two years of the
effective date of the increase, we pay the Death Benefit prior to the increase
and refund the cost of insurance for that increase.
In Colorado and North Dakota, the suicide period is shortened to one year.
TERMINATION
The Policy terminates when any of the following occurs:
- The Policy lapses. See "Policy Lapse and Reinstatement".
- The Insured dies.
- The Policy is surrendered for its Cash Surrender Value.
- The Policy is amended according to the amendment provision described below
and you do not accept the amendment.
- The Policy matures. See "General Provisions -- Benefits at Age 95".
AMENDMENT
We reserve the right to amend the Policy in order to include any future
changes relating to the following:
- Any SEC rulings and regulations.
- The Policy's qualification for treatment as a life insurance policy under
the following:
-- The Internal Revenue Code of 1986, as amended.
-- Internal Revenue Service rulings and regulations.
-- Any requirements imposed by the Internal Revenue Service.
REPORTS
ANNUAL STATEMENT. We will send you an Annual Statement once each year,
showing the Face Amount, Death Benefit, Accumulation Value, Cash Surrender
Value, Loan Amount, premiums paid, Planned Periodic Premiums, interest credits,
partial withdrawals, transfers, and charges since the last statement.
Additional statements are available upon request. We may make a charge not
to exceed $50.00 for each additional Annual Statement you request.
PROJECTION REPORT. Upon request, we will provide you a report projecting
future results based on the Death Benefit Option you specify, the Planned
Periodic Premiums you specify, and the Accumulation Value of your Policy at the
end of the prior Policy Year. We may make a charge not to exceed $50.00 for each
Projection Report you request.
DIVIDENDS
The Policy does not entitle you to participate in our surplus. We do not pay
you dividends under the Policy.
The Sub-Account receives any dividends paid by the related Fund. Any such
dividend is credited to you through the calculation of the Sub-Account's daily
Unit Value.
COLLATERAL ASSIGNMENT
You may assign the benefits of the Policy as collateral for a debt. This
limits your rights to the Cash Surrender Value and the beneficiary's rights to
the proceeds. An assignment is not binding on us until we receive written
notice.
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OPTIONAL INSURANCE BENEFITS
The Policy can include additional benefits, in the form of riders to the
Policy, if our requirements for issuing such benefits are met. We currently
offer the following benefit riders:
ACCELERATED BENEFIT RIDER. Under certain circumstances a part of the Death
Benefit may be paid to you when the Insured has been diagnosed as having a
terminal illness. This Rider may not be available in all states. Ask your
registered representative about the availability of this Rider in your state.
See "Accelerated Benefit Rider".
ACCIDENTAL DEATH BENEFIT RIDER. Provides an additional benefit if the
Insured dies from an accidental injury.
ADDITIONAL INSURED RIDER. Provides a 10 year, guaranteed level premium and
level term coverage for the Insured, the Insured's spouse, or a child of the
Insured.
WAIVER OF MONTHLY DEDUCTION RIDER. The Monthly Deduction for the Policy is
waived while the Insured is totally disabled under the terms of the rider.
CHILDREN'S INSURANCE RIDER. Provides up to $10,000 of term life insurance on
the life of each of the Insured's children.
COST OF LIVING INCREASE RIDER. Provides optional increases in Face Amount on
the life of the Insured every two years based on the cost of living without
evidence of insurability.
WAIVER OF SPECIFIED PREMIUM RIDER. Contributes a specified amount of premium
to the Policy each month while the Insured is totally disabled under the terms
of the rider. This rider may not be available in all states. Ask your registered
representative about the availability of this rider in your state.
FEDERAL TAX MATTERS
The following discussion is not intended to be a complete description of the
tax status of the Policies. Rather, it provides information about how we believe
the tax laws apply in the most commonly occurring circumstances. The tax
treatment of certain aspects of the Policies, such as surrenders and partial
withdrawals, is uncertain or may be changed by regulations adopted in the
future. For these reasons, Policy owners are advised to consult with their own
tax advisers with regard to the tax implications of the Policies.
POLICY PROCEEDS
GENERAL. The Policy should qualify as a life insurance contract as long as
it satisfies certain definitional tests under Section 7702 and 817(d) of the
Internal Revenue Code (the "Code") and as long as the underlying investments for
the Contract satisfy diversification requirements under section 817(h) of the
Code (see "Diversification Requirements"). Section 7702 of the Code provides
that the Policy will so qualify if it satisfies a cash value accumulation test
or a guideline premium requirement and falls within a cash value corridor. The
qualification of the Policy under Section 7702 depends in part upon the Death
Benefit payable under the Policy at any time. To the extent a change in the
Policy, such as a decrease in Face Amount or a change in Death Benefit Option,
would cause the Policy not to qualify, we will not make the change. Also, if at
any time a premium is paid which would result in total premiums exceeding the
current maximum premiums allowed, we will only accept that portion of the
premium which would make total premiums equal the maximum (see "Payment and
Allocation of Premiums -- Amount and Timing of Premiums").
MODIFIED ENDOWMENT CONTRACTS. In 1988 Congress created a new classification
of life insurance policies known as "Modified Endowment Contracts". Policy
loans, partial surrenders and partial withdrawals of cash from a policy which is
classified as a Modified Endowment Contract are taxable as ordinary income to
the Policy owner. Additionally, taxable distributions, if made before the Policy
owner is 59 1/2, are subject to a Federal income tax penalty of 10%.
Modified Endowment Contract classification may be avoided by limiting the
amount of premiums paid under the Policy. If you contemplate a large premium
payment under this Policy, and you wish to avoid Modified Endowment Contract
classification, you may contact us in writing before making the payment and we
will tell you the maximum amount which can be paid into the Policy.
DIVERSIFICATION REQUIREMENTS. Flexible premium variable life insurance
policies such as these Policies will be treated as life insurance contracts
under the Code as long as the separate accounts
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<PAGE>
funding them are "adequately diversified" under section 817(h) of the Code and
regulations issued by the Treasury Department. If the Variable Account is
determined to be not adequately diversified, Policy owners in the Variable
Account will be treated as the owners of the underlying assets and thus
currently taxable on earnings and gains. The investment adviser of the
respective mutual fund investment options has responsibility for maintaining the
investment diversification required under the Code.
DEATH BENEFITS. The Death Benefit proceeds payable under either the Level
Amount Option or the Variable Amount Option will be excludable from the gross
income of the beneficiary under Section 101(a) of the Code.
TAXATION OF DISTRIBUTIONS
SURRENDERS AND PARTIAL WITHDRAWALS. A surrender or lapse of the Policy may
have tax consequences. Upon surrender, the owner will not be taxed on the Cash
Surrender Value except for the amount, if any, that exceeds the gross premiums
paid less the untaxed portion of any prior withdrawals. The amount of any Policy
loan will, upon surrender or lapse, be added to the Cash Surrender Value and
treated, for this purpose, as if it had been received. A loss incurred upon
surrender is generally not deductible. The tax consequences of a surrender may
differ if the proceeds are received under any income payment settlement option.
A complete surrender of the Policy will, and a partial withdrawal may, under
Section 72(e)(5) of the Code, be included in your gross income to the extent
that the distribution exceeds your investment in the Policy. Withdrawals or
partial surrenders generally are not taxable unless the total of such
withdrawals exceeds total premiums paid to the date of withdrawal less the
untaxed portion of any prior withdrawals. During the first 15 policy years,
however, an additional amount may be taxable if the partial surrender results in
or is necessitated by a reduction in benefits. A qualified tax adviser should be
consulted regarding the tax consequences of any surrender or partial withdrawal
during the first 15 policy years.
The increase in Accumulation Value of the Policy will not be included in
gross income unless and until there is a total surrender or partial withdrawal
under the Policy. A complete surrender of the Policy will, and a partial
withdrawal may, under Section 72(e)(5) of the Code, be included in your gross
income to the extent the distribution exceeds your investment in the Policy.
The Unemployment Compensation Amendments of 1992 require us to withhold
Federal income tax at the rate of 20% on most distributions from qualified
plans, unless the distribution is an "eligible rollover distribution" as defined
by the Unemployment Compensation Act of 1992 and the Policy owner files a
written request with us for a direct rollover to an individual retirement
account as described in 408(b) of the Code, or as applicable, to another
qualified plan or a Section 403(b) arrangement that accepts rollovers.
POLICY LOANS. Under Section 72(e)(5) of the Code, loans received under the
Policy will be generally recognized as loans for tax purposes and will not be
considered to be distributions subject to tax. Pursuant to Section 163 of the
Code, interest paid to us with respect to the loan may or may not be deductible,
depending upon a number of factors. If the Policy is a Modified Endowment
Contract, a Policy loan or assignment of any portion of the Accumulation Value
will be taxable in an amount equal to the lesser of the amount of the
loan/assignment or the excess of Accumulation Value over the Owner's investment
in the Policy. Due to the complexity of these factors, a Policy owner should
consult a competent tax adviser as to the deductibility of interest paid on any
Policy loans.
OTHER TAXES. Federal estate taxes and state and local estate, inheritance
and other taxes may become due depending on applicable law and your
circumstances or the circumstances of the Policy beneficiary if you or the
Insured dies. Any person concerned about the estate implications of the Policy
should consult a competent tax adviser.
TAXATION OF POLICIES HELD BY PENSION AND CERTAIN DEFERRED COMPENSATION PLANS
PENSION AND PROFIT-SHARING PLANS. If a Policy is purchased by a trust which
forms part of a pension or profit-sharing plan qualified under Section 401(a) of
the Code for the benefit of participants covered under the plan, the Federal
income tax treatment of such Policies will be somewhat different from that
described above. A competent tax adviser should be consulted on these matters.
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<PAGE>
DEFERRED COMPENSATION PLANS FOR PUBLIC EMPLOYEES AND EMPLOYEES OF TAX EXEMPT
ORGANIZATIONS. Section 457 of the Code permits state and local government
employers and tax exempt employers to establish deferred compensation plans for
eligible employees and independent contractors. Eligible plans limit the amount
of compensation which may be deferred. Distribution from eligible plans may
occur only upon the death of the employee, attainment of age 70 1/2, separation
from service or in the event of an unforseeable emergency. Amounts deferred may
be transferred directly to another eligible deferred compensation plan. The
employer will be the Owner and Beneficiary of all policies issued to an eligible
plan. Policies are subject to the claims of the employer's general creditors.
Death Benefit proceeds payable to the employer, some or all of which are
subsequently paid by the employer to the employee's beneficiary under the plan
will not be excludable from gross income under Section 101(a) or Section 101(b)
of the Code and will be taxable as ordinary income. An employee has no present
legal right or vested interest in such policies; an employee is entitled to
distributions only in accordance with eligible plan provisions.
TAXATION OF NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
We do not initially expect to incur any income tax burden upon the earnings
or the realized capital gains attributable to the Variable Account. Based on
this expectation, no charge is being made currently to the Variable Account for
Federal income taxes which may be attributable to the Account. If, however, we
determine that we may incur such tax burden, we may assess a charge for such
burden from the Variable Account.
We may also incur state and local taxes, in addition to premium taxes, in
several states. At present these taxes are not significant. If there is a
material change in state or local tax laws, charges for such taxes, if any,
attributable to the Variable Account, may be made.
OTHER CONSIDERATIONS
The foregoing discussion is general and is not intended as tax advice. Any
person concerned about these tax implications should consult a competent tax
adviser. This discussion is based on our understanding of the present Federal
income tax laws as they are currently interpreted by the IRS. No representation
is made as to the likelihood of continuation of these current laws and
interpretations. It should be further understood that the foregoing discussion
is not exhaustive and that special rules not described in this Prospectus may be
applicable in certain situations. Moreover, no attempt has been made to consider
any applicable state or other tax laws.
LEGAL DEVELOPMENTS REGARDING EMPLOYMENT -- RELATED BENEFIT PLANS
The Policy is based on actuarial tables which distinguish between men and
women and therefore provide different benefits to men and women of the same Age.
Employers and employee organizations should consider, in consultation with legal
counsel, the impact of the Supreme Court decision of July 6, 1983 in ARIZONA
GOVERNING COMMITTEE V. NORRIS. That decision stated that optional annuity
benefits provided under an employee's deferred compensation plan could not,
under Title VII of the Civil Rights Act of 1964, vary between men and women on
the basis of sex. Employers and employee organizations should also consider, in
consultation with legal counsel, the impact of Title VII generally, and
comparable state laws that may be applicable, on any employment-related
insurance or benefit plan for which a Policy may be purchased.
Because of the NORRIS decision, the charges under the Policy that vary
depending on sex may in some cases not vary on the basis of the Insured's sex.
Unisex rates to be provided by us will apply, if requested on the application,
for tax-qualified plans and those plans where an employer believes that the
NORRIS decision applies. In this case, references made to the mortality tables
applicable to this Policy are to be disregarded and substituted with an 80% male
20% female blend of the 1980 Commissioner's Standard Ordinary Smoker and
Non-Smoker Mortality Tables, Age Last Birthday.
DISTRIBUTION OF THE POLICIES
We intend to sell the Policies in all jurisdictions where we are licensed.
The Policies will be sold by licensed insurance agents who are also registered
representatives of broker-dealers registered with the SEC under the Securities
Exchange Act of 1934 who are members of the National Association of Securities
Dealers, Inc.
The Policies will be distributed by the general distributor, Washington
Square Securities, Inc., (WSSI), a Minnesota corporation, which is an affiliate
of ours. WSSI is a securities broker-dealer registered with the SEC and is a
member of the National Association of Securities Dealers, Inc. It is primarily a
mutual funds dealer and has dealer agreements under which it markets shares of
more than
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50 mutual funds. It also markets limited partnerships and other tax-sheltered or
tax-deferred investments, and acts as general distributor (principal
underwriter) for variable annuity products issued by us. The Policies may also
be sold through other broker-dealers authorized by WSSI and applicable law to do
so. Registered representatives of such broker-dealers may be paid on a different
basis than described below.
Registered representatives who sell the Policies will receive commissions
based on a commission schedule. In the first Policy Year, commissions generally
will be no more than 50% of the premiums paid up to the annualized Minimum
Monthly Premium, plus 2% of additional premiums. In any subsequent Policy Year,
commissions generally will be 2% of premiums paid in that year. Corresponding
commissions will be paid upon a requested increase in Face Amount. In addition,
a commission of .25% of the average monthly Accumulation Value during each
Policy Year may be paid. Further, registered representatives may be eligible to
receive certain overrides and other benefits based on the amount of earned
commissions.
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MANAGEMENT
DIRECTORS
<TABLE>
<CAPTION>
TERM PRINCIPAL OCCUPATION
EXPIRES AND BUSINESS EXPERIENCE
----------- ---------------------------------------------------------
<S> <C> <C>
R. Michael Conley 1997 Senior Vice President of ReliaStar Financial Corp. since
1991; Senior Vice President, Employee Benefits Division
of Northwestern National Life Insurance Company since
1986; President of NWNL Benefits Corporation since 1988;
Director of subsidiaries of ReliaStar Financial Corp.
John H. Flittie 1996 President and Chief Operating Officer of ReliaStar
Financial Corp. and Northwestern National Life Insurance
Company since 1993; Vice Chairman of United Services Life
Insurance Company and Bankers Security Life Insurance
Society since 1995; Senior Executive Vice President and
Chief Operating Officer of ReliaStar Financial Corp. and
Northwestern National Life Insurance Company from 1992 to
1993; Senior Executive Vice President from 1991 to 1992;
Executive Vice President and Chief Financial Officer from
1989 to 1991; Director of Community First BankShares,
Inc. and subsidiaries of ReliaStar Financial Corp.
Wayne R. Huneke 1998 Senior Vice President, Chief Financial Officer and
Treasurer of ReliaStar Financial Corp. and Northwestern
National Life Insurance Company since 1994; Vice
President, Treasurer and Chief Accounting Officer from
1990 to 1994; Director of subsidiaries of ReliaStar
Financial Corp.
William R. Merriam 1996 Senior Vice President, Life & Health Reinsurance of
Northwestern National Life Insurance Company since 1991;
Vice President from 1984 to 1991
Craig R. Rodby 1998 Senior Vice President, Financial Management of ReliaStar
Financial Corp. since 1994; President and Chief Executive
Officer of Northern Life Insurance Company from 1991 to
1994; President and Chief Operating Officer of Northern
Life Insurance Company from 1990 to 1991; Director of
subsidiaries of ReliaStar Financial Corp.
David H. Roe 1998 Senior Vice President of ReliaStar Financial Corp. since
1995; Vice Chairman & Chief Executive Officer of Bankers
Security Life Insurance Society since 1995; President and
Chief Executive Officer of United Services Life Insurance
Company since 1995; Chairman & Chief Executive Officer of
United Services Life Insurance Company and Bankers
Security Life Insurance Society from 1992 to 1995;
President and Chief Operating Officer of USLICO Corp.
from 1992 to 1995; President of United Services Life
Insurance Company from 1991 to 1992; Executive Vice
President and Chief Financial Officer, USAA from 1990 to
1991; Director of subsidiaries of ReliaStar Financial
Corp.
Robert C. 1997 Senior Vice President, Technology of ReliaStar Financial
Salipante Corp. and Northwestern National Life Insurance Company
since 1996; Senior Vice President, Individual Division of
Northwestern National Life Insurance Company since 1996;
Senior Vice President, Strategic Marketing and Technology
of ReliaStar Financial Corp. and Northwestern National
Life Insurance Company from 1994 to 1996; Senior Vice
President and Chief Financial Officer from 1992 to 1994;
Executive Vice President of Ameritrust Corporation from
1988 to 1992; Director of subsidiaries of ReliaStar
Financial Corp.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
TERM PRINCIPAL OCCUPATION
EXPIRES AND BUSINESS EXPERIENCE
----------- ---------------------------------------------------------
<S> <C> <C>
Royce N. Sanner 1996 Senior Vice President, General Counsel & Secretary of
ReliaStar Financial Corp. since 1989; Senior Vice
President, General Counsel & Secretary of Northwestern
National Life Insurance Company since 1983; Vice
President of Washington Square Securities, Inc. since
1983; Vice President, General Counsel and Secretary of
Bankers Security Life Insurance Society since 1995;
General Counsel of United Services Life Insurance Company
since 1995; General Counsel and Secretary of United
Services Life Insurance Company in 1995; Director of
subsidiaries of ReliaStar Financial Corp.
Donald L. Swanson 1997 Senior Vice President, Retirement Plan Division of
Northwestern National Life Insurance Company since 1993;
Vice President from 1990 to 1993
John G. Turner 1998 Chairman and Chief Executive Officer of ReliaStar
Financial Corp. and Northwestern National Life Insurance
Company since 1993; Chairman of United Services Life
Insurance Company and Bankers Security Life Insurance
Society since 1995; Chairman of Northern Life Insurance
Company since 1992; Chairman, President and Chief
Executive Officer of ReliaStar Financial Corp. and
Northwestern National Life Insurance Company in 1993;
President and Chief Executive Office from 1991 to 1993;
President and Chief Operating Officer from 1989 to 1991;
President and Chief Operating Officer of Northwestern
National Life Insurance Company from 1986 to 1991;
Director of subsidiaries of ReliaStar Financial Corp.
Steven W. Wishart 1996 Senior Vice President and Chief Investment Officer of
ReliaStar Financial Corp. since 1989; Senior Vice
President of Northwestern National Life Insurance Company
since 1981; President and Chief Executive Officer of
ReliaStar Investment Research, Inc. since 1996; President
of Washington Square Capital Inc. from 1981 to 1996;
President of WSCR, Inc. from 1986 to 1996; Director of
National Benefit Resources Group Services Inc. and
subsidiaries of ReliaStar Financial Corp.
</TABLE>
The Executive Committee and Finance Committee of our Board of Directors consists
of Directors Flittie, Huneke, Rodby, Roe, Salipante, Sanner and Turner.
EXECUTIVE OFFICERS
<TABLE>
<S> <C>
John G. Turner Chairman and Chief Executive Officer
John H. Flittie President and Chief Operating Officer
R. Michael Conley Senior Vice President -- Employee Benefits
Wayne R. Huneke Senior Vice President, Chief Financial Officer and
Treasurer
Robert C.
Salipante Senior Vice President -- Individual Insurance and
Technology
Royce N. Sanner Senior Vice President, General Counsel and Secretary
Steven W. Wishart Senior Vice President -- Investments and Pensions
Craig R. Rodby Senior Vice President -- Financial Management
</TABLE>
All of the foregoing executive officers have been officers or employees of
ours for the past five years, except Mr. Salipante and Mr. Rodby. Mr. Salipante
became employed with the Company on July 6, 1992. Prior to joining the Company,
Mr. Salipante was Executive Vice President of the Banking Services Group of
Ameritrust Corp. Mr. Rodby became employed with the Company in August, 1994.
Prior to joining the Company Mr. Rodby was President/Chief Executive Officer,
Northern Life Insurance Company, a subsidiary of the Company.
STATE REGULATION
We are subject to the laws of the State of Minnesota governing insurance
companies and to regulation and supervision by the Insurance Division of the
State of Minnesota. An annual statement in a prescribed form is filed with the
Insurance Division each year, and in each state we do business,
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<PAGE>
covering our operations for the preceding year and our financial condition as of
the end of that year. Our books and accounts are subject to review by the
Insurance Division and a full examination of our operations is conducted
periodically (usually every three years) by the National Association of
Insurance Commissioners. This regulation does not, however, involve supervision
or management of our investment practices or policies.
In addition, we are subject to regulation under the insurance laws of other
jurisdictions in which we operate.
We are also subject to supervision and verification by the State of
Minnesota regarding participating business allocated to the Participation Fund
Account, which was established in connection with the reorganization and
demutualization of the Company in 1989. The Participation Fund Account was
established for the purpose of maintaining the dividend practices relative to
certain policies previously issued by the Company's former Mutual Department.
The Participation Fund Account is not a separate account as described under
Minnesota Statutes Chapter 61A. An annual examination of the Participation Fund
Account is made by independent consulting actuaries representing the Insurance
Division of the State of Minnesota.
MASSACHUSETTS AND MONTANA RESIDENTS
All Policy provisions described in the prospectus that are based on the sex
of the Insured should be disregarded. This Policy will be issued on a unisex
basis.
References made to the mortality tables applicable to this Policy are to be
disregarded and substituted with an 80% male 20% female blend of the 1980
Commissioner's Standard Ordinary Smoker and Non-Smoker Mortality Tables, Age
Last Birthday.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party. We
are engaged in litigation of various kinds; however, our management does not
believe that any of this litigation is of material importance in relation to our
total assets.
BONDING ARRANGEMENTS
An insurance company blanket bond is maintained providing $25,000,000
coverage for our officers and employees and those of Washington Square
Securities, Inc., (WSSI), subject to a $500,000 deductible.
LEGAL MATTERS
Legal matters in connection with the Variable Account and the Policy
described in this Prospectus have been passed upon by James E. Nelson, Esquire,
Attorney for the Company.
EXPERTS
The financial statements of NWNL's Select*Life Variable Account as of
December 31, 1995 and for each of the three years then ended and the annual
financial statements of Northwestern National Life Insurance Company included in
this Prospectus have been audited by independent auditors, as stated in their
reports which are included herein, and have been so included in reliance upon
such reports given upon the authority of that firm as experts in accounting and
auditing.
Actuarial matters included in this Prospectus have been examined by Craig A.
Krogstad, F.S.A., M.A.A.A., as stated in the opinion filed as an exhibit to the
Registration Statement.
REGISTRATION STATEMENT CONTAINS FURTHER INFORMATION
A Registration Statement has been filed with the SEC under the Securities
Act of 1933 with respect to the Policies. This Prospectus does not contain all
information included in the Registration Statement, its amendments and exhibits.
For further information concerning the Variable Account, the Funds, the Policies
and us, please refer to the Registration Statement.
Statements in this Prospectus concerning provisions of the Policy and other
legal documents are summaries. Please refer to the documents as filed with the
SEC for a complete statement of the provisions of those documents.
Information may be obtained from the SEC's principal office in Washington,
D.C., for a fee it prescribes, or examined there without charge.
50
<PAGE>
FINANCIAL STATEMENTS
The financial statements for the Variable Account reflect the operations of
the Variable Account and its Sub-Accounts as of December 31, 1995 and for each
of the three years in the period then ended. Although the financial statements
are audited, the periods they cover are not necessarily indicative of the longer
term performance of the assets held in the Variable Account.
The financial statements of Northwestern National Life Insurance Company
which are included in this Prospectus should be distinguished from the financial
statements of the Variable Account and should be considered only as bearing upon
the ability of Northwestern National Life Insurance Company to meet its
obligations under the Policies. They should not be considered as bearing on the
investment performance of the assets held in the Variable Account.
51
<PAGE>
APPENDIX A
THE FIXED ACCOUNT
The Fixed Account consists of all of our assets other than those in our
separate accounts. We have complete ownership and control of all of the assets
of the Fixed Account.
Because of exemptions and exclusions contained in the Securities Act of 1933
and the Investment Company Act of 1940, the Fixed Account has not been
registered under these acts. Neither the Fixed Account nor any interest in it is
subject to the provisions of these acts and as a result the SEC has not reviewed
the disclosures in this Prospectus relating to the Fixed Account. However,
disclosures relating to the Fixed Account are subject to generally applicable
provisions of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
We guarantee both principal and interest on amounts credited to the Fixed
Account. We credit interest at an effective annual rate of at least 4%,
independent of the investment experience of the Fixed Account. From time to
time, we may guarantee interest at a rate higher than 4%.
ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF
4% PER YEAR WILL BE DETERMINED AT OUR SOLE DISCRETION. YOU ASSUME THE RISK THAT
INTEREST CREDITED TO THE FIXED ACCOUNT MAY NOT EXCEED THE MINIMUM GUARANTEE OF
4% FOR A GIVEN YEAR.
We do not use a specific formula for determining excess interest credits.
However, we consider the following:
- General economic trends,
- Rates of return currently available on our investments,
- Rates of return anticipated in our investments, regulatory and tax
factors, and
- Competitive factors.
We are not aware of any statutory limitations to the maximum amount of
interest we may credit and our Board of Directors has not set any limitations.
The Fixed Accumulation Value of the Policy is the sum of the Net Premiums
credited to the Fixed Account. It is increased by transfers and Loan Amounts
from the Variable Account, and interest credits. It is decreased by Monthly
Deductions and partial withdrawals taken from the Fixed Account and transfers to
the Variable Account. The Fixed Accumulation Value will be calculated at least
monthly on the monthly anniversary date.
You may transfer all or part of your Fixed Accumulation Value to the
Sub-Accounts of the Variable Account, subject to the following transfer
limitations:
- The request to transfer must be postmarked no more than 30 days before the
Policy Anniversary and no later than 30 days after the Policy Anniversary.
Only one transfer is allowed during this period.
- The Fixed Accumulation Value after the transfer must be at least equal to
the Loan Amount.
- No more than 50% of the Fixed Accumulation Value (minus any Loan Amount)
may be transferred unless the balance, after the transfer, would be less
than $1,000. If the balance would be less than $1,000, the full Fixed
Accumulation Value (minus any Loan Amount) may be transferred.
- You must transfer at least:
-- $500, or
-- the total Fixed Accumulation Value (minus any Loan Amount) if less
than $500.
We make the Monthly Deduction from your Fixed Accumulation Value in
proportion to the total Accumulation Value of the Policy.
The Surrender Charge described in the Prospectus applies to the total
Accumulation Value, which includes the Fixed Accumulation Value. If the Owner
surrenders the Policy for its Cash Surrender Value, the Fixed Accumulation Value
will be reduced by any applicable Surrender Charge, any Loan Amount and unpaid
Monthly Deductions applicable to the Fixed Account.
A-1
<PAGE>
APPENDIX B
CALCULATION OF ACCUMULATION VALUE
The Accumulation Value of the Policy is equal to the sum of the Variable
Accumulation Value plus the Fixed Accumulation Value.
VARIABLE ACCUMULATION VALUE
The Variable Accumulation Value is the total of your values in each
Sub-Account. The value for each Sub-Account is equal to:
1 multiplied by 2, where:
1
Is your current number of Accumulation Units (described below).
2
Is the current Unit Value (described below).
The Variable Accumulation Value will vary from Valuation Date to Valuation
Date (described below) reflecting changes in 1 and 2 above.
ACCUMULATION UNITS. When transactions are made which affect the Variable
Accumulation Value, dollar amounts are converted to Accumulation Units. The
number of Accumulation Units for a transaction is found by dividing the dollar
amount of the transaction by the current Unit Value.
The number of Accumulation Units for a Sub-Account increases when:
- Net Premiums are credited to that Sub-Account; or
- Transfers from the Fixed Account or other Sub-Accounts are credited to
that Sub-Account.
The number of Accumulation Units for a Sub-Account decreases when:
- You take out a Policy loan from that Sub-Account;
- You take a partial withdrawal from that Sub-Account;
- We take a portion of the Monthly Deduction from that Sub-Account; or
- Transfers are made from that Sub-Account to the Fixed Account or other
Sub-Accounts.
UNIT VALUE. The Unit Value for a Sub-Account on any Valuation Date is equal
to the previous Unit Value times the Net Investment Factor for that Sub-Account
(described below) for the Valuation Period (described below) ending on that
Valuation Date. The Unit Value was initially set at $10 when the Sub-Account
first purchased Fund shares.
NET INVESTMENT FACTOR. The Net Investment Factor is a number that reflects
charges to the Policy and the investment performance during a Valuation Period
of the Fund in which a Sub-Account is invested. If the Net Investment Factor is
greater than one, the Unit Value is increased. If the Net Investment Factor is
less than one, the Unit Value is decreased. The Net Investment Factor for a Sub-
Account is determined by dividing 1 by 2.
(1 DIVIDED BY 2), where:
1
Is the result of:
- The net asset value per share of the Fund shares in which the Sub-Account
invests, determined at the end of the current Valuation Period;
- Plus the per share amount of any dividend or capital gain distributions
made on the Fund shares in which the Sub-Account invests during the
current Valuation Period;
- Plus or minus a per share charge or credit for any taxes reserved which we
determine has resulted from the investment operations of the Sub-Account
and to be applicable to the Policy.
B-1
<PAGE>
2
Is the result of:
- The net asset value per share of the Fund shares held in the Sub-Account,
determined at the end of the last prior Valuation Period;
- Plus or minus a per share charge or credit for any taxes reserved for
during the last prior Valuation Period which we determine resulted from
the investment operations of the Sub-Account and was applicable to the
Policy.
VALUATION DATE; VALUATION PERIOD. A Valuation Date is each day the New York
Stock Exchange is open for trading or any other day on which there is sufficient
trading in a Fund's portfolio securities to materially affect the Unit Value in
the corresponding Sub-Account of the Variable Account. A Valuation Period is the
period between two successive Valuation Dates, commencing at the close of
business of a Valuation Date and ending at the close of business on the next
Valuation Date.
FIXED ACCUMULATION VALUE
The Fixed Accumulation Value on the Policy Date is your Net Premium credited
to the Fixed Account on that date minus the Monthly Deduction applicable to the
Fixed Accumulation Value for the first Policy Month.
After the Policy Date, the Fixed Accumulation Value is calculated as:
1 + 2 + 3 + 4 - 5 - 6, where:
1
Is the Fixed Accumulation Value on the preceding Monthly Anniversary, plus
interest from the Monthly Anniversary to the date of the calculation.
2
Is the total of your Net Premiums credited to the Fixed Account since the
preceding Monthly Anniversary, plus interest from the date premiums are credited
to the date of the calculation.
3
Is the total of your transfers from the Variable Account to the Fixed Account
since the preceding Monthly Anniversary, plus interest from the date of transfer
to the date of the calculation.
4
Is the total of your Loan Amounts transferred from the Variable Account since
the preceding Monthly Anniversary.
5
Is the total of your transfers to the Variable Account from the Fixed Account
since the preceding Monthly Anniversary, plus interest from the date of transfer
to the date of the calculation.
6
Is the total of your partial withdrawals from the Fixed Account since the
preceding Monthly Anniversary, plus interest from the date of withdrawal to the
date of the calculation.
If the date of the calculation is a Monthly Anniversary, we also reduce the
Fixed Accumulation Value by the applicable Monthly Deduction for the Policy
Month following the Monthly Anniversary.
The minimum interest rate applied in the calculation of the Fixed
Accumulation Value is an effective annual rate of 4%. Interest in excess of the
minimum rate may be applied in the calculation of your Fixed Accumulation Value
in a manner which our Board of Directors determines.
B-2
<PAGE>
APPENDIX C
ILLUSTRATION OF ACCUMULATION VALUES, SURRENDER CHARGES,
CASH SURRENDER VALUES, AND DEATH BENEFITS
The following tables illustrate how the Accumulation Values, Cash Surrender
Values, and Death Benefits of a Policy may change with the investment experience
of the Variable Account. The tables show how the Accumulation Values, Cash
Surrender Values, and Death Benefits of a Policy issued to an Insured of a given
Age (who pays the given Planned Periodic Premiums annually) would vary over time
if the investment return of the assets held in the Funds were a uniform, gross,
after-tax, annual rate of 0 percent, 6 percent or 12 percent.
The tables on pages C-2 through C-7 illustrate a Policy issued to a male Age
40, in a standard Rate Class and qualifying for non-smoker rates. The
Accumulation Values, Cash Surrender Values, and Death Benefits would be lower if
the Insured were in a substandard Rate Class or did not qualify for the
nonsmoker rates because the cost of insurance would be increased. The
Accumulation Values, Cash Surrender Values and Death Benefits would be different
from those shown if the gross annual investment returns averaged 0 percent, 6
percent, and 12 percent over a period of years, but fluctuated above and below
those averages for individual Policy Years.
Within the tables, the second and fifth columns illustrate the Accumulation
Value of the Policy over the designated period. The Accumulation Value is the
total amount that a Policy provides for investment at any time. The third and
sixth columns illustrate the Cash Surrender Value of a Policy over the
designated period. The Cash Surrender Value is equal to the Accumulation Value
less any Surrender Charges, Loan Amount (assumed to be zero in these
illustrations) and unpaid Monthly Deductions (also assumed to be zero). The
fourth and seventh columns illustrate the Death Benefit of a Policy over the
designated period. The second, third, and fourth columns assume that throughout
the life of the Policy, the monthly charge for the cost of insurance, the
Monthly Mortality and Expense Charge and the Monthly Administrative Charge are
based upon the maximums (i.e. guaranteed) permitted in the policy. The maximum
allowable cost of insurance rates are based on the 1980 Commissioners Standard
Ordinary Mortality Tables for Nonsmokers and Smokers. The fifth, sixth, and
seventh columns assume that the monthly charge for cost of insurance, the
Monthly Mortality and Expense Charge, and the Monthly Administrative Charge are
based on the current amounts expected to be charged. The Death Benefits also
vary between tables depending upon whether the Level Amount Death Benefit Option
(Tables at pages C-2 through C-4) or the Variable Amount Death Benefit Option
(Tables at pages C-5 through C-7) is illustrated.
The amounts shown for the Accumulation Values, Cash Surrender Values, and
Death Benefits reflect the fact that the net investment return of the
Sub-Accounts of the Variable Account is lower than the gross, after-tax return
on the assets held in the Funds as a result of the Funds' operating expenses.
The values shown take into account the daily total operating expenses paid by
the available portfolios of the VIPF, VIPF II, Northstar and PCM which together
are assumed to be at an average annual rate of % for all years. This figure
is derived based on an average of the Funds' current operating expenses net of
any limitations on such expenses paid by the Funds. Thus, the illustrated gross
annual investment rates of return of 0 percent, 6 percent, and 12 percent
correspond to approximate net annual rates of return of %, %, and %,
respectively.
The hypothetical values shown in the tables do not reflect any charges for
Federal income taxes attributable to the Variable Account because we do not
currently make any such charges. However, such charges may be made in the future
and, in that event, the gross annual investment return would have to exceed 0
percent, 6 percent, or 12 percent by an amount sufficient to cover the tax
charges in order to produce the Accumulation Values, Cash Surrender Values, and
Death Benefits illustrated. (See section entitled "Federal Tax Matters" in the
prospectus).
The tables illustrate the Policy values that would result based upon the
hypothetical rates of return if premiums are paid as indicated, if all Net
Premiums are allocated to the Variable Account, and if no Policy loans have been
made. The tables are also based on the assumptions that the Policy owner has not
requested an increase or decrease in the Face Amount, that no partial
withdrawals have been made, that no transfers have been made, and total
operating expenses of the Funds continue as anticipated. Actual results will
depend on the expenses and performance of the investment choice made by the
owner.
Upon request, we will provide a comparable illustration based upon the
proposed Insured's Age, sex, underwriting classification, the Face Amount and
Planned Periodic Premium schedule requested, and any available riders requested.
C-1
<PAGE>
APPENDIX D
MAXIMUM CONTINGENT DEFERRED SALES CHARGES
PER $1,000 OF FACE AMOUNT
<TABLE>
<CAPTION>
CHARGE PER $1,000 OF FACE
AMOUNT (INITIAL FACE AMOUNT OR
INSURED'S AGE AT POLICY AMOUNT OF REQUESTED INCREASE)
DATE OR EFFECTIVE DATE OF --------------------------------
INCREASE, AS APPROPRIATE MALE FEMALE
- --------------------------- --------------- ---------------
<S> <C> <C>
0 $ 1.00 $ 1.00
1 1.10 1.00
2 1.20 1.00
3 1.30 1.00
4 1.40 1.00
5 1.50 1.00
6 1.60 1.00
7 1.80 1.00
8 2.00 1.00
9 2.20 1.20
10 2.50 1.40
11 2.80 1.60
12 3.00 1.80
13 3.20 2.00
14 3.50 2.20
15 3.80 2.40
16 4.00 2.60
17 4.20 2.80
18 4.50 3.00
19 4.80 3.20
20 5.00 3.50
21 5.30 3.90
22 5.90 4.20
23 6.30 4.50
24 6.90 5.00
25 7.50 5.50
26 7.80 6.10
27 8.40 6.70
28 8.80 7.30
29 9.40 7.70
30 10.00 8.00
31 10.80 8.60
32 11.50 9.20
33 12.30 9.80
34 13.10 10.40
35 14.00 11.00
36 14.90 11.60
37 15.70 12.20
<CAPTION>
CHARGE PER $1,000 OF FACE
AMOUNT (INITIAL FACE AMOUNT OR
INSURED'S AGE AT POLICY AMOUNT OF REQUESTED INCREASE)
DATE OR EFFECTIVE DATE OF --------------------------------
INCREASE, AS APPROPRIATE MALE FEMALE
- --------------------------- --------------- ---------------
<S> <C> <C>
38 $ 16.80 $ 12.80
39 17.90 13.90
40 19.00 15.00
41 19.60 16.10
42 20.40 17.20
43 21.30 18.00
44 22.10 18.90
45 23.00 19.50
46 23.90 20.60
47 24.90 21.70
48 25.90 22.50
49 27.00 23.30
50 28.20 24.20
51 29.40 25.20
52 30.70 26.20
53 32.10 27.20
54 33.50 28.00
55 35.00 29.50
56 36.70 30.70
57 38.40 32.00
58 40.20 33.40
59 42.20 34.80
60 44.30 36.40
61 45.60 38.10
62 45.40 40.00
63 45.30 41.90
64 44.90 43.90
65 44.60 45.50
66 44.30 45.00
67 43.90 44.60
68 43.60 44.10
69 43.30 43.70
70 43.10 43.30
71 42.80 42.90
72 42.60 42.50
73 42.40 42.10
74 42.20 41.70
75 41.90 41.20
</TABLE>
D-1
<PAGE>
APPENDIX E
SURRENDER CHARGE GUIDELINE PER $1,000 OF FACE AMOUNT
The following table provides the Surrender Charge Guideline factors that are
used in determining the Sales Charge Refund during the first two Policy Years or
the first two years following a requested increase in Face Amount (see section
entitled "Sales Charge Refund" in Prospectus). The Surrender Charge Guideline
factors are based upon the provisions of Rule 6e-3(T) adopted by the Securities
and Exchange Commission.
<TABLE>
<CAPTION>
SURRENDER CHARGE GUIDELINE
PER $1,000 OF FACE AMOUNT
(INITIAL FACE AMOUNT OR AMOUNT
INSURED'S AGE AT POLICY OF REQUESTED INCREASE)
DATE OR EFFECTIVE DATE OF --------------------------------
INCREASE, AS APPROPRIATE MALE FEMALE
- --------------------------- --------------- ---------------
<S> <C> <C>
0 $ 5.97 $ 4.46
1 6.14 4.58
2 6.39 4.77
3 6.67 4.97
4 6.95 5.18
5 7.26 5.40
6 7.58 5.64
7 7.92 5.89
8 8.28 6.15
9 8.66 6.42
10 9.06 6.71
11 9.48 7.02
12 9.92 7.34
13 10.38 7.67
14 10.85 8.03
15 11.34 8.39
16 11.85 8.77
17 12.37 9.17
18 12.91 9.59
19 13.47 10.03
20 14.07 10.49
21 14.69 10.98
22 15.34 11.48
23 16.03 12.02
24 16.76 12.58
25 17.53 13.17
26 18.35 13.79
27 19.21 14.44
28 20.11 15.12
29 21.07 15.84
30 22.08 16.60
31 23.14 17.39
32 24.26 18.22
33 25.43 19.10
34 26.66 20.03
35 27.96 21.00
36 29.32 22.02
37 30.76 23.09
<CAPTION>
SURRENDER CHARGE GUIDELINE
PER $1,000 OF FACE AMOUNT
(INITIAL FACE AMOUNT OR AMOUNT
INSURED'S AGE AT POLICY OF REQUESTED INCREASE)
DATE OR EFFECTIVE DATE OF --------------------------------
INCREASE, AS APPROPRIATE MALE FEMALE
- --------------------------- --------------- ---------------
<S> <C> <C>
38 $ 32.26 $ 24.21
39 33.84 25.39
40 35.49 26.62
41 37.23 27.91
42 39.06 29.27
43 40.97 30.69
44 42.98 32.19
45 45.09 33.76
46 47.30 35.40
47 49.62 37.14
48 52.07 38.96
49 54.64 40.89
50 57.34 42.91
51 60.18 45.04
52 63.16 47.28
53 66.29 49.64
54 69.58 52.13
55 73.03 54.76
56 76.66 57.53
57 80.47 60.47
58 84.48 63.57
59 88.70 66.87
60 93.15 70.38
61 97.82 74.10
62 102.75 78.05
63 107.93 82.23
64 113.38 86.67
65 119.11 91.37
66 125.14 96.36
67 131.50 101.66
68 138.21 107.32
69 145.30 113.37
70 152.79 119.85
71 160.71 126.78
72 169.07 134.21
73 177.88 142.15
74 187.17 150.62
75 196.97 159.67
</TABLE>
E-1
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Registrant certifies that it meets all of the requirements of
effectiveness of this Amendment to the Registration Statement pursuant to Rule
485(a) under the Securities Act of 1933 and has caused this Amendment to the
Registration Statement to be signed on its behalf, in the City of Minneapolis
and State of Minnesota, on this 22nd day of February, 1996.
SELECT*LIFE VARIABLE ACCOUNT
(Registrant)
By NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
(Depositor)
By /s/ John G. Turner
-----------------------------------
John G. Turner, Chairman
and Chief Executive Officer
As required by the Securities Act of 1933 and the Investment Company Act of
1940, Depositor has caused this Amendment to the Registration Statement to be
signed on its behalf, in the City of Minneapolis and State of Minnesota, on
this 22nd day of February, 1996.
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
(Depositor)
By /s/ John G. Turner
-----------------------------------
John G. Turner, Chairman
and Chief Executive Officer
As required by the Securities Act of 1933, this Amendment to the Registration
Statement has been signed on this 22nd day of February, 1996 by the following
directors and officers of Depositor in the capacities indicated:
/s/ John G. Turner
- -------------------------- Chairman and Chief Executive Officer
John G. Turner
/s/ Wayne R. Huneke
- -------------------------- Senior Vice President
Wayne R. Huneke and Chief Financial Officer
(Principal Accounting Officer)
R. MICHAEL CONLEY CRAIG R. RODBY DONALD L. SWANSON
JOHN H. FLITTIE DAVID H. ROE JOHN G. TURNER
WAYNE R. HUNEKE ROBERT C. SALIPANTE STEVEN W. WISHART
WILLIAM R. MERRIAM ROYCE N. SANNER
*James E. Nelson, by signing his name hereto, does hereby sign this document on
behalf of each of the above-named directors of Northwestern National Life
Insurance Company pursuant to powers of attorney duly executed by such persons.
/s/ James E. Nelson
-----------------------------------
James E. Nelson, Attorney-In-Fact
<PAGE>
PART II
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment No. 4 to the Registration Statement comprises the
following papers and documents:
The facing sheet.
The general form of Prospectus, consisting of 56 pages.
Undertakings to file reports.* (Filed in Pre-Effective
Amendment No. 1 on September 14, 1993)
Representation pursuant to Paragraph (b)(13)(iii)(F) under
Rule 6e-3(T).* (Filed in Pre-Effective Amendment No. 1 on
September 14, 1993)
The signatures.
Written consents of the following persons:
1. James E. Nelson, Esquire - Filed as EX-99.2.
2. Actuary Consent - To be filed by Post-Effective Amendment.
3. Auditors' Consent - To be filed by Post-Effective Amendment.
The following exhibits:
1. The following exhibits correspond to those required by Paragraph A of
the instructions as to exhibits in Form N-8B-2:
A. (1) Resolutions of Board of Directors of Northwestern National Life
Insurance Company ("NWNL") establishing the Select*Life Variable
Account.* (Filed in Pre-Effective Amendment No. 1 on September
14, 1993)
(2) Not applicable.
(3) (a) General Distributor Agreement between Washington Square
Securities, Inc. and NWNL.* (Filed in Original S-6
Registration Statement on January 11, 1993)
(3) (b) Specimens of Selling Agreements.* (Filed in Post-Effective
Amendment No. 2 on February 23, 1995)
(4) Not applicable.
(5) (a) Form of Policy available (together with available Policy
riders).* (Filed in Original S-6 Registration Statement on
January 11, 1993)
(5) (b) Waiver of Specified Premium Rider.* (Filed in Post-Effective
Amendment No. 2 on February 23, 1995)
(5) (c) Accelerated Benefit Rider.
(5) (d) Connecticut Modification Rider.
(5) (e) Form of policy available in New Jersey.
(6) (a) Amended Articles of Incorporation of NWNL.* (Filed in Pre-
Effective Amendment No. 1 on September 14, 1993)
(6) (b) Amended By-Laws of NWNL.* (Filed in Pre-Effective Amendment
No. 1 on September 14, 1993)
(7) Not applicable.
(8) (a) Participation Agreement with Fidelity's Variable Insurance
Products Fund and Fidelity Distributors Corporation and
<PAGE>
Page 2
Amendments Nos. 1-6.* (Filed in Post-Effective Amendment
No. 3)
(8) (b) Participation Agreement with Fidelity's Variable Insurance
Products Fund II and Fidelity Distributors Corporation and
Amendments Nos. 1-6.* (Filed in Post-Effective Amendment No.
3)
(8) (c) Participation Agreement with Putnam Capital Manager Trust
and Putnam Mutual Funds Corp., and Amendment No. 1. (Filed
in Post-Effective Amendment No. 3)
(9) Not applicable.
(10) Policy Application Form.* (Filed in Original S-6 Registration
Statement on January 11, 1993)
2. Opinion and consent of James E. Nelson, Esquire, as to the legality of
the Securities being registered. (See EX-99.2.)
3. Not applicable.
4. Not applicable.
EX-99.C1. Auditors' Consent. (To be filed by Post-Effective Amendment.)
EX-99.C2. Not Applicable.
EX-99.C3. Not Applicable.
EX-99.C4. See EX-99.2.
EX-99.C5. Not Applicable.
EX-99.C6. Actuarial Opinion and Consent. (To be filed by Post-
Effective Amendment.)
EX-99.D1. Memorandum describing Northwestern National's issuance,
transfer, and redemption procedures for the Policies and
Northwestern National's procedure for conversion to a fixed
benefit policy.
EX-24. Powers of Attorney.
EX-27. Financial Data Schedule. (To be filed by Post-Effective
Amendment).
* Previously filed.
<PAGE>
EX-99.A5(c)
<TABLE>
<S> <C> <C>
ACCELERATED BENEFIT RIDER
This rider is a part of the base policy whose
number is shown below. If not shown below,
the Rider Data is shown on the Policy Data
Page.
- ---------------------------------------------------------------------------------------------------------------------
RIDER DATA BASE POLICY NUMBER
RIDER ISSUE DATE
RIDER EFFECTIVE DATE
- ---------------------------------------------------------------------------------------------------------------------
THIS IS A LIFE INSURANCE RIDER WHICH RIDER. BENEFIT PAYMENTS MAY AFFECT
PAYS ACCELERATED DEATH BENEFITS AT YOUR ELIGIBILITY TO RECEIVE MEDICAID
YOUR OPTION UNDER CONDITIONS SPECI- AND OTHER GOVERNMENT BENEFITS OR
FIED IN THIS RIDER. THIS RIDER IS NOT ENTITLEMENTS.
INTENDED TO PROVIDE HEALTH, NURSING
HOME, OR LONG-TERM CARE INSURANCE. BENEFITS PAID UNDER THIS RIDER MAY BE
CASH VALUES, LOAN VALUES, IF ANY, TAXABLE. YOU SHOULD CONSULT YOUR
AND DEATH BENEFITS WILL BE REDUCED PERSONAL TAX ADVISOR TO ASSESS THE
IF YOU RECEIVE BENEFITS UNDER THIS IMPACT OF THIS BENEFIT.
- ---------------------------------------------------------------------------------------------------------------------
DEFINITIONS THE INSURED The person insured under the base policy.
-------------------------------------------------------------------------------------------------
YOU, YOUR The current owner of the base policy.
-------------------------------------------------------------------------------------------------
WE, US, OUR Northwestern National Life Insurance Com-
pany at its Home Office in Minneapolis,
Minnesota.
-------------------------------------------------------------------------------------------------
WRITTEN, IN WRITING A written request or notice, signed and dated,
and received at our Home Office. The form
and content of the request or notice must be
acceptable to us. You may get forms for this
purpose from us or from an NWNL agent.
-------------------------------------------------------------------------------------------------
POLICY The base policy to which this rider is at-
tached, including riders attached at time of
issue and those agreed upon later.
-------------------------------------------------------------------------------------------------
ACCELERATED BENEFIT The amount we will pay to you as described
in this rider.
-------------------------------------------------------------------------------------------------
BENEFIT DATE The date on which we approve your written
request for an Accelerated Benefit.
-------------------------------------------------------------------------------------------------
ELIGIBLE DEATH BENEFIT The death benefit payable under the policy
and any riders by reason of death of the In-
sured, not reduced by policy loans, excluding
accidental death benefit riders, decreasing
term riders, and any death benefit that is
within five years of its expiry date on the
Benefit Date.
- ---------------------------------------------------------------------------------------------------------------------
LOGO NORTHWESTERN NATIONAL LIFE INSURANCE Executed at our
COMPANY Home Office
---------------------------------------------
Box 20 John H. Flittie President
Minneapolis ---------------------------------------------
Minnesota 55440 /s/ John H. Flittie
---------------------------------------------
Royce N. Sanner Secretary
---------------------------------------------
/s/ Royce N. Sanner
- ------------------ ---------------------------------------------
85-151 1 (9-95)
- ------------------ ------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
DEFINITIONS PHYSICIAN A doctor of medicine or osteopathy legally
(continued) authorized to practice medicine and surgery
by the state in which he or she performs such
function or action. This person may not be
you, the Insured, a beneficiary, or be related
to you, the Insured or a beneficiary under the
policy.
---------------------------------------------------------------------------------------------------
TERMINAL ILLNESS A non-correctable illness or physical condition
that, with a reasonable degree of medical
certainty, will result in the death of the In-
sured in less than 12 months from the date
of a written statement, in a form acceptable
to us, by a Physician.
- -----------------------------------------------------------------------------------------------------------------------
BENEFITS We will pay the Accelerated Benefit in a lump 1.
sum when we receive, during the lifetime of The maximum Accelerated Benefit is 50% of
the Insured, written proof that the Insured has the Eligible Death Benefit.
been diagnosed as having a Terminal Illness,
subject to the conditions and limitations de- 2.
scribed in this rider. The sum of the Accelerated Benefit under all
policies and riders issued by us on the life of
You may choose the amount of Accelerated the Insured may not exceed $250,000.
Benefit, subject to the following:
3.
The minimum Accelerated Benefit is
$10,000.
- ---------------------------------------------------------------------------------------------------------------------
CONDITIONS We will not pay the Accelerated Benefit until to any death benefit required to pay off the
we receive proof of the Insured's Terminal Ill- lien at the time of death. At our discretion,
ness and the following conditions have been we may require written consent from a
met: spouse, the Insured, other beneficiaries, or
any other person whom we believe has a po-
1. tential interest in the proceeds of the policy;
We have received your written request for an and
Accelerated Benefit in a form acceptable to
us; 3.
We have received an assignment form mak-
2. ing us assignee of the policy for the amount
We have received written consent from all of the lien.
irrevocable beneficiaries waiving their rights.
- ---------------------------------------------------------------------------------------------------------------------
LIMITATIONS We will not pay the Accelerated Benefit: 4.
If the policy is in force as either Extended
1. Term Insurance or Reduced Paid-Up Insur-
If either you or the Insured is required by a ance;
government agency to use the Accelerated
Benefit in order to apply for, obtain, or other- 5.
wise keep a government benefit or If the policy is legally or equitably assigned,
entitlement; except to us as security for the lien;
2. 6.
If either you or the Insured is required by law If any part of the death benefit under the
to use the Accelerated Benefit to meet the policy is contestable;
claims of creditors, whether in bankruptcy or
otherwise; 7.
If the policy is not in force or the death ben-
3. efit under the policy is not payable for any
If the Terminal Illness results from inten- reason;
tionally self-inflicted injuries;
- ---------------------------------------------------------------------------------------------------------------------
- ------------------ ------------------------
5155 2
- ------------------ ------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
LIMITATIONS 8. 9.
(continued) If the amount of the Accelerated Benefit, plus If there has already been an Accelerated Ben-
the amount of all Accelerated Benefits on the efit paid on this policy through this Acceler-
Insured from all policies issued by us, ex- ated Benefit Rider.
ceeds $250,000; or
- ---------------------------------------------------------------------------------------------------------------------
EFFECT ON YOUR The Accelerated Benefit will first be used to est due. The remainder of the Accelerated
POLICY repay any outstanding policy loans and inter- Benefit will be paid to you.
-------------------------------------------------------------------------------------------------
BENEFITS PAID CREATE LIEN
The Accelerated Benefit plus accrued interest ited to the excess of the cash value of the
from the date of payment will be a lien policy over the amount of the lien;
against the policy and any riders that are part
of the Eligible Death Benefit. The initial 3.
amount of the lien will be the amount of the You may not make any changes to the policy
Accelerated Benefit, plus any premiums or which would reduce the proceeds payable at
payments due under the policy on the Benefit death without written permission from us.
Date, plus an administrative charge not to We reserve the right to require you to repay
exceed $300. all or part of the lien before you make any
changes to your policy; and
When there is a lien against your policy:
4.
1. Any premiums or other payments required
The amount payable at the death of the In- under the terms of the policy will continue to
sured under the policy will be reduced by the be due and payable. Any premiums or other
amount of the lien; payments required to keep the policy in force
which are not paid by you will be paid by us,
2. and the amount of any such payments will be
Your access to the cash value of the policy added to the amount of the lien. Interest will
through surrender, withdrawal, loan, or appli- accrue on amounts added to the lien.
cation of nonforfeiture provisions will be lim-
---------------------------------------------------------------------------------------------------
INTEREST RATE ON LIEN
Interest on the lien will accrue daily, and be The interest rate accrued on the portion of the
added to the amount of the lien. The maxi- lien which is equal to the cash value of the
mum interest rate used will not be more than policy on the Benefit Date will never be more
the greater of the following: than the policy loan interest rate, if any,
stated in the policy.
1.
The current yield on 90 day treasury bills; or You may repay all or any portion of the lien
during the lifetime of the Insured.
2.
The current maximum statutory adjustable The lien, including interest on the lien, and
policy loan interest rate. any additions to the lien, will be repaid out
of the proceeds of the policy.
- ---------------------------------------------------------------------------------------------------------------------
WRITTEN PROOF OF Proof of Terminal Illness includes a written You must obtain proof of the Insured's Ter-
TERMINAL ILLNESS statement, in a form acceptable to us, from a minal Illness at your own expense.
Physician. The written statement must state
that the Insured has a non-correctable illness We reserve the right to get a second opinion,
or physical condition that, with a reasonable at our expense, from a Physician we choose.
degree of medical certainty, will result in the We may rely on the statement of the Physician
death of the Insured in less than 12 months of our choice. The opinion of the Physician
from the date of the Physician's statement. we choose will control in the event of
The written statement must give the Physi- conflicting opinions.
cian's diagnoses of the non-correctable illness
or physical condition.
- ---------------------------------------------------------------------------------------------------------------------
- ------------------ ------------------------
85-149 3
- ------------------ ------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
TERMINATION This rider ends: 4.
When you ask us in writing to end this rider
1. and you repay any lien under this rider. In
When the Paid-Up Option of the policy is ex- this case, we may ask that you return the
ercised; policy and this rider so that we can endorse
them. This rider will end on the first Monthly
2. Anniversary Date after we receive your writ-
When the policy is surrendered or ends; ten request to end this rider.
3.
When the policy reaches its maturity date; or
- ---------------------------------------------------------------------------------------------------------------------
REINSTATEMENT If the policy lapses, you can reinstate this 1.
rider if: Give us proof of insurability for the Insured;
and
1.
This rider was in effect when the policy 2.
lapsed; and Pay a premium large enough to keep the pol-
icy in force for at least 6 months.
2.
You reinstate the policy. The policy may be reinstated without this
rider.
To reinstate this rider you must do both of
the following:
- ---------------------------------------------------------------------------------------------------------------------
AMENDMENTS We may amend this rider so that it is in your approval of these changes and obtain
compliance with all applicable laws, rules, approval from any appropriate regulatory au-
regulations, interpretations, holdings and or- thority.
ders. When required by law, we will obtain
- ---------------------------------------------------------------------------------------------------------------------
NONPARTICIPATING This rider does not entitle you to participate
in our surplus.
- ---------------------------------------------------------------------------------------------------------------------
GENERAL PROVISIONS All policy provisions apply to this rider, unless increase any cash, loan, paid-up insurance, or
changed by this rider. The Incontestability extended term insurance values of the base
Provision of the policy applies to this rider policy.
from the Rider Issue Date. This rider does not
- ---------------------------------------------------------------------------------------------------------------------
- ------------------ ------------------------
5156 4
- ------------------ ------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
MODIFICATION RIDER
This endorsement is a part of the base policy
whose number is shown below. If not shown
below, the Rider Data is shown on the Policy
Data Page.
- ---------------------------------------------------------------------------------------------------------------------
RIDER DATA BASE POLICY NUMBER
- ---------------------------------------------------------------------------------------------------------------------
The Conversion Right section of the General tions of the base policy are unchanged. This
Provisions of this policy is changed to read rider is attached to and forms a part of the
as shown below. All other terms and condi- base policy at its issue date.
- ---------------------------------------------------------------------------------------------------------------------
CONVERSION RIGHT During the first two policy years, you may increase, a net amount at risk which equals
"convert" this policy to any fixed benefit the Face Amount increase on the effective
whole life insurance policy issued by us in the date of the conversion less the Accumulation
state of Connecticut. Also, during the first Value on that date which is considered to be
24 months following the effective date of a part of the Face Amount increase.
Face Amount increase, you may "convert" the
Face Amount increase of this policy to any The conversion will be made upon the fol-
fixed benefit whole life insurance policy is- lowing:
sued by us in the state of Connecticut. The
new policy will be issued for the insured 1.
without proof of insurability. The premium We must receive a written conversion re-
class for the new policy will be the same as quest.
the premium class for this policy. If the entire
policy is being converted, the date of the new 2.
policy will be the Policy Date of this policy. If this entire policy is being converted, this
If a Face Amount increase is being converted, policy must be surrendered to us.
the date of the new policy will be the effec-
tive date of the Face Amount increase. 3.
The conversion must be made while this pol-
The death benefit of the new policy will be, icy is in force.
at your option, either:
4.
1. If this entire policy is being converted, you
A death benefit which is equal to the Death must repay any outstanding Loan Amount.
Benefit of this policy on the effective date of
the conversion, or in the case of a Face 5.
Amount increase, a death benefit equal to the If this entire policy is being converted, the
increase in Face Amount; or effective date of the conversion will be the
date on which we receive both your written
2. conversion request and this policy. If you are
A net amount at risk which equals the Death converting a Face Amount increase, the ef-
Benefit of this policy on the effective date of fective date of the conversion will be the date
the conversion, less the Accumulation Value on which we receive your written conversion
on that date, or in the case of a Face Amount request.
- ---------------------------------------------------------------------------------------------------------------------
LOGO NORTHWESTERN NATIONAL LIFE INSURANCE Executed at our
COMPANY Home Office
---------------------------------------------
Box 20 John H. Flittie President
Minneapolis ---------------------------------------------
Minnesota 55440 /s/ John H. Flittie
---------------------------------------------
Royce N. Sanner Secretary
---------------------------------------------
/s/ Royce N. Sanner
- ------------------ ---------------------------------------------
85-183 1
- ------------------ ------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
FLEXIBLE PREMIUM
VARIABLE LIFE
INSURANCE POLICY
------------------------------------------------- ---------------------------------------------
Variable and/or Fixed Death Benefit Guarantee
Accumulation Values ---------------------------------------------
------------------------------------------------- Death Benefit Options
Flexible Premiums Payable to the ---------------------------------------------
Insured's Age 95 Nonparticipating
------------------------------------------------- ---------------------------------------------
Adjustable Face Amount
-------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
NOTICE Right to Return Policy 2
Midnight of the 20th day after a written
Please read this policy carefully. If for any Notice of Right of Withdrawal is mailed or
reason you do not want it, you may return it to delivered to you; or
us or your agent and ask us to cancel this
policy. You must return it by the latest of: 3
Midnight of the 45th day after the date of
1 the application.
Midnight of the 20th day after you receive it;
We will then consider this policy void
from the start and refund to you all
premiums paid.
- ---------------------------------------------------------------------------------------------------------------------
We will pay the proceeds according to the THE PERIOD OF TIME THIS INSURANCE STAYS IN
Death Benefits portion of the Summary of FORCE WILL VARY DEPENDING ON THE
Benefits on page 3, if we receive written INVESTMENT PERFORMANCE OF THE VARIABLE
proof that the insured died while this ACCOUNT, INTEREST CREDITED TO THE FIXED
policy was in force. This policy also ACCOUNT, THE AMOUNT OF PREMIUMS YOU PAY,
provides other benefits and rights. We ANY PARTIAL WITHDRAWALS, LOANS, AND
issue this policy in consideration of the CHARGES MADE AGAINST THIS POLICY. IF YOU
application and payment of the initial PAY PREMIUMS SUFFICIENT TO MAINTAIN THE
premium. DEATH BENEFIT GUARANTEE, WE GUARANTEE THIS
POLICY WILL STAY IN FORCE DURING THE DEATH
THE AMOUNT OF THE PROCEEDS PAYABLE AT THE BENEFIT GUARANTEE PERIOD SHOWN ON THE
INSURED'S DEATH WILL BE AT LEAST EQUAL TO POLICY DATA PAGE.
THE FACE AMOUNT OF THE POLICY AS LONG AS
THIS POLICY IS IN FORCE AND THERE IS NO THE VARIABLE ACCUMULATION VALUE WILL
LOAN AMOUNT OR UNPAID MONTHLY DEDUCTIONS. INCREASE OR DECREASE REFLECTING THE
INVESTMENT PERFORMANCE OF THE VARIABLE
ACCOUNT.
- ---------------------------------------------------------------------------------------------------------------------
LOGO NORTHWESTERN NATIONAL LIFE INSURANCE Executed at our Home Office
COMPANY ---------------------------------------------
John H. Flittie President
Box 20 ---------------------------------------------
Minneapolis /s/ John H. Flittie
Minnesota 55440 ---------------------------------------------
Royce N. Sanner Secretary
---------------------------------------------
/s/ Royce N. Sanner
- ------------------ ---------------------------------------------
Page 1 85-174
- ------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
INDEX PAGE
<S> <C>
Accumulation Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Age and Sex. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Allocation of Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Annual Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Cash Surrender Value . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Cash Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Changes in Face Amount . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Changes in Death Benefit Option. . . . . . . . . . . . . . . . . . . . . . 7
Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Control of Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Conversion Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Death Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Death Benefit Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Fixed Accumulation Value . . . . . . . . . . . . . . . . . . . . . . . . . 10
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Incontestability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Monthly Deduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Net Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Nonforfeiture Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 14
Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Partial Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Payment of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Policy Data Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Policy Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Right to Return Policy . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Settlement Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Suicide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Summary of Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Variable Accumulation Value. . . . . . . . . . . . . . . . . . . . . . . . 11
Voting of Mutual Fund Shares . . . . . . . . . . . . . . . . . . . . . . . 25
Additional benefits and restrictions, if any, are listed on the Policy Data Page.
- -------------------------------------------------------------------------------------------
</TABLE>
- ---------------
PAGE 2 5171
- ---------------
<PAGE>
POLICY DATA PAGE DATE PRINTED
POLICY NUMBER: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
POLICY INFORMATION OWNER Steve Sltwo
INSURED Steve Sltwo
SEX, ISSUE AGE Male 41
POLICY DATE January 17, 1994
ISSUE DATE January 17, 1994
EFFECTIVE DATE January 17, 1994
------------------------------------------------------------
FACE AMOUNT
Initial $75,000
Current $75,000
Minimum $25,000
------------------------------------------------------------
DEATH BENEFIT OPTION Level Amount Option
CORRIDOR PERCENTAGE TABLE
Attained Percentage of Attained Percentage of
Age Accumulation Value Age Accumulation Value
0-40 250 60 130
45 215 65 120
50 185 70 115
55 150 75-90 105
95 100
- --------------------------------------------------------------------------------
PREMIUMS INITIAL PREMIUM $1,428.16
PLANNED PREMIUM
Amount $80.00
Frequency Monthly
PREMIUM CLASS Nonsmoker
Rating Factor 100 %
DEATH BENEFIT GUARANTEE PERIOD 24 Years
MINIMUM MONTHLY PREMIUM $105.01
------------------------------------------------------------
INITIAL PREMIUM ALLOCATION
NWNL SELECT*LIFE VARIABLE ACCOUNT
Fidelity Money Market Portfolio 10%
Fidelity High Income Portfolio 20%
Fidelity Equity-Income Portfolio 10%
Fidelity Overseas Portfolio 20%
Fidelity Growth Portfolio 10%
Fidelity Asset Manager Portfolio 10%
Fidelity Investment Grade Bond Port 10%
Fidelity Index 500 Portfolio 10%
Putnam Growth and Income Fund
Putnam Voyager Fund
Putnam Utilities Growth and Income
Putnam Diversified Income Fund
- --------------------------------------------------------------------------------
FORM NUMBERS
82-000
<PAGE>
POLICY DATA PAGE DATE PRINTED
POLICY NUMBER: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
FIXED ACCOUNT Minimum Annual Interest Rate 4.00%
INTEREST RATES Loan Interest Rate 7.40% payable in advance
Preferred Loan Interest Rate 5.21% payable in advance
- --------------------------------------------------------------------------------
PREMIUM EXPENSE CHARGE
Maximum Sales Charge 2.50%
Maximum Premium Tax Charge 2.50%
Maximum Premium Processing Charge $2.00
MONTHLY EXPENSE CHARGE
Maximum Monthly Administrative
Charge $12.00
Death Benefit Guarantee Charge None
Monthly Policy Charge None
Monthly Amount Charge None
Expense Risk Charge
Policy Years 1-10 .90%
Policy Years 11 and later .90%
------------------------------------------------------------
TABLE OF SURRENDER CHARGES
CONTINGENT DEFERRED ADMINISTRATIVE CHARGES
0 $375.00
1 $375.00 6 $337.50 11 $150.00
2 $375.00 7 $300.00 12 $112.50
3 $375.00 8 $262.50 13 $75.00
4 $375.00 9 $225.00 14 $37.50
5 $375.00 10 $187.50 15 $0.00
CONTINGENT DEFERRED SALES CHARGES
0 $1,470.00
1 $1,470.00 6 $1,323.00 11 $588.00
2 $1,470.00 7 $1,176.00 12 $441.00
3 $1,470.00 8 $1,029.00 13 $294.00
4 $1,470.00 9 $882.00 14 $147.00
5 $1,470.00 10 $735.00 15 $0.00
Surrender Charges grade uniformly by policy month between
the consecutive years shown above.
SURRENDER CHARGE GUIDELINE $2,792.25
(for the Sales Charge Refund)
- --------------------------------------------------------------------------------
82-000
<PAGE>
POLICY DATA PAGE DATE PRINTED
POLICY NUMBER: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
NONFORFEITURE ITEMS 1980 Commission's Standard Ordinary Mortality Table
for Nonsmokers, Age Last Birthday
Nonforfeiture Interest Rate 4.00%
Percent of Partial Withdrawal 20% per policy year in
policy years 2-15
100% thereafter
- --------------------------------------------------------------------------------
IMPORTANT NOTICE The Cash Surrender Value will be used to purchase paid-
up life at the insured's age 95. It is possible that
coverage will expire prior to that date where either no
premiums are paid following payment of the initial
premium, or subsequent premiums are insufficient to
continue coverage to such date.
82-000
<PAGE>
POLICY DATA PAGE DATE PRINTED
Policy Number: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
ADDITIONAL BENEFITS The cost of the Rider Benefits is included in the Monthly
Deduction for the Basic Benefits of the Policy.
---------------------------------------------------------
ACCIDENTAL DEATH BENEFIT RIDER
Premium Class Standard
Rating Factor 100%
Current ADB amount $5,000
Initial ADB amount $5,000
Cost of Rider's Benefits See Table of ADB
Rates/ $1,000.
Rider Effective Date January 17, 1994
Rider Issue Date January 17, 1994
Rider Expiry Date January 17, 2023
---------------------------------------------------------
WAIVER OF MONTHLY DEDUCTION RIDER
Premium Class Standard
Rating Factor 100%
Cost of Rider's Benefits See Table of Waiver
Rates.
Rider Effective Date January 17, 1994
Rider Issue Date January 17, 1994
Rider Expiry Date January 17, 2018
---------------------------------------------------------
INSURED'S COST OF LIVING INCREASE RIDER
Rider Issue Date January 17, 1994
Insured's CPI Increase Base $75,000
Premium Class Standard
Maximum Increase
Amount for the Insured $15,000
---------------------------------------------------------
ADDITIONAL INSURED RIDER
Additional Insured Steve Sltwo
Issue Age and Sex 41 Male
Premium Class Nonsmoker
Rating Factor 100%
AIR Face Amount $50,000
Monthly Guaranteed Cost
of Insurance Rate Per $1000
for Policy years 1-10 $0.2485
Rider Effective Date January 17, 1994
Rider Issue Date January 17, 1994
Rider Expiry Date January 17, 2004
---------------------------------------------------------
ADDITIONAL INSURED RIDER
Additional Insured Sally Sltwo
Issue Age and Sex 37 Female
Premium Class Nonsmoker
Rating Factor 100%
AIR Face Amount $25,000
Monthly Guaranteed Cost
of Insurance Rate Per $1000
for Policy years 1-10 $0.1805
Rider Effective Date January 17, 1994
Rider Issue Date January 17, 1994
Rider Expiry Date January 17, 2004
82-000
<PAGE>
POLICY DATA PAGE DATE PRINTED
Policy Number: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
ADDITIONAL BENEFITS The cost of the Rider Benefits is included in the Monthly
Deduction for the Basic Benefits of the Policy.
---------------------------------------------------------
CHILDREN'S INSURANCE RIDER
CIR Face Amount $5,000 per child
Cost of Rider's Benefits $7.44 per $1,000
of Face
Amount
Rider Effective Date January 17, 1994
Rider Issue Date January 17, 1994
Rider Expiry Date January 17, 2019
82-000
<PAGE>
POLICY DATA PAGE DATE PRINTED
Policy Number: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
TABLE OF MONTHLY ADB
RATES PER $1,000*
MONTHLY MONTHLY MONTHLY MONTHLY
ATTAINED MALE FEMALE ATTAINED MALE FEMALE
AGE ADB RATES ADB RATES AGE ADB RATES ADB RATES
5 .07 .07 40 .07 .07
6 .07 .07 41 .07 .07
7 .08 .08 42 .07 .07
8 .08 .08 43 .07 .07
9 .08 .08 44 .07 .07
10 .08 .08 45 .07 .07
11 .08 .08 46 .07 .07
12 .09 .09 47 .08 .08
13 .09 .09 48 .08 .08
14 .09 .09 49 .08 .08
15 .10 .10 50 .08 .08
16 .10 .10 51 .08 .08
17 .10 .10 52 .09 .09
18 .10 .10 53 .09 .09
19 .10 .10 54 .09 .09
20 .10 .10 55 .09 .09
21 .09 .09 56 .10 .10
22 .09 .09 57 .10 .10
23 .08 .08 58 .10 .10
24 .08 .08 59 .11 .11
25 .08 .08 60 .11 .11
26 .07 .07 61 .12 .12
27 .07 .07 62 .12 .12
28 .07 .07 63 .13 .13
29 .07 .07 64 .13 .13
30 .07 .07 65 .14 .14
31 .07 .07 66 .14 .14
32 .07 .07 67 .15 .15
33 .07 .07 68 .16 .16
34 .07 .07 69 .17 .17
35 .07 .07
36 .07 .07
37 .07 .07
38 .07 .07
39 .07 .07
* For Accidental Death Benefit riders in a rated premium class, the monthly
deduction rates are calculated by multiplying the above monthly rates by
the premium class rating factor shown on the policy data page.
<PAGE>
POLICY DATA PAGE DATE PRINTED
Policy Number: B9-999-999 April 1, 1994
- --------------------------------------------------------------------------------
OPTIONAL BENEFITS WAIVER OF SPECIFIED PREMIUM RIDER (WSP)
Rider Effective Date April 1, 1994
Rider Issue Date April 1, 1994
Rider Expiry Date April 1, 2024
Premium Class Male Non-smoker
Monthly Specified Premium $100
Maximum WSP Age 70
WSP Rate See Table of WSP
Rates
Rating Factor 100%
82-000 Page A
<PAGE>
<TABLE>
<CAPTION>
POLICY DATA PAGE DATE PRINTED
POLICY NUMBER: S7-500-977 July 26, 1994
- --------------------------------------------------------------------------------
TABLE OF MONTHLY WAIVER
RATES PER $1 OF MONTHLY DEDUCTION*
MONTHLY MONTHLY MONTHLY MONTHLY
ATTAINED MALE FEMALE ATTAINED MALE FEMALE
AGE WAIVER RATES WAIVER RATES AGE WAIVER RATES WAIVER RATES
<S> <C> <C> <C> <C> <C>
0 .03655 .05838 33 .04303 .06980
1 .03655 .05838 34 .04588 .07287
2 .04022 .06506 35 .04809 .07590
3 .04186 .06835 36 .04945 .08247
4 .04364 .07105 37 .05331 .09176
5 .04528 .07397 38 .05644 .09962
6 .04675 .07714 39 .05870 .10549
7 .04832 .07941 40 .06297 .11289
8 .04931 .08060 41 .06393 .11881
9 .04965 .08120 42 .06658 .12019
10 .04931 .08060 43 .06627 .12332
11 .04832 .07941 44 .06954 .13033
12 .04645 .07770 45 .07561 .14235
13 .04417 .07552 46 .08368 .15606
14 .04211 .07297 47 .09174 .17285
15 .04000 .06968 48 .10081 .19180
16 .03789 .06626 49 .11048 .21176
17 .03618 .06316 50 .12290 .23568
18 .03495 .06000 51 .13591 .26153
19 .03396 .05684 52 .14930 .28698
20 .03130 .04758 53 .16337 .31407
21 .03117 .04737 54 .17663 .34150
22 .03117 .05109 55 .19059 .36904
23 .03103 .05087 56 .20407 .39635
24 .03461 .05455 57 .21797 .42337
25 .03447 .05455 58 .23145 .44959
26 .03418 .05819 59 .24430 .47541
27 .03781 .05769 60 .16196 .23785
28 .03750 .06128 61 .12429 .18302
29 .04074 .06076 62 .09231 .13483
30 .04041 .06429 63 .06426 .09390
31 .04008 .06750 64 .04010 .05900
32 .04337 .06667
</TABLE>
* For Waiver of Monthly Deduction riders in a rated premium class, the monthly
deduction rates are calculated by multiplying the above monthly rate by the
premium class rating factor shown on the policy data page.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
POLICY DATA PAGE TABLE OF MONTHLY GUARANTEED COST
OF INSURANCE RATES PER $1,000
MALE - NONSMOKER
---------------------------------------------------------------------------------------------
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
--------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C>
20 .14013 45 .28804 70 3.09817
21 .13846 46 .31147 71 3.44161
22 .13596 47 .33657 72 3.83999
23 .13262 48 .36420 73 4.29329
24 .12928 49 .39435 74 4.79447
--------------------- ---------------------- -----------------------
25 .12511 50 .42870 75 5.33374
26 .12260 51 .46809 76 5.90739
27 .12093 52 .51338 77 6.51160
28 .12010 53 .56541 78 7.15074
29 .12010 54 .62336 79 7.84590
--------------------- ---------------------- -----------------------
30 .12093 55 .68807 80 8.62093
31 .12344 56 .75873 81 9.49889
32 .12678 57 .83367 82 10.50136
33 .13178 58 .91712 83 11.62822
34 .13763 59 1.01078 84 12.86210
--------------------- ---------------------- -----------------------
35 .14431 60 1.11555 85 14.17886
36 .15182 61 1.23232 86 15.56507
37 .16184 62 1.36708 87 17.00226
38 .17270 63 1.51991 88 18.48644
39 .18439 64 1.69009 89 20.04132
--------------------- ---------------------- -----------------------
40 .19859 65 1.87687 90 21.69371
41 .21363 66 2.07951 91 23.48857
42 .22951 67 2.29213 92 25.50430
43 .24707 68 2.53461 93 27.96193
44 .26630 69 2.79859 94 31.38386
--------------------- ---------------------- -----------------------
</TABLE>
- ------------
83-702
- ------------
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
POLICY DATA PAGE TABLE OF MONTHLY GUARANTEED COST
OF INSURANCE RATES PER $1,000
MALE - STANDARD
---------------------------------------------------------------------------------------------
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
--------------------- --------------------- -----------------------
<S> <C> <C> <C> <C> <C>
0 .21948 35 .22701 70 4.87787
1 .08589 36 .24372 71 5.31499
2 .08255 37 .26463 72 5.81208
3 .08088 38 .28804 73 6.36667
4 .07754 39 .31481 74 6.97905
--------------------- --------------------- -----------------------
5 .07337 40 .34578 75 7.63863
6 .06920 41 .37927 76 8.31871
7 .06503 42 .41613 77 9.00762
8 .06253 43 .45133 78 9.71026
9 .06170 44 .50080 79 10.45174
--------------------- --------------------- -----------------------
10 .06253 45 .54778 80 11.25817
11 .06753 46 .59648 81 12.15491
12 .07671 47 .64940 82 13.16081
13 .08922 48 .70657 83 14.26297
14 .10341 49 .76883 84 15.42768
--------------------- --------------------- -----------------------
15 .11842 50 .83788 85 16.61725
16 .13261 51 .91627 86 17.80318
17 .14347 52 1.00487 87 19.03928
18 .15182 53 1.10541 88 20.34824
19 .15683 54 1.21539 89 21.01372
--------------------- --------------------- -----------------------
20 .19358 55 1.33315 90 23.03012
21 .19358 56 1.45789 91 24.46831
22 .19024 57 1.58964 92 26.16956
23 .18690 58 1.72843 93 28.40686
24 .18189 59 1.87260 94 31.56339
--------------------- --------------------- -----------------------
25 .17604 60 2.04442
26 .17270 61 2.23291
27 .17103 62 2.44595
28 .17103 63 2.68460
29 .17353 64 2.94650
--------------------- ---------------------
30 .17771 65 3.22493
31 .18356 66 3.51222
32 .19108 67 3.82160
33 .20110 68 4.14189
34 .21280 69 4.49090
--------------------- ---------------------
</TABLE>
- ------------
83-703
- ------------
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
POLICY DATA PAGE TABLE OF MONTHLY GUARANTEED COST
OF INSURANCE RATES PER $1,000
FEMALE - NONSMOKER
---------------------------------------------------------------------------------------------
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
--------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C>
20 .08422 45 .25794 70 1.87772
21 .08589 46 .27550 71 2.08208
22 .08672 47 .29474 72 2.33335
23 .08839 48 .31481 73 2.63543
24 .09006 49 .33741 74 2.98461
--------------------- ---------------------- -----------------------
25 .09173 50 .36252 75 3.37628
26 .09423 51 .39016 76 3.80234
27 .09590 52 .42199 77 4.26157
28 .09840 53 .45719 78 4.76166
29 .10174 54 .49325 79 5.31946
--------------------- ---------------------- -----------------------
30 .10424 55 .53184 80 5.95868
31 .10758 56 .57045 81 6.70043
32 .11092 57 .60824 82 7.56415
33 .11509 58 .64604 83 8.55015
34 .12010 59 .68891 84 9.65170
--------------------- ---------------------- -----------------------
35 .12594 60 .73938 85 10.86110
36 .13429 61 .80167 86 12.17441
37 .14431 62 .87918 87 13.59464
38 .15516 63 .97448 88 15.12828
39 .16685 64 1.08174 89 16.79399
--------------------- ---------------------- -----------------------
40 .18105 65 1.19761 90 18.61343
41 .19609 66 1.31789 91 20.64005
42 .21113 67 1.44091 92 22.96852
43 .22617 68 1.56838 93 25.79734
44 .24122 69 1.71054 94 29.58621
--------------------- ---------------------- -----------------------
</TABLE>
- ------------
83-704
- ------------
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
POLICY DATA PAGE TABLE OF MONTHLY GUARANTEED COST
OF INSURANCE RATES PER $1,000
FEMALE - STANDARD
---------------------------------------------------------------------------------------------
ATTAINED ATTAINED ATTAINED
AGE RATE AGE RATE AGE RATE
--------------------- ---------------------- -----------------------
<S> <C> <C> <C> <C> <C>
0 .15683 35 .16769 70 2.47090
1 .07004 36 .18189 71 2.71222
2 .06670 37 .19859 72 3.00887
3 .06503 38 .21781 73 3.36322
4 .06420 39 .23871 74 3.76908
--------------------- ---------------------- -----------------------
5 .06253 40 .26379 75 4.21491
6 .06086 41 .29055 76 4.69167
7 .05919 42 .31733 77 5.19278
8 .05836 43 .34411 78 5.72587
9 .05753 44 .37090 79 6.31058
--------------------- ---------------------- -----------------------
10 .05669 45 .39937 80 6.97084
11 .05836 46 .42870 81 7.72700
12 .06086 47 .45887 82 8.59578
13 .06420 48 .49157 83 9.61111
14 .06837 49 .52764 84 10.72696
--------------------- ---------------------- -----------------------
15 .07253 50 .56625 85 11.93000
16 .07670 51 .60740 86 13.21417
17 .08004 52 .65445 87 14.57012
18 .08338 53 .70657 88 16.00842
19 .08588 54 .75958 89 17.53216
--------------------- ---------------------- -----------------------
20 .09757 55 .81430 90 19.25682
21 .09924 56 .86822 91 21.15691
22 .10174 57 .91880 92 23.31971
23 .10424 58 .96858 93 25.93788
24 .10675 59 1.02176 94 29.58621
--------------------- ---------------------- -----------------------
25 .10925 60 1.08512
26 .11342 61 1.16461
27 .11676 62 1.26705
28 .12093 63 1.39168
29 .12594 64 1.53097
--------------------- ----------------------
30 .13178 65 1.67817
31 .13679 66 1.82821
32 .14264 67 1.97342
33 .15015 68 2.12062
34 .15850 69 2.28097
--------------------- ----------------------
</TABLE>
- ------------
83-705
- ------------
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIVING BENEFITS
SUMMARY OF BENEFITS
While the insured is alive, subject to this pol- 6.
icy's provisions, you may: Surrender this policy for cash;
1. 7.
Change the amount and frequency of your Make a partial withdrawal for cash;
premium payments;
8.
2. Receive a cash loan;
Change the allocation of your premiums;
9.
3. Assign this policy as collateral;
Change the Face Amount;
10.
4. Change the beneficiary;
Change the Death Benefit Option;
11.
5. Transfer ownership; and
Make transfers between accounts;
12.
Enjoy any other rights this policy allows.
---------------------------------------------------------------------------------------------------
DEATH BENEFITS
At the insured's death, the proceeds payable Plus a refund of any policy loan interest we
include the Death Benefit then in force: have charged but not earned;
Plus any additional amounts provided by Minus any Loan Amount; and
rider on the life of the insured;
Minus any unpaid Monthly Deductions.
- ------------------------------------------------------------------------------------------------------------------------
THE CONTRACT This policy is a legal contract. Read your pol- Unless fraudulent, all statements made by or
icy carefully! You rely on us to provide its on behalf of anyone covered by this policy are
benefits; we rely on you to pay its premiums. representations and not warranties. No
The entire contract is this policy and all ap- statement can be used to cancel this policy
plications, Policy Data Pages, riders, and or can be used in our defense if we refuse to
amendments attached at time of issue or pay a claim, unless it is found in an applica-
agreed upon later. tion, rider, or amendment.
---------------------------------------------------------------------------------------------------
CHANGES
Policy changes must be in writing and signed agent or any other person may alter or change
by our President or Secretary, or one of our the terms and conditions of this policy.
Vice Presidents or Assistant Secretaries. No
- ------------------------------------------------------------------------------------------------------------------------
DEFINITIONS GENERAL DEFINITIONS
---------------------------------------------------------------------------------------------------
IN FORCE The terms of this policy are in effect.
---------------------------------------------------------------------------------------------------
THE INSURED The person upon whose life this policy is is-
sued. The Policy Data Page lists the insured.
---------------------------------------------------------------------------------------------------
PROCEEDS The amount we pay when the insured dies or
when this policy is surrendered.
---------------------------------------------------------------------------------------------------
WE, US, OUR Northwestern National Life Insurance Com-
pay at our Home Office in Minneapolis,
Minnesota.
- ------------------------------------------------------------------------------------------------------------------------
- -------------------- --------------------
84-667 3
- -------------------- --------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GENERAL DEFINITIONS
DEFINITIONS ---------------------------------------------------------------------------------------------------
(CONTINUED) WRITTEN, IN WRITING A written request or notice, signed and dated,
and received at our Home Office. The form
and content of the request or notice must be
acceptable to us.
---------------------------------------------------------------------------------------------------
YOU, YOUR The owner of this policy, as shown on the
Policy Data Page, unless changed as allowed
in this policy. The insured owns this policy
unless another owner is named.
- ------------------------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT A unit of measure used to determine the Var-
POLICY DEFINITIONS iable Accumulation Value.
---------------------------------------------------------------------------------------------------
ACCUMULATION VALUE The total amount that this Policy provides for
investment at any time. The Accumulation
Value is the total of the Fixed Accumulation
Value and the Variable Accumulation Value.
---------------------------------------------------------------------------------------------------
AGE 65, 75, AND 95 The policy anniversary on or next following
the insured's 65th, 75th, and 95th birthdays,
respectively.
---------------------------------------------------------------------------------------------------
CASH VALUE The Accumulation Value minus any Surrender
Charge.
---------------------------------------------------------------------------------------------------
CASH SURRENDER VALUE The amount payable to you if you surrender
this policy. It is the Cash Value minus any
Loan Amount and unpaid Monthly De-
ductions.
---------------------------------------------------------------------------------------------------
THE CODE The Internal Revenue Code of 1954, as
amended.
---------------------------------------------------------------------------------------------------
FACE AMOUNT The minimum Death Benefit payable as long
as this policy is in force. The initial Face
Amount is shown on the Policy Data Page.
You may change the Face Amount as de-
scribed in this policy.
---------------------------------------------------------------------------------------------------
FIXED ACCOUNT All our assets other than those allocated to
the Variable Account or any other separate
account. We have complete ownership and
control of the assets in the Fixed Account.
---------------------------------------------------------------------------------------------------
LOAN AMOUNT The sum of all unpaid policy loans.
---------------------------------------------------------------------------------------------------
MONTHLY ANNIVERSARY The same date in each succeeding month as
your Policy Date. Whenever your Monthly
Anniversary falls on a date other than a Val-
uation Date, the Monthly Anniversary will be
the next Valuation Date.
---------------------------------------------------------------------------------------------------
POLICY DATE The Policy Date is used in determining policy
years, policy months, Monthly Anniversaries,
and policy anniversaries. The Policy Data
Page shows the Policy Date.
- ------------------------------------------------------------------------------------------------------------------------
- -------------------- --------------------
4814 4
- -------------------- --------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUB-ACCOUNT A subdivision of the Variable Account. Each
POLICY DEFINITIONS Sub-account invests exclusively in the shares
(CONTINUED) of one of the mutual funds shown on the Pol-
icy Data Page, or added later.
---------------------------------------------------------------------------------------------------
VALUATION DATE The close of business each day that the New
York Stock Exchange is open for trading and
valuations have not been suspended by the
Securities and Exchange Commission. A Val-
uation Date may be any other day on which
there is sufficient trading in the mutual funds'
portfolio to materially affect the Accumulation
Unit Value in the corresponding Sub-account.
---------------------------------------------------------------------------------------------------
VALUATION PERIOD The period of time between a Valuation Date
and the next Valuation Date.
---------------------------------------------------------------------------------------------------
VARIABLE ACCOUNT Select*Life Variable Account, a separate in-
vestment account of ours. The Variable Ac-
count is used only to receive and invest Net
Premiums paid under our variable life insur-
ance policies. The assets of the Variable Ac-
count will be valued on each Valuation Date.
We have complete ownership and control of
the assets in the Variable Account.
Assets of the Variable Account equal to its li-
abilities will not be charged with liabilities
arising out of any other business we conduct.
However, we may transfer any assets which
exceed the liabilities of the Variable Account
to our Fixed Account.
The Variable Account is treated as a unit in-
vestment trust under federal securities laws.
It is registered with the Securities and Ex-
change Commission according to the Invest-
ment Company Act of 1940. It was
established under the State of Minnesota's
insurance laws. Any change in the investment
policy of the Variable Account must be ap-
proved by the Department of Commerce of
the State of Minnesota according to the ap-
proval process on file with the State.
- ------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT This policy has two Death Benefit Options. sured's attained age, as shown on the Policy
The Death Benefit Option in effect is shown Data Page.
on the Policy Data Page. All values are deter-
mined as of the Valuation Date on or next OPTION B (VARIABLE AMOUNT OPTION) - The
following the date of the insured's death. The Death Benefit is the greater of:
two Death Benefit Options are:
1.
OPTION A (LEVEL AMOUNT OPTION) - The Death The Face Amount plus the Accumulation
Benefit is the greater of: Value; or
1. 2.
The Face Amount; or The Accumulation Value multiplied by the
Corridor Percentage, according to the in-
2. sured's attained age, as shown on the Policy
The Accumulation Value multiplied by the Data Page.
Corridor Percentage, according to the in-
- ------------------------------------------------------------------------------------------------------------------------
- -------------------- --------------------
84-668 5
- -------------------- --------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
After the second policy year, you may request Benefit Option also change the Face Amount.
REQUESTED CHANGES IN an increase or decrease in your Face Amount (See Changes in Death Benefit Option.)
FACE AMOUNT by notifying us in writing. Changes in Death
---------------------------------------------------------------------------------------------------
INCREASES
Increases in Face Amount must be at least 1.
$5,000. You cannot increase the Face amount Midnight of the 20th day after you receive
after the insured's Age 75. the new Policy Data Page for the increase;
We may require written proof that the in- 2.
sured is still insurable before making an in- Midnight of the 20th day after a written No-
crease. An approved increase goes into effect tice of Right of Withdrawal is mailed or de-
on the Monthly Anniversary on or next fol- livered to you; or
lowing the date of the approval. At least two
years must lapse between increases. 3.
Midnight of the 45th day after the date of
An increase is subject to a free look period your written request for the increase.
during which you have the right to request
us to cancel the increase and receive a refund. If you cancel an increase during this period,
The request must be made by the latest of: we will restore the Accumulation Value by
refunding the amount of any deductions and
charges associated with the increase, or, upon
request, you can receive that amount in cash.
---------------------------------------------------------------------------------------------------
DECREASES
You cannot decrease the Face Amount below Class applies to the current Face Amount, the
the Minimum Face Amount shown on the Face Amount will be reduced in the following
Policy Data Page. If, following a requested order:
decrease in Face Amount, this Policy would
no longer qualify as life insurance under fed- 1.
eral tax law, we will limit the decrease to an The Face Amount provided by the most re-
amount that would maintain that qualifica- cent increase;
tion.
2.
Changes go into effect on the Monthly Anni- The next most recent increases successively;
versary on or next following the date we re- and
ceive your request. At least six months must
elapse between decreases. 3.
The initial Face Amount.
For the purpose of determining the cost of
insurance when more than one Premium
- ------------------------------------------------------------------------------------------------------------------------
- -------------------- --------------------
4815 6
- -------------------- --------------------
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REQUESTED CHANGES IN EFFECT OF REQUESTED CHANGES IN FACE
FACE AMOUNT AMOUNT
(CONTINUED)
A change in Face Amount will affect the Guarantee. A decrease in Face Amount will
Monthly Deduction because the cost of insur- reduce the Minimum Monthly Premium. We
ance and the Monthly Expense Charge are will send you a new Policy Data Page with
based on the Face Amount. The cost of cer- the new Minimum Monthly Premium.
tain rider benefits may also be affected.
An increase in Face Amount will increase
If the Death Benefit Guarantee is in effect, Surrender Charges. We will send you a new
we will calculate a new Minimum Monthly Policy Data Page showing the amount and
Premium for the Death Benefit Guarantee duration of the new Surrender Charges. De-
from the effective date of the change in Face creases in Face Amount do not reduce the
Amount. Additional premium payments may Surrender Charge.
be required to maintain the Death Benefit
- ------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DEATH You may request in writing to change the Option), the Face Amount is increased by an
BENEFIT OPTION Death Benefit Option. A change in Death amount equal to the Accumulation Value on
Benefit Option will also change the Face the effective date of the change. The change
Amount. If you change from Option A (Level is effective on the Monthly Anniversary on or
Amount Option) to Option B (Variable Amount next following the date we receive your re-
Option), the Face Amount is decreased by an quest. We do not require proof of insurability
amount equal to the Accumulation Value on for this increase.
the effective date of the change. The change
is effective on the Monthly Anniversary on or A change in Face Amount due to a change in
next following the date we receive your re- Death Benefit Option will affect the Monthly
quest. You cannot change the Death Benefit Deduction because the cost of insurance and
Option if the resulting Face Amount would the Monthly Expense Charge depend on the
fall below the Minimum Face Amount shown Face Amount. The cost of certain rider bene-
on the Policy Data Page. fits may also be affected.
If you change from Option B (Variable The Surrender Charges will not be affected
Amount Option) to Option A (Level Amount by a change in the Death Benefit Option.
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS There is no insurance under this policy until premiums are payable in advance of the pe-
the initial premium is paid. The initial pre- riod to which they apply.
mium is shown on the Policy Data Page. All
-----------------------------------------------------------------------------------------------------------
NET PREMIUM
When you pay a premium, we deduct the but will not exceed the Maximum Premium
Premium Expense Charge. The Premium Processing Charge shown on the Policy Data
Expense Charge is equal to 1, plus 2, plus 3, Page.
plus 4 (1 + 2 + 3 + 4), where:
The amount remaining after we have de-
1. ducted the Premium Expense Charge from a
Is the premium multiplied by the Sales premium is the Net Premium. The Net Pre-
Charge shown on the Policy Data Page; mium is credited to the Sub-accounts of the
Variable Account according to your allocation.
2.
Is the premium multiplied by the Premium The portion of the Net Premium allocated to
Tax Charge shown on the Policy Data Page; a Sub-account is invested at net asset value
in shares of a specified mutual fund. As of the
3. Policy Date, the mutual funds in which the
Is the premium multiplied by the Federal Tax Sub-accounts invest are listed on the Policy
Charge shown on the Policy Data Page; and Data Page. A Sub-account may be added later
or replaced according to the "Substitution of
4. Mutual Fund Shares" provision of this policy.
Is the Premium Processing Charge. The Pre-
mium Processing Charge is subject to change,
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------- ----------
85-169 7
- ---------- ----------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
PREMIUMS ALLOCATION OF PREMIUMS
(CONTINUED)
The initial allocation of premiums to the Sub- only affect premiums we receive on or after
accounts of the Variable Account is specified that date. You may allocate 100% to any ac-
on the application for this policy, and is count or divide your allocation in whole per-
shown on the Policy Data Page. You may centage points totaling 100%. For example,
change the allocation at any time by notifying you can select 33%, but not 33-1/3%. We
us in writing. Changes will not be effective reserve the right to adjust your allocation to
until the date we receive your notice, and will eliminate fractional percentages.
-----------------------------------------------------------------------------------------------------------
AMOUNT AND TIMING OF PREMIUM PAYMENTS
The amount and frequency of premium pay- the policy year. However, you have the right
ments will affect the Accumulation Value, the to pay the premium required to keep this
Cash Surrender Value, and how long the in- policy in force to the end of the policy year;
surance will remain in force.
3.
After the initial premium you may determine We may refuse to accept any premium less
the amount and timing of premium payments, than $25; and
within the following restrictions:
4.
1. While this policy is in force as paid-up life
We may require proof which satisfies us that insurance, you cannot pay additional premi-
the insured is still insurable if any premium, ums.
planned or unscheduled, would increase the
difference between the Death Benefit and the You may pay premiums by sending them to
Accumulation Value; the address shown below. Please include
your policy number. The current address for
2. payment is:
We reserve the right to refuse to accept any
premium which would disqualify your policy Northwestern National Life Insurance
for favorable tax treatment under the Code. Company
If premiums paid during any Policy Year ex- P.O. Box 802511
ceed the maximum permitted under the Code, Chicago, Illinois 60680-2511
we will return the excess premiums with in-
terest to you within 60 days after the end of Upon request, we will send you a receipt
signed by one of our officers.
-----------------------------------------------------------------------------------------------------------
PLANNED PERIODIC PREMIUMS
You may pay planned periodic premiums an- Policy Data Page. You may change the fre-
nually, semi-annually, quarterly, or, if you quency and amount of planned periodic pre-
choose, we can also deduct planned periodic miums by notifying us in writing of the
premiums from your bank account monthly. change. We reserve the right to limit the
We will notify you of your planned periodic amount of any increase.
premium at least once a year.
We may send you periodic premium notices
The amount and frequency of the initial depending on the frequency and method of
planned periodic premiums are shown on the premium payment you have chosen.
-----------------------------------------------------------------------------------------------------------
UNSCHEDULED ADDITIONAL PREMIUMS
Premiums, other than planned periodic pre- ance. We may limit the number and amount
miums, may be paid at any time except while of these additional payments. (See "Amount
this policy is in force as paid-up life insur- and Timing of Premium Payments" above.)
- ------------------------------------------------------------------------------------------------------------------------------------
- ---------- ----------
5168 8
- ---------- ----------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
DEATH BENEFIT The Death Benefit Guarantee Period is shown EXAMPLE: The Policy Date is January 1,
GUARANTEE on the Policy Data Page and begins on the 1993. The Minimum Monthly Premium is
Policy Date. The Death Benefit Guarantee is $100 per month. No partial withdrawals or
in effect during the Death Benefit Guarantee changes in Face Amount have occurred.
Period if, on each Monthly Anniversary since
the Policy Date, 1 is equal to or greater than Case 1. You pay $100 each month. The
2, where: Death Benefit Guarantee is maintained.
1. Case 2. You pay $1000 on January 1, 1993.
Is the sum of all premiums paid minus any The $1,000 will maintain the Death Benefit
partial withdrawals and any Loan Amount; Guarantee without your paying any additional
and premiums for the next 10 months (through
October 31, 1993). However, you must pay
2. at least $100 by November 1, 1993 to
Is the sum of Minimum Monthly Premiums maintain the Death Benefit Guarantee.
since the Policy Date, including the Minimum
Monthly Premium for the current Monthly On any Monthly Anniversary the minimum
Anniversary. amount necessary to avoid lapse is the lesser
of the amount due for the guarantee or the
If the Death Benefit Guarantee is in effect, amount necessary to cover the monthly de-
we guarantee that we will not lapse your duction. We will send you notice of the
policy, even if the Cash Surrender Value is amount necessary to cover the monthly de-
not sufficient to pay the Monthly Deduction duction. We will send you notice of the re-
that is due. Although we determine each quired payment. If you do not remit the
month whether or not you have made suffi- required payment within 61 days following
cient premium payments to maintain the the date we mail you written notice, the
Death Benefit Guarantee, you do not have to Death Benefit Guarantee is no longer in effect
pay premiums monthly. and cannot be reinstated.
-----------------------------------------------------------------------------------------------------------
POLICY CHANGES AFFECTING THE MINIMUM
MONTHLY PREMIUM
The Minimum Monthly Premium may be af- terminated. The new Minimum Monthly Pre-
fected by requested changes in Face Amount, mium will be shown on a new Policy Data
changes in the Death Benefit Option, and may Page and applies from the date of the change.
also be changed when a rider is added or
- ------------------------------------------------------------------------------------------------------------------------------------
GRACE PERIOD AND If the Death Benefit Guarantee is not in effect, 2.
POLICY LAPSE the policy will lapse only if, on any Monthly Is the amount necessary to continue the
Anniversary, the Cash Surrender Value plus Death Benefit Guarantee if it is in effect. If
any Sales Charge Refund is less than the the Death Benefit Guarantee is not in effect,
Monthly Deduction due. the minimum payment is equal to 1.
We will only lapse this policy at the end of a The grace period begins on the date we send
61-day grace period if sufficient payment is you written notice of the required payment.
not received. The minimum payment required
is the lesser of 1 and 2, where: If the insured dies during the grace period,
we deduct any Loan Amount and any unpaid
1. Monthly Deductions from the proceeds.
Is the amount necessary to provide a Cash
Surrender Value sufficient to pay the Monthly If the Death Benefit Guarantee is in effect,
Deduction due; and we will not lapse the policy.
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REINSTATEMENT Reinstatement means putting a lapsed policy the Monthly Anniversary on which the policy
back in force. You may reinstate this policy would be reinstated, we will pay the Death
by written request any time within five years Benefit as of that Monthly Anniversary.
after it has lapsed, as long as it has not been
surrendered for its Cash Surrender Value. The Accumulation Value on the date of rein-
statement will be the amount provided by the
To reinstate this policy and any riders: Net Premium paid to reinstate this policy.
Subsequent Accumulation Values will be cal-
1. culated as shown in the Accumulation Value
You must submit proof which satisfies us that provision of this policy. After reinstatement,
all insureds are still insurable; and the Surrender Charges will be those in effect
on the date of termination, reduced in the
2. same proportion as the Accumulation Value
You must pay a premium large enough to to the Surrender Charge, both as of the date
keep the policy and any riders in force for at of termination. The Surrender Charge will not
least two months. be less than zero.
This policy will be reinstated only as of a The Death Benefit Guarantee cannot be rein-
Monthly Anniversary. If you have met the stated.
above conditions, and the insured dies before
- ------------------------------------------------------------------------------------------------------------------------------------
ACCUMULATION VALUE The Accumulation Value of this policy is
equal to the sum of the Fixed Accumulation
Value plus the Variable Accumulation Value.
-----------------------------------------------------------------------------------------------------------
FIXED ACCUMULATION VALUE
The Fixed Accumulation Value on the Policy 3.
Date is zero. Is the total of your transfers to the Variable
Account from the Fixed Account since the
After the Policy Date, the Fixed Accumulation preceding Monthly Anniversary, plus interest
Value is calculated as 1 + 2 - 3, where: from the date of transfer to the date of the
calculation.
1.
Is the Fixed Accumulation Value on the pre- If the date of the calculation is a Monthly
ceding Monthly Anniversary, plus interest Anniversary, we also reduce the Fixed Accu-
from the Monthly Anniversary to the date of mulation Value by the applicable Monthly
the calculation; Deduction for the policy month following the
Monthly Anniversary.
2.
Is the total of your Loan Amount transferred
from the Variable Account since the preced-
ing Monthly Anniversary; and
-----------------------------------------------------------------------------------------------------------
INTEREST RATE ON THE FIXED ACCUMULATION
VALUE
The interest rate applied in the calculation of calculation of your Fixed Accumulation Value
the Fixed Accumulation Value will not be less in a manner which our Board of Directors de-
than the Minimum Annual Interest Rate termines.
shown on the Policy Data Page. This rate is
an effective annual interest rate compounded Interest credited on the Fixed Accumulation
yearly. Interest in excess of the Minimum Value is credited annually on the Policy An-
Annual Interest Rate may be applied in the niversary to the Variable Account according
to your premium allocation.
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ACCUMULATION VALUE VARIABLE ACCUMULATION VALUE
(CONTINUED)
The Variable Accumulation Value is the total EXAMPLE: You have 100 Accumulation Units
of your values in each Sub-account. The value in Sub-account XXX, 50 in Sub-account YYY,
for each Sub-account is equal to 1 multiplied and 0 in Sub-account ZZZ. The Unit Values
by 2, where: are: Sub-account XXX is 10.00, Sub-account
YYY is 12.00, and Sub-account ZZZ is 9.00.
1. The number of Units multiplied by the Unit
Is your current number of Accumulation Units; Value equals the value of each Sub-account
and as illustrated below:
2. Number Unit
Is the current Unit Value. Sub-account of Units Value Values
----------- -------- ----- ------
The Variable Accumulation Value will vary XXX 100.000 10.00 $1,000.00
from Valuation Date to Valuation Date re- YYY 50.000 12.00 600.00
flecting changes in 1 and 2 above. ZZZ 0.000 9.00 0.00
--------
Total Variable Accumulation Value $1,600.00
------------------------------------------------------------------------------------------------
ACCUMULATION UNITS
When transactions are made which affect the 2.
Variable Accumulation Value, dollar amounts You take a partial withdrawal from that Sub-
are converted to Accumulation Units. The account;
number Accumulation Units for a transaction
is found by dividing the dollar amount of the 3.
transaction by the current Unit Value. We take a portion of the Monthly Deduction
from that sub-account; or
The number of Accumulation Units for a
Sub-account increases when: 4.
Transfers are made from that Sub-account to
1. the Fixed Account or other Sub-accounts.
Net Premiums are credited to that Sub-
account; or EXAMPLE: You have 100 units in Sub-
account XXX. The Unit Value is 10.00. You
2. request a partial withdrawal of $250. The
Transfers from the Fixed Account or other number of units for the partial withdrawal is
Sub-accounts are credited to that Sub- $250 divided by 10.00 or 25 units. We de-
account. crease the number of Accumulation Units by
the number of units for the partial with-
The number of Accumulation Units for a drawal. After the partial withdrawal, Sub-
Sub-account decreases when: account XXX has 100 - 25, or 75
Accumulation Units.
1.
You take out a Policy Loan from that Sub-
account;
------------------------------------------------------------------------------------------------
UNIT VALUE
The Unit Value for a Sub-account on any EXAMPLE: The Unit Value for October 1 for
Valuation Date is equal to the previous Unit Sub-account XXX is 20.00. After the close
Value multiplied by the Net Investment Factor of the Stock Market on October 2, the Net
for that Sub-account for the Valuation Period Investment Factor is calculated as 1.01 for
ending on that Valuation Date. The Unit that day. The Unit Value increases to 20.00
Value was initially set at 10.00 when the x 1.01, or $20.20. If you had 100 Accumu-
Sub-account first purchased mutual fund lation Units in Sub-account XXX, their value
shares. would increase from $2,000 on October 1 to
$2,020 on October 2.
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ACCUMULATION VALUE NET INVESTMENT FACTOR
(CONTINUED)
The Net Investment Factor is a number that c.
reflects charges to this policy and the invest- Plus or minus a per share charge or credit for
ment performance during a Valuation Period any taxes reserved for which we determine
of the mutual fund in which a Sub-account is to have resulted from the investment oper-
invested. If the Net Investment Factor is ations of the Sub-account and to be applica-
greater than one, the Unit Value is increased. ble to this policy.
If the Net Investment Factor is less than one,
the Unit Value is decreased. The Net Invest- 2.
ment Factor for a Sub-account is determined Is the result of:
by dividing 1 by 2, (1/2), where:
a.
1. The net asset value per share of the mutual
Is the result of: fund shares held in the Sub-account, deter-
mined at the end of the last prior Valuation
a. Period; and
The net asset value per share of the mutual
fund shares in which the Sub-account invests, b.
determined at the end of the current Valu- Plus or minus a per share charge or credit for
ation Period; any taxes reserved for the last prior Valuation
Period which we determine to have resulted
b. from the investment operations of the Sub-
Plus the per share amount of any dividend or account and to be applicable to this policy.
capital gain distributions made on the mutual
fund shares in which the Sub-account invests Investment advisory fees paid by the mutual
during the current Valuation Period; and funds are reflected in the net asset value.
- ----------------------------------------------------------------------------------------------------------------------
MONTHLY DEDUCTION The Monthly Deduction is a charge made as of the Monthly Anniversary. For the pur-
monthly against the Accumulation Value. The pose of determining the proportion of the de-
Monthly Deduction for a policy month will be duction, the Fixed Accumulation Value is
calculated as 1, plus 2, plus 3, plus 4 (1 + 2 reduced by the Loan Amount.
+ 3 + 4), where:
We deduct the portion of the Monthly De-
1. duction from each Sub-account of the Vari-
Is the cost of insurance for this policy (as de- able Account by an automatic surrender of
scribed below) for the policy month; Accumulation Units. We make the deduction
based on each Sub-account's proportionate
2. percentage of the Accumulation Value.
Is the cost of any rider benefits for the policy
month; EXAMPLE: Your Fixed Accumulation Value is
$5,000. Your Variable Accumulation Value is
3. $6,000 with Sub-account XXX = $2,000
Is the Monthly Mortality and Expense Risk and Sub-account YYY = $4,000. Your Loan
Charge (as described below) for the policy Amount is $1,000. The Monthly Deduction is
month; and $100.
4. For the purpose of determining the pro-
Is the Monthly Expense Charge (as described portions we subtract the $1,000 Loan
below) for the policy month. Amount from the Fixed Accumulation Value,
and then we add the Variable Accumulation
The Monthly Deduction is taken from the Value. ($5,000 - $1,000) + $6,000, or
Fixed Accumulation Value and the Variable $10,000.
Accumulation Value on a proportionate basis
- ----------------------------------------------------------------------------------------------------------------------
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MONTHLY DEDUCTION The proportionate percentages of the Monthly The $100 Monthly Deduction will be distrib-
(CONTINUED) Deduction are calculated as follows: uted as follows:
$4,000 divided by $10,000 = 40% x $100, or $40, will be taken from the
40% from the Fixed Accumulation Value. Fixed Account.
20% x $100, or $20, will be taken from
$6,000 divided by $10,000 = Sub-account XXX.
60% from the Variable Accumulation Value 40% x $100, or $40, will be taken from
distributed as follows: Sub-account YYY.
$2,000 divided by $10,000 =
20% from Sub-account XXX
$4,000 divided by $10,000 =
40% from Sub-account YYY.
------------------------------------------------------------------------------------------------
MONTHLY MORTALITY AND EXPENSE RISK
CHARGE
The Monthly Mortality and Expense Risk 2.
Charge for a policy month will be calculated Is the Variable Accumulation Value on the
as 1 multiplied by 2, (1 x 2), where: Monthly Anniversary.
1. The Monthly Mortality and Expense Risk
Is the Mortality and Expense Risk Charge, Charge pays us for assuming the mortality
which will not exceed the Maximum Mortality and expense risks under this policy. We
and Expense Risk Charge shown on the Pol- guarantee that expense and mortality results
icy Data Page, divided by 12; and will not adversely affect the dollar amount of
variable benefits or payments made under
this policy.
------------------------------------------------------------------------------------------------
MONTHLY EXPENSE CHARGE
The Monthly Expense Charge for a policy 4.
month will be calculated as 1, plus 2, plus 3, Is the Monthly Amount Charge. This charge
plus 4 (1 + 2 + 3 + 4), where: is equal to the Monthly Amount Charge per
$1,000, as shown on the Policy Data Page,
1. multiplied by the Face Amount divided by
Is the Monthly Administrative Charge. The $1,000. This charge applies to the Initial
Monthly Administrative Charge is subject to Face Amount and any increases in Face
change, but will not exceed the Maximum Amount during the Term shown on the Policy
Monthly Administrative Charge shown on the Data Page. The Term applies to the Initial
Policy Data Page; Face Amount from the Policy Date and to any
increases in Face Amount from the Effective
2. Date of that increase. Any change in Face
Is the Death Benefit Guarantee Charge shown Amount due solely to a change of Death Ben-
on the Policy Data Page; efit Option does not affect the charge.
3.
Is the Monthly Policy Charge. This charge
and the Term during which it is applied are
shown on the Policy Data Page; and
------------------------------------------------------------------------------------------------
COST OF INSURANCE
We determine the cost of insurance on a 3.
monthly basis. The cost of insurance for a Is the Accumulation Value at the beginning
policy month is calculated as 1 multiplied by of the policy month minus any charges for
the result of 2 minus 3 [1 X (2 - 3)], where: rider benefits.
1. The cost of insurance is determined sepa-
Is the cost of insurance rate as described in rately for the initial Face Amount and any in-
the Cost of Insurance Rates provision of this creases made later. If the Premium Class for
policy; the initial Face Amount is different from that
of an increase, the Accumulation Value used
2. in 3 above will be first considered a part of
Is the Death Benefit at the beginning of the the initial Face Amount. If the Accumulation
policy month, divided by 1.004074; and Value on the Monthly Anniversary exceeds
the initial Face Amount, it will be considered
to be part of any increase in the Face Amount
in order of the increases.
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MONTHLY DEDUCTION COST OF INSURANCE RATES
(CONTINUED) The monthly cost of insurance rate for this policies have been in force for the same
policy is based on the insured's sex, issue period of time.
age, and premium class as shown on the
Policy Data Page, and the policy year. If your Except for Face Amounts in a rated premium
Death Benefit is a percentage of the class, the cost of insurance rates can never
accumulation value as described under the be greater than those shown in the Table of
definition of "Death Benefit" in Level Amount Monthly Guaranteed Cost of Insurance Rates.
Option, item 2, or Additional Amount Option, This table is based on the Commissioners
item 2, the premium rate class with the most Standard Ordinary Mortality (CSO) Table
recent effective date will apply. Issue age shown on the Policy Data Page. For Face
means age last birthday on the effective date Amounts in a rated premium class, the
of the coverage. We will determine monthly guaranteed cost of insurance rates are
cost of insurance rates based upon calculated by multiplying the rates shown in
expectations as to future cost factors. Any the Table of Guaranteed Cost of Insurance
change in cost of insurance rates will apply Rates by the Premium Class Rating Factor
to all in the same insurance class whose shown on the Policy Data Page. The rates
may also be increased by any extra cost of
insurance shown on the Policy Data Page.
-------------------------------------------------------------------------------------------------
BASIS OF COMPUTATIONS
Minimum cash values are based on the this policy has been filed with the insurance
Commissioners Standard Ordinary Mortality department of the state in which this policy
(CSO) Table and the Nonforfeiture Interest was delivered. Cash values under this policy
Rate as shown on the Policy Data Page. are not less than the minimums required by
Where required, a detailed statement of the the state in which this policy was delivered.
method of computation of cash values under
- ----------------------------------------------------------------------------------------------------------------------
NONFORFEITURE CONTINUATION OF INSURANCE (EXTENDED
PROVISIONS INSURANCE)
Even if you do not make additional premium Deduction. If the Cash Surrender Value plus
payments your insurance coverage under this any Sales Charge Refund is less than the
policy, and any benefits provided by rider, Monthly Deduction due, we will use the Cash
will stay in force as long as either the Death Surrender Value plus any Sales Charge
Benefit Guarantee is in effect or the Cash Refund to continue the insurance during the
Surrender Value plus any Sales Charge grace period.
Refund is large enough to cover the Monthly
-------------------------------------------------------------------------------------------------
PAID-UP LIFE INSURANCE
Any time before the insured's Age 95, you shown on the Policy Data Page. The Cash
may use the Cash Surrender Value to Value of the paid-up life insurance is also
purchase single premium paid-up life calculated based on the CSO Table and
insurance. The amount by which this Nonforfeiture Interest Rate.
insurance exceeds its Cash Value cannot be
greater than the amount by which this To purchase paid-up life insurance, we
policy's Death Benefit exceeds this policy's transfer the Cash Surrender Value of this
Accumulation Value. Any Cash Surrender policy to the Fixed Account.
Value not used to purchase paid-up life
insurance will be paid to you in cash. If this policy is inforce as paid-up life
insurance;
If the insured is living at Age 95, the Cash
Surrender Value of the policy will 1.
automatically be used to purchase single The Accumulation Value provision of this
premium paid-up life insurance. policy no longer applies;
We base the single premium for paid-up 2.
insurance on the insured's sex, age, and You cannot pay additional premiums;
premium class(es) at the time this option is
exercised, and the single premium life 3.
insurance rates in effect at that time. These You cannot make partial withdrawals; and
rates may not exceed the net single premium
rates based on the Commissioners Standard 4.
Ordinary Mortality (CSO) Table and the We do not make any further Monthly De-
Nonforfeiture Interest Rate, both of which are ductions.
- ----------------------------------------------------------------------------------------------------------------------
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NONFORFEITURE We will put this policy back in force as flexi- After the policy is back in force as flexible
PROVISIONS ble premium variable life insurance at any premium variable life insurance:
(CONTINUED) time before the Insured's Age 95 if:
1.
1. The Face Amount and the Death Benefit Op-
You submit proof which satisfies us that all tion will be those in effect when you pur-
insureds are still insurable; chased paid-up life insurance;
2. 2.
You pay a premium that, when added to the You may resume premium payments;
cash value of the paid-up life insurance, keeps
the policy in force for at least 2 months. 3.
The Accumulation Value provision of this
On the Monthly Anniversary on or following policy applies; and
the date when you meet the above require-
ments, we credit any premiums you pay and 4.
the cash value of the paid-up life insurance in We resume making Monthly Deductions.
the form of Net Premiums without a Premium
Expense Charge. Net Premiums are credited If this policy is in force as paid-up life insur-
to the Variable Account on the basis of your ance, it may be surrendered for its cash value
allocation in effect when you purchased at any time. If surrendered within 30 days
paid-up life insurance. after a policy anniversary, the Cash Surrender
Value will not be less than the Cash Surren-
der Value on the last policy anniversary date.
- ----------------------------------------------------------------------------------------------------------------------
TRANSFERS You may request in writing the transfer of all first Valuation Date after we receive your
or part of your Accumulation Value between written request.
the Sub-accounts of the Variable Account.
We only allow four transfers in a policy year. We may make a charge for each transfer, but
We consider all transfers received in the same the charge may not exceed $25.00. All
request and made on the same Valuation Date transfers are also subject to any charges and
as one transfer. We make a transfer on the conditions imposed by the mutual fund whose
shares are involved.
-------------------------------------------------------------------------------------------------
TRANSFERS FROM A SUB-ACCOUNT
To transfer from a Sub-account, Accumulation value is reinvested in other Sub-accounts as
Units are redeemed on the next Valuation directed in your request.
Date after we receive your request and their
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<S> <C> <C>
CASH VALUE, CASH CASH VALUE
SURRENDER VALUE, The Cash Value of this policy is the Accumu- The Cash Value is never less than zero.
TOTAL SURRENDER, lation Value minus any Surrender Charge.
AND PARTIAL ---------------------------------------------------------------------------------------------------
WITHDRAWAL CASH SURRENDER VALUE
BENEFITS The Cash Surrender Value of this policy is the unpaid Monthly Deductions.
Cash Value minus the Loan Amount and any
---------------------------------------------------------------------------------------------------
SURRENDER CHARGE
We make a Surrender Charge if you surrender cluding Face Amount increases resulting from
this policy or it lapses. The Surrender Charge the Insured's Cost of Living Rider, if included
has two parts, the Contingent Deferred Ad- with the policy. The additional Contingent
ministrative Charge and the Contingent De- Deferred Administrative Charge depends on
ferred Sales Charge. The amount and the amount of the increase in Face Amount
duration of these charges is shown on the and the insured's age on the effective date
Policy Data Page. The Contingent Deferred of the increase. The additional Contingent
Sales Charge will never exceed 47.5% of the Deferred Sales Charge depends on the
premiums paid for this policy. The Contin- amount of the increase in Face Amount and
gent Deferred Administrative Charge must be the insured's sex and age on the effective
collected in full before any Contingent De- date of the increase. We will send you writ-
ferred Sales Charge is collected. ten notice of the amount and duration of the
additional Surrender Charge.
INITIAL FACE AMOUNT
If Surrender Charges are shown on an annual
At issue, the Contingent Deferred Adminis- basis, they grade uniformly by policy month
trative Charge depends on the Initial Face between the consecutive years shown.
Amount and the insured's issue age. The
Contingent Deferred Sales Charge depends on Any increases or decreases in Face Amount
the Initial Face Amount and the insured's sex resulting from changes in the Death Benefit
and issue age. Option, and any requested decreases in Face
Amount, do not affect the Surrender Charges.
REQUESTED CHANGES IN FACE AMOUNT
Additional Surrender Charges will apply to
any approved increase in Face Amount, in-
---------------------------------------------------------------------------------------------------
SALES CHARGE REFUND
During the first two policy years and the first INITIAL FACE AMOUNT
24 policy months following the effective date
of an increase in Face Amount, we may be If you surrender this policy during the first
required to refund a portion of the Contingent two policy years, the Sales Charge Refund
Deferred Sales Charge if you surrender this will equal 1, plus 2, minus 3, minus 4, (1 +
policy. This refund is called the Sales Charge 2 - 3 - 4), where:
Refund.
1.
The calculation of the Sales Charge Refund is Is Sales Charge portion of the Premium Ex-
described below. The Surrender Charge pense Charge;
Guideline used in the calculation depends on 2.
the initial Face Amount or the amount of the Is the Contingent Deferred Sales Charge ac-
increase in Face Amount, the insured's sex, tually collected. If the Accumulation Value is
and the insured's age on the Policy Date or less than the Surrender Charge, only a portion
the effective date of the increase. The Sur- of the Contingent Deferred Sales Charge is
render Charge Guideline is shown on the Pol- actually collected. In that case, the Contin-
icy Data Page. gent Deferred Sales Charge actually collected
is equal to the Accumulation Value less the
Any amount used in the calculation described Contingent Deferred Administrative Charge;
below will be determined as of the effective 3.
date of the surrender. For the purposes of Is 21% of the lesser of (i) the total premiums
these calculations, any amount that would be paid during the first Policy Year, or (ii) the
less than zero is assumed to be zero. Surrender Charge Guideline shown on the
Policy Data Page; and
4.
Is 9% of premiums paid.
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<S> <C> <C>
CASH VALUE, CASH REQUESTED INCREASES IN FACE AMOUNT 3.
SURRENDER VALUE, Is 21% of the lesser of (i) the total premiums
TOTAL SURRENDER, If you surrender this policy during the first attributable to the increase during the first
AND PARTIAL 24 policy months following a requested in- twelve policy months following the increase,
WITHDRAWAL crease in Face Amount (but after the free look or (ii) the Surrender Charge Guideline for the
BENEFITS period), the Sales Charge Refund will equal increase; and
(CONTINUED) 1, plus 2, minus 3, minus 4, (1 + 2 - 3 - 4),
where: 4.
Is 9% of premiums attributable to the in-
1. crease described below.
Is the Sales Charge portion of the Premium
Expense Charge on premiums attributable to The premium attributable to the increase in
the increase as described below; the Face Amount will equal 1, multiplied by
the sum of 2 and 3, (1 x (2 + 3)), where:
2.
Is the Contingent Deferred Sales Charge ac- 1.
tually collected for the increase. If the Accu- Is the ratio of the amount of increase in the
mulation Value is less than the Surrender Surrender Charge Guideline to the sum of the
Charge, only a portion of the Contingent De- Surrender Charge Guideline for the Initial
ferred Sales Charge is actually collected. In Face Amount and each increase in Face
that case, the Contingent Deferred Sales Amount;
Charge actually collected is equal to the Ac-
cumulation Value less the Contingent De- 2.
ferred Administrative Charge for all face Is the Accumulation Value on the effective
amounts and less the Contingent Deferred date of the increase in Face Amount; and
Sales Charge for the Initial Face Amount and
any prior requested increases in Face Amount; 3.
Is the actual premiums paid on or after the
effective date of the increase.
---------------------------------------------------------------------------------------------------
TOTAL SURRENDER
You may surrender this policy for its Cash crease in Face Amount, you may also be en-
Surrender Value by sending us a written re- titled to a Sales Charge Refund if you
quest. During the first two policy years and surrender this policy.
the first two years following a requested in-
---------------------------------------------------------------------------------------------------
PARTIAL WITHDRAWAL
After the first policy year, you may withdraw on total surrender of this policy for its full
part of your Cash Surrender Value by sending Cash Surrender Value.
us a written request. The amount of any
partial withdrawal must be at least equal to Unless you specify, we make partial with-
$500.00. The maximum partial withdrawal drawals from the Fixed Accumulation Value
equals the Cash Surrender Value multiplied and the Variable Accumulation Value on a
by the Percent of Partial Withdrawal shown proportionate basis. For the purpose of calcu-
on the Policy Data Page. Only one partial lating the proportion, the Loan Amount is
withdrawal is allowed in any policy year. We subtracted from the Fixed Accumulation
may make a charge for each partial with- Value. (See Monthly Deduction for an exam-
drawal, but the charge will not exceed ple of how we calculate this proportion.) We
$25.00. The $25.00 charge will not be made make partial withdrawals from a Sub-account
by the automatic surrender of Accumulation
Units.
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<S> <C> <C>
CASH VALUE, CASH THE EFFECT OF PARTIAL WITHDRAWALS
SURRENDER VALUE,
TOTAL SURRENDER, The Accumulation Value will be reduced by 1.
AND PARTIAL the amount of any partial withdrawal. The The Face Amount provided by the most re-
WITHDRAWAL Death Benefit will also be reduced by the cent increase;
BENEFITS amount of the withdrawal, or, if the Death
(CONTINUED) Benefit is based on the corridor percentage 2.
of Accumulation Value, by an amount equal The next most recent increases successively;
to the corridor percentage times the amount and
of the withdrawal.
3.
The Face Amount will be reduced by the The initial Face Amount.
amount of the partial withdrawal if Option A
(Level Amount Option) is in effect. We do not If Death Benefit Option B (Variable Amount
allow a withdrawal if the Face Amount after Option) is in effect, a partial withdrawal does
a partial withdrawal would be less than the not affect the Face Amount.
Minimum Face Amount shown on the Policy
Data Page. If more than one Premium Class A partial withdrawal may cause the Death
applies to the current Face Amount, for the Benefit Guarantee to terminate. The amount
purpose of determining the cost of insurance, of the partial withdrawal is deducted from
the Face Amount will be reduced in the fol- the total premium paid in calculating whether
lowing order: sufficient premiums have been paid to main-
tain the Death Benefit Guarantee.
- -----------------------------------------------------------------------------------------------------------------------
POLICY LOANS After the first policy year, if this policy has a When we make a policy loan, the amount of
Loan Value, you may take out a loan from us the policy loan will be segregated within the
by written request. We use this policy as se- Fixed Accumulation Value of your policy as
curity for the loan. Each loan must be at least security for the loan. Unless you specify,
$500. amounts held as security for the loan will
come from the Fixed Accumulation Value and
We will not lend you more than the Loan the Variable Accumulation Value and
Value. The Loan Value is 1, minus 2, (1 - 2), the Variable Accumulation Value on a propor-
where: tionate basis. For the purpose of determining
the proportion, we subtract any existing Loan
1. Amount from the Fixed Accumulation Value.
Is 75% of the Cash Value; and (See Monthly Deduction for an example of
how we calculate this proportion.) Amounts
2. equal to the portion of the policy loans com-
Is the existing Loan Amount. ing from the Sub-accounts of the Variable
Account are transferred to the Fixed Account,
However, if this policy is in force as paid-up reducing the Variable Accumulation Value.
life insurance, the Loan Value is the Cash These transfers are not treated as transfers
Value on the next policy anniversary minus for the purpose of the transfer charge or the
loan interest to that date and any existing limit on the number of transfers in a policy
Loan Amount. year.
- -----------------------------------------------------------------------------------------------------------------------
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4821 18
- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
POLICY LOANS EFFECT OF THE POLICY LOANS
(CONTINUED)
If not repaid, we deduct any unpaid policy Benefit Guarantee to terminate. The Loan
loans before paying the proceeds. If, at any Amount is deducted from the total premiums
time, the Loan Amount exceeds the Cash paid in calculating whether you have paid
Value plus any Sales Charge Refund, the premiums sufficient to maintain the Death
grace period goes into effect and we may Benefit Guarantee.
lapse this policy. A loan may cause the Death
---------------------------------------------------------------------------------------------------
LOAN INTEREST
We charge interest on the Loan Amount at This result is called the Preferred Loan
the Loan Interest Rate shown on the Policy Amount.
Data Page, unless we charge a lower rate.
After the tenth policy year, we charge interest The Preferred Loan Amount is calculated on
at the Preferred Loan Interest Rate shown on the date of any loan and on each policy anni-
the Policy Data Page on the portion of your versary thereafter. Policy loan repayments
Loan Amount that is not greater than the re- received will be applied first to reduce the
sult of (1 - 2 + 3), where: portion of your policy loan that is not the
Preferred Loan Amount, and then to reduce
1. the Preferred Loan Amount.
Is the Accumulation Value;
On the date of any policy loan, interest is due
2. in advance for the remainder of the policy
Is the sum of all premiums paid; and year. On each policy anniversary thereafter,
interest is due in advance for the next full
3. policy year. Any unpaid interest is added to
Is the sum of all Partial Withdrawals. the Loan Amount, and we charge interest on
it.
---------------------------------------------------------------------------------------------------
REPAYMENT
You may repay all or part of any policy loan each Sub-account of the Variable Account, 1
during the insured's lifetime. If not repaid multiplied by 2 (1 x 2), where:
during the insured's lifetime, we deduct the
Loan Amount from the proceeds. We gener- 1.
ally consider any payments we receive, Is the amount of the loan repayment; and
planned or unscheduled, as premium pay-
ments. Therefore, when you make a payment 2.
on a policy loan, to avoid a Premium Expense Is the current proportion used to allocate pre-
Charge, you must tell us that you are making miums to that Sub-account.
a loan payment. We reserve the right to
consider any payment we receive as a loan These transfers are not treated as transfers
repayment at our discretion. for the purpose of the transfer charge or the
limit on the number of transfers in a policy
Loan repayments reduce the Loan Amount. year.
We will transfer from the Fixed Account to
- -----------------------------------------------------------------------------------------------------------------------
DELAY OF PAYMENT The amount surrendered, withdrawn, or cumulation Value when we are not able to
ON SURRENDER, loaned will normally be paid to you within 7 determine the Variable Accumulation Value
PARTIAL days of: because:
WITHDRAWALS AND
LOANS 1. 1.
Receipt of your written request; and The New York Stock Exchange is closed for
trading; or
2.
Receipt of your policy, if required. 2.
The Securities and Exchange Commission
We may delay making the payment of the determines that a state of emergency exists.
portion of the payment from the Variable Ac-
- -----------------------------------------------------------------------------------------------------------------------
- ------------------ ------------------
85-171 19
- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DELAY OF PAYMENT We have the right to delay making a surren- of the surrender, partial withdrawal, or loan
ON SURRENDER, der, partial withdrawal, or loan from the Fixed request to the date of payment.
PARTIAL Account for up to six months from the date
WITHDRAWALS AND we receive your request. If we delay payment
LOANS for 30 days or more, we pay interest at an
(CONTINUED) effective annual rate of 3-1/2% from the date
- -----------------------------------------------------------------------------------------------------------------------
BENEFICIARY The beneficiary is named to receive the pro- described below. You may also choose to
ceeds to be paid at the insured's death. You name a beneficiary whom you cannot change
may name one or more beneficiaries on the without his or her consent. This is an irrev-
application. Later, you may name, add, or ocable beneficiary.
change beneficiaries by written request as
---------------------------------------------------------------------------------------------------
NAMING, ADDING, OR CHANGING BENEFICIARIES
You can name, add, or change beneficiaries 3.
by written request if all of these are true: We have the written consent of all irrevocable
beneficiaries.
1.
This policy is in force; A change will take effect as of the date it is
signed but will not affect any payment we
2. make or action we take before receiving your
The insured is alive; and request.
---------------------------------------------------------------------------------------------------
PAYING PROCEEDS
We pay death proceeds in the following or- ficiary, each receives an equal share, unless
der: you have requested another method in writ-
ing. To receive proceeds, a beneficiary must
1. be living on the 10th day after the insured's
Collateral assignees, if any, have first priority; death; then
2. 3.
The beneficiary, if any, receives any proceeds If there are no beneficiaries, you receive any
that remain. If there is more than one bene- proceeds that remain.
- -----------------------------------------------------------------------------------------------------------------------
CONTROL OF POLICY OWNERSHIP
As owner, you have the rights and duties 5.
outlined in this policy. However, we need the Name or change a contingent owner;
written consent of all irrevocable beneficiaries
and collateral assignees, if you wish to: 6.
Add a Children's Insurance Rider;
1.
Surrender this policy or make a partial with- 7.
drawal; Add an Additional Insured Rider;
2. 8.
Take out a policy loan; Add a Term Insurance Rider;
3. 9.
Change the policy to paid-up life insurance; Change the Face Amount; or
4. 10.
Change the owner; Change the Death Benefit Option.
- -----------------------------------------------------------------------------------------------------------------------
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4822 20
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</TABLE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONTROL OF POLICY We need the written consent of all irrevocable 3.
(CONTINUED) beneficiaries, if you wish to: Assign this policy or any of its benefits as
collateral.
1.
Change a beneficiary; Your rights, as outlined in this policy, end at
the insured's death.
2.
Choose or change a Settlement Option; or
---------------------------------------------------------------------------------------------------
COLLATERAL ASSIGNMENT
You may assign the benefits of this policy as An assignment is not binding on us until we
collateral for a debt. This limits your rights receive written notice of it. We assume no
to the Cash Surrender Value and the benefi- responsibility as to the validity of any as-
ciary's rights to the proceeds. A collateral as- signment. When we pay proceeds, we may
signment does not change the owner. A rely on what the collateral assignee states as
collateral assignee does not have ownership the debt due.
rights.
---------------------------------------------------------------------------------------------------
CHANGING OWNERSHIP
You can change the owner of this policy by 1.
sending us a written request. This is called Does not change the coverage or the benefi-
an "absolute assignment." You transfer all ciary;
your rights and duties as owner to a new
owner. The new owner can then make any 2.
change the policy allows. Applies only if we receive your request;
You can also name a contingent owner who 3.
will own this policy at your death. You may Takes effect from the date signed;
name, change, or withdraw a contingent
owner by sending us a written request. 4.
Does not affect any payment we make or
An absolute assignment or contingent owner action we take before receiving your request;
request: and
5.
Is not a collateral assignment.
- -----------------------------------------------------------------------------------------------------------------------
SETTLEMENT OPTIONS Settlement Options are ways of paying the 2.
proceeds of this policy. These options apply Proceeds payable upon full surrender of this
to: policy for its Cash Surrender Value.
1. Proceeds applied under a settlement option
Payment of proceeds at death; and no longer earn interest at the rate applied to
the Fixed Account or participate in the in-
vestment experience of the Variable Account.
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84-676 21
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</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
SETTLEMENT OPTIONS CHOOSING OPTIONS
(CONTINUED)
Settlement Options are chosen or withdrawn We issue a supplemental contract for pro-
by making a written agreement with us or by ceeds applied under any option. We need not
sending us written notice. Our approval is accept an option where less than $2,500 will
needed for an option to be chosen or with- be applied for each payee. In this case, we
drawn. Before the insured's death, only you may pay a payee's proceeds in one sum.
can choose or withdraw an option. After the Under an installment option, each payment
insured's death, a beneficiary may choose an must be at least $25. If needed, we may in-
option depending on prior restrictions made crease the time between payments to three
by you or a collateral assignee. A change of months, six months, or a year to make each
beneficiary or owner withdraws all chosen payment at least $25.
options; you must choose again any options
you want.
---------------------------------------------------------------------------------------------------
PAYING PROCEEDS
A payee is one to whom we may pay part or OPTION 2
all of the proceeds or interest. The primary
payee is the first person to whom benefits are We pay the proceeds with interest in equal
payable. If the primary payee dies before we installments for the amount you choose at
have made all payments under Options 2, 3, equal intervals until the proceeds and interest
or 4, we pay the remaining payments to any are all paid. The interval you choose may be
contingent payee. We pay the proceeds in a month, 3 months, 6 months, or a year. The
one sum, unless one or more of the following amount chosen for each installment must be
options are requested and we agree to it. We such that the total installments payable in
will also use any other method of payment any 12 months is at least 7% of the total
that is acceptable to you and to us. amount of the proceeds.
Under Options 2, 3, 4, and 5, we pay the first The last installment will be for the remaining
installment as of the date we issue a supple- proceeds and interest, and might not be equal
mental contract to pay the proceeds. to the other installments.
Under Option 6, we pay the first installment
at the end of the interval it applies to. OPTION 3
We pay the proceeds in equal installments at
OPTION 1 equal intervals for the number of years you
choose. The interval may be a month, three
The proceeds are left with us to earn interest. months, six months, or a year. Use the Option
The withdrawal rights, the length of time we 3 Table to determine the amount of each in-
will hold the proceeds, and any future change stallment. If you ask, we will tell you the
of option are subject to our approval. payment amounts for numbers of years or in-
tervals not shown.
- -----------------------------------------------------------------------------------------------------------------------
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4823 22
- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
SETTLEMENT OPTIONS OPTION 3 TABLE We compute the installments using the cal-
(CONTINUED) -------------------------------------------- endar year in which the proceeds are applied
NUMBER OF MONTHLY PAYMENTS and the payee's sex and age at that time. We
YEARS PER $1000 require written proof of the payee's age. The
OF PROCEEDS Option 4 Table shows the amount of each in-
-------------------------------------------- stallment for a 120-month "certain" period
5 $18.12 plus as long after as the primary payee lives.
10 $ 9.83 We compute the amount of each installment
15 $ 7.10 for the other "certain" periods on a similar
20 $ 5.75 basis. If you ask, we will tall you any of these
25 $ 4.96 payment amounts.
--------------------------------------------
OPTION 4 OPTION 4 TABLE
-----------------------------------------------
The proceeds are used to provide an annuity MONTHLY INCOME WITH 120 MONTHS CERTAIN
with 60, 120, 180, or 240 months "certain". -----------------------------------------------
This means that we continue paying the pri- MONTHLY INCOME
mary payee in equal monthly installments for PER $1000 OF PROCEEDS
as long as the primary payee lives with a ------------------------------------------------
number of months "certain". "Certain" means Male Female
that we make payments for at least as long Age ---- -------
as the period you choose (either 60, 120,
180, or 240 months), no matter when the 50 $4.50 $4.23
primary payee dies. If the primary payee dies 55 4.88 4.56
before the "certain" period ends, the remain- 60 5.38 5.00
ing payments are payable to the contingent 65 6.03 5.58
payee. 70 6.85 6.38
-----------------------------------------------
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84-677 23
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</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
SETTLEMENT OPTIONS OPTION 5 OPTION 5 TABLE
(CONTINUED) -----------------------------------------------
The proceeds are used to provide a "joint and ORIGINAL MONTHLY INSTALLMENT FOR EACH
two-thirds to survivor" life income for two $1000 OF PROCEEDS ACCORDING TO THE AGE
payees. We make monthly payments jointly AND SEX OF EACH PAYEE.
to the two payees as long as they both live. -----------------------------------------------
When one payee dies, the other receives Male Age
two-thirds of the amount of the joint monthly Female 60 65 70
payment for life. Payments stop when both Age ----------------------------
payees have died. We compute the payment 60 $5.65 $5.95 $6.29
amounts using the calendar year in which the 65 5.99 6.36 6.77
proceeds are applied and the payees' sexes 70 6.39 6.86 7.39
and ages when the proceeds are applied. The ----------------------------------------------
original monthly payment for joint payees,
one male and one female, is shown for se-
lected ages in the Option 5 Table. We will OPTION 6 (ANNUITY OPTION)
quote values for other age and sex combina-
tions upon request. The proceeds are used to provide an annuity.
Each annuity installment is 103% of the
payment that we would make if the payee
had used the proceeds to buy a similar, non-
participating, single premium immediate an-
nuity at our rates on the date the proceeds
are applied. We pay these installments at the
end of the interval to which they apply. We
will not apply this option if a similar option
would be more favorable to the payee when
proceeds are applied.
---------------------------------------------------------------------------------------------------
DEATH OF PAYEE
Unless we have agreed otherwise, if a payee 1.
dies after we have paid or credited proceeds Under Option 2, we will pay any unpaid sum
under Option 1, we will pay the proceeds and left with us plus any unpaid interest on that
any unpaid interest in one sum to the payee's sum.
estate. Unless we have agreed otherwise, if a
payee dies after we have paid or credited 2.
proceeds under Options 2, 3, or 4, we will Under Option 3, we will pay the commuted
pay the remaining payments to any contin- value (based on interest at an effective annual
gent payees. If there are no contingent rate of 3-1/2%) of any unpaid installments.
payees, we pay the following amounts to the
primary payee's estate. 3.
Under Option 4, we will pay the commuted
value (based on interest at an effective annual
rate of 3-1/2%) of any unpaid installments
remaining in the "certain" period.
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4824 24
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</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
SETTLEMENT OPTIONS PROTECTION OF PROCEEDS
(CONTINUED)
Unless we agree to it, a payee may not do 5.
any of the following: Surrender the supplemental contract for cash;
1. 6.
Withdraw any part of the proceeds or inter- Borrow against the supplemental contract; or
est;
7.
2. Assign the supplemental contract.
Change the fixed payment intervals or the
length of the payment period; If the payee chooses Options 1, 2, or 3, the
payee may change the option and transfer the
3. funds that remain to a new option. This ap-
Change the settlement option; plies unless prevented by a written agreement
with us.
4.
Change the amount of payment; A payee's creditors may not claim any of the
proceeds or interest. This provision applies
unless altered by federal or state law.
---------------------------------------------------------------------------------------------------
INTEREST ON SETTLEMENT OPTIONS
We base the interest rate for proceeds ap- In determining amounts to be paid under
plied under Options 1 and 2 on the interest Options 3 and 4, we assume interest at an
rate we declare on funds that we consider to effective annual rate of 3-1/2%. Also, for
be in the same classification based on the Option 3 and "certain" periods under Option
option, restrictions on withdrawal, and other 4, we credit any excess interest we may de-
factors. The interest rate will never be less clare on funds that we consider to be in the
than an effective annual rate of 3-1/2%. same classification based on the option, re-
strictions on withdrawal, and other factors.
- -----------------------------------------------------------------------------------------------------------------------
GENERAL PROVISIONS VOTING OF MUTUAL FUND SHARES
While this policy is in force, you have the 2.
right to instruct us how to vote the mu- The assets of the Variable Account are allo-
tual fund shares attributable to this policy. cated to Sub-accounts that are invested in
All fund proxy material and forms used to mutual funds shares.
give voting instructions will be sent to per-
sons having voting interests. We may vote the mutual fund shares held in
the Sub-accounts at our discretion if we de-
We will vote the mutual fund shares held in termine that, because of applicable law or
Sub-accounts according to the instructions regulation, we do not have to vote the mutual
received, as long as: fund shares according to the voting in-
structions received.
1.
The Variable Account is registered as a unit
investment trust under the Investment Com-
pany act of 1940; and
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84-678 25
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</TABLE>
<PAGE>
<TABLE>
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<S> <C> <C>
GENERAL PROVISIONS If we do not receive timely voting instructions by their instructions will be determined as of
(CONTINUED) from you, we will vote the applicable mutual a record date selected by us, not more than
fund shares in proportion to the instructions 90 days before the meeting of the applicable
which are received with respect to the other mutual fund.
policies providing benefits related to the ap-
plicable Sub-account. This policy does not give you the right to vote
at meetings of our stockholders and/or
The persons entitled to give voting in- policyholders.
structions and the number of votes affected
---------------------------------------------------------------------------------------------------
SUBSTITUTION OF MUTUAL FUND SHARES
We may substitute shares of another mutual 3.
fund for mutual fund shares already pur- We deem it necessary under the Investment
chased. Company Act of 1940.
We may make a substitution if any of the We will not substitute any shares attributable
following occur. to your interest in a Sub-account of the Vari-
able Account without prior notice to you and
1. prior approval of the Securities and Exchange
The shares of a mutual fund in which a Sub- Commission, to the extent required by the In-
account invests are no longer available for vestment Company Act of 1940 or other ap-
purchase by the Sub-account; plicable law.
2.
In our judgment, investment in a particular
mutual fund becomes inappropriate in view
of the purposes of this policy; or
---------------------------------------------------------------------------------------------------
PAYMENT OF PROCEEDS
We pay all proceeds of this policy from our As of the date of death, the proceeds no
Home Office in Minneapolis, Minnesota. Be- longer earn interest at the rate applied to the
fore paying the proceeds, we may require Fixed Account or participate in the invest-
that you send us this policy. We make pay- ment experience of the Variable Account. If
ments under Settlement Options 4, 5, and 6 payment is delayed more than 30 days, we
only to a natural person in that person's own pay interest on the proceeds at death for the
right. We adjust the proceeds payable on the time between the insured's death and the
death of the insured as follows: earlier of the following:
1. 1.
We refund any policy loan interest charged The date we pay proceeds; or
but not earned;
2.
2. The date we issue a supplemental contract.
We deduct any Loan Amount; and
Interest on these funds is never less than an
3. effective annual rate of 3-1/2%.
We deduct any unpaid Monthly Deductions
due on or before the insured's death.
---------------------------------------------------------------------------------------------------
BENEFITS AT AGE 95
If the insured is living at Age 95, the Cash
Surrender Value will automatically be used to
purchase single premium paid-up insurance.
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4825 26
- ------------------ ------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
GENERAL PROVISIONS INCONTESTABILITY
(CONTINUED)
This policy has a two-year contestable period If you make a Face Amount increase or pre-
running from the Issue Date shown on the mium payment which requires proof of
Policy Data Page. After this policy has been insurability, the corresponding Death Benefit
in force during the insured's lifetime for two increase has its own two-year contestable
years from the Issue Date, we cannot claim period measured from the date of the increase
your policy is void or refuse to pay any pro- in Death Benefit.
ceeds unless the policy has lapsed.
If this policy is reinstated, this provision will
be measured from the date of reinstatement.
----------------------------------------------------------------------------------------------------
AGE AND SEX
If the insured's age or sex is misstated, the recent cost of insurance would purchase us-
Death Benefit including paid-up life insur- ing the current cost of insurance rate for the
ance, if any, will be the amount that the most correct age and sex.
----------------------------------------------------------------------------------------------------
SUICIDE
If the insured commits suicide, while sane or insurability, the corresponding Death Benefit
insane, within two years of the Issue Date, increase has its own two-year suicide limita-
we do not pay the Death Benefit. Instead, we tion for the proceeds associated with that in-
refund all premiums paid on this policy and crease. If the insured commits suicide, while
any attached riders, minus any Loan Amounts sane or insane, within two years of the effec-
and partial withdrawals. tive date of the increase, we pay the Death
Benefit prior to the increase and refund the
If you make a Face Amount increase or pre- cost of insurance for that increase.
mium payment which requires proof of
----------------------------------------------------------------------------------------------------
TERMINATION
This policy terminates when any of the fol- 3.
lowing occur: The policy is surrendered for its full Cash
Surrender Value.
1.
The required payment is not paid by the end If we make a Monthly Deduction from the
of the grace period; Accumulation Value after this policy termi-
nates, the deduction is not considered a rein-
2. statement of the policy or a waiver of the
The insured dies; or termination.
----------------------------------------------------------------------------------------------------
CONVERSION RIGHT
During the first two policy years, you may The death benefit of the new policy will be,
"convert" this policy to any fixed benefit at your option, either:
whole life insurance policy issued by us in the
state of New Jersey. Also, during the first 24 1.
months following the effective date of a Face A death benefit which is equal to the Death
Amount increase, you may "convert" the Face Benefit of this policy on the effective date of
Amount increase of this policy to any fixed the conversion, or in the case of a Face
benefit whole life insurance policy issued by Amount increase, a death benefit equal to the
us in the state of New Jersey. The new pol- increase in Face Amount; or
icy will be issued for the insured without
proof of insurability. The premium class for 2.
the new policy will be the same as the pre- A net amount at risk which equals the Death
mium class for this policy. If the entire policy Benefit of this policy on the effective date of
is being converted, the date of the new policy the conversion, less the Accumulation Value
will be the Policy Date of this policy. If a on that date, or in the case of a Face Amount
Face Amount increase is being converted, the increase, a net amount at risk which equals
date of the new policy will be the effective the Face Amount increase on the effective
date of the Face Amount increase. date of the conversion less the Accumulation
Value on that date which is considered to be
part of the Face Amount increase.
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85-047 27
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</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
GENERAL PROVISIONS The conversion will be made upon the fol- d.
(CONTINUED) lowing: If this entire policy is being converted, you
must repay any outstanding Loan Amount.
a.
We must receive a written conversion re- e.
quest. If this entire policy is being converted, the
effective date of the conversion will be the
b. date on which we receive both your written
If this entire policy is being converted, this conversion request and this policy. If you are
policy must be surrendered to us. converting a Face Amount increase, the ef-
fective date of the conversion will be the date
on which we receive your written conversion
c. request.
The conversion must be made while this pol-
icy is in force.
----------------------------------------------------------------------------------------------------
ANNUAL STATEMENT
Each year we will send you an annual state- g.
ment, free of charge, showing the following: Death Benefit;
a. h.
Face Amount; Loan Amounts;
b. i.
Cash Surrender Values; Partial withdrawals;
c. j.
Accumulated Values; Transfers; and
d. k.
Premiums paid; Charges since the last statement.
e. We will make a charge not to exceed $50 for
Planned periodic premiums; any additional statements you request.
f.
Interest credits;
----------------------------------------------------------------------------------------------------
PROJECTION REPORT
If you ask, we will provide a report projecting c.
future results. The report will be based on The Accumulation Value at the end of the
the following: prior policy year; and
a. d.
The Death Benefit Option you specify; Any other assumptions specified by you or
us, subject to any limitations imposed by the
b. Securities and Exchange Commission.
Planned periodic premiums you specify;
We will make a charge not to exceed $50 for
each Projection Report you request.
----------------------------------------------------------------------------------------------------
NONPARTICIPATING
This contract does not entitle you to partic- investment yield rates, mortality rates, taxes,
ipate in our surplus. We will determine cost policy persistency and other experience fac-
of insurance rates, expense charges, and the tors. We will not increase your cost of insur-
interest rate we credit to the Fixed Accumu- ance rates or expense charges, or decrease
lation Value based upon our expectations as the interest rate we credit to your Fixed Ac-
to future cost factors and investment income. cumulation Value in order to recover our past
In setting cost of insurance rates, we consider losses.
many factors, including, but not limited to,
- ------------------------------------------------------------------------------------------------------------------------
- ---------------- ---------------
5083 28
- ---------------- ---------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
GENERAL PROVISIONS AMENDMENT
(CONTINUED) We reserve the right to amend this policy to - The Code;
include any future changes relating to the
following: - Internal Revenue Service rulings and
regulations; and
1.
Any Securities and Exchange Commission - Any requirements imposed by the
rulings and regulations; Internal Revenue Service.
2. We will send you a copy of any amendments
This policy's qualification for treatment as a promptly.
Life Insurance policy under the following:
----------------------------------------------------------------------------------------------------
DISCLAIMER
We are not liable for any tax or tax penalty the requirements of the Code, regulations and
you owe resulting from failure to comply with rulings imposed on this policy.
- ------------------------------------------------------------------------------------------------------------------------
- ---------------- ---------------
85-173 29
- ---------------- ---------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
FLEXIBLE PREMIUM
VARIABLE LIFE
INSURANCE POLICY
------------------------------------------------- ---------------------------------------------
Variable and/or Fixed Death Benefit Guarantee
Accumulation Values ---------------------------------------------
------------------------------------------------- Death Benefit Options
Flexible Premiums Payable to the ---------------------------------------------
Insured's Age 95 Nonparticipating
------------------------------------------------- ---------------------------------------------
Adjustable Face Amount
-------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
NOTICE To make a claim or exercise your Writing directly to us will save time and
rights under this policy, please write to expense. You do not need to hire any
us at the address below and include person, firm, or corporation unless,
your policy number: because of a dispute, you wish to.
[LOGO] NORTHWESTERN NATIONAL LIFE INSURANCE
COMPANY
Box 20
Minneapolis
Minnesota 55440
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Page 30 85-174
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</TABLE>
<PAGE>
EX-99.2
February 22, 1996
Northwestern National Life
Insurance Company
20 Washington Avenue South
Minneapolis, Minnesota 55440
Madam/Sir:
In connection with the proposed registration under the Securities Act of
1933, as amended, of flexible premium variable life insurance policies (the
"Policies") and interests in Select*Life Variable Account (the "Variable
Account"), I have examined documents relating to the establishment of the
Variable Account by the Board of Directors of Northwestern National Life
Insurance Company (the "Company") as a separate account for assets applicable
to variable contracts, pursuant to Minnesota Statutes Sections 61A.13 to
61A.21, as amended, and the Registration Statement, on Form S-6, File
No. 33-57244 (the "Registration Statement") and I have examined such other
documents and have reviewed such matters as I deemed necessary for this
opinion, and I advise you that in my opinion:
1. The Variable Account is a separate account of the Company duly
created and validly existing pursuant to the laws of the Statute of
Minnesota.
2. The Policies, when issued in accordance with the Prospectus
constituting a part of the Registration Statement and upon compliance
with applicable local law, will be legal and binding obligations of the
Company in accordance with their respective terms.
3. The portion of the assets held in the Variable Account equal to
reserves and other contract liabilities with respect to the Variable
Accounts are not chargeable with liabilities arising out of any other
business the Company may conduct.
I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of my name under the heading "Legal
Matters" in the Prospectus constituting a part of the Registration Statement
and to the references to me wherever appearing therein.
Very truly yours,
/s/ JAMES E. NELSON
- ----------------------
James E. Nelson
Counsel
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EX-99.D1
DESCRIPTION OF NORTHWESTERN NATIONAL LIFE INSURANCE
COMPANY'S PURCHASE, REDEMPTION, TRANSFER, AND CONVERSION
PROCEDURES FOR POLICY
This document sets forth the administrative procedures that will be followed
by Northwestern National Life Insurance Company ("NWNL") in connection with
the issuance of its Flexible Premium Variable Life Insurance Policy (the
"Policy") described in this Registration Statement, the transfer of the
Policy's assets, the redemption by Policy owners of their interests in the
Policies and conversion to fixed benefit insurance. Unless otherwise defined
herein, all capitalized terms used below have the meanings ascribed to them
in the Prospectus for the Policy contained in this Registration Statement.
"PUBLIC OFFERING PRICE": PURCHASE AND RELATED TRANSACTIONS
The following is a summary of the principal Policy provisions and
administrative procedures which constitute either direct or indirect purchase
transactions. The insurance aspects of the Policy cause procedures to differ
in certain significant respects from purchase procedures of mutual funds or
contractual plans.
PREMIUM SCHEDULES AND UNDERWRITING STANDARDS
Premiums for the Policy will not be the same for all Policy owners. There is
no insurance until the initial premium is paid. The initial premium must be
equal to or greater than three Minimum Monthly Premiums (see "Payment and
Allocation of Premiums - Minimum Initial Premium") unless the Policy owner
authorizes premiums to be paid by bank account monthly deduction or
government allotment. In those cases, NWNL will accept one Minimum Monthly
Premium.
The Policy has a Death Benefit Guarantee if the Policy owner chooses to pay
premiums sufficient to maintain the Death Benefit Guarantee set forth in the
Policy. If the Death Benefit Guarantee is in effect during the Death Benefit
Guarantee Period (until the Insured reaches age 65 or five Policy Years, if
longer) NWNL will then guarantee that the Policy will remain in force during
such period, even if the Policy's Cash Surrender Value is not sufficient to
pay the Monthly Deduction due.
After the initial premium, the Policy owner will determine a planned periodic
premium schedule that provides for a level premium payable at a fixed
interval. Payment of premium according to this schedule is not, however,
mandatory and failure to do so will not of itself cause the Policy to lapse.
Instead, Policy owners may determine the amount and timing of subsequent
premiums subject to the following restrictions:
1. In most cases, payment of a cumulative premium sufficient
to maintain the Death Benefit Guarantee will be required to
keep the Policy in force during the Death Benefit Guarantee
period.
2. NWNL may choose not to accept a premium less than $25.00.
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3. NWNL may require proof that the insured is still insurable
if any premium would increase the difference between the
Death Benefit Guarantee and the Accumulation Value.
4. NWNL will return to the Policy owner any premium paid that
would exceed the current maximum premium payments allowed
for life insurance under federal law.
The Policy will stay in force as long as the Cash Surrender Value is
sufficient to pay the Monthly Deduction (the charges imposed in connection
with the Policy). The amount of premium, if any, required to keep the Policy
in force depends on the Cash Surrender Value which in turn depends on such
factors as the investment experience, the amount of any outstanding loans,
and the Surrender Charge. The Monthly Deduction varies with the cost of
insurance charge. The cost of insurance is based on the principal of pooling
and distribution of mortality risks, which assumes that each Policy owner
pays a premium commensurate with his or her mortality risk which is
actuarially determined based on attained age, premium rate class, and in most
instances, the insured's sex. The same rate applies to all insureds in a
given actuarial category. The rate is based on NWNL's expectations as to
future mortality experience.
The Policy will be sold according to established underwriting standards and
state insurance laws. State insurance laws prohibit unfair discrimination
among Policy owners but recognize that premiums must be based on factors such
as age, health, occupation and in most states, the sex of the insured.
APPLICATION AND INITIAL PREMIUM PROCESSING
NWNL will follow certain insurance underwriting procedures to determine
whether the proposed insured is insurable. Underwriting evaluates risks from
the information on the application, verification procedures such as medical
examinations, and additional information furnished by the applicant on
request. NWNL will not issue the Policy until the underwriting procedure has
been completed.
If the minimum initial premium is submitted with the application, insurance
coverage will begin on the Issue Date. The Issue Date will ordinarily be the
later of the date of the application or the date of any required medical
examination undertaken according to NWNL's underwriting requirements. When,
however, underwriting approval has not occurred within 45 days of receipt of
the application, the Issue Date will be the date of underwriting approval. If
a premium is not paid with the application, insurance coverage will begin on
the later of the Issue Date or the date the premium is received.
In the case of policies issued under government allotment, the Issue Date
will be the first day of the month in which NWNL collects the first premium
from government allotment deduction, regardless of whether a premium is
collected with the application. The premium collected with the application
will be allocated to the Variable Account and Fixed Account on the Valuation
Date next following the Issue Date.
The Policy Date is generally the same date as the Issue Date. It is used in
determining Policy Years, Policy Months, Monthly Anniversaries and Policy
Anniversaries. It is also the date as of which the insurance age of the
proposed insured is determined. A Policy Date may be any other date mutually
agreed to by NWNL and the Policy owner.
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NWNL will credit Net Premiums (gross premiums less the Premium Expense
Charge) from the Policy to the Select*Life Variable Account ("Variable
Account") or to the Fixed Account on the later of the following dates:
1. The Valuation Date(1) following the date of underwriting
approval;
2. The Valuation Date on or next following the Policy Date;
3. The Valuation Date on or next following the date NWNL
receives at least the required minimum initial premium
payment; or
4. In the case of Policies issued under government allotment
programs, the Valuation Date next following the Issue Date.
ALLOCATION OF PREMIUMS
The Policy owner chooses the initial allocation of Net Premiums to the Fixed
Account (in those states where it is available) and the Sub-Accounts of the
Variable Account on the application for the Policy. The Policy owner may
change the allocation at any time by notifying NWNL in writing. The Policy
owner may allocate 100% of Net Premiums to any Sub-account or the Policy
owner may divide in whole percentages the Net Premium and allocate such
amounts among more than one Sub-account. NWNL reserves the right to adjust
the allocation of Net Premiums to eliminate fractional percentages.
PREMIUM PROCESSING
Whenever a premium payment is received, NWNL will subtract 5% of the premium
as a Premium Expense Charge. NWNL may, in the future, deduct a premium
processing charge of up to $2.00 from each premium payment as a part of this
charge. The Net Premium is credited to the Variable and/or Fixed Account on
the Valuation Date on or next following the date NWNL receives the premium
payment in accordance with the Policy owner's current premium allocation.
REINSTATEMENT
A lapsed Policy and any riders may be reinstated anytime within five years
after lapse as long as the Policy has not been surrendered for its Cash
Surrender Value. To reinstate the Policy and any riders the Policy owner must
submit evidence of insurability satisfactory to NWNL for the insured, and
must pay a premium sufficient to keep the Policy and any riders in force for
at least two months following the date of reinstatement.
The Death Benefit Guarantee cannot be reinstated.
LOAN REPAYMENTS
The interest rate charged on Policy loans will be an annual rate of 7.40%,
payable in advance. After the tenth Policy Year, NWNL will charge interest at
an annual rate of 5.21%, payable in advance, on that portion of the loan
amount that is not in excess of (a) the Accumulation Value less (b) the total
of all premiums paid and all partial withdrawals. Any excess of this amount
will be charged interest at the annual rate of 7.40%.
A Policy loan may be repaid anytime while the insured is living before the
insured reaches age 95. Unless the Policy owner specifies that a payment is a
loan repayment, NWNL
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generally considers any payments it receives as premium payments and not loan
repayments. However, NWNL reserves the right, at its discretion, to apply any
payment it receives as a loan repayment.
Loan repayments are credited to the Fixed Account and the Variable Account in
the form of Net Premiums without a Premium Expense Charge. NWNL credits
repayments according to the current premium allocation. Repayments are
credited at the end of the Valuation Period during which the payment was
received.
CORRECTION OF A MISSTATEMENT OF AGE OR SEX
If the insured's age or sex is misstated, NWNL adjusts the proceeds by the
difference between the Monthly Deductions made and those that should have
been made.
"REDEMPTION PROCEDURES": SURRENDER AND RELATED TRANSACTIONS
The following is a summary of the principal Policy provisions and
administrative procedures which constitute redemptions under the Policy.
These procedures differ in certain significant respects from redemption
procedures of mutual funds or contractual plans.
CASH SURRENDER VALUE
At any time before the earlier of the death of the insured or the maturity
date, the Policy owner may totally surrender the Policy by sending NWNL a
written request. The amount available for surrender is the Accumulation Value
of the Policy reduced by any Loan Amount, unpaid Monthly Deductions, and
during the first 15 Policy Years and the first 15 years following a
requested increase in Face Amount, this amount is also reduced by a Surrender
Charge. The Surrender Charge is determined separately for the Face Amount and
any subsequent increases in Face Amount. The Surrender Charge is based on
several factors such as the Face Amount, the Policy Year, and the insured's
age and sex. The Surrender Charge is shown in the Policy. The total amount
available at surrender is called the Cash Surrender Value.
The Cash Surrender Value is calculated at the end of the Valuation Period
during which NWNL receives the Policy owner's surrender request. The Policy
owner may, however, elect to receive all or part of the Cash Surrender Value
under one of the settlement options described in the Policy. All fixed
benefit settlement options are subject to the restrictions and limitations
set forth in the Policy.
PARTIAL WITHDRAWALS
The Policy owner may also withdraw part of the Policy's Cash Surrender Value
by sending NWNL a written request. Only one partial withdrawal is allowed in
any Policy Year. The amount of any partial withdrawal must be at least
$500.00 but may not be more than 20% of the Cash Surrender Value. NWNL
currently makes a $10.00 charge for each partial withdrawal. NWNL makes
partial withdrawals from the Fixed Accumulation Value and the Variable
Accumulation Value on a proportionate basis. For the purpose of determining
the proportions, the outstanding Loan Amount is subtracted from the Fixed
Accumulation Value.
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NWNL will generally pay the partial withdrawal within seven days of receipt of
the written request(2).
DEATH BENEFITS AND BENEFITS AT AGE 95
As long as the Policy is in force, NWNL will generally pay the proceeds of
the Policy to the named beneficiary in accordance with the designated Death
Benefit Option within seven days after the receipt of due proof of the
Insured's death. Payment of proceeds may, however, be postponed under certain
circumstances(2). The amount of the Death Benefit is determined on the
Valuation Date on or next following the date of the insured's death. The
proceeds payable under the designated Death Benefit Option will be reduced by
any Loan Amount and any unpaid Monthly Deduction. These proceeds will be
increased by any additional insurance provided by rider and by the refund of
any unearned Policy loan interest.
The amount of the Death Benefit is guaranteed not to be less than the current
Face Amount of the Policy. The Death Benefit may, however, exceed the current
Face Amount. The amount by which the Death Benefit exceeds the Face Amount
depends upon the Death Benefit Option in effect and the Accumulation Value of
the Policy. Under the Level Amount Option, the Death Benefit is the greater
of the Face Amount or the applicable percentage of Accumulation Value set
forth in the Option. Under the Variable Amount Option, the Death Benefit will
always vary with the Accumulation Value since the Death Benefit is the
greater of the Face Amount plus the Accumulation Value of the Policy, or the
applicable percentage of the Accumulation Value set forth in the Option.
If the insured is living at age 95 and the Policy is in force, the Cash
Surrender Value of the Policy will automatically be applied to purchase
single premium paid-up life insurance, unless the insured notifies NWNL in
writing on or before attaining age 95 that the Cash Surrender Value should be
paid in cash.
LOANS
After the first Policy Year, the Policy owner may use the Policy as security
to take out a loan. The maximum amount that the Policy owner may borrow at
any time is 75% of the Policy's Cash Value (the Accumulation Value less any
Surrender Charge). As required by state law, higher percentages of Cash Value
may be borrowed by Policy owners in Texas (100%) and in Alabama, Maryland,
and Virginia (90%). Each Policy loan must be at least $500.00 except in
Connecticut where the loan must be at least $200.00. The Loan Value will be
determined on the Valuation Date following the date the request was received.
The portion of the loan allocated to the Sub-accounts of the Variable Account
will normally be paid within seven days after receipt of the written request.
Postponement of loans may take place under certain circumstances(2).
The amounts held as security for the Policy loan are segregated within the
Fixed Accumulation Value of the Policy but will be credited with interest on
a basis different from other amounts in the Fixed Account. The total of all
outstanding loans is called the Loan Amount. All amounts held in the Fixed
Account as security for Policy loans will be credited with interest at an
effective annual rate currently equal to 5.50% (guaranteed to be no less than
4.00%). No additional interest will be credited to these amounts.
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The interest rate charged on Policy loans will be an annual rate of 7.40%,
payable in advance. After the tenth Policy Year, NWNL will charge interest at
an annual rate of 5.21%, payable in advance, on that portion of the Loan
Amount that is not in excess of (a) Accumulation Value less (b) the total of
all premiums paid and all partial withdrawals. Any excess of this amount will
be charged interest at the annual rate of 7.40%.
Amounts held as security for a Policy loan will come from the Fixed Account
and the Sub-accounts of the Variable Account in the same proportion that
the Policy's Fixed Accumulation Value less any Loan Amount and the Policy's
Variable Accumulation Value in each Sub-account, bear to the Policy's total
Accumulation Value less any Loan Amount.
The portion of the Policy loan allocated to each Sub-account will be
transferred from the Sub-account to the Fixed Account thereby reducing the
value held in the Sub-account.
The Loan Amount is deducted from the total premium paid for purposes of
calculating whether the Policy owner has paid premiums sufficient to maintain
the Death Benefit Guarantee. The Loan Amount is deducted from the proceeds
when NWNL pays a death claim. Loans have priority over the claims of an
assignee or any other person. A Policy loan may be repaid in whole or in
part at any time on or before the insured's age 95 while the insured is
living.
POLICY LAPSE
If the Death Benefit Guarantee is not in effect, the Policy will lapse at the
end of a 61-day grace period if, as of that Monthly Anniversary, the Loan
Amount is greater than the Policy's Accumulation Value (plus any Sales Charge
Refund) reduced by the applicable Surrender Charge; or the Cash Surrender
Value (plus any Sales Charge Refund) is not sufficient to pay the Monthly
Deduction due. The grace period begins on the date NWNL notifies the Policy
owner and any collateral assignees of record of the required premium. The
Policy owner will then have 61 days from the date the notice is mailed, to
make the required payment to keep the Policy in force. If the payment is not
received within the 61-day period, the Policy will lapse. If the insured dies
during this 61-day period, the Loan Amount and any unpaid Monthly Deductions
will be deducted from the proceeds payable.
TRANSFERS
The Variable Account currently has four series Funds with seventeen
portfolios available for investment by the Sub-accounts. Each Sub-account
invests in shares, at net asset value, of a specified portfolio of the four
series Funds. A Policy owner may transfer Accumulation Value between the
Fixed Account and the Sub-accounts of the Variable Account or among the
Sub-accounts of the Variable Account by written request, subject to any
conditions the Funds whose shares are involved may impose. NWNL currently
allows twelve transfers in a Policy Year, although it reserves the right to
limit transfers to no more than four per Policy Year. NWNL considers all
transfers received in the same request and made on the same initial Valuation
Date as one transfer. Transfers are made on the Valuation Date on or next
following the date the request is received.
To transfer all or part of the Variable Accumulation Value from a
Sub-account, Accumulation Units are redeemed and their value is reinvested in
other Sub-accounts or in the Fixed Account as directed by the Policy owner.
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A Policy owner may transfer all or part of the Fixed Accumulation Value to
the Sub-accounts of the Variable Account, subject to the following
limitations:
1. The request to transfer must be postmarked no more than
30 days before or after the Policy Anniversary in any year,
and only one transfer is permitted during this period;
2. The Fixed Accumulation Value after the transfer must be at
least equal to the Loan Amount;
3. No more than 50% of the Fixed Accumulation Value, less any
Loan Amount, may be transferred unless the balance, after
the transfer, would be less than $1,000.00, in which event
the full Fixed Accumulation Value, less any Loan Amount, may
be transferred; and
4. The Policy owner must transfer at least the lesser of
$500.00 or the total Fixed Accumulation Value, less any
Loan Amount.
While NWNL does not currently impose a transfer charge, it reserves the right
to make a charge not to exceed $25.00 per transfer.
NWNL also allows transfers to be made through Dollar Cost Averaging and
Portfolio Rebalancing Services.
Transfers resulting from loans and exercising Conversion Rights under the
Policy are not subject to any transfer charges and do not count against the
twelve-transfer limitation.
CONVERSION
In states where the Fixed Account is available, the Policy owner may, at any
time during the first two Policy Years or the first two years following a
requested increase in Face Amount, request a transfer from the Variable
Account to the Fixed Account and indicate that he or she is exercising the
Conversion Rights under the Policy. Such transfer will not be subject to the
transfer charge and will not count against the twelve-transfer limit. At the
time of the transfer, there is no effect on the Policy's Death Benefit, Face
Amount, net amount at risk, Rate Class, or issue age. To the extent that the
Accumulation Value is held in the Fixed Account, the benefits of the Policy
do not vary with the investment performance of the Variable Account.
In states where the Fixed Account is not available, or where otherwise
required by State law or regulation, the Policy owner may, at any time during
the first two Policy Years or the first two years following a requested
increase in Face Amount, convert the Policy to a permanent fixed benefit life
insurance policy issued by NWNL. No evidence of insurability will be required
and the new Policy will have the same issue age and premium class as the
Policy. On the effective date of the conversion, the Policy owner will have
the option to select one of the following two death benefits under the new
policy:
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(a) a death benefit which is equal to the Death Benefit of the Policy
on the effective date of the conversion, or in the case of a Face
Amount increase, a death benefit equal to the increase in Face
Amount; or
(b) a net amount at risk which equals the Death Benefit of the Policy
on the effective date of the conversion, less the Accumulation
Value on that date, or in the case of a Face Amount increase, a net
amount at risk which equals the Face Amount increase on the
effective date of conversion less the Accumulation Value on that
date which is considered to be part of the Face Amount increase.
The conversion will be subject to an equitable adjustment in payments and
Policy values to reflect variances, if any, in the payments and Policy values
under the Policy and the new Policy. An additional premium payment may be
required. The new Policy's provisions and charges will be the same as those
that would have been in effect had the new Policy been issued on the Policy
Date.
(1) VALUATION DATE - EACH DAY THE NEW YORK STOCK EXCHANGE IS OPEN FOR
TRADING OR ANY OTHER DATE THERE IS SUFFICIENT TRADING IN A FUND'S
PORTFOLIO SECURITIES TO MATERIALLY AFFECT THE UNIT VALUE IN THE
CORRESPONDING SUB-ACCOUNT.
VALUATION PERIOD - THE PERIOD BETWEEN TWO SUCCESSIVE VALUATION DATES,
COMMENCING AT THE CLOSE OF BUSINESS OF A VALUATION DATE AND ENDING
AT THE CLOSE OF BUSINESS OF THE NEXT VALUATION DATE.
(2) PAYMENTS FROM THE VARIABLE ACCOUNT FOR DEATH BENEFITS, CASH
SURRENDER, PARTIAL WITHDRAWAL, OR POLICY LOANS WILL NORMALLY BE
PAID WITHIN SEVEN DAYS OF RECEIPT OF THE WRITTEN REQUEST AND
RECEIPT OF THE POLICY FORM, IF REQUIRED.
NWNL MAY DELAY MAKING THE PAYMENT WHEN IT IS NOT ABLE TO
DETERMINE THE VARIABLE ACCUMULATION VALUE BECAUSE THE NEW YORK
STOCK EXCHANGE IS CLOSED FOR TRADING; OR THE SECURITIES AND
EXCHANGE COMMISSION DETERMINES THAT A STATE OF EMERGENCY EXISTS.
NWNL HAS THE RIGHT TO DELAY SUCH PAYMENTS FROM THE FIXED ACCOUNT
FOR UP TO SIX MONTHS FROM THE DATE IT RECEIVES THE REQUEST,
SUBJECT TO ANY STATE REQUIREMENTS. IF PAYMENT IS DELAYED FOR 30
DAYS OR MORE, NWNL PAYS INTEREST AT AN EFFECTIVE ANNUAL RATE OF
3-1/2% FROM THE DATE OF THE INSURED'S DEATH, SURRENDER, PARTIAL
WITHDRAWAL, OR POLICY LOAN REQUEST TO THE DATE OF PAYMENT.
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NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ R. Michael Conley
---------------------
R. Michael Conley
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
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NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ John H. Flittie
---------------------
John H. Flittie
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Wayne R. Huneke
---------------------
Wayne R. Huneke
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 2nd day of January, 1996.
--- ------- --
/s/ William R. Merriam
---------------------
William R. Merriam
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Craig R. Rodby
---------------------
Craig R. Rodby
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ David H. Roe
---------------------
David H. Roe
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Robert C. Salipante
-----------------------
Robert C. Salipante
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Royce N. Sanner
---------------------
Royce N. Sanner
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Donald L. Swanson
---------------------
Donald L. Swanson
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ John G. Turner
---------------------
John G. Turner
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
<PAGE>
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
POWER OF ATTORNEY
OF DIRECTOR AND OFFICER
The undersigned director and/or officer of NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY, a Minnesota corporation, does hereby make, constitute and
appoint ROYCE N. SANNER, RICHARD R. CROWL, MICHAEL S. FISCHER, JAMES E.
NELSON, ROBERT B. SAGINAW, and JEFFREY A. PROULX, and each or any one of
them, the undersigned's true and lawful attorneys-in-fact, with full power of
substitution, for the undersigned and in the undersigned's name, place and
stead, to sign and affix the undersigned's name as such director and/or
officer of said Company to a Registration Statement or Registration
Statements, under the Securities Act of 1933 (1933 Act) and the Investment
Company Act of 1940 (1940 Act) and any other forms applicable to such
registrations, and all amendments, including post-effective amendments,
thereto, to be filed by said Company with the Securities and Exchange
Commission, Washington, DC, in connection with the registration under the
1933 and 1940 Acts, as amended, of variable annuity contracts and
accumulation units in the MFS/NWNL Variable Account, the NWNL Select Variable
Account, the Northstar/NWNL Variable Account, and of variable life insurance
policies and accumulation units in the Select*Life Variable Account, and to file
the same, with all exhibits thereto and other supporting documents, with said
Commission, granting unto said attorneys-in-fact, and each of them, full
power and authority to do and perform any and all acts necessary or
incidental to the performance and execution of the powers herein expressly
granted.
IN WITNESS WHEREOF, the undersigned has hereunto set the undersigned's
hand this 19th day of October, 1995.
---- ------- --
/s/ Steven W. Wishart
---------------------
Steven W. Wishart
MFS/NWNL
NWNL Select
Northstar/NWNL
Select*Life
Rev. 12/95
