<PAGE>
As filed with the Securities and Exchange Commission on
April 30, 1996
'33 Act File No. 33-66786
'40 Act File No. 811-7924
____________________________________________________________________
____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1993 [ ]
Pre-Effective Amendment No. _______ [ ]
Post-Effective Amendment No. ___6___ [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT ACT OF 1940 [ ]
Amendment No. ___8___ [X]
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
LINCOLN BENEFIT LIFE COMPANY
Depositor
206 South 13th Street
Lincoln, Nebraska 68508
_______
JOHN MORRIS
Lincoln Benefit Life Company
206 South 13th Street
Lincoln, Nebraska 68508
Approximate Date of Proposed Public Offering: As soon as practicable after
effective date.
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
x on May 1, 1996 pursuant to paragraph (b) of Rule 485
---
___ 60 days after filing pursuant to paragraph (a) of Rule 485
___ on (date) pursuant to paragraph (a) of Rule 485
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
has registered an indefinite amount of securities under the Securities Act of
1933. A 24f-2 notice for the fiscal year ending December 31, 1995 was filed on
February 29, 1996.
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
CROSS REFERENCE SHEET
ITEM NUMBER IN FORM N-4 CAPTION
- ----------------------- -------
<TABLE>
<CAPTION>
PART A - PROSPECTUS
-------------------
<S> <C> <C>
1. Cover Page.......................... Cover Page
2. Definitions......................... Definitions
3. Synopsis............................ Questions & Answers About the Contract
4. Condensed Financial Information..... Condensed Financial Information
5. General Description of Registrant,.. Description of Lincoln Benefit Life
Depositor & Portfolio Companies Company & the Separate Account;
Separate Account Investments
6. Deductions.......................... Contract Charges
7. General Description of Variable..... Description of the Contracts; Annuity
Period; Purchases, Withdrawals &
Contract Value; Administration
8. Annuity Period...................... Annuity Period
9. Death Benefit....................... Description of the Contracts;
Annuity Period
10. Purchases & Contract Value.......... Purchases, Withdrawals & Contract Value
11. Redemptions......................... Questions & Answers About the Contract;
Purchases, Withdrawals & Contract Value
12. Taxes............................... Taxes
13. Legal Proceedings................... Legal Proceedings
14. Table of Contents of the Statement.. Additional Information about the
of Additional Information Separate Account
</TABLE>
i
<PAGE>
PART B - STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------
Certain information required in Part B of the Registration Statement has been
included within the Prospectus forming part of this Registration Statement; the
following cross-references suffixed with ("P") are made by reference to the
captions in the Prospectus:
ITEM NUMBER IN FORM N-4 CAPTION
- ----------------------- -------
<TABLE>
<CAPTION>
<S> <C> <C>
15. Cover Page...................... Cover Page
16. Table of Contents............... Table of Contents
17. General Information & History... Description of Lincoln Benefit Life
Company & the Separate Account(P);
Separate Account Investments(P)
18. Services........................ Contract Charges(P); Custodian(P);
Financial Statements
19. Purchase of Securities Being.... Purchases, Withdrawals & Contract
Offered Value(P); Contract Charges(P)
20. Underwriters.................... Distribution of Contracts
21. Calculation of Performance Data. Separate Account Performance
22. Annuity Payments................ The Contract
23. Financial Statements............ Financial Statements
</TABLE>
PART C
------
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of this Registration Statement.
ii
<PAGE>
FLEXIBLE PREMIUM
INDIVIDUAL
DEFERRED VARIABLE ANNUITY CONTRACTS
ISSUED BY
LINCOLN BENEFIT LIFE COMPANY
IN CONNECTION WITH
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
STREET ADDRESS: 206 SOUTH 13TH ST., LINCOLN, NE 68508
MAILING ADDRESS: P. O. BOX 82532, LINCOLN, NE 68501-2532
TELEPHONE NUMBER: 1-800-865-5237
This prospectus describes a Flexible Premium Individual Deferred Variable
Annuity Contract ("Contract") offered by Lincoln Benefit Life Company
("Company"). The Contract is a deferred annuity designed to aid you in long-term
financial planning. It is offered to you on either a tax qualified or non-tax
qualified basis.
The Company is a wholly owned subsidiary of Allstate Life Insurance Company.
Contract values will be allocated to the Lincoln Benefit Life Variable Annuity
Account ("Separate Account") and/or the Fixed Account, discussed further on
pages 9 and 11. The Separate Account has a series of subaccounts which currently
invest in shares of these mutual funds:
JANUS ASPEN SERIES: Flexible Income Portfolio; Balanced Portfolio; Growth
Portfolio; Aggressive Growth Portfolio; Worldwide Growth Portfolio
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND: Money Market Portfolio; Equity-
Income Portfolio; Growth Portfolio; Overseas Portfolio
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II: Asset Manager Portfolio;
Contrafund Portfolio
IAI RETIREMENT FUNDS, INC.: IAI Regional Portfolio; IAI Balanced Portfolio; IAI
Reserve Portfolio
FEDERATED INSURANCE MANAGEMENT SERIES: Federated Utility Fund II; Federated Fund
for U.S. Government Securities II; Federated High Income Bond Fund II
SCUDDER VARIABLE LIFE INVESTMENT FUND: Bond Portfolio; Balanced Portfolio
Other investment options may be made available in the future.
A Contract may not be issued to a prospective Contract Owner if either you or
the Annuitant has attained age 81 prior to the time the application is received
by the Company.
This prospectus sets forth the information you ought to know before investing.
You should read it and keep it for future reference.
A Statement of Additional Information, which has the same date as this
Prospectus, has been filed with the Securities and Exchange Commission and is
incorporated herein by reference. You can obtain a free copy of it from us by
writing us or calling us at the telephone number given above. The Table of
Contents of the Statement of Additional Information appears on page 23 of this
prospectus.
This prospectus is valid only when accompanied or preceded by current
prospectuses for the Janus Aspen Series; the Fidelity's Variable Insurance
Products Fund and Variable Insurance Products Fund II; the IAI Retirement Funds,
Inc.; the Federated Insurance Management Series; and the Scudder Variable Life
Investment Fund.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR YOUR FUTURE REFERENCE.
THE DATE OF THIS PROSPECTUS IS MAY 1, 1996.
1
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Definitions................................................. 3
Questions and Answers About the Contract.................... 4
Fee Tables.................................................. 6
Examples.................................................... 7
Explanation of Fee Tables and Examples...................... 8
Condensed Financial Information............................. 8
Description of Lincoln Benefit Life Company and
the Investment Options.................................... 9
Lincoln Benefit Life Company........................... 9
Separate Account....................................... 9
Separate Account Investments................................ 9
The Portfolios......................................... 9
Voting Rights..........................................11
Substitution of Securities.............................11
The Fixed Account...........................................11
Contract Charges............................................12
Mortality and Expense Risk Charge......................12
Administrative Charges.................................12
Contract Administration Charge......................12
Administrative Expense Charge.......................12
Transfer Fee........................................12
Sales Charges..........................................12
Withdrawal Charge...................................12
Free Withdrawal.....................................13
Waiver of Withdrawal Charge for
Certain Qualified Plan
Withdrawals.........................................14
Premium Taxes..........................................14
Deduction for Separate Account
Income Taxes........................................14
Other Expenses.........................................14
Description of the Contracts................................14
Summary................................................14
Contract Owner.........................................14
Annuitant..............................................14
Modification of the Contract...........................14
Assignment.............................................14
Death Benefit..........................................15
Beneficiary............................................15
Voting Rights of Contract Owners.......................15
Purchases, Withdrawals and Contract Value...................15
Minimum Purchase Payment...............................15
Automatic Payment Plan.................................15
Automatic Dollar Cost Averaging
Program.............................................15
Portfolio Rebalancing..................................16
Contract Value.........................................16
Separate Account Accumulation
Unit Value..........................................16
Allocation of Purchase Payments........................17
Large Case Credit......................................17
Transfer During Accumulation Period....................17
Transfers Authorized by Telephone......................17
Contract Loans for 401(a), 401(k),
and 403(b) Contracts ...............................18
Withdrawals (Redemptions)..............................18
Systematic Withdrawal Program..........................19
ERISA Plans............................................19
Minimum Contract Value.................................19
Annuity Period..............................................19
Annuity Date...........................................19
Deferment of Payments..................................20
Annuity Options........................................20
Other Options..........................................20
Death Benefit During Annuity Period....................20
Variable Annuity Payments..............................20
Administration..............................................21
Taxes.......................................................21
General................................................21
Withholding Tax on Distributions.......................22
Tax Treatment of Assignments...........................22
Tax Treatment of Withdrawals...........................22
Qualified Plans....................................22
Non-Qualified Plans................................22
Distribution of Contracts...................................23
Legal Proceedings...........................................23
Legal Matters...............................................23
Registration Statement......................................23
Financial Statements .......................................23
Additional Information About
the Separate Account.................... ..............23
Table of Contents of Statement of
Additional Information....................................23
Appendix--Portfolios and Performance Data...................23
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. THE COMPANY DOES NOT AUTHORIZE ANY
INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.
2
<PAGE>
DEFINITIONS
The following terms, as used in this prospectus, have the indicated meanings:
ACCUMULATION PERIOD - The period between the Issue Date and the Annuity Date,
the build-up phase under the Contract.
ACCUMULATION UNIT - A unit of measurement which we use to calculate Contract
Value.
ANNUITANT - The natural person on whose life the annuity benefits under a
Contract are based.
ANNUITIZATION - The process by which you convert from the Accumulation Period to
the Annuity Period. Upon Annuitization, the Contract is converted from the
build-up phase to the phase during which you or other payee(s) receive periodic
annuity payments.
ANNUITY DATE - The date on which annuity payments are to begin.
ANNUITY PERIOD - The period starting on the Annuity Date, the payout phase under
the Contract.
ANNUITY UNIT - A unit of measurement which we use to calculate the amount of
Variable Annuity payments.
BENEFICIARY(IES) - The person(s) designated to receive any death benefits under
the Contract.
CODE - The Internal Revenue Code.
COMPANY ("WE," "US," "OUR," "LINCOLN BENEFIT LIFE") - Lincoln Benefit Life
Company.
CONTRACT ANNIVERSARY - The anniversary of the Issue Date in subsequent years.
CONTRACT OWNER ("YOU") - The person(s) having the privileges of ownership
defined in the Contract. Such privileges may be restricted by a retirement plan
pursuant to which the Contract is issued.
CONTRACT VALUE - The sum of the values of your interests in the Subaccounts of
the Separate Account and the Fixed Account.
CONTRACT YEAR - A twelve-month period beginning on the Issue Date or any
Contract Anniversary.
CONTRIBUTION YEAR - A twelve-month period beginning on the date a Purchase
Payment is applied to a Subaccount, or any anniversary of that date.
DUE PROOF OF DEATH - (1) A certified original copy of the Death Certificate; or
(2) a certified copy of a decree of a court of competent jurisdiction as to the
finding of death; or (3) a written statement by a medical doctor who attended
the deceased at the time of death; or (4) any other proof satisfactory to the
Company.
FIXED ACCOUNT - The portion of the Contract Value invested in our general
account.
FIXED ANNUITY - A series of payments made during the Annuity Period to a payee
under a Contract that are fixed in amount.
ISSUE DATE - The date when the Contract becomes effective if the annuitant is
then living and the initial Purchase Payment has been paid.
LATEST ANNUITY DATE - The tenth day of the month following the Annuitant's 90th
birthday. In the case of Contracts issued in connection with Qualified Plans,
the Code generally requires that a minimum distribution is taken by April 1 of
the calendar year following the calendar year in which you attain age 70 1/2.
Accordingly, if you are in a Qualified Plan, we may require you to annuitize by
such date unless you demonstrate that the minimum distribution is otherwise
being made.
LOAN ACCOUNT - An account established for amounts transferred from the
Subaccounts or the Fixed Account as security for outstanding Contract loans.
NET INVESTMENT FACTOR - The factor for a particular Subaccount used to determine
the value of an Accumulation Unit and Annuity Unit in any Valuation Period.
NON-QUALIFIED PLAN - A retirement plan which does not receive special tax
treatment under Sections 401, 403(b), 408 or 457 of the Internal Revenue Code.
PORTFOLIO(S) - The underlying mutual fund(s) (or investment series thereof) in
which the Subaccounts invest.
PURCHASE PAYMENTS - Amounts paid to us as premium for the Contract by you or on
your behalf.
QUALIFIED PLAN - A retirement plan which receives special tax treatment under
Sections 401, 403(b), 408 or a state and local government or other Tax Exempt
Organization Deferred Compensation Plan under Section 457 of the Internal
Revenue Code.
SEPARATE ACCOUNT - A segregated investment account of the Company entitled
Lincoln Benefit Life Variable Annuity Account.
SUBACCOUNT - A subdivision of the Separate Account invested wholly in shares of
one of the Portfolios.
SURRENDER VALUE -The amount paid upon surrender of the Contract, equal to the
Contract Value less any applicable premium tax charges, withdrawal charges and
the Contract Administration Charge.
VALUATION DATE - Each day the New York Stock Exchange is open for business.
VALUATION PERIOD - The period commencing at the close of normal trading on the
New York Stock Exchange ("NYSE") (currently 4:00 p.m. Eastern time) on each
Valuation Date and ending at the close of the NYSE on the next succeeding
Valuation Date.
VARIABLE ANNUITY - A series of payments made during the Annuity Period to a
payee under a Contract which vary in amount in accordance with the investment
experience of the Subaccounts to which Contract Values have been allocated.
WITHDRAWAL CHARGE - The contingent deferred sales charge assessed against
certain withdrawals.
3
<PAGE>
QUESTIONS & ANSWERS
ABOUT THE CONTRACT
The following is a compilation of answers to selected questions that you might
have about some of the most important features of the Contract. The remainder
of the prospectus, which follows immediately afterwards, contains a more
complete discussion of these and other matters.
1. WHAT IS THE PURPOSE OF THE CONTRACT?
This Contract is designed for tax deferred retirement investing. Contract
Values accumulate based on the experience of the underlying funds and the Fixed
Account. You may receive annuity payments on a fixed or variable basis. The
Contract is available for non-qualified or qualified plans. You can allocate
Purchase Payments to the Fixed Account or to any of the Subaccounts of the
Separate Account, each of which will invest in a mutual fund or separate
investment Portfolio thereof. You bear the entire investment risk during the
Accumulation Period on amounts allocated to the Separate Account. You will also
bear the entire investment risk during the Annuity Period if you choose to
receive annuity payments on a variable basis.
2. IN WHICH MUTUAL FUNDS DOES THE SEPARATE ACCOUNT INVEST?
The Separate Account currently invests exclusively in shares of these mutual
funds:
Fund Portfolio(s)
---- ------------
Janus Aspen Series Flexible Income Portfolio
Balanced Portfolio
Growth Portfolio
Aggressive Growth Portfolio
Worldwide Growth Portfolio
- ---------------------------------------------------------------------
Fidelity's Variable Money Market Portfolio
Insurance Equity-Income Portfolio
Products Fund Growth Portfolio
Overseas Portfolio
- ---------------------------------------------------------------------
Fidelity's Variable Asset Manager Portfolio
Insurance Contrafund Portfolio
Products Fund II
- ---------------------------------------------------------------------
IAI Retirement IAI Regional Portfolio
Funds, Inc. IAI Balanced Portfolio
IAI Reserve Portfolio
- ---------------------------------------------------------------------
Federated Insurance Federated Utility Fund II
Management Series Federated U.S. Government
Securities II
Federated High Income Bond
Fund II
- ---------------------------------------------------------------------
Scudder Variable Life Bond Portfolio Class A
Investment Fund Balanced Portfolio Class A
- ---------------------------------------------------------------------
The assets of each Portfolio are held separately from the other Portfolios and
each has distinct investment objectives and policies which are described in the
accompanying prospectuses for the funds.
3. HOW DO I BUY A CONTRACT?
You must pay at least $1,200 during the first Contract Year. Subsequent
Purchase Payments must be $100 ($25 under an automatic payment plan (see page
15)). We may lower these minimums at our sole discretion. A Contract may not be
issued if either you or the Annuitant has attained age 81 before we receive your
application.
4. HOW IS MY PURCHASE PAYMENT ALLOCATED?
You allocate your Purchase Payment among the Subaccounts and the Fixed Account
in states where it is available when you apply for the Contract. Percentages
must be in whole numbers and the total allocation must equal 100%. When you
make subsequent Purchase Payments, you should again specify how you want your
payments allocated. If you do not, we will automatically allocate the payment
based on the then current Purchase Payment allocation (see page 16).
5. CAN I TRANSFER MY CONTRACT VALUES AMONG SUBACCOUNTS AND THE FIXED ACCOUNT?
Yes, during the Accumulation Period. You may transfer Contract Values by
written request or telephone authorization. No such transfers are permitted
after the Annuity Date. There are additional transfer restrictions for the
Fixed Account. (See page 17).
You may also want to take advantage of our automatic dollar cost averaging or
portfolio rebalancing programs. Under the dollar cost averaging program, your
values are automatically transferred from the Fixed Account or a Subaccount of
your choosing to up to eight options, including other Subaccounts or the Fixed
Account, at regular intervals. Transfers may be made monthly, quarterly, or
annually. (See "Automatic Dollar Cost Averaging Program" page 15.)
Under the portfolio rebalancing program, you can maintain the percentage of your
Contract Value allocated to each Subaccount at a pre-set level prior to
annuitization. Investment results will shift this balance of your Contract Value
allocations. If you elect rebalancing, we will automatically transfer your
Contract Value back to the pecentages at the frequency (monthly, quarterly,
semiannually, annually) that you specify. (See "Portfolio Rebalancing" page 16.)
6. HOW CAN I WITHDRAW MY FUNDS?
All or part of the Contract Value may be withdrawn before the Annuity Date, the
owner's death, or if the owner is not a natural person, the Annuitant's death.
Each year, free of charge, you may withdraw the greater of 10% of new Purchase
Payments (Purchase Payments made less than seven years before the withdrawal
date) or earnings not previously withdrawn. You may also withdraw free of
charge any old Purchase Payments (Purchase Payments made more than seven years
before the
4
<PAGE>
withdrawal date) not previously withdrawn. The withdrawal charge may
be waived under the terms of our confinement waiver benefit. (This benefit is
not available in all states.) (See "Free Withdrawal" page 13.)
Other withdrawals may be subject to a withdrawal charge, which is a contingent
deferred sales charge. The withdrawal charge will vary depending on the year
the Purchase Payment(s) and withdrawals are made. (See "Withdrawal Charge" page
12.) Additional restrictions may apply to Contracts issued in connection with
Qualified Plans (see "Taxes" page 21).
7. WHAT ARE MY CONTRACT CHARGES AND DEDUCTIONS?
Charges against the Separate Account consist of an annual mortality and expense
risk charge of 1.25% of net asset value and an annual administrative expense
charge of 0.15% of net asset value. These charges are assessed on a daily
basis during both the Accumulation Period and Annuity Period. An annual
contract administration charge of $25 is assessed during the Accumulation Period
only. We cannot increase the amount of these charges. A transfer fee of $25
may be assessed after the first transfer in each calendar month. We currently
are waiving this fee. Any applicable premium taxes are deducted from the
Contract Value upon surrender, death, or annuitization. Premium taxes generally
range from 0% to 3.5%. Finally, the withdrawal charge, a contingent deferred
sales load, is referenced above. (See "Contract Charges" page 12.)
8. WHAT IS THE DEATH BENEFIT?
The death benefit is payable while the Contract is in force and before the
Annuity Date if the Contract Owner dies, or the Annuitant dies and the Contract
Owner is not a natural person. We must receive Due Proof of Death.
The death benefit is the greater of 1) all Purchase Payments less prior
withdrawals accumulated at 4% per year prior to the Contract Anniversary next
following your 75th birthday and at 0% per year thereafter (the "floor value"
calculation) or 2) the Contract Value less any premium tax. If the Contract
Value exceeds the floor value on the seventh Contract Anniversary, the floor
value will be raised to the level of the Contract Value. In such event, floor
values for years 8 and beyond will be calculated using the "stepped up" value on
the seventh anniversary.
9. CAN I RETURN THIS CONTRACT AFTER IT HAS BEEN DELIVERED?
You may return the Contract to us within 10 days (or longer period if required
by state law) after you receive it by delivering or mailing it to us. If the
Contract is returned, it will be terminated and, unless otherwise required by
state law, we will pay an amount equal to the Contract Value on the date we
receive the Contract. The Contract Value may be more or less than the Purchase
Payments made. Since state laws differ as to the consequences of returning a
Contract, you should refer to your Contract for information about your
circumstances.
5
<PAGE>
FEE TABLES
Contract Owner Transaction Expenses
Contingent Deferred Sales Charges-Withdrawl Charge (as a percentage of
Purchase Payments)
<TABLE>
<CAPTION>
Contribution Applicable Contribution Applicable
year Charge Year Charge
---- ---- ---- -----
<S> <C> <C> <C> <C>
1-2 7% 6 3%
3 6% 7 2%
4 5% 8+ 0%
</TABLE>
Annual Contract Administration Charge...................................$25.00
Transfer Fee (Applies solely to the second and subsequent transfers within
a calendar month. We are currently waiving the transfer fee)............$25.00
Seperate Account Expenses (As a percentage of daily net asset value deducted
from each of the subaccounts of the Separate Account)
Mortality Risk Charge 0.85%
Expense Risk Charge 0.40%
Administrative Expenses Charge 0.15%
-----
Total Seperate Account Annual Expenses 1.40%
Portfolio Company Annual Expenses (As a percentage of Portfolio average net
assets)
<TABLE>
<CAPTION>
Janus Aspen Flexible Aggressive Worldwide
Series: Income Balanced* Growth* Growth* Growth*
-------- -------- --------- ------- ---------
<S> <C> <C> <C> <C> <C>
Management: 0.65% 0.82% 0.75% 0.65% 0.68%
Other: 0.42% 0.55% 0.11% 0.13% 0.22%
----- ----- ----- ----- -----
Total 1.07% 1.37% 0.86% 0.78% 0.0%
Fidelity's Variable Money Equity
Insurance Products Fund Market Income Growth Overseas
------ ------ ------ --------
Management: 0.24% 0.51% 0.61% 0.76%
Other: 0.09% 0.10% 0.09% 0.13%
----- ------ ----- -----
Total 0.33% 0.61% 0.70% 0.91%
Fidelity's Variable Asset
Insurance Products Fund II Manager** Contrafund**
--------- ------------
Management: 0.71% 0.61%
Other: 0.08% 0.11%
----- -----
Total: 0.79% 0.72%
IAI Retirement Funds, IAI IAI IAI
Inc: Regional*** Balanced*** Reserve
----------- ----------- -------
Management: 0.65% 0.65% 0.45%
Other: 0,60% 0.60% 0.40%
------ ----- -----
Total: 1.25% 1.25% 0.85%
Federated Insurance U.S. Gov't High Income
Management Series: Utility+ Securities+ Bond
-------- ------------ -------------
Management: 0.00% 0.00% 0.00%
Other: 0.85% 0.80% 0.80%
----- ----- -----
Total: 0.85% 0.80% 0.80%
Scudder Variable
Life Investment Fund Bond Balanced
---- ---------
Management: 0.475% 0.475%
Other: 0.105% 0.275%
------ ------
Total: 0.58% 0.75%
</TABLE>
* The expenses figures shown are net of certain waivers or fee reductions from
Janus Capital Corporation. Without such waivers or reductions, Management Fees,
Other Expenses, and Total Portfolio Annual Expenses for the Portfolios for the
fiscal year ended December 31, 1995, would have been: 1.00%, 0.55% and 1.55%,
respectively, for Balanced Portfolio, 0.82%, 0.11% and 0.93%, respectively, for
Aggressive Growth Portfolio; 0.85%, 0.13% and 0.98%, respectively, for Growth
Portfolio; 0.87%, 0.22% and 1.09%, respectively, for Worldwide Growth
Portfolio.
**A portion of the brokerage commissions the fund paid was used to reduce its
expenses. Without this reduction total operating expenses would have been (for
Asset Manager - 0.81% and for Contrafund - 0.73%)
*** The expense figures shown are net of expense reimbursements from Investment
Advisers, Inc. Without such reimbursements, Management Fees and Total Portfolio
Expenses for the Portfolios are estimated as follows:0.65% and 1.64% for
Regional Portfolio, 0.65% and 5.29% for Balanced Portfolio, and 0.45% and 2.62%
for Reserve Portfolio.
+ The expenses figures shown reflect the voluntary waiver of all or a portion of
the Management Fee. The maximum Management Fees for the indicated Portfolios
and the Total Portfolio Expenses absent the volunary waiver are as follows:
0.75% and 1.60%, respectively, for the Utility Fund II; 0.60% and 1.40%;
respectively, for the U.S. Government Securities II; and 0.60% and 1.40%
respectively, for the High Income Bond Fund.
6
<PAGE>
EXAMPLES
If you surrender your contract at the end of the period you would pay the
following expenses on a $1,000 investment in each indicated Subaccount assuming
5% annual return on assets:
<TABLE>
<CAPTION>
Janus Janus Janus Fidelity Fidelity
Flexible Janus Janus Aggressive Worldwide Money Equity- Fidelity Fidelity Fidelity
Income Balanced Growth Growth Growth Market Income Growth Overseas Contrafund
------ -------- ------ ------ ------ ------ ------ ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $91 $94 $88 $89 $89 $84 $86 $87 $89 $88
3 years 139 147 130 133 134 117 126 128 134 129
5 years 177 191 162 166 168 139 153 158 169 159
10 years 291 320 261 270 274 214 244 253 275 255
Fidelity Federated
Asset IAI IAI IAI Federated Federated High Income Scudder Scudder
Manager Regional Balanced Reserve Utility U.S. Securities Bond Bond Balanced
------- -------- -------- ------- ------- --------------- ---- ---- --------
1 year $88 $92 $92 $89 $89 $88 $88 $86 $88
3 years 131 144 144 132 132 131 131 125 130
5 years 162 186 186 165 165 163 163 152 160
10 years 262 308 308 268 268 263 263 241 245
</TABLE>
If you annuitize* at the end of the period you would pay the following expenses
on a $1,000 investment in each indicated Subaccount assuming 5% annual return on
assets:
<TABLE>
<CAPTION>
Janus Janus Janus Fidelity Fidelity
Flexible Janus Janus Aggressive Worldwide Money Equity- Fidelity Fidelity Fidelity
Income Balanced Growth Growth Growth Market Income Growth Overseas Contrafund
------ -------- ------ ------ ------ ------ ------ ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $26 $29 $23 $24 $24 $19 $21 $22 $24 $23
3 years 80 89 71 74 75 57 66 69 75 69
5 years 137 151 122 126 128 99 113 118 129 119
10 years 291 320 261 270 274 214 244 253 275 255
Fidelity Federated
Asset IAI IAI IAI Federated Federated High Income Scudder Scudder
Manager Regional Balanced Reserve Utility U.S. Securities Bond Bond Balanced
------- -------- -------- ------- ------- --------------- ---- ---- --------
1 year $23 $28 $28 $24 $24 $23 $23 $21 $23
3 years 72 85 85 73 73 72 72 65 70
5 years 122 146 146 125 125 123 123 112 120
10 years 262 308 308 268 268 263 263 241 258
</TABLE>
If you do not surrender your contract you would pay the following expenses on a
$1,000 investment in each indicated Subaccount assuming 5% annual return on
assets:
<TABLE>
<CAPTION>
Janus Janus Janus Fidelity Fidelity
Flexible Janus Janus Aggressive Worldwide Money Equity- Fidelity Fidelity Fidelity
Income Balanced Growth Growth Growth Market Income Growth Overseas Contrafund
------ -------- ------ ------ ------ ------ ------ ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $26 $29 $23 $24 $24 $19 $21 $22 $24 $23
3 years 80 89 71 74 75 57 66 69 75 69
5 years 137 151 122 126 128 99 113 118 129 119
10 years 291 320 261 270 274 214 244 253 275 255
Fidelity Federated
Asset IAI IAI IAI Federated Federated High Income Scudder Scudder
Manager Regional Balanced Reserve Utility U.S. Securities Bond Bond Balanced
------- -------- -------- ------- ------- --------------- ---- ---- --------
1 year $23 $28 $28 $24 $24 $23 $23 $21 $23
3 years 72 85 85 73 73 72 72 65 70
5 years 122 146 146 125 125 123 123 112 120
10 years 262 308 308 268 268 263 263 241 258
</TABLE>
*The withdrawal charge will be waived if a settlement option is selected which
provides for payments over at least 5 years or over the annuitant's lifetime.
7
<PAGE>
EXPLANATION OF FEE TABLES AND EXAMPLES
1. The purpose of the foregoing table and examples is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly by investing in the Separate Account. The table reflects expenses of
the Separate Account as well as the Portfolios. For additional information see
"Contract Charges," beginning on Page 12 of this prospectus; see also the
sections relating to management of the Portfolios in their respective
prospectuses. The examples do not illustrate the tax consequences of
surrendering a Contract.
2. The examples assume that there were no transactions which would result in the
imposition of the transfer fee. We are currently waiving this fee, but reserve
the right to charge $25 to the second and each subsequent transfer within a
calendar month. Premium taxes are not reflected. Presently, premium taxes (which
range from 0% to 3.5%) are deducted from Contract Value upon full surrender,
death or annuitization.
3. For purposes of the amounts reported in the Examples, the Contract
Administration Charge is reflected by applying a percentage equivalent charge,
obtained by dividing the total amount of such charges anticipated to be
collected during the year by the total estimated average net assets of the
Subaccounts and the Fixed Account attributable to the Contracts.
4. The Examples reflect any Free Withdrawal Amounts.
5. NEITHER THE FEE TABLES NOR THE EXAMPLES ARE REPRESENTATIONS OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
CONDENSED FINANCIAL INFORMATION
The following tables present condensed financial information with respect to
each Subaccount of the Separate Account. The information in the tables is
included in the Separate Account's financial statements that have been audited
by Deloitte & Touche LLP, independent public accountants. The table should be
read in conjunction with the Separate Account's financial statements, which are
in the Separate Account's Annual Report dated as of December 31, 1995, contained
in the Statement of Additional Information.
Selected Accumulation Unit Value/1/ information throughout each period indicated
is as follows:
<TABLE>
<CAPTION>
Accumulation Unit Value/1/ Number of Units Accumulation Unit Value/1/ Number of Units
Year Ended 1994 Outstanding at Year Ended 1995 Outstanding at
Beginning End End of 1994 Beginning End End of 1995
--------- --- ----------- --------- --- -----------
<S> <C> <C> <C> <C> <C> <C>
$ $
Fidelity
Money Market 10.00 10.27 249,473 10.27 10.72 1,063,044
Growth 10.00 9.73 247,556 9.73 12.98 1,028,768
Equity-Income 10.00 10.28 145,290 10.28 13.70 1,025,219
Overseas 10.00 9.70 166,871 9.70 10.49 599,989
Asset Manager 10.00 9.09 226,936 9.09 10.49 593,918
Scudder
Bond 10.00 9.27 4,615 9.27 10.81 134,527
Balanced 10.00 9.48 55,482 9.48 11.85 209,087
Janus
Flexible Income 10.00 9.64 9,271 9.64 11.77 145,173
Balanced 10.00 9.68 54,218 9.68 11.91 204,556
Growth 10.00 9.85 91,020 9.85 12.64 529,026
Aggressive Growth 10.00 11.60 78,193 11.60 14.58 545,594
Worldwide Growth 10.00 9.67 109,298 9.67 12.15 520,639
Federated
High Income Bond II 10.00 9.50 28,352 9.50 11.28 210,460
Utility Fund II 10.00 9.50 44,207 9.50 11.64 197,013
U.S. Gov't Securities II 10.00 10.10 36,563 10.10 10.83 106,437
Investment Advisers, Inc. (IAI)
Regional 10.00 10.48 71,368 10.48 13.80 325,443
Reserve 10.00 10.09 51,928 10.09 10.46 67,843
Balanced 10.00 10.09 18,173 10.09 11.56 60,190
</TABLE>
/1/ Accumulation Unit Value: unit of measure used to calculate the value of a
Contract Owner's interest in a Subaccount for any Valuation Period. An
Accumulation Unit Value does not reflect deduction of certain changes under the
Contract that are deducted from your Contract Value, such as the Contract
Administration Charge, and Administrative Expense Charge.
A brief explanation of how performance of the Subaccounts is calculated may be
found in the Statement of Additional Information.
8
<PAGE>
LINCOLN BENEFIT LIFE COMPANY AND THE INVESTMENT OPTIONS
LINCOLN BENEFIT LIFE COMPANY
Lincoln Benefit Life Company is a stock life insurance company organized under
the laws of the state of Nebraska in 1938. Its legal domicile and principal
business address is 206 South 13th Street, Lincoln, Nebraska. Lincoln Benefit
Life is a wholly-owned subsidiary of Allstate Life Insurance Company, a stock
life insurance company incorporated under the laws of the State of Illinois.
Allstate Life Insurance Company is a wholly-owned subsidiary of Allstate
Insurance Company ("Allstate"), a stock property-liability insurance company
incorporated under the laws of Illinois. All outstanding Capital stock of
Allstate is owned by the Allstate Corporation ("Corporation").
We are admitted to conduct life insurance and annuity business in the District
of Columbia, Guam and in all states except New York. The Contract will be
marketed in all of the jurisdictions in which we are admitted to conduct
variable annuity business. The Contracts offered by this prospectus are issued
by us and will be funded in the Separate Account and/or the Fixed Account.
Lincoln Benefit Life Company is highly rated by independent agencies, including
A.M. Best, Moody's, and Standard & Poor's. These ratings are based on the
Company's reinsurance agreement with Allstate Life Insurance Company, as
explained below, and reflect financial soundness and strong operating
performance. The ratings are not intended to reflect the financial strength or
investment experience of the Separate Account. We may from time to time
advertise these ratings in our sales literature.
We receive our ratings through Allstate Life, which reinsures all net new
business from the Lincoln Benefit Life fixed account. Through the reinsurance
agreement, all of the assets backing Lincoln Benefit Life's reinsured
liabilities are owned by Allstate Life Insurance Company. These assets
represent our fixed account and are invested and managed by Allstate Life
Insurance Company. While the reinsurance agreement provides Lincoln Benefit
Life with financial backing from Allstate Life, it does not create any direct
contractual relationship with individual Lincoln Benefit Life policyholders.
SEPARATE ACCOUNT
Lincoln Benefit Life Variable Annuity Account was originally established by
Lincoln Benefit on August 3, 1992, pursuant to the provisions of Nebraska law,
as a segregated asset account of the Company. The Separate Account meets the
definition of a "separate account" under the federal securities laws and is
registered with the Securities and Exchange Commission as a unit investment
trust under the Investment Company Act of 1940. This registration does not
involve supervision of the management of the Separate Account or the Company by
the Securities and Exchange Commission.
The assets of the Separate Account are our property. However, the assets of the
Separate Account, equal to its reserves and other contract liabilities, are not
chargeable with liabilities arising out of any other business we may conduct.
Our obligations arising under the Contracts are general corporate obligations of
Lincoln Benefit Life.
Income, gains, and losses, whether or not realized, from assets allocated to the
Separate Account are credited to or charged against the Separate Account without
regard to our other income, gains, or losses.
The Separate Account is divided into Subaccounts, with the assets of each
Subaccount invested in the shares of one of the Portfolios. We do not guarantee
the investment performance of the Separate Account, its Subaccounts or the
Portfolios. Values allocated to the Separate Account and the amount of Variable
Annuity payments will vary with the values of shares of the Portfolios, and are
also reduced by Contract charges. The Separate Account may also fund other
annuity contracts issued by Lincoln Benefit Life, which will be accounted for
separately.
SEPARATE ACCOUNT INVESTMENTS
THE PORTFOLIOS
Each of the Subaccounts of the Separate Account invests in the shares of one of
the Portfolios, which are open-end management investment companies ("Funds")
registered under the Investment Company Act of 1940 (commonly known as "mutual
funds"), or separate investment series of such Funds. Following is a summary
description of the Portfolios in which the Subaccounts invest. More detailed
information concerning the Portfolios appears in the respective accompanying
prospectuses for the Funds. The Appendix on page 23 contains a description of
how advertised performance data for the Subaccounts are computed.
JANUS ASPEN SERIES (investment adviser: Janus Capital Corporation)
FLEXIBLE INCOME PORTFOLIO seeks to maximize total return from a combination of
current income and capital appreciation, with an emphasis on the income
component of total return. Flexible Income Portfolio invests in all types of
income-producing securities. This Portfolio may have substantial holdings of
debt securities rated below investment grade. Investments in such securities
present special risks; you are urged to carefully read the risk disclosure in
the accompanying prospectus relating to the Portfolio before allocating amounts
to the Janus Flexible Income Subaccount.
BALANCED PORTFOLIO seeks both growth of capital and current income. Balanced
Portfolio normally invests 40-60% of its assets in securities selected primarily
for their growth potential and 40-60% of its assets in securities selected
primarily for their income potential.
GROWTH PORTFOLIO seeks long-term growth of capital by investing primarily in a
diversified portfolio of common
9
<PAGE>
stocks of a large number of issuers of any size. Generally, this Portfolio
emphasizes issuers with larger market capitalizations.
AGGRESSIVE GROWTH PORTFOLIO seeks long-term growth of capital in a manner
consistent with the preservation of capital. The Portfolio is a non-diversified
fund that pursues its objective by normally investing at least 50% of its equity
assets in securities issued by medium-sized companies, those whose market
capitalizations fall within the range of companies in the S&P MidCap 400 Index
(the "MidCap Index"). Companies whose capitalization falls outside this range
after the Portfolio's initial purchase continue to be considered medium-sized
companies for the purpose of this policy. The range of the MidCap Index is
expected to change on a regular basis. Subject to the above policy, the
Portfolio may also invest in smaller or larger issuers.
WORLDWIDE GROWTH PORTFOLIO seeks long-term growth of capital by investing in a
diversified portfolio of common stocks of foreign and domestic issuers of any
size. Worldwide Growth Portfolio normally invests in issuers from at least five
different countries including the United States.
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (investment adviser: Fidelity
Management & Research Company)
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
limit its investments to securities with remaining maturities of 397 days or
less.
EQUITY-INCOME PORTFOLIO seeks reasonable income by investing primarily in
income-producing equity securities. The goal is to achieve a yield in excess of
the composite yield of the S&P 500 Composite Stock Price Index. At least 65% of
the Portfolio's assets will be invested in income producing common or preferred
stock. The remainder will normally be invested in convertible and non-
convertible debt obligations.
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.
OVERSEAS PORTFOLIO seeks long-term growth of capital primarily through
investments in foreign securities. At least 65% of the Portfolio's assets will
be invested in securities of issuers outside of North America. Most issuers
will be located in developed countries in the Americas, the Far East and Pacific
Basin, Scandinavia and Western Europe.
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (investment adviser: Fidelity
Management & Research Company)
ASSET MANAGER PORTFOLIO seeks to obtain 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 securities. Normally, the Portfolio's assets will
be allocated within the following investment parameters: 0-70% in short-term
instruments; 20-60% in bonds (intermediate to long-term debt); and 10-60% in
stocks (equities).
CONTRAFUND PORTFOLIO seeks capital appreciation by investing mainly in equity
securities of companies that Fidelity Management and Research Company believes
to be undervalued due to an overly pessimistic appraisal by the public. The fund
usually 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.
IAI RETIREMENT FUNDS, INC. (investment adviser: Investment Advisers, Inc.)
IAI REGIONAL PORTFOLIO pursues its objective of capital appreciation by
investing at least 80% of its equity investments in companies which have their
headquarters in Minnesota, Wisconsin, Iowa, Illinois, Nebraska, Montana, North
Dakota or South Dakota.
IAI BALANCED PORTFOLIO'S investment objective is to maximize total return to
investors. Balanced Portfolio pursues its objective by investing in a broadly
diversified portfolio of stocks, bonds and short-term instruments. The
Portfolio's assets will be allocated among these three classes of assets. Under
normal market conditions, the Portfolio will hold between 25% and 75% of its
assets in stocks and other equity securities, between 25% and 75% of its assets
in bonds and other fixed income securities, and up to 50% of its assets in short
term instruments.
IAI RESERVE PORTFOLIO'S investment objectives are to provide its shareholders
with high levels of capital stability and liquidity and, to the extent
consistent with these primary objectives, a high level of current income.
Reserve Portfolio pursues its investment objectives by investing primarily in a
diversified portfolio of investment grade bonds and other debt securities of
similar quality. Reserve Portfolio's dollar weighted average maturity will not
exceed twenty-five (25) months.
FEDERATED INSURANCE MANAGEMENT SERIES (investment adviser: Federated Advisers)
FEDERATED UTILITY FUND II'S investment objective is to achieve high current
income and moderate capital appreciation. The Fund endeavors to achieve its
objective by investing primarily in equity and debt securities of utility
companies that produce, transmit, or distribute gas and electric energy, as well
as those companies that provide communications facilities, such as telephone and
telegraph companies.
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II'S investment objective is to
provide current income. The Fund invests in securities which are primarily or
direct obligations of the U.S. Government or its agencies or instrumentalities,
or which are guaranteed by the U.S. Government, its agencies, or
instrumentalities. The Fund may also invest in certain collateralized mortgage
obligations ("CMOs") and repurchase agreements.
10
<PAGE>
FEDERATED HIGH INCOME BOND FUND II'S investment objective is to seek high
current income. The Fund endeavors to achieve its objective by investing at
least 65% of its assets in lower rated corporate debt obligations, such as
preferred stocks, bonds, debentures, notes, equipment lease certificates and
equipment trust certificates. Some of these fixed income securities may involve
equity features. Under normal circumstances, the Fund will not invest more than
10% of the value of its total assets in equity securities.
SCUDDER VARIABLE LIFE INVESTMENT FUND (investment adviser: Scudder, Stevens &
Clark, Inc.) The Scudder Variable Life Investment Fund has two classes of
shares. The Subaccounts invest in those shares that do not impose distribution
fees.
BOND PORTFOLIO seeks high income from a high quality portfolio of debt
securities. Under normal circumstances, Bond Portfolio invests at least 65% of
its assets in bonds including those of the U.S. Government and its agencies and
those of corporations and other notes and bonds paying high current income. The
Portfolio is actively managed and can invest in a broad range of short,
intermediate and long term securities.
BALANCED PORTFOLIO seeks a balance of growth and income from a diversified
portfolio of equity and fixed income securities. The Portfolio also seeks long-
term preservation of capital through a quality oriented investment approach that
is designed to reduce risk. The assets of this Portfolio will be invested in the
following three market sectors: 1) common stock, preferred stock and other
equity securities; 2) bonds and other debt securities with maturities generally
exceeding one year; and 3) money market instruments and other debt securities
with maturities generally not exceeding thirteen months. Not more than 75% of
Balanced Portfolio's net assets may be invested in stocks or other equity
investments. Generally, 25% - 50% are invested in bonds. For defensive purposes
the Portfolio may invest up to 100% in cash or money market instruments.
There is no assurance that the investment objective of any of the Portfolios
will be met. Detailed information about the Portfolios is contained in the
accompanying current prospectuses of the Funds. You should carefully review
those prospectuses before allocating amounts to be invested in the Subaccounts
of the Separate Account.
VOTING RIGHTS
To the extent required by applicable law, we will vote the shares of the
Portfolios held in the Separate Account at meetings of the shareholders of the
Funds in accordance with instructions received from persons having the voting
interest in the corresponding Subaccounts. We will vote shares for which we have
not received instructions in the same proportion as we vote shares for which we
have received instructions.
The number of shares which a person has a right to vote will be determined as of
a date to be chosen by the relevant Fund prior to the meeting of the respective
Fund's shareholders. Voting instructions will be solicited by written
communication in advance of such meeting. Except as may be limited by the terms
of the retirement plan pursuant to which the Contract was issued, the person
having such voting rights before the Annuity Date will be you; thereafter the
payee entitled to receive payments under the Contract.
SUBSTITUTION OF SECURITIES
If the shares of any of the Portfolios should no longer be available for
investment by the Separate Account or if, in the judgment of our Board of
Directors, further investment in the shares of a Portfolio is no longer
appropriate in view of the purposes of the Contract, we may substitute shares of
another mutual fund (or series thereof) for Portfolio shares already purchased
and/or to be purchased in the future by Purchase Payments under the Contract. No
such substitution of securities may take place without prior approval of the
Securities and Exchange Commission and under such conditions as the Commission
may impose.
THE FIXED ACCOUNT
The portion of the Contract relating to the Fixed Account is not registered
under the Securities Act of 1933 ("1933 Act") and the Fixed Account is not
registered as an Investment Company under the Investment Company Act of 1940
("1940 Act"). Accordingly, neither the Fixed Account nor any interests therein
are subject to the provisions or restrictions of the 1933 Act or the 1940 Act,
and the disclosure regarding the Fixed Account has not been reviewed by the
staff of the Securities and Exchange Commission. The following disclosure about
the Fixed Account may be subject to certain generally applicable provisions of
the federal securities laws regarding the accuracy and completeness of
disclosure.
You may allocate part or all of your Purchase Payments to the Fixed Account in
states where it is available, and any such amounts become part of the general
assets of Lincoln Benefit. Pursuant to the reinsurance agreement discussed on
page 9, Allstate Life invests the assets of the general account in accordance
with applicable laws governing the investments of insurance company general
accounts.
We guarantee that the interest rate credited to the Fixed Account will be at
least an annual effective rate of 3%. We may credit interest above the minimum
rate at 3%, but we are not obligated to do so. Any interest credited to the
Fixed Account in excess of the minimum guaranteed rate will be determined by us
at our sole discretion. You assume the risk that interest credited to the Fixed
Account may not exceed the minimum guaranteed rate of 3%.
Transfers from the Fixed Account are subject to certain limitations (see
Transfers, page 17). Also, we reserve the right to limit payment of partial
withdrawals or Surrender Value from the Fixed Account for up to 6 months (see
page 20).
11
<PAGE>
CONTRACT CHARGES
As is more fully described below, charges under the Contract offered by this
prospectus are assessed in three ways: (1) as deductions for Contract
administrative charges and, if applicable, for premium taxes; (2) as charges
against the assets of the Separate Account for administrative expenses or for
the assumption of mortality and expense risks; and (3) as Withdrawal Charges
(contingent deferred sales charges). In addition, certain deductions are made
from the assets of the Portfolios for investment management fees and expenses;
those fees and expenses, which are summarized in the Fee Tables on page 6, are
described more fully in the Prospectuses and Statements of Additional
Information for the Funds.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a Mortality and Expense Risk Charge from each Subaccount during each
Valuation Period. The aggregate Mortality and Expense Risk Charge is equal, on
an annual basis, to 1.25% of the net asset value of each Subaccount
(approximately 0.85% is for mortality risks and approximately 0.40% is for
expense risks). The mortality risks which we assume arise from our contractual
obligations: (1) to make annuity payments after the Annuity Date for the life of
the Annuitant(s); (2) to waive the Withdrawal Charge in the event of your death;
and (3) to provide the Death Benefit prior to the Annuity Date. A detailed
explanation of the Death Benefit may be found under "Description of the
Contracts - Death Benefit," on page 15.
The expense risk which we assume is that the costs of administering the
Contracts and the Separate Account will exceed the amount received from the
Contract Administration Charge and the Administrative Expense Charge. (See
"Administrative Charges" below.) We guarantee the Expense Risk Charge and it
cannot be increased. The Mortality and Expense Risk Charge is assessed during
both the Accumulation Period and the Annuity Period.
ADMINISTRATIVE CHARGES
CONTRACT ADMINISTRATION CHARGE
An annual Contract Administration Charge of $25 is charged against each
Contract. The amount of this charge is guaranteed and will not increase. This
charge reimburses us for expenses incurred in maintaining your Contract. The
Contract Administration Charge will be assessed on each Contract Anniversary
that occurs on or prior to the Annuity Date. In the event that a total surrender
of Contract Value is made, the Charge will be assessed as of the date of
surrender without proration. This Charge is not assessed during the Annuity
Period.
The total Contract Administration Charge is allocated between the Subaccounts
and the Fixed Account in proportion to the respective Contract Values similarly
allocated.
The Contract Administration Charge will be waived if on any Contract Anniversary
the Contract Value is $75,000 or greater.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an Administrative Expense Charge from each Subaccount during each
Valuation Period which is equal, on an annual basis, to 0.15% of the net asset
value of the Subaccount. This charge is designed to compensate us for the cost
of administering the Contracts and the Separate Account. The Administrative
Expense Charge is assessed during both the Accumulation Period and the Annuity
Period. The Contract Administration Charge and the Administrative Expense Charge
are designed, in the aggregate, to be at cost with no margin included for
profit.
TRANSFER FEE
In general, a transfer fee of $25 may be assessed on the second and each
subsequent transaction in each calendar month in which transfer(s) are effected
between Subaccount(s) and/or the Fixed Account. We currently are waiving this
fee.
The transfer fee will be deducted from Contract Values which remain in the
Subaccount(s) or Fixed Account from which the transfer was made. If such
remaining Contract Value is insufficient to pay the transfer fee, then the fee
will be deducted from transferred Contract Values. The transfer fee is designed
to be at cost with no margin included for profit.
SALES CHARGES
WITHDRAWAL CHARGE
Withdrawals may be subject to penalties or income tax. Additional restrictions
may apply to Contracts held in Qualified Plans. Subject to those limitations,
the Contract Value may be withdrawn at any time during the Accumulation Period.
You should consult your own tax counsel or other tax advisers regarding any
withdrawals. (See "Taxes - Tax Treatment of Withdrawals" on page 22.)
A contingent deferred sales charge, which is referred to as the Withdrawal
Charge, may be imposed upon certain withdrawals. No withdrawal charge is applied
in the following situations: (1) On annuitization (unless the settlement option
chosen is payment over a period certain of less than 5 years); (2) the payment
of a death benefit; (3) Withdrawal of an Old Purchase Payment or an amount
available as a free withdrawal (see p. 13); (4) Certain withdrawals for
Contracts issued under 403(b) plans or 401 plans under our prototype (See Waiver
of Withdrawal Charge for Certain Qualified Plan Withdrawals, p. 14); (5)
Withdrawal under Contracts issued to employees of Lincoln Benefit Life Company
or its affiliates or issued to spouses or minor children of such employees.
In no event will a withdrawal charge be waived or eliminated where such waiver
or elimination would be unfairly discriminatory to any person or where it is
prohibited by state law.
The Withdrawal Charge is a percentage of Purchase Payments withdrawn that are
less than seven years old
12
<PAGE>
and not eligible for a free withdrawal, in accordance with the Withdrawal Charge
Table shown below:
WITHDRAWAL CHARGE TABLE
<TABLE>
<CAPTION>
Contribution Withdrawal Charge
Year Percentage
---- ----------
<S> <C>
First and Second 7
Third 6
Fourth 5
Fifth 4
Sixth 3
Seventh 2
Eighth and later 0
</TABLE>
The Withdrawal Charge is deducted from the remaining Contract Value so that the
actual reduction in Contract Value as a result of the withdrawal will be greater
than the withdrawal amount requested and paid.
For purposes of determining the Withdrawal Charge, the Contract Value is deemed
to be withdrawn in the following order:
FIRST. Earnings-- the amount of Contract Value in excess of all Purchase
Payments that have not previously been withdrawn and less any Large Case Credit
(see "Large Case Credit," Page 17);
SECOND. "Old Purchase Payments" - Purchase Payments received by us more than
seven years prior to the date of withdrawal which have not been previously
withdrawn;
THIRD. Any additional amounts available as a "Free Withdrawal," as described
below;
FOURTH. "New Purchase Payments" - Purchase Payments received by us less than
seven years prior to the date of withdrawal. These Payments are deemed to be
withdrawn on a first-in, first-out basis.
The amounts obtained from the Withdrawal Charge will be used to pay sales
commissions and other promotional or distribution expenses associated with the
marketing of the Contracts. To the extent that the Withdrawal Charge is
insufficient to cover all sales commissions and other promotional or
distribution expenses, we may use any of our corporate assets, including
potential profit which may arise from the Mortality and Expense Risk Charge,
above, to make up any difference.
FREE WITHDRAWAL
Withdrawals of the following amounts are never subject to the Withdrawal Charge:
a. In any Contract Year, the greater of earnings not previously withdrawn or 10
percent of New Purchase Payments; and
b. Any Old Purchase Payments which have not been previously withdrawn.
However, see "Tax Treatment of Withdrawals," on page 21.
In addition, in states where available, a Confinement Waiver benefit provides
that any applicable Withdrawal Charge will be waived if the following conditions
are satisfied:
1. The Annuitant must be confined to a Long Term Care Facility or a Hospital for
at least 60 consecutive days. Confinement must begin after the Issue Date;
2. You must request the withdrawal no later than 90 days following the date that
confinement has ceased. Written proof of confinement must accompany the
withdrawal request; and
3. For confinements in a Long Term Care Facility, confinement must be prescribed
by a physician and be medically necessary.
LONG TERM CARE FACILITY means a facility located in the United States of America
which is licensed by the jurisdiction in which it is located and operated as a
Custodial Care Facility or other facility which provides a level of care and
services at least as great as those provided by a Custodial Care Facility. Long
Term Care Facility does not include any place owned or operated by a member of
the insured's immediate family.
CUSTODIAL CARE FACILITY means a facility which:
1. Provides custodial care under the supervision of a Registered Nurse; and
2. Can accommodate three or more persons at those persons' expense.
HOSPITAL means a facility which:
1. Is licensed by the jurisdiction in which it is located and operated as a
hospital;
2. Is supervised by a staff of licensed physicians;
3. Provides continuous nursing service 24 hours a day by or under the
supervision of a Registered Nurse;
4. Operates primarily for the care and treatment of sick or injured persons as
inpatients for a charge; and
5. Has medical, diagnostic and major surgical facilities or has access to such
facilities.
MEDICALLY NECESSARY means confinement, care or treatment which is appropriate
and consistent with the diagnosis in accordance with accepted standards of
practice, and which could not have been omitted without adversely affecting the
insured's condition.
PHYSICIAN means a licensed medical doctor (M.D.) or a licensed doctor of
osteopathy (D.O.) operating within the scope of his or her license. The term
does not include the insured or a member of the insured's immediate family.
REGISTERED NURSE means a registered graduate professional nurse (R.N.).
IMMEDIATE FAMILY means the insured's spouse, children, parents, grandparents,
grandchildren, siblings, or corresponding in-laws.
This benefit will not be applicable to the extent it does not comply with the
provisions of the Qualified Plan for
13
<PAGE>
which the Contract is issued. Also see "Taxes" on page 21 for a discussion of
the tax issues involved.
WAIVER OF WITHDRAWAL CHARGE FOR CERTAIN QUALIFIED PLAN WITHDRAWALS
For contracts isued under a 403 (b) plan or a 40l plan under our prototype, we
will waive the Withdrawal Charge when: (1) the annuitant becomes disabled (as
defined in Code Section 72(m) (7)); or (2) the annuitant attains age 59 1/2 and
at least 5 Contract Years have elapsed; or (3) at least 15 Contract Years have
elapsed. Our prototype is a Section 401 Defined Contribution Qualified
Retirement plan. This is a prototype plan which may be established as a Money
Purchase plan, a Profit Sharing plan, or a paired plan (Money Purchase and
Profit Sharing).
PREMIUM TAXES
Premium taxes or other taxes payable to a state or other governmental entity
will be charged against the Contract Values, including Contract Values that
result from funds transferred from existing policies (Section 1035 exchange)
issued by this Company or any other company. Some states assess premium taxes at
the time Purchase Payments are made; others assess premium taxes at the time
annuity payments begin. We will deduct any applicable premium taxes upon full
surrender, death, or annuitization. Premium taxes generally range from 0% to
3.5%.
DEDUCTION FOR SEPARATE ACCOUNT INCOME TAXES
While we are not currently maintaining a provision for taxes, we have reserved
the right to establish such a provision for taxes in the future if we determine,
in our sole discretion, that we will incur a tax as a result of the operation of
the Separate Account. We will deduct for any taxes we incur as a result of the
operation of the Separate Account whether or not there was a provision for taxes
and whether or not it was sufficient. (See "Taxes," Page 21.)
OTHER EXPENSES
The charges and expenses applicable to the various Portfolios are borne
indirectly by Contract Owners having Contract Values allocated to the
Subaccounts that invest in the respective Funds. For a summary of current
estimates of those charges and expenses, see "Fee Tables," Page 6. For more
detailed information about those charges and expenses, please refer to the
prospectuses for the appropriate Fund(s). Lincoln Benefit Life may receive
compensation from the investment advisors or administrators in connection with
administrative service and cost savings experienced by the investment advisors
or administrators.
DESCRIPTION OF THE CONTRACTS
SUMMARY
The Contracts provide for the accumulation of Contract Values during the
Accumulation Period. See "Purchases, Withdrawals and Contract Value," beginning
at Page 15. Upon Annuitization, benefits are payable under the Contracts in the
form of an annuity, either for the life of the Annuitant or for a fixed number
of years. See, "Annuity Period - Annuity Options," Page 20.
CONTRACT OWNER
The Contract Owner ("You") is the person normally entitled to exercise all
rights of ownership under the Contracts. You are also normally the person
entitled to receive benefits under the Contract, although you may, subject to
limitations in the case of Qualified Plans, designate an alternative payee.
ANNUITANT
The Annuitant is the natural person on whose life annuity payments under a
Contract depend. You may change the designated Annuitant at any time prior to
the Annuity Date. In the case of a Contract issued in connection with a plan
qualified under Section 403(b) or 408 of the Code, you are the Annuitant. You
may also designate a second person on whose life, together with that of the
Annuitant, annuity payments depend. Additional restrictions may apply in the
case of Qualified Plans (See "Taxes," page 21). If you are not the Annuitant
and the Annuitant dies before the Annuity Date, then you become the new
Annuitant unless you name another person as the new Annuitant. You must attest
to the Annuitant being alive before we will annuitize a Contract.
MODIFICATION OF THE CONTRACT
Only a Lincoln Benefit Life officer may approve a change in or waive any
provisions of the Contract. Any change or waiver must be in writing. No agent
has the authority to change or waive the provisions of the Contract.
We reserve the right to change the terms of the Contract as may be necessary to
comply with changes in applicable law. If a provision or provisions of the
Contract are inconsistent with state law, state law will control.
ASSIGNMENT
You may assign Contracts issued pursuant to Non-Qualified Plans that are not
subject to Title 1 of the Employee Retirement Income Security Act of 1974
("ERISA") at any time during the lifetime of the Annuitant prior to the Annuity
Date. We will not be bound by any assignment until we receive written notice of
it. We are not responsible for the validity of any assignment. An assignment
will not affect any payments we may make or actions we may take before we
receive notice of the assignment.
If the Contract is issued pursuant to a Qualified Plan (or a Non-Qualified Plan
that is subject to Title 1 of ERISA), it may not be assigned, pledged or
otherwise transferred except under such conditions as may be allowed under
applicable law.
BECAUSE AN ASSIGNMENT MAY BE A TAXABLE EVENT, YOU SHOULD CONSULT A COMPETENT TAX
ADVISER SHOULD YOU WISH TO ASSIGN YOUR CONTRACT.
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DEATH BENEFIT
We will pay the Death Benefit when due proof of death is received while the
Contract is in force and before the Annuity Date, if:
the Contract Owner dies; or
the Annuitant dies and the Contract Owner is not a natural person.
The Beneficiary will become the new Contract Owner and may elect, within 60 days
of the date of death, to receive the Death Benefit in a lump sum or apply the
Death Benefit to receive a series of equal payments over the life of the
Beneficiary or a period not to exceed the life expectancy of the Beneficiary.
Lifetime or life expectancy payments must begin within one year of the deceased
Contract Owner's death.
If there is only one Beneficiary, he or she may elect to defer payment of the
Contract Value for up to five years from the date of death. Any remaining funds
must be distributed at the end of the five year period. An Annuitant is
necessary to continue the Contract between the date of death and the final
distribution. If there is no Annuitant at that time, the Beneficiary will be
the new Annuitant.
If the Beneficiary is the Contract Owner's spouse, then the Contract can
continue as if death had not occurred. If there is no Annuitant at that time,
the new Annuitant will be the surviving spouse. The surviving spouse may also
select one of the options listed above.
If the Beneficiary is not a natural person, then the Beneficiary must receive
the Death Benefit in a lump sum, and the options listed above are not available.
Similar rules may apply to Contracts issued in connection with Qualified Plans.
The Death Benefit is calculated as of the date of settlement. At a minimum, the
Death Benefit is the greater of:
(1) All Purchase Payments less prior withdrawals , accumulated at 4% per year
prior to the Contract Anniversary next following your 75th birthday, and at 0%
per year thereafter (This is called the "Floor Value" calculation); or
(2) The Contract Value less any applicable premium tax. In addition, if the
Contract Value on the 7th Contract Anniversary is greater than the Floor Value
at that time, the Floor Value will be raised to the level of the Contract Value.
In such event, Floor Values for years 8 and beyond will be calculated using the
"stepped-up" value on the seventh anniversary.
BENEFICIARY
The Beneficiary will receive the Death Benefit when the Contract Owner dies.
The Beneficiary is as stated in the application unless changed.
If a Beneficiary is not named or if the Beneficiary named is no longer living,
the beneficiary will be:
the Contract Owner's spouse if living, otherwise;
the Contract Owner's children equally if living, other-wise;
the Contract Owner's estate.
If there is more than one Beneficiary, the Company will pay the Death Benefit to
the Beneficiaries according to the most recent written instructions received
from you. If there are no written instructions the Company will pay the Death
Benefit in equal shares to the Beneficiaries who are to share the funds. If one
of the Beneficiaries predeceases the Contract Owner, the Death Benefit will be
paid to the surviving Beneficiaries.
You may name new Beneficiaries. We will provide a form to be signed and filed
with us. Upon receipt, it is effective as of the date you signed the form,
subject to any action we have taken before it was received.
Other rules may apply to Contracts issued in connection with Qualified Plans.
VOTING RIGHTS OF CONTRACT OWNERS
Except to the extent restricted by the retirement plan pursuant to which a
Contract was issued, you have a voting interest in each Subaccount to which you
have allocated your Contract Value. The voting interest in a Subaccount is
based upon your proportionate interest in the Subaccount as measured by
Accumulation and Annuity Units. (See "Separate Account Investments -- Voting
Rights," Page 11, and "Purchases, Withdrawals and Contract Value - Allocation of
Purchase Payments," Page 16).
PURCHASES, WITHDRAWALS AND
CONTRACT VALUE
MINIMUM PURCHASE PAYMENT
The minimum initial Purchase Payment for a Contract is $1,200 (payable over the
first Contract Year) and the total of all Purchase Payments may not exceed $1
million without our prior approval. Minimum subsequent Purchase Payments may be
made in amounts of $100 or more ($25 or more if made in connection with an
Automatic Payment Plan, described below). We may lower these minimums at our
sole discretion. We reserve the right to refuse any Purchase Payment at any
time. We may not issue a Contract to a Purchaser who has attained age 81, or
where the Annuitant has attained age 81.
AUTOMATIC PAYMENT PLAN
You may make scheduled subsequent Purchase Payments of $25.00 or more per month
by automatic payment through your bank account. An enrollment form for this
program is available through us.
AUTOMATIC DOLLAR COST AVERAGING PROGRAM
Owners who wish to purchase units of the Subaccounts or the Fixed Account over a
period of time may be able to do so through the Automatic Dollar Cost Averaging
("DCA") Program. Under this program, you may autho-
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rize the automatic transfer of a fixed dollar amount from the Fixed Account or a
Subaccount of your choosing (the "Source Subaccount") to up to eight options,
including other Subaccounts or the Fixed Account, at the unit values determined
on the dates of the transfers. The interval between transfers may be monthly,
quarterly, or annually, at your option. The transfers will continue until you
instruct otherwise, or until there is not enough money in the Source Subaccount
to make the transfer, whichever is earlier. Currently, there is no minimum
transfer amount required. We reserve the right to impose a minimum amount that
may be transferred among the investment options under the Contract. Special DCA
considerations apply with respect to transfers from the Fixed Account. (See
Transfers, Page 17.)
The theory of dollar cost averaging is that greater numbers of units are
purchased at times when the unit prices are relatively low than are purchased
when the prices are higher. This has the effect, when purchases are made at
fluctuating prices, of reducing the aggregate average cost per unit to less than
the average of the unit prices on the same purchase dates. However,
participation in the DCA Program does not assure you of a greater profit from
your purchases under the Program; nor will it prevent or necessarily alleviate
losses in a declining market.
You may elect to increase, decrease or change the frequency or amount of
Purchase Payments under a Dollar Cost Averaging Program. The application and any
Purchase Payments should be sent to Lincoln Benefit Life Company, P.O. Box
82532, Lincoln, Nebraska 68501-2532.
PORTFOLIO REBALANCING
Portfolio rebalancing allows you to maintain the percentage of your Contract
Value allocated to each Subaccount at a pre-set level prior to annuitization.
For example, you could specify that 30% of your Contract Values should be in the
Balanced Portfolio, 40% in the Growth Portfolio-Janus Aspen Series and 30% in
Federated High Income Bond Fund II. Over time, the variations in each
Subaccount's investment results will shift this balance of your Contract Value
allocations. If you elect the portfolio rebalancing feature, we will
automatically transfer your Contract Value back to the percentages you specify,
but only if investment results shift greater than minimum requirements that we
establish.
You may choose to have rebalances made monthly, quarterly, semi-annually, or
annually until your Annuity Date; portfolio rebalancing is not available after
you annuitize. No Transfer Fees will be charged for portfolio rebalancing. No
more than eight Subaccounts can be included for portfolio rebalancing at any
time.
Procedures for selecting portfolio rebalancing are generally the same as those
discussed in detail above for selecting dollar cost averaging. You may make your
request at any time prior to your Annuity Date. If you stop portfolio
rebalancing, you must wait 30 days to begin again. You may specify a date for
your first rebalance, or your first rebalancing, and all rebalancing thereafter
will occur on the day of the month (following receipt of your request) that
coincides with the same day of the month as your Contract Anniversary date. If
you specify a date fewer than 30 days after your Issue Date, your first
rebalance will be delayed one month and if you request rebalancing on your
application but do not specify a date for the first rebalance, it will occur one
period after your Issue Date. If those Subaccounts, collectively, selected for
rebalancing fall below any minimum value that we may establish, we have the
right, at our option, to prohibit or limit the use of portfolio rebalancing. You
may not use dollar cost averaging and portfolio rebalancing at the same time. We
may change, terminate, limit, or suspend portfolio rebalancing at any time.
CONTRACT VALUE
We will establish an account for you and will maintain your account during the
Accumulation Period. The value of a Contract for any Valuation Period is equal
to the sum of the variable accumulation values of the Subaccounts for that
Valuation Period, plus the value of the Fixed Account.
SEPARATE ACCOUNT ACCUMULATION UNIT VALUE
Accumulation Unit Value is determined Monday through Friday on each day that the
New York Stock Exchange is open for business.
A separate Accumulation Unit Value is determined for each Subaccount. If we
elect or are required to assess a charge for taxes, a separate Accumulation Unit
Value may be calculated for Contracts issued in connection with Non-Qualified
and Qualified Plans, respectively, within each Subaccount.
The Accumulation Unit Value for each Subaccount will vary with the price of a
share in the Portfolio the Subaccount invests in, and in accordance with the
Mortality and Expense Risk Charge, Administrative Expense Charge, and any
provision for taxes. Assessments of Withdrawal Charges, transfer fees and
Contract Administration Charges are made separately for each Contract. They are
effected by redemption of Accumulation Units and do not affect Accumulation Unit
Value.
The Accumulation Unit Value of a Subaccount for any Valuation Period equals the
Accumulation Unit Value as of the immediately preceding Valuation Period,
multiplied by the Net Investment Factor for that Subaccount for the current
Valuation Period. The Net Investment Factor is a number representing the change
on successive Valuation Dates in value of Subaccount assets due to investment
income, realized or unrealized capital gains and losses, deductions for taxes,
if any, and deductions for the Mortality and Expense Risk Charge and
Administrative Expense Charge. If the Net Investment Factor for a Subaccount is
greater than one, the Accumulation Unit Value of that Subaccount has increased.
If the Net Investment Factor is less than one, the Subaccount's Accumulation
Unit value has decreased.
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ALLOCATION OF PURCHASE PAYMENTS
Purchase Payments are allocated to the Subaccount(s)and Fixed Account as you
have selected. When you make your initial Purchase Payment, you must specify
your allocation on the application for a Contract. Percentages must be in whole
numbers and the total allocation must equal 100%. All initial Purchase Payments
will be credited as of the date of receipt to the Fidelity Money Market
Subaccount. If the application is in good order, we will apply the resulting
Contract Value (from deposit of the initial Purchase Payments in the Fidelity
Money Market Subaccount) to the Subaccount(s) and/or Fixed Account, as selected,
and credit the Contract with Accumulation Units within two business days of
receipt at the Company's P.O. Box identified on the first page of this
prospectus. The number of Accumulation Units in a Subaccount attributable to
the resulting Contract Value is determined by dividing that portion which is
allocated to the Subaccount by that Subaccount's Accumulation Unit value as of
the end of the Valuation Period when the allocation occurs. If state law
requires us to return at least your Purchase Payment during the "free-look"
period, initial Purchase Payments may be allocated to the Fidelity Money Market
Subaccount for twenty days following the Issue Date, or longer if required by
state law. They will then be allocated to the Fixed Account and/or Subaccounts
you have selected.
If the application for a Contract is not in good order, we will attempt to
rectify it within five business days of our receipt. An example of an
application not being in good order would be one in which no allocation was
specified. We will credit the initial Purchase Payment within two business days
after the application has been rectified. Unless the prospective Contract Owner
consents otherwise, the application and the initial Purchase Payment will be
returned if the application cannot be put in good order within five business
days of such receipt.
When you make subsequent Purchase Payments, you should specify how you want your
payments allocated. Otherwise, we will automatically process the purchase
payment based on the then current Purchase Payment allocation.
LARGE CASE CREDIT
Wherever allowed by law, and so long as your Contract is Non-Qualified, we will
credit an additional amount ("Large Case Credit") to your Contract if your
initial Purchase Payment is at least one million ($1,000,000) dollars. We will
make this Large Case Credit with funds from our general account. The amount of
the Large Case Credit is 3% of the initial Purchase Payment.
If you return your Contract to us during the "free look period," we will deduct
the then current value of the Large Case Credit from your Contract Value before
we return the amount due you. Our understanding is that this Large Case Credit
amount is not considered to increase the cost basis of the Contract for income
tax purposes (see "Taxes," page 21). We do not include the Large Case Credit
amount in the amounts available for free withdrawal (see "Free Withdrawal," page
13).
TRANSFER DURING ACCUMULATION PERIOD
During the Accumulation Period, you may transfer Contract Values among the Fixed
Account and Subaccounts by written request or telephone authorization. NO SUCH
TRANSFERS ARE PERMITTED AFTER THE ANNUITY DATE. Currently, there is no minimum
transfer amount required. We reserve the right to impose a minimum amount that
may be transferred among the investment options under the Contract. Additional
restrictions apply to transfers from/to the Fixed Account as described below.
Transfers from the Fixed Account to the Subaccounts may only be made during the
60 day period beginning on the issue date or the Contract Anniversary unless the
transfer is made by Dollar Cost Averaging. The maximum amount which may be
transferred from the Fixed Account during a Contract Year is the greater of 30%
of the Fixed Account balance as of the last Contract Anniversary or the greatest
amount of any prior transfer from the Fixed Account. If desired, you may elect
to have the above amount transferred quarterly or monthly via Dollar Cost
Averaging. Alternatively, you may elect to transfer the entire Fixed Account
balance to the Subaccount(s) via Dollar Cost Averaging. The maximum monthly
amount allowed would be 1/36 of the Fixed Account Balance at the time of the
first tranfser. No additional transfers or payments may be made into the Fixed
Account if transfers are being made out via Dollar Cost Averaging.
Notwithstanding the above, we will allow 100% of the Fixed Account balance to be
transferred to the Subaccount(s) if either (a) or (b) occurs:
(a) If, on the last Contract Anniversary, the interest rate credited to the
Fixed Account is less than it was on the immediately preceding anniversary (or
on the issue date for the first Contract Anniversary).
(b) The credited interest rate on the last Contract Anniversary is less than 4%.
This offer will apply for 60 days following the date we mail notification to
you.
We reserve the right to defer transfers from the Fixed Account for up to six
months from the date you ask us. Also, we reserve the right to restrict
transfers from the Subaccounts to the Fixed Account each Contract Year to no
more than 30% of the Separate Account balances as of the last Contract
Anniversary. We currently are not imposing this restriction.
TRANSFERS AUTHORIZED BY TELEPHONE
Telephone calls authorizing transfers must be completed by 4:00 p.m. Eastern
time on a Valuation Date in order to be effected at the price determined on such
Date. Transfer authorizations, whether written or by telephone, which are
received after 4:00 p.m. Eastern time will be
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processed as of the next Valuation Date. A proper telephone authorization form
for transfers must be on file. A transfer fee may be assessed in connection with
transfers (see "Contract Charges- Administrative Charges - Transfer Fee," Page
12). Also, the telephone transfer privilege may be suspended, modified or
terminated at any time without notice.
We utilize procedures that we believe provide reasonable assurance that
telephone authorized transfers are genuine. Such procedures include taping of
telephone conversations with persons purporting to authorize such transfers and
requesting identifying information from such persons. Accordingly, we disclaim
any liability for losses resulting from such transfers by reason of their
allegedly not having been properly authorized. However, if we do not take
reasonable steps to help ensure that such authorizations are valid, we may be
liable for such losses.
CONTRACT LOANS FOR 401(A), 401(K), AND 403(B)
CONTRACTS
During the Accumulation Period but after the "free look" period, the Owner of a
Contract used in connection with a Tax Sheltered Annuity Plan ("TSA Plan") under
Section 403(b) of the Code, or an Owner of a Contract purchased by a pension,
profit-sharing, or other similar plan qualified under Section 401(a) of the Code
(a "401 Plan"), including a Section 401(k) plan, where a plan trustee is the
Owner, may receive a loan from the Surrender Value subject to the terms of the
Contract, the Plan, and the Code, which impose restrictions on loans.
The loan amount cannot exceed an amount which when added to any existing loan
exceeds the Surrender Value on the date of the loan. In addition, the total
loan, when added to the outstanding loan balance under all other plans of the
participant, may not exceed the lesser of (a) or (b) where:
(a) is $50,000 reduced by the excess of the highest outstanding loan balance
during the prior 12 month period over the outstanding balance of loans; and
(b) is the greater of $10,000 or 1/2 of the Surrender Value.
The minimum loan amount is $1,000.
The Owner has the sole responsibility for requesting loans and making loan
repayments that comply with applicable tax requirements. Loans must comply with
the applicable provisions of Section 72 of the Code and Title 1 of ERISA.
Please seek advice from your plan administrator or tax advisor.
When a loan is made, a portion of the Surrender Value sufficient to secure the
loan will be transferred to the Loan Account reducing the Contract Value in the
Separate Acccount and/or the Fixed Account. Unless instructed to the contrary
by the Contract Owner, we will first transfer to the Loan Account amounts from
the Separate Account in proportion to the assets in each Subaccount until the
required balance is reached or all such variable units are exhausted. The
remaining required collateral will next be transferred from the Fixed Account.
No withdrawal charges are deducted at the time of the loan, or on the transfer
from the Variable Account to the Fixed Account.
Amounts transferred to the Loan Account will accrue interest at an annual rate
2.25% less than the loan interest rate fixed by us for the term of the loan.
However, the interest rate credited to the Loan Account will never be less than
the Fixed Account guaranteed rate of 3%. Amounts transferred to the Loan
Account will no longer be affected by the investment experience of the Separate
Account.
The Death Benefit and Contract Value available for partial withdrawal or
surrender, as well as the amount applied on the Annuity Date to provide annuity
payments will be reduced by the amount of the loan outstanding plus accrued
interest.
You must repay any loan within five years of the date the loan is made.
Scheduled payments must be level, amortized over the repayment period, and made
at least quarterly. A repayment period of 15 or 30 years is acceptable if the
loan proceeds are used to acquire a dwelling unit which is to be used by you as
a principal residence. Other repayment periods may be available at our
discretion.
Loan repayments must be identified as such; otherwise, they may be credited to
the Contract as Purchase Payments.
If a loan payment is not made when due, interest will continue to accrue. We
will declare the entire loan in default. The defaulted loan balance plus
accrued interest will be deducted from any future Distribution under the
Contract and paid to us. Any defaulted amount plus interest will be treated as
a Distribution (as permitted by law) and may be taxable to the borrower, may be
subject to the early withdrawal tax penalty, and will be subject to the
mandatory 20% federal withholding.
If the total loan amount exceeds the Surrender Value, we will mail written
notice to your last known address. The notice will state the amount needed to
maintain the Contract in force. If payment of this amount is not received
within 31 days after the date this notice is mailed, the Contract will
terminate.
We reserve the right to defer making any loan for 6 months after you ask us for
it, unless the loan is to pay a premium to us.
WITHDRAWALS (REDEMPTIONS)
Except as explained below,you may redeem a Contract for all or a portion of its
Contract Value during the Accumulation Period. Withdrawal Charges may be
applicable, however, which would reduce the Contract Value upon redemption.
(See "Contract Charges - Withdrawal Charge" on Page 12 for additional
information.)
Withdrawals and distributions from Contracts issued in connection with certain
Qualified Plans may be subject to a mandatory 20% withholding requirement. See
"Taxes -- Withholding Tax on Distributions," on Page
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22.
Withdrawals of amounts attributable to contributions made pursuant to a salary
reduction agreement (in accordance with Section 403(b)(11) of the Code) are
limited to circumstances only: when you attain age 59 1/2, separate from
service, die, become disabled (within the meaning of Section 72(m)(7) of the
Code), or in the case of hardship. Withdrawals for hardship are restricted to
the portion of the Contract Value which represents your contributions and does
not include any investment results. These limitations on withdrawals apply to:
(1) salary reduction contributions made after December 31, 1988; (2) income
attributable to such contributions; and (3) income attributable to amounts held
as of December 31, 1988. The limitations on withdrawals do not affect transfers
between certain Qualified Plans. Additional restrictions and limitations may
apply to distributions from any Qualified Plan. Tax penalties may also apply.
You should seek competent tax advice regarding any withdrawals or distributions
from Qualified Plans. (See "Tax Treatment of Withdrawals," beginning at Page
22.) Except in connection with a Systematic Withdrawal Program, described
below, the minimum partial withdrawal amount is $250, or, if less, your entire
interest in the Subaccount from which a withdrawal is requested.
A written withdrawal request or systematic withdrawal program enrollment form,
as the case may be, must be sent to us. For partial withdrawals, you may
allocate the amount among the Subaccounts of the Separate Account. The required
program form will not be in good order unless it includes your Tax I.D. Number
(e.g., Social Security Number) and provides instructions regarding withholding
of income taxes. We provide the required forms. The amount of the partial
withdrawal will be allocated proportionately from the Subaccounts and the Fixed
Account, unless you specify otherwise.
If the request is for total withdrawal, the Contract must be submitted. The
Surrender Value is determined on the basis of the Contract Value next computed
following receipt of a request in proper order. The Surrender Value will
normally be paid within seven days after the day we receive a proper request.
However, we may suspend the right of withdrawal from the Separate Account or
delay payment for such withdrawal more than seven days: (1) during any period
when the New York Stock Exchange ("NYSE") is closed (other than customary
weekend and holiday closings); (2) when trading on the NYSE is restricted or an
emergency exists as determined by the Securities and Exchange Commission so that
disposal of the Separate Account's investments or determination of Accumulation
Unit values is not reasonably practicable; or (3) for such other periods as the
Securities and Exchange Commission, by order, may permit for your protection.
In addition, we may delay payment of the Surrender Value in the Fixed Account
for up to 6 months (or a shorter period if required by applicable law).
SYSTEMATIC WITHDRAWAL PROGRAM
Owners of Contracts issued in connection with Non-Qualified Plans and IRAs may
choose to participate in a Systematic Withdrawal Program. You must complete an
enrollment form and send it to us. The withholding election section of the
enrollment form must be complete before the Systematic Withdrawals will begin.
Systematic Withdrawals of a flat dollar amount, earnings, or a percentage of
Purchase Payments are available. Systematic Withdrawals are treated the same as
partial withdrawals for purposes of determining if a withdrawal charge applies.
Systematic Withdrawals are offered on a monthly, quarterly, semi-annual, or
annual basis.
Depending on fluctuations in the net asset value of the Subaccounts and the
value of the Fixed Account, Systematic Withdrawals may reduce or even exhaust
the Contract Value. The minimum amount of each Systematic Withdrawal is $50.
Systematic Withdrawal payments are made only to you. We reserve the right to
modify or suspend the Systematic Withdrawal Program and to charge a processing
fee for the service. If we modify or suspend the Systematic Withdrawal Program,
existing Systematic Withdrawal payments will not be affected.
ERISA PLANS
Spousal consent may be required when a married Participant seeks a distribution
from a Contract that has been issued in connection with a Qualified Plan (or a
Non-Qualified Plan that is subject to Title 1 of ERISA). You should obtain
competent advice.
MINIMUM CONTRACT VALUE
If the Contract Value is less than $250 and no Purchase Payments have been made
during the previous three full calendar years, we reserve the right, after 60
days written notice to you, to terminate the Contract and distribute its
Surrender Value to you. This privilege will be exercised only if the Contract
Value has been reduced to less than $250 as a result of withdrawals, and state
law permits. In no instance shall such termination occur if the value has
fallen below $250 due to either decline in Accumulation Unit value or the
imposition of fees and charges. Other rules may apply to Contracts issued in
connection with Qualified Plans.
ANNUITY PERIOD
ANNUITY DATE
You select an Annuity Date (the date on which annuity payments are to begin) at
the time of application. The Annuity Date must always be the tenth day of a
calendar month. Also, we reserve the right to require the Annuity Date be at
least two years from the Issue Date, unless an earlier date is required by law.
Annuity payments will begin in any event no later than the Latest Annuity Date.
If no Annuity Date is selected, the Annuity Date will be the Latest Annuity
Date. You may change the Annuity Date at any time at least seven days prior to
the Annuity Date then indicated on our records by sending written
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notice to us.
DEFERMENT OF PAYMENTS
We may defer for up to 15 days the payment of any amount attributable to a
Purchase Payment made by check to allow the check reasonable time to clear. We
may defer making Fixed Annuity payments for a period of up to six months or such
lesser time as state law may require. Interest, subject to state law
requirements, will be credited during the deferral period.
ANNUITY OPTIONS
No lump sum settlement option is available under the contract. You may
surrender the contract prior to the Annuity Date; however, any applicable
withdrawal charge will be deducted from the Contract Value. You may elect an
Annuity Option at any time prior to the Annuity Date. A change of Annuity
Option is permitted if made at least seven days before the Annuity Date. If no
other Annuity Option is elected, monthly annuity payments will be made in
accordance with Option B below, with 10 years (120 months) guaranteed (or Option
C in the case where payments are to be made for the joint lives of the Annuitant
and a designated second person and for the life of the survivor). Annuity
payments will be made in monthly, quarterly, semi-annual or annual installments
as you select. However, if the amount available to apply under an Annuity
Option is less than $5,000, and state law permits, we have the right to pay the
annuity in one lump sum. In addition, if the first payment provided would be
less than $50, and state law permits, we shall have the right to require the
frequency of payments be at quarterly, semi-annual or annual intervals so as to
result in an initial payment of at least $50.
NO WITHDRAWALS OF CONTRACT VALUE ARE PERMITTED DURING THE ANNUITY PERIOD FOR ANY
ANNUITY OPTION INVOLVING LIFE CONTINGENCIES.
The following Annuity Options are generally available under the Contract. Each
is available in the form of either a Fixed Annuity or a Variable Annuity (or a
combination of both Fixed and Variable Annuity). Fixed Account Contract Values
will be applied to provide a Fixed Annuity. However, there may be restrictions
in the retirement plan pursuant to which a Contract has been purchased. Annuity
payments are made on the Valuation Date on or immediately following the tenth of
the month, beginning on the Annuity Date.
Option A, Life Annuity. Monthly payments are made during the Annuitant's life,
starting with the Annuity Date. No payments will be made after the Annuitant
dies. It is possible for the payee to receive only one payment under this
option, if the Annuitant dies before the second payment is due.
Option B, Life Annuity with Payments Guaranteed for 5 to 20 Years. Monthly
payments are made starting on the Annuity Date. Payments will continue as long
as the Annuitant lives. If the Annuitant dies before all of the guaranteed
payments have been made, we will continue installments of the guaranteed
payments to the Beneficiary.
Option C, Joint and Full Survivor Annuity. Monthly payments are made starting
with the Annuity Date. Payments will continue as long as either the Annuitant
or the joint Annuitant is alive. Payments will stop when both the Annuitant and
the joint Annuitant have died. It is possible for the payee or payees under this
option to receive only one payment, if both Annuitants die before the second
payment is due.
Option D, Payments for a Specified Period Certain, 5 Years to 25 Years. Monthly
payments are made starting on the Annuity Date, and continuing for the specified
period of time, as elected. If the Annuitant dies before all of the guaranteed
payments have been made, we will continue installments of the guaranteed
payments to the Beneficiary.
OTHER OPTIONS
We may have other annuity options available. Information about them may be
obtained by writing or calling us.
With respect to Contracts issued under Sections 401, 403(b) or 408 of the
Internal Revenue Code, any payments will be made only to you and/or your spouse.
DEATH BENEFIT DURING ANNUITY PERIOD
If the Annuitant dies after the Annuity Date while the Contract is in force, the
death proceeds, if any, will depend upon the Annuity Option in effect at the
time of the payee's death. If the Annuitant dies after the Annuity Date and
before the entire interest in the Contract has been distributed, the remaining
interest, if any, as provided for in the Option elected, will be distributed at
least as rapidly as under the method of distribution in effect at the
Annuitant's death.
VARIABLE ANNUITY PAYMENTS
The basic objective of a Variable Annuity Contract is to provide Variable
Annuity payments which will be to some degree responsive to changes in the
economic environment. The amount of Variable Annuity Payments ("Payments")
depends upon the investment experience of the Portfolios you have selected, any
premium taxes, the age and sex of the Annuitant, and the Annuity Option chosen.
We guarantee that the Payments will not be affected by (1) actual mortality
experience and (2) the amount of our administration expenses.
The Contracts offered by this prospectus (except in states which require unisex
annuity tables) contain life annuity tables that provide for different benefit
payments to men and women of the same age. Nevertheless, in accordance with the
U.S. Supreme Court's decision in Arizona Governing Committee v. Norris, in
certain employment-related situations, annuity tables that do not vary on the
basis of sex may be used. Accordingly, if the Contract is to be used in
connection with an employment-related retirement or benefit plan, consideration
should be given, in consultation with legal counsel, to the impact of Norris on
any such plan before making any contributions under
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these Contracts.
The Payments may be more or less than the total Purchase Payments made because
(a) Payments vary with the investment results of the underlying Portfolios; (b)
you bear the investment risk with respect to all amounts allocated to the
Separate Account, and (c) Annuitants may die before the actuarial life
expectancy is achieved. As such, the amount of the Payments cannot be predicted.
The duration of the Annuity Option will affect the dollar amounts of each
Payment. For example, if an annuity option guaranteed for life is chosen, the
Payments will be greater than Payments under an annuity option for a minimum
specified period and guaranteed thereafter for life.
If the actual net investment experience is less than the assumed investment
rate, then the dollar amount of the Payments will decrease. The dollar amount
of the Payments will stay level if the net investment experience equals the
assumed investment rate and the dollar amount of the Payments will increase if
the net investment experience exceeds the assumed investment rate. The assumed
annual investment rate is 3 1/2%.
ADMINISTRATION
We have primary responsibility for all administration of the Contracts and the
Separate Account. Our mailing address is P.O. Box 82532, Lincoln, Nebraska
68501-2532, and our telephone number is 1-800-865-5237.
The administrative services provided include, but are not limited to: issuance
of the Contracts; maintenance of Contract Owner records; Contract Owner
services; calculation of unit values; and preparation of Contract Owner reports.
Contract statements and transaction confirmations are mailed to you at least
quarterly. You should therefore give us prompt written notice of any address
change. You should read your statements and confirmations carefully and verify
their accuracy. Questions about periodic statements should be communicated to
us promptly. We will investigate all complaints and make any necessary
adjustments retroactively, provided that we have received notice of a potential
error within a reasonable time period after the date of the questioned
statement. If we have not received notice of a potential error within this
time, any adjustment shall be made as of the date that we receive notice of the
potential error.
We will also provide you with such additional periodic and other reports,
information and prospectuses as may be required by federal securities laws.
TAXES
NOTE: The following description is based upon our understanding of current
federal income tax law applicable to annuities in general. We cannot predict
the probability that any changes in such laws will be made. Purchasers are
cautioned to seek competent tax advice regarding the possibility of such
changes. We do not guarantee the tax status of the Contracts. Purchasers bear
the complete risk that the Contracts may not be treated as "annuity contracts"
under federal income tax laws.
GENERAL
Section 72 of the Internal Revenue Code of 1986, as amended (the "Code") governs
taxation of annuities in general. A Contract Owner who is a natural person is
not taxed on increases in the value of a Contract until distribution occurs,
either in the form of a non-annuity distribution or as annuity payments under
the Annuity Option elected. For a lump sum payment received as a total
surrender (total redemption), the recipient is taxed on the portion of the
payment that exceeds the cost basis of the Contract. For a payment received as
a withdrawal (partial redemption), federal tax liability is determined on a
last-in, first-out basis, meaning taxable income is withdrawn before the cost
basis of the Contract is withdrawn. For Contracts issued in connection with Non-
Qualified Plans, the cost basis is generally the Purchase Payments, while for
Contracts issued in connection with Qualified Plans there may be no cost basis.
The taxable portion of the lump sum payment is taxed at ordinary income tax
rates. Tax penalties may also apply.
For annuity payments, the taxable portion is determined by a formula which
establishes the ratio that the cost basis of the Contract bears to the total
value of annuity payments for the term of the annuity Contract. The taxable
portion is taxed at ordinary income tax rates. Contract Owners, Annuitants and
Beneficiaries under the Contracts should seek competent financial advice about
the tax consequences of distributions under the retirement plan under which the
Contracts are purchased.
All Non-Qualified annuity Contracts that are issued by the Company (or its
affiliates) to the same Owner during any calendar year will be aggregated and
treated as one annuity Contract for purposes of determining the amount
includable in gross income under section 72(e) of the Code. Accordingly, an
Owner should consult a competent tax adviser before purchasing more than one
Non-Qualified annuity Contract. Further, if a Non-Qualified Contract has an
Owner who is not a natural person, a change of Annuitant will cause the Contract
to be treated as if the Contract Owner died.
A transfer of ownership of a Contract, the designation of an Annuitant or other
Beneficiary who is not also the Owner, an assignment of a Contract or the
exchange of a Contract may result in certain tax consequences to the Owner that
are not discussed herein. An Owner contemplating any such transfer, assignment,
or exchange of a Contract should contact a competent tax adviser with respect to
the potential tax effects of such a transaction.
We are taxed as a life insurance company under the Code. For federal income tax
purposes, the Separate Account is not a separate entity from us and its
operations form a part of the Company.
WITHHOLDING TAX ON DISTRIBUTIONS
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The Code generally requires us (or, in some cases, a plan administrator) to
withhold tax on the taxable portion of any distribution or withdrawal from a
Contract. For "eligible rollover distributions" from Contracts issued under
certain types of Qualified Plans, 20% of the distribution must be withheld,
unless the payee elects to have the distribution "rolled over" to another
eligible plan in a direct "trustee to trustee" transfer. This requirement is
mandatory and cannot be waived by the Contract Owner. Withholding on other types
of distributions can be waived.
An "eligible rollover distribution" is the estimated taxable portion of any
amount received by a covered employee from a plan qualified under Section 401(a)
or 403(a) of the Code (these rules do not apply to Section 408(b) Contracts), or
from a tax-sheltered annuity qualified under section 403(b) of the Code (other
than (1) annuity payments for the life (or life expectancy) of the employee, or
joint lives (or joint life expectancies) of the employee and his or her
designated beneficiary, or for a specified period of ten years or more; and (2)
distributions required to be made under the Code). Failure to "roll over" the
entire amount of an eligible rollover distribution (including an amount equal to
the 20% portion of the distribution that was withheld) could have adverse tax
consequences, including the imposition of a penalty tax on premature
withdrawals, described later in this section.
Withdrawals or distributions from a Contract other than eligible rollover
distributions are also subject to withholding on the estimated taxable portion
of the distribution, but the Contract Owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
In addition, some states may require that state income tax be withheld.
TAX TREATMENT OF ASSIGNMENTS
An assignment of a Contract may have tax consequences, and may also be
prohibited by ERISA in some circumstances. Owners should therefore consult
competent legal advisers should they wish to assign their Contracts.
TAX TREATMENT OF WITHDRAWALS
QUALIFIED PLANS
Section 72(t) of the Code imposes a 10% penalty tax on the taxable portion of
any early distribution from qualified retirement plans, including contracts
issued and qualified under Code Sections 401 (H.R. 10 and Corporate Pension and
Profit Sharing Plans), 403(b) (Tax-Sheltered Annuities) and 408(b) (IRAs).
The tax penalty will not apply to the following distributions: (1) if
distribution is made on or after the date on which the Contract Owner reaches
age 59 1/2; (2) distributions following the death or disability of the Contract
Owner or Annuitant (as applicable) (for this purpose "disability" is defined in
Section 72(m)(7) of the Code); (3) distributions that are part of substantially
equal periodic payments made not less frequently than annually for the life (or
life expectancy) of the Contract Owner or Annuitant (as applicable) or the joint
lives (or joint life expectancies) of such Contract Owner or Annuitant (as
applicable) and his or her designated beneficiary; (4) distributions to a
Contract Owner or Annuitant (as applicable) who has separated from service after
he or she has attained age 55; (5) distributions made to the Contract Owner or
Annuitant (as applicable) to the extent such distributions do not exceed the
amount allowable as a deduction under Code Section 213 to the Contract Owner or
Annuitant (as applicable) for amounts paid during the taxable year for medical
care; and (6) distributions made to an alternate payee pursuant to a qualified
domestic relations order.
The exceptions stated in items (4), (5) and (6) above do not apply in the case
of an IRA.
Limitations imposed by the Code on withdrawals from tax-sheltered annuities are
described above under "Purchases, Withdrawals and Contract Value -- Withdrawals
(Redemptions)," on Page 18.
The taxable portion of a withdrawal or distribution from Contracts issued under
certain types of plans may, under some circumstances, be "rolled over" into
another eligible plan so as to continue to defer income tax on the taxable
portion. Effective January 1, 1993, such treatment is available for any
"eligible rollover distribution" made by certain types of plans (as described
above under "Taxes -- Withholding Tax on Distributions," page 22) that is
transferred within 60 days of receipt into a plan qualified under section 401(a)
or 403(a) of the Code, a tax-sheltered annuity, an IRA, or an individual
retirement account described in section 408(a) of the Code. Plans making such
eligible rollover distributions are also required, with some exceptions
specified in the Code, to provide for a direct "trustee to trustee" transfer of
the distribution to an eligible transferee plan designated by the recipient.
Amounts received from IRAs may also be rolled over into other IRAs, individual
retirements accounts or certain other plans, subject to limitations set forth in
the Code.
NON-QUALIFIED PLANS
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the Contract Value exceeds the aggregate
Purchase Payments made, any amount withdrawn not in the form of an annuity
payment will be treated as coming first from the earnings and then, only after
the income portion is exhausted, as coming from the principal. Withdrawn
earnings are includable in a taxpayer's gross income. Section 72 further
provides that a 10% penalty will apply to the income portion of any premature
distribution. The penalty is not imposed on amounts received: (1) after
the
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taxpayer reaches 59 1/2; (2) upon the death of the Contract Owner or Annuitant
(as applicable); (3) if the taxpayer is totally disabled; (4) in a series of
substantially equal periodic payments made for the life of the taxpayer or for
the joint lives of the taxpayer and his Beneficiary; (5) under an immediate
annuity; or (6) which are allocable to purchase payments made prior to August
14, 1982.
Separate tax withdrawal penalties and restrictions apply to Qualified Plan
Contracts.
DISTRIBUTION OF CONTRACTS
Contracts are sold by registered representatives of broker-dealers who are our
licensed insurance agents, either individually or through an incorporated
insurance agency. Commissions paid to broker-dealers may vary, but in the
aggregate are not anticipated to exceed 6% of all Purchase Payments (on a
present value basis). From time to time, additional sales incentives (up to 1%
of Purchase Payments) may be provided to broker-dealers maintaining certain
sales volume levels.
Lincoln Benefit Financial Services, Inc. ("LBFS") located at 206 South 13th
Street, Lincoln, Nebraska 68508 serves as distributor of the Contracts. LBFS
is a wholly-owned subsidiary of Lincoln Benefit Life Company. It is registered
as a broker-dealer under the Securities Exchange Act of 1934, as amended, and is
a member of the National Association of Securities Dealers, Inc.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Separate Account. The
Company and its subsidiaries are engaged in various kinds of routine litigation
which, in management's judgment, is not of material importance to their
respective total assets or material with respect to the Separate Account.
LEGAL MATTERS
Legal matters relating to the federal securities laws in connection with the
Contracts described herein are being passed upon by the law firm of Katten
Muchin & Zavis, 1025 Thomas Jefferson St., East Lobby-Suite 700, Washington,
D.C. 20007-5201.
REGISTRATION STATEMENT
A registration statement has been filed with the Securities and Exchange
Commission, Washington, D.C., under the Securities Act of 1933 as amended, with
respect to the Contracts offered by this prospectus. This prospectus does not
contain all the information set forth in the registration statement and the
exhibits filed as part of the registration statement, to all of which reference
is hereby made for further information concerning the Separate Account, the
Company, and the Contracts. Statements found in this prospectus as to the terms
of the Contracts and other legal instruments are summaries, and reference is
made to such instruments as filed.
FINANCIAL STATEMENTS
The financial statements for Lincoln Benefit Life Company and the Separate
Account are set forth in the Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT
THE SEPARATE ACCOUNT
Additional information concerning the operations of the Separate Account is
contained in a Statement of Additional Information, which is available without
charge upon written request addressed to us. The contents of the Statement of
Additional Information are tabulated below.
TABLE OF CONTENTS
OF STATEMENT
OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
The Contract............................... 3
Annuity Payments...................... 3
Annuity Unit Value.................... 3
Variable Annuity Payments
--Illustrative Example................ 4
Additional Federal Income Tax Information.. 5
Diversification--Separate
Account Investments................... 5
Multiple Contracts.................... 6
Qualified Plans....................... 6
Separate Account Performance............... 7
Financial Statements....................... 12
</TABLE>
APPENDIX
PORTFOLIOS AND PERFORMANCE DATA
PERFORMANCE DATA
From time to time the Separate Account may advertise the Fidelity Money Market
Subaccount's "yield" and "effective yield." Both yield figures are based on
historical earnings and are not intended to indicate future performance. The
"yield" of the Fidelity Money Market Subaccount refers to the net income earned
by the Subaccount over a seven-day period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of income
earned during that week is assumed to be generated each week over a 52-week
period and is shown as a percentage of the investment. The "effective yield" is
calculated similarly but, when annualized, the income earned by the investment
is assumed to be reinvested at the end of each seven-day period. The "effective
yield" will be slightly higher than the "yield" becasue of the compounding
effect of this assumed reinvestment. Neither the yield nor the effective yield
takes into consideration the effect of any capital changes that might have
occurred during the seven day period, nor do they reflect the impact of premium
taxes or any Withdrawal Charges. The impact of other, recurring charges on both
yield figures is, however, reflected in them to the same extent it would effect
the yield (or effective yield) for a Contract of average size.
In addition, the Separate Account may advertise an
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annualized 30-day (or one month) yield figure for Subaccounts other than the
Fidelity Money Market Subaccount. These yield figures are based upon the actual
performance of the Subaccount over a 30-day (or one month) period ending on a
date specified in the advertisement. Like the total return data described above,
the 30-day (or one month) yield data will reflect the effect of all recurring
Contract charges (but will not reflect any Withdrawal charges or premium taxes).
The yield figure is derived from net investment gain (or loss) over the period
expressed as a fraction of the investment's value at the end of the period.
The Separate Account may also advertise standardized and non-standardized "total
return" data for its Subaccounts. Like the yield figures described above, total
return figures are based on historical data and are not intended to indicate
future performance. The standardized "total return" compares the value of a
hypothetical investment made at the beginning of the period, to the value of the
same hypothetical investment at the end of the period (asssuming the deduction
of any withdrawal charge imposed upon a complete redemption of the Contract at
the end of the period). Recurring Contract charges are reflected in the
standardized total return figures in the same manner as they are reflected in
the yield data for Contracts funded through the Money Market Subaccount. The
effect of applicable Withdrawal Charges are reflected in the standardized return
figures.
In addition to the standardized "total return," the Separate Account may
advertise non-standardized "total return." Non-standardized total return is
calculated in a similar manner and for the same time periods as the standardized
total return except that the Withdrawal Charge is not deducted. Further, an
initial hypothetical investment of $20,000 is assumed (rather than the initial
hypothetical investment of $1,000 used in computing standardized total return),
since $20,000 is closer to the average Purchase Payment of a Contract which we
expect to write.
The Separate Account may also disclose yield, standardized total return and non-
standardized total return for time periods before the date the Separate Account
commenced operations. In this case, performance data for the Subaccounts is
calculated based on the performance of the Underlying Funds and assumes that the
Subaccounts existed during the same time period as those of the Underlying
Funds, with recurring contract charges equal to those currently assessed against
the Subaccounts.
Advertisements we distribute may also compare the performance of our Subaccounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. This may include the
performance ranking assigned by various publications, including but not limited
to the Wall Street Journal, Forbes, Fortune, Money, Barron's, Business Week, USA
Today, and statistical services, including but not limited to Lipper Analytical
Services Mutual Fund Survey, Lipper Annuity and Closed End Survey, the Variable
Annuity Research Data Survey, and SEI.
For a more complete description of Contract charges, see "Contract Charges,"
beginning at Page 12. More detailed information on the computation of advertised
performance data for the Separate Account is contained in the Statement of
Additional Information.
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STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACTS
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
DEPOSITOR: LINCOLN BENEFIT LIFE COMPANY
This Statement of Additional Information is not a prospectus; it should be read
with the prospectus relating to the annuity contracts described above, a copy of
which may be obtained without charge by written request addressed to:
Lincoln Benefit Life Company
P.O. Box 82532
Lincoln, Nebraska 68501-2532
THE DATE OF THIS STATEMENT OF ADDITIONAL INFORMATION
AND OF THE RELATED PROSPECTUS IS: MAY 1, 1996.
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TABLE OF CONTENTS
Page
----
THE CONTRACT......................................... 3
ANNUITY PAYMENTS................................ 3
ANNUITY UNIT VALUE.............................. 3
VARIABLE ANNUITY PAYMENTS
- ILLUSTRATIVE EXAMPLE......................... 4
ADDITIONAL FEDERAL INCOME TAX INFORMATION............ 5
DIVERSIFICATION - SEPARATE ACCOUNT INVESTMENTS.. 5
MULTIPLE CONTRACTS.............................. 6
QUALIFIED PLANS................................. 6
SEPARATE ACCOUNT PERFORMANCE......................... 7
FINANCIAL STATEMENTS................................. 12
2
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THE CONTRACT
ANNUITY PAYMENTS
INITIAL MONTHLY ANNUITY PAYMENT
The initial annuity payment is determined by applying the Contract Value on the
Valuation Date next preceding the Annuity Date, less any state premium tax
payable and any applicable Withdrawal Charges, to the annuity table specified in
the Contract (or, if more favorable to the payee, the annuity tables in effect
as of the Annuity Date for similar immediate annuity contracts issued by the
Company). Those tables are based on a set amount per $1,000 of proceeds applied.
The appropriate rate must be determined by the sex (except where, as in the case
of certain Qualified Plans and other employer-sponsored retirement plans, such
classification is not permitted) and age of the Annuitant and designated second
person, if any.
The dollars applied are then divided by 1,000 and the result multiplied by the
appropriate annuity factor appearing in the table to compute the amount of the
first monthly annuity payment. In the case of a Variable Annuity, that amount is
divided by the value of an Annuity Unit as of the Valuation Date next preceding
the Annuity Date to establish the number of Annuity Units representing each
Variable Annuity payment (a separate computation is made for each Subaccount
funding the Variable Annuity). The number of Annuity Units for each Subaccount
determined for the first Variable Annuity payment remains constant for the
second and subsequent monthly Variable Annuity payments from that Subaccount.
SUBSEQUENT MONTHLY PAYMENTS
For a Fixed Annuity, the amount of the second and each subsequent monthly
annuity payment is the same as that determined above for the first monthly
payment.
The amount of the second and each subsequent monthly Variable Annuity payment
from each Subaccount is determined by multiplying the number of Annuity Units,
as determined in connection with the determination of the initial monthly
payment, above, by the Annuity Unit Value of the Subaccount as of the Valuation
Period next preceding the date on which each annuity payment is due.
ANNUITY UNIT VALUE
The value of an Annuity Unit is determined independently for each Subaccount,
but was initially set at $100.00.
The annuity tables contained in the Contract are based on a 3.5% per annum
assumed investment rate. If the actual net investment rate experienced by a
Subaccount exceeds 3.5%, Variable Annuity payments derived from allocations to
that Subaccount will increase over time. Conversely, if the actual rate is less
than 3.5%, the Variable Annuity payments will decrease over time. If the net
investment rate equals 3.5%, the Variable Annuity payments will remain constant.
If a higher assumed investment rate had been used, the initial monthly payment
would be higher, but the actual net investment rate would also have to be higher
in order for annuity payments to increase (or not to decrease).
The payee receives the value of a fixed number of Annuity Units each month from
each Subaccount funding the Variable Annuity. The value of a fixed number of
Annuity Units will reflect the investment performance of the Subaccounts
elected, and the amount of each annuity payment will vary accordingly.
For each Subaccount, the value of an Annuity Unit for any Valuation Period is
determined by multiplying the Annuity Unit Value for the immediately preceding
Valuation Period by the Net Investment Factor for the Valuation Period for which
the Annuity Unit Value is being calculated. The result is then divided by a
second factor which offsets the effect of the assumed net investment rate of
3.5% per annum which is built into the annuity tables contained in the Contract.
The Net Investment Factor is described below.
NET INVESTMENT FACTOR
The Net Investment Factor is an index applied to measure the net investment
performance of a Subaccount from one Valuation Date to the next. The Net
Investment Factor may be greater or less than or equal to one; therefore, the
value of an Annuity Unit may increase, decrease or remain the same.
3
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The Net Investment Factor for any Subaccount for any Valuation Period is
determined by dividing (a) by (b) and then subtracting (c) from the result
where:
(a) is the net result of:
(1) the net asset value of a Portfolio share held in the Subaccount
determined as of the Valuation Date at the end of the Valuation
Period, plus
(2) the per share amount of any dividend or other distribution
declared by the Portfolio if the "ex-dividend" date occurs during
the Valuation Period, plus or minus
(3) a per share credit or charge with respect to any taxes which we
paid or for which we reserved during the Valuation Period which
are determined by us to be attributable to the operation of the
Subaccount (no federal income taxes are applicable under present
law);
(b) is the net asset value of the Portfolio share held in the Subaccount
determined as of the Valuation Date at the end of the preceding
Valuation Period; and
(c) is the asset charge factor we determine for the Valuation Period to
reflect the charges for assuming the mortality and expense risks and
for the administrative expense charge.
ILLUSTRATIVE EXAMPLE
Assume that one share of a given Subaccount's underlying Portfolio had a net
asset value of $11.46 as of the close of the New York Stock Exchange ("NYSE") on
a Tuesday; that its net asset value had been $11.44 at the close of the NYSE on
Monday, the day before; and that no dividends or other distributions on that
share had been made during the intervening Valuation Period. The Net Investment
Factor for the Valuation Period (ending on Tuesday's close of the NYSE) is:
Net Investment Factor = ($11.46/$11.44) - 0.0000384 = 1.0017099
The amount subtracted from the ratio of the two net asset values (0.0000384) is
the daily equivalent of the annual asset charge against the Subaccount of 1.40%.
In the example given above, if the Annuity Unit value for the Subaccount was
$101.03523 on Monday, the Annuity Unit Value on Tuesday would have been:
$101.03523 x 1.0017099 = $101.19845
----------------------
1.0000943
VARIABLE ANNUITY PAYMENTS -- ILLUSTRATIVE EXAMPLE
Assume that a male Contract owner, P, owns a Contract in connection with which P
has allocated all of his Contract Value to a single Subaccount. P is also the
sole Annuitant and, at age 60, has elected to annuitize his Contract under
Option B, Life and 10 Years Certain. As of the last Valuation Date preceding
the Annuity Date, P's Account was credited with 7543.2456 Accumulation Units
each having a value of $15.432655. (i.e., P's Account Value at that Date is
equal to 7543.2456 x $15.432655 = $116,412.31). There are no premium taxes
payable upon annuitization and no Withdrawal Charges are applicable. Assume
also that the Annuity Unit value for the Subaccount at that same Date is
$132.56932, and that the Annuity Unit value on the Valuation Date immediately
prior to the second annuity payment date is $133.27695.
P's first Variable Annuity payment is determined from the annuity rate tables in
P's Contract, using the information assumed above. From the tables, which
supply monthly annuity payments for each $1,000 of applied Contract Value, P's
first Variable Annuity payment is determined by multiplying the monthly
installment of $5.44 by the result of dividing P's Account Value by $1,000:
First Payment = $5.44 x ($116,412.31/$1,000) = $633.28
The number of P's Annuity Units is also determined at this time and is equal to
the amount of the first Variable Annuity payment divided by the value of an
Annuity Unit at the Valuation Date immediately prior to annuitization:
4
<PAGE>
Annuity Units = $633.28 / $132.56932 = 4.77697
P's second Variable Annuity payment is determined by multiplying the number of
Annuity Units by the Annuity Unit value as of the Valuation Date immediately
prior to the second payment due date:
Second Payment = 4.77697 x $133.27695 = $636.66
The third and subsequent Variable Annuity payments are computed in a manner
similar to the second Variable Annuity payment.
Note that the amount of the first Variable Annuity payment depends on the
Contract Value in the relevant Subaccount on the Annuity Date and thus reflects
the investment performance of the Subaccount net of fees and charges during the
Accumulation Period. The amount of that payment determines the number of Annuity
Units, which will remain constant during the Annuity Period. The net investment
performance of the Subaccount during the Annuity Period is reflected in
continuing changes during that Period in the Annuity Unit value, which
determines the amounts of the second and subsequent Variable Annuity payments.
ADDITIONAL FEDERAL INCOME TAX INFORMATION
DIVERSIFICATION - SEPARATE ACCOUNT INVESTMENTS
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the Contract as
an annuity contract would result in imposition of federal income tax to the
Contract Owner with respect to earnings allocable to the Contract prior to the
receipt of payments under the Contract. The Code contains a safe harbor
provision which provides that annuity contracts such as the Contracts meet the
diversification requirements if, as of the close of each quarter, the underlying
assets meet the diversification standards for a regulated investment company,
and no more than 55% of the total assets consist of cash, cash items, U.S.
Government securities and securities of other regulated investment companies.
For purposes of determining whether or not the diversification standards imposed
on the underlying assets of variable contracts by Section 817(h) of the Code
have been met, each United States government agency or instrumentality is
treated as a separate issuer.
The Treasury Department has issued Regulations that establish diversification
requirements for the investment accounts underlying variable contracts such as
the Contracts. The Regulations amplify the diversification requirements for
variable contracts set forth in the Code and provide an alternative to the safe
harbor provision described above. Under the Regulations, an investment account
will be deemed adequately diversified if (1) no more than 55% of the value of
the total assets of the account is represented by any one investment; (2) no
more than 70% of the value of the total assets of the account is represented by
any two investments; (3) no more than 80% of the value of the total assets of
the account is represented by any three investments; and (4) no more than 90% of
the value of the total assets of the account is represented by any four
investments. These diversification standards are applied to each Subaccount of
the Separate Account by applying them to the investments of the Portfolio
underlying the Subaccount.
The Company intends that each of the Portfolios will be managed by its
respective investment adviser in such a manner as to comply with these
diversification requirements.
In connection with the issuance of the regulations on diversification
requirements, the Treasury announced that such regulations do not provide
guidance concerning the extent to which Owners may direct their investments
among Subaccounts of a Variable Account. The Internal Revenue Service has
previously stated in published rulings that a variable contract owner will be
considered the owner of separate account assets if the owner possesses incidents
of ownership in those assets such as the ability to exercise investment control
over the assets. At the time of the issuance of the diversification regulations,
the Treasury announced that guidance would be issued in the future on the extent
to which owners could direct their investments among subaccounts without being
treated as owners of the underlying assets of the Variable Account. As of the
date of this prospectus, no such guidance has been issued. It is possible that
the Treasury's position, when
5
<PAGE>
announced, may adversely affect the tax treatment of existing contracts. The
Company, therefore, reserves the right to modify the contract as necessary to
attempt to prevent the Owner from being considered the owner of the assets of
the Variable Account or otherwise to attempt to qualify the contract for
favorable tax treatment.
MULTIPLE CONTRACTS
Federal tax law provides that multiple annuity contracts which are issued within
a calendar year to the same contract owner by one company or its affiliates are
treated as one annuity contract for purposes of determining the tax consequences
of any distribution. Such treatment may result in adverse tax consequences
including more rapid taxation of the distributed amounts from such multiple
contracts. Contract Owners should consult a tax adviser prior to purchasing more
than one annuity contract in any calendar year.
QUALIFIED PLANS
The Contracts offered by this prospectus are designed to be suitable for use
under various types of Qualified Plans. Taxation of Contract Owners in Qualified
Plans varies with the type of plan and terms and conditions of each specific
plan. Contract Owners, Annuitants and Beneficiaries are cautioned that benefits
under a Qualified Plan may be subject to the terms and conditions of the Plan,
regardless of the terms and conditions of the Contracts issued pursuant to the
plan.
Following are general descriptions of the types of Qualified Plans with which
the Contracts may be used. Such descriptions are not exhaustive and are for
general information purposes only. The tax rules regarding Qualified Plans are
very complex and will have differing applications depending on individual facts
and circumstances. Each purchaser should obtain competent tax advice prior to
purchasing a Contract issued under a Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available and described in
this prospectus. Generally, Contracts issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Contracts issued under Qualified
Plans.
(a) H.R. 10 PLANS
Section 401 of the Code permits self-employed individuals to establish
Qualified Plans for themselves and their employees, commonly referred to as
"H.R. 10" or "Keogh" Plans. Contributions made to the Plan for the benefit
of the employees will not be included in the gross income of the employees
until distributed from the Plan. The tax consequences to employers may vary
depending upon the particular Plan design. However, the Code places
limitations and restrictions on all Plans on such items as: amounts of
allowable contributions; form, manner and timing of distributions; vesting
and nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. Purchasers of Contracts for use with an H.R. 10 Plan should
obtain competent tax advise as to the tax treatment and suitability of such
an investment.
(b) TAX-SHELTERED ANNUITIES
Section 403(b) of the Code permits the purchase of "Tax-Sheltered
Annuities" by public schools and certain charitable, educational and
scientific organizations described in Section 501(c)(3) of the Code. These
qualifying employers may make contributions to the Contracts for the
benefit of their employees. Such contributions are not includible in the
gross income of the employee until the employee receives distributions from
the Contract. The amount of contributions to the Tax-Sheltered Annuity is
limited to certain maximums imposed by the Code. Furthermore, the Code sets
forth additional restrictions governing such items as transferability,
distributions, nondiscrimination and withdrawals. Any employee should
obtain competent tax advice as to the tax treatment and suitability of such
an investment.
6
<PAGE>
(c) INDIVIDUAL RETIREMENT ANNUITIES
Section 408(b) of the Code permits eligible individuals to contribute to an
individual retirement program known as an "Individual Retirement Annuity"
("IRA"). Under applicable limitations, certain amounts may be contributed
to an IRA which will be deductible from the individual's gross income.
These IRAs are subject to limitations on eligibility, contributions,
transferability and distributions. Sales of Contracts for use with IRAs
are subject to special requirements imposed by the Code, including the
requirement that certain informational disclosure be given to persons
desiring to establish an IRA. Purchasers of Contracts to be qualified as
IRAs should obtain competent tax advice as to the tax treatment and
suitability of such an investment.
(d) CORPORATE PENSION AND PROFIT-SHARING PLANS
Sections 401(a) and 401(k) of the Code permit corporate employers to
establish various types of retirement plans for employees. These
retirement plans may permit the purchase of the Contracts to provide
benefits under the plan. Contributions to the plan for the benefit of
employees will not be includible in the gross income of the employee until
distributed from the plan. The tax consequences to employers may vary
depending upon the particular plan design. However, the Code places
limitations on all plans on such items as amount of allowable
contributions; form, manner and timing of distributions; vesting and
nonforfeitability of interests; nondiscrimination in eligibility and
participation; and the tax treatment of distributions, withdrawals and
surrenders. Purchasers of Contracts for use with corporate pension or
profit sharing plans should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
(e) DEFERRED COMPENSATION PLANS - SECTION 457
Section 457 of the Code, while not actually providing for a Qualified Plan
as that term is normally used, provides that governmental and certain other
tax exempt employers may establish deferred compensation plans for the
benefit of their employees which may invest in annuity contracts. The
Code, as in the case of Qualified Plans, establishes limitations and
restrictions on eligibility, contributions, and distributions. Under these
plans, contributions made for the benefit of the employees will not be
includible in the employees' gross income until distributed from the plan.
However, under a 457 plan all the compensation deferred under the plan must
remain solely the property of the employer, subject only to the claims of
the employer's general creditors, until such time as made available to an
employee or a beneficiary.
SEPARATE ACCOUNT PERFORMANCE
Performance data for the various Subaccounts are computed in the manner
described below.
FIDELITY MONEY MARKET SUBACCOUNT
Current yield is computed by first determining the Base Period Return
attributable to a hypothetical Contract having a balance of one Accumulation
Unit at the beginning of a 7 day period using the formula:
Base Period Return = (EV-SV)/(SV)
where:
SV = value of one Accumulation Unit at the start of a 7 day period
EV = value of one Accumulation Unit at the end of the 7 day period
The value of the Accumulation Unit at the end of the period (EV) is determined
by (1) adding, to the value of the Unit at the beginning of the period (SV), the
investment income from the underlying Variable Insurance Products Fund Money
Market Portfolio attributed to the Unit over the period, and (2) subtracting,
from the result, the sum of (a) the portion of the annual Mortality and Expense
Risk and Administrative Expense Charges allocable to the 7 day period (obtained
by multiplying the annually-based charges by the fraction 7/365), and (b) a
prorated portion of the annual Contract Administration Charge of $25 per
contract. The total Contract Administration Charge is allocated between the
Subaccounts in proportion to the
7
<PAGE>
respective Contract Values similarly allocated. The Charge is further reduced,
for purposes of the yield computation, by multiplying it by the ratio that the
value of the hypothetical Contract bears to the value of an account of average
size for Contracts funded by the Fidelity Money Market Subaccount. Finally, as
is done with the other charges discussed above, the result is multiplied by the
fraction 7/365 to arrive at the portion attributable to the 7 day period. The
current yield is then obtained by annualizing the Base Period Return:
Current Yield = (Base Period Return) x (365/7)
The Fidelity Money Market Subaccount also quotes an "effective yield" that
differs from the current yield given above in that it takes into account the
effect of dividend reinvestment in the Variable Insurance Products Fund Money
Market Portfolio. The effective yield, like the current yield, is derived from
the Base Period Return over a 7 day period. However, the effective yield
accounts for dividend reinvestment by compounding the current yield according to
the formula:
Effective Yield = [(Base Period Return + 1)/365/7/-1].
Net investment income for yield quotation purposes will not include either
realized capital gains and losses or unrealized appreciation and depreciation,
whether reinvested or not. The yield quotations also do not reflect any impact
of premium taxes, transfer fees, or Withdrawal Charges.
The yields quoted should not be considered a representation of the yield of the
Fidelity Money Market Subaccount in the future since the yield is not fixed.
Actual yields will depend not only on the type, quality and maturities of the
investments held by the Variable Insurance Products Fund Money Market Portfolio
and changes in interest rates on such investments, but also on factors such as a
Contract Owner's account size (since the impact of fixed dollar charges will be
greater for small accounts than for larger accounts).
Yield information may be useful in reviewing the performance of the Fidelity
Money Market Subaccount and for providing a basis for comparison with other
investment alternatives. However, the Fidelity Money Market Subaccount's yield
fluctuates, unlike bank deposits or other investments that typically pay a fixed
yield for a stated period of time.
OTHER SUBACCOUNTS
Subaccounts of the Separate Account other than the Money Market Subaccount
compute their performance data in terms of an annualized "yield" and/or as
"total return".
Yield
Yield will be expressed as an annualized percentage derived from the
Subaccount's performance over a stated 30-day (or one month) period. Like the
yield figures for the Fidelity Money Market Subaccount, the 30-day (or one
month) annualized yield figures will reflect all recurring Contract charges and
will not reflect Withdrawal Charges, transfer fees or premium taxes. To arrive
at the yield percentage over the 30-day (or one month) period, the net income
per Accumulation Unit of the Subaccount during the period is divided by the
value of an Accumulation Unit as of the end of the period. The yield figure is
then annualized by assuming monthly compounding of the 30-day (or one month)
figure over a six month period and then doubling the result.
The formula used in computing the yield figure is:
Yield = 2 ( ((a-b) + 1) /6/ - 1)
_____
cd
where:
a = net investment income earned during the period by the underlying
Portfolio attributable to its shares held in the Subaccount;
b = expenses accrued for the period (net of reimbursements);
c = average daily number of Accumulation Units outstanding during the
period; and
d = the net asset value of an Accumulation Unit on the last day of the
period.
8
<PAGE>
The yield figures for the Subaccounts other than the Fidelity Money Market
Subaccount reflect all recurring Contract charges, as described in the
explanation of the yield computation for the Fidelity Money Market Subaccount.
Like the Fidelity Money Market Subaccount's yield figures, the yield figures for
the other Subaccounts are derived from past performance and should not be taken
as predictive of future results.
Standardized Total Return
Standardized total return for a Subaccount represents a single computed annual
rate of return that, when compounded annually over a specified time period (one,
five, and ten years, or since inception) and applied to a hypothetical initial
investment in a Contract funded by that Subaccount made at the beginning of the
period, will produce the same Contract Value at the end of the period that the
hypothetical investment would have produced over the same period. The
standardized total rate of return (T) is computed so that it satisfies the
formula:
P(1+T)/n/ = ERV
where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the one, five, or ten year period as of the end of
the period (or fractional portion thereof).
The standardized total return figures reflect the effect of both non-recurring
and recurring charges, as discussed herein. Recurring charges are taken into
account in a manner similar to that used for the yield computations for the
Fidelity Money Market Subaccount, described above. The applicable Withdrawal
Charge (if any) is deducted as of the end of the period, to reflect the effect
of the assumed complete redemption. Because the impact of Contract
Administration Charges on a particular Contract Owner's account will generally
differ from that assumed in the computation, due to differences between most
actual allocations and the assumed one, as well as differences due to varying
account sizes, the total return experienced by an actual Subaccount over the
same time periods would generally have been different from those produced by the
computation. As with the Fidelity Money Market and other Subaccount yield
figures, standardized total return figures are derived from historical data and
are not intended to be a projection of future performance.
Non-Standardized Total Return
Non-standardized total return for a Subaccount represents a single computed
annual rate of return that, when compounded annually over a specified time
period (one, five, and ten years, or since inception) and applied to a
hypothetical initial investment in a Contract funded by that Subaccount made at
the beginning of the period, will produce the same Contract Value at the end of
the period that the hypothetical investment would have produced over the same
period. The total rate of return (T) is computed so that it satisfies the
formula:
P(1+T)/n/ = ERV
where: P = a hypothetical initial payment of $20,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $20,000 payment made at
the beginning of the one, five, or ten year period as of the end of
the period (or fractional portion thereof).
An initial hypothetical investment of $20,000 is assumed (rather than the
initial hypothetical investment of $1,000 used in computing standardized total
return) since $20,000 is closer to the average Purchase Payment of a Contract
which we expect to write. The non-standardized total return figures reflect the
effect of recurring charges, as discussed herein. Because the impact of Contract
Administration Charges on a particular Contract Owner's account will generally
differ from that assumed in the computation, due to differences between most
actual allocations and the assumed one, as well as differences due to varying
account sizes, the total return experienced by the actual Subaccount over the
same time periods would generally have been different from those produced by the
computation. As with the standardized total return figures, non-standardized
total return figures are derived from historical data and are not intended to be
a projection of future performance.
9
<PAGE>
Time Periods Before the Date the Separate Account Commenced Operations
The Separate Account may also disclose yield, standardized total return and
non-standardized total return for time periods before the date the Separate
Account commended operations. In this case, performance data for the Subaccounts
is calculated based on the performance of the Underlying Funds and assumes that
the Subaccounts existed during the same time period as those of the Underlying
Funds, with recurring contract charges equal to those currently assessed against
the Subaccounts.
<TABLE>
<CAPTION>
TOTAL RETURN--AS OF DECEMBER 31, 1995--ASSUMING CONTRACT SURRENDERED
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN/3/
--------------------------------------------------
1 Year 5 Years 10 Years Since Inception
Inception Date/2/ % % % %
----------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C>
FIDELITY
Money Market/1/ 4/1/82 n/a n/a n/a n/a
Growth 10/9/86 30.36 18.65 n/a 13.17
Equity-Income 10/9/86 29.66 19.14 n/a 11.57
Overseas 1/28/87 3.96 6.03 n/a 7.21
Asset Manager 9/6/89 10.72 10.56 n/a 9.59
Contrafund 1/3/95 n/a n/a n/a n/a
SCUDDER
Bond 7/16/85 26.36 10.16 8.27 8.16
Balanced 7/16/85 31.26 12.28 9.93 9.97
JANUS
Flexible Income 9/13/93 14.81 n/a n/a 5.37
Balanced 9/13/93 15.98 n/a n/a 7.49
Growth 9/13/93 21.32 n/a n/a 10.00
Aggressive Growth 9/13/93 19.73 n/a n/a 17.36
Worldwide Growth 9/13/93 18.78 n/a n/a 10.41
FEDERATED
High Income Bond Fund II 3/1/94 11.20 n/a n/a 3.20
Utility Fund II 2/11/94 14.75 n/a n/a 3.38
U.S. Gov't. Securities II 3/28/94 0.20 n/a n/a 0.87
INVESTMENT ADVISERS, INC. (IAI)
Regional 1/31/94 24.39 n/a n/a 12.80
Reserve 4/7/94 -3.26 n/a n/a -1.26
Balanced 2/3/94 7.39 n/a n/a 3.51
</TABLE>
1 An investment in Fidelity Money Market is neither insured nor guaranteed by
the U.S. Government and there can be no assurance that Fidelity Money Market
will maintain a stable $1.00 share price.
2 Some of the underlying investment options were active before January 2,
1994, the effective date of the Investor's Select Separate Account. Where
applicable, performance includes hypothetical performance for periods before
the investment option was available in Investor's Select, applying contract
charges assessed at the Separate Account level to approximate the performance
the investment option would have achieved inside the Separate Account.
3 Total returns include change in share price, reinvestment of dividends, and
capital gains. The performance figures: (1) represent past performance and
neither guarantee nor predict future investment results; (2) assume an initial
hypothetical investment of $1,000 as required by the Securities and Exchange
Commission (SEC); and (3) reflect the deduction of 1.4% annual asset charges, a
$25 annual contract administration charge, and a maximum 7% contingent deferred
sales charge (declining after two years). The investment return and value of an
Investor's Select contract will fluctuate so that a contract, when surrendered,
may be worth more or less than the amount of its purchase payments.
n/a- Performance data has not been available for some investment options for
the full 1, 5, or 10 year periods (see Inception Date). Investment options with
a 9/13/93 inception date or later will not have meaningful performance to report
for many of the periods indicated.
10
<PAGE>
TOTAL RETURN - AS OF DECEMBER 31, 1995 - ASSUMING CONTRACT NOT SURRENDERED
---
<TABLE>
<CAPTION>
---------------------------------
AVERAGE ANNUAL TOTAL RETURN/5/
---------------------------------
Monthly Return/5/ Total Return YTD/5/ 1 Year 5 Year Since Inception
INVESTMENT OPTIONS Inception Date/4/ % % % % %
----------------- ----------------- ------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
FIDELITY
Money Market/1/ 4/1/82 n/a n/a n/a n/a n/a
Growth 10/9/86 -3.24 33.32 33.34 18.95 13.17
Equity-Income 10/9/86 2.80 33.02 33.05 19.49 11.57
Overseas 1/28/87 2.83 8.02 8.02 6.49 7.21
Asset Manager 9/6/89 2.40 15.18 15.19 11.05 9.79
Contrafund 1/3/95 n/a n/a n/a n/a n/a
SCUDDER
Bond 7/16/85 1.57 30.35 30.38 10.56 8.16
Balanced 7/16/85 0.33 34.73 34.76 12.62 9.97
JANUS
Flexible Income/2/ 9/13/93 2.02 21.99 22.01 n/a 7.78
Balanced 9/13/93 2.21 22.90 22.92 n/a 9.83
Growth 9/13/93 1.36 28.18 28.20 n/a 12.28
Aggressive Growth 9/13/93 5.21 25.56 25.57 n/a 19.46
Worldwide Growth 9/13/93 4.64 25.44 25.46 n/a 12.68
FEDERATED
High Income Bond II/3/ 3/1/94 1.52 18.53 18.55 n/a 6.87
Utility Fund II/3/ 2/11/94 3.42 22.28 22.30 n/a 6.94
U.S. Gov't. Securities II/3/ 3/28/94 0.98 7.11 7.11 n/a 4.76
INVESTMENT ADVISERS, INC. (IAI)
Regional 1/31/94 3.22 31.29 31.31 n/a 16.03
Reserve 4/7/94 0.24 3.67 3.67 n/a 2.75
Balanced 2/3/94 -0.72 14.42 14.43 n/a 7.01
</TABLE>
<TABLE>
<CAPTION>
-----------------------
Cumulative/5/ SEC 7-Day SEC CALENDAR YEAR RETURN/5/
Total Return Effective 7-Day -----------------------
Inception/4/ Since Inception Yield Yield 1992 1993 1994
INVESTMENT OPTIONS Date % % % % % %
------------ --------------- --------- ----- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY
Money Market/1/ 4/1/82 n/a n/a n/a n/a n/a n/a
Growth 10/9/86 213.08 7.67 17.56 -1.52
Equity-Income 10/9/86 174.62 15.12 16.50 5.44
Overseas 1/28/87 86.09 -12.07 35.27 0.20
Asset Manager 9/6/89 80.34 10.02 19.40 -7.52
Contrafund 1/3/95 n/a n/a n/a n/a
SCUDDER
Bond 7/16/85 127.23 5.39 10.68 -6.23
Balanced 7/16/85 170.17 5.34 5.82 -3.53
Janus
Flexible Income/2/ 9/13/93 18.77 n/a n/a -2.40
Balanced 9/13/93 24.04 n/a n/a -0.70
Growth 9/13/93 30.48 n/a n/a 1.21
Aggressive Growth 9/13/93 50.45 n/a n/a 14.56
Worldwide Growth 9/13/93 31.54 n/a n/a -0.01
FEDERATED
High Income Bond II/3/ 3/1/94 12.96 n/a n/a n/a
Utility Fund II/3/ 2/11/94 13.47 n/a n/a n/a
U.S. Gov't. Securities II/3/ 3/28/94 8.54 n/a n/a n/a
INVESTMENT ADVISERS, INC. (IAI)
Regional 1/31/94 32.92 n/a n/a n/a
Reserve 4/7/94 4.82 n/a n/a n/a
Balanced 2/3/94 13.79 n/a n/a n/a
</TABLE>
The performance figures represent past performance and neither guarantee nor
predict future investment results.
1 An investment in Fidelity Money Market is neither insured nor guaranteed by
the U.S. Government and there can be no assurance that Fidelity Money Market
will maintain a stable $1.00 share price.
2, 3 Total returns reflect the investment adviser waived all or part of its fee
or reimbursed the investment options for a portion of its expenses. Otherwise,
total returns would have been lower.
4 Some of the underlying investment options were active before January 2, 1994,
the effective date of the Investor's Select Separate Account. Where applicable,
performance includes hypothetical performance for periods before the investment
option was available in Investor's Select, applying contract charges assessed at
the Separate Account level to approximate the performance the investment option
would have achieved inside the Separate Account.
5 Total returns include change in share price, reinvestment of dividends, and
capital gains. An initial hypothetical investment of $20,000 is assumed since
this is closer to the average purchase payment of a contract expected to be
written than the $1,000 assumed for SEC required returns shown on page 10.
Returns reflect deductions of 1.4% annual asset charges and a $25.00 annual
contract administration charge, but do not include the applicable contingent
deferred sales charge. The impact of the annual contract administration charge
on investment returns will vary depending on the size of the contract.
n/a- Performance data is not available for all or part of the period indicated
(see Inception Date). Investment options with a 9/13/93 inception date or later
will not have meaningful performance to report for the periods indicated.
11
<PAGE>
FINANCIAL STATEMENTS
The financial statements of the Separate Account and for Lincoln Benefit Life
Company appearing in this Statement of Additional Information have been audited
by Deloitte & Touche LLP, independent certified public accountants, as stated in
their reports. Such financial statements have been included herein in reliance
upon the reports of Deloitte & Touche LLP, given upon their authority as experts
in accounting and auditing.
The Company's financial statements should be considered only as bearing upon the
ability of Lincoln Benefit Life Company to meet its obligations under the
Contracts. The amounts of the Variable Annuity payments under a Contract are not
dependent upon the financial condition of Lincoln Benefit Life Company and are
not guaranteed by Lincoln Benefit Life Company.
12
<PAGE>
Independent Auditors' Report
To the Board of Directors and Shareholder
of Lincoln Benefit Life Company
We have audited the accompanying statement of net assets of Lincoln Benefit Life
Variable Annuity Account as of December 31, 1995 and the related statements of
operations and changes in net assets for the years ended December 31, 1995 and
1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Lincoln Benefit Life Variable Annuity
Account as of December 31, 1995 and the results of its operations and changes in
its net assets for the years ended December 31, 1995 and 1994, in conformity
with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Lincoln, Nebraska
February 16, 1996
13
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Net Assets
Investments in the Janus Aspen Series
Flexible Income Portfolio - 153,810 shares (cost $1,613,711) $ 1,708,827
Balanced Portfolio - 187,041 shares (cost $2,196,338) 2,437,143
Growth Portfolio - 497,244 shares (cost $6,060,338) 6,687,937
Aggressive Growth Portfolio - 465,891 shares (cost $6,879,348) 7,957,424
Worldwide Growth Portfolio - 413,164 shares (cost $5,560,524) 6,325,536
Investments in IAI Retirement Funds, Inc.
Regional Portfolio - 317,228 shares (cost $3,787,457) 4,491,955
Reserve Portfolio - 70,614 shares (cost $710,064) 709,675
Balanced Portfolio - 59,073 shares (cost $658,879) 695,881
Investments in Fidelity Variable Insurance Products Fund
Money Market Fund - 11,394,803 shares (cost $11,394,803) 11,394,803
Equity Income Fund - 728,806 shares (cost $12,664,172) 14,044,096
Growth Fund - 457,433 shares (cost $12,103,711) 13,357,031
Overseas Fund - 369,077 shares (cost $6,043,940) 6,292,761
Investments in Fidelity Variable Insurance Products Fund II
Asset Manager - 394,479 shares (cost $5,675,749) 6,228,823
Investments in Federated Investors
Corporate Bond Fund - 242,523 shares (cost $2,329,808) 2,374,298
Utility Fund - 207,852 shares (cost $2,077,438) 2,292,609
Government Bond Fund - 112,051 shares (cost $1,128,113) 1,153,004
Investments in the Scudder Variable Life Investment Fund
Bond Portfolio - 202,770 shares (cost $1,392,365) 1,453,865
Balanced Portfolio - 226,196 shares (cost $2,276,964) 2,476,843
-----------
Net Assets for Variable Annuity Contracts $92,082,511
===========
</TABLE>
See notes to financial statements.
14
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31.
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Investment income
Dividend income $ 1,290,019 $ 116,336
Less:
Annual maintenance fees 13,425 0
Mortality and expense risk charges from
Lincoln Benefit 665,231 81,660
----------- -----------
Net investment income 611,363 34,676
Realized and unrealized gains (losses)
on investments:
Realized gains from sales of investments:
Proceeds from sales 94,388,223 22,238,037
Cost of investments sold 93,843,363 22,208,058
----------- -----------
Net realized gains 544,860 29,979
Net change in unrealized appreciation/
depreciation 7,530,918 (2,124)
Capital gain income 97,285 185
----------- -----------
Net gains on investments 8,173,063 28,040
----------- -----------
Net increase in net assets resulting
from operations $ 8,784,426 $ 62,716
=========== ===========
</TABLE>
See notes to financial statements.
15
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1994
----------- -----------
From operations:
<S> <C> <C>
Additions (deductions):
Net investment income $ 611,363 $ 34,676
Net realized gains 544,860 29,979
Net change in unrealized appreciation/depreciation 7,530,918 (2,124)
Capital gain income 97,285 185
----------- -----------
Net increase in net assets resulting from operations 8,784,426 62,716
From capital transactions:
Additions (deductions):
Contractholder deposits 75,088,057 18,636,128
Benefit payments (457,172) (20,429)
Payments on termination (1,075,507) (44,369)
Loans, net (100,093) 0
Transfers with the Fixed Account, net (6,860,401) (1,930,845)
----------- -----------
Net increase in net assets resulting from capital transactions 66,594,884 16,640,485
----------- -----------
Increase in net assets 75,379,310 16,703,201
Net assets, beginning of year 16,703,201 0
----------- -----------
Net assets, end of year $92,082,511 $16,703,201
=========== ===========
</TABLE>
See notes to financial statements
16
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
1. Organization
Lincoln Benefit Life Variable Annuity Account (the "Account"), a unit
investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, is a separate account of Lincoln
Benefit Life Company ("Lincoln Benefit"), which is wholly owned by Allstate
Life Insurance Company ("Allstate Life"), a wholly-owned subsidiary of
Allstate Insurance Company ("Allstate"), which is wholly owned by The
Allstate Corporation (the "Corporation"). On June 9, 1993 the Corporation
completed its initial public offering of 19.9% of its common stock. Sears,
Roebuck and Co. ("Sears") indirectly owned 80.1% of the Corporation. On
June 30, 1995, Sears distributed its ownership in the Corporation to Sears
common stockholders through a tax-free dividend.
Lincoln Benefit writes certain annuity contracts, the net proceeds of which
are invested at the discretion of the contractholder. Contractholders
primarily invest in units of the portfolios composing the Account. The
Account, in turn, invests in shares of 18 various subaccounts. The
subaccounts underlying the Separate Account currently are: Janus Aspen
Series: Flexible Income Portfolio, Balanced Portfolio, Growth Portfolio,
Aggressive Growth Portfolio, Worldwide Growth Portfolio; IAI Retirement
Funds, Inc.: Regional Portfolio, Reserve Portfolio, Balanced Portfolio;
Fidelity Variable Insurance Products Fund: Money Market Fund, Equity Income
Fund, Growth Fund, Overseas Fund; Fidelity Variable Insurance Products Fund
II: Asset Manager; Federated Investors: Corporate Bond Fund, Utility Fund,
Government Bond Fund; Scudder Variable Life Investment Fund: Bond
Portfolio, Balanced Portfolio (the "Funds"). The contractholder may also
invest in the general account of Lincoln Benefit (the "Fixed Account"),
which was an option added May 1, 1994. The Fixed Account option is not
available in all states.
2. Summary of Significant Accounting Policies
Valuation of investments
Investments consist of shares of the Funds, and are valued at net
asset value as reported by each fund manager.
Recognition of investment and capital gain income
Investment and capital gain income consists of dividends declared by
the Funds, and is recognized on the date of record.
Realized gains and losses
Realized gains and losses on the sale of shares by the Account are
computed on a weighted average cost basis.
Contractholder account activity
Account activity is reflected in individual contractholder accounts on
a daily basis. See also Note 3.
Federal income taxes
Investment income and realized gains and losses on investments of the
Account are reported to contractholders who are responsible for the
related income taxes based on their particular tax status.
Accordingly, no provision for income taxes has been recorded.
3. Charges and Deductions
An annual contract administration charge of $25 is charged against each
contract. This administration charge will be assessed on each contract
anniversary that occurs on or prior to the annuity date. This charge is not
assessed during the annuity period. The contract administration charge is
intended to compensate Lincoln Benefit for expenses incurred in maintaining
the contract.
17
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
3. Charges and Deductions (continued)
An administrative expense charge of .15% per annum of the net asset value
of each subaccount is assessed daily. A risk charge of 1.25% per annum of
the net asset value of each subaccount is assessed daily to compensate
Lincoln Benefit for assumption of certain mortality and expense risks in
connection with the contract. These charges are assessed during the
accumulation period and the annuity period.
Other charges may be assessed related to premium taxes, surrenders, partial
withdrawals and certain transfers between funds and/or the fixed account.
18
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
---------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEAR ENDED DECEMBER 31, 1995 AND 1994
---------------------------------------------
4. UNITS ISSUED AND REDEEMED
Units issued and redeemed by the Account during 1994 and 1995 were as
follows:
<TABLE>
<CAPTION>
Janus Aspen Series
-------------------------------------------------------------
Flexible Aggressive Worldwide
Income Balanced Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Units Outstanding, January 1, 1994 0 0 0 0 0
Unit Activity during 1994:
Issued 9,436 61,645 100,890 86,615 114,243
Redeemed 165 7,427 9,870 8,422 4,945
------- ------- ------- ------- -------
Units Outstanding, December 31, 1994 9,271 54,218 91,020 78,193 109,298
Unit Activity during 1995:
Issued 176,587 166,129 489,401 532,719 493,315
Redeemed 40,685 15,791 51,395 65,318 81,974
------- ------- ------- ------- -------
Units Outstanding, December 31, 1995 145,173 204,556 529,026 545,594 520,639
======= ======= ======= ======= =======
IAI Retirement Funds, Inc.
-----------------------------------
Regional Reserve Balanced
Portfolio Portfolio Portfolio
--------- --------- ---------
Units Outstanding, January 1, 1994 0 0 0
Unit Activity during 1994:
Issued 86,748 84,955 19,694
Redeemed 15,380 33,027 1,521
------- ------- ------
Units Outstanding, December 31, 1994 71,368 51,928 18,173
Unit Activity during 1995:
Issued 268,808 105,799 50,243
Redeemed 14,733 89,884 8,226
------- ------- ------
Units Outstanding, December 31, 1995 325,443 67,843 60,190
======= ======= ======
</TABLE>
19
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
---------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
4. Units Issued and Redeemed (continued)
Units issued and redeemed by the Account during 1994 and 1995 were as
follows:
<TABLE>
<CAPTION>
Fidelity
Variable
Insurance
Products
Fidelity Variable Insurance Products Fund Fund II
--------------------------------------------------- ----------
Money Equity
Market Income Growth Overseas Assets
Fund Fund Fund Fund Manager
-------- -------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Units Outstanding, January 1, 1994 0 0 0 0 0
Unit Activity during 1994:
Issued 2,157.898 199,472 257,428 209,904 280,306
Redeemed 1,908,425 54,182 9,872 43,033 53,370
--------- ------- ------- ------- -------
Units Outstanding, December 31, 1994 249,473 145,290 247,556 166,871 226,936
Unit Activity during 1995:
Issued 8,019,632 1,028,874 1,139,636 748,560 417,914
Redeemed 7,206,061 148,945 358,424 315,442 50,932
--------- --------- --------- ------- -------
Units Outstanding, December 31, 1995 1,063,044 1,025,219 1,028,768 599,989 593,918
========= ========= ========= ======= =======
Scudder Variable Life
Federated Investors Investment Fund
-------------------------------------- -----------------------
Corporate Government
Bond Utility Bond Bond Balanced
Fund Fund Fund Portfolio Portfolio
---------- ----------- ---------- ---------- ----------
Units Outstanding, January 1, 1994 0 0 0 0 0
Unit Activity during 1994:
Issued 28,352 57,395 61,181 4,615 66,277
Redeemed 0 13,188 24,618 0 10,795
------ ------ ------ ----- ------
Units Outstanding, December 31, 1994 28,352 44,207 36,563 4,615 55,482
Unit Activity during 1995:
Issued 349,104 197,389 116,423 171,399 171,751
Redeemed 166,996 44,583 46,549 41,487 18,146
------- ------- ------- ------- -------
Units Outstanding, December 31, 1995 210,460 197,013 106,437 134,527 209,087
======= ======= ======= ======= =======
</TABLE>
20
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. CHANGES IN NET ASSETS BY FUND
Changes in Net Assets by Fund for the year ended December 31, 1995:
<TABLE>
<CAPTION>
Janus Aspen Series
--------------------------------------------------------------------------
Flexible Aggressive Worldwide
Income Balanced Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions)
Net investment income (loss) $ 58,010 $ 11,464 $ 88,342 $ 27,586 $ (21,738)
Net realized gains (losses) 17,442 5,559 29,531 27,474 58,545
Net change in unrealized
appreciation/depreciation 98,532 249,859 628,340 1,021,257 766,016
Capital gains income 0 0 0 201 406
----------- ----------- ----------- ----------- -----------
173,984 266,882 746,213 1,076,518 803,229
----------- ----------- ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Contractholder deposits 68,352 94,813 580,302 655,040 602,811
Benefit payments (55,439) (87,065) (39,599) 0 (26,948)
Payments on termination (95,754) (26,133) (48,599) (36,590) (61,100)
Loans, net 0 0 0 (4,648) (2,525)
Transfers among the portfolios
and with the Fixed Account, net 1,528,334 1,663,708 4,553,222 5,359,961 3,952,832
----------- ----------- ----------- ----------- -----------
1,445,493 1,645,323 5,045,326 5,973,763 4,465,070
----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets 1,619,477 1,912,205 5,791,539 7,050,281 5,268,299
Net assets, beginning of year 89,350 524,938 896,398 907,143 1,057,237
----------- ----------- ----------- ----------- -----------
Net assets, end of year $1,708,827 $2,437,143 $6,687,937 $7,957,424 $6,325,536
=========== =========== =========== =========== ===========
NET ASSET VALUE PER UNIT, END OF YEAR $11.77 $11.91 $12.64 $14.58 $12.15
=========== =========== =========== =========== ===========
</TABLE>
21
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. CHANGES IN NET ASSETS BY FUND (CONTINUED)
Changes in Net Assets by Fund for the year ended December 31, 1995:
<TABLE>
<CAPTION>
Scudder Variable Life
IAI Retirement Funds, Inc. Investment Fund
-------------------------------- ----------------------
Regional Reserve Balanced Bond Balanced
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions)
Net investment income
(losses) ($28,291) $ 22,393 ($2,412) $ 28,376 $ 14,813
Net realized gains (losses) 12,022 1,070 4,156 8,864 13,666
Net change in unrealized
appreciation/depreciation 686,710 880 35,778 62,124 205,196
Capital gains income 0 0 0 0 4,061
---------- -------- -------- ---------- ----------
670,441 24,343 37,522 99,364 237,736
---------- -------- -------- ---------- ----------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Contractholder deposits 241,126 32,084 38,786 146,754 104,594
Benefit payments (29,728) 0 0 0 0
Payments on termination (22,427) (649) (20,154) (13,307) (17,955)
Loans, net (81) 0 0 (1,604) 0
Transfers among the
portfolios and with the
Fixed Account, net 2,884,428 129,737 456,385 1,179,854 1,626,307
---------- -------- -------- ---------- ----------
3,073,318 161,172 475,017 1,311,697 1,712,946
---------- -------- -------- ---------- ----------
Increase (decrease) in net
assets 3,743,759 185,515 512,539 1,411,061 1,950,682
Net assets, beginning of
year 748,196 524,160 183,342 42,804 526,161
---------- -------- -------- ---------- ----------
Net assets, end of year $4,491,955 $709,675 $695,881 $1,453,865 $2,476,843
========== ======== ======== ========== ==========
NET ASSET VALUE PER UNIT,
END OF YEAR $13.80 $10.46 $11.56 $10.81 $11.85
========== ======== ======== ========== ==========
</TABLE>
22
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. CHANGES IN NET ASSETS BY FUND (CONTINUED)
Changes in Net Assets by Fund for the year ended December 31, 1995:
<TABLE>
<CAPTION>
Fidelity
Variable
Insurance
Products
Fund II Federated Investors
------------- -----------------------------------------------------
Corporate Government
Asset Bond Utility Bond
Manager Fund Fund Fund
------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions)
Net investment income (loss) ($9,193) $ 85,693 $ 36,179 $ 29,451
Net realized gains (losses) 5,367 29,105 (957) 4,238
Net change in unrealized
appreciation/depreciation 605,812 56,658 220,461 27,493
Capital gains income 0 0 0 0
------------- ----------- ---------- -------------
601,986 171,456 255,683 61,182
------------- ----------- ---------- -------------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Contractholder deposits 505,012 68,319 145,544 63,395
Benefit payments (14,722) (13,994) 0 (33,634)
Payments on termination (91,248) (29,069) (21,892) (47,476)
Loans, net 40 0 (1,644) 0
Transfers among the portfolios
and with the Fixed Account, net 3,164,153 1,908,151 1,495,063 740,263
------------- ----------- ---------- -------------
3,563,235 1,933,407 1,617,071 722,548
------------- ----------- ---------- -------------
Increase (decrease) in net assets 4,165,221 2,104,863 1,872,754 783,730
Net assets, beginning of year 2,063,602 269,435 419,855 369,274
------------- ----------- ---------- -------------
Net assets, end of year $6,228,823 $2,374,298 $2,292,609 $1,153,004
============= =========== ========== =============
NET ASSET VALUE PER UNIT, END OF YEAR $10.49 $11.28 $11.64 $10.83
============= =========== ========== =============
</TABLE>
23
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. Changes in Net Assets by Fund (continued)
Changes in Net Assets by Fund for the year ended December 31, 1995:
<TABLE>
<CAPTION>
Fidelity Variable Insurance Products Fund
-----------------------------------------------------
GRAND
Money Equity TOTAL
Market Income Growth Overseas ALL
Fund Fund Fund Fund FUNDS
------------ ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
From operations:
Additions (deductions)
Net investment income (loss) $324,936 $73,487 ($83,534) ($44,199) 611,363
Net realized gains (losses) 0 90,879 170,122 67,777 544,860
Net change in unrealized
appreciation/depreciation 0 1,398,946 1,171,300 295,556 7,530,918
Capital gains income 0 86,002 0 6,615 97,285
------------ ----------- ----------- ---------- -----------
324,936 1,649,314 1,257,888 325,749 8,784,426
------------ ----------- ----------- ---------- -----------
From capital transactions:
Additions (deductions):
Contractholder deposits 69,207,777 1,059,078 876,036 598,234 75,088,057
Benefit payments 0 (26,125) (114,622) (15,296) (457,172)
Payments on termination (236,005) (138,238) (113,869) (55,042) (1,075,507)
Loans, net (71,951) 0 (5,747) (11,933) (100,093)
Transfers among the portfolios
and with the Fixed Account, net (60,391,287) 10,006,090 9,049,533 3,832,865 (6,860,401)
------------ ----------- ----------- ---------- -----------
8,508,534 10,900,805 9,691,331 4,348,828 66,594,884
------------ ----------- ----------- ---------- -----------
Increase (decrease) in net assets 8,833,470 12,550,119 10,949,219 4,674,577 75,379,310
Net assets, beginning of year 2,561,333 1,493,977 2,407,812 1,618,184 16,703,201
------------ ----------- ----------- ---------- -----------
Net assets, end of year $11,394,803 $14,044,096 $13,357,031 $6,292,761 $92,082,511
============ =========== =========== ========== ===========
Net asset value per unit,
end of year $10.72 $13.70 $12.98 $10.49
============ =========== =========== ==========
</TABLE>
24
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. Changes in Net Assets by Fund (continued)
Changes in Net Assets by Fund for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Janus Aspen Series
-------------------------------------------------------------------------------
Flexible Aggressive Worldwide
Income Balanced Growth Growth Growth
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
From operations:
Additions (deductions)
Net investment income (loss) $2,377 $1,904 ($1,422) $3,289 ($4,637)
Net realized gains (losses) (12) (441) (456) 303 (614)
Net change in unrealized
appreciation/depreciation (3,416) (9,054) (741) 56,819 (1,004)
Capital gains income 0 0 0 0 0
---------- ----------- ----------- ----------- ----------
(1,051) (7,591) (2,619) 60,411 (6,255)
---------- ----------- ----------- ----------- ----------
From capital transactions:
Additions (deductions):
Contractholder deposits 636 42,767 85,577 48,437 59,634
Benefit payments 0 0 0 0 0
Payments on termination 0 0 0 0 (225)
Loans, net 0 0 0 0 0
Transfers among the portfoios
and with the Fixed Account, net 89,765 489,762 813,440 798,295 1,004,083
---------- ----------- ----------- ----------- ----------
90,401 532,529 899,017 846,732 1,063,492
---------- ----------- ----------- ----------- ----------
Increase (decrease) in net assets 89,350 524,938 896,398 907,143 1,057,237
Net assets, beginning of year 0 0 0 0 0
---------- ----------- ----------- ----------- ----------
Net assets, end of year $89,350 $524,938 $896,398 $907,143 $1,057,237
========== =========== =========== =========== ==========
Net asset value per unit,
end of year $9.64 $9.68 $9.85 $11.60 $9.67
========== =========== =========== =========== ==========
</TABLE>
25
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. CHANGES IN NET ASSETS BY FUND (CONTINUED)
Changes in Net Assets by Fund for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Scudder Variable Life
IAI Retirement Funds, Inc. Investment Fund
----------------------------------- -------------------------
Regional Reserve Balanced Bond Balanced
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions)
Net investment income (loss) ($3,356) $3,361 ($1,122) $472 $2,845
Net realized gains (losses) (569) 787 187 0 1,435
Net change in unrealized
appreciation/depreciation 17,788 (1,269) 1,224 (624) (5,317)
Capital gains income 0 0 0 0 0
--------- --------- --------- --------- ---------
13,863 2,879 289 (152) (1,037)
--------- --------- --------- --------- ---------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Contractholder deposits 104,653 27,105 31,019 677 100,364
Benefit payments (3,405) 0 0 0 0
Payments on termination (606) 0 (228) 0 0
Loans, net 0 0 0 0 0
Transfers among the portfolios
and with the Fixed Account, net 633,691 494,176 152,262 42,279 426,834
--------- --------- --------- --------- ---------
734,333 521,281 183,053 42,956 527,198
--------- --------- --------- --------- ---------
Increase (decrease) in net assets 748,196 524,160 183,342 42,804 526,161
Net assets, beginning of year 0 0 0 0 0
--------- --------- --------- --------- ---------
Net assets, end of year $748,196 $524,160 $183,342 $42,804 $526,161
========= ========= ========= ========= =========
NET ASSET VALUE PER UNIT, END OF YEAR $10.48 $10.09 $10.09 $9.27 $9.48
========= ========= ========= ========= =========
</TABLE>
26
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
---------------------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
----------------------------------------------
5. CHANGES IN NET ASSETS BY FUND (CONTINUED)
Changes in Net Assets by Fund for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Fidelity
Variable
Insurance
Products
Fund II Federated Investors
--------- -------------------------------------------------
Corporate Government
Asset Bond Utility Bond
Manager Fund Fund Fund
------- --------- ------- ----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions)
Net investment income (loss) ($10,050) $8,681 $4,846 $4,494
Net realized gains (losses) 1,313 0 (1,916) 1,370
Net change in unrealized
appreciation / depreciation (52,738) (12,166) (5,289) (2,600)
Capital gains income 185 0 0 0
---------- -------- -------- --------
(61,290) (3,485) (2,359) 3,264
---------- -------- -------- --------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Contractholder deposits 175,869 19,499 48,892 19,895
Benefit payments (6,686) 0 0 0
Payments on termination (794) 0 (249) (20,932)
Loans, net 0 0 0 0
Transfers among the portfolios
and with the Fixed Account, net 1,956,503 253,421 373,571 367,047
---------- -------- -------- --------
2,124,892 272,920 422,214 366,010
---------- -------- -------- --------
Increase (decrease) in net assets 2,063,602 269,435 419,855 369,274
Net assets, beginning of year 0 0 0 0
---------- -------- -------- --------
Net assets, end of year $2,063,602 $269,435 $419,855 $369,274
========== ======== ======== ========
NET ASSET VALUE PER UNIT,
END OF YEAR $9.09 $9.50 $9.50 $10.10
========== ======== ======== ========
</TABLE>
27
<PAGE>
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
5. Changes in Net Assets by Fund (continued)
Changes in net assets by Fund for the year ended December 31, 1994:
<TABLE>
<CAPTION>
Fidelity Variable Insurance Products Fund
---------------------------------------------------------
GRAND
Money Equity TOTAL
Market Income Growth Overseas ALL
Fund Fund Fund Funds FUNDS
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
From operations:
Additions (deletions)
Net investment income (loss) $32,984 $7,585 ($9,862) ($7,713) $34,676
Net realized gains (losses) 0 18,908 (19) 9,703 29,979
Net changes in unrealized
appreciation/depreciation 0 (19,022) 82,020 (46,735) (2,124)
Capital gains income 0 0 0 0 185
------------ ------------ ------------ ------------ ------------
32,984 7,471 72,139 (44,745) 62,716
------------ ------------ ------------ ------------ ------------
From capital transactions:
Additions (deductions):
Contractholder deposits 17,534,729 102,141 84,815 149,419 18,636,128
Benefit payments (6,864) 0 0 (3,474) (20,429)
Payments on termination (4,968) ( 4,668) (10,058) (1,641) (44,369)
Loans, net 0 0 0 0 0
Transfers among the portfolios
and with the Fixed Account, net (14,994,548) 1,389,033 2,260,916 1,518,625 (1,930,845)
------------ ------------ ------------ ------------ ------------
2,528,349 1,486,506 2,335,673 1,662,929 16,640,485
------------ ------------ ------------ ------------ ------------
Increase (decrease) in net assets 2,561,333 1,493,977 2,407,812 1,618,184 16,703,201
Net assets, beginning of year 0 0 0 0 0
------------ ------------ ------------ ------------ ------------
Net assets, end of year $2,561,333 $1,493,977 $2,407,812 $1,618,184 $16,703,201
============ ============ ============ ============ ============
Net asset value per unit,
end of year $10.27 $10.28 $9.73 $9.70
============ ============ ============ ============
</TABLE>
28
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Lincoln Benefit Life Company
We have audited the accompanying statutory basis statements of financial
position of Lincoln Benefit Life Company (a wholly-owned subsidiary of Allstate
Life Insurance Company) as of December 31, 1995 and 1994, and the related
statutory basis statements of operations, capital and surplus, and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described in Note 1 to the financial statements, these financial statements
were prepared in conformity with accounting practices and procedures of the
National Association of Insurance Commissioners as prescribed or permitted by
the Insurance Department of the State of Nebraska. The effects on the
accompanying financial statements of the differences between such practices and
generally accepted accounting principles have not been determined.
In our opinion, because of the effects of the differences between generally
accepted accounting principles and the accounting practices referred to in the
preceding paragraph, the accompanying financial statements do not present
fairly, in all material respects, the financial position of Lincoln Benefit Life
Company at December 31, 1995 and 1994, or the results of its operations or its
cash flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
However, in our opinion, the accompanying financial statements present fairly,
in all material respects, the financial position of Lincoln Benefit Life Company
at December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with accounting practices and procedures of the National Association
of Insurance Commissioners as prescribed or permitted by the Insurance
Department of the State of Nebraska.
/s/ Deloitte & Touche
Deloitte & Touche LLP
Lincoln, Nebraska
April 1, 1996
29
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
STATEMENTS OF FINANCIAL POSITION (STATUTORY BASIS)
--------------------------------------------------
<TABLE>
<CAPTION>
December 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash and invested assets:
Bonds (fair value $133,357,886
and $105,777,297) $125,737,788 $110,265,025
Common stock - affiliate (cost $50,000) 268,202 93,835
Home office real estate 2,753,358 2,450,862
Policy loans 588,429 612,175
Cash 1,985,766 2,037,347
Short-term investments 4,435,600 1,500,000
------------ ------------
Cash and invested assets 135,769,143 116,959,244
Investment income due and accrued 1,546,493 1,464,338
Receivable from parent and affiliates 21,907,709 28,324,758
Other assets 12,128,257 6,239,323
Assets related to Separate Accounts 110,615,711 21,357,210
------------ ------------
TOTAL ASSETS $281,967,313 $174,344,873
============ ============
LIABILITIES
Policy benefit and other insurance reserves $ 8,385,486 $ 8,575,745
Interest maintenance reserve 630,324 500,145
Federal income taxes due or accrued 3,448,199 784,606
Other liabilities and accrued expenses 19,383,654 13,750,374
Asset valuation reserve 699,130 555,373
Reserve for checks issued and outstanding 7,395,150 20,907,772
Liabilities related to Separate Accounts 110,615,711 21,357,210
------------ ------------
TOTAL LIABILITIES 150,557,654 66,431,225
------------ ------------
CAPITAL AND SURPLUS
Capital paid up 2,500,000 2,500,000
Gross paid in and contributed capital 111,057,557 91,057,557
Unassigned surplus 17,852,102 14,356,091
------------ ------------
TOTAL CAPITAL AND SURPLUS 131,409,659 107,913,648
------------ ------------
TOTAL LIABILITIES, CAPITAL AND SURPLUS $281,967,313 $174,344,873
============ ============
</TABLE>
See notes to financial statements (statutory basis).
30
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
STATEMENTS OF OPERATIONS (STATUTORY BASIS)
------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES
Commissions and expense allowances
on reinsurance ceded $180,390,220 $123,668,461 $123,033,111
Net investment income, including
amortization of interest maintenance
reserve of $37,721, $28,821
and $17,396 8,165,772 5,039,360 2,293,854
Consideration-dividend accumulations 69,880 65,394 63,101
------------ ------------ ------------
188,625,872 128,773,215 125,390,066
POLICY BENEFITS AND EXPENSES
Commissions 124,858,645 87,467,102 91,648,378
General insurance expenses 36,041,089 28,850,783 23,940,110
Insurance taxes, licenses and fees 8,033,880 7,558,162 7,923,108
Provision for policy benefits 367,087 532,244 619,588
------------ ------------ ------------
169,300,701 124,408,291 124,131,184
------------ ------------ ------------
NET GAIN FROM OPERATIONS BEFORE
DIVIDENDS TO POLICYHOLDERS AND
FEDERAL INCOME TAXES 19,325,171 4,364,924 1,258,882
Dividends to policyholders 95,758 91,562 93,676
------------ ------------ ------------
NET GAIN FROM OPERATIONS AFTER DIVIDENDS
TO POLICYHOLDERS AND BEFORE FEDERAL
INCOME TAXES 19,229,413 4,273,362 1,165,206
Federal income taxes 14,100,603 2,962,355 382,332
------------ ------------ ------------
NET INCOME $ 5,128,810 $ 1,311,007 $ 782,874
============ ============ ============
</TABLE>
See notes to financial statements (statutory basis).
31
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
STATEMENTS OF CAPITAL AND SURPLUS (STATUTORY BASIS)
---------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1994 1993
------------ ------------ -----------
<S> <C> <C> <C>
CAPITAL AND SURPLUS, BEGINNING OF YEAR $107,913,648 $ 78,052,113 $40,681,896
Net income 5,128,810 1,311,007 782,874
Change in net unrealized capital gains
or losses 174,367 58,372 (14,537)
(Increase) in non-admitted
assets and related items (1,663,409) (1,417,865) (3,401,257)
Decrease (increase) in asset valuation
reserve (143,757) (89,979) 3,137
Capital contribution from Parent 20,000,000 30,000,000 40,000,000
------------ ------------ -----------
CAPITAL AND SURPLUS, END OF YEAR $131,409,659 $107,913,648 $78,052,113
============ ============ ===========
</TABLE>
See notes to financial statements (statutory basis).
32
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
STATEMENTS OF CASH FLOWS (STATUTORY BASIS)
------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Commissions and expense allowances
on reinsurance ceded $176,366,842 $123,621,722 $123,033,111
Investment income received 8,115,434 4,776,981 2,521,581
Consideration-dividend accumulations 69,880 65,394 63,101
------------ ------------ ------------
TOTAL CASH RECEIVED FROM OPERATIONS 184,552,156 128,464,097 125,617,793
Commissions, other expenses and taxes
paid (excluding federal income taxes) 167,704,254 127,418,874 119,458,714
Life and accident and health claims,
surrender benefits and other
benefits paid 529,569 (280,988) 1,686,121
Dividends to policyholders 97,301 96,258 101,836
Federal income taxes paid 11,527,418 2,529,766 1,040,705
Net decrease in policy loans (23,746) (100,406) (36,890)
------------ ------------ ------------
TOTAL CASH PAID FROM OPERATIONS 179,834,796 129,663,504 122,250,486
------------ ------------ ------------
NET CASH FROM OPERATIONS 4,717,360 (1,199,407) 3,367,307
Proceeds from investments sold, matured,
or repaid 19,401,945 8,776,030 26,270,071
Capital contributions 20,000,000 30,000,000 40,000,000
Other cash provided 13,269,730 7,483,710 33,768,776
------------ ------------ ------------
TOTAL CASH PROVIDED 57,389,035 45,060,333 103,406,154
------------ ------------ ------------
Cost of long-term investments acquired 35,015,487 58,104,741 50,152,734
Other cash applied, primarily advances
to Parent 19,489,529 2,321,841 36,407,378
------------ ------------ ------------
TOTAL CASH APPLIED 54,505,016 60,426,582 86,560,112
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS 2,884,019 (15,366,249) 16,846,042
Cash and short-term investments
at beginning of year 3,537,347 18,903,596 2,057,554
------------ ------------ ------------
Cash and short-term investments
at end of year $6,421,366 $3,537,347 $18,903,596
============ ============ ============
</TABLE>
See notes to financial statements (statutory basis).
33
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
1. ORGANIZATION AND NATURE OF OPERATIONS
Lincoln Benefit Life Company (the "Company") is a wholly-owned subsidiary
of Allstate Life Insurance Company ("Allstate Life" or "Parent"), which is
wholly-owned by Allstate Insurance Company ("Allstate"), a wholly-owned
subsidiary of The Allstate Corporation (the "Corporation"). On June 30,
1995, Sears, Roebuck and Co. ("Sears") distributed its 80.3% ownership in
the Corporation to Sears common shareholders through a tax-free dividend
(the "Distribution").
The Company markets insurance products which include universal life, term
insurance, flexible and single premium deferred annuities and immediate
annuities in all states except New York, plus the District of Columbia,
Guam, and the Virgin Islands. In addition, the Company began marketing
variable life and variable annuity products in 1994. The Company also
markets credit insurance, primarily through financial institutions,
offering life and disability products.
The Company's marketing strategy is to sell primarily through independent
agents and brokers specializing in life insurance and annuities. It has
also entered into agreements whereby its insurance products can be sold
by other companies. A field force of approximately 70,000 independent
agents and brokers represents the Company.
Annuity contracts issued by the Company are subject to discretionary
withdrawal or surrender by the contractholder, subject to applicable
surrender charges. These contracts are reinsured with Allstate Life (Note
3) which selects assets to meet the anticipated cash flow requirements of
the assumed liabilities. Allstate Life utilizes various modeling techniques
in managing the relationship between assets and liabilities and employs
strategies to maintain investments which are sufficiently liquid to meet
obligations to contractholders in various interest rate scenarios.
The Company monitors economic and regulatory developments which have the
potential to impact its business. Currently there is proposed federal
legislation which would permit banks greater participation in securities
businesses, which could eventually present an increased level of
competition for sales of the Company's annuity contracts. Furthermore, the
federal government may enact changes which could possibly eliminate the
tax-advantaged nature of annuities or eliminate consumers' need for tax
deferral, thereby reducing the incentive for customers to purchase the
Company's products. While it is not possible to predict the outcome of such
issues with certainty, management evaluates the likelihood of various
outcomes and develops strategies, as appropriate, to respond to such
challenges.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
STATUTORY BASIS OF PRESENTATION
The Company prepares its statutory financial statements in accordance
with accounting principles and practices prescribed or permitted by the
insurance department of the State of Nebraska. Prescribed statutory
accounting practices include a variety of publications of the National
Association of Insurance Commissioners, as well as state laws, regulations
and general administrative rules. Permitted statutory accounting practices
encompass all accounting practices not so prescribed. The Company does not
follow any permitted statutory accounting practices that have a material
effect on statutory surplus or risk-based capital.
Accounting practices and procedures of the NAIC as prescribed or
permitted by the Insurance Department of the State of Nebraska is a
comprehensive basis of accounting other than generally accepted accounting
principles. The more significant differences are as follows:
a. On a statutory basis, certain costs of acquiring new business,
principally agents' compensation and certain underwriting costs are
expensed as incurred rather than deferred and amortized to income.
b. Statutory policy reserves are based on mortality and interest
assumptions prescribed or permitted by statutes, without consideration
of withdrawals, which may differ from policy reserves based on the
Company's estimates of mortality, interest and withdrawals. The effect,
if any, on reserves due to change in valuation basis is recorded
directly to unassigned surplus rather than included in the determination
of net gain from operations.
34
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATUTORY BASIS OF PRESENTATION (CONTINUED)
c. The asset valuation reserve (AVR) is determined by formula and based on
holdings of mortgages, real estate, bonds, and stocks. This valuation
reserve requires appropriation of surplus to provide for possible losses
on these investments. Realized and unrealized gains and losses, other
than those resulting from interest rate changes, are added or charged to
the asset valuation reserve. Changes in AVR are recorded directly to
unassigned surplus. The interest maintenance reserve (IMR) is used to
accumulate realized gains and losses, net of tax, resulting from
interest rate changes on fixed income investments. These gains and
losses are then amortized into investment income over what would have
been the remaining years to maturity of the underlying investment. These
reserves are not provided under GAAP.
d. Certain assets, designated as "non-admitted assets," principally
leasehold improvements, furniture and equipment and receivables from
agents, are charged directly to unassigned surplus in the statutory
accounts.
e. Taxes are provided for amounts currently due or recoverable. Deferred
income taxes resulting from temporary differences between the statutory
basis financial statement and tax bases of assets and liabilities are
not provided in the statutory accounts.
f. Certain postretirement benefits are accrued over the period employees
become eligible for such benefits.
g. Reinsurance recoverables on unpaid losses are reported as a reduction of
policy benefit and other insurance reserves rather than reported as an
asset.
INVESTMENTS
Investments are primarily carried at values prescribed by the NAIC.
Bonds are carried at values based on categories established by the NAIC
that are primarily influenced by credit ratings. Bond values are recorded
either at amortized cost or, for those issuers with lower credit ratings
(non-amortized bonds), at the lower of amortized cost or NAIC market value.
Short-term investments are carried at amortized cost which approximates
fair value. A common stock investment in an unconsolidated subsidiary is
carried at the subsidiary's book value. Investments in real estate are
carried at the lower of fair value or depreciated cost. Policy loans are
carried at the unpaid principal balances.
For those investments carried at NAIC market value, the difference
between cost or amortized cost and NAIC market value is reflected in
unassigned surplus as unrealized capital gains or losses.
Investment income consists primarily of interest, which is recognized on
an accrual basis. Accrual of income is suspended for bonds that are in
default or when the receipt of interest payments is in doubt. Interest
income on mortgage-backed securities is determined on the effective yield
method based on the estimated repayment of principal. Realized capital
gains and losses are determined on a specific identification basis.
PREMIUM REVENUES AND BENEFITS
Premiums for traditional life insurance are recognized as revenue when
due. Group life and accident and disability premiums are earned on a pro
rata basis over the policy period. Premiums for all single and flexible
premium life and annuity products are recognized as revenue when collected.
As described in Note 3, all premium paying business is ceded and revenues
recognized represent allowances for commissions and expenses received on
ceded business.
Policy benefit reserves for life policies are computed actuarially under
the Commissioners' Reserve Valuation Method on the basis of interest rate
and mortality assumptions prescribed by state regulatory authorities.
Benefit reserves for annuity products are calculated according to the
Commissioners' Annuity Reserve Valuation Method with appropriate statutory
interest and mortality assumptions. Interest rates used in establishing
reserves range from 2.50% to 6.00% for life insurance reserves and from
4.00% to 8.75% for annuity reserves.
35
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PREMIUM REVENUES AND BENEFITS (CONTINUED)
Policy benefit reserves for group life and accident and health insurance
include claim reserves and unearned premiums. Claim reserves, including
incurred but not reported claims, represent management's estimate of the
ultimate liability associated with unpaid policy claims, based primarily
upon analysis of past experience.
SEPARATE ACCOUNTS
The Company issues flexible premium deferred variable annuity contracts
and flexible premium variable life contracts, the assets and liabilities of
which are legally segregated and reflected in the accompanying statements of
financial position as assets and liabilities of the Separate Accounts.
Assets and liabilities of the Separate Accounts represent funds of Lincoln
Benefit Life Variable Annuity Account and Lincoln Benefit Life Variable Life
Account ("Separate Accounts"), unit investment trusts registered with the
Securities and Exchange Commission. The assets of the Separate Accounts are
carried at fair value. The Separate Account liability represents the account
balance of the variable insurance products. The variable annuity contract
reserves, included in the Separate Accounts, are valued using the
Commissioner's Annuity Reserve Valuation Method. Investment income and gains
and losses of the Separate Accounts accrue directly to the contractholders
and are, therefore, not included in the accompanying Statements of
Operations. Revenues to the Company from the Separate Accounts consist of
contract maintenance fees, administrative fees and mortality and expense
risk charges, which are entirely ceded to Allstate Life.
DIVIDENDS PAYABLE TO POLICYOWNERS
Dividends payable to policyowners are determined annually by the Board
of Directors. The liability includes amounts which will be paid in the
following year for policies that remain in force, and are estimated based on
approved dividend scales. Approximately 80% of paid-up policies are
participating policies.
USE OF ESTIMATES
The preparation of financial statements requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
RECLASSIFICATIONS
Certain reclassifications have been made to the prior year financial
statements to conform to the presentation for the current year.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
On December 31, 1986 the Company effected an automatic coinsurance
agreement whereby the Company cedes all premium-paying life policies up to
the Company's retention limit of face value, all credit insurance policies
and all annuity policies to Allstate Life. On January 1, 1994, the Company
effected an automatic modified coinsurance agreement whereby the Company
cedes all variable life policies up to the Company's retention limit of face
value and all variable annuity policies to Allstate Life. The face value of
life policies in excess of the retention limit is ceded by the Company to
other third party reinsurers. The Company retains all paid-up life policies
and accepts through retrocession all life policies as they become paid-up.
Following is a summary of the reinsurance transactions (in millions):
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------
1995 1994 1993
------ ---- ------
<S> <C> <C> <C>
Premium income ceded $1,279 $870 $1,046
Policy benefits ceded 567 395 288
Operating expenses ceded 180 124 123
Increase in reserves ceded 896 667 927
</TABLE>
36
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
3. RELATED PARTY TRANSACTIONS (CONTINUED)
REINSURANCE (CONTINUED)
The receivable from parent, subsidiaries and affiliates is the result of
our 100% reinsurance with Allstate Life. This item relates to outstanding
checks and other liabilities, where the expense has been recorded and ceded
to Allstate Life, but cash settlement had not occurred as of year end.
Liabilities for policy benefits and other insurance reserves ceded were
approximately $5,720 million and $4,830 million as of December 31, 1995 and
1994, respectively. Liabilities for policy benefits and other insurance
reserves ceded to third parties were approximately $11 million and $10
million as of December 31, 1995 and 1994, respectively.
The Company has not retained any economic interest in the underlying
profit or loss of the policies ceded, however it remains liable for the
payment of any benefits or expenses relating to these policies, including in
the event that Allstate Life or other reinsurers are unable to meet the
obligations of the reinsurance contracts.
BUSINESS OPERATIONS
The Company utilizes services operated by Allstate in conducting its
business activities. The Company reimburses Allstate for the operating
expenses incurred by Allstate. The cost to the Company is determined by
various allocation methods and is primarily related to the level of services
provided. Operating expenses, including compensation and retirement and
other benefit programs, allocated to the Company were $3.7 million, $2.6
million and $2.8 million in 1995, 1994 and 1993, respectively. All other
costs are assumed by Allstate Life under reinsurance agreements.
4. FEDERAL INCOME TAXES
A consolidated federal income tax return will be filed by the Parent and
its life insurance subsidiaries, including the Company. Tax liabilities and
benefits realized by the consolidated group are allocated as generated by
the respective subsidiaries, whether or not such benefits generated by the
subsidiaries would be available on a separate return basis. The Corporation
and its domestic subsidiaries, including the Company, (the "Allstate
Group"), will be eligible to file a consolidated tax return beginning in the
year 2000.
Prior to the Distribution, the Allstate Group joined with Sears and its
domestic business units (the "Sears Group") in the filing of a consolidated
federal income tax return (the "Sears Tax Group") and were parties to a
federal income tax allocation agreement (the "Tax Sharing Agreement"). As a
member of the Sears Tax Group, the Corporation was jointly and severally
liable for the consolidated income tax liability of the Sears Tax Group.
Under the Tax Sharing Agreement, the Company, through the Corporation, paid
to or received from the Sears Group the amount, if any, by which the Sears
Tax Group's federal income tax liability was affected by virtue of inclusion
of the Allstate Group in the consolidated federal income tax return.
Effectively, this resulted in the Company's annual income tax provision
being computed as if the Company filed a separate return, except that items
such as net operating losses, capital losses, or similar items, which might
not be immediately recognizable in a separate return, were allocated
according to the Tax Sharing Agreement and reflected in the Company's
provision to the extent that such items reduced the Sears Tax Group's
federal tax liability.
The Allstate Group and Sears Group have entered into an agreement which
governs their respective rights and obligations with respect to federal
income taxes for all periods prior to the Distribution ("Consolidated Tax
Years"). The agreement provides that all Consolidated Tax Years will
continue to be governed by the Tax Sharing Agreement with respect to the
Company's federal income tax liability and taxes payable to or recoverable
from the Sears Group.
37
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
4. FEDERAL INCOME TAXES (CONTINUED)
A reconciliation of the statutory federal income tax rate to the
effective federal income tax rate is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
Non-accrual of discount on investments 0.1 0.8 12.2
Policy acquisition costs 36.3 9.0 0.4
Reestimation of liability for prior year
taxes and interest 0.6 21.8 14.4
Guaranty fund assessments -- -- (31.1)
Other 1.0 1.6 2.8
---- ---- -----
Effective federal income tax rate 73.0% 68.2% 33.7%
==== ==== =====
</TABLE>
The Company paid income taxes of $11,527,418, $2,529,766 and $1,040,705
in 1995, 1994 and 1993, respectively, to Allstate Life under the Tax Sharing
Agreement. The Company had income taxes payable to Allstate Life of
$3,448,199 and $784,606 at December 31, 1995 and 1994, respectively.
5. POLICY BENEFIT AND OTHER INSURANCE RESERVES
Policy benefit and other insurance reserves include the following:
<TABLE>
<CAPTION>
December 31,
----------------------
1995 1994
<S> <C> <C>
Aggregate reserve for paid-up ordinary
life polices $7,466,555 $7,665,455
Policy and contract claims - life 17,940 28,521
Policyholder dividend accumulations 814,946 794,181
Dividends apportioned for payment 86,045 87,588
---------- ----------
$8,385,486 $8,575,745
========== ==========
</TABLE>
6. INVESTMENTS
FAIR VALUE
The carrying value, gross unrealized gains/losses, and fair values of
bonds at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
Gross Unrealized
Carrying -------------------- Fair
December 31, 1995 Value Gains Losses Value
----------------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
government agencies $ 18,237,275 $1,885,750 $ -- $ 20,123,025
Canadian government and
agencies 3,056,022 353,978 -- 3,410,000
Corporate bonds 38,865,533 1,841,408 111,407 40,595,534
Mortgage-backed securities 65,578,958 3,706,360 55,991 69,229,327
------------ ---------- -------- ------------
Totals $125,737,788 $7,787,496 $167,398 $133,357,886
============ ========== ======== ============
</TABLE>
38
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
6. INVESTMENTS (CONTINUED)
FAIR VALUE (CONTINUED)
<TABLE>
<CAPTION>
Gross Unrealized
Carrying --------------------- Fair
December 31, 1994 Value Gains Losses Value
- ----------------- ------------ -------- ---------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
government agencies $ 26,045,845 $ 66,318 $1,110,429 $ 25,001,734
Canadian government and
agencies 3,063,103 -- 11,509 3,051,594
Corporate bonds 15,081,801 255,581 317,846 15,019,536
Mortgage-backed securities 66,074,276 129,319 3,499,162 62,704,433
------------ -------- ---------- ------------
Totals $110,265,025 $451,218 $4,938,946 $105,777,297
============ ======== ========== ============
</TABLE>
SCHEDULED MATURITIES
The scheduled maturities for bonds at December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Carrying Fair
Value Value
------------ ------------
<S> <C> <C>
Due in one year or less $ 1,225,182 $ 1,243,539
Due after one year through
five years 10,222,684 10,349,650
Due after five years through ten years 34,600,591 36,621,396
Due after ten years 14,110,373 15,913,974
------------ ------------
60,158,830 64,128,559
Mortgage-backed securities 65,578,958 69,229,327
------------ ------------
Totals $125,737,788 $133,357,886
============ ============
</TABLE>
Actual maturities may differ from those scheduled as a result of
prepayments by the issuers.
Substantially all mortgage-backed securities are comprised of certificates
issued by government agencies and are backed by guarantees of the U.S.
government or U.S. government agencies. Repayment of principal corresponds to
typical principal repayment on residential real estate mortgages with 7%
estimated to pay off in one year or less, 22% estimated to pay off in two to
five years, 28% estimated to pay off in six to ten years, 40% estimated to pay
off in eleven to twenty years, and 3% estimated to pay off after twenty years.
At December 31, 1995, no investments held for the production of income
were non-income producing for the twelve months preceding the balance sheet
date.
SECURITIES ON DEPOSIT
At December 31, 1995, bonds with a carrying value of approximately
$7,460,000 were on deposit with regulatory authorities as required by law.
39
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
6. INVESTMENTS (CONTINUED)
NET INVESTMENT INCOME
Investment income by investment type is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Investment income:
Bonds $8,420,130 $5,313,243 $3,308,385
Short-term 126,735 77,050 77,890
Real estate 493,687 509,556 356,110
Policy loans 31,046 33,505 39,903
Other 23,280 -- --
---------- ---------- ----------
Gross investment income 9,094,878 5,933,354 3,782,288
Investment expense 966,828 922,815 1,505,830
---------- ---------- ----------
Net investment income $8,128,050 $5,010,539 $2,276,458
========== ========== ==========
</TABLE>
REALIZED CAPITAL GAINS AND LOSSES
Net realized capital gains and losses are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
1995 1994 1993
--------- --------- --------
<S> <C> <C> <C>
Realized capital gains net of losses $ 258,308 $ 197,669 $ 319,829
Less income taxes (90,408) (69,183) (111,940)
--------- --------- ---------
167,900 128,486 207,889
Amount transferred to IMR (167,900) (128,486) (207,889)
--------- --------- ---------
Net realized capital gains and losses $ -- $ -- $ --
========= ========= =========
</TABLE>
PROCEEDS FROM SALES OF BONDS
Proceeds from sales of bonds, excluding bonds called by the issuers, for
each of the three years ended December 31 were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
1995 1994 1993
---------- ---------- --------
<S> <C> <C> <C>
Proceeds $4,613,977 $2,507,227 $ 0
========== ========== ========
Gross realized gains $ 55,089 $ 7,413 $ 0
Gross realized losses 0 0 0
---------- ---------- --------
Net realized gains on
sales before income taxes $ 55,089 $ 7,413 $ 0
========== ========== ========
</TABLE>
40
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
7. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets and incurs various financial liabilities. The fair value estimates of
financial instruments presented below are not necessarily indicative of the
amounts the Company might pay or receive in actual market transactions.
Potential taxes and other transaction costs have not been considered in
estimating fair value. As a number of the Company's significant assets and
liabilities, including traditional life insurance reserves, are not considered
financial instruments, the disclosures below do not reflect the fair value of
the Company as a whole.
FINANCIAL ASSETS
The Company had the following financial assets:
At December 31, 1995
<TABLE>
<CAPTION>
Carrying Value Fair Value
-------------- ------------
<S> <C> <C>
Bonds $125,737,788 $133,357,886
Policy loans 588,429 588,429
Cash 1,985,766 1,985,766
Short-term investments 4,435,600 4,435,600
Investment income due
and accrued 1,546,493 1,546,493
Receivable from Parent
and affiliate 21,907,709 21,907,709
Assets related to
Separate Accounts 110,615,711 110,615,711
</TABLE>
At December 31, 1994
<TABLE>
<CAPTION>
Carrying Value Fair Value
-------------- ------------
<S> <C> <C>
Bonds $110,265,025 $105,777,297
Policy loans 612,175 612,175
Cash 2,037,347 2,037,347
Short-term investments 1,500,000 1,500,000
Investment income due
and accrued 1,464,338 1,464,338
Receivable from Parent
and affiliate 28,324,758 28,324,758
Assets related to
Separate Accounts 21,357,210 21,357,210
</TABLE>
Fair values for bonds are based on quoted market prices where available.
Non-quoted securities are valued based on discounted cash flow using current
interest rates for similar securities. The fair value of policy loans is
estimated at book value since the loan may be repaid at any time, and the
interest rate earned is higher than the current risk-free rate. Short-term
investments are highly liquid investments with maturities of less than one year
whose carrying value approximates fair value. Investment income due and accrued
and other financial assets are valued at their carrying value as they are short-
term in nature. Assets related to the Separate Accounts are carried at fair
value.
41
<PAGE>
LINCOLN BENEFIT LIFE COMPANY
----------------------------
NOTES TO FINANCIAL STATEMENTS (STATUTORY BASIS)
-----------------------------------------------
(CONTINUED)
7. FINANCIAL INSTRUMENTS (CONTINUED)
FINANCIAL LIABILITIES
The Company had the following financial liabilities:
At December 31, 1995
<TABLE>
<CAPTION>
Carrying Value Fair Value
-------------- ----------
<S> <C> <C>
Liabilities related to
Separate Accounts $110,615,711 $110,615,711
Other 26,716,697 26,716,697
At December 31, 1994
Carrying Value Fair Value
-------------- ----------
Liabilities related to
Separate Accounts $ 21,357,210 $ 21,357,210
Other 35,442,200 35,442,200
</TABLE>
Liabilities related to the Separate Account are valued at the fair value
of the underlying assets. Other financial liabilities are generally valued at
their carrying value due to their short-term nature.
8. DIVIDEND LIMITATION
The Company is subject to regulation by the insurance departments of the
states in which it operates, primarily its state of domicile, Nebraska.
Insurance department regulations in these states restrict the advance of
funds to parent and affiliated companies as well as the amount of dividends
that may be paid without prior approval. The maximum amount of dividends
available to the Company's shareholder in 1996 without prior approval of
the Insurance Department of the State of Nebraska is $5,128,800.
9. LEASE COMMITMENTS
The Company leases certain office facilities and computer equipment.
Total rent expense for all leases was $741,475, $722,917 and $234,049 in
1995, 1994 and 1993, respectively. Minimum rental commitments under non-
cancelable operating leases with a remaining term of more than one year as
of December 31, 1995 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1996 $ 946,415
1997 $ 995,632
1998 $1,092,840
1999 $1,124,875
2000 $1,156,910
Thereafter $1,831,441
</TABLE>
Beyond 1998, the Company has the option to cancel the agreement for
office space subject to a cancellation charge of an amount equal to one
year's rent.
42
<PAGE>
PART C
------
OTHER INFORMATION
-----------------
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
(a) Financial Statements
- --- --------------------
The following financial statements are included in Part A of the
Registration Statement:
None
The following financial statements are included in Part B of the
Registration Statement:
The financial statements of the Separate Account as of December
31, 1995 and for the years ended December 31, 1995 and 1994 and
the financial statements (prepared on the statutory basis of
accounting) for Lincoln Benefit Life Company as of December 31,
1995, and 1994 and for each of the three years in the period
ended December 31, 1995.
The following financial statements are included in Part C of the
Registration Statement:
<TABLE>
<CAPTION>
None
<S> <C> <C> <C>
(b) Exhibits
- --- --------
(1) Resolution Establishing Separate Account ...................... *
(2) Custody Agreements ............................................ Not Applicable
(3) (a) Form of Underwriting Agreement ........................... Herewith
(b) Form of Selling Agreement ................................ *
(4) Variable Annuity Contract ..................................... *
(5) Application for Contract ...................................... Herewith
(6) Depositor - Corporate Documents
(a) Articles of Incorporation ................................ *
(b) By-Laws .................................................. *
(7) Reinsurance Contract .......................................... Herewith
(8) Forms of Fund Participation Agreement:
(a) Janus Aspen Series ....................................... *
(b) Variable Insurance Products Fund ......................... *
(c) Variable Insurance Products Fund II ...................... *
(d) IAI Retirement Funds, Inc ................................ *
(e) Federated Insurance Fund Management Series ............... Herewith
(f) Scudder Variable Life Investment Fund .................... Herewith
(9) Opinion of Counsel ............................................ Herewith
(10) Consent of Independent Accountant ............................. Herewith
(11) Financial Statements Omitted from Item 23 ..................... Not Applicable
(12) Initial Capitalization Agreement .............................. *
(13) Performance Computations ...................................... *
</TABLE>
* Previously Filed
A
<PAGE>
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
- ------------------------------------------------
The directors and principal officers of Lincoln Benefit Life Company are
listed below. Their principal business address is 206 South 13th Street,
Lincoln, Nebraska 68508.
NAME POSITION/OFFICE WITH DEPOSITOR
---- ------------------------------
Louis G. Lower, III Chairman of the Board of Directors and
Chief Executive Officer
B. Eugene Wraith Director, President and Chief Operating Officer
Douglas F. Gaer Director, Senior Vice President
Janet P. Anderbery Vice President and Controller
Peter H. Heckman Director
William F. Krueger Director and Senior Vice President
John J. Morris Director, Senior Vice President and Secretary
Lawrence Pollock Director
Robert E. Rich Director, Senior Vice President, Treasurer
and Assistant Secretary
Theodore A. Schnell Director
Stephen W. Sutton Director and Senior Vice President
Michael J. Velotta Director
Carol S. Watson Director, Senior Vice President
and General Counsel
David A. Behrens Vice President
Thomas J. Berney Vice President
Nancy N. Charpiot Vice President
John H. Coleman III Vice President
Marvin P. Ehly Vice President
Kenny L. Gettman Vice President
Georgia G. Feiste Vice President
Rodger A. Hergenrader Vice President
Noel C. Jensen Vice President
Sharyn L. Jensen Vice President
Theodore J. Kooser Vice President
Shirley A. Overly Vice President
Stanley G. Shelley Vice President
Craig M. Stoudnor Vice President
Dean M. Way Vice President
Patrick A. Weigel Vice President
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR
- -------------------------------------------------------------------------
REGISTRANT
- ----------
See 10-K Commission File #1-11840, The Allstate Corporation
ITEM 27. NUMBER OF CONTRACT OWNERS
- -----------------------------------
As of February 14, 1996, the Registrant has 2,015 qualified contract owners
and 1,552 non-qualified contract owners.
ITEM 28. INDEMNIFICATION
- -------------------------
The Articles of Incorporation of Lincoln Benefit Life Company (Depositor)
provide for the indemnification of its directors and officers against
expenses, judgments, fines and amounts paid in settlement as incurred by
such person, so long as such person shall not have been adjudged to be
liable for negligence or misconduct in the performance of a duty to the
Company. This right of indemnity is not exclusive of other rights to which
a director or officer may otherwise be entitled.
B
<PAGE>
The by-laws of Lincoln Benefit Financial Services, Inc. (Distributor)
provide that the corporation will indemnify a director, officer, employee
or agent of the corporation to the full extent of Delaware law. In
general, Delaware law provides that a corporation may indemnify a director,
officer, employee or agent against expenses, judgments, fines and amounts
paid in settlement if that individual acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests
of the corporation, and with respect to any criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful. No
indemnification shall be made for expenses, including attorney's fees, if
the person shall have been judged to be liable to the corporation unless a
court determines such person is entitled to such indemnity. Expenses
incurred by such individual in defending any action or proceeding may be
advanced by the corporation so long as the individual agrees to repay the
corporation if it is later determined that he or she is not entitled to
such indemnification.
Under the terms of the form of Underwriting Agreement, the Depositor agrees
to indemnify the Distributor for any liability that the latter may incur to
a Contract owner or party-in-interest under a Contract, (a) arising out of
any act or omission in the course of or in connection with rendering
services under such Agreement, or (b) arising out of the purchase,
retention or surrender of a Contract; provided, that the Depositor will not
indemnify the Distributor for any such liability that results from the
latter's willful misfeasance, bad faith or gross negligence, or from the
reckless disregard by the latter of its duties and obligations under the
Underwriting Agreement.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the forgoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
C
<PAGE>
ITEM 29. PRINCIPAL UNDERWRITER
- -------------------------------
Lincoln Benefit Financial Services, Inc. serves as distributor for the
Registrant. The following are the directors and officers of Lincoln
Benefit Financial Services, Inc. Their principal business address is 206
South 13th Street, Lincoln, Nebraska 68508.
NAME POSITION WITH DISTRIBUTOR
---- -------------------------
B. Eugene Wraith Director, Chairman and President
Janet P. Anderbery Vice President & Controller
David A. Behrens Vice President
Douglas F. Gaer Director
William F. Krueger Director and Vice President
John J. Morris Director, Vice President and Secretary
Robert E. Rich Director
Carol S. Watson Director, Vice President-Compliance
and General Counsel
The following commissions and other compensation were received by each
principal underwriter, directly or indirectly, from the Registrant during
the Registrant's last fiscal year:
<TABLE>
<CAPTION>
NET
UNDERWRITING
DISCOUNTS COMPENSATION
NAME OF AND ON BROKERAGE
PRINCIPAL UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS COMPENSATION
- --------------------------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Lincoln Benefit Financial $4,596,381
Services, Inc.
</TABLE>
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
- ------------------------------------------
The Depositor, Lincoln Benefit Life Company, is located at 206
South 13th Street, Lincoln, Nebraska 68508.
The Distributor, Lincoln Benefit Financial Services, Inc., is located at
134 South 13th Street, Lincoln, Nebraska 68508.
Each company maintains those accounts and records required to be
maintained pursuant to Section 31(a) of the Investment Company Act and
the rules promulgated thereunder.
ITEM 31. MANAGEMENT SERVICES
- -----------------------------
None.
D
<PAGE>
ITEM 32. UNDERTAKINGS
- ----------------------
Registrant undertakes (1) to file post-effective amendments to this
Registration Statement as frequently as is necessary to ensure that the
audited financial statements in the Registration Statement are never more
than 16 months old for so long as payments under the variable annuity
contracts may be accepted; (2) to include either (A) as part of any
application to purchase a Contract offered by the prospectus forming part
of this Registration Statement, a space that an applicant can check to
request a Statement of Additional Information, or (B) a post card or
similar written communication affixed to or included in the prospectus that
the applicant can remove to send for a Statement of Additional Information,
and (3) to deliver any Statement of Additional Information and any
financial statements required to be made available under this Form N-4
promptly upon written or oral request.
REPRESENTATIONS
- ---------------
The Company hereby represents that it is relying upon a No Action Letter
issued to the American Council of Life Insurance dated November 28, 1988
(Commission ref. IP-6-88) and that the following provisions have been
complied with:
1. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in each registration statement,
including the prospectus, used in connection with the offer of the
contract;
2. Include appropriate disclosure regarding the redemption restrictions
imposed by Section 403(b)(11) in any sales literature used in
connection with the offer of the contract;
3. Instruct sales representatives who solicit participants to purchase
the contract specifically to bring the redemption restrictions imposed
by Section 403(b)(11) to the attention of the potential participants;
4. Obtain from each plan participant who purchases a Section 403(b)
annuity contract, prior to or at the time of such purchase, a signed
statement acknowledging the participant's understanding of (a) the
restrictions on redemption imposed by Section 403(b)(11), and (2)
other investment alternatives available under the employer's Section
403(b) arrangement to which the participant may elect to transfer his
contract value.
E
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this Post-Effective Amendment to the
Registration Statement and has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf, in the City of Lincoln, and
the State of Nebraska, on this 26th day of April, 1996.
LINCOLN BENEFIT LIFE VARIABLE
ANNUITY ACCOUNT
(Registrant)
By: LINCOLN BENEFIT LIFE COMPANY
(Depositor)
By: /s/B. Eugene Wraith
------------------------------
B. Eugene Wraith, President
and Chief Operating Officer
As required by the Securities Act of 1933, this Post-Effective Amendment to
the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/B. Eugene Wraith President, Chief Operating April 29, 1996
- --------------------- Officer and Director ---------------
B. Eugene Wraith (Principal Executive Officer)
/s/Robert E. Rich Senior Vice President April 29, 1996
- --------------------- Chief Actuary, Treasurer ---------------
Robert E. Rich and Director
(Principal Financial Officer)
/s/Janet P. Anderbery Vice President and April 29, 1996
- --------------------- Controller (Principal ---------------
Janet P. Anderbery Accounting Officer)
Director
- --------------------- ---------------
Peter H. Heckman
/s/William F. Krueger Director April 29, 1996
- --------------------- ---------------
William F. Krueger
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director
- --------------------- ---------------
Louis G. Lower, II
/s/John J. Morris Director April 29, 1996
- --------------------- ---------------
John J. Morris
/s/Lawrence Pollock Director April 29, 1996
- --------------------- ---------------
Lawrence Pollock
/s/Douglas F. Gaer Director April 29, 1996
- --------------------- ---------------
Douglas F. Gaer
Director
- --------------------- ---------------
Theodore A. Schnell
/s/Stephen W. Sutton Director April 29, 1996
- --------------------- ---------------
Stephen W. Sutton
Director
- --------------------- ---------------
Michael J. Velotta
/s/Carol S. Watson Director April 29, 1996
- --------------------- ---------------
Carol S. Watson
</TABLE>
<PAGE>
INDEX TO EXHIBITS
FOR
REGISTRATION STATEMENT ON FORM N-4
LINCOLN BENEFIT LIFE VARIABLE ANNUITY ACCOUNT
<TABLE>
<CAPTION>
EXHIBIT NO. SEQUENTIAL PAGE NO.
- ----------- -------------------
<S> <C> <C>
(3)(a) Form of Underwriting Agreement
(5) Application for Contract
(7) Reinsurance Contract
(8) Forms of Fund Participation Agreement
(e) Federated Insurance Fund Management Series
(f) Scudder Variable Life Investment Fund
(9) Opinion of Counsel
(10) Consent of Independent Accountant
</TABLE>
<PAGE>
EXHIBIT 3(a)
AMENDMENT #1 to the
Underwriting Agreement
(hereinafter "Agreement")
between
Lincoln Benefit Life Company
(hereinafter "LBL")
on behalf of the
Lincoln Benefit Life Variable Annuity Account
(hereinafter "Separate Account")
and
Lincoln Benefit Financial Services
(hereinafter "LBFS")
IT IS HEREBY AGREED, that the Underwriting Agreement effective January 3, 1994
between LBL and LBFS, is amended as provided below.
Paragraph 5, "Compensation" is hereby amended by deleting said Paragraph in its
entirety, and replacing it with the following new Paragraph 5:
5. Compensation
------------
Principal Underwriter shall be entitled to remuneration of its services in
the amount of 6.25% for all variable annuity premiums received on policies
issued by Company. Such remuneration shall be reduced by the amount of
commissions payable to brokers/dealers receiving compensation pursuant to
selling agreements with Company and Principal Underwriter, or registered
representatives affiliated with Principal Underwriter.
Page 1 of 2
<PAGE>
This Amendment shall be effective as of January 3, 1994. Except as amended
hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the parties to the Agreement have caused the Amendment to be
duly executed in duplicate by their duly authorized officers on the dates shown
below.
LINCOLN BENEFIT LIFE COMPANY
By: /s/ FRED H. JONSKE Attested
----------------------------
Title: President By: /s/ CAROL S. WATSON
---------------------------- -----------------------------
Date: February 19, 1996 Date: February 19, 1996
---------------------------- -----------------------------
LINCOLN BENEFIT FINANCIAL SERVICES, INC.
By: /s/ B. E. WRAITH Attested
----------------------------
Title: President By: /s/ CAROL S. WATSON
---------------------------- -----------------------------
Date: February 19, 1996 Date: February 19, 1996
---------------------------- -----------------------------
Page 2 of 2
<PAGE>
<TABLE>
EXHIBIT 5
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant_____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
HOME OFFICE ENDORSEMENTS
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. Under penalties of perjury, I
certify that the Social Security Number stated herein is my correct taxpayer ID
number, and I am not subject to backup withholding. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE SEPARATE ACCOUNT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT
VARIABLE ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED. [_] Please send me a copy
of the Statement of Additional Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9330, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9330, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant_____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Bond
_______ % IAI Regional Products Fund II _______ % Balanced
_______ % IAI Reserve _______ % Asset Manager
_______ % IAI Balanced _______ % Contrafund
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
HOME OFFICE ENDORSEMENTS
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. Under penalties of perjury, I
certify that the Social Security Number stated herein is my correct taxpayer ID
number, and I am not subject to backup withholding. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED
DOLLAR AMOUNT. RECEIPT OF A CURRENT VARIABLE ANNUITY PROSPECTUS IS HEREBY
ACKNOWLEDGED. [_] Please send me a copy of the Statement of Additional
Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9330, Rev. 5/96 NF NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
period after issue date.
Janus Aspen Series Fidelity VIPF Federated Insurance Management Series
DCA PR DCA PR DCA PR
$_______ _______% Flexible Income $_______ _______% Money Market $_______ _______% Utility Fund
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Growth $_______ _______% Overseas $_______ _______% High Income Bond Fund
$_______ _______% Aggressive Growth $_______ _______% Growth
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II IAI Retirement Funds, Inc.
DCA PR DCA PR DCA PR
$_______ _______% Bond $_______ _______% Asset Manager $_______ _______% IAI Regional
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Balanced
$_______ _______% IAI Reserve
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9330, Rev. 5/96 NF Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant_____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. No change shall be made in the
annuity amount or plan or issue age by such endorsement or correction. Under
penalties of perjury, I certify that the Social Security Number stated herein
is my correct taxpayer ID number, and I am not subject to backup withholding.
I UNDERSTAND THAT ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE
SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR
AMOUNT. RECEIPT OF A CURRENT VARIABLE ANNUITY PROSPECTUS IS HEREBY
ACKNOWLEDGED. [_] Please send me a copy of the Statement of Additional
Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9331, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9331, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant_____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
HOME OFFICE ENDORSEMENTS
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE SEPARATE ACCOUNT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT
VARIABLE ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED. [_] Please send me a copy
of the Statement of Additional Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9332, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9332, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
IMPORTANT NOTICE: Any person who, with intent to defraud or knowing that he is facilitating a fraud
against an insurer, submits an application or files a claim containing a false or deceptive statement
is guilty of insurance fraud.
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
HOME OFFICE ENDORSEMENTS
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. Under penalties of perjury, I
certify that the Social Security Number stated herein is my correct taxpayer ID
number, and I am not subject to backup withholding. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE SEPARATE ACCOUNT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT
VARIABLE ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED. [_] Please send me a copy
of the Statement of Additional Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9333, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9333, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
Important Notice: Any person who knowingly and with intent to injure, defraud or deceive any insurer
files a statement of claim or an application containing any false, incomplete, or misleading
information is guilty of a felony of the third degree.
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
HOME OFFICE ENDORSEMENTS
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. Under penalties of perjury, I
certify that the Social Security Number stated herein is my correct taxpayer ID
number, and I am not subject to backup withholding. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE SEPARATE ACCOUNT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT
VARIABLE ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED. [_] Please send me a copy
of the Statement of Additional Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9334, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9334, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant_____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
FOR HOME OFFICE ENDORSEMENTS ONLY
________________________________________________________________________________
REMARKS AND/OR SPECIAL INSTRUCTIONS:
________________________________________________________________________________
On written request, Lincoln Benefit Life Company will provide to you within 30
days reasonable factual information regarding the benefits and provisions of the
annuity contract. If or any reason you are not satisfied with the annuity
contract, you may return the annuity contract within 20 days after the contract
is delivered and receive a refund of all monies paid.
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. Lincoln Benefit Life may correct or
endorse this application. No change shall be made in the annuity amount or plan
or issue age by such endorsement or correction. Under penalties of perjury, I
certify that the Social Security Number stated herein is my correct taxpayer ID
number, and I am not subject to backup withholding. I UNDERSTAND THAT ANNUITY
PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE SEPARATE ACCOUNT ARE VARIABLE
AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. RECEIPT OF A CURRENT
VARIABLE ANNUITY PROSPECTUS IS HEREBY ACKNOWLEDGED. [_] Please send me a copy
of the Statement of Additional Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9335, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9335, Rev. 5/96 Page 2
<PAGE>
<TABLE>
_____________________________________________________________________________________________________
APPLICATION FOR FLEXIBLE PREMIUM VARIABLE ANNUITY
LINCOLN BENEFIT LIFE COMPANY, LINCOLN BENEFIT LIFE CENTRE, LINCOLN, NE 68501-0469
_____________________________________________________________________________________________________
IMPORTANT NOTICE: Any person who knowingly and with intent to defraud any insurance company or other
person files an application for insurance or statement of claim containing any materially false
information or conceals for the purpose of misleading, information concerning any fact material
thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal
and civil penalties.
<S> <C> <C>
ANNUITANT: Name____________________________ Birth Date ____-____-____ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
_____________________________________________________________________________________________________
OWNER (IF OTHER): Name_______________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Birth Date _____-_____-______ Relationship to Annuitant____________________________________________
_____________________________________________________________________________________________________
PRIMARY BENEFICIARY: Name____________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
CONTINGENT BENEFICIARY: Name_________________________________________ Soc. Sec. No. ____-____-_____
Street Address_____________________________ City, State, ZIP_______________________________________
Relationship to Owner________________________________________________ Birth Date _____-_____-______
_____________________________________________________________________________________________________
</TABLE>
PURCHASE PAYMENT INFORMATION: First Purchase of $____________ submitted
herewith (Check or Money Order should be payable to Lincoln Benefit Life Co.).
A copy of this application duly signed by the agent will constitute receipt for
such amount. If this application is declined, there will be no liability on
the part of the Company, and any sums submitted with this application will be
refunded. The Contract Owner intends to make subsequent purchase payments of
$__________ on a
[_]monthly (PAM) [_]quarterly [_]semi-annually [_]annual basis [_]single payment
<TABLE>
_____________________________________________________________________________________________________
PURCHASE PAYMENT ALLOCATION: (whole percentages only and must equal 100%)
<S> <C> <C>
Janus Aspen Series Fidelity Variable Insurance Federated Insurance Management Series
_______ % Flexible Income Products Fund _______ % High Income Bond Fund
_______ % Balanced _______ % Money Market _______ % Utility Fund
_______ % Growth _______ % Equity Income _______ % Fund for U.S. Govt. Securities
_______ % Aggressive Growth _______ % Overseas
_______ % Worldwide Growth _______ % Growth Scudder Variable Life Investment Fund
_______ % Bond
IAI Retirement Funds, Inc. Fidelity Variable Insurance _______ % Balanced
_______ % IAI Regional Products Fund II
_______ % IAI Reserve _______ % Asset Manager Fixed Account
_______ % IAI Balanced _______ % Contrafund _______ %
_____________________________________________________________________________________________________
</TABLE>
Will this annuity replace or change any existing policy? [_] Yes [_] No
If Yes give name of company, policy issue date, policy number and cost basis.
________________________________________________________________________________
________________________________________________________________________________
TAX QUALIFIED? [_] IRA [_] SEP-IRA [_] 403(b) [_] Other _________________
[_] 401 (a) {[_]LBL Prototype [_] Funding Vehicle}
[_] 401 (k) {[_]LBL Prototype [_] Funding Vehicle}
Tax Year for which contribution is to be applied _____________
________________________________________________________________________________
ADDITIONAL BENEFICIARY INSTRUCTIONS OR OTHER REMARKS IF ANY:
________________________________________________________________________________
I declare: To the best of my knowledge and belief, all statements and answers
are true, complete and correctly reported. No change shall be made in the
annuity amount or plan or issue age by such endorsement or correction. Under
penalties of perjury, I certify that the Social Security Number stated herein
is my correct taxpayer ID number, and I am not subject to backup withholding.
I UNDERSTAND THAT ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED UNDER THE
SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED DOLLAR
AMOUNT. RECEIPT OF A CURRENT VARIABLE ANNUITY PROSPECTUS IS HEREBY
ACKNOWLEDGED. [_] Please send me a copy of the Statement of Additional
Information to the prospectus.
Signed at ________________ On (date) __-__-__ Owner's Signature ______________
Agent Name____________________________________ Agent Signature ________________
VAA-9336, Rev. 5/96 NO. D
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
SUITABILITY:
Annual Earnings: [ ] $25,000 to $50,000 [ ] $50,000-$100,000 [ ] $100,000-$200,000 [ ] Over $200,000
Net Worth: [ ] $25,000-$75,000 [ ] $75,000-$125,000 [ ] $125,000-$250,000 [ ] Over $250,000
Financial Objectives: [ ] Long Term Growth [ ] Preservation of Capital [ ] Maximum Capital Appreciation
[ ] Other _________________________________________________________________________________________________
[ ] Check this box if you do not wish to provide this information.
Signature of Owner ________________________________________________________________________________________________________________
===================================================================================================================================
TO THE AGENT: To the best of your knowledge will this annuity replace or change any existing life insurance or annuity in this or
any other company? [ ] Yes [ ] No
Print Agent's Name __________________________________________________ Agent Number ________________________________________________
Signature of Agent __________________________________________________ Agent's Phone No. ___________________________________________
===================================================================================================================================
PAM (Pre-Authorized Method) I authorize the Company to collect $____________________________________, on the due date specified, by
initiating electronic debit entries to my account. A balance must exist before the program can commence. ATTACH VOIDED CHECK.
(Credit unions and savings accounts may not be eligible.)
Signature of Authorized Account Owner ________________________________________________________ Date _______________________________
===================================================================================================================================
DOLLAR COST AVERAGING/PORTFOLIO REBALANCING:
Select only one. You may not use Dollar Cost Averaging and Portfolio Rebalancing at the same time.
[ ] Dollar Cost Averaging (DCA): [ ] Portfolio Rebalancing (PR):
Please dollar cost average in the amount of $____________ Please rebalance in the percentages specified below:
($100 minimum transfer) from ____________________________ Frequency: [ ] Monthly [ ] Semiannual
Source Subaccount (only one Source Subaccount may be chosen) [ ] Quarterly [ ] Annual
to the following Subaccounts (eight maximum) dollar amounts only: Date of First Rebalance _________-_________-_________
Frequency: [ ] Monthly [ ] Quarterly [ ] Annual MO DA YR
If no date selected, the first rebalance will occur one
Janus Aspen Series Fidelity VIPF period after issue date.
DCA PR DCA PR Federated Insurance Management Series
$_______ _______% Flexible Income $_______ _______% Money Market DCA PR
$_______ _______% Balanced $_______ _______% Equity-Income $_______ _______% Utility Fund
$_______ _______% Growth $_______ _______% Overseas $_______ _______% Fund for U.S. Gov't. Securities
$_______ _______% Aggressive Growth $_______ _______% Growth $_______ _______% High Income Bond Fund
$_______ _______% Worldwide Growth
Scudder Variable Life Investment Fund Fidelity VIPF II
DCA PR DCA PR IAI Retirement Funds, Inc.
$_______ _______% Bond $_______ _______% Asset Manager DCA PR
$_______ _______% Balanced $_______ _______% Contrafund $_______ _______% IAI Regional
Fixed Account $_______ _______% IAI Balanced
DCA PR $_______ _______% IAI Reserve
$_______ _______% (Restrictions apply for DCA--see prospectus for details)
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
SYSTEMATIC WITHDRAWALS ($50.00 minimum withdrawal)
I authorize systematic withdrawals of [ ] $_______________, or [ ] Interest Earnings, or [ ] ______% Percentage of Purchase Payments
from my contract value to commence during the month of _____________________________. Withdrawals may be subject to penalties and/or
a Deferred Sales Charge. Additional restrictions may apply to contracts held as a Qualified Plan.
Frequency: [ ] Monthly [ ] Quarterly [ ] Semi-Annual [ ] Annual
Please indicate the amount or percentage of the withdrawal from the chosen Subaccount(s) [ ] Dollar Amount Specified
[ ] Percentage Specified [ ] Or mark this box if the withdrawal is to be taken from the account value on a Pro Rata basis.
JANUS ASPEN SERIES _______________ Flexible Income _______________ Balanced _______________ Growth
_______________ Aggressive Growth _______________ Worldwide Growth
IAI RETIREMENT FUNDS, INC _______________ IAI Regional _______________ IAI Reserve _______________ IAI Balanced
FIDELITY VIPF _______________ Money Market _______________ Equity Income _______________ Overseas _______________ Growth
FIDELITY VIPF II _______________ Asset Manager _______________ Contrafund
FEDERATED INSURANCE MANAGEMENT SERIES _______________ High Income Bond Fund _______________ Utility Fund
_______________ Fund for U.S. Gov't. Securities
SCUDDER VARIABLE LIFE INVESTMENT FUND _______________ Bond _______________ Balanced FIXED ACCOUNT _______________
PLEASE [ ] WITHHOLD [ ] DO NOT WITHHOLD FEDERAL INCOME TAXES
Signature of Owner ___________________________________________________________________________ Date _______________________________
===================================================================================================================================
TO THE REGISTERED REPRESENTATIVE/BROKER-DEALER: Choose option: [ ] OPTION A [ ] OPTION B
Broker/Dealer _______________________________________________________ Telephone ___________________________________________________
</TABLE>
VAA-9336, Rev. 5/96 Page 2
<PAGE>
EXHIBIT 7
AMENDMENT #2
To the REINSURANCE AGREEMENT
Effective JANUARY 1, 1994
Between
LINCOLN BENEFIT LIFE COMPANY
(Hereinafter called "LBL")
And
ALLSTATE LIFE INSURANCE COMPANY
(Hereinafter called "ALLSTATE")
IT IS HEREBY AGREED, that the Reinsurance Agreement effective January 1, 1994
between LBL and ALLSTATE (hereinafter "Agreement"), is amended as provided
below.
Effective January 1, 1994, Article III is hereby amended by adding the following
new paragraph:
ALLSTATE and LBL agree to an election under Treasury Regulations 1-848-2(g)(8)
as follows:
(a) For each taxable year under this Agreement, the party with net
positive consideration, as defined in the regulations promulgated
under Treasury Code Section 848, will capitalize specified policy
acquisition expenses with respect to this Agreement without regard to
the general deductions limitation of Section 848(c)(1);
(b) LBL and ALLSTATE agree to exchange information pertaining to te amount
of net consideration for all reinsurance agreements in force between
them to ensure consistency for purposes of computing specified policy
acquisiton expenses. LBL and ALLSTATE shall agree on the amount of
such net consideration for each taxable year no later than the May 1
following the end of such year.
1
<PAGE>
(c) This election shall be effective for 1994 and for all subsequent
taxable years for which this Agreement emains in effect.
Except as amended hereby, the Agreement shall remain unchanged.
IN WITNESS HEREOF, the paties to the Agreement have caused this Amendment to be
duly executed in duplicate by their respective officers on the dates shown
below.
LINCOLN BENEFIT LIFE COMPANY
By: /s/ ROBERT E. RICH
--------------------------------------
Title: Sr. Vice President, Chief Actuary & Treasurer
--------------------------------------
Date: August 10, 1995
--------------------------------------
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ C. NELSON STROM
----------------------------------
Title: Vice President
----------------------------------
Date: August 10, 1995
----------------------------------
2
<PAGE>
EXHIBIT 8(e)
FIRST AMENDMENT TO FUND PARTICIPATION AGREEMENT
The Fund Participation Agreement among Lincoln Benefit Life Company, Insurance
Management Series and Federated Securities Corp., dated December 30, 1993, is
hereby amended as follows:
Section 11.9 Administrative services to Variable Contract Owners shall be the
responsibility of Insurer. Insurer, on behalf of its separate accounts will be
the sole shareholder of record of Fund shares. Fund and Distributor recognize
that they will derive a substantial savings in administrative expense by virtue
of having a sole shareholder rather than multiple shareholders. In consideration
of the administrative savings resulting from having a sole shareholder rather
than multiple shareholders, Distributor agrees to pay to Insurer an amount
computed at an annual rate of .25 of 1% of the average daily net asset value of
shares held in subaccounts for which Insurer provides administrative services.
Distributor's payments to Insurer are for administrative services only and do
not constitute payment in any manner for investment advisory services.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be duly
executed as of the 1 day of January, 1994.
INSURANCE MANAGEMENT SERIES
By: /s/ Richard B. Fisher
----------------------------
Name: Richard B. Fisher
--------------------------
Title: Vice President
-------------------------
<PAGE>
FEDERATED SECURITIES CORP.
By: /s/ Bryon F. Bowman
---------------------------
Name: Bryon F. Bowman
-------------------------
Title: Vice President
------------------------
LINCOLN BENEFIT LIFE COMPANY
By: /s/ Dougles F. Gaer
----------------------------
Name: Douglas F. Gaer
---------------------------
Title: Sr. Vice President
--------------------------
<PAGE>
[SCUDDER LOGO] Exhibit 8(f)
Scudder Investor Services, Inc.
Two International Place
Boston, Massachusetts 02110
February 20, 1996
Lincoln Benefit Financial Services
134 South 13th Street
Lincoln, NE 68508
Ladies and Gentlemen:
Reference is made to the Participating Contract and Policy Agreement (the
"Agreement") between Scudder Investor Services, Inc ("SIS"), the principal
underwriter of Shares of Scudder Variable Life Investment fund (the "Fund"), and
you with respect to the offer and sale of Participating Contracts and Policies
for which the fund serves as a funding vehicle.
In order to reflect the new multiple class structure and addition of a Rule
12b-1 Plan with respect to Class B Shares of all Portfolios (with the exception
of the Money Market Portfolio) of the fund, the following sections of the
Agreement are hereby amended or supplemented as follows:
(1) Section 4 of the Agreement is amended to include the following
subsection (e):
With respect to payments to be made to SIS pursuant to a Rule 12b-1 Plan for the
Fund, you will not seek reimbursement for administration and recordkeeping
services under the Fund's Rule 12b-1 Plan that have been or will be paid for by
any fees or charges imposed on owners of Participating Contracts and Policies by
a Participating Insurance Company for such services. This limitation does not,
however, apply to profits that you earn from fees and charges under
Participating Contracts and Policies for your nondistribution-related costs and
expenses, such as mortality and expense risk charges under Participating
Contracts and Policies, which profits may be available for your use to pay
distribution and other expenses incurred by you. Further, this provision does
not restrict you from receiving sales charges on purchases and redemptions,
consistent with applicable law, made under or redemption proceeds from a
Participating Contract or Policy at the same time that you are seeking
reimbursement for expenses under the Fund's Rule 12b-1 Plan.
(2) Section 5 of the Agreement is amended to include the following
subsection (c):
We shall reimburse you, subject to the minimum amounts set forth in the attached
schedule, for those distribution and shareholder servicing-related expenses that
are permitted to be paid for by the fund under the Fund's Rule 12b-1 Plan and
for which (i) you submit documentation, as may be requested by us or by the
Fund's Board of Trustees, and (ii) we receive payment for such expenses from the
Fund under the Fund's Rule 12b-1 Plan. We shall remit to you as promptly as
reasonably practicable all payments received by us from the Fund for remittance
to you pursuant to the Fund's Rule 12b-1 Plan.
(3) Section 12 of the Agreement is amended to include the following sentence at
the end of that section:
To the extent we receive payments under any provision of this Agreement pursuant
to a Rule 12b-1 Plan for the Fund, both you and we understand and agree that
this Agreement will be subject to the applicable approval, reporting and
termination requirements set forth in Rule 12b-1.
<PAGE>
This letter constitutes notice of the above amendments. Your first sale of
contracts and/or policies after receipt of this notice and after the expiration
of any applicable minimum notice requirement set forth in the Agreement
constitutes your acceptance of such amendments to the Agreement. Capitalized
terms used in this letter without definition that are defined in the Agreement
shall have the same meaning assigned to them in the Agreement.
SCUDDER INVESTOR SERVICES, INC.
/s/ David S. Lee
------------------------------------
President
<PAGE>
Exhibit 9
[LINCOLN BENEFIT LIFE LETTERHEAD]
April 26, 1996
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
RE: Lincoln Benefit Life Variable Annuity Account
File No 33-66786 and 811-7924
Commissioners:
I am an attorney at law admitted to the Bar of the state of Nebraska. I am
Counsel of Lincoln Benefit Life Company. I provide legal counsel for the
Lincoln Benefit Life Variable Annuity Account. In such capacity, I have
reviewed the Lincoln Benefit Life Variable Annuity Account's Post-Effective
Amendment No. 6 to Form N-4 filed pursuant to Rule 485(b) under the Securities
Act of 1933 and represent that such Amendment does not contain disclosure which
would render it ineligible to become effective pursuant to Rule 485(b).
Sincerely,
/s/Gregory C. Sernett
Gregory C. Sernett
Counsel
<PAGE>
Exhibit 10
INDEPENDENT AUDITORS' CONSENT
- -----------------------------
We consent to the use in this Post-Effective Amendment No. 6 to Registration
Statement No. 33-66786 of Lincoln Benefit Life Variable Annuity Account of our
report dated February 16, 1996 on the financial statements of Lincoln Benefit
Variable Annuity Account and our report dated April 1, 1996 on the financial
statements of Lincoln Benefit Life Company appearing in the Statement of
Additional Information, which is a part of this Registration Statement.
We also consent to the reference to us under the heading "Financial Statements"
in the Statement of Additional Information, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Lincoln, Nebraska
April 26, 1996
