AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 29, 2000
REGISTRATION NO. 333-51051
811-8190
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 4 [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 19
UNITED OF OMAHA SEPARATE ACCOUNT C
(EXACT NAME OF REGISTRANT)
UNITED OF OMAHA LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
MUTUAL OF OMAHA PLAZA, OMAHA, NEBRASKA, 68175
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
DEPOSITOR'S TELEPHONE NUMBER, INCLUDING AREA CODE
(402) 351-5225
NAME AND ADDRESS OF AGENT FOR SERVICE:
Michael E. Huss, Esquire
Mutual of Omaha Companies
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska, 68175-1008
Internet: [email protected]
It is proposed that this filing will become effective (check appropriate
box):
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485.
[ ] on (date) pursuant to paragraph (b) of Rule 485.
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485.
[x] on May 1, 2000 pursuant to paragraph (a)(i) of Rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495 (a)
Showing Location in Part A (Prospectus) and
Part B (Statement of Additional Information)
OF REGISTRATION STATEMENT OF INFORMATION REQUIRED BY FORM N-4
PART A
ITEM OF FORM N-4 PROSPECTUS CAPTION
1. Cover Page................................ Cover Page
2. Definitions............................... Definitions
3. Synopsis.................................. Introduction and Summary
4. Condensed Financial Information........... Financial Statements
5. General
(a) Depositor................................. About Us
(b) Registrant................................ Variable Investment Options
(c) Portfolio Company......................... Variable Investment Options
(d) Fund Prospectus........................... Variable Investment Options
(e) Voting Rights............................. Voting Rights
6. Deductions and Expenses
(a) General................................... Expenses
(b) Sales Load %.............................. N/A
(c) Special Purchase Plan.................... N/A
(d) Commissions............................... Distributor of the Policies
(e) Expenses - Registrant..................... N/A
(f) Fund Expenses............................. Other Expenses
(g) Organizational Expenses................... N/A
7. General Description of Variable Annuity Contracts
(a) Persons with Rights....................... Important Policy Provisions;
Policy Distributions;
Voting Rights
(b) (i) Allocation of Premium
Payments............................ Introduction and Summary: How
the Policy Operates; Dollar
Cost Averaging; STEP Program;
Asset Allocation Program
(ii) Transfers........................... Transfers
(iii) Exchanges........................... N/A
(c) Changes................................... Variable Investment Options;
Policy Distributions
(d) Inquiries................................. Miscellaneous: Do You Have
Questions?
8. Annuity Period............................ Policy Distributions
9. Death Benefit............................. Death Benefits
10. Purchases and Contract Value
(a) Purchases................................. Policy Application and
Issuance
(b) Valuation................................. Accumulation Value
(c) Daily Calculation......................... Accumulation Value
(d) Underwriter............................... Distributor of the Policies
<PAGE>
11. Redemptions
(a) By Owners................................. Withdrawals
By Annuitant.............................. N/A
(b) Check Delay............................... Policy Application and
Issuance
(c) Lapse..................................... N/A
(d) Free Look................................. Introduction and Summary
12. Taxes..................................... Federal Tax Matters
13. Legal Proceedings......................... Legal Proceedings
14. Table of Contents for the
Statement of Statement of Additional
Additional Information........................ Information
PART B
ITEM OF FORM N-4 STATEMENT OF ADDITIONAL
INFORMATION CAPTION
15. Cover Page................................ Cover Page
16. Table of Contents......................... Table of Contents
17. General Information
and History............................... (Prospectus) About Us
18. Services
(a) Fees and Expenses
of Registrant............................. N/A
(b) Management Policies....................... N/A
(c) Custodian................................. Custody of Assets
Independent
Auditors ................................ Financial Statements
(d) Assets of Registrant...................... Custody of Assets
(e) Affiliated Person......................... N/A
(f) Principal Underwriter..................... Distribution of the Policies
19. Purchase of Securities
Being Offered........................... Distribution of the Policies
Offering Sales Load..................... N/A
20. Underwriters.............................. Distribution of the Policies;
(Prospectus) Distributor of
the Policies
21. Calculation of Performance................ Historical Performance Data
22. Annuity Payments.......................... (Prospectus) Annuity Payments
23. Financial Statements...................... Financial Statements
PART C -- OTHER INFORMATION
ITEM OF FORM N-4 PART C CAPTION
24. Financial Statements
and Exhibits.................................. Financial Statements and
Exhibits
(a) Financial Statements...................... Financial Statements
(b) Exhibits.................................. Exhibits
25. Directors and Officers of the Depositor....... Directors and Officers of
the Depositor
26. Persons Controlled By or Under Common Control Persons Controlled By or
with the Depositor or Registrant ............. Under Common Control
with the Depositor or
Registrant
<PAGE>
27. Number of Contractowners...................... Number of Policy Owners
28. Indemnification............................... Indemnification
29. Principal Underwriters........................ Principal Underwriters
30. Location of Accounts and Records.............. Location of Accounts and
Records
31. Management Services.......................... Management Services
32. Undertakings................................. Undertakings
<PAGE>
UNITED OF OMAHA
A MUTUAL OF OMAHA COMPANY LOGO
PROSPECTUS: May 1, 2000
ULTRA-ACCESS
Flexible Payment
Variable Deferred Annuity Policy
This prospectus describes ULTRA-ACCESS, WHICH IS a variable annuity policy
offered by UNITED OF OMAHA LIFE INSURANCE COMPANY with no withdrawal charge. To
purchase a Policy, generally you must invest at least $5,000. Further investment
is optional.
<TABLE>
<CAPTION>
<S> <C>
The Policy includes 30 variable
options (where you have the investment risk)
with investment portfolios from:
The investment portfolios offered
through the Policy may have names that
are nearly the same or similar to the
names of retail mutual funds. However, ALGER AMERICAN FUND
these investment portfolios are not the DEUTSCHE ASSET MANAGEMENT VIT FUNDS
same as those retail mutual funds, even FEDERATED'S INSURANCE SERIES
though they have similar names and may FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND AND
have similar characteristics and the VARIABLE INSURANCE PRODUCTS FUND II
same managers. The investment MFS VARIABLE INSURANCE TRUST
performance of these investment MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS
portfolios is not necessarily related to PIONEER VARIABLE CONTRACTS TRUST
the performance of the retail mutual SCUDDER VARIABLE LIFE INVESTMENT FUND
funds. The investment portfolios are T.ROWE PRICE EQUITY SERIES, FIXED INCOME SERIES
described in separate prospectuses that AND INTERNATIONAL SERIES
accompany this Prospectus.
and three fixed rate options (where we have the
investment risk).
</TABLE>
The variable options are not direct investments in mutual fund shares, but
are offered through subaccounts of United of Omaha Separate Account C. THE VALUE
OF YOUR POLICY WILL GO UP OR DOWN BASED ON THE INVESTMENT PERFORMANCE OF THE
VARIABLE OPTIONS THAT YOU CHOOSE.
A Statement of Additional Information (the "SAI") about us and the Policy, with
the same date as this Prospectus, is on file with the Securities and Exchange
Commission ("SEC") and is incorporated into this Prospectus by reference. You
may obtain a copy of the SAI by writing or calling us, or you may access it in
our registration on the SEC's web site (HTTP://WWW.SEC.GOV), or you may review
and copy it at the SEC's Public Reference Room in Washington D.C. (call the SEC
at 1-800-SEC-0330 for details and public hours). The Table of Contents for the
SAI is at the end of this Prospectus.
Please Read This Prospectus Carefully. It provides information
you should consider before investing in a Policy. Keep this
Prospectus and the other prospectuses for the investment
portfolios for future reference.
THE SEC DOES NOT PASS UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS, AND HAS NOT APPROVED OR DISAPPROVED THE POLICY.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
REMEMBER THAT THE POLICY AND THE INVESTMENT PORTFOLIOS:
o ARE SUBJECT TO RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL
o ARE NOT BANK DEPOSITS
o ARE NOT GOVERNMENT INSURED
o ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY
o MAY NOT ACHIEVE THEIR GOALS
UNITED OF OMAHA, Variable Product Services, P. O. Box 8430, Omaha, Nebraska
68103-0430 1-800-238-9354
1
<PAGE>
CONTENTS
PAGE(S)
--------
DEFINITIONS 3
------------------------------------------------ --------
INTRODUCTION AND SUMMARY 4-9
Comparison to Other Policies and
Investments
How the Policy Operates
Summary of Expense Charges
Examples of Expenses
------------------------------------------------ --------
FINANCIAL STATEMENTS 10-12
------------------------------------------------ --------
ABOUT US 12
------------------------------------------------ --------
INVESTMENT OPTIONS 13-20
Variable Investment Options
Fixed Rate Options
Transfers
Dollar Cost Averaging
STEP Program
Asset Allocation Program
Rebalancing Program
------------------------------------------------ --------
IMPORTANT POLICY PROVISIONS 21-23
Policy Application and Issuance
Accumulation Value
Telephone Transactions
Death of Annuitant
Minor Owner or Beneficiary
Policy Termination
------------------------------------------------ --------
EXPENSES 24-26
Mortality and Expense Risk Charge
Administrative Charges
Transfer Fee
Premium Tax Charge
Other Taxes
Other Expenses
------------------------------------------------ --------
POLICY DISTRIBUTIONS 27-31
Withdrawals
Annuity Payments
Death Benefits
------------------------------------------------ --------
FEDERAL TAX MATTERS 31-34
------------------------------------------------ --------
MISCELLANEOUS 34
Distributor of the Policies
Voting Rights
Legal Proceedings
Do You Have Questions?
------------------------------------------------ --------
Statement of Additional Information Table of 35
Contents
2
<PAGE>
- -----------------------------------------------------------
DEFINITIONS
<PAGE>
ACCUMULATION UNIT is a measurement of value in a particular Subaccount prior to
the Annuity Starting Date. Purchase payments that are invested in the variable
investment options are used to purchase Accumulation Units. The Policy sets
forth the calculation of the value of Accumulation Units.
ACCUMULATION VALUE is the dollar value of all amounts accumulated under the
Policy (in both the variable investment options and the fixed rate options).
ANNUITANT is the person on whose life annuity payments involving life
contingencies are based.
ANNUITY STARTING DATE is the date when annuity payments are scheduled to begin
(the end of the accumulation phase). The latest Annuity Starting Date permitted
is the Annuitant's 95th birthday (85th birthday in Pennsylvania).
BENEFICIARY is the person(s) or other legal entity who receives Policy benefits,
if any, upon your death. If there are joint Owners, the surviving joint Owner is
the primary Beneficiary and any named Beneficiary is a contingent Beneficiary.
BUSINESS DAY is each day that the New York Stock Exchange is open for trading.
CASH SURRENDER VALUE is the Accumulation Value less any Policy fee, and any
premium tax charge not previously deducted.
OWNER is you -- the person(s) who may exercise all rights and privileges under
the Policy. If there are joint Owners, the signatures of both Owners are needed
to exercise rights under the Policy.
POLICY is the Ultra-Access, a variable annuity policy with no withdrawal charge
offered by us through this Prospectus.
POLICY YEAR a Policy Year begins on the date of issue and each succeeding Policy
anniversary of the date of issue.
SERIES FUNDS are diversified, open-end investment management companies in which
the Variable Account invests.
SUBACCOUNT is a segregated account within the Variable Account investing in a
specified investment portfolio of one of the Series Funds.
US, WE, OUR, UNITED OF OMAHA is United of Omaha Life Insurance Company.
VALUATION PERIOD is the period commencing at the close of business of the New
York Stock Exchange on each Business Day and ending at the close of business for
the next succeeding Business Day.
VARIABLE ACCOUNT is United of Omaha Separate Account C, a separate account
maintained by us.
VARIABLE ANNUITY UNIT is a measurement of value in a particular Subaccount after
the Annuity Starting Date. The Policy sets forth the calculation of the value of
Accumulation Units.
WRITTEN NOTICE OR REQUEST is written notice, signed by you, that gives us the
information we require and is received at United of Omaha, Variable Product
Services, P.O. Box 8430, Omaha, Nebraska 68103-0430.
3
<PAGE>
- -----------------------------------------------------------
THIS PROSPECTUS MAY ONLY BE USED TO OFFER THE POLICY WHERE THE POLICY MAY
LAWFULLY BE SOLD. NO ONE IS AUTHORIZED TO GIVE INFORMATION OR MAKE
REPRESENTATIONS ABOUT THE POLICY THAT ISN'T IN THE PROSPECTUS; IF ANYONE DOES
SO, YOU SHOULD NOT RELY UPON IT AS BEING ACCURATE OR ADEQUATE.
THIS PROSPECTUS GENERALLY DESCRIBES ONLY THE VARIABLE INVESTMENT OPTIONS,
EXCEPT WHEN THE FIXED RATE OPTIONS ARE SPECIFICALLY MENTIONED.
4
<PAGE>
- -------------------------------------------------------------------
INTRODUCTION AND SUMMARY
THIS INTRODUCTION AND SUMMARY BRIEFLY NOTES SOME OF THE IMPORTANT THINGS
ABOUT THE POLICY BUT IT IS NOT A COMPLETE DESCRIPTION OF THE POLICY. THE REST OF
THIS PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, AND YOU SHOULD READ THE
ENTIRE PROSPECTUS CAREFULLY.
The Ultra-Access Policy is a contract between you and United of Omaha Life
Insurance Company. The Policy is a variable annuity policy, which means that you
can allocate your purchase payments to up to 30 different variable investment
options, where you can gain or lose money on your investment. The variable
investment options are not direct investments in mutual funds, but are
Subaccounts of the Variable Account. Each Subaccount in turn invests in a
particular investment portfolio. You can also allocate your purchase payment to
three fixed rate options, where we guarantee you will earn a fixed rate of
interest. It is a deferred annuity, which means it has two phases: an
accumulation (or deferral) phase and an annuity payout phase.
During the accumulation phase, any earnings that you leave in the Policy are
not taxed. During this phase you can invest additional money into the Policy,
transfer amounts among the investment options, and withdraw some or all of the
value of your Policy. Some restrictions may apply to transfers (especially to
transfers out of the fixed rate options). Withdrawals may be taxable, and a
penalty tax may apply.
The accumulation phase ends and the annuity payout phase begins on the
Annuity Starting Date that you select. During the annuity payout phase, we will
make periodic payments to you. You can select payments that are guaranteed to
last for your entire life or for some other period. You can select payments that
vary in amount, depending on the investment performance of the portfolios you
pick, or payments that are fixed in amount. Some or all of each payment will be
taxable.
o COMPARISON TO OTHER POLICIES AND INVESTMENTS
COMPARED TO FIXED ANNUITIES. Like fixed-interest annuities, the Policy:
o offers the ability to accumulate capital on a tax-deferred basis;
o offers the ability to have a guaranteed minimum return on your investment
(if you choose a fixed rate option);
o allows you to make partial or full withdrawals from your Policy; and
o can provide annuity payments for the rest of your life or for some other
period.
The Policy is different from fixed-interest annuities in that, to the extent
you select variable investment options, your Accumulation Value will reflect the
investment experience of the selected variable investment options, so you have
both the investment risk and opportunity, not us.
A significant advantage of the Policy is that it provides the
ability to accumulate capital on a tax-deferred basis. The
purchase of a Policy to fund a tax-qualified retirement account
does not provide any additional tax deferred treatment of
earnings beyond the treatment provided by the tax-qualified
retirement plan itself. However, the Policy does provide benefits
such as lifetime income payments, family protection through death
benefits, guaranteed fees, and asset allocation models.
COMPARED TO MUTUAL FUNDS. Although the underlying investment portfolios
operate like mutual funds and have the same investment risk, in many ways the
Policy differs from mutual fund investments. The main differences are:
o The Policy provides a death benefit that could be higher than the
value of the Policy.
o Insurance-related charges not associated with direct mutual fund
investments are deducted from the value of the Policy.
o Federal income tax liability on any earnings generally is deferred
until you receive a distribution from the Policy.
o You can make transfers from one underlying investment portfolio to
another without tax liability.
o Dividends and capital gains distributed by the investment portfolios
are automatically reinvested.
o Withdrawals before age 59 1/2 generally are subject to a 10% federal
tax penalty. Also, Policy earnings that would be treated as capital
gains in a mutual fund are treated as ordinary income when
distributed, although taxation of them is deferred until such earnings
are distributed. Taxable earnings are considered to be paid out first
followed by the return of your purchase payments.
o Most states grant you a short time period to review your Policy and
cancel it. The terms of this "right to examine"
period vary by state (see the cover of your Policy).
o We, not you, own the shares of the underlying investment portfolios.
You have interests in our Subaccounts that invest in the investment
portfolios that you select.
5
<PAGE>
o HOW THE POLICY OPERATES
The following chart summarizes how the Policy operates and includes a
summary of expenses. For more information, refer to specific sections of
this Prospectus.
--------------------------------------------------
PURCHASE PAYMENT FLOW CHART
--------------------------------------------------
PURCHASE PAYMENTS
o Minimum initial purchase payment is $5,000
($2,000 if you elect to make electronic funds
transfer payments of at least $100 per month, or
quarterly, semiannual or annual purchase payment
equivalents).
o Minimum additional purchase payment is $500.
o No additional Purchase Payments will be
accepted after earlier of the Annuity
Starting Date or your 88th birthday.
--------------------------------------------------
------------------------------------------------------------------
DEDUCTIONS BEFORE ALLOCATING PURCHASE PAYMENTS
In some states we are required to pay premium taxes, which may be up
to 3.5% of the purchase payment you make. The amount of premium tax we
are required to pay in your state may be deducted from your purchase
payment or may be deducted upon surrender, upon the death of an Owner,
or at the Annuity Starting Date. The timing of the deduction will
vary in accordance with state law.
------------------------------------------------------------------
-------------------------------------------------------------------------------
INVESTMENT OF PURCHASE PAYMENTS
You direct the allocation of all purchase payments among 30 Subaccounts of
the Variable Account, the fixed account and the systematic transfer
accounts. Each Subaccount invests in a corresponding investment portfolio
of one of the Series Funds.
-------------------------------------------------------------------------------
- -----------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS
o Daily charges deducted from the net assets in the Variable Account equal an
annual rate of:
- 1.40% for our mortality and expense risk;
- 0.20% for our administrative expenses;
o Annual Policy Fee of $30 per year assessed on each Policy anniversary
(waived if Accumulation Value is more than $50,000).
o $10 fee for transfers among the Subaccounts and the fixed account (first 12
transfers per year are free).
o Investment advisory fees and fund expenses are deducted from the assets of
each investment portfolio.
---------------------------------------------------------------------------
6
<PAGE>
-------------------------------------------------------------------------
ACCUMULATION VALUE
o Your Accumulation Value is equal to your purchase payments adjusted
up or down each Business Day to reflect the Subaccounts' investment
experience, earnings on amounts you have invested in the fixed
account and the systematic transfer accounts, charges deducted and
other Policy transactions (such as partial withdrawals).
o Accumulation Value may vary daily. There is no minimum guaranteed
Accumulation Value for the Subaccounts.
o Accumulation Value can be transferred among the Subaccounts and
the fixed account.
o Dollar cost averaging, asset allocation and rebalancing programs
are available.
o Accumulation Value is the starting point for calculating certain
values under the Policy, such as the Cash Surrender Value and the
death benefit amount.
-------------------------------------------------------------------------
7
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
- --------------------------------------------------------- ------------------------------------------------
ACCUMULATION VALUE BENEFITS DEATH BENEFITS
o You can withdraw all or part of the Cash
Surrender Value. o Available as a lump-sum or under a
variety of payment options.
o Fixed and variable annuity payout options are o If you die by accident, you may
also available. receive double the death benefit that
would be paid if death was not by accident
as a result of the accidental death
benefit.*
1 The accidental death benefit may not be
available in all states.
- --------------------------------------------------------- ------------------------------------------------
</TABLE>
o SUMMARY OF CHARGES AND EXPENSES
The following table lists various costs and expenses that you will pay (directly
or indirectly) if you invest in a Policy. In addition to these expenses, in some
states you will pay a premium tax charge.
POLICY OWNER TRANSACTION EXPENSES
o Transfer Fee - First 12 Transfers Per Year: NO FEE
- Over 12 Transfers in One Year: $10 each
VARIABLE ACCOUNT ANNUAL EXPENSES
(deducted daily to equal this annual % of Accumulation Value)
o Mortality and Expense Risk Fees 1.40%
o Administrative Expense Charge 0.20%
TOTAL VARIABLE ACCOUNT ANNUAL EXPENSES 1.60%
OTHER ANNUAL EXPENSES
o Annual Policy Fee $30 Per Year
(waived if Accumulation Value is greater than
$50,000 on the Policy anniversary)
SERIES FUND ANNUAL EXPENSES
o The following table shows the management fees and other expenses
for each investment portfolio for 1999. Expenses could be higher
(or lower) in the future. These expenses may reflect fee waivers
and/or expense reimbursements. Fee waivers and expense
reimbursements can be terminated at any time.
8
<PAGE>
[TO BE ADJUSTED]
<TABLE>
<CAPTION>
Series Fund Annual Expenses1 Management Other Expenses Total Portfolio
(as a percentage of average net assets) Fees ( after Annual Expenses
(after fee expense (after fee waiver
Portfolio: waiver)(a) reimbursement)(a) and expense
reimbursement)(a)
- ------------------------------------------------- ---------------- ---------------- ===================
<S> <C> <C> <C> <C>
Alger American Growth
Alger American Small Capitalization
Deutsche VIT EAFE Equity Index Fund
Deutsche VIT Small Cap Equity Index Fund
Federated Prime Money Fund II (a)
Federated Fund for U.S. Government Securities II (a)
Fidelity VIP II Asset Manager (a)
Fidelity VIP II Contrafund (a)
Fidelity VIP Equity Income (a)
Fidelity VIP II Index 500
MFS Capital Opportunities Series (a)
MFS Emerging Growth Series
MFS Global Governments Series (a)
MFS High Income Series
MFS Research Series
MSDW Emerging Markets Equity (a)
MSDW Fixed Income (a)
Pioneer Equity-Income
Pioneer Growth Shares
Pioneer Fund
Pioneer Midcap Value Fund
Pioneer Real Estate Growth (a)
Scudder VLIF Global Discovery (a), (b)
Scudder VLIF Growth and Income (c)
Scudder VLIF International
T. Rowe Price Equity Income (d)
T. Rowe Price International Stock (d)
T. Rowe Price Limited-Term Bond (d)
T. Rowe Price New America Growth (d)
T. Rowe Price Personal Strategy Balanced (d)
=======================================================================================================
(a) Without fee waiver or expense reimbursement limits the following funds would
have had the charges set forth below:
TOTAL PORTFOLIO
PORTFOLIO MANAGEMENT FEES OTHER EXPENSES ANNUAL EXPENSES
--------------------------------------
------------------ --------------- ===================
Federated Prime Money Fund II
Federated Fund for U.S. Government
Securities II
Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund
Fidelity VIP Equity Income
Fidelity VIP II Index 500
MFS Capital Opportunities Series
MFS Global Governments Series
MFS High Income Series
MSDW Emerging Markets Equity
MSDW Fixed Income
Pioneer Real Estate Growth
Scudder VLIF Global Discovery
-------------------------------------- ------------------ --------------- ===================
(b) Other Expenses include a 0.25% 12b-1 fee assessed for payment of
distribution administration expenses.
(c) Other Expenses include a 0.23% 12b-1 fee assessed for payment of
distribution administration expenses.
(d) T. Rowe Price Funds do not itemize management fees and other expenses.
=======================================================================================================
</TABLE>
1 The fee and expense data regarding each Series Fund, which are fees and
expenses for 1999, was provided to United of Omaha by the Series Fund. The
Series Funds are not affiliated with United of Omaha. We have not independently
verified these figures.
9
<PAGE>
o EXAMPLES OF EXPENSES
The following tables contain examples of the overall expenses you would pay,
in different situations, over different time periods. These examples are based
on certain assumptions, so your actual expenses will, in all likelihood, be
different. In addition, the examples do not reflect any premium tax charges,
which apply in some states. These examples can help you compare the expenses of
the Policy with expenses of other variable annuity policies.
<PAGE>
- ------------------------------------
Examples2 Policy is surrendered,
An Owner would pay the following annuitized, or continued
expenses on a $1,000 investment, in force at end of the
assuming a 5% annual return on
assets if: time period.
- ------------------------------------ ----- ----- ------ ======
Portfolio 1Yr 3Yr 5Yr 10Yr
------------------------------------ ----- ----- ------ ======
Alger American Growth
Alger American Small Capitalization
- ------------------------------------ ----- ---- ------ ------
Deutsche VIT EAFE Equity Index Fund
Deutsche VIT Small Cap Equity
Index Fund
- ------------------------------------ ----- ---- ------ ------
Federated Prime Money Fund II
Federated Fund for U.S. Government
Securities II
- ------------------------------------ ----- ---- ------ ------
Fidelity VIP II Asset Manager
Fidelity VIP II Contrafund
Fidelity VIP Equity Income
Fidelity VIP II Index 500
- ------------------------------------ ----- ---- ------ ------
MFS Emerging Growth Series
MFS High Income Series
MFS Research Series
MFS Capital Opportunities Series
MFS Global Governments Series
- ------------------------------------ ----- ---- ------ ------
MSDW Emerging Markets Equity
MSDW Fixed Income
- ------------------------------------ ----- ---- ------ ------
Pioneer Midcap Value Fund
Pioneer Real Estate Growth
Pioneer Equity-Income
Pioneer Growth Shares
Pioneer Fund
- ------------------------------------ ----- ---- ------ ------
Scudder VLIF Global Discovery
Scudder VLIF Growth & Income
Scudder VLIF International
- ------------------------------------ ----- ---- ------ ------
T. Rowe Price Equity Income
T. Rowe Price International Stock
T. Rowe Price Limited-Term Bond
T. Rowe Price New America Growth
T. Rowe Price Personal Strategy
Balanced
- ------------------------------------ ----- ---- ------ ------
These examples should not be considered representations of past or future
expenses. Actual expenses paid may be greater than or less than those shown,
subject to the guarantees in the Policy. The assumed 5% annual rate of return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than this assumed rate.
2 The $30 annual Policy Fee is reflected as a daily 0.10% charge in these
examples, based on an average Accumulation Value of $30,000.
For more detailed information about the Policy,
please read the rest of this Prospectus and the Policy.
10
<PAGE>
FINANCIAL STATEMENTS
The Financial Statements for United of Omaha and the Variable Account and
the related independent auditor's reports are contained in the Statement of
Additional Information. (See the cover page on how to get a copy.) At December
31, 1999, net assets of the Subaccounts were represented by the following
Accumulation Unit alues and Accumulation Units. This information should be read
in conjunction with the Variable Account's financial statements and related
notes included in the .
<TABLE>
<CAPTION>
Accumulation Unit Accumulation Unit Number of
Subaccount Value on Value at End of Accumulation Units
(Date of Inception) Commencement Date Year at End of Year**
($)* (December 31) (December 31)
($)*
- ------------------------------------------- -------- --------------------- ---------------------
<S> <C> <C> <C>
Alger American Growth (6/5/95) 10.
1998..................................... 23.759 2,064,701
1999.....................................
Alger American Small Capitalization 10.
(6/5/95)
1998..................................... 15.638. 2,138,203
1999.....................................
Deutsche VIT EAFE Equity Index Fund
1999.....................................
Deutsche VIT Small Cap Equity Index Fund
1999.....................................
Federated Prime Money Fund II (6/5/95) 1.
1998..................................... 1.138 34,414,986
1999.....................................
Federated Fund for U.S. Government 10.
Securities II (6/5/95)
1998..................................... 12.417 2,487,692
1999.....................................
Fidelity VIP II Asset Manager: Growth 10.
(6/5/95)
1998..................................... 19.167 2,875,591
1999.....................................
Fidelity VIP II Contrafund (6/5/95) 10.
1998..................................... 22.162 3,173,298
1999.....................................
Fidelity VIP Equity Income (6/5/95) 10.
1998..................................... 18.27 3,996,092
1999.....................................
Fidelity VIP II Index 500 (5/1/97) 10.
1998..................................... 15.425 2,150,193
1999.....................................
MFS Emerging Growth Series (6/5/95) 10.
1998..................................... 21.521 3,084,172
1999.....................................
MFS High Income Series (6/5/95) 10.
1998..................................... 12.782 2,002,534
1999.....................................
MFS Research Series (6/5/95) 10.
1998.....................................8 19.231 2,811,129
1999.....................................
MFS Capital Opportunities Series (5/1/97) 10.
1998..................................... 15.528 1,117,680
1999.....................................
MFS Global Governments Series (6/5/95) 10.
1997..................................... 10.963 1,444,757
1998.....................................
MSDW Emerging Markets Equity 10.
(5/1/98)
1998 7.002 14,713
MSDW Fixed Income (5/1/98) 10.
1998 10.462 80,837
Pioneer Midcap Value Fund(5/1/97) 10.
1998..................................... 11.156 722,689
1999.....................................
Pioneer Equity-Income
1999.....................................
Pioneer Growth Shares
1999.....................................
Pioneer Fund
1999.....................................
Pioneer Real Estate Growth (5/1/97) 10.
1998..................................... 9.818 650,669
1999.....................................
Scudder VLIF Global Discovery (5/1/97) 10.
1998..................................... 13.17 300,000
1999.....................................
Scudder VLIF Growth and Income (5/1/97) 10.
1998..................................... 12.847 1,075,906
1999.....................................
Scudder VLIF International (6/5/95) 10.
1998..................................... 15.223 2,455,634
1999.....................................
T.Rowe Price Equity Income (6/5/95) 10.
1998..................................... 18.839 4,407,085
1999.....................................
T.Rowe Price International (6/5/95) 10.
1998..................................... 13.964 2,966,530
1999.....................................
T.Rowe Price Limited-Term Bond (6/5/95) 10.
1998..................................... 11.828 2,346,553
1999.....................................
T.Rowe Price New America Growth (6/5/95) 10.
1998..................................... 21.712 1,914,746
1999.....................................
T.Rowe Price Personal Strategy Balanced 10.
(6/5/95)
1998..................................... 16.755 3,090,073
1999.....................................
* Accumulation Unit alues are rounded to the nearest hundredth of a cent.
** Number of Accumulation Units is rounded to the nearest unit.
</TABLE>
12
<PAGE>
- -----------------------------------------------------------
ABOUT US
We are United of Omaha Life Insurance Company, a stock life insurance
company organized under the laws of the State of Nebraska in 1926. We are a
wholly-owned subsidiary of Mutual of Omaha Insurance Company. The Mutual of
Omaha family of companies provide life, health, disability, home and auto
insurance, trust services, and investment sales and brokerage services. The
Mutual of Omaha Companies have a proud tradition of supporting environmental
education, beginning with its long-running MUTUAL OF OMAHA'S WILD KINGDOM
television program, and continued through its Wildlife Heritage Trust. United of
Omaha is principally engaged in the business of issuing group and individual
life insurance and annuity policies, and group accident and health insurance in
all states (except New York), and the District of Columbia. As of December 31,
1999, United of Omaha had assets of over $10 billion.
We may from time to time publish (in advertisements, sales literature and
reports to Policy Owners) the ratings and other information assigned to us by
one or more independent rating organizations such as A.M. Best Company, Moody's
Investors Service, Inc., Standard & Poor's, and Duff & Phelps Credit Rating
Company. The purpose of the ratings is to reflect our financial strength and/or
claims-paying ability. The ratings do not bear on the investment performance of
assets held in the Variable Account or on the safety or the degree of risk
associated with an investment in the Variable Account.
13
<PAGE>
- -----------------------------------------------------------
INVESTMENT OPTIONS
The investment results of each investment portfolio, whose
investment objectives are described below, are likely to
differ significantly. You should consider carefully, and on
a continuing basis, which portfolios or combination of
investment portfolios and fixed rate options best suits your
long-term investment objectives.
We recognize you have very personal goals and investment strategies. The
Policy allows you to choose from a wide array of investment options --- each
chosen for its potential to meet specific investment objectives. You may
allocate all or a part of your purchase payments to one or a combination of the
variable investment options or the fixed rate options (although allocations to
the systematic transfer accounts are limited to initial purchase payments and
rollovers only). Allocations must be in whole percentages and total 100%.
You can choose among 30 variable investment options and three fixed rate
options.
o VARIABLE INVESTMENT OPTIONS
The investment portfolios are not available for purchase
directly by the general public, and are not the same as
other mutual fund portfolios with very similar or nearly
identical names that are sold directly to the public.
However, the investment objectives and policies of certain
portfolios available under the Policy are very similar to
the investment objectives and policies of other portfolios
that are or may be managed by the same investment adviser or
manager. Nevertheless, the investment performance and
results of the portfolios available under the Policy may be
lower, or higher, than the investment results of such other
(publicly available) portfolios. There can be no assurance,
and no representation is made, that the investment results
of any of the portfolios available under the Policy will be
comparable to the investment results of any other mutual
fund portfolio, even if the other portfolio has the same
investment adviser or manager and the same investment
objectives and policies, and a very similar name.
For detailed information about any portfolio, including
its performance history, refer to the prospectus for that
portfolio.
With the Policy's variable investment options, you bear the investment
risk, not us. You control the amount of money you invest in each of the
investment portfolios, and you bear the risk those portfolios will perform worse
than you expect.
The Variable Account, United of Omaha Separate Account C, provides you
with 30 variable investment options in the form of Series Fund investment
portfolios. Each Series Fund is an open-end investment management company. When
you allocate Policy funds to a Series Fund portfolio, those funds are placed in
a Subaccount of the Variable Account corresponding to that portfolio, and the
Subaccount in turn invests in the portfolio. The Accumulation Value of your
policy depends directly on the investment performance of the portfolios that you
select.
The Variable Account is registered with the SEC as a unit investment trust.
However, the SEC does not supervise the management or the investment practices
or policies of the Variable Account or United of Omaha. The Variable Account was
established as a separate investment account of United of Omaha under Nebraska
law on December 1, 1993. Under Nebraska law, we own the Variable Account assets,
but they are held separately from our other assets and are not charged with any
liability or credited with any gain of business unrelated to the Variable
Account. Any and all distributions made by the Series Funds with respect to the
shares held by the Variable Account will be reinvested in additional shares at
net asset value. We are responsible to you for meeting the obligations of the
Policy, but we do not guarantee the investment performance of any of the
investment portfolios. We do not make any representations about their future
performance. THE PORTFOLIOS MAY FAIL TO MEET THEIR OBJECTIVES, AND THEY COULD GO
DOWN IN VALUE. Each portfolio operates as a separate investment fund, and the
income or losses of one portfolio generally have no effect on the investment
performance of any other portfolio. Complete descriptions of each portfolio's
investment objectives and restrictions and other material information related to
an investment in the portfolio are contained in the prospectuses for each of the
Series Funds which accompany this Prospectus.
14
<PAGE>
<TABLE>
<CAPTION>
- ---------------- ---------------------------------------------------- ------------------------------------
Variable Investment Options
Asset under United of Omaha Separate Account C Objective
Category * (Series Fund - Portfolio)
- ---------------- -----------------------------------------------------------------------------------------
Investments
- ---------------- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
MFS Variable Insurance Trust -
MFS EMERGING GROWTH SERIES PORTFOLIO (5) Long-term capital appreciation.
AGGRESSIVE
GROWTH
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of emerging growth companies
- ------------------- ---------------------------------------------------- ------------------------------------
Alger American Fund -
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO (1) Long-term capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small capitalization companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Deutsche Asset Management VIT Funds -
DEUTSCHE VIT SMALL CAP EQUITY INDEX FUND
PORTFOLIO (12) Long-term capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small capitalization companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust - Long-term capital appreciation
REAL ESTATE PIONEER REAL ESTATE GROWTH PORTFOLIO (8) with current income.
- ------------------- ---------------------------------------------------- ------------------------------------
Real estate investment trusts (REITs) and other
real estate industry companies.
- ------------------- -----------------------------------------------------------------------------------------
T. Rowe Price International Series, Inc. -
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO (10) Long-term capital appreciation.
INTERNATIONAL
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Scudder Variable Life Investment Fund -
SCUDDER VLIF INTERNATIONAL PORTFOLIO (9) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Scudder Variable Life Investment Fund - Long-term capital appreciation.
SCUDDER VLIF GLOBAL DISCOVERY PORTFOLIO (9)
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small U.S. and non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc. -
MSDW EMERGING MARKETS EQUITY PORTFOLIO (6) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Equity securities of growth companies located in "emerging" foreign
countries (countries whose economies are less
economically mature than those of developed
nations).
- ------------------- ---------------------------------------------------- ------------------------------------
Deutsche Asset Management VIT Funds - Long-term capital appreciation
DEUTSCHE VIT EAFE EQUITY INDEX FUND PORTFOLIO (12)
- ------------------- -----------------------------------------------------------------------------------------
Common stock of non-U.S. companies.
- ------------------- -----------------------------------------------------------------------------------------
MFS Variable Insurance Trust - High current income.
BOND - MFS HIGH INCOME SERIES PORTFOLIO (5)
HIGH YIELD
- ------------------- ---------------------------------------------------- ------------------------------------
High yield, lower-rated bonds or comparable
unrated securities.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. -
T. ROWE PRICE NEW AMERICAN GROWTH PORTFOLIO (11) Long-term capital appreciation.
GROWTH
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of U.S. growth companies.
- ------------------- -----------------------------------------------------------------------------------------
15
<PAGE>
MFS Variable Insurance Trust -
MFS RESEARCH SERIES PORTFOLIO (5)
- ------------------- ---------------------------------------------------- ------------------------------------
Long-term capital
appreciation and future income.
- ------------------- -----------------------------------------------------------------------------------------
Common stock or comparable securities of
companies expected to possess better-than-average
prospects for long-term growth.
- ------------------- ---------------------------------------------------- ------------------------------------
Fidelity Variable Insurance Products Fund II -
FIDELITY VIP II CONTRAFUND PORTFOLIO (3) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Common Stock of companies, foreign and domestic,
which the fund manager believes are currently
undervalued.
- ------------------- ---------------------------------------------------- ------------------------------------
Alger American Fund -
ALGER AMERICAN GROWTH PORTFOLIO (1) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Equity securities of companies with total market
capitalization of $1 billion or more.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust -
PIONEER MIDCAP VALUE FUND PORTFOLIO (8) Long-term capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Securities of mid-size companies, which the fund
manager believes are currently undervalued.
- ------------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust -
MFS CAPITAL OPPORTUNITIES SERIES PORTFOLIO (5) Capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock and related securities of foreign
and domestic companies.
- ------------------- ---------------------------------------------------- ------------------------------------
PIONEER VARIABLE CONTRACTS TRUST - Capital appreciation.
PIONEER GROWTH SHARES PORTFOLIO(8)
- ------------------- -----------------------------------------------------------------------------------------
Common stock and equity securities of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Fidelity Variable Insurance Products Fund II - Capital appreciation
FIDELITY VIP II INDEX 500 PORTFOLIO (3) with current income.
GROWTH &
INCOME
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of companies that comprise the S & P
500 index.
- ------------------- -----------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund - Long-term capital appreciation
SCUDDER VLIF GROWTH AND INCOME PORTFOLIO (9) with current income.
- ------------------- -----------------------------------------------------------------------------------------
Common and preferred stock, and securities
convertible into common stock, of companies that
offer the prospect for growth while paying
current dividends.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust -
PIONEER FUND PORTFOLIO (8) Current income and capital
appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Equity securities, primarily of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. - Dividend income and long-term
T. ROWE PRICE EQUITY INCOME PORTFOLIO (11) capital appreciation.
16
<PAGE>
EQUITY
INCOME
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of established companies that pay
dividends.
- ------------------- -----------------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund - Dividend income and capital
FIDELITY VIP EQUITY INCOME PORTFOLIO (3) appreciation surpassing the S&P 500 average.
- ------------------- ---------------------------------------------------- ------------------------------------
Securities of established companies that produce
income and capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Pioneer Variable Contracts Trust -
PIONEER EQUITY-INCOME PORTFOLIO (8) Current income and long-term
capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Income producing equity securities of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. - (11)
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO Capital appreciation and income.
BALANCED
- ------------------- ---------------------------------------------------- ------------------------------------
Diversified portfolio of stock, bonds and money
market securities.
- ------------------- -----------------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund II -
FIDELITY VIP II ASSET MANAGER PORTFOLIO (3, 4) High total return.
- ------------------- -----------------------------------------------------------------------------------------
Diversified portfolio of domestic and foreign
stock, bonds, short-term and money market
securities.
- ------------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust - Income and capital appreciation.
BOND - MFS GLOBAL GOVERNMENTS SERIES PORTFOLIO (5)
INTERNATIONAL
- ------------------- ---------------------------------------------------- ------------------------------------
Foreign and U.S. government bonds or other debt securities.
- ------------------- ---------------------------------------------------- ------------------------------------
Federated Insurance Series -
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II Current income.
PORTFOLIO (2)
BOND -
DOMESTIC
- ------------------- -----------------------------------------------------------------------------------------
U.S. government securities.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Fixed Income Series, Inc. - Current income.
T. ROWE PRICE LIMITED TERM BOND PORTFOLIO (11)
- ------------------- ---------------------------------------------------- ------------------------------------
Short- and intermediate-term investment grade
debt securities.
- ------------------- -----------------------------------------------------------------------------------------
Current income.
Morgan Stanley Dean Witter Universal Funds, Inc. -
MSDW FIXED INCOME PORTFOLIO (7)
- ------------------- ---------------------------------------------------- ------------------------------------
Diversified portfolio of fixed income securities.
- ------------------- ---------------------------------------------------- ------------------------------------
Federated Insurance Series - Current income.
MONEY MARKET FEDERATED PRIME MONEY FUND II PORTFOLIO (2)
- ------------------- -----------------------------------------------------------------------------------------
High quality fixed income securities maturing in
13 months or less.
- ------------------- -----------------------------------------------------------------------------------------
</TABLE>
(*) Asset Category designations are our own to help you gain insight into each
portfolio's intended objectives, but do not assure any portfolio will perform
consistent with the categorization. INFORMATION CONTAINED IN THE SERIES FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN ANY SUBACCOUNT OF THE
VARIABLE ACCOUNT.
17
<PAGE>
INVESTMENT ADVISERS OF THE SERIES FUNDS:
We do not assure that any portfolio will achieve its stated
objective. Detailed information, including a description of
each portfolio's investment objective and policies, a
description of risks involved in investing in each of the
portfolios, and each portfolio's fees and expenses, is
contained in the prospectuses for the Series Funds, current
copies of which accompany this Prospectus. None of these
portfolios are insured or guaranteed by the U.S. government.
(1) Fred Alger Management, Inc.
(2) Federated Investment Management .
(3) Fidelity Management & Research Company.
(4) Fidelity Investment Management and Research (U.K.) Inc., and Fidelity
Management and Research Far East Inc., regarding research and investment
recommendations with respect to companies based outside the United
States.
(5) Massachusetts Financial Services Company.
(6) Morgan Stanley Dean Witter Asset Management, Inc.
(7) Miller Anderson & Sherrerd, LLP.
(8) Pioneer Investment Management.
(9) Scudder Kemper Investments, Inc.
(10)Rowe Price-Fleming International, Inc., a joint venture
between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited.
(11)T. Rowe Price Associates, Inc.
(12)Bankers Trust Company.
The investment advisers of the Series Funds and the investment portfolios
are described in greater detail in the prospectuses for the Series Funds.
The performance history of each Variable Account Subaccount, which gives you
an indication of how each portfolio has performed and the effect of Policy
expenses on that performance, is discussed in the SAI. You may obtain a copy
from us. The performance history of each portfolio is more fully described in
the Series Fund prospectus for each portfolio. Past performance may not be an
indication of future performance.
Each investment portfolio is designed to provide an investment vehicle for
variable annuity and variable life insurance contracts issued by various
insurance companies. For more information about the risks associated with the
use of the same funding vehicle for both variable annuity and variable life
insurance contracts of various insurance companies, see the prospectuses of the
Series Fund which accompany this Prospectus.
We may receive revenues from the investment portfolios or their investment
advisers. These revenues may depend on the amount our Variable Account invests
in the Series Fund and/or any portfolio thereof.
o ADDING, DELETING, OR SUBSTITUTING VARIABLE INVESTMENTS
We do not control the Series Funds, so we cannot guarantee that any of the
portfolios will always be available. We retain the right to change the
investments of the Variable Account.
New portfolios may be added, or existing portfolios eliminated, when, in our
sole discretion, conditions warrant such a change. If a portfolio is eliminated,
we will ask you to reallocate any amount in the eliminated portfolio. If you do
not reallocate these amounts, we will automatically reinvest them in the
Federated Prime Money Fund II Portfolio.
If we make a portfolio substitution or change, we may change the Policy to
reflect the substitution or change. Our Variable Account may be (i) operated as
an investment management company or any other form permitted by law, (ii)
deregistered with the SEC if registration is no longer required or (iii)
combined with one or more other separate accounts. To the extent permitted by
law, we also may transfer assets of the Variable Account to other accounts.
18
<PAGE>
o FIXED RATE OPTIONS
There are three fixed rate options: a fixed account and two systematic
transfer accounts. With fixed rate options, we bear the investment risk. This
means we guarantee that you will earn a minimum interest rate. This minimum
interest rate is guaranteed to yield at least 3% per year, compounded annually.
We may declare a higher current interest rate. Whatever interest rate we declare
will be guaranteed for at least one year. We have full control over how assets
allocated to fixed rate options are invested, and we bear the risk that those
assets will perform better or worse than the amount of interest we have
declared. The focus of this prospectus is to disclose the Variable Account
aspects of the Policy. For additional details regarding the fixed investment
options, see the Policy.
o Systematic Transfer Accounts
All amounts allocated to the fixed rate options become part
of the general account assets of United of Omaha. Interests
in the general account have not been registered with the SEC
and are not subject to the SEC's regulation, nor is the
general account registered as an investment company with the
SEC. Therefore, SEC staff have not reviewed the fixed
account disclosures in this Prospectus.
A systematic transfer account is the fixed rate option used if you elect
(when you buy the Policy) to participate in the systematic transfer enrollment
program ("STEP program"). You may only elect one: the four-month or 12-month
account. The STEP program is used to automatically transfer a predetermined
dollar amount on a monthly basis to any of the Subaccounts you choose. You
cannot transfer amounts from the STEP program to the fixed account. The
allocation and the predetermined dollar amount may not be changed once the STEP
Program is elected. You must have a minimum of $5,000 in your systematic
transfer account in order to participate in the STEP program. No additional
funds may be allocated to a systematic transfer account after you purchase the
Policy (except for funds designated to be transferred into the Policy pursuant
to an Internal Revenue Code Section 1035 exchange or an IRA rollover or
transfer).
Funds allocated to the systematic transfer account must be completely
transferred to the Variable Account in either four or 12 months (whichever you
choose). We may credit a different rate of interest to the four-month account
than to the 12-month account. Transfers from the systematic transfer accounts do
not count toward the 12 free transfers allowed each Policy Year. You may not
transfer funds into any systematic transfer account. The systematic transfer
accounts may not be used to practice "market timing", and we may disallow
transactions involving this account on that basis.
FIXED ACCOUNT AND SYSTEMATIC TRANSFER ACCOUNTS
We have sole discretion to set current interest rates of
fixed rate options. We do not guarantee the level of future
interest rates of fixed rate options, except that they will
not be less than the minimum interest rate which is
guaranteed to yield 3% per year (compounded annually).
The fixed account and the systematic transfer accounts are part of our
general account assets. Our general account includes all our assets except those
segregated in the Variable Account or in any other separate investment account.
You may allocate purchase payments to the fixed account or transfer amounts from
the Variable Account to the fixed account. Instead of you bearing the investment
risk, as you do with investments allocated to the Variable Account, we bear the
full investment risk for investments in the fixed rate options. We have sole
discretion to invest the assets of our general account, subject to applicable
law.
We guarantee that money invested in any fixed rate option will earn an
effective rate of interest which will yield at least 3% per year, compounded
annually. However, we have complete discretion to declare interest in excess of
the guaranteed minimum rate, or not to declare any excess interest. Once
declared, we guarantee that any rate will last for at least one year. Different
rates of interest may be credited to each systematic transfer account and to the
Fixed Account.
19
<PAGE>
We guarantee that, at any time prior to the Annuity Starting Date or the
death of the Owner, the amount in your fixed account or systematic transfer
account will not be less than the amount of purchase payment allocated or
Accumulation Value transferred to the fixed account or systematic transfer
account, plus interest at a rate which is guaranteed to yield 3% per year, plus
excess interest (if any) credited to amounts in the fixed account or systematic
transfer account, less premium taxes or other taxes allocable to the fixed
account or systematic transfer account, and less any amounts deducted from the
fixed account or systematic transfer account in connection with partial
withdrawals or transfers to the Variable Account.
o TRANSFERS
The Policy is designed for long-term investment, not for active trading or
"market timing." Excessive transfers could harm other Policy Owners by having a
detrimental effect on portfolio management. Subject to restrictions during the
"right to examine period" and prior to the Annuity Starting Date, you may
transfer Policy value from one Subaccount to another, from the Variable Account
to the fixed account, or from the fixed account to any Subaccount, as often as
you like, subject to these rules:
TRANSFER RULES:
o We must receive notice of the transfer --- either Written Notice or an
authorized telephone transaction.
o The transferred amount must be at least $500, or the entire Subaccount
value if it is less. (If the Subaccount value remaining after a transfer
will be less than $500, we will include that amount as part of the
transfer.)
o The first 12 transfers each Policy Year from Subaccounts are free. The rest
cost $10 each. This fee is deducted from the amount transferred. You cannot
make more than 24 transfers in a Policy Year.
o A transfer from the fixed account: may be made only once each Policy Year;
- - is free;
- - may be delayed up to six months (30 days in West Virginia);
- - does not count toward the 12 free transfer limit; and
- - is limited during any Policy Year to 10% of the fixed account value on
the date of the initial transfer during that year.
o We reserve the right to limit transfers, or to modify transfer privileges.
o If the Accumulation Value in any Subaccount falls below $500, we may
transfer the remaining balance, without charge, to the Federated Prime
Money Fund II Portfolio.
o Transfers made pursuant to participation in the dollar cost averaging,
STEP, asset allocation or rebalancing programs are not subject to the
amount or timing limitations of these rules, nor are they subject to a
transfer fee. See the sections of this Prospectus describing those programs
for the rules of each program.
o If you transfer amounts from the fixed account to the Variable Account, we
can restrict or limit any transfer of those amounts back to the fixed
account.
THIRD-PARTY TRANSFERS. Where permitted and subject to our rules, we may
accept your authorization to have a third party exercise transfers on your
behalf. We can suspend or cancel our acceptance of this authorization at any
time. An example of a reason might be if the third party is practicing "market
timing." We can also limit the availability of Subaccounts and the fixed account
for transfers by the third party.
o DOLLAR COST AVERAGING
The dollar cost averaging and the STEP program are intended
to result in the purchase of more Accumulation Units when
the Accumulation Unit value is low, and fewer units when the
Accumulation Unit value is high. However, there is no
guarantee that either program will result in higher Policy
value or otherwise be successful.
20
<PAGE>
Our dollar cost averaging program allows you to automatically transfer, on a
periodic basis, a set dollar amount or percentage from one Subaccount or the
fixed account to any Subaccount(s). You can begin dollar cost averaging when you
purchase the Policy or later. You can increase or decrease the amount or
percentage of transfers or discontinue the program at any time. Rules of the
dollar cost averaging program are:
DOLLAR COST AVERAGING RULES:
o The dollar cost averaging program is free.
o We must receive notice of your election and any changed instruction ---
either Written Notice or an authorized telephone transaction.
o Automatic transfers can occur monthly, quarterly, semi-annually, or
annually.
o There must be at least $5,000 of Accumulation Value in the applicable
Subaccount or fixed account from which transfers are being made to begin
dollar cost averaging.
o Amount of each transfer must be at least $100, and must be $50 per
Subaccount.
o If transfers are made from the fixed account, the maximum annual
transfer amount is 10% of that account's value at the time of the first
dollar cost averaging transfer during that year. There is no maximum
transfer amount limitation out of the Subaccounts.
o Dollar cost averaging program transfers cannot begin before the end
of a Policy's "right to examine"period.
o You may specify that transfers be made on the 1st through the 28th day of
the month. Transfers will be made on the date you specify (or if that is
not a Business Day, then on the next Business Day). If you do not select
a date, the program will begin on the next Policy monthly anniversary
following the date the Policy's "right to examine" period ends.
o You can limit the number of transfers to be made, in which case the program
will end when that number has been made. Otherwise, the program will
terminate when the amount remaining in the applicable Subaccount or the
fixed account is less than $500.
o SYSTEMATIC TRANSFER ENROLLMENT
PROGRAM ("STEP PROGRAM")
The STEP program allows you to automatically transfer funds on a monthly
basis from the systematic transfer account to any other Subaccount. It allows
you to use a dollar cost averaging concept to move your initial purchase payment
from a fixed interest rate account into variable investment options within
either a four-month or a 12-month period, depending upon which time period you
elect. You cannot transfer amounts from the STEP program to the fixed account.
If you want to move funds from a fixed interest rate account into variable
investment options over a longer time period using the same concept, then you
should use the dollar cost averaging program. We may credit a different interest
rate on amounts in a systematic transfer account than on amounts in the fixed
account.
STEP PROGRAM RULES:
You cannot transfer amounts from the STEP program to the
fixed account.
o The STEP program is free.
o Can only be selected on the initial application.
o Must have at least $5,000 in a systematic transfer account to begin the
program.
o You may only participate in one systematic transfer account, but not both.
o Amount transferred each month must be at least an amount sufficient to
transfer the entire amount out of the systematic transfer account in
either four or 12 equal monthly payments.
o Transfers must be at least $50 per Subaccount.
o No new purchase payments may be allocated to this account after you
purchase the Policy, except for funds designated in the application to be
transferred into the Policy pursuant to an Internal Revenue Code Section
1035 exchange or an IRA rollover or transfer.
o Upon receipt of funds by Section 1035 exchange, the four or 12 monthly
payment requirement is restarted and the minimum monthly transfer amount
is recalculated.
o Cannot begin before the end of the Policy's "right to examine" period.
o You may specify transfers be made on the 1st through the 28th day of the
month. Transfers will be made on the date you specify (or if that is not a
Business Day, the transfers will be made on the next Business Day). If you
do not select a start date, the STEP program will begin on the next Policy
Monthly Anniversary following the date the Policy's "right to examine"
period ends.
o No transfers may be made into the systematic transfer account.
o All funds remaining in the systematic transfer account on the date of the
last monthly transfer will be transferred to the Subaccounts in a pro
rata amount consistent with your allocation instructions.
o The STEP program ends the earlier of the date when all amounts in the
systematic transfer account have been transferred or the date of the last
monthly STEP program transfer.
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<PAGE>
o ASSET ALLOCATION PROGRAM
The asset allocation program does not protect against a
loss, and otherwise is not guaranteed to achieve your goal.
The asset allocation program allows you to allocate purchase payments and
policy value among designated Subaccounts and the fixed account. You can specify
your own desired allocation instructions, or you can choose to use one of the
five asset allocation models outlined below. The fixed rate options are not
included in the models listed below.
ASSET ALLOCATION PROGRAM RULES:
o The asset allocation program is free.
o You must request the asset allocation program in the Policy application or
by Written Notice or an authorized telephone transaction. Changed
instructions, or a request to end this program, must also be by Written
Notice or authorized telephone transaction.
o You must have at least $10,000 of Accumulation Value to begin the asset
allocation program.
o Transfers made pursuant to this program do not count in determining whether
a transfer fee applies.
o Asset allocation and STEP programs cannot run at the same time.
o The asset allocation program will automatically rebalance your accumulation
Value in the Subaccounts to the model you select on an annual basis, unless
you designate semiannual or quarterly rebalancing.
The asset allocation program does not protect against a loss, and
otherwise is not guaranteed to achieve your goal.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ASSET ALLOCATION MODELS
CURRENT ALLOCATIONS*
- ------------------------------------ ------------- ------------- ----------- -------------- ------------
Portfolio Principal Portfolio Income Capital Equity
Conserver Protector Builder Accumulator Maximizer
(conservative)(moderately (moderate) (moderately (aggressive)
conservative) aggressive)
% % % % %
- ------------------------------------ ------------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
MFS Emerging Growth Series 3 5
Alger American Small Capitalization 5 10
Deutsche Small Cap Equity Index 3 4 6 7
VIT Fund
Pioneer Real Estate Growth 4 5 6
T.Rowe Price International Stock 6 7 12
Scudder VLIF International 15
MFS High Income Series 5 5 5
T.Rowe Price New America Growth 5 7 9
MFS Capital Opportunities Series 4 8 10 10 9
Fidelity VIP II Index 500 5 10 10 11 12
Pioneer Equity Income 7 10 10 8 6
Fidelity VIP Equity Income 8 5 9 11
MFS Global Governments Series 5 6 6
T.Rowe Price Limited-Term Bond 43 32 20 15
MSDW Fixed Income 6
Federated Prime Money Fund II 20 13 5
- --------------------------------------------------------------------------------
* WE RETAIN THE RIGHT TO CHANGE ALLOCATION MODEL ALLOCATIONS OR TO SUBSTITUTE
PORTFOLIO OPTIONS THEREIN IN FUTURE UPDATED PROSPECTUSES. AMOUNTS YOU ALLOCATE
TO A MODEL PORTFOLIO WILL BE INVESTED PURSUANT TO THE THEN CURRENT PORTFOLIO
ALLOCATIONS FOR THAT MODEL.
- --------------------------------------------------------------------------------
</TABLE>
We use Ibbotson Associates, Inc. to develop the asset allocation model
allocations. They are an investment consulting firm specializing in applying
investment theories and empirical findings (such as historical return data
collected on the investment portfolios) to quantify the benefits of
diversification for particular investment profiles.
22
<PAGE>
o REBALANCING PROGRAM
The rebalancing program does not protect against a loss, and
otherwise is not guaranteed to achieve your goal
The rebalancing program allows you to rebalance your Accumulation Value among
designated Subaccounts and the fixed account pursuant to your instructions on a
quarterly, semiannual, or annual basis. Rebalancing utilizes your allocation
instructions in effect at the end of any STEP program period (so never
rebalances any assets to the systematic transfer account). You may change your
rebalancing allocation instructions at any time.
Any change will be effective when the next rebalancing occurs.
REBALANCING PROGRAM RULES:
o The rebalancing program is free.
o You must request the rebalancing program and give us your rebalancing
instructions by Written Notice. Changed instructions, or a request to
end this program must also be by Written Notice.
o You must have at least $10,000 of Policy Accumulation Value to begin the
rebalancing program.
o You may have rebalancing occur quarterly, semiannually or annually.
o Transfers made pursuant to this program do not count in determining whether
a transfer fee applies.
o If you elect the asset allocation program, your Accumulation Value in the
Subaccounts will automatically be rebalanced to the model you select on
an annual basis, unless you elect semiannual or quarterly rebalancing.
The rebalancing program does not protect against a loss and may not achieve your
investment goal.
- ----------------------------------------------------------------------
IMPORTANT POLICY PROVISIONS
The Ultra-Access Policy is a flexible purchase payment variable deferred
annuity policy. A feature of the Policy distinguishing it from non-annuity
investments is its ability to guarantee annuity payments to you for as long as
you live. In addition, if you die before those payments begin, the Policy will
pay a death benefit to your Beneficiary. Some key rights and benefits under the
Policy are summarized in this Prospectus; however, you must refer to the Policy
itself for the actual terms of the Policy. You may obtain a copy of the Policy
from us. The Policy can be purchased as a tax-qualified or nonqualified annuity.
The Policy remains in force until surrendered for its Cash Surrender Value, or
all proceeds have been paid under an annuity payout option or as a death
benefit.
o POLICY APPLICATION AND ISSUANCE
Replacing an existing annuity policy is not always your best
choice. Evaluate any replacement carefully.
To purchase a Policy, you must submit an application and a minimum initial
purchase payment. A Policy usually will be issued only if you are age 0 through
85 (0 through 78 in Pennsylvania). We may reject any application or purchase
payment.
If your application is in good order upon receipt, we will credit your
initial net purchase payment to the Policy's Accumulation Value in accordance
with the "right to examine" rules in your state within two Business Days after
the later of the date we receive your application or your payment. If the
application is incomplete or otherwise not in good order, we will contact you
within five Business Days to explain the delay; at that time we will refund your
initial purchase payment unless you consent to our retaining it to apply it to
your Policy once all Policy issuance requirements are met. The date we credit
your initial net purchase payment to your Policy's Accumulation Value is the
date of issue of the Policy.
You can purchase a tax-qualified policy in connection with a Section 401(a)
pension or profit-sharing plan, a Section 403(b) tax-sheltered annuity or an IRA
or Roth IRA, subject to certain limitations. See the FEDERAL TAX MATTERS section
of this Prospectus for details.
23
<PAGE>
o APPLICATION IN GOOD ORDER. All questions must be answered, but particularly
note these requirements:
- - The Owner's and the Annuitant's full name, Social Security number, and date
of birth must be included.
- - Your purchase payment allocations must be completed, be in whole percentages,
and total 100%.
- - Initial purchase payment must meet minimum purchase payment requirements.
- - Your signature and your agent's signature must be on the application.
- - Identify the type of plan, whether it is nonqualified or qualified.
- - City, state, and date application was signed must be completed.
- - Your agent must be both properly licensed and appointed with us.
o PURCHASE PAYMENT REQUIREMENTS
Your purchase payment checks should be made payable to "United of Omaha Life
Insurance Company" and sent to us. We may postpone crediting any payment made by
check to your Policy's Accumulation Value until the check has been honored by
your bank. Payment by certified check, banker's draft, or cashier's check will
be promptly applied. Under our Electronic Fund Transfer program, you may select
a monthly payment schedule for us to automatically deduct purchase payments from
your bank account or other sources.
INITIAL PURCHASE PAYMENT:
- - The only purchase payment required. All others are optional.
- - Must be at least $5,000; $2,000 if payment is made via our electronic fund
transfer program and you elect to make additional electronic fund transfer
payments of $100 per month, or quarterly, semiannual or annual payment
equivalents. We have the right to change these payment requirements.
ADDITIONAL PURCHASE PAYMENTS:
- - Must be at least $500; $100 if payments are made via our Electronic Fund
Transfer program. We have the right to change these payment requirements.
- - Will not be accepted on or after the sooner of (i) the Policy anniversary
following your 88th birthday (78th birthday in Pennsylvania) or (ii)
your Annuity Starting Date.
o ALLOCATING YOUR PURCHASE PAYMENTS
You must allocate your purchase payments to one or more of the variable
investment or fixed rate options. Initial allocations in your Policy application
will be used for additional purchase payments until you change your allocation.
If you do not specify any allocation, we will not accept your purchase payment.
- - Allocations must be in whole percentages, and total 100%.
- - The minimum allocation amount is $500 ($100 under the electronic fund
transfer program).
- - You may change your allocation by sending us Written Notice or
through an authorized telephone transaction. The change will apply to
payments received on or after the date we receive your Written Notice or
authorized telephone transaction.
- - All purchase payments will be allocated pursuant to your instructions on
record with us, except your initial purchase payment and any additional
purchase payments received during your Policy's "right to examine"
period may be subject to special requirements.
"RIGHT TO EXAMINE" PERIOD ALLOCATIONS:
RETURN OF VALUE STATES. In states that permit us to refund your Accumulation
Value upon your cancellation of the Policy during the "right to examine" period,
we will allocate your initial purchase payment to your selected Subaccounts on
the date of issue of the Policy.
RETURN OF PURCHASE PAYMENT STATES. In states that require us to refund at
least your full purchase payment upon your cancellation of the Policy during the
"right to examine" period, we will hold the portion of your initial purchase
payment allocated to the Variable Account in the Federated Prime Money Fund II
Subaccount for the applicable "right to examine" period specified by the state
of issue, plus five days from the date we mail the Policy to you. (Since the
"right to examine" period is measured from the date you receive the Policy, the
extra five days is to allow for estimated time needed to deliver the Policy.) At
the end of that period, if you decide to keep your Policy, we will invest your
initial purchase payment in the Subaccounts pursuant to your application
instructions. (Any additional purchase payments we receive during the "right to
examine" period plus five days will be allocated in the same manner.)
24
<PAGE>
o ACCUMULATION VALUE
On your Policy's date of issue, the Accumulation Value equals the initial
purchase payment less any charge for applicable premium taxes. On any Business
Day thereafter, the Accumulation Value equals the sum of the values in the
Variable Account and the fixed rate options. The Accumulation Value is expected
to change from day to day, reflecting the expenses and investment experience of
the selected investment portfolios (and interest earned in the fixed rate
options) as well as the Policy's deductions for charges.
o VARIABLE ACCOUNT VALUE.
The value in the Variable Account equals the sum of the Accumulation Values
for each Subaccount. The Accumulation Value for each Subaccount equals:
(a) the current number of Accumulation Units in the Subaccount for the
Policy; multiplied by
(b) the current Accumulation Unit value.
A net purchase payment or transfer allocated to a Subaccount is converted
into Accumulation Units by dividing the purchase payment or transfer by the
Accumulation Unit value for the day during which the net purchase payment or
transfer is allocated to the Variable Account. The initial Accumulation Unit
value for each Subaccount was set at $10 when the Subaccount was established
(except it was $1 for the Federated Prime Money Fund II Subaccount). The
Accumulation Unit value may increase or decrease from one day to the next.
The Accumulation Unit value for a Subaccount on any Business Day is
calculated as follows:
(a) The net asset value per share of the applicable investment portfolio
multiplied by the number of shares held in the Subaccount, before the
purchase or redemption of any shares on that date; minus
(b) the cumulative unpaid charge for the mortality and expense risk
charge,and the administrative expense charge; minus
(c) any applicable charge for federal and state income taxes, if any; the
result divided by
(d) the total number of Accumulation Units held in the Subaccount on that
date, before the purchase or redemption of any Accumulation Units on
that day.
Positive investment experience of the applicable portfolio will increase the
Accumulation Unit values and negative investment experience will decrease the
unit values. Expenses and deductions will have a negative effect on unit values.
o FIXED ACCOUNT VALUE.
The Accumulation Value of the fixed account on any Business Day equals:
(a) the Accumulation Value at the end of the preceding Policy Month; plus
(b) any net purchase payments credited since the end of the previous
Policy Month; plus
(c) any transfers from the Subaccounts credited to the fixed account since
the end of the previous Policy Month; minus
(d) any transfers from the fixed account to the Subaccounts since the end
of the previous Policy Month; minus
(e) any partial withdrawal taken from the fixed account since the end of
the previous Policy Month; plus
(f) interest credited on the fixed account balance.
o SYSTEMATIC TRANSFER ACCOUNT VALUE.
The Accumulation Value of any systematic transfer account on any Business
Day equals:
(a) the value at the issue date; minus
(b) any transfers from the systematic transfer account to the Subaccounts
since the end of the previous policy month; plus
(c) interest credited on the systematic transfer account balance.
25
<PAGE>
<TABLE>
<CAPTION>
o TELEPHONE TRANSACTIONS
<S> <C>
TELEPHONE TRANSACTIONS PERMITTED TELEPHONE TRANSACTION RULES:
o Transfers. o Only you may elect. Do so on the Policy application or by
o Partial withdrawals of $10,000 or prior Written Notice to us.
less by you (may be restricted o Must be received by close of the New York Stock Exchange
in community property states). ("NYSE") (usually 3 p.m. Central Time); if later, the
o Change of purchase payment transaction will be processed the next day the NYSE is
allocations. open.
o Will be recorded for your protection.
o For security, you must provide
your Social Security number and/or
other identification information.
o May be discontinued at any time as
to some or all Policy Owners.
</TABLE>
We are not liable for following telephone ransaction instructions we
reasonably believe to be genuine.
o DEATH OF ANNUITANT
Upon the Annuitant's death, you may name a new Annuitant. If any Owner is
the Annuitant, then upon that Owner's death, the Policy's applicable death
benefit becomes payable to the named Beneficiary(ies). However, if the
Beneficiary is the deceased Owner's spouse, then upon that Owner's death the
spouse may be permitted under federal tax law to become the new owner of the
Policy and to name an Annuitant and different Beneficiaries.
o MINOR OWNER OR BENEFICIARY
A minor may not own the Policy solely in the minor's name and cannot receive
payments directly as a Policy Beneficiary. Contrary to common belief, in most
states parental status does NOT automatically give parents the power to provide
an adequate release to us to make Beneficiary payments to the parent for the
minor's benefit. A minor can "own" a Policy through the trustee of a trust
established for the minor's benefit, or through the minor's named and court
appointed guardian, who own the Policy in his or her capacity as trustee or
guardian. Where a minor is a named Beneficiary, we are able to pay the minor's
Beneficiary payments to the minor's trustee or guardian. Some states allow us to
make such payments up to a limited amount directly to parents. Parents seeking
to have a minor's interest made payable to them for the minor's benefit are
encouraged to check with their local court to determine the process to be
appointed as the minor's guardian; it is often a very simple process that can be
accomplished without of an attorney. If there is no adult representative able to
give us an adequate release for payment of the minor's Beneficiary interest, we
will retain the minor's interest on deposit until the minor attains the age of
majority.
o POLICY TERMINATION
We may cancel your Policy upon 60 days' notice to you if the Accumulation
Value falls below $500. This cancellation would be a full surrender of the
Policy.
- -----------------------------------------------------------
EXPENSES
The charges and fees described below compensate us for our expenses in
distributing the Policy, bearing mortality and expense risks under the Policy,
and administering the investment options and the Policy. Except where stated
otherwise, charges and fees shown are the maximum we will charge, and some
actual expenses may be less. Each Series Fund also deducts expenses from each
portfolio; those expenses are described in each Series Fund prospectus.
o MORTALITY AND EXPENSE RISK CHARGE
1.40% annual Rate, deducted daily from net assets in the
Variable Account.
We impose a DAILY CHARGE to compensate us for the mortality and expense
risks we have under the Policy. This charge is equal to an annual rate of 1.40%
(.0038626% daily) of the value of the net assets in the Variable Account, and
will not increase. This charge is reflected in the accumulation unit values for
each Subaccount.
Our MORTALITY RISK arises from our obligation to make annuity payments and
to pay death benefits prior to the Annuity Starting Date. The mortality risk we
assume is that Annuitants will live longer than we project, so our cost in
making annuity payments will be higher than projected. However, an Annuitant's
own longevity, or improvement in general life expectancy, will not affect the
periodic annuity payments we pay under your Policy.
Our EXPENSE RISK is that our costs to administer your Policy will exceed the
amount we collect through Administrative Charges.
If the mortality and expense risk charge does not cover our costs, we bear
the loss, not you. If the charge exceeds our costs, the excess is profit to us.
We expect a profit from this charge.
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<PAGE>
o ADMINISTRATIVE CHARGES
Policy Fee $30 annually
- ------------------- ------------------------------------
0.20% annual rate (0.0005485%
Administrative daily), deducted daily from net
Expense Charge assets of each Subaccount
These charges help cover our cost to administer your Policy and will not
increase.
We deduct the Policy fee from your Policy's Accumulation Value on the last
Business Day of each Policy Year prior to the Annuity Starting Date (and upon a
complete surrender). This fee is levied by canceling Accumulation Units. The
Policy Fee is deducted from each Subaccount in the same proportion that the
value in each Subaccount bears to the total value in the Variable Account. This
fee is waived if your Policy's Accumulation Value exceeds $50,000 on the last
Business Day of the applicable Policy Year. This fee is also waived for
employees of ours or our affiliated Mutual of Omaha Companies.
TRANSFER FEE
$10 per Subaccount transfer after 12 free transfers each
Policy Year.
The first 12 transfers from Subaccounts, and all transfers from the fixed
account or the systematic transfer accounts are free. A transfer fee of $10 may
be imposed for any transfer in excess of 12 per Policy Year. The transfer fee is
deducted from the amount transferred. Simultaneous requests are treated as a
single request. We will not impose the fee for transfers that are not the result
of your request. Dollar cost averaging, asset allocation, STEP program and
rebalancing program transfers do not count toward the 12 free transfers.
o PREMIUM TAX CHARGE
Varies, up to 3.5%.
Some states and municipalities levy a tax on annuity contracts issued by
insurance companies, ranging up to 3.5% of your purchase payments. These tax
rates, and the timing of the tax, vary and may change. Depending upon when the
tax is paid by us in the state governing your Policy, if any, we deduct a charge
for the tax (except in Oregon) we are obliged to remit either (a) from purchase
payments as they are received, (b) upon surrender of the Policy, (c) upon your
death, or (d) upon applying the Policy proceeds to an annuity payout option.
o OTHER TAXES
Currently, NONE.
No charges are currently made for taxes other than premium taxes. We reserve
the right to levy charges in the future for taxes or other economic burdens
resulting from taxes that we determine are properly attributable to the Variable
Account.
o OTHER EXPENSES;
INVESTMENT ADVISORY FEES
See INTRODUCTION AND SUMMARY sections and each Series Fund's
prospectus
Each Series Fund portfolio is responsible for its own expenses. The net
assets of each portfolio reflects deductions for investment advisory fees and
other expenses. These charges are disclosed in each Series Fund's prospectus
which accompany this Prospectus. They are also summarized in Series Fund annual
expenses able in the INTRODUCTION AND SUMMARY section at the beginning of this
Prospectus.
27
<PAGE>
- -----------------------------------------------------------
POLICY DISTRIBUTIONS
There are several ways to take all or part of your investment out of your
Policy, both before and after the Annuity Starting Date. Tax penalties may apply
to amounts taken out of your Policy before the Annuity Starting Date. Your
Policy also provides several kinds of death benefits that may be paid upon your
death prior to the Annuity Starting Date. All or part of a death benefit may be
taxable.
o WITHDRAWALS
Withdrawals may be subject to:
- Income Tax
- Penalty Tax
- Premium Tax Charge
You may withdraw all or part of your Policy's Cash Surrender Value prior to
the Annuity Starting Date. Following a full surrender of the Policy, or at any
time the Accumulation Value is zero, all your rights in the Policy end. Total
surrender requires you to return your Policy to us.
SYSTEMATIC WITHDRAWAL PLAN
The systematic withdrawal plan allows you to automatically withdraw payments
of a predetermined dollar amount or fixed percentage of Accumulation Value from
a specified investment option monthly, quarterly, semiannually or annually.
Although this Plan mimics annuity payments, each distribution is a withdrawal
that may be taxable; you may wish to consult a tax adviser before requesting
this plan.
WITHDRAWAL RULES
o Withdrawals must be by Written Notice or authorized telephone transaction.
The "Request for Systematic Withdrawal Plan" form must specify a date for
the first payment, which must be at least 30 but not more than 90 days
after the form is received by us.
o Minimum withdrawal is $500 from any investment option ($100 for the
systematic withdrawal plan).
o Any partial withdrawal must leave an Accumulation Value of at least $500.
If less than $500 remains in an investment option, we will treat your
withdrawal request as a full withdrawal of that investment option.
o No more than a pro rata amount (or 10% of the fixed account, whichever is
less) may be withdrawn from the fixed account or systematic transfer
account for any partial withdrawal. (Withdrawals from the systematic
transfer account will not affect the minimum monthly transfer amount from
that account, so they will cause the total amount to be transferred to be
complete in less time than originally anticipated.) Only one withdrawal per
year is allowed out of the fixed account.
o Withdrawals result in cancellation of Accumulation Units from each
applicable Subaccount and deduction of Accumulation Value from the fixed
rate options in the ratio that the value of each such investment option
bears to the Policy's total Accumulation Value (i.e., pro rata from each
applicable investment option). If you do not specify which investment
option(s) to take the withdrawal from, it will be taken from each
investment option in the proportion that the Accumulation Value in each
investment option bears to the Policy's total Accumulation Value.
o Because a premium tax charge may apply to withdrawals, and because you bear
the investment risk for all amounts you allocate the Variable Account, the
total amount paid to you upon total surrender of the Policy (taking any
prior partial withdrawals into account) may be less than the total purchase
payments made.
o Unless you give us Written Notice to not withhold taxes from a withdrawal,
we must withhold 10% of the amount withdrawn to be paid as a federal tax,
and any amounts required by state law to be withheld for state income
taxes.
28
<PAGE>
ANNUITY PAYMENTS
Annuity payments:
- may be fixed or variable;
- may be taxable, and if premature,
subject to a tax penalty.
A primary function of an annuity contract, like this Policy, is to provide
annuity payments to the payee(s) that you name. The level of annuity payments is
determined by your Policy Accumulation Value, the Annuitant's sex (except where
prohibited by law) and age, and the annuity payout option selected.
Annuity payment payees must be individuals receiving payments on their own
behalf, unless otherwise agreed to by us. Any annuity payout option is only
effective once we acknowledge it. We may require initial and ongoing proof of
the Owner's or Annuitant's age or survival. Unless you specify otherwise, the
payee is the Annuitant.
FIXED ANNUITY PAYMENTS. Fixed annuity payments are based on a fixed rate of
interest at or higher than the minimum effective annual rate which is
guaranteed to yield 3% on an annual basis. We have sole discretion whether
or not to pay a higher rate for payout options 1, 2, 3, or 6 (see below).
Current immediate annuity rates for the same class of annuities are used if
higher than the guaranteed amounts (guaranteed amounts are based upon the
tables contained in the Policy). The guaranteed amounts are based on the
1983 Table "A" mortality table, and an interest rate which is guaranteed to
yield 3% on an annual basis. Current interest rates, and further
information, may be obtained from us.
Fixed annuity payments are available under all six annuity payout
options. The amount of each fixed annuity payment is set and begins on the
Annuity Starting Date, and does not change.
VARIABLE ANNUITY PAYMENTS. Variable annuity payments, other than the first,
vary in amount depending upon the investment performance of the applicable
Subaccounts.
The first variable annuity payment amount is determined by applying the
Annuity Purchase Value allocated to variable annuity payments to the annuity
table applicable to the payout option chosen. The tables are determined from the
1983 Table "A" mortality table with an assumed investment rate of 4%. If more
than one Subaccount has been selected, the Annuity Purchase Value of each
Subaccount is applied separately to the annuity table to determine the amount of
the first annuity payment attributable to that particular Subaccount.
"Annuity Purchase Value" is the Accumulation Value on the
Annuity Starting Date reduced by the annual Policy fee,
premium taxes, and income taxes and penalty tax.
Subsequent annuity payment amounts (after the first) are the sum of: the
number of variable annuity units for each Subaccount as determined for the first
annuity payment multiplied by the value of a variable annuity unit for that
Subaccount 10 days prior to the date the variable annuity payment is due. This
amount may increase or decrease from month to month. The number of variable
annuity units for each Subaccount is calculated by dividing the dollar amount of
the first payment attributable to that Subaccount by the annuity unit value as
of the date the amount of the first payment is calculated.
If the net investment return of a Subaccount for a payment period is equal
to the pro rated portion of the 4% annual assumed investment rate, the variable
annuity payment attributable to that Subaccount for that period will equal the
payment for the prior period. To the extent that such net investment return
exceeds an annualized rate of 4% for a payment period, the payment for that
period will be greater than the payment for the prior period. To the extent that
such return for a period falls short of an annualized rate of 4%, the payment
for that period will be less than the payment for the prior period.
Only annuity payout options 2, 4 and 6 are available for variable annuity
payments.
29
<PAGE>
o ANNUITY STARTING DATE
Only 4 transfers are allowed each Policy Year after the
Annuity Starting Date.
Upon your request, we will provide you with the necessary forms for you to
select your Annuity Starting Date. This is the date that annuity payments
begin. The Annuity Starting Date may not be any earlier than the second
Policy anniversary. This date may be as late as the Policy's annual
anniversary date following the Annuitant's 95th birthday (85th in
Pennsylvania). Tax-qualified Policies may require an earlier Annuity
Starting Date. You may change this date by sending Written Notice for our
receipt at least 30 days before the then current Annuity Starting Date.
o TRANSFERS AFTER THE ANNUITY STARTING DATE
After the Annuity Starting Date, you may transfer amounts applied to
variable annuity payments from one Subaccount to another or to the fixed
account. Transfers are based on the variable annuity unit values for the
Business Day during which we receive your transfer request. A designated number
of variable annuity units of the designated Subaccount(s) is exchanged for
another Subaccount(s) variable annuity units, the value of which is such that
the dollar amount of an annuity payment made on the date of the exchange would
be unaffected by the exchange.
o SELECTING AN ANNUITY PAYOUT OPTION
The longer the guaranteed or projected annuity payout option
period, the lower the amount of each annuity payment.
Upon request, you may choose your annuity payout option. You may change
your selection during your life by sending Written Notice for our receipt
at least 30 days before the Annuity Starting Date. If no selection is made
by then, we will apply Accumulation Value in the Variable Account to
provide variable annuity payments, and Accumulation Value in the fixed
ccount to provide fixed annuity payments, and annuity payments will be made
under payout option 4 providing lifetime income with payments guaranteed
for 10 years. We may pay your Policy proceeds in one sum if they are less
than $2,000, or when the payout option chosen would result in periodic
payments of less than $20.
If you die before the Annuity Starting Date (and the Policy is in force),
your Beneficiary may elect to receive the death benefit under one of the
annuity payout options (unless applicable law or a settlement agreement
dictate otherwise).
o ANNUITY PAYOUT OPTIONS
If the continuation of variable payments being made under option 2 or 6 does
not depend upon the payee remaining alive, you may surrender your Policy and
receive the commuted value of any unpaid payments. However, if your payments
under option 2 or 6 depends upon the payee's continued life, you cannot
surrender your Policy for cash. In this case, once option payments commence,
payments will end upon the payee's death.
When the Owner dies, we will pay any unpaid guaranteed payments to your
Beneficiary. Upon the last payee's death, we will pay any unpaid guaranteed
payments to that payee's estate.
NOTE: UNLESS YOU ELECT A PAYOUT OPTION WITH A GUARANTEED PERIOD OR OPTION 1,
IT IS POSSIBLE THAT ONLY ONE ANNUITY PAYMENT WOULD BE MADE UNDER THIS ANNUITY
PAYOUT OPTION IF THE ANNUITANT DIES BEFORE THE DUE DATE OF THE SECOND ANNUITY
PAYMENT, ONLY TWO ANNUITY PAYMENTS WOULD BE MADE IF THE ANNUITANT DIED BEFORE
THE DUE DATE OF THE THIRD ANNUITY PAYMENT, ETC.
Part or all of any annuity payment may be taxable as ordinary income. If, at
the time annuity payments begin, you have not given us Written Notice to not
withhold federal income taxes, we must by law withhold such taxes from the
taxable portion of each annuity payment and remit it to the Internal Revenue
Service.
(Withholding is mandatory for certain tax-qualified Policies.)
The following annuity payout options are currently available:
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1) PROCEEDS HELD ON DEPOSIT AT INTEREST. While proceeds remain on deposit, we
annually credit interest to the proceeds. The interest may be paid to the
payee or added to the amount on deposit.
2) INCOME OF A SPECIFIED AMOUNT. Proceeds are paid in monthly installments of a
specified amount over at least a five-year period until proceeds, with
interest, have been fully paid.
3) INCOME FOR A SPECIFIED PERIOD. Periodic payments of proceeds are paid for
the number of years chosen. If no other frequency is selected, payments will
be made monthly. Monthly incomes for each $1,000 of proceeds, which include
interest, are illustrated by a table in the Policy.
4) LIFETIME INCOME. Proceeds are paid as monthly income during the Annuitant's
life. The amount of the monthly income annuity payment will be an amount
computed using either the Lifetime Monthly Income Table set forth in the
Policy (based on the 1983 Table "A" mortality table) or, if more favorable
to the Annuitant, our then current lifetime monthly income rates for payment
of proceeds. If a variable payout option is chosen, all variable annuity
payments, other than the first variable annuity payment, will vary in amount
according to the investment performance of the applicable variable
investment options.
GUARANTEES AVAILABLE for the Lifetime Income Option
GUARANTEED PERIOD - An amount of monthly income is guaranteed for a
specified number of years, and thereafter as long as the Annuitant
lives.
GUARANTEED AMOUNT - An amount of monthly income is guaranteed until
the sum of the payments equal the proceeds placed under the option and
as long after that as the Annuitant lives.
5) LUMP-SUM. Proceeds are paid in one sum.
6) ALTERNATIVE SCHEDULES. We may be able to accommodate making annuity
payments under other options, including joint and survivor periods. Contact
us for more information.
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o DEATH BENEFITS
A death benefit is payable upon:
- purchase payment check or draft being honored (i.e.,
your Policy is in force);
- receipt of due proof of death of the first Owner to die;
- election of an annuity payout option (or lump- sum
payment); and
- proof that such Owner died before annuity payments
begin.
"Due Proof of Death" is a certified copy of a death
certificate, a certified copy of a decree of a court of
competent jurisdiction as to the finding of death, a written
statement by the attending physician, or any other proof
satisfactory to us.
We will pay the death benefit after we receive necessary documentation of an
Owner's death, or as soon thereafter as we have sufficient information about the
Beneficiary to make the payment. Death benefits may be paid pursuant to an
annuity payout option (including a lump-sum payment) to the extent allowed by
applicable law and any settlement agreement in effect at your death. If the
Beneficiary does not make an annuity payout option election within 60 days of
our receipt of Due Proof of Death regarding your death, we will issue a lump-sum
payment to the Beneficiary.
If an Owner of the Policy is a corporation, trust or other nonindividual, we
treat the primary Annuitant as an Owner for purposes of the death benefit. The
"primary Annuitant" is that individual whose life affects the timing or the
amount of the death benefit payout under the Policy. A change in the primary
Annuitant will be treated as the death of an Owner.
If the Annuitant is an Owner or joint Owner, the Annuitant's death is
treated as an Owner's death.
(If the Annuitant is not an Owner and the Annuitant dies before the Annuity
Starting Date, the Owner may name a new Annuitant if such Owner(s) is not a
corporation or other non-individual or if such Owner is the trustee of an
Internal Revenue Code Section 401(a) retirement plan. If the Owner does not name
a new Annuitant, the Owner will become the Annuitant.)
We will deduct any applicable premium tax not previously deducted from the
death benefit payable.
o STANDARD DEATH BENEFIT
If you or a joint Owner dies before the Annuity Starting Date (and the
Policy is in force), the Policy will terminate, and we will pay a death benefit
to your Beneficiary. The death benefit equals the largest of:
1) your Policy's Accumulation Value on the later of the date we receive due
proof of death and an annuity payout option election less any charge for
applicable premium taxes; or
2) the sum of net purchase payments, less partial withdrawals.
(If you or a joint Owner dies on or after the Annuity Starting Date and
before all proceeds have been paid, no death benefit is payable, but any
remaining proceeds will be paid at least as rapidly as under the annuity payout
option then in effect.)
o ACCIDENTAL DEATH BENEFIT
If you or any joint Owner die from bodily injury sustained in a common
carrier accident, we will pay double the standard death benefit instead of the
amount otherwise payable.
For the accidental death benefit to be payable, bodily injury must be
sustained by the Owner while a passenger in a common carrier. Death must be
independent of any sickness or other causes and must occur within 90 days of the
date of the accident. We will pay only the standard death benefit if applicable,
instead of the accidental death benefit, if the Owner's death results from the
following: (a) suicide; (b) an act of declared or undeclared war; (c) an injury
received while intoxicated; (d) an injury received while the Owner is under the
influence of a controlled substance, unless administered on the advice of a
physician; or (e) an injury received while committing a felony or engaged in an
illegal occupation. The accidental death benefit may not be available in all
states.
o BENEFICIARY
You may change your Beneficiary by sending Written Notice to us, unless the
named Beneficiary is irrevocable. Once we record and acknowledge the change, it
is effective as of the date you signed the Written Notice. The change will not
apply to any payments made or other action taken by us before recording. If the
named Beneficiary is irrevocable, you may change the named Beneficiary only by
Written Notice signed by both you and the Beneficiary. If more than one named
Beneficiary is designated, and you fail to specify their interests, they will
share equally.
If there are joint Owners, the surviving joint Owner will be deemed the
Beneficiary, and the Beneficiary named in the Policy application or as
subsequently changed will be deemed the contingent Beneficiary. If both joint
Owners die simultaneously, the death benefit will be paid to the contingent
Beneficiary.
If the Beneficiary is your surviving spouse, the spouse may elect either to
receive the death benefit, in which case the Policy will terminate, or to
continue the Policy in force with the spouse as Owner.
If the named Beneficiary dies before you, then your estate is the
Beneficiary until you name a new Beneficiary.
o IRS REQUIRED DISTRIBUTION
Federal law requires that if your Policy is tax non-qualified and you die
before the Annuity Starting Date, then the entire value of your Policy must be
distributed within five years of your death. Therefore, any death benefit must
be paid within five years after your death. The five-year rule does not apply to
that portion of the proceeds which (a) is for the benefit of an individual
Beneficiary; and (b) will be paid over the lifetime or the life expectancy of
that Beneficiary as long as payments begin not later than one year after the
date of your death. Special rules may apply to your surviving spouse. The SAI
has a more detailed description of these rules. Other required distribution
rules apply to tax-qualified Policies.
- -------------------------------------------------------
FEDERAL TAX MATTERS
The following discussion is general in nature and is not intended as tax
advice. Each person concerned should consult a competent tax advisor. No attempt
is made to consider any applicable state tax or other tax laws, or to address
any federal estate, or state and local estate, inheritance and other tax
consequences of ownership or receipt of distributions under a Policy.
When you invest in an annuity contract, you usually do not pay taxes on
your investment gains until you withdraw the money - generally for retirement
purposes. If you invest in a variable annuity as part of a pension plan or
employer-sponsored retirement program, your contract is called a "Qualified
Policy." If your annuity is independent of any formal retirement or pension
plan, it is termed a "Nonqualified Policy." The tax rules applicable to
Qualified Policies vary according to the type of retirement plan and the terms
and conditions of the plan.
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<PAGE>
TAXATION OF NONQUALIFIED POLICIES
If a non-natural person (e.g., a corporation or a trust) owns a
Nonqualified Policy, the taxpayer generally must include in income any increase
in the excess of the Accumulation Value over the investment in the Policy
(generally, the purchase payments paid for the Policy) during the taxable year.
There are some exceptions to this rule and a prospective owner that is not a
natural person should discuss these with a tax adviser.
THE FOLLOWING DISCUSSION GENERALLY APPLIES TO POLICIES OWNED BY NATURAL
PERSONS.
o WITHDRAWALS. When a withdrawal from a Nonqualified Policy occurs, the amount
received will be treated as ordinary income subject to tax up to an amount equal
to the excess (if any) of the Accumulation Value immediately before the
distribution over the Owner's investment in the Policy (generally, the purchase
payments paid for the Policy, reduced by any amount previously distributed from
the Policy that was not subject to tax) at that time. In the case of a surrender
under a Nonqualified Policy, the amount received generally will be taxable only
to the extent it exceeds the Owner's investment in the Policy.
o PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution from a
Nonqualified Policy, there may be imposed a federal tax penalty equal to ten
percent of the amount treated as income. In general, however, there is no
penalty on distributions:
- - made on or after the taxpayer reaches age 59 1/2;
- - made on or after an Owner's death;
- - attributable to the taxpayer's becoming disabled; or
- - made as part of a series of substantially equal periodic payments for the
life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and special rules
may be applicable in connection with the exceptions enumerated above. Also,
additional exceptions apply to distributions from a Qualified Policy. You should
consult a tax adviser with regard to exceptions from the penalty tax.
o ANNUITY PAYMENTS. Although tax consequences may vary depending on the payout
option elected under an annuity contract, a portion of each annuity payment is
generally not taxed and the remainder is taxed as ordinary income. The
non-taxable portion of an annuity payment is generally determined in a manner
that is designed to allow you to recover your investment in the Policy ratably
on a tax-free basis over the expected stream of annuity payments, as determined
when annuity payments start. Once your investment in the Policy has been fully
recovered, however, the full amount of each annuity payment is subject to tax as
ordinary income.
o TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed from the Policy
because of your death or the death of the Annuitant. Generally, such amounts are
includible in the income of the recipient as follows: (i) if distributed in a
lump sum, they are taxed in the same manner as a surrender of the Policy, or
(ii) if distributed under a payout option, they are taxed in the same way as
annuity payments.
o TRANSFERS, ASSIGNMENTS OR EXCHANGES OF A POLICY. A transfer or assignment of
ownership of the Policy, the designation of an Annuitant, the selection of
certain Annuity Starting Dates, or the exchange of the Policy may result in
certain tax consequences to you that are not discussed herein. An Owner
contemplating any such transfer, assignment, or exchange, should consult a tax
advisor as to the tax consequences.
o WITHHOLDING. Annuity distributions are generally subject to withholding for
the recipient's federal income tax liability. Recipients can generally elect,
however, not to have tax withheld from distributions.
o MULTIPLE POLICIES. All Non-Qualified deferred annuity contracts that are
issued by us (or our affiliates) to the same Owner during any calendar year are
treated as one annuity contract for purposes of determining the amount
includible in such Owner's income when a taxable distribution occurs.
o FURTHER INFORMATION. We believe that the Policy qualifies as an annuity
contract for Federal income tax purposes and the above discussion is based on
that assumption. Further details can be found in the Statement of Additional
Information under the heading "Tax Status of the Policy."
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<PAGE>
TAXATION OF QUALIFIED POLICIES
The tax rules applicable to Qualified Policies vary according to the type
of retirement plan and the terms and conditions of the plan. Your rights under a
Qualified Policy may be subject to the terms of the retirement plan itself,
regardless of the terms of the Policy. Adverse tax consequences may result if
you do not ensure that contributions, distributions and other transactions with
respect to the Policy comply with the law. Also, you may wish to consult a tax
and/or financial adviser regarding the use of the Policy within a qualified or
other retirement plan, since the purchase of a Policy to fund a tax-qualified
retirement account does not provide any additional tax deferred treatment of
earnings beyond the treatment provided by the tax-qualified retirement plan
itself. However, the Policy does provide benefits such as lifetime income
payments, family protection through death benefits, guaranteed fees and asset
allocation models that most retirement plans do not provide,
o INDIVIDUAL RETIREMENT ACCOUNTS (IRAs), as defined in Section 408 of the
Internal Revenue Code (Code), permit individuals to make annual contributions of
up to the lesser of $2,000 or 100% of adjusted gross income. The contributions
may be deductible in whole or in part, depending on the individual's income.
Distributions from certain pension plans may be "rolled over" into an IRA on a
tax-deferred basis without regard to these limits. Amounts in the IRA (other
than nondeductible contributions) are taxed when distributed from the IRA. A 10%
penalty tax generally applies to distributions made before age 59 1/2 , unless
certain exceptions apply.
o ROTH IRAS, as described in Code section 408A, permit certain eligible
individuals to make non-deductible contributions to a Roth IRA in cash or as a
rollover or transfer from another Roth IRA or other IRA. A rollover from or
conversion of an IRA to a Roth IRA is generally subject to tax and other special
rules apply. The Owner may wish to consult a tax adviser before combining any
converted amounts with any other Roth IRA contributions, including any other
conversion amounts from other tax years. Distributions from a Roth IRA generally
are not taxed, except that, once aggregate distributions exceed contributions to
the Roth IRA, income tax and a 10% penalty tax may apply to distributions made
(1) before age 59 1/2 (subject to certain exceptions) or (2) during the five
taxable years starting with the year in which the first contribution is made to
any Roth IRA. A 10% penalty tax may apply to amounts attributable to a
conversion from an IRA if they are distributed during the five taxable years
beginning with the year in which the conversion was made.
o CORPORATE PENSION AND PROFIT-SHARING PLANS under Section 401(a) of the Code
allow corporate employers to establish various types of retirement plans for
employees, and self-employed individuals to establish qualified plans for
themselves and their employees. Adverse tax consequences to the retirement plan,
the participant, or both may result if the Policy is transferred to any
individual as a means to provide benefit payments, unless the plan complies with
all the requirements applicable to such benefits prior to transferring the
Policy. The standard death benefit could be characterized as an incidental
benefit, the amount of which is limited in any pension or profit-sharing plan.
Because the death benefit may exceed this limitation, employers using the Policy
in connection with such plans should consult their tax adviser.
o TAX-SHELTERED ANNUITIES under section 403(b) of the Code allow employees of
certain Section 501(c)(3) organizations and public schools to exclude from their
gross income the purchase payments made, within certain limits, on a policy that
will provide an annuity for the employee's retirement. The Policy will only
accept transfers from an existing tax-sheltered annuity contract, and will not
accept direct payments of salary reduction contributions. Distributions of (1)
salary reduction contributions made in years beginning after December 31, 1988;
(2) earnings on those contributions; and (3) earnings on amounts held as of the
last year beginning before January 1, 1989, are not allowed prior to age 59 1/2,
separation from service, death or disability. Salary reduction contributions may
also be distributed upon hardship, but would generally be subject to penalties.
The standard death benefit could be characterized as an incidental benefit, the
amount of which is limited in a tax-sheltered annuity. Because the death benefit
may exceed this limitation, individuals using the Policy in connection with such
plans should consult their tax adviser.
o OTHER TAX ISSUES. Qualified Policies have minimum distribution rules that
govern the timing and amount of distributions. You should refer to your
retirement plan, adoption agreement, or consult a tax advisor for more
information about these distribution rules.
Distributions from Qualified Policies generally are subject to withholding
for the Owner's Federal income tax liability. The withholding rate varies
according to the type of distribution and the Owner's tax status. The Owner will
be provided the opportunity to elect not to have tax withheld from
distributions.
"Eligible rollover distributions" from section 401(a) plans are subject to
a mandatory federal income tax withholding of 20%. An eligible rollover
distribution is the taxable portion of any distribution from such a plan, except
certain distributions such as distributions required by the Code or
distributions in a specified annuity form. The 20% withholding does not apply,
however, if the Owner chooses a "direct rollover" from the plan to another
tax-qualified plan or IRA.
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<PAGE>
o POSSIBLE TAX LAW CHANGES
Although the likelihood of legislative change is uncertain, there is always
the possibility that the tax treatment of the Policy could change by legislation
or otherwise. Consult a tax adviser with respect to legislative developments and
their effect on the Policy.
We have the right to modify the Policy in response to legislative changes
that could otherwise diminish the favorable tax treatment that annuity contract
Owners currently receive. We make no guarantee regarding the tax status of any
Policy and do not intend the above discussion as tax advice.
- -----------------------------------------------------------
MISCELLANEOUS
o DISTRIBUTOR OF THE POLICIES
Mutual of Omaha Investor Services, Inc. ("MOIS"), Mutual of Omaha Plaza,
Omaha Nebraska 68175, is the principal underwriter of the Policies. Like us,
MOIS is an affiliate of Mutual of Omaha Insurance Company. MOIS enters into
contracts with various broker-dealers ("Distributors") to distribute Policies.
All persons selling the Policy will be registered representatives of the
Distributors, and may also be licensed as insurance agents to sell variable
annuities. MOIS is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers,
Inc. Commissions paid to a broker-dealer are up to 7 1/2% of purchase
payments. We may also pay other distribution expenses such as production
incentive bonuses, including non-cash awards. These distribution expenses do not
result in any charges under the Policy that are not described under the EXPENSES
section of the Prospectus.
o VOTING RIGHTS
We will vote Series Fund shares held by the Variable Account at regular and
special shareholder meetings of the Series Funds pursuant to instructions
received from persons having voting interests in the Series Funds, if and to the
extent required by law. The Series Funds may not hold routine annual shareholder
meetings.
As a Policy Owner, you may have a voting interest in the Series Fund you
are invested in. You will receive proxy material, reports, and other materials
relating to each Series Fund in which you have voting interests.
q DISTRIBUTION OF MATERIALS
We will distribute proxy statements, updated prospectuses and other materials to
you from time to time. In order to achieve cost savings, we may send
consolidated mailings to several owners who reside at the same household in
accordance with the rules of the Securities and Exchange Commission.
o LEGAL PROCEEDINGS
As of the date of this Prospectus, there are no legal proceedings affecting
the Variable Account, or that are material in relation to our total assets.
DO YOU HAVE QUESTIONS?
If you have questions about your Policy or this Prospectus,
you may contact your agent or broker who gave this
Prospectus to you, or you may contact us at: UNITED OF
OMAHA, Variable Product Services, P.O. Box 8430, Omaha,
Nebraska 68103-0430. Telephone 1-800-238-9354.
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<PAGE>
o STATEMENT OF ADDITIONAL INFORMATION
You may obtain, at no cost, a Statement of Additional Information which
contains more details concerning the disclosures in this Prospectus by
contacting us. You may also access it in our registration on the SEC's web site
(HTTP://WWW.SEC.GOV), or you may review and copy it at the SEC's Public
Reference Room in Washington D.C. (call the SEC at 1-800-SEC-0330 for details
and public hours).
Here is the table of contents to our Statement of Additional Information:
CONTENTS PAGE(S)
-------------------------------------- --------
The Policy - General Provisions 2-3
Owner and Joint Owner
Death of Annuitant
Entire Contract
Deferment of Payment and
Transfers
Incontestability
Misstatement of Age or Sex
Nonparticipating
Assignment
Evidence of Age or Survival
-------------------------------------- --------
Federal Tax Matters 3-4
Tax Status of the Policy
Taxation of United of Omaha
-------------------------------------- --------
State Regulation of United of Omaha 4
-------------------------------------- --------
Administration 4-5
Records and Reports
Distribution of the Policies
Custody of Assets
-------------------------------------- --------
Historical Performance Data 5-14
Money Market Yields
Other Subaccount Yields
Total Returns
Other Performance Data
-------------------------------------- --------
Other Information 14
-------------------------------------- --------
Financial Statements 14
36
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
THE ULTRA-ACCESS VARIABLE ANNUITY
Issued through: UNITED OF OMAHA SEPARATE ACCOUNT C
Offered by: UNITED OF OMAHA LIFE INSURANCE COMPANY ("We, us, our")
Mutual of Omaha Plaza
Omaha, Nebraska 68175
This Statement of Additional Information expands upon subjects discussed in
the current Prospectus for the Ultra-Access Variable Annuity Policy (the
"Policy"). You may obtain a copy of the Prospectus dated May 1, 2000 by calling
1-800-238-9354 or by writing to us at: United of Omaha, Variable Product
Services, P.O. Box 8430, Omaha, Nebraska 68103-0430. Terms used in the current
Prospectus for the Policy have the same meaning in this Statement.
This Statement of Additional Information is not a prospectus. You
should read it only in conjunction with the prospectuses for the
Policy and the Series Funds.
Dated: May 1, 2000
CONTENTS PAGE(S)
-------------------------------------- ---------
The Policy - General Provisions 2-3
Owner and Joint Owner
Entire Contract
Deferment of Payment and
Transfers
Incontestability
Misstatement of Age or Sex
Nonparticipating
Assignment
Evidence of Age or Survival
-------------------------------------- ---------
Federal Tax Matters 3-4
Tax Status of the Policy
Taxation of United of Omaha
-------------------------------------- ---------
State Regulation of United of Omaha 4
-------------------------------------- ---------
Administration 4-5
Records and Reports
Distribution of the Policies
Custody of Assets
-------------------------------------- ---------
Historical Performance Data 5-8
Money Market Yields
Other Subaccount Yields
Average Annual Total Returns
Other Performance Information
-------------------------------------- ---------
Other Information 9
-------------------------------------- ---------
Financial Statements 9
<PAGE>
The following provides additional information about us and the Policy which
may be of interest to you and is not addressed in the Prospectus.
THE POLICY - GENERAL PROVISIONS
OWNER AND JOINT OWNER
While you are alive, only you may exercise the rights under the Policy. You
may change the Owner of the Policy as described below under "Assignment." If
there are joint Owners, the signatures of both Owners are needed to exercise
rights under the Policy. If the Annuitant is other than the Owner, the Annuitant
has no rights under the Policy.
ENTIRE CONTRACT
The entire contract is the Policy, as well as the data page and any riders
to the Policy and the signed application, a copy of which will be attached to
the Policy. All statements made in the application are deemed representations
and not warranties. No statement, unless it is in the application, will be used
by us to contest the Policy or deny a claim.
Any change of the Policy and any riders requires the consent of our
authorized officer. No agent or registered representative has authority to
change or waive any provision of the Policy.
We reserve the right to amend the Policy to meet the requirements of, or
take advantage of, the Internal Revenue Code, regulations or published rulings.
You can refuse such a change by giving Written Notice, but a refusal may result
in adverse tax consequences.
DEFERMENT OF PAYMENT AND TRANSFERS
We will usually pay any amounts payable from the Variable Account as a
result of a partial withdrawal or cash surrender within seven days after
receiving Written Notice. We can postpone such payments or any transfers of
amounts between Subaccounts or into the fixed account if:
(a) the New York Stock Exchange is closed for other than customary weekend
and holiday closings;
(b) trading on the New York Stock Exchange is restricted;
(c) an emergency exists as determined by the Securities Exchange
Commission, as a result of which it is not reasonably practical to
dispose of securities, or not reasonably practical to determine the
value of the net assets of the Variable Account; or
(d) the Securities Exchange Commission permits delay for the protection of
security holders.
The applicable rules of the Securities Exchange Commission will govern as
to whether the conditions in (c) or (d) exist.
We may defer payment of partial withdrawals or a surrender from the
fixed account for up to six months from the date we receive Written Notice.
INCONTESTABILITY
We will not contest the validity of the Policy after it has been in
force during the lifetime of the Owner for two years from the date of its Issue.
MISSTATEMENT OF AGE OR SEX
We may require proof of the Annuitant's age before making any life
annuity payment provided for by the Policy. If the Annuitant's age or sex has
been misstated, the Annuity Starting Date and monthly annuity payments will be
determined using the correct age and sex.
If a misstatement of age or sex results in monthly annuity payments that
are too large, the overpayments will be deducted from future monthly annuity
payments. If we have made payments that are too small, the underpayments will be
added to the next payment. Adjustments for overpayments or underpayments will
include 6% interest.
NONPARTICIPATING
No dividends will be paid. Neither you nor the Beneficiary shares in our
surplus earnings or profits.
ASSIGNMENT
You may change the Owner of the Policy or pledge it as collateral by
assigning it. No assignment is binding on us until we record and acknowledge it.
The rights of any payee will be subject to a collateral assignment.
If the Beneficiary designation is irrevocable, the Owner may be changed
or the Policy assigned only upon Written Notice signed by both you and the
Beneficiary. On the Annuity Starting Date, you may select another payee, but you
retain all rights of ownership unless you sign an absolute assignment of the
Policy.
EVIDENCE OF AGE OR SURVIVAL
We may require proof of the age or survival of any Owner, Annuitant or
payee. No payment will be made until we receive such proof.
FEDERAL TAX MATTERS
TAX STATUS OF THE POLICY
DIVERSIFICATION REQUIREMENTS. Section 817(h) of the Internal Revenue
Code (the "Code") provides that in order for a variable contract based on a
segregated asset account to qualify as an annuity contract under the Code, the
investments made by such account must be "adequately diversified." The Treasury
regulations issued under Section 817(h) (Treas. Reg. ss. 1.817-5) apply a
diversification requirement to each of the Subaccounts of the Variable Account.
The Variable Account, through the Series Funds and their portfolios, intends to
comply with those diversification requirements. We and the Series Funds have
entered into agreements regarding participation in the Series Funds that
requires the Series Funds and their portfolios to comply with the Treasury
regulations.
OWNER CONTROL. In certain circumstances, owners of variable annuity
contracts may be considered the owners, for federal income tax purposes, of the
assets of the separate account used to support their contracts. In those
circumstances, income and gains from the separate account assets would be
includible in the variable contract owner's gross income. The IRS has stated in
published rulings that a variable contract owner will be considered the owner of
separate account assets if the contract owner possesses incidents of ownership
in those assets, such as the ability to exercise investment control over the
assets. The Treasury Department also announced, in connection with the issuance
of regulations concerning diversification, that those regulations "do not
provide guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor (i.e., the
Owner), rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular Subaccounts without being treated as
owners of the underlying assets." As of the date of the Prospectus, no such
guidance has been issued.
The Owner's rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that policy owners were not owners of separate account assets. For
example, you have additional flexibility in allocating premium payments and
Policy values. These differences could result in you being treated as the Owner
of a pro-rata portion of the assets of the Separate Account. In addition, we do
not know what standards will be set forth, if any, in future regulations or
rulings issued by the Treasury Department. We therefore reserve the right to
modify the Policy as necessary to attempt to prevent you from being considered
the Owner of a pro-rata share of the assets of the Variable Account or to
otherwise qualify the Policy for favorable tax treatment.
DISTRIBUTION REQUIREMENTS. The Code also requires that nonqualified
policies contain specific provisions for distribution of policy proceeds upon
your death. In order to be treated as an annuity contract for federal income tax
purposes, the Code requires that such policies provide that if you die on or
after the annuity starting date and before the entire interest in the policy has
been distributed, the remaining portion must be distributed at least as rapidly
as under the method in effect on your death. If you die before the Annuity
Starting Date, the entire interest in your Policy must generally be distributed
within five years after your death. This requirement can be satisfied if the
entire interest in your Policy is used to purchase an immediate annuity under
which payments will begin within one year of your death and will be made for the
life of the Beneficiary or for a period not extending beyond the life expectancy
of the Beneficiary. If the Beneficiary is your surviving spouse, the Policy may
be continued with your surviving spouse as the new Owner. The Policy contains
provisions intended to comply with these requirements of the Code. No
regulations interpreting these requirements of the Code have yet been issued and
thus no assurance can be given that the provisions contained in the Policy
satisfies all such Code requirements. The provisions contained in the Policy
will be reviewed and modified if necessary to assure that they comply with the
Code requirements when clarified by regulation or otherwise.
TAXATION OF UNITED OF OMAHA
We at present are taxed as a life insurance company under part I of
Subchapter L of the Code. The Variable Account is treated as part of us and,
accordingly, is not taxed separately as a "regulated investment company" under
Subchapter M of the Code. We do not expect to incur any federal income tax
liability with respect to investment income and net capital gains arising from
the activities of the Variable Account retained as part of the reserves under
the Policy. Based on this expectation, it is anticipated that no charges will be
made against the Variable Account for federal income taxes. If, in future years,
any federal income taxes or related economic burdens are incurred by us with
respect to the Variable Account, we may make a charge to the Variable Account.
STATE REGULATION OF UNITED OF OMAHA
We are subject to Nebraska law and to regulation by the Nebraska
Department of Insurance. We file an annual statement with the Nebraska
Department of Insurance covering our operation for the preceding year and our
financial condition as of the end of such year. Regulation by the Department of
Insurance includes periodic examination to determine our contract liabilities
and reserves. Our books and accounts are subject to review by the Department of
Insurance at all times and a full examination of our operations is conducted
periodically by the National Association of Insurance Commissioners. In
addition, we are subject to regulation under the insurance laws of other
jurisdictions in which we operate.
ADMINISTRATION
We perform all administration for your Policy.
RECORDS AND REPORTS
All our records and accounts relating to the Variable Account are
maintained by us. As presently required by the Investment Company Act of 1940
and regulations promulgated thereunder, we will mail to all Policy Owners at
their last known address of record, at least annually, financial statements of
the Variable Account and such other information as may be required under that
Act or by any other applicable law or regulation. Policy Owners will also
receive confirmation of each financial transaction and any other reports
required by applicable state and federal laws, rules, and regulations.
DISTRIBUTION OF THE POLICIES
The Policies are offered to the public through agents and brokers
licensed under the federal securities laws and state insurance laws. The
offering of the Policies is continuous and we do not anticipate discontinuing
the offering of the Policies. However, we reserve the right to discontinue the
offering of the Policies.
Mutual of Omaha Investor Services, Inc. ("MOIS") is the principal
underwriter of the Policies. The Policies will be distributed by MOIS through
retail broker-dealers. Commissions payable to a broker-dealer will be up to 7.5%
of Purchase Payments. For the fiscal year ended December 31, 1999, we paid $[ ]
in total compensation to MOIS; of this amount MOIS retained $ [ ] as concessions
for its services as Principal Underwriter and for distribution concessions, with
the remaining amount paid to other broker-dealers. In 1998, these amounts were
$8,627 and $152 respectively.
CUSTODY OF ASSETS
We hold the assets of each of the Subaccounts of the Variable Account.
The assets of the Variable Account are segregated and held separate and apart
from our general account assets. We maintain records of all purchases and
redemptions of shares of the Series Funds held by each of the Subaccounts.
Additional protection for the assets of the Variable Account is afforded by our
fidelity bond, presently in the amount of $10 million, covering the acts of our
officers and employees.
HISTORICAL PERFORMANCE DATA
From time to time, we may disclose yields, total returns, and other
performance data pertaining to the Policies for a Subaccount. Such performance
data will be computed, or accompanied by performance data computed, in
accordance with the standards defined by the Securities and Exchange Commission.
The yields and total returns of the Subaccounts of the Variable Account
normally will fluctuate over time. THEREFORE, THE DISCLOSED YIELDS AND TOTAL
RETURNS FOR ANY GIVEN PAST PERIOD ARE NOT AN INDICATION OR REPRESENTATION OF
FUTURE YIELDS OR RATES OF RETURN. A Subaccount's actual yield and total return
is affected by the types and quality of portfolio securities held by the
portfolio and its operating expenses.
Because of the charges and deductions imposed under a Policy, the yields
and total returns for the Subaccounts will be lower than the yields and total
returns for their respective portfolios. The calculations of yields, total
returns, and other performance data do not reflect the effect of any premium tax
charge that may be applicable to a particular Policy. Premium taxes currently
range for 0% to 3.5% of purchase payments based on the state in which the Policy
is sold.
MONEY MARKET YIELDS
From time to time, advertisements and sales literature may quote the
current annualized yield of the money market Subaccount (Federated Price Money
Fund II Portfolio) for a seven-day period in a manner which does not take into
consideration any realized or unrealized gains or losses on shares of the money
market portfolio or on its portfolio securities. As of 12/31/99, this current
annualized yield is [ ]%.
This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities, unrealized
appreciation and depreciation, and excluding income other than investment
income) at the end of the seven-day period in the value of a hypothetical
account under a Policy having a balance of one Accumulation Unit of the money
market Subaccount at the beginning of the period to determine the base period
return, and annualizing this quotient on a 365-day basis. The net change in
account value reflects: (1) net income from the portfolio attributable to the
hypothetical account; and (2) charges and deductions imposed under the Policy
which are attributable to the hypothetical account. The charges and deductions
include the per unit charges for the hypothetical account for: (1) the annual
Policy fee; (2) the administrative expense charge; and (3) the mortality and
expense risk charge. The $30 annual Policy fee is reflected as an annual 0.10%
charged daily, based on an average Accumulation Value of $30,000.
Yield figures will not reflect the withdrawal charge.
Because of the charges and deductions imposed under the Policy, the
yield for the money market Subaccount will be lower than the yield for the money
market portfolio.
The Securities and Exchange Commission also permits United of Omaha to
disclose the effective yield of the money market Subaccount for the same
seven-day period, determined on a compounded basis. The effective yield is
calculated by compounding the unannualized base period return by adding one to
the base period return, raising the sum to a power equal to 365 divided by 7,
and subtracting one from the result.
The current and effective yields on amounts held in the money market
Subaccount normally will fluctuate on a daily basis. THEREFORE, THE DISCLOSED
YIELD FOR ANY GIVEN PAST PERIOD IS NOT AN INDICATION OR REPRESENTATION OF FUTURE
YIELDS OR RATES OF RETURN. The money market Subaccount's actual yield is
affected by changes in interest rates on money market securities, average
portfolio maturity of the money market portfolio, the types of quality of
portfolio securities held by the money market portfolio and the money market
portfolio's operating expenses.
OTHER SUBACCOUNT YIELDS
From time to time, sales literature or advertisements may quote the
current annualized yield of one or more of the Subaccounts (except the money
market Subaccount) for a Policy for 30-day or one-month periods. The annualized
yield of a Subaccount refers to income generated by the Subaccount over a
specific 30-day or one-month period. Because the yield is annualized, the yield
generated by a Subaccount during a 30-day or one-month period is assumed to be
generated each period over a 12-month period.
The yield is computed by: (a) dividing the net investment income of the
portfolio attributable to the Subaccount Accumulation Units less Subaccount
expenses for the period by the maximum offering price per Accumulation Unit on
the last day of the period times the daily average number of Accumulation Units
outstanding for the period; (b) compounding that yield for a six-month period;
and (c) multiplying that result by 2. Expenses attributable to the Subaccount
include: (a) the annual Policy fee; (b) the administrative expense charge; and
(c) the mortality and expense risk charge. The $30 annual Policy fee is
reflected as an annual 0.10% charged daily in the yield calculation, based on an
average Accumulation Value of $30,000. The 30-day or one-month yield is
calculated according to the following formula:
Yield = [2 {A-B + 1} 6 - 1]
[ cd ]
Where:
a =-- net income of the portfolio for the 30-day or
one-month period attributable to the Subaccount's
Accumulation Units.
b =-- expenses of the Subaccount for the 30-day or one-month period.
c =-- the average number of Accumulation Units outstanding.
d =-- the Accumulation Unit value at the close of the last day in
the 30-day or one-month period.
Because of the charges and deductions imposed under the Policies, the
yield for a Subaccount will be lower than the yield for the corresponding Series
Fund portfolio.
AVERAGE ANNUAL TOTAL RETURNS
From time to time, sales literature or advertisements may also quote
average annual total returns for one or more of the Subaccounts for various
periods of time.
When a Subaccount has been in operation for 1, 5, and 10 years,
respectively, the average annual total return for these periods will be
provided. Until a Subaccount has been in operation for 10 years, we will always
include quotes of average annual total return for the period measured from the
date the Policies were first offered for sale. Average annual total returns for
other periods of time may, from time to time, also be disclosed.
Average annual total returns represent the average annual compounded
rates of return that would equate to an initial investment of $1,000 under a
Policy to the redemption value of that investment as of the last day of each of
the periods. Average annual total returns will be calculated using Subaccount
Accumulation Unit values which we calculate at the end of each Valuation Period
based on the performance of the Subaccount's underlying portfolio, the
deductions for (a) the annual Policy fee; (b) the administrative expense charge;
and (c) the mortality and expense risk charge. The $30 annual Policy fee is
reflected as an annual 0.10% charged daily in the calculation of average annual
total returns, based on an anticipated average Accumulation Value of $30,000.
The calculation also assumes surrender of the Policy at the end of the period
for the return quotation. The total return will then be calculated according to
the following formula:
P(1+TR) n = ERV
Where:
P =-- a hypothetical initial purchase payment of $1,000
TR =-- the average annual total return.
ERV =-- the ending redeemable value of the hypothetical account at the
end of the period.
n =-- the number of years in the period.
PERFORMANCE DATA. Effective yields and total returns for the Subaccounts
are based on the investment performance of the corresponding portfolios of the
Series Funds. The Series Funds' performance in part reflects the Series Funds'
expenses. See the prospectuses for the Series Funds
The yield of a Subaccount (except the money market Subaccount) refers to
the annualized income generated by an investment in the Subaccount over a
specified 30-day or one-month period. The yield is calculated by assuming that
the income generated by the investment during that 30-day or one-month period is
generated each period over a 12-month period and is shown as a percentage of the
investment.
Such average annual total return information for the Subaccounts of
Policies is as follows:
<PAGE>
- ---------------------------------------------- -------------
SUBACCOUNT From
TOTAL RETURN Inception
Subaccount (date of inception) To 12/31/99
%
- ---------------------------------------------- -------------
Alger American Growth (8/14/98)
Alger American Small Capitalization (8/14/98)
Deutsche VIT EAFE Equity Index Fund (5/1/00)
Deutsche VIT Small Cap Equity Index Fund (5/1/00)
Federated Prime Money Fund II (8/14/98)
Federated Fund for U.S. Govt. Securities II (8/14/98)
Fidelity VIP II Asset Manager (8/14/98)
Fidelity VIP II Contrafund (8/14/98)
Fidelity VIP Equity Income (8/14/98)
Fidelity VIP II Index 500 (8/14/98)
MFS Emerging Growth Series (8/14/98)
MFS High Income Series (8/14/98)
MFS Research Series (8/14/98)
MFS Capital Opportunities Series (8/14/98)
MFS Global Governments Series (8/14/98)
MSDW Emerging Markets Equity (8/14/98)
MSDW Fixed Income (8/14/98)
Pioneer Midcap Value Fund (8/14/98)
Pioneer Equity Income (5/1/00)
Pioneer Growth Shares (5/1/00)
Pioneer Fund (5/1/00)
Pioneer Real Estate Growth (8/14/98)
Scudder VLIF Global Discovery (8/14/98)
Scudder VLIF Growth & Income (8/14/98)
Scudder VLIF International (8/14/98)
T. Rowe Price Personal Strategy Balanced (8/14/98)
T. Rowe Price Equity Income (8/14/98)
T. Rowe Price International (8/14/98)
T. Rowe Price Limited-Term Bond (8/14/98)
T. Rowe Price New America Growth (8/14/98)
THE FIGURES ABOVE ARE AN INDICATION OF PAST, BUT NOT FUTURE, PERFORMANCE OF THE
APPLICABLE SUBACCOUNTS AVAILABLE UNDER THE POLICY.
ADJUSTED HISTORICAL PERFORMANCE DATA. We may, from time to time, also
disclose yield, standard total returns, and non-standard total returns for the
Portfolios of the Series Funds, including such disclosure for periods prior to
the dates the Subaccounts commenced operations. For periods prior to the date
the Subaccount commenced operations, performance information for Policies will
be calculated based on the performance of the Series Fund Portfolios and the
assumption that the Subaccounts were in existence for the same periods as those
indicated for the Series Fund Portfolios, with the level of Policy charges that
were in effect at the inception of the Subaccounts (this is referred to as
"adjusted historical" performance data). Such standardized but "adjusted
historical" average annual total return information for the Subaccounts of
Policies is as follows:
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------- --------- --------- ------------ ============
SUBACCOUNT 1 Year 5 Years 10 Years Since
"ADJUSTED HISTORICAL" Ended Ended Ended Inception
AVERAGE ANNUAL TOTAL RETURN TABLE 12/31/99 12/31/99 12/31/99 to 12/31/99
Subaccount (date of inception of corresponding % % % %
portfolio)
- ------------------------------------------------- --------- --------- ------------ ============
<S> <C> <C> <C> <C>
Alger American Growth (1/9/89)
Alger American Small Capitalization (9/21/88)
Deutsche VIT EAFE Equity Index Fund ( )
Deutsche VIT Small Cap Equity Index Fund ( )
Federated Prime Money Fund II (11/21/94)
Federated Fund for U.S. Government Securities (3/28/94)
Fidelity VIP II Asset Manager (1/3/95)
Fidelity VIP II Contrafund (1/3/95)
Fidelity VIP Equity Income (10/9/86)
Fidelity VIP II Index 500 (8/27/92)
MFS Emerging Growth Series (7/24/95)
MFS High Income Series (7/26/95)
MFS Research Series (7/26/95)
MFS Capital Opportunities Series (8/14/96)
MFS Global Governments Series (6/14/95)
MSDW Emerging Markets Equity (10/1/96)
MSDW Fixed Income (1/2/97)
Pioneer Midcap Value Fund (3/1/95)
Pioneer Equity-Income ( )
Pioneer Growth Shares ( )
Pioneer Fund ( )
Pioneer Real Estate Growth (3/1/95)
Scudder VLIF Global Discovery (5/2/97)
Scudder VLIF Growth & Income (5/1/97)
Scudder VLIF International (5/1/87)
T. Rowe Price Personal Strategy Balanced
(12/31/94)
T. Rowe Price Equity Income (3/31/94)
T. Rowe Price International (3/31/94)
T. Rowe Price Limited Term Bond (5/13/94)
T. Rowe Price New America Growth (3/31/94)
</TABLE>
THE FIGURES ABOVE ARE NOT AN INDICATION OF PRESENT, PAST, OR FUTURE PERFORMANCE
OF THE APPLICABLE SUBACCOUNTS OR OF THE ACTUAL PORTFOLIOS AVAILABLE UNDER THE
POLICY.
We may disclose cumulative total returns in conjunction with the
standard formats described above. The cumulative total returns will be
calculated using the following formula:
CTR = (ERV/P) - 1
Where:
CTR = -- The cumulative total return net of Subaccount recurring
charges for the period.
ERV = -- The ending redeemable value of the hypothetical investment
at the end of the period.
P = -- A hypothetical initial purchase payment of $1,000.
OTHER PERFORMANCE INFORMATION
The following is a partial list of those publications which may be cited
in the Series Funds' advertising shareholder materials which contain articles
describing investment results or other data relative to one or more of the
Subaccounts. Other publications may also be cited.
<PAGE>
Across the Board
Advertising Age
American Banker
Barron's
Best's Review
Broker World
Business Insurance
Business Month
Business Week
Changing Times
Consumer Reports
Economist
Financial Planning
Financial World
Forbes
Fortune
Inc.
Institutional Investor
Insurance Forum
Insurance Sales
Insurance Week
Journal of Accountancy
Journal of the American Society
of CLU & ChFC
Journal of Commerce
Life Association News
Life Insurance Selling
Manager's Magazine
Market Facts
Money
<PAGE>
OTHER INFORMATION
A registration statement has been filed with the Securities and Exchange
Commission ("SEC"), under the Securities Act of 1933 as amended, with respect to
the Policies discussed in this Statement of Additional Information. Not all of
the information set forth in the Registration Statement, amendments and exhibits
thereto has been included in the Prospectus or this Statement of Additional
Information. Statements contained in the Prospectus and this Statement of
Additional Information concerning the content of the Policies and other legal
instruments are intended to be summaries. For a complete statement of the terms
of these documents, refer to the instruments filed with the SEC. They may be
accessed on the SEC's Web site: HTTP://WWW.SEC.GOV.
FINANCIAL STATEMENTS
This Statement of Additional Information contains financial statements
for the Variable Account as of December 31, 1999 and for the years ended
December 31, 1999 and 1998 which have been audited by Deloitte & Touche, LLP,
independent auditors, Omaha, Nebraska, as stated in their report appearing
herein.
The Financial Statements of United of Omaha Life Insurance Company as of
December 31, 1999 and 1998, and for the three years ended December 31, 1997,
1998 and 1999 included in this Statement of Additional Information have been
audited by Deloitte & Touche LLP, independent auditors, Omaha, Nebraska, as
stated in their report appearing herein. The financial statements of United of
Omaha Life Insurance Company should be considered only as bearing on our ability
to meet its obligations under the Policies. They should not be considered as
bearing on the investment performance of the assets held in the Variable
Account.
<PAGE>
[AUDITED FINANCIAL STATEMENTS OF UNITED OF OMAHA and THE UNITED SEPARATE ACCOUNT
C WILL BE INSERTED HERE BY SUBSEQUENT POST-EFFECTIVE AMENDMENT BEFORE THIS
AMENDED REGISTRATION BECOMES EFFECTIVE.]
<PAGE>
PART C OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
All required financial statements are included in Part B of this
Registration Statement.
(b) Exhibits: The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
(1) (a) Resolution of the Board of Directors of United of Omaha Life
Insurance Company establishing the Variable Account. *
(2) Not applicable.
(3) (a) Principal Underwriter Agreement by and between United of
Omaha Life Insurance Company, on its own behalf and on behalf
of the Variable Account, and Mutual of Omaha Investor Services,
Inc. *
(b) Form of Broker/Dealer Supervision and Sales Agreement by
and between Mutual of Omaha Investor Services, Inc. and the
Broker/Dealer.*
(4) (a) Form of Policy for the Ultra-Access variable annuity Policy.***
(b) Form of Riders to the Policy.*
(1) Systematic Transfer Enrollment Program Endorsement to the
Policy. ***
(5) Form of Application to the Policy. *
(6) (a) Articles of Incorporation of United of Omaha Life Insurance
Company.*
(b) Bylaws of United of Omaha Life Insurance Company.*
(7) Not applicable.
(8) (a) Participation Agreement by and between United of Omaha Life
Insurance Company and the Alger American Fund*
(b) Participation Agreement by and between United of Omaha Life
Insurance Company and the Insurance Management Series*
(c) Participation Agreement by and between United of Omaha Life
Insurance Company and the Fidelity VIP Fund and Fidelity VIP
Fund II.*
(d) Participation Agreement by and between United of Omaha Life
Insurance Company and the MFS Variable Insurance Trust.*
(e) Participation Agreement by and between United of Omaha Life
Insurance Company and the Pioneer Variable Contracts Trust.*
(f) Participation Agreement by and between United of Omaha Life
Insurance Company and the Scudder Variable Life Investment
Fund.*
(g) Participation Agreement by and between United of Omaha Life
Insurance Company and T. Rowe Price International Series,
T. Rowe Price Fixed Income Series, and T. Rowe Price Equity
Series.*
(h) Participation Agreement by and between United of Omaha Life
Insurance Company and Morgan Stanley Universal Fund, et. al.***
(i) Participation Agreement by and between United of Omaha Life
Insurance Company and BT Insurance Funds Trust.#
(9) Opinion and Consent of Counsel.#
(10) Consents of Independent Auditors.#
(11) Not applicable.
(12) Not applicable.
(13) Schedules of Computation of Performance Data.#
(14) Powers of Attorney.**
* Incorporated by reference to the Registration Statement for United of Omaha
Separate Account C filed on April 24, 1997 (File No. 33-89848).
** Incorporated by reference to the Registration Statement for United of Omaha
Separate Account C filed on April 26, 1999 (File No. 33-89848).
*** Incorporated by reference to the Registration Statement for United of Omaha
Separate Account C filed on April 26, 1999 (File No. 33-89848).
# To be filed by a post-effective amendment filed before the effective date of
this Amended Registration.
ITEM 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Our Directors and senior officers are:
DIRECTORS*
Samuel L. Foggie, Sr. Retired Banking and Finance Industry Executive
Carol B. Hallett President and CEO, Air Transport Association of America
Jeffrey M. Heller President & COO, Electronic Data Systems
Thomas W. Osborne University of Nebraska Alumni Association
Richard J. Sampson Retired Insurance Executive of our Company
Oscar S. Straus II- Chairman, The Daniel and Florence Guggenheim Foundation
John A. Sturgeon President and COO of our Company
Michael A. Wayne John Wayne Cancer Institute and John Wayne Foundation
Executive
John W. Weekly Chairman of the Board and CEO of our Company
SENIOR OFFICERS*
John W. Weekly Chairman and Chief Executive Officer
John A. Sturgeon President and Chief Operating Officer
G. Ronald Ames Executive Vice President
Cecil D. Bykerk Executive Vice President (Chief Actuary)
James L. Hanson Executive Vice President (Information Services)
Randall C. Horn Executive Vice President (Individual Insurance)
M. Jane Huerter Executive Vice President (Corporate Secretary)
William C. Mattox Executive Vice President (Federal Government Affairs)
Thomas J. McCusker Executive Vice President (General Counsel)
Daniel P. Neary Executive Vice President (Group Insurance)
Tommie D. Thompson Executive Vice President (Treasurer;Comptroller)
Richard A. Witt Executive Vice President (Chief Investment Officer)
*Business address for all directors and officers is Mutual of Omaha
Plaza, Omaha, Nebraska 68175.
ITEM 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
<TABLE>
<CAPTION>
Name of Corporation (where organized) Type of Corporation
<S> <C>
Mutual of Omaha Insurance Company (NE) Accident & Health Insurance
KFS Corporation (NE) Holding Corporation
Fulcrum Growth Partners, L.L.C. (NE) Investment Partnership
Kirkpatrick, Pettis, Smith, Polian Inc. (NE) Registered broker-dealer & investment advisor
KPM Investment Management, Inc. (NE) Investment advisor
Kirkpatrick Pettis Trust Company (NE) Trust company
Mutual of Omaha Health Plans, Inc. (NE) Holding corporation
Exclusive Healthcare, Inc. (NE) HMO
Mutual of Omaha Health Plans of Lincoln, Inc.(NE) Staff Model HMO
Preferred Health Alliance, Inc. (NE) Joint venture w/physician & hospital organization
Mutual of Omaha Health Plans of Ohio, Inc. (OH) HMO
Mutual of Omaha of South Dakota & Community Health
Plus HMO, Inc. (SD) HMO
Mutual of Omaha Holdings, Inc. (NE) Holding corporation
innowave incorporated (NE) Markets water distillation products
Mutual Asset Management Co. (NE) Asset management services
Mutual of Omaha Investor Services, Inc. (NE) Registered securities Broker-Dealer
Mutual of Omaha Marketing Corporation (NE) Markets health insurance
Mutual of Omaha U.K. Limited (U.K.) Insurance in United Kingdom (inactive)
The Omaha Indemnity Company (WI) Property & casualty insurance (inactive)
Omaha Property and Casualty Insurance Company (NE) Property & casualty insurance
Adjustment Services, Inc. (NE) Claims adjusting services
United of Omaha Life Insurance Company (NE) Life, H&A insurance/annuities
Companion Life Insurance Company (NY) Life insurance/annuities
Mutual of Omaha Structured Settlement Company, Inc. (CT) Structured settlements
Mutual of Omaha Structure Settlement Company of
New York, Inc. (NY) Structured settlements
United World Life Insurance Company (NE) Accident & health and life insurance
</TABLE>
*Subsidiaries of subsidiaries are indicated by indentations.
ITEM 27. NUMBER OF POLICYOWNERS
As of December 31, 1999, there were [ ] Owners of the Policies.
ITEM 28. INDEMNIFICATION
The Nebraska Business Corporation Act (Section 21-2004(15)) provides for
permissive indemnification in certain situations, mandatory indemnification in
other situations, and prohibits indemnification in certain situations. The
Nebraska Business Corporation Act also specifies procedures for determining when
indemnification payments can be made.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
United of Omaha Life Insurance Company pursuant to the foregoing provisions, or
otherwise, United 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 United of
expenses incurred or paid by a director, officer or controlling person in
connection with the securities being registered), United 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. With respect to
indemnification, Section XI of United's Articles of Incorporation provides as
follows:
An outside director of the Company shall not be personally liable
to the Company or its Stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for: (i) any act or
omission not in good faith which involves intentional misconduct or a
knowing violation of the law; (ii) any transaction from which the outside
director derived an improper direct or indirect financial benefit; (iii)
paying or approving a dividend which is in violation of Nebraska law; (iv)
any act or omission which violates a declaratory or injunctive order
obtained by the Company or its Stockholders; and (v) any act or omission
occurring prior to the effective date of the amendments to the Articles of
Incorporation of the Company incorporating this ARTICLE XI.
For purposes of this ARTICLE XI, an outside director shall mean a
member of the Board of Directors who is not an officer or a person who may
control the conduct of the Company through management agreements, voting
trusts, directorships in related corporations, or any other device or
relationship.
If the Nebraska Business Corporation Act is amended after
approval by the Stockholders of this ARTICLE XI to authorize corporate
action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Company shall be
eliminated or limited to the fullest extent permitted by the Nebraska
Business Corporation Act as so amended.
Any repeal or modification of the foregoing ARTICLE XI by the
Stockholders of the Company shall not adversely affect any right or
protection of a director of the Company existing at the time of such
repeal or modification.
Article VII of United of Omaha's Bylaws provides as follows:
Any person made or threatened to be made a party to any action or
proceeding, whether civil or criminal, by reason of the fact that such
person then is or was a director, officer, employee, or agent of the
Company (or is or was serving at the request of the Company in any such
capacity for an other legal entity or enterprise, shall be indemnified by
the Company against expense, judgements, fines, and amounts paid in
settlement to the full extent that such persons are permitted to be
indemnified by the laws of the State of Nebraska as in effect as of any
date of determination. The provisions of this Article shall not adversely
affect any right to indemnification which any person may have apart from
the provisions of this Article.
ITEM 29. PRINCIPAL UNDERWRITER
(a) In addition to Registrant, Mutual of Omaha Investor Services,
Inc. is the principal underwriter for policies offered by United of Omaha Life
Insurance Company through United of Omaha Separate Account B and offered by
Companion Life Insurance Company through Companion Life Separate Account C and
Companion Life Separate Account B.
(b) The directors and principal officers of Mutual of Omaha Investor
Services, Inc. (principal address: Mutual of Omaha Plaza, Omaha, Nebraska 68175)
are as follows:
NAME TITLE
---- -----
John W. Weekly Chairman, Director
Richard A. Witt President, Director
M. Jane Huerter Secretary and Director
Brian P. McGinty Director
Randall C. Horn Director
William J. Bluvas Vice President, Treasurer
(c) Mutual of Omaha Investor Services, Inc. is the principal
underwriter of the Policies. Commissions payable to a broker-dealer will be up
to 7.5% of purchase payments. For the fiscal year ended December 31, 1999,
United paid $[ ] in total compensation to MOIS; of this amount MOIS retained $[
] as concessions for its services as principal underwriter and for distribution
concessions, with the remaining amount paid to other broker-dealers.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The records required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and Rules 31a-1 to 31a-3 promulgated thereunder,
are maintained by United of Omaha Life Insurance Company at Mutual of Omaha
Plaza, Omaha, Nebraska 68175.
ITEM 31. MANAGEMENT SERVICES.
All management policies are discussed in Part A or Part B of this
registration statement.
ITEM 32. UNDERTAKINGS
(a)Registrant undertakes that it will file a post-effective
amendment 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 purchase payments under the Policy may be
accepted.
(b)Registrant undertakes that it will include either (i) a postcard
or similar written communication affixed to or included in the Prospectus that
the applicant can remove to send for a Statement of Additional Information or
(ii) a space in the Policy application that an applicant can check to request a
Statement of Additional Information.
(c)Registrant undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this form promptly upon written or oral request to United at the address or
phone number listed in the Prospectus.
(d) Registrant represents that the fees and charges under the
Policy, in the aggregate, are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by United.
SECTION 403(B) REPRESENTATIONS
United represents that it is relying on a no-action letter dated
November 28, 1988, to the American Council of Life Insurance (Ref. No. IP-6-88),
regarding Sections 22(e), 27(c)(1), and 27(d) of the Investment Company Act of
1940, in connection with redeemability restrictions on Section 403(b) Policies,
and that paragraphs numbered (1) through (4) of that letter will be complied
with.
STATEMENT PURSUANT TO RULE 6C-7: TEXAS OPTIONAL RETIREMENT PROGRAM
United and the Variable Account rely on 17 C.F.R. ss. 270.6c-7, and
represent that the provisions of that Rule have been or will be complied with.
<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 registration statement and has caused
this post-effective amendment No.8 to the registration statement to be signed on
its behalf, in the City of Omaha and State of Nebraska, on February 29, 2000.
UNITED OF OMAHA SEPARATE ACCOUNT C
UNITED OF OMAHA LIFE INSURANCE COMPANY
Depositor
/s/ Thomas J. McCusker
---------------------------------------
By: Thomas J. McCusker
As required by the Securities Act of 1933, this post-effective amendment
No. 8 to the registration statement has been signed by the following persons on
February 29, 2000 in the capacities and on the duties indicated.
SIGNATURES TITLE DATE
by__________________________* Chairman of the Board, 2/29/00
John W. Weekly Chief Executive Officer
by__________________________* President, Chief Operation Officer, 2/29/00
John A. Sturgeon Director
by__________________________* Treasurer and Comptroller 2/29/00
Tommie Thompson (Principal Financial Office
and Principal Accounting Officer)
by__________________________ * Director 2/29/00
Samuel Foggie
by__________________________* Director 2/29/00
Carol B. Hallett
by__________________________* Director 2/29/00
Jeffrey M. Heller
by__________________________* Director 2/29/00
Thomas W. Osborn
by_________________________* Director 2/29/00
Richard J. Sampson
by________________________* Director 2/29/00
Oscar S. Straus
by_______________________* Director 2/29/00
Michael A. Wayne
* Signed by Thomas J. McCusker under Powers of Attorney effective January 1,
1999.
