AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 15, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
UNITED OF OMAHA SEPARATE ACCOUNT B
(EXACT NAME OF TRUST)
UNITED OF OMAHA LIFE INSURANCE COMPANY
(NAME OF DEPOSITOR)
Mutual of Omaha Plaza, Omaha, Nebraska 68175
NAME AND ADDRESS OF
AGENT FOR SERVICE:
Kenneth W. Reitz, Esquire
Mutual of Omaha Companies
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska 68175-1008
Telephone: (402) 351-5087
Fax: (402) 351-5906
Approximate date of proposed public offering:
As soon as practicable after effectiveness of the Registration Statement
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
(TITLE, AMOUNT, AND PROPOSED MAXIMUM OFFERING PRICE OF
SECURITIES BEING REGISTERED)
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the Registrant
declares that an indefinite amount of securities are being registered under the
Securities Act of 1933. The Securities Act registration fee of $500 is being
paid with this initial filing.
-------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
shall determine.
<PAGE>
UNITED OF OMAHA SEPARATE ACCOUNT B
Registration Statement on Form S-6
Cross-Reference Sheet
FORM N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
1 Cover Page
2 Cover Page
3 Inapplicable
4 Distribution of the Policies
5 About Us
6 The Variable Account
9 Inapplicable
10(a) Policy Application and Issuance
10(b) Distributions
10(c),(d),(e) Distributions; Lapse and Grace Period; Reinstatement
10(f),(g),(h) Voting Rights; Other Policy Owner Tax Matters
10(i) Other Policy Provisions
11 The Variable Account
12 The Variable Account; Distribution of the Policies
13 Charges and Fees; Tax Matters; Tax Treatment of Loans and
Other Distributions; Distribution of the Policies; Appendix A
14 Premium Payments
15 Premium Payments
16 The Variable Account
17 Captions referenced under Items 10(c), (d), (e) and (i) above
18 The Variable Account
19 Reports to You; Voting Rights; Distribution of the Policies
20 Captions referenced under Items 6 and 10(g) above
21 Policy Loans
22 Inapplicable
23 Distribution of the Policies
24 Other Policy Provisions
25 About Us
26 Distribution of the Policies
27 About Us
28 Management
29 About Us
30 Inapplicable
31 Inapplicable
32 Inapplicable
33 Inapplicable
34 Inapplicable
35 About Us
36 Inapplicable
37 Inapplicable
38 Distribution of the Policies
39 Distribution of the Policies
40 Inapplicable
41(a) Distribution of the Policies
42 Inapplicable
43 Inapplicable
44(a) The Variable Account; Premium Payments
<PAGE>
44(b) Charges and Fees; Distribution of the Policies
44(c) Mortality and Expense Risk Charge
45 Inapplicable
46 The Variable Account; Captions referenced under Items 10(c),
(d) and (e) above
47 Inapplicable
48 About Us
49 Inapplicable
50 The Variable Account
51 Cover Page, Definitions (Beneficiary), Summary, The Policy,
Payment of Proceeds, Payment Options, Tax Matter,
Distribution of the Policies
52 Other Policy Owner Tax Matters
53 Tax Matters
54 Inapplicable
55 Inapplicable
59 Financial Statements
<PAGE>
[GRAPHIC OMITTED] PROSPECTUS: Dated ______________, 1997
United of Omaha
A Mutual of Omaha Company ULTRA VARIABLE LIFE
Individual Flexible Premium
Variable Universal Life Insurance Policy
This prospectus describes ULTRA VARIABLE LIFE, an individual flexible premium
variable universal life insurance policy ("Policy") offered by United of Omaha
Life Insurance Company ("we, us, our, United of Omaha") to applicants age 90 and
under.
The Policy provides for the payment of a Death Benefit upon the death of the
Insured, and for a Cash Surrender Value that can be obtained by surrendering the
Policy. The Policy is designed to provide insurance protection on the life of
the Insured, and at the same time provide the Policy Owner with the flexibility
to vary the amount and timing of premium payments and, within certain limits, to
change the amount of Death Benefits payable under the Policy. This flexibility
permits the Owner to provide for changing insurance needs with a single
insurance policy. The Policy is a variable policy because the Death Benefit may,
and the Accumulation Value will, vary up or down to reflect the investment
experience of amounts allocated to UNITED OF OMAHA SEPARATE ACCOUNT B (the
"Variable Account"). The Policy Owner ("you, your") bears the investment risk
for all amounts so allocated; there is no guaranteed minimum Accumulation Value.
The minimum initial Specified Amount is $100,000. The Policy provides premium
flexibility so long as the Accumulation Value is sufficient for Policy insurance
coverage to remain in force.
You may, within limits, allocate premiums (net of any charges) to one or more of
the twenty-four eligible investments, which are the twenty-three Subaccounts of
the Variable Account and the Fixed Account. Assets of each Subaccount of the
Variable Account are invested in a corresponding mutual fund Portfolio. The
Portfolios are described in separate prospectuses that accompany this
Prospectus. The Policy's available investment options are:
ALGER AMERICAN GROWTH PORTFOLIO
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO
FEDERATED PRIME MONEY FUND II ("MONEY MARKET") PORTFOLIO
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES PORTFOLIO
FIDELITY ASSET MANAGER: GROWTH PORTFOLIO
FIDELITY EQUITY INCOME PORTFOLIO
FIDELITY CONTRAFUND PORTFOLIO
FIDELITY INDEX 500 PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
MFS HIGH INCOME FUND PORTFOLIO
MFS RESEARCH PORTFOLIO
MFS WORLD GOVERNMENT PORTFOLIO
MFS VALUE SERIES PORTFOLIO
PIONEER CAPITAL GROWTH PORTFOLIO
PIONEER REAL ESTATE PORTFOLIO
SCUDDER GLOBAL DISCOVERY PORTFOLIO
SCUDDER GROWTH & INCOME PORTFOLIO
SCUDDER INTERNATIONAL PORTFOLIO
T. ROWE PRICE EQUITY INCOME PORTFOLIO
T. ROWE PRICE INTERNATIONAL PORTFOLIO
T. ROWE PRICE LIMITED TERM BOND PORTFOLIO
T. ROWE PRICE NEW AMERICA GROWTH PORTFOLIO
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO
FIXED ACCOUNT
Partial withdrawals and Policy loans may be taken from time to time, subject to
certain restrictions. ANY POLICY LOAN, PARTIAL WITHDRAWAL OR SURRENDER MAY
RESULT IN ADVERSE TAX CONSEQUENCES AND/OR PENALTIES. WITHDRAWALS AND SURRENDERS
MAY BE SUBJECT TO A SURRENDER CHARGE.
IT MAY NOT BE ADVANTAGEOUS TO REPLACE EXISTING LIFE INSURANCE WITH THE POLICY
DESCRIBED IN THIS PROSPECTUS.
AN INTEREST IN THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY ANY BANK, NOR IS THE POLICY FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR EACH PORTFOLIO.
ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
UNITED OF OMAHA LIFE INSURANCE COMPANY, P. O. Box 8430,
Omaha, Nebraska 68103-0430 (800) 238-9354
2
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TABLE OF CONTENTS
PAGE
DEFINITIONS
SUMMARY
o BASIC FEATURES OF YOUR POLICY
o COMPARISON TO OTHER POLICIES AND OTHER INVESTMENTS
o POLICY FLOW CHART
ABOUT US
ALLOCATION OF PREMIUMS
o THE VARIABLE ACCOUNT
o THE FIXED ACCOUNT
o TRANSFERS
o DOLLAR COST AVERAGING
o ASSET ALLOCATION PROGRAM
THE POLICY
o POLICY APPLICATION AND ISSUANCE
o PREMIUM PAYMENTS
o ACCUMULATION VALUE
o LAPSE AND GRACE PERIOD
o REINSTATEMENT
o TELEPHONE TRANSACTIONS
o MATURITY DATE
DISTRIBUTIONS
o POLICY LOANS
o SURRENDER
o PARTIAL WITHDRAWALS
o DEATH BENEFIT
o PAYMENT OF PROCEEDS
o PAYMENT OPTIONS
CHARGES AND FEES
o CHARGES DEDUCTED FROM THE POLICY
DEDUCTIONS FROM INITIAL PREMIUM; MONTHLY DEDUCTIONS; CHARGES DEDUCTED ON
SURRENDER OR PARTIAL WITHDRAWAL
o MORE INFORMATION ABOUT THE ABOVE CHARGES
SURRENDER CHARGE; WAIVER OF SURRENDER CHARGE; RISK CHARGE; ADMINISTRATIVE
CHARGE; PREMIUM CHARGES; COST OF INSURANCE CHARGE; TRANSFER CHARGE
o SERIES FUND CHARGES
OTHER POLICY PROVISIONS
o NOTICE TO US; ENTIRE CONTRACT; RIGHT TO EXAMINE; DELAY OF PAYMENTS; CHANGE
OF OWNERSHIP AND ASSIGNMENT; BENEFICIARY; BENEFICIARY CHANGE; MISSTATEMENT
OF AGE OR SEX; SUICIDE; INCONTESTABILITY; COVERAGE BEYOND MATURITY;
REINSTATEMENT; NONPARTICIPATING
TAX MATTERS
MANAGEMENT
OTHER INFORMATION
o REPORTS TO YOU; VOTING RIGHTS;
DISTRIBUTION OF THE POLICIES; STATE REGULATION;
LEGAL MATTERS; INDEPENDENT AUDITORS; REGISTRATION STATEMENT
ILLUSTRATIONS
o DEATH BENEFIT, CASH SURRENDER VALUE AND ACCUMULATED PREMIUMS
FINANCIAL STATEMENTS
3
<PAGE>
THIS PROSPECTUS IS NOT AN OFFERING ANYWHERE WHERE SUCH AN OFFERING CANNOT BE
LAWFULLY MADE. NO ONE IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
REPRESENTATIONS ABOUT THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF THEY DO, YOU SHOULD NOT RELY UPON SUCH REPRESENTATIONS.
4
<PAGE>
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DEFINITIONS
ACCUMULATION UNITS means an accounting unit of measure used to calculate the
accumulation value of the Variable Account.
ACCUMULATION VALUE means the dollar value as of any Valuation Date of all
amounts accumulated under the Policy.
ALLOCATION DATE means the first business day following the completion of the
RIGHT TO EXAMINE THIS POLICY period.
BENEFICIARY refers to the person(s) or entity you name to receive the Death
Benefit of the Policy.
CASH SURRENDER VALUE means the Accumulation Value, less any outstanding Policy
loans and unpaid loan interest, and less any applicable Surrender Charge.
CORRIDOR AMOUNT means the Accumulation Value multiplied by the corridor
percentage for the Insured's attained age.
FIXED ACCOUNT means the account which consists of general account assets of
United of Omaha Life Insurance Company.
INSURED refers to the individual named on the application whose life is the
basis for the death benefit protection provided by the Policy.
LOAN ACCOUNT means an account established for any amounts transferred from the
Fixed Account and Subaccounts as a result of loans. The Loan Account is credited
with interest and is not based on the investment experience of the Variable
Account.
MONTHLY DEDUCTION DATE means the date of issue and the same date each month
thereafter.
MONTHLY DEDUCTION means the amount deducted from the Policy's Accumulation Value
on each Monthly Deduction Date.
NET AMOUNT AT RISK means the death benefit less the Accumulation Value on the
Monthly Deduction Date after deducting the rider charges, if any, the risk
charge for the current month, and the administrative charge.
PAYEE refers to the person who receives payments under the Policy.
POLICY means the individual flexible premium variable life insurance contract
issued to you pursuant to our acceptance of your application for it.
POLICY OWNER refers to you, the person that applied for the Policy.
POLICY YEAR/MONTH/ANNIVERSARY means respective anniversary dates from the Date
of Issue.
PORTFOLIO means a separate mutual fund investment portfolio that is available
under the Policy.
PREMIUM means an amount paid by you to us as consideration for the benefits
provided by the Policy.
PROCEEDS means the Death Benefit, Cash Surrender Value, or Proceeds payable upon
the Maturity Date.
SPECIFIED AMOUNT means the amount of insurance selected, as shown on the
Policy's Data page.
SUBACCOUNT means that portion of the Variable Account which invests in shares of
a specific mutual fund portfolio or any other investment portfolios that we make
available Policy.
VALUATION DATE means each day that the New York Stock Exchange is open for
trading.
VARIABLE ACCOUNT means United of Omaha Separate Account B, a separate account
maintained by us in which a portion of our assets has been allocated for the
Policy and certain other policies.
WE, US, OUR, UNITED OF OMAHA refers to United of Omaha Life Insurance Company,
Omaha, Nebraska.
YOU, YOUR refers to the Policy Owner.
5
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SUMMARY
o BASIC FEATURES OF YOUR POLICY
The individual flexible premium variable life insurance Policy offered by
this prospectus is designed to provide lifetime insurance coverage for the
Insured named in the Policy. It is not offered primarily as an investment. This
is a brief description of the basic features of the Policy. Policy features are
explained in more detail throughout the prospectus.
o RIGHT TO EXAMINE. You have the right to return the Policy within 10 days (or
more where required by applicable State insurance law) after you receive it
or 45 days after you signed the application, whichever is later. We will
return to you the premiums paid. (SEE "OTHER POLICY PROVISIONS: RIGHT TO
EXAMINE.")
o PREMIUM PAYMENTS. You must pay an initial premium at least sufficient to
purchase the minimum initial Specified Amount of life insurance coverage
($100,000). Unless the Accumulation Value is sufficient to maintain this
Specified Amount, you must pay additional premiums sufficient to maintain a
Specified Amount of $100,000 coverage for the first five Policy Years;
thereafter you must maintain a Specified Amount of at least $50,000. You may
also make payments in addition to planned premiums. (SEE "THE POLICY: PREMIUM
PAYMENTS.")
o NO LAPSE GUARANTEE. If either the minimum monthly premium or the lifetime
monthly premium requirement has been met, and the Policy has never been
reinstated, and no Additional Insured Term Insurance Rider covering the
Insured is attached to the Policy, the Policy is guaranteed to not lapse for
a certain period of time. (SEE "POLICY NO-LAPSE PERIOD")
o INVESTMENT OF PREMIUMS. Your initial premium and any additional payments will
be held in the Money Market Subaccount until the end of the Right to Examine
period, when your initial premium is invested according to your instructions
in one or more of the Subaccounts of the Variable Account corresponding to
mutual fund portfolios or the Fixed Account. Allocations must be in whole
percentages. (SEE "ALLOCATION OF PREMIUMS.")
o TRANSFERS. Once we mail the confirmation for the initial premium payment,
and after the Right to Examine period, you may transfer portions of the
Policy's Accumulation Value without charge among the Subaccounts and Fixed
Account up to twelve times each Policy Year. Subsequent transfers may have
charges. (SEE "ALLOCATION OF PREMIUMS: TRANSFERS.")
o FLUCTUATING ACCUMULATION VALUE. The Accumulation Value of the Policy will
vary daily based on, among other things, the net investment experience of the
Subaccounts to which you have allocated amounts. The Accumulation Value is
not guaranteed. You bear the investment risk with respect to the Accumulation
Value that is invested in the Subaccounts, and we bear the investment risk
with respect to the Accumulation Value that is invested in the Fixed Account.
o DEATH BENEFIT. You select one of two Death Benefit options. Death benefit
option 1 equals the greater of (a) the Specified Amount on the date of death,
less any loans and unpaid loan interest; or (b) the Policy's Accumulation
Value on the date of death plus a corridor amount for the Insured's attained
age, less any loans and unpaid loan interest. Death benefit option 2 equals
the accumulation value plus the greater of (a) specified amount, or (b)
corridor amount, less any loans and unpaid loan interest. (SEE
"DISTRIBUTIONS: DEATH BENEFIT.")
o POLICY LOANS AND PARTIAL WITHDRAWALS. After the first Policy Year (from Date
of Issue in Indiana), a loan privilege is available under the Policy. After
the first Policy Year partial withdrawals also are allowed. Partial
withdrawals are subject to a Surrender Charge and withdrawals and loans may
be taxable and subject to a penalty tax. (SEE "DISTRIBUTIONS: POLICY LOANS,
AND SURRENDER AND PARTIAL WITHDRAWALS.")
o SURRENDERS. The Policy permits full surrender for the Cash Surrender
Value. A Surrender Charge may be deducted upon full surrenders, partial
withdrawals, and the amount of any reductions in Specified Amount of
coverage. A Surrender Charge is applied for 12 Policy Years from the Policy
Date of issue through the Insured's issue age 52, 11 years for issue age 53,
10 years at issue age 54, and 9 Policy Years from issue age 55 and higher.
The Surrender Charge may be waived upon the occurrence of certain events.
Once the Policy is surrendered, all coverage and other benefits under it
cease and cannot be reinstated. (SEE "CHARGES AND FEES.") SURRENDERS MAY BE
TAXABLE AND SUBJECT TO A PENALTY TAX.
o FEDERAL INCOME TAX CONSEQUENCES. Death benefits paid to the Beneficiary under
a life insurance policy generally are not subject to Federal income tax.
Under current law, undistributed increases in cash value of a life insurance
contract generally are not taxable. Pre-death distributions (including
partial withdrawals and loans) from a modified endowment contract are
included in income on an income first basis, and a 10% penalty tax may be
imposed on income distributed before the Policy Owner attains age 59 1/2.
(SEE "TAX MATTERS.")
6
<PAGE>
o COMPARISON TO OTHER POLICIES AND OTHER INVESTMENTS
In many respects the Policy is similar to fixed-benefit life insurance. Like
fixed-benefit life insurance, the Policy offers a death benefit and provides a
cash value, loan privileges and surrender values. The Policy is different from
fixed-benefit life insurance in that the death benefit will in most cases, and
the cash value ("Accumulation Value") will always, vary to reflect the
investment experience of the selected Subaccounts of the Variable Account.
The Policy is designed to provide insurance protection. Although the
underlying mutual fund portfolios to which Accumulation Value may be allocated
invest in securities similar to those in which mutual funds available directly
to the public invest, in many ways the Policy differs from mutual fund
investments. The main differences are:
o The Policy provides a death benefit based on our assumption of an actuarially
calculated risk.
o If the Policy's Accumulation Value (absent a Policy Loan) or Cash Surrender
Value (if there is a Policy Loan) are not enough to pay a Monthly Deduction
Amount, and any unpaid loan interest, and a grace period expires without
a sufficient premium payment, the Policy will lapse with no value. (SEE "THE
POLICY: LAPSE.") If the Policy lapses when Policy loans are outstanding,
adverse tax consequences may result. (SEE "TAX MATTERS: TAX TREATMENT
OF LOANS AND OTHER DISTRIBUTIONS.")
o In addition to sales charges, insurance-related charges not associated with
mutual fund investments are deducted from values of the Policy. These charges
include various insurance, risk, and expense charges.(SEE"CHARGES AND FEES.")
o United of Omaha, not the Policy Owner, owns the mutual fund shares.
(SEE "OTHER INFORMATION: VOTING RIGHTS.")
o Federal income tax liability on any earnings on the mutual fund investment is
deferred until you receive a distribution from the Policy. Transfers from one
underlying fund portfolio to another are accomplished without tax liability
under current law. (SEE "TAX MATTERS: LIFE INSURANCE QUALIFICATION.")
o Dividends and capital gains distributed by the underlying mutual funds are
automatically reinvested and not currently taxable.
o Premature withdrawals may be taxable and 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, although taxation is deferred
until earnings are distributed from the Policy. (SEE "TAX MATTERS:
TAX TREATMENT OF LOANS AND OTHER DISTRIBUTIONS.")
HOW THE POLICY OPERATES
The following chart shows how the Policy operates. For more information,
refer to specific sections of this prospectus.
O POLICY PREMIUM FLOW CHART
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PREMIUM PAYMENTS
o Minimum initial premium required is a planned
premium to maintain the initial Specified Amount of
coverage until the next planned premium is due.
o Additional premium may be required to maintain the
minimum required Specified Amount.
o Payments in addition to planned premiums may be
made, within limits. (SEE "PREMIUM PAYMENTS.")
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------------------------------------------------------------------------
DEDUCTIONS FROM PREMIUMS BEFORE ALLOCATION
o Premium Charges per premium payment:
o 3.75% for state and federal tax expenses.
o $2 for premium processing expenses.
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INVESTMENT OF PREMIUMS
You direct the allocation of initial premiums and any additional payments
among 23 Subaccounts of the Variable Account and the Fixed Account after
the "Right to Examine" period. The Subaccounts invest in corresponding
mutual funds. For information about premium allocation options, rules and
limits, SEE "ALLOCATION OF PREMIUMS."
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7
<PAGE>
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DEDUCTIONS FROM ASSETS
o Monthly Deduction on the Monthly Deduction Date from Accumulation Value for:
o 0.70% (annual rate calculated as a percentage of Accumulation Value)
risk charge during Policy Years 1 through 10; 0.55% after Policy
Year 10.
o $7 administrative charge.
o A Cost of Insurance charge multiplied by the Net Amount at risk.
o Rider Charges
o $10 transfer fee (first 12 transfers per Policy Year free).
o Investment advisory fees and fund expenses are deducted from the assets
of each Fund. (SEE "CHARGES AND FEES.")
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ACCUMULATION VALUE
o Accumulation Value is equal to the initial premium and any additional
premiums, as adjusted each day the New York Stock Exchange is open to
reflect Subaccounts' investment experience, charges deducted and other
Policy transactions (such as transfers and partial surrenders). The
maximum loan amount is 100% of the Cash Surrender Values less interest to
the end of the year, less one monthly deduction.
o Accumulation Value may vary from day to day. There is no minimum
guaranteed Accumulation Value. The Policy may lapse, subject to the No
Lapse Period, even if there is no Policy loan. (SEE "THE POLICY: LAPSE AND
GRACE PERIOD," "THE POLICY: NO LAPSE PERIOD," AND "DISTRIBUTIONS: POLICY
LOANS.")
o Accumulation Value can be transferred among the Subaccounts and the Fixed
Account. SEE "ALLOCATION OF PREMIUM" for rules and limits. Policy loans
reduce the amount available for allocations and transfers.
o Dollar cost averaging and asset rebalancing programs are available. (SEE
"ALLOCATION OF PREMIUM.")
o Accumulation Value is the starting point for calculating certain values
under a Policy, such as the Cash Surrender Value and the Death Benefit.
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<TABLE>
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<CAPTION>
ACCUMULATION VALUE BENEFITS DEATH BENEFITS
<S> <C> <C>
o After the first Policy year (Date of o Received income tax free to
Issue in Indiana), loans may be taken Beneficiary. (SEE "TAX MATTERS: LIFE
for amounts up to 100% of Cash Surrender INSURANCE QUALIFICATION.")
Value less interest to the end of the
year less one monthly deduction at a net o Available as lump sum or under a
annual interest rate charge of 2%. variety of payment options.
Preferred loans are available beginning
in the tenth year and later (with a net o Two Death Benefit Options are
interest rate charge of 0%). SEE available:
"DISTRIBUTIONS: POLICY LOANS" for rules
and limits. o Option 1: Greater of (a) current
Specified Amount; or (b)
o The Policy may be surrendered in full at Accumulation Value plus Corridor
any time for its Cash Surrender Value, Amount.
or part of the Accumulation Value may be
withdrawn (after the first Policy o Option 2: Accumulation Value plus
Year). (SEE "DISTRIBUTIONS; SURRENDER greater of (a) Specified Amount, or
AND PARTIAL WITHDRAWALS.") A Surrender (b) Corridor Amount.
Charge, based upon age, sex, rate and
risk classes, and the amount of time you o Flexibility to change Death Benefit
have had your Policy may apply to any Option and Specified Amount.
surrender, partial withdrawal, or
reduction in Specified Amount for the o Rider benefits are available.
first 12 Policy years. (SEE "CHARGES
AND FEES: SURRENDER CHARGE.") Federal PROCEEDS PAID WOULD BE REDUCED BY ANY
taxes and tax penalties may also apply. POLICY LOAN BALANCE. (SEE
(SEE "TAX MATTERS: TAX TREATMENT OF "DISTRIBUTIONS: DEATH BENEFIT.")
LOANS AND OTHER DISTRIBUTIONS.")
- - - --------------------------------------------- -------------------------------------------
</TABLE>
8
<PAGE>
o Fixed and variable payment options are
available. (SEE "DISTRIBUTIONS: PAYMENT
OPTIONS.")
--------------------------------------------- ---------------------------
For more detailed information about the Policy, please read the rest of this
prospectus.
- - - -----------------------------------------------------------
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 as United
Benefit Life Insurance Company. We changed to our current name in 1981. United
of Omaha is a wholly owned subsidiary of Mutual of Omaha Insurance Company. We
are principally engaged in the business of issuing life insurance policies,
accident and health insurance, and annuity contracts in all States of the United
States except New York, the District of Columbia, and in several foreign
countries. As of December 31, 1996, United of Omaha had assets of over $7
billion.
We may from time to time publish (in advertisements, sales literature and
reports to Owners) the ratings and other information assigned to us by one or
more independent rating organizations such as A.M. Best Company, Moody's,
Standard & Poor's, and Duff & Phelps. The purpose of the ratings is to reflect
our financial strength and/or claims-paying ability, and the ratings should not
be considered as bearing on the investment performance of assets held in the
Variable Account. Each year the A.M. Best Company reviews the financial status
of thousands of insurers, culminating in the assignment of Best's Ratings. These
ratings reflect A.M. Best Company's current opinion of the relative financial
strength and operating performance of an insurance company in comparison to the
norms of the life/health insurance industry. In addition, our claims-paying
ability, as measured by Moody's Insurance Credit Report, Standard and Poor's
Insurance Ratings Services, or Duff & Phelps may be referred to in such
advertisements, sales literature, or reports. These ratings are opinions
regarding an operating insurance company's financial capacity to meet the
obligations of its insurance and annuity policies in accordance with their
terms. Such ratings do not reflect the investment performance of the Variable
Account or the degree of risk associated with an investment in the Variable
Account.
- - - -----------------------------------------------------------
ALLOCATION OF PREMIUMS
You may allocate all or a part of your Policy premium to one of the
twenty-three Series Fund Portfolios currently available through the Variable
Account, to the Fixed Account, or to a combination of these. Allocations must be
in whole percentages and total 100%. The investment results of each Portfolio,
whose investment objectives are described below, are likely to differ
significantly. You should consider carefully, and on a continuing basis, which
Portfolio or combination of Portfolios and the Fixed Account is best suited to
your long-term investment objectives.
THE VARIABLE ACCOUNT
The Variable Account established for the purpose of providing variable
options to fund the Policy is United of Omaha Separate Account B. Amounts
allocated to the Variable Account are invested exclusively in shares of a
Portfolio of one of the Series Funds. Each Series Fund is an open-end management
investment company whose shares are purchased by the Variable Account to fund
the benefits provided by the Policy. The Series Fund Portfolios currently
available under the Variable Account, including their investment objectives and
their investment advisers, are described briefly in this Prospectus. Complete
descriptions of each Portfolio's investment objectives, restrictions, and risks
and other material information relating to an investment in the Portfolio are
contained in the prospectuses for each of the Series Funds which accompany this
Prospectus.
United of Omaha Separate Account B was established pursuant to an August
27, 1996, resolution of our Board of Directors. Under Nebraska Insurance Law,
the income, gains or losses, realized or unrealized, from assets allocated to
the Variable Account are credited to or charged against the Variable Account,
without regard to other income, gains, or losses of United of Omaha. These
assets are held by us for our variable life insurance policies. 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. The
assets maintained in the Variable Account will not be charged with any
liabilities arising out of any other business conducted by us. We are, however,
responsible for meeting the obligations under the Policy to you.
No stock certificates are issued to the Variable Account for shares of the
Series Funds held in the Variable Account. We own the Series Funds shares for
the Variable Account.
The Variable Account is registered with the Securities and Exchange
Commission ("SEC") as a unit investment trust under the Investment Company Act
of 1940 and meets the definition of separate account under federal securities
laws. However, the SEC does not supervise the management or the investment
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practices or policies of the Variable Account. We do not guarantee the Variable
Account's investment performance.
VARIABLE ACCOUNT PORTFOLIOS
ALGER AMERICAN FUND - ALGER AMERICAN GROWTH PORTFOLIO -- seeks long-term
capital appreciation by investing in a diversified portfolio of equity
securities, primarily of companies with total market capitalization of $1
billion or greater. (1)
ALGER AMERICAN FUND - ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO --
seeks long-term capital appreciation by investing in a diversified portfolio
of equity securities, primarily of smaller, newer companies with total
market capitalization of less than $1 billion. The securities of such
companies may have limited marketability and may be subject to more abrupt
or erratic price changes than securities of larger, more established
companies or the market averages in general.(1) (*)
INSURANCE MANAGEMENT SERIES - FEDERATED PRIME MONEY FUND II PORTFOLIO --
invests in money market instruments maturing in thirteen months or less to
achieve current income consistent with stability of principal and liquidity.
The Portfolio attempts to maintain a stable net asset value of $1.00 per
share, but there can be no assurance the Portfolio will be able to do so.
(2)
INSURANCE MANAGEMENT SERIES - FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES
II PORTFOLIO -- seeks current income by investing in a diversified
portfolio limited to U.S. government securities. (2)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - FIDELITY VIP II ASSET
MANAGER: GROWTH PORTFOLIO -- seeks to obtain high total return with reduced
risk over the long-term by allocating its assets among stocks, bonds, and
short-term fixed-income instruments. Although the Portfolio seeks to reduce
its overall risk by diversifying among different types of investments, the
fund aggressively invests in a wide variety of security types, including
stocks and bonds issued in developing countries and derivative transactions.
The Portfolio spreads investment risk by limiting its holdings in any one
company or industry.(3, 4) (*)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND - FIDELITY VIP EQUITY-INCOME
PORTFOLIO -- seeks reasonable income by investing mainly in income-producing
equity securities. In selecting investments, the Portfolio also considers
the potential for capital appreciation. The Portfolio seeks to achieve a
return that surpasses that of the S&P 500. The Portfolio does not expect to
invest in debt securities of companies that do not have proven earnings or
credit.(3)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - FIDELITY CONTRAFUND
PORTFOLIO -- seeks to increase the value of the Portfolio over the long term
by investing in securities of companies that are undervalued or
out-of-favor. This strategy can lead to investments in domestic or foreign
companies, many of which may not be well known. The stocks of small
companies often involve more risk than those of larger companies. The
Portfolio may use various investment techniques to hedge the Portfolio's
risk, but there is no guarantee that these strategies will work as
intended.(3) (*)
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II - FIDELITY INDEX 500 PORTFOLIO
-- seeks to match the total return of the S&P 500 while keeping expenses
low. The Portfolio utilizes a "passive" or "indexing" approach and tries to
allocate its assets similarly to those of the index. Normally 80% (65% if
fund assets are below $20 million) of the fund's assets are invested in
equity securities of companies that compose the S&P 500. The Standard &
Poor's Corporation is neither an affiliate nor a sponsor of the fund.
MFS VARIABLE INSURANCE TRUST - MFS EMERGING GROWTH PORTFOLIO -- seeks to
provide long-term growth of capital through investing primarily in common
stocks of emerging growth companies, which involves greater risk than is
customarily associated with investments in more established companies. The
Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities.(5) (*)
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MFS VARIABLE INSURANCE TRUST - MFS HIGH INCOME PORTFOLIO -- seeks high
current income by investing primarily in a diversified portfolio of fixed
income securities, some of which may involve equity features. The Portfolio
may invest in lower rated fixed income securities or comparable unrated
securities.(5) (*)
MFS VARIABLE INSURANCE TRUST - MFS RESEARCH PORTFOLIO -- seeks to provide
long-term growth of capital and future income by investing a substantial
portion of its assets in the common stocks or securities convertible into
common stocks of companies believed to possess better than average prospects
for long-term growth. No more than 5% of the Portfolio's convertible
securities, if any, will consist of securities in lower rated categories or
securities believed to be of similar quality to lower rated securities. The
Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities.(5) (*)
MFS VARIABLE INSURANCE TRUST - MFS VALUE SERIES PORTFOLIO -- seeks capital
appreciation by investing primarily in common stocks, including to a limited
extent foreign securities which are not traded on a U.S. exchange. The
Portfolio may invest to a limited extent in lower rated fixed income
securities or comparable unrated securities. (5) (*)
MFS VARIABLE INSURANCE TRUST - MFS WORLD GOVERNMENT PORTFOLIO -- seeks
preservation and growth of capital, together with moderate current income by
investing its assets in an internationally diversified portfolio consisting
primarily of debt securities and, to a lesser extent, equity securities. The
Portfolio investments are expected to consist primarily of securities which
are of relatively high quality and minimal credit risk. However, an error of
judgment in selecting a currency or an interest rate environment could
result in a loss of capital, and a held security whose quality deteriorates
significantly will be sold only if the Portfolio investment adviser believes
it is advantageous to do so. (5)
PIONEER VARIABLE CONTRACTS TRUST - PIONEER CAPITAL GROWTH PORTFOLIO -- seeks
capital appreciation by investing in a diversified portfolio of securities
consisting primarily of common stocks.(6)
PIONEER VARIABLE CONTRACTS TRUST - PIONEER REAL ESTATE PORTFOLIO -- seeks
long-term growth of capital by investing primarily in securities of real
estate investment trusts (REITs) and other real estate industry companies.
Current income is the Portfolio's secondary investment objective.(6)
SCUDDER VARIABLE LIFE INVESTMENT FUND - SCUDDER GLOBAL DISCOVERY PORTFOLIO
-- seeks above-average capital appreciation over the long term by investing
primarily in the equity securities of small companies located throughout the
world, including to a limited extent in lower rated fixed income securities
or comparable unrated securities. Since the Portfolio normally will invest
in both U.S. and foreign securities markets, changes in the Portfolio's unit
value may have a low correlation with movements in the U.S. markets. (7)(*)
SCUDDER VARIABLE LIFE INVESTMENT FUND - SCUDDER GROWTH & INCOME PORTFOLIO --
seeks long term growth of capital, current income and growth of income by
investing primarily in common stocks, preferred stocks, and securities
convertible into common stocks of companies which offer the prospect for
growth of earnings while paying higher than average current dividends. (7)
SCUDDER VARIABLE LIFE INVESTMENT FUND - SCUDDER INTERNATIONAL PORTFOLIO --
seeks long-term growth of capital primarily through diversified holdings of
marketable foreign equity investments. The Portfolio invests in companies,
wherever organized, which do business primarily outside the United States.
The Portfolio intends to diversify investments among several countries, and
does not intend to concentrate investments in any particular industry.
(7)
T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE EQUITY INCOME PORTFOLIO
-- Seeks to provide substantial dividend income and also capital
appreciation by investing primarily in dividend-paying common stocks of
established companies.(9)
T. ROWE PRICE INTERNATIONAL SERIES, INC. - T. ROWE PRICE INTERNATIONAL
STOCK PORTFOLIO -- seeks a total return on its assets from long-term growth
of capital and income, by investing substantially all of its assets in
common stocks of established non-U.S. companies. (8)
T. ROWE PRICE FIXED INCOME SERIES, INC. - T. ROWE PRICE LIMITED-TERM BOND
PORTFOLIO -- seeks a high level of income consistent with modest price
fluctuation by investing primarily in investment grade debt securities. (9)
T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE NEW AMERICA GROWTH
PORTFOLIO -- seeks long-term growth of capital through investments primarily
in common stocks of U.S. growth companies which operate in service
industries believed to be above-average performers in their fields. Total
return will consist primarily of capital appreciation or depreciation. (9)
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T. ROWE PRICE EQUITY SERIES, INC. - T. ROWE PRICE PERSONAL STRATEGY
BALANCED PORTFOLIO -- seeks the highest total return over time consistent
with an emphasis on both capital appreciation and income. There are no
limitations on market capitalization or types of stock the Portfolio can
hold. While bond holdings are primarily investment grade, the Portfolio can
also invest in more volatile below-investment grade bonds.(9) (*)
INVESTMENT ADVISERS AND SUBADVISERS OF THE SERIES FUNDS:
(1) Fred Alger Management, Inc.
(2) Federated Advisors.
(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) Pioneer Fund Group.
(7) Scudder, Stevens & Clark, Inc.
(8) Rowe Price-Fleming International, Inc., a joint venture between T. Rowe
Price Associates, Inc. and Robert Fleming Holdings Limited.
(9) T. Rowe Price Associates, Inc.
- - - -----------------
(*) THESE PORTFOLIOS' INVESTMENT STRATEGIES MAY PROVIDE THE OPPORTUNITY FOR
HIGHER THAN AVERAGE RETURNS BY INVESTING IN SECURITIES WITH HIGHER THAN
AVERAGE RISK, SUCH AS LOWER RATED AND UNRATED DEBT AND COMPARABLE EQUITY
INSTRUMENTS. PLEASE CONSULT EACH PORTFOLIO'S PROSPECTUS ACCOMPANYING THIS
PROSPECTUS FOR MORE INFORMATION ABOUT THE RISK ASSOCIATED WITH SUCH
INVESTMENTS.
THERE IS NO ASSURANCE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED OBJECTIVE.
MORE DETAILED INFORMATION, INCLUDING A DESCRIPTION OF EACH PORTFOLIO'S
INVESTMENT OBJECTIVE AND POLICIES AND A DESCRIPTION OF RISKS INVOLVED IN
INVESTING IN EACH OF THE PORTFOLIOS AND OF EACH PORTFOLIO'S FEES AND EXPENSES,
IS CONTAINED IN THE PROSPECTUS FOR THE PORTFOLIO, CURRENT COPIES OF WHICH
ACCOMPANY THIS PROSPECTUS. INFORMATION CONTAINED IN THE PROSPECTUSES SHOULD BE
READ CAREFULLY BEFORE INVESTING IN A PORTFOLIO OF THE VARIABLE ACCOUNT.
An investment in the Variable Account, or in any Portfolio, including the
Money Market Portfolio, is not insured or guaranteed by the U.S. Government, and
there is no assurance that the Money Market Portfolio will be able to maintain a
stable net asset value per share.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS
We do not control the Portfolios and cannot and do not guarantee that any of
the Portfolios will always be available for Premium allocations or Accumulation
Value transfers. We retain the right, subject to any applicable law, to make
certain changes in the Variable Account and its investments. We reserve the
right to eliminate the shares of any Portfolio held by a Subaccount and to
substitute shares of another Portfolio, or of another registered open-end
management investment company for the shares of any Portfolio, if the shares of
the Portfolio are no longer available for investment or if, in our judgment,
investment in any Portfolio would be inappropriate in view of the purposes of
the Variable Account. To the extent required by the 1940 Act, substitutions of
shares attributable to your interest in a Subaccount will not be made without
prior notice to you and the prior approval of the SEC. If required, approval of
or change of any investment policy will be filed with the Insurance Department
of any State in which the Policy is sold.
New Subaccounts may be established, or existing Subaccounts eliminated,
when, in our sole discretion, marketing, tax, investment or other conditions
warrant such a change. If a Subaccount is eliminated, we will notify you and
request a reallocation of the amounts invested in the eliminated Subaccount. If
you do not reallocate these amounts, we will reinvest them in the Subaccount
that invests in the Money Market Portfolio (or in a similar portfolio of money
market instruments).
In the event of any such substitution or change, we may make changes in the
Policy as may be necessary or appropriate to reflect such substitution or
change. Furthermore, the Variable Account may be (i) operated as a management
company under the 1940 Act or any other form permitted by law, (ii) deregistered
under the 1940 Act in the event such registration is no longer required or (iii)
combined with one or more other separate accounts. To the extent permitted by
applicable law, we also may transfer the assets of the Variable Account
associated with the Policies to another account or accounts.
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O THE FIXED ACCOUNT
This Prospectus is intended to serve as a disclosure document only for the
Policy and the Variable Account. For complete details regarding the Fixed
Account, see the Policy itself.
PREMIUM ALLOCATED AND AMOUNTS TRANSFERRED TO THE FIXED ACCOUNT BECOME PART
OF THE GENERAL ACCOUNT ASSETS OF UNITED OF OMAHA. INTERESTS IN THE GENERAL
ACCOUNT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "1933
ACT"), NOR IS THE GENERAL ACCOUNT REGISTERED AS AN INVESTMENT COMPANY UNDER THE
1940 ACT. ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS THEREIN IS
GENERALLY SUBJECT TO THE PROVISIONS OF THE 1933 OR 1940 ACTS, AND WE HAVE BEEN
ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO THE FIXED ACCOUNT.
The Fixed Account includes all our assets except those segregated in the
Variable Account or in any other separate investment account. You may allocate
Premium to the Fixed Account or transfer amounts from the Variable Account to
the Fixed Account. Instead of you bearing the investment risk, as is the case
for Accumulation Value in the Variable Account, we bear the full investment risk
for all Accumulation Value in the Fixed Account. We have sole discretion to
invest the assets of our general account, including the Fixed Account, subject
to applicable law.
We guarantee to credit interest to amounts in the Fixed Account at an
effective rate of at least 4% per year. (After the expense charge is applied,
the net effective rate is 3.3% for Policy years 1-10, and 3.45% for Policy years
11 and subsequent. We may, IN OUR SOLE DISCRETION, credit amounts in the Fixed
Account with interest at a current interest rate in excess of 4%.) Only one
transfer out of the Fixed Account is allowed each Policy Year. (This limit does
not apply under the Dollar Cost Averaging or Asset Allocation programs).
Moreover, the maximum amount that can be transferred out of the Fixed Account
during any Policy Year is 10% of Fixed Accumulation Value on the date of the
transfer. No charge is imposed on such transfers. We reserve the right to modify
transfer privileges at any time. (SEE "ALLOCATION OF PREMIUM: TRANSFERS.")
Partial withdrawals from the Fixed Account are limited to a pro rata amount
(with withdrawals from the Variable Account). Withdrawals and transfers from the
Fixed Account may be delayed for up to six months, and withdrawals may be
subject to a Surrender Charge. (SEE "CHARGES AND FEES: SURRENDER CHARGES.") For
purposes of crediting interest, the most recent payment or transfer into the
Fixed Account, plus interest allocable to that payment or transfer, is
considered to be withdrawn or transferred out last; the next most recent payment
plus interest is considered to be transferred out next, and so on (this is a
"last-in, first-out" procedure).
We guarantee that, upon Death or the Policy Maturity Date, the amount in
your Fixed Account will be not be less than the amount of Premium allocated or
Accumulation Value transferred to the Fixed Account, plus interest at an
effective rate of 4% per year, plus any excess interest credited to amounts in
the Fixed Account, less that part of the Monthly Deduction allocable to the
Fixed Account and less any amounts deducted from the Fixed Account in connection
with partial withdrawals (including any Surrender Charges) or transfers to the
Variable Account or to the Loan Account.
WE HAVE COMPLETE AND SOLE DISCRETION TO DETERMINE THE CURRENT INTEREST RATES
OF THE FIXED ACCOUNT. WE CANNOT PREDICT OR GUARANTEE THE LEVEL OF FUTURE CURRENT
INTEREST RATES OF THE FIXED ACCOUNT, EXCEPT TO GUARANTEE THAT FUTURE CURRENT
INTEREST RATES WILL NOT BE BELOW AN EFFECTIVE RATE OF 3.3% PER YEAR COMPOUNDED
ANNUALLY. YOU BEAR THE RISK THAT CURRENT INTEREST RATES OF THE FIXED ACCOUNT
WILL NOT EXCEED AN EFFECTIVE RATE OF 3.3% PER YEAR.
O TRANSFERS
Subject to the limitations and restrictions described below, transfers out
of a Subaccount of the Variable Account may be made any time after the Right to
Examine period and prior to death or the Policy Maturity Date, by sending
written notice, signed by you, to us. Transfers also may be requested by
telephone, subject to the provisions described below under "THE POLICY:
TELEPHONE TRANSACTIONS." We reserve the right, at any time and without notice to
any party, to modify the transfer privileges under the Policy. Transfers are
effective on the date we receive your request.
After the Right to Examine period, you can transfer Accumulation Value from
one Subaccount of the Variable Account to another, or from the Variable Account
to the Fixed Account or from the Fixed Account to any Subaccount of the Variable
Account within certain limits. Transfers out of a Subaccount currently may be
made as often as you wish (we reserve the right to limit or restrict transfers
in the future or to eliminate the transfer privilege). We reserve the right to
restrict transfers from the Variable Account to the Fixed Account of amounts
previously transferred from the Fixed Account for up to six months.
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. The first
12 transfers each Policy year are free.
Transfers from the Fixed Account currently may be made only once each Policy
Year. Transfers from the Fixed Account do not count toward the 12 free transfer
limit described above, and no transfer charge will be imposed on transfers from
the Fixed Account. Moreover, the maximum amount that can be transferred out of
the Fixed Account during any Policy Year is 10% of the Fixed Accumulation Value
on the date of the transfer.
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The Policy is designed as a long-term investment to provide death benefit
protection, and may also be used as a part of your retirement or other financial
planning. The Policy is not intended for active trading or "market timing."
Excessive transfers could harm other Policy Owners by having a detrimental
effect on portfolio management (which could occur, for example, if it caused
excessive commission expense or caused the manager to keep higher cash reserves
than otherwise). Therefore, we reserve the right to limit the number of
transfers from the Subaccounts of the Variable Account and the Fixed Account if:
(a) we believe that excessive trading by the Policy Owner or a specific transfer
request would have a detrimental effect on Accumulation Value or the share
prices of the Portfolios; or (b) we are informed by one or more of the
Portfolios that the purchase or redemption of shares is to be restricted because
of excessive trading or a transfer or group of transfers is deemed to have a
detrimental effect on share prices of one or more Portfolios or the Variable
Account.
Where permitted by law, we may accept your authorization of third party
transfers on your behalf, subject to our rules. We may suspend or cancel such
acceptance at any time. For example, third party transfers on by "market timers"
could be suspended if they cause harm to other Policy Owners. We will notify you
of any such suspension or cancellation. We may restrict the availability of
Subaccounts and the Fixed Account for Transfers during any period in which you
authorize such third party to act on your behalf. We will give you prior
notification of any such restrictions. However, we will not enforce such
restrictions if we are provided with satisfactory evidence that: (a) such third
party has been appointed by a court of competent jurisdiction to act on your
behalf; or (b) such third party has been appointed by you to act on your behalf
for all your financial affairs.
O DOLLAR COST AVERAGING
Dollar cost averaging is a process whose objective is to shield investments
from short term price fluctuations. Since the same dollar amount is transferred
to selected Subaccounts each month, over time more purchases of Portfolio shares
are made when the value of those shares is low, and fewer shares are purchased
when the value is high. As a result, a lower than average cost of purchases may
be achieved over the long term. While this process allows you to take advantage
of investment price fluctuations, it does not assure a profit or protect against
a loss in declining markets.
Our dollar cost averaging program allows you to automatically transfer, on a
periodic basis, a predetermined amount or percentage specified by you from any
one Subaccount or the Fixed Account to any Subaccount(s) of the Variable
Account. The automatic transfers can occur monthly, quarterly, semi-annually, or
annually, and the amount transferred each time must be at least $100 and must be
$50 per Subaccount. At the time the program begins, there must be at least
$5,000 of Accumulation Value in the applicable Subaccount or the Fixed Account
being transferred from. If transfers are made from the Fixed Account, the
maximum periodic transfer amount is 10% of that account's value at the time of
election, or a sufficient amount to provide transfers for 10 months. There is no
maximum transfer amount requirement out of the Subaccounts of the Variable
Account.
You can request participation in the Dollar Cost Averaging program when
purchasing the Policy or at a later date. Transfers will begin on the first or
15th day (or, if not a Valuation Date, the next following Valuation Date) of the
month, as specified by you, during which the request is processed. You can
specify that only a certain number of transfers will be made, in which case the
program will terminate when that number of transfers has been made. Otherwise,
the program will terminate when the amount remaining in the applicable
Subaccount or, if applicable, the Fixed Account, is less than $500.
You can increase or decrease the amount or percentage of the transfers or
discontinue the program by notifying us of the change. There is no charge for
participation in this program.
O ASSET ALLOCATION PROGRAM
Under the Asset Allocation Program, you can instruct us to allocate premium
and Accumulation Value among the Subaccounts of the Variable Account and the
Fixed Account pursuant to allocation instructions you specify or recommended by
us and approved by you. We will rebalance your Policy's assets on a quarterly,
semi-annual or annual basis, as specified by you, to ensure conformity with your
allocation instructions. Such asset rebalancing is intended to transfer cash
value from Subaccounts that have increased in value to those that have declined,
or not increased as much, in value. Over time, this method of investing may help
you to "buy low and sell high," although there can be no assurance this
objective will be achieved.
Transfers of Accumulation Value made pursuant to this program will not be
counted in determining whether the Transfer Fee applies. At the time the program
begins, there must be at least $10,000 of Accumulation Value under the Policy.
You can request participation in the Asset Allocation Program when
purchasing the Policy or at a later date. You can change your allocation
percentage or discontinue the program by notifying us of the change. There is no
charge for participation in this program.
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- - - -----------------------------------------------------------
THE POLICY
O POLICY APPLICATION AND ISSUANCE
To purchase a Policy, you must submit an application and provide evidence of
insurability of the proposed Insured. The initial premium also must be paid
before we will issue the Policy. We will not issue a Policy if the Insured is
older than age 90. Before accepting an application, we conduct underwriting to
determine insurability. We reserve the right to reject an application or premium
for any reason. If a Policy is not issued, we will return any premium payment
you submitted. If a Policy is issued, it will be effective on the date of issue.
O PREMIUM PAYMENTS
The Policy is designed to provide you with life insurance protection and
flexibility with the amount and frequency of premium payments and the level of
life insurance proceeds payable under the Policy. The minimum initial premium
required is a planned premium to maintain an initial Specified Amount of
coverage until the next planned premium is due. Your initial premium will be
credited to the Policy on the date the Policy is issued. Premiums will be
allocated to the Money Market portfolio until the end of the Right to Examine
period. You may purchase a Policy with the proceeds of another life insurance
policy, provided that the applicable application forms are completed. IT MAY NOT
BE ADVANTAGEOUS TO REPLACE EXISTING INSURANCE WITH A POLICY.
After the first premium payment, you must only make premium payments as
necessary to maintain the Specified Amount of coverage that you purchased.
Planned premiums may be paid annually, semiannually, or at other intervals we
offer. Beginning with the second Policy Year, you may change the planned premium
once each year, subject to our approval. The planned premium is flexible.
Additional payments that increase the Specified Amount may be made until the
Insured attains age 90, subject to our underwriting requirements and our
approval.
We reserve the right to limit premiums or refund any values in order to
qualify this policy as life insurance under the Internal Revenue Code of 1986,
as amended. If additional Premium is accepted, we will credit it to your
Policy's Accumulation Value pursuant to your current accumulation instructions,
unless you provide other instructions as of the date underwriting was completed.
ACCUMULATION VALUE
On the date of issue the Accumulation Value equals the initial net premium
less the Monthly Deduction for the first month. The net premium is the premium
less the premium charges for tax and premium processing expenses. On any Monthly
Deduction Date after the date of issue the Accumulation Value equals:
(a) the total of the values in each Subaccount; plus
(b) the accumulation value of the Fixed Account; plus
(c) the accumulation value of the loan Account; less
(d) the Monthly Deduction for the current month.
The value for each Subaccount equals:
(a) the current number of Accumulation Units; multiplied by
(b) the current unit value.
Each net premium allocated to the Variable Account is converted into
Accumulation Units. This is done by dividing the net premium by the Accumulation
Unit value for the Valuation Period during which the net premium is allocated to
the Variable Account. The initial Accumulation Unit value for each Subaccount
was set when the Subaccount was established. The unit value may increase or
decrease from one Valuation Date to the next.
The Accumulation Unit value for a Subaccount on any Valuation Date is
calculated as follows:
(a) the Net Asset Value Per Share of the Portfolio multiplied by the number
of shares held in the Subaccount, before the purchase or redemption of
any shares on that date; divided by
(b) the total number of Accumulation Units held in the Subaccount on the
Valuation Date, before the purchase or redemption of any shares on that
date.
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The Accumulation Value of the Fixed Account on any Monthly Deduction Date
before deducting the Monthly Deduction equals:
(a) the value as of the last Monthly Deduction Date; plus
(b) any net premiums credited since the last Monthly Deduction Date; plus
(c) any transfers from the Subaccounts to the Fixed Account since the last
Monthly Deduction Date; plus
(d) any transfers from the Loan Account to the Fixed Account since the last
Monthly Deduction Date; less
(e) any transfers from the Fixed Account to the Subaccounts since the last
Monthly Deduction Date; less
(f) any transfers from the Fixed Account to the Loan Account since the last
Monthly Deduction Date; less
(g) any partial withdrawals and surrender charge taken from the Fixed
Account since the last Monthly Deduction Date; plus
(h) interest credited on the balance.
The Cash Surrender Value is the Accumulation Value less any outstanding
Policy loans and unpaid loan interest and less any applicable Surrender Charge.
O LAPSE
If there is no outstanding Policy loan, the Policy will lapse if, on a
Monthly Deduction Date, the Accumulation Value is not enough to cover the
Monthly Deduction due on that date (subject to the No-Lapse Provision), and a
grace period expires without a sufficient premium payment. If there is an
outstanding loan, the Policy will lapse on any Monthly Deduction Date when the
Cash Surrender Value is insufficient to cover the Monthly Deduction and any loan
interest due on that date (subject to the No-Lapse Provision), and a grace
period expires without a sufficient premium payment. A lapse of the Policy may
result in adverse tax consequences.
O GRACE PERIOD
If there is no outstanding policy loan, the grace period will begin on any
Monthly Deduction Date when the Accumulation Value is not enough to pay the
Monthly Deduction, subject to the NO-LAPSE PERIOD provision. If there is an
outstanding policy loan, the grace period will begin on any Monthly Deduction
Date when the cash surrender value is not enough to pay the Monthly Deduction
and any loan interest due, subject to the NO-LAPSE PERIOD provision.
We will allow 61 days from the start of the grace period for the payment of
an amount large enough to pay all unpaid Monthly Deductions and unpaid loan
interest. This policy will remain in force during the grace period. If the
payment is not received by the end of the grace period, this policy will lapse
as of the first day of the grace period. If the death of the Insured occurs on
the Monthly Deduction Date or during the grace period, any past due Monthly
Deductions and unpaid loan interest will be deducted in determining the death
benefit.
Insurance coverage continues during the grace period, but the Policy will be
deemed to have no Accumulation Value for purposes of Policy loans, surrender and
withdrawals.
O NO-LAPSE PERIOD
The Policy contains a provision that can prevent it from lapsing, even if
the cash surrender value is insufficient to pay the monthly deduction, if
certain conditions are met. This provision applies only if:
(a) either the minimum monthly premium or the lifetime monthly premium
requirement has been met; and
(b) the policy has never been reinstated; and
(c) no Additional Insured Term Insurance Rider covering the Insured is
attached.
The minimum monthly premium per $1,000 of Specified Amount and the minimum
No-Lapse Period are shown on the policy data pages. If you meet the minimum
monthly premium requirement, then the policy will not lapse during the minimum
No-Lapse Period, if applicable.
The minimum monthly premium requirement is met on any Monthly Deduction Date
when the total premiums paid since the policy's date of issue, less any partial
withdrawals accumulated at 4% interest and less any outstanding policy loan,
equals or exceeds the minimum monthly premium accumulated at 4% interest.
The lifetime monthly premium per $1,000 of Specified Amount and the lifetime
No-Lapse Period are shown on the policy data pages. If you meet the lifetime
monthly premium requirement, then the policy will not lapse during the lifetime
No-Lapse Period, if applicable.
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The lifetime monthly premium requirement is met on any Monthly Deduction Date
when the sum of premiums paid since the policy's date of issue, less any partial
withdrawals accumulated at 4% interest and less any outstanding policy loans,
equals or exceeds the lifetime monthly premium accumulated at 4% interest.
O TELEPHONE TRANSACTIONS
You may make transfers, partial withdrawals, and/or change the allocation
of subsequent Premium payments, by telephone if you previously authorized
telephone transactions in writing to us. We will not be liable for following
instructions communicated by telephone that we believe to be genuine. However,
we will employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. If we fail to do so, we may be liable for any losses
due to unauthorized or fraudulent instructions. All telephone requests will be
recorded on voice recorder equipment for your protection. When making telephone
requests, you will be required to provide your social security number and/or
other information for identification purposes.
Telephone requests must be received by us no later than the close of the
New York Stock Exchange ("NYSE")(usually 3:00 p.m. Central time) in order to be
processed that day. Telephone transfer requests received later will be processed
the next day the NYSE is open. The telephone transaction privilege may be
discontinued at any time as to some or all Policy Owners.
O MATURITY DATE
The Policy's maturity date is the Policy Anniversary next following the
Insured's 100th birthday. On the maturity date we will pay you the Policy's
Accumulation Value (less any outstanding Policy loans and unpaid loan interest),
if (a) the Insured is then living; (b) this Policy is in force; and (c) coverage
beyond maturity is not elected. There may be little or no cash surrender value
at that time. The Policy may terminate prior to the maturity date if the
premiums paid and Accumulation Value are insufficient to continue this Policy in
force.
O COVERAGE BEYOND MATURITY
Within thirty days of the maturity date of this policy, you may elect to
continue the policy in force beyond the maturity date. The election must be made
by written request. The following will apply:
(a) The allocation of the Accumulation Value to the Subaccounts and the
Fixed Account will be maintained according to your instructions;
(b) The cost of insurance charge will be zero;
(c) The risk charge will be zero;
(d) The administrative charge will be zero;
(e) The corridor percentage will be fixed at 1% ;
(f) The death benefit option will be fixed at Option 1;
(g) Any riders attached to the policy that are then in force will end;
(h) The Insured's date of death will be considered this policy's maturity
date.
All other rights and benefits as described in the policy will be available
during the lifetime of the Insured, except that we will not accept any
additional premium payments after coverage beyond maturity has been elected.
- - - -----------------------------------------------------------
DISTRIBUTIONS
O POLICY LOANS
After the first Policy Year (from the Date of Issue in Indiana), you may
obtain a loan for up to 100% of the Cash Surrender Value less loan interest to
the end of the Year and less one monthly deduction. This Policy must be assigned
to us as sole security for the loan. We will transfer all loan amounts from the
Fixed Account and the Subaccounts to the Loan Account. The amounts will be
transferred on a pro rata basis.
Loan interest is payable at a rate of 5.7% in advance (6.0% effective annual
rate). Interest is due on each Policy Anniversary. If the interest is not paid
when due, we will transfer an amount equal to the unpaid loan interest from the
Fixed Account and the Subaccounts, to the Loan Account on a pro rata basis. We
will credit 4% interest to any amounts in the Loan Account, except amounts equal
to a Preferred Loan as described below, for a net annual Loan interest rate of
2%.
The death benefit will be reduced by the amount of any loan outstanding on
the date of the Insured's death. We may defer making a loan for six months
unless the loan is to pay premiums to us.
A Preferred Loan is available on existing and new loans beginning in the
10th Policy Year. A Preferred Loan will be credited with 6% interest, for a net
annual Preferred Loan interest rate of 0%.
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All or part of a loan may be repaid at any time while the Policy is in
force. The amount of a loan repayment will be deducted from the Loan Account and
will be allocated among the Fixed Account and the Subaccounts in the same
percentages as the Accumulation Value on the date repayment. You should identify
any payment intended to reduce a loan as a loan repayment; otherwise, it will be
added to the Accumulation Value (i.e., treated as a premium).
O SURRENDER
While the Insured is alive, you may terminate this Policy for its Cash
Surrender Value. If you request a cash surrender, the Policy must be returned to
us to receive the Cash Surrender Value
With regard to amounts allocated to the Fixed Account, the Cash Surrender
Value will be equal to or greater than the minimum Cash Surrender Values
required by the State in which this Policy was delivered. The value is based on
the Commissioners 1980 Standard Mortality Table, the insured's age at last
birthday, with interest at 4%. Also, Surrenders are taxable and a 10% federal
tax penalty may apply. (SEE "TAX MATTERS.") A SURRENDER CHARGE MAY BE DEDUCTED.
We may defer payment of a cash surrender from the Fixed Account for up to six
months.
o PARTIAL WITHDRAWALS
After the first Policy Year, you may withdraw part of the Accumulation
Value. A surrender charge may be deducted. Withdrawals are made beginning with
the most recent Premium payment. The minimum partial withdrawal amount is $250.
The maximum partial withdrawal amount is an amount such that the remaining cash
surrender value is not less than $500 and the Specified Amount is not less than
$100,000 in Policy years one through five or not less than $50,000 thereafter.
If Death Benefit Option 1 is in effect, the following will apply for each
partial withdrawal:
(a) the current Specified Amount will be reduced by the amount of the
withdrawal; and
(b) the Accumulation Value will be reduced by:
(1) the amount of the withdrawal; and
(2) the surrender charge applicable to the decrease in current
Specified Amount, as described in the SURRENDER CHARGE provision.
We will send you an amendment showing the current Specified Amount after the
withdrawal.
If Death Benefit Option 2 is in effect, the Accumulation Value will be
reduced by the amount of the withdrawal.
The amount of cash withdrawal requested and any surrender charge will be
deducted from the Accumulation Value on the date we receive your written
request. Partial withdrawals will result in cancellation of Accumulation Units
from each applicable Subaccount. In the absence of instructions from you,
amounts will be deducted from the Subaccounts and the Fixed Account on a pro
rata basis. No more than a pro rata amount may be withdrawn from the Fixed
Account for any partial withdrawal. We reserve the right to defer withdrawals
from the Fixed Account for up to six months from the date we receive your
written request.
Partial withdrawals may change the minimum and lifetime monthly premium
requirements applicable to the NO-LAPSE PERIOD provision. Partial withdrawals
may be taxable and subject to a 10% federal tax penalty.
O DEATH BENEFIT
CHANGE IN SPECIFIED AMOUNT
After the first year, you may change the current Specified Amount once each
year.
You must apply for any increase in current Specified Amount with a new
application and provide evidence of insurability satisfactory to us. The
Specified Amount may not be increased after the Insured attains age 90.
Any decrease in current Specified Amount will be subject to the applicable
surrender charge as described in the SURRENDER CHARGE provision. A decrease will
be subject to a minimum Specified Amount of $100,000 remaining in force during
policy years one through five and $50,000 remaining in force thereafter.
An increase or decrease will go into effect on the Monthly Deduction Date
following the date we approve the change. We will send you an amendment showing
the current Specified Amount after the change.
An increase or decrease in current Specified Amount will change the minimum
monthly premium and lifetime monthly premium requirements applicable to the
NO-LAPSE PERIOD provision.
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DEATH BENEFIT OPTIONS
The death benefit equals either death benefit Option 1 less any loan or death
benefit Option 2 less any loan. We will pay the death benefit according to the
death benefit option in effect at the time of the Insured's death. Unless
otherwise requested, Option 1 is in effect.
The Option 1 Death Benefit is the greater of:
(a) the current Specified Amount (i.e., on the date of death); or
(b) the policy's Accumulation Value on the date of death plus the corridor
amount.
The Option 2 Death Benefit is the policy's Accumulation Value on the date of
death plus the greater of:
(a) the current Specified Amount (i.e., on the date of death); or
(b) the corridor amount.
The corridor amount is the Accumulation Value on the date of death multiplied by
the corridor percentage from the table shown below for the Insured's attained
age.
- - - ---------------------------------------------------------
Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
- - - ---------------------------------------------------------
0-40 150% 54 57% 68 17%
41 143% 55 50% 69 16%
42 136% 56 46% 70 15%
43 129% 57 42% 71 13%
44 122% 58 38% 72 11%
45 115% 59 34% 73 9%
46 109% 60 30% 74 7%
47 103% 61 28% 75-90 5%
48 97% 62 26% 91 4%
49 91% 63 24% 92 3%
50 85% 64 22% 93 2%
51 78% 65 20% 94 1%
52 71% 66 19% 95-100 0%
53 64% 67 18% 100+ 1%
- - - ---------------------------------------------------------
After the first year, you may change the death benefit option once each year.
The change will take effect on the Monthly Deduction Date after we receive a
written request for change, at which time the death benefit will reflect the
change in option.
Changes in the death benefit option may result in a change in the current
Specified Amount. We will increase or decrease the current Specified Amount to
maintain the death benefit that was in effect before the death benefit option
change. Any decrease resulting from a change in death benefit option will be
subject to the applicable surrender charge as described in the SURRENDER CHARGE
provision.
We will send you an amendment showing the death benefit option in effect and the
current Specified Amount after the change.
An increase or decrease in current Specified Amount resulting from a death
benefit option change will change the minimum monthly premium and lifetime
monthly premium requirements applicable to the NO-LAPSE PERIOD provision.
O PAYMENT OF PROCEEDS
While the Insured is alive, you may choose to have Proceeds that become
payable paid under any combination of the fixed and variable payout options
shown in this Policy. A Beneficiary may also have the Death Benefit applied to a
payout option. If another option is not chosen within 60 days of the date we
receive due proof of death, we will make payment in a lump sum.
We reserve the right to pay the Proceeds in one sum when it is less than
$2,000, or when the option of payment chosen would result in periodic payments
of less than $20. Payees must be individuals who receive payments in their own
behalf unless otherwise agreed to by us. Any option chosen will be effective
when we acknowledge it.
We may require proof of your age or survival or the age or survival of the
Payee.
The guaranteed minimum interest rate used in the fixed payout options
is 3%. We may pay or credit additional interest annually in our sole discretion.
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When the last Payee dies, we will pay to the estate of that Payee any amount
on deposit, or the then present value of any remaining guaranteed payments under
a fixed option.
FIXED PAYMENTS
Fixed payments are available under all six Payout Options below. The
Proceeds will be transferred to our general account, and the Payments will be
fixed in amount by the provisions selected and the age and sex (if consideration
of sex is allowed) of the Payee. The guaranteed effective annual interest rate
used in the Payout Options is 3%. We may, at our sole discretion, declare
additional interest to be paid or credited annually for Payout Options 1, 2, 3,
or 6. The guaranteed amounts are based on the 1983a Mortality Table, and 3%
guaranteed interest rate.
Current amounts may be obtained from us.
VARIABLE PAYMENTS
Only Payout Options 2, 4, and 6 are available for variable payments. The
dollar amount of the first monthly payment will be determined by applying the
Proceeds allocated to variable Subaccounts to the Variable Payout Options table
shown in the Policy applicable to the Payout Option chosen. The tables are
determined from the 1983a Mortality Table with an assumed investment rate of 4%.
If more than one Subaccount has been selected, the accumulation value of each
Subaccount is applied separately to the applicable table to determine the amount
of the first payment attributable to that particular Subaccount.
All variable payments other than the first will vary in amount according to
the investment performance of the applicable Subaccounts. The amount of each
subsequent payment equals the number of Variable Payment Units for each
Subaccount as determined for the first payment, multiplied by the value of a
Variable Payment Unit for that Subaccount 10 days prior to the date the variable
payment is due. This amount may increase or decrease from month to month.
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
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 and 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. A charge equal on an
annual basis to 1.20% of the daily net asset value of the Variable Account is
applied in calculating variable payouts.
More details about variable payments are included I Appendix A.
TRANSFERS BETWEEN FIXED AND VARIABLE SUBACCOUNTS
The Payee may exchange the value of a designated number of Variable Payment
Units of a particular Subaccount into other Variable Payment Units, the value of
which would be such that the dollar amount of a payment made on the date of the
exchange would be unaffected by the fact of the exchange. No more than four (4)
exchanges may be made within each Policy year.
Transfers may be made between Subaccounts and from a Subaccount to the Fixed
Account. No exchanges may be made from the Fixed Account to the variable
Subaccounts. Transfers will be made using the variable payment unit values for
the Valuation Period during which any request is received by us.
O PAYMENT OPTIONS
OPTION 1 -- PROCEEDS HELD ON DEPOSIT AT INTEREST. While the Proceeds are
held by us, we will annually:
(a) pay interest to the Payee; or
(b) add interest to the Proceeds.
OPTION 2 -- INCOME OF A SPECIFIED AMOUNT. We will pay the Proceeds in
monthly installments of a specified amount until the Proceeds, with
interest, have been fully paid.
OPTION 3 -- INCOME FOR A SPECIFIED PERIOD. We will pay the Proceeds in
installments for the number of years you choose. The monthly incomes for
each $1,000 of Proceeds, shown in the table set forth in the Policy, include
interest. We will provide the income amounts for payments other than monthly
upon request.
OPTION 4 -- LIFETIME INCOME. We will pay the Proceeds as a monthly income
for as long as the Payee lives. The following guarantees are available:
GUARANTEED PERIOD - The monthly income will be paid for a certain
number of years and as long thereafter as the Payee lives; or
GUARANTEED AMOUNT (INSTALLMENT REFUND) - The monthly income will be
paid until the sum of all payments equals the Proceeds placed under this
option and as long thereafter as the Payee lives.
If a fixed Payment Option is chosen, the monthly income will be
the amount computed using either the Lifetime Monthly Income Table set
forth in the Policy (which is based on the 1983a Mortality Table and
interest at 3% or, if more favorable to the Payee, our then current
lifetime monthly income rates for payment of Proceeds. If a variable
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Payout Option is chosen, all variable payments, other than the first
variable payment, will vary in amount according to the investment
performance of the applicable Subaccounts.
NOTE CAREFULLY. If no guarantee is elected and the life only
option has been chosen, then IT WOULD BE POSSIBLE FOR ONLY ONE PAYMENT
TO BE MADE if the Payee(s) were to die before the due date of the second
payment; only two Payments if the Payee(s) were to die before the due
date of the third payment; and so forth. When the last Payee dies, we
will pay to the estate of that Payee any remaining guaranteed Payments
under a fixed payout option.
OPTION 5 -- LUMP SUM. The Proceeds will be paid in one sum.
OPTION 6 -- ALTERNATIVE SCHEDULE. Upon request and if available, we will
provide payments for other options, including joint and survivor periods.
Certain options may not be available in some States.
If payments are being made under Option 2 or 3 and do not involve life
contingencies, then you may surrender the Policy and receive the commuted value
of any unpaid payments.
Additional information about any Payout Option may be obtained by contacting
us.
- - - -----------------------------------------------------------
CHARGES AND FEES
O CHARGES DEDUCTED UNDER THE POLICY
DEDUCTIONS FROM PREMIUM
We deduct the following expenses from each Policy premium payment we
receive: 3.75% of each premium payment for state and federal tax expenses, and
$2 for our premium processing expenses.
MONTHLY DEDUCTION
On each Monthly Deduction Date, we deduct a MONTHLY DEDUCTION from the
entire Accumulation Value equal to: (a) the COST OF INSURANCE for the current
month; plus (b) the COST OF ANY RIDERS for the current month; plus (c) the RISK
CHARGE; plus (d) the ADMINISTRATIVE CHARGE (except no monthly deduction is
deducted on or after the Policy Anniversary when the age of the Insured is equal
to 100). (These charges are described below.) The Monthly Deduction will be
deducted from the Subaccounts and the Fixed Account on a pro rata basis on each
Monthly Deduction Date. No Monthly Deduction is deducted from the Accumulation
Value after coverage beyond maturity is elected.
Each charge is deducted in the following manner: first, all charges are
calculated, based on the Accumulation Value on the Monthly Deduction Date
(before monthly charges are deducted, but reflecting charges deducted from
Subaccount assets), and then deducted. The Monthly Deduction is deducted pro
rata from the Accumulation Value in the Subaccounts and the Fixed Account.
COST OF INSURANCE CHARGE.
The guaranteed cost of insurance each month used in calculating the Monthly
Deduction equals:
(a) the net amount at risk for the month; multiplied by
(b) the guaranteed cost of insurance charge per $1,000 of Specified
Amount; divided by
(c) 1,000.
The guaranteed monthly cost of insurance charge for each $1,000 is shown on
the Policy data pages. The charge is based on the Insured's attained age,
duration, sex (except in Montana), and risk and rate classes.
The net amount at risk in any month equals:
(a) The death benefit; less
(b) the Accumulation Value on the Monthly Deduction Date after deducting
the rider charge, if any, the risk charge for the current month, and
the administrative charge.
We may use current cost of insurance charges less than those shown. Current
cost of insurance charges are based on the Insured's issue age, sex, risk and
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rate classes, the current Specified Amount, and the length of time the policy
has been in force. We reserve the right to change current cost of insurance
charges. Changes in cost of insurance rates will be by class and will be based
on changes in future expectations of factors such as:
(a)investment earnings;
(b)mortality;
(c)persistency; and
(d)expenses.
RISK CHARGE. We deduct a charge from your Accumulation Value (including
amounts of Accumulation Value moved to the Loan Account as collateral for Policy
loans), before monthly charges are deducted, but reflecting charges deducted
from Subaccount assets, on each Monthly Deduction Date for the mortality risks
that we assume. In Policy Years 1 through 10, this Risk Charge is equivalent to
an annual charge of 0.70% of the Accumulation Value, deducted on each Monthly
Deduction Date. In Policy Years 11 and later, this Risk Charge is equivalent to
an annual charge of 0.55% of the Accumulation Value, deducted on each Monthly
Deduction Date. The charge is deducted as 0.05833% of the Accumulation Value,
deducted on each Monthly Deduction Date, for the first 10 Policy Years, and
0.04583% of the Accumulation Value, deducted on each Monthly Deduction Date, for
Policy Years 11 and thereafter. The mortality risk we assume is that Insureds
may live for shorter periods of time than we estimated. If all the money we
collect from this charge is not needed to cover death benefits and expenses, the
money is contributed to our general account. Conversely, even if the money we
collect is insufficient, we will provide for all death benefits and expenses.
ADMINISTRATIVE CHARGE. We deduct a charge of $7 from your Accumulation Value
on each Monthly Deduction Date for the costs of issuing and administering the
Policy and operating the Variable Account..
COST OF RIDERS.
ACCELERATED DEATH BENEFIT RIDER. 3% (8% in Vermont and Oklahoma)
of the Policy's Accumulation Value at the time the election is made.
ADDITIONAL INSURED RIDER. The rider cost of term insurance equals the
rider benefit amount, multiplied by the rider's cost of insurance charge for
each $1,000 of benefit amount, divided by 1,000. This charge is based on the
Additional Insured's attained age, sex (except in Montana) and rate class.
ACCIDENTAL DEATH BENEFIT RIDER. The cost is determined by the Insured's
attained age and sex (just age in Montana) per each $1,000 of rider coverage
elected, multiplied by the rider benefit amount, divided by $1,000.
DISABILITY RIDER. The cost is a fixed rate determined by the Insured's
attained age and sex (just age in Montana) per each $1.00 of rider monthly
deduction amount elected, multiplied by the amount of the monthly deduction
amount.
WAIVER OF SURRENDER CHARGE RIDER. No cost.
TRANSFER CHARGES
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. The first
12 transfers each Policy Year are free.
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SURRENDER CHARGE
If a Policy is totally surrendered, we may deduct a Surrender Charge from
the amount requested to be surrendered. If the Policy's current Specified Amount
is decreased, we may deduct a Surrender Charge from the Accumulation Value based
on the amount of the decrease. The Surrender charge varies by issue age, sex
(except in Montana), risk class, the length of time your Policy has been in
force and the Specified Amount. For example, a male age 35 at issue, in the
nontobacco risk class and the preferred rate class, for surrender charge is
$13.00 for each $1,000.00 of specified amount in the first five years, declining
to $1.00 per $1,000.00 in the twelfth year and zero thereafter. The length of
the Surrender Charge period varies depending upon the Policy Owner's issue age:
the period is 12 years through age 52, 11 years at age 53, 10 years at age 54,
and 9 years at age 55 and thereafter.
The purpose of the Surrender Charge is to reimburse us for some of our
expenses incurred in distributing the Policies. The Surrender Charge and
Administrative charge may not be enough to cover all sales and administrative
expenses which we will incur in selling the Policies. Any shortfall, including
but not limited to payment of sales and distribution expenses, would be charge
to and paid by us.
WAIVER OF SURRENDER CHARGE
We will waive the Surrender Charge upon partial withdrawals and surrenders
in the event you become confined to a hospital or nursing home, disabled,
diagnosed with a terminal illness or unemployed, become an organ transplant
donor or recipient, experience significant damage to your residence, or upon the
death of your spouse or minor dependent. Those waivers and any restrictions
associated with such waivers are summarized below (see the Policy and Rider for
complete details):
NURSING HOME WAIVER. The Surrender Charge will not be imposed as a result
of any withdrawal made pursuant to your confinement, upon the recommendation of
a licensed physician for medically necessary reasons, to the following
facilities for 30 or more consecutive days: (a) a hospital licensed or
recognized as a general hospital by the state in which it is located; (b) a
hospital recognized as a general hospital by the Joint Commission on the
Accreditation of Hospitals; (c) a Medicare certified hospital; (d) a state
licensed nursing home with a registered nurse on duty 24 hours a day; and (e) a
Medicare certified long term care facility. This waiver only applies to partial
withdrawals and surrenders requested no later than 91 days after the last day of
confinement to such facility. Proof of confinement must be provided. This waiver
is not available if you are confined to a hospital or nursing home on date of
issue of the Policy.
We will not accept any additional premium payments under the Policy once
the Nursing Home Waiver has been elected. The Nursing Home Waiver may not be
available in all States.
DISABILITY WAIVER. The Surrender Charge will not be imposed upon any
withdrawal where you are physically disabled. We may require proof of such
disability including, in most States, written confirmation of receipt and
approval of your claim for Social Security Disability Benefits. Proof of
continued disability may be required through the date of any partial withdrawal
or surrender. We reserve the right to have you examined by a licensed physician
to verify such disability.
We will not accept any additional premium payments under a Policy once the
Disability Waiver has been elected. The Disability Waiver is not available if
you are receiving Social Security Disability Benefits on the date of issue or
are age 65 or older. The Disability Waiver may not be available in all States.
TERMINAL ILLNESS WAIVER. We will waive the Surrender Charge for any
withdrawal where you have and are diagnosed with a terminal illness and death is
reasonably expected within 12 months. We may require proof of such illness
including written confirmation from a licensed physician (not the Owner or
Insured). We reserve the right to have you examined by a licensed physician to
confirm such a diagnosis.
We will not accept any additional premium payments under a Policy once the
Terminal Illness Waiver has been elected. The Terminal Illness Waiver is not
available if you are diagnosed with a terminal illness prior to or on the date
of issue. The Terminal Illness Waiver may not be available in all States.
UNEMPLOYMENT WAIVER. We will waive the Surrender Charge for any partial
withdrawal or surrender in the event you become unemployed. The Unemployment
Waiver is available upon submission of a determination letter from a State
Department of Labor indicating you received unemployment benefits for at least
60 consecutive days prior to the election of such waiver. The Unemployment
Waiver may be exercised only once and is not available if you are receiving
unemployment benefits on the date of issue. The Unemployment Waiver may not be
available in all States.
TRANSPLANT WAIVER. We will waive surrender charges if you undergo
transplant surgery as an organ donor or recipient for the following body organs:
heart, liver, lung, kidney, pancreas; or as a recipient of a bone marrow
transplant. Within 91 days of surgery, you must submit a letter from a licensed
physician (who is not the Owner of or Insured under this policy) stating that
you underwent transplant surgery for any of these organs. We reserve the right
to have you examined by a physician of our choice and at our expense. This
waiver may be exercised only once per transplant surgery.
RESIDENCE DAMAGE WAIVER. We will waiver surrender charges if your primary
residence suffers physical damage in the amount of $50,000 or more after the
policy issue date. To claim this waiver, submit to us a certified copy of a
licensed appraiser's report stating the amount of the damage. This certified
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copy must be submitted with 91 days of the date of the appraiser's report. We
reserve the right to obtain a second opinion by having the affected residence
inspected by a licensed appraiser of our choice and at our expense, and to rely
upon our appraiser's opinion.
This waiver may be exercised only once.
DEATH OF SPOUSE OR MINOR DEPENDENT WAIVER. We will waive surrender charges
for one partial withdrawal made within six months of your spouse's or minor
dependent(s)' death. Proof of death must be submitted to us. This waiver may be
exercised once for a spouse and once for each minor dependent. Subsequent
withdrawals are subject to the Surrender Charge.
PORTFOLIO CHARGES
Each Portfolio is responsible for all of its expenses. The net assets of
each Portfolio will reflect deductions in connection with the investment
advisory fee and other expenses. Here is a table of Portfolio annual expenses:
<TABLE>
<CAPTION>
============== ============== =================
Total Portfolio
Portfolio Annual Expenses1 Management Other Annual
(as a percentage of average net assets) Fees Expenses Expenses
- - - --------------------------------------------------- -------------- -------------- -----------------
<S> <C> <C> <C>
Portfolio:
Alger American Growth 0.75% 0.10% 0.85%
Alger American Small Capitalization 0.85% 0.07% 0.92%
Federated Prime Money Fund II 0.50% 0.30% 0.80%
Federated Fund for U.S. Government Securities II 0.00% 0.80% 0.80%
Fidelity VIP II Asset Manager: Growth 0.71% 0.29% 1.00%
Fidelity VIP II Contrafund 0.61% 0.11% 0.72%
Fidelity VIP Equity Income 0.51% 0.10% 0.61%
Fidelity VIP II Index 500 0.09% 0.19% 0.28%
MFS Emerging Growth 0.75% 0.25% 1.00%
MFS High Income Fund 0.75% 0.25% 1.00%
MFS Research 0.75% 0.25% 1.00%
MFS Value Series 0.75% 0.25% 1.00%
MFS World Government 0.75% 0.25% 1.00%
Pioneer Capital Growth 0.65% 0.60% 1.25%
Pioneer Real Estate 1.00% 0.25% 1.25%
Scudder Global Discovery 0.16% 1.34% 1.50%
Scudder Growth & Income 0.48% 0.18% 0.66%
Scudder International 0.88% 0.21% 1.09%
T. Rowe Price Equity Income * 0.00% 0.85% 0.85%
T. Rowe Price International * 0.00% 1.05% 1.05%
T. Rowe Price Limited-Term Bond * 0.00% 0.70% 0.70%
T. Rowe Price New America Growth * 0.00% 0.85% 0.85%
T. Rowe Price Personal Strategy Balanced * 0.00% 0.90% 0.90%
- - - --------------------------------------------------- -------------- -------------- =================
===================================================================================================
*.T. Rowe Price Funds do not itemize management fees and other expenses.
===================================================================================================
</TABLE>
For more information concerning the investment advisory fee and other charges
against the Portfolios, see the prospectuses for the Portfolios, current copies
of which accompany this Prospectus.
- - - --------
1 The fee and expense data regarding each Series Fund, which are fees and
expenses for 1996, was provided to United of Omaha by the Series Fund. The
Series Funds are not affiliated with United of Omaha.
24
<PAGE>
- - - -----------------------------------------------------------
OTHER POLICY PROVISIONS
O NOTICE TO US
All notices or requests under the Policy must be sent to us by written
notice, unless you have authorized us in writing to acknowledge Telephone
Transactions from you. Written notices to us are not effective until our receipt
at this address: United of Omaha Life Insurance Company, Variable Product
Services Department, P.O. Box 8430, Omaha, Nebraska 68103-0430. Our toll-free
telephone number is 800-238-9354.
O ENTIRE CONTRACT
The entire contract is the Policy, any riders, endorsements and amendments,
and the signed application. All statements made in the application will, in the
absence of fraud, be deemed representations and not warranties. We will not use
any statement to contest the Policy or deny a claim unless it is in the
application. Any change of the Policy requires the written consent of an
executive officer. No agent has the authority to change the Policy or waive any
of its terms.
O RIGHT TO EXAMINE
If you are not satisfied with your Policy, you may return it to us or our
agent within 10 days (or more where required by applicable State insurance law)
after you receive the Policy or 45 days after you signed the application,
whichever is later. We will cancel your Policy as of the date any insurance
became effective and refund the premiums paid within seven days after we receive
the returned policy.
O DELAY OF PAYMENTS
We will usually pay any amounts payable from the Variable Account as a
Policy loan, partial withdrawal or Cash Surrender within 7 days after we receive
your written request in a form satisfactory to us. We can postpone such payments
or any transfers of amounts between Subaccounts or into the Fixed Account or the
Loan Account if: (i) the New York Stock Exchange ("NYSE") is closed for other
than customary weekend and holiday closings; (ii) trading on the NYSE is
restricted; (iii) an emergency exists as determined by the SEC, 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
(iv) the SEC permits delay for the protection of security holders. The
applicable rules of the SEC will govern as to whether the conditions in (iii) or
(iv) exist. We may defer payment of Policy loans, partial withdrawals or a Cash
Surrender from the Fixed Account for up to six months from the date we receive
your written request.
O CHANGE OF OWNERSHIP AND ASSIGNMENT
You may name a new owner of the Policy by an absolute assignment or pledge
it as collateral by assigning it. The assignment must be in writing. No
assignment will be binding on us until we record and acknowledge it. We are not
responsible for the validity or effect of an assignment of this Policy. The
rights of any Beneficiary will be subject to a collateral assignment. If the
Beneficiary of this Policy is irrevocable, a change of ownership or a collateral
assignment may be made only by joint written request from you and the
irrevocable Beneficiary. A change of owner may have tax consequences.
O BENEFICIARY
The Beneficiary is named in the Policy application and may be changed,
unless the Beneficiary is irrevocable. (SEE "BENEFICIARY CHANGE.")
O BENEFICIARY CHANGE
To change a Beneficiary, send us a written request. When recorded and
acknowledged by us, the change will be effective as of the date you signed the
request. The change will not apply to any payments made or other action taken by
us before recording. If the Beneficiary is irrevocable, you may change the
Beneficiary only by joint written request from you and the irrevocable
Beneficiary.
O MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the Death Benefit will
be the amount which would be purchased by the most recent cost of insurance
charge at the correct age and sex.
25
<PAGE>
O SUICIDE
We will not pay the Death Benefit if the Insured's death results from
suicide, while sane or insane, within two years (one year in Colorado and North
Dakota) from the date of issue. Instead we will pay the sum of the premiums paid
since issue less any loans and unpaid loan interest and less any partial
withdrawals. ....We will not pay that portion of the Death Benefit resulting
from an increase in Specified Amount if the Insured's death results from
suicide, while sane or insane, within two years (one year in Colorado and North
Dakota) from the effective date of the increase. Instead we will pay the sum of
the premiums paid for the increase.
O INCONTESTABILITY
We will not contest the validity of the Policy after it has been in force
during the lifetime of the Insured for two years from the date of issue. ....We
will not contest the validity of an increase in Specified Amount after the
Policy has been in force during the lifetime of the Insured for two years from
the effective date of the increase. Any contest of an increase in Specified
Amount will be based on the application for that increase.
O COVERAGE BEYOND MATURITY
Within thirty days of the maturity date of the Policy, you may elect to
continue the Policy in force beyond the maturity date. The election must be made
by written request. The following will apply:
0 The allocation of the Accumulation Value to the Subaccounts and the Fixed
Account will be maintained according to your instructions;
0 The cost of insurance charge will be zero;
0 The expense charge will be zero;
0 The corridor percentage will be fixed at 101% ;
0 Any riders attached to the Policy that are then in force will terminate;
0 The Insured's date of death will be considered this Policy's maturity date.
0 All other rights and benefits as described in the Policy will be available
during the lifetime of the Insured.
O REINSTATEMENT
If this policy lapses and has not been surrendered for cash, you may
reinstate it within five years of the date of lapse and prior to the maturity
date, subject to the following: (i) we receive a written application signed by
you and the Insured; (ii) we receive evidence of insurability satisfactory to
us; (iii) we receive payment of an amount large enough to continue this Policy
in force for three months; and (iv) re-establishment of surrender charges, if
any, measured from the original date of issue. The effective date of
reinstatement will be the date we approve the application for reinstatement.
The Specified Amount of the reinstated Policy may not exceed the Specified
Amount at the time of lapse. The Accumulation Value on the effective date of
reinstatement will equal (i) the amount required in (iii) above, plus any
applicable surrender charge(s) measured from the original date of issue to the
date of reinstatement, and less (ii) the Monthly Deduction for the current
month.
O NONPARTICIPATING
The Policy does not share in our surplus earnings or profits. No dividends
are paid by us on this Policy.
O OPTIONAL POLICY BENEFITS
ACCELERATED BENEFITS RIDER. This rider allows the Policy owner to make a one
time election for payment in advance of a portion of the death benefit of the
Policy if the Insured is diagnosed as having a terminal illness.
ACCIDENTAL DEATH BENEFIT RIDER. This rider provides an accidental death
benefit, in an amount selected by the Policy Owner, in addition to all other
benefits provided by the Policy.
DISABILITY RIDER. Upon due proof of that the Insured's disability began
while the rider was in force and continued for at least six months, we will
waive payments of the Policy's Monthly Deduction amount during the time the
Insured is disabled until the maturity date of the Policy.
TERM INSURANCE RIDER ON ADDITIONAL INSURED. This rider provides renewable
annual term insurance coverage on a person named by the Policy owner as an
additional insured under the Policy. Such coverage may be converted to a new
whole life policy on the Additional Insured, subject to Rider terms.
26
<PAGE>
- - - -----------------------------------------------------------
TAX MATTERS
O GENERAL
The following is a discussion of federal income tax considerations relating
to the Policy. It is based upon our understanding of laws as they now exist and
are currently interpreted by the Internal Revenue Service ("IRS"). These laws
are complex, and tax results may vary among individuals. If you contemplate the
purchase of or exercise of elections under the Policy, you are encouraged to
seek independent competent tax advice.
O LIFE INSURANCE QUALIFICATION
Section 7702 of the Internal Revenue Code of 1986, as amended ("Code")
defines a life insurance contract for Federal income tax purposes. The Section
7702 definition can be met if a life insurance contract satisfies either one of
two tests set forth in that section. The manner in which these tests should be
applied to certain features of the Policy is not directly addressed by Section
7702 or proposed regulations issued under that section. The presence of these
Policy features, the absence of final regulations, and the lack of other
pertinent interpretations of Section 7702, thus creates some uncertainty about
the application of Section 7702 to the Policy.
Nevertheless, we believe it is reasonable to conclude that the Policy
qualifies as a life insurance contract for federal tax purposes, so that:
o the death benefit should be fully excludable from the gross income of the
Beneficiary under Section 101(a)(1) of the Code; and
o you should not be considered in constructive receipt of the cash surrender
value, including any increases, unless and until it is distributed from the
Policy.
If a Policy were determined not to be a life insurance contract for
purposes of Section 7702, such Policy would not provide most of the tax
advantages normally provided by a life insurance contract. We thus reserve the
right to make changes in the Policy if such changes are deemed necessary to
attempt to assure its qualification as a life insurance contract for tax
purposes.
O TAX TREATMENT OF LOANS AND OTHER DISTRIBUTIONS
Federal tax law establishes a class of life insurance policies referred to
as modified endowment contracts. In almost all cases, this Policy will be a
modified endowment contract. (SEE, HOWEVER, THE DISCUSSION BELOW IN THIS SECTION
ON A POLICY ISSUED IN EXCHANGE FOR ANOTHER LIFE INSURANCE POLICY.) Except as
specifically noted, the remainder of this discussion assumes that this Policy
will be a modified endowment contract. Loans and partial withdrawals from, as
well as collateral assignments of, modified endowment contracts will be treated
as distributions to you. All pre-death distributions (including loans, partial
withdrawals and collateral assignments) from these Policies will be included in
gross income on an income-first basis to the extent of any income in the Policy
immediately before the distribution.
The law also imposes a 10% penalty tax on pre-death distributions (including
loans, collateral assignments, partial withdrawals and complete surrenders) from
modified endowment contracts to the extent they are included in income, unless
such amounts are distributed on or after the taxpayer attains age 59 1/2,
because the taxpayer is disabled, or as substantially equal periodic payments
over the taxpayer's life (or life expectancy) or over the joint lives (or joint
life expectancies) of the taxpayer and his or her Beneficiary. Furthermore, if
the loan interest is capitalized by adding the amount due to the balance of the
loan, the amount of the capitalized interest will be treated as an additional
distribution subject to income tax as well as the 10% penalty tax, if
applicable, to the extent of income in the Policy.
Any Policy issued in exchange for a modified endowment contract will be
subject to the tax treatment accorded to modified endowment contracts. However,
we believe that any Policy issued in exchange for a life insurance policy that
is not a modified endowment contract will generally not be treated as a modified
endowment contract if the death benefit of the Policy is greater than or equal
to the death benefit of the policy being exchanged. The payment of any premiums
at the time of or after the exchange may, however, cause the Policy to become a
modified endowment contract. You may, of course, choose not to exercise the
right to make additional payments in order to prevent a Policy from being
treated as a modified endowment Policy.
If a Policy that was not a modified endowment contract at issue subsequently
becomes a modified endowment contract, distributions made during the Policy year
in which it becomes a modified endowment contract, distributions in any
subsequent Policy year and distributions within two years before the Policy
becomes a modified endowment contract will be subject to the tax treatment
described above. This means that a distribution from a Policy that is not a
modified endowment contract could later become taxable as a distribution from a
modified endowment contract. In addition, regulations or other interpretations
may be issued which will apply similar tax treatment to other distributions made
in anticipation of a Policy becoming a modified endowment contract.
27
<PAGE>
O SPECIAL TREATMENT OF POLICY LOAN INTEREST
If there is any borrowing against the Policy, the interest paid on loans may
not be tax deductible.
O AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS
In the case of a pre-death distribution (including a loan, partial
withdrawal, collateral assignment or full surrender) from a Policy that is
treated as a modified endowment contract, a special aggregation requirement may
apply for purposes of determining the amount of the income on the Policy.
Specifically, if we or any of our affiliates issue to the same Policy Owner more
than one modified endowment contract within a calendar year, then for purposes
of measuring the income on the Policy with respect to a distribution from any of
those policies, the income for all those policies will be aggregated and
attributed to that distribution.
O OTHER POLICY OWNER TAX MATTERS
Federal and state estate, inheritance and other tax consequences of
ownership or receipt of proceeds under the Policy depend upon you or the
beneficiary's individual circumstances.
The Policy may continue after the Insured attains age 100. The tax
consequences associated with continuing a Policy beyond age 100 are unclear. A
tax advisor should be consulted on this issue.
Section 817(h) of the Code requires the investments of the Variable Account
to be "adequately diversified" in accordance with Treasury Regulations for the
Policy to qualify as a life insurance contract under Section 7702 of the Code.
Failure to comply with the diversification requirements may result in the Policy
not qualifying as life insurance under the Code, which may subject you to
immediate taxation on the incremental increases in Accumulation Value of the
Policy plus the cost of insurance protection for the year. Regulations
specifying the diversification requirements have been issued by the Department
of Treasury, and we believe the Policy complies fully with such requirements.
In connection with the issuance of the diversification regulations, the
Treasury Department stated that it anticipates the issuance of regulations or
rulings prescribing the circumstances in which your control of the investments
of the Variable Account may cause you, rather than us, to be treated as the
owner of the assets in the Variable Account. To date, no such regulations or
guidance has been issued. If you are considered the owner of the assets of the
Variable Account, income and gains from the Account would be included in your
gross income.
The ownership rights under the Policy are similar to, but different in
certain respects from, those described by the IRS in rulings in which it
determined that the owners were not owners of separate account assets. For
example, you have additional flexibility in allocating Policy Premium and
Accumulation Values. These differences could result in you being treated as the
owner of a pro rata share of the assets of the Variable Account. In addition, we
do not know what standards will be set forth in the regulations or rulings which
the Treasury may issue. We therefore reserve the right to modify the Policy as
necessary to attempt to prevent you from being considered the owner of the
assets of the Variable Account.
The Policy may be used in various arrangements, including non-qualified
deferred compensation or salary continuance plans, split dollar insurance plans,
executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree
medical benefit plans and others. The tax consequences of such plans may vary
depending on the particular facts and circumstances of each individual
arrangement. Therefore, if you are contemplating the use of the Policy in any
arrangement the value of which depends in part on its tax consequences, you
should be sure to consult a qualified tax advisor regarding the tax attributes
of the particular arrangement and the suitability of this product for the
arrangement.
- - - -----------------------------------------------------------
MANAGEMENT
Our Directors and senior officers are:
DIRECTORS*
Foggie, Samuel L. Banking and Finance Industry Executive
Plunkett III, Hugh V. Attorney (Plunkett, Schwartz & Petersen)
Sampson, Richard J. Retired Group Insurance Executive (Mutual of Omaha
Insurance Company)
Skutt, Thomas J. Chairman of the Board (Mutual of Omaha Insurance Company)
Straus, Oscar S. Investments; President, The Daniel and Florence
Guggenheim Foundation
Sturgeon, John A. President (Mutual of Omaha Insurance Company)
Thompson, Tommie Executive Vice President and Corporate Comptroller
(Mutual of Omaha Insurance Company)
Wayne, Michael A. Foundation and Cancer Institute Executive
Weekly, John W. Vice Chairman of the Board and Chief Executive Officer
(Mutual of Omaha Insurance Company)
28
<PAGE>
OFFICERS*
Thomas J. Skutt Chairman of the Board
John W. Weekly Vice Chairman of the Board, Chief Executive Officer
John A. Sturgeon President
G. Ronald Ames Executive Vice President (Acquisitions)
Robert B. Bogart Executive Vice President (Human Resources)
Stephen R. Booma Executive Vice President (Managed Care)
Cecil D. Bykerk Executive Vice President (Chief Actuary)
James L. Hanson Executive Vice President (Information Services)
Kim Harm Executive Vice President (Customer Services)
Randall C. Horn Executive Vice President (Group Insurance)
M. Jane Huerter Executive Vice President (Corporate Secretary; Corporate
Administration)
John L. Maginn Executive Vice President (Treasurer; Chief Investment
Officer)
Thomas J. McCusker Executive Vice President (General Counsel)
Tommie D. Thompson Executive Vice President (Corporate Comptroller)
*Business address for all directors and officers is Mutual of Omaha Plaza,
Omaha, Nebraska 68175.
- - - -----------------------------------------------------------
OTHER INFORMATION
O REPORTS TO YOU
We will send you a statement at least annually showing your Policy's death
benefit, Accumulation Value and any outstanding Policy loan balance. We will
also confirm Policy loans, Subaccount transfers, lapses, surrenders and other
Policy transactions as they occur. If you have Accumulation Value in the
Variable Account you will receive such additional periodic reports as may be
required by the SEC.
O VOTING RIGHTS
We own the Portfolio shares held in the Variable Account and have the right
to vote those shares. However, to the extent required by applicable Federal
securities law, we will give you, as Policy Owner, the right to instruct us how
to vote the shares that are attributable to your Policy.
The Policy Owners who are entitled to give voting instructions and the
number of shares attributable to their Policies will be determined as of the
record date for the meeting. All Portfolio shares held in any Subaccount of the
Variable Account, or in any other separate account of ours or an affiliate, the
policyholders of which have rights of instruction with respect to the Portfolio
shares, and for which timely instructions are not received, will be voted in the
same proportion as (i) the aggregate cash value of policies giving instructions,
respectively, to vote, for, against, or withhold votes on a proposition, bears
to (ii) the total Accumulation Value in that Subaccount for all policies for
which voting instructions are received. No voting privileges apply with respect
to Accumulation Value removed from the Variable Account as a result of a Policy
loan.
If required by State insurance authorities, we may disregard voting
instructions if they would require that shares be voted to cause a change in the
investment objectives of the portfolios or to approve or disapprove an
investment advisory or underwriting contract for a portfolio. In addition, we
may disregard voting instructions in favor of changes, initiated by a Policy
Owner or an Eligible Fund's Board of Trustees, in the investment policy,
investment adviser or principal underwriter of the portfolio if we (i)
reasonably disapprove of the changes and (ii) in the case of a change in
investment policy or investment adviser, make a good faith determination that
the proposed change is contrary to State law or is prohibited by State
regulatory authorities or that the change would be inconsistent with a
Subaccount's investment objectives or would result in the purchase of securities
which vary from the general quality and nature of investments and investment
techniques utilized by other separate accounts of ours or of an affiliated life
insurance company, which separate accounts have investment objectives similar to
those of the Subaccount. If we do disregard voting instructions, a summary of
that action and the reasons for it will be included in the next semi-annual
report to Policy Owners.
O DISTRIBUTION OF THE POLICIES
Mutual of Omaha Investor Services ("MOIS"), Mutual of Omaha Plaza, Omaha,
Nebraska 68175, is the principal underwriter of the Policy. Like us, MOIS is a
100% owned subsidiary of Mutual of Omaha Insurance Company. MOIS is registered
as a broker-dealer with the SEC and is a member of the National Association of
Securities Dealers, Inc. ("NASD"). MOIS contracts with one or more registered
broker-dealers ("Distributors") to offer and sell the Policy. All persons
29
<PAGE>
selling the Policy will be registered representatives of the Distributors, and
will also be licensed as insurance agents to sell variable life insurance.
Commissions paid to Distributors may be up to 8 1/4% of the Premium paid.
O STATE REGULATION
We are subject to regulation and supervision by the Insurance Department of
the State of Nebraska, which periodically examines our affairs. We are also
subject to the insurance laws and regulations of all jurisdictions where we are
authorized to do business. The Policy has been approved by the Insurance
Department of the State of Nebraska and other jurisdictions.
We submit annual statements of our operations, including financial
statements, to the insurance departments of the various jurisdictions in which
we do business, for the purpose of determining solvency and compliance with
local insurance laws and regulations.
O LEGAL MATTERS
We know of no material legal proceedings pending to which the Variable
Account is a party or which would materially affect the Variable Account. We are
not involved in any litigation of material importance to our total assets or to
the Variable Account.
Legal matters in connection with the Policy have been passed upon by our Law
Staff.
O INDEPENDENT AUDITORS
The Financial Statements of United of Omaha Life Insurance Company
as of and for the year ended December 31, 1996, included in this Registration
Statement have been audited by independent auditors Deloitte & Touche LLP,
Omaha, Nebraska, as stated in their report appearing herein. The financial
statements of United of Omaha Life Insurance Company as of December 31, 1995,
and for the two years then ended was audited by independent auditors Coopers &
Lybrand, LLP, 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 the ability of United of Omaha 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.
O REGISTRATION STATEMENT
This prospectus omits certain information contained in the Registration
Statement filed with the SEC. Copies of such additional information may be
obtained from the SEC upon payment of the prescribed fee.
- - - -----------------------------------------------------------
ILLUSTRATIONS
DEATH BENEFITS, CASH SURRENDER VALUE AND ACCUMULATED PREMIUMS
The tables in this Section illustrate how the Policy operates. They show how
the Death Benefit, Cash Surrender Value, and Accumulation Value could vary over
an extended period of time assuming hypothetical gross rates of return. (i.e.
investment income and capital gains and losses, realized or unrealized) for the
Variable Account equal to constant after tax annual rates of 0%, 6%, and 12%.
The tables are illustrated for this Policy based on Specified Amount of life
insurance coverage of $250,000 and $500,000 for a male age 35, 45 and 55. The
Insureds are assumed to be preferred rate class. Values are given based on
current and guaranteed Policy charges. These tables may assist in comparison of
Death Benefits, Cash Surrender Values and Accumulation Values with those under
other variable life insurance policies that may be issued by United of Omaha or
other companies. It is also assumed that no riders are attached to the base
policy illustrated.
Death Benefits, Cash Surrender Values, and Accumulation Values for a Policy
would be different from the amounts shown if the actual gross rates of return
averaged 0%, 6% or 12%, but varied above and below that average for the period,
if the initial premium was paid in another amount, if additional payments were
made, or if any Policy loan or partial withdrawal was made during the period of
time illustrated. They would also be different depending on the allocation of
Accumulation Value among the Variable Account's Subaccounts, if the actual gross
rates of return averaged 0%, 6% or 12%, but varied above and below that average
for the period.
The amounts for the Death Benefit, Cash Surrender Value, and Accumulation
Value shown in the tables reflect the fact that an expense charge and a charge
for the cost of insurance are deducted from the Accumulation Value on each
Monthly Deduction Date. The Cash Surrender Values shown in the tables reflect
the fact that a Surrender Charge is deducted from the Accumulation Value upon
surrender or lapse during the first 12 years following each premium payment. The
amounts shown in the tables take into account an average daily charge equal to
an annual charge of 0.89% of the average daily net assets of the Portfolios for
30
<PAGE>
the investment advisory fees and operating expenses. The gross annual investment
return rates of 0%, 6%, and 12% on the Portfolio's assets are equal to net
annual investment return rates of -0.89%, 5.11%, 11.11%, respectively.
The hypothetical rates of return shown in the tables do not reflect any tax
charges attributable to the Variable Account, since no such charges are
currently made. If any such charges are imposed in the future, the gross annual
rate of return would have to exceed the rates shown by an amount sufficient to
cover the tax charges, in order to produce the Death Benefits, Cash Surrender
Values and Accumulation Values illustrated.
The second column of each table shows the amount which would accumulate if
an amount equal to the annual premium required to keep the Policy in force were
invested to earn interest of 5% per year, compounded annually.
Upon request, United of Omaha will provide a comparable illustration based
upon the proposed Insured's actual age, sex and underwriting classification, the
specified amount, the proposed amount and frequency of premium payments and any
available riders requested.
31
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.11% NET)
Male issue age Initial Premium $
Preferred Class Face Amount $
[HYPOTHETICAL ILLUSTRATIONS WILL BE INCLUDED BY PRE-EFFECTIVE AMENDMENT.]
The hypothetical investment results shown above and elsewhere in this prospectus
are illustrative only and should not be deemed a representation of past or
future investment results. Actual investment results may be more or less than
those shown and will depend on a number of different factors, including the
investment allocations by the Owner and different investment rates of return for
the Portfolios. The Death Benefit, Accumulation Value and Cash Surrender Value
for a Policy would be different from those shown if the actual investment rates
of return averaged the rates shown above over a period of years, but fluctuated
above or below those averages from individual Policy years. These values would
also be different if any Policy loan or partial withdrawal were made during the
period. No representation can be made that these assumed investment rates of
return can be achieved for any one year or sustained over any period of time.
32
<PAGE>
- - - -----------------------------------------------------------
FINANCIAL STATEMENTS
[TO BE INCLUDED BY PRE-EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT.]
<PAGE>
APPENDIX A
VARIABLE PAYOUT OPTIONS
You may choose payout Options 2, 4 or 6 to be paid as variable payments.
Variable payments vary according to the net investment return of the Subaccounts
chosen. If variable payments are being made under Option 2 or 6 and do not
involve life contingencies, then you may surrender the policy and receive the
commuted value of any unpaid payments.
FIRST VARIABLE PAYMENT
We will compute the dollar amount of the first monthly variable payment by
applying all or part of the Proceeds to the Variable Payout Options table shown
in this policy for the payout option you choose. The table shows the dollar
amount of monthly payment that you can buy with each $1000 of Proceeds.
If you have chosen more than one Subaccount, we will apply the accumulation
value of each Subaccount separately to the Variable Payout Options table. The
total amount of the first variable payment equals the sum of the payment amounts
payable for each Subaccount.
SECOND AND LATER VARIABLE PAYMENTS
The dollar amount of the second and later variable payments is not set. It may
change from month to month. We will compute the payment on the 10th Valuation
Date before the payment is due.
The amount of each variable payment after the first equals:
(a) the sum of the number of variable payment units under each Subaccount;
multiplied by
(b) the current variable payment unit value for each Subaccount as of
the date we compute the payment.
A variable payment unit is a measuring unit used in computing the amount of the
variable payments. The value of a variable payment unit for each Subaccount will
vary with the net investment return of the Subaccount.
VARIABLE PAYMENT UNIT VALUE
The current value of a variable payment unit for each Subaccount is:
(a) the value as of the date we computed the last payment; multiplied by
(b) the Net Investment Factor for the Subaccount as of the date on which we
are computing the current payment.
The Net Investment Factor is figured by dividing (a) by (b), then subtracting
(c) from the result, then multiplying by the offset factor described below. The
values of (a), (b) and (c) are defined as follows:
(a) is the net result of
(1) the Net Asset Value of a Portfolio share held in a Subaccount as of
the end of the current payment period; plus or minus
(2) a per share credit or charge for any taxes we incurred since the
last computation date that were charged to the operation of the
Subaccount.
(b) is the Net Asset Value of a Portfolio share held in the Subaccount as of
the beginning of the current payment period.
(c) is the asset charge factor that reflects the expense charges deducted
from the Variable Account. This factor is equal, on an annual basis, to
1.20% of the daily net asset value of the Variable Account.
The result of the calculation described above is then multiplied by a factor
that offsets the assumed investment rate upon which the Variable Payout Options
table is based. This allows the actual investment rate to be credited. For a
one-day Valuation Period the factor is 0.99989255, using an assumed investment
rate of 4% per year.
<PAGE>
NUMBER OF VARIABLE PAYMENT UNITS
The number of variable payment units payable for each Subaccount equals:
(a) the amount of the first monthly variable payment payable for that
Subaccount; divided by
(b) the variable payment unit value for that Subaccount as of the 10th
Valuation Date before the first variable payment is made.
The number of variable payment units payable for each Subaccount is fixed when
we compute the first variable payment. The number remains fixed unless you
exchange variable payment units between Subaccounts. The number of variable
payment units will not change as a result of investment experience.
We guarantee that the dollar amount of each variable payment after the first
will not be affected by actual expenses or changes in mortality experience.
<PAGE>
PART II - OTHER INFORMATION
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
By a Resolution adopted May 21, 1996, United's Board of Directors provides
for indemnification of a director, officer or employee to the full extent of the
law. Generally, the Nebraska Business Corporation Act permits indemnification
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred if the indemnitee acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation. However, no indemnification shall be made in any type of action by
or in the right of United if the proposed indemnitee is adjudged to be liable
for negligence or misconduct in the performance of his or her duty to United,
unless a court determines otherwise.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of United
pursuant to the foregoing provisions, or otherwise, United has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
may be against public policy as expressed in the Act and may be, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by United of expenses incurred or paid by a
director, officer, or controlling person of United in the successful defense of
any action, suite or proceeding) is asserted by such 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.
REPRESENTATION PURSUANT TO SECTION 26(E)
United of Omaha Life Insurance Company 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
of Omaha Life Insurance Company.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement consists of the following papers and documents:
The facing sheet.
A reconciliation and tie of the information shown in the prospectus with the
items of Form N-8B-2.
The prospectus.
The undertaking to file reports.
The Rule 484 Undertaking.
The Section 26(e) Representation.
The signatures.
Written consents of the following persons:
Independent Auditors (included in Exhibit 7) (to be filed by amendment)
Kenneth W. Reitz, Esquire (included in Exhibit 2)
Robert E. Hupf, F.S.A., M.A.A.A. (included in Exhibit 6)
The following exhibits:
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page No. ****
1.A. (1) Resolution of the Board of Directors of United Life Insurance
Company establishing the Variable Account. *
(2) None.
(3)(a) Principal Underwriter Agreement by and between United, on its
own behalf and on behalf of the Variable Account, and Mutual of
Omaha Investor Services. *
(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between Mutual of Omaha Investor Services, Inc. and the
Broker/Dealer. **
(c) Commission Schedule for Policies. *****
(4) None.
(5)(a) Form of Policy for the ULTRALIFE flexible premium variable life
insurance policy.
(b) Forms of Riders 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) None.
(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 MFS Variable Insurance Trust. **
(e) Participation Agreement by and between United of Omaha Life
Insurance Company and 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.
**
<PAGE>
(9) None.
(10) Form of Application for the United of Omaha Life Insurance
Company ULTRALIFE Flexible Premium Variable Life Insurance
Policy. *****
(11) Issuance, Transfer and Redemption Memorandum *****
2. Opinion and Consent of Counsel.
3. Not Applicable.
4. Not Applicable.
5. Not Applicable.
6. Opinion and Consent of Actuary.
7. Independent Auditor's Consent. *****
8. None
9. Powers of Attorney. ***
* Incorporated by Reference to the Registration Statement for United of Omaha
Separate Account B filed on December 27, 1996 (File No. 333-18881).
** 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 Pre-Effective Amendment No. 1 to the
Registration Statement for United of Omaha Separate Account B filed on June 20,
1997 (File No. 333-18881).
**** Page numbers included only in manually executed original in compliance with
Rule 403(d) under the Securities Act of 1933.
***** To be filed by Pre-effective amendment to this Registration Statement.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, the Registrant has caused this
Registration Statement to be signed on its behalf, in the City of Omaha and
State of Nebraska, on September 12, 1997.
UNITED OF OMAHA SEPARATE ACCOUNT B
(Registrant)
UNITED OF OMAHA LIFE INSURANCE COMPANY
(Depositor)
/s/Kenneth W. Reitz
By: Kenneth W. Reitz
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the duties indicated:
Signatures Title Date
_____*____________________ Chairman of the Board 9/12/97
Thomas J. Skutt
_____*____________________ Vice-Chairman of the Board, 9/12/97
John W. Weekly Chief Executive Officer
_____*____________________ Director, President 9/12/97
John A. Sturgeon
_____*____________________ General Comptroller 9/12/97
Tommie Thompson (Principal Financial Officer, and
Principal Accounting Officer)
_____*____________________ Director 9/12/97
-
Samuel L. Foggie
_____*___________________ Director 9/12/97
-
John D. Minton
_____*__________________ Director 9/12/97
-
Hugh V. Plunkett, III
_____*___________________ Director 9/12/97
-
Richard J. Sampson
_____*___________________ Director 9/12/97
-
Oscar S. Straus
________________________ Director 9/12/97
Michael A. Wayne
By: /s/ Kenneth W. Reitz Date: September 12, 1997
Kenneth W. Reitz
* Signed by Kenneth W. Reitz under Powers of Attorney executed on May 20, 1997,
filed as exhibits incorporated by reference in this registration statement.
<PAGE>
EXHIBITS
1.A(5)(a) Form of Policy for the ULTRA VARIABLE LIFE flexible premium variable
universal life insurance policy.
1.A(5)(b) Form of Riders of the Policy.
2. Opinion and Consent of Counsel
6. Opinion and Consent of Actuary
<PAGE>
REGISTRATION NO. 333 -
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
UNITED OF OMAHA SEPARATE ACCOUNT B
OF
UNITED OF OMAHA LIFE INSURANCE COMPANY
- - - --------------------------------------------------------------------------------
EXHIBITS
- - - --------------------------------------------------------------------------------
TO
THE INITIAL REGISTRATION STATEMENT ON FORM S-6
UNDER
THE SECURITIES ACT OF 1933
September 15, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page No.****
1.A. (1) Resolution of the Board of Directors of United Life Insurance
Company establishing the Variable Account. *
(2) None.
(3)(a) Principal Underwriter Agreement by and between United, on its
own behalf and on behalf of the Variable Account, and Mutual of
Omaha Investor Services. *
(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between Mutual of Omaha Investor Services, Inc. and the
Broker/Dealer. **
(c) Commission Schedule for Policies. *****
(4) None.
(5)(a) Form of Policy for the ULTRALIFE flexible premium variable life
insurance policy.
(b) Forms of Riders 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) None.
(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 MFS Variable Insurance Trust. **
(e) Participation Agreement by and between United of Omaha Life
Insurance Company and 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.
**
(9) None.
(10) Form of Application for the United of Omaha Life Insurance
Company ULTRALIFE Flexible Premium Variable Life Insurance
Policy. *****
(11) Issuance, Transfer and Redemption Memorandum *****
2. Opinion and Consent of Counsel.
3. Not Applicable.
<PAGE>
4. Not Applicable.
5. Not Applicable.
6. Opinion and Consent of Actuary.
7. Independent Auditor's Consent. *****
8. None
9. Powers of Attorney. ***
* Incorporated by Reference to the Registration Statement for United of Omaha
Separate Account B filed on December 27, 1996 (File No. 333-18881).
** 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 Pre-Effective Amendment No. 1 to the
Registration Statement for United of Omaha Separate Account B filed on June 20,
1997 (File No. 333-18881).
**** Page numbers included only in manually executed original in compliance with
Rule 403(d) under the Securities Act of 1933.
***** To be filed by Pre-effective amendment to this Registration Statement.
Exhibit 5(a) Form of Policy for the ULTRALIFE flexible premium variable life
insurance policy.
<PAGE>
[GRAPHIC OMITTED]
UNITED OF OMAHA
LIFE INSURANCE
COMPANY
A STOCK COMPANY
Insured JOHN J. DOE Date of Issue NOVEMBER 1, 1997
Policy Number 1234567 Initial Specified Amount $100,000
LIFE INSURANCE POLICY
- - - --------------------------------------------------------------------------------
THIS IS A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY WITH
PREMIUMS PAYABLE UNTIL AGE 100. THE POLICY'S ACCUMULATION VALUE IN THE VARIABLE
ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE IN THAT ACCOUNT AND WILL INCREASE
OR DECREASE DAILY. THE DOLLAR AMOUNT IS NOT GUARANTEED. THE AMOUNT OF THE DEATH
BENEFIT MAY BE FIXED OR VARIABLE, DEPENDING ON THE INVESTMENT EXPERIENCE OF THE
VARIABLE ACCOUNT. PLEASE SEE THE DEATH BENEFIT PROVISION ON PAGE 6 FOR
ADDITIONAL INFORMATION. NO DIVIDENDS ARE PAYABLE.
United of Omaha Life Insurance Company will pay the death benefit of this policy
to the beneficiary within two months after we receive proof at the Home Office
that the Insured died while this policy was in force. On the maturity date we
will pay you the policy's Accumulation Value, less any loan and unpaid loan
interest, if (a) the Insured is then living; (b) this policy is in force; and
(c) coverage beyond maturity is not elected.
READ YOUR POLICY CAREFULLY.
IT INCLUDES THE PROVISIONS ON THE FOLLOWING PAGES.
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND
UNITED OF OMAHA LIFE INSURANCE COMPANY.
RIGHT TO EXAMINE THIS POLICY. IF YOU ARE NOT SATISFIED WITH YOUR POLICY, RETURN
IT TO US OR OUR AGENT WITHIN 10 DAYS AFTER YOU RECEIVE THE POLICY OR 45 DAYS
AFTER YOU SIGNED THE APPLICATION, WHICHEVER IS LATER. WE WILL CANCEL YOUR POLICY
AS OF THE DATE ANY INSURANCE BECAME EFFECTIVE. WE WILL REFUND THE PREMIUMS PAID
WITHIN SEVEN DAYS AFTER WE RECEIVE THE RETURNED POLICY.
For customer service or questions about your coverage, please call
1-800-238-9354.
/S/ JOHN A. STURGEON
President
/S/ M. JANE HUERTER
Corporate Secretary
UNITED OF OMAHA
HOME OFFICE: OMAHA, NEBRASKA
MUTUAL OF OMAHA PLAZA (68175)
P. O. BOX 8430
OMAHA, NEBRASKA 68103-0430
<PAGE>
================================================================================
PLAN OF INSURANCE
Variable Universal Life Insurance with Flexible Premiums Payable until Age 100
================================================================================
POLICY DATA
Insured JOHN J. DOE
Policy Number 1234567 Initial Specified Amount $100,000
Age at Issue 35 Sex MALE
Risk Class NONTOBACCO
Rate Class PREFERRED
Date of Issue NOVEMBER 1, 1997
Maturity Date* NOVEMBER 1, 2062
Initial Premium $672.00 Mode Selected ANNUAL
Additional Payment $0.00 Years Payable 65
Policyowner See Application or Endorsement
Beneficiary See Application or Endorsement
PLANNED PREMIUMS FOR MODE OF PAYMENT
Annual Semi-Annual Quarterly Bank Service Plan
$1,000.00 $500.00 $250.00 $83.34
- - - --------------------------------------------------------------------------------
SCHEDULE OF BENEFITS
M0NTHLY COST
OF INSURANCE YEARS
FORM BENEFIT AND RIDERS PAYABLE
6387L-1197 Life Insurance See Data Pages 65
Death Benefit Option 1 - LEVEL
2471L-1197 Waiver of Surrender Charges Rider No Charge
* The maturity date is the policy anniversary next following the Insured's
100th birthday. The policy may terminate prior to the maturity date if no
premiums are paid after the initial premium or if subsequent premiums are
insufficient to continue this policy in force, subject to the NO-LAPSE PERIOD
provision, if applicable. If the policy does continue in force to the maturity
date, it is possible there will be little or no cash surrender value at that
time. Policy values will be affected by the investment experience of the
Variable Account and to the extent that interest credits and cost of insurance
charges are more favorable than guaranteed credits and charges.
<PAGE>
NO-LAPSE PERIOD
If the minimum monthly premium is paid, the No-Lapse Period of the policy is 35
years. The minimum monthly premium shall equal (a) the minimum monthly premium
for the base plan, plus (b) the minimum monthly premium(s) for any rider(s). The
minimum monthly premium for the base plan is $0.56000 per $1,000 of Specified
Amount. The minimum monthly premium(s) for any Additional Insured Term Rider
is/are computed as set forth in the rider data pages.
If the lifetime monthly premium is paid, the No-Lapse Period of the policy is 65
years. The lifetime monthly premium shall equal (a) the lifetime monthly premium
for the base plan, plus (b) the lifetime monthly premium(s) for any rider(s).
The lifetime monthly premium for the base plan is $1.09250 per $1,000 of
Specified Amount. The lifetime monthly premium(s) for any Additional Insured
Term Rider is/are computed as set forth in the rider data pages.
All premiums reflect the Insured's age, sex, risk and rate classes.
POLICY CHARGES
RISK CHARGE: In years one through 10
o 0.05833% of the Accumulation Value, deducted on each
Monthly Deduction Date
In years 11 and later
o 0.04583% of the Accumulation Value, deducted on each
Monthly Deduction Date
ADMINISTRATIVE CHARGE: $7 deducted on each Monthly Deduction Date
PREMIUM CHARGES: For state and federal tax expenses
O 3.75% of each premium payment
For premium processing expenses
o $2 per each premium payment
TRANSFER CHARGE: After the 12th transfer each year, $10 per transfer
SURRENDER CHARGE
For Each $1,000 Specified Amount
Or Decrease in Current Specified Amount
Surrender Charges Reflect the Insured's Age, Sex, and Risk Class
Year Amount Year Amount Year Amount
1 $13 5 $13 9 $6
2 $13 6 $11 10 $4
3 $13 7 $9 11 $3
4 $13 8 $8 12 $1
13 and later $0
<PAGE>
TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE CHARGES
PER $1,000 OF NET AMOUNT AT RISK
The Guaranteed Maximum Monthly Cost of Insurance Charges
Reflect the Insured's Age, Sex, Risk and Rate Classes
Age Charge Age Charge Age Charge Age Charge
35 0.1442 51 0.4667 67 2.2633 83 10.7950
36 0.1517 52 0.5117 68 2.4933 84 11.8483
37 0.1617 53 0.5633 69 2.7483 85 12.9542
38 0.1725 54 0.6208 70 3.0367 86 14.0983
39 0.1842 55 0.6850 71 3.3658 87 15.2633
40 0.1983 56 0.7550 72 3.7458 88 16.4442
41 0.2133 57 0.8292 73 4.1758 89 17.6575
42 0.2292 58 0.9117 74 4.6483 90 18.9208
43 0.2467 59 1.0042 75 5.1533 91 20.2633
44 0.2658 60 1.1075 76 5.6867 92 21.7350
45 0.2875 61 1.2225 77 6.2442 93 23.4792
46 0.3108 62 1.3550 78 6.8292 94 25.8192
47 0.3358 63 1.5050 79 7.4600 95 29.3217
48 0.3633 64 1.6717 80 8.1567 96 35.0825
49 0.3933 65 1.8542 81 8.9375 97 45.0833
50 0.4275 66 2.0517 82 9.8183 98 62.0958
99 83.3333
<PAGE>
INVESTMENTS
VARIABLE ACCOUNT: United of Omaha Separate
Account B
INVESTMENT OPTIONS: INITIAL ALLOCATION (%):
United of Omaha Fixed Account 10
[Alger American Growth Portfolio] 0
[Alger American Small Capitalization Portfolio] 30
[Federated Prime Money Fund II ("Money Market") Portfolio] 30
[Federated Fund for US Government Securities II Portfolio] 0
[Fidelity VIP II Asset Manager: Growth Portfolio] 0
[Fidelity VIP Equity-Income Portfolio] 0
[Fidelity VIP II Contrafund Portfolio] 30
[Fidelity Index 500 Portfolio] 0
[MFS Emerging Growth Portfolio] 0
[MFS High Income Fund Portfolio] 0
[MFS Research Portfolio] 0
[MFS Value Series Portfolio] 0
[MFS World Government Portfolio] 0
[Pioneer Capital Growth Portfolio] 0
[Pioneer Real Estate Portfolio] 0
[Scudder Global Portfolio] 0
[Scudder Growth and Income Portfolio] 0
[Scudder International Portfolio] 0
[T. Rowe Price Equity Income Portfolio] 0
[T. Rowe Price International Stock Portfolio] 0
[T. Rowe Price Limited-Term Bond Portfolio] 0
[T. Rowe Price New American Growth Portfolio] 0
[T. Rowe Price Personal Strategy Balanced Portfolio] 0
<PAGE>
TABLE OF CONTENTS
DEFINITIONS....................................................................1
GENERAL PROVISIONS.............................................................2
The Entire Contract..........................................................2
Delay of Payments............................................................2
Incontestability.............................................................2
Misstatement of Age or Sex...................................................3
Nonparticipating.............................................................3
Periodic Reports.............................................................3
Policy Dates.................................................................3
EXCLUSION......................................................................3
Suicide......................................................................3
POLICYOWNER AND BENEFICIARY....................................................3
Ownership....................................................................3
Change of Ownership and Assignment...........................................5
Beneficiary..................................................................5
Beneficiary Change...........................................................5
PREMIUMS AND REINSTATEMENT.....................................................5
Consideration................................................................5
Payment of Premiums..........................................................5
Planned Premiums and Additional Payments.....................................5
Allocation of Net Premiums...................................................7
No-Lapse Period..............................................................7
Grace Period.................................................................7
Reinstatement................................................................7
DEATH BENEFIT..................................................................8
Change in Specified Amount...................................................8
Death Benefit Options........................................................8
THE VARIABLE ACCOUNT...........................................................9
General Description..........................................................9
Investment Allocations to the Variable Account...............................9
Valuation of Assets.........................................................10
Transfers Between Subaccounts...............................................10
Dollar Cost Averaging.......................................................10
Asset Allocation Program....................................................10
THE FIXED ACCOUNT.............................................................11
General Description.........................................................11
Transfers from the Fixed Account............................................11
POLICY VALUES.................................................................11
Accumulation Value..........................................................11
Accumulation Unit...........................................................11
The Fixed Account...........................................................12
Partial Withdrawals.........................................................12
POLICY CHARGES................................................................12
Monthly Deduction...........................................................12
Cost of Insurance...........................................................13
Expense Charges.............................................................13
Surrender Charge............................................................13
POLICY LOANS AND REPAYMENTS...................................................14
Policy Loans................................................................14
Preferred Loans.............................................................14
Loan Repayments.............................................................14
COVERAGE BEYOND MATURITY......................................................14
Coverage Beyond Maturity....................................................14
INSURANCE AND NONFORFEITURE OPTIONS...........................................16
Surrender for Cash..........................................................16
Continuation of Insurance...................................................16
PAYOUT OPTIONS FOR PAYMENT OF POLICY PROCEEDS.................................16
General Conditions..........................................................16
Payout Options..............................................................18
Variable Payout Options.....................................................20
First Variable Payment......................................................20
Second and Later Variable Payments..........................................20
Variable Payment Unit Value.................................................20
Number of Variable Payment Units............................................20
Exchange of Variable Payment Units..........................................21
<PAGE>
DEFINITIONS
ACCUMULATION UNIT means an accounting unit of measure used to calculate the
accumulation value of the Variable Account.
ACCUMULATION VALUE means the dollar value as of any Valuation Date of all
amounts accumulated under this policy.
AGE means age last birthday.
ALLOCATION DATE means the first business day following the completion of the
RIGHT TO EXAMINE THIS POLICY period.
BENEFICIARY means the person, persons or entity you name to receive the death
benefit of this policy.
EXECUTIVE OFFICER means the president, vice president, the secretary or
assistant secretary of United of Omaha Life Insurance Company.
FIXED ACCOUNT means the account which consists of general account assets of
United of Omaha Life Insurance Company.
INVESTMENT OPTIONS means the Series Funds currently available under the policy,
plus the Fixed Account. Current Investment Options are shown on the data pages.
LOAN ACCOUNT means an account established for any amounts transferred from the
Fixed Account and Subaccounts as a result of loans. The Loan Account is credited
with interest and is not based on the experience of the Variable Account.
MONTHLY DEDUCTION DATE means the date of issue and the same date each month
thereafter.
NET PREMIUM and NET ADDITIONAL PAYMENT mean a premium or additional payment less
the premium charges shown on the data pages.
NET ASSETS OF THE VARIABLE ACCOUNT means the market value of the investments
held by the Variable Account.
NET ASSET VALUE PER SHARE means the market value of a Series Fund's investment
Portfolio divided by the number of shares in the Portfolio.
OUR, US AND WE refer to United of Omaha Life Insurance Company, Omaha, Nebraska.
PAYEE means the person who receives payments under this policy.
PORTFOLIO means a Series Fund's separate investment series that is available
under the policy.
PROCEEDS means the death benefit, the cash surrender value or the amount payable
at maturity.
RIDER means a policy provision added to this policy to expand or limit the
benefits payable.
SERIES FUNDS means those open-ended management companies in which the Variable
Account invests.
SPECIFIED AMOUNT means the amount of insurance selected. The initial Specified
Amount is shown on the data pages. The current Specified Amount is the initial
Specified Amount plus any later increase and less any later decrease.
SUBACCOUNT means that portion of the Variable Account which invests in shares of
mutual funds or any other investment Portfolios that we determine to be suitable
for this policy's purposes.
VALUATION DATE means each day that the New York Stock Exchange is open for
trading.
VALUATION PERIOD means the period commencing at the close of business of the New
York Stock Exchange on each Valuation Date and ending at the close of business
for the next succeeding Valuation Date.
1
<PAGE>
VARIABLE ACCOUNT means a separate account maintained by us in which a portion of
our assets has been allocated for this and certain other policies. It has been
designated on the data pages.
YEAR means policy year measured from the date of issue unless otherwise
indicated.
YOU and YOUR refer to the owner of this policy.
GENERAL PROVISIONS
THE ENTIRE CONTRACT
The entire contract is this policy, any riders, endorsements and amendments, and
the signed application(s), a copy of which is attached. All statements made in
the application will, in the absence of fraud, be deemed representations and not
warranties. We will not use any statement to contest this policy or deny a claim
unless it is in the application.
Any change of this policy requires the written consent of an executive officer.
No agent has the authority to change this contract or waive any of its terms.
We may amend this policy to qualify it as life insurance under the Internal
Revenue Code of 1986, as amended. Any amendment may be effective as of the
policy's date of issue.
DELAY OF PAYMENTS
We will usually pay any amounts payable from the Variable Account as a policy
loan, partial withdrawal or cash surrender within seven days after we receive
your written request in a form satisfactory to us. We can postpone such payments
or any transfers of amounts between Subaccounts or into the Fixed Account or the
Loan 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 and 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;
(d) the Securities and Exchange Commission permits delay for the protection
of security holders.
The applicable rules of the Securities and Exchange Commission will govern as to
whether the conditions in (c) or (d) exist.
We may defer payment of policy loans, partial withdrawals or a cash surrender
from the Fixed Account for up to six months from the date we receive your
written request.
INCONTESTABILITY
We will not contest the validity of this policy after it has been in force
during the lifetime of the Insured for two years from the date of issue.
We will not contest the validity of an increase in current Specified Amount
after this policy has been in force during the lifetime of the Insured for two
years from the effective date of the increase. Any contest of an increase in
Specified Amount will be based on material representations in the application
for that increase.
We will not contest the validity of this policy after it has been in force
during the lifetime of the Insured for two years from the date of reinstatement.
Any contest after reinstatement will based on material representations in the
application for reinstatement.
2
<PAGE>
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Insured has been misstated, the death benefit will be
the amount which would be purchased by the most recent cost of insurance charges
at the correct age and sex.
NONPARTICIPATING
No dividends will be paid. This policy will not share in our surplus earnings or
profits.
PERIODIC REPORTS
At least once each year we will send you a statement showing your Accumulation
Value and death benefit as of a date not more than two months prior to the date
of mailing. We will also send such statements as may be required by applicable
state and federal laws, rules and regulations.
POLICY DATES
The following dates are measured from the date of issue:
(a) policy months;
(b) policy years;
(c) policy anniversaries;
(d) Monthly Deduction Dates;
(e) premium due date;
(f) the maturity date; and
(g) the effective date of surrender.
EXCLUSION
SUICIDE
We will not pay the death benefit if the Insured's death results from suicide,
while sane or insane, within two years from the date of issue. Instead we will
pay the sum of the premiums paid since issue less any loans and less any partial
withdrawals.
We will not pay that portion of the death benefit resulting from an increase in
current Specified Amount if the Insured's death results from suicide, while sane
or insane, within two years from the effective date of the increase. Instead we
will pay the sum of the cost of insurance charges for the increase since the
date of the increase.
POLICYOWNER AND BENEFICIARY
OWNERSHIP
The owner is:
(a) the Insured;
(b) the applicant, if other than the Insured; or
(c) any absolute assignee of record.
While the Insured is alive, only you may exercise the rights under this policy.
You may name a new owner as described in the CHANGE OF OWNERSHIP AND ASSIGNMENT
provision.
3
<PAGE>
CHANGE OF OWNERSHIP AND ASSIGNMENT
You may name a new owner of this policy by an absolute assignment or pledge it
as collateral by a collateral assignment. The assignment must be in writing. No
assignment will be binding on us until we record and acknowledge it. We are not
responsible for the validity or effect of an assignment of this policy. The
rights of any Beneficiary will be subject to a collateral assignment.
If the Beneficiary of this policy is irrevocable, a change of ownership or a
collateral assignment may be made only by joint written request from you and the
irrevocable Beneficiary.
BENEFICIARY
The Beneficiary is named in the application and may be changed as stated in the
BENEFICIARY CHANGE provision, unless the Beneficiary is irrevocable.
BENEFICIARY CHANGE
To change a Beneficiary, send us a written request. When recorded and
acknowledged by us, the change will be effective as of the date you signed the
request. The change will not apply to any payments made or other action taken by
us before recording.
If the Beneficiary is irrevocable, you may change the Beneficiary only by joint
written request from you and the irrevocable Beneficiary.
PREMIUMS AND REINSTATEMENT
CONSIDERATION
The consideration for this policy is the application and the payment of the
initial premium and the additional payment, if any.
PAYMENT OF PREMIUMS
You may pay premiums at our Home Office or to an authorized agent. Planned
premiums may be paid:
(a) annually;
(b) semiannually; or
(c) at other intervals we offer.
We will send you a receipt for any payment signed by an executive officer if you
request one.
PLANNED PREMIUMS AND ADDITIONAL PAYMENTS
The planned premium and the payment mode you selected in the application is
shown on the data pages.
Beginning with the second year you may change the planned premium once each
year. The planned premium is flexible.
You may also make additional payments. The amount of any additional payment paid
with the initial premium is shown on the data pages.
Changes in the planned premiums and acceptance of additional payments are
subject to our approval. We reserve the right to limit premiums or refund any
values in order to qualify this policy as life insurance under the Internal
Revenue Code of 1986, as amended.
4
<PAGE>
ALLOCATION OF NET PREMIUMS
We will allocate net premiums to the Money Market Fund until the Allocation
Date. On the Allocation Date the net premium will be allocated to one or more
Investment Options according to your instructions.
You may change your allocation instructions by written request. The change will
be effective on the date we receive your request. The change will apply to any
additional premiums paid after the date of the change.
NO-LAPSE PERIOD
This provision applies only if:
(a) either the minimum monthly premium or the lifetime monthly premium
requirement has been met; and
(b) the policy has never been reinstated; and
(c) no Additional Insured Term Insurance Rider covering the Insured is
attached.
The minimum monthly premium per $1,000 of Specified Amount and the minimum
No-Lapse Period are shown on the data pages. If you meet the minimum monthly
premium requirement, then the policy will not enter the grace period during the
minimum No-Lapse Period, if applicable.
The minimum monthly premium requirement is met on any monthly deduction date
when the total premiums paid since the policy's date of issue less any partial
withdrawals, accumulated at 4% interest, less any outstanding policy loan,
equals or exceeds the minimum monthly premium accumulated at 4% interest.
The lifetime monthly premium per $1,000 of Specified Amount and the lifetime
No-Lapse Period are shown on the data pages. If you meet the lifetime monthly
premium requirement, then the policy will not enter the grace period during the
lifetime No-Lapse Period, if applicable.
The lifetime monthly premium requirement is met on any monthly deduction date
when the total premiums paid since the policy's date of issue less any partial
withdrawals, accumulated at 4% interest, less any outstanding policy loan,
equals or exceeds the lifetime monthly premium accumulated at 4% interest.
GRACE PERIOD
If there is no outstanding policy loan, the grace period will begin on any
Monthly Deduction Date when the Accumulation Value is not enough to pay the
Monthly Deduction, subject to the NO-LAPSE PERIOD provision. If there is an
outstanding policy loan, the grace period will begin on any Monthly Deduction
Date when the cash surrender value is not enough to pay the Monthly Deduction
and any unpaid loan interest, subject to the NO-LAPSE PERIOD provision.
Written notice will be sent to your last known address and that of any assignee
of record within 30 days after the start of the grace period. We will allow 61
days from the start of the grace period for the payment of an amount large
enough to pay all unpaid Monthly Deductions and unpaid loan interest. This
policy will remain in force during the grace period. If the payment is not
received by the end of the grace period, this policy will terminate as of the
first day of the grace period. If the death of the Insured occurs on the Monthly
Deduction Date or during the grace period, any past due Monthly Deductions and
unpaid loan interest will be deducted in determining the death benefit.
REINSTATEMENT
If this policy lapses and has not been surrendered for cash, you may reinstate
it within five years of the date of lapse and prior to the maturity date,
subject to the following:
(a) written application signed by you and the Insured;
(b) evidence of insurability satisfactory to us;
(c) payment of an amount large enough to continue this policy in force for
three months; and
5
<PAGE>
(d) re-establishment of surrender charges, if any, measured from the
original date of issue to the date of reinstatement.
The effective date of reinstatement will be the date we approve the application
for reinstatement.
The Specified Amount of the reinstated policy may not exceed the Specified
Amount at the time of lapse. The Accumulation Value on the effective date of
reinstatement will equal:
(a) the amount required in (c) above; plus
(b) any applicable surrender charge(s) measured from the original date of
issue to the date of reinstatement; less
(d) the Monthly Deduction for the current month.
DEATH BENEFIT
CHANGE IN SPECIFIED AMOUNT
After the first year, you may change the current Specified Amount once each
year.
You must apply for any increase in current Specified Amount with a new
application and provide evidence of insurability satisfactory to us. The
Specified Amount may not be increased after the Insured attains age 90.
Any decrease in current Specified Amount will be subject to the applicable
surrender charge as described in the SURRENDER CHARGE provision. A decrease will
be subject to a minimum Specified Amount of $100,000 remaining in force during
policy years one through five and $50,000 remaining in force thereafter.
An increase or decrease will go into effect on the Monthly Deduction Date
following the date we approve the change. We will send you an amendment showing
the current Specified Amount after the change.
An increase or decrease in current Specified Amount will change the minimum
monthly premium and lifetime monthly premium requirements applicable to the
NO-LAPSE PERIOD provision.
DEATH BENEFIT OPTIONS
The death benefit equals either death benefit Option 1 less any loan or death
benefit Option 2 less any loan. We will pay the death benefit according to the
death benefit option in effect at the time of the Insured's death. Unless
otherwise requested, Option 1 is in effect.
Option 1 is the greater of:
(a) the current Specified Amount; or
(b) the policy's Accumulation Value on the date of death plus the corridor
amount.
Option 2 is the policy's Accumulation Value on the date of death plus the
greater of:
(a) the current Specified Amount; or
(b) the corridor amount.
The corridor amount is the Accumulation Value multiplied by the corridor
percentage from the table shown below for the Insured's attained age.
6
<PAGE>
- - - ---------------------------------------------------------
Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
- - - ---------------------------------------------------------
0-40 150% 54 57% 68 17%
41 143% 55 50% 69 16%
42 136% 56 46% 70 15%
43 129% 57 42% 71 13%
44 122% 58 38% 72 11%
45 115% 59 34% 73 9%
46 109% 60 30% 74 7%
47 103% 61 28% 75-90 5%
48 97% 62 26% 91 4%
49 91% 63 24% 92 3%
50 85% 64 22% 93 2%
51 78% 65 20% 94 1%
52 71% 66 19% 95-99 0%
53 64% 67 18% 100+ 1%
- - - ---------------------------------------------------------
After the first year, you may change the death benefit option once each year.
The change will take effect on the Monthly Deduction Date after we receive a
written request for change, at which time the death benefit will reflect the
change in option.
Changes in the death benefit option may result in a change in the current
Specified Amount. We will increase or decrease the current Specified Amount to
maintain the death benefit that was in effect before the death benefit option
change. Any decrease resulting from a change in death benefit option will be
subject to the applicable surrender charge as described in the SURRENDER CHARGE
provision.
We will send you an amendment showing the death benefit option in effect and the
current Specified Amount after the change.
An increase or decrease in current Specified Amount resulting from a death
benefit option change will change the minimum monthly premium and lifetime
monthly premium requirements applicable to any No-Lapse Period.
THE VARIABLE ACCOUNT
GENERAL DESCRIPTION
The name of the Variable Account is shown on the data pages. The assets of the
Variable Account are our property. These assets are not chargeable with the
liabilities arising out of any other business we may conduct, except to the
extent that they exceed the liabilities of the Variable Account arising under
the policies supported by the Variable Account.
INVESTMENT ALLOCATIONS TO THE VARIABLE ACCOUNT
The assets of the Variable Account are divided by Portfolios. Where appropriate,
the Portfolios are divided by Funds within the Portfolio. This establishes a
series of Subaccounts within the Variable Account.
We may, from time to time, add other Investment Options. In such event you may
be permitted to select from these other Investment Options. Your selections may
be limited by the terms and conditions we may impose on such transactions.
We may also substitute other Investment Options. If required, approval of or
change of any investment policy will be filed with the Insurance Department of
the state in which this policy was delivered.
7
<PAGE>
VALUATION OF ASSETS
Assets of shares of Portfolios within each Subaccount will be valued at their
Net Asset Value on each Valuation Date.
TRANSFERS BETWEEN SUBACCOUNTS
After the end of the RIGHT TO EXAMINE THIS POLICY period, you may transfer all
or part of your interest in a Subaccount to another Subaccount or to the Fixed
Account. You may make 12 transfers each year without charge. We reserve the
right to charge a $10 fee for additional transfers, to be deducted from the
amount transferred.
We reserve the right at any time and without prior notice to any party to modify
the transfer privileges described above.
DOLLAR COST AVERAGING
Under the Dollar Cost Averaging program you may instruct us to automatically
transfer between Investment Options, on a periodic basis, a predetermined dollar
amount or percentage of accumulation value. The automatic transfers will be made
from any one Subaccount or the Fixed Account to any other Subaccount.
Automatic transfers can occur monthly, quarterly, semi-annually or annually. The
amount transferred each time must be at least $100 and at least $50 per
Subaccount. At the time the program begins there must be at least $5,000 of
accumulation value in the applicable Subaccount or the Fixed Account, or enough
to cover one year's transfers.
If transfers are made from the Fixed Account, the maximum periodic transfer
amount is 10% of that account's value at the time of election, or enough to
provided transfers for 10 months. There is no maximum transfer amount for the
Subaccounts.
You may request Dollar Cost Averaging at the time of application or at a later
date. Transfers will begin on the first or 15th day of the month, as you
request. If the first or 15th day of the month is not a Valuation Date, then the
transfer will be processed on the next following Valuation Date. The program
will end when:
(a) the number of transfers you have requested have been made; or
(b) when the value in the applicable Subaccount or the Fixed Account is less
than $500;
whichever occurs first.
You may increase or decrease the amount or percentage of the transfers or end
the program by sending us written notice. There is no charge for participation
in this program.
ASSET ALLOCATION PROGRAM
Under the Asset Allocation Program you may instruct us to allocate net premium
payments and the Accumulation Value among the Subaccounts and the Fixed Account
according to your instructions, or according to instructions recommended by us
and approved by you. We will allocate your net premium payments and transfer
accumulation value among the Investment Options to maintain conformity with
current instructions. This will "rebalance" your investments.
At the time the program begins, there must be at least $10,000 of Accumulation
Value in the policy. Rebalancing will be done on a quarterly, semi-annual or
annual basis, as you request. Transfers made in accordance with this program
will not be counted toward the 12 free transfers allowed each year.
8
<PAGE>
You may request participation in the Asset Allocation Program at the time of
application or at a later date. You may change your allocation percentages or
end the program by sending us written notice. There is no charge for
participation in this program.
THE FIXED ACCOUNT
GENERAL DESCRIPTION
Any part of the net premium allocated to the Fixed Account or transferred to the
Fixed Account under the policy becomes part of the general account assets of
United of Omaha Life Insurance Company. The Fixed Account includes our assets
that are not segregated in separate accounts. We maintain sole discretion to
invest the assets of the Fixed Account, subject to applicable law.
TRANSFERS FROM THE FIXED ACCOUNT
Once each year you may transfer part of the accumulation value in the Fixed
Account to the Subaccounts. The maximum percentage that may be transferred is
10% of the value in the Fixed Account on the date of the transfer. There is no
charge for this transfer.
We reserve the right to defer transfers from the Fixed Account to the
Subaccounts for up to six months from the date we receive your written request.
You may transfer amounts from the Subaccounts to the Fixed Account at any time.
However, we reserve the right to restrict transfers back to the Fixed Account
for up to six months immediately following a transfer to the Subaccounts.
POLICY VALUES
ACCUMULATION VALUE
On the date of issue the Accumulation Value equals the initial net premium less
the Monthly Deduction for the first month. On any Monthly Deduction Date after
the date of issue the Accumulation Value equals:
(a) the total of the values in each Subaccount; plus
(b) the accumulation value of the Fixed Account; plus
(c) the accumulation value of the Loan Account; less
(d) the Monthly Deduction for the current month.
The value for each Subaccount equals:
(a) the current number of Accumulation Units; multiplied by
(b) the current unit value.
ACCUMULATION UNIT
Each net premium is converted into Accumulation Units. This is done by dividing
the net premium by the Accumulation Unit value for the Valuation Period during
which the net premium is allocated to the Variable Account. The initial
Accumulation Unit value for each Subaccount was set when the Subaccount was
established. The unit value may increase or decrease from one Valuation Date to
the next.
The Accumulation Unit value for a Subaccount on any Valuation Date is calculated
as follows:
(a) the Net Asset Value Per Share of the Fund multiplied by the number of
shares held in the Subaccount, before the purchase or redemption of any
shares on that date; divided by
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<PAGE>
(b) the total number of Accumulation Units held in the Subaccount on the
Valuation Date, before the purchase or redemption of any shares on that
date.
THE FIXED ACCOUNT
The accumulation value of the Fixed Account on any Monthly Deduction Date before
deducting the Monthly Deduction equals:
(a) the value as of the last Monthly Deduction Date; plus
(b) any net premiums credited since the last Monthly Deduction Date;
plus
(c) any transfers from the Subaccounts to the Fixed Account since the last
Monthly Deduction Date; plus
(d) any transfers from the Loan Account to the Fixed Account since the last
Monthly Deduction Date; less
(e) any transfers from the Fixed Account to the Subaccounts since the last
Monthly Deduction Date; less
(f) any transfers from the Fixed Account to the Loan Account since the last
Monthly Deduction Date; less
(g) any partial withdrawals and surrender charge taken from the Fixed
Account since the last Monthly Deduction Date; less
(h) interest credited on the balance.
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 4%.
PARTIAL WITHDRAWALS
After the first year you may withdraw part of the Accumulation Value. The
minimum partial withdrawal is $250. The maximum partial withdrawal is an amount
such that the remaining cash surrender value is not less than $500 and the
Specified Amount is not less than $100,000 in policy years one through five or
not less than $50,000 thereafter.
If Death Benefit Option 1 is in effect, the following will apply for each
partial withdrawal:
(a) the current Specified Amount will be reduced by the amount of the
withdrawal; and
(b) the Accumulation Value will be reduced by:
(1) the amount of the withdrawal; and
(2) the surrender charge applicable to the decrease in current
Specified Amount, as described in the SURRENDER CHARGE provision.
We will send you an amendment showing the current Specified Amount after the
withdrawal.
If Death Benefit Option 2 is in effect, the Accumulation Value will be reduced
by the amount of the withdrawal.
The amount of cash withdrawal requested and any surrender charge will be
deducted from the Accumulation Value on the date we receive your written
request. Partial withdrawals will result in cancellation of Accumulation Units
from each applicable Subaccount. In the absence of instructions from you,
amounts will be deducted from the Subaccounts and the Fixed Account on a pro
rata basis. No more than a pro rata amount may be withdrawn from the Fixed
Account for any partial withdrawal. We reserve the right to defer withdrawals
from the Fixed Account for up to six months from the date we receive your
written request.
Partial withdrawals may change the minimum and lifetime monthly premium
requirements applicable to the NO-LAPSE PERIOD provision.
POLICY CHARGES
MONTHLY DEDUCTION
The Monthly Deduction equals:
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<PAGE>
(a) the cost of insurance for the current month; plus
(b) the cost of any riders for the current month; plus
(c) the risk charge shown on the data pages; plus
(d) the administrative charge shown on the data pages.
The Monthly Deduction will be deducted from the Subaccounts and the Fixed
Account on a pro rata basis on each Monthly Deduction Date.
COST OF INSURANCE
The guaranteed cost of insurance each month used in calculating the Monthly
Deduction equals:
(a) the net amount at risk for the month; multiplied by
(b) the guaranteed cost of insurance charge per $1,000 of Specified Amount;
divided by
(c) 1,000.
The guaranteed monthly cost of insurance charge for each $1,000 is shown on the
data pages. The charge is based on the Insured's attained age, sex, and risk and
rate classes.
The net amount at risk in any month equals:
(a) the death benefit; less
(b) the Accumulation Value on the Monthly Deduction Date after deducting the
rider charge, if any, the risk charge for the current month, and the
administrative charge.
We may use current cost of insurance charges less than those shown. Current cost
of insurance charges are based on the Insured's issue age, sex, risk and rate
classes, the current Specified Amount, and the length of time the policy has
been in force. We reserve the right to change current cost of insurance charges.
Changes in cost of insurance rates will be by class and will be based on changes
in future expectations of factors such as:
(a) investment earnings;
(b) mortality;
(c) persistency; and
(d) expenses.
EXPENSE CHARGES
The expense charges are shown in the POLICY CHARGES section of the data pages.
They include:
(a) a risk charge;
(b) an administrative charge;
(c) premium charges for tax expenses and premium processing expenses; and
(d) a transfer charge.
SURRENDER CHARGE
If you surrender your policy during the first 12 years, a surrender charge will
be deducted from the Accumulation Value. A surrender charge will also be
deducted if the current Specified Amount is decreased during the first 12 years.
Surrender charges vary by issue age, sex and risk class, and the length of time
your policy has been in force. Charges for each $1,000 of Specified Amount and
decrease in current Specified Amount are shown in the data pages.
11
<PAGE>
POLICY LOANS AND REPAYMENTS
POLICY LOANS
After the first year you may obtain a loan for all or part of the cash surrender
value less:
(a) the loan interest to the end of the year; and
(b) the Monthly Deduction for one month.
This policy must be assigned to us as sole security for the loan.
We will transfer all loan amounts from the Subaccounts and the Fixed Account to
the Loan Account. The amounts will be transferred on a pro rata basis.
Loan interest is payable at the rate of 5.7% in advance (6% effective annual
rate). Interest is due on each policy anniversary. If the interest is not paid
when due, we will transfer an amount equal to the unpaid loan interest from the
Subaccounts and the Fixed Account to the Loan Account on a pro rata basis.
We will credit 4% interest to any amounts in the Loan Account, except amounts
equal to a Preferred Loan as described below.
The death benefit will be reduced by the amount of any loan outstanding on the
date of the Insured's death.
We may defer making a loan for six months unless the loan is to pay premiums to
us.
PREFERRED LOANS
Beginning in the 10th policy year, Preferred Loans are available. A Preferred
Loan will be credited with 6% interest. Any loan outstanding at the beginning of
the 10th policy year will become a Preferred Loan from that point forward.
LOAN REPAYMENTS
All or part of the loan may be repaid at any time while this policy is in force.
The amount of a loan repayment will be deducted from the Loan Account. It will
be re-allocated among the Fixed Account and the Subaccounts in the same
percentages as the Accumulation Value is allocated on the date of repayment.
You should identify any payment intended to reduce a loan as a loan repayment;
otherwise, it will be added to the Accumulation Value.
COVERAGE BEYOND MATURITY
COVERAGE BEYOND MATURITY
Prior to thirty days before the maturity date of this policy, you may elect to
continue the policy in force beyond the maturity date. The election must be made
by written request.
The following will apply:
(a) The allocation of the Accumulation Value to the Subaccounts and the
Fixed Account will be maintained according to your instructions;
(b) The cost of insurance charge will be zero;
(c) The risk charge will be zero;
(d) The administrative charge will be zero;
(e) The corridor percentage will be fixed at 1% ;
(f) The death benefit option will be fixed at Option 1;
12
<PAGE>
(g) Any riders attached to the policy that are then in force will end;
(h) The Insured's date of death will be considered this policy's maturity
date.
All other rights and benefits as described in the policy will be available
during the lifetime of the Insured, except that we will not accept any
additional premium payments after coverage beyond maturity has been elected.
INSURANCE AND NONFORFEITURE OPTIONS
SURRENDER FOR CASH
While the Insured is alive, you may terminate this policy for its cash surrender
value. The policy must be returned to us to receive the cash surrender value.
The cash surrender value equals:
(a) the Accumulation Value at the end of the Valuation Period in which we
receive your written request; less
(b) any outstanding policy loan and unpaid loan interest; and less
(c) any applicable surrender charge.
With regard to amounts allocated to the Fixed Account, the cash surrender value
will be equal to or greater than the minimum cash surrender value required by
the state in which this policy was delivered. If the risk class shown on the
data pages is "Nontobacco," then the values are based on the Commissioners 1980
Standard Nonsmoker Mortality Table, age last birthday with interest at 4%. If
the risk class shown on the data pages is "Tobacco," then the values are based
on the Commissioners 1980 Standard Smoker Mortality Table, age last birthday,
with interest at 4%.
We may defer payment of a cash surrender from the Fixed Account for six months.
CONTINUATION OF INSURANCE
If no additional premiums are paid, this policy will continue as follows:
(a) if there are no outstanding policy loans, until the Accumulation Value
is not enough to pay the Monthly Deduction, subject to the NO-LAPSE
PERIOD provision, if applicable, and the GRACE PERIOD provision;
(b) if there are any outstanding policy loans, until the cash surrender
value is not enough to pay the Monthly Deduction and any unpaid loan
interest, subject to the NO-LAPSE PERIOD provision, if applicable, and
the GRACE PERIOD provision; or
(c) until the maturity date,
whichever occurs first.
We will pay you any remaining Accumulation Value less any outstanding policy
loan and unpaid loan interest at maturity if the Insured is then living and
coverage beyond maturity is not elected.
PAYOUT OPTIONS FOR PAYMENT OF POLICY PROCEEDS
GENERAL CONDITIONS
While the Insured is alive, you may choose to have the Proceeds paid under any
combination of the fixed and variable payout options shown in this policy. A
Beneficiary may also have the death benefit applied to a payout option. If
another option is not chosen within 60 days of the date we receive due proof of
death, we will make payment in a lump sum.
We reserve the right to pay the Proceeds in one sum:
(a) when the Proceeds are less than $2,000; or
(b) when the option of payment chosen would result in periodic payments of
less than $20.
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<PAGE>
Payees must be individuals who receive payments in their own behalf unless
otherwise agreed to by us. Any option chosen will be effective when we
acknowledge it.
We may require proof of your age or survival or the age or survival of the
Payee.
The guaranteed minimum interest rate used in the fixed payout options is 3%.
Using a procedure approved by our Board of Directors, we may pay or credit
additional interest annually.
When the last Payee dies, we will pay to the estate of that Payee:
(a) any amount on deposit; or
(b) the then present value of any remaining guaranteed payments under a
fixed option.
PAYOUT OPTIONS
1. PROCEEDS HELD ON DEPOSIT AT INTEREST
This option is available on a fixed basis. While the Proceeds are held by
us, we will annually:
(a)pay interest to any Payee; or
(b)add interest to the Proceeds.
2. INCOME OF A SPECIFIED AMOUNT
This option is available on either a fixed or variable basis. We will pay
the Proceeds in installments of a Specified Amount until the Proceeds with
interest have been fully paid.
3. INCOME FOR A SPECIFIED PERIOD
This option is available on a fixed basis. We will pay the Proceeds in
installments for the number of years you choose. The monthly incomes for
each $1,000 of Proceeds are shown in the following table. These amounts
include interest. We will provide the income amounts for payments other than
monthly upon request.
- - - ------------------------------------------------
Years Monthly Years Monthly Years Monthly
Chosen Income Chosen Income Chosen Income
- - - ------------------------------------------------
1 $84.47 8 $11.68 15 $6.87
2 42.86 9 10.53 16 6.53
3 28.99 10 9.61 17 6.23
4 22.06 11 8.86 18 5.96
5 17.91 12 8.24 19 5.73
6 15.14 13 7.71 20 5.51
7 13.16 14 7.26
- - - ------------------------------------------------
4. LIFETIME INCOME
This option is available on either a fixed or variable basis. We will pay
the Proceeds as a monthly income for as long as the Payee lives. The
following guarantees are available:
(a)GUARANTEED PERIOD - The monthly income will be paid for a certain
number of years and as long thereafter as the Payee lives; or
(b)GUARANTEED AMOUNT (INSTALLMENT REFUND) - The monthly income will be
paid until the sum of all payments equals the Proceeds placed under
this option and as long thereafter as the Payee lives.
The monthly income as a fixed payout will be the amount computed using one
of the following bases:
(a)the Lifetime Monthly Income Table for Fixed Payout Option 4 shown
in this policy; or
(b)if more favorable to the Payee, our then current lifetime monthly
income rates for payment of Proceeds.
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<PAGE>
The Lifetime Monthly Income Table for Fixed Payout Option 4 is based on the
1983a Mortality Table and interest at 3%.
5. LUMP SUM
The Proceeds will be paid in one sum.
6. OTHER OPTIONS
Upon request and if available, we will provide payments for other options,
including joint and survivor periods.
Additional information about any of the options may be obtained by contacting
us.
<TABLE>
LIFETIME MONTHLY INCOME TABLE FOR FIXED PAYOUT OPTION 4
MONTHLY INCOME FOR EACH $1,000 OF PROCEEDS
<CAPTION>
- - - ----------------------------------------------------------------------------------------------
Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed Age Last Guaranteed Guaranteed
Birthday Period Amount Birthday Period Amount Birthday Period Amount
---------------------- ---------------------- ------------------------
of Payee Male Female Male Female of Payee Male Female Male Female of Payee Male Female Male Female
- - - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
7 and
under $2.84 $2.77 $2.83$2.76
8 2.85 2.78 2.84 2.77 34 $3.40$3.23 $3.36$3.20 60 $5.14 $4.66 $4.86 $4.48
9 2.86 2.79 2.85 2.78 35 3.44 3.26 3.39 3.23 61 5.27 4.76 4.96 4.56
10 2.87 2.80 2.86 2.79 36 3.48 3.29 3.42 3.26 62 5.39 4.87 5.07 4.66
11 2.89 2.81 2.88 2.80 37 3.52 3.32 3.46 3.29 63 5.53 4.98 5.19 4.75
12 2.90 2.82 2.89 2.82 38 3.56 3.35 3.49 3.32 64 5.66 5.10 5.30 4.86
13 2.91 2.83 2.90 2.83 39 3.60 3.38 3.53 3.35 65 5.81 5.22 5.43 4.96
14 2.93 2.85 2.92 2.84 40 3.65 3.42 3.57 3.38 66 5.96 5.36 5.56 5.08
15 2.95 2.86 2.93 2.85 41 3.69 3.46 3.61 3.42 67 6.12 5.50 5.70 5.20
16 2.96 2.87 2.95 2.86 42 3.74 3.50 3.66 3.45 68 6.28 5.65 5.85 5.33
17 2.98 2.89 2.96 2.88 43 3.79 3.54 3.70 3.49 69 6.44 5.80 6.00 5.47
18 3.00 2.90 2.98 2.89 44 3.85 3.58 3.75 3.53 70 6.61 5.97 6.16 5.61
19 3.01 2.92 3.00 2.91 45 3.90 3.63 3.80 3.57 71 6.79 6.14 6.33 5.76
20 3.03 2.93 3.02 2.92 46 3.96 3.67 3.85 3.61 72 6.96 6.32 6.51 5.93
21 3.05 2.95 3.04 2.94 47 4.02 3.72 3.90 3.66 73 7.14 6.50 6.69 6.10
22 3.07 2.96 3.06 2.95 48 4.09 3.78 3.96 3.70 74 7.32 6.69 6.90 6.28
23 3.09 2.98 3.08 2.97 49 4.15 3.83 4.01 3.75 75 7.50 6.89 7.10 6.47
24 3.12 3.00 3.10 2.99 50 4.22 3.89 4.07 3.80 76 7.67 7.09 7.32 6.68
25 3.14 3.02 3.12 3.01 51 4.30 3.95 4.14 3.86 77 7.84 7.29 7.54 6.90
26 3.16 3.04 3.14 3.02 52 4.37 4.01 4.20 3.91 78 8.01 7.49 7.78 7.12
27 3.19 3.06 3.16 3.04 53 4.45 4.08 4.27 3.97 79 8.18 7.69 8.03 7.37
28 3.22 3.08 3.19 3.06 54 4.54 4.15 4.34 4.03 80 8.33 7.89 8.30 7.64
29 3.24 3.10 3.21 3.09 55 4.62 4.22 4.42 4.10 81 8.48 8.08 8.58 7.90
30 3.27 3.12 3.24 3.11 56 4.72 4.30 4.50 4.17 82 8.61 8.26 8.88 8.20
31 3.30 3.15 3.27 3.13 57 4.82 4.38 4.58 4.24 83 8.74 8.43 9.19 8.50
32 3.33 3.17 3.30 3.15 58 4.92 4.47 4.67 4.31 84 8.86 8.59 9.53 8.81
33 3.37 3.20 3.33 3.18 59 5.03 4.56 4.77 4.39 85 8.97 8.74 9.83 9.18
and over
- - - --------------------------=====--------------------------=====--------------------------------
</TABLE>
15
<PAGE>
VARIABLE PAYOUT OPTIONS
You may choose payout options 2, 4 or 6 to be paid as variable payments.
Variable payments vary according to the net investment return of the Subaccounts
chosen. If variable payments are being made under Option 2 or 6 and do not
involve life contingencies, then you may surrender the policy and receive the
commuted value of any unpaid payments.
FIRST VARIABLE PAYMENT
We will compute the dollar amount of the first monthly variable payment by
applying all or part of the Proceeds to the Variable Payout Options table shown
in this policy for the payout option you choose. The table shows the dollar
amount of monthly payment that you can buy with each $1,000 of Proceeds.
If you have chosen more than one Subaccount, we will apply the accumulation
value of each Subaccount separately to the Variable Payout Options table. The
total amount of the first variable payment equals the sum of the payment amounts
payable for each Subaccount.
SECOND AND LATER VARIABLE PAYMENTS
The dollar amount of the second and later variable payments is not set. It may
change from month to month. We will compute the payment on the 10th Valuation
Date before the payment is due.
The amount of each variable payment after the first equals:
(a) the sum of the number of variable payment units under each Subaccount;
multiplied by
(b) the current variable payment unit value for each Subaccount as of
the date we compute the payment.
A variable payment unit is a measuring unit used in computing the amount of the
variable payments. The value of a variable payment unit for each Subaccount will
vary with the net investment return of the Subaccount.
VARIABLE PAYMENT UNIT VALUE
The current value of a variable payment unit for each Subaccount is:
(a) the value as of the date we computed the last payment; multiplied by
(b) the Net Investment Factor for the Subaccount as of the date on which we
are computingthe current payment.
The Net Investment Factor is figured by dividing (a) by (b), then
subtracting (c) from the result, then multiplying by the offset factor described
below. The values of (a), (b) and (c) are defined as follows:
(a) is the net result of
(1)the Net Asset Value of a Fund share held in a Subaccount as of
the end of the current payment period; plus or minus
(2)a per share credit or charge for any taxes we incurred since the last
computation date that were charged to the operation of the
Subaccount.
(b) is the Net Asset Value of a Fund share held in the Subaccount as of the
beginning of the current payment period.
(c) is the asset charge factor that reflects the expense charges deducted
from the Variable Account. This factor is equal, on an annual basis, to
1.20% of the daily net asset value of the Variable Account.
The result of the calculation described above is then multiplied by a factor
that offsets the assumed investment rate upon which the Variable Payout Options
table is based. This allows the actual investment rate to be credited. For a
one-day Valuation Period the factor is 0.99989255, using an assumed investment
rate of 4% per year.
NUMBER OF VARIABLE PAYMENT UNITS
The number of variable payment units payable for each Subaccount equals:
(a) the amount of the first monthly variable payment payable for that
Subaccount; divided by
16
<PAGE>
(b) the variable payment unit value for that Subaccount as of the 10th
Valuation Date before the first variable payment is made.
The number of variable payment units payable for each Subaccount is fixed when
we compute the first variable payment. The number remains fixed unless you
exchange variable payment units between Subaccounts. The number of variable
payment units will not change as a result of investment experience.
We guarantee that the dollar amount of each variable payment after the first
will not be affected by actual expenses or changes in mortality experience.
EXCHANGE OF VARIABLE PAYMENT UNITS
After the first variable payment is made, you may exchange the value of a
specified number of variable payment units of one Subaccount for variable
payment units of another Subaccount or the Fixed Account. You may not exchange
variable payment units of the Fixed Account for variable payment units of the
Subaccounts.
The value of the variable payment units being exchanged will be the value for
the Valuation Period during which we receive your request for the exchange. The
value of the new variable payment units will be such that the dollar amount of a
payment made on the date of the exchange would not change as a result of the
exchange.
No more than four exchanges may be made each year.
<TABLE>
<CAPTION>
VARIABLE PAYOUT OPTIONS TABLE
MONTHLY PAYOUTS PER $1,000 BASED ON 4.00% INTEREST AND 1983A
MORTALITY TABLE ALB PROJECTED 20 YEARS WITH PROJECTION SCALE 'G'
- - - -----------------------------------------------------------------------------------------------
FEMALE RATES MALE RATES
- - - ---------------------------------------------- ------------------------------------------------
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
Age 20 Year 10 Life Installment 20 10 Year Life Installment Age
Certain Year Only Refund Year Certain Only Refund
& Life Certain Certain & Life
& Life & Life
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 0
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
1 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 1
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
2 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 2
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
3 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 3
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
4 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 4
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
5 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 5
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
6 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 6
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
7 3.44 3.44 3.44 3.44 3.49 3.49 3.50 3.49 7
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
8 3.44 3.45 3.45 3.44 3.50 3.50 3.51 3.50 8
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
9 3.45 3.45 3.45 3.45 3.51 3.51 3.51 3.50 9
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
10 3.46 3.46 3.46 3.46 3.52 3.52 3.53 3.51 10
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
11 3.47 3.47 3.47 3.47 3.53 3.53 3.53 3.52 11
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
12 3.48 3.48 3.48 3.47 3.54 3.54 3.54 3.53 12
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
13 3.48 3.49 3.49 3.48 3.55 3.55 3.56 3.54 13
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
14 3.49 3.50 3.50 3.49 3.56 3.57 3.57 3.56 14
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
15 3.50 3.51 3.51 3.50 3.57 3.58 3.58 3.57 15
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
16 3.51 3.51 3.52 3.51 3.58 3.59 3.59 3.58 16
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
17 3.52 3.53 3.53 3.52 3.60 3.60 3.60 3.59 17
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
18 3.53 3.54 3.54 3.53 3.61 3.62 3.62 3.60 18
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
19 3.54 3.55 3.55 3.54 3.62 3.63 3.63 3.62 19
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
20 3.55 3.56 3.56 3.55 3.64 3.64 3.65 3.63 20
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
21 3.57 357 3.57 3.56 3.65 3.66 3.66 3.65 21
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
22 3.58 3.58 3.58 3.58 3.67 3.67 3.68 3.66 22
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
23 3.59 3.60 3.60 3.59 3.68 3.69 3.70 3.68 23
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
24 3.61 3.61 3.61 3.60 3.70 3.71 3.71 3.70 24
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
25 3.62 3.62 3.63 3.62 3.72 3.73 3.73 3.71 25
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
26 3.63 3.64 3.64 3.63 3.74 3.75 3.75 3.73 26
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
27 3.65 3.65 3.66 3.65 3.76 3.77 3.77 3.75 27
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
28 3.67 3.67 3.67 3.66 3.78 3.79 3.79 3.77 28
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
29 3.68 3.69 3.69 3.68 3.80 3.81 3.81 3.79 29
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
30 3.70 3.71 3.71 3.70 3.82 3.83 3.84 3.81 30
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
31 3.72 3.73 3.73 3.72 3.84 3.86 3.86 3.84 31
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
32 3.74 3.75 3.75 3.74 3.87 3.88 3.89 3.86 32
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
33 3.76 3.77 3.77 3.76 3.89 3.91 3.91 3.89 33
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
34 3.78 3.79 3.79 3.78 3.92 3.94 3.94 3.92 34
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
35 3.80 3.81 3.81 3.80 3.95 3.97 3.97 3.94 35
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
36 3.82 3.84 3.84 3.82 3.97 4.00 4.00 3.97 36
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
37 3.85 3.86 3.86 3.85 4.00 4.03 4.04 4.00 37
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
38 3.87 3.89 3.89 3.87 4.04 4.07 4.07 4.03 38
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
39 3.90 3.92 3.92 3.90 4.07 4.10 4.11 4.06 39
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
40 3.93 3.95 3.95 3.93 4.10 4.14 4.15 4.10 40
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
41 3.96 3.98 3.98 3.96 4.14 4.18 4.19 4.14 41
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
42 3.99 4.01 4.01 3.99 4.18 4.22 4.24 4.18 42
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
43 4.02 4.04 4.05 4.02 4.22 4.27 4.28 4.21 43
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
44 4.05 4.08 4.09 4.05 4.25 4.32 4.33 4.25 44
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
45 4.09 4.12 4.13 4.09 4.30 4.36 4.38 4.30 45
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
46 4.13 4.16 4.17 4.13 4.34 4.41 4.43 4.35 46
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
47 4.16 4.20 4.21 4.16 4.38 4.47 4.49 4.39 47
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
48 4.20 4.24 4.25 4.20 4.43 4.52 4.55 4.44 48
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
49 4.24 4.29 4.30 4.24 4.48 4.58 4.61 4.49 49
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
50 4.29 4.34 4.35 4.29 4.53 4.64 4.68 4.55 50
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
51 4.33 4.39 4.40 4.34 4.58 4.70 4.74 4.61 51
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
52 4.38 4.44 4.46 4.39 4.63 4.77 4.81 4.67 52
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
53 4.43 4.50 4.52 4.44 4.69 4.84 4.89 4.73 53
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
54 4.48 4.56 4.58 4.49 4.74 4.91 4.97 4.80 54
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
55 4.53 4.62 4.65 4.56 4.80 4.99 5.06 4.87 55
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
56 4.59 4.69 4.72 4.62 4.86 5.08 5.14 4.94 56
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
57 4.65 4.76 4.79 4.68 4.92 5.16 5.24 5.02 57
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
58 4.71 4.83 4.87 4.74 4.98 5.25 5.34 5.10 58
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
59 4.77 4.91 4.96 4.82 5.04 5.35 5.45 5.19 59
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
60 4.83 5.00 5.05 4.89 5.01 5.45 5.57 5.28 60
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
61 4.89 5.08 5.14 4.97 5.17 5.56 5.69 5.37 61
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
62 4.96 5.18 5.24 5.06 5.23 5.67 5.82 5.47 62
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
63 5.03 5.28 5.35 5.14 5.29 5.79 5.97 5.58 63
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
64 5.09 5.38 5.47 5.24 5.35 5.92 6.11 5.69 64
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
65 5.16 5.49 5.59 5.34 5.41 6.05 6.28 5.81 65
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
66 5.23 5.61 5.72 5.45 5.47 6.19 6.45 5.93 66
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
67 5.30 5.74 5.86 5.56 5.52 6.32 6.63 6.06 67
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
68 5.37 5.86 6.02 5.68 5.58 6.47 6.84 6.20 68
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
69 5.43 6.00 6.18 5.80 5.63 6.62 7.05 6.35 69
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
70 5.50 6.15 6.36 5.93 5.67 6.78 7.28 6.50 70
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
71 5.56 6.30 6.55 6.07 5.72 6.94 7.51 6.64 71
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
72 5.61 6.46 6.76 6.22 5.76 7.10 7.77 6.82 72
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
73 5.67 6.63 6.99 6.37 5.80 7.27 8.04 6.99 73
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
74 5.72 6.80 7.23 6.55 5.83 7.43 8.33 7.17 74
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
75 5.76 6.99 7.49 6.72 5.86 7.60 8.64 7.37 75
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
76 5.80 7.17 7.77 6.91 5.89 7.77 8.97 7.57 76
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
77 5.83 7.36 8.07 7.11 5.91 7.94 9.32 7.78 77
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
78 5.86 7.55 8.40 7.33 5.93 8.11 9.70 8.01 78
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
79 5.89 7.74 8.75 7.55 5.94 8.28 10.10 8.25 79
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
80 5.91 7.93 9.14 7.78 5.96 8.44 10.54 8.50 80
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
81 5.93 8.12 9.55 8.03 5.97 8.60 10.99 8.76 81
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
82 5.95 8.31 9.99 8.30 5.98 8.75 11.49 9.03 82
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
83 5.96 8.49 10.47 8.57 5.98 8.89 12.01 9.33 83
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
84 5.97 8.66 10.99 8.86 5.99 9.03 12.57 9.62 84
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
85 5.98 8.82 11.56 9.18 6.00 9.16 13.14 9.94 85
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
86 5.99 8.97 12.17 9.49 6.00 9.28 13.77 10.28 86
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
87 5.99 9.11 12.80 9.82 6.00 9.38 14.44 10.62 87
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
88 6.00 9.24 13.51 10.17 6.00 9.48 15.18 11.00 88
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
89 6.00 9.35 14.25 10.53 6.00 9.58 16.96 11.38 89
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
90 6.00 9.46 15.04 10.90 6.00 9.66 15.80 11.81 90
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
91 6.00 9.56 15.81 11.29 6.00 9.74 17.62 12.22 91
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
92 6.00 9.63 16.60 11.69 6.00 9.79 18.52 12.65 92
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
93 6.00 9.71 17.43 12.10 6.00 9.85 19.47 13.15 93
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
94 6.00 9.78 18.32 12.53 6.00 9.90 20.48 13.66 94
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
95 6.00 9.84 19.20 12.99 6.00 9.94 21.59 14.21 95
- - - --------- --------- -------- -------- -------- -------- ---------- --------- ---------- -------
</TABLE>
Exhibit 5(b) Forms of Rider for the ULTRALIFE flexible premium variable life
insurance policy.
<PAGE>
ACCELERATED BENEFITS RIDER
BENEFITS PAID UNDER THE TERMS OF THIS RIDER WILL REDUCE THE DEATH BENEFIT AND
VALUES OF THE LIFE INSURANCE POLICY TO WHICH THIS RIDER IS ATTACHED AND RENDER
THOSE PROVISIONS OF THE POLICY FOR LOANS, WITHDRAWALS OR SURRENDER FOR CASH NULL
AND VOID. RECEIPT OF THIS BENEFIT MAY ALSO AFFECT YOUR INCOME TAX STATUS OR YOUR
ELIGIBILITY FOR STATE OR FEDERAL BENEFITS. YOU SHOULD CONSULT YOUR PERSONAL TAX
ADVISOR OR THE SOCIAL SECURITY ADMINISTRATION PRIOR TO REQUESTING THIS BENEFIT.
<PAGE>
BENEFIT - While this rider is in force the owner may make a one time election
for payment in advance of a portion or all of the death benefit of the policy to
which this rider is attached if the Insured is diagnosed as having a terminal
illness.
TERMINAL ILLNESS - Is a medical condition that, with a reasonable degree of
medical certainty, will result in the death of the Insured in six months or less
from the date a physician's statement is received by us.
PROOF OF TERMINAL ILLNESS - We will require proof, satisfactory to us, that the
Insured is terminally ill. Proof will include a completed claim form and written
statement from a licensed physician. We also reserve the right to obtain a
second medical opinion at our expense.
ACCELERATED BENEFIT AMOUNT - The accelerated benefits amount available to be
paid to the owner will be equal to 96% of the death benefit of the policy to
which this rider is attached plus 96% of the death benefit of any term riders on
the Insured's life attached to this policy. The accelerated benefit amount
payable is subject to a maximum of $500,000.
PAID-UP INSURANCE AMOUNT - Any part of the death benefit not requested by the
owner as an accelerated benefit will be used to provide fully paid
up insurance payable to the beneficiary at the time of the Insured's death. The
maturity date of the paid up insurance will be the same date as the maturity
date of the policy to which this rider is attached.
METHOD OF PAYMENT - The accelerated benefit will be paid as a lump sum, unless
the owner requests payment in an alternative form that is approved by us.
PAID-UP INSURANCE SURRENDER FOR CASH - At any time while the paid up insurance
is in force the owner may request that it be surrendered for its cash value. The
cash value will be the then present value of the remaining paid up insurance
based on the Commissioners 1980 Standard Ordinary Mortality Table and interest
at 5.75%.
EXCLUSIONS - Accelerated benefits will not be available if:
(a) the medical condition is the result of an intentionally self-inflicted
injury; or
(b) all or part of the proceeds have been awarded to a former spouse as a
part of a divorce decree.
We will require the signature of an irrevocable beneficiary or an assignee prior
to releasing any accelerated benefits.
<PAGE>
EFFECTIVE DATE - The date of issue of this rider is the date of issue of this
policy.
TERMINATION - If this accelerated benefit is elected, the policy and all riders
attached to the policy will terminate. Any rider attached to this policy,
providing coverage on a member of the Insured's family, that has a conversion
right may be converted.
Thisrider will terminate the earliest of the following: (a) when the accelerated
benefit is paid; or (b) termination of the policy; or (c) the maturity date
of the policy; or (d) the end of the grace period of an unpaid premium.
GENERAL - This rider is a part of the policy to which it is attached. It is
subject to all of the policy provisions that are not inconsistent with the rider
provisions.
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
ACCIDENTAL DEATH BENEFIT RIDER
BENEFIT -- When we receive proof that the Insured died while this rider was in
force and that death resulted directly and independently of all other causes
from accidental bodily injury, we will pay to the beneficiary the amount shown
for this benefit on page 3. This amount will be in addition to all other
benefits provided by this policy.
EXCLUSIONS -- This benefit will not be paid if death resulted from any of the
following: (a) injuries intentionally self-inflicted while sane or insane;
(b) injuries resulting from the commission of a felonious act by the
Insured; (c) injuries resulting from operating, riding in or descending
from any kind of aircraft if the Insured:
(1) is a pilot, officer or member of the crew;
(2) is being flown for the purpose of descent from the aircraft while
in flight; (3) is giving or receiving any kind of training or
instruction; or (4) has any duties aboard the aircraft;
(d) injuries resulting from an act of declared or undeclared war; (e)
bodily or mental infirmity; or (f) the voluntary taking of any drug,
narcotic or hallucinogen other than
one prescribed by a physician as medication for the Insured; or
(g) injuries sustained as a result of the Insured's intoxication.
INCONTESTABILITY -- We will not contest the validity of this rider after it has
been in force during the lifetime of the Insured for two years from its date of
issue. The date of issue of this rider is the date of issue of this policy or
the effective date shown for this rider on page 3 if added later.
TERMINATION -- This rider will terminate:
(a) on the policy anniversary following the Insured's 65th birthday; or
(b) at the expiration of the grace period.
This rider may also be terminated by written request of the owner and return of
this policy to us. The monthly deduction amount for this policy will be reduced
by the cost of the rider shown on the back of this page.
GENERAL -- If you have chosen a method for payment of the policy proceeds, that
method will apply to any amount payable under this rider unless you have
specified otherwise.
This rider is a part of the policy to which it is attached. It is subject to all
of the policy provisions which are not inconsistent with the rider provisions.
United of Omaha Life Insurance Company
/s/ M. Jane Huerter
Secretary
(over)
<PAGE>
- - - --------------------------------------------------------------------------------
TABLE OF MONTHLY CHARGES
FOR EACH $1,000 OF ACCIDENTAL DEATH BENEFIT
-------------------------------------------------------------------------------
ATTAINED MALE/ ATTAINED MALE/
AGE FEMALE AGE FEMALE
- - - ---------------------- -------------------- --------------------- --------------
1 .08 36 .08
2 .08 37 .08
3 .08 38 .08
4 .08 39 .09
5 .08 40 .09
6 .08 41 .09
7 .08 42 .09
8 .08 43 .09
9 .08 44 .09
10 .08 45 .10
11 .08 46 .10
12 .08 47 .10
13 .08 48 .10
14 .08 49 .11
15 .08 50 .11
16 .08 51 .11
17 .08 52 .11
18 .08 53 .12
19 .08 54 .12
20 .08 55 .12
21 .08 56 .13
22 .08 57 .14
23 .08 58 .15
24 .08 59 .16
25 .08 60 .17
26 .08 61 .18
27 .08 62 .18
28 .08 63 .18
29 .08 64 .18
30 .08
31 .08
32 .08
33 .08
34 .08
35 .08
- - - ---------------- ---------------- ---------------- ------------------------
<PAGE>
TERM LIFE INSURANCE RIDER
ON ADDITIONAL INSURED
RENEWABLE AND CONVERTIBLE
This rider is part of the policy to which it is attached. It is subject to all
of the policy provisions which are not inconsistent with the rider provisions.
The rider is convertible prior to age 75 and renewable to age 100.
DEFINITIONS --
ADDITIONAL INSURED - the person you name as Additional Insured in the
application for this rider.
INSURED - the person insured under the policy and named as Insured on the
policy data page.
BENEFICIARY - the person, persons, or entity you name to receive the
rider benefit.
RIDER BENEFIT -- When we receive proof that the Additional Insured died while
this rider was in force, we will pay to the beneficiary the benefit amount for
this rider then in effect. The rider benefit amount at issue is shown on the
policy data page.
CONSIDERATION -- This rider is attached to this policy based on the application
and payment of this rider's cost of insurance. The rider's cost of insurance
will be included in the monthly deduction amount as described in the policy.
RIDER COST OF INSURANCE -- The rider cost of insurance equals the rider benefit
amount, multiplied by the cost of insurance charge for each $1,000 of benefit
amount, divided by 1,000. The guaranteed monthly cost of insurance charge for
each $1,000 is shown on the policy data page. This charge is based on the
Additional Insured's attained age, sex, and rating class. We may use cost of
insurance charges less than those shown on the policy data page.
DECREASE IN RIDER BENEFIT AMOUNT -- After the first policy year you may decrease
the rider's benefit amount once each policy year, provided that the change does
not reduce the benefit below the minimum benefit amount then allowed by us.
Any decrease in benefit amount will become effective on the monthly deduction
date next following approval of the change by us. An amendment showing the
benefit amount in effect after the change will be sent to you.
CONVERSION PRIVILEGE -- This rider may be converted to a new whole life policy
on the life of the Additional Insured if the Additional Insured has not then
attained age 75. The rider may be converted:
(a) at any time while this policy and this rider are in force; or (b) if
the Additional Insured is a person other than the Insured, within 60
days after the Insured dies. If the Additional Insured dies during this
60-day period and before a new policy is issued, we will pay the rider
benefit less any unpaid monthly cost of insurance charges for the
rider.
No evidence of insurability will be needed for the conversion. The new policy
may be any form of whole life insurance being issued by us at that time. The
face amount of the new policy may not be greater than the benefit amount then in
effect for this rider.
<PAGE>
Conversion is subject to:
(a) this policy and this rider being in force; (b) return of this policy
and this rider to us; (c) receipt by us of an application for conversion;
and (d) payment of the initial premium for the new policy.
The new policy will be based on the Additional Insured's attained age on the
conversion date. The conversion date will be the date of issue of the new
policy. The policy form and premium amount will be those being used by us for
the same risk class as this rider.
Rider benefits may be included in the new policy only at our option. Premiums
for the new policy will not be waived because of any existing disability.
MISSTATEMENT OF AGE OR SEX -- If the age or sex of the Additional Insured has
been misstated, the rider benefit will be the amount which would be purchased by
the most recent cost of insurance charges at the correct age and sex.
INCONTESTABILITY -- We will not contest the validity of this rider after it has
been in force during the lifetime of the Additional Insured for two year from
its date of issue. The date of issue of this rider is the date of issue of this
policy.
SUICIDE -- The rider benefit will not be paid if the Additional Insured's death
results from suicide, while sane or insane, within two years from the date of
issue. Instead we will pay the sum of the cost of insurance deductions for this
rider.
NONPARTICIPATING -- This rider does not pay dividends.
TERMINATION -- This rider will terminate on the earliest of the following: (a)
the expiration date of this rider shown on the policy data page; (b) the
date this rider is converted to a new policy; (c) the monthly deduction
date next following the date we receive your
written request to terminate the rider; (d) the date this policy
terminates or is surrendered; or (e) the date the Insured dies, subject to
the CONVERSION PRIVILEGE
provision.
United of Omaha Life Insurance Company
/s/ M. Jane Huerter
Secretary
<PAGE>
DISABILITY RIDER
<PAGE>
BENEFIT -- When we receive proof that disability of the Insured began while this
rider was in force and has continued for six months or more, we will:
(a) increase your cash value by any monthly deduction amounts that had been
paid for the period of disability after the policy month in which
disability began. Interest for these amounts will be added to your cash
value.
(b) waive future payments of the monthly deduction amount for this policy
during the time the Insured is disabled until the maturity date of this
policy.
Monthly deduction amounts paid for a period more than 12 months before the date
notice of disability is received by us will not be waived.
If disability begins during a grace period while this rider is in force and ends
in the death of the Insured before the disability has continued for six months,
we, upon receipt of proof of such disability and death, will continue this
policy in force until the time of death. Any unpaid monthly deduction amounts
will be deducted from the death benefit.
DEFINITION OF DISABILITY -- Disability means incapacity which:
(a) results from either bodily injury sustained or disease first manifested
while this rider is in force;
(b) begins after the date of issue of this rider and before the policy
anniversary date following the Insured's 60th birthday; and
(c) prevents the Insured from doing for pay or profit any activity for which
the Insured is qualified by training, education or experience.
NOTICE OF DISABILITY -- Written notice of disability must be given to us: (a)
during the lifetime of the Insured; (b) during the continuance of
disability; (c) before the policy anniversary date after the Insured's 61st
birthday;and (d) not later than 12 months after the termination of this
rider.
If it is shown that it was not reasonably possible to give timely notice, and it
was given as soon as possible, the notice will be considered as if given in
time.
PROOF OF CONTINUANCE OF DISABILITY -- We may require proof of the continuance of
disability. This proof may include that the Insured be examined at reasonable
intervals at our expense. After disability has continued for two years, proof
will be required only once a year. If the Insured fails to furnish proof, no
further monthly deduction amounts will be waived.
EXCLUSIONS -- This rider is not effective if disability results from: (a) an act
of declared or undeclared war; or (b) intentional self-inflicted injuries.
INCONTESTABILITY -- We will not contest the validity of this rider after it has
been in force during the lifetime of the Insured for two years from its date of
issue. The date of issue of this rider is the date of issue of this policy or
the effective date shown for this rider on the data page if added later.
TERMINATION -- This rider will terminate:
(a) on the policy anniversary following the Insured's 60th birthday; or (b)
at the expiration of the grace period.
<PAGE>
This rider may also be terminated by written request of the owner and return of
this policy to us. The monthly deduction amount for this policy will be reduced
by the cost of the rider shown below.
GENERAL -- This rider is a part of the policy to which it is attached. It is
subject to all of the policy provisions which are not inconsistent with the
rider provisions.
DISABILITY RIDER
-------------------------------------------------------------------------------
TABLE OF MONTHLY CHARGES FOR EACH $1.00
OF MONTHLY DEDUCTION AMOUNT
-------------------------------------------------------------------------------
MALE FEMALE
ATTAINED CHARGE FOR ATTAINED CHARGE FOR
AGE EACH $1.00 AGE EACH $1.00
--- ---------- --- ----------
------------------ ------------------ ----------------------- -----------------
16-40 .07 16-30 .07
41 .08 31-40 .09
42 .08 41 .10
43 .08 42 .11
44 .09 43 .11
45 .09 44 .11
46 .09 45 .12
47 .09 46 .13
48 .10 47 .13
49 .10 48 .14
50 .11 49 .15
51 .13 50 .16
52 .14 51 .19
53 .16 52 .21
54 .19 53 .24
55 .22 54 .27
56 .25 55 .31
57 .27 56 .36
58 .29 57 .39
59 .32 58 .43
59 .46
------------------ ------------------ ----------------------- -----------------
United of Omaha Life Insurance Company
/s/ M. Jane Huerter
Secretary
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
WAIVER OF SURRENDER CHARGES RIDER
This rider is made a part of the policy to which it is attached. It is subject
to all of the policy provisions that are not inconsistent with the rider
provisions. The rider is effective as of the policy's date of issue.
THE FOLLOWING PROVISIONS ARE HEREBY ADDED TO THE POLICY:
WAIVER OF SURRENDER CHARGES FOR PARTIAL WITHDRAWALS
We will waive applicable surrender charges if:
(a) you request a partial withdrawal under the following conditions; and (b)
you qualify as described below.
DEATH OF SPOUSE OR MINOR DEPENDENT - We will waive applicable surrender charges
for one partial withdrawal made within six months of your spouse's or minor
dependent's death. You must submit a certified copy of the death certificate or
other proof of death satisfactory to us. You may exercise this waiver only once
for a spouse and once for each minor dependent.
DISABILITY - We will waive applicable surrender charges if you send us a copy of
the form or letter showing approval of your claim for Social Security Disability
Benefits. We may also ask for proof of continued disability through the date of
the partial withdrawal. We reserve the right to have you examined by a doctor of
our choice, at our expense.
You do not qualify for this waiver if you are receiving Social Security
Disability Benefits on this policy's date of issue. You no longer qualify for
this waiver on or after your 65th birthday.
HOSPITAL OR NURSING HOME CONFINEMENT - We will waive applicable surrender
charges if you are confined at the recommendation of a physician for medically
necessary reasons for at least 30 consecutive days to:
(a) a hospital licensed or recognized as a general hospital by the proper
authority of the state in which it is located; or
(b) a hospital recognized as a general hospital by the Joint Commission on
the Accreditation of Hospitals; or
(c) a place certified as a hospital by Medicare; or
(d) a nursing home licensed by the state having a registered nurse on duty
24 hours a day; or
(e) a place certified by Medicare as a long term care facility.
You must provide proof of confinement and request the partial withdrawal no
later than 91 days after the last day of confinement.
You are not eligible for this waiver if you are confined to a hospital or
nursing home on this policy's date of issue.
ORGAN TRANSPLANT - We will waive applicable surrender charges if you undergo
transplant surgery as an organ donor or recipient for the following body organs:
(a) heart;
(b) liver;
(c) lung;
(d) kidney;
(e) pancreas; or
(f) bone marrow (recipient only).
Within 91 days of your surgery you must submit a letter from a licensed
physician other than an owner or insured under this policy. The letter must
state that you have undergone transplant surgery for any of the organs listed
above. We reserve the right to have you examined by a physician of our choice at
our expense. You may exercise this waiver only once per transplant surgery.
RESIDENCE DAMAGE - We will waive applicable surrender charges if your primary
residence suffers physical damage in the amount of $50,000 or more. You must
submit a certified copy of a licensed appraiser's report, stating the amount of
the damage. The certified copy must be submitted within 91 days of the date of
the appraiser's report. We reserve the right to obtain a second opinion by
having your residence inspected by a licensed appraiser of our choice at our
expense. We may rely upon our appraiser's opinion. This waiver may be exercised
only once.
TERMINAL ILLNESS - We will waive applicable surrender charges if you are
diagnosed as having a terminal illness. A terminal illness is a medical
condition that, with a reasonable degree of certainty, will result in your death
within 12 months or less. You must send us a written statement from a licensed
physician other than an owner or insured under this policy. We reserve the right
to have you examined by a physician of our choice, at our expense.
<PAGE>
You do not qualify for this waiver if you are diagnosed as having a terminal
illness prior to or on this policy's date of issue.
UNEMPLOYMENT - We will waive applicable surrender charges if you send us a
determination letter from the Department of Labor of the state where you live.
The letter must state that you have received unemployment benefits for at least
60 consecutive days. You may exercise this waiver only once.
You do not qualify for this waiver if you are receiving unemployment benefits on
this policy's date of issue.
United of Omaha Life Insurance Company
/s/ John W. Weekly
President and Chief Executive Officer
<PAGE>
THIS IS A FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY. THE
POLICY'S ACCUMULATION VALUE IN THE VARIABLE ACCOUNT IS BASED ON THE INVESTMENT
EXPERIENCE IN THAT ACCOUNT AND WILL INCREASE OR DECREASE DAILY. THE DOLLAR
AMOUNT IS NOT GUARANTEED. THE AMOUNT OF THE DEATH BENEFIT MAY BE FIXED OR
VARIABLE, DEPENDING ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT. NO
DIVIDENDS ARE PAYABLE.
Exhibit 2: Opinion and Consent of Counsel
<PAGE>
UNITED OF OMAHA LIFE INSURANCE COMPANY
Mutual of Omaha Plaza
Omaha, Nebraska 68175
September 12, 1997
United of Omaha Life Insurance Company
Mutual of Omaha Plaza
Omaha, NE 68175-1008
Re: Registration Statement
To Whom It May Concern:
With reference to the Registration Statement on Form S-6, filed by United of
Omaha Life Insurance Company and United of Omaha Separate Account B with the
Securities and Exchange Commission covering flexible premium variable life
insurance contracts, I have examined such documents and such laws I considered
necessary and appropriate and on the basis of such examination, it is my opinion
that:
1. United of Omaha Life Insurance Company is duly organized and validly
existing under the laws of the State of Nebraska and has been duly
authorized to issue flexible premium variable life insurance contracts
by the Insurance Department of the State of Nebraska.
2. United of Omaha Separate Account B is a duly authorized and existing
separate account to establish pursuant to the provision of Nebraska
Revised Statutes ss.ss.44-2221 and 44-402.01(1991).
3. The flexible premium variable life insurance contracts, when issued as
contemplated by said Form S-6 Registration Statement, will constitute
legal, validly issued and binding obligations of United of Omaha Life
Insurance Company.
I hereby consent to the filing of this opinion as an Exhibit to said Form S-6
Registration Statement and to the use of my name under the caption "Legal
Matters" in the Registration Statement.
Sincerely,
/s/ Kenneth W. Reitz
Kenneth W. Reitz
First Vice President & Counsel
United of Omaha Life Insurance Company
Exhibit 6: Opinion and Consent of Actuary
<PAGE>
September 12, 1997
TO: UNITED OF OMAHA LIFE INSURANCE COMPANY
FROM: Robert Hupf, FSA, MAAA
Vice President and Actuary
RE: ACTUARIAL OPINION
This opinion is furnished in connection with the registration by United of Omaha
Life Insurance Company of a Flexible Premium Variable Universal Life Insurance
policy ("Policy") under the Securities Act of 1933. The prospectus included in
the Registration Statement on Form S-6 describes the Policy. I have reviewed the
Policy form and I have participated in the preparation and review of the
Registration Statement Exhibits thereto.
In my opinion, the illustration of death benefit, surrender value, and premium
shown in the Illustration section of the Policy prospectus included in the
Registration Statement, based on the assumptions stated in the illustrations,
are consistent with the provisions of the Policy. Such assumptions, including
the current cost of insurance rates and other charges, are reasonable. The ages
selected in the illustrations are representative of the manner in which the
Policy operates. The Policy has not been designed so as to make the relationship
between premiums and benefits, as shown in the illustrations, appear to be more
favorable to prospective purchasers of Policies at the ages and in the rate
classes illustrated than to prospective purchasers of Policies, for males or
females, at other ages.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of my name under the heading Experts in the prospectus
as to actuarial matters.
/s/ Robert Hupf, FSA, MAAA
ROBERT HUPF, FSA, MAAA
Vice President and Actuary
United of Omaha Life Insurance Company
