As filed with the Securities and Exchange Commission on January 27, 1999
1933 Act Registration No. 333-18881
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
FORM S-6
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
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
(Address of Depositor's Principal Executive Offices)
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
Internet: [email protected]
Modified Single Premium Variable Life Insurance
Policy (Title, amount, and proposed maximum offering price of
securities being registered)
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[x] on the 80th day after filing pursuant to paragraph (a)(i)
If appropriate, check the following box:
[ ] This Post-Effective Amendment designates a new effective date for
a previously filed Post-Effective Amendment.
<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 Policy Distributions
5 About Us
6 Variable Investment Options
9 Inapplicable
10(a) Policy Application and Issuance
10(b) Policy Distributions
10(c), (d), (e) Policy Distributions; Lapse and Grace Period; Reinstatement
10(f), (g), (h) Voting Rights; Tax Matters
10(i) Important Policy Provisions
11 Variable Investment Options
12 Variable Investment Options; Policy Distributions
13 Expenses; Tax Matters; Policy Distributions; Appendix A
14 Policy Application and Issuance
15 Policy Application and Issuance
16 Variable Investment Options
17 Captions referenced under Items 10(c), (d), (e) and (i) above
18 Variable Investment Options
19 Reports to You; Voting Rights; Policy Distributions
20 Captions referenced under Items 6 and 10(g) above
21 Policy Loans
22 Inapplicable
23 Policy Distributions
24 Important Policy Provisions
25 About Us
26 Policy Distributions
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 Policy Distributions
39 Policy Distributions
40 Inapplicable
41(a) Policy Distributions
42 Inapplicable
43 Inapplicable
44(a) Variable Investment Options; Policy Application and Issuance
44(b) Expenses; Policy Distributions
44(c) Expenses
45 Inapplicable
ii
<PAGE>
46 The Variable Account; Captions referenced under Items 10(c),
(d), and (e) above
47 Inapplicable
48 About Us
49 Inapplicable
50 Variable Investment Options
51 Cover Page, Summary, Important Policy Provisions, Tax Matters,
Policy Distributions
52 Tax Matters
53 Tax Matters
54 Inapplicable
55 Inapplicable
59 Financial Statements
iii
<PAGE>
United of Omaha
A Mutual on Omaha Company
[GRAPHIC OMITTED] PROSPECTUS: Dated _______, 1999
ULTRA VARIABLE LIFE
Individual Modified Single Premium
Variable Universal Life Insurance Policy
The ULTRA VARIABLE LIFE (the "Policy") is offered by UNITED OF OMAHA LIFE
INSURANCE COMPANY ("WE, US, OUR, UNITED OF OMAHA") to applicants age 90 and
under. The Policy pays a Death Benefit upon the Insured's death and a Cash
Surrender Value upon surrender of the Policy.
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"). You bear the investment risk for
all amounts so allocated; there is no guaranteed minimum Accumulation Value. The
Policy continues in effect while the Accumulation Value is enough to pay the
Monthly Deduction Amount or until the end of the Death Benefit guarantee period
(assuming no Policy loans are taken), whichever is later.
<TABLE>
<CAPTION>
Minimum initial premium is $20,000 Additional premium may be paid once each
Policy Year, subject to restrictions.
<S> <C>
Investment options offered through the Policy
The investment portfolios offered include 25 variable options (where you have the
through the Policy, while they may have investment risk) from:
the same or similar names of retail Alger American Fund
mutual funds, are not the same as those Federated's Insurance Management Series
funds. By law, the Policy may not offer Fidelity's VIP Fund and VIP Fund II
those retail mutual funds, so it offers MFS Variable Insurance Trust
funds whose names and characteristics Morgan Stanley Dean Witter Universal Funds
may be similar to them but whose Pioneer Variable Contracts Trust
performance is not necessarily related Scudder Variable Life Investment Fund
to the retail funds. The portfolios are T.Rowe Price Equity Series, Fixed Income Series
described in separate prospectuses that and International Series
accompany this Prospectus. and 2 fixed options (where we have the investment
risk) from:
United of Omaha
</TABLE>
The variable investment options are not direct investments in mutual fund
shares, but are purchases of Subaccount shares of the Variable Account, which in
turn invests your premium in the investment options pursuant to your directions.
While the Policy is in force, you may transfer Policy value among the investment
options. Restrictions may apply, especially on transfers out of fixed options.
You must be given copies of the prospectus for each variable investment option
when or before you receive this Prospectus.
Partial withdrawals and loans of the Policy's value may be taken from time
to time, subject to certain restrictions. In almost all cases, the Policy will
be a modified endowment contract for federal income tax purposes. ANY POLICY
LOAN, PARTIAL WITHDRAWAL OR SURRENDER MAY RESULT IN ADVERSE TAX CONSEQUENCES OR
PENALTIES.
IT MAY NOT BE TO YOUR ADVANTAGE TO REPLACE EXISTING LIFE INSURANCE WITH THE
POLICY.
<TABLE>
<CAPTION>
<S> <C>
PLEASE READ THIS PROSPECTUS CAREFULLY.
IT PROVIDES INFORMATION YOU SHOULD The Policy is a security. Although we register this
CONSIDER BEFORE PURCHASING A POLICY. Prospectus with the SEC, the SEC does not pass upon
KEEP THIS PROSPECTUS FOR FUTURE its accuracy or adequacy, nor does the SEC approve or
REFERENCE. IT, GENERALLY DESCRIBES disapprove the Policy. You may access our registration
ONLY THE POLICY AND VARIABLE INVESTMENT on the SEC's Web site (http://www.sec.gov), or they
OPTIONS, EXCEPT WHEN THE FIXED OPTIONS can send you a copy for a fee. This Prospectus may only
ARE SPECIFICALLY MENTIONED. be used to offer the Policy where the Policy may lawfully
be sold. No one is authorized to give information or make representations about the Policy that isn't in
the Prospectus; if anyone does so, you should not rely upon it as being accurate or adequate.
</TABLE>
AN INTEREST IN THE POLICY IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THE POLICY IS NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THE POLICY INVOLVES RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
<PAGE>
- -------------------------------
CONTENTS
Page(s)
--------
DEFINITIONS 3
---------------------------------------------------------- --------
SUMMARY 3-5
Comparison to Other Policies and Investments
How the Policy Operates
Summary of Expense Charges
---------------------------------------------------------- --------
ABOUT US 6
---------------------------------------------------------- --------
INVESTMENT OPTIONS 6-13
Variable Investment Options
Fixed Investment Options
Systematic Transfer Account
Fixed Account
Transfers
Dollar Cost Averaging
STEP Program
Asset Allocation Program
Rebalancing
---------------------------------------------------------- --------
IMPORTANT POLICY PROVISIONS 13-16
Policy Application and
Issuance Telephone Transactions
Lapse and Grace Period Reinstatement
Guaranteed Paid-Up Life Maturity Date
Insurance (optional) Coverage Beyond
Misstatement of Age or Maturity
Sex Delay of Payments
Suicide Minor Owner or
Incontestability Beneficiary
------------------------------ --------------------------- --------
EXPENSES 16-20
Monthly Deduction Transfer Charge
Cost of Insurance Guaranteed Paid-Up
Charge Insurance Charge
Expense Charge (optional)
Surrender Charge Series Fund Charges
(with Waivers)
------------------------------ --------------------------- --------
POLICY DISTRIBUTIONS 20-23
Policy Loans
Surrender Death Benefit
Partial Withdrawals Payment of Proceeds
------------------------------ --------------------------- --------
TAX MATTERS 23-25
------------------------------ --------------------------- --------
MISCELLANEOUS 25-27
Our Management
Distribution of the Legal Proceedings
Policies Independent Auditors
Voting Rights Reports to You
Year 2000 Issues Do You Have Questions?
State Regulation
------------------------------ --------------------------- --------
ILLUSTRATIONS 27
---------------------------------------------------------- --------
FINANCIAL STATEMENTS 39
2
<PAGE>
- -----------------------------------------------------------
DEFINITIONS
Accumulation Units are an accounting unit of measure used to calculate the
Accumulation Value of the Variable Account.
Accumulation Value is the dollar value as of any Valuation Date of all amounts
accumulated under the Policy.
Allocation Date is the first business day following the completion of the Right
to Examine This Policy period or our approval of an additional premium payment.
Beneficiary is the person(s) or other legal entity who receives Policy benefits,
if any, upon the Insured's death.
Cash Surrender Value is the Accumulation Value at the end of the applicable
Valuation Date, less any Policy loans, unpaid loan interest, and any applicable
Surrender Charge.
Due Proof of Death is a certified copy of a death certificate, a certified copy
of a decree of a court of competent jurisdiction as to the finding of death, a
written statement by the attending physician, or any other proof satisfactory to
us.
Fixed Account is an account consisting of general account assets of ours.
Owner is the person(s) who may exercise all rights and privileges under the
Policy.
Payee is the person who receives payments under the Policy.
Policy Year/Month/Anniversary means respective anniversary dates from the Date
of Issue.
Proceeds means the Death Benefit, Cash Surrender Value, or Proceeds payable upon
the Maturity Date.
SEC is the Securities Exchange Commission, the federal governmental agency
regulating securities.
Series Funds are diversified, open-end investment management companies in which
the Variable Account invests.
Subaccount is a segregated account within the Variable Account investing in a
specified portfolio of one of the Series Funds.
Telephone Transaction are transactions you may make by telephone based upon
prior Written Notice authorization.
Us, We, Our is United of Omaha Life Insurance Company. All communication to us
regarding your Policy should be sent to United of Omaha, Variable Product
Service, P.O. Box 8430, Omaha, Nebraska 68108-0430. Telephone: 1-800-238-9354.
Valuation Date is each day that the New York Stock Exchange is open for trading.
Variable Account -- 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.
Written Notice or Request -- Written notice, signed by you, that gives us the
information we require and is received at United of Omaha Variable Product
Service, P.O. Box 8430, Omaha, Nebraska 68108-0430.
- -----------------------------------------------------------
SUMMARY
o COMPARISON TO OTHER POLICIES AND INVESTMENTS
The Policy offered by this prospectus is designed to provide life insurance
coverage for the Insured. It is not offered primarily as an investment.
Compared to other life insurance policies 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 loan privileges and surrender values.
The Policy is different from fixed-benefit life insurance in that the death
benefit may, and the cash value ("Accumulation Value") will always, vary to
reflect the investment experience of the selected variable investment options.
Also, IN ALMOST ALL SITUATIONS THE POLICY IS EXPECTED TO BE TREATED FOR FEDERAL
INCOME TAX PURPOSES AS A MODIFIED ENDOWMENT CONTRACT. THIS MEANS PRE-DEATH
DISTRIBUTIONS (INCLUDING PARTIAL WITHDRAWALS AND LOANS) FROM THE POLICY WOULD BE
INCLUDED IN INCOME ON AN INCOME-FIRST BASIS, AND A 10% PENALTY TAX MAY BE
IMPOSED ON INCOME DISTRIBUTED BEFORE YOU ATTAIN AGE 59 1/2.
3
<PAGE>
Compared to mutual funds. The Policy is designed to provide insurance
protection. Although the underlying investment 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 Accumulation Value is not enough to pay a Monthly Deduction
Amount, the Policy will lapse with no value unless premium is paid, subject
to the Guaranteed Death Benefit.
o We, not you, own the investment portfolio's underlying series fund shares.
You own interests in our Subaccounts that invest in series fund portfolios
as directed by you.
o Premium paid is held in the Money Market subaccount until the Allocation
Date. Only then is premium invested in other variable investment options you
elected.
o Insurance-related charges not associated with mutual fund investments are
deducted from values of the Policy.
o Federal income tax liability on any earnings is deferred until you receive a
distribution from the Policy.
o Transfers from one underlying series fund portfolio to another are
accomplished without tax liability under current law.
o Dividends and capital gains distributed by the investment portfolio's
underlying series funds are automatically reinvested.
o Premature withdrawals may be 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 such earnings are exempt from taxation
if received as a death benefit or taxation is deferred until such earnings
are distributed.
o Most states grant you a time period to review your policy and cancel it for
a return of premium paid. The terms of this "right to examine" period varies
by state, and is stated on the cover of your Policy.
o HOW THE POLICY OPERATES
The following chart shows how the Policy operates and includes a summary of
expenses. For more information, refer to specific sections of this Prospectus.
POLICY FLOW CHART
---------------------------------------------
PREMIUM
o Minimum initial premium required is
$20,000.
o Additional premium may be paid once each
Policy Year, within limits.
---------------------------------------------
------------------------------------------------------------------
DEDUCTIONS BEFORE ALLOCATING PREMIUM
None
------------------------------------------------------------------
-------------------------------------------------------------------------------
INVESTMENT OF PREMIUM
o You direct the allocation of the initial and any additional premium among
25 Subaccounts of the Variable Account, the Fixed Account and the
Systematic Transfer Account. The Subaccounts invest in corresponding
Series Funds.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
DEDUCTIONS FROM ASSETS
o Monthly Deduction on the Monthly Deduction Date from Accumulation Value
(annual rate calculated as a percentage of Accumulation Value) for:
o 0.50% to 0.70% for preferred rate class and 0.84% to 1.30% for
standard rate class for cost of insurance (depending on the rate
class of the Insured and Policy accumulation value and duration)
o 1.53% expense charge during Policy years 1 through 10; 1.14% after
Policy Year 10.
o $10 transfer fee (first 12 transfers per Policy free).
o Investment advisory fees and fund expenses are deducted from the assets
of each Fund.
-----------------------------------------------------------------------------
4
<PAGE>
-------------------------------------------------------------------------------
ACCUMULATION VALUE
o Accumulation Value is equal to the initial and any additional premium,
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 withdrawals).
o Accumulation Value may vary daily. There is no minimum guaranteed
Accumulation Value. The Policy may lapse, even if there is no Policy
loan.
o Accumulation Value can be transferred among the Subaccounts and the
Fixed Account. Policy loans reduce the amount available for allocations
and transfers.
o Dollar cost averaging and asset rebalancing programs are available.
o Accumulation Value is the starting point for calculating certain values
under a Policy, such as the Cash Surrender Value and the Death Benefit.
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------- -----------------------------------------
ACCUMULATION VALUE BENEFITS DEATH BENEFIT
<S> <C>
o Received income tax free to
o After the first Policy Year (Date of Issue in Indiana and Beneficiary.
New Jersey), loans may be taken for amounts up to 100% of o Available as lump sum or under a
Cash Surrender Value at a net interest rate charge of variety of payment options.
1.5%. Preferred loans are currently available (with a net o Greater of:
interest rate charge of 0%). - Initial specified amount of
o The Policy may be surrendered in full at any time for its coverage plus any later increase
Cash Surrender Value, or part of the Accumulation Value may and less any later decrease; or
be withdrawn. After the first Policy year, up to 15% of the - Policy's Accumulation Value on the
Accumulation Value as of the first withdrawal that Policy date of the Insured's death
Year may be withdrawn each Policy year without charge. A multiplied by a corridor
nine year declining surrender charge of up to 9.5% of each percentage for the Insured's
premium paid will apply to a full surrender and all other attained age.
partial withdrawals. Federal taxes and tax penalties may
also apply. PROCEEDS PAID ARE REDUCED BY ANY POLICY
o Fixed and variable payment options are available. LOAN BALANCE AND UNPAID LOAN INTEREST.
- ---------------------------------------------------------------- -----------------------------------------
</TABLE>
In the ILLUSTRATIONS section of this prospectus are illustration tables
demonstrating how the Policy operates given the Policy's expenses and several
assumed rates of return. These tables may assist in comparing the Policy's Death
Benefits, Cash Surrender Values and Accumulation Values with those under other
variable life insurance policies. Please review these tables to better
understand the effect of expenses upon the Policy. You may also ask us to
provide a comparable illustration based upon specific factors you provide.
FOR MORE DETAILED INFORMATION ABOUT THE POLICY,
PLEASE READ THE REST OF THIS PROSPECTUS AND THE POLICY.
5
<PAGE>
- -----------------------------------------------------------
ABOUT US
We are United of Omaha Life Insurance Company, a stock life insurance
company organized under the laws of the State of Nebraska in 1926. We are a
wholly owned subsidiary of Mutual of Omaha Insurance Company. The Mutual of
Omaha family of companies provide life, health, disability, home and auto
insurance, mutual funds, trust services, and investment sales and brokerage
services. The Mutual of Omaha Companies have a proud tradition of supporting
environmental education, made popular through its long-running Mutual of Omaha's
Wild Kingdom television program, and continued through its Wildlife Heritage
Trust. United of Omaha is principally engaged in the business of issuing group
and individual life insurance and annuity policies, and group accident and
health insurance in all States of the United States (except New York), and in
the District of Columbia. As of December 31, 1997, United of Omaha had assets of
over $9.2 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 or the degree of risk associated with an investment in the
Variable Account.
- -----------------------------------------------------------
INVESTMENT OPTIONS
THE INVESTMENT RESULTS OF EACH INVESTMENT OPTION, 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
INVESTMENT OPTIONS BEST SUITS YOU LONG-TERM INVESTMENT
OBJECTIVES.
We recognize you have very personal goals and investment strategies. The
Policy allows you to choose from a wide array of investment options - each
chosen for its potential to meet specific investment objectives. You may
allocate all or a part of your Policy premium to one or a combination of the
variable investment options or the fixed investment options (allocations to the
Systematic Transfer Account are limited to initial purchase payment and
rollovers only). Allocations must be in whole percentages and total 100%.
o VARIABLE INVESTMENT OPTIONS
THE SERIES FUND PORTFOLIOS, WHILE THEY MAY HAVE THE SAME OR
SIMILAR NAMES OF RETAIL MUTUAL FUNDS, ARE NOT THE SAME AS
THOSE FUNDS. BY LAW, THE POLICY CANNOT OFFER THOSE RETAIL
MUTUAL FUNDS, SO IT OFFERS INVESTMENT PORTFOLIOS WHOSE NAMES
AND CHARACTERISTICS MAY BE SIMILAR TO THEM BUT WHOSE
PERFORMANCE IS NOT NECESSARILY RELATED TO THE RETAIL FUNDS.
FOR DETAILED INFORMATION ABOUT ANY PORTFOLIO, INCLUDING ITS
PERFORMANCE HISTORY, REFER TO THE SERIES FUND PROSPECTUS FOR
THAT PORTFOLIO.
With the Policy's variable investment options, you bear the investment
risk, not us. This means you, not we, control the amount of money you invest in
each of the variable investment portfolios, and you, not we, bear the risk those
portfolios will perform better or worse than you expect.
The Variable Account, United of Omaha Separate Account B, provides you
with variable investment options in the form of Series Fund portfolios to fund
the benefits provided by your Policy. Each Series Fund is an open-end investment
management company. When you allocate Policy funds to a Series Fund portfolio,
those funds are placed in a Variable Account Subaccount corresponding to that
portfolio, and the Subaccount in turn in invests in the Series Fund portfolio in
the amount of your allocation. Each portfolio operates as a separate investment
fund, and the income or losses of one portfolio generally have no effect on the
investment performance of any other portfolio. Complete descriptions of each
portfolio's investment objectives and restrictions and other material
information related to an investment in the portfolio are contained in the
prospectuses for each of the Series Funds which accompany this Prospectus.
The Variable Account is registered with the SEC as a unit investment trust.
However, the SEC does not supervise the management or the investment practices
or policies of the Variable Account or United of Omaha. The Variable Account was
established as a separate investment account of United of Omaha under Nebraska
law on August 27, 1996. Under Nebraska law, we own Variable Account assets, but
they are held separately from our other assets and are not charged with any
liability or credited with any gain of other separate investment accounts or
other business unrelated to the Variable Account. 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. Because we do not manage the
investments of the portfolios, we do not guarantee the Variable Account's
performance. We are, however, responsible for meeting the obligations of the
Policy to you.
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------- ---------------------------------------------------------------- --------------------------------------------
Variable Investment Options
Asset under United of Omaha Separate Account B Objective
Category* (Series Fund-Portfolio)
Investments
<S> <C> <C>
- ------------------- ---------------------------------------------------------------- --------------------------------------------
MFS Variable Insurance Trust -
MFS Emerging Growth Portfolio (5) Long-term capital appreciation.
Aggressive
Growth
Common stocks of small and medium-sized
companies with growth potential. May make
limited investments in lower rated bonds or
comparable unrated securities.
Alger American Fund -
Alger American Small Capitalization Portfolio (1) Long-term capital appreciation
Common stocks of companies with total market
capitalization of less than $1 billion.
Such securities may have limited marketability
and be subject to more abrupt or erratic
market movements than the general equity
market.
- ------------------- -------------------------------------------------------------------------------------------------------------
Pioneer Variable Contracts Trust - Long-term capital appreciation
Real Estate Pioneer Real Estate Growth Portfolio (8) with current income.
Real estate investment trusts (REITs) and
other real estate industry companies.
- ------------------- -------------------------------------------------------------------------------------------------------------
T. Rowe Price International Series, Inc. -
T. Rowe Price International Stock Portfolio (10) Long-term capital appreciation.
International
Common stock of foreign companies.
Scudder Variable Life Investment Fund -
Scudder VLIF International Portfolio (9) Long-term capital appreciation.
Common stock of foreign companies, diversified
among several countries and industries.
Scudder Variable Life Investment Fund - Long-term capital appreciation
Scudder VLIF Global Discovery Portfolio (9) with current income.
Common stocks of small foreign and domestic
companies, including to a limited extent in
lower rated bonds or comparable unrated
securities.
Morgan Stanley Universal Funds, Inc. -
Morgan Stanley Emerging Markets Equity Portfolio (6) Long-term capital appreciation.
Securities of "emerging" foreign countries
(countries whose economies are developing
strongly and where equity markets are becoming
sophisticated). Such investments may not be
feasible or may involve unacceptable political
risks in some countries, and may involve
greater risk than securities in more developed
countries and markets.
- ------------------- -------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust - High current income
Bond - MFS High Income Portfolio (5) and capital appreciation.
High Yield
Diversified bond portfolio, some of which may
involve equity features, including lower-rated
bonds or comparable unrated securities.
- ------------------- -------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Series, Inc. -
T. Rowe Price New American Growth Portfolio (11) Long-term capital appreciation.
Common stocks of companies in the service
sector of the economy.
MFS Variable Insurance Trust -
MFS Research Portfolio (5)
- ------------------- ---------------------------------------------------------------- --------------------------------------------
Long-term capital appreciation.
Common stocks or securities convertible into
common stocks of companies expected to possess
better than average prospects for long-term
growth. May invest to a limited extent in
lower-rated securities or comparable unrated
securities.
Fidelity Variable Insurance Products Fund II -
Fidelity VIP II Contrafund Portfolio (3) Long-term capital appreciation.
Securities of companies, foreign and domestic,
that are currently undervalued, unpopular or
overlooked, but analysts believe show
potential for growth. May use techniques to
hedge risk.
Alger American Fund -
Alger American Growth Portfolio (1) Long-term capital appreciation.
Common stocks of companies with total market
capitalization of $1 billion or more.
Pioneer Variable Contracts Trust -
Pioneer Capital Growth Portfolio (8) Long-term capital appreciation.
Securities of companies, foreign and domestic,
that are currently undervalued, unpopular or
overlooked, but analysts believe show
potential for growth.
7
<PAGE>
MFS Variable Insurance Trust -
MFS Value Series Portfolio (5) Long-term capital appreciation.
Common stocks of foreign and domestic
companies. May make limited investments in
lower rated bonds or comparable unrated
securities.
- ------------------- -------------------------------------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund II - Long-term capital appreciation
Fidelity VIP II Index 500 Portfolio (3) with current income.
Growth &
Income
Common stocks of companies that comprise the
Standard & Poor's 500 index.
Scudder Variable Life Investment Fund - Long-term capital appreciation
Scudder VLIF Growth & Income Portfolio (9) with current income.
Common and preferred stocks, and securities
convertible into common stocks, of large
established companies.
- ------------------- -------------------------------------------------------------------------------------------------------------
T. Rowe Price Equity Series, Inc. -
T. Rowe Price Equity Income Portfolio (11) Dividend income and capital appreciation.
Equity
Income
Common stocks of established companies that
pay dividends.
Fidelity Variable Insurance Products Fund - Dividend income and capital appreciation
Fidelity VIP Equity Income Portfolio (3) surpassing the S&P 500 average.
Securities of established companies that
produce income and capital appreciation.
- ------------------- ---------------------------------------------------------------- --------------------------------------------
T. Rowe Price Equity Series, Inc. - (11)
T. Rowe Price Personal Strategy Balanced Portfolio Dividend income and capital appreciation.
Balanced
Diversified portfolio of stocks, bond and
money market securities. Bond holdings are
primarily investment grade, but can include
more volatile unrated bonds.
Fidelity Variable Insurance Products Fund II -
Fidelity VIP II Asset Manager Growth Portfolio (3,4) Long term capital appreciation.
Diversified portfolio of domestic and foreign
stocks, bonds, money market securities, and
derivative transactions.
- ------------------- -------------------------------------------------------------------------------------------------------------
MFS Variable Insurance Trust - Capital appreciation and growth with
Bond - MFS World Government Portfolio (5) moderate current income.
International
Foreign and U.S. government bonds.
Insurance Management Series -
Federated Fund for U.S. Government Securities II Portfolio (2) Current income.
- ------------------- ---------------------------------------------------------------- --------------------------------------------
Bond -
Domestic
U.S. Government bonds.
T. Rowe Price Fixed Income Series, Inc. - High level of current income consistent
T. Rowe Price Limited Term Bond Portfolio (11) with modest price fluctuations.
Short- and intermediate-term investment grade
debt securities.
- ------------------- -------------------------------------------------------------------------------------------------------------
Above average return from a diversified
Morgan Stanley Universal Funds, Inc. - portfolio of fixed income securities and
Morgan Stanley Fixed Income Portfolio (7) derivatives.
Medium to high quality fixed income
investments of intermediate maturity.
- ------------------- -------------------------------------------------------------------------------------------------------------
Insurance Management Series - Current income consistent with the
Money Market Federated Prime Money Fund II Portfolio (2) stability of principal.
Money market instruments maturing in 13 months or less. This portfolio is not insured by the
U.S. government, and there is no guarantee it will be able to maintain a stable net asset
value per share.
- ------------------- -------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
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) Morgan Stanley Dean Witter Asset Management, Inc.
(7) Miller Anderson & Sherrerd, LLP.
(8) Pioneer Investment Management.
(9) Scudder Kemper Investments, Inc.
(10) Rowe Price-Fleming International, Inc., a joint venture between
T. Rowe Price Associates, Inc. and Robert Fleming Holdings Limited.
(11) T. Rowe Price Associates, Inc.
WE DO NOT ASSURE THAT ANY PORTFOLIO WILL ACHIEVE ITS STATED
OBJECTIVE. DETAILED INFORMATION, INCLUDING A DESCRIPTION OF
EACH PORTFOLIO'S INVESTMENT OBJECTIVE AND POLICIES, A
DESCRIPTION OF RISKS INVOLVED IN INVESTING IN EACH OF THE
PORTFOLIOS, AND EACH PORTFOLIO'S FEES AND EXPENSES, IS
CONTAINED IN THE PROSPECTUSES FOR THE SERIES FUNDS, CURRENT
COPIES OF WHICH ACCOMPANY THIS PROSPECTUS. NONE OF THESE
PORTFOLIOS IS INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
(*) Asset Category designations are our own to help you gain insight into each
portfolio's intended objectives, but do not assure any portfolio will perform
consistent with the categorization. INFORMATION CONTAINED IN THE SERIES FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN ANY PORTFOLIO OF THE
VARIABLE ACCOUNT.
o Adding, Deleting, or Substituting Variable Investments
We do not control the Series Funds, so cannot guarantee that any of the
portfolios will always be available. We retain the right to change the Variable
Account and its investments. This means we may eliminate the shares of any
portfolio held in our Variable Account and to substitute shares of another
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. We will first notify you and receive the SEC's
and necessary State approval before making such a change.
New portfolios may be added, or existing portfolios eliminated, when, in our
sole discretion, conditions warrant such a change. If a portfolio is eliminated,
we will ask you to reallocate any amount allocated to the eliminated portfolio.
If you do not reallocate these amounts, we will automatically reinvest them in
the Money Market Portfolio.
If we make a portfolio substitution or change, we may change the Policy to
reflect the substitution or change. Our Variable Account may be (i) operated as
an investment management company or any other form permitted by law, (ii)
deregistered with the SEC if registration is no longer required or (iii)
combined with one or more other separate accounts. To the extent permitted by
law, we also may transfer Policy assets of the Variable Account to other
accounts.
o FIXED INVESTMENT OPTIONS
With fixed investment options, we bear the investment risk, unlike variable
investment options where you bear that risk. This means that we will guarantee
you will earn a minimum interest rate of at least 4.5% (0% in Maryland), and
each year may declare a higher current interest rate that we guarantee for at
least one year. We have full control over how assets allocated to fixed
investment options are invested, and we bear the risk those assets will perform
better or worse than the amount of interest we guarantee to pay you. The focus
of this Prospectus is to disclose the Variable Account aspects of the Policy.
For details regarding the fixed investment options, see the Policy.
PREMIUM ALLOCATED TO THE SYSTEMATIC TRANSFER ACCOUNT AND
PREMIUM ALLOCATED AND AMOUNTS TRANSFERRED TO THE FIXED
ACCOUNT BECAME PART OF THE GENERAL ACCOUNT ASSETS OF UNITED
OF OMAHA. INTERESTS IN THE GENERAL ACCOUNT HAVE NOT BEEN
REGISTERED WITH THE SEC AND ARE NOT SUBJECT TO THE SEC'S
REGULATION, NOR IS THE GENERAL ACCOUNT REGISTERED AS AN
INVESTMENT COMPANY WITH THE SEC. THEREFOR, SEC STAFF HAVE
NOT REVIEWED THE FIXED ACCOUNT DISCLOSURES IN THIS
PROSPECTUS.
o Systematic Transfer Account (not available in all States)
The Systematic Transfer Account is the fixed account option used if you
elect at the time of application to participate in the Systematic Transfer
Enrollment Program ("STEP program"). The STEP program is used to automatically
transfer a predetermined dollar amount on a monthly basis to any of the
Subaccounts you choose at the time of application. The allocation and the
predetermined dollar amount may not be changed. You must make a minimum
allocation of $5,000 to the Systematic Transfer Account in order to participate
in the STEP program. No additional funds (other than funds designated in the
application to be transferred into the Policy pursuant to an Internal Revenue
Code Section 1035 transfer) may be allocated to the Systematic Transfer Account
after the date of policy issue.
9
<PAGE>
o Fixed Account and Systematic Transfer Account
The Fixed Account and the Systematic Transfer 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 you do with investments allocated to the Variable
Account, we bear the full investment risk for investments 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 that money invested in the Fixed Account and the Systematic
Transfer Account will earn an effective rate of at least 4.5% per year (0% in
Maryland), and may earn more than that. (After the expense charge is applied,
the net effective rate is 2.97% for Policy years 1-10, and 3.36% for Policy
years 11 and subsequent; -1.53% and -1.14% respectively in Maryland.) Different
amounts of interest may be credited to the Systematic Transfer Account and the
Fixed Account. 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). The maximum amount that can be transferred out of the
Fixed Account during any Policy Year is 10% of Fixed Account value on the date
of the transfer. No charge is imposed on such transfers. Funds allocated to the
Systematic Transfer Account must be completely transferred to the Variable
Account or the Fixed Account within 12 months of deposit. Such transfers from
the Systematic Transfer Account do not count toward the 12 free transfers
between Variable Account Subaccounts or to the Fixed Account allowed each Policy
year. You may not transfer funds to the Systematic Transfer Account. We reserve
the right to modify transfer privileges at any time. 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 and the
Systematic Transfer Account may be delayed for up to six months, and withdrawals
may be subject to a Withdrawal Charge. 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
first; the next oldest payment plus interest is considered to be transferred out
next, and so on (a "first-in, first-out" procedure).
WE HAVE SOLE DISCRETION TO SET CURRENT INTEREST RATES OF
FIXED INVESTMENT OPTIONS. THE INTEREST RATE CREDITED TO EACH
DEPOSIT INTO THE SYSTEMATIC TRANSFER ACCOUNT IS FIXED ON THE
DATE OF EACH DEPOSIT. WE DO NOT GUARANTEE THE LEVEL OF
FUTURE CURRENT INTEREST RATES OF FIXED INVESTMENT OPTIONS,
EXCEPT THAT THEY WILL NOT BE LESS THAN AN EFFECTIVE RATE OF
4.5% (0% IN MD) PER YEAR COMPOUNDED ANNUALLY.
We guarantee that, upon Death or the Policy Maturity Date, the amount in
your Fixed Account or Systematic Transfer Account will be not be less than the
amount of Premium allocated or Accumulation Value transferred to the Fixed
Account or Systematic Transfer Account, plus interest at an effective rate of
4.5% per year (0% in Maryland), plus excess interest credited to amounts in the
Fixed Account or Systematic Transfer Account, less that part of the Monthly
Deduction allocable to the Fixed Account or Systematic Transfer Account and less
and amounts deducted from the Fixed Account or Systematic Transfer Account in
connection with partial withdrawals (including any Surrender Charges) or
transfers to the Variable Account.
o TRANSFERS
The Policy is designed for long-term investment, not for active trading or
"market timing." Excessive transfers could harm other Owners by having a
detrimental effect on portfolio management. After the Right to Examine Your
Policy period and prior to the Policy Maturity Date, you may transfer Policy
value from one Subaccount to another, from the Variable Account to the Fixed
Account, or from the Fixed Account to any Subaccount, as often as you like,
subject to these rules:
Our Rules:
o We must receive notice of the transfer - either Written Notice or an
authorized Telephone Transaction.
o The transferred amount must be at least $500, or the entire Subaccount
value if it is less.(If the Subaccount value remaining after a transfer will
be less than $500, we will include that amount as part of the transfer.)
o We reserve the right to limit transfers from the Variable Account to the
Fixed Account of amounts previously transferred from the Fixed Account.
o The first 12 transfers from Variable Account Subaccounts are free. The rest
cost $10 each. This fee is deducted from the amount transferred.
o A transfer from the Fixed Account:
- currently may be made only once each Policy Year;
- is free;
- does not count toward the 12 free transfer limit; and
- is limited during any Policy Year to 10% of the Fixed Account value on
the date of the transfer.
o We reserve the right to limit transfers, or to modify transfer privileges,
for any permissible reason.
o If the Accumulation Value in any Subaccount falls below $500, we may
transfer the remaining balance, without charge, to the Money Market
Subaccount.
10
<PAGE>
o Transfers made pursuant to participation in the Dollar Cost Averaging, Asset
Allocation or Rebalancing programs are not subject to the amount or timing
limitations of these rules, nor are they subject to a Transfer fee. See
sections describing those programs for the rules of each program.
Third-party Transfers. Where permitted and subject to our rules, we may
accept your authorization to have a third party exercise transfers on your
behalf. We can suspend or cancel our acceptance any time upon notice to you. An
example of a reason might be if the third party is practicing "market timing."
We can also limit the availability of Subaccounts and the Fixed Account for
transfers by the third party, upon notice to you. We would not impose such
restrictions where we have Written Notice that the third party has been duly
appointed by a court or by you to act on your behalf for all your financial
affairs.
o DOLLAR COST AVERAGING
Our Dollar Cost Averaging program allows you to automatically transfer, on a
periodic basis, a set amount or percentage from one Subaccount or the Fixed
Account to any Subaccount(s). You can begin Dollar Cost Averaging when you
purchase the Policy or later. You can increase or decrease the amount or
percentage of transfers or discontinue the program at any time. Rules of the
Dollar Cost Averaging program are:
Our Rules:
o The Dollar Cost Averaging program is free.
o We must receive notice of your election and any changed instruction -
either Written Notice or an authorized Telephone Transaction.
o Automatic transfers can occur monthly, quarterly, semi-annually, or
annually.
o Amount of each transfer must be at least $100, and must be $50 per
Subaccount.
o If transfers are made from the Fixed Account, the maximum periodic transfer
amount is 10% of that account's value at the time of the first Dollar Cost
Averaging transfer. There is no maximum transfer amount requirement out of
the Subaccounts of the Variable Account.
o Dollar Cost Averaging program transfers cannot begin before the end of a
Policy's free look (a/k/a "right to examine") period.
o You may specify that transfers will begin on the 1st through the 28th day
(or, if not a Valuation Date, the next following Valuation Date) following
the Policy's free look period. If you do not select a date, the program
will begin on the next Policy monthly anniversary following the date the
Policy's free look period ends.
o You can limit the number of transfers to be made, in which case the program
will end when that number has been made. Otherwise, the program will
terminate when the amount remaining in the applicable Subaccount or the
Fixed Account is less than $500.
DOLLAR COST AVERAGING AND THE STEP PROGRAM RESULT IN THE
PURCHASE OF MORE ACCUMULATION UNITS WHEN THE ACCUMULATION
UNIT VALUE IS LOW, AND FEWER UNITS WHEN THE ACCUMULATION
UNIT VALUE IS HIGH, REDUCING THE AVERAGE COST PER UNIT AND
HOPEFULLY THEREBY ACCUMULATING MORE UNITS. HOWEVER, THERE IS
NO GUARANTEE THAT THE PROGRAM WILL RESULT IN HIGHER POLICY
VALUE OR OTHERWISE BE SUCCESSFUL.
o SYSTEMATIC TRANSFER ENROLLMENT PROGRAM ("STEP program")
The STEP program allows you to automatically transfer funds on a monthly
basis from the Systematic Transfer Account to any other Policy investment
option. It allows you to use a dollar cost averaging concept for your initial
premium to move this payment from a fixed interest account into variable
investment options within a 12 month period. If you want to move Policy funds
from a fixed interest account into variable investment options over a longer
timer period using the same concept, then you should use the Dollar Cost
Averaging program.
Our Rules:
o The STEP program is free.
o Can only be selected on the initial application.
o Must be at least $5,000 in the Systematic Transfer Account to begin.
o Amount transferred each month must be at least an amount sufficient to
transfer the entire amount out of the Systematic Transfer Account in
equal payments within 12 months of deposit.
o Transfers must be at least $50 per Subaccount.
o Allocation and amount of each monthly transfer cannot be changed.
o No new premium (other than funds designated in the application to be
transferred into the Policy pursuant to an Internal Revenue Code Section
1035 transfer) may be allocated to this account after the Policy Issue
Date.
11
<PAGE>
o Upon receipt of funds by Section 1035 transfer, the 12 month period
requirement is restarted and the minimum monthly transfer amount is
recalculated
o Cannot begin before the end of the Policy's free look (a/k/a "right
to examine") period.
o Transfers will begin on the 1st through the 28th day (or, if not a
Valuation Date, the next following Valuation Date), as specified by you,
following the free look period. If you do not select a start date, the STEP
program will begin on the next Policy monthly anniversary following the
date the Policy's free look period ends.
o No transfers may be made into the Systematic Transfer Account.
o All funds remaining in the Systematic Transfer Account on the date of
the 12th monthly transfer date will be transferred to the Subaccounts in
a pro rata amount consistent with your allocation instructions.
o The STEP program ends the earlier of the date when all amounts in the
Systematic Transfer Account have been transferred or the date of the
last monthly STEP program transfer.
o ASSET ALLOCATION PROGRAM
The Asset Allocation program allows you to allocate premium and Policy value
among the variable investment options and the Fixed Account. You can specify
your own desired allocation instructions, or you can choose to use one of the
five Asset Allocation Models outlined below.
Our Rules:
o The Asset Allocation program is free.
o You must request the Asset Allocation program and give us your allocation
instructions by Written Notice. Changed instructions, or a request to end
this program must also be by Written Notice.
o Transfers made pursuant to this program do not count in determining whether
a Transfer Fee applies.
<TABLE>
<CAPTION>
ASSET ALLOCATION MODES
ALLOCATIONS
Portfolio Principal Portfolio Income Capital Equity
(listed aggressive Conserver Protector Builder Accumulator Maximizer
to conservative) (conservative) (moderately (moderate) (moderately (aggressive)
conservative) aggressive)
% % % % %
- --------------------------------- ------------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Alger American Small Capitalization 3 5 12 18
Pioneer Real Estate Growth 4 5 6
T.Rowe Price International 6 15 27 31
Scudder International 19
MFS High Income 4 5 5
T.Rowe Price New America Growth 6
MFS Value Series 3 8 12 16 10
Fidelity VIP II Index 500 5 10 10 13 13
T.Rowe Price Equity Income 10 15
Fidelity VIP Equity Income 8 15 16
MFS World Government 4 5 5
T.Rowe Price Limited-Term Bond 43 31 20 12
Morgan Stanley Fixed Income Bond 3
Federated Prime Money Fund II 24 13 5
- ------------------------------------ ------------- ------------- ----------- -------------- ------------
</TABLE>
We use Ibbotson Associates to develop the Asset Allocation Model
allocations. They are an investment consulting firm specializing in applying
investment theories and empirical findings (such as historical return data
collected on the Subaccount portfolios) to quantify the benefits of
diversification for particular investment profiles.
12
<PAGE>
o REBALANCING PROGRAM
The Rebalancing program allows you to rebalance your Policy Accumulation
Value among the variable investment options and the Fixed Account pursuant to
your initial allocation percentage instructions on a quarterly, semi-annual, or
annual basis. Rebalancing utilizes your allocation instructions at the end of
any STEP program period (so never rebalances any assets to the Systematic
Transfer Account), or you may change your rebalancing allocation instructions at
any time. Any change will not be effective until the next rebalancing occurs.
Our Rules:
o The Rebalancing program is free.
o You must request the Rebalancing program and give us your rebalancing
instructions by Written Notice. Changed instructions, or a request to
end this program must also be by Written Notice.
o You must have at least $10,000 of Policy Accumulation Value to begin the
Rebalancing program.
o You may have rebalancing occur quarterly, semi-annually or annually.
o Transfers made pursuant to this program do not count in determining whether
a Transfer Fee applies.
- -----------------------------------------------------------
IMPORTANT POLICY PROVISIONS
The Ultra Variable Life Policy is a Modified Single Premium Variable
Universal Life Insurance Policy ("modified" in that it allows for the acceptance
of additional premiums). The Policy provides a death benefit and, as a variable
insurance policy, allows you to invest Policy Accumulation Value in variable or
fixed investment options where any gain accumulates on a tax-deferred basis.
Some key rights and benefits under the Policy are summarized in this Prospectus;
however, you must refer to the Policy for the actual terms of the Policy. You
may obtain a copy of the Policy from us. The Policy remains in force until
surrendered for its Cash Surrender Value, or all proceeds have been paid under a
death benefit Payout Option, or it lapses because its Cash Surrender Value is
insufficient to continue to pay for the expenses to maintain its life insurance
protection.
o POLICY APPLICATION AND ISSUANCE
To purchase a Policy, you must submit an application with the minimum
initial annual premium and provide evidence of the proposed Insured's
insurability. 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 your application is in good order upon receipt, we will credit your
initial premium to the Policy on the date the Policy is issued. Premium is
allocated to the Money Market investment option until the end of the free look
period, and only then to your selected variable investment allocations. If a
Policy is not issued, we will return your premium. If we issue a Policy, it will
be effective on the date of issue.
REPLACING AN EXISTING LIFE
INSURANCE POLICY IS NOT ALWAYS
YOUR BEST CHOICE. EVALUATE ANY
REPLACEMENT CAREFULLY.
o Application in Good Order. All application questions must be answered, but
particularly note these requirements:
- - Your full name, social security number, and date of birth must be included.
- - Your premium allocations must be completed, be in whole percentages, and
total 100%.
- - Initial premium must meet minimum initial premium requirements.
- - Your signature and your agent's signature must be on the application.
- - City, state, and date application was signed must be completed.
- - You must provide all information required for us to underwrite your
application, and we must accept your application after underwriting.
o Premium Payments. Your premium checks should be made payable to "United of
Omaha Life Insurance Company" and sent to us. We may postpone crediting any
payment made by check to your Policy until it has been honored by our and
your bank. Payment by certified check, banker's draft, or cashier's check
will be promptly applied. You may change your premium allocation
instructions by sending us Written Notice or through an authorized Telephone
Transaction. The change will apply to payments received on or after the date
we receive your Notice or authorization.
Initial Premium Payment:
- - The only premium payment required. All others are optional.
- - Must be at least $20,000.
Additional Premium Payments:
- - Can only be made until the Insured's age 90 (except as may be required in a
grace period).
13
<PAGE>
- - Are subject to the Insured's continued insurability and our underwriting
requirements.
- - Must be at least $5,000; may be less if it is an additional payment
required during a grace period.
- - If there is a Policy loan, the payment is generally first treated as
repayment of Policy loan interest, second as repayment of the loan, and
last as additional premium, unless you designate otherwise in a Written
Notice when you send the payment to us.
- - Are applied pursuant to your current investment allocation instructions,
unless you give us different Written Notice instructions at the time you
make an additional premium payment.
- - We reserve the right to reject additional premium for any reason.
o LAPSE AND GRACE PERIOD
o Lapse.
No Policy Loan exists: The Policy will lapse if, on a Monthly Deduction
Date, the Accumulation Value is not enough to cover the Monthly Deduction due
(subject to the Guaranteed Death Benefit), and a grace period expires without a
sufficient premium payment.
A Policy Loan exists: The Policy will lapse on any Monthly Deduction
Date when the Cash Surrender Value is not enough to cover the Monthly Deduction
and any loan interest due, and a grace period expires without a sufficient
premium payment.
A LAPSE OF THE POLICY MAY RESULT IN ADVERSE TAX CONSEQUENCES.
o Grace Period. We allow you a 61 day grace period to make a premium payment
sufficient to cover the Monthly Deduction and any loan interest due.
- - The grace period begins the day we mail notice to you of the insufficiency.
- - If the necessary additional premium payment is not received, the Policy
terminates as of the first day of the grace period.
- - Payment received during a grace period is first applied to repay Policy
debt before the remaining amount is applied as additional premium to keep
the Policy in force.
- - Insurance coverage continues during the grace period, but the Policy is
deemed to have no Accumulation Value for purposes of Policy loans,
surrender and withdrawals.
- - If the Insured dies during the grace period, the Death Benefit proceeds
payable during the grace period equal the amount of Death Benefit in effect
immediately prior to the date the grace period began less any due and
unpaid Monthly Deduction.
o MISSTATEMENT OF AGE OR SEX
If the Insured's age or sec is misstated, all Policy payments and benefits
will be those which the premiums paid would have purchased at the correct age
and sex.
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 (and, in Missouri, the insured was insane at the
time coverage was applied for. 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 the specified amount of coverage 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 the specified amount of
coverage 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 the specified amount of coverage will be based on the application
for that increase.
14
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
o TELEPHONE TRANSACTIONS
Transactions Permitted Our Rules:
o Transfers. o Prior Written Notice authorization to us.
o Partial Withdrawals of $10,000 or o Must be received by close of the New York Stock Exchange
less by the Owner (may be ("NYSE")(usually 3 p.m. Central Time); if later, the
restricted in community transaction will be processed the next day the NYSE is
property states). open.
o Premium Allocations. o Will be recorded for your protection.
o For security, you must provide
your social security number and/or
other identification information.
o May be discontinued at any time as to some or all Owners.
</TABLE>
We are not liable for following authorized Telephone Transaction
instructions we reasonably believe to be genuine.
o REINSTATEMENT
If the Policy lapses because a grace period ended without a sufficient
payment being made, you may reinstate it within five years of the date of lapse
and prior to the maturity date. To reinstate, we must receive:
- - written application signed by you and the Insured;
- - evidence of the Insured's insurability satisfactory to us;
- - enough payment to continue this Policy in force for three months;
- - repayment or reinstatement of any outstanding Policy loan along with unpaid
loan interest from the date of lapse. Surrender charges, if any, based on
the length of time since premium was paid. The effective date of
reinstatement will be the date we approve the application for
reinstatement.
The specified amount of coverage of the reinstated Policy may not exceed the
specified amount of coverage at the time of lapse. The Accumulation Value on the
effective date of reinstatement will reflect (a) the Accumulation Value at the
time of lapse, except that the value in the Loan Account may be repaid prior to
reinstatement; less (b) the Monthly Deduction for the current month.
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 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. The Policy may terminate prior to the maturity date if the premiums
paid are not enough to continue this Policy in force. 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 current cost of
insurance charges are more favorable than guaranteed charges.
o COVERAGE BEYOND MATURITY
Prior to thirty days before 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:
- - We will maintain your allocation of Accumulation Value to the investment
options according to your instructions;
- - The cost of insurance charge will be zero;
- - The expense charge will be zero;
- - The corridor percentage will be fixed at 101%;
- - Any riders attached to the Policy that are then in force will terminate;
- - 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 Insured's lifetime.
The tax consequences associated with extending coverage beyond maturity are
unclear. A tax advisor should be consulted before making such an election.
THE TAX CONSEQUENCES OF
CONTINUING A POLICY
BEYOND THE INSURED'S AGE
100 ARE UNCLEAR. PLEASE
CONSULT A TAX ADVISOR.
o DELAY OF PAYMENTS
We will usually pay any amounts from the Variable Account requested as a
Policy loan, partial withdrawal or Cash Surrender within 7 days after we receive
your Written Notice. 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 Securities
and Exchange Commission will govern as to whether the conditions in (iii) or
(iv) exist.
15
<PAGE>
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 MINOR OWNER OR BENEFICIARY
A minor may not own the Policy solely in the minor's name and cannot receive
payments directly as a Policy Beneficiary. Contrary to common belief, in most
states parental status does not automatically give parents the power to provide
an adequate release to us to make Beneficiary payments to the parent for the
minor's benefit. A minor can "own" a Policy through the Trustee of a Trust
established for the minor's benefit, or through the minor's named and court
appointed guardian who own the Policy in their capacity as Trustee or Guardian.
Where a minor is a named Beneficiary, we are able to pay the minor's beneficiary
share to a minor's Trustee or Guardian. Some states allow us to make such
payments up to a limited amount directly to parents. Parents seeking to have a
minor's interest made payable to them for the minor's benefit are encouraged to
check with their local court to determine the process to be appointed as the
minor's guardian; it is often a very simple process. If there is no adult
representative able to give us an adequate release for payment of the minor's
Beneficiary interest, we retain the minor's interest on deposit until the minor
attains the age of majority.
- -----------------------------------------------------------
EXPENSES
The charges and fees described below compensate us for our expenses in
distributing the Policy, bearing mortality and expense risks under the Policy,
and administering the investment options and the Policy. Except where stated
otherwise, charges and fees shown are the maximum we will charge, and some
actual expenses may be less.
Each Series Fund also deducts expenses from each Portfolio; those expenses
are described in each Series Fund prospectus.
o MONTHLY DEDUCTION
We make a Monthly Deduction from the entire Accumulation Value on each
monthly anniversary of the Policy Date of Issue (the " Monthly Deduction Date"),
consisting of the Cost of Insurance Charge and the Expense Charge. There is no
Monthly Deduction after the Policy Anniversary next following the Insured's
100th birthday if coverage beyond maturity is elected.
Each charge is calculated as a percentage of Accumulation Value (including
amounts of Accumulation Value moved to the Loan Account as collateral for Policy
loans) 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, the Fixed Account and the Systematic Transfer Account.
o Cost of Insurance Charge
The cost of insurance charge covers our cost to provide insurance protection
under the Policy. Currently, the amount of this charge is based on the rate
class of the Insured and Policy Accumulation Value and duration. We assign
Insureds to rate classes based on underwriting conducted when we receive a
Policy application. Currently, we assign Insureds to the following rate classes:
preferred and standard. Once a Policy is issued, an Insured's rate class does
not change unless an additional premium is submitted and our underwriting review
determines the Insured qualifies for a better rate class; this new rate class
will then be used for cost of insurance charges under the entire Policy.
Currently, the cost of insurance charge for a Policy is calculated as a
percentage of the Accumulation Value on the Monthly Deduction Date. The charge
is based on the duration of the Policy, and the Insured's rate class. The
current monthly rates for these classes are equivalent to the annual percentage
rates shown in the following table:
16
<PAGE>
ACCUMULATION VALUE ACCUMULATION VALUE
POLICY YEAR(S) OF LESS THAN $45,000. OF $45,000 OR MORE.
------------------ ------------------- -------------------
Preferred Rate Class
1-10 0.70% 0.60%
11 and later 0.60% 0.50%
Standard Rate Class
1-10 1.30% 1.20%
11 and later 0.94% 0.84%
We reserve the right to change the cost of insurance charges upon appropriate
regulatory approval.
When determining the current cost of insurance charge on a Monthly Deduction
Date, the applicable cost of insurance percentage is applied to the remaining
Accumulation Value.
The cost of insurance charge deducted on a Monthly Deduction Date is
guaranteed not to exceed the amount calculated using the guaranteed cost of
insurance rates set forth in the Policy for that date. The maximum cost of
insurance charge for a Monthly Deduction Date is equal to the "net amount at
risk" under the Policy, multiplied by the guaranteed cost of insurance rate for
that date. The net amount at risk is determined on the last day of the Policy
Month. The amount at risk at any point in time is just the death benefit at that
point in time, less the Accumulation Value at that point in time after deducting
the Expense Charge and the cost of any Policy riders.
The guaranteed cost of insurance rate for a Monthly Deduction Date under a
Policy depends on the Insured's sex and age on the first day of a Policy Year.
Current cost of insurance rates are more favorable for preferred rate class
than for standard rate class Insureds. Within a given class, guaranteed cost of
insurance rates are generally more favorable for Insureds of lower ages than for
Insureds of higher ages, and are generally more favorable for female Insureds
than for male Insureds.
If a Policy loan exists, and the Cash Surrender Value on a Monthly Deduction
Date is not enough to cover the entire Monthly Deduction and any loan interest
due for the Policy Month, we will notify you that the Policy is going to
terminate unless a sufficient payment is made within the 61-day grace period.
o Expense Charge.
The expense charge consists of charges for administrative, tax (first ten
Policy Years only) and mortality and expense risk charges.
Administrative Charge. This charge is currently an annual rate of 0.24% of
the Accumulation Value on each Monthly Deduction Date. This charge is for the
cost of administering the Policies (such as the cost of processing Policy
transactions, issuing Policy Owner statements and reports, and record keeping),
as well as legal, actuarial, systems, mailing and other overhead costs connected
with our variable life insurance operations.
Tax Expense Charge. We deduct this charge for the first ten Policy Years
only. The annual rate of this charge is 0.39% of the Accumulation Value and is
to reimburse us for State premium taxes (except in Oregon), federal deferred
acquisition cost taxes, and related administrative expenses.
Mortality and Expense Risk Charge. We deduct this charge for the mortality
and expense risks that we assume. This charge is currently set at an annual rate
of 0.90% of the Accumulation Value on each Monthly Deduction Date. The mortality
risk we assume is that Insureds may live for shorter periods of time than we
estimated. The expense risk is that our costs of issuing and administering the
Policies may be more 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.
o SURRENDER CHARGE (ALSO APPLIES TO PARTIAL WITHDRAWALS)
- --------------------------------------------------------------------------------
Years Since Receipt of 1 2 3 4 5 6 7 8 9 10+
Premium Payment
- --------------------------------------------------------------------------------
Applicable Surrender 9 1/2% 9 1/2% 9 1/2% 9% 7 1/2% 6% 4 1/2% 3% 1 1/2 0%
Charge Percentage
- --------------------------------------------------------------------------------
We will apply a SurrenderWithdrawal Charge, expressed as a percentage of any
premium surrendered or withdrawn, upon a full surrender or partial withdrawal.
This charge partially covers our distribution expenses, including commissions
and other promotional expenses. The Surrender Charge Percentage varies depending
upon the number of years elapsed since the date the premium was made. The amount
of a partial withdrawal plus the Surrender Charge is deducted from the
Accumulation Value on the date we receive your withdrawal request. Partial
withdrawals (including any charge) are deducted from the Subaccounts and the
Fixed Account or the Systematic Transfer Account on a pro-rata basis, unless you
instruct us otherwise.
The Withdrawal Charge will not cover our cost of distributing the Policies.
Any deficiency is met from our general funds, including amounts derived from the
Mortality and Expense Risk Charge (described above).
17
<PAGE>
o Free Partial Withdrawals
Each Policy Year, subject to limits on transfers from the Fixed Account,
you can withdraw, without a Surrender Charge, the greater of (i) up to 15% of
Accumulation Value at the time of the first withdrawal each year without
incurring a Surrender Charge or (ii) that portion of the Accumulation Value
exceeding the total premium paid. No Surrender Charge is charged upon death
benefit payments. Our Rules for partial withdrawals are discussed in the POLICY
DISTRIBUTIONS section of this prospectus.
o Surrender Charge Waivers
We will waive the Surrender Charge upon partial withdrawals and surrenders
in the following situations. Each waiver may not be available in all states.
Nursing Home Waiver. Any withdrawal made pursuant to your confinement, upon
the recommendation of a licensed physician, 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 of the last day of confinement to such facility.
Proof of confinement must be provided. The Nursing Home Waiver is not available
if any Owner is confined to a nursing home or hospital facility on the Date of
Issue.
We will not accept any additional Purchase Payments under your Policy once
this Waiver is elected.
Disability Waiver. Any withdrawal where you are physically disabled. We may
require proof of such disability, including written confirmation of receipt and
approval of any 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 any Owner claiming such disability
examined by a licensed physician.
We will not accept any additional Purchase Payments under a Policy once
this Waiver has been elected. The Disability Waiver is not available if any
Owner is receiving Social Security Disability Benefits on the Date of Issue or
is age 65 or older.
Terminal Illness Waiver. Any withdrawal where you are diagnosed with a
terminal illness. A terminal illness is a medical condition that, with a
reasonable degree of medical certainty, will result in your death within 12
months or less. We may require proof of such illness including written
confirmation from a licensed physician. We reserve the right to have an Owner
diagnosed with such illness examined by a licensed physician.
We will not accept any additional purchase payments under a Policy once
this Waiver has been elected. The Terminal Illness Waiver is not available if
any Owner is diagnosed with a terminal illness prior to or on the Date of Issue.
Unemployment Waiver. Any withdrawal 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 any Owner or Annuitant
is receiving unemployment benefits on the Date of Issue.
Transplant Waiver. Any withdrawal 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 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. Any withdrawal if your primary residence suffers
physical damage in the amount of $50,000 or more. To claim this waiver, send us
a certified copy of a licensed appraiser's report stating the amount of the
damage. This certified 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 per occurrence.
Death of Spouse or Minor Dependent Waiver. Withdrawals of the following
percentage of Accumulation Value made within six months of your spouse's or
minor dependent(s)' death: death of spouse, 50%; death of minor dependent(s),
25%. We must receive proof of death. This waiver may be exercised once for a
spouse and once for each minor dependent, subject to no more than 50% of the
Accumulation Value being withdrawn pursuant to this waiver each year. Subsequent
withdrawals, or withdrawals above the waiver limit, are subject to the
Withdrawal Charge.
o TRANSFER CHARGE
$10 PER SUBACCOUNT TRANSFER AFTER 12
FREE TRANSFERS EACH POLICY YEAR.
The first 12 transfers from Subaccounts, and all transfers from the Fixed
Account or the Systematic Transfer Account are free. The Transfer Charge is
deducted from the amount transferred. Simultaneous requests are treated as a
single request. We will not impose the charge for transfers that are not the
result of your request. Dollar Cost Averaging, Asset Allocation and Rebalancing
program transfers do not count toward the 12 free transfers.
18
<PAGE>
o SERIES FUND CHARGES
$10 PER SUBACCOUNT TRANSFER AFTER 12
FREE TRANSFERS EACH POLICY YEAR.
Each Series Fund Portfolio is responsible for its own expenses. The net
assets of each Portfolio reflects deductions for investment advisory fees and
other expenses. These charges are disclosed in each Series Fund's prospectus
which accompany this Prospectus. Here is a table of Series Fund annual expenses:
<TABLE>
<CAPTION>
Series Fund Annual Expenses/1 Management Other Total Series
(as a percentage of average net assets) Fees Expenses Fund Annual
Portfolio Expenses
================================================ ----------------- ----------------- ------------------
<S> <C> <C> <C>
Alger American Growth 0.75% 0.04% 0.79%
Alger American Small Capitalization 0.85% 0.04% 0.89%
Federated Prime Money Fund II * 0.30% 0.50% 0.80%
Federated Fund for U.S. Government Securities II * 0.15% 0.65% 0.80%
Fidelity VIP II Asset Manager: Growth *** 0.65% 0.22% 0.87%
Fidelity VIP II Contrafund *** 0.61% 0.13% 0.74%
Fidelity VIP Equity Income *** 0.51% 0.07% 0.58%
Fidelity VIP II Index 500 ** 0.13% 0.15% 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%
Morgan Stanley Emerging Markets Equity ** 0.00% 1.75% 1.75%
Morgan Stanley Fixed Income ** 0.00% 0.70% 0.70%
Pioneer Capital Growth 0.65% 0.14% 1.79%
Pioneer Real Estate ** .88% 0.37% 1.25%
Scudder Global Discovery **, ***** 0.67% 1.08% 1.75%
Scudder Growth & Income ***, ***** 0.48% 0.22% 0.80%
Scudder International 0.86% 0.17% 1.00%
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%
- ------------------------------------------------ ----------------- ----------------- ---------------
========================================================================================================
</TABLE>
* Both Federated Prime Money Fund II and Federated Fund for U.S. Government
Securities II currently bundle their fees and expenses and limit the total
charge. Absent any fee waiver or expense reimbursement, the total fees and
expenses for each fund would have been 1.00% and 1.25% respectively.
** Without fee waiver or expense reimbursement limits the following funds would
have had the charges set forth below:
Management Other Total
Fees Expenses Expenses
--------------------------------------------------
Fidelity VIP II Index 500 0.28% 0.15% 0.43%
Morgan Stanley Emerging Markets Equity 1.25% 2.87% 4.12%
Morgan Stanley Fixed Income 0.40% 1.31% 1.71%
Pioneer Real Estate 0.88% 0.48% 1.36%
Scudder Global Discovery 0.98% 2.00%***** 2.98%
*** These funds have voluntarily agreed to limit their total annual expenses to
the limits shown below:
Fidelity VIP II Asset Manager: Growth and Fidelity VIP II Contrafund - 1.00%
Fidelity VIP Equity Income and Scudder Growth & Income - 1.50%
**** T. Rowe Price Funds do not itemize management fees and other expenses.
***** Includes .25% 12b-1 fee assessed for payment of distribution
administration expenses.
================================================================================
- --------
/1 The fee and expense data regarding each Series Fund, which are fees and
expenses for 1997, was provided to United of Omaha by the Series Fund. The
Series Funds are not affiliated with United of Omaha.
19
<PAGE>
- -----------------------------------------------------------
POLICY DISTRIBUTIONS
The principle purpose of the Policy is to provide a death benefit upon the
Insured's death, but before then you may also borrow against the Policy's Cash
Surrender Value, take a partial withdrawal of its Accumulation Value, or
surrender it for its Cash Surrender Value. Tax penalties and Surrender Charges
may apply to amounts taken out of your Policy before death benefits are paid or
it matures.
<TABLE>
<CAPTION>
o POLICY LOANS
<S> <C>
AMOUNT YOU CAN BORROW LOAN INTEREST RATE
- -------------------------------------------------------------- ----------------------------------------------
Standard Policy Loan. After the first Policy Year (from the Standard Policy Loan. Net annual loan
Date of Issue in Indiana), you may borrow up to 100% of the interest rate of 1.5%: we charge 5.7% interest
Cash Surrender Value, less loan interest to the end of the in advance (6% effective annual rate), but
Policy Year, and less the Monthly Deduction amount needed to we also credit 4.5% interest to any amounts
continue this Policy in force for one month. in the Loan Account.
- -------------------------------------------------------------- ------------------------------------------
A Preferred Policy Loan is available on any date when the Preferred Policy Loan. Net annual loan interest
sum of the Cash Surrender Value plus any outstanding rate of 0%: we charge 5.7% interest in advance
standard loans exceeds the total of all premiums paid (6% effective annual rate), but we also credit
since issue. The amount available for a Preferred 6% interest to any amounts in the Loan Account.
Policy Loan is the amount of such excess.
- ---------------------------------------------------------------------------------------------------------
Tax law is unclear whether a Preferred Loan will be respected for
tax purposes. A Tax advisor should be consulted before effecting
a Preferred Policy Loan
- ---------------------------------------------------------------------------------------------------------
</TABLE>
Our Rules
o The Policy must be assigned to us as sole security for the loan.
o We will transfer all loan amounts from the Fixed Account, the Systematic
Transfer Account and the Subaccounts to the Loan Account. The amounts will
be transferred on a pro rata basis.
o Loan 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, the Systematic Transfer Account and the Subaccounts, to
the Loan Account on a pro rata basis.
o All or part of a loan may be repaid at any time while the Policy is in
force. We will deduct the amount of a loan repayment from the Loan Account
and allocate that amount pursuant to your current allocation instructions.
o The death benefit will be reduced by the amount of any loan outstanding and
unpaid loan interest 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.
o SURRENDER
While the Insured is alive, you may terminate this Policy for its Cash
Surrender Value. For amounts allocated to the Fixed Account and the Systematic
Transfer Account, the Cash Surrender Value is 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 1/2%. Following a
surrender, all your rights in the Policy end.
o The Policy must be returned to us to receive the Cash Surrender Value.
o The maximum applicable Surrender Charge is 9 1/2%
o Surrenders are taxable, and a 10% federal tax penalty may apply.
o We may defer payment from the Fixed Account or the Systematic Transfer
Account for up to six months.
o PARTIAL WITHDRAWALS
After the first Policy Year, you may withdraw part of the Accumulation
Value. The amount requested and any Surrender Charge will be deducted from the
Accumulation Value on the date we receive your Written Notice. Amounts
withdrawn, except for "Free" Withdrawals described below, are subject to a
Surrender Charge of up to 9 1/2%. The Surrender Charge is a percentage of the
premium withdrawn. The applicable percentage varies according to the length of
time since each affected premium was paid, and are shown in the POLICY EXPENSES
section of this Prospectus.
20
<PAGE>
"Free" Withdrawals
Each Policy year you may withdraw, without a surrender charge, the greater of:
(a) 15% of the Accumulation Value as of the first withdrawal that
Policy year; or
(b) that portion of the Accumulation Value in excess of total premiums
paid.
Our Rules
o Partial withdrawals are made first from earnings and then from premiums
paid, beginning with the earliest premium payment.
o The minimum partial withdrawal amount is $500; the maximum is an amount such
that the remaining Accumulation Value is not less than $20,000.
o Partial withdrawals result in cancellation of Accumulation Units from each
applicable Subaccount. Unless you instruct us otherwise, we will deduct
amount from the Subaccounts, the Fixed Account and the Systematic Transfer
Account on a pro rata basis. No more than a pro rata amount may be withdrawn
from the Fixed Account and the Systematic Transfer Account for a partial
withdrawal.
o The specified amount of insurance coverage will be reduced in the same
proportion as the Accumulation Value is reduced as a result of any partial
withdrawal.
o Withdrawals from the Systematic Transfer Account will not affect the minimum
monthly transfer amount from that Account, so will cause the total amount to
be transferred to be completed in less time than originally anticipated.
o We reserve the right to defer withdrawals from the Fixed Account and the
Systematic Transfer Account for up to six months from the date we receive
your Written Notice.
o DEATH BENEFIT
We will pay the death benefit after we receive necessary documentation of
the Insured's death, or as soon thereafter as we have sufficient information
about the Beneficiary to make the payment. Death Benefits may be paid pursuant
to a Payment Option (including a lump sum payment) to the extent allowed by
applicable law and any settlement agreement in effect at the Insured's death. If
neither you or the Beneficiary makes an Payment Option election within 60 days
of our receipt of Due Proof of the Insured's death, we will issue a lump sum
payment to the Beneficiary.
o Guaranty
If no Policy loans are taken, we guarantee Policy coverage will remain in
force until the 15th Policy anniversary (or the maximum lesser duration your
State allows) or the Policy anniversary next following the Insured's 75th (70th
in Texas) birthday, whichever is earlier.
o Amount
The death benefit is the greater of:
(a) the initial specified amount of coverage plus any later increase and
less any later decrease; or
(b) the policy's Accumulation Value on the date of death multiplied by the
corridor percentage from the table shown below for the Insured's
attained age;
less any outstanding loans and unpaid loan interest. To determine the initial
specified amount of coverage, multiply the single premium amount by the
corresponding issue age premium factor; deposits after issue will increase the
specified mount by the amount of the additional deposit multiplied by the
attained age premium factor (not the "corridor percentage" shown below).
Attained Corridor Attained Corridor Attained Corridor
Age Percentage Age Percentage Age Percentage
- -------- ---------- -------- ----------- ------ ----------
0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75-90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94 101%
52 171% 66 119% 95-100 100%
53 164% 67 118% 100+ 101%
21
<PAGE>
o PAYMENT OF PROCEEDS
You may elect (or the Beneficiary may elect if you do not) to have proceeds
applied to be paid under any combination of the fixed and variable payout
options shown in this Policy. (In Maryland only fixed payout options are
available.) 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.
Our Rules
o Payees must be individuals who receive payments in their own behalf unless
otherwise agreed to by us.
o Any option chosen will be effective when we acknowledge it.
o We may require proof of your age or survival or the age or survival of the
Payee.
o 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.
o 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 Proceeds 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 Proceeds 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 deducted to compensate us for the
administrative costs associated with the variable payment options.
o Transfers between fixed and variable investment options
4 TRANSFERS ARE ALLOWED
EACH POLICY YEAR.
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.
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 Proceeds Payment Options
THE LONGER THE GUARANTEED OR
PROJECTED PROCEEDS PAYMENT
OPTION PERIOD, THE LOWER THE
AMOUNT OF EACH PAYMENT.
NOTE: UNLESS YOU ELECT A PAYMENT OPTION WITH A GUARANTEED PERIOD OR OPTION
1, IT IS POSSIBLE ONLY ONE PAYMENT WOULD BE MADE UNDER THIS PAYMENT OPTION IF
THE PAYEE DIED BEFORE THE DUE DATE OF THE SECOND ANNUITY PAYMENT, ONLY TWO
ANNUITY PAYMENTS WOULD BE MADE IF THE PAYEE DIED BEFORE THE DUE DATE OF THE
THIRD ANNUITY PAYMENT, ETC. If variable payments are being made under Option 2
or 6 and do not involve life contingencies, then the Payee may elect to receive
the commuted value of any unpaid payments.
22
<PAGE>
1) Proceeds Held on Deposit at Interest. While Proceeds remain on deposit, we
annually credit interest to the Proceeds. The interest may be paid to the
Payee or added to the amount on deposit.
2) Income of a Specified Amount. Proceeds are paid in monthly installments of a
specified amount over at least a 5 year period until Proceeds, with
interest, have been fully paid.
3) Income for a Specified Period. Periodic payments of Proceeds are paid for
the number of years chosen. If no other frequency is selected, payments will
be made monthly. Monthly incomes for each $1,000 of Proceeds, which include
interest, are shown in a table in the Policy.
4) Lifetime Income. Proceeds are paid as monthly income for as long as the
Payee lives. The amount of the monthly income annuity payment will be the
amount computed using either the Lifetime Monthly Income Table set forth in
the Policy (based on the 1983 Table "a" mortality table and interest at 3%,
adjusted to age last birthday) or, if more favorable to the Payee, our then
current lifetime monthly income rates for payment of Proceeds. If a variable
Payout Option is chosen, all variable proceeds payments, other than the
first variable payment, will vary in amount according to the investment
performance of the applicable variable investment options.
Guarantees available:
Guaranteed Period - An amount of monthly income annuity payments is
determined that we guarantee to pay for at least 10 years, and
thereafter during the Payee's life.
Guaranteed Amount - An amount of monthly income annuity payment is
determined that we guarantee to pay for the rest of the Payee's life.
5) Lump Sum. Proceeds are paid in one sum.
6) Alternative Schedule. We may be able to accommodate making proceeds payments
under other options, including joint and survivor periods. Contact us for
more information.
- -----------------------------------------------------------
TAX MATTERS
This discussion of federal income tax considerations relating to the Policy
is based upon our understanding of laws as they now exist and are currently
interpreted by the Internal Revenue Service ("IRS").
o LIFE INSURANCE QUALIFICATION
The Internal Revenue Code of 1986, as amended ("Code") defines a life
insurance contract for Federal income tax purposes. This definition can be met
if a life insurance contract satisfies either one of two tests set forth in that
section. The Code and proposed regulations do not directly address manner in
which these tests should be applied to certain features of the Policy. Thus,
there is some uncertainty about the application of Section 7702 to the Policy.
TAX LAWS AFFECTING THE POLICY
ARE COMPLEX. TAX RESULTS MAY
VARY AMONG INDIVIDUAL USES OF
A POLICY. YOU ARE ENCOURAGED
TO SEEK INDEPENDENT TAX ADVICE
IN PURCHASING OR MAKING
ELECTIONS UNDER THE POLICY.
Nevertheless, we believe the Policy qualifies as a life insurance contract
for federal tax purposes, so that:
o the death benefit should be fully excludable from the Beneficiary's gross
income; 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.
We reserve the right to make such changes in the Policy as we deem
necessary to assure it qualifies as a life insurance contract under the Code and
continues to provide the tax benefits of such qualification.
IN ALMOST ALL CASES, THIS POLICY WILL
BE A MODIFIED ENDOWMENT CONTRACT.
Modified Endowment Contracts. The Code establishes a class of life
insurance contracts designated as modified endowment contracts. Code rules
governing whether a Policy will be treated as a modified endowment contract are
extremely complex. In general, a Policy is a modified endowment contract if the
accumulated premium payments made at any time during the first seven Policy
years exceed the sum of the net level premium payments which would have been
paid on or before such time if the Policy provided for paid-up future benefits
after the payment of seven level annual premiums. A Policy may also become a
modified endowment contract after a material change. The determination of
whether a Policy is a modified endowment contract after a material change
generally depends upon the relationship of the Policy's death benefit and
Accumulation Value at the time of such change and the additional premium
payments made in the seven years following the material change. A Policy may
also become a modified endowment contract if the death benefit is reduced.
23
<PAGE>
A Policy issued in exchange for a modified endowment contract is subject to
tax treatment as a modified endowment contracts. However, we believe that a
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 to not make additional
payments in order to prevent a Policy from being treated as a modified endowment
contract.
o TAX TREATMENT OF LOANS and OTHER DISTRIBUTIONS
"Investment in the Policy" means:
o the aggregate amount of any premium payments or other consideration
paid for the Policy, minus
o the aggregate amount received under the Policy which is excluded from
gross income of the Owner (except that the amount of any loan from,
or secured by, a Policy that is a modified endowment contract, to the
extent such amount is excluded from gross income, will be
disregarded), plus
o the amount of any loan from, or secured by, a Policy that is a
modified endowment contract to the extent that such amount is
included in the Owner's gross income.
Depending on the circumstances, the exchange of a Policy, a change in the
Policy's death benefit Option, a policy loan, a withdrawal, a surrender, a
change in Ownership, or an assignment of the Policy may have federal income tax
consequences. In addition, federal, state and local transfer, and other tax
consequences of Ownership or receipt of distributions from a Policy depends on
the circumstances of each Owner or Beneficiary.
The tax consequences of distributions from, and loans taken from or secured
by, a Policy depend on whether the Policy is classified as a modified endowment
contract. Upon a surrender or lapse of the Policy or when benefits are paid at
the Policy's maturity date, if the amount received plus any loan amount exceeds
the total investment in the Policy, the excess will generally be treated as
ordinary income subject to tax, regardless of whether a Policy is or is not a
modified endowment contract.
Distributions from Policies Classified as Modified Endowment Contracts are
subject to the following tax rules:
(1) All distributions, including upon surrender and partial surrender, are
treated as ordinary income subject to tax up to the amount equal to the excess
(if any) of the Accumulation Value immediately before the distribution over the
investment in the Policy (described below) at such time.
(2) Loans from or secured by the Policy are treated as distributions and
taxed accordingly.
(3) A 10% additional income tax is imposed on the portion of any
distribution from, or loan taken from or secured by, the Policy that is included
in income except where the distribution or loan is made on or after the Owner
attains age 59 1/2, is attributable to the Owner's becoming disabled, or is
part of a series of substantially equal periodic payments for the life (or life
expectancy) of the Owner or the joint lives (or joint life expectancies) of the
Owner and the Owner's beneficiary.
DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED ENDOWMENT CONTRACTS
are generally treated as first recovering the "investment in the Policy" and
then, only after the return of all such "investment in the Policy," as
distributing taxable income. An exception to this general rule occurs in the
case of a decrease in the Policy's death benefit or any other change that
reduces benefits under the Policy in the first 9 years after the Policy is
issued and that results in a cash distribution to the Owner in order for the
Policy to continue complying with the Code's definition of life insurance. Such
a cash distribution will be taxed in whole or in part as ordinary income (to the
extent of any gain in the Policy) under rules prescribed in Section 7702 of the
Code.
Loans from, or secured by, a Policy that is not a modified endowment
contract are not treated as distributions. However, it is possible that loans in
effect after the eleventh Policy Year could be treated as distributions rather
than loans.
Neither distributions (including distributions upon surrender) nor loans
from, or secured by, a Policy that is not a modified endowment contract are
subject to the 10% additional income tax rule. If a Policy which is not a
modified endowment contract becomes a modified endowment contract, then any
distributions made from the Policy within two years prior to the change in such
status will become taxable in accordance with the modified endowment contract
rules discussed above.
24
<PAGE>
o OTHER POLICY OWNER TAX MATTERS
Interest Paid on Policy Loans generally is not tax deductible.
Aggregation of Modified Endowment Contracts. Pre-death distribution
(including a loan, partial withdrawal, collateral assignment or full surrender)
from a Policy that is treated as a modified endowment contract may require a
special aggregation to determine the amount of income on the Policy. 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.
Federal and state estate, inheritance and other tax consequences of
ownership or receipt of proceeds under the Policy depend upon your 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.
Diversification Requirements. Code Section 817(h) requires 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 the
Code. Our failure to comply with the diversification requirements could subject
you to immediate taxation on the incremental increases in Accumulation Value of
the Policy plus the cost of insurance protection for the year. However, we
believe the Policy complies fully with such requirements.
Owner control. 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.
Tax-advantaged arrangements. 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. Moreover, in recent years, Congress has adopted new
rules relating to corporate owned life insurance. Any business contemplating the
purchase of a new life insurance contract or a change in an existing contract
should consult a tax advisor.
- -----------------------------------------------------------
MISCELLANEOUS
o OUR MANAGEMENT
Directors*
Foggie, Samuel L. Banking and Finance Industry Executive
Hallett, Carol B. President, Air Transport Association of America
Heller, Jeffrey M. President & CEO, Electronic Data Systems
Osborne, Thomas W. University of Nebraska Foundation
Plunkett III, Hugh V. Attorney (Plunkett, Schwartz & Petersen)
Sampson, Richard J. Retired Group Insurance Executive of our Company
Straus, Oscar S. Investments; President, The Daniel and Florence
Guggenheim Foundation
Sturgeon, John A. President, Chief Operating Officer of our Company
Wayne, Michael A. Foundation and Cancer Institute Executive
Weekly, John W. Chairman of the Board and Chief Executive Officer of
our Company
25
<PAGE>
Senior Officers*
John W. Weekly Chairman of the Board, Chief Executive Officer
John A. Sturgeon President, Chief Operating Officer
G. Ronald Ames Executive Vice President (Small Group and Information
Services)
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)
Kimberly S. Harm Executive Vice President (Customer Services)
Lawrence F. Harr Executive Vice President (Executive Counsel)
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)
William C. Mattox Executive Vice President (Federal Government Affairs)
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.
o DISTRIBUTION OF THE POLICIES
Mutual of Omaha Investor Services, Inc. ("MOIS"), Mutual of Omaha Plaza,
Omaha, Nebraska 68175, is the principal underwriter of the Policy. Like us, MOIS
is an affiliate 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
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. We
may also pay other distribution expenses such as production incentive bonuses,
including non-cash awards. These distribution expenses do not result in any
additional charges under the Policies that are not described under the "Charges
and Fees" section of this prospectus.
o VOTING RIGHTS
As required by law, we will vote Series Fund shares held by the Variable
Account at regular and special shareholder meetings of the Series Funds pursuant
to instructions received from persons having voting interests in the portfolios.
If, however, applicable law or regulation or interpretation of them is amended,
and as a result we may vote Series Fund shares in our own right, we may do so.
The Series Funds may not hold routine annual Shareholder meetings.
As a Policy Owner, you have a voting interest in the Portfolios you are
invested in. The number of votes that you may instruct for a particular
Subaccount is determined by dividing your Accumulation Value in the Subaccount
by the net asset value per share of the corresponding Series Fund Portfolio.
Fractional shares are counted. You will receive proxy material, reports, and
other materials relating to the appropriate Portfolio in which you have voting
interests.
o YEAR 2000 ISSUES
Like all financial services providers, we use systems affected by Year 2000
transition issues and rely upon service providers, including investment
managers, whose own systems may also be affected. We are implementing a Year
2000 transition plan, and are confirming that our service providers are also
doing so. The resources that are being devoted to this effort are substantial.
It is difficult to predict with precision whether the amount of resources
ultimately devoted, or the outcome of these efforts, will have any negative
impact on us. However, as of the date of this prospectus, we do not believe Year
2000 transition implementation will harm purchaser of Policies, or our Policy
administration efforts.
o STATE REGULATION
We are 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 PROCEEDINGS
As of the date of this Prospectus, there are no legal proceedings affecting
the Variable Account, or that is material in relation to our total assets.
o INDEPENDENT AUDITORS
Our Financial Statements for the two years ended December 31, 1998, and of
United of Omaha Separate Account B for the year ended December 31, 1998 and for
the period from August 13, 1997 (inception) to December 31, 1997 included in
this Registration Statement have been audited by Deloitte & Touche LLP,
independent auditors, Omaha, Nebraska, as stated in their reports 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.
26
<PAGE>
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.
DO YOU HAVE QUESTIONS?
If you have questions about your Policy or this prospectus,
you may contact your agent or broker who gave this
prospectus to you, or you may contact us at: United of Omaha,
Variable Product Service, P.O. Box 8430, Omaha, Nebraska
68108-0430. Telephone 1-800-238-9354.
---------------------------------------------------
- -----------------------------------------------------------
ILLUSTRATIONS
DEATH BENEFITS, CASH SURRENDER VALUE AND ACCUMULATED PREMIUMS
The tables in this Section illustrate how the Policy operates: 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 based on an initial premium of $20,000. A male age 55, 65 and 75
with specified amounts of $52,000, $36,867, and $29,134, respectively, are
illustrated for this Policy. The Insureds are assumed to be preferred rate
class. The tables also include Accumulation Values, Cash Surrender Values and
Death Benefit amounts that reflect the 0.90% mortality and expense risk charge
deducted from Variable Account assets, the 0.24% monthly administrative charge,
the deduction of 0.39% of premium payments for state and federal taxes, and the
current and guaranteed cost of insurance charge. (In Oregon, this deduction does
not include state and municipality premium tax expenses.) 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 us or other companies.
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 nine years following each premium payment.
The amounts shown in the tables also take into account an average daily charge
equal to an annual charge 0.93% of the average daily net assets of the Series
Funds for the investment advisory fees and operating expenses incurred by the
Series Funds The gross annual investment return rates of 0%, 6%, and 12% on the
Fund's assets are equal to net annual investment return rates of -0.93%, 5.07%,
11.07%, 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
the initial premium of $20,000 were invested to earn interest, after taxes, of
5% per year, compounded annually.
Upon request, we 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.
27
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.07% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,732 19,832 52,000 21,515 19,615 52,000
2 22,505 23,613 21,713 52,000 23,159 21,259 52,000
3 23,153 25,658 23,758 52,000 24,947 23,047 52,000
4 24,310 27,879 26,079 52,000 26,896 25,096 52,000
5 25,526 30,293 28,793 52,000 29,028 27,528 52,000
6 26,802 32,916 31,716 52,000 31,363 30,163 52,000
7 28,142 35,766 34,866 52,000 33,928 33,028 52,000
8 29,549 38,863 38,263 52,000 36,755 36,155 52,000
9 31,027 42,256 41,956 52,398 39,880 39,580 52,000
10 32,578 45,988 45,988 56,106 43,349 43,349 52,886
11 34,207 50,266 50,266 60,319 47,347 47,347 56,817
12 35,917 54,941 54,941 65,380 51,704 51,704 61,527
13 37,713 60,052 60,052 70,861 56,450 56,450 66,611
14 39,599 65,637 65,637 76,796 61,621 61,621 72,097
15 41,579 71,743 71,743 83,221 67,256 67,256 78,017
16 43,657 78,416 78,416 90,178 73,393 73,393 84,402
17 45,840 85,709 85,709 96,852 80,115 80,115 90,530
18 48,132 93,682 93,682 103,987 87,486 87,486 97,110
19 50,539 102,395 102,395 111,611 95,586 95,586 104,189
20 53,066 111,994 111,994 119,834 104,509 104,509 111,825
25 67,727 175,493 175,493 184,267 163,469 163,469 171,643
35 110,320 427,088 427,088 448,442 385,108 385,108 404,364
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
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. Theses 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.
28
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.07% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,550 18,650 52,000 20,338 18,438 52,000
2 22,505 21,116 19,216 52,000 20,660 18,760 52,000
3 23,153 21,697 19,797 52,000 20,962 19,062 52,000
4 24,310 22,294 20,494 52,000 21,243 19,443 52,000
5 25,526 22,907 21,407 52,000 21,498 19,998 52,000
6 26,802 23,538 22,338 52,000 21,724 20,524 52,000
7 28,142 24,185 23,285 52,000 21,912 21,012 52,000
8 29,549 24,851 24,251 52,000 22,057 21,457 52,000
9 31,027 25,535 25,235 52,000 22,148 21,848 52,000
10 32,578 26,237 26,237 52,000 22,178 22,178 52,000
11 34,207 27,092 27,092 52,000 22,227 22,227 52,000
12 35,917 27,974 27,974 52,000 22,202 22,202 52,000
13 37,713 28,885 28,885 52,000 22,093 22,093 52,000
14 39,599 29,825 29,825 52,000 21,887 21,887 52,000
15 41,579 30,796 30,796 52,000 21,566 21,566 52,000
16 43,657 31,799 31,799 52,000 21,106 21,106 52,000
17 45,840 32,835 32,835 52,000 20,477 20,477 52,000
18 48,132 33,904 33,904 52,000 19,638 19,638 52,000
19 50,539 35,008 35,008 52,000 18,540 18,540 52,000
20 53,066 36,148 36,148 52,000 17,130 17,130 52,000
25 67,727 42,429 42,429 52,000 2,562 2,562 52,000
35 110,320 58,931 58,931 61,878 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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.
29
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.93% NET)
Male issue age 55 Initial Premium $20,000
Preferred Class Face Amount $52,000
Current Charges * Guaranteed Charges **
---------------------------------------- -------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,377 17,477 52,000 19,162 17,262 52,000
2 22,505 18,773 16,873 52,000 18,302 16,402 52,000
3 23,153 18,188 16,288 52,000 17,417 15,517 52,000
4 24,310 17,621 15,821 52,000 16,502 14,702 52,000
5 25,526 17,072 15,572 52,000 15,552 14,052 52,000
6 26,802 16,540 15,340 52,000 14,560 13,360 52,000
7 28,142 16,025 15,125 52,000 13,518 12,618 52,000
8 29,549 15,526 14,926 52,000 12,413 11,813 52,000
9 31,027 15,042 14,742 52,000 11,235 10,935 52,000
10 32,578 14,573 14,573 52,000 9,969 9,969 52,000
11 34,207 14,188 14,188 52,000 8,641 8,641 52,000
12 35,917 13,814 13,814 52,000 7,194 7,194 52,000
13 37,713 13,449 13,449 52,000 5,613 5,613 52,000
14 39,599 13,094 13,094 52,000 3,880 3,880 52,000
15 41,579 12,748 12,748 52,000 1,966 1,966 52,000
16 43,657 12,412 12,412 52,000 *** *** ***
17 45,840 12,084 12,084 52,000 *** *** ***
18 48,132 11,765 11,765 52,000 *** *** ***
19 50,539 11,454 11,454 52,000 *** *** ***
20 53,066 11,152 11,152 52,000 *** *** ***
25 67,727 9,756 9,756 52,000 *** *** ***
35 110,320 7,465 7,465 52,000 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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.
30
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.07% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,732 19,832 36,867 21,421 19,521 36,867
2 22,505 23,613 21,713 36,867 22,978 21,078 36,867
3 23,153 25,658 23,758 36,867 24,694 22,794 36,867
4 24,310 27,879 26,079 36,867 26,597 24,797 36,867
5 25,526 30,293 28,793 36,867 28,720 27,220 36,867
6 26,802 32,925 31,725 37,864 31,104 29,904 36,867
7 28,142 35,813 34,913 40,468 33,792 32,892 38,184
8 29,549 38,969 38,369 43,255 36,756 36,156 40,800
9 31,027 42,425 42,125 46,244 40,002 39,702 43,602
10 32,578 46,220 46,220 49,456 43,565 43,565 46,614
11 34,207 50,599 50,599 53,129 47,675 47,675 50,059
12 35,917 55,375 55,375 58,143 52,156 52,156 54,763
13 37,713 60,580 60,580 63,609 57,038 57,038 59,890
14 39,599 66,252 66,252 69,564 62,355 62,355 65,473
15 41,579 72,426 72,426 76,048 68,143 68,143 71,550
16 43,657 79,163 79,163 83,121 74,436 74,436 78,157
17 45,840 86,526 86,526 90,853 81,272 81,272 85,336
18 48,132 94,575 94,575 99,303 88,690 88,690 93,124
19 50,539 103,371 103,371 108,540 96,728 96,728 101,564
20 53,066 112,986 112,986 118,636 105,428 105,428 110,700
25 67,727 176,261 176,261 185,074 160,533 160,533 168,560
35 110,320 433,749 433,749 433,749 392,431 392,431 392,431
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
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. Theses 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.
31
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.07% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,550 18,650 36,867 20,239 18,339 36,867
2 22,505 21,116 19,216 36,867 20,450 18,550 36,867
3 23,153 21,697 19,797 36,867 20,630 18,730 36,867
4 24,310 22,294 20,494 36,867 20,774 18,974 36,867
5 25,526 22,907 21,407 36,867 20,876 19,376 36,867
6 26,802 23,538 22,338 36,867 20,926 19,726 36,867
7 28,142 24,185 23,285 36,867 20,912 20,012 36,867
8 29,549 24,851 24,251 36,867 20,820 20,220 36,867
9 31,027 25,535 25,235 36,867 20,632 20,332 36,867
10 32,578 26,237 26,237 36,867 20,326 20,326 36,867
11 34,207 27,092 27,092 36,867 19,965 19,965 36,867
12 35,917 27,974 27,974 36,867 19,448 19,448 36,867
13 37,713 28,885 28,885 36,867 18,745 18,745 36,867
14 39,599 29,825 29,825 36,867 17,816 17,816 36,867
15 41,579 30,796 30,796 36,867 16,609 16,609 36,867
16 43,657 31,799 31,799 36,867 15,048 15,048 36,867
17 45,840 32,835 32,835 36,867 13,028 13,028 36,867
18 48,132 33,904 33,904 36,867 10,405 10,405 36,867
19 50,539 35,008 35,008 36,867 6,982 6,982 36,867
20 53,066 36,148 36,148 37,955 2,495 2,495 36,867
25 67,727 42,429 42,429 44,551 *** *** ***
35 110,320 60,346 60,346 60,346 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-.93% NET)
Male issue age 65 Initial Premium $20,000
Preferred Class Face Amount $36,867
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,377 17,477 36,867 19,057 17,157 36,867
2 22,505 18,773 16,873 36,867 18,067 16,167 36,867
3 23,153 18,188 16,288 36,867 17,021 15,121 36,867
4 24,310 17,621 15,821 36,867 15,908 14,108 36,867
5 25,526 17,072 15,572 36,867 14,717 13,217 36,867
6 26,802 16,540 15,340 36,867 13,428 12,228 36,867
7 28,142 16,025 15,125 36,867 12,019 11,119 36,867
8 29,549 15,526 14,926 36,867 10,461 9,861 36,867
9 31,027 15,042 14,742 36,867 8,718 8,418 36,867
10 32,578 14,573 14,573 36,867 6,752 6,752 36,867
11 34,207 14,188 14,188 36,867 4,541 4,541 36,867
12 35,917 13,814 13,814 36,867 2,005 2,005 36,867
13 37,713 13,449 13,449 36,867 *** *** ***
14 39,599 13,094 13,094 36,867 *** *** ***
15 41,579 12,748 12,748 36,867 *** *** ***
16 43,657 12,412 12,412 36,867 *** *** ***
17 45,840 12,084 12,084 36,867 *** *** ***
18 48,132 11,765 11,765 36,867 *** *** ***
19 50,539 11,454 11,454 36,867 *** *** ***
20 53,066 11,152 11,152 36,867 *** *** ***
25 67,727 9,756 9,756 36,867 *** *** ***
35 110,320 7,465 7,465 36,867 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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.
33
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.07% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
- -------- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 21,724 19,824 29,134 21,268 19,368 29,134
2 22,505 23,596 21,696 29,134 22,700 20,800 29,134
3 23,153 25,630 23,730 29,134 24,345 22,445 29,134
4 24,310 27,851 26,051 29,243 26,263 24,463 29,134
5 25,526 30,316 28,816 31,832 28,527 27,027 29,953
6 26,802 32,986 31,786 34,635 31,039 29,839 32,591
7 28,142 35,873 34,973 37,667 33,756 32,856 35,444
8 29,549 38,993 38,393 40,943 36,692 36,092 38,526
9 31,027 42,360 42,060 44,478 39,860 39,560 41,853
10 32,578 46,022 46,022 48,323 43,273 43,273 45,437
11 34,207 50,285 50,285 52,799 47,135 47,135 49,492
12 35,917 54,942 54,942 57,689 51,306 51,306 53,872
13 37,713 60,031 60,031 63,033 55,808 55,808 58,599
14 39,599 65,591 65,591 68,871 60,663 60,663 63,696
15 41,579 71,666 71,666 75,250 65,891 65,891 69,186
16 43,657 78,304 78,304 82,219 71,517 71,517 75,093
17 45,840 85,557 85,557 88,979 77,751 77,751 80,861
18 48,132 93,481 93,481 96,285 84,690 84,690 87,231
19 50,539 102,139 102,139 104,182 92,450 92,450 94,299
20 53,066 111,779 111,779 112,897 101,175 101,175 102,187
25 67,727 177,957 177,957 177,957 161,075 161,075 161,075
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
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. Theses 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.
34
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.07% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 20,550 18,650 29,134 20,069 18,169 29,134
2 22,505 21,116 19,216 29,134 20,083 18,183 29,134
3 23,153 21,697 19,797 29,134 20,034 18,134 29,134
4 24,310 22,294 20,494 29,134 19,913 18,113 29,134
5 25,526 22,907 21,407 29,134 19,702 18,202 29,134
6 26,802 23,538 22,338 29,134 19,378 18,178 29,134
7 28,142 24,185 23,285 29,134 18,909 18,009 29,134
8 29,549 24,851 24,251 29,134 18,250 17,650 29,134
9 31,027 25,535 25,235 29,134 17,340 17,040 29,134
10 32,578 26,237 26,237 29,134 16,100 16,100 29,134
11 34,207 27,092 27,092 29,134 14,489 14,489 29,134
12 35,917 27,974 27,974 29,372 12,303 12,303 29,134
13 37,713 28,885 28,885 30,329 9,338 9,338 29,134
14 39,599 29,825 29,825 31,317 5,305 5,305 29,134
15 41,579 30,796 30,796 32,336 *** *** ***
16 43,657 31,799 31,799 33,389 *** *** ***
17 45,840 32,835 32,835 34,148 *** *** ***
18 48,132 33,904 33,904 34,921 *** *** ***
19 50,539 35,011 35,011 35,711 *** *** ***
20 53,066 36,246 36,246 36,608 *** *** ***
25 67,727 43,714 43,714 43,714 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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.
35
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.93% NET)
Male issue age 75 Initial Premium $20,000
Preferred Class Face Amount $29,134
Current Charges * Guaranteed Charges **
------------------------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Contract at 5% Account Surrender Death Account Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 21,000 19,377 17,477 29,134 18,870 16,970 29,134
2 22,505 18,773 16,873 29,134 17,620 15,720 29,134
3 23,153 18,188 16,288 29,134 16,224 14,324 29,134
4 24,310 17,621 15,821 29,134 14,652 12,852 29,134
5 25,526 17,072 15,572 29,134 12,861 11,361 29,134
6 26,802 16,540 15,340 29,134 10,796 9,596 29,134
7 28,142 16,025 15,125 29,134 8,380 7,480 29,134
8 29,549 15,526 14,926 29,134 5,508 4,908 29,134
9 31,027 15,042 14,742 29,134 2,042 1,742 29,134
10 32,578 14,573 14,573 29,134 *** *** ***
11 34,207 14,188 14,188 29,134 *** *** ***
12 35,917 13,814 13,814 29,134 *** *** ***
13 37,713 13,449 13,449 29,134 *** *** ***
14 39,599 13,094 13,094 29,134 *** *** ***
15 41,579 12,748 12,748 29,134 *** *** ***
16 43,657 12,412 12,412 29,134 *** *** ***
17 45,840 12,084 12,084 29,134 *** *** ***
18 48,132 11,765 11,765 29,134 *** *** ***
19 50,539 11,454 11,454 29,134 *** *** ***
20 53,066 11,152 11,152 29,134 *** *** ***
25 67,727 9,756 9,756 29,134 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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. Theses 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.
36
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS annual INVESTMENT RETURN OF 12% (11.07% NET)
Male issue age 65 Initial Premium $20,000 Standard Class
Specified Amount $36,867
Current Charges * Guaranteed Charges **
----------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Policy at 5% Interest Accum. Surrender Death Accum. Surrender Death
Year Per Year Value Value Benefit Value Value Benefit
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 21,594 19,694 36,867 21,421 19,521 36,867
2 22,505 23,315 21,415 36,867 22,978 21,078 36,867
3 23,153 25,173 23,273 36,867 24,694 22,794 36,867
4 24,310 27,179 25,379 36,867 26,597 24,797 36,867
5 25,526 29,383 27,883 36,867 28,720 27,220 36,867
6 26,802 31,860 30,660 36,867 31,104 29,904 36,867
7 28,142 34,634 33,734 39,136 33,792 32,892 38,184
8 29,549 37,673 37,073 41,817 36,756 36,156 40,800
9 31,027 40,999 40,699 44,689 40,002 39,702 43,602
10 32,578 44,651 44,651 47,777 43,565 43,565 46,614
11 34,207 48,864 48,864 51,307 47,675 47,675 50,059
12 35,917 53,456 53,456 56,129 52,156 52,156 54,763
13 37,713 58,460 58,460 61,383 57,038 57,038 59,890
14 39,599 63,910 63,910 67,105 62,355 62,355 65,473
15 41,579 69,841 69,841 73,333 68,143 68,143 71,550
16 43,657 76,291 76,291 80,106 74,436 74,436 78,157
17 45,840 83,298 83,298 87,463 81,272 81,272 85,336
18 48,132 90,901 90,901 95,446 88,690 88,690 93,124
19 50,539 99,139 99,139 104,096 96,728 96,728 101,564
20 53,066 108,057 108,057 113,459 105,428 105,428 110,700
25 67,727 165,476 165,476 173,750 160,533 160,533 168,560
35 110,320 406,477 406,477 406,477 392,431 392,431 392,431
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
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.
37
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS annual INVESTMENT RETURN OF 6% (5.07% NET)
Male issue age 65 Initial Premium $20,000 Standard Class
Specified Amount $36,867
Current Charges * Guaranteed Charges **
----------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Policy at 5% Accum. Surrender Death Accum. Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 20,427 18,527 36,867 20,239 18,339 36,867
2 22,505 20,864 18,964 36,867 20,450 18,550 36,867
3 23,153 21,309 19,409 36,867 20,630 18,730 36,867
4 24,310 21,765 19,965 36,867 20,774 18,974 36,867
5 25,526 22,230 20,730 36,867 20,876 19,376 36,867
6 26,802 22,705 21,505 36,867 20,926 19,726 36,867
7 28,142 23,190 22,290 36,867 20,912 20,012 36,867
8 29,549 23,685 23,085 36,867 20,820 20,220 36,867
9 31,027 24,191 23,891 36,867 20,632 20,332 36,867
10 32,578 24,708 24,708 36,867 20,326 20,326 36,867
11 34,207 25,426 25,426 36,867 19,965 19,965 36,867
12 35,917 26,165 26,165 36,867 19,448 19,448 36,867
13 37,713 26,925 26,925 36,867 18,745 18,745 36,867
14 39,599 27,707 27,707 36,867 17,816 17,816 36,867
15 41,579 28,512 28,512 36,867 16,609 16,609 36,867
16 43,657 29,340 29,340 36,867 15,048 15,048 36,867
17 45,840 30,193 30,193 36,867 13,028 13,028 36,867
18 48,132 31,070 31,070 36,867 10,405 10,405 36,867
19 50,539 31,973 31,973 36,867 6,982 6,982 36,867
20 53,066 32,901 32,901 36,867 2,495 2,495 36,867
25 67,727 37,967 37,967 39,865 *** *** ***
35 110,320 53,414 53,414 53,414 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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.
38
<PAGE>
<TABLE>
<CAPTION>
United of Omaha Life Insurance Company
Modified Single Premium Variable Life Insurance
HYPOTHETICAL ILLUSTRATION
ASSUMING HYPOTHETICAL GROSS annual INVESTMENT RETURN OF 0% (-.93% NET)
Male issue age 65 Initial Premium $20,000
Standard Class Specified Amount $36,867
Current Charges * Guaranteed Charges **
----------------------------- -----------------------------------
Premiums
End of Accumulated Cash Cash
Policy at 5% Accum. Surrender Death Accum. Surrender Death
Year Interest Value Value Benefit Value Value Benefit
Per Year
---- -------- ----- ----- ------- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 $21,000 19,261 17,361 36,867 19,057 17,157 36,867
2 22,505 18,549 16,649 36,867 18,067 16,167 36,867
3 23,153 17,863 15,963 36,867 17,021 15,121 36,867
4 24,310 17,203 15,403 36,867 15,908 14,108 36,867
5 25,526 16,567 15,067 36,867 14,717 13,217 36,867
6 26,802 15,955 14,755 36,867 13,428 12,228 36,867
7 28,142 15,365 14,465 36,867 12,019 11,119 36,867
8 29,549 14,797 14,197 36,867 10,461 9,861 36,867
9 31,027 14,250 13,950 36,867 8,718 8,418 36,867
10 32,578 13,724 13,724 36,867 6,752 6,752 36,867
11 34,207 13,316 13,316 36,867 4,541 4,541 36,867
12 35,917 12,920 12,920 36,867 2,005 2,005 36,867
13 37,713 12,536 12,536 36,867 *** *** ***
14 39,599 12,164 12,164 36,867 *** *** ***
15 41,579 11,803 11,803 36,867 *** *** ***
16 43,657 11,452 11,452 36,867 *** *** ***
17 45,840 11,112 11,112 36,867 *** *** ***
18 48,132 10,782 10,782 36,867 *** *** ***
19 50,539 10,461 10,461 36,867 *** *** ***
20 53,066 10,150 10,150 36,867 *** *** ***
25 67,727 8,729 8,729 36,867 *** *** ***
35 110,320 6,457 6,457 36,867 *** *** ***
</TABLE>
* These values reflect investment results using current cost of insurance rates
and expense charges.
** These values reflect investment results using guaranteed cost of insurance
rates and expense charges.
*** The Policy is lapsed.
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.
39
<PAGE>
-----------------------------------------------------------
FINANCIAL STATEMENTS
[To be included by a subsequent Amendment to the Registration before this
Amended Registration becomes effective.]
<PAGE>
II-
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)
Kenneth W. Reitz, Esquire (included in Exhibit 2)
Robert E. Hupf, F.S.A., M.A.A.A. (included in Exhibit 6)
II-1
<PAGE>
The following exhibits:
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 ULTRA VARIABLE LIFE modified single
premium variable life insurance policy. ***
(b) Form of Riders to the Policy. *
(c) Systematic Transfer Enrollment Program Endorsement 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. **
(h) Participation Agreement by and between United of Omaha Life
Insurance Company and Morgan Stanley Universal Funds, et. al.****
(9) None.
II-2
<PAGE>
(10) Form of Application for the United of Omaha Life Insurance
Company ULTRA VARIABLE LIFE Modified Single 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. 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 Registration Statement for United of Omaha
Separate Account B filed on June 20, 1997 (File No. 333-18881).
*** Incorporated by Reference to the Registration Statement for United of Omaha
Separate Account B filed on April 16, 1998 (File No. 333-18881).
# To be filed by a Post-Effective Amendment filed before the effective date of
this Amended Registration.
II-3
<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 January 27, 1999.
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, 1/27/99
John W. Weekly Chief Executive Officer
_____*____________________ Director, President, 1/27/99
John A. Sturgeon Chief Operating Officer
_____*____________________ General Comptroller 1/27/99
Tommie Thompson (Principal Financial Officer, and
Principal Accounting Officer)
_____*____________________ Director 1/27/99
-
Samuel L. Foggie
_____*___________________ Director 1/27/99
-
John D. Minton
_____*__________________ Director 1/27/99
-
Hugh V. Plunkett, III
_____*___________________ Director 1/27/99
-
Richard J. Sampson
_____*___________________ Director 1/27/99
-
Oscar S. Straus
______*__________________ Director 1/27/99
Michael A. Wayne
By: /s/ Kenneth W. Reitz Date: January 27, 1999
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.