As filed with the Securities and Exchange Commission on February 28, 2000
1933 Act Registration No. 333-18881
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
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:
Michael E. Huss, Esquire
Mutual of Omaha Companies
Mutual of Omaha Plaza, 3-Law
Omaha, Nebraska 68175-1008
Internet: [email protected]
Individual Modified Single Premium Variable Life Insurance Policy
(Title of securities being registered)
It is proposed that this filing will become effective (check appropriate box):
[ ] Immediately upon filing pursuant to paragraph (b).
[ ] On (date) pursuant to paragraph (b).
[ ] 60 days after filing pursuant to paragraph (a)(1).
[x] On May 1, 2000 pursuant to paragraph (a)(i) of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
[ ] Check box if it is proposed that this filing will become
effective on (date) at (time) pursuant to Rule 487.
------
<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 Our 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
46 Variable Investment Options; Captions referenced under
Items 10(c), (d), and (e) above
47 Inapplicable
48 About Us
49 Inapplicable
50 Variable Investment Options
51 Cover Page, Introduction and Summary, Important Policy
Provisions, Tax Matters, Policy Distributions
52 Tax Matters
53 Tax Matters
54 Inapplicable
55 Inapplicable
59 Financial Statements
<PAGE>
UNITED OF OMAHA
A MUTUAL OF OMAHA COMPANY LOGO
PROSPECTUS: May 1, 2000
ULTRA VARIABLE LIFE
Individual Modified Single Premium
Variable Universal Life Insurance
This prospectus describes ULTRA VARIABLE LIFE, a variable universal life
insurance policy offered by UNITED OF OMAHA LIFE INSURANCE COMPANY. The minimum
initial premium is $20,000.
<TABLE>
<CAPTION>
<S> <C>
The Policy includes 30 variable
options (where you have the
The investment portfolios offered investment risk) with investment
through the Policy may have names that portfolios from:
are nearly the same or similar to the
names of retail mutual funds. However, ALGER AMERICAN FUND
these investment portfolios are not the DUETSCHE ASSET MANAGEMENT VIT FUNDS
same as those retail mutual funds, even FEDERATED'S INSURANCE SERIES
though they have similar names and may FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND
have similar characteristics and the AND VARIABLE INSURACE PRODUCTS FUND II
same managers. The investment MFS VARIABLE INSURANCE TRUST
performance of these investment MORGAN STANLEY DEAN WITTER UNIVERSAL FUNDS
portfolios is not necessarily related to PIONEER VARIABLE CONTRACTS TRUST
the performance of the retail mutual SCUDDER VARIABLE LIFE INVESTMENT FUND
funds. The investment portfolios are T. ROWE PRICE EQUITY SERIES, FIXED INCOME
described in separate prospectuses that SERIES AND INTERNATIONAL SERIES
accompany this prospectus.
and two fixed rate options (where we have the
investment risk).
</TABLE>
The variable options are not direct investments in mutual fund shares, but
are offered through Subaccounts of United of Omaha Separate Account B. THE VALUE
OF YOUR POLICY WILL GO UP OR DOWN BASED ON THE INVESTMENT PERFORMANCE OF THE
VARIABLE OPTIONS THAT YOU CHOOSE. THERE IS NO MINIMUM GUARANTEED CASH SURRENDER
VALUE FOR ANY AMOUNTS YOU ALLOCATE TO THE VARIABLE OPTIONS. THE AMOUNT OF THE
DEATH BENEFIT CAN ALSO VARY AS A RESULT OF INVESTMENT PERFORMANCE.
IN ALMOST ALL CASES, THE POLICY WILL BE A MODIFIED ENDOWMENT CONTRACT FOR
FEDERAL INCOME TAX PURPOSES.
Please Read This Prospectus Carefully. It
provides information you should consider before
investing in a Policy. Keep this prospectus and
the other prospectuses for the investment
portfolios for future reference.
The Securities and Exchange Commission
("SEC") maintains an internet web site
(HTTP://WWW.SEC.GOV) that contains more
information about us and the Policy. You may
also review and copy our SEC registration of the
Policy at the SEC's Public Reference Room in
Washington, D.C. (call the SEC at 1-800-SEC-0330
for details and public hours).
THE SEC DOES NOT PASS UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS, AND HAS NOT APPROVED OR DISAPPROVED THE POLICY.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
REMEMBER THAT THE POLICY AND THE INVESTMENT PORTFOLIOS:
o ARE SUBJECT TO RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL
o ARE NOT BANK DEPOSITS
o ARE NOT GOVERNMENT INSURED
o ARE NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY
o MAY NOT ACHIEVE THEIR GOALS
UNITED OF OMAHA, Variable Product Services, P. O. Box 8430, Omaha, Nebraska
68103-0430 1-800-238-9354
<PAGE>
- -----------------------------------------------------------
CONTENTS
PAGE(S)
--------
DEFINITIONS 3
---------------------------------------------------------- --------
INTRODUCTION AND SUMMARY 4-6
Comparison to Other Policies and Investments
How the Policy Operates
---------------------------------------------------------- --------
ABOUT US 7
---------------------------------------------------------- --------
INVESTMENT OPTIONS 7-14
Variable Investment Options
Fixed Rate Options
Transfers
Dollar Cost Averaging
STEP Program
Asset Allocation Program
Rebalancing Program
---------------------------------------------------------- --------
IMPORTANT POLICY PROVISIONS 15-18
Policy Application and
Issuance Reinstatement
Lapse and Grace Period Maturity Date
Misstatement of Age or Coverage Beyond
Sex Maturity
Suicide Delay of Payments
Incontestability Minor Owner or
Telephone Transactions Beneficiary
------------------------------ --------------------------- --------
EXPENSES 18-22
Monthly Deduction Surrender Charge
Transfer Charge
Series Fund Charges
------------------------------ --------------------------- --------
POLICY DISTRIBUTIONS 23-26
Policy Loans Death Benefit
Surrender Payment of Proceeds
Partial Withdrawals
------------------------------ --------------------------- --------
TAX MATTERS 26-29
Life Insurance Other Policy Owner
Qualification Tax Matters
Tax Treatment of Loans
and Other Distributions
------------------------------ --------
MISCELLANEOUS 29-30
Our Management Legal Proceedings
Distribution of the Independent Auditors
Policies Reports to You
Voting Rights Do You Have Questions?
State Regulation
------------------------------ --------------------------- --------
ILLUSTRATIONS 31-43
---------------------------------------------------------- --------
FINANCIAL STATEMENTS 44-
2
<PAGE>
- -----------------------------------------------------------
DEFINITIONS
ACCUMULATION VALUE is the dollar value of all amounts accumulated under the
Policy (in both the variable investment options and the fixed investment
options).
ALLOCATION DATE is the first Business Day following the completion of your
"right to examine period" for the initial premium payment, and our approval of
any subsequent premium payment.
BENEFICIARY is the person(s) or other legal entity who receives the death
benefit of the Policy, if any, upon the insured's death.
BUSINESS DAY is each day that the New York Stock Exchange is open for trading.
CASH SURRENDER VALUE is the Accumulation Value, less any Policy loans, unpaid
loan interest, and any applicable surrender charge.
LOAN ACCOUNT is an account we maintain for your Policy if you have a Policy loan
outstanding. The Loan Account is credited with interest and is not affected by
the experience of the Variable Account. The Loan
Account is part of our general account.
MONTHLY DEDUCTION is a monthly charge which includes a cost of insurance charge
and an expense charge.
OWNER is you -- the person(s) who may exercise all rights and privileges under
the Policy.
POLICY is the ULTRA VARIABLE LIFE POLICY, a modified single premium variable
universal life insurance policy offered by us through this Prospectus. POLICY
YEAR/MONTH/ANNIVERSARY are measured from respective anniversary dates of the
date of issue of the Policy.
SERIES FUNDS are diversified, open-end investment management companies in which
the Variable Account invests.
SUBACCOUNT is a segregated account within the Variable Account investing in a
specified investment portfolio of one of the Series Funds.
US, WE, OUR, UNITED OF OMAHA is United of Omaha Life Insurance Company.
VALUATION PERIOD is the period commencing at the close of business of the New
York Stock Exchange on each Business Day and ending at the close of business on
the next succeeding Business Day.
VARIABLE ACCOUNT is United of Omaha Separate Account B, a separate account
maintained by us.
WRITTEN NOTICE -is a written notice, signed by you, that gives us the
information we require and is received at United of Omaha, Variable Product
Services, P.O. Box 8430, Omaha, Nebraska 68103-0430.
3
<PAGE>
- -----------------------------------------------------------
THIS PROSPECTUS MAY ONLY BE USED TO OFFER THE POLICY WHERE THE POLICY
MAY LAWFULLY BE SOLD. NO ONE IS AUTHORIZED TO GIVE INFORMATION OR MAKE
REPRESENTATIONS ABOUT THE POLICY THAT ISN'T IN THE PROSPECTUS; IF ANYONE DOES
SO, YOU SHOULD NOT RELY UPON IT AS BEING ACCURATE OR ADEQUATE.
THIS PROSPECTUS GENERALLY DESCRIBES ONLY THE VARIABLE INVESTMENT
OPTIONS, EXCEPT WHEN THE FIXED RATE OPTIONS ARE SPECIFICALLY MENTIONED.
<PAGE>
- -----------------------------------------------------------
INTRODUCTION AND SUMMARY
THIS INTRODUCTION AND SUMMARY BRIEFLY NOTES SOME OF THE IMPORTANT THINGS
ABOUT THE POLICY, BUT IT IS NOT A COMPLETE DESCRIPTION OF THE POLICY. THE REST
OF THIS PROSPECTUS CONTAINS MORE COMPLETE INFORMATION, AND YOU SHOULD READ THE
ENTIRE PROSPECTUS CAREFULLY.
The ULTRA VARIABLE LIFE Policy described in this prospectus is a life
insurance Policy issued by United of Omaha Life Insurance Company. The Policy
pays a death benefit upon the insured's death, and a Cash Surrender Value is
available if you surrender the Policy. The insured person cannot be over 90 when
we issue the Policy. You have flexibility under the Policy; within certain
limits, you can make additional premium payments beyond the required single
premium and you can transfer amounts among the investment options. The minimum
initial premium is $20,000.
The Policy is a variable life Policy, which means that you can allocate your
premium to up to 30 different variable investment options, where you can gain or
lose money on your investment, and up to two fixed rate options, where we
guarantee you will earn a fixed rate of interest. The death benefit can also
vary up or down to reflect that investment experience.
There is no guaranteed minimum Accumulation Value. Regardless of whether you
pay the required minimum premium or more, the Policy could lapse if the
Accumulation Value is not sufficient to pay the Monthly Deduction Amount.
However, the Policy will not lapse during the death benefit guarantee period, if
you do not take out any Policy loans.
The variable investment options are not direct investments in mutual funds,
but are Subaccounts of the Variable Account. Each Subaccount in turn invests in
a particular investment portfolio. You may transfer your Accumulation Value
among the Subaccounts and between the Subaccounts and the fixed rate options,
subject to certain restrictions (in particular, restrictions on transfers out of
the fixed rate options).
You can surrender the Policy completely, make a partial cash withdrawal, and
take out a Policy loan, subject to certain restrictions. However, surrenders,
withdrawals and loans may be taxable and subject to a penalty tax.
BUYING THE POLICY MIGHT NOT BE A GOOD WAY OF REPLACING EXISTING LIFE
INSURANCE, ESPECIALLY IF YOU ALREADY OWN A SINGLE PREMIUM VARIABLE LIFE
INSURANCE POLICY.
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 vary as a result of the investment experience of the variable
investment options that you select. The Accumulation Value will always vary in
accordance with that investment experience.
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.
COMPARED TO MUTUAL FUNDS. The Policy is designed to provide life insurance
protection. Although the underlying investment portfolios operate like mutual
funds and have the same investment risks, in many ways the Policy differs from
mutual fund investments. The main differences are:
o The Policy provides a death benefit based on the life of the insured.
o The Policy can lapse with no value, if your Accumulation Value is not enough
to pay a Monthly Deduction Amount.
o Insurance-related charges not associated with mutual fund investments are
deducted from the value of the Policy.
o We, not you, own the shares of the underlying investment portfolios. You
have interests in our Subaccounts that invest in the investment portfolios
that you select.
o Premiums paid are held in the Federated Prime Money Fund II portfolio until
the Allocation Date. Only then is premium invested in the other variable
investment options that you elected.
o Federal income tax liability on any earnings is deferred until you receive a
distribution from the Policy.
o Transfers from one underlying investment portfolio to another are
accomplished without tax liability.
o Premature withdrawals may be subject to a 10% federal tax penalty. Policy
earnings that would be treated as capital gains in a mutual fund are
treated as ordinary income, although (a) such earnings are exempt from
taxation if received as a death benefit, and (b) taxation is deferred until
such earnings are distributed.
4
<PAGE>
The Policy probably is a "modified endowment contract." If it is, then (a)
there will be a 10% penalty tax on withdrawals before age 59 1/2; (b)
withdrawals would be deemed to come from earnings first (taxable), then
from your investment; and (c) loans will be treated as withdrawals.
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 vary
by state, and are 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.
----------------------------------------------------------------
PURCHASE PAYMENT FLOW CHART
----------------------------------------------------------------
PREMIUM
o The minimum initial premium required is $20,000.
o Payments in addition to the initial premium may be made, within
limits.
o Additional premiums may be required to prevent the Policy from
lapsing. Payment of the initial premium may NOT be enough to keep
the Policy from lapsing, except in some circumstances during the
death benefit guaranty period.
----------------------------------------------------------------
------------------------------------------------------------------
DEDUCTIONS BEFORE ALLOCATING PREMIUM
None.
------------------------------------------------------------------
-------------------------------------------------------------------------------
INVESTMENT OF PREMIUM
o You direct the allocation of all premiums among the 30
Subaccounts of the Variable Account, the fixed account and the
systematic transfer account (the systematic transfer account is
available only for the initial premium payment). Each Subaccount
invests in a corresponding investment portfolio.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CHARGES DEDUCTED FROM ASSETS
o We take a Monthly Deduction Amount out of your Accumulation Value (the
annual rates set forth below are calculated as a percentage of
Accumulation Value) composed of:
- 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, the Policy Accumulation Value and the duration
of the Policy); and
- 1.53% expense charge during Policy Years 1 through 10; 1.14% after
Policy Year 10.
o $10 fee for transfers among the Subaccounts and the fixed account
(first 12 transfers per Policy Year free).Investment advisory fees and
operating expenses are deducted from the assets of each investment
portfolio.
-----------------------------------------------------------------------------
5
<PAGE>
--------------------------------------------------------------------------
ACCUMULATION VALUE
Your Accumulation Value is equal to your premiums, as adjusted up or down
each Business Day to reflect the Subaccounts' investment experience,
earnings on amounts you have invested in the fixed account and the
systematic transfer account, charges deducted, and other Policy
transactions (such as transfers, loans 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>
<S> <C> <C>
ACCUMULATION VALUE BENEFITS DEATH BENEFIT
o After the first Policy Year (at any time in Indiana), o Received income tax free to
you can take loans for amounts up to 90% (100% in Beneficiary.
Florida) of the Cash Surrender Value (less loan interest o Available as lump sum or under
to the end of the Policy Year and a sufficient Monthly a variety of payout options.
Deduction Amount to keep the Policy in force for
at least one month) at a net annual interest rate charge of o Greater of:
1.5%. - Initial specified amount of
In certain situations, preferred loans are available with a insurance coverage plus any
net interest rate charge of 0%. later increase and less any
o You can surrender the Policy in full at any time for later decrease; or
its Cash Surrender Value, or withdraw part of the - Policy's Accumulation Value on
Accumulation Value. After the first Policy Year, up to the date of the insured's death
15% of the Accumulation Value (computed as of the first multiplied by a corridor
withdrawal that Policy Year) may be withdrawn each Policy percentage for the insured's
Year without charge. A nine-year declining surrender attained age.
charge of up to 9.5% of each premium paid will apply to a
full surrender and all other partial withdrawals. Federal
taxes and tax penalties may also apply. DEATH BENEFIT PROCEEDS PAID ARE REDUCED
If the Policy is a modified endowment contract, then loans BY ANY POLICY LOAN BALANCE AND UNPAID
will be treated as withdrawals for tax purposes. LOAN INTEREST.
o Fixed and variable payout options are available.
- ---------------------------------------------------------------- -----------------------------------------
</TABLE>
The ILLUSTRATIONS section at the end of this prospectus has tables demonstrating
how the Policy operates, given the Policy's expenses and several assumed rates
of return. These tables may assist you in comparing the Policy's death benefit,
Cash Surrender Values and Accumulation Values with those of 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 your specific situation.
For more detailed information about the Policy,
Please read the rest of this prospectus and the Policy.
6
<PAGE>
- -----------------------------------------------------------
ABOUT US
We are United of Omaha Life Insurance Company, a stock life insurance
company organized under the laws of the State of Nebraska in 1926. We are a
wholly-owned subsidiary of Mutual of Omaha Insurance Company. The Mutual of
Omaha family of companies provide life, health, disability, home and auto
insurance, trust services, and investment sales and brokerage services. The
Mutual of Omaha Companies have a proud tradition of supporting environmental
education, beginning with its long-running MUTUAL OF OMAHA'S WILD KINGDOM
television program, and continued through its Wildlife Heritage Trust. United of
Omaha is principally engaged in the business of issuing group and individual
life insurance and annuity policies, and group accident and health insurance in
all states (except New York), and the District of Columbia. As of December 31,
1999, United of Omaha had assets of over $10 billion.
We may from time to time publish (in advertisements, sales literature and
reports to Policy Owners) the ratings and other information assigned to us by
one or more independent rating organizations such as A.M. Best Company, Moody's
Investors Service, Inc., Standard & Poor's Ratings Services, and Duff & Phelps
Credit Rating Company. The purpose of the ratings is to reflect our financial
strength and/or claims-paying ability. The ratings do not bear on the investment
performance of assets held in the Variable Account or on the safety or the
degree of risk associated with an investment in the Variable Account.
- -----------------------------------------------------------
INVESTMENT OPTIONS
The investment results of each investment portfolio, whose
investment objectives are described below, are likely to differ
significantly. You should consider carefully, and on a continuing
basis, which portfolios or combination of investment portfolios
and fixed rate options best suits your long-term investment
objectives.
We recognize you have very personal goals and investment strategies. The
Policy allows you to choose from a wide array of investment options -- each
chosen for its potential to meet specific investment objectives. You may
allocate all or a part of your premiums to one or a combination of the variable
investment options or the fixed rate options. (Allocations to the systematic
transfer account are limited to initial premium and rollovers only.) Allocations
must be in whole percentages and total 100%.
You can choose among 30 variable investment options and two fixed rate
options.
o VARIABLE INVESTMENT OPTIONS
The investment portfolios are not available for purchase
directly by the general public, and are not the same as
other mutual fund portfolios with very similar or nearly
identical names that are sold directly to the public.
However, the investment objectives and policies of certain
investment portfolios available under the Policy are very
similar to the investment objectives and policies of other
investment portfolios that are or may be managed by the same
investment adviser or manager. Nevertheless, the investment
performance and results of the investment portfolios
available under the Policy may be lower, or higher, than the
investment results of such other (publicly available)
investment portfolios. There can be no assurance, and no
representation is made, that the investment results of any
of the investment portfolios available under the Policy will
be comparable to the investment results of any other mutual
fund portfolio, even if the other investment portfolio has
the same investment adviser or manager and the same
investment objectives and policies, and a very similar name.
For detailed information about any investment portfolio,
including its performance history, refer to the prospectus
for that investment portfolio.
With the Policy's variable investment options, you bear the investment
risk, not us. You control the amount of money you invest in each of the
investment portfolios, and you bear the risk those portfolios will perform worse
than you expect.
7
<PAGE>
The Variable Account, United of Omaha Separate Account B, provides you
with 30 variable investment options in the form of Series Fund investment
portfolios. Each Series Fund is an open-end investment management company. When
you allocate Policy funds to a Series Fund portfolio, those funds are placed in
a Subaccount of the Variable Account corresponding to that portfolio, and the
Subaccount in turn invests in the portfolio. The Accumulation Value of your
Policy depends directly on the investment performance of the portfolios that you
select.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ---------------- ---------------------------------------------------- ------------------------------------
Variable Investment Options
Asset Under United of Omaha Separate Account B Objective
Category * (Series Fund - Portfolio)
- ---------------- -----------------------------------------------------------------------------------------
Investments
- ---------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust -
MFS EMERGING GROWTH SERIES PORTFOLIO (5) Long-term capital appreciation.
AGGRESSIVE
GROWTH
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of emerging growth companies
- ------------------- ---------------------------------------------------- ------------------------------------
Alger American Fund -
ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO (1) Long-term capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small capitalization companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Deutsche Asset Management VIT Funds - DEUTSCHE VIT SMALL CAP
EQUITY INDEX FUND PORTFOLIO Long-term capital appreciation.
(12)
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small capitalization companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust - Long-term capital appreciation
REAL ESTATE PIONEER REAL ESTATE GROWTH PORTFOLIO (8) with current income.
- ------------------- ---------------------------------------------------- ------------------------------------
Real estate investment trusts (REITs) and other
real estate industry companies.
- ------------------- -----------------------------------------------------------------------------------------
T. Rowe Price International Series, Inc. -
T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO (10) Long-term capital appreciation.
INTERNATIONAL
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Scudder Variable Life Investment Fund -
SCUDDER VLIF INTERNATIONAL PORTFOLIO (9) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Scudder Variable Life Investment Fund - Long-term capital appreciation.
SCUDDER VLIF GLOBAL DISCOVERY PORTFOLIO (9)
- ------------------- -----------------------------------------------------------------------------------------
Common stock of small U.S. and non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Morgan Stanley Dean Witter Universal Funds, Inc. -
MSDW EMERGING MARKETS EQUITY PORTFOLIO (6) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Equity securities of growth companies located in "emerging" foreign
countries (countries whose economies are less
economically mature than those of developed
nations).
- ------------------- ---------------------------------------------------- ------------------------------------
Deutsche Asset Management VIT Funds - Long-term capital appreciation
DEUTSCHE VIT EAFE EQUITY INDEX FUND PORTFOLIO (12)
- ------------------- -----------------------------------------------------------------------------------------
Common stock of non-U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust - High current income.
BOND - MFS HIGH INCOME SERIES PORTFOLIO (5)
HIGH YIELD
- ------------------- ---------------------------------------------------- ------------------------------------
High yield, lower-rated bonds or comparable
unrated securities.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. -
T. ROWE PRICE NEW AMERICAN GROWTH PORTFOLIO (11) Long-term capital appreciation.
GROWTH
- ------------------- -----------------------------------------------------------------------------------------
Common stock of U.S. growth companies.
- ------------------- -----------------------------------------------------------------------------------------
8
<PAGE>
MFS Variable Insurance Trust -
- ------------------- ---------------------------------------------------- ------------------------------------
Long-term capital
appreciation and future
income.
- ------------------- -----------------------------------------------------------------------------------------
Common stock or comparable securities of
companies expected to possess better-than-average
prospects for long-term growth.
- ------------------- ---------------------------------------------------- ------------------------------------
Fidelity Variable Insurance Products Fund II -
FIDELITY VIP II CONTRAFUND PORTFOLIO (3) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Common Stock of companies, foreign and domestic,
which the fund manager believes are currently
undervalued.
- ------------------- ---------------------------------------------------- ------------------------------------
Alger American Fund -
ALGER AMERICAN GROWTH PORTFOLIO (1) Long-term capital appreciation.
- ------------------- ---------------------------------------------------- ------------------------------------
Equity securities of companies with total market
capitalization of $1 billion or more.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust -
PIONEER MIDCAP VALUE FUND PORTFOLIO (8) Long-term capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Securities of mid-size companies, which the fund
manager believes are currently undervalued.
- ------------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust -
MFS CAPITAL OPPORTUNITIES SERIES PORTFOLIO (5) Capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Common stock and related securities of foreign
and domestic companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust - Capital appreciation.
PIONEER GROWTH SHARES PORTFOLIO(8)
- ------------------- -----------------------------------------------------------------------------------------
Common stock and equity securities of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
Fidelity Variable Insurance Products Fund II - Capital
appreciation FIDELITY VIP II INDEX 500 PORTFOLIO (3) With
current income.
GROWTH &
INCOME
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of companies that comprise the S & P
500 index.
- ------------------- -----------------------------------------------------------------------------------------
Scudder Variable Life Investment Fund - Long-term capital
appreciation SCUDDER VLIF GROWTH AND INCOME PORTFOLIO (9)
With current income.
- ------------------- -----------------------------------------------------------------------------------------
Common and preferred stock, and securities
convertible into common stock, of companies that
offer the prospect for growth while paying
current dividends.
- ------------------- ---------------------------------------------------- ------------------------------------
Pioneer Variable Contracts Trust -
PIONEER FUND PORTFOLIO (8) Current income and capital
appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Equity securities, primarily of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. -
T. ROWE PRICE EQUITY INCOME PORTFOLIO (11) Dividend income and long-term
EQUITY capital appreciation.
INCOME
- ------------------- ---------------------------------------------------- ------------------------------------
Common stock of established companies that pay
dividends.
- ------------------- -----------------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund - Dividend income
and capital FIDELITY VIP EQUITY INCOME PORTFOLIO (3)
appreciation surpassing the S&P 500 average.
- ------------------- -----------------------------------------------------------------------------------------
Securities of established companies that produce
income and capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Pioneer Variable Contracts Trust - Current income and long-term
PIONEER EQUITY-INCOME PORTFOLIO (8) capital appreciation.
- ------------------- -----------------------------------------------------------------------------------------
Income producing equity securities of U.S. companies.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Equity Series, Inc. - (11)
T. ROWE PRICE PERSONAL STRATEGY BALANCED PORTFOLIO Capital appreciation and income.
9
<PAGE>
BALANCED
- ------------------- ---------------------------------------------------- ------------------------------------
Diversified portfolio of stock, bonds and money
market securities.
- ------------------- -----------------------------------------------------------------------------------------
Fidelity Variable Insurance Products Fund II -
FIDELITY VIP II ASSET MANAGER PORTFOLIO (3, 4) High total
return.
- ------------------- -----------------------------------------------------------------------------------------
Diversified portfolio of domestic and foreign
stock, bonds, short-term and money market
securities.
- ------------------- ---------------------------------------------------- ------------------------------------
MFS Variable Insurance Trust - Income and capital appreciation.
BOND - MFS GLOBAL GOVERNMENTS SERIES PORTFOLIO (5)
INTERNATIONAL
- ------------------- ---------------------------------------------------- ------------------------------------
Foreign and U.S. government bonds or other debt securities.
- ------------------- ---------------------------------------------------- ------------------------------------
Federated Insurance Series -
FEDERATED FUND FOR U.S. GOVERNMENT SECURITIES II Current income.
PORTFOLIO (2)
BOND -
DOMESTIC
- ------------------- -----------------------------------------------------------------------------------------
U.S. government securities.
- ------------------- ---------------------------------------------------- ------------------------------------
T. Rowe Price Fixed Income Series, Inc. - Current income.
T. ROWE PRICE LIMITED TERM BOND PORTFOLIO (11)
- ------------------- ---------------------------------------------------- ------------------------------------
Short- and intermediate-term investment grade
debt securities.
- ------------------- -----------------------------------------------------------------------------------------
Current income.
Morgan Stanley Dean Witter Universal Funds, Inc. -
MSDW FIXED INCOME PORTFOLIO (7)
- ------------------- ---------------------------------------------------- ------------------------------------
Diversified portfolio of fixed income securities.
- ------------------- ---------------------------------------------------- ------------------------------------
Federated Insurance Series - Current income.
MONEY MARKET FEDERATED PRIME MONEY FUND II PORTFOLIO (2)
- ------------------- -----------------------------------------------------------------------------------------
High quality fixed income securities maturing in
13 months or less.
- ------------------- -----------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
(*) Asset Category designations are our own to help you gain insight into each
portfolio's intended objectives, but do not assure any portfolio will perform
consistent with the categorization. INFORMATION CONTAINED IN THE SERIES FUNDS'
PROSPECTUSES SHOULD BE READ CAREFULLY BEFORE INVESTING IN ANY SUBACCOUNT.
INVESTMENT ADVISERS OF THE SERIES FUNDS:
We do not assure that any portfolio will achieve its stated
objective. Detailed information, including a description of
each portfolio's investment objective and policies, a
description of risks involved in investing in each of the
portfolios, and each portfolio's fees and expenses, is
contained in the prospectuses for the Series Funds, current
copies of which accompany this Prospectus. None of these
portfolios are insured or guaranteed by the U.S. Government.
(1) Fred Alger Management, Inc.
(2) Federated Investment Management Company.
(3) Fidelity Management & Research Company.
(4) Fidelity 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 Investment Management, Inc.
(7) Miller Anderson & Sherrerd, LLP.
(8) Pioneer Investment Management, Inc.
(9) Scudder Kemper Investments, Inc.
(10) Rowe Price-Fleming International, Inc., a joint venture
between T. Rowe Price Associates, Inc. and Robert
Fleming Holdings Limited.
(11) T. Rowe Price Associates, Inc.
(12) Bankers Trust Company.
The investment advisers of the Series Funds and the investment portfolios
are described in greater detail in the prospectuses for the Series Funds.
Each investment portfolio is designed to provide an investment vehicle for
variable annuity and variable life insurance contracts issued by various
insurance companies. For more information about the risks associated with the
use of the same funding vehicle for both variable annuity and variable life
insurance contracts of various insurance companies, see the prospectuses of the
Series Funds which accompany this prospectus.
We may receive revenues from the investment portfolios or their investment
advisers. These revenues may depend on the amount our Variable Account invests
in the Series Fund and/or any portfolio thereof.
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 the Variable Account assets,
but they are held separately from our other assets and are not charged with any
liability or credited with any gain of business unrelated to the Variable
Account. Any and all distributions made by the Series Funds with respect to the
shares held by the Variable Account will be reinvested in additional shares at
net asset value. We are responsible to you for meeting the obligations of the
Policy, but we do not guarantee the investment performance of any of the
investment portfolios. We do not make any representations about their future
performance. THE INVESTMENT PORTFOLIOS MAY FAIL TO MEET THEIR OBJECTIVES, AND
THEY COULD GO DOWN IN VALUE. Each investment 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.
o ADDING, DELETING, OR SUBSTITUTING VARIABLE OPTIONS
We do not control the Series Funds, so we cannot guarantee that any of the
investment portfolios will always be available. We retain the right to change
the investments of the Variable Account. New portfolios may be added, or
existing portfolios eliminated, when, in our sole discretion, conditions warrant
such a change. If a portfolio is eliminated, we will ask you to reallocate any
amount in the eliminated portfolio. If you do not reallocate these amounts, we
will automatically reinvest them in the Federated Prime Money Fund II portfolio.
If we make a portfolio substitution or change, we may change the Policy to
reflect the substitution or change. Our Variable Account may be (i) operated as
an investment management company or any other form permitted by law, (ii)
deregistered with the SEC if registration is no longer required or (iii)
combined with one or more other separate accounts. To the extent permitted by
law, we also may transfer assets of the Variable Account to other accounts.
11
<PAGE>
o FIXED RATE OPTIONS
The actual net effective minimum interest rate, after
deduction of the expense charge but before deduction of the
cost of insurance, is guaranteed to yield 2.97% per year
(compounded annually) for the first 10 Policy years and
3.36% per year thereafter (except in Maryland, where the
minimum net rates are -1.53% per year for the first ten
Policy Years and -1.14% per year thereafter).
There are two fixed rate options, the systematic transfer account and the
fixed account. With fixed rate options, we bear the investment risk. This means
we guarantee that you will earn a minimum interest rate. This minimum interest
rate is guaranteed to yield 4.5% per year, compounded annually, in all states
except Maryland (the minimum rate is guaranteed to yield 0.0% for Policies
issued in Maryland). We may declare a higher current interest rate. Whatever
interest rate we declare will be guaranteed for at least one year. HOWEVER, YOU
BEAR THE RISK THAT WE WILL NOT CREDIT MORE INTEREST THAN WILL YIELD 4.5% PER
YEAR (OR MORE THAN 0.0% IN MARYLAND) FOR THE LIFE OF THE POLICY. We have full
control over how assets allocated to fixed rate options are invested, and we
bear the risk that those assets will perform better or worse than the amount of
interest we have declared. The focus of this prospectus is to disclose the
Variable Account aspects of the Policy. For additional details regarding the
fixed investment options, see the Policy.
o SYSTEMATIC TRANSFER ACCOUNT (MAY NOT BE AVAILABLE IN ALL STATES)
All amounts allocated to the fixed rate options become part
of the general account assets of United of Omaha. Interests
in the general account have not been registered with the SEC
and are not subject to the SEC's regulation, nor is the
general account registered as an investment company with the
SEC. Therefore, SEC staff have not reviewed the fixed
account disclosures in this prospectus.
The Systematic Transfer Account is the fixed rate option used if you elect
to participate in the systematic transfer enrollment program ("STEP program")
when you buy the Policy. The STEP program is used to automatically transfer a
predetermined dollar amount on a monthly basis to any of the Subaccounts you
choose.
You cannot transfer amounts from the STEP program to the fixed account. The
allocation and the predetermined dollar amount may not be changed once the STEP
program is elected. You must have a minimum of $5,000 in your systematic
transfer account in order to participate in the STEP program. No additional
funds may be allocated to a systematic transfer account after you purchase the
Policy (except for funds designated to be transferred into the Policy pursuant
to an Internal Revenue Code Section 1035 exchange.
Funds allocated to the systematic transfer account must be completely
transferred to the Variable Account within 12 months. Transfers from the
systematic transfer accounts do not count toward the 12 free transfers allowed
each Policy Year. The systematic transfer account may not be used to practice
"market timing", and we may disallow transactions involving this account on that
basis.
o FIXED ACCOUNT AND SYSTEMATIC TRANSFER ACCOUNT
The fixed account and the systematic transfer account are part of our
general account assets. Our general account includes all our assets except those
segregated in the Variable Account or in any other separate investment account.
You may allocate premiums to the fixed account or transfer amounts from the
Variable Account to the fixed account. Instead of you bearing the investment
risk, as you do with investments allocated to the Variable Account, we bear the
full investment risk for investments in the fixed rate options. We have sole
discretion to invest the assets of our general account, subject to applicable
law.
We have sole discretion to set current interest rates of
fixed rate options. We do not guarantee the level of future
interest rates of fixed rate options, except that they will
not be less than the guaranteed minimum interest rate.
WE HAVE COMPLETE DISCRETION TO DECLARE INTEREST IN EXCESS OF THE GUARANTEED
MINIMUM RATE, OR NOT TO DECLARE ANY EXCESS INTEREST. However, once declared, we
guarantee that any rate will last for at least one year. Different rates of
interest may be credited to the systematic transfer account and the fixed
account.
12
<PAGE>
We guarantee that, prior to payment of the death benefit or at the Policy
maturity date, the amount in your fixed account or systematic transfer account
will be not be less than:
(i) the amount of premiums allocated and Accumulation Value transferred to the
fixed account or systematic transfer account, plus
(ii) interest at the guaranteed minimum interest rate, plus excess interest (if
any) credited to amounts in the fixed account or systematic transfer
account, less
(iii)that part of the Monthly Deduction allocated to the fixed account or
systematic transfer account, less
(iv) any premium tax or other taxes allocable to the fixed account or systematic
transfer account, and less
(v) any 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 or to a loan account.
o TRANSFERS
The Policy is designed for long-term investment, not for active trading or
"market timing." Excessive transfers could harm other policyOwners by having a
detrimental effect on portfolio management. After the "right to examine" period,
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,,
subject to these rules:
TRANSFER RULES:
o We must receive notice of the transfer -- either Written Notice or an
authorized telephone transaction.
o The transferred amount must be at least $500, or the entire Subaccount
value if it is less. (If the Subaccount value remaining after a transfer
will be less than $500, we will include that amount as part of the
transfer.)
o The first 12 transfers each Policy Year from Subaccounts are free. The rest
cost $10 each. This fee is deducted from the amount transferred. We will not
allow more than 24 transfers in a year.
o A transfer from the fixed account:
may be made only once each Policy Year;
- - is free;
- - may be delayed up to six months (30 days in West Virginia);
- - does not count toward the 12 free transfer limit; and
- - is limited during any Policy Year to 10% of the fixed account value
on the date of the initial transfer during that year.
o We reserve the right to limit transfers, or to modify transfer privileges,
and we reserve the right to change the transfer rules at any time..
o If the Accumulation Value in any Subaccount falls below $500, we may
transfer the remaining balance, without charge, to the Federated Prime Money
Fund II portfolio.
o Transfers made pursuant to participation in the dollar cost averaging, asset
allocation, STEP or rebalancing programs are not subject to the amount or
timing limitations of these rules, nor are they subject to a transfer
charge. See the sections of this prospectus describing those programs for
the rules of each program.
o If you transfer amounts from the fixed account to the Variable Account, we
can restrict or limit any transfer of those amounts back to the fixed
account.
THIRD-PARTY TRANSFERS. Where permitted and subject to our rules, we may
accept your authorization to have a third party exercise transfers on your
behalf. We can suspend or cancel our acceptance of this authorization at any
time. An example of a reason might be if the third party is practicing "market
timing." We can also limit the availability of Subaccounts and the fixed account
for transfers by the third party.
o DOLLAR COST AVERAGING
Our dollar cost averaging program allows you to automatically transfer, on a
periodic basis, a set dollar amount or percentage from one Subaccount or the
fixed account to any Subaccount(s). You can begin dollar cost averaging when you
purchase the Policy or later. You can increase or decrease the amount or
percentage of transfers or discontinue the program at any time. Rules of the
dollar cost averaging program are:
DOLLAR COST AVERAGING RULES:
o The dollar cost averaging program is free.
o We must receive notice of your election and any changed instruction --
either Written Notice or an authorized telephone transaction.
The dollar cost averaging and the STEP program are intended
to result in the purchase of more accumulation units when
the accumulation unit value is low, and fewer units when the
accumulation unit value is high. However, there is no
guarantee that either program will result in higher
accumulation value or otherwise be successful.
13
<PAGE>
o Automatic transfers can occur monthly, quarterly, semi-annually, or
annually.
o There must be at least $5,000 of Accumulation Value in the Subaccount or
fixed account from which transfers are being made to begin dollar cost
averaging.
o Amount of each transfer must be at least $100, and must be at least $50 per
Subaccount.
o If transfers are made from the fixed account, the maximum annual transfer
amount is 10% of that account's value at the time of the first dollar cost
averaging transfer. There is no maximum transfer amount limitation
applicable to any of the Subaccounts.
o Dollar cost averaging program transfers cannot begin before the end of a
Policy's "right to examine" period. You may specify that transfers be made
on the 1st through the 28th day of the month. Transfers will be made on the
date you specify (or if that is not a Business Day, then on the next
Business Day). If you do not select a date, the program will begin on the
next Policy Monthly Anniversary following the date the Policy's "right to
examine" period ends.
o You can limit the number of transfers to be made, in which case the program
will end when that number has been made. Otherwise, the program will
terminate when the amount remaining in the applicable Subaccount or the
fixed account is less than $500.
o SYSTEMATIC TRANSFER ENROLLMENT
PROGRAM ("STEP PROGRAM")
You cannot transfer funds
from the STEP account to
the fixed account.
The STEP program allows you to automatically transfer funds on a monthly
basis from the systematic transfer account to any Subaccount. It allows you to
use a dollar cost averaging concept to move your initial premium from a fixed
interest rate account into variable investment options within a 12-month period.
You cannot transfer funds from the STEP program to the fixed account. If you
want to move funds from a fixed interest rate account into variable investment
options over a longer time period using the same concept, then you should use
the dollar cost averaging program. However, we may credit different interest
rates to amounts in the systematic transfer account than to amounts in the
regular fixed account.)
STEP PROGRAM RULES:
o The STEP program is free.
o Can only be selected on the initial application.
o Must have at least $5,000 in the systematic transfer account to begin
the program.
o Amount transferred each month must be at least an amount sufficient to
transfer the entire amount out of the systematic transfer account in 12
equal monthly payments.
o Transfers must be at least $50 per Subaccount.
o No new premiums may be allocated to this account after you purchase the
Policy, except for funds designated in the application to be transferred
into the Policy pursuant to an Internal Revenue Code Section 1035 exchange.
Upon receipt of funds by Section 1035 exchange, the 12 monthly payment
requirement is restarted and the minimum monthly transfer amount is
recalculated.
o Cannot begin before the end of the Policy's "right to examine" period.
You may specify that transfers be made on the 1st through the 28th day of
the month. Transfers will be made on the date you specify (or if that is not a
Business Day, the transfer will be made on the next Business Day). If you do not
select a start date, the STEP program will begin on the next Policy Monthly
Anniversary following the date the Policy's "right to examine" period ends.
o No transfers may be made into the systematic transfer account.
o All funds remaining in the systematic transfer account on the date of the
last monthly transfer will be transferred to the Subaccounts in a pro rata
amount consistent with your allocation instructions.
o The STEP program ends the earlier of the date when all amounts in the
systematic transfer account have been transferred or the date of the last
monthly STEP program transfer.
o ASSET ALLOCATION PROGRAM
The asset allocation program allows you to allocate premiums and Policy
value among designatedSubaccounts and the fixed account. You can specify your
own desired allocation instructions, or you can choose to use one of the five
asset allocation models outlined below. The fixed rate options are not included
in this program.
ASSET ALLOCATION PROGRAM RULES:
o The asset allocation program is free.
o You must request the asset allocation program in the Policy application or
by Written Notice or an authorized telephone transaction.
o Changed instructions, or a request to end this program, must also be by
Written Notice or an authorized telephone transaction.
14
<PAGE>
o You must have at least $10,000 of Accumulation Value (other than amounts in
a Loan Account) to begin the asset allocation program.
o Transfers made pursuant to this program do not count in determining whethe
a transfer fee applies.
o Asset allocation and STEP programs cannot run at the same time.
o The asset allocation program will automatically rebalance your
Accumulation Value in the Subaccounts to the model you select on an annual
basis, unless you designate semiannual or quarterly rebalancing.
The asset allocation program does not protect against a loss, and otherwise is
not guaranteed to achieve your goal.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ASSET ALLOCATION MODELS
CURRENT ALLOCATIONS*
- ------------------------------------ ------------- ------------- ----------- -------------- ------------
Portfolio Principal Portfolio Income Capital Equity
Conserver Protector Builder Accumulator Maximizer
(conservative)(moderately (moderate) (moderately (aggressive)
conservative) aggressive)
% % % % %
- ------------------------------------ ------------- ------------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
MFS Emerging Growth Series 3 5
Alger American Small Capitalization 5 10
Deutsche Small Cap Equity Index 3 4 6 7
VIT Fund
Pioneer Real Estate Growth 4 5 6
T.Rowe Price International Stock 6 7 12
Scudder VLIF International 15
Deutsche EAFE Equity Index VIT Fund 5 7 9 9 10
MFS High Income Series 5 5 5
T.Rowe Price New America Growth 5 7 9
MFS Capital Opportunities Series 4 8 10 10 9
Fidelity VIP II Index 500 5 10 10 11 12
Fidelity VIP Equity Income 5 9 11
Pioneer Equity Income 7 10 10 8 6
MFS Global Governments Series 5 6 6
T.Rowe Price Limited Term Bond 43 32 20 15
MSDW Fixed Income 6
Federated Prime Money Fund II 20 13 5
- --------------------------------------------------------------------------------------------------------
* WE RETAIN THE RIGHT TO CHANGE ALLOCATION MODEL ALLOCATIONS OR TO SUBSTITUTE PORTFOLIO
OPTIONS THEREIN IN FUTUREPROSPECTUSES. AMOUNTS YOU ALLOCATE TO A MODEL PORTFOLIO
WILL BE INVESTED PURSUANT TO THE THEN CURRENT PORTFOLIO
ALLOCATIONS FOR THAT MODEL.
- --------------------------------------------------------------------------------------------------------
</TABLE>
We use Ibbotson Associates, Inc. to develop the asset allocation model
allocations. They are an investment consulting firm specializing in applying
investment theories and empirical findings (such as historical return data
collected on the investment portfolios) to quantify the benefits of
diversification for particular investment profiles.
o REBALANCING PROGRAM
The rebalancing program allows you to rebalance your Accumulation Value
among designated Subaccounts and the fixed account pursuant to your instructions
on a quarterly, semi-annual, or annual basis. Rebalancing utilizes your
allocation instructions in effect at the end of the STEP program period (so it
never rebalances any assets to the systematic transfer account). You may change
your rebalancing allocation instructions at any time. Any change will be
effective when the next rebalancing occurs.
REBALANCING PROGRAM RULES:
o The rebalancing program is free.
o You must request the rebalancing program and give us your rebalancing
instructions by Written Notice. Changed instructions or a request to end
this program must also be by Written Notice.
o You must have at least $10,000 of Policy Accumulation Value (other than
amounts in a Loan Account) 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.
o If you elect the asset allocation program, your Accumulation Value
in the Subaccounts will automatically be rebalanced to the model you
choose on an annual basis, unless you elect semiannual or quarterly
rebalancing.
The rebalancing program does not protect against a loss and otherwise is not
guaranteed to achieve your goal.
15
<PAGE>
- -----------------------------------------------------------------------
IMPORTANT POLICY PROVISIONS
The Ultra Variable Life Policy is a modified single premium variable
universal life insurance policy. The Policy provides a death benefit and, as a
variable insurance policy, allows you to invest your 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 until all proceeds
have been paid as a death benefit, or until it lapses because premiums paid and
the Policy's Cash Surrender Value are insufficient to keep the Policy in force.
o POLICY APPLICATION AND ISSUANCE
Replacing an existing life insurance policy is not always
your best choice. Evaluate any replacement carefully.
To purchase a Policy, you must submit an application with the minimum
initial 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 any application or premium for any reason. If your application
is in good order upon receipt, we will credit your initial premium on the date
the Policy is issued. All premiums are allocated to the Federated Prime Money
Fund II portfolio until the end of the "right to examine" period, and only then
to your selected 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.
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.
- - The Beneficiary's full name, Social Security number, and other information
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 (including health and medical information about the insured,
and other information we deem relevant)
o PREMIUM PAYMENTS. Your premium checks should be made payable to "United
of Omaha Life Insurance Company". We may postpone crediting to your Policy any
payment made by check until the check has been honored by 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 be effective on
the date we receive your Written Notice or authorization. The change will apply
to any additional premiums received on or after the date we receive your Written
Notice or authorization.
INITIAL PREMIUM PAYMENT:
- - The only premium payment required. All others are optional.
- - Must be at least $20,000.
- - Is invested in the Federated Prime Money Fund II until the end of
the "right to examine" period.
ADDITIONAL PREMIUM PAYMENTS:
- - Additional premiums can only be made until the insured's age 90 (except
as may be required in a grace period).
- - If a premium increases the specified amount of coverage, it is subject
to the insured's continued insurability and our underwriting
requirements, which may include evidence of continued insurability.
- - Only one additional premium payment may be made each year.
- - 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, additional premium 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 premium payment to us.
- - Additional premiums are applied pursuant to your current investment
allocation instructions, unless you give us different instructions by
Written Notice or authorized telephone transaction at the time you make an
additional premium payment.
- - We reserve the right to limit premiums or refund any values so the Policy
qualifies as life insurance under the Internal Revenue Code.
16
<PAGE>
o LAPSE AND GRACE PERIOD
o LAPSE
BECAUSE THE POLICY'S ACCUMULATION VALUE CAN FLUCTUATE DEPENDING UPON THE
PERFORMANCE OF YOUR SELECTED VARIABLE INVESTMENT OPTIONS, YOUR POLICY CAN LAPSE,
EVEN IF YOU PAY ALL PLANNED PREMIUMS ON TIME.
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
(subject to the death benefit guarantee provision), 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
Although the Policy can lapse, we allow you a 61-day grace period to make a
premium payment sufficient to cover the Monthly Deduction and any loan interest
due.
We will mail notice to you of the insufficiency within 30 days of the start
of the grace period. - 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
loans and interest on those loans 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 equal the amount of death benefit in effect immediately prior to
the date the grace period began less any due and unpaid Monthly
Deduction and unpaid loan interest.
o MISSTATEMENT OF AGE OR SEX
If the insured's age or sex 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, if the insured intended
suicide 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 (and in Missouri, if the insured
intended suicide at the time coverage was applied for). 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.
17
<PAGE>
o TELEPHONE TRANSACTIONS
o
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
o TELEPHONE TRANSACTIONS
Telephone Transactions Permitted: Telephone Transaction Rules:
o Transfers. o Only you may elect. Do so on the Policy application
o Partial withdrawals and loans of or by prior Written Notice authorization to us.
$10,000 or less by you (may be o Must be received by close of the New York Stock
restrictedin community property Exchange ("NYSE") (usually 3 p.m. Central Time); if later,
states). the transaction will be processed the next day the NYSE is
o Change of premium allocations. open.
o Will be recorded for your protection.
o For security, you must provide your Social Security
number and/or other identification information.
o May be discontinued at any time as to some or all
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; and - repayment or reinstatement of any outstanding
Policy loan, together with unpaid loan interest from the
date of lapse.
On a reinstated Policy, there will be a re-establishment of Surrender
Charges, if any, measured from the original date of issue .
The effective date of reinstatement will be the date we approve the
application for reinstatement. The specified amount of insurance coverage of
the reinstated Policy may not exceed the specified amount
of insurance 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 as described
above under the Lapse and Grace Period provision. 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.
o COVERAGE BEYOND MATURITY
At least 30 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 Notice. The following will apply:
The tax consequences of continuing a Policy beyond the
Insured's age 100 are unclear. Please consult a tax advisor.
- - We will maintain your allocation of Accumulation Value to the
Subaccounts and the fixed account 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 the Policy's maturity
date.
- - You cannot pay any more premiums.
- - All other rights and benefits as described in the Policy will be
available during the insured's
lifetime.
- - The Policy's death benefit, net of loans and loan interest, is extended
past the original maturity date.
- - Any loan outstanding when the Policy is continued past the maturity
date will continue to accre interest.
The tax consequences associated with extending coverage beyond maturity are
unclear. A tax advisor should be consulted before making such an election.
o DELAY OF PAYMENTS
18
<PAGE>
We will usually pay any amounts from the Variable Account requested as a
Policy loan, partial withdrawal or cash surrender within seven days after we
receive your Written Notice. We can postpone such payments or any transfers out
of a Subaccount if: (i) the NYSE is closed for other than customary weekend and
holiday closings; (ii) trading on the NYSE is restricted; (iii) an emergency
exists as determined by the SEC, as a result of which it is not reasonably
practical to dispose of securities, or not reasonably practical to determine the
value of the net assets of the Variable Account; or (iv) the SEC permits delay
for the protection of security holders. The applicable rules of the Sec will
govern as to whether the conditions in (iii) or (iv) exist.
We may defer payment of Policy loans, partial withdrawals or a cash
surrender from the Fixed Account for up to six months from the date we receive
your Written Notice (30 days in West Virginia).
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 owns the Policy in his or her capacity as trustee or
guardian. Where a minor is a named Beneficiary, we are able to pay the minor's
Beneficiary 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 will retain the minor's interest on deposit
until the minor attains the age of majority.
RIDERS (may not be available in all states)
Three riders generally are available with the Policy. The riders are:
- - The systematic transfer account program rider, which is described in
detail in the INVESTMENT OPTIONS section of this Prospectus;
- - The waiver of surrender charge rider, which is described in detail in
this section; and
- - The accelerated death benefit rider, which provides a full payout of the
lesser of 94% (88% in Washington) of the Policy's death benefit, or
$500,000, for the primary insured with evidence of a 12-month life
expectancy or less (24 months in Washington). There is no premium or cost
of insurance charge for this rider, and this rider automatically attaches
to all Policies with face amounts between $50,000 and $500,000. If this
rider option is exercised, all other riders and the Policy will terminate.
This rider is not available in all states.
-----------------------------------------------------------
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 investment portfolio; those
expenses are described in each Series Fund prospectus.
o MONTHLY DEDUCTION
We deduct a Monthly Deduction from the Policy's Accumulation Value on each
monthly anniversary of the date of issue (the "Monthly Deduction Date"),
consisting of: (1) the COST OF INSURANCE CHARGE; (2) the EXPENSE CHARGE.
Charges based on the Accumulation Value are calculated before the Monthly
Deduction is deducted, but reflecting charges deducted from Subaccount assets.
The Monthly Deduction is deducted pro rata from the Accumulation Value in the
Subaccounts, the fixed account andthe systematic transfer account. There is no
Monthly Deduction after the Policy Anniversary next following the insured's
100th birthday if coverage beyond maturity is elected.
o COST OF INSURANCE CHARGE
The cost of insurance charge is for providing insurance
protection under the Policy. We have the right to change current cost of
insurance charges. The amount of the current charge is based on the rate class
of the insured, Policy Accumulation Value and duration. 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. The current cost of insurance charge for a
Policy is calculated as a percentage of the Accumulation Value on the Monthly
Deduction Date. The current monthly rates for these classes are equivalent to
the annual percentage rates shown in the following table:
Accumulation Value Accumulation Value
Policy Year(s) of less than of $45,000 or more.
$45,000.
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 Accumulation Value on that date.
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 the insured's attained age. 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 the insured's attained age. The net amount at risk is
determined on the last day of the Policy Month. The "net 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.
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.
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. Please note that
the actual taxes that we pay for a particular Policy may be more or less than
the tax expense charge that we collect for that Policy.
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.
19
<PAGE>
o SURRENDER CHARGE (ALSO APPLIES TO PARTIAL WITHDRAWALS)
------------------------------------------------------------------------------
Years Since Receipt of Premium 1 2 3 4 5 6 7 8 9 10+
Payment
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Applicable Surrender Charge 9 1/2% 9 1/2% 9 1/2% 9% 71/2% 6% 4 1/2% 3% 11/2% 0%
Percentage
------------------------------------------------------------------------------
We will apply a surrender 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 paid. 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, the fixed
account and 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).
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 partial withdrawal or surrender 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 after the last day of
confinement to such facility. Proof of confinement must be provided. The nursing
home waiver is not available if the Owner is confined to a nursing home or
hospital facility on the date of issue of the Policy (except in Pennsylvania).
We will not accept any additional premiums under your Policy once you elect
this waiver.
DISABILITY WAIVER. Any partial withdrawal or surrender while 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 of our choice and at our
expense.
We will not accept any additional premiums under your Policy once you elect
this waiver. The disability waiver is not available if any Owner is receiving
Social Security Disability Benefits on the date of issue of the Policy (except
in Pennsylvania) or is age 65 or older.
TERMINAL ILLNESS WAIVER (LIMITED LIFE EXPECTANCY WAIVER IN PENNSYLVANIA).
Any partial withdrawal or surrender made after 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 you examined by a licensed
physician of our choice and at our expense.
We will not accept any additional premiums under your Policy once you elect
this waiver. The terminal illness waiver is not available if you are diagnosed
with a terminal illness prior to or on the date of issue of the Policy (except
in Pennsylvania).
UNEMPLOYMENT WAIVER. Any partial withdrawal or surrender in the event you
become unemployed. The unemployment waiver is available upon submission of a
determination letter from a state department of labor indicating you received
unemployment benefits for at least 60 consecutive days prior to the election of
such waiver. The unemployment waiver may be exercised only once and is not
available if you are receiving unemployment benefits on the date of issue of the
Policy (except in Pennsylvania).
TRANSPLANT WAIVER. Any partial withdrawal or surrender 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 or Insured 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 partial withdrawal or surrender 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 within
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. Partial 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 surrender charge.
20
<PAGE>
o TRANSFER CHARGE - $10 (FIRST 12 ARE FREE).
A transfer fee of $10 may be imposed for any transfer in excess of 12 per
Policy Year. The transfer fee is deducted from the amount transferred. Transfers
from the systematic transfer account are free and do not count toward the 12
free transfers. Transfers made pursuant to participation in the dollar cost
averaging, asset allocation, STEP or rebalancing programs are not subject to the
transfer charge rules. See the sections of this prospectus describing those
programs for the rules of each program.
o SERIES FUND CHARGES
Each Series Fund investment 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 portfolio annual
expenses:
21
<PAGE>
[TO BE ADJUSTED]
<TABLE>
<CAPTION>
Series Fund Annual Expenses1 Management Other Expenses Total Portfolio
(as a percentage of average net assets) Fees ( after Annual Expenses
(after fee expense (after fee waiver
Portfolio: waiver)(a) reimbursement)(a) and expense
reimbursement)(a)
- ------------------------------------------------- ---------------- ---------------- ===================
<S> <C> <C> <C>
Alger American Growth
Alger American Small Capitalization
Deutsche VIT EAFE Equity Index Fund
Deutsche VIT Small Cap Equity Index Fund
Federated Prime Money Fund II (a)
Federated Fund for U.S. Government Securities
II (a)
Fidelity VIP II Asset Manager (a)
Fidelity VIP II Contrafund
(a)
Fidelity VIP Equity Income (a)
Fidelity VIP II Index 500 (a)
MFS Capital Opportunities Series (a)
MFS Emerging Growth Series
MFS Global Governments Series (a)
MFS High Income Series (a)
MFS Research Series
MSDW Emerging Markets Equity (a)
MSDW Fixed Income (a)
Pioneer Equity Income
Pioneer Growth Shares
Pioneer Fund
Pioneer Midcap Value Fund
Pioneer Real Estate Growth (a)
Scudder VLIF Global Discovery (a), (b)
Scudder VLIF Growth and Income (c)
Scudder VLIF International
T. Rowe Price Equity Income (d)
T. Rowe Price International Stock (d)
T. Rowe Price LimitedTerm Bond (d)
T. Rowe Price New America Growth (d)
T. Rowe Price Personal Strategy Balanced (d)
=======================================================================================================
(a) Without fee waiver or expense reimbursement limits, the following funds
would have had the charges set forth below:
TOTAL PORTFOLIO
PORTFOLIO MANAGEMENT FEES OTHER EXPENSES ANNUAL EXPENSES
--------------------------------------
------------------ --------------- ===================
Federated Prime Money Fund II
Federated Fund for U.S. Government
Securities II Fidelity VIP II Asset Manager Fidelity VIP II
Contrafund Fidelity VIP Equity Income Fidelity VIP II Index 500 MFS
Capital Opportunities Series MFS Global Governments Series MFS High
Income Series MSDW Emerging Markets Equity MSDW Fixed Income Pioneer
Real Estate Growth Scudder VLIF Global Discovery
-------------------------------------- ------------------ --------------- ===================
(b) Other Expenses includes a 0.25% 12b-1 fee assessed for payment of
distribution administration expenses.
(c) Other Expenses includes a 0.23% 12b-1 fee assessed for payment of
distribution administration expenses.
(d) T. Rowe Price Funds do not itemize management fees and other expenses.
=======================================================================================================
</TABLE>
1 The fee and expense data regarding each Series Fund, which are fees and
expenses for 1999, was provided to United of Omaha by the respective Series
Fund. The Series Funds are not affiliated with United of Omaha. We have not
independently verified these figures.
22
<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, or surrender it for its Cash
Surrender Value. Tax penalties and surrender charges may apply to amounts taken
out of your Policy. The Cash Surrender Value is the Accumulation Value less any
applicable surrender charge and less any outstanding Policy loan and unpaid loan
interest.
o POLICY LOANS
<TABLE>
<CAPTION>
<S> <C> <C>
Amount You Can Borrow Loan Interest Rate
- -------------------------------------------------------------- ------------------------------------------
STANDARD POLICY LOAN. After the first Policy Year (at any STANDARD POLICY LOAN. Net annual loan
time in Indiana), you may borrow up to 90% of the Cash interest rate of 1.5%: we charge an
Surrender Value (100% in Florida), less loan interest to the interest rate in advance with a 6%
end of the Policy Year, and less a effective annual yield, but we also
Monthly Deduction that is sufficient to one credit an interest rate with an
continue the Policy in force for at least effective annual yield of 4.5% to any
month. amounts in the Loan account.
- -------------------------------------------------------------- ------------------------------------------
PREFERRED POLICY LOAN. Available on any date when the sum of PREFERRED POLICY LOAN. Net annual loan
the Cash Surrender Value plus any outstanding standard loans interest rate of 0%: we charge an
exceeds the sum of the premiums paid since the date of issue interest rate in advance with a 6%
of the Policy. The amount available for a preferred Policy effective annual yield, but we also
loan is the amount of such excess. credit an interest rate with an
effective annual yield of 6% to any
amounts in the Loan account.
- ---------------------------------------------------------------------------------------------------------
WE BELIEVE A PREFERRED POLICY LOAN WILL NOT AFFECT TAX
TREATMENT OF THE POLICY, BUT TAX LAW IS UNCLEAR ON
THIS POINT AND WE DO NOT WARRANT ITS TAX EFFECT.
YOU MAY WISH TO CONSULT YOUR TAX ADVISOR BEFORE TAKING A PREFERRED
POLICY LOAN.
- ---------------------------------------------------------------------------------------------------------
</TABLE>
LOAN RULES
o The Policy must be assigned to us as sole security for the loan.
o We will transfer all loan amounts from the Subaccounts and the fixed account
to a 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 Subaccounts and the fixed account 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 Accumulation Value.
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.
o We may defer making a loan for six months (30 days in West Virginia) .
o SURRENDER
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 which yields 4.5% on an annual basis.
While the insured is alive, you may terminate the Policy for its Cash
Surrender Value. Following a surrender, all your rights in the Policy end.
SURRENDER RULES
o The Policy must be returned to us to receive the Cash Surrender Value.
o The maximum applicable Surrender Charge is 9.5% of paid premiums.
o Surrenders are taxable, and a 10% federal tax penalty may apply prior to
age 59 1/2.
o We may defer payment from the fixed account or the systematic transfer
account for up to six months (30 days in West Virginia).
23
<PAGE>
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 request (either by Written Notice
or, for amounts of $10,000 or less, by an authorized telephone transaction).
Amounts withdrawn except for "free" withdrawals described below, may be subject
to a surrender charge of up to 9.5% unless one of the surrender charge waiver
provisions described in this prospectus is applicable. The surrender charge is a
percentage of the Policy premium withdrawn. The applicable percentage varies
according to the length of time since each affected premium was paid, and are
shown in the EXPENSES section of this prospectus.
"FREE" PARTIAL 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.
PARTIAL WITHDRAWAL 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
withdrawal amounts 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.
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 they 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 request (30 days in West Virginia).
o Partial withdrawals may be taxable and subject to a 10% federal tax penalty.
o DEATH BENEFIT
We will pay a death benefit after we receive necessary documentation of the
insured's deathand 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) selected by the Beneficiary to the extent allowed by
applicable law and any settlement agreement in effect at the insured's death.
(See the PAYMENT OF PROCEEDS section below.) If neither you nor the Beneficiary
makes a payment option election within 60 days of our receipt of documentation
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 initial
premium amount by the corresponding issue age premium factor; deposits after
issue will increase the specified amount of coverage by the amount of the
additional deposit multiplied by the attained age premium factor (not the
"corridor percentage" shown below).
24
<PAGE>
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%
o PAYMENT OF PROCEEDS
You may elect (or the Beneficiary may elect if you do not) to have proceeds paid
as annuity payments under any combination of the fixed and variable payout
options shown in the Policy. (In Maryland only fixed payout options are
available.) If another option is not chosen within 60 days of the date we
receive satisfactory proof of death, we will make payment in a lump-sum.
RULES FOR PAYMENT OF PROCEEDS
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 the amount 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 interest rate used in the
payout options is guaranteed to yield 3%. on an annual basis. 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 an interest rate which is guaranteed to yield 3% annually.
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 ALB. 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, 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. The number of units for each
Subaccount is determined by dividing the amount of the first payment
attributable to that Subaccount by the value of a unit in that Subaccount when
the first payment is determined.
If the net investment return of a Subaccount for a payment period is equal
to the pro-rated portion of the 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 the assumed
investment rate 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 the assumed investment rate, 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 and other costs and risks
associated with the variable payment options.
25
<PAGE>
o TRANSFERS BETWEEN FIXED AND VARIABLE PAYOUT OPTIONS
4 transfers are allowed each Policy Year
that a payout option is in effect.
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 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 we receive any request.
o PAYOUT OPTIONS
The longer the guaranteed or projected proceeds Payment
Option period, the lower the amount of each payment.
NOTE: UNLESS YOU ELECT A PAYOUT OPTION WITH A GUARANTEED PERIOD OR OPTION 1,
IT IS POSSIBLE ONLY ONE PAYMENT WOULD BE MADE UNDER THE PAYOUT 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 the continuation of variable payments being made under
option 2 or 6 does not depend upon the payee's remaining alive, you may
surrender your Policy and receive the commuted value of any unpaid payments.
However, if your payment under option 2 or 6 depends upon the payee's continued
life, you cannot surrender your Policy for cash. In this case, once option
payments commence, payments will end upon the payee's death.
1) PROCEEDS HELD ON DEPOSIT AT INTEREST. While proceeds remain on deposit,
we annually credit interest to the proceeds. The interest may be paid
to the payee or added to the amount on deposit.
2) INCOME OF A SPECIFIED AMOUNT. Proceeds are paid in monthly installments
of a specified amount over at least a five-year period until proceeds,
with interest, have been fully paid.
3) INCOME FOR A SPECIFIED PERIOD. Periodic payments of proceeds are paid
for the number of years chosen. If no other frequency is selected,
payments will be made monthly. Monthly incomes for each $1,000 of
proceeds, which include interest, are illustrated by a table in the
Policy.
4) LIFETIME INCOME. Proceeds are paid as monthly income for as long as the
payee lives. The amount of the monthly income annuity payment will be
an amount computed using either the Lifetime Monthly Income Table set
forth in the Policy (based on the 1983a Mortality Table) 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 FOR LIFETIME INCOME OPTION:
GUARANTEED PERIOD - An amount of monthly income is guaranteed for a
specified number of years, and thereafter as long as the payee lives.
GUARANTEED AMOUNT - An amount of monthly income is guaranteed until the
sum of payments equals the proceeds placed under the option and as long
after that as the payee lives.
5) LUMP SUM. Proceeds are paid in one sum.
6) OTHER OPTIONS. 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
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.
The Internal Revenue Code of 1986, as amended (the "Code") defines a life
insurance contract for federal income tax purposes. This definition can be met
if an insurance contract satisfies either one of two tests set forth in that
section. The Code and related regulations do not directly address the manner in
which these tests should be applied to certain features of the Policy. Thus,
there is some uncertainty about the application of those tests to 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.
26
<PAGE>
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.
MODIFIED ENDOWMENT CONTRACTS. The Code establishes a class of life
insurance contracts designated as modified endowment contracts. The 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 because of 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.
In almost all cases, this Policy will be a modified
endowment contract. We recommend you consult with a tax
adviser regarding your use of this Policy.
A Policy issued in exchange for a modified endowment contract is subject
to tax treatment as a modified endowment contract. 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
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. However, 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.
"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.
DISTRIBUTIONS FROM POLICIES CLASSIFIED AS MODIFIED BNDOWMENT CONTRACTS are
subject to the following tax rules:
(1) All distributions, including surrenders and partial withdrawals, 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 (see box 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 nine 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
preferred loans 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.
28
<PAGE>
o OTHER POLICY OWNER TAX MATTERS
Depending on the circumstances, the exchange of a Policy, a Policy loan, a
withdrawal, a surrender or lapse, 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.
INTEREST PAID ON POLICY LOANS generally is not tax deductible.
AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS. Pre-death distributions
(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 recognized on the Policy.
If we or any of our affiliates issue more than one modified endowment contract
to the same Policy Owner 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. Any 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, through the underlying investment portfolios, 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 Variable
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.
POSSIBLE TAX LAW CHANGES. There is always a possibility that the tax
treatment of the Policy could change, by legislation or otherwise. You should
consult a tax advisor with respect to possible tax law changes and their effect
on your intended use of the Policy.
29
<PAGE>
- -----------------------------------------------------------
MISCELLANEOUS
o OUR MANAGEMENT
DIRECTORS*
Samuel L. Foggie, Sr. Retired Banking and Finance Industry Executive
Carol B. Hallett President and CEO, Air Transport Association of
America
Jeffrey M. Heller President & COO, Electronic Data Systems
Thomas W. Osborne University of Nebraska Alumni Association
Richard J. Sampson Retired Insurance Executive of our Company
Oscar S. Straus II Chairman, The Daniel and Florence Guggenheim
Foundation
John A. Sturgeon President and COO of our Company
Michael A. Wayne Chairman and President, Batjac Productions, Inc.;
Chairman, John Wayne Cancer Institute and John
Wayne Foundation
John W. Weekly Chairman of the Board and CEO of our Company
SENIOR OFFICERS*
John W. Weekly Chairman and Chief Executive Officer
John A. Sturgeon President and Chief Operating Officer
G. Ronald Ames Executive Vice President
Cecil D. Bykerk Executive Vice President (Chief Actuary)
James L. Hanson Executive Vice President (Information Services)
Randall C. Horn Executive Vice President (Individual Insurance)
M. Jane Huerter Executive Vice President (Corporate Secretary)
William C. Mattox Executive Vice President (Federal Government
Affairs)
Thomas J. McCusker Executive Vice President (General Counsel)
Daniel P. Neary Executive Vice President (Group Insurance)
Tommie D. Thompson Executive Vice President (Treasurer; aComptroller)
Richard A. Witt Executive Vice President (Investments)
*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
charges under the Policies that are not described under the EXPENSES section of
this prospectus.
30
<PAGE>
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 Series
Funds. The Series Funds may not hold routine annual shareholder meetings.
As a Policy Owner, you have a voting interest in the Series Fund portfolios
you are invested in. The number of votes that you may instruct for a particular
Subaccount is typically determined by your Accumulation Value in that
Subaccount. You will receive proxy material, reports, and other materials
relating to each Series Fund in which you have voting interests.
q DISTRIBUTION OF MATERIALS
We will distribute proxy statements, updated prospectuses and other
materials to you from time to time. In order to achieve cost savings, we may
send consolidated mailings to several owners who reside at the same household in
accordance with the rules of the Securities and Exchange Commission.
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
Department of Insurance of the State of Nebraska and insurance departments of
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
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 are material in relation to our total assets.
o INDEPENDENT AUDITORS
Our Financial Statements as of December 31, 1999 and 1998 and for the three
years ended December 31, 1997, 1998 and 1999, and of United of Omaha Separate
Account B as of December 31, 1999, and for the two years ended December 31, 1999
and 1998 included in the Registration Statement which incorporates this
prospectus have been audited by Deloitte & Touche LLP, independent auditors,
Omaha, Nebraska, as stated in their reports appearing therein. 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 United of Omaha Separate Account B.
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. You will also 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 Services, P.O. Box 8430, Omaha,
Nebraska 68103-0430. Telephone 1-800-238-9354.
31
<PAGE>
- -----------------------------------------------------------
FINANCIAL
STATEMENTS
[TO BE INCLUDED BY A SUBSEQUENT AMENDMENT TO THE REGISTRATION STATEMENT
BEFORE THIS AMENDED REGISTRATION STATEMENT BECOMES EFFECTIVE.]
<PAGE>
- -----------------------------------------------------------
ILLUSTRATIONS
[To be included by a subsequent amendment to the registration statement
before this amended registration statement becomes effective.]
<PAGE>
<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 of Omaha Life Insurance
Company's ("United") 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 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.
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 consisting of 31 pages.
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)
Michael E. Huss, Esquire (included in Exhibit 2)
Robert E. Hupf, F.S.A., M.A.A.A. (included in Exhibit 6)
The following exhibits:
EXHIBIT INDEX
-------------
Exhibit No. Description of Exhibit
- ----------- ----------------------
1.A. (1) Resolution of the Board of Directors of United of Omaha Life
Insurance Company establishing the Variable Account. *
(2) None.
(3)(a) Principal Underwriter Agreement by and between United of Omaha
Life Insurance Company, on its own behalf and on behalf of the
Variable Account, and Mutual of Omaha Investor Services, Inc. *
(b) Form of Broker/Dealer Supervision and Sales Agreement by and
between Mutual of Omaha Investor Services, Inc. and the
Broker/Dealer. **
(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) Forms 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 Fund , et. al.
****
(i) Participation Agreement by and between United of Omaha Life
Insurance Company and BT Insurance Funds Trust. #
(9) None.
(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. Consent of Independent Auditor. #
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).
*****Incorporated by reference to the Registration Statement for United of Omaha
Separate Account C filed on April 26, 1999 (File No. 33-89848).
# To be filed by a Post-Effective Amendment filed before the effective date of
this Amended Registration.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this Post-Effective Amendment No. 4 to the Registration Statement of
Form S-6 to be signed on its behalf, in the City of Omaha and State of Nebraska,
on February 28, 2000.
UNITED OF OMAHA SEPARATE ACCOUNT B
(Registrant)
UNITED OF OMAHA LIFE INSURANCE COMPANY
(Depositor)
/s/Thomas J. McCusker
---------------------
By: Thomas J. McCusker
As required by the Securities Act of 1933, this Post-Effective Amendment No. 4
to the Registration Statement has been signed by the following persons in the
capacities and on the duties indicated:
Signatures Title Date
_____*____________________ Chairman of the Board, 2/28/00
John W. Weekly Chief Executive Officer
_____*____________________ Director, President, 2/28/00
John A. Sturgeon Chief Operating Officer
_____*____________________ Treasurer and Comptroller 2/28/00
Tommie Thompson (Principal Financial Officer, and
Principal Accounting Officer)
_____*____________________ Director 2/28/00
-
Samuel L. Foggie
_____*___________________ Director 2/28/00
-
Carol B. Hallett
_____*___________________ Director 2/28/00
Jeffrey M. Heller
_____*__________________ Director 2/28/00
-
Thomas W. Osborn
_____*___________________ Director 2/28/00
-
Richard J. Sampson
_____*___________________ Director 2/28/00
-
Oscar S. Straus II
_____*__________________ Director 2/28/00
Michael A. Wayne
By: /s/ Thomas J. McCusker Date: February 28, 2000
----------------------------
Thomas J. McCusker
* Signed by Thomas J. McCusker under Powers of Attorney effective indefinitely
as of January 1, 1999, filed as exhibits incorporated by reference in this
Post-Effective Amendment No. 4 to the Registration Statement.
