<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1999
REGISTRATION NO. 33-75280
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-6
POST-EFFECTIVE AMENDMENT NO. 5
TO REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
THE AMERICAN SEPARATE ACCOUNT NO. 3
(EXACT NAME OF TRUST)
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
(NAME OF DEPOSITOR)
---------------
320 PARK AVENUE
NEW YORK, NEW YORK 10022
(ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES)
---------------
PATRICK A. BURNS, ESQ.
SENIOR EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
320 PARK AVENUE, NEW YORK, NEW YORK 10022
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------
COPY TO:
W. RANDOLPH THOMPSON, OF COUNSEL
JONES & BLOUCH L.L.P.
SUITE 405 WEST
1025 THOMAS JEFFERSON ST. NW
WASHINGTON, D.C. 20007
---------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of the Registration Statement.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[ ] immediately upon filing pursuant to paragraph (b) of
Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[X] 60 days after filing pursuant to paragraph (a) of
Rule 485
[ ] on (date) pursuant to paragraph (a) of Rule 485
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE SHEET
(FILE NO. 33-75280, VUL POLICIES)
REGISTRATION STATEMENT ON FORM N-6)
<TABLE>
<CAPTION>
FORM N-8B-2
ITEM NO. CAPTION IN PROSPECTUS
- ------------ -----------------------------------------------------------------------------------------------------------
<S> <C>
1 Cover Page
2 Cover Page; About American Life and Our Separate Account No. 3
3 Not Applicable
4 About American Life and Our Separate Account No. 3; Administrative Matters -- Distribution of the Policies
5 About American Life and Our Separate Account No. 3
6 About American Life and Our Separate Account No. 3
7 Not applicable
8 Not applicable
9 Other Matters -- Legal Proceedings
10 How to Purchase a Contract and Pay Premiums; Access to Your Account Balance; Federal Tax
Considerations; Your Voting Rights for Meetings of the Underlying Funds; Fund and Other Changes We May
Make
11 Underlying Funds Invested in by Our Separate Account
12 Cover Page; Underlying Funds Invested in by Our Separate Account
13 Charges and Deductions You Will Pay; How to Purchase a Policy and Pay Premiums
14 How to Purchase a Policy and Pay Premiums -- Policy Issue
15 How to Purchase a Policy and Pay Premiums
16 Your Account Balance in the Separate Account Funds
17 Access to Your Account Balance; How to Contact Us and Give Us Instructions
18 Not Applicable
19 Administrative Matters -- Notices, Confirmation Statements and Reports to Policyowners
20 Not Applicable
21 Access to Your Account Balance -- Policy Loans
22 Not Applicable
23 Omitted
24 Administrative Matters; Other Information
25 About American Life and Our Separate Account No. 3
26 Charges and Deductions You Will Pay
27 About American Life and Our Separate Account No. 3
28 Our Executive Officers and Directors
29 About American Life and Our Separate Account No. 3 -- American Life
30 Not Applicable
31 Omitted
32 Not Applicable
33 Not Applicable
34 Not Applicable
35 Omitted
36 Not Applicable
37 No Applicable
38 Administrative Matters -- Distribution of the Policies
39 Administrative Matters -- Distribution of the Policies
40 Not Applicable
41 Omitted
42 Not Applicable
43 Not Applicable
44 You Account Balance in the Separate Account Funds
45 Not Applicable
46 Your Account Balance in the Separate Account Funds; Access to Your Account Value; Our General Account
47 Not Applicable
48 Not Applicable
49 Not Applicable
50 About American Life and Our Separate Account No. 3 -- The Separate Account
51 About American Life and Our Separate Account No. 3; How to Purchase a Policy and Pay Premiums;
Insurance Benefits Upon Death of the Insured Person
52 Funding and Other Changes We May Make
53 Federal Tax Considerations
54 Not Applicable
55 Not Applicable
56 Not Applicable
57 Not Applicable
58 Not Applicable
59 Financial Statements of the Separate Account and American Life
</TABLE>
<PAGE>
PROSPECTUS
----------------------------------------------------------------------------
VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
ISSUED BY
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
320 PARK AVENUE, NEW YORK, NEW YORK 10022
THROUGH
THE AMERICAN SEPARATE ACCOUNT NO. 3
----------------------------------------------------------------------------
THE POLICIES - We offer variable universal life insurance policies
(POLICIES), without a sales charge. The Policies are designed to provide you
with life insurance protection, while giving you flexibility in the timing
and amount of premiums you pay. You also have some flexibility in the amount
of insurance coverage available to you.
In this Prospectus, a POLICYOWNER or YOU means a person to whom we have
issued a Policy. You should note that the purchase of a Policy as a
replacement for any existing insurance coverage you have may not be
advisable.
INVESTMENT ALTERNATIVES FOR YOUR ACCOUNT BALANCE - You may allocate your
Account Balance to any of the Funds of The American Separate Account No. 3
(the SEPARATE ACCOUNT) or to our General Account. You may transfer all or
any part of your Account Balance among the Funds and the Separate Account at
any time, without charge.
The Separate Account Funds invest in similarly named funds or portfolios of
mutual funds (the UNDERLYING FUNDS), which will have varying investment
returns and performance. The Underlying Funds currently are:
o MUTUAL OF AMERICA INVESTMENT CORPORATION: Equity Index Fund, All America
Fund, Mid-Cap Equity Index Fund, Aggressive Equity Fund, Composite Fund,
Bond Fund, Mid-Term Bond Fund, Short-Term Bond Fund and Money Market Fund;
o SCUDDER VARIABLE LIFE INVESTMENT FUND: Capital Growth Portfolio, Bond
Portfolio and International Portfolio;
o VARIABLE INSURANCE PRODUCTS FUNDS OF FIDELITY INVESTMENTS(R):
Equity-Income Portfolio of the Variable Insurance Products Fund, and
Contrafund Portfolio and Asset Manager Portfolio of the Variable Insurance
Products Fund II;
o CALVERT SOCIAL BALANCED PORTFOLIO of Calvert Variable Series, Inc.; and
o AMERICAN CENTURY VP CAPITAL APPRECIATION FUND of American Century
Variable Portfolios, Inc.
WE DO NOT GUARANTEE THE INVESTMENT PERFORMANCE OF ANY SEPARATE ACCOUNT FUND.
You bear the entire investment risk, including the risk of a decline in
value, for amounts you allocate to a Separate Account Fund.
We pay a fixed rate of interest on your Account Balance in our General
Account, and we change the rate from time to time. This Prospectus describes
the Separate Account Fund Investment Alternatives, but there is a brief
description of the General Account under the heading "Our General Account".
PROSPECTUSES - You should read this Prospectus carefully before you purchase
a Policy, and you should keep it for future reference. Attached to this
Prospectus are the prospectuses for the Underlying Funds. This Prospectus is
not valid unless the prospectuses of the Underlying Funds are attached to
it.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------------------------------------------------------------
DATED: MAY 1, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
INTRODUCTION AND SUMMARY ........................................... 1
HOW TO PURCHASE A POLICY AND PAY PREMIUMS .......................... 5
Policy Issue ...................................................... 5
Basic Death Benefit Plan .......................................... 5
Supplemental Insurance Benefits ................................... 6
Scheduled Premiums ................................................ 6
Unscheduled Premiums .............................................. 7
Limitation on Premiums ............................................ 7
Allocation of Premiums ............................................ 7
Dollar Cost Averaging ............................................. 7
Changes in the Face Amount of Your Policy ......................... 8
Policy Lapse and Reinstatement .................................... 8
UNDERLYING FUNDS INVESTED IN BY OUR SEPARATE ACCOUNT ............... 9
YOUR ACCOUNT BALANCE IN THE SEPARATE ACCOUNT FUNDS ................. 13
OUR GENERAL ACCOUNT ................................................ 14
ACCESS TO YOUR ACCOUNT BALANCE ..................................... 15
Surrender of Policy ............................................... 15
Partial Withdrawals of Account Balance ............................ 15
Your Right to Transfer Among Investment Alternatives .............. 15
How to Tell Us an Amount for Transfers or Partial Withdrawals ..... 15
Policy Loans ...................................................... 16
Accelerated Benefit for Terminal Illness .......................... 17
Maturity Benefit .................................................. 18
When We May Postpone Payments ..................................... 18
INSURANCE BENEFITS UPON DEATH OF INSURED PERSON .................... 19
Death Proceeds .................................................... 19
Basic Death Benefit ............................................... 19
Corridor Percentages .............................................. 19
Payment Options ................................................... 20
CHARGES AND DEDUCTIONS YOU WILL PAY ................................ 21
Cost of Insurance Charges ......................................... 21
Administrative Charges ............................................ 21
Mortality and Expense Risks Charges ............................... 22
Supplemental Insurance Benefits Fee ............................... 22
Accelerated Benefit Fee ........................................... 22
Premium and Other Taxes ........................................... 22
Changes in Policy Cost Factors .................................... 22
Fees and Expenses of Underlying Funds ............................. 22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
HOW TO CONTACT US AND GIVE US INSTRUCTIONS ............................. 23
Contacting American Life .............................................. 23
Transfers, Allocation Changes, Loans and Withdrawals by Telephone ..... 23
Where You Should Direct Requests ...................................... 23
ABOUT AMERICAN LIFE AND OUR SEPARATE ACCOUNT NO. 3 ..................... 24
FEDERAL TAX CONSIDERATIONS ............................................. 25
Obtaining Tax Advice .................................................. 25
Tax Status of the Policies ............................................ 25
Tax Treatment of Policy Benefits and Access of Account Balance ........ 26
Policy Loan Interest .................................................. 27
Estate Taxes .......................................................... 27
YOUR VOTING RIGHTS FOR MEETINGS OF THE UNDERLYING FUNDS ................ 28
FUNDING AND OTHER CHANGES WE MAY MAKE .................................. 28
ADMINISTRATIVE MATTERS ................................................. 29
Year 2000 Compliance .................................................. 29
Notices, Confirmation Statements and Reports to Policyowners .......... 29
Miscellaneous Policy Provisions ....................................... 29
Distribution of the Policies .......................................... 30
OTHER INFORMATION ...................................................... 30
OUR EXECUTIVE OFFICERS AND DIRECTORS ................................... 31
DEFINITIONS WE USE IN THIS PROSPECTUS .................................. 33
POLICY ILLUSTRATIONS ................................................... 35
Face Amount $100,000................................................... 36
Face Amount $500,000................................................... 44
FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT AND AMERICAN LIFE ......... 48
Separate Account No. 3 ................................................
American Life .........................................................
</TABLE>
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
WE MAY NOT LAWFULLY OFFER THE POLICIES FOR SALE. WE HAVE NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THIS OFFERING OTHER THAN THOSE IN THIS PROSPECTUS. IF ANY PERSON GIVES
OR MAKES ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS TO YOU, YOU MUST
NOT RELY ON THEM IN MAKING YOUR DECISION OF WHETHER OR NOT TO PURCHASE A
POLICY.
<PAGE>
SUPPLEMENT TO PROSPECTUS
----------------------------------------------------------------------
VARIABLE UNIVERSAL LIFE INSURANCE POLICIES
ISSUED BY
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
320 PARK AVENUE
NEW YORK, NEW YORK 10022
THROUGH
THE AMERICAN SEPARATE ACCOUNT NO. 3
----------------------------------------------------------------------
**THIS SUPPLEMENT IS FOR MASSACHUSETTS POLICIES ONLY**
----------------------------------------------------------------------
ALL REFERENCES IN THE PROSPECTUS TO "SCHEDULED PREMIUMS" ARE CHANGED TO
"PLANNED PREMIUMS". ALL REFERENCES IN THE PROSPECTUS TO "UNSCHEDULED
PREMIUMS", AND ACCOMPANYING TEXT PERTAINING TO UNSCHEDULED PREMIUMS, ARE
DELETED.
THE DISCUSSION IN THE PROSPECTUS IS SUPPLEMENTED BY THE FOLLOWING:
You will select an amount of planned premiums under your policy, based on
the initial Face Amount and payment intervals you have chosen. YOU NEED
NOT PAY PLANNED PREMIUMS, AND YOUR POLICY WILL NOT LAPSE SO LONG AS YOUR
ACCOUNT BALANCE IS SUFFICIENT TO PAY APPLICABLE CHARGES WHEN DUE.
Failure to pay one or more planned premiums will not necessarily cause
your Policy to lapse; timely payment of all such premiums will not assure
that your Policy will continue in force. Whether your Policy continues in
force or lapses does not depend on whether planned premiums have been
paid, but rather on whether, on each Monthly Anniversary Day, your Account
Balance (which will vary with the performance of our Investment Accounts)
is sufficient to permit the deduction of all charges due on that day.
You may increase the amount of premiums paid under your policy at any
time, except that such additional amounts must be equal to at least $50
each and are limited to an aggregate of $10,000 during any Policy Year. In
addition, if these additional amounts would increase the policy's Basic
Death Benefit, then evidence of insurability would be required. SEE
"Insurance Benefits Upon Death of Insured Person" in this Prospectus.
----------------------------------------------------------------------
SUPPLEMENT, DATED MAY 1, 1999
TO PROSPECTUS, DATED MAY 1, 1999
<PAGE>
INTRODUCTION AND SUMMARY
The discussion below is a summary of information in the Prospectus. The
references in the Summary direct you to particular sections in the
Prospectus where you will find more detailed explanations. You will find
definitions at the end of this Prospectus under "Definitions We Use in This
Prospectus".
THE POLICY WE OFFER
----------------------------------------------------------------------------
The Policy is a variable universal life insurance policy. It enables you,
within certain limits, to accommodate changes in your insurance needs and
changes in your financial condition.
As a life insurance policy, the Policy provides for:
o a death benefit, based either on the Face Amount of the Policy, or on
the Face Amount of the Policy plus the Account Balance, depending on
the type of Basic Death Benefit you select for your Policy,
o Policy Loans,
o a variety of death proceeds payment options, and
o other features traditionally associated with life insurance, such as
optional supplemental benefits.
As a variable universal life policy, the Policy provides for:
o an Account Balance that varies based on the Investment Alternatives you
select,
o allocation of your premiums and transfer of your Account Balance among
the Investment Alternatives, and
o flexibility in the timing and amount of premium payments and, subject
to certain restrictions, the amount of insurance coverage.
YOUR PREMIUM PAYMENTS
----------------------------------------------------------------------------
We will provide you with an amount of scheduled premiums, based on the
initial Face Amount you select. We will send you premium notices for
scheduled premiums, unless you have authorized withdrawals from your banking
account or other account or unless premiums are payable under a Payroll
Deduction Program.
You may adjust the timing and amount of your premium payments to suit your
individual circumstances, within certain limits. You may pay unscheduled
premiums, skip scheduled premiums, or increase or decrease your scheduled
premium. Each scheduled or unscheduled premium must be at least $50, except
that there is no minimum scheduled premium for Policies with a Payroll
Deduction Rider. REFER TO "HOW TO PURCHASE A POLICY AND PAY PREMIUMS".
CHOICE OF BASIC DEATH BENEFIT
----------------------------------------------------------------------------
You may choose as your Basic Death Benefit either a Face Amount Plan, which
generally provides a level death benefit equal to the Face Amount, or a Face
Amount Plus Plan, which provides for a death benefit that varies as your
Account Balance changes. Subject to certain restrictions, you may change
from one Plan to the other while the insured is still living. We pay a death
benefit to the beneficiary upon the death of the insured person under the
Policy. REFER TO "INSURANCE BENEFITS UPON DEATH OF INSURED PERSON".
SUPPLEMENTAL BENEFITS BY RIDER TO POLICY
----------------------------------------------------------------------------
We may make available one or more supplemental insurance benefits under your
Policy, each by the addition of a rider for which you would pay an
additional monthly fee. REFER TO "HOW TO PURCHASE A POLICY AND PAY PREMIUMS
-- SUPPLEMENTAL INSURANCE BENEFITS".
-1-
<PAGE>
INVESTMENT ALTERNATIVES FOR YOUR ACCOUNT BALANCE
----------------------------------------------------------------------------
You may allocate your premiums among the General Account and one or more of
the Separate Account Funds. You may change your allocation instructions at
any time for future premiums. You may transfer all or part of your Account
Balance among the available Investment Alternatives at any time. REFER TO
"ACCESS TO YOUR ACCOUNT BALANCE"
THE GENERAL ACCOUNT. We pay interest on the portion of your Account Balance
you allocate to our General Account, at an effective annual rate of at least
3%. In our discretion, we change the current rate of interest from time to
time. We have the full investment risk for amounts you allocate to the
General Account. We sometimes refer to the General Account Investment
Alternative as the Interest Accumulation Account.
This Prospectus serves as a disclosure document for the Separate Account
Investment Alternatives under the Policies. REFER TO "OUR GENERAL ACCOUNT"
FOR A BRIEF DESCRIPTION OF THE GENERAL ACCOUNT.
THE SEPARATE ACCOUNT. The Separate Account has Funds, or sub-accounts. The
name of each Fund corresponds to the name of its Underlying Fund. When you
allocate premiums or transfer Account Balance to a Separate Account Fund,
the Fund purchases shares in its Underlying Fund. A Separate Account Fund is
called a "variable option", because you have the investment risk that your
Account Balance in the Fund will increase or decrease based on the
investment performance of the Underlying Fund. The Mid-Cap Equity Index Fund
will be available to you upon its approval by your State's insurance
department.
UNDERLYING FUNDS INVESTED IN BY THE SEPARATE ACCOUNT
----------------------------------------------------------------------------
The Separate Account Funds currently invest in seventeen Underlying Funds,
which have different investment objectives, investment policies and risks.
YOU SHOULD REFER TO "UNDERLYING FUNDS INVESTED IN BY OUR SEPARATE ACCOUNT"
FOR MORE INFORMATION ABOUT THE UNDERLYING FUNDS' INVESTMENT OBJECTIVES, AND
TO THE PROSPECTUSES OF THE UNDERLYING FUNDS THAT ARE ATTACHED TO THIS
PROSPECTUS.
CHARGES UNDER YOUR POLICY
----------------------------------------------------------------------------
We deduct several charges from the net assets of each Separate Account Fund.
REFER TO "CHARGES AND DEDUCTIONS YOU WILL PAY". The charges include:
o an administrative expense charge at an annual rate of 0.40% (except
that currently the annual rate for the American Century VP Capital
Appreciation Fund is 0.20% and the annual rate for the Funds that
invest in the Fidelity Portfolios is 0.30%); and
o a risk charge at an annual rate of 0.70% for assuming certain mortality
risks under the Policies and a charge at an annual rate of 0.15% for
assuming certain expense risks under the Policies.
We deduct certain monthly charges directly from your Account Balance. REFER
TO "CHARGES AND DEDUCTIONS YOU
WILL PAY". The monthly charges include:
o an administrative expense charge of $2.00 if you have an Account
Balance of $2,400 or more during the month, or 1/12 of 1% of the
Account Balance (which will be less than $2.00) if your Account Balance
is less than $2,400 in any month;
o a cost of insurance charge to pay for the life insurance we provide
under the Policy; and
o a deduction to pay the cost of any riders to your Policy.
Cost of insurance rates will depend on the age of the insured person at the
beginning of the most recent Policy Year and whether the insured person is
in a standard or substandard premium class. For Policies without a Payroll
Deduction Rider, the gender of the insured person will impact cost of
insurance rates, with different rates for men and women. For Policies with a
Payroll Deduction Rider, cost of insurance rates are unisex.
EXPENSES OF THE UNDERLYING FUNDS. A Separate Account Fund's value is based
on the shares it owns of the Underlying Fund. As a result, the investment
management fees and other expenses the Underlying Funds pay will impact the
value of the Separate Account Funds. The annual rates at which the
Underlying Funds paid advisory fees ranged from .125% to 1.00% of average
net assets during 1998, and their total annual expenses ranged from .125% to
1.00% of average net assets during 1998. You should refer to the attached
prospectuses of the Underlying Funds for a complete description of their
expenses and deductions from net assets.
-2-
<PAGE>
PARTIAL WITHDRAWALS AND SURRENDER OF POLICY; TRANSFERS OF ACCOUNT BALANCE
----------------------------------------------------------------------------
You may make partial withdrawals of your Account Balance (minus any Policy
Loans) or surrender the Policy and receive the Surrender Proceeds due under
the Policy. You make take any of these actions prior to the Maturity Date of
the Policy when the insured person is still living. We may take up to seven
days following receipt of your withdrawal request to process the request and
mail a check to you. REFER TO "ACCESS TO YOUR ACCOUNT BALANCE".
You may transfer all or a portion of your Account Balance among the
Investment Alternatives. REFER TO "ACCESS TO YOUR ACCOUNT BALANCE -- YOUR
RIGHT TO TRANSFER AMONG INVESTMENT ALTERNATIVES".
We currently do not assess a charge for transfers or withdrawals under the
Policies. We reserve the right, however, to impose a charge for transfers or
withdrawals in the future.
YOUR RIGHT TO BORROW FROM THE POLICY
----------------------------------------------------------------------------
You may borrow up to 95% of your Account Balance in the General Account,
minus any existing Policy Loans. Each Policy Loan must be for at least $500,
and you must assign the Policy to us as collateral. We will charge you
interest on the Policy Loan, and we may change the interest rate from time
to time. We deduct any Policy Loans from the amount otherwise due you upon
the surrender or maturity of the Policy or from the death proceeds due upon
the death of the insured person. REFER TO "ACCESS TO YOUR ACCOUNT BALANCE --
POLICY LOANS".
HOW TO MAKE AN ALLOCATION CHANGE, TRANSFER, WITHDRAWAL, SURRENDER OR POLICY
LOAN REQUEST
----------------------------------------------------------------------------
IN WRITING. You may give instructions in writing on our forms for allocation
changes, transfers of Account Balance among Investment Alternatives, partial
withdrawals of Account Balance, surrender of the Policy and Policy loans.
REFER TO "HOW TO CONTACT US AND GIVE US INSTRUCTIONS".
BY TELEPHONE. Using a Personal Identification Number (PIN) we have assigned,
you may call us at 1-800-468-3785 for certain transactions and information.
REFER TO "HOW TO CONTACT US AND GIVE US INSTRUCTIONS".
OUR HOME OFFICE, PROCESSING CENTER AND REGIONAL OFFICES. Our home office
address is 320 Park Avenue, New York, New York 10022, attention Eldon
Wonacott, Senior Vice President. The address for our Financial Transactions
Processing Center, 1150 Broken Sound Parkway NW, Boca Raton, FL 33487. You
may check the address for the Regional Office that provides services for
your Policy by calling 1-800-468-3785 or by visiting our Website at
www.mutualofamerica.com.
CONFIRMATION STATEMENTS. We will send you confirmation statements (which may
be your quarterly statements) for your allocation changes and for your
premiums, transfers and withdrawals of Account Balance and Policy loans. You
must promptly notify us of any error in a confirmation statement, or you
will give up your right to have us correct the error.
ACCELERATED BENEFIT FOR TERMINAL ILLNESS
----------------------------------------------------------------------------
Depending on the laws of your state, an Accelerated Benefit may be available
to you under your Policy or by rider to the Policy. Under this Benefit, you
may receive a portion of the Death Proceeds that would be payable if the
insured person died. The Accelerated Benefit is available only when the
insured person is determined to have less than one year to live. You must
pay an administrative fee of $250 at the time we pay the Accelerated
Benefit. REFER TO "ACCESS TO YOUR ACCOUNT BALANCE -- ACCELERATED BENEFIT FOR
TERMINAL ILLNESS" AND "CHARGES AND DEDUCTIONS YOU WILL PAY -- ACCELERATED
BENEFIT FEE".
YOUR INITIAL RIGHT TO RETURN POLICY
----------------------------------------------------------------------------
For a period of 10 days after you receive your Policy (or a longer period if
required by applicable state law when you purchase a Policy by direct mail
or as a replacement policy), you may return it and have your premiums
returned. REFER TO "HOW TO PURCHASE A POLICY AND PAY PREMIUMS -- POLICY
ISSUE".
FEDERAL TAX CONSIDERATIONS
----------------------------------------------------------------------------
For purposes of Federal income taxation, you are treated as not receiving
your Account Balance until you take a distribution from the Policy. As a
consequence, you do not pay taxes on the investment income and interest
-3-
<PAGE>
credited to your Account Balance until you withdraw all or a portion of your
Account Balance. This information about Federal taxation is based on our
belief that a Policy we issue on a standard premium class basis should meet
the Code's definition of a life insurance contract. There is less guidance
available to determine whether a Policy issued on a substandard premium
class basis would satisfy that definition.
DISTRIBUTIONS UNDER THE POLICY. Your tax treatment for Policy withdrawals
and loans depends on whether or not your Policy is a "Modified Endowment
Policy".
If your Policy is not a Modified Endowment Contract:
o distributions are treated first as a return of investment (premiums) in
the Policy and then a disbursement of taxable income;
o Policy Loans are not treated as distributions; and
o neither distributions nor Policy Loans are subject to the 10% penalty
tax.
Your Policy may be treated as a special type of life insurance called a
"Modified Endowment Contract", if the cumulative premiums you have paid are
considered, under the Code, to be too large compared to the death benefit
payable. If your Policy is a Modified Endowment Contract:
o all pre-death distributions, including Policy Loans, are treated first
as a distribution of taxable income and then as a return of investment
(premiums) in the Policy; and
o if you have not reached the age of 59 1/2, a distribution usually is
subject to a 10% penalty tax.
If you send us a premium that would cause your Policy to become a Modified
Endowment Contract, we will notify you. Our notice will state that unless
you request a refund of the excess premium, your Policy will become a
Modified Endowment Contract. REFER TO "FEDERAL TAX CONSIDERATIONS".
DEATH BENEFITS. Your beneficiary receives death benefits payable under the
Policy on a tax-free basis, except in limited circumstances. If you are the
Policyowner and also the insured person, the death benefit amount will be
included in your estate in most circumstances.
-4-
<PAGE>
HOW TO PURCHASE A POLICY AND PAY PREMIUMS
POLICY ISSUE
----------------------------------------------------------------------------
An applicant must submit to us a completed application for a Policy. The
minimum Face Amount for a Policy is $25,000, except that the minimum Face
Amount is $5,000 for any Policy with a Payroll Deduction Rider. We reserve
the right to decline to issue a Policy with a Face Amount of more than $1
million.
An employee participating in a Payroll Deduction Program may apply for
insurance for his or her spouse and minor children, or the spouse and minor
children may apply as owners of Policies. All Policies we issue in
connection with a Payroll Deduction Program will have a Payroll Deduction
Rider.
Before issuing a Policy, we will require evidence of insurability
satisfactory to us.
o If the person to be insured is age 50 or less and the Policy would have
a Face Amount of $100,000 or less, we ordinarily will determine
insurability based on information from the application.
o We usually will require a medical underwriting for a Policy with a Face
Amount above $100,000 or if the person to be insured is age 50 or
older.
We may use outside sources to verify information contained in the
application. A person who does not meet standard underwriting requirements
still may be eligible to purchase a Policy, but we will increase the cost of
insurance charges on the Policy to reflect the additional mortality risks we
assume in insuring a person who is a "substandard risk". A person who is a
"substandard risk" has a greater mortality risk based on unfavorable health
characteristics.
For applications under a Payroll Deduction Program, we may use group
underwriting standards based on the nature of the employer's business and
the percentage of employees participating in the Program. Group underwriting
standards provide for guaranteed issue of a Policy in certain circumstances.
We will issue a Policy following our determination of the insurability and
rating class of the person to be insured and our approval of the
application. The Policy generally will be effective on the date our
underwriting requirements have been met and we receive the first scheduled
premium payment. The Policy Specification Pages of your Policy will show the
Policy Issue Date.
RIGHT TO EXAMINE POLICY. You have a right to examine the Policy. If, for any
reason, you are not satisfied with the Policy, you may cancel it by
returning it to us within 10 days after you receive it, along with a written
request for cancellation. Upon cancellation, we will refund any premiums
that were paid on the Policy. Some states may require us to provide you with
a longer period to examine the Policy. For example, you may have up to 30
days if you purchased the Policy in response to a direct mailing or the
Policy is replacing another life insurance policy.
BASIC DEATH BENEFIT PLAN
----------------------------------------------------------------------------
In your application for a Policy, you will choose a Basic Death Benefit. You
have the option of either a Face Amount Plan or a Face Amount Plus Plan. SEE
"Insurance Benefits Upon Death of Insured Person".
Under a Face Amount Plan:
o the death benefit generally will be the Face Amount, and
o premiums you pay and increases in your Account Balance from investment
performance of the Funds will reduce the amount for which we are "at
risk" in providing insurance coverage and on which we impose cost of
insurance charges (SEE "Charges and Deductions You Will Pay").
Under a Face Amount Plus Plan:
o the death benefit generally will be the Face Amount PLUS the Account
Balance, and
o premiums you pay and increases in your Account Balance from investment
performance of the Funds will increase the death benefit while leaving
unchanged the amount on which you must pay cost of insurance charges.
-5-
<PAGE>
CHANGE OF BASIC DEATH BENEFIT PLAN. You may request a change in your Basic
Death Benefit plan. When we make the change, the Basic Death Benefit payable
on the effective date of the change is the same as it would have been
without the requested change, as follows:
o if you have a Face Amount Plan, you can change it to a Face Amount Plus
Plan, which will decrease your Policy's Face Amount by the amount of
the Account Balance; and
o if you have a Face Amount Plus Plan, you may be able to change it to a
Face Amount Plan, which would increase your Policy's Face Amount by the
amount of the Account Balance, except that we may require current
evidence of insurability prior to approving a change from a Face Amount
Plus Plan to a Face Amount Plan.
A change in Basic Death Benefit plan will become effective as of the first
Monthly Anniversary Day on or after we receive at our Processing Office your
Written Request (which, in the case of a change that would increase your
Policy's Face Amount, may include evidence acceptable to us of current
insurability).
SUPPLEMENTAL INSURANCE BENEFITS
----------------------------------------------------------------------------
We may make one or more supplemental insurance benefits available by rider
to your Policy, including ones providing accidental death coverage and
coverage for children of an insured person. Currently, supplemental
insurance benefits are available only for Policies with Payroll Deduction
Riders. We will charge you a monthly fee for any supplemental insurance
benefits you select. SEE "Charges and Deductions You Will Pay".
Under an accidental death benefit rider, if the insured person dies as a
result of an accidental bodily injury, we will pay an accidental death
benefit equal to the initial Face Amount of the Policy, up to a maximum of
$200,000.
You may obtain insurance for all your unmarried dependent children between
14 days and 18 years of age under a children's term rider. After we have
issued a rider we automatically insure each additional child when 14 days
old at no increase in premium. Insurance continues to age 21 of the child or
to age 65 of the primary insured, whichever is earlier. Upon reaching age
21, each covered child has the opportunity of purchasing $5,000 of life
insurance for each $1,000 of children's term rider. For a Policy purchased
when a child reaches age 21, we will charge premiums at our standard rates
then in effect.
SCHEDULED PREMIUMS
----------------------------------------------------------------------------
For your convenience, we will specify a "scheduled premium" to be paid at
intervals you select in your application. We will send you notices of when
you should pay scheduled premiums, unless you have authorized withdrawals
from your bank or other account to pay scheduled premiums or your Policy has
a Payroll Deduction Rider. If your Policy does not have a Payroll Deduction
Rider, your scheduled premium must be at least $50.
If your Policy has a Payroll Deduction Rider:
o there is no minimum amount of scheduled premiums;
o on each of your pay dates, scheduled premiums for each Policy you own
and, if applicable, each Policy owned by your spouse and minor
children, will be deducted from your payroll amount; and
o if your employer's participation in a Payroll Deduction Program ends or
you terminate employment with the employer, we will require scheduled
premiums to be paid not more frequently than monthly.
We will advise you prior to Policy issuance whether or not the payment of
proposed scheduled premiums for
your Policy would cause the Policy to be a Modified Endowment Contract. SEE
"Federal Tax Considerations".
You ordinarily may change the amount or timing of your scheduled premiums at
any time. However, you may not decrease scheduled premiums to less than the
applicable minimum. We will require evidence of insurability for an increase
in scheduled premiums when the increase would increase your Policy's Basic
Death Benefit. SEE "Insurance Benefits Upon Death of Insured Person" below.
-6-
<PAGE>
EFFECT OF PAYING SCHEDULED PREMIUMS. Your failure to pay one or more
scheduled premiums will not necessarily cause your Policy to lapse; timely
payment of all scheduled premiums will not assure that your Policy will
continue in force.
o Whether your Policy continues in force or lapses does not depend on
whether scheduled premiums have been made, but rather whether, on each
Monthly Anniversary Day, your Account Balance is sufficient to permit
the deduction of all charges due on that day. SEE "Lapse and
Reinstatement" below.
o We permit you to pay scheduled premiums, even if the payment would
increase the Basic Death Benefit as a result of the Corridor
Percentages described below. SEE "Insurance Benefits Upon Death of
Insured Person."
UNSCHEDULED PREMIUMS
----------------------------------------------------------------------------
You ordinarily may pay unscheduled premiums of at least $50 at any time, but
you may not pay more than $10,000 in unscheduled premiums during any Policy
Year. We will require evidence of insurability if the unscheduled premium
would increase the Policy's Basic Death Benefit. SEE "Insurance Benefits
Upon Death of Insured Person" below.
LIMITATION ON PREMIUMS
----------------------------------------------------------------------------
We will refuse to accept and will return to you premium payments, or any
portion thereof, (whether scheduled or unscheduled) that would cause your
Policy to lose its status as a life insurance policy under the Code. SEE
"Federal Tax Considerations".
ALLOCATION OF PREMIUMS
----------------------------------------------------------------------------
You may allocate your premium among the Investment Alternatives. The Mid-Cap
Equity Index Fund may not be available to Policyowners in all states, due to
insurance department regulatory filings.
You may tell us how to allocate your premium by sending us instructions with
the premium. If you do not send instructions, or we receive the premium for
a Policy with a Payroll Deduction Rider, we will allocate the premium on the
basis of your allocation request currently on file at our home office. Your
request for allocation must specify the percentage, in any whole percentage
from 0% to 100%, of each premium to be allocated to each of the Investment
Alternatives.
You may change the allocation instructions for future premiums, at any time.
You should periodically review your allocations in light of market
conditions and your financial needs. A change in allocation will be
effective when we have received it and had the opportunity to act on your
request.
DOLLAR COST AVERAGING
----------------------------------------------------------------------------
We offer a Dollar Cost Averaging program that allows you to authorize
automatic monthly transfers of a specified percentage or dollar amount from
the General Account to any of the Separate Account Funds. Each transfer
under the Dollar Cost Averaging program must be at least $100, and you must
schedule at least 12 transfers. We may discontinue the program at any time.
Your participation in the Dollar Cost Averaging program will automatically
end if your Account Balance in the General Account, minus any outstanding
Policy Loans, is insufficient to support the next scheduled transfer. You
may request termination of participation in the program at any time.
Dollar cost averaging generally reduces the risk of purchasing at the top of
a market cycle. This effect occurs from investing over a period of time
instead of investing only on one day. Your average cost of purchasing
Accumulation Units in the Separate Account Funds is reduced to less than the
average value of the Units on the same purchase dates, because you are
credited with more Units when the Unit values are lower than when Unit
values are higher. Dollar cost averaging does not assure you of a profit,
nor does it protect against losses in a declining market.
-7-
<PAGE>
CHANGES IN THE FACE AMOUNT OF YOUR POLICY
----------------------------------------------------------------------------
From time to time, your life insurance needs may change. The Policy permits
you to increase or decrease the Face Amount of your Policy in certain
circumstances.
o To change your Face Amount, you must submit to our Processing Office a
Written Request.
o A change in Face Amount may not cause the Face Amount to be less than
$25,000 ($5,000 for Policies with a Payroll Deduction Rider) and may
not cause the Policy to cease to qualify as life insurance under the
Code.
o We reserve the right to limit the amount of any increase or decrease.
o The current minimum for any requested change in Face Amount is $5,000.
If the insured is not living on the effective date of a change, the change
will not take effect. Following any change in Face Amount, we will send you
new Policy Specifications Pages that update the information to reflect the
change. Certain reductions in Face Amount may cause your Policy to become a
Modified Endowment Contract. SEE "Federal Tax Considerations."
Your request for an increase in Face Amount must be accompanied by evidence
satisfactory to us that the insured is insurable. Cost of insurance charges
on the additional Face Amount will be based on the insured person's premium
class at the time of the increase. An increase in Face Amount will be
effective only if and when we expressly approve it.
The effective date of a decrease in Face Amount will be the first Monthly
Anniversary Day on or after the date we receive your request. A decrease in
Face Amount will first reduce any prior increases in Face Amount, in reverse
of the order in which they occurred (in other words, the most recent Face
Amount increase will be the first reduced), and then will reduce the
original Face Amount.
POLICY LAPSE AND REINSTATEMENT
----------------------------------------------------------------------------
If our deduction of monthly charges when due would result in your Account
Balance, minus any outstanding Policy Loans, being less than zero, a 61-day
"grace period" will begin. The Policy will remain in effect during the grace
period. If the insured person dies during the grace period, any Death
Proceeds due will be reduced by the amount of any overdue monthly deduction.
We will mail a notice to you and any assignee on our records, informing you
of when the grace period will expire and the minimum amount of premium
payment that must be paid prior to the end of the grace period in order to
prevent the Policy from lapsing. If we do not receive payment in our
Processing Office prior to the expiration of the grace period, the Policy
will lapse and have no value.
You can reinstate a lapsed Policy during the insured person's lifetime if
all of the following conditions are met:
(a) The Policy lapsed because the grace period ended without the required
payment having been made.
(b) The Policy is reinstated within three years of the end of the grace
period.
(c) The Policy has not been surrendered.
(d) We receive from you evidence that the insured person is insurable by our
standards.
(e) You pay, at time of reinstatement, premiums sufficient to keep the
Policy in effect for at least two months.
(f) You pay any insurance charges not paid during the grace period.
(g) We approve the reinstatement in accordance with our established
guidelines for reinstatement.
Reinstatement of a lapsed Policy will become effective on the date we
approve it. The Account Balance on the effective date of reinstatement will
be whatever the premium paid at such time will provide. We base cost of
insurance charges subsequent to a reinstatement upon the insured person's
premium class as of the reinstatement rather than his or her premium class
when we initially issued the Policy.
-8-
<PAGE>
UNDERLYING FUNDS INVESTED IN BY OUR SEPARATE ACCOUNT
Below are summaries of the Underlying Funds' investment objectives and
certain investment policies. The Underlying Funds sell their shares to the
separate accounts of insurance companies and do not offer them for sale to
the general public. You will find more detailed information about the
Underlying Funds in their current prospectuses, which are attached to this
Prospectus. You should read each prospectus for a complete evaluation of the
Underlying Funds, their investment objectives, principal investment
strategies and the risks related to those strategies.
EQUITY INDEX FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the Equity Index Fund is to provide investment
results that correspond to the extent practical to the price and yield
performance of publicly traded common stocks in the aggregate, as
represented by the Standard & Poor's Composite Index of 500 Stocks (the S&P
500 INDEX*).
ALL AMERICA FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the All America Fund is to outperform the S&P
500 Index. The objective for approximately 60% of the assets of the All
America Fund (the INDEXED ASSETS) is to provide investment results that to
the extent practical correspond to the price and yield performance of
publicly traded common stocks in the aggregate, as represented by the S&P
500 Index.
The investment objective for the remaining approximately 40% of the assets
(the ACTIVE ASSETS) is to achieve a high level of total return, through both
appreciation of capital and, to a lesser extent, current income, by means of
a diversified portfolio of securities that may include common stocks,
securities convertible into common stocks, bonds and money market
instruments.
MID-CAP EQUITY INDEX FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the Mid-Cap Equity Index Fund is to provide
investment results that correspond to the extent practical to the price and
yield performance of publicly traded common stocks in the aggregate, as
represented by the S&P MidCap 400 Index*.
AGGRESSIVE EQUITY FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the Aggressive Equity Fund is capital growth, by
investing approximately 50% of its assets in companies believed to possess
above-average growth potential and approximately 50% of its assets in
companies believed to possess valuable assets or whose securities are
undervalued in the marketplace in relation to factors such as the company's
assets, earnings or growth potential. In utilizing the investment styles of
growth and value stock selection, the Adviser anticipates that the
percentage of the Fund's assets in either category will range between 40%
and 60%.
COMPOSITE FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the Composite Fund is to achieve as high a total
rate of return, through both appreciation of capital and current income, as
is consistent with prudent investment risk by means of a diversified
portfolio of publicly-traded common stocks, publicly-traded debt securities
and money market instruments. The Fund seeks to achieve long-term growth of
its capital and increasing income by investments in common stock and other
equity-type securities, and a high level of current income through
investments in publicly-traded debt securities and money market instruments.
----------
* "S&P", "S&P 500" and "S&P MidCap 400" are trademarks of Standard & Poor's
Corporation. The Funds are not sponsored, endorsed, sold or promoted by
Standard & Poor's Corporation.
-9-
<PAGE>
BOND FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The primary investment objective of the Bond Fund is to provide as high a
level of current income over time as is believed to be consistent with
prudent investment risk. A secondary objective is preservation of capital.
The Bond Fund seeks to achieve its objective by investing primarily in
investment grade, publicly-traded debt securities, such as bonds, notes,
debentures and mortgage-backed securities. The Bond Fund may invest to a
limited extent in lower-rated or unrated securities.
MID-TERM BOND FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The primary investment objective of the Mid-Term Bond Fund is to provide as
high a level of current income over time as is believed to be consistent
with prudent investment risk. A secondary objective is preservation of
capital.
The Mid-Term Bond Fund seeks to achieve its objective by investing primarily
in investment grade, publicly-traded debt securities, such as bonds, notes,
debentures and mortgage-backed securities, that produce a portfolio with an
average maturity of three to seven years.
SHORT-TERM BOND FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The primary investment objective of the Short-Term Bond Fund is to provide
as high a level of current income over time as is believed to be consistent
with prudent investment risk. A secondary objective is preservation of
capital.
The Short-Term Bond Fund seeks to achieve its objective by investing
primarily in investment grade, publicly-traded debt securities, such as
bonds, notes, debentures and mortgage-backed securities, that will produce a
portfolio with an average maturity of one to three years.
MONEY MARKET FUND OF THE INVESTMENT COMPANY
----------------------------------------------------------------------------
The investment objective of the Money Market Fund is the realization of high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital.
The Money Market Fund invests only in money market instruments and other
short-term securities. Neither the Federal Deposit Insurance Corporation nor
any other U.S. Government agency insures or guarantees investments by the
Separate Account in shares of the Money Market Fund.
FIDELITY VIP EQUITY-INCOME PORTFOLIO
----------------------------------------------------------------------------
The investment objective of the Equity-Income Portfolio is reasonable income
by investing primarily in income-producing equity securities. In choosing
these securities, the Portfolio also considers the potential for capital
appreciation. The Portfolio's goal is to achieve a yield that exceeds the
composite yield on the securities comprising the S&P 500 Index.
FIDELITY VIP II CONTRAFUND PORTFOLIO
----------------------------------------------------------------------------
The investment objective of the Contrafund Portfolio is capital growth. It
seeks to increase the value of an investment in the Portfolio over the long
term by investing mainly in securities of companies that are undervalued or
out-of-favor. These securities may be issued by domestic or foreign
companies and many may not be well known. The Portfolio usually invests
primarily in common stock and securities convertible into common stock, but
it has the flexibility to invest in any type of security that may produce
capital appreciation.
FIDELITY VIP II ASSET MANAGER PORTFOLIO
----------------------------------------------------------------------------
The investment objective of the Asset Manager Portfolio is high total return
with reduced risk over the long term by allocating its assets among domestic
and foreign stocks, bonds and short-term fixed-income instruments.
The Portfolio's adviser normally allocates the Portfolio's assets among the
three asset classes within the following investment parameters: 0-50% in
short-term/money market instruments; 20-60% in bonds; and 30-70% in stocks.
-10-
<PAGE>
The expected "neutral mix", which the Portfolio's adviser would expect over
the long term, is 10% in short-term/money market instruments, 40% in bonds
and 50% in stocks.
SCUDDER CAPITAL GROWTH PORTFOLIO
----------------------------------------------------------------------------
The investment objective of Scudder Capital Growth Portfolio is to maximize
long-term capital growth through a broad and flexible investment program.
The Portfolio invests in marketable securities, principally common stocks
and, consistent with its objective of long-term capital growth, preferred
stocks. The Portfolio may invest up to 25% of its assets in short-term debt
instruments, depending on market and economic conditions.
SCUDDER BOND PORTFOLIO
----------------------------------------------------------------------------
The investment objective of the Scudder Bond Portfolio is to invest for a
high level of income consistent with a high quality portfolio of debt
securities.
To attempt to achieve its objective, the Portfolio invests principally in
investment grade bonds, including those issued by the U.S. Government and
its agencies and by corporations, and other notes and bonds paying high
current income. The Portfolio may invest up to 20% of its assets in
non-investment grade debt securities.
SCUDDER INTERNATIONAL PORTFOLIO
----------------------------------------------------------------------------
The investment objective of the Scudder International Portfolio is long-term
growth of capital primarily through diversified holdings of marketable
foreign equity investments.
The Portfolio invests primarily in equity securities of established
companies that do business primarily outside the United States and that are
listed on foreign exchanges. In the event of exceptional conditions abroad,
the Portfolio may temporarily invest all or a portion of its assets in
Canadian or U.S. Government obligations or currencies, or securities of
companies incorporated in and having their principal activities in Canada or
the United States.
AMERICAN CENTURY VP CAPITAL APPRECIATION FUND
----------------------------------------------------------------------------
The investment objective of the American Century VP Capital Appreciation
Fund is capital growth by investing primarily in common stocks (including
securities convertible into common stock) and other securities that meet
certain fundamental and technical standards of selection and have, in the
opinion of the Fund's manager, better-than-average prospects for
appreciation.
CALVERT SOCIAL BALANCED PORTFOLIO
----------------------------------------------------------------------------
The investment objective of Calvert Social Balanced Portfolio is to achieve
a total return above the rate of inflation through an actively managed
non-diversified portfolio of common and preferred stocks, bonds and money
market instruments that offer income and capital growth opportunity and that
satisfy the social concern criteria established for the Portfolio.
-11-
<PAGE>
INVESTMENT ADVISERS FOR THE UNDERLYING FUNDS
----------------------------------------------------------------------------
MUTUAL OF AMERICA INVESTMENT CORPORATION: The Investment Company receives
investment advice from Mutual of America Capital Management Corporation (the
ADVISER), an indirect wholly-owned subsidiary of Mutual of America. For the
Active Assets of the All America Fund, the Adviser has entered into
subadvisory agreements with Palley-Needelman Asset Management, Inc., Oak
Associates, Ltd. and Fred Alger Management, Inc. Each of these subadvisers
provides investment advice for approximately 10% of the All America Fund's
assets.
SCUDDER VARIABLE LIFE INVESTMENT FUND: The Scudder Capital Growth, Bond and
International Portfolios receive investment advice from Scudder Kemper
Investments, Inc.
FIDELITY PORTFOLIOS: The Equity-Income Portfolio, Contrafund Portfolio and
Asset Manager Portfolio receive investment advice from Fidelity Management &
Research Company.
CALVERT SOCIAL BALANCED PORTFOLIO: The Portfolio receives investment advice
from Calvert Asset Management Company, Inc., which has entered into a
subadvisory agreement with NCM Capital Management Group, Inc. for the equity
portion of the Portfolio.
AMERICAN CENTURY VP CAPITAL APPRECIATION FUND: The Fund receives investment
advice from American Century Investment Management, Inc.
SHARED FUND ARRANGEMENTS. Shares of the Fidelity Portfolios, the Scudder
Portfolios, the American Century VP Capital Appreciation Fund and the
Calvert Social Balanced Portfolio (together, the SHARED FUNDS) currently are
available to the separate accounts of a number of insurance companies.
The Board of Directors (or Trustees) of each Shared Fund is responsible for
monitoring that Fund for the existence of any material irreconcilable
conflict between the interests of participants in all separate accounts that
invest in the Fund. The Board must determine what action, if any, the Shared
Fund should take in response to an irreconcilable conflict. If we believe
that a response does not sufficiently protect our Policyowners, we will take
appropriate action, and we may modify or reduce the Investment Alternatives
available to you.
-12-
<PAGE>
YOUR ACCOUNT BALANCE IN THE SEPARATE ACCOUNT FUNDS
ACCUMULATION UNITS IN SEPARATE ACCOUNT FUNDS
----------------------------------------------------------------------------
We use Accumulation Units to represent Account Balances in each Separate
Account Fund. We separately value the Accumulation Unit for each Fund of the
Separate Account.
We determine your Account Balance in the Separate Account as of any
Valuation Day by multiplying the number of Accumulation Units credited to
you in each Fund of the Separate Account by the Accumulation Unit value of
that Fund at the end of the Valuation Day.
Investment experience by the Separate Account Funds does not impact the
number of Accumulation Units credited to your Account Balance. The value of
an Accumulation Unit for a Fund, however, will change as a result of the
Fund's investment experience, in the manner described below.
CALCULATION OF ACCUMULATION UNIT VALUES
----------------------------------------------------------------------------
We determine Accumulation Unit values for the Funds as of the close of
business on each Valuation Day (generally at the close of the New York Stock
Exchange). A Valuation Period is from the close of a Valuation Day until the
close of the next Valuation Day.
The dollar value of an Accumulation Unit for each Fund of the Separate
Account will vary from Valuation Period to Valuation Period. The changes in
Accumulation Unit values for the Separate Account Funds will reflect:
o changes in the net asset values of the Underlying Funds, depending on
the investment experience and expenses of the Underlying Funds, and
o Separate Account charges under the Policies, with the annual rates
calculated as a daily charge. (SEE "Charges and Deductions You Will
Pay".)
ACCUMULATION UNIT VALUES FOR TRANSACTIONS
----------------------------------------------------------------------------
When you allocate premiums to a Separate Account Fund or transfer any
Account Balance to a Fund, we credit Accumulation Units to your Account
Balance. When you withdraw or transfer any Account Balance from a Separate
Account Fund, we cancel Accumulation Units from your Account Balance.
The Accumulation Unit value for a transaction is the Unit value for the
Valuation Period during which we receive the premium or request. As a
result, we will effect the transaction at the Accumulation Unit value we
determine at the NEXT CLOSE of a Valuation Day (generally the close of the
New York Stock Exchange on that business day).
We calculate the number of Accumulation Units for a particular Fund by
dividing the dollar amount you have allocated to, or withdrawn from, the
Fund during the Valuation Period by the applicable Accumulation Unit value
for that Valuation Period. We round the resulting number of Accumulation
Units to two decimal places.
-13-
<PAGE>
OUR GENERAL ACCOUNT
SCOPE OF PROSPECTUS
----------------------------------------------------------------------------
This Prospectus serves as a disclosure document for the variable, or
Separate Account, interests under the Policies. We have not registered the
Policies under the Securities Act of 1933 for allocations to the General
Account, nor is the General Account registered as an investment company
under the 1940 Act. The staff of the Commission has not reviewed the
disclosures in this Prospectus that relate to the General Account.
Disclosures regarding the fixed portion of the Policies and the General
Account, however, generally are subject to certain provisions of the Federal
securities laws relating to the accuracy and completeness of statements made
in prospectuses.
GENERAL DESCRIPTION
----------------------------------------------------------------------------
Amounts that you allocate to the General Account become part of our general
assets. Our General Account supports our insurance and annuity obligations.
The General Account consists of all of our general assets, other than those
in the Separate Account and other segregated asset accounts.
We bear the full investment risk for all amounts that Policyowners allocate
to the General Account. We have sole discretion to invest the assets of the
General Account, subject to applicable law. Your allocation of Account
Balance to the General Account does not entitle you to share in the
investment experience of the General Account.
We guarantee that we will credit interest to Policyowners' Account Balances
in the General Account at an effective annual rate of at least 3%. In our
sole discretion, we may credit a higher rate of interest to Account Balances
in the General Account, although WE ARE NOT OBLIGATED TO CREDIT INTEREST IN
EXCESS OF 3% PER YEAR. Your initial Policy Specification Pages will show the
initial current interest rate, and we will send you notice when we change
the current rate. We credit interest daily and compound it annually. The
interest rates may be different for your Account Balance in the General
Account representing borrowed and unborrowed amounts under your Policy. SEE
"Access to Your Account Balance -- Policy Loans".
TRANSFERS AND WITHDRAWALS
----------------------------------------------------------------------------
You may transfer any portion of your Account Balance to or from the General
Account and may withdraw any portion of your Account Balance from the
General Account, except that you may not withdraw from the General Account
the amount of any Policy Loans you have outstanding. SEE "Your Right to
Transfer Among Investment Alternatives" and "Policy Loans" under "Access to
Your Account Balance" below. We have the right to delay transfers and
withdrawals from the General Account for up to six months following the date
that we receive the transaction request.
-14-
<PAGE>
ACCESS TO YOUR ACCOUNT BALANCE
You may obtain all or part of your Account Balance by surrendering your
Policy, by making a partial withdrawal from your Policy or by taking a
Policy Loan. You also may transfer all or any part of your Account Balance
among the available Investment Alternatives. If the insured person has a
terminal illness, you may be eligible to obtain an Accelerated Benefit
payment, as described below. Certain of these transactions may have tax
consequences, and some transactions may cause your Policy to become a
Modified Endowment Contract. SEE "Federal Tax Considerations" below.
SURRENDER OF POLICY
----------------------------------------------------------------------------
You may surrender your Policy and obtain the Surrender Proceeds at any time
prior to the Maturity Date. Surrender Proceeds equal your Account Balance
minus any Policy Loans you have outstanding at the time of surrender. To
surrender your Policy, you must submit the Policy and a Written Request to
our Processing Office, and the insured person must be alive on the surrender
date. We will calculate the Surrender Proceeds as of the Valid Transaction
Date of the surrender, and all insurance benefits under your Policy will
then cease.
PARTIAL WITHDRAWALS OF ACCOUNT BALANCE
----------------------------------------------------------------------------
You may withdraw any portion of your Account Balance (before the death of
the insured person). A partial withdrawal must be in an amount of at least
$500, may not reduce the Account Balance to less than $100, and cannot
exceed the Account Balance minus any Policy Loans. We reserve the right to
limit the number of partial withdrawals in one Policy Year, although we do
not currently impose a limit.
A partial withdrawal will affect both your Account Balance and the amount
of your Basic Death Benefit.
o If you have a Face Amount Plan, we will reduce both your Account
Balance and your Face Amount by the amount of any withdrawal, and we
will send you revised Policy Specification Pages reflecting the Face
Amount decrease. The reduction in amount of insurance due to a
withdrawal generally will be applied in the order of the effective
dates of such amounts of insurance, the most recent first. We will not
permit a partial withdrawal that would reduce the Face Amount below the
minimum for the Policy.
o If you have a Face Amount Plus Plan, we will reduce your Account
Balance by the amount of the withdrawal.
YOUR RIGHT TO TRANSFER AMONG INVESTMENT ALTERNATIVES
----------------------------------------------------------------------------
You may transfer all or a portion of your Account Balance among Funds of the
Separate Account, and between the Separate Account and the General Account.
There are no tax consequences to you for transfers among Investment
Alternatives. We currently do not impose a charge for transfers, but we
reserve the right to impose a transfer charge in the future.
HOW TO TELL US AN AMOUNT FOR TRANSFERS OR PARTIAL WITHDRAWALS
----------------------------------------------------------------------------
To tell us the amount of your Account Balance to transfer or withdraw, you
may specify to us:
o the dollar amount to be taken from each Investment Alternative,
o for Separate Account Funds, the number of Accumulation Units to be
transferred or withdrawn, or
o the percentage of your Account Balance in a particular Investment
Alternative to be transferred or withdrawn.
For transfers, you also must specify the Investment Alternative(s) to which
you are moving the transferred amount. You should use the form we provide to
give us instructions. Your request for a transfer or withdrawal is not
binding on us until we receive all information necessary to process your
request.
-15-
<PAGE>
POLICY LOANS
----------------------------------------------------------------------------
You may request a Policy Loan only on your Account Balance in the General
Account. You will pay interest on the Policy Loan, but the amount we hold in
the General Account as collateral for your Policy Loan will accrue interest
at a rate equal to the interest you pay on the Policy Loan minus 2%.
We will grant you a Policy Loan if you meet all of the following
conditions.
o We receive at our Processing Office your Written Request for a loan.
o The amount of the requested loan is 95% or less of your Account Balance
in the General Account minus any existing Policy Loans you have.
o The amount of the requested loan is at least $500.
o The sole security for the loan will be the Policy.
o You have assigned the Policy to us in a form acceptable to us.
o Your Policy is in effect.
The interest rate on a Policy Loan will be the maximum interest rate that we
can charge under applicable law,
and the rate will change from time to time. The maximum interest rate is the
greater of:
o our guaranteed rate of interest (3% per annum) plus 1% per year, or
o the "Published Monthly Average" for the calendar month ending two
months before the date on which the rate is determined. The Published
Monthly Average is the Term Monthly Average Corporates yield shown in
Moody's Corporate Bond Yield Averages published by Moody's Investors
Service, Inc., or any successor thereto or, if that Moody's average is
no longer published, a substantially similar average, as established by
insurance regulation in the jurisdiction in which the Policy is
delivered.
A new interest rate for Policy Loans will be effective beginning on the next
January 1 following a change in
the maximum rate.
o We determine the maximum rate of interest on Policy Loans on each
December 1 after the Policy is issued.
o We may increase the Policy Loan interest rate whenever the maximum
interest rate increases by 0.5% or more a year.
o We will reduce the Policy Loan interest rate whenever the maximum
interest rate decreases by 0.5% or more a year.
We will notify you, and any assignee on our records:
o at the time you take a Policy Loan, of the initial rate of interest on
that loan, and
o at least 28 days before an interest rate increase, of the terms of that
increase.
We will include in each notice the substance of the Policy provisions
permitting an adjustable maximum interest
rate, and we will specify the frequency of interest rate determinations, as
permitted by law.
Interest on Policy Loans accrues daily. Interest is due and payable at the
end of the Policy Month in which the loan is made and at the end of each
following Policy Month. Any interest that you do not pay when due becomes
part of the Policy Loan and increases the loan amount outstanding.
If your Policy Loans exceed your Account Balance on any Monthly Anniversary
Day, the grace period provisions of your Policy will apply. We will notify
you of the minimum payment you will have to make to prevent the Policy from
lapsing at the end of the grace period. SEE "How to Purchase a Policy and
Pay Premiums -- Policy Lapse and Reinstatement".
We will not terminate your Policy in a Policy Year solely as the result of a
change in the interest rate on a Policy Loan during the Policy Year, or in
other words if the Policy Loans exceed your Account Balance only because we
increased the interest rate due on Policy Loans. We will maintain coverage
during that Policy Year until the time at which the Policy otherwise would
have terminated if there had been no interest rate change during that Policy
Year.
-16-
<PAGE>
You can repay Policy Loans in part or in full at any time if the insured
person is living and your Policy is in effect. If you do not repay a Policy
Loan, we will deduct the Policy Loan from your Surrender Proceeds or
Maturity Proceeds or from the Death Proceeds we pay to your
beneficiary(ies).
ACCELERATED BENEFIT FOR TERMINAL ILLNESS
----------------------------------------------------------------------------
You may be eligible, under the terms of your Policy or a rider to your
Policy, to receive a lump-sum Accelerated Benefit, when the insured person
is determined to have a terminal illness (a state of health where the
insured person's life expectancy is 12 months or less).
The amount of the Accelerated Benefit will be the present value (discounted
for a one-year period) of the LESSER OF:
o $200,000, or
o 50% of the Death Proceeds that would be payable upon the Valid
Transaction Date as of which the Accelerated Benefit is calculated.
The interest rate we use in discounting the Accelerated Benefit will not be
more than THE GREATER OF:
o the current yield on 90-day U.S. treasury bills on the Valid
Transaction Date, or
o the then-current maximum rate of interest on Policy Loans.
For the Accelerated Benefit to be payable, the following requirements must
be met.
(a) We must receive at our Processing Office:
o the Policy or, if applicable, the Accelerated Benefit rider;
o your Written Request for payment of the Accelerated Benefit;
o the Written Consent of all irrevocable beneficiaries, if any, under the
Policy; and
o evidence satisfactory to us of the insured person's terminal illness.
(b) The Policy must be in force on the date of your request and must not
have been assigned, other than to us as security for a Policy Loan.
(c) The insured person's terminal illness must not be a consequence of
intentionally self-inflicted injuries.
If the insured person dies before we pay a requested Accelerated Benefit, we
will instead pay the Death Proceeds to the beneficiary in accordance with
the Policy.
The required evidence of terminal illness may include, but is not limited
to:
(a) a certification of state of health by a licensed physician who:
o has examined the insured person,
o is qualified to provide that certification, and
o is neither the Policyowner, the insured person, nor a family member of
either; and
(b) a second opinion or examination by a physician we designate, which
will be at our expense.
After we make an Accelerated Benefit payment, your Policy will continue in
force, but amounts otherwise payable under the Policy and any riders to it
will be reduced.
o The amounts will decrease by the percentage of the Death Proceeds
"accelerated" under the Accelerated Benefit. We calculate the
percentage by dividing the Accelerated Benefit by the Death Proceeds at
the Valid Transaction Date. We reduce the Policy's Face Amount, Account
Balance, Policy Loans and any Proceeds payable after the Accelerated
Benefit payment by that percentage.
o We will base subsequent premiums and cost of insurance charges under
the Policy, however, on the Account Balance and Face Amount that were
in effect prior to the payment of the Accelerated Benefit.
-17-
<PAGE>
MATURITY BENEFIT
----------------------------------------------------------------------------
The Maturity Date for a Policy occurs when the insured person attains the
age of 100. If on the Maturity Date the insured person is living and the
Policy is still in effect, the Maturity Proceeds become payable. The
Maturity Proceeds are equal to your Account Balance, minus any Policy Loans
and unpaid monthly deductions.
We will pay Maturity Proceeds in one lump sum, unless you have selected an
optional payment plan for the Proceeds. A lump sum payment will include
interest from the Maturity Date to the date of payment.
The minimum amount of each payment under any optional payment plan is $100.
Once we have begun making payments under any of these optional payment
plans, the payment plan may not be changed.
The payment plans available for Maturity Proceeds are the same as those
available for Death Proceeds. SEE "Insurance Benefits Upon Death of Insured
Person -- Payment Options".
WHEN WE MAY POSTPONE PAYMENTS
----------------------------------------------------------------------------
We will pay any amounts due from the Separate Account for a partial
withdrawal, death benefit or surrender and will transfer any amount from the
Separate Account to the General Account, within seven days, unless:
o The New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on that Exchange is restricted as determined by
the Commission; or
o The Commission by order permits postponement for the protection of
Policyowners; or
o An emergency exists, as determined by the Commission, as a result of
which disposal of securities is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate Account's
net assets.
-18-
<PAGE>
INSURANCE BENEFITS UPON DEATH OF INSURED PERSON
DEATH PROCEEDS
----------------------------------------------------------------------------
When we receive due proof of the death of the insured person (while the
Policy is in effect), the Death Proceeds become payable to the beneficiary.
We calculate the Death Proceeds as of the date of the insured person's
death. The beneficiary(ies) should provide us with written proof of death as
soon as is reasonably possible.
The Death Proceeds under a Policy are equal to:
o the Basic Death Benefit, plus any insurance benefits payable under any
riders to the Policy, MINUS
o the sum of any Policy Loans and unpaid monthly deductions before the
death of the insured person.
BASIC DEATH BENEFIT
----------------------------------------------------------------------------
Your Policy has as its Basic Death Benefit plan either a Face Amount Plan or
a Face Amount Plus Plan. SEE "Basic Death Benefit Plan" under "How to
Purchase a Policy and Pay Premiums".
The Face Amount Plan provides a fixed death benefit, because the Basic Death
Benefit is the Face Amount (unless the Corridor Percentage applies). The
Face Amount Plus Plan provides a variable death benefit, because your
Account Balance, which is a factor in the amount of the death proceeds due,
will vary.
Under the Face Amount Plan, the Basic Death Benefit will be the GREATER of
o the Policy's Face Amount on the date of the insured person's death, or
o the Policy's Account Balance on the date of the insured person's death
multiplied by the appropriate Corridor Percentage from the Corridor
Percentage Chart set forth below.
Under the Face Amount Plus Plan, the Basic Death Benefit will be the
GREATER of
o the Face Amount on the date of the insured person's death plus the
Account Balance on that date, or
o the Account Balance on the date of the insured person's death
multiplied by the appropriate Corridor Percentage from the Corridor
Percentage Chart set forth below.
CORRIDOR PERCENTAGES
----------------------------------------------------------------------------
Corridor Percentages are based upon the age of the insured person at the
date of death. The purpose of the Corridor Percentages is to ensure that a
Policy will qualify as life insurance under the Code, at the time the
insured person dies.
The Corridor Percentages require us to provide a death benefit that is
greater than the Account Balance, or in other words to maintain an amount
for which we are "at risk", until the insured person reaches age 95. The
percentages shown below reflect requirements under the Code, and we reserve
the right to change them if the Code is revised.
-19-
<PAGE>
CORRIDOR PERCENTAGE CHART
<TABLE>
<CAPTION>
ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR
AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE
- ---------- ------------ ---------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
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 to 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 or older 100
53 164 67 118
</TABLE>
PAYMENT OPTIONS
----------------------------------------------------------------------------
We will pay Death Proceeds in one lump sum, unless you selected an optional
payment plan for the Proceeds or the beneficiary selects an optional payment
plan. A lump sum payment will include interest from the date of death to the
date of payment, at the rate of interest we are then crediting for amounts
under the Interest Payments plan described below.
You may choose an optional payment plan for all or any part of Death Benefit
Proceeds that will become payable under your Policy, and you may modify your
selection from time to time, when the insured person is living. The minimum
amount of each payment under any optional payment plan is $100.
If you change a beneficiary, your previous selection of an optional payment
plan will no longer be in effect unless you make a Written Request that it
continue. You must send a choice or change of optional payment plan in
writing to our Processing Office.
Once the Proceeds are applied under any of the optional plans, the payments
are not affected by the investment experience of any Separate Account Fund.
In addition, the beneficiary may not change the form of payment plan once we
have begun making payments.
The optional payment plans available under the Policy are:
INTEREST PAYMENTS PLAN. We hold the Proceeds and pay interest to the payee
at an effective rate of at least 3% compounded yearly. We will pay the
principal amount to the payee after the term of years specified when the
Interest Payment plan is elected.
LIFE PAYMENTS PLAN. We make equal monthly payments for a guaranteed minimum
period to a payee, who must be a natural person for whom we have been
provided written proof of the date of birth. If the payee lives longer than
the minimum period, payments will continue for the lifetime of the payee.
The minimum period can be either ten years or until the sum of the payments
equals the amount of Proceeds applied under this plan. If the payee dies
before the end of the guaranteed period, we will discount the amount of
remaining guaranteed payments for the minimum period at an effective rate of
3% compounded yearly. We will pay the discounted amount in one lump sum to
the payee's estate, unless otherwise provided.
PAYMENTS FOR A FIXED PERIOD PLAN. We make payments for a period of no more
than 25 years in annual, semi-annual, quarterly or monthly installments. The
payments include interest at an effective rate of at least 3% compounded
yearly. We may credit an effective annual rate of interest of more than 3%,
and to the extent and for the period we do so, the payments will be greater.
PAYMENTS OF A FIXED AMOUNT PLAN. We make equal annual, semi-annual,
quarterly or monthly payments until all of the Proceeds have been paid. We
credit the unpaid balance with interest at an effective rate of at least 3%
compounded yearly. The final payment under this option is any balance equal
to or less than one fixed amount payment.
-20-
<PAGE>
CHARGES AND DEDUCTIONS YOU WILL PAY
COST OF INSURANCE CHARGES
----------------------------------------------------------------------------
On each Monthly Anniversary Day under a Policy, we deduct charges to
compensate us for the life insurance coverage we will be providing in the
next month. The amount we deduct is equal to:
o the amount for which we are "at risk", which is the Policy's Basic
Death Benefit minus the Account Balance as of the Monthly Anniversary
Day, divided by $1,000, TIMES
o the cost per $1,000 of insurance coverage for the insured person, also
called the "cost of insurance rate". The rate will be no greater than
permitted under the 1980 Commissioners Standard Ordinary mortality
table for the insured person's premium class.
Cost of insurance rates will vary according to the insured person's age and
premium class, and may vary by
gender, meaning whether the insured person in male or female.
o If your Policy does not have a Payroll Deduction Rider, the rates vary
according to the insured person's gender.
o If your Policy has a Payroll Deduction Rider or if applicable state law
requires unisex rates for any Policy, cost of insurance rates are
unisex, meaning that the same rates apply for male and female insured
persons of the same age and rating classification.
Unisex rates are more favorable to males than gender based rates, and gender
based rates are more favorable to females than unisex rates. The guaranteed
maximum cost of insurance rates for Policies with a Payroll Deduction Rider
also are unisex.
We separately calculate cost of insurance for a Policy's initial Face Amount
and for each increase in the Face Amount. For the initial Face Amount, we
use the premium class on the Issue Date. For any increase in Face Amount, we
use the premium class in effect at the time of that increase.
We determine cost of insurance rates based on our estimates of future cost
factors such as mortality, investment income, expenses, and the length of
time Policies stay in force. We have the right to adjust our cost of
insurance rates from time to time. Any adjustments we make will be on a
uniform basis. If the insured person's premium class is standard, the rates
we use will never be greater than the guaranteed cost of insurance rates
shown in your Policy Specification Pages.
We deduct cost of insurance charges from your Account Balance, if any, in
our General Account. If you do not have sufficient Account Balance allocated
to the General Account, we will deduct the charges from your Account Balance
allocated to one or more of the Separate Account Funds. We look to the Funds
in the following order:
(a) Investment Company Money Market Fund, (b) Investment Company
Short-Term Bond Fund,
(c) Investment Company Mid-Term Bond Fund, (d) Investment Company Bond
Fund, (e) Scudder Bond Fund, (f) Investment Company Composite Fund, (g)
Fidelity VIP II Asset Manager Fund, (h) Calvert Social Balanced Fund, (i)
Fidelity VIP Equity-Income Fund, (j) Investment Company All America Fund,
(k) Investment Company Equity Index Fund, (l) Investment Company Mid-Cap
Equity Index Fund, (m) Fidelity VIP II Contra Fund, (n) Investment
Company Aggressive Equity Fund, (o) Scudder Capital Growth Fund, (p)
Scudder International Fund, and (q) American Century VP Capital
Appreciation Fund.
ADMINISTRATIVE CHARGES
----------------------------------------------------------------------------
We deduct, on each Valuation Day, from the value of the net assets in each
Fund of the Separate Account a charge for administrative expenses at an
annual rate of 0.40%, except that we reduce the administrative charge to the
extent we receive a reimbursement for administrative expenses.
o For the Separate Account Fund that invests in the American Century VP
Capital Appreciation Fund, the annual rate currently is 0.20%, because
the adviser for the American Century VP Capital Appreciation Fund
reimburses us at an annual rate of up to 0.20% for administrative
expenses.
o For the Funds that invest in the Fidelity Portfolios, the annual rate
currently is 0.30%, because the transfer agent and distributor for the
Fidelity Portfolios reimburse us at an aggregate annual
-21-
<PAGE>
rate of 0.10% for administrative expenses. We for the Funds that invest
in the American Century VP Capital Appreciation Fund and the Fidelity
Portfolios
o We make an additional deduction for administrative expenses, on each
Monthly Anniversary Day, from your Account Balance. The charge is $2.00
per month, except that we will reduce the charge to 1/12 of 1.00% if
your Account Balance for the month is less than $2,400. We deduct the
administrative expense charge from your Account Balance in the same
manner as described above for cost of insurance charges.
o We reserve the right to increase our administrative charges if the
revenues from these charges are insufficient to cover our costs of
administering the Policies. In no event will we increase the .40%
charge to more than an annual rate of .65% or the $2.00 per month
charge to more than $10 per month.
MORTALITY AND EXPENSE RISKS CHARGES
----------------------------------------------------------------------------
We deduct, on each Valuation Day, from the value of the net assets in each
Fund of the Separate Account a charge for mortality and expense risks we
assume under the Policies. The mortality risk charge, at an annual rate of
0.70%, compensates us for assuming the risk that insured persons may live
for a shorter period of time than we estimated. The expense risk charge, at
an annual rate of 0.15%, compensates us for the risk that our expenses in
administering the Policies will be greater than we estimated. We will
realize a gain from these charges to the extent that they are not needed to
provide benefits and pay expenses under the Policies.
SUPPLEMENTAL INSURANCE BENEFITS FEE
----------------------------------------------------------------------------
We deduct the cost of any supplemental benefits from your Account Balance on
each Monthly Anniversary Day. The current monthly cost per thousand of
coverage for the accidental death benefit rider is $.10. The total monthly
cost per $1,000 of coverage for all covered children under a children's term
rider currently is $.60. The maximum insurance coverage per child currently
is $5,000.
ACCELERATED BENEFIT FEE
----------------------------------------------------------------------------
We deduct a one-time administrative fee from the Accelerated Benefit when we
pay the Accelerated Benefit. SEE "The Policies -- Access To Account Balances
-- Accelerated Benefit for Terminal Illness". The amount of the Accelerated
Benefit fee is $250.
PREMIUM AND OTHER TAXES
----------------------------------------------------------------------------
We currently do not deduct state premium taxes from your premium payments.
We reserve the right to deduct all or a portion of the amount of any
applicable taxes, including state premium taxes, from premiums prior to any
allocation of those premiums among the General Account and the Separate
Account Funds. Currently, most state premium taxes range from 2% to 4%. SEE
"Federal Tax Considerations".
CHANGES IN POLICY COST FACTORS
----------------------------------------------------------------------------
From time to time we may make adjustments in policy cost factors, which
include interest credited on amounts in our General Account, cost of
insurance deductions and administrative charges. We base adjustments upon
changes in our expectations for our investment earnings, mortality of
insured persons, persistency (how long Policies stay in effect), expenses,
and taxes. We make any adjustments "by class", meaning that all Policies
within the same class will have the same adjustment.
We determine changes in policy cost factors for a Policy in accordance with
procedures and standards on file with the insurance regulator of the
jurisdiction in which we delivered the Policy. We review policy cost factors
for in-force Policies once every five Policy Years, or whenever we change
the premiums or factors for comparable new Policies. We will never make a
change in the guaranteed cost of insurance rates and the Guaranteed Rate of
Interest shown on the Specification Pages of your Policy that would be
unfavorable to you.
FEES AND EXPENSES OF UNDERLYING FUNDS
----------------------------------------------------------------------------
Each Separate Account Fund purchases shares of an Underlying Fund at net
asset value. That net asset value reflects investment management and other
fees and expenses incurred by that Underlying Fund. Detailed information
concerning those fees and expenses is set forth in the prospectuses for the
Underlying Funds that are attached to this Prospectus.
-22-
<PAGE>
HOW TO CONTACT US AND GIVE US INSTRUCTIONS
CONTACTING AMERICAN LIFE
----------------------------------------------------------------------------
You should send in writing all notices, requests and elections required or
permitted under the Policies, except that you may give certain instructions
by telephone, as described below. Our home office address is:
The American Life Insurance Company of New York
Eldon Wonacott, Senior Vice President
320 Park Avenue
New York, New York 10022
You can check the address for your Regional Office by calling 1-800-872-5963
or by visiting our Website at www.mutualofa.com.
TRANSFERS, ALLOCATION CHANGES, LOANS AND WITHDRAWALS BY TELEPHONE
----------------------------------------------------------------------------
You may make requests by telephone for transfers or withdrawals of Account
Balance or to change the Investment Alternatives to which we will allocate
your future Premiums.
You must use a Personal Identification Number (PIN) to make telephone
requests. We automatically send a PIN to you, and your use of the PIN
constitutes your agreement to use the PIN in accordance with our rules and
requirements. You may call us to change or cancel the PIN that we have
assigned. Our toll-free telephone number for requests is 1-800-872-5963.
On any Valuation Day, we will consider requests by telephone that we receive
by 4 p.m. Eastern Time (or the close of the New York Stock Exchange, if
earlier) as received that day. We will consider requests that we receive
after 4 p.m. (or the Exchange close) as received the next Valuation Day. We
reserve the right to suspend or terminate at any time the right of
Policyowners to request transfers or reallocations by telephone.
Although our failure to follow reasonable procedures may result in our
liability for any losses due to unauthorized or fraudulent telephone
transfers, we will not be liable for following instructions communicated by
telephone that we reasonably believe to be genuine. We will employ
reasonable procedures to confirm that instructions communicated by telephone
are genuine. Those procedures are to confirm your Social Security number,
check the Personal Identification Number, tape record all telephone
transactions and provide written confirmation of telephone transactions.
WHERE YOU SHOULD DIRECT REQUESTS
----------------------------------------------------------------------------
You may make requests for allocation changes or transfers of Account Balance
to 800-872-5963 or in writing to the Regional Field Office that services
your Policy.
For withdrawals and loans, you must make your request according to our
procedures, which we may change from time to time. Under our current
procedures, you should make a withdrawal or loan request to our 800 number
or in writing to your Regional Office.
You should use our forms to submit written requests to us.
-23-
<PAGE>
ABOUT AMERICAN LIFE AND OUR SEPARATE ACCOUNT NO. 3
AMERICAN LIFE
----------------------------------------------------------------------------
We are a life insurance company organized in 1955 under the laws of the
State of New York. We are authorized to transact business in 50 states, the
District of Columbia and the United States Virgin Islands. Mutual of America
Life Insurance Company (MUTUAL OF AMERICA), a mutual life insurance company
also organized under New York law, is our indirect parent company. Our home
office is located at 320 Park Avenue, New York, New York 10022.
We sell individual and group life insurance, group disability, annuities and
pension plans, including variable accumulation annuity contracts and
variable universal life insurance policies. As of December 31, 1998, we had
total assets of approximately $1. billion.
Our operations as a life insurance company are reviewed periodically by
various independent rating agencies. These agencies, such as A.M. Best &
Company, Standard and Poor's Insurance Rating Service and Duff & Phelps
Credit Rating Company, publish their ratings. From time to time we reprint
and distribute the rating reports in whole or in part, or summaries of them,
to the public. The ratings concern our operation as a life insurance company
and do not imply any guarantees of performance of the Separate Account.
THE SEPARATE ACCOUNT
----------------------------------------------------------------------------
We established the Separate Account under a resolution of our Board of
Directors adopted on February 23, 1993. The Separate Account is registered
with the Securities and Exchange Commission (COMMISSION) as a unit
investment trust under the Investment Company Act of 1940 (1940 ACT). The
Commission does not supervise the management or investment practices or
policies of the Separate Account or American Life. The 1940 Act, however,
does regulate certain actions by the Separate Account.
We divide the Separate Account into distinct Funds. Each Fund invests its
assets in an Underlying Fund, and the name of each Separate Account Fund
reflects the name of the corresponding Underlying Fund.
The assets of the Separate Account are our property. The Separate Account
assets attributable to Policyowners' Account Balances and any other policies
funded through the Separate Account cannot be charged with liabilities from
other businesses that we conduct. The income, capital gains and capital
losses of each Fund of the Separate Account are credited to, or charged
against, the net assets held in that Fund. We separately determine each
Fund's net assets, without regard to the income, capital gains and capital
losses from any of the other Funds of the Separate Account or from any other
business that we conduct.
The Separate Account and American Life are subject to supervision and
regulation by the Superintendent of Insurance of the State of New York, and
by the insurance regulatory authorities of each State in which we are
licensed to do business.
-24-
<PAGE>
FEDERAL TAX CONSIDERATIONS
For Federal income tax purposes, the Separate Account is not separate from
us, and its operations are considered part of our operations. Under existing
Federal income tax law, we do not pay taxes on the net investment income and
realized capital gains earned by the Separate Account. We reserve the right,
however, to make a deduction for taxes if in the future we must pay tax on
the Separate Account's operations.
OBTAINING TAX ADVICE
----------------------------------------------------------------------------
THE DESCRIPTION BELOW OF THE CURRENT FEDERAL TAX STATUS AND CONSEQUENCES FOR
POLICYOWNERS DOES NOT COVER EVERY POSSIBLE SITUATION AND IS FOR INFORMATION
PURPOSES ONLY. TAX PROVISIONS AND REGULATIONS MAY CHANGE AT ANY TIME. The
discussion below of Federal tax considerations is based upon our
understanding of current Federal income tax laws as they are currently
interpreted and is not intended as tax advice. We do not make any guarantee
regarding the tax status of any Policy or any transaction involving a
Policy.
Tax results may vary depending upon your individual situation, and special
rules may apply to you in certain cases. You also may be subject to State
and local taxes, which may not correspond to the Federal tax provisions. For
these reasons, you should consult a qualified tax adviser for detailed
information and advice regarding the tax consequences to you of purchasing a
Policy or of effecting any transaction under a Policy.
TAX STATUS OF THE POLICIES
----------------------------------------------------------------------------
Section 7702 of the Code defines "insurance contract" for Federal income tax
purposes. The Secretary of the Treasury (the TREASURY) is authorized to
formulate regulations that implement Section 7702. The Treasury has proposed
regulations and issued other interim guidance, but it has not adopted final
regulations. Accordingly, guidance concerning how Section 7702 is to be
applied is limited. If a Policy were determined not to be a life insurance
contract for purposes of Section 7702, that Policy would not provide the tax
advantages normally provided by a life insurance policy.
We believe that a Policy issued on the basis of a standard premium class
should meet the Section 7702 definition of a life insurance contract. Our
interpretation is based primarily on IRS Notice 88-128 and the proposed
mortality charge regulations under Section 7702 issued on July 5, 1991.
For a Policy issued on a substandard basis (in other words, the insured
person's premium class indicates a higher than standard mortality risk),
there is less guidance as to whether the Policy would meet the Section 7702
definition of life insurance contract. Particularly if the Policyowner pays
the full amount of premiums permitted under the Policy, there may be a
question as to whether the Policy is a life insurance policy.
If it is subsequently determined that a Policy we have issued does not
satisfy Section 7702, we may take whatever steps are appropriate and
reasonable to attempt to cause that Policy to comply with Section 7702. For
this purpose, we reserve the right to restrict Policy transactions as
necessary to attempt to qualify the Policy as a life insurance contract
under Section 7702.
Section 817(h) of the Code requires that the Separate Account's investments
be "adequately diversified" in accordance with Treasury regulations in order
for the Policy to qualify as a life insurance contract under Section 7702 of
the Code. The Separate Account, through the Underlying Funds, intends to
comply with the diversification requirements prescribed in Treasury
Regulation Section 1.817-5. We believe that the Separate Account meets the
diversification requirement, and we will monitor continued compliance with
the requirement.
The Treasury has announced that the diversification regulations do not
provide guidance concerning the issue of the number of investment options
and switches among such options a Policyowner may have before being
considered to have investment control and thus to be the owner of the
related assets in the Separate Account. If the Treasury provides additional
guidance on this issue, the Policy may need to be modified to comply with
that guidance. Accordingly, we reserve the right to modify the Policy as
necessary to attempt to prevent the Policyowner from being considered the
owner of the assets of the Separate Account or otherwise to qualify the
Policy for favorable tax treatment.
The following discussion assumes that the Policy will qualify as a life
insurance contract for Federal income tax purposes.
-25-
<PAGE>
TAX TREATMENT OF POLICY BENEFITS AND ACCESS OF ACCOUNT BALANCE
----------------------------------------------------------------------------
IN GENERAL. Proceeds and Account Balance increases should be treated in a
manner consistent with a fixed-benefit life insurance policy for Federal
income tax purposes. You will not be considered to have received the Account
Balance, including investment earnings and interest earned, until there is a
distribution of Account Balance.
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, discussed below. Depending on the circumstances, the
exchange of a Policy, a change in the Policy's Basic Death Benefit option, a
Policy Loan, a partial withdrawal, a surrender, a change in ownership, a
change of insured person, the payment of an Accelerated Benefit 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 Policy proceeds depend on the circumstances of each
Policyowner or beneficiary.
When you receive a distribution under the Policy, an important factor in
determining whether all or any portion of the distribution is taxable to you
is your INVESTMENT IN THE POLICY. Your investment in the Policy generally is
the amount of premiums or other consideration you have paid for the Policy
which you have not previously withdrawn.
DEATH BENEFITS. The death benefit under the Policy should be excludable from
the gross income of the beneficiary under Section 101(a)(1) of the Code.
SURRENDER OR LAPSE OF POLICY; MATURITY PROCEEDS. Upon a complete surrender
or lapse of a Policy or when benefits are paid at the Maturity Date, if the
amount received plus the amount of indebtedness exceeds your total
investment in the Policy, the excess will be treated as ordinary income
subject to tax, regardless of whether the Policy is considered to be a
Modified Endowment Contract.
DISTRIBUTIONS FROM A POLICY THAT IS NOT A MODIFIED ENDOWMENT CONTRACT. The
general rule is that a distribution from a Policy that is not a Modified
Endowment Contract is tax-free to you up to the amount of your investment in
the Policy. Any distribution or portion of a distribution that exceeds the
investment in the Policy is taxable income to you. In effect, all
distributions are treated as first a return to you of your investment in the
Policy, prior to the return to you of interest and earnings on your Account
Balance.
An exception to this general rule applies if:
o the Policy's death benefit decreases, or any other change occurs that
reduces benefits under the Policy, during the first 15 years after the
Policy was issued, and
o the decrease or change results in a cash distribution to the
Policyowner in order for the Policy to continue to comply with the
limits defined in Section 7702.
In such a case, the 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.
Loans from, or secured by, a Policy that is not a Modified Endowment
Contract are not treated as distributions. Instead, such loans are treated
as indebtedness of the Policyowner.
CHARACTERIZATION AS A MODIFIED ENDOWMENT CONTRACT. Section 7702A of the Code
establishes a class of life insurance contracts designated as Modified
Endowment Contracts. A Policy is considered to be a Modified Endowment
Contract if it fails the "seven pay test" described below. That test is
failed if the cumulative amount of premiums paid under a Policy at any time
during its first seven years (or seven years from the date of a material
change to the Policy) is greater than a certain amount in relation to the
then current death benefit under the Policy.
The seven pay test provides that a Policy will be a Modified Endowment
Contract if the accumulated premiums paid at any time during the first seven
Policy years are greater than the sum of the net level premiums that would
have been paid on or before that time if the Policy provided for paid-up
future benefits after the payment of seven level annual premiums. The
determination of whether a Policy will be a Modified Endowment Contract
after a material change generally depends upon the relationship of the death
benefit and Account Balance at the time of that change and the additional
premiums paid in the seven years following the material change. If the death
benefit under a Policy is reduced by a decrease in the Face Amount or a
partial withdrawal during either the first seven years after Policy issuance
or a material change to the Policy, the seven-pay test will be recalculated
as though the new death benefit had applied since the Policy was issued or
materially changed. Due to the Policy's payment flexibility, classification
as a Modified Endowment Contract will depend on the individual circumstances
of each Policy.
-26-
<PAGE>
If a premium is credited to your Policy that would cause the Policy to
become a Modified Endowment Contract, we will notify you that unless you
request a refund of the excess premium, the Policy will become a Modified
Endowment Contract. Our notification will provide you with instructions and
the time requirements for making the request.
The rules relating to whether a Policy will be treated as a Modified
Endowment Contract are extremely complex and cannot be described adequately
in this summary. Therefore, a current or prospective Policyowner should
consult with a competent advisor to determine whether a particular
transaction will cause the Policy to be treated as a Modified Endowment
Contract.
DISTRIBUTIONS FROM A POLICY THAT IS A MODIFIED ENDOWMENT CONTRACT. A Policy
classified as Modified Endowment Contract is subject to the tax rules below.
In effect, all distributions are treated as first a return to you of
interest and earnings on your Account Balance, prior to the return to you of
your investment in the Policy.
1) All distributions you receive under the Policy, including Surrender
Proceeds, partial withdrawals and distributions within two years before
the Policy became a Modified Endowment Contract, are treated as taxable
ordinary income to you, in an amount up to:
o your Account Balance immediately before the distribution, minus
o your investment in the Policy at that time.
2) Second, any loans you take from or secure by the Policy are treated as
distributions and are taxed as described in 1) above, and past due loan
interest that is added to the loan amount is treated as a loan.
3) A 10 percent additional income tax is imposed on the portion of any
distribution that is included in your taxable income in accordance with 1)
above, unless the distribution or loan
o is made when you are age 59 1/2 or older,
o is attributable to you becoming disabled, or
o is part of a series of substantially equal periodic payments for your
life (or life expectancy) or the joint lives (or joint life
expectancies) of the you and your beneficiary.
All Modified Endowment Contracts that we (or any affiliates of ours) issue
to the same Policyowner during any calendar year are treated as one Modified
Endowment Contract for purposes of determining the amount includable in the
Policyowner's gross income under Section 72(e) of the Code.
POLICY LOAN INTEREST
----------------------------------------------------------------------------
If you are an individual, you may not deduct personal interest paid on any
loan under a Policy, in most circumstances. In addition, interest on any
loan under a Policy owned by a taxpayer and covering the life of any
individual who is an officer or employee of, or is financially interested in
the business carried on by, that taxpayer will not be tax deductible to the
extent the aggregate amount of the loans with respect to Policies covering
that individual exceeds $50,000. The deduction of interest on Policy Loans
may also be subject to other restrictions under Section 264 of the Code.
ESTATE TAXES
----------------------------------------------------------------------------
The Death Proceeds payable under the Policy are includable in the insured
person's gross estate for federal estate tax purposes if the Death Proceeds
are paid:
o to the insured person's estate, or
o to a beneficiary other than the estate and the insured person either
possessed incidents of ownership in the Policy at the time of death or
transferred incidents of ownership in the Policy to another person
within three years of death.
Death Proceeds paid to a surviving spouse as beneficiary are not includable
in your Federal gross estate because of a 100% estate tax marital deduction.
In addition, Death Proceeds paid to a tax-exempt charity may not be taxable
in your estate because of the allowance of an estate tax charitable
deduction. When Death Proceeds are paid to other beneficiaries, whether or
not any Federal estate tax is payable on that amount depends on a variety of
factors, including the size of the gross estate. There is an estate tax
credit that is equivalent to an exemption of $ 0,000 in 1999, which will
increase in increments until 2006, when it will reach the equivalent of an
exemption of $1 million.
If you are not the insured person, and your death occurs before the death of
the insured person, the value of the Policy, as determined under Internal
Revenue Service regulations, is includable in your gross estate for Federal
estate tax purposes.
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<PAGE>
YOUR VOTING RIGHTS FOR MEETINGS OF THE UNDERLYING FUNDS
We will vote the shares of the Underlying Funds owned by the Separate
Account at regular and special meetings of the shareholders of the
Underlying Funds. We will cast our votes according to instructions we
receive from Policyowners. The number of Underlying Fund shares that we may
vote at a meeting of shareholders will be determined as of a record date set
by the Board of Directors or Trustees of the Underlying Fund.
We will vote 100% of the shares that a Separate Account Fund owns. If you do
not send us voting instructions, we will vote the shares attributable to
your Account Balance in the same proportion as we vote shares for which we
have received voting instructions from Policyowners. We will determine the
number of Accumulation Units attributable to each Policyowner for purposes
of giving voting instructions as of the same record date used by the
Underlying Fund.
Each Policyowner who has the right to give us voting instructions for a
shareholders' meeting of an Underlying Fund will receive information about
the matters to be voted on, including the Underlying Fund's proxy statement
and a voting instructions form to return to us.
We may elect to vote the shares of the Underlying Funds held by our Separate
Account in our own discretion if the Investment Company Act of 1940 is
amended, or if the present interpretation of the Act changes with respect to
our voting of these shares.
FUNDING AND OTHER CHANGES WE MAY MAKE
We reserve the right to make certain changes to the Separate Account Funds
and to the Separate Account's operations. In making changes, we will comply
with applicable law and will obtain the approval of Policyowners, if
required. We may:
o create new investment funds of the Separate Account at any time;
o to the extent permitted by state and federal law, modify, combine or
remove investment funds in the Separate Account;
o transfer assets we have determined to be associated with the class of
contracts to which the Policies belong from one investment fund of the
Separate Account to another investment fund;
o create additional separate accounts or combine any two or more accounts
including the Separate Account;
o transfer assets we have determined to be associated with the class of
contracts to which the Policies belong from the Separate Account to
another separate account of ours by withdrawing the same percentage of
each investment in the Separate Account, with appropriate adjustments
to avoid odd lots and fractions;
o operate the Separate Account as a diversified, open-end management
investment company under the 1940 Act, or in any other form permitted
by law, and designate an investment advisor for its management, which
may be us, an affiliate of ours or another person;
o deregister the Separate Account under the 1940 Act; and
o operate the Separate Account under the general supervision of a
committee, any or all the members of which may be interested persons
(as defined in the 1940 Act) of ours or our affiliates, or discharge
the committee for the Separate Account.
If our exercise of any of these rights results in a material change to the
Investment Alternatives of the Separate
Account, we will advise you of the change.
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<PAGE>
ADMINISTRATIVE MATTERS
YEAR 2000 COMPLIANCE
----------------------------------------------------------------------------
Many of the services that we provide to you depend on the proper functioning
of our computer and computer-based systems, as well as those of our outside
service providers. Many computers cannot distinguish the year 2000 from the
year 1900, and this inability could potentially have an adverse impact on
the handling of your premium, transfer and withdrawal transactions, the
crediting of Accumulation Units, accounting and other recordkeeping
services.
We have performed a comprehensive review of our computer systems, made the
necessary modifications or replacements and successfully completed system
testing of our in-house software, the largest and most critical project under
our Year 2000 program. For the balance of 1999, we will continue to monitor
and verify Year 2000 compliance. We also have contacted our vendors and
service providers as to the status of their Year 2000 compliance. Vendors and
service providers whose systems are material to our operations have indicated
they are, or expect to be, Year 2000 compliant. Although we anticipate that
our computer systems and those of our providers will be adapted in time for
the year 2000, it is possible Year 2000 problems still may occur. We are
developing written contingency plans to ensure our business continuity through
the year 2000.
NOTICES, CONFIRMATION STATEMENTS AND REPORTS TO POLICYOWNERS
----------------------------------------------------------------------------
Approximately 20 days before a scheduled premium, we will send you a notice
of the amount and due date of that scheduled premium, except that we will
not send notices for scheduled premiums payable under a Payroll Deduction
Program or if you have authorized withdrawals from your bank or other
account to pay scheduled premiums.
Within 30 days after each calendar quarter, we will send you a statement
showing your Account Balance, premiums received, charges incurred and
information concerning any Policy Loans as of the end of the quarter. We
will send you a confirmation statement within five business days after any
transaction involving purchase, sale or transfer of Accumulation Units and
for any change in allocation instructions, except that if your Policy has a
Payroll Deduction Rider, your quarterly statement will serve as the
confirmation statement for your purchase, sale and transfer transactions.
You must notify us of any error in a statement within 30 days after the date
we processed the allocation change or transaction, or within 30 days after
the end of the period covered by the quarterly statement that serves as the
confirmation statement, or you will give up your right to have us correct
the error.
We also will send to you annual and semi-annual reports for the Separate
Account and each Underlying Fund, which will include financial statements.
MISCELLANEOUS POLICY PROVISIONS
----------------------------------------------------------------------------
LIMIT ON RIGHT TO CONTEST. We will not contest the insurance coverage under
a Policy after it has been in force (a) for two years from the Issue Date
with respect to the initial amount of insurance coverage; (b) for two years
from the effective date of an increase in the amount of insurance requiring
evidence of insurability; and (c) for two years from the effective date of
the reinstatement with respect to any amount of insurance that was
reinstated. If we contest a Face Amount increase or a reinstatement, the
contest will be based only on the application for that increase or
reinstatement.
SUICIDE EXCLUSION. If the insured person commits suicide within two years
from the Issue Date, we will not pay the Death Proceeds that would otherwise
be payable under a Policy. We will pay no more than (a) the sum of the
Account Balance and any insurance charges; minus (b) the sum of any Policy
Loans. If there was an increase in the Basic Death Benefit for which we had
the right to require (or did require) evidence of insurability (other than
an increase due solely to a change in the Basic Death Benefit plan) and if
the insured person commits suicide within two years from the effective date
of that increase, then with respect to that increase we will pay no more
than the insurance charges deducted for that increase.
MISREPRESENTATION OR MISSTATEMENT OF AGE OR SEX. If a misrepresentation is
made on the application for your Policy or if the age or sex of the insured
person is misstated on your Policy Specifications Pages, then the Proceeds
payable upon proof of the death of the insured person will be that which
would have been purchased by the most recent monthly deduction for the cost
of insurance on the basis of the correct age and sex or as adjusted for the
misrepresentation.
-29-
<PAGE>
ASSIGNMENT. You must notify us in writing if you assign your Policy. No
assignment will be binding on us until we receive and record it at our
Processing Office. An assignment will not apply to any payment made before
the assignment was recorded. We will not be responsible for the validity of
any assignment.
NON-PARTICIPATION. The Policies are non-participating policies, which means
that they will not share in our profits or surplus earnings through payment
of dividends or otherwise.
DISTRIBUTION OF THE POLICIES
----------------------------------------------------------------------------
Mutual of America, a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc., acts as the principal underwriter
and distributor of the Policies. We offer the Policies continuously without
a sales charge through our employees and certain employees of Mutual of
America. These employees receive a salary from us or Mutual of America and
do not receive commissions for sales of the Policies. All persons engaged in
selling the Policies are our licensed agents and are duly qualified
registered representatives of Mutual of America. Under our Distribution and
Administration Agreement with Mutual of America, we pay Mutual of America
for the cost of providing services to us. Because the Policies have no sales
load, the costs of distribution will necessarily be paid out of our profits,
including any profits from the Policies' mortality and expense risks
charges.
Mutual of America also serves as principal underwriter for the Mutual of
America Investment Corporation and for the variable accumulation annuity
contracts it offers through its Separate Account No. 2.
OTHER INFORMATION
LEGAL PROCEEDINGS
----------------------------------------------------------------------------
From time to time we may engage in litigation. In our judgment, our current
litigation is not of material importance in relation to our total assets.
The Separate Account is not a party to any pending legal proceedings.
LEGAL MATTERS
----------------------------------------------------------------------------
Patrick A. Burns, Senior Executive Vice President and General Counsel of
American Life, has passed upon all matters of applicable state law relating
to the Policies, including our right to issue the Policies. Jones & Blouch
L.L.P., Washington, D.C., has passed upon certain legal matters relating to
Federal securities laws that are applicable to our offering of the Policies.
EXPERTS
----------------------------------------------------------------------------
Arthur Andersen LLP, independent public accountants, has audited the
December 31, 1998 financial statements included in this prospectus, as
indicated in their reports on the financial statements. We have included the
reports of Arthur Andersen in reliance upon their authority as experts in
giving reports on financial statements.
ADDITIONAL INFORMATION AVAILABLE
----------------------------------------------------------------------------
We have filed with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933 relating to the offering of
Policies described in this Prospectus. This Prospectus does not include all
the information contained in that registration statement. You may obtain the
omitted information at the principal office of the Securities and Exchange
Commission in Washington, D.C. upon payment of their prescribed fee.
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<PAGE>
OUR EXECUTIVE OFFICERS AND DIRECTORS
The name and position of each of our executive officers and directors, and
his or her principal occupation during the past five years, are set forth
below. The business address of each person listed below is 320 Park Avenue,
New York, NY 10022.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION
NAME WITH AMERICAN LIFE DURING PAST FIVE YEARS
- ------------------------ --------------------------- -----------------------------------------------
<S> <C> <C>
Manfred Altstadt Senior Executive Vice Senior Executive Vice President and Chief
President and Chief Financial Officer, Mutual of America
Financial Officer;
Director
Diane M. Aramony Senior Vice President and Senior Vice President, Corporate Secretary
Corporate Secretary; and Assistant to the Chairman, Mutual of
Director America, since September 1998, prior thereto,
Senior Vice President
William Breneisen Executive Vice President Executive Vice President, Office of
Technology, Mutual of America; prior thereto,
Senior Vice President
Jeremy J. Brown Executive Vice President Executive Vice President and Chief Actuary,
and Chief Actuary; Mutual of America, since March 1997;
Director Consulting Actuary, Milliman & Robertson,
from July 1994 to March 1997; prior thereto,
various positions in Group Pension
Department of Allmerica Financial
Patrick A. Burns Senior Executive Vice Senior Executive Vice President and General
President and General Counsel, Mutual of America
Counsel; Director
Richard J. Ciecka Director President and Chief Executive Officer, Mutual
of America Capital Management Corporation,
since September 1998; prior thereto, Director
and Vice Chairman of the Board, Mutual of
America
William S. Conway Executive Vice President; Executive Vice President, Marketing and
Director Corporate Communications, Mutual of
America
Salvatore R. Curiale Senior Executive Vice Senior Executive Vice President, Technical
President; Director Operations, since March 1995 and Director
since October 1998, Mutual of America; prior
thereto, Superintendent of Insurance, State of
New York
William A. DeMilt Executive Vice President; Executive Vice President, Mutual of America
Director
Thomas E. Gilliam Executive Vice President; Executive Vice President and Assistant to the
Director President and Chief Executive Officer, Mutual
of America
John R. Greed Senior Vice President and Senior Vice President since July 1996 and
Treasurer; Director Treasurer since May 1997, Mutual of
America; partner, Arthur Andersen LLP, from
September 1995 to June 1996; prior thereto,
Senior Manager
Theodore L. Herman Vice Chairman of the Vice Chairman, American Life
Board; Director
</TABLE>
-31-
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATION
NAME WITH AMERICAN LIFE DURING PAST FIVE YEARS
- ----------------------- --------------------------- -----------------------------------------------
<S> <C> <C>
Gregory A. Kleva Executive Vice President Executive Vice President & Deputy General
& Deputy General Counsel, Mutual of America, since February
Counsel 1995; prior thereto, Senior Vice President &
Deputy General Counsel
Amir Lear Senior Vice President; Executive Vice President, Mutual of America
Director Capital Management Corporation since
September 1998; prior thereto, Senior Vice
President, Mutual of America
Howard Lichtenstein President and Chief President and Chief Operating Officer,
Operating Officer; American Life
Director
George L. Medlin Executive Vice President, Executive Vice President, Internal Audit,
Internal Audit Mutual of America since March 1998; prior
thereto, Senior Vice President, Internal Audit
Thomas J. Moran Chairman of the Board Chief Executive Officer since October 1994
and Chief Executive and Director, Mutual of America; prior
Officer; Director thereto, President and Director, Mutual of
America
Robert W. Ruane Senior Vice President; Senior Vice President, Corporate Communi-
Director cations and Direct Response, Mutual of
America
</TABLE>
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<PAGE>
DEFINITIONS WE USE IN THIS PROSPECTUS
ACCELERATED BENEFIT -- The portion of the Death Proceeds payable before the
death of the insured person when
the insured person is determined to have a terminal illness and is expected
to live for one year or less.
ACCOUNT BALANCE -- The value of a Policyowner's Accumulation Units in the
Separate Account Funds plus the value of amounts held in the General Account
for the Policyowner. As used in this Prospectus, the term "Account Balance"
may mean all or any part of your total Account Balance.
ACCUMULATION UNIT -- A measure we use to calculate the value of a
Policyowner's interest in each of the Funds of the Separate Account. Each
Fund has its own Accumulation Unit value.
BASIC DEATH BENEFIT -- The primary component of the Death Proceeds payable
upon the death of the insured person when the Policy is in effect. The Basic
Death Benefit is the greater of:
o the Face Amount under a Face Amount Policy, or the Face Amount plus the
Account Balance under a Face Amount Plus Policy (you select the type of
Policy upon purchase), and
o the Account Balance times the applicable Corridor Percentage.
BENEFICIARY -- The person(s) you designate in your application or in a
change of beneficiary form filed with us
to receive the Death Proceeds payable upon the death of the insured person.
BUSINESS DAY -- Any day on which we are open for business and the New York
Stock Exchange is open for trading. For purposes of determining a Valid
Transaction Date, our Business Day will end as of the close of business of
the New York Stock Exchange (normally 4:00 p.m. Eastern Time).
CODE -- The Internal Revenue Code of 1986, as amended, or any corresponding
provisions of future United States revenue laws. Depending on the context,
the term Code includes the regulations adopted by the Internal Revenue
Service for the Code section being discussed.
CORRIDOR PERCENTAGE -- A percentage established under the Code, based on the
insured person's age. The Corridor Percentage is multiplied by your Account
Balance to establish the minimum death benefit amount required for the
Policy to be treated as life insurance under the Code.
DEATH PROCEEDS -- An amount equal to the sum of the Basic Death Benefit and
amounts payable under any policy riders, minus the sum of any Policy Loans
and any unpaid monthly deductions, subject to any applicable adjustments for
misrepresentation, suicide or misstatement of age and/or sex.
FACE AMOUNT -- The amount of life insurance coverage as set forth on the
Policy Specification Pages of your Policy. The Face Amount must be at least
$25,000, except that the minimum Face Amount is $5,000 for Policies issued
with a Payroll Deduction Rider.
FIDELITY PORTFOLIOS -- The Equity-Income Portfolio of the Variable Insurance
Products Fund (VIP Fund) and the Contrafund and Asset Manager Portfolios of
the Variable Insurance Products Fund II (VIP Fund II).
FUND OF THE SEPARATE ACCOUNT (OR FUND) -- One of the subaccounts of the
Separate Account. Each Fund's name corresponds to the name of the Underlying
Fund in which it invests.
GENERAL ACCOUNT -- Assets we own that are not in a separate account, but
rather are held as part of our general assets. We sometimes refer to the
General Account as the INTEREST ACCUMULATION ACCOUNT, because amounts you
allocate to the General Account earn interest at a fixed rate that we change
from time to time.
INSURED PERSON -- The person on whose life a Policy is issued, or in other
words the person whose death will trigger payment of a death benefit under
your Policy.
INSURED PERSON'S AGE -- The insured person's age as of his or her last
birthday preceding the Policy Date. The insured person's "attained age" at
any time is the age on the Policy Date plus the number of successive twelve
month periods elapsed since the Policy Date.
INVESTMENT ALTERNATIVES -- Our General Account and the Funds of the Separate
Account. You may allocate your premiums and transfer your Account Balance
among the Investment Alternatives.
INVESTMENT COMPANY -- Mutual of America Investment Corporation.
ISSUE DATE -- The date as of which we issued a Policy to you, as shown on
the Policy Specification Pages of your Policy.
MATURITY DATE -- The Policy Anniversary on which the insured person's
attained age equals 100.
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<PAGE>
MONTHLY ANNIVERSARY DAY -- The same day each month as the day on which the
Policy Date occurred.
PAYROLL DEDUCTION PROGRAM -- A program established by an employer under
which it agrees with its participating employees to deduct on each pay date
from the employees' salaries the scheduled premium payments for Policies
owned by the employees, their spouses or minor children. The employer remits
the premiums to us.
PAYROLL DEDUCTION RIDER -- A rider to a Policy issued under a Payroll
Deduction Program.
POLICY ANNIVERSARY -- The day each calendar year which is the anniversary
of the Policy Date.
POLICY DATE -- The effective date of the Policy, as shown on the Policy
Specification Pages of your Policy, which will not be later than the 28th
day of any month. The Policy goes into effect as of 12:01 a.m. on the Policy
Date.
POLICY LOAN -- The outstanding principal and unpaid accrued interest for
any loan in effect under a Policy.
POLICY MONTH -- The period beginning on the Policy Date or any Monthly
Anniversary Day and ending immediately before the next Monthly Anniversary
Day.
POLICYOWNER -- The person designated on the Policy Specification Pages of
your Policy as the owner.
POLICY YEAR -- The twelve-month period beginning on (a) the Policy Date,
or (b) each Policy Anniversary.
PREMIUM CLASS -- The mortality risk class of the insured person that we used
in setting rates for cost of insurance charges.
PROCEEDS -- The amount we will pay upon (a) surrender of the Policy, (b) the
death of the insured person or (c) the Maturity Date, which amount will vary
depending on the type of Proceeds being paid.
PROCESSING OFFICE -- The office of American Life shown on the cover page of
this Prospectus, or any other location we may announce by advance written
notice to Policyowners, a field office we have designated, or our toll-free
telephone facility, depending on the transaction requested.
SCHEDULED PREMIUMS -- Premiums in the amount and at the intervals
specified in your Policy.
SCUDDER PORTFOLIOS -- The following three portfolios of the Scudder Variable
Life Investment Fund: Capital Growth Portfolio, Bond Portfolio and
International Portfolio.
SEPARATE ACCOUNT -- The American Separate Account No. 3, a separate account
of American Life maintained under the laws of New York State and registered
with the Securities and Exchange Commission under the Investment Company Act
of 1940. The assets of the Separate Account are set aside and kept separate
from our other assets.
UNDERLYING FUNDS -- The funds or portfolios that are invested in by the
Separate Account Funds.
UNSCHEDULED PREMIUMS -- Premiums other than scheduled premiums that you are
permitted to pay under your Policy.
VALID TRANSACTION DATE -- The Business Day on which all of the requirements
for the completion of a transaction have been met. This includes receipt by
us at our Processing Office of all information, remittances, notices and
papers necessary to process the requested transaction. If requirements are
met on a day that is not a Business Day, or after the close of a Business
Day, the Valid Transaction Date will be the next following Business Day.
VALUATION DAY -- Each day that the New York Stock Exchange is open for
business until the close of the New York Stock Exchange that day.
VALUATION PERIOD -- A period beginning on the close of business of a
Valuation Day and ending on the close of the next Valuation Day.
WE, US, OUR, AMERICAN LIFE -- Refer to The American Life Insurance Company
of New York.
WRITTEN REQUEST -- A written request on an administrative form provided by
us or in a form otherwise acceptable to us.
YOU, YOUR -- Refer to a Policyowner.
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<PAGE>
POLICY ILLUSTRATIONS
We have prepared the following tables to help show you how Account Balance
and Death Proceeds under a
Policy change with investment performance. The illustrations cover:
o both a Face Amount Plan and a Face Amount Plus Plan, for Face Amounts
of $100,000 and $500,000,
o both gender based cost of insurance rates applicable to standard
Policies and unisex cost of insurance rates applicable to Policies with
a Payroll Deduction Rider for Face Amounts of $100,000, and
o both our current cost of insurance rates and our guaranteed cost of
insurance rates.
The tables illustrate how Account Balance, which reflects all applicable
charges and deductions, and Death Proceeds of a Policy issued on an insured
person of a specified age would vary over time if the investment return on
the assets of each Underlying Fund was a uniform, after-tax, annual rate of
0%, 6% or 12%. The annual rate is assumed to be gross, or in other words is
before fees or expenses incurred by each Underlying Fund, other than
transaction expenses such as brokerage commissions. The Account Balance and
Death Proceeds would be different from those shown if the returns averaged
0%, 6% or 12%, but fluctuated over and under those averages throughout the
years.
The charges reflected in the tables using current cost of insurance charges
include those for monthly deductions for administration ($2 per month) and
cost of insurance, and daily charges for mortality and expense risks (0.85%
on an annual basis) and administration (0.40%, except that an administration
fee of 0.20% is shown for the American Century VP Capital Appreciation Fund
and an administrative fee of .30% is shown for the Fidelity VIP Funds,
because of current reimbursement arrangements).
The charges reflected in the tables using guaranteed cost of insurance
charges include maximum monthly deductions for administration ($10 per
month) and cost of insurance, daily charges for mortality and expense risks
(0.85% on an annual basis) and the maximum administration fee (0.65%, except
that an administration fee of 0.45% is shown for the American Century VP
Capital Appreciation Fund and an administrative fee of .55% is shown for the
Fidelity VIP Funds, based on current reimbursement arrangements).
A simple average of the investment management fees and other expenses of the
available Underlying Funds is reflected in all the tables. That average
total expense figure is 0. %, based upon the 1998 expense ratios of the
available Underlying Funds. The expenses of the Underlying Funds may
fluctuate from year to year, but we have assumed they remain constant for
purposes of these tables.
The tables assume that the insured person is a standard risk (non-smoker),
that scheduled premiums of the amounts specified in notes following the
tables are paid on each Policy Anniversary and that no transfers, partial
withdrawals, Policy Loans, changes in Basic Death Benefit plan or changes in
Face Amount are made.
The tables reflect the fact that no charges for federal, state or local
taxes are currently made against the Separate Account. If such a charge is
made in the future, it would take a higher gross rate of return to produce
after-tax returns of 0%, 6% and 12% than it does now. The tables show
Account Balances and Death Proceeds using current cost of insurance rates
and using the maximum cost of insurance rates (based on the 1980
Commissioners Standard Ordinary Smoker/Nonsmoker Mortality Tables).
[Illustrations on following pages will be updated to reflect 1998 expense
levels.]
-35-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 35 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
----------------------------------- ------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST ----------------------------------- ------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ----------- ----------- ----------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 1,365 $100,000 $100,000 $100,000 $ 1,088 $ 1,160 $ 1,232
2 ............... 2,798 100,000 100,000 100,000 2,149 2,359 2,580
3 ............... 4,303 100,000 100,000 100,000 3,179 3,598 4,055
4 ............... 5,883 100,000 100,000 100,000 4,180 4,880 5,671
5 ............... 7,542 100,000 100,000 100,000 5,154 6,206 7,444
6 ............... 9,285 100,000 100,000 100,000 6,101 7,580 9,390
7 ............... 11,114 100,000 100,000 100,000 7,021 9,003 11,527
8 ............... 13,035 100,000 100,000 100,000 7,917 10,477 13,877
9 ............... 15,051 100,000 100,000 100,000 8,787 12,007 16,462
10 .............. 17,169 100,000 100,000 100,000 9,622 13,583 19,296
11 .............. 19,392 100,000 100,000 100,000 10,402 15,188 22,389
12 .............. 21,727 100,000 100,000 100,000 11,149 16,846 25,788
13 .............. 24,178 100,000 100,000 100,000 11,865 18,559 29,529
14 .............. 26,752 100,000 100,000 100,000 12,538 20,320 33,641
15 .............. 29,455 100,000 100,000 100,000 13,182 22,144 38,174
16 .............. 32,292 100,000 100,000 100,000 13,786 24,024 43,169
17 .............. 35,272 100,000 100,000 100,000 14,331 25,947 48,664
18 .............. 38,401 100,000 100,000 100,000 14,839 27,934 54,733
19 .............. 41,686 100,000 100,000 100,784 15,330 30,007 61,453
20 .............. 45,135 100,000 100,000 108,139 15,805 32,171 68,878
30 (age 65) ..... 90,689 100,000 100,000 241,628 16,991 58,000 198,055
35 (age 70) ..... 123,287 100,000 100,000 376,336 13,473 74,741 324,428
40 (age 75) ..... 164,892 100,000 103,159 563,272 4,417 96,410 526,422
</TABLE>
(1) Assumes that a premium of $1,300 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The death benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The death benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-36-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 35 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- ----------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- ----------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ------------ ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 1,365 $ 100,000 $ 100,000 $ 100,000 $ 1,050 $ 1,121 $ 1,191
2 ............... 2,798 100,000 100,000 100,000 2,060 2,265 2,479
3 ............... 4,303 100,000 100,000 100,000 3,018 3,422 3,860
4 ............... 5,883 100,000 100,000 100,000 3,939 4,604 5,354
5 ............... 7,542 100,000 100,000 100,000 4,811 5,800 6,962
6 ............... 9,285 100,000 100,000 100,000 5,636 7,011 8,693
7 ............... 11,114 100,000 100,000 100,000 6,417 8,239 10,561
8 ............... 13,035 100,000 100,000 100,000 7,144 9,474 12,569
9 ............... 15,051 100,000 100,000 100,000 7,818 10,716 14,751
10 .............. 17,169 100,000 100,000 100,000 8,453 11,978 17,138
11 .............. 19,392 100,000 100,000 100,000 9,039 13,262 19,742
12 .............. 21,727 100,000 100,000 100,000 9,568 14,561 22,579
13 .............. 24,178 100,000 100,000 100,000 10,051 15,887 25,686
14 .............. 26,752 100,000 100,000 100,000 10,479 17,231 29,082
15 .............. 29,455 100,000 100,000 100,000 10,855 18,597 32,804
16 .............. 32,292 100,000 100,000 100,000 11,180 19,986 36,889
17 .............. 35,272 100,000 100,000 100,000 11,446 21.392 41,373
18 .............. 38,401 100,000 100,000 100,000 11,645 22,806 46,297
19 .............. 41,686 100,000 100,000 100,000 11,767 24,223 51,709
20 .............. 45,135 100,000 100,000 100,000 11,814 25,645 57,674
30 (age 65) ..... 90,689 100,000 100,000 196,100 6,518 39,237 160,738
35 (age 70) ..... 123,287 0 100,000 299,984 0 44,128 258,607
40 (age 75) ..... 164,892 0 100,000 440,830 0 45,036 411,990
</TABLE>
(1) Assumes that a premium of $1,300 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-37-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
WITH PAYROLL DEDUCTION RIDER
MALE/FEMALE ISSUE AGE 35 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- --------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- --------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 1,313 $ 100,000 $ 100,000 $ 100,000 $ 1,051 $ 1,120 $ 1,189
2 ............... 2,691 100,000 100,000 100,000 2,076 2,279 2,491
3 ............... 4,138 100,000 100,000 100,000 3,081 3,486 3,925
4 ............... 5,657 100,000 100,000 100,000 4,057 4,734 5,497
5 ............... 7,252 100,000 100,000 100,000 5,006 6,024 7,220
6 ............... 8,928 100,000 100,000 100,000 5,929 7,360 9,110
7 ............... 10,686 100,000 100,000 100,000 6,825 8,744 11,186
8 ............... 12,533 100,000 100,000 100,000 7,696 10,177 13,467
9 ............... 14,472 100,000 100,000 100,000 8,543 11,663 15,975
10 .............. 16,508 100,000 100,000 100,000 9,354 13,193 18,725
11 .............. 18,646 100,000 100,000 100,000 10,121 14,760 21,732
12 .............. 20,891 100,000 100,000 100,000 10,854 16,376 25,036
13 .............. 23,248 100,000 100,000 100,000 11,556 18,045 28,669
14 .............. 25,723 100,000 100,000 100,000 12,216 19,761 32,660
15 .............. 28,322 100,000 100,000 100,000 12,857 21,545 37,066
16 .............. 31,050 100,000 100,000 100,000 13,457 23,383 41,917
17 .............. 33,915 100,000 100,000 100,000 13,998 25,260 47,250
18 .............. 36,924 100,000 100,000 100,000 14,511 27,206 53,142
19 .............. 40,082 100,000 100,000 100,000 15,007 29,236 59,663
20 .............. 43,399 100,000 100,000 104,992 15,487 31,354 66,874
30 (age 65) ..... 87,201 100,000 100,000 235,025 17,007 56,655 192,643
35 (age 70) ..... 118,545 100,000 100,000 366,587 14,089 73,024 316,023
40 (age 75) ..... 158,550 100,000 100,561 549,484 6,294 93,982 513,537
</TABLE>
(1) Assumes that a premium of $1,250 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-38-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
WITH PAYROLL DEDUCTION RIDER
MALE/FEMALE ISSUE AGE 35 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- --------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- --------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 1,313 $ 100,000 $ 100,000 $ 100,000 $ 1,002 $ 1,069 $ 1,137
2 ............... 2,691 100,000 100,000 100,000 1,964 2,161 2,365
3 ............... 4,138 100,000 100,000 100,000 2,888 3,274 3,693
4 ............... 5,657 100,000 100,000 100,000 3,763 4,400 5,118
5 ............... 7,252 100,000 100,000 100,000 4,591 5,538 6,649
6 ............... 8,928 100,000 100,000 100,000 5,374 6,689 8,297
7 ............... 10,686 100,000 100,000 100,000 6,114 7,855 10,073
8 ............... 12,533 100,000 100,000 100,000 6,811 9,036 11,991
9 ............... 14,472 100,000 100,000 100,000 7,456 10,223 14,068
10 .............. 16,508 100,000 100,000 100,000 8,063 11,428 16,340
11 .............. 18,646 100,000 100,000 100,000 8,621 12,647 18,817
12 .............. 20,891 100,000 100,000 100,000 9,133 13,887 21,521
13 .............. 23,248 100,000 100,000 100,000 9,600 15,151 24,480
14 .............. 25,723 100,000 100,000 100,000 10,012 16,431 27,713
15 .............. 28,322 100,000 100,000 100,000 10,371 17,728 31,251
16 .............. 31,050 100,000 100,000 100,000 10,680 19,044 35,132
17 .............. 33,915 100,000 100,000 100,000 10,929 20,372 39,387
18 .............. 36,924 100,000 100,000 100,000 11,119 21,714 44,062
19 .............. 40,082 100,000 100,000 100,000 11,243 23,064 49,201
20 .............. 43,399 100,000 100,000 100,000 11,291 24,413 54,858
30 (age 65) ..... 87,201 100,000 100,000 187,154 6,727 37,543 153,405
35 (age 70) ..... 118,545 0 100,000 287,056 0 42,426 247,462
40 (age 75) ..... 158,550 0 100,000 422,933 0 43,777 395,265
</TABLE>
(1) Assumes that a premium of $1,250 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-39-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 35 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
----------------------------------- -------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST ----------------------------------- -------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- --------------- --------------- ----------- ----------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ........... $ 2,205 $101,864 $101,983 $102,102 $ 1,864 $ 1,983 $ 2,102
2 ........... 4,520 103,690 104,045 104,415 3,690 4,045 4,415
3 ........... 6,951 105,471 106,181 106,950 5,471 6,181 6,950
4 ........... 9,504 107,207 108,394 109,731 7,207 8,394 9,731
5 ........... 12,184 108,900 110,688 112,783 8,900 10,688 12,783
6 ........... 14,998 110,551 113,064 116,132 10,551 13,064 16,132
7 ........... 17,953 112,159 115,528 119,810 12,159 15,528 19,810
8 ........... 21,056 113,726 118,083 123,849 13,726 18,083 23,849
9 ........... 24,314 115,253 120,732 128,287 15,253 20,732 28,287
10 .......... 27,734 116,728 123,467 133,151 16,728 23,467 33,151
11 .......... 31,326 118,129 126,268 138,460 18,129 26,268 38,460
12 .......... 35,097 119,481 129,161 144,285 19,481 29,161 44,285
13 .......... 39,057 120,784 132,151 150,676 20,784 32,151 50,676
14 .......... 43,215 122,028 135,228 157,681 22,028 35,228 57,681
15 .......... 47,581 123,225 138,410 165,373 23,225 38,410 65,373
16 .......... 52,165 124,366 141,688 173,811 24,366 41,688 73,811
17 .......... 56,978 125,425 145,042 183,044 25,425 45,042 83,044
18 .......... 62,032 126,430 148,499 193,179 26,430 48,499 93,179
19 .......... 67,339 127,405 152,088 204,333 27,405 52,088 104,333
20 .......... 72,910 128,350 155,815 216,610 28,350 55,815 116,610
30 (age 65) . 146,498 133,017 198,121 428,328 33,017 98,121 328,328
35 (age 70) . 199,156 130,359 221,132 634,435 30,359 121,132 534,435
40 (age 75) . 266,364 122,136 242,710 961,449 22,136 142,710 861,449
</TABLE>
(1) Assumes that a premium of $2,100 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-40-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 35 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- --------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- --------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 2,205 $ 101,823 $ 101,941 $ 102,059 $ 1,823 $ 1,941 $ 2,059
2 ............... 4,520 103,581 103,928 104,290 3,581 3,928 4,290
3 ............... 6,951 105,262 105,949 106,692 5,262 5,949 6,692
4 ............... 9,504 106,880 108,015 109,294 6,880 8,015 9,294
5 ............... 12,184 108,424 110,117 112,101 8,424 10,117 12,101
6 ............... 14,998 109,899 112,258 115,156 9,899 12,258 15,156
7 ............... 17,953 111,304 114,456 118,489 11,304 14,456 18,489
8 ............... 21,056 112,641 116,704 122,116 12,641 16,704 22,116
9 ............... 24,314 113,914 119,004 126,064 13,914 19,004 26,064
10 .............. 27,734 115,136 121,370 130,380 15,136 21,370 30,380
11 .............. 31,326 116,298 123,792 135,086 16,298 23,792 35,086
12 .............. 35,097 117,389 126,260 140,209 17,389 26,260 40,209
13 .............. 39,057 118,421 128,788 145,803 18,421 28,788 45,803
14 .............. 43,215 119,384 131,367 151,901 19,384 31,367 51,901
15 .............. 47,581 120,280 133,998 158,555 20,280 33,998 58,555
16 .............. 52,165 121,110 136,683 165,818 21,110 36,683 65,818
17 .............. 56,978 121,863 139,413 173,740 21,863 39,413 73,740
18 .............. 62,032 122,530 142,176 182,373 22,530 42,176 82,373
19 .............. 67,339 123,100 144,963 191,774 23,100 44,963 91,774
20 .............. 72,910 123,575 147,773 202,021 23,575 47,773 102,021
30 (age 65) ..... 146,498 121,519 175,054 371,522 21,519 75,054 271,522
35 (age 70) ..... 199,156 113,483 184,640 529,050 13,483 84,640 429,050
40 (age 75) ..... 266,364 0 186,052 770,228 0 86,052 670,228
</TABLE>
(1) Assumes that a premium of $2,100 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-41-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
WITH PAYROLL DEDUCTION RIDER
MALE/FEMALE ISSUE AGE 35 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- --------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- --------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- --------------- --------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ........... $ 2,100 $ 101,778 $ 101,892 $ 102,005 $ 1,778 $ 1,892 $ 2,005
2 ........... 4,305 103,520 103,859 104,211 3,520 3,859 4,211
3 ........... 6,620 105,230 105,907 106,641 5,230 5,907 6,641
4 ........... 9,051 106,896 108,029 109,305 6,896 8,029 9,305
5 ........... 11,604 108,520 110,228 112,229 8,520 10,228 12,229
6 ........... 14,284 110,103 112,506 115,437 10,103 12,506 15,437
7 ........... 17,098 111,645 114,866 118,959 11,645 14,866 18,959
8 ........... 20,053 113,147 117,314 122,827 13,147 17,314 22,827
9 ........... 23,156 114,610 119,851 127,076 14,610 19,851 27,076
10 .......... 26,414 116,023 122,470 131,732 16,023 22,470 31,732
11 .......... 29,834 117,374 125,162 136,824 17,374 25,162 36,824
12 .......... 33,426 118,677 127,941 142,410 18,677 27,941 42,410
13 .......... 37,197 119,932 130,812 148,538 19,932 30,812 48,538
14 .......... 41,157 121,129 133,767 155,253 21,129 33,767 55,253
15 .......... 45,315 122,292 136,832 162,638 22,292 36,832 62,638
16 .......... 49,681 123,399 139,989 170,738 23,399 39,989 70,738
17 .......... 54,265 124,425 143,217 179,599 24,425 43,217 79,599
18 .......... 59,078 125,410 146,555 189,336 25,410 46,555 89,336
19 .......... 64,132 126,364 150,020 200,052 26,364 50,020 100,052
20 .......... 69,439 127,290 153,618 211,846 27,290 53,618 111,846
30 (age 65) . 139,522 132,140 194,730 415,547 32,140 94,730 315,547
35 (age 70) . 189,673 130,051 217,517 614,286 30,051 117,517 514,286
40 (age 75) . 253,680 122,911 239,468 930,082 22,911 139,468 830,082
</TABLE>
(1) Assumes that a premium of $2,000 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-42-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
WITH PAYROLL DEDUCTION RIDER
MALE/FEMALE ISSUE AGE 35 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $100,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- --------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- --------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------- --------------- ------------ ------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............... $ 2,100 $ 101,727 $ 101,838 $ 101,950 $ 1,727 $ 1,838 $ 1,950
2 ............... 4,305 103,390 103,719 104,062 3,390 3,719 4,062
3 ............... 6,620 104,992 105,643 106,348 4,992 5,643 6,348
4 ............... 9,051 106,520 107,597 108,811 6,520 7,597 8,811
5 ............... 11,604 107,979 109,584 111,466 7,979 9,584 11,466
6 ............... 14,284 109,370 111,604 114,349 9,370 11,604 14,349
7 ............... 17,098 110,695 113,674 117,492 10,695 13,674 17,492
8 ............... 20,053 111,958 115,800 120,922 11,958 15,800 20,922
9 ............... 23,156 113,159 117,972 124,655 13,159 17,972 24,655
10 .............. 26,414 114,311 120,206 128,733 14,311 20,206 28,733
11 .............. 29,834 115,404 122,490 133,178 15,404 22,490 33,178
12 .............. 33,426 116,439 124,828 138,027 16,439 24,828 38,027
13 .............. 37,197 117,416 127,220 143,320 17,416 27,220 43,320
14 .............. 41,157 118,326 129,658 149,087 18,326 29,658 49,087
15 .............. 45,315 119,170 132,142 155,376 19,170 32,142 55,376
16 .............. 49,681 119,949 134,675 162,240 19,949 34,675 62,240
17 .............. 54,265 120,652 137,247 169,722 20,652 37,247 69,722
18 .............. 59,078 121,281 139,858 177,883 21,281 39,858 77,883
19 .............. 64,132 121,826 142,498 186,780 21,826 42,498 86,780
20 .............. 69,439 122,277 145,156 196,471 22,277 45,156 96,471
30 (age 65) ..... 139,522 120,790 171,513 357,468 20,790 71,513 257,468
35 (age 70) ..... 189,673 113,728 181,360 507,628 13,728 81,360 407,628
40 (age 75) ..... 253,680 0 184,210 738,267 0 84,210 638,267
</TABLE>
(1) Assumes that a premium of $2,000 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-43-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 45 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $500,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
------------------------------------ ----------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST ------------------------------------ ----------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------ --------------- ----------- ----------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 .............. $ 10,763 $500,000 $500,000 $ 500,000 $ 8,699 $ 9,270 $ 9,842
2 .............. 22,063 500,000 500,000 500,000 17,146 18,834 20,592
3 .............. 33,929 500,000 500,000 500,000 25,408 28,769 32,412
4 .............. 46,388 500,000 500,000 500,000 33,378 38,981 45,302
5 .............. 59,470 500,000 500,000 500,000 41,122 49,547 59,441
6 .............. 73,206 500,000 500,000 500,000 48,645 60,487 74,969
7 .............. 87,628 500,000 500,000 500,000 55,850 71,717 91,937
8 .............. 102,772 500,000 500,000 500,000 62,799 83,315 110,564
9 .............. 118,673 500,000 500,000 500,000 69,654 95,456 131,187
10 ............. 135,370 500,000 500,000 500,000 76,367 108,117 153,973
11 ............. 152,901 500,000 500,000 500,000 82,841 121,231 179,077
12 ............. 171,308 500,000 500,000 500,000 88,987 134,739 206,691
13 ............. 190,636 500,000 500,000 500,000 94,864 148,720 237,155
14 ............. 210,930 500,000 500,000 500,000 100,433 163,170 270,780
15 ............. 232,239 500,000 500,000 500,000 105,659 178,088 307,928
16 ............. 254,614 500,000 500,000 500,000 110,551 193,519 349,045
17 ............. 278,107 500,000 500,000 505,088 115,029 209,441 394,600
18 ............. 302,775 500,000 500,000 560,520 119,151 225,944 444,857
19 ............. 328,676 500,000 500,000 620,090 122,880 243,054 500,073
20 (age 65) .... 355,872 500,000 500,000 684,083 126,140 260,779 560,724
25 (age 70) .... 513,663 500,000 500,000 1,120,079 134,731 361,091 965,585
30 (age 75) .... 715,048 500,000 524,564 1,727,453 125,019 490,246 1,614,442
</TABLE>
(1) Assumes that a premium of $10,250 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-44-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 45 FACE AMOUNT PLAN
STANDARD NON-SMOKER FACE AMOUNT $500,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- ----------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- ----------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ----------------- --------------- ------------ ------------ ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 ............. $ 10,763 $ 500,000 $ 500,000 $ 500,000 $ 7,676 $ 8,212 $ 8,749
2 ............. 22,063 500,000 500,000 500,000 14,967 16,520 18,141
3 ............. 33,929 500,000 500,000 500,000 21,971 25,022 28,336
4 ............. 46,388 500,000 500,000 500,000 28,644 33,677 39,371
5 ............. 59,470 500,000 500,000 500,000 34,998 42,501 51,346
6 ............. 73,206 500,000 500,000 500,000 41,042 51,511 64,373
7 ............. 87,628 500,000 500,000 500,000 46,733 60,669 78,525
8 ............. 102,772 500,000 500,000 500,000 52,030 69,942 93,888
9 ............. 118,673 500,000 500,000 500,000 56,892 79,297 110,567
10 ............ 135,370 500,000 500,000 500,000 61,332 88,752 128,734
11 ............ 152,901 500,000 500,000 500,000 65,311 98,282 148,542
12 ............ 171,308 500,000 500,000 500,000 68,790 107,858 170,170
13 ............ 190,636 500,000 500,000 500,000 71,832 117,551 193,913
14 ............ 210,930 500,000 500,000 500,000 74,344 127,298 219,984
15 ............ 232,239 500,000 500,000 500,000 76,336 137,122 248,719
16 ............ 254,614 500,000 500,000 500,000 77,716 146,965 280,440
17 ............ 278,107 500,000 500,000 500,000 78,440 156,814 315,571
18 ............ 302,775 500,000 500,000 500,000 78,461 166,661 354,616
19 ............ 328,676 500,000 500,000 500,000 77,630 176,418 398,144
20 (age 65) ... 355,872 500,000 500,000 544,615 75,892 186,081 446,406
25 (age 70) ... 513,663 500,000 500,000 885,386 50,332 232,518 763,264
30 (age 75) ... 715,048 0 500,000 1,347,941 0 271,628 1,259,758
</TABLE>
(1) Assumes that a premium of $10,250 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-45-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 45 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $500,000
USING OUR CURRENT COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- ------------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- ------------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------ --------------- ------------ ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 .............. $ 16,380 $ 513,926 $ 514,816 $ 515,708 $ 13,926 $ 14,816 $ 15,708
2 .............. 33,579 527,480 530,130 532,888 27,480 30,130 32,888
3 .............. 51,638 540,727 546,021 551,754 40,727 46,021 51,754
4 .............. 70,600 553,556 562,394 572,351 53,556 62,394 72,351
5 .............. 90,510 566,032 579,327 594,918 66,032 79,327 94,918
6 .............. 111,415 578,162 596,846 619,656 78,162 96,846 119,656
7 .............. 133,366 589,833 614,852 646,659 89,833 114,852 146,659
8 .............. 156,414 601,114 633,426 676,221 101,114 133,426 176,221
9 .............. 180,615 612,190 652,777 708,793 112,190 152,777 208,793
10 ............. 206,026 623,005 672,875 744,617 123,005 172,875 244,617
11 ............. 232,707 633,445 693,630 783,899 133,445 193,630 283,899
12 ............. 260,723 643,397 714,945 826,863 143,397 214,945 326,863
13 ............. 290,139 652,931 736,905 873,947 152,931 236,905 373,947
14 ............. 321,026 661,995 759,477 925,509 161,995 259,477 425,509
15 ............. 353,457 670,537 782,625 981,940 170,537 282,625 481,940
16 ............. 387,510 678,567 806,371 1,043,736 178,567 306,371 543,736
17 ............. 423,265 685,975 830,620 1,111,317 185,975 330,620 611,317
18 ............. 460,808 692,833 855,453 1,185,335 192,833 355,453 685,335
19 ............. 500,229 699,091 880,833 1,266,381 199,091 380,833 766,381
20 (age 65) .... 541,620 704,641 906,660 1,355,046 204,641 406,660 855,046
25 (age 70) .... 781,770 720,928 1,041,790 1,941,199 220,928 541,790 1,441,199
30 (age 75) .... 1,088,268 711,801 1,180,062 2,861,313 211,801 680,062 2,361,313
</TABLE>
(1) Assumes that a premium of $15,600 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-46-
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
VARIABLE UNIVERSAL LIFE INSURANCE POLICY
MALE ISSUE AGE 45 FACE AMOUNT PLUS PLAN
STANDARD NON-SMOKER FACE AMOUNT $500,000
USING OUR GUARANTEED COST OF INSURANCE CHARGES
<TABLE>
<CAPTION>
DEATH BENEFIT ACCOUNT BALANCE
-------------------------------------- ------------------------------------
ASSUMING HYPOTHETICAL ASSUMING HYPOTHETICAL
PREMIUMS GROSS ANNUAL INVESTMENT GROSS ANNUAL INVESTMENT
END OF ACCUMULATED RETURN OF RETURN OF
POLICY AT 5% INTEREST -------------------------------------- ------------------------------------
YEAR PER YEAR(1) 0% 6% 12% 0% 6% 12%
- ------------------ --------------- ------------ ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 .............. $ 16,380 $ 512,845 $ 513,701 $ 514,559 $ 12,845 $ 13,701 $ 14,559
2 .............. 33,579 525,186 527,695 530,310 25,186 27,695 30,310
3 .............. 51,638 537,094 542,056 547,437 37,094 42,056 47,437
4 .............. 70,600 548,519 556,736 566,011 48,519 56,736 66,011
5 .............. 90,510 559,469 571,748 586,176 59,469 71,748 86,176
6 .............. 111,415 569,956 587,104 608,092 69,956 87,104 108,092
7 .............. 133,366 579,929 602,758 631,868 79,929 102,758 131,868
8 .............. 156,414 589,339 618,659 657,626 89,339 118,659 157,626
9 .............. 180,615 598,140 634,756 685,499 98,140 134,756 185,499
10 ............. 206,026 606,343 651,058 715,698 106,343 151,058 215,698
11 ............. 232,707 613,901 667,509 748,390 113,901 167,509 248,390
12 ............. 260,723 620,769 684,056 783,760 120,769 184,056 283,760
13 ............. 290,139 627,021 700,763 822,136 127,021 200,763 322,136
14 ............. 321,026 632,549 717,513 863,692 132,549 217,513 363,692
15 ............. 353,457 637,370 734,310 908,742 137,370 234,310 408,742
16 ............. 387,510 641,380 751,031 957,507 141,380 251,031 457,507
17 ............. 423,265 644,535 767,613 1,010,294 144,535 267,613 510,294
18 ............. 460,808 646,794 783,988 1,067,438 146,794 283,988 567,438
19 ............. 500,229 647,998 799,966 1,129,182 147,998 299,966 629,182
20 (age 65) .... 541,620 648,109 815,469 1,195,920 148,109 315,469 695,920
25 (age 70) .... 781,770 630,139 882,002 1,620,240 130,139 382,002 1,120,240
30 (age 75) .... 1,088,268 569,517 911,628 2,242,856 69,517 411,628 1,742,856
</TABLE>
(1) Assumes that a premium of $15,600 is paid at the beginning of each
Policy Year.
In evaluating the above illustration, you should consider that:
o The hypothetical investment rates of return shown above are for
illustration purposes only, and you should not view them as indicative of
past or future investment rates of return. We do not make any
representation that these hypothetical rates of return can be achieved for
any one year or sustained over any period of time. Actual rates of return
may be more or less than those shown.
o The Death Benefits and Account Balances would be different from the
amounts shown if the rates of return averaged 0%, 6% or 12% over a period
of years, but varied above or below those averages in individual policy
years.
o The Death Benefits and Account Balances also would be different from the
amounts shown, depending on the allocation of Account Balance to the
Separate Account Funds, if the rates of return over all Funds averaged 0%,
6% or 12% but varied above or below those averages for individual Separate
Account Funds, or if any policy loan were made during the period.
-47-
<PAGE>
FINANCIAL STATEMENTS
Below are financial statements for the Separate Account and for American
Life for the year ended
December 31, 1998.
The Separate Account commenced operations on December 21, 1994, which was
the date premiums under the Policies were first allocated to any Separate
Account Fund.
You should consider the financial statements of American Life as bearing
upon the ability of American Life to meet its obligations under the
Policies. You should not consider them as bearing upon the investment
experience of the Separate Account Funds.
<TABLE>
<S> <C>
THE AMERICAN SEPARATE ACCOUNT NO. 3
PAGE
--
Statement of Assets and Liabilities 50
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Public Accountants
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
PAGE
--
Report of Independent Public Accountants
Statements of Financial Condition
Statements of Operations and Surplus
Statements of Cash Flows
Notes to Financial Statements
</TABLE>
[To be provided by Post-Effective Amendment]
-48-
<PAGE>
PART II. OTHER INFORMATION
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and documents:
The facing sheet;
The prospectus, consisting of 48 pages;
The undertaking required by Section 15(d) of the Securities Exchange Act
of 1934 -- included in Registration Statement and Pre-Effective Amendment No.
1.;
The undertaking pursuant to Rule 484 -- included in Registration Statement
and Pre-Effective Amendment No. 1.;
The representations pursuant to Rule 6e-3(T) -- included in Registration
Statement and Pre-Effective Amendment No. 1.;
The representation as to reasonableness of fees and charges deducted under
the Policies was included in Post-Effective Amendment No. 3 and is incorporated
herein by reference.
The signatures;
Written consents of the following persons:
Jones & Blouch L.L.P.
The following exhibits are filed as part of this Registration statement:
<TABLE>
<S> <C>
6 Opinion and consent of Joseph A. Gross, Vice President and Actuary of American Life. [To be filed
by Post-Effective Amendment]
10 Consent of Arthur Andersen LLP [To be filed by Post-Effective Amendment]
11 Consent of Jones & Blouch L.L.P.
12* Powers of Attorney of Jeremy J. Brown, John R. Greed, Diane M. Aramony, Amir Lear and
Robert W. Ruane.
</TABLE>
- ---------
* Powers of Attorney of Messrs. Altstadt, Burns, Ciecka, Conway, DeMilt,
Gilliam, Herman and Lichtenstein are set forth on the signature pages of the
Registration Statement filed on February 14, 1994.
* Power of Attorney of Mr. Moran is set forth on the signature pages of the
Pre-Effective Amendment No. 1 to Registration Statement filed on April 29,
1994.
* Power of Attorney of Mr. Curiale was filed with Post-Effective Amendment No.
4 on April 24, 1998.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant has duly caused this amendment to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of New York, the State of New York, the 1st day of
March, 1999.
THE AMERICAN LIFE SEPARATE ACCOUNT NO.
3
(Registrant)
THE AMERICAN LIFE INSURANCE COMPANY OF
NEW YORK
(Depositor)
By: /s/ MANFRED ALTSTADT
-------------------------------------
MANFRED ALTSTADT
SENIOR EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this amendment
to Registration Statement has been signed below by the following persons in the
capacities indicated on March 1, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------- ---------------------------------------------
<S> <C>
* Chairman and Chief Executive Officer;
- --------------------------------------
THOMAS J. MORAN Director
/s/ MANFRED ALTSTADT Senior Executive Vice President &
- --------------------------------------
MANFRED ALTSTADT Chief Financial Officer; Director
* Senior Vice President & Corporate Secretary;
- --------------------------------------
DIANE M. ARAMONY Director
* Executive Vice President and Chief Actuary;
- --------------------------------------
JEREMY J. BROWN Director
* Senior Executive Vice President &
- --------------------------------------
PATRICK A. BURNS General Counsel; Director
* Director
- --------------------------------------
RICHARD J. CIECKA
* Executive Vice President;
- --------------------------------------
WILLIAM S. CONWAY Director
* Senior Executive Vice President;
- --------------------------------------
SALVATORE R. CURIALE Director
* Executive Vice President;
- --------------------------------------
WILLIAM A. DEMILT Director
* Executive Vice President;
- --------------------------------------
THOMAS E. GILLIAM Director
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------- -------------------------------------
<S> <C>
* Senior Vice President & Treasurer;
- --------------------------------------
JOHN R. GREED Director
* Vice Chairman of the Board;
- --------------------------------------
THEODORE L. HERMAN Director
* Senior Vice President; Director
- --------------------------------------
AMIR LEAR
* President & Chief Operating Officer;
- --------------------------------------
HOWARD LICHTENSTEIN Director
* Senior Vice President; Director
- --------------------------------------
ROBERT W. RUANE
*By /s/ MANFRED ALTSTADT
----------------------------------
MANFRED ALTSTADT
ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER PAGE
- ----------- -----
<S> <C> <C>
99.11 Consent of Jones & Blouch L.L.P. ....................................................
99.12 Powers of Attorney of Jeremy J. Brown, John R. Greed, Diane M. Aramony, Amir Lear and
Robert W. Ruane .....................................................................
</TABLE>
Exhibit 99.11
[JONES & BLOUCH LETTERHEAD]
March 1, 1999
Board of Directors
The American Life Insurance Company
of New York
320 Park Avenue
New York, New York 10022
Gentlemen:
We hereby consent to the reference to this firm under the caption "Legal
Matters" in the prospectus contained in post-effective amendment No. 5 to the
registration statement on Form S-6 of The American Separate Account No. 3 and
The American Life Insurance Company of New York, File No. 33-75280, to be filed
with the Securities and Exchange Commission.
Very truly yours,
Jones & Blouch L.L.P.
POWER OF ATTORNEY
The undersigned Director of The American Life Insurance Company of New York, a
New York corporation, hereby constitutes and appoints Thomas J. Moran, Theodore
Herman, Manfred Altstadt, Patrick A. Burns and Diane M. Aramony, and each of
them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to each, for him and
on his behalf and in his name, place and stead, to execute and file any of the
documents referred to below relating to registrations under the Securities Act
of 1933 or the Investment Company Act of 1940 (the ACTS): registration
statements on any form or forms under the Acts, and any and all amendments and
supplements thereto (including post-effective amendments), with all exhibits and
all agreements, consents, exemptive applications and other documents and
instruments necessary or appropriate in connection therewith, including any
documents required under the Securities Exchange Act of 1934, each of said
attorneys-in-fact and agents being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney on the
16th day of March, 1998.
/s/ Jeremy J. Brown
----------------------
Jeremy J. Brown
<PAGE>
POWER OF ATTORNEY
The undersigned Director of The American Life Insurance Company of New York, a
New York corporation, hereby constitutes and appoints Thomas J. Moran, Theodore
Herman, Manfred Altstadt, Patrick A. Burns and Diane M. Aramony, and each of
them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to each, for him and
on his behalf and in his name, place and stead, to execute and file any of the
documents referred to below relating to registrations under the Securities Act
of 1933 or the Investment Company Act of 1940 (the ACTS): registration
statements on any form or forms under the Acts, and any and all amendments and
supplements thereto (including post-effective amendments), with all exhibits and
all agreements, consents, exemptive applications and other documents and
instruments necessary or appropriate in connection therewith, including any
documents required under the Securities Exchange Act of 1934, each of said
attorneys-in-fact and agents being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney on the
16th day of March, 1998.
/s/ John R. Greed
--------------------
John R. Greed
<PAGE>
POWER OF ATTORNEY
The undersigned Director of The American Life Insurance Company of New York, a
New York corporation, hereby constitutes and appoints Thomas J. Moran, Theodore
Herman, Manfred Altstadt and Patrick A. Burns, and each of them (with full power
to each of them to act alone), her true and lawful attorney-in-fact and agent,
with full power of substitution to each, for her and on her behalf and in her
name, place and stead, to execute and file any of the documents referred to
below relating to registrations under the Securities Act of 1933 or the
Investment Company Act of 1940 (the ACTS): registration statements on any form
or forms under the Acts, and any and all amendments and supplements thereto
(including post-effective amendments), with all exhibits and all agreements,
consents, exemptive applications and other documents and instruments necessary
or appropriate in connection therewith, including any documents required under
the Securities Exchange Act of 1934, each of said attorneys-in-fact and agents
being empowered to act with or without the others or other, and to have full
power and authority to do or cause to be done in the name and on behalf of the
undersigned each and every act and thing requisite and necessary or appropriate
with respect thereto to be done in and about the premises in order to effectuate
the same, as fully to all intents and purposes as the undersigned might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, may do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney on the
25th day of February, 1999.
/s/ Diane M. Aramony
--------------------------
Diane M. Aramony
<PAGE>
POWER OF ATTORNEY
The undersigned Director of The American Life Insurance Company of New York, a
New York corporation, hereby constitutes and appoints Thomas J. Moran, Theodore
Herman, Manfred Altstadt, Patrick A. Burns and Diane M. Aramony, and each of
them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to each, for him and
on his behalf and in his name, place and stead, to execute and file any of the
documents referred to below relating to registrations under the Securities Act
of 1933 or the Investment Company Act of 1940 (the ACTS): registration
statements on any form or forms under the Acts, and any and all amendments and
supplements thereto (including post-effective amendments), with all exhibits and
all agreements, consents, exemptive applications and other documents and
instruments necessary or appropriate in connection therewith, including any
documents required under the Securities Exchange Act of 1934, each of said
attorneys-in-fact and agents being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney on the
25th day of February, 1999.
/s/ Amir Lear
-------------------
Amir Lear
<PAGE>
POWER OF ATTORNEY
The undersigned Director of The American Life Insurance Company of New York, a
New York corporation, hereby constitutes and appoints Thomas J. Moran, Theodore
Herman, Manfred Altstadt, Patrick A. Burns and Diane M. Aramony, and each of
them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and agent, with full power of substitution to each, for him and
on his behalf and in his name, place and stead, to execute and file any of the
documents referred to below relating to registrations under the Securities Act
of 1933 or the Investment Company Act of 1940 (the ACTS): registration
statements on any form or forms under the Acts, and any and all amendments and
supplements thereto (including post-effective amendments), with all exhibits and
all agreements, consents, exemptive applications and other documents and
instruments necessary or appropriate in connection therewith, including any
documents required under the Securities Exchange Act of 1934, each of said
attorneys-in-fact and agents being empowered to act with or without the others
or other, and to have full power and authority to do or cause to be done in the
name and on behalf of the undersigned each and every act and thing requisite and
necessary or appropriate with respect thereto to be done in and about the
premises in order to effectuate the same, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, may do or cause to
be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned has signed this Power of Attorney on the
25th day of February, 1999.
/s/ Robert W. Ruane
-----------------------
Robert Ruane
