<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY -
PUTNAM HARTFORD INHERITANCE MANAGER VARIABLE LIFE INSURANCE POLICIES
MODIFIED SINGLE PREMIUM VARIABLE LIFE
P.O. Box 2999
Hartford, CT 06104-2999
Telephone (800) 231-5453
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This Prospectus describes Putnam Hartford Inheritance Manager Variable Life, a
modified single premium variable life insurance policy ("Policy" or "Policies")
offered by Hartford Life and Annuity Insurance Company ("Hartford") to
applicants age 90 and under. The Policy lets the Policy Owner pay a single
premium and, subject to restrictions, additional premiums.
The Policy is a modified endowment contract for federal income tax purposes,
except in certain cases described under "Federal Tax Considerations," page 25. A
LOAN, DISTRIBUTION OR OTHER AMOUNT RECEIVED FROM A MODIFIED ENDOWMENT CONTRACT
DURING THE LIFE OF THE INSURED WILL BE TAXED TO THE EXTENT OF ANY ACCUMULATED
INCOME IN THE POLICY. ANY SURRENDER AMOUNTS THAT ARE TAXABLE WILL BE SUBJECT TO
A 10% ADDITIONAL TAX, WITH CERTAIN EXCEPTIONS.
Generally, the minimum initial premium Hartford will accept is $10,000. The
initial premium will be allocated to the Putnam Money Market Sub-Account. After
the Right to Cancel Period has expired, the amounts allocated will be
transferred to the Funds specified in the Policy Owner's application. The
underlying investment options ("Funds") of Putnam Variable Trust currently
available under the Policy are:
<TABLE>
<S> <C> <C>
Putnam Asia Pacific Growth Sub-Account - shares of Class IA of the Putnam VT Asia Pacific Growth Fund
of the Putnam Variable Trust
Putnam Diversified Income Sub-Account - shares of Class IA of the Putnam VT Diversified Income Fund
Bond Fund of the Putnam Variable Trust (a bond fund)
The George Putnam Fund Sub-Account - shares of Class IA of the Putnam VT The George Putnam Fund of
Boston of the Putnam Variable Trust
Putnam Global Asset Allocation Sub-Account - shares of Class IA of the Putnam VT Global Asset Allocation
Fund of the Putnam Variable Trust
Putnam Global Growth Sub-Account - shares of Class IA of the Putnam VT Global Growth Fund of the
Putnam Variable Trust
Putnam Growth and Income Sub-Account - shares of Class IA of the Putnam VT Growth and Income Fund of
the Putnam Variable Trust
Putnam Health Sciences Sub-Account - shares of Class IA of the Putnam VT Health Sciences Fund of
the Putnam Variable Trust
Putnam High Yield Sub-Account - shares of Class IA of the Putnam VT High Yield Fund of the
Putnam Variable Trust
Putnam International Growth Sub-Account - shares of Class IA of the Putnam VT International Growth Fund
of the Putnam Variable Trust
Putnam International Growth and Income - shares of Class IA of the Putnam VT International Growth and
Sub-Account Income Fund of the Putnam Variable Trust
Putnam International New Opportunities - shares of Class IA of the Putnam VT International New
Sub-Account Opportunities Fund of the Putnam Variable Trust (an
international fund)
Putnam Investors Sub-Account - shares of Class IA of the Putnam VT Investors Fund of the
Putnam Variable Trust
Putnam Money Market Sub-Account - shares of Class IA of the Putnam VT Money Market Fund of the
Putnam Variable Trust
Putnam New Opportunities Sub-Account - shares of Class IA of the Putnam VT New Opportunities Fund of
the Putnam Variable Trust (a capital appreciation fund)
Putnam New Value Sub-Account - shares of Class IA of the Putnam VT New Value Fund of the
Putnam Variable Trust
Putnam OTC & Emerging Growth Sub-Account - shares of Class IA of the Putnam VT OTC & Emerging Growth Fund
of the Putnam Variable Trust
Putnam Research Sub-Account - shares of Class IA of the Putnam VT Research Fund of the
Putnam Variable Trust
Putnam U.S. Government and High Quality Bond - shares of Class IA of the Putnam VT U. S. Government and High
Sub-Account Quality Bond Fund of the Putnam Variable Trust
Putnam Utilities Growth & Income Sub-Account - shares of Class IA of the Putnam VT Utilities Growth and
Income Fund of the Putnam Variable Trust
Putnam Vista Sub-Account - shares of Class IA of the Putnam VT Vista Fund of the Putnam
Variable Trust (a capital appreciation fund)
Putnam Voyager Sub-Account - shares of Class IA of the Putnam VT Voyager Fund of the Putnam
Variable Trust (a capital appreciation fund)
</TABLE>
1 - PROSPECTUS
<PAGE>
There is no guaranteed minimum Account Value for a Policy. The Account Value of
a Policy will vary up or down to reflect the investment experience of the Funds
to which premiums have been allocated. The Policy Owner bears the investment
risk for all amounts allocated to the Funds. The Policy continues in effect as
long as the Cash Surrender Value is sufficient to pay the monthly charges under
the Policy ("Deduction Amount"). The Policy may terminate if the Cash Surrender
Value is insufficient to cover a Deduction Amount and, after expiration of a
specified period, no additional premium payments are received by Hartford.
The Policies provide for a Face Amount, which is the minimum death benefit under
a Policy. The Death Benefit may be greater than the Face Amount. The Account
Value will, and under certain circumstances the Death Benefit of the Policy may,
increase or decrease based on the investment experience of the Funds to which
premiums have been allocated. However, while the Policy is in force, the Death
Benefit will never be less than the Face Amount. At the death of the Insured,
Hartford will pay the Death Proceeds to the beneficiary. The Death Proceeds
equal the Death Benefit less any Indebtedness under the Policy.
IT MAY NOT BE ADVANTAGEOUS TO PURCHASE VARIABLE LIFE INSURANCE AS A REPLACEMENT
FOR YOUR CURRENT LIFE INSURANCE OR IF YOU ALREADY OWN A VARIABLE LIFE INSURANCE
POLICY.
THIS PROSPECTUS IS VALID ONLY IF ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE
APPLICABLE ELIGIBLE FUNDS WHICH CONTAIN A FULL DESCRIPTION OF THOSE FUNDS. ALL
PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
THIS PROSPECTUS AND OTHER INFORMATION ABOUT THE SEPARATE ACCOUNT REQUIRED TO BE
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION CAN BE FOUND AT THE
COMMISSION'S WEB SITE (HTTP://WWW.SEC.GOV).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE PRODUCTS DESCRIBED HEREIN ARE NOT DEPOSITS OF, OR GUARANTEED BY ANY BANK,
NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
The date of this Prospectus is May 1, 1998, revised as of January 20, 1999.
2 - PROSPECTUS
<PAGE>
TABLE OF CONTENTS
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<TABLE>
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Page
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<S> <C>
Special Terms 4
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Summary 6
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The Company 8
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The Separate Account 8
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General 8
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Funds 8
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Investment Adviser 10
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The Policy 11
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Application for a Policy 11
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Premiums 11
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Allocation of Premiums 11
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Accumulation Unit Values 11
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Deductions and Charges 12
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Cost of Insurance Charge 12
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Administrative Charge 13
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Annual Maintenance Fee 13
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Surrender Charge 13
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Policy Owner Options 13
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Other Deductions or Charges 15
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Policy Benefits and Rights 15
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Death Benefit 15
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Account Value 15
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Transfer of Account Value 15
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Policy Loans 16
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Amount Payable on Surrender of the Policy 17
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Partial Surrenders 17
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Benefits at Maturity 17
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Lapse and Reinstatement 17
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Cancellation and Exchange Rights 17
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Suspension of Valuation, Payments and Transfers 17
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Last Survivor Policies 18
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Other Matters 18
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Voting Rights 18
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Statements to Policy Owners 19
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<CAPTION>
Page
<S> <C>
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Limit on Right to Contest 19
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Misstatement as to Age and Sex 19
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Settlement Provisions 19
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Beneficiary 20
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Assignment 20
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Dividends 20
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Executive Officers and Directors 21
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Distribution of the Policies 25
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Safekeeping of the Separate Account's Assets 25
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Federal Tax Considerations 25
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General 25
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Taxation of Hartford and the Separate Account 26
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Income Taxation of Policy Benefits 26
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Last Survivor Policies 26
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Modified Endowment Contracts 26
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Estate and Generation Skipping Taxes 27
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Diversification Requirements 27
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Ownership of the Assets in the Separate Account 27
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Life Insurance Purchased for Use in Split Dollar Arrangements 28
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Federal Income Tax Withholding 28
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Non-Individual Ownership of Policies 28
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Other 28
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Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations 28
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Legal Proceedings 28
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Legal Matters 28
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Year 2000 29
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Experts 29
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Registration Statement 30
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Appendix A 31
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</TABLE>
The Policies and/or Policy Owner Option 2 may not be available in all states.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
3 - PROSPECTUS
<PAGE>
SPECIAL TERMS
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As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of the Sub-Accounts plus the value of the Loan
Account under the Policy.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL WITHDRAWAL AMOUNT: The amount of a surrender or partial surrender that is
not subject to the Surrender Charge. This amount in any Policy Year is the
greater of 10% of premiums or 100% of cumulative earnings (Account Value less
premiums paid).
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
annuity payments.
ATTAINED AGE: The Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: The Cash Value less all Indebtedness.
CASH VALUE: The Account Value less any Surrender Charge and any Unamortized Tax
charge due upon surrender.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Policy or (2)
the Account Value on the date of death multiplied by a stated percentage as
specified in the Policy.
DEATH PROCEEDS: The amount that Hartford will pay on the death of the Insured.
This equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Policy Date and on each Monthly Activity
Date for the cost of insurance, Tax Expense charges under Option 1, an
administrative charge and a mortality and expense risk charge.
FACE AMOUNT: On the Policy Date, the initial Face Amount is the amount shown on
the Policy's specifications page. Thereafter, the Face Amount is reduced by any
partial surrenders.
FUNDS: The registered management investment companies in which assets of the
Separate Account may be invested.
GUIDELINE SINGLE PREMIUM: The "Guideline Single Premium" as defined in Section
7702 of the Code.
HOME OFFICE: Currently located at 200 Hopmeadow Street, Simsbury, Connecticut;
however, the mailing address is P.O. Box 2999, Hartford, Connecticut 06104-2999.
INDEBTEDNESS: All monies owed to Hartford by the Policy Owner, including all
outstanding loans on the Policy, any interest due or accrued and any unpaid
Deduction Amount or annual maintenance fee arising during a grace period.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the Insured's age on Insured's last birthday.
LOAN ACCOUNT: An account in Hartford's General Account, established for any
amounts transferred from the Sub-Accounts for requested loans. The Loan Account
credits a fixed rate of interest that is not based on the investment experience
of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which deductions and charges are
subtracted from the Account Value of the Policy. Monthly Activity Dates occur on
the same day of the month as the Policy Date.
POLICY: For a Policy issued to an individual, the Policy is the individual
Policy and any endorsements or riders. For a group Policy, the Policy is a
certificate evidencing a participatory interest in a group Policy and any
endorsements or riders. Any references in this Prospectus to a Policy includes
the certificate.
POLICY ANNIVERSARY: The anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
measured.
POLICY OWNER: The owner of the Policy.
POLICY OWNER OPTIONS: The Policy Owner may elect one of two options offered by
Hartford to pay Mortality and Expense Risk charges and certain tax related
charges. The Policy Owner must elect the option at the time the Policy is issued
and the option cannot be changed once the Policy is issued. The following
options are available:
OPTION 1: ASSET BASED CHARGES: Under this option the Policy Owner elects to
pay a Mortality and Expense Risk charge that is deducted monthly from Account
Value at an annual rate of .90% in Policy Years I through 10 and at an annual
rate of .50% in Policy Years 11 and beyond; a Tax Expense charge that is also
deducted monthly at an annual rate of .40% for the first 10 Policy Years and
an Unamortized Tax charge that is imposed during the first 9 Policy Years on
surrenders or partial surrenders according to the rate set forth in
"Deductions and Charges - Policy Owner Options - Unamortized Tax Charge" Page
14. See "Deductions and Charges - Policy Owner Options" page 13.
OPTION 2: FRONTED CHARGES: Under this option the Policy Owner elects to pay a
Mortality and Expense Risk charge that is deducted monthly from Account Value
at an annual rate of .65% in Policy Years 1 through 10 and an annual rate of
.50% in Policy Years 11 and beyond and a Tax Expense charge that is deducted
from any Premium payment in all Policy Years at an annual rate of 4.0%. This
option is not available in all states. See "Deductions and Charges - Policy
Owner Options" page 13.
4 - PROSPECTUS
<PAGE>
POLICY YEAR: The twelve months between Policy Anniversaries.
SEPARATE ACCOUNT: Separate Account Five, an account established by Hartford to
separate the assets funding the Policies from other assets of Hartford.
SUB-ACCOUNT: The subdivisions of the Separate Account used to allocate a Policy
Owner's Account Value, less Indebtedness, among the Funds.
SURRENDER CHARGE: A charge which may be assessed upon surrender of a Policy or
partial surrenders in excess of the Annual Withdrawal Amount.
VALUATION DAY: The date on which the Sub-Account is valued. The Valuation Day is
every day the New York Stock Exchange is open for trading. The value of the
Separate Account is determined at the close of the New York Stock Exchange
(generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
5 - PROSPECTUS
<PAGE>
SUMMARY
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THE POLICIES
The Policies are life insurance policies with death benefits, cash values, and
other traditional life insurance features. The Policies are "variable." Unlike
the fixed benefits of ordinary whole life insurance, the Account Value will, and
the Death Benefit may, increase or decrease based on the investment experience
of the Funds to which premium payments have been allocated. The Policies are
credited with units ("Accumulation Units") to calculate Account Values. The
Policy Owner may transfer the Account Values among the Funds.
The Policies can be issued on a single life or "last survivor" basis. For a
discussion of how last survivor Policies operate differently from single life
Policies, see "Last Survivor Policies," page 18.
THE SEPARATE ACCOUNT AND
THE FUNDS
Separate Account Five ("Separate Account") funds the variable life insurance
Policies offered by this Prospectus. Hartford established the Separate Account
pursuant to Connecticut insurance law and organized as a unit investment trust
registered under the Investment Company Act of 1940. The Policies currently
offer 21 sub-accounts ("Sub-Accounts"), each investing exclusively in a Fund.
The investment objectives of the Funds are as set forth in "The Separate
Account," page 8. Applicants should read the Funds prospectuses accompanying
this Prospectus in connection with the purchase of a Policy.
The following table shows annual fund operating expenses for 1997:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
<TABLE>
<CAPTION>
Management
Fees Other Expenses
(absent (absent any Total Fund
any fee expense Operating
waivers) reimbursements) Expenses(1)
<S> <C> <C> <C>
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Putnam VT Asia Pacific Growth Fund 0.800% 0.270% 1.070%
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Putnam VT Diversified Income Fund 0.690% 0.110% 0.800%
Putnam VT The George Putnam Fund of
Boston (2) 0.650% 0.360% 1.010%
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Putnam VT Global Asset Allocation Fund 0.660% 0.110% 0.770%
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Putnam VT Global Growth Fund 0.600% 0.150% 0.750%
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Putnam VT Growth and Income Fund 0.470% 0.040% 0.510%
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Putnam VT Health Sciences Fund (2) 0.700% 0.340% 1.040%
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Putnam VT High Yield Fund 0.660% 0.060% 0.720%
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<CAPTION>
Management
Fees Other Expenses
(absent (absent any Total Fund
any fee expense Operating
waivers) reimbursements) Expenses(1)
<S> <C> <C> <C>
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Putnam VT International Growth Fund (2) 0.800% 0.470% 1.270%
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Putnam VT International Growth and
Income Fund 0.800% 0.320% 1.120%
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Putnam VT International New
Opportunities Fund (2) 1.200% 0.680% 1.890%
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Putnam VT Investors Fund (2) 0.650% 0.330% 0.980%
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Putnam VT Money Market Fund 0.450% 0.090% 0.540%
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Putnam VT New Opportunities Fund 0.580% 0.050% 0.630%
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Putnam VT New Value Fund 0.700% 0.150% 0.850%
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Putnam VT OTC & Emerging Growth Fund (2) 0.700% 0.340% 1.040%
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Putnam VT Research Fund (2) 0.65% 0.48% 1.13%
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Putnam VT U.S. Government and High
Quality Bond Fund 0.610% 0.080% 0.690%
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Putnam VT Utilities Growth and Income
Fund 0.670% 0.070% 0.740%
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Putnam VT Vista Fund 0.650% 0.220% 0.870%
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Putnam VT Voyager Fund 0.540% 0.050% 0.590%
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</TABLE>
(1) "Management Fees" generally represent the fees paid to the investment
adviser or its affiliate for investment and administrative services
provided. "Other Expenses" are expenses (other than "Management Fees") which
are deducted from the fund including legal, accounting and custodian fees.
For a complete description of the nature of the services provided in
consideration of the operating expenses deducted, please see the Fund
prospectuses.
(2) The "Management Fees" and "Other Expenses" shown in the table above do not
reflect an expense limitation. After an expense limitation, "Management
Fees," "Other Expenses" and "Total Fund Operating Expenses" would have been:
<TABLE>
<CAPTION>
Total Fund
Management Operating
Fees Other Expenses Expenses
<S> <C> <C> <C>
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Putnam VT The George Putnam Fund of
Boston* 0.49% 0.36% 0.85%
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Putnam VT Health Sciences Fund* 0.56% 0.34% 0.90%
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Putnam VT International Growth Fund 0.73% 0.47% 1.20%
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Putnam VT International New
Opportunities Fund 0.92% 0.68% 1.60%
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Putnam VT Investors Fund* 0.52% 0.33% 0.85%
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Putnam VT OTC & Emerging Growth Fund* 0.56% 0.34% 0.90%
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Putnam VT Research Fund* 0.37% 0.48% 0.85%
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</TABLE>
* Estimated "Management Fees," "Other Expenses" and "Total Fund Operating
Expenses."
The investment adviser for all the Funds is Putnam Management. See "The Separate
Account," page 8.
6 - PROSPECTUS
<PAGE>
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and, subject
to restrictions, additional premiums. The Policy Owner may choose a minimum
initial premium of 80%, 90% or 100% of the Guideline Single Premium (based on
the Face Amount). Under current underwriting rules, which are subject to change,
applicants between the ages of 35 and 80 may be eligible for simplified
underwriting without a medical examination if they meet simplified underwriting
standards. For applicants who are below age 35 or above age 80, or who do not
meet simplified underwriting eligibility, full underwriting applies, except that
substandard underwriting applies in those cases that represent substandard risks
according to customary underwriting guidelines.
DEDUCTIONS AND CHARGES
On the Policy Date and on each Monthly Activity Date, Hartford will deduct a
Deduction Amount from the Account Value. The Deduction Amount will be made pro
rata from each Sub-Account. The Deduction Amount includes a cost of insurance
charge, a Tax Expense charge under Option 1, an administrative charge and a
mortality and expense risk charge. If the Cash Surrender Value is not sufficient
to cover a Deduction Amount due on any Monthly Activity Date the Policy may
lapse. See "Deductions and Charges" page 12, and "Policy Benefits and Rights -
Lapse and Reinstatement," page 17.
If the Account Value on a Policy Anniversary or on any date the Policy is
surrendered is less than $50,000, Hartford will deduct an annual maintenance fee
of $30. See "Deductions and Charges - Annual Maintenance Fee," page 13.
The Policy Owner may pay certain deductions and charges by electing one of two
available options at the time the Policy is issued. Once elected, the Policy
Owner Options cannot be changed:
Under Option 1:
- a Mortality and Expense Risk charge is deducted monthly from Account Value
at an annual rate of .90% in Policy Years I through 10 and at an annual
rate of .50% in Policy Years 11 and beyond.
- a Tax Expense charge is also deducted monthly at an annual rate of .40%
for the first 10 Policy Years.
- an Unamortized Tax charge is imposed during the first 9 Policy Years on
surrenders or partial surrenders according to the rate set forth in
"Deductions and Charges - Policy Owner Options - Unamortized Tax Charge,"
page 14.
Under Option 2: (May not be available in all states)
- a Mortality and Expense Risk charge is deducted monthly from Account Value
at an annual rate of .65% in Policy Years 1 through 10 and an annual rate
of .50% in Policy Years 11 and beyond.
- a Tax Expense charge is deducted from any Premium payment in all Policy
Years at an annual rate of 4.0%.
Hartford may set up a provision for income taxes against the assets of the
Separate Account. See "Deductions and Charges - Taxes Charged Against the
Separate Account," page 15, and "Federal Tax Considerations," page 25.
Applicants should review the Funds' prospectuses accompanying this Prospectus
for a description of the charges assessed against the assets of the Funds.
Upon surrender of the Policy and partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. See "Deductions and
Charges - Surrender Charge," page 13.
For a discussion of the tax consequences of surrender of the Policy or a partial
surrender, see "Federal Tax Considerations," page 25.
DEATH BENEFIT
The Policies provide for a Face Amount which is the minimum Death Benefit under
the Policy. The Death Benefit may be greater than the Face Amount. At the death
of the Insured, Hartford will pay the Death Proceeds to the beneficiary of the
Policy. See "Policy Benefits and Rights - Death Benefit," page 15.
ACCOUNT VALUE
The Account Value will increase or decrease to reflect the investment experience
of the Funds applicable to the Policy and deductions for the monthly Deduction
Amount. There is no minimum guaranteed Account Value and the Policy Owner bears
the risk of the investment in the Funds. See "Policy Benefits and Rights -
Account Value," page 15.
POLICY LOANS
A Policy Owner may obtain one or both types of cash loans from Hartford. Both
types of loans are secured by the Policy. At the time a loan is requested, the
aggregate amount of all loans (including the currently applied for loan) may not
exceed 90% of the Cash Value. See "Policy Benefits and Rights - Policy Loans,"
page 16.
LAPSE
A Policy may terminate if the Cash Surrender Value on any Monthly Activity Date
is less than the required Deduction Amount. Hartford will give written notice to
the Policy Owner and a 61-day grace period during which additional amounts may
be paid to continue the Policy. See "Policy Benefits and Rights - Policy Loans,"
page 16, and "Lapse and Reinstatement," page 17.
7 - PROSPECTUS
<PAGE>
CANCELLATION AND EXCHANGE RIGHTS
A Policy Owner has a limited right to return the Policy for cancellation. If the
Policy Owner returns the Policy to Hartford or to the agent who sold the Policy,
to be canceled within ten days after delivery of the Policy to the Policy Owner
(in certain cases, this free-look period is longer), Hartford will return to the
Policy Owner, within seven days thereafter, the greater of the premiums paid for
the Policy, less any Indebtedness or the sum of (1) the Account Value, less any
Indebtedness, on the date the returned Policy is received by Hartford or its
agent and (2) any deductions under the Policy or by the Funds for taxes, charges
or fees.
In addition, once the Policy is in effect, it may be exchanged during the first
24 months after its issuance for a permanent life insurance policy on the life
of the Insured without submitting proof of insurability. See "Policy Benefits
and Rights - Cancellation and Exchange Rights," page 17.
TAX CONSEQUENCES
The current federal tax law generally excludes all death benefit payments from
the gross income of the Policy beneficiary. The Policies generally will be
treated as modified endowment contracts. This status does not affect the
Policies' classification as life insurance, nor does it affect the exclusion of
death benefit payments from gross income. However, loans, distributions or other
amounts received under a modified endowment contract are taxed to the extent of
accumulated income in the Policy (generally, the excess of Account Value over
premiums paid) and may be subject to a 10% penalty tax. See "Federal Tax
Considerations," page 25.
THE COMPANY
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Hartford Life and Annuity Insurance Company ("Hartford") is a stock life
insurance company engaged in the business of writing life insurance and
annuities, both individual and group, in all states of the United States and the
District of Columbia, except New York. Effective on January 1, 1998, Hartford's
name changed from ITT Hartford Life and Annuity Insurance Company to Hartford
Life and Annuity Insurance Company. Hartford was originally incorporated under
the laws of Wisconsin on January 9, 1956, and was subsequently redomiciled to
Connecticut. Its offices are located in Simsbury, Connecticut; however, its
mailing address is P.O. Box 2999, Hartford, CT 06104-2999. Hartford is a
subsidiary of Hartford Fire Insurance Company, one of the largest multiple lines
insurance carriers in the United States. Hartford is ultimately controlled by
The Hartford Financial Services Group, Inc., a Delaware corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis of
its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's on the basis of its insurer financial strength and AA+ by Duff
and Phelps on its claims paying ability. These ratings do not apply to the
investment performance of the Sub-Accounts. The ratings apply to Hartford's
ability to meet its insurance obligations, including those described in this
Prospectus.
THE SEPARATE ACCOUNT
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GENERAL
Separate Account Five ("Separate Account") is a separate account of Hartford
established on August 17, 1994 pursuant to the insurance laws of the State of
Connecticut and it is organized as a unit investment trust registered with the
Securities and Exchange Commission under the Investment Company Act of 1940. The
Separate Account meets the definition of "separate account" under federal
securities law. Under Connecticut law, the assets of the Separate Account are
held exclusively for the benefit of Policy Owners and persons entitled to
payments under the Policies. The assets of the Separate Account are not
chargeable with liabilities arising out of any other business which Hartford may
conduct.
FUNDS
The underlying investment options for the Policies are shares of Class IA of the
Putnam Variable Trust, an open-end series investment company. The assets of each
Sub-Account of the Separate Account are invested exclusively in one of the
Funds. The underlying Funds corresponding to each Sub-Account and their
investment objectives are described below. Hartford reserves the right, subject
to compliance with the law, to close Funds or to offer additional funds with
differing
8 - PROSPECTUS
<PAGE>
investment objectives. There is no assurance that any of the Funds will achieve
its stated objectives. These Funds may not be available in all states.
PUTNAM VT ASIA PACIFIC GROWTH FUND Seeks capital appreciation by investing
primarily in securities of companies located in Asia and in the Pacific Basin.
The fund's investments will normally include common stocks, preferred stocks,
securities convertible into common stocks or preferred stocks, and warrants to
purchase common stocks or preferred stocks.
PUTNAM VT DIVERSIFIED INCOME FUND Seeks high current income consistent with
capital preservation by investing in the following three sectors of the fixed
income securities markets: a U.S. Government Sector, a High Yield Sector (which
invests primarily in what are commonly known as "junk bonds"), and an
International Sector. See the special considerations for investments in high
yield securities described in the Fund prospectus.
PUTNAM VT THE GEORGE PUTNAM FUND OF BOSTON Seeks to provide a balanced
investment composed of a well-diversified portfolio of stocks and bonds which
will produce both capital growth and current income.
PUTNAM VT GLOBAL ASSET ALLOCATION FUND Seeks a high level of long-term total
return consistent with preservation of capital by investing in U.S. equities,
international equities, U.S. fixed income securities, and international fixed
income securities.
PUTNAM VT GLOBAL GROWTH FUND Seeks capital appreciation through a globally
diversified portfolio of common stocks.
PUTNAM VT GROWTH AND INCOME FUND Seeks capital growth and current income by
investing primarily in common stocks that offer potential for capital growth,
current income, or both.
PUTNAM VT HEALTH SCIENCES FUND Seeks capital appreciation by investing at least
80% of its assets (other than assets invested in U.S. government securities,
short-term debt obligations, and cash or money market instruments) in common
stocks and other securities of companies in the health sciences industries.
PUTNAM VT HIGH YIELD FUND Seeks high current income and, when consistent with
this objective, a secondary objective of capital growth, by investing primarily
in high-yielding, lower-rated fixed income securities, constituting a portfolio
which Putnam Management believes does not involve undue risk to income or
principal. See the special considerations for investments in high yield
securities described in the Fund prospectus.
PUTNAM VT INTERNATIONAL GROWTH FUND Seeks capital appreciation by investing
primarily in equity securities of companies located in a country other than the
United States.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND Seeks capital growth, and a
secondary objective of high current income by investing primarily in common
stocks that offer potential for capital growth and may, when consistent with its
investment objectives, invest in common stocks that offer potential for current
income. Under normal market conditions, the fund expects to invest substantially
all of its assets in securities principally traded on markets outside the United
States.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND Seeks long term capital
appreciation by investing in companies that have above-average growth prospects
due to the fundamental growth of their market sector. Under normal market
conditions, the fund expects to invest substantially all of its total assets
other than cash or short-term investments held pending investment, in common
stocks, preferred stocks, convertible preferred stocks, convertible bonds and
other equity securities principally traded in securities markets outside the
United States.
PUTNAM VT INVESTORS FUND Seeks long-term growth of capital and any increased
income that results from this growth by investing primarily in common stocks
that Putnam Management believes afford the best opportunity for capital growth
over the long term.
PUTNAM VT MONEY MARKET FUND Seeks as high a rate of current income as Putnam
Management believes is consistent with preservation of capital and maintenance
of liquidity by investing in high-quality money market instruments.
PUTNAM VT NEW OPPORTUNITIES FUND Seeks long-term capital appreciation by
investing principally in common stocks of companies in sectors of the economy
which Putnam Management believes possess above-average long-term growth
potential.
PUTNAM VT NEW VALUE FUND Seeks long-term capital appreciation by investing
primarily in common stocks that Putnam Management believes are undervalued at
the time of purchase and have the potential for long-term capital appreciation.
PUTNAM VT OTC & EMERGING GROWTH FUND Seeks capital appreciation by investing
primarily in common stocks that Putnam Managment believes have potential for
capital appreciation significantly greater than that of market averages.
PUTNAM VT RESEARCH FUND Seeks capital appreciation by investing primarily in
common stocks recommended by Putnam Management, as having the greatest potential
for capital appreciation.
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY BOND FUND Seeks current income
consistent with preservation of capital by investing primarily in securities
issued or
9 - PROSPECTUS
<PAGE>
guaranteed as to principal and interest by the U.S. Government or by its
agencies or instrumentalities and in other debt obligations rated at least A by
a nationally recognized securities rating agency such as Standard & Poor's or
Moody's Investor Service, Inc. or, if not rated, determined by Putnam Management
to be of comparable quality.
PUTNAM VT UTILITIES GROWTH AND INCOME FUND Seeks capital growth and current
income by concentrating its investments in debt and equity securities issued by
companies in the public utilities industries.
PUTNAM VT VISTA FUND Seeks capital appreciation by investing in a diversified
portfolio of common stocks which Putnam Management believes have the potential
for above-average capital appreciation.
PUTNAM VT VOYAGER FUND Seeks capital appreciation by investing primarily in
common stocks of companies that Putnam Management believes have potential for
capital appreciation that is significantly greater than that of market averages.
Putnam VT Asia Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam VT
The George Putnam Fund of Boston, Putnam VT Global Growth Fund, Putnam VT Growth
and Income Fund, Putnam VT Health Sciences Fund, Putnam VT High Yield Fund,
Putnam VT International Growth Fund, Putnam VT International Growth and Income
Fund, Putnam VT International New Opportunities Fund, Putnam VT Investors Fund,
Putnam VT Money Market Fund, Putnam VT New Opportunities Fund, Putnam VT New
Value Fund, Putnam VT OTC & Emerging Growth Fund, Putnam VT Research Fund,
Putnam VT U.S. Government and High Quality Bond Fund, Putnam VT Utilities Growth
and Income Fund, Putnam VT Vista Fund, and Putnam VT Voyager Fund are generally
managed in styles similar to other open-end investment companies which are
managed by Putnam Management and whose shares are generally offered to the
public. These other funds managed by Putnam Management may, however, employ
different investment practices and may invest in securities different from those
in which their counterpart Funds invest, and consequently will not have
identical portfolios or experience identical investment results.
The Funds are available only to serve as the underlying investment for variable
annuity and variable life policies. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation are contained in the accompanying Fund's
prospectuses, which should be read in conjunction with this Prospectus before
investing, and in the Funds Statement of Additional Information which may be
ordered without charge from Putnam Investor Services, Inc.
It is conceivable that in the future it may be disadvantageous for variable
annuity separate accounts and variable life insurance separate accounts to
invest in the Funds simultaneously. Although Hartford and the Funds do not
currently foresee any such disadvantages either to variable annuity contract
owners or to variable life insurance policy owners, the Trust's Board of
Trustees intends to monitor events in order to identify any material conflicts
between such contract owners and policy owners and to determine what action, if
any, should be taken in response thereto. If the Fund's Board of Trustees were
to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable life policy owners and the
variable annuity contract owners would not bear any expenses attendant upon
establishment of such separate funds.
INVESTMENT ADVISER
Putnam Management, One Post Office Square, Boston, MA 02109, serves as the
investment manager for the Funds. An affiliate, Putnam Advisory Company, Inc.,
manages domestic and foreign institutional accounts and mutual funds. Another
affiliate, Putnam Fiduciary Trust Company, provides investment advice to
institutional clients under its banking and fiduciary policies. Putnam
Management and its affiliates are wholly-owned subsidiaries of Marsh & McLennan
Companies, Inc., a publicly owned holding company whose principal businesses are
international insurance brokerage and employee benefit consulting.
Subject to the general oversight of the Trust's Board of Trustees, Putnam
Management manages the Funds' portfolios in accordance with their stated
investment objectives and policies, makes investment decisions for the Funds,
places orders to purchase and sell securities on behalf of the Funds and
administers the affairs of the Funds. For its services, the Funds pay Putnam
Management a quarterly fee. See the accompanying Funds prospectuses for a more
complete description of Putnam Management and the respective fees of the Funds.
10 - PROSPECTUS
<PAGE>
THE POLICY
-------------------------------------------------------------------
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to Hartford.
A Policy will be issued only on the lives of Insureds age 90 and under who
supply evidence of insurability satisfactory to Hartford. Acceptance is subject
to Hartford's underwriting rules, and Hartford reserves the right to reject an
application for any reason. IF AN APPLICATION FOR A POLICY IS REJECTED, THEN
YOUR INITIAL PREMIUM WILL BE RETURNED ALONG WITH AN ADDITIONAL AMOUNT FOR
INTEREST, BASED ON THE CURRENT RATE BEING CREDITED BY HARTFORD. No change in the
terms or conditions of a Policy will be made without the consent of the Policy
Owner.
The Policy will be effective on the Policy Date only after Hartford has received
all outstanding delivery requirements and received the initial premium. The
Policy Date is the date used to determine all future cyclical transactions on
the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years. The
Policy Date may be prior to, or the same as, the date the Policy is issued
("Issue Date").
If the Coverage Amount is over the current limits established by Hartford, the
initial payment will not be accepted with the application. In other cases where
Hartford receives the initial payment with the application, Hartford will
provide fixed conditional insurance during underwriting according to the terms
of a conditional receipt. The fixed conditional insurance will be the insurance
applied for, up to a maximum that varies by age. If no fixed conditional
insurance was in effect, on Policy delivery Hartford will require a sufficient
payment to place the insurance in force.
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and, subject
to restrictions, additional premiums. The Policy Owner may choose a minimum
initial premium of 80%, 90% or 100% of the Guideline Single Premium (based on
the Face Amount). Under current underwriting rules, which are subject to change,
applicants between ages 35 and 80 may be eligible for simplified underwriting
without a medical examination if they meet simplified underwriting standards as
evidenced in their responses in the application. For applicants who are below
age 35 or above age 80, or who do not meet simplified underwriting eligibility,
full underwriting applies, except that substandard underwriting applies only in
those cases that represent substandard risks according to customary underwriting
guidelines.
Additional premiums are allowed if they do not cause the Policy to fail to meet
the definition of a life insurance Policy under Section 7702 of the Code. The
amount and frequency of additional premium payments will affect the Cash Value
and the amount and duration of insurance. Hartford may require evidence of
insurability for any additional premiums which increase the Coverage Amount.
Generally, the minimum initial premium Hartford will accept is $10,000. Hartford
may accept less than $10,000 under certain circumstances. Premium which does not
meet the tax qualification guidelines for life insurance under the Code will not
be applied to the Policy.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the initial
premium at Hartford's Home Office, Hartford will allocate the entire premium to
the Putnam Money Market Sub-Account. After the expiration of the right to cancel
period, the Account Value in the Putnam Money Market Sub-Account will be
allocated among the Funds, in whole percentages, to purchase Accumulation Units
in the applicable Sub-Accounts as the Policy Owner directs in the application.
Premiums received on or after the expiration of the right to cancel period will
be allocated among the Sub-Accounts to purchase Accumulation Units in such
Sub-Accounts as directed by the Policy Owner or, in the absence of directions,
as specified in the original application. The number of Accumulation Units in
each Sub-Account to be credited to a Policy (including the initial allocation to
the Putnam Money Market Sub-Account) is determined first by multiplying the
premium by the percentage to be allocated to each Fund to determine the portion
to be invested in the Sub-Account. Each portion to be invested in each Sub-
Account is then divided by the Accumulation Unit Value of that particular
Sub-Account next computed after receipt of the premium payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each Sub-Account is the net asset value per share of the corresponding Fund at
the end of the Valuation Period (plus the per share dividends or capital gains
by that Fund if the ex-dividend date occurs in the Valuation Period then ended)
divided by the net asset value per share of the corresponding Fund at the
beginning of the Valuation Period. Refer to the Funds' prospectuses accompanying
this Prospectus for a description of how the assets of each Fund are valued,
since such determination has a direct bearing on the Accumulation Unit Value of
the Sub-Account and therefore the Account Value of a Policy. See also, "Policy
Benefits and Rights - Account Value," page 15.
All valuations in connection with a Policy, e.g., with respect to determining
Account Value and Cash Surrender Value and in connection with Policy Loans, or
calculation of Death Benefits, or with respect to determining the number of
11 - PROSPECTUS
<PAGE>
Accumulation Units to be credited to a Policy with each premium, other than the
initial premium, will be made on the date the request or payment is received by
Hartford at its Home Office if such date is a Valuation Day; otherwise such
determination will be made on the next succeeding date which is a Valuation Day.
DEDUCTIONS AND CHARGES
-------------------------------------------------------------------
The deduction or charges associated with this Policy are subtracted, depending
on the type of deduction or charge, from Premium payments as they are made, upon
surrender or partial surrender of the Policy, on the Policy Anniversary Date or
on a monthly pro rated basis from each Sub-Account ("Deduction Amount").
Deductions are taken from Premium payments before allocations to the
Sub-Accounts are made. Monthly Deduction Amounts are subtracted on the Policy
Date and on each Monthly Activity Date after the Policy Date to cover charges
and expenses incurred in connection with a Policy. Each Deduction Amount will be
subtracted pro rata from each
Sub-Account such that the proportion of Account Value of the Policy attributable
to each Sub-Account remains the same before and after the deduction. The
Deduction Amount will vary from month to month. If the Cash Surrender Value is
not sufficient to cover a Deduction Amount due on any Monthly Activity Date, the
Policy may lapse. See "Policy Benefits and Rights - Lapse and Reinstatement,"
page 17.
The Policy Owner may elect one of two options offered by Hartford to pay the
Mortality and Expense Risk charge, the Tax Expense charge and any Unamortized
Tax charge. Once selected, the option may not be changed. Option 2 may not be
available in all states.
The following chart illustrates the charges and deductions associated with this
Policy. For a more detailed discussion see the descriptions below:
<TABLE>
<CAPTION>
Deduction or Charge Deducted from All Policies When Deduction is made Amount Deducted
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
Cost of Insurance Yes Monthly Individualized depending on age,
sex and other factors
----------------------------------------------------------------------------------------------------------------------------------
Administrative Charge Yes Monthly .40% of amounts allocated to the
Separate Account
----------------------------------------------------------------------------------------------------------------------------------
Annual Maintenance Fee Only Policies with an Account On the Policy Anniversary Date or $30.00
Value of less than $50,000 on the upon surrender of the Policy
Policy Anniversary Date or date of
surrender
----------------------------------------------------------------------------------------------------------------------------------
Surrender Charge Yes Upon surrender or partial A percentage of the amount
surrender of the Policy surrendered, depending on the
Policy Year, which is attributable
to premiums paid
----------------------------------------------------------------------------------------------------------------------------------
Tax Expense Charge Yes Under Option 1: Monthly Under Option 1: .40% of Account
Value for Policy Years 1-10
Under Option 2: Receipt of premium Under Option 2: 4% of each premium
payment payment in all Policy Years
----------------------------------------------------------------------------------------------------------------------------------
Mortality and Expense Yes Monthly Under Option 1: .90% of Account
Risk Charge Value in Policy Years 1-10 and
.50% for Policy Years 11 and
beyond.
Under Option 2: .65% of Account
Value in Policy Years 1-10 and
.50% for Policy years 11 and
beyond
----------------------------------------------------------------------------------------------------------------------------------
Unamortized Tax Charge No, only under Option 1 Upon surrender or partial A percentage of the Account Value
surrender of the Policy depending on the Policy Year the
surrender takes place.
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
COST OF INSURANCE CHARGE
The cost of insurance charge covers Hartford's anticipated mortality costs for
standard and substandard risks. Current cost of insurance rates are lower after
the tenth Policy Year and are based on whether 100%, 90% or 80% of the Guideline
Single Premium has been paid at issue. The current cost of insurance charge will
not exceed the guaranteed cost of insurance charge. This charge is a guaranteed
maximum monthly rate multiplied by the Coverage Amount on the Policy Date or any
Monthly Activity Date.
12 - PROSPECTUS
<PAGE>
For Policies eligible for simplified underwriting, standard risks have a
guaranteed cost of insurance of 125% of the 1980 Commissioners Standard Ordinary
Smoker/Non-Smoker Mortality Table through age 90, grading down to 100% of the
1980 Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table at age
100 (age last birthday). For Policies not eligible for simplified underwriting,
standard risks have a guaranteed cost of insurance of 100% of the 1980
Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table. (Unisex rates
may be required in some states.) A table of guaranteed cost of insurance rates
per $1,000 will be included in each Policy; however, Hartford reserves the right
to use rates less than those shown in the Table. Substandard risks and Policies
issued employing simplified underwriting procedures will be charged at a higher
cost of insurance rate that will not exceed rates based on a multiple of the
1980 Commissioners Standard Ordinary Smoker/Non-Smoker Mortality Table (age last
birthday). The multiple will be based on the Insured's substandard rating.
The Coverage Amount is first set on the Policy Date and then on each Monthly
Activity Date. On such days, it is the Face Amount less the Account Value
subject to a Minimum Coverage Amount. The Coverage Amount remains level between
the Monthly Activity Dates. The Coverage Amount may be adjusted to continue to
qualify the Policies as life insurance Policies under the current federal tax
law. Under that law, the Minimum Coverage Amount is a stated percentage of the
Account Value of the Policy determined on each Monthly Activity Date. The
percentages vary according to the attained age of the Insured.
EXAMPLE:
Face Amount = $100,000
Account Value on the Monthly Activity Date = $70,000
Insured's attained age = 60
Minimum Coverage Amount percentage for age 60 = 30%
On the Monthly Activity Date, the Coverage Amount is $30,000. This is calculated
by subtracting the Account Value on the Monthly Activity Date ($70,000) from the
Face Amount ($100,000), subject to a possible Minimum Coverage Amount
adjustment. This Minimum Coverage Amount is determined by taking a percentage of
the Account Value on the Monthly Activity Date. In this case, the Minimum
Coverage Amount is $21,000 (30% of $70,000). Since $21,000 is less than the Face
Amount less the Account Value ($30,000), no adjustment is necessary. Therefore,
the Coverage Amount will be $30,000.
Assume that the Account Value in the above example was $90,000. The Minimum
Coverage Amount would be $27,000 (30% of $90,000). Since this is greater than
the Face Amount less the Account Value ($10,000), the Coverage Amount for the
Policy Month is $27,000. (For an explanation of the Death Benefit, see "Policy
Benefits and Rights - Death Benefit," page 15.)
Because the Account Value and, as a result, the Coverage Amount under a Policy
may vary from month to month, the cost of insurance charge may also vary on each
Monthly Activity Date.
ADMINISTRATIVE CHARGE
Hartford will deduct monthly from the Account Value attributable to the Separate
Account an administrative charge equal to an annual rate of 0.40%. This charge
compensates Hartford for administrative expenses incurred in the administration
of the Separate Account and the Policies.
ANNUAL MAINTENANCE FEE
If the Account Value on a Policy Anniversary or on the date the Policy is
surrendered is less than $50,000, Hartford will deduct on such date an annual
maintenance fee of $30. This fee will help reimburse Hartford for administrative
and maintenance costs of the Policies. The sum of the monthly administrative
charges and the annual maintenance fee will not exceed the cost Hartford incurs
in providing administrative services under the Policies. Hartford reserves the
right to waive the Annual Maintenance Fee under certain conditions.
SURRENDER CHARGE
Upon surrender of the Policy or partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. In Policy Years 1 through
3, this charge is 7.5% of surrendered Account Value attributable to premiums
paid. In Policy Years 4 through 5, this charge is 6%. In Policy Years 6 through
7, this charge is 4%. In Policy Years 8 through 9, this charge is 2%. After the
ninth Policy Year, there is no charge.
In determining the Surrender Charge and any Unamortized Tax charge discussed
below, any surrender or partial surrender during the first ten Policy Years will
be deemed first from premiums paid and then from earnings. If an amount equal to
all premiums paid has been withdrawn, no charge will be assessed on a surrender
of the remaining Account Value.
The Surrender Charge is imposed to cover a portion of the sales expense incurred
by Hartford in distributing the Policies. This expense includes agents
commissions, advertising and the printing of prospectuses. See "Policy Benefits
and Rights - Amount Payable on Surrender of the Policy," page 17.
POLICY OWNER OPTIONS
In addition to the deductions and charges described above, the Policy Owner, at
the time the Policy is issued, will elect one of two options described below to
pay charges relating to
13 - PROSPECTUS
<PAGE>
certain taxes and mortality and expense risk charges. The option selected by the
Policy Owner may affect Policy Value.
OPTION 1: ASSET-BASED CHARGES: Under this payment option, the Policy Owner
will pay:
MORTALITY AND EXPENSE RISK CHARGE: Hartford will deduct monthly from the Account
Value attributable to the Separate Account for Policy Years 1 through 10 a
charge equal to an annual rate of 0.90% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50% for the
mortality risks and expense risks Hartford assumes in relation to the variable
portion of the Policies. The mortality risk assumed is that the cost of
insurance charges specified in the Policy will be insufficient to meet claims.
Hartford also assumes a risk that the Face Amount (the minimum Death Benefit)
will exceed the Coverage Amount on the date of death plus the Account Value on
the date Hartford receives written notice of death. The expense risk assumed is
that expenses incurred in issuing and administering the Policies will exceed the
administrative charges set in the Policy. Hartford may profit from the mortality
and expense risk charge and may use any profits for any proper purpose,
including any difference between the cost it incurs in distributing the Policies
and the proceeds of the Surrender Charge. The mortality and expense risk charge
is deducted while the Policy is in force, including the duration of a payment
option.
TAX EXPENSE CHARGE: Hartford will deduct monthly from the Account Value a charge
equal to an annual rate of 0.40% for the first ten Policy Years. This charge
compensates Hartford for premium taxes imposed by various states and local
jurisdictions and for the cost of the capitalization of certain policy
acquisition expenses under Section 848 of the Code. The charge includes a
premium tax deduction of 0.25% and Section 848 cost of 0.15%. The 0.25% premium
tax deduction over ten Policy Years approximates Hartford's average expenses for
state and local premium taxes (2.5%). Premium taxes vary, ranging from zero to
more than 4.0%. The premium tax deduction is made whether or not any premium tax
applies. The deduction may be higher or lower than the premium tax imposed.
However, Hartford does not expect to make a profit from this deduction. The
0.15% charge helps reimburse Hartford for approximate expenses incurred under
Section 848 of the Code. The federal tax deduction is a factor Hartford must use
when computing the maximum sales load chargeable under Securities and Exchange
Commission rules.
UNAMORTIZED TAX CHARGE: Under this option, during the first nine Policy Years,
an Unamortized Tax charge will be imposed on surrender or partial surrenders.
The Unamortized Tax charge is shown below, as a percentage of Account Value, at
the end of each Policy Year:
<TABLE>
<CAPTION>
Policy
Year Rate
<S> <C>
---------------------
1 2.25%
---------------------
2 2.00%
---------------------
3 1.75%
---------------------
4 1.50%
---------------------
5 1.25%
---------------------
6 1.00%
---------------------
7 0.75%
---------------------
8 0.50%
---------------------
9 0.25%
---------------------
10+ 0.00%
---------------------
</TABLE>
After the ninth Policy Year, no Unamortized Tax charge will be imposed.
OPTION 2: FRONTED CHARGES: Under this option, the Policy Owner will pay:
MORTALITY AND EXPENSE RISK CHARGE: In Policy Years 1 through 10, Hartford will
deduct monthly from the Account Value attributable to the Separate Account a
charge equal to an annual rate of 0.65% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50%. The
mortality risk assumed is that the cost of insurance charges specified in the
Policy will be insufficient to meet claims. Hartford also assumes a risk that
the Face Amount (the minimum Death Benefit) will exceed the Coverage Amount on
the date of death plus the Account Value on the date Hartford receives written
notice of death. The expense risk assumed is that expenses incurred in issuing
and administering the Policies will exceed the administrative charges set in the
Policy. Hartford may profit from the mortality and expense risk charge and may
use any profits for any proper purpose, including any difference between the
cost it incurs in distributing the Policies and the proceeds of the Surrender
Charge. The mortality and expense risk charge is deducted while the Policy is in
force, including the duration of a payment option.
TAX EXPENSE CHARGE: Hartford will deduct from Premium payments a tax expense
charge equal to an annual rate of 4.0% for all Policy Years. This charge
compensates Hartford for premium taxes imposed by various states and local
jurisdictions and for the cost of capitalization of certain policy acquisition
expenses under Section 848 of the Code. The charge includes a premium tax
deduction of 2.5% and a Section 848 cost of 1.5%. The premium tax deduction
approximates Hartford's average expenses for state and local premium taxes.
Premium taxes vary, ranging from zero to
14 - PROSPECTUS
<PAGE>
more than 4.0%. The premium tax deduction is made whether or not any premium tax
applies. The deduction may be higher or lower than the premium tax imposed.
However, Hartford does not expect to make a profit from this deduction. The
0.15% charge helps reimburse Hartford for approximate expenses incurred under
Section 848 of the Code. The federal tax deduction is a factor Hartford must use
when computing the maximum sales load chargeable under Securities and Exchange
Commission rules.
This Option may not be available in all states.
OTHER DEDUCTIONS OR CHARGES
CHARGES AGAINST THE FUNDS The Separate Account purchases shares of the Funds at
net asset value. The net asset value of the Fund shares reflects investment
advisory fees and administrative expenses already deducted from the assets of
the Funds. These charges are described in the Funds? prospectuses accompanying
this Prospectus.
TAXES CHARGED AGAINST THE SEPARATE ACCOUNT Currently, no charge is made to the
Separate Account for federal income taxes that may be attributable to the
Separate Account. Hartford may, however, make such a charge in the future.
Charges for other taxes, if any, attributable to the Separate Account may also
be made.
POLICY BENEFITS AND RIGHTS
-------------------------------------------------------------------
DEATH BENEFIT
While in force, the Policy provides for the payment of the Death Proceeds to the
named beneficiary when the Insured under the Policy dies. The Death Proceeds
payable to the beneficiary equal the Death Benefit less any loans outstanding.
The Death Benefit equals the greater of (1) the Face Amount or (2) the Account
Value multiplied by a specified percentage. The percentages vary according to
the attained age of the Insured and are specified in the Policy. Therefore, an
increase in Account Value may increase the Death Benefit. However, because the
Death Benefit will never be less than the Face Amount, a decrease in Account
Value may decrease the Death Benefit, but never below the Face Amount.
EXAMPLES:
<TABLE>
<CAPTION>
A B
<S> <C> <C>
- -----------------------------------------
Face Amount: $ 100,000 $ 100,000
- -----------------------------------------
Insured's Age: 40 40
- -----------------------------------------
Account Value on
Date of Death: 46,500 34,000
- -----------------------------------------
Specified
Percentage 250 % 250 %
- -----------------------------------------
</TABLE>
In Example A, the Death Benefit equals $116,250, i.e., the greater of $100,000
(the Face Amount) or $116,250 (the Account Value at the Date of Death of
$46,500, multiplied by the specified percentage of 250%). This amount, less any
outstanding loans, constitutes the Death Proceeds which Hartford would pay to
the beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000 (the
Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters - Settlement Provisions," page 19.
ACCOUNT VALUE
The Account Value of a Policy will be computed on each Valuation Day. The
Account Value will vary to reflect the investment experience of the Funds, the
value of the Loan Account and the monthly Deduction Amounts. There is no minimum
guaranteed Account Value.
The Account Value of a particular Policy is related to the net asset value of
the Funds to which premiums on the Policy have been allocated. The Account Value
on any Valuation Day is calculated by multiplying the number of Accumulation
Units credited to the Policy in each Sub-Account as of the Valuation Day by the
Accumulation Unit Value of that Sub-Account, and then summing the result for all
the Sub-Accounts credited to the Policy and the value of the Loan Account. See
"The Policy - Accumulation Unit Values," page 11.
TRANSFER OF ACCOUNT VALUE
While the Policy remains in force, and subject to Hartford's transfer rules then
in effect, the Policy Owner may request that part or all of the Account Value of
a particular Sub-Account be transferred to other Sub-Accounts. Hartford reserves
the right to restrict the number of such transfers to no more than 12 per Policy
Year, with no two transfers being made on consecutive Valuation Days. However,
there are no restrictions on the number of transfers at the present time.
Transfers may be made by written request or by calling toll free 1-800-231-5453.
Transfers by telephone may be made by the agent of record or by the
attorney-in-fact pursuant to a power of attorney. Telephone transfers may not be
15 - PROSPECTUS
<PAGE>
permitted in some states. The policy of Hartford and its agents and affiliates
is that they will not be responsible for losses resulting from acting upon
telephone requests reasonably believed to be genuine. Hartford will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine; otherwise, Hartford may be liable for any losses due to unauthorized or
fraudulent instructions. The procedures Hartford follows for transactions
initiated by telephone include requirements that callers provide certain
information for identification purposes. All transfer instructions by telephone
are tape recorded. HARTFORD WILL SEND THE POLICY OWNER A CONFIRMATION OF THE
TRANSFER WITHIN FIVE DAYS FROM THE DATE OF ANY INSTRUCTION. IT IS THE
RESPONSIBILITY OF THE POLICY OWNER TO VERIFY THE ACCURACY OF ALL CONFIRMATIONS
OF TRANSFERS AND TO PROMPTLY ADVISE HARTFORD OF ANY INACCURACIES WITHIN 30 DAYS.
Hartford may modify the right to reallocate Account Value among the Sub-Accounts
if Hartford determines, in its sole discretion, that the exercise of that right
by one or more Policy Owners is, or would be, to the disadvantage of other
Policy Owners. Any modification could be applied to transfers to or from some or
all of the Sub-Accounts and could include, but not be limited to, the
requirement of a minimum period between each transfer, not accepting transfer
requests of an agent acting under the power of attorney on behalf of more than
one Policy Owner, or limiting the dollar amount that may be transferred among
the Sub-Accounts at one time. These restrictions may be applied in any manner
reasonably designed to prevent any use of the transfer right that Hartford
considers to be disadvantageous to other Policy Owners.
As a result of a transfer, the number of Accumulation Units credited to the
Sub-Account from which the transfer is made will be reduced by the number
obtained by dividing the amount transferred by the Accumulation Unit Value of
that Sub-Account on the Valuation Day Hartford receives the transfer request.
The number of Accumulation Units credited to the Sub-Account to which the
transfer is made will be increased by the number obtained by dividing the amount
transferred by the Accumulation Unit Value of that Sub-Account on the Valuation
Day Hartford receives the transfer request.
POLICY LOANS
While the Policy is in effect, a Policy Owner may obtain, without the consent of
the beneficiary (provided the designation of beneficiary is not irrevocable),
one or both of two types of cash loans from Hartford. Both types of loans are
secured by the Policy. The aggregate loans (including the currently applied for
loan) may not exceed at the time a loan is requested 90% of the Cash Value.
The loan amount will be transferred pro rata from each Sub-Account attributable
to the Policy (unless the Policy Owner specifies otherwise) to the Loan Account.
The amounts allocated to the Loan Account will earn interest at a rate of 4% per
annum (6% for "Preferred Loans"). The amount of the Loan Account that equals the
difference between the Cash Value and the total of all premiums paid under the
Policy is considered a "Preferred Loan." For exchanges which take place
according to Code Section 1035(a) that have an outstanding loan at the time of
transfer, the difference between the Account Value and the total of all premiums
paid under the Policy is considered a Preferred Loan. The loan interest rate
that Hartford will charge on all loans is 6% per annum. The difference between
the value of the Loan Account and the Indebtedness will be transferred on a
pro-rata basis from the Sub-Accounts to the Loan Account on each Monthly
Activity Date. The proceeds of a loan will be delivered to the Policy Owner
within seven business days of Hartford?s receipt of the loan request.
If the aggregate outstanding loan(s) secured by the Policy exceeds the Account
Value of the Policy less any Surrender Charges and due and unpaid Deduction
Amount, Hartford will give written notice to the Policy Owner that, unless
Hartford receives an additional payment within 61 days to reduce the aggregate
outstanding loan(s) secured by the Policy, the Policy may lapse.
All or any part of any loan secured by a Policy may be repaid while the Policy
is still in effect. When loan repayments or interest payments are made, they
will be allocated among the Sub-Account(s) in the same percentage as premiums
are allocated (unless the Policy Owner requests a different allocation) and an
amount equal to the payment will be deducted from the Loan Account. Any
outstanding loan at the end of a grace period must be repaid before the Policy
will be reinstated. See "Policy Benefits and Rights - Lapse and Reinstatement,"
page 17.
A loan, whether or not repaid, will have a permanent effect on the Account Value
because the investment results of each Sub-Account will apply only to the amount
remaining in such Sub-Accounts. The longer a loan is outstanding, the greater
the effect is likely to be. The effect could be favorable or unfavorable. If the
Sub-Accounts earn more than the annual interest rate for amounts held in the
Loan Account, a Policy Owner's Account Value will not increase as rapidly as it
would have had no loan been made. If the Sub-Accounts earn less than the
interest rate for amounts held in the Loan Account, the Policy Owner's Account
Value will be greater than it would have been had no loan been made. Also, if
not repaid, the aggregate outstanding loan(s) will reduce the Death Proceeds and
Cash Surrender Value otherwise payable.
16 - PROSPECTUS
<PAGE>
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
While the Policy is in force, a Policy Owner may elect, without the consent of
the beneficiary (provided the designation of beneficiary is not irrevocable), to
fully surrender the Policy. Upon surrender, the Policy Owner will receive the
Cash Surrender Value determined as of the day Hartford receives the Policy
Owner's written request or the date requested by the Policy Owner whichever is
later. The Cash Surrender Value equals the Account Value less any Surrender
Charges and Unamortized Tax charge and all Indebtedness. Hartford will pay the
Cash Surrender Value of the Policy within seven days of receipt by Hartford of
the written request or on the effective surrender date requested by the Policy
Owner, whichever is later. The Policy will terminate on the date of receipt of
the written request, or the date the Policy Owner requests the surrender to be
effective, whichever is later. For a discussion of the tax consequences of
surrendering the Policy, see "Federal Tax Considerations," page 25.
If the Policy Owner chooses to apply the surrender proceeds to a payment option
(see "Other Matters - Settlement Provisions," page 19), the Surrender Charge
will not be imposed to the surrender proceeds applied to the option. In other
words, the surrender proceeds will equal the Cash Surrender Value without
reduction for the Surrender Charge. However, any Unamortized Tax charge, if
applicable, will be deducted from the surrender proceeds to be applied. In
addition, any amounts withdrawn from payment Option 1, Option 5 or Option 6 will
be subject to any applicable Surrender Charge.
PARTIAL SURRENDERS
While the Policy is in force, a Policy Owner may elect, by written request, to
make partial surrenders from the Cash Surrender Value. The Cash Surrender Value,
after a partial surrender, must at least equal Hartford's minimum amount rules
then in effect; otherwise, the request will be treated as a request for full
surrender. The partial withdrawal will be deducted pro rata from each
Sub-Account, unless the Policy Owner instructs otherwise. The Face Amount will
be reduced proportionate to the reduction in the Account Value due to the
partial withdrawal. Partial surrenders in excess of the Annual Withdrawal Amount
will be subject to the Surrender Charge and any Unamortized Tax charges. See
"Deductions and Charges - Surrender Charge," page 13. For a discussion of the
tax consequences of partial surrenders, see "Federal Tax Considerations," page
25.
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the Policy
Date on which the Insured is age 100), on surrender of the Policy to Hartford,
Hartford will pay to the Policy Owner the Cash Surrender Value. In such case,
the Policy will terminate and Hartford will have no further obligations under
the Policy. (The Maturity Date may be extended by rider where approved, but see
"Federal Tax Considerations - Income Taxation of Policy Benefits," page 26.)
LAPSE AND REINSTATEMENT
The Policy will remain in effect until the Cash Surrender Value is insufficient
to cover a Deduction Amount due on a Monthly Activity Date. Hartford will notify
the Policy Owner of the deficiency in writing and will provide a 61-day grace
period to pay an amount sufficient to cover the Deduction Amount(s) due. The
notice will indicate the amount that must be paid.
The Policy will continue through the grace period, but if no payment is
forthcoming it will terminate at the end of the grace period. If the person
insured under the Policy dies during the grace period, the Death Proceeds
payable under the Policy will be reduced by the Deduction Amount(s) due and
unpaid. See "Policy Benefits and Rights - Death Benefit," page 15.
If the Policy lapses, the Policy Owner may apply for reinstatement of the Policy
by payment of the reinstatement premium and any applicable charges. A request
for reinstatement may be made within five years of lapse. If a loan was
outstanding at the time of lapse, Hartford will require repayment of the loan
before permitting reinstatement. In addition, Hartford reserves the right to
require evidence of insurability satisfactory to Hartford.
CANCELLATION AND EXCHANGE RIGHTS
A Policy Owner has a limited right to return a Policy for cancellation. If the
Policy is returned, by mail or personal delivery to Hartford or to the agent who
sold the Policy, to be cancelled within ten days after delivery of the Policy to
the Policy Owner (a longer free-look period is provided in certain cases),
Hartford will return to the Policy Owner within seven days the greater of
premiums paid for the Policy less any Indebtedness or the sum of (1) the Account
Value less Indebtedness on the date the returned Policy is received by Hartford
or its agent and (2) any deductions under the Policy or by the Funds for taxes,
charges or fees.
Once the Policy is in force, it may be exchanged during the first 24 months
after its issuance, for a non-variable flexible premium adjustable life
insurance policy offered by Hartford (or an affiliated company) on the life of
the Insured. No evidence of insurability will be required. The new policy will
have, at the election of the Policy Owner, either the same Coverage Amount under
the exchanged Policy on the date of exchange or the same Death Benefit. The
effective date, issue date and issue age will be the same as existed under the
exchanged Policy. If a Policy loan was outstanding, the entire loan must be
repaid. There may be a cash adjustment required on the exchange.
SUSPENSION OF VALUATION, PAYMENTS AND TRANSFERS
Hartford will suspend all procedures requiring valuation (including transfers,
surrenders and loans) on any day a national stock exchange is closed or trading
is restricted due
17 - PROSPECTUS
<PAGE>
to an existing emergency as defined by the Securities and Exchange Commission,
or on any day the Securities and Exchange Commission has ordered that the right
of surrender of the Policies be suspended for the protection of Policy Owners,
until such condition has ended.
LAST SURVIVOR POLICIES
-------------------------------------------------------------------
The Policies are offered on both a single life and a "last survivor" basis.
Policies sold on a last survivor basis operate in a manner almost identical to
the single life version. The most important difference is that the last survivor
version involves two Insureds and the Death Proceeds are paid on the death of
the last surviving Insured. The other significant differences between the last
survivor and single life versions are listed below.
1. The cost of insurance charges under the last survivor policies are
determined in a manner that reflects the anticipated mortality of the two
Insureds and the fact that the Death Benefit is not payable until the death
of the second Insured. See the last survivor illustrations in "Appendix A,"
page 31.
2. To qualify for simplified underwriting under a last survivor policy, both
Insureds must meet the simplified underwriting standards.
3. For a last survivor policy to be reinstated, both Insureds must be alive on
the date of reinstatement.
4. The Policy provisions regarding misstatement of age or sex, suicide and
incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor policies are provided
in "Federal Tax Considerations," page 25.
OTHER MATTERS
-------------------------------------------------------------------
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, Hartford will
vote the shares of the Funds at regular and special meetings of the shareholders
of the Funds in accordance with instructions from Policy Owners (or the assignee
of the Policy, as the case may be) having a voting interest in the Separate
Account. The number of shares held in the Separate Account which are
attributable to each Policy Owner is determined by dividing the Policy Owner's
interest in each Sub-Account by the net asset value of the applicable shares of
the Funds. Hartford will vote shares for which no instructions have been given
and shares which are not attributable to Policy Owners (i.e., shares owned by
Hartford) in the same proportion as it votes shares for which it has received
instructions. However, if the Investment Company Act of 1940 or any rule
promulgated thereunder should be amended, or if Hartford's present
interpretation should change and, as a result, Hartford determines it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The voting interests of the Policy Owner (or the assignee) in the Funds will be
determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the
Sub-Account(s) to the Loan Account in connection with the loan (See "Policy
Benefits and Rights - Policy Loans," page 16) will not be considered in
determining the voting interests of the Policy Owner. Policy Owners should
review the Funds prospectuses accompanying this Prospectus to determine matters
on which shareholders may vote.
Hartford may, when required by state insurance regulatory authorities, disregard
Policy Owners' voting instructions if such instructions require that the shares
be voted so as to cause a change in the sub-classification or investment
objective of one or more of the Funds or to approve or disapprove an investment
advisory policy for the Funds.
In addition, Hartford itself may disregard Policy Owners' voting instructions in
favor of changes initiated by a Policy Owner in the investment policy or the
investment adviser of the Funds if Hartford reasonably disapproves of such
changes. A change would be disapproved only if the proposed change is contrary
to state law or prohibited by state regulatory authorities. If Hartford does
disregard voting instructions, a summary of that action and the reasons for such
action will be included in the next periodic report to Policy Owners.
18 - PROSPECTUS
<PAGE>
STATEMENTS TO POLICY OWNERS
Hartford will maintain all records relating to the Separate Account and the
Sub-Accounts. At least once each Policy Year, Hartford will send to Policy
Owners a statement showing the Coverage Amount and the Account Value of the
Policy (indicating the number of Accumulation Units credited to the Policy in
each Sub-Account and the corresponding Accumulation Unit Value) and any
outstanding loan secured by the Policy as of the date of the statement. The
statement will also show premium paid, and Deduction Amounts under the Policy
since the last statement, and any other information required by any applicable
law or regulation.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of the Policy after it has been in effect
during the Insured's lifetime for two years from the Issue Date. If the Policy
is reinstated, the two-year period is measured from the date of reinstatement.
Any increase in the Coverage Amount as a result of a premium payment is
contestable for two years from its effective date. In addition, if the Insured
commits suicide in the two-year period, or such period as specified in state
law, the benefit payable will be limited to the Account Value less any
Indebtedness.
MISSTATEMENT AS TO AGE AND SEX
If the age or sex of the Insured is incorrectly stated, the Death Benefit will
be appropriately adjusted as specified in the Policy.
SETTLEMENT PROVISIONS
The surrender proceeds or Death Proceeds under the Policies may be paid in a
lump sum or may be applied to one of Hartford's payment options. The minimum
amount that may be applied under a payment option is $5,000 unless Hartford
consents to a lesser amount. UNDER PAYMENT OPTIONS 2, 3 AND 4, NO SURRENDER OR
PARTIAL SURRENDERS ARE PERMITTED AFTER PAYMENTS COMMENCE. FULL SURRENDER OR
PARTIAL SURRENDERS MAY BE MADE FROM PAYMENT OPTIONS 1 OR 6, BUT THEY ARE SUBJECT
TO THE SURRENDER CHARGE, IF APPLICABLE. ONLY A FULL SURRENDER IS ALLOWED FROM
PAYMENT OPTION 5. A SURRENDER FROM PAYMENT OPTION 5 WILL ALSO BE SUBJECT TO THE
SURRENDER CHARGE, IF APPLICABLE.
Hartford will pay interest of at least 3 1/2% per year on the Death Proceeds
from the date of the Insured's death to the date payment is made or a payment
option is elected. At such times, the proceeds are not subject to the investment
experience of the Separate Account.
The following options are available under the Policies
(Hartford may offer other payment options):
OPTION 1: INTEREST INCOME
This option offers payments of interest, at the rate Hartford declares, on the
amount applied under this option. The interest rate will never be less than
3 1/2% per year.
OPTION 2: LIFE ANNUITY
A life annuity is an annuity payable during the lifetime of the payee and
terminating with the last payment preceding the death of the payee. This option
offers the largest payment amount of any of the life annuity options, since
there is no guarantee of a minimum number of payments nor a provision for a
death benefit payable to a beneficiary.
It would be possible under this option for a payee to receive only one annuity
payment if he died prior to the due date of the second annuity payment, two
annuity payments if he died before the date of the third annuity payment, etc.
OPTION 3: LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN
This annuity option is an annuity payable monthly during the lifetime of the
payee with the provision that payments will be made for a minimum of 120, 180 or
240 months, as elected. If, at the death of the payee, payments have been made
for less than the minimum elected number of months, then the present value (as
of the date of the payee's death) of any remaining guaranteed payments will be
paid in one sum to the beneficiary or beneficiaries designated, unless other
provisions have been made and approved by Hartford.
OPTION 4: JOINT AND LAST SURVIVOR ANNUITY
An annuity payable monthly during the joint lifetime of the payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by Hartford, the payee may elect that the
payment to the survivor be less than the payment made during the joint lifetime
of the payee and a designated second person.
It would be possible under this option for a payee and designated second person
to receive only one payment in the event of the common or simultaneous death of
the parties prior to the due date for the second payment and so on.
OPTION 5: PAYMENTS FOR A DESIGNATED PERIOD
An amount payable monthly for the number of years selected which may be from
five to 30 years. Under this option, you may, at any time, request a full
surrender and receive, within seven days, the termination value of the Policy as
determined by Hartford.
In the event of the payee's death prior to the end of the designated period, the
present value (as of the date of the payee's death) of any remaining guaranteed
payments will be paid in one sum to the beneficiary or beneficiaries designated
unless other provisions have been made and approved by Hartford.
Option 5 is an option that does not involve life contingencies.
OPTION 6: POLICY PROCEEDS SETTLEMENT OPTION
Proceeds from the Death Benefit left with Hartford. These proceeds will remain
in the Sub-Accounts to which they were
19 - PROSPECTUS
<PAGE>
allocated at the time of death unless the beneficiary elects to reallocate them.
Full or partial surrenders may be made at any time.
VARIABLE AND FIXED ANNUITY PAYMENTS: When an Annuity is effected, unless
otherwise specified, the surrender proceeds or Death Proceeds held in the
Sub-Accounts will be applied to provide a variable annuity based on the pro rata
amount in the various Sub-Accounts. Fixed annuities options are also available.
YOU SHOULD CONSIDER WHETHER THE ALLOCATION OF PROCEEDS AMONG SUB-ACCOUNTS OF THE
SEPARATE ACCOUNT FOR YOUR ANNUITY PAYMENTS ARE BASED ON THE INVESTMENT
ALTERNATIVE BEST SUITED TO YOUR RETIREMENT NEEDS.
VARIABLE ANNUITY: The Policies contains tables indicating the minimum dollar
amount of the first monthly payment under the optional variable forms of annuity
for each $1,000 of value of a Sub-Account. The first monthly payment varies
according to the form and type of variable payment annuity selected. The Policy
contains variable payment annuity tables derived from the 1983(a) Individual
Annuity Mortality Table, with ages set back one year and with an assumed
investment rate ("A.I.R.") of 5% per annum. The total first monthly variable
annuity payment is determined by multiplying the proceeds value (expressed in
thousands of dollars) of a Sub-Account by the amount of the first monthly
payment per $1,000 of value obtained from the tables in the Policy.
The amount of the first monthly variable annuity payment is divided by the value
of an annuity unit (an accounting unit of measure used to calculate the value of
annuity payments) for the appropriate Sub-Account no earlier than the close of
business on the fifth Valuation Day preceding the day on which the payment is
due in order to determine the number of annuity units represented by the first
payment. This number of annuity units remains fixed during the annuity payment
period, and in each subsequent month the dollar amount of the variable annuity
payment is determined by multiplying this fixed number of annuity units by the
current annuity unit value.
LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN FACT, PAYMENTS WILL VARY UP OR DOWN
AS THE INVESTMENT RATE VARIES UP OR DOWN RELATIVE TO THE A.I.R.
FIXED ANNUITY: Fixed annuity payments are determined by multiplying the amount
applied to the annuity by a rate (to be determined by Hartford) which is no less
than the rate specified in the fixed payment annuity tables in the Policy. The
annuity payment will remain level for the duration of the annuity.
Hartford will make any other arrangements for income payments as may be agreed
on.
BENEFICIARY
The applicant names the beneficiary in the application for the Policy. The
Policy Owner may change the beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford. If no beneficiary is living
when the Insured dies, the Death Proceeds will be paid to the Policy Owner if
living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
20 - PROSPECTUS
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
-------------------------------------------------------------------
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
POSITION WITH HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME; AGE YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Wendell J. Bossen Vice President, 1995** Vice President (1992-Present), Hartford Life and Accident
64 Insurance Company; Vice President (1992-Present), Hartford
Life Insurance Company; President (1992-Present),
International Corporate Marketing Group, Inc.
Gregory A. Boyko Senior Vice President, 1997 Vice President & Controller (1995-1997), Hartford; Director
46 Director, 1997* (1997-Present); Senior Vice President, Chief Financial
Officer & Treasurer (1997-1998); Vice President & Controller
(1995-1997), Hartford Life and Accident Insurance Company;
Director (1997-Present); Senior Vice President, Chief
Financial Officer & Treasurer (1997-1998); Vice President
and Controller (1995-1997), Hartford Life Insurance Company;
Senior Vice President, Chief Financial Officer & Treasurer
(1997-Present), Hartford Life, Inc.; Chief Financial Officer
(1994-1995), IMG American Life; Senior Vice President
(1992-1994), Connecticut Mutual Life Insurance Company.
Peter W. Cummins Senior Vice President, 1997 Vice President (1993-1997), Hartford; Senior Vice President,
60 (1997-Present); Vice President (1989-1997), Hartford Life
and Accident Insurance Company; Senior Vice President
(1997-Present); Vice President (1989-1997); Senior Vice
President (1997-Present); Vice President (1989-1997),
Hartford Life Insurance Company.
Ann M. de Raismes Senior Vice President, 1997 Vice President (1994-1997), Hartford; Senior Vice President
47 Director of Human (1997-Present); Vice President (1994-1997); Assistant Vice
Resources, 1994 President (1992-1994); Director of Human Resources
(1991-Present), Hartford Life and Accident Insurance
Company; Senior Vice President (1997-Present); Vice
President (1994-1997); Assistant Vice President (1992-1994);
Director of Human Resources (1991-Present), Hartford Life
Insurance Company; Vice President, Human Resources
(1997-Present), Hartford Life, Inc.
James R. Dooley Vice President, 1993 Director, Information Services (1973-1997), Hartford Life
61 Insurance Company.
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Actuary (1994-Present);
45 Actuary, 1997 Assistant Vice President (1992-1995), Hartford Life and
Accident Insurance Company; Vice President (1995-Present);
Actuary (1994-Present); Assistant Vice President
(1992-1995), Hartford Life Insurance Company.
David T. Foy Senior Vice President and Assistant Vice President (1995-1998), Hartford; Vice
31 Treasurer, 1998 President (1998), Assistant Vice President (1995-1998),
Hartford Life Insurance Company.
J. Richard Garrett Vice President, 1994 Treasurer (1994-1997), Hartford; Vice President
53 Assistant Treasurer, 1997 (1993-Present); Assistant Treasurer (1997-Present);
Treasurer (1984-1997), Hartford Life and Accident Insurance
Company; Vice President, (1993-Present); Assistant Treasurer
(1997-Present); Treasurer (1986-1997), Hartford Life
Insurance Company; Vice President (1997-Present), Hartford
Life, Inc.
</TABLE>
21 - PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
POSITION WITH HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME; AGE YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Donald J. Gillette Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
52 Vice President (1995-1997), Hartford Life and Accident
Insurance Company; Assistant Vice President (1995-Present),
Hartford Life Insurance Company.
William A. Godfrey, III Senior Vice President, 1997 Senior Vice President (1997- Present), Hartford; Senior Vice
41 President (1997-Present), Hartford Life and Accident
Insurance Company; Vice President Information Technology
(1997-Present), Hartford Life, Inc.
Lynda Godkin Senior Vice President, 1997 Assistant General Counsel and Secretary (1994-1995),
44 General Counsel, 1996 Hartford; Director (1997-Present); Senior Vice President
Corporate Secretary, 1996 (1997-Present); General Counsel (1996-Present); Corporate
Director, 1997* Secretary (1995-Present); Associate General Counsel
(1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life and Accident
Insurance Company; Senior Vice President (1997-Present);
General Counsel (1996-Present); Corporate Secretary
(1995-Present); Director (1997-Present); Associate General
Counsel (1995-1996); Assistant General Counsel and Secretary
(1994-1995); Counsel (1990-1994), Hartford Life Insurance
Company; Vice President and General Counsel (1997-Present),
Hartford Life, Inc.
Lois W. Grady Senior Vice President, 1998 Vice President (1994-1998), Hartford; Senior Vice President
53 Vice President, 1994 (1998-Present); Vice President (1993-1997); Assistant Vice
President (1987-1993), Hartford Life and Accident Insurance
Company; Senior Vice President (1998-Present); Vice
President (1994-1997); Assistant Vice President (1987-1994),
Hartford Life Insurance Company.
Christopher Graham Vice President, 1997
47
Mark E. Hunt Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice
37 President (1998-Present), Hartford Life and Accident
Insurance Company.
Stephen T. Joyce Vice President, 1997 Assistant Vice President (1995-1997), Hartford; Assistant
39 Vice President (1994-1997), Hartford Life and Accident
Insurance Company; Vice President (1997-Present); Assistant
Vice President (1994-1997), Hartford Life Insurance Company.
Michael D. Keeler Vice President, 1998 Vice President (1998-Present); Hartford Life and Accident
37 Insurance Company.
Robert A. Kerzner Senior Vice President, 1998 Senior Vice President (1998-Present); Vice President
46 Vice President, 1997 (1994-1998), Hartford; Senior Vice President (1998-Present);
Vice President (1994-1997); Regional Vice President
(1991-1994), Hartford Life Insurance Company.
David N. Levenson Vice President, 1998 Assistant Vice President (1997-1998), Hartford.
31
</TABLE>
22 - PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
POSITION WITH HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME; AGE YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
William B. Malchodi, Jr. Vice President, 1994 Vice President (1994-Present); Director of Taxes
50 (1992-1998), Hartford Life and Accident Insurance Company;
Vice President (1994-Present); Director of Taxes
(1991-1998), Hartford Life Insurance Company.
Thomas M. Marra Executive Vice President, Senior Vice President (1993-1996); Director of Individual
39 1996 Annuities (1991-1993), Hartford; Director (1994-Present);
Director, Individual Life Executive Vice President (1995-Present); Director,
and Annuity Division, 1993 Individual Life and Annuity Division (1994-Present); Senior
Director, 1994* Vice President (1994-1995); Vice President (1989-1994);
Actuary (1987-1997), Hartford Life and Accident Insurance
Company; Director (1994-Present); Executive Vice President
(1995-Present); Director, Individual Life and Annuity
Division (1994-Present); Senior Vice President (1994-1995);
Vice President (1989-1994); Actuary (1987-1995), Hartford
Life Insurance Company; Executive Vice President, Individual
Life and Annuities (1997-Present), Hartford Life, Inc.
Steven L. Matthieson Vice President, 1984 Director of New Business (1984-1997), Hartford.
53
C. Michael O'Halloran Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
51 Insurance Company; Vice President (1997-Present), Hartford
Life Insurance Company; Corporate Secretary (1997-Present),
Hartford Life, Inc.; Senior Associate General Counsel
(1988-Present), Director of Corporate Law (1994-Present),
The Hartford Financial Services Group.
Craig R. Raymond Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President
37 Chief Actuary, 1994 (1992-1993); Actuary (1989-1994), Hartford; Senior Vice
President (1997-Present); Chief Actuary (1995-Present); Vice
President (1993-1997); Actuary (1990-1995), Hartford Life
and Accident Insurance Company; Senior Vice President
(1997-Present); Chief Actuary (1994-Present); Vice President
(1993-1997); Assistant Vice President (1992-1993); Actuary
(1989-1994), Hartford Life Insurance Company; Vice President
and Chief Actuary (1997-Present), Hartford Life, Inc.
David T. Schrandt Vice President, 1987 Treasurer (1987-1997); Controller (1987-1997), Hartford.
50
Lowndes A. Smith President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
58 Chief Executive Officer, (1981-Present); President (1989-Present); Chief Executive
1997 Officer (1997-Present); Chief Operating Officer (1989-1997),
Director, 1985* Hartford Life and Accident Insurance Company; Director
(1981-Present); President (1989-Present), Chief Executive
Officer (1997-Present); Chief Operating Officer (1989-1997),
Hartford Life Insurance Company; Chief Executive Officer and
President and Director (1997-Present), Hartford Life, Inc.
</TABLE>
23 - PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
OTHER BUSINESS PROFESSION,
POSITION WITH HARTFORD; VOCATION OR EMPLOYMENT FOR PAST
NAME; AGE YEAR OF ELECTION FIVE YEARS; OTHER DIRECTORSHIPS
<S> <C> <C>
Raymond P. Welnicki Senior Vice President & Vice President (1993-1994), Hartford; Director
49 Director, Employee (1994-Present); Senior Vice President (1995-Present);
Benefit Division, 1994 Director, Employee Benefit Division (1997-Present); Vice
Director, 1994* President (1993-1995), Hartford Life and Accident Insurance
Company; Senior Vice President, Employee Benefits
(1997-Present), Hartford Life, Inc.; Board of Directors,
Ethix Corp.
Walter C. Welsh Senior Vice President, 1997 Senior Vice President (1997-Present); Vice President
51 (1994-1997); Assistant Vice President (1992-1995), Hartford
Life and Accident Insurance Company; Senior Vice President
(1997-Present); Vice President (1995-1997); Assistant Vice
President (1992-1995), Hartford Life Insurance Company; Vice
President, Government Affairs (1997-Present), Hartford Life,
Inc.
Lizabeth H. Zlatkus Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice President
39 Director, 1994* (1992-1994), Hartford; Director (1994-Present); Senior Vice
President (1997-Present); Vice President (1994-1997);
Assistant Vice President (1992-1994), Hartford Life and
Accident Insurance Company; Vice President, Group Life and
Disability (1997-Present), Hartford Life, Inc.
David M. Znamierowski Senior Vice President, 1997 Director (1998-Present); Senior Vice President
38 Director, 1998 (1997-Present), Hartford Life and Accident Insurance
Company; Director (1998-Present); Senior Vice President
(1997-Present); Director, Risk Management Strategy
(1996-Present); Vice President (1997), Hartford Life
Insurance Company; Vice President, Investment Strategy
(1997-Present), Hartford Life, Inc.; Vice President,
Investment Strategy & Policy, Aetna Life and Casualty
Company.
</TABLE>
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
- ------------------------
* Denotes date of election to Board of Directors of Hartford.
** Affiliated Company of The Hartford Financial Services Group, Inc.
24 - PROSPECTUS
<PAGE>
DISTRIBUTION OF THE POLICIES
-------------------------------------------------------------------
Hartford intends to sell the Policies in all jurisdictions where it is licensed
to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO") or certain other independent,
registered broker-dealers. Any sales representative or employee will have been
qualified to sell variable life insurance policies under applicable federal and
state laws. Each broker-dealer is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 and all are members of the
National Association of Securities Dealers, Inc.
Hartford Securities Distribution Company, Inc. ("HSD") serves as Principal
Underwriter for the securities issued with respect to the Separate Account. Both
HESCO and HSD are affiliates of Hartford Life Insurance Company. Hartford's
parent company indirectly owns 100% of HSD and HESCO. The principal business
address of HESCO and HSD is the same as that of Hartford.
The maximum sales commission payable to Hartford agents, independent registered
insurance brokers, and other registered broker-dealers is 6.0% of initial and
subsequent premiums. Additional annual compensation of no more than 0.75% of
Account Value may be paid.
Broker-dealers or financial institutions are compensated according to a schedule
set forth by HSD and any applicable rules or regulations for variable insurance
compensation. Compensation is generally based on premium payments made by
policyholders or contract owners. This compensation is usually paid from the
sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance products.
These payments, which may be different for different broker-dealers or financial
institutions, will be made by HSD, its affiliates or Hartford out of their own
assets and will not effect the amounts paid by the policyholders or contract
owners to purchase, hold or surrender variable insurance products.
Hartford may provide information on various topics to Policy Owners and
prospective Policy Owners in advertising, sales literature or other materials.
These topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in
tax-advantaged and taxable instruments, customer profiles and hypothetical
purchase scenarios, financial management and tax and retirement planning, and
variable annuities and other investment alternatives, including comparisons
between the Policies and the characteristics of and market for such
alternatives.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
-------------------------------------------------------------------
The assets of the Separate Account are held by Hartford. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford. Hartford maintains records of all purchases and
redemptions of shares of the Fund. Additional protection for the assets of the
Separate Account is afforded by Hartford's blanket fidelity bond issued by Aetna
Casualty and Surety Company, in the aggregate of $50 million, covering all of
the officers and employees of Hartford.
FEDERAL TAX CONSIDERATIONS
-------------------------------------------------------------------
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING TO
THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A
POLICY DESCRIBED HEREIN.
25 - PROSPECTUS
<PAGE>
It should be understood that any detailed description of the federal income tax
consequences regarding the purchase of these Policies cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of federal tax
considerations is based upon Hartford's understanding of existing Federal income
tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Funds) are reinvested and are taken into account in determining the value of the
Accumulation Units (see "Policy Benefits and Right - Account Value," on page
15). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Policy.
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such taxes will be incurred, it may assess a
charge for such taxes against the Separate Account.
INCOME TAXATION OF
POLICY BENEFITS
For federal income tax purposes, the Policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the contract value until the Policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
During the first fifteen Policy Years, an "income first" rule generally applies
to distributions of cash required to be made under Code Section 7702 because of
a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the Maturity
Date to the date of the Insured's death. If the Maturity Date of the Policy is
extended by rider, Hartford believes that the Policy will continue to be treated
as a life insurance contract for federal income tax purposes after the scheduled
Maturity Date. However, due to the lack of specific guidance on this issue, the
result is not certain. If the Policy is not treated as a life insurance contract
for federal income tax purposes after the scheduled Maturity Date, among other
things, the Death Proceeds may be taxable to the recipient. The Policy Owner
should consult a qualified tax adviser regarding the possible adverse tax
consequences resulting from an extension of the scheduled Maturity Date.
LAST SURVIVOR POLICIES
Although Hartford believes that the last survivor Policies are in compliance
with Section 7702 of the Code, the manner in which Section 7702 should be
applied to certain features of a joint survivorship life insurance contract is
not directly addressed by Section 7702. In the absence of final regulations or
other guidance issued under Section 7702, there is necessarily some uncertainty
whether a last survivor Contract will meet the Section 7702 definition of a life
insurance contract.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract" under
Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
Policy does not meet the specified computational rules for the "seven-pay test"
under Section 7702A(c). Therefore, the Policy will generally be treated as a
modified endowment contract for federal income tax purposes. However, an
exchange under Section 1035 of the Code of a life insurance contract issued
before June 21, 1988 will not cause the new Policy to be treated as a modified
endowment contract if no additional premiums are paid and there is no change in
the death benefit as the result of the exchange.
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is excluded from income and increments in value are not
subject to current taxation. However, loans, distributions or other amounts
received from a modified endowment contract during the life of the Insured will
be taxed to the extent of any accumulated income in the contract (generally, the
excess of account value over premiums paid). Amounts that are taxable
withdrawals will be subject to a 10% additional tax, with certain exceptions.
26 - PROSPECTUS
<PAGE>
All modified endowment contracts that are issued within any calendar year to the
same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract in determining the taxable portion of any loan or
distributions.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in the
Policy Owner's estate for purposes of federal estate tax if the last surviving
Insured owned the Policy. If the Policy Owner was not the last surviving
Insured, the fair market value of the Policy would be included in the Policy
Owner's estate upon the Policy Owner's death. Nothing would be includible in the
last surviving Insured's estate if he or she neither retained incidents of
ownership at death nor had given up ownership within three years before death.
The federal estate tax is integrated with the federal gift tax under a unified
rate schedule and unified credit which shelters up to $625,000 (1998) from the
estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises the credit
over the next eight years to $1,000,000. In addition, an unlimited marital
deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse (when the Death Proceeds would be available to pay taxes due
and other expenses incurred).
If the Policy Owner (whether or not he or she is an Insured) transfers ownership
of the Policy to someone two or more generations younger, the transfer may be
subject to the generation-skipping transfer tax, the taxable amount being the
value of the Policy. The generation-skipping transfer tax provisions generally
apply to transfers which would be subject to the gift and estate tax rules.
Individuals are generally allowed an aggregate generation skipping transfer
exemption of $1 million. Because these rules are complex, the Policy Owner
should consult with a qualified tax adviser for specific information if
ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract (other
than a pension plan policy) will not be treated as a life insurance contract for
any period during which the investments made by the separate account or
underlying fund are not adequately diversified in accordance with regulations
prescribed by the Treasury Department. If a Policy is not treated as a life
insurance contract, the Policy Owner will be subject to income tax on the annual
increases in cash value.
The Treasury Department has issued diversification regulations which generally
require, among other things, that no more than 55% of the value of the total
assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards on
the last day of each calendar quarter or within 30 days after the quarter ends.
If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford monitors the diversification of investments in the separate accounts
and tests for diversification as required by the Code. Hartford intends to
administer all contracts subject to the diversification requirements in a manner
that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that certain incidents of ownership
by the contract owner, such as the ability to select and control investments in
a separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
27 - PROSPECTUS
<PAGE>
provided in regulations or revenue rulings under section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as of the date of this
Prospectus, no other such guidance has been issued. Further, Hartford does not
know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Policy Owner could be considered the owner of
the assets for tax purposes. Hartford reserves the right to modify the
contracts, as necessary, to prevent Policy Owners from being considered the
owners of the assets in the separate accounts.
LIFE INSURANCE PURCHASED FOR USE IN SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM") on
the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner, such
amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP
OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective Policy
Owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A tax adviser should be
consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal income
tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
-------------------------------------------------------------------
There are no material legal proceedings pending to which the Separate Account is
a party.
LEGAL MATTERS
-------------------------------------------------------------------
Legal matters in connection with the issue and sale of flexible premium variable
life insurance Policies described in this Prospectus and the organization of
Hartford, its authority to issue the Policies under Connecticut law and the
validity of the forms of the Policies under Connecticut law and legal matters
relating to the federal securities and income tax laws have been passed on by
Lynda Godkin, Senior Vice President, General Counsel and Corporate Secretary of
Hartford.
28 - PROSPECTUS
<PAGE>
YEAR 2000
-------------------------------------------------------------------
The Year 2000 issue relates to the ability or inability of computer systems to
properly process information and data containing or related to dates beginning
with the year 2000 and beyond. The Year 2000 issue exists because, historically,
many computer systems that are in use today were developed years ago when a year
was identified using a two-digit field rather than a four-digit field. As
information and data containing or related to the century date are introduced to
computer hardware, software and other systems, date sensitive systems may
recognize the year 2000 as 1900, or not at all, which may result in computer
systems processing information incorrectly. This, in turn, may significantly and
adversely affect the integrity and reliability of information databases and may
result in a wide variety of adverse consequences to a company. In addition, Year
2000 problems that occur with third parties with which a company does business,
such as suppliers, computer vendors and others, may also adversely affect any
given company.
As an insurance and financial services company, Hartford has thousands of
individual and business customers that have purchased or invested in insurance
policies, annuities, mutual funds and other financial products. Nearly all of
these policies and products contain date sensitive data, such as policy
expiration dates, birth dates, premium payments dates and the like. In addition,
Hartford has business relationships with numerous third parties that affect
virtually all aspects of its business, including, without limitation, suppliers,
computer hardware and software vendors, insurance agents and brokers, securities
broker-dealers and other distributors of financial products.
Beginning in 1990, Hartford began working on making its computer systems Year
2000 ready, either by installing new programs or by replacing systems. In
January 1998, Hartford commenced a company-wide program to further identify,
assess and remediate the impact of Year 2000 problems in all of Hartford's
business segments. Hartford currently anticipates that this internal program
will be substantially completed by the end of 1998, and testing of computer
systems will continue through 1999.
In addition, as part of its Year 2000 program, Hartford is identifying third
parties with which it has significant business relations in order to attempt to
assess any potential impact on Hartford as a result of such third-party Year
2000 issues and remediation plans. Hartford currently anticipates that it will
substantially complete this evaluation by the end of 1998, and will conduct
systems testing with certain third parties through 1999. Hartford does not have
control over these third parties and, as a result, Hartford cannot currently
determine to what extent future operating results may be adversely affected by
the failure of these third parties to successfully address their Year 2000
issues. Hartford will continue to assess Year 2000 risk exposures related to its
own operations and its third-party relationships and is in the process of
developing contingency plans.
The costs of addressing the Year 2000 issue that have been incurred through the
six months ended June 30, 1998 have not been material to Hartford's financial
condition or results of operations. Hartford will continue to incur costs
related to its Year 2000 efforts and does not anticipate that the costs to be
incurred will be material to its financial condition or results of operation.
EXPERTS
-------------------------------------------------------------------
The audited financial statements included in this prospectus and elsewhere in
the registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports. Reference is made to the report on the statutory financial
statements of Hartford Life and Annuity Insurance Company (formerly ITT Hartford
Life and Annuity Insurance Company) which states the statutory financial
statements are presented in accordance with statutory accounting practices
prescribed or permitted by the National Association of Insurance Commissioners
and the State of Connecticut Insurance Department, and are not presented in
accordance with generally accepted accounting principles. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.
The hypothetical Policy illustrations included in this Prospectus and the
registration statement with respect to the Separate Account have been approved
by Michael Winterfield, FSA, MAAA, Director, Individual Annuity Product
Management, for Hartford, and are included in reliance upon his opinion as to
their reasonableness.
29 - PROSPECTUS
<PAGE>
REGISTRATION STATEMENT
-------------------------------------------------------------------
A registration statement has been filed with the Securities and Exchange
Commission under the Securities Act of 1933 as amended. This Prospectus does not
contain all information set forth in the registration statement, its amendments
and exhibits, to all of which reference is made for further information
concerning the Separate Account, the Funds, Hartford, and the Policies.
30 - PROSPECTUS
<PAGE>
APPENDIX A
-------------------------------------------------------------------
ILLUSTRATIONS OF BENEFITS
The tables in Appendix A illustrate the way in which a Policy operates. They
show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The tables are based on an initial
premium of $10,000. A male preferred age 45, a female preferred age 55 and a
male preferred age 65 with Face Amounts of $44,053, $34,014 and $20,001,
respectively, are illustrated for the single life preferred Policy for both
Policy Owner Option 1 and Policy Owner Option 2. The illustrations for the last
survivor preferred Policy assume male preferred and female preferred of equal
ages, including age 55 and 65 for Face Amounts of $45,872 and $28,491.
The death benefit and surrender value for a Policy would be different from those
shown if the rates of return averaged 0%, 6% and 12% over a period of years, but
also fluctuated above or below those averages for individual Policy Years. They
would also differ if any Policy loan were made during the period of time
illustrated.
The tables reflect the deductions of current Policy charges for Policy Owner
Option 1 and Policy Owner Option 2 and guaranteed Policy charges for a single
gross interest rate. The death benefits and surrender values would change if the
current cost of insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.75% of the average daily net assets of the Funds for investment
advisory and administrative services fees. The gross annual investment return
rates of 0%, 6% and 12% on the Fund's assets are equal to net annual investment
return rates (net of the 0.75% average daily charge) of -0.75%, 5.25% and
11.25%, respectively.
The hypothetical returns shown in the tables are without any tax charges that
may be attributable to the Separate Account in the future. In order to produce
after tax returns of 0%, 6%, and 12%, the Separate Account would have to earn a
sufficient amount in excess of 0% or 6% or 12% to cover any tax charges (see
"Deductions and Charges - Taxes Charged Against the Separate Account," page 15).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Hartford will furnish upon request, a comparable illustration reflecting the
proposed Insureds age, risk classification, Face Amount or initial premium
requested, and reflecting guaranteed cost of insurance rates. Hartford will also
furnish an additional similar illustration reflecting current cost of insurance
rates which may be less than, but never greater than, the guaranteed cost of
insurance rates.
31 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,866 9,842 44,053 10,785 9,762 44,053
2 11,025 11,775 10,760 44,053 11,601 10,589 44,053
3 11,576 12,763 11,759 44,053 12,486 11,487 44,053
4 12,155 13,836 12,998 44,053 13,445 12,613 44,053
5 12,763 15,002 14,184 44,053 14,485 13,674 44,053
6 13,401 16,269 15,676 44,053 15,614 15,028 44,053
7 14,071 17,645 17,083 44,053 16,839 16,283 44,053
8 14,775 19,142 18,816 44,053 18,170 17,849 44,053
9 15,513 20,767 20,485 44,053 19,615 19,336 44,053
10 16,289 22,534 22,504 44,053 21,188 21,158 44,053
11 17,103 24,650 24,620 44,053 23,089 23,059 44,053
12 17,959 26,968 26,938 44,053 25,183 25,153 44,053
13 18,856 29,508 29,478 44,053 27,498 27,468 44,053
14 19,799 32,309 32,279 44,586 30,061 30,031 44,053
15 20,789 35,405 35,375 47,442 32,907 32,877 44,095
16 21,829 38,808 38,778 50,449 36,063 36,033 46,881
17 22,920 42,534 42,504 54,443 39,524 39,494 50,590
18 24,066 46,615 46,585 58,734 43,313 43,283 54,574
19 25,270 51,083 51,083 63,343 47,463 47,433 58,853
20 26,533 56,011 56,011 68,332 52,008 52,008 63,449
25 33,864 88,514 88,514 102,676 82,181 82,181 95,329
35 55,160 220,693 220,693 233,934 204,766 204,766 217,051
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
32 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,280 9,269 44,053 10,198 9,189 44,053
2 11,025 10,538 9,547 44,053 10,361 9,373 44,053
3 11,576 10,802 9,833 44,053 10,517 9,553 44,053
4 12,155 11,074 10,278 44,053 10,665 9,875 44,053
5 12,763 11,353 10,582 44,053 10,804 10,039 44,053
6 13,401 11,641 11,094 44,053 10,931 10,391 44,053
7 14,071 11,936 11,417 44,053 11,043 10,530 44,053
8 14,775 12,240 11,949 44,053 11,138 10,852 44,053
9 15,513 12,552 12,291 44,053 11,210 10,952 44,053
10 16,289 12,873 12,843 44,053 11,256 11,226 44,053
11 17,103 13,309 13,279 44,053 11,365 11,335 44,053
12 17,959 13,761 13,731 44,053 11,444 11,414 44,053
13 18,856 14,230 14,200 44,053 11,491 11,461 44,053
14 19,799 14,715 14,685 44,053 11,498 11,468 44,053
15 20,789 15,218 15,188 44,053 11,460 11,430 44,053
16 21,829 15,739 15,709 44,053 11,366 11,336 44,053
17 22,920 16,280 16,250 44,053 11,209 11,179 44,053
18 24,066 16,840 16,810 44,053 10,975 10,945 44,053
19 25,270 17,420 17,390 44,053 10,648 10,618 44,053
20 26,533 18,021 17,991 44,053 10,212 10,182 44,053
25 33,864 21,371 21,341 44,053 5,654 5,624 44,053
35 55,160 30,159 30,129 44,053 - - -
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
33 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS --------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
1 10,500 9,694 8,719 44,053 9,612 8,645 44,053
2 11,025 9,369 8,449 44,053 9,190 8,287 44,053
3 11,576 9,053 8,186 44,053 8,763 7,922 44,053
4 12,155 8,747 8,061 44,053 8,330 7,675 44,053
5 12,763 8,451 7,808 44,053 7,889 7,287 44,053
6 13,401 8,163 7,725 44,053 7,438 7,036 44,053
7 14,071 7,884 7,480 44,053 6,974 6,612 44,053
8 14,775 7,614 7,394 44,053 6,492 6,300 44,053
9 15,513 7,352 7,157 44,053 5,990 5,825 44,053
10 16,289 7,098 7,068 44,053 5,463 5,433 44,053
11 17,103 6,907 6,877 44,053 4,948 4,918 44,053
12 17,959 6,721 6,691 44,053 4,395 4,365 44,053
13 18,856 6,538 6,508 44,053 3,801 3,771 44,053
14 19,799 6,360 6,330 44,053 3,159 3,129 44,053
15 20,789 6,186 6,156 44,053 2,461 2,431 44,053
16 21,829 6,016 5,986 44,053 1,700 1,670 44,053
17 22,920 5,849 5,819 44,053 865 835 44,053
18 24,066 5,687 5,657 44,053 - - -
19 25,270 5,528 5,498 44,053 - - -
20 26,533 5,372 5,342 44,053 - - -
25 33,864 4,648 4,618 44,053 - - -
35 55,160 3,426 3,396 44,053 - - -
- -----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
34 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,500 9,720 44,053 10,413 9,633 44,053
2 11,025 11,451 10,671 44,053 11,267 10,487 44,053
3 11,576 12,492 11,712 44,053 12,199 11,419 44,053
4 12,155 13,630 13,000 44,053 13,215 12,585 44,053
5 12,763 14,874 14,244 44,053 14,326 13,696 44,053
6 13,401 16,236 15,806 44,053 15,541 15,111 44,053
7 14,071 17,725 17,295 44,053 16,869 16,439 44,053
8 14,775 19,353 19,123 44,053 18,323 18,093 44,053
9 15,513 21,135 20,905 44,053 19,915 19,685 44,053
10 16,289 23,083 23,053 44,053 21,661 21,631 44,053
11 17,103 25,251 25,221 44,053 23,616 23,586 44,053
12 17,959 27,627 27,597 44,053 25,771 25,741 44,053
13 18,856 30,234 30,204 44,053 28,153 28,123 44,053
14 19,799 33,116 33,086 45,700 30,794 30,764 44,053
15 20,789 36,292 36,262 48,630 33,726 33,696 45,192
16 21,829 39,781 39,751 51,714 36,966 36,936 48,055
17 22,920 43,601 43,571 55,809 40,514 40,484 51,857
18 24,066 47,785 47,755 60,209 44,399 44,369 55,942
19 25,270 52,367 52,367 64,934 48,654 48,624 60,330
20 26,533 57,418 57,418 70,049 53,314 53,314 65,042
25 33,864 90,738 90,738 105,256 84,244 84,244 97,723
35 55,160 226,238 226,238 239,812 209,907 209,907 222,500
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
35 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 9,934 9,159 44,053 9,847 9,078 44,053
2 11,025 10,248 9,468 44,053 10,062 9,282 44,053
3 11,576 10,573 9,793 44,053 10,273 9,493 44,053
4 12,155 10,909 10,279 44,053 10,480 9,850 44,053
5 12,763 11,257 10,627 44,053 10,682 10,052 44,053
6 13,401 11,617 11,187 44,053 10,875 10,445 44,053
7 14,071 11,989 11,559 44,053 11,058 10,628 44,053
8 14,775 12,375 12,145 44,053 11,227 10,997 44,053
9 15,513 12,774 12,544 44,053 11,378 11,148 44,053
10 16,289 13,187 13,157 44,053 11,508 11,478 44,053
11 17,103 13,634 13,604 44,053 11,631 11,601 44,053
12 17,959 14,098 14,068 44,053 11,725 11,695 44,053
13 18,856 14,579 14,549 44,053 11,787 11,757 44,053
14 19,799 15,077 15,047 44,053 11,811 11,781 44,053
15 20,789 15,593 15,563 44,053 11,791 11,761 44,053
16 21,829 16,128 16,098 44,053 11,718 11,688 44,053
17 22,920 16,682 16,652 44,053 11,583 11,553 44,053
18 24,066 17,257 17,227 44,053 11,372 11,342 44,053
19 25,270 17,852 17,822 44,053 11,072 11,042 44,053
20 26,533 18,469 18,439 44,053 10,665 10,635 44,053
25 33,864 21,906 21,876 44,053 6,318 6,288 44,053
35 55,160 30,924 30,894 44,053 - - -
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
36 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,367 8,635 44,053 9,281 8,555 44,053
2 11,025 9,111 8,398 44,053 8,924 8,224 44,053
3 11,576 8,861 8,166 44,053 8,558 7,887 44,053
4 12,155 8,617 8,070 44,053 8,183 7,662 44,053
5 12,763 8,378 7,846 44,053 7,797 7,299 44,053
6 13,401 8,146 7,790 44,053 7,396 7,070 44,053
7 14,071 7,919 7,572 44,053 6,979 6,670 44,053
8 14,775 7,698 7,514 44,053 6,541 6,380 44,053
9 15,513 7,482 7,302 44,053 6,078 5,927 44,053
10 16,289 7,271 7,241 44,053 5,588 5,558 44,053
11 17,103 7,076 7,046 44,053 5,072 5,042 44,053
12 17,959 6,886 6,856 44,053 4,518 4,488 44,053
13 18,856 6,700 6,670 44,053 3,923 3,893 44,053
14 19,799 6,518 6,488 44,053 3,281 3,251 44,053
15 20,789 6,340 6,310 44,053 2,584 2,554 44,053
16 21,829 6,166 6,136 44,053 1,823 1,793 44,053
17 22,920 5,996 5,966 44,053 988 958 44,053
18 24,066 5,830 5,800 44,053 65 35 44,053
19 25,270 5,668 5,638 44,053 - - -
20 26,533 5,510 5,480 44,053 - - -
25 33,864 4,770 4,740 44,053 - - -
35 55,160 3,523 3,493 44,053 - - -
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
37 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,866 9,842 34,014 10,739 9,718 34,014
2 11,025 11,775 10,760 34,014 11,507 10,497 34,014
3 11,576 12,763 11,759 34,014 12,341 11,346 34,014
4 12,155 13,836 12,998 34,014 13,249 12,421 34,014
5 12,763 15,002 14,184 34,014 14,238 13,431 34,014
6 13,401 16,269 15,676 34,014 15,316 14,733 34,014
7 14,071 17,645 17,083 34,014 16,490 15,936 34,014
8 14,775 19,142 18,816 34,014 17,769 17,450 34,014
9 15,513 20,767 20,485 34,014 19,163 18,885 34,014
10 16,289 22,534 22,504 34,014 20,685 20,655 34,014
11 17,103 24,650 24,620 34,014 22,538 22,508 34,014
12 17,959 26,978 26,948 34,014 24,596 24,566 34,014
13 18,856 29,576 29,546 34,899 26,895 26,865 34,014
14 19,799 32,446 32,416 37,961 29,471 29,441 34,481
15 20,789 35,595 35,565 41,289 32,328 32,298 37,500
16 21,829 39,047 39,017 44,904 35,461 35,431 40,780
17 22,920 42,846 42,816 48,415 38,907 38,877 43,965
18 24,066 47,027 46,997 52,199 42,701 42,671 47,398
19 25,270 51,634 51,634 56,281 46,882 46,852 51,101
20 26,533 56,703 56,703 61,806 51,451 51,451 56,082
25 33,864 90,455 90,455 95,882 82,077 82,077 87,001
35 55,160 226,166 226,166 237,474 202,195 202,195 212,304
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
38 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,280 9,269 34,014 10,153 9,145 34,014
2 11,025 10,538 9,547 34,014 10,268 9,282 34,014
3 11,576 10,802 9,833 34,014 10,374 9,412 34,014
4 12,155 11,074 10,278 34,014 10,471 9,684 34,014
5 12,763 11,353 10,582 34,014 10,556 9,795 34,014
6 13,401 11,641 11,094 34,014 10,628 10,092 34,014
7 14,071 11,936 11,417 34,014 10,681 10,171 34,014
8 14,775 12,240 11,949 34,014 10,709 10,426 34,014
9 15,513 12,552 12,291 34,014 10,705 10,448 34,014
10 16,289 12,873 12,843 34,014 10,662 10,632 34,014
11 17,103 13,309 13,279 34,014 10,663 10,633 34,014
12 17,959 13,761 13,731 34,014 10,622 10,592 34,014
13 18,856 14,230 14,200 34,014 10,534 10,504 34,014
14 19,799 14,715 14,685 34,014 10,394 10,364 34,014
15 20,789 15,218 15,188 34,014 10,194 10,164 34,014
16 21,829 15,739 15,709 34,014 9,919 9,889 34,014
17 22,920 16,280 16,250 34,014 9,550 9,520 34,014
18 24,066 16,840 16,810 34,014 9,058 9,028 34,014
19 25,270 17,420 17,390 34,014 8,411 8,381 34,014
20 26,533 18,021 17,991 34,014 7,573 7,543 34,014
25 33,864 21,371 21,341 34,014 - - -
35 55,160 30,159 30,129 34,014 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
39 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,694 8,719 34,014 9,567 8,605 34,014
2 11,025 9,369 8,449 34,014 9,098 8,204 34,014
3 11,576 9,053 8,186 34,014 8,623 7,795 34,014
4 12,155 8,747 8,061 34,014 8,140 7,499 34,014
5 12,763 8,451 7,808 34,014 7,648 7,063 34,014
6 13,401 8,163 7,725 34,014 7,143 6,756 34,014
7 14,071 7,884 7,480 34,014 6,620 6,275 34,014
8 14,775 7,614 7,394 34,014 6,071 5,890 34,014
9 15,513 7,352 7,157 34,014 5,490 5,336 34,014
10 16,289 7,098 7,068 34,014 4,868 4,838 34,014
11 17,103 6,907 6,877 34,014 4,238 4,208 34,014
12 17,959 6,721 6,691 34,014 3,554 3,524 34,014
13 18,856 6,538 6,508 34,014 2,812 2,782 34,014
14 19,799 6,360 6,330 34,014 2,007 1,977 34,014
15 20,789 6,186 6,156 34,014 1,128 1,098 34,014
16 21,829 6,016 5,986 34,014 160 130 34,014
17 22,920 5,849 5,819 34,014 - - -
18 24,066 5,687 5,657 34,014 - - -
19 25,270 5,528 5,498 34,014 - - -
20 26,533 5,372 5,342 34,014 - - -
25 33,864 4,648 4,618 34,014 - - -
35 55,160 3,426 3,396 34,014 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
40 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,500 9,720 34,014 10,367 9,587 34,014
2 11,025 11,451 10,671 34,014 11,170 10,390 34,014
3 11,576 12,492 11,712 34,014 12,048 11,268 34,014
4 12,155 13,630 13,000 34,014 13,011 12,381 34,014
5 12,763 14,874 14,244 34,014 14,067 13,437 34,014
6 13,401 16,236 15,806 34,014 15,227 14,797 34,014
7 14,071 17,725 17,295 34,014 16,500 16,070 34,014
8 14,775 19,353 19,123 34,014 17,897 17,667 34,014
9 15,513 21,135 20,905 34,014 19,433 19,203 34,014
10 16,289 23,083 23,053 34,014 21,124 21,094 34,014
11 17,103 25,252 25,222 34,014 23,030 23,000 34,014
12 17,959 27,649 27,619 34,014 25,150 25,120 34,014
13 18,856 30,324 30,294 35,782 27,519 27,489 34,014
14 19,799 33,268 33,238 38,923 30,171 30,141 35,299
15 20,789 36,498 36,468 42,337 33,096 33,066 38,391
16 21,829 40,039 40,009 46,044 36,305 36,275 41,750
17 22,920 43,934 43,904 49,645 39,834 39,804 45,012
18 24,066 48,223 48,193 53,526 43,719 43,689 48,527
19 25,270 52,948 52,948 57,713 48,000 47,970 52,319
20 26,533 58,146 58,146 63,379 52,679 52,679 57,420
25 33,864 92,757 92,757 98,322 84,035 84,035 89,077
35 55,160 231,921 231,921 243,517 207,019 207,019 217,369
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
41 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,934 9,159 34,014 9,801 9,036 34,014
2 11,025 10,248 9,468 34,014 9,965 9,188 34,014
3 11,576 10,573 9,793 34,014 10,125 9,345 34,014
4 12,155 10,909 10,279 34,014 10,278 9,648 34,014
5 12,763 11,257 10,627 34,014 10,424 9,794 34,014
6 13,401 11,617 11,187 34,014 10,560 10,130 34,014
7 14,071 11,989 11,559 34,014 10,680 10,250 34,014
8 14,775 12,375 12,145 34,014 10,779 10,549 34,014
9 15,513 12,774 12,544 34,014 10,850 10,620 34,014
10 16,289 13,187 13,157 34,014 10,887 10,857 34,014
11 17,103 13,634 13,604 34,014 10,903 10,873 34,014
12 17,959 14,098 14,068 34,014 10,877 10,847 34,014
13 18,856 14,579 14,549 34,014 10,805 10,775 34,014
14 19,799 15,077 15,047 34,014 10,684 10,654 34,014
15 20,789 15,593 15,563 34,014 10,505 10,475 34,014
16 21,829 16,128 16,098 34,014 10,252 10,222 34,014
17 22,920 16,682 16,652 34,014 9,908 9,878 34,014
18 24,066 17,257 17,227 34,014 9,444 9,414 34,014
19 25,270 17,852 17,822 34,014 8,830 8,800 34,014
20 26,533 18,469 18,439 34,014 8,030 8,000 34,014
25 33,864 21,906 21,876 34,014 - - -
35 55,160 30,924 30,894 34,014 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
42 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,367 8,635 34,014 9,235 8,512 34,014
2 11,025 9,111 8,398 34,014 8,829 8,137 34,014
3 11,576 8,861 8,166 34,014 8,413 7,752 34,014
4 12,155 8,617 8,070 34,014 7,986 7,477 34,014
5 12,763 8,378 7,846 34,014 7,547 7,064 34,014
6 13,401 8,146 7,790 34,014 7,090 6,777 34,014
7 14,071 7,919 7,572 34,014 6,612 6,318 34,014
8 14,775 7,698 7,514 34,014 6,105 5,953 34,014
9 15,513 7,482 7,302 34,014 5,561 5,420 34,014
10 16,289 7,271 7,241 34,014 4,973 4,943 34,014
11 17,103 7,076 7,046 34,014 4,343 4,313 34,014
12 17,959 6,886 6,856 34,014 3,659 3,629 34,014
13 18,856 6,700 6,670 34,014 2,918 2,888 34,014
14 19,799 6,518 6,488 34,014 2,113 2,083 34,014
15 20,789 6,340 6,310 34,014 1,236 1,206 34,014
16 21,829 6,166 6,136 34,014 269 239 34,014
17 22,920 5,996 5,966 34,014 - - -
18 24,066 5,830 5,800 34,014 - - -
19 25,270 5,668 5,638 34,014 - - -
20 26,533 5,510 5,480 34,014 - - -
25 33,864 4,770 4,740 34,014 - - -
35 55,160 3,523 3,493 34,014 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
43 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,866 9,842 20,001 10,653 9,634 20,001
2 11,025 11,775 10,760 20,001 11,326 10,319 20,001
3 11,576 12,763 11,759 20,001 12,056 11,065 20,001
4 12,155 13,836 12,998 20,001 12,854 12,031 20,001
5 12,763 15,002 14,184 20,001 13,732 12,930 20,001
6 13,401 16,269 15,676 20,001 14,706 14,129 20,001
7 14,071 17,645 17,083 20,001 15,795 15,246 20,001
8 14,775 19,146 18,820 21,251 17,025 16,710 20,001
9 15,513 20,790 20,508 22,661 18,432 18,155 20,090
10 16,289 22,564 22,534 24,594 20,000 19,970 21,800
11 17,103 24,691 24,661 26,665 21,882 21,852 23,632
12 17,959 27,027 26,997 28,918 23,949 23,919 25,625
13 18,856 29,572 29,542 31,641 26,199 26,169 28,032
14 19,799 32,371 32,341 34,313 28,675 28,645 30,395
15 20,789 35,426 35,396 37,551 31,370 31,340 33,252
16 21,829 38,787 38,757 40,725 34,342 34,312 36,059
17 22,920 42,453 42,423 44,575 37,578 37,548 39,456
18 24,066 46,469 46,439 48,792 41,093 41,063 43,147
19 25,270 50,868 50,868 53,411 44,908 44,878 47,153
20 26,533 55,720 55,720 58,506 49,041 49,011 51,493
25 33,864 87,869 87,869 92,261 75,392 75,392 79,161
35 55,160 218,691 218,691 220,878 181,929 181,929 183,747
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
44 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,280 9,269 20,001 10,065 9,058 20,001
2 11,025 10,538 9,547 20,001 10,071 9,089 20,001
3 11,576 10,802 9,833 20,001 10,045 9,089 20,001
4 12,155 11,074 10,278 20,001 9,981 9,203 20,001
5 12,763 11,353 10,582 20,001 9,873 9,127 20,001
6 13,401 11,641 11,094 20,001 9,710 9,195 20,001
7 14,071 11,936 11,417 20,001 9,481 9,000 20,001
8 14,775 12,240 11,949 20,001 9,167 8,908 20,001
9 15,513 12,552 12,291 20,001 8,749 8,522 20,001
10 16,289 12,873 12,843 20,001 8,204 8,174 20,001
11 17,103 13,309 13,279 20,001 7,568 7,538 20,001
12 17,959 13,761 13,731 20,001 6,744 6,714 20,001
13 18,856 14,230 14,200 20,001 5,685 5,655 20,001
14 19,799 14,715 14,685 20,001 4,333 4,303 20,001
15 20,789 15,218 15,188 20,001 2,603 2,573 20,001
16 21,829 15,739 15,709 20,001 380 350 20,001
17 22,920 16,280 16,250 20,001 - - -
18 24,066 16,840 16,810 20,001 - - -
19 25,270 17,420 17,390 20,001 - - -
20 26,533 18,021 17,991 20,001 - - -
25 33,864 21,371 21,341 22,439 - - -
35 55,160 30,185 30,155 30,486 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
45 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,694 8,719 20,001 9,476 8,522 20,001
2 11,025 9,369 8,449 20,001 8,888 8,014 20,001
3 11,576 9,053 8,186 20,001 8,261 7,466 20,001
4 12,155 8,747 8,061 20,001 7,585 6,986 20,001
5 12,763 8,451 7,808 20,001 6,852 6,325 20,001
6 13,401 8,163 7,725 20,001 6,047 5,715 20,001
7 14,071 7,884 7,480 20,001 5,154 4,879 20,001
8 14,775 7,614 7,394 20,001 4,149 4,015 20,001
9 15,513 7,352 7,157 20,001 3,005 2,907 20,001
10 16,289 7,098 7,068 20,001 1,689 1,659 20,001
11 17,103 6,907 6,877 20,001 174 144 20,001
12 17,959 6,721 6,691 20,001 - - -
13 18,856 6,538 6,508 20,001 - - -
14 19,799 6,360 6,330 20,001 - - -
15 20,789 6,186 6,156 20,001 - - -
16 21,829 6,016 5,986 20,001 - - -
17 22,920 5,849 5,819 20,001 - - -
18 24,066 5,687 5,657 20,001 - - -
19 25,270 5,528 5,498 20,001 - - -
20 26,533 5,372 5,342 20,001 - - -
25 33,864 4,648 4,618 20,001 - - -
35 55,160 3,426 3,396 20,001 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
46 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,500 9,720 20,001 10,272 9,492 20,001
2 11,025 11,451 10,671 20,001 10,969 10,189 20,001
3 11,576 12,492 11,712 20,001 11,730 10,950 20,001
4 12,155 13,630 13,000 20,001 12,568 11,938 20,001
5 12,763 14,874 14,244 20,001 13,497 12,867 20,001
6 13,401 16,236 15,806 20,001 14,534 14,104 20,001
7 14,071 17,725 17,295 20,029 15,702 15,272 20,001
8 14,775 19,358 19,128 21,487 17,032 16,802 20,001
9 15,513 21,158 20,928 23,062 18,564 18,334 20,234
10 16,289 23,114 23,084 25,194 20,276 20,246 22,100
11 17,103 25,294 25,264 27,317 22,184 22,154 23,958
12 17,959 27,688 27,658 29,625 24,280 24,250 25,979
13 18,856 30,296 30,266 32,416 26,561 26,531 28,420
14 19,799 33,164 33,134 35,154 29,072 29,042 30,816
15 20,789 36,294 36,264 38,472 31,805 31,775 33,713
16 21,829 39,738 39,708 41,725 34,819 34,789 36,560
17 22,920 43,496 43,466 45,670 38,100 38,070 40,004
18 24,066 47,611 47,581 49,991 41,665 41,635 43,747
19 25,270 52,120 52,120 54,725 45,533 45,503 47,809
20 26,533 57,091 57,091 59,945 49,724 49,694 52,210
25 33,864 90,030 90,030 94,531 76,443 76,443 80,264
35 55,160 224,070 224,070 226,310 184,463 184,463 186,307
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
47 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,934 9,159 20,001 9,704 8,946 20,001
2 11,025 10,248 9,468 20,001 9,751 8,990 20,001
3 11,576 10,573 9,793 20,001 9,768 9,006 20,001
4 12,155 10,909 10,279 20,001 9,750 9,135 20,001
5 12,763 11,257 10,627 20,001 9,689 9,078 20,001
6 13,401 11,617 11,187 20,001 9,576 9,163 20,001
7 14,071 11,989 11,559 20,001 9,399 8,993 20,001
8 14,775 12,375 12,145 20,001 9,141 8,928 20,001
9 15,513 12,774 12,544 20,001 8,782 8,576 20,001
10 16,289 13,187 13,157 20,001 8,298 8,268 20,001
11 17,103 13,634 13,604 20,001 7,675 7,645 20,001
12 17,959 14,098 14,068 20,001 6,865 6,835 20,001
13 18,856 14,579 14,549 20,001 5,824 5,794 20,001
14 19,799 15,077 15,047 20,001 4,493 4,463 20,001
15 20,789 15,593 15,563 20,001 2,791 2,761 20,001
16 21,829 16,128 16,098 20,001 600 570 20,001
17 22,920 16,682 16,652 20,001 - - -
18 24,066 17,257 17,227 20,001 - - -
19 25,270 17,852 17,822 20,001 - - -
20 26,533 18,469 18,439 20,001 - - -
25 33,864 21,906 21,876 23,001 - - -
35 55,160 30,950 30,920 31,259 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
48 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,001
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,367 8,635 20,001 9,136 8,421 20,001
2 11,025 9,111 8,398 20,001 8,604 7,929 20,001
3 11,576 8,861 8,166 20,001 8,028 7,396 20,001
4 12,155 8,617 8,070 20,001 7,400 6,926 20,001
5 12,763 8,378 7,846 20,001 6,710 6,277 20,001
6 13,401 8,146 7,790 20,001 5,944 5,676 20,001
7 14,071 7,919 7,572 20,001 5,084 4,851 20,001
8 14,775 7,698 7,514 20,001 4,108 3,995 20,001
9 15,513 7,482 7,302 20,001 2,985 2,896 20,001
10 16,289 7,271 7,241 20,001 1,685 1,655 20,001
11 17,103 7,076 7,046 20,001 169 139 20,001
12 17,959 6,886 6,856 20,001 - - -
13 18,856 6,700 6,670 20,001 - - -
14 19,799 6,518 6,488 20,001 - - -
15 20,789 6,340 6,310 20,001 - - -
16 21,829 6,166 6,136 20,001 - - -
17 22,920 5,996 5,966 20,001 - - -
18 24,066 5,830 5,800 20,001 - - -
19 25,270 5,668 5,638 20,001 - - -
20 26,533 5,510 5,480 20,001 - - -
25 33,864 4,770 4,740 20,001 - - -
35 55,160 3,523 3,493 20,001 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
49 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,934 9,908 45,872 10,934 9,908 45,872
2 11,025 11,917 10,898 45,872 11,917 10,898 45,872
3 11,576 12,983 11,976 45,872 12,983 11,976 45,872
4 12,155 14,141 13,299 45,872 14,141 13,299 45,872
5 12,763 15,397 14,574 45,872 15,397 14,574 45,872
6 13,401 16,760 16,162 45,872 16,760 16,162 45,872
7 14,071 18,238 17,671 45,872 18,238 17,671 45,872
8 14,775 19,840 19,511 45,872 19,840 19,511 45,872
9 15,513 21,578 21,294 45,872 21,578 21,294 45,872
10 16,289 23,461 23,431 45,872 23,461 23,431 45,872
11 17,103 25,711 25,681 45,872 25,710 25,680 45,872
12 17,959 28,180 28,150 45,872 28,178 28,148 45,872
13 18,856 30,893 30,863 45,872 30,890 30,860 45,872
14 19,799 33,883 33,853 45,872 33,879 33,849 45,872
15 20,789 37,190 37,160 45,872 37,186 37,156 45,872
16 21,829 40,861 40,831 46,989 40,856 40,826 46,984
17 22,920 44,916 44,886 50,754 44,911 44,881 50,748
18 24,066 49,374 49,344 54,805 49,368 49,338 54,798
19 25,270 54,280 54,280 59,164 54,274 54,274 59,158
20 26,533 59,682 59,682 65,053 59,676 59,676 65,046
25 33,864 95,601 95,601 101,337 95,590 95,590 101,325
35 55,160 241,750 241,750 253,837 235,717 235,717 247,502
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
50 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 10,344 9,332 45,872 10,344 9,332 45,872
2 11,025 10,663 9,670 45,872 10,663 9,670 45,872
3 11,576 10,985 10,012 45,872 10,985 10,012 45,872
4 12,155 11,308 10,508 45,872 11,308 10,508 45,872
5 12,763 11,630 10,855 45,872 11,630 10,855 45,872
6 13,401 11,951 11,401 45,872 11,951 11,401 45,872
7 14,071 12,273 11,751 45,872 12,266 11,744 45,872
8 14,775 12,605 12,312 45,872 12,572 12,279 45,872
9 15,513 12,947 12,685 45,872 12,863 12,601 45,872
10 16,289 13,299 13,269 45,872 13,134 13,104 45,872
11 17,103 13,772 13,742 45,872 13,488 13,458 45,872
12 17,959 14,262 14,232 45,872 13,815 13,785 45,872
13 18,856 14,771 14,741 45,872 14,108 14,078 45,872
14 19,799 15,299 15,269 45,872 14,360 14,330 45,872
15 20,789 15,847 15,817 45,872 14,561 14,531 45,872
16 21,829 16,416 16,386 45,872 14,694 14,664 45,872
17 22,920 17,006 16,976 45,872 14,742 14,712 45,872
18 24,066 17,618 17,588 45,872 14,679 14,649 45,872
19 25,270 18,254 18,224 45,872 14,472 14,442 45,872
20 26,533 18,914 18,884 45,872 14,086 14,056 45,872
25 33,864 22,608 22,578 45,872 7,581 7,551 45,872
35 55,160 32,412 32,382 45,872 - - -
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
51 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,755 8,774 45,872 9,755 8,774 45,872
2 11,025 9,479 8,549 45,872 9,479 8,549 45,872
3 11,576 9,202 8,321 45,872 9,202 8,321 45,872
4 12,155 8,921 8,222 45,872 8,921 8,222 45,872
5 12,763 8,635 7,979 45,872 8,635 7,979 45,872
6 13,401 8,355 7,907 45,872 8,341 7,894 45,872
7 14,071 8,082 7,668 45,872 8,035 7,623 45,872
8 14,775 7,818 7,592 45,872 7,712 7,489 45,872
9 15,513 7,561 7,361 45,872 7,368 7,172 45,872
10 16,289 7,311 7,281 45,872 6,995 6,965 45,872
11 17,103 7,126 7,096 45,872 6,641 6,611 45,872
12 17,959 6,945 6,915 45,872 6,239 6,209 45,872
13 18,856 6,768 6,738 45,872 5,781 5,751 45,872
14 19,799 6,594 6,564 45,872 5,256 5,226 45,872
15 20,789 6,424 6,394 45,872 4,653 4,623 45,872
16 21,829 6,258 6,228 45,872 3,952 3,922 45,872
17 22,920 6,095 6,065 45,872 3,130 3,100 45,872
18 24,066 5,936 5,906 45,872 2,154 2,124 45,872
19 25,270 5,780 5,750 45,872 983 953 45,872
20 26,533 5,628 5,598 45,872 - - -
25 33,864 4,912 4,882 45,872 - - -
35 55,160 3,693 3,663 45,872 - - -
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
52 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,565 9,785 45,872 10,565 9,785 45,872
2 11,025 11,588 10,808 45,872 11,588 10,808 45,872
3 11,576 12,706 11,926 45,872 12,706 11,926 45,872
4 12,155 13,928 13,298 45,872 13,928 13,298 45,872
5 12,763 15,263 14,633 45,872 15,263 14,633 45,872
6 13,401 16,722 16,292 45,872 16,722 16,292 45,872
7 14,071 18,316 17,886 45,872 18,316 17,886 45,872
8 14,775 20,056 19,826 45,872 20,056 19,826 45,872
9 15,513 21,957 21,727 45,872 21,957 21,727 45,872
10 16,289 24,035 24,005 45,872 24,035 24,005 45,872
11 17,103 26,347 26,317 45,872 26,347 26,317 45,872
12 17,959 28,884 28,854 45,872 28,884 28,854 45,872
13 18,856 31,675 31,645 45,872 31,675 31,645 45,872
14 19,799 34,754 34,724 45,872 34,754 34,724 45,872
15 20,789 38,161 38,131 45,872 38,161 38,131 45,872
16 21,829 41,941 41,911 48,232 41,941 41,911 48,232
17 22,920 46,104 46,074 52,097 46,104 46,074 52,097
18 24,066 50,681 50,681 56,256 50,681 50,681 56,256
19 25,270 55,751 55,751 60,768 55,751 55,751 60,768
20 26,533 61,300 61,300 66,816 61,300 61,300 66,816
25 33,864 98,192 98,192 104,083 98,192 98,192 104,083
35 55,160 248,302 248,302 260,717 242,132 242,132 254,238
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
53 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
1 10,500 9,995 9,216 45,872 9,995 9,216 45,872
2 11,025 10,369 9,589 45,872 10,369 9,589 45,872
3 11,576 10,750 9,970 45,872 10,750 9,970 45,872
4 12,155 11,137 10,507 45,872 11,137 10,507 45,872
5 12,763 11,529 10,899 45,872 11,529 10,899 45,872
6 13,401 11,923 11,493 45,872 11,923 11,493 45,872
7 14,071 12,325 11,895 45,872 12,317 11,887 45,872
8 14,775 12,741 12,511 45,872 12,708 12,478 45,872
9 15,513 13,173 12,943 45,872 13,090 12,860 45,872
10 16,289 13,620 13,590 45,872 13,458 13,428 45,872
11 17,103 14,104 14,074 45,872 13,827 13,797 45,872
12 17,959 14,607 14,577 45,872 14,171 14,141 45,872
13 18,856 15,129 15,099 45,872 14,483 14,453 45,872
14 19,799 15,670 15,640 45,872 14,756 14,726 45,872
15 20,789 16,232 16,202 45,872 14,978 14,948 45,872
16 21,829 16,816 16,786 45,872 15,136 15,106 45,872
17 22,920 17,421 17,391 45,872 15,211 15,181 45,872
18 24,066 18,050 18,020 45,872 15,178 15,148 45,872
19 25,270 18,702 18,672 45,872 15,006 14,976 45,872
20 26,533 19,379 19,349 45,872 14,660 14,630 45,872
25 33,864 23,167 23,137 45,872 8,494 8,464 45,872
35 55,160 33,223 33,193 45,872 - - -
- --------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
54 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,872
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1 10,500 9,425 8,689 45,872 9,425 8,689 45,872
2 11,025 9,218 8,496 45,872 9,218 8,496 45,872
3 11,576 9,005 8,300 45,872 9,005 8,300 45,872
4 12,155 8,786 8,229 45,872 8,786 8,229 45,872
5 12,763 8,559 8,015 45,872 8,559 8,015 45,872
6 13,401 8,335 7,971 45,872 8,320 7,958 45,872
7 14,071 8,116 7,761 45,872 8,067 7,715 45,872
8 14,775 7,901 7,713 45,872 7,795 7,610 45,872
9 15,513 7,692 7,508 45,872 7,499 7,319 45,872
10 16,289 7,487 7,457 45,872 7,171 7,141 45,872
11 17,103 7,299 7,269 45,872 6,814 6,784 45,872
12 17,959 7,114 7,084 45,872 6,410 6,380 45,872
13 18,856 6,933 6,903 45,872 5,951 5,921 45,872
14 19,799 6,756 6,726 45,872 5,426 5,396 45,872
15 20,789 6,582 6,552 45,872 4,821 4,791 45,872
16 21,829 6,413 6,383 45,872 4,120 4,090 45,872
17 22,920 6,247 6,217 45,872 3,298 3,268 45,872
18 24,066 6,084 6,054 45,872 2,322 2,292 45,872
19 25,270 5,925 5,895 45,872 1,153 1,123 45,872
20 26,533 5,769 5,739 45,872 - - -
25 33,864 5,040 5,010 45,872 - - -
35 55,160 3,796 3,766 45,872 - - -
- ----------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
55 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,928 9,902 28,491 10,928 9,902 28,491
2 11,025 11,890 10,872 28,491 11,890 10,872 28,491
3 11,576 12,920 11,914 28,491 12,920 11,914 28,491
4 12,155 14,027 13,187 28,491 14,023 13,183 28,491
5 12,763 15,233 14,413 28,491 15,207 14,387 28,491
6 13,401 16,545 15,949 28,491 16,478 15,883 28,491
7 14,071 17,973 17,408 28,491 17,847 17,283 28,491
8 14,775 19,526 19,199 28,491 19,325 18,999 28,491
9 15,513 21,217 20,934 28,491 20,929 20,646 28,491
10 16,289 23,057 23,027 28,491 22,681 22,651 28,491
11 17,103 25,265 25,235 28,491 24,815 24,785 28,491
12 17,959 27,730 27,700 29,670 27,220 27,190 29,125
13 18,856 30,444 30,414 32,574 29,884 29,854 31,975
14 19,799 33,425 33,395 35,430 32,810 32,780 34,778
15 20,789 36,681 36,651 38,881 36,005 35,975 38,165
16 21,829 40,261 40,231 42,273 39,519 39,489 41,494
17 22,920 44,167 44,137 46,375 43,353 43,323 45,520
18 24,066 48,423 48,393 50,844 47,529 47,499 49,905
19 25,270 53,088 53,088 55,742 52,071 52,071 54,674
20 26,533 58,239 58,239 61,151 57,035 57,035 59,886
25 33,864 92,533 92,533 97,159 88,634 88,634 93,065
35 55,160 233,593 233,593 235,928 214,875 214,875 217,023
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
56 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,338 9,326 28,491 10,338 9,326 28,491
2 11,025 10,636 9,643 28,491 10,636 9,643 28,491
3 11,576 10,920 9,949 28,491 10,919 9,948 28,491
4 12,155 11,212 10,414 28,491 11,184 10,386 28,491
5 12,763 11,513 10,739 28,491 11,424 10,651 28,491
6 13,401 11,822 11,274 28,491 11,634 11,087 28,491
7 14,071 12,141 11,620 28,491 11,803 11,284 28,491
8 14,775 12,469 12,177 28,491 11,920 11,631 28,491
9 15,513 12,807 12,545 28,491 11,972 11,712 28,491
10 16,289 13,155 13,125 28,491 11,939 11,909 28,491
11 17,103 13,622 13,592 28,491 11,901 11,871 28,491
12 17,959 14,106 14,076 28,491 11,744 11,714 28,491
13 18,856 14,609 14,579 28,491 11,442 11,412 28,491
14 19,799 15,131 15,101 28,491 10,961 10,931 28,491
15 20,789 15,673 15,643 28,491 10,258 10,228 28,491
16 21,829 16,235 16,205 28,491 9,271 9,241 28,491
17 22,920 16,818 16,788 28,491 7,911 7,881 28,491
18 24,066 17,424 17,394 28,491 6,056 6,026 28,491
19 25,270 18,052 18,022 28,491 3,534 3,504 28,491
20 26,533 18,705 18,675 28,491 107 77 28,491
25 33,864 22,356 22,326 28,491 - - -
35 55,160 32,046 32,016 32,366 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
57 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,748 8,768 28,491 9,748 8,768 28,491
2 11,025 9,452 8,524 28,491 9,452 8,524 28,491
3 11,576 9,148 8,272 28,491 9,136 8,261 28,491
4 12,155 8,852 8,158 28,491 8,794 8,105 28,491
5 12,763 8,565 7,914 28,491 8,421 7,780 28,491
6 13,401 8,287 7,842 28,491 8,006 7,576 28,491
7 14,071 8,016 7,605 28,491 7,539 7,151 28,491
8 14,775 7,754 7,530 28,491 7,005 6,799 28,491
9 15,513 7,499 7,300 28,491 6,382 6,209 28,491
10 16,289 7,251 7,221 28,491 5,650 5,620 28,491
11 17,103 7,067 7,037 28,491 4,821 4,791 28,491
12 17,959 6,887 6,857 28,491 3,817 3,787 28,491
13 18,856 6,711 6,681 28,491 2,601 2,571 28,491
14 19,799 6,539 6,509 28,491 1,125 1,095 28,491
15 20,789 6,370 6,340 28,491 - - -
16 21,829 6,205 6,175 28,491 - - -
17 22,920 6,043 6,013 28,491 - - -
18 24,066 5,885 5,855 28,491 - - -
19 25,270 5,730 5,700 28,491 - - -
20 26,533 5,579 5,549 28,491 - - -
25 33,864 4,869 4,839 28,491 - - -
35 55,160 3,658 3,628 28,491 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
58 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 10,559 9,779 28,491 10,559 9,779 28,491
2 11,025 11,560 10,780 28,491 11,560 10,780 28,491
3 11,576 12,641 11,861 28,491 12,641 11,861 28,491
4 12,155 13,813 13,183 28,491 13,807 13,177 28,491
5 12,763 15,098 14,468 28,491 15,067 14,437 28,491
6 13,401 16,505 16,075 28,491 16,431 16,001 28,491
7 14,071 18,046 17,616 28,491 17,912 17,482 28,491
8 14,775 19,735 19,505 28,491 19,526 19,296 28,491
9 15,513 21,584 21,354 28,491 21,292 21,062 28,491
10 16,289 23,610 23,580 28,491 23,241 23,211 28,491
11 17,103 25,880 25,850 28,491 25,452 25,422 28,491
12 17,959 28,419 28,389 30,408 27,940 27,910 29,896
13 18,856 31,202 31,172 33,385 30,675 30,645 32,822
14 19,799 34,258 34,228 36,313 33,680 33,650 35,700
15 20,789 37,596 37,566 39,851 36,961 36,931 39,178
16 21,829 41,266 41,236 43,329 40,568 40,538 42,596
17 22,920 45,271 45,241 47,534 44,505 44,475 46,730
18 24,066 49,634 49,604 52,115 48,793 48,763 51,232
19 25,270 54,417 54,417 57,137 53,457 53,457 56,129
20 26,533 59,696 59,696 62,681 58,553 58,553 61,480
25 33,864 94,848 94,848 99,590 90,993 90,993 95,542
35 55,160 239,438 239,438 241,832 220,594 220,594 222,799
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
59 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,989 9,210 28,491 9,989 9,210 28,491
2 11,025 10,341 9,561 28,491 10,341 9,561 28,491
3 11,576 10,686 9,906 28,491 10,683 9,903 28,491
4 12,155 11,042 10,412 28,491 11,010 10,380 28,491
5 12,763 11,412 10,782 28,491 11,317 10,687 28,491
6 13,401 11,795 11,365 28,491 11,598 11,168 28,491
7 14,071 12,192 11,762 28,491 11,844 11,414 28,491
8 14,775 12,604 12,374 28,491 12,043 11,813 28,491
9 15,513 13,030 12,800 28,491 12,182 11,952 28,491
10 16,289 13,472 13,442 28,491 12,244 12,214 28,491
11 17,103 13,951 13,921 28,491 12,229 12,199 28,491
12 17,959 14,448 14,418 28,491 12,099 12,069 28,491
13 18,856 14,964 14,934 28,491 11,829 11,799 28,491
14 19,799 15,499 15,469 28,491 11,387 11,357 28,491
15 20,789 16,055 16,025 28,491 10,731 10,701 28,491
16 21,829 16,631 16,601 28,491 9,801 9,771 28,491
17 22,920 17,230 17,200 28,491 8,513 8,483 28,491
18 24,066 17,851 17,821 28,491 6,749 6,719 28,491
19 25,270 18,496 18,466 28,491 4,344 4,314 28,491
20 26,533 19,165 19,135 28,491 1,069 1,039 28,491
25 33,864 22,910 22,880 28,491 - - -
35 55,160 32,850 32,820 33,178 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
60 - PROSPECTUS
<PAGE>
HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
-------------------------------------------------------------------
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,491
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
END PREMIUMS -----------------------------------------------------------------------------
OF ACCUMULATED CASH CASH
POLICY AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
<C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
1 10,500 9,419 8,683 28,491 9,419 8,683 28,491
2 11,025 9,190 8,471 28,491 9,190 8,471 28,491
3 11,576 8,951 8,250 28,491 8,938 8,237 28,491
4 12,155 8,718 8,165 28,491 8,657 8,107 28,491
5 12,763 8,490 7,951 28,491 8,340 7,810 28,491
6 13,401 8,267 7,907 28,491 7,979 7,630 28,491
7 14,071 8,050 7,698 28,491 7,563 7,231 28,491
8 14,775 7,837 7,650 28,491 7,076 6,904 28,491
9 15,513 7,629 7,447 28,491 6,497 6,337 28,491
10 16,289 7,426 7,396 28,491 5,804 5,774 28,491
11 17,103 7,239 7,209 28,491 4,978 4,948 28,491
12 17,959 7,055 7,025 28,491 3,977 3,947 28,491
13 18,856 6,875 6,845 28,491 2,766 2,736 28,491
14 19,799 6,699 6,669 28,491 1,296 1,266 28,491
15 20,789 6,527 6,497 28,491 - - -
16 21,829 6,359 6,329 28,491 - - -
17 22,920 6,194 6,164 28,491 - - -
18 24,066 6,033 6,003 28,491 - - -
19 25,270 5,875 5,845 28,491 - - -
20 26,533 5,720 5,690 28,491 - - -
25 33,864 4,995 4,965 28,491 - - -
35 55,160 3,760 3,730 28,491 - - -
- --------------------------------------------------------------------------------------------------
</TABLE>
*These values reflect investment results using current cost of insurance
rates, administrative fees, and mortality and expense risk rates.
**These values reflect investment results using guaranteed cost of insurance
rates, administrative fees, and mortality and expense risk rates.
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS PROSPECTUS
ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF PAST OR
FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS THAN
THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A
POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
61 - PROSPECTUS
<PAGE>
Report of Independent Public Accountants
To ITT Hartford Life and Annuity Insurance Company Putnam Capital Manager Trust
Separate Account Five and
to the Owners of Units of Interest therein:
We have audited the accompanying statement of assets and liabilities of ITT
Hartford Life and Annuity Insurance Company Putnam Capital Manager Trust
Separate Account Five (the Account) as of December 31, 1997, and the related
statement of operations for the year then ended and statements of changes in net
assets for the each of the two years in the period ended December 31, 1997.
These financial statements are the responsibility of the Account's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ITT Hartford Life and Annuity
Insurance Company Putnam Capital Manager Trust Separate Account Five as of
December 31, 1997, the results of its operations for the year then ended and the
changes in its net assets for each of the two years in the period ended December
31, 1997, in conformity with generally accepted accounting principles.
Hartford, Connecticut
February 16, 1998 ARTHUR ANDERSEN LLP
62 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Assets and Liabilities
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1997 Asia Diversified Global Global Growth High Yield
Pacific Income Asset Growth and Income Fund
Growth Fund Fund Allocation Fund Fund Sub-Account
Sub-Account Sub-Account Fund Sub-Account Sub-Account
Sub-Account
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
Putnam VT Asia Pacific Growth Fund
Shares 39,192
Cost $409,610
...........................................................................................................................
Market Value: $ 360,568 $ -- $ -- $ -- $ -- $ --
...........................................................................................................................
PUTNAM VT DIVERSIFIED INCOME FUND
Shares 220,923
Cost $2,412,930
...........................................................................................................................
Market Value: -- 2,498,643 -- -- -- --
...........................................................................................................................
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
Shares 167,002
Cost $2,779,091
...........................................................................................................................
Market Value: -- -- 3,132,958 -- -- --
...........................................................................................................................
PUTNAM VT GLOBAL GROWTH FUND
Shares 348,458
Cost $5,697,759
...........................................................................................................................
Market Value: -- -- -- 6,390,726 -- --
...........................................................................................................................
PUTNAM VT GROWTH AND INCOME FUND
Shares 865,166
Cost $20,237,142
...........................................................................................................................
Market Value: -- -- -- -- 24,501,515 --
...........................................................................................................................
PUTNAM VT HIGH YIELD FUND
Shares 247,281
Cost $3,105,496
...........................................................................................................................
Market Value: -- -- -- -- -- 3,367,965
...........................................................................................................................
PUTNAM VT INTERNATIONAL GROWTH FUND
Shares 26,962
Cost $294,404
...........................................................................................................................
Market Value: -- -- -- -- -- --
...........................................................................................................................
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND
Shares 31,389
Cost $348,543
...........................................................................................................................
Market Value: -- -- -- -- -- --
...........................................................................................................................
Due From ITT Hartford Life & Annuity Insurance
Company -- -- 31 213 -- 47
...........................................................................................................................
Receivable from fund shares sold -- 64 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 360,568 2,498,707 3,132,989 6,390,939 24,501,515 3,368,012
- ----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to ITT Hartford Life & Annuity Insurance
Company 2 -- -- -- 86 --
...........................................................................................................................
Payable for fund shares purchased -- -- -- 209 -- 28
...........................................................................................................................
TOTAL LIABILITIES 2 -- -- 209 86 28
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE CONTRACT LIABILITIES) $ 360,566 $2,498,707 $3,132,989 $6,390,730 $24,501,429 $3,367,984
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
December 31, 1997 International International
Growth Fund Growth and
Sub-Account Income Fund
Sub-Account
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Putnam VT Asia Pacific Growth Fund
Shares 39,192
Cost $409,610
.................................................
Market Value: $ -- $ --
.................................................
PUTNAM VT DIVERSIFIED INCOME FUND
Shares 220,923
Cost $2,412,930
.................................................
Market Value: -- --
.................................................
PUTNAM VT GLOBAL ASSET ALLOCATION FUND
Shares 167,002
Cost $2,779,091
.................................................
Market Value: -- --
.................................................
PUTNAM VT GLOBAL GROWTH FUND
Shares 348,458
Cost $5,697,759
.................................................
Market Value: -- --
.................................................
PUTNAM VT GROWTH AND INCOME FUND
Shares 865,166
Cost $20,237,142
.................................................
Market Value: -- --
.................................................
PUTNAM VT HIGH YIELD FUND
Shares 247,281
Cost $3,105,496
.................................................
Market Value: -- --
.................................................
PUTNAM VT INTERNATIONAL GROWTH FUND
Shares 26,962
Cost $294,404
.................................................
Market Value: 308,179 --
.................................................
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND
Shares 31,389
Cost $348,543
.................................................
Market Value: -- 361,910
.................................................
Due From ITT Hartford Life & Annuity Insurance
Company -- --
.................................................
Receivable from fund shares sold 23 --
- --------------------------------------------------------------------------------------------------------
TOTAL ASSETS 308,202 361,910
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to ITT Hartford Life & Annuity Insurance
Company -- 37
.................................................
Payable for fund shares purchased -- --
.................................................
TOTAL LIABILITIES -- 37
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE LIFE CONTRACT LIABILITIES) $ 308,202 $ 361,873
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
63 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Assets and Liabilities (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31, 1997 International Money New New U.S. Utilities
New Market Opportunities Value Government and Growth
Opportunities Fund Fund Fund High and Income
Fund Sub-Account Sub-Account Sub-Account Quality Bond Fund
Sub-Account Fund Sub-Account
Sub-Account
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments:
..........................................................................................................................
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES
FUND
Shares 55,483
Cost $583,820
..........................................................................................................................
Market Value: $ 552,610 $ -- $ -- $ -- $ -- $ --
..........................................................................................................................
PUTNAM VT MONEY MARKET FUND
Shares 4,369,477
Cost $4,369,477
..........................................................................................................................
Market Value: -- 4,369,477 -- -- -- --
..........................................................................................................................
PUTNAM VT NEW OPPORTUNITIES FUND
Shares 590,759
Cost $10,187,467
..........................................................................................................................
Market Value: -- -- 12,541,819 -- -- --
..........................................................................................................................
PUTNAM VT NEW VALUE FUND
Shares 74,976
Cost $798,149
..........................................................................................................................
Market Value: -- -- -- 881,713 -- --
..........................................................................................................................
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY
FUND
Shares 71,748
Cost $934,277
..........................................................................................................................
Market Value: -- -- -- -- 962,859 --
..........................................................................................................................
PUTNAM VT UTILITIES GROWTH & INCOME FUND
Shares 134,120
Cost $1,836,083
..........................................................................................................................
Market Value: -- -- -- -- -- 2,298,810
..........................................................................................................................
PUTNAM VT VISTA FUND
Shares 36,520
Cost $407,685
..........................................................................................................................
Market Value: -- -- -- -- -- --
..........................................................................................................................
PUTNAM VT VOYAGER FUND
Shares 347,145
Cost $11,091,194
..........................................................................................................................
Market Value: -- -- -- -- -- --
..........................................................................................................................
Due From ITT Hartford Life & Annuity
Insurance Company -- 88 828 -- -- 506
..........................................................................................................................
Receivable from fund shares sold -- -- -- 1 121 --
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 552,610 4,369,565 12,542,647 881,714 962,980 2,299,316
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to ITT Hartford Life & Annuity Insurance
Company -- -- -- -- 122 --
..........................................................................................................................
Payable for fund shares purchased -- 58 -- -- -- 389
..........................................................................................................................
TOTAL LIABILITIES -- 58 -- -- 122 389
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY CONTRACT
LIABILITIES) $ 552,610 $4,369,507 $12,542,647 $ 881,714 $ 962,858 $2,298,927
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
December 31, 1997 Vista Voyager
Fund Fund
Sub-Account Sub-Account
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments:
...........................................
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES
FUND
Shares 55,483
Cost $583,820
...........................................
Market Value: $ -- $ --
...........................................
PUTNAM VT MONEY MARKET FUND
Shares 4,369,477
Cost $4,369,477
...........................................
Market Value: -- --
...........................................
PUTNAM VT NEW OPPORTUNITIES FUND
Shares 590,759
Cost $10,187,467
...........................................
Market Value: -- --
...........................................
PUTNAM VT NEW VALUE FUND
Shares 74,976
Cost $798,149
...........................................
Market Value: -- --
...........................................
PUTNAM VT U.S. GOVERNMENT AND HIGH QUALITY
FUND
Shares 71,748
Cost $934,277
...........................................
Market Value: -- --
...........................................
PUTNAM VT UTILITIES GROWTH & INCOME FUND
Shares 134,120
Cost $1,836,083
...........................................
Market Value: -- --
...........................................
PUTNAM VT VISTA FUND
Shares 36,520
Cost $407,685
...........................................
Market Value: 449,928 --
...........................................
PUTNAM VT VOYAGER FUND
Shares 347,145
Cost $11,091,194
...........................................
Market Value: -- 13,566,417
...........................................
Due From ITT Hartford Life & Annuity
Insurance Company -- 461
...........................................
Receivable from fund shares sold -- --
- ---------------------------------------------------------------------------------------------------------------------------
Total Assets 449,928 13,566,878
- ---------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Due to ITT Hartford Life & Annuity Insurance
Company 2 --
...........................................
Payable for fund shares purchased -- --
...........................................
TOTAL LIABILITIES 2 --
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS (VARIABLE ANNUITY CONTRACT
LIABILITIES) $ 449,926 $13,566,878
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
64 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- HARTFORD LIFE INSURANCE
COMPANY
Statement of Assets & Liabilities (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Units
Owned by Unit Contract
December 31, 1997 Participants Price Liability
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Deferred life contracts in the accumulation period:
Individual Sub-Accounts:
....................................................................................................
Asia Pacific Growth Fund Sub-Account 37,853 $ 9.525374 $ 360,566
....................................................................................................
Diversified Income Fund Sub-Account 178,602 13.990371 2,498,707
....................................................................................................
Global Asset Allocation Fund Sub-Account 181,430 17.268298 3,132,989
....................................................................................................
Global Growth Fund Sub-Account 408,646 15.638791 6,390,730
....................................................................................................
Growth and Income Fund Sub-Account 1,192,000 20.554886 24,501,429
....................................................................................................
High Yield Fund Sub-Account 220,685 15.261496 3,367,984
....................................................................................................
International Growth Fund Sub-Account 26,538 11.613622 308,202
....................................................................................................
International Growth and Income Fund Sub-Account 30,304 11.941331 361,873
....................................................................................................
International New Opportunities Fund Sub-Account 55,319 9.989509 552,610
....................................................................................................
Money Market Fund Sub-Account 3,749,175 1.165458 4,369,507
....................................................................................................
New Opportunities Fund Sub-Account 634,437 19.769721 12,542,647
....................................................................................................
New Value Fund Sub-Account 74,976 11.759921 881,714
....................................................................................................
U.S. Government and High Quality Bond Fund
Sub-Account 71,791 13.411936 962,858
....................................................................................................
Utilities Growth and Income Fund Sub-Account 119,168 19.291514 2,298,927
....................................................................................................
Vista Fund Sub-Account 36,516 12.321288 449,926
....................................................................................................
Voyager Fund Sub-Account 670,510 20.233655 13,566,878
- -----------------------------------------------------------------------------------------------------
GRAND TOTAL CONTRACT LIABILITY (ALL SUB-ACCOUNTS): $76,547,547
- -----------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
65 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended Asia Diversified Global Asset Global Growth High Yield
December 31, 1997 Pacific Income Fund Allocation Growth Fund and Income Fund
Growth Fund Sub-Account Fund Sub-Account Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $6,828 $132,930 $69,277 $104,380 $24,482 $165,816
...................................................................................................................................
Capital gains income -- 20,956 118,411 112,272 789,799 19,228
...................................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
...................................................................................................................................
Net realized gain (loss) on security
transactions 132 11,405 1,345 (747) (3,845) 1,555
...................................................................................................................................
Net unrealized appreciation (depreciation)
of investments during the period (65,164) 14,728 222,497 425,520 2,878,520 177,334
...................................................................................................................................
Net gain (loss) on investments (65,032) 26,133 223,842 424,773 2,874,675 178,889
- ------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS: $(58,204) $180,019 $ 411,530 $ 641,425 $ 3,988,956 $363,933
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For the year ended International International
December 31, 1997 Growth Fund Growth and
Sub-Account* Income Fund
Sub-Account*
- ----------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $4,598 $10,865
............................................
Capital gains income -- --
............................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
............................................
Net realized gain (loss) on security
transactions (3) 145
............................................
Net unrealized appreciation (depreciation)
of investments during the period 13,775 13,367
............................................
Net gain (loss) on investments 13,772 13,512
- -----------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS: $ 18,370 $ 24,377
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
66 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Operations (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended International Money New New U.S. Government Utilities
December 31, 1997 New Market Opportunities Value and High Growth
Opportunities Fund Fund Fund Quality Bond and Income
Fund Sub-Account Sub-Account Sub-Account* Fund Fund
Sub-Account* Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 1,554 $ 263,015 $ -- $ -- $ 41,593 $ 50,859
.............................................................................................................................
Capital gains income -- -- -- -- -- 69,354
.............................................................................................................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
.............................................................................................................................
Net realized gain (loss) on security
transactions (129) -- 24,784 (7,183) 1,535 2,809
.............................................................................................................................
Net unrealized appreciation (depreciation)
of investments during the period (31,210) -- 2,122,853 83,564 23,755 341,948
.............................................................................................................................
Net gain (loss) on investments (31,339) -- 2,147,637 76,381 25,290 344,757
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS: $ (29,785) $ 263,015 $2,147,637 $ 76,381 $ 66,883 $ 464,970
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For the year ended Vista Voyager
December 31, 1997 Fund Fund
Sub-Account Sub-Account*
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 33 $ 18,916
...........................................
Capital gains income -- 407,658
...........................................
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
...........................................
Net realized gain (loss) on security
transactions (8,009) 4,822
...........................................
Net unrealized appreciation (depreciation)
of investments during the period 42,243 2,153,271
...........................................
Net gain (loss) on investments 34,234 2,158,093
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS: $ 34,267 $2,584,667
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
67 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended Asia Diversified Global Asset Global Growth High Yield
December 31, 1997 Pacific Income Fund Allocation Growth Fund and Income Fund
Growth Fund Sub-Account Fund Sub-Account Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 6,828 $ 132,930 $ 69,277 $ 104,380 $ 324,482 $ 165,816
........................................................................................................................
Capital gains income -- 20,956 118,411 112,272 789,799 19,228
........................................................................................................................
Net realized gain (loss) on
security transactions 132 11,405 1,345 (747) (3,845) 1,555
........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period (65,164) 14,728 222,497 425,520 2,878,520 177,334
........................................................................................................................
Net increase (decrease) in net
assets resulting from operations (58,204) 180,019 411,530 641,425 3,988,956 363,933
........................................................................................................................
UNIT TRANSACTIONS:
Purchases -- -- -- -- -- --
........................................................................................................................
Net transfers 79,345 672,116 1,228,080 2,514,584 8,374,826 1,399,456
........................................................................................................................
Surrenders (6,561) (19,125) (73,245) (102,670) (532,447) (72,741)
Net loan activity 10 13 (8,703) (72,872) (152,771) 3,935
........................................................................................................................
Cost of insurance (2,368) (18,488) (16,817) (37,044) (129,399) (18,397)
........................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 70,426 634,516 1,129,315 2,301,998 7,560,209 1,312,253
........................................................................................................................
Total increase (decrease) in net
assets 12,222 814,535 1,540,845 2,943,423 11,549,165 1,676,186
........................................................................................................................
NET ASSETS:
Beginning of period 348,344 1,684,172 1,592,144 3,447,307 12,952,264 1,691,798
- -------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $360,566 $ 2,498,707 $ 3,132,989 $ 6,390,730 $24,501,429 $ 3,367,984
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
For the year ended International International
December 31, 1997 Growth Fund Growth and
Sub-Account* Income Fund
Sub-Account*
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ 4,598 $ 10,865
..................................
Capital gains income -- --
..................................
Net realized gain (loss) on
security transactions (3) 145
..................................
Net unrealized appreciation
(depreciation) of investments
during the period 13,775 13,367
..................................
Net increase (decrease) in net
assets resulting from operations 18,370 24,377
..................................
UNIT TRANSACTIONS:
Purchases 1,000 1,000
..................................
Net transfers 298,426 346,481
..................................
Surrenders (2,846) (3,498)
Net loan activity (5,512) (5,432)
..................................
Cost of insurance (1,236) (1,055)
..................................
Net increase (decrease) in net
assets resulting from unit
transactions 289,832 337,496
..................................
Total increase (decrease) in net
assets 308,202 361,873
..................................
NET ASSETS:
Beginning of period -- --
- -------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $308,202 $361,873
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
68 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Changes in Net Assets (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended International Money New New U.S. Utilities Vista Voyager
December 31, 1997 New Market Opportunities Value Government and Growth Fund Fund
Opportunities Fund Fund Fund High and Income Sub-Account* Sub-Account
Fund Sub-Account Sub-Account Sub-Account* Quality Bond Fund
Sub-Account* Fund Sub-Account
Sub-Account
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss) $ 1,554 $ 263,015 $ -- $ -- $ 41,593 $ 50,859 $ 33 $ 18,916
.................................................................................................................................
Capital gains income -- -- -- -- -- 69,354 -- 407,658
.................................................................................................................................
Net realized gain (loss)
on security
transactions (129) -- 24,784 (7,183) 1,535 2,809 (8,009) 4,822
.................................................................................................................................
Net unrealized
appreciation
(depreciation) of
investments during the
period (31,210) -- 2,122,853 83,564 23,755 341,948 42,243 2,153,271
.................................................................................................................................
Net increase (decrease)
in net assets
resulting from
operations (29,785) 263,015 2,147,637 76,381 66,883 464,970 34,267 2,584,667
.................................................................................................................................
UNIT TRANSACTIONS:
Purchases 1,000 24,471,594 -- 1,000 -- -- 1,000 --
.................................................................................................................................
Net transfers 594,284 (25,898,707) 3,948,752 822,347 290,877 842,138 425,017 4,061,985
.................................................................................................................................
Surrenders (6,019) (138,936) (264,042) (9,033) (30,658) (45,296) (3,307) (284,657)
.................................................................................................................................
Net loan activity (4,621) (1,205,487) (71,438) (5,472) 43,121 (11,744) (5,648) (36,310)
.................................................................................................................................
Cost of insurance (2,249) (47,389) (64,510) (3,509) (5,318) (12,723) (1,403) (71,377)
.................................................................................................................................
Net increase (decrease)
in net assets
resulting from unit
transactions 582,395 (2,818,925) 3,548,762 805,333 298,022 772,375 415,659 3,669,641
.................................................................................................................................
Total increase
(decrease) in net
assets 552,610 (2,555,910) 5,696,399 881,714 364,905 1,237,345 449,926 6,254,308
.................................................................................................................................
NET ASSETS:
Beginning of period -- 6,925,417 6,846,248 -- 597,953 1,061,582 -- 7,312,570
- -----------------------------------------------------------------------------------------------------------------------------
END OF PERIOD $ 552,610 $4,369,507 $12,542,647 $ 881,714 $ 962,858 $2,298,927 $ 449,926 $13,566,878
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* From inception, January 2, 1997, to December 31, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
69 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Statement of Changes in Net Assets
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended Asia Diversified Global Asset Global Growth High Yield
December 31, 1996 Pacific Income Fund Allocation Growth Fund and Income Fund
Growth Fund Sub-Account Fund Sub-Account Fund Sub-Account
Sub-Account Sub-Account Sub-Account
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 2,103 $ 21,970 $ 16,598 $ 23,213 $ 190,521 $ 58,411
........................................................................................................................
Capital gains income -- -- 10,892 33,815 86,385 --
........................................................................................................................
Net realized gain (loss) on
security transactions 139 11,050 (60) 515 (249) 12,566
........................................................................................................................
Net unrealized appreciation
(depreciation) of investments
during the period 15,115 65,917 117,195 242,512 1,193,437 76,806
........................................................................................................................
Net increase (decrease) in net
assets resulting from operations 17,357 98,937 144,625 300,055 1,470,094 147,783
........................................................................................................................
UNIT TRANSACTIONS:
Purchases -- -- -- -- 7,606 --
........................................................................................................................
Net transfers 292,487 1,527,357 1,263,299 2,718,060 9,205,818 1,302,945
........................................................................................................................
Surrenders (3,336) (42,573) (25,561) (92,232) (177,135) (15,962)
........................................................................................................................
Net loan activity (19) (30) (1) (4,157) (14,121) (382)
........................................................................................................................
Cost of insurance (1,348) (5,600) (5,712) (12,445) (46,206) (7,414)
........................................................................................................................
Net increase (decrease) in net
assets resulting from unit
transactions 287,784 1,479,154 1,232,025 2,609,226 8,975,962 1,279,187
........................................................................................................................
Total increase (decrease) in net
assets 305,141 1,578,091 1,376,650 2,909,281 10,446,056 1,426,970
........................................................................................................................
NET ASSETS:
Beginning of period 43,203 106,081 215,494 538,026 2,506,208 264,828
- ------------------------------------------------------------------------------------------------------------------
END OF PERIOD $348,344 $ 1,684,172 $ 1,592,144 $ 3,447,307 $12,952,264 $ 1,691,798
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
70 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- HARTFORD LIFE INSURANCE
COMPANY
Statement of Changes in Net Assets (continued)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the year ended Money New U.S. Utilities Voyager
December 31, 1996 Market Opportunities Government Growth Fund
Fund Fund and High and Income Sub-Account
Sub-Account Sub-Account Quality Fund
Bond Sub-Account
Fund
Sub-Account
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 208,905 $ -- $ 23,073 $ 20,790 $ 48,841
..............................................................................................................
Capital gains income -- -- -- -- 94,981
..............................................................................................................
Net realized gain (loss) on security
transactions -- (8,438) (7) 2,502 (1,003)
..............................................................................................................
Net unrealized appreciation
(depreciation) of investments during
the period -- 80,783 (6,719) 95,368 192,061
..............................................................................................................
Net increase (decrease) in net assets
resulting from operations 208,905 72,345 16,347 118,660 334,880
..............................................................................................................
UNIT TRANSACTIONS:
Purchases 33,859,102 7,159 -- -- 7,606
..............................................................................................................
Net transfers (28,335,131) 5,351,891 381,013 662,417 5,629,844
..............................................................................................................
Surrenders (82,757) (120,649) (8,236) (10,864) (104,445)
..............................................................................................................
Net loan activity (1,520,254) (1,410) (25,381) (1,571) (209)
..............................................................................................................
Cost of insurance (45,730) (26,304) (3,228) (5,397) (27,501)
..............................................................................................................
Net increase (decrease) in net assets
resulting from unit transactions 3,875,230 5,210,687 344,168 644,585 5,505,295
..............................................................................................................
Total increase (decrease) in net assets 4,084,135 5,283,032 360,515 763,245 5,840,175
..............................................................................................................
NET ASSETS:
Beginning of period 2,841,282 1,563,216 237,438 298,337 1,472,395
- ----------------------------------------------------------------------------------------------------------
END OF PERIOD $ 6,925,417 $6,846,248 $597,953 $ 1,061,582 $ 7,312,570
- ----------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
71 - PROSPECTUS
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE -- ITT HARTFORD LIFE AND
ANNUITY INSURANCE COMPANY
Notes to Financial Statements
December 31, 1997
1. ORGANIZATION:
Putnam Capital Manager Trust Separate Account Five (the Account) is a separate
investment account within ITT Hartford Life & Annuity Insurance Company (the
Company) and is registered with the Securities and Exchange Commission (SEC) as
a unit investment trust under the Investment Company Act of 1940, as amended.
Both the Company and the Account are subject to supervision and regulation by
the Department of Insurance of the State of Connecticut and the SEC. The Account
invests deposits by variable life contractholders of the Company in the various
mutual funds (the Funds) as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the Account,
which are in accordance with generally accepted accounting principles in the
investment company industry:
A) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade date
(date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. Capital gains income represents
dividends from the Funds which are characterized as capital gains under tax
regulations.
B) SECURITY VALUATION -- The investment in shares of the Funds are valued at the
closing net asset value per share as determined by the appropriate Fund as of
December 31, 1997.
C) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and are
taxed with, the total operations of the Company, which is taxed as an insurance
company under the Internal Revenue Code. Under current law, no federal income
taxes are payable with respect to the operations of the Account.
D) USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported amounts
of income and expenses during the period. Operating results in the future could
vary from the amounts derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions for
mortality and expense undertakings, cost of insurance, administrative fees, and
state premium taxes. These charges are deducted through termination of units of
interest from applicable contract owners' accounts, in accordance with the terms
of the contracts.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
72 - PROSPECTUS
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of ITT Hartford Life and Annuity Insurance Company:
We have audited the accompanying statutory balance sheets of ITT Hartford Life
and Annuity Insurance Company (a Connecticut Corporation and wholly owned
subsidiary of Hartford Life Insurance Company) (the Company) as of December 31,
1997 and 1996, and the related statutory statements of income, changes in
capital and surplus, and cash flows for each of the three years in the period
ended December 31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
statutory financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The Company presents its financial statements in conformity with statutory
accounting practices as described in Note 1 of notes to statutory financial
statements. When statutory financial statements are presented for purposes other
than for filing with a regulatory agency, generally accepted auditing standards
require that an auditors' report on them state whether they are presented in
conformity with generally accepted accounting principles. The accounting
practices used by the Company vary from generally accepted accounting principles
as explained and quantified in Note 1.
In our opinion, because the differences in accounting practices as described in
Note 1 are material, the statutory financial statements referred to above do not
present fairly, in accordance with generally accepted accounting principles, the
financial position of the Company as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for each of three years in the
period ended December 31, 1997.
However, in our opinion, the statutory financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as of December 31, 1997 and 1996, and the results of operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with statutory accounting practices as described in Note 1.
Hartford, Connecticut
January 27, 1998 ARTHUR ANDERSEN LLP
73 - PROSPECTUS
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY BALANCE SHEETS
($000)
---------------------------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
<S> <C> <C> <C>
----------------------------------------
1997 1996
----------------------------------------
ASSETS
Bonds $ 1,501,311 $ 1,268,480
Common stocks 64,408 44,996
Mortgage loans 85,103 0
Policy loans 36,533 28,853
Cash and short-term investments 309,432 176,830
Other invested assets 20,942 2,858
----------------------------------------
TOTAL CASH AND INVESTED ASSETS 2,017,729 1,522,017
----------------------------------------
Investment income due and accrued 15,878 14,555
Premium balances receivable 389 373
Receivables from affiliates 1,269 257
Other assets 22,788 19,099
Separate Account assets 23,208,728 14,619,324
----------------------------------------
TOTAL ASSETS $25,266,781 $16,175,625
----------------------------------------
LIABILITIES
Aggregate reserves for future benefits $ 605,183 $ 571,970
Policy and contract claims 5,672 6,806
Liability for premium and other deposit funds 1,795,149 1,155,143
Asset valuation reserve 13,670 7,442
Payable to affiliates 20,972 10,022
Other liabilities (754,393) (498,195)
Separate Account liabilities 23,208,728 14,619,324
----------------------------------------
TOTAL LIABILITIES 24,894,981 15,872,512
----------------------------------------
CAPITAL AND SURPLUS
Common stock 2,500 2,500
Gross paid-in and contributed surplus 226,043 226,043
Unassigned funds 143,257 74,570
----------------------------------------
TOTAL CAPITAL AND SURPLUS 371,800 303,113
----------------------------------------
TOTAL LIABILITIES, CAPITAL AND SURPLUS $25,266,781 $16,175,625
----------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
74 - PROSPECTUS
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF INCOME
($000)
---------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C> <C>
----------------------------------------
1997 1996 1995
----------------------------------------
REVENUES
Premiums and annuity considerations $ 296,645 $ 250,244 $ 165,792
Annuity and other fund deposits 1,981,246 1,897,347 1,087,661
Net investment income 102,285 98,441 78,787
Commissions and expense allowances on
reinsurance ceded 396,921 370,637 183,380
Reserve adjustment on reinsurance ceded 3,672,076 3,864,395 1,879,785
Other revenues 288,632 161,906 140,796
----------------------------------------
TOTAL REVENUES 6,737,805 6,642,970 3,536,201
----------------------------------------
BENEFITS AND EXPENSES
Death and annuity benefits 66,013 60,111 53,029
Surrenders and other benefit payments 461,733 276,720 221,392
Commissions and other expenses 564,240 491,720 236,202
Increase in aggregate reserves for future
benefits 33,213 27,351 94,253
Increase in liability for premium and other
deposit funds 640,006 207,156 460,124
Net transfers to Separate Accounts 4,914,980 5,492,964 2,414,669
----------------------------------------
TOTAL BENEFITS AND EXPENSES 6,680,185 6,556,022 3,479,669
----------------------------------------
NET GAIN FROM OPERATIONS
BEFORE FEDERAL INCOME TAXES 57,620 86,948 56,532
Federal income tax (benefit) expense (14,878) 19,360 14,048
----------------------------------------
NET GAIN FROM OPERATIONS 72,498 67,588 42,484
Net realized capital gains, after tax 1,544 407 374
----------------------------------------
NET INCOME $ 74,042 $ 67,995 $ 42,858
----------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
75 - PROSPECTUS
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CHANGES IN CAPITAL AND SURPLUS
($000)
---------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C> <C>
-------------------------------------------
1997 1996 1995
-------------------------------------------
CAPITAL AND SURPLUS - BEGINNING OF YEAR $ 303,113 $ 238,334 $ 91,285
-------------------------------------------
Net Income 74,042 67,995 42,858
Change in Net Unrealized Capital Gains (Losses)
on Common Stocks and Other Invested Assets 2,186 (5,171) 1,709
Change in Asset Valuation Reserve (6,228) 568 (5,588)
Change in Non-Admitted Assets (1,313) 1,387 (1,944)
Aggregate Write-ins for Surplus (See Note 3) 0 0 8,080
Dividends to Shareholder 0 0 (10,000)
Paid-In Surplus 0 0 111,934
-------------------------------------------
CHANGE IN CAPITAL AND SURPLUS 68,687 64,779 147,049
-------------------------------------------
CAPITAL AND SURPLUS - END OF YEAR $ 371,800 $ 303,113 $ 238,334
-------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
76 - PROSPECTUS
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
STATUTORY STATEMENTS OF CASH FLOWS
($000)
---------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
<S> <C> <C> <C> <C>
-------------------------------------------
1997 1996 1995
-------------------------------------------
OPERATIONS
Premiums, Annuity Considerations and Fund
Deposits $2,277,874 $2,147,627 $1,253,511
Investment Income 101,991 106,178 78,328
Other Income 4,381,718 4,396,892 2,253,466
-------------------------------------------
Total Income 6,761,583 6,650,697 3,585,305
-------------------------------------------
Benefits Paid 529,733 338,998 277,965
Federal Income Taxes (Received) Paid on
Operations (14,499) 28,857 208,423
Other Expenses 5,754,725 6,254,139 2,664,385
-------------------------------------------
Total Benefits and Expenses 6,269,959 6,621,994 3,150,773
-------------------------------------------
NET CASH FROM OPERATIONS 491,624 28,703 434,532
-------------------------------------------
PROCEEDS FROM INVESTMENTS
Bonds 614,413 871,019 287,941
Common Stocks 11,481 72,100 52
Other 152 10 28
-------------------------------------------
NET INVESTMENT PROCEEDS 626,046 943,129 288,021
-------------------------------------------
TAXES PAID ON CAPITAL GAINS 0 936 226
PAID-IN SURPLUS 0 0 111,934
OTHER CASH PROVIDED 0 41,998 28,199
-------------------------------------------
TOTAL PROCEEDS 1,117,670 1,012,894 862,460
-------------------------------------------
COST OF INVESTMENTS ACQUIRED
Bonds 848,267 914,523 720,521
Common Stocks 28,302 82,495 35,794
Mortgage Loans 85,103 0 0
Miscellaneous Applications 18,548 130 2,146
-------------------------------------------
TOTAL INVESTMENTS ACQUIRED 980,220 997,148 758,461
-------------------------------------------
OTHER CASH APPLIED
Dividends Paid to Stockholders 0 0 10,000
Other 4,848 12,220 5,007
-------------------------------------------
TOTAL OTHER CASH APPLIED 4,848 12,220 15,007
-------------------------------------------
TOTAL APPLICATIONS 985,068 1,009,368 773,468
-------------------------------------------
NET CHANGE IN CASH AND SHORT-TERM INVESTMENTS 132,602 3,526 88,992
-------------------------------------------
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF YEAR 176,830 173,304 84,312
-------------------------------------------
CASH AND SHORT-TERM INVESTMENTS, END OF YEAR $ 309,432 $ 176,830 $ 173,304
-------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statutory financial
statements.
77 - PROSPECTUS
<PAGE>
ITT HARTFORD LIFE AND ANNUITY INSURANCE COMPANY
NOTES TO STATUTORY FINANCIAL STATEMENTS
DECEMBER 31, 1997
(AMOUNTS IN THOUSANDS UNLESS OTHERWISE STATED)
-------------------------------------------------------------------
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
ORGANIZATION
ITT Hartford Life and Annuity Insurance Company ("ILA" or "the Company"),
formerly known as ITT Life Insurance Corporation, is a wholly owned subsidiary
of Hartford Life Insurance Company ("HLIC"), which is an indirect subsidiary of
Hartford Life, Inc. ("HLI"), which is majority owned by The Hartford Financial
Services Group, Inc. ("The Hartford"), formerly a wholly owned subsidiary of ITT
Corporation ("ITT"). On February 10, 1997, HLI filed a registration statement,
as amended, with the Securities and Exchange Commission relating to the initial
public offering of HLI Class A Common Stock (the "Offering"). Pursuant to the
Offering on May 22, 1997, HLI sold to the public 26 million shares, representing
18.6% of the equity ownership of HLI. On December 19, 1995, ITT Corporation
distributed all the outstanding shares of The Hartford to ITT shareholders of
record in an action known herein as the "Distribution". As a result of the
Distribution, The Hartford became an independent, publicly traded company.
During 1996, ILA re-domesticated from the State of Wisconsin to the State of
Connecticut.
ILA offers a complete line of ordinary and universal life insurance, individual
annuities and certain supplemental accident and health benefit coverages.
BASIS OF PRESENTATION
The accompanying ILA statutory financial statements were prepared in conformity
with statutory accounting practices prescribed or permitted by the National
Association of Insurance Commissioners ("NAIC") and the State of Connecticut
Department of Insurance.
The preparation of financial statements in conformity with statutory accounting
principles requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reported period. Actual results could differ
from those estimates. The most significant estimates are for determining the
liability for aggregate reserves for future benefits and the liability for
premium and other deposit funds. Although some variability is inherent in these
estimates, management believes the amounts provided are adequate.
Statutory accounting practices and generally accepted accounting principles
("GAAP") differ in certain significant respects. These differences principally
involve:
(1) treatment of policy acquisition costs (commissions, underwriting and selling
expenses, premium taxes, etc.) which are charged to expense when incurred for
statutory purposes rather than on a pro-rata basis over the expected life of the
policy;
(2) recognition of premium revenues, which for statutory purposes are generally
recorded as collected or when due during the premium paying period of the
contract and which for GAAP purposes, for universal life policies and investment
products, generally, are only recorded for policy charges for the cost of
insurance, policy administration and surrender charges assessed to policy
account balances. Also, for GAAP purposes, premiums for traditional life
insurance policies are recognized as revenues when they are due from
policyholders and the retrospective deposit method is used in accounting for
universal life and other types of contracts where the payment pattern is
irregular or surrender charges are a significant source of profit. The
prospective deposit method is used for GAAP purposes where investment margins
are the primary source of profit;
(3) development of liabilities for future policy benefits, which for statutory
purposes predominantly use interest rate and mortality assumptions prescribed by
the NAIC which may vary considerably from interest and mortality assumptions
used for GAAP financial reporting;
(4) providing for income taxes based on current taxable income (tax return) only
for statutory purposes, rather than establishing additional assets or
liabilities for deferred Federal income taxes to recognize the tax effect
related to reporting revenues and expenses in different periods for financial
reporting and tax return purposes;
(5) excluding certain GAAP assets designated as non-admitted assets (e.g., past
due agents' balances and furniture and equipment) from the balance sheet for
statutory purposes by directly charging surplus;
(6) establishing accruals for post-retirement and post-employment health care
benefits on an option basis, using a twenty year phase-in approach, whereas GAAP
liabilities are recorded upon adoption of the applicable standard;
(7) establishing a formula reserve for realized and unrealized losses due to
default and equity risk associated with certain invested assets (Asset Valuation
Reserve); as well as the deferral and amortization of realized gains and losses,
motivated by changes in interest rates during the period the asset is held, into
income over the remaining life to maturity of the asset sold (Interest
Maintenance Reserve); whereas on a GAAP basis, no such formula reserve is
required and realized gains and losses are recognized in the period the asset is
sold;
(8) the reporting of reserves and benefits net of reinsurance ceded, where risk
transfer has taken place; whereas on a GAAP basis, reserves are reported gross
of reinsurance with reserve credits presented as recoverable assets;
78 - PROSPECTUS
<PAGE>
(9) the reporting of fixed maturities at amortized cost, whereas GAAP requires
that fixed maturities be classified as "held-to-maturity", "available-for-sale"
or "trading", based on the Company's intentions with respect to the ultimate
disposition of the security and its ability to affect those intentions. The
Company's bonds were classified on a GAAP basis as "available-for-sale" and
accordingly, those investments and common stocks were reflected at fair value
with the corresponding impact included as a component of Stockholder's Equity
designated as "Net unrealized capital gains (losses) on securities net of tax".
For statutory reporting purposes, Change in Net Unrealized Capital Gains
(Losses) on Common Stocks and Other Invested Assets includes the change in
unrealized gains (losses) on common stock reported at fair value; and
(10) separate account liabilities are valued on the Commissioner's Annuity
Reserve Valuation Method ("CARVM"), with the surplus generated recorded as a
liability to the general account (and a contra liability on the balance sheet of
the general account), whereas GAAP liabilities are valued at account value.
As of and for the years ended December 31, 1997, 1996 and 1995, the significant
differences between statutory and GAAP basis net income and capital and surplus
for the Company are summarized as follows:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
-------------------------------------------------
GAAP NET INCOME: $ 58,050 $ 41,202 $ 38,821
Amortization and deferral of
policy acquisition costs (345,658) (341,572) (174,341)
Change in unearned revenue
reserve 4,641 55,504 32,300
Deferred taxes 47,113 2,090 2,801
Separate accounts 282,818 306,978 146,635
Other, net 27,078 3,793 (3,358)
-------------------------------------------------
Statutory Net Income $ 74,042 $ 67,995 $ 42,858
-------------------------------------------------
GAAP CAPITAL AND SURPLUS $ 570,469 $ 503,887 $ 455,541
Deferred policy acquisition
costs (1,283,771) (938,114) (596,542)
Unearned revenue reserve 134,789 130,148 74,644
Deferred taxes 64,522 12,823 1,493
Separate accounts 923,040 640,101 333,123
Asset valuation reserve (13,670) (7,442) (8,010)
Unrealized gains (losses) on
bonds 13,943 5,112 (1,696)
Adjustment relating to
Lyndon contribution (see
Note 3) (41,277) (41,277) (41,277)
Other, net 3,755 (2,125) 21,058
-------------------------------------------------
Statutory Capital and
Surplus $ 371,800 $ 303,113 $ 238,334
-------------------------------------------------
</TABLE>
AGGREGATE RESERVES FOR FUTURE BENEFITS AND LIABILITY FOR PREMIUM
AND OTHER DEPOSIT FUNDS
Aggregate reserves for payment of future life, health and annuity benefits were
computed in accordance with actuarial standards. Reserves for life insurance
policies are generally based on the 1958 and 1980 Commissioner's Standard
Ordinary Mortality Tables and various valuation rates ranging from 2.5% to 6%.
Accumulation and on-benefit annuity reserves are based principally on individual
annuity tables at various rates ranging from 2.5% to 8.75% and using CARVM.
Accident and health reserves are established using a two year preliminary term
method and morbidity tables based on Company experience.
ILA has established separate accounts to segregate the assets and liabilities of
certain annuity contracts that must be segregated from the Company's general
assets under the terms of the contracts. The assets consist primarily of
marketable securities reported at market value. Premiums, benefits and expenses
of these contracts are reported in the Statutory Statements of Income.
INVESTMENTS
Investments in bonds are carried at amortized cost. Bonds which are deemed
ineligible to be held at amortized cost by the NAIC Securities Valuation Office
("SVO") are carried at the appropriate SVO published value. When a permanent
reduction in the value of publicly traded securities occurs, the decrease is
reported as a realized loss and the carrying value is adjusted accordingly.
Common stocks are carried at fair value with the current year change in the
difference from cost reflected in surplus. Other invested assets are generally
recorded at fair value.
The Asset Valuation Reserve ("AVR") is designed to provide a standardized
reserving process for realized and unrealized losses due to default and equity
risks associated with invested assets. The reserve increased by $6,228 in 1997,
decreased by $568 in 1996 and increased by $5,588 in 1995. Additionally, the
Interest Maintenance Reserve ("IMR") captures net
79 - PROSPECTUS
<PAGE>
realized capital gains and losses, net of applicable income taxes, resulting
from changes in interest rates and amortizes these gains or losses into income
over the remaining life of the mortgage loan or bond sold. Realized capital
gains and losses, net of taxes not included in IMR are reported in the Statutory
Statements of Income. Realized investment gains and losses are determined on a
specific identification basis. The amount of net capital losses reclassified
from the IMR was $719 in 1997 and the amount of net capital gains reclassified
was $1,413 and $39 in 1996 and 1995, respectively. The amount of income
amortized was $85, $392 and $256 in 1997, 1996 and 1995, respectively.
OTHER LIABILITIES
The amount reflected in other liabilities includes a receivable from the
separate accounts of $923 million and $640 million as of December 31, 1997 and
1996, respectively. The balances are classified in accordance with NAIC
accounting practices.
MORTGAGE LOANS
Mortgage loans, carried at cost, which approximates fair value, include
investments in assets backed by mortgage loan pools.
2. INVESTMENTS:
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
------------------------------------------
Interest income from bonds and
short-term investments $100,475 $89,940 $ 76,100
Interest income from policy
loans 1,958 1,846 1,504
Interest and dividends from
other investments 1,005 7,864 2,288
------------------------------------------
Gross investment income 103,438 99,650 79,892
Less: investment expenses 1,153 1,209 1,105
------------------------------------------
NET INVESTMENT INCOME $102,285 $98,441 $ 78,787
------------------------------------------
(B) COMPONENTS OF NET
UNREALIZED CAPITAL GAINS
(LOSSES)
ON COMMON STOCKS
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
------------------------------------------
Gross unrealized capital gains
at end of year $537 $ 713 $ 1,724
Gross unrealized capital
losses at end of year (1,820) (4,160) 0
------------------------------------------
Net unrealized capital
(losses) gains (1,283) (3,447) 1,724
Balance at beginning of year (3,447) 1,724 15
------------------------------------------
CHANGE IN NET UNREALIZED
CAPITAL GAINS (LOSSES)
ON COMMON STOCKS $ 2,164 $(5,171) $ 1,709
------------------------------------------
(C) COMPONENTS OF NET
UNREALIZED CAPITAL GAINS
(LOSSES) ON BONDS AND
SHORT-TERM INVESTMENTS
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
------------------------------------------
Gross unrealized capital gains
at end of year $23,357 $11,821 $ 22,251
Gross unrealized capital
losses at end of year (1,906) (3,842) (1,374)
------------------------------------------
Net unrealized capital gains 21,451 7,979 20,877
Balance at beginning of year 7,979 20,877 33,732
------------------------------------------
CHANGE IN NET UNREALIZED
CAPITAL GAINS (LOSSES) ON
BONDS AND SHORT-TERM
INVESTMENTS $13,472 $(12,898) $54,609
------------------------------------------
</TABLE>
80 - PROSPECTUS
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
(D) COMPONENTS OF NET REALIZED
CAPITAL GAINS
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
------------------------------------------
Bonds and short-term
investments $ (120) $ 2,756 $ 56
Common stocks 0 0 52
Real estate and other 114 0 0
------------------------------------------
Realized capital (losses)
gains (6) 2,756 208
Capital gains (benefit) tax (831) 936 (205)
------------------------------------------
Net realized capital gains,
after tax 825 1,820 413
Less: IMR capital (losses)
gains (719) 1,413 39
------------------------------------------
Net realized capital gains $ 1,544 $ 407 $ 374
------------------------------------------
</TABLE>
(E) OFF-BALANCE SHEET INVESTMENTS
The Company had no significant financial instruments with off-balance sheet risk
as of December 31, 1997 and 1996.
(F) CONCENTRATION OF CREDIT RISK
Excluding U.S. government and government agency investments, the Company is not
exposed to any significant concentration of credit risk.
(G) BONDS, SHORT-TERM INVESTMENTS AND COMMON STOCKS
<TABLE>
<CAPTION>
Gross Unrealized
Amortized ------------- Fair
1997 Cost Gains Losses Value
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
U.S. government and government agencies and
authorities:
Guaranteed and sponsored $11,114 $55 $(51) $11,118
Guaranteed and sponsored - asset-backed 55,506 1,056 (269) 56,293
States, municipalities and political
subdivisions 26,404 329 0 26,733
International governments 7,609 500 0 8,109
Public utilities 73,024 754 (132) 73,646
All other corporate 517,715 14,110 (704) 531,121
All other corporate - asset-backed 630,069 5,005 (739) 634,335
Short-term investments 277,330 33 (8) 277,355
Certificates of deposit 93,770 1,515 (3) 95,282
Parents, subsidiaries and affiliates 86,100 0 0 86,100
------------------------------------------------------------
TOTAL BONDS AND SHORT-TERM INVESTMENTS $ 1,778,641 $ 23,357 $ (1,906) $ 1,800,092
------------------------------------------------------------
<CAPTION>
Gross Unrealized
------------- Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
Common stock - unaffiliated $30,307 $537 $0 $30,844
Common stock - affiliated 35,384 0 (1,820) 33,564
------------------------------------------------------------
TOTAL COMMON STOCKS $ 65,691 $ 537 $ (1,820) $ 64,408
------------------------------------------------------------
</TABLE>
81 - PROSPECTUS
<PAGE>
<TABLE>
<CAPTION>
Gross Unrealized
Amortized ------------- Fair
1997 Cost Gains Losses Value
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. government and government agencies and
authorities:
Guaranteed and sponsored $58,761 $6 $(195) $58,572
Guaranteed and sponsored - asset-backed 78,237 1,477 (609) 79,105
States, municipalities and political
subdivisions 25,958 163 (2) 26,119
International governments 7,447 205 0 7,652
Public utilities 70,116 396 (424) 70,088
All other corporate 410,530 6,357 (1,355) 415,532
All other corporate - asset-backed 485,953 2,654 (1,081) 487,526
Short-term investments 148,094 0 (66) 148,028
Certificates of deposit 83,378 563 (110) 83,831
Parents, subsidiaries and affiliates 48,100 0 0 48,100
------------------------------------------------------------
TOTAL BONDS AND SHORT-TERM
INVESTMENTS $1,416,574 $11,821 $(3,842) $1,424,553
------------------------------------------------------------
<CAPTION>
Gross Unrealized
-------------
COST GAINS LOSSES FAIR VALUE
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
Common stock - unaffiliated $13,064 $713 $0 $13,777
Common stock - affiliated 35,379 0 (4,160) 31,219
------------------------------------------------------------
TOTAL COMMON STOCKS $48,443 $713 $(4,160) $44,996
------------------------------------------------------------
</TABLE>
The amortized cost and estimated fair value of bonds and short-term investments
at December 31, 1997 by management's anticipated maturity are shown below.
Asset-backed securities are distributed to maturity year based on ILA's estimate
of the rate of future prepayments of principal over the remaining life of the
securities. Expected maturities differ from contractual maturities reflecting
borrowers' rights to call or prepay their obligations.
<TABLE>
<CAPTION>
Amortized Estimated
Cost Fair Value
<S> <C> <C> <C>
---------------------------
MATURITY
Due in one year or less $ 424,518 $ 696,203
Due after one year through five years 586,980 708,365
Due after five years through ten years 451,963 295,896
Due after ten years 315,180 99,628
---------------------------
TOTAL $1,778,641 $ 1,800,092
---------------------------
</TABLE>
Proceeds from sales of investments in bonds and short-term investments during
1997, 1996 and 1995 were $367,626, $668,078 and $313,961, respectively,
resulting in gross realized gains of $964, $3,675 and $1,419, respectively, and
gross realized losses of $1,084, $919 and $1,263, respectively, before transfers
to IMR. The Company had realized gains of $52 during 1995 from a capital gain
distribution.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS
BALANCE SHEET ITEMS (IN MILLIONS):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C> <C> <C> <C>
------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------------------------------------------------
ASSETS
Bonds and short-term investments $ 1,778 $ 1,800 $ 1,417 $ 1,425
Common stocks 64 64 45 45
Policy loans 37 37 29 29
Mortgage loans 85 85 0 0
Other invested assets 21 21 3 3
LIABILITIES
Liabilities on investment contracts $ 1,911 $ 1,835 $ 1,245 $ 1,191
</TABLE>
82 - PROSPECTUS
<PAGE>
The carrying amounts for policy loans approximates fair value. The fair value
of liabilities on investment contracts are determined by forecasting future
cash flows and discounting the forecasted cash flows at current market rates.
3. RELATED PARTY TRANSACTIONS: Transactions between the Company and its
affiliates within The Hartford relate principally to tax settlements,
reinsurance, service fees, capital contributions and payments of dividends. The
Company has also invested in bonds of its subsidiaries, Hartford Financial
Services Corporation and HL Investment Advisors, Inc., and common stock of its
subsidiary, ITT Hartford Life, LTD.
On June 30, 1995, the assets of Lyndon Insurance Company were contributed to
ILA. As a result, ILA received approximately $365 million in bonds and
short-term investments, common stocks and cash, $28 million in policy reserves,
$187 million of current tax liability, $26 million in IMR, $8 million in AVR
(offset by an aggregate write-in to surplus), and $4 million of other
liabilities. The assets in excess of liabilities of $112 million were recorded
as an increase to paid-in surplus.
For additional information, see Note 5.
4. FEDERAL INCOME TAXES: The Company and The Hartford have entered into a tax
sharing agreement under which each member in the consolidated U.S. Federal
income tax return will make payments between them such that, with respect to any
period, the amount of taxes to be paid by the Company, subject to certain
adjustments, generally will be determined as though the Company were to file
separate Federal, state and local income tax returns.
As long as The Hartford continues to beneficially own, directly or indirectly,
at least 80% of the combined voting power and 80% of the value of the
outstanding capital stock of HLI, the Company will be included for Federal
income tax purposes in the consolidated group of which The Hartford is the
common parent. It is the current intention of The Hartford and its subsidiaries
to continue to file a single consolidated Federal income tax return. The Company
will continue to remit (receive from) The Hartford a current income tax
provision (benefit) computed in accordance with such tax sharing agreement.
Federal income taxes (received) paid by the Company were $(14,499), $29,792 and
$215,921 in 1997, 1996 and 1995, respectively. The effective tax rate was (26)%,
22% and 25% in 1997, 1996 and 1995, respectively. The following schedule
provides a reconciliation of the tax provision at the U.S. Federal Statutory
rate to Federal income tax (benefit) expense (in millions).
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
------------------------------------
Tax provision at U.S. Federal statutory rate $ 20 $ 30 $ 20
Tax deferred acquisition costs 25 27 8
Statutory to tax reserve differences 1 0 3
Unrealized gain on separate accounts (44) (21) (13)
Investments and other (17) (17) (4)
------------------------------------
Federal income tax (benefit) expense $(15) $ 19 $ 14
------------------------------------
</TABLE>
5. CAPITAL AND SURPLUS AND SHAREHOLDER DIVIDEND RESTRICTIONS: The maximum amount
of dividends which can be paid, without prior approval, by State of Connecticut
insurance companies to shareholders is subject to restrictions relating to
statutory surplus. Dividends are paid as determined by the Board of Directors
and are not cumulative. No dividends were paid in 1997 or 1996. ILA paid
dividends of $10 million to its parent, HLIC, in 1995. As a result of the
Distribution by ITT, the assets of ITT Lyndon Insurance Company (Lyndon) were
contributed to ILA in June 1995. Substantially all the business was removed from
Lyndon prior to the contribution. The amount of assets which exceeded
liabilities at the contribution date ($112 million) was included in paid-in
surplus.
6. PENSION PLANS AND OTHER POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS: The
Company's employees are included in The Hartford's non-contributory defined
benefit pension plans. These plans provide pension benefits that are based on
years of service and the employee's compensation during the last ten years of
employment. The Company's funding policy is to contribute annually an amount
between the minimum funding requirements set forth in the Employee Retirement
Income Security Act of 1974 and the maximum amount that can be deducted for
Federal income tax purposes. Generally, pension costs are funded through the
purchase of HLIC's group pension contracts. Pension expense was $265, $358, and
$1,034 in 1997, 1996 and 1995, respectively. Liabilities for the plan are held
by The Hartford.
The Company also participates in The Hartford's Investment and Savings Plan,
which includes a deferred compensation option under IRC section 401(k) and an
ESOP allocation under IRC section 404(k). The liabilities for these plans are
included in the financial statements of The Hartford. The cost to ILA was not
material in 1997, 1996 and 1995.
The Company's employees are included in The Hartford's contributory defined
health care and life insurance benefit plans. These plans provide health care
and life insurance benefits for retired employees. Substantially all employees
may become eligible for those benefits if they reach normal or early retirement
age while still working for the Company. The Company has prefunded a portion of
the health care and life insurance obligations through trust funds where such
prefunding can be
83 - PROSPECTUS
<PAGE>
accomplished on a tax effective basis. Amounts allocated by The Hartford for
post-retirement health care and life insurance benefits expense (not including
provisions for accrual of post-retirement benefit obligations) are immaterial.
The assumed rate of future increases in the per capita cost of health care (the
health care trend rate) was 8.5% for 1997, decreasing ratably to 6% in the year
2001. Increasing the health care trend rates by one percent per year would have
an immaterial impact on the accumulated post-retirement benefit obligation and
the annual expense. The cost to ILA was not material in 1997, 1996 and 1995.
Post-employment benefits are primarily comprised of obligations to provide
medical and life insurance to employees on long-term disability. Post-employment
benefit expense was not material in 1997, 1996 and 1995.
7. REINSURANCE: The Company cedes insurance to non-affiliated insurers in order
to limit its maximum loss. Such transfer does not relieve ILA of its primary
liability. ILA also assumes insurance from other insurers.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
1997 1996 1995
<S> <C> <C> <C> <C>
----------------------------------------
Direct premiums $266,427 $226,612 $159,918
Premiums assumed 51,630 33,817 13,299
Premiums ceded (21,412) (10,185) (7,425)
----------------------------------------
Premiums and annuity considerations $296,645 $250,244 $165,792
----------------------------------------
</TABLE>
The Company cedes to RGA Reinsurance Company, on a modified coinsurance basis,
80% of the variable annuity business written since 1994.
8. SEPARATE ACCOUNTS: The Company maintains separate account assets and
liabilities totaling $23.2 billion and $14.6 billion at December 31, 1997 and
1996, respectively. Separate account assets are reported at fair value and
separate account liabilities are determined in accordance with CARVM, which
approximates the market value less applicable surrender charges. Separate
account assets are segregated from other investments, the policyholder assumes
the investment risk, and the investment income and gains and losses accrue
directly to the policyholder. Separate account management fees, net of minimum
guarantees, were $252 million, $144 million and $72 million in 1997, 1996 and
1995, respectively, and are recorded as a component of other revenues on the
Statutory Statements of Income.
9. COMMITMENTS AND CONTINGENCIES: As of December 31, 1997 and 1996, the Company
had no material contingent liabilities, nor had the Company committed any
surplus funds for any contingent liabilities or arrangements. The Company is
involved in various legal actions which have arisen in the normal course of its
business. In the opinion of management, the ultimate liability with respect to
such lawsuits as well as other contingencies is not considered to be material in
relation to the results of operations and financial position of the Company.
Under insurance guaranty laws in most states, insurers doing business therein
can be assessed up to prescribed limits for policyholder losses incurred by
insolvent companies. The amount of any future assessments on ILA under these
laws cannot be reasonably estimated. Most of the laws do provide, however, that
an assessment may be excused or deferred if it would threaten an insurer's own
financial strength. Additionally, guaranty fund assessments are used to reduce
state premium taxes paid by the Company in certain states. ILA paid guaranty
fund assessments of $1,544, $1,262 and $1,684 in 1997, 1996 and 1995,
respectively. ILA incurred guaranteed fund expense of $548 in 1997 and 1996 and
$0 in 1995.
84 - PROSPECTUS
