<PAGE>
HARTFORD LIFE INSURANCE COMPANY PUTNAM CAPITAL MANAGER LIFE
P. O. BOX 2999 Modified Single Premium
HARTFORD, CT 06104-2999 Variable Life Insurance Contracts
TELEPHONE (800)231-5453
This prospectus describes Putnam Capital Manager Life, a modified single premium
variable life insurance contract ("Contract" or "Contracts") offered by Hartford
Life Insurance Company ("Hartford Life") to applicants age 90 and under. The
Contract lets the Contract Owner pay a single premium and, subject to
restrictions, additional premiums.
The Contract is a modified endowment contract for federal income tax purposes,
except in certain cases described under "Federal Tax Considerations," page ___.
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 CONTRACT. ANY AMOUNTS THAT ARE TAXABLE WITHDRAWALS WILL BE
SUBJECT TO A 10% ADDITIONAL TAX, WITH CERTAIN EXCEPTIONS.
Generally, the minimum initial premium Hartford Life will accept is $10,000.
The initial premium will be allocated to the PCM Money Market Fund Sub-Account.
After the Right to Cancel Period has expired, the amount so allocated will be
transferred to the Funds specified in the Contract Owner's application. The
following underlying investment portfolios ("Funds") of Putnam Variable Trust
are available under the Contracts: Putnam VT Asia Pacific Growth Fund, Putnam
VT Diversified Income Fund, Putnam VT Global Asset Allocation Fund, Putnam VT
Global Growth Fund, Putnam VT Growth and Income 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 Money Market
Fund, Putnam VT New Opportunities Fund, Putnam VT New Value 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.
There is no guaranteed minimum Account Value for a Contract. The Account Value
of a Contract will vary up or down to reflect the investment experience of the
Funds to which premiums have been allocated. The Contract Owner bears the
investment risk for all amounts so allocated. The Contract continues in effect
while the Cash Surrender Value is sufficient to pay the monthly charges under
the Contract ("Deduction Amount"). The Contract 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 made.
The Contracts provide for a Face Amount, which is the minimum death benefit
under the Contract. The death benefit ("Death Benefit") may be greater than the
Face Amount. The Account Value will, and under certain circumstances the Death
Benefit of the Contract may, increase or decrease based on the investment
experience of the Funds to which premiums have been allocated. However, while
the Contract is in force, the Death Benefit will never be less than the Face
Amount. At the death of the Insured, we will pay the death proceeds ("Death
Proceeds") to the beneficiary. The Death Proceeds equal the Death Benefit less
any Indebtedness under the Contract.
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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
CONTRACT.
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.
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, 1996
-----------
Revised effective: January 2, 1997
---------------
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of Accumulation Units plus the value of the
Loan Account under the Contract.
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 withdrawal that
is not subject to the contingent deferred sales charge. This amount in any
Contract year is the greater of 10% of premiums or 100% of cumulative earnings
(Account Value less premiums paid).
CASH SURRENDER VALUE: The Account Value less any contingent deferred sales
charge and additional premium tax charge and all Indebtedness.
CODE: The Internal Revenue Code of 1986, as amended.
CONTRACT ANNIVERSARY: The yearly anniversary of the Contract Date.
CONTRACT DATE: A date not later than three business days after receipt of the
initial premium at Hartford Life's Home Office.
CONTRACT OWNER: The person having rights to benefits under the Contract during
the lifetime of the Insured; the Contract Owner may or may not be the Insured.
CONTRACT YEARS: Annual periods computed from the Contract Date.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Contract or
(2) the Account Value on the date of death multiplied by a stated percentage as
specified in the Contract.
DEATH PROCEEDS: The amount that we will pay on the death of the Insured. This
equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Contract Date and on each Monthly Activity
Date for the cost of insurance, a tax expense charge, an administrative charge
and a mortality and expense risk charge.
FACE AMOUNT: On the Contract Date, the initial Face Amount is the amount shown
on the Contract's Specifications page. Thereafter, the Face Amount is reduced
by any partial withdrawals.
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FUNDS: Currently, the portfolios of Putnam Variable Trust described on page __
of this Prospectus.
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 Life by the Contract Owner. These
monies include all outstanding loans on the Contract, including any interest due
or accrued Deduction Amount or Annual Maintenance Fee.
INSURED: The person on whose life the Contract is issued.
LOAN ACCOUNT: An account in Hartford Life's General Account, established for
any amounts transferred from the Sub-Accounts for requested loans. The Loan
Account credits a fixed rate of interest of 4% per annum that is not based on
the investment experience of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which the Deduction Amount is
deducted from the Account Value of the Contract. Monthly Activity Dates occur
on the same day of the month as the Contract Date.
SEPARATE ACCOUNT: Separate Account Five, an account established by Hartford
Life to separate the assets funding the Contracts from other assets of Hartford
Life.
SUB-ACCOUNT: The subdivisions of the Separate Account used to allocate a
Contract Owner's Account Value, less Indebtedness, among the Funds.
TRUST: Putnam Variable Trust.
VALUATION DAY: 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 (currently 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
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TABLE OF CONTENTS
PAGE
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE SEPARATE ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment Adviser. . . . . . . . . . . . . . . . . . . . . . . . . . .
THE CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Application for a Contract. . . . . . . . . . . . . . . . . . . . . . .
Premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Allocation of Premiums. . . . . . . . . . . . . . . . . . . . . . . . .
Accumulation Unit Values. . . . . . . . . . . . . . . . . . . . . . . .
DEDUCTIONS AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . .
Monthly Deductions. . . . . . . . . . . . . . . . . . . . . . . . . . .
Annual Maintenance Fee. . . . . . . . . . . . . . . . . . . . . . . . .
Taxes Charged Against the Separate Account. . . . . . . . . . . . . . .
Charges Against the Funds . . . . . . . . . . . . . . . . . . . . . . .
Contingent Deferred Sales Charge. . . . . . . . . . . . . . . . . . . .
Premium Tax Charge. . . . . . . . . . . . . . . . . . . . . . . . . . .
CONTRACT BENEFITS AND RIGHTS . . . . . . . . . . . . . . . . . . . . . . . .
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Account Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfer of Account Value . . . . . . . . . . . . . . . . . . . . . . .
Contract Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amount Payable on Surrender of the Contract . . . . . . . . . . . . . .
Partial Withdrawals . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits at Maturity. . . . . . . . . . . . . . . . . . . . . . . . . .
<PAGE>
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Lapse and Reinstatement . . . . . . . . . . . . . . . . . . . . . . . .
Cancellation and Exchange Rights. . . . . . . . . . . . . . . . . . . .
Suspension of Valuation, Payments and Transfers . . . . . . . . . . . .
LAST SURVIVOR CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statements to Contract Owners . . . . . . . . . . . . . . . . . . . . .
Limit on Right to Contest . . . . . . . . . . . . . . . . . . . . . . .
Misstatement as to Age and Sex. . . . . . . . . . . . . . . . . . . . .
Payment Options . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . . .
DISTRIBUTION OF THE CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . .
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS . . . . . . . . . . . . . . . .
FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxation of Hartford Life and the Separate Account. . . . . . . . . . .
Income Taxation of Contract Benefits. . . . . . . . . . . . . . . . . .
Last Survivor Contracts . . . . . . . . . . . . . . . . . . . . . . . .
Modified Endowment Contracts. . . . . . . . . . . . . . . . . . . . . .
Estate and Generation Skipping Taxes. . . . . . . . . . . . . . . . . .
Diversification Requirements. . . . . . . . . . . . . . . . . . . . . .
Ownership of the Assets in the Separate Account . . . . . . . . . . . .
Life Insurance Purchased for Use in Split Dollar Arrangements . . . . .
Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . . . .
Non-Individual Ownership of Contracts . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Life Insurance Purchases by Nonresident Aliens and Foreign Companies. .
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
REGISTRATION STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Contracts 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.
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SUMMARY
THE CONTRACT
The Contracts are life insurance contracts with death benefits, cash values, and
other traditional life insurance features. The Contracts 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 premiums have been allocated. The Contracts are credited
with units ("Accumulation Units") to calculate cash values. The Contract Owner
may transfer the cash values among the Funds.
The Contracts can be issued on a single life or "last survivor" basis. For a
discussion of how last survivor Contracts operate differently from single life
Contracts, see "Last Survivor Contracts," page ___.
THE SEPARATE ACCOUNT AND THE FUNDS
Separate Account Five ("Separate Account") funds the variable life insurance
Contracts offered by this prospectus. Hartford Life 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 Contracts
currently offer sixteen (16) sub-accounts ("Sub-Accounts"), each investing
exclusively in a Fund. If an initial premium is submitted with an application
for a Contract, it will be allocated, within three business days of receipt at
Hartford Life's Home Office, to the PCM Money Market Fund Sub-Account. After
the expiration of the Right to Cancel Period, the values in PCM Money Market
Fund Sub-Account will be allocated to one or more of the Funds as specified in
the Contract Owner's application. See "The Contract - Allocation of Premiums,"
page ___.
Currently, the Funds of Putnam Variable Trust available under the Contracts are:
Putnam VT Asia Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam VT
Global Asset Allocation Fund, Putnam VT Global Growth Fund, Putnam VT Growth and
Income 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 Money Market Fund, Putnam VT New Opportunities
Fund, Putnam VT New Value 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. Applicants should read the prospectus for the Funds
accompanying this prospectus in connection with the purchase of a Contract. The
investment objectives of the Funds are as set forth in "The Separate Account,"
page ___.
The following table shows operating expenses of the Funds in 1995:
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ANNUAL FUND OPERATING EXPENSES
(AS PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
Total Fund
Management Other Operating
Fees Expenses Expenses
------------------------------------------
<S> <C> <C> <C>
Putnam VT Asia Pacific Growth Fund (1) 0.80% 0.90% 1.70%
Putnam VT Diversified Income Fund 0.70% 0.15% 0.85%
Putnam VT Global Asset Allocation Fund 0.70% 0.14% 0.84%
Putnam VT Global Growth Fund 0.60% 0.15% 0.75%
Putnam VT Growth and Income Fund 0.52% 0.05% 0.57%
Putnam VT High Yield Fund 0.70% 0.09% 0.79%
Putnam VT International Growth Fund (2) 0.80% 0.18% 0.98%
Putnam VT International Growth and (2) 0.80% 0.17% 0.97%
Income Fund
Putnam VT International New (2) 1.20% 0.19% 1.39%
Opportunities Fund
Putnam VT Money Market Fund 0.45% 0.12% 0.57%
Putnam VT New Opportunities Fund 0.70% 0.14% 0.84%
Putnam VT New Value Fund (2) 0.70% 0.13% 0.83%
Putnam VT U.S. Government and High Quality
Bond Fund 0.61% 0.09% 0.70%
Putnam VT Utilities Growth and Income Fund (3) 0.70% 0.08% 0.78%
Putnam VT Vista Fund (2) 0.65% 0.16% 0.81%
Putnam VT Voyager Fund 0.62% 0.06% 0.68%
</TABLE>
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(1) The annualized total expenses and management fees shown above for the
Putnam VT Asia Pacific Growth Fund reflect the termination of an expense
limitation in effect for the period. Actual annualized management fees and
total expenses would have been 0.33% and 1.22%, respectively.
(2) Putnam VT International Growth Fund, Putnam VT International Growth
and Income Fund, Putnam VT International New Opportunities Fund, Putnam VT
New Value Fund, and Putnam VT Vista Fund are new funds; operating expenses
are based on annualized estimates of such expenses to be incurred in the
current fiscal year.
(3) On July 11, 1996, shareholders approved an increase in the fees
payable to Putnam Management under the Management Contract for the Putnam
VT Utilities Growth and Income Fund. The management fees and total
expenses shown in the table have been restated to reflect the increase.
Actual management fees and total expenses were 0.60% and 0.68%,
respectively.
The investment adviser for all the Funds is Putnam Investment Management, Inc.
See "The Separate Account," page ___.
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PREMIUMS
The Contract permits the Contract Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Contract 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 45 and 80 who pay an initial premium
of 100% of the Guideline Single Premium are eligible for simplified underwriting
without a medical examination if they meet simplified underwriting standards as
evidenced in their responses in the application. For Contract Owners who pay an
initial premium of 80% or 90% of the Guideline Single Premium or who are below
age 45 or above age 80, standard 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 Contract to fail to meet the definition of a life
insurance contract under Section 7702 of the Code. Hartford Life may require
evidence of insurability for any additional premiums which increase the Coverage
Amount. Generally, the minimum initial premium Hartford Life will accept is
$10,000. Hartford Life may accept less than $10,000 under certain
circumstances. No premium will be accepted which does not meet the tax
qualification guidelines for life insurance under the Code.
DEDUCTIONS AND CHARGES
On the Contract Date and on each Monthly Activity Date, Hartford Life will
deduct a Deduction Amount from the Account Value. The Deduction Amount will be
made pro rata respecting each Sub-Account attributable to the Contract. The
Deduction Amount includes a cost of insurance charge, tax expense charge,
administrative charge and a mortality and expense risk charge. The monthly cost
of insurance charge is to cover Hartford Life's anticipated mortality costs. In
addition, Hartford Life will deduct monthly from the Account Value a tax expense
charge equal to an annual rate of 0.40% for the first ten Contract Years. This
charge compensates Hartford Life for premium taxes imposed by various states and
local jurisdictions and for federal taxes imposed under Section 848 of the Code.
The charge includes a premium tax deduction of 0.25% and a federal tax deduction
of 0.15%. The premium tax deduction represents an average premium tax of 2.5%
of premiums over ten years. Hartford Life will deduct from the Account Value
attributable to the Separate Account a monthly administrative charge equal to an
annual rate of 0.40%. This charge compensates Hartford Life for administrative
expenses incurred in the administration of the Separate Account and the
Contracts. Hartford Life will also deduct from the Account Value attributable
to the Separate Account a monthly charge equal to an annual rate of 0.90% for
the mortality risks and expense risks Hartford Life assumes in relation to the
variable portion of the Contracts. If the Cash Surrender Value is not
sufficient to cover a Deduction Amount due on any Monthly Activity Date the
Contract may lapse. See "Deductions and Charges - Monthly Deductions," page ___
and "Contract Benefits and Rights - Lapse and Reinstatement," page ___.
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If the Account Value on a Contract Anniversary is less than $50,000, Hartford
Life will deduct on such date an Annual Maintenance Fee of $30. This fee will
help reimburse Hartford Life for administrative and maintenance costs of the
Contracts. See "Deductions and Charges - Annual Maintenance Fee," page___.
Hartford Life may set up a provision for income taxes against the assets of the
Separate Account. See "Deductions and Charges - Charges Against The Separate
Account," page ___ and "Federal Tax Considerations," page ___.
Applicants should review the prospectuses for the Funds which accompany this
prospectus for a description of the charges assessed against the assets of the
Funds.
Upon surrender of the Contract and partial withdrawals in excess of the Annual
Withdrawal Amount, a contingent deferred sales charge may be assessed. In
Contract Years 1 through 3, this charge is 7.5% of surrendered Account Value
attributable to premiums paid. In Contract Years 4 through 5, this charge is
6%. In Contract Years 6 through 7, this charge is 4%. In Contract Years 8
through 9, this charge is 2%. After the 9th Contract Year, there is no charge.
The contingent deferred sales charge is imposed to cover a portion of the sales
expense incurred by Hartford Life in distributing the Contracts. This expense
includes agents commissions, advertising and the printing of prospectuses. See
"Deductions and Charges - Contingent Deferred Sales Charge," page ___.
During the first nine Contract Years, an additional premium tax charge will be
imposed on surrender or partial withdrawals. See "Deductions and Charges -
Premium Tax Charges," page ___.
For a discussion of the tax consequences of surrender of the Contract or a
partial withdrawal, see "Federal Tax Considerations," page ___.
DEATH BENEFIT
The Contracts provide for a Face Amount which is the minimum Death Benefit under
the Contract. The Death Benefit may be greater than the Face Amount. At the
death of the Insured, we will pay the Death Proceeds to the beneficiary. The
Death Proceeds equal the Death Benefit less any Indebtedness under the Contract.
See "Contract Benefits and Rights - Death Benefit," page ___.
ACCOUNT VALUE
The Account Value of the Contract will increase or decrease to reflect the
investment experience of the Funds applicable to the Contract and deductions for
the monthly Deduction Amount. There is no minimum guaranteed Account Value and
the Contract Owner bears the risk of the investment in the Funds. See "Contract
Benefits and Rights - Account Value," page ___.
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CONTRACT LOANS
A Contract Owner may obtain one or both of two types of cash loans from Hartford
Life. Both types of loans are secured by the Contract. 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 difference of the Account Value less any
contingent deferred sales charge and due and unpaid Deduction Amount. See
"Contract Benefits and Rights - Contract Loans," page ___.
LAPSE
Under certain circumstances a Contract may terminate if the Cash Surrender Value
on any Monthly Activity Date is less than the required Monthly Deduction Amount.
Hartford Life will give written notice to the Contract Owner and a 61 day grace
period during which additional amounts may be paid to continue the Contract.
See "Contract Benefits and Rights - Contract Loans," page ___ and "Lapse and
Reinstatement," page ___.
CANCELLATION AND EXCHANGE RIGHTS
An applicant has a limited right to return his or her Contract for cancellation.
If the applicant returns the Contract, by mail or hand delivery, to Hartford
Life or to the agent who sold the Contract, to be cancelled within 10 days after
delivery of the Contract to the applicant (in certain cases, this free-look
period is longer), Hartford Life will return to the applicant within 7 days
thereafter the greater of the premiums paid for the Contract or the sum of
(1) the Account Value on the date the returned Contract is received by Hartford
Life or its agent and (2) any deductions under Contract or by the Funds for
taxes, charges or fees.
In addition, once the Contract is in effect it may be exchanged during the first
24 months after its issuance for a permanent life insurance contract on the life
of the Insured without submitting proof of insurability. See "Contract Benefits
and Rights - Cancellation and Exchange Rights," page ___.
TAX CONSEQUENCES
The current Federal tax law generally excludes all death benefit payments from
the gross income of the Contract beneficiary. The Contracts generally will be
treated as modified endowment contracts. This status does not affect the
Contracts' 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 Contract (generally, the excess of Account Value over
premiums paid) and may be subject to a 10% penalty tax. See "Federal Tax
Considerations," page ___.
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THE COMPANY
Hartford Life Insurance Company ("Hartford Life") was originally incorporated
under the laws of Massachusetts on June 5, 1902. It was subsequently
redomiciled to Connecticut. It is a stock life insurance company engaged in the
business of writing health and life insurance, both individual and group, in all
states of the United States and the District of Columbia. The offices of
Hartford Life are located in Simsbury, Connecticut; however, its mailing address
is P.O. Box 2999, Hartford, CT 06104-2999.
Hartford Life is ultimately 100% owned by Hartford Fire Insurance Company, one
of the largest multiple lines insurance carriers in the United States. On
December 20, 1995, Hartford Fire Insurance Company became an independent,
publicly traded corporation.
Hartford Life is rated A+ (superior) by A.M. Best and Company, Inc., on the
basis of its financial soundness and operating performance. Hartford Life is
rated AA by Standard & Poor's and AA+ by Duff and Phelps on the basis of its
claims paying ability. These ratings do not apply to the investment performance
of the Sub-Accounts of the Separate Account The ratings apply to Hartford
Life's ability to meet its insurance obligations, including those under the
Contract.
Hartford Life is subject to Connecticut law governing insurance companies and is
regulated and supervised by the Connecticut Commissioner of Insurance. An
annual statement in a prescribed form must be filed with that Commissioner on or
before March 1 in each year covering the operations of Hartford Life for the
preceding year and its financial condition on December 31 of such year. Its
books and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted by
the National Association of Insurance Commissioners ("NAIC") at least once in
every four years. In addition, Hartford Life is subject to the insurance laws
and regulations of any jurisdiction in which it sells its insurance contracts.
Hartford Life is also subject to various Federal and State securities laws and
regulations.
THE SEPARATE ACCOUNT
GENERAL
Separate Account Five ("Separate Account") is a separate account of Hartford
Life established on August 17, 1994 pursuant to the insurance laws of the State
of Connecticut and 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 Contract Owners and persons entitled to
payments under the Contracts. The assets for the Separate Account are not
chargeable with liabilities arising out of any other business which Hartford
Life may conduct.
FUNDS
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The underlying investment for the Contracts are shares of Putnam Variable Trust,
an open-end series investment company with multiple portfolios ("Funds"). 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 Life reserves the
right, subject to compliance with the law, to offer additional funds with
differing investment objectives. There is no assurance that any of the Funds
will achieve its stated objectives.
PUTNAM VT ASIA PACIFIC GROWTH FUND
Seeks capital appreciation by investing primarily in securities of companies
located in Asia and in the Pacific Basin.
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: U.S.
Government Sector, High Yield Sector (which invests primarily in what are
commonly referred to as "junk bonds"), and International Sector. See the
special considerations for investments in high yield securities described in the
Fund prospectus.
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 common stock
portfolio.
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 HIGH YIELD FUND
Seeks high current income by investing primarily in high-yielding, lower-rated
fixed income securities (commonly referred to as "junk bonds"), constituting a
diversified portfolio which Putnam Investment Management, Inc. ("Putnam
Management") believes does not involve undue risk to income or principal.
Capital growth is a secondary objective when consistent with high current
income. See the special considerations for investments in high yield securities
described in the Fund prospectus.
PUTNAM VT INTERNATIONAL GROWTH FUND
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Seeks capital appreciation by investing primarily equity securities of companies
located in a country other than the United States.
PUTNAM VT INTERNATIONAL GROWTH AND INCOME FUND
Seeks capital growth, with current income as a secondary objective, by investing
primarily in common stocks with potential for capital growth principally traded
on markets outside the United States.
PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND
Seeks long term capital appreciation by investing principally in equity
securities of companies in sectors of economies outside of the United States
which Putnam Management believes possess above-average growth potential.
PUTNAM VT MONEY MARKET FUND
Seeks to achieve as high a level 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 U.S. GOVERNMENT AND HIGH QUALITY BOND FUND
Seeks current income consistent with preservation of capital by investing
primarily in securities issued or 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 Standard & Poor's or Moody's 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
securities issued by
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companies in the public utilities industries.
PUTNAM VT VISTA FUND
Seeks capital appreciation by investing in a diversified portfolio of common
stocks which have the potential for above-average capital appreciation.
PUTNAM VT VOYAGER FUND
Aggressively seeks capital appreciation primarily from a portfolio of common
stocks of companies that which Putnam Management believes have potential for
capital appreciation which is significantly greater than that of market
averages.
Putnam VT Asia Pacific Growth Fund, Putnam VT Diversified Income Fund, Putnam
VT Global Growth Fund, Putnam VT Growth and Income 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 Money
Market Fund, Putnam VT New Opportunities Fund, Putnam VT New Value 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 Putnam Funds 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 contracts. A full description of the Funds, their
investment objectives, policies and restrictions, risks, charges and expenses
and other aspects of their operation is contained in the accompanying Trust
Prospectus which should be read in conjunction with this Prospectus before
investing, and in the Trust 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 Life 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 Board of Trustees of the Funds
were to conclude that separate funds should be established for variable life and
variable annuity separate accounts, the variable annuity Contract holders would
not bear any expenses attendant upon establishment of such separate funds.
INVESTMENT ADVISER
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Putnam Management, One Post Office Square, Boston, Massachusetts, 02109, serves
as the investment manager for the Funds. An affiliate, The 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 Trustees of the Trust, 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 Trust Prospectus for a more complete
description of Putnam Management and the respective fees of the Funds.
THE CONTRACT
APPLICATION FOR A CONTRACT
Individuals wishing to purchase a Contract must submit an application to
Hartford Life. A Contract will be issued only on the lives of insureds age 90
and under who supply evidence of insurability satisfactory to Hartford Life.
Acceptance is subject to Hartford Life's underwriting rules and Hartford Life
reserves the right to reject an application for any reason. IF AN APPLICATION
FOR A CONTRACT 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 LIFE. No change in the terms or conditions of a Contract will be
made without the consent of the Contract Owner.
The Contract will be effective on the Contract Date only after Hartford Life has
received all outstanding delivery requirements and received the initial premium.
The Contract Date is the date used to determine all future cyclical transactions
on the Contract, e.g., Monthly Activity Date, Contract Months and Contract
Years. The Contract Date may be prior to, or the same as, the date the Contract
is issued ("Issue Date").
If the Coverage Amount is over then current limits established by Hartford Life,
the initial payment will not be accepted with the application. In other cases
where we receive the initial payment with the application, we 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 Contract delivery we will require a sufficient
payment to place the insurance in force.
PREMIUMS
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The Contract permits the Contract Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Contract 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 45 and 80 who pay an initial premium of 100%
of the Guideline Single Premium (subject to then current premium limits) are
eligible for simplified underwriting without a medical examination if they meet
simplified underwriting standards as evidenced in their responses in the
application. For Contract Owners who pay an initial premium of 80% or 90% of
the Guideline Single Premium or who are below age 45 or above age 80, standard
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 Contract
to fail to meet the definition of a life insurance contract under Section 7702
of the Code. Hartford Life may require evidence of insurability for any
additional premiums which increase the Coverage Amount. Generally, the minimum
initial premium Hartford Life will accept is $10,000. Hartford Life may accept
less than $10,000 under certain circumstances. No premium will be accepted which
does not meet the tax qualification guidelines for life insurance under the
Code.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the initial
premium at Hartford Life's Home Office, Hartford Life will allocate the entire
premium to the PCM Money Market Fund Sub-Account. After the expiration of the
Right To Cancel Period the Account Value in the PCM Money Market Fund Sub-
Account will be allocated among the Funds in whole percentages to purchase
Accumulation Units in the applicable Sub-Accounts as the Contract 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 Contract 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 Contract
(including the initial allocation to the PCM Money Market Fund Sub-Account) will
be 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
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
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corresponding Fund at the beginning of the Valuation Period. Applicants should
refer to the prospectuses for the Funds which accompany 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 Contract. See ALSO, "Contract Benefits and
Rights - Account Value," page ___.
All valuations in connection with a Contract, e.g., with respect to determining
Account Value and Cash Surrender Value and in connection with Contract Loans, or
calculation of Death Benefits, or with respect to determining the number of
Accumulation Units to be credited to a Contract with each premium, other than
the initial premium, will be made on the date the request or payment is received
by Hartford Life 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
MONTHLY DEDUCTIONS
On the Contract Date, and on each Monthly Activity Date after the Contract Date,
Hartford Life will deduct an amount ("Deduction Amount") to cover charges and
expenses incurred in connection with a Contract. Each monthly Deduction Amount
will be deducted pro rata from each Sub-Account attributable to the Contract
such that the proportion of Account Value of the Contract 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
Contract may lapse. See "Contract Benefits and Rights - Lapse and
Reinstatement," page ___. The following is a summary of the monthly deductions
and charges which constitute the Deduction Amount:
COST OF INSURANCE CHARGE: The cost of insurance charge covers Hartford Life's
anticipated mortality costs for standard and substandard risks. Current cost of
insurance rates are lower after the 10th Contract Year and are based on whether
100%, 90% or 80% of the Guideline Single Premium has been paid. 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 Contract Date or any Monthly Activity Date. For standard
risks, the guaranteed cost of insurance rate is based on the 1980 Commissioners
Standard Ordinary Mortality Table, age last birthday. (Unisex rates may be
required in some states.) A table of guaranteed cost of insurance rates per
$1,000 will be included in each Contract; however, Hartford Life reserves the
right to use rates less than those shown in the table. Substandard risks 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 Mortality Table, age
last birthday. The multiple will be based on the insured's substandard rating.
The Coverage Amount is first set on the Contract 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.
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The Coverage Amount may be adjusted to continue to qualify the Contracts as life
insurance contracts under the current Federal tax law. Under that law, the
Minimum Coverage Amount is a stated percentage of the Account Value of the
Contract 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 = $30,000
Insured's attained age = 40
Minimum Coverage Amount percentage for age 40 = 150%
On the Monthly Activity Date, the Coverage Amount is $70,000. This is
calculated by subtracting the Account Value on the Monthly Activity Date
($30,000) 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 $45,000 (150% of $30,000). Since $45,000
is less than the Face Amount less the Account Value ($70,000), no adjustment is
necessary. Therefore, the Coverage Amount will be $70,000.
Assume that the Account Value in the above example was $50,000. The Minimum
Coverage Amount would be $75,000 (150% of $50,000). Since this is greater than
the Face Amount less the Account Value ($50,000), the Coverage Amount for the
Contract Month is $75,000. (For an explanation of the Death Benefit, see
"Contract Benefits and Rights" on page ___.)
Because the Account Value and, as a result, the Coverage Amount under a Contract
may vary from month to month, the cost of insurance charge may also vary on each
Monthly Activity Date.
TAX EXPENSE CHARGE: Hartford Life will deduct monthly from the Account Value a
tax expense charge equal to an annual rate of 0.40% for the first ten Contract
Years. This charge compensates Hartford Life for premium taxes imposed by
various states and local jurisdictions and for federal taxes imposed under
Section 848 of the Code. The charge includes a premium tax deduction of 0.25%
and a federal tax deduction of 0.15%. The 0.25% premium tax deduction over ten
Contract Years approximates Hartford Life'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 Life does not expect to make a profit from this deduction. The 0.15%
federal tax deduction helps reimburse Hartford Life for approximate expenses
incurred from federal taxes under Section 848 of the Code. The federal tax
deduction is a factor Hartford Life must use when computing the maximum sales
load chargeable under Securities and Exchange Commission rules.
ADMINISTRATIVE CHARGE: Hartford Life will deduct monthly from the Account Value
attributable to
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the Separate Account an administrative charge equal to an annual rate of 0.40%.
This charge compensates Hartford Life for administrative expenses incurred in
the administration of the Separate Account and the Contracts.
MORTALITY AND EXPENSE RISK CHARGE: Hartford Life will deduct monthly from the
Account Value attributable to the Separate Account a charge equal to an annual
rate of 0.90% for the mortality risks and expense risks Hartford Life assumes in
relation to the variable portion of the Contracts. The mortality risk assumed
is that the cost of insurance charges specified in the Contract will be
insufficient to meet claims. Hartford Life 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 Life receives written
notice of death. The expense risk assumed is that expenses incurred in issuing
and administering the Contracts will exceed the administrative charges set in
the Contract. Hartford Life 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 Contracts and the proceeds of the
contingent deferred sales charge.
ANNUAL MAINTENANCE FEE
If the Account Value on a Contract Anniversary is less than $50,000, Hartford
Life will deduct on such date an Annual Maintenance Fee of $30. This fee will
help reimburse Hartford Life for administrative and maintenance costs of the
Contracts. The sum of the monthly administrative charges and the annual
maintenance fee will not exceed the cost Hartford Life incurs in providing
administrative services under the Contracts.
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 Life may, however,
make such a charge in the future. Charges for other taxes, if any, attributable
to the Separate Account may also be made.
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 prospectus for the Funds.
CONTINGENT DEFERRED SALES CHARGE
Upon surrender of the Contract and partial withdrawals in excess of the Annual
Withdrawal Amount, a contingent deferred sales charge may be assessed. In
Contract Years 1 through 3, this charge is 7.5% of surrendered Account Value
attributable to premiums paid. In Contract Years 4 through 5, this charge is
6%. In Contract Years 6 through 7, this charge is 4%. In Contract Years 8
through 9, this charge is 2%. After the 9th Contract Year, there is no charge.
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In determining the contingent deferred sales charge and the additional
premium tax charge discussed below, any surrender or partial withdrawal
during the first ten Contract Years will be deemed first from earnings and
then from premiums paid. If an amount equal to all premiums paid has been
withdrawn, no charge will be assessed on a withdrawal of the remaining
Account Value.
The contingent deferred sales charge is imposed to cover a portion of the
sales expense incurred by Hartford Life in distributing the Contracts. This
expense includes agents commissions, advertising and the printing of
prospectuses.
See "Contract Benefits and Rights - Amount Payable on Surrender of the
Contract," page ___.
PREMIUM TAX CHARGE
During the first nine Contract Years, an additional premium tax charge will
be imposed on surrender or partial withdrawals. The additional premium tax
charge is shown below, as a percent of Account Value, at the end of each
Contract Year:
CONTRACT
YEAR RATE
---- ----
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%
After the ninth Contract Year, no additional premium tax charge will be
imposed.
CONTRACT BENEFITS AND RIGHTS
DEATH BENEFIT
While in force, the Contract provides for the payment of the Death Proceeds
to the named beneficiary when the Insured under the Contract 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
Contract. Therefore, an increase in Account Value may increase the Death
Benefit. However, because the Death Benefit will never
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be less than the Face Amount, a decrease in Account Value may decrease the
Death Benefit but never below the Face Amount.
EXAMPLES:
-------- A B
-------- --------
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%
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 we
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 - Payment Options," page ____.
ACCOUNT VALUE
The Account Value of a Contract 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 Contract is related to the net asset value
of the Funds to which premiums on the Contract have been allocated. The
Account Value on any Valuation Day is calculated by multiplying the number of
Accumulation Units credited to the Contract 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 Contract and the
value of the Loan Account. See "The Contract - Accumulation Unit Values,"
page ____.
TRANSFER OF ACCOUNT VALUE
While the Contract remains in effect and subject to Hartford Life's transfer
rules then in effect, the Contract Owner may request that part or all of the
Account Value of a particular Sub-Account be transferred to other
Sub-Accounts. Hartford Life reserves the right to restrict the number of such
transfers to no more than 12 per Contract 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
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attorney. Telephone transfers may not be permitted in some states. The
policy of Hartford Life 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 Life will employ reasonable
procedures to confirm that instructions communicated by telephone are
genuine; otherwise, Hartford Life may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures Hartford Life
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 Life may modify the right to reallocate Account Value among the
Sub-Accounts if Hartford Life determines, in its sole discretion, that the
exercise of that right by one or more Contract Owners is, or would be, to the
disadvantage of other Contract 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 Contract 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 Life considers to be disadvantageous
to other Contract 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 Life 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 Life receives the transfer request.
CONTRACT LOANS
While the Contract is in effect, a Contract 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 Life.
Both types of loans are secured by the Contract. The aggregate loans
(including the currently applied for loan) may not exceed at the time a loan
is requested 90% of the Account Value less any contingent deferred sales
charge and due and unpaid Deduction Amount.
The loan amount will be transferred pro rata from each Sub-Account
attributable to the Contract (unless the Contract Owner specifies otherwise)
to the Loan Account. The amounts allocated to the Loan Account will bear
interest at a rate of 4% per annum (6% for "Preferred Loans"). The amount of
the Loan Account that equals the difference between the Account Value and the
total of all premiums paid under the Contract is considered a "Preferred
Loan." The loan interest rate that Hartford Life 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.
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If the aggregate outstanding loan(s) secured by the Contract exceeds the
Account Value of the Contract less any contingent deferred sales charges and
due and unpaid Deduction Amount, Hartford Life will give written notice to
the Contract Owner that unless Hartford Life receives an additional payment
within 61 days to reduce the aggregate outstanding loan(s) secured by the
Contract, the Contract may lapse.
All or any part of any loan secured by a Contract may be repaid while the
Contract 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 Contract 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 Contract will be reinstated. See "Contract Benefits and Rights -
Lapse and Reinstatement," page ____.
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 4% per annum, the annual
interest rate for amounts held in the Loan Account, a Contract 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 4% per annum, the Contract 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.
AMOUNT PAYABLE ON SURRENDER OF THE CONTRACT
While the Contract is in effect, a Contract Owner may elect, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), to fully surrender the Contract. Upon surrender, the Contract
Owner will receive the Cash Surrender Value determined as of the day Hartford
Life receives the Contract Owner's written request or the date requested by
the Contract Owner whichever is later. The Cash Surrender Value equals the
Account Value less any contingent deferred sales charges and additional
premium tax charge and all Indebtedness. Hartford Life will pay the Cash
Surrender Value of the Contract within seven days of receipt by Hartford Life
of the written request or on the effective surrender date requested by the
Contract Owner, whichever is later. The Contract will terminate on the date
of receipt of the written request, or the date the Contract Owner requests
the surrender to be effective, whichever is later. For a discussion of the
tax consequences of surrendering the Contract, see "Federal Tax
Considerations," page ___.
If the Contract Owner chooses to apply the surrender proceeds to a payment
option (see "Other Matters - Payment Options," page ___), the contingent
deferred sales 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 contingent deferred sales charge.
However, the additional premium tax charge, if applicable, will be deducted
from the surrender proceeds to be applied, and amounts withdrawn from Options
1, 5 or 6 will be subject to the contingent deferred
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sales charge, if applicable.
PARTIAL WITHDRAWALS
While the Contract is in effect, a Contract Owner may elect, by written
request, to make partial withdrawals from the Cash Surrender Value. The Cash
Surrender Value, after partial withdrawal, must at least equal Hartford
Life'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 Contract Owner instructs
otherwise. The Face Amount will be reduced proportionate to the reduction in
the Account Value due to the partial withdrawal. Partial withdrawals will be
deemed to be first from earnings, if any, and then from premiums paid.
Partial withdrawals in excess of the Annual Withdrawal Amount will be subject
to the contingent deferred sales charge and any additional premium tax
charges. See "Deductions and Charges -Contingent Deferred Sales Charge,
Premium Tax Charge." For a discussion of the tax consequences of partial
withdrawals, see "Federal Tax Considerations," page ___.
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Contract Date on which the Insured is age 100), on surrender of the Contract
to Hartford Life, Hartford Life will pay to the Contract Owner the Cash
Surrender Value. In such case, the Contract will terminate and Hartford Life
will have no further obligations under the Contract. (The Maturity Date may
be extended by rider where approved, but see "Income Taxation of Contract
Benefits.")
LAPSE AND REINSTATEMENT
The Contract will remain in effect until the Cash Surrender Value is
insufficient to cover a Deduction Amount due on a Monthly Activity Date.
Hartford Life will notify the Contract Owner of the deficiency in writing and
will provide a 61 day period ("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 Contract 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 Contract dies during the Grace Period, the Death Proceeds
payable under the Contract will be reduced by the Deduction Amount(s) due and
unpaid. See "Contract Benefits and Rights - Death Benefit," page ___.
If the Contract lapses, the Contract Owner may apply for reinstatement of the
Contract by payment of the reinstatement premium (and any applicable charges)
shown in the Contract. A request for reinstatement may be made within five
years of lapse. If a loan was outstanding at the time of lapse, Hartford
Life will require repayment of the loan before permitting reinstatement. In
addition, Hartford Life reserves the right to require evidence of
insurability satisfactory to Hartford Life.
<PAGE>
- 27 -
CANCELLATION AND EXCHANGE RIGHTS
An Applicant has a limited right to return a Contract for cancellation. If
the Contract is returned, by mail or personal delivery to Hartford Life or to
the agent who sold the Contract, to be cancelled within 10 days after
delivery of the Contract to the Contract Owner (a longer free-look period is
provided in certain cases), Hartford Life will return to the Applicant within
7 days the greater of premiums paid for the Contract or the sum of (1) the
Account Value on the date the returned Contract is received by Hartford Life
or its agent and (2) any deductions under Contract or by the Funds for taxes,
charges or fees.
Once the Contract is in effect, it may be exchanged during the first 24
months after its issuance, for a non-variable flexible premium adjustable
life insurance contract offered by Hartford Life (or an affiliated company)
on the life of the Insured. No evidence of insurability will be required.
The new contract will have, at the election of the Contract Owner, either the
same Coverage Amount under the exchanged contract 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 contract. If a contract 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 Life 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 to an existing emergency as defined by
the Securities and Exchange Commission, or on any day the Commission has
ordered that the right of surrender of the Contracts be suspended for the
protection of Contract Owners, until such condition has ended.
LAST SURVIVOR CONTRACTS
The Contracts are offered on a single life and "last survivor" basis.
Contracts 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 Contracts 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 to die. See the last survivor illustrations in
"Appendix A," page ___.
2. To qualify for simplified underwriting under a last survivor
Contract, both Insureds must meet the simplified underwriting standards.
<PAGE>
- 28 -
3. For a last survivor Contract to be reinstated, both Insureds must be
alive on the date of reinstatement.
4. The Contract provisions regarding misstatement of age or sex, suicide and
incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor Contracts are
provided in "Federal Tax Considerations," page ___."
OTHER MATTERS
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, Hartford
Life will vote the shares of the Funds at regular and special meetings of the
shareholders of the Funds in accordance with instructions from Contract
Owners (or the assignee of the Contract, 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 Contract Owner is determined by
dividing the Contract Owner's interest in each Sub-Account by the net asset
value of the applicable shares of the Funds. Hartford Life will vote shares
for which no instructions have been given and shares which are not
attributable to Contract Owners (i.e. shares owned by Hartford Life) in the
same proportion as it votes shares for which it has received instructions.
If the Investment Company Act of 1940 or any rule promulgated thereunder
should be amended, however, or if Hartford Life's present interpretation
should change and, as a result, Hartford Life 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 Contract Owner (or the assignee) in the Funds
will be determined as follows: Contract Owners may cast one vote for each
full or fractional Accumulation Unit owned under the Contract 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
Contract Owner has taken a loan secured by the Contract, amounts transferred
from the Sub-Account(s) to the Loan Account in connection with the loan (See
"Contract Benefits and Rights - Contract Loans," page ____) will not be
considered in determining the voting interests of the Contract Owner.
Contract Owners should review the prospectuses for the Funds which accompany
this prospectus to determine matters on which shareholders may vote.
Hartford Life may, when required by state insurance regulatory authorities,
disregard voting instructions if the 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 contract for the Funds.
In addition, Hartford Life itself may disregard voting instructions in favor
of changes initiated by a Contract Owner in the investment policy or the
investment adviser of the Funds if Hartford Life
<PAGE>
- 29 -
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 Life does disregard voting instructions,
a summary of that action and the reasons for such action will be included in
the next periodic report to Contract Owners.
STATEMENTS TO CONTRACT OWNERS
Hartford Life will maintain all records relating to the Separate Account and
the Sub-Accounts. At least once each Contract Year, Hartford Life will send
to Contract Owners a statement showing the Coverage Amount and the Account
Value of the Contract (indicating the number of Accumulation Units credited
to the Contract in each Sub-Account and the corresponding Accumulation Unit
Value), and any outstanding loan secured by the Contract as of the date of
the statement. The statement will also show premium paid, and Deduction
Amounts under the Contract since the last statement, and any other
information required by any applicable law or regulation.
LIMIT ON RIGHT TO CONTEST
Hartford Life may not contest the validity of the Contract after it has been
in effect during the Insured's lifetime for two years from the Issue Date.
If the Contract 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 is contestable for 2 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 Contract.
PAYMENT OPTIONS
The surrender proceeds or Death Proceeds under the Contracts may be paid in a
lump sum or may be applied to one of Hartford Life's payment options. The
minimum amount that may be applied under a payment option is $5,000 unless
Hartford Life consents to a lesser amount. Under Options 2, 3 and 4, no
surrender or partial withdrawals are permitted after payments commence. Full
surrender or partial withdrawals may be made from Options 1 or 6, but they
are subject to the contingent deferred sales charge, if applicable. Only a
full surrender is allowed from Option 5. A surrender from Option 5 will also
be subject to the contingent deferred sales charge, if applicable.
We 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.
<PAGE>
- 30 -
The following options are available under the Contracts (Hartford Life may
offer other payment options):
OPTION 1: INTEREST INCOME
This option offers payments of interest, at the rate we declare, 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 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
Life.
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 Life, 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
5 to 30 years.
<PAGE>
- 31 -
Under this option, you may, at any time, request a full surrender and
receive, within seven days, the termination value of the Contract as
determined by Hartford Life.
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 Life.
Option 5 is an option that does not involve life contingencies.
OPTION 6: DEATH PROCEEDS REMAINING WITH HARTFORD LIFE
Proceeds from the Death Benefit left with Hartford Life. These proceeds will
remain in the Sub-Accounts to which they were allocated at the time of death
unless the beneficiary elects to reallocate them. Full or partial
withdrawals 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 Contract 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 Contract contains variable payment annuity tables derived from the 1983a
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
Contracts.
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
<PAGE>
- 32 -
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 Life
which is no less than the rate specified in the fixed payment annuity tables
in the Contract. The annuity payment will remain level for the duration of
the annuity.
Hartford Life will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the beneficiary in the application for the Contract. The
Contract Owner may change the beneficiary (unless irrevocably named) during
the Insured's lifetime by written request to Hartford Life. If no
beneficiary is living when the Insured dies, the Death Proceeds will be paid
to the Contract Owner if living; otherwise to the Contract Owner's estate.
ASSIGNMENT
The Contract may be assigned as collateral for a loan or other obligation.
Hartford Life 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 Contracts.
<PAGE>
- 33 -
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD LIFE, VOCATION OR EMPLOYMENT FOR
NAME, AGE YEAR OF ELECTION PAST 5 YEARS; OTHER DIRECTORSHIPS
- ----------------- ------------------------ ---------------------------------------
<S> <C> <C>
Louis J. Abdou Vice President, 1987 Vice President (1987-Present), Hartford Life.
53
Wendell J. Bossen Vice President, 1992** President (1992-Present), International Corporate
62 Marketing Group, Inc.; Executive Vice President (1984-1992), Mutual
Benefit.
Gregory A. Boyko Vice President, 1995 Vice President and Controller (1995-Present), Hartford
44 Life; Chief Financial Officer (1994-1995), IMG American Life; Senior
Vice President (1992-1994), Connecticut Mutual Life Insurance Company.
Peter W. Cummins Vice President, 1989 Vice President, Individual Annuity Operations
59 (1989-Present), Hartford Life.
Ann M. deRaismes Vice President, 1994 Vice President (1994-Present);
45 Assistant Vice President (1992); Director of Human Resources (1991-
Present), Hartford Life.
Timothy M. Fitch Vice President, 1995 Vice President (1995-Present); Assistant Vice President
43 (1993); Director (1991), Hartford Life.
Donald R. Frahm Chairman and Chief Chairman and Chief Executive Officer of the
64 Executive Officer, 1988 Hartford Insurance Group (1988-Present).
Director, 1988*
Bruce D. Gardner Vice President, 1996 Vice President (1996-Present); General Counsel and
45 Director, 1994* Corporate Secretary (1991-1996), Hartford Life.
Joseph H. Gareau Executive Vice President Executive Vice President and Chief Investment Officer,
49 and Chief Investment (1993-Present), Hartford Life; Senior Vice President
Officer, 1993 and Chief Investment Officer (1992), ITT Hartford's
Director, 1993* Property-Casualty Companies.
J. Richard Garrett Treasurer, 1994 Treasurer (1994-Present); Vice President (1993-
51 Vice President, 1993 Present) Hartford Life; Treasurer (1977), Hartford Insurance Group.
</TABLE>
<PAGE>
- 34 -
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD LIFE, VOCATION OR EMPLOYMENT FOR
NAME, AGE YEAR OF ELECTION PAST 5 YEARS; OTHER DIRECTORSHIPS
- ----------------- ------------------------ ---------------------------------------
<S> <C> <C>
John P. Ginnetti Executive Vice Executive Vice President and Director Asset
50 President, 1994 Management Services (1994-Present); Senior Vice
President, (1988), Hartford Life.
Lynda Godkin Assoc. General Counsel, Associate General Counsel and Corporate Secretary
42 Corporate Secretary, (1995-Present); Assistant General Counsel and
1995 Secretary (1994); Counsel (1990), Hartford Life.
Lois W. Grady Vice President, 1993 Vice President (1993-Present); Assistant Vice President
51 (1988), Hartford Life.
David A. Hall Senior Vice President Senior Vice President and Actuary (1992-Present),
42 and Actuary, 1992 Hartford Life.
Joseph Kanarek Vice President, 1991 Vice President (1991-Present), Hartford Life.
48
Robert A. Kerzner Vice President, 1994 Vice President (1994-Present); Regional Vice President
44 (1991); Life Sales Manager (1990), Hartford Life.
Kevin J. Kirk Vice President, 1992 Vice President (1992-Present); Assistant Vice
44 President; Assistant Director, Asset Management Services (1985);
Hartford Life.
Andrew W. Kohnke Vice President, 1992 Vice President (1992-Present); Assistant Vice
47 President (1989), Hartford Life.
Steven M. Maher Vice President and Vice President and Actuary (1993-Present); Assistant
41 Actuary, 1993 Vice President (1987), Hartford Life.
William B. Malchodi, Jr. Vice President, 1994 Vice President (1994-Present); Director of Taxes (1992-
45 Director or Taxes, 1992 Present); Assistant General Counsel and Assistant Director of Taxes
(1986), Hartford Insurance Company.
Thomas M. Marra Executive Vice President, Executive Vice President and Director Individual
37 1996 Life and Annuity Division (1996-Present); Senior
Director, 1994 *Vice President and Director, Individual Life and
Annuity Division (1993-1996); Director of Individual Annuities (1991),
Hartford Life.
</TABLE>
<PAGE>
- 35 -
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD LIFE, VOCATION OR EMPLOYMENT FOR
NAME, AGE YEAR OF ELECTION PAST 5 YEARS; OTHER DIRECTORSHIPS
- ----------------- ------------------------ ---------------------------------------
<S> <C> <C>
Robert F. Nolan Vice President, 1995 Vice President (1995-Present), Assistant Vice President
41 Hartford Life; Manager Public Relations (1986), Aetna
Life and Casualty Insurance Company.
Joseph J. Noto Vice President, 1989 Vice President (1989-Present), Hartford Life.
44
Leonard E. Odell, Jr. Senior Vice President, Senior Vice President (1994-Present); Vice President
51 1994 and Chief Actuary (1982), Hartford Life.
Director, 1994*
Michael C. O'Halloran Vice President, 1994 Vice President (1994-Present); Senior Associate
49 Associate General Counsel and Director (1988-Present), Law
General Counsel, 1988 Department, Hartford Fire Insurance Company.
Craig D. Raymond Vice President, 1993 Vice President and Chief Actuary (1994-Present); Vice
35 Chief Actuary, 1994 President (1993); Assistant Vice President (1992);
Actuary (1989-1994), Hartford Life.
Lowndes A. Smith President and Chief President and Chief Operating Officer (1989-Present),
56 Operating Officer, 1989 Hartford Life; Senior Vice President and Group
Director, 1981* Controller (1987), Hartford Insurance Group.
Edward J. Sweeney Vice President, 1993 Vice President (1993-Present); Chicago Regional
39 Manager (1985-1993), Hartford Life.
James E. Trimble Vice President and Vice President (1990-Present); Assistant Vice President
39 Actuary, 1990 (1987-1990), Hartford Life.
Raymond P. Welnicki Senior Vice President, Senior Vice President (1994-Present); Vice President
47 1993 (1993), Hartford Life; Board of Directors, Ethix Corp.,
Director, 1994* formerly employed by Aetna Life & Casualty.
Walter C. Welsh Vice President, 1995 Vice President (1995-Present); Assistant Vice President (1993),
49 Hartford Life.
James J. Westervelt Senior Vice President, Senior Vice President and Group Controller (1994-Present);
49 1994 Vice President and Group Controller (1989), Hartford Insurance Group.
Group Controller,
</TABLE>
<PAGE>
- 36 -
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS PROFESSION,
HARTFORD LIFE, VOCATION OR EMPLOYMENT FOR
NAME, AGE YEAR OF ELECTION PAST 5 YEARS; OTHER DIRECTORSHIPS
- ----------------- ------------------------ ---------------------------------------
<S> <C> <C>
Lizabeth H. Zlatkus Vice President, 1994 Vice President (1994-Present); Assistant Vice President
37 Director, 1994* (1992); Hartford Life; formerly Director, Hartford
Insurance Group.
</TABLE>
- --------------------------
* Denotes date of election to Board of Directors.
**ITT Hartford Affiliated Company.
<PAGE>
- 37 -
DISTRIBUTION OF THE CONTRACTS
Hartford Life intends to sell the Contracts in all jurisdictions where it is
licensed to do business. The Contracts will be sold by life insurance sales
representatives who represent Hartford Life 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 contracts
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 wholly-owned subsidiaries of Hartford Life. The
principal business address of HESCO and HSD is the same as Hartford Life.
The maximum sales commission payable to Hartford Life agents, independent
registered insurance brokers, and other registered broker-dealers is 7.0% of
initial and subsequent premiums. From time to time, Hartford Life may pay or
permit other promotional incentives, in cash or credit or other compensation.
Hartford Life may provide information on various topics to Contract Owners and
prospective Contract 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
Contracts 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 Life. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford Life. Hartford Life 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 Life'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 Life.
<PAGE>
- 38 -
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING TO
THE ACTUAL STATUS OF THE CONTRACT OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A
CONTRACT DESCRIBED HEREIN.
It should be understood that any detailed description of the Federal income tax
consequences regarding the purchase of these Contracts 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 Life 's understanding of current
Federal income tax laws as they are currently interpreted.
TAXATION OF HARTFORD LIFE AND THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford Life which is taxed as a
life insurance company under Subchapter L of the Internal Revenue Code ("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 "Contract Benefits and Right - Account Value," on
page ___). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Contract.
Hartford Life 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 Life 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 CONTRACT BENEFITS
For Federal income tax purposes, the Contracts 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 Contract Owner is generally not taxed on
increments in the contract value until the Contract is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Contract that is treated as life insurance. Hartford Life intends to monitor
premium levels to assure compliance with the Section 7702 requirements.
<PAGE>
- 39 -
During the first fifteen Contract 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 Contract.
The Maturity Date Extension Rider allows a Contract Owner to extend the Maturity
Date to the date of the Insured's death. If the Maturity Date of the Contract
is extended by rider, Hartford Life believes that the Contract 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 Contract 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 Contract Owner should consult a qualified tax adviser regarding the possible
adverse tax consequences resulting from an extension of the scheduled Maturity
Date.
LAST SURVIVOR CONTRACTS
Although Hartford Life believes that the last survivor Contracts 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 Contract does not meet the specified computational rules for the "seven-pay
test" under Section 7702A(c). Therefore, the Contract 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 Contract to be treated as a modified
endowment contract if no additional premiums are paid.
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, a loan, 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.
<PAGE>
- 40 -
All modified endowment contracts that are issued within any calendar year to the
same Contract 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
Contract Owner's estate for purposes of federal estate tax if the last surviving
Insured owned the Contract. If the Contract Owner was not the last surviving
Insured, the fair market value of the Contract would be included in the Contract
Owner's estate upon the Contract 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.
Federal estate tax is integrated with federal gift tax under a unified rate
schedule. In general, estates less than $600,000 will not incur a federal
estate tax liability. 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 Contract Owner (whether or not he or she is an Insured) transfers
ownership of the Contract 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 Contract. 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
Contract 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 Contract is not treated as a life
insurance contract, the Contract 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
<PAGE>
- 41 -
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 Contract Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford Life monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford Life
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 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
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 Life
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 Contract Owner could be
considered the owner of the assets for tax purposes. Hartford Life reserves the
right to modify the contracts, as necessary, to prevent Contract Owners from
being considered the owners of the assets in the separate accounts.
<PAGE>
- 42 -
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 Contract Owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF CONTRACTS
Legislation has recently been proposed which would limit certain of the tax
advantages now afforded non-individual owners of life insurance contracts.
Prospective Contract Owners which are not individuals should consult a tax
adviser to determine the status of this proposed legislation and its potential
impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Contract proceeds depend on the
circumstances of each Contract 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 advisor
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
<PAGE>
- 43 -
LEGAL PROCEEDINGS
There are no pending material legal proceedings affecting the Contracts, the
Separate Account or any of the Funds.
LEGAL MATTERS
Legal matters in connection with the issue and sale of flexible premium variable
life insurance contracts described in this Prospectus and the organization of
Hartford Life, its authority to issue the Contracts under Connecticut law and
the validity of the forms of the Contracts under Connecticut law and legal
matters relating to the Federal securities and income tax laws have been passed
on by Lynda Godkin, General Counsel of ITT Hartford Life Insurance Companies.
EXPERTS
The financial statements and schedules for Hartford Life included in this
Prospectus and elsewhere in the Registration Statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report hereon, and are included herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report. Reference is
made to said report of Hartford Life Insurance Company (the depositor), which
includes an explanatory paragraph with respect to the adoption of new account
standards changing the methods of accounting for debt and equity securities.
The principal business address of Arthur Andersen LLP is One Financial Plaza,
Hartford, Connecticut 06103.
The hypothetical Contract illustrations included in this Prospectus and
Registration Statement have been approved by Michael Winterfield, FSA, MAAA,
Director, Individual Annuity Inforce Management, for Hartford Life, and are
included in reliance upon his opinion as to their reasonableness.
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 Life, and the
Contracts.
<PAGE>
- 44 -
APPENDIX A
ILLUSTRATIONS OF BENEFITS
The tables in Appendix A illustrate the way in which a Contract 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 age 45, a female age 55 and a male age 65 with Face
Amounts of $40,161, $33,334 and $19,380, respectively, are illustrated for the
single life Contract. The illustrations for the last survivor Contract assume
male and female of equal ages, including age 55 and 65 for Face Amounts of
$44,053 and $27,778.
The death benefit and surrender value for a Contract 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 Contract
Years. They would also differ if any Contract loan were made during the period
of time illustrated.
The tables reflect the deductions of current Contract charges and guaranteed
Contract 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 Contract 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.
In addition, the death benefit and surrender value as of the end of each
Contract Year take into account the (1) tax expense charge equal to an annual
rate of 0.40% of Account Value for the first ten Contract Years; (2)
administrative charge equal to an annual rate of 0.40% of Account Value
attributable to the Separate Account; (3) mortality and expense risk charge
equal to an annual rate of 0.90% of Account Value attributable to the Separate
Account; and (4) any Contingent Deferred Sales Charge and premium tax charge
which may be applicable in the first nine Contract Years.
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 - Charges Against The Separate Account - Taxes,"
page ___).
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.
<PAGE>
- 45 -
Hartford Life 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 Life
Insurance Company 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.
<PAGE>
- 46 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 40,161 10,756 9,764 40,161
2 11,025 11,740 10,755 40,161 11,575 10,593 40,161
3 11,576 12,724 11,751 40,161 12,463 11,495 40,161
4 12,155 13,794 12,987 40,161 13,427 12,626 40,161
5 12,763 14,956 14,169 40,161 14,474 13,693 40,161
6 13,401 16,219 15,657 40,161 15,613 15,057 40,161
7 14,071 17,592 17,060 40,161 16,851 16,324 40,161
8 14,775 19,083 18,788 40,161 18,198 17,907 40,161
9 15,513 20,704 20,452 40,161 19,666 19,417 40,161
10 16,289 22,465 22,465 40,161 21,268 21,268 40,161
11 17,103 24,501 24,501 40,161 23,113 23,113 40,161
12 17,959 26,724 26,724 40,161 25,145 25,145 40,161
13 18,856 29,153 29,153 41,398 27,386 27,386 40,161
14 19,799 31,808 31,808 43,896 29,864 29,864 41,213
15 20,789 34,714 34,714 46,517 32,590 32,590 43,670
16 21,829 37,895 37,895 49,264 35,574 35,574 46,247
17 22,920 41,367 41,367 52,951 38,832 38,832 49,705
18 24,066 45,156 45,156 56,897 42,386 42,386 53,407
19 25,270 49,292 49,292 61,122 46,266 46,266 57,371
20 26,533 53,807 53,807 65,645 50,502 50,502 61,613
25 33,864 83,601 83,601 96,978 78,372 78,372 90,912
35 55,160 201,997 201,997 214,118 180,092 189,092 200,438
</TABLE>
*THESE VALUES REFLECT INVESTMENT RESULTS USING CURRENT COST OF I NSURANCE
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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 47 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 40,161 10,171 9,192 40,161
2 11,025 10,506 9,546 40,161 10,337 9,380 40,161
3 11,576 10,769 9,831 40,161 10,497 9,564 40,161
4 12,155 11,040 10,275 40,161 10,651 9,891 40,161
5 12,763 11,319 10,577 40,161 10,796 10,061 40,161
6 13,401 11,605 11,089 40,161 10,930 10,421 40,161
7 14,071 11,900 11,411 40,161 11,052 10,569 40,161
8 14,775 12,202 11,941 40,161 11,158 10,902 40,161
9 15,513 12,514 12,282 40,161 11,244 11,016 40,161
10 16,289 12,833 12,833 40,161 11,309 11,309 40,161
11 17,103 13,228 13,228 40,161 11,394 11,394 40,161
12 17,959 13,636 13,636 40,161 11,455 11,455 40,161
13 18,856 14,058 14,058 40,161 11,486 11,486 40,161
14 19,799 14,494 14,494 40,161 11,486 11,486 40,161
15 20,789 14,944 14,944 40,161 11,450 11,450 40,161
16 21,829 15,409 15,409 40,161 11,370 11,370 40,161
17 22,920 15,889 15,889 40,161 11,239 11,239 40,161
18 24,066 16,385 16,385 40,161 11,048 11,048 40,161
19 25,270 16,898 16,898 40,161 10,787 10,787 40,161
20 26,533 17,428 17,428 40,161 10,442 10,442 40,161
25 33,864 20,353 20,353 40,161 6,987 6,987 40,161
35 55,160 27,852 27,852 40,161 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTACT 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 CONTRACT 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.
<PAGE>
- 48 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 45 MALE
INITIAL FACE AMOUNT: $40,161
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 40,161 9,586 8,649 40,161
2 11,025 9,340 8,404 40,161 9,169 8,291 40,161
3 11,576 9,026 8,118 40,161 8,747 7,925 40,161
4 12,155 8,721 7,990 40,161 8,319 7,699 40,161
5 12,763 8,425 7,720 40,161 7,883 7,312 40,161
6 13,401 8,138 7,657 40,161 7,438 7,113 40,161
7 14,071 7,860 7,401 40,161 6,980 6,696 40,161
8 14,775 7,591 7,353 40,161 6,506 6,461 40,161
9 15,513 7,330 7,111 40,161 6,013 6,002 40,161
10 16,289 7,076 7,076 40,161 5,498 5,717 40,161
11 17,103 6,865 6,865 40,161 4,978 5,211 40,161
12 17,959 6,659 6,659 40,161 4,427 4,673 40,161
13 18,856 6,459 6,459 40,161 3,843 4,100 40,161
14 19,799 6,264 6,264 40,161 3,221 3,488 40,161
15 20,789 6,073 6,073 40,161 2,558 2,833 40,161
16 21,829 5,888 5,888 40,161 1,845 2,127 40,161
17 22,920 5,707 5,707 40,161 1,075 1,361 40,161
18 24,066 5,531 5,531 40,161 237 526 40,161
19 25,270 5,360 5,360 40,161 0 0 0
20 26,533 5,193 5,193 40,161 0 0 0
25 33,864 4,420 4,420 40,161 0 0 0
35 55,160 3,145 3,145 40,161 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 49 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 FEMALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 33,334 10,727 9,736 33,334
2 11,025 11,740 10,755 33,334 11,517 10,537 33,334
3 11,576 12,724 11,751 33,334 12,378 11,411 33,334
4 12,155 13,794 12,987 33,334 13,317 12,517 33,334
5 12,763 14,956 14,169 33,334 14,343 13,564 33,334
6 13,401 16,219 15,657 33,334 15,464 14,909 33,334
7 14,071 17,592 17,060 33,334 16,688 16,163 33,334
8 14,775 19,083 18,788 33,334 18,025 17,735 33,334
9 15,513 20,704 20,452 33,334 19,487 19,238 33,334
10 16,289 22,465 22,465 33,334 21,088 21,088 33,334
11 17,103 24,501 24,501 33,334 22,940 22,940 33,334
12 17,959 26,736 26,736 33,334 24,991 24,991 33,334
13 18,856 29,218 29,218 34,478 27,270 27,270 33,334
14 19,799 31,946 31,946 37,377 29,804 29,804 34,891
15 20,789 34,928 34,928 40,517 32,585 32,585 37,799
16 21,829 38,190 38,190 43,919 35,625 35,625 40,969
17 22,920 41,765 41,765 47,195 38,958 38,958 44,023
18 24,066 45,686 45,686 50,712 42,614 42,614 47,301
19 25,270 49,992 49,992 54,492 46,627 46,627 50,824
20 26,533 54,687 54,687 59,609 51,004 51,004 55,594
25 33,864 85,841 85,841 90,992 80,060 80,060 84,864
35 55,160 208,273 208,273 218,687 192,260 192,260 201,873
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 50 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 FEMALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 33,334 10,142 9,164 33,334
2 11,025 10,506 9,546 33,334 10,279 9,324 33,334
3 11,576 10,769 9,831 33,334 10,412 9,480 33,334
4 12,155 11,040 10,275 33,334 10,539 9,781 33,334
5 12,763 11,319 10,577 33,334 10,661 9,928 33,334
6 13,401 11,605 11,089 33,334 10,774 10,266 33,334
7 14,071 11,900 11,411 33,334 10,875 10,394 33,334
8 14,775 12,202 11,941 33,334 10,959 10,704 33,334
9 15,513 12,514 12,282 33,334 11,021 10,793 33,334
10 16,289 12,833 12,833 33,334 11,055 11,055 33,334
11 17,103 13,228 13,228 33,334 11,106 11,106 33,334
12 17,959 13,636 13,636 33,334 11,127 11,127 33,334
13 18,856 14,058 14,058 33,334 11,117 11,117 33,334
14 19,799 14,494 14,494 33,334 11,073 11,073 33,334
15 20,789 14,944 14,944 33,334 10,988 10,988 33,334
16 21,829 15,409 15,409 33,334 10,854 10,854 33,334
17 22,920 15,889 15,889 33,334 10,656 10,656 33,334
18 24,066 16,385 16,385 33,334 10,375 10,375 33,334
19 25,270 16,898 16,898 33,334 9,991 9,991 33,334
20 26,533 17,428 17,428 33,334 9,479 9,479 33,334
25 33,864 20,353 20,353 33,334 3,955 3,955 33,334
35 55,160 27,852 27,852 33,334 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 51 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 55 MALE
INITIAL FACE AMOUNT: $33,334
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 33,334 9,558 8,593 33,334
2 11,025 9,340 8,404 33,334 9,112 8,179 33,334
3 11,576 9,026 8,118 33,334 8,662 7,761 33,334
4 12,155 8,721 7,990 33,334 8,209 7,486 33,334
5 12,763 8,425 7,720 33,334 7,750 7,053 33,334
6 13,401 8,138 7,657 33,334 7,283 6,810 33,334
7 14,071 7,860 7,401 33,334 6,803 6,352 33,334
8 14,775 7,591 7,353 33,334 6,305 6,073 33,334
9 15,513 7,330 7,111 33,334 5,782 5,568 33,334
10 16,289 7,076 7,076 33,334 5,230 5,230 33,334
11 17,103 6,865 6,865 33,334 4,665 4,665 33,334
12 17,959 6,659 6,659 33,334 4,061 4,061 33,334
13 18,856 6,459 6,459 33,334 3,419 3,419 33,334
14 19,799 6,264 6,264 33,334 2,733 2,733 33,334
15 20,789 6,073 6,073 33,334 1,997 1,997 33,334
16 21,829 5,888 5,888 33,334 1,200 1,200 33,334
17 22,920 5,707 5,707 33,334 324 324 33,334
18 24,066 5,531 5,531 33,334 0 0 0
19 25,270 5,360 5,360 33,334 0 0 0
20 26,533 5,193 5,193 33,334 0 0 0
25 33,864 4,420 4,420 33,334 0 0 0
35 55,160 3,145 3,145 33,334 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 52 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,834 9,840 19,380 10,650 9,660 19,380
2 11,025 11,740 10,755 19,380 11,357 10,380 19,380
3 11,576 12,724 11,751 19,380 12,131 11,169 19,380
4 12,155 13,794 12,987 19,380 12,984 12,190 19,380
5 12,763 14,956 14,169 19,380 13,930 13,156 19,380
6 13,401 16,219 15,657 19,380 14,986 14,436 19,380
7 14,071 17,595 17,063 19,883 16,172 15,650 19,380
8 14,775 19,106 18,810 21,208 17,516 17,228 19,443
9 15,513 20,760 20,508 22,629 19,027 18,780 20,740
10 16,289 22,549 22,549 24,578 20,664 20,664 22,524
11 17,103 24,595 24,595 26,563 22,536 22,536 24,340
12 17,959 26,837 26,837 28,716 24,587 24,587 26,309
13 18,856 29,275 29,275 31,325 26,816 26,816 28,693
14 19,799 31,947 31,947 33,864 29,260 29,260 31,016
15 20,789 34,856 34,856 36,948 31,916 31,916 33,831
16 21,829 38,046 38,046 39,949 34,834 34,834 36,576
17 22,920 41,517 41,517 43,594 38,005 38,005 39,906
18 24,066 45,308 45,308 47,574 41,447 41,447 43,520
19 25,270 49,448 49,448 51,921 45,177 45,177 47,436
20 26,533 53,969 53,969 56,667 49,215 49,215 51,677
25 33,864 83,837 83,837 88,030 74,965 74,965 78,714
35 55,160 202,335 202,335 204,358 175,528 175,528 177,284
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 53 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,249 9,269 19,380 10,062 9,086 19,380
2 11,025 10,506 9,546 19,380 10,104 9,152 19,380
3 11,576 10,769 9,831 19,380 10,123 9,196 19,380
4 12,155 11,040 10,275 19,380 10,116 9,364 19,380
5 12,763 11,319 10,577 19,380 10,077 9,351 19,380
6 13,401 11,605 11,089 19,380 10,002 9,502 19,380
7 14,071 11,900 11,411 19,380 9,880 9,406 19,380
8 14,775 12,202 11,941 19,380 9,703 9,454 19,380
9 15,513 12,514 12,282 19,380 9,455 9,232 19,380
10 16,289 12,833 12,833 19,380 9,124 9,124 19,380
11 17,103 13,228 13,228 19,380 8,730 8,730 19,380
12 17,959 13,636 13,636 19,380 8,217 8,217 19,380
13 18,856 14,058 14,058 19,380 7,564 7,564 19,380
14 19,799 14,494 14,494 19,380 6,738 6,738 19,380
15 20,789 14,944 14,944 19,380 5,699 5,699 19,380
16 21,829 15,409 15,409 19,380 4,387 4,387 19,380
17 22,920 15,889 15,889 19,380 2,723 2,723 19,380
18 24,066 16,385 16,385 19,380 595 595 19,380
19 25,270 16,898 16,898 19,380 0 0 0
20 26,533 17,428 17,428 19,380 0 0 0
25 33,864 20,353 20,353 21,371 0 0 0
35 55,160 27,854 27,854 28,133 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 54 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
$10,000 INITIAL PREMIUM
ISSUE AGE 65 MALE
INITIAL FACE AMOUNT: $19,380
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,665 8,698 19,380 9,475 8,512 19,380
2 11,025 9,340 8,404 19,380 8,923 7,994 19,380
3 11,576 9,026 8,118 19,380 8,340 7,444 19,380
4 12,155 8,721 7,990 19,380 7,720 7,004 19,380
5 12,763 8,425 7,720 19,380 7,056 6,368 19,380
6 13,401 8,138 7,657 19,380 6,338 5,875 19,380
7 14,071 7,869 7,401 19,380 5,553 5,111 19,380
8 14,775 7,591 7,353 19,380 4,684 4,461 19,380
9 15,513 7,330 7,111 19,380 3,712 3,503 19,380
10 16,289 7,076 7,076 19,380 2,616 2,616 19,380
11 17,103 6,865 6,865 19,380 1,379 1,379 19,380
12 17,959 6,659 6,659 19,380 0 0 0
13 18,856 6,459 6,459 19,380 0 0 0
14 19,799 6,264 6,264 19,380 0 0 0
15 20,789 6,073 6,073 19,380 0 0 0
16 21,829 5,888 5,888 19,380 0 0 0
17 22,920 5,707 5,707 19,380 0 0 0
18 24,066 5,531 5,531 19,380 0 0 0
19 25,270 5,360 5,360 19,380 0 0 0
20 26,533 5,193 5,193 19,380 0 0 0
25 33,864 4,420 4,420 19,380 0 0 0
35 55,160 3,145 3,145 19,380 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTACT 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.
<PAGE>
- 55 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE \ 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,902 9,906 44,053 10,902 9,906 44,053
2 11,025 11,882 10,894 44,053 11,882 10,894 44,053
3 11,576 12,946 11,970 44,053 12,946 11,970 44,053
4 12,155 14,103 13,292 44,053 14,103 13,292 44,053
5 12,763 15,360 14,568 44,053 15,360 14,568 44,053
6 13,401 16,726 16,159 44,053 16,726 16,159 44,053
7 14,071 18,210 17,674 44,053 18,210 17,674 44,053
8 14,775 19,825 19,526 44,053 19,822 19,523 44,053
9 15,513 21,585 21,331 44,053 21,574 21,320 44,053
10 16,289 23,505 23,505 44,053 23,477 23,477 44,053
11 17,103 25,727 25,727 44,053 25,652 25,652 44,053
12 17,959 28,162 28,162 44,053 28,031 28,031 44,053
13 18,856 30,830 30,830 44,053 30,640 30,640 44,053
14 19,799 33,755 33,755 44,053 33,507 33,507 44,053
15 20,789 36,960 36,960 44,053 36,667 36,667 44,053
16 21,829 40,479 40,479 46,551 40,154 40,154 46,177
17 22,920 44,337 44,337 50,102 43,981 43,981 49,699
18 24,066 48,565 48,565 53,908 48,175 48,175 53,475
19 25,270 53,202 53,202 57,991 52,774 52,774 57,524
20 26,533 58,305 58,305 63,553 57,828 57,828 63,033
25 33,864 92,176 92,176 97,707 91,132 91,132 96,600
35 55,160 230,373 230,373 241,893 219,404 219,404 230,374
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 56 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE \ 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,314 9,332 44,053 10,314 9,332 44,053
2 11,025 10,632 9,669 44,053 10,632 9,669 44,053
3 11,576 10,954 10,012 44,053 10,954 10,012 44,053
4 12,155 11,279 10,509 44,053 11,279 10,509 44,053
5 12,763 11,605 10,860 44,053 11,605 10,860 44,053
6 13,401 11,941 11,422 44,053 11,931 11,412 44,053
7 14,071 12,288 11,796 44,053 12,255 11,763 44,053
8 14,775 12,646 12,383 44,053 12,574 12,311 44,053
9 15,513 13,015 12,782 44,053 12,885 12,652 44,053
10 16,289 13,396 13,396 44,053 13,182 13,182 44,053
11 17,103 13,858 13,858 44,053 13,517 13,517 44,053
12 17,959 14,337 14,337 44,053 13,834 13,834 44,053
13 18,856 14,834 14,834 44,053 14,127 14,127 44,053
14 19,799 15,349 15,349 44,053 14,393 14,393 44,053
15 20,789 15,883 15,883 44,053 14,624 14,624 44,053
16 21,829 16,436 16,436 44,053 14,809 14,809 44,053
17 22,920 17,010 17,010 44,053 14,938 14,938 44,053
18 24,066 17,606 17,606 44,053 14,991 14,991 44,053
19 25,270 18,223 18,223 44,053 14,949 14,949 44,053
20 26,533 18,863 18,863 44,053 14,787 14,787 44,053
25 33,864 22,433 22,433 44,053 11,078 11,078 44,053
35 55,160 31,836 31,836 44,053 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTACT 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 CONTRACT 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.
<PAGE>
- 57 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE \ 55 FEMALE
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.75% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,726 8,757 44,053 9,726 8,757 44,053
2 11,025 9,452 8,512 44,053 9,451 8,512 44,053
3 11,576 9,177 8,266 44,053 9,177 8,266 44,053
4 12,155 8,899 8,166 44,053 8,899 8,166 44,053
5 12,763 8,628 7,920 44,053 8,618 7,910 44,053
6 13,401 8,365 7,881 44,053 8,331 7,848 44,053
7 14,071 8,108 7,647 44,053 8,035 7,575 44,053
8 14,775 7,859 7,619 44,053 7,727 7,489 44,053
9 15,513 7,616 7,397 44,053 7,403 7,185 44,053
10 16,289 7,380 7,380 44,053 7,058 7,058 44,053
11 17,103 7,186 7,186 44,053 6,713 6,713 44,053
12 17,959 6,996 6,996 44,053 6,334 6,334 44,053
13 18,856 6,811 6,811 44,053 5,916 5,916 44,053
14 19,799 6,630 6,630 44,053 5,451 5,451 44,053
15 20,789 6,453 6,453 44,053 4,932 4,932 44,053
16 21,829 6,280 6,280 44,053 4,345 4,345 44,053
17 22,920 6,110 6,110 44,053 3,673 3,673 44,053
18 24,066 5,945 5,945 44,053 2,896 2,896 44,053
19 25,270 5,783 5,783 44,053 1,985 1,985 44,053
20 26,533 5,625 5,625 44,053 910 910 44,053
25 33,864 4,885 4,885 44,053 0 0 0
35 55,160 3,633 3,633 44,053 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 58 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE \ 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,897 9,902 27,778 10,897 9,902 27,778
2 11,025 11,862 10,875 27,778 11,862 10,875 27,778
3 11,576 12,903 11,927 27,778 12,902 11,926 27,778
4 12,155 14,037 13,227 27,778 14,021 13,211 27,778
5 12,763 15,274 14,483 27,778 15,229 14,439 27,778
6 13,401 16,623 16,057 27,778 16,535 15,969 27,778
7 14,071 18,094 17,558 27,778 17,948 17,413 27,778
8 14,775 19,698 19,399 27,778 19,482 19,185 27,778
9 15,513 21,447 21,193 27,778 21,155 20,902 27,778
10 16,289 23,354 23,354 27,778 22,988 22,988 27,778
11 17,103 25,561 25,561 27,778 25,115 25,115 27,778
12 17,959 27,981 27,981 29,940 27,485 27,485 29,409
13 18,856 30,632 30,632 32,776 30,076 30,076 32,182
14 19,799 33,537 33,537 35,550 32,914 32,914 34,889
15 20,789 36,721 36,721 38,925 36,007 36,007 38,168
16 21,829 40,211 40,211 42,222 39,396 39,396 41,367
17 22,920 44,035 44,035 46,238 43,088 43,088 45,243
18 24,066 48,227 48,227 50,639 47,104 47,104 49,460
19 25,270 52,820 52,820 55,462 51,466 51,466 54,040
20 26,533 57,887 57,887 60,782 56,231 56,231 59,043
25 33,864 91,514 91,514 96,090 86,546 86,546 90,874
35 55,160 228,720 228,720 231,007 203,577 203,577 205,613
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTACT 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.
<PAGE>
- 59 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE \ 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 10,309 9,327 27,778 10,309 9,327 27,778
2 11,025 10,612 9,650 27,778 10,612 9,650 27,778
3 11,576 10,917 9,976 27,778 10,907 9,967 27,778
4 12,155 11,232 10,463 27,778 11,191 10,423 27,778
5 12,763 11,556 10,812 27,778 11,460 10,717 27,778
6 13,401 11,891 11,372 27,778 11,710 11,193 27,778
7 14,071 12,236 11,744 27,778 11,935 11,445 27,778
8 14,775 12,592 12,329 27,778 12,126 11,866 27,778
9 15,513 12,960 12,727 27,778 12,275 12,045 27,778
10 16,289 13,339 13,339 27,778 12,370 12,370 27,778
11 17,103 13,799 13,799 27,778 12,451 12,451 27,778
12 17,959 14,276 14,276 27,778 12,455 12,455 27,778
13 18,856 14,770 14,770 27,778 12,368 12,368 27,778
14 19,799 15,283 15,283 27,778 12,172 12,172 27,778
15 20,789 15,815 15,815 27,778 11,843 11,843 27,778
16 21,829 16,366 16,366 27,778 11,347 11,347 27,778
17 22,920 16,937 16,937 27,778 10,641 10,641 27,778
18 24,066 17,530 17,530 27,778 9,661 9,661 27,778
19 25,270 18,144 18,144 27,778 8,326 8,326 27,778
20 26,533 18,781 18,781 27,778 6,527 6,527 27,778
25 33,864 22,335 22,335 27,778 0 0 0
35 55,160 31,696 31,696 32,014 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
- 60 -
HARTFORD LIFE INSURANCE COMPANY
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE \ 65 FEMALE
INITIAL FACE AMOUNT: $27,778
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.25% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUMS ------------------------------------- -------------------------------------
END OF ACCUMULATED CASH CASH
CONTRACT AT 5% INTEREST ACCOUNT SURRENDER DEATH ACCOUNT SURRENDER DEATH
YEAR PER YEAR VALUE VALUE BENEFIT VALUE VALUE BENEFIT
---- -------------- ------- --------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
1 10,500 9,721 8,752 27,778 9,721 8,752 27,778
2 11,025 9,432 8,493 27,778 9,432 8,493 27,778
3 11,576 9,147 8,236 27,778 9,129 8,220 27,778
4 12,155 8,869 8,136 27,778 8,809 8,077 27,778
5 12,763 8,599 7,891 27,778 8,466 7,760 27,778
6 13,401 8,336 7,852 27,778 8,095 7,614 27,778
7 14,071 8,080 7,619 27,778 7,687 7,230 27,778
8 14,775 7,831 7,592 27,778 7,232 6,996 27,778
9 15,513 7,589 7,370 27,778 6,716 6,499 27,778
10 16,289 7,354 7,354 27,778 6,122 6,122 27,778
11 17,103 7,161 7,161 27,778 5,457 5,457 27,778
12 17,959 6,972 6,972 27,778 4,673 4,673 27,778
13 18,856 6,787 6,787 27,778 3,747 3,747 27,778
14 19,799 6,606 6,606 27,778 2,652 2,652 27,778
15 20,789 6,430 6,430 27,778 1,349 1,349 27,778
16 21,829 6,257 6,257 27,778 0 0 0
17 22,920 6,088 6,088 27,778 0 0 0
18 24,066 5,923 5,923 27,778 0 0 0
19 25,270 5,762 5,762 27,778 0 0 0
20 26,533 5,604 5,604 27,778 0 0 0
25 33,864 4,866 4,866 27,778 0 0 0
35 55,160 3,619 3,619 27,778 0 0 0
</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 CONTRACT WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT
RETURN APPLICABLE TO THE CONTRACT AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO
FLUCTUATED ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL CONTRACT YEARS. THE DEATH
BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A CONTRACT 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 CONTRACT 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.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life 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 & liabilities of Hartford
Life Insurance Company Putnam Capital Manager Trust Separate Account Five (the
Account) as of December 31, 1995, and the related statement of operations and
the statement of changes in net assets for the period from inception,
January 10, 1995, to December 31, 1995. 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 audit 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 audit provides 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 Hartford Life Insurance Company
Putnam Capital Manager Trust Separate Account Five as of December 31, 1995, and
the results of its operations and the changes in its net assets for the period
from inception, January 10, 1995, to December 31, 1995, in conformity with
generally accepted accounting principles.
Hartford, Connecticut
February 20, 1996 ARTHUR ANDERSEN LLP
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE - HARTFORD LIFE INSURANCE
COMPANY
STATEMENT OF ASSETS & LIABILITIES
<TABLE>
<CAPTION>
December 31, 1995 Voyager Global Asia Pacific Growth Global Asset
Fund Growth Growth Fund and Income Allocation
Sub-Account Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C>
ASSETS
Investments:
PCM Voyager Fund
Shares 118,724
Cost $3,319,339
Market Value: $3,621,094 $ 0 $ 0 $ 0 $ 0
PCM Global Growth Fund
Shares 172,727
Cost $2,496,208
Market Value: 0 2,621,991 0 0 0
PCM Asia Pacific Growth Fund
Shares 25,409
Cost $252,826
Market Value: 0 0 259,939 0 0
PCM Growth and Income Fund
Shares 244,760
Cost $4,862,874
Market Value: 0 0 0 5,254,989 0
PCM Global Asset Allocation Fund
Shares 34,141
Cost $522,788
Market Value: 0 0 0 0 551,378
PCM High Yield Fund
Shares 145,241
Cost $1,743,609
Market Value: 0 0 0 0 0
PCM U.S. Government and High Quality Bond Fund
Shares 44,615
Cost $590,573
Market Value: 0 0 0 0 0
PCM New Opportunities Fund
Shares 195,071
Cost $2,765,584
Market Value: 0 0 0 0 0
PCM Money Market Fund
Shares 5,240,605
Cost $5,240,605
Market Value: 0 0 0 0 0
PCM Utilities Growth and Income Fund
Shares 48,050
Cost $608,275
Market Value: 0 0 0 0 0
PCM Diversified Income Fund
Shares 30,076
Cost $318,170
Market Value: 0 0 0 0 0
Due from Hartford Life
Insurance Company 3,667 9,000 0 15,029 0
Total Assets $3,624,761 $2,630,991 $ 259,939 $5,270,018 $ 551,378
LIABILITIES
Payable for fund shares purchased 3,667 9,000 0 15,029 0
<CAPTION>
High Yield U.S. Government New Money Utilities Diversified
Fund and High Opportunities Market Growth and Income
Sub-Account Quality Fund Fund Income Fund Fund
Bond Fund Sub-Account Sub-Account Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C> <C>
PCM Voyager Fund
Shares 118,724
Cost $3,319,339
Market Value: $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
PCM Global Growth Fund
Shares 172,727
Cost $2,496,208
Market Value: 0 0 0 0 0 0
PCM Asia Pacific Growth Fund
Shares 25,409
Cost $252,826
Market Value: 0 0 0 0 0 0
PCM Growth and Income Fund
Shares 244,760
Cost $4,862,874
Market Value: 0 0 0 0 0 0
PCM Global Asset Allocation Fund
Shares 34,141
Cost $522,788
Market Value: 0 0 0 0 0 0
PCM High Yield Fund
Shares 145,241
Cost $1,743,609
Market Value: 1,796,625 0 0 0 0 0
PCM U.S. Government and High Quality Bond Fund
Shares 44,615
Cost $590,573
Market Value: 0 613,005 0 0 0 0
PCM New Opportunities Fund
Shares 195,071
Cost $2,765,584
Market Value: 0 0 3,048,960 0 0 0
PCM Money Market Fund
Shares 5,240,605
Cost $5,240,605
Market Value: 0 0 0 5,240,605 0 0
PCM Utilities Growth and Income Fund
Shares 48,050
Cost $608,275
Market Value: 0 0 0 0 638,097 0
PCM Diversified Income Fund
Shares 30,076
Cost $318,170
Market Value: 0 0 0 0 0 331,736
Due from Hartford Life
Insurance Company 8,333 0 3,667 1,467,565 0 0
Total Assets $1,804,958 $ 613,005 $ 3,052,627 $6,708,170 $ 638,097 $ 331,736
LIABILITIES
Payable for fund shares purchased 8,333 0 3,667 1,467,565 0 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
December 31, 1995 Voyager Global Asia Pacific Growth Global Asset
Fund Growth Growth Fund and Income Allocation
Sub-Account Fund Sub-Account Fund Fund
Sub-Account Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C>
Total Liabilities 3,667 9,000 0 15,029 0
Net Assets (variable life contract liabilities) $3,621,094 $2,621,991 $ 259,939 $5,254,989 $ 551,378
Units Outstanding 255,782 224,663 25,409 386,957 44,180
Accumulation Unit Value at end of period $14.156972 $11.670786 $10.230003 $13.580303 $12.480299
<CAPTION>
High Yield U.S. Government New Money Utilities Diversified
Fund and High Opportunities Market Growth and Income
Sub-Account Quality Fund Fund Income Fund Fund
Bond Fund Sub-Account Sub-Account Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C> <C>
Total Liabilities 8,333 0 3,667 1,467,565 0 0
Net Assets (variable life contract liabilities) $1,796,625 $ 613,005 $3,048,960 $5,240,605 $ 638,097 $ 331,736
Units Outstanding 151,847 50,854 209,487 4,972,418 48,681 27,704
Accumulation Unit Value at end of period $11.831850 $12.054164 $14.554430 $1.053935 $13.107694 $11.974198
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE - HARTFORD LIFE INSURANCE
COMPANY
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the period Voyager Global Asia Pacific Growth Global Asset High Yield U.S. Government
inception Fund Growth Growth Fund and Income Allocation Fund and High
Income
January 10, 1995 Sub-Account Fund Sub-Account* Fund Fund
Income Fund Fund
to December 31, 1995 Sub-Account Sub-Account Sub-Account
Sub-Account Sub-Account
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 30 $ 91 $ 0 $ 387 $ 192 $ 916 $ 696
Net investment income (loss) 30 91 0 387 192 916 696
Capital gains income 224 170 0 100 0 0 0
Net realized and
unrealized gain (loss)
on investments:
Net realized gain (loss) on
security transactions (604) 89 349 6 7 119 133
Net unrealized appreciation
(depreciation) of investments
during the period: 301,754 125,784 7,112 392,116 28,590 53,019 22,432
Net gains (losses) on
investments 301,150 125,873 7,461 392,122 28,597 53,138 22,565
Net increase
(decrease) in net assets
resulting from operations: $301,404 $126,134 $7,461 $392,609 $28,789 $54,054 $23,261
<CAPTION>
New Money Utilities Diversified from
Opportunities Market Growth and
Sub-Account Quality Fund Fund
Bond Fund Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C>
Investment Income:
Dividends $ 1 $80,712 $ 543 $ 521
Net investment income (loss) 1 80,712 543 521
Capital gains income 31 0 0 0
Net realized and
unrealized gain (loss)
on investments:
Net realized gain (loss) on
security transactions (2,699) 0 72 31
Net unrealized appreciation
(depreciation) of investments
during the period: 283,377 0 29,823 13,566
Net gains (losses) on
investments 280,678 0 29,895 13,597
Net increase
(decrease) in net assets
resulting from operations: $280,710 $80,712 $30,438 $14,118
</TABLE>
*From inception, May 1, 1995, to December 31, 1995
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE - HARTFORD LIFE INSURANCE
COMPANY
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the period Voyager Global Asia Pacific Growth Global Asset High Yield U.S. Government
from inception Fund Growth Growth Fund and Income Allocation Fund and High
January 10, 1995 Sub-Account Fund Sub-Account* Fund Fund
Income Fund Fundto December 31, 1995 Sub-Account
Bond Fund Sub-Account Sub-Account Sub-Account Sub-Account
Sub-Account
<S> <C> <C> <C> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $ 30 $ 91 $ 0 $ 387 $ 192 $ 916 $ 696
Capital gains income 224 170 0 100 0 0 0
Net realized
gain(loss) on security
transactions (604) 89 349 6 7 119 133
Net unrealized
appreciation depreciation)
of investments during the
period 301,754 125,784 7,112 392,116 28,590 53,019 22,432
Net increase
(decrease) in net
assets resulting from
operations 301,404 126,134 7,461 392,609 28,789 54,054 23,261
Unit transactions:Purchases 0 0 0 0 0 0 0
Net transfers 3,345,405 2,532,395 264,817 4,908,808 537,900 1,770,947 603,807
Surrenders (19,818) (24,192) (11,791) (28,551) (14,453) (17,973) (13,535)
Loan withdrawals 0 (7,875) 0 (9,320) 0 (7,918) 0
Cost of Insurance (5,897) (4,471) (548) (8,557) (858) (2,485) (528)
Net increase
(decrease) in net
assets resulting from
unit transactions 3,319,690 2,495,857 252,478 4,862,380 522,589 1,742,571 589,744
Total increase
(decrease) in net
assets 3,621,094 2,621,991 259,939 5,254,989 551,378 1,796,625 613,005
Net assets:
Beginning of period 0 0 0 0 0 0 0
End of period $3,621,094 $2,621,991 $259,939 $5,254,989 $551,378 $1,796,625 $613,005
<CAPTION>
For the period New Money Utilities Diversified
from inception Opportunities Market Growth and Income
January 10, 1995 Sub-Account Quality Fund Fund
Sub-Account Sub-Account
<S> <C> <C> <C> <C>
Operations:
Net investment
income (loss) $ 1 $ 80,712 $ 543 $ 521
Capital gains income 31 0 0 0
Net realized
gain(loss) on security
transactions (2,699) 0 72 31
Net unrealized
appreciation depreciation)
of investments during the
period 283,377 0 29,823 13,566
Net increase
(decrease) in net
assets resulting from
operations 280,710 80,712 30,438 14,118
Unit transactions:Purchases 0 24,484,446 0 0
Net transfers 2,798,806 (17,605,354) 621,666 330,819
Surrenders (15,714) (147,693) (13,432) (12,664)
Loan withdrawals (9,713) (1,548,256) 0 0
Cost of Insurance (5,129) (23,250) (575) (537)
Net increase
(decrease) in net
assets resulting from
unit transactions 2,768,250 5,159,893 607,659 317,618
Total increase
(decrease) in net
assets 3,048,960 5,240,605 638,097 331,736
Net assets:
Beginning of period 0 0 0 0
End of period $3,048,960 $5,240,605 $638,097 $331,736
</TABLE>
*From inception, May 1, 1995, to December 31, 1995
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
<PAGE>
PUTNAM CAPITAL MANAGER TRUST SEPARATE ACCOUNT FIVE - HARTFORD LIFE INSURANCE
COMPANY
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
1. ORGANIZATION:
Putnam Capital Manager Trust Separate Account Five (the Account) is a separate
investment account within Hartford Life 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
commenced operations on January 10, 1995. The Account invests deposits by
Variable annuity contractholders of the Company in 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 is valued at the
closing net asset value per share as determined by the appropriate Fund as of
December 31, 1995.
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 principle 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.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company and Subsidiaries:
We have audited the accompanying consolidated balance sheets of Hartford Life
Insurance Company (a Connecticut corporation and wholly-owned subsidiary of
Hartford Life and Accident Insurance Company) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 1995. These consolidated financial statements and the
schedules referred to below are the responsibility of Hartford Life Insurance
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and schedules 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 consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated 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 consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Hartford Life Insurance Company and subsidiaries as of December 31, 1995
and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.
As discussed in Note 1 in Notes to Consolidated Financial Statements,
Hartford Life Insurance Company adopted new accounting standards promulgated
by the Financial Accounting Standards Board, changing its methods of
accounting, as of January 1, 1994, for debt and equity securities.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The schedules listed in
the Index to Consolidated Financial Statements and Schedules are presented
for purposes of complying with the Securities and Exchange Commission's rules
and are not a required part of the basic consolidated financial statements.
These schedules have been subjected to the auditing procedures applied in the
audits of the basic consolidated financial statements and, in our opinion,
fairly state in all material respects the financial data required to be set
forth therein in relation to the basic consolidated financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 24, 1996
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS)
For the year ended December 31,
1995 1994 1993
Revenues
Premiums and other considerations $1,487 $1,100 $747
Net investment income 1,328 1,292 1,051
Net realized (losses) gains (11) 7 16
Total Revenues 2,804 2,399 1,814
Benefits, Claims and Expenses
Benefits, claims and claim adjustment expenses 1,422 1,405 1,046
Dividends to policyholders 675 419 227
Amortization of deferred policy acquisition costs 199 145 113
Other insurance expense 317 227 210
Total Benefits, Claims and Expenses 2,613 2,196 1,596
Income before income tax expenses 191 203 218
Income tax expense 62 5 75
Net Income $129 $138 $143
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS EXCEPT SHARE DATA)
As of December 31,
1994 1993
Assets
Investments
Fixed maturities
available for sale, at market value
(amortized cost of $14,440 and $14,464) $14,400 $13,429
Equity securities, at market value (cost of $61 and $76) 63 68
Mortgage loans, at outstanding balance 265 316
Policy loans, at outstanding balance 3,381 2,614
Other investments, at cost 156 107
Total Investments 18,265 16,534
Cash 46 20
Premiums and amounts receivable 165 160
Reinsurance recoverable 6,221 5,466
Accrued investment income 394 378
Deferred policy acquisition costs 2,188 1,809
Deferred income tax 420 590
Other assets 234 83
Separate account assets 36,264 22,809
Total Assets $64,197 $47,849
Liabilities
Future policy benefits $2,373 $1,890
Other policyholder funds 22,598 21,328
Other liabilities 1,233 1,000
Separate account liabilities 36,264 22,809
Total Liabilities 62,468 47,027
Commitments and contingencies (Note 9)
Stockholder's Equity
Common stock
Authorized 1,000 shares, $5,690 par value Issued and outstanding 1,000 shares
6 6
Additional paid-in capital 1,007 826
Retained earnings 773 644
Unrealized loss on investments, net of tax (57) (654)
Total Stockholder's Equity 1,729 822
Total Liabilities and Stockholder's Equity $64,197 $47,849
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
<PAGE>
Hartford Life Insurance Company and Subsidiaries
Consolidated Statements of Stockholder's Equity
(in millions)
<TABLE>
<CAPTION>
Unrealized Loss Total
Common Additional Retained On Investments, Stockholders
Stock Paid-In Capitol Earnings Net of Tax Equity
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $6 $498 $373 $0 $877
Net income -- -- 143 -- 143
Capital contribution -- 180 -- -- 180
Excess of assets over
liabilities on reinsurance
assumed from affiliate -- (2) -- -- (2)
Change in unrealized loss on
investments, net of tax -- -- -- (5) (5)
Balance, December 31, 1993 6 676 516 (5) 1,193
Net income -- -- 138 -- 138
Capital contribution -- 150 -- -- 150
Dividend paid -- -- (10) -- (10)
Change in unrealized loss on
investments, net of tax* -- -- -- (649) (649)
Balance, December 31, 1994 6 826 644 (654) 822
Net income -- -- 129 -- 129
Capital contribution -- 181 -- -- 81
Change in unrealized loss on
investments, net of tax* -- -- -- 597 597
Balance, December 31, 1994 $6 $1,007 $773 ($57) $1,729
</TABLE>
(*) The 1994 change in unrealized loss on investments, net of tax, included an
unrealized gain of $91 due to adoption of SFAS No. 115 as discussed in Note 1(b)
of Notes to Consolidated Financial Statements.
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Operating Activities
Net income $ 129 $ 138 $ 143
Adjustments to net income:
Net realized (losses) gains 11 (7) (16)
(Decrease) increase in liability to
policyholders for realized gains (3) 5 (15)
Net amortization of premium on fixed maturities 21 41 2
Provision for deferred income taxes (172) (128) (121)
Increase in deferred policy acquisition costs (379) (441) (292)
(Increase) decrease in premiums and amounts
receivable (81) 10 (28)
Increase in accrued investment income (16) (106) (4)
(Increase) decrease in other assets (177) 101 (36)
(Increase) decrease in reinsurance recoverable (35) 75 (121)
Increase in liability for future policy benefits 483 224 360
Increase in other liabilities 281 191 176
Cash provided by operating activities 62 103 48
Investing Activities
Purchases of fixed maturities investments (6,228) (9,127) (12,406)
Proceeds from sales of fixed maturities
investments 4,848 5,708 8,813
Maturities and principal paydowns of fixed
maturities investments 1,741 1,931 2,596
Net purchases of other investments (871) (1,338) (206)
Net (purchases)/sales of short-term investments (24) 135 (564)
Cash used by investing activities (534) (2,691) (1,767)
Financing Activities
Net receipts from investment and UL-type contracts
credited to policyholder account balances 498 2,467 1,513
Capital contribution 0 150 180
Dividends paid 0 (10) 0
Cash provided by financing activities 498 2,607 1,693
Net Increase (decrease) in cash 26 19 (26)
Cash at beginning of year 20 1 27
Cash at end of year $ 46 $ 20 $ 1
</TABLE>
The accompanying Notes are an integral part of these Consolidated Financial
Statements.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS)
SIGNIFICANT ACCOUNTING POLICIES
(A) Basis of Presentation These consolidated financial statements include
Hartford Life Insurance Company and its wholly-owned subsidiaries ("Hartford
Life" or the "Company"), ITT Hartford Life and Annuity Insurance Company ("ILA")
and ITT Hartford International Life Reassurance Corporation ("HLRe"), formerly
American Skandia Life Reinsurance Corporation. Hartford Life is a wholly-owned
subsidiary of Hartford Life and Accident Insurance Company ("HLA"). Hartford
Life is ultimately owned by Hartford Fire Insurance Company ("Hartford Fire"),
which is ultimately owned by ITT Hartford Group, Inc. ("ITT Hartford"), formerly
a subsidiary of ITT Corporation ("ITT"). On December 19, 1995, ITT Corporation
distributed all of the outstanding shares of ITT Hartford Group to ITT
Corporation Shareholders of record in an action known herein as the
"Distribution." As a result of the Distribution, ITT Hartford became an
independent publicly traded company.
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 and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. The Company offers life,
annuity, pension, and disability insurance products. These products are
distributed and marketed by multiple distribution channels which include
broker-dealers, agents and banks, as well as a captive sales force. Hartford
Life conducts business primarily in the United States and is licensed to write
business in all 50 states. The Company is headquartered in Simsbury, Connecticut
and has 3,045 direct employees.
The consolidated financial statements are prepared in conformity with generally
accepted accounting principles which differ in certain material respects from
the accounting practices prescribed oarious insurance regulatory authorities.
(B) Changes in Accounting Principles Effective January 1, 1994, Hartford Life
adopted Statement of Financial Accounting Standards ("SFAS") No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." The new
standard requires, among other things, that securities be classified as
"held-to-maturity," "available-for-sale" or "trading" based on Hartford Life's
intentions with respect to the ultimate disposition of the security and its
ability to effect those intentions. The classification determines the
appropriate accounting carrying value (cost basis or fair value) and, in the
case of fair value, whether the adjustment impacts Stockholder's Equity directly
or is reflected in the Consolidated Statements of Income. Investments in equity
securities had previously been and continue to be recorded at fair value with
the corresponding impact included in Stockholder's Equity. Under SFAS No. 115,
Hartford Life's fixed maturities are classified as "available-for-sale" and
accordingly, these investments are reflected at fair value with the
corresponding impact included as a component of Stockholder's Equity designated
as "Unrealized loss on investments, net of tax." As with the underlying
investment security, unrealized gains and losses on derivative financial
instruments are considered in determining the fair value of the portfolios. The
impact of adoption was an increase to Stockholder's Equity of $91. Hartford
Life's cash flows were not impacted by this change in accounting principle.
(C) Revenue Recognition Revenues for universal life policies and investment
products consist of policy charges for the cost of insurance, policy
administration and surrender charges assessed to policy account balances.
Premiums for traditional life insurance policies are recognized as revenues when
they are due from policyholders. Deferred acquisition costs are amortized using
the retrospective deposit method for universal life and other types of contracts
t pattern is irregular or surrender charges are a significant source of profit
and the prospective deposit method is used where investment margins are the
primary source of profit.
(D) Future Policy Benefits and Other Policyholders Funds Liabilities for
future policy benefits are computed by the net level premium method using
interest rate assumptions varying from 3% to 11% and withdrawal, mortality and
morbidity assumptions which vary by plan, year of issue and policy durations and
include a provision for adverse deviation. Other policyholder funds which
represent liabilities for universal life insurance and investment products
reflect policy account balances before applicable surrender charges.
(E) Policyholder Realized Gains and Losses Realized gains and losses on
security transactions associated with Hartford Life's immediate participation
guaranteed contracts are excluded from revenues, since under the terms of the
contracts the realized gains and losses will be credited to policyholders in
future years as they are entitled to receive them.
(F) Deferred Policy Acquisition Costs Policy acquisition costs, including
commissions and certain underwriting expenses associated with acquiring
traditional life insurance products, are deferred and amortized over the lesser
of the estimated or actual contract life. For universal life insurance and
investment products, acquisition costs are being amortized generally in
proportion to the present value of expected gross profits from surrender
charges, investment, mortality and expense margins.
(G) Investments Hartford Life's investments in fixed maturities include bonds,
redeemable preferred stock and commercial paper which are classified as
"available-for-sale" and accordingly are carried at market value with the
after-tax difference from cost reflected as a component of Stockholder's Equity
designated "Unrealized loss on investments, net of tax." Equity securities,
which include common and non-redeemable preferred stocks, are carried at market
fter-tax difference from cost reflected in Stockholder's Equity. Realized
investment gains and losses, after deducting life and pension policyholders'
share, are reported as a component of revenue and are determined on a specific
identification basis.
<PAGE>
(H) Derivative Financial Instruments Hartford Life uses a variety of
derivative financial instruments including swaps, caps, floors, options,
forwards and exchange traded financial futures as part of an overall risk
management strategy. These instruments are used as a means of hedging exposure
to price, foreign currency and/or interest rate risk on planned investment
purchases or existing assets and liabilities. Hartford Life does not hold or
issue derivative financial instruments for trading purposes. Hartford Life's
accounting for derivative financial instruments used to manage risk is in
accordance with the concepts established in SFAS No. 80, "Accounting for Futures
Contracts," SFAS No. 52 , "Foreign Currency Translation," American Institute of
Certified Public Accountants Statement of Position 86-2, "Accounting for
Options" and various Emerging Issues Task Force pronouncements. Written options
are in all cases used in conjunction with other assets and derivatives as part
of an overall risk management strategy. Derivative instruments are carried at
values consistent with the asset or liability being hedged. Derivatives used to
hedge fixed maturities or equities are carried at fair value with the after-tax
difference from cost reflected in Stockholder's Equity. Derivatives used to
hedge other invested assets or liabilities are carried at cost.
Derivatives, used as part of a risk management strategy, must be designated at
inception as a hedge and measured for effectiveness both at inception and on an
ongoing basis. Hartford Life's minimum correlation threshold for hedge
designation is 80%. If correlation, which is assessed monthly and measured
based on a rolling three month average, falls below 80%, hedge accounting will
be terminated. Deo create a synthetic asset must meet synthetic accounting
criteria including designation at inception and consistency of terms between the
synthetic and the instrument being replicated. Synthetic instrument accounting,
consistent with industry practice, provides that the synthetic asset is
accounted for like the financial instrument it is intended to replicate.
Derivatives which fail to meet risk management criteria are marked to market
with the impact reflected in the Consolidated Statements of Income.
Gains or losses on financial futures contracts entered into in anticipation of
the future receipt of product cash flows are deferred and, at the time of the
ultimate purchase, reflected as a basis adjustment to the purchased asset.
Gains or losses on futures used in invested asset risk management are deferred
and adjusted into the basis of the hedged asset when the contract futures are
closed, except for futures used in duration hedging which are deferred and
basis adjusted on a quarterly basis. The basis adjustments are amortized into
investment income over the remaining asset life. Open forward commitment
contracts are marked to market through Stockholder's Equity. Such contracts are
recorded at settlement by recording the purchase of the specified securities at
the previously committed price. Gains or losses resulting from the termination
of the forward commitment contracts before the delivery of the securities are
recognized immediately in the Consolidated Statements of Income as a component
of net investment income.
The cost of options entered into as part of a risk management strategy are basis
adjusted to the underlying asset or liability and amortized over the remaining
life of the hedge. Gains or losses on expiration or termination are adjusted
into the basis of the underlying asset or liability and amortized over the
remaining asset life.
Interest rate swaps involve the periodic exchange of payments without the
exchange of underlying principal or notional amounts. Net receipts or payments
are accrued and recognized over the life of the swap agreement as an adjustment
to income. Should the swap be terminated, the gain or loss is adjusted into the
basis of the asset or liability and amortized over the remaining life. Should
the hedged asset be sold or liability terminated without terminating the swap
position, any swap gains or losses are immediately recognized in earnings.
Interest rate swaps purchased in anticipation of an asset purchase
("anticipatory transaction") are recognized consistent with the underlying
asset components such that the settlement component is recognized in the
Consolidated Statements of Income while the change in market value is recognized
as an unrealized gain or loss.
Premiums paid on purchased floor or cap agreements and the premium received on
issued floor or cap agreements (used for risk management), are adjusted into
the basis of the applicable asset and amortized over the asset life. Gains or
losses on termination of such positions are adjusted into the basis of the asset
or liability and amortized over the remaining asset life. Net payments are
recognized as an adjustment to income or basis adjusted and amortized depending
on the specific hedge strategy.
Forward exchange contracts and foreign currency swaps are accounted for in
accordance with SFAS No. 52.
(I) Related Party Transactions Transactions of Hartford Life with its parent
and affiliates relate principally to tax settlements, insurance coverage, rental
and service fees and payment of dividends and capis. In addition, certain
affiliated insurance companies purchased group annuity contracts from Hartford
Life to fund pension costs and claim annuities to settle casualty claims.
On June 30, 1995, the assets of Lyndon Insurance Company ("Lyndon") were
contributed to ILA. As a result, ILA received approximately $365 in fixed
maturities, equity securities and cash, $26 in receivables, $187 of current tax
liability, $20 in deferred tax liability, and $3 of other liabilities. The
excess of assets over liabilities of $181 were recorded as an increase to
paid-in capital.
Substantially all general insurance expenses related to Hartford Life, including
rent expenses, are initially paid by Hartford Fire. Direct expenses are
allocated to Hartford Life using specific identification and indirect expenses
are allocated using other applicable methods.
The rent paid to Hartford Fire for the space occupied by Hartford Life was $3 in
1995, 1994, and 1993 respectively. Hartford Life expects to pay rent of $3 in
1996, 1997, 1998, 1999, and 2000, respectively and $57 thereafter, over the
contract life of the lease.
(J) Dividends to Policyholders Dividends to policyholders primarily represent
those amounts paid to corporate owned life insurance ("COLI") policyholders.
These dividend liabilities, which appear as other policyholder funds on the
Consolidated Balance Sheets, are recorded when approved by the board of
directors.
See Note (4) for the related party coinsurance agreements.
<PAGE>
2. INVESTMENTS
(a) Components of Net Investment Income
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Interest income $1,338 $ 1,247 $1,007
Income from other investments 1 54 53
Gross investment income 1,339 1,301 1,060
Less: Investment expenses 11 9 9
Net investment income $1,328 $ 1,292 $1,051
</TABLE>
(b) Unrealized Gains/(Losses) on Equity Securities
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains $4 $2 $3
Gross unrealized losses (2) (11) (11)
Deferred income tax expenses/(benefit) 1 (3) (3)
Net unrealized gains (losses) after tax 1 (6) (5)
Balance at the beginning of the year (6) (5) (0)
Change in net unrealized gains (losses) on
equity securities $7 ($1) ($5)
</TABLE>
(c) Unrealized Gains/(Losses) in Fixed Maturities
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Gross unrealized gains $529 $150 $538
Gross unrealized losses (569) (1,185) (290)
Unrealized (losses)/gains credited to policyholder (52) 37 0
Deferred income tax (benefit)/expense (34) (350) 87
Net unrealized (losses) gains after tax (58) (648) 161
Balance at the beginning of the year (648) 161 144
Change in net unrealized gains (losses) on
fixed maturities $590 ($809) $17
</TABLE>
(d) Components of Net Realized Gains/(Losses)
<TABLE>
<CAPTION>
AS OF DECEMBER 31,
1995 1994 1993
<S> <C> <C> <C>
Fixed maturities $23 ($34) ($12)
Equity securities (6) (11) 0
Real estate and other (25) 47 43
Less: (decrease)/increase in liability to policyholders
for realized gains (3) 5 (15)
Net realized (losses) gains ($11) $7 $16
</TABLE>
<PAGE>
(e) Derivative Investments A summary of investments, segregated by major
category along with the types of derivatives and their respective notional
amounts, are as follows as of December 31, 1995:
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(CARRYING AMOUNTS)
<TABLE>
<CAPTION>
FOREIGN
CARRYING CAPS, FLOORS & OPTIONS CURRENCY
VALUE NON-DERIVATIVE ISSUED(b) PURCHASED(c) FUTURES(d) SWAPS(f) SWAPS
<S> <C> <C> <C> <C> <C> <C> <C>
Asset-backed securities $ 5,764 $ 5,752 $ (1) $30 $0 $ (17) $ 0
Inverse floaters(a) 711 794 (30) 6 0 (69) 0
Anticipatory(e) 0 0 0 0 0 0 0
Total asset-backed securities 6,475 6,546 (31) 46 0 (86) 0
Other bonds and notes 7,118 7,165 (1) 0 0 (22) (24)
Short-term investments 807 807 0 0 0 0 0
Total fixed maturities 14,400 14,518 (32) 46 0 (108) (24)
Other investments 3,865 3,865 0 0 0 0 0
Total investments $18,265 $18,383 $(32) $46 $0 $(108) $(24)
</TABLE>
SUMMARY OF INVESTMENTS
AS OF DECEMBER 31, 1995
(NATIONAL AMOUNT)
(EXCLUDING LIABILITY HEDGES)
<TABLE>
<CAPTION>
FOREIGN
NATIONAL CAPS, FLOORS & OPTIONS CURRENCY
VALUE ISSUED(b) PURCHASED(c) FUTURES(d) SWAPS(f) SWAPS
<S> <C> <C> <C> <C> <C> <C>
Asset-backed securities $3,863 $118 $3,133 $322 $ 290 $ 0
Inverse floaters(a) 1,601 560 354 6 681 0
Anticipatory(e) 238 0 0 213 25 0
Total asset-backed securities 5,702 678 3,487 541 996 0
Other bonds and notes 1,365 33 66 322 757 187
Short-term investments 0 0 0 0 0 0
Total fixed maturities 7,067 711 3,553 863 1,753 187
Other investments 18 0 0 0 18 0
Total investments $7,085 $711 $3,553 $863 $1,771 $187
</TABLE>
(a) Inverse floaters are variations of CMO's for which the coupon rates move
inversely with an index rate (e.g. LIBOR). The risk to principal is considered
negligible as the underlying collateral for the securities is guaranteed or
sponsored by government agencies. To address the volatility risk created by
the coupon variability, Hartford Life uses a variety of derivative instruments,
primarily interest rate swaps and issued floors.
(b) Includes issued caps $475 with a weighted average strike rate of 8.5%
(ranging from 7.0% to 10.4%) and over 85% mature in 2000 through 2004. Issued
floors totaled $236, have a weighted average strike rate of 8.1% (ranging from
5.3% to 10.9%) and mature through 2007 with 76% maturing by 2004.
(c) Comprised of purchased floors of $1.8 billion and purchased caps of $1.7
billion. The floors have a weighted average strike price of 5.8% (ranging from
3.7% to 6.8%) and over 85% mature in 1997 through 1999. The caps have a
weighted average strike price of 7.5% (ranging from 4.5% and 10.1%) and over 82%
mature in 1997 through 1999.
(d) Over 95% of futures contracts expire before December 31, 1996.
(e) Deferred gains and losses on anticipatory transactions are included in the
carrying value of bond investments in the consolidated balance sheets. At the
time of the ultimate purchase, they are reflected as a basis adjustment to the
purchased asset. At December 31, 1995, there were $5.3 in net deferred losses
for futures, interest rate swaps and purchased options.
(f) The following table summarizes the maturities by notional value of interest
rate swaps outstand31, 1995 and the related weighted average interest pay rate
or receive rate assuming current market conditions:
<PAGE>
MATURITY OF SWAPS ON INVESTMENTS
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
LAST
1996 1997 1998 1999 2000 THEREAFTER TOTAL MATURITY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Rate Swaps pay fixed/receive variable
Notional Value $ 15 $ 50 $ 0 $453 $ 31 $229 $ 778 2004
Weighted Average Pay Rate 5.0% 7.2% 0.0% 8.1% 7.1% 7.8% 7.8%
Weighted Average Receive Rate 5.8% 5.9% 0.0% .8% 5.7% 5.9% 5.9%
Pay Variable/Receive Fixed
Notional Value $100 $ 68 $ 25 $ 25 $ 35 $190 $ 443 2007
Weighted Average Pay Rate 5.9% 8.6% 5.9% 0.0% 5.9% 5.4% 5.4%
Weighted Average Receive Rate 2.4% 7.9% 4.0% 0.0% 6.5% 6.9% 6.9%
Pay Variable/Receive Different Variable
Notional Value $ 50 $ 18 $ 36 $ 12 $200 $234 $ 550 2004
Weighted Average Pay Rate 5.8% 0.0% 3.7% 3.5% 4.5% 16.3% 5.7%
Weighted Average Receive Rate 5.4% 0.0% 5.6% 5.2% 6.8% 5.9% 6.4%
Total Interest Rate Swaps $165 $136 $ 61 $490 $266 $653 $1,771 2007
Weighted Average Pay Rate 5.8% 7.8% 4.6% 7.6% 5.0% 7.3% 6.9%
Weighted Average Receive Rate 3.6% 7.2% 4.9% 5.4% 6.6% 6.3% 5.8%
</TABLE>
(g) The following table reconciles the derivative notional amounts by derivative
type and by strategy:
BY DERIVATIVE TYPE
<TABLE>
<CAPTION>
12/31/94 MATURITIES 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
<S> <C> <C> <C> <C>
Caps $1,861 $ 2,666 $ 2,343 $2,184
Floors 2,131 237 188 2,180
Swaps/Collars/Forwards/Options 4,374 1,355 2,163 3,566
Futures 253 6,125 5,515 863
Total $8,619 $10,383 $10,209 $8,793
</TABLE>
BY STRATEGY
<TABLE>
<CAPTION>
12/31/94 MATURITIES 12/31/95
NOTIONAL AMOUNT ADDITIONS TERMINATIONS NOTIONAL AMOUNT
<S> <C> <C> <C> <C>
Liability $1,725 $ 729 $ 746 $1,708
Anticipatory 626 1,564 1,952 238
Asset 3,048 3,153 3,217 2,984
Portfolio 3,220 4,937 4,294 3,863
Total $8,619 $10,383 $10,209 $8,793
</TABLE>
In addition to risk management through derivative financial instruments
pertaining to the investment portfolio, interest rate sensitivity related to
certain Company liabilities was altered primarily through interest rate swap
agreements. The notional amount of the liability agreements in which Hartford
Life generally pays one variable rate in exchange for another, was $1.7 billion
at December 31, 1995 and 1994 respectively. The weighted average pay rate is
5.9%; the weighted average receive rate is 6.0% , and these agreements mature at
various times through 2001.
(f) Concentration of Credit Risk Hartford Life has a reinsurance recoverable
of $5.6 billion from Mutual Benece Corporation (Mutual Benefit). The risk of
Mutual Benefit becoming insolvent is mitigated by the reinsurance agreement's
requirement that the assets be kept in a security trust with Hartford Life as
sole beneficiary. Excluding investments in U.S. government and agencies,
Hartford Life has no other significant concentrations of credit risk.
Included in fixed maturity investments at December 31, 1995 were $39 of Orange
County, California Pension Obligation Bonds, $17 of which were carried in the
general account and $22 which were included in Hartford Life's guaranteed
separate accounts. During 1995 all interest payments due were received. While
Orange County is currently operating under Protection of Chapter 9 of the
Federal Bankruptcy Laws, Hartford Life believes the bonds are not impaired other
than on a temporary basis.
(g) Fixed Maturities The schedule below details the amortized cost and fair
values of Hartford Life's fixed maturities by component, along with the gross
unrealized gains and losses:
<PAGE>
<TABLE>
<CAPTION>
As of December 31, 1995
-------------------------------------------
Amortized Gross Unrealized Market
Cost Gains Losses Value
--------- ----- ------ ------
<S> <C> <C> <C> <C>
U.S. Government and government agencies
and authorities:
Guaranteed and sponsored $ 502 $ 4 ($9) $ 497
Guaranteed and sponsored-asset backed 3,568 210 (387) 3,391
State, municipalities and political
subdivisions 201 4 (3) 202
International governments 291 19 (4) 306
Public utilities 949 29 (2) 976
All other corporate-asset backed ,065 76 (55) 3,086
All other corporate 5,056 187 (109) 5,134
Short-term investments 808 0 0 808
Total investments $14,440 $529 ($569) $14,440
As of December 31, 1995
-------------------------------------------
Amortized Gross Unrealized Market
Cost Gains Losses Value
--------- ----- ------ ------
U.S. Government and government agencies
and authorities:
Guaranteed and sponsored $1,516 $ 1 ($87) $1,430
Guaranteed and sponsored-asset backed 4,256 78 (571) 3,763
State, municipalities and political subdivisions 148 1 (12) 137
International governments 189 1 (14) 176
Public utilities 531 1 (32) 500
All other corporate-asset backed 2,442 30 (121) 2,351
All other corporate 3,717 38 (297) 3,458
Short-term investments 1,665 0 (51) 1,614
Total investments $14,464 $150 ($1,185) $13,429
</TABLE>
The amortized cost and estimated fair value of fixed maturities at December
31, 1995, by maturity, are shown below. Asset backed securities are
distributed to maturity year based on estimates of the rate of future
prepayments of principal over the remaining life of the securities. Expected
maturities differ from contractual maturities reflecting the borrowers'
rights to call or prepay their obligations.
Amortized Market
Cost Value
--------- -------
Due in one year or less $ 3,146 $ 3,133
Due after one year through five years 6,373 6,316
Due after five years through ten years 3,609 3,644
Due after ten years 1,312 1,307
Total $14,440 $14,400
Sales of fixed maturities excluding short-term fixed maturities for the years
ended December 31, 1995, 1994, and 1993 resulted in proceeds of $4,848,
$5,708, and $8,813, respectively, resulting in gross realized gains of $91,
$71, and $192, respectively, and gross realized losses of $72, $100, and
$219, respectively, not including policyholder gains and losses. Sales of
equity securities and other investments for the years ended December 31,
1995, 1994, and 1993 resulted in proceeds of $64, $159, and $127,
respectively, resulting in gross realized gains of $28, $3, and $0,
respectively, and gross real- ized losses of $59, $14, $0, respectively, not
including policyholder gains and losses.
(h) Fair Value of Financial Instruments
<TABLE>
<CAPTION>
As of December 31, 1995 As of December 31, 1995
----------------------- -----------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Assets
Fixed maturities $14,400 $14,400 $13,429 $13,429
Equity securities 63 63 68 68
Policy loans 3,381 3,381 2,614 2,614
Mortgage loans 265 265 316 316
Investments in partnerships and trusts 94 97 36 42
Miscellaneous 62 62 67 67
Liabilities
Other policy claims and benefits $12,727 $12,767 $13,001 $12,374
</TABLE>
<PAGE>
-50-
The following methods and used to estimate the fair value of each class of
financial instrument: fair value for fixed maturities and equity securities
approximate those quotations published by applicable stock exchanges or are
received from other reliable sources; policy and mortgage loan carrying
amounts approximate fair value; investments in partnerships and trusts are
based on external market valuations from partnership and trust management;
and other policy claims and benefits payable are determined by estimating
future cash flows discounted at the current market rate.
3. Income Tax Hartford Life is included in ITT Hartford Group's
consolidated U.S. Federal income tax return and remits to (receives from) ITT
Hartford Group, Inc. a current income tax provision (benefit) computed in
accordance with the tax sharing arrangements between its insurance
subsidiaries. The effective tax rate was 32% in 1995 and 1994, and
approximates the U.S. statutory tax rate of 35% in 1993.
The provision for income taxes was as follows:
<TABLE>
<CAPTION>
For the year ended December 31,
-------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Income Tax Expenses
Current $211 $185 $190
Deferred (149) (120) (115)
Total $ 62 $ 65 $ 75
Income Tax Provisions
Tax provision at U.S. statutory rate $ 67 $ 71 $ 76
Tax-exempt income (3) (3) 0
Foreign tax credit (4) (1) 0
Other 2 (2) (1)
Provisions for income tax $ 62 $ 65 $ 75
</TABLE>
Income taxes paid were $162, $244, and $301 in 1995, 1994, and 1993
respectively. The current taxes due from Hartford Fire were $8 and $46 in
1995 and 1994, respectively.
Deferred tax assets (liabilities) include the following:
<TABLE>
<CAPTION>
December 31,
------------------
1995 1994
------ ------
<S> <C> <C>
Tax deferred acquisition costs $ 410 $ 284
Book deferred acquisition costs and reserves 138 (134)
Employee benefits 8 7
Unrealized net loss on investments 32 353
Investments and other (168) 80
Total deferred tax asset $ 420 $590
</TABLE>
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax
Act of 1959 permitted the deferral from tax tion of a portion of statutory
income under certain circumstances. In these situations, the deferredmulated
in a "Policyholders' Surplus Account" and will be taxable in the future only
under conditions which management considers to be remote; therefore, no
Federal income taxes have been provided on this deferred income. The balance
for tax return purposes of the Policyholders' Surplus Account as of December
31, 1995 was $37.
4. Reinsurance Hartford Life cedes insurance to non-affiliated insurers in
order to limit its maximum loss. Such transfer does not relieve Hartford
Life of its primary liability. Hartford Life also assumes insurance from
other insurers. Group life and accident and health insurance business is
substantially reinsured to affiliated companies.
Life insurance net retained premiums were comprised of the following:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Gross premiums $1,545 $1,316 $1,135
Insurance assumed 591 299 93
Insurance ceded 649 515 481
Net retained premiums $1,487 $1,100 $747
</TABLE>
Life reinsurance recoveries, which reduced death and other benefits, for the
years ended December 31, 1995, 1994 and 1993 approximated $220, $164, and
$149, respectively.
In December 1994, Hartford Life assumed from a third party approximately $500
of corporate owned life insurance reserves on a coinsurance basis. In
December 1995, this block of business was reinsured to HLRe utilizing
modified coinsurance, with the assets and policy liabilities placed in a
separate account. In October 1994, HLRe recaptured approximately $500 of
corporate owned life insurance from a third party reinsurer. Subsequent to
this transaction, Hartford Life and HLRe restructured their coinsurance
agreement from coinsurance to modified coinsurance, with the assets and
policy liabilities placed in the separate account. These transactions did not
have a material impact on
<PAGE>
-51-
consolidated net income.
Also in December 1994, ILA ceded to a third party $1.0 billion in individual
fixed and variable annuities on a modified coinsurance basis. In December
1995, Hartford Life ceded approximately $1.2 billion in individual varia a
modified coinsurance basis to a third party. These transactions did not have
a material impact on consolidated net income.
In May 1994, Hartford Life assumed the life insurance policies and the
individual annuities of Pacific Standard with reserves and account values of
approximately $400. Hartford Life received cash and investment grade assets
to support the life insurance and individual annuity contract obligations
assumed.
In November 1993, ILA acquired, through an assumption reinsurance
transaction, substantially all of the individual fixed and variable annuity
business of HLA. As a result of this transaction, the assets and liabilities
of Hartford Life increased approximately $1 billion. The excess of
liabilities assumed over assets received, of $2, was recorded as a decrease
to capital surplus. The remaining $41 in assets and liabilities were
transferred in October 1995. The impact on consolidated net income was not
significant.
In August 1993, Hartford Life received assets of $300 for assuming the group
COLI contract obligations of Mutual Benefit Life Insurance Company, through
an assumption reinsurance transaction. Under the terms of the agreement,
Hartford Life coinsured back 75% of the liabilities to Mutual Benefit Life
Insurance Company. All assets supporting Mutual Benefit's reinsurance
liability to Hartford Life are placed in a "security trust," with Hartford
Life as the sole beneficiary. The impact on 1993 consolidated net income was
not significant.
5. Pension Plans and Other Postretirement Benefits Hartford Life's
employees are included in Hartford Fire's noncontributory 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. Hartford Life'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 Federaloses. Generally, pension costs are funded through the
purchase of Hartford Life's group pension contracts. The cost to Hartford
Life was approximately $2, $2, and $3 in 1995, 1994 and 1993, respectively.
Hartford Life provides certain health care and life insurance benefits for
eligible retired employees. A substantial portion of Hartford Life's
employees may become eligible for these benefits upon retirement. Hartford
Life's contribution for health care benefits will depend on the retiree's
date of retirement and years of service. In addition, the plan has a defined
dollar cap which limits average company contributions. Hartford Life has
prefunded a portion of the health care and life insurance obligations through
trust funds where such prefunding can be accomplished on a tax effective
basis. Postretirement health care and life insurance benefits expense,
allocated by Hartford Fire were immaterial for 1995, 1994, and 1993,
respectively.
The assumed rate of future increases in the per capita cost of health care
(the health care trend rate) was 10.1% for 1995, decreasing ratably to 6.0%
in the year 2001. Increasing the health care trend rates by one percent per
year would have an immaterial impact on the accumulated postretirement
benefit obligation and the annual expense. To the extent that the actual
experience differs from the inherent assumptions, the effect will be
amortized over the average future service of the covered employees.
6. Business Segment Information:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Revenues
Individual Life and Annuity $ 797 $ 691 $ 595
Asset Management Services 734 789 794
Specialty Insurance Operations 1,273 919 425
Total revenues $2,804 $2,399 $1,814
Year ended December 31,
-------------------------------
1995 1994 1993
------ ------ ------
Income before income tax expense
Individual Life and Annuity $ 236 $ 139 $ 129
Asset Management Services (79) 38 71
Specialty Insurance Operations 34 26 18
Total income before income tax expense $ 191 $ 203 $ 218
Year ended December 31,
-------------------------------
1995 1994 1993
------- ------- -------
Identifiable assets
Individual Life and Annuity $36,741 $26,668 $19,147
Asset Management Services 13,962 13,334 12,416
Specialty Insurance Operations 13,494 7,847 6,723
Total identifiable assets $64,197 $47,849 $38,286
</TABLE>
7. Statutory Net Income and Surplus Substantially all of the statutory
surplus is permanently reinvested or is subject to dividend restrictions
<PAGE>
relating to various state regulations which limit the payment of dividends
without prior approval. Statutory net income and surplus as of December 31
were:
1995 1994 1993
Statutory net income $112 $58 $63
Statutory surplus $1,125 $941 $812
8. Separate Accounts Hartford Life maintains separate account assets and
liabilities totaling $36.3 billion and $22.8 billion at December 31, 1995 and
1994, respectively which are reported at fair value. Separate account assets
are segregated from other investments and investment income and gains and
losses accrue directly to the policyholder. Separate accounts reflect two
categories of risk assumption: non-guaranteed separate accounts totaling
$25.9 billion and $14.8 billion at December 31, 1995 and 1994, respectively,
wherein the policyholder assumes the investment risk, and guaranteed separate
account assets totaling $10.4 billion and $8.0 billion at December 31, 1995
and 1994, respectively, wherein Hartford Life contractually guarantees either
a minimum return or account value to the policyholder. Included in the
non-guaranteed category are policy loans totaling $1.7 billion and $0.5
billion at December 31, 1995 and 1994, respectively. Investment income
(including investment gains and losses) and interest credited to
policyholders on separate account assets are not reflected in the
Consolidated Statements of Income. Separate account management fees, net of
minimum guarantees, were $387, $256, and $189, in 1995, 1994, and 1993,
respectively.
The guaranteed separate accounts include modified guaranteed individual
annuity, and modified guaranteed life insuage credit interest rate on these
contracts is 6.62%. The assets that support these liabilities were comprised
of $10.4 billion in bonds at December 31, 1995. The portfolios are
segregated from other investments and are managed so as to minimize liquidity
and interest rate risk. In order to minimize the risk of disintermediation
associated with early withdrawals, individual annuity and modified guaranteed
life insurance contracts carry a graded surrender charge as well as a market
value adjustment. Additional investment risk is hedged using a variety of
derivatives which totaled $133 million in carrying value and $2.7 billion in
notional amounts at December 31, 1995.
9. Commitments and Contingencies In August, 1994, Hartford Life renewed a
two year note purchase facility agreement which in certain instances
obligates Hartford Life to purchase up to $100 million in collateralized
notes from a third party. Hartford Life is receiving fees for this
commitment. At December 31, 1995, Hartford Life had not purchased any notes
under this agreement.
Under insurance guaranty fund 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
Hartford Life under these laws cannot be reasonably estimated. Most of these
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. Hartford Life paid guaranty fund assessments of
approximately $10, $8 and $6 in 1995, 1994, and 1993, respectively.
Hartford Life is involved in various legal actions, some of which involve
claims for substantial amounts. In the opinion of management the ultimate
liability with respect to such lawsuits, as well as other contingencies, is
not considered material in relation to the consolidated financial position of
Hartford Life.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE I - SUMMARY OF INVESTMENTS (OTHER THAN INVESTMENTS IN AFFILIATES)
AS OF DECEMBER 31, 1995
(IN MILLIONS)
Fair Reported on
Cost Value Balance Sheet
Fixed Maturities
Bonds
U.S. Government and government agencies
and authorities
Guaranteed and sponsored $502 $497 $497
Guaranteed and sponsored - asset backed 3,568 3,391 3,391
States, municipalities and political subdivisions 201 202 202
International governments 291 306 306
Public utilities 949 976 976
All other corporate 5,056 5,134 5,134
All other corporate - asset backed 3,065 3,086 3,086
Short-term investments 808 808 808
Total Fixed Maturities $14,440 $14,400 $14,400
Equity Securities
Common stocks - industrial, miscellaneous
and all other 61 63 63
Total Fixed Maturities and
Equity Securities $14,501 $14,463 $14,463
Policy loans 3,381 3,381 3,381
Mortgage loans 265 265 265
Other investments 156 159 156
Total Investments $18,303 $18,268 $18,265
Fair value for stocks and bonds approximate those quotations published by
applicable stock exchanges or are received from other reliable sources. The
fair value for short-term investments approximates cost.
Policy and mortgage loans carrying amounts approximate fair value.
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE III - SUPPLEMENTAL INSURANCE INFORMATION
(IN MILLIONS)
<TABLE>
<CAPTION>
Amort. of
Deferred Future Other Premiums and Net Benefits, Claims Deferred Other
Policy Policy Policyholder Other Investment and Claim Adj. Policy Insurance
Acq. Costs Benefits Funds Considerations Income Expenses Acq. Costs Expenses
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 1995 Year ended December 31, 1995
Individual Life
and Annuity $2,088 $706 $4,371 $514 $283 $277 $176 $108
Asset Management
Services 87 1,169 8,942 51 683 722 23 68
Specialty Insurance
Operations 13 498 9,285 922 351 423 0 816
Total $2,188 $2,373 $22,598 $1,487 $1,317 $1,422 $199 $992
As of December 31, 1994 Year ended December 31, 1994
Individual Life
and Annuity $1,708 $582 $4,257 $492 $199 $334 $137 $80
Asset Management
Services 101 845 10,160 39 750 695 8 48
Specialty Insurance
Operations 0 463 6,911 569 350 376 0 518
Total $1,809 $1,890 $21,328 $1,100 $1,299 $1,405 $145 $646
As of December 31, 1993 Year ended December 31, 1993
<PAGE>
Individual life
and Annuity $1,237 $428 $3,535 $423 $172 $249 $97 $120
Asset Management
Services 97 703 9,026 35 759 662 16 45
Specialty Insurance
Operations 0 528 5,673 289 136 135 0 272
Total $1,334 $1,659 $18,234 $747 $1,067 $1,046 $113 $437
</TABLE>
Investment income is allocated to the reportable division based on each
division's share of investable funds or on a direct basis, where applicable,
including realized capital gains and losses.
Benefits, claims and claims adjustment expenses include the increase in
liability for future policy benefits and death, disability and other contract
benefits payments.
Other insurance expenses are allocated to the division based upon specific
identification, where possible.
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
SCHEDULE IV - REINSURANCE
(IN MILLIONS)
<TABLE>
<CAPTION>
Percentage of
Gross Ceded to Assumed from Net Amount Assumed
Amount Other Companies Other Companies Amount to Net Amount
<C> <C> <C> <C> <C>
Year ended December 31, 1995
Life insurance in force $182,716 $112,774 $26,996 $96,938 27.8%
Premiums and other considerations
Individual Life and Annuity $549 $163 $122 $508 24.0%
Asset Management Services 51 0 0 51 0.0%
Specialty Insurance Operations 632 162 452 922 49.0%
313 324 17 6 283.3%
Total $1,545 $649 $591 $1,487 39.7%
Year ended December 31, 1994
Life insurance in force $136,929 $87,553 $35,016 $84,392 41.5%
Premiums and other considerations
Individual Life and Annuity $448 $71 $106 $483 21.9%
Asset Management Services 39 0 0 39 0.0%
Specialty Insurance Operations 521 140 188 569 33.0%
Accident and Health 308 304 5 9 55.6%
Total $1,316 515 $299 $1,100 27.2%
Year ended December 31, 1993
Life insurance in force $93,099 $71,415 $27,067 $48,751 55.5%
Premiums and other considerations
Individual Life and Annuity $417 $85 $91 $423 21.5%
Asset Management Services 25 0 0 25 0.0%
Specialty Insurance Operations 386 97 0 289 0.0%
Accident and Health 307 299 2 10 20.0%
Total $1,135 $481 $93 $747 12.4%
</TABLE>
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