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DIRECTOR LIFE SERIES II
MODIFIED SINGLE PREMIUM VARIABLE LIFE
INSURANCE POLICIES
HARTFORD LIFE INSURANCE COMPANY
P.O. BOX 2999
HARTFORD, CT 06104-2999
[LOGO] TELEPHONE (800) 231-5453
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This Prospectus describes Director Life Series II, a modified single premium
variable life insurance policy ("Policy" or "Policies"), offered by Hartford
Life Insurance Company ("Hartford") to applicants age 90 and under. The Policies
allow the Policy Owner to pay a single premium and, subject to certain
restrictions, additional premiums.
The Policy is a modified endowment contract for federal income tax purposes,
except in certain cases described under "Federal Tax Considerations," page 24. A
Policy loan, distribution or other amount received from a modified endowment
contract during the life of the Insured will be taxed to the extent of any
accumulated income in the Policy. Any surrender amounts that are taxable will be
subject to a 10% additional tax, with certain exceptions.
Generally, the minimum initial premium Hartford will accept is $10,000. The
initial premium will be allocated to Hartford Money Market HLS Fund, Inc. After
the right to cancel period has expired, the amounts allocated will be
transferred to the Funds specified in the Policy Owner's application.
The following Sub-Accounts are available under the Contracts. Opposite each
Sub-Account is the name of the underlying investment for that Sub-Account.
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<S> <C> <C>
Advisers Fund Sub-Account -- shares of Class IA of Hartford Advisers HLS Fund, Inc.
("Hartford Advisers Fund")
Bond Fund Sub-Account -- shares of Class IA of Hartford Bond HLS Fund, Inc.
("Hartford Bond Fund")
Capital Appreciation Fund Sub-Account -- shares of Class IA of Hartford Capital Appreciation HLS
Fund, Inc. ("Hartford Capital Appreciation Fund")
Dividend and Growth Fund Sub-Account -- shares of Class IA of Hartford Dividend and Growth HLS
Fund, Inc. ("Hartford Dividend and Growth Fund")
Index Fund Sub-Account -- shares of Class IA of Hartford Index HLS Fund, Inc.
("Hartford Index Fund")
International Advisers Fund Sub-Account -- shares of Class IA of Hartford International Advisers HLS
Fund, Inc. ("Hartford International Advisers Fund")
International Opportunities Fund Sub-Account -- shares of Class IA of Hartford International Opportunities
HLS Fund, Inc. ("Hartford International Opportunities
Fund")
MidCap Fund Sub-Account -- shares of Class IA of Hartford MidCap HLS Fund, Inc.
("Hartford MidCap Fund")
Money Market Fund Sub-Account -- shares of Class IA of Hartford Money Market HLS Fund, Inc.
("Hartford Money Market Fund")
Mortgage Securities Fund Sub-Account -- shares of Class IA of Hartford Mortgage Securities HLS
Fund, Inc. ("Hartford Mortgage Securities Fund")
Small Company Fund Sub-Account -- shares of Class IA of Hartford Small Company HLS Fund,
Inc. ("Hartford Small Company Fund")
Stock Fund Sub-Account -- shares of Class IA of Hartford Stock HLS Fund, Inc.
("Hartford Stock Fund")
</TABLE>
There is no guaranteed minimum Account Value for a Policy. The Account Value of
a Policy will vary up or down to reflect the investment experience of the Funds
to which premiums have been allocated. The Policy Owner bears the investment
risk for all amounts allocated to the Funds. The Policy continues in effect as
long as the Cash Surrender Value is sufficient to pay the monthly charges under
the Policy ("Deduction Amount"). The Policy may terminate if the Cash Surrender
Value is insufficient to cover a Deduction Amount and, after expiration of a
specified period, no additional premium payments are received by Hartford.
The Policies provide for a Face Amount, which is the minimum death benefit under
the Policy. The Death Benefit may be greater than the Face Amount. The Account
Value will, and under certain circumstances the Death Benefit of the Policy may,
increase or decrease based on the investment experience of the Funds to which
premiums have been allocated. However, while the Policy is in effect, the Death
Benefit will never be less than the Face Amount. At the death of the Insured,
Hartford will pay the Death Proceeds to the beneficiary. The Death Proceeds
equal the Death Benefit less any Indebtedness under the Policy.
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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
POLICY.
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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.
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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.
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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.
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THE DATE OF THIS PROSPECTUS IS MAY 1, 1998.
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2 HARTFORD LIFE INSURANCE COMPANY
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TABLE OF CONTENTS
<TABLE>
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SPECIAL TERMS......................................................... 4
SUMMARY............................................................... 6
THE COMPANY........................................................... 8
THE SEPARATE ACCOUNT.................................................. 8
General............................................................. 8
Funds............................................................... 8
Investment Adviser.................................................. 9
THE POLICY............................................................ 10
Application for a Policy............................................ 10
Premiums............................................................ 10
Allocation of Premiums.............................................. 10
Accumulation Unit Values............................................ 11
DEDUCTIONS AND CHARGES................................................ 11
Chart of Deduction and Charges...................................... 11
Cost of Insurance Charge............................................ 12
Administrative Charge............................................... 12
Annual Maintenance Fee.............................................. 13
Surrender Charge.................................................... 13
Policy Owner Options................................................ 13
Option 1.......................................................... 13
Option 2.......................................................... 14
Other Deductions or Charges......................................... 14
POLICY BENEFITS AND RIGHTS............................................ 14
Death Benefit....................................................... 14
Account Value....................................................... 14
Transfer of Account Value........................................... 15
Policy Loans........................................................ 15
Amount Payable on Surrender of the Policy........................... 16
Partial Surrenders.................................................. 16
Benefits at Maturity................................................ 16
Lapse and Reinstatement............................................. 16
Cancellation and Exchange Rights.................................... 16
Suspension of Valuation, Payments and Transfer...................... 17
LAST SURVIVOR POLICIES................................................ 17
OTHER MATTERS......................................................... 17
Voting Rights....................................................... 17
Statements to Policy Owners......................................... 18
Limit on Right to Contest........................................... 18
Misstatement as to Age and Sex...................................... 18
Settlement Provisions............................................... 18
Beneficiary......................................................... 19
Assignment.......................................................... 19
Dividends........................................................... 19
EXECUTIVE OFFICERS AND DIRECTORS...................................... 20
DISTRIBUTION OF THE POLICIES.......................................... 23
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS.......................... 24
FEDERAL TAX CONSIDERATIONS............................................ 24
General............................................................. 24
Taxation of Hartford and the Separate Account....................... 24
Income Taxation of Policy Benefits.................................. 25
Last Survivor Policies.............................................. 25
Modified Endowment Contracts........................................ 25
Estate and Generation Skipping Taxes................................ 25
Diversification Requirements........................................ 26
Ownership of the Assets in the Separate Account..................... 26
Life Insurance Purchased for Use in Split Dollar Arrangements....... 26
Federal Income Tax Withholding...................................... 27
Non-Individual Ownership of Policies................................ 27
</TABLE>
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HARTFORD LIFE INSURANCE COMPANY 3
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<TABLE>
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Other............................................................... 27
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Life Insurance Purchases by Nonresident Aliens and Foreign
Corporations....................................................... 27
LEGAL PROCEEDINGS..................................................... 27
LEGAL MATTERS......................................................... 27
EXPERTS............................................................... 27
REGISTRATION STATEMENT................................................ 27
APPENDIX A -- SPECIAL INFORMATION FOR POLICIES PURCHASED IN NEW
YORK................................................................ 28
APPENDIX B -- ILLUSTRATIONS OF BENEFITS............................... 30
</TABLE>
THE POLICIES AND/OR POLICY OWNER OPTION 2 MAY NOT BE AVAILABLE IN ALL STATES.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT BE LAWFULLY MADE. NO DEALER OR OTHER PERSON IS AUTHORIZED
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON.
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4 HARTFORD LIFE INSURANCE COMPANY
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SPECIAL TERMS
As used in this Prospectus, the following terms have the indicated meanings:
ACCOUNT VALUE: The current value of the Sub-Accounts plus the value of the Loan
Account under the Policy.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the value of
a Sub-Account.
ANNUAL WITHDRAWAL AMOUNT: The amount of a surrender or partial surrender that is
not subject to the Surrender Charge. This amount in any Policy Year is the
greater of 10% of premiums or 100% of cumulative earnings (Account Value less
premiums paid).
ANNUITY UNIT: An accounting unit of measure used to calculate the amount of
annuity payments.
ATTAINED AGE: The Issue Age plus the number of fully completed Policy Years.
CASH SURRENDER VALUE: The Cash Value less all Indebtedness.
CASH VALUE: The Account Value less any Surrender Charge and any Unamortized Tax
charge due upon surrender.
CODE: The Internal Revenue Code of 1986, as amended.
COVERAGE AMOUNT: The Death Benefit less the Account Value.
DEATH BENEFIT: The greater of (1) the Face Amount specified in the Policy or (2)
the Account Value on the date of death multiplied by a stated percentage as
specified in the Policy.
DEATH PROCEEDS: The amount that Hartford will pay on the death of the Insured.
This equals the Death Benefit less any Indebtedness.
DEDUCTION AMOUNT: A deduction on the Policy Date and on each Monthly Activity
Date for the cost of insurance, Tax Expense charges under Option 1, an
administrative charge and a mortality and expense risk charge.
FACE AMOUNT: On the Policy Date, the Face Amount is the amount shown on the
Policy's Specifications page. Thereafter, the Face Amount is reduced in
proportion to any partial surrenders.
FUNDS: The registered investment management companies in which assets of the
Separate Account may be invested.
GUIDELINE SINGLE PREMIUM: The "Guideline Single Premium" as defined in Section
7702 of the Code.
HOME OFFICE: Currently located at 200 Hopmeadow Street, Simsbury, Connecticut;
however, the mailing address is P.O. Box 2999, Hartford, Connecticut 06104-2999.
INDEBTEDNESS: All monies owed to Hartford by the Policy Owner, including all
outstanding loans on the Policy, any interest due or accrued and any unpaid
Deduction Amount or annual maintenance fee arising during a grace period.
INSURED: The person on whose life the Policy is issued.
ISSUE AGE: As of the Policy Date, the Insured's age on Insured's last birthday.
LOAN ACCOUNT: An account in Hartford's General Account, established for any
amounts transferred from the Sub-Accounts for requested loans. The Loan Account
credits a fixed rate of interest that is not based on the investment experience
of the Separate Account.
MONTHLY ACTIVITY DATE: The day of each month on which any deductions or charges
are subtracted from the Account Value of the Policy. Monthly Activity Dates
occur on the same day of the month as the Policy Date.
POLICY: For a Policy issued to an individual, the Policy is the individual
Policy and any endorsements or riders. For a group Policy, the Policy is a
certificate evidencing a participatory interest in a group Policy and any
endorsements or riders. Any references in this Prospectus to a Policy includes
the certificate.
POLICY ANNIVERSARY: The anniversary of the Policy Date.
POLICY DATE: The date from which Policy Anniversaries and Policy Years are
measured.
POLICY LOAN RATE: The interest rate charged on Policy loans.
POLICY OWNER: The owner of the Policy
POLICY OWNER OPTIONS: The Policy Owner may elect one of two options offered by
Hartford to pay Mortality and Expense Risk charges and certain tax related
charges. The Policy Owner must elect the option at the time the Policy is issued
and the option cannot be changed once the Policy is issued. The following
options are available:
OPTION 1: ASSET BASED CHARGES: Under this option the Policy Owner elects to
pay a Mortality and Expense Risk charge that is deducted monthly from
Account Value at an annual rate of .90% in Policy Years 1 through 10 and at
an annual rate of .50% in Policy Years 11 and beyond; a Tax Expense charge
that is also deducted monthly at an annual rate of .40% for the first 10
Policy Years and an Unamortized Tax charge that is imposed during the first
9 Policy Years on surrenders or partial surrenders according to the rate set
forth in "Deductions and Charges -- Policy Owner Options -- Unamortized Tax
Charge" page 13. See "Deductions and Charges -- Policy Owner Options" page
13.
OPTION 2: FRONTED CHARGES: Under this option the Policy Owner elects to pay
a Mortality and Expense Risk charge that is deducted monthly from Account
Value at an annual rate of .65% in Policy Years 1 through 10 and an annual
rate of .50% in Policy Years 11 and beyond
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HARTFORD LIFE INSURANCE COMPANY 5
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and a Tax Expense charge that is deducted from any Premium payment in all
Policy Years at an annual rate of 4.0%. This option is not available in all
states. See "Deductions and Charges -- Policy Owner Options" page 13.
POLICY YEAR: The twelve months between Policy Anniversaries.
SEPARATE ACCOUNT: Separate Account Five, an account established by Hartford to
separate the assets funding the Policies from other assets of Hartford.
SUB-ACCOUNT: The subdivisions of the Separate Account.
SURRENDER CHARGE: A charge which may be assessed upon surrender of the Policy or
partial surrenders in excess of the Annual Withdrawal Amount.
VALUATION DAY: The date on which the Sub-Account is valued. The Valuation Day is
every day the New York Stock Exchange is open for trading. The value of the
Separate Account is determined at the close of the New York Stock Exchange
(generally 4:00 p.m. Eastern Time) on such days.
VALUATION PERIOD: The period between the close of business on successive
Valuation Days.
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6 HARTFORD LIFE INSURANCE COMPANY
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SUMMARY
THE POLICIES
The Policies are life insurance policies with death benefits, cash values
and other traditional life insurance features. The Policies are "variable."
Unlike the fixed benefits of ordinary whole life insurance, the Account Value
will, and the Death Benefit may, increase or decrease based on the investment
experience of the Funds to which premium payments have been allocated. The
Policies are credited with units ("Accumulation Units") to calculate Account
Values. The Policy Owner may transfer the Account Values among the Funds.
The Policies can be issued on a single life or "last survivor" basis. For a
discussion of how last survivor Policies operate differently from single life
Policies, see "Last Survivor Policies," page 17.
THE SEPARATE ACCOUNT AND THE FUNDS
Separate Account Five ("Separate Account") funds the variable life insurance
Policies offered by this Prospectus. Hartford established the Separate Account
pursuant to Connecticut insurance law and it is organized as a unit investment
trust registered under the Investment Company Act of 1940. The Policies
currently offer 12 Sub-Accounts each investing exclusively in a Fund. The
investment objectives of the Funds are as set forth in "The Separate Account --
Funds," page 8. Applicants should read the Funds' prospectuses accompanying this
Prospectus in connection with the purchase of a Policy.
The following table shows annual Fund operating expenses for 1997:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of net assets)
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OTHER
MANAGEMENT EXPENSES
FEES (ABSENT ANY TOTAL FUND
(ABSENT ANY EXPENSE OPERATING
FEE WAIVERS) REIMBURSEMENTS) EXPENSES (1)
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Hartford Bond Fund....... 0.490% 0.020% 0.510%
Hartford Stock Fund...... 0.430% 0.020% 0.450%
Hartford Money Market
Fund.................... 0.425% 0.015% 0.440%
Hartford Advisers Fund... 0.610% 0.020% 0.630%
Hartford Capital
Appreciation Fund....... 0.620% 0.020% 0.640%
Hartford Mortgage
Securities Fund......... 0.425% 0.025% 0.450%
Hartford Index Fund...... 0.375% 0.015% 0.390%
Hartford International
Opportunities Fund...... 0.680% 0.090% 0.770%
<CAPTION>
OTHER
MANAGEMENT EXPENSES
FEES (ABSENT ANY TOTAL FUND
(ABSENT ANY EXPENSE OPERATING
FEE WAIVERS) REIMBURSEMENTS) EXPENSES (1)
------------ --------------- ------------
<S> <C> <C> <C>
Hartford Dividend &
Growth Fund............. 0.660% 0.020% 0.680%
Hartford International
Advisers Fund........... 0.750% 0.120% 0.870%
Hartford Small Company
Fund.................... 0.750% 0.020% 0.770%
Hartford MidCap Fund
(2)..................... 0.750% 0.040% 0.790%
</TABLE>
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(1) Management Fees generally represent the fees paid to the investment adviser
or its affiliate for investment and administrative services provided. Other
Expenses are expenses (other than Management Fees) which are deducted from
the fund including legal, accounting and custodian fees. For a complete
description of the nature of the services provided in consideration of the
operating expenses deducted, please see the Fund prospectuses.
(2) The Hartford MidCap Fund is a new Fund. Operating expenses are based on
annualized estimates of such expenses to be incurred in the current fiscal
year.
The investment adviser for all the Funds is HL Investment Advisors, Inc., an
affiliate of Hartford. HL Investment Advisors, Inc. retains a sub-investment
adviser with respect to some of the Funds, and has entered into an investment
services agreement with respect to some of the Funds. See "The Separate
Account," page 8.
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Policy Owner may choose a
minimum initial premium of 80%, 90% or 100% of the Guideline Single Premium
(based on the Face Amount). Under current underwriting rules, which are subject
to change, applicants between the ages of 35 and 80 may be eligible for
simplified underwriting without a medical examination if they meet simplified
underwriting standards. For applicants who are below age 35 or above age 80, or
who do not meet simplified underwriting eligibility, full underwriting applies,
except that substandard underwriting applies in those cases that represent
substandard risks according to customary underwriting guidelines.
DEDUCTIONS AND CHARGES
On the Policy Date and on each Monthly Activity Date, Hartford will deduct a
Deduction Amount from the Account Value. The Deduction Amount will be made pro
rata from each Sub-Account. The Deduction Amount includes a cost of insurance
charge, a Tax Expense charge
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HARTFORD LIFE INSURANCE COMPANY 7
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under Option 1, an administrative charge and a mortality and expense risk
charge. If the Cash Surrender Value is not sufficient to cover a Deduction
Amount due on any Monthly Activity Date the Policy may lapse. See "Deductions
and Charges" page 11, and "Policy Benefits and Rights -- Lapse and
Reinstatement," page 16.
If the Account Value on a Policy Anniversary or on any date the Policy is
surrendered is less than $50,000, Hartford will deduct an annual maintenance fee
of $30. See "Deductions and Charges -- Annual Maintenance Fee," page 13.
The Policy Owner may pay certain deductions and charges by electing one of
two available options at the time the Policy is issued. Once elected, the Policy
Owner Options cannot be changed:
Under Option 1:
- - a Mortality and Expense Risk charge is deducted monthly from Account Value at
an annual rate of .90% in Policy Years 1 through 10 and at an annual rate of
.50% in Policy Years 11 and beyond.
- - a Tax Expense charge is also deducted monthly at an annual rate of .40% for
the first 10 Policy Years.
- - an Unamortized Tax charge is imposed during the first 9 Policy Years on
surrenders or partial surrenders according to the rate set forth in
"Deductions and Charges -- Policy Owner Options -- Unamortized Tax Charge"
page 13.
Under Option 2: (May not be available in all states)
- - a Mortality and Expense Risk charge is deducted monthly from Account Value at
an annual rate of .65% in Policy Years 1 through 10 and an annual rate of .50%
in Policy Years 11 and beyond.
- - a Tax Expense charge is deducted from any Premium payment in all Policy Years
at an annual rate of 4.0%.
Hartford may set up a provision for income taxes against the assets of the
Separate Account. See "Deductions and Charges -- Taxes Charged Against the
Separate Account," page 14, and "Federal Tax Considerations," page 24.
Applicants should review the Funds' prospectuses accompanying this
Prospectus for a description of the charges assessed against the assets of the
Funds.
Upon surrender of the Policy and partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. See "Deductions and
Charges -- Surrender Charge," page 13.
For a discussion of the tax consequences of surrender of the Policy or a
partial surrender, see "Federal Tax Considerations," page 24.
DEATH BENEFIT
The Policies provide for a Face Amount which is the minimum Death Benefit
under the Policy. The Death Benefit may be greater than the Face Amount. At the
death of the Insured, Hartford will pay the Death Proceeds to the beneficiary of
the Policy. See "Policy Benefits and Rights -- Death Benefit," page 14.
ACCOUNT VALUE
The Account Value of the Policy will increase or decrease to reflect the
investment experience of the Funds applicable to the Policy and deductions for
the monthly Deduction Amount. There is no minimum guaranteed Account Value and
the Policy Owner bears the risk of the investment in the Funds. See "Policy
Benefits and Rights -- Account Value," page 14.
POLICY LOANS
A Policy Owner may obtain one or both types of cash loans from Hartford.
Both types of loans are secured by the Policy. At the time a loan is requested,
the aggregate amount of all loans (including the currently applied for loan) may
not exceed 90% of the Cash Value. See "Policy Benefits and Rights -- Policy
Loans," page 15.
LAPSE
A Policy may terminate if the Cash Surrender Value on any Monthly Activity
Date is less than the required Deduction Amount. Hartford will give written
notice to the Policy Owner and a 61-day grace period during which additional
amounts may be paid to continue the Policy. See "Policy Benefits and Rights --
Policy Loans," page 15, and "Policy Benefits and Rights -- Lapse and
Reinstatement," page 16.
CANCELLATION AND EXCHANGE RIGHTS
A Policy Owner has a limited right to return the Policy for cancellation. If
the Policy Owner returns the Policy to Hartford or to the agent who sold the
Policy, to be canceled within ten days after delivery of the Policy to the
Policy Owner (in certain cases, this free-look period is longer), Hartford will
return to the Policy Owner, within seven days thereafter, the greater of the
premiums paid for the Policy, less any Indebtedness, or the sum of (1) the
Account Value, less any indebtedness, on the date the returned Policy is
received by Hartford or its agent and (2) any deductions under the Policy or by
the Funds for taxes, charges or fees.
In addition, once the Policy is in force, it may be exchanged during the
first 24 months after its issuance for a permanent life insurance Policy on the
life of the Insured without submitting proof of insurability. See "Policy
Benefits and Rights -- Cancellation and Exchange Rights," page 16.
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8 HARTFORD LIFE INSURANCE COMPANY
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TAX CONSEQUENCES
The current federal tax law generally excludes all death benefit payments
from the gross income of the Policy beneficiary. The Policies generally will be
treated as modified endowment contract. This status does not affect the
Policies' classification as life insurance, nor does it affect the exclusion of
death benefit payments from gross income. However, loans, distributions or other
amounts received under a modified endowment contract are taxed to the extent of
accumulated income in the Policy (generally, the excess of Account Value over
premiums paid) and may be subject to a 10% penalty tax. See "Federal Tax
Considerations," page 24.
THE COMPANY
Hartford Life Insurance Company ("Hartford") 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. Hartford was originally incorporated under the laws of Massachusetts
on June 5, 1902, and was subsequently redomiciled to Connecticut. Its offices
are located in Simsbury, Connecticut; however, its mailing address is P.O. Box
2999, Hartford, CT 06104-2999. Hartford is a subsidiary of Hartford Fire
Insurance Company, one of the largest multiple lines insurance carriers in the
United States. Hartford is ultimately controlled by The Hartford Financial
Services Group, Inc., a Delaware Corporation.
Hartford is rated A+ (superior) by A.M. Best and Company, Inc., on the basis
of its financial soundness and operating performance. Hartford is rated AA by
Standard & Poor's 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. The ratings apply to Hartford's ability to meet its insurance
obligations, including those described in this Prospectus.
THE SEPARATE ACCOUNT
GENERAL
Separate Account Five ("Separate Account") is a separate account of Hartford
established on August 17, 1994 pursuant to the insurance laws of the State of
Connecticut and it is organized as a unit investment trust registered with the
Securities and Exchange Commission under the Investment Company Act of 1940. The
Separate Account meets the definition of "separate account" under federal
securities law. Under Connecticut law, the assets of the Separate Account are
held exclusively for the benefit of Policy Owners and persons entitled to
payments under the Policies. The assets of the Separate Account are not
chargeable with liabilities arising out of any other business which Hartford may
conduct.
FUNDS
The assets of each Sub-Account are invested exclusively in shares of Class
IA of one of the Funds. A Policy Owner may allocate premiums among the Funds.
Policy Owners should review the following brief descriptions of the investment
objectives of the Funds in connection with that allocation. Policy Owners are
also advised to read the Funds' prospectus accompanying this Prospectus for more
detailed information. There is no assurance that any of the Funds will achieve
its stated objectives.
The Funds may not be available in all states.
HARTFORD ADVISERS FUND
Seeks maximum long-term total rate of return by investing in common stocks
and other equity securities, bonds and other debt securities, and money market
instruments.
HARTFORD BOND FUND
Seeks maximum current income consistent with preservation of capital by
investing primarily in fixed-income securities. Up to 20% of the total assets of
this Fund may be invested in debt securities rated in the highest category below
investment grade ("Ba" by Moody's Investor Services, Inc. or "BB" by Standard &
Poor's) or, if unrated, are determined to be of comparable quality by the Fund's
investment adviser. Securities rated below investment grade are commonly
referred to as "high yield-high risk securities" or "junk bonds." For more
information concerning the risks associated with investing in such securities,
please refer to the section in the accompanying prospectus for the Funds
entitled "Hartford Bond Fund -- Investment Policies."
HARTFORD CAPITAL APPRECIATION FUND
Seeks growth of capital by investing in equity securities selected solely on
the basis of potential for capital appreciation.
HARTFORD DIVIDEND AND GROWTH FUND
Seeks a high level of current income consistent with growth of capital and
reasonable investment risk.
HARTFORD INDEX FUND
Seeks to provide investment results which approximate the price and yield
performance of publicly-traded common
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HARTFORD LIFE INSURANCE COMPANY 9
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stocks in the aggregate, as represented by the Standard & Poor's 500 Composite
Stock Price Index.*
HARTFORD INTERNATIONAL ADVISERS FUND
Seeks maximum long-term total return consistent with prudent investment risk
by investing in a portfolio of equity, debt and money market securities.
Securities in which the Fund invests primarily will be denominated in non-U.S.
currencies and will be traded in non-U.S. markets.
HARTFORD INTERNATIONAL OPPORTUNITIES FUND
Seeks growth of capital by investing primarily in equity securities issued
by non-U.S. companies.
HARTFORD MIDCAP FUND
Seeks to achieve long-term capital growth through capital appreciation by
investing primarily in equity securities.
HARTFORD MORTGAGE SECURITIES FUND
Seeks maximum current income consistent with safety of principal and
maintenance of liquidity by investing primarily in mortgage-related securities,
including securities issued by the Government National Mortgage Association.
HARTFORD SMALL COMPANY FUND
Seeks growth of capital by investing primarily in equity securities selected
on the basis of potential for capital appreciation.
HARTFORD STOCK FUND
Seeks long-term growth by investing primarily in equity securities.
HARTFORD MONEY MARKET FUND
Seeks maximum current income consistent with liquidity and preservation of
capital.
All of the Funds are organized as corporations under the laws of the State
of Maryland and are registered as diversified open-end management companies
under the Investment Company Act of 1940. Each Fund continually issues an
unlimited number of full and fractional shares of beneficial interest in the
Fund. Such shares are offered to separate accounts, including the Separate
Account, established by Hartford or one of its affiliated companies specifically
to fund the Policies and other policies or contracts issued by Hartford or its
affiliates, as permitted by the Investment Company Act of 1940.
It is conceivable that in the future it may be disadvantageous for variable
life insurance separate accounts and variable annuity separate accounts to
invest in the Funds simultaneously. Although neither Hartford nor the Funds
currently foresee any such disadvantages either to variable life insurance
Policy Owners or variable annuity contract owners, the Funds' Board of Directors
intends to monitor events in order to identify any material conflicts between
variable life Policy Owners and variable annuity contract owners and to
determine what action, if any, should be taken in response thereto. If the Board
of Directors were to conclude that separate funds should be established for
variable life insurance and variable annuity separate accounts, Hartford will
bear the attendant expenses.
All investment income of, and other distributions to, each Sub-Account
arising from the applicable Fund are reinvested in shares of that Fund at net
asset value. The income and both realized gains or losses on the assets of each
Sub-Account are therefore separate and are credited to or charged against the
Sub-Account without regard to income, gains or losses from any other Sub-Account
or from any other business of Hartford. Hartford will purchase shares in the
Funds in connection with premiums allocated to the applicable Sub-Account in
accordance with Policy Owners' directions and will redeem shares in the Funds to
meet Policy obligations or make adjustments in reserves, if any. The Funds are
required to redeem Fund shares at net asset value and to make payment within
seven days.
Hartford reserves the right, subject to compliance with the law as then in
effect, to make additions to, deletions from, or substitutions for the Separate
Account and its Sub-Accounts which fund the Policies. No substitution of
securities will take place without notice to and consent of Policy Owners and
without prior approval of the Securities and Exchange Commission to the extent
required by the Investment Company Act of 1940. Subject to Policy Owner
approval, Hartford also reserves the right to end the registration under the
Investment Company Act of 1940 of the Separate Account or any other separate
accounts of which it is the depositor and which may fund the Policies.
Each Fund is subject to investment restrictions which may not be changed
without the approval of a majority of the shareholders of the Fund. See the
Funds' prospectuses accompanying this Prospectus.
INVESTMENT ADVISER
All of the Funds are sponsored by Hartford and are incorporated under the
laws of the State of Maryland. HL Investment Advisors, Inc. ("HL Advisors")
serves as the investment manager for each of the Funds.
* "STANDARD & POOR'S-REGISTERED TRADEMARK-", "S&P-REGISTERED TRADEMARK-", "S&P
500-REGISTERED TRADEMARK-", "STANDARD & POOR'S 500", AND "500" ARE TRADEMARKS
OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY HARTFORD.
THE HARTFORD INDEX FUND IS NOT SPONSORED, ENDORSED, SOLD OR PROMOTED BY
STANDARD & POOR'S AND STANDARD &POOR'S MAKES NO REPRESENTATION REGARDING THE
ADVISABILITY OF INVESTING IN THE HARTFORD INDEX FUND.
<PAGE>
10 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Wellington Management Company, L.L.P. ("Wellington Management") serves as
sub-investment adviser for Hartford Advisers Fund, Hartford Capital Appreciation
Fund, Hartford Dividend and Growth Fund, Hartford International Advisers Fund,
Hartford International Opportunities Fund, Hartford Small Company Fund, Hartford
Stock Fund and Hartford MidCap Fund.
In addition, HL Advisors has entered an investment services agreement with
Hartford Investment Management Company, Inc., ("HIMCO"), pursuant to which HIMCO
will provide certain investment services to Hartford Bond Fund, Hartford Index
Fund, Hartford Mortgage Securities Fund, and Hartford Money Market Fund.
A full description of the Funds, their investment policies and restrictions,
risks, charges and expenses and all other aspects of their operation is
contained in the accompanying Funds' prospectuses which should be read in
conjunction with this Prospectus before investing and in the Funds' Statement of
Additional Information which may be ordered from Hartford.
THE POLICY
APPLICATION FOR A POLICY
Individuals wishing to purchase a Policy must submit an application to
Hartford. A Policy will be issued only on the lives of Insureds age 90 and under
who supply evidence of insurability satisfactory to Hartford. Acceptance is
subject to Hartford's underwriting rules and Hartford reserves the right to
reject an application for any reason. IF AN APPLICATION FOR A POLICY IS
REJECTED, THEN YOUR INITIAL PREMIUM WILL BE RETURNED ALONG WITH AN ADDITIONAL
AMOUNT FOR INTEREST, BASED ON THE CURRENT RATE BEING CREDITED BY HARTFORD. No
change in the terms or conditions of a Policy will be made without the consent
of the Policy Owner.
The Policy will be effective on the Policy Date only after Hartford has
received all outstanding delivery requirements and received the initial premium.
The Policy Date is the date used to determine all future cyclical transactions
on the Policy, e.g., Monthly Activity Date, Policy Months and Policy Years. The
Policy Date may be prior to, or the same as, the date the Policy is issued
("Issue Date").
If the Coverage Amount is over then current limits established by Hartford,
the initial payment will not be accepted with the application. In other cases
where Hartford receives the initial payment with the application, Hartford will
provide fixed conditional insurance during underwriting according to the terms
of conditional receipt established by Hartford. The fixed conditional insurance
will be the insurance applied for, up to a maximum that varies by age. If no
fixed conditional insurance was in effect, on Policy delivery, Hartford will
require a sufficient payment to place the insurance in force.
PREMIUMS
The Policy permits the Policy Owner to pay a large single premium and,
subject to restrictions, additional premiums. The Policy Owner may choose a
minimum initial premium of 80%, 90% or 100% of the Guideline Single Premium
(based on the Face Amount). Under current underwriting rules, which are subject
to change, applicants between ages 35 and 80 may be eligible for simplified
underwriting without a medical examination if they meet simplified underwriting
standards as evidenced in their responses in the application. For applicants who
are below age 35 or above age 80, or who do not meet simplified underwriting
eligibility, full underwriting applies, except that substandard underwriting
applies only in those cases that represent substandard risks according to
customary underwriting guidelines.
Additional premiums are allowed if they do not cause the Policy to fail to
meet the definition of a life insurance Policy under Section 7702 of the Code.
The amount and frequency of additional premium payments will affect the Cash
Value and the amount and duration of insurance. Hartford may require evidence of
insurability for any additional premiums which increase the Coverage Amount.
Generally, the minimum initial premium Hartford will accept is $10,000. Hartford
may accept less than $10,000 under certain circumstances. Premium which does not
meet the tax qualification guidelines for life insurance under the Code will not
be applied to the Policy.
ALLOCATION OF PREMIUMS
Within three business days of receipt of a completed application and the
initial premium payment at Hartford's Home Office, Hartford will allocate the
entire premium payment to the Hartford Money Market Fund. After the expiration
of the right to cancel period, the Account Value in Hartford Money Market Fund
will be allocated among the Funds in whole percentages to purchase Accumulation
Units in the applicable Sub-Accounts as the Policy Owner directs in the
application. Premiums received on or after the expiration of the right to cancel
period will be allocated among the Sub-Accounts to purchase Accumulation Units
in such Sub-Accounts as directed by the Policy Owner or, in the absence of
directions, as specified in the original application. The number of Accumulation
Units in each Sub-Account to be credited to a Policy (including the initial
allocation to Hartford Money Market Fund) will be determined first by
multiplying the premium payment 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
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 11
- --------------------------------------------------------------------------------
Accumulation Unit Value of that particular Sub-Account next computed after
receipt of the premium payment.
ACCUMULATION UNIT VALUES
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund and will be determined on each
Valuation Day by multiplying the Accumulation Unit Value of the particular
Sub-Account on the preceding Valuation Day by a "Net Investment Factor" for that
Sub-Account for the Valuation Period then ended. The Net Investment Factor for
each Sub-Account is the net asset value per share of the corresponding Fund at
the end of the Valuation Period (plus the per share dividends or capital gains
by that Fund if the ex-dividend date occurs in the Valuation Period then ended)
divided by the net asset value per share of the corresponding Fund at the
beginning of the Valuation Period. Refer to the Funds' prospectuses accompanying
this Prospectus for a description of how the assets of each Fund are valued,
since such determination has a direct bearing on the Accumulation Unit Value of
the Sub-Account and therefore the Account Value of a Policy. See, also, "Policy
Benefits and Rights -- Account Value," page 14.
All valuations in connection with a Policy, e.g., with respect to
determining Account Value and Cash Surrender Value and in connection with Policy
Loans, or calculation of Death Benefits, or with respect to determining the
number of Accumulation Units to be credited to a Policy with each premium, other
than the initial premium, will be made on the date the request or payment is
received by Hartford at its Home Office if such date is a Valuation Day;
otherwise such determination will be made on the next succeeding date which is a
Valuation Day.
DEDUCTIONS AND CHARGES
The deduction or charges associated with this Policy are subtracted,
depending on the type of deduction or charge, from Premium payments as they are
made, upon surrender or partial surrender of the Policy, on the Policy
Anniversary Date or on a monthly pro rated basis from each Sub-Account
("Deduction Amount").
Deductions are taken from Premium payments before allocations to the
Sub-Accounts are made. Monthly Deduction Amounts are subtracted on the Policy
Date and on each Monthly Activity Date after the Policy Date to cover charges
and expenses incurred in connection with a Policy. Each Deduction Amount will be
subtracted pro rata from each Sub-Account such that the proportion of Account
Value of the Policy attributable to each Sub-Account remains the same before and
after the deduction. The Deduction Amount will vary from month to month. If the
Cash Surrender Value is not sufficient to cover a Deduction Amount due on any
Monthly Activity Date, the Policy may lapse. See "Policy Benefits and Rights--
Lapse and Reinstatement," page 16.
The Policy Owner may elect one of two options offered by Hartford to pay the
Mortality and Expense Risk charge, the Tax Expense charge and any Unamortized
Tax charge. Once selected, the option may not be changed. Option 2 may not be
available in all states.
The following chart illustrates the charges and deductions associated with
this Policy. For a more detailed discussion see the descriptions below:
<TABLE>
<CAPTION>
DEDUCTION OR CHARGE DEDUCTED FROM ALL POLICIES WHEN DEDUCTION IS MADE AMOUNT DEDUCTED
---------------------- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C>
Cost of Insurance Yes Monthly Individualized depending on age,
sex and other factors
Administrative Charge Yes Monthly .25% of amounts allocated to the
Separate Account
Annual Maintenance Fee Only Policies with an Account On the Policy Anniversary Date or $30.00
Value of less than $50,000 on the upon surrender of the Policy
Policy Anniversary Date or date of
surrender
Surrender Charge Yes Upon surrender or partial A percentage of the amount
surrender of the Policy surrendered, depending on the
Policy Year, which is attributable
to premiums paid
</TABLE>
<PAGE>
12 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DEDUCTION OR CHARGE DEDUCTED FROM ALL POLICIES WHEN DEDUCTION IS MADE AMOUNT DEDUCTED
---------------------- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C> <C>
Tax Expense Charge Yes Under Option 1: Monthly Under Option 1: .40% of Account
Under Option 2: Receipt of premium Value for Policy Years 1-10
payment Under Option 2: 4% of each premium
payment in all Policy Years
Mortality and Expense Yes Monthly Under Option 1: .90% of Account
Risk Charge Value in Policy Years 1-10 and
.50% for Policy Years 11 and
beyond.
Under Option 2: .65% of Account
Value in Policy Years 1-10 and
.50% for Policy Years 11 and
beyond
Unamortized Tax Charge No, only under Option 1 Upon surrender or partial A percentage of the Account Value
surrender of the Policy depending on the Policy Year the
surrender takes place.
</TABLE>
COST OF INSURANCE CHARGE
The cost of insurance charge covers Hartford's anticipated mortality costs
for standard and substandard risks. Current cost of insurance rates are lower
after the tenth Policy Year and are based on whether 100%, 90% or 80% of the
Guideline Single Premium has been paid at issue. The current cost of insurance
charge will not exceed the guaranteed cost of insurance charge. This charge is a
guaranteed maximum monthly rate multiplied by the Coverage Amount on the Policy
Date or any Monthly Activity Date. For standard risks, the guaranteed cost of
insurance rate is 125% of the 1980 Commissioners Standard Ordinary Smoker/Non-
Smoker Mortality Table through age 90, grading down to 100% of the Commissioners
Standard Ordinary Smoker/ Non-Smoker Mortality Table at age 100 (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 Policy; however,
Hartford reserves the right to use rates less than those shown in the Table.
Substandard risks and Policies issued employing simplified underwriting
procedures will be charged at a higher cost of insurance rate that will not
exceed rates based on a multiple of the 1980 Commissioners Standard Ordinary
Smoker/ Non-Smoker Mortality Table (age last birthday). The multiple will be
based on the Insured's substandard rating.
The Coverage Amount is first set on the Policy Date and then on each Monthly
Activity Date. On such days, it is the Face Amount less the Account Value
subject to a Minimum Coverage Amount. The Coverage Amount remains level between
the Monthly Activity Dates. The Coverage Amount may be adjusted to continue to
qualify the Policies as life insurance Policies under the current federal tax
law. Under that law, the Minimum Coverage Amount is a stated percentage of the
Account Value of the Policy determined on each Monthly Activity Date. The
percentages vary according to the attained age of the Insured.
EXAMPLE:
Face Amount = $100,000
Account Value on the Monthly Activity Date = $70,000
Insured's attained age = 60
Minimum Coverage Amount percentage for age 60 = 30%
On the Monthly Activity Date, the Coverage Amount is $30,000. This is
calculated by subtracting the Account Value on the Monthly Activity Date
($70,000) from the Face Amount ($100,000), subject to a possible Minimum
Coverage Amount adjustment. This Minimum Coverage Amount is determined by taking
a percentage of the Account Value on the Monthly Activity Date. In this case,
the Minimum Coverage Amount is $21,000 (30% of $70,000). Since $21,000 is less
than the Face Amount less the Account Value ($30,000), no adjustment is
necessary. Therefore, the Coverage Amount will be $30,000.
Assume that the Account Value in the above example was $90,000. The Minimum
Coverage Amount would be $27,000 (30% of $90,000). Since this is greater than
the Face Amount less the Account Value ($10,000), the Coverage Amount for the
Policy Month is $27,000. (For an explanation of the Death Benefit, see "Policy
Benefits and Rights -- Death Benefit," page 14.)
Because the Account Value and, as a result, the Coverage Amount under a
Policy may vary from month to month, the cost of insurance charge may also vary
on each Monthly Activity Date.
ADMINISTRATIVE CHARGE
Hartford will deduct monthly from the Account Value attributable to the
Separate Account an administrative
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 13
- --------------------------------------------------------------------------------
charge equal to an annual rate of 0.25%. This charge compensates Hartford for
administrative expenses incurred in the administration of the Separate Account
and the Policies.
ANNUAL MAINTENANCE FEE
If the Account Value on a Policy Anniversary or on the date the Policy is
surrendered is less than $50,000, Hartford will deduct on such date an annual
maintenance fee of $30. This fee will help reimburse Hartford for administrative
and maintenance costs of the Policies. The sum of the monthly administrative
charges and the annual maintenance fee will not exceed the cost Hartford incurs
in providing administrative services under the Policies. Hartford reserves the
right to waive the Annual Maintenance Fee under certain conditions.
SURRENDER CHARGE
Upon surrender of the Policy or partial surrenders in excess of the Annual
Withdrawal Amount, a Surrender Charge may be assessed. In Policy Years 1 through
3, this charge is 7.5% of surrendered Account Value attributable to premiums
paid. In Policy Years 4 through 5, this charge is 6%. In Policy Years 6 through
7, this charge is 4%. In Policy Years 8 through 9, this charge is 2%. After the
ninth Policy Year, there is no charge.
In determining the Surrender Charge and any Unamortized Tax charge discussed
below, any surrender or partial surrender during the first ten Policy Years will
be deemed first from premiums paid and then from earnings. If an amount equal to
all premiums paid has been withdrawn, no charge will be assessed on a surrender
of the remaining Account Value.
The Surrender Charge is imposed to cover a portion of the sales expense
incurred by Hartford in distributing the Policies. This expense includes agents
commissions, advertising and the printing of prospectuses. See "Policy Benefits
and Rights -- Amount Payable on Surrender of the Policy," page 16.
POLICY OWNER OPTIONS
In addition to the deductions and charges described above, the Policy Owner,
at the time the Policy is issued, will elect one of two options described below
to pay charges relating to certain taxes and mortality and expense risk charges.
The option selected by the Policy Owner may affect Policy Value.
OPTION 1: ASSET-BASED CHARGES:
Under this payment option, the Policy Owner will pay:
MORTALITY AND EXPENSE RISK CHARGE: Hartford will deduct monthly from the
Account Value attributable to the Separate Account for Policy Years 1 through 10
a charge equal to an annual rate of 0.90% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50% for the
mortality risks and expense risks Hartford assumes in relation to the variable
portion of the Policies. The mortality risk assumed is that the cost of
insurance charges specified in the Policy will be insufficient to meet claims.
Hartford also assumes a risk that the Face Amount (the minimum Death Benefit)
will exceed the Coverage Amount on the date of death plus the Account Value on
the date Hartford receives written notice of death. The expense risk assumed is
that expenses incurred in issuing and administering the Policies will exceed the
administrative charges set in the Policy. Hartford may profit from the mortality
and expense risk charge and may use any profits for any proper purpose,
including any difference between the cost it incurs in distributing the Policies
and the proceeds of the Surrender Charge. The mortality and expense risk charge
is deducted while the Policy is in force, including the duration of a payment
option.
TAX EXPENSE CHARGE: Hartford will deduct monthly from the Account Value a
charge equal to an annual rate of 0.40% for the first ten Policy Years. This
charge compensates Hartford for premium taxes imposed by various states and
local jurisdictions and for the cost of the capitalization of certain policy
acquisition expenses under Section 848 of the Code. The charge includes a
premium tax deduction of 0.25% and Section 848 costs of 0.15%. The 0.25% premium
tax deduction over ten Policy Years approximates Hartford's average expenses for
state and local premium taxes (2.5%). Premium taxes vary, ranging from zero to
more than 4.0%. The premium tax deduction is made whether or not any premium tax
applies. The deduction may be higher or lower than the premium tax imposed.
However, Hartford does not expect to make a profit from this deduction. The
0.15% charge helps reimburse Hartford for approximate expenses incurred under
Section 848 of the Code.
UNAMORTIZED TAX CHARGE: Under this option, during the first nine Policy
Years, an Unamortized Tax charge will be imposed on surrender or partial
surrenders. The Unamortized Tax charge is shown below, as a percentage of
Account Value, at the end of each Policy Year:
<TABLE>
<CAPTION>
POLICY
YEAR RATE
------ -----
<S> <C>
1 2.25%
2 2.00%
3 1.75%
4 1.50%
5 1.25%
6 1.00%
7 0.75%
8 0.50%
9 0.25%
10+ 0.00%
</TABLE>
After the ninth Policy Year, no Unamortized Tax charge will be imposed.
<PAGE>
14 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
OPTION 2: FRONTED CHARGES:
Under this option, the Policy Owner will pay:
MORTALITY AND EXPENSE RISK CHARGE: In Policy Years 1 through 10, Hartford
will deduct monthly from the Account Value attributable to the Separate Account
a charge equal to an annual rate of 0.65% for the mortality risks and expense
risks Hartford assumes in relation to the variable portion of the Policies. In
Policy Years 11 and beyond, the charge drops to an annual rate of 0.50%. The
mortality risk assumed is that the cost of insurance charges specified in the
Policy will be insufficient to meet claims. Hartford also assumes a risk that
the Face Amount (the minimum Death Benefit) will exceed the Coverage Amount on
the date of death plus the Account Value on the date Hartford receives written
notice of death. The expense risk assumed is that expenses incurred in issuing
and administering the Policies will exceed the administrative charges set in the
Policy. Hartford may profit from the mortality and expense risk charge and may
use any profits for any proper purpose, including any difference between the
cost it incurs in distributing the Policies and the proceeds of the Surrender
Charge. The mortality and expense risk charge is deducted while the Policy is in
force, including the duration of a payment option.
TAX EXPENSE CHARGE: Hartford will deduct from Premium payments a tax
expense charge equal to an annual rate of 4.0% for all Policy Years. This charge
compensates Hartford for premium taxes imposed by various states and local
jurisdictions and for the cost of capitalization of certain policy acquisition
expenses under Section 848 of the Code. The charge includes a premium tax
deduction of 2.5% and a Section 848 cost of 1.5%. The premium tax deduction
approximates Hartford's average expenses for state and local premium taxes.
Premium taxes vary, ranging from zero to more than 4.0%. The premium tax
deduction is made whether or not any premium tax applies. The deduction may be
higher or lower than the premium tax imposed. However, Hartford does not expect
to make a profit from this deduction. The 0.15% charge helps reimburse Hartford
for approximate expenses incurred under Section 848 of the Code.
This Option may not be available in all states.
OTHER DEDUCTIONS OR CHARGES
CHARGES AGAINST THE FUNDS: The Separate Account purchases shares of the
Funds at net asset value. The net asset value of the Fund shares reflects
investment advisory fees and administrative expenses already deducted from the
assets of the Funds. These charges are described in the Funds' prospectuses
accompanying this Prospectus.
TAXES CHARGED AGAINST THE SEPARATE ACCOUNT: Currently, no charge is made to
the Separate Account for federal income taxes that may be attributable to the
Separate Account. Hartford may, however, make such a charge in the future.
Charges for other taxes, if any, attributable to the Separate Account may also
be made.
POLICY BENEFITS AND RIGHTS
DEATH BENEFIT
While in force, the Policy provides for the payment of the Death Proceeds to
the named beneficiary when the Insured under the Policy dies. The Death Proceeds
payable to the beneficiary equal the Death Benefit less any loans outstanding.
The Death Benefit equals the greater of (1) the Face Amount or (2) the Account
Value multiplied by a specified percentage. The percentages vary according to
the attained age of the Insured and are specified in the Policy. Therefore, an
increase in Account Value may increase the Death Benefit. However, because the
Death Benefit will never be less than the Face Amount, a decrease in Account
Value may decrease the Death Benefit but never below the Face Amount.
EXAMPLES:
<TABLE>
<CAPTION>
A B
---------- ----------
<S> <C> <C>
Face Amount............................ $ 100,000 $ 100,000
Insured's Age.......................... 40 40
Account Value on Date of Death......... $ 46,500 $ 34,000
Specified Percentage................... 250% 250%
</TABLE>
In Example A, the Death Benefit equals $116,250, i.e., the greater of
$100,000 (the Face Amount) or $116,250 (the Account Value at the Date of Death
of $46,500, multiplied by the specified percentage of 250%). This amount less
any outstanding loans constitutes the Death Proceeds which Hartford would pay to
the beneficiary.
In Example B, the death benefit is $100,000, i.e., the greater of $100,000
(the Face Amount) or $85,000 (the Account Value of $34,000, multiplied by the
specified percentage of 250%).
All or part of the Death Proceeds may be paid in cash or applied under a
"Payment Option." See "Other Matters -- Settlement Provisions," page 18.
ACCOUNT VALUE
The Account Value of a Policy will be computed on each Valuation Day. The
Account Value will vary to reflect the investment experience of the Funds, the
value of the Loan Account and the monthly Deduction Amounts. There is no minimum
guaranteed Account Value.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 15
- --------------------------------------------------------------------------------
The Account Value of a particular Policy is related to the net asset value
of the Funds to which premiums on the Policy have been allocated. The Account
Value on any Valuation Day is calculated by multiplying the number of
Accumulation Units credited to the Policy in each Sub-Account as of the
Valuation Day by the Accumulation Unit Value of that Sub-Account, and then
summing the result for all the Sub-Accounts credited to the Policy and the value
of the Loan Account. See "The Policy -- Accumulation Unit Values," page 11.
TRANSFER OF ACCOUNT VALUE
While the Policy remains in force, and subject to Hartford's transfer rules
then in effect, the Policy Owner may request that part or all of the Account
Value of a particular Sub-Account be transferred to other Sub-Accounts. Hartford
reserves the right to restrict the number of such transfers to no more than 12
per Policy Year, with no two transfers being made on consecutive Valuation Days.
However, there are no restrictions on the number of transfers at the present
time. Transfers may be made by written request or by calling toll free
1-800-231-5453. Transfers by telephone may be made by the agent of record or by
the attorney-in-fact pursuant to a power of attorney. Telephone transfers may
not be permitted in some states. The policy of Hartford and its agents and
affiliates is that they will not be responsible for losses resulting from acting
upon telephone requests reasonably believed to be genuine. Hartford will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine; otherwise, Hartford may be liable for any losses due to unauthorized or
fraudulent instructions. The procedures Hartford follows for transactions
initiated by telephone include requirements that callers provide certain
information for identification purposes. All transfer instructions by telephone
are tape recorded. Hartford will send the Policy Owner a confirmation of the
transfer within five days from the date of any instruction. IT IS THE
RESPONSIBILITY OF THE POLICY OWNER TO VERIFY THE ACCURACY OF ALL CONFIRMATIONS
OF TRANSFERS AND TO PROMPTLY ADVISE HARTFORD OF ANY INACCURACIES WITHIN 30 DAYS
OF RECEIPT OF THE CONFIRMATION.
Hartford may modify the right to reallocate Account Value among the
Sub-Accounts if Hartford determines, in its sole discretion, that the exercise
of that right by one or more Policy Owners is, or would be, to the disadvantage
of other Policy Owners. Any modification could be applied to transfers to or
from some or all of the Sub-Accounts and could include, but not be limited to,
the requirement of a minimum period between each transfer, not accepting
transfer requests of an agent acting under the power of attorney on behalf of
more than one Policy Owner, or limiting the dollar amount that may be
transferred among the Sub-Accounts at one time. These restrictions may be
applied in any manner reasonably designed to prevent any use of the transfer
right that Hartford considers to be disadvantageous to other Policy Owners.
As a result of a transfer, the number of Accumulation Units credited to the
Sub-Account from which the transfer is made will be reduced by the number
obtained by dividing the amount transferred by the Accumulation Unit Value of
that Sub-Account on the Valuation Day Hartford receives the transfer request.
The number of Accumulation Units credited to the Sub-Account to which the
transfer is made will be increased by the number obtained by dividing the amount
transferred by the Accumulation Unit Value of that Sub-Account on the Valuation
Day Hartford receives the transfer request.
POLICY LOANS
While the Policy is in effect, a Policy Owner may obtain, without the
consent of the beneficiary (provided the designation of beneficiary is not
irrevocable), one or both of two types of cash loans from Hartford. Both types
of loans are secured by the Policy. The aggregate loans (including the currently
applied for loan) may not exceed, at the time a loan is requested, 90% of the
Cash Value.
The loan amount will be transferred pro rata from each Sub-Account
attributable to the Policy (unless the Policy Owner specifies otherwise) to the
Loan Account. The amounts allocated to the Loan Account will earn interest at a
rate of 4% per annum (6% for "Preferred Loans"). The amount of the Loan Account
that equals the difference between the Cash Value and the total of all premiums
paid under the Policy is considered a "Preferred Loan." For exchanges which take
place according to IRC Section 1035(a) that have an outstanding loan at the time
of transfer, the difference between the Account Value and the total of all
premiums paid under the Policy is considered a Preferred Loan. The loan interest
rate that Hartford will charge on all loans is 6% per annum. The difference
between the value of the Loan Account and the Indebtedness will be transferred
on a pro-rata basis from the Sub-Accounts to the Loan Account on each Monthly
Activity Date. The proceeds of a loan will be delivered to the Policy Owner
within seven business days of Hartford's receipt of the loan request.
If the aggregate outstanding loan(s) secured by the Policy exceeds the
Account Value of the Policy less any Surrender Charges and due and unpaid
Deduction Amount, Hartford will give written notice to the Policy Owner that,
unless Hartford receives an additional payment within 61 days to reduce the
aggregate outstanding loan(s) secured by the Policy, the Policy may lapse.
All or any part of any loan secured by a Policy may be repaid while the
Policy is still in effect. When loan repayments or interest payments are made,
they will be allocated among the Sub-Account(s) in the same percentage as
premiums are allocated (unless the Policy Owner requests a different allocation)
and an amount equal to the payment will be deducted from the Loan Account. Any
outstanding
<PAGE>
16 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
loan at the end of a grace period must be repaid before the Policy will be
reinstated. See "Policy Benefits and Rights-- Lapse and Reinstatement," page 16.
A loan, whether or not repaid, will have a permanent effect on the Account
Value because the investment results of each Sub-Account will apply only to the
amount remaining in such Sub-Accounts. The longer a loan is outstanding, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the Sub-Accounts earn more than the annual interest rate for
amounts held in the Loan Account, a Policy Owner's Account Value will not
increase as rapidly as it would have had no loan been made. If the Sub-Accounts
earn less than the annual interest rate for amounts held in the Loan Account,
the Policy Owner's Account Value will be greater than it would have been had no
loan been made. Also, if not repaid, the aggregate outstanding loan(s) will
reduce the Death Proceeds and Cash Surrender Value otherwise payable.
AMOUNT PAYABLE ON SURRENDER OF THE POLICY
While the Policy is in force, a Policy Owner may elect, without the consent
of the beneficiary (provided the designation of beneficiary is not irrevocable),
to fully surrender the Policy. Upon surrender, the Policy Owner will receive the
Cash Surrender Value determined as of the day Hartford receives the Policy
Owner's written request or the date requested by the Policy Owner whichever is
later. The Cash Surrender Value equals the Account Value less any Surrender
Charges and any Unamortized Tax charge and all Indebtedness. Hartford will pay
the Cash Surrender Value of the Policy within seven days of receipt by Hartford
of the written request or on the effective surrender date requested by the
Policy Owner, whichever is later. The Policy will terminate on the date of
receipt of the written request, or the date the Policy Owner requests the
surrender to be effective, whichever is later. For a discussion of the tax
consequences of surrendering the Policy, see "Federal Tax Considerations," page
24.
If the Policy Owner chooses to apply the surrender proceeds to a payment
option (see "Other Matters -- Settlement Provisions," page 18), the Surrender
Charge will not be imposed to the surrender proceeds applied to the option. In
other words, the surrender proceeds will equal the Cash Surrender Value without
reduction for the Surrender Charge. However, any Unamortized Tax charge, if
applicable, will be deducted from the surrender proceeds to be applied. In
addition, amounts withdrawn from payment Option 1, Option 5 or Option 6 will be
subject to any applicable Surrender Charge.
PARTIAL SURRENDERS
While the Policy is in force, a Policy Owner may elect, by written request,
to make partial surrenders from the Cash Surrender Value. The Cash Surrender
Value, after partial surrender, must at least equal Hartford's minimum amount
rules then in effect; otherwise, the request will be treated as a request for
full surrender. The partial surrender will be deducted pro rata from each
Sub-Account, unless the Policy Owner instructs otherwise. The Face Amount will
be reduced proportionate to the reduction in the Account Value due to the
partial surrender. Partial surrenders in excess of the Annual Withdrawal Amount
will be subject to the Surrender Charge and any Unamortized Tax charges. See
"Deductions and Charges -- Surrender Charge," page 13, and "Deductions and
Charges -- Policy Owner Option 1," page 13. For a discussion of the tax
consequences of partial surrenders, see "Federal Tax Considerations," page 24.
BENEFITS AT MATURITY
If the Insured is living on the "Maturity Date" (the anniversary of the
Policy Date on which the Insured is age 100), on surrender of the Policy to
Hartford, Hartford will pay to the Policy Owner the Cash Surrender Value. In
such case, the Policy will terminate and Hartford will have no further
obligations under the Policy. (The Maturity Date may be extended by rider where
approved, but see "Federal Tax Considerations -- Income Taxation of Policy
Benefits," page 25.)
LAPSE AND REINSTATEMENT
The Policy will remain in force until the Cash Surrender Value is
insufficient to cover the Deduction Amount due on a Monthly Activity Date.
Hartford will notify the Policy Owner of the deficiency in writing and will
provide a 61-day grace period to pay an amount sufficient to cover the Deduction
Amounts due as well as three. The notice will indicate the amount that must be
paid.
The Policy will continue through the grace period, but if no additional
premium payment is made, it will terminate at the end of the grace period. If
the person insured under the Policy dies during the grace period, the Death
Proceeds payable under the Policy will be reduced by the Deduction Amount(s) due
and unpaid. See "Policy Benefits and Rights -- Death Benefit," page 14.
If the Policy lapses, the Policy Owner may apply for reinstatement of the
Policy by payment of the reinstatement premium shown in the Policy and any
applicable charges. A request for reinstatement may be made within five years of
lapse. If a loan was outstanding at the time of lapse, Hartford will require
repayment of the loan before permitting reinstatement. In addition, Hartford
reserves the right to require evidence of insurability satisfactory to Hartford.
CANCELLATION AND EXCHANGE RIGHTS
A Policy Owner has a limited right to return a Policy for cancellation. If
the Policy is returned, by mail or personal
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 17
- --------------------------------------------------------------------------------
delivery to Hartford or to the agent who sold the Policy, to be canceled within
ten days after delivery of the Policy to the Policy Owner (a longer free-look
period is provided in certain cases), Hartford will return to the Policy Owner,
within seven days, the greater of premiums paid for the Policy less Indebtedness
or the sum of (1) the Account Value less any Indebtedness on the date the
returned Policy is received by Hartford or its agent and (2) any deductions
under Policy or by the Funds for taxes, charges or fees.
Once the Policy is in effect, it may be exchanged, during the first 24
months after its issuance, for a non-variable flexible premium adjustable life
insurance Policy offered by Hartford (or an affiliated company) on the life of
the Insured. No evidence of insurability will be required. The new Policy will
have, at the election of the Policy Owner, either the same Coverage Amount as
under the exchanged Policy on the date of exchange or the same Death Benefit.
The effective date, issue date and issue age will be the same as existed under
the exchanged Policy. If a Policy loan was outstanding, the entire loan must be
repaid. There may be a cash adjustment required on the exchange.
SUSPENSION OF VALUATION,
PAYMENTS AND TRANSFERS
Hartford will suspend all procedures requiring valuation (including
transfers, surrenders and loans) on any day a national stock exchange is closed
or trading is restricted due to an existing emergency, as defined by the
Securities and Exchange Commission, or on any day the Securities and Exchange
Commission has ordered that the right of surrender of the Policies be suspended
for the protection of Policy Owners, until such condition has ended.
LAST SURVIVOR POLICIES
The Policies are offered on both a single life and a "last survivor" basis.
Policies sold on a last survivor basis operate in a manner almost identical to
the single life version. The most important difference is that the last survivor
version involves two Insureds and the Death Proceeds are paid on the death of
the last surviving Insured. The other significant differences between the last
survivor and single life versions are listed below.
1. The cost of insurance charges under the last survivor Policies are
determined in a manner that reflects the anticipated mortality of the two
Insureds and the fact that the Death Benefit is not payable until the death
of the second Insured. See the last survivor illustrations in "Appendix B,"
page 30.
2. To qualify for simplified underwriting under a last survivor Policy, both
Insureds must meet the simplified underwriting standards.
3. For a last survivor Policy to be reinstated, both Insureds must be alive on
the date of reinstatement.
4. The Policy provisions regarding misstatement of age or sex, suicide and
incontestability apply to either Insured.
5. Additional tax disclosures applicable to last survivor Policies are provided
in "Federal Tax Considerations," page 24.
OTHER MATTERS
VOTING RIGHTS
In accordance with its interpretation of presently applicable law, Hartford
will vote the shares of the Funds at regular and special meetings of the
shareholders of the Funds in accordance with instructions from Policy Owners (or
the assignee of the Policy, as the case may be) having a voting interest in the
Separate Account. The number of shares held in the Separate Account which are
attributable to each Policy Owner is determined by dividing the Policy Owner's
interest in each Sub-Account by the net asset value of the applicable shares of
the Funds. Hartford will vote shares for which no instructions have been given
and shares which are not attributable to Policy Owners (i.e., shares owned by
Hartford) in the same proportion as it votes shares for which it has received
instructions. However, if the Investment Company Act of 1940 or any rule
promulgated thereunder should be amended, or if Hartford's present
interpretation should change and, as a result, Hartford determines it is
permitted to vote the shares of the Funds in its own right, it may elect to do
so.
The voting interests of the Policy Owner (or the assignee) in the Funds will
be determined as follows: Policy Owners may cast one vote for each full or
fractional Accumulation Unit owned under the Policy and allocated to a
Sub-Account, the assets of which are invested in the particular Fund on the
record date for the shareholder meeting for that Fund. If, however, a Policy
Owner has taken a loan secured by the Policy, amounts transferred from the Sub-
Account(s) to the Loan Account in connection with the loan (see "Policy Benefits
and Rights -- Policy Loans," page 15) will not be considered in determining the
voting interests of the Policy Owner. Policy Owners should review the Funds
prospectus accompanying this Prospectus to determine matters on which
shareholders may vote.
Hartford may, when required by state insurance regulatory authorities,
disregard Policy Owners' voting instructions if such instructions require that
the shares be voted so as to cause a change in the sub-classification or
investment objective of one or more of the Funds or to approve or disapprove an
investment advisory Policy for the Funds.
In addition, Hartford itself may disregard Policy Owners' voting
instructions in favor of changes initiated by a Policy Owner in the investment
policy or the investment
<PAGE>
18 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
adviser of the Funds if Hartford reasonably disapproves of such changes. A
change would be disapproved only if the proposed change is contrary to state law
or prohibited by state regulatory authorities. If Hartford does disregard voting
instructions, a summary of that action and the reasons for such action will be
included in the next periodic report to Policy Owners.
STATEMENTS TO POLICY OWNERS
Hartford will maintain all records relating to the Separate Account and the
Sub-Accounts. At least once each Policy Year, Hartford will send to Policy
Owners a statement showing the Coverage Amount and the Account Value of the
Policy (indicating the number of Accumulation Units credited to the Policy in
each Sub-Account and the corresponding Accumulation Unit Value) and any
outstanding loan secured by the Policy as of the date of the statement. The
statement will also show premium paid, and Deduction Amounts under the Policy
since the last statement, and any other information required by any applicable
law or regulation.
LIMIT ON RIGHT TO CONTEST
Hartford may not contest the validity of the Policy after it has been in
force during the Insured's lifetime for two years from the Issue Date. If the
Policy is reinstated, the two-year period is measured from the date of
reinstatement. Any increase in the Coverage Amount as a result of a premium
payment is contestable for two years from its effective date. In addition, if
the Insured commits suicide in the two year period, or such period as specified
in state law, the benefit payable will be limited to the Account Value less any
Indebtedness.
MISSTATEMENT AS TO AGE AND SEX
If the age or sex of the Insured is incorrectly stated, the Death Benefit
will be appropriately adjusted as specified in the Policy.
SETTLEMENT PROVISIONS
The surrender proceeds or Death Proceeds under the Policies may be paid in a
lump sum or may be applied to one of Hartford's payment options. The minimum
amount that may be applied under a payment option is $5,000, unless Hartford
consents to a lesser amount. UNDER PAYMENT OPTIONS 2, 3 AND 4, NO SURRENDER OR
PARTIAL SURRENDERS ARE PERMITTED AFTER PAYMENTS COMMENCE. FULL SURRENDER OR
PARTIAL SURRENDERS MAY BE MADE FROM PAYMENT OPTION 1 OR OPTION 6, BUT THEY ARE
SUBJECT TO THE SURRENDER CHARGE, IF APPLICABLE. ONLY A FULL SURRENDER IS ALLOWED
FROM PAYMENT OPTION 5. A SURRENDER FROM PAYMENT OPTION 5 WILL ALSO BE SUBJECT TO
THE SURRENDER CHARGE, IF APPLICABLE.
Hartford will pay interest of at least 3 1/2% per year on the Death Proceeds
from the date of the Insured's death to the date payment is made or a payment
option is elected. At such times, the proceeds are not subject to the investment
experience of the Separate Account.
The following options are available under the Policies (Hartford may offer
other payment options):
OPTION 1 -- Interest Income
This option offers payments of interest, at the rate Hartford declares, on
the amount applied under his option. The interest rate will never be less than
3 1/2% per year.
OPTION 2 -- Life Annuity
A life annuity is an annuity payable during the lifetime of the payee and
terminating with the last payment preceding the death of the payee. This option
offers the largest payment amount of any of the life annuity options, since
there is no guarantee of a minimum number of payments nor a provision for a
death benefit payable to a beneficiary.
It would be possible under this option for a payee to receive only one
annuity payment if he died prior to the due date of the second annuity payment,
two annuity payments if he died before the date of the third annuity payment,
etc.
OPTION 3 -- Life Annuity with 120, 180 or 240 Monthly Payments Certain
This annuity option is an annuity payable monthly during the lifetime of the
payee with the provision that payments will be made for a minimum of 120, 180 or
240 months, as elected. If, at the death of the payee, payments have been made
for less than the minimum elected number of months, then the present value (as
of the date of the payee's death) of any remaining guaranteed payments will be
paid in one sum to the beneficiary or beneficiaries designated, unless other
provisions have been made and approved by Hartford.
OPTION 4 -- Joint and Last Survivor Annuity
An annuity payable monthly during the joint lifetime of the payee and a
designated second person, and thereafter during the remaining lifetime of the
survivor, ceasing with the last payment prior to the death of the survivor.
Based on the options currently offered by Hartford, the payee may elect that the
payment to the survivor be less than the payment made during the joint lifetime
of the payee and a designated second person.
It would be possible under this option for a payee and designated second
person to receive only one payment in the event of the common or simultaneous
death of the parties prior to the due date for the second payment and so on.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 19
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OPTION 5 -- Payments for a Designated Period
An amount payable monthly for the number of years selected, which may be
from five to 30 years. Under this option, you may, at any time, request a full
surrender and receive, within seven days, the termination value of the Policy as
determined by Hartford.
In the event of the payee's death prior to the end of the designated period,
the present value (as of the date of the payee's death) of any remaining
guaranteed payments will be paid in one sum to the beneficiary or beneficiaries
designated unless other provisions have been made and approved by Hartford.
Option 5 is an option that does not involve life contingencies.
OPTION 6 -- Policy Proceeds Settlement Option
Proceeds from the Death Benefit left with Hartford. These proceeds will
remain in the Sub-Accounts to which they were allocated at the time of death,
unless the beneficiary elects to reallocate them. Full or partial surrenders may
be made at any time.
VARIABLE AND FIXED ANNUITY PAYMENTS: When an Annuity is effected, unless
otherwise specified, the surrender proceeds or Death Proceeds held in the
Sub-Accounts will be applied to provide a variable annuity based on the pro rata
amount in the various Sub-Accounts. Fixed annuities options are also available.
YOU SHOULD CONSIDER WHETHER THE ALLOCATION OF PROCEEDS AMONG SUB-ACCOUNTS OF THE
SEPARATE ACCOUNT FOR YOUR ANNUITY PAYMENTS ARE BASED ON THE INVESTMENT
ALTERNATIVE BEST SUITED TO YOUR RETIREMENT NEEDS.
VARIABLE ANNUITY: The Policy contains tables indicating the minimum dollar
amount of the first monthly payment under the optional variable forms of annuity
for each $1,000 of value of a Sub-Account. The first monthly payment varies
according to the form and type of variable payment annuity selected. The Policy
contains variable payment annuity tables derived from the 1983(a) Individual
Annuity Mortality Table, with ages set back one year and with an assumed
investment rate ("A.I.R.") of 5% per annum. The total first monthly variable
annuity payment is determined by multiplying the proceeds value (expressed in
thousands of dollars) of a Sub-Account by the amount of the first monthly
payment per $1,000 of value obtained from the tables in the Policy.
The amount of the first monthly variable annuity payment is divided by the
value of an annuity unit (an accounting unit of measure used to calculate the
value of annuity payments) for the appropriate Sub-Account no earlier than the
close of business on the fifth Valuation Day preceding the day on which the
payment is due in order to determine the number of annuity units represented by
the first payment. This number of annuity units remains fixed during the annuity
payment period and in each subsequent month the dollar amount of the variable
annuity payment is determined by multiplying this fixed number of annuity units
by the current annuity unit value.
LEVEL VARIABLE ANNUITY PAYMENTS WOULD BE PRODUCED IF THE INVESTMENT RATE
REMAINED CONSTANT AND EQUAL TO THE A.I.R. IN FACT, PAYMENTS WILL VARY UP OR DOWN
AS THE INVESTMENT RATE VARIES UP OR DOWN RELATIVE TO THE A.I.R.
FIXED ANNUITY: Fixed annuity payments are determined by multiplying the
amount applied to the annuity by a rate (to be determined by Hartford) which is
no less than the rate specified in the fixed payment annuity tables in the
Policy. The annuity payment will remain level for the duration of the annuity.
Hartford will make any other arrangements for income payments as may be
agreed on.
BENEFICIARY
The applicant names the beneficiary in the application for the Policy. The
Policy Owner may change the beneficiary (unless irrevocably named) during the
Insured's lifetime by written request to Hartford. If no beneficiary is living
when the Insured dies, the Death Proceeds will be paid to the Policy Owner if
living; otherwise to the Policy Owner's estate.
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation.
Hartford is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
DIVIDENDS
No dividends will be paid under the Policies.
<PAGE>
20 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
POSITION WITH HARTFORD, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
----------------------------- -------------------------------- -----------------------------------------------------------------
<S> <C> <C>
Ahn, Dong H., 37 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Bossen, Wendell J., 64 Vice President, 1992** Vice President (1992-Present), Hartford Life and Accident
Insurance Company; President (1992-Present), International
Corporate Marketing Group, Inc.; Executive Vice President
(1984-1992), Mutual Benefit.
Boyko, Gregory A., 46 Senior Vice President, Chief Vice President and Controller (1995-1997), Hartford; Director
Financial Officer & Treasurer, (1997-Present); Senior Vice President, Chief Financial Officer
1997 & Treasurer (1997-Present); Vice President & Controller
Director, 1997 (1995-1997), Hartford Life and Accident Insurance Company;
Senior Vice President, Chief Financial Officer & Treasurer
(1997-Present), Hartford Life, Inc.; Chief Financial Officer
(1994-1995), IMG American Life; Senior Vice President
(1992-1994), Connecticut Mutual Life Insurance Company.
Cummins, Peter W., 60 Senior Vice President, 1997 Vice President (1989-1997); Director of Broker Dealer Sales-ILAD
(1989-1992), Hartford; Senior Vice President (1997-Present)
Vice President (1989-1997); Director of Broker Dealer
Sales-ILAD (1989-1991), Hartford Life and Accident Insurance
Company.
de Raismes, Ann M., 47 Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice President (1992-1994);
Director of Human Resources, Hartford; Senior Vice President (1997-Present); Director of
1991 Human Resources (1991-Present); Vice President (1994-1997);
Assistant Vice President (1992-1994); Hartford Life and
Accident Insurance Company; Vice President, Human Resources
(1997-Present), Hartford Life, Inc.
Fitch, Timothy M., 45 Vice President, 1995 Assistant Vice President (1992-1995), Hartford; Vice President
Actuary, 1994 (1995-Present); Actuary (1994-Present); Assistant Vice
President (1992-1995), Hartford Life and Accident Insurance
Company.
Foy, David T., 31 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Vice President
(1998-Present), Hartford Life and Accident Insurance Company.
Gardner, Bruce D., 47 Vice President, 1995 Director (1994-1997); General Counsel & Corporate Secretary
(1991-1995), Hartford; Vice President (1995-1997); Director
(1995-1997); General Counsel & Corporate Secretary (1991-1995),
Hartford Life and Accident Insurance Company.
Garrett, J. Richard, 53 Vice President, 1993 Treasurer (1986-1997), Hartford; Vice President (1993-Present);
Assistant Treasurer, 1997 Assistant Treasurer (1997-Present); Treasurer (1983-1997);
Hartford Life and Accident Insurance Company; Treasurer (1977),
The Hartford Financial Services Group.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
----------------------------- -------------------------------- -----------------------------------------------------------------
<S> <C> <C>
Ginnetti, John P., 52 Executive Vice President and Senior Vice President - Individual Life and Annuity Division
Director, Asset Management (1988-1994), Hartford; Director (1988-Present); Director
Services, 1994 (1988-Present); Executive Vice President & Director, Asset
Director, 1988 Management Services (1994-Present); Senior Vice President -
Individual Life and Annuity Division (1988-1994), Hartford Life
and Accident Insurance Company; Executive Vice President, Asset
Management, Hartford Life, Inc. (1997-Present).
Godfrey III, William A. 41 Senior Vice President, 1997 Senior Vice President (1997-Present), Hartford; Senior Vice
President (1997-Present), Harford Life and Accident Insurance
Company; Vice President Information Technology (1997-Present),
Hartford Life, Inc.
Godkin, Lynda, 44 Senior Vice President, 1997 Associate General Counsel (1995-1996); Assistant General Counsel
General Counsel, 1996 and Secretary (1994-1995); Counsel (1990-1994), Hartford;
Corporate Secretary, 1995 Director (1997-Present); Senior Vice President (1997-Present);
Director, 1997 General Counsel (1996-Present); Corporate Secretary
(1995-Present); Associate General Counsel (1995-1996);
Assistant General Counsel and Secretary (1994-1995); Counsel
(1990-1994), Hartford Life and Accident Insurance Company; Vice
President and General Counsel (1997-Present), Hartford Life,
Inc.
Grady, Lois W., 53 Senior Vice President, 1998 Vice President (1993-1998); Assistant Vice President (1987-1993),
Vice President, 1993 Hartford; Senior Vice President, 1998); Vice President
(1993-1997); Assistant Vice President (1987-1993), Hartford
Life and Accident Insurance Company.
Graham, Christopher, 47 Vice President, 1997
Hunt, Mark E., 37 Vice President, 1998 Assistant Vice President (1997-1998), Hartford; Vice President
(1998-Present), Assistant Vice President (1997-1998), Hartford
Life and Accident Insurance Company.
Joyce, Stephen T., 39 Vice President, 1997 Assistant Vice President (1994-1997), Hartford; Assistant Vice
President (1994-1997), Hartford Life and Accident Insurance
Company.
Keeler, Michael D., 37 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Kerzner, Robert A., 46 Senior Vice President, 1998 Vice President, (1995-1998); Regional Vice President (1991-1994),
Vice President, 1995 Hartford; Vice President (1994-1997), Hartford Life and
Accident Insurance Company.
Levenson, David N., 31 Vice President, 1998 Assistant Vice President (1995-Present), Hartford.
Maher, Steven M., 43 Vice President, 1992 Assistant Vice President (1987-1992), Hartford; Vice President
Actuary, 1987 (1993-Present); Actuary (1987-Present); Assistant Vice
President (1987-1993), Hartford Life and Accident Insurance
Company.
Malchodi, Jr., William B., 50 Vice President, 1994 Director of Taxes, Hartford (1991-1998); Director of Taxes
(1992-1998), Hartford Life and Accident Insurance Company.
Marra, Raymond J., 37 Vice President, 1998 Assistant Vice President (1997-Present), Hartford; Vice President
(1998-Present), Assistant Vice President (1994-1997), Hartford
Life and Accident Insurance Company.
</TABLE>
<PAGE>
22 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
----------------------------- -------------------------------- -----------------------------------------------------------------
<S> <C> <C>
Marra, Thomas M., 39 Executive Vice President, 1995 Senior Vice President (1994-1995); Vice President (1989-1994);
Director, Individual Life and Actuary (1987-1995), Hartford; Director (1994-Present);
Annuity Division, 1994 Executive Vice President (1995-Present); Senior Vice President
Director, 1994* (1994-1995); Director, Individual Life and Annuity Division
(1994-Present); Actuary (1987-1997), Hartford Life and Accident
Insurance Company; Executive Vice President, Individual Life
and Annuities (1997-Present), Hartford Life, Inc.
Nolan, Jr., Robert F., 43 Senior Vice President, 1997 Vice President (1995-1997); Assistant Vice President (1992-1995),
Hartford; Vice President (1995-1997); Assistant Vice President
(1992-1995), Hartford Life and Accident Insurance Company; Vice
President, Corporate Relations (1997-Present), Hartford Life,
Inc.; Manager, Public Relations (1986), Aetna Life and Casualty
Insurance Company.
Noto, Joseph J., 46 Vice President, 1989 Executive Vice President & Chief Operating Officer
(1997-Present); Director (1994-Present); President (1994-1997),
American Maturity Life Insurance Company; Vice President
(1989-1997), Hartford Life and Accident Insurance Company.
O'Halloran, C. Michael, 51 Vice President, 1994 Senior Associate General Counsel (1988-1997), Hartford; Vice
President (1994-Present); Senior Associate General Counsel
(1988-1997), Hartford Life and Accident Insurance Company;
Corporate Secretary (1997-Present), Hartford Life, Inc.; Vice
President (1994-Present); Senior Associate General Counsel
(1988-Present); Director of Corporate Law (1994-Present), The
Hartford Financial Services Group.
O'Rourke, Lawrence M., 44 Vice President, 1998 Vice President, (1998-Present), Hartford Life and Accident
Insurance Company.
O'Sullivan, Daniel E., 43 Vice President, 1998 Vice President (1998-Present), Hartford Life and Accident
Insurance Company.
Raymond, Craig R., 37 Senior Vice President, 1997 Vice President (1993-1997); Assistant Vice President (1992-1993);
Chief Actuary, 1994 Actuary (1990-1994), Hartford; Senior Vice President
(1997-Present); Chief Actuary (1995-Present); Vice President
(1993-1997); Actuary (1990-1995), Hartford Life and Accident
Insurance Company; Vice President and Chief Actuary
(1997-Present), Hartford Life, Inc.
Robinson, Mary P., 38 Vice President, 1998 Assistant Vice President (1995-1998), Hartford; Assistant Vice
President (1995-1998), Hartford Life and Accident Insurance
Company.
Salama, Donald A., 50 Vice President, 1997 Vice President (1997-Present), Hartford Life and Accident
Insurance Company.
Schiltz, Timothy P., 37 Vice President, 1997 Assistant Vice President (1994-1997), Hartford; Vice President
(1997-Present); Assistant Vice President (1994-1997), Hartford
Life and Accident Insurance Company; Consulting Actuary
(1992-1993), Milliman & Robertson, Inc.; Consulting Actuary
(1988-1992) Chalke Incorporated.
</TABLE>
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 23
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
POSITION WITH HARTFORD, OTHER BUSINESS PROFESSION, VOCATION OR EMPLOYMENT
NAME, AGE YEAR OF ELECTION FOR PAST 5 YEARS; OTHER DIRECTORSHIPS
----------------------------- -------------------------------- -----------------------------------------------------------------
<S> <C> <C>
Smith, Lowndes A., 58 President, 1989 Chief Operating Officer (1989-1997), Hartford; Director
Chief Executive Officer, 1997 (1981-Present); President (1989-Present); Chief Executive
Director, 1981* Officer (1997-Present); Chief Operating Officer (1989-1997),
Hartford Life and Accident Insurance Company; Chief Executive
Officer and President and Director (1997-Present), Hartford
Life, Inc.
Stevenson, Keith A., 44 Vice President, 1998
Sweeney, Edward A., 51 Vice President, 1993 Chicago Regional Manager (1985-1993), Hartford; Vice President
(1993-Present), Hartford Life and Accident Insurance Company.
Tilbor, Judith V., 46 Vice President, 1998 Assistant Vice President (1994-1998), Hartford; Vice President
(1998-Present), Assistant Vice President (1994-1998), Hartford
Life and Accident Insurance Company.
Welnicki, Raymond P., 49 Senior Vice President & Vice President (1993-1994), Hartford; Director (1994-Present);
Director, Employee Benefit Senior Vice President (1995-Present); Director, Employee
Division, 1994 Benefit Division (1997-Present); Vice President (1993-1995),
Director, 1994* Hartford Life and Accident Insurance Company; Senior Vice
President, Employee Benefits (1997-Present), Hartford Life,
Inc.; Board of Directors, Ethix Corp.
Welsh, Walter C., 51 Senior Vice President, 1997 Vice President (1995-1997); Assistant Vice President (1992-1995),
Hartford; Senior Vice President (1997-Present); Vice President
(1995-1997); Assistant Vice President (1992-1995), Hartford
Life and Accident Insurance Company; Vice President, Government
Affairs (1997-Present), Hartford Life, Inc.
Zlatkus, Lizabeth H., 39 Senior Vice President, 1997 Vice President (1994-1997); Assistant Vice President (1992-1994),
Director, 1994* Hartford; Director (1994-Present); Senior Vice President
(1997-Present); Vice President (1994-1997); Assistant Vice
President (1992-1994), Hartford Life and Accident Insurance
Company; Vice President, Group Life and Disability
(1997-Present), Hartford Life, Inc.
Znamierowski, David M., 38 Senior Vice President, 1997 Vice President (1997), Hartford; Director (1998-Present) Senior
Director, Risk Management Vice President (1997-Present), Hartford Life and Accident
Strategy, 1996 Insurance Company; Vice President, Investment Strategy
Director, 1998* (1997-Present), Hartford Life, Inc.; Vice President, Investment
Strategy & Policy, Aetna Life and Casualty.
</TABLE>
- ---------
* Denotes date of election to Board of Directors.
** The Hartford Financial Services Group, Inc. Affiliated Company
Unless otherwise indicated, the principal business address of each the above
individuals is P.O. Box 2999, Hartford, CT 06104-2999.
DISTRIBUTION OF THE POLICIES
Hartford intends to sell the Policies in all jurisdictions where it is
licensed to do business. The Policies will be sold by life insurance sales
representatives who represent Hartford and who are registered representatives of
Hartford Equity Sales Company, Inc. ("HESCO") or certain other independent,
registered broker-dealers. Any sales representative or employee will have been
qualified to sell variable life insurance Policies under applicable federal and
state laws. Each broker-dealer is registered with the Securities and Exchange
Commission under the Securities Exchange Act
<PAGE>
24 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
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. The principal business
address of HESCO and HSD is the same as that of Hartford.
The maximum sales commission payable to Hartford agents, independent
registered insurance brokers, and other registered broker-dealers is 7.0% of
initial and subsequent premiums.
Broker-dealers or financial institutions are compensated according to a
schedule set forth by HSD and any applicable rules or regulations for variable
insurance compensation. Compensation is generally based on premium payments made
by policyholders or contract owners. This compensation is usually paid from the
sales charges described in this Prospectus.
In addition, a broker-dealer or financial institution may also receive
additional compensation for, among other things, training, marketing or other
services provided. HSD, its affiliates or Hartford may also make compensation
arrangements with certain broker-dealers or financial institutions based on
total sales by the broker-dealer or financial institution of insurance products.
These payments, which may be different for different broker-dealers or financial
institutions, will be made by HSD, its affiliates or Hartford out of their own
assets and will not effect the amounts paid by the policyholders or contract
owners to purchase, hold or surrender variable insurance products.
Hartford may provide information on various topics to Policy Owners and
prospective Policy Owners in advertising, sales literature or other materials.
These topics may include the relationship between sectors of the economy and the
economy as a whole and its effect on various securities markets, investment
strategies and techniques (such as value investing, dollar cost averaging and
asset allocation), the advantages and disadvantages of investing in tax-
advantaged and taxable instruments, customer profiles and hypothetical purchase
scenarios, financial management and tax and retirement planning, and variable
annuities and other investment alternatives, including comparisons between the
Policies and the characteristics of, and market for, such alternatives.
SAFEKEEPING OF THE SEPARATE ACCOUNT'S ASSETS
The assets of the Separate Account are held by Hartford. The assets of the
Separate Account are kept physically segregated and held separate and apart from
the General Account of Hartford. Hartford maintains records of all purchases and
redemptions of shares of the Fund. Additional protection for the assets of the
Separate Account is afforded by Hartford's blanket fidelity bond, issued by
Aetna Casualty and Surety Company, in the aggregate of $50 million, covering all
of the officers and employees of Hartford.
FEDERAL TAX CONSIDERATIONS
GENERAL
SINCE THE TAX LAW IS COMPLEX AND SINCE TAX CONSEQUENCES WILL VARY ACCORDING
TO THE ACTUAL STATUS OF THE POLICY OWNER INVOLVED, LEGAL AND TAX ADVICE MAY BE
NEEDED BY A PERSON, EMPLOYER OR OTHER ENTITY CONTEMPLATING THE PURCHASE OF A
POLICY DESCRIBED HEREIN.
It should be understood that any detailed description of the federal income
tax consequences regarding the purchase of these Policies cannot be made in this
Prospectus and that special tax rules may be applicable with respect to certain
purchase situations not discussed herein. In addition, no attempt is made here
to consider any applicable state or other tax laws. For detailed information, a
qualified tax adviser should always be consulted. This discussion of federal tax
considerations is based upon Hartford 's understanding of existing Federal
income tax laws as they are currently interpreted.
TAXATION OF HARTFORD AND
THE SEPARATE ACCOUNT
The Separate Account is taxed as a part of Hartford which is taxed as a life
insurance company under Subchapter L of the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, the Separate Account will not be taxed as a
"regulated investment company" under Subchapter M of the Code. Investment income
and realized capital gains on the assets of the Separate Account (the underlying
Funds) are reinvested and are taken into account in determining the value of the
Accumulation Units (see "Policy Benefits and Right -- Account Value," on page
15). As a result, such investment income and realized capital gains are
automatically applied to increase reserves under the Policy.
Hartford does not expect to incur any federal income tax on the earnings or
realized capital gains attributable to the Separate Account. Based upon this
expectation, no charge is currently being made to the Separate Account for
federal income taxes. If Hartford incurs income taxes attributable to the
Separate Account or determines that such
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 25
- --------------------------------------------------------------------------------
taxes will be incurred, it may assess a charge for such taxes against the
Separate Account.
INCOME TAXATION OF POLICY BENEFITS
For federal income tax purposes, the Policies should be treated as life
insurance contracts under Section 7702 of the Code. The death benefit under a
life insurance contract is generally excluded from the gross income of the
beneficiary. Also, a life insurance Policy Owner is generally not taxed on
increments in the contract value until the Policy is partially or completely
surrendered. Section 7702 limits the amount of premiums that may be invested in
a Policy that is treated as life insurance. Hartford intends to monitor premium
levels to assure compliance with the Section 7702 requirements.
During the first fifteen Policy Years, an "income first" rule generally
applies to distributions of cash required to be made under Code Section 7702
because of a reduction in benefits under the Policy.
The Maturity Date Extension Rider allows a Policy Owner to extend the
Maturity Date to the date of the Insured's death. If the Maturity Date of the
Policy is extended by rider, Hartford believes that the Policy will continue to
be treated as a life insurance contract for federal income tax purposes after
the scheduled Maturity Date. However, due to the lack of specific guidance on
this issue, the result is not certain. If the Policy is not treated as a life
insurance contract for federal income tax purposes after the scheduled Maturity
Date, among other things, the Death Proceeds may be taxable to the recipient.
The Policy Owner should consult a qualified tax adviser regarding the possible
adverse tax consequences resulting from an extension of the scheduled Maturity
Date.
LAST SURVIVOR POLICIES
Although Hartford believes that the last survivor Policies are in compliance
with Section 7702 of the Code, the manner in which Section 7702 should be
applied to certain features of a joint survivorship life insurance contract is
not directly addressed by Section 7702. In the absence of final regulations or
other guidance issued under Section 7702, there is necessarily some uncertainty
whether a last survivor Contract will meet the Section 7702 definition of a life
insurance contract.
MODIFIED ENDOWMENT CONTRACTS
A life insurance contract is treated as a "modified endowment contract"
under Section 7702A of the Code if it meets the definition of life insurance in
Section 7702 but fails the "seven-pay" test of Section 7702A. The seven-pay test
provides that premiums cannot be paid at a rate more rapidly than that allowed
by the payment of seven annual premiums using specified computational rules
provided in Section 7702A(c). The large single premium permitted under the
Policy does not meet the specified computational rules for the "seven-pay test"
under Section 7702A(c). Therefore, the Policy will generally be treated as a
modified endowment contract for federal income tax purposes. However, an
exchange under Section 1035 of the Code of a life insurance contract issued
before June 21, 1988 will not cause the new Policy to be treated as a modified
endowment contract if no additional premiums are paid and there is no change in
the death benefit as the result of the exchange.
A contract that is classified as modified endowment contract is generally
eligible for the beneficial tax treatment accorded to life insurance. That is,
the death benefit is excluded from income and increments in value are not
subject to current taxation. However, loans, distributions or other amounts
received from a modified endowment contract during the life of the Insured will
be taxed to the extent of any accumulated income in the contract (generally, the
excess of account value over premiums paid). Amounts that are taxable
withdrawals will be subject to a 10% additional tax, with certain exceptions.
All modified endowment contracts that are issued within any calendar year to
the same Policy Owner by one company or its affiliates shall be treated as one
modified endowment contract in determining the taxable portion of any loan or
distributions.
ESTATE AND GENERATION SKIPPING TAXES
When the Insured dies, the Death Proceeds will generally be includible in
the Policy Owner's estate for purposes of federal estate tax if the last
surviving Insured owned the Policy. If the Policy Owner was not the last
surviving Insured, the fair market value of the Policy would be included in the
Policy Owner's estate upon the Policy Owner's death. Nothing would be includible
in the last surviving Insured's estate if he or she neither retained incidents
of ownership at death nor had given up ownership within three years before
death.
The federal estate tax is integrated with the federal gift tax under a
unified rate schedule and unified credit which shelters up to $625,000 (1998)
from the estate and gift tax. The Taxpayer Relief Act of 1997 gradually raises
the credit over the next eight years to $1,000,000. In addition, an unlimited
marital deduction may be available for federal estate and gift tax purposes. The
unlimited marital deduction permits the deferral of taxes until the death of the
surviving spouse (when the Death Proceeds would be available to pay taxes due
and other expenses incurred).
If the Policy Owner (whether or not he or she is an Insured) transfers
ownership of the Policy to someone two or more generations younger, the transfer
may be subject to the generation-skipping transfer tax, the taxable amount
<PAGE>
26 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
being the value of the Policy. The generation-skipping transfer tax provisions
generally apply to transfers which would be subject to the gift and estate tax
rules. Individuals are generally allowed an aggregate generation skipping
transfer exemption of $1 million. Because these rules are complex, the Policy
Owner should consult with a qualified tax adviser for specific information if
ownership is passing to younger generations.
DIVERSIFICATION REQUIREMENTS
Section 817 of the Code provides that a variable life insurance contract
(other than a pension plan policy) will not be treated as a life insurance
contract for any period during which the investments made by the separate
account or underlying fund are not adequately diversified in accordance with
regulations prescribed by the Treasury Department. If a Policy is not treated as
a life insurance contract, the Policy Owner will be subject to income tax on the
annual increases in cash value.
The Treasury Department has issued diversification regulations which
generally require, among other things, that no more than 55% of the value of the
total assets of the segregated asset account underlying a variable contract is
represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. In determining whether the
diversification standards are met, all securities of the same issuer, all
interests in the same real property project, and all interests in the same
commodity are each treated as a single investment. In addition, in the case of
government securities, each government agency or instrumentality shall be
treated as a separate issuer.
A separate account must be in compliance with the diversification standards
on the last day of each calendar quarter or within 30 days after the quarter
ends. If an insurance company inadvertently fails to meet the diversification
requirements, the company may comply within a reasonable period and avoid the
taxation of policy income on an ongoing basis. However, either the company or
the Policy Owner must agree to pay the tax due for the period during which the
diversification requirements were not met.
Hartford monitors the diversification of investments in the separate
accounts and tests for diversification as required by the Code. Hartford intends
to administer all contracts subject to the diversification requirements in a
manner that will maintain adequate diversification.
OWNERSHIP OF THE ASSETS IN
THE SEPARATE ACCOUNT
In order for a variable life insurance contract to qualify for tax deferral,
assets in the segregated asset accounts supporting the variable contract must be
considered to be owned by the insurance company and not by the variable contract
owner. The Internal Revenue Service ("IRS") has issued several rulings which
discuss investor control. The IRS has ruled that certain incidents of ownership
by the contract owner, such as the ability to select and control investments in
a separate account, will cause the contract owner to be treated as the owner of
the assets for tax purposes.
Further, in the explanation to the temporary Section 817 diversification
regulations, the Treasury Department noted that the temporary regulations "do
not provide guidance concerning the circumstances in which investor control of
the investments of a segregated asset account may cause the investor, rather
than the insurance company, to be treated as the owner of the assets in the
account." The explanation further indicates that "the temporary regulations
provide that in appropriate cases a segregated asset account may include
multiple sub-accounts, but do not specify the extent to which policyholders may
direct their investments to particular sub-accounts without being treated as the
owners of the underlying assets. Guidance on this and other issues will be
provided in regulations or revenue rulings under Section 817(d), relating to the
definition of variable contract." The final regulations issued under Section 817
did not provide guidance regarding investor control, and as of the date of this
Prospectus, no other such guidance has been issued. Further, Hartford does not
know if or in what form such guidance will be issued. In addition, although
regulations are generally issued with prospective effect, it is possible that
regulations may be issued with retroactive effect. Due to the lack of specific
guidance regarding the issue of investor control, there is necessarily some
uncertainty regarding whether a Policy Owner could be considered the owner of
the assets for tax purposes. Hartford reserves the right to modify the
contracts, as necessary, to prevent Policy Owners from being considered the
owners of the assets in the separate accounts.
LIFE INSURANCE PURCHASED FOR USE IN
SPLIT DOLLAR ARRANGEMENTS
On January 26, 1996, the IRS released a technical advice memorandum ("TAM")
on the taxability of life insurance policies used in certain split dollar
arrangements. A TAM, issued by the National Office of the IRS, provides advice
as to the internal revenue laws, regulations, and related statutes with respect
to a specific set of facts and a specific taxpayer. In the TAM, among other
things, the IRS concluded that an employee was subject to current taxation on
the excess of the cash surrender value of the policy over the premiums to be
returned to the employer. Purchasers of life insurance policies to be used in
split dollar arrangements are strongly advised to consult with a qualified tax
adviser to determine the tax treatment resulting from such an arrangement.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 27
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FEDERAL INCOME TAX WITHHOLDING
If any amounts are deemed to be current taxable income to the Policy Owner,
such amounts will be subject to federal income tax withholding and reporting,
pursuant to the Code.
NON-INDIVIDUAL OWNERSHIP OF POLICIES
In certain circumstances, the Code limits the application of specific tax
advantages to individual owners of life insurance contracts. Prospective Policy
Owners which are not individuals should consult a qualified tax adviser to
determine the potential impact on the purchaser.
OTHER
Federal estate tax, state and local estate, inheritance and other tax
consequences of ownership, or receipt of Policy proceeds depend on the
circumstances of each Policy Owner or beneficiary. A tax adviser should be
consulted to determine the impact of these taxes.
LIFE INSURANCE PURCHASES BY NONRESIDENT
ALIENS AND FOREIGN CORPORATIONS
The discussion above provides general information regarding U.S. federal
income tax consequences to life insurance purchasers that are U.S. citizens or
residents. Purchasers that are not U.S. citizens or residents will generally be
subject to U.S. federal income tax and withholding on taxable distributions from
life insurance policies at a 30% rate, unless a lower treaty rate applies. In
addition, purchasers may be subject to state and/or municipal taxes and taxes
that may be imposed by the purchaser's country of citizenship or residence.
Prospective purchasers are advised to consult with a qualified tax adviser
regarding U.S. state, and foreign taxation with respect to a life insurance
policy purchase.
LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Separate
Account is a party.
LEGAL MATTERS
Legal matters in connection with the issue and sale of flexible premium
variable life insurance Policies described in this Prospectus and the
organization of Hartford, its authority to issue the Policies under Connecticut
law and the validity of the forms of the Policies under Connecticut law and
legal matters relating to the federal securities and income tax laws have been
passed on by Lynda Godkin, Senior Vice President, General Counsel and Corporate
Secretary of Hartford.
EXPERTS
The audited financial statements and financial statement schedules included
in this Prospectus and elsewhere in the registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said reports. The principal business
address of Arthur Andersen LLP is One Financial Plaza, Hartford, Connecticut
06103.
The hypothetical Policy illustrations included in this Prospectus and the
registration statement with respect to the Separate Account have been approved
by Michael Winterfield, FSA, MAAA, Assistant Vice President and Director,
Individual Annuity Product Management, for Hartford, 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, and the Policies.
<PAGE>
28 HARTFORD LIFE INSURANCE COMPANY
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APPENDIX A
SPECIAL INFORMATION FOR POLICIES PURCHASED IN NEW YORK
If the Policy is purchased in the State of New York, the following
provisions of the Prospectus are amended as follows:
In the Special Terms subsection of the Prospectus, the definition of Account
Value is deleted and the following definition is substituted:
ACCOUNT VALUE: The current value of Accumulation Units plus the value of the
Loan Account under the Policy. In the case of a Policy Owner who purchases the
Policy in the State of New York (the "New York Policy Owner") and who elects to
transfer into the Fixed Account, Account Value is the current value of the Fixed
Account plus the value of the Loan Account under the Policy.
The following definition is added:
FIXED ACCOUNT: Part of the General Account of Hartford to which a New York
Policy Owner may allocate the entire Account Value.
The definition of Loan Account is deleted and the following definition is
substituted:
LOAN ACCOUNT: An account in Hartford's General Account, established for any
amounts transferred from the Sub-Accounts or, if a New York Policy Owner, from
the Fixed Account 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.
The following is added to the Prospectus as a separate section following the
section entitled "The Separate Account":
THE FIXED ACCOUNT
THAT PORTION OF THE POLICY RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE REGARDING THE FIXED ACCOUNT HAS NOT BEEN REVIEWED BY THE
STAFF OF THE SECURITIES AND EXCHANGE COMMISSION. THE FOLLOWING DISCLOSURE ABOUT
THE FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF
THE FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF
DISCLOSURE.
Under the circumstances described under the heading "Transfer of Entire
Account Value to the Fixed Account," page 15, New York Policy Owners may
transfer no less than the entire Account Value to the Fixed Account. Account
Value transferred to the Fixed Account becomes part of the general assets of
Hartford. Hartford invests the assets of the General Account in accordance with
applicable laws governing the investment of insurance company general accounts.
Hartford currently credits interest to the Account Value transferred to the
Fixed Account under the Policy at the Minimum Credited Rate of 3% per year,
compounded annually. Hartford reserves the right to credit a lower minimum
interest rate according to state law. Hartford may also credit interest at rates
greater than the minimum Fixed Account interest rate. There is no specific
formula for determining the interest credited to the Account Value in the Fixed
Account.
The following language is added to the section of the Prospectus entitled
"Deductions and Charges -- Administrative Charge," page 12:
No Administrative Charge is deducted from Account Value in the Fixed
Account.
The following language is added to the section of the Prospectus entitled
"Deductions and Charges -- Mortality and Expense Risk Charge," page 13:
No Mortality and Expense Risk Charge is deducted from Account Value in the
Fixed Account.
The following separate sections are added to the section of the Prospectus
entitled "Policy Benefits," page 14:
TRANSFER OF ENTIRE ACCOUNT VALUE
TO THE FIXED ACCOUNT
New York Policy Owners may transfer no less than the entire Account Value
into the Fixed Account under the following circumstances: (i) during the first
18 months following the Date of Issue, (ii) within 30 days following a Policy
Anniversary, or (iii) within 60 days following the effective date of a material
change in the investment policy of the Separate Account which the New York
Policy Owner objects to.
A TRANSFER TO THE FIXED ACCOUNT MUST BE FOR THE ENTIRE ACCOUNT VALUE AND
ONCE THE ACCOUNT VALUE HAS BEEN TRANSFERRED TO THE
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 29
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FIXED ACCOUNT, IT MAY NOT, UNDER ANY CIRCUMSTANCES, BE TRANSFERRED BACK TO THE
SEPARATE ACCOUNT.
For New York Policy Owners who elect to invest in the Fixed Account,
Hartford will transfer the entire Account Value from the Separate Account to the
Fixed Account on the Monthly Activity Date next following the date on which
Hartford received the transfer request. The Account Value in the Fixed Account
on the date of transfer equals the entire Account Value; plus the value of the
Loan Account; minus the Monthly Deduction Amount applicable to the Fixed Account
and minus the Annual Maintenance Fee, if applicable. On each subsequent Monthly
Activity Date, the Account Value in the Fixed Account equals the Account Value
on the previous Monthly Activity Date; plus any premiums received since the last
Monthly Activity Date; plus interest credited since the last Monthly Activity
Date; minus the Monthly Deduction Amount applicable to the Fixed Account; minus
any partial surrenders taken since the last Monthly Activity Date and minus any
Surrender Charges deducted since the last Monthly Deduction Date. On each
Valuation Date (other than a Monthly Activity Date), the Account Value of the
Fixed Account equals the Account Value on the previous Monthly Activity Date;
plus any premiums received since the last Monthly Activity Date; plus any
interest credited since the last Monthly Activity Date; minus any partial
surrenders taken since the last Monthly Activity Date and minus any Surrender
Charges deducted since the last Monthly Activity Date.
DEFERRED PAYMENTS
Hartford reserves the right to defer payment of any Cash Surrender Values
and loan amounts which are attributable to the Fixed Account for up to six
months from the date of request. If payment is deferred for more than ten days,
Hartford will pay interest at the Fixed Account Minimum Credited Interest Rate.
<PAGE>
30 HARTFORD LIFE INSURANCE COMPANY
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APPENDIX B
ILLUSTRATIONS OF BENEFITS
The tables in Appendix B illustrate the way in which a Policy operates. They
show how the death benefit and surrender value could vary over an extended
period of time assuming hypothetical gross rates of return equal to constant
after tax annual rates of 0%, 6% and 12%. The tables are based on an initial
premium of $10,000. A male age 45, a female age 55 and a male age 65 with Face
Amounts of $44,053, $34,014 and $20,000, respectively, are illustrated for the
single life preferred Policy for both Policy Owner Option 1 and Policy Owner
Option 2. The illustrations for the last survivor preferred Policy assume male
and female of equal ages, including age 55 and 65 for Face Amounts of $45,454
and $28,329.
The death benefit and surrender value for a Policy would be different from
those shown if the rates of return averaged 0%, 6% and 12% over a period of
years, but also fluctuated above or below those averages for individual Policy
Years. They would also differ if any Policy loan were made during the period of
time illustrated.
The tables reflect the deductions of current Policy charges for Policy Owner
Option 1 and Policy Owner Option 2 and guaranteed Policy charges for a single
gross interest rate. The death benefits and surrender values would change if the
current cost of insurance charges change.
The amounts shown for the death benefit and surrender value as of the end of
each Policy Year take into account an average daily charge equal to an annual
charge of 0.60% 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 0.60% average daily charge) of -0.60%, 5.40% and
11.40%, respectively.
The hypothetical returns shown in the tables are without any tax charges
that may be attributable to the Separate Account in the future. In order to
produce after tax returns of 0%, 6%, and 12%, the Separate Account would have to
earn a sufficient amount in excess of 0% or 6% or 12% to cover any tax charges
(see "Deductions and Charges -- Taxes Charged Against the Separate Account,"
page 14).
The "Premium Paid Plus Interest" column of each table shows the amount which
would accumulate if the initial premium was invested to earn interest, after
taxes of 5% per year, compounded annually.
Hartford will furnish upon request, a comparable illustration reflecting the
proposed Insureds age, risk classification, Face Amount or initial premium
requested, and reflecting guaranteed cost of insurance rates. Hartford will also
furnish an additional similar illustration reflecting current cost of insurance
rates which may be less than, but never greater than, the guaranteed cost of
insurance rates.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 31
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MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,845 9,851 44,053 10,785 9,793 44,053
2 11,025 11,765 10,779 44,053 11,638 10,655 44,053
3 11,576 12,764 11,791 44,053 12,565 11,596 44,053
4 12,155 13,852 13,044 44,053 13,574 12,770 44,053
5 12,763 15,034 14,246 44,053 14,672 13,889 44,053
6 13,401 16,320 15,757 44,053 15,868 15,310 44,053
7 14,071 17,719 17,186 44,053 17,172 16,643 44,053
8 14,775 19,240 18,944 44,053 18,592 18,299 44,053
9 15,513 20,895 20,642 44,053 20,142 19,892 44,053
10 16,289 22,694 22,694 44,053 21,836 21,836 44,053
11 17,103 24,899 24,899 44,053 23,882 23,882 44,053
12 17,959 27,321 27,321 44,053 26,146 26,146 44,053
13 18,856 29,985 29,985 44,053 28,658 28,658 44,053
14 19,799 32,937 32,937 45,453 31,451 31,451 44,053
15 20,789 36,201 36,201 48,510 34,558 34,558 46,309
16 21,829 39,797 39,797 51,737 37,990 37,990 49,387
17 22,920 43,747 43,747 55,997 41,759 41,759 53,452
18 24,066 48,084 48,084 60,587 45,898 45,898 57,832
19 25,270 52,878 52,878 65,569 50,473 50,473 62,588
20 26,533 58,144 58,144 70,936 55,500 55,500 67,710
25 33,864 93,204 93,204 108,117 88,957 88,957 103,191
35 55,160 239,102 239,102 253,449 228,054 228,054 241,737
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
32 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,260 9,279 44,053 10,198 9,219 44,053
2 11,025 10,527 9,566 44,053 10,392 9,435 44,053
3 11,576 10,802 9,863 44,053 10,582 9,647 44,053
4 12,155 11,085 10,318 44,053 10,766 10,004 44,053
5 12,763 11,376 10,634 44,053 10,942 10,206 44,053
6 13,401 11,675 11,159 44,053 11,109 10,598 44,053
7 14,071 11,984 11,494 44,053 11,264 10,779 44,053
8 14,775 12,301 12,039 44,053 11,403 11,146 44,053
9 15,513 12,627 12,396 44,053 11,522 11,293 44,053
10 16,289 12,963 12,963 44,053 11,618 11,618 44,053
11 17,103 13,443 13,443 44,053 11,783 11,783 44,053
12 17,959 13,942 13,942 44,053 11,923 11,923 44,053
13 18,856 14,460 14,460 44,053 12,034 12,034 44,053
14 19,799 14,999 14,999 44,053 12,110 12,110 44,053
15 20,789 15,558 15,558 44,053 12,146 12,146 44,053
16 21,829 16,140 16,140 44,053 12,132 12,132 44,053
17 22,920 16,745 16,745 44,053 12,061 12,061 44,053
18 24,066 17,374 17,374 44,053 11,919 11,919 44,053
19 25,270 18,027 18,027 44,053 11,693 11,693 44,053
20 26,533 18,706 18,706 44,053 11,367 11,367 44,053
25 33,864 22,524 22,524 44,053 7,536 7,536 44,053
35 55,160 32,768 32,768 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 33
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,733 8,764 44,053 9,670 8,702 44,053
2 11,025 9,472 8,532 44,053 9,331 8,394 44,053
3 11,576 9,217 8,305 44,053 8,983 8,076 44,053
4 12,155 8,968 8,233 44,053 8,624 7,895 44,053
5 12,763 8,725 8,016 44,053 8,253 7,550 44,053
6 13,401 8,488 8,003 44,053 7,867 7,388 44,053
7 14,071 8,256 7,795 44,053 7,463 7,007 44,053
8 14,775 8,030 7,790 44,053 7,038 6,803 44,053
9 15,513 7,810 7,590 44,053 6,588 6,371 44,053
10 16,289 7,594 7,594 44,053 6,108 6,108 44,053
11 17,103 7,459 7,459 44,053 5,642 5,642 44,053
12 17,959 7,325 7,325 44,053 5,133 5,133 44,053
13 18,856 7,193 7,193 44,053 4,580 4,580 44,053
14 19,799 7,063 7,063 44,053 3,974 3,974 44,053
15 20,789 6,935 6,935 44,053 3,308 3,308 44,053
16 21,829 6,808 6,808 44,053 2,574 2,574 44,053
17 22,920 6,684 6,684 44,053 1,760 1,760 44,053
18 24,066 6,561 6,561 44,053 852 852 44,053
19 25,270 6,439 6,439 44,053 -- -- --
20 26,533 6,320 6,320 44,053 -- -- --
25 33,864 5,746 5,746 44,053 -- -- --
35 55,160 4,713 4,713 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
34 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,478 9,728 44,053 10,413 9,663 44,053
2 11,025 11,440 10,690 44,053 11,302 10,552 44,053
3 11,576 12,493 11,743 44,053 12,276 11,526 44,053
4 12,155 13,645 13,045 44,053 13,342 12,742 44,053
5 12,763 14,907 14,307 44,053 14,511 13,911 44,053
6 13,401 16,287 15,887 44,053 15,794 15,394 44,053
7 14,071 17,799 17,399 44,053 17,203 16,803 44,053
8 14,775 19,453 19,253 44,053 18,750 18,550 44,053
9 15,513 21,265 21,065 44,053 20,451 20,251 44,053
10 16,289 23,247 23,247 44,053 22,324 22,324 44,053
11 17,103 25,507 25,507 44,053 24,427 24,427 44,053
12 17,959 27,989 27,989 44,053 26,755 26,755 44,053
13 18,856 30,726 30,726 44,053 29,340 29,340 44,053
14 19,799 33,760 33,760 46,590 32,216 32,216 44,458
15 20,789 37,107 37,107 49,724 35,406 35,406 47,444
16 21,829 40,794 40,794 53,032 38,922 38,922 50,599
17 22,920 44,843 44,843 57,400 42,784 42,784 54,764
18 24,066 49,290 49,290 62,106 47,025 47,025 59,253
19 25,270 54,204 54,204 67,213 51,714 51,714 64,125
20 26,533 59,602 59,602 72,715 56,864 56,864 69,374
25 33,864 95,541 95,541 110,828 91,143 91,143 105,726
35 55,160 245,097 245,097 259,804 233,657 233,657 247,677
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 35
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,913 9,163 44,053 9,846 9,096 44,053
2 11,025 10,236 9,486 44,053 10,092 9,342 44,053
3 11,576 10,572 9,822 44,053 10,336 9,586 44,053
4 12,155 10,919 10,319 44,053 10,579 9,979 44,053
5 12,763 11,279 10,679 44,053 10,819 10,219 44,053
6 13,401 11,651 11,251 44,053 11,053 10,653 44,053
7 14,071 12,037 11,637 44,053 11,279 10,879 44,053
8 14,775 12,437 12,237 44,053 11,495 11,295 44,053
9 15,513 12,851 12,651 44,053 11,696 11,496 44,053
10 16,289 13,279 13,279 44,053 11,879 11,879 44,053
11 17,103 13,771 13,771 44,053 12,059 12,059 44,053
12 17,959 14,283 14,283 44,053 12,214 12,214 44,053
13 18,856 14,815 14,815 44,053 12,342 12,342 44,053
14 19,799 15,367 15,367 44,053 12,437 12,437 44,053
15 20,789 15,942 15,942 44,053 12,493 12,493 44,053
16 21,829 16,539 16,539 44,053 12,502 12,502 44,053
17 22,920 17,159 17,159 44,053 12,455 12,455 44,053
18 24,066 17,804 17,804 44,053 12,340 12,340 44,053
19 25,270 18,474 18,474 44,053 12,143 12,143 44,053
20 26,533 19,171 19,171 44,053 11,849 11,849 44,053
25 33,864 23,088 23,088 44,053 8,254 8,254 44,053
35 55,160 33,598 33,598 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
36 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 45 MALE PREFERRED
INITIAL FACE AMOUNT: $44,053
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,403 8,653 44,053 9,336 8,586 44,053
2 11,025 9,210 8,460 44,053 9,060 8,310 44,053
3 11,576 9,020 8,270 44,053 8,773 8,023 44,053
4 12,155 8,834 8,234 44,053 8,472 7,872 44,053
5 12,763 8,650 8,050 44,053 8,156 7,556 44,053
6 13,401 8,470 8,070 44,053 7,823 7,423 44,053
7 14,071 8,293 7,893 44,053 7,469 7,069 44,053
8 14,775 8,119 7,919 44,053 7,091 6,891 44,053
9 15,513 7,948 7,748 44,053 6,685 6,485 44,053
10 16,289 7,780 7,780 44,053 6,247 6,247 44,053
11 17,103 7,642 7,642 44,053 5,781 5,781 44,053
12 17,959 7,506 7,506 44,053 5,274 5,274 44,053
13 18,856 7,371 7,371 44,053 4,721 4,721 44,053
14 19,799 7,239 7,239 44,053 4,116 4,116 44,053
15 20,789 7,108 7,108 44,053 3,451 3,451 44,053
16 21,829 6,979 6,979 44,053 2,718 2,718 44,053
17 22,920 6,852 6,852 44,053 1,905 1,905 44,053
18 24,066 6,727 6,727 44,053 999 999 44,053
19 25,270 6,603 6,603 44,053 -- -- --
20 26,533 6,481 6,481 44,053 -- -- --
25 33,864 5,897 5,897 44,053 -- -- --
35 55,160 4,844 4,844 44,053 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 37
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,845 9,851 34,014 10,740 9,748 34,014
2 11,025 11,765 10,779 34,014 11,544 10,563 34,014
3 11,576 12,764 11,791 34,014 12,421 11,454 34,014
4 12,155 13,852 13,044 34,014 13,379 12,578 34,014
5 12,763 15,034 14,246 34,014 14,426 13,646 34,014
6 13,401 16,320 15,757 34,014 15,571 15,015 34,014
7 14,071 17,719 17,186 34,014 16,824 16,298 34,014
8 14,775 19,240 18,944 34,014 18,194 17,903 34,014
9 15,513 20,895 20,642 34,014 19,694 19,445 34,014
10 16,289 22,695 22,695 34,014 21,341 21,341 34,014
11 17,103 24,900 24,900 34,014 23,344 23,344 34,014
12 17,959 27,338 27,338 34,014 25,581 25,581 34,014
13 18,856 30,067 30,067 35,480 28,088 28,088 34,014
14 19,799 33,083 33,083 38,707 30,896 30,896 36,149
15 20,789 36,400 36,400 42,225 33,993 33,993 39,432
16 21,829 40,049 40,049 46,056 37,398 37,398 43,008
17 22,920 44,073 44,073 49,803 41,154 41,154 46,505
18 24,066 48,516 48,516 53,853 45,300 45,300 50,284
19 25,270 53,455 53,455 58,267 49,882 49,882 54,372
20 26,533 58,871 58,871 64,170 54,935 54,935 59,880
25 33,864 95,260 95,260 100,976 88,892 88,892 94,226
35 55,160 245,064 245,064 257,317 225,310 225,310 236,576
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
38 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,260 9,279 34,014 10,153 9,175 34,014
2 11,025 10,527 9,566 34,014 10,300 9,344 34,014
3 11,576 10,802 9,863 34,014 10,439 9,506 34,014
4 12,155 11,085 10,318 34,014 10,572 9,813 34,014
5 12,763 11,376 10,634 34,014 10,695 9,961 34,014
6 13,401 11,675 11,159 34,014 10,807 10,299 34,014
7 14,071 11,984 11,494 34,014 10,902 10,420 34,014
8 14,775 12,301 12,039 34,014 10,975 10,720 34,014
9 15,513 12,627 12,396 34,014 11,018 10,790 34,014
10 16,289 12,963 12,963 34,014 11,026 11,026 34,014
11 17,103 13,443 13,443 34,014 11,084 11,084 34,014
12 17,959 13,942 13,942 34,014 11,105 11,105 34,014
13 18,856 14,460 14,460 34,014 11,084 11,084 34,014
14 19,799 14,999 14,999 34,014 11,017 11,017 34,014
15 20,789 15,558 15,558 34,014 10,896 10,896 34,014
16 21,829 16,140 16,140 34,014 10,707 10,707 34,014
17 22,920 16,745 16,745 34,014 10,430 10,430 34,014
18 24,066 17,374 17,374 34,014 10,042 10,042 34,014
19 25,270 18,027 18,027 34,014 9,510 9,510 34,014
20 26,533 18,706 18,706 34,014 8,802 8,802 34,014
25 33,864 22,524 22,524 34,014 893 893 34,014
35 55,160 32,768 32,768 34,407 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 39
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,733 8,764 34,014 9,625 8,659 34,014
2 11,025 9,472 8,532 34,014 9,239 8,304 34,014
3 11,576 9,217 8,305 34,014 8,842 7,937 34,014
4 12,155 8,968 8,233 34,014 8,433 7,707 34,014
5 12,763 8,725 8,016 34,014 8,010 7,310 34,014
6 13,401 8,488 8,003 34,014 7,570 7,094 34,014
7 14,071 8,256 7,795 34,014 7,107 6,653 34,014
8 14,775 8,030 7,790 34,014 6,614 6,381 34,014
9 15,513 7,810 7,590 34,014 6,084 5,869 34,014
10 16,289 7,594 7,594 34,014 5,509 5,509 34,014
11 17,103 7,459 7,459 34,014 4,927 4,927 34,014
12 17,959 7,325 7,325 34,014 4,287 4,287 34,014
13 18,856 7,193 7,193 34,014 3,584 3,584 34,014
14 19,799 7,063 7,063 34,014 2,813 2,813 34,014
15 20,789 6,935 6,935 34,014 1,964 1,964 34,014
16 21,829 6,808 6,808 34,014 1,019 1,019 34,014
17 22,920 6,684 6,684 34,014 -- -- --
18 24,066 6,561 6,561 34,014 -- -- --
19 25,270 6,439 6,439 34,014 -- -- --
20 26,533 6,320 6,320 34,014 -- -- --
25 33,864 5,746 5,746 34,014 -- -- --
35 55,160 4,713 4,713 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
40 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,478 9,728 34,014 10,366 9,616 34,014
2 11,025 11,440 10,690 34,014 11,205 10,455 34,014
3 11,576 12,493 11,743 34,014 12,125 11,375 34,014
4 12,155 13,645 13,045 34,014 13,138 12,538 34,014
5 12,763 14,907 14,307 34,014 14,252 13,652 34,014
6 13,401 16,287 15,887 34,014 15,481 15,081 34,014
7 14,071 17,799 17,399 34,014 16,834 16,434 34,014
8 14,775 19,453 19,253 34,014 18,326 18,126 34,014
9 15,513 21,265 21,065 34,014 19,973 19,773 34,014
10 16,289 23,252 23,252 34,014 21,795 21,795 34,014
11 17,103 25,514 25,514 34,014 23,855 23,855 34,014
12 17,959 28,027 28,027 34,014 26,156 26,156 34,014
13 18,856 30,835 30,835 36,386 28,738 28,738 34,014
14 19,799 33,928 33,928 39,697 31,618 31,618 36,993
15 20,789 37,331 37,331 43,305 34,787 34,787 40,353
16 21,829 41,074 41,074 47,235 38,272 38,272 44,013
17 22,920 45,202 45,202 51,079 42,117 42,117 47,593
18 24,066 49,759 49,759 55,233 46,361 46,361 51,461
19 25,270 54,825 54,825 59,760 51,081 51,081 55,679
20 26,533 60,380 60,380 65,814 56,256 56,256 61,319
25 33,864 97,702 97,702 103,564 91,028 91,028 96,490
35 55,160 251,346 251,346 263,913 230,725 230,725 242,262
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 41
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,913 9,163 34,014 9,800 9,050 34,014
2 11,025 10,236 9,486 34,014 9,995 9,245 34,014
3 11,576 10,572 9,822 34,014 10,188 9,438 34,014
4 12,155 10,919 10,319 34,014 10,377 9,777 34,014
5 12,763 11,279 10,679 34,014 10,561 9,961 34,014
6 13,401 11,651 11,251 34,014 10,737 10,337 34,014
7 14,071 12,037 11,637 34,014 10,901 10,501 34,014
8 14,775 12,437 12,237 34,014 11,047 10,847 34,014
9 15,513 12,851 12,651 34,014 11,168 10,968 34,014
10 16,289 13,279 13,279 34,014 11,259 11,259 34,014
11 17,103 13,771 13,771 34,014 11,334 11,334 34,014
12 17,959 14,283 14,283 34,014 11,371 11,371 34,014
13 18,856 14,815 14,815 34,014 11,368 11,368 34,014
14 19,799 15,367 15,367 34,014 11,321 11,321 34,014
15 20,789 15,942 15,942 34,014 11,222 11,222 34,014
16 21,829 16,539 16,539 34,014 11,058 11,058 34,014
17 22,920 17,159 17,159 34,014 10,809 10,809 34,014
18 24,066 17,804 17,804 34,014 10,452 10,452 34,014
19 25,270 18,474 18,474 34,014 9,956 9,956 34,014
20 26,533 19,171 19,171 34,014 9,289 9,289 34,014
25 33,864 23,088 23,088 34,014 1,728 1,728 34,014
35 55,160 33,598 33,598 35,278 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
42 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $34,014
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,403 8,653 34,014 9,290 8,540 34,014
2 11,025 9,210 8,460 34,014 8,965 8,215 34,014
3 11,576 9,020 8,270 34,014 8,627 7,877 34,014
4 12,155 8,834 8,234 34,014 8,274 7,674 34,014
5 12,763 8,650 8,050 34,014 7,905 7,305 34,014
6 13,401 8,470 8,070 34,014 7,515 7,115 34,014
7 14,071 8,293 7,893 34,014 7,100 6,700 34,014
8 14,775 8,119 7,919 34,014 6,652 6,452 34,014
9 15,513 7,948 7,748 34,014 6,164 5,964 34,014
10 16,289 7,780 7,780 34,014 5,628 5,628 34,014
11 17,103 7,642 7,642 34,014 5,047 5,047 34,014
12 17,959 7,506 7,506 34,014 4,408 4,408 34,014
13 18,856 7,371 7,371 34,014 3,707 3,707 34,014
14 19,799 7,239 7,239 34,014 2,938 2,938 34,014
15 20,789 7,108 7,108 34,014 2,091 2,091 34,014
16 21,829 6,979 6,979 34,014 1,148 1,148 34,014
17 22,920 6,852 6,852 34,014 86 86 34,014
18 24,066 6,727 6,727 34,014 -- -- --
19 25,270 6,603 6,603 34,014 -- -- --
20 26,533 6,481 6,481 34,014 -- -- --
25 33,864 5,897 5,897 34,014 -- -- --
35 55,160 4,844 4,844 34,014 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 43
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,845 9,851 20,000 10,654 9,665 20,000
2 11,025 11,765 10,779 20,000 11,364 10,386 20,000
3 11,576 12,764 11,791 20,000 12,138 11,175 20,000
4 12,155 13,852 13,044 20,000 12,989 12,194 20,000
5 12,763 15,034 14,246 20,000 13,931 13,156 20,000
6 13,401 16,320 15,757 20,000 14,981 14,431 20,000
7 14,071 17,726 17,193 20,031 16,163 15,642 20,000
8 14,775 19,289 18,993 21,412 17,507 17,219 20,000
9 15,513 21,008 20,756 22,900 19,044 18,797 20,759
10 16,289 22,868 22,868 24,927 20,728 20,728 22,593
11 17,103 25,099 25,099 27,107 22,746 22,746 24,566
12 17,959 27,556 27,556 29,485 24,970 24,970 26,718
13 18,856 30,240 30,240 32,357 27,397 27,397 29,316
14 19,799 33,200 33,200 35,192 30,076 30,076 31,882
15 20,789 36,440 36,440 38,627 33,002 33,002 34,982
16 21,829 40,015 40,015 42,016 36,236 36,236 38,048
17 22,920 43,926 43,926 46,123 39,767 39,767 41,756
18 24,066 48,222 48,222 50,634 43,616 43,616 45,797
19 25,270 52,972 52,972 55,622 47,805 47,805 50,196
20 26,533 58,190 58,190 61,100 52,389 52,389 55,009
25 33,864 93,081 93,081 97,735 81,743 81,743 85,831
35 55,160 238,359 238,359 240,743 202,949 202,949 204,979
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
44 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,260 9,279 20,000 10,065 9,088 20,000
2 11,025 10,527 9,566 20,000 10,103 9,151 20,000
3 11,576 10,802 9,863 20,000 10,112 9,185 20,000
4 12,155 11,085 10,318 20,000 10,086 9,335 20,000
5 12,763 11,376 10,634 20,000 10,019 9,294 20,000
6 13,401 11,675 11,159 20,000 9,901 9,402 20,000
7 14,071 11,984 11,494 20,000 9,720 9,247 20,000
8 14,775 12,301 12,039 20,000 9,461 9,214 20,000
9 15,513 12,627 12,396 20,000 9,105 8,882 20,000
10 16,289 12,963 12,963 20,000 8,628 8,628 20,000
11 17,103 13,443 13,443 20,000 8,076 8,076 20,000
12 17,959 13,942 13,942 20,000 7,349 7,349 20,000
13 18,856 14,460 14,460 20,000 6,403 6,403 20,000
14 19,799 14,999 14,999 20,000 5,185 5,185 20,000
15 20,789 15,558 15,558 20,000 3,616 3,616 20,000
16 21,829 16,140 16,140 20,000 1,586 1,586 20,000
17 22,920 16,745 16,745 20,000 -- -- --
18 24,066 17,374 17,374 20,000 -- -- --
19 25,270 18,027 18,027 20,000 -- -- --
20 26,533 18,706 18,706 20,000 -- -- --
25 33,864 22,524 22,524 23,650 -- -- --
35 55,160 32,795 32,795 33,124 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 45
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,733 8,764 20,000 9,534 8,570 20,000
2 11,025 9,472 8,532 20,000 9,031 8,101 20,000
3 11,576 9,217 8,305 20,000 8,484 7,586 20,000
4 12,155 8,968 8,233 20,000 7,887 7,168 20,000
5 12,763 8,725 8,016 20,000 7,228 6,537 20,000
6 13,401 8,488 8,003 20,000 6,494 6,029 20,000
7 14,071 8,256 7,795 20,000 5,669 5,226 20,000
8 14,775 8,030 7,790 20,000 4,729 4,505 20,000
9 15,513 7,810 7,590 20,000 3,646 3,437 20,000
10 16,289 7,594 7,594 20,000 2,389 2,389 20,000
11 17,103 7,459 7,459 20,000 935 935 20,000
12 17,959 7,325 7,325 20,000 -- -- --
13 18,856 7,193 7,193 20,000 -- -- --
14 19,799 7,063 7,063 20,000 -- -- --
15 20,789 6,935 6,935 20,000 -- -- --
16 21,829 6,808 6,808 20,000 -- -- --
17 22,920 6,684 6,684 20,000 -- -- --
18 24,066 6,561 6,561 20,000 -- -- --
19 25,270 6,439 6,439 20,000 -- -- --
20 26,533 6,320 6,320 20,000 -- -- --
25 33,864 5,746 5,746 20,000 -- -- --
35 55,160 4,713 4,713 20,000 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
46 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,478 9,728 20,000 10,272 9,522 20,000
2 11,025 11,440 10,690 20,000 11,005 10,255 20,000
3 11,576 12,493 11,743 20,000 11,809 11,059 20,000
4 12,155 13,645 13,045 20,000 12,700 12,100 20,000
5 12,763 14,907 14,307 20,000 13,692 13,092 20,000
6 13,401 16,287 15,887 20,000 14,807 14,407 20,000
7 14,071 17,807 17,407 20,122 16,070 15,670 20,000
8 14,775 19,506 19,306 21,652 17,516 17,316 20,000
9 15,513 21,383 21,183 23,308 19,180 18,980 20,907
10 16,289 23,429 23,429 25,538 21,012 21,012 22,904
11 17,103 25,715 25,715 27,773 23,059 23,059 24,904
12 17,959 28,233 28,233 30,210 25,314 25,314 27,086
13 18,856 30,984 30,984 33,153 27,775 27,775 29,720
14 19,799 34,018 34,018 36,059 30,492 30,492 32,322
15 20,789 37,338 37,338 39,579 33,458 33,458 35,466
16 21,829 41,002 41,002 43,052 36,737 36,737 38,574
17 22,920 45,010 45,010 47,261 40,317 40,317 42,334
18 24,066 49,413 49,413 51,885 44,220 44,220 46,432
19 25,270 54,281 54,281 56,995 48,468 48,468 50,892
20 26,533 59,628 59,628 62,610 53,115 53,115 55,771
25 33,864 95,380 95,380 100,149 82,876 82,876 87,021
35 55,160 244,246 244,246 246,689 205,763 205,763 207,821
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 47
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,913 9,163 20,000 9,703 8,953 20,000
2 11,025 10,236 9,486 20,000 9,782 9,032 20,000
3 11,576 10,572 9,822 20,000 9,833 9,083 20,000
4 12,155 10,919 10,319 20,000 9,852 9,252 20,000
5 12,763 11,279 10,679 20,000 9,833 9,233 20,000
6 13,401 11,651 11,251 20,000 9,765 9,365 20,000
7 14,071 12,037 11,637 20,000 9,638 9,238 20,000
8 14,775 12,437 12,237 20,000 9,437 9,237 20,000
9 15,513 12,851 12,651 20,000 9,141 8,941 20,000
10 16,289 13,279 13,279 20,000 8,730 8,730 20,000
11 17,103 13,771 13,771 20,000 8,191 8,191 20,000
12 17,959 14,283 14,283 20,000 7,480 7,480 20,000
13 18,856 14,815 14,815 20,000 6,554 6,554 20,000
14 19,799 15,367 15,367 20,000 5,359 5,359 20,000
15 20,789 15,942 15,942 20,000 3,819 3,819 20,000
16 21,829 16,539 16,539 20,000 1,827 1,827 20,000
17 22,920 17,159 17,159 20,000 -- -- --
18 24,066 17,804 17,804 20,000 -- -- --
19 25,270 18,474 18,474 20,000 -- -- --
20 26,533 19,171 19,171 20,130 -- -- --
25 33,864 23,088 23,088 24,242 -- -- --
35 55,160 33,626 33,626 33,962 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
48 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
SINGLE LIFE OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGE: 65 MALE PREFERRED
INITIAL FACE AMOUNT: $20,000
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,403 8,653 20,000 9,191 8,441 20,000
2 11,025 9,210 8,460 20,000 8,742 7,992 20,000
3 11,576 9,020 8,270 20,000 8,245 7,495 20,000
4 12,155 8,834 8,234 20,000 7,695 7,095 20,000
5 12,763 8,650 8,050 20,000 7,080 6,480 20,000
6 13,401 8,470 8,070 20,000 6,386 5,986 20,000
7 14,071 8,293 7,893 20,000 5,597 5,197 20,000
8 14,775 8,119 7,919 20,000 4,688 4,488 20,000
9 15,513 7,948 7,748 20,000 3,632 3,432 20,000
10 16,289 7,780 7,780 20,000 2,395 2,395 20,000
11 17,103 7,642 7,642 20,000 941 941 20,000
12 17,959 7,506 7,506 20,000 -- -- --
13 18,856 7,371 7,371 20,000 -- -- --
14 19,799 7,239 7,239 20,000 -- -- --
15 20,789 7,108 7,108 20,000 -- -- --
16 21,829 6,979 6,979 20,000 -- -- --
17 22,920 6,852 6,852 20,000 -- -- --
18 24,066 6,727 6,727 20,000 -- -- --
19 25,270 6,603 6,603 20,000 -- -- --
20 26,533 6,481 6,481 20,000 -- -- --
25 33,864 5,897 5,897 20,000 -- -- --
35 55,160 4,844 4,844 20,000 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 49
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,935 9,939 45,454 10,935 9,939 45,454
2 11,025 11,954 10,965 45,454 11,954 10,965 45,454
3 11,576 13,065 12,086 45,454 13,065 12,086 45,454
4 12,155 14,274 13,460 45,454 14,274 13,460 45,454
5 12,763 15,590 14,795 45,454 15,590 14,795 45,454
6 13,401 17,023 16,453 45,454 17,023 16,453 45,454
7 14,071 18,583 18,044 45,454 18,583 18,044 45,454
8 14,775 20,281 19,980 45,454 20,281 19,980 45,454
9 15,513 22,129 21,873 45,454 22,129 21,873 45,454
10 16,289 24,140 24,140 45,454 24,140 24,140 45,454
11 17,103 26,554 26,554 45,454 26,544 26,544 45,454
12 17,959 29,213 29,213 45,454 29,193 29,193 45,454
13 18,856 32,145 32,145 45,454 32,117 32,117 45,454
14 19,799 35,387 35,387 45,454 35,355 35,355 45,454
15 20,789 38,988 38,988 45,454 38,953 38,953 45,454
16 21,829 42,984 42,984 49,432 42,944 42,944 49,386
17 22,920 47,389 47,389 53,550 47,345 47,345 53,500
18 24,066 52,276 52,276 58,027 52,228 52,228 57,973
19 25,270 57,669 57,669 62,860 57,616 57,616 62,802
20 26,533 63,590 63,590 69,313 63,531 63,531 69,249
25 33,864 103,324 103,324 109,524 103,226 103,226 109,420
35 55,160 271,110 271,110 284,666 261,901 261,901 274,996
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
50 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,345 9,362 45,454 10,345 9,362 45,454
2 11,025 10,696 9,732 45,454 10,696 9,732 45,454
3 11,576 11,052 10,109 45,454 11,052 10,109 45,454
4 12,155 11,412 10,641 45,454 11,412 10,641 45,454
5 12,763 11,775 11,028 45,454 11,775 11,028 45,454
6 13,401 12,138 11,616 45,454 12,138 11,616 45,454
7 14,071 12,498 12,005 45,454 12,498 12,005 45,454
8 14,775 12,863 12,598 45,454 12,853 12,589 45,454
9 15,513 13,239 13,005 45,454 13,196 12,963 45,454
10 16,289 13,626 13,626 45,454 13,523 13,523 45,454
11 17,103 14,168 14,168 45,454 13,940 13,940 45,454
12 17,959 14,732 14,732 45,454 14,337 14,337 45,454
13 18,856 15,319 15,319 45,454 14,706 14,706 45,454
14 19,799 15,932 15,932 45,454 15,041 15,041 45,454
15 20,789 16,570 16,570 45,454 15,331 15,331 45,454
16 21,829 17,235 17,235 45,454 15,564 15,564 45,454
17 22,920 17,928 17,928 45,454 15,721 15,721 45,454
18 24,066 18,649 18,649 45,454 15,780 15,780 45,454
19 25,270 19,401 19,401 45,454 15,711 15,711 45,454
20 26,533 20,185 20,185 45,454 15,480 15,480 45,454
25 33,864 24,625 24,625 45,454 10,207 10,207 45,454
35 55,160 36,772 36,772 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 51
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,813 8,842 45,454 9,813 8,842 45,454
2 11,025 9,623 8,680 45,454 9,623 8,680 45,454
3 11,576 9,427 8,512 45,454 9,427 8,512 45,454
4 12,155 9,224 8,485 45,454 9,224 8,485 45,454
5 12,763 9,012 8,299 45,454 9,012 8,299 45,454
6 13,401 8,790 8,302 45,454 8,788 8,300 45,454
7 14,071 8,573 8,109 45,454 8,550 8,086 45,454
8 14,775 8,360 8,119 45,454 8,292 8,051 45,454
9 15,513 8,152 7,932 45,454 8,010 7,790 45,454
10 16,289 7,949 7,949 45,454 7,696 7,696 45,454
11 17,103 7,828 7,828 45,454 7,403 7,403 45,454
12 17,959 7,708 7,708 45,454 7,061 7,061 45,454
13 18,856 7,590 7,590 45,454 6,661 6,661 45,454
14 19,799 7,473 7,473 45,454 6,193 6,193 45,454
15 20,789 7,358 7,358 45,454 5,644 5,644 45,454
16 21,829 7,244 7,244 45,454 4,995 4,995 45,454
17 22,920 7,131 7,131 45,454 4,222 4,222 45,454
18 24,066 7,019 7,019 45,454 3,293 3,293 45,454
19 25,270 6,909 6,909 45,454 2,168 2,168 45,454
20 26,533 6,800 6,800 45,454 798 798 45,454
25 33,864 6,273 6,273 45,454 -- -- --
35 55,160 5,306 5,306 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
52 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,565 9,815 45,454 10,565 9,815 45,454
2 11,025 11,624 10,874 45,454 11,624 10,874 45,454
3 11,576 12,785 12,035 45,454 12,785 12,035 45,454
4 12,155 14,059 13,459 45,454 14,059 13,459 45,454
5 12,763 15,455 14,855 45,454 15,455 14,855 45,454
6 13,401 16,985 16,585 45,454 16,985 16,585 45,454
7 14,071 18,663 18,263 45,454 18,663 18,263 45,454
8 14,775 20,502 20,302 45,454 20,502 20,302 45,454
9 15,513 22,518 22,318 45,454 22,518 22,318 45,454
10 16,289 24,731 24,731 45,454 24,731 24,731 45,454
11 17,103 27,206 27,206 45,454 27,201 27,201 45,454
12 17,959 29,934 29,934 45,454 29,924 29,924 45,454
13 18,856 32,945 32,945 45,454 32,932 32,932 45,454
14 19,799 36,279 36,279 45,454 36,265 36,265 45,454
15 20,789 39,986 39,986 46,385 39,970 39,970 46,366
16 21,829 44,086 44,086 50,699 44,068 44,068 50,679
17 22,920 48,605 48,605 54,924 48,585 48,585 54,902
18 24,066 53,617 53,617 59,516 53,596 53,596 59,492
19 25,270 59,149 59,149 64,473 59,125 59,125 64,447
20 26,533 65,222 65,222 71,092 65,195 65,195 71,063
25 33,864 105,975 105,975 112,334 105,930 105,930 112,286
35 55,160 278,067 278,067 291,970 268,761 268,761 282,199
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 53
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,995 9,245 45,454 9,995 9,245 45,454
2 11,025 10,400 9,650 45,454 10,400 9,650 45,454
3 11,576 10,815 10,065 45,454 10,815 10,065 45,454
4 12,155 11,240 10,640 45,454 11,240 10,640 45,454
5 12,763 11,672 11,072 45,454 11,672 11,072 45,454
6 13,401 12,110 11,710 45,454 12,110 11,710 45,454
7 14,071 12,551 12,151 45,454 12,551 12,151 45,454
8 14,775 13,002 12,802 45,454 12,993 12,793 45,454
9 15,513 13,469 13,269 45,454 13,430 13,230 45,454
10 16,289 13,955 13,955 45,454 13,857 13,857 45,454
11 17,103 14,510 14,510 45,454 14,292 14,292 45,454
12 17,959 15,089 15,089 45,454 14,707 14,707 45,454
13 18,856 15,692 15,692 45,454 15,096 15,096 45,454
14 19,799 16,320 16,320 45,454 15,453 15,453 45,454
15 20,789 16,974 16,974 45,454 15,767 15,767 45,454
16 21,829 17,656 17,656 45,454 16,027 16,027 45,454
17 22,920 18,366 18,366 45,454 16,214 16,214 45,454
18 24,066 19,106 19,106 45,454 16,307 16,307 45,454
19 25,270 19,877 19,877 45,454 16,276 16,276 45,454
20 26,533 20,681 20,681 45,454 16,089 16,089 45,454
25 33,864 25,234 25,234 45,454 11,191 11,191 45,454
35 55,160 37,691 37,691 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
54 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 55 MALE PREFERRED/55 FEMALE PREFERRED
INITIAL FACE AMOUNT: $45,454
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,481 8,731 45,454 9,481 8,731 45,454
2 11,025 9,356 8,606 45,454 9,356 8,606 45,454
3 11,576 9,225 8,475 45,454 9,225 8,475 45,454
4 12,155 9,084 8,484 45,454 9,084 8,484 45,454
5 12,763 8,932 8,332 45,454 8,932 8,332 45,454
6 13,401 8,769 8,369 45,454 8,767 8,367 45,454
7 14,071 8,608 8,208 45,454 8,585 8,185 45,454
8 14,775 8,450 8,250 45,454 8,382 8,182 45,454
9 15,513 8,294 8,094 45,454 8,152 7,952 45,454
10 16,289 8,141 8,141 45,454 7,888 7,888 45,454
11 17,103 8,018 8,018 45,454 7,595 7,595 45,454
12 17,959 7,896 7,896 45,454 7,253 7,253 45,454
13 18,856 7,776 7,776 45,454 6,854 6,854 45,454
14 19,799 7,657 7,657 45,454 6,386 6,386 45,454
15 20,789 7,539 7,539 45,454 5,837 5,837 45,454
16 21,829 7,423 7,423 45,454 5,189 5,189 45,454
17 22,920 7,308 7,308 45,454 4,419 4,419 45,454
18 24,066 7,194 7,194 45,454 3,493 3,493 45,454
19 25,270 7,082 7,082 45,454 2,371 2,371 45,454
20 26,533 6,971 6,971 45,454 1,006 1,006 45,454
25 33,864 6,435 6,435 45,454 -- -- --
35 55,160 5,450 5,450 45,454 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 55
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,929 9,933 28,329 10,929 9,933 28,329
2 11,025 11,928 10,939 28,329 11,928 10,939 28,329
3 11,576 13,002 12,024 28,329 13,002 12,024 28,329
4 12,155 14,158 13,345 28,329 14,158 13,345 28,329
5 12,763 15,407 14,614 28,329 15,403 14,610 28,329
6 13,401 16,767 16,200 28,329 16,747 16,180 28,329
7 14,071 18,251 17,714 28,329 18,202 17,666 28,329
8 14,775 19,868 19,569 28,329 19,782 19,483 28,329
9 15,513 21,632 21,378 28,329 21,507 21,253 28,329
10 16,289 23,558 23,558 28,329 23,404 23,404 28,329
11 17,103 25,918 25,918 28,329 25,721 25,721 28,329
12 17,959 28,547 28,547 30,546 28,328 28,328 30,312
13 18,856 31,435 31,435 33,636 31,193 31,193 33,377
14 19,799 34,615 34,615 36,693 34,349 34,349 36,410
15 20,789 38,100 38,100 40,386 37,806 37,806 40,075
16 21,829 41,942 41,942 44,039 41,618 41,618 43,700
17 22,920 46,158 46,158 48,467 45,790 45,790 48,080
18 24,066 50,832 50,832 53,374 50,349 50,349 52,867
19 25,270 55,979 55,979 58,779 55,353 55,353 58,121
20 26,533 61,648 61,648 64,730 60,803 60,803 63,844
25 33,864 99,852 99,852 104,845 95,844 95,844 100,637
35 55,160 261,965 261,965 264,585 239,065 239,065 241,456
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
56 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,338 9,356 28,329 10,338 9,356 28,329
2 11,025 10,669 9,706 28,329 10,669 9,706 28,329
3 11,576 10,987 10,045 28,329 10,987 10,045 28,329
4 12,155 11,304 10,535 28,329 11,290 10,520 28,329
5 12,763 11,631 10,885 28,329 11,571 10,826 28,329
6 13,401 11,968 11,448 28,329 11,824 11,306 28,329
7 14,071 12,315 11,823 28,329 12,042 11,551 28,329
8 14,775 12,674 12,410 28,329 12,212 11,951 28,329
9 15,513 13,044 12,811 28,329 12,321 12,090 28,329
10 16,289 13,425 13,425 28,329 12,352 12,352 28,329
11 17,103 13,958 13,958 28,329 12,391 12,391 28,329
12 17,959 14,513 14,513 28,329 12,320 12,320 28,329
13 18,856 15,092 15,092 28,329 12,118 12,118 28,329
14 19,799 15,695 15,695 28,329 11,753 11,753 28,329
15 20,789 16,323 16,323 28,329 11,186 11,186 28,329
16 21,829 16,977 16,977 28,329 10,361 10,361 28,329
17 22,920 17,659 17,659 28,329 9,198 9,198 28,329
18 24,066 18,370 18,370 28,329 7,585 7,585 28,329
19 25,270 19,110 19,110 28,329 5,365 5,365 28,329
20 26,533 19,882 19,882 28,329 2,323 2,323 28,329
25 33,864 24,252 24,252 28,329 -- -- --
35 55,160 36,210 36,210 36,573 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 57
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 1
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,807 8,836 28,329 9,807 8,836 28,329
2 11,025 9,596 8,654 28,329 9,596 8,654 28,329
3 11,576 9,362 8,448 28,329 9,361 8,447 28,329
4 12,155 9,132 8,395 28,329 9,098 8,362 28,329
5 12,763 8,908 8,196 28,329 8,800 8,090 28,329
6 13,401 8,688 8,201 28,329 8,458 7,973 28,329
7 14,071 8,473 8,010 28,329 8,061 7,600 28,329
8 14,775 8,263 8,022 28,329 7,594 7,356 28,329
9 15,513 8,057 7,837 28,329 7,038 6,820 28,329
10 16,289 7,855 7,855 28,329 6,369 6,369 28,329
11 17,103 7,736 7,736 28,329 5,611 5,611 28,329
12 17,959 7,617 7,617 28,329 4,677 4,677 28,329
13 18,856 7,500 7,500 28,329 3,531 3,531 28,329
14 19,799 7,384 7,384 28,329 2,125 2,125 28,329
15 20,789 7,270 7,270 28,329 398 398 28,329
16 21,829 7,156 7,156 28,329 -- -- --
17 22,920 7,045 7,045 28,329 -- -- --
18 24,066 6,934 6,934 28,329 -- -- --
19 25,270 6,825 6,825 28,329 -- -- --
20 26,533 6,717 6,717 28,329 -- -- --
25 33,864 6,195 6,195 28,329 -- -- --
35 55,160 5,236 5,236 28,329 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
58 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 12% (11.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 10,559 9,809 28,329 10,559 9,809 28,329
2 11,025 11,597 10,847 28,329 11,597 10,847 28,329
3 11,576 12,720 11,970 28,329 12,720 11,970 28,329
4 12,155 13,938 13,338 28,329 13,938 13,338 28,329
5 12,763 15,266 14,666 28,329 15,261 14,661 28,329
6 13,401 16,723 16,323 28,329 16,699 16,299 28,329
7 14,071 18,322 17,922 28,329 18,269 17,869 28,329
8 14,775 20,076 19,876 28,329 19,988 19,788 28,329
9 15,513 22,002 21,802 28,329 21,881 21,681 28,329
10 16,289 24,126 24,126 28,329 23,982 23,982 28,329
11 17,103 26,552 26,552 28,676 26,380 26,380 28,491
12 17,959 29,251 29,251 31,299 29,061 29,061 31,096
13 18,856 32,210 32,210 34,465 32,001 32,001 34,241
14 19,799 35,470 35,470 37,598 35,239 35,239 37,354
15 20,789 39,041 39,041 41,384 38,786 38,786 41,114
16 21,829 42,978 42,978 45,128 42,698 42,698 44,834
17 22,920 47,300 47,300 49,666 46,980 46,980 49,329
18 24,066 52,089 52,089 54,694 51,688 51,688 54,273
19 25,270 57,364 57,364 60,232 56,825 56,825 59,667
20 26,533 63,172 63,172 66,331 62,420 62,420 65,541
25 33,864 102,322 102,322 107,439 98,392 98,392 103,312
35 55,160 268,443 268,443 271,128 245,419 245,419 247,874
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 12% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 12%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
HARTFORD LIFE INSURANCE COMPANY 59
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 6% (5.40% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,988 9,238 28,329 9,988 9,238 28,329
2 11,025 10,372 9,622 28,329 10,372 9,622 28,329
3 11,576 10,749 9,999 28,329 10,749 9,999 28,329
4 12,155 11,131 10,531 28,329 11,114 10,514 28,329
5 12,763 11,527 10,927 28,329 11,462 10,862 28,329
6 13,401 11,938 11,538 28,329 11,788 11,388 28,329
7 14,071 12,365 11,965 28,329 12,083 11,683 28,329
8 14,775 12,809 12,609 28,329 12,337 12,137 28,329
9 15,513 13,269 13,069 28,329 12,537 12,337 28,329
10 16,289 13,747 13,747 28,329 12,667 12,667 28,329
11 17,103 14,293 14,293 28,329 12,730 12,730 28,329
12 17,959 14,863 14,863 28,329 12,689 12,689 28,329
13 18,856 15,456 15,456 28,329 12,521 12,521 28,329
14 19,799 16,074 16,074 28,329 12,198 12,198 28,329
15 20,789 16,718 16,718 28,329 11,682 11,682 28,329
16 21,829 17,389 17,389 28,329 10,919 10,919 28,329
17 22,920 18,088 18,088 28,329 9,833 9,833 28,329
18 24,066 18,817 18,817 28,329 8,317 8,317 28,329
19 25,270 19,576 19,576 28,329 6,224 6,224 28,329
20 26,533 20,367 20,367 28,329 3,347 3,347 28,329
25 33,864 24,848 24,848 28,329 -- -- --
35 55,160 37,109 37,109 37,481 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 6% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 6%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
60 HARTFORD LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
MODIFIED SINGLE PREMIUM VARIABLE LIFE INSURANCE
LAST SURVIVOR OPTION
POLICY OWNER OPTION: 2
$10,000 INITIAL PREMIUM
ISSUE AGES: 65 MALE PREFERRED/65 FEMALE PREFERRED
INITIAL FACE AMOUNT: $28,329
ASSUMING HYPOTHETICAL GROSS ANNUAL INVESTMENT RETURN OF 0% (-0.60% NET)
<TABLE>
<CAPTION>
CURRENT CHARGES* GUARANTEED CHARGES**
PREMIUM ---------------------------- ------------------------------
END OF ACCUMULATED CASH CASH
POLICY 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 9,475 8,725 28,329 9,475 8,725 28,329
2 11,025 9,329 8,579 28,329 9,329 8,579 28,329
3 11,576 9,160 8,410 28,329 9,157 8,407 28,329
4 12,155 8,993 8,393 28,329 8,955 8,355 28,329
5 12,763 8,829 8,229 28,329 8,715 8,115 28,329
6 13,401 8,668 8,268 28,329 8,430 8,030 28,329
7 14,071 8,509 8,109 28,329 8,087 7,687 28,329
8 14,775 8,352 8,152 28,329 7,671 7,471 28,329
9 15,513 8,198 7,998 28,329 7,164 6,964 28,329
10 16,289 8,045 8,045 28,329 6,542 6,542 28,329
11 17,103 7,923 7,923 28,329 5,787 5,787 28,329
12 17,959 7,803 7,803 28,329 4,859 4,859 28,329
13 18,856 7,683 7,683 28,329 3,720 3,720 28,329
14 19,799 7,566 7,566 28,329 2,323 2,323 28,329
15 20,789 7,449 7,449 28,329 607 607 28,329
16 21,829 7,334 7,334 28,329 -- -- --
17 22,920 7,220 7,220 28,329 -- -- --
18 24,066 7,107 7,107 28,329 -- -- --
19 25,270 6,996 6,996 28,329 -- -- --
20 26,533 6,886 6,886 28,329 -- -- --
25 33,864 6,354 6,354 28,329 -- -- --
35 55,160 5,379 5,379 28,329 -- -- --
</TABLE>
<TABLE>
<C> <S>
* 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.
</TABLE>
THE HYPOTHETICAL INVESTMENT RESULTS SHOWN ABOVE AND ELSEWHERE IN THIS
PROSPECTUS ARE ILLUSTRATIVE ONLY AND SHOULD NOT BE DEEMED A REPRESENTATION OF
PAST OR FUTURE INVESTMENT RESULTS. ACTUAL INVESTMENT RESULTS MAY BE MORE OR LESS
THAN THOSE SHOWN. THE DEATH BENEFIT, ACCOUNT VALUE AND CASH SURRENDER VALUE FOR
A POLICY WOULD BE DIFFERENT FROM THOSE SHOWN IF ACTUAL INVESTMENT RETURN
APPLICABLE TO THE POLICY AVERAGE 0% OVER A PERIOD OF YEARS, BUT ALSO FLUCTUATED
ABOVE OR BELOW THAT AVERAGE FOR INDIVIDUAL POLICY YEARS. THE DEATH BENEFIT,
ACCOUNT VALUE AND CASH SURRENDER VALUE FOR A POLICY WOULD ALSO BE DIFFERENT FROM
THOSE SHOWN, DEPENDING ON THE INVESTMENT ALLOCATIONS MADE TO THE SEPARATE
ACCOUNTS AND THE RATES OF RETURN OF THE SEPARATE ACCOUNT IF THE ACTUAL RATES OF
INVESTMENT RETURN APPLICABLE TO THE POLICY AVERAGED 0%, BUT VARIED ABOVE OR
BELOW THAT AVERAGE FOR THE SEPARATE ACCOUNT. NO REPRESENTATION CAN BE MADE THAT
THIS HYPOTHETICAL RATE OF RETURN CAN BE ACHIEVED FOR ANY ONE YEAR OR SUSTAINED
OVER ANY PERIOD OF TIME.
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company
Separate Account Five and to the
Owners of Units of Interest Therein:
We have audited the accompanying statement of assets and liabilities of the Bond
Fund Sub-Account, Stock Fund Sub-Account, Money Market Fund Sub-Account,
Advisers Fund Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage
Securities Fund Sub-Account, Index Fund Sub-Account, International Opportunities
Fund Sub-Account, Dividend and Growth Fund Sub-Account, International Advisers
Fund Sub-Account, Small Company Fund Sub-Account and MidCap Fund Sub-Account
(constituting Hartford Life Insurance Company Separate Account Five) (the
Accounts) as of December 31, 1997, and the related statement of operations for
the year then ended and statements of changes in net assets for each of the two
years in the period then ended (except for the MidCap Fund Sub-Account which
reflects the period from inception, July 15, 1997, to December 31, 1997 and for
the Small Company Fund Sub-Account which reflects the year ended December 31,
1997 and the period from inception, August 9, 1996, to December 31, 1996). These
financial statements are the responsibility of the Account's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Bond Fund Sub-Account,
Stock Fund Sub-Account, Money Market Fund Sub-Account, Advisers Fund
Sub-Account, Capital Appreciation Fund Sub-Account, Mortgage Securities Fund
Sub-Account, Index Fund Sub-Account, International Opportunities Fund
Sub-Account, Dividend and Growth Fund Sub-Account, International Advisers Fund
Sub-Account, Small Company Fund Sub-Account and MidCap Fund Sub-Account
(constituting Hartford Life Insurance Company Separate Account Five) as of
December 31, 1997, the results of its operations and the changes in its net
assets for each of two years in the period then ended (except for the MidCap
Fund Sub-Account which reflects the period from inception, July 15, 1997, to
December 31, 1997 and for the Small Company Fund Sub-Account which reflects the
year ended December 31, 1997 and the period from inception, August 9, 1996, to
December 31, 1996) in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
February 16, 1998
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT FIVE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF ASSETS & LIABILITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 5,569,842
Cost $ 5,612,598
Market Value......... $5,846,964 -- -- --
Hartford Stock Fund,
Inc.
Shares 6,313,268
Cost $24,991,211
Market Value......... -- $32,344,938 -- --
HVA Money Market Fund,
Inc.
Shares 16,962,569
Cost $16,962,569
Market Value......... -- -- $16,962,569 --
Hartford Advisers Fund,
Inc.
Shares 23,135,695
Cost $48,309,463
Market Value......... -- -- -- $58,458,025
Hartford Capital
Appreciation Fund,
Inc.
Shares 10,748,959
Cost $39,487,244
Market Value......... -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 2,056,417
Cost $ 2,185,097
Market Value......... -- -- -- --
Hartford Index Fund,
Inc.
Shares 5,631,982
Cost $12,547,865
Market Value......... -- -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,814,104
Cost $11,641,764
Market Value......... -- -- -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 12,478,180
Cost $18,987,253
Market Value......... -- -- -- --
Hartford International
Advisers Fund, Inc.
Shares 1,941,036
Cost $ 2,233,291
Market Value......... -- -- -- --
Hartford Small Company,
Inc.
Shares 1,488,184
Cost $ 1,847,005
Market Value......... -- -- -- --
Hartford MidCap Fund,
Inc.
Shares 153,462
Cost $ 171,209
Market Value......... -- -- -- --
Due from Hartford Life
Insurance Company..... -- -- 288,453 13,405
Receivable from fund
shares sold........... 10 89 -- --
----------- ----------- ----------- -------------
Total Assets........... 5,846,974 32,345,027 17,251,022 58,471,430
----------- ----------- ----------- -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... 12 82 -- --
Payable for fund shares
purchased............. -- -- 287,643 13,387
----------- ----------- ----------- -------------
Total Liabilities...... 12 82 287,643 13,387
----------- ----------- ----------- -------------
Net Assets (variable
life contract
liabilities).......... $5,846,962 $32,344,945 $16,963,379 $58,458,043
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
Units Owned by
Participants.......... 4,284,076 14,917,782 14,500,449 31,579,124
Unit Values............ $ 1.364813 $ 2.168214 $ 1.169852 $ 1.851161
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 5,569,842
Cost $ 5,612,598
Market Value......... -- -- -- -- -- --
Hartford Stock Fund,
Inc.
Shares 6,313,268
Cost $24,991,211
Market Value......... -- -- -- -- -- --
HVA Money Market Fund,
Inc.
Shares 16,962,569
Cost $16,962,569
Market Value......... -- -- -- -- -- --
Hartford Advisers Fund,
Inc.
Shares 23,135,695
Cost $48,309,463
Market Value......... -- -- -- -- -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 10,748,959
Cost $39,487,244
Market Value......... $47,399,868 -- -- -- -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 2,056,417
Cost $ 2,185,097
Market Value......... -- $2,228,705 -- -- -- --
Hartford Index Fund,
Inc.
Shares 5,631,982
Cost $12,547,865
Market Value......... -- -- $16,207,206 -- -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,814,104
Cost $11,641,764
Market Value......... -- -- -- $11,409,479 -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 12,478,180
Cost $18,987,253
Market Value......... -- -- -- -- $24,361,500 --
Hartford International
Advisers Fund, Inc.
Shares 1,941,036
Cost $ 2,233,291
Market Value......... -- -- -- -- -- $2,280,312
Hartford Small Company,
Inc.
Shares 1,488,184
Cost $ 1,847,005
Market Value......... -- -- -- -- -- --
Hartford MidCap Fund,
Inc.
Shares 153,462
Cost $ 171,209
Market Value......... -- -- -- -- -- --
Due from Hartford Life
Insurance Company..... 13,413 -- -- 1 11,741 --
Receivable from fund
shares sold........... -- 4 -- 3 -- --
----------------- --------------- ----------- ------------------ ------------ -------------
Total Assets........... 47,413,281 2,228,709 16,207,206 11,409,483 24,373,241 2,280,312
----------------- --------------- ----------- ------------------ ------------ -------------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- 3 -- -- -- 1
Payable for fund shares
purchased............. 13,414 -- -- -- 11,744 --
----------------- --------------- ----------- ------------------ ------------ -------------
Total Liabilities...... 13,414 3 -- -- 11,744 1
----------------- --------------- ----------- ------------------ ------------ -------------
Net Assets (variable
life contract
liabilities).......... $47,399,867 $2,228,706 $16,207,206 $11,409,483 $24,361,497 $2,280,311
----------------- --------------- ----------- ------------------ ------------ -------------
----------------- --------------- ----------- ------------------ ------------ -------------
Units Owned by
Participants.......... 24,730,194 1,674,052 7,360,101 8,675,581 11,081,069 1,668,813
Unit Values............ $ 1.916680 $ 1.331324 $ 2.202036 $ 1.315126 $ 2.198479 $ 1.366427
<CAPTION>
SMALL MIDCAP
COMPANY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT
------------ -----------
<S> <C> <C>
ASSETS:
Investments:
Hartford Bond Fund,
Inc.
Shares 5,569,842
Cost $ 5,612,598
Market Value......... -- --
Hartford Stock Fund,
Inc.
Shares 6,313,268
Cost $24,991,211
Market Value......... -- --
HVA Money Market Fund,
Inc.
Shares 16,962,569
Cost $16,962,569
Market Value......... -- --
Hartford Advisers Fund,
Inc.
Shares 23,135,695
Cost $48,309,463
Market Value......... -- --
Hartford Capital
Appreciation Fund,
Inc.
Shares 10,748,959
Cost $39,487,244
Market Value......... -- --
Hartford Mortgage
Securities Fund, Inc.
Shares 2,056,417
Cost $ 2,185,097
Market Value......... -- --
Hartford Index Fund,
Inc.
Shares 5,631,982
Cost $12,547,865
Market Value......... -- --
Hartford International
Opportunities Fund,
Inc.
Shares 8,814,104
Cost $11,641,764
Market Value......... -- --
Hartford Dividend and
Growth Fund, Inc.
Shares 12,478,180
Cost $18,987,253
Market Value......... -- --
Hartford International
Advisers Fund, Inc.
Shares 1,941,036
Cost $ 2,233,291
Market Value......... -- --
Hartford Small Company,
Inc.
Shares 1,488,184
Cost $ 1,847,005
Market Value......... $1,789,111 --
Hartford MidCap Fund,
Inc.
Shares 153,462
Cost $ 171,209
Market Value......... -- $ 174,503
Due from Hartford Life
Insurance Company..... -- --
Receivable from fund
shares sold........... -- --
------------ -----------
Total Assets........... 1,789,111 174,503
------------ -----------
LIABILITIES:
Due to Hartford Life
Insurance Company..... -- --
Payable for fund shares
purchased............. -- --
------------ -----------
Total Liabilities...... -- --
------------ -----------
Net Assets (variable
life contract
liabilities).......... $1,789,111 $ 174,503
------------ -----------
------------ -----------
Units Owned by
Participants.......... 1,537,144 167,885
Unit Values............ $ 1.163919 $1.039420
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT FIVE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF OPERATIONS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $289,780 $ 277,126 $911,582 $1,156,876
----------- ----------- ----------- -------------
Net investment income
(loss).............. 289,780 277,126 911,582 1,156,876
----------- ----------- ----------- -------------
CAPITAL GAINS INCOME..... -- 933,599 -- 1,663,628
----------- ----------- ----------- -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,747 8,984 -- 2,740
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 234,683 5,037,260 -- 6,960,236
----------- ----------- ----------- -------------
Net gain (loss) on
investments......... 236,430 5,046,244 -- 6,962,976
----------- ----------- ----------- -------------
Net increase
(decrease) in net
assets resulting
from operations..... $526,210 $ 6,256,969 $911,582 $9,783,480
----------- ----------- ----------- -------------
----------- ----------- ----------- -------------
</TABLE>
* From inception, July 15, 1997 to December 31, 1997.
The accompanying notes are an integral part of these financial statements.
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND INTERNATIONAL
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- --------------- ----------- ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 221,135 $116,672 $ 180,981 $ 104,356 $ 341,582 $70,580
----------------- --------------- ----------- ---------- ------------ -------------
Net investment income
(loss).............. 221,135 116,672 180,981 104,356 341,582 70,580
----------------- --------------- ----------- ---------- ------------ -------------
CAPITAL GAINS INCOME..... 2,382,496 -- 787,478 661,603 364,880 4,758
----------------- --------------- ----------- ---------- ------------ -------------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... 1,256 296 4,890 7,059 462 4,567
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 4,674,683 39,086 2,484,980 (783,223) 3,955,206 16,688
----------------- --------------- ----------- ---------- ------------ -------------
Net gain (loss) on
investments......... 4,675,939 39,382 2,489,870 (776,164) 3,955,668 21,255
----------------- --------------- ----------- ---------- ------------ -------------
Net increase
(decrease) in net
assets resulting
from operations..... $7,279,570 $156,054 $ 3,458,329 $ (10,205) $4,662,130 $96,593
----------------- --------------- ----------- ---------- ------------ -------------
----------------- --------------- ----------- ---------- ------------ -------------
<CAPTION>
SMALL MIDCAP
COMPANY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT*
------------ ------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.............. $ 811 $ 156
------------ ------
Net investment income
(loss).............. 811 156
------------ ------
CAPITAL GAINS INCOME..... 81,211 --
------------ ------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain
(loss) on security
transactions.......... (11,838) (3)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (57,877) 3,294
------------ ------
Net gain (loss) on
investments......... (69,715) 3,291
------------ ------
Net increase
(decrease) in net
assets resulting
from operations..... $ 12,307 $3,447
------------ ------
------------ ------
</TABLE>
<PAGE>
SEPARATE ACCOUNT FIVE
HARTFORD LIFE INSURANCE COMPANY
STATEMENT OF CHANGES IN NET ASSETS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 289,780 $ 277,126 $ 911,582 $ 1,156,876
Capital gains income... -- 933,599 -- 1,663,628
Net realized gain
(loss) on security
transactions.......... 1,747 8,984 -- 2,740
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 234,683 5,037,260 -- 6,960,236
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations............ 526,210 6,256,969 911,582 9,783,480
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 63,950,949 2,129
Net transfers.......... 2,261,134 10,438,019 (61,547,449) 16,160,071
Surrenders............. (72,004) (726,356) (1,485,440) (1,461,109)
Net loan withdrawals... (40,246) (220,955) (2,906,735) (120,116)
Cost of insurance and
other fees............ (29,688) (165,194) (154,854) (322,766)
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 2,119,196 9,325,514 (2,143,529) 14,258,209
----------- ------------ ------------ -------------
Total increase
(decrease) in net
assets................ 2,645,406 15,582,483 (1,231,947) 24,041,689
NET ASSETS:
Beginning of period.... 3,201,556 16,762,462 18,195,326 34,416,354
----------- ------------ ------------ -------------
End of period.......... $5,846,962 $32,344,945 $16,963,379 $58,458,043
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
* From inception, July 15, 1997 to December 31, 1997.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
MONEY
BOND FUND STOCK FUND MARKET FUND ADVISERS FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------- ------------ ------------ -------------
OPERATIONS:
Net investment income
(loss)................ $ 154,157 $ 173,109 $ 711,690 $ 654,458
Capital gains income... -- 247,892 -- 263,891
Net realized gain
(loss) on security
transactions.......... (352) (96) -- (3,790)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ (26,709) 2,003,388 -- 2,721,905
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from
operations............ 127,096 2,424,293 711,690 3,636,464
----------- ------------ ------------ -------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 82,517,329 --
Net transfers.......... 2,030,523 10,080,041 (71,001,713) 21,840,419
Surrenders............. (39,577) (209,688) (280,151) (444,541)
Net loan withdrawals... 12,868 (96,267) (5,090,962) (483,514)
Cost of insurance and
other fees............ (15,332) (75,894) (144,970) (155,225)
----------- ------------ ------------ -------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,988,482 9,698,192 5,999,533 20,757,139
----------- ------------ ------------ -------------
Total increase
(decrease) in net
assets................ 2,115,578 12,122,485 6,711,223 24,393,603
NET ASSETS:
Beginning of period.... 1,085,978 4,639,977 11,484,103 10,022,751
----------- ------------ ------------ -------------
End of period.......... $3,201,556 $16,762,462 $18,195,326 $34,416,354
----------- ------------ ------------ -------------
----------- ------------ ------------ -------------
** From inception, August 9, 1996 to December 31, 1996.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 221,135 $ 116,672 $ 180,981 $ 104,356 $ 341,582
Capital gains income... 2,382,496 -- 787,478 661,603 364,880
Net realized gain
(loss) on security
transactions.......... 1,256 296 4,890 7,059 462
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 4,674,683 39,086 2,484,980 (783,223) 3,955,206
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 7,279,570 156,054 3,458,329 (10,205) 4,662,130
----------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. 684 -- -- 712 --
Net transfers.......... 12,167,630 699,756 4,486,710 3,635,238 8,771,193
Surrenders............. (1,165,216) (61,537) (569,846) (325,889) (474,419)
Net loan withdrawals... (179,295) (9,709) (170,615) (76,025) (141,694)
Cost of insurance and
other fees............ (268,542) (12,046) (85,758) (70,065) (120,449)
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 10,555,261 616,464 3,660,491 3,163,971 8,034,631
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets................ 17,834,831 772,518 7,118,820 3,153,766 12,696,761
NET ASSETS:
Beginning of period.... 29,565,036 1,456,188 9,088,386 8,255,717 11,664,736
----------------- ----------------- --------------- ------------------ ------------------
End of period.......... $47,399,867 $2,228,706 $16,207,206 $11,409,483 $24,361,497
----------------- ----------------- --------------- ------------------ ------------------
----------------- ----------------- --------------- ------------------ ------------------
* From inception, July 15, 1997 to December 31, 1997.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
CAPITAL MORTGAGE INTERNATIONAL DIVIDEND AND
APPRECIATION FUND SECURITIES FUND INDEX FUND OPPORTUNITIES FUND GROWTH FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------- ----------------- --------------- ------------------ ------------------
OPERATIONS:
Net investment income
(loss)................ $ 141,479 $ 74,538 $ 121,461 $ 104,616 $ 166,958
Capital gains income... 852,649 -- 55,597 71,613 66,764
Net realized gain
(loss) on security
transactions.......... 3,905 (264) 3,624 (826) 582
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 2,844,514 (3,548) 1,040,510 450,264 1,210,967
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from
operations............ 3,842,547 70,726 1,221,192 625,667 1,445,271
----------------- ----------------- --------------- ------------------ ------------------
UNIT TRANSACTIONS:
Purchases.............. -- -- -- -- --
Net transfers.......... 15,368,388 847,165 6,030,465 5,773,754 7,935,692
Surrenders............. (398,849) (36,769) (173,115) (98,814) (137,508)
Net loan withdrawals... (232,211) (1,547) (142,073) (48,108) (65,640)
Cost of insurance and
other fees............ (142,060) (7,811) (38,685) (34,733) (46,158)
----------------- ----------------- --------------- ------------------ ------------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 14,595,268 801,038 5,676,592 5,592,099 7,686,386
----------------- ----------------- --------------- ------------------ ------------------
Total increase
(decrease) in net
assets................ 18,437,815 871,764 6,897,784 6,217,766 9,131,657
NET ASSETS:
Beginning of period.... 11,127,221 584,424 2,190,602 2,037,951 2,533,079
----------------- ----------------- --------------- ------------------ ------------------
End of period.......... $29,565,036 $1,456,188 $ 9,088,386 $ 8,255,717 $11,664,736
----------------- ----------------- --------------- ------------------ ------------------
----------------- ----------------- --------------- ------------------ ------------------
** From inception, August 9, 1996 to December 31, 1996.
<CAPTION>
INTERNATIONAL SMALL MIDCAP
ADVISERS FUND COMPANY FUND FUND
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT*
------------- ------------ ------------
<S> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................ $ 70,580 $ 811 $ 156
Capital gains income... 4,758 81,211 --
Net realized gain
(loss) on security
transactions.......... 4,567 (11,838) (3)
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 16,688 (57,877) 3,294
------------- ------------ ------------
Net increase (decrease)
in net assets
resulting from
operations............ 96,593 12,307 3,447
------------- ------------ ------------
UNIT TRANSACTIONS:
Purchases.............. -- -- 1,000
Net transfers.......... 841,304 1,790,398 170,709
Surrenders............. (46,000) (10,130) (525)
Net loan withdrawals... (23,722) (2) --
Cost of insurance and
other fees............ (12,736) (4,445) (128)
------------- ------------ ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 758,846 1,775,821 171,056
------------- ------------ ------------
Total increase
(decrease) in net
assets................ 855,439 1,788,128 174,503
NET ASSETS:
Beginning of period.... 1,424,872 983 --
------------- ------------ ------------
End of period.......... $2,280,311 $1,789,111 $174,503
------------- ------------ ------------
------------- ------------ ------------
* From inception, July 15
STATEMENT OF CHANGES IN N
FOR THE YEAR ENDED DECEMB
INTERNATIONAL SMALL
ADVISERS FUND COMPANY FUND
SUB-ACCOUNT SUB-ACCOUNT**
------------- ------------
OPERATIONS:
Net investment income
(loss)................ $ 39,973 $ --
Capital gains income... 28,703 --
Net realized gain
(loss) on security
transactions.......... (2,872) --
Net unrealized
appreciation
(depreciation) of
investments during the
period................ 25,925 (17)
------------- ------------
Net increase (decrease)
in net assets
resulting from
operations............ 91,729 (17)
------------- ------------
UNIT TRANSACTIONS:
Purchases.............. -- 1,000
Net transfers.......... 1,218,628 --
Surrenders............. (13,045) --
Net loan withdrawals... (4) --
Cost of insurance and
other fees............ (5,555) --
------------- ------------
Net increase (decrease)
in net assets
resulting from unit
transactions.......... 1,200,024 1,000
------------- ------------
Total increase
(decrease) in net
assets................ 1,291,753 983
NET ASSETS:
Beginning of period.... 133,119 --
------------- ------------
End of period.......... $1,424,872 $ 983
------------- ------------
------------- ------------
** From inception, August
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SEPARATE ACCOUNT FIVE
HARTFORD LIFE INSURANCE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. ORGANIZATION:
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. The Account consists of forty-one
sub-accounts. These financial statements include twelve sub-accounts which
invest solely in Hartford Mutual Funds (the Funds). The thirteen sub-accounts
which invest in Dean Witter Select Dimensions Portfolios and the sixteen sub-
accounts which invest in Putnam VT Funds are presented in separate financial
statements. Both the Company and the Account are subject to supervision and
regulation by the Department of Insurance of the State of Connecticut and the
SEC. The Account invests deposits by variable life contractholders of the
Company in the Funds as directed by the contractholders.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Account, which are in accordance with generally accepted accounting principles
in the investment company industry:
a) SECURITY TRANSACTIONS -- Security transactions are recorded on the trade
date (date the order to buy or sell is executed). Cost of investments sold is
determined on the basis of identified cost. Dividend and capital gains income
are accrued as of the ex-dividend date. Capital gains income represents
dividends from the Funds which are characterized as capital gains under tax
regulations.
b) SECURITY VALUATION -- The investment in shares of the Funds are valued at
the closing net asset value per share as determined by the appropriate Fund as
of December 31, 1997.
c) FEDERAL INCOME TAXES -- The operations of the Account form a part of, and
are taxed with, the total operations of the Company, which is taxed as an
insurance company under the Internal Revenue Code. Under current law, no federal
income taxes are payable with respect to the operations of the Account.
d) USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the financial statements and the reported amounts
of income and expenses during the period. Operating results in the future could
vary from the amounts derived from management's estimates.
3. ADMINISTRATION OF THE ACCOUNT
AND RELATED CHARGES:
In accordance with the terms of the contracts, the Company makes deductions
for mortality and expense undertakings, cost of insurance, administrative fees,
and state premium taxes. These charges are deducted through termination of units
of interest from applicable contract owners' accounts.
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Hartford Life Insurance Company:
We have audited the accompanying Consolidated Balance Sheets of Hartford Life
Insurance Company (the "Company") and subsidiaries as of December 31, 1997 and
1996, 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,
1997. These consolidated financial statements and the schedules referred to
below are the responsibility of the Company's management. Our responsibility is
to express an opinion on these 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Hartford Life
Insurance Company and subsidiaries as of December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in Index to
Consolidated Financial Statements and Schedules are presented for the purpose of
complying with the Securities and Exchange Commission's rules and are not part
of the basic financial statements. These schedules have been subjected to the
auditing procedures applied in the audits of the basic 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 financial statements
taken as a whole.
ARTHUR ANDERSEN LLP
Hartford, Connecticut
January 27, 1998
<PAGE>
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
------------------------
1997 1996 1995
------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C>
Revenues
Premiums and other considerations............... $1,637 $1,705 $1,487
Net investment income........................... 1,368 1,397 1,328
Net realized capital gains (losses)............. 4 (213) (11)
------ ------ ------
Total revenues................................ 3,009 2,889 2,804
------ ------ ------
Benefits, claims and expenses
Benefits, claims and claim adjustment
expenses....................................... 1,379 1,535 1,422
Amortization of deferred policy acquisition
costs.......................................... 335 234 199
Dividends to policyholders...................... 240 635 675
Other expenses.................................. 586 427 317
------ ------ ------
Total benefits, claims and expenses........... 2,540 2,831 2,613
------ ------ ------
Income before income tax expense................ 469 58 191
Income tax expense.............................. 167 20 62
------ ------ ------
Net income........................................ $ 302 $ 38 $ 129
------ ------ ------
------ ------ ------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AS OF DECEMBER
31,
-----------------
1997 1996
------- -------
<S> <C> <C>
(IN MILLIONS,
EXCEPT FOR SHARE
DATA)
Assets
Investments
Fixed maturities, available for sale, at fair
value (amortized cost of $13,885 and
$13,579)....................................... $14,176 $13,624
Equity securities, at fair value................ 180 119
Policy loans, at outstanding balance............ 3,756 3,836
Other investments, at cost...................... 47 56
------- -------
Total investments............................. 18,159 17,635
Cash............................................ 54 43
Premiums receivable and agents' balances........ 18 137
Accrued investment income....................... 330 407
Reinsurance recoverables........................ 6,325 6,259
Deferred policy acquisition costs............... 3,315 2,760
Deferred income tax............................. 348 474
Other assets.................................... 352 357
Separate account assets......................... 69,055 49,690
------- -------
Total assets.................................. $97,956 $77,762
------- -------
------- -------
Liabilities
Future policy benefits.......................... $ 3,270 $ 2,474
Other policyholder funds........................ 21,034 22,134
Other liabilities............................... 2,254 1,572
Separate account liabilities.................... 69,055 49,690
------- -------
Total liabilities............................. 95,613 75,870
------- -------
Stockholder's Equity
Common stock -- 1,000 shares authorized, issued
and outstanding, par value $5,690.............. 6 6
Additional paid in capital...................... 1,045 1,045
Net unrealized capital gains on securities, net
of tax......................................... 179 30
Retained earnings............................... 1,113 811
------- -------
Total stockholder's equity.................... 2,343 1,892
------- -------
Total liabilities and stockholder's equity...... $97,956 $77,762
------- -------
------- -------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
<TABLE>
<CAPTION>
NET UNREALIZED
CAPITAL GAINS
ADDITIONAL (LOSSES) ON TOTAL
COMMON PAID IN SECURITIES, RETAINED STOCKHOLDER'S
STOCK CAPITAL NET OF TAX EARNINGS EQUITY
------ -------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
(IN MILLIONS)
Balance, December 31, 1994.............. $6 $ 826 $(654) $ 644 $ 822
Net income............................ -- -- -- 129 129
Capital contribution.................. -- 181 -- -- 181
Change in net unrealized capital gains
(losses) on securities, net of tax... -- -- 597 -- 597
--
------ ------ ----------- ------
Balance, December 31, 1995.............. 6 1,007 (57) 773 1,729
Net income............................ -- -- -- 38 38
Capital contribution.................. -- 38 -- -- 38
Change in net unrealized capital gains
(losses) on securities, net of tax... -- -- 87 -- 87
--
------ ------ ----------- ------
Balance, December 31, 1996.............. 6 1,045 30 811 1,892
Net income............................ -- -- -- 302 302
Change in net unrealized capital gains
(losses) on securities, net of tax... -- -- 149 -- 149
--
------ ------ ----------- ------
Balance, December 31, 1997.............. $6 $1,045 $179 $1,113 $2,343
--
--
------ ------ ----------- ------
------ ------ ----------- ------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
HARTFORD LIFE INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER
31,
------------------------------
1997 1996 1995
-------- -------- --------
(IN MILLIONS)
<S> <C> <C> <C>
Operating Activities
Net income............................ $ 302 $ 38 $ 129
Adjustments to reconcile net income to
cash provided by operating activities
Depreciation and amortization......... 8 14 21
Net realized capital (gains) losses... (4) 213 11
Decrease (increase) in deferred income
taxes................................ 40 (102) (172)
Increase in deferred policy
acquisition costs.................... (555) (572) (379)
Decrease (increase) in premiums
receivable and agents' balances...... 119 10 (81)
Decrease (increase) in accrued
investment income.................... 77 (13) (16)
Decrease (increase) in other assets... 52 (132) (177)
(Increase) decrease in reinsurance
recoverables......................... (416) 179 (35)
Increase (decrease) in liabilities for
future policy benefits............... 796 (92) 483
Increase in other liabilities......... 379 477 281
-------- -------- --------
Cash provided by operating
activities......................... 798 20 65
-------- -------- --------
Investing Activities
Purchases of fixed maturity
investments.......................... (6,231) (5,747) (6,228)
Sales of fixed maturity investments... 4,232 3,459 4,845
Maturities and principal paydowns of
fixed maturity investments........... 2,329 2,693 1,741
Net sales (purchases) of other
investments.......................... 24 (107) (871)
Net (purchases) sales of short-term
investments.......................... (638) 84 (24)
-------- -------- --------
Cash (used for) provided by
investing activities............... (284) 382 (537)
-------- -------- --------
Financing Activities
Capital contribution.................. -- 38 --
Net (disbursements for) receipts from
investment and universal life-type
contracts (charged against) credited
to policyholder accounts............. (503) (443) 498
-------- -------- --------
Cash (used for) provided by
financing activities............... (503) (405) 498
-------- -------- --------
Increase (decrease) in cash........... 11 (3) 26
Cash -- beginning of year............. 43 46 20
-------- -------- --------
Cash -- end of year................... $ 54 $ 43 $ 46
-------- -------- --------
-------- -------- --------
Supplemental Disclosure of Cash Flow
Information:
Net Cash Paid During the Year for:
Income taxes.......................... $ 9 $ 189 $ 162
Noncash Financing Activities:
Capital contribution.................. $ -- $ -- $ 181
-------- -------- --------
-------- -------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN MILLIONS EXCEPT PER SHARE DATA UNLESS OTHERWISE STATED)
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
These consolidated financial statements include Hartford Life Insurance
Company and its wholly-owned subsidiaries (the "Company"), ITT Hartford Life and
Annuity Insurance Company ("ILA") and ITT Hartford International Life
Reassurance Corporation ("HLRe"), formerly American Skandia Life Reinsurance
Corporation. The Company is a wholly-owned subsidiary of Hartford Life and
Accident Insurance Company ("HLA"), a wholly-owned subsidiary of Hartford Life,
Inc. ("Hartford Life"). Hartford Life is a direct subsidiary of Hartford
Accident and Indemnity Company ("HA&I"), an indirect subsidiary of The Hartford
Financial Services Group, Inc. ("The Hartford"). On February 10, 1997, Hartford
Life filed a registration statement, as amended, with the Securities and
Exchange Commission relating to an Initial Public Offering ("IPO") of the
Hartford Life's Class A Common Stock. Pursuant to the IPO on May 22, 1997,
Hartford Life sold to the public 26 million shares at $28.25 per share and
received net proceeds of $687. Of the proceeds, $527 was used to retire debt
related to Hartford Life's outstanding promissory notes and line of credit with
the remaining $160 contributed by Hartford Life to HLA to support growth in its
core businesses.
On December 19, 1995, ITT Industries, Inc. (formerly ITT Corporation)
("ITT") distributed all the outstanding shares of capital stock of The Hartford
to ITT stockholders of record on such date. As a result, The Hartford became an
independent, publicly traded company.
Along with its parent, the Company is a leading insurance and financial
services company which provides (a) investment products such as individual
variable annuities and fixed market value adjusted annuities, deferred
compensation and retirement plan services and mutual funds for savings and
retirement needs; (b) life insurance for income protection and estate planning;
and (c) employee benefits products such as group life and group disability
insurance and corporate owned life insurance.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
These consolidated financial statements present the financial position,
results of operations and cash flows of the Company. All material intercompany
transactions and balances between the Company, its subsidiaries and affiliates
have been eliminated. The consolidated financial statements are prepared on the
basis of generally accepted accounting principles which differ materially from
the statutory accounting practices prescribed by various insurance regulatory
authorities.
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 most
significant estimates include those used in determining deferred policy
acquisition costs and the liability for future policy benefits and other
policyholder funds. Although some variability is inherent in these estimates,
management believes the amounts provided are adequate.
Certain reclassifications have been made to prior year financial information
to conform to the current year presentation.
(B) CHANGES IN ACCOUNTING PRINCIPLES
In December 1997, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") No. 97-3 "Accounting by Insurance
and Other Enterprises for Insurance Related Assessments". This SOP provides
guidance on accounting by insurance and other enterprises for assessments
related to insurance activities. Specifically, the SOP provides guidance on when
a guaranty fund or other assessment should be recognized, how to measure the
liability, and what information should be disclosed. This SOP will be effective
for fiscal years beginning after December 15, 1998. Adoption of SOP 97-3 is not
expected to have a material impact on the Company's financial condition or
results of operations.
On November 14, 1996, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 96-12, "Recognition of Interest Income and Balance Sheet
Classification of Structured Notes". This EITF issue requires companies to
record income on certain structured securities on a retrospective interest
method. The Company adopted EITF No. 96-12 for structured securities acquired
after November 14, 1996. Adoption of EITF No. 96-12 did not have a material
effect on the Company's financial condition or results of operations.
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities"
which is effective for transfers and servicing of financial
<PAGE>
- --------------------------------------------------------------------------------
assets and extinguishments of liabilities occurring after December 31, 1996.
This statement established criteria for determining whether transferred assets
should be accounted for as sales or secured borrowings. Subsequently, in
December 1996, the FASB issued SFAS No. 127, "Deferral of Effective Date of
Certain Provisions of FASB Statement No. 125", which defers the effective date
of certain provisions of SFAS No. 125 for one year. Adoption of SFAS No. 125 is
not expected to have a material effect on the Company's financial condition or
results of operations.
Effective January 1, 1996, the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". This statement establishes accounting standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill related to
those assets to be held and used and for long-lived assets and certain
identifiable intangibles to be disposed of. Adoption of SFAS No. 121 did not
have a material effect on the Company's financial condition or results of
operations.
The Company's cash flows were not impacted by these changes in accounting
principles.
(C) REVENUE RECOGNITION
Revenues for universal life-type policies and investment products consist of
policy charges for the cost of insurance, policy administration and surrender
charges assessed to policy account balances and are recognized in the period in
which services are provided. Premiums for traditional life insurance and
disability policies are recognized as revenues when they are due from
policyholders.
(D) FUTURE POLICY BENEFITS AND OTHER POLICYHOLDER 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 and
mortality assumptions appropriate at the time the policies were issued. Health
reserves, which are the result of sales of group long-term and short-term
disability, stop loss, Medicare Supplement and individual disability products,
are stated at amounts determined by estimates on individual cases and estimates
of unreported claims based on past experience. Liabilities for universal
life-type and investment contracts are stated at policyholder account values
before surrender charges.
(E) POLICYHOLDER REALIZED CAPITAL GAINS AND LOSSES
Realized capital gains and losses on security transactions associated with
the Company's immediate participation guaranteed contracts are excluded from
revenues and deferred over the expected maturity of the securities, 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) INVESTMENTS
The Company's investments in fixed maturities include bonds and commercial
paper which are considered "available for sale" and accordingly are carried at
fair value with the after-tax difference from cost reflected as a component of
Stockholder's Equity designated "Net unrealized capital gains (losses) on
securities, net of tax". Equity securities, which include common and
non-redeemable preferred stocks, are carried at fair values with the after-tax
difference from cost reflected in Stockholder's Equity. Policy loans are carried
at outstanding balance which approximates fair value. Net realized capital gains
and losses, after deducting pension policyholders' share, are reported as a
component of revenue and are determined on a specific identification basis.
The Company's accounting policy for impairment requires recognition of an
other than temporary impairment charge on a security if it is determined that
the Company is unable to recover all amounts due under the contractual
obligations of the security. In addition, for securities expected to be sold, an
other than temporary impairment charge is recognized if the Company does not
expect the fair value of a security to recover to cost or amortized cost prior
to the expected date of sale. Once an impairment charge has been recorded, the
Company then continues to review the other than temporarily impaired securities
for appropriate valuation on an on-going basis.
During 1996, it was determined that certain individual securities within the
investment portfolio supporting the Company's block of guaranteed rate contract
business written prior to 1995 ("Closed Book GRC") could not recover to
amortized cost prior to sale. Therefore, an other than temporary impairment loss
of $88, after-tax, was recorded.
(G) DERIVATIVE INSTRUMENTS
The Company uses a variety of derivative instruments including swaps, caps,
floors, forwards and exchange traded financial futures and options 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. The Company
does not hold or issue derivative instruments for trading purposes. The
Company's accounting for derivative 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", AICPA SOP 86-2,
"Accounting for Options" and various EITF pronouncements. Written options are
used, in all cases in conjunction with other assets and derivatives, as part of
the Company's asset and liability management strategy. Derivative instruments
are carried at values consistent with the asset or liability being hedged.
Derivative instruments used to hedge fixed maturities or equity securities are
carried at fair value
<PAGE>
- --------------------------------------------------------------------------------
with the after-tax difference from cost reflected in Stockholder's Equity.
Derivative instruments used to hedge other invested assets or liabilities are
carried at cost.
Derivative instruments must be designated at inception as a hedge and
measured for effectiveness both at inception and on an on-going basis. The
Company'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. Derivative
instruments used to 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. Consistent with industry
practice, synthetic instruments are accounted for like the financial instrument
it is intended to replicate. Derivative instruments which fail to meet risk
management criteria, subsequent to acquisition, 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 investment of future receipt of product cash flows are deferred and, at
the time of the ultimate investment purchase, reflected as an adjustment to the
cost basis of the purchased asset. Gains or losses on futures used in invested
asset risk management are deferred and adjusted into the cost 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 net investment income over the remaining
asset life.
Open forward commitment contracts are marked to market through Stockholder's
Equity. Such contracts are accounted for at settlement by recording the purchase
of the specified securities at the previously committed price. Gains or losses
resulting from the termination of 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 option. 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 investment 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 net investment income. 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 capital gain or loss.
Premiums paid on purchased floor or cap agreements and the premium received
on issued cap or floor 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. Changes in the spot rate of instruments designated
as hedges of the net investment in a foreign subsidiary are reflected in the
cumulative translation adjustments component of Stockholder's Equity. Cash flows
from futures, options, and swaps, accounted for as hedges, are included with the
cash flows of the item being hedged.
(H) SEPARATE ACCOUNTS
The Company maintains separate account assets and liabilities 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
policyholders. Separate accounts reflect two categories of risk assumption:
non-guaranteed separate accounts, wherein the policyholder assumes the
investment risk, and guaranteed separate account assets, wherein the Company
contractually guarantees either a minimum return or account value to the
policyholder.
(I) DEFERRED POLICY ACQUISITION COSTS
Policy acquisition costs, which include commissions and certain underwriting
expenses associated with acquiring business, are deferred and amortized over the
estimated lives of the contracts, generally 20 years. Generally, acquisition
costs are deferred and amortized using the retrospective deposit method. Under
the retrospective deposit method, acquisition costs are amortized in proportion
to the present value of expected gross profits from surrender charges,
investment, mortality and expense margins. Actual gross profits can vary from
management's estimates resulting in increases or decreases in the rate of
amortization. Management periodically updates these estimates, when appropriate,
and evaluates the recoverability of the deferred acquisition cost asset. When
appropriate, management revises its assumptions on the estimated gross profits
of these contracts and the cumulative amortization
<PAGE>
- --------------------------------------------------------------------------------
for the books of business are reestimated and adjusted by a cumulative charge or
credit to income.
The Company's other expenses include the following:
<TABLE>
<CAPTION>
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Commissions........................... $ 976 $ 848 $ 619
Deferred acquisition costs............ (862) (823) (618)
Other................................. 472 402 316
--------- --------- ---------
Total other expenses.............. $ 586 $ 427 $ 317
--------- --------- ---------
--------- --------- ---------
</TABLE>
(J) DIVIDENDS TO POLICYHOLDERS
Certain life insurance policies contain dividend payment provisions that
enable the policyholder to participate in the earnings of the life insurance
subsidiaries of the Company. The participating insurance in force accounted for
55%, 44%, and 41% in 1997, 1996, and 1995, respectively, of total insurance in
force.
3. INITIAL PUBLIC OFFERING
On February 10, 1997, Hartford Life filed a registration statement, as
amended, with the Securities and Exchange Commission, relating to the IPO of
Hartford Life's Class A Common Stock. Pursuant to the IPO on May 22, 1997,
Hartford Life sold to the public 26 million shares at $28.25 per share and
received proceeds, net of offering expenses, of $687. Of the proceeds, $527 was
used to retire debt related to Hartford Life's promissory notes outstanding and
line of credit. The remaining $160 was contributed by Hartford Life to HLA to
support growth in its core businesses. The 26 million shares sold in the
Offering represent approximately 18.6% of the equity ownership in Hartford Life
and approximately 4.4% of the combined voting power of Hartford Life's Class A
and Class B Common Stock. The Hartford owns all of the 114 million outstanding
shares of Class B Common Stock of Hartford Life, representing approximately
81.4% of the equity ownership in Hartford Life and approximately 95.6% of the
combined voting power of Hartford Life's Class A and Class B Common Stock.
Holders of Class A Common Stock generally have identical rights to the holders
of Class B Common Stock except that the holders of Class A Common Stock are
entitled to one vote per share while holders of Class B Common Stock are
entitled to five votes per share on all matters submitted to a vote of Hartford
Life's stockholders.
4. INVESTMENTS AND DERIVATIVE INSTRUMENTS
(A) COMPONENTS OF NET INVESTMENT INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Interest income from fixed
maturities......................... $ 932 $ 918 $ 996
Interest income from policy loans... 425 477 342
Income from other investments....... 26 15 1
--------- --------- ---------
Gross investment income............. 1,383 1,410 1,339
Less: Investment expenses........... 15 13 11
--------- --------- ---------
Net investment income............... $ 1,368 $ 1,397 $ 1,328
--------- --------- ---------
--------- --------- ---------
</TABLE>
(B) COMPONENTS OF NET REALIZED CAPITAL GAINS (LOSSES)
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
---------------------------------
1997 1996 1995
----- --------- ---------
<S> <C> <C> <C>
Fixed maturities......................... $ (7) $ (201) $ 23
Equity securities........................ 12 2 (6)
Real estate and other.................... (1) (4) (25)
Less: Increase in liability to
policyholders for realized capital
gains................................... -- (10) (3)
--- --------- ---------
Net realized capital gains (losses) $ 4 $ (213) $ (11)
--- --------- ---------
--- --------- ---------
</TABLE>
(C) NET UNREALIZED CAPITAL GAINS (LOSSES) ON EQUITY SECURITIES
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Gross unrealized capital gains.............. $ 14 $ 13 $ 4
Gross unrealized capital losses............. -- (1) (2)
--- --- ---
Net unrealized capital gains................ 14 12 2
Deferred income tax expense................. 5 4 1
--- --- ---
Net unrealized capital gains, net of tax.... 9 8 1
Balance -- beginning of year................ 8 1 (6)
--- --- ---
Net change in unrealized capital gains
(losses) on equity securities.............. $ 1 $ 7 $ 7
--- --- ---
--- --- ---
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
(D) NET UNREALIZED CAPITAL GAINS (LOSSES) ON FIXED MATURITIES
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
---------------------
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Gross unrealized capital gains................................... $ 371 $ 386 $ 529
Gross unrealized capital losses.................................. (80) (341) (569)
Unrealized capital (gains) losses credited to policyholders...... (30) (11) (52)
----- ----- -----
Net unrealized capital gains (losses)............................ 261 34 (92)
Deferred income tax expense (benefit)............................ 91 12 (34)
----- ----- -----
Net unrealized capital gains (losses), net of tax................ 170 22 (58)
Balance -- beginning of year..................................... 22 (58) (648)
----- ----- -----
Net change in unrealized capital gains (losses) on fixed
maturities...................................................... $ 148 $ 80 $ 590
----- ----- -----
----- ----- -----
</TABLE>
(E) FIXED MATURITY INVESTMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored)...................................... $ 217 $ 3 $ (1) $ 219
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,175 64 (35) 1,204
States, municipalities and political subdivisions................ 211 7 (1) 217
International governments........................................ 376 20 (3) 393
Public utilities................................................. 871 26 (3) 894
All other corporate including international...................... 5,033 200 (25) 5,208
All other corporate -- asset backed.............................. 4,091 41 (8) 4,124
Short-term investments........................................... 1,318 -- -- 1,318
Certificates of deposit.......................................... 593 10 (4) 599
---------- ----- ----- ----------
Total fixed maturities....................................... $13,885 $371 $(80) $14,176
---------- ----- ----- ----------
---------- ----- ----- ----------
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST GAINS LOSSES FAIR VALUE
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored)...................................... $ 166 $ 12 $ (3) $ 175
U.S. gov't and gov't agencies and authorities
(guaranteed and sponsored) -- asset backed...................... 1,970 161 (128) 2,003
States, municipalities and political subdivisions................ 373 6 (11) 368
International governments........................................ 281 12 (4) 289
Public utilities................................................. 877 12 (8) 881
All other corporate including international...................... 4,656 120 (107) 4,669
All other corporate -- asset backed.............................. 3,601 49 (59) 3,591
Short-term investments........................................... 1,655 14 (21) 1,648
---------- ----- ----------- ----------
Total fixed maturities....................................... $13,579 $386 $(341) $13,624
---------- ----- ----------- ----------
---------- ----- ----------- ----------
</TABLE>
The amortized cost and estimated fair value of fixed maturity investments at
December 31, 1997 by estimated maturity year are shown below. Expected
maturities differ from contractual maturities due to call or prepayment
provisions. Asset backed securities, including MBS and CMO's, are distributed to
maturity year based on the Company's estimates of the rate of future prepayments
of principal over the remaining lives of the securities. These estimates are
developed using prepayment speeds provided in broker consensus data. Such
estimates are derived from prepayment speeds experienced at the interest rate
levels projected for the applicable underlying collateral and can be expected to
vary from actual experience.
MATURITY
<TABLE>
<CAPTION>
AMORTIZED
COST FAIR VALUE
----------- -----------
<S> <C> <C>
One year or less......................... $ 2,838 $ 2,867
Over one year through five years......... 5,528 5,595
Over five years through ten years........ 3,094 3,156
Over ten years........................... 2,425 2,558
----------- -----------
Total................................ $ 13,885 $ 14,176
----------- -----------
----------- -----------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
Sales of fixed maturities, excluding short-term fixed maturities, for the
years ended December 31, 1997, 1996 and 1995 resulted in proceeds of $4.2
billion, $3.5 billion and $4.8 billion, gross realized capital gains of $169,
$87 and $91, gross realized capital losses (including writedowns) of $176, $298
and $72, respectively. Sales of equity security investments for the years ended
December 31, 1997, 1996 and 1995 resulted in proceeds of $132, $74 and $64,
gross realized capital gains of $12, $2 and $28 and gross realized capital
losses of $0, $0 and $59, respectively.
(F) CONCENTRATION OF CREDIT RISK
Excluding investments in U.S. government and agencies, the Company has not
invested in the securities of a single issuer in amounts greater than 10% of
stockholder's equity at December 31, 1997.
(G) DERIVATIVE INSTRUMENTS
The Company utilizes a variety of derivative instruments, including swaps,
caps, floors, forwards and exchange traded futures and options, in accordance
with Company policy and in order to achieve one of three Company approved
objectives: to hedge risk arising from interest rate, price or currency exchange
rate volatility; to manage liquidity; or, to control transactions costs. The
Company utilizes derivative instruments to manage market risk through four
principal risk management strategies: hedging anticipated transactions, hedging
liability instruments, hedging invested assets and hedging portfolios of assets
and/or liabilities. The Company does not trade in these instruments for the
express purpose of earning trading profits.
The Company maintains a derivatives counterparty exposure policy which
establishes market-based credit limits, favors long-term financial stability and
creditworthiness, and typically requires credit enhancement/credit risk reducing
agreements. Credit risk is measured as the amount owed to the Company based on
current market conditions and potential payment obligations between the Company
and its counterparties. Credit exposures are quantified weekly and netted, and
collateral is pledged to or held by the Company to the extent the current value
of derivatives exceed exposure policy thresholds.
The Company's derivative program is monitored by an internal compliance unit
and is reviewed by senior management and Hartford Life's Finance Committee.
Notional amounts, which represent the basis upon which pay or receive amounts
are calculated and are not reflective of credit risk, pertaining to derivative
financial instruments (excluding the Company's guaranteed separate account
derivative investments), totaled $6.5 billion and $9.9 billion ($4.6 billion and
$7.4 billion related to the Company's investments, $1.9 billion and $2.5 billion
on the Company's liabilities) at December 31, 1997 and 1996, respectively.
The table below provides a summary of derivative instruments held by the
Company at December 31, 1997 and 1996, segregated by major investment and
liability category:
<TABLE>
<CAPTION>
1997 -- AMOUNT HEDGED (NOTIONAL AMOUNTS)
----------------------------------------------------------------------------------
PURCHASED
CAPS, FOREIGN
TOTAL ISSUED FLOORS INTEREST CURRENCY TOTAL
CARRYING CAPS & AND FUTURES RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS OPTIONS (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- -------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities (excluding
inverse floaters and
anticipatory)..................... $ 5,253 $ 500 $ 1,404 $ 28 $ 221 $-- $ 2,153
Inverse floaters (1)............... 75 47 80 -- 25 -- 152
Anticipatory (4)................... -- -- -- -- -- -- --
Other bonds and notes.............. 7,531 462 460 22 1,258 91 2,293
Short-term investments............. 1,317 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total fixed maturities......... 14,176 1,009 1,944 50 1,504 91 4,598
Equity securities, policy loans and
other investments................. 3,983 -- -- -- -- -- --
-------- -------- ---------- --- ---------- --- ----------
Total investments.............. $ 18,159 $ 1,009 $ 1,944 $ 50 $ 1,504 $91 $ 4,598
Long term debt................. -- -- -- -- -- -- --
Other policy claims............ -- 10 150 -- 1,747 -- 1,907
-------- -------- ---------- --- ---------- --- ----------
Total derivatives -- notional
value........................... $ -- $ 1,019 $ 2,094 $ 50 $ 3,251 $91 $ 6,505
-------- -------- ---------- --- ---------- --- ----------
Total derivatives -- fair value.... $ -- $ (8) $ 23 $ -- $ 19 $(6) $ 28
-------- -------- ---------- --- ---------- --- ----------
-------- -------- ---------- --- ---------- --- ----------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 --AMOUNT HEDGED (NOTIONAL AMOUNTS)
--------------------------------------------------------------------------
FOREIGN
TOTAL ISSUED PURCHASED INTEREST CURRENCY TOTAL
CARRYING CAPS & CAPS, FLOORS RATE SWAPS NOTIONAL
ASSETS HEDGED VALUE FLOORS AND OPTIONS FUTURES (2) SWAPS (3) AMOUNT
- ----------------------------------- -------- ------- ------------ ----------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Asset backed securities (excluding
inverse floaters and
anticipatory)..................... $ 5,242 $ 500 $ 2,454 $ -- $ 941 $ -- $3,895
Inverse floaters (1)............... 352 98 856 -- 346 -- 1,300
Anticipatory (4)................... -- -- -- 132 -- -- 132
Other bonds and notes.............. 7,369 425 440 5 1,079 125 2,074
Short-term investments............. 661 -- -- -- -- -- --
-------- ------- ------------ ----- --------- -------- -------
Total fixed maturities......... 13,624 1,023 3,750 137 2,366 125 7,401
Equity securities, policy loans and
other investments................. 4,011 -- -- -- 19 -- 19
-------- ------- ------------ ----- --------- -------- -------
Total investments.............. $ 17,635 $ 1,023 $ 3,750 $ 137 $ 2,385 $ 125 $7,420
Long term debt................. -- -- -- -- -- -- --
Other policy claims............ -- 10 150 -- 2,351 -- 2,511
-------- ------- ------------ ----- --------- -------- -------
Total derivatives -- notional
value......................... $ -- $ 1,033 $ 3,900 $ 137 $ 4,736 $ 125 $9,931
-------- ------- ------------ ----- --------- -------- -------
Total derivatives -- fair
value......................... $ -- $ (10) $ 38 $ -- $ 2 $ (9 ) $ 21
-------- ------- ------------ ----- --------- -------- -------
-------- ------- ------------ ----- --------- -------- -------
</TABLE>
- ---------
(1) Inverse floaters are variations of collateralized mortgage obligations
("CMO's") for which the coupon rates move inversely with an index rate such as
the London interbank offered rate ("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, the Company uses a variety of derivative instruments,
primarily interest rate swaps, caps and floors.
(2) As of December 31, 1997 and 1996, over 44% and 39% , respectively, of
the notional futures contracts expire within one year.
(3) As of December 31, 1997 and 1996, over 16% and 42%, respectively, of
foreign currency swaps expire within one year; the balance matures over the
succeeding 9 years.
(4) Deferred gains and losses on anticipatory transactions are included in
the carrying value of fixed maturities 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, 1997, the Company had $0 deferred gains and
losses. At December 31, 1996, the Company had $0.9 in net deferred gains for
futures, interest rate swaps and purchased options of which $2.0 was basis
adjusted in 1997.
The following is a reconciliation of notional amounts by derivative type and
strategy as of December 31, 1997 and 1996:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 MATURITIES/ DECEMBER 31, 1997
NOTIONAL AMOUNT ADDITIONS TERMINATIONS (1) NOTIONAL AMOUNT
----------------- -------- ----------------- -----------------
<S> <C> <C> <C> <C>
BY DERIVATIVE TYPE
Caps......................................... $1,755 $ 14 $ 530 $1,239
Floors....................................... 3,168 28 1,332 1,864
Swaps/Forwards............................... 4,861 941 2,460 3,342
Futures...................................... 137 131 218 50
Options...................................... 10 -- -- 10
------- -------- ------- -------
Total.................................... $9,931 $1,114 $4,540 $6,505
------- -------- ------- -------
BY STRATEGY
Liability.................................... $2,511 $ 191 $ 795 $1,907
Anticipatory................................. 132 4 136 --
Asset........................................ 2,112 739 1,046 1,805
Portfolio.................................... 5,176 180 2,563 2,793
------- -------- ------- -------
Total.................................... $9,931 $1,114 $4,540 $6,505
------- -------- ------- -------
------- -------- ------- -------
</TABLE>
- ---------
(1) During 1997, the Company had no significant gains or losses on terminations
of hedge positions using derivative financial instruments.
<PAGE>
- --------------------------------------------------------------------------------
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107 "Disclosure about Fair
Value of Financial Instruments" requires disclosure of fair value information of
financial instruments. For certain financial instruments where quoted market
prices are not available, other independent valuation techniques and assumptions
are used. Because considerable judgment is used, these estimates are not
necessarily indicative of amounts that could be realized in a current market
exchange. SFAS No. 107 excludes certain financial instruments from disclosure,
including insurance contracts.
For cash, short-term investments, accounts receivable, policy loans,
mortgage loans and other liabilities, carrying amounts on the Consolidated
Balance Sheets approximate fair value.
Fair value for fixed maturities and marketable equity securities are based
upon quoted market prices. Fair value for securities that are not publicly
traded are analytically determined. These amounts are disclosed in Note 4 of
Notes to Consolidated Financial Statements.
The fair value of derivative financial instruments, including swaps, caps,
floors, futures, options and forward commitments, is determined using a pricing
model which is validated through quarterly comparison to dealer quoted prices.
Amounts are disclosed in Note 4 of Notes to Consolidated Financial Statements.
Fair value for partnerships and trusts are based on external market
valuations from partnership and trust management.
Other policy claims and benefits payable fair value information is
determined by estimating future cash flows, discounted at the current market
rate.
The carrying amount and fair values of the Company's financial instruments
at December 31, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
--------- ------- --------- -------
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities..................................... $ 14,176 $14,176 $ 13,624 $13,624
Equity securities.................................... 180 180 119 119
Policy loans......................................... 3,756 3,756 3,836 3,836
Mortgage loans....................................... -- -- 2 2
Investments in partnerships, trusts and other........ 47 91 54 104
LIABILITIES
Other policy benefits................................ $ 11,769 $11,755 $ 11,707 $11,469
</TABLE>
6. SEPARATE ACCOUNTS
The Company maintained separate account assets and liabilities totaling
$69.1 billion and $49.7 billion at December 31, 1997 and 1996, respectively,
which are reported at fair value. Separate account assets are segregated from
other investments and net investment income and net realized capital gains and
losses accrue directly to the policyholder. Separate accounts reflect two
categories of risk assumption: non-guaranteed separate accounts totaling $58.6
billion and $39.4 billion at December 31, 1997 and 1996, respectively, wherein
the policyholder assumes the investment risk, and guaranteed separate accounts
totaling $10.5 and $10.3 billion at December 31, 1997 and 1996, respectively,
wherein the Company contractually guarantees either a minimum return or account
value to the policyholder. Included in the non-guaranteed category were policy
loans totaling $1.9 billion and $2.0 billion at December 31, 1997 and 1996,
respectively. Net investment income (including net realized capital 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 were $699, $538 and $387 in 1997, 1996 and
1995, respectively. The guaranteed separate accounts include fixed market value
adjusted individual annuity and modified guaranteed life insurance. The average
credited interest rate on these contracts was 6.52% at December 31, 1997. The
assets that support these liabilities were comprised of $10.2 billion in fixed
maturities as of December 31, 1997. The portfolios are segregated from other
investments and are managed to minimize liquidity and interest rate risk. In
order to minimize the risk of disintermediation associated with early
withdrawals, fixed MVA 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 $119 in
carrying value and $3.0 billion in notional amounts as of December 31, 1997.
<PAGE>
- --------------------------------------------------------------------------------
7. INCOME TAX
Hartford Life and The Hartford have entered into a tax sharing agreement
under which each member in the consolidated U.S. Federal income tax return will
make payments between them such that, with respect to any period, the amount of
taxes to be paid by the Company, subject to certain adjustments, generally will
be determined as though the Company were filing separate Federal, state and
local income tax returns.
As long as The Hartford continues to beneficially own, directly or
indirectly, at least 80% of the combined voting power and 80% of the value of
the outstanding capital stock of Hartford Life, the Company will be included for
Federal income tax purposes in the affiliated group of which The Hartford is the
common parent. To the extent allowed by law, it is the intention of The Hartford
and its subsidiaries to continue to file a single consolidated Federal income
tax return. The Company will continue to remit (receive from) The Hartford a
current income tax provision (benefit) computed in accordance with such tax
sharing agreement. The Company's effective tax rate was 36%, 35% and 32% in
1997, 1996 and 1995, respectively.
Income tax expense is as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------
1997 1996 1995
---- ------ ------
<S> <C> <C> <C>
Current...................................... $119 $ 122 $ 211
Deferred..................................... 48 (102) (149)
---- ------ ------
Income tax expense......................... $167 $ 20 $ 62
---- ------ ------
---- ------ ------
</TABLE>
A reconciliation of the tax provision at the U.S. Federal statutory rate to
the provision for income taxes is as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1997 1996 1995
--------- ----- -----
<S> <C> <C> <C>
Tax provision at the U.S. Federal statutory
rate...................................... $ 164 $ 20 $ 67
Tax-exempt income.......................... -- -- (3)
Foreign tax credit......................... -- -- (4)
Other...................................... 3 -- 2
--------- --- ---
Total.................................... $ 167 $ 20 $ 62
--------- --- ---
--------- --- ---
</TABLE>
Deferred tax assets include the following at December 31:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
<S> <C> <C>
Tax return deferred acquisition costs............ $ 639 $ 514
Financial statement deferred acquisition costs
and reserves.................................... (366) (242)
Employee benefits................................ 5 8
Net unrealized capital gains on securities....... (96) (16)
Investments and other............................ 166 210
--------- ---------
Total.......................................... $ 348 $ 474
--------- ---------
--------- ---------
</TABLE>
Income taxes paid were $9, $189 and $162 in 1997, 1996 and 1995,
respectively. The Company had a current tax payment of $27 due to The Hartford
at December 31, 1997 and a tax refund due from The Hartford of $72 at December
31, 1996.
Prior to the Tax Reform Act of 1984, the Life Insurance Company Income Tax
Act of 1959 permitted the deferral from taxation of a portion of statutory
income under certain circumstances. In these situations, the deferred income was
accumulated 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,
1997 was $37.
8. POSTRETIREMENT BENEFIT AND SAVINGS PLANS
(A) PENSION PLANS
The Company's employees are included in The Hartford'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. The Company's funding policy is to contribute annually an
amount between the minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974, as amended, and the maximum amount that
can be deducted for U.S. Federal income tax purposes. Generally, pension costs
are funded through the purchase of the Company's group pension contracts. The
cost to the Company was approximately $5, $5 and $2 in 1997, 1996 and 1995,
respectively.
The Company also provides, through The Hartford, certain health care and
life insurance benefits for eligible retired employees. A substantial portion of
the Company's employees may become eligible for these benefits upon retirement.
The Company'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. The Company 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 The
Hartford, was immaterial to the results of operations for 1997, 1996 and 1995,
respectively.
The assumed rate in the per capita cost of health care (the health care
trend rate) was 8.5% for 1997, 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,
<PAGE>
- --------------------------------------------------------------------------------
the effect will be amortized over the average future service of covered
employees.
(B) INVESTMENT AND SAVINGS PLAN
Substantially all employees of the Company are eligible to participate in The
Hartford's Investment and Savings Plan. Under this plan, designated
contributions, which may be invested in Class A Common Stock of Hartford Life or
certain other investments, are matched, up to 3% of compensation, by the
Company. The cost to the Company for the above-mentioned plans was approximately
$2 in 1997.
9. STOCK COMPENSATION PLANS
During the second quarter of 1997, Hartford Life adopted the 1997 HLI
Incentive Stock Plan (the "Plan"). Under the Plan, options granted may be either
non-qualified options or incentive stock options qualifying under Section 422A
of the Internal Revenue Code. The aggregate number of shares of Class A Common
Stock which may be awarded in any one year shall be subject to an annual limit.
The maximum number of shares of Class A Common Stock which may be granted under
the Plan in each year shall be 1.5% of the total issued and outstanding shares
of Hartford Life Class A Common Stock and treasury stock as reported in the
Annual Report on Hartford Life's Form 10-K for the preceding year plus unused
portions of such limit from prior years. In addition, no more than 5,000,000
shares of Class A Common Stock shall be cumulatively available for awards of
incentive stock options under the Plan, and no more than 20% of the total number
of shares on a cumulative basis shall be available for restricted stock and
performance shares.
All options granted have an exercise price equal to the market price of
Hartford Life's stock on the date of grant and an option's maximum term is ten
years. Certain nonperformance based options become exercisable upon the
attainment of specified market price appreciation of Hartford Life's common
shares or at seven years after the date of grant, while the remaining
nonperformance based options become exercisable over a three year period
commencing with the date of grant.
Also included in the Plan are long term performance awards which become
payable upon the attainment of specific performance goals achieved over a three
year period.
During the second quarter of 1997, Hartford Life established the HLI
Employee Stock Purchase Plan ("ESPP"). Under this plan, eligible employees of
Hartford Life and the Company may purchase Class A Common Stock of Hartford Life
at a 15% discount from the lower of the market price at the beginning or end of
the quarterly offering period. Hartford Life may sell up to 2,700,000 shares of
stock to eligible employees. Hartford Life sold 54,316 shares under the ESPP in
1997.
10. REINSURANCE
The Company cedes insurance to other insurers, including its parent HLA, in
order to limit its maximum loss. Such transfer does not relieve the Company of
its primary liability. The Company also assumes insurance from other insurers.
Failure of reinsurers to honor their obligations could result in losses to the
Company. The Company evaluates the financial condition of its reinsurers and
monitors concentration of credit risk.
Net premiums and other considerations were comprised of the following:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Gross premiums............................... $ 2,164 $ 2,138 $ 1,545
Assumed...................................... 159 190 591
Ceded........................................ (686) (623) (649)
--------- --------- ---------
Net premiums and other considerations...... $ 1,637 $ 1,705 $ 1,487
--------- --------- ---------
--------- --------- ---------
</TABLE>
The Company ceded approximately $76, $100 and $101 of group life premium in
1997, 1996 and 1995, respectively, representing $33.6 billion, $33.3 billion and
$32.3 billion of insurance in force, respectively. The Company ceded $339, $318
and $320 of accident and health premium to HLA in 1997, 1996 and 1995,
respectively. The Company assumed $89, $101 and $103 of premium in 1997, 1996
and 1995, respectively, representing $8.2 billion, $8.5 billion and $8.5 billion
of individual life insurance in force, respectively, from HLA.
Life reinsurance recoveries, which reduce death and other benefits,
approximated $158, $140 and $220 for the years ended December 31, 1997, 1996 and
1995, respectively.
As of December 31, 1997, the Company had reinsurance recoverables of $5.0
billion from Mutual Benefit Life Assurance Corporation ("Mutual Benefit"),
supported by assets in a security trust of $5.0 billion (including policy loans
and accrued interest of $4.5 billion). 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 the Company as sole beneficiary. The
Company has no other significant reinsurance-related concentrations of credit
risk.
11. RELATED PARTY TRANSACTIONS
Transactions of the Company with HA&I and its affiliates relate principally
to tax settlements, reinsurance, insurance coverage, rental and service fees,
payment of dividends and capital contributions. In addition, certain affiliated
insurance companies purchased group annuity contracts from the Company to fund
pension costs and claim annuities to settle casualty claims. Substantially all
general insurance expenses related to the Company, including rent and employee
benefit plan expenses, are initially paid by The Hartford. Direct expenses are
allocated to the Company using specific identification, and indirect expenses
are allocated using other applicable methods. Indirect expenses include those
for corporate areas which,
<PAGE>
- --------------------------------------------------------------------------------
depending on type, are allocated based on either a percentage of direct expenses
or on utilization. Indirect expenses allocated to the Company by The Hartford
were $34, $40, and $45 in 1997, 1996 and 1995, respectively. Management believes
that the methods used are reasonable.
The rent paid to Hartford Fire for space occupied by the Company was $7 in
1997, and $3 in 1996 and 1995. The Company expects to pay annual rent of $7 in
1998 and 1999, respectively, $12 in 2000 and 2001, respectively, $13 in 2002 and
$87 thereafter, over the remaining term of the sublease, which expires on
December 31, 2009. Rental expense is recognized over a level basis over the term
of the sublease and amounted to approximately $9 in 1997 and $8 in 1996 and
1995.
12. STATUTORY RESULTS
The domestic insurance subsidiaries of Hartford Life prepare their statutory
financial statements in accordance with accounting practices prescribed by the
State of Connecticut Insurance Department. Prescribed statutory accounting
practices include publications of the National Association of Insurance
Commissioners ("NAIC"), as well as state laws, regulations, and general
administrative rules.
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
--------------------------
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Statutory net income......................... $ 214 $ 144 $ 112
------ ------ ------
Statutory surplus............................ $1,441 $1,207 $1,125
------ ------ ------
------ ------ ------
</TABLE>
A significant percentage of the consolidated statutory surplus is
permanently reinvested or is subject to various state regulatory restrictions
which limit the payment of dividends without prior approval. The total amount of
statutory dividends which may be paid by the insurance subsidiaries of the
Company in 1998 is estimated to be $144.
13. COMMITMENTS AND CONTINGENT LIABILITIES
(A) LITIGATION
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, management, at the present
time, does not anticipate that the ultimate liability arising from such pending
or threatened litigation will have a material effect on the financial condition
or operating results of the Company.
(B) GUARANTY FUNDS
Under insurance guaranty fund laws in each state, the District of Columbia
and Puerto Rico, insurers licensed to do business can be assessed by state
insurance guaranty associations for certain obligations of insolvent insurance
companies to policyholders and claimants. Recent regulatory actions against
certain large life insurers encountering financial difficulty have prompted
various state insurance guaranty associations to begin assessing life insurance
companies for the deemed losses. Most of these laws do provide, however, that an
assessment may be excused or deferred if it would threaten an insurer's solvency
and further provide annual limits on such assessments. A large part of the
assessments paid by the Company's insurance subsidiaries pursuant to these laws
may be used as credits for a portion of the Company's insurance subsidiaries'
premium taxes. The Company paid guaranty fund assessments of approximately $15,
$11 and $10 in 1997, 1996 and 1995, respectively, of which $4, $5, and $6 were
estimated to be creditable against premium taxes.
14. BUSINESS SEGMENT INFORMATION
The Company, along with its parent, sells financial products such as fixed
and variable annuities, retirement plan services, and life and disability
insurance on both an individual and a group basis. The Company divides its core
businesses into three segments: Annuity, Individual Life Insurance, and Employee
Benefits. The Company also maintains a Guaranteed Investment Contracts segment,
which is primarily comprised of guaranteed rate contract business written prior
to 1995 and a Corporate Operation. The Annuity segment offers individual
variable annuities and fixed market value adjusted annuities, deferred
compensation and retirement plan services, mutual funds, investment management
services and other financial products. The Individual Life Insurance segment
sells a variety of individual life insurance products, including variable life,
universal life, interest-sensitive whole life, and term life policies. The
Employee Benefits segment sells group insurance products, including group life,
group short and long-term disability and corporate owned life insurance, and
engages in certain international operations. The Guaranteed Investment Contracts
segment sells a limited amount of guaranteed investment contracts and contains
Closed Book GRC. Through its Corporate Operation, the Company reports items that
are not directly allocable to any of its business segments. Included in the
Corporate Operation are unallocated income and expense and certain other items
not directly allocable to any segment. Net realized capital gains and losses are
recognized in the period of realization, but are allocated to the segments
utilizing durations of the segment portfolios.
<PAGE>
- --------------------------------------------------------------------------------
The following table outlines revenues, operating income and assets by
business segment:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
REVENUES
Annuity.............................................. $ 1,269 $ 968 $ 759
Individual Life Insurance............................ 487 440 383
Employee Benefits.................................... 972 1,366 1,273
Guaranteed Investment Contracts...................... 241 34 337
Corporate Operation.................................. 40 81 52
-------- -------- --------
Total revenues..................................... $ 3,009 $ 2,889 $ 2,804
-------- -------- --------
-------- -------- --------
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
Annuity.............................................. $ 317 $ 226 $ 171
Individual Life Insurance............................ 85 68 56
Employee Benefits.................................... 53 44 37
Guaranteed Investment Contracts...................... -- (346) (103)
Corporate Operation.................................. 14 66 30
-------- -------- --------
Total income before income tax expense............. $ 469 $ 58 $ 191
-------- -------- --------
-------- -------- --------
ASSETS
Annuity $ 69,152 $ 52,877 $ 39,732
Individual Life Insurance............................ 4,918 3,753 3,173
Employee Benefits.................................... 18,196 14,708 13,494
Guaranteed Investment Contracts...................... 3,347 4,533 6,069
Corporate Operation.................................. 2,343 1,891 1,729
-------- -------- --------
Total assets....................................... $ 97,956 $ 77,762 $ 64,197
-------- -------- --------
-------- -------- --------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE I -- SUMMARY OF INVESTMENTS OTHER THAN INVESTMENTS IN AFFILIATES
AS OF DECEMBER 31, 1997
(IN MILLIONS)
<TABLE>
<CAPTION>
AMOUNT AT
WHICH
FAIR SHOWN ON
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- --------------------------------------------- ------- ------- --------------
<S> <C> <C> <C>
Fixed Maturities
Bonds and Notes
U. S. gov't and gov't agencies and
authorities (guaranteed and sponsored) $ 217 $ 219 $ 219
U. S. gov't and gov't agencies and
authorities (guaranteed and sponsored) --
asset-backed.............................. 1,175 1,204 1,204
States, municipalities and political
subdivisions.............................. 211 217 217
International governments.................. 376 393 393
Public utilities........................... 871 894 894
All other corporate including
international............................. 5,033 5,208 5,208
All other corporate -- asset-backed........ 4,091 4,124 4,124
Short-term investments..................... 1,318 1,318 1,318
Certificates of deposit...................... 593 599 599
------- ------- -------
Total fixed maturities....................... 13,885 14,176 14,176
------- ------- -------
Equity Securities
Common Stocks
Public utilities........................... -- -- --
Banks, trusts and insurance companies...... -- -- --
Industrial and miscellaneous............... 166 180 180
Nonredeemable preferred stocks............. -- -- --
------- ------- -------
Total equity securities...................... 166 180 180
------- ------- -------
Total fixed maturities and equity
securities.................................. 14,051 14,356 14,356
------- ------- -------
Real Estate.................................. -- -- --
Other Investments
Mortgage loans on real estate.............. -- -- --
Policy loans............................... 3,756 3,756 3,756
Investments in partnerships, trusts and
other..................................... 47 91 47
------- ------- -------
Total other investments...................... 3,803 3,847 3,803
------- ------- -------
Total investments............................ $17,854 $18,203 $18,159
------- ------- -------
------- ------- -------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(IN MILLIONS)
<TABLE>
<CAPTION>
FUTURE
POLICY
BENEFITS,
UNPAID OTHER
DEFERRED CLAIMS POLICY
POLICY AND CLAIM CLAIMS AND PREMIUMS NET
ACQUISITION ADJUSTMENT BENEFITS AND OTHER INVESTMENT
SEGMENT COSTS EXPENSES PAYABLE CONSIDERATIONS INCOME
- --------------------------------------------- ----------- --------- ---------- --------------- ---------
<S> <C> <C> <C> <C> <C>
1997
Annuity...................................... $2,478 $2,070 $ 6,838 $ 769 $ 500
Individual Life Insurance.................... 837 392 2,182 323 164
Employee Benefits............................ -- 780 9,232 541 431
Guaranteed Investment Contracts.............. -- -- 2,782 2 239
Corporate Operation.......................... -- 28 -- 2 34
----------- --------- ---------- ------ ---------
Consolidated operations...................... $3,315 $3,270 $21,034 $1,637 $1,368
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------
1996
Annuity...................................... $2,030 $1,526 $ 6,016 $ 535 $ 433
Individual Life Insurance.................... 730 346 2,160 287 153
Employee Benefits............................ -- 574 9,834 881 485
Guaranteed Investment Contracts.............. -- -- 4,124 2 251
Corporate Operation.......................... -- 28 -- -- 75
----------- --------- ---------- ------ ---------
Consolidated operations...................... $2,760 $2,474 $22,134 $1,705 $1,397
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------
1995
Annuity...................................... $1,561 $1,314 $ 5,661 $ 319 $ 400
Individual Life Insurance.................... 615 706 1,932 246 137
Employee Benefits............................ 12 325 9,285 922 351
Guaranteed Investment Contracts.............. -- 28 5,720 -- 377
Corporate Operation.......................... -- -- -- -- 63
----------- --------- ---------- ------ ---------
Consolidated operations...................... $2,188 $2,373 $22,598 $1,487 $1,328
----------- --------- ---------- ------ ---------
----------- --------- ---------- ------ ---------
<CAPTION>
NET BENEFITS, AMORTIZATION
REALIZED CLAIMS AND OF DEFERRED
CAPITAL CLAIM POLICY
GAINS ADJUSTMENT ACQUISITION DIVIDENDS TO OTHER
SEGMENT (LOSSES) EXPENSES COSTS POLICYHOLDERS EXPENSES
- --------------------------------------------- ----------- ----------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
1997
Annuity...................................... $ -- $ 445 $250 $ -- $ 257
Individual Life Insurance.................... -- 242 83 -- 77
Employee Benefits............................ -- 425 2 240 252
Guaranteed Investment Contracts.............. -- 232 -- -- 9
Corporate Operation.......................... 4 35 -- -- (9)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ 4 $1,379 $335 $240 $ 586
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1996
Annuity...................................... $ -- $ 412 $174 $ -- $ 156
Individual Life Insurance.................... -- 245 59 -- 68
Employee Benefits............................ -- 546 -- 635 141
Guaranteed Investment Contracts.............. (219) 332 1 -- 47
Corporate Operation.......................... 6 -- -- -- 15
----------- ----------- ----- ----- -----
Consolidated operations...................... $(213) $1,535 $234 $635 $ 427
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
1995
Annuity...................................... $ -- $ 317 $117 $ -- $ 114
Individual Life Insurance.................... -- 203 70 -- 54
Employee Benefits............................ -- 424 -- 675 137
Guaranteed Investment Contracts.............. -- 453 12 -- 15
Corporate Operation.......................... (11) 25 -- -- (3)
----------- ----------- ----- ----- -----
Consolidated operations...................... $ (11) $1,422 $199 $675 $ 317
----------- ----------- ----- ----- -----
----------- ----------- ----- ----- -----
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE IV -- REINSURANCE
(IN MILLIONS)
<TABLE>
<CAPTION>
CEDED TO ASSUMED FROM PERCENTAGE
GROSS OTHER OTHER NET OF AMOUNT
AMOUNT COMPANIES COMPANIES AMOUNT ASSUMED TO NET
-------- -------------- -------------- -------- ---------------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1997
Life insurance in force........................... $245,487 $ 178,771 $ 33,156 $ 99,872 33.2%
Insurance revenues
Life insurance and annuities.................... 1,818 340 157 1,635 9.6%
Accident and health insurance................... 346 346 2 2 100.0%
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Total insurance revenues.......................... $ 2,164 $ 686 $ 159 $ 1,637 9.7%
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For the year ended December 31, 1996
Life insurance in force......................... $177,094 $ 106,146 $ 31,957 $102,905 31.1%
Insurance revenues
Life insurance and annuities.................... 1,801 298 169 1,672 10.1%
Accident and health insurance................... 337 325 21 33 63.6%
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Total insurance revenues.......................... $ 2,138 $ 623 $ 190 $ 1,705 11.1%
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For the year ended December 31, 1995
Life insurance in force......................... $182,716 $ 112,774 $ 26,996 $ 96,938 27.8%
Insurance revenues
Life insurance and annuities.................... 1,232 325 574 1,481 38.8%
Accident and health insurance................... 313 324 17 6 283.3%
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Total insurance revenues.......................... $ 1,545 $ 649 $ 591 $ 1,487 39.7%
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