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[NEW ENGLAND FINANCIAL LOGO APPEARS HERE]
American Growth Series
Individual Variable Annuity Contracts
Offered by New England Life Insurance Company
501 Boylston Street, Boston, Massachusetts 02116-3700
Profile
August 3, 1998
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NEW ENGLAND LIFE INSURANCE COMPANY
INDIVIDUAL VARIABLE ANNUITY CONTRACT PROFILE
AMERICAN GROWTH SERIES
August 3, 1998
THIS PROFILE IS A SUMMARY OF SOME OF THE MORE IMPORTANT POINTS THAT YOU
SHOULD KNOW AND CONSIDER BEFORE PURCHASING THE CONTRACT. THE CONTRACT IS MORE
FULLY DESCRIBED IN THE PROSPECTUS WHICH ACCOMPANIES THIS PROFILE. PLEASE READ
THE PROSPECTUS CAREFULLY.
"We," "us," and "our" refer to New England Life Insurance Company. "You" and
"your" refer to the owner of a Contract.
1. WHAT IS THE CONTRACT? The Contract is an individual variable annuity
contract that provides you with a means of investing on a tax-deferred basis
through the New England Variable Annuity Separate Account (the "Variable
Account") in one or more of eleven series of the New England Zenith Fund (the
"Funds"). The Contract is intended for use with certain retirement plans that
qualify for tax benefited treatment under the Internal Revenue Code (the
"Code"), for individual use, and for use with plans and trusts not qualifying
under the Code for tax benefited treatment. The Company may make the Contracts
available for use with Section 401(k) plans. The Contract is not currently
intended for use with Section 403(b) plans subject to ERISA. It provides a
death benefit and annuity payment options, some of which provide guaranteed
income or guaranteed payment periods.
The Funds offer a range of investment objectives, from conservative to
aggressive. Your investment in the Funds is NOT guaranteed and you could lose
some or all of any money you allocate to the Funds.
An option is available in some states under which you may allocate all or
part of the value of your Contract to what we call the "Fixed Account." We
guarantee interest on amounts allocated to the Fixed Account at an effective
annual rate of at least 3%. We may credit a higher rate of interest. The Fixed
Account option offers you an opportunity to protect your principal and earn a
guaranteed rate of interest.
The Contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the annuity phase. During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as income when you
make a withdrawal. The annuity phase begins when you begin receiving payments
under one of the annuity payment options described in Section 2. The amount of
money accumulated under your Contract during the accumulation phase will
determine the amount of your annuity payments during the annuity phase.
2. WHAT ARE MY ANNUITY OPTIONS? The Contract offers the following annuity
payment options, either in a fixed or variable form:
. Income for a specified number of years;
. Income for life;
. Income for life, but guaranteed for at least 10 years (this is your
default option);
. Income for life, but guaranteed for at least 20 years;
. Income to age 100;
. Income for two lives, while either is still living;
. Income for two lives, but guaranteed for at least 10 years; and
. Income for two lives, with full payments while both are living and two-
thirds to the survivor.
We may make other annuity payment options available from time to time. The
Contract, when issued, will provide for the third option in variable form,
beginning at age 95 (or the maximum age permitted by state law). During the
accumulation phase, you may select another option, and/or start annuity
payments (that is, annuitize) at an earlier date by surrendering the Contract.
If annuity payments start less than 7 years after you make an investment in
the Contract, charges may apply.
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3. HOW DO I PURCHASE A CONTRACT? The minimum initial investment is currently
$5,000, and any subsequent investments must be at least $250, with certain
exceptions described in the prospectus. We reserve the right not to accept any
purchase payment that, when combined with the value of all the Contracts that
you own, would exceed $1,000,000. Currently, we won't accept any investment
that, when combined with the value of all the Contracts you own, would exceed
$5,000,000.
You are eligible to purchase a Contract if you are an individual, employer,
trust, corporation, partnership, custodian, or any entity specified in an
eligible employee benefit plan. A Contract may have joint owners. The Contract
is intended for use with the following retirement plans which offer Federal
tax benefits under the Internal Revenue Code (the "Code"):
Qualified Plans--plans qualified under Section 401(a) or 403(a) of the
Code.
TSA Plans--certain annuity plans under Section 403(b) of the Code.
IRAs--individual retirement accounts under Section 408(a) of the Code and
individual retirement annuities under Section 408(b) of the Code.
Roth IRAs--Roth individual retirement accounts under Section 408A of the
Code.
SEPs and SARSEPs--simplified employee pension plans and salary reduction
simplified employee pension plans under Section 408(k) of the Code.
SIMPLE IRAs--simple retirement accounts under Section 408(p) of the Code.
457 Plans--eligible deferred compensation plans under Section 457 of the
Code.
Governmental Plans--governmental plans within the meaning of Section 414(d)
of the Code.
The Contract may not yet be available to all of the foregoing plans, pending
appropriate state approvals. You should consult a qualified advisor about
using the Contract with those plans. The Company may make the Contract
available for use with Section 401(k) plans. The Contract is not currently
available for use with other plans, including TSA plans subject to the
Employee Retirement Income Security Act of 1974.
4. WHAT ARE MY INVESTMENT OPTIONS UNDER THE CONTRACT? You can allocate your
investment among subaccounts of the Variable Account, which in turn invest in
the Funds. Your investment can be allocated to any one or a combination
(within limits) of the Funds. The Funds currently available under the Contract
are:
Loomis Sayles Small Cap Series Loomis Sayles Balanced Series
Morgan Stanley International Magnum Salomon Brothers Strategic Bond
Equity Series Opportunities Series
Alger Equity Growth Series Back Bay Advisors Bond Income Series
Goldman Sachs Midcap Value Series Salomon Brothers U.S. Government
Davis Venture Value Series Series
Westpeak Growth and Income Series Back Bay Advisors Money Market Series
In addition, the Fixed Account is available in some states.
5. WHAT ARE THE EXPENSES UNDER THE CONTRACT?
Administration Charges. To cover the costs of the administrative services
that we provide for the Contracts, we impose a daily charge at an annual rate
of .10% of the daily net assets attributable to your Contract. We also impose
an "administration contract charge" each year generally equal to the lesser of
2% of your total contract value or $30 to help cover the costs of the
administrative services that we provide for the Contracts. We waive this
charge in certain circumstances.
Mortality and Expense Risk Charge. As compensation for assuming mortality
and expense risks under the Contract, we impose a daily charge at an annual
rate of 1.30% of the daily net assets attributable to your Contract. This
charge, as a percentage of your contract value, is guaranteed not to increase
over the life of your Contract.
Contingent Deferred Sales Charge. We do not impose any sales charge on
investments when they are made, nor do we impose a contingent deferred sales
charge ("CDSC") on withdrawals up to a certain amount each year (the "free
withdrawal amount"). We do, however, impose a CDSC upon the occurrence of a
"CDSC event," one of which is a withdrawal or surrender (including a surrender
to start annuity payments) in excess of the free withdrawal amount. All of the
CDSC events are described in the Prospectus.
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The CDSC is deducted only from the investments that we received from you
within seven years of the CDSC event according to the following schedule:
<TABLE>
<CAPTION>
NUMBER OF YEARS SINCE WE APPLICABLE
RECEIVED THE INVESTMENT CDSC CHARGE
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<S> <C>
1..................... 7%
2..................... 6%
3..................... 5%
4..................... 4%
5..................... 3%
6..................... 2%
7..................... 1%
Thereafter.............. 0%
</TABLE>
We will waive the CDSC in certain circumstances.
Premium Tax Charges. Certain states impose a premium tax on annuity purchase
payments received by insurance companies. Generally, we incur a state premium
tax liability on the date when annuity benefits commence. In those states, we
deduct the premium tax charge from the contract value on that date. However,
for Contracts subject to the premium tax law of states which impose a premium
tax on purchase payments when they are made (currently South Dakota), we
deduct the applicable premium tax charge at the earliest of: a full or partial
surrender of the Contract, the date when annuity benefits commence, or payment
of the death proceeds (including application of the death proceeds to the
beneficiary continuation provision) upon your death. Deductions for state
premium tax charges currently range from 1/2% to 2.25% of the contract value
(or, if applicable, purchase payments or death proceeds) for Contracts used
with retirement plans qualifying for tax benefited treatment and from 1% to 3
1/2% of the contract value (or, if applicable, death proceeds) for all other
Contracts.
Other Expenses. In addition to our charges under the Contract, each Fund
deducts amounts from its assets to pay for its advisory fees and other
expenses.
The following chart is designed to help you understand the charges in the
Contract. The column "Total Annual Charges" shows the total of the
administration contract charge (which is represented as .06%), the .10%
administration asset charge, the 1.30% mortality and expense risk charge, and
the investment charges for each Fund for the year ended December 31, 1997 (as
a percentage of average net assets after giving effect to any current expense
cap or expense deferral). Charges and expenses represent anticipated amounts
for the Midcap Value Series based on the management fee approved by
shareholders of the Series that became effective on May 1, 1998, and other
expenses actually incurred for the Series for 1997. The next two columns show
the dollar amount of charges you would pay assuming that you invested $1,000
in a Contract which earns 5% annually and further assuming that you surrender
your Contract or that you elect to annuitize under a period certain option for
a specified period of less than 15 years: (1) at the end of one year, and (2)
at the end of ten years. In the first example, a CDSC will be charged because
you would be surrendering or annuitizing the Contract within seven years of
making the investment. In the second example, there would be no CDSC. We are
also assuming that no premium taxes have been assessed in either example. For
more detailed information, see the Fee Table in the Prospectus for the
Contract.
<TABLE>
<CAPTION>
TOTAL TOTAL ANNUAL EXAMPLES OF TOTAL EXPENSES
ANNUAL FUND CHARGES TOTAL PAID AT THE END OF:
INSURANCE FOR YEAR ANNUAL ---------------------------
FUND CHARGES ENDED 12/31/97 CHARGES ONE YEAR TEN YEARS
- ---- --------- -------------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Small Cap............... 1.46% 1.00% 2.46% $ 89.61 $ 278.19
International Magnum Eq-
uity................... 1.46% 1.30% 2.76% 92.38 307.31
Equity Growth........... 1.46% .87% 2.33% 88.40 265.27
Midcap Value............ 1.46% .90% 2.36% 88.68 268.26
Venture Value........... 1.46% .90% 2.36% 88.68 268.26
Growth and Income....... 1.46% .82% 2.28% 87.93 260.25
Balanced................ 1.46% .85% 2.31% 88.21 263.26
Strategic Bond Opportu-
nities................. 1.46% .85% 2.31% 88.21 263.26
Bond Income............. 1.46% .52% 1.98% 85.14 229.56
U.S. Government......... 1.46% .70% 2.16% 86.81 248.09
Money Market............ 1.46% .45% 1.91% 84.48 222.25
</TABLE>
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6. HOW WILL MY INVESTMENT IN THE CONTRACT BE TAXED? You should consult a
qualified tax advisor with regard to your Contract. Generally, taxation of
earnings under variable annuities is deferred until amounts are withdrawn or
distributions are made. The deferral of taxes on earnings under variable
annuities is designed to encourage long-term personal savings and supplemental
retirement plans. Certain penalties may apply if amounts are withdrawn
prematurely. The taxable portion of a withdrawal or distribution is taxed as
ordinary income.
Special rules apply to the owner of a Contract that is not a natural person.
Generally, such an owner must include in income any increase in the excess of
the contract value over the "investment in the contract" during the taxable
year.
7. DO I HAVE ACCESS TO MY MONEY? You have access to your money during the
accumulation phase by surrendering your Contract or withdrawing part of the
value of your Contract at any time. Under Contracts issued under certain tax
benefited retirement plans, you may also take a loan against its value. If you
are making a withdrawal, we require that you withdraw at least $100 and that
the value of your Contract after the withdrawal be at least $1,000.
While you have access to your money during the accumulation phase, certain
charges, such as the administration contract charge, CDSC, and premium tax
charges, may be deducted on a surrender or withdrawal. Moreover, a withdrawal
or surrender may cause you to incur income taxes or penalties under the
Federal tax laws.
After annuitization, under certain annuity options, you may withdraw the
commuted value of the remaining payments.
8. HOW HAVE THE FUNDS PERFORMED? The following chart shows the total returns
for each Fund for each of the last 10 years (or less if the Fund began less
than 10 years ago), based on a $1,000 purchase payment. The total returns are
adjusted to reflect all Contract expenses and deductions described above
except the CDSC and premium tax charges. If applied, these charges would
reduce the performance figures in the chart. Please remember that past
performance is not a guarantee of future results.
<TABLE>
<CAPTION>
FUND 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ---- ----- ----- ------ ----- ----- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Small Cap............... 21.20 % 26.44 % 24.06% N/A N/A N/A N/A N/A N/A N/A
International Magnum Eq-
uity................... (5.56)% 2.23 % 1.76% N/A N/A N/A N/A N/A N/A N/A
Equity Growth........... 21.98 % 9.50 % 43.64% N/A N/A N/A N/A N/A N/A N/A
Midcap Value............ 13.48 % 13.45 % 25.40% (4.65)% N/A N/A N/A N/A N/A N/A
Venture Value........... 29.81 % 21.85 % 34.35% N/A N/A N/A N/A N/A N/A N/A
Growth and Income....... 29.50 % 14.02 % 31.40% (5.58)% N/A N/A N/A N/A N/A N/A
Balanced................ 12.35 % 12.78 % 20.06% N/A N/A N/A N/A N/A N/A N/A
Strategic Bond Opportu-
nities................. 7.16 % 10.14 % 14.73% N/A N/A N/A N/A N/A N/A N/A
Bond Income............. 7.71 % 1.49 % 17.57% (6.53)% 9.06 % 4.59 % 13.95% 4.11% 8.08% 4.09%
U.S. Government......... 4.22 % (0.85)% 10.43% N/A N/A N/A N/A N/A N/A N/A
Money Market............ 1.42 % 1.18 % 1.71% 0.01 % (0.96)% (0.14)% 2.19% 4.03% 4.96% 3.15%
</TABLE>
9. DOES THE CONTRACT HAVE A DEATH BENEFIT? Yes. If you, the owner, die (or,
if the owner is not an individual, the annuitant dies) prior to the annuity
phase of the Contract, a death benefit will be payable to a person that you
name as the beneficiary. The death benefit will be the greater of two values:
(1) the value of the Contract next determined after the later of the date when
we receive due proof of death or an election of continuation or payment from
the beneficiary; or (2) the minimum guaranteed death benefit under the
Contract, which we calculate using a formula described in the Prospectus.
10. IS THERE ANYTHING ELSE I SHOULD KNOW? The Contract has several
additional features that you may be interested in, including the following:
Transfer Privilege. You can transfer from $100 to $500,000 of your
Contract's value from one Fund to another free of charge. During the
accumulation phase of the Contract, you can make as many transfers among the
Funds as you like. However, different rules apply to transfers to and from the
Fixed Account. Also, during the annuity phase, if you have chosen a variable
payment option, you can only make one transfer between Funds per
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year, without Company consent, and you cannot make transfers to the Fixed
Account. We reserve the right to charge a fee for transfers (although we do
not currently do so) and to limit the number and amount of transfers in
certain circumstances.
Dollar Cost Averaging. We offer an automated transfer privilege that we call
"dollar cost averaging," under which you can instruct us to make monthly
transfers from any one of your investment options to any other investment
options, subject to certain limitations, provided that a minimum of $100 must
be transferred to each investment option that you select under this feature.
Systematic Withdrawals. This feature allows you to have a portion of the
value of your Contract withdrawn automatically on a monthly basis during the
accumulation phase. As long as the amount of each withdrawal is at least $100,
you can elect a fixed dollar amount or elect to have your Contract's
investment gain withdrawn. Certain limitations may apply. Of course, you may
have to pay taxes and a CDSC on these withdrawals.
Free Look Right. You should also know that you have a "free look right";
i.e., the right to return the Contract to us or your sales representative and
have us cancel it within a certain number of days (usually 10, although this
varies from state to state). If you exercise this right, we will cancel the
Contract as of the day we receive your request and send you its value on that
day, which may be more or less than your initial investment in the Contract.
In some states, we are required to refund your initial investment rather than
sending you the value of your Contract.
11. WHO CAN I CONTACT FOR MORE INFORMATION? You can write to us at New
England Annuities, P.O. Box 642, Boston, Massachusetts 02116, or call us at
(800) 777-5897. You can also get a recording of daily unit values by calling
(800) 333-2501. You can also request a copy of the Prospectus or Statement of
Additional Information from New England Securities Corporation, 399 Boylston
Street, Boston, Massachusetts 02116.
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501 Boylston Street
Boston, Massachusetts 02116-3700
e-mail: [email protected]
internet: http://www.nefn.com
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EQUAL OPPORTUNITY EMPLOYER
/copyright/1998 by New England Life Insurance Company (NELICO). New England
Financial is the service mark for NELICO, Boston, MA, and related companies.
VA-155P-98
